<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<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>
COMPTEK RESEARCH INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
COMPTEK RESEARCH 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), 14a-6(i)(1), 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.
/ / 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.:__________________________
(3) Filing Party:__________________________________________________________
(4) Date Filed:____________________________________________________________
================================================================================
<PAGE> 2
[COMPTEK RESEARCH INC. LOGO]
June 26, 1995
Dear Fellow Shareowner:
The Annual Meeting of Comptek Research, Inc., to be held July 28, 1995, at
Comptek Research, Inc., 2732 Transit Road, Buffalo, New York, will present an
opportunity for you to meet Comptek's management team and to become more
acquainted with the business activities of your company. Your attendance will,
as well, give us an opportunity to meet with you, and to hear your views and
concerns. We hope that you will be able to attend.
The Annual Meeting itself will begin promptly at 10:30 a.m. So that we can
make appropriate arrangements, please let us know that you are coming by
checking the appropriate box at the top of your proxy vote card, or calling
716-677-4070, Ext. 517.
I look forward to seeing you.
Sincerely,
/s/ John R. Cummings
John R. Cummings
Chairman, President, and
Chief Executive Officer
<PAGE> 3
[COMPTEK RESEARCH INC. LOGO]
NOTICE
OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 28, 1995
To the Shareholders:
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of Comptek
Research, Inc. (the "Company") will be held at the offices of the Company, 2732
Transit Road, Buffalo, New York, on Friday, July 28, 1995, at 10:30 a.m., local
time, for the following purposes:
1. To elect three Class I directors for a term of two years and until their
successors shall have been elected and qualified.
2. To approve amendments to the 1992 Equity Incentive Plan.
3. To ratify the selection by the Board of Directors of KPMG Peat Marwick
as the Company's independent auditors for the current fiscal year.
4. To transact such other business as may properly come before the meeting.
The close of business on June 9, 1995, has been fixed as the record date
for determining the shareholders entitled to notice of, and to vote at, the
Annual Meeting.
By order of the Board of Directors,
CHRISTOPHER A. HEAD, Secretary
June 26, 1995
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE,
DATE, AND SIGN THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED
ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES.
<PAGE> 4
[COMPTEK RESEARCH INC. LOGO]
2732 TRANSIT ROAD
BUFFALO, NEW YORK 14224
(716) 677-4070
---------------
PROXY STATEMENT
---------------
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
JULY 28, 1995
---------------
GENERAL
This Proxy Statement and accompanying form of proxy have been mailed on or
about June 26, 1995, to the shareholders of record on June 9, 1995, of COMPTEK
RESEARCH, INC., a New York corporation (the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company for use at the
Annual Meeting of Shareholders to be held on Friday, July 28, 1995 (the "Annual
Meeting"), and at any adjournment or adjournments thereof.
Shares represented by an effective proxy in the accompanying form, unless
contrary instructions are specified in the proxy, will be voted FOR each of the
proposals set forth in the accompanying Notice of Annual Meeting of
Shareholders. Any proxy may be revoked at any time before it is voted. A
shareholder may revoke his proxy by executing another proxy at a later date, by
notifying the Secretary of the Company in writing of his revocation, or by
attending and voting at the Annual Meeting. Revocation is effective only upon
receipt of notice by the Secretary.
The Company will bear the cost of soliciting proxies by the Board of
Directors. The Board of Directors may use the services of the Company's
executive officers and certain directors to solicit proxies from shareholders in
person and by mail, telegram and telephone, and the Company may reimburse them
for reasonable out-of-pocket expenses incurred by them in so doing. In addition,
the Company will request brokers, nominees and others to forward proxy materials
to their principals and to obtain authority to execute proxies. The Company will
reimburse such brokers, nominees and others for their reasonable out-of-pocket
and clerical expenses incurred by them in so doing.
The securities entitled to vote at the Annual Meeting are shares of common
stock, par value $.02 per share, of the Company. Each share is entitled to one
vote. The close of business on June 9, 1995, has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
Annual Meeting and any adjournment or adjournments thereof. At that date,
4,413,364 shares of common stock were outstanding.
3
<PAGE> 5
With respect to the election of each of the Class I directors, a
shareholder may either vote for a nominee named herein, or withhold authority to
vote for such nominee. The affirmative vote of a plurality of the shares present
in person or represented by proxy at the Annual Meeting and entitled to vote is
required for the election of a nominee. Broker non-votes will be counted as
being present or represented at the meeting, but will not have an effect on the
outcome of the vote for the election of directors. Accordingly, withholding an
affirmative vote from a particular nominee will not prevent that person from
being elected to the Board of Directors.
With respect to the amendment of the 1992 Equity Incentive Plan (the
"Equity Incentive Plan"), a shareholder may withhold authority to vote in favor
of the Equity Incentive Plan (not voting) or a shareholder may vote "for," vote
"against," or "abstain" from voting. The affirmative vote "for" of a majority of
the shares outstanding and entitled to vote at the Annual Meeting, either in
person or represented by proxy, is necessary to amend the Equity Incentive Plan.
The withholding of authority to vote in favor of the Plan (not voting), a broker
non-vote, and a vote to "abstain" are the equivalent of a vote "against"
amendment of the Equity Incentive Plan.
PRINCIPAL SHAREHOLDERS
CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information as of June 9, 1995, with
respect to the beneficial ownership of the Company's common stock by all persons
or groups (as such terms are used in Section 13(d)(3) of the Securities Exchange
Act of 1934) known by the Company to be the beneficial owners of more than 5% of
its outstanding common stock (the only class of stock outstanding).
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP(1) PERCENT
------------------------------------ ------------ -------
<S> <C> <C>
James D. Morgan.......................................... 326,266(2) 7.4
140 Mid County Drive
Orchard Park, NY 14127
Henry P. Semmelhack...................................... 256,572(3) 5.8
465 Main Street
Buffalo, NY 14203
John R. Cummings......................................... 308,000(4) 6.8
2732 Transit Road
Buffalo, NY 14224
<FN>
- ---------------
(1) The beneficial ownership information presented is based upon information
furnished by each person or contained in filings with the Securities and
Exchange Commission. Pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934, as amended, beneficial ownership of a security consists of sole
or shared voting power (including the power to vote or direct the vote)
and/or sole or shared investment power (including the power to dispose or to
direct the disposition) with respect to a security whether through any
contract, arrangement, understanding, relationship or otherwise. Except as
otherwise indicated, the named person has sole voting and investment power
with respect to the common shares set forth opposite his name. Percentages
have been calculated on the basis of 4,413,364 shares outstanding, plus, as
appropriate, shares subject to options and deemed outstanding pursuant to
Rule 13d-3(d)(1).
(2) Includes 1,500 shares held in the names of Mr. Morgan's children. Mr. Morgan
disclaims any beneficial ownership of such shares.
(3) Amount indicated includes options to purchase 11,000 shares which are
exercisable within 60 days of June 9, 1995. Also includes 122,786 shares
owned by Mr. Semmelhack's wife, Tricia T. Semmelhack, as well as 7,686
shares held in trust by Tricia T. Semmelhack for the benefit of their
daughter Elizabeth, and 11,300 shares held in a trust for the benefit of
their son, Erik Henry Semmelhack. Mr. Semmelhack disclaims any beneficial
ownership of such shares held by Mrs. Semmelhack individually or as trustee.
</TABLE>
4
<PAGE> 6
(4) Amount indicated includes options to purchase 90,000 shares which are
exercisable within 60 days of June 9, 1995, and 40,000 shares held by Dr.
Cummings' wife, Barbara Cummings.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of common shares of
the Company as of June 9, 1995, by each director and nominee, each executive
officer who is named in the Summary Compensation Table, and by all directors and
executive officers as a group:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL
NAME OF BENEFICIAL OWNER OWNERSHIP(1) PERCENT
------------------------ -------------- -------
<S> <C> <C>
Joseph A. Alutto....................................... 15,900(2) *
Theodore K. Bosworth................................... 10,200 *
John R. Cummings....................................... 308,000(3) 6.8
G. Wayne Hawk.......................................... 208,138(4) 4.7
Christopher A. Head.................................... 55,179(5) 1.2
Patrick J. Martin...................................... 11,000(2) *
James D. Morgan........................................ 326,266(6) 7.4
Frank J. Perpiglia..................................... None -
Victor A. Rice......................................... 11,000(2) *
John J. Sciuto......................................... 31,426(7) *
Henry P. Semmelhack.................................... 256,572(8) 5.8
All executive officers and directors as a group (11
persons)............................................. 1,233,681(9) 26.6
<FN>
- ---------------
* less than %
(1) The beneficial ownership information presented is based upon information
furnished by each person or contained in filings with the Securities and
Exchange Commission. Pursuant to Rule 13d-3 under the Securities Exchange
Act of 1934, as amended, beneficial ownership of a security consists of sole
or shared voting power (including the power to vote or direct the vote)
and/or sole or shared investment power (including the power to dispose or to
direct the disposition) with respect to a security whether through any
contract, arrangement, understanding, relationship or otherwise. Except as
otherwise indicated, the named person has sole voting and investment power
with respect to the common shares set forth opposite his name. Percentages
have been calculated on the basis of 4,413,364 shares outstanding, plus, as
appropriate, shares subject to options and deemed outstanding pursuant to
Rule 13d-3(d)(1).
(2) Amount indicated includes options to purchase 11,000 shares which are
exercisable within 60 days of June 9, 1995.
(3) Includes options to purchase 90,000 shares which are exercisable within 60
days of June 9, 1995, and 40,000 shares held by Dr. Cummings' wife, Barbara
Cummings.
(4) Amount indicated includes options to purchase 11,000 shares which are
exercisable within 60 days of June 9, 1995. Also includes 500 shares owned
by Mr. Hawk's wife, Charline Hawk. Mr. Hawk disclaims any beneficial
ownership of the shares held by his wife.
(5) Amount indicated includes options to purchase 46,030 shares which are
exercisable within 60 days of June 9, 1995.
(6) Includes 2,500 shares held in the names of Mr. Morgan's children. Mr. Morgan
disclaims any beneficial ownership of such shares.
(7) Amount indicated includes options to purchase 30,667 shares which are
exercisable within 60 days of June 9, 1995.
(8) Amount indicated includes options to purchase 11,000 shares which are
exercisable within 60 days of June 9, 1995. Also includes 122,786 shares
owned by Mr. Semmelhack's wife, Tricia T. Semmelhack, as well as 7,686
shares held in trust by Tricia T. Semmelhack for the benefit of their
daughter Elizabeth, and 11,300 shares held in a trust by Tricia T.
Semmelhack for the benefit of their son, Erik Henry
</TABLE>
5
<PAGE> 7
Semmelhack. Mr. Semmelhack disclaims any beneficial ownership of such shares
held by Mrs. Semmelhack individually or as trustee.
(9) Amount includes options to purchase 221,697 shares.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
TERM OF OFFICE
The Company's current Board is divided into two classes serving staggered
two-year terms. Three directorships are designated Class I and four
directorships are designated Class II. Nominees for Class I directors are for a
two-year term expiring at the 1997 Annual Meeting. The current Class II
directors were elected at the 1994 Annual Meeting and continue in office until
the 1996 Annual Meeting.
NOMINEES FOR DIRECTOR
Each nominee has consented to be named as a nominee and to serve if
elected. No circumstances are presently known which would render any of the
nominees named herein unavailable for election. In the event, however, that a
nominee becomes unavailable for election, it is expected that the proxies will
be voted for a substitute nominee recommended by the Board of Directors and the
Nominating Committee thereof, unless the Board reduces the number of directors
to be elected.
The nominees (Messrs. Morgan, Rice, and Semmelhack) are currently serving
as directors of the Company. Each of the nominees was previously elected by the
shareholders.
The principal occupation for the last five years of each nominee for
election as Class I director and each of the continuing directors is listed
below. Unless otherwise indicated, the information with respect to the nominees
and continuing directors is as of June 1, 1995. None of the nominees nor any
continuing director is related to an executive officer or to any other director.
<TABLE>
NOMINEES FOR ELECTION AS CLASS I DIRECTORS
TERM EXPIRING IN 1997
<S> <C>
James D. Morgan Mr. Morgan is Vice President and Chief Scientist and also a
Age 58 founder of the Company. He was a Vice President for Barrister
Director since 1968 Information Systems Corporation from April 1982 to April 1990
and is currently serving on Barrister's Board of Directors.
Victor A. Rice Mr. Rice has been Chairman of the Board of Directors and Chief
Age 54 Executive Officer of Varity Corporation since May 1980. Mr.
Director since 1993 Rice was appointed a director of Comptek in March 1993. Mr.
Rice also serves as a director of Louisiana Land & Exploration
Company, American Precision Industries, Inc., and International
Murex Technologies Corp.
Henry P. Semmelhack Mr. Semmelhack has been President, Chief Executive Officer and
Age 58 Chairman of the Board of Barrister Information Systems
Director since 1968 Corporation since 1982. A founder of the Company, he served as
its Chief Executive Officer until May 1983. Mr. Semmelhack is a
director of Merchants Group, Inc. (insurance company).
</TABLE>
6
<PAGE> 8
<TABLE>
CONTINUING CLASS II DIRECTORS
CONTINUING IN OFFICE UNTIL 1996
<S> <C>
Joseph A. Alutto Dr. Alutto was appointed Dean of the Max M. Fischer College of
Age 53 Business at Ohio State University in March 1991. Dr. Alutto
Director since 1987 served as Dean of the School of Management at the State
University of New York at Buffalo from 1977 to 1990. He was a
director of Rand Capital Corporation, a publicly traded venture
capital firm, from April 1986 to April 1991. He also serves on
the Board of Directors of United Retail Group, Inc.
John R. Cummings Dr. Cummings was named Chairman of the Board in September 1990
Age 62 and was named President and CEO in October 1991. He previously
Director since 1968 was a Vice President and Chief Scientist of the Company since
its formation, and is a founder of the Company.
G. Wayne Hawk Mr. Hawk was Chairman and Chief Executive Officer of Acme
Age 67 Electric Corporation from August 1992 until his retirement in
Director since 1977 October 1993. He was President and Chief Executive Officer from
August 1991 to August 1992. Prior thereto, he served as
President and Chief Operating Officer since April 1991, and
President and Chief Executive Officer from January 1987 to
April 1991. Mr. Hawk continues to serve as a director of Acme
Electric Corporation.
Patrick J. Martin In October 1993, Dr. Martin was designated President of the
Age 54 Office Products Division of Xerox Corporation. From 1991 to
Director since 1993 1993, Dr. Martin was President and General Manager of Xerox
Corporation's Americas Customer Operations. In 1992, Dr. Martin
was elected to the additional post of Corporate Vice President.
His career with Xerox began in 1977 and has included several
different staff and operating management positions.
</TABLE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of five meetings during
the fiscal year ended March 31, 1995. During fiscal year 1995, the Company had
five committees: the Finance and Audit Committee, the Compensation Committee,
the Nominating Committee, the Long-Range Planning Committee, and the Acquisition
Committee.
The Finance and Audit Committee currently consists of directors Hawk, Rice,
and Semmelhack. The Finance and Audit Committee met twice during the fiscal year
ended March 31, 1995. The Finance and Audit Committee's functions include
recommending to the Board of Directors the engagement of the Company's
independent certified public accountants, and reviewing with such accountants
the plan for and results of their auditing engagement.
The Compensation Committee currently consists of directors Alutto, Martin,
and Semmelhack. The Compensation Committee met two times during the fiscal year
ended March 31, 1995. The Compensation Committee approves compensation
arrangements for senior management and directors, and administers the Company's
Equity Incentive Plan.
The Nominating Committee consists of directors Alutto, Rice, and
Semmelhack. This Committee did not meet formally during the fiscal year.
Recommendations of the Nominating Committee are subject to the review and
approval of the Board of Directors. The Nominating Committee will consider
nominees recommended by shareholders of the Company. The names and information
supporting any such nominees should be forwarded to Christopher A. Head, Esq.,
Secretary, Comptek Research, Inc., 2732 Transit Road, Buffalo, NY 14224, who
will submit them to the Nominating Committee for its consideration.
7
<PAGE> 9
The Acquisition Committee consists of directors Hawk, Martin, and Rice and
did not meet during the fiscal year. The Acquisition Committee's charter is to
review potential acquisitions with management for recommendations to the full
Board.
The Long-Range Planning Committee consists of directors Hawk, Martin, and
Morgan and met five times during the fiscal year. The Long-Range Planning
Committee functions include evaluating product and business development
opportunities.
During the fiscal year ended March 31, 1995, no incumbent director attended
fewer than 75% of the aggregate of all meetings of the Board of Directors and
the committees, if any, on which the director served which were held during such
person's tenure as a director.
COMPENSATION AND RELATED MATTERS
COMPENSATION OF DIRECTORS
Employee directors receive no additional compensation for service on the
Board of Directors or its Committees. For fiscal year 1995, directors who are
not employees received an annual fee of $10,000, payable in quarterly
installments of $2,500. In addition, each non-employee director receives a fee
of: (i) $1,000 per Board of Directors meeting attended up to an annual maximum
of $6,000; and (ii) $1,000 per committee meeting attended (on other than a Board
meeting date) up to an annual maximum of $4,000. Directors may irrevocably defer
all or part of their compensation to selected later years, to be paid with
interest, at a rate equal to that of M & T Bank's one-year certificate of
deposit rate, as updated each April.
Each non-employee director is automatically granted a non-statutory option
to purchase 10,000 shares of the Company's common stock at 100% of fair market
value as of the date of the director's election or appointment to the Board of
Directors. In addition, each non-employee director, effective five business days
after each Annual Meeting, is automatically granted a non-statutory option to
purchase 1,000 shares of the Company's common stock at 100% of fair market value
as of the date of grant.
EXECUTIVE COMPENSATION
The following table contains information concerning the compensation
received by the Company's Chief Executive Officer and the four other most highly
compensated executive officers of the Company in the three fiscal years ended
March 31, 1995. In addition, the table contains information concerning the
compensation of one individual who previously was an executive officer, but was
not serving in such capacity as of the most recent fiscal year-end.
8
<PAGE> 10
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
<S> <C> <C> <C> <C> <C> <C>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-----------------------------------------------------------------------------------------------------------------
OTHER
ANNUAL AWARDS/
COMPEN- STOCK ALL OTHER
FISCAL SALARY BONUS SATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) (#) ($)(1)
--------------------------- ----- ------- ------- ------ ------------ ------------
JOHN R. CUMMINGS 1995 186,234 0 -- 0 3,226
Chairman, President and CEO 1994 174,461 0 -- 0 4,291
1993 180,003 0 46,000(2) 0 3,771
JOHN J. SCIUTO 1995 156,304 53,030(3) -- 0 2,165
President and CEO -- 1994 131,997 13,490(3) -- 10,000 3,099
Comptek Federal Systems, Inc. 1993 131,512 0 -- 0 3,381
FRANK J. PERPIGLIA(4) 1995 140,206 65,000 77,531(5) 0 3,022
President and CEO -- 1994 6,231 N/A N/A 40,000 62
Comptek Telecommunications, Inc. 1993 N/A N/A N/A N/A N/A
CHRISTOPHER A. HEAD 1995 121,050 47,000(3) 900(6) 0 2,792
Executive Vice President, 1994 113,403 5,858 217(6) 10,340 3,039
General Counsel, and Secretary 1993 116,291 0 -- 0 3,903
THEODORE K. BOSWORTH(7) 1995 117,800 0 -- 0 1,218
Vice President and Chief Engineer -- 1994 110,352 0 -- 10,000 3,267
Comptek Telecommunications, Inc. 1993 115,830 0 -- 0 3,432
JAMES D. MORGAN 1995 106,782 0 -- 0 2,349
Vice President and Chief Scientist 1994 100,035 0 -- 0
-- 2,432
Comptek Research, Inc. 1993 102,830 0 -- 0 2,799
-----------------------------------------------------------------------------------------------------------------
<FN>
- ---------------
(1) Amounts contributed by the Company under the Retirement Savings Plan as
matching and annual contributions based upon the individual's level of
participation in the Plan as described below under "Retirement Savings
Plan."
(2) Represents tax gross-up payment in connection with moving expenses.
(3) Twenty-five percent of such annual bonus, less applicable taxes, is paid by
the Company in stock of the Company at fair market value in lieu of cash.
(4) Mr. Perpiglia was hired by the Company's subsidiary, Comptek
Telecommunications, Inc., as its President and CEO effective February 24,
1994. The fiscal 1994 salary relates to the period from the start of
employment to March 31, 1994.
(5) Represents relocation expenses including temporary living expenses, moving
expenses, and associated tax gross-up payments.
(6) In connection with the exercise of an incentive stock option to acquire
2,500 shares of common stock, the Company provided Christopher A. Head an
interest-free loan to reimburse him for alternative minimum tax incurred in
the transaction in exchange for his agreement not to sell the shares
acquired prior to May 7, 1995. The loan was provided pursuant to the terms
of the Company's 1992 Equity Incentive Plan. The listed amount represents
the amount of interest which would have been paid had the loan carried a
market interest rate.
(7) Mr. Bosworth only served as an executive officer until July 28, 1994, but
continued as an officer and employee of the Company's subsidiary through the
end of the fiscal year. He subsequently left the Company's employ effective
May 1, 1995.
</TABLE>
INCENTIVE COMPENSATION PLAN
Company officers and certain other key personnel participate in an
incentive compensation arrangement based on predetermined goals, including
revenue, profit, and contract award levels established at the beginning of each
fiscal year.
9
<PAGE> 11
The base amount of an individual's incentive compensation potential is
established annually. Officers' incentive compensation levels are established by
the Compensation Committee of the Board of Directors and are approved by the
Board of Directors. Directors, as such, are not eligible to participate in the
Plan. Amounts paid to the named Executive Officers are set forth in the Summary
Compensation Table.
STOCK OPTIONS/STOCK APPRECIATION RIGHTS (SAR) GRANTS IN FISCAL YEAR 1995
No Stock Options/SARs were granted to any of the Named Executive Officers
in fiscal year 1995.
STOCK OPTIONS/SARS EXERCISED IN FISCAL 1995 AND YEAR-END VALUES
The following table reflects the number of stock options and SARs exercised
by the named Executive Officers in 1995, the total gain realized upon exercise,
the number of stock options held at the end of the year, and the realizable gain
of the stock options that are "in-the-money." In-the-money stock options and
SARs are stock options or SARs with exercise prices that are below the year-end
stock price because the stock value grew since the date of the grant.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
# OF SECURITIES
UNDERLYING
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS
FISCAL AT FISCAL YEAR
YEAR-END END(2)
SHARES -------------------- --------------------
ACQUIRED ON VALUE EXERCIS- UNEXER- EXERCIS- UNEXER-
EXERCISE REALIZED(1) ABLE CISABLE ABLE CISABLE
NAME (#) ($) (#) (#) (#) (#)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
John R. Cummings 0 0 70,000 40,000 566,250 310,000
- ------------------------------------------------------------------------------------------------------------
John J. Sciuto 8,500 89,625 27,333 6,667 (3) 218,751 N/A
- ------------------------------------------------------------------------------------------------------------
Christopher A. Head 11,250 133,594 42,696 6,894 (3) 375,007 N/A
- ------------------------------------------------------------------------------------------------------------
Theodore K. Bosworth 28,000 308,000 3,333(3) 6,667 (3) N/A N/A
- ------------------------------------------------------------------------------------------------------------
Frank J. Perpiglia 0 0 40,000 0 N/A N/A
- ------------------------------------------------------------------------------------------------------------
James D. Morgan 0 0 0 0 N/A N/A
<FN>
- ---------------
(1) Based upon the difference between the closing price of the Common Stock on
the American Stock Exchange on the date or dates of exercise and the
exercise price or prices for the stock options.
(2) Based upon the closing price of the Common Stock on the American Stock
Exchange on March 31, 1995, of $13.50 per share.
(3) Exercise price is above year-end stock price.
</TABLE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
ROLE OF THE COMPENSATION COMMITTEE
Each year the Compensation Committee, which is comprised entirely of
outside directors, evaluates and establishes the compensation arrangements for
executive officers, including a review and approval of annual salaries, annual
and long-term incentive plan awards, standards of performance for new awards,
payouts from past awards, and program participation and design. The Compensation
Committee also administers the Company's Equity Incentive Plan for all
participants. In evaluating compensation for executive officers, the Committee
has from time to time retained the services of independent compensation experts,
reviewed industry available data and surveys, and received recommendations from
management and the Company's Human Resources Department regarding overall
compensation plans and structures.
10
<PAGE> 12
EXECUTIVE COMPENSATION PHILOSOPHY
The fundamental objective of the Company's Executive Compensation Program
is two-fold: namely, to attract and retain highly competent and motivated
individuals by providing a compensation package which is industry competitive
and to emphasize a reward system which is based upon the individual's
contribution to the overall success and performance of the Company. In fiscal
1992, the Committee adopted the following guiding principles which continue in
effect: (1) Incentives should represent a strong portion of the Company's
Executive Compensation Program; (2) Salary should be reasonable in reference to
position responsibilities and industry norms; (3) Fixed costs should be
controlled while encouraging performance-based variable costs which link to the
financial results of the Company; and (4) The Executive Officers should have
significant equity ownership opportunities. It is the Committee's belief that
this approach will allow for a linking of compensation with shareholder value
and serve to attract and retain qualified individuals capable of producing
superior results. Within this context, the Company's Executive Compensation
Program for fiscal year 1995 consisted of three components: base compensation,
annual incentive compensation, and stock options.
Base Compensation. The Committee's approach to base compensation is to
offer competitive salaries in comparison with market averages. The Committee
makes base compensation decisions in an annual review with input from the CEO,
market pay statistics, and nationwide trends of executives in similar positions
in companies with similar sales volumes. This information is used as a frame of
reference for annual salary adjustments and starting salaries. The Committee
considers both the Company's performance (e.g., stock price, return on assets
and sales growth v. budget) as well as individual decision-making
responsibilities and work performance of each position incumbent.
Annual Incentive Compensation Plan. The Company uses the Annual Incentive
Compensation Plan to serve as an incentive for executive officers to accomplish
annual Company performance objectives. The performance objectives for the Plan
are established at the beginning of the fiscal year subject to modification in
the event of a significant operating change.
For operating unit executives, Plan performance objectives include both
overall corporate operating earnings and performance of the specific business
unit of the Company under a participant's direct control. This approach supports
the accomplishments of overall objectives and rewards individual contributions
by our executive officers. Position annual incentive compensation targets tied
to Plan performance objectives are based upon historic patterns of Company
performance and strategic business objectives and are believed to be consistent
with market practice for positions with comparable decision-making
responsibilities. All annual performance targets are set above normal
expectations of performance. A threshold performance level for each measure
ensures that bonuses are not paid for substandard accomplishments. Each measure
also has a cap to limit the potential compensation expense of this annual Plan.
Long-Term Incentive Compensation. The Company uses stock options under the
Equity Incentive Plan adopted in 1992 to serve as an incentive to executive
officers based on the Company's stock market value. The grant of stock options
under the Plan is subjective, based on perception of the individual's
performance, functional responsibility, and position within the Company. Awards
are typically considered at the time of the individual's annual performance
review or change in responsibilities or position.
FISCAL 1995 CHIEF EXECUTIVE'S PAY
The Compensation Committee reviews the compensation of the CEO within the
context of published survey data issued by The American Electronics Assocation,
Wyatt Associates, and Towers Perrin providing compensation information for a
group of companies similar to the Company in size and business focus. Based upon
that analysis, the Committee determined that Dr. Cummings' base salary is
conservative, in that it falls below the median salary reported in published
survey data.
As part of its deliberations, the Committee also considered a direct
request by Dr. Cummings regarding his compensation arrangement for fiscal year
1995. As a significant shareholder in the Company, Dr. Cummings believes that,
in view of the non-profitability of the Company during fiscal year 1995, he
should not receive any cash-based incentive compensation for the year. He
believes that, as CEO and a significant
11
<PAGE> 13
shareholder, future incentive compensation should be principally determined by
improved total shareholder return. The Compensation Committee agreed to Dr.
Cummings' request. Dr. Cummings received no salary increase or incentive
compensation payment for fiscal year 1995.
COMPANY POSITION ON LIMITATION OF DEDUCTIBILITY OF EXECUTIVE PAY
Effective as of January 1, 1994, Section 162(m) of the Internal Revenue
Code of 1986 (the "Internal Revenue Code") generally denies a deduction to any
publicly-held corporation for compensation paid to its chief executive officer
and its four highest-paid executive officers to the extent that any such
individual's compensation exceeds $1 million, subject to certain exceptions,
including one for "performance-based compensation." Compensation paid to such
executive officers of the Company for fiscal year 1995 is expected to be
tax-deductible since no such amount exceeds the $1 million limit. Under Section
162(m) of the Internal Revenue Code and the proposed regulations and transition
rules issued by the Internal Revenue Service, it is highly unlikely that any one
of the Company's executive officers will receive compensation in the current
fiscal year that is nondeductible under Section 162(m). The Company intends to
study the application of Section 162(m) of the Internal Revenue Code to its
compensation plans and practices, and will consider possible changes thereto
that may be necessary to qualify the compensation paid to its executive officers
for deductibility under Section 162(m) of the Internal Revenue Code. The
amendment of the Company's Equity Incentive Plan as provided for in Proposal No.
2 should result in certain future compensation under the Equity Incentive Plan
qualifying for the "performance-based compensation" exemption.
The Compensation Committee of the
Board of Directors
Joseph A. Alutto
Patrick J. Martin
Henry P. Semmelhack
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the past fiscal year, Messrs. Alutto, Martin, and Semmelhack served
as members of the Compensation Committee.
Henry P. Semmelhack was President and Chief Executive Officer of the
Company from 1968 to 1983. From 1983 to 1992 he served as a consultant to the
Company. Mr. Semmelhack's wife Tricia T. Semmelhack is a partner in the Buffalo,
New York, law firm Hodgson, Russ, Andrews, Woods & Goodyear, which firm has in
the past and is anticipated may in the future provide legal services to the
Company.
James D. Morgan, an executive officer of the Company, is a director and
member of the Compensation Committee of Barrister Information Systems
Corporation ("Barrister") and as such reviews and approves the compensation paid
by Barrister to Henry P. Semmelhack as an executive officer of Barrister.
12
<PAGE> 14
PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return on the
common shares of the Company for the last five fiscal years with the cumulative
total return on the Standard & Poors 500 Index and the American Stock Exchange
High Technology Index over the same period (assuming the investment of $100 in
the Company's common shares, the S&P 500 Index and the Amex High Technology
Index on March 31, 1990, and the reinvestment of all dividends.)
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG COMPTEK RESEARCH, INC., THE S & P 500 INDEX
AND THE AMEX HIGH TECHNOLOGY INDEX
<CAPTION>
MEASUREMENT PERIOD COMPTEK RESCH,
(FISCAL YEAR COVERED) INC. S&P 500 AMEX HIGH TECH
<S> <C> <C> <C>
3/90 100 100 100
3/91 148 114 122
3/92 785 127 146
3/93 687 146 126
3/94 793 149 139
3/95 553 172 146
<FN>
* $100 INVESTED ON 03/31/90 IN STOCK OR INDEX--
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING MARCH 31.
</TABLE>
13
<PAGE> 15
During the last four fiscal years, the Company has placed substantial
emphasis on transitioning to a greater percentage of commercial work compared
with defense electronic work. By way of supplemental information, presented
below are comparable performance graphs relative to the defense industry.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG COMPTEK RESEARCH, INC., THE S & P AEROSPACE/DEFENSE INDEX
AND THE S & P ELECTRONICS (DEFENSE) INDEX
<CAPTION>
MEASUREMENT PERIOD COMPTEK RESCH, S&P AER- S&P ELECTRNC
(FISCAL YEAR COVERED) INC. OSPCE/DEFSE DEFSE
<S> <C> <C> <C>
3/90 100 100 100
3/91 148 108 138
3/92 785 114 136
3/93 687 129 177
3/94 793 168 198
3/95 553 202 217
<FN>
* $100 INVESTED ON 03/31/90 IN STOCK OR INDEX
INCLUDING REINVESTEMENT OF DIVIDENDS.
FISCAL YEAR ENDING MARCH 31.
</TABLE>
EMPLOYMENT CONTRACTS
The Company currently has employment contracts with certain of its
executive officers. Messrs. Cummings, Sciuto, Head, and Morgan have entered into
five-year employment agreements with the Company, terminating in 1999, 1997,
1997, and 1999, respectively. Annual salaries payable under such contracts as of
June 1, 1995, are as follows: John R. Cummings, $180,003; John J. Sciuto,
$163,000; Christopher A. Head, $125,000; and James D. Morgan, $103,200. Under
each agreement, in the event of either voluntary or involuntary termination of
employment, the Company is obligated to make a termination payment in twelve
monthly installments, equal to one year's salary as of the termination date in
consideration of the officer's agreement not to compete with the Company during
the one-year period. Pursuant to a similar agreement, Theodore K. Bosworth was
paid a salary of $117,800 for the fiscal year ended March 31, 1995. On September
1, 1994, this agreement was amended and effective May 1, 1995, this agreement
was terminated by agreement of the Company and Mr. Bosworth. As part of the
termination, Mr. Bosworth was paid a lump-sum of $20,000 and the non-competition
period was adjusted to August 31, 1995.
RETIREMENT SAVINGS PLAN
The Company established a defined contribution plan known as the Comptek
Research Retirement Savings Plan effective June 1, 1985. This Plan is intended
to meet the requirements of Section 401(k) of the Code.
14
<PAGE> 16
Each full-time regular employee is eligible to join the Plan on his or her
date of hire. Each other employee is eligible upon completion of one year of
service in which such employee has been credited with at least 1,000 hours of
service on or upon a change in status to full-time, regular employee. At April
1, 1995, there were 510 Participants.
Prior to April 1, 1991, contributions under the Plan were made by the
Company only with respect to Participants who agree to contribute a portion of
their compensation from the Company. Initial contributions under the Plan began
June 1, 1985.
Effective April 1, 1992, the Company's match contribution was increased
from $.25 to $.30 on the first 4% of pay retroactive to April 1, 1991, for all
active participants as of March 31, 1992. In addition, effective April 1, 1991,
the Company will make an automatic contribution equal to 1% of gross pay at the
end of each fiscal year to the individual account of each eligible employee. To
be eligible for the automatic contribution, an employee must have been
continuously employed on a full-time basis for the entire fiscal year.
A Participant at all times is 100% vested in his contributions and
contributions made by the Company. Distributions are made under the Plan only
upon retirement, death, disability, separation from service or in the case of
certain hardships. There is a loan provision in the Plan that may be put into
effect by the Plan Administrator.
All contributions under the Plan are placed into individual accounts for
each Participant. For the year ended March 31, 1995, the Company contributed a
total of $448,000 for all employees, including Executive Officers. The Company's
matching contributions for the last fiscal year for the named Executive Officers
is included in the "Summary Compensation Table."
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE
The Company, pursuant to its by-laws, indemnifies its directors, officers,
benefit plan trustees, other fiduciaries and employees as permitted by law in
connection with proceedings which might be instituted against them by reason of
their service for or on behalf of the Company. The Company has purchased
directors' and officers' liability insurance which provides indemnification for
the Company and its directors and officers. The current policy, issued by the
Chubb Group, is effective for the period of April 1, 1995, through March 31,
1996, at an annual premium of $55,100.
CERTAIN TRANSACTIONS
The Company maintains its principal banking relations with Manufacturers
and Traders Trust Company ("M & T Bank"). M & T Capital is a wholly owned
subsidiary of M & T Bank and during a portion of fiscal 1994 was a shareholder
of the Company. Pursuant to a revolving credit loan agreement dated October 27,
1987, as amended, the Company maintains a $7,000,000 line of credit with M & T
Bank.
During the fiscal year ended March 31, 1995, the Company retained, and in
the future anticipates retaining, the Buffalo, New York, law firm of Hodgson,
Russ, Andrews, Woods and Goodyear to perform certain legal services. Director
Henry P. Semmelhack's wife, Tricia T. Semmelhack, is a partner in such law firm.
Joseph F. Sciuto, Vice President of Business Development for Comptek
Federal Systems, Inc., is the brother of John J. Sciuto, President of Comptek
Federal Systems, Inc., and an executive officer of the Company. Joseph F.
Sciuto, who holds a Ph.D. in computer information systems, has held similar
positions with Contel and GTE during his 25 years of involvement within the
defense establishment. Dr. Sciuto is responsible for the development and
implementation of Comptek Federal Systems' marketing and business development
plans. For the fiscal year ended March 31, 1995, he was paid a salary and bonus
of $123,536.
COMPLIANCE WITH SECTION 16 FILING REQUIREMENTS
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during April 1, 1994, through March 31, 1995, all filing requirements
applicable to its officers, directors, and greater-than-ten-percent beneficial
owners were met.
15
<PAGE> 17
PROPOSAL NO. 2
AMENDMENT OF THE 1992 EQUITY INCENTIVE PLAN
At the Annual Meeting, shareholders are being asked to consider and take
action upon a proposal to approve an amendment to the 1992 Equity Incentive Plan
(the "Plan"). The amendment provides for (i) an increase in the number of shares
that are authorized to be issued to 948,000 common shares from 648,000 common
shares (subject to anti-dilution adjustments), (ii) a limit on the number of
options and Limited Stock Appreciation Rights (LSARs) that may be granted to any
individual under the Plan, and (iii) participants to elect to receive awards in
shares of stock in lieu of cash.
The Plan was originally adopted by the Board of Directors and approved by
shareholders in 1992 in order to give the Company greater flexibility in
providing to key employees ownership interest in the Company, thereby increasing
their motivation to strive towards insuring the Company's growth and success.
The Board also believes that the availability of such incentives is a factor in
attracting and retaining those highly competent individuals upon whose judgment,
initiative and leadership the Company's continued success, in large measure,
depends.
As of June 9, 1995, there is an aggregate of 96,408 shares remaining in the
Plan Reserve, and 162,200 options have been granted contingent upon shareholder
approval of the Plan, as amended, at the 1995 Annual Meeting. After deduction of
these contingently granted options, if the Plan, as amended, is approved by
shareholders, the balance of options and shares available for grant under the
Plan would increase to 234,208.
The Plan, as amended, provides that the maximum number of shares for which
options or LSARs may be issued to any individual in any one year is 125,000. The
purpose of this limitation is to allow the Company to qualify for certain tax
deductions for compensation paid to its executive officers.
The Plan currently provides that Performance Awards may be made in either
cash or shares of the Company. The amendment provides for a Participant to elect
to receive an increased amount of a Performance Award in the form of shares in
lieu of cash.
In administering the Plan, the Company currently intends to provide tax
gross-up bonuses to Participants who elect to receive Performance Awards in
shares of the Company in lieu of cash in order to encourage stock ownership by
Participants. The amendment explicitly provides for such tax gross-up payments.
Reference is made to Appendix A of this Proxy Statement for the complete
terms of the Plan. The following summary is subject in all respects to the full
text of the Plan.
ADMINISTRATION
The Plan is administered by the Compensation Committee of the Board of
Directors of the Company (the "Compensation Committee"). No member of the
Compensation Committee shall be an employee of the Company or shall have been
eligible within a one-year period prior to his appointment to receive an Award
under the Plan.
The Compensation Committee shall have full and final authority in its
discretion to conclusively interpret the provisions of the Plan and to decide
all questions of fact arising in its application; to determine the employees to
whom Awards shall be made under the Plan; to determine the type of Award to be
made and the amount, size and terms of each such Award; to determine the time
when Awards will be granted; and to make all other determinations necessary or
advisable for the administration of the Plan.
ELIGIBILITY
Key employees as defined in the Plan and officers of the Company or any of
its subsidiaries are eligible to receive Awards under the Plan (such persons
being "Participants"). Non-employee directors are not eligible to be granted
awards. A Participant may hold more than one Award, subject to restrictions as
set forth in the Plan.
16
<PAGE> 18
AWARDS UNDER THE PLAN
Awards to Participants under the Plan may be made in any of the following
forms:
(a) Options. The Compensation Committee may award Incentive Stock Options
(ISOs) and Non-Qualified Stock Options (collectively, the "Options") and
determine the number of shares to be covered by each Option, the Option price
therefor, the term of the Option, and the other conditions and limitations
applicable to the exercise of the Option. As required by the Code, the Option
price per share of common stock purchasable under an ISO shall not be less than
100% of the fair market value of the common stock on the date of award (or not
less than 110% if the ISO is granted to an individual owning 10% or more of the
voting stock of the Company). The Plan provides that the Option price per share
of common stock purchasable under a Non-Qualified Stock Option shall not be less
than 100% of the fair market value of the common stock on the date of award.
Options may be exercisable for not more than ten years after the date the Option
is awarded.
(b) Restricted Stock. An Award of restricted stock ("Restricted Stock")
entitles the Participant to acquire shares of common stock for a purchase price
equal to or greater than par value, subject to such conditions and restrictions,
including a right of the Company, during a specified period or periods, to
repurchase such shares at their original purchase price (or to require
forfeiture of such shares) upon the Participant's termination of employment.
Subject to the provisions of the Plan, the Compensation Committee may award
shares of Restricted Stock and determine the purchase price therefor, the
duration of the restricted period during which, and the conditions under which,
the shares may be forfeited to or repurchased by the Company, and the other
terms and conditions of such Awards. The Compensation Committee may modify or
waive the restrictions with respect to any Restricted Stock. Shares of
Restricted Stock may be issued for no cash consideration or such minimum
consideration as may be required by applicable law. A Participant shall have all
the rights of a shareholder with respect to the Restricted Stock, including
voting and dividend rights, subject to non-transferability restrictions and
Company repurchase or forfeiture rights, and subject to any other conditions
contained in the Award.
(c) Performance Awards. A Performance Award under the Plan may take the
form of cash or shares of stock ("Performance Shares") and entitles a
Participant to receive cash or Performance Shares upon the attainment of
specified goals during the performance period. The duration of each performance
period and all other limitations and conditions applicable to a Performance
Award shall be established by the Compensation Committee. Such goals and
conditions shall be established by the Compensation Committee at the time of
grant. The payment value of Performance Shares shall be equal to the fair market
value of the Company's common shares on the date the Performance Award is
earned. It is anticipated that the typical performance period will be the
Company's fiscal year. Performance Awards will be based upon financial goals for
the fiscal year.
(d) Limited Stock Appreciation Rights. The Compensation Committee is
authorized, under the terms of the Plan, to grant LSARs with respect to all or
any portion of the shares covered by options granted to officers simultaneously
with the grant of the related options if the relative options are incentive
stock options, or simultaneously with the grant of, or at any time during the
term of, the related options if the related options are non-qualified options.
The grant of the LSAR will not be effective until six months after the date of
its grant. Those options with respect to which LSARs have been granted and
become effective shall become immediately exercisable upon the occurrence of any
of the following events (each, a "Triggering Event"): (i) the consummation by
the Company of a reorganization, merger, or consolidation after approval of any
such transaction by shareholders, other than an officer holding at least the
minimum number of shares necessary to approve such transaction under the
Company's Articles of Incorporation and applicable law, (ii) the consummation by
the Company of a sale of substantially all its assets after approval of any such
transaction by shareholders, other than an officer holding at least the minimum
number of shares necessary to approve such transaction under the Company's
Articles of Incorporation and applicable law, or (iii) the acquisition by a
single purchaser or group of related purchasers of in excess of 51% of the
issued and outstanding shares of common stock from shareholders of the Company
other than an officer, in any case other than in a transaction in which the
surviving corporation or the purchaser is the Company or a subsidiary of the
Company (unless in
17
<PAGE> 19
such transaction the capital stock of the Company or a subsidiary or the Company
is converted into capital stock of an entity other than the Company or any such
subsidiary) or an entity controlled by an officer.
Each LSAR provides that upon the occurrence of a Triggering Event, the
optionee will receive an amount in cash equal to the amount by which the fair
market value per share of the common stock issuable upon exercise of the option
on the date such Triggering Event occurs exceeds the exercise price per share of
the option to which the LSAR relates. A Triggering Event shall be deemed to have
occurred only when the fair market value of the shares subject to the underlying
option exceeds the exercise price of such option. When a Triggering Event
occurs, the related option will cease to be exercisable.
(e) General. Each Award may be made alone, in addition to or in relation
to any other Award. The terms of each Award need not be identical, and the
Compensation Committee need not treat Participants uniformly. Except as
otherwise provided by the Plan or a particular Award, any determination with
respect to an Award may be made by the Compensation Committee at the time of
award or at any time thereafter. The Compensation Committee shall determine
whether Awards are settled in whole or in part in cash, common stock, other
securities of the Company, Awards or other property. Any common stock or other
equity security offered under the Plan to a Participant (a "Section 16
Participant") subject to Section 16 of the Securities Exchange Act of 1934 (the
"Exchange Act") may not be sold for a period of six months after the date of
acquisition; any common stock or other equity security acquired by a Section 16
Participant upon exercise of any Option may not be sold for six months after
grant of the Option; and any LSAR granted to a Section 16 Participant may not be
exercised for six months after the date of grant.
In the case where payment of the exercise price of an Option is made with
shares of common stock, the Compensation Committee may provide for a re-load
feature under which the Participant is granted a number of new options not
exceeding the number of shares of common stock surrendered in payment. The Plan
also authorizes the Compensation Committee to grant to a Participant a loan not
to exceed $30,000 for the purpose of paying estimated federal and state tax
liability anticipated to be incurred by such Participant upon the exercise of an
option or receipt of Performance Shares.
Also, the aggregate fair market value (determined as of the time the
incentive stock option is granted) of the stock for which incentive stock
options are exercisable for the first time by an employee during any calendar
year, under all option plans of the Company and its subsidiaries, may not exceed
$100,000. Options granted under the Plan are non-transferable, and the recipient
of an option will have no rights as a shareholder with respect to shares covered
by his option until the date of issuance of shares upon exercise.
Subject to further limitations that may be imposed by the Compensation
Committee, pursuant to the Code, no ISO may be exercised more than three months
after termination of employment except in the case of disability or death. In
the case of termination on account of disability (as defined in the Code),
outstanding ISOs may be exercised within twelve months of leaving the Company's
employ. Upon death of an optionee, his estate generally may exercise his
options. With respect to all options granted by the Company to date, the
Compensation Committee has required that options exercised by an employee's
estate must be exercised within six months after the date of death. In no event,
however, may an option be exercised after the date for final exercise which is
specified in the option.
Awards may not be made under the Plan after March 31, 2002, but outstanding
Awards may extend beyond such date. The number of shares of common stock
issuable pursuant to the Plan may not be changed except by approval of the
shareholders or by adjustment in the event of corporate reorganization or
recapitalization or other dilutive event affecting the common stock. The Plan
may be amended from time to time by the Board of Directors or terminated in its
entirety, provided that no amendment may be made without shareholder approval if
such approval is necessary to comply with any applicable tax or regulatory
requirement, including any requirement for exemptive relief under Section 16(b)
of the Exchange Act or any successor provision.
Common stock subject to Awards which expire or are terminated prior to
exercise or common stock which has been forfeited under the Plan will be
available for future Awards under the Plan. Both treasury shares and authorized
but unissued shares may be used to satisfy Awards under the Plan. Any proceeds
received by the Company from transactions under the Plan will be used for the
general purposes of the
18
<PAGE> 20
Company. The common stock of the Company is traded principally on the American
Stock Exchange. On June 9, 1995, the closing price of the Company's common stock
was $15.50.
FISCAL 1995 OPTION GRANTS AND CONTINGENT GRANTS
No options were granted to any named executive officers during fiscal 1995.
An aggregate of 51,000 options were granted to all employees as a group in
fiscal 1995. The following table sets forth the number of options granted
contingent upon shareholder approval at the 1995 Annual Meeting of the Plan, as
amended, to certain individuals and groups:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NUMBER OF
NAME AND POSITION OPTIONS PRICE PER SHARE
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
John R. Cummings 48,000 $ 16.00
Chairman, President and CEO
- --------------------------------------------------------------------------------------
John J. Sciuto 21,800 $ 16.00
President and CEO --
Comptek Federal Systems, Inc.
- --------------------------------------------------------------------------------------
Joseph F. Sciuto(1) 6,700 $ 16.00
Vice President, Business Development --
Comptek Federal Systems, Inc.
- --------------------------------------------------------------------------------------
Christopher A. Head 16,700 $ 16.00
Executive Vice President, General Counsel,
and Secretary
- --------------------------------------------------------------------------------------
James D. Morgan 6,900 $ 16.00
Vice President and Chief Scientist --
Comptek Research, Inc.
- --------------------------------------------------------------------------------------
All current executive officers, as a group 93,400 $ 16.00
- --------------------------------------------------------------------------------------
All employees, including all current
officers who are not executive officers,
as a group 68,800 $ 16.00
<FN>
- ---------------
(1) Dr. Sciuto is not an executive officer, but is the brother of John J. Sciuto
who is an executive officer.
</TABLE>
FEDERAL INCOME TAX CONSEQUENCES
(a) Incentive Stock Options. Generally, a Participant will not be deemed
to receive any income at the time an ISO is granted or exercised. (However,
special rules apply to Participants who are subject to the alternative minimum
tax.) Instead, the Participant recognizes gain or loss when the shares acquired
by exercising the Incentive Stock Option are sold. For purposes of determining
any gain or loss, the Participant's basis in the shares is the option price. If
the date of sale is at least two years after the date of the grant of the
Incentive Stock Option and at least one year after acquiring the shares by
exercising the Incentive Stock Option, the Participant realizes long-term
capital gain or loss.
Generally, the Company is not allowed a deduction with respect to an
Incentive Stock Option. However, if a Participant fails to meet the holding
period requirements as outlined above, any gain realized by the Participant upon
selling the shares acquired by exercising an Incentive Stock Option is treated
as ordinary income rather than capital gain, to the extent of the excess, if
any, of the fair market value of the shares at the time of exercise (or, if
less, in certain cases the amount realized on the sale) over the option price.
In that case, the Company is allowed a corresponding deduction.
The differential between the option price of an ISO and the fair market
value of the option stock at the date of exercise is treated as an item of
adjustment for alternative minimum tax ("AMT") purposes which
19
<PAGE> 21
may result in the Participant being subject to an AMT imposed at a flat rate of
28% on individuals and is payable to the extent it exceeds the individual's
regular income tax.
(b) Non-Qualified Stock Options. A Participant does not recognize income
and the Company does not receive a deduction at the time a Non-Qualified Stock
Option is granted.
A Participant exercising a Non-Qualifying Stock Option recognizes ordinary
income and, provided the Company withholds tax, the Company is entitled to a
deduction equal to the excess of the fair market value of the stock purchased
(determined at the time of exercise) over the amount paid for the stock.
Generally, a Participant selling shares acquired by exercising a
Non-Qualified Stock Option recognizes capital gain or loss (assuming the shares
are held as a capital asset). The amount of gain or loss is the difference
between the amount realized upon the sale and the sum of the option price and
the amount of ordinary income recognized in connection with exercising the
Non-Qualified Stock Option. If the shares are held for more than a year, any
gain or loss is long-term capital gain or loss.
The foregoing is merely a summary of the tax consequence of stock options
and does not purport to be a complete description of the federal income tax
aspects of the Plan. The Plan is not subject to any provisions of the Employee
Retirement Income Security Act of 1974, as amended, and is not qualified under
Section 401(a) of the Code.
REQUIRED VOTE FOR APPROVAL OF THE PLAN
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES VOTED AT THE ANNUAL
MEETING WILL BE REQUIRED TO AMEND THE PLAN. THE BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" THE AMENDMENT OF THE EQUITY INCENTIVE PLAN, AND PROXIES WILL BE SO
VOTED UNLESS SHAREHOLDERS SPECIFY A CONTRARY VOTE OR ABSTAIN.
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, upon the recommendation of the Finance and Audit
Committee, has selected KPMG Peat Marwick ("Peat Marwick"), independent public
accountants, to audit the financial statements of the Company for the fiscal
year ending March 31, 1996. Peat Marwick has audited the Company's financial
statements for each of the Company's fiscal years since the Company's formation
in 1968. One or more representatives of Peat Marwick will be present at the
Annual Meeting and will have the opportunity to make a statement and/or respond
to appropriate questions that may be raised by shareholders.
20
<PAGE> 22
OTHER INFORMATION
SHAREHOLDERS' PROPOSALS FOR FISCAL 1996 ANNUAL MEETING
Shareholders may submit proposals appropriate for shareholder action at the
Company's Annual Meetings consistent with regulations adopted by the Securities
and Exchange Commission. For such proposals to be considered for inclusion in
the proxy statement and formal proxy for the 1996 Annual Meeting, they must be
received by the Company no later than February 28, 1996. Proposals should be
directed to Christopher A. Head, Esq., Secretary, Comptek Research, Inc., 2732
Transit Road, Buffalo, New York 14224.
OTHER BUSINESS
As of the date of this Proxy Statement, the only business which the Board
of Directors intends to present or knows that others will present at the Annual
Meeting is that hereinabove set forth. If any other matter or matters are
properly brought before the Annual Meeting, or any adjournment or adjournments
thereof, it is the intention of the persons named in the accompanying form of
proxy to vote the proxy on such matters in accordance with their judgment.
A COPY OF THE COMPANY'S FISCAL 1995 ANNUAL REPORT TO THE SECURITIES AND
EXCHANGE COMMISSION ON FORM 10-K WILL BE AVAILABLE AFTER JUNE 30, 1995, AND
PROVIDED WITHOUT CHARGE TO SHAREHOLDERS UPON WRITTEN REQUEST DIRECTED TO THE
SECRETARY, COMPTEK RESEARCH, INC., 2732 TRANSIT ROAD, BUFFALO, NEW YORK 14224.
By the Order of the Board of Directors,
CHRISTOPHER A. HEAD
Secretary
Dated: June 26, 1995
21
<PAGE> 23
EXHIBIT A
(New material is double underlined)
(Old material is bracketed)
1992 EQUITY INCENTIVE STOCK PLAN, *AS AMENDED*
1. PURPOSE. The purposes of the Comptek Research, Inc., 1992 Equity Incentive
Plan (the "Plan"), *as amended*, are to encourage selected employees of
Comptek Research, Inc. (the "Company") and its subsidiaries to acquire
proprietary interest in the growth and performance of the Company; to
generate an increased incentive to contribute to the Company's future
success and prosperity, thus enhancing the value of the Company for the
benefit of its shareholders; and to strengthen the ability of the Company to
attract and retain exceptionally qualified individuals upon whom the
sustained progress, growth and profitability of the Company depend. The Plan
is intended to replace and supersede the Company's 1982 Stock Option Plan.
2. DEFINITIONS. As used in the Plan, the following terms shall have the
meanings set forth below:
a. "Award" shall mean any Stock Option, Limited Stock Appreciation Right,
Restricted Stock, Performance Award, or Other Award granted under the
Plan.
b. "Agreement" shall mean any written agreement, contract, or other
instrument or document evidencing any Award granted under the Plan.
c. "Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
d. "Committee" shall mean a committee of the Board of Directors of the
Company designated by such Board to administer the Plan and composed of
not less than two directors, each of whom is a "disinterested person"
within the meaning of Rule 16b-3.
e. "Company" shall mean Comptek Research, Inc., a New York corporation.
f. "Fair Market Value" of a share of common stock shall be (i) the closing
sale price of a share of common stock as reported on the principal
securities exchange on which shares of common stock are then listed or
admitted to trading on the day as of which such determination of Fair
Market Value is to be made, or if no trading shall have occurred on such
day, then on the latest preceding day on which trading shall have
occurred or (ii) if not so traded, the average of the closing bid and ask
prices as reported on the National Association of Securities Dealers
Automated Quotation System or if not so reported, as furnished by any
member of the National Association of Securities Dealers, Inc., selected
by the Committee, on the day as of which such determination of Fair
Market Value is to be made, or if no sales shall have occurred on such
day, then on the latest preceding day on which sales shall have occurred.
In the event that the price of a share of common stock shall not be
reported in any manner described in the preceding sentence, the Fair
Market Value of a share of common stock shall be determined by the
Committee in its absolute discretion.
g. "Incentive Stock Option" shall mean an option granted under Section 7 of
the Plan that is intended to meet the requirements of Section 422 of the
Code, or any successor provision thereto.
h. "Limited Stock Appreciation Right" shall mean any right granted in
conjunction with an Option subject to the conditions pursuant to Section
10 of the Plan.
i. "Non-Qualified Stock Option" shall mean an option granted under Section 7
of the Plan that is not intended to be an Incentive Stock Option.
j. "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
k. "Participant" shall mean those officers and other key employees
designated to be granted an Award under the Plan.
l. "Performance Award" shall mean any right granted under Section 9 of the
Plan.
m. "Prior Plan" shall mean the Company's 1982 Stock Option Plan, as amended.
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___________
* - Asterisks denote new material is double underlined.
<PAGE> 24
n. "Person" shall mean any individual, corporation, partnership,
association, joint-stock company, trust, unincorporated organization, or
government or political subdivision thereof.
o. "Restricted Stock" shall mean any Share granted under Section 8 of the
Plan that is denominated in Shares.
p. "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended, or any successor rule or regulation thereto.
q. "Section 16 Participant" shall mean a person who is an officer of the
Company within the meaning of Rule 16a-1(f) promulgated by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as
amended.
r. "Shares" shall mean the common shares of the Company, $0.02 par value,
and such other securities or property as may become the subject of
Awards, or become subject to Awards, pursuant to an adjustment made under
Section 17 of the Plan.
3. ADMINISTRATION. The Plan shall be administered by the Compensation
Committee of the Board of Directors of the Company (the "Committee"). No
member of the Committee shall be an employee of the Company or shall have
been eligible within a one-year period prior to his appointment to receive
an Award under the Plan.
The Committee shall have full and final authority in its discretion to
conclusively interpret the provisions of the Plan and to decide all
questions of fact arising in its application; to determine the employees to
whom Awards shall be made under the Plan; to determine the type of Award to
be made and the amount, size, and terms of each such Award; to determine the
time when Awards will be granted; and to make all other determinations
necessary or advisable for the administration of this Plan.
4. SHARES SUBJECT TO PLAN. The Shares that may be issued under the Plan
pursuant to Section 6 shall not exceed *948,000* [648,000] in the aggregate
shares of the Company's common stock which number shall include the number
of shares which may be used upon the exercise of Options under the Prior
Plan. Such Shares may be authorized and unissued shares or treasury shares.
Except as otherwise provided herein, any shares subject to an option or
right which for any reason expires or is terminated unexercised as to such
shares shall again be available under the Plan. The grant of a cash bonus or
loan shall not reduce the number of shares subject to the Plan.
5. PARTICIPANTS. Persons eligible to participate shall be limited to those
officers and other key employees of the Company and its subsidiaries who, in
the opinion of the Committee, are in positions in which their decisions,
actions, and counsel significantly impact upon the growth and financial
success of the Company (the "Participant"). Directors of the Company who are
not otherwise officers or employees of the Company shall not be eligible to
participate in the Plan.
6. AWARDS UNDER THE PLAN. Awards under the Plan may be in the form of Stock
Options, both Non-Qualified Stock Options (NQSOs) and Incentive Stock
Options (ISOs) under Section 422 of the Code or any amendment thereof or
substitute therefor, Restricted Stock, Limited Stock Appreciation Rights
(LSARs), and Performance Awards, or such other forms as the Committee may in
its discretion deem appropriate, including any combination of the above.
7. STOCK OPTIONS. Options shall be evidenced by Stock Option Agreements in
such form and not inconsistent with this Plan as the Committee shall approve
from time to time, which agreements shall contain in substance the following
terms and conditions:
a. Option Price. The Option exercise price for each share of stock shall be
equal to 100% of the Fair Market Value of a share of stock or such higher
price as may be determined by the board in respect to any Option.
b. Exercise of Option. Each Option Agreement shall state the period of
periods of time, as may be determined by the Committee, within which the
Option may be exercised by the Participant, in whole or in part, provided
that the Option may not be exercised earlier than twelve months after the
date of the grant of the Option nor later than ten years after the date
of the grant of the Option. The
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<PAGE> 25
Committee shall have the power to permit in its discretion an
acceleration of the previously determined exercise terms, subject to the
terms of this Plan, under such circumstances and upon such terms and
conditions as it deems appropriate.
c. Payment for Shares. Stock purchased pursuant to an Option Agreement
shall be paid for in full at the time of purchase, either in the form of
cash, common stock of the Company at Fair Market Value, or in a
combination thereof, as the Committee may determine.
d. Termination of Employment.
i. In the event that the Participant shall quit the employ of the
Company or its subsidiaries for any reason, or shall cease to be
employed by the Company or its subsidiaries for any reason other
than death, retirement, disability, or discharge without cause,
the option period of any unexercised portion of the Option granted
to the Participant pursuant to this Option and Agreement shall
terminate upon the termination of the Participant's employment.
ii. In the event that the Participant shall cease to be employed by the
Company or its subsidiaries by reason of retirement because of age,
the Participant shall have the right to exercise the Option (to the
extent exercisable and not previously exercised) within three (3)
months after such termination of employment. Option installments
accumulating during such three (3) month period shall also be
exercisable. "Retirement" as referred to herein shall be deemed to
mean the termination of the Participant's employment by the Company
or its subsidiaries by reason of his attainment of such age as may
have been determined by the employment policies or any pension plan
of the Company or subsidiary employer to be normal retirement age.
iii. In the event that the Participant shall cease to be employed by the
Company or its subsidiaries by reason of disability (within the
meaning of Section 105(d)(4) or successor Section of the Code), the
Participant shall have the right to exercise the Option (to the
extent exercisable and not previously exercised) within one (1) year
after such termination of employment.
iv. In the event that the Participant shall cease to be employed by the
Company or its subsidiaries by reason of Participant's death or in
the event of the death of the Participant within a period of three
(3) months after the termination of his employment with the Company
or its subsidiaries and at a time when an unexercised Option
theretofore granted to him has not terminated or expired, the
Option may be exercised (to the extent exercisable and not
previously exercised) within six (6) months after the Participant's
death, by the executors or administrators of the Participant or by
any person or persons who shall ave acquired the Option directly
from the Participant by bequest or inheritance.
v. In the event that the Participant shall cease to be employed by the
Company or its subsidiaries by reason of discharge without cause, the
Participant shall have the right to exercise the option (to the
extent exercisable and not previously exercised) within three (3)
months after such termination of employment. The phrase "discharge
without cause," as hereinabove used, means the discharge of the
Participant by the Company or subsidiary employer for reasons other
than: Intemperate use of alcohol or addictive drugs, or conviction
of a felony, or conviction for a misdemeanor other than under the
vehicle and traffic laws, or substantial evidence of dishonesty in
relation to the property, funds, or affairs of the Company or any
subsidiary or any other employee thereof or any person dealing
therewith.
e. Individual Limitations.
i. Notwithstanding anything herein to the contrary, the aggregate Fair
Market Value (determined as of the time the Option is granted) of the
stock that may become first exercisable in any calendar year with an
ISO shall not exceed $100,000.
ii. Notwithstanding anything herein to the contrary, no ISO shall be
granted to any individual if at the time the Option is to be granted
the individual owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Company
unless at the time such Option is granted, the Option price is at
least 110 percent of the Fair Market Value of the stock subject to
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<PAGE> 26
Option and such Option by its terms is not exercisable after the
expiration of five years from the date such Option is granted.
*iii. Notwithstanding anything herein to the contrary, the maximum number
of Shares for which Options or LSARs may be issued to any individual
in any one year period shall not exceed 125,000.*
f. Option Reload. The Committee may with the grant of any Option provide
that upon payment of the exercise price with shares of common stock that
the Participant shall receive an additional number of Options of the same
nature (i.e., ISOs or NonQualified Stock Options) equal to the number of
shares of common stock surrendered in payment (provided the aggregate
Plan limits shall not be exceeded). Such additional Options shall be
exercisable at the current Fair Market Value of the common stock on the
date of grant hereunder and subject to such other terms as the Committee
shall establish.
g. Other Terms. Each ISO agreement shall contain such other terms,
conditions and provisions as the Committee my determine to be necessary
or desirable in order to qualify such Option as a tax-favored Option
within the meaning of Section 422 of the Code, or any amendment thereof,
substitute therefor, or regulation thereunder. Subject to the limitations
of Section 19, and without limiting any other provisions hereof, the
Committee shall have the power without further approval to amend the
terms of any Option.
8. RESTRICTED STOCK. Restricted Stock Awards under the Plan shall be in the
form of Shares of common stock of the Company, restricted as to transfer and
subject to forfeiture, and shall be evidenced by Restricted Stock Agreements in
such form and not inconsistent with this Plan as the Committee shall approve
from time to time, which Agreements shall contain in substance the following
terms and conditions:
a. Award. The Committee shall determine the amount of a Restricted Stock
Award to be granted to an eligible employee based on the Participant's
salary, job performance, and other factors deemed by the Committee to be
appropriate.
b. Restriction Period. Restricted Stock Awards made pursuant to this Plan
shall be subject to such terms, conditions, and restrictions, including
without limitation substantial risks of forfeiture and/or attainment of
performance objectives, and for such period or periods as shall be
determined by the Committee at the time of grant. The Committee shall
have the power to permit, in its discretion, an acceleration of the
expiration of the applicable restriction period with respect to any part
or all of the award to any Participant.
c. Restrictions Upon Transfer. Shares awarded, and the right to vote such
Shares and receive dividends thereon, may not be sold, assigned,
transferred, exchanged, pledged, hypothecated, or otherwise encumbered,
except as herein provided, during the restriction period applicable to
such shares. Notwithstanding the foregoing, and except as otherwise
provided in the Plan, the Participant shall have all the other rights of
a stockholder including, but not limited to, the right to receive
dividends and the right to vote such Shares.
d. Certificates. Each certificate issued with respect to the Restricted
Stock Shares awarded to the Participant shall bear a legend stating, but
not limited to, the restricted period, the manner in which restrictions
will lapse, and the rights of the holder during the restricted period.
e. Lapse of Restrictions. The Award Agreement shall specify the terms and
conditions upon which any restrictions on the right to receive Shares
representing Restricted Stock awarded under the Plan shall lapse, as
determined by the Committee. Upon the lapse of such restrictions, Shares
of common stock free of any restrictive legend shall be issued to the
Participant of his legal representative.
f. Termination Prior to Lapse of Restrictions. In the event of a
Participant's termination of employment for any reason prior to the lapse
of restrictions applicable to a Restricted Stock Award made to such
Participant, all rights to Shares as to which there still remain unlapsed
restrictions shall be forfeited by such Participant to the Company
without payment or any consideration by the Company, and neither the
Participant nor any successors, heirs, assigns, or personal
representatives of such Participant shall thereafter have any further
rights or interest in such Shares.
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<PAGE> 27
9. PERFORMANCE AWARDS. Performance Awards under the Plan shall be evidenced by
Performance Award Agreements in such form and not inconsistent with this
Plan as the Committee shall approve from time to time, which Agreements
shall contain in substance the following terms and conditions:
a. Performance Period. At the time the Award, the Committee shall establish
with respect to each Award a performance period over which the Award may
be earned.
b. Award. The Committee shall determine the amount and conditions under
which a Performance Award will be granted to an eligible employee,
including without limitation, the requirement that the Participant or the
Company attain specific performance objectives for such period as shall
be determined by the Committee at the time of grant. In determining the
amount of the contingent Performance Award, the Committee shall take into
account the financial objectives of the Company, including but not
limited to sales and earnings, as well as the Participant's
responsibility level, performance, potential, and other considerations as
it deems appropriate.
c. Form. The Committee shall determine whether Performance Awards earned
will be in the form of Shares of stock ("Performance Shares") or cash
prior to the beginning of each Performance Period. *A Participant may by
irrevocable notice filed with the Company at least six months prior to
completion of the performance period elect to have any anticipated award
amount to be paid in cash paid in Shares of stock in lieu of cash.*
d. Payment of Award. Following the conclusion of each Performance Period,
the Committee shall determine the extent to which performance targets
have been attained for such period as well as the other terms established
by the Committee. Payment in cash or Performance Shares as determined by
the Committee *or as elected by the Participant, as the case may be,*
shall be made as promptly as practical following the end of the
Performance Period. *The Committee may in the connection with the
payment of an Award in the form of Performance Shares grant to a
Participant a cash bonus equal to the federal and state income tax
liability anticipated to be incurred by such Participant upon receipt of
Performance Shares.*
e. Adjustments. At any time prior to the payment of the Awards, the
Committee may adjust previously established performance targets and other
terms and conditions, including the Company's financial performance for
Plan purposes, to reflect major unforeseen events such as changes in
laws, regulations or accounting practice, mergers, acquisitions or
divestitures or extraordinary, unusual, or nonrecurring items or events.
f. Termination Prior to Award Being Fully Earned. A Performance Award
granted to an employee shall terminate for all purposes if the
Participant is not in the continuous employ of the Company at all times
during the Performance Period, except in the case of death, disability,
or retirement. A Participant or the Participant's estate whose employment
was terminated due to death, disability or retirement shall be eligible
to receive a pro rata portion of the payment of his Award based upon the
portion of the Performance Period during which the Participant was
employed, as the Committee shall determine in each case.
10. LIMITED STOCK APPRECIATION RIGHTS.
a. The Committee is authorized, in its discretion, to grant LSARs with
respect to all or any portion of the Shares covered by stock options
granted hereunder to officers of the Company, simultaneously with the
grant of, or at any time during the term of, Non-Qualified Options or
simultaneously with the grant of ISOs. The grant of the LSAR will not be
effective until six months after the date of its grant. Those Options
with respect to which an LSAR has been granted and become effective shall
become immediately exercisable upon the occurrence of any of the
following events (each, a "Triggering Event"): (i) the consummation by
the Company of a reorganization, merger, or consolidation after approval
of any such transaction by shareholders, other than Section 16
Participants, holding at least the minimum number of shares necessary to
approve such transaction under the Company's Articles of Incorporation
and applicable law, (ii) the consummation by the Company of a sale of
substantially all its assets after approval of any such transaction by
shareholders, other than Section 16 Participants, holding at least the
minimum number of shares necessary to approve such transactions under the
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<PAGE> 28
Company's Articles of Incorporation and applicable law, or (iii) the
acquisition by a single purchaser or group of related purchasers of in
excess of 51% of the issued and outstanding shares of common stock from
shareholders of the Company other than Section 16 Participants, in any
case other than in a transaction in which the surviving corporation or
the purchaser is the Company or a subsidiary of the Company (other than a
transaction in which the surviving corporation or the purchaser is the
Company or a subsidiary of the Company but the capital stock of the
Company or a subsidiary of the Company is converted into capital stock of
any entity other than the Company or any such subsidiary) or an entity
controlled by Section 16 Participants.
b. The LSARs shall provide that upon the occurrence of any Triggering Event,
the Participant shall receive from the Company, for each LSAR, an amount
in cash equal to the amount by which the option exercise price per Share
of the Option to which the LSAR relates exceeds the Fair Market Value of
the Shares issuable upon exercise of such Option on the date such
Triggering Event occurs. When a Triggering Event occurs, the Option to
which the LSAR relates will cease to be exercisable, but will be deemed
to have been exercised for purposes of determining the number of Shares
for which Options may be granted hereunder.
c. An LSAR shall be expressly subject to the following additional
requirements: (i) the LSAR shall expire no later than the expiration of
the underlying Option; (ii) the LSAR shall be transferable only when the
underlying Option is transferable, and under the same conditions; and
(iii) a Triggering Event shall be deemed to have occurred only when the
Fair Market Value of the Shares subject to the underlying Option exceeds
the exercise price of such option.
11. ACCELERATION OF VESTING. Notwithstanding the provisions of Section 7 hereof
and the terms of each Stock Option Agreement, upon he occurrence of any
Triggering Event (as defined in Section 10 hereof) all Options, Restricted
Stock, Performance Awards, and other applicable awards granted under the
Plan, then unexercised and unexpired, shall become immediately vested and/or
payable in cash for the period of their remaining terms automatically and
without any action by the Committee.
12. LOANS. The Committee may grant to a Participant a loan not to exceed the
principal amount of $30,000 for the purpose of paying federal or state tax
liability anticipated to be incurred by such Participant upon the exercise
of an Option or receipt of Performance Shares. Such loan shall be subject to
such conditions as the Committee shall determine at the time of grant
thereof, including without limitation, interest and repayment terms.
13. GENERAL RESTRICTIONS. The Plan and each Award under the Plan shall be
subject to he requirement that, if at any time the Committee shall determine
that (i) the listing, registration or qualification of the shares of common
stock subject or related thereto upon any securities exchange or under any
state or federal law, or (ii) the consent or approval of any government
regulatory body, or (iii) an Agreement by the recipient of an Award with
respect to the disposition of Shares of common stock, is necessary or
desirable as a condition of, or in connection with, the Plan or the granting
of such Award or the issue or purchase of Shares of common stock thereunder,
such Plan will not be effective and the Award may not be consummated in
whole or in part unless such listing, registration, qualification, consent,
approval or agreement shall have been effected or obtained free of any
conditions not acceptable to the Committee.
14. RIGHTS OF A SHAREHOLDER. The recipient of any award under the Plan shall
have no rights as a shareholder with respect thereto unless and until
legended certificates for Shares of common stock are issued.
15. RIGHTS TO TERMINATE EMPLOYMENT. Nothing in the Plan or in any Agreement
entered into pursuant to the Plan shall confer upon any Participant the
right to continue in the employment of the Company or affect any right which
the Company may have to terminate the employment of such Participant.
16. WITHHOLDING OF TAXES. Whenever the Company proposes or is required to issue
or transfer Shares of common stock under the Plan, the Company shall have
the right to require the recipient to remit to the Company an amount
sufficient to satisfy any federal, state, and/or local withholding tax
requirements prior to the delivery of any certificate or certificates for
such Shares. Withholding requirements may be satisfied by cash payments or
at the election of a Plan Participant by having the Company withhold a
portion of the Shares to be received having a value equal to the amount to
be withheld (or such portion
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thereof as the Participant may elect). Any election to have Shares withheld
under this Section shall be subject to the following restrictions in
accordance with Section 16(b) of the Securities Exchange Act of 1934, as
amended:
a. The election shall be made at the time of grant and shall be irrevocable;
b. the election shall be subject, in whole or in part, to the approval of
the Committee and to such rules as it may adopt; and
c. the Option that may be part of the transaction must not be exercised
within six months following the election.
Whenever payments under the Plan are to be made in cash, such payments
shall be net of an amount sufficient to satisfy any federal, state,
and/or local withholding tax requirements.
17. NON-ASSIGNABILITY. No Award under the Plan shall be assignable or
transferable by the recipient thereof except by will or by the laws of
descent and distribution or by such other means as the Committee may approve
from time to time. During the life of the recipient, such Award shall be
exercisable only by such person or by such person's guardian or legal
representative.
18. NON-UNIFORM DETERMINATIONS. The Committee's determinations under the Plan
(including without limitation determinations of the persons to receive
Awards, the form, amount, and timing of such Awards, the terms and
provisions of such Awards and the Agreements evidencing same, and the
establishment of values and performance targets) need not be uniform and may
be made by it selectively among persons who receive, or are eligible to
receive, Awards under the Plan, whether or not such persons are similarly
situated.
19. ADJUSTMENTS. In the event of any change in the outstanding common stock of
the Company by reason of a stock dividend or distribution, recapitalization,
merger, consolidation, split-up, combination, exchange of shares or the
like, the Committee shall adjust he number of Shares of common stock which
may be issued under the Plan and shall provide for an equitable adjustment
of any outstanding Award or Shares issuable pursuant to an outstanding Award
under this Plan.
20. DELEGATION. The Committee may delegate to one or more officers or managers
of the Company, or a committee of such officers or managers, the authority,
subject to such terms and limitations as the Committee shall determine, to
grant Awards to, or to cancel, modify, waive rights with respect to, alter,
discontinue, suspend, or terminate Awards held by, Participants who are not
officers or directors of the Company for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended.
21. AMENDMENT. The Board of the Company may amend the Plan at any time, except
that without shareholder approval, the Board may not increase the maximum
number of shares which may be issued under the Plan (other than increases
pursuant to Section 19 hereof), extend the period during which any Award may
be exercised, extend the term of the Plan or change the price at which a
Option may be granted. The termination or any modification or amendment of
the Plan shall not, without the consent of a Participant, affect a
Participant's rights under an Award previously granted. No amendment shall
be made without shareholder approval if such approval is necessary to comply
with applicable tax or regulatory requirements, including any requirements
for exemptive relief under Section 16 of the Securities Exchange Act of
1934, as amended.
22. EFFECT ON PRIOR PLAN. Subject to shareholder approval of this Plan as
elsewhere herein provided, the Prior Plan is hereby superseded and shall be
of no further force and effect, subject to the following:
a. All Options heretofore issued under the Prior Plan shall be taken into
account for purposes of the aggregate limit of common shares subject to
this Plan pursuant to Section 4 hereof;
b. nothing in this Plan shall change the terms of any option heretofore
granted under the Prior Plan in any respect that is adverse to any
optionee or dilute or diminish the rights or privileges of any optionee
with respect thereto; and
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c. the Committee shall have authority in its absolute discretion to
determine if any terms of this Plan that may be more favorable to
optionees than any terms of the Prior Plan, in respect of Options
heretofore granted thereunder, shall apply to such Options, provided that
any such determination shall be made on a non-discriminatory basis.
23. EFFECT ON OTHER PLAN. Participation in this Plan shall not affect an
employee's eligibility to participate in any other benefit or incentive plan
of the Company and any Awards made pursuant to this Plan shall not be used
in determining the benefits provided under any other plan of the Company
unless specifically provided.
24. DURATION OF THE PLAN. The Plan shall remain in effect until all Awards
under the Plan have been satisfied by the issuance of Shares or the payment
of cash, but no Award shall be granted more than ten years after the date
the Plan is adopted by the Company.
25. FUNDING OF THE PLAN. This Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Award under this Plan and
payment of Awards shall be subordinate to the claims of the Company's
general creditors.
26. SEVERABILITY. If any provision of the Plan or any Award is or becomes or is
deemed to be invalid, illegal, or unenforceable in any jurisdiction, or as
to any Person or Award, or would disqualify the Plan or any Award under any
law deemed applicable by the Committee, such provisions shall be construed
or deemed amended to conform to applicable laws, or if it cannot be so
construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision
shall be stricken as to such jurisdiction, Person, or Award, and the
remainder of the Plan and any such Award shall remain in full force and
effect. With respect to Section 16 Participants, transactions under this
Plan are intended to comply with all applicable conditions of Rule 16b-3 or
its successors under the Securities Exchange Act of 1934, as amended. To the
extent any provision of this Plan or actions by the Compensation Committee
fails to so comply, it shall be deemed null and void, to the extent
permitted by law and deemed advisable by the Compensation Committee.
27. CONSTRUCTION. Wherever any words are used in this Plan in the masculine
gender, they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any
words are used herein in the singular form they shall be construed as though
they were also used in the plural form in all cases where they would so
apply.
28. HEADINGS. Headings are given to the Sections and subsections of the Plan
solely as convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation
of the Plan or any provision thereof.
29. GOVERNING LAW. The validity, construction, and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of New York and applicable Federal law.
30. EFFECTIVE DATE. Subject to the provisions of Section 32, this Plan shall be
effective on April 9, 1992.
31. TERM OF THE PLAN. No award shall be granted under the Plan after March 31,
2002, but unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award theretofore granted may extend beyond
such date.
32. APPROVAL OF SHAREHOLDERS. Notwithstanding anything herein to the contrary,
this Plan shall only be effective if it is approved by holders of a majority
of the outstanding shares of common stock of the Company voting, in person
or by proxy, at an Annual Meeting of Shareholders to be held in 1992. *The
Plan was amended by the Board of Directors on May 19, 1995, subject to
approval by the shareholders at the 1995 Annual Meeting.*
A-8
<PAGE> 31
[COMPTEK RESEARCH INC. LOGO]
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS, JULY 28, 1995
The undersigned hereby appoints CHRISTOPHER A. HEAD and LAURA L. BENEDETTI as
Proxies, each with the power to appoint his/her substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side,
all the shares of common stock of Comptek Research, Inc., held of record by the
undersigned on June 9, 1995, at the Annual Meeting of Shareholders to be held
on July 28, 1995, or any adjournments thereof, upon the matters set forth in
the Proxy Statement and, in their judgment and discretion, upon such other
business as may properly come before the meeting.
THE PROXY WILL BE VOTED FOR ELECTION OF THE DIRECTORS AND FOR ALL OTHER ITEMS
LISTED ON THE REVERSE SIDE UNLESS A CONTRARY INSTRUCTION IS GIVEN.
- ---------------------------------------+
ADDRESS CHANGE: PLEASE MARK |
COMMENT/ADDRESS BOX ON REVERSE SIDE | PLEASE FILL IN, DATE, AND SIGN
| ON THE REVERSE SIDE AND RETURN
| THIS PROXY IN THE
| ACCOMPANYING ENVELOPE.
. . . . . . . . . . . . . . . . . . . .|. . . . . . . . . . . . . . . . . . . .
/\ FOLD AND DETACH HERE /\
<TABLE>
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE NOMINEES IN ITEM 1, FOR +-------------------+
ITEM 2, AND FOR ITEM 3. | I PLAN TO ATTEND |
| THE MEETING. |
| |
| [ ] |
| |
+-------------------+
Item 1-ELECTION OF THREE CLASS I DIRECTORS for a two-year term expiring at the 1997 Annual Meeting:
FOR all nominees list- WITHHOLD JAMES D. MORGAN, VICTOR A. RICE, HENRY P. SEMMELHACK
ed above (except as AUTHORITY
marked to tbe contrary to vote for all (INSTRUCTION: To withhold authority to vote for any individual nominee, write that
at right). nominees listed above. nominee's name on the line provided below.)
__________________________________________________________________________________
<S> <C>
[ ] [ ]
Item 2-AMENDMENT OF THE 1992 Item 3-RATIFICATION OF SELECTION OF KPMG COMMENTS/ADDRESS CHANGE ____
EQUITY INCENTIVE PLAN. PEAT MARWICK, Independent accounts, as | |
auditors for the Company for the Fiscal Please mark this box if you have an |____|
Year ending March 31, 1996. address change and make change on
mailing label.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
[ ] [ ] [ ] [ ] [ ] [ ]
RECEIPT IS HEREBY ACKNOWLEDGED OF THE COMPTEK
RESEARCH, INC. NOTICE OF MEETING AND PROXY
STATEMENT.
Signature(s)___________________________________
___________________________________
Date: ___________________________________
NOTE: Please sign as name appears hereon.
Joint owners should each sign. When signing
as attorney, executor, administrator, trustee
"PLEASE MARK INSIDE BLUE BOXES SO THAT DATA or guardian, please give full title as such.
PROCESSING EQUIPMENT WILL RECORD YOUR VOTES"
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
/\ FOLD AND DETACH HERE /\
</TABLE>
