<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>
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/X/ 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:
500
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
LOGO
July 5, 1996
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 13, 1996, 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 1996 ANNUAL MEETING OF SHAREHOLDERS
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To the Shareholders of Analysis & Technology, Inc.:
The 1996 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 13, 1996 to consider and act on the following matters:
1. Election of directors;
2. Ratification of the appointment of independent public accountants for
fiscal year 1997;
3. Any other matters which may properly come before the meeting.
Shareholders of record at the close of business on June 7, 1996 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 5, 1996
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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
PROXY STATEMENT
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 1996 Annual Meeting of Shareholders to be held at The
Mystic Hilton, Coogan Boulevard, Mystic, Connecticut on August 13, 1996 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 5, 1996. 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 7, 1996, the record date, there were 2,342,215 shares of common
stock issued and outstanding. Unless otherwise noted in this proxy statement,
all matters listed on the Notice of Meeting require the affirmative vote of a
majority of those shares present and voting in person or by proxy at the Annual
Meeting to be adopted. This assumes 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
A&T's 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 1996.
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<PAGE> 5
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 two directors, Mr. Gary P. Bennett and Mr. James B. Fox,
expire at the Annual Meeting. The Board of Directors nominates these two
directors for re-election for terms expiring in 1999. 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, 1996, are the names
and ages of all current directors, including the two directors whose terms
expire in 1996 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, 54, 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. as well as a director of the Connecticut Center
for Educational and Training Technologies, Inc. Mr. Bennett has served as a
director of the Company since 1979. His present term of office expires in 1996
and he will be nominated for re-election.
James B. Fox
James B. Fox, 68, 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 and he will be nominated for re-election.
Larry M. Fox
Larry M. Fox, 43, has been a director of the Company since 1978. Mr. Fox is
Operations Manager for VTEL Corporation, a company which manufactures and
supports video teleconferencing equipment and systems, and has been with VTEL
Corporation since 1991. From 1989 to 1991 he was Vice President and
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<PAGE> 6
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 1998.
Nelda S. Nardone
Nelda S. Nardone, 57, has been a director of the Company since 1977. She
was the Company's Corporate Secretary from 1976 until 1985. Her present term of
office expires in 1997.
Thurman F. Naylor
Thurman F. Naylor, 76, 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, 53, 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 1998.
Dennis G. Punches
Dennis G. Punches, 60, 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 1998.
Nelda S. Nardone is the widow of Maurice W. Fox, a co-founder of the
Company who died in 1978. 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 the nominee(s). As no such notices were received, no
nominations from shareholders will be accepted at the Annual Meeting.
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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 1996 the Board of Directors met seven times with one of the seven
meetings conducted via teleconference. 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 eight times during the
year in lieu of meetings. The Audit Committee met three times with two of the
three meetings conducted via teleconferences; the Compensation Committee acted
once by unanimous written consent; and the Stock Option Committee met once and
acted six 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 is no standing nominating committee of the Board of Directors or
committee 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 $16,000 per year, a meeting fee of $1,600 for
each Board or committee meeting they attend in person and a teleconference
meeting fee, which is 50% of the meeting fee, for each Board or committee
meeting in which they participate. In addition to the directors' retainer and
meeting fees, Mr. J.B. Fox, Chairman of the Board, receives an annual retainer
of $55,000. 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. Officers may elect to defer up to 25% of their total compensation from
the Company. A deferred income account is established in the name of each
participant with a Committee, comprised of at least three individuals, who
invest the plan assets. The Committee may solicit information from the
participants to determine the investments for which investment returns will be
allocated to their deferred income accounts. However, no such indication of
preference is binding upon the Committee. 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 when a director retires or an officer
reaches age 55, upon either a director's or officer'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, 1996 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 (1) BENEFICIAL OWNERSHIP (2) CLASS
- -------------------------------------------------------------- ------------------------ ----------
<S> <C> <C>
A&T Employee Stock Ownership Trust 418,168(3) 17.1%
Fleet Financial Group, Inc. 133,000 5.5
Dimensional Fund Advisors, Inc. 129,100(4) 5.3
Nelda S. Nardone 109,725(5) 4.5
Gary P. Bennett 99,184(6) 4.0
David M. Nolf 80,430(7) 3.3
James B. Fox 36,298(8) 1.5
Jay W. Ryerson 34,752(9) 1.4
Larry M. Fox 33,004(10) 1.3
Thomas J. Will, Sr. 1,353 *
V. Lehman Woods 20,787(11) *
Richard P. Mitchell 18,764(12) *
Gerald Snyder 16,190(13) *
Joseph M. Marino 13,442(14) *
Dennis G. Punches 6,000(15) *
Thurman F. Naylor 1,000 *
Executive Officers and Directors as a Group 470,929(16) 18.0
</TABLE>
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(*) Indicates less than 1.0%
(1) The address for Fleet Financial Group, Inc. is 100 Federal Street,
Boston, MA 02109. 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 48,178 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.
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(4) Dimensional Fund Advisors, Inc. ("Dimensional"), a registered
investment advisor, is deemed to have beneficial ownership of 129,100 shares of
Analysis & Technology, Inc. stock as of December 31, 1995, all of which shares
are held in portfolios of DFA Investment Dimensions Group, Inc., a registered
open-end investment company, or in series of the DFA Investment Trust Company, a
Delaware business trust, or the DFA Group Trust and DFA Participation Group
Trust, investment vehicles for qualified employee benefit plans, all of which
Dimensional Fund Advisors, Inc. 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 said to have shared voting and investment powers.
(6) Includes 3,200 shares held by Mr. Bennett's wife for which Mr. Bennett
may be said to have shared voting and investment powers, 3,774 shares held in
the Analysis & Technology, Inc. 401(k) Plan and 59,367 shares subject to options
which are exercisable within 60 days of June 1, 1996.
(7) Includes 4,000 shares held by Mr. Nolf's wife and 17,600 shares held
jointly by Mr. and Mrs. Nolf, for all of which Mr. Nolf may be said to have
shared voting and investment powers; and includes 28,083 shares subject to
options which are exercisable within 60 days of June 1, 1996.
(8) Includes 4,298 shares held by Mr. Fox's wife and 1,000 shares held
jointly by Mr. and Mrs. Fox, for all of which Mr. Fox may be said to have shared
voting and investment powers.
(9) Includes 200 shares held by Mr. Ryerson's wife for which Mr. Ryerson
may be said to have shared voting and investment powers and 27,317 shares
subject to options which are exercisable within 60 days of June 1, 1996.
(10) Includes 2,823 shares held by Mr. Fox's wife, 7,477 shares held by Mr.
Fox for a minor child; 5,400 shares held by Mr. Fox for a second minor child;
and 400 shares held jointly by Mr. and Mrs. Fox, for all of which Mr. Fox may be
said to have shared voting and investment powers, and 5,000 shares subject to
options which are exercisable within 60 days of June 1, 1996.
(11) Includes 240 shares held by Mr. Wood's wife and 12,508 shares subject
to options which are exercisable within 60 days of June 1, 1996.
(12) Includes 2,753 shares held in the Analysis & Technology, Inc. 401(k)
Plan and 14,750 shares subject to options which are exercisable within 60 days
of June 1, 1996.
(13) Includes 14,033 shares subject to options which are exercisable within
60 days of June 1, 1996.
(14) Includes 50 shares held jointly by Mr. and Mrs. Marino for which Mr.
Marino may be said to have shared voting and investment powers, 388 shares held
in the Analysis & Technology, Inc. 401(k) Plan and 10,616 shares subject to
options which are exercisable within 60 days of June 1, 1996.
(15) Includes 5,000 shares subject to options which are exercisable within
60 days of June 1, 1996.
(16) Represents the aggregate of the shares listed in notes (5)-(15) above
which includes 176,674 shares subject to options which are exercisable within 60
days of June 1, 1996.
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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, 1996.
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, 1996. 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 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.
Although the Compensation Committee did not retain an independent
compensation consultant in fiscal 1996, the Committee intends to periodically
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, 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 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 1996 were to achieve growth in earnings per share and revenue. Key
non-financial performance goals included increasing contract backlog in defense
markets, and continuing to implement a diversification strategy into commercial
and civil government markets. For fiscal 1996, 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 by 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. Stock
options are granted under these plans at fair market value at the time of the
option grant. Incentive stock options have a term of seven years and
non-qualified stock options have a term of ten 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 1996, 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 $230,584 for fiscal year 1996. In
determining a salary adjustment for Mr. Bennett, the committee sought to move to
a salary level that was comparable with the median levels of the survey and peer
groups. After giving effect to Mr. Bennett's salary increase, his salary level
was 23% below the median of the survey group and at the median of the peer
group.
Annual incentive compensation for Mr. Bennett was $30,000, a 25% decrease
from fiscal year 1995. Mr. Bennett's key financial objectives were earnings per
share and revenue growth. Mr. Bennett's non-financial objectives were business
diversification and increasing backlog in defense markets. In determining the
award the committee noted that earnings per share decreased 26% during fiscal
year 1996 as compared with fiscal year 1995, principally as a result of the sale
of the General Systems Solutions (GSS) subsidiary. However, the committee also
noted that when the adverse effect of the loss on the sale of GSS and the
positive effect of R&D tax credits were excluded, Mr. Bennett achieved 98% of
his earnings per share objective. In addition, Mr. Bennett achieved 93% of his
revenue objective. When considering non-financial objectives, the committee
noted that Mr. Bennett had made progress on business diversification and the
contract backlog in defense markets had increased 14%.
A stock option to acquire 6,000 shares was granted to Mr. Bennett during
fiscal year 1996. This award was consistent with the total compensation
strategy, approved by the Compensation 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 1996. 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 1996. 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 1996 adequately reflects their policies, which are to
align executive compensation with the Company's overall business strategy, 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, 1996, 1995 and 1994, 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 1996 $ 230,584 $ 30,000 6,000 $ 8,316
President and Chief Executive 1995 210,372 40,000 5,000 10,133
Officer 1994 192,981 37,000 0 8,996
D.M. Nolf 1996 $ 207,704 $ 27,500 5,000 $ 8,130
Executive Vice President, Chief 1995 191,492 35,000 4,000 10,371
Financial and Administrative 1994 178,295 34,000 0 8,494
Officer
J.W. Ryerson 1996 $ 186,854 $ 27,500 5,000 $ 6,661
Executive Vice President, 1995 170,833 40,000 4,000 7,734
Chief Operating Officer 1994 156,439 30,000 0 6,573
T.J. Will, Sr. (5) 1996 $ 105,087 $ 0 0 $ 48,697(6)
Executive Vice President, 1995 166,563 33,000 3,000 12,765(6)
Corporate Development 1994 163,695 12,000 0 17,330(6)
Manager
G. Snyder 1996 $ 131,006 $ 21,500 4,500 $ 4,260
Senior Vice President, 1995 121,392 19,500 3,500 4,717
Planning, Corporate 1994 114,627 22,500 2,000 4,012
Manager, Finance & Budgets
J.M. Marino 1996 $ 129,827 $ 25,000 7,650 $ 4,865
Senior Vice President, 1995 124,146 23,500 4,500 5,003
Business Unit Manager 1994 111,762 17,500 2,000 4,740
</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 and Employee Stock Ownership Plan on behalf of each named officer.
(5) Mr. Will left the Company on July 5, 1995.
(6) Includes cash payment in lieu of vacation.
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, 1996 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
4/1/95 TO 3/31/96
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE VALUE
------------------------------------------------------- AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS/SARS 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 6,000 4.1 $14.125 2/16/03 $0 $34,502 $ 80,404
D.M. Nolf 5,000 3.4 $14.125 2/16/03 $0 $28,751 $ 67,003
J.W. Ryerson 5,000 3.4 $14.125 2/16/03 $0 $28,751 $ 67,003
T.J. Will, Sr.
(6) 0 0 $14.125 2/16/03 $0 $ 0 $ 0
G. Snyder 4,500 3.1 $14.125 2/16/03 $0 $25,876 $ 60,303
J. M. Marino 7,650 5.2 $14.125 2/16/03 $0 $43,990 $102,515
</TABLE>
- ---------------
(1) 146,410 stock options were granted to all employees of the Company as a
group during the fiscal year ended March 31, 1996.
(2) The exercise price is 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 optionee 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) T.J. Will, Sr. left the Company on July 5, 1995.
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, 1996 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
4/1/95 TO 3/31/96
ENDING FAIR MARKET VALUE: $12.69
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED ON OPTIONS/SARS AT FY-END (#) OPTIONS/SARS AT FY-END(1)
EXERCISE VALUE -------------------------- --------------------------
NAME (#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
G.P. Bennett 0 $ 0 59,367 10,200 $81,958 $ 5,256
D.M. Nolf 0 $ 0 28,083 8,800 $65,602 $ 5,256
J.W. Ryerson 0 $ 0 27,317 8,400 $60,123 $ 4,380
T.J. Will,
Sr. 35,200 $132,905 0 0 $ 0 $ 0
G. Snyder 0 $ 0 14,033 8,100 $25,159 $ 3,504
J.M. Marino 0 $ 0 10,616 10,620 $15,456 $ 2,190
</TABLE>
- ---------------
(1) Values stated are based on the closing price of $12.69 per share of the
Company's Common Stock on the NASDAQ on March 31, 1996, 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-
91 92 93 94 95 96
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
ANALYSIS & TECHNOLOGY.................... $ 100 $ 83.96 $ 87.85 $126.67 $105.86 $109.71
PEER GROUP INDEX......................... $ 100 $ 98.94 $ 83.92 $ 75.11 $ 64.35 $ 78.95
NASDAQ MARKET INDEX...................... $ 100 $127.46 $146.55 $158.12 $175.94 $238.83
</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 peer group
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 peer
group index comprised of the SIC Code 8711 companies.
The graph assumes $100 was invested on March 31, 1991 in the stock of
companies in the NASDAQ Index, a published industry peer group 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, 1997, 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, 1997 be, and it hereby is, ratified, confirmed and
approved.
ITEM 3. 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 1996 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. Larry M. Fox, a director, and Mr. Dennis G. Punches, a director, each
made one late Form 5 filing on or about June 27, 1996 which related to a single
transaction in which each was granted an option to purchase shares of the
Company's common stock pursuant to the 1995 Stock Option Plan.
1997 SHAREHOLDER PROPOSALS
In order for shareholder proposals to be eligible for inclusion in the
Company's proxy statement for the 1997 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 7, 1997.
Page 15
<PAGE> 19
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 AND 2.
Please mark
your votes as /X/
in this example.
1. Election of Directors (terms to expire in 1999) Gary P. Bennett, James B. Fox
FOR all nominees WITHHOLD
listed above (except AUTHORITY
as marked to the to vote for all nomi-
contrary). nees listed above.
/ / / /
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.)
________________________________________________________________________________
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, 1997.
FOR AGAINST ABSTAIN
/ / / / / /
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
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: _________________________________________________________________, 1996
________________________________________________________________________________
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 -
<PAGE> 20
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 David M. Nolf 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 7, 1996, at the Annual Meeting of
Shareholders to be held on August 13, 1996 or any adjournment thereof.
(Continued on reverse side)
FOLD AND DETACH HERE
