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| EX-31.1 - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - VERSAR INC | exhibit31-1_otten.htm |
| EX-31.2 - CERTIFICATION PURSUANT TO RULE 13A-14(A)/15D-14(A) CERTIFICATIONS SECTION 302 OF - VERSAR INC | exhibit31-2_tarrago.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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For
the fiscal year ended
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Commission
File
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June
30, 2017
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No.
1-9309
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Versar, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE
(State
or other jurisdiction of Incorporation or
organization)
54-0852979
(I.R.S. employer identification no.)
(I.R.S. employer identification no.)
6850 Versar Center, Springfield,
Virginia
(Address of principal executive
offices)
22151
(Zip
code)
(703) 750-3000
(Registrant’s telephone number, including area
code)
Securities registered pursuant to Section 12(b) of the
Act:
Common Stock, $.01 par value
(Title of Class)
NYSE American
(Name of each exchange on which registered)
Securities registered pursuant to Section 12(g) of Act:
NONE
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
Yes ☐
No ☑
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act.
Yes ☐
No ☑
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes ☑
No ☐
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate web site, if any, every
Interactive Data File required to be submitted and posted pursuant
to Rule 405 of Regulation S-T during the preceding 12 months (or
for such shorter period that the registrant was required to submit
and post such files).
Yes ☑
No ☐
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ☐
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer or
an “emerging growth company” (as defined in Rule 12b-2
of the Exchange Act).
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☐ (Do
not check if a smaller reporting
company)
Smaller reporting company ☑
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☐
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes ☐
No ☑
The aggregate market value of the voting stock held by
non-affiliates of the registrant as of December 30, 2016 was
approximately $13,563,911.
The number of shares of Common Stock outstanding as of October 5,
2017 was 10,097,259.
EXPLANATORY NOTE
Versar,
Inc. (the “Company,” “Versar,”
“we,” “us,” or “our”) is filing
this Amendment No. 1 on Form 10-K/A (this “Amendment No.
1”) to amend our Annual Report on Form 10-K for the year
ended June 30, 2017 (the “Annual Report”) filed on
March 28, 2017 with the Securities and Exchange Commission (the
“SEC”) solely for the purpose of including information
that was to be incorporated by reference from our definitive proxy
statement pursuant to Regulation 14A of the Securities Exchange Act
of 1934. We will not file our definitive proxy statement within 120
days of our fiscal year ended June 30, 2017 and therefore, we are
amending and restating in their entirety Items 10, 11, 12, 13 and
14 of Part III of the Annual Report. The reference on the cover of
the Annual Report to the incorporation by reference to portions of
our definitive proxy statement into Part III of the Annual Report
is hereby deleted. Except as otherwise expressly noted, this Form
10-K/A does not reflect events occurring after the September 25,
2017 filing of our Annual Report nor does it modify or update the
disclosure contained in the Annual Report in any way other than as
required to reflect the amendments discussed above and reflected
below.
Pursuant to the
rules of the SEC, Part IV, Item 15 has also been amended to contain
the currently dated certifications from the Company’s
principal executive officer and principal financial officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. The
certifications of the Company’s principal executive officer
and principal financial officer are attached to this Amendment No.
1 as Exhibits 31.1 and 31.2. Because no financial statements have
been included in this Amendment No. 1 and this Amendment No. 1 does
not contain or amend any disclosure with respect to Items 307 and
308 of Regulation S-K, paragraphs 3, 4 and 5 of the certifications
have been omitted.
PART III
Item 10. Directors, Executive Officers and Corporate
Governance
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NAME
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SERVED AS DIRECTOR
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Robert L. Durfee, Ph.D
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1969 to the present
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Co-founder
of the Company; Executive Vice President of the Company from 1986
to June 2004; President of GEOMET Technologies, LLC, a subsidiary
of the Company, from 1991 to June 2004. Age 81.
Dr.
Durfee is a highly experienced executive. His prior roles at
Versar, including as one of the Company’s founders and as
President of a subsidiary GEOMET Technologies, LLC, give him unique
insight into the Company’s businesses, particularly those
aspects of environmental compliance, munitions disposal and control
of hazardous or toxic materials.
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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 of Westinghouse Government, Operations Business
Unit from 1992 to 1994. Age 80.
Mr.
Gallagher served as a highly experienced executive of a leading
environmental and energy unit of a Fortune 500 company. With his
significant financial, business, operations and contracting
background, Mr. Gallagher has provided expert leadership to the
Board’s Audit Committee. His experience in construction
management and outsourcing of large government facilities is
important to two of the Company’s core businesses. As a
former consultant to the U.S. Department of Energy, Mr. Gallagher
is able to provide knowledge of markets and client needs in the
energy sector.
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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 of 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 74.
Ms.
Hoeber’s experience in government contracting, strategic
planning and business development brings a unique perspective to
the core Versar businesses as well as an understanding of the
strategic planning process to advise Versar as it develops its key
business competencies. Her extensive network and membership in
several key U.S. government advisory boards also give her insight
into the needs and priorities of Versar’s biggest client
group, the U.S. government, specifically the U.S. Department of
Defense.
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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 of
Fortune Financial from 1994 to January 1996. Age 71.
Mr.
Hoeper’s experience as a merchant banker and senior
Department of Defense official, plus his service as a director of
several public companies, provide organizational, financial and
business experience to the Board. Since leaving the government, Mr.
Hoeper has been an active participant and presenter at conferences
focusing on general corporate governance and the specific
governance needs of companies, like Versar, that focus on
government contracts. Mr. Hoeper’s participation in various
government advisory groups and institutions enhances his leadership
of the Board and enables him to contribute in a meaningful way to
the strategic and risk management tasks of the Board.
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Amir A. Metry, Ph.D
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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; Vice President of Roy F. Weston from 1981 to 1989. Age
75.
Dr.
Metry’s prior business experience in the United States and
overseas and ongoing charitable work in Egypt and the Sudan provide
Versar with international business experience in an area that has
become its largest business segment. Dr. Metry’s experience
includes launching new business and operations in the Middle East,
Europe and the Pacific Rim. Also, Dr. Metry’s many years of
experience and present business relationships in engineering and
environmental businesses enhances his leadership on organizational
and compensation issues faced by Versar.
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Anthony L. Otten
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2008 to the present
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Chief
Executive Officer of Versar since February 2010; Director of Orion
Energy Systems, Inc. since August 2015; Managing Member of
Stillwater, LLC from July 2009 to February 2010; Director of New
Stream Capital, LLC and Operating Partner of New Stream Asset
Funding, LLC from 2007 to June 2009; Managing Member of Stillwater,
LLC from 2004 to 2007; Principal of Grisanti, Galef and Goldress,
Inc. from 2001 to 2004. Age 61.
Mr.
Otten, as Chief Executive Officer, brings the perspective and input
of the senior management team to the Board discussions. As former
chief executive officer of a number of companies, senior financial
manager and entrepreneur, he brings a strategic vision with
practical operating and financial implications to the Board’s
discussions.
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Frederick M. Strader
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2014 to the present
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Business
consultant since 2013. Director of HDT Global from January to
September 2016; President and Chief Executive Officer of Textron
Systems, Inc. from January 2010 to December 2012; Executive Vice
President and Chief Operating Officer of Textron Systems, Inc. from
January 2008 to December 2009; President and Chief Executive
Officer of United Industrial Corporation from August 2003 to
December 2007; Chief Operating Officer and Executive Vice President
of United Industrial Corporation from 2001 to 2003. Prior to 2001,
he spent 21 years at United Defense, L.P. and its former parent,
FMC Corporation, in a variety of finance, strategy, operations and
general management positions. Retired U.S. Army Reserve officer and
member of the Army Acquisition Corps. Age 64.
Mr.
Strader’s experience in government contracting, leadership
and management of public companies, and service as a board member
provide him with unique insight and experience for the Board. Mr.
Strader is a highly experienced executive who has led several
companies serving the Department of Defense and other government
agencies. He also has significant experience in finance and the
government acquisition process which enable him to provide valuable
input for Versar’s strategic direction.
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Jeffrey A. Wagonhurst
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2011 to the present
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President
and Chief Operating Officer of Versar since February 2010;
Executive Vice President, Program Management Group of Versar from
May 2009 to February 2010; Senior Vice President of Versar from
September 2006 to May 2009; joined Versar as Army Program Manager
in February 1999; retired from government service in May 1997 as a
Colonel after a 30 year career with the U.S. Army. Age
69.
Mr.
Wagonhurst is an experienced business executive and leader who
brings the perspective and input of Versar’s operational
management to the Board’s discussions. As a long time Versar
executive and senior military officer, he provides a perspective
and insight from Versar’s largest client, the U.S. Department
of Defense.
Our
Corporate Governance Guidelines provide that each director nominee
must be under the age of 72 at the time of their election to the
Board and should not have served as a director for more fifteen
(15) years. However these requirements do not apply to any director
who was serving at the time of adoption of the guidelines in July
1, 2008.
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Executive Officers of the Registrant
The current executive officers of Versar, their ages as of June 30,
2017, their current offices or positions and their business
experience for at least the past five years are set forth
below.
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Anthony L. Otten
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61
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Chief Executive Officer
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Jeffrey A. Wagonhurst
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69
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President and Chief Operating Officer
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Christine B. Tarrago
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45
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Senior Vice President, Chief Financial Officer, Treasurer and
Principal Accounting Officer
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James D. Villa
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54
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Senior Vice President, General Counsel, Secretary and Chief
Compliance Officer
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Linda M. McKnight
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68
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Senior Vice President of Business Development
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Wendell A. Newton
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59
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Senior Vice President of Professional Services
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Suzanne J. Bates
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46
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Senior Vice President of Environmental Services
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Anthony L. Otten, BS, MPP,
joined Versar as Chief Executive Officer (CEO) in February 2010.
Prior to becoming CEO, he had served on Versar's Board of Directors
for two years as an independent board member. Mr. Otten served as
Managing Member of Stillwater, LLC from July 2009 to February 2011,
as an Operating Partner of New Stream Asset Funding, LLC from 2007
to June 2009 and Managing Member of Stillwater, LLC from 2004 to
2007. Mr. Otten has a Bachelor of Science degree from the
Massachusetts Institute of Technology and a Masters in Public
Policy from Harvard’s Kennedy School of Government. Mr. Otten
is an outside member of the board for Orion Energy Systems, Inc.
(NASDAQ: OESX).
Jeffrey A. Wagonhurst, BS, MBC,
MBA, MNSS, joined Versar in February 1999 as an Army Program
Manager. In 2001, he was elected Vice President of Human Resources
and Facilities. In September 2006, he was elected Senior Vice
President to lead our former Program Management business unit (now
ECM). In May 2009, Mr. Wagonhurst was promoted to Executive Vice
President, Program Management Group. In February 2010, Mr.
Wagonhurst was promoted to President and Chief Operating Officer of
Versar. Mr. Wagonhurst concluded his 30 year career with the U.S.
Army and retired in May 1997 as a Colonel. He commanded a Combat
Engineer Brigade and Battalion during his service as well as
previously serving as a Deputy District Commander of the Mobile
District, U.S. Army Corps of Engineers.
Christine B. Tarrago, BA, MBA,
CPA, joined Versar in June 2017 as Senior Vice President, Chief
Financial Officer, Treasurer, and Principal Accounting Officer. Ms.
Tarrago came to Versar from ICS Nett, where she served as Vice
President and Corporate Controller. Prior to that, Ms. Tarrago
served as Vice President Finance at K12, Inc. from March 2016 until
January 2017 and as Vice President Finance, Corporate Controller of
Lightbridge Communications Corporation from May 2011 to January
2016. She also has had leadership positions at companies including
Marlink, Siemens and ALSTOM.
James D. Villa, B.A. J.D.,
joined Versar in March 2014 as Senior Vice President, General
Counsel, Secretary, and Chief Compliance Officer. From 2011 to
2014, he served as Vice President and General Counsel of Colonial
Parking, Inc. From 2006 to 2010, he served as Vice President and
Chief Counsel of AOL, Inc., where he had responsibility for
litigation and regulatory matters. Prior to joining AOL, Mr. Villa
was a Trial Attorney in the Antitrust Division of the United States
Department of Justice and also served as a Special Assistant United
States Attorney in the Eastern District of Virginia. Mr. Villa was
formerly in private practice with several different law firms in
Washington, D.C. Mr. Villa served as a Captain in the United States
Army Reserve and served in Saudi Arabia and Kuwait in support of
Operations Desert Shield and Desert Storm. He has a Bachelor of
Arts degree from the University of Michigan and a Juris Doctor
degree from the University of Michigan Law
School.
Linda M. McKnight, AA, joined
Versar in April 2013 as Director of Business Development. In May of
2013, she was elected as Senior Vice President in charge of
business development and strategy. Ms. McKnight has more than 29
years of experience in sales and marketing for environmental,
engineering, construction, and logistics services in both domestic
and international markets. She has held senior management sales
positions with Tetra Tech and Kellogg Brown & Root (KBR) over
the past 24 years. From 2010 to 2013, she provided business
development consulting to firms focused on enhancing internal sales
processes to grow environmental and engineering services to federal
clients. Ms. McKnight is a Fellow and active member in the Society
of American Military Engineers and serves on the Board of the
Society's Academy of Fellows. She is the Immediate Past President
of Women in Defense, Capital Chapter.
Wendell Newton, BS, joined
Versar in July 2014 as Senior Vice President of the Professional
Services Group. From February 1999 to July 2014, Mr. Newton was the
Executive Vice President, Chief Operating Officer and one of the
three shareholders of J.M. Waller Associates, Inc. (JMWA). Mr.
Newton brings more than twenty-five years of experience in
leadership and management in the areas of contracts, operations,
finance, project management, human resources, and business
development. During his 15-year tenure with JMWA, Mr. Newton was
responsible for the executive leadership of the national
environmental, facilities and logistics consulting and management
groups. He served as senior-level management and provided oversight
of environmental and compliance projects as well as projects
involving development of facility requirements, master plans, land
use and infrastructure plans. He developed and executed capital
resource management plans including division and group annual
budgets and the management of the technical services support staff.
Mr. Newton also served as Vice President for JMWA Division managing
the company's professional services resources world-wide and
providing oversight to nearly 300 engineering, scientific,
management and professional support staff who serve JMWA federal
client base.
Suzanne Bates, B.S., M.S.,
joined Versar in September 2013 as a senior program manager and
lead operations manager. Currently, Suzanne serves as Senior Vice
President and Group Manager for Versar’s Environmental
Services Group. Prior to joining Versar, Suzanne served as the
Environmental Group Lead for Geo-Marine, Inc., (GMI) leading
programs and projects focused on the Department of Defense and
other federal agencies. She is a graduate of Texas A&M
University-Corpus Christi with a Bachelor of Science degree in
biology and chemistry and a Master of Science degree in marine
sciences.
For the purpose of calculating the aggregate market value of the
voting stock of Versar held by non-affiliates as shown on the cover
page of this report, it has been assumed that the directors and
executive officers of the Company and the Company’s 401(k)
Plan are the only affiliates of the Company. However, this is not
an admission that all such persons are, in fact, affiliates of the
Company.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section
16(a) of the Securities Exchange Act of 1934 (the “Exchange
Act”) requires Versar’s executive officers, directors
and persons who beneficially own more than 10% of Versar’s
Common Stock to file initial reports of ownership and reports of
changes in ownership with the SEC. Based solely on Versar’s
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 Exchange Act, and the rules and regulations
thereunder, during fiscal 2017, were timely filed, other than Ms.
Tarrago who inadvertently had a late filing of her Form 3. Ms.
Tarrago filed the Form 3 on October 24, 2017, which should have
been filed no later than June 12, 2017.
Audit Committee and Audit Committee Financial Expert
The
Audit Committee, which the Board has determined is composed
exclusively of non-employee directors who are independent, as
defined by the NYSE American LLC (“NYSE America”)
listing standards and the rules and regulations of the SEC,
consisted of Mr. Gallagher (Chair), Dr. Durfee, Mr. Hoeper and Mr.
Strader during fiscal 2017.
The
Committee’s primary responsibilities, pursuant to a written
charter, which is posted on the Company's website at www.versar.com
under Corporate Governance (located under the
“Investors” tab), are to provide oversight of the
Company’s accounting and financial controls, review the scope
of and procedures to be used in the annual audit, review the
financial statements and results of the annual audit, and retain,
and evaluate the performance of, the independent accountants and
the Company’s financial and accounting personnel. The Board
of Directors has determined that Mr. Strader qualifies as an Audit
Committee Financial Expert as such term is defined under Item
407(d)(5) of Regulation S-K and is independent as noted
above.
Code of Business Ethics and Conduct
The
Company’s Board has adopted a Code of Business Ethics and
Conduct, most recently restated in April 2016, that applies to all
directors and employees, including the Company’s principal
executive officer, principal financial officer, principal
accounting officer and controller. The Code of Business Ethics and
Conduct is posted on the Company’s web site www.versar.com
under Corporate Governance (located under the
“Investors” tab). The Company intends to disclose on
its website any amendments or modifications to the Code of Business
Ethics and Conduct and any waivers granted under this Code to its
principal executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar
functions. In fiscal 2017 and through the date of this Annual
Report, no waivers have been requested or granted.
Item 11. Executive Compensation
COMPENSATION DISCUSSION AND ANALYSIS
Overview
The
following Compensation Discussion and Analysis reviews the
executive compensation program, policies and decisions of the
Company’s Compensation Committee with respect to the
Company’s executive officers listed in the Summary
Compensation Table below (the “Named Executive
Officers”). The named executive officers of the Company as of
the end of fiscal 2017 are:
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Name
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Position
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Anthony
L. Otten
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Chief
Executive Officer
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Jeffrey
A. Wagonhurst
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President
and Chief Operating Officer
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James
D. Villa
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Senior
Vice President, General Counsel, Secretary and Chief Compliance
Officer
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Ms.
Cynthia Downes served as Executive Vice President, Chief Financial
Officer and Treasurer of the Company until June 1,
2017.
Executive Compensation Philosophies and Policies
The
compensation philosophy of the Compensation Committee (the
“Committee”) is built on the principles of pay for
performance, stock ownership and alignment of management interests
with the long-term interest of the Shareholders. The
Committee’s executive compensation policies are designed to
provide competitive levels of compensation that integrate pay with
performance, recognize individual initiative and achievements and
assist the Company in attracting and retaining qualified executive
officers. The target levels of new executive officers’
overall compensation are intended to be aligned with and
benchmarked against compensation in the professional services
industry for similar executives. In addition, the Committee seeks
to provide a clear and transparent executive compensation process
that reflects the understanding, input and decision factors that
make the compensation and incentive system a valuable tool to
increase shareholder value.
The
Company’s executive compensation program includes three
components:
●
Base
Salary – Salaries are benchmarked against those paid to other
executives in the professional services industry as determined
based on information provided from time to time by the
Committee’s compensation consultant, as described
below.
●
Long-Term
Equity Incentive Awards – The purpose of this element of the
Company’s executive compensation program is to link the
Company’s most senior managers’ compensation with the
long-term interests of the Company’s shareholders, as well as
the performance of the Company in a single fiscal year. Long-term
incentive awards may be granted to named executive officers and
other employees usually in the form of restricted stock or
restricted stock units from a pool established under an incentive
pay for performance plan at the beginning of each fiscal year by
the Committee and approved by the Board. The Committee bases its
decision to grant such awards, if a pool is established, on the
individual’s performance and potential to contribute to the
creation of Shareholder value. In February 2015, the Committee
approved a Long-Term Incentive Compensation Program under which
long-term incentive awards in the form of restricted stock units
may be granted to the Company’s Chief Executive Officer,
President/Chief Operating Officer and Chief Financial Officer based
on a formula if the Company achieves certain defined growth in
diluted earnings per share each year. The Long-Term Incentive
Compensation Program was effective from fiscal 2015 through fiscal
2017. The Company had a similar program that operated for fiscal
2011 through 2014.
●
Non-Equity
Incentive Plan Compensation – Non-equity incentive plan
compensation is paid in cash pursuant to the above-noted incentive
pay for performance plan and seeks to reward performance achieved
during the applicable fiscal year. This pay for performance
incentive plan balances the short-term and long-term needs of the
Company. Under the non-equity incentive plan compensation element
of the plan, a cash incentive pool is recommended each fiscal year
upon the Company’s attainment of certain financial targets
set by the Board. If the Company meets the targets, the Committee
then determines the allocation of a pre-determined portion of the
cash incentive pool among the executive officers based on each
executive officer’s position and individual contribution to
the Company’s performance. Each executive officer’s
performance is measured against financial, profitability, growth,
strategic and operational goals consistent with the Company’s
business plan. For the immediate future, greater emphasis is
focused on the short-term well-being of Versar in determining the
allocation of cash awards to executive officers.
Impact of 2016 “Say on Pay” Advisory Vote.
We
provided our shareholders with an advisory “say on pay”
vote on the compensation of our named executive officers at our
2016 Annual Meeting of Shareholders held on June 29, 2017.
Approximately 77.1% of shares eligible to vote with respect to this
matter (treating broker non-votes as ineligible) were voted in
support of our executive compensation. The Compensation Committee
evaluated the results of this vote when making the determinations
described herein and, as a result, the Compensation Committee has
continued to apply substantially similar effective principles and
philosophy it has used in previous years in determining executive
compensation and made no material changes in fiscal 2017. The
Compensation Committee will continue to consider shareholder
concerns and feedback in the future.
Incentive Compensation Philosophy and Policies
Incentive Compensation Pay For Performance Plan
Typically,
the Committee annually establishes a company-wide Incentive
Compensation Pay For Performance Plan (“Incentive
Plan”) at its first meeting held during the fiscal year. The
Incentive Plan is based on a set of general principles that apply
to all elements of compensation and establish the rules for
awarding non-equity incentive plan compensation and stock-based
compensation. The Incentive Plan consists of two parts: the first
part is a written Incentive Compensation Plan, which was adopted in
September 2010 and, the second part consists of annual general
principles and guidelines for incentive compensation, including
performance criteria, defined incentive groups and the target
percentages of the pool to be allocated to each group for the
fiscal year. The guidelines applicable to all elements of the
Company’s compensation program and that apply directly to the
Incentive Plan each year include:
●
The
senior management team’s compensation is linked to
Versar’s profitability, growth and strategic
position;
●
The
Incentive Plan’s key concept, pay for performance, balances
short-term needs and long-term goals of the Company and the senior
management team;
●
The
Pay For Performance concept is applicable to all elements of
compensation, including base salary and merit increases, non-equity
incentive plan compensation and restricted stock
awards;
●
The
Incentive Plan is simple, rational, consistent and based on
agreed-upon measurable parameters;
●
The
Incentive Plan is based upon the Company’s achievement of
certain levels of pre-tax income; and
●
The
Incentive Plan is driven by a combination of metrics, depending on
the level of management. The intent is that all levels of senior
management have a significant portion of their compensation tied to
the Company’s performance.
For
fiscal 2017, the Committee determined that individual Incentive
Plan awards would be based 10% to 65% on financial goals
emphasizing the short-term well-being of Versar and 35% to 90% upon
meeting strategic growth and sustainability goals of Versar over a
longer period.
Restricted Stock Awards. Awards of restricted stock or
restricted stock units (“restricted stock”) take into
account both past performance and the need to provide the executive
officers, other managers and key employees with an incentive to
drive future performance of the Company. Restricted stock is also
used as an incentive for future performance and long-term retention
and commitment to the Company’s future. Restricted stock
awards are currently made under the Company’s 2010 Stock
Incentive Plan. While this Plan allows the use of stock options and
other forms of stock-based awards, the Committee has determined
that all awards will currently be in the form of restricted stock
and restricted stock units, because restricted stock provides an
opportunity to tie employees’ incentives to the growth of
Shareholder value while potentially having less of an impact than
stock options from an accounting standpoint on the earnings of the
Company.
In the
fiscal 2017 Incentive Plan, the number of restricted shares
available for award was based on the same measure used to establish
the size of the cash bonus pool, subject to a minimum and maximum
award range. For fiscal 2017, the minimum pool for restricted stock
awards was set at 25,000 shares and the maximum pool was 175,000
shares. Shares of restricted stock are awarded from the pool at the
discretion of the Compensation Committee. In light of the
Company’s financial condition at the end of fiscal 2017, no
pool was established for fiscal 2018.
Non-Equity Incentive Plan Compensation. Under the Incentive Plan, if the
Company meets the minimum pre-tax income targets set in advance by
the Board, then a non-equity incentive plan compensation pool is
created. For fiscal 2017, the Board set the sole criteria for the
creation of the non-equity incentive plan compensation pool as the
Company’s pre-tax income. The minimum goal for fiscal 2017
was $950,000 in pre-tax income, with a non-equity incentive plan
compensation pool of $95,000 at that level. The non-equity
incentive plan compensation pool was designed to increase as
pre-tax income reached higher levels so that at $2,000,000 of
pre-tax income, a $500,000 non-equity incentive plan compensation
pool would be created. An executive officer’s participation
in the pool, if any, is based on achievement of individually
designed performance criteria. The Board and Compensation Committee
did not establish an incentive compensation plan for fiscal 2018.
While the Company believed that the fiscal 2017 target was
challenging but attainable when adopted, based on performance in
fiscal 2017, no bonus pool was created.
Long-Term Incentive Compensation Program
On
February 3, 2015, the Committee approved the Versar, Inc. 2015
Long-Term Incentive Compensation Program (the “LTICP”)
adopted under the Company’s 2010 Stock Incentive Plan (the
“2010 Plan”). The LTICP was effective as of June 28,
2014. The LTICP provides for the creation for each of fiscal 2015,
2016 and 2017 of a performance pool equal to 30% of the amount by
which the Company’s diluted earnings per share exceeds that
fiscal year’s target diluted earnings per share (which was
$0.299 for the 2015 Performance Period, $0.329 for the 2016
Performance Period and $0.362 for the 2017 Performance Period),
times the weighted average number of the Company’s common
stock outstanding, on a diluted basis (the “LTICP
Pool”). The LTICP Pool shall in no event be less than zero
for any fiscal year. To the extent that the LTICP Pool is zero in
any fiscal year covered by the LTICP, no LTICP Pool will be created
for the subsequent fiscal year.
In any
year that an LTICP Pool is created, each participant in the LTICP
may receive a restricted stock award pursuant to the 2010 Plan. The
number of shares of restricted stock received by each participant
will be calculated by multiplying the LTICP Pool by each
participant’s designated percentage and then dividing the
result by the fair market value of the Company’s common stock
on the last day of the fiscal year to which the award relates. Each
participant must be employed by the Company on the date the award
amounts are determined in order to be eligible to receive an award,
except as specified by the LTICP. The participants in the LTICP are
the Company’s Chief Executive Officer, President/Chief
Operating Officer and Chief Financial Officer and their
participation percentages are 60%, 25% and 15%, respectively,
subject to change by the Compensation Committee for any fiscal
year.
One
third of the restricted shares granted from the LTICP Pool will
vest immediately following the Compensation Committee meeting at
which such award is confirmed, and the remaining restricted shares
will vest in equal proportions on the first and second
anniversaries of the valuation date applicable to the restricted
share award. Such restricted stock shall be forfeited if employment
is terminated prior to vesting upon the terms set forth in the
award agreement. Any unvested restricted shares will be subject to
accelerated vesting if the Company’s board of directors
determines in its discretion that the award recipients have
complied with the terms of and objectives as set forth in the
LTICP. Further, vesting will be suspended in any year in which the
LTICP Pool is equal to zero or, in periods following fiscal 2017,
if the Company fails to achieve the performance measures then
established for that fiscal year. If in a succeeding performance
period, as defined by the LTICP, an LTICP Pool is created, the
previously suspended restricted stock awards will vest.
Participation in the LTICP will generally cease upon termination of
a participant’s service with the Company provided that if a
participant’s service with the Company is terminated without
cause, or by the participant for good reason, or as a result of
retirement, death or disability after the end of a fiscal year but
before the receipt of restricted shares under the LTICP has been
determined, such participant will continue to participate and
receive restricted shares from the LTICP Pool for the then
completed fiscal year as if a continuing employee of the Company at
that time. Upon a Change in Control, as defined by the 2010 Plan,
all participation in the LTICP will cease and no further awards
will occur. However, upon a Change in Control, any unvested
restricted shares previously granted pursuant to the LTICP will
immediately vest.
Compensation Process
Incentive Compensation Pay For Performance Plan
As
noted above, in establishing the annual Incentive Plan, the
Committee annually reviews the overall compensation of senior
management, as well as the size and composition of the non-equity
portion and stock-based award portion of the Incentive Plan at the
beginning of each fiscal year.
At the
same time, the Committee gathers data regarding the Company’s
performance during the immediately preceding fiscal year to
determine the awards to be made under the Incentive Plan for that
then completed fiscal year.
In
making its compensation decisions, the Committee has historically
engaged the services of Steve Parker of HR-3D, a compensation
consulting firm. Mr. Parker compiles information from publicly
available compensation surveys and benchmarks, including those
prepared by Willis Towers Watson, Radford Surveys & Consulting,
and Culpepper and Associates, Inc., regarding companies in the
professional services industry. The compilation prepared by Mr.
Parker, last updated in January 2016, included benchmarked
compensation data for different executive levels of professional
services companies of various sizes and in various geographic
locations, but did not include the names of the individual
companies whose salary data is utilized to compile the survey data.
The publicly available compensation surveys and benchmarks used to
prepare the compilation were chosen by Mr. Parker based on general
direction from the Committee. Under the direction of Dr. Metry, Mr.
Parker provided detailed information by type of executive position
focused on professional service companies with revenues in a range
similar to that targeted by Versar over the same period. The
compilation included an average of the mid-range of salaries and
bonus percentages for the various executive levels within the
professional services industry. In making compensation decisions,
the Committee’s goal is to over time provide for
executives’ salaries and bonuses within a particular range
based on averages as supported by the compilation.
The
Committee also considers the accounting and tax impact to the
Company of the proposed compensation. Section 162(m) of the
Internal Revenue Code has not been a relevant factor in the
Committee’s compensation decisions to date, 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, it would seek advice
regarding application and impact of Section 162(m). In setting
compensation, the Committee also considers ways to minimize the
adverse tax consequences from the impact of Section 409A of
the Internal Revenue Code. If an executive officer is entitled to
nonqualified deferred compensation benefits, as defined by and
subject to Section 409A, and such benefits do not comply with
Section 409A, such executive officer would be subject to
adverse tax treatment (including accelerated income recognition in
the first year that benefits are no longer subject to a substantial
risk of forfeiture) and a 20% penalty tax. Versar’s
compensation plans and programs are, in general, designed to comply
with the requirements of Section 409A so as to avoid possible
adverse tax consequences.
Long-Term Incentive Compensation Program
The
Committee annually reviews the LTICP in order to determine if the
mechanics of the plan, including the calculation of the LTICP Pool
and the vesting schedule of awards, remain appropriate, and to
determine if the participants in the pool and their respective
participation percentages should be modified. Otherwise, as the
process in which awards are granted under the terms of the LTICP is
fixed pursuant to the terms of the LTICP, the Committee has no
further discretion with respect to awards under the
LTICP.
Compensation Decisions
Base Salary
For
current executive officers, the Committee intends to focus on
providing significant incentive compensation to drive the
Company’s performance rather than annual base salary
increases, except as required in the case of misaligned salary
levels or as deemed necessary following review of the
executives’ overall compensation packages. Given the
Company’s current financial situation, the Committee
determined not to make any changes to base salaries, and has sought
to reduce other prerequisites as appropriate.
Stock Based Awards (including Long-Term Incentive Compensation
Program)
Restricted
stock or restricted stock units may be awarded to executive
officers pursuant to the terms of the annual Incentive Plan and the
LTICP if the specified criteria are met. In fiscal 2017, the
Company did not achieve the targets necessary to trigger the award
of restricted stock or restricted stock units under the 2017
Incentive Plan and the LTICP. However, to provide continuing
performance incentives to management to address the Company's
financial condition and lender requirements, the Committee made a
discretionary award of resricted stock units to Mr. Wagonhurst
(2500 shares), Ms. Downes (2500 shares), and Mr. Villa (1500
shares) in fiscal 2017.
Non-Equity Incentive Plan Compensation
In
fiscal 2017, the Company did not achieve the targets necessary to
trigger the accrual of a bonus pool under the 2017 Incentive Plan.
Thus, no non-equity incentive plan compensation was paid to the
named executive officers for fiscal 2017.
Summary Compensation Table
The
following table presents compensation information earned by the
Company’s Principal Executive Officer, Principal Financial
Officer, each of the Company’s three other most highly
compensated executive officers during the fiscal year ended June
30, 2017, and compared with the two prior years. We refer to these
executive officers as our named executive officers in this Annual
Report.
|
Name
and Principal Position
|
Year
|
Salary ($)(1)
|
Bonus ($)
|
Stock
Awards ($)(2)
|
All
Other
Compensation ($)(3)
|
Total ($)
|
|
Anthony L.
Otten
Chief Executive
Officer
|
2017
|
375,000
|
-
|
-
|
25,379
|
400,379
|
|
Anthony L.
Otten
Chief Executive
Officer
|
2016
|
375,000
|
-
|
84,305
|
36,775
|
496,080
|
|
Jeffrey A.
Wagonhurst
President and Chief
Operating Officer
|
2017
|
270,000
|
-
|
2,925
|
21,418
|
294,343
|
|
Jeffrey A.
Wagonhurst
President and Chief
Operating Officer
|
2016
|
270,000
|
-
|
32,585
|
30,923
|
339,508
|
|
Cynthia A.
Downes
Former Executive
Vice President and Chief Financial Officer
|
2017
|
230,000
|
-
|
5,265
|
212,468
|
447,733
|
|
Cynthia A.
Downes
Former Executive
Vice President and Chief Financial Officer
|
2016
|
230,000
|
-
|
40,170
|
23,161
|
293,331
|
|
James D.
Villa
Senior Vice
President,
General Counsel and
Chief Compliance Officer
|
2017
|
210,000
|
-
|
8,606
|
9,163
|
227,769
|
|
James D.
Villa
Senior Vice
President,
General Counsel and
Chief Compliance Officer
|
2016
|
210,000
|
-
|
22,763
|
18,210
|
250,973
|
(1)
Includes regular
base salary earnings for fiscal 2017 and 2016.
(2)
Amounts shown are
the aggregate grant date fair value of time-based restricted stock
unit awards computed in accordance with FASB ASC
Topic 718.
(3)
Consists of the
following: Any severance payments, payments for accrued personal
time off after leaving the Company, Company contributions to health
insurance, Company paid life insurance, Company paid disability,
Company HSA contribution, and Company match to employee’s
401(k) Plan contribution.
Outstanding Equity Awards at Fiscal Year-End
|
|
Option
Awards
|
Stock
Awards
|
|||
|
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Option
Exercise Price
($)
|
Option
Expiration Date
|
Number
of Shares or Units of Stock That Have Not Vested
(#)
|
Market
Value of Shares or Units of Stock That Have Not Vested
($)
|
|
Anthony L.
Otten
|
0
|
-
|
-
|
9,000
|
13,410
|
|
Jeffrey A.
Wagonhurst
|
0
|
-
|
-
|
2,500
|
3,725
|
|
Cynthia A.
Downes
|
0
|
-
|
-
|
0
|
0
|
|
James D.
Villa
|
0
|
-
|
-
|
1,500
|
2,235
|
(1)
Based on the Fair
Market Value of the Company’s Common Stock (based on the
closing price for the Common Stock on the NYSE American) on June
30, 2017 of $1.49 per share.
Stock Vested
|
Name
|
Number of Shares Acquired on Vesting (#)(2)
|
Value Realized on Vesting ($)(1)
|
|
Anthony
L. Otten
|
9000
|
6,750
|
|
Jeffrey
A. Wagonhurst
|
2500
|
1,875
|
|
Cynthia
A. Downes
|
0
|
0
|
|
James
D. Villa
|
1500
|
1,125
|
(1)
Calculated
by multiplying the number of shares by the fair market value of the
Company’s Common Stock (based on the closing price for the
Common Stock on the NYSE American) on the first trading day
following the date of vesting of $0.75 per share.
(2)
Represents the
shares that vested on September 2, 2017 from the restricted stock
unit award granted on September 2, 2016.
Director Compensation Fiscal Year 2017
During
fiscal 2017, each of the Company’s non-employee directors
received an annual fee consisting of $8,000 in cash, plus the grant
of 8,500 shares of restricted stock, all of which vest over a
one-year period. Each non-employee director was paid an attendance
fee of $1,400 in cash for each meeting of the Board or of its
committees for which the director was physically present and $700
in cash for each meeting attended telephonically. In addition, the
Chairs of the Audit, Compensation and Nominating & Governance
Committees were paid an additional $6,000 a year in cash as
compensation for increased responsibility and work required in
connection with those positions. The non-employee Chairman of the
Board was paid an additional $15,000 in cash and was granted an
additional 6,000 shares of restricted stock for additional
responsibilities and efforts on behalf of the Company.
|
Name (1)
|
Fees Earned or Paid in Cash ($)(2)
|
Stock Awards ($) (3)
|
Total ($)
|
|
Paul J.
Hoeper
|
39,100
|
870
|
39,970
|
|
Robert L.
Durfee
|
26,900
|
510
|
27,410
|
|
James L.
Gallagher
|
30,100
|
510
|
30,610
|
|
Amoretta M.
Hoeber
|
30,100
|
510
|
30,610
|
|
Amir A.
Metry
|
30,100
|
510
|
30,610
|
|
Frederick M.
Strader
|
26,200
|
510
|
26,710
|
(1)
Anthony L. Otten
and Jeffrey A. Wagonhurst are not included in this table because as
employees of Versar, they receive no extra compensation for their
service as directors. Their compensation for fiscal 2017 is shown
on the Summary Compensation Table included herein
above.
(2)
Includes all fees
earned or paid for services as a director in fiscal 2017, including
annual retainer, committee or Board chair fees and meeting
fees.
(3)
Represents the
grant date fair value of shares of restricted stock granted in
fiscal 2017 which is the amount recognized for financial reporting
purposes in accordance with Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification Topic 718
(“Topic 718”). In accordance with Topic 718, the grant
date fair value of each share of restricted stock is based on the
closing price of Versar's Common Stock on the date of the grant,
November 14, 2016 for all stock awards, which was $0.06 per share.
Restricted stock awarded to Directors in fiscal 2017 vested on June
28, 2017, the day before the anticipated first annual meeting of
shareholders after the date of grant.
At the
end of fiscal 2017, the non-employee directors owned the following
number of unvested shares of restricted stock:
|
NAME
|
Unvested Restricted Stock Awards
|
|
Paul J.
Hoeper
|
13,000
|
|
Robert
L. Durfee
|
8,000
|
|
James
L. Gallagher
|
8,000
|
|
Amoretta
M. Hoeber
|
8,000
|
|
Amir A.
Metry
|
8,000
|
|
Frederick
M. Strader
|
8,000
|
Change in Control Agreements
The
Company has entered into Change in Control Severance Agreements
(the “Change in Control Agreements” and each a
“Change in Control Agreement”) with each of Anthony L.
Otten, Jeffrey A. Wagonhurst, James D. Villa, Linda M. McKnight,
Alessandria Albers and Christine B. Tarrago (each, for purposes of
this section, an “Executive”). The Change in Control
Agreements provide for the following severance payments and
benefits upon a termination of employment by the Company without
Cause or a resignation by the executive officer for Good Reason, in
each case, during the term of the agreement, following a change in
control or a potential change in control (as such terms are defined
within the respective Change in Control Agreements):
●
Except
with respect to Ms. Albers and Ms. Tarrago, a cash payment equal to
two (2) times the executive's annual base salary in effect for the
respective Executive when employment ends, or, if higher, the
annual base salary in effect immediately before the change in
control, potential change in control or Good Reason event (as each
such term is defined in each Change in Control
Agreement);
o
Under
the terms of the Change in Control Agreement with Ms. Albers, she
would receive an amount of cash equal to one (1) year of her base
salary in lieu of the above payment;
o
Under
the terms of the Change in Control Agreement with Ms. Tarrago, she
would receive an amount of cash equal to nine (9) months of her
base salary in lieu of the above payment;
●
For
Executives other than Ms. Tarrago, a cash payment equal to two
(2) times the 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 the change occurred;
●
A
cash payment for any amounts accrued under any other incentive
plan;
●
For
Executives other than Ms. Tarrago, a continuation for
twenty-four (24) months of the life, disability and accident
benefits the Executive was receiving before the end of his or her
employment;
●
For
Executives other than Ms. Tarrago, a continuation for eighteen
(18) months of the health and dental insurance benefits he or
she was receiving before the end of his or her
employment;
●
For
Executives other than Ms. Tarrago, a lump sum cash payment of
$16,000 in lieu of medical benefits made available by the Company
to its officers;
●
All
unvested options will immediately vest and remain exercisable for
the longest period of time permitted by the applicable stock option
plan; and,
●
All
unvested Company Restricted Stock awards will immediately
vest.
Payments
made pursuant to the Change in Control Agreements will be paid out
in in a lump sum payment within five days after the day the
Executive becomes entitled to severance benefits under the Change
in Control Agreement. If the amount due cannot be finally
determined in that time, the Executive will receive the minimum
amount to which he or she is clearly entitled as estimated in good
faith by the Company, and the balance would be paid no later than
30 days following the severance date. The following terms have the
following meanings in the Change in Control
Agreements:
"Cause"
means any of the following:
(1) The
Executive fails to carry out assigned duties after being given
prior warning and an opportunity to remedy the
failure;
(2) The
Executive breaches any material term of any employment agreement
with the Company;
(3) The
Executive engages in fraud, dishonesty, willful misconduct, gross
negligence, or breach of fiduciary duty (including without
limitation any failure to disclose a conflict of interest) in the
performance of his or her duties for the Company; or
(4) The
Executive is convicted of a felony or crime involving moral
turpitude.
"Good
Reason" means the occurrence of any of the following events arising
without the Executive's consent:
(1) Demotion:
The Executive's duties and responsibilities are materially and
adversely altered from those in effect immediately before the
change in control (or, the potential change in control), or there
is a material and adverse change in the Executive's reporting
responsibilities or in the size of the budget the Executive
administers in effect immediately before the change in control (or,
the potential change in control), provided that no demotion will be
deemed to occur solely as a result of the Company ceasing to be a
public company, a change in the Executive's title, or the
Executive's transfer to an affiliate.
(2) Pay
Cut: The Executive's annual base salary is materially
reduced.
(3) Relocation:
The Executive's principal office is materially relocated, which
increases the Executive's one-way commute to work by more than
fifty (50) miles, based on the Executive's residence when the
transfer was announced.
(4) Breach
of Contract: The Company materially breaches the Change in
Control Agreement, the Executive's employment agreement or any
other agreement between Executive and the Company pursuant to which
the Executive performs services for the Company or compensation and
benefits are provided to the Executive.
(5) Improper
Termination: The Company terminates the Executive's
employment, other than pursuant to a notice of termination
satisfying the requirements of provisions of the Change in Control
Agreement.
In
connection with that certain Agreement and Plan of Merger, dated as
of September 22, 2017, as subsequently amended and restated on
September 27, 2017, by and among Kingswood Genesis Fund I, LLC, KW
Genesis Merger Sub, Inc. and the Company (the “Merger
Agreement”), the Company has entered into amendments to the
Change in Control Severance Agreements (as amended, the
“Amended Change in Control Agreements” and each an
“Amended Change in Control Agreement”) with each
Executive. The Amended Change in Control Agreements (except as
otherwise noted) will be effective upon the closing of the
transactions contemplated by the Merger Agreement and alter the
payment timing set forth in the agreements for payments made as a
result of the transactions contemplated by the Merger Agreement.
Under the terms of the Amended Change in Control Agreement with Mr.
Otten, he would receive an amount of cash equal to $390,625 in lieu
of the above cash payment. Payments made pursuant to the Amended
Change in Control Agreements will be paid out in equal bi-weekly
installments over two payment periods following the Executive's
termination of employment.
The
following table estimates and summarizes potential payments and
benefits, other than the benefits ordinarily available to salaried
employees, that Mr. Otten would have received had his employment
been terminated on the last day of fiscal 2017 under the
circumstances described below.
|
|
Salary
$
|
Bonus
$
|
Benefits
$(1)
|
|
Termination or
resignation following a change of control
|
750,000
|
0
|
45,486
|
|
Termination or
resignation following a potential change of control
|
750,000
|
0
|
45,486
|
|
Successor fails to
assume the contract
|
750,000
|
0
|
45,486
|
(1)
Payment for benefit
costs paid by the Company on behalf of Mr. Otten that are not
generally available to other employees for insurance and medical
benefits calculated based on current applicable
premiums.
The
following table estimates and summarizes potential payments and
benefits, other than the benefits ordinarily available to salaried
employees, that Mr. Wagonhurst would have received had his
employment been terminated on the last day of fiscal 2017 under the
circumstances described below.
|
|
Salary
$
|
Bonus
$
|
Benefits
$(1)
|
|
Termination or
resignation following a change of control
|
540,000
|
0
|
47,176
|
|
Termination or
resignation following a potential change of control
|
540,000
|
0
|
47,176
|
|
Successor fails to
assume the contract
|
540,000
|
0
|
47,176
|
(1)
Payment for benefit
costs paid by the Company on behalf of Mr. Wagonhurst that are not
generally available to other employees for insurance and medical
benefits calculated based on current applicable
premiums.
The
following table estimates and summarizes potential payments and
benefits, other than the benefits ordinarily available to salaried
employees, that Mr. Villa would have received had his employment
been terminated on the last day of fiscal 2017 under the
circumstances described below.
|
|
Salary
$
|
Bonus
$
|
Benefits
$(1)
|
|
Termination or
resignation following a change of control
|
420,000
|
0
|
21,333
|
|
Termination or
resignation following a potential change of control
|
420,000
|
0
|
21,333
|
|
Successor fails to
assume the contract
|
420,000
|
0
|
21,333
|
(1)
Payment for benefit
costs paid by the Company on behalf of Mr. Villa that are not
generally available to other employees for insurance and medical
benefits calculated based on current applicable
premiums.
Risk Oversight
Management
of risk is the direct responsibility of the Company’s CEO and
the senior management team. The Board has oversight responsibility
focusing on key enterprise risk management issues and evaluating
the risk mitigation processes established by senior
management.
Versar
faces a variety of enterprise risks, including legislative and
regulatory risk, liquidity risk, compliance risk and operational
risk. The Board believes that an effective risk management process
should (1) identify in a timely fashion the material risks facing
the Company, (2) communicate to the Board the relevant information
regarding senior executive management strategies and their
associated risks, (3) implement appropriate and responsive risk
management strategies consistent with the Company’s risk
profile, and (4) integrate risk management throughout the
Company’s decision-making processes.
In
addition to the formal compliance program, the Board and senior
management promote a corporate culture that incorporates risk
management into the Company’s corporate strategy and daily
operations. The Board also continually works, with the input of
senior management, to assess and analyze the most likely areas of
future risk for the Company. We believe that the Board’s
leadership structure, including strong Board committee chairs and
open communication between senior management and directors,
promotes effective oversight of Versar’s risk management
program.
During
fiscal 2017, the Compensation Committee considered the impact of
the Company’s executive compensation policies and practices,
and the incentives created by its policies and practices, on the
Company’s risk profile, and concluded that such policies and
practices do not motivate imprudent risk taking. In addition, the
Committee periodically reviews all of the Company’s
compensation policies and procedures, including the incentives they
create, and factors that may reduce the likelihood of excessive
risk taking, to determine whether they present a significant risk
to the Company. In conducting this review, the Committee also
reviews the compensation program for any design features which have
been identified by experts as having the potential to encourage
excessive risk-taking, including:
●
excessive
focus on equity;
●
compensation
mix overly weighted toward annual incentives;
●
highly
leveraged payout curves and uncapped payouts;
●
unreasonable
goals and thresholds; and
●
steep
payout cliffs at performance levels that may encourage short-term
business decisions to meet payout thresholds.
In
reaching its conclusion, the Committee identified several features
of its compensation program that reduce the likelihood of excessive
risk taking:
●
the
Company’s program and policies are designed to provide a
balanced mix of cash and restricted equity, annual and longer-term
incentives;
●
maximum
payout levels for non-equity incentive plan compensation are capped
based on a review of the Company’s economic position and
prospects, as well as the benchmarking of compensation offered by
comparable companies; and
●
the
Committee has discretion to alter, including to reduce, incentive
plan payouts or make discretionary awards.
Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
Stock Ownership of Certain Beneficial Owners
The
table below sets forth, as of October 16, 2017, the only persons
known by the Company to be the beneficial owners of more than 5% of
the outstanding shares of Common Stock.
|
Name and Address of
Beneficial Owner
|
Amount and Nature of Beneficial Ownership
|
Percent of Class of Stock
|
|
Kingswood
Capital Management, LLC (1)
11777
San Vicente Blvd.
Suite
650
Los
Angeles, CA 90049
|
2,259,099
|
22.37
|
|
Ridgedale
Partners, LLC (2)
1999
Avenues of the Stars
Suite
2040
Los
Angeles, CA 90067
|
985,000
|
9.75
|
|
Wedbush,
Inc. (3)
1000
Wilshire Boulevard
Los
Angeles, California 90017
|
698,514
|
6.91
|
|
Dr.
Robert L. Durfee (4)
6850
Versar Center
Springfield,
VA 22151
|
589,023
|
5.83
|
|
Illinois
Municipal Retirement Fund (5)
2211
York Road, Suite 500
Oak
Brook, IL 60523
|
557,335
|
5.52
|
(1)
The information
with respect to the shares of Common Stock held by Kingswood
Capital Management, LLC (“Kingswood”) is based on a
filing made on Schedule 13G on October 2, 2017 with the U.S.
Securities and Exchange Commission (the “SEC”) by
Kingswood on behalf of itself and Kingswood Genesis Fund I, LLC, KW
Genesis Merger Sub, Inc. and Alexander M. Wolf (collectively with
Kingswood, the “Kingswood Reporting Persons”). The
Kingswood Reporting Persons report shared voting and dispositive
power as to 2,259,033 shares, held beneficially through a warrant
and via Tender and Support Agreements. The Kingswood Reporting
Persons expressly disclaim beneficial ownership of the 1,250,668
shares subject to Tender and Support Agreements.
(2)
The information
with respect to the shares of Common Stock held by Ridgedale
Partners, LLC (“Ridgedale”) is based on a filing made
on Schedule 13G on October 6, 2017 with the SEC by Ridgedale.
Ridgedale reports sole voting power as to 985,000 shares and sole
dispositive power as to 985,000 such shares.
(3)
The information
with respect to the shares of Common Stock held by Wedbush, Inc. is
based on filings made on Schedule 13G/A on February 15, 2017
with the SEC by Wedbush, Inc., Edward W. Wedbush and
Wedbush Securities, Inc. (collectively,
“Wedbush”) filing as a group. Wedbush reports that
Wedbush, Inc. has sole voting and sole dispositive power as
to 218,268 shares. Edward W. Wedbush has the sole voting
and sole dispositive power as to 365,255 shares. Wedbush
Securities, Inc. has sole voting and sole dispositive power as to
zero shares. Wedbush, Inc. has shared voting and dispositive
power as to 218,268 shares. Edward W. Wedbush has shared voting
power as to 583,523 and shared dispositive power as to 698,514
shares. Wedbush Securities, Inc. has shared voting power
as to 218,268 shares and shared dispositive power as to
328,259.
(4)
For a description
of the nature of the beneficial ownership of Dr. Durfee, see
“Stock Ownership of Directors and Officers” below. The
information with respect to shares of Common Stock held by Dr.
Durfee is based upon filings with the SEC and information supplied
by Dr. Durfee.
(5)
The information
with respect to the shares of Common Stock held by Illinois
Municipal Retirement Fund (“IMRF”) is based on filings
made on Schedule 13G on February 11, 2013 with the SEC by IMRF.
IMRF reports sole voting and shared dispositive power with respect
to all such shares.
Stock Ownership of Directors and Officers
The
following table sets forth certain information regarding the
ownership of Versar's Common Stock by the Company’s Directors
and each named executive officer listed in the Summary Compensation
Table, each nominee for Director and the Company's Directors and
executive officers as a group, as of October 16, 2017.
|
Individual or Group
|
Shares of Common Stock Beneficially Owned as of October 16, 2017
(1)
|
|
|
Number (5)
|
Percent
|
|
|
Paul J.
Hoeper
|
153,590
|
1.52
|
|
Robert
L. Durfee
|
589,023
|
6.00
|
|
James
L. Gallagher
|
75,390
|
*
|
|
Amoretta
M. Hoeber
|
73,790
|
*
|
|
Amir A.
Metry
|
91,519
|
*
|
|
Anthony
L. Otten (2)
|
137,442
|
1.36
|
|
Frederick
M. Strader
|
42,000
|
*
|
|
Jeffrey
A. Wagonhurst
|
87,346
|
*
|
|
Christine
B. Tarrago
|
0
(3)
|
*
|
|
James
D. Villa (4)
|
24,180
|
*
|
|
Linda
M. McKnight
|
26,498
|
*
|
|
All
directors and executive officers as a group (11 persons)
(4)
|
1,317,778
|
13.05
|
* =
Less than 1%
(1)
For the purposes of
this table, beneficial ownership has been determined in accordance
with the provisions of Rule 13d-3 under the Securities and Exchange
Act, as amended. The table includes all unvested shares of
restricted stock and restricted stock units owned by the
individual.
(2)
Mr. Otten is a
Trustee of Versar Inc.’s 401(k) Plan and as such, he has
shared investment power as to 174,696 shares and shared voting
power as to 174,696 shares held by this plan. Mr. Otten disclaims
beneficial ownership of the plan shares arising solely from his
position as Trustee, none of which are included in the above
table.
(3)
Ms. Tarrago is a
Trustee of Versar Inc.’s 401(k) Plan and as such she has
shared investment power over 174,696 shares and shared voting power
over 174,696 shares held by this plan. Ms. Downes disclaims
beneficial ownerships of the plan shares arising solely from her
position as Trustee, none which are included in the above
table.
(4)
Mr. Villa is a
Trustee of Versar Inc.’s 401(k) Plan and as such he has
shared investment power over 174,696 shares and a shared voting
power over 174,696 shares held by this plan. Mr. Villa disclaims
beneficial ownerships of the plan shares arising solely from his
position as Trustee, none of which are included in the above
table.
(5)
Excludes shares
held by Versar Inc.’s 401(k) Plan as described in notes 2, 3,
and 4. Includes restricted stock units that have not yet
vested.
Item 13. Certain Relationships and Related Transactions, and
Director Independence
The
Company does not generally engage in related party transactions
with its directors or executive officers or their affiliates. If a
proposed related transaction arises, the Company will present such
a transaction to the full Board for its review and
approval.
The
Board believes that independent directors must constitute a
substantial majority of the Board. The Board has determined that
all of the following six (6) non-employee directors in fiscal 2017
are independent directors: Paul J. Hoeper, Robert L. Durfee, James
L. Gallagher, Amoretta M. Hoeber, Amir A. Metry and Frederick M.
Strader. Throughout fiscal 2017, all Board members, except Mr.
Otten and Mr. Wagonhurst, met the NYSE American and SEC standards
for independence.
Item 14. Principal Accountant Fees and Services
The
Audit Committee has adopted a pre-approval policy for services and
fees by its registered public accounting firm. Pursuant to this
policy, the Audit Committee is required to pre-approve the audit
and non-audit services to be performed by the independent
registered public accounting firm in order to assure that the
provision of such services does not impair the firm’s
independence. The services and estimated fees are presented to the
Audit Committee for consideration in the following categories:
Audit, Audit-Related, Tax and All Other (each as defined in
Schedule 14A of the Securities Exchange Act of 1934). All services
by Grant Thornton rendered in fiscal 2016 and 2015 received prior
approval by the Audit Committee. The Committee expects that all
services performed by Urish Popeck in fiscal 2017 will be subject
to pre-approval by the Audit Committee.
Audit Fees
In
fiscal 2017 and 2016, Versar paid Grant Thornton $178,500 and
$400,260, respectively, for quarterly reviews and the annual fiscal
year audit. Versar also made payments of $10,026 and $9,567 in
fiscal 2017 and 2016 to SGV &
Co. for audit services in the Philippines. During fiscal 2017 the
Company changed independent auditors from Grant Thornton to Urish
Popeck & Co. We paid Urish Popeck $210,000 to complete our
fiscal 2016 audit and $152,173 for our fiscal 2017 audit and
quarterly reviews.
Audit-Related Fees
Versar
paid Grant Thornton $75,953 in fiscal 2016 for audit-related fees
for assurance and related services.
Tax Fees
In
fiscal 2017, Versar paid $122,239 to Urish Popeck & Co. for
federal and state tax compliance services. In fiscal 2017 and 2016,
Versar paid $141,029 and $158,445, respectively, to Grant Thornton
for federal and state tax compliance services. Versar paid $6,810
and $4,686 in fiscal 2017 and 2016 to SGV & Co. for tax
advisory services in the Philippines.
All Other Fees
In
fiscal 2016, Versar paid $25,351to Grant Thornton for various tax
consulting, including acquisition accounting advice.
PART IV
Item 15. Exhibits and Financial Statement Schedules
(1) Financial Statements:
The
following consolidated financial statements of Versar, Inc. and
Subsidiaries are included as part of this report on Form 10-K in
Item 8. Financial Statements and Supplementary Data.
a)
Report of Independent Registered Public Accounting
Firm
b)
Consolidated Balance Sheets as of June 30, 2017 and July 1,
2016
c)
Consolidated Statements of Operations for the Years Ended June 30,
2017 and July 1, 2016.
d)
Consolidated Statements of Comprehensive Income (Loss) for the
Years Ended June 30, 2017 and July 1, 2016.
e)
Consolidated Statements of Changes in Stockholders’ Equity
for the Years Ended June 30, 2017 and July 1, 2016.
f)
Consolidated Statements of Cash Flows for the Years Ended June 30,
2017 and July 1, 2016,
g)
Notes to Consolidated Financial Statements
(2)
Financial Statement Schedules:
a)
Schedule II - Valuation and Qualifying Accounts for the Years Ended
June 30, 2017 and July 1, 2016.
All
other schedules, except those listed above, are omitted because
they are not applicable or the required information is shown in the
consolidated financial statements or notes thereto.
(3)
Exhibits:
The
exhibits to this Form 10-K are set forth in a separate Exhibit
Index which is included on this report.
Exhibit Index
|
Item No
|
Description
|
Reference
|
|
|
|
|
|
|
|
|
|
3.1
|
Restated Certificate of Incorporation of Versar, Inc. filed on
September 25, 1986
|
(L)
|
|
|
|
|
|
3.2
|
Certificate of Amendment of Restated Certificate of Incorporation
of Versar, Inc. filed on December 24, 1996
|
(L)
|
|
|
|
|
|
3.3
|
Certificate of Amendment of Restated Certificate of Incorporation
of Versar, Inc. filed on January 26, 1999
|
(L)
|
|
|
|
|
|
3.4
|
Second Amended and Restated By-laws of Versar, Inc. Specimen of
Certificate of Common Stock of Versar, Inc. (A)
|
(B)
|
|
|
|
|
|
4.1
|
Versar, Inc. Restated Employee 401(k) Plan
|
(C)
|
|
|
|
|
|
4.2
|
Amendment to the Versar, Inc. Restated Employee 401(k) Plan
implementing automatic enrollment unless the participant makes a
contrary election
|
(C)
|
|
|
|
|
|
4.3
|
Amendment merging the Advent 401(k) Profit Sharing Plan and Trust
to the Versar, Inc. Restated Employee 401(k) Plan
|
(C)
|
|
|
|
|
|
4.4
|
Amendment to the Versar, Inc. Restated Employee 401(k) Plan
implementing 1% automatic annual increase of deferral amount to all
participants under 6% deferral rate effective January 1, 2013 until
it reached the maximum cap of 6%
|
(C)
|
|
|
|
|
|
4.5
|
Amendment to the Versar, Inc. Restated Employee 401(k) Plan
excluding employees who are already eligible to participate in the
Charron Construction Consulting, Inc. 401(k) Plan
|
(C)
|
|
|
|
|
|
4.6
|
Amendment to the Versar, Inc. Restated Employee 401(k) Plan adding
Roth Deferrals in the Contribution types and merging the Charron
Construction Consulting, Inc. 401(k) Plan with and into the
Plan
|
(C)
|
|
|
|
|
|
10.1
|
Executive Tax and Investment Counseling Program
|
(A)
|
|
|
|
|
|
10.2
|
Form of Indemnification Agreement*
|
(F)
|
|
|
|
|
|
10.3
|
Change in Control Severance Agreement between Anthony L. Otten and
Versar, Inc. effective as of May 24,
2011*
|
(E)
|
|
|
|
|
|
10.4
|
2010 Stock Incentive Plan*
|
(G)
|
|
|
|
|
|
10.4.1
|
Form of Restricted Share Award Agreement*
|
(G)
|
|
|
|
|
|
10.4.2
|
Form of Performance Stock Award Agreement*
|
(G)
|
|
|
|
|
|
10.4.3
|
Form of Deferral Election Agreement for Deferred Share
Units*
|
(G)
|
|
|
|
|
|
10.4.4
|
Form of Stock Option Award Agreement*
|
(G)
|
|
|
|
|
|
10.4.5
|
Form of Stock Appreciation Right Award Agreement*
|
(G)
|
|
|
|
|
|
10.4.6
|
Form of Restricted Stock Unit Award Agreement*
|
(G)
|
|
|
|
|
|
10.5
|
Change in Control Severance Agreement between Cynthia A. Downes and
Versar, Inc. effective as of September 8, 2011*
|
(H)
|
|
|
|
|
|
10.6
|
Amendment to Change in Control Severance Agreement dated March 9,
2012 between Versar, Inc. and Anthony L. Otten*
|
(D)
|
|
|
|
|
|
10.7
|
Versar, Inc. 2012 Long-Term Incentive Compensation
Program*
|
(I)
|
|
|
|
|
|
10.8
|
Amended and Restated Loan and Security Agreement date September 13,
2012 between the Registrant, certain of the Registrant’s
subsidiaries and United Bank
|
(M)
|
|
|
|
|
|
10.9
|
Amended and Restated Revolving Commercial Note dated September 14,
2012
|
(N)
|
|
|
|
|
|
10.10
|
Change in Control Severance Agreement between Versar, Inc. and
Anthony L. Otten
|
(J)
|
|
|
|
|
|
10.11
|
Change in Control Severance Agreement between Versar, Inc. and
Jeffrey A. Wagonhurst
|
(J)
|
|
|
|
|
|
10.12
|
Change in Control Severance Agreement between Versar, Inc. and
Cynthia A. Downes
|
(J)
|
|
|
|
|
|
10.13
|
Change in Control Severance Agreement between Versar, Inc. and
Linda M. McKnight
|
(J)
|
|
|
|
|
|
10.14
|
Change in Control Severance Agreement between Versar, Inc. and
James D. Villa
|
(K)
|
|
|
|
|
|
10.15
|
Loan Agreement, dated September 30, 2015, by and among Versar, Inc.
and Bank of America, N.A.
|
(O)
|
|
|
|
|
|
10.16
|
Security Agreement, dated September 30, 2015, by and among Versar,
Inc. and GEO-Marine, Inc., Versar International, Inc., J.M. Waller
Associates, Inc. and Bank of America, N.A.
|
(O)
|
|
|
|
|
|
10.17
|
First
Amendment and Waiver dated as of December 9, 2016, by and among
Versar, Inc. and Bank of America, N.A. as lender and l/c
issuer
|
(Q)
|
|
|
|
|
|
10.18
|
Second
Amendment and Waiver dated as of May 5, 2017, by and among Versar,
Inc. and Bank of America, N.A. as lender and l/c
issuer
|
(R)
|
|
|
|
|
|
10.19
|
Letter
Agreement, dated June 1, 2017, by and between Versar, Inc. and
Christine B. Tarrago*
|
(S)
|
|
|
|
|
|
10.20
|
Change
in Control Severance Agreement, dated June 15, 2017, by and between
Versar, Inc. and Christine B. Tarrago*
|
(T)
|
|
|
|
|
|
10.21
|
Separation
Agreement and General Release dated June 12, 2017, by and between
Versar, Inc. and Cynthia A. Downes*
|
(T)
|
|
|
|
|
|
10.22
|
Common
Stock Purchase Warrant dated August 8, 2017 by and between Versar,
Inc. and Bank of America, N.A.
|
(U)
|
|
|
|
|
|
10.23
|
Change
in Control Severance Agreement between Versar, Inc. and Alessandria
Albers dated May 12, 2014.*
|
(V)
|
|
|
|
|
|
10.24
|
Amendment
to Change in Control Severance Agreement between Versar, Inc.
and Anthony L. Otten.*
|
(W)
|
|
|
|
|
|
10.25
|
Amendment
to Change in Control Severance Agreement between Versar, Inc.
and Jeffrey A. Wagonhurst.*
|
(W)
|
|
|
|
|
|
10.26
|
Amendment
to Change in Control Severance Agreement between Versar, Inc.
and Linda M. McKnight.*
|
(W)
|
|
|
|
|
|
10.27
|
Amendment
to Change in Control Severance Agreement between Versar, Inc.
and James D. Villa.*
|
(W)
|
|
|
|
|
|
10.28
|
Amendment
to Change in Control Severance Agreement between Versar, Inc.
and Alessandria Albers.*
|
(W)
|
|
|
|
|
|
10.29
|
Amendment
to Change in Control Severance Agreement between Versar, Inc.
and Christine B. Tarrago.*
|
(W)
|
|
|
|
|
|
**21
|
Subsidiaries of the Registrant
|
|
|
|
|
|
|
**23.1
|
Consent of Independent Registered Public Accounting Firm, Urish
Popeck & Co., LLC
|
|
|
|
|
|
|
†31.1
|
Certifications by Anthony L. Otten, Chief Executive Officer
Pursuant to Securities Exchange Rule 13a-14
|
|
|
|
|
|
|
†31.2
|
Certifications by Christine B. Tarrago, Senior Vice President,
Chief Financial Officer and Treasurer pursuant to Securities
Exchange Rule 13a-14
|
|
|
|
|
|
|
**32.1
|
Certifications Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 Of the Sarbanes-Oxley Act of 2002, for the
period ending July 1, 2016 by Anthony L. Otten, Chief Executive
Officer
|
|
|
|
|
|
|
**32.2
|
Certifications Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 Of the Sarbanes-Oxley Act of 2002, for the
period ending July 1, 2016 by Cynthia A. Downes, Exec. Vice
President, Chief Financial Officer and Treasurer
|
|
|
|
|
|
|
**101+
|
The following materials from Versar Inc.’s Annual Report on
Form 10-K for the fiscal year ended July 1, 2016, formatted in XBRL
(Extensible Business Reporting Language): (i) Consolidated Balance
Sheets as of July 1, 2016, June 29, 2014; (ii) Consolidated
Statements of Operations for the years ended June 29, 2012; (iii)
Consolidated Statements of Comprehensive Income (Loss) for the
years ended June 27, 2014 and June 29, 2012; (iv) Consolidated
Statements of Changes in Stockholders’ Equity for the years
ended June 27, 2014 and June 29, 2012; (v) Consolidated Statements
of Cash Flows for the years ended July 1, 2016, June 29, 2012; (vi)
Schedule II — Valuation and Qualifying Accounts; and (vi)
Notes to Consolidated Financial Statements, tagged as blocks of
text
|
|
|
(A)
|
Incorporated by reference to the similarly numbered exhibit to the
Registrant’s Form S-1 Registration Statement effective
November 20, 1986.
|
|
|
|
|
|
|
(B)
|
Incorporated by reference to the exhibit to the Registrant’s
Form 8-K filed with the Commission on February 17,
2010.
|
|
|
|
|
|
|
(C)
|
Incorporated by reference to exhibits 4.1 through 4.6 to the
Registrant’s Form S-8 Registration Statement filed with the
Commission on March 22, 2013.
|
|
|
|
|
|
|
(D)
|
Incorporated by reference to exhibit 10.30 to the
Registrant’s Form 10-K Annual Report for the fiscal year
ended June 27, 2014 filed with the Commission on September 18,
2012.
|
|
|
|
|
|
|
(E)
|
Incorporated by reference to exhibit 10.1 to the Registrant’s
Form 10-Q filed with the Commission on November 8,
2010.
|
|
|
|
|
|
|
(F)
|
Incorporated by reference to exhibit 10.1 to the Registrant’s
Form 8-K filed with the Commission on May 11, 2009.
|
|
|
|
|
|
|
(G)
|
Incorporated by reference to exhibits 4.1 through 4.7 to the
Registrant’s Form S-8 filed with the Commission on February
15, 2011.
|
|
|
|
|
|
|
(H)
|
Incorporated by reference to exhibit 10.1 to the Registrant’s
Form 8-K filed with the Commission on September 13,
2011.
|
|
|
|
|
|
|
(I)
|
Incorporated by reference to exhibit 10.1 to the Registrant’s
Form 8-K filed with the Commission on May 9, 2012.
|
|
|
|
|
|
|
(J)
|
Incorporated by reference to exhibits 10.35 through 10.37 and
exhibit 10.40 to the Registrant’s Form 8-K filed with the
Commission on September 18, 2013.
|
|
|
|
|
|
|
(K)
|
Incorporated by reference to exhibit 10.1 to the Registrant’s
Form 8-K filed with the Commission on May 14, 2014.
|
|
|
|
|
|
|
(L)
|
Incorporated by reference to exhibit 3.1 to the Registrant’s
Form 10-K filed with the Commission on September 10,
2014.
|
|
|
|
|
|
|
(M)
|
Incorporated by reference to exhibit 10.34 to the
Registrant’s Form 8-K filed with the Commission on
September 17, 2012.
|
|
|
|
|
|
|
(N)
|
Incorporated by reference to exhibit 10.33 to the
Registrant’s Form 8-K filed with the Commission on
September 17, 2012.
|
|
|
|
|
|
|
(O)
|
Incorporated by reference to exhibit 10.1 to the Registrant’s
Form 8-K filed with the Commission on October 6,
2015.
|
|
|
|
|
|
|
(P)
|
Incorporated by reference to exhibit 10.2 to the Registrant’s
Form 8-K filed with the Commission on October 6,
2015.
|
|
|
|
|
|
|
(Q)
|
Incorporated
by reference to exhibit 10.1 to the Registrant’s Form 8-K
filed with the Commission on December 12, 2016
|
|
|
|
|
|
|
(R)
|
Incorporated
by reference to exhibit 10.1 to the Registrant’s Form 8-K
filed with the Commission on June 5, 2017
|
|
|
|
|
|
|
(S)
|
Incorporated
by reference to exhibit 10.2 to the Registrant’s Form 8-K
filed with the Commission on June 5, 2017
|
|
|
|
|
|
|
(T)
|
Incorporated
by reference to exhibit 10.1 to the Registrant’s Form 8-K
filed with the Commission on June 22, 2017
|
|
|
|
|
|
|
(U)
|
Incorporated
by reference to exhibit 10.1 to the Registrant’s Form 8-K
filed with the Commission on August 15, 2017
|
|
|
|
|
|
|
(V)
|
Incorporated
by reference to exhibit (e)(9) to the Registrant’s Schedule
14D-9 filed with the Commission on October 6, 2017
|
|
|
|
|
|
|
(W)
|
Incorporated
by reference to exhibits (e)(12) through (e)(17) to the
Registrant’s Schedule 14D-9 filed with the Commission on
October 6, 2017
|
|
__________________________________________________
* Indicates management contract or compensatory plan or
arrangement
† Filed herewith.
** Previously filed with the Annual Report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|
|
VERSAR, INC.
|
|
|
|
|
|
|
|
|
October 30,
2017
|
By:
|
/s/ Paul J.
Hoeper
|
|
|
|
|
Paul J.
Hoeper
|
|
|
|
|
Chairman and
Director
|
|
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant in the capacities and on the dates
indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ Paul J
Hoeper
|
|
Chairman and
Director
|
|
October 30,
2017
|
|
Paul J
Hoeper
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Anthony L.
Otten
|
|
Chief Executive Officer and
Director
|
|
October 30,
2017
|
|
Anthony L.
Otten
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Christine B.
Tarrago
|
|
Senior Vice President, Chief
Financial Officer, Treasurer, and Principal Accounting
Officer
|
|
October 30,
2017
|
|
Christine
B. Tarrago
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Frederick M.
Strader
|
|
Director
|
|
October 30,
2017
|
|
Frederick M.
Strader
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Robert L.
Durfee
|
|
Director
|
|
October 30,
2017
|
|
Robert L.
Durfee
|
|
|
|
|
|
|
|
|
|
|
|
/s/
James L. Gallagher
|
|
Director
|
|
October 30,
2017
|
|
James L. Gallagher
|
|
|
|
|
|
/s/
Amoretta M.
Hoeber
|
|
Director
|
|
October 30,
2017
|
|
Amoretta M.
Hoeber
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Amir A. Metry
|
|
Director
|
|
October 30,
2017
|
|
Amir A. Metry
|
|
|
|
|
|
|
|
|
|
|
|
/s/
Jeffrey A. Wagonhurst
|
|
Presdent and Chief
Operating Officer
|
|
October 30,
2017
|
|
Jeffrey A. Wagonhurst
|
|
|
|
|
Schedule II
VERSAR, INC. AND SUBSIDIARIES
Valuation and Qualifying Accounts
|
|
BALANCE
AT BEGINNING OF YEAR
|
ADDITIONS
CHARGED TO COSTS AND EXPENSES
|
CHARGEOFFS
|
BALANCE
AT END OF YEAR
|
|
Allowance
for Doubtful Accounts
|
|
|
|
|
|
2017
|
$1,001,000
|
$-
|
$845,000
|
$156,000
|
|
2016
|
$616,000
|
$890,000
|
$(505,000)
|
$1,001,000
|
|
|
|
|
|
|
|
Deferred
Tax Valuation Allowance
|
|
|
|
|
|
2017
|
$14,781,000
|
$4,470,000
|
$(883,000)
|
$18,368,000
|
|
2016
|
$756,000
|
$14,025,000
|
$-
|
$14,781,000
|