<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DYNAMICS RESEARCH CORPORATION
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
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[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously filing by registration
statement number, or the Form or Schedule and the date of its
filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
DYNAMICS RESEARCH CORPORATION
60 Frontage Road
Andover, Massachusetts 01810
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held January 30, 2001
To the Stockholders:
The special meeting of the stockholders of Dynamics Research Corporation will
be held at 9:00 a.m. on Tuesday, January 30, 2001 at 60 Frontage Road, Andover,
Massachusetts, for the following purposes:
1. To approve the 2000 Employee Stock Purchase Plan.
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 December 4, 2000 are
entitled to vote at the meeting. To grant a proxy to vote your shares, you must
complete and return the enclosed proxy card.
By order of the Board of Directors,
John L. Wilkinson
Clerk
December 5, 2000
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.
<PAGE>
DYNAMICS RESEARCH CORPORATION
60 Frontage Road
Andover, Massachusetts 01810
----------------
SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD JANUARY 30, 2001
The accompanying proxy is solicited by the Board of Directors of Dynamics
Research Corporation for voting at the special meeting of stockholders to be
held on January 30, 2001, and at any postponement or adjournment, for the
purposes set forth in the attached notice of meeting.
When proxies are properly dated, executed and returned, the shares they
represent will be voted at the special meeting in accordance with the
instructions of the stockholder. If no specific instructions are given, the
shares represented by proxies will be voted for the approval of the 2000
Employee Stock Purchase Plan. In addition, if other matters come before the
special meeting, the persons named in the accompanying form of proxy will vote
in accordance with their best judgment with respect to such matters. A
stockholder giving a proxy has the power to revoke it by giving written notice
to the clerk of the company prior to the special meeting or by submitting a
later-dated proxy prior to the meeting.
Stockholders of record at the close of business on December 4, 2000 are
entitled to vote at the special meeting. There were 7,601,019 shares of common
stock outstanding as of that date. Each share is entitled to one vote.
This proxy statement and the enclosed proxy are being mailed to stockholders
on or about the date of the notice of special meeting.
The company is paying the cost of soliciting proxies. Employees of the
company may solicit proxies by mail, telephone or in person.
APPROVAL OF 2000 EMPLOYEE STOCK PURCHASE PLAN
On October 31, 2000, the Board of Directors adopted, subject to shareholder
approval, the Dynamics Research Corporation 2000 Employee Stock Purchase Plan,
or the Purchase Plan. The Board of Directors believes that the Purchase Plan
provides a convenient and attractive way for employees to become stockholders
of the company and to align their interests more closely with the
stockholders. A total of 800,000 shares of common stock may be issued under
the Purchase Plan, subject to adjustment for changes in the company's
capitalization.
The purchase plan is designed to give eligible employees an opportunity to
purchase common stock of the company at a discount through accumulated payroll
deductions. All employees of the company or designated subsidiaries who
customarily work at least 20 hours per week and do not own more than 5% or
more of the company's common stock are eligible to participate in the purchase
plan. As of December 5, 2000, there were approximately 1,500 eligible
employees.
Employees elect to participate through payroll deductions of up to 10% of
their compensation for each pay day throughout the offering period. Payroll
deductions are applied to the purchase of common
<PAGE>
stock at the end of each offering period. Offering periods are three months
long, and purchases occur four times a year on June 1, September 1, December 1
and March 1. The Board may change the length of the offering periods, the
purchase dates and the number of offering periods per year. The purchase price
is 85% of the lesser of the fair market value of the common stock at the
beginning of each offering period and its fair market value at the end of the
offering period. Employees cannot purchase more than 500 shares in any
offering period, withhold more than $25,000 of compensation for any year or
buy shares which would increase their ownership to 5% or more of the common
stock
Participants may withdraw at any time during an offering period and payroll
deductions will be refunded. If a participant's employment with the company or
a designated subsidiary terminates for any reason, the participant will no
longer be eligible to participate in the Purchase Plan and the payroll
deductions withheld during the offering period will be refunded to the
participant.
On December 4, 2000, the closing price of a share of the company's common
stock on The NASDAQ Stock Market was $8.375 per share.
Based on the law as in effect on November 27, 2000, the federal income tax
consequences associated with participation in the Plan are discussed below.
The discussion does not cover federal employment or other federal taxes or
state, local or foreign taxes.
A participant in the purchase plan does not realize income either at the
beginning of an offering period or when the participant acquires shares at the
end of an offering period. If a participant sells or otherwise disposes of
shares acquired under the Purchase Plan within two years from the beginning of
the option period, the participant realizes ordinary income at the time of
disposition equal in general to the excess of the fair market value of the
shares on the purchase date over the purchase price. A corresponding deduction
is available to the company. If shares acquired upon exercise are disposed of
after the two-year period described above, or if the participant dies at any
time while holding the shares, ordinary income is realized in an amount equal
to the lesser of (i) 15% of the fair market value of the shares at the
beginning of the applicable option period, or (ii) the excess of the fair
market value of the shares at the time of disposition (or death) over the
purchase price. No deduction is available to the company for this amount.
The Board of Directors recommends a vote "FOR" approval of the 2000 Employee
Stock Purchase Plan.
2
<PAGE>
COMPENSATION AND RELATED MATTERS
Performance Graph
The following graph illustrates the return that would have been realized
(assuming reinvestment of dividends) by an investor who invested $100 on
December 30, 1994 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 listed
below:
[Performance Graph Appears Here]
<TABLE>
<CAPTION>
CRSP Total Returns
Index for: 12/1994 12/1995 12/1996 12/1997 12/1998 12/1999
---------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Dynamics Research
Corporation 100.0 309.1 336.4 470.0 282.0 408.0
Nasdaq Stock Market
(US Companies) 100.0 141.3 173.9 213.0 300.3 558.0
Self-Determined
Peer Group 100.0 145.5 220.5 190.0 277.6 479.2
</TABLE>
COMPANIES IN THE SELF-DETERMINED PEER GROUP
<TABLE>
<S> <C>
Affiliated Computer Services Inc. BTG Inc.
CACI International Titan Corp.
</TABLE>
3
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the company's knowledge, the following sets forth information regarding
ownership of the company's outstanding common stock on December 4, 2000 by (i)
beneficial owners of more than 5% of the outstanding shares of common stock,
(ii) each director and named executive officer, and (iii) all directors and
all executive officers as a group. Except as otherwise indicated below and
subject to applicable community property laws, each owner has sole voting and
sole investment powers with respect to the stock listed.
<TABLE>
<CAPTION>
Number of
Shares of
Common Stock Percent
Beneficially of
Stockholder (1) Owned (2) Class
--------------- ------------ -------
<S> <C> <C>
John S. Anderegg, Jr..................................... 808,798(3) 10.6
James P. Regan........................................... 100,000 1.3
Francis J. Aguilar....................................... 33,571(4) *
Martin V. Joyce, Jr...................................... 12,133 *
Kenneth F. Kames......................................... 9,133 *
James P. Mullins......................................... 17,893 *
John L. Wilkinson........................................ 17,567 *
Chester Ju............................................... 135,534 1.8
DFA Investment Dimensions Group, Inc..................... 612,238(5) 8.1
c/o Dimensional Fund Advisors, Inc.
1299 Ocean Avenue--11th Floor
Santa Monica, CA 90401
All directors and executive officers as a group
(8 persons)............................................. 1,130,629 14.9
</TABLE>
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* Less than 1% of the outstanding shares of Common Stock.
(1) Unless otherwise indicated, each address is c/o Dynamics Research
Corporation, 60 Frontage Road, Andover, MA 01810.
(2) Includes options to acquire shares which are currently exercisable or
exercisable within 60 days of December 4, 2000: Mr. Regan, 100,000 shares;
Mr. Aguilar, 10,253 shares; Mr. Joyce, 7,133 shares; Mr. Kames, 7,133
shares; Mr. Mullins, 10,253 shares; Mr. Wilkinson, 11,920 shares; Mr. Ju,
83,933 shares; and all directors and officers as a group.
(3) Includes 58,300 shares held by Mr. Anderegg as custodian for his children,
84,902 shares held in the estate of his deceased spouse, of which Mr.
Anderegg is executor, and 8,720 shares held by his current spouse, as to
all of which he disclaims beneficial ownership.
(4) Includes 11,659 shares held in a pension plan over which Dr. Aguilar has
sole voting and investment power.
(5) As of December 31, 1999, Dimensional Fund Advisors Inc., a registered
investment advisor, was deemed to have beneficial ownership of 612,238
shares, all of which shares were owned by investment companies and their
investment vehicles for which Dimensional Fund Advisors serves as
investment advisor and investment manager. Dimensional Fund Advisors
disclaims beneficial ownership of all such shares.
4
<PAGE>
QUORUM, REQUIRED VOTE AND METHOD OF TABULATION
Approval of the 2000 Employee Stock Purchase Plan requires the affirmative
vote of a majority of the shares of the company's common stock present or
represented and entitled to vote at the special meeting. Abstentions are
treated as shares present or represented and entitled to vote for the purposes
of determining whether that matter has been approved by the stockholders. As a
result, abstentions have the same effect as negative votes. Broker non-votes
are not counted or deemed to be present or represented for purposes of
determining whether stockholder approval of a matter has been obtained, but
they are counted as present for purposes of determining the existence of a
quorum.
OTHER INFORMATION
Stockholder Proposals
In order for proposals of stockholders to be considered for inclusion in the
proxy statement relating to the company's next annual meeting of stockholders,
such proposals must have been received at the company's executive offices no
later than November 10, 2000. No such proposals were received by the company
by such date.
Stockholders who wish to make proposals at the next annual meeting must
notify the company no later than February 16, 2001. If a stockholder who
wishes to present a proposal fails to notify the company of such intent by
that date, the proxies that management solicits for the meeting will confer
discretionary authority to vote on the stockholder's proposal, if it is
properly brought before the meeting.
Other Business
The Board of Directors does not know of any business which will be presented
to the special meeting other than that referred to in the accompanying notice.
If other business properly comes before the special meeting, it is intended
that the proxies will be voted in the discretion of the persons voting the
proxies unless specific instructions to the contrary are given.
Form 10-K and Annual Report to Stockholders
A copy of the company's annual report on Form 10-K filed with the Securities
and Exchange Commission is available to stockholders without charge by writing
to the Treasurer's office, Dynamics Research Corporation, 60 Frontage Road,
Andover, Massachusetts 01810-5498.
5
<PAGE>
PROXY
DYNAMICS RESEARCH CORPORATION
SPECIAL MEETING OF STOCKHOLDERS-JANUARY 30, 2001
The undersigned hereby appoints John S. Anderegg, Jr., James P. Regan and John
L. Wilkinson and each of them as proxies, with full power of substitution and
re-substitution to each, and hereby authorizes them to represent and to vote as
designated below, at the Special Meeting of Stockholders of Dynamics Research
Corporation (the "Company") on January 30, 2001 at 9:00 A.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. Approval of employee stock purchase plan.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
________________________________________________________________________________
Account Number No. 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
THE ITEM SET FORTH ABOVE. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO
VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
Dated.......................................
............................................
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.
