UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 17,
2004
VERSAR, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-09309 54-0852979
(State or other jurisdiction(Commission (IRS Employer
of incorporation) File Number) Identification No.)
6850 Versar Center, Springfield, Virginia 22151
(Address of Principal
Executive Offices)
(703) 750-3000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligations of the
registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
The Versar Inc. (the "Company") 2005 Employee Stock Purchase
Plan (the "ESPP") was adopted by the Board of Directors on
September 17, 2004 and was approved by the Company's stockholders
at the Company's annual meeting on November 17, 2004. The ESPP
will become effective on January 1, 2005. The ESPP will allow
eligible employees of the Company and its designated affiliates
to purchase, through payroll deductions, shares of common stock
of the Company. Below is a summary of the principal provisions
of the ESPP and its operation. The following description of the
ESPP is qualified in its entirety by reference to full text of
the ESPP which was filed with the Company's proxy statement on
November 8, 2004.
The ESPP is designed to retain and motivate the employees of
the Company and its designated affiliates by encouraging them to
acquire ownership in the Company on a tax-favored basis. In
particular, the ESPP is intended to be an "employee stock
purchase plan" within the meaning of Section 423 of the United
States Internal Revenue Code, as amended ("Section 423"), and
thereby to allow participating employees to defer recognition of
taxes when purchasing the Company's common stock at a discount
under the plan. The Company will not reserve shares of
authorized but unissued common stock for issuance under the ESPP.
Instead, a designated broker (initially expected to be Wachovia)
will be purchasing shares for participants on the open market. To
the extent the Company offers to sell shares at a price below
fair market value, the Company will make cash payments to the
broker to subsidize the discount.
Administration. The ESPP will be administered by the Board
of Directors or a person or committee appointed from time to time
by the Board of Directors (the "Administrator"). The Board of
Directors or the Administrator, if one has been appointed, is
vested with full authority to construe, interpret, and apply the
terms of the ESPP, to determine eligibility, to adjudicate all
disputed claims under the ESPP, to adopt, amend and rescind any
rules deemed appropriate for the administration of the ESPP, and
to make all other determinations necessary or advisable for the
administration of the ESPP. Determinations by the Board of
Directors or the Administrator as to the interpretation and
operation of the ESPP will be final and binding on all parties.
Offering Periods And Purchase Dates. Under the ESPP, twelve
monthly offerings (each, an "Offering") of shares of the
Company's common stock will be made each year. Generally, each
Offering is of one (1) month's duration beginning on the first
day of each calendar month (e.g., January 1, February 1, March 1,
etc.) and ending on the last day of the same calendar month (the
"Purchase Period"). The first Offering will begin on or after
January 1, 2005 and will end on the last day of the calendar
month in which the first Offering begins. The Administrator or
the Board of Directors may change the Purchase Period associated
with future Offerings to up to 27 months, without stockholder
approval.
Eligibility. All employees of the Company and its designated
subsidiaries (including designated related entities, for sub-
plans) will be eligible to participate in the ESPP, except
persons whose customary employment is less than 20 hours per week
or five months or less per year, before the first business day of
the Purchase Period. Persons who are deemed for purposes of
Section 423(b)(3) of the Internal Revenue Code of 1986, as
amended (the "Code"), to own shares of common stock possessing 5%
or more of the total combined voting power or value of all
classes of common stock or shares of a subsidiary will be
ineligible to participate in the ESPP. In addition, if an option
granted pursuant to the ESPP would permit a person's rights to
purchase shares of common stock to accrue at a rate that exceeds
the $25,000 fair market value ("Fair Market Value") of such
common stock, such person will not be eligible to participate in
the ESPP. In addition, the Board of Directors or the
Administrator, in its sole discretion, may permit Company
directors, employees who are 5% or more stockholders, and
independent contractors to participate in certain sub-plans which
are not designed to qualify as Code Section 423 plans. As of
September 20, 2004, the Company and its designated affiliates had
no independent contractors and approximately 366 employees,
including one employee who also serves as a director, who was
eligible to participate in the ESPP.
Participation. Eligible employees may elect to participate
in one or more of the Offerings, by electing to make payroll
deductions during the Offering. The amount of the payroll
deductions must not be less than $25.00 per payroll period and
must not exceed a percentage (initially 25%) of the participant's
annual compensation that the Board of Directors or the
Administrator establishes from time to time. A participant may
not purchase more than 500 shares of common stock during an
Offering, subject to both adjustment for capital changes and to
the discretion of the Board of Directors or the Administrator to
revise this number for any Offering before it commences. All sums
deducted from the regular compensation of participants will be
credited to a share purchase account established for each
participant on the Company's books, but prior to use of these
funds for the purchase of shares of the Company's common stock in
accordance with the ESPP, the Company may use these funds for any
valid corporate purpose. The Company will not be under any
obligation to pay interest on funds credited to a participant's
stock purchase account in any event.
Price. The price per share of common stock sold under the
ESPP during an Offering will be 90% of closing price of the
Company's shares on the American Stock Exchange on the last day
of such Offering; provided that, before the first business day of
any Purchase Period, the Board of Directors or the Administrator
may establish a different formula for determining the price, so
long as the formula does not result in a lower price than is
allowed under Code Section 423(b)(6). Each participating employee
will receive an option, effective on the first day of the
Offering, to purchase shares of common stock on the last day of
the Offering. The number of shares which a participant may
purchase under the option during each Offering will be the
quotient of the aggregate payroll deductions in the Offering
authorized by the participant, and not withdrawn, divided by the
applicable purchase price.
Purchase of Shares. A participant's option to purchase
common stock pursuant to the ESPP will be automatically exercised
on the last day of each applicable Offering. Before that date, a
participant may terminate his or her participation in the ESPP by
providing written notice to the Company or its designated broker
at least five days prior to the last day of the Offering. A
participant who terminates his or her participation in the ESPP
during an Offering will receive a refund of his or her ESPP
contributions. If a participant fails to work at least 20 hours
per week during an Offering, the participant shall be deemed to
have terminated his or her participation in the ESPP. Other than
terminating his or her participation in the ESPP altogether, once
an Offering begins, a participant may not increase or decrease
how much he or she has elected to contribute to the ESPP during
the Offering (unless the Board of Directors or the Administrator
provides for such before the Offering begins).
The designated broker will purchase the shares of common
stock authorized for issuance under the ESPP on the open market.
To the extent that the purchase price for the shares is below
Fair Market Value for any Purchase Period, the Company will pay
the designated broker the amounts necessary to subsidize the
purchase price for shares purchased on the open market.
Transferability. Options under the ESPP may not be assigned,
transferred, pledged, or otherwise disposed of except by will or
in accordance with the laws of descent and distribution.
Employment Termination. If a participant's employment
terminates for any reason, his or her payroll deductions or
contributions will be refunded, and the participant will have up
to thirty days to transfer common stock from the ESPP to himself
or herself, a designated beneficiary, or a broker. If the
participant's shares of common stock are not so transferred, a
share certificate will be issued and mailed to the participant.
Duration of ESPP. The ESPP will expire on December 31, 2014,
unless the Board exercises its discretion to terminate it on an
earlier date.
Amendment or Termination of the ESPP. The Company's Board of
Directors may at any time amend or terminate the ESPP, subject to
stockholder approval to the extent the Board of Directors or the
Administrator determines that such approval is required by the
listing standards of the American Stock Exchange or appropriate,
for example, to conform the ESPP with Section 423 of the Code
(currently, for example, the approval of the stockholders of the
Company is required to increase the number of shares of common
stock authorized for purchase under the ESPP or to change the
class of employees eligible to receive options under the ESPP,
other than to designate additional affiliates as eligible
subsidiaries for the ESPP).
Change in Company Capital Structure. If there is any change
in the shares of the Company as a result of a merger,
consolidation, reorganization, recapitalization, exchange of
shares, change in corporate structure, or similar event,
appropriate arrangements will be made so that each option under
the ESPP will be assumed or equivalent option substituted by the
resulting entity or the Purchase Period will be shortened to
allow for the completion of purchases under outstanding options
under the ESPP.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
VERSAR, INC.
Date: November 23, 2004 By: /s/ Lawrence W. Sinnott
______________________________
Lawrence W. Sinnott
Senior Vice President, Chief
Financial Officer and Treasurer
(Principal Financial Officer)