SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
_______________
BDM International, Inc.
(Exact name of issuer as specified in its charter)
Delaware 54-1561881
(State of Incorporation) (I.R.S. Employer Identification No.)
1501 BDM Way 22102-3204
McLean, Virginia (Zip Code)
(Address of Principal Executive Offices)
_______________
BDM INTERNATIONAL, INC. 1994 Stock Option Plan
(Full Title of the Plan)
_______________
John F. McCabe, Esq.
Corporate Vice President and General Counsel
BDM International, Inc.
1501 BDM Way
McLean, Virginia 22102-3204
(Name and Address of agent for service)
Telephone number, including area code, of agent for service: (703) 848-5224
_______________
CALCULATION OF REGISTRATION FEE
-------------------------------
Proposed Proposed
Maximum Maximum
Amount Offering Aggregate
Title of Securities to be Price Offering Amount of
to be Registered Registered Per Share(1) Price Registration Fee
- ------------------ ----------- ------------ ----------- -----------------
Common Stock
(par value $.01) 1,000,000 $29.25 $29,250,000 $10,086.21
__________________
(1) Computed pursuant to Rule 457(c) and (h)(1) based on the average of the
high and low prices on December 18, 1995, as reported by NASDAQ.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Part I is included in documents sent or
given to participants in the Plan pursuant to Rule 428(b).
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents listed in paragraphs (a) through (c) below are
incorporated by reference in this registration statement:
(a) Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994, filed March 31, 1995.
(b) All other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), since the end of the
fiscal year ended December 31, 1994 and the date hereof.
(c) The description of Registrant's Common Stock contained under
the caption "Description of Capital Stock" in Amendment No.
4 to the Registration Statement on Form S-1 (File No.
33-77096) filed under the Securities Act of 1933, as amended
(the "Securities Act"), on June 26, 1995.
In addition, all documents subsequently filed by Registrant pursuant
to Sections 3(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be a part hereof from the date of filing of such documents.
Item 4. Description of Securities.
Not Applicable.
Item 5. Interests of Named Experts and Counsel.
Certain legal matters with respect to the validity of the issuance
of the Common Stock registered hereby will be passed upon for the Registrant
by John F. McCabe, Esq. Mr. McCabe serves as Corporate Vice President and
General Counsel to the Registrant and, as of the date hereof, beneficially
owns shares of Common Stock with a fair market value in excess of $50,000.
Item 6. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware
empowers a corporation incorporated under that statute to indemnify its
directors, officers, employees, and agents and its former directors, officers,
employees, and agents and those who serve in such capacities with another
enterprise at its request against expenses, as well as judgments, fines, and
settlements, actually and reasonably incurred by them in connection with the
defense of any action, suit, or proceeding in which they or any of them were
or are made parties or are threatened to be made parties by reason of their
serving or having served in such capacity. The power to indemnify shall only
exist where such officer, director, employee, or agent has acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interest of the corporation and, in the case of a criminal action, where
such person had no reasonable cause to believe his or her conduct was
unlawful. However, in an action or suit by or in the right of the
corporation, unless a court shall determine to the contrary, where such a
person has been adjudged liable to the corporation, the corporation shall have
no power of indemnification. Indemnification is mandatory to the extent a
claim, issue, or matter has been successfully defended. Indemnification is
not deemed exclusive of any other rights to which those indemnified may be
entitled, under any by-law, agreement, vote of shareholders, or otherwise. A
Delaware corporation also has the power to purchase and maintain insurance on
behalf of the persons it has the power to indemnify, whether or not
indemnification against such liability would be allowed under the statute. The
foregoing statements are subject to the detailed provisions of Section 145 of
the General Corporation Law of the State of Delaware.
Generally, under the By-laws and Certificate of Incorporation of the
Registrant, indemnification of directors and officers is mandatory to the full
extent permitted by law.
The Registrant has provided liability insurance coverage for each
director and officer with respect to certain losses arising from claims or
charges made against them while acting in their capacities of directors or
officers of the Registrant.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The Exhibit Index on page E-1 is hereby incorporated by reference.
Item 9. Undertakings.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the registration statement is on Form S-3 or Form
S-8 and the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the undersigned Registrant pursuant
to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of McLean, Commonwealth of Virginia, on
December 8, 1995.
BDM INTERNATIONAL, INC.
(Registrant)
/s/Philip A. Odeen
By:_________________________
Philip A. Odeen
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons, or by
his or her duly authorized attorney-in-fact, in the capacities and on the
dates indicated.
Signature Title Date
/s/ Philip A. Odeen President and Chief December 8,
- -------------------- Executive Officer, Director 1995
Philip A. Odeen (principal executive officer)
/s/C. Thomas Faulders, III Executive Vice President, December 8,
- -------------------------- Treasurer and Chief Financial 1995
C. Thomas Faulders, III Officer (principal Financial
and accounting officer)
/s/Frank C. Carlucci Chairman of the Board of December 15,
- -------------------- Directors 1995
Frank C. Carlucci
/s/William E. Conway, Jr. Vice Chairman and December 15,
- ------------------------- Director 1995
William E. Conway, Jr.
/s/Dr. Jeanette Grasselli Brown Director December 8,
- ------------------------------- 1995
Dr. Jeanette Grasselli Brown
/s/James A.D. Geier Director December 8,
- ------------------- 1995
James A.D. Geier
/s/Neil Goldschmidt Director December 15,
- ------------------- 1995
Neil Goldschmidt
/s/Walter Leisler Kiep Director December 15,
- ---------------------- 1995
Walter Leisler Kiep
/s/Dr. Hans Mark Director December 8,
- ------------------- 1995
Dr. Hans Mark
/s/Thomas G. Ricks Director December 15,
- ------------------ 1995
Thomas G. Ricks
/s/John M. Slosar Director December 15,
- ------------------ 1995
John M. Slosar
/s/ Helmut Sonnenfeldt Director December 8,
- ---------------------- 1995
Helmut Sonnenfeldt
/s/Dr. William E. Sweeney, Jr. Director December 15,
- ------------------------------ 1995
Dr. William E. Sweeney, Jr.
/s/ Earle C. Williams Director December 8,
- ---------------------- 1995
Earle C. Williams
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page No. in Sequential
Numbering System
- ----------- ----------- ----------------------
4.1 Amended and Restated
Certificate of Incorporation of
the Registrant (incorporated by
reference to Exhibit 3.1 to
Registrant's Registration
Statement on Form S-1 filed
March 30, 1994 (No. 33-77096)
4.2 Amended and Restated
By-laws of the Registrant
(incorporated by reference to
Exhibit 3.2 to Registrant's
Registration Statement on Form
S-1 filed March 30, 1994 (No.
33-77096)
4.3 BDM International, Inc.
1994 Stock Option Plan
5.1 Opinion of John F. McCabe, Esq.
Corporate Vice President
and General Counsel
24.10 Consent of John F.
McCabe, Esq. (included in
Exhibit 5.1)
PROSPECTUS
- ----------
BDM INTERNATIONAL, INC.
1,000,000 SHARES
COMMON STOCK
(PAR VALUE $.01 PER SHARE)
---------------
1994 STOCK OPTION PLAN
1,000,000 SHARES
---------------
The Common Stock covered by this prospectus consists of 1,000,000
shares issuable upon exercise of options granted by BDM International, Inc.
(the "Company") to key employees of the Company and its subsidiaries
pursuant to the Company's 1994 Stock Option Plan. The Company's principal
executive offices are located at 1501 BDM Way, McLean, Virginia 22102-3204.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this prospectus is December 19, 1995
<PAGE>
BDM INTERNATIONAL, INC.
1994 STOCK OPTION PLAN
1,000,000 SHARES
COMMON STOCK
(par value $.01 per share)
----------------
This document constitutes part of a prospectus
covering securities that have been registered
under the Securities Act of 1933.
----------------
The following information describes the 1994 Stock Option Plan (the
"Plan") of BDM International, Inc. (the "Company"), and the operations of the
Plan. The information is qualified in its entirety by the terms of the Plan,
a copy of which is attached and made a part of this document. Additional
information concerning the Plan and its administration may be obtained from
Corporate Compensation and Benefits at the Company's offices located at 1501
BDM Way, McLean, Virginia 22102-3204, telephone (703) 848-5734.
TABLE OF CONTENTS
-----------------
Page
----
THE PLAN 2
Introduction 2
What is the purpose of the Plan? 2
How is the Plan administered? 2
Who is eligible to receive an option? 3
How was my stock option granted? 3
How is the number of shares
subject to the grant of an option determined? 4
How is the option exercise price determined? 4
When may I exercise my options? 4
How do I exercise my options? 4
May I exercise my options in the event my
employment terminates? 5
Can I transfer my options? 5
Are there restrictions on the resale of stock
acquired pursuant to the exercise of an option? 6
What adjustments will be made in the event of the
Company's recapitalization? 6
What are the Federal income tax consequences
of the Plan? 7
What else should I know about the Plan? 10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 10
1994 STOCK OPTION PLAN Annex A
<PAGE>
THE PLAN
Introduction.
- -------------
The Plan was approved by the Compensation Committee of the Board of
Directors of the Company on March 15, 1994, and approved by the shareholders
of the Company on April 15, 1994, and 1,000,000 shares of the Company's
authorized but unissued Common Stock (the "Common Stock") are reserved for
issuance upon the exercise of stock options granted under the Plan. As of
November 30, 1995, options to purchase 207,850 such shares were outstanding,
792,150 shares remained available for grant, and no shares of Common Stock
have been issued under the Plan.
The Plan provides a means for employees of the Company and its
subsidiaries to purchase shares of the Common Stock pursuant to options which
may either qualify as (1) incentive stock options as defined in Section 422
(formerly Section 422A) of the Internal Revenue Code of 1986, as amended (the
"Code"), or (2) as non-statutory, "non-qualified" options.
The Plan is not subject to any of the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA") and is not qualified under
Section 401 of the Code. The tax effects which may accrue to employees and
the Company as a result of the holding and exercising of options under the
Plan are described under the section below entitled, "What are the Federal
income tax consequences of the Plan."
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 that person has
executed a written stock option agreement (the "Stock Option Agreement").
What is the purpose of the Plan?
- --------------------------------
The purpose of the Plan is to provide to selected officers and key
employees of the Company and its subsidiaries 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 officers and
employees to continue and increase their efforts as officers and employees and
to remain in the employ of the Company and its subsidiaries.
2<PAGE>
How is the Plan administered?
- -----------------------------
The Plan is 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. 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.
Messrs. Frank C. Carlucci, William E. Conway, Jr. and John M. Slosar,
presently comprise the Compensation Committee of the Board of Directors. Mr.
Carlucci is the Chairman.
Subject to the terms and conditions of the Plan, the Compensation
Committee has the authority to: (i) construe and interpret the Plan; (ii)
define terms used in the Plan; (iii) prescribe, amend and rescind rules and
regulations pertaining to the Plan; (iv) determine the individuals to whom
options will be granted, the period of exercisability of each option, the
number of shares subject to each option, and the option prices; and (v) make
all other determinations necessary or advisable for the administration of the
Plan.
Who is eligible to receive an option?
- -------------------------------------
Officers and key employees of the Company or of its subsidiaries,
including directors who are employees (within the meaning of Section 422 of
the Code), are eligible for selection to participate in the Plan. An
individual who has been granted an option may, if otherwise eligible, be
granted additional options if the Compensation Committee shall so determine.
Members of the Compensation Committee shall not 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. In addition,
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.
Under the Plan, an incentive stock option shall in no event be granted
to any person: (i) to the extent that the aggregate fair market value of
Incentive Options, which 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; or (ii) 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 subsidiaries, unless the option price for such incentive stock option
is at least 110% of the fair market value of the stock subject to the
incentive stock option as of the date of grant and unless the time during
which such incentive stock option may be exercised does not exceed five years
from its date of grant.
3<PAGE>
How was my stock option granted?
- --------------------------------
The Compensation Committee determines the individuals to whom options
shall be granted, taking 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 purpose of the Plan.
How is the number of shares subject to the grant of an option determined?
- -------------------------------------------------------------------------
The number of shares of stock subject to the grant of an option to any
employee is determined by the Compensation Committee in its discretion. Each
option states the number of shares to which it pertains. Further information
on the number of shares subject to the grant of an option can be found in the
sections entitled "How is the Plan administered?" and "Who is eligible to
receive an option?"
How is the option exercise price determined?
- --------------------------------------------
The purchase price of the shares of Common Stock covered by each option
is determined by 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
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.
The Plan provides that if the "fair market value" cannot be determined
on the basis of trading prices on any national securities exchange or the
National Association of Securities Dealers Automated Quotation System National
Market, 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.
When may I exercise my options?
- -------------------------------
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 Stock Option Agreements; provided, that, no options granted to
optionees who are subject to "short swing" trading rules under Section 16 of
the Exchange Act (an officer or director of the Company) may be exercised
within six (6) months of the date of grant. However, unless 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 stock 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). In addition, under the Plan an option may be
granted subject to the condition that the option holder remain in the employ
of the Company or render services to the Company for a specified period of
time following the date of grant or other conditions.
4<PAGE>
How do I exercise my options?
- -----------------------------
Except as otherwise provided in a Non-Qualified Stock Option Agreement,
the optionee 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. The written
notice must: (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; (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; and (iv) specify the address to which the certificates for such
shares are to be mailed.
Promptly after receipt of such written notification and payment, the
Company shall cause to be delivered to the optionee certificates for the
number of shares for which options have been exercised, issued in the
optionee's name.
May I exercise my options in the event my employment terminates?
- ----------------------------------------------------------------
Except as otherwise provided in a Non-Qualified Stock Option Agreement,
in the event of termination of employment of an employee option holder for any
reason other than death or total disability, the holder may exercise any
option within thirty days following termination, to the extent the right to
exercise such option had accrued at the date of termination of employment and
had not previously been exercised. In the event the employee option holder
terminates employment as a result, in the sole judgment of the Compensation
Committee, of total disability, any option held by the option holder may be
exercised within six months after such termination to the extent the right to
exercise such option has accrued at the time of termination of employment and
had not previously been exercised. In the event of death during employment or
within thirty days after termination (six months if terminated as a result of
disability), any option may be exercised, by the person or persons to whom the
optionee's rights under the option shall pass by will or by laws of descent
and distribution, within six months after death, to the extent the right to
exercise such option had accrued at the date of termination of employment and
had not previously been exercised.
Stock Option Agreements pursuant to any non-qualified option under the
Plan may provide for different terms in the event of termination, however, in
no event shall any option be exercisable beyond the period specified in "When
may I exercise my options?"
No option holder has any rights as a shareholder with respect to shares
covered by options until the shares are issued pursuant to exercise.
5<PAGE>
Can I transfer my options?
- --------------------------
Options granted under the Plan are not transferable except by will or
by the laws of descent and distribution, and in all events, shall be
exercisable during the optionee's lifetime only by an optionee, and after
death, only by the person or persons described in the previous section.
Are there restrictions on the resale of stock acquired
pursuant to the exercise of an option?
- ------------------------------------------------------
For persons who are not "affiliates" of the Company, there will be no
legal restrictions on resales of Common Stock obtained through exercise of
options. The term "affiliate" is defined under the Federal securities laws as
a person who directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the issuer.
In general, the term "affiliate" refers only to directors, executive officers
and principal shareholders of the Company. For those option holders who may
be deemed "affiliates," shares of Common Stock acquired upon the exercise of
options generally may be publicly sold only pursuant to Rule 144 under the
Securities Act of 1933.
What adjustments will be made in the event of the Company's recapitalization?
- -----------------------------------------------------------------------------
The Plan contains provisions to prevent the interest represented by
your options from being diluted by any corporate transactions.
If as a result of any transaction involving 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 Common Stock are
increased, decreased, changed into, or exchanged for a different number or
kind of shares, or securities of the Company, then 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
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 transaction and the number and class of shares available under the
Plan in the aggregate shall be correspondingly adjusted by the Company.
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 theretofore 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.
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
6<PAGE>
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
incentive stock option shall remain subject to the limitations discussed
earlier in "Who is eligible to receive an option?" 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.
These adjustments 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 or additional benefits under the Plan as provided for
in Sections 422 and 424 of the Code and the regulations thereunder. 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.
What are the Federal income tax consequences of the Plan?
- ---------------------------------------------------------
The following is a general description of Federal income tax
consequences related to non-qualified stock options and incentive stock
options granted under the Plan. Due to the complexity of these tax
provisions, and the fact that they are subject to change, employees are urged
to obtain professional advice regarding the applicability of Federal, state,
and local income and other tax laws to their options. All personal income or
other tax liabilities of any employee resulting from the exercise of stock
options, and the sale of shares acquired upon exercise, are the responsibility
of the employee.
Non-Qualified Options.
- ----------------------
No income will be realized by an optionee upon the grant of a
non-qualified stock option under the 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 (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
7<PAGE>
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 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 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 (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).
8<PAGE>
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.
Stock Options Generally.
- ------------------------
Generally, under current law, applicable withholding and employment
taxes are payable only upon the exercise of non-qualified options, and the
amount to be paid is determined by reference to the amount of ordinary income
realized; no withholding is required upon the exercise of an incentive stock
option. The Internal Revenue Service in Notice 87-49 indicated that it was
reexamining the issue of whether a Company is required to collect applicable
withholding taxes whenever an optionee disposes of Common Stock acquired
pursuant to an incentive stock option within either two years from the day of
grant or one year from the date of exercise. There have been no
pronouncements to date since the publication of Notice 87-49 announcing the
results of such reexamination. In Notice 87-49, the Internal Revenue Service
indicated that until that reexamination is complete, the Internal Revenue
Service will apply the position it took in Revenue Ruling 71-52, to the effect
9<PAGE>
that the disqualifying, or early, disposition of stock does not result in the
receipt by the optionee of wages for withholding or employment tax purposes.
Employees should be cautioned that the income realized upon a disqualifying
disposition remains taxable and they should adjust their estimated tax
payments accounts accordingly.
What else should I know about the Plan?
- ---------------------------------------
The Company shall not be required to sell or issue any shares under any
option if the sale or issuance of such shares would constitute a violation by
the optionee or the Company of any provisions of any law or regulation of any
governmental authority, including, without limitation, any Federal or state
securities laws or regulations.
The Board of Directors of the Company may, insofar as permitted by law
and the Plan, from time to time, with respect to any shares at the time not
subject to options, suspend or discontinue the Plan or revise or amend them.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
-----------------------------------------------
The following documents have been incorporated by reference in the
prospectus relating to the Common Stock offered under the Plan. Copies of
such documents may be obtained, without charge, by written or oral request
directed to Corporate Compensation and Benefits, telephone (703) 848-5734.
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994.
(b) All other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 since the end of
the 1994 fiscal year and the date hereof.
(c) The description of the Common Stock of the Company contained
under the caption "Description of Capital Stock" in Amendment
No. 4 to the Registration Statement of Form S-1
(File No. 33-77096) filed under the Securities Act of 1933 on
June 26, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this prospectus and prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this prospectus
from the date of filing of such documents. Any statement contained herein or
in any document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this prospectus
to the extent that a statement contained in this prospectus or any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement.
10
December 26, 1995
BDM International, Inc.
1501 BDM Way
McLean, Virginia 22102-3204
Re: BDM International, Inc.
1993 Employee Stock Purchase Plan
---------------------------------
Dear Sirs:
I am Corporate Vice President and General Counsel of BDM
International, Inc., a Delaware corporation (the "Company"), and
have advised you in connection with certain matters associated
with the Company's Registration Statement on Form S-8 (the
"Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, for the
registration of an aggregate of 1,000,000 shares of the Company's
Common Stock, par value $.01 per share (the "Common Stock"),
issuable pursuant to the Company's 1994 Employee Stock Option
Plan (the "Plan"). The Common Stock represents authorized and
unissued shares and/or treasury shares of the Company's Common
Stock.
I have examined and am familiar with originals or copies,
certified or otherwise identified to my satisfaction, of such
documents, corporate records, and other instruments as I have
deemed necessary or appropriate for purposes of this opinion.
On the basis of the foregoing, I am of the opinion that:
the Company has taken all necessary corporate action to
authorize the issuance of the Common Stock; and
the shares of Common Stock to be issued under the Plan
are validly authorized and when issued, delivered, and
paid for in accordance with the terms of the Plan, the
shares of Common Stock so issuable will be validly
issued, fully paid and non-assessable.
No opinion is expressed herein as to the laws of any
jurisdiction other than the Federal laws of the United States of
America and, to the extent required by the foregoing opinion, the
General Corporation Law of the State of Delaware.
The foregoing opinion is delivered to you in connection with
the Registration Statement, and may not be relied upon by any
other person or for any other purpose.
I hereby consent to the filing of this opinion as an exhibit
to the Registration Statement.
Very truly yours,
/s/John F. McCabe
-----------------
John F. McCabe
Corporate Vice President,
Secretary, and General Counsel
JFM/mlm
