SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
BDM INTERNATIONAL, INC.
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(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
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BDM INTERNATIONAL, INC.
1501 BDM WAY
McLEAN, VA 22102-3204
April 11, 1997
Dear Shareholder:
On behalf of the Board of Directors and management of BDM International,
Inc., I cordially invite you to attend the Annual Meeting of Shareholders on
Friday, May 9, 1997, at 10:00 A.M. The Annual Meeting will be held in the
Company's Conference Center at its offices at 1501 BDM Way, McLean, Virginia.
At the meeting, we will report on important activities and accomplishments
of the Company, including a review of 1996 financial performance and business
operations. You will have an opportunity to ask questions and gain an up-to-date
perspective on your Company and its activities. You will also have an
opportunity to meet your directors and other executives of the Company.
The meeting will also be devoted to the election of ten directors, approval
of the 1997 Stock Option Plan, approval of an increase in the authorized number
of shares of the Company, approval of Coopers & Lybrand as the independent
accountants for 1997 and consideration of other business matters properly
brought before the meeting.
It is important that your shares be represented at the meeting whether or
not you plan to attend. You can be sure your shares are voted at the meeting in
accordance with your preference by promptly completing, signing and returning
your proxy form in the enclosed envelope.
Sincerely,
Philip A. Odeen
President
[Graphic]
NOTICE OF 1997 ANNUAL MEETING
OF SHAREHOLDERS
To the Shareholders of BDM International, Inc.:
The 1997 Annual Meeting of Shareholders of BDM International, Inc. will be
held in the Company's Conference Center at 1501 BDM Way, McLean, Virginia, on
Friday, May 9, 1997, at 10:00 A.M. to consider and act on the following matters:
1. Election of ten directors for the ensuing year;
2. Approval of the 1997 Stock Option Plan;
3. Approval of an increase in the authorized number of shares of the
Company;
4. Approval of the appointment of independent accountants for 1997; and
5. Any other matters which may properly come before the meeting.
Shareholders of record at the close of business on March 31, 1997, are
entitled to notice of and to vote at the meeting and any adjournments thereof.
John F. McCabe
Secretary
April 11, 1997
YOU ARE URGED TO SIGN AND RETURN THE ACCOMPANYING PROXY CARD WHETHER OR NOT YOU
PLAN TO ATTEND THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY VOTE IN PERSON OR
BY PROXY.
BDM INTERNATIONAL, INC.
1501 BDM WAY
MCLEAN, VIRGINIA 22102
April 11, 1997
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of BDM International, Inc. (the "Company") for
the Annual Meeting of Shareholders to be held on Friday, May 9, 1997, in the
Company's Conference Center at 1501 BDM Way, McLean, Virginia, and any
adjournments thereof. You can ensure that your shares are voted at the meeting
by signing and returning the enclosed proxy form in the envelope provided.
Sending in a signed proxy will not affect your right to attend the meeting and
vote. A shareholder who gives a proxy may revoke it at any time before the
Annual Meeting by delivering to the Company a signed proxy bearing a later date
or by voting in person at the Annual Meeting.
The 1996 Annual Report to Shareholders, including financial statements for
the year, is being mailed to shareholders with this Proxy Statement and proxy
card on or about April 11, 1997.
VOTING SECURITIES
The Board of Directors has fixed the close of business on March 31, 1997 as
the record date for this annual meeting, and shareholders of record on the
record date are entitled to notice of and to vote at the meeting. The voting
securities of the Company consist of its Common Stock, of which 29,040,307
shares were outstanding on March 31, 1997. All share amounts given in this Proxy
Statement reflect the two-for-one stock split which was declared by the Board of
Directors on February 21, 1997, and paid on March 20, 1997 to shareholders of
record as of the close of business on March 6, 1997. For all matters, each share
of Common Stock outstanding on the record date will be entitled to one vote.
VOTE REQUIRED FOR APPROVAL
If a quorum, consisting of a majority of the shares of Common Stock issued
and outstanding, is present, the ten nominees for director receiving a plurality
of the votes cast at the meeting in person or by proxy shall be elected as
director. Shares with respect to which authority to vote for any nominee or
nominees is withheld will not be counted in the total number of shares voted for
such nominee or nominees. Thus, those ten nominees receiving the highest number
of votes will be elected, regardless of the number of shares that are not voted
for the election of such nominees. All other matters require for approval a
majority of the votes of the shares present at the meeting in person or by
proxy. Shares of Common Stock whose holders either are present in person at the
Annual Meeting but not voting, or have submitted proxies with respect to which
authority to vote has been withheld, will be treated as present at the Annual
Meeting only for the presence or absence of a quorum for the transaction of
business and will be disregarded in determining the votes cast on matters
presented for the vote of shareholders.
ELECTION OF DIRECTORS
Ten directors are to be elected at the meeting, each to serve until the next
Annual Meeting of Shareholders and until the director's successor is elected and
qualified. It is intended that shares represented by valid proxies in the
accompanying form will be voted for the election of the nominees named in the
following pages, unless a contrary direction is indicated. All of the nominees
are members of the present Board of Directors.
The Board of Directors knows of no reason why any nominee for director may
be unable to continue to serve as a director. If any nominee should be unable to
serve for any reason, the shares represented by all valid proxies will be voted
for the election of such other person as the Board may recommend in his place,
or the Board may reduce the number of directors to eliminate the vacancy.
NOMINEES FOR ELECTION AS DIRECTORS
The following is certain information regarding the ten director nominees
proposed for election, including their ages; positions with the Company; and
period of service as a director of the Company.
Dr. Jeanette Grasselli Brown 68 DIRECTOR
Dr. Brown has served as a Director of the Company since May 1995. She is
also a member of the Compensation Committee. Dr. Brown is a member of the Ohio
Board of Regents. She was a Distinguished Visiting Professor and Director of
Research Enhancement at Ohio University from 1989-1995. From 1950 until her
retirement in 1988, she was employed by BP America (formerly The Standard Oil
Company) in various research positions. She retired as director of corporate
research, environmental and analytical sciences. She is a member of the Board of
Directors of AGA Gas, Inc., The BF Goodrich Company, McDonald & Company
Investments and USX Corporation.
Frank C. Carlucci 66 CHAIRMAN AND DIRECTOR
Mr. Carlucci has served as Chairman of the Board of Directors of the Company
since October 1990. He is also a member of the Executive and Nominating
Committees and Chairman of the Compensation Committee. Mr. Carlucci has been
Chairman of the Board and a Managing Director of The Carlyle Group, L. P.
("Carlyle"), a Washington, D.C.-based private merchant bank, since 1993 and
served as Vice Chairman of Carlyle from 1989 to 1993. Mr. Carlucci served as
U.S. Secretary of Defense from 1987 to 1989 and has served in a number of other
government positions, including Ambassador to Portugal, Deputy Secretary of
Defense and Assistant to the President for National Security Affairs.
Mr. Carlucci presently serves on the Board of Directors of Ashland Oil,
Inc., General Dynamics Corporation, Kaman Corporation, Neurogen Corporation,
Northern Telecom, Ltd., The Quaker Oats Company, SunResorts, Ltd., N.V., Texas
Biotechnology Corporation, Pharmacia & Upjohn, Inc. and Westinghouse Electric
Corporation. He also presently serves on the Board of Directors of several
privately-held companies controlled by Carlyle.
William E. Conway, Jr. 47 VICE CHAIRMAN AND DIRECTOR
Mr. Conway has served as Vice Chairman of the Board of Directors of the
Company since October 1990. He is Chairman of the Audit and Ethics Committee and
a member of the Executive and Compensation Committees. Mr. Conway has been a
Managing Director of Carlyle since 1987. Mr. Conway presently serves on the
Board of Directors of GTS Duratek Inc., Nextel Communications, Inc., Tracor,
Inc. and of several privately-held companies controlled by Carlyle.
Phillip R. Cox 50 DIRECTOR
Mr. Cox has served as a Director of the Company since July 1996. Since 1973,
Mr. Cox has been President and Chief Executive of Cox Financial Corporation, a
financial investment and consulting firm. He is a member of the Board of
Directors of Cincinnati Bell, CINergy Corporation, The Federal Reserve Bank, PNC
Bank and The Touchstone Mutual Funds.
Neil Goldschmidt 56 DIRECTOR
Mr. Goldschmidt has served as a Director of the Company since July 1993. He
is also a member of the Nominating Committee. Mr. Goldschmidt is currently
President of Neil Goldschmidt, Inc., a company focusing on strategic planning
and problem solving for national and international businesses. From 1987 to
1991, Mr. Goldschmidt was Governor of Oregon. From 1981 to 1986, he served as
Vice President of Nike International and President of Nike Canada. Mr.
Goldschmidt served as Secretary of Transportation from 1979 to 1981 and as Mayor
of Portland, Oregon from 1972 to 1979. He is a member of the Board of Directors
of Analogy, Inc. and the Claremont Technology Group.
2
Walther Leisler Kiep 71 DIRECTOR
Mr. Kiep has served as a Director of the Company since January 1995. Mr.
Kiep has been General Partner of Gradmann & Holler, an insurance brokerage firm
based in Stuttgart, Germany, since 1968. He is currently Chairman of the
Supervisory Board of Industrieanlagen-Betriebsgesellschaft mit beschrankter
Haftung (IABG) and Zeneca GmbH. He is a member of the Supervisory Board of
Volkswagen AG, Glunz AG, CS-Interglass, AG, and Bau Assekuranz-Vermittlungs
GmbH. He is a member of the Advisory Council of the Deutsche Bank AB, is
Chairman of the International Advisory Board of Marsh & McLennan Companies and
is a member of the International European Advisory Board of Fuji-Wolfensohn
International.
Philip A. Odeen 61 PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
Mr. Odeen has served as President and Chief Executive Officer of the Company
and has been a Director since May 1992. He is Chairman of the Executive
Committee. Mr. Odeen served with Coopers & Lybrand, an international auditing
and consulting company, as Vice Chairman, Management Consulting Services from
1991 to 1992, and as Managing Partner from 1978 to 1991. Mr. Odeen has served in
a number of government positions, including Director, Program Analysis, National
Security Council, and Principal Deputy Assistant Secretary of Defense.
Thomas G. Ricks 44 DIRECTOR
Mr. Ricks has served as a Director of the Company since December 1992. He is
also a member of the Audit and Ethics Committee. Mr. Ricks has served as
President and Chief Executive Officer of The University of Texas Investment
Management Company since March 1, 1996. He served as Vice Chancellor for Asset
Management for The University of Texas System from 1992 to 1996. From 1988 to
1992, he served as Executive Director of Finance and Private Investments for The
University of Texas System. Mr. Ricks is a member of the Board of Directors of
DTM Corporation and Newfield Exploration Co.
Dr. William E. Sweeney, Jr. 58 EXECUTIVE VICE PRESIDENT, CHAIRMAN OF
BOARD, BDM EUROPE, BV, MANAGER AND
CHAIRMAN OF THE MANAGEMENT BOARD, IABG
AND DIRECTOR
Dr. Sweeney has served as Executive Vice President and a Director of the
Company since October 1990 and as Chairman of the Board of BDM Europe BV and
General Manager and Chairman of the Management Board of
Industrieanlagen-Betriebsgesellschaft mbH (IABG) since 1993. Dr. Sweeney joined
the Company in 1977 and has held a number of senior management positions.
Earle C. Williams 67 DIRECTOR
Mr. Williams has served as a Director of the Company since October 1990. He
is also a member of the Audit and Ethics and Nominating Committees. From 1972
until his retirement in 1992, Mr. Williams served as President and Chief
Executive Officer of the Company. Mr. Williams is presently a member of the
Board of Directors of GAMMA-A Technologies, Inc., GTS Duratek, Inc. and The
Parsons Corporation.
In addition to the foregoing, Messrs. Odeen, Carlucci, Conway and Kiep and
Dr. Sweeney currently hold various positions with one or more subsidiaries of
the Company.
Your Board of Directors recommends a vote FOR the election of the ten
director nominees named above.
3
THE BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD
The Board of Directors of the Company met four times during 1996. Each
director attended at least 75% of the aggregate number of Board meetings and
meetings held by committees on which he served. The Board has four standing
committees--Executive, Audit and Ethics, Compensation and Nominating. The
Nominating Committee is composed of Messrs.Carlucci, Goldschmidt and Williams,
and met once in 1996. The principal functions of the Nominating Committee are to
review and determine the nominees for election as members of the Board of
Directors; recommend candidates for approval of the Board to fill any vacancies
in the Board; and evaluate the performance of each of the directors of the
Company. The Committee considers suggestions from shareholders and other sources
regarding possible candidates for director. Such suggestions, together with
appropriate biographical information, should be submitted to the Secretary of
the Company.
The Executive Committee, composed of Messrs. Carlucci, Conway and Odeen, did
not meet in 1996, but took action on nine occasions by unanimous written
consent. The Executive Committee may act, subject to certain limitations, on all
matters concerning management of the business of the Company which may arise
between scheduled Board of Directors meetings.
The Audit and Ethics Committee, composed of Messrs. Conway, Ricks and
Williams, met four times in 1996. The principal function of the Audit and Ethics
Committee is to oversee the performance and review the scope of the audit
performed by the Company's independent auditors. The Audit and Ethics Committee
also reviews, among other things, the audit report and related findings and
recommendations by the auditors and management's responses thereto, and the fees
payable to the independent accountants for their services. Additionally, the
Audit and Ethics Committee reviews and makes recommendations to the Board with
respect to accounting matters, including financial reporting systems and
internal accounting controls for the Company. In performing its duties, the
Audit and Ethics Committee consults with the financial and accounting officers
and the internal auditors of the Company, as well as the independent
accountants.
The Compensation Committee, composed of Messrs. Carlucci and Conway and Dr.
Brown, met once in 1996, and took action on fifteen occasions by unanimous
written consent. The principal functions of the Compensation Committee are to
determine the compensation of the President and Chief Executive Officer of the
Company, review the compensation of all officers of the Company and officers of
subsidiaries at the position of Senior Vice President and above, determine the
aggregate cash bonus awards to key employees, administer the 1990 Stock Option
Plan ("1990 Plan") and 1994 Stock Option Plan ("1994 Plan") and select key
employees who will receive stock option grants and determine the terms of those
grants.
Messrs. Carlucci and Conway and each director who was not an officer of the
Company or any of its subsidiaries was paid a director's fee at an annual rate
of $24,000, plus $1,000 per day or any portion of a day for attendance at
meetings of the Board of Directors and any committees of the Board of Directors,
and $250 per hour (travel time excluded) for consulting services outside of such
meetings and for visits to the Company's offices or other locations on behalf of
the Company for any special purpose, at the request of the President of the
Company. Directors are reimbursed for out-of-pocket expenses incurred to attend
such meetings and to make such visits.
4
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Frank C. Carlucci, the Chairman and a Director of the Company, and William
E. Conway, Jr., Vice Chairman and a Director, are Managing Directors of Carlyle,
which rendered financial advisory services to the Company during 1996.
The Company has retained Carlyle to provide certain financial and
investor-relations services, to assist management in evaluating corporate
acquisition opportunities and financial strategies and to provide similar other
services. In consideration of such services, the Company pays Carlyle an annual
fee of $500,000 plus expenses, a portion of which is offset by the amount which
ordinarily would be payable to Mr. Conway for services rendered in his capacity
as Director of the Company. In addition, Carlyle serves as a financial advisor
to the Company in connection with any acquisition, corporate reorganization,
financing, stock offering or similar transaction by the Company, and has
received fees commensurate with its services in connection with any such
transaction. The Company paid Carlyle approximately $503,000, $506,000 and
$505,000, for the provision of these services for the years ended December 31,
1996, 1995 and 1994, respectively.
All future transactions (other than ordinary course transactions such as
fixing salaries or awarding employee benefits) and loans between the Company and
its directors, officers and principal shareholders will be ratified by a
majority of the members of the Board of Directors not having any interest in the
transactions and will be on terms believed to be no less favorable to the
Company than those generally available from unaffiliated third parties.
1997 STOCK OPTION PLAN
The Company intends to adopt, subject to obtaining shareholder approval, the
1997 Stock Option Plan (the "1997 Plan"), a copy of which is set forth in full
as Exhibit A to this proxy statement. The following description is a summary of
some, but not all, of the essential provisions of the 1997 Plan, and is
qualified by reference to the full text of the 1997 Plan. The 1997 Plan provides
for the grant to officers (approximately 110 individuals) and key employees of
options to purchase up to 2,500,000 shares of Common Stock. Line management
recommends on an annual basis "key employees" to receive stock options. Key
employees are not limited to those employees in particular positions or
categories, and the group of key employees who are granted options may vary from
year to year. The average number of options granted to employees under existing
stock option plans in each of the years 1994, 1995 and 1996 is 943,700 shares.
The options granted under the 1997 Plan may either qualify as incentive stock
options as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code"), or, subject to the approval of the Compensation Committee,
be non-qualified options. The 1997 Plan is designed to promote the interests of
the Company and its shareholders by providing selected officers and key
employees with additional incentive and opportunity to increase their
proprietary interest in the Company, thereby increasing their personal interest
in its continued progress and success. The purchase price of the shares of
Common Stock covered by each option is determined in the discretion of the
Compensation Committee, but, in the case of an incentive stock option, the price
may not be less than 100% of the fair market value of Common Stock on the date
the incentive option is granted. No consideration will be paid to the Company
upon the grant of options. Unless otherwise provided in a non-qualified stock
option agreement, options terminate ten years from the date of grant. The Board
of Directors may suspend or terminate the 1997 Plan at any time and, subject to
certain limitations, amend the 1997 Plan or any options granted thereunder,
except that no amendment requiring shareholder approval under the provisions of
Section 422 of the Code and related regulations relating to incentive stock
options will be effective without approval of the shareholders. On March 25,
1997, the fair market value (as defined in the 1997 Plan) of shares of Common
Stock of the Company was $21.75 per share, or about $54,375,000 in the aggregate
for the 2,500,000 shares of Common Stock subject to the 1997 Plan.
5
The following table contains information on options granted in 1997 under
the 1997 Plan subject to shareholder approval of the 1997 Plan:
1997 PLAN
-----------------------
DOLLAR NUMBER
VALUE OF UNITS
------------ ---------
Philip A. Odeen.......................................................................... -- 0
C. Thomas Faulders, III.................................................................. -- 0
William C. Hoover........................................................................ -- 0
Helen M. Seltzer......................................................................... -- 0
Dr. William E. Sweeney, Jr............................................................... -- 0
Roy F. Woodle............................................................................ -- 0
Current Executive Officers as a Group.................................................... -- 0
Non-Executive Officer Directors.......................................................... -- 0
Non-Executive Officer Employees.......................................................... $ 6,453,420 291,680
The following is a general description of federal income tax consequences
related to non-qualified stock options and incentive stock options granted under
the 1997 Plan.
NON-QUALIFIED OPTIONS
No income will be realized by an optionee upon the grant of a non-qualified
stock option under the 1997 Plan. Upon the exercise of a non-qualified stock
option, an optionee will realize ordinary income, subject to withholding, in an
amount equal to the excess of the fair market value of the Common Stock on the
date of exercise over the option price. An optionee who is subject to "short
swing" trading rules under Section 16 of the Exchange Act which apply to
purchases and sales within any six-month period (i.e., an executive officer or
director of the Company) will, unless the optionee elects otherwise within 30
days of exercise, recognize income at the earlier of (i) the time when the
optionee is permitted to sell the Common Stock at a profit without being subject
to suit under the Exchange Act, or (ii) the lapse of the six-month liability
period. The income recognized will be the excess of the Common Stock's fair
market value at such time over the option price, and any dividends the optionee
receives on Common stock before that time will be taxable as compensation. The
Company will be entitled to deduct as compensation the amount realized by the
optionee as ordinary income in the same year as that amount is taxable to the
optionee. If the Common Stock acquired upon exercise of the non-qualified stock
option is later sold or exchanged, the difference between the sales price and
the optionee's tax basis for such stock (generally the fair market value of the
Common Stock on the date the optionee recognizes income from the exercise of the
non-qualified stock option) will be taxable as a long-term or short-term capital
gain or loss, depending upon the period the Common Stock was held. The holding
period of Common Stock acquired on exercise of a non-qualified option will begin
on the day after the day upon which income is recognized.
If an optionee elects to utilize shares of Common Stock already owned by the
optionee as payment for all or part of the purchase price of shares to be
acquired upon the exercise of a non-qualified stock option, then, to the extent
the number of shares acquired upon exercise of the non-qualified option does not
exceed the number of already-owned shares exchanged, no gain or loss will be
realized by the optionee on such exchange, the holding period of the shares
received (for purposes of determining whether there is a long-term or short-term
gain or loss upon a subsequent disposition of the shares) will include the
holding period of the shares surrendered, and the tax basis of the shares
received will equal the tax basis of the shares surrendered. If the number of
shares acquired upon exercise of the non-qualified option exceeds the number of
already-owned shares exchanged, the optionee will be taxed on the additional
shares as described above, realizing ordinary income on the receipt of such
additional shares in an amount equal to the fair market value of such additional
shares less any cash paid for them. The holding period for such additional
shares will commence on the day after the date the option is exercised or, in
the case of
6
optionees subject to Section 16(b) of the Exchange Act who do not elect
otherwise, on the day after the earlier of (i) the date the six-month Section
16(b) liability period ends or (ii) the date when a sale of the shares will not
subject the optionee to suit under Section 16(b).
INCENTIVE STOCK OPTIONS
No income will be realized by an optionee upon either the grant or exercise
of an incentive stock option under the 1997 Plan, provided that the optionee was
an employee of the Company or a subsidiary of the Company for the entire period
from the date of grant of the incentive stock option until thirty days (or such
longer period permitted by the Plan) before the date of exercise. This is true
whether the exercise price is paid in cash or by the tender of Common Stock in
payment of the purchase price. However, the difference between the option price
and the fair market value of the Common Stock at the time of exercise is
includible in alternative minimum taxable income in calculating any alternative
minimum tax liability. In the case of optionees subject to Section 16(b) of the
Exchange Act (i.e., executive officers and directors of the Company) who do not
elect otherwise, the fair market value measurement date for alternative minimum
tax purposes will occur on the earlier of (i) the date the six-month Section
16(b) liability period ends or (ii) the date when a sale of the shares will not
subject the optionee to suit under Section 16(b).
If the optionee does not dispose of the Common Stock acquired upon exercise
of the incentive stock option for at least two years from the date the incentive
stock option is granted and at least one year after the Common Stock is issued
to him, all gain subsequently realized upon the disposition of the Common Stock
will be treated as long-term capital gain, and any loss will be treated as a
long-term capital loss. If these holding periods are met, the company will not
be entitled to any deduction on account of the grant or exercise of the
incentive stock option.
If the optionee disposes of the Common Stock acquired pursuant to the
incentive stock option within either two years from the date of grant or one
year from the date of exercise, then the optionee will realize ordinary income
in the amount of the excess, if any, of the fair market value of the Common
Stock on the date of exercise over the option price except that if his actual
profit (amount realized less option price) is less and the disposition is a sale
or exchange for which a tax loss, if sustained, would be permitted, only such
actual profit will be included in ordinary income. The amount of additional gain
realized, if any, on such disposition will be taxable as a long-term or
short-term capital gain, depending upon the period the optionee has held the
Common Stock. The company will be entitled to a deduction equal to the amount of
ordinary income taxable to the optionee.
Where, in an option exercise, the optionee tenders Common Stock as all or
part of the purchase price, to the extent that the number of shares received
does not exceed the number of shares surrendered, the optionee's tax basis and
holding period for the shares received will be the same as those for the shares
surrendered. The tax basis for the shares received in excess of the shares
surrendered would equal any cash paid for them, and the holding period would
commence on the day after the date of exercise of the incentive stock option. An
optionee's use of stock acquired upon exercise of an incentive stock option as
payment upon the exercise of an incentive stock option will be treated as a
disqualifying, or early, disposition of such stock if the transferred stock is
used prior to the date all applicable holding period requirements are satisfied.
A disqualifying disposition of such stock would result in the recognition of
ordinary income, but not any additional capital gain, and the tax basis of the
number of shares received which is equal to the number of shares surrendered
will be increased by the amount of ordinary income recognized.
Subject to approval of shareholders, the Board of Directors has approved the
adoption of the 1997 Plan. To be approved, this action must be authorized by a
majority of the shares present at the meeting entitled to vote thereon. Shares
which are voted against the approval of the 1997 Plan, shares the holders of
which abstain from voting for the approval of the 1997 Plan and shares held in
street name which are not voted on this proposal will not be counted in the
total number of shares voted for the approval of the
7
Plan. Abstentions and votes against the approval of the 1997 Plan will be
counted in the tabulation of the votes cast on this proposal; however, broker
non-votes are not counted for purposes of determining whether this proposal has
been approved.
Management will present to the shareholders at the meeting the following
resolution:
"RESOLVED, that the adoption of the 1997 Stock Option Plan by the
Company be and is hereby approved."
Your Board of Directors recommends a vote FOR this proposal.
AUTHORIZATION OF ADDITIONAL SHARES
The Company intends to authorize, subject to approval of shareholders, an
additional 50,000,000 shares of Common Stock of the Company. The Company's
Common Stock has been traded on the Nasdaq Stock Market since June 29, 1995. The
Company does not presently have any plans to issue additional shares of Common
Stock other than shares of Common Stock which may be issued upon exercise of
existing options or options which may be granted in the future under the 1990
Plan, 1994 Plan or 1997 Plan, if the 1997 Plan is approved by shareholders, the
Management Incentive Stock Program or under the 1996 Employee Stock Purchase
Plan. Further authorization for the issuance of such shares of Common Stock will
not be solicited prior to issuance unless required to comply with applicable
law, whether or not such shares are issued other than pursuant to such plans.
The Company will receive, as consideration for the issuance of shares of
Common Stock issued upon options granted under the 1990 Plan, 1994 Plan or 1997
Plan, cash or Common Stock or a combination thereof equal to the exercise price
specified for such options; if all shares of Common Stock issued under options
outstanding under the 1990 Plan, 1994 Plan and Management Incentive Stock
Program were shares authorized hereunder, the Company would receive the
aggregate exercise price for all such options, covering 3,297,520 shares of
Common Stock, or $43,344,327. The purchase price for shares of Common Stock
purchased under the 1996 Employee Stock Purchase Plan ("1996 Plan") is the lower
of (i) 85% of the fair market value on the first day of each six-month offering
period, or (ii) 85% of the fair market value of the Common Stock determined
under the terms of the 1996 Plan as of the end of each month. The current
offering period began on November 1, 1996, and the purchase price payable
pursuant to (i) above is $21.356.
Subject to approval of shareholders, the Board of Directors has approved the
authorization of an additional 50,000,000 shares of Common Stock of the Company.
To be approved, this action must be authorized by a majority of the shares
outstanding entitled to vote thereon. Shares which are voted against the
authorization of additional shares, shares the holders of which abstain from
voting for the authorization of additional shares and shares held in street name
which are not voted on this proposal will not be counted in the total number of
shares voted for the approval of the proposal. Abstentions and votes against the
authorization of additional shares will be counted in the tabulation of the
votes cast on this proposal; however, broker non-votes are not counted for
purposes of determining whether this proposal has been approved.
Management will present to the shareholders at the meeting the following
resolution:
"RESOLVED, that the authorization of an additional 50,000,000 shares of
Common Stock of the Company be and is hereby approved."
Your Board of Directors recommends a vote FOR this proposal.
8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth beneficial ownership of the Company's Common
Stock at February 28, 1997 by (i) each stockholder known by the Company to be
the beneficial owner of more than five percent of Common Stock, (ii) each
Director of the Company, (iii) each named executive officer of the Company and
(iv) all executive officers and Directors of the Company as a group. Unless
otherwise indicated, all shares are owned directly and the indicated owner has
sole voting and dispositive power with respect thereto. Unless otherwise
indicated, the address of each person is the Company's principal executive
office.
SHARES OF
COMMON STOCK(1)
------------------------
DIRECTORS, OFFICERS AND 5% STOCKHOLDERS NUMBER PERCENTAGE
- ------------------------------------------------------------------------------------------- --------- -------------
The Carlyle Group L.P.(2).................................................................. 7,660,000 26.4%
Philip A. Odeen(3)......................................................................... 350,488 1.2
Dr. William E. Sweeney, Jr.(4)............................................................. 278,026 *
Earle C. Williams.......................................................................... 94,712 *
William E. Conway, Jr...................................................................... 83,618 *
Frank C. Carlucci(5)....................................................................... 75,560 *
C. Thomas Faulders, III(6)................................................................. 46,106 *
Roy V. Woodle(7)........................................................................... 39,498 *
Neil Goldschmidt........................................................................... 14,414 *
Dr. Jeanette Grasselli Brown............................................................... 3,956 *
William C. Hoover.......................................................................... 1,400 *
Phillip R. Cox............................................................................. 482 *
Walther Leisler Kiep....................................................................... 0 *
Thomas G. Ricks............................................................................ 0 *
All Directors and Executive Officers as a group (total 14 persons)......................... 996,176 3.4%
- ------------------------
* Less than 1% of the outstanding Common Stock.
(1) Pursuant to the regulations of the Securities and Exchange Commission (SEC),
shares are deemed to be "beneficially owned" by a person if such person
directly or indirectly has or shares the power to vote or dispose of such
shares whether or not such person has any pecuniary interest in such shares
or the right to acquire the power to vote or dispose of such shares within
60 days, including any right to acquire through the exercise of any option,
warrant or right.
(2) Includes 6,470,000 shares of Common Stock held by The Carlyle Partners
Leveraged Capital Fund I, L.P. ("The Carlyle Fund"), 1,000,000 shares of
Common Stock held by BDM Acquisition Partners II, L.P. ("BDM Partners II")
and 190,000 shares of Common Stock held by BDM Acquisition Partners, L.P.
("BDM Partners"). Carlyle is the sole General Partner of The Carlyle Fund,
BDM Partners II and BDM Partners. TWC Virginia, Inc. is the sole General
Partner of Carlyle. Frank C. Carlucci is Chairman and a Managing Director
and William E. Conway, Jr. is a Managing Director of Carlyle. Messrs.
Carlucci and Conway are each Directors and shareholders of the Company.
(3) Includes 12,000 shares held by The Philip and Marjorie Odeen Charitable
Remainder Unitrust, of which Mr. Odeen is the sole trustee. Also includes
options to purchase 87,560 shares of Common Stock granted under the 1990
Plan which are currently exercisable.
(4) Includes 230,000 shares held by the William E. Sweeney, Jr. & Elizabeth W.
Sweeney Revocable Trust, of which Dr. Sweeney and his wife are the sole
trustees. Also includes options to purchase 46,000 shares of Common Stock
granted under the 1990 Plan which are currently exercisable.
(5) Voting power for 75,560 of these shares is shared with Mr. Carlucci's wife.
(6) Includes options to purchase 7,500 shares and 11,580 shares of Common Stock
granted under the 1990 Plan and 1994 Plan, respectively, which are currently
exercisable.
(7) Includes options to purchase 13,746 shares and 2,500 shares of Common Stock
granted under the 1990 Plan and 1994 Plan, respectively, which are currently
exercisable.
The Carlyle Fund, BDM Partners II and BDM Partners, three limited
partnerships controlled by Carlyle, have, in the aggregate, 26.4% of the
Company's voting power. Consequently, Carlyle will continue to exercise
significant influence on the election of directors of the Company and the
outcome of all matters submitted to a vote of the Company's shareholders, as
well as on the Company's management, operations and policies.
9
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table contains information on compensation for the years ended
December 31, 1996, 1995, and 1994 paid to the Chief Executive Officer and the
four most highly compensated executive officers of the Company, other than the
Chief Executive Officer, whose aggregate cash compensation exceeded $100,000
during such years (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
ANNUAL COMPENSATION ------------------------
--------------------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING
PRINCIPAL POSITION YEAR SALARY BONUS(2) COMPENSATION(3) AWARDS(4) OPTIONS
- ------------------------------------ --------- --------- ----------- ---------------- ----------- -----------
Philip A. Odeen..................... 1996 $ 498,077 $ 350,000 $ -0- $ -0- 40,000
President and Chief Executive 1995 400,000 300,000 -0- -0- 40,000
Officer 1994 400,000 175,000 -0- -0- 20,000
C. Thomas Faulders, III(1).......... 1996 302,083 140,000 -0- -0- 30,000
Executive Vice President, 1995 183,333 175,000 -0- 431,000 60,000
Treasurer and Chief Financial 1994 N/A N/A N/A N/A N/A
Officer
William C. Hoover(1)................ 1996 181,684 150,000 -0- 1,118,500 100,000
Executive Vice President 1995 N/A N/A N/A N/A N/A
1994 N/A N/A N/A N/A N/A
Dr. William E. Sweeney.............. 1996 249,792 160,000 99,937 -0- -0-
General Manager, IABG 1995 240,000 -0- 177,973 -0- -0-
1994 241,258 145,000 116,551 -0- 20,000
Roy V. Woodle....................... 1996 260,000 131,000 -0- -0- 10,000
President and Chief Executive 1995 250,000 106,000 -0- -0- 10,000
Officer, Vinnell 1994 250,000 106,000 -0- -0- 10,000
ALL OTHER
PRINCIPAL POSITION COMPENSATION(5)
- ------------------------------------ -----------------
Philip A. Odeen..................... $ 65,223
President and Chief Executive 66,033
Officer 66,033
C. Thomas Faulders, III(1).......... 11,125
Executive Vice President, 458
Treasurer and Chief Financial N/A
Officer
William C. Hoover(1)................ 3,500
Executive Vice President N/A
N/A
Dr. William E. Sweeney.............. 7,000
General Manager, IABG 5,933
7,040
Roy V. Woodle....................... 57,200
President and Chief Executive 62,720
Officer, Vinnell 60,834
- ------------------------
(1) Mr. Faulders joined the Company in April 1995. The bonus award shown for Mr.
Faulders in 1995 includes a $25,000 bonus paid in connection with his
employment. Mr. Hoover joined the Company in June 1996.
(2) Bonus awards are reflected in the year to which they are attributable and
not the year in which they are actually paid.
(3) Fringe benefit amounts are omitted to the extent the aggregate value of such
benefits is less than 10% of salary and bonus, or $50,000. The amounts shown
for Dr. Sweeney reflects reimbursement of relocation and travel expenses,
cost of living allowance, quarters allowance and exchange rate fluctuation
allowance associated with his overseas assignment.
(4) Restricted stock awards were issued pursuant to the Management Incentive
Stock ("MIS") Program under which certain members of management were granted
options to purchase Common Stock at an exercise price of $0.01 per share.
These options vest over a period greater than three years. The options are
subject to forfeiture in the event certain tenure and, in part, certain
Company performance criteria are not met. The amounts shown represent the
full dollar value of the shares of Common Stock based on the closing market
price on the date of grant, less the $.01 per share exercise price,
regardless of whether the shares were actually purchased. At December 31,
1996, Messrs. Odeen, Faulders and Hoover, Dr. Sweeney and Mr. Woodle held
200,000, 50,000, 50,000, 175,000 and 10,000 shares of restricted Common
Stock, respectively, worth $5,424,000, $1,356,000, $1,356,000, $4,746,000
and $271,200, respectively. The value of the Common Stock ownership at
year-end is based on the last reported sale price of the Common Stock on
December 31, 1996, as reported by Nasdaq Stock Market less the $.01 per
share exercise price paid by the named executive officer upon purchase
thereof. The shares of restricted stock are entitled to the same dividends
as all other outstanding shares of Common Stock.
(5) Amounts shown for 1996 include the dollar value of the life insurance
premiums paid on behalf of Messrs. Odeen, Faulders and Hoover, Dr. Sweeney
and Mr. Woodle for the last fiscal year, which amounts are $6,500, $9,625,
$3,500, $5,500 and $5,616, respectively. Amounts shown for 1996 also include
$1,500 of employer matched salary deferral contributions to the 401(k)
Savings Plan for each of Messrs. Odeen and Faulders, Dr. Sweeney and Mr.
Woodle. The amount shown for 1996 for Mr. Woodle includes a contribution of
$11,520 on his behalf to the Vinnell Corporation Retirement Plan (the
"Vinnell Plan"), a defined contribution money purchase plan. The amounts
shown for 1996 for Messrs. Odeen and Woodle also include a contribution of
$57,223 and $44,000, respectively, to a defined contribution supplemental
executive retirement plan ("SERP") on their behalf.
10
The following table sets forth information regarding grants of stock options
by the Company during the fiscal year ended December 31, 1996 to the Named
Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL MARKET AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS EXERCISE PRICE OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO OR BASE ON GRANT FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE DATE EXPIRATION -------------------------------
NAME GRANTED FISCAL YEAR ($/SH) ($/SH) DATE 0% 5% 10%
- --------------------------- ----------- ----------------- ----------- ----------- ----------- --------- --------- ---------
Philip A. Odeen............ 40,000(1) 4% $ 17.75 $ 17.75 2/23/06 -0- $ 446,515 $1,131,557
C. Thomas Faulders, III.... 30,000(1) 3% 17.75 17.75 2/23/06 -0- 334,886 848,668
William C. Hoover.......... 100,000(1) 10% 22.375 22.375 6/3/06 -0- 760,580 1,218,198
50,000(2) 5% 0.01 22.375 7/3/00 $1,118,500 1,265,512 1,427,583
Dr. William E. Sweeney..... -0-(1) 0% N/A N/A N/A -0- -0- -0-
Roy V. Woodle.............. 10,000(1) 1% 17.75 17.75 2/23/06 -0- 111,629 282,889
- ------------------------
(1) Included in the above options granted in 1996 are 70,000 options granted
under the 1990 Plan and 110,000 options granted under the 1994 Plan. All
options granted in 1996 for the individuals listed above vest and become
exercisable at the rate of 25% per year over the course of four years from
the date of grant.
(2) Of the 50,000 management incentive stock options granted to Mr. Hoover,
41,116 were issued under the 1994 Plan and 8,884 were issued under the MIS
Plan. Options for 12,500 shares of Common Stock become exercisable in each
of June 1997, 1998, 1999 and 2000.
In March 1997, the Company granted options to purchase an aggregate of
120,000 shares of Common Stock to the Named Executive Officers.
The following table provides information regarding the exercise of options
during the fiscal year ended December 31, 1996 by the Named Executive Officers:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES OPTIONS AT FY-END OPTIONS AT FY-END
ACQUIRED ON VALUE ---------------------------- ------------------------------
NAME EXERCISE REALIZED(3) UNEXERCISABLE EXERCISABLE UNEXERCISABLE(4) EXERCISABLE(4)
- --------------------------------- ------------- ----------- ------------- ------------- --------------- -------------
Philip A. Odeen.................. 22,000(1) 492,250 84,060 63,940 $ 1,207,698 $ 1,478,303
C. Thomas Faulders, III.......... -0-(1) -0- 76,320 13,680 1,138,170 253,080
12,500(2) 295,250 37,500 -0- 1,017,000 -0-
------ ----------- ------------- ------ --------------- -------------
12,500 295,250 113,820 13,680 2,155,170 253,080
William C. Hoover................ -0-(1) -0- 100,000 -0- 475,000 -0-
-0-(2) -0- 50,000 -0- 1,356,000 -0-
------ ----------- ------------- ------ --------------- -------------
-0- -0- 150,000 -0- 1,831,000 -0-
Dr. William E. Sweeney........... 18,000(1) 441,000 6,666 39,334 140,819 904,931
Roy V. Woodle.................... 40,254(1) 1,007,939 20,832 7,914 302,889 160,621
- ------------------------
(1) Option activity and/or status of options granted under the 1990 Plan and
1994 Plan.
(2) Option activity and/or status of options granted under the MIS Program.
(3) The values disclosed in this column are based on the fair market value of
the Common Stock on the date of exercise less the exercise price.
(4) The values disclosed in these columns are based on the last reported sales
price of the Common Stock on December 31, 1996, as reported by the Nasdaq
Stock Market.
11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
For fiscal years 1996, the Compensation Committee of the Board of Directors
made all determinations with respect to executive officer compensation. Messrs.
Carlucci and Conway and Dr. Brown, each a Director of the Company, served as
members of the Compensation Committee in 1996. The Company is not aware of any
Compensation Committee interlocks.
Messrs. Carlucci and Conway are Chairman and Vice Chairman of the Company,
respectively, shareholders of the Company and Managing Directors of Carlyle. Mr.
Conway owns more than 10% of the capital stock of the general partner of
Carlyle. Carlyle is the general partner of The Carlyle Fund, BDM Partners and
BDM Partners II, shareholders of the Company.
The Company has retained Carlyle to provide certain financial and
investor-relations services, to assist management in evaluating corporate
acquisition opportunities and financial strategies and to provide other similar
services. In consideration of such services, the Company pays Carlyle an annual
fee of $500,000 plus expenses, a portion of which is offset by the amount which
ordinarily would be payable to Mr. Conway for services rendered in his capacity
as Director of the Company. In addition, Carlyle serves as a financial advisor
to the Company in connection with any acquisition, corporate reorganization,
financing, stock offering or similar transaction by the Company, and has
received fees commensurate with its services in connection with any such
transaction. The Company paid Carlyle approximately $503,000, $506,000 and
$505,000 for the provision of these services for the years ended December 31,
1996, 1995 and 1994, respectively.
RETIREMENT PLAN
The BDM Retirement Plan (the "Retirement Plan") is a defined benefit plan
funded entirely by the Company. The retirement benefit formula, coupled with
expected benefits from Social Security, is designed to provide a defined level
of income during retirement. Employees of BDM International, Inc. and its
domestic affiliates, except for the MSC Division, Vinnell Corporation, The BDM
Corporation of Saudi Arabia, BDM-Oklahoma, Inc. and IT Services Company, who
complete a specified number of hours of employment in a plan year accrue benefit
service under the Retirement Plan. Under the Retirement Plan, the normal
retirement age is 60. Employees are eligible for early retirement at age 55, if
they have completed 24 months of active, regular, full-time employment.
Participants in the Retirement Plan are generally entitled upon retirement to a
benefit equal to the sum of (a) for each year of benefit accrual service for
plan years after December 25, 1989, 1.4% of annual compensation up to the
35-year average of the Social Security-covered compensation plus 1.82% of annual
compensation in excess of the 35-year average of the Social Security-covered
compensation, and (b) 1.333% of average annual compensation up to the 35-year
average of the Social Security-covered compensation for 1989, plus 2% of the
average annual compensation in excess of the 35-year average of the Social
Security-covered compensation for 1989 multiplied by the number of years of
benefit accrual service for plan years prior to December 26, 1989. The maximum
number of years of benefit accrual service allowed in making the calculation is
20.
The Company intends to supplement the benefit payments to Messrs. Odeen and
Woodle under the Company's retirement plans through a defined contribution SERP.
An annual contribution will be credited to accounts established in the Company
for Messrs. Odeen and Woodle in the amounts of $57,223 and $44,000,
respectively, which are expected to provide an actuarially determined benefit
when Messrs. Odeen and Woodle reach the age of 65, that, when combined with the
benefits from the Company's retirement plans, will equal $90,000.
The Company intends to supplement the benefit payment to Messrs. Faulders
and Hoover and Dr. Sweeney under the Retirement Plan through a defined benefit
SERP to the extent necessary to ensure that such individuals who retire on or
after their normal retirement age with 20 or more years of benefit service
receive a stated target retirement benefit of 45% of average compensation for
the five highest consecutive years of such individuals employment.
12
The years of benefit accrual service under the Retirement Plan and the
estimated maximum anticipated annual benefits at normal retirement date for the
Named Executive Officers participating in the Retirement Plan, as of December
31, 1996, are presented in the table below. The estimated maximum anticipated
annual benefits at normal retirement date for each of such officers who are
participants in the SERP as of December 31, 1996 are also presented. In
calculating benefits at retirement, annual earnings have been estimated based on
no escalation of current plan year earnings. Benefit payments may be subject to
a legislated ceiling at the time of retirement.
ESTIMATED ANNUAL
BENEFIT UNDER THE
CURRENT YEARS OF BDM RETIREMENT PLAN ESTIMATED
CURRENT BENEFIT ACCRUAL AT NORMAL RETIREMENT ANNUAL BENEFIT
NAME AGE(1) SERVICE (AGE 60) UNDER THE SERP(3)
- -------------------------------------------- ------------- ------------------- --------------------- ------------------
Philip A. Odeen............................. 61 5 $ 17,263 $ 62,300
C. Thomas Faulders, III..................... 47 2 39,562 101,915
William C. Hoover........................... 47 1 34,390 91,920
Dr. William E. Sweeney, Jr. ................ 58 20 60,295 99,954
Roy V. Woodle(2)............................ 61 N/A N/A 47,464
- ------------------------
(1) As of December 31, 1996.
(2) Mr. Woodle does not participate in the Retirement Plan.
(3) Benefits for Messrs. Odeen and Woodle are calculated based on retirement at
age 65. Benefits for Messrs. Faulders and Hoover and Dr. Sweeney are
calculated based on retirement at age 60.
PERFORMANCE GRAPH
The following graph shows changes over the past five-year period (the Common
Stock of the Company was registered under Section 12(g) of the Exchange Act on
April 29, 1994) in the value of $100 invested in: (1) BDM Common Stock; (2) the
Standard & Poor's 500 Index; and (3) an industry group of 12 other information
systems and technology services companies: American Management Systems, Inc.,
Analysis & Technology, Inc., Analysts International Corp., CACI International
Inc., Computer Horizons Corp., Computer Sciences Corp., Computer Task Group,
Inc., EDS Corp., Keane Inc., Logicon, Inc., Nichols Research Corp., and Systems
and Computer Technology Corp. The values of each investment are based on share
price appreciation plus dividends, with reinvestment of dividends. The
calculations exclude trading commissions and taxes.
13
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
BDM INTERNATIONAL, INC. S&P 500 PEER GROUP
1991 100.00 100.00 100.00
1992 100.00 107.61 111.42
1993 161.91 118.40 113.02
1994 228.57 120.01 151.95
1995 552.38 164.95 224.02
1996 1033.33 202.73 272.83
FISCAL YEARS ENDED DECEMBER 31
--------------------------------------------------
1991 1992 1993 1994
----- ----- ----- -----
BDM International, Inc. ............................................... 100 100 162 229
S & P 500.............................................................. 100 108 118 120
Industry Group......................................................... 100 111 113 152
1995 1996
----- ---------
BDM International, Inc. ............................................... 552 1,033
S & P 500.............................................................. 165 203
Industry Group......................................................... 224 273
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors (the
"Board") of the Company is composed entirely of independent outside directors.
The members of the Committee are Frank C. Carlucci, Chairman, William E. Conway,
Jr. and Dr. Jeanette Grasselli Brown. Messrs. Carlucci and Conway have been
members of the Committee since October 24, 1990, and Dr. Brown became a member
of the Committee on May 10, 1996.
The Committee has the following authority and responsibilities: reviewing
and recommending to the Board the compensation of members of the Board of
Directors of the Company; determining the compensation of the President,
including fringe benefits and incentive compensation; reviewing and making
recommendations concerning the compensation of all officers of the Company other
than the President of the Company; and reviewing the compensation of all
employees of any wholly owned subsidiary of the Company who are at an executive
level in such subsidiary company.
The Committee annually evaluates salary compensation and incentive
compensation in the form of cash bonus awards and incentive stock options. Such
evaluations are made following a review of the Company's financial performance,
results of operations, contract awards and proposal activity, and the
achievement of business goals. In order to ensure that BDM's salaries are
competitive with the marketplace, the Company participates in five or six
executive compensation surveys on an annual basis. By benchmarking its executive
positions to the midpoint of related positions within the industry, the Company
ensures that not only its salaries but its total compensation is competitive.
This information is reviewed on an annual basis.
14
Compensation is given to executive officers (including the named executive
officers) in the form of salary, cash bonus incentive compensation awards, and
stock option awards under the 1990 Plan, the 1994 Plan, and the vesting of
Management Incentive Stock under the MIS Program (together, the "Plans"). As
noted elsewhere in this Proxy Statement, receipt of shares under the MIS Program
is dependent on the continued employment of such executives through the vesting
dates of such shares and, in part, the Company meeting certain financial
performance goals.
The Plans are designed to allow certain key employees, upon whose efforts
the Company is dependent for the successful conduct of its business, to derive
financial benefit from the appreciation in the value of the Company's stock and
to take a proprietary interest in the Company. The financial reward derived at
the time of the sale of the shares should serve as an incentive for the employee
to continue employment and increase his or her efforts. Stock options are
designed to motivate, retain, and reward employees with meaningful financial
gains, tied to Company performance, in exchange for a sustained (multi-year)
contribution to the Company. The primary purpose of the cash bonus incentive
program is to reward individual performance, in the context of the Company
performance, evaluated over the last twelve months. Thus, cash bonuses are a
short-term incentive program.
Evaluation factors for 1996 incentives were as follows. With respect to cash
bonus incentive compensation, awards were made on the basis of 1996 performance
in the following key contribution areas, where appropriate: generating revenue,
direct labor, and profit in accordance with individual projections and goals;
developing new or expanded market positions; and capturing significant business
that builds a new base for the future. The executives were also evaluated in
terms of leadership and overall past performance in the following applicable
areas: human resources development, including mentoring, training, meeting equal
employment opportunity and affirmative action goals, and reducing turnover;
teamwork and cooperation within the Company; resource management, including the
human resources of his or her organizational unit, as well as the effective
utilization of the Company's administrative resources; organizational
effectiveness and discipline (meaning that their organization runs smoothly
according to established Company policies and procedures); and overall
effectiveness, both within the Company and externally with clients and the
business community. Certain executives of the Company have a portion of their
incentive compensation determined based on the financial and other performance
of the Company as a whole.
Awards of incentive stock options to executive employees for 1996 were based
on current performance, as well as factors related to expected future
performance and contributions to the Company. In addition to the specific
performance and leadership evaluation, the full range of considerations
included, where appropriate: the potential for increased contribution during
1997; the expected level of achievement and contribution in years after 1997;
the contribution of the employee to the Company as a whole; the amount of
incentive stock options and the Management Incentive Stock rights held by the
employee relative to his or her peers; and the importance (motivational value)
of incentive stock options to the employee.
Philip A. Odeen was employed as President and Chief Executive Officer of the
Company, effective May 1, 1992. The compensation of Mr. Odeen was initially
determined by the Committee at the time of his employment with the Company. Mr.
Odeen's annual salary was established at a rate of $400,000. The Committee
determined to increase Mr. Odeen's annual salary to $500,000 effective January
1, 1996. His incentive compensation related to 1996, in the form of a cash bonus
approved February 21, 1997, and incentive stock options granted March 3, 1997,
was based on the Company's performance in 1996. See Summary Compensation Table
above.
Compensation Committee
Dr. Jeanette Grasselli Brown
Frank C. Carlucci
William E. Conway, Jr.
15
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Subject to shareholders' approval, the Board of Directors has appointed
Coopers & Lybrand as the Company's independent accountants for the year ending
December 31, 1997. Such reappointment is recommended by the Audit and Ethics
Committee.
Management will present to the meeting the following resolution:
"RESOLVED, that the appointment by the Board of Directors of the firm
Coopers & Lybrand as independent accountants for the year ending December
31, 1997, be and is hereby approved."
Your Board of Directors recommends a vote FOR this proposal.
A representative of Coopers & Lybrand is expected to attend the Annual
Meeting of Shareholders, will have an opportunity to make a statement if he
desires to do so, and will be available to respond to appropriate questions.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10% of the registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the SEC on Forms 3, 4 and 5 and to furnish to the Company copies
of all such reports. Based solely on its review of the copies of such forms
received by it, the Company believes that during fiscal 1996, Messrs. Faulders
and Woodle each submitted late one Form 4. The Form 4 submitted by Mr. Faulders
reported late one acquisition of Common Stock. The Form 4 submitted by Mr.
Woodle reported late two acquisitions and one disposition of Common Stock.
OTHER BUSINESS
The Company is not aware of any business or matter to be presented at the
Annual Meeting of Shareholders other than as stated herein.
MANNER OF VOTING PROXIES
The shares represented by all valid proxies that are received prior to the
vote at the meeting will be voted in the manner specified on the proxies. Where
specific choices are not indicated, the shares represented by all valid proxies
that are received will be voted: (a) FOR the nominees for director named earlier
in this Proxy Statement, (b) FOR the approval of the 1997 Stock Option Plan, (c)
FOR the approval of an increase in the authorized number of shares of the
Company and (d) FOR approval of the appointment of Coopers & Lybrand as
independent accountants for the year ending December 31, 1997. If any other
matters properly come before the meeting, it is intended that the persons named
in the accompanying proxy will vote pursuant to the proxy in accordance with
their best judgment on such matters.
OTHER MATTERS
Proxies may be solicited by directors, officers, and employees by mail,
telephone, telegraph, or in person, and solicitation costs will be paid by the
Company. Copies of this Proxy Statement and of the 1996 Annual Report to
Shareholders will be supplied by the Company to brokers, dealers, banks, and
voting trustees, or their nominees, for the purpose of soliciting proxies from
beneficial owners, and the Company will reimburse such record holders for their
reasonable expenses in connection therewith. Returned proxies will be processed
and tabulated under the supervision of independent Inspectors of Election.
1998 SHAREHOLDER PROPOSALS
In order for shareholder proposals to be eligible for inclusion in the
Company's Proxy Statement for the 1998 Annual Meeting of Shareholders, they must
be received by the Company at its principal office, 1501 BDM Way, McLean,
Virginia 22102-3204, by December 13, 1997.
16
BDM INTERNATIONAL, INC.
1997 STOCK OPTION PLAN
1. CREATION AND PURPOSE.
a. BDM International, Inc. (the "Company") hereby creates this 1997 Stock
Option Plan (the "Plan") and reserves from the authorized but unissued shares of
its Common Stock, par value $.01 per share (the "Common Stock"), a total of
1,250,000 shares (the number of such shares being subject to adjustment as
provided in Paragraph 11 hereof) for issuance pursuant to the Plan, all on the
terms hereinafter set forth.
b. The purpose of the Plan is to provide to selected officers and key
employees of the Company and its subsidiaries (as that term is defined in
Section 424 of the Internal Revenue Code of 1986, as amended (the "Code")) (the
"Subsidiary Corporations"), upon whose efforts the Company is dependent for the
successful conduct of its business, an opportunity to obtain a proprietary
interest in the Company, to increase such proprietary interest, or to benefit
from the appreciation in the value of the Company's Common Stock, all of which
will serve as an incentive to such employees to continue and increase their
efforts as employees and to remain in the employ of the Company and its
Subsidiary Corporations. The Plan will provide a means whereby (i) employees of
the Company may purchase shares of Common Stock pursuant to options which will
qualify as "incentive stock options" (the "Incentive Options") under Section 422
of the Code or under any applicable successor statute and (ii) subject to the
approval of the Compensation Committee, the issuance of non-qualified stock
options (the "Non-Qualified Options" and, together with the Incentive Options,
the "Options") under which employees may purchase shares of Common Stock.
2. ADMINISTRATION.
a. The Plan shall be administered by the Compensation Committee of the Board
of Directors of the Company (or any successor committee appointed by and
consisting of not less than three members of the Board of Directors of the
Company). The Board may from time to time appoint members of the Compensation
Committee in substitution for members previously appointed and may fill
vacancies, however caused, in the Compensation Committee. Any action of the
Compensation Committee with respect to the administration of the Plan shall be
taken by majority vote or written consent of a majority of its members.
b. Subject to the terms and conditions of the Plan, the Compensation
Committee shall have full and complete discretionary authority: (i) to construe
and interpret the Plan; (ii) to define the terms used herein; (iii) to
prescribe, amend, and rescind rules and regulations relating to the Plan; (iv)
subject to the conditions set forth in the Plan, to determine the individuals,
if any, to whom Options shall be granted (the "Optionees"), the time or times at
which Options shall be granted, the period or periods of exercisability of each
Option, the number of shares to be subject to each Option, and the Option price;
and (v) to make all other determinations necessary or advisable for the
administration of the Plan. All determinations and interpretations made by the
Compensation Committee shall be binding and conclusive on all Optionees and
their legal representatives and beneficiaries.
c. In making any determination as to the individuals to whom Options shall
be granted under the Plan and as to the number of shares of Common Stock to be
covered by such Options, the Compensation Committee shall take into account the
duties of the respective individuals, their present and potential contributions
to the success of the Company, and such other factors as the Compensation
Committee shall deem relevant in connection with accomplishing the purposes of
the Plan.
d. Nothing contained in the Plan or in any resolution adopted or to be
adopted by the Board of Directors or the shareholders of the Company, and no
action taken by the Compensation Committee, shall entitle a person to receive or
have a right to receive any Option unless and until the Optionee has executed a
written incentive stock option agreement (the "Incentive Stock Option
Agreement") with respect to Incentive Options or a written non-qualified stock
option agreement (the "Non-Qualified Stock Option
Agreement" and, together with the Incentive Stock Option Agreement, the "Stock
Option Agreements") with respect to Non-Qualified Options.
3. ELIGIBILITY; PARTICIPATION; SPECIAL LIMITATIONS.
a. Officers and key employees of the Company or of any of its Subsidiary
Corporations, including directors who are employees (within the meaning of
Section 422 of the Code), shall be eligible for selection to participate in the
Plan; provided, however, that the Board of Directors of the Company may
determine by resolution, in its discretion, employees or classes of employees
who shall not be eligible to participate in the Plan. Eligibility of officers to
participate in the Plan shall be limited to those officers who are employees of
the Company within the meaning of Section 422 of the Code. No person who is a
member of the Compensation Committee shall be eligible, nor shall such person
have been eligible at any time within one year prior to his appointment to the
Committee, to receive Options under the Plan. An individual who has been granted
an Option may, if he is otherwise eligible, be granted additional Options if the
Compensation Committee shall so determine.
b. In no event, however, shall an Incentive Option be granted (i) to the
extent that the aggregate fair market value of Common Stock with respect to
which Incentive Options are exercisable for the first time by any individual
during any calendar year (under all incentive stock option plans of the Company
and its affiliates), exceeds $100,000 (determined as of the time such options
are granted); or (ii) to any person who then owns (as that term is defined in
Section 424 of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any of its Subsidiary
Corporations, unless the option price for such Incentive Option as determined
under Paragraph 4 hereof, is at least 110% of the fair market value of the stock
subject to the Incentive Option as of the date of grant and unless the time
during which such Incentive Option may be exercised does not exceed five years
from the date of the grant thereof.
4. PURCHASE PRICE.
The purchase price of the Common Stock covered by each Option shall be
determined by the Compensation Committee, but, with respect to Incentive
Options, shall not be less than 100% of the fair market value of such Common
Stock on the date the Incentive Option is granted, and in any event not less
than the par value of the Common Stock. For purposes of this Plan the term "fair
market value" shall be defined as the highest closing price of the Common Stock
on any national stock exchange or exchanges on which the Company's stock is
traded on the date the Incentive Option is granted or if no sale of the Common
Stock shall have been made on any exchange on that date, then on the next
preceding day on which there was a sale of such stock. If the "fair market
value" cannot be determined as set forth above, the Compensation Committee shall
determine the "fair market value" pursuant to the provisions set forth in
Section 422 of the Code and the regulations promulgated thereunder.
5. TERM DURING WHICH OPTIONS MAY BE GRANTED.
Except as may otherwise be provided in a Non-Qualified Stock Option
Agreement, no Option may be granted (a) more than ten years after the earlier of
(i) the date the Plan is adopted by the Board of Directors, or (ii) the date the
Plan is approved by the shareholders of the Company, or (b) after the date on
which Options granted to all Optionees shall equal 1,250,000 shares of Common
Stock (the number of such shares being subject to adjustment as provided in
Paragraph 11 hereof). If an Option shall expire or terminate without having been
exercised in full, any shares of Common Stock covered by that Option which are
not purchased may be added to the shares otherwise available for Options to be
granted pursuant to the Plan.
2
6. EXERCISE OF OPTIONS WHICH HAVE BEEN GRANTED.
a. Options granted pursuant to the Plan may be exercised within the periods
and in the increments determined by the Compensation Committee and as stated in
the Stock Option Agreement; provided, however, that, except as otherwise
provided in a Non-Qualified Stock Option Agreement, no Option shall be
exercisable more than ten years from the date it is granted (or five years in
the case of an Incentive Option granted to a person who then owns stock
constituting more than 10% of the total combined voting power of all classes of
stock of the Company as more fully set forth in Paragraph 3b(ii)). No Options
may be exercised unless and until:
(i) except as otherwise provided in Paragraphs 8 and 9 hereof or in the
Non-Qualified Stock Option Agreement, the Optionee has been continuously
employed by the Company or a Subsidiary Corporation from the date such
Options are granted through the date of exercise;
(ii) the Plan shall have been approved by the shareholders of the Company on
or before February 21, 1998 (which date is twelve months from the date
the Plan was adopted by the Company's Board of Directors); and
(iii) a Registration Statement in effect under the Securities Act of 1993, as
amended, relating to the shares of Common Stock issuable upon the
exercise of Options contains a Prospectus which complies with the
current information requirement of Section 10(a)(3) of such Act, or in
the alternative, an opinion of counsel satisfactory to the Company has
been received which states that such registration is not required.
b. Except as may otherwise be provided in a Non-Qualified Stock Option
Agreement, an Optionee or transferee of an Option may exercise an Option granted
pursuant to the Plan by delivering to the Company, at its principal office,
addressed to the attention of the controller of the Company, written notice of
such exercise. Such written notice shall:
(i) state the Optionee's election to exercise such Option and the number of
shares of Common Stock being purchased thereby;
(ii) be signed by the Optionee or other person or persons exercising such
Option; and
(iii) be accompanied by payment in cash or check or, to the extent permitted
by law, by the surrender of shares of stock of the Company which are of
the same class as the stock to be purchased, or any combination
thereof, provided that the fair market value of the stock surrendered,
together with the cash or check, shall have an aggregate fair market
value equal to the option price of the stock to be purchased.
c. An Optionee or transferee of an Option shall have no rights as a
shareholder of the Company with respect to any shares covered by his Option
until the date of the issuance of a stock certificate, if any, to him for shares
of Common Stock. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities, or other property), or distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Paragraph 11 hereof.
7. CHANGE OF POSITION; DISCLAIMER OF RIGHTS.
Except as otherwise provided in a Non-Qualified Stock Option Agreement, any
change of an Optionee's duties or positions with the Company or any of its
Subsidiary Corporations shall not affect his right to exercise Options granted
pursuant to the Plan; provided, however, that no provision in the Plan or any
Option shall be construed to confer upon the Optionee any right to be employed
by the Company or any Subsidiary Corporation, or to interfere in any way with
the right and authority of the Company or any Subsidiary Corporation either to
increase or decrease the compensation of the Optionee, at any time, or to
terminate any relationship or employment between the Optionee and the Company or
any Subsidiary Corporation.
3
8. TERMINATION OF OPTIONEE'S EMPLOYMENT.
Except as otherwise provided in a Non-Qualified Stock Option Agreement, if
an Optionee ceases to be employed by the Company or a Subsidiary Corporation for
whatever reason, then subject to the provisions of Paragraph 9 hereof, the
Optionee shall be entitled to exercise any Option, to the extent his right to
exercise such Option had accrued at the date of termination of employment and
had not previously been exercised (i) for a period of ninety (90) days after he
ceases to be employed by the Company or a Subsidiary Corporation in the event of
his involuntary termination other than for cause or (ii) for a period of thirty
(30) days after he ceases to be employed by the Company or a Subsidiary
Corporation in the event of his voluntary resignation (but in no event shall
such Option be exercisable beyond the period specified in Paragraph 6a hereof).
Except as otherwise provided in a Non-Qualified Stock Option Agreement, in the
event that the Optionee terminates employment on or after age fifty-five (55)
other than for cause, the Optionee shall have the option to convert his Options
to Non-Qualified Stock Options to the extent his right to exercise such Option
had accrued at the date of termination of employment and had not previously been
exercised, on the same terms and conditions, provided, however, the Options
shall be exercisable at any time during the remaining term of the Option (but in
no event shall such Option be exercisable beyond the period specified in
Paragraph 6a hereof).
9. TOTAL DISABILITY OR DEATH.
a. Except as otherwise provided in the last sentence of Paragraph 8 of this
Plan or in a Non-Qualified Stock Option Agreement, if the Optionee terminates
employment with the Company or a Subsidiary Corporation as the result, in the
sole judgment of the Compensation Committee, of his becoming totally disabled,
the Optionee shall be entitled to exercise any Option to the extent his right to
exercise such Option had accrued at the date of termination of employment and
had not previously been exercised, for a period of six months after such
termination (but in no event shall such Option be exercisable beyond the period
specified in Paragraph 6a hereof).
b. Except as otherwise provided in a Non-Qualified Stock Option Agreement,
if the Optionee should die either (i) while employed by the Company or any of
its Subsidiary Corporations; or (ii) within ninety (90) days following the
termination of such employment (six months if termination of employment is
governed by Paragraph 9a), then the person or persons to whom the Optionee's
rights under the Option shall pass by will or by the laws of descent and
distribution shall be entitled to exercise the Option to the extent his right to
exercise such Option had accrued at the date of termination of employment and
had not previously been exercised, for a period of six months from the date of
such death (but in no event shall such Option be exercisable beyond the period
specified in Paragraph 6a hereof).
10. NON-TRANSFERABILITY OF OPTIONS.
An Option granted pursuant to the Plan shall not be transferable by the
Optionee, either voluntarily or by operation of law, other than by will or the
laws of descent and distribution, and, in all events, shall be exercisable
during his lifetime only by the Optionee, and after his death, only by the
person or persons to whom the rights under such Options pass by will or by the
laws of descent and distribution as provided in Paragraph 9, all in accordance
with the provisions of the Plan.
11. STOCK ADJUSTMENTS.
a. If as a result of any reclassification, stock dividend, stock split, or
reverse stock split to holders of record on or after the effective date of the
Plan, the outstanding shares of the Common Stock are increased, decreased,
changed into, or exchanged for a different number or kind of shares, or
securities of the Company, then:
(i) The total number of shares which may be purchased upon exercise of
Options granted under the Plan shall be correspondingly adjusted by the
Company and there shall be a corresponding
4
proportionate adjustment of the purchase price per share of shares
subject to Options so that in the aggregate the purchase price shall be
the same as the aggregate purchase price of the shares subject to
Options immediately prior to any such reclassification, stock dividend,
stock split, or reverse stock split; and
(ii) The number and class of shares available under the Plan in the
aggregate shall be correspondingly adjusted by the Company.
b. Upon a reorganization, merger, or consolidation of the Company with one
or more corporations as a result of which the Company is the surviving
corporation, any Option granted pursuant to the Plan shall apply to the
securities to which a holder of shares of Common Stock would have been entitled,
with appropriate adjustments as to the number of shares and prices.
c. Upon the dissolution or liquidation of the Company, or upon a
reorganization, merger, or consolidation of the Company with one or more
corporations as a result of which the Company is not the surviving corporation,
or upon a sale of substantially all the property or more than eighty percent
(80%) of the then outstanding stock of the Company to another corporation (each
such event a "Corporate Transaction"), then the exercisability of the Options at
the time outstanding under the Plan and not then otherwise fully exercisable
shall be accelerated so that during the ten (10) business day period immediately
prior to the specified effective date for the Corporate Transaction, each such
Option shall become fully exercisable for up to the total number of shares of
Common Stock purchasable under such Option and may be exercised for all or any
portion of the shares for which the Option is so accelerated, provided, however,
that the exercise of any accelerated Option shall remain subject to the
limitations of Paragraph 3. Upon the consummation of the Corporate Transaction,
all outstanding Options under the Plan shall, to the extent not previously
exercised or assumed by the successor corporation or its parent company,
terminate and cease to be exercisable.
d. Adjustments under this Paragraph 11 shall be made by the Board of
Directors of the Company whose determination as to what adjustments shall be
made, and the extent thereof, shall be final, binding, and conclusive; provided,
however, that no adjustment shall be made in a manner so as to constitute a
modification of the Plan as that term is defined in Section 424 of the Code. No
fractional shares of Common Stock or units of other securities shall be issued
pursuant to any such adjustment, and any fractions resulting from any such
adjustment shall be eliminated in each case by rounding downward to the nearest
whole share or unit.
12. AMENDMENT AND TERMINATION OF PLAN.
a. The Board of Directors of the Company may at any time suspend or
terminate the Plan. The Board may also at any time amend or revise the terms of
the Plan or any Option granted under the Plan, provided that no such amendment
or revision shall:
(i) increase the maximum number of shares in the aggregate which may be sold
pursuant to the Options granted under the Plan (except as permitted
under the provisions of Paragraph 11 hereof);
(ii) change the minimum purchase price set forth in Paragraph 4 hereof
(except as permitted under the provisions of Paragraph 11 hereof);
(iii) increase the maximum period of Options provided for in Paragraph 6a
hereof; or
(iv) permit the granting of Options to anyone other than as provided in
Paragraph 3 hereof.
5
b. No amendment, suspension, or termination of the Plan shall:
(i) result in the disqualification of any Incentive Option granted pursuant
to the Plan as an incentive stock option under Section 422 of the Code;
or
(ii) subject to Paragraph llc hereof, without the consent of the Optionee,
alter or impair any rights or obligations under any Option granted
under the Plan.
13. FEES AND EXPENSES.
The Company will pay any and all fees and expenses necessarily incurred by
the Company in connection with the administration of the Plan.
14. ADOPTION AND EFFECTIVENESS OF PLAN.
The Plan has been adopted by resolution of the Company's Board of Directors
on February 21, 1997, and shall be effective as of such date or a subsequent
date set forth in such resolution, subject to approval by the holders of a
majority of the outstanding shares of Common Stock of the Company as set forth
in Paragraph 6a(ii). Prior to such shareholder approval, Options may be granted
under the Plan, but any such Option by its terms shall not be exercisable prior
to such approval. If the Plan is not approved by the shareholders of the
Company, the Plan shall terminate, and all Options granted under the Plan shall
terminate and become null and void.
15. NO OBLIGATION TO EXERCISE OPTION.
The granting of an Option shall impose no obligation on the Optionee to
exercise such Option.
IN WITNESS WHEREOF, the Company has caused the Plan to be duly executed by
its officers as of the day of February 1997.
SEAL
Attest: BDM INTERNATIONAL, INC.
- -------------------------------------------- --------------------------------------------
John F. McCabe Philip A. Odeen
Corporate Vice President, President and Chief Executive Officer
Secretary, and General Counsel
6
/X/ Please mark your
votes as in this
example
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted FOR election of
directors and FOR proposals 2, 3 and 4.
The Board of Directors recommends a vote FOR election of directors and
FOR proposals 2, 3 and 4.
FOR WITHHELD
1. Election of Director's / / / /
(see reverse)
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approval of 1997 Stock / / / / / /
Option Plan
FOR AGAINST ABSTAIN
3. Approval of increase in / / / / / /
number of authorized shares
of the Company
FOR AGAINST ABSTAIN
4. Approval of Appointment of / / / / / /
Independent Accountants
SIGNATURE(S) DATE
---------------------------------------- -------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
The signer hereby revokes all proxies heretofore given by the signer to vote
at said meeting or any adjournments thereof.
DIRECTIONS TO BDM INTERNATIONAL, INC. FROM:
AIRPORTS:
Dulles International Airport
Dulles Toll Road East to Exit 8 (Spring Hill Road). After toll, right on
Spring Hill Road. Left at first light onto Jones Branch Drive; Fairfax
Building is one-half mile on the left.
National Airport
George Washington Parkway (9 miles) to McLean Exit onto Route 123 South,
continue towards Tysons Corner (5.5 miles). Right at light next to Tysons
Corner Center onto Tysons Boulevard. Right onto Galleria Drive. Right onto
Jones Branch Drive; Fairfax Building is one mile on the right.
MARYLAND POINTS NORTH:
Beltway
I-495 to Exit 11B (Route 123 South-Tysons Corner). Right at first light onto
Tysons Boulevard. Right onto Galleria Drive. Right onto Jones Branch Drive;
Fairfax Building is one mile on the right.
VIRGINIA:
McLean
Route 123 South. Right at light next to Tysons Corner Center onto Tysons
Boulevard. Right onto Galleria Drive. Right onto Jones Branch Drive; Fairfax
Building is one mile on the right.
Fairfax and Vienna
Route 123 North. Left at light next to Tysons Corner Center onto Tysons
Boulevard. Right onto Galleria Drive. Right onto Jones Branch Drive; Fairfax
Building is one mile on right.
Richmond and Points South
I-95 North to I-495 North to Exit 11B (Route 123 South-Tysons Corner). Right
at first light onto Tysons Boulevard. Right onto Galleria Drive. Right onto
Jones Branch Drive; Fairfax Building is one mile on the right.
WASHINGTON, DC:
Downtown
I-66 West to Exit 67 (Dulles Airport) to Exit 10A (Tysons
Corner-Route 123 South). Right at light next to Tysons Corner Center onto
Tysons Boulevard. Right onto Galleria Drive. Right onto Jones Branch Drive;
Fairfax Building is one mile on the right.
BDM Proxy Solicited on Behalf of the Board of Directors of the Company
for the Annual Meeting of Shareholders to be held on Friday,
May 9, 1997
PROXY
The undersigned hereby constitutes and appoints Philip A. Odeen and John F.
McCabe, and each of them, his or her true and lawful agents and proxies with
full powers of substitution in each, to represent the undersigned at the
Annual Meeting of Shareholders of BDM INTERNATIONAL, INC. to be held at the
headquarters of the Company, 1501 BDM Way, McLean, Virginia, on Friday, May
9, 1997, at 10:00 a.m., and at any adjournments thereof, on all matters
coming before said meeting.
Election of Directors, Nominees:
Dr. Jeanette Grasselli Brown Walther Leisler Kiep
Frank C. Carlucci Philip A. Odeen
William E. Conway, Jr. Thomas G. Ricks
Phillip R. Cox Dr. William E. Sweeney, Jr.
Neil Goldschmidt Earle C. Williams
You are encouraged to specify your choices by marking the appropriate boxes,
SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The Proxies named
above cannot vote your shares unless you sign and return this card.