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SECURITIES EXCHANGE ACT OF 1934
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BDM INTERNATIONAL, INC.
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BDM
BDM INTERNATIONAL, INC.
1501 BDM WAY
McLEAN, VA 22102-3204
(703) 848-5000
June 28, 1995
Dear Shareholder:
On behalf of the Board of Directors and management of BDM International,
Inc., I am pleased to inform you that shareholders holding a majority of the
Company's outstanding Common Stock have taken action adopting the 1995 Employee
Stock Purchase Plan ("Plan"), such action to be effective 20 days following the
mailing of this Information Statement. The purpose of the Plan is to provide an
incentive for employees to remain in the employ of the Company and to devote
their best efforts to its success by affording employees an opportunity to
acquire the Company's Common Stock in a convenient and advantageous manner and
to maintain a continuing interest in the Company.
The Plan is described more fully in this Information Statement, but briefly,
the Plan permits the granting of rights to eligible employees to purchase a
maximum of 750,000 shares of Common Stock. The purchase price will be equal to
the lower of 85% of the fair market value of the Common Stock on the offering
date or 85% of the fair market value of the Common Stock at the end of each
month during the purchase period. The purchase price will be paid through
payroll deduction.
BDM is pleased to offer this new plan, and believes that employee ownership
of the Company is in both the employees' and shareholders' interest.
Sincerely,
PHILIP A. ODEEN
President
BDM INTERNATIONAL, INC.
1501 BDM WAY
MCLEAN, VIRGINIA 22102
June 28, 1995
INFORMATION STATEMENT
This Information Statement is furnished in connection with the adoption by
the Board of Directors of BDM International, Inc. (the "Company") of the 1995
Employee Stock Purchase Plan. The 1994 Annual Report to Shareholders, including
financial statements for the year, was mailed to shareholders on or about April
24, 1995.
VOTING SECURITIES
Shareholders of record at the close of business on June 14, 1995, are
entitled to notice of action taken by written consent of shareholders holding a
majority of the outstanding stock, adopting the 1995 Plan, such action to be
effective 20 days following the mailing of this information statement. The
voting securities of the Company consist of its Common Stock (which has a par
value of $.01 per share), of which 9,200,129 shares were outstanding on June 14,
1995.
VOTE REQUIRED FOR APPROVAL
Shareholders of record at the close of business on June 14, 1995, are
entitled to express consent in accordance with Delaware Corporation Law. For
your information, shareholders comprising holders of a majority of the
outstanding Common Stock have signed and delivered consents to the adoption of
the 1995 Plan. WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO
SEND US A PROXY.
1995 EMPLOYEE STOCK PURCHASE PLAN
The Company intends to adopt, subject to obtaining all necessary approvals,
the 1995 Employee Stock Purchase Plan (the "1995 Plan"). The purpose of the Plan
is to provide an incentive for employees to remain in the employ of the Company
and to devote their best efforts to its success by affording such employees an
opportunity to acquire the Company's Common Stock in a convenient and
advantageous manner and to maintain a continuing interest in the Company.
The 1995 Plan permits the granting of rights to purchase a maximum of
750,000 shares of Common Stock, subject to adjustments. The 1995 Plan authorizes
the Company and such of its subsidiaries as the Board of Directors may designate
to offer employees the right to purchase, through payroll deductions, shares of
Common Stock in monthly intervals at a purchase price equal to the lower of 85%
of the fair market value of the Common Stock on the offering date or 85% of the
fair market value of the Common Stock at the end of each month during the
purchase period. Fair market value means the average of the highest and lowest
selling prices of Common Stock as reported by a national securities exchange on
which the shares of the Common Stock are traded on such date, including the
Nasdaq National Market, or, if there were no sales of Common Stock on that date,
then on the next preceding date on which there were sales.
The offer period shall be a period of twelve months from the effective date
of the 1995 Plan. All employees of BDM International, Inc. and its domestic
subsidiaries, approximately 4,300 people, are eligible to participate. Employees
may participate in the 1995 Plan by authorizing the Company to make payroll
deductions in any whole dollar amount not less than $20 per month nor more than
$1,250 per month. An employee may not purchase in any calendar year shares of
Common Stock which exceed
$15,000 of fair market value of such stock (determined at the time the employee
elects to participate). Shares will be held in separate accounts for the benefit
of participants.
The Plan will be administered by the Vice President, Human Resources of the
Company. A participant will not have any rights as a shareholder until the
shares purchased have been registered on the Company's transfer books. An
employee's rights under the Plan are not transferable. The Board of Directors
may terminate the Plan at any time, and in any case, the Plan shall terminate no
later than June 30, 2000.
The Plan shall become effective upon approval by the Executive Committee of
the Board of Directors and the approval of the 1995 Plan by a majority of the
outstanding shares of Common Stock. The 1995 Plan was approved by the Executive
Committee of the Board on June 14, 1995. In addition, written consents to the
approval and adoption of the 1995 Plan, effective 20 days from the date this
Information Statement is first mailed to holders of Common Stock, have been
received by the Company from the holders of a majority of the shares of Common
Stock outstanding on the record date. Accordingly, adoption of the 1995 Plan,
effective upon such twentieth day, has been assured.
STOCKHOLDERS AGREEMENT
A Stockholders Agreement is currently in effect among members of an investor
group and certain members of the Company's senior management. Upon consummation
of the initial public offering presently contemplated by the Company, the
Stockholders Agreement will terminate.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth beneficial ownership of the Company's Common
Stock at May 31, 1995 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
2
with respect thereto. Unless otherwise indicated, the address of each person is
the Company's principal executive office.
SHARES OF
COMMON STOCK
OWNED PRIOR TO PERCENTAGE OF
OFFERINGS(1) COMMON STOCK
DIRECTORS, OFFICERS AND -------------------------- OWNED FOLLOWING
FIVE PERCENT STOCKHOLDERS NUMBER PERCENTAGE(2) OFFERINGS(1)(2)
- ------------------------------------------------------ --------- ------------- ---------------
The Carlyle Group L.P.(3)............................. 5,750,000 63.3% 49.7%
The Board of Regents of the University of Texas
System(4)........................................... 1,000,000 10.9 8.6
c/o The University of Texas System
210 West 6th Street
Austin, TX 78701
Dr. William E. Sweeney, Jr.(5)........................ 174,002 1.9 1.5
Philip A. Odeen(6).................................... 144,215 1.6 1.2
Earle C. Williams..................................... 100,000 1.1 *
William E. Conway, Jr................................. 61,715 * *
John A. Corsiglia(7).................................. 40,001 * *
Frank C. Carlucci(8).................................. 36,049 * *
Roy V. Woodle(9)...................................... 20,144 * *
James A. D. Geier..................................... 9,882 * *
Neil Goldschmidt...................................... 5,318 * *
John M. Slosar(10).................................... 4,374 * *
C. Thomas Faulders, III............................... 3,750 * *
Helmut Sonnenfeldt.................................... 2,000 * *
Dr. Hans Mark......................................... 1,623 * *
Dr. Jeanette Grasselli Brown.......................... 277 * *
Walther Leisler Kiep.................................. 0 * *
Thomas G. Ricks....................................... 0 * *
All Directors and Executive Officers as a group (total
16 persons)......................................... 603,350 6.6 5.2
- ------------
* 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) Percentages are calculated based on the number of shares of Common Stock
outstanding as of May 31, 1995 and options exercisable within 60 days of
such date and do not include 400,000 shares of Class B Common Stock
outstanding as of such date.
(3) Includes 4,875,000 shares of Common Stock held by The Carlyle Partners
Leveraged Capital Fund I, L.P. (The Carlyle Fund), 750,000 shares of Common
Stock held by BDM Acquisition Partners II, L.P. (BDM Acquisition II) and
125,000 shares of Common Stock held by BDM Acquisition Partners, L.P. (BDM
Partners). Carlyle is the sole General Partner of The Carlyle Fund, BDM
Acquisition II and BDM Partners. TWC Corporation 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.
(4) Includes 218,750 shares held by The Permanent University Fund of the State
of Texas; 31,250 shares held by The Board of Regents of The University of
Texas System, as trustee of The University of Texas System Common Trust
Fund and 750,000 shares held by BDM Acquisition II, a Delaware limited
partnership, the sole limited partner of which is The Permanent University
Fund of the State of Texas and The Board of Regents of the University of
Texas System, as trustee of The University of Texas System Common Trust
Fund.
(Footnotes continued on following page)
3
(Footnotes continued from preceding page)
(5) Includes 156,000 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 18,002 shares of Common Stock
granted under the 1990 Plan.
(6) Includes 5,000 shares held by The Philip and Marjorie Odeen Charitable
Remainder Unitrust, of which Mr. Odeen is the sole trustee. Also includes
options to purchase 25,784 shares of Common Stock granted under the 1990
Plan which are currently exercisable.
(7) Includes options to purchase 10,001 shares of Common Stock granted under
the 1990 Plan which are currently exercisable.
(8) Voting power for 36,049 of these shares is shared with Mr. Carlucci's wife.
(9) Includes options to purchase 14,667 shares of Common Stock granted under
the 1990 Plan which are currently exercisable.
(10) Voting power for 4,374 of these shares is shared with Mr. Slosar's wife.
By virtue of their ownership of securities of the Company, The Carlyle Fund,
BDM Acquisition II and BDM Partners, three limited partnerships controlled by
Carlyle had in the aggregate 63.3% of the Company's voting power as of the
record date. Upon completion of the contemplated initial public offering, such
persons will have, in the aggregate, approximately 50% of the Company's voting
power. Consequently, such persons may be considered in control of the Company.
Such persons will, in most circumstances, subject to Delaware law, be able to
control the approval of mergers, sales of assets, a dissolution and liquidation
of the Company and other similar corporate transactions on terms acceptable to
them.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table contains information on compensation for the years ended
December 31, 1994, 1993, and 1992 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
NAME AND OTHER ANNUAL STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(2) COMPENSATION(3) AWARDS(4) OPTIONS(5) COMPENSATION(6)
- ------------------------------- ---- -------- -------- --------------- --------- ---------- ---------------
Philip A. Odeen(1)............. 1994 $400,000 $175,000 $ -0- $ -0- 10,000 $66,033
President and Chief Executive 1993 400,000 175,000 -0- -0- 10,000 65,972
Officer 1992 263,636 200,000 -0- 524,000 25,000 6,498
John A. Corsiglia(1)........... 1994 300,019 30,000 -0- -0- 10,000 7,106
President, BDM Technologies 1993 230,784 75,000 87,543 131,000 10,000 4,719
1992 N/A N/A N/A N/A N/A N/A
Dr. William E. Sweeney......... 1994 241,258 145,000 116,551 -0- 10,000 7,040
General Manager, IABG 1993 215,747 125,000 46,084 -0- 5,000 6,999
1992 177,152 125,000 31,991 -0- -0- 6,955
Roy V. Woodle(1)............... 1994 250,000 106,000 -0- -0- 5,000 60,834
President and Chief Executive 1993 212,083 111,253 -0- -0- 12,000 68,657
Officer, Vinnell 1992 N/A N/A N/A N/A N/A N/A
Michael J. Mruz(1)............. 1994 143,662 -0- -0- -0- 10,000 5,027
Former Executive Vice 1993 211,506 125,000 -0- -0- 5,000 6,999
President; Chief Financial and 1992 177,151 125,000 -0- -0- -0- 6,955
Administrative Officer
(Footnotes on following page)
4
(Footnotes for preceding page)
- ------------
(1) Mr. Odeen joined the Company in May 1992. The bonus award shown for Mr.
Odeen in 1992 includes a $75,000 bonus paid in connection with his
employment with the Company, effective May 1, 1992. Mr. Woodle became an
executive officer of the Company upon his promotion to President of Vinnell
in June 1993. Mr. Corsiglia joined BDM Technologies in February 1993. Mr.
Mruz resigned from the Company in August 1994.
(2) Bonus awards are reflected in the year to which they are attributable and
not the year in which they are actually paid. The Company awarded cash
bonuses and incentive compensation in the form of cash or shares of Common
Stock to certain employees under a Cash and Stock Incentive Compensation
Plan which was discontinued in 1992. In 1993, the Company adopted the 1993
Executive Incentive Program (the "Executive Incentive Program"). Individual
bonuses under the Executive Incentive Program are determined based on an
assessment of the performance of the individual and the Company, with
ultimate approval residing with the President, except for Mr. Odeen's bonus
which is determined by the Compensation Committee.
(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 amount shown
for Mr. Corsiglia reflects primarily reimbursement of relocation expenses.
The amounts shown for Dr. Sweeney reflects reimbursement of relocation
expenses, and for 1994, also reflects a 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 MIS Program under which
certain members of management were granted options to purchase Common Stock
at an exercise price of $.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 an appraised value on the date of grant, less the $.01
per share exercise price, regardless of whether the shares were actually
purchased. At December 31, 1994, Messrs. Odeen and Corsiglia, Dr. Sweeney
and Mr. Woodle held 100,000, 25,000, 87,500, and 5,000 shares of restricted
Common Stock, respectively, worth $1,399,000, $349,750, $1,224,125, and
$69,950, respectively. The value of the Common Stock ownership at year-end
is based on a value per share determined by the Board of Directors, less the
$.01 per share exercise price paid by the named executive officer upon
purchase thereof.
(5) The options listed for Mr. Odeen represent shares of Common Stock issuable
upon exercise of options granted under the 1990 Plan, of which 8,334 shares,
3,334 shares, 8,333 shares and 5,783 shares vested in December 1993, March
1994, December 1994 and March 1995, respectively. An additional 8,333
shares, 7,533 shares and 3,350 shares will vest in December 1995, March 1996
and March 1997. The options listed for Mr. Corsiglia represent shares of
Common Stock issuable upon exercise of options granted under the 1990 Plan,
of which 3,334 shares, 3,333 shares and 3,334 shares vested in February
1994, February 1995 and March 1995, respectively, and an additional 3,333
shares will vest in each of February 1996, March 1996 and March 1997. The
options for Dr. Sweeney represent shares of Common Stock issuable upon
exercise of options granted under the 1990 Plan, of which 5,667 shares,
1,667 shares, 5,667 shares and 5,001 shares vested in December 1993, March
1994, December 1994 and March 1995, respectively, and an additional 5,666
shares, 4,999 shares and 3,333 shares will vest December 1995, March 1996
and March 1997, respectively. 2,500 shares, 5,667 shares and 1,666 shares
will vest in November 1995, March 1996 and March 1997, respectively.
(6) Amounts shown for 1994 include the dollar value of the life insurance
premiums paid on behalf of Messrs. Odeen and Corsiglia, Dr. Sweeney and
Messrs. Woodle and Mruz for the last fiscal year,
which amounts are $6,500, $5,980, $5,500, $4,128 and $3,667, respectively.
Amounts shown for 1994 also include $2,310, $1,126, $1,540, $1,164 and
$1,360 of employer matched salary deferral contributions to the 401(k) Plus
Plan for Messrs. Odeen and Corsiglia, Dr. Sweeney and Messrs. Woodle and
Mruz, respectively. The amount shown for 1994 for Mr. Woodle includes a
contribution of $11,542 on his behalf to the Vinnell Corporation Retirement
Plan (the "Vinnell Plan"), a defined contribution money purchase plan. The
amounts shown for 1994 for Messrs. Odeen and
(Footnotes on following page)
5
(Footnotes for preceding page)
Woodle also include a contribution of $57,223 and $44,000, respectively, to
a defined contribution supplemental executive retirement plan ("SERP") on
their behalf.
The following table sets forth information regarding grants of stock options
by the Company during the fiscal year ended December 31, 1994 to the Named
Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL
REALIZED
INDIVIDUAL GRANTS VALUE AT ASSUMED
---------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------
NAME GRANTED(1) FISCAL YEAR ($/SH) DATE 5% 10%
- --------------------------------------- ---------- ------------ ----------- ---------- ------- -------
Philip A. Odeen........................ 10,000 2% $ 12.00 3/7/04 $32,591 $51,916
John A. Corsiglia...................... 10,000 2 $ 12.00 3/7/04 32,591 51,916
Dr. William E. Sweeney................. 10,000 2 $ 12.00 3/7/04 32,591 51,916
Roy V. Woodle.......................... 5,000 1 $ 12.00 3/7/04 16,295 25,958
Michael J. Mruz........................ 10,000 2 $ 12.00 3/7/04 32,591 51,916
- ------------
(1) All of the above options granted in 1994 were granted under the 1990 Plan.
All of these options vest and become exercisable at the rate of 33 1/3% per
year over the course of 3 years from the date of grant.
In March 1995, the Company granted options to purchase an aggregate of
30,000 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, 1994 by the Named Executive Officers:
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FY-END AT FY-END
ACQUIRED IN VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(3) UNEXERCISABLE EXERCISABLE UNEXERCISABLE EXERCISABLE
- ------------------------------- ----------- ----------- ------------- ----------- ------------- -----------
Philip A. Odeen................ -- (1) $ -- 24,999 20,001 $ 132,910 $ 165,840
John A. Corsiglia.............. -- (1) -- 16,666 3,334 78,327 29,173
Dr. William E. Sweeney......... -- (1) -- 18,999 13,001 89,575 109,175
-- (2) -- 12,500 -- 174,875 --
----------- ----------- ------------- ----------- ------------- -----------
31,499 13,001 264,450 109,175
Roy V. Woodle.................. -- (1) -- 15,500 9,000 79,875 67,750
2,500(2) 34,975 2,500 -- 34,975 --
----------- ----------- ------------- ----------- ------------- -----------
2,500 34,975 18,000 9,000 114,850 67,750
Michael J. Mruz................ 14,001(1) 117,925 -- -- -- --
- ------------
(1) Option activity and/or status of options granted under the 1990 Plan.
(2) Option activity and/or status of options granted under the MIS Program.
(3) Because there has been no established public trading market for the Common
Stock, the Common Stock has been valued annually by an independent
consulting firm based on a number of factors including, among others, (i)
the nature of the business and history of the Company, the character and
form of the Company's business and the nature of growth opportunities, (ii)
the economic outlook in general and the condition and outlook for the
specific industry in which the Company
(Footnotes continued on following page)
6
(Footnotes continued from preceding page)
competes, (iii) the trend of earnings and cash flow, as recognized and
adjusted by the Company, and future prospects for earnings and cash flow
growth, (iv) the financial history of the Company as reflected in the
balance sheets and operating statements over recent years, (v) the market
history of securities and other companies in the same or similar industry,
with attention given to various financial ratios of such companies and (vi)
sales of the Company's stock. The values disclosed in this table are
reflective of this valuation and a determination as to the value of the
Common Stock by the Board of Directors. The Company expects a public trading
market for its Common Stock to commence upon the completion of a public
offering in late June or early July, 1995.
EMPLOYMENT AGREEMENTS
Philip A. Odeen became President and Chief Executive Officer of the Company
on May 1, 1992. Pursuant to a letter agreement, dated March 4, 1992, Mr. Odeen
is paid a base salary of $400,000. Should Mr. Odeen's employment with the
Company be terminated prior to December 31, 1995, he will receive a separation
allowance of 24 months' salary.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
For fiscal years 1991 through 1994, the Compensation Committee of the Board
of Directors made all determinations with respect to executive officer
compensation. Messrs. Carlucci, Conway and Slosar, each a Director of the
Company, served as members of the Compensation Committee in 1994. The Company is
not aware of any Compensation Committee interlocks.
Messrs. Carlucci and Conway are Chairman and Vice Chairman of the Company,
respectively, stockholders 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 Acquisition II, stockholders 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 will pay 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, although no definitive
agreement has been executed, it is currently anticipated that Carlyle will serve
as a financial advisor to the Company in connection with any acquisition,
corporate reorganization, financing, stock offering or similar transaction by
the Company, and will receive fees commensurate with its services in connection
with any such transaction. The Company paid Carlyle approximately $505,000,
$535,000 and $512,000 for the provision of these services for the years ended
December 31, 1994, 1993, and 1992, respectively. In addition, in connection with
the acquisition of Vinnell in 1992, Carlyle received from the Company an
investment banking/advisory fee of $250,000, plus expenses.
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. All employees of BDM Federal, Inc. and BDM
Technologies, Inc. who complete a specified number of hours of employment in a
plan year are eligible to participate in 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 (rounded to the nearest $600) plus 1.82% of annual compensation in
excess of the
7
35-year average of the social security-covered compensation (rounded to the
nearest $600), and (b) 1.33% 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
Supplemental Executive Retirement Plan ("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 Dr. Sweeney and Mr.
Corsiglia 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.
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, 1994, 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, 1994 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 ESTIMATED ANNUAL
CURRENT YEARS OF BDM RETIREMENT PLAN BENEFIT UNDER
CURRENT BENEFIT ACCRUAL AT NORMAL THE
NAME AGE(1) SERVICE RETIREMENT(3) SERP(3)
- ----------------------------------- ------- ---------------- ------------------- ----------------
Philip A. Odeen.................... 59 3 $27,700 $ 62,300
John A. Corsiglia.................. 45 2 43,158 60,846
Dr. William E. Sweeney............. 56 18 60,295 94,045
Roy F. Woodle(2)................... 59 -- -- 47,464
Michael J. Mruz.................... 49 20 51,463 --
- ------------
(1) As of December 31, 1994.
(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 Mr. Corsiglia, Dr. Sweeney, and Mr. Mruz are calculated
based on retirement at age 60.
DIRECTORS COMPENSATION
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 In 1994, Mr. Goldschmidt received
consulting fees in the amount of $50,000 for services performed in connection
with marketing BDM's services and Mr. Slosar received consulting fees of $2,000
in connection with services performed in connection with human resources
initiatives.
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