SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
VERSAR, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 54-0852979
(State or other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
6850 Versar Center
Springfield, Virginia 22151
(Address of Principal Executive Offices) (Zip Code)
VERSAR, INC.
1996 STOCK OPTION PLAN
(Full Title of the Plan)
Benjamin J. Rawls Please address a copy of
President and Chief all communications to:
Executive Officer
Versar, Inc. Elizabeth Hardy Noe
6850 Versar Center Paul, Hastings, Janofsky & Walker LLP
Springfield, Virginia 22151 Suite 2400
(Name and Address of 600 Peachtree St., N.E.
Agent for Service) Atlanta, Georgia 30308
Telephone: (404) 815-2400
(703) 750-3000
(Telephone number, including
area code, of agent for service)
CALCULATION OF REGISTRATION FEE
===============================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share (1) Price (1) Fee
- -------------------------------------------------------------------------------
Common Stock
Par Value
$0.01 per 1,000,000
share shares $[ 3.593] $[3,593,000] $[1,122.81]
===============================================================================
(1) Estimated solely for the purpose of calculating the amount of the
registration fee in accordance with Rule 457 under the Securities
Act of 1933, as amended. The offering price is calculated
pursuant to Rule 457(c) based on the average of the high and low
sales prices ($3.593 per share) of the Common Stock of the
Registrant on the American Stock Exchange on January 21, 1997.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Bonus Plan Information*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the registration statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part
I of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents are incorporated herein by reference:
(a) The Registrant's latest annual report filed pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act");
(b) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by
the Registrant's annual report referred to in (a) above; and
(c) The description of the Registrant's common stock, par value
$.01 per share (the "Common Stock"), which is contained in its
registration statement on Form 10 filed under Section 12 of the
Exchange Act, including any amendments or reports filed for the
purpose of updating such description.
All documents subsequently filed with the Commission by the
Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act prior to the filing of a post-effective amendment to
this Registration Statement which indicates that all securities
offered have been sold or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference
into this Registration Statement and to be a part hereof from the
date of filing of such documents.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
provides for the indemnification of officers and directors under certain
circumstances against expenses incurred in successfully defending against a
claim and authorizes Delaware corporations to indemnify their officers and
directors under certain circumstances against expenses and liabilities incurred
in legal proceedings involving such persons because of their being or having
been an officer or director. The Certificate of Incorporation and By-laws of
the Registrant provide for indemnification of its officers and directors to the
full extent authorized by such section.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The exhibits filed as part of this Registration Statement are as
follows:
Exhibit Number Description of Exhibit
-------------- ----------------------
4 Versar, Inc. 1996 Stock Option Plan.
5 Opinion of Paul, Hastings, Janofsky & Walker LLP as to the legality
of the Common Stock registered hereunder.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants,
relating to the use of their report contained in Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1996.
23.2 Consent of Paul, Hastings, Janofsky & Walker LLP to the filing and
use of their opinion relating to the legality of the securities.
Such consent is contained in their opinion filed as Exhibit 5 to
this Registration Statement.
24 Power of Attorney authorizing Benjamin M. Rawls and James C. Dobbs
to sign amendments to this Registration Statement on behalf of
officers and directors of the Registrant (contained on signature
page of Registration Statement).
Item 9. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to provisions
pursuant to which the directors, officers or controlling persons may
be indemnified by the Registrant or otherwise, the Registrant has
been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy
as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Springfield,
State of Virginia, on this 29th day of January, 1997.
VERSAR, INC.
By: /s/ Benjamin M. Rawls
-------------------------------------
Benjamin M. Rawls
Chairman of the Board of Directors,
President and Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Benjamin M. Rawls and James C. Dobbs,
jointly and severally, his attorneys-in-fact, each with power of substitution
for him in any and all capacities, to sign any amendments to this Registration
Statement, and to file the same, with the exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated.
/s/ Benjamin M. Rawls January 29, 1997
--------------------------- -----------------
Benjamin M. Rawls, Chairman Date
of the Board of Directors,
President and Chief Executive
Officer and Director
(Principal Executive Officer)
/s/ Michael Markels, Jr. January 29, 1997
-------------------------- -----------------
Michael Markels, Jr. Date
Chairman Emeritus and Director
/s/ Lawrence W. Sinnott January 29, 1997
-------------------------- -----------------
Lawrence W. Sinnott, Vice Date
President, Chief Financial
Officer and Principal Accounting Officer
[Signatures continued on next page]
[Signatures continued from preceding page]
/s/ Robert L. Durfee January 29, 1997
----------------------------- -----------------
Robert L. Durfee, Executive Date
Vice President and Director
/s/ John E. Gray January 29, 1997
----------------------------- -----------------
John E. Gray Date
Director
/s/ John P. Horton January 29, 1997
---------------------------- -----------------
John P. Horton Date
Director
/s/ Charles I. Judkins, Jr. January 29, 1997
---------------------------- -----------------
Charles I. Judkins, Jr. Date
Director
/s/ M. Lee Rice January 29, 1997
---------------------------- -----------------
M. Lee Rice Date
Director
/s/ Thomas J. Shields January 29, 1997
---------------------------- -----------------
Thomas J. Shields Date
Director
EXHIBIT INDEX
Exhibit Description
------- -----------
4 Versar, Inc. 1996 Stock Option Plan.
5 Opinion of Paul, Hastings, Janofsky & Walker LLP as to the
legality of the Common Stock registered hereunder.
23.1 Consent of Arthur Andersen LLP, Independent Public Accountants,
relating to the use of their report contained in Registrant's
Annual Report on Form 10-K for the fiscal year ended June 30,
1996.
23.2 Consent of Paul, Hastings, Janofsky & Walker LLP to the filing
and use of their opinion relating to the legality of the
securities. Such consent is contained in their opinion filed
as Exhibit 5 to this Registration Statement.
24 Power of Attorney authorizing Benjamin M. Rawls and James C.
Dobbs to sign amendments to this Registration Statement on
behalf of officers and directors of the Registrant (contained
on signature page of Registration Statement).
VERSAR, INC.
1996 STOCK OPTION PLAN
As adopted by the Board of Directors on
September 12, 1996
and by the stockholders on
November 14, 1996.
VERSAR, INC.
------------
1996 STOCK OPTION PLAN
----------------------
1. PURPOSE.
--------
The purpose of the Plan is to attract and retain persons of
high calibre and potential as employees, directors and service providers of
Versar, Inc. and its affiliates, motivate and reward good performance, and
encourage such employees and service providers to continue to exert their best
efforts on behalf of Versar, Inc. and its affiliates. The Plan is intended to
provide opportunities for stock ownership by such employees, directors and
service providers in order to increase the proprietary interests in the
company. This will be accomplished by providing awards to eligible
individuals of nonqualified and incentive stock options.
2. DEFINITIONS.
-----------
Unless otherwise defined herein or the context otherwise
requires, the capitalized terms used herein shall have the following meanings:
(a) "Administrator" shall mean the committee, which
shall be administrating the Plan from time to time in the discretion of the
Board, as described in Section 4 of the Plan.
(b) "Affiliate" means any Directly Related Company and
any entity in which the Corporation or a Directly Related Company has at least
a fifty percent (50%) ownership interest.
(c) "Board" shall mean the Board of Directors of the
Corporation.
(d) "Change in Control of the Corporation" shall mean:
(i) The acquisition in one or more transactions
by any "Person" (as the term person is used for purposes of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act")), of
"Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the
1934 Act) of forty percent (40%) or more of the combined voting power of the
Corporation's then outstanding voting securities (the "Voting Securities"),
provided, however, that for purposes of this definition, Voting Securities
acquired directly from the Corporation by any Person shall be excluded from
the determination of such Person's Beneficial Ownership of Voting Securities
(but such Voting Securities shall be included in the calculation of the total
number of Voting Securities then outstanding); or
(ii) The individuals who are members of the
Incumbent Board, cease for any reason to constitute at least two-thirds of the
Board; or
(iii) Approval by the stockholders of the
Corporation of (i) a merger or consolidation involving the Corporation if the
stockholders of the Corporation immediately before such merger or
consolidation do not own, directly or indirectly, immediately following such
merger or consolidation, more than sixty percent (60%) of the combined voting
power of the outstanding voting securities of the corporation resulting from
such merger or consolidation in substantially the same proportion as their
ownership of the Voting Securities immediately before such merger or
consolidation, or (ii) a complete liquidation or dissolution of the
Corporation or an agreement for the sale or other disposition of all or
subsequently all of the assets of the Corporation.
Notwithstanding the foregoing, a Change in Control
shall not be deemed to occur solely because forty percent (40%) or more of the
then outstanding Voting Securities is acquired by (i) a trustee or other
fiduciary holding securities under one or more employee benefit plans
maintained by the Company or any of its Affiliates, or (ii) any corporation,
which, immediately prior to such acquisition, is owned directly or indirectly
by the stockholders of the Company in the same proportion as their ownership
of stock in the Company immediately prior to such acquisition.
Moreover, notwithstanding the foregoing, a Change
in Control shall not be deemed to occur solely because any Person (the
"Subject Person") acquired Beneficial Ownership of more than the permitted
amount of the outstanding Voting Securities as a result of the acquisition of
Voting Securities by the Company which, by reducing the number of Voting
Securities outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Person, provided, that if a Change in
Control would occur (but for the operation of this sentence) as a result of
the acquisition of Voting Securities by the Company, and after such share
acquisition by the Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities which increases the percentage of the then
outstanding Voting Security Beneficially Owned by the Subject Person, then a
Change in Control shall occur.
(e) "Code" shall mean the Internal Revenue Code of
1986, as amended.
(f) "Common Stock" shall mean, unless otherwise
specifically provided, the common stock of the Corporation and any class of
common shares into which such common stock may hereafter be converted.
(g) "Corporation" shall mean Versar, Inc., a Delaware
corporation.
(h) "Directly Related Company" means a corporation
related to the Corporation within the meaning of Sections 524(e) and (f) of
the Code.
(i) "Director" shall mean a person who is a member of
the Board or a member of the Board of Directors of a Affiliate, whether or not
such person is also an Employee.
(j) "Disability" shall mean such physical or mental
condition affecting an Optionee as determined by the Administrator in its sole
discretion.
(k) "Employee" shall mean an individual who is employed
(within the meaning of Section 3401 of the Code and the regulations
thereunder) by the Corporation or a Affiliate (i.e., an individual with
respect to whom income taxes must be withheld from compensation). Directors
who are employed by the Corporation or a Affiliate are considered to be
"Employees" for purposes of this Plan.
(l) "Exercise Price" shall mean the price per Share of
Common Stock, determined by the Administrator, at which an Option may be
exercised.
(m) "Fair Market Value" shall mean the value of one (1)
Share of Common Stock, determined as follows:
(1) If the Shares are traded on an exchange or the
National Market System ("NMS") of the NASDAQ System, (A) if listed on an
exchange, the closing price as reported or as composite transactioned on the
date of valuation or, if no sale occurred on that date, then the mean between
the closing bid and asked prices on such exchange on such date, and (B) if
traded on the NMS, the last sales price on the date of valuation or, if no
sale occurred on such date, the mean between the highest bid and lowest asked
prices as of the close of business on the date of valuation, as reported in
the NASDAQ System;
(2) If the Shares are traded over-the-counter on
the NASDAQ System, the mean between the bid and asked prices on the NASDAQ
System at the close of business on the date of valuation; and
(3) If neither (1) nor (2) applies, the fair
market value as determined by the Administrator in good faith. Such
determination shall be conclusive and binding on all persons.
If the date of valuation is not a business day, the price on the last business
day preceding the date of valuation shall be utilized.
(n) "Incentive Stock Option" shall mean an option
described in Section 422(b) of the Code.
(o) "Incumbent Board" shall mean the individuals who as
of November 14, 1996 are members of the Board and any individual becoming a
director subsequent to November 14, 1996 whose election, or nomination for
election by the Corporation's stockholders, was approved by a vote of at least
two-thirds of the directors then comprising the Incumbent Board; provided,
however, that any individual who is not a member of the Incumbent Board at the
time he or she becomes a member of the Board shall become a member of the
Incumbent Board upon the completion of two full years as a member of the
Board; provided, further, however, that notwithstanding the foregoing, no
individual shall be considered a member of the Incumbent Board if such
individual initially assumed office (i) as a result of either an actual or
threatened "election contest" (within the meaning of Rule 14a-11 promulgated
under the 1934 Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a "Proxy Contest"),
or (ii) with the approval of the other Board members, but by reason of any
agreement intended to avoid or settle a Proxy Contest.
(p) "Nonqualified Stock Option" shall mean an option
not described in Section 422(b), 423(b) or 424(b) of the Code.
(q) "Option" shall mean any stock option granted
pursuant to the Plan. All Options shall be granted on the date the
Administrator takes the necessary action to approve the grant. However, if
the minutes or appropriate resolution of the Administrator provide that an
Option is to be granted as of another date, the date of grant shall be that
other date.
(r) "Option Agreement" shall mean a written stock
option agreement evidencing a particular Option.
(s) "Optionee" shall mean an Employee, Director or
Service Provider who has received an Option.
(t) "Plan" shall mean this Versar, Inc. 1996 Stock
Option Plan, as it may be amended from time to time.
(u) "Purchase Price" shall mean the Exercise Price
times the number of Shares with respect to which an Option is exercised.
(v) "Retirement" shall mean the voluntary cessation of
employment by an Employee after qualifying for early or normal retirement
under any pension plan or profit sharing or stock bonus plan of the
Corporation or Affiliate. If an Employee is not covered by any such plan,
"Retirement" shall mean voluntary termination of employment after the Employee
has attained age sixty-five (65) and after the employee has attained the tenth
(10th) anniversary of his or her last preceding date of hire.
(w) "Service Provider" means an individual who is
neither an Employee nor Director of the Company or any Affiliate but who
provides the Company or any Affiliate, in the opinion of the Administrator,
substantial and important services.
(x) "Share" shall mean one (1) share of Common Stock,
adjusted in accordance with Section 10 of the Plan (if applicable).
3. EFFECTIVE DATE.
--------------
The Plan was adopted by the Board effective September 12, 1996,
subject to the approval of the Corporation's stockholders pursuant to Section
15 hereof. The Plan shall terminate as provided in Section 9 below.
4. ADMINISTRATION.
--------------
(a) Committee.
---------
The Plan shall be administered, in the discretion of the
Board from time to time, by a committee which shall be appointed by the Board.
The committee shall consist of not less than two (2) members of the Board who
shall qualify as "non-employee directors" within the meaning of Rule 16b-3
under the 1934 Act ("Rule 16b-3") or any successor rule or regulation and as a
"disinterested director" for purposes of the Code. The Board may from time to
time remove members from, or add members to, such committee. Vacancies on the
committee, however caused, shall be filled by the Board. The Board shall
appoint one of the members of the committee as Chairman. The committee, as
Administrator, shall hold meetings at such times and places as it may
determine. Acts of a majority of the Administrator at which a quorum is
present, or acts reduced to or approved in writing by the unanimous consent of
the members of the Administrator, shall be the valid acts of the
Administrator.
(b) Powers.
------
The Administrator shall from time to time at its discre-
tion select the Employees, Directors and Service Provides who are to be
granted Options, determine the number of Shares to be optioned to each
Optionee and designate such Options as Incentive Stock Options or Nonqualified
Stock Options; provided that Incentive Stock Options may be granted only to
Employees (including Directors who are also Employees). The Administrator
shall have full power, discretion and authority to interpret, construe and
administer the Plan and any part thereof, and its interpretations and
constructions thereof and actions taken thereunder shall be, except as
otherwise determined by the Board, final, conclusive and binding on all
persons for all purposes. Without limitation of the foregoing, the
Administrator's power shall include the power to set additional terms with
respect to the grant of Options, determine the transferability or non-
transferability of such Options, determine the vesting schedule with respect
to such Options (which may include Options that are immediately vested upon
grant) and set such other terms, restrictions and privileges with respect to
any Options granted as are not inconsistent with the terms of this Plan. No
member of the Administrator shall be liable for any action or determination
made in good faith with respect to the Plan or any Option granted thereunder.
5. PARTICIPATION.
-------------
(a) Eligibility.
-----------
The Optionees shall be those Employees, Directors and
Service Providers of the Corporation to whom Options may be granted from time
to time by the Administrator. The Administrator pursuant to this Plan may
grant Incentive Stock Options and Nonqualified Stock Options to Employees and
Nonqualified Stock Options to Service Providers and Directors who are not
Employees.
(b) Ten-Percent Shareholders.
------------------------
An Employee who owns more than ten percent (10%) of the
total combined voting power of all classes of outstanding stock of the
Corporation, its parent or any of its Subsidiaries shall not be eligible to
receive an Incentive Stock Option unless (i) the Exercise Price of the Shares
subject to such Incentive Stock Option is at least one hundred ten percent
(110%) of the Fair Market Value of such Shares on the date of grant and (ii)
such Incentive Stock Option by its terms shall not be exercisable more than
five (5) years from the date of grant.
(c) Stock Ownership.
---------------
For purposes of Section 5(b) above, in determining stock
ownership, an Employee shall be considered as owning the stock owned, directly
or indirectly, by or for his or her brothers and sisters, spouse, ancestors
and lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be considered as being owned
proportionately by or for its shareholders, partners or beneficiaries. Stock
with respect to which such Employee holds an Option shall not be counted.
(d) Outstanding Stock.
-----------------
For purposes of Section 5(b) above, "outstanding stock"
shall include all stock actually issued and outstanding immediately after the
grant of the Incentive Stock Option to the Optionee. "Outstanding stock"
shall not include shares authorized for issue under outstanding Options held
by the Optionee or by any other person.
6. STOCK.
-----
The stock subject to Options granted under the Plan shall be
Shares of the Corporation's authorized but unissued or reacquired Common
Stock. The aggregate number of Shares which may be issued upon exercise of
Options under the Plan shall not exceed One Million (1,000,000). The number
of Shares subject to Options outstanding at any time shall not exceed the
number of Shares remaining available for issuance under the Plan. Whenever an
Optionee's rights to exercise an Option as to any Shares shall cease for any
reason before he or she has exercised such Option as to such Shares, the
Option shall be deemed terminated to that extent and such Shares shall again
be subject to Option under the Plan. The limitations established by this
Section 6 shall be subject to adjustment in the manner provided in Section 10
hereof upon the occurrence of an event specified therein.
7. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------
(a) Stock Option Agreements.
-----------------------
Options shall be evidenced by written Option Agreements
in such form as the Administrator shall from time to time determine. Such
Option Agreements shall comply with and be subject to the terms and conditions
set forth herein. Each Option shall state whether it is an Incentive Stock
Option or a Nonqualified Stock Option.
(b) Number of Shares.
----------------
Each Option shall state the number of Shares to which it
pertains and shall provide for the adjustment thereof in accordance with the
provisions of Section 10 hereof.
(c) Exercise Price.
--------------
Each Option shall state the Exercise Price. The Exercise
Price in the case of any Incentive Stock Option shall not be less than the
Fair Market Value on the date of grant and, in the case of an Incentive Stock
Option granted to an Optionee described in Section 5(b) hereof, shall not be
less than one hundred ten percent (110%) of the Fair Market Value on the date
of grant. The Exercise Price in the case of any Nonqualified Stock Option
shall not be less than fifty percent (50%) of the Fair Market Value on the
date of grant. The Exercise Price shall be subject to adjustment as provided
in Section 10 hereof.
(d) Medium and Time of Payment.
--------------------------
The Purchase Price shall be payable in full in United
States dollars or by certified check upon the exercise of the Option;
provided, however, that if the applicable Option Agreement so provides, or the
Administrator, in its sole discretion otherwise approves thereof, the Purchase
Price may be paid, (i) by the surrender of Shares in good form for transfer,
owned by the person exercising the Option and having a Fair Market Value on
the date of exercise equal to the Purchase Price, (ii) through delivery of a
promissory note by the Optionee evidencing the Optionee's obligation to make
future cash payments to the Corporation, which promissory note shall be
payable as determined by the Corporation (but in no event later than five
years after the date hereof), shall be secured by a pledge of the Shares of
Common Stock purchased and shall bear interest at a rate established by the
Administrator, but not less than the applicable Federal Rate under Section
1274 of the Code, (iii) simultaneous exercise of the Option and sale of shares
of Common Stock acquired, pursuant to a brokerage or similar arrangement
approved in advance by the Administrator, and use of the proceeds from sale as
payment of the purchase price of such Common Stock, (iv) in any combination of
cash, Shares and promissory notes, as long as the sum of the cash so paid,
note delivered and the Fair Market Value of the Shares so surrendered equals
the Purchase Price or (v) any such other method as the Administrator shall
approve in its sole discretion.
In the event the Corporation determines that it is
required to withhold state or Federal income tax as a result of the exercise
of an Option, as a condition to the exercise thereof, an Optionee must make
arrangements satisfactory to the Corporation to enable it to satisfy such
withholding requirements. Payment of such withholding requirements may be
made, in the discretion of the Administrator, (i) in cash, (ii) by delivery of
Shares registered in the name of Optionee, or by the Corporation not issuing
such number of Shares subject to the Option having a Fair Market Value at the
time of exercise equal to the amount to be withheld or (iii) any combination
of (i) and (ii) above.
(e) Term and Non-transferability of Options.
---------------------------------------
Each Option shall state the time or times when all or
part thereof becomes exercisable. No Option shall be exercisable more than
ten (10) years from the date it was granted and no Incentive Stock Option
granted to an Optionee described in Section 5(b) hereof shall be exercisable
after the expiration of five (5) years from the date it was granted. During
the lifetime of the Optionee, the Option shall be exercisable only by the
Optionee and shall not be assignable or transferable, unless otherwise
determined by the Administrator. In the event of the Optionee's death, the
Option shall not be transferable by the Optionee, unless otherwise determined
by the Administrator, other than by will or the laws of descent and
distribution.
(f) Cessation of Employment by Employee; etc.
----------------------------------------
After an Optionee ceases to be an Employee, his/her
rights to exercise any unexercised Option then held by the Optionee shall be
determined as provided in this Section 7(f). No Option, however, may be
exercised after the Optionee ceases to be an Employee except to the extent
that the Option was exercisable at the time of such cessation or to such
greater extent as shall be approved by the Administrator in connection with an
Option grant. No Option may be exercised after its term expires or is
otherwise cancelled.
(i) Retirement. If an Optionee ceases to be an
Employee because of Retirement (and not on account of misconduct as determined
below), such Optionee may, subject to the restrictions referred to in Section
7(f) above, exercise the Option at any time within three months after
cessation of employment, but, except as provided in the applicable Option
Agreement, only to the extent that, at the date of cessation of employment,
the Optionee's right to exercise such Option had accrued pursuant to the terms
of the applicable Option Agreement and had not previously been exercised.
(ii) Death. If an Optionee dies while he or she
is an Employee or having ceased to be an Employee but during the period during
which he or she could have exercised the Option under this Section 7, and has
not fully exercised the Option, then the Option may be exercised in full,
subject to the restrictions referred to in Section 7(f) above, at any time
within twenty-four months after the Optionee's death by the executor or
administrator of his or her estate or by any person or persons who have
acquired the Option directly from the Optionee by bequest or inheritance, but,
except as otherwise provided in the Option Agreement, only to the extent that,
at the date of death, the Optionee's right to exercise such Option had accrued
and had not been forfeited pursuant to the terms of the applicable Option
Agreement and had not been previously exercised.
(iii) Disability. If a Optionee ceases active
service as a Employee by reason of Disability, such Optionee shall have the
right, subject to the restrictions referred to in Section 7(f) above, to
exercise the Option at any time within six months after such cessation of
employment, but, except as provided in the applicable Option Agreement, only
to the extent that, at the date of such cessation of employment, the
Optionee's right to exercise such Option had accrued pursuant to the terms of
the applicable Option Agreement and had not previously been exercised.
(iv) Misconduct. If an Optionee resigns or is
discharged or terminated on account of misconduct, his or her Option shall
terminate and shall no longer be exercisable upon notice of such resignation,
discharge or termination. The existence of misconduct shall be determined by
the Administrator in its sole discretion, such determination to be made in a
manner consistent with the then policies of the Corporation as adopted by the
Board from time to time.
(v) Other Reasons. If an Optionee ceases to be
an Employee for any reason other than those mentioned above in subsections
(i), (ii), (iii) or (iv), the Optionee shall have the right, subject to the
restrictions referred to in Section 7(f) above, to exercise the Option at any
time within three months following such cessation, discharge or termination,
but, except as otherwise provided in the applicable Option Agreement, only to
the extent that, at the date of cessation, discharge or termination, the
Optionee's right to exercise such Option had accrued pursuant to the terms of
the applicable Option Agreement and had not previously been exercised.
An Optionee's employment with the Corporation
shall not be considered as having been terminated while the Optionee is on
military or sick leave or other bona fide leave of absence (such as temporary
employment by the Government) if the period of such leave does not exceed
ninety (90) days, or, if longer, so long as the Optionee's right to
re-employment with the Corporation is guaranteed either by statute or by
contract. Where the period of such leave exceeds ninety (90) days and where
the Optionee's rights to re-employment is not guaranteed either by statute or
by contract, the Optionee's employment will be deemed to have terminated on
the ninety-first (91st) day of such leave.
(g) Cessation of Service by Service Provider or
-------------------------------------------
Director (Other than a Director who is Also an
----------------------------------------------
Employee).
---------
After an Optionee ceases to be a Service Provider or
Director (other than a Director who is also an Employee), his/her rights to
exercise any unexercised Option then held by the Optionee shall be determined
as provided in this Section 7(g). No Option, however, may be exercised after
the Optionee ceases to be a Service Provider or Director, except to the extent
that the Option was exercisable at the time of such cessation or to such
greater extent as shall be approved by the Administrator in connection with an
Option grant. No Option may be exercised after its term expires or is
otherwise cancelled. If an Optionee ceases to be a Service Provider or
Director because of death, disability, or termination of service for any
reason, other than resignation or discharge or termination for misconduct as
described below, such Optionee may, subject to the restrictions referred to
above, exercise the Option at any time within six months after cessation of
service, but, except as provided in the applicable Option Agreement, only to
the extend that, at the date of cessation of service, the Optionee's right to
exercise such Option had accrued pursuant to the terms of the applicable
Option Agreement and had not previously been exercised. Notwithstanding the
above, if an Optionee's service to the Corporation as a Service Provider or
Director (who is not an Employee) is terminated through resignation or
discharge or termination on account of misconduct, as determined by the
Administrator in its sole discretion, his or her Option shall terminate and
shall no longer be exercisable upon notice of such resignation, discharge or
termination. All Directors who are also Employees shall be governed by the
terms of Section 7(f) in lieu of this Section 7(g).
(h) Rights as a Stockholder.
-----------------------
No one shall have rights as a stockholder with respect to
any Shares covered by his or her Option until the date of the issuance of a
stock certificate for such Shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property),
distributions or other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 10 hereof.
(i) Modification, Extension and Renewal of Options.
----------------------------------------------
Within the limitations of the Plan, the Administrator may
modify, extend or renew outstanding Options or accept the cancellation of
outstanding Options (to the extent not previously exercised) for the granting
of new Options in substitution therefor. The foregoing notwithstanding, no
modification of an Option shall, without the consent of the Optionee, alter or
impair any rights or obligations under any Option previously granted.
(j) Other Provisions.
----------------
The Option Agreements authorized under the Plan may
contain such other provisions not inconsistent with the terms of the Plan as
the Administrator shall deem advisable (including, without limitation,
restrictions upon the exercise of the Option or subjecting the shares issued
pursuant to the exercise of an Option to rights of repurchase by the
Corporation).
(k) Substitution of Option.
----------------------
Notwithstanding any inconsistent provisions or limits
under the Plan, in the event the Corporation acquires (whether by purchase,
merger or otherwise) all or substantially all of the outstanding capital stock
or assets of another corporation by any reorganization or other transaction
qualifying under Section 425 of the Code, the Administrator may, in accordance
with the provisions of that Section, substitute options under the Plan for
options under the plan of the acquired company provided (i) the excess of the
aggregate fair market value of the shares subject to an option immediately
after the substitution over the aggregate option price of such shares is not
more than the similar excess immediately before such substitution and (ii) the
new option does not give persons additional benefits, including any extension
of the exercise period.
8. LIMITATION ON ANNUAL AWARDS.
---------------------------
The aggregate Fair Market Value (determined as of the
time the Option is granted) of stock for which Incentive Stock Options
exercisable for the first time by an Optionee may be granted during any
calendar year (under all incentive stock options plans of the Corporation and
its Subsidiaries) may not exceed $100,000, but the value of stock for which
Incentive Stock Options may be granted to an Optionee in a given year may
exceed $100,000. If the $100,000 limit is exceeded, the portion of the
Incentive Stock Option that exceeds that limit shall constitute a Nonqualified
Stock Option but this shall not cause the terms of the Option Agreement which
created the Incentive Stock Option to cease to apply or be modified.
9. TERM OF PLAN.
------------
Options may be granted pursuant to the Plan until the
expiration of the Plan on September 12, 2006.
10. RECAPITALIZATIONS.
-----------------
Subject to any required action by stockholders, the number of
Shares covered by the Plan as provided in Section 6 hereof, the number of
Shares covered by each outstanding Option and the Exercise Price thereof shall
be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a subdivision or consolidation of Shares or the
payment of a stock dividend (but only of Common Stock) or any other increase
or decrease in the number of issued Shares effected without receipt of
consideration by the Corporation.
Subject to any required action by stockholders, if the
Corporation is the surviving corporation in any merger or consolidation, each
outstanding Option shall pertain and apply to the securities to which a holder
of the number of Shares subject to the Option would have been entitled. If
the Corporation is not the surviving corporation in any merger or
consolidation, then, except to the extent governed by Section 12 hereof, any
outstanding Options shall be fully vested and exercisable until five days
prior to such merger or consolidation (but shall terminate thereafter) unless
provisions are made in connection with such transaction for the continuance of
the Plan or the assumption or the substitution for outstanding Options of new
options covering the stock of a successor employer corporation, or a parent or
Affiliate thereof, with appropriate adjustments as to the number and kind of
shares and prices. A dissolution or liquidation of the Corporation shall
cause each outstanding Option to terminate.
To the extent that the foregoing adjustments relate to
securities of the Corporation, such adjustments shall be made by the
Administrator, whose determination shall be conclusive and binding on all
persons.
Except as expressly provided in this Section 10 or in Section
12, the Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class, the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger or consolida-
tion or spin-off of assets or stock of another corporation, and any issue by
the Corporation of shares of stock of any class, or securities convertible
into shares of stock of any class, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number or Exercise Price of
Shares subject to an Option.
The grant of an Option pursuant to the Plan shall not affect in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure, to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
11. SECURITIES LAW REQUIREMENTS.
---------------------------
(a) Securities Act Requirements.
---------------------------
No Option granted pursuant to this Plan shall be
exercisable in whole or in part, and the Corporation shall not be obligated to
sell any Shares subject to any such Option, if such exercise and sale would,
in the opinion of counsel for the Corporation, violate the Securities Act of
1933 (or other Federal or State statutes having similar requirements) as it
may be in effect at that time.
As a condition to the issuance of any Shares upon
exercise of an Option under this Plan, the Administrator may require the
Optionee to furnish a written representation that he is acquiring the shares
for investment and not with a view to distribution to the public. Such
representations shall be required in cases where, in the opinion of the
Administrator, they are necessary to enable the Corporation to comply with the
provisions of the Securities Act of 1933, and any shareholder who gives such
representation shall be released from it at such a time as the shares to which
it applies are registered pursuant to the Securities Act of 1933.
(b) Listing and Regulatory Requirements.
-----------------------------------
Each Option shall be subject to the further requirements
that, if at any time the Administrator shall determine in its discretion that
the listing or qualification of the shares of stock subject to such Option
under any securities exchange requirements or under any applicable law, or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the granting of such
Option or the issue of Shares thereunder, such Option may not be exercised in
whole or in part unless and until such listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Administrator.
(c) Section 16.
----------
With respect to persons subject to Section 16 of the 1934
Act, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the 1934 Act. To the extent
any provision of the Plan or action by the Administrator fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Administrator.
12. CHANGE IN CONTROL.
-----------------
In the event any Change in Control of the Corporation should
occur, then the Administrator may in its sole discretion, without obtaining
stockholder approval, take one or more of the following actions to the extent
not inconsistent with other provisions of the Plan;
(a) Accelerate the exercise dates of any outstanding
Option, or make the Option fully vested and exercisable;
(b) Pay cash to any or all owners of Options in
exchange for the required cancellation of their outstanding Options; or
(c) Make any other adjustments or amendments to the
Plan and outstanding Options and substitute new Options for outstanding
Options.
To the extent the Code would not permit the provisions of the
foregoing paragraph to apply to any Incentive Stock Option granted under this
Plan, then such Option, immediately upon the occurrence of the event described
in the foregoing paragraph, shall be treated for all purposes of the Plan as a
Nonqualified Stock Option and shall be immediately exercisable as provided in
the foregoing paragraph. Notwithstanding the foregoing, in no event shall any
option be exercisable after the date of termination of the exercise period of
such option specified in Section 7(f) of this Plan.
13. AMENDMENT AND TERMINATION OF THE PLAN.
-------------------------------------
The Board may amend or terminate the Plan at any time, but no
amendment shall be made without the approval of the stockholders of the
Corporation if stockholder approval under Section 422 of the Code or Rule 16b-
3 would be required or if it would change the material terms or performance
goals that were previously approved by the Company stockholders, within the
meaning of Treasury Regulation Section 1.162-27(e)(4)(vi) or successor
provision (unless the Board determines that such approval is not necessary to
avoid loss of a deduction under Section 162(m) of the Code, such approval will
not avoid such a loss of deduction or such approval is not advisable). No
amendment of the Plan or any Option granted under the Plan shall impair any
Optionee's rights, without his or her consent, under any Option theretofore
granted under the Plan.
14. APPLICATION OF FUNDS.
--------------------
The proceeds received by the Corporation from the sale of
Common Stock pursuant to the exercise of an Option will be used for general
corporate purposes.
15. APPROVAL OF SHAREHOLDERS.
------------------------
The Plan shall be subject to approval by the affirmative vote
of the holders of a majority of the outstanding shares present and entitled to
vote at the annual meeting of stockholders of the Corporation following the
adoption of the Plan, to be held on November 14, 1996. Prior to such
approval, Options may be granted but shall not be exercisable, not even in the
event of a Change in Control of the Corporation.
16. EXECUTION.
---------
To record the adoption of the Plan by the Board on September
12, 1996, the Corporation has caused its authorized officers to affix the
corporate name and seal hereto.
VERSAR, INC.
By: /s/ James C. Dobbs
---------------------------
Name: James C. Dobbs
-------------------------
Title: V.P. & General Counsel
------------------------
[Seal]
February 4, 1997
20897.57615
Versar, Inc.
6850 Versar Center
Springfield, Virginia 22151
Re: Versar, Inc.
1996 Stock Option Plan
Registration Statement on Form S-8
Ladies and Gentlemen:
As counsel for Versar, Inc., a Delaware corporation (the
"Company"), you have requested our opinion in connection with the
preparation and filing with the Securities and Exchange Commission of a
Registration Statement on Form S-8 (the "Registration Statement")
registering 1,000,000 shares of the Company's common stock, par value
$0.01 per share, for issuance pursuant to the Company's 1996 Stock Option
Plan.
We have examined such records and documents and made such
examination of law as we have deemed relevant in connection with this
opinion. Based on the foregoing, we are of the opinion that the 1,000,000
shares covered by said Registration Statement, when issued in accordance
with the terms of the Prospectus forming a part of the Registration
Statement, will be legally issued, fully-paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit
to the above-referenced Registration Statement on Form S-8 of Versar, Inc.
Respectfully submitted,
/s/ Paul, Hastings, Janofsky & Walker LLP
-------------------------------------------
Paul, Hastings, Janofsky & Walker LLP
Exhibit 23.1
Consent of Independent Accountants
----------------------------------
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated September 16,
1996 included in Versar, Inc.'s Form 10-K for the year ended June 30, 1996 and
to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
------------------------
Arthur Anderson LLP
Washington, D.C.,
February 5, 1997
