19
DYNAMICS RESEARCH CORPORATION
60 Frontage Road
Andover, Massachusetts 01810
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 23, 1996
To the Stockholders:
The Annual Meeting of the stockholders of Dynamics Research
Corporation will be held at 3:30 p.m. on Tuesday, April 23, 1996 on the
33rd Floor of The State Street Bank and Trust Building, 225 Franklin
Street, Boston, Massachusetts, for the following purposes:
1. To fix the number of directors for the ensuing year and to
elect the Class III Director,
2. To consider and act upon such other matters as may properly
come before the
meeting.
Only stockholders of record at the close of business on March 8,
1996 will be entitled to receive notice of and to vote at the meeting.
By order of the Board of Directors,
John R. D. McClintock,
Clerk
March 22, 1996
__________________
IMPORTANT
All stockholders are urged to complete and mail the enclosed proxy
promptly whether or not you plan to attend the meeting in person. The
enclosed envelope requires no postage if mailed in the U.S.A. or
Canada. Stockholders attending the meeting may revoke their proxies
and personally vote on all matters which are considered. It is
important that your shares be voted.
DYNAMICS RESEARCH CORPORATION
60 Frontage Road
Andover, Massachusetts 01810
_________________
PROXY STATEMENT
______________
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 23, 1996
________________
GENERAL
The accompanying proxy is solicited by the Board of Directors of
Dynamics Research Corporation (the "Company") to be voted at the 1996
Annual Meeting of Stockholders.
Proxies in the accompanying form will be voted as specified by the
stockholders. If no specification is made, the proxy will be voted for
the election of the Class III director unless authority to vote has
been withheld. A proxy may only be revoked by written revocation
received by the Clerk of the Company prior to the exercise thereof.
Stockholders of record at the close of business on March 8, 1996
are entitled to notice of, and to vote at the Annual Meeting. There
were 5,663,042 shares of Common Stock, $.10 Par Value outstanding as of
that date, each entitled to one vote.
This proxy statement and enclosed proxy are being mailed to
stockholders on or about the date of the Notice of Annual Meeting.
The cost of solicitation of proxies will be borne by the Company.
Employees of the Company may also solicit proxies by mail, telephone or
personal interview.
ELECTION OF DIRECTORS
Term of Office
Under Massachusetts law, the Board of Directors of the Company is
classified into three classes, as nearly equal in number as possible,
with the term of office of one class expiring each year. The enclosed
proxy will be voted to elect the person named below, unless otherwise
instructed, as the Class III director for a term of three years
expiring at the 1999 Annual Meeting of Stockholders or until his
respective successor is elected and qualified. If the nominee should
become unavailable, proxies will be voted for a substitute nominee
designated by management, or to fix the number of directors at a lesser
number, unless instructions are given to the contrary. The nominee is
presently serving as a director of the Company, and the current Board
has no reason to expect that the nominee will become unavailable.
Year First Elected
Name Age Principal Occupation A Director
Nominee for Election as Class III Director
Term Expiring in l999
Albert Rand 69 President and Chief Executive 1984
Officer of the Company
Continuing Class II Directors - Terms Expiring in 1998
Francis J. Aguilar 63 Professor of Business Administration,
Emeritus, 1987
Harvard University Graduate School of
Business Administration
John S. Anderegg, Jr. 72 Chairman of the Company 1955
Continuing Class I Directors - Terms Expiring in 1997
General James P. Mullins Executive Consultant 1991
(USAF, ret.) 67
Thomas J. Troup 72 Vice Chairman and Director of 1962-1971
Burr-Brown Corporation since 1980
(Manufacturer of Electronic Components)
The principal occupation of the above nominee and continuing
directors has been that set forth above throughout the past five years.
Dr. Aguilar is also a Director of Bowater, Inc. and Burr-Brown
Corporation. Mr. Anderegg is a Director of Ivy and MacKenzie Mutual
Funds, Burr-Brown Corporation and Metritape, Inc.
Board Meetings and Committees
The Board of Directors held six meetings during 1995.
The Audit Committee consisting of Dr. Aguilar, General Mullins and
Mr. Troup reviews with the independent auditors the financial
statements and reports issued by the Company, reviews the Company's
internal accounting procedures, controls and programs and makes
recommendations to the Board of Directors on the engagement of the
independent auditors. The Audit Committee held two meetings during
1995.
The Compensation Committee consisting of Dr. Aguilar and General
Mullins administers the 1993 Equity Incentive Plan, including the
granting of options and other awards under that plan, reviews the
compensation policies of the Company and approves the compensation of
the officers. The Compensation Committee held two meetings during
1995.
The Company does not have a standing nominating committee.
PRINCIPAL STOCKHOLDERS
Common Stock Ownership of Certain Beneficial Owners and Management
As of March 8, 1996, the following table shows the beneficial
ownership of Common Stock of the Company by all persons or groups known
by the Company to be the beneficial owners of more that 5% of its
outstanding stock, based on filings with the Securities and Exchange
Commission, all directors, the executive officers listed in the Summary
Compensation Table and all directors and executive officers as a group:
Name and Address Amount and Nature of Percent
of Beneficial Owner Beneficial Ownership of Class
John S. Anderegg, Jr..............................................
724,099(1) 12.88
c/o Dynamics Research Corporation
60 Frontage Road
Andover, MA 01810
Albert Rand...........................................................
308,770(2) 5.49
c/o Dynamics Research Corporation
60 Frontage Road
Andover, MA 01810
Francis J. Aguilar....................................................
19,334(3) *
James P. Mullins.....................................................
3,667(4) *
Thomas J. Troup....................................................
3,204(5) *
John L. Wilkinson...................................................
6,280(6) *
Douglas R. Potter...................................................
11,766(7) *
DFA Investment Dimensions Group, Inc................. 373,512(8)
6.64
c/o Dimensional Fund Advisors, Inc.
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
All directors and executive officers as a group (7 persons)
1,077,120(9) 19.16
________
*Less than 1% of the outstanding shares of Common Stock.
All shares are held directly except as indicated.
(1) Includes 44,168 shares held by Mr. Anderegg as
custodian for his children, 64,321 shares held in the estate
of Mrs. Anderegg, of which Mr. Anderegg is executor, and 17,172 shares
owned by one of Mr. Anderegg's children who resides
with him, as to all of which he disclaims beneficial
ownership.
(2) Includes 161,384 shares which Mr. Rand has the
right to acquire on exercise of stock options that are
currently exercisable or will be exercisable within 60 days of March 8,
1996.
(3) Includes 8,833 shares held in a pension plan
of which Dr. Aguilar has sole voting and investment
powers. Includes options to purchase 1,667 shares which are currently
exercisable or will be exercisable within 60 days of March
8, 1996.
(4) Includes options to purchase 1,667 shares
which are currently exercisible or will be exercisable
within 60 days of March 8, 1996.
(5) Includes 986 shares held in a trust of which
Mr. Troup is trustee. Includes options to purchase 1,667
which are currently exercisable or will be exercisable within 60 days
of
March 8, 1996.
(6) Includes options to purchase 5,993 shares which are currently
exercisable or will be exercisable within 60 days of March
8, 1996.
(7) Includes options to purchase 10,666 shares which are currently
exercisable or will be exercisable within 60 days of March
8, 1996.
(8) Dimensional Fund Advisors Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of
373,512 shares of Dynamics Research Corporation stock as of December
31, 1995, all of which shares are held in portfolios of DFA Investment
Dimensions Group Inc., a registered open-end investment company, or in
series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA
Participation Group Trust, investment vehicles for qualified employee
benefit plans, all of which Dimensional Fund Advisors
Inc. services as investment manager. Dimensional disclaims
beneficial ownership of all such shares. Dimensional Fund Advisors has
the power to dispose of these shares and
shares the power to vote 82,295 of these shares.
(9) Includes options to purchase 183,044 shares which are
exercisable within 60 days of
March 8, 1996.
COMPENSATION AND RELATED MATTERS
Compensation of Directors
Directors who are not employees of the Company receive an annual fee
of $20,000 for
serving as directors. No additional compensation is paid to those
directors who serve on a committee of the Board of Directors.
The Company has a Deferred Compensation Plan under which non-employee
directors may elect to defer their directors fees. Amounts deferred
for each participant are credited to a separate account, and interest
at the lowest rate at which the Company borrowed money during each
quarter or, if there was no such borrowing, at the prime rate, is
credited to such account quarterly. The balance in a participant's
account is payable in a lump sum or in installments when the
participant ceases to be a director. Mr. Troup and Dr. Aguilar
deferred their 1995 director fees. Interest accrued for 1995 on the
cumulative fees for each director was $9,225.
In 1995, pursuant to the 1995 Stock Option Plan for Non-Employee
Directors, each director who is not an employee of the Company received
an option to purchase 5,000 shares of Common Stock at an exercise price
equal to fair market value on the date of grant. All options granted
under this plan become exercisable in three equal installments on each
of the first, second and third anniversaries of the date of grant.
Executive Compensation
<TABLE>
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation paid to the
President and Chief Executive Officer and each of the Company's other
highly compensated executive officers (the "named executives") during
or with respect to 1995, 1994, and 1993.
<CAPTION>
Annual Long Term
Compensation Compensation
Name and Other Shares All Other
Principal Annual UnderlyingCompensation
Position YearSalary ($)Bonus ($)Compensation ($)Options (#)
($) (1)
<S> <C> <C> <C> <C> <C> <C>
Albert Rand 1995235,000 25,000 2,250 2,250
2,249
President & 1994235,000 2,250
C.E.O. 1993235,000 2,249
John S. Anderegg, Jr.1995195,000 2,250
Chairman 1994195,000 2,250
1993195,000 2,249
John L. Wilkinson 1995126,000 12,000 6,000 2,070
V. P. of Human1994126,000 1,890
Resources 1993126,000 1,871
Douglas R. Potter 1995 135,000 15,000 10,000 2,250
1,480
V.P.of Finance & 1994 135,000
1,480
C.F.O. 199322,500(2) 11,000 -
</TABLE>
(1) Consists of employer's match for the 401K plan.
(2) Mr. Potter commenced employment with DRC on November 1, 1993.
Option Grants in Last Fiscal Year
The table below shows information regarding grants of stock
options, if any, made to the named executives during fiscal 1995.
The amounts shown for each of the named executives as potential
realizable values are based on arbitrarily assumed annualized rates
of stock price appreciation of five percent and ten percent over the
full term of the options, pursuant to applicable Securities and
Exchange Commission regulations. John S. Anderegg, Jr. did not
receive any option grants in 1995. Actual gains, if any, on option
exercises are dependent on the future performance of the Common
Stock and overall stock market conditions.
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option
Term
% of Total
Options
Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Expira-
(#) Year ($/Sh) tion Date
5% ($) 10%($)
Albert 25,000 15% 7.000 09/8/0 110,0 278,905
Rand 5 57
Douglas R. 10,000 6% 4.125 2/14/0 65,742
Potter 5 25,94
2
John 4% 4.125 2/14/0 39,445
Wilkinson 6,000 5 15,56
5
(1) Options become exercisable 1/3 each year, commencing on the first
anniversary of the grant, with full vesting on the third anniversary.
(2) The exercise price and tax withholding obligations may be paid, at the
option of the Board, by delivery of already owned shares.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table summarizes options exercised during 1995 and
presents the value of unexercised options held by the named executives
at fiscal year-end. John S. Anderegg, Jr. did not hold any options
during 1995.
Number of Value of
Shares UnderlyingUnexercised
Unexercised In-the-Money
Options at Options at
Options Exercised in 1995 12/30/95(#)12/30/95($)(1)
Shares Acquired Value Exercisable/(E)Exercisable/(E)
Name on Exercise (#)Realized ($)Unexercisable(U)Unexercisable(U)
Albert Rand 28,596 72,577 161,384 E 519,863 E
25,000 U 37,500 U
John S. Anderegg, Jr. -- -- 0 0
John L. Wilkinson -- -- 5,993 E 22,434 E
4,000 U 17,500 U
Douglas R. Potter -- -- 10,666 E 46,077 E
10,334 U 44,918 U
(1) Based on market value at 12/30/95 of $8.50 per share less
respective exercise prices.
Report of the Compensation Committee of the Board of Directors
The Compensation Committee of the Board of Directors administers the
Company's executive compensation program. The committee is composed of
Dr. Aguilar and General Mullins, both of whom are independent non-
employee directors and who have no "interlocking" relationships as
defined by the Securities and Exchange Commission. The Committee meets
formally and consults informally during the year. The Committee is
responsible for recommending to the Board of Directors the compensation
of all the officers of the Company and for reviewing the design and
effectiveness of executive compensation policies. All awards of stock
options and restricted stock to the Company's employees are made by the
Committee.
Compensation Philosophy and Objectives
The Company's executive compensation program consists of base
salary, annual cash bonus incentives and long-term incentives in the
form of stock options. Its objectives are four-fold:
Provide base compensation that enables the Company to attract and
retain key executives.
Provide executive officers with total direct remuneration which is
competitive with similarly sized companies for comparable performance.
Reward executives for outstanding achievements which clearly
benefit the Company.
Align the interest of the Company's executives with the long-term
interests of
shareholders.
The executive compensation program provides an overall level of
compensation opportunity which the Compensation Committee believes is
competitive with other companies of comparable size and complexity.
Actual compensation will vary with annual and long-term Company
performance, as well as individual performance and longevity, and hence
may be greater or less than actual compensation at other companies.
The Committee uses its discretion to establish executive compensation
at levels which in its judgment are warranted by external or internal
factors as well as an executive's individual circumstances. In
arriving at what it considers appropriate levels and components of
compensation, the Compensation Committee utilizes industry compensation
data provided by nationally recognized compensation information
sources.
Executive Compensation Program Components
The particular elements of the compensation program are discussed
more fully below:
Base Salary. The Committee maintains base salary levels for
executives that, based on its analysis of pertinent compensation data,
are competitive with other companies of comparable size and complexity.
Base salaries of executives are determined by the potential impact
of the individual on the Company and its performance, salaries paid by
other companies for comparable positions, individual performance
against goals and the overall performance of the Company.
Cash Bonuses. The Compensation Committee may approve discretionary
cash bonuses as a means of rewarding executives (and other employees)
for significant Company and individual performance. These cash awards
are not based on a specific formula; rather, they are intended to be
compensation in recognition of outstanding accomplishments that result
in clearly quantitative or qualitative benefit to the Company.
Long-Term Incentives. Long-term incentives are provided in the
form of stock options. The Committee and the Board of Directors
believe that management's ownership of a significant equity interest in
the Company aligns the long-term interests of management and
shareholders and is an important incentive and contributing factor
toward building shareholder value. Stock options, therefore, are
granted at the market value of the common stock on date of grant. The
value received by the executive from a stock option granted depends on
increases in the market price of the Company's common stock during the
term of the option. Consequently, the value of the compensation is
proportionate to increases in shareholder value. Grants of stock
options are made by the Compensation Committee in its discretion based
both upon the executive's actual contribution to the Company's current
performance and his expected contribution toward meeting the Company's
long-term financial/strategic goals.
CEO Compensation
Mr. Rand's base salary remained unchanged in 1994 and 1995 in
accordance with the above described compensation philosophy. In 1995,
Mr. Rand was awarded options to purchase 25,000 shares of the Company's
common stock which reflects the Committee's judgment that progress was
made towards the Company's strategic goals through the favorable record
of long-term contract awards.
The Compensation Committee
of the Board of Directors:
Francis J. Aguilar
James P. Mullins
Performance Comparison
The following graph illustrates the return that would have been
realized (assuming reinvestment of dividends) by an investor who
invested $100 on December 29, 1990 in each of (i) the Company's Common
Stock, (ii) the NASDAQ Stock Market - Composite U.S. Index and (iii) a
Peer Group of companies as listed below:
LEGEND
Dynamics
Research NASDAQ Peer
Corporation Composite
Group
1990...................................................................
..... 100 100 100
1991...................................................................
..... 103 161 131
1992...................................................................
..... 109 187 164
1993...................................................................
..... 121 215 173
1994...................................................................
..... 79 210 196
1995...................................................................
..... 245 296 292
Companies in Self- Determined Peer Group:
Analysis & Technology Inc. CACI International Inc.
Comarco Inc. Geodynamics Corp.
Perceptronics Inc Nichols Research Corp.
Severance Agreements
The Company has severance agreements with Messrs. Anderegg and Rand.
Under these agreements, the Company agrees to pay severance benefits to
each such executive if his employment is terminated for any reason
other than for cause (as defined in the agreements) or if the executive
terminates his employment as a result of a specified justification,
within two years following a change of control of the Company. A
change in control includes the acquisition of 20% or more of the
combined voting power of the Company's then-outstanding securities,
other changes in control of a kind required to be reported by certain
regulatory authorities, and certain changes in membership of the Board
of Directors. Under the agreements, the executive is entitled to a
severance payment equal to 299% of his average annual base salary and
bonus for the two calendar years immediately prior to a change in
control. In addition, the executive is entitled to certain other
benefits, including the acceleration of the exercisability of
outstanding stock options, continued participation for up to three
years in life, accident, medical, health and other similar plans and
programs in which the executive participated prior to the change in
control, and the payment by the Company of any legal fees and expenses
incurred as a result of such termination of employment. At the option
of the executive, the payments or benefits payable under the agreement
may be decreased to the extent necessary to avoid any excise taxes
payable as a result of the severance benefits. Such severance payments
would not be reduced for compensation received by the executive from
any new employment. Under these agreements, based on the current
compensation as of March 8, 1996, change of control cash severance
payments would be approximately $583,050 and $702,650 for Messrs.
Anderegg and Rand, respectively.
Indemnification Agreements
The Company has indemnification agreements with each of its
directors. Each indemnification agreement entitles the director to be
indemnified by the Company for any liabilities and expenses incurred in
connection with the defense or disposition of any legal claim or action
brought or threatened against him or her by reason of (i) being or
having been a director of the Company or (ii) serving or having served
at the Company's request as a director of another organization or in
any capacity with respect to an employee benefit plan. The
indemnification agreement also requires the Company to advance payment
for any expenses incurred by a director in connection with such an
action. However, a director will not receive indemnification under the
agreement if he or she is found not to have acted in good faith in the
reasonable belief that his or her actions were in the best interest of
the Company. The indemnification provided under the indemnification
agreement is required whether or not an action is brought asserting
that the director seeking indemnification acted unlawfully or acted to
create an improper personal benefit, unless the director is actually
found not to have acted in good faith in the reasonable belief that his
or her actions were in the best interests of the Company. The rights
under the indemnification agreement are in addition to any rights of
indemnification the director may have under the Company's Articles of
Incorporation or By-laws or otherwise and are not subject to any
limitations which may be contained in the Company's Articles of
Incorporation or By-laws.
Pension Plan
The following table sets forth the annual benefits payable as a life
annuity which would be payable under the Company's noncontributory
defined benefit Pension Plan at normal retirement at age 65 to
participants having the years of service and average annual earnings as
indicated in the table, assuming all such participants attained age 65
in 1995:
ESTIMATED ANNUAL BENEFIT FOR YEAR 1995
Average Estimated Annual Benefit
Annual For Indicated Years of Service
Earnings 15 20 25 30 or more
$100,000 $17,484 $23,312 $29,140 $34,968
$125,000 $22,484 $29,979 $37,473 $44,968
$150,000* $27,484 $36,645 $45,806 $54,968
Frozen Benefit - Accrued through 12/31/93*
$175,000 $32,484 $43,312 $54,139 $64,967
$200,000 $37,484 $49,978 $62,473 $74,967
$225,000 $42,483 $56,645 $70,806 $84,967
$235,840 $44,651 $59,535 $74,419 $89,303
*Maximum Plan Compensation for 1995 is $150,000.
Employees are entitled to the greater of: benefit accrued through
12/31/93 (calculated on prior years wage caps) or benefit based on the
new $150,000 wage cap.
As of March 8, 1996, Messrs. Anderegg, Rand, Wilkinson and Potter had
39, 36, 14 and 2 years of service, respectively, for purposes of the
Pension Plan.
All employees of the Company, who complete a year of service,
including the individuals
named in the compensation table above, are eligible to earn benefits
under the Pension Plan. Upon retirement the benefits under the Pension
Plan vary depending upon the participant's age at retirement, years of
service with the Company and average annual earnings for the five
consecutive highest years of service in the ten years prior to
termination. The amount of annual retirement benefits is determined by
a formula which applies years of service to a basic defined benefit,
which, in the case of a participant with at least 30 years of service,
is .683% of the average of the 5 highest consecutive years of
compensation in the last 10 years worked plus .65% of such average
annual earnings which exceed Social Security Covered Compensation, but
not less than (a) $60 multiplied by his or her years of service or (b)
the benefit which had accrued as of December 31, 1987 under the
Company's prior retirement program. Compensation reflects the amounts
shown under salary in the Summary Compensation Table. The Pension Plan
limits the compensation taken into account for purposes of determining
the benefit under the Pension Plan to the maximum permissible under the
Internal Revenue Code, which for 1995 was $150,000. Social Security
Covered Compensation means the dollar amount which represents the
average of the maximum wages subject to Social Security tax for each
year of the participant's working career. The benefits under the
Pension Plan are payable in various annuity forms and are subject to
maximum limits in certain circumstances.
Savings & Investment (40lk) Plan
The Company also maintains a cash or deferred profit sharing plan
under which employees with at least three months of service may reduce
their compensation and have such amounts ("elective deferrals")
contributed to the plan on their behalf. The Company contributes to
the plan an amount equal to 25% of the employee's elective deferrals
which do not exceed 6% of the employee's compensation. The elective
deferrals are invested in one or more collective investment funds at
the participant's direction, and are paid to the employee in a lump sum
when employment terminates. The Company's matching contributions are
invested in a managed income portfolio and the employee may have his
elective deferrals invested in several equity funds, a money market
fund or the managed income fund. The value of the plan account is paid
to the employee in a lump sum at date of termination, subject to
forfeiture of any non-vested portion of the matching contribution if
termination occurs within the first five years of employment.
Equity Incentives
The 1993 Equity Incentive Plan (1993 Plan) provides for the award of
either incentive or non-qualified stock options, stock appreciation
rights, restricted and unrestricted stock awards and deferred stock
awards. As of March 8, 1996, 440,000 shares of the Company's common
stock were reserved for issuance under the 1993 Plan, options to
purchase 193,000 shares were outstanding and 247,000 shares were
available for future grants. The option price shall not be less than
the fair market value at the time of grant and the term of the option
may not exceed ten years. The employees of the Company eligible to
participate in the 1993 Plan and the awards granted to participants in
the Plan are determined by the Compensation Committee. Options to
purchase 251,237 shares also remain outstanding under the Company's
1983 Stock Option Plan (1983 Plan) which terminated in 1993.
Stock Option Plan for Non-Employee Directors
The 1995 Stock Option Plan for Non-Employee Directors (the
"Directors Option Plan") is designed to advance the Company's interest
by enhancing its ability to attract and retain non-employee directors
who are in a position to make significant contributions to the success
of the Company and to align the interest of those directors more
closely with stockholders.
As of March 8, 1995, 100,000 shares of the Company's common stock
were reserved for issuance under the Directors Option Plan, options to
purchase 15,000 shares were outstanding and 85,000 shares were
available for future grants. The option price shall not be less than
the fair market value at the time of grant and the term of the option
may not exceed ten years.
QUORUM, REQUIRED VOTES, AND METHOD OF TABULATION
Consistent with state law and under the Company's by-laws, a majority
of the shares entitled to be cast on a particular matter, present in
person or represented by proxy, constitutes a quorum as to such matter.
Votes cast by proxy or in person at the Annual Meeting will be counted
by persons appointed by the Company to act as election inspectors for
the meeting.
The nominee for election as a Class III director at the Annual
Meeting who receives the greatest number of votes properly cast for the
election of director will be elected director.
The election inspectors will count the total number of votes cast
"for" approval of Item 1 for purposes of determining whether sufficient
affirmative votes have been cast. The election inspectors will count
shares represented by proxies that withhold authority to vote for a
nominee for election as a director or that reflect abstentions and
"broker non-votes" (i.e., shares held by brokers or nominees as to
which (i) instructions have not been received from the beneficial
owners and (ii) the broker or nominee does not have the discretionary
authority to vote on a particular matter) only as shares that are
present and entitled to vote on the matter for purposes of determining
a quorum, but neither abstentions nor broker non-votes have any effect
on the outcome on voting on the matter.
AUDIT MATTERS
Upon the recommendation of the Audit Committee, the Board of
Directors has selected Arthur Andersen LLP, certified public
accountants, as auditors for the Company for the fiscal year ending
December 28, 1996. Arthur Andersen LLP has served as the Company's
independent auditors since 1957. A representative of Arthur Andersen
LLP is expected to be present at the Annual Meeting with the
opportunity to make a statement if he or she desires to do so and to
respond to appropriate questions.
OTHER INFORMATION
Stockholder Proposals for Fiscal 1996 Annual Meeting
Proposals of stockholders submitted for consideration at the next
annual meeting of stockholders must be received by the Company no later
than November 15, 1996 in order to be considered for inclusion in the
Company's proxy materials for that meeting.
Other Business
The Board of Directors does not know of any business which will be
presented to the Annual Meeting other than that referred to in the
accompanying notice. If other business properly comes before the
Annual Meeting, it is intended that the proxies will be voted in the
judgment of the persons voting the proxies unless specific instructions
to the contrary are given.
By the Order of the Board of Directors
John R. D. McClintock
Clerk
Andover, Massachusetts
March 22, 1996
PROXY
DYNAMICS RESEARCH CORPORATION
Annual Meeting of Stockholders-April 23, 1996
The undersigned hereby appoints John S. Anderegg, Jr., Douglas R. Potter and
John R.D. McClintock, and each of them as proxies, with power of
substitution and re-substitution to each, and hereby authorizes them to
represent and to vote as designated below, at the Annual Meeting of
Stockholders of Dynamics Research Corporation (the "Company") on April
23, 1996 at 3:30 P.M. Boston time, and at any adjournments thereof, all
of the shares of the Company which the undersigned would be entitled to
vote if personally present.
The Board of Directors recommends a vote FOR:
1. Fixing the number of Directors and Election of Class III Director
FOR nominee listed below, except as indicated. WITHHOLD AUTHORITY to
vote for nominee listed below.
Albert Rand
. ABSTAIN
_______________________________________________________________________________
_____________
Account NumberNo. of Shares Proxy No.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS. EVERY PROPERLY SIGNED
PROXY WILL BE VOTED AS DIRECTED. UNLESS OTHERWISE DIRECTED, PROXIES
WILL BE VOTED FOR ITEM 1. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
Dated.......................................,
1996
............................................................
Signature
............................................................
Signature
Please mark, date and sign as your name
appears hereon
and return in the enclosed envelope. If
signing as an
attorney, executor, administrator, trustee,
guardian or
other representative capacity, please give
your full title
as such.
