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): June 24, 2005
Versar Inc.
______________________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-9309 54-0852979
________ ______ __________
(State or Other (Commission File Number) (IRS Employer
Jurisdiction) 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)
Item 1.01. Entry into a Material Definitive Agreement
As described in Item 8.01 "Other Events", on June 24, 2005, the
Compensation Committee of the Board of Directors of Versar, Inc.
(the "Company") approved a resolution to accelerate the vesting of
certain stock options granted under the Versar, Inc. 1996 and 2002
Stock Option Plans to acquire approximately 306,010 shares of the
Company's common stock. All other terms and conditions applicable
to outstanding stock option grants remain in effect. The options that
were accelerated have an exercise price of $3 per share and include
those listed below held by the named executive officers of the
Company.
Name Title Number of Shares
____ _____ Issuable Under
Accelerated Options
___________________
Theodore M. Prociv President & CEO 20,000
Lawrence W. Sinnott Senior VP & CFO 16,000
Jerome B. Strauss Senior VP 16,000
James C. Dobbs Senior VP & Gen Counsel 8,000
Paul W. Kendall Senior VP 22,000
Other Employees 224,010
_________
Total 306,010
The option agreements underlying the options subject to the
acceleration will be amended to reflect the acceleration as
of the effective date.
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Item 8.01. Other Events
____________
On June 24, 2005, the Board of Directors of the Company
accelerated the vesting of certain unvested and "out-of-the-money"
stock options as of June 21, 2005, previously awarded to employees
that have an exercise price per share of $3.00 or more. The awards
accelerated were made under the Versar, Inc. 1996 and 2002
Stock Option Plans. As a result, options to purchase approximately
306,010 shares of the Company's common stock became exercisable
immediately. All other terms and condition applicable to the
outstanding stock option grants remain in effect. The closing price
of the Company's common stock on the New York Stock Exchange on
June 21, 2005 was $3.00. Based on the market value of the Company's
stock on June 22, 2005, none of these options had economic value
to the employees and officers at such time as the exercise price
of $3.00 was in excess of the market value on June 22, 2005.
The Company will adopt SFAS 123(R), Share-Based Payment, in its
third fiscal quarter of 2005, beginning July 1, 2005, requiring
compensation cost to be recorded as expense for the portion of
outstanding unvested awards, based on the grant-date fair value
of those awards. Based on the potential for these options to have
value over their expected life, the Company expects to reduce the
stock option expense it otherwise would have been required to
recognize in its consolidated statements of income by approximately
$124,000 over the next four years on a pre-tax basis, as a result
of the acceleration.
The Company and its Board of Directors considered several factors in
determining to accelerate the vesting of these options. The Committee
believes that the acceleration is in the best interest of the
stockholders as it will reduce the Company's reported stock option
expense in future periods mitigating the impact of the new accounting
standard (SFAS 123 (R)) that will take effect in the first quarter of
fiscal year 2006. Attached hereto as Exhibit 99.1 and incorporated
by reference to this Item is the text of Versar's June 29, 2005, press
release announcing the acceleration of vesting of options as described
above.
This current report on Form 8-K contains forward-looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995. Such statements are subject to certain risks, trends,
and uncertainties. In particular, statements made in this report
that are not historical facts (including but not limited to
expectations, estimates, assumptions and projections regarding the
industry, business, future operating results, anticipated cash
requirements and the anticipated savings from the acceleration of
the vesting of certain "out-of-the-money" options) may be forward-
looking statements. Actual results could differ materially from
the results projected, expressed or implied by these forward-looking
statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed from time
to time in Versar's filing with the Securities and Exchange Commission.
Many of these risk factors are outside of Versar's control, and as such,
they involve risks which are not currently known to Versar that could
cause actual results to differ materially from those discussed or
implied herein. The forward-looking statements in this document are
made as of the date hereof and Versar does not undertake to update its
forward-looking statements.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed with this Report:
Exhibit No. Description
___________ ___________
99.1 Copy of press release issued by Versar on
June 29, 2005.
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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.
/S/ James C. Dobbs
By___________________________
Date: June 29, 2005 James C. Dobbs
Senior Vice President
& General Counsel
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