Down in the trenches, where the troops fight to bring in the big bucks, the brokers at E.F. Hutton & Co. Inc. in Washington have discovered a new definition for "mixed emotions."

Mixed emotions is what a Hutton broker feels when Shearson Lehman Bros. buys his firm and says it will fire 5,000 people but then offers him a bonus to stay.

It is easy to understand why Shearson is eager to keep the Hutton brokers on the job. They are, after all, the folks who turn out those golden eggs. The high-production Hutton retail network was one of the key reasons Shearson was so eager to take over Hutton.

So Shearson is trying to prevent successful Hutton brokers from defecting, something that often happens when two brokerage firms merge.

Shearson has tried to sweeten the pot by offering Hutton brokers a bonus equivalent to 25 percent of their net income for the first six months of 1988 and 20 percent for the second six months, according to one Shearson manager.

That offer, Shearson hopes, will convince Hutton brokers to put up with the disruption that comes with a merger and to say no when rival firms try to woo them with even bigger bonuses.

Steven Bralove, manager of the Hutton branch on Connecticut Avenue, said the Shearson bonus offer was "the most paid out in any merger arrangement." He added, "I think everyone is making a good-faith effort to recognize the problems involved in a transition."

Although it is difficult to tell at this point how many Hutton brokers eventually will jump ship, area Hutton managers report that their crews are intact at the moment.

The Shearson-Hutton merger, in the Washington area, will bring together three Shearson offices with about 80 brokers and four Hutton offices with about 150 to 160 brokers.

Shearson has one District office with about 18 brokers. It also has a Bethesda office and a McLean office, each with about 30 brokers.

Hutton has two District offices, one with 45 brokers, the other with 70 brokers. The Bethesda office has about 25 brokers and the Alexandria office has about 18 brokers.

The temptation is to assume that Shearson could save a lot of rent by combining the Shearson and Hutton offices in the city into one large office or by creating a single office out of the Shearson and Hutton offices in Bethesda.

But the managers of both the Shearson and Hutton offices insist that that won't happen.

Randolph G. Peyton Sr., manager of Shearson's downtown office, said the rule Shearson lives by is, "If it ain't broke, don't fix it." And since all of the Shearson and Hutton offices are profitable, he said, combining offices would only cause confusion among customers and result in a loss of revenue.

The Hutton managers, too, said they do not expect any layoffs or changes in the organization of their offices. But experienced observers in other firms recall that Shearson has been known for keeping costs under tight control, while Hutton has long enjoyed a reputation for free-spending.

Hutton's lavish approach to life is often cited as one of the key problems on a long list of nightmarish events that have haunted Hutton during the past several years. These events included Hutton's plea of guilty to 2,000 counts of fraud stemming from a check-kiting scheme that severely damaged the firm's reputation.

Hutton workers and watchers were not surprised when the Shearson deal was announced. As one of the last independent public firms on Wall Street in an era of consolidation, it was only a matter of time before Hutton was bought out.

The check-kiting scandal, losses on wrongly advertised tax exempt bonds and finally the market collapse on Oct. 19 all put a serious dent in Hutton's business.

"I felt a little sad about the merger," said one local Hutton broker. "I had a loyalty to Hutton. But I think we'll have a better opportunity for selling."

The broker said he had received phone calls offering him various kinds of bonuses for jumping to other firms. But, he said, he planned to stay on and see how the Shearson merger developed.

And what will the new firm be called?

Nobody is quite sure whether the Hutton name will remain or be quietly erased. The managers said Shearson's marketing people are studying the matter.

There seems to be some feeling on both sides that the disappearance of the Hutton name will not be a total loss. It will be a relief not to have to deal with the check-kiting issue continually, said one Hutton manager.

Peyton said he thought the Hutton brokers might be better off if they didn't have to carry the burden of Hutton's troubles any longer.

S. Paul Powers II, manager of Hutton's larger District office, was upbeat about the merger. "For everyone on both sides, the merger will be a net positive," he said.

Hutton, he noted, will bring to the merger a money management system that uses the services of outside managers and has been quite successful.

On the other hand, he said, Shearson has been a much larger player than Hutton in trading over-the-counter stocks.

One Hutton operation that will end almost as quickly as it was formed is the Washington Capital Markets office being operated by attorney David M. Ifshin, who said Shearson had offered him a job but that he was considering other opportunities.

For the time being, at least, it appears that the job slashing at Shearson and Hutton will be confined to New York and to people who work in operations, research and other non-sales tasks. That will be reassuring to the Shearson and Hutton brokers in town.

But it probably will be a long time before everybody is comfortable once again.

The acquisition of Atlantic Research of Alexandria by Sequa Corp. for $31 a share went off at a price that was somewhat lower than other recent acquisitions in the defense field, according to Byron K. Callan, analyst for Prudential-Bache Securities in New York.

"The acquisition price of Atlantic Research, valued at $316 million, is lower by several measures than acquisitions of defense and defense electronics firms made prior to the stock market implosion in mid-October," Callan wrote. "Sequa purchased Atlantic Research for .78 times trailing 12-month revenues, 2.8 times book value and 16.6 times trailing 12-month earnings."

Callan said he compared the Atlantic Research figures with those of nine other defense companies involved in takeovers and, by and large, the Atlantic Research figures were quite favorable to Sequa. One reason, Callan said, was that Atlantic Research did not have much time to find a "white knight," jargon for a more friendly company willing to buy ARC.

But there was a second reason, Callan said.

"In the current market environment, investors would most likely have tendered their shares to Sequa. Atlantic Research did not control enough stock to block Sequa and the initial $30 offer was very hard to resist when the stock had been selling as low as $18.50 on Oct. 30."

Versar Inc. of Springfield, a firm involved in the clean-up of environmental hazards, has decided to buy back up to 200,000 shares of its stock. Michael Markels Jr., chairman of Versar, said the repurchased stock would support Versar's ongoing acquisition program. One of the more promising companies in the Washington area, Versar trades on the American Stock Exchange. It has been as high as $18 and as low as $4.75 in the last 52 weeks. It closed Friday at $7.36. On Oct. 2, it was selling for $13.13, up 61.5 percent for the year. Then came the market plunge and, like so many stocks, Versar saw its price drop so far that it will wind up in the minus column for the year.

Black & Decker Corp. of Towson, Md., has been added to the new December emphasis list of Alex. Brown & Sons Inc. of Baltimore. ASB analysts said they believe that "improving margins due to major cost-reduction programs and strong operating leverage should lead to rapidly rising earnings." The profits of Black & Decker, the world's largest producer of power tools, also will be helped by the falling dollar, which improves sales overseas

William G. McGowan, chairman of MCI Communications Corp. of Washington, and Edward J. Mathias, vice president of T. Rowe Price Associates in Baltimore, are among the six members of a new committee appointed by the National Association of Securities Dealers (NASD) to examine some of the issues that grew out of the Oct. 19 market debacle.