<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
<TABLE>
<S> <C>
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
BTG, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
[ ]Fee paid previously with preliminary materials.
[ ]Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
--------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
--------------------------------------------------------------------------------
(3) Filing party:
--------------------------------------------------------------------------------
(4) Date filed:
--------------------------------------------------------------------------------
<PAGE> 2
[BTG LOGO]
BTG, INC.
3877 FAIRFAX RIDGE ROAD
FAIRFAX, VIRGINIA 22030
July 28, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 annual meeting of BTG, Inc. on
Wednesday, September 6, 2000, at 10:00 a.m. at the Hyatt Fair Lakes, 12777 Fair
Lakes Circle, Fairfax, Virginia 22033.
At this meeting, you will be asked to vote, in person or by proxy, on the
following matters: (i) the election of two directors; (ii) approval of an
amendment to the 1995 Employee Stock Option Plan; (iii) ratification of the
appointment of BTG's independent auditors; and (iv) any other business as may
properly come before the meeting. The official Notice of Meeting, proxy
statement, and form of proxy are included with this letter. The matters listed
in the Notice of Meeting are described in detail in the proxy statement.
It is important that your shares be represented at the annual meeting,
whether or not you are personally able to attend. You are urged to complete,
sign, and mail the enclosed proxy card as soon as possible.
Sincerely,
/s/ Edward H. Bersoff
Edward H. Bersoff
Chairman of the Board, President, and
Chief Executive Officer
<PAGE> 3
BTG, INC.
3877 FAIRFAX RIDGE ROAD
FAIRFAX, VIRGINIA 22030
(703) 383-8000
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 6, 2000
NOTICE IS HEREBY GIVEN that the 2000 annual meeting of shareholders of BTG,
Inc. will be held on Wednesday, September 6, 2000, at 10:00 a.m. at the Hyatt
Fair Lakes, 12777 Fair Lakes Circle, Fairfax, Virginia 22033, for the following
purposes:
1) To elect two directors, each for a three-year term;
2) To approve an amendment to the 1995 Employee Stock Option Plan to
increase, from 1,250,000 to 1,750,000, the number of shares of BTG
common stock that may be issued pursuant to options granted under that
plan;
3) To ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending March 31, 2001; and
4) To transact such other business as may properly come before the meeting
or any adjournments thereof.
Pursuant to BTG's bylaws, the Board of Directors has fixed July 10, 2000 as
the record date for the annual meeting. Only shareholders of record on that date
will be entitled to notice of, and to vote at, the annual meeting or any
adjournments thereof.
In the event that there are not sufficient votes for a quorum or to approve
any one or more of the foregoing proposals at the time of the annual meeting,
the annual meeting may be adjourned in order to permit further solicitation of
proxies by BTG.
By order of the Board of Directors of
BTG, Inc.
/s/ Edward H. Bersoff
Edward H. Bersoff
Chairman of the Board, President, and
Chief Executive Officer
Fairfax, Virginia
July 28, 2000
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU
PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN, DATE, AND
COMPLETE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 4
BTG, INC.
3877 FAIRFAX RIDGE ROAD
FAIRFAX, VIRGINIA 22030
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
SEPTEMBER 6, 2000
SOLICITATION, VOTING, AND REVOCABILITY OF PROXIES
This Proxy Statement and the accompanying Notice of Annual Meeting and
Proxy Card are being furnished to the shareholders of BTG, Inc. ("BTG" or the
"Company"), a Virginia corporation, in connection with the solicitation of
proxies by the Board of Directors for use at the annual meeting of shareholders
for the Company's fiscal year ending March 31, 2000 ("2000 fiscal year" or
"fiscal year") and any adjournments thereof. The meeting will be held on
Wednesday, September 6, 2000, at 10:00 a.m. at the Hyatt Fair Lakes, 12777 Fair
Lakes Circle, Fairfax, Virginia 22033.
If the enclosed form of proxy is properly executed and returned to BTG in
time to be voted at the annual meeting, the shares it represents will be voted
in accordance with its instructions. PROXIES THAT ARE SIGNED BUT NOT MARKED WILL
BE VOTED: (I) FOR THE ELECTION OF EACH OF THE TWO NOMINEES OF THE BOARD OF
DIRECTORS TO SERVE AS DIRECTORS, EACH FOR A THREE-YEAR TERM; (II) FOR THE
APPROVAL OF AN AMENDMENT TO THE 1995 EMPLOYEE STOCK OPTION PLAN TO INCREASE,
FROM 1,250,000 TO 1,750,000, THE NUMBER OF SHARES OF BTG COMMON STOCK THAT MAY
BE ISSUED PURSUANT TO OPTIONS GRANTED UNDER THAT PLAN; AND (III) FOR THE
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR FISCAL 2001. IF ANY OTHER MATTERS ARE PROPERLY BROUGHT
BEFORE THE ANNUAL MEETING, PROXIES WILL BE VOTED IN THE DISCRETION OF THE PROXY
HOLDERS. BTG is not aware of any such matters that are proposed to be presented
at its annual meeting.
The Company will bear the cost of soliciting proxies, in the form enclosed
herewith. In addition to using the mail, BTG's directors, officers and regular
employees may solicit proxies personally, by telephone, telegram, or otherwise,
without receiving extra remuneration. BTG may request persons, firms and
corporations holding shares in their name or in the names of their nominees,
which shares are beneficially owned by others, to send proxy materials to and
obtain proxies from the beneficial owners, and will reimburse the holders for
their reasonable expenses in doing so. It is anticipated that this proxy
statement will be mailed to shareholders on or about July 28, 2000.
The securities which can be voted at the annual meeting consist of shares
of common stock of BTG. Each share entitles its owner to one vote on each matter
presented to the shareholders. The Board of Directors has fixed July 10, 2000 as
the record date for the determination of shareholders entitled to vote at the
annual meeting. On the record date, there were approximately 268 record holders
of common stock, and the number of shares outstanding as of that date was
8,987,716. The presence, in person or by proxy, of at least a majority of the
total number of outstanding shares of common stock is necessary to constitute a
quorum at the annual meeting. Shareholders' votes will be tabulated by a
representative of First Union National Bank of North Carolina, which has been
appointed by the Board of Directors to act as inspector of election for the
annual meeting. Under Virginia corporate law and BTG's bylaws, directors are
elected by a plurality of votes cast. Unless otherwise required by law or BTG's
articles of incorporation or bylaws, any other matter put to a shareholder vote
will be decided by the affirmative vote of a majority of the votes cast on the
matter. For purposes of that tabulation, abstentions and broker non-votes have
no effect on the vote.
A shareholder's presence at the annual meeting will not automatically
revoke that shareholder's proxy. However, a shareholder may revoke a proxy at
any time prior to its exercise by filing with the Secretary of BTG a written
notice of revocation, by delivering to BTG a duly executed proxy bearing a later
date, or by attending the annual meeting and voting in person.
------------------------
<PAGE> 5
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors consists of seven members. Directors serve
three-year terms, which are staggered to provide for the election of
approximately one-third of the Board of Directors each year. At the annual
meeting, Edward H. Bersoff and Donald M. Wallach each will be nominated for
three-year terms. Unless otherwise instructed on the proxy, it is the intention
of the persons named in the proxy to vote the shares represented by each
properly executed proxy for the election of the nominee directors listed below.
The Board of Directors believes that each nominee will stand for election and
will serve if elected. However, if any person nominated by the Board of
Directors fails to stand for election or is unable to accept election, proxies
will be voted by the proxy holders for the election of such other person or
persons as the Board of Directors may recommend. There is no cumulative voting
for election of directors. Assuming the presence of a quorum at the annual
meeting, the two directors receiving the largest number of votes will be
elected.
INFORMATION AS TO NOMINEES AND CONTINUING DIRECTORS
Set forth below is certain information with respect to the Board of
Directors' nominees for election as directors at the annual meeting, and other
directors whose terms do not expire until subsequent annual meetings.
NOMINEES FOR DIRECTOR
<TABLE>
<CAPTION>
FOR TERM
NAME AGE POSITION DIRECTOR SINCE EXPIRING IN
---- --- -------- -------------- -----------
<S> <C> <C> <C> <C>
Edward H. Bersoff................. 57 Chairman of the Board, 1982 2003
President and Chief
Executive Officer
Donald M. Wallach................. 65 Director 1982 2003
</TABLE>
Edward H. Bersoff has served as President, Chief Executive Officer, and
Chairman of the Board of Directors since founding BTG in 1982. From 1975 until
1982, he was employed by CTEC, Inc., a provider of systems integration services,
serving first as Vice President, then Executive Vice President, and later as
President. Previously, he was employed by Logicon, Inc., a provider of advanced
technology systems and services to national security, civil, and industrial
clients, and by the National Aeronautics and Space Administration in Cambridge,
Massachusetts. Dr. Bersoff serves as a director of Phillips Publishing
International, Inc., a publishing firm, and Transcrypt International, Inc., a
telecommunications company. He is the husband of Marilynn D. Bersoff, Corporate
Secretary of BTG.
Donald M. Wallach has served since 1965 as the President of Wallach
Associates, Inc., a professional recruiting and employment counseling firm which
recruits primarily executive and technical professionals in the fields of
defense, electronics, intelligence, computer science, and information
technology.
------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ITS NOMINEES
FOR DIRECTORS. YOUR PROXY WILL BE VOTED FOR THESE NOMINEES UNLESS YOU SPECIFY
OTHERWISE.
------------------------
2
<PAGE> 6
CONTINUING DIRECTORS
<TABLE>
<CAPTION>
FOR TERM
NAME AGE POSITION DIRECTOR SINCE EXPIRING IN
---- --- -------- -------------- -----------
<S> <C> <C> <C> <C>
Alan G. Merten................................. 58 Director 1996 2001
Ronald L. Turner............................... 54 Director 1995 2001
Earle C. Williams.............................. 70 Director 1998 2001
Ruth M. Davis.................................. 71 Director 1986 2002
Raymond T. Tate................................ 76 Director 1988 2002
</TABLE>
Ruth M. Davis is Chair of The Aerospace Corporation, a
government-chartered, not-for-profit corporation, a position she has held since
1992, and has served since 1981 as President and Chief Executive Officer of the
Pymatuning Group, Inc., which specializes in industrial modernization strategies
and technology management. Dr. Davis also currently serves on the board of
Consolidated Edison Company of New York, Inc. During fiscal 2000, she served on
the boards of Ceridian Corporation and Varian Semiconductor Equipment
Associates, Inc. She served as Assistant Secretary of Energy for Resource
Applications from 1979 to 1981 and as Deputy Undersecretary of Defense for
Research and Advanced Technology from 1977 to 1979.
Raymond T. Tate has served since 1979 as President of Raymond Tate
Associates, Inc., a technology consulting firm, and since November 1996 as
Chairman and Chief Executive Officer of the Windermere Group, Inc., a technology
company in commercial communications and systems security. From July 1995 to
October 1996, he served as Chairman of the Board, President, and Chief Executive
Officer of Ashton Technology Group, Inc., a technology company primarily
involved in financial transactions and neural network research and development
activities. He is a former Deputy Assistant Secretary of the Navy and a former
Deputy Director of the National Security Agency.
Alan G. Merten has been the President of George Mason University since
1996. From 1989 until accepting that position, he served as Dean of the Johnson
Graduate School of Management at Cornell University. Dr. Merten currently serves
on the boards of Smith Barney Concert Investment Series and Comshare, Inc.
Ronald L. Turner is currently Chairman, President and Chief Executive
Officer of Ceridian Corporation, an information services company. He was named
Chairman and Chief Executive Officer in 2000 and has served as President since
1998. From 1993 to 1997 he served as the President and Chief Executive Officer
of Computing Devices International, a defense electronics business that was sold
by Ceridian Corporation in 1997. From 1987 to 1993, he served as President and
Chief Executive Officer of GEC-Marconi Electronic Systems Division. Mr. Turner
also currently serves as a director of FLIR Systems, Inc.
Earle C. Williams served as President and Chief Executive Officer of BDM
International, Inc. from 1972 until his retirement in 1992 and as a director of
that company from 1972 through 1997. Mr. Williams is presently a member of the
Board of Directors of Gamma-A Technologies, Inc., GTS Duratek, Inc., and The
Parsons Corporation. He is also a director of the Wolftrap Foundation for the
Performing Arts and the Auburn University Foundation.
CORPORATE GOVERNANCE AND OTHER MATTERS
The Board of Directors acts as the nominating committee to select nominees
for election as directors. BTG's bylaws permit shareholders eligible to vote at
the annual meeting to make nominations for directors, but only if such
nominations are made pursuant to timely notice in writing to the Secretary of
BTG. The bylaws also permit shareholders to propose other business to be brought
before an annual meeting, provided that such proposals are made pursuant to
timely notice in writing to the Secretary of BTG. To be timely, notice must be
delivered to, or mailed to and received at, the principal executive offices of
BTG no later than 90 days prior to the anniversary date of the immediately
preceding annual meeting. A shareholder's notice of nomination also must set
forth certain information specified in Section 2.3.6 of BTG's bylaws concerning
both the nominating shareholder and each person the shareholder proposes to
nominate for election. No such nominations have been received in connection with
the forthcoming annual meeting.
3
<PAGE> 7
The members of the Organization and Compensation Committee of the Board of
Directors (the "Compensation Committee") during fiscal 2000 were Messrs. Wallach
(chair) and Tate, and Dr. Merten, all of whom are non-employee directors. The
Compensation Committee has authority over, and performs all the duties related
to, compensation of management, including determining policies and practices,
changes in compensation and benefits for management, determination of employee
benefits, and all other matters relating to employee compensation, including
administering the 1995 Employee Stock Option Plan. The Compensation Committee
met two times during fiscal 2000.
The members of the Audit Committee of the Board of Directors during fiscal
2000 were Dr. Davis (chair) and Messrs. Williams and Turner, all of whom are
non-employee directors. The Audit Committee, among other things, makes
recommendations concerning the engagement of independent auditors, reviews the
results and scope of the annual audit and other services provided by BTG's
independent auditors, and reviews the adequacy of the Company's internal
accounting controls. In fiscal 2000, the Audit Committee met five times. The
Audit Committee also serves as the Board's conduit for direct contact with the
Company's independent auditors. The Committee met with the independent auditors
four times during the past fiscal year.
The Board of Directors held six meetings during fiscal 2000. No incumbent
director attended fewer than 75 percent of the total number of meetings of the
Board of Directors and committees on which he or she served.
COMPENSATION OF DIRECTORS
Payments and Fees
For fiscal 2000, non-employee directors each received quarterly payments of
$5,000 ($5,375 for committee chairs), and fees of $2,000 per Board of Directors
meeting and $1,000 per committee meeting attended, subject to an annual maximum
payment of $36,000 ($37,500 for committee chairs) to each director. Attendance
via telephone was compensated at one-half the normal meeting rate. The directors
also received reimbursement for reasonable expenses incurred in attending
meetings.
Stock in Lieu of Fees
Pursuant to the 1997 Non-Employee Director Stock Purchase Plan,
non-employee directors may elect to have their fees as directors retained and
used to purchase shares of BTG common stock. Generally, retained fees are
accumulated during the period commencing on October 1 of each year and ending
September 30 of the following year (the "Accumulation Period"). The purchase
price for each share is its fair market value on the first or last trading day
of such Accumulation Period, whichever is lower. Under the Plan, 100,000 shares
are available for purchase. During the Accumulation Period ended September 30,
1999, five directors elected to purchase an aggregate of 19,405 shares.
Stock Options
Pursuant to the Directors Stock Option Plan, adopted August 30, 1995 (the
"Effective Date"), the Company has set aside 100,000 shares of common stock to
be granted to directors who are not officers or employees of BTG (each an
"Eligible Director"). On the Effective Date, each Eligible Director was granted
an initial option to purchase shares, the number of which varied depending upon
each Eligible Director's years of service as a director, as follows: (1) more
than seven years of service -- 2,500 shares; (2) between three and seven years
of service -- 2,000 shares; (3) between zero and three years of service -- 1,500
shares; and (4) no years of service -- 1,000 shares. In addition, each new
Eligible Director is granted an initial option to purchase 1,000 shares as of
the date he or she commences service. Options are exercisable beginning six
months after the grant date. The Plan will terminate in 2005, unless terminated
at an earlier date by the Board of Directors.
Under the Directors Stock Option Plan as originally adopted, each Eligible
Director also was granted an additional option to purchase 1,000 shares each
year that he or she continues to be an Eligible Director. All options granted
under the original Plan had an exercise price equal to the fair market value of
the stock on the grant date. The Plan was amended effective December 17, 1998,
as approved by the shareholders at the annual meeting of September 9, 1999, to
provide that each Eligible Director will now receive options to acquire
4
<PAGE> 8
2,500 shares per annual grant, at an exercise price equal to 110% of the stock's
fair market value on the grant date. During fiscal 2000, no directors exercised
options to purchase shares under the Plan.
PROPOSAL TWO
EMPLOYEE STOCK OPTION PLAN AMENDMENT
The Board of Directors has approved and is proposing for shareholder
approval an amendment to the Company's 1995 Employee Stock Option Plan (the
"Employee Option Plan"). The purpose of the amendment is to increase the number
of shares authorized to be issued pursuant to options granted under the Employee
Option Plan from 1,250,000 to 1,750,000. In all other respects, the Employee
Option Plan, which was last amended at the September 17, 1997 annual meeting of
shareholders, will remain unchanged.
The Employee Option Plan provides eligible employees an opportunity to
acquire or increase their proprietary interest in the Company, thereby creating
a stronger incentive to work for the Company's growth and success, and
encouraging such persons to remain in the Company's employ. The Plan is intended
to qualify as an employee stock option plan under Section 422 of the Internal
Revenue Code, and options granted under the Plan are intended to be "incentive
stock options" under the Code, except to the extent they exceed certain
limitations or are specifically designated as not so qualifying. The Plan will
terminate on October 17, 2004, and no additional options will be able to be
granted under the Plan. Options issued prior to that date will continue to be
exercisable, in accordance with the terms of the original grants.
Assuming the presence of a quorum, the affirmative vote of a majority of
the shares present, in person or by proxy, and entitled to vote at the Annual
Meeting is required to approve the amendment to the Employee Option Plan. Unless
otherwise indicated, properly executed proxies will be voted in favor of
Proposal Two.
------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL TWO. YOUR PROXY WILL
BE VOTED FOR THIS PROPOSAL UNLESS YOU SPECIFY OTHERWISE.
------------------------
PROPOSAL THREE
INDEPENDENT PUBLIC ACCOUNTANTS
On July 28, 1999, the Board of Directors appointed Deloitte & Touche LLP to
replace KPMG LLP as the Company's independent public auditors. During and since
the fiscal year ended March 31, 1999, the report of KPMG LLP on the Company's
annual financial statements, for the period for which that company performed its
review, contained no adverse opinions or disclaimers of opinion, nor has it been
qualified or modified as to uncertainty, audit scope, or accounting principles.
During fiscal year 1999 and through the date hereof, there were no disagreements
with KPMG LLP on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements, if
not resolved to the satisfaction of KPMG LLP would have caused that firm to make
reference to the subject matter of the disagreement in connection with its
report on the Company's financial statements for such period. The Company
requested that KPMG LLP furnish it with a letter addressed to the Securities and
Exchange Commission ("SEC") stating whether it agrees with the above statements.
A copy of the KPMG LLP letter addressed to the SEC is filed as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2000.
The Board of Directors has selected Deloitte & Touche LLP to continue as
the Company's independent public accountants for the fiscal year ending March
31, 2001, subject to ratification of such appointment by shareholders at the
annual meeting. A representative of Deloitte & Touche LLP is expected to be
present at the annual meeting, to have an opportunity to make a statement if he
or she desires to do so, and to be available to respond to appropriate questions
from shareholders. Unless otherwise indicated, properly executed proxies will be
voted in favor of ratifying the appointment of Deloitte & Touche LLP to audit
the books and accounts of BTG for the fiscal year ending March 31, 2001. No
determination has been made as to what action the Board of Directors would take
if the shareholders do not ratify the appointment.
------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL THREE. YOUR PROXY
WILL BE VOTED FOR THIS PROPOSAL UNLESS YOU SPECIFY OTHERWISE.
------------------------
5
<PAGE> 9
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth certain information regarding beneficial
ownership of BTG's common stock as of July 10, 2000 by: (i) each director and
nominee for director; (ii) the Chief Executive Officer and the four most highly
compensated executive officers during fiscal year 2000, each of whose total
annual salary and bonus exceeded $100,000 (the "Named Executive Officers");
(iii) all persons known to be beneficial owners of more than 5% of the
outstanding common stock; and (iv) all incumbent directors and executive
officers as a group. Under the rules of the SEC, a person is deemed a
"beneficial owner" of a security if such person has or shares the power to vote
or direct the voting of such security or the power to dispose or direct the
disposition of such security. A person also is deemed to be a beneficial owner
of any securities as to which that person has the right to acquire beneficial
ownership within 60 days. More than one person may be deemed to be a beneficial
owner of the same securities.
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF COMMON
NAME SHARES STOCK OUTSTANDING(1)
---- --------- --------------------
<S> <C> <C>
Heartland Advisors, Inc.(2)............................. 1,791,600 19.93%
Edward H. Bersoff, Chairman, President, and
Chief Executive Officer(3)............................ 1,390,578 13.40
Wellington Management Co., LLP(4)....................... 573,600 6.38
Donald M. Wallach, Director(5).......................... 313,689 3.37
Randall C. Fuerst, Senior Vice President(6)............. 94,148 1.04
Todd A. Stottlemyer, Executive Vice President(7)........ 52,433 *
Linda E. Hill, Senior Vice President(8)................. 36,513 *
Raymond T. Tate, Director(9)............................ 32,834 *
Paul G. Leslie, Executive Vice President(10)............ 32,233 *
Alan G. Merten, Director(11)............................ 27,400 *
Ruth M. Davis, Director(12)............................. 22,613 *
Earle C. Williams, Director(13)......................... 18,238 *
Ronald L. Turner, Director(14).......................... 6,500 *
All directors and executive officers as a group (13
persons)(15).......................................... 2,182,764 19.54
</TABLE>
---------------
* Represents less than 1%.
(1) Based on the number of shares outstanding on July 10, 2000, plus the number
of shares that can be acquired by the specified persons through the
exercise of options on or before September 8, 2000.
(2) The address of Heartland Advisors, Inc. is 790 North Milwaukee Street,
Milwaukee, Wisconsin 53202.
(3) The address of Dr. Bersoff, and each other officer and director of BTG, is
c/o BTG, Inc., 3877 Fairfax Ridge Road, Fairfax, Virginia 22030. The number
of shares listed for Dr. Bersoff includes 67,332 shares subject to options
exercisable on or before September 8, 2000. Does not include (i) 98,987
shares and options to acquire 29,000 shares (14,000 of which are
exercisable on or before September 8, 2000) owned by Corporate Secretary
Marilynn D. Bersoff, Dr. Bersoff's wife; (ii) 2,875 shares owned by Dr.
Bersoff's mother; and (iii) 2,875 shares owned by Dr. Bersoff and his
brother, as trustees for their mother.
(4) The address of Wellington Management Company, LLP is 75 State Street,
Boston, Massachusetts 02109.
(5) Includes (i) 114,130 shares held in joint tenancy with Mr. Wallach's wife;
(ii) 55,050 shares held by Wallach Associates, Inc. Employee Profit Sharing
Plan Trust, of which Mr. Wallach is the sole participant; and (iii) 8,000
shares subject to options exercisable on or before September 8, 2000. Does
not include 1,000 shares owned by Mr. Wallach's wife.
6
<PAGE> 10
(6) Includes 45,666 shares subject to options exercisable on or before
September 8, 2000.
(7) Includes 49,302 shares subject to options exercisable on or before
September 8, 2000.
(8) Includes (i) 419 shares owned jointly with Ms. Hill's husband; and (ii)
25,999 shares subject to options exercisable on or before September 8,
2000.
(9) Includes (i) 7,500 shares held in trust with Mr. Tate's wife for the
benefit of their children; and (ii) 7,500 shares subject to options
exercisable on or before September 8, 2000.
(10) Includes 25,000 shares subject to options exercisable on or before
September 8, 2000.
(11) Includes 5,500 shares subject to options exercisable on or before September
8, 2000.
(12) Includes 7,500 shares subject to options exercisable on or before September
8, 2000.
(13) Includes (i) 3,138 shares held in the Earle C. Williams Revocable Trust;
and (ii) 3,500 shares subject to options exercisable on or before September
8, 2000.
(14) Includes 6,500 shares subject to options exercisable on or before September
8, 2000.
(15) Includes 303,633 shares subject to options exercisable on or before
September 8, 2000.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning
compensation paid to the Named Executive Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
FOR THE ANNUAL COMPENSATION SECURITIES
FISCAL YEAR -------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION ENDED MARCH 31, SALARY($) BONUS($) OPTIONS(#) COMPENSATION(1)
--------------------------- --------------- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
Edward H. Bersoff.............. 2000 $428,125 $175,000 20,000 $18,099
Chairman of the Board, 1999 413,542 0 135,000 19,293
President and Chief Executive 1998 398,334 0 10,000 52,146
Officer
Todd A. Stottlemyer............ 2000 211,375 120,000 58,000 11,736
Executive Vice President,
Chief Financial and
Administrative Officer
Randall C. Fuerst.............. 2000 240,000 70,000 37,000 12,047
Senior Vice President 1999 238,958 0 75,000 9,962
1998 214,376 50,000 7,000 38,425
Linda E. Hill.................. 2000 181,125 90,000 47,000 14,435
Senior Vice President, Chief 1999 190,748(2) 0 45,000 18,692
Human Development Officer
Paul G. Leslie................. 2000 193,875 70,000 50,000 380
Executive Vice President,
Chief Operating Officer
</TABLE>
---------------
(1) The figures in this column may include contributions by BTG under its
401(k) profit sharing plan, Company-paid life insurance premiums, medical
and educational benefits, and reimbursement of a maximum of $10,000 per
year for the cost of uninsured medical expenses, tax preparation, financial
planning, and certain legal expenses.
(2) Of this amount, $11,997.53 was paid in Company stock.
7
<PAGE> 11
STOCK OPTIONS
Option Grants. The following table contains information with respect to
stock option grants to each of the Named Executive Officers during the 2000
fiscal year. All option grants were made under the Employee Option Plan. BTG
does not have any stock appreciation rights. In accordance with the rules of the
SEC, the table shows the hypothetical "gains" or "option spreads" that would
exist for the respective options based on assumed rates of annual stock price
appreciation of 5% and 10%, from the date the options were granted, over the
full option term.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZED
INDIVIDUAL GRANTS VALUE AT ASSUMED
----------------------------------------------------------- ANNUAL RATE
NUMBER OF OF STOCK
SECURITIES % OF TOTAL SECURITIES PRICE APPRECIATION
UNDERLYING UNDERLYING OPTIONS EXERCISE FOR OPTION TERM
OPTIONS GRANTED TO EMPLOYEES PRICE EXPIRATION -------------------
NAME GRANTED IN FISCAL YEAR ($/SH)(3) DATE(4) 5% 10%
---- ---------- --------------------- --------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Edward H. Bersoff........ 20,000(1) 3.77% $6.14 4/28/04 $ 17,934 $ 58,634
Randall C. Fuerst........ 12,000(1) 2.26 6.05 4/28/09 36,260 106,220
25,000(2) 4.72 9.90 1/17/10 123,750 362,250
Paul G. Leslie........... 50,000(2) 9.43 9.90 1/17/10 247,500 724,500
Linda E. Hill............ 17,000(1) 3.21 6.05 4/28/09 51,368 150,478
30,000(2) 5.66 9.90 1/17/10 148,500 434,700
Todd A. Stottlemyer...... 8,000(1) 1.51 6.05 4/28/09 24,173 70,813
50,000(2) 9.43 9.90 1/17/10 247,500 724,500
</TABLE>
---------------
(1) These options vest in equal installments over a three-year period beginning
April 28, 2000, one year after the grant date.
(2) These options vest in equal installments over a three-year period beginning
January 17, 2001, one year after the grant date.
(3) The option exercise prices on all options granted under the Employee Option
Plan may not be less than 100% of the fair market value of the stock on the
grant date, as defined in the Plan. For options granted to senior executive
officers, the exercise prices range over the three-year vesting period from
105% to 115% of the fair market value on the grant date. The table shows the
weighted average exercise price of each group of options. The options are
not subject to any provision that could cause the exercise price to be
lowered (other than for anti-dilution purposes).
(4) Under the Employee Option Plan, options can only be exercised so long as the
optionee is employed by BTG or a subsidiary of BTG, and for three months
after termination of employment, but not later than ten years (five years
for those persons, or their family members, owning over 10% of the
outstanding shares of the Company) after the grant.
Option Exercises and Year-End Values. The following table provides
information regarding the exercise of options during the 2000 fiscal year, as
well as the fiscal year-end values of all unexercised options held by the Named
Executive Officers. Value realized upon exercise is the difference between the
market price of the underlying shares on the exercise date and the option
exercise price paid for such shares, multiplied by the number of shares to which
the exercise relates. The value of unexercised "in the money" options is the
difference between the market price of $9.50 per share (which was the closing
selling price per share of common stock on the NASDAQ National Market on the
last trading day of fiscal 2000) and the option exercise price, multiplied by
the number of shares underlying the options.
8
<PAGE> 12
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES MARCH 31, 2000 MARCH 31, 2000
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED UNEXERCISABLE EXERCISABLE UNEXERCISABLE EXERCISABLE
---- ----------- -------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Edward H. Bersoff........... 0 $0 131,334 42,666 $250,468 $96,666
Randall C. Fuerst........... 0 0 102,333 28,667 147,725 62,641
Paul G. Leslie.............. 0 0 100,000 25,000 158,833 89,500
Linda E. Hill............... 0 0 82,500 15,500 128,962 40,156
Todd A. Stottlemyer......... 0 0 106,364 46,636 120,075 53,331
</TABLE>
EMPLOYMENT AGREEMENTS
During fiscal year 2000, the Company had only one employment agreement,
with Edward H. Bersoff. That agreement, dated October 24, 1997, has been
superseded by a new employment agreement, effective April 1, 2000. Pursuant to
the amended agreement, Dr. Bersoff will serve as the President and Chief
Executive Officer of BTG, and will be employed for a term ending on March 31,
2004. The Company also has entered into employment agreements with the other
Named Executive Officers, effective for the same term. Under the agreements, the
following minimum annual base salaries are to be paid to each Named Executive
Officer: Dr. Bersoff, $450,000. Mr. Leslie, $231,000; Mr. Stottlemyer, $221,000;
Ms. Hill, $190,000; and Mr. Fuerst, $228,000. Each of these officers is also
eligible to receive annual incentive compensation based on target percentages of
base salary. Pursuant to each agreement, the Board of Directors may terminate
employment for willful and gross misconduct, or in the case of death, or illness
or disability, which prevents the executive from substantially fulfilling his or
her duties for a period in excess of six consecutive months. Either the Company
or the executive may terminate an agreement at any time, without cause, upon not
less than thirty days notice. In the event that the employment of either Dr.
Bersoff or Ms. Hill is terminated by the Company, other than for cause, during
the term of their agreements, they shall each be entitled to receive a lump sum
payment (less applicable taxes) of 450% and 142% of base salary, respectively.
Such amounts are intended to equal base salary plus expected median bonus for
three years and one year, respectively.
If, within two years of a change in control of BTG, either (i) the Company
terminates the employment of any of these officers without cause (as that term
is defined in the agreements); or (ii) any such officer terminates his or her
employment for good reason (as that term is defined in the agreements), each
officer shall be entitled to a lump sum payment, less applicable taxes, as
follows: Dr. Bersoff, and Messrs. Leslie and Stottlemyer, 450% of base salary;
Ms. Hill and Mr. Fuerst, 284% of base salary. The agreements include
confidentiality provisions, as well as covenants regarding non-competition and
non-solicitation.
------------------------
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee is comprised of three members of the Board of
Directors, none of whom is an employee of the Company. (Mr. Tate is President of
BTG Technology Resources, Inc., a wholly-owned subsidiary of the Company, but he
receives no compensation for this position.) The Committee has been authorized
to oversee BTG's executive compensation program as well as the Employee Option
Plan. The Committee establishes the salary and option levels for the executive
officers and approves the recommendation of the Chief Executive Officer with
respect to other key executive employees. All decisions by the Committee
relating to compensation of executive officers and other key employees,
including the awarding of stock options, are reviewed by the full Board of
Directors.
BTG's executive compensation program has been designed to attract and
retain highly qualified executive personnel in order to enhance the Company's
financial strength and profitability. BTG supports a pay-for-
9
<PAGE> 13
performance policy that rewards individuals for achieving goals that further the
Company's long-term plans. The Compensation Committee is mindful of the need to
maintain competitive compensation opportunities while encouraging superlative
performance. The program is designed to recruit and retain talented executives
who are critical to BTG's long-term success. In addition, effective for fiscal
year 2001, the Compensation Committee and the Board have approved employment
agreements with certain key members of management. The purpose of these
agreements is to encourage the retention of important personnel in an industry
environment characterized by consolidation.
Executive compensation consists of three components: base salary,
incentive bonuses; and stock options.
Base Salary
The Compensation Committee reviews base salaries for executive officers
annually, prior to the start of each fiscal year. (Before fiscal year 1997,
compensation was reviewed on a calendar year basis.) Although base salaries are
generally competitive with those of comparable companies, the Compensation
Committee's philosophy is to use bonuses and stock options to provide a
substantial portion of the incentive for performance.
Incentive Bonuses
Incentive bonuses are paid only to the extent that predetermined corporate,
operating unit, and individual goals are achieved, or when other factors warrant
such compensation. In order to qualify for an incentive bonus, each key employee
must negotiate the terms of a BTG Performance Agreement ("BPA") with his or her
supervisor. The BPA of the Chief Executive Officer is a reflection of the steps
required to be satisfied in implementing BTG's then current five-year strategic
plan. Each executive officer's BPA is geared toward the satisfaction of the
portion of the Chief Executive's BPA corresponding to that executive's area of
responsibility, thereby linking incentive bonuses to the short and long-term
goals of the Company. Although the satisfaction of performance objectives serves
as the basis for granting key employee bonuses, the most significant
prerequisite to the payment of incentive compensation to executive officers is
the satisfaction of overall Company financial performance objectives. For fiscal
year 2000, the Compensation Committee, in consultation with the entire Board of
Directors, determined that a total of $645,000 in incentive bonuses would be
paid to the Company's seven senior executive officers.
Stock Options
To encourage growth and shareholder value, stock options are granted
pursuant to the Employee Option Plan to key management personnel who are in a
position to make substantial contributions to the long-term success of the
Company. The Compensation Committee believes that this focuses attention on
managing the Company from the perspective of an owner with an equity interest in
the business. Beginning with fiscal year 2000, the Compensation Committee
increased the exercise price for stock options granted to senior management from
the fair market value as of the date of grant to a sliding scale ranging from
105% to 115% of the fair market value. This change is intended to assure that
option grants compensate officers for optimizing the future performance of the
Company's stock.
Other Compensation
Like all BTG employees, senior executive officers are eligible to
participate in BTG's 401(k) Profit Sharing Plan. In addition, the Compensation
Committee has authorized the Company to reimburse senior executive officers up
to $10,000 for the cost of health care not covered by insurance, and for tax
preparation, financial planning, and legal expenses related to estate planning,
adoptions, and divorce.
Chief Executive Officer Compensation
The Compensation Committee's general approach in setting the Chief
Executive Officer's compensation is to seek to be competitive with other
companies of similar size in BTG's industry with respect to salary, and
10
<PAGE> 14
to tie a significant portion of compensation, represented by bonuses and stock
options, to Company performance.
Dr. Bersoff has served in his current capacity as Chairman of the Board,
President, and Chief Executive Officer since founding BTG in 1982. The
Compensation Committee believes that the growth and success of the Company since
its founding have been directly related to Dr. Bersoff's local, regional, and
national activities as well as his entrepreneurial abilities. Throughout his
term, Dr. Bersoff has served as a leader within BTG as well as within the
greater metropolitan Washington business community. On this basis, the
Compensation Committee believes that Dr. Bersoff's fiscal year 2000 salary of
$428,125 is appropriate. This represents a 3.5% increase over his salary for
fiscal year 1999. This is slightly less than the 3.8% increase in salary from
fiscal 1998 to 1999, and substantially less than the 11.6% increase in salary
from fiscal year 1997 to 1998.
The Compensation Committee believes that the Company's performance in
fiscal 2000 is evidence that Dr. Bersoff's efforts to implement BTG's
organizational restructuring plan, with its focus on BTG's core competencies of
systems engineering and systems integration, have met with success. For example,
the Company's net income for fiscal 2000 reached a record-high $4.4 million, and
represented a 122% increase over net income for fiscal 1999. Fully diluted
earnings per share rose 113% in the same period. Interest cost was reduced 51%
over the cost for fiscal 1999, as the Company significantly reduced its product
reselling business in favor of core services. Revenue from such services
increased by 18% over revenue for fiscal 1999. Overall operating income for
fiscal 2000 rose 64% over fiscal 1999. In the Committee's view, these results
justify Dr. Bersoff's bonus compensation for fiscal year 2000. (Dr. Bersoff
received no bonuses for fiscal 1999, 1998 or 1997.)
Respectfully submitted,
Organization and Compensation
Committee
Donald M. Wallach, Chair
Raymond T. Tate
Dr. Alan G. Merten
------------------------
STOCK PERFORMANCE CHART
The following chart compares the percentage change in the cumulative total
shareholder return on the Company's common stock for the last five fiscal years,
with the cumulative total return on both the NASDAQ Composite Index and a peer
group of companies. The NASDAQ Composite Index is a broad-based,
capitalization-weighted index of all NASDAQ stocks. The peer group consists of
six companies, each of whose business focus is similar to that of BTG. While
none of the selected peers offers a range of products and services precisely
comparable to that of BTG, each is recognized as a provider of information
technology products and services, primarily to the Government and other
Government resellers. The return of each peer group company has been weighted
according to its respective stock market capitalization for the purpose of
arriving at a peer group average. Dividends paid by those companies that pay
dividends are assumed to be reinvested at the end of the ex-dividend month
without any transaction cost. The members of the peer group are as follows:
American Management Systems, Incorporated; CACI International, Inc.; Affiliated
Computer Services, Inc.; Computer Sciences Corporation; Dynamics Research Corp.;
and Titan Corp.
This peer group differs from those used in proxy statements for previous
fiscal years. For example, Dynamics Research Corp. and Titan Corp. replaced GRC
International, Inc. and Nichols Research Corp., which had been included in the
fiscal 1999 peer group, since each of the latter two companies was acquired by
another company and their stocks are no longer publicly traded. For the same
reason, two companies included in the 1998 peer group -- Analysis and
Technology, Inc. and Microdyne Corporation -- were replaced in the fiscal 1999
peer group by Affiliated Computer Services, Inc. and Computer Sciences
Corporation. Similarly,
11
<PAGE> 15
three companies included in the fiscal 1997 and prior peer groups -- Computer
Data Systems, Inc., Logicon, Inc., and Questech, Inc. -- were replaced after
being acquired by other companies, and one company -- Government Technology
Services, Inc. -- was replaced because BTG is no longer in the same line of
business as that company.
Accordingly, BTG has restated the results for the peer groups used in prior
years and has added results for the new peer group as of fiscal year 2000. The
comparison assumes $100 was invested on March 31, 1995 in BTG's common stock, in
the peer group composites, and in the NASDAQ Composite Index, and assumes the
reinvestment of dividends, as previously described.
<TABLE>
<CAPTION>
NASDAQ COMPOSITE
BTG, INC. NEW PEER GROUP 1999 PEER GROUP INDEX
--------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
3/31/95 100.00 100.00 100.00 100.00
3/31/96 127.42 148.29 152.29 135.79
3/31/97 225.81 133.71 131.75 150.95
3/31/98 118.55 221.82 217.57 228.88
3/31/99 72.58 235.82 232.98 309.19
3/31/00 122.58 338.39 308.72 574.68
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's flexible benefits plans for employees had been administered
by Plan Management Administrators, of Milwaukee, Wisconsin. In October 1999,
Ceridian Corporation acquired that company, and now administers BTG's flexible
benefits plans. Ronald Turner, a director of BTG, is also President and Chief
Executive Officer of Ceridian Corporation. In fiscal 2000, the Company paid
Wallach Associates, Inc. $13,000 for professional recruiting services. The
common stock of Wallach Associates, Inc. is wholly owned by Donald M. Wallach, a
director of BTG. With the exception of the foregoing, neither the Company nor
any of its subsidiaries has, since the beginning of fiscal year 2000, been a
party to any transactions or relationships described in Item 404 of SEC
Regulation S-K.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, executive officers, and certain beneficial holders of common stock to
file reports with the SEC on Forms 3, 4, and 5 disclosing their ownership of and
transactions in the Company's stock. To the Company's knowledge, all such filing
requirements have been timely met for fiscal year 2000.
DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Any proposal submitted under SEC Rule 14a-8 for inclusion in next year's
annual meeting proxy statement must be received by BTG by March 30, 2001,
pursuant to the proxy solicitation rules of the SEC. Nothing in this paragraph
shall be deemed to require the Company to include in its proxy statement
relating to
12
<PAGE> 16
next year's annual meeting any shareholder proposal that may be omitted from the
proxy materials pursuant to the applicable regulations of the SEC in effect at
the time such proposal is received. Any other proposal for consideration by
shareholders at next year's annual meeting must be received by BTG by June 8,
2001. If the shareholder fails to comply with the advance notice provisions of
the Company's bylaws, the proposal may not be brought before the meeting.
OTHER BUSINESS TO BE TRANSACTED
As of the date of this proxy statement, the Board of Directors of BTG knows
of no other business which may come before the annual meeting. If any other
business is properly brought before the annual meeting, it is the intention of
the proxy holders to vote or act in accordance with their best judgment with
respect to such matters.
By order of the Board of Directors of
BTG, Inc.
/s/ Edward H. Bersoff
Edward H. Bersoff
Chairman of the Board, President, and
Chief Executive Officer
Fairfax, Virginia
July 28, 2000
COPIES OF THE ANNUAL REPORT TO SHAREHOLDERS FOR THE FISCAL YEAR ENDED MARCH
31, 2000, ACCOMPANY THIS PROXY STATEMENT. SHAREHOLDERS MAY OBTAIN, FREE OF
CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K BY WRITING TO BTG,
INC., ATTENTION: INVESTOR RELATIONS, 3877 FAIRFAX RIDGE ROAD, FAIRFAX, VIRGINIA
22030, BY E-MAIL AT [email protected], OR VIA THE INTERNET AT WWW.BTG.COM.
13
<PAGE> 17
\/ FOLD AND DETACH HERE \/
--------------------------------------------------------------------------------
REVOCABLE PROXY
BTG, INC.
3877 FAIRFAX RIDGE ROAD, FAIRFAX, VIRGINIA 22030
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR USE
ONLY AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 6, 2000, AND
AT ANY ADJOURNMENTS THEREOF.
The undersigned, being a shareholder of BTG, Inc. (the "Company"), hereby
appoints Edward H. Bersoff as proxy and hereby authorizes such proxy to
represent the undersigned at the Annual Meeting of Shareholders of the Company
to be held at the Hyatt Fair Lakes, 12777 Fair Lakes Circle, Fairfax, VA 22033
on September 6, 2000 at 10:00 a.m., Eastern Time, and at any adjournment of said
meeting, and thereat to act with respect to all votes that the undersigned would
be entitled to cast, if then personally present, in accordance with the
following instructions. The undersigned shareholder hereby revokes any proxy or
proxies heretofore given.
1. Proposal to elect the following two nominees for Director, each for a
three-year term expiring at the 2003 Annual Meeting:
<TABLE>
<S> <C>
Edward H. Bersoff Donald M. Wallach
</TABLE>
[ ] FOR all the nominees listed above.
[ ] WITHHOLD AUTHORITY to vote for the following
nominee(s):------------------------------------------------------------
2. Proposal to approve an amendment to the Company's 1995 Employee Stock Option
Plan to increase the number of shares authorized to be issued pursuant to
options granted under the plan from 1,250,000 to 1,750,000.
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
3. Proposal to ratify the appointment of Deloitte & Touche LLP as the Company's
independent auditors for the fiscal year ending March 31, 2001:
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
4. To vote, in its discretion, upon any other business that may properly come
before that Annual Meeting or any adjournment thereof. Except with respect to
procedural matters incident to the conduct of the Meeting, management is not
aware of any other matters which should come before the Annual Meeting:
(Continued and to be signed and dated on reverse side)
<PAGE> 18
\/ FOLD AND DETACH HERE \/
--------------------------------------------------------------------------------
(continued from reverse side)
The undersigned hereby acknowledges receipt of a Notice of Annual Meeting
of Shareholders of BTG, Inc. called for September 6, 2000, and a Proxy Statement
prior to signing this Proxy.
[ ] I PLAN TO ATTEND THE SEPTEMBER 6, 2000 ANNUAL SHAREHOLDERS MEETING
<TABLE>
<S> <C>
Dated: , 2000
-------------------------------------------------------
-----------------------------------------------------------------------------
SIGNATURE
Note: Please sign exactly as your name appears on this proxy. Only one
signature is required where the stock is held jointly. When signing in a
representative capacity, please give title.
</TABLE>
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE SHAREHOLDER. IF NO DIRECTION IS OTHERWISE MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2 AND 3, AT THE DISCRETION OF THE PROXY. THIS PROXY MAY BE
REVOKED AT ANY TIME BEFORE IT IS VOTED BY DELIVERING TO THE SECRETARY OF THE
COMPANY EITHER A WRITTEN REVOCATION OF THE PROXY OR A DULY EXECUTED PROXY
BEARING A LATER DATE, OR BY APPEARING AT THE ANNUAL MEETING AND VOTING IN
PERSON.
