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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  x

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

Engility Holdings, 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):

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ENGILITY HOLDINGS, INC.

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 23, 2013

Dear Fellow Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders (the “Annual Meeting”) of Engility Holdings, Inc. (the “Company”), which will be held on Thursday, May 23, 2013 at 9:00 a.m. eastern daylight savings time at the Ritz Carlton Hotel, 1700 Tysons Boulevard, McLean, VA 22102.

We are holding the Annual Meeting for the following purposes:

These matters are more fully described in the accompanying proxy statement. We are not aware of any other business to be transacted at the Annual Meeting.

Only stockholders of record on our books at the close of business on Thursday, March 28, 2013 will be entitled to vote at the Annual Meeting and any adjournments or postponements of the Annual Meeting.

We are furnishing proxy materials to our stockholders over the Internet. On or about April 12, 2013, we mailed to all stockholders of record as of the close of business on Thursday, March 28, 2013, a notice containing instructions on how to access our Annual Report to Stockholders, which contains our audited consolidated financial statements for the fiscal year ended December 31, 2012, and our proxy statement and proxy card on the Internet website indicated in our notice. The April 12, 2013 notice also provides instructions on how you can request a paper copy of our proxy materials and Annual Report to Stockholders.

For questions on accessing proxy materials or voting, please call 1 (800) 579-1639.

By Order of the Board of Directors,

Thomas O. Miilller,

Senior Vice President, General Counsel and Corporate Secretary

April 12, 2013

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YOUR VOTE IS IMPORTANT. STOCKHOLDERS MAY VOTE IN PERSON AT THE ANNUAL MEETING OR BY INTERNET, TELEPHONE OR MAIL. PLEASE REFER TO YOUR PROXY CARD, BROKER INSTRUCTIONS OR THE NOTICE OF PROXY AVAILABILITY DISTRIBUTED TO YOU ON APRIL 12, 2013 FOR INFORMATION ON HOW TO VOTE IN PERSON OR BY INTERNET, TELEPHONE OR MAIL.

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ENGILITY HOLDINGS, INC.

PROXY STATEMENT

FOR THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MAY 23, 2013

This proxy statement is being furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Engility Holdings, Inc. for use at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Thursday, May 23, 2013 at 9:00 a.m. eastern daylight savings time at the Ritz Carlton Hotel, 1700 Tysons Boulevard, McLean, VA 22102, and any adjournments or postponements of the Annual Meeting. The Board is soliciting proxies for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. This proxy statement and the accompanying proxy card are being distributed and made available on or about April 12, 2013.

BACKGROUND

As described more fully in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, through July 17, 2012, Engility Holdings, Inc. was a subsidiary of L-3 Communications Holdings, Inc. (“L-3”). On July 17, 2012, we completed the spin-off from L-3 (the “Spin-Off”), and we now own and operate the systems engineering and technical assistance, training and operational support services businesses that were previously part of L-3’s Government Services segment. Unless the context indicates otherwise, (i) references to Engility, the Company, we, us or our refer to Engility Holdings, Inc. and its subsidiaries and (ii) references to L-3 refer to L-3 Communications Holdings, Inc. and its subsidiaries.

Effective as of 5:00 p.m., New York time, on July 17, 2012 (the “Distribution Date”), our common stock was distributed, on a pro rata basis, to L-3’s stockholders of record as of the close of business on July 16, 2012 (the “Spin-Off Record Date”). On the Distribution Date, each holder of L-3 common stock received one share of our common stock for every six shares of L-3 common stock held on the Spin-Off Record Date. The Spin-Off was completed pursuant to a Distribution Agreement and other agreements with L-3 related to the Spin-Off, including an Employee Matters Agreement, a Tax Matters Agreement, a Transition Services Agreement and two Master Supply Agreements. These agreements govern the relationship among us and L-3 following the Spin-Off and provide for the allocation of various assets, liabilities, rights and obligations. These agreements also include arrangements for transition services to be provided by L-3 to Engility. For a discussion of each agreement, see the section entitled “Certain Relationships and Related Party Transactions—Agreements with L-3 Related to the Spin-Off” in this proxy statement.

Our Registration Statement on Form 10 was declared effective by the Securities and Exchange Commission (the “SEC”) on July 2, 2012, and our common stock began “regular way” trading on the New York Stock Exchange (“NYSE”) on July 18, 2012 under the symbol “EGL.”

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PROPOSAL 1 ELECTION OF DIRECTORS

DIRECTORS AND NOMINEES FOR DIRECTOR

The Company’s Amended and Restated Bylaws provide that the number of directors shall be fixed from time to time exclusively by the Board, and shall be divided into three classes. The size of the Board has currently been set at seven (7) directors.

The terms for two (2) of the Company’s incumbent directors expire at the Annual Meeting. These directors are William G. Tobin and Darryll J. Pines. The nomination of directors William G. Tobin and Darryll J. Pines for their re-election to a three-year term has been recommended by the Nominating/Corporate Governance Committee and approved by the Board. There are two (2) directors whose terms expire at the 2014 annual meeting and three (3) directors whose terms expire at the 2015 annual meeting. In each case, directors are elected until their respective successors are duly elected and qualified or until his or her earlier death, resignation or removal. At each annual meeting, one class of directors is elected for a three-year term.

Unless a proxy specifies otherwise, the persons named in the proxy will vote the shares covered thereby FOR the nominees as listed. Each nominee has consented to be a candidate and to serve, if elected. While the Board has no reason to believe that any nominee will be unavailable, if such an event should occur, it is intended that shares represented by proxies will be voted for substitute nominee(s) as selected by the Board.

We sought to ensure that our Board is composed of members whose particular experience, qualifications, attributes and skills, when taken together, will allow our Board to satisfy its oversight responsibilities effectively in light of our business and structure.

When considering the experience, qualifications, attributes and skills of the Board, we focused primarily on the information discussed in each of the Board members’ biographical information set forth below. In particular,

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NOMINEES FOR ELECTION TO BOARD

        Darryll J. Pines

Director since 2012

Dr. Pines has served as a Director on our Board and as member of the Audit Committee and the Nominating/Corporate Governance Committee since 2012. Dr. Pines is Dean of the Clark School of Engineering at the University of Maryland and the Farvardin Professor of Aerospace Engineering. Prior to becoming Dean of the Clark School of Engineering, Dr. Pines served as Chair of the Department of Aerospace Engineering from 2006 through 2009 and as a Professor and Assistant Professor in the Clark School of Engineering from 1995 through 2003. From 2003 through 2006, Dr. Pines also served as Program Manager of the Tactical Technology Office and Defense Sciences Office for DARPA. Dr. Pines received a Bachelor of Science in Mechanical Engineering from the University of California at Berkley, and a Master of Science and Ph.D. in Mechanical Engineering from the Massachusetts Institute of Technology.

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        William G. Tobin

Director since 2012

Mr. Tobin has served as a Director on our Board and as chair of the Compensation Committee and member of the Audit Committee since 2012. Mr. Tobin founded the Tobin Group in 2003 and continues as its Managing Partner. Mr. Tobin is also a Consultant to The Marymont Group, an executive search firm. Previously, Mr. Tobin was Managing Director and Chairman of the Defense & Aerospace practice of Korn/Ferry International from 1986 through 2003. From 1981 through 1985, Mr. Tobin was Founding Partner of The Tobin Group, a management consulting group. Prior to founding The Tobin Group, Mr. Tobin served as an officer in the U.S. Army for 20 years. Mr. Tobin is a former Director of DynCorp International, Inc., Integrated Defense Technology, Vertex Aerospace and WorldStore International, and an Advisory Board Member of Veritas Capital. Mr. Tobin received a Bachelor of Science in Engineering from the U.S. Military Academy, West Point, a Master of Arts in International Relations from the Elliot School of International Affairs at George Washington University and a Masters of Business Administration from Long Island University.

CONTINUING DIRECTORS UNTIL 2014 MEETING

        Anthony Principi

Director since 2012

Mr. Principi has served as a Director on our Board and as member of the Compensation Committee and the Nominating/Corporate Governance Committee since 2012. Mr. Principi serves as Principal of the Principi Group, a consulting firm. From 2005 through 2010, he was Senior Vice President of Government Relations of Pfizer, Inc., a biopharmaceutical company. Prior to joining Pfizer, Inc., Mr. Principi served as Secretary of the U.S. Department of Veterans Affairs from 2001 through 2005. In 2005, he served as the Chairman of the Defense 2005 Base Realignment and Closure Commission. Prior to becoming Secretary of the U.S. Department of Veterans Affairs, Mr. Principi was President of QTC Medical Services Inc. from 1999 through 2001 and Senior Vice President of Lockheed Martin IMS from 1995 through 1996. Prior to joining Lockheed Martin IMS, Mr. Principi was Chief Counsel and Staff Director of the U.S. Senate Armed Services Committee from 1993 through 1994, and was Chief Counsel and Staff Director of the U.S. Senate Committee on Veterans’ Affairs from 1984 through 1988. Mr. Principi serves as Director and Member of the Corporate Governance and Compensation and Evaluation Committees of Mutual of Omaha. Mr. Principi served as Executive Chairman of QTC Management, and was a Director of Perot Systems Corporation. Mr. Principi received a Bachelor of Science from the U.S. Naval Academy and a Juris Doctor from Seton Hall University School of Law.

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        David A. Savner

Director since 2012

Mr. Savner has served as a Director on our Board and as chair of the Nominating/Corporate Governance Committee since 2012. Mr. Savner is a Partner with the law firm of Jenner & Block LLP, and a member of its Corporate Practice. Prior to rejoining Jenner & Block, Mr. Savner was Senior Vice President, General Counsel, and Secretary of General Dynamics, an aerospace and defense company, from 1999 to 2009. Prior to joining General Dynamics, Mr. Savner was a Partner of Jenner & Block, and Chair of its Corporate Practice. Mr. Savner received a Bachelor of Arts from Northwestern University and a Juris Doctor from Northwestern University School of Law.

CONTINUING DIRECTORS UNTIL 2015 MEETING

        Edward P. Boykin

Director since 2012

Mr. Boykin has served as Chairman on our Board since 2012. Mr. Boykin was President and Chief Operating Officer of Computer Sciences Corporation, an information technology services company, until his retirement in 2003. Mr. Boykin spent 37 years at Computer Sciences Corporation. Prior to becoming President and Chief Operating Officer, he held a number of senior management positions, including President of its Financial Services Group from 1998 through 2001, President of Pinnacle Alliance from 1996 through 1998, President of its Technology Management Group from 1993 through 1996 and President of CSC Credit Services, Inc. from 1988 through 1996. Prior to joining Computer Sciences Corporation in 1966, Mr. Boykin was an aerospace engineer at NASA. Mr. Boykin is a Director and a Member of the Audit Committee of Teradata Corporation. He also serves as a Director, Audit Committee Chair, and Member of the Executive Committee and Directors and Governance Committee of NCR Corporation. He served as Chairman and Director of Capital TEN Acquisition Corporation during 2007. Mr. Boykin was previously a Director of Plus One Solutions, Inc. from 2008 through 2009. Mr. Boykin received a Bachelor of Science in Mathematics from the University of Houston and completed graduate work in Mathematics at the University of Alabama at Huntsville.

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        Charles S. Ream

Director since 2012

Mr. Ream has served as a Director on our Board and as chair of the Audit Committee and member of the Compensation Committee since 2012. Mr. Ream was Executive Vice President and Chief Financial Officer of Anteon International Corporation until his retirement in 2006. Prior to joining Anteon International Corporation in 2003, Mr. Ream was Senior Vice President and Chief Financial Officer of Newport News Shipbuilding, Inc. from 2000 through 2001. Prior to joining Newport News Shipbuilding, Mr. Ream served as Senior Vice President of Finance of Raytheon Systems Company from 1998 through 2000, and served as Chief Financial Officer of Hughes Aircraft Company from 1994 through 1997. Prior to joining Hughes Aircraft Company, Mr. Ream was a Partner at Deloitte & Touche LLP. Mr. Ream serves as Audit Committee Chairman and Member of the Compensation Committee of Aeroflex Holdings Corp. Mr. Ream also serves as a Director of SI Organization, a portfolio company of Veritas Capital, and is a Director of Allied Defense Group, Inc. Mr. Ream served as a Director of Vangent, Inc., Stanley, Inc., DynCorp International, Inc. and Stewart & Stevenson Services, Inc. Mr. Ream received a Bachelor of Science in Accounting from the University of Arizona and a Master of Accounting from the University of Arizona. Mr. Ream is a Certified Public Accountant (inactive).

        Anthony Smeraglinolo

Director since 2012

Mr. Smeraglinolo has served as our President and Chief Executive Officer since 2012. Mr. Smeraglinolo rejoined L-3 in December 2010 and served as Executive Vice President, L-3 Services Group, and Acting President, Command & Control Systems and Software division, L-3 Services Group. He had previously served as President of the L-3 Services Group’s Intelligence Solutions Division from 2005 to 2008. From 2008 to 2010 he had been President of the Global Stabilization and Development Solutions division for Dyncorp International, a government services provider. Prior to joining L-3 in 2005 he spent more than 25 years with Harris Corporation, holding leadership positions in finance, program management, business development and operations. He was also senior vice president of business operations at DRS Technologies. Mr. Smeraglinolo has a Bachelor’s degree in Business Management from Fairfield University in Connecticut and a Master of Business Administration from Florida Institute of Technology.

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VOTE REQUIRED; RECOMMENDATION

The affirmative vote of a plurality of the votes cast at the Annual Meeting is required to approve the election of each of the nominees for election as a director. All nominees for election as directors at the Annual Meeting currently serve on the Board. If no voting specification is made on a properly returned or voted proxy card, the proxy card will vote FOR the election of Darryll J. Pines and William G. Tobin as directors to hold office until the 2016 annual meeting of stockholders and until their respective successors are elected and qualified. Abstentions and broker non-votes will have no effect on Proposal 1 because they are not considered votes cast.

The Board unanimously recommends that stockholders vote “FOR” each of the director nominees.

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CORPORATE GOVERNANCE

Our Corporate Governance Guidelines, which include information regarding the Board’s mission and director responsibilities, director qualifications and determination of director independence and other guidelines, is available on the Company’s website, www.engilitycorp.com, by clicking on “Investor Relations” and then “Corporate Governance”. This section of the website makes available all of the Company’s corporate governance materials, including the Company’s Certificate of Incorporation and Bylaws, the charters for each Board committee, the Company’s Code of Ethics and Business Conduct (the “Code of Conduct”), and information about how to report concerns about the Company. Instructions for how to obtain copies of the Company’s corporate governance documents and how to communicate with the Company’s directors are included below. The Board regularly reviews developments in corporate governance and updates the Corporate Governance Guidelines and other governance documents as it deems necessary and appropriate.

CORPORATE GOVERNANCE GUIDELINES

The Company has adopted Corporate Governance Guidelines that we believe reflect the Board’s commitment to a system of governance that enhances corporate responsibility and accountability. The Corporate Governance Guidelines contain provisions addressing the following matters, among others:

We intend to disclose any future amendments to our Corporate Governance Guidelines on our website.

DIRECTOR INDEPENDENCE

Our Board, upon recommendation of our Nominating/Corporate Governance Committee, has determined that the following directors are independent: Edward P. Boykin, Darryll J. Pines, Anthony Principi, Charles S. Ream, David A. Savner and William G. Tobin. Our Board annually determines the independence of directors based on a review by the directors and the Nominating/Corporate Governance Committee. No director will be considered independent unless the Board affirmatively determines that he or she has no material relationship with us, either directly or as a partner, stockholder, or officer of an organization that has a relationship with us. Material relationships can include commercial, industrial, banking, consulting, legal, accounting, charitable, and familial relationships, among others. To evaluate the materiality of any such relationship, the Board has determined it is in the best interests of the company to adopt categorical independence standards that are set forth in the Corporate Governance Guidelines. The standards that are used by the Board in affirmatively determining whether a director is independent are composed, in part, of those objective standards set forth in the NYSE rules, which generally provide that:

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The Board, with the assistance of our Nominating/Corporate Governance Committee, evaluated from a director independence perspective Mr. Savner’s position as a corporate partner in the law firm of Jenner & Block LLP, which provides government contract-related legal services to the Company. Mr. Savner recused himself from these discussions. In evaluating Mr. Savner’s independence, the Board affirmatively determined that Mr. Savner’s position as a partner in Jenner & Block did not constitute a material relationship with the Company, and that he qualifies as independent. Factors that the Board considered in reaching this conclusion included the following: (i) Mr. Savner has never provided any legal services to the Company, through Jenner & Block or otherwise; (ii) the Company’s relationship with Jenner & Block pre-dates by approximately seven years the date that Mr. Savner joined our Board; (iii) Mr. Savner is a non-equity partner at Jenner & Block and does not receive origination fees or other compensation related to the legal work that Jenner & Block performs for the Company; and (iv) Mr. Savner has no involvement with our decision to use Jenner & Block for ongoing work.

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COMMITTEES OF THE BOARD OF DIRECTORS

The standing committees of our Board include an Audit Committee, a Compensation Committee and a Nominating/Corporate Governance Committee each as further described below. Each of these committees is composed exclusively of directors who are independent. Other committees may also be established by the Board from time to time. Committee membership shown below is as of the date of this proxy statement.

		Audit Committee		Compensation Committee		Nominating/Corporate Governance             Committee
Edward P. Boykin
Darryll J. Pines
Anthony Principi
Charles S. Ream
David A. Savner
Anthony Smeraglinolo
William G. Tobin

Chairperson             Member             Financial Expert

Audit Committee. The Audit Committee of our Board (the “Audit Committee”) has the responsibility, among other things, to meet periodically with management and with both our independent auditor and internal auditor to review audit results and the adequacy and effectiveness of our system of internal controls. In addition, the Audit Committee appoints or discharges our independent auditor, reviews and approves auditing services and permissible non-audit services to be provided by the independent auditor in order to evaluate the impact of undertaking such added services on the independence of the auditor and reviews and approves or ratifies transactions with related persons. The responsibilities of the Audit Committee are more fully described in our Audit Committee charter, which is posted on our website at www.engilitycorp.com and will be available in print to any stockholder who requests it. All members of the Audit Committee are independent and financially literate. Further, the Board has determined that Charles S. Ream possesses accounting or related financial management expertise within the meaning of the NYSE listing standards and that Charles S. Ream qualifies as an “audit committee financial expert” as defined under the applicable SEC rules. In 2012, the Audit Committee met three times.

Compensation Committee. The Compensation Committee of our Board (the “Compensation Committee”) oversees all compensation and benefit programs and actions that affect our executive officers and directors. The Compensation Committee also provides strategic direction for our overall compensation structure, policies and programs. The responsibilities of the Compensation Committee are more fully described in the Compensation Committee charter, which is posted on our website at www.engilitycorp.com and will be available in print to any stockholder who requests it. Each member of the Compensation Committee is an independent, non-employee director, and there are no Compensation Committee interlocks involving any of the members of the Compensation Committee. In 2012, the Compensation Committee met four times.

Nominating/Corporate Governance Committee. The Nominating/Corporate Governance Committee of our Board (the “Nominating/Corporate Governance Committee”) is responsible for developing and recommending to the Board criteria for the selection of director candidates; identifying, reviewing the qualifications of and

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proposing candidates for election to the Board; reviewing the performance of incumbent directors in determining whether to recommend them for reelection to the Board; considering questions of independence and possible conflicts of interest of incumbent directors and executive officers; and overseeing and approving the continuity planning process. The Nominating/Corporate Governance Committee also reviews and recommends action to the Board on matters involving corporate governance and, in general, oversees the evaluation of the Board. The responsibilities of the Nominating/Corporate Governance Committee are more fully described in the Nominating/Corporate Governance Committee charter, which is posted on our website at www.engilitycorp.com and will be available in print to any stockholder who requests it. Each member of the Nominating/Corporate Governance Committee is independent. In 2012, the Nominating/Corporate Governance Committee met one time.

EXECUTIVE SESSIONS

Our Corporate Governance Guidelines provide that non-management directors shall meet at regularly scheduled executive sessions, which will typically occur at regularly scheduled Board meetings, without any member of management present. In addition, at least annually the independent directors will meet in separate executive session. Edward P. Boykin, the independent Chairman of the Board, currently presides over each session. According to our Corporate Governance Guidelines, in the event that the Chairman of the Board is an employee of the Company, the Board shall annually elect or reaffirm by majority vote a Lead Independent Director, who shall lead the executive sessions. Our Corporate Governance Guidelines also provide that the executive sessions shall serve as the forum for the annual evaluation of the performance of the Company’s Chief Executive Officer, the annual review of the Chief Executive Officer’s plan for management succession and the annual evaluation of the performance of the Board.

CRITERIA FOR DIRECTOR NOMINATIONS

Our Board is responsible for nominating directors for election by stockholders. In nominating a slate of directors, our Board, with the assistance of the Nominating/Corporate Governance Committee, shall take into account (a) minimum individual qualifications, including strength of character, mature judgment, industry knowledge or experience and an ability to work collegially with the other members of our Board, and (b) all other factors it considers appropriate, which may include financial and accounting background, to enable the Nominating/Corporate Governance Committee to determine whether the director candidate would be suitable for membership on the Company’s Audit Committee (including as an “audit committee financial expert”). The Board should monitor the mix of specific experience, qualifications and skills of its directors in order to assure that the Board, as a whole, has the necessary tools to perform its oversight function effectively in light of the Company’s business and structure. The Nominating/Corporate Governance Committee also may consider the extent to which a director candidate would fill a present need on the Board.

When seeking candidates for director, the Nominating/Corporate Governance Committee may solicit suggestions from incumbent directors, management or others, including stockholders. Individuals recommended by stockholders for nomination as a director should be submitted to the Company’s Corporate Secretary and, if submitted in accordance with the procedures set forth in this proxy statement and the Company’s Amended and Restated Bylaws, will be forwarded to the Nominating/Corporate Governance Committee. The Nominating/Corporate Governance Committee will review all candidates in the same manner, regardless of the source of the recommendation. After conducting an initial evaluation of a candidate, the Nominating/Corporate Governance Committee will interview that candidate if it believes the candidate might be suitable to be a director. The Nominating/Corporate Governance Committee may also ask the candidate to meet with management. If the Nominating/Corporate Governance Committee believes a candidate would be a valuable addition to the Board, it will recommend to the full Board that candidate’s election.

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STOCKHOLDER NOMINEES

Our Amended and Restated Bylaws provide that stockholders seeking to nominate candidates for election as directors or to bring business before an annual or special meeting of stockholders must provide timely notice of their proposal in writing to the Corporate Secretary of the Company. Generally, to be timely, a stockholder’s notice must be received at our principal executive offices, addressed to the Corporate Secretary of the Company, and within the following time periods:

In no event shall an adjournment or postponement of a meeting of the stockholders commence a new time period (or extend any time period) for the giving of the stockholder notice. You should consult our Amended and Restated Bylaws for more detailed information regarding the process by which stockholders may nominate directors. Our Amended and Restated Bylaws are posted on the Corporate Governance portion of our web site located at www.engilitycorp.com.

BOARD LEADERSHIP STRUCTURE

The Board believes that the decision as to whether to combine or separate the chief executive officer and Chairman of the Board positions will depend on the facts and circumstances facing the Company at a given time and could change over time. The Board believes that the Company’s current leadership structure is appropriate and does not adversely affect the Board’s role in risk oversight of the Company.

BOARD’S ROLE IN RISK OVERSIGHT

Risk is inherent with every business. Management is responsible for the day-to-day management of risks the Company faces, while the Board, as a whole and through its committees, has responsibility for the oversight of risk management. In its risk oversight role, the Board has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. Our Board oversees an enterprise-wide approach to risk management, designed to support the achievement of organizational objectives, including strategic objectives, to improve long-term organizational performance and enhance stockholder value. A fundamental aspect of risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. The involvement of the full Board in setting our business strategy is a key part of its assessment of management’s appetite for risk and also a determination of what constitutes an appropriate level of risk for the Company.

We conduct an annual enterprise risk management assessment, which is led by our Director of Internal Audit, who reports directly to our Audit Committee. In this process, we assess risk throughout the Company by conducting interviews of our employees and the Chairman of our Audit Committee, soliciting information

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regarding business risks that could significantly adversely affect the Company. Our Director of Internal Audit annually prepares a report for the Audit Committee, regarding the key identified risks and how we manage these risks to review and analyze both on an annual and ongoing basis. In addition, senior management attends the quarterly Board meetings and is available to address any questions or concerns raised by the Board regarding risk management and any other matters. Each quarter, the Board also receives presentations from senior management on strategic matters involving our operations.

While the Board has the ultimate oversight responsibility for the risk management process, various committees of the Board assist the Board in fulfilling its oversight responsibilities in certain areas of risk. In particular, the Audit Committee focuses on financial and enterprise risk exposures, including internal controls, and discusses with management, the Director of Internal Audit, the Corporate Ethics Officer and the independent registered public accounting firm, our policies with respect to risk assessment and risk management. The Audit Committee also assists the Board in fulfilling its duties and oversight responsibilities relating to the Company’s compliance with applicable laws and regulations, the Code of Conduct and related Company policies and procedures. The Compensation Committee assists the Board in fulfilling its oversight responsibilities with respect to the management of risks arising from our compensation policies and programs as described on page 22 of this proxy statement in “Executive Compensation—Compensation Discussion and Analysis”.

BOARD MEETINGS AND COMMITTEES; POLICY REGARDING DIRECTOR ATTENDANCE AT ANNUAL MEETINGS OF STOCKHOLDERS

During 2012, our Board held two meetings. All directors attended at least 75% of the Board meetings and meetings of the committees of the Board on which the director served, held during the period for which he served as a director, with the exception of Mr. Ream, who was unable to attend the initial meeting of our Board and Audit Committee on July 18, 2012 due to a pre-existing commitment. It is our policy that directors are strongly encouraged to attend the Company’s annual stockholder meetings.

CODE OF ETHICS AND BUSINESS CONDUCT

We have a Code of Conduct that is applicable to all our directors, officers and employees. The Code of Conduct is available on the Corporate Governance pages of our website at www.engilitycorp.com. To the extent required pursuant to applicable SEC regulations, we intend to post amendments to or waivers from our Code of Conduct (to the extent applicable to our chief executive officer, principal financial officer or principal accounting officer) at these locations on our website or report the same on a Current Report on Form 8-K. Our Code of Conduct is available free of charge upon written request to our Corporate Secretary, Engility Holdings, Inc., 3750 Centerview Drive, Chantilly, Virginia 20151.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The current members of our Compensation Committee are Messrs. Tobin, Principi and Ream. All members of the Compensation Committee are “independent directors” within the meaning of the NYSE listing standards and no member is an employee or former employee of the Company. During fiscal 2012, no member of the Compensation Committee had any relationship requiring disclosure under the section “Certain Relationships and Related Party Transactions.” None of our executive officers served during fiscal 2012 as a member of the compensation committee (or other committee serving an equivalent function) of any other entity, one of whose executive officers served as a director on the Board or as a member of the Compensation Committee. None of our executive officers served during fiscal 2012 as a director of any other entity, one of whose executive officers served as a director on the Board or as a member of the Compensation Committee.

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COMMUNICATION WITH THE BOARD OF DIRECTORS

Our stockholders may communicate directly with any chair of the Audit, Nominating/Corporate Governance and Compensation Committees, or to the non-management directors as a group. All communications should be in written form and directed to Thomas O. Miiller, Senior Vice President, General Counsel and Corporate Secretary, Engility Holdings, Inc., 3750 Centerview Drive, Chantilly, Virginia 20151.

Complaints or concerns about our accounting, internal accounting controls and auditing matters, including those regarding the circumvention or attempted circumvention of internal accounting control or that would otherwise constitute a violation of the Company’s accounting policies, may be reported anonymously to our Audit Committee by writing to Engility Holdings, Inc., Attention: Audit Committee, 3750 Centerview Drive, Chantilly, Virginia 20151. Company employees must report any such accounting allegation in accordance with the Company’s Whistleblower Policy. The Company prohibits any employee from retaliating or taking any adverse action against anyone for raising or helping to resolve an integrity questions.

DIRECTOR COMPENSATION

Directors who also serve as employees of the Company do not receive payment for services as directors. The Compensation Committee is responsible for reviewing and making recommendations to the Board regarding all matters pertaining to compensation paid to our directors for Board, committee and committee chair services. Under the Compensation Committee’s charter, the committee is authorized to engage consultants or advisors in connection with its review and analysis of director compensation, though it did not engage any consultants or advisors for this purpose in 2012.

In making non-employee director compensation recommendations, the Compensation Committee takes various factors into consideration, including, but not limited to, the responsibilities of directors generally, as well as committee chairs, and the forms of compensation paid to directors by comparable companies. The Board reviews the recommendations of the Compensation Committee and determines the form and amount of director compensation.

The 2012 compensation program for our non-employee directors is described further below.

The Board believes that our non-employee directors’ compensation program:

2012 DIRECTOR COMPENSATION PROGRAM

Non-employee director compensation consists of an annual cash retainer of $75,000 and an annual equity award of restricted stock units with a grant date fair value of $75,000 and a one year cliff vesting. We pay an annual cash retainer for serving as a Board chairperson of $30,000, an annual cash fee for serving as chair of the Audit Committee of $20,000, an annual cash fee for serving as a committee chair (other than the Audit Committee) of $10,000, and an annual cash fee for serving as an Audit Committee member of $15,000.

For 2013, annual cash retainers, and chair and committee fees, may be elected to be received in restricted stock units, and the settlement of any restricted stock units granted may be deferred by the directors.

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The following table details the total compensation of the Company’s non-employee directors for the year ended December 31, 2012.

2012 Director Compensation

The Company cautions that the amounts reported for these awards may not represent the amounts that the directors will actually realize from the awards. Whether, and to what extent, a director realizes value will depend on the Company’s performance and stock price, and continued service on our Board.

OUR EXECUTIVE OFFICERS

The following table sets forth the information as of March 28, 2013 regarding our executive officers.

Anthony Smeraglinolo—Mr. Smeraglinolo has served as our President and Chief Executive Officer since 2012, and is a member of our Board. Mr. Smeraglinolo rejoined L-3 in December 2010 and served as Executive Vice President, L-3 Services Group, and Acting President, Command & Control Systems and Software division, L-3 Services Group. He had previously served as President of the L-3 Services Group’s Intelligence Solutions Division from 2005 to 2008. From 2008 to 2010 he had been President of the Global Stabilization and Development Solutions division for Dyncorp International. Prior to joining L-3 in 2005 he spent more than 25 years with Harris Corporation, holding leadership positions in finance, program management, business development and operations. He was also senior vice president of business operations at DRS Technologies. Mr. Smeraglinolo has a Bachelor’s degree in Business Management from Fairfield University in Connecticut and a Master of Business Administration from Florida Institute of Technology.

Michael J. Alber—Mr. Alber joined our Company in May 2012, and serves as our Senior Vice President and Chief Financial Officer. Prior to joining Engility, Mr. Alber served as Chief Financial Officer and Treasurer at

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Alion Science and Technology Corporation, a provider of engineering, information technology and operational solutions, from 2007 to 2012, and previously, acting Chief Financial Officer. Prior to joining Alion in 2007, Mr. Alber was with Science Applications International Corporation, a provider of scientific, engineering, systems integration and technical services and solutions, for 17 years, where he served in positions of increasing responsibility, and most recently, as Senior Vice President and Group Controller. Earlier in Mr. Alber’s career, he held senior finance and contract-related positions with Network Solutions Inc., GeoTrans Inc. and System Development Corporation. Mr. Alber received his Bachelor of Science degree from George Mason University in Business Administration and recently completed an Advance Management Program (AMP) at Georgetown University’s McDonough School of Business.

Bantz J. Craddock—General Bantz J. Craddock (USA, Ret.) serves as our Senior Vice President, Strategic Relations. Previously, GEN Craddock served as the President of our Mission Support Services division from July 2012 to December 2012, and President of the MPRI division of L-3 Services Group from January 2010 to July 2012. Prior to joining L-3, he served as the Supreme Allied Commander, Europe and the Commanding General of United States European Command, executive leadership assignments that were the culmination of a 38 year career of military service to the nation. GEN Craddock is a graduate of West Virginia University, holds a Masters of Military Arts and Sciences from the U.S. Army Command and General Staff College. He is the recipient of many U.S. military and international awards and decorations and is a member of the Council on Foreign Relations and serves on the Board of Directors of the Atlantic Council.

John E. Heller—Mr. Heller joined our Company in April 2012, and serves as our Senior Vice President and Chief Operating Officer. Previously, Mr. Heller served as President of our Professional Support Services division. Prior to joining our Company, Mr. Heller served as President of Harris IT Services, a wholly owned subsidiary of Harris Corporation, an international communications and technology company, from July 2010 to April 2012. From June 2007 to July 2010, Mr. Heller served as Vice President & General Manager of DoD Programs for Harris IT Services, which he joined as a result of the acquisition of Multimax Inc. by Harris. At Multimax, Mr. Heller served as President and Chief Operating Officer from June 2006 to June 2007. From 2004 to 2006, Mr. Heller was President and Chief Executive Officer of Netco Government Services Inc., where he led the acquisition and integration of Multimax into Netco. Earlier, Mr. Heller was President and Chief Executive Officer of Rentport Inc., a principal for private equity firm TenX Capital Management, and held a senior management position with Answerthink Consulting. Mr. Heller started his business career at Deloitte & Touche Consulting after serving five years as a logistics officer in the United States Army. Mr. Heller is a graduate of the United States Military Academy at West Point and holds a Master of Business Administration degree from the University of Pittsburgh. Mr. Heller serves on the Business Alumni Association Board of Directors for the Joseph M. Katz Graduate School of Business and College of Business Administration at the University of Pittsburgh.

Thomas O. Miiller—Mr. Miiller serves as our Senior Vice President, General Counsel and Corporate Secretary since 2012. Mr. Miiller previously served as Senior Vice President and General Counsel of L-3 Services Group since he rejoined L-3 in December 2004. He had previously served in various legal positions within L-3 and its predecessor companies from 1987 through 2000. In the years prior to rejoining L-3, Mr. Miiller was Vice President, General Counsel and Secretary of Allied Aerospace, Inc., a privately held defense aerospace company. Before joining L-3 in 1987, Mr. Miiller was an attorney in the Dykema Gossett law firm in Washington D.C. Mr. Miiller has a Bachelor’s degree in Political Science from the University of Utah and a Juris Doctor’s degree from the National Law Center, George Washington University.

Craig R. Reed—Dr. Reed joined our Company in April 2012, and serves as our Senior Vice President, Strategy and Corporate Development. Previously, Dr. Reed was the Founder and Managing Member of Growth Strategy Leaders LLC, a consulting firm, from June 2011 to April 2012, Senior Vice President for Strategy and Corporate Development for DynCorp International from December 2008 to February 2011, and Vice President of Strategic Planning & Business Development for the Mission Systems Intelligence Systems Division of Northrop Grumman, a global security company, from June 2005 to December 2008. Earlier in his career, Dr. Reed was a

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managing director for CSP Associates Inc., served as a senior political appointee at the US Department of Energy, and spent 17 years in increasingly responsible strategy, business development and government relations positions with Lockheed Martin and its predecessor companies. Dr. Reed has a Bachelor’s degree in Political Science and Psychology from the State University of New York at Albany, a Master of International Affairs in International Security Studies and International Business from Columbia University, and Ph.D. in Public Policy from George Washington University.

Randall J. Redlinger—Mr. Redlinger serves as our Vice President of Business Operations and Corporate Ethics Officer since 2012. Mr. Redlinger previously served as Vice President of Security since joining L-3 Services Group in June 2007, and was further appointed Group Ethics Officer in April 2011. Prior to joining L-3 Services Group, Mr. Redlinger had a distinguished 32 year career with the United States Air Force, and mostly recently served as Deputy Executive Director of the Air Force Office of Special Investigations. Mr. Redlinger holds a Bachelors of Science degree in education (BSE) from Southern Illinois University, and is the recipient of numerous U.S. military and federal civil service awards and decorations, including the Bronze Star Medal for service in Iraq.

Michael D. Dallara—Mr. Dallara serves as our Vice President, Administration since 2012. Mr. Dallara previously served as Director, Corporate Development, STRATIS division, of L-3 Services Group, and in various operations and financial management roles within L-3 Services Group’s Intelligence Solutions Division since 2006. Prior to joining L-3 Services Group, Mr. Dallara spent ten years with Harris Corporation, holding staff and management positions in finance and business operations. Mr. Dallara received a master’s degree in national resource strategy from the National Defense University in Washington, D.C. and a Bachelor’s degree in Business Administration from the University of Florida.

Thomas J. Murray—Mr. Murray joined our Company in June 2012, and serves as our Vice President, Human Resources. Previously, Mr. Murray served as Vice President of Human Resources for the Intelligence & Security sector of BAE Systems, a global defense, aerospace and security company, beginning in 2010, and held other Human Resources leadership positions with the same organization since 2000. These positions included Vice President roles in the Information Solutions business area from 2009 to 2010, Vice President of the Customer Solutions Operating Group from 2006 to 2009 and Director of the Communications, Navigation, Information and Reconnaissance business area from 2000 to 2006. Prior to joining BAE Systems, Mr. Murray spent four years with Lockheed Martin, six years with Loral Corporation and eleven years with Amstar Corporation. Mr. Murray holds a Bachelor’s degree from Providence College and Master of Business Administration degree from the University of Pennsylvania.

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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

In accordance with its charter, unless otherwise approved or ratified pursuant to the “Related Person Transaction Policy,” our Audit Committee, or the disinterested members of our Board, reviews and approves all related party transactions. Prior to its approval of any related party transaction, the Audit Committee or the disinterested directors will discuss the proposed transaction with management, including the nature of the related person’s interest in the transaction and all material terms and conditions of the transaction.

AGREEMENTS WITH L-3 RELATED TO THE SPIN-OFF

This section of the proxy statement summarizes material agreements between us and L-3 that govern the ongoing relationships between the two companies after the Spin-Off and are intended to provide for an orderly transition to our status as an independent, publicly traded company. Additional or modified agreements, arrangements and transactions, which will be negotiated at arm’s length, may be entered into between us and L-3 after the Spin-Off. The summaries below of each of these agreements set forth the terms that we believe are material. These summaries are qualified in their entirety by reference to the full text of the applicable agreements, which are filed as exhibits to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Following the Spin-Off, we and L-3 have operated independently, and neither have any ownership interest in the other. In order to govern certain ongoing relationships between us and L-3 after the Spin-Off and to provide mechanisms for an orderly transition, we and L-3 entered into agreements pursuant to which certain services and rights are provided for following the Spin-Off, and we and L-3 will indemnify each other against certain liabilities arising from our respective businesses. The following is a summary of the terms of the material agreements we entered into with L-3.

DISTRIBUTION AGREEMENT

We entered into a Distribution Agreement with L-3 prior to the distribution of our shares of common stock to L-3 stockholders. The Distribution Agreement sets forth our agreements with L-3 regarding the principal actions needed to be taken in connection with our Spin-Off from L-3. It also sets forth other agreements that govern certain aspects of our relationship with L-3 following the Spin-Off.

Transfer of Assets and Assumption of Liabilities. The Distribution Agreement provided for those transfers of assets and assumptions of liabilities that were necessary in advance of our separation from L-3 so that each of Engility and L-3 retained the assets necessary to operate its respective business and retained or assumed the liabilities allocated to it in accordance with the separation plan. The Distribution Agreement also provided for the settlement or extinguishment of certain liabilities and other obligations between and among Engility and L-3. In particular, the Distribution Agreement provided that, subject to the terms and conditions contained in the Distribution Agreement:

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Further Assurances. To the extent that any transfers of assets or assumptions of liabilities contemplated by the Distribution Agreement were not consummated on or prior to the date of the distribution, the parties agreed to cooperate to effect such transfers or assumptions as promptly as practicable following the date of the distribution. In addition, each of the parties agreed to use commercially reasonable efforts to take or to cause to be taken all actions, and to do, or to cause to be done, all things reasonably necessary under applicable law or contractual obligations to consummate and make effective the transactions contemplated by the Distribution Agreement and the ancillary agreements.

Representations and Warranties. In general, neither we nor L-3 made any representations or warranties regarding any assets or liabilities transferred or assumed, any consents or approvals that may be required in connection with such transfers or assumptions, the value or freedom from any lien or other security interest of any assets transferred, the absence of any defenses relating to any claim of either party or the legal sufficiency of any conveyance documents, or any other matters. Except as expressly set forth in the Distribution Agreement or in any ancillary agreement, all assets were transferred on an “as is,” “where is” basis.

The Distribution. The Distribution Agreement governs the rights and obligations of the parties regarding the distribution and certain actions that occurred prior to the distribution, such as the election of officers and directors.

Release of Claims. We and L-3 agreed to broad releases pursuant to which we each released the other and certain related persons specified in the Distribution Agreement from any claims against any of them that arise out of or relate to events, circumstances or actions occurring or failing to occur or any conditions existing at or prior to the time of the distribution. These releases are subject to certain exceptions set forth in the Distribution Agreement.

Release of Claims and Indemnification. We and L-3 agreed to broad releases pursuant to which we each released the other and certain related persons specified in the Distribution Agreement from any claims against any of them existing or arising from any acts or events occurring or failing to occur or alleged to occur or to have failed to occur or any conditions existing or alleged to have existed on or prior to the time of the distribution, including in connection with all activities to implement the distribution and any of the other transactions contemplated by the Distribution Agreement or the ancillary agreements. These releases are subject to certain exceptions set forth in the Distribution Agreement and the ancillary agreements.

The Distribution Agreement provides for cross-indemnities that, except as otherwise provided in the Distribution Agreement, are principally designed to place financial responsibility for the obligations and liabilities of our business with us and financial responsibility for the obligations and liabilities of L-3’s business with L-3. Specifically, each party will indemnify, defend and hold harmless the other party, its affiliates and subsidiaries and each of its officers, directors, employees and agents for any losses arising out of or due to:

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The amount of each party’s indemnification obligations is subject to reduction by any insurance proceeds received by the party being indemnified. The Distribution Agreement also specifies procedures with respect to claims subject to indemnification and related matters. Indemnification with respect to taxes is governed solely by the Tax Matters Agreement.

Insurance. Following the Spin-Off, we are responsible for obtaining and maintaining our own insurance coverage, although we continued to have coverage under certain of L-3’s pre-Spin-Off insurance policies for certain matters that occurred prior to the Spin-Off.

Other Matters Governed by the Distribution Agreement. Other matters governed by the Distribution Agreement include access to financial and other information, intellectual property, confidentiality, access to and provision of records and treatment of outstanding guarantees and similar credit support.

EMPLOYEE MATTERS AGREEMENT

Engility Corporation entered into an Employee Matters Agreement with L-3 Communications Corporation (with us and L-3 as acknowledging parties) that governs the respective rights, responsibilities and obligations of the parties after the Spin-Off with respect to employee related liabilities and our respective health and welfare benefit plans, defined contribution plans, non-qualified deferred compensation plans and equity-based compensation plans (including the treatment of outstanding stock option and restricted stock unit awards thereunder). The Employee Matters Agreement provides for the allocation and treatment of assets, account balances, and liabilities, as applicable, arising out of incentive plans, retirement plans, deferred compensation plans, and employee health and welfare benefit programs in which our employees participated prior to the Spin-Off. Generally, we have assumed or retained sponsorship of, and liabilities relating to, employee compensation and benefits programs or arrangements relating to our current employees and employees formerly associated with our business by assuming the applicable employee benefit programs, or creating substantially similar programs for the benefit of our employees.

TAX MATTERS AGREEMENT

We entered into a Tax Matters Agreement with L-3 that governs the respective rights, responsibilities and obligations of L-3 and us after the Spin-Off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. Following the Spin-Off, we continue to have, as a former business of L-3, several liability with L-3 to the IRS for the consolidated U.S. federal income taxes of the L-3 consolidated group relating to the taxable periods in which we were part of that group. However, the Tax Matters Agreement specifies the portion, if any, of this tax liability for which we will bear responsibility, and L-3 has agreed to indemnify us against any amounts for which we are not responsible. The Tax Matters Agreement also provides special rules for allocating tax liabilities in the event that the Spin-Off is not tax-free. The Tax Matters Agreement provides for certain covenants that may restrict our ability to pursue strategic or other transactions that otherwise could maximize the value of our business and may discourage or delay a change in control that you may consider favorable. Though valid as between the parties, the Tax Matters Agreement is not binding on the IRS.

TRANSITION SERVICES AGREEMENT

Engility Corporation entered into a Transition Services Agreement with L-3 Communications Corporation, under which L-3 Communications Corporation agreed to provide, or cause to be provided, to Engility Corporation certain services for a limited time to help ensure an orderly transition for each of L-3 and us following the distribution.

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Under the Transition Services Agreement, Engility Corporation received certain services (including information technology, financial, telecommunications, benefits support services and other specified services) from L-3 Communications Corporation and/or third party providers at specified prices. These services generally extended for a period of two to eighteen months in most circumstances.

MASTER SUPPLY AGREEMENTS

Engility Corporation entered into two Master Supply Agreements with L-3 Communications Corporation, one as the seller of goods and services, and one as the buyer. Effective upon the distribution, the Master Supply Agreements governs the conversion of certain commercial arrangements between Engility Corporation and L-3 Communications Corporation into third-party contracts based on existing intercompany work orders and L-3 Communications Corporation’s general terms and conditions.

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EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

INTRODUCTION

This Compensation Discussion and Analysis (the “CD&A”) provides a detailed description of our executive compensation philosophy and program for 2012. The CD&A also describes the compensation decisions the Compensation Committee has made under our executive compensation programs and the factors considered in making those decisions. In particular, the CD&A discusses the various elements of our executive compensation program and how and why the Compensation Committee arrived at the particular levels and forms of compensation for each of our named executive officers for 2012. Our named executive officers (“NEOs”) for 2012 were:

EXECUTIVE SUMMARY OF FISCAL 2012 COMPANY PERFORMANCE AND COMPENSATION ACTIONS

Our compensation program is designed to reward our employees for delivering strong financial performance to the benefit of our stockholders. At the same time, we have designed our compensation program to incentivize our employees to continue our 40-year tradition of delivering superior and cost-effective results to our government customers.

Our pay for performance culture seeks to closely align the compensation of our executive officers and other senior leaders with the interests of our stockholders. For this reason, 80% of the annual cash incentive compensation of our executive officers for 2012 was tied to the overall performance of the Company. We measured our corporate performance for 2012 based on objective metrics that we believe drive stockholder returns: (i) revenue; (ii) adjusted earnings before taxes (“AEBT”); and (iii) Days Sales Outstanding (“DSO”).

We at Engility are proud of our company’s performance in our first year as a public company. Since our Spin-Off on July 17, 2012, our stock appreciated 8% through the year ended December 31, 2012, putting us in the top third of our peer group for this period in terms of stock performance. In 2012, we exceeded the revenue and AEBT targets established by our Compensation Committee for the payment of awards under our annual incentive plan despite significant headwinds in our industry and an ambitious cost reduction program that reduced our general and administrative workforce by 40%. Importantly, we accomplished these objectives while continuing to provide the excellent service that our customers expect from us. Set forth below are other significant highlights from our 2012 performance.

2012 BUSINESS HIGHLIGHTS

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SPIN-OFF FROM L-3 COMMUNICATIONS

In connection with the Spin-Off, our NEOs were awarded compensation packages commensurate with the responsibilities of executive officers of a public company. As discussed below, these executive compensation packages were reviewed and approved initially by L-3’s compensation committee, and then approved and ratified by Engility’s Compensation Committee on July 18, 2012 following the Spin-Off. In the case of Messrs. Alber and Heller, who were new hires in 2012, their base salaries and target incentive compensation awards were determined based on arms-length negotiations and competitive market practices consistent with our expectations for the compensation levels of our other NEOs.

Prior to the Spin-Off, our NEOs were compensated under the L-3 compensation program, which consisted primarily of a base salary, annual cash incentives, long term equity incentive awards and certain other benefits and perquisites. The components of L-3’s compensation program that applied to our NEOs while at L-3 is described in the Information Statement filed as an exhibit to the Registration Statement on Form 10 in connection with the Spin-Off, as filed with the SEC on June 27, 2012 and declared effective by the SEC on July 2, 2012 (the “Information Statement”).

HOW PAY IS TIED TO COMPANY PERFORMANCE

Our compensation philosophy supports a pay for performance culture. We target total compensation that comprises base salaries and annual and long-term incentive opportunities to generally approximate market median compensation levels, based on experience, performance, and other individual factors as described in the section “Decision-Making Process and Role of Executive Officers—Compensation Peer Group” beginning on page 34 of this proxy statement. For 2012, the majority of each executive’s target pay opportunity was delivered in the form of annual cash incentive compensation and stock-based long-term incentive awards, where the ultimate value realized is directly aligned with our stockholders’ experience. Our Compensation Committee believes it is appropriate to deliver above market pay when earned by superior performance and below market pay for underperformance.

Our executive compensation program is designed to support Engility’s mission to maximize stockholder value. The specific objectives of Engility’s program include the following:

To achieve these specific objectives, Engility’s executive compensation programs are guided by the following core principles:

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EXECUTIVE COMPENSATION PRACTICES

Below we highlight certain executive compensation practices that we have implemented to drive performance, and also the practices we have not implemented because we do not believe they serve our stockholders’ long-term interests.

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WHAT WE PAY AND WHY: ELEMENTS OF COMPENSATION

We have three elements of total direct compensation: base salary, annual incentive and long-term equity-based incentive compensation. We also provide our NEOs with a reasonable level of benefits and modest perquisites, including optional participation in a deferred compensation plan. As illustrated in the following charts, 75% and 65% of total target direct compensation (excluding one-time Founders Grants discussed below) for our Chief Executive Officer and other NEOs, respectively, was either performance-based or long-term incentive.

Prior to the Spin-Off, L-3’s compensation committee established initial base salaries and target annual incentive compensation and long-term equity compensation awards for our NEOs (including the Founders Grants), which were effective as of the Spin-Off. These amounts were then ratified and approved by the Engility Compensation Committee after the Spin-Off on July 18, 2012.

Base Salary

We pay base salaries to attract talented executives and to provide a fixed base of cash compensation. The Compensation Committee seeks to set base salaries for our NEOs within a competitive range around market median. In connection with the Spin-Off, the L-3 compensation committee reviewed the base salaries for each of Messrs. Smeraglinolo, Craddock and Miiller, and determined that it was appropriate to increase their respective base salaries effective as of the Spin-Off in recognition of the additional responsibilities that they would assume as executives of a public company. The L-3 compensation committee also reviewed the offer letters for Messrs. Alber and Heller, each of whom were hired by Engility in 2012 in anticipation of the Spin-Off, and determined the appropriate base salaries for each of these individuals. As discussed above, these base salary amounts were then ratified and approved by the Engility Compensation Committee on July 18, 2012.

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Annual Incentive Awards

Following the Spin-Off, our Compensation Committee adopted an annual incentive compensation program for 2012 that was aligned with Engility’s performance objectives, derived in part from our experience with L-3’s executive compensation program and consistent with market practice for public companies within our peer group. The AEBT and revenue targets for the 2012 program were based on the Company’s financial projections in its 2012 annual operating plan. We provide annual incentive awards to our executive officers and other senior leaders to drive the achievement of key business results and to recognize individuals based on their specific and measurable contributions to those results. Annual incentive awards are determined under our 2012 Cash Incentive Plan, and paid in accordance with the following formula, as discussed in more detail below.

Annual Incentive Award Targets

Each of our NEOs has an annual incentive award target, expressed as a percentage of base salary earned during the fiscal year. These target award amounts were set at levels that generally provided our NEOs with target total cash compensation that was below market median, but allowed for the possibility of paying above-market cash compensation for superior performance. The 2012 annual incentive award targets for our NEOs are set forth below.

Financial Rating

As previously noted in “How Pay is Tied to Performance” above, we believe that our executive compensation programs should be tightly linked to overall company performance. For this reason, 80% of the annual incentive award for our NEOs for 2012 was based on the following three performance measures that we believe are key

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factors in driving overall corporate performance and increasing stockholder value: AEBT, Revenues and DSO. Collectively, these three performance measures are referred to as the “Financial Rating.” The 2012 target values and weightings are described in the table below.

In calculating AEBT, the Compensation Committee adjusts net income, as reported in the consolidated financial statements filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, for the following items that the Company’s management believes are not considered core to the Company’s business or otherwise not considered operational or because these charges are non-cash or non-recurring:

The ultimate payout for the Financial Rating is based on our level of performance against the target values set forth in the tables below, based on the 2012 full year performance of the Company against these measures. Actual performance for each financial measure is measured against the threshold, target and ceiling values set forth below. If the calculated financial measure falls between these values, linear interpolation is used to arrive at the final percentage payout for such measure.

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The table below shows the financial performance actually attained by the Company, and the corresponding financial ratings for the 2012 fiscal year.

Personal Rating

The individual performance of each of our NEOs is evaluated following the end of the fiscal year on a scale from 1 to 5, as set forth in the table below, based on the full year performance of our NEOs. Personal ratings, which represent 20% of the annual incentive award, are based on the assessment of a NEO’s performance relative to pre-determined qualitative individual goals established by the Compensation Committee. The personal rating can range from 0% to 200% of target, and is subject to negative discretion of the Compensation Committee in the event that the Financial Rating is below the 100% target level.

For 2012, the individual goals varied by executive and were based on specific key Company-wide or business unit objectives, personal business objectives, critical business outcomes and achievements, leadership, progress towards our strategic realignment and successful Spin-Off outcomes.

Our Chief Executive Officer submits to the Nominating/Corporate Governance Committee a self-assessment of his performance addressing his overall leadership and performance with respect to previously approved objectives. The Nominating/Corporate Governance Committee evaluates the Chief Executive Officer’s performance through a process that solicits input from each member of the Board, and then delivers its assessment of his performance to the Compensation Committee, which, in turn, evaluates the Chief Executive Officer’s performance as it relates to compensation. The Compensation Committee determines our Chief Executive Officer’s performance personal rating and provides its recommendation to the Board of Directors for approval.

Our Chief Executive Officer also provides individual performance assessments and submits recommended personal ratings to the Compensation Committee for all executives who report directly to him, including our other NEOs, for the Compensation Committee’s consideration.

In determining the Personal Rating Percentages of our NEOs for 2012, the Compensation Committee considered the 2012 performance of each executive as described below:

Anthony Smeraglinolo. Under Mr. Smeraglinolo’s leadership, Engility successfully completed its Spin-Off from L-3 on July 17, 2012. As part of this process, Mr. Smeraglinolo assembled an executive team of seasoned industry veterans, drawing from both existing Engility employees and key new hires. Following the Spin-Off, Mr. Smeraglinolo oversaw a smooth transition for our customers and employees that minimized disruption to our

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business and established the Engility brand in the marketplace. Mr. Smeraglinolo also led a comprehensive initiative to streamline Engility, including consolidating seven legacy business units into a single organization and implementing significant reductions in our administrative and overhead costs. Engility completed these cost reduction measures ahead of schedule, and the new Engility organizational structure was in place and operational on January 1, 2013.

Michael J. Alber. Mr. Alber joined Engility in May 2012 as our Chief Financial Officer. His initial focus was to establish relationships with potential investors and the financial community in support of the Spin-Off. He was able to present a clear and concise view of the market, our investment thesis and the possible challenges that we faced as a new company. As a result of these initiatives, Engility raised $335 million at the time of the Spin-Off, and secured an additional $65 million revolving line of credit. Following the Spin-Off, Mr. Alber oversaw the design of our financial reporting and forecasting capabilities, successfully consolidating our financial and information technology infrastructures from many disparate systems to one system within Engility.

John E. Heller. Mr. Heller joined Engility in April 2012, initially as President of our Professional Support Services segment. Mr. Heller provided significant leadership in our company’s transition to an independent publicly traded company. Following the Spin-Off, Mr. Heller was instrumental in the development and execution of the plan to integrate our business units into a single operating structure. In addition, he led the assessment of the capabilities, markets and service offerings of our business portfolio, and partnered with our Senior Vice President of Strategy and Corporate Development to identify significant new business pursuit priorities. In recognition of his efforts and leadership, Mr. Heller was promoted to our Chief Operating Officer effective January 1, 2013.

Bantz J. Craddock. Mr. Craddock served as the leader of the Mission Support Services (“MSS”) segment from the time of the Spin-Off until January 1, 2013. During this period, he effectively managed the MSS business and exceeded the internal financial performance goals for this segment. Mr. Craddock also led the development of improved systems and processes for Engility, fostered strong division and cross-division communications and supported the transitional activities associated with the Spin-Off and our business realignment. Effective January 1, 2013, Mr. Craddock successfully formed Engility’s Strategic Relations office, and became our Senior Vice President of Strategic Relations.

Thomas O. Miiller. Mr. Miiller was instrumental in Engility’s successful Spin-Off from L-3. His accomplishments included serving a leadership role in securing a private letter ruling from the U.S. Internal Revenue Service as to the tax-free nature of the Spin-Off, overseeing the filing of the Information Statement with the SEC and negotiating with L-3 the transaction documents related to the Spin-Off. Mr. Miiller also oversaw the creation of Engility’s SEC compliance and corporate governance functions in preparation for Engility’s independence from L-3. Following the completion of the Spin-Off, Mr. Miiller led several transitional initiatives, including the formation of new international licensing and compliance functions that were previously administered by L-3. Mr. Miilller also reorganized Engility’s contract organization, streamlining the operations of this group and overseeing key new hires. Mr. Miiller further developed effective policies and procedures to manage litigation and claims.

2012 Annual Incentive Award Payments

Based on the formula and performance described above, the Compensation Committee calculated the cash bonuses payable to our NEOs for the 2012 fiscal year as set forth in the table below:

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Long-Term Incentive Awards

We provide long-term incentive (“LTI”) awards to our officers, including our NEOs, in the form of equity grants, to align the interests of those individuals with those of our stockholders. The target LTI levels for each of our NEOs were initially set by the L-3 compensation committee, and then ratified and approved by our Compensation Committee following the Spin-Off. The target LTI for each of our NEOs is determined based on the ability of each individual to influence the overall performance of our company. For this reason, the Compensation Committee set the target LTI at two times base salary for our Chief Executive Officer, at 1.5 times base salary for our Chief Financial Officer and one times base salary for our other NEOs.

2012 Founders Grants

In connection with our Spin-Off, each of our executive officers, including our NEOs, received special, one-time grants of restricted stock units associated with the founding of Engility as a public company (the “Founders Grants”) in order to better align the economic interest of our executive officers with those of our stockholders. Further, these grants enhance stock ownership of our executive officers and support the retention of these individuals at a critical time in our development and growth as a stand-alone company. As one-time grants, these awards are not considered part of the Company’s ongoing annual long-term incentive awards available to each executive officer. Prior to the Spin-Off, the L-3 compensation committee determined to set the amount of Founders Grants at 1.5 times the target LTI for each of the NEOs, based on market practice for other spin-offs in our industry. To encourage retention, the L-3 compensation committee determined that the Founders Grants would not vest until the third anniversary of the grant date. The vesting of these grants fully accelerate upon a change in control of the Company. The Founders Grants were ratified and approved by the Engility Compensation Committee on July 18, 2012, after the Spin-Off.

2012 L-3 Equity Awards

Prior to the Spin-Off, as employees of L-3, each of Messrs. Smeraglinolo, Craddock and Miiller received grants of restricted stock units for L-3 common stock in February 2012 in accordance with L-3’s long-term incentive program. In addition, Messrs. Smeraglinolo and Craddock also received stock option grants to acquire L-3 common stock under the same program. Messrs. Alber and Heller did not receive these grants as they were not employees of L-3 at the time that these grants occurred.

As discussed in the Information Statement, L-3 provided these equity awards to its executive officers and key employees to align the interests of such persons with L-3’s stockholders by linking a meaningful portion of executive compensation to long-term stockholder value creation and financial success. In accordance with the terms of the Spin-Off transaction, upon the effective date of the Spin-Off, these L-3 awards automatically converted into a number of Engility awards with an equivalent dollar value on the conversion date, and with the same terms and conditions as the original award. The restricted stock units cliff vest on the third anniversary of the grant date and the stock options vest ratably on each of the three successive anniversaries of the grant date. The vesting of these grants fully accelerate upon a change in control of the Company. The table below summarizes the L-3 equity awards that were granted to Messrs. Smeraglinolo, Craddock and Miiller in 2012, as converted into Engility equity awards upon the Spin-Off.

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Future Annual Grants

As discussed beginning on page 36 of this proxy statement, “2013 Executive Compensation Preview and Summary”, for 2013 we implemented a long-term equity-based incentive program consisting of a mix of time-based restricted stock units and performance-based restricted shares or units, weighted more heavily towards performance-based awards to further align the interests of our executives with our stockholders.

Additional Compensation Elements

Executive Benefits and Perquisites

Deferred Compensation Plans. In connection with the Spin-Off, we created two deferred compensation plans for the purpose of assuming the prior contributions and then current deferral elections made by our employees under two L-3 deferred compensation plans. Effective as the Spin-Off, our Compensation Committee adopted the following nonqualified deferred compensation plans: the Engility Corporation Deferred Compensation Plan I and the Engility Corporation Deferred Compensation Plan II. We continue to operate these plans to manage the contribution and deferral elections made by our employees prior to the Spin-Off, but no future deferral elections are permitted under these plans following the Spin-Off. Following the Spin-Off, Messrs. Smeraglinolo and Craddock were the only NEOs who made contributions to a deferred compensation plan, the Engility Corporation Deferred Compensation Plan II.

We have also adopted the nonqualified Engility 2013 Deferred Compensation Plan (the “2013 Deferred Compensation Plan”), which became effective on January 1, 2013, to offer highly compensated senior employees, including our NEOs, an opportunity to save for their future financial needs at little cost to the Company. This plan essentially operates as an unsecured, tax-advantaged personal savings account, and it contributes to our attractiveness as an employer. The 2013 Deferred Compensation Plan allows for voluntary deferrals of up to 75% of base salary and 100% of annual cash incentive awards into an unfunded, nonqualified account. There are no company matching contributions under the 2013 Deferred Compensation Plan, and deferred amounts earn interest at the prime rate, which is funded by the Company. None of our NEOs currently participate in the 2013 Deferred Compensation Plan.

Perquisites. We provide our NEOs with limited perquisites that we feel serve Engility’s interests. In 2012, our NEOs (excluding Messrs. Miiller and Alber) received executive health benefits. In addition, all of our NEOs received supplemental life insurance coverage for 2012.

Change in Control. As described above, the vesting of our executives’ outstanding stock options and restricted stock units fully accelerate upon a change in control of the Company. The Company also provides a separate severance plan that applies in connection with a change in control of the Company. Under the Engility Holdings, Inc. Change in Control Severance Plan, adopted by the Board of Directors on July 17, 2012, our executive officers, including the NEOs, may receive a cash severance benefit for a termination by the Company in connection with or following a change in control, other than for cause, disability or death. In such situations, the NEO will receive an amount equal to the sum of (i) his base salary and average bonus over the past three years, or such shorter period as the NEO has been with the Company, multiplied by the applicable severance multiple, and (ii) either (A) if determinable on the date of termination, the amount of the NEO’s bonus actually payable to him for the fiscal year in which the change in control occurs or (B) the NEO’s average bonus over the past three years, or such shorter period as the NEO has been with the Company, multiplied by the applicable bonus fraction. The severance multiple is 3 for the Company’s Chief Executive Officer and Chief Financial Officer, and 2.5 for all other NEOs; the bonus fraction is equal to a fraction, the numerator of which is equal to the number of days the NEO was employed during the fiscal year in which the termination occurs and the denominator of which is equal to 365. There are no tax-gross ups on any benefits payable under the Change in Control Severance Plan.

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Severance Plan. On December 27, 2012, the Compensation Committee approved the Engility Holdings, Inc. Severance Plan (the “Severance Plan”), effective as of January 1, 2013. Given that we do not have employment agreements with our executives, the purpose of the Severance Plan is to provide competitive severance benefits to the Company’s executive officers, including our NEOs, upon the occurrence of a qualifying separation event. Under our Severance Plan, our NEOs may receive a cash severance benefit in connection with a termination of employment “without cause,” a separation from service for “good reason,” or a separation due to death or long-term disability. In such situations, the NEO would receive, in addition to accrued and unpaid benefits and a pro rata bonus, an amount equal to his base salary and average bonus over the past three years, or such shorter period as the NEO has been with the Company, multiplied by the applicable severance multiples. The severance multiple is 2 for the Company’s Chief Executive Officer and Chief Financial Officer and 1.5 for all other NEOs. There are no tax-gross ups on any benefits payable under the Severance Plan.

For information on the amounts that would be payable under the Severance Plan and Change in Control Severance Plan, see “Executive Compensation—Potential Payments Upon Change in Control or Termination of Employment” beginning on page 44 of this proxy statement.

Signing Bonuses. We provided signing bonuses to Messrs. Heller and Alber of $150,000 and $50,000, respectively, as an inducement to join Engility. The competition for executive talent is intense in our industry and each of Messrs. Heller and Alber held senior level positions at other firms at the time that we were seeking to incentivize them to join our company. As Messrs. Heller and Alber joined Engility prior to the completion of the Spin-Off, they were also assuming a certain level of risk that the Spin-Off might not occur due to market conditions or other factors outside of their control. The amount of the signing bonuses were based on these considerations, and also on the level of compensation and other benefits that Messrs. Heller and Alber would forego in leaving their respective companies. The L-3 compensation committee therefore determined that it was appropriate to include signing bonuses in their respective compensation packages.

HOW WE MAKE COMPENSATION DECISIONS

Risk Considerations

The Compensation Committee reviews the risks and rewards associated with the Company’s compensation program. The program is designed with features that mitigate risk without diminishing the incentive nature of the compensation. We believe our compensation program encourages and rewards fiduciary responsibility, prudent business judgment and appropriate risk-taking over the short-term and the long-term.

The Compensation Committee, with the participation of Frederic W. Cook & Co., Inc. (“Cook & Co.”) and our management, conducted a risk assessment of the Company’s compensation program to assess whether risks arising from the program are reasonably likely to have a material adverse effect on the Company. The Compensation Committee noted that our program is designed so that it does not include compensation mix overly weighted toward annual incentives, highly leveraged short-term incentives, uncapped or “all or nothing” bonus payouts or unreasonable performance goals. The Compensation Committee also included several design features in our cash and equity incentive programs that reduce the likelihood of excessive risk-taking, including the use of reasonably attainable and balanced performance metrics, maximum payouts at levels deemed appropriate, Compensation Committee oversight and direction over executive compensation program, the presence of severance plans for executives, and balance between compensation elements that focus on short-term financial and operating performance and those that reward for longer-term Company performance and stock appreciation, especially when combined with our executive stock ownership guidelines and anti-hedging policy. Additionally, our executive compensation “clawback” policy allows the Company to recover performance-based compensation under certain circumstances. Based on its assessment, the Compensation Committee believes that our compensation program does not motivate risk taking that could reasonably be expected to have a material adverse effect on the Company.

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Use of Market Data and Competitive Compensation Positioning

How Do We Use “Benchmarks”?

Our benchmark for base salary is designed to be generally competitive with market pay levels, usually defined as the median (50^th percentile) of our peer group. The Compensation Committee’s desire is to provide total short-term cash opportunities near the peer group median for meeting targeted annual goals, but allow for upside for meeting or exceeding performance goals approved by the Compensation Committee. The Compensation Committee also targets total potential compensation opportunities (including equity awards) generally at median of our peer group, with the opportunity for above market-pay provided the Company and the executive deliver superior performance. Similarly, our compensation programs provide for significantly reduced or no incentive compensation for corporate and personal performance that falls below threshold performance levels.

We chose the base salary benchmark primarily to target a market competitive base salary as the norm. Our benchmarks for short-term cash bonus and total compensation opportunities reflect our desire that “target” performance results in median, market competitive incentives similar to our base salary objective, but, consistent with our goal of driving the achievement of business and financial objectives that help create stockholder value and share price appreciation, rewards above-average performance with above-average cash and total compensation. These benchmarks also reflect that we compete with larger companies for executive talent that may offer base and total target compensation opportunities above the market median.

To help assess how our executives are compensated in relation to our benchmarks, the Compensation Committee collects compensation data from a peer group. However, these survey results will be used by the Compensation Committee solely as a baseline reference, in part because the survey data does not provide full insight as to actual performance, responsibilities, tenure, prior experience and other relevant information needed to accurately assess position comparability and the competitiveness of our compensation packages. Accordingly, certain executives may be compensated below or above the Compensation Committee’s benchmarks based on various factors consistent with our flexible compensation philosophy. Our process and rationale for determining our peer group for 2012 are described below under “Compensation Peer Group.”

Decision-Making Process and Role of Executive Officers

Role of the Compensation Committee

Our executive compensation program is administered by the Compensation Committee, which is ultimately responsible for the review and approval of compensation for our Chief Executive Officer and all executives that directly report to him, including our other NEOs. Our Chief Executive Officer’s compensation is further approved by the Board. Key areas of responsibility for the Compensation Committee are described in “Corporate Governance—Committees of the Board of Directors—Compensation Committee” on page 10 of this proxy statement.

Role of Management and Our Chief Executive Officer

The Company’s human resources, finance and legal departments assist the Compensation Committee in the design and development of the competitive compensation program by providing data and analysis to the Compensation Committee in order to ensure that Engility’s programs and incentives align with and support the Company’s business strategy. Management also recommends plan architecture, incentive plan metrics, performance targets and other plan objectives to be achieved, based on expected Company performance and subject to Compensation Committee approval.

On an annual basis, our Chief Executive Officer reviews the performance of those executives that report directly to him, including our other NEOs, relative to their individual goals and Company performance and submits recommendations to the Compensation Committee for proposed base salary adjustments, annual incentive plan

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target opportunities and personal ratings, and grant date target values for long-term incentive awards. Our Chief Executive Officer also provides the Compensation Committee with an annual self-assessment of his own performance, but has no role in determining his own compensation. No other NEO participates in the setting of compensation for himself or any other NEO.

Role of the Compensation Consultant

The Compensation Committee has the sole authority to select, retain, compensate and replace outside consultants to provide it with advice on various aspects of executive compensation design and delivery. The L-3 compensation committee retained Cook & Co. to provide information, analyses and advice regarding Engility’s executive compensation decisions through the Spin-Off. Following the Spin-Off, the Engility Compensation Committee made the determination to continue to utilize Cook & Co. as its independent compensation consultant, and subsequently engaged Cook & Co. to advise the Compensation Committee on executive and non-employee director compensation; however, in order to remain independent, Cook & Co. performs no other services for the Company. In March 2013, the Compensation Committee evaluated whether any relationship with Cook & Co. raises any conflict of interest or impaired Cook & Co.’s independence and determined that it did not.

Cook & Co. provides research, data analyses, and design expertise in developing compensation programs for our executives. In addition, Cook & Co. keeps the Compensation Committee apprised of regulatory developments and market trends related to executive compensation practices. Cook & Co. does not determine or recommend the exact amount or form of executive compensation for any of our NEOs. A representative of Cook & Co. generally attends meetings of the Compensation Committee, is available to participate in executive sessions and communicates directly with the Compensation Committee.

Compensation Peer Group

We use a comparator group of peer companies as a key input when making compensation decisions. Specifically, our peer group is used:

The peer group companies for 2012 are listed below. Peer companies were chosen based on the following criteria:

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ADDITIONAL INFORMATION

Stock Ownership Guidelines

We have stock ownership guidelines for executives, including our NEOs. These guidelines are designed to align the executives’ long-term financial interests with those of stockholders. The stockholder ownership guidelines are as follows:

Shares that count towards compliance with the guidelines include:

While there is no required time period for executives to gain compliance with the ownership guidelines, until the executive is compliant, the executive is required to retain 50% of the net shares, after settlement of taxes and exercise price (if any), acquired pursuant to the vesting or earn-out of restricted stock, restricted stock units, performance shares, performance share units, or the exercise of stock options. The Compensation Committee may waive the applicability of the ownership guidelines for financial hardship or similar circumstances, and may reduce the stock ownership multiples and/or retention percentages to facilitate pre-retirement financial diversification.

Trading Controls and Prohibition on Speculative Transactions

Executive officers, including our NEOs, are required to receive the permission of the Company’s General Counsel prior to entering into any transactions in Company securities, including any pledge of Company securities. Generally, trading is permitted only during announced trading periods. Executive officers are prohibited from entering into hedging transactions, or engaging in other types of speculative transactions in our company stock, including the use of puts, calls and short sales.

Timing of Equity Grants

Except with respect to new hires or promotions, we generally determine annual executive equity compensation awards each year at a meeting of our Compensation Committee in the first calendar quarter of such year, and this meeting is scheduled no later than December 31^st of the preceding year. In the event of a “new hire,” “promotional” or other ad hoc equity award for executive officers, that equity award shall be approved by the Compensation Committee, unless the Compensation Committee has expressly delegated the authority to approve

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ad hoc equity awards to the Company’s Chief Executive Officer, and it shall be effective on the first trading day of the month that immediately follows the the approval date of such ad hoc equity award, unless the Compensation Committee shall specify an alternate date. The per share exercise price of an option award shall be the closing price of the Company’s common stock on the NYSE on the applicable effective date as specified above. All other equity-based awards shall be determined in relation to such price where applicable. This policy applies to awards to all eligible employees, not just our executive officers. The Compensation Committee may make an exception to the general policies above when it determines an exception is in the best interest of the Company or based on other special circumstances.

Executive Compensation Recovery Policy

In April 2013, the Board, upon the recommendation of the Compensation Committee, adopted a policy that provides for recoupment of performance-based compensation from our executive officers and our chief accounting officer (each, a “Covered Officer”) in the event of a material restatement of the Company’s financial results. In such a situation, the Board will review all performance-based compensation awarded to or earned by each Covered Officer on the basis of the Company’s financial performance during fiscal periods materially affected by the restatement. This would include annual cash incentive awards and all forms of performance-based compensation. If, in the Board’s view, the compensation related to the Company’s financial performance would have been lower if it had been based on the restated results, the Board will, to the extent permitted by applicable law, seek recoupment from each Covered Officer of any portion of such performance-based compensation as it deems appropriate after a review of all relevant facts and circumstances.

Tax Considerations

Section 162(m) of the Internal Revenue Code, as amended (the “Code”), generally limits tax deductibility of compensation paid by a public company to its chief executive officer and certain other highly compensated executive officers to $1 million in the year compensation becomes taxable to the executive, subject to an exception for performance-based compensation that meets specific requirements. The Compensation Committee considers the impact of this rule when developing and implementing its executive compensation programs; however, the Compensation Committee reserves the right to provide compensation that is not tax deductible if it believes the value in doing so outweighs the value of the lost tax deduction.

We anticipate that payments under the 2012 Cash Incentive Plan are deductible by the Company. Deductions for the 2012 award of the Founders Grants will be limited when the restricted stock units vest in 2015 to the extent that the fair market value of the restricted stock units that vest and all other non-qualifying compensation paid in that year exceed $1 million.

2013 Executive Compensation Preview and Summary

The following is a brief summary of the actions taken by the Compensation Committee during the first quarter of 2013 with respect to executive officer compensation matters for 2013. The Compensation Committee has again engaged Cook & Co. to serve as the Compensation Committee’s independent compensation consultant for 2013. Overall, we believe that our compensation programs are competitive from a market standpoint and consistent with our 2013 compensation policies and objectives, and further enhance our pay for performance philosophy. Highlighted below are some of the key actions and decisions with respect to our executive compensation programs for fiscal 2013, as approved by the Compensation Committee:

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An AICP participant can receive up to two times his or her target bonus if the maximum levels are achieved under both the corporate and individual components of the 2013 AICP. In addition, the Company must achieve at least the threshold target value AEBT, or no cash bonuses will be payable to AICP participants even if the Company exceeds the threshold value for DSO.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on its review and discussions with management, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Engility Holdings, Inc.

Compensation Committee

William G. Tobin (Chairman)

Anthony Principi

Charles S. Ream

The foregoing Report of the Compensation Committee shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that Section. The Report of the Compensation Committee shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or under the Exchange Act, regardless of any general incorporation language in such filing.

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2012 SUMMARY COMPENSATION TABLE

The following table provides summary information concerning compensation paid or accrued by us to or on behalf of our NEOs.

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2012 GRANTS OF PLAN-BASED AWARDS

The following table summarizes awards made to our NEOs during the year ended December 31, 2012, including equity and non-equity awards originally granted by L-3 prior to the Spin-Off (indicated by *). In accordance with the terms of the Spin-Off, upon the effective date of the Spin-Off (July 18, 2012), the L-3 awards held by the NEOs automatically converted into a number of Engility awards with an equivalent dollar value on the conversion date and with the same terms and conditions as the original awards.

Each NEO also received a special, one-time Founders Grant (indicated by †) associated with the founding of Engility as a new public company. Founders Grants were provided as a one-time award and are not to be considered part of the regular incentive value granted to each NEO. For further discussion of these Founders Grants, see “Executive Compensation—Compensation Discussion and Analysis—Long-Term Incentive Awards—2012 Founders Grants.”