<PAGE>
As Filed With the Securities and Exchange Commission on July 30, 1999
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
______________________
SM&A CORPORATION
----------------
(Exact name of registrant as specified in its charter)
California 33-0080929
---------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4695 MacArthur Court, Eighth Floor, Newport Beach, California 92660
-------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
SM&A CORPORATION
1995 SPACE APPLICATIONS CORPORATION NONQUALIFIED STOCK OPTION PLAN
------------------------------------------------------------------
(Full title of the plan)
Michael A. Piraino
President and Chief Operating Officer
SM&A CORPORATION
4695 MacArthur Court, Eighth Floor
Newport Beach, California 92660
-------------------------------
(Name and address of agent for service)
(949) 975-1550
--------------
(Telephone number, including area code, of agent for service)
COPY TO:
-------
Thomas J. Crane, Esq.
Rutan & Tucker, LLP
611 Anton Boulevard, Fourteenth Floor
Costa Mesa, California 92626
(714) 641-5100
<TABLE>
<CAPTION>
Calculation of Registration Fee
=======================================================================================================================
Proposed Proposed
Title of securities Amount to be maximum offering maximum aggregate Amount of
to be registered registered/(1)/ price per unit offering price/(2)/ registration fee
<S> <C> <C> <C> <C>
1995 SPACE APPLICATIONS CORPORATION
NONQUALIFIED STOCK OPTION PLAN
Common Stock, no par value 311,074 Shares $7.875 $2,449,707.70 $681.02
=======================================================================================================================
</TABLE>
(1) Pursuant to the Agreement and Plan of Reorganization and Merger dated as of
May 18, 1998 (the "Merger Agreement"), among SM&A Corporation (the
"Registrant"), SAC Acquisition, Inc., Space Applications Corporation and
Roger H. Skinner, the Registrant assumed, effective as of May 29, 1998, all
of the outstanding options to purchase common stock of Space Applications
Corporation under the 1995 Space Applications
<PAGE>
Corporation Nonqualified Stock Option Plan, and such options became
exercisable to purchase shares of the Registrant's Common Stock, with
appropriate adjustments to the number of shares and exercise price of each
assumed option. The Merger Agreement provides that the Registrant will
issue additional shares of the Registrant's Common Stock if, upon the
effective date of a registration statement on Form S-8, the average closing
price of the Registrant's Common Stock on the NASDAQ National Market for
the twenty (20) trading days immediately before the effective date of the
registration statement (the "Registration Closing Average") is less than
$13.931. The Registrant filed a registration statement on Form S-8 with the
Securities and Exchange Commission on May 27, 1999. The Registrant must
issue to the former SAC shareholders that number of shares of the
Registrant's Common Stock per share issued in the merger, valued at the
Registration Closing Average, equal to the difference between $13.931 and
the Registration Closing Average. The average closing price of the
Registrant's common stock for the twenty trading days up to and including
May 26, 1999 was $6.983 and, therefore, an aggregate of 166,066 additional
shares of the Registrant's Common Stock are being issued to former SAC
shareholders.
(2) Computed pursuant to Rules 457(c) and 457(f)on the basis of the average of
the high and low sales price reported for such securities by The Nasdaq
National Market on July 27, 1999.
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<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
ITEM 1. Plan Information.
----------------
Not filed as part of this Registration Statement pursuant to Note to
Part I of Form S-8.
ITEM 2. Registrant Information and Employee Plan Annual Information.
-----------------------------------------------------------
Not filed as part of this Registration Statement pursuant to Note to
Part I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. Incorporation of Documents by Reference.
---------------------------------------
The following documents are incorporated by reference in this
Registration Statement:
(a) Registrant's Annual Report on Form 10-K (File No. 0-23585) for
the fiscal year ended December 31, 1998, filed with the Securities and Exchange
Commission (the "Commission") on March 31, 1999.
(b) Registrant's Proxy Statement dated April 19, 1999, filed in
connection with the Registrant's Annual Meeting of Shareholders held on May 18,
1999.
(c) Registrant's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999, filed with the Commission on May 17, 1999.
(d) All reports of the Registrant filed pursuant to Section 13(a) and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
since the fiscal year ended December 31, 1998;
(e) The description of the Registrant's securities contained in the
Registrant's registration statement on Form 8-A (File No. 000-23585) filed under
the Exchange Act on January 5, 1997, together with any amendment or report
filed pursuant to such Exchange Act amending or updating such description.
(f) Information concerning options issued under the 1995 Space
Applications Corporation Nonqualified Stock Option Plan, including the amounts
outstanding, exercises, prices and expiration dates, which will be included in
the future, either in the Registrant's proxy statements, annual reports or
appendices to this Registration Statement.
All reports and other documents subsequently filed by the Registrant
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold, or which deregisters all securities remaining
unsold, shall be deemed incorporated by reference into this Registration
Statement and shall be a part hereof from the date of filing such documents.
For purposes of this Registration Statement, any document or any
statement contained in a document incorporated or deemed to be incorporated
herein by reference shall be deemed to be modified or
-3-
<PAGE>
superseded to the extent that a subsequently filed document or a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated herein by reference modifies or supersedes such
document or such statement in such document. Any statement so modified or
superseded shall not be deemed, except as to modified or superseded, to
constitute a part of this Registration Statement.
The Registrant shall provide without charge to each Participant for
whom this Prospectus is delivered, upon written or oral request of such person,
a copy of any and all of the information that has been incorporated by reference
in the Registration Statement. Such requests should be directed to: Chief
Financial Officer, SM&A Corporation, 4695 MacArthur Court, Eighth Floor, Newport
Beach, California 92660, (949) 975-1550.
ITEM 4. Description of Securities.
-------------------------
Not Applicable
ITEM 5. Interests of Named Experts and Counsel.
--------------------------------------
Not Applicable
ITEM 6. Indemnification of Directors and Officers.
-----------------------------------------
The Registrant's Amended and Restated Articles of Incorporation (the
"Articles") provide that the liability of the Registrant's directors for
monetary damages shall be eliminated to the fullest extent permissible under
California law. This is intended to eliminate the personal liability of a
director for monetary damages in an action brought by or in the right of the
Registrant for breach of a director's duties to the Registrant or its
shareholders except for liability: (i) for acts or omissions that involve
intentional misconduct or a knowing and culpable violation of law; (ii) for acts
or omissions that a director believes to be contrary to the best interest of the
Registrant or its shareholders or that involve the absence of good faith on the
part of the director; (iii) for any transaction for which a director derived an
improper benefit; (iv) for acts or omissions that show a reckless disregard for
the director's duty to the Registrant or its shareholders in circumstances in
which the director was aware, or should have been aware, in the ordinary course
of performing a director's duties, of a risk of serious injury to the Registrant
or its shareholders; (v) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of the director's duty to
the Registrant or its shareholders; (vi) with respect to certain transactions,
or the approval of transactions in which a director has a material financial
interest; and (vii) expressly imposed by statute, for approval of certain
improper distributions to shareholders or certain loans or guarantees.
The Articles also authorize the Registrant to provide indemnification
to its agents (as defined in Section 317 of the California Corporations Code),
through the Registrant's Amended and Restated Bylaws (the "Bylaws") or through
agreements with such agents or both, for breach of duty to the Registrant and
its shareholders, in excess of the indemnification otherwise permitted by
Section 317 of the California Corporations Code, subject to the limits on such
excess indemnification set forth in Section 204 of the California Corporations
Code.
The Bylaws of the Registrant provide for indemnification of the
Registrant's officers, directors, employees, and other agents to the extent and
under the circumstances permitted by California law. The Bylaws further provide
that no indemnification shall be made in the case of a derivative suit in
respect to any claim as to which such person has been adjudged to be liable to
the corporation, except with court approval, nor shall indemnification be made
for amounts paid in settling or otherwise disposing of a pending action
-4-
<PAGE>
without court approval, or for expenses incurred in defending a pending action
which is settled or otherwise disposed of without court approval.
Indemnification under the Bylaws is mandatory in the case of an agent of the
Registrant (present or past) who is successful on the merits in defense of a
suit against him or her in such capacity. In all other cases where
indemnification is permitted by the Bylaws, a determination to indemnify such
person must be made by a majority of a quorum of disinterested directors (if a
quorum of directors is not obtainable, by independent legal counsel in a written
legal opinion), a majority of disinterested shareholders, or the court in which
the suit is pending.
The Registrant has entered into agreements to indemnify its directors
and executive officers in addition to the indemnification provided for in the
Articles and Bylaws. Among other things, these agreements provide that the
Registrant will indemnify, subject to certain requirements, each of the
Registrant's directors and executive officers for certain expenses (including
attorneys' fees), judgments, fines and settlement amounts incurred by such
person in any action or proceeding, including any action by or in the rights of
the Registrant, on account of services by such person as a director or officer
of the Registrant, or as a director or officer of any other company or
enterprise to which the person provides services at the request of the
Registrant.
ITEM 7. Exemption from Registration Claimed.
-----------------------------------
Not Applicable
ITEM 8. Exhibits.
--------
4.1 1995 Space Applications Corporation Nonqualified Stock
Option Plan.
4.2 Form of Non-Qualified Stock Option Agreement.
5 Opinion of Rutan & Tucker, LLP.
23.1 Consent of Rutan & Tucker, LLP (included in Exhibit 5).
23.2 Consent of KPMG LLP.
24.1 Power of Attorney (see p. 8).
ITEM 9. Undertakings.
------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement (unless the
information required by paragraphs (i) and (ii) below is contained in periodic
reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this Registration Statement):
(i) To include any prospectus required by Section 10(a)(3) of
the Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually
-5-
<PAGE>
or in the aggregate, represent a fundamental change in the information
set forth in this Registration Statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at the time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
-6-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Newport Beach, State of California on July 20, 1999.
SM&A CORPORATION,
a California Corporation
By: /s/ MICHAEL A. PIRAINO
-----------------------------------------------
Michael A. Piraino, President and Chief
Operating Officer
-7-
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Michael A. Piraino and Edward A. Beeman,
jointly and severally, his attorneys-in-fact and agents, each with the power of
substitution and resubstitution, for him and in his name, place or stead, in any
and all capacities, to sign any amendment to this Registration Statement on Form
S-8, and to file such amendments, together with exhibits and other documents in
connection therewith, with the Securities and Exchange Commission, granting to
each attorney-in-fact and agent, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully as he might or could do in person, and ratifying and
confirming all that the attorneys-in-fact and agents, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons, including a
majority of the Board of Directors, in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- -------------------------- --------------------------------------- -------------
<S> <C> <C>
/S/ STEVEN S. MYERS Chairman of the Board and Chief July 20, 1999
- --------------------------
Steven S. Myers Executive Officer (Principal Executive
Officer)
/S/ MICHAEL A. PIRAINO President, Chief Operating Officer and July 20, 1999
- --------------------------
Michael A. Piraino Director
/S/ EDWARD A. BEEMAN Senior Vice President, Chief Financial July 20, 1999
- --------------------------
Edward A. Beeman Officer and Secretary (Principal
Financial Officer and Principal
Accounting Officer)
/S/ J. CHRISTOPHER LEWIS Director July 20, 1999
- --------------------------
J. Christopher Lewis
/S/ MALCOLM R. CURRIE Director July 20, 1999
- --------------------------
Malcolm R. Currie
/S/ JAMES R. MELLOR Director July 20, 1999
- --------------------------
James R. Mellor
</TABLE>
-8-
<PAGE>
EXHIBITS INDEX
4.1 1995 Space Applications Corporation Nonqualified Stock Option Plan
4.2 Form of Non-Qualified Stock Option Agreement
5 Opinion of Rutan & Tucker, LLP
23.1 Consent of Rutan & Tucker, LLP (included in Exhibit 5)
23.2 Consent of KPMG LLP
24.1 Powers of Attorney (see p. 8)
-9-
<PAGE>
Exhibit 4.1
SPACE APPLICATIONS CORPORATION
------------------------------
NONQUALIFIED STOCK OPTION PLAN
------------------------------
1. Purpose.
-------
The purpose of this Space Applications Corporation Nonqualified Stock
Option Plan (the "Plan") is to provide an additional incentive to directors and
selected employees for the successful operation of Space Applications
Corporation (the "Corporation") through ownership of stock therein and to
encourage such employees to remain in the employ of the Corporation or its
subsidiary corporations. It is intended that none of the options granted
pursuant to the Plan will qualify as Incentive Stock Options, as defined in
Section 422A of the Internal Revenue Code of 1986, as amended (the "Code").
2. Administration.
---------------
(a) The Plan shall be administered by a committee (the "Committee")
appointed by the Board of Directors of the Corporation (the "Board"). The
Committee shall consist of not less than one (1) member of the Board and such
other person or persons as the Board may determine (provided that the Committee
may, if the Board so determines, consist of one member). The Board may from
time to time remove members from, or add members to, the Committee. The
Committee shall hold meetings at such times and places as it may determine. If
the Committee consists of more than one person, the vote of a majority of the
Committee at a meeting at which a quorum is present, or acts approved in writing
by the unanimous consent of the members of the Committee, shall be the valid
acts of the Committee.
(b) The Committee may from time to time at its discretion authorize the
granting of options to purchase common stock of the Corporation ("Options") to
such eligible employees as it may select and for such number of shares as it may
designate, subject to the provisions of Paragraphs 3 and 4. The interpretation
and construction by the Committee of any provisions of the Plan or of any Option
shall be final unless otherwise determined by the Board. No member of the Board
or the Committee shall be liable for any action taken or determination made in
good faith with respect to the Plan or any Option.
3. Eligibility.
-----------
The persons who shall be eligible to be granted Options shall be such
employees and directors (whether or not they are employees) of the Corporation
(including any parent or subsidiary thereof) as the Committee shall select from
time to time. No person shall be required to participate in the Plan or to
accept or exercise any Option. No member of the Committee shall be eligible to
receive an Option.
<PAGE>
4. Limitation on Shares Subject to Options.
---------------------------------------
The common stock of the Corporation (the "Stock") which may be issued and
sold under the Plan shall not exceed, in the aggregate, 200,000 shares of Stock,
except as such number of shares may be adjusted in accordance with Paragraph
5(g). If an Option expires or is terminated or surrendered without having been
fully exercised, the unpurchased shares of Stock subject thereto shall again be
available for the purposes of the Plan.
5. Terms and Conditions of Options.
-------------------------------
The grant of an Option shall be evidenced by an agreement between the
Corporation and the holder of an Option (the "Option Holder") in such form and
substance as the Committee shall from time to time approve. Such an agreement
shall not be inconsistent with the following terms and conditions:
(a) Option Price. Except as provided in the next sentence, the purchase
------------
price per share for shares of Stock under any Option granted under this Plan
(the "Option Price") shall be the Book Value Per Share of Stock or any other
price which the Committee may reasonably determine to reflect the value of the
shares at the time of issuance. In the case of persons who at the time of the
grant of the option are the holders of in excess of ten percent (10%) of the
outstanding capital stock of the Corporation, the Option Price under any Option
granted under this Plan shall be not less than one hundred ten percent (110%) of
the Book Value Per Share of Stock. The "Book Value Per Share of Stock" means
the shareholders' equity of the Corporation as determined by the last audited
financial statements of the Corporation issued prior to the event requiring
that Book Value Per Share of Stock be computed, divided by the number of shares
of Stock outstanding, as of the last day of the fiscal year reflected in such
financial statements. In computing Book Value Per Share of Stock, no adjustment
shall be made for outstanding options, warrants or unexercised rights to
purchase Stock or shares of stock issued or repurchased following the last day
of the fiscal year reflected in such financial statements.
(b) Term and Exercise of Options. The term of each Option shall be as
----------------------------
specified in the agreement evidencing the granting thereof (the "Option
Period"), provided that such term shall not be greater than ten (10) years from
the date of the option agreement. Options will be exercisable at such time or
times, and subject to such restrictions and conditions, as set forth in this
Paragraph 5 and as the Committee shall in each instance approve, which need not
be uniform for all Option Holders; provided, however, that exercisability will
be at no less a rate than twenty percent (20%) of the options granted pursuant
to that agreement per year over a five (5) year period, and except as provided
in Paragraph 5(d), no Option may be exercised by any Option Holder who shall not
have met, both at the date of exercise and continuously since the date of grant,
the eligibility criteria set forth in Paragraph 3.
(c) Leaves of Absence. The option agreements issued pursuant to the Plan
-----------------
may contain such provisions as the Committee shall determine with respect to
approved leaves of absence.
(d) Retirement, Permanent Disability or Death of an Option Holder. In the
-------------------------------------------------------------
event of an Option Holder's retirement as an employee of the Corporation or any
parent or subsidiary thereof (the "Controlled Group"), the Option Holder's
Options or any unexercised portion thereof, to the
<PAGE>
extent they were exercisable on the date of retirement, shall be exercisable by
the Option Holder or by his or her personal representative, heir or legatee at
any time prior to the expiration of one hundred twenty (120) days from the date
of retirement. In the event of an Option Holder's permanent disability or death
while an employee of the Controlled Group, the Option Holder's Options or any
unexercised portion thereof, to the extent they were exercisable on the date of
permanent disability or death, shall be exercisable by the Option Holder or by
his or her personal representative, heir or legatee at any time prior to the
expiration of one hundred eighty (180) days from the date of permanent
disability or death. For purposes of this paragraph, the determination of
whether an Option Holder is permanently disabled shall be made by the Committee,
based upon relevant medical information.
(e) Termination of Employment. If the employment of an Option Holder with
-------------------------
all members of the Controlled Group terminates for any reason other than (i) his
or her death, permanent disability or retirement, or (ii) as a result of a
surviving or substitute corporation substituting its stock, or that of its
parent or subsidiary, for stock of the Corporation subject to the Option, then
any unexercised portion of the Option Holder's Options, to the extent they were
exercisable on the date of termination, shall be exercisable by the Option
Holder at any time prior to the expiration of thirty (30) days from the date of
termination. A leave of absence approved by the Committee shall not be deemed
to be a termination of employment unless the Committee shall terminate its
approval in which case the Option Holder may exercise his or her Options at any
time prior to thirty (30) days from the date of termination of such approval.
(f) Payment. At the discretion of the Committee, each Option may provide
-------
that, upon its exercise, the Option Price shall be payable in full in cash or by
good personal check or in installments pursuant to a promissory note by the
Option Holder to the Corporation in a form to be approved by the Committee. The
Committee may also, in its sole discretion, make such determination at the time
of exercise of the Option. The Committee may also, in its sole discretion,
allow an Option Holder to exercise his or her Option by surrendering previously
issued Stock or other options to purchase Stock (whether issued under the Plan
or otherwise) held by the Option Holder having a-value (computed by the
Committee) equal to the Option Price. In valuing such options or stock
surrendered upon the exercise of Options in payment of the Option Price, the
Committee may, but is not required to, place the value at the Book Value Per
Share of Stock.
(g) Adjustments.
-----------
(i) In the event of a stock dividend, stock split, recapitalization,
merger, consolidation, split-up, combination of shares, or any other change in
the shares of Stock, the shares available for purposes of the Plan or subject
to outstanding Options shall correspondingly be increased, decreased, or
changed, so that by exercise of his or her Option, the Option Holder may
receive, without change in aggregate Option Price, the total number of
securities as so increased, decreased or changed as he or she would have
received if he or she had exercised the Option immediately prior to such event
and had continued to hold the securities so purchased until affected by such
event (provided, however, that the Committee may make such adjustments for,
including elimination of, fractional shares as it in its sole discretion shall
determine).
(ii) Notwithstanding any other provision of the Plan, upon the
approval by the Board of the dissolution or liquidation of the Corporation, or
the consolidation of the Corporation
<PAGE>
into another corporation, or any merger in which the Corporation is not the
surviving corporation or in any merger in which the shareholders of the
Corporation immediately prior to such merger do not continue to hold stock of
the Corporation immediately after such merger, or the sale of all or
substantially all of the Corporation's assets, that the surviving corporation
after a merger or consolidation with the Corporation (or the Corporation if its
shareholders immediately prior to the merger do not continue to hold shares of
the Corporation immediately after the merger) or the purchaser of all or
substantially all of the Corporation's assets may, in its discretion, cause to
be substituted or assumed a new option for any outstanding Option, whether or
not then exercisable, in connection with such merger or consolidation, such new
option to be applicable to the stock of the surviving or substituted
corporation, or any parent or subsidiary thereof or any other consideration
provided to shareholders in any such merger, consolidation or sale of assets.
Any such new option shall contain such terms and provisions as shall be required
in order to be not less favorable to the Option Holder than those contained in
his or her prior Option (except for elimination of fractional shares) had such
Option Holder exercised his or her Option immediately prior to such event. To
the extent that the foregoing adjustments relate to the Stock, such adjustments
shall be made by the Committee, whose determination in that respect shall be
final, binding and conclusive.
(h) Investment Purpose. As a condition to the exercise of all or any
------------------
portion of an Option, the Corporation may, if it shall deem it necessary or
desirable at the time of exercise, for any reason including, without limitation,
any reason connected with any law or regulation of any governmental authority
relating to the regulation of securities, require the Option Holder to represent
in writing to the Corporation, in a form satisfactory to the Corporation, that
it is the Option Holder's then intention to acquire the Stock subject to the
Option for investment and not with a view to the sale or distribution thereof.
In such event no shares of Stock shall be issued to such Option Holder until the
Corporation is satisfied with such representation. The Corporation may
thereafter provide its consent to the transfer of all or any part of such shares
in such manner and under such circumstances as the Corporation may determine.
(i) Modification, Extension and Renewal of Options. Subject to the terms
----------------------------------------------
and conditions and within the limitations of the Plan, the Committee may modify,
extend, renew any outstanding Option, or accept the surrender of any outstanding
Option (to the extent not previously exercised) and authorize the granting of a
new Option in substitution therefor (to the extent not previously exercised).
Notwithstanding the foregoing, except as authorized by this Plan, no
modification of an Option shall, without the consent of the Option Holder, alter
or impair any rights or obligations under any Option previously granted.
(j) Restrictions on Transfer. The agreements required under this Paragraph
------------------------
5 shall contain the restrictions on transferability set forth in Paragraph 7.
(k) Additional Provisions. The agreements required under this Paragraph 5
---------------------
shall contain such other provisions or restrictions as the Board or the
Committee shall deem advisable or necessary. Any of the time limitations set
forth in this Paragraph 5 may be lengthened or shortened in the sole discretion
of the Committee.
<PAGE>
6. Nonassignability of Options.
---------------------------
Except as provided in this Paragraph 6, no Option shall be assignable or
transferable by the Option Holder except by will or by the laws of descent and
distribution. During the lifetime of an Option Holder, any Option granted to
such Option Holder shall be exercisable only by such Option Holder or, if such
Option Holder is permanently disabled, by his or her personal representative.
Notwithstanding the above, an Option Holder may transfer all or any part of the
Options to a living trust created by such Option Holder (and such trust may re-
transfer such Options to the Option Holder), provided that (i) such Option
Holder is a grantor of such trust; (ii) the beneficiaries of such trust are
members of such Option Holder's immediate family; and (iii) such trust and the
transfer of the Options thereto are revocable by the Option Holder during his
lifetime. For purposes of this Paragraph 6, "immediate family" shall be defined
as a spouse or domestic partner at the time of such transfer, mother, father,
child, grandchild, brother or sister of the Option Holder or his or her spouse
or domestic partner.
7. Repurchase of Stock.
-------------------
(a) Restrictions on Transfer. The Option Holder, the Option Holder's
------------------------
heirs, legatees, executors, administrators and personal representatives, will
not at any time sell or offer to sell, transfer by gift or otherwise, pledge or
otherwise encumber, any or all of the Stock acquired pursuant to the exercise of
the Option without first complying with the provisions of this Article 7. The
certificate or certificates representing the Stock may in the discretion of the
Committee or the Board bear legends referring to such provisions and conditions.
(b) Notice of Proposed Sale. Should the Option Holder desire during his or
-----------------------
her lifetime, and whether or not he or she is then employed by the Corporation,
to sell any of his or her shares of Stock acquired on the exercise of Options,
or any interest in such shares, he or she shall first offer to the Corporation
the right to purchase such shares by serving written notice on the Corporation.
The Notice must specify: (1) the name and address of the person or firm to whom
the Option Holder intends to sell the shares or interest in the shares; (2) the
number of shares or the interest in shares the Option Holder proposes to sell;
(3) the price or amount per share to be paid to the Option Holder for the
proposed sale; and (4) all other terms and conditions of the proposed sale.
This Notice may, at the election of the Option Holder, specify that the Option
Holder desires to sell the shares directly to the Corporation, in which event
the price specified in the Notice shall be the Book Value Per Share of Stock of
the Corporation for each share of Stock offered for purchase.
(c) The Corporation's Option to Purchase. The Committee shall have sixty
------------------------------------
(60) days after Notice by the Option Holder is received by it to determine
whether the Corporation or its assignee shall purchase the shares of Stock
specified in the Notice at the price specified in that Notice, or at the Book
Value Per Share of Stock, whichever is lower. The payment terms of such
purchase shall be, at the election of the Corporation, as set forth in the
Notice. or in annual installments over a period of not to exceed five (-5) years
on terms set by the Committee. A payment made in annual installments shall bear
interest equal to or (greater than the applicable Federal Rate, as determined
pursuant to Section 1274(d) of the Code.
(d) Exercise of Option by the Corporation. Should the Corporation or its
-------------------------------------
assignee, within the time specified in Paragraph 7(c), elect to purchase all of
the shares of Stock specified in the
<PAGE>
Notice, the Secretary of the Corporation shall promptly give written notice of
that fact to the Option Holder.
Within ninety (90) days thereafter. and upon deliver to it of the
certificate or certificates representing the shares of Stock specified in the
Notice duly endorsed for transfer, the Corporation or its assignee shall deliver
to the Option Holder any cash, notes or other instruments required to consummate
the purchase of such shares. The Corporation may, in its discretion and in full
payment of the purchase price, deliver to the Option Holder a promissory note
reflecting the terms of payment as provided for in the agreement evidencing the
grant of the Option exercised.
(e) Failure of the Corporation to Exercise Option. Should the Corporation
---------------------------------------------
fail to purchase, within the time and in the manner set forth above, all the
shares specified in the Notice, the Option Holder shall have the right, subject
to the conditions set forth below, to sell his/her shares in accordance with all
of the terms and conditions set forth in the Notice for a period of sixty (60)
days from the last date which the Corporation was entitled to exercise its
rights to purchase such shares. The right of the Option Holder to sell shall be
conditioned upon the execution by the transferee of an agreement to be bound by
all of the terms of the stock option agreement, including the restrictions on
transfer and the right to repurchase set forth in this Plan. In the event the
Option Holder does not sell such shares pursuant to the terms set forth in the
Notice within the time prescribed herein, no sale may take place without further
compliance with the terms of this Paragraph 7.
(f) Transfer Upon Discontinuance of Employment. Within sixty (60) days of
------------------------------------------
the discontinuance of employment of the option Holder with all members of the
Controlled Group, under any and all circumstances, whether voluntary or
involuntary, with or without cause, except for retirement, permanent disability
or death, the Corporation shall have the option and right to buy all of the
Stock acquired on the exercise of Options at the higher of the original purchase
price or the Book Value Per Share of Stock, subject to the same terms and
conditions as set forth in this Paragraph 7. Such purchase price may be paid in
cash or by delivery of a promissory note reflecting the terms referred to in
Paragraph 7(c). A leave of absence approved by the Committee shall not be
deemed to be a termination of employment unless the Committee shall terminate
its approval.
(g) Retirement, Permanent Disability or Death of an Option Holder. Within
-------------------------------------------------------------
(i) one hundred fifty (150) days after the retirement of the Option Holder, or
(ii) two hundred ten (210) days after the death or permanent disability of the
Option Holder, the Corporation shall have the right, but not the obligation to,
at the higher of the original purchase price or the Book Value Per Share of
Stock, repurchase from the Option Holder or his or her estate all of the Stock
acquired on the exercise of Options owned by the Option Holder or the Option
Holder's personal representative, heir or legatee. Such purchase price may be
paid in cash or by delivery of a promissory note reflecting the terms referred
to in Paragraph 7(d).
(h) Stock Vested in Spouse. Upon the death of the Option Holder, should
----------------------
the Option Holder's spouse become the owner of all or a part of the Option
Holder's shares, the Option Holder's spouse shall sell, and the Corporation
shall, at the higher of the original purchase price or the Book Value Per Share
of Stock, repurchase from the spouse, all of the Stock acquired on the exercise
of Options to which title shall have vested in the spouse upon and pursuant to
the death of the Option Holder. Such purchase shall be deemed to take place
simultaneously with the initial payment for
<PAGE>
the purchase of the Stock from the estate of the Option Holder. Such purchase
price may be paid in cash or by delivery of the promissory note referred to in
Paragraph 7(d).
(i) Termination Upon Public Trading of Stock or Acquisition of
----------------------------------------------------------
Corporation. In the event of (i) the consolidation of the Corporation into
- -----------
another corporation; (ii) any merger in which the Corporation is not the
surviving corporation or any merger in which the shareholders immediately prior
to such merger do not continue to hold stock of the Corporation or the surviving
corporation immediately after such merger; or (iii) the sale of all or
substantially all of the assets of the Corporation; or (iv) the Corporation
receiving an opinion of counsel that it is subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended, as well as a determination
by the Committee that a liquid public market exists for the Stock, then the
restrictions on transferability of and the right and/or obligation to repurchase
the Stock acquired on the exercise of Options set forth in this Paragraph 7
shall terminate. The provisions of this Paragraph 7(i) shall not apply to a
merger or other reorganization the principal purpose of which is to change the
state of incorporation of the Corporation.
(j) Transfer to Trust. Notwithstanding any provision to the contrary
-----------------
contained in this Paragraph 7, an Option Holder may transfer all or any part of
the Stock acquired pursuant to the exercise of an Option to a living trust
created by such Option Holder (and such trust may re-transfer such shares to the
Option Holder), provided that (i) such Option Holder is a grantor of such trust;
(ii) the beneficiaries of such trust are members of such Option Holder's
immediate family; and (iii) such trust and the transfer of Stock thereto are
revocable by the Option Holder during his or her lifetime. For purposes of this
Paragraph 70), "immediate family" shall be defined as a spouse or domestic
partner at the time of such transfer, mother, father, child, Grandchild, brother
or sister of the Option Holder or his or her spouse or domestic partner. Any
reference in this Plan to Stock held by an Option Holder shall include Stock
transferred to the Option Holder's revocable living trust pursuant to the terms
of this Paragraph 7(j).
8. Duration of the Plan.
--------------------
The term of this Plan shall expire ten (10) years after it is adopted by
the Board of Directors. The provisions of Paragraph 7 shall remain in effect
until the occurrence of one of the terminating events set forth in Paragraph
7(i). The remaining portions of the Plan shall remain in effect until all
shares of Stock subject to or which may become subject to the Plan shall have
been purchased pursuant to the exercise of Options.
9. Rights as a Stockholder.
-----------------------
No Option Holder shall have the rights of a stockholder with respect to
shares of Stock subject to an Option until such Option has been validly
exercised and the shares of Stock issued pursuant thereto.
<PAGE>
10. Effect of the Plan on the Rights of Employees and Employer.
----------------------------------------------------------
Neither the adoption of the Plan nor any action of the Board or the
Committee shall be deemed to give any employee of any member of the Controlled
Group any right to be granted an Option; and nothing in the Plan or in any
Option shall confer any right to any employee of any member of the Controlled
Group to continue in the employ of any such member or interfere in any way with
any rights of such member to terminate the employment of any employee at any
time.
11. Withholding Taxes.
-----------------
To satisfy any federal, state or local withholding tax requirements with
respect to the issuance of Stock pursuant to the exercise of an Option, the
member of the Controlled Group most recently employing the Option Holder shall
have the right to deduct the necessary amounts from all payments under the Plan,
whether in cash or in Stock, or to deduct the necessary amounts from other
payments such employer member of the Controlled Group makes to the Option
Holder, or to require the Option Holder to remit to such employer member of the
Controlled Group the necessary amounts. The Committee may require that the
Option Holder deposit such sums with the Corporation in addition to the exercise
price as a condition precedent to his or her exercising the Option. The
Committee may, in its discretion, provide that in connection with the exercise
of an Option, the Option Holder will receive cash payments in amounts necessary
to reimburse the Option Holder for his or her income tax liability from such
exercise and the payment made pursuant to this Paragraph 11.
12. Amendment and Termination.
--------------------------
The Board may from time to time alter, amend, suspend or terminate the Plan
with respect to any shares of Stock for which Options have not been granted.
Any such action shall in no way alter or impair the right of the Corporation to
repurchase Stock pursuant to the provisions of Paragraph 7.
13. Use of Funds.
------------
The proceeds received by the Corporation from the sale of Stock pursuant to
the exercise of any Option shall be used for general corporate purposes.
14. Financial Statements.
---------------------
Each year following the close of the fiscal year of the Corporation, the
Option Holder, if he or she so requests, shall be provided with financial
statements of the Corporation for the previous fiscal year when such financial
statements are generally available.
Date Plan Adopted by Board of Directors: June 23, 1995
<PAGE>
Exhibit 4.2
NON-QUALIFIED STOCK OPTION AGREEMENT
OPTION TO PURCHASE COMMON STOCK
OF
SM&A CORPORATION
VOID AFTER
__________________
THIS STOCK OPTION AGREEMENT (this "Option Agreement") SUPERSEDES AND REPLACES
ANY PREVIOUS SPACE APPLICATIONS CORPORATION STOCK OPTION AGREEMENT PREVIOUSLY
DELIVERED TO HOLDER (AS DEFINED HEREIN). THE TERMS AND CONDITIONS OF THE OPTION
SHALL BE GOVERNED BY THE 1995 SPACE APPLICATIONS CORPORATION NONQUALIFIED STOCK
OPTION PLAN (THE "PLAN"). ANY CONFLICT BETWEEN THE TERMS AND CONDITIONS OF THE
PLAN AND THOSE CONTAINED HEREIN SHALL BE RESOLVED IN FAVOR OF THE PLAN.
This certifies that ________________________________ ("Holder") is entitled
to purchase from SM&A Corporation, a California corporation (the "Corporation"):
_____________________________________________
shares of Common Stock of the Corporation (the "Shares"), subject to the terms
and conditions of the Plan and such additional terms and conditions contained
herein. A copy of the Plan is attached hereto as Exhibit "A". Capitalized
-----------
terms not otherwise defined herein shall have such definition as is set forth in
the Plan. The number of shares of Common Stock purchasable hereunder may be
adjusted upon the occurrence of certain events, as specified in the Plan. The
Option granted under this Option Agreement is not intended to be an "incentive
stock option" as set forth in Section 422 of the Internal Revenue Code of 1986,
as amended.
The purchase price to be paid for the Shares upon the exercise of all or
any portion of this Option shall be:
($ )
---------------------------------------------
per share of Common Stock purchased (the "Purchase Price").
1. Date of Grant: ______________________
-------------
<PAGE>
2. Exercise of Options; Vesting
----------------------------
Holder may exercise this Option at any time until 5:00 P.M. California time
on:
______________________ (the "Expiration Date"),
in accordance with the vesting schedule set forth below by delivery to the
Corporation, at its principal office, of:
(a) this Option Agreement;
(b) the Exercise Form, attached to this Option Agreement, duly executed
and specifying the number of Shares of Common Stock to be purchased
hereunder; and
(c) cash or a certified or official bank check payable to the order of the
Corporation in the amount of the aggregate Purchase Price for the
number of Shares to be purchased.
Upon receipt thereof, the Corporation shall, as promptly as practicable,
and in any event within 30 days thereafter, cause to be executed and delivered
to Holder a certificate or certificates for the aggregate number of the Shares
issuable upon such exercise. If this Option shall have been exercised only in
part of the total number of vested options, the Corporation shall, at the time
of delivery of such certificate or certificates, deliver to Holder a new Option
evidencing the rights of Holder to purchase the remaining Shares of Common Stock
called for by this Option, pursuant to the same terms and conditions and with
the same restrictions specified herein, and which new Option shall be of like
tenor to this Option. The Corporation shall pay all expenses, taxes and other
charges payable in connection with the preparation, issuance and delivery of
stock certificates.
All Shares of Common Stock issuable upon the exercise of this Option will
be validly issued, fully paid and nonassessable.
The Option shall vest in accordance with the following Vesting Schedule:
3. Lost, Stolen, Mutilated or Destroyed Option.
-------------------------------------------
If this Option is lost, stolen, mutilated or destroyed, the Corporation
may, on such terms as to indemnify or otherwise as the Corporation may in its
discretion impose (which shall, in the case of a mutilated Option, include the
surrender thereof), issue a new Option of like denomination, tenor and date as
this Option.
4. Restrictions on Transfer; Compliance with Securities Act.
--------------------------------------------------------
Neither this Option nor the right to purchase shares of Common Stock upon
exercise of this Option may be transferred by Holder in whole or in part except
that this Option may be exercised by Holder's conservator, trustee or estate
subject to all the terms and conditions set forth therein. To
<PAGE>
the extent not exercised by Holder on the Expiration Date, this Option and all
rights hereunder shall expire and the Option and such rights shall thereupon
automatically be cancelled and shall cease to exist. Common Stock issued upon
valid exercise of this Option in whole or in part shall not be transferable by
Holder other than in accordance with the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder, together with applicable state
securities laws.
5. Notices.
-------
Any notice or other document required or permitted to be given or delivered
to Holder shall be deemed given to him if given at the following address:
Holder: ________________________
________________________
________________________
Any such notice or other document shall be mailed first-class, postage prepaid,
to such address or such other address as shall have been furnished to the
Corporation in writing by Holder. Any notice or other document required or
permitted to be given or delivered to the Corporation shall be mailed first-
class, postage prepaid, to the Corporation at its principal executive offices at
4695 MacArthur Court, Eighth Floor, Newport Beach, California 92660, Attention:
Chief Financial Officer.
6. Applicable Law.
--------------
This Option shall be construed and enforced in accordance with and governed
by the laws of the State of California.
7. Headings.
--------
The headings herein are for convenience only and are not part of this
Option and shall not affect the interpretation hereof.
IN WITNESS WHEREOF, the Corporation has caused this Option to be executed
in its name by its President and Secretary, thereunto duly authorized.
SM&A CORPORATION,
a California corporation
By: ___________________________________
Michael A. Piraino, President
By: ___________________________________
Edward A. Beeman, Secretary
<PAGE>
Exhibit 5
July 30, 1999
SM&A Corporation
4695 MacArthur Court, Eighth Floor
Newport Beach, California 92660
Ladies and Gentlemen:
At your request, we have examined the form of Registration Statement on
Form S-8 (the "Registration Statement") to be filed by SM&A Corporation (the
"Company") with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, for the purpose of registering the sale of
shares of Common Stock of the Company upon the exercise of options granted under
the 1995 Space Applications Corporation Nonqualified Stock Option Plan, assumed
by the Company in connection with the merger of SAC Acquisition, Inc., a wholly-
owned subsidiary of the Company, with and into Space Applications Corporation.
We are familiar with the proceedings taken and proposed to be taken in
connection with the issuance and sale of the securities in the manner set forth
in the Registration Statement. Subject to completion of the proceedings
contemplated in connection with the foregoing matters, we are of the opinion
that all of the Common Stock to be issued pursuant to the Registration Statement
has been duly authorized and, when issued and sold in the manner set forth in
the Registration Statement will, upon such issuance and sale, be validly and
legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement or any amendment thereto.
Respectfully submitted,
/s/ RUTAN & TUCKER, LLP
<PAGE>
Exhibit 23.2
Consent of Independent Auditors
To the Board of Directors and Shareholders
SM&A Corporation:
We consent to incorporation by reference of our report dated January 25,
1999, except for notes 5 and 13 which are dated as of March 12, 1999, which
appears in the December 31, 1998, annual report on Form 10-K.
/s/ KPMG LLP
Orange County, California
July 30, 1999
