Securities Exchange Act of 1934 May 14, 2012 MAY 14, 2012 independent registered public accounting firm. The terms of Messrs. Hamot and Siegel, the Class D Directors, will continue until their respective successors are elected and qualified. of Ground Floor, Ryder Court 740 Advisors, LLC DCD.C. 20549Filed by the Registrant x Filed by a Party other than the Registrant ¨Check the appropriate box:Filed by the Registrant þFiled by a Party other than the Registrant Check the appropriate box: ¨ Preliminary Proxy Statement ¨ Confidential, for Use of the Commission Only (as Permittedpermitted by Rule 14a-6(e)(2))xRDefinitive Proxy Statement ¨ Definitive Additional Materials ¨ Soliciting Material under § 240.14a-12§240.14a-12TELOS CORPORATION(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):xTelos Corporation(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): ONE OF THE BOXES NEEDS TO BE CHECKED R No fee requiredrequired.¨ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: ¨ Fee paid previously with preliminary materials. ¨ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing fee for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount previously paid:Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: November 16, 2009November 16, 2009May 14, 2012 at 12:00 p.m., Eastern StandardDaylight Savings Time, for the following purposes: 1. ELECTION OF DIRECTORS.DIRECTORS: To elect nine Class A/B Directors to the Board of Directors to serve until the 20102013 Annual Meeting of Stockholders or until their successors are elected and qualified; and 2. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM: To ratify the selection of BDO USA, LLP to serve as the Company’s independent registered public accounting firm; and 3. OTHER BUSINESS.BUSINESS: To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.September 28, 2009April 13, 2012 as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.October 19, 2009NOVEMBER 16, 2009November 16, 2009 atMay 14, 2012, 12:00 p.m., Eastern StandardDaylight Savings Time, or any adjournment of it, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders (“Annual Meeting Notice”). The Company expects to mailbegin mailing the Annual Meeting Notice, this Proxy Statement, and the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 20082011 (the “2008“2011 Form 10-K”) to all stockholders of record on or about October 19, 2009.April 23, 2012. On the same date, the proxy card will be mailed to all holders of record of the Company’s Common Stock.The Company’s Board of Directors is soliciting proxies solely for the election of the Class A/B Directors.Directors and the ratification of the Company’s independent registered public accounting firm.October 19, 2009April 23, 2012 together with a Proxy Card (to holders of Common Stock only), the Annual Meeting Notice and the Company’s 20082011 Form 10-K.November 16, 2009:May 14, 2012: The Annual Meeting Notice, this Proxy Statement and the Company’s 20082011 Form 10-K are available at HTTP://BNYMELLON.MOBULAR.NET/BNYMELLON/TLSRP.September 28, 2009April 13, 2012 (“Record Date”). As of September 28, 2009,April 13, 2012, there were 33,552,96835,908,961 shares of Class A Common Stock;Stock and 4,037,628 shares of Class B Common Stock outstanding and entitled to vote at the Annual Meeting. The purpose of the Annual Meeting is to allow the holders of the Class A and Class B Common Stock to elect nine Class A/B Common Directors, and to vote on any other issue before the meeting.1onin the election of Class A/B Common Directors and any other issue to be decided at the Annual Meeting. Cumulative voting is not permitted.A quorum consistsThe affirmative vote of stockholders representing, either in person or by proxy, a majority of the outstanding shares of each class of stock entitled to votevotes cast at the Annual Meeting. Abstentions are considered in determining the presence ofMeeting if a quorum but will not affectis present is required to ratify the plurality vote required forappointment of the election of directors. Company’s Common Stock may vote by (1) signing, dating and mailing the enclosed proxy card in the postage paid envelope provided or (2) attending the Annual Meeting and voting their shares in person. If shares of the Common Stock are held in the name of a bank, broker or other nominee, the beneficial owner of those shares must provide the bank, broker, or other nominee with instructions on how to vote those shares by following the voting instructions provided by the bank, broker, or other nominee. A beneficial holder may not vote any shares held in the name of a bank, broker, or other nominee unless the beneficial holder obtains a “legal proxy” from the bank, broker, or other nominee. Company’s Public Preferred Stock would have been eligible to vote at the Annual Meeting on the election of such Class D Directors and on no other matter before the Annual Meeting; however, since no nominations for Class D Directors were received, holders of Public Preferred Stock are not eligible to vote on any issue before the Annual Meeting. Company’s Common Stock who plan to attend the meeting in person should mark the attendance box on their proxy card and bring the proxy card with them to the meeting. Beneficial owners of the Company’sCommon Stock and the Public Preferred Stock that is held by a bank, broker or other nominee must provide adequate proof of ownership.Inownership. In addition, due to security requirements at the Company’s headquarters, personal identification will be required for admission to the Annual Meeting. Company’s Common Stock who has provided a proxy may revoke the proxy at any time before the underlying shares are voted at the Annual Meeting by: (1) Executing a proxy dated later than the most recent proxy given and mailing it to: (2) Appearing in person and voting using a ballot at the Annual Meeting; or (3) Filing an instrument of revocation with the Inspector of Elections at the Annual Meeting. 2Company’s Common Stock and are designated “Class A/B Directors.” At any time that dividends on the Company’s Public Preferred Stock are in arrears and unpaid for three consecutive full semi-annual periods, the holders of the Company’s Public Preferred Stock are entitled to elect two members to the Company’s Board of Directors. Accordingly, on June 18, 2007, the holders of the Company’s Public Preferred Stock elected Seth W. Hamot and Andrew R. Siegel to the Company’s Board of Directors. All members of the Company’s Board ofClass A/B Directors hold office until the earlier of the next annual meeting of stockholders orand until their successors are elected and qualified.Company’s Common Stock:Stock: John B. Wood, Bernard C. Bailey, David Borland, William M. Dvoranchik, Lt. Gen. (ret) Bruce R. Harris, Lt. Gen. (ret) Charles S. Mahan, Jr., Maj. Gen. (ret) John W. Maluda, Robert J. Marino, and Vice Admiral (ret) Jerry O. Tuttle.Name Age NameAgeBiographical Information48 46As ofSince January 2008, Mr. Wood serveshas served as Enterworks, Inc.’s Non-Executive Chairman. Prior to joining the Company, Mr. Wood worked on Wall Street for Dean Witter Reynolds, UBS Securities, and his own boutique investment bank. Mr. Wood graduated from Georgetown University where he earned a Bachelor of Science in Business Administration in finance and computer science. Mr. Wood also serves on several advisory boards and one foundation board. Mr. Wood is the brother of Mr. Emmett J. Wood, the Vice President, Marketing, of the Company.3Name Age NameAgeBernard C. Bailey 58 56ITinformation technology services firm, since 2006. Mr.Dr. Bailey’s career spans over two decades of management experience in the high technology and security industries. He served most recently from August 2002 to September 2006 as the presidentPresident and CEO of Viisage Technology, Inc. (NASDAQ:VISG), a leading provider of advanced technology identity solutions. Under his four years of leadership, Viisage’s market capitalization grew from $60 million to over $1 billion. During that period, the company executed nine acquisitions, eventually culminating in the formation of L1 Identity Solutions, a NYSE listed company.company (NYSE:ID). Prior to Viisage, from January 2001 to August 2002, Mr.Dr. Bailey served in various executive roles, including COO at Art Technology Group, a leading provider of e-commerce software. From 1984 to 2001, Mr.Dr. Bailey held a variety of finance, sales, marketing, and operations positions at IBM, where he also served in executive roles involved in the growth and development of IBM Global Service’s systems integration and consulting business lines. Mr.Dr. Bailey has been a member of the Company’s Board of Directors since October 2006. In addition to his duties with Telos, Mr.Dr. Bailey serves as a director on the board of LasercardAnalogic Corp. (NASDAQ:ALOG) and Authentix Corporation, (NASDAQ: LCRD);a privately held company. Previously, until April 2011, Dr. Bailey also served on the Board of Spectrum Control, Inc. (NASDAQ:SPEC); and E.F. Johnson Technologies, Inc.until January 2012, on the board of Identive Corporation (NASDAQ:EFJI)INVE). Dr. Bailey holds a Masters level certificate from the American College of Corporate Directors, a public company director education and credentialing organization. David Borland 64 61William M. Dvoranchik 65 63Retired President, Electronic Data Systems Federal Government.From 1999 toIn 2001, Mr. Dvoranchik was presidenthe retired as President of EDSthe Federal Government sector of Electronic Data Systems (“EDS”), where he oversaw all aspects of EDS’ relationship with the USU.S. Government. He retired in August 2001 after more thanHis career at EDS spanned over 30 years with EDS. Mr. Dvoranchik joined EDSand he gained experience as a systems engineerleader in 1971,the brokerage, insurance, and later was appointed manager of the National Information Systems account. He next served as vice president for EDS’s savings and loan business division, and as division manager for banking and thrift institutions. He became Vice President of EDSindustries before focusing on the U.S. Government Servicessector. From 1985 until his retirement in 1986 and President2001, in 1989.addition to the Federal Government sector, Mr. Dvoranchik was appointed Presidentparticipated in and led EDS projects in the intelligence community, state and local governments, and international public sectors, in particular in Australia, Great Britain, and Asia. During this time, he led efforts that brought in new revenues in excess of EDS State and Local Government in 1997. He was appointed President of EDS Government Enterprise Solutions in January 1999 and assumed the position of President of EDS Federal Government in September of that year.$10 billion for EDS. For over 20 years, Mr. Dvoranchik served as chairman of the board of the EDS Employees Federal Credit Union, which hadwith assets of more than $400 million. He presently serves as director of QBase, LLC, a privately held analytic services company.4Name Age NameAgeLieutenant General Bruce R. Harris (USA, Ret.) 77 75Mr.General Harris was elected to the Board in August 2006. He retired from the United States Army in September of 1989 after more than 33 years of continuous active duty. At the time of his retirement, Mr.General Harris was the Director of Information Systems for Command, Control, Communications and Computers in the Office of the Secretary of the Army, Washington, D.C. In that capacity he served as the principal advisor to the Secretary and Chief of Staff of the Army on all aspects of policy, planning, resourcing and acquisition of communications, automation, information management and command and control systems in the United States Army. Since his retirement, Mr.General Harris has worked with many of America’sAmerica's leading corporations as a consultant on matters relating to the development of strategic and business plans, resource planning and budget formulation. Mr.General Harris is also a director of Hunter Defense Technologies, a privately held company focused on the development of comprehensive solutions to provide shelter, heat, power generation and chem/bio protection for a wide variety of military and homeland security applications.65 63HomeHorne Engineering Services, LLC. From July 2005 to July 2006, he was Vice President of Homeland Security and Defense for SAP Public Services, Inc. (a U.S. business unit of the German software giant, SAP AG), where he led both SAP’s Homeland Defense practice and its business development efforts supporting federal, state, and local government organizations. Immediately following his November 2003 retirement from the Army, where he attained the rank of Lieutenant General and served as the Army’s Deputy Chief of Staff for Logistics, Mr.General Mahan joined The Home Depot, Inc., a home repair materials company, serving as Senior Director of its Government Solutions Group. Mr.General Mahan has been a member of the Telos’ Board of Directors since August 2006. He currently serves as a director on the National Boardboard of DirectorsO’Neil and Associates, a privately owned management company. He also serves on the board of The Societyadvisors for Goldbelt Wolf, a subsidiary of International Logistics,Goldbelt, a tribal-owned Alaskan Native Claims Settlement Act company, and on the National Boardboard of Trusteestrustees for the Fisher House Foundation,Foundation. From 2009 to 2011 General Mahan also served on the Board of Spectrum Control, Inc. (NASDAQ:SPEC). General Mahan holds a Professional Director Certification from the American College of Corporate Directors, a public company director education and credentialing organization.National Defense Industrial Association (Washington Chapter).5NameAgeBiographical InformationU.S. Army and service with two defense contractors make General Mahan a valuable resource for the Board and management. Major General John W. Maluda (USAF, Ret.) 58 55Mr.General Maluda was elected to the Board in October 2009. He retired from the United States Air Force in September 2009 after more than 34 years of continuous active duty. At the time of his retirement, Mr.General Maluda was Director of Cyberspace Transformation and Strategy, in the Office of the Secretary of the Air Force, and Chief Information Officer. In that capacity, he was responsible for establishing cyberspace as a domain in and through which the Air Force flies and fights, to deliver sovereign options for defense of the United States and its global interests. Additionally, he shaped doctrine, strategy, and policy for communications and information activities and served as the functional advocate for 30,000 personnel. Prior to that, Mr.General Maluda was Vice Commander, 8th Air Force, Barksdale Air Force Base, Louisiana. Mr.General Maluda enlisted in the Air Force in 1973 and received his commission in 1978 as a distinguished graduate of the ROTC program at Troy State University, Alabama. His career highlights included serving at three major commands, with unified combatant commands, a defense agency, the White House and the Air Staff. Mr.General Maluda’s staff experience included positions at Headquarters U.S. Air Force, Air Combat Command, U.S. Air Force in Europe, Air Force Special Operations Command, U.S. Space Command and the White House Communications Agency. General Maluda holds a Bachelor of Science in Electrical Engineering from Auburn University, a Masters Degree in Systems Management from the University of Southern California, as well as an Advanced Director Certification from the American College of Corporate Directors, a public company director education and credentialing organization.Name Age Robert J. Marino 75 72Vice Admiral Jerry O. Tuttle (USN, Ret.) 77 74Mr.Admiral Tuttle was elected to the Board of Directors in August 2006. He retired from the United States Navy in 1993 following a 40-year career that included assignments to numerous attack and fighter squadrons as well as leadership of key information technology programs. Mr.Admiral Tuttle is widely regarded as an information technology strategist, having created the Navy’s C41 Joint Operations Tactical System. In 1989, he became Director, Space and Electronic Warfare, an assignment he held until retirement. Since February 2002, he has been President and CEO of J.O.T. Enterprises, an information systems and command, control, communications, intelligence, surveillance and reconnaissance consulting company. Previous executive positions were, from June 2000 to February 2002, as President of REL-TEK Systems & Design (now Savantage Financial Services), an employee-owned software development firm; from 1996 to 2000, as President of ManTech International’s largest subsidiary, ManTech Systems Engineering; and, from 1993 to 1996, as Vice President for business development and chief staff officer with Oracle Government. In addition to his duties with Telos, Admiral Tuttle serves as chairman of the board for the U.S. subsidiary of Systematic Software Engineering, a Danish software development company.6Meeting.Meeting until their respective successors are elected and qualified.Name Age NameAgeSeth W. Hamot 50 47Company’s Public Preferred Stock. Since 1997, Mr. Hamot has been the Managing Member of RRHCM and the owner of RRHI, the corporate predecessor of RRHCM. RRHCM is the investment manager to Costa Brava, Partnership, whose principal business is to make investments in, buy, sell, hold, pledge and assign securities. Mr. Hamot is also the President of RRH, the general partner of Costa Brava. Prior to 1997, Mr. Hamot was one of the partners of the Actionvest entities. Mr. Hamot is presently a director of Orange 21, Inc. and, a NASDAQ company. Previously, he also served as chairman of TechTeam Global, Inc., botha NASDAQ companies.company. Andrew R. Siegel 43 40Company’s Public Preferred Stock. Mr. Siegel is currently a director of TechTeam Global Inc., a NASDAQ company, and serves as a member of that company’s audit committee. Mr. Siegel was a Senior Vice President of RRHCM from 2005 to December 2008. Prior to joining RRHCM, from July 2003 to February 2004, Mr. Siegel was a member of DebtTraders Ltd. Prior to that, from 2000 to 2002, he worked for Deutsche Bank Securities. In addition, in 20042002 he was the founding member of White Bay Capital Management, LLC, of which he remains a member. Previously, Mr. Siegel also served on the Board of TechTeam Global, Inc., a NASDAQ company. Mr. Siegel received a Bachelor’s Degree from American University and a Masters Degree in Business Administration from the University of Maryland.7Name Age Michele Nakazawa 54 Edward L. Williams 51 Robert J. Brandewie 64 Brendan D. Malloy 46 Richard P. Tracy 51 Name Age Alvin F. Whitehead 63 Ralph M. Buona 56 David S. Easley 41 Mark Griffin 52 Francis M. Masters 67 Rinaldi D. Pisani 43 Name Age Emmett J. Wood 41 Bernard C. Bailey, Chairman William M. Dvoranchik Charles S. Mahan, Jr. 2011 2010 BDO USA, LLP: Audit fees $ 481,000 $ 467,000 Audit-related fees ---- ---- Tax fees (1) $ 69,000 $ 60,000 All other fees ---- ---- Total $ 550,000 $ 527,000 · To attract and retain highly talented and results-oriented executives who are critical to our long-term success and growth; · To align the goals of our key employees, including our named executive officers, with the best interests of the Company; · To reward performance; and · To achieve shareholder value. · Compensation should consist of fixed and at-risk compensation, with the at-risk compensation encouraging improved annual and long-term performance. · Compensation should be a mix of annual and long-term compensation, with the long-term compensation encouraging retention and attainment of long-term performance goals. · Compensation should be a mix of cash and equity, with cash rewarding achievement of goals and equity encouraging retention and long-term performance. Additionally, the Compensation Committee continues to believe in equity ownership by the management team to align the interests of management with our long-term corporate performance. 2011 Base Salary 2010 Base Salary Increase John B. Wood $ 560,000 $ 560,000 $ ---- ---- Michele Nakazawa 325,000 325,000 ---- ---- Michael P. Flaherty 350,000 350,000 ---- ---- Edward L. Williams 360,000 360,000 ---- ---- Brendan D. Malloy 240,000 221,179 18,821 8.5 % Executive Officer Target Amount Bonus Paid John B. Wood $ 650,000 $ 700,000 Michele Nakazawa 225,000 275,000 Michael P. Flaherty 150,000 25,000 Edward L. Williams 275,000 300,000 John B. Wood 2011 $ 560,000 $ 700,000 $ 7,343 $ 29,504 $ 1,296,847 Chairman, President and CEO 2010 559,092 675,000 ---- 41,686 1,275,778 2009 535,625 575,000 ---- 55,977 1,166,602 Michele Nakazawa 2011 325,000 275,000 2,148 11,867 614,015 Executive V.P. and CFO 2010 323,675 240,000 ---- 13,607 577,282 2009 293,750 230,000 ---- 24,533 548,283 Michael P. Flaherty(3) 2011 350,000 25,000 250 34,487 409,737 Former Exec. V.P., General 2010 349,617 85,000 ---- 35,953 470,570 Counsel and CAO 2009 341,350 175,000 ---- 43,916 560,266 Edward L. Williams 2011 360,000 300,000 2,540 29,987 692,527 Exec. V.P. and COO 2010 359,633 300,000 ---- 27,966 687,599 2009 351,750 300,000 ---- 36,878 688,628 Brendan D. Malloy 2011 225,100 175,500 2,250 8,223 411,073 Senior V.P. – Secure Networks 2010 221,179 150,000 ---- 17,599 388,778 2009 221,729 200,000 ---- 27,893 449,622 (1) Amounts reported in this category relate to payments pursuant to the short-term incentive compensation plan described on pages 18-19 of the Proxy Statement. (2) Represents the grant date fair value of the shares issued under the 2008 Plan. See assumptions made in the valuation of these awards for financial statement reporting purposes in accordance with ASC 718 in Note 1 – Summary of Significant Accounting Policies to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011. (3) Effective March 31, 2012, Mr. Flaherty resigned as Executive Vice President, General Counsel, and Chief Administrative Officer of Telos. (4) Amounts presented consist of the following: Name John B. Wood 2011 $ 10,729 $ 4,900 $ 13,875 $ 29,504 Michele Nakazawa 2011 6,967 4,900 ---- 11,867 Michael P. Flaherty 2011 16,087 4,900 13,500 34,487 Edward L. Williams 2011 11,587 4,900 13,500 29,987 Brendan D. Malloy 2011 360 3,678 4,185 8,223 John B. Wood 734,255 $ 7,343 Michele Nakazawa 214,750 2,148 Michael P. Flaherty 25,000 250 Edward L. Williams 254,024 2,540 Brendan D. Malloy 225,000 2,250 John B. Wood 550,691 $ 5,507 Michele Nakazawa 161,062 1,611 Michael P. Flaherty 18,750 188 Edward L. Williams 190,518 1,905 �� Brendan D. Malloy 168,750 1,688 John B. Wood 1,124,180 $ 11,242 Michele Nakazawa 228,750 2,288 Michael P. Flaherty 222,500 2,225 Edward L. Williams 332,256 3,323 Brendan D. Malloy 181,250 1,813 Termination without cause $ 1,120,000 $ 64,615 $ 59,917 $ 9,800 $ 1,254,332 550,691 Termination due to disability 1,120,000 64,615 59,917 9,800 1,254,332 550,691 Termination due to death 1,120,000 64,615 59,917 9,800 1,254,332 550,691 Termination for cause ---- 64,615 ----- ---- 64,615 ---- Voluntary termination ---- 64,615 ----- ---- 64,615 ---- Termination without cause $ 487,500 $ 31,250 $ 37,116 $ 7,350 $ 563,216 161,062 Termination due to disability 487,500 31,250 37,116 7,350 563,216 161,062 Termination due to death 487,500 31,250 37,116 7,350 563,216 161,062 Termination for cause ---- 31,250 ----- ---- 31,250 ---- Voluntary termination ---- 31,250 ----- ---- 31,250 ---- Termination without cause $ 525,000 $ 33,654 $ 55,367 $ 7,350 $ 621,371 18,750 Termination due to disability 525,000 33,654 55,367 7,350 621,371 18,750 Termination due to death 525,000 33,654 55,367 7,350 621,371 18,750 Termination for cause ---- 33,654 ----- ---- 33,654 ---- Voluntary termination ---- 33,654 ----- ---- 33,654 ---- Termination without cause $ 540,000 $ 34,615 $ 45,131 $ 7,350 $ 627,096 190,518 Termination due to disability 540,000 34,615 45,131 7,350 627,096 190,518 Termination due to death 540,000 34,615 45,131 7,350 627,096 190,518 Termination for cause ---- 34,615 ----- ---- 34,615 ---- Voluntary termination ---- 34,615 ----- ---- 34,615 ---- Termination without cause $ 360,000 $ 18,462 $ 28,022 $ 7,350 $ 413,834 168,750 Termination due to disability 360,000 18,462 28,022 7,350 413,834 168,750 Termination due to death 360,000 18,462 28,022 7,350 413,834 168,750 Termination for cause ---- 18,462 ---- ---- 18,462 ---- Voluntary termination ---- 18,462 ---- ---- 18,462 ---- Name Fees Paid Total Bernard Bailey $ 75,000 $ 200 $ 5,000 1 $ 80,200 David Borland 60,000 200 ---- 60,200 William Dvoranchik 80,000 200 5,000 1 85,200 Seth W. Hamot ---- ---- ---- ---- Bruce Harris 55,000 200 ---- 55,200 Charles Mahan 65,000 200 ---- 65,200 John W. Maluda 45,000 ---- 100,000 2 145,000 Robert J. Marino 150,000 1 ---- 19,330 4 169,330 Andrew R. Siegel ---- ---- ---- ---- Jerry Tuttle 60,000 200 ---- 60,200 John B. Wood ---- ---- ---- ---- $ 590,000 $ 1,200 $ 129,330 $ 720,530 The table below sets forth information as of August 31, 2009 concerning persons known by the Company to be beneficial owners of more than 5% of any class of the Company’s voting securities, as well as concerning each class of equity securities of the Company beneficially owned by all directors and nominees, each of the officers listed in the Summary Compensation Table included under Item 11, Executive Compensation — Summary Compensation Table, of the Company’s 2008 Form 10-K, and the directors and executive officers of the Company as a group. Unless otherwise indicated, the individuals shown have sole voting and dispositive power. August 31, 2009
of 44.0% 15,801,802 shares (A) 44.0% Class A Common Stock Toxford CorporationPlace de Saint Gervais 11211 GenevaSwitzerland15,328,480 shares45.7% Class A Common StockJohn R.C. PorterChalet Petit Monde1936 VerbierSwitzerland473.322 shares1.4% Class A Common Stock 3,658,536 shares 10.9% 10.2%Class B Common Stock Graphite Enterprise Trust PLCBerkley Square House, 4 th FloorLondon W1J 6BQ England 1,681,960 shares (A) 41.7% Class B Common StockGraphite Enterprise Trust LPBerkley Square House, 4 th FloorLondon W1J 6BQ England420,490 shares (A)10.4% Class B Common StockNorth Atlantic Smaller Companies Investment Trust PLCc/o North Atlantic Value LLPGround Floor, Ryder Court14 Ryder StreetLondon SW1Y 6QB England1,186,720 shares29.4% Class B Common StockCudd & Companyc/o INVESCO Asset Management Limited30 Finsbury SquareLondon EC2A 1AG England669,888 shares16.6% Class A Common Stock John B. Wood 3,811,1134,546,093 shares (B) 11.4% 12.7%Class A Common Stock Michael P. Flaherty 871,824897,363 shares (B) 2.6% 2.5%Class A Common Stock Edward L. Williams 1,177,5211,432,099 shares (B) 3.5% 4.0%Class A Common Stock Michele Nakazawa 700,948917,450 shares (B) 2.1% 2.6%8Title of Class Class A Common Stock Brendan D. Malloy 505,866731,669 shares (B) 1.5% 2.0%Class A Common Stock Robert J. Marino 1,003,644590,124 shares (B) 3.0% 1.6%Class A Common Stock Bernard C. Bailey 80,000100,000 shares (C) 0.2% 0.3%Class A Common Stock David Borland 100,000 120,000 shares (C)(D) 0.3% 0.3%Class A Common Stock William M. Dvoranchik 80,000100,000 shares (C) 0.2% 0.3%Class A Common Stock Seth W. Hamot —---- —---- Class A Common Stock Bruce R. Harris 80,000100,000 shares (C) 0.2% 0.3%Class A Common Stock Charles S. Mahan, Jr. 80,000100,000 shares (C) 0.2% 0.3%Class A Common Stock John W. Maluda —80,000 shares (E) —0.2% Class A Common Stock Andrew R. Siegel —---- —---- Class A Common Stock Jerry O. Tuttle 80,000100,000 shares (C) 0.2% 0.3%Class A Common Stock As(22(24 persons) 10,196,57111,976,790 shares (E)(F) 30.4% 33.3%Series A-1 RedeemablePreferred Stock Class B Common Stock 1,681,960 shares 41.7% Class B Common Stock 420,490 shares 10.4% Class B Common Stock 991,186,720 shares 7.9% 29.4%Series A-1 RedeemablePreferred Stock Graphite Enterprise Trust PLCBerkley Square House, 4 th FloorLondon W1J 6BQ England 140Class B Common Stock John B. Wood 194,888 shares 11.2% 4.8%Series A-1 RedeemablePreferred Stock Toxford CorporationPlace de Saint Gervais 11211 GenevaSwitzerland 908Class B Common Stock Michele Nakazawa 125,000 shares 72.6% 3.1%Series A-2 RedeemablePreferred Stock Class B Common Stock Michael P. Flaherty 100,000 shares 2.5% Class B Common Stock Brendan D. Malloy 100,000 shares 2.5% Class B Common Stock Edward L. Williams 100,000 shares 2.5% Class B Common Stock 669,888 shares 16.6% Series A-1 Redeemable Preferred Stock 13954 shares 7.9% 5.8%Series A-2 RedeemablePreferred Stock Series A-1 Redeemable Preferred Stock th Floor 19685 shares 11.2% 9.2%Series A-2 RedeemablePreferred Stock Amount and Nature of Series A-1 Redeemable Preferred Stock 1,271763 shares (G)82.7% Series A-1 Redeemable Preferred Stock 763 shares (G) 82.7% Series A-2 Redeemable Preferred Stock 75 shares 72.6% 95.8% 12% Cumulative ExchangeableSeries A-2 Redeemable Preferred Stock 119 shares 9.2% Series A-2 Redeemable Preferred Stock 1,069 shares (H) 82.7% Series A-2 Redeemable Preferred Stock 1,069 shares (H) 82.7% 808 501,317 281,798 shares (F)(I) 15.7% 8.8%12% Cumulative Exchangeable Redeemable Preferred Stock 373,500 shares (G)(J) 11.7% 11.7%12% Cumulative Exchangeable Redeemable Preferred Stock Athena Capital Management, Inc.Group, LP 161,989184,722 shares (H)(K) 5.1% 5.8%12% Cumulative Exchangeable Redeemable Preferred Stock 182,000 (I)shares (L) 5.7% 5.7%12% Cumulative Exchangeable Redeemable Preferred Stock Amount and Nature of White Bay Capital Management, LLCAndrew R. Siegel237 Park Avenue, Suite 800New York, NY 10017 521,287 (J)405,172 shares (M) 16.4% 12.7%12% Cumulative Exchangeable Redeemable Preferred Stock Brown Advisory Holdings IncorporatedBrown Advisory Securities, LLCBrown Investment Advisory & Trust Company901 South Bond Street, Suite 400Baltimore, MD 21231 323,931 (K) 10.2% 752,074 shares (N) 23.6% (A) Graphite Enterprise Trust PLCIncludes 15,328,480 shares held directly by Toxford Corporation and Graphite Enterprise Trust LP did not provide us with473,322 shares held directly by Mr. Porter. Mr. Porter is the addressessole stockholder of the respective beneficial owners.Toxford Corporation.(B) Messrs. Wood, MarinoIncludes 40,981, 7,363, 6,669, 28,072, 32,099, and Williams directly hold 8,392; 2,052 and 70,9762,450 shares of ourthe Class A Common Stock respectively. In addition,held for the common stock holdingsbenefit of Messrs. Wood, Flaherty, Williams, Malloy, Marino and Williams, and Ms. Nakazawa, include 40,256; 6,824; 31,545; 5,866; 26,592respectively, by the Telos Corporation Shared Savings Plan. Also includes 367,127, 12,500, 112,500, 127,012, and 698107,375 non-vested, restricted shares of ourthe Class A Common Stock respectively, held for their beneficial interest by the Telos Corporation Savings Plan. Additionally, in June 2008, as a result of the 2008 Omnibus Long-Term Incentive Plan, Messrs. Wood, Flaherty, Williams, Malloy, Marinoand Williams, and Ms. Nakazawa, hold 3,762,465; 865,000; 1,075,000; 500,000; 975,000 and 700,250 shares of our restricted Class A Common Stock, respectively.(C)These holdings are comprised of restricted Class A Common Stock granted in September 2008respectively, under the 2008 Omnibus Long-Term Incentive Plan.(C) Includes 10,000 non-vested, restricted shares of the Class A Common Stock granted under the 2008 Omnibus Long-Term Incentive Plan. (D) Mr. Borland holds options to acquire 20,000 shares of ourthe Class A Common Stock, which are exercisable within 60 days of August 31, 2009.April 13, 2012.10(E) The common stock holdings of our executive officers and directors as a group include 100,220Includes 20,000 non-vested, restricted shares of ourthe Class A Common Stock held directly; 175,286granted under the 2008 Omnibus Long-Term Incentive Plan.(F) Includes 198,726 shares of ourthe Class A Common Stock held for their beneficial interestthe benefit of the executive officers by the Telos Corporation Shared Savings Plan, and 9,901,0651,070,889 non-vested, restricted shares of restrictedthe Class A Common Stock issued under the 2008 Omnibus Long-Term Incentive Plan.(F)(G)Includes 705 shares held directly by Toxford Corporation and 58 shares held directly by Mr. Porter. (H) Includes 987 shares held directly by Toxford Corporation and 82 shares held directly by Mr. Porter. (I) According to the Schedule 13D/A (Amendment No. 14) filed on February 24, 2012, by Value Partners Ltd. (“VP”), Ewing & Partners (“E&P”), Ewing Asset Management LLC (“EAM”), and Timothy G. Ewing filed a joint Schedule 13D indicating that theyEwing. E&P, as the general partner of VP, may act as a “group” withindirect the meaning of Section 13(d)vote and disposition of the Securities Exchange Act. Each of the reporting persons disclosed that it might be deemed to beneficially own the aggregate of 501,317 shares of the Public Preferred Stock held by VP. Mr. Ewing and EAM, as the partners of record byE&P, may be deemed to have the reporting persons collectively. According to the Schedule 13D, VP has the sole power to vote or direct the vote and the sole power to dispose and to direct the disposition of and E&P and Timothy G. Ewing have the shared power to vote or direct the vote and the shared power to dispose and to direct the dispositionshares of 501,317 shares.Public Preferred Stock held by VP.(G)(J)Wynnefield Partners Small Cap Value, L.P., (“WPSCV”), Wynnefield Partners Small Cap Value L.P. I (“WPSCVI”), Channel Partnership II, L.P. (“CP”), Wynnefield Small Cap Value Offshore Fund, Ltd. (“WSCVOF”), Wynnefield Capital Management, LLC (“WCM”), Wynnefield Capital, Inc. (“WCI”), Mr. Nelson Obus and Mr. Joshua H. Landes filed a joint Schedule 13D13D/A (Amendment No. 10) on March 8, 2007 indicating that they may be deemed to act as a “group” within the meaning of Section 13(d) of the Securities Exchange Act and that such group might be deemed to beneficially own the aggregate of 373,500 shares of the Public Preferred Stock held of record by the reporting persons collectively. According to the Schedule 13D, WCM is the sole general partner of WPSCV and WPSCVI and has the sole power to direct the voting and disposition of the shares beneficially owned by WPSCV and WPSCVI. Messrs. Obus and Landes are the co-managing members of WCM, and each shares with the other the power to direct the voting and disposition of the shares that WCM may be deemed to beneficially own. WCI is the sole investment manager of WSCVOF and has the sole power to direct the voting and disposition of the shares that WSCVOF beneficially owns. Messrs. Obus and Landes are executive officers of WCI and each shares with the other the power to direct the voting and disposition of the shares that WCI may be deemed to beneficially own. Mr. Obus is the general partner of CP and has the sole power to direct the voting and disposition of the shares beneficially owned by CP. WPSCV has the sole power to vote or direct the vote and the sole power to dispose or direct the disposition of 131,800 shares. WSCVOF has the sole voting and dispositive power with respect to vote or direct the vote and the sole power to dispose or direct the disposition of 85,400 shares. WPSCVI has the sole voting and dispositive power with respect to vote or direct the vote and the sole power to dispose or direct the disposition of 142,800 shares. CP has the sole voting and dispositive power with respect to vote or direct the vote and the sole power to dispose or direct the disposition of 13,500 shares. Mr. Obus has the sole voting and dispositive power with respect to vote or direct the vote and the sole power to dispose or direct the disposition of 13,500 shares, and shared voting and dispositive power with respect to vote or direct the vote and the sole power to dispose or direct the disposition of 360,000 shares. Mr. Landes has shared voting and dispositive power with respect to vote or direct the vote and the shared power to dispose or direct the disposition of 360,000 shares. WCM has the sole voting and dispositive power with respect to vote or direct the vote and the sole power to dispose or direct the disposition of 274,600 shares. WCI has the sole voting and dispositive power with respect to vote or direct the vote and the sole power to dispose or direct the disposition of 85,400 shares.(H)(K)Athena Capital Management, Inc.Minerva Advisors, LLC (“ACM”), Minerva Group, LP (“MG”MA”), and Mr. David Cohen filed a joint Schedule 13G/A13G on February 14, 2012, indicating that ACM has the shared power to vote or to direct the vote and the shared power to dispose or to direct the disposition of 110,146 shares; MGMA and Mr. Cohen haveeach has shared voting and dispositive power with respect to 115,346 shares; MA has the sole voting and dispositive power with respect to vote or61,943 shares, and Mr. Cohen has sole voting and dispositive power with respect to direct the vote and the sole power to dispose or to direct the disposition of 44,410 and 7,433 shares, respectively.69,376 shares.(I)(L)Victor Morgenstern (“VM”), Faye Morgenstern (“FM”), Judd Morgenstern (“JM”), Jennifer Morgenstern Irrevocable Trust (“Jennifer Trust”), Robyn Morgenstern Irrevocable Trust (“Robyn Trust”), and Judd Morgenstern Irrevocable Trust (“Judd Trust”), filed a joint Schedule 13D/A (Amendment No. 1) on March 10, 2009, indicating that VM has the sole power to vote and dispose of 50,000 shares, and shared power to dispose of 132,000 shares; FM has the sole power to vote or direct the vote of 17,000 shares and shared power to dispose or direct the disposition of 92,000 shares; JM has the sole power to vote or direct the vote of 40,000 shares and shared power to dispose or direct the disposition of 115,000 shares; Jennifer Trust has the sole voting and dispositive power with respect to vote or direct the vote of 25,000 shares and shared power to dispose or direct the disposition of 25,000 shares; Robyn Trust has the sole voting and dispositive power with respect to vote or direct the vote of 25,000 shares and shared power to dispose or direct the disposition of 25,000 shares; and Judd Trust has the sole voting and dispositive power with respect to vote or direct the vote of 25,000 shares and shared power to dispose or direct the disposition of 25,000 shares.11(J)(M)According to the Schedule 13D/A (Amendment No. 27) filed on October 29, 2010, by Costa Brava Partnership III LP (“CBP”)L.P., Roark, Rearden & Hamot, LLC, (“RRH”), White Bay Capital Management, LLC (“WBCM”). Mr.and Seth W. Hamot, the three filers have sole voting and Mr. Andrew R. Siegel filed a joint Schedule 13D indicating that CBP hasdispositive power with respect to the sole power to vote or to direct the vote and to dispose or direct the disposition of 506,811 shares; RRH, WBCM and Mr. Hamot have the shared power to vote or to direct the vote and dispose or direct the disposition of 506,811 shares; Mr. Siegel has the sole power to vote or direct the vote and to dispose or direct the disposition of 14,476 shares, and the shared power to vote and dispose or direct the vote or disposition of 506,811405,172 shares.(K)(N)Brown Advisory Holdings Incorporated (“BAHI”), in its capacity as a parent holding company, Brown Advisory Securities, LLC (“BAS”), and Brown Investment Advisory & Trust Company (“BIATC”) filed a joint scheduleAccording to the Schedule 13G/A indicating that 322,631 shares are ownedfiled on February 14, 2012, by NSB Advisors LLC, the clients of BAS and 1,300 shares are owned byfiler has sole dispositive power with respect to the clients of BIATC. Those clients have the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, such securities. BAHI has the sole power to dispose or to direct the disposition of 1,300 shares; BAHI and BAS have the shared power to dispose or to direct the disposition of 322,631752,074 shares.12Section 16(a) Beneficial Ownership Reporting Compliance concerning Section 16(a) beneficial ownership reporting compliance for the Company’s directors, executive officers and persons who own more than 10 percentPlan Category Equity compensation plans approved by security holders: 1. 1996 Stock Option Plan 20,000 $ 0.62 None 2. 2008 Plan None N/A 264,741 Equity compensation plans not approved by security holders None N/A None Company’s Common Stock is set forth in the subsection entitled “Section 16(a) Beneficial Ownership Reporting Compliance” of Item 10, page 68, of the Company’s 2008 Form 10-K, which information is incorporated by reference into this Proxy Statement.Biographical Information Concerning the Company’sVote on Executive OfficersBiographical information concerning the Company’s current executive officers is set forth under Item 10, Directors, Executive Officers and Corporate Governance, beginning on page 64 of the Company’s 2008 Form 10-K, which is incorporated by reference into this Proxy Statement.Corporate GovernanceInformation concerning director independence, board meeting and annual meeting attendance, and board committee information is set forth under Item 10, Directors, Executive Officers and Corporate Governance, beginning on page 64 of the Company’s 2008 Form 10-K, which is incorporated by reference into this Proxy Statement.Independence of DirectorsThe Company has adopted director independence standards which are summarized below. The Company’s director independence standards are based upon NASD Rules 4200(a)(15) and 4350. Pursuant to such rules, a majority of directors of the Board will be independent. Pursuant to NASD Rule 4200(a)(15), a director will not be independent if,(A) Compensation any time during the past three years he was employed by the Company;(B) He accepted, or has a family member who accepted, any compensation from the Company in excess of $120,000 during any period of twelve consecutive months within the three years preceding the determination of independence other than the following: (i) compensation for board or board committee service; (ii) compensation paid to a family member who is an employee (other than an executive officer) of the Company; (iii) benefits under a tax-qualified retirement plan, or non-discretionary compensation;(C) He is a family member of an individual who is, or at any time during the past three years was, employed by the Company as an executive officer;(D) He is, or has a family member who is a partner in, or a controlling shareholder or executive officer of, any organization to which the Company made, or from which the Company received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than the following: (i) payments arising solely from investments in the Company’s securities; or (ii) payments under non-discretionary charitable contribution matching programs.13(E) He is, or has a family member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the issuer served on the compensation committee of such other entity.(F) He is, or has a family member who is, a current partner of the Company’s outside auditor, or was a partner or employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years.Pursuant to the independence standards set forth above, the Board has determined that the following directors and nominees meet the Company’s independence standards and therefore are independent: Bernard C. Bailey, David Borland, William M. Dvoranchik, Bruce R. Harris, Charles S. Mahan, John W. Maluda, and Jerry O. Tuttle. Based on these standards, the Board determined that the following directors are not independent: Robert J. Marino, and John B. Wood. Additionally, due to conflicts of interest, both Seth W. Hamot and Andrew R. Siegel were determined not to be independent.Meetings of the Board of Directors and Committees of the Board of DirectorsDuring the fiscal year ended December 31, 2008, the Board of Directors held 12 meetings. Each director attended over 75 percent of the aggregate number of meetings of the Board and the committees of the Board on which he served.The Company encourages all directors to attend annual meetings of stockholders. Eight directors, namely Messrs. Bailey, Dvoranchik, Harris, Mahan, Marino, Siegel, Tuttle, and Wood attended the Company’s annual meeting of stockholders in 2007,held on November 14, 2011, the last year an annual meetingfrequency of stockholders was held.The Company has standing Audit, Management Development and Compensation, and Nominating and Corporate Governance Committees.Audit CommitteeThe Audit Committee was established to review, in consultation withthree years of the independent auditors,vote on executive compensation received the Company’s financial statements, accounting, and other policies, accounting systems and systemshighest number of internal controls. The Audit Committee consists of directors Bailey (chairman), Dvoranchik, and Mahan. In 2008, the Audit Committee met twelve times. The Board of Directors has adopted an Audit Committee charter which is available on the Company’s website at www.telos.com.Management Development and Compensation Committee (“Compensation Committee”)The Management Development and Compensation Committee was established for the purpose of reviewing, determining and approving all forms of compensation to be provided to the14Company’s executive officers and directors, and any stock compensation to be provided to all employees. The Compensation Committee is comprised of directors Borland, Dvoranchik (chairman), and Harris. The Management Development and Compensation Committee met eleven times during the year 2008. The Board of Directors has adopted a Compensation Committee charter which is available on the Company’s website at www.telos.com.Nominating and Corporate Governance Committee (“Nominating Committee”)The Nominating and Corporate Governance Committee was established to make recommendations regarding Board nominations and to monitor the implementation of corporate governance rules and regulations. The Nominating Committee consists of directors Borland (chairman), Marino (ex officio), Tuttle, and Wood. The Nominating and Corporate Governance Committee held no meetings in 2008, however, in 2009 the Nominating Committee reviewed and approved the nomination of Mr. Maluda who was recommended to the Nominating Committee for consideration as a director by Mr. Borland. The Board of Directors has adopted a Nominating Committee charter which is available on the Company’s website atwww.telos.com.Board of Directors Nomination ProcessBoard members are nominated pursuant to the following policy: The Nominating and Corporate Governance Committee identifies potential candidates for first-time nomination as a director by using a variety of sources such as recommendations from the Company’s management, current Board members, stockholders, and contacts in organizations servedvotes cast by the Company. Stockholders may nominate potential candidates by following the procedure set forth in the Company’s Bylaws: The process set forth in the Company’s Bylaws provides that, in order for nominations or other business to be properly brought before an annual meeting by a stockholder, the stockholder must deliver written notice to the Company’s secretary at the Company’s principal executive offices not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made. The Nominating Committee will consider any director nominees submitted by stockholders in accordance with these procedures.The Nominating Committee then conducts an initial review of the potential candidate’s background, including whether he/she meets the minimum qualifications for Board members; whether the individual would be considered independent under NASD and SEC rules; and whether the individual would meet any additional requirements imposed by law or regulation on members of the Audit and/or Management Development and Compensation Committees of the Board. Among the requirements potential candidates should meet are the following: U.S. citizenship; eligibility for security clearance at top secret level; 10 years of corporate or related business experience, preferably having served on corporate Boards or committees; and familiarity with government contracts, the defense industry, and information technology and security. The evaluation process of a potential candidate’s background will not be treated differently whether or not he/she was nominated by a stockholder, except for nominations received from holders of Public Preferred Stock which are not subject to the Company’s nomination process.15If the initial candidate review is satisfactory, the Nominating and Corporate Governance Committee will arrange an introductory meeting with the candidate and the committee’s chairman or the Company’s CEO or with other directors to determine the potential candidate’s interest in serving on the Board. If the candidate is interested in serving on the Board and the Nominating and Corporate Governance Committee recommends further consideration, a comprehensive interview conducted by the Nominating and Corporate Governance Committee, the CEO, other members of the Board, and in some cases, key Company executives, follows. Upon successful conclusion of the review process, the Nominating and Corporate Governance Committee will present the candidate’s name to the Board of Directors for nomination as a director and inclusion in the Company’s Proxy Statement.Stockholder Communications with Board of DirectorsStockholders wishing to communicate with the Board of Directors should contact the office of the Corporate Secretary who will forward such communication to the appropriate committee of the Board of Directors. There have been no changes in the procedures by which shareholders may recommend nominees to the Company’s board of directors.Compensation of Executive Officers and DirectorsInformation concerning executive officer and director compensation is set forth under Item 11, Executive Compensation, of the Company’s 2008 Form 10-K, beginning on page 69,Class A and is incorporated into this Proxy StatementClass B Common Stock present in person or represented by reference thereto.Certain Relationships and Related Party TransactionsInformation concerning certain relationships and related party transactions is set forth under Item 13, Certain Relationships and Related Transactions, and Director Independence,proxy at the annual meeting. In light of the Company’s 2008 Form 10-K, beginning on page 80, and is incorporated into this Proxy Statement by reference thereto.Effective October 24, 2007,such vote, the Company adopteddecided to conduct a Related Persons Transaction Policy which is attached hereto as Exhibit I.Legal Proceedings With 10% Beneficial Owner of the Company’s StockCosta Brava Partnership III, L.P.Information concerning the Company’s legal proceedings with Costa Brava is set forthsay-on-pay vote in Note 14, Contingencies, Legal Proceedings — Costa Brava Partnership III, L.P. et al. v. Telos Corporation, et al., beginning on page 58, of the Company’s 2008 Form 10-K, which information is incorporated into this Proxy Statement by reference thereto.16As previously reported, on April 8, 2009, the Appellants filed a Petitionits proxy materials for Writ of Certiorari to Court of Special Appeals with the Court of Appeals of Maryland. On June 12, 2009, the Court of Appeals of Maryland denied the Petition for Writ of Certiorari, stating that “there has been no showing that review by certiorari is desirable andfuture annual meetings every three years. The next vote will thus be scheduled in the public interest.” Therefore, the appeal remains pending before the Court of Special Appeals of Maryland.At this stage of the appeal process, it is impossible to reasonably determine the degree of probability related to Plaintiffs’ (Appellants’) success in any of their assertions. Although there can be no assurance as to the ultimate outcome of this appeal process, the Company and its officers and directors strenuously deny Plaintiffs’ claims, will continue to vigorously defend the matter, and oppose the relief sought.Hamot et al. v. Telos CorporationInformation concerning the Company’s legal proceedings with Messrs. Seth W. Hamot and Andrew Siegel is set forth in Note 14, Contingencies, Legal Proceedings — Hamot et al. v. Telos Corporation, beginning on page 60, of the Company’s 2008 Form 10-K , which information is incorporated into this Proxy Statement by reference thereto.As previously reported, on April 1, 2009, the Class D Directors filed a Petition for Constructive Civil Contempt with the Circuit Court for Baltimore City. The Petition alleges that the Company violated the Court’s August 28, 2007 and October 12, 2007 Orders, for failing to provide requested documents or information that the Class D Directors allege is “pertinent and necessary to Plaintiffs’ duties as Telos’ directors.” A hearing was held before Judge Michel Pierson on July 8, 2009 and a ruling is pending.At this stage of the litigation and appeal process, it is impossible to reasonably determine the degree of probability related to the Class D Directors’ success in any of their assertions. Although there can be no assurance as to the ultimate outcome of these proceedings, the Company and its officers and directors strenuously deny the Class D Directors’ claims, and will vigorously defend the matter, and continue to oppose the relief sought.17REPORT OF THE AUDIT COMMITTEEThe Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including internal control over financial reporting. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements for the fiscal year ended December 31, 2008, including the quality and acceptability of accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements that were included in the Company’s Annual Report on 2008 Form 10-K.The Audit Committee discussed with the independent registered public accounting firm, who is responsible for expressing an opinion on conformity of those audited financial statements with U.S. generally accepted accounting principles, the firm’s judgment as to the quality and acceptability of the Company’s accounting principles and such other matters as are required to be discussed with the independent registered public accounting firm under the standards of the Public Company Accounting Oversight Board. In addition, the Audit Committee discussed with the independent registered public accounting firm the firm’s independence from management and the Company, including the matters in the written disclosures and letter from the independent registered public accounting firm to the Committee required by Public Company Accounting Oversight Board Rule 3526. The Audit Committee also considered whether the provision of non-audit related services by the independent registered public accounting firm was compatible with maintaining the firm’s independence and found it to be acceptable.The Committee met with the Company’s independent registered public accounting firm, with and without management present, and discussed the overall scope and results of their audits, their evaluation of the Company’s internal control over financial reporting and the overall quality of the Company’s financial reporting.In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2008 for filing with the Securities and Exchange Commission.Bernard C. Bailey, ChairmanWilliam M. DvoranchikCharles S. Mahan, Jr.18Independent Public AccountantsThe Audit Committee selected BDO Seidman, LLP (“BDO”) to serve as the Company’s independent public accountant for the 2008 fiscal year. BDO has also been selected to serve as the Company’s independent public accountant for the 2009 fiscal year. Information concerning the Company’s relationship with BDO is set forth under Item 14, Principal Accountant Fees and Services, beginning on page 82 of the Company’s 2008 Form 10-K, which is incorporated into this Proxy Statement by reference thereto.The Company does not expect representatives of BDO Seidman, LLP to attend the Annual Meeting and, as a result, they will not have an opportunity to make a statement or respond to questions.20102013 Annual Meeting20102013 Annual Meeting included in the proxy materials for such meeting must submit these proposals to the Company on or prior to July 19, 2010.December 24, 2012. All other proposals must be submitted in accordance with the process set forth in the Company’s Bylaws, which provide that, in order for business to be properly brought before an annual meeting by a stockholder, the stockholder must deliver written notice to the Company’s secretary at the Company’s principal executive offices not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the 90thth day prior to such annual meeting and not later than the close of business on the later of the 60thth day prior to such annual meeting and not later than the close of business on the later of the 60thth day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made.Incorporation by ReferenceWe have elected to “incorporate by reference” certain information into this Proxy Statement. By incorporating by reference, we can disclose important information to you by referring you to another document that we have filed separately with the SEC. The information incorporated by reference is deemed to be part of this Proxy Statement, except for information incorporated by reference that is superseded by information contained in this Proxy Statement. This Proxy Statement incorporates by reference information from the following sections of the Company’s 2008 Form 10-K: Items 3, 10, 11, 13, and 14, as well as Item 8, Consolidated Financial Statements and Supplementary Data — Note 14, Contingencies. A copy of the Company’s 2008 Form 10-K has been mailed to you along with this Proxy Statement.19TELOS CORPORATIONBy:/S/ THERESE K. HATHAWAYTherese K. Hathaway, Corporate SecretaryAshburn, Virginia20Exhibit ITELOS CORPORATIONPOLICY WITH RESPECT TO RELATED PERSON TRANSACTIONSI. PurposeThis Related Person Transaction Policy was adopted by the Board of Directors of Telos Corporation (the “Company”) to ensure the timely identification, review, approval and ratification of transactions with related persons and to assist the Company in the timely disclosure of such transactions in the Company’s filings with the SEC, as required by the Securities Act of 1933 and the Securities Exchange Act of 1934 and related rules and regulations.This policy is intended to supersede other policies of the Company such as the Code of Conduct and the Corporate Governance Principles that may be applicable to transactions with related persons.II. DefinitionsFor purposes of this policy, the following definitions apply:“Related Person Transaction”means any transaction or series of transactions in which (i) the Company or a subsidiary is a participant, (ii) the aggregate amount involved exceeds $120,000 and (iii) any “Related Person” has a direct or indirect material interest.“Related Person” means:Any director or executive officer of the Company;Any immediate family member of a director or executive officer of the Company;Any nominee for director and the immediate family members of such nominee;A 5% beneficial owner of the Company’s voting securities or any immediate family member of such owner; andAny firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.“Immediate Family Member” means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law of a person, and any person (other than a tenant or employee) sharing the household of such person.III. Review/ReportRelated Person Transactions shall be reviewed by the Board of Directors acting through the Audit Committee at regularly scheduled committee meetings, except that the Chairman of the Audit Committee may call a special committee meeting to review a proposed Related Person Transaction. That transaction is subject to the approval and/or ratification of the full Board of Directors. If the proposed Related Person Transaction involves a director, then that director may participate in the deliberations pursuant to the last paragraph of this policy below, but may not vote with respect to such approval or ratification.21Each individual executive officer and director shall be responsible for reporting any potential Related Person Transaction to the General Counsel and/or the Audit Committee. The Company shall take such steps as it deems reasonable and appropriate to inform such executive officers and directors about this Related Person Transactions policy, which shall include:Distributing (as soon as reasonably practicable following the completion of each fiscal year) a formal questionnaire to all executive officers and directors requiring these persons to evaluate and disclose whether or not during the preceding fiscal year they were involved in, or aware of, any Related Person Transaction;Posting this policy on the Company website and including it in the Company’s 2009 proxy statement;Periodically distributing this policy to the Company’s executive officers and directors; andPeriodically making internal inquiries regarding Company relationships with known entities that qualify as Related Persons.Whether the Related Person’s interest in a proposed transaction is material or not will depend on all facts and circumstances, including whether a reasonable investor would consider the person’s interest in the transaction important, together with all other available information, in deciding whether to buy, sell or hold the Company’s securities. In preparing the Company’s SEC filings and in determining whether a transaction is subject to this policy, the Company’s General Counsel is entitled to make the determinations of whether a particular relationship constitutes a material interest by a Related Person. In administering this policy, the Audit Committee shall be entitled (but not required) to rely upon such determinations of materiality by the Company’s General Counsel.In reviewing a proposed Related Person Transaction, the Committee shall consider all relevant facts and circumstances, including the commercial reasonableness of the terms, the benefit, or lack thereof, to the Company, opportunity costs of alternate transactions, the materiality and character of the Related Person’s direct or indirect interest, and the actual or apparent conflict of interest of the Related Person. The Audit Committee shall forward to the full Board of Directors its recommendations in regards to any Related Person Transaction involving a director or an executive officer of the Company, for final determination.22