<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / 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 Section 240.14a-11(c) or Section 240.14a-12
VERSAR, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / 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 No.:
- --------------------------------------------------------------------------------
3) Filing Party:
- --------------------------------------------------------------------------------
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[VERSAR, INC. LOGO]
Dear Stockholder:
You are cordially invited to attend Versar, Inc.'s Annual Meeting of
Stockholders to be held at our offices, 6850 Versar Center, Springfield,
Virginia 22151, on Thursday, November 16, 1995, at 10:15 a.m. local time.
The matters scheduled for consideration at the meeting are the election of
directors and ratification of the appointment of independent accountants. We
will also report to you on Versar's condition and performance, and you will have
the opportunity to question management on matters that affect the interests of
all stockholders.
You can reach the offices of Versar by car, from either I-395 or I-495.
From I-395: exit Edsall Road West to Backlick Road; left (south) on Backlick to
Hechinger Drive; left on Hechinger Drive to Versar Center. From I-495: exit
Braddock Road East to Backlick Road; right (south) on Backlick to Hechinger
Drive; left on Hechinger Drive to Versar Center.
The stockholders' interest in the affairs of Versar is encouraged and it is
important that your shares be represented at the meeting. We hope you will be
with us. Whether you plan to attend or not, please complete, sign, date, and
return the enclosed proxy card as soon as possible in the postpaid envelope
provided. Sending in your proxy will not limit your right to vote in person or
to attend the meeting, but it will assure your representation if you cannot
attend. Your vote is important.
Sincerely yours,
/s/ BENJAMIN M. RAWLS
------------------------------
Benjamin M. Rawls
Chairman and Chief Executive Officer
October 12, 1995
<PAGE> 3
[VERSAR, INC. LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders of Versar, Inc.
The Annual Meeting of Stockholders of Versar, Inc. (the "Company") will be
held at the Company's offices, 6850 Versar Center, Springfield, Virginia 22151,
on Thursday, November 16, 1995, at 10:15 A.M. local time for the following
purposes:
1. To elect eight directors for the ensuing year;
2. To ratify the appointment of Arthur Andersen LLP as independent
accountants for fiscal year 1996; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only stockholders of record at the close of business on October 6, 1995,
will be entitled to notice of and to vote at the meeting and any adjournments
thereof.
Your attention is directed to the Proxy Statement accompanying this Notice
for a more complete statement regarding the matters to be acted upon at the
meeting.
By Order of the Board of Directors,
/s/ JAMES C. DOBBS
----------------------------
James C. Dobbs
Secretary
October 12, 1995
IMPORTANT NOTICE
YOUR PROXY IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE
AND RETURN THE ENCLOSED PROXY AS SOON AS POSSIBLE IN THE POST-PAID ENVELOPE
PROVIDED.
<PAGE> 4
[VERSAR, INC. LOGO]
VERSAR, INC.
------------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 16, 1995
------------------------------------------------------------
GENERAL
This Proxy Statement and the enclosed proxy card are being mailed on or
about October 12, 1995, to stockholders of Versar, Inc. ("Versar" or the
"Company") in connection with the solicitation by the Board of Directors of the
Company of proxies for use at the Annual Meeting of Stockholders to be held on
November 16, 1995, and any adjournment thereof. Any person giving a proxy
pursuant to this Proxy Statement may revoke it at any time before it is
exercised at the meeting by filing with the Secretary of the Company an
instrument revoking it or by a duly executed proxy bearing a later date. In
addition, if the person executing the proxy is present at the meeting, he or she
may vote his or her shares in person. Proxies in the form enclosed, if duly
signed and received in time for voting, and not so revoked, will be voted at the
meeting in accordance with the directions specified therein.
RECORD DATE AND VOTING RIGHTS
Only holders of record of Versar's common stock, par value $.01 per share
("Common Stock"), at the close of business on October 6, 1995, (the "Record
Date") are entitled to notice of and to vote at the Annual Meeting and any
adjournment(s) thereof. The number of shares of Common Stock outstanding and
entitled to vote as of the Record Date was 4,855,833. Each share of Common Stock
is entitled to one vote on all matters of business at the meeting.
The By-laws of the Company require that the holders of a majority of the
outstanding shares of the Company's Common Stock entitled to vote at the Annual
Meeting of Stockholders be present in person or represented by proxy in order
for a quorum to exist for the transaction of business at that meeting. Assuming
that such a quorum is present for the November 16, 1995 meeting, then those
eight nominees for director who receive the highest number of votes cast will be
elected. On all other matters considered at the meeting, the affirmative vote of
a majority of the shares voting, in person or by proxy, is required for
approval. Abstentions and broker non-votes will be counted as present for the
purpose of computing the quorum, but do not constitute a vote "FOR" or "AGAINST"
any matter and will be disregarded in any calculation of "votes cast".
Any proxy which is returned by a stockholder properly completed and which
is not revoked will be voted at the meeting in the manner specified therein.
Unless contrary instructions are given, the persons designated as proxy holders
in the accompanying proxy card (or their substitutes) will vote FOR the election
of the Board of Directors' nominees and FOR proposal 2, and in the proxyholders'
discretion with regard to all other matters. Any unmarked proxies, including
those submitted by brokers or nominees, will be voted in favor of the proposals
and the nominees for the Board of Directors, as indicated in the accompany proxy
card.
1
<PAGE> 5
The cost of preparing, assembling and mailing this material will be borne
by Versar. In addition to solicitation by mail, solicitations may be made by
personal interview, telephone, and telegram by officers and regular employees of
the Company or its subsidiaries, acting without other than regular compensation.
It is anticipated that banks, brokerage houses, and other custodians, nominees,
and fiduciaries will forward this material to beneficial owners of shares
entitled to vote at the meeting, and such persons will be reimbursed for the
out-of-pocket expenses incurred by them in this connection.
The Annual Report of the Company for fiscal year 1995 (including financial
statements), the Notice of Annual Meeting, this Proxy Statement, and the
enclosed proxy card were initially mailed in a single envelope to holders of the
Common Stock as of the Record Date on or about October 12, 1995.
PRINCIPAL SHAREHOLDERS
The table below sets forth, as of September 1, 1995, the only persons known
by the Company to be the beneficial owners of more than 5% of the outstanding
shares of Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND NATURE PERCENT
OF BENEFICIAL OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS OF STOCK
<S> <C> <C>
Dr. Michael Markels, Jr.(1) 846,384 17.6%
6850 Versar Center
Springfield, VA 22151
Dr. Robert L. Durfee(1) 671,306 13.9%
6850 Versar Center
Springfield, VA 22151
Versar, Inc., Employee Savings and Stock 622,390 12.9%
Ownership Plan(2)
Benjamin M. Rawls(1) 283,682 5.9%
6850 Versar Center
Springfield, VA 22151
</TABLE>
Based upon copies of reports furnished Versar, the Company believes that
all reports required to be filed by persons subject to Section 16 of the
Securities Exchange Act of 1934, and the rules and regulations thereunder, have
been timely filed except that two reports on Form 5's reporting annual
transactions which were required to be filed by August 14, 1995 by John P.
Horton and Thomas S. Rooney were not filed until August 17th and August 24th
respectively, and one report on Form 4 reporting a sale which was required to be
filed by Michael Markels, Jr., in October 1994 was not filed until January 6,
1995.
- ---------------
(1) For a description of the nature of the beneficial ownership of Drs.
Markels and Durfee, see "SECURITY HOLDINGS OF MANAGEMENT". The information
with respect to shares of Common Stock held by Drs. Markels and Durfee are
based upon filings with the Securities and Exchange Commission.
(2) All of the 622,390 shares of Common Stock held by the Employee Savings
and Stock Ownership Plan ("ESSOP") are allocated to individual ESSOP
participants' accounts and are voted by those participants. The ESSOP
Trustees have investment power over all shares of Common Stock held by the
ESSOP. The ESSOP Trustees are Michael Markels, Jr., Benjamin M. Rawls and
James C. Dobbs. Each disclaims beneficial ownership of the Common Stock held
by the ESSOP. The information with respect to shares of Common Stock held by
the ESSOP is based upon filings with the Securities and Exchange Commission
and a report by the Company's Stock Transfer Agent.
2
<PAGE> 6
PROPOSAL NO. 1
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
The Board of Directors of the Company recommends the election of the
persons named below who will be nominated to serve as directors of Versar until
the fiscal year 1996 Annual Meeting of Stockholders and until their successors
have been duly elected and qualified. The persons named in the proxy will vote
for the election of the nominees named below unless authority is withheld. All
of the nominees are presently directors of the Company and have served as such
for the time indicated opposite his name. If for any reason any of the persons
named below should become unavailable to serve, an event that management does
not anticipate, proxies will be voted for the remaining nominees and such other
person or persons as may be designated by the Board of Directors.
<TABLE>
<CAPTION>
SERVED AS
NAME DIRECTOR BUSINESS EXPERIENCE AND AGE
- ----------------------- ------------------- -----------------------------------------------
<S> <C> <C>
Benjamin M. Rawls 1991 to the present Chairman of the Board of Versar since November
1993, President and Chief Executive Officer
of Versar since April 1991; President and
Chief Executive Officer of Rawls Associates,
Inc., a management consulting firm, from
April 1988 to March 1991; President and Chief
Executive Officer of R-C Holding, Inc., (now
Air & Water Technologies Corporation) from
July 1987 to April 1988; Chairman of Metcalf
& Eddy, Inc., a subsidiary of
Research-Cottrell, from 1984 to April 1988; a
director of Sarnia Corporation. Age 54.
Michael Markels, Jr. 1969 to the present Co-founder of the Company; Chairman Emeritus of
the Board; retired former Chairman of the
Board from April 1991 to November 1993;
President, Chief Executive Officer and
Chairman of the Board from 1969 to March
1991; a director of Sarnia Corporation. Age
69.
Robert L. Durfee 1969 to the present Co-founder of the Company; Executive Vice
President of the Company since 1986 and
President of GEOMET Technologies, Inc., a
subsidiary of the Company since 1991. Age 59.
Gerald T. Halpin 1969 to the present President and Chairman of the Board of
WEST*GROUP, Inc., a real estate development
and construction firm, and its predecessor,
since 1970; a director of Sarnia Corporation.
Age 72.
M. Lee Rice 1969-1976; 1983 to Business consultant since 1986; between 1983
the present and 1986, President of the Shipbuilders
Council of America, the trade association of
principal shipbuilders and ship repairers;
between 1972 and 1983, President and Chief
Executive Officer of Ogden Transportation
Corporation and director of its parent, Ogden
Corporation, a diversified manufacturer and
services company. Age 70.
John P. Horton 1987 to the present Chairman of the Board of Growth Financial
Corporation from 1983 to 1994; President and
Chief Executive Officer of Rokalor, Inc., a
management consulting firm from 1981;
Assistant Administrator of the United States
Environmental Protection Agency. Age 70.
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
SERVED AS
NAME DIRECTOR BUSINESS EXPERIENCE AND AGE
- ----------------------- ------------------- -----------------------------------------------
<S> <C> <C>
John E. Gray 1992 to the present Director and President of Integrex System
Corporation; Chairman of Micro Technologies,
Inc.; Chairman of IEA of Japan Co., Ltd.,
since 1981; between 1985 to 1990 he was
President and Chief Operating Officer and
Vice Chairman of the Board of Directors of
ERC International, Inc., Chairman and Chief
Executive Officer of ERC Environmental and
Energy Services Co., Inc., from 1988 to 1990;
a director of Abacus Controls, Andrulis
Research Corporation, Dynamac Corporation,
Energy Resources International, Ensycon
International, Gallagher Marine Systems,
Inc.; Scientech, Inc., and Microcel
Technology Inc. Age 73.
Charles I. Judkins, Jr. 1992 to the present President and Chief Executive Officer of Sarnia
Corporation, the Company's former real estate
holding company, since June 1994; business
consultant from June 1993 to present; retired
former Senior Vice President of Versar from
August 1992 to May 1993; Senior Vice
President and Chief Financial Officer from
July 1991 to August 1992; President of GEOMET
Technologies, Inc., a subsidiary of the
Company from 1986 to 1991; a director of
Sarnia Corporation. Age 64.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of Versar has standing Executive, Audit,
Compensation and Nominating Committees.
The members of the Executive Committee are Mr. Rawls (Chairman), Dr.
Markels, Dr. Durfee and Mr. Rice. The primary duty of the Executive Committee is
to act in the Board's stead when the Board is not in session, during which time
the Committee possesses all the powers of the Board in the management of the
business and affairs of the Company, except as otherwise limited by law.
The Audit Committee, composed exclusively of directors who are not
employees of the Company, consist of Messrs. Rice (Chairman), Gray and Judkins.
This committee's primary responsibilities are to provide oversight of the
Company's accounting and financial controls, review the scope of and procedures
to be used in the annual audit, review the financial statements and results of
the annual audit, and evaluate the performance of the independent accountants
and the Company's financial and accounting personnel.
The Compensation Committee, the members of which are Messrs. Horton
(Chairman), Halpin, Rice and Gray, reviews and adjusts compensation paid to the
President of the Company and all Executive Officers, and administers the
Company's Cash Bonus Plan, Incentive Stock Option Plan and the Non-Qualified
Stock Option Plan.
The Nominating Committee, the members of which are Dr. Markels (Chairman),
Dr. Durfee, Mr. Rawls and Mr. Gray, develops criteria for Board membership and
proposes Board members who meet the criteria for the annual election of
directors. The Committee also identifies potential Board members to fill
vacancies which may occur between annual stockholder meetings. Stockholders may
submit nominees for the Board of Directors to the Committee in writing to the
Committee at the Company's Springfield office.
4
<PAGE> 8
BOARD AND COMMITTEE MEETINGS
During fiscal 1995, the Board of Directors met four times. The Executive
Committee of the Board of Directors met one time. The Audit Committee met four
times. The Nominating Committee met once. The Compensation Committee did not
meet. All directors of the Company attended at least 75% of all meetings of the
Board and committees on which they served except Mr. Gray who attended 50% of
the meetings of the full Board.
DIRECTORS' COMPENSATION AND CERTAIN TRANSACTIONS
Directors who are not employees of the Company are paid an annual fee of
$3,000 plus an attendance fee of $1,000 for each meeting of the Board and of its
committees. Under the 1992 Versar Stock Option Plan, on each anniversary of the
effective date of the Plan (November 19) each non-employee Director will receive
1,000 Non-Qualified Stock Options if he or she has served less than one year as
a Director or 500 Non-Qualified Stock Options if he or she has served a longer
term. The exercise price of such options is the price of the Company's Common
Stock on the date the option is granted.
Under a 12-month lease that expired on June 30, 1994, Mr. Judkins leased
two properties to GEOMET Technologies, Inc., a subsidiary of the Company, for
use as laboratory space at a monthly rental of $3,000. This lease was extended
on a month to month basis at a rent of $1,000 per month per property. In fiscal
1995, Mr. Judkins received approximately $7,000 under this arrangement. Under
the terms of the original agreement the Company or GEOMET Technologies was
required to purchase the properties from Mr. Judkins for its fair market value
or $372,000, whichever is higher. On July 18, 1994, this agreement was modified
so that Mr. Judkins agreed to sell the properties and the difference, if any,
between the sale price and $372,000 would be paid to Mr. Judkins in three
installment payments through January 1996. One property was sold in August 1994
and the second property was sold on November 1994. Under this amended agreement,
Mr. Judkins received $60,000 in fiscal year 1995.
On June 1, 1993, Mr. Judkins entered into a three year Consulting Agreement
with the Company to provide advice regarding business, financial and marketing
services of up to three days per month. Effective July 1, 1994, upon Mr.
Judkins' assumption of duties as President and CEO of Sarnia Corporation, the
Company's obligations under a Consulting Agreement with Mr. Judkins were assumed
by Sarnia Corporation, the former real estate subsidiary of Versar which was
spun-off to Versar's shareholders on June 30, 1994. Mr. Judkins was compensated
at the rate of $528.00 per day totalling $38,561 in fiscal year 1995 for such
services.
On December 29, 1993, Dr. Markels entered into a Retirement Agreement with
the Company pursuant to which he will receive from January 1, 1994 through
February 28, 1996 $90,000 per year as a consultant and for a non-compete
agreement which will run through December 28, 1996.
On July 16, 1993, Dr. Markels entered into a Loan Agreement ("Loan
Agreement") with the Company permitting him to borrow from the Company up to
$100,000, limited to $25,000 in any one quarter. Dr. Markels is required to pay
interest at the same rate as defined in the Company's Revolving Loan and
Security Agreement. To secure the loan Dr. Markels is required to pledge Versar
Common Stock equal to twice the value of any loan. All loan amounts must be
fully repaid at the end of the Company's fiscal year unless otherwise extended
by the Company's Chief Executive Officer. As of September 1, 1995, Dr. Markels
was not obligated to the Company under this Loan Agreement.
5
<PAGE> 9
SECURITY HOLDINGS OF MANAGEMENT
The following table sets forth certain information regarding the ownership
of Versar's Common Stock by the Company's directors and each executive officer
named in the Summary Compensation Table and the Company's directors and
executive officers as a group, as of September 1, 1995.
<TABLE>
SHARES OF COMMON STOCK
BENEFICIALLY OWNED
AS OF SEPTEMBER 1,
INDIVIDUAL OR GROUP 1995(1)
<CAPTION>
NUMBER PERCENT
<S> <C> <C>
Michael Markels, Jr.(2) 846,284 17.6%
Robert L. Durfee(3) 671,306 13.9%
Gerald T. Halpin(4) 23,250 *
M. Lee Rice 0 *
John P. Horton(5) 8,100 *
Benjamin M. Rawls(6) 283,682 5.9%
Charles I. Judkins, Jr.(7) 64,268 1.3%
John E. Gray 10,000 *
Thomas S. Rooney(8) 103,839 2.1%
Lawrence A. White(9) 68,552 1.4%
Gayaneh Contos(10) 99,199 2.0%
James C. Dobbs(11) 26,772 *
All directors and executive officers as a group (13
persons)(12) 2,218,186 41.1%
</TABLE>
- ---------------
* Less than 1%
(1) For the purposes of this table, beneficial ownership has been determined in
accordance with the provisions of Rule 13d-3 under the Securities Exchange
Act of 1934, as amended, under which, in general, a person is deemed to be
the beneficial owner of a security if he or she has or shares the power to
vote or to direct the voting of the security or the power to dispose or to
direct the disposition of the security, or if he or she has the right to
acquire beneficial ownership of the security within 60 days of September 1,
1995. With respect to ownership of shares which are held in the ESSOP but
allocated to individuals' accounts, the unaudited information is current as
of September 1, 1995.
(2) Includes 425,900 shares owned by adult children of Dr. Markels as to which
he shares voting and investment power. Dr. Markels is a Trustee of the
ESSOP and as such he has shared investment power over 622,390 shares and
shared voting power over 622,390 shares held by the ESSOP, none of which
are included in the above table. Dr. Markels disclaims beneficial ownership
of the ESSOP shares.
(3) Includes 34,000 shares owned by adult children of Dr. Durfee as to which he
shares voting and investment power. Includes 19,000 shares that may be
purchased upon the exercise of stock options exercisable within 60 days
after September 1, 1995.
(4) Includes 20,925 shares owned by adult children of Mr. Halpin as to which he
has sole voting and investment power.
(5) Includes 4,200 shares in a Profit Sharing Plan in which Dr. Horton is the
sole beneficiary and over which he has voting power. Includes 2,000 shares
that may be purchased upon the exercise of stock options within 60 days
after September 1, 1995.
(6) Includes 272,400 shares that may be purchased upon the exercise of stock
options exercisable within 60 days after September 1, 1995. Mr. Rawls is a
Trustee of the ESSOP and as such he has shared
6
<PAGE> 10
investment power over 622,390 shares and shared voting power over 622,390
shares held by the ESSOP, none of which are included in the above table.
Mr. Rawls disclaims beneficial ownership of the ESSOP shares.
(7) Includes 35,400 shares that may be purchased upon the exercise of stock
options within 60 days after September 1, 1995.
(8) Includes 98,000 shares that may be purchased upon the exercise of stock
options within 60 days after September 1, 1995.
(9) Includes 64,000 shares that may be purchased upon the exercise of stock
options within 60 days after September 1, 1995.
(10) Includes 57,101 shares that may be purchased upon the exercise of stock
options within 60 days after September 1, 1995.
(11) Includes 24,100 shares that may be purchased upon the exercise of stock
options within 60 days after September 1, 1995. Mr. Dobbs is a Trustee of
the ESSOP and as such he has shared investment power over 622,390 shares
and shared voting power over 622,390 shares held by the ESSOP, none of
which are included in the above table. Mr. Dobbs disclaims beneficial
ownership of the ESSOP shares.
(12) Includes 583,201 shares that may be purchased upon the exercise of stock
options within 60 days after September 1, 1995. Excludes 622,390 shares
held by the ESSOP.
7
<PAGE> 11
EXECUTIVE COMPENSATION
CASH COMPENSATION
The following table sets forth information on compensation paid by Versar
for services rendered in all capacities during the three fiscal years ended June
30, 1995, to the Company's Chief Executive Officer and the four most highly
compensated executive officers of the Company (the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
AWARDS
(a) (b) (c) (d) (e) (g) (i)
SECURITIES
OTHER ANNUAL UNDERLYING
NAME, PRINCIPAL POSITION, SALARY BONUS COMPENSATION OPTIONS/SARS ALL OTHER
AND FISCAL YEAR $ $ $(1) # COMPENSATION
<S> <C> <C> <C> <C> <C>
Benjamin M. Rawls
Chairman of the Board, President and
Chief Executive Officer
1995 $234,896 0 0 0 $ 8,326(2)
1994 209,365 0 0 0 10,596(2)
1993 181,300 0 0 0 6,642(2)
Thomas S. Rooney
Executive Vice President
1995 $165,518 0 0 12,500 $ 9,919(3)
1994 162,419 0 0 12,500 19,317(3)
1993 141,548 0 0 17,500 11,083(3)
Lawrence A. White
Executive Vice President
1995 $160,000 0 0 20,000 $ 7,460(4)
1994 154,500 0 0 20,000 7,667(4)
1993 147,302 0 0 20,000 5,094(4)
Gayaneh Contos
Senior Vice President
1995 $153,296 $8,000 0 0 $ 8,189(5)
1994 151,385 0 0 17,500 8,330(5)
1993 143,926 0 0 10,000 6,957(5)
James C. Dobbs
Vice President, General Counsel and
Secretary
1995 131,462 $5,000 0 15,000 $ 5,610(6)
1994 125,000 0 0 3,500 11,749(6)
1993 113,325 0 0 0 36,317(6)
</TABLE>
- ---------------
(1) No amounts are shown in "Other Annual Compensation" column for fiscal years
1995, 1994 and 1993 because the aggregate amount of any perquisites or other
personal benefits for each of the Named Executive Officers did not exceed
the lesser of (i) $50,000 or (ii) 10 percent of the combined fiscal years
1995, 1994 or 1993 salary and bonus for the Named Executive Officer and the
Company does not pay any other type of compensation that would have to be
reported under this column.
8
<PAGE> 12
(2) The amounts shown in this column for Mr. Rawls are comprised of the
following: (i) in 1995 a payment of $2,541 for insurance premiums on term
life insurance, in 1994 a payment of $2,202 for insurance premiums on term
life insurance, and in 1993 payment of $1,990 for insurance premiums on term
life insurance; and, (ii) in 1995 contributions of $5,785 to the Company
401(K) Plan on behalf of Mr. Rawls, in 1994 contribution of $8,394 to the
Company 401(K) Plan on the behalf of Mr. Rawls; and in 1993 contribution of
$4,652 to the Company 401(K) Plan on the behalf of Mr. Rawls.
(3) The amounts shown in this column for Mr. Rooney are comprised of the
following: (i) in 1995 a payment of $4,050 for insurance premiums on term
life insurance, in 1994 a payment of $3,834 for insurance premiums on term
life insurance, and in 1993 a payment of $2,835 for insurance premiums on
term life insurance; (ii) in 1995 a contribution of $5,869 to the Company
401(K) Plan on behalf of Mr. Rooney, in 1994 a contribution of $6,272 to the
Company 401(K) Plan on the behalf of Mr. Rooney, and in 1993 a contribution
of $2,404 to the Company 401(K) Plan on the behalf of Mr. Rooney; and, (iii)
in 1994 a payment of $9,211 for moving expenses and in 1993 a payment of
$5,844 for moving expenses.
(4) The amounts shown in this column for Mr. White are comprised of the
following: (i) in 1995 a payment of $1,555 for insurance premiums on term
life insurance, in 1994 a payment of $1,487 for insurance premiums on term
life insurance, and in 1993 a payment of $1,127 for insurance premiums on
term life insurance; (ii) in 1995 a contribution of $5,905 to the Company
401(K) Plan on behalf of Mr. White, in 1994 a contribution of $6,180 to the
Company 401(K) Plan on the behalf of Mr. White, and in 1993 a contribution
of $917 to the Company 401(K) Plan on the behalf of Mr. White; and, (iii) in
1993 a payment of $3,050 in moving expenses.
(5) The amounts shown in this column for Mrs. Contos are comprised of the
following: (i) in 1995 a payment of $2,304 for insurance premiums on term
life insurance, in 1994 a payment of $2,275 for insurance premiums on term
life insurance, and in 1993 a payment of $3,357 for insurance premiums on
term life insurance; and (ii) in 1995 a contribution of $5,885 to the
Company 401(K) Plan on behalf of Ms. Contos, in 1994 a contribution of
$6,055 to the Company 401(K) Plan on the behalf of Mrs. Contos and in 1993 a
contribution of $3,600 to the Company 401(K) Plan on the behalf of Mrs.
Contos.
(6) The amounts shown in this column for Mr. Dobbs are comprised of the
following: (i) in 1995 a payment of $1,210 for life insurance premiums on
term life insurance, in 1994 a payment of $914 for insurance premiums on
term life insurance, and in 1993 a payment of $653 for insurance premiums on
term life insurance; (ii) in 1995 a contribution of $4,400 to the Company
401(K) Plan on behalf of Mr. Dobbs; and, (iii) in 1994 a payment of $10,835
in moving expenses and in 1993 a payment of $35,664 in moving expenses.
9
<PAGE> 13
The following tables set forth certain information with respect to stock
options granted to the Named Executive Officers and exercised under the
Company's 1992 Stock Option Plan during the fiscal year ended June 30, 1995.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT
ASSUMED ANNUAL
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
(a) (b) (c) (d) (e) (f) (g)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANTED EXERCISE OR
UNDERLYING OPTIONS TO EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED#(1) FISCAL YEAR(2) ($ PER SHARE)(3) DATE 5%($) 10%($)
<S> <C> <C> <C> <C> <C> <C>
Benjamin M. Rawls 0 0 -- -- -- --
Thomas S. Rooney 12,500 15.2% 3.3750 11/13/04 $68,718 $109,424
Lawrence A. White 20,000 24.3% 2.8750 5/2/05 $93,661 $149,140
Gayaneh Contos 0 0 0 0 -- --
James C. Dobbs 15,000 18.2% 3.0625 8/29/04 $74,827 $119,150
</TABLE>
- ---------------
(1) The options were granted for a term of 10 years, 20% of which were vested
immediately and 80% of which vest equally over a four year period, subject
to earlier termination in certain events related to termination of
employment. The 1992 Incentive Stock Option Plan includes a
change-in-control provision providing for immediate vesting upon the
happening of certain events defined as a change-in-control of the Company.
The option plan grants the Compensation Committee broad discretion to change
or modify the material terms of the option grants.
(2) The total number of options granted to employees in fiscal year 1995 was
82,500.
(3) The exercise price equals the fair market value of the underlying Common
Stock on the date of the grant for all options disclosed in this table.
10
<PAGE> 14
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED ON VALUE OPTIONS/SARS AT 6/30/95 IN-THE-MONEY
EXERCISE REALIZED (#) OPTIONS/SARS AT 6/30/95
NAME (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(1)
<S> <C> <C> <C> <C>
Benjamin M. Rawls 0 0 272,400/5,600 $885,300/18,200
Thomas S. Rooney 0 0 98,000/44,500 $318,500/114,625(2)
Lawrence A. White 0 0 64,000/46,000 $208,000/149,500
Gayaneh Contos 0 0 57,101/12,000 $185,578/39,000(3)
James C. Dobbs 0 0 24,100/14,400 $78,325/46,800
</TABLE>
- ------------------
(1) On June 30, 1995, the closing price of the Company's Common Stock was $3.25.
(2) 12,500 options granted to Mr. Rooney were out-of-the money which means that
the option exercise price for those options exceeded the closing price of
the Company's Common Stock on the American Stock Exchange on June 30, 1995.
(3) 15,000 options granted Mrs. Contos were out-of-the money which means that
the option exercise price for those options exceeded the closing price of
the Company's Common Stock on the American Stock Exchange on June 30, 1995.
EMPLOYMENT CONTRACTS
In May 1994, the Company entered into an Employment Agreement with Mr.
Rawls for a period of twenty-four months which provides for him to serve as
Chairman, President and Chief Executive Officer at a base salary of $235,000
plus any fringe benefits available to executive officers of the Company
including any incentive compensation programs which may be in effect. If Mr.
Rawls' employment is terminated during the term of the employment agreement,
except for voluntary termination or termination for cause, he will be paid 12
months salary and fringe benefits and shall be entitled to immediate vesting of
all stock options. If there is a change in circumstances (change in title,
salary reduction, or change in geographic location) or change in control of the
Company (as defined in the agreement), Mr. Rawls can terminate the agreement and
will be paid 18 months salary and fringe benefits and shall be entitled to
immediate vesting of all stock options.
In May 1994, the Company entered into an Employment Agreement with Mr.
Rooney for a period of twenty-four months which provides for him to serve as
Executive Vice President at a base salary of $150,000 plus any fringe benefits
available to executive officers of the Company including any incentive
compensation programs which may be in effect. This agreement supersedes and
extends an existing February 1993 employment agreement. If Mr. Rooney's
employment is terminated for any reason during the term of the employment
agreement, except for termination for cause or voluntary termination, he will be
paid 18 months salary and fringe benefits and shall be entitled to immediate
vesting of all stock options. If there is a change in circumstances (change in
title, salary reduction or change in geographic location) or change in control
of the Company (as defined in the agreement), Mr. Rooney will be paid 18 months
salary and fringe benefits and shall be entitled to immediate vesting of all
stock options.
11
<PAGE> 15
STOCK PERFORMANCE GRAPH
The following graph and table show a comparison of the cumulative total
return since June 30, 1990 on $100 invested in Versar Common Stock, the Standard
& Poors 500 Stock Index and a Peer Group consisting of ten companies and Versar
(EA Engineering, Science and Technology, Inc.; Earth Technology Corporation;
Ecology & Environment, Inc.; EMCON; Groundwater Technology, Inc.; GZA
Environmental Technologies, Inc.; Harding Associates, Incorporated; ICF Kaiser
International, Inc.; TRC Companies, Inc.; and Roy F. Weston, Inc.), which in
each case includes reinvestment of dividends where applicable.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG VERSAR, INC., THE S & P 500 INDEX AND A PEER GROUP
<TABLE>
<CAPTION>
6/90 6/91 6/92 6/93 6/94 6/95
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
VERSAR, INC. 100 61 53 58 78 79
PEER GROUP 100 86 76 62 57 49
S & P 500 100 107 122 138 140 177
</TABLE>
* $100 INVESTED ON 6/30/90 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING JUNE 30.
12
<PAGE> 16
CUMULATIVE SHAREHOLDER'S RETURN TABLE
<TABLE>
CUMULATIVE SHAREHOLDER'S RETURN
LAST TRADING DATE IN FISCAL YEARS
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
Versar, Inc. $100 $61 $53 $58 $78(1) $79
Peer Group $100 $86 $76 $62 $57 $49
S&P 500 $100 $107 $122 $138 $140 $177
</TABLE>
- ---------------
1. On June 30, 1994, Versar spun-off its real estate subsidiary, Sarnia
Corporation (formerly Versar Virginia, Inc.) to Versar's Shareholders on a
one to one share basis. Because of its negative equity position after the
spin-off Sarnia Common Stock had a zero tax basis.
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee ("Committee") of the Board of Directors has
furnished the following report on executive compensation for fiscal year 1995.
The Committee provides oversight of all policies under which compensation is
paid to the Company's executive officers and stock options are granted. The
Committee consists entirely of non-employee directors.
EXECUTIVE COMPENSATION PHILOSOPHIES AND POLICIES
The Committee's executive compensation policies are designed to provide
competitive levels of compensation that integrate pay with performance,
recognize individual initiative and achievements and assist the Company in
attracting and retaining qualified executives. Target levels of the executive
officers' overall compensation are intended to be consistent with others'
compensation in the Company's industry, but are also weighed toward results that
contribute to increases in shareholder value and enhance the Company's long-term
(three years or greater) performance.
THE COMPANY'S EXECUTIVE COMPENSATION PROGRAM INCLUDES THREE COMPONENTS:
<TABLE>
<C> <S>
(1) Base salary;
(2) Annual Bonus (stock or cash); and
(3) Long-term incentive awards.
- Base Salary -- ranges of appropriate base salaries are determined by analysis of
salary data on positions of comparable responsibility within the environment services
sector. Committee approval of individual salary changes is based upon performance of
the executive against the Company's financial and strategic objectives and of the
position of the executive in the competitive salary range.
- Annual Bonus -- bonuses are paid pursuant to an executive incentive bonus plan
established each year by the Board of Directors for key employees and managers of the
Company and its subsidiaries. Under the Plan, an incentive pool is created each fiscal
year and is distributed if certain financial goals for the Company are met. The amount
of the incentive pool distributed depends on the extent to which the Company's
consolidated net income before taxes exceeds targeted amounts as set forth in the
bonus pool schedule.
- Long-Term Incentive Awards -- the purpose of this element of the executive
compensation program is to link management pay with the long-term interest of
shareholders, rather than only the performance in one single fiscal year. The
Committee is currently using incentive stock options from the Company's 1992 Stock
Option Plan for key employees and managers. In determining annual stock option grants,
the Committee bases its decision on the individual's performance or potential to
improve shareholder value.
</TABLE>
In determining compensation for fiscal year 1995, the Committee took into
account the performance of the Company's stock, the financial performance of the
Company and the fact it continued to need to rebuild
13
<PAGE> 17
sales volume and backlog. The Committee also factored in the significant
financial drag of the former laboratory operations and Versar's ownership of
real estate in Springfield, Virginia which were in the process of being disposed
of or spun-off at the end of fiscal year 1994.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
In the four years since Mr. Rawls joined Versar, he has voluntarily
foregone $125,000 in salary. In fiscal 1994, the Committee decided to enter into
an 24 month employment with Mr. Rawls pursuant to which he would be paid
$235,000 per year. This employment agreement was to fulfill a commitment made
when Mr. Rawls joined the Company in 1991. Despite superior individual
performance, in view of the Company's fiscal year 1994 financial performance Mr.
Rawls base salary remained unchanged and no bonus or stock options were granted.
Mr. Rawls base salary in the employment agreement is the same amount he receive
when he started with the Company in 1991.
COMPENSATION FOR NAMED EXECUTIVE OFFICERS
The performances of the individual Named Executive Officers listed in the
Summary Compensation Table for fiscal year 1994 were also reviewed by the
Committee. The Committee, granted no salary increases in fiscal year 1995.
Bonuses, in the form of stock, were issued to Mrs. Contos and Mr. Dobbs for
$8,000 and $5,000, respectively. Mr. Rooney was granted an option to purchase
12,500 shares pursuant to the Compensation Committee's decision the previous
year and Mr. White was granted options to purchase 20,000 shares pursuant to his
original employment offer. In addition, Mr. Dobbs was granted an option to
purchase 15,000 shares.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
John P. Horton
Gerald T. Halpin
M. Lee Rice
John E. Gray
PROPOSAL NO. 2
APPOINTMENT OF ACCOUNTANTS
The Board of Directors considers it desirable that its appointment of the
firm of Arthur Andersen LLP ("AA") as independent accountants of the Company for
fiscal year 1996 be ratified by the Stockholders.
The Board of Directors recommends a vote "FOR" this proposal and the
enclosed proxy will be so voted unless the Proxy specifically indicates
otherwise.
CHANGE IN CERTIFYING ACCOUNTANTS
Price Waterhouse LLP ("PW") served as the Company's principal accountant
for the fifteen fiscal years ended June 30, 1995. The Company determined not to
renew the engagement of PW on October 2, 1995 and selected AA as the Company's
principal accountant and replacement for PW. This decision was made following a
review of the Company's accounting costs in recent years and a bid solicitation
process initiated by the Board of Directors following such review. Solicitations
were distributed to seven firms, including PW, and six responses were received
by the Company. The Audit Committee of the Company's Board of Directors
recommended, after reviewing the responses, and the Board of Directors approved,
the selection of AA as the Company's principal accountant in replacement of PW,
effective October 2, 1995. Representatives of PW will be present at the Annual
Meeting, will be given an opportunity to make a statement if they so desire, and
will be available to respond to appropriate questions from the Stockholders.
Representatives of AA will also attend the Annual Meeting.
PW's report on the Company's financial statements for each of the last two
fiscal years did not contain an adverse opinion or a disclaimer of opinion, nor
was it qualified or modified as to uncertainty, audit scope, or accounting
principles.
14
<PAGE> 18
During the Company's two most recent fiscal years and the subsequent
interim period preceding the replacement of PW, there were no disagreements with
PW on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which disagreement(s), if not
resolved to the satisfaction of PW, would have caused it to make a reference to
the subject matter of the disagreement(s) in connection with its report.
On May 31, 1995 the Company filed a Form 10-K/A for the purpose of
restating its financial statements for the year ended June 30, 1994 and Forms
10-Q/A for the purpose of restating its financial statements for the quarters
ended September 30, 1994 and December 31, 1994. The restatement was a result of
a review, initiated by PW, of the accounting and financial treatment of the
divestiture of the Company's real estate holdings to Sarnia Corporation and
resulting spin-off of Sarnia to the Stockholders of Company as of June 30, 1994.
The financial information initially disclosed as part of the divestiture and
spin-off had reflected and was consistent with PW's advice during the
transaction. Although the Sarnia divestiture was completed on a legal and tax
basis, and Sarnia now operates as a separate, independent business, PW, as a
result of further review of the Company's accounting treatment of the
divestiture, informed the Company that from an accounting standpoint the
divestiture did not transfer the risks of ownership to Sarnia principally
because of the Company's guarantee of Sarnia's $12.5 million of debt at June 30,
1994. PW and the Company's Audit Committee consulted about the issue. On May 19,
1995, following the consultations and resolution of the issue PW withdrew its
report on the Company's financial statements for the year ended June 30, 1994,
pending the restatement of such financial statements to include Sarnia's results
of operations and assets and liabilities. In connection with such restatement,
PW issued a new auditor's report, which, in light of the resolution to PW's
satisfaction of its discussions with the Company as to the accounting treatment
of the Sarnia divestiture, was not qualified or modified in any respect. The
Company has authorized PW to respond fully to any inquiries by AA concerning the
restatement.
Except as explained above, PW did not advise the Company during the
Company's two most recent fiscal years or during the subsequent interim period
preceding the Company's decision not to extend PW's engagement of any
"reportable events" as defined in subparagraph (a)(i)(v) of Item 304 of
Regulation S-K under the Securities and Exchange Act of 1934.
As stated above, the Company has engaged AA, independent accountant, as the
principal accountant to audit the consolidated financial statements of the
Company for fiscal year 1996.
In connection with evaluating the position taken by PW in early 1995
regarding the appropriate accounting treatment of the divestiture of the
Company's real estate holdings to, and the spin-off of, Sarnia, the Company
consulted with representatives of AA as to its analysis of the accounting
treatment of the Sarnia transaction. The Company was orally informed by AA that
it agreed with PW's analysis in all material respects and no written report was
ever furnished by AA to the Company in regard to this consultation.
Except as set forth above, during the two most recent fiscal years and
during the interim period prior to engaging AA, neither the Company nor anyone
on its behalf consulted AA regarding either: (a) the application of accounting
principles to a specified transaction, either completed or proposed; or the type
of audit opinion that might be rendered on the Company's financial statements,
and neither a written report nor oral advice was provided to the Company that AA
concluded was an important factor considered by the Company in reaching a
decision as to the accounting, auditing or financial reporting issue; or (b) any
matter that was the subject of either a disagreement or any other event
described above.
Following the Board's decision on October 2, 1995, the Company provided
notice to PW and AA of its decision to replace PW with AA and received a
response from PW to the statements of the Company in accordance with the
requirements of Item 304(a) of Regulation S-K.
1996 ANNUAL MEETING
It is presently contemplated that the 1996 Annual Meeting of Stockholders
will be held on or about November 14, 1996. In order for any appropriate
stockholder proposal to be considered for inclusion in the proxy materials for
the 1996 Annual Meeting of Stockholders, it must be received by the Secretary of
the Company no later than June 21, 1996, by certified mail, return receipt
requested.
15
<PAGE> 19
OTHER MATTERS
As of the date of this Proxy Statement, management of the Company has no
knowledge of any matters to be presented for consideration at the Annual Meeting
other than those referred to above. If any other matters properly come before
the Annual Meeting, the persons named in the accompanying proxy intend to vote
such proxy, to the extent entitled, in accordance with their best judgment.
By Order of the Board of Directors,
/s/ JAMES C. DOBBS
---------------------------
James C. Dobbs
Secretary
October 12, 1995
16
<PAGE> 20
VERSAR, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 16, 1995
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby authorizes Michael Markels, Jr., Benjamin M. Rawls
and Robert L. Durfee, and each of them individually, with power of
substitution, to vote and otherwise represent all of the shares of Common Stock
of Versar, Inc. (the "Company"), held of record by the undersigned, at the
Annual Meeting of Stockholders of the Company to be held at the Company's
offices, 6850 Versar Center, Springfield, Virginia, on Thursday, November 16,
1995 at 10:15 a.m. local time, and any adjournment(s) thereof, as indicated on
the reverse side hereof.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement dated in each case, October 12, 1995. All
other proxies heretofore given by the undersigned to vote shares of the
Company's Common Stock are expressly revoked.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DESCRIBED ON THE
REVERSE HEREOF BY THE STOCKHOLDER. IF NOT OTHERWISE DIRECTED, THIS PROXY WILL
BE VOTED FOR ALL NOMINEES FOR DIRECTORS LISTED IN PROPOSAL 1 AND FOR PROPOSALS
REFERRED TO IN ITEMS 2 AND 3 ON THE REVERSE SIDE.
(Continued, and to be signed and dated on the reverse side)
VERSAR, INC.
P.O. BOX 11078
NEW YORK, N.Y. 10203-0078
<PAGE> 21
<TABLE>
<S> <C> <C> <C>
(1) Election of Directors VOTE FOR all nominees / / WITHHOLD authority to vote / / *EXCEPTIONS / /
listed below for all nominees listed below
</TABLE>
Nominees: Benjamin M. Rawls, Michael Markels, Jr., Robert L. Durfee, Gerald
T. Halpin, M. Lee Rice, John P. Horton, Charles I. Judkins, Jr., John E. Gray
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided
below).
*Exception
------------------------------------------------------------------
(2) Ratification of the appointment of Arthur Andersen as independent
accountants for fiscal year 1996.
FOR / / AGAINST / / ABSTAIN / /
(3) In their discretion upon such other matters as may properly come before the
meeting or any adjournment(s) thereof and upon matters incident to the
conduct of the meeting.
Change of Address and / /
or Comments Mark Here
Please sign exactly as your name
appears herein. If you are signing
for the stockholder, please sign
the stockholder's name, your name
and state the capacity in which you
are signing.
Date: ______________________, 1995
----------------------------------
----------------------------------
(Signature)
PLEASE INDICATE VOTES / /
(X) IN BLACK OR BLUE INK.
PLEASE COMPLETE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE.
