<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Analysis & Technology, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Analysis & Technology, Inc.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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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.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE> 2
[LOGO]
July 7, 1995
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
the Company which will be held at 10:00 a.m., Tuesday, August 8, 1995 at The
Mystic Hilton, Coogan Boulevard, Mystic, Connecticut.
The formal Notice of the Annual Meeting of Shareholders and Proxy Statement
accompanying this letter provide detailed information concerning matters to be
considered and acted upon at the meeting.
Whether or not you plan to attend the Annual Meeting, please mark, sign,
date and return the enclosed proxy at your earliest convenience. If you later
attend the meeting and wish to vote in person, you may withdraw your proxy and
so vote at that time.
I look forward to seeing you at the Annual Meeting.
Sincerely,
/S/ G.P. BENNETT
-------------
G.P. Bennett
President and CEO
<PAGE> 3
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NOTICE OF 1995 ANNUAL MEETING OF SHAREHOLDERS
- --------------------------------------------------------------------------------
To the Shareholders of Analysis & Technology, Inc.:
The 1995 Annual Meeting of Shareholders of Analysis & Technology, Inc. will
be held at 10:00 a.m., E.D.T., at The Mystic Hilton, Coogan Boulevard, Mystic,
Connecticut on August 8, 1995 to consider and act on the following matters:
1. Election of directors;
2. Ratification of the appointment of independent public accountants for
fiscal year 1996;
3. Approval of the 1995 Stock Option Plan;
4. Any other matters which may properly come before the meeting.
Shareholders of record at the close of business on June 9, 1995 are entitled to
notice of and to vote at the meeting and any adjournment thereof.
/S/ DAVID M. NOLF
--------------
David M. Nolf
Executive Vice President/Secretary
July 7, 1995
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YOU ARE URGED TO MARK, SIGN, DATE AND RETURN THE ACCOMPANYING PROXY CARD WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING. IF YOU ATTEND THE MEETING YOU MAY VOTE IN
PERSON OR BY PROXY.
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<PAGE> 4
ANALYSIS & TECHNOLOGY, INC.
ROUTE 2
P.O. BOX 220
NORTH STONINGTON, CONNECTICUT 06359
P R O X Y S T A T E M E N T
GENERAL
This proxy statement is being furnished in connection with the solicitation
of proxies by the Board of Directors of Analysis & Technology, Inc. (the
"Company") for use at the 1995 Annual Meeting of Shareholders to be held at The
Mystic Hilton, Coogan Boulevard, Mystic, Connecticut on August 8, 1995 at 10:00
a.m., E.D.T., and all postponements or adjournments thereof (the "Annual
Meeting"). This proxy statement and the accompanying proxy card and Annual
Report are being mailed to shareholders on or about July 7, 1995. Shareholders
are requested to mark, sign, date and return the enclosed proxy card. Execution
of the proxy card will not affect the shareholder's right to attend the meeting
and vote in person.
PROXIES AND VOTING
It is important that all shareholders' votes be represented at the Annual
Meeting either in person or by proxy. Each proxy will be voted as directed by
the shareholder. Unless specifically directed otherwise, however, proxies will
be voted in favor of each of the nominees and in favor of each of the proposals
indicated in the meeting notice.
A proxy may be revoked by delivering a written notice of revocation to the
Secretary of the Company, by delivering an executed proxy card bearing a later
date to the Secretary of the Company or by appearing at the Annual Meeting and
voting in person.
Each share of the Company's common stock entitles the holder thereof to one
vote upon any business properly presented at the Annual Meeting. At the close of
business on June 9, 1995, the record date, there were 2,377,390 shares of common
stock issued and outstanding. Unless otherwise noted in this proxy statement,
all matters to come before the meeting that are listed on the Notice of Meeting
require the affirmative vote of a majority of those shares present in person or
by proxy and voting at the Annual Meeting to be adopted, assuming that a quorum
is present. A majority of the outstanding shares entitled to vote must be
present in person or represented by proxy at the Annual Meeting to constitute a
quorum. Abstentions and broker non-votes will be treated as shares which are
present and entitled to vote for purposes of determining a quorum but those
shares will not be treated as having been voted for purposes of determining the
approval of any matter submitted to shareholders for a vote.
Participants in the Company's Employee Stock Ownership Plan and in its
Savings and Investment Plan are receiving instruction forms with this proxy
statement rather than a proxy card. The instruction form is to be used by such
participants to direct voting instructions to the trustees. Shares allocated to
a participant's account cannot be voted unless the instruction form is signed
and returned.
ANNUAL REPORT
An Annual Report to Shareholders is being mailed with this proxy statement
and should be referred to with regard to the Company's performance in fiscal
year 1995.
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ITEM 1. ELECTION OF DIRECTORS
GENERAL
Under the Company's Certificate of Incorporation, the Board of Directors is
divided into three classes whose terms are staggered to expire in different
years. The term of office of one class of directors expires each year in
rotation so that one class is elected at each annual meeting of shareholders for
a full three-year term. There are at present seven directorships, the number
having been set by the Board of Directors in accordance with the Company's
by-laws.
The terms of three directors, Mr. Larry M. Fox, Mr. David M. Nolf and Mr.
Dennis G. Punches, expire at the Annual Meeting. The Board of Directors will
nominate these three directors for re-election for terms expiring in 1998.
Unless otherwise indicated on any proxy card, the proxy will be voted to
re-elect these directors.
The Board of Directors knows of no reason why any nominee for director
would be unable to continue to serve as a director. If any nominee should for
any reason be unable to serve, the shares represented by all valid proxies not
containing contrary instructions may be voted for the election of such other
person as the Board may recommend in his or her place, or the Board may reduce
the number of directorships to eliminate the vacancy.
BACKGROUND INFORMATION ABOUT CURRENT DIRECTORS
Set forth below, in alphabetical order, as of May 1, 1995, are the names
and ages of all current directors, including the three directors whose terms
expire in 1995 and who will be nominated for re-election. The information set
forth includes, as to each person, the positions and offices held with the
Company, the period of service to the Company in such capacities, and a brief
account of the person's business experience. Family relationships among the
Board are summarized at the conclusion of this section.
Gary P. Bennett
Gary P. Bennett, 53, is President and Chief Executive Officer of the
Company. He joined the Company in 1972, became an Executive Vice President in
1978, was named Chief Operating Officer in 1984, became President in 1991 and
Chief Executive Officer in November 1992. He is also an officer and director of
various wholly owned subsidiaries of the Company. In addition, he is chairman of
the board of directors of Automation Software Incorporated, the Company's joint
venture with Brown & Sharpe Manufacturing Company. He is a director of
Washington Trust Bancorp, Inc. and a trustee of The Mystic Marinelife Aquarium.
Mr. Bennett has served as a director of the Company since 1979. His present term
of office expires in 1996.
James B. Fox
James B. Fox, 67, has been a director of the Company since 1972. He has
been Chairman of the Board since November 1992. In 1986, Mr. Fox retired from
his position as President of Mobil Oil Credit Corporation, a wholly owned
subsidiary of Mobil Oil Corporation that handles its credit functions. He had
been an employee of Mobil Oil Corporation since 1949. His present term of office
expires in 1996.
Larry M. Fox
Larry M. Fox, 42, has been a director of the Company since 1978. Mr. Fox
has been the Purchasing Manager of VTEL Corporation, a company which
manufactures and supports video teleconferencing
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equipment and systems, since 1991. From 1989 to 1991 he was Vice President and
General Manager of Royal Vans of Texas, Inc., a company involved in recreational
vehicle conversion and from 1981 to 1989 he was Manager of Purchasing/Customer
Services of the Building Services Division of Honeywell, Inc. His present term
of office expires in 1995 and he will be nominated for re-election.
Nelda S. Nardone
Nelda S. Nardone, 56, has been a director of the Company since 1977. She
was corporate secretary from 1976 until 1985. Her present term of office expires
in 1997.
Thurman F. Naylor
Thurman F. Naylor, 75, has been a director of the Company since 1989. Mr.
Naylor has been President and sole stockholder of Cameras and Images
International, Inc., a company involved in the purchase and sale of photographic
materials, since 1984. Prior to 1984, Mr. Naylor was Chairman and President of
Standard Thomson Corporation and Thomson International Corporation,
manufacturers of temperature, pressure and electronic controls. He has also been
a director of Benthos, Inc., a fabricator of oceanographic equipment, since 1987
and a director of CREME de la CREME, which buys, sells and exhibits cameras and
images, since October, 1994. His present term of office expires in 1997.
David M. Nolf
David M. Nolf, 52, is Executive Vice President, Chief Financial and
Administrative Officer and Secretary of the Company. Mr. Nolf has served in
these capacities since 1985. He joined the Company in 1971 and became a Senior
Vice President in 1979. He has been a Company director since 1976 and served as
Chairman of the Board from 1978 to May 1985. He is also an officer and director
of various wholly owned subsidiaries of the Company. In addition, he is a
director of Automation Software Incorporated, the Company's joint venture with
Brown & Sharpe Manufacturing Company. Mr. Nolf also serves as a trustee of The
Westerly Hospital. His present term of office expires in 1995 and he will be
nominated for re-election.
Dennis G. Punches
Dennis G. Punches, 59, has been a director of the Company since May 1992.
He is chairman of Payco American Corporation, the accounts receivable management
company he founded in 1959. Mr. Punches serves as a trustee of Carroll College
and as a director of Intrum Justitia-Netherlands. His present term of office
expires in 1995 and he will be nominated for re-election.
Maurice W. Fox, a co-founder of the Company who died in 1978, was Nelda S.
Nardone's husband. James B. Fox, Maurice W. Fox's brother, is the father of
Larry M. Fox.
NOMINATING PROCESS
Pursuant to the Company's by-laws, nominations for the election of
directors may be made by the Board of Directors or by a nominating committee
appointed by the Board of Directors. The directors named above for re-election
will be nominated at the Annual Meeting by the Board of Directors. Any
shareholder entitled to vote in the election of directors may nominate one or
more persons for election as directors at an annual meeting, if written notice
of such shareholder's intention to make such nomination or nominations has been
given in the manner provided in the Company's by-laws at least 90 days in
advance of the annual meeting. Any such notice must set forth the information
required by the by-laws concerning identification and standing of the
shareholder and the nominee(s), their relationship, information about the
nominee(s) and consent of
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the nominee(s). As no such notices were received, no nominations from
shareholders will be accepted at the Annual Meeting.
COMMITTEES OF THE BOARD AND MEETINGS OF THE BOARD AND COMMITTEES
The standing committees of the Board of Directors are as follows: an Audit
Committee comprised of Larry M. Fox and Nelda S. Nardone; a Compensation
Committee comprised of Thurman F. Naylor and Dennis G. Punches; and a Stock
Option Committee comprised of James B. Fox, Larry M. Fox and Nelda S. Nardone.
In fiscal 1995 the Board of Directors met five times. During the period, the
incumbent directors attended 100% of the meetings of the Board of Directors and
meetings of the committees of the Board of which they were members. In addition,
Board of Directors' action was taken by unanimous written consent seven times
during the year in lieu of meetings. The Audit Committee met four times with
three of the four meetings conducted via teleconferences; the Compensation
Committee acted twice by unanimous written consent; and the Stock Option
Committee acted seven times by unanimous written consent.
The Audit Committee monitors and approves all services provided by the
Company's independent public accountants, consults with the accountants on the
scope of the audit and the adequacy of internal controls, reviews audit reports
and accompanying management letters and advises the Board on the annual
selection of the Company's independent public accounting firm.
The Compensation Committee reviews and recommends to the Board all forms of
remuneration and perquisites for the Company's officers at the level of senior
vice president and higher and monitors the Company's compliance with all
applicable executive compensation rules.
The Stock Option Committee administers the Company's various stock option
plans and is responsible for awarding stock option grants to key employees.
There are no standing nominating committees of the Board of Directors or
committees performing similar functions.
COMPENSATION OF DIRECTORS
Members of the Board of Directors who are not also full-time employees of
the Company receive a retainer of $14,000 per year and also receive a meeting
fee of $1,500 for each Board or committee meeting they attend in person. In
addition to the directors' retainer and meeting fees, Mr. James B. Fox, Chairman
of the Board, receives an annual retainer of $50,000. All directors are
reimbursed for their travel and lodging expenses.
The Company maintains a deferred compensation plan, pursuant to which the
Chairman of the Board and any director of the Company, who is not also an
employee of the Company or an employee of an affiliate of the Company, may elect
annually to defer from 10% to 100% of his or her annual compensation from the
Company. A deferred income account is established in the name of each
participant with self-directed investment options. While the right of the
participant to receive deferred compensation equal to the amount in such account
is always 100% vested, such right is that of a general, unsecured creditor of
the Company. Benefits are payable under the plan following the director's
retirement as a director, upon the director's death or in the event of financial
hardship.
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SECURITY OWNERSHIP OF MANAGEMENT AND 5% SHAREHOLDERS
To the best knowledge of the Company based on information provided to it in
connection with filings made with the Securities and Exchange Commission and the
Company's stock records, the following table sets forth the beneficial ownership
of the Company's common stock as of June 1, 1995 by beneficial owners of more
than 5% of the Company's outstanding common stock, of each director and
executive officer named in the Summary Compensation Table and of all executive
officers and directors as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (2) CLASS
- ------------------------------------------------------------- ------------------------ ----------
<S> <C> <C>
A&T Employee Stock Ownership Trust (1) 456,116(3) 19.2
Dimensional Fund Advisors, Inc. (1) 125,000(4) 5.3
Lindner Fund, Inc. (1) 123,512 5.2
Nelda S. Nardone 117,807(5) 5.0
Gary P. Bennett 90,507(6) 3.7
David M. Nolf 75,929(7) 3.2
Thomas J. Will 42,976(8) 1.8
James B. Fox 38,298(9) 1.6
Jay W. Ryerson 29,162(10) 1.2
Larry M. Fox 26,004(11) 1.1
Gerald Snyder 15,625(12) *
Dennis G. Punches 1,000 *
Thurman F. Naylor 1,000 *
Executive Officers and Directors as a Group 438,308(13) 17.4
</TABLE>
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(*) Indicates less than 1.0%
(1) The address for Lindner Fund, Inc. is 7711 Carondelet Avenue, Box
16900, St. Louis, MO 63105. The address for Dimensional Fund Advisors, Inc. is
1299 Ocean Avenue, 11th Floor, Santa Monica, CA 90401. The address for the
individual shareholders and the Company's Employee Stock Ownership Trust is c/o
Analysis & Technology, Inc., Route 2, P.O. Box 220, North Stonington,
Connecticut 06359.
(2) Beneficial ownership of a security consists of sole or shared voting
power, including the power to direct the vote and/or sole or shared investment
power, including the power to dispose or direct the disposition with respect to
a security, whether through any contract, arrangement, understanding,
relationship or otherwise. The persons named in the table have sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by each of them, except for shares of common stock held by
the Company's Employee Stock Ownership Trust for which such persons have voting
power, and shared dispositive power, and except as may be disclosed in the
following footnotes.
(3) Includes 40,403 shares which are also reported as being beneficially
owned by other parties named in the table and by all executive officers and
directors as a group who are among the beneficiaries of the trust. The Trustees
of this trust only have a limited right to dispose of the shares held in the
trust. The right to vote the allocated shares belongs to the employee
beneficiaries in accordance with the number of shares credited to their accounts
in the trust. The Trustees of this trust have the right to vote any shares not
allocated to the accounts of employee beneficiaries.
(4) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 125,000 shares of
Analysis & Technology, Inc. stock as of December 31, 1994, all of which shares
are held in portfolios of DFA Investment Dimensions Group, Inc., a registered
open-end
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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, for all of which
Dimensional Fund Advisors Inc. serves as investment manager. Dimensional
disclaims beneficial ownership of all such shares.
(5) Includes 1,700 shares held by Mrs. Nardone's husband for which she may
be deemed to have shared voting and investment powers.
(6) Includes 3,200 shares held by Mr. Bennett's wife for which Mr. Bennett
may be deemed to have shared voting and investment powers and includes 54,767
shares subject to options which are exercisable within 60 days of June 1, 1995.
(7) Includes 4,000 shares held by Mr. Nolf's wife and 17,600 shares held
jointly by Mr. and Mrs. Nolf, for which Mr. Nolf may be deemed to have shared
voting and investment powers; and includes 23,883 shares subject to options
which are exercisable within 60 days of June 1, 1995.
(8) Includes 35,800 shares subject to options which are exercisable within
60 days of June 1, 1995.
(9) Includes 4,298 shares held by Mr. Fox's wife, for which Mr. Fox may be
deemed to have shared voting and investment powers.
(10) Includes 200 shares held by Mr. Ryerson's wife for which Mr. Ryerson
may be deemed to have shared voting and investment powers and 21,917 shares
subject to options which are exercisable within 60 days of June 1, 1995.
(11) Includes 2,823 shares held by Mr. Fox's wife, 6,477 shares held by Mr.
Fox for a minor child; 4,400 shares held by Mr. Fox for a second minor child;
and 400 shares held jointly by Mr. and Mrs. Fox, for which Mr. Fox may be deemed
to have shared voting and investment powers.
(12) Includes 13,533 shares subject to options which are exercisable within
60 days of June 1, 1995.
(13) Includes the shares listed in notes (5)-(12) above and 13,533 shares
subject to options which are exercisable within 60 days of June 1, 1995.
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Report of the Compensation Committee
and the Stock Option Committee
on Executive Compensation
Introduction
This report is provided by the Company's Compensation Committee and the
Stock Option Committee to assist shareholders in understanding the objectives
and procedures used in establishing the compensation of the Company's
President/Chief Executive Officer ("CEO") and other senior Company executives
for the Company's fiscal year ended March 31, 1995.
The Compensation Committee reviewed and recommended to the Board of
Directors the overall remuneration and perquisites for the Company's CEO and
other officers at the level of senior vice president and higher. Based on the
recommendations of the Compensation Committee, the Board of Directors determined
the compensation to be paid to the CEO and officers at the level of senior vice
president and higher for the Company's fiscal year ended March 31, 1995. The
Stock Option Committee is responsible for administering the Company's stock
option plans. The Compensation Committee and the Stock Option Committee are
composed solely of non-employee directors.
Compensation Philosophy and Principles
The design of the Company's executive compensation program is based on four
fundamental principles. First, compensation awards are directly related to the
financial results of the Company or a business unit and to individual
contributions and accomplishments. The second principle underlying the program
is that it should offer compensation opportunities comparable to those provided
by other companies with which the Company competes both for business and for
employees. It is essential that the Company be able to retain and reward
talented executives who are critical to its long-term success in its competitive
marketplace. The third principle is that an appropriate balance between base
salary and short-and long-term incentive opportunities should be maintained. The
final principle is that the compensation program must provide a long-term
incentive for executives to continue providing service to the Company by
directly linking the long-term success and prosperity of executives to the
long-term success and prosperity of the Company.
Independent Compensation Consultant Review
In carrying out its compensation philosophy and principles, the Company has
periodically utilized the services of an independent compensation consultant to
review the Company's executive compensation program. These reviews have focused
on (i) the competitiveness and appropriateness of annual total compensation,
defined as salary and cash incentive bonus under the Performance Incentive
Compensation Plan; (ii) the design and performance goals of the Performance
Incentive Compensation Plan; and (iii) an analysis of the total compensation of
the CEO and four other senior executive positions compared with the comparable
compensation as determined by reference to both published and proprietary
surveys and a review of seven peer companies as reported in their proxy
statements. The conclusions and recommendations of the consultant have been
considered this past year by the Compensation Committee in its implementation of
the Company's executive compensation program.
The Compensation Committee intends to continue periodically to use the
services of an independent consultant to assess both the appropriate components
to be included in the total compensation package of the CEO and the senior
executives and the competitive status of the Company's compensation program.
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Key Elements of Executive Compensation
The Company's executive compensation program consists of three basic
elements-base salary, annual performance incentives and long-term incentives.
* Base Salary
The Compensation Committee recommends base salaries for the Company's
senior executives, working with advice submitted by the CEO and the Company's
senior human resources staff. The base salary is established after reviewing
industry, peer group and national compensation data provided by the consultant,
focusing on the median percentile of compensation for comparable positions.
While some of the companies used as a basis for comparison are selected from the
companies comprising the index of SIC Code 8711 used for the Performance Graph
which appears on page 14 of this proxy statement, other companies are included
in order to concentrate on companies of a comparable size and to include
companies with product lines outside engineering services which are similar to
those of the Company.
* Annual Performance Incentives
Under the Performance Incentive Compensation Plan, key employees of the
Company may be awarded annual bonuses in amounts determined by the Compensation
Committee. Executive officers and senior managers throughout the Company are
eligible for participation in the Performance Incentive Compensation Plan. The
purpose of the Performance Incentive Compensation Plan is to deliver competitive
levels of compensation for the attainment of financial and non-financial
objectives which the Compensation Committee believes are primary determinants of
the success of the Company. The Compensation Committee reviews the
administration of the overall plan, approves and recommends to the Board of
Directors the annual bonuses for senior officers reporting to the CEO, and
determines the appropriate award to be recommended to the Board of Directors for
the CEO.
Performance is measured in the business units by attainment of
predetermined goals. The Compensation Committee approves corporate goals which
provide the basis for the payment of awards. Key financial performance goals for
fiscal year 1995 were to achieve growth in earnings per share and revenue. Key
non-financial performance goals included increasing contract backlog in defense
markets, developing A&T's high potential employees, and continuing to implement
a diversification strategy into commercial and civil government markets. For
fiscal 1995, the typical executive officer's award, including the CEO, was
weighted as follows: 75% based upon financial performance results and 25% based
upon non-financial performance results. Within the financial performance
category, the order of priority was as follows: earnings per share and revenue
growth. With respect to the non-financial performance factors, business
diversification was deemed most significant, followed in order of priority by
human resources development and increasing contract backlog in defense markets.
Each participant has a target award expressed as a percentage of base salary.
The percentage increases for higher positions within the Company, thereby
placing a greater percentage of total compensation at risk for those individuals
with greater responsibility for business results. This year, the Compensation
Committee reviewed the Company's performance against the goals, and made
adjustments for unusual items as appropriate. Actual awards for individuals are
adjusted upward or downward from the target to reflect the fiscal year-end
results of the Company or business unit and are further dependent upon the
individual's contribution during the year. Compensation under the Performance
Incentive Compensation Plan is paid in cash during the first quarter of each
fiscal year for services rendered during the previous fiscal year. Based on
survey data, the Compensation Committee believes that target awards for senior
executives under the Performance Incentive Compensation Plan for the last fiscal
year are at the low end of the competitive range.
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* Long-Term Incentives
The fourth principle of the Company's executive compensation program, the
provision of long-term incentives to its executives, is realized through the
Company's various stock option plans. The Stock Option Committee determines at
its discretion the key employees of the Company to whom options are awarded, the
number of shares of the Company's common stock for which options are granted,
and whether the options granted are incentive or non-qualified options.
Incentive stock options are granted under these plans at fair market value at
the time of the option grant and have a term of seven years. Options are
exercisable in cumulative annual installments of 20% of the total number of
shares covered. The potential gain to the recipients will depend on the
Company's future stock price.
In fiscal 1995, stock options were granted to selected key employees. In
setting the size of grants for executives, the Stock Option Committee took into
consideration an employee's position, individual performance, number and terms
of stock options presently held, and the total number of shares available for
issuance under the various stock option plans.
Compensation of the CEO
As reported in the Summary Compensation Table on page 11 of this Proxy
Statement, Mr. Bennett's salary was $210,372 for fiscal year 1995. In
determining the overall level of Mr. Bennett's compensation, the Committee took
into consideration his performance and survey information provided by an
independent, professional compensation consultant. Considering Mr. Bennett's and
the Company's performance, and the fact that in 1994 Mr. Bennett's base salary
of $192,981 was low compared to the compensation paid for the President and CEO
position at the surveyed companies, the Committee took action to bring his base
salary closer to competitive market levels.
The Committee recommended, and the Board approved, a fiscal year 1995
incentive award of $40,000 reflecting the Committee's assessment of Mr.
Bennett's performance against his objectives. Mr. Bennett's key financial
objectives were earnings per share and revenue growth. The first financial
objective was 96 percent achieved, while the second one was slightly exceeded.
Mr. Bennett's non-financial objectives consisted of: (1) continuing to implement
a diversification strategy into commercial and civil government markets; (2)
developing A&T's high potential employees; and (3) increasing contract backlog
in defense markets. The first non-financial objective was partially achieved and
the last two were fully achieved. The Company continued to make progress in its
diversification efforts with nondefense revenue up 10% for the year including an
increase in commercial sales of 25%.
A stock option to acquire 5,000 shares was granted to Mr. Bennett during
fiscal year 1995. This award was consistent with the total compensation
strategy, approved by the Committee, whereby stock options serve as an important
piece of Mr. Bennett's total compensation package.
Omnibus Budget Reconciliation Act Implications for Executive Compensation
It is the responsibility of the Compensation and Stock Option Committees to
address the issues raised by the recent change in the tax laws which made
certain non-performance-based compensation to executives of public companies in
excess of $1,000,000 non-deductible to the Company beginning in 1995. In this
regard, the Committees must determine whether any actions with respect to this
new limit should be taken by the Company. At this time, it is not anticipated
that any Company executive officer will receive compensation in excess of this
limit during 1995. Therefore, the Compensation Committee has not taken any
action to comply with the new limit. The Compensation Committee will continue to
monitor this situation and will take appropriate action if it is warranted in
the future.
Page 9
<PAGE> 13
The Compensation and Stock Option Committees believe that executive
compensation for fiscal 1995 adequately reflects their policies, which are to
align executive compensation with the Company's overall business strategy,
values and management initiative, and to ensure that the Company's goals and
performance are consistent with the interests of its shareholders.
<TABLE>
<CAPTION>
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
- ---------------------- ----------------------
<S> <C>
Thurman F. Naylor James B. Fox
Dennis G. Punches Larry M. Fox
Nelda S. Nardone
</TABLE>
Page 10
<PAGE> 14
COMPENSATION OF EXECUTIVE OFFICERS
The following table summarizes all the compensation paid to the Company's
CEO and to each of the Company's four most highly compensated executive officers
other than the CEO for services rendered in all capacities to the Company for
the fiscal years ended March 31, 1995, 1994 and 1993, respectively.
TABLE I
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM
COMPENSATION
NAME AND PRINCIPAL FISCAL ----------------------- ------------ ALL OTHER
POSITION YEAR SALARY (1) BONUS (2) OPTIONS (3) COMPENSATION (4)
- ---------------------------- ------ ---------- --------- ------------ ----------------
<S> <C> <C> <C> <C> <C>
G.P. Bennett 1995 $210,372 $40,000 5,000 $ 10,133
President and Chief
Executive 1994 192,981 37,000 0 8,996
Officer 1993 161,071 31,000 12,000 6,414
D.M. Nolf 1995 $191,492 $35,000 4,000 $ 10,371
Executive Vice President,
Chief 1994 178,295 34,000 0 8,494
Financial and
Administrative 1993 156,091 28,000 12,000 6,327
Officer
T.J. Will, Sr. 1995 $166,563 $33,000 3,000 $ 12,765(5)
Executive Vice President, 1994 163,695 12,000 0 17,330(5)
Corporate Development 1993 148,945 25,000 10,000 16,293(5)
Manager
J.W. Ryerson 1995 $170,833 $40,000 4,000 $ 7,734
Executive Vice President, 1994 156,439 30,000 0 6,573
Chief Operating Officer 1993 128,721 25,000 10,000 5,012
G. Snyder 1995 $121,392 $19,500 3,500 $ 4,717
Senior Vice President, 1994 114,627 22,500 2,000 4,012
Planning, Corporate 1993 99,903 15,000 8,000 3,663
Manager, Finance & Budgets
D.L. Tubesing (6) 1995 $165,963 $ 0 3,000 $ 486
Executive Vice President 1994 31,285 25,000 10,000 10,000(7)
Interactive Multimedia 1993 0 0 0 0
Group
</TABLE>
- ---------------
(1) Includes salary amounts paid and deferred, including the value of benefits
paid and deferred, pursuant to the Company's Managers' Benefit Options Plan,
the Officers Benefit Options Plan and the Deferred Compensation Plan.
(2) Includes bonus amounts paid and deferred pursuant to the Company's
Performance Incentive Compensation Plan and the Deferred Compensation Plan.
Amounts represent bonus awards determined for the performance year indicated
and paid in the following year.
(3) Options were granted pursuant to the Company's various stock option plans.
(4) Represents Company contributions to the Company's Savings and Investment
Plan, 401(k) Restitution Plan, and Employee Stock Ownership Plan on behalf
of each named officer.
(5) Includes cash payment in lieu of vacation.
(6) Mr. Tubesing was hired in January 1994 and left the Company in February
1995.
(7) Represents a sign-on bonus paid to Mr. Tubesing in January 1994.
Page 11
<PAGE> 15
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to grants of stock
options pursuant to the various Company stock option plans during the fiscal
year ended March 31, 1995 to the executive officers identified in the Summary
Compensation Table. Under all of the stock option plans, other than the 1994 and
1995 Stock Option Plans, an optionee may elect to relinquish up to 30% of an
option being exercised and receive a cash payment equal to the number of shares
covered by the portion of the option relinquished multiplied by the difference
between the option price per share and the fair market value of a share of the
Company's common stock at the time of election. With respect to the executive
officers named in the Summary Compensation Table, this right is subject to the
discretionary consent of the Stock Option Committee. (See Table II)
TABLE II
OPTION/SAR GRANTS IN LAST FISCAL YEAR
4/1/94 TO 3/31/95
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS
-------------------------------------------------------
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS/SARS STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM (4)
OPTIONS/SARS EMPLOYEES IN PRICE PER EXPIRATION --------------------------
NAME GRANTED (#) FISCAL YEAR (1) SHARE (2) DATE (3) 0% (5) 5% 10%
- ----------------- ------------ --------------- --------- ---------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
G.P. Bennett 5,000 3.7 $ 15.00 11/23/01 $0 $30,533 $71,154
D.M. Nolf 4,000 3.0 $ 15.00 11/23/01 $0 $24,426 $56,923
T.J. Will, Sr. 3,000 2.2 $ 15.00 11/23/01 $0 $18,320 $42,692
G. Snyder 3,500 2.6 $ 15.00 11/23/01 $0 $21,373 $49,808
J.W. Ryerson 4,000 3.0 $ 15.00 11/23/01 $0 $24,426 $56,923
D.L. Tubesing 3,000 2.2 $ 15.00 03/10/95(6) $0 $18,320 $42,692
</TABLE>
- ---------------
(1) 134,100 stock options were granted to all employees of the Company as a
group during the fiscal year ended March 31, 1995.
(2) The exercise price is at the average of the high and low market prices on
the date of grant. The exercise price may be paid in cash, by delivery of
shares of common stock of the Company at fair market value, or by a
combination of cash and shares.
(3) Incentive stock options generally have a seven-year term and non-qualified
stock options have a term of up to ten years and one day as determined by
the Stock Option Committee. Options are exercisable over their respective
periods from the date of grant in cumulative annual installments of 20% of
the total number of shares covered. To the extent not already exercisable,
the options become fully exercisable in the event of a "change in control"
as defined in the Company's various stock option plans.
(4) The dollar amounts under the potential realizable values columns use the 0%,
5% and 10% rates of appreciation as permitted by the SEC, and are not
intended to forecast actual future appreciation in the stock price. Actual
gains, if any, on stock option exercises are dependent on the future
performance of the Company's stock. There can be no assurance that the
amounts reflected in this table will be achieved. The assumed rates are
compounded annually to the full seven year term of the options.
(5) No gain to the option is possible without an increase in stock price
appreciation, which will benefit all shareholders commensurately. A zero
percent gain in stock price appreciation will result in zero dollars for the
optionee.
(6) D.L. Tubesing left the Company on February 17, 1995 and his stock options
expired without being exercised on March 10, 1995, twenty-one days after his
departure date.
Page 12
<PAGE> 16
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table provides information concerning each option exercised
during the fiscal year ended March 31, 1995 by each of the executive officers
named in the Summary Compensation Table and the fiscal year-end value of
unexercised options held by such executive officer. (See Table III)
TABLE III
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
4/1/94 TO 3/31/95
ENDING FAIR MARKET VALUE: $12.50
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
SHARES UNDERLYING UNEXERCISED OPTIONS/SARS AT
ACQUIRED ON OPTIONS/SARS AT FY-END (#) FY-END (1)
EXERCISE VALUE -------------------------- --------------------------
NAME (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
G.P. Bennett 0 $ 0 49,767 13,800 $71,236 $ 9,600
D.M. Nolf 8,000 $27,000 23,883 8,000 $55,961 $ 9,600
T.J. Will, Sr. 0 $ 0 35,800 6,400 $89,350 $ 8,000
J.W. Ryerson 0 $ 0 21,917 8,800 $48,027 $11,400
G. Snyder 0 $ 0 13,533 7,200 $19,957 $ 6,400
D.L. Tubesing 0 $ 0 0 0 $ 0 $ 0
</TABLE>
- ---------------
(1) Values stated are based on the closing price of $12.50 per share of the
Company's Common Stock on the NASDAQ on March 31, 1995, the last trading day
of the fiscal year.
Page 13
<PAGE> 17
PERFORMANCE GRAPH
<TABLE>
<CAPTION>
31-MAR- 31-MAR- 31-MAR- 31-MAR- 31-MAR- 31-MAR-
90 91 92 93 94 95
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
ANALYSIS & TECHNOLOGY.................... $ 100 $114.98 $ 96.54 $101.01 $145.64 $121.72
PEER GROUP INDEX......................... $ 100 $109.99 $108.83 $ 92.30 $ 82.62 $ 70.78
NASDAQ MARKET INDEX...................... $ 100 $114.21 $145.58 $167.28 $180.59 $201.30
</TABLE>
The above line graph is a comparison of five-year cumulative total return
of the Company's common stock with (a) a performance index for the broad market
in which the Company's stock is traded and (b) a published industry index. The
Company's stock is traded on the NASDAQ National Market, and the Company's
four-digit industry SIC Code is 8711, Engineering Services. Accordingly, the
performance graph compares the cumulative total return for Company stock with
(a) NASDAQ Market Index and (b) a published industry index comprised of the SIC
Code 8711 companies.
The graph assumes $100 was invested on March 31, 1990 in the stock of
companies in the NASDAQ Index, a published industry index, and in Company stock,
and that all dividends were reinvested.
Total shareholder return is calculated using the closing price of the last
trade date of the stock for such fiscal year. The stock price performance shown
is not intended to forecast or be indicative of the possible future performance
of the Company's stock.
Page 14
<PAGE> 18
ITEM 2. RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick has audited the financial statements of the Company since
fiscal year 1980. The selection of KPMG Peat Marwick to audit the Company's
financial statements for its fiscal year ending March 31, 1996, has been
recommended by the Audit Committee of the Board of Directors and approved by the
Board of Directors. In addition to its audit services, KPMG Peat Marwick
provides certain non-audit services to the Company, including the preparation of
federal and state income tax returns and assistance with government contract
procedures. A representative of KPMG Peat Marwick is expected to be in
attendance at the Annual Meeting. The representative will be given the
opportunity to make a statement if he desires to do so and will be available to
respond to appropriate questions.
The Board of Directors recommends that the shareholders vote in favor of
the following resolution at the Annual Meeting:
RESOLVED: That the appointment of KPMG Peat Marwick by the Board of
Directors of the Company to audit the Company's financial statements for its
fiscal year ending March 31, 1996 be, and it hereby is, ratified, confirmed and
approved.
ITEM 3. PROPOSED 1995 STOCK OPTION PLAN
Other than in fiscal years 1991 and 1993, the Company has adopted employee
stock option plans annually since 1978. The Board of Directors has adopted,
subject to shareholder approval, a 1995 Stock Option Plan (the "1995 Plan"),
which provides for options to be granted to key employees of the Company and its
affiliate corporations, like previous stock option plans of the Company. It also
provides for the grant of options to directors of the Company who are not
employees ("Non-Employee Directors"). The 1995 Plan, if approved by the
shareholders at the Annual Meeting by a majority vote of the shares represented
in person or by proxy, will cover 110,000 shares of the Company's common stock.
No options will be granted under the 1995 Plan until shareholder approval of the
1995 Plan has been obtained. A copy of the 1995 Plan is attached to this proxy
statement as Exhibit A.
The Board of Directors believes that the Company's stock option plans have,
to date, successfully assisted the Company in attracting and retaining quality
employees and in stimulating their performance. The 1995 Plan is intended to
continue those goals. In addition, the 1995 Plan is intended to increase the
Non-Employee directors' proprietary interest in the Company and to align more
closely their interests with the interests of the Company's shareholders by
providing further opportunity for ownership of common stock, thereby giving the
Non-Employee Directors of the Company additional incentive to promote the best
interests of the Company. The Board of Directors recommends that the
shareholders approve the 1995 Plan at the Annual Meeting by adopting the
following resolution:
RESOLVED: That the Analysis & Technology, Inc. 1995 Stock Option Plan
covering 110,000 shares of the Company's common stock, in the form delivered to
shareholders with the proxy statement for this meeting be, and hereby is,
approved, ratified and confirmed.
A summary of the terms of the 1995 Plan is provided below but is qualified
in its entirety by reference to the full text of the 1995 Plan.
The 1995 Plan provides for awards in the form of stock options. Either
incentive or non-qualified options can be granted under the 1995 Plan. To date,
no awards have been made under the 1995 Plan. The total number of shares of the
Company's common stock available for issuance under the 1995 Plan is 110,000. If
Page 15
<PAGE> 19
any options are forfeited or if options terminate for any other reason prior to
exercise, then the underlying shares of common stock again become available for
awards under the 1995 Plan.
The 1995 Plan is administered by a committee (the "Stock Option Committee")
of at least three directors, none of whom is, or has been, eligible to receive
options under the 1995 Plan other than Options granted to a Non-Employee
Director automatically upon his or her election or re-election as a Director in
accordance with the terms of the 1995 Plan. With respect to options granted to
key employees, the Stock Option Committee designates the key employees of the
Company or any affiliate corporation to whom options are awarded and determines
the number of shares of the Company's common stock issuable pursuant to the
exercise of options granted under the 1995 Plan. The Stock Option Committee
determines whether the options granted to key employees of the Company will be
incentive or non-qualified options.
Under the 1995 Plan, options to purchase 5,000 shares of the Company's
common stock are granted to each Non-Employee Director automatically upon his or
her election or re-election as a director of the Company in years 1995, 1996,
and 1997. All such options granted to Non-Employee Directors are non-qualified
options. If the 1995 Plan is approved, it is anticipated that in the aggregate,
options to purchase 25,000 shares of the Company's common stock will have been
granted following the final grant in 1997, if all of the current five Directors
who are not executive officers are re-elected at the expiration of their current
term.
The Company estimates that approximately 100 key employees are eligible to
participate in the 1995 Plan as well as five Non-Employee Directors. No employee
may receive options under the 1995 Plan covering more than 10% of the shares
which may be issued under the 1995 Plan. The 1995 Plan has a seven-year term
and, if approved by the shareholders at the Annual Meeting, will expire on
December 31, 2002.
The 1995 Plan provides for the granting of incentive and non-qualified
stock options, as discussed above. Incentive stock options granted under the
1995 Plan have a seven-year term unless the grant is to a 10% shareholder of the
Company, in which case the term is five years. Non-qualified stock options
granted under the 1995 Plan may have a term of up to ten years and one day as
determined by the Stock Option Committee; provided, however, that non-qualified
stock options granted to Non-Employee Directors have a seven-year term.
Options granted to employees of the Company terminate in connection with
the termination of employment pursuant to the terms of the 1995 Plan. Options
granted to Non-Employee Directors terminate in connection with the termination
of directorship pursuant to the terms of the 1995 Plan. In the event of death,
the option holder's estate (whether such option holder was an employee or a
Non-Employee Director) has either 180 days from the date of death or until the
expiration date of the option, whichever is earlier, to exercise such option
holder's rights to the extent such rights were exercisable at the date of death.
Options are exercisable over their respective periods from the date of grant in
cumulative annual installments of 20% of the total number of shares covered.
The options under the 1995 Plan allow an option holder to pay for shares
purchased upon exercise of an option by cash, by delivery of shares of common
stock of the Company at fair market value, or by a combination of cash and
shares.
Option exercise prices are set at the fair market value of the Company's
shares on the date of the grant, which is based on the average of the high and
low sales prices of the Company's common stock as reported on the NASDAQ
National Market ("NASDAQ") on the day such fair market value is to be
determined. The average of the high and low sales prices per share of the
Company's common stock as reported on NASDAQ on June 23, 1995 was $13.625. As of
that date, the aggregate market value of the shares reserved pursuant to the
1995 Plan was $1,498,750.
Page 16
<PAGE> 20
The 1995 Plan provides for the immediate exercisability of all options upon
a "change in control" (as defined in the 1995 Plan) of the Company.
The grant of an incentive stock option has no immediate federal income tax
consequences to the Company or the optionee. For federal income tax purposes, an
optionee will not realize ordinary income upon exercise of an incentive stock
option. The subsequent sale of stock received on such exercise will generate a
long term capital gain or loss provided the stock is held for the requisite
holding periods, which are two years from the date of grant and one year from
the date of exercise. A disposition of stock received on such exercise before
the requisite holding periods expire produces ordinary income in the year of
disposition equal to the difference between the option price and the fair market
value of the stock on the date of exercise. The balance of the optionee's gain,
if any, on such disposition will be recognized as long-term capital gain if the
rules applicable to the holding period for long-term capital assets are
satisfied. Special rules apply to disqualifying dispositions of such stock where
a loss would be recognized.
Long term capital gains are currently taxed at a maximum rate of 28%. If
incentive stock option shares are purchased for cash, the optionee's income tax
basis will be the amount paid. If the optionee pays with previously acquired
shares, the optionee's aggregate income tax basis in the new shares will be the
same as the aggregate basis of the old shares transferred in the exchange
increased by any gain realized and cash paid.
The Company is not allowed a tax deduction for the benefits conferred upon
employees by incentive stock options unless optionees dispose of stock acquired
under circumstances which cause recognition of ordinary income. In such
circumstances, the Company can take a deduction for the ordinary income realized
by the employee.
Special rules apply to holders of incentive stock options who may be
subject to the alternative minimum tax on "tax preferences."
The grant of a non-qualified stock option would have no immediate federal
income tax consequences to the Company or the optionee. Upon exercise of a
non-qualified option, in contrast to an exercise of an incentive stock option,
the option holder will recognize ordinary income to the extent of the excess of
the fair market value of the stock on the date of exercise (or the date of the
lapse of the Section 16(b) restrictions, if applicable) over the option price.
The Company is entitled to a tax deduction for the ordinary income realized by
the employee.
If non-qualified stock options are exercised using cash, the optionee's tax
basis will be the amount paid plus the amount of income recognized. If the
optionee pays with previously acquired shares, the tax basis in the shares
acquired will be the same as the basis of the shares transferred in the
exchange. The tax basis of the additional shares acquired will be their fair
market value at the time of exercise.
To the extent that the exercisability of an option is accelerated as a
result of a "change in control," the value of the acceleration (the value of the
right to exercise the option sooner than would otherwise have been the case)
could be subject to an excise tax imposed on the optionee under Section 4999 of
the Code and nondeductible by the employer under Code Section 280G. Such
consequences would only follow, however, if the total of the payments contingent
on the change in control (including the value of the acceleration) exceeded
three times the optionee's base compensation as described in the Code.
The preceding paragraphs briefly summarize the applicable federal income
tax laws applicable to the 1995 Plan and should not be considered as a complete
statement thereof.
Page 17
<PAGE> 21
ITEM 4. OTHER BUSINESS
The Board of Directors knows of no other business which is likely to be
brought before the Annual Meeting. However, the persons named in the enclosed
proxy card will, at their discretion, vote the shares they represent upon any
other business which may properly come before the Annual Meeting.
OTHER MATTERS
The cost of solicitation of the proxies will be borne by the Company.
Proxies may be solicited by directors, officers and employees by mail,
telephone, facsimile or in person without additional compensation. Copies of
this proxy statement and of the 1995 Annual Report to Shareholders will be
delivered by the Company, through the services of Proxy Services Corporation, to
brokers, dealers, banks, and voting trustees, or their nominees, for the purpose
of having these materials forwarded to beneficial owners. The Company will pay
Proxy Services Corporation a service charge anticipated to be $2,000 and will
reimburse Proxy Services Corporation for out-of-pocket expenses associated with
each delivery, such expenses to include reimbursement of record holders for
their reasonable expenses in connection with forwarding materials to beneficial
owners. Returned proxies will be processed and tabulated under the supervision
of independent Inspectors of Election.
COMPLIANCE WITH SECTION 16(A) FILINGS
Mr. Thurman F. Naylor, a director, made one late Form 4 filing on or about
May 12, 1995 which related to a single transaction in which he purchased 1,000
shares of the Company's common stock in an open market transaction.
1996 SHAREHOLDER PROPOSALS
In order for shareholder proposals to be eligible for inclusion in the
Company's proxy statement for the 1996 Annual Meeting of Shareholders, they must
be received by the Company at its principal office, Route 2, P.O. Box 220, North
Stonington, Connecticut 06359, by March 8, 1996.
Page 18
<PAGE> 22
EXHIBIT A
ANALYSIS & TECHNOLOGY, INC.
1995 STOCK OPTION PLAN
1. Definitions: as used herein, the following terms have the meanings
hereinafter set forth unless the context clearly indicates to the contrary:
1.1. "Affiliated Corporation" shall mean any corporation which
controls, is controlled by or is under common control with the Corporation
and any predecessor corporation.
1.2. "Board of Directors" shall mean the Board of Directors of the
Corporation.
1.3. "Committee" shall mean the Committee of Directors of the
Corporation to be appointed from time to time by the Corporation's Board of
Directors to administer this Plan.
1.4. "Corporation" shall mean Analysis & Technology, Inc.
1.5. "Fair Market Value" of the Shares shall be deemed to be the
average of the high and low sales price per Share as reported by the NASDAQ
National Market System, or by the national securities exchange on which the
Shares are traded if they are no longer traded on the NASDAQ National
Market System, on the day on which Fair Market Value is to be determined.
If there was no trading activity on such date, the average of the high and
low sales price per share on the most recent date on which a trade occurred
shall be deemed to be the Fair Market Value of a Share on the date in
question. If the Shares are not traded on the NASDAQ National Market System
or a national securities exchange, Fair Market Value of the Shares shall be
determined by the Committee in an equitable manner.
1.6. "Incentive Stock Options" shall mean those Options granted
hereunder or under other plans of the Corporation or any Affiliated
Corporation as Incentive Stock Options as defined in, and which by their
terms comply with the requirements of such options set out in, Section 422
of the Internal Revenue Code of 1986 and Treasury Regulations issued
pursuant thereto.
1.7. "Non-Employee Director" shall mean a director of the Corporation
who is not an employee of the Corporation or an Affiliated Corporation.
1.8. "Non-Qualified Stock Options" shall mean those Options granted
hereunder or otherwise by the Corporation or any Affiliated Corporation
which are not designated as Incentive Stock Options as described in Section
1.6 or, pursuant to Section 6.2, are not treated as Incentive Stock
Options.
1.9. "Option" shall mean an option to purchase Shares granted pursuant
to the provisions of Section 7 of this Plan.
1.10. "Optionee" shall mean an employee or Non-Employee Director to
whom an Option has been granted under this Plan.
1.11. "Plan" shall mean the Analysis & Technology, Inc. 1995 Stock
Option Plan.
1.12. "Shares" shall mean shares of the no par value common stock of
the Corporation.
1.13. "Stock Option Agreement" shall mean the agreement between the
Corporation and the Optionee under which the Optionee may purchase Shares
under this Plan.
1.14. "Ten Percent Shareholder" shall mean an individual who owns
shares of stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation or of its
parent or subsidiary corporation, if any.
2. Purpose of Plan: The purpose of this Plan is to attract and retain
outstanding key employees, to furnish existing key employees with further
inducement to continue their employment with the Corporation and to
Page 19
<PAGE> 23
encourage such employees and Non-Employee Directors to acquire a greater stake
in the Corporation's success and, thus, provide an additional incentive for them
to promote its best interests.
Options granted pursuant to the Plan may be Incentive Stock Options or
Non-Qualified Stock Options or both with respect to employees and Non-Qualified
Stock Options only with respect to Non-Employee Directors.
3. Effective Date: The effective date of this Plan is the date on which
this Plan is approved by the shareholders of the Corporation subsequent to its
adoption by the Board of Directors of the Corporation.
4. Shares Reserved for Plan: Subject to adjustment as provided in Section
12 hereof, a total of One Hundred Ten Thousand (110,000) Shares of the
Corporation shall be subject to this Plan; and such amount of Shares shall be,
and is hereby, reserved for sale for such purpose. The Shares subject to this
Plan shall consist of authorized but unissued Shares or previously issued Shares
reacquired and held by the Corporation as treasury shares. Any of such Shares
which may remain unsold and which are not subject to outstanding options at the
termination of this Plan shall cease to be reserved for the purpose of this
Plan, but until termination of this Plan the Corporation shall at all times
reserve a sufficient number of Shares to meet the requirements of this Plan. If
any Option granted under this Plan shall expire or terminate for any reason
without having been exercised in full, the Shares subject to such Option but not
purchased thereunder shall again be available for Options to be granted under
this Plan.
5. Administration of the Plan:
5.1. The Plan shall be administered by the Committee. The Committee
shall consist of not less than three members of the Corporation's Board of
Directors. Each member of the Committee shall be a "disinterested person"
as such term is defined in Rule 16b-3 under the Securities Exchange Act of
1934. Any member of the Committee who ceases to qualify as a "disinterested
person" for any reason shall, simultaneously with such disqualification,
cease to be a member of the Committee.
5.2. Subject to the terms of this Plan, including, without limitation,
Section 7.2 hereof relating to Options granted to Non-Employee directors
upon their election or re-election as such, the Committee shall have full
and final authority to determine the persons who are to be granted Options
under this Plan and the number of Shares subject to each Option.
5.3. Subject to the terms of this Plan, the Committee shall also have
complete authority to interpret this Plan, to prescribe, amend, and rescind
rules and regulations relating to it, to determine the details and
provisions of each Stock Option Agreement, to determine whether Options to
be granted hereunder shall be Incentive Stock Options or Non-Qualified
Stock Options, and to make all other determinations necessary or desirable
in the administration of this Plan.
6. Eligibility:
6.1. The individuals who shall be eligible to participate in this Plan
and to receive Options hereunder shall be such key employees of the
Corporation and its Affiliated Corporations as the Committee shall, in its
sole discretion, determine and Non-Employee Directors in accordance with
Section 7.2 hereof. In determining the employees to whom Options shall be
granted and the number of Shares to be covered by each Option, the
Committee may take into account the nature of the services rendered by the
respective employees, their present and potential contributions to the
success of the Corporation and its Affiliated Corporations and such other
factors as the Committee, in its discretion, may deem relevant. Options may
be granted to key employees who hold or have held options under previous
plans.
6.2. No employee may receive Options under this Plan covering more
than ten percent (10%) of the total number of Shares reserved under Section
4 of this Plan. In addition, the aggregate Fair Market Value (determined as
of the time the Option is granted) of Shares with respect to which
Incentive Stock
Page 20
<PAGE> 24
Options are exercisable for the first time by any employee in any one
calendar year (under all stock option plans of the Corporation or any
Affiliated Corporation) shall not exceed $100,000. In the event any Option
or Options intended as Incentive Stock Options become exercisable
(including by reason of acceleration of exercisability as provided in
Section 12(b) hereof or otherwise) in such a way that the foregoing
limitation would be exceeded in any year, such Option or Options shall be
exercisable in such year; but to the extent such exercisability would cause
such limitation to be exceeded, the value of the shares in excess of
$100,000 shall be treated as Non-Qualified Stock Options when exercised
rather than treated as Incentive Stock Options.
7. Option Grant:
7.1. Each Option granted under this Plan to an employee of the
Corporation shall be evidenced by minutes of a meeting of the Committee or
the unanimous written consent of all members of the Committee and by a
written Stock Option Agreement effective as of the date of the grant and
executed by the Corporation and the employee, which Stock Option Agreement
shall set forth such terms and conditions as may be determined by the
Committee to be consistent with this Plan.
7.2. Immediately following the Corporation's annual meeting of
shareholders held in the years 1995, 1996 and 1997 each Non-Employee
Director elected or re-elected, as the case may be, to office at such
meeting automatically shall be granted an option to acquire 5,000 Shares.
Each Option granted pursuant to this Section 7.2 shall be evidenced by a
written Stock Option Agreement effective as of the date of the grant and
executed by the Corporation and the director, which Stock Option Agreement
shall set forth such terms and conditions as may be determined by the
Committee to be consistent with this Plan. The provisions of this Section
7.2 shall not be amended more than once every six months, other than to
comport with changes in the Internal Revenue Code of 1986, the Employee
Retirement Income Security Act, or the rules thereunder.
8. Term of Option:
8.1. Each Incentive Stock Option shall commence on the date as of
which the Stock Option Agreement is effective between the Corporation and
the Optionee and shall terminate seven (7) years thereafter; provided,
however, that if at the time the Option is granted the Optionee is a Ten
Percent Shareholder the Option shall terminate five (5) years thereafter.
Each Non-Qualified Option shall commence on the date as of which the Stock
Option Agreement is effective between the Corporation and the Optionee and
shall terminate, in the case of a Non-Qualified Option granted other than
to a Non-Employee Director, at such time as is provided in the relevant
Stock Option Agreement, up to ten (10) years and one (1) day after the date
of the grant and, in the case of a Non-Qualified Option granted to a
Non-Employee Director, seven (7) years after the date of the grant. In any
case, if the Optionee shall cease to be a regular full-time employee of the
Corporation, or an Affiliated Corporation, for any reason other than a
termination for cause or a termination by reason of death, or, with respect
to Non-Employee Directors, if the Optionee shall cease to be a director of
the Corporation for any reason other than removal by the shareholders of
the Corporation for cause or by reason of death, any unexercised portion of
said Option shall terminate sixty (60) days after the date of the
termination of employment or directorship, as the case may be, or upon the
expiration of the Option, whichever shall first occur.
8.2. In the event that the Optionee's employment is terminated for
cause or with respect to a Non-Employee Director, the Optionee is removed
as a director of the Corporation by the shareholders for cause, the
unexercised portion of the Option shall terminate immediately upon the
giving of the notice of such termination or removal. Nothing in this Plan
or in any Option granted pursuant to this Plan shall confer on any Optionee
the right to continue in the service of the Corporation or any of its
Affiliated Corporations, or interfere in any way with the right of the
Corporation or any of its subsidiaries or
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affiliates to terminate the Optionee's employment at any time or the right
of the shareholders of the Corporation to remove or to fail to re-elect any
director of the Corporation.
8.3. In the event of the death of the Optionee, the Optionee's estate
shall have the privilege of exercising any rights not theretofore exercised
by the Optionee, to the extent that the Optionee was entitled to exercise
such rights on the date of the Optionee's death; but in such event, the
period of time within which the purchase may be made shall be the earlier
of (a) 180 days next succeeding the death of the Optionee or (b) the
expiration of the term of the Option.
9. Exercise of Option: An Option granted under this Plan shall become
exercisable in installments as follows: to the extent of twenty percent (20%) of
the number of Shares originally covered thereby at any time after the
commencement of the Option; and, to the extent of an additional 20% of such
number of Shares per year at any time after the commencement of the second,
third, fourth and fifth years of the term of the Option; and such installments
shall be cumulative. The Option to purchase such Shares may be exercised in
whole or in part as to any Shares which have become purchasable under the
provisions of the Option at any time during the term of the Option by written
notice delivered to the Corporation. Such notice shall state the number of
Shares with respect to which the Option is being exercised and shall be
accompanied by payment in full of the purchase price of such Shares. Payment
shall be made to the Corporation either: (a) in cash (including certified check,
bank draft, or money order); or (b) by delivering Shares already owned by the
Optionee, which shall be valued at their Fair Market Value on the day on which
notice of exercise is received by the Corporation; or (c) a combination of such
Shares and cash. Delivery of Shares pursuant to alternative (b) or (c) above
shall be accomplished by the Optionee's delivery of one or more stock
certificates representing at least the number of Shares to be used to pay for
the option exercise, duly endorsed for transfer or accompanied by one or more
properly executed stock powers, together with written instructions to the
Corporation as to the number of Shares to be used for payment. Unless the Shares
to be purchased have been registered under the applicable securities laws, a
notice of exercise hereunder shall be accompanied by an investment letter
indicating nondistributive intent in a form approved by the Committee.
10. Option Price: The purchase price per Share shall be the Fair Market
Value of a Share as of the effective date of the Stock Option Agreement entered
into between the Corporation and the Optionee. Provided, however, with respect
to Incentive Stock Options, if at the time the Option is granted the Optionee is
a Ten Percent Shareholder, the purchase price per Share for said Optionee shall
be one hundred ten percent (110%) of the Fair Market Value of a Share as of the
effective date of the Stock Option Agreement entered into between the
Corporation and the Optionee.
11. Non-assignability of Option: The Option to purchase shall not be
transferable by the Optionee and shall be exercisable, during the Optionee's
lifetime, only by the Optionee.
12. Adjustment Upon Fundamental Corporate Change:
(a) Notwithstanding any other provisions of this Plan, each Stock
Option Agreement shall contain such provisions as the Committee shall
determine to be appropriate for the adjustment of the number, kind,
class or issuer of Shares subject to such Option, the option price
and/or such other provisions as the Committee shall deem advisable or
necessary in connection with fundamental corporate changes of the
Corporation by reason of any stock dividend, stock split,
recapitalization, combination or exchange of Shares, merger,
consolidation, acquisition of property or stock, the sale of
substantially all corporate assets, separation, reorganization or
liquidation and the like.
(b) Notwithstanding any other provision of this Plan or any Option
granted hereunder, each Option granted under this Plan and still
outstanding shall become immediately exercisable in the event that there
is a "Change in Control" of the Corporation; provided, however, that in
the case of
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<PAGE> 26
an Incentive Stock Option, such acceleration of exercisability shall be
subject to the limitations of Section 6.2 of this Plan. For purposes of
this Plan, the term "Change in Control" shall mean the acquisition of
25% or more of the Beneficial Ownership of the voting securities of the
Corporation by any Person either directly or indirectly or acting
through one or more other Persons; provided, however, that, for purposes
of this Plan, no Change in Control shall be deemed to have occurred if
prior to the acquisition of 25% or more of the Beneficial Ownership of
the voting securities of the Corporation, the Board of Directors shall
have adopted, by not less than a two-thirds vote, a resolution
specifically approving such acquisition. A "Person" shall include a
natural person, corporation, or other entity, but shall not include any
employee benefit plan maintained by the Corporation or an Affiliated
Corporation. When two or more Persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of acquiring,
holding or disposing of the Corporation's stock, such partnership,
syndicate or other group shall be considered one Person. "Beneficial
Ownership" shall be determined under the then-current provisions of Rule
13d-3 promulgated under the Securities Exchange Act of 1934.
13. Compliance with Laws: Notwithstanding any other provisions of this
Plan, each Stock Option Agreement shall contain such provisions as the Committee
shall determine to be appropriate to ensure that the Optionee agrees for the
Optionee and the Optionee's legal representatives, that the Option shall not be
exercisable by the Optionee or the Optionee's legal representatives, and that
the Corporation shall not be obligated to issue any Shares, during a time period
in which such exercise would adversely affect the Corporation under applicable
state or federal securities laws. The Corporation shall, however, provide
Optionee with an opportunity to elect to exercise the Options, within the limits
specified in this Plan, at a minimum of approximately once a year and, if not
sooner terminated, at the termination of the Option's term. If an Option is
terminated early pursuant to Section 8.1 or 8.3 of this Plan, and if the
Optionee attempts to exercise the Option, in accordance with its terms, within
the period specified in Sections 8.1 or 8.3, as applicable, and if the
Corporation determines that it should defer the exercise for the securities laws
compliance reasons previously referenced in this Section, then the Corporation
may extend the period of time during which an Optionee may exercise the Option.
Any such extension shall last only until the next time the Corporation provides
the Optionees with an opportunity to exercise Options granted under this Plan.
The Corporation shall have the right to require the payment (through
withholding from the participant's salary, or otherwise as the Corporation shall
determine) of any federal and state taxes required to be withheld from any
transfer of Shares hereunder (including a transfer of Shares on exercise of an
Option granted hereunder).
14. No Rights in Option Stock: No Optionee shall have any rights as a
shareholder with respect to Shares as to which the Option shall not have been
exercised and payment made as herein provided, and an Optionee shall have no
rights with respect to such Shares not expressly conferred by this Plan.
15. Effect on Changes in Capital Structure: The existence of the Option to
purchase shall not affect in any way the right or power of the Corporation or
its shareholders to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Corporation's capital structure or its
business, or any merger or consolidation of the Corporation, or any issue of
bonds, debentures, preferred or prior preference stocks ahead of or affecting
the capital stock or the rights thereof, or the dissolution or liquidation of
the Corporation, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceedings, whether of a similar
character or otherwise.
16. Successors: This Plan shall be binding upon any successors of the
Corporation.
17. Amendment and Termination: Unless this Plan shall theretofore have been
terminated as hereinafter provided, it shall terminate on December 31, 2002,
except as to Options previously granted and outstanding
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under this Plan at that date, and no Option shall be granted hereunder after
that date. This Plan may be terminated, modified, or amended by the shareholders
of the Corporation. The Board of Directors may terminate this Plan or make such
modifications or amendments thereof as it shall deem advisable, or in order to
conform to any change in any law or regulation applicable thereto; provided,
however, that the Board of Directors may not, without further approval by the
shareholders of the Corporation, in the manner required by Connecticut law, (a)
increase the maximum number of Shares as to which Options may be granted under
this Plan, except as may be needed to make necessary adjustments pursuant to
Section 12 of this Plan, (b) change the class of Persons eligible to be granted
Options, (c) increase the periods during which Options may be granted or
exercised, except as provided in Section 13 of this Plan, or (d) provide for the
administration of this Plan otherwise than by the Committee. No termination,
modification, or amendment of this Plan may, without the consent of an Optionee
to whom any Option shall theretofore have been granted, adversely affect the
rights of such Optionee under such Option.
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<PAGE> 28
PROXY PROXY
ANALYSIS & TECHNOLOGY, INC.
ROUTE 2, P.O. BOX 220
NORTH STONINGTON, CONNECTICUT 06359
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Gary P. Bennett and Nelda S. Nardone as
proxies, each with the power to appoint his or her substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side, all
the shares of common stock of Analysis & Technology, Inc. (the "Company") held
of record by the undersigned on June 9, 1995, at the Annual Meeting of
Shareholders to be held on August 8, 1995 or any adjournment thereof.
(Continued on reverse side)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE> 29
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2 AND 3.
1. Election of Directors (terms to expire in 1998) Larry M. Fox, David M. Nolf,
Dennis G. Punches
FOR all nominees WITHHOLD (INSTRUCTION: To withhold authority to
listed above (except AUTHORITY vote for any individual nominee, write
as marked to the to vote for that nominee's name in the space
contrary). all nominees provided below.)
listed above.
/ / / / --------------------------------------
2. Proposal to ratify the selection of KPMG Peat Marwick as the independent
public accountants of the Company for the fiscal year ending March 31, 1996.
FOR AGAINST ABSTAIN
/ / / / / /
3. Approval of the 1995 Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
PLEASE MARK INSIDE BLUE BOXES SO THAT DATA PROCESSING EQUIPMENT WILL RECORD
YOUR VOTES
The undersigned acknowledges receipt of the Notice of Annual Meeting and Proxy
Statement.
Each person named to the left is asked to sign this proxy exactly as his or her
name appears, including the title "Executor," "Trustee," etc., if the same is
indicated. If more than one person's name is set forth, all should sign. If
stock is held in the name of a corporation or partnership, this proxy should be
executed by a properly authorized person.
Dated: __________________________________________________________________, 1995
_______________________________________________________________________________
Signature
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Signature, if held jointly
Shareholders planning to attend the Annual Meeting in person are asked to check
this block / /.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
FOLD AND DETACH HERE
