def14a
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No.)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for use of the Commission only (as permitted by Rule 14a-6(e) (2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material Pursuant to §240.14a-12
VERSAR, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ No Fee Required
o Fee computed on table below per Exchange Act Rules 14a-6 (i) (1) 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:
o Fee paid previously with preliminary materials.
o 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:
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 Wednesday,
November 14, 2007, at 10:00 a.m. local time.
The matters scheduled for consideration at the meeting are the
election of directors and other matters described in the
enclosed Proxy Statement. We will also report to you on
Versars 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,
Paul J. Hoeper
Chairman of the Board
October 10, 2007
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 Companys offices,
6850 Versar Center, Springfield, Virginia 22151, on Wednesday,
November 14, 2007, at 10:00 a.m. local time for the
following purposes:
1. To elect nine directors to serve until the 2008 Annual
Meeting of Stockholders;
2. To ratify the appointment of Grant Thornton LLP as
independent accountants for fiscal year 2008; 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
September 28, 2007, will be entitled to notice of and to
vote at the meeting and any adjournments or postponements
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,
James C. Dobbs
Secretary
October 10, 2007
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.
VERSAR,
INC.
PROXY STATEMENT
ANNUAL MEETING OF
STOCKHOLDERS
NOVEMBER 14, 2007
GENERAL
This Proxy Statement and the enclosed proxy card are being
mailed on or about October 10, 2007, to stockholders
(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 2007 Annual Meeting of Stockholders (the Annual
Meeting) and any adjournment(s) or
postponement(s) thereof. The Annual Meeting will be held at
10:00 a.m. eastern standard time at the Companys
offices at 6850 Versar Center, Springfield, Virginia 22151, on
November 14, 2007. 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 delivering to the
Company a duly executed proxy bearing a later date. In addition,
if the person executing the proxy is present at the Annual
Meeting, he or she may revoke such proxy by voting his or her
shares in person. Proxies in the form enclosed, if duly signed
and received in time for voting, and not revoked, will be voted
at the Annual Meeting in accordance with the directions
specified therein.
On or about October 10, 2007, the Annual Report of the
Company for fiscal year 2007 (including financial statements),
the Notice of Annual Meeting, this Proxy Statement, and the
enclosed proxy card are being mailed in a single envelope to
holders of Versars Common Stock, par value $.01 per share
(Common Stock), at the close of business on
September 28, 2007 (the Record Date).
Record
Date and Voting Rights
Only holders of record of Common Stock on the Record Date are
entitled to notice of and to vote at the Annual Meeting and any
adjournment(s) or postponement(s) thereof. There were
8,798,323 shares of Common Stock outstanding and entitled
to vote as of the Record Date. Each share of Common Stock
entitles the holder 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 Companys Common
Stock entitled to vote at the Annual Meeting be present in
person or represented by proxy in order for a quorum to exist
for the transaction of business at that meeting. Abstentions and
broker non-votes (which occur if a broker or other
nominee does not have discretionary authority and has not
received voting instructions from the beneficial owner with
respect to the particular item) are counted for purposes of
determining the presence or absence of a quorum for the
transaction of business. Assuming that a quorum is present for
the Annual Meeting, then those nine nominees for director who
receive the highest number of votes cast will be elected.
Abstentions and broker non-votes will have no effect on the
outcome of the election of directors.
Proposal No. 2 must be approved by the affirmative
vote of a majority of the shares present in person or by proxy
at the Annual Meeting and entitled to vote thereon. For purposes
of Proposal No. 2, abstentions are counted for
purposes of calculating shares entitled to vote but are not
counted as shares voting and therefore have the effect of a vote
against such proposal. For purposes of Proposal No. 2,
broker non-votes are not counted as shares entitled to vote and
therefore have no effect with respect to such proposal.
1
Any proxy which is returned by a Stockholder properly completed
and which is not revoked will be voted at the Annual 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, FOR
Proposal No. 2 and in the proxy holders
discretion with regard to all other matters. Any unmarked
proxies, including those submitted by brokers (other than broker
non-votes) or custodians, nominees or fiduciaries, will be voted
in favor of the nominees for the Board of Directors and other
proposals, as indicated in the accompanying proxy card.
The cost of preparing, assembling and mailing all proxy
materials 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 additional
compensation. Versar anticipates that banks, brokerage houses,
and other custodians, nominees, and fiduciaries will forward
this material to beneficial owners of shares of Common Stock
entitled to vote at the Annual Meeting, and such persons will be
reimbursed by Versar for the out-of-pocket expenses incurred by
them in this regard.
Principal
Shareholders
The table below sets forth, as of September 28, 2007, the
only persons known by the Company to be the beneficial owners of
more than 5% of the outstanding shares of Common Stock.
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Amount and Nature
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Percent
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of Beneficial
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of
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Name and Address of Beneficial Owner
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Ownership
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Class of Stock
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Dr. Robert L. Durfee(1)
6850 Versar Center
Springfield, VA 22151
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565,988
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6.4
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%
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Marathon Capital Management(2)
4 North Park Drive, Suite 106
Hunt Valley, MD 21030
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505,900
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5.8
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%
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Perritt Capital Management(3)
300 S. Wacker Drive, Suite 2880
Chicago, IL 60606
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457,400
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5.2
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%
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Versar Employee 401(k) Plan(4)
6850 Versar Center
Springfield, VA 22151
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478,431
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5.4
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%
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(1) |
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For a description of the nature of the beneficial ownership of
Dr. Durfee, see SECURITY HOLDINGS OF
MANAGEMENT. The information with respect to shares of
Common Stock held by Dr. Durfee are based upon filings with
the Securities and Exchange Commission and information supplied
by Dr. Durfee. |
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(2) |
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The information with respect to shares of Common Stock held by
Marathon Capital Management, LLC, is based on filings with the
Securities and Exchange Commission. |
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(3) |
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The information shown is based on a jointly filed
Schedule 13G filed with the Securities and Exchange
Commission by Perritt Capital Management, Inc.; Perritt MicroCap
Opportunities Fund, Inc.; and Perritt Funds, Inc. |
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(4) |
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All of the shares of Common Stock held by the Versar Employee
401(k) Plan (401(k) Plan) are allocated to
individual 401(k) Plan participants accounts and are voted
by those participants. If the participants do not vote their
allocated shares, the Trustees have the power to vote those
shares. The 401(k) Plan Trustees have investment power over all
shares of Common Stock held by the 401(k) Plan. The 401(k) Plan
Trustees are Dr. Theodore M. Prociv and Lawrence W.
Sinnott. Each disclaims beneficial ownership of the Common Stock
held by the 401(k) Plan solely from their position as Trustee.
Such shares are not included in the ownership reported for
Dr. Prociv and Mr. Sinnott. The information with
respect to shares of Common Stock held by the 401(k) Plan is
based upon filings with the Securities and Exchange Commission,
a report from the 401(k) Plan Custodian and a report by the
Companys stock transfer agent. |
2
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 have been nominated by the Board of
Directors to serve as directors of Versar until the fiscal year
2008 Annual Meeting of Stockholders and until their successors
have been duly elected and qualified. The persons named in the
accompanying proxy will vote for the election of the nominees
named below unless authority is withheld. Each nominee is
presently a director of the Company and has served as such for
the time indicated opposite his or her 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.
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Served as
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Name
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Director
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Business Experience and Age
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Paul J. Hoeper
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2001 to the present
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Business consultant since February 2001; Assistant Secretary of
the Army for Acquisition, Logistics and Technology, from May
1998 to January 2001; Deputy Under Secretary of Defense,
International and Commercial Programs, from March 1996 to May
1998; President, Fortune Financial from 1994 to January 1996.
Age 61.
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Michael Markels, Jr.
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1969 to the present
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Independent consultant; Chairman of the Board, President and
Chief Executive Officer of Ocean Farming, Inc. from 1995 to
August 2001 and March 2002 to the present; Co-founder of the
Company; Chairman Emeritus of the Board of Versar; retired
former Chairman of the Board of Directors of Versar from April
1991 to November 1993; President, Chief Executive Officer, and
Chairman of the Board of Versar from 1969 to March 1991. Age 81.
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Robert L. Durfee
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1969 to the present
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Independent consultant; Co-founder of the Company; Executive
Vice President of the Company from 1986 to June 2004; and
President of GEOMET Technologies, LLC., a subsidiary of the
Company, from 1991 to June 2004. Age 71.
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Theodore M. Prociv
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1999 to the present
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President of Versar since November 1999; Chief Executive Officer
of Versar since July 2000; Deputy Assistant Secretary of the
Army from May 1998 to October 1999; Deputy Assistant to the
Secretary of Defense from April 1994 to April 1998. Age 59.
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James L. Gallagher
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2000 to the present
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President, Gallagher Consulting Group since September 1999;
President of Westinghouse Government and Environmental Services
from 1996 to 1999; Executive Vice President of Westinghouse
Government and Environmental Services from 1994 to 1996; Vice
President and General Manager, Westinghouse Government
Operations Business Unit 1992 to 1994; Age 70.
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Fernando V. Galaviz
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2000 to the present
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Chairman, President and Chief Executive Officer of The Centech
Group, Inc. from 1988 to the present. Age 72.
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3
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Served as
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Name
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Director
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Business Experience and Age
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Amoretta M. Hoeber
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2000 to the present
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President, AMH Consulting since 1992; Director, Strategic
Planning, TRW Federal Systems Group and TRW Environmental
Safety Systems, Inc., from 1986 to 1992; Deputy Under Secretary
U.S. Army from 1984 to 1986; Principal Deputy Assistant
Secretary, U.S. Army from 1981 to 1984. Age 65.
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Amir A. Metry
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2002 to the present
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Business consultant since 1995; part-time Versar employee from
1995 to April 2002; Founding Principal of ERM Program Management
Corp. from 1989 to 1995; and Vice President, Roy F. Weston from
1981 to 1989. Age 64.
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James V. Hansen
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2003 to the present
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President, Jim Hansen & Associates since January 2004; A
member of the Base Realignment and Closure Commission (BRAC)
from April 2005; United States Congressman for Utahs 1st
Congressional District from 1980 to 2002. Age 75.
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Committees
of the Board of Directors
The Board of Directors of Versar has standing Executive, Audit,
Compensation, and Nominating & Governance Committees.
During fiscal year 2007, the members of the Executive Committee
were Dr. Prociv (Chairman), Dr. Durfee,
Mr. Galaviz, Ms. Hoeber and Mr. Hoeper. The
primary duty of the Executive Committee is to act in the
Boards 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, which the Board of Directors has determined
is comprised exclusively of non-employee directors who are
independent, as defined by the American Stock Exchange listing
standards and the rules and regulations of the Securities and
Exchange Commission, from July 1, 2006 to February 6,
2007 consisted of Messrs. Gallagher (Chairman), Hoeper,
Galaviz and Dr. Metry. Starting on February 6, 2007,
Dr. Durfee joined the Audit Committee and Mr. Galaviz
moved to the Compensation Committee. The Committees
primary responsibilities, as defined by its written charter,
(which is posted on the Companys website at
www.versar.com under Corporate Governance) are to
provide oversight of the Companys 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 retain, and evaluate the performance of, the
independent accountants and the Companys financial and
accounting personnel. The Board of Directors has determined that
Mr. Hoeper qualifies as an Audit Committee Financial Expert
as defined under the rules and regulations of the Securities and
Exchange Commission and is independent as noted above.
The Compensation Committee was comprised of Dr. Metry
(Chairman), Mr. Hansen and Ms. Hoeber from
July 1, 2006 through February 6, 2007 when
Mr. Galaviz was added to the Committee. The Board of
Directors has determined that Dr. Metry, Mr. Galaviz,
Mr. Hansen and Ms. Hoeber are independent for purposes
of Compensation Committee service in accordance with the listing
standards of the American Stock Exchange. The Committee,
pursuant to a written charter (which is posted on the
Companys website at www.versar.com under
Corporate Governance), approves goals and objectives related to
executive compensation, reviews and adjusts compensation paid to
the President and CEO of the Company and all executive officers,
and administers the Companys incentive compensation plans,
including cash bonus and stock option and restricted share
grants under those plans. The Committee also reviews and
determines an appropriate compensation program for the Board of
Directors. The Committees charter provides that it may
delegate to management the allocation and issuance of stock
options and other forms of equity-based compensation to
employees other than executive officers, to the extent
consistent with the terms of any plan and applicable law. The
Committee utilizes the services of Steve Parker of HR Solutions,
an executive compensation advisory firm. Dr. Prociv
provides the Committee with compensation recommendations
4
with respect to non-operating officers and Mr. Sinnott.
Mr. Sinnott provides the Committee with compensation
recommendations with respect to operating officers.
The Nominating & Governance Committee was comprised,
during fiscal year 2007, of Dr. Markels (Chairman),
Mr. Hoeper, Mr. Gallagher and Ms. Hoeber, all
independent directors in accordance with the listing standards
of the American Stock Exchange. The Committee, pursuant to a
written charter, (which is posted on the Companys website
at www.versar.com under Corporate Governance)
reviews and approves Board committee charters, conducts
assessments of Board performance, 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 in writing to the Chairman
of the Nominating & Governance Committee at the
Companys Springfield office, care of the Corporate
Secretary, no later than June 12, 2008 for the 2008 Annual
Meeting of Stockholders. The Committee also develops and
implements corporate governance principles and policies.
Board and
Committee Meetings; Annual Meeting Attendance
During fiscal year 2007, the Board of Directors met four times.
The Executive Committee met once. The Audit Committee met four
times. The Compensation Committee met four times. The
Nominating & Governance Committee met five times. All
directors of the Company attended at least 75% of all meetings
of the Board and committees on which they served. The Company
does not have a policy requiring Board Members to attend annual
meeting of the stockholders. All of the Board members attended
the last annual meeting in 2006.
Compensation
Committee Interlocks and Insider Participation
During fiscal year 2007, Dr. Metry, Mr. Hansen,
Mr. Galaviz and Ms. Hoeber served as members of the
Compensation Committee. No reported relationships or
transactions exist for such Committee Members.
Directors
Compensation
During fiscal year 2007, each non-employee director received an
annual fee consisting of $3,000 in cash, plus the grant of
1,200 shares of restricted stock which vest over a period
of one year. Each director is also paid an attendance fee in
cash of $1,200 for each meeting of the Board or of its
committees where the director is physically present and of $600
for each meeting attended telephonically. In addition, the
Chairmen of the Audit and Compensation Committees are paid an
additional $5,000 a year in cash as compensation for increased
responsibility and work required in connection with those
positions. The non-employee Chairman of the Board is paid an
additional $12,000 a year in cash and receives an additional
1,200 shares of restricted stock for his additional
responsibilities and efforts on behalf of the Company.
5
DIRECTOR
COMPENSATION
FY2007
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Fees Earned or Paid
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Stock Awards
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Name(1)
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in Cash ($)(2)
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($)(3)
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Total
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Hoeper, Paul J.
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29,500
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7,900
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$
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37,400
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Markels, Michael
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12,600
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3,950
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$
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16,550
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Durfee, Robert L.
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10,500
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3,950
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$
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14,450
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Gallagher, James L.
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22,000
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3,950
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$
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25,950
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Galaviz, Fernando V.
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12,500
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3,950
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$
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16,450
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Hoeber, Amoretta M.
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17,500
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3,950
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$
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21,450
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Metry, Amir A.
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25,000
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(4)
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3,950
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$
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28,950
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Hansen, James V.
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12,000
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3,950
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$
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15,950
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(1) |
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Theodore M. Prociv is not included in this table as he is an
employee of the Company and, thus receives no compensation for
his services as a director. The compensation received by him is
shown on the 2007 Summary Compensation Table. |
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(2) |
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Includes all fees earned or paid for services as a director in
fiscal year 2007, including annual retainer, committee or Board
chair fees and meeting fees. |
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(3) |
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Represents the fair value of shares of restricted stock vested
in fiscal year 2007, which is the amount recognized for
financial reporting purposes in accordance with Statement of
Financial Accounting Standards No. 123(R) Share-based
Payments (SAFS 123(R)). In accordance with SAFS
123(R), the grant date fair value of each share of restricted
stock is $3.95, based on the closing price of Versars
Common Stock on the date of the grant, November 15, 2006.
Restricted stocks awarded to directors in fiscal year 2007 vest
on November 13, 2007, the day before the next Annual
Meeting of Stockholders. |
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(4) |
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Dr. Metry was paid $3,600 in fiscal year 2007 for fees
earned in fiscal year 2006 as the Boards representative at
the Companys strategic planning meetings. |
At the end of fiscal year 2007, the directors owned the
following number of vested options and unvested restricted
shares:
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Unvested Restricted
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Vested
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Name(1)
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Stock Awards
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Stock Options
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Paul J. Hoeper
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2,400
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10,121
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Robert L. Durfee
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1,200
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64,868
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(2)
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Fernando V. Galaviz
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1,200
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12,121
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James L. Gallagher
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1,200
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7,334
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James V. Hansen
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1,200
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1,965
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Amoretta M. Hoeber
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1,200
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10,521
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Michael Markels, Jr.
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1,200
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6,804
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(1) |
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Theodore M. Prociv is not included as he is an employee of the
Company and, thus receives no equity compensation for his
services as a director. |
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(2) |
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Includes awards of stock options granted while he was an
employee of Versar. |
6
Corporate
Governance
The Companys business is managed by its employees under
the oversight of the Board of Directors. Except for
Dr. Prociv, none of the Board members was an employee of
the Company during fiscal year 2007, nor are any now. The Board
limits membership of the Audit, Compensation and
Nominating & Governance Committees to persons
determined to be independent under the American Stock Exchange
(AMEX) and Securities and Exchange Commission (SEC) regulations.
The Board of Directors has established Corporate Governance
Guidelines that, along with the charters of the Boards
committees and the Companys Code of Conduct, provide a
framework for the governance of the Company. The Corporate
Governance Guidelines and committee charters are posted on the
Companys website www.versar.com, under
Corporate Governance.
The Board believes that independent directors must comprise a
substantial majority of the Board. Through fiscal year 2007 and
through today all of the Board members, except Dr. Prociv,
have met the AMEX and SEC standards for independence. The Board
has determined that all of the following eight non-employee
directors, who are also nominees, are independent directors:
Paul J. Hoeper, Robert L. Durfee, James L. Gallagher, Fernando
V. Galaviz, Amoretta M. Hoeber, Amir A. Metry, Michael
Markels, Jr. and James V. Hansen.
Under the Corporate Governance Guidelines, the
Nominating & Governance Committee has the
responsibility for determining which individuals, including
existing directors, shall be submitted to the Board for
nomination and the Stockholders for election as directors. There
is, however, no formal nominating or screening process or
procedure. The Board of Directors determined that no formal
written policy with regard to consideration of director nominees
recommended by Stockholders is necessary based on the
Companys policy to consider any nominee presented by a
Stockholder for consideration in a timely manner. The Corporate
Governance Guidelines require that director nominees should
possess the highest personal and professional ethics, integrity
and values and be committed to representing the long-term
interests of the Stockholders.
Versar has not adopted a formal process for Stockholder
communications with the Board of Directors. Nevertheless,
Stockholders and employees who desire to communicate directly to
the Board of Directors, any of the Boards Committees, the
non-employee directors as a group or any individual director
should write to the address below:
Name of Addressee
c/o Corporate
Secretary
Versar, Inc.
6850 Versar Center
Springfield, VA 22151
Code of
Conduct
The Companys Board of Directors has adopted a Code
of Conduct that applies to all directors and employees,
including the Companys principal executive officer,
principal financial officer, principal accounting officer and
controller. The Code of Conduct is posted on the Companys
web site www.versar.com under Corporate
Governance. The Company intends to disclose on its website any
waivers granted under this Code of Conduct to its principal
executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar
functions. As of the date of this Proxy Statement, no waivers
have been requested or granted.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires Versars executive officers, directors and persons
who beneficially own more than 10% of the Companys Common
Stock to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange
Commission. Based solely on Versars review of such reports
furnished to Versar, Versar believes that all reports required
to be filed by persons subject to Section 16(a) of the
Securities Exchange Act of 1934, and the rules and regulations
thereunder, have been timely filed, except that
(1) Mr. Dobbs filed two late Form 4s,
(2) Dr. Durfee filed one late Form 4,
(3) Ms. Foringer filed one late Form 4,
(4) Mr. Kendall filed nine late Form 4s,
(5) Dr. Markels, Jr. filed seven late
Form 4s,
7
(6) Dr. Metry filed one late Form 4,
(7) Dr. Prociv filed one late Form 4 and
(8) Mr. Wagonhurst filed one late Form 4, in each
case, as a result of administrative errors
and/or the
failure of such person to timely provide the information
necessary to Versar in order to prepare and file such forms on
such persons behalf.
SECURITY
HOLDINGS OF MANAGEMENT
The following table sets forth certain information regarding the
ownership of Versars Common Stock by the Companys
directors and each executive officer named in the Summary
Compensation Table, each nominee for director and the
Companys directors and executive officers as a group, as
of September 28, 2007.
|
|
|
|
|
|
|
|
|
|
|
Shares of Common Stock Beneficially
|
|
|
|
Owned as of September 28, 2007(1)
|
|
Individual or Group
|
|
Number
|
|
|
Percent
|
|
Michael Markels, Jr.(2)
|
|
|
388,452
|
|
|
|
4.4%
|
|
|
|
|
|
|
|
|
|
|
Robert L. Durfee(3)
|
|
|
565,988
|
|
|
|
6.4%
|
|
|
|
|
|
|
|
|
|
|
Amir A. Metry(4)
|
|
|
17,338
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
James L. Gallagher(5)
|
|
|
14,321
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Fernando V. Galaviz(6)
|
|
|
18,821
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Amoretta M. Hoeber(7)
|
|
|
14,721
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Paul J. Hoeper(8)
|
|
|
16,521
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
James V. Hansen(9)
|
|
|
7,068
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Theodore M. Prociv(10)
|
|
|
291,117
|
|
|
|
3.2%
|
|
|
|
|
|
|
|
|
|
|
Lawrence W. Sinnott(11)
|
|
|
119,622
|
|
|
|
1.4%
|
|
|
|
|
|
|
|
|
|
|
James C. Dobbs(12)
|
|
|
97,879
|
|
|
|
1.1%
|
|
|
|
|
|
|
|
|
|
|
Jeffrey V. Wagonhurst(13)
|
|
|
45,000
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
Gina Foringer(14)
|
|
|
34,552
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
All directors and executive officers as a group
(16 persons)(15)
|
|
|
1,785,227
|
|
|
|
19.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 28, 2007. |
|
(2) |
|
No longer includes shares owned by the adult children of
Dr. Markels who during late September notified the Company
that they no longer act as an affiliated group and with whom
Dr. Markels no longer shares voting and investment power.
Includes 12,121 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. |
|
(3) |
|
Includes 34,000 shares owned by adult children of
Dr. Durfee as to which he shares voting and investment
power. Includes 64,868 shares that may be purchased upon
the exercise of stock options exercisable within 60 days
after September 28, 2007. |
8
|
|
|
(4) |
|
Includes 6,804 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. |
|
(5) |
|
Includes 7,334 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. |
|
(6) |
|
Includes 12,121 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. |
|
(7) |
|
Includes 10,521 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. |
|
(8) |
|
Includes 10,121 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. |
|
(9) |
|
Includes 1,965 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. |
|
(10) |
|
Includes 175,000 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. Dr. Prociv is a Trustee of the
Employee 401(k) Plan and as such he has shared investment power
over 478,431 shares and shared voting power over
478,431 shares held by this plan. Dr. Prociv disclaims
beneficial ownership of the plan shares solely from his position
as Trustee, none of which are included in the above table. |
|
(11) |
|
Includes 75,000 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. Mr. Sinnott is a Trustee of the
Employee 401(k) Plan and as such he has shared investment power
over 478,431 shares and shared voting power over
478,431 shares held by this plan. Mr. Sinnott
disclaims beneficial ownership of the plan shares solely from
his position as Trustee, none which are included in the above
table. |
|
(12) |
|
Includes 30,000 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. |
|
(13) |
|
Includes 35,000 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. |
|
(14) |
|
Includes 19,000 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. |
|
(15) |
|
Includes 471,734 shares that may be purchased upon the
exercise of stock options exercisable within 60 days after
September 28, 2007. Excludes shares held by the Employee
401(k) Plan as described in notes 10 and 11. |
COMPENSATION
DISCUSSION AND ANALYSIS
Executive
Compensation Philosophies and Policies
The compensation philosophy of the Compensation Committee (the
Committee) is built on the principles of pay for
performance, shared ownership and alignment of management with
the long-term interest of our stockholders. The Committees
executive compensation policies are designed to provide
competitive levels of compensation which integrate pay with
performance, recognize individual initiative and achievements
and assist the Company in attracting and retaining qualified
executives. The target levels of the executive officers
overall compensation are intended to be consistent with
compensation in the professional services industry for similar
executives.
The Companys executive compensation program includes three
components:
|
|
|
|
|
Base Salary Salaries are based upon performance of
the executive and are evaluated against the Companys
financial and strategic objectives and of salaries paid to other
executives in the professional services industry.
|
|
|
|
Annual Bonus Bonuses are paid pursuant to an
executive incentive bonus plan established each year by the
Committee and are intended to reward performance during the
fiscal year. Under the bonus plan, an incentive pool is created
each fiscal year if certain goals set by the Board are met. If
the Company meets the
|
9
|
|
|
|
|
goals, the Committee then determines the allocation of the
incentive pool among the executive officers based on the
executive officers position and contribution to the
Company.
|
|
|
|
|
|
Long-Term Incentive Awards The purpose of this
element of the Companys executive compensation program is
to link management compensation with the long-term interest of
stockholders, as well as the performance of the Company in a
single fiscal year. Long-term incentive awards are made at the
discretion of the Committee, and the Committee bases its
decision to grant such awards on the individuals
performance or potential to improve shareholder value.
|
Compensation
Process
The Committee annually reviews the compensation of senior
management, usually in September of each year. The Committee
receives input from Dr. Prociv with respect to
Mr. Sinnotts and Mr. Dobbs compensation
and from Mr. Sinnott with respect to
Mr. Wagonhursts and Ms. Foringers
compensation. The Committee also meets privately with the Chief
Executive Officer to determine the base salary, bonus and
incentive payments of the other executive officers.
In making its compensation decisions, the Committee uses
information compiled by Mr. Steve Parker of HR Solutions, a
compensation consulting firm. Annually, Mr. Parker compiles
information from compensation surveys and benchmarks, including
those prepared by Mercer, Radford, WTPR and Culpetter regarding
companies in the professional services industry. The compilation
prepared by Mr. Parker includes compensation data for
different executive levels of professional services companies of
various sizes and in various geographic locations. The
compilation also includes an average of the mid-range of the
salaries and bonus percentages for the various executive levels
included in each of the surveys. In making compensation
decisions, the Committee seeks to set the executives
salaries and bonuses to these averages.
In making compensation decisions, the Committee also takes into
account the accounting and tax impact to the Company of the
proposed compensation under consideration. Section 162(m)
of the Internal Revenue Code has not been a relevant factor in
the Committees compensation decisions, because the levels
of compensation historically paid to the executive officers have
been substantially below the $1 million threshold set forth
in Section 162(m). If the Committee were to consider
compensation increases sufficient to reach this threshold,
advice regarding application and impact of Section 162(m)
would be sought.
In determining executive compensation for fiscal year 2008, the
Committee considered the performance of the Companys
stock, the financial performance of the Company during fiscal
year 2007 and the individuals performance against
pre-established goals and other accomplishments during fiscal
year 2007. In setting executive compensation for fiscal year
2007, the Committee focused on promotions and individual
performance against pre-established goals and other
accomplishments in fiscal year 2006.
Compensation
Decisions
Base
Salary
The Committee considers several factors in setting base salary.
First, the Committee reviews the compilation prepared by the
compensation consultant to determine if an executives
salary is in the mid-range of the salaries for similar
positions. For both fiscal years 2007 and 2008, each named
executive officers salary was at or below the mid-point of
the salaries for comparable positions outlined in the
compilation. The Committee also receives input from
Dr. Prociv with respect to Mr. Sinnotts and
Mr. Dobbs base salaries and from Mr. Sinnott
with respect to Mr. Wagonhursts and
Ms. Foringers base salaries. In addition, the
Committee reviews the individuals performance, the
Companys performance, its managerial talent and the
Committees organizational assessment of the Companys
leadership team.
Although the Company did not meet its performance goals for
fiscal year 2006, the Committee in September 2006 granted the
following salary increases, which commenced on October 1,
2006, based upon individual performance or promotions, as well
as the other factors described above. Specifically,
Dr. Prociv received a $15,000 salary increase,
Mr. Sinnott received a $17,000 salary increase,
Mr. Dobbs received a $4,000 salary increase,
Mr. Wagonhurst received a $4,000 salary increase and
Ms. Foringer received a $15,000 salary increase.
10
After the end of fiscal year 2007, the Committee evaluated the
factors discussed above and increased the base salaries of each
of the named executive officers for fiscal year 2008 to the
following levels:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Named Executive Officer
|
|
|
FY07 Base Salary
|
|
|
|
FY08 Base Salary(1)
|
|
|
|
Percent Changed
|
|
Theodore M. Prociv
|
|
|
$
|
300,000
|
|
|
|
$
|
330,000
|
|
|
|
|
10
|
%
|
Lawrence W. Sinnott
|
|
|
$
|
190,000
|
|
|
|
$
|
210,000
|
|
|
|
|
15.8
|
%
|
James C. Dobbs
|
|
|
$
|
172,000
|
|
|
|
$
|
180,000
|
|
|
|
|
3.5
|
%
|
Jeffrey V. Wagonhurst
|
|
|
$
|
170,000
|
|
|
|
$
|
185,000
|
|
|
|
|
8.8
|
%
|
Gina Foringer
|
|
|
$
|
160,000
|
|
|
|
$
|
165,000
|
|
|
|
|
3.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Base salary adjustments begin at the pay period on or around
October 1, 2007. |
Specifically, regarding the Chief Executive Officers
fiscal year 2008 salary noted above, the Committee discussed the
Chief Executive Officers performance, the fact that he met
or exceeded all of his performance goals and the compensation
data provided to the Committee.
Bonuses
Under the bonus plan, a bonus pool in which executive officers
and certain other employees may participate is created each
fiscal year if the Company meets certain minimum pre-tax income
goals set by the Board, and the size of the bonus pool increases
as pre-tax income increases beyond those goals. Under the bonus
plan for fiscal year 2007, the Company had to earn at least
$1.6 million in pre-tax income in order for a bonus pool to
be created. At $1.6 million in pre-tax income, the bonus
plan set the bonus pool at $100,000. However, executive officers
and certain other executives are not able to participate in the
bonus pool until the pool reaches a certain threshold, which was
$200,000 for fiscal year 2007. Once the threshold is reached, a
portion of the bonus pool is set aside for the executive
officers and certain other executives. The portion of the bonus
pool set aside for them ranges between 40% and 60% of the amount
in the bonus pool in excess of the threshold. Until fiscal year
2007, the threshold was not met.
Because the Company earned $4.1 million in pre-tax income
during fiscal 2007, $570,000 of the bonus pool was set aside for
executive officers and certain other executives. However, the
Committee reduced this bonus pool to $515,000 following the
Chief Operating Officer/Chief Financial Officers
recommendation that $55,000 be transferred to bonuses for middle
management and staff in order to adequately reward their
efforts. The Committee then allocated the $515,000 among the
executive officers and certain other executives based on the
individuals position, the individuals contribution
to the Company and the mid-range bonuses in the compilation
prepared by the compensation consultant. Periodically, the
Committee may make additional discretionary cash bonuses to
executive officers in order to reward exemplary performance.
During fiscal year 2007, the Committee granted Mr. Dobbs a
$10,000 cash bonus to reward his work in resolving certain
litigation. During fiscal year 2007, the Committee also granted
Mr. Wagonhurst and Ms. Foringer cash bonuses of
$21,656 and $5,000, respectively, in order to reward them for
their performance during fiscal year 2006.
Restricted
Stock Awards
While the cash bonus focuses solely on past performance,
discretionary restricted stock awards take into account both
past performance and the need to provide the executive officers
with an investment in and incentive to drive future performance
of the Company. During fiscal year 2007, the Committee granted
Mr. Dobbs an award of 2,000 restricted shares to reward his
work in resolving certain litigation during fiscal year 2007.
During fiscal year 2007, the Committee also granted restricted
stock awards of 2,000 shares to each of Mr. Sinnott,
Mr. Wagonhurst and Ms. Foringer in order to reward
them for their performance in fiscal year 2006.
11
On September 6, 2007, the Committee adopted the
recommendation of the Chairman and the following restricted
stock awards were made to the named executive officers in order
to reward their performance.
|
|
|
|
|
|
|
|
|
Restricted Stock Awarded
|
|
Named Executive Officer
|
|
|
(# of shares)
|
|
Theodore M. Prociv
|
|
|
|
25,000
|
|
Lawrence W. Sinnott
|
|
|
|
15,000
|
|
James C. Dobbs
|
|
|
|
10,000
|
|
Jeffrey V. Wagonhurst
|
|
|
|
10,000
|
|
Gina Foringer
|
|
|
|
5,000
|
|
|
|
|
|
|
|
Report of
the Compensation Committee
The Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis with management. Based on
this review and discussion, the Compensation Committee
recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in this Proxy Statement and
incorporated by reference in the Companys Annual Report on
Form 10-K.
Compensation Committee of the Board of Directors
Dr. Amir A. Metry, Chairman
Fernando V. Galaviz
James V. Hansen
Amoretta M. Hoeber
SUMMARY
COMPENSATION TABLE
The following table presents compensation information earned by
the Companys Chief Executive Officer, Chief Financial
Officer, and each of the Companys three other most highly
compensated executive officers during the fiscal year ended
June 29, 2007. We refer to these executive officers as our
named executive officers in this Proxy Statement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
Name and Principal
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Stock Awards
|
|
|
|
Compensation
|
|
|
|
Total
|
|
Position
|
|
|
($)(1)
|
|
|
|
($)
|
|
|
|
($)(4)
|
|
|
|
($)(5)
|
|
|
|
($)
|
|
Theodore M. Prociv
President and Chief Executive Officer
|
|
|
|
296,487
|
|
|
|
|
170,000
|
|
|
|
|
|
|
|
|
|
18,544
|
|
|
|
|
469,019
|
|
Lawrence W. Sinnott
Executive Vice President, Chief Operating Officer and Chief
Financial Officer
|
|
|
|
185,423
|
|
|
|
|
140,000
|
|
|
|
|
4,040
|
|
|
|
|
12,113
|
|
|
|
|
341,575
|
|
James C. Dobbs
Senior Vice President and General Counsel
|
|
|
|
170,923
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
|
|
14,705
|
|
|
|
|
236,228
|
|
Jeffrey V. Wagonhurst
Senior Vice President, Program Management Group
|
|
|
|
166,384
|
|
|
|
|
100,000(2
|
)
|
|
|
|
4,040
|
|
|
|
|
14,702
|
|
|
|
|
281,038
|
|
Gina Foringer
Senior Vice President, Professional Services Group
|
|
|
|
157,308
|
|
|
|
|
30,000(3
|
)
|
|
|
|
4,040
|
|
|
|
|
10,663
|
|
|
|
|
197,011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes regular base pay earnings in fiscal year 2007. |
12
|
|
|
(2) |
|
During fiscal year 2007 Mr. Wagonhurst was also paid a
$21,656 bonus for services he performed during fiscal year 2006. |
|
(3) |
|
During fiscal year 2007 Ms. Foringer was paid a $5,000
bonus for services she performed during fiscal year 2006. |
|
(4) |
|
Represents the fair value of shares of restricted stock vested
in fiscal year 2007, which is the amount recognized for
financial statement reporting purposes in accordance with
SFAS 123(R). |
|
(5) |
|
Consists of the following: Company paid life insurance, Company
paid disability, executive medical reimbursement, and Company
match to employees 401(k) Plan contribution. |
GRANTS OF
PLAN-BASED AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards: Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of Stock or
|
|
|
|
Grant Date Fair Value
|
|
|
|
|
|
|
|
|
Units
|
|
|
|
of Stock and Option
|
|
Name
|
|
|
Grant Date
|
|
|
|
(#)
|
|
|
|
Awards ($)(3)
|
|
Theodore M. Prociv
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence W. Sinnott
|
|
|
|
9/6/06
|
(1)
|
|
|
|
2,000
|
|
|
|
|
7,420
|
|
Jeffrey V. Wagonhurst
|
|
|
|
9/6/06
|
(1)
|
|
|
|
2,000
|
|
|
|
|
7,420
|
|
James C. Dobbs
|
|
|
|
2/7/07
|
(2)
|
|
|
|
2,000
|
|
|
|
|
9,800
|
|
Gina Foringer
|
|
|
|
9/6/06
|
(1)
|
|
|
|
2,000
|
|
|
|
|
7,420
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The restricted stock awards to Messrs Sinnott and Wagonhurst and
Ms. Foringer were made by the Compensation Committee during
fiscal year 2007 for performance in fiscal year 2006. 50% of
each award vested on January 2, 2007, and the second 50% of
each award will vest on January 2, 2008. |
|
(2) |
|
The restricted stock awarded to Mr. Dobbs was in
recognition of his successful resolution of the Enviro-Chem
litigation. His award will be vested over a two-year period, 50%
on each of the first and second anniversaries of the award. |
|
(3) |
|
The aggregate grant date fair value of restricted stock awards
is determined by multiplying the number of restricted shares
granted by the closing price of the Companys Common Stock
on the grant date. |
13
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or Units
|
|
|
|
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
of Stock that
|
|
|
|
|
|
|
Unexercised
|
|
|
Option Exercise
|
|
|
Option
|
|
|
have not
|
|
|
|
|
|
|
Options (#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
|
Name
|
|
|
Exercisable
|
|
|
($)
|
|
|
Date
|
|
|
(#)
|
|
|
($)(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Theodore M. Prociv
|
|
|
|
100,000
|
|
|
|
|
2.375
|
|
|
|
|
10/31/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
|
|
|
|
2.80
|
|
|
|
|
10/1/13
|
|
|
|
|
0
|
|
|
|
|
0
|
|
|
|
|
|
25,000
|
|
|
|
|
3.82
|
|
|
|
|
9/14/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence W. Sinnott
|
|
|
|
10,000
|
|
|
|
|
4.50
|
|
|
|
|
1/26/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
|
1.81
|
|
|
|
|
10/14/12
|
|
|
|
|
1,000
|
|
|
|
|
8,410
|
|
|
|
|
|
20,000
|
|
|
|
|
2.80
|
|
|
|
|
10/1/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
3.82
|
|
|
|
|
9/14/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James C. Dobbs
|
|
|
|
20,000
|
|
|
|
|
2.80
|
|
|
|
|
10/1/13
|
|
|
|
|
2,000
|
|
|
|
|
16,820
|
|
|
|
|
|
10,000
|
|
|
|
|
3.82
|
|
|
|
|
9/14/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey V. Wagonhurst
|
|
|
|
5,000
|
|
|
|
|
2.25
|
|
|
|
|
10/25/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
2.80
|
|
|
|
|
10/1/13
|
|
|
|
|
1,000
|
|
|
|
|
8,410
|
|
|
|
|
|
10,000
|
|
|
|
|
3.82
|
|
|
|
|
9/14/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gina Foringer
|
|
|
|
6,000
|
|
|
|
|
2.625
|
|
|
|
|
9/11/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,000
|
|
|
|
|
2.25
|
|
|
|
|
11/25/12
|
|
|
|
|
1,000
|
|
|
|
|
8,410
|
|
|
|
|
|
8,000
|
|
|
|
|
4.45
|
|
|
|
|
1/2/15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
|
3.50
|
|
|
|
|
1/2/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Based on the closing price of the Companys stock of $8.41
on June 29, 2007, the last day of fiscal year 2007. |
OPTION
EXERCISES AND STOCK VESTED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Shares Acquired
|
|
|
|
Value Realized on
|
|
|
|
Shares Acquired
|
|
|
|
Value Realized
|
|
Name
|
|
|
on Exercise (#)
|
|
|
|
Exercise ($)(1)
|
|
|
|
on Vesting (#)
|
|
|
|
on Vesting ($)(2)
|
|
|
Theodore M. Prociv
|
|
|
|
50,000
|
|
|
|
|
310,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lawrence W. Sinnott
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James C. Dobbs
|
|
|
|
30,000
|
|
|
|
|
239,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey V. Wagonhurst
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gina Foringer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000
|
|
|
|
|
4,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the difference between the exercise price and the
fair market value of the Companys common stock on the date
of exercise. |
|
(2) |
|
The shares vested on January 2, 2007, which was a market
holiday. Consequently, the dollar amount reported in the table
is equal to the number of shares vested times $4.00, which was
the closing market price of the Companys common stock on
January 3, 2007. |
14
Employment
Contract
In 2005 the Company entered into an employment agreement with
Dr. Prociv, which specifies the terms under which he serves
as the Companys President and Chief Executive Officer. The
Company has periodically extended the term of
Dr. Procivs employment agreement, and the last
extension occurred on September 6, 2007 when the Board of
Directors agreed to extend the agreement, which was set to
expire on December 1, 2007, for an additional year and to
increase Dr. Procivs base salary from $300,000 to
$330,000 per year. Dr. Prociv is also entitled to receive
the benefits available to the other executive officers and to
participate in all medical, hospital, dental, life, disability
and other insurance plans available to executive officers.
If the Company terminates Dr. Procivs employment
without cause, then he is entitled to receive (i) a lump
sum payment equal to his base salary, any accrued incentive
compensation, deferred compensation and accrued personal leave
and (ii) the continuation of his fringe benefits for
12 months. If Dr. Procivs employment is
terminated by the Company for cause, the Company is required to
continue paying Dr. Prociv his base salary and continue to
provide the fringe benefits Dr. Prociv was receiving at the
time of his termination for eight weeks following his
termination.
Following a change of control, if Dr. Procivs
employment is terminated by the Company without cause (other
than as a result of his death or disability) or if
Dr. Prociv resigns for good reason (e.g., as a
result of change in title, salary reduction, or change in
geographic location), then he is entitled to receive (i) a
lump sum cash payment equal to two times his base salary,
(ii) a lump sum cash payment equal to two times the higher
of the amounts paid to Dr. Prociv under any existing bonus
or incentive plan in the calendar year preceding the termination
of his employment or the calendar year in which change of
control occurred, (iii) a lump sum payment for any amounts
accrued under any other incentive plan, (iv) a continuation
for 24 months of the life, disability, accident, health and
dental insurance benefits he was receiving before the end of his
employment and (v) all unvested options will immediately
vest and remain exercisable for the longest period of time
permitted by the applicable stock option plan. Dr. Prociv
will also receive the benefits described in the preceding
sentence if following a potential change of control, but before
the change of control occurs, Dr. Procivs employment
is terminated by the Company without cause at the direction of
the person who has entered into the agreement that will result
in change of control (the Acquiror) or he resigns
for good reason and the events constituting good reason occur at
the direction of the Acquiror. Dr. Prociv will also receive
the benefits described above if a successor to the Company fails
to assume the employment contract.
The following table estimates and summarizes the potential
payments and benefits, other than the benefits ordinarily
available to salaried employees, to which Dr. Prociv would
have received if his employment had been terminated on the last
day of fiscal year 2007 under the circumstances described below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Benefits
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$(1)
|
|
Termination without cause
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
5,185
|
|
Termination for cause
|
|
|
|
46,154
|
|
|
|
|
|
|
|
|
|
798
|
|
Termination or resignation following a change of control
|
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
10,369
|
|
Termination or resignation following a potential change of
control
|
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
10,369
|
|
Successor fails to assume the contract
|
|
|
|
600,000
|
|
|
|
|
|
|
|
|
|
10,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Payment for additional benefit costs paid by the Company on
behalf of Dr. Prociv and not generally available to other
employees for life and disability insurance. |
Change of
Control Agreements
The Company has entered into change of control agreement with
Messrs Sinnott, Dobbs and Wagonhurst. Under each of the
agreements, following a change of control, if the
executives employment is terminated by the Company without
cause (other than as a result of his death or disability) or if
the executive resigns for good reason (e.g., as a result
of change in title, salary reduction, or change in geographic
location), then he is entitled to receive (i) a lump sum
cash payment equal to two times his base salary, (ii) a
lump sum cash payment equal to two times the
15
higher of the amounts paid to the executive under any existing
bonus or incentive plan in the calendar year preceding the
termination of his employment or the calendar year in which
change of control occurred, (iii) a lump sum payment for
any amounts accrued under any other incentive plan, (iv) a
continuation for 24 months of the life, disability,
accident, health and dental insurance benefits he was receiving
before the end of his employment and (v) all unvested
options will immediately vest and remain exercisable for the
longest period of time permitted by the applicable stock option
plan. The executive will also receive the benefits described in
the preceding sentence if following a potential change of
control but before the change of control occurs, the
executives employment is terminated by the Company without
cause at the direction of the person who has entered into the
agreement that will result in change of control (the
Acquiror) or he resigns for good reason and the
events constituting good reason occur at the direction of the
Acquiror. The executive will also receive the benefits described
above if a successor to the Company fails to assume the change
of control agreement.
The following table estimates and summarizes the potential
payments and benefits, other than the benefits ordinarily
available to salaried employees, which Mr. Sinnott would
have received if his employment had been terminated on the last
day of fiscal year 2007 under the circumstances described below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Benefits
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$(1)
|
|
Termination or resignation following a change of control
|
|
|
|
380,000
|
|
|
|
|
|
|
|
|
|
2,042
|
|
Termination or resignation following a potential change of
control
|
|
|
|
380,000
|
|
|
|
|
|
|
|
|
|
2,042
|
|
Successor fails to assume the contract
|
|
|
|
380,000
|
|
|
|
|
|
|
|
|
|
2,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Payment for additional benefit costs paid by the Company on
behalf of Mr. Sinnott and not generally available to other
employees for life and disability insurance. |
The following table estimates and summarizes the potential
payments and benefits, other than the benefits ordinarily
available to salaried employees, which Mr. Dobbs would have
received if his employment had been terminated on the last day
of fiscal year 2007 under the circumstances described below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Benefits
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$(1)
|
|
Termination or resignation following a change of control
|
|
|
|
344,000
|
|
|
|
|
20,000
|
|
|
|
|
6,994
|
|
Termination or resignation following a potential change of
control
|
|
|
|
344,000
|
|
|
|
|
20,000
|
|
|
|
|
6,994
|
|
Successor fails to assume the contract
|
|
|
|
344,000
|
|
|
|
|
20,000
|
|
|
|
|
6,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Payment for additional benefit costs paid by the Company on
behalf of Mr. Dobbs and not generally available to other
employees for life and disability insurance. |
The following table estimates and summarizes the potential
payments and benefits, other than the benefits ordinarily
available to salaried employees, which Mr. Wagonhurst would
have received if his employment had been terminated on the last
day of fiscal year 2007 under the circumstances described below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
|
Bonus
|
|
|
|
Benefits
|
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$(1)
|
|
Termination or resignation following a change of control
|
|
|
|
340,000
|
|
|
|
|
43,312
|
|
|
|
|
5,200
|
|
Termination or resignation following a potential change of
control
|
|
|
|
340,000
|
|
|
|
|
43,312
|
|
|
|
|
5,200
|
|
Successor fails to assume the contract
|
|
|
|
340,000
|
|
|
|
|
43,312
|
|
|
|
|
5,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Payment for additional benefit costs paid by the Company on
behalf of Mr. Wagonhurst and not generally available to
other employees for life and disability insurance. |
16
REPORT OF
THE AUDIT COMMITTEE
The Boards Audit Committee consists of four non-employee
directors: James L. Gallagher, as Chairman, Paul J. Hoeper,
Dr. Robert L. Durfee and Dr. Amir A. Metry. Fernando
V. Galaviz served on the Committee until February 6, 2007,
when he was replaced by Dr. Robert L. Durfee. Each member
has been determined to be an independent director under the
American Stock Exchange listing standards and the rules and
regulations of the Securities and Exchange Commission. Further,
the Companys Board of Directors has determined that
Mr. Hoeper is qualified as an Audit Committee Financial
Expert. Pursuant to the Committees written charter, which
meets the requirements of the Sarbanes-Oxley Act, the Committee
evaluates audit performance, manages the relationship with the
Companys independent registered public accounting firm,
assesses policies and procedures relating to internal controls
and evaluates complaints regarding auditing and accounting
matters. This report relates to the activities of the Audit
Committee in carrying out such role for the past year.
The Audit Committee oversees the Companys financial
reporting process on behalf of the Board of Directors. The
Companys management has the primary responsibility for the
financial statements and reporting process, which includes the
Companys systems for internal controls. In carrying out
its oversight responsibilities, the Committee met with
management and reviewed with management the audited financial
statements included in the Annual Report on
Form 10-K
for the fiscal year ended June 29, 2007. The review
included a discussion of the quality and acceptability of the
Companys financial reporting and controls, including the
reasonableness of significant judgments and the clarity of
disclosures in the consolidated financial statements.
The Committee also reviewed with the Companys independent
registered public accounting firm, Grant Thornton LLP
(Grant Thornton), who are responsible for expressing
an opinion on the conformity of the Companys audited
financial statements with generally accepted accounting
principles, their judgments as to the quality and the
acceptability of the Companys financial reporting and such
other matters as are required to be discussed with the Committee
under generally accepted auditing standards and SAS (Statement
on Auditing Standards) 61. In addition, the Committee discussed
with Grant Thornton their independence from management and the
Company, including the matters in their written disclosures
required by the Independence Standards Board, including Standard
No. 1, and received written disclosures required by that
standard. The Committee held several private sessions with the
Companys independent auditors, Grant Thornton, at which
candid discussions of financial management, accounting and
internal controls took place.
The Committee meets periodically and privately with Grant
Thornton to discuss the results of their examinations, their
evaluations of the Companys internal controls, and the
overall quality of the Companys financial reporting.
In reliance on the reviews and discussions referred to above,
the Committee recommended to the Board of Directors that the
audited financial statements be included in the Annual Report on
Form 10-K
for the fiscal year ended June 29, 2007 for filing with the
Securities and Exchange Commission.
Under the Committees Charter and the requirements of the
Sarbanes-Oxley Act and
Rule 10A-3
adopted by the Securities and Exchange Commission, the
responsibility for the appointment, compensation, retention and
oversight of the work of the Companys independent
registered public accounting firm rests with the Audit
Committee. Based upon a review of Grant Thorntons
qualifications, resources, personnel and performance, the
Committee has selected Grant Thornton as the Companys
independent registered public accounting firm for fiscal year
2008 and is submitting its decision for Stockholder ratification
at the Annual Meeting.
Submitted by the Audit Committee of the Board of Directors.
James L. Gallagher, Chairman
Dr. Robert L. Durfee
Paul J. Hoeper
Dr. Amir A. Metry
17
Audit
Fees
In fiscal years 2007 and 2006, Versar paid Grant Thornton
$172,809 and $158,880, respectively, for quarterly reviews and
the annual fiscal year audit.
Audit-Related
Fees
Versar paid Grant Thornton $1,622 in fiscal year 2006 and
nothing in fiscal year 2007 for audit-related fees for assurance
and related services.
Tax
Fees
In fiscal years 2007 and 2006, Versar paid $64,864 and $61,514,
respectively, to Grant Thornton for federal and state tax
compliance services.
All Other
Fees
In fiscal years 2007 and 2006, Versar paid $22,173 and $18,155,
respectively, to Grant Thornton for audits of benefit plans,
various tax consulting for the Republic of the Philippines and
review of Securities and Exchange Commission matters.
The Audit Committee has adopted a comprehensive pre-approval
policy for services by its registered public accounting firm.
All services by Grant Thornton rendered in fiscal year 2007
received prior approval by the Audit Committee. The Committee
expects that all such services for fiscal year 2008 will be
subject to pre-approval by the Audit Committee.
18
PROPOSAL NO. 2
APPOINTMENT OF ACCOUNTANTS
The Audit Committee of the Board of Directors considers it
desirable that its appointment of the firm of Grant Thornton LLP
(Grant Thornton) as independent registered public accounting
firm of the Company for fiscal year 2008 be ratified by the
Stockholders. Grant Thornton has been the Companys
accountants since 2002. Representatives of Grant Thornton 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.
The Board of Directors recommends a vote FOR
ratification of the appointment of Grant Thornton and the
enclosed proxy will be so voted unless a vote against the
proposal or an abstention is specifically indicated.
2008
ANNUAL MEETING
It is presently contemplated that the 2008 Annual Meeting of
Stockholders will be held on or about November 12, 2008. In
order for any appropriate stockholder proposal to be considered
for inclusion in the proxy materials for the 2008 Annual Meeting
of Stockholders, it must be received by the Secretary of the
Company no later than June 10, 2008, by certified mail,
return receipt requested and must comply with applicable federal
proxy rules. A proposal submitted for consideration at the 2008
Annual Meeting of Stockholders subsequent to June 12, 2008
shall be considered untimely and will not be included in the
Companys proxy materials. Further, any proposals for
consideration at the 2008 Annual Meeting for which the Company
does not receive notice on or before August 26, 2008 shall
be subject to the discretionary vote of the proxy holders at the
2008 Annual Meeting of Stockholders.
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,
James C. Dobbs
Secretary
October 10, 2007
19
DETACH PROXY CARD HERE
PLEASE COMPLETE, SIGN, DATE AND
x RETURN THIS PROXY PROMPTLY IN
THE ENCLOSED ENVELOPE. Votes must be
indicated (x) in Black or Blue ink.
(1) Election of Directors FOR AGAINST ABSTAIN
(2) Ratification of the
appointment of Grant Thornton
LLP
FOR all nominees x WITHHOLD AUTHORITY to vote x *EXCEPTIONS x x x x
listed below for all nominees listed below as independent accountants for fiscal year
2008.
(3) In their discretion upon such other matters as may properly come before the Nominees:
Michael Markels, Jr., Robert L. Durfee, Theodore M. Prociv, meeting or any adjournment(s) thereof
and upon matters incident to the Paul J. Hoeper, James L. Gallagher, Amoretta M. Hoeber, conduct of
the meeting.
Fernando V. Galaviz, Amir A. Metry and James V. Hansen
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark the To change your
address, please mark this box.
Exceptions box and write that nominees name in the space provided below). x
*Exception ___To include any comments, please mark this box.
x
S C A N L I N E
Please sign exactly as
your name appears herein. If
you are signing for the
stockholder, please sign the stockholders name, your
name and state the capacity
in which you are signing.
Date Share Owner sign here
Co-Owner sign here |
VERSAR, INC.
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 14, 2007 Solicited on
Behalf of the Board of Directors
The undersigned hereby authorizes Paul J. Hoeper and Theodore M. Prociv, 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 Companys offices, 6850 Versar Center,
Springfield, Virginia, on Wednesday, November 14, 2007 at10:00 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 10, 2007. All other proxies heretofore given by the
undersigned to vote shares of the Companys 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 11223
NEW YORK, N.Y. 10203-0223 |