SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
[X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-12
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CACI International Inc
(Name of Registrant as Specified in its Charter)
----------
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[X] No fee required.
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
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[CACI LOGO]
October 17, 2003
Dear Fellow Stockholder:
I cordially invite you to attend your Company's 2003 Annual Meeting of
Stockholders on November 20, 2003, at 9:30 a.m., Eastern Standard Time. The
meeting will be held at the Fairview Park Marriott, 3111 Fairview Park Drive,
Falls Church, Virginia 22042.
Matters to be considered and acted on at the meeting include the election of
directors, and the ratification of the appointment of independent auditors.
Detailed information concerning these matters is set forth in the attached
Notice of Annual Meeting of Stockholders and Proxy Statement.
As a stockholder, your vote is important. I encourage you to execute and return
your proxy promptly whether or not you plan to attend so that we may have as
many shares as possible represented at the meeting. Returning your completed
proxy will not prevent you from voting in person at the meeting if you wish to
do so.
Thank you for your cooperation and continued support and interest in CACI
International Inc.
Sincerely,
/s/ J. P. LONDON
J. P. LONDON
Chairman of the Board, President and
Chief Executive Officer
IMPORTANT: Even if you plan to attend the meeting, please complete, sign, date,
and return promptly the enclosed proxy in the envelope provided to ensure that
your vote will be counted. You may vote in person if you so desire, even if you
previously have sent in your proxy. Please note that if you execute multiple
proxies, the last proxy you execute revokes all previous ones.
If your shares are held in the name of a bank, brokerage firm or other nominee,
please sign, date, and return the enclosed voting instruction form or proxy card
in the envelope provided or follow any telephone or internet voting instructions
that may be enclosed.
CACI International Inc
1100 North Glebe Road
Arlington, Virginia 22201
---------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held November 20, 2003
---------------------------
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of CACI International Inc (the "Company") will be held on Thursday,
November 20, 2003, at 9:30 a.m., Eastern Standard Time, at the Fairview Park
Marriott, 3111 Fairview Park Drive, Falls Church, Virginia 22042 for the
following purposes:
1. To elect the Company's Board of Directors.
2. To ratify the appointment of Ernst & Young LLP, as the Company's
auditors for the current fiscal year.
3. To transact such other business as may otherwise properly come before
the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on September 24, 2003, as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting.
A list of the stockholders entitled to vote at the Annual Meeting will be made
available during regular business hours at CACI International Inc, 14151 Park
Meadow Drive, Chantilly, Virginia 20151 from November 6, 2003 through November
20, 2003, for inspection by any stockholder for any purpose germane to the
meeting.
By Order of the Board of Directors
/s/ JEFFREY PL. ELEFANTE
JEFFREY P. ELEFANTE
Secretary
Arlington, Virginia
Dated: October 17, 2003
IMPORTANT: Even if you plan to attend the meeting, please complete, sign, date,
and return promptly the enclosed proxy in the envelope provided to ensure that
your vote will be counted. You may vote in person if you so desire, even if you
previously have sent in your proxy. Please note that if you execute multiple
proxies, the last proxy you execute revokes all previous ones.
If your shares are held in the name of a bank, brokerage firm or other nominee,
please sign, date, and return the enclosed voting instruction form or proxy card
in the envelope provided or follow any telephone or internet voting instructions
that may be enclosed.
CACI International Inc
1100 North Glebe Road
Arlington, Virginia 22201
---------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
-------------------------------------
This Proxy Statement is being furnished in connection with the solicitation of
proxies by the Board of Directors of CACI International Inc (the "Company") to
be used at the Annual Meeting of Stockholders (the "Annual Meeting") of the
Company to be held on November 20, 2003. This Proxy Statement is being mailed on
or about October 17, 2003. The presence of a stockholder at the Annual Meeting
or any adjournment thereof will not automatically revoke such stockholder's
proxy. However, any stockholder furnishing a proxy has the power to revoke it by
furnishing written notice to the Secretary of the Company, by delivering to the
Company a proxy bearing a later date, or by voting in person at the Annual
Meeting. A proxy card is enclosed for your use in connection with the Annual
Meeting. The shares represented by each properly signed and returned proxy will
be voted in accordance with the instructions marked thereon or, in the absence
of instructions, the proxy will be voted:
FOR the Board of Directors' nominees for election to the Company's Board of
Directors; and
FOR the ratification of the appointment of Ernst & Young LLP as independent
auditors.
The Board does not expect that any matters other than those set forth in the
Notice of the Annual Meeting will be brought before the Annual Meeting. If any
other matters properly come before the Annual Meeting, the persons named in the
accompanying proxy will vote the shares represented by all properly executed
proxies on such matters in accordance with their judgment.
The close of business on September 24, 2003, has been fixed as the record date
for the determination of the stockholders entitled to notice of and to vote at
the Annual Meeting. At the close of business on September 24, 2003, the Company
had 29,955,600 shares of Common Stock ("Common Stock") outstanding.
ELECTION OF DIRECTORS
Eleven Directors are to be elected to hold office until the next Annual Meeting
or until their respective successors are elected. If a quorum is present, the
affirmative vote of the holders of a majority of the shares of stock entitled to
vote and present in person, or represented by proxy, at the Annual Meeting will
be required to elect each of the nominees.
Unless authority is withheld or a vote is abstained on the proxy card, the
persons named in the accompanying proxy will vote the shares of Common Stock
represented by the proxy FOR the election of the nominees listed below.
Consistent with the Company's Charter and pursuant to corporation law of the
State of Delaware, the total votes received, including abstentions, will be
counted for purposes of determining a quorum. Broker non-votes will be counted
towards determining a quorum but will not be counted as voting for any
candidate. Ten of the nominees are currently members of the Board of Directors
(the "Board"). The Company has no reason to believe that any of the nominees
will be unable or unwilling to serve. In the event that any nominee is not
available or should decline to serve, the persons named in the proxy will vote
for the others and will vote for such other person(s) as they, in their
discretion, may decide.
1
NOMINEES
Listed below are the nominees for Director, with information showing the age of
each, the year each was first elected as a Director of the Company, and the
business affiliation of each. Ten of the eleven nominees are outside Directors.
Outside Directors
Michael J. Bayer, 56. Director of the Company since 2002.
Mr. Bayer brings to the Company's Board a wealth of knowledge and insight into
the Department of Defense (DoD) and the military departments from his years of
high level service to numerous Administrations. Since 1992, Mr. Bayer has been a
consultant engaged in enterprise strategic planning and mergers and
acquisitions. Mr. Bayer served as a member of the Board of EG&G Inc., an
architectural and engineering company, until its sale to URS Corporation in
August, 2002. Mr. Bayer is currently a member of the Naval War College Board of
Visitors, the Sandia National Laboratory's National Security Advisory Panel, the
U.S. Naval War College Board of Advisors, and DoD's Science Board. Mr. Bayer is
currently Vice Chairman of DoD's Business Board and Chairman of the Secretary of
the Air Force Advisory Group. Mr. Bayer previously served as Counselor to
President Bush's Commission on Aviation Security and Terrorism. From 1986 to
1989, Mr. Bayer was a member of the Board of Visitors of the United States
Military Academy. From 1990 to 1992, Mr. Bayer served as a member of the Army
Science Board, and as its Chairman from 1998 to 2002. Mr. Bayer has also served
on a number of non-partisan task forces to improve the management and efficiency
of the DoD.
Peter A. Derow, 63. Director of the Company since 2000.
Mr. Derow brings to the Company's Board his experience as a senior level
executive of several leading media companies and his experience in serving on
the boards of many companies. From 1988 to 1997, Mr. Derow was President and
Chief Executive Officer of Institutional Investor, Inc., a publisher of
information serving the financial services industry. Mr. Derow is also director
of 101 Communications, LLC, a publisher serving the information technology
industry; Globalspec Inc., a site serving engineers; and MediaMap, Inc., a site
serving journalists and the public relations industry; and Moore Medical, Inc.,
a distributor of medical products.
Richard L. Leatherwood, 64. Director of the Company since 1996.
Mr. Leatherwood brings to the Company's Board senior level executive experience
with publicly held corporations. Mr. Leatherwood's experience includes business
unit management for a Fortune 500 transportation company. From 1986 to 1991, Mr.
Leatherwood was President and Chief Executive Officer of CSX Equipment Group. In
1985, Mr. Leatherwood was Vice Chairman of Chessie System Railroads and Seaboard
System Railroad. From 1983 to1985, Mr. Leatherwood was President and Chief
Executive Officer of Texas Gas Resources Group. From 1977 to 1983, Mr.
Leatherwood held positions with Texas Gas Resources Corporation, a conglomerate
of transportation and energy businesses with both revenues and assets in excess
of $2.0 billion: 1982 to 1983, Executive Vice President; 1980 to 1982, Senior
Vice President and Chief Financial Officer; 1979 to 1980, Vice President and
Assistant to the President; and 1977 to 1979, Vice President, Planning and
Systems, Trucking Division. Mr. Leatherwood is currently a director of Dominion
Resources, Inc., an integrated gas and electric company. Mr. Leatherwood was
formerly a director of Dominion Energy, Inc., MNC Financial, Inc., CSX
Corporation, and Virginia Electric and Power Company, Inc.
Barbara A. McNamara, 61. Director Nominee.
Ms. McNamara will bring to the Company's Board a wealth of knowledge and insight
into the intelligence community including the National Security Agency (NSA),
and into the interplay between U.S. intelligence agencies and its foreign
partners. From July 2000 to August 2003, Ms. McNamara served as Special United
States Liaison Officer, London, England where she was responsible to the
Director, NSA for representing NSA in its relationships with United Kingdom (UK)
authorities including the Government Communications Headquarters (GCHQ), the
UK's cryptologic organization. From 1993 to 2000, Ms. McNamara held executive
level positions at the NSA: 1997 to 2000, Deputy Director; 1995 to 1997, Deputy
Director of Operations, NSA/Central Security
2
Service (CSS); 1994 to 1995, Executive Director, NSA/CSS; and 1993 to 1994,
NSA/CSS Representative to the Department of Defense.
Arthur L. Money, 63. Director of the Company since 2002.
Mr. Money brings to the Company's Board vast experience as a senior official at
the Department of Defense, and as a senior level technology executive in the
private sector with a background in defense electronics and the intelligence
industry. From 1999 to 2001, Mr. Money served as Assistant Secretary of Defense
("ASD") for Command, Control, Communications and Intelligence. From 1998 to
2001, Mr. Money was DoD Chief Information Officer and from 1998 to 1999 he was
the Senior Civilian Official, Office of the ASD. From 1996 to 1998 Mr. Money was
Assistant Secretary of the Air Force for Research Development and Acquisition
and Chief Information Officer for the Air Force. In 1995, Mr. Money was Vice
President and Deputy General Manager, TRW Avionics and Surveillance Group. From
1972 to 1994, Mr. Money held positions with ESL Inc. (a subsidiary of TRW): 1990
to 1994, President; 1988 to 1989, Vice President, Advanced Programs and
Development; 1986 to 1988, Vice President, Studies and Analysis Division; and
1972 to 1980, Engineer, Manager and Director of various units. From 1962 to
1972, Mr. Money was an Engineer at Lockheed Missiles and Space Company.
Dr. Warren R. Phillips, 62. Director of the Company since 1974.
In addition to his experience as a senior level technology executive, Dr.
Phillips brings to the Company's Board considerable expertise in the areas of
information technology policy, public sector finance, and the provision of
computer services. The Company's Board also benefits from Dr. Phillips'
familiarity with the U.S. intelligence community and his understanding of
international business issues. Dr. Phillips serves as the financial manager for
AMBO, a $1.5 billion (CAPEX) crude oil pipeline developer for Caspian oil flows
to the west. From 1993 to 2001, Dr. Phillips was Executive Vice Chairman and
Chief Financial Officer of Maryland Moscow, Inc., a 501(c)(3) educational and
training venture that was involved in over $50 million in financial training to
the newly evolving countries of the former Soviet Union. Dr. Philips helped
train and provided advice in developing financial systems (bank, stock exchange,
pension, insurance, and government) in most of those countries. Between 1974 and
2003, Dr. Phillips was Professor of Government and Politics at the University of
Maryland. During that time he has served in a number of administrative positions
including Vice President for Academics at UMBC, and Assistant Vice President for
Administration for the University System where he managed system wide
information technology, budgeting, and internal audit.
Charles P. Revoile, 69. Director of the Company since 1993.
As an attorney and former senior level executive, Mr. Revoile brings to the
Company's Board his vast experience in the governance of publicly held
corporations and in contracting with the Federal Government. In addition, the
Company's Board values Mr. Revoile's perspective in financial and management
disciplines as an active private investor. From 1985 to 1992, Mr. Revoile served
as Senior Vice President, General Counsel and Secretary of CACI International
Inc. From 1971 to 1985, Mr. Revoile was Vice President and General Counsel of
Stanwick Corporation. Currently, Mr. Revoile is a legal and business consultant
and an independent investor.
Richard P. Sullivan, 70. Director of the Company since 1996.
Mr. Sullivan brings to the Company's Board his experience as a former CEO of a
Fortune 500 company, his expertise in mergers and acquisitions, and his
background in investment banking. The Company's Board also benefits from Mr.
Sullivan's insights as a seasoned executive with company directorships in
diverse industries. From 1997 to 2003, Mr. Sullivan has been President and Chief
Executive Officer of Cargill Development Corporation, a machine designer. From
1992 to 1997, Mr. Sullivan was Chairman and Chief Executive Officer of The J.L.
Wickham Co., Inc., a machine builder. Mr. Sullivan was formerly a director of
Equitable Bancorporation, a bank holding company; Monumental Corporation, an
insurance company; Noxell Corporation, a cosmetic manufacturer; PRC, Inc., an
information technology company; PharmaKinetics Labs, Inc., a drug testing
company; and the National Association of Manufacturers Trade Association.
3
John M. Toups, 77. Director of the Company since 1993.
Mr. Toups brings to the Company's Board his experience as a senior level
executive of a major information technology contractor, banking knowledge, and
company directorships in diverse industries, including a Fortune 500
corporation. Mr. Toups is a director of Halifax Corporation, a technical
services company; NVR, Inc., a home builder; and GTSI Corp., a provider of
integrated information technology solutions. Mr. Toups is also a trustee of
INOVA Health System, a not-for-profit hospital system, and a director of the
Professional Services Council, an association of providers of services to
governments. From 1977 to 1987, Mr. Toups was Chief Executive Officer of PRC,
Inc., an information technology service company. Mr. Toups was formerly a
director of PRC, Inc.; Emhart Corporation, an industrial products company;
Washington Bancorp, a bank holding company; Washington Gas Light Company, a
public utility serving natural gas; Guest Services, a food services company; and
Thermatrix, an environmental technology company.
Larry D. Welch, 69. Director of the Company since 2002.
As a former Chief of Staff of the Air Force and Commander in Chief of the
Strategic Air Command, General Larry D. Welch, USAF (Retired) brings to the
Company's Board valuable insights into the DoD, space, and intelligence. Since
1991, General Welch has been President and Chief Executive Officer of The
Institute for Defense Analyses, a federally chartered research center providing
operations and technical analysis, and management and information systems
analysis for the Department of Defense and other U.S. Government agencies. Prior
to retiring from the United States Air Force in 1990, General Welch served as
follows: 1986 to 1990, 12th Chief of Staff; 1985 to 1986, Commander in Chief,
Strategic Air Command; 1984 to 1985, Vice Chief of Staff; 1982 to 1984, Deputy
Chief of Staff, Programs and Resources; and 1981 to 1982, Commander, Air Force
Central Command.
Management Director
Dr. J. P. London, 66. Chairman of the Board, President and Chief Executive
Officer.
Under Dr. London's leadership, CACI has grown from a small professional services
consulting firm to become a pacesetter in information technology and
communications solutions markets. CACI operations today are worldwide and global
in nature. Dr. London joined CACI in 1972. Dr. London was elected President and
Chief Executive Officer in 1984 and has been a Director since 1981. From 1982 to
1984, Dr. London was President of the Company's largest operating division. From
1979 to 1982, Dr. London was one of the Company's Executive Vice Presidents.
From 1977 to 1979, Dr. London served as a Senior Vice President; from 1975 to
1977, he was a Vice President. Dr. London is currently a director and member of
the Executive Committee of the Armed Forces Communications and Electronics
Association and was formerly a member of the Senior Advisory Board of the
Northern Virginia Technology Council. Dr. London holds a B.S. in Engineering
from the United States Naval Academy, a M.S. in Operations Research from the
United States Naval Postgraduate School, and a Doctorate in Business
Administration, conveyed with distinction, from the George Washington University
School of Business and Public Management. Early in his career, Dr. London served
as a Naval Aviator. Dr. London now holds the rank of Captain, U.S. Navy Reserve
(Retired). He has been recognized by the Human Resources Leadership Awards of
Greater Washington with the establishment of its Ethics in Business Award in his
name. In 2003, Dr. London was presented with the CEO of the Year Award by the
George Washington University Executive MBA Program; he was named Ernst & Young's
Entrepreneur of the Year for Government IT Services; and he received the John W.
Dixon award from Association of the United States Army for his outstanding
contributions to America's defense.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board held eight meetings during fiscal year 2003, which ended June 30,
2003. Each Director, while acting as Director, attended at least seventy-five
percent (75%) of the total number of meetings held by the Board and committees
of the Board on which he served.
4
The Board had a Compensation Committee, an Executive Committee, an Audit
Committee, an Investor Relations Committee, a Board Configuration Committee,(1)
and a Technical Advisory Panel during fiscal year 2003.
During fiscal year 2003, the Compensation Committee consisted of Directors
Bayer, Leatherwood, Revoile, Salvatori,(2) Sullivan, and Toups. Director Revoile
served as the Committee Chairman. The Compensation Committee administers the
Company's 1996 Stock Incentive Plan, Management Stock Purchase Plan, Director
Stock Purchase Plan, and Employee Stock Purchase Plan, determines the benefits
to be granted to key employees thereunder, is responsible for determining and
making recommendations to the Board regarding compensation and benefits to be
paid to Executive Officers of the Company, and maintains oversight of the
Company's Affirmative Action, and Small, Disadvantaged and Minority
Subcontracting Plans. The Compensation Committee met four times during fiscal
year 2003. Director Revoile recuses himself from the voting on all specific
officer compensation matters, including action on all IRS approved compensation
plans. A report of the Compensation Committee regarding executive compensation
appears below in this Proxy Statement.
During fiscal year 2003, the Executive Committee was composed of Directors
London, Phillips, Revoile, Snyder, and Toups. Director London served as the
Committee Chairman. The Executive Committee is responsible for providing Board
input and authorization necessary in the interim between full Board meetings,
and for identifying those items which merit consideration or action by the
entire Board. The Executive Committee did not meet during fiscal year 2003.
During fiscal year 2003, the Audit Committee consisted of Directors Derow,
Leatherwood, Money, Phillips, Ricart,(3) and Snyder. Director Phillips served as
the Committee Chairman. The Audit Committee is responsible for overseeing and
reviewing the Company's financial information that will be provided to
stockholders and others, the system of internal controls established by
management and the Board, and the annual audit conducted by the independent
accountants. The Audit Committee met six times during fiscal year 2003. The
Charter of the Audit Committee is attached to this Proxy Statement as Appendix A
and is hereby incorporated by reference. A report of the Audit Committee appears
below in this Proxy Statement.
During fiscal year 2003, the Investor Relations Committee consisted of Directors
Derow, Revoile, Snyder, Sullivan, and Welch. Director Snyder served as the
Committee Chairman. The Investor Relations Committee is responsible for
monitoring the strategic direction and overall status of the Company's investor
relations program and associated activities. The Investor Relations Committee
met four times during fiscal year 2003.
During fiscal year 2003, the Board Configuration or Nominating Committee
consisted of Directors Phillips, Revoile, Snyder, and Toups.(4) Dr. Phillips
served as the Nominating Committee Chairman. The Nominating Committee is
responsible for identifying and selecting individuals to be nominated for
election to the Board, and for recommending the number of Directors to be
elected each year (within the bounds established by the Company's By-Laws). The
Committee met three times during fiscal year 2003.
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(1) The Board Configuration Committee was renamed the Nominating Committee at
the Organizational Meeting of the Board of Directors on November 21, 2002.
(2) Vincent Salvatori served on the Compensation Committee until the
Organizational Meeting of the Board of Directors on November 21, 2002, when
he left the Committee.
(3) Glenn Ricart served on the Audit Committee until the Organizational Meeting
of the Board of Directors on November 21, 2002.
(4) John Toups began serving on the Nominating Committee at the Organizational
Meeting of the Board of Directors on November 21, 2002.
5
During fiscal year 2003, the Company's Technology Advisory Panel ("Panel")
consisted of Directors Bayer, London, Money, Phillips, Ricart, and Salvatori.(1)
Dr. London served as the Chairman of the Panel. The Panel supported the
Company's strategic planning initiatives by assessing marketplace occurrences
and technology developments including those related to networking, homeland
security, and intelligence. The Panel met four times during fiscal year 2003.
DIRECTOR COMPENSATION
Compensation of Directors
During fiscal year 2003, each Director not employed by the Company or any of its
subsidiaries was compensated according to the following arrangements for his
participation in meetings of the full Board and the Committee(s) of which he was
a member:
o Full Board - $25,000 annual retainer for up to four meetings per year.
Any additional in-person meetings of any length, $1,000. Additional
phone meetings of any length, $500 per meeting. In fiscal year 2003,
each Director was granted 5,000 stock options at the closing price of
the Common Stock on the date of the grant. Under the Company's
Director Stock Purchase Plan Directors may also elect to receive
Common Stock in lieu of fees, with such election to be made prior to
the commencement of the effective calendar year, at a price equal to
the average price of the Common Stock during the ten days immediately
preceding any payment subject to such election.
o Audit Committee - $5,000 for up to four meetings per year. Any
additional in-person meetings of any length, $1,000 per meeting.
Additional phone meetings of any length, $500 per meeting. The
Chairman of this Committee receives an additional $4,000.
o Compensation Committee - $5,000 for up to four meetings per year. Any
additional in-person meetings of any length, $1,000 per meeting.
Additional phone meetings of any length, $500 per meeting. The
Chairman of this Committee receives an additional $4,000.
o Executive Committee - $5,000 for up to four meetings per year. Any
additional in-person meetings of any length, $1,000 per meeting.
Additional phone meetings of any length, $500 per meeting.
o Investor Relations Committee - $5,000 for up to four meetings per
year. Any additional in-person meetings of any length, $1,000 per
meeting. Additional phone meetings of any length, $500 per meeting.
The Chairman of this Committee receives an additional $2,000.
o Technical Advisory Panel - $5,000 for up to four meetings per year.
Any additional in-person meetings of any length, $1,000 per meeting.
Additional phone meetings of any length, $500 per meeting. Dr. London
served as the Chairman of this Panel and did not receive any
compensation for his services.
Directors Phillips, Snyder, and Revoile participated in two Board Configuration
Committee meetings and Directors Phillips, Revoile, Snyder, and Toups
participated in one Nominating Committee meeting. Compensation for the Board
Configuration/Nominating Committee meetings was $1,500 per meeting. The Chairman
of this Committee received an additional one-time fee of $1,500.
Dr. London received no separate compensation for his services as Director.
Directors other than Dr. London were reimbursed for expenses associated with
attending meetings of the Board and its Committee.
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(1) Glenn Ricart and Vincent Salvatori served on the Technology Advisory Panel
until the Organizational Meeting of the Board of Directors on November 21,
2002.
6
Director Phillips received additional compensation in the amount of $9,500 for
additional work performed in connection with several committees.
During fiscal year 2004, Directors who are not employed by the Company or any of
its subsidiaries will be compensated on the same basis as the arrangements
described above. In addition, returning non-employee Directors will receive an
annual grant of 3,000 shares of Common Stock. New non-employee Directors will
receive a one time grant of 5,000 shares.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
As of August 31, 2003, there was no person known by the Company to be the
beneficial owner of more than five percent (5%) of the outstanding Common Stock.
The following table provides information as of August 31, 2003, with respect to
beneficial ownership for each Executive Officer, each present Director, each
Director Nominee, and for all Executive Officers and Directors of the Company as
a group.
Amount of Beneficial
Name of Beneficial Owner Ownership Percent of
and Position of Common Stock(1) Common Stock(2)
--------------------------------------------------------------------------------
Dr. J. P. London
Chairman, President, 792,334 (3) 2.75%
CEO and Nominee
L. Kenneth Johnson 277,6264 0.96%
President, U.S. Operations,
CACI, INC.-FEDERAL
Stephen L. Waechter 139,000 (5) 0.48%
Executive Vice President, Chief
Financial Officer, Treasurer, and
Director of Business Services
Gregory R. Bradford 169,000 (6) 0.59%
Chief Executive, CACI Limited,
and President Information Solutions
Jeffrey P. Elefante 52,600 (7) 0.18%
Executive Vice President, General
Counsel, Secretary, and Director
of Contract and Administrative Services
Michael J. Bayer 5,464 (8) *(9)
Director and Nominee
Peter A. Derow 21,000 (10) *
Director and Nominee
Richard L. Leatherwood 30,000 (11) 0.10%
Director and Nominee
7
Arthur L. Money 5,000 (8) *
Director and Nominee
Dr. Warren R. Phillips 9,662 (12) *
Director and Nominee
Charles P. Revoile 45,174 (13) 0.16%
Director and Nominee
William B. Snyder 23,000 (13) *
Director
Richard P. Sullivan 13,000 (12) *
Director and Nominee
John M. Toups 19,000 (13) *
Director and Nominee
Larry D. Welch 5,000 (8) *
Director and Nominee
All Executive Officers and 1,606,860 5.58%
Directors as a Group
(15 in number)
--------------------------------------------------------------------------------
(1) All options exercisable currently or within the next six months are treated
as exercised for shares of Common Stock.
(2) Based on 28,449,568 shares of Common Stock outstanding as of the September
24, 2003 record date.
(3) Includes 383,334 shares currently exercisable.
(4) Includes 117,467 shares currently exercisable, and 150,000 shares which are
exercisable within the next six months.
(5) Includes 132,000 shares currently exercisable.
(6) Includes 119,000 shares currently exercisable, and 20,000 shares which are
exercisable within the next six months.
(7) Includes 44,000 shares currently exercisable.
(8) Includes 3,750 shares currently exercisable, and 1,250 shares which are
exercisable within the next six months.
(9) The asterisk (*) denotes that the individual holds less than one tenth of
one percent (0.1%) of outstanding Common Stock.
(10) Includes 9,750 shares currently exercisable, and 1,250 shares which are
exercisable within the next six moths.
(11) Includes 4,000 shares owned by Mr. Leatherwood's wife, 11,750 shares
currently exercisable, and 1,250 shares which are exercisable within the
next six months.
(12) Includes 7,750 shares currently exercisable, and 1,250 shares which are
exercisable within the next six months.
(13) Includes 11,750 shares currently exercisable, and 1,250 shares which are
exercisable within the next six months.
--------------------------------------------------------------------------------
Section 16(a) Reporting
Section 16(a) of the Securities and Exchange Act of 1934 requires the Company's
Officers and Directors and persons who own more than ten percent (10%) of a
registered class of the Company's equity securities to file reports of ownership
and changes in ownership with the Securities and Exchange Commission ("SEC").
Such
8
Officers, Directors and stockholders are required by SEC regulations to furnish
the Company with copies of all such reports that they file.
Based solely on a review of copies of reports filed with the SEC and of written
representations by certain Officers and Directors, all persons subject to the
reporting requirements of Section 16(a) filed the required reports on a timely
basis.
EXECUTIVE OFFICERS
As of June 30, 2003, the Executive Officers of the Company were Dr. J. P.
London, Chairman of the Board, President and Chief Executive Officer, and the
following four persons indicated in the table below.
Positions and Offices
Name, Age With the Company Principal Occupations, Past Five Years
----------------------------------------------------------------------------------------
L. Kenneth President, U.S. Operations, President, CACI, Inc., 1999-2001, until
Johnson, 56 CACI, INC.-FEDERAL its merger into CACI, INC.-FEDERAL.
Consultant, Federal Sources, Inc.,
1998-1999. President and Chief Executive
Officer, Tracor Enterprise Solutions,
1996-1997. Senior Vice President,
Cordant, Inc., 1995-1996.
Stephen L. Executive Vice President, Executive Vice President ("EVP"), Chief
Waechter, 53 Chief Financial Officer, Financial Officer ("CFO"), Treasurer and
Treasurer and Director Director of Business Services for the
of Business Services Company since 1999. EVP, CFO, Treasurer,
GTSI Corp, 1997-1999. Senior Vice
President, CFO, Treasurer, The Vincam
Group, Inc., 1996-1997. Senior Vice
President, CFO, Treasurer, Applied
Bioscience Int'l Inc., 1993-1996. Vice
President Finance, General Electric
Information Services, 1974-1993. Mr.
Waechter is a director of Strategic
Diagnostics, Inc., a provider of test
products for the food safety and water
quality markets.
Gregory R. Chief Executive, CACI Chief Executive, CACI Limited since
Bradford, 54 Limited, and President, 2000, Managing Director, 1985-2000;
Information Solutions President of Information Solutions
(formerly the Company's Marketing
Systems Group) since 1994; Executive
Vice President, 1987-1993; Senior Vice
President, 1986-1987; Vice President,
1983-1986; European Legal Counsel,
1983-1985; Director of Contracts,
1979-1983.
Jeffrey P. Executive Vice President, Executive Vice President of the Company
Elefante, 57 General Counsel, Secretary, since 1996; General Counsel, Secretary,
and Director of Contract and Director of Contract Services of the
and Administrative Services Company since 1992; Director of
Administrative Services of the Company
since 1998; Senior Vice President,
1992-1996.
9
EXECUTIVE OFFICER COMPENSATION
Compensation of Executive Officers
The following table summarizes the compensation of the named Executive Officers
for the fiscal year ended June 30, 2003, compared with the two previous fiscal
years. Annual compensation includes amounts awarded to, earned by or paid to Dr.
J. P. London, the Company's Chairman of the Board, President and Chief Executive
Officer, and the four other named Executive Officers, including amounts deferred
at an Executive Officer's election.
Summary of Executive Officer Compensation
Long Term Compensation
------------------------------
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Annual Restricted All
Compen- Stock LTIP Other
Name and Principal Fiscal Salary Bonus sation Award Options Payouts Compensation
Position Year $ $ $ $(1) # $(2) $(3)
-----------------------------------------------------------------------------------------------------------------
J. P. London 2003 444,600 1,356,572 - 461,535 70,000 N/A 196,322
Chairman of the 2002 400,000 1,252,242 - - 120,000 N/A 163,018
Board, President 2001 368,000 726,225 - - - N/A 146,898
and CEO
L. K. Johnson 2003 322,500 970,306 - 160,693 50,000 N/A 77,939
President, US 2002 307,000 843,911 - - 100,800 N/A 51,669
Operations, 2001 290,000 490,704 - - - N/A 79,805
CACI, INC.-
FEDERAL
S. L. Waechter 2003 265,000 618,107 - 167,137 36,000 N/A 63,054
EVP, CFO, 2002 256,000 520,537 - - 65,000 N/A 51,669
Treasurer, and 2001 240,000 379,873 - - - N/A 35,126
Director of
Business Services
G. R. Bradford 2003 222,285(4) 125,852 61,859(5) - 27,000 N/A 75,955
Chief Executive 2002 200,732(4) 275,826 55,580(5) - 110,000 N/A 72,311
CACI Limited, 2001 190,880(4) 413,869 51,500(5) - 35,000 N/A 67,291
and President,
Information
Solutions
J. P. Elefante 2003 206,000 222,035 - 43,522 15,000 N/A 45,156
EVP, General 2002 199,000 198,668 - - 12,000 N/A 43,143
Counsel, Secretary 2001 189,000 169,120 - - - N/A 40,797
and Director of
Contract and
Admin. Services
----------
(1) Restricted Stock Awards were provided pursuant to the Management Stock
Purchase Plan.
(2) "LTIP" stands for Long-Term Incentive Plan. The Company does not provide a
LTIP.
(3) All other compensation includes vacation earned for the fiscal year,
amounts contributed under the Company's qualified and non-qualified pension
plans, and, in the case of Messrs. London, Johnson, and Bradford, amounts
paid by the Company for leased or owned automobiles.
(4) Mr. Bradford's compensation is paid partly in British pounds sterling and
is reported in this table in U.S. dollars at the average exchange rate in
effect during the fiscal year. This currency conversion of pounds sterling
to U.S. dollars causes Mr. Bradford's reported salary and bonus to
fluctuate from year to year.
10
(5) Reimbursement was paid to Mr. Bradford (a U.S. Citizen) for tuition costs
for Mr. Bradford's children while residing in the United Kingdom.
11
Stock Options
The table below contains information relating to stock options granted to the
Executive Officers named above.
Option Grants During Fiscal Year 2003
Potential Realizable Value
at Assumed Annual Rates of
Stock Price Appreciation for
Individual Grants Option Term (column [e])
------------------------------------------------------------- ----------------------------
(a) (b) (c) (d) (e) (f) (g)
% of Total
Options
Granted to
Options Employees Exercise
Granted in Fiscal Price Expiration
Name (#)(1) Year ($/Sh)(2) Date 5% ($)(3) 10% ($)(3)
---- ------- ---------- -------- ---------- --------- ----------
J. P. London 70,000 13.8% 36.13 6/30/12 1,590,538 4,030,734
L. K. Johnson 50,000 9.9% 36.13 6/30/12 1,136,098 2,879,095
S. L. Waechter 36,000 7.1% 36.13 6/30/12 817,990 2,072,949
G. R. Bradford 27,000 5.3% 36.13 6/30/12 613,493 1,554,711
J. P. Elefante 15,000 3.0% 36.13 6/30/12 340,829 863,729
----------
(1) Option grants are permitted under the Company's 1996 Stock Incentive Plan
(the "1996 Plan") described in the section of this Proxy Statement entitled
"1996 Stock Incentive Plan". Specific grants are determined by the
Compensation Committee of the Board, subject to the annual limitations
permitted under Section 422A of the Internal Revenue Code with respect to
Incentive Stock Options. The shares granted are in the form of
Non-Qualified Stock Options. The shares granted typically are exercisable
over a three-year period. The grants are exercisable for a period of ten
years, so long as the Grantee remains an employee of the Company. The
options will lapse if the Grantee leaves the Company before the exercise
date, if the Grantee fails to exercise the options within 60 days of
leaving the Company after the exercise date, or if the Grantee fails to
exercise the options prior to the expiration date.
(2) The exercise price of options granted under the 1996 Plan is equal to the
closing price of the Common Stock on the date of grant.
(3) The potential realizable value of the options assumes option exercise ten
years from the date of grant and is calculated based upon the assumption
that the market price of the underlying shares will increase over the
ten-year period at the assumed annual rates, compounded annually. The
assumed annual rates in this column are suggested by the SEC. The actual
pre-tax value, if any, that an executive may realize will depend on the
excess of the Common Stock price over the grant price (listed in this table
as the "exercise price") on the date the option is exercised, so that there
is no assurance the value realized by an individual will be at or near the
value estimated in this column.
12
Aggregated Option Exercises in Fiscal Year 2003, and Fiscal Year-End Option Values
-----------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Shares Number of Value of Unexercised
Acquired Unexercised Options at In-the-Money Options at
On Value June 30, 2003(#) June 30, 2003($)
Exercise Realized --------------------------- ------------------------------------
Name (#) ($)(1) Exercisable Unexercisable Exercisable($) Unexercisable($)(2)
---- -------- --------- ----------- ------------- -------------- -------------------
J. P. London 0 0 300,000 160,000 7,065,000 1,374,400
L. K. Johnson 85,000 2,591,964 135,800 290,000 2,300,452 5,135,900
S. L. Waechter 30,000 937,590 105,000 97,400 2,211,300 954,520
G. R. Bradford 0 0 70,000 167,000 1,264,200 2,964,250
J. P. Elefante 0 0 26,000 41,000 569,400 547,760
----------
(1) Market value of underlying securities at exercise, minus the exercise
price.
(2) The value of unexercised in-the-money options is calculated by subtracting
the exercise price from the market value of the Company's stock at fiscal
year-end (which was $34.30 per share, based on the closing price of the
Common Stock as reported on the NYSE National Market on June 30, 2003).
Employment Agreements
The Company has entered into agreements with certain Executive Officers for the
purpose of providing those officers with a degree of security that will enhance
the chances that they will remain with the Company, even when there is a planned
or threatened change of control of the Company. Generally, the term of each
agreement is one year with automatic one-year extensions each year thereafter.
Each Executive Officer who is a party to one of these agreements may be
terminated by the Company without payment of any kind in the event of death,
disability or for cause as determined by the Board. In the event of termination
for any other reason, the agreements provide that the Company will pay a
severance payment equal to a number of months of the executive's base salary. In
the event of a termination, or resignation for "good reason", within one year of
the effective date of a change of control, as defined in the agreements, the
agreements provide that the Company will pay a termination payment equal to a
number of months of the executive's base salary. The agreements restrict each
executive's rights to compete with the Company or to offer employment to Company
employees following termination. Additional information about each of the
agreements is provided below.
On August 17, 1995, the Company entered into an Employment Agreement with Dr. J.
P. London, the Chairman of the Board, President and Chief Executive Officer of
the Company. The agreement provides for a salary of not less than $200,000 per
year to be set by the Board, and participation in any bonus, incentive
compensation, pension, profit-sharing, stock purchase, and stock option plan as
well as annuity or group insurance, medical and other benefit plans maintained
by the Company for its employees. The agreement also provides that the Company
will reimburse business expenses incurred in the performance of Dr. London's
duties. Under the agreement, Dr. London's severance payment is equal to 18
months of his current base salary. In the event Dr. London is terminated within
one year following a change of control of the Company, Dr. London will receive a
termination payment equal to 36 months of his current base salary.
On September 1, 1999, the Company entered into a Severance Compensation
Agreement with L. Kenneth Johnson, the President of CACI, INC.-FEDERAL, the
terms of which are generally consistent with the description set forth above.
The severance payment is equal to 12 months of Mr. Johnson's current base
salary. In the event Mr. Johnson is terminated within one year following a
change of control of the Company, Mr. Johnson will receive a termination payment
equal to 24 months of his current base salary.
13
On November 16, 2001, the Company entered into a Severance Compensation
Agreement with Stephen L. Waechter, the Executive Vice President, Chief
Financial Officer, Treasurer and Director of Business Services of the Company,
the terms of which are generally consistent with the description set forth
above. The severance payment is equal to 12 months of Mr. Waechter's current
base salary. In the event Mr. Waechter is terminated within one year following a
change of control of the Company, Mr. Waechter will receive a termination
payment equal to 24 months of his current base salary.
On July 22, 1999, the Company entered into a Severance Compensation Agreement
with Gregory R. Bradford, the Chief Executive of CACI Limited, and President of
Information Solutions, the terms of which are generally consistent with the
description set forth above. The severance payment is equal to 12 months of Mr.
Bradford's current base salary. In the event Mr. Bradford is terminated within
one year following a change of control of the Company, Mr. Bradford will receive
a termination payment equal to 24 months of his current base salary.
On July 22, 1999, the Company entered into a Severance Compensation Agreement
with Jeffrey P. Elefante, the Executive Vice President, General Counsel,
Secretary and Director of Contract and Administrative Services of the Company,
the terms of which are generally consistent with the description set forth
above. The severance payment is equal to 12 months of Mr. Elefante's current
base salary. In the event Mr. Elefante is terminated within one year following a
change of control of the Company, Mr. Elefante will receive a termination
payment equal to 24 months of his current base salary.
COMPANY STOCK PERFORMANCE CHART
The following chart shows how $100.00 invested as of June 30, 1998, in shares of
Common Stock would have grown during the five-year period ended June 30, 2003,
as a result of changes in the Company's stock price, compared with $100.00
invested in the Russell 2000 Stock Index, and in the Company-selected peer group
of companies ("Company Peer Group").
The Russell 2000 Stock Index was chosen because it represents companies of a
comparable market capitalization (market capitalization ranging from $1.2
billion to $116.6 million as of May 30, 2003) and consists of thirty-three point
three percent (33.3%) of companies listed on the New York Stock Exchange.
The Company Peer Group consists of the following companies: American Management
Systems, Inc., Comarco, Inc., Computer Sciences Corporation, Electronic Data
Systems Corporation, Keane, Inc., Network Equipment Technologies, Inc.,
Sourcecorp, Inc., and Titan Corporation.
The historical information set forth below is not necessarily indicative of
future performance.
On August 16, 2002, the Common Stock began trading on the New York Stock
Exchange ("NYSE") under the symbol "CAI". The Company moved to the NYSE after 34
years on the NASDAQ Exchange.
14
Comparison of Five Year Cumulative Total Return
[GRAPHICAL CHART OMITTED]
June 30
Index Returns
Base -------------------------------------------
Company/Index Name 1998 1999 2000 2001 2002 2003
-----------------------------------------------------------------------------
CACI International Inc $100.00 $106.82 $ 92.58 $223.15 $362.64 $325.70
Russell 2001 Index 100.00 116.51 116.04 116.70 106.67 104.92
Company Peer Group 100.00 118.67 106.02 111.43 81.08 55.33
1996 STOCK INCENTIVE PLAN
The 1996 Stock Incentive Plan (the "1996 Plan") was approved by a majority vote
of the stockholders at the November 14, 1996 Annual Meeting.
The Company's 1996 Plan is intended to advance the best interests of the Company
and its subsidiaries by providing key employees who have substantial
responsibility for Corporate management and growth with additional incentives
through the acquisition of Company securities, thereby increasing the personal
stake of these key employees in the success of the Company and encouraging them
to remain in the employ of the Company and its subsidiaries. In addition, to
accomplish these goals the 1996 Plan is intended to provide additional incentive
to highly qualified candidates to accept employment with the Company,
particularly where they may be required to forfeit in-the-money options to move
to CACI.
The 1996 Plan is administered by the Board's Compensation Committee. At least
annually, the Compensation Committee meets to designate eligible employees, if
any, to receive grants under the 1996 Plan and the type, amount, dates, and
terms of any grants to be made. The Compensation Committee determines specific
grants, subject to the annual limitations permitted under Section 422A of the
Internal Revenue Code (the "Code") pertaining to Incentive Stock Options.
Participation in the 1996 Plan may be in the form of an award of (1) options to
purchase Common Stock intended to qualify as incentive stock options, as defined
in Section 422A of the Code, (2) options not qualifying under Section 422A
(i.e., non-qualified options), (3) shares of stock at no cost or at a purchase
price set by the Committee, subject to restrictions and conditions determined by
the Committee, (4) unrestricted shares of stock at
15
prices set by the Committee, and (5) rights to acquire shares of Common Stock
upon attainment of performance goals specified by the Committee. Only
non-qualified stock option grants, priced at market on the day of grant, have
been awarded under the 1996 Plan. Awards made to senior executives in fiscal
year 2003 were in the form of non-qualified options.
Awards may be granted under the 1996 Plan to officers, employees, and Directors
of the Company or any of its subsidiaries. The total number of shares of Common
Stock that have been authorized for issuance pursuant to the 1996 Plan is
5,950,000. No employee may be granted awards under the 1996 Plan with respect to
more than 300,000 shares in any calendar year. The 1996 Plan does not allow an
award of Stock Appreciation Rights, or the repricing of previously granted
awards.
OTHER COMPENSATION PLANS
At various times in the past, the Company has adopted certain broad-based
employee benefit plans in which the Executive Officers are permitted to
participate on substantially the same terms as other employees who meet
applicable eligibility criteria, subject to any legal limitations on the amounts
that may be contributed or the benefits that may be payable under these Company
plans. Under the CACI $MART PLAN (a deferred compensation plan established
pursuant to the provisions of Section 401(k) of the Internal Revenue Code) (the
"$MART PLAN"), participants select from a variety of investment options,
including a Common Stock investment option. The $MART PLAN authorizes employees
to contribute up to fifteen percent (15%) (subject to certain annual
limitations) of their total compensation. The Company provides matching
contributions of fifty percent (50%) of the amount of the employee's
contribution up to six percent (6%) of the employee's total cash compensation.
Company contributions vest over a five-year period. In addition, the Company may
make discretionary profit sharing contributions to the $MART PLAN. However, no
such discretionary contributions were made in 2003. The Common Stock investment
option in the $MART PLAN provides an additional way to link officer and employee
interests more directly to that of stockholders. The Company also provides a
non-qualified deferred compensation plan, the CACI non-qualified Executive
Retirement Plan, which allows officers at the vice president level and above to
defer up to fifty percent (50%) of their base salary and up to one hundred
percent (100%) of their bonus and/or sales commission compensation into a tax
deferred trust. For executive employees who participate in such plan, the
Company contributes an amount equal to five percent (5%) of compensation that
exceeds the current annual compensation limit as set forth in Section 401(a)(17)
of the Internal Revenue Code - $200,000 for the year 2003 - in order to
compensate for the effective cap on Company contributions to the $MART PLAN
applicable to highly compensated individuals as a result of discrimination
testing of the $MART PLAN.
OTHER STOCK PLANS
The Company has adopted a variety of stock plans, in which selected Company
officers who substantially influence the profitability of the Company are
permitted to participate in order to provide additional compensation to those
employees, to assist in their retention, and to encourage stock ownership among
them. The stock plans are: (1) the CACI Stock Option Restoration (Reload)
Program to allow designated Executive Officers to tender currently-owned shares
of Common Stock to cover the cost of exercising a vested stock option and obtain
a new grant of options to replace those shares used to pay the cost of the
exercise of such options (reload shares are limited to twenty percent (20%) of
the shares granted to an executive participant); (2) the CACI Executive Stock
Bonus Plan to allow eligible Executive Officers to take Common Stock in lieu of
cash bonuses annually; (3) the CACI Officer Stock Deposit Program to allow
eligible Executive Officers to deposit annually a one-time minimum of 2,500
shares (up to a maximum cumulative deposit of 25,000 shares) of Common Stock in
a trust account established by the Company to qualify for a Company award of
twenty percent (20%) of their deposit amount in non-qualified stock options; (4)
the Director Stock Purchase Plan, which is designed to allow directors to elect
to receive Restricted Stock Units ("RSUs"), which vest three (3) years from the
date of award, at the market price on the date of award for CACI stock in lieu
of up to fifty percent (50%) of their annual retainer fees; and (5) the
Management Stock Purchase Plan, which provides senior executives with stock
holding requirements a mechanism to acquire RSUs in lieu of up to thirty percent
(30%) of their annual bonus. A twenty percent (20%) deferral in the plan is
16
mandatory; executives may elect to defer an additional ten percent (10%). RSUs
are awarded under the Management Stock Purchase Plan at eighty-five percent
(85%) of the market price of CACI stock on the date of award. RSUs vest three
(3) years from the date of award.
In 1999, the Company adopted stock-holding guidelines for senior executives
involved in corporate strategy formulation and those in a position to influence
overall corporate performance and value. Effective July 1, 2002, the CACI
Executive Stock Ownership Guidelines Plan was amended to: (1) establish stock
ownership requirements to the levels shown below; (2) require that an escalating
percentage of the required stock ownership, eventually up to a level of one
hundred percent (100%), be in the form of shares of stock rather than vested
options; (3) cause earned bonus payments to be diverted to Common Stock
purchases on behalf of participants who fail to achieve stated holdings, until
the minimum ownership requirements are met; (4) restrict the sale of stock
options if such sale would take the participant below the minimum ownership
requirement; and (5) increase the number of senior executives subject to the
terms of the Plan. If stock-holding guidelines were not achieved, the executive
participant would be ineligible to receive stock option awards under the 1996
Stock Incentive Plan for a period of one year following the date that the
participating executive failed to meet the established stock ownership criteria.
As of August 31, 2003, all executive participants required to hold Common Stock
met the requirements of the original Plan.
Multiple of Salary Multiple of Salary
Executive's Position with the Company within 4 years(1) within 6 Years(2)
------------------------------------- ------------------ ------------------
Chairman of the Board, President and Chief 6 x 7 x
Executive Officer
U.S. Subsidiary President and/or Chief Operating 5 x 6 x
Officer
U. K. Managing Director; Chief Financial Officer 4 x 5 x
General Counsel 3 x 4 x
All Other Executive Vice Presidents 2.5 x 3 x
The Company has also adopted stock-holding guidelines for non-employee
Directors. The purpose of the stock-holding guidelines is to align the interests
of Directors with those of shareholders, and thereby link business strategy with
shareholder value. The CACI Board of Director Stock Ownership Guidelines Plan
was adopted by the Compensation Committee (the "Committee"), and became
effective on July 1, 2002. Under the CACI Board of Director Stock Ownership
Guidelines Plan, stock ownership guidelines are based on a multiple of the Board
member's annual retainer (exclusive of Committee fees, expenses, and extra
meeting fees) as follows:
Multiple of Multiple of Multiple of
Annual Retainer Annual Retainer Annual Retainer
To Be Achieved To Be Achieved To Be Achieved
By 12-1-2005 By 12-1-2007 By 12-1-2009
--------------- --------------- ---------------
Board Member 3 x 5 x 6 x
The prescribed levels of ownership must be achieved as follows: (i) by December
1, 2005, or three years following election to the Board, fifty percent (50%) of
a Board Participant's stock holdings under these guidelines must be achieved
through stock ownership (i.e., shares owned outright by the Board Participant,
plus any shares acquired
----------
(1) Each executive participant's ownership of Common Stock at the multiple of
base salary established by the July 1, 2002 amendment, as shown above, must
be achieved within four (4) years of the July 1, 2002 amendment date, or
four (4) years from the date of hire or promotion into one of the defined
executive positions, whichever is later.
(2) Each executive participant's ownership of Common Stock at the multiple of
base salary established by the July 1, 2002 amendment, as shown above, must
be achieved within six (6) years of the July 1, 2002 amendment date, or six
(6) years from the date of hire or promotion into one of the defined
executive positions, whichever is later.
17
and owned by the Board Participant through any plan offered by the Company),
with the balance achieved through vested (unexercised) "in the money" stock
options; (ii) by December 1, 2007, or five years following election to the
Board, seventy-five percent (75%) of the Board Participant's stock holdings must
be achieved through stock ownership as defined in this paragraph; and (iii) by
December 1, 2009, or seven years following election to the Board, one hundred
percent (100%) of the Board Participant's stock holdings must be achieved
through stock ownership as defined in this paragraph. If stock ownership is not
achieved within the guidelines, the Board Participant is ineligible to receive
stock option awards under the 1996 Stock Incentive Plan for a period of one year
following the date that the criteria defined in this paragraph are met. Each
Board Participant is required to provide the Committee with an annual report of
his or her ownership of Common Stock.
RATIFICATION OF AUDITORS
The Board has appointed Ernst & Young LLP, Certified Public Accountants, as
auditors to examine and report on the Company's financial statements for the
fiscal year ending June 30, 2004. At the Annual Meeting, stockholders will vote
on whether to ratify the selection of Ernst & Young LLP. If a quorum is present,
the vote of the holders of a majority of the shares of stock and entitled to
vote present in person or represented by proxy at the Annual Meeting will be
required to ratify such selection.
Representatives of Ernst & Young LLP are expected to attend the Annual Meeting.
Ernst & Young LLP's representatives will have the opportunity to make a
statement if they so desire and they will be available to respond to appropriate
questions.
Fees Paid to Ernst & Young LLP
The following table shows the fees paid or accrued by the Company for audit and
other services provided by Ernst & Young LLP for fiscal year 2003.
Audit Fees (1) $382,500
Financial Information Systems Design and Implementation Fees 0
All Other Fees (2) 87,872
--------
Total $470,372
----------
(1) Audit services of Ernst & Young LLP for 2003 consisted of the examination
of the consolidated financial statements of the Company and quarterly
review of financial statements.
(2) "All Other Fees" includes tax services, the audit of the Company's 401(k)
plan, and valuation services performed prior to Ernst & Young LLP becoming
the Company's principal accountants.
18
COMPENSATION COMMITTEE REPORT
FOR FISCAL YEAR 2003
The Company's executive compensation policies and practices are overseen by the
Compensation Committee of the Board of Directors (the "Committee"). In Fiscal
Year 2003 the members of the Committee were Michael J. Bayer, Richard L.
Leatherwood, Charles P. Revoile, Richard P. Sullivan and John M. Toups.5 Each
Committee member is a non-employee Director. Committee actions concerning
executive officer compensation are subject to full Board review. Award decisions
under the Company's 1996 Employee Stock Incentive Plan, however, are delegated
exclusively to the Committee.
Set forth below is the report of the Committee for fiscal year 2003 addressing
the Company's executive compensation policies for fiscal year 2003 as they
affected (1) Dr. London and (2) Messrs. Bradford, Elefante, Johnson, and
Waechter, who were the Company's executive officers ("Executive Officers").
Executive Compensation Policies
Executive Officers' compensation levels are intended to be fair (but not
excessive) and competitive with similar sized companies in the Company's
industry. In setting compensation levels, the Committee takes into account both
objective and subjective performance criteria, including: (1) the Company's
after-tax earnings; (2) actual versus target operating performance in terms of
revenue and after-tax earnings; (3) each officer's initiative and contributions
to overall performance; (4) achievement of specific, pre-set strategic
objectives; (5) managerial ability; and (6) performance of special projects.6
Incentive compensation programs typically include performance thresholds, below
which either no bonus or a significantly reduced bonus is paid. It is the
Committee's intent by considering these criteria to tie a significant portion of
the Executive Officers' compensation to Company performance.
The Company uses stock-based compensation to the Executive Officers as a means
of (1) aligning the interests of management with those of the stockholders, and
(2) retaining key executives through the use of stock option awards with future
exercise dates. The Executive Officers may participate in: (1) the Company's
1996 Employee Stock Incentive Plan; (2) the Stock Option Restoration Program;
(3) the Executive Stock Bonus Plan; (4) the Officer Stock Deposit Program; and
(5) the Management Stock Purchase Plan (such Plans are described elsewhere in
this Proxy Statement). For fiscal year 2003, awards of options under the 1996
Employee Stock Incentive Plan were made based on achievement of certain
performance measures.
Executive Officers also are permitted to participate in certain broad-based
employee benefit plans on substantially the same terms as other employees who
meet applicable eligibility criteria, subject to any legal limitation placed on
the amounts that may be contributed or the benefits that may be payable under
such plans. For example, the Company makes matching contributions to the
Company's voluntary 401(k) $MART Plan on behalf of the Executive Officers based
on the amount of each Executive Officer's contributions to the Plan. Similarly,
the Executive Officers may elect to contribute a percentage of their
compensation to the CACI Non-Qualified Executive Retirement Plan.
-------------------
(1) Vincent L. Salvatori served on the Compensation Committee until the
Organizational Meeting of the Board on November 21, 2002.
(2) The Committee also considers cost-of-living and expatriate adjustments for
Executive Officers serving outside the United States. At present, Mr.
Bradford, Executive Vice President of the Company and President and
Managing Director of CACI Limited, a Company subsidiary in the United
Kingdom, is the only Executive Officer serving abroad. 7 Glenn Ricart
served on the Audit Committee until the Organizational Meeting of the Board
on November 21, 2002.
19
Relationship of Executive Compensation to Company Performance
Compensation paid to the Executive Officers in fiscal year 2003 (as reflected in
the Summary of Executive Officer Compensation table included in this Proxy
Statement) consisted primarily of base salary and performance bonus, along with
specific stock option grants based on achievement of certain performance targets
(as reflected in the Option Grants During Fiscal Year 2003 table included in
this Proxy Statement).
Compensation plans for fiscal year 2003 were developed late in fiscal year 2002
following a review of compensation to ascertain the compensation levels that
would be necessary or desirable to maintain the Company's compensation structure
on a competitive basis, and to provide appropriate incentive for achieving
desired Company performance. Specific performance targets were established and
incorporated into fiscal year business plans that were developed by the
Executive Officers under the supervision of the Chief Executive Officer and
approved by the Board of Directors.
The approved fiscal year business plans were used as the basis for the Company's
performance bonus plans, which provided for bonus payments to Executive Officers
based on actual versus target operating performance in terms of after-tax
earnings for the Company as a whole; and for those Executive Officers in charge
of an operating unit, for the Executive Officer's particular unit. These plans
provided for (1) no bonus payment for performance below a pre-set minimum profit
threshold; (2) payment of a base bonus for performance that exceeded the minimum
profit threshold; and (3) payment of an enhanced bonus at increasing percentage
levels as performance met or exceeded additional pre-set profit levels.
The Company's incentive compensation plans also allowed for payment of
additional compensation on the basis of achievement of (1) specific, pre-set
strategic objectives and (2) an evaluation of each Executive Officer's
initiative and contributions to overall performance apart from quantitative
financial performance. Payments pursuant to such subjective criteria were
determined at or close to the end of fiscal year 2003 after discussions among
the Committee and, for all Executive Officers other than Dr. London, after
discussions between the Committee and Dr. London.
Chief Executive Officer Compensation
The Committee's approach to setting the Chief Executive Officer's compensation,
as in the case of the other Executive Officers, is to tie a significant portion
of his compensation to Company performance while seeking to be competitive with
other similar sized companies in the Company's industry and to provide the Chief
Executive Officer with some certainty as to the level of his compensation
through base salary. The Committee believes that this approach appropriately
rewards the Chief Executive Officer for achievement of Company performance
goals.
Dr. London's salary and bonus compensation for fiscal year 2003 was Two Million
Two Hundred Sixty Two Thousand Seven Hundred Seven Dollars ($2,262,707) an
increase of Six Hundred Ten Thousand Four Hundred Sixty Five Dollars ($610,465)
from fiscal year 2002 principally as a result of the operation of Dr. London's
incentive compensation plan applied to the Company's after-tax earnings in
fiscal year 2003.
Dr. London's fiscal year 2003 incentive compensation was based on the Company's
net after-tax profit, both for individual quarters within the fiscal year and
for the fiscal year as a whole. Dr. London was entitled to a bonus based on each
quarter's net after-tax profit so long as that profit was equal to or exceeded
the net after-tax profit for the same quarter of fiscal year 2002, and a larger,
variable bonus upon reaching or exceeding a Board of Director established
predetermined threshold net after-tax profit level for the fiscal year. During
fiscal year 2003, by operation of the applicable bonus formulae, Dr. London
earned One Million Eight Hundred Eighteen Thousand One Hundred Seven Dollars
($1,818,107) in aggregate incentive compensation for quarterly and annual net
after-tax profit results for the fiscal year.
The Committee believes that in view of the Company's performance for the year,
Dr. London's compensation for fiscal year 2003 was reasonable.
20
In June, 2003, the Committee and the Board of Directors approved a bonus
arrangement for Dr. London for fiscal year 2004 which ties a significant portion
of Dr. London's compensation to the achievement by the Company of certain profit
results during fiscal year 2004.
RESPECTFULLY SUBMITTED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
--------------------- ------------------------- --------------------------
Michael J. Bayer Richard L. Leatherwood Charles P. Revoile
----------------------- ------------------
Richard P. Sullivan John M. Toups
AUDIT COMMITTEE REPORT FOR FISCAL YEAR 2003
The members of the Company's Audit Committee are Peter A. Derow, Richard L.
Leatherwood, Arthur L. Money, Warren R. Phillips, and William B. Snyder.(1)
The actions of the Committee are accomplished pursuant to the Audit Committee
Charter (copy attached) that was first adopted by the Board of Directors in
June, 1994 and has been reviewed and amended as necessary annually since that
date. Each member of the Audit Committee qualifies as "independent" in
accordance with the requirements of New York Stock Exchange Listed Company
Manual, Section 303.01(B)(2)(a) and (3). In fulfilling its responsibilities as
set forth in the Audit Committee Charter, the Committee has accomplished the
following:
(1) It has reviewed and discussed the audited financial statements with
management;
(2) It has discussed with the independent auditors, Ernst & Young LLP, the
matters required to be discussed by Statement of Accounting Standards
(SAS) 61 (Codification of Statements on Auditing Standards, AU380) as
modified or supplemented through August 1, 2003;
(3) It has received the written disclosures and the letter from Ernst &
Young LLP, required by Independence Standards Board's Standard No. 1
(Independence Discussions with Audit Committees) as modified or
supplemented through August 1, 2003;
(4) It has discussed with Ernst & Young LLP its independence under
Independence Standards Board's Standard No. 1 (Independence
Discussions with Audit Committees); and
(5) Based on the review and discussions described in subparagraphs (1)
through (4) above, the Audit Committee recommended to the Board of
Directors that the audited financial statements be included in the
Company's Annual Report on Form 10-K.
RESPECTFULLY SUBMITTED BY THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
---------------------------- ----------------------------
Peter A. Derow Richard L. Leatherwood
---------------------------- ----------------------------
Arthur L. Money Warren R. Phillips
----------------------------
---------
(1) Glenn Ricart served on the Audit Committee until the Organizational Meeting
of the Board on November 21, 2002.
21
William B. Snyder
AUDIT COMMITTEE AND FINANCIAL EXPERT
The Board of Directors has determined that the Company has at least one audit
committee financial expert serving on its Audit Committee, Director Richard L.
Leatherwood. Mr. Leatherwood is "independent" as that term is used in Schedule
14A, Item 7(d)(3)(iv) under the Securities Exchange Act of 1934, as amended.
CODE OF ETHICS
We have adopted a Directors Code of Business Ethics and a Year 2003 Code of
Ethics and Business Conduct Standards that apply, respectively, to our Directors
and to all of our employees, including our Chief Executive Officer, Chief
Financial Officer, Corporate Controller, and all of our principal executives.
Each Director and executive officer is required to review the applicable code of
ethics and to certify compliance annually. There have not been any waivers of
either code relating to any of our executive officers or Directors. The Codes
are available for review on our website at www.caci.com/about/dir_ethics.shtml
and www.caci.com/about/ethics.shtml.
TRANSACTIONS WITH MANAGEMENT AND OTHERS;
OTHER INFORMATION
There exist no transactions with management and others (as defined by applicable
regulations), to which the Company or any of its subsidiaries was a party in
fiscal year 2003 in which the amount involved exceeded $60,000.
SOLICITATION
The cost of this solicitation of proxies will be borne by the Company. The firm
of Morrow & Co., Inc. has been retained to assist in soliciting proxies at a fee
not to exceed $6,500, plus expenses. The Company may also reimburse banks,
brokers, nominees, and other fiduciaries for postage and reasonable clerical
expenses incurred by them in forwarding the proxy material to their principals.
Proxies may be solicited without extra compensation by certain Officers,
Directors and other employees of the Company, by telephone or telegraph, by
personal contact, or by other means.
FUTURE STOCKHOLDER PROPOSALS
In order to be included in the proxy materials for the 2004 Annual Meeting,
stockholder proposals must be received by the Secretary of the Company on or
before July 1, 2004.
DOCUMENTS INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended June 30,
2003, filed with the SEC on September 29, 2003, is incorporated by reference.
OTHER MATTERS
As of this date, the Board knows of no business which may properly come before
the meeting other than that stated in the Notice of Meeting accompanying this
Proxy Statement. Should any other business arise, proxies given in the
accompanying form will be voted in accordance with the discretion of the person
or persons named therein.
By Order of the Board of Directors
/s/ JEFFREY P. ELEFANTE
Jeffrey P. Elefante (Secretary)
Arlington, Virginia
Dated: October 17, 2003
22
APPENDIX A
AUDIT COMMITTEE CHARTER
Adopted August, 2002
The CACI Audit Committee is a committee of the Board of Directors. Its primary
function is to assist the Board in fulfilling its oversight responsibilities by
reviewing the financial information which will be provided to the shareholders
and others, the systems of internal controls which management and the Board of
Directors have established, and the audit process. The independent accountant is
directly accountable to the Audit Committee.
In meeting its responsibilities, the Audit Committee is expected to:
1. Provide an open avenue of communication between the internal auditors, the
independent accountant, and the Board of Directors.
2. Review and update the committee's charter as needed.
3. Approve in advance the appointment, compensation and, if necessary,
discharge of the independent accountant(s) charged with providing audit
services. Approve in advance the engagement of any independent accountant
to perform any non-audit services. Provide oversight of the independent
accountant(s) performing audit services for the Company. The Committee
shall report all of such activities to the Board of Directors.
4. Review the appointment, replacement, reassignment, or dismissal of the
Director of Internal Auditing.
5. Ensure submission of a formal written report from the independent
accountant describing the relationship between the independent accountant
and the Company and conduct discussions with the independent accountant
sufficient to confirm and assure the independence of the independent
accountant.
6. Review with management and the independent accountant at the completion of
the annual examination:
a. The company's annual financial statements and related footnotes.
b. The independent accountant's audit of the financial statements and
their report thereon.
c. The adequacy of internal controls, including controls over
computerized information systems, and any significant findings and
recommendations, and management's responses.
d. Any significant changes required in the independent accountant's audit
plan.
e. Any serious difficulties or disputes with management encountered
during the course of the audit.
f. Other matters related to the conduct of the audit which are to be
communicated to the committee under generally accepted auditing
standards, such as SAS #61.
7. Consider and review with management and the Director of Internal Auditing:
a. Significant findings during the year, recommendations and management's
responses thereto.
b. Any difficulties encountered in the course of their audits, including
any restrictions on the scope of their work or access to required
information, or anything which might impair their independence.
c. Any changes required in the planned scope of their audit plan.
d. The annual Internal Audit Plan, department budget and staffing prior
to finalization.
e. Coordination of work with the independent accountant to ensure
effective use of audit resources.
f. The internal Auditing department charter.
g. Internal Auditing's compliance with IIA's Standards for the
Professional Practice of Internal Auditing (Standards).
8. Review prior to filing any SEC documents which require Board of Directors
signature, including but not limited to the Annual Report on Form 10-K.
9. Review with the Director of Internal Auditing the results of their review
of the company's monitoring compliance with the company's code of conduct.
10. Review policies and procedures with respect to officers' expense accounts
and perquisites, including their use of corporate assets, and consider the
results of any review of these areas by the internal auditor or the
independent accountant.
11. Review legal and regulatory matters that may have a material impact on the
financial statements, related company compliance policies, and programs and
reports received from regulators.
Appendix A A-1
12. Report committee actions to the Board of Directors with such
recommendations as the committee may deem appropriate.
13. Prepare a report as required by the rules and regulations of the Securities
Exchange Commission on the activities of the audit committee for inclusion
in the annual proxy statement.
14. The Audit Committee shall have the power to conduct or authorize
investigations into any matters within the committee's scope of
responsibilities. The committee shall be empowered to retain independent
counsel, accountants, or other advisors to assist it in fulfilling its
responsibilities. The Committee shall report all such activities to the
Board of Directors.
15. The committee shall meet at least two times per year or more frequently as
circumstances require. The committee may ask members of management or
others to attend the meeting and provide pertinent information as
necessary.
16. The membership of the Audit Committee shall consist of at least three
independent members of the Board of Directors who shall serve at the
pleasure of the Board of Directors. Audit Committee members and the
Committee Chairman shall be designated by the full Board of Directors. The
duties and responsibilities of a member of the Audit Committee are in
addition to those duties set out for a member of the Board of Directors.
17. Minutes of each meeting are to be prepared by the General Counsel or his
designee and approved by the committee.
18. Conduct an annual evaluation of the Committee's performance.
19. The committee will perform such other functions as assigned by law, the
company's charter or bylaws, or the Board of Directors.
Appendix A A-2
[CACI LOGO] VOTE BY PHONE - 1-800-690-6903
CACI INTERNATIONAL INC Use any touch-tone telephone to transmit your voting instructions up until 11:59
1100 N. GLEBE RD. P.M. Eastern Time the day before the cut-off date or meeting date. Have your
ARLINGTON, VA 22201 proxy card in hand when you call and then follow the simple instructions the
Vote Voice provides you.
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time the day before the
cut-off date or meeting date. Have your proxy card in hand when you access the
web site.
VOTE BY MAIL -
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return to CACI International Inc, c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: CACI01 KEEP THIS PORTION FOR YOUR RECORDS
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DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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CACI INTERNATIONAL INC
Election of Directors
1. Nominees for election to the Company's Board of
Directors: For Withhold For All To withhold authority to vote, mark "For All Except"
01) Michael J. Bayer 07) Warren R. Phillips All All Except and write the nominee's number on the line below.
02) Peter A. Derow 08) Charles P. Revoile
03) Richard L. Leatherwood 09) Richard P. Sullivan [_] [_] [_] ____________________________________________________
04) J. Phillip London 10) John M. Toups
05) Barbara A. McNamara 11) Larry D. Welch
06) Arthur L. Money
Vote On Proposal For Against Abstain
2. Ratification of the appointment of Ernst & Young LLP as independent auditors. [_] [_] [_]
Please complete, date, sign and mail this proxy card in the enclosed prepaid envelope.
For address changes, please check this box and write them on [_]
the back where indicated
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Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
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Common Stock CACI International Inc
PROXY FOR NOVEMBER 20, 2003 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints J.P. London and Warren R. Phillips, and each of
them, as Proxies of the undersigned, each with full power of substitution, to
vote all of the shares of Common Stock of CACI International Inc the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Stockholders of CACI International Inc to be held at the Fairview Park Marriott,
3111 Fairview Park Drive, Falls Church, Virginia 22042, on November 20, 2003 at
9:30 a.m. Eastern Standard Time and at any adjournment thereof.
The Board of Directors recommends a vote FOR each of the items on the reverse
side, as more fully described in the accompanying Proxy Statement.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the Annual Meeting or any adjournments thereof.
UNLESS OTHERWISE MARKED, THIS PROXY WILL BE VOTED FOR EACH OF THE ITEMS ON THE
REVERSE SIDE. As of the date of the Proxy Statement, the Board of Directors
knows of no other business to be presented at the Annual Meeting.
Please sign exactly as your name is shown on this proxy card. If signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are owned jointly, each owner should sign. If the signer is a
corporation, the full corporate name shall be given, and the proxy card shall be
signed by a duly authorized officer.
By my signature, on the reverse side of this proxy, I acknowledge receipt of the
Notice and Proxy Statement for the Annual Meeting of Stockholders of CACI
International Inc.
CHANGE OF ADDRESS:______________________________________________________________
______________________________________________________________
______________________________________________________________
(If you noted any changes on the lines above, please check the
corresponding box on the reverse side)
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