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
(X) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to section 240.14a-11(c) or section
240.14a-12
Computer Data Systems, Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii),14a-6(i), or 14a-6(j)(2).
( ) $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
( ) 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:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4) Proposed maximum aggregate value of transaction:
( ) 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.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS, OCTOBER 24, 1995
The Annual Meeting of Stockholders of Computer Data Systems, Inc. ("CDSI")
will be held at the Company's headquarters located at One Curie Court,
Rockville, Maryland, on October 24, 1995 at 10:00 a.m., for the following
purposes:
1. To elect a Board of Directors comprised of eight persons to serve until
the next Annual Meeting and until their successors are duly elected and
qualified;
2. To consider approval of the appointment of Ernst & Young LLP as
independent auditors for the fiscal year ending June 30, 1996; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Only holders of shares of Common Stock of record on the books of the
Company at the close of business on September 1, 1995 will be entitled to notice
of and to vote at the Annual Meeting or any adjournment thereof.
You are cordially invited to be present at the Annual Meeting. IF YOU
CANNOT ATTEND, PLEASE EXECUTE AND MAIL PROMPTLY THE ENCLOSED FORM OF PROXY,
USING THE ENCLOSED RETURN ENVELOPE.
By Order of the Board of Directors,
Donald E. Ziegler
Secretary
One Curie Court
Rockville, Maryland 20850
September 18, 1995
<PAGE>
COMPUTER DATA SYSTEMS, INC.
ONE CURIE COURT
ROCKVILLE, MARYLAND 20850
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 24, 1995
INFORMATION CONCERNING SOLICITATION AND VOTING
General
-------
The following information is submitted concerning the enclosed form of
proxy and the matters to be acted upon under authority thereof at the Annual
Meeting of Stockholders of the Company to be held on the 24th day of October
1995, commencing at 10:00 a.m., or at any adjournment thereof, pursuant to the
accompanying notice of said meeting. The Annual Meeting will be held at the
Company's headquarters located at One Curie Court, Rockville, Maryland 20850.
The Company intends to mail this proxy statement and accompanying proxy to all
stockholders entitled to vote at the Annual Meeting on or about September 18,
1995.
Solicitation and Revocability of Proxies
----------------------------------------
The proxy is solicited on behalf of the Board of Directors of the Company.
It may be revoked by the stockholder at any time prior to the exercise thereof
by filing with the Secretary of the Company a written revocation or a duly
executed proxy bearing a later date. The proxy shall be suspended if the
stockholder shall be present at the meeting and elect to vote in person.
Attendance at the meeting will not, by itself, revoke a proxy. Shares
represented by proxies received will be voted. Where the stockholder has
specified his choice with respect to the proposal to be acted upon, the shares
will be voted in accordance with the specification so made, and in the absence
thereof will be voted by the proxy holders as directed by management.
The cost of solicitation of proxies will be borne by the Company. In
addition to solicitation by mail, certain directors, officers and regular
employees of the Company may solicit proxies by facsimile, telephone or personal
interview for which they will receive no additional compensation. In addition,
arrangements will be made with brokerage firms and other custodians, nominees
and fiduciaries to forward solicitation material for the meeting to beneficial
owners, and the Company will reimburse them for their reasonable expenses in so
doing.
Voting Rights and Outstanding Shares
------------------------------------
Only stockholders of record on the books of the Company at the close of
business on September 1, 1995, will be entitled to notice of and to vote at the
Annual Meeting. As of that date, there were 5,737,842 shares of Common Stock
issued and outstanding and entitled to vote. Each share of Common Stock is
entitled to one vote for each matter submitted to the stockholders for approval.
<PAGE>
A majority of the outstanding shares entitled to vote must be present in
person or represented by proxy at the Annual Meeting to constitute a quorum.
Shares represented by properly executed proxies with respect to which a vote is
withheld, an abstention is indicated, or a broker does not vote ("broker
nonvotes") will be treated as shares that are present and entitled to vote for
purposes of determining a quorum, but those shares will not be treated as having
been voted for purposes of determining the approval of any matter submitted to
the stockholders for a vote. Unless otherwise noted in this proxy statement,
all matters to come before the meeting identified in the accompanying notice
require the affirmative vote of a majority of those shares, present in person or
by proxy and voting at the Annual Meeting, to be adopted, assuming that a quorum
is present.
INFORMATION WITH RESPECT TO CERTAIN STOCKHOLDERS
The stockholders named in the following table are those known to the
Company to be the beneficial owners of 5% or more of the Company's Common
Stock. Unless otherwise indicated, the information is as of July 24, 1995.
For purposes of this table, and as used elsewhere in this Proxy Statement,
the term "beneficial owner" means any person who, directly or indirectly, has
or shares the power to vote, or to direct the voting of a security or the
power to dispose, or to direct the disposition of, a security. Except as
otherwise indicated, the Company believes that each individual owner listed
below exercises sole voting and dispositive power over their shares.
PERCENTAGE OF
AMOUNT OF BENEFICIAL OUTSTANDING
NAME AND ADDRESS OWNERSHIP (SHARES) COMMON STOCK
---------------- -------------------- -------------
FMR Corporation 539,200 (1) 9.39%
82 Devonshire Street
Boston, Massachusetts 02109
Calvin S. Koonce 445,106 (2) 7.76%
6229 Executive Boulevard
Rockville, Maryland 20852
Clifford M. Kendall 353,934 (3) 6.16%
One Curie Court
Rockville, Maryland 20850
Dimensional Fund Advisors, Inc. 288,100 (4) 5.02%
1229 Ocean Avenue, Suite 650
Santa Monica, California 90401
__________________________________
(1) As reported on Schedule 13G, dated February 13, 1995. Includes sole
dispositive power over 539,200 shares. FMR Corp. beneficially owns the
shares through its wholly-owned subsidiary, Fidelity Management and
Research Company ("Fidelity"), an investment adviser to several investment
companies registered under the Investment Company Act of 1940 that own
shares of CDSI (the "Fidelity Funds"). The Board of Trustees of the
Fidelity Funds has the authority to vote or direct the voting of the
shares under written guidelines established by the Board of Trustees of
the Fidelity Funds. FMR Corp. through control of Fidelity, and each of
the Fidelity Funds has sole power to dispose of shares held by the Funds.
Mr. Edward C. Johnson, Chairman of FMR Corp., reported in the statement on
Schedule 13G sole dispositive power with respect to the shares owned by
FMR Corp.
<PAGE>
(2) As reported on Schedule 13D, dated April 27, 1992. Number of shares
adjusted to reflect the August 1993, 2-for-1 stock split effected in the
form of a dividend.
(3) Includes 125,744 shares held by Mr. Kendall's spouse and 12,300 shares
subject to acquisition by the exercise of options exercisable within 60
days.
(4) As reported on Schedule 13G, dated January 30, 1995. Includes sole voting
and dispositive power over 179,400 and 288,100 shares, respectively.
ITEM 1: ELECTION OF DIRECTORS
Nominees for Election
---------------------
Eight directors, comprising the entire membership of the Board of
Directors of the Company, are to be elected at the Annual Meeting. If elected,
the directors will serve until the next Annual Meeting and until their
successors are duly elected and qualified.
Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the eight nominees shown below. Although it is not
contemplated that any nominee will decline or be unable to serve as a director,
in either such event, the proxies will be voted by the proxy holders for such
other person as may be designated by the present Board of Directors.
Each nominee for election is currently serving as a member of the Board
and has previously been elected by the stockholders. The names of the nominees
and certain information about them are set forth below. Except as indicated,
the principal occupation for the past five years of each nominee is as listed
below.
<TABLE>
<CAPTION>
PRINCIPAL
NAME OCCUPATION ADDITIONAL INFORMATION
---- ---------- ----------------------
<S> <C> <C>
DR. RAYMOND B. HOXENG Retired Prior to his retirement in 1982,
Director since 1968 Tampa, FL Dr. Hoxeng was involved in university
Age 76 and hospital administration. His
earlier career was distinguished by
accomplishments in industrial
engineering and research.
CLIFFORD M. KENDALL Chairman of From 1970 to 1991, Mr. Kendall
Director since 1970 the Board served as Chief Executive Officer
Age 64 of the Company of the Company.
Member-Executive Committee
HILLIARD W. PAIGE Retired Mr. Paige is a former President of
Director since 1974 Washington, DC General Dynamics Corporation.
Age 75 Mr. Paige serves as a Director of The Member-
Executive, Atlantic Council of the United States,
Audit/Compensation Committees Washington, D.C.
<PAGE>
ELMER B. STAATS Retired Mr. Staats is a former Comptroller
Director since 1981 Washington, DC General of the United States. Mr.
Age 81 Staats serves as Chairman of the
Member-Executive, Financial Accounting Standards
Audit/Compensation Committees Advisory Board, Washington, D.C.
GORDON S. GLENN President and Mr. Glenn has served as President
Director since 1988 Chief Executive and Chief Executive Officer since
Age 47 Officer July 1991. From 1988 to 1991, Mr.
Glenn served as President and Chief
Operating Officer of the Company.
WYATT D. TINSLEY Executive Mr. Tinsley serves as the Company's
Director since 1988 Vice President Chief Financial Officer.
Age 52
PAUL R. IGNATIUS Retired From 1987 to December 1993, Mr.
Director since 1991 Washington, DC Ignatius served as the Chairman of
Age 74 the Board, Logistics Management
Member-Executive, Institute, Bethesda, MD.
Audit/Compensation Committees
JAMES A. PARKER President, Mr. Parker serves as President of
Director since 1991 Jay Parker & the Lincoln Institute for Research
Age 58 Associates, & Education, Inc., a non-profit
Member-Executive, Washington, DC public policy organization in
Audit/Compensation Committees (International Washington, D.C.
Consulting Firm)
</TABLE>
Meetings and Committees of the Board
------------------------------------
The Company has standing Executive and Audit/Compensation Committees of the
Board of Directors. The Board of Directors does not have a Nominating
Committee. The Board of Directors of the Company held four meetings during the
fiscal year ended June 30, 1995. All directors attended at least 75% of the
aggregate number of meetings of the Board of Directors and Committees on which
they served. Overall attendance at such meetings was 97%.
The Executive Committee has the power and authority of the Board of
Directors and meets several times during the year in months when the Board of
Directors does not meet. Messrs. Kendall, Paige, Staats, Ignatius and Parker
serve on the Executive Committee. In the fiscal year ended June 30, 1995, the
Executive Committee met four times.
<PAGE>
The Audit/Compensation Committee makes recommendations regarding the
engagement of the Company's independent auditors, reviews the arrangement and
scope of the audit, considers comments made by the independent auditors with
respect to the adequacy of the Company's internal accounting controls, and
reviews non-audit services provided by the firm. In addition, this committee
reviews and approves (or recommends to the full Board) the annual salary, bonus
and other benefits of senior management of the Company; reviews and makes
recommendations to the Board relating to executive compensation and plans; and
establishes, and periodically reviews, the Company's policy with respect to
management perquisites. The Audit/Compensation Committee also presently serves
as the committee of disinterested persons who administer the Company's 1991
Long-Term Incentive Plan. Messrs. Paige, Staats, Ignatius and Parker serve on
the Audit/Compensation Committee. During the fiscal year ended June 30, 1995,
the Audit/Compensation Committee met four times.
Compensation of Directors
-------------------------
Directors who are employees receive no additional compensation for serving
as directors. In the fiscal year ended June 30, 1995, non-employee directors
received the following amounts for each meeting of the Board of Directors they
attended: Dr. Hoxeng received $1,600 per meeting and Messrs. Paige, Staats,
Ignatius, and Parker each received $1,000. Messrs. Paige, Staats, Ignatius, and
Parker also received a retainer of $12,000 each in the fiscal year ended June
30, 1995, for services rendered as members of the Executive and
Audit/Compensation Committees of the Board of Directors.
In July 1995, the compensation for non-employee directors was adjusted.
The fees paid to Dr. Hoxeng for attendance at Board meetings was increased to
$2,000 per meeting. The monthly retainer paid to Messrs. Paige, Staats,
Ignatius, and Parker for serving on the Executive and Audit/Compensation
Committees was increased to $1,200 per month.
Pursuant to the Company's 1991 Long-Term Incentive Plan (the "Plan"), non-
employee directors of the Company also are granted stock options upon being
named a director and thereafter on an annual basis. In the fiscal year ended
June 30, 1995, each non-employee director was granted options to purchase 1,500
shares. The options become exercisable one year after the date of grant and
expire five years from the date of grant.
EXECUTIVE COMPENSATION
Executive Officers
------------------
CLIFFORD M. KENDALL, age 64, has been with CDSI since its founding in 1968 and
is currently the Chairman of the Board of Directors. From 1970 to 1991, Mr.
Kendall served as Chief Executive Officer of the Company.
GORDON S. GLENN, age 47, has been the President and Chief Executive Officer of
the Company since July 1991. From 1988 to 1991, Mr. Glenn served as President
and Chief Operating Officer of the Company. Mr. Glenn joined CDSI in 1971.
WYATT D. TINSLEY, age 52, is currently Executive Vice President and the
Company's Chief Financial Officer. Mr. Tinsley joined CDSI in 1969.
<PAGE>
WILLIAM L. GRAY, age 49, is currently Executive Vice President of the Company's
Systems Engineering Group. Mr. Gray joined CDSI in 1982.
MARY ANN MAYHEW, age 43, is currently Executive Vice President of the Company's
Business Development Group. Ms. Mayhew joined CDSI in 1980.
THOMAS A. GREEN, age 49, is currently Executive Vice President of the Company's
Enterprise Systems Group. Mr. Green joined CDSI in 1976.
EDWARD D. JOHNSON, age 41, is currently Senior Vice President of the Company's
Professional Services Group. Mr. Johnson joined CDSI in 1981.
GORDEN E. DARNELL, age 57, is currently Senior Vice President of the Company's
Technology Systems Division. Mr. Darnell joined CDSI in 1982.
DONALD E. ZIEGLER, age 46, is currently Treasurer and Secretary of the Company.
Mr. Ziegler joined CDSI in 1982.
Report of the Audit/Compensation Committee on Executive Compensation
--------------------------------------------------------------------
The Audit/Compensation Committee of the Board of Directors, which is
composed of outside directors of the Company, is responsible for developing and
recommending to the Board of Directors the Company's general compensation
policies. The Committee approves the compensation plans for the Company's
executive officers, including the Chief Executive Officer (CEO), and determines
the compensation to be paid to the executive officers. The Audit/Compensation
Committee also is responsible for the granting of stock options to the executive
officers and the administration thereof. The Audit/Compensation Committee
has furnished the following report for fiscal year 1995:
Compensation Philosophy. The following general principles have been adopted by
the Committee and represent the guidelines upon which compensation decisions are
based. Executive compensation is designed to:
Provide a competitive total compensation package that enables the Company
to attract and retain key executives who demonstrate outstanding
performance, technical expertise, business responsibility, personal
integrity, and professionalism.
Encourage cooperation and coordination among executives to meet the
Company's long-term business objectives and strategy.
Provide variable compensation that is directly linked with the financial
performance of the Company and the achievement of increased stockholder
value.
Executive Officer Compensation. The Company's executive compensation program
consists of three main components: (i) annual base salary, (ii) annual
incentive cash bonus, and (iii) equity participation. The executive officers,
including the CEO, are eligible for the same benefits, including group health
and life insurance and participation in the Company's Employee Retirement Plan,
as are available generally to the Company's professional staff. The Company
also provides whole life "split dollar" insurance policies on the lives of the
executive officers. The Company is the beneficiary of the amount of its
premiums paid with the remaining amounts payable to the officers' estates. The
executives may elect, under certain circumstances, to convert the policy to an
annuity based on the cash value less premiums paid. No other material
perquisites are provided by the Company to any of its executive officers.
<PAGE>
The compensation policies that are administered by the Committee are
further explained below:
Base Salary - Base salaries are competitive, but not excessive, assuring the
Company the ability to attract and retain qualified officers yet maintain a
relatively low cost structure for officer salaries. Base pay levels are
reviewed annually and established through comparisons with other professional
services firms of similar size and complexity.
Annual Incentive - Executive officers participate as a team in an incentive
compensation program with awards based on the attainment of predetermined
financial targets set annually by the Committee. For fiscal 1995, the targets
were based on achieving certain Company pre-tax levels of income. The objective
is to reward executives for meeting the predetermined targets and provide
opportunities for above average earnings by attaining superior financial results
for the Company and the stockholders.
Equity Participation - Non-qualifying stock option awards are granted annually
based on performance and serve as an incentive to enhance stockholder value.
Options are issued to executive officers, (as well as other line officers and
key employees) who have substantial responsibility for the management and growth
of the Company. Options granted are evidenced by an agreement setting forth the
number of shares awarded, and such other terms and conditions as determined by
the Committee. Options vest and become exercisable in annual installments of 25
percent of the shares covered by each grant commencing on the first anniversary
of the grant date and expire in five years from the grant date. In setting the
size of grants for the CEO and other executives, the Committee considers their
position, individual performance, stock options presently held, and the total
number of shares available for the issuance under the Company's stock option
plans.
Compensation of the CEO. Gordon S. Glenn has been President and CEO since
1991. He served as President and Chief Operating Officer between 1988 and 1991.
The amount of Mr. Glenn's annual salary is established by the
Audit/Compensation Committee using the same criteria as discussed above for the
executive officers. Mr. Glenn's annual salary for fiscal year 1995 was
$208,231, which represents an increase of approximately 4% percent over his
salary for the previous year.
Mr. Glenn's annual incentive compensation payments are determined by the
Committee based entirely on targets for the Company's pre-tax income. Mr.
Glenn's cash award for fiscal year 1995 (shown in the Bonus column of the
Summary Compensation Table) was determined based on the Company's exceeding the
targets for 1995 pre-tax profits. Mr. Glenn was also awarded stock options
intended to align his future rewards with the interests of the stockholders.
The Audit/Compensation Committee
Hilliard W. Paige Paul R. Ignatius
Elmer B. Staats James A. Parker
<PAGE>
SUMMARY COMPENSATION TABLE
The following table reports the compensation paid or accrued during the
three fiscal years ended June 30, 1995, for each of the five most highly
compensated CDSI executive officers.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
YEAR OTHER SECURITIES
NAME AND ENDED ANNUAL UNDERLYING ALL OTHER
PRINCIPAL POSITION 6/30 SALARY BONUS COMPENSATION OPTIONS (#) COMPENSATION(1)
------------------ ----- ------ ----- ------------ ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
CLIFFORD M. KENDALL 1995 $148,000 $148,000 ----- 6,000 $17,242
Chairman of the Board 1994 $148,000 $148,000 ----- 8,000 $15,329
1993 $148,000 $148,000 ----- 8,000 $11,101
GORDON S. GLENN 1995 $208,231 $205,000 ----- 30,000 $11,368
President and 1994 $199,615 $195,000 $40,298(2) 40,000 $13,031
Chief Executive Officer 1993 $192,515 $185,000 ----- 40,000 $ 7,419
WYATT D. TINSLEY 1995 $131,846 $130,000 ----- 6,000 $10,739
Executive 1994 $126,769 $124,000 ----- 8,000 $ 9,749
Vice President 1993 $122,930 $117,000 ----- 8,000 $ 6,456
JUDITH M. KAHN 1995 $126,846 $125,000 ----- 6,000 $10,058
Executive 1994 $121,769 $119,000 ----- 8,000 $ 9,106
Vice President(3) 1993 $117,095 $112,000 ----- 8,000 $ 5,997
WILLIAM L. GRAY 1995 $125,308 $123,000 ----- 6,000 $ 9,824
Executive 1994 $119,769 $117,000 ----- 8,000 $ 9,027
Vice President 1993 $115,840 $110,000 ----- 8,000 $ 5,992
</TABLE>
_________________________
(1) Amounts represent: (a) Company contributions to qualified and non-
qualified employee retirement plans and (b) Split Dollar Life Insurance.
The values for the two component amounts for each named executive
officer are as follows for the fiscal year ended June 30, 1995: Mr.
Kendall, (a) $10,130 and (b) $7,112; Mr. Glenn, (a) $10,224 and (b)
$1,144; Mr. Tinsley, (a) $9,376 and (b) $1,363; Ms. Kahn, (a) $9,143 and
(b) $915; and Mr. Gray (a) $9,071 and (b) $753.
(2) Amount includes the $35,000 initiation fee paid by the Company on
behalf of Mr. Glenn for membership in a local country club.
(3) Ms. Kahn resigned from her position with the Company effective July 1,
1995.
<PAGE>
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE VALUE AT
PERCENT OF ASSUMED ANNUAL RATES OF
TOTAL OPTIONS EXERCISE STOCK PRICE APPRECIATION FOR
OPTIONS GRANTED TO OR BASE OPTION TERM(4)
GRANTED EMPLOYEE IN PRICE EXPIRATION
NAME (#) FISCAL YEAR(1) ($/SHR)(2) DATE(3) 5%($) 10%($)
---- ------- -------------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Clifford M. Kendall 6,000 4.2% $14.125 07/19/99 $ 23,415 $ 51,741
Gordon S. Glenn 30,000 20.9% $14.125 07/19/99 $117,074 $258,704
Wyatt D. Tinsley 6,000 4.2% $14.125 07/19/99 $ 23,415 $ 51,741
Judith M. Kahn(5) 6,000 4.2% $14.125 07/01/95 N/A N/A
William L. Gray 6,000 4.2% $14.125 07/19/99 $ 23,415 $ 51,741
</TABLE>
______________________________
(1) Stock options exercisable into 143,400 shares of the Company's Common Stock
were granted to all employees and non-employee directors of the Company as a
group during the fiscal year ended June 30, 1995.
(2) The exercise price is the closing market price on the date of grant.
(3) Options vest and become exercisable in annual installments of 25% of shares
covered by each grant commencing on the first anniversary of the grant date,
and expire in five years from the grant date.
(4) The dollar amounts under the potential realizable values columns use the 5%
and 10% rates of appreciation permitted by the SEC, and are not intended to
forecast actual future appreciation in the stock price. Actual gains, if
any, on stock option exercises are dependent on the future performance of
the Company's Common Stock. There can be no assurance the amounts reflected
in this table will be achieved. The assumed rates are compounded annually
to the full five-year term of the options.
(5) Ms. Kahn resigned from her position with the Company effective July 1,
1995. The options granted on July 19, 1994 expired upon her resignation
from the Company pursuant to the terms of Stock Option Agreement
governing the grant.
<PAGE>
<TABLE>
<CAPTION>
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
NUMBER OF VALUE OF UNEXERCISED
OPTIONS EXERCISED IN FY 1995 UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
---------------------------- AT 6/30/95 AT 6/30/95 (2)
SHARES ---------- ----------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
---- ----------- -------------- ------------------ -------------------
<S> <C> <C> <C> <C>
Clifford M. Kendall 10,300 $ 51,044 2,000 / 18,100 $ 4,500 $ 48,806
Gordon S. Glenn 18,000 $108,000 60,000 / 90,000 $331,875 $240,625
Wyatt D. Tinsley -0- -0- 12,300 / 18,100 $ 68,419 $ 48,806
Judith M. Kahn(3) 6,100 $ 34,056 2,000 / 18,100 $ 4,500 $ 48,806
William L. Gray 9,000 $ 59,625 12,300 / 18,100 $ 68,419 $ 48,806
</TABLE>
______________________________
(1) Value is calculated based on the difference between the option price and
the closing market price of the Common Stock on the date of the exercise
multiplied by the number of shares to which the exercise relates.
(2) The closing price for the Company's Common Stock as reported by the Nasdaq
Stock Market on June 30, 1995 was $11.00. Value is calculated on the basis
of the difference between the option exercise price and $11.00, multiplied
by the number of shares of Common Stock underlying the option.
(3) Ms. Kahn resigned from her position with the Company effective July 1,
1995. Options shown as unexercisable as of June 30, 1995 expired by their
terms upon her resignation.
SECURITIES OWNERSHIP OF DIRECTORS
AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of July 28, 1995 by: (i) each
director of the Company, (ii) each executive officer named in the table above
labeled Summary Compensation Table, and (iii) all directors and executive
officers of the Company as a group. This table is based on information provided
by the Company's directors and executive officers. Unless otherwise indicated
in the footnotes below, and subject to community property laws where applicable,
each of the named persons exercises sole voting and dispositive power over his
or her shares.
<PAGE>
NAME OF AMOUNT OF PERCENTAGE
BENEFICIAL BENEFICIAL OF OUTSTANDING
OWNER OWNERSHIP COMMON STOCK
------------------ ------------ --------------
Gordon S. Glenn 150,317 (1) 2.58%
William L. Gray 38,800 (2) *
Raymond B. Hoxeng 49,500 (3) *
Paul R. Ignatius 13,500 (4) *
Judith M. Kahn 12,388 (5) *
Clifford M. Kendall 353,934 (6) 6.16%
Hilliard W. Paige 18,500 (7) *
James A. Parker 15,078 (8) *
Elmer B. Staats 30,000 (9) *
Wyatt D. Tinsley 30,592 (10) *
All directors & executive
officers as a group
(15 persons) 827,843 (11) 13.86%
____________________________
* Less than one percent
(1) Includes 97,500 shares subject to acquisition by the exercise of options
exercisable within 60 days.
(2) Includes 9,244 shares held by Mr. Gray's spouse and 19,900 shares subject
to acquisition by the exercise of options exercisable within 60 days.
(3) Includes 1,500 shares subject to acquisition by the exercise of options
exercisable within 60 days. Shares are held in two revocable trusts, one in
Dr. Hoxeng's name (26,000 shares) and one in the name of Dr. Hoxeng's spouse
(22,000 shares). Dr. Hoxeng and his spouse are co-trustees of both trusts.
(4) Includes 10,168 shares subject to acquisition by the exercise of options
exercisable within 60 days.
(5) Ms. Kahn resigned from her position with the Company effective July 1,
1995. Includes 2,000 shares subject to acquisition by the exercise of
options exercisable within 60 days.
(6) Includes 123,994 shares held by Mr. Kendall's spouse and 9,600 shares
subject to acquisition by the exercise of options exercisable within 60
days.
(7) Includes 3,500 shares subject to acquisition by the exercise of options
exercisable within 60 days.
(8) Includes 7,951 shares subject to acquisition by the exercise of options
exercisable within 60 days.
(9) Includes 7,500 shares subject to acquisition by the exercise of options
exercisable within 60 days.
(10) Includes 19,900 shares subject to acquisition by the exercise of options
exercisable within 60 days.
(11) Includes 233,419 shares subject to acquisition by the exercise of options
exercisable within 60 days.
<PAGE>
FIVE-YEAR STOCKHOLDER RETURN COMPARISON
Set forth below is a [chart] comparing the cumulative stockholder return on
the Company's Common Stock, on an indexed basis, against the cumulative total
returns of the Nasdaq Stock Market - U.S. Index and the S&P Computer Software
and Services Index for the period of the Company's last five fiscal years (June
30, 1990 = 100):
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG COMPUTER DATA SYSTEMS, INC., THE NASDAQ STOCK MARKET-US INDEX
AND THE S & P COMPUTER SOFTWARE & SERVICES INDEX
6/90 6/91 6/92 6/93 6/94 6/95
---- ---- ---- ---- ---- ----
Computer Data Systems, Inc. 100 68 90 164 243 196
Nasdaq Stock Market - U.S. 100 106 127 160 162 215
S&P Comptr Softwr & Svcs 100 87 98 145 164 255
* $100 INVESTED ON 06/30/90 IN STOCK OR INDEX - INCLUDING
REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING JUNE 30.
[The above data appears as a line graph in the version of this document
distributed to stockholders.]
ITEM 2: APPROVAL OF INDEPENDENT AUDITORS
At the Annual Meeting, the stockholders will be asked to approve the
appointment of Ernst & Young LLP as the Company's independent auditors for the
fiscal year ending June 30, 1996. The Audit/Compensation Committee has
recommended that the appointment of Ernst & Young LLP be approved by the
stockholders. Representatives of Ernst & Young LLP are expected to be present
at the Annual Meeting with the opportunity to make a statement if they desire to
do so, and such representatives are expected to be available to respond to
appropriate questions.
Approval of the selection of the independent auditors will require the
affirmative vote of holders of shares of Common Stock representing a majority of
the number of votes present in person or represented by proxy at the Annual
Meeting, provided a quorum is present.
THE BOARD OF DIRECTORS RECOMMENDS THAT ALL STOCKHOLDERS VOTE
FOR APPROVAL OF THE INDEPENDENT AUDITORS
STOCKHOLDER PROPOSALS
In order for a stockholder proposal to be considered for the 1996 Annual
Meeting of Stockholders, it must be received by the Company at its offices no
later than May 21, 1996. All such stockholder proposals should be mailed to the
Company's headquarters and addressed to the attention of Donald E. Ziegler,
Secretary. To be eligible for inclusion in next year's proxy material, such
proposals must conform to the requirements set forth in Regulation 14A under the
Securities Exchange Act of 1934, as amended. In order to be considered at an
Annual Meeting, a stockholder proposal must be presented by the proponents or
their representatives in attendance at the meeting.
<PAGE>
OTHER MATTERS
The Board of Directors does not know of any other matters to be presented
at the Annual Meeting or action to be taken thereat except those set forth in
this Proxy Statement. If, however, any other business properly comes before the
Annual Meeting, the persons named in the proxy accompanying this Proxy Statement
will have the discretionary authority to vote upon such business, as well as
matters incident to the conduct of the Annual Meeting.
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers to file reports of ownership and
changes of ownership with the SEC and the Nasdaq Stock Market. The Company
believes that during the period from July 1, 1994 through June 30, 1995, its
directors and executive officers complied with all applicable Section 16(a)
filing requirements.
UPON THE WRITTEN REQUEST OF ANY RECORD HOLDER OR BENEFICIAL OWNER OF
COMMON STOCK ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS, THE COMPANY
WILL PROVIDE WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING
THE FINANCIAL STATEMENTS AND THE FINANCIAL STATEMENT SCHEDULES, REQUIRED TO BE
FILED WITH THE SEC FOR THE COMPANY'S MOST RECENT FISCAL YEAR. ADDRESS REQUESTS
TO DONALD E. ZIEGLER, SECRETARY, COMPUTER DATA SYSTEMS, INC., ONE CURIE COURT,
ROCKVILLE, MARYLAND 20850.
<PAGE>
APPENDIX - Proxy Card
PROXY 1995
[CDSI LOGO]
The undersigned hereby appoints Clifford M. Kendall, Gordon S. Glenn, and
Wyatt D. Tinsley, and each of them, as Proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote, as
designated below, all the shares of Common Stock of Computer Data Systems, Inc.,
held of record by the undersigned on September 1, 1995, at the Annual Meeting of
Stockholders to be held October 24, 1995, or any adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL LISTED NOMINEES AND FOR
PROPOSAL #2.
1. Election of Directors: Raymond B. Hoxeng, Clifford M. Kendall, Hilliard
W. Paige, Elmer B. Staats, Gordon S. Glenn, Wyatt D. Tinsley, Paul R.
Ignatius, James A. Parker
--- FOR --- WITHHOLD AUTHORITY
all nominees for all nominees
FOR, EXCEPT AUTHORITY TO VOTE WITHHELD FOR THE FOLLOWING NOMINEE(S) ONLY:
____________________________________________
2. Approval of the appointment of Ernst & Young LLP as the Company's
independent auditors.
--- FOR --- AGAINST --- ABSTAIN
PLEASE SIGN YOUR NAME(S) ON THE REVERSE SIDE.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. IF PROPERLY
EXECUTED, IT WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION
OF THE NOMINEES AND FOR PROPOSAL # 2. IN THEIR DISCRETION, THE PROXIES ARE
AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
Please sign your name exactly as it appears below. If shares are held jointly,
all holders must sign. When signing in a fiduciary or representative capacity
(attorney, executor, administrator, trustee, guardian, officer of corporation,
etc.), please give full title as such. The signer hereby revokes all proxies
heretofore given by the signer to vote at such meeting or any adjournment
thereof.
Dated:......................, 1995
.......................................
Signature
.......................................
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
