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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM 10-K/A
AMENDMENT NO. 2
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Fiscal Year Ended November 28, 1998
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Transition Period from __________ to
__________.
Commission file number: 000-24049
CHARLES RIVER ASSOCIATES INCORPORATED
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2372210
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
200 CLARENDON STREET, BOSTON, MASSACHUSETTS 02116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 425-3000
Securities registered pursuant to Section 12(b) of the Act:
NONE
(Title of class)
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, WITHOUT PAR VALUE
(Title of class)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's
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knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to the Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates
of the registrant as of May 3, 1999 (based on the closing sale price of $21.688
as quoted by the Nasdaq National Market as of such date) was approximately
$128,740,315.
As of May 5, 1999, the registrant had outstanding 8,468,544 shares of
common stock.
Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, the
registrant hereby amends its Annual Report on Form 10-K for the year ended
November 28, 1998 by amending and restating Item 11 of Part III in its entirety
as follows:
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ITEM 11. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
Compensation Summary. The following table sets forth certain
information concerning the compensation earned by CRA's Chief Executive Officer
and other executive officers for services rendered in all capacities to CRA for
the fiscal years ended November 29, 1997 and November 28, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------------- -------------
AWARDS
OTHER -------------
ANNUAL SECURITIES ALL OTHER
COMPEN- UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) SATION($)(2) OPTIONS(#)(3) SATION($)(4)
--------------------------- ---- --------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
James C. Burrows................. 1998 $285,000 $800,000 -- -- $17,779
President and Chief Executive 1997 285,000 615,000 -- -- 22,371
Officer
Laurel E. Morrison............... 1998 125,000 175,000 -- 12,000 16,164
Chief Financial Officer, Vice 1997 100,000 105,000 -- -- 20,519
President, Finance and
Administration, and Treasurer
Firoze E. Katrak................. 1998 232,500 500,000 -- -- 16,739
Vice President 1997 220,000 300,000 -- -- 21,331
William B. Burnett............... 1998 262,300 875,000 -- 3,500 18,184
Vice President 1997 220,000 490,000 -- -- 22,776
</TABLE>
- -----------------
(1) For fiscal 1997, includes supplemental compensation bonuses of $115,000,
$5,000, $100,000 and $65,000 for Dr. Burrows, Ms. Morrison, Dr. Katrak and
Mr. Burnett, respectively.
(2) Other annual compensation in the form of perquisites and other personal
benefits has been omitted because the aggregate amount of those
perquisites and other personal benefits was less than $50,000 and
constituted less than 10% of the executive officers' respective total
annual salary and bonus.
(3) Represents shares of common stock issuable upon exercise of stock options
granted under CRA's stock option plan.
(4) Represents contributions by CRA on behalf of the executive officer to
CRA's Savings & Retirement Plan and Trust and premiums paid by CRA for
term life insurance for the benefit of the executive officer.
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Option Grants in Last Fiscal Year. The following table sets forth for
CRA's Chief Executive Officer and other executive officers certain information
concerning stock options granted under CRA's stock option plan during the fiscal
year ended November 28, 1998.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------------------- POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF ANNUAL RATE OF STOCK
SECURITIES PERCENT OF TOTAL PRICE APPRECIATION FOR
UNDERLYING OPTIONS GRANTED EXERCISE OPTION TERM(4)
OPTIONS TO EMPLOYEES IN PRICE ----------------------
NAME GRANTED(#)(1) FISCAL YEAR(2) ($/SH)(3) EXPIRATION DATE 5%($) 10%($)
---- ------------- ---------------- --------- ------------------ -------- --------
<S> <C> <C> <C> <C> <C> <C>
James C. Burrows........ -- -- -- -- -- --
Laurel E. Morrison...... 12,000 3.8% $23.75 September 14, 2008 $179,280 $454,200
Firoze E. Katrak........ -- -- -- -- -- --
William B. Burnett...... 3,500 1.1 23.75 September 14, 2008 52,290 132,475
</TABLE>
- -----------------------
(1) Represents shares of common stock issuable upon exercise of incentive
options granted on September 14, 1998 under CRA's stock option plan. The
option granted to Ms. Morrison vests in four equal annual installments,
the first of which vests on September 14, 1999. The option granted to Mr.
Burnett vested immediately upon grant.
(2) In fiscal 1998, CRA granted to employees options to purchase an aggregate
of 316,500 shares of common stock under CRA's stock option plan.
(3) All options were granted at fair market value as determined by the board
of directors on the date of grant.
(4) Amounts reported in this column represent hypothetical values that may be
realized upon exercise of the options immediately prior to the expiration
of their term, assuming the specified compounded rates of appreciation of
the price of the common stock over the term of the options. These numbers
are calculated based on rules promulgated by the Securities and Exchange
Commission and do not represent CRA's estimate of future stock price
growth. Actual gains, if any, on stock option exercises and common stock
holdings depend on the timing of the exercise of the option and the sale
of the common stock, as well as the future performance of the common
stock. The rates of appreciation assumed in this table may not be achieved
and the officers may never receive the amounts reflected. This table does
not take into account any appreciation in the price of the common stock
from the date of grant to the current date. The values shown are net of
the option exercise price, but do not include deductions for taxes or
other expenses associated with the exercise.
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Fiscal Year-End Option Values. The following table sets forth certain
information concerning stock options held at November 28, 1998 by CRA's Chief
Executive Officer and other executive officers. No executive officer exercised
any stock options in fiscal 1998.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR-END AT FISCAL YEAR-END($)(1)
---------------------------------- ----------------------------------
NAME EXERCISABLE(#) UNEXERCISABLE(#) EXERCISABLE($) UNEXERCISABLE($)
---- -------------- ---------------- -------------- ----------------
<S> <C> <C> <C> <C>
James C. Burrows............................ -- -- -- --
Laurel E. Morrison.......................... -- 12,000 -- --
Firoze E. Katrak............................ -- -- -- --
William B. Burnett.......................... 3,500 -- -- --
</TABLE>
- ------------------------
(1) Value is based on $22.50 per share, the last sale price of the common
stock on November 28, 1998, as reported on the Nasdaq National Market. On
that date, the value of the common stock was less than the applicable
exercise price of these options. Actual gains, if any, on exercise will
depend on the value of the common stock on the date of the sale of the
shares.
DIRECTOR COMPENSATION
CRA pays its non-employee directors an annual fee of $13,000 for their
services as directors, plus $2,000 for each regular board meeting attended and
$1,000 for each special board meeting attended. Directors who are also employees
of CRA do not receive separate fees for their services as directors. See "Item
13. Certain Relationships and Related Transactions" in Amendment No. 1 to CRA's
Form 10-K (as filed on March 26, 1999) for information concerning consulting
fees paid by CRA to certain directors for their services as outside experts to
CRA.
Under CRA's 1998 Incentive and Nonqualified Stock Option Plan, each
"outside director" who shall be re-elected as a director of CRA or whose term
shall continue after an annual meeting of stockholders will on the date of the
annual meeting receive a nonqualified option to purchase 5,000 shares of common
stock at an exercise price equal to the fair market value of the common stock on
that date. Each option will have a term of five years and will vest in full on
the first anniversary of the date of grant. Each person who shall be first
elected an outside director of CRA after the adoption of the stock option plan
will receive on the date of his or her election as a director a nonqualified
option to purchase 10,000 shares of common stock at an exercise price equal to
the fair market value of the common stock on that date. Each option will have a
term of five years and will vest in three equal annual installments, commencing
on the first anniversary of the date of grant. CRA has submitted for approval by
its stockholders at the special meeting of stockholders in lieu of annual
meeting to be held on June 2, 1999 an amendment to the stock option plan that
would extend the term of options granted to outside directors from five years to
ten years. The amendment would take effect after stockholder approval and would
not affect options previously granted to outside directors. Under the terms of
the stock option plan, an"outside director" is a director who (a) is not an
employee of CRA or any parent or subsidiary of CRA and (b) is not a consultant
who provides economic consulting services to or in conjunction with CRA or any
parent or subsidiary of CRA. Currently, the outside directors of CRA are Drs.
Carl Kaysen, Rowland T. Moriarty and Garth Saloner. In accordance with the terms
of CRA's stock option plan, in connection with CRA's annual meeting of
stockholders in April 1998, each of Drs. Kaysen and Moriarty was granted a
nonqualified option to purchase 5,000 shares of common stock at an exercise
price of $18.50 per share. On his election to the board in December
5
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1998, Dr. Saloner received a nonqualified option to purchase 10,000 shares at an
exercise price of $24.75 per share.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The compensation committee currently consists of Drs. Franklin M.
Fisher, Kaysen and Moriarty. Dr. Moriarty is Chairman of the board of managers
and a member of NeuCo LLC, a subsidiary of CRA. For information concerning a
stock restriction agreement to which Drs. Fisher, Kaysen and Moriarty are
parties as well as certain payments by CRA to Drs. Fisher and Moriarty, see
"Item 13. Certain Relationships and Related Transactions" in Amendment No. 1 to
CRA's Form 10-K (as filed on March 26, 1999).
6
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
Dated: May 7, 1999
CHARLES RIVER ASSOCIATES INCORPORATED
By: /s/ James C. Burrows
----------------------------------------
James C. Burrows
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this amendment has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ Franklin M. Fisher Chairman of the Board May 5, 1999
- -----------------------------
Franklin M. Fisher
/s/ James C. Burrows President, Chief Executive Officer and May 7, 1999
- ----------------------------- Director (Principal Executive Officer)
James C. Burrows
/s/ Laurel E. Morrison Chief Financial Officer, Vice May 7, 1999
- ----------------------------- President, Finance and Administration,
Laurel E. Morrison and Treasurer (Principal Financial and
Accounting Officer)
/s/ William B. Burnett Vice President and Director May 6, 1999
- -----------------------------
William B. Burnett
/s/ Firoze E. Katrak Vice President and Director May 5, 1999
- -----------------------------
Firoze E. Katrak
Director
- -----------------------------
Carl Kaysen
/s/ Rowland T. Moriarty Director May 7, 1999
- -----------------------------
Rowland T. Moriarty
</TABLE>
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<TABLE>
<S> <C> <C>
Director
- -----------------------------
Garth Saloner
/s/ Steven C. Salop Director May 7, 1999
- -----------------------------
Steven C. Salop
</TABLE>
