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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Maryland
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27-1594952
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.001 par value per share
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NASDAQ Global Select Market
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
(Do not check if smaller reporting company)
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Smaller reporting company
o
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Item No.
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Page
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PART I
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PART II
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PART III
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PART IV
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Item 1.
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BUSINESS
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•
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Strategic Program and Management Support
. We help customers formulate plans to improve performance, cost effectiveness, and quality of service. We assess current operations, develop targeted strategies and plans for improvement, define key priorities and accountabilities, and design enterprise architectures that capitalize on customer investments in existing systems and assist them in transitioning to new technology platforms and capabilities.
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•
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Systems Design, Development and Integration
. We provide project management, systems design, network and systems integration, data analysis and integration, security engineering, software development, hardware development and engineering, database design and development, and independent test and evaluation services to our clients. We analyze system concepts and assess data and information needs, define requirements, develop operational prototypes, and integrate complex mission-critical systems and solutions that comply with our customer's enterprise architectures and needs. Based on customer requirements, we may design custom-built systems; integrate and implement commercial-off-the-shelf solutions, or combine both approaches using agile development methodologies and other industry best practices.
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•
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Cybersecurity, Cyber Superiority and Geospatial Intelligence
. We offer a proactive, multi-disciplined approach to cybersecurity and cyber superiority based on expertise in defending, exploiting, and using cyberspace to accomplish the intelligence mission and protect our national interests. We provide geospatial intelligence solutions that span the entire intelligence process of collection, processing, analysis, and impact, bringing innovation and mobility to our intelligence and defense customers. Our suite of solutions includes security architecture, secure systems integration, cybersecurity operations, information operations, compliance, privacy, training services, data mining, cloud computing, quick, response capabilities, mobility applications and solutions, and intelligence processing and analysis.
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•
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Intelligence Operations and Analysis Support
. We support strategic and tactical intelligence systems, networks and facilities in support of the Intelligence Community and Department of Defense. To support classified systems and facilities
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Year ended December 31, 2012
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|||||||||
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Actual
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Pro Forma (unaudited)
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||||||||
Contract Type
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(in millions)
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|
(percentage)
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(in millions)
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(percentage)
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|
||
Time & Materials
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$
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116.2
|
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47.8
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%
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$
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146.3
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50.0
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%
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Fixed-Price-Level-of-Effort
|
$
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33.1
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13.6
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%
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$
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36.7
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12.6
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%
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Firm-Fixed-Price
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$
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67.9
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27.9
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%
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$
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74.8
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25.5
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%
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Cost Reimbursement
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$
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26.3
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10.7
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%
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$
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34.9
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11.9
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%
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Year ended December 31, 2011
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|||||||||
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Actual
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Pro Forma (unaudited)
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||||||||
Contract Type
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(in millions)
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(percentage)
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(in millions)
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(percentage)
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Time & Materials
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$
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106.1
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55.7
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%
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$
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112.6
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52.3
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%
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Fixed-Price-Level-of-Effort
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$
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25.2
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13.2
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%
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$
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25.3
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11.8
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%
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Firm-Fixed-Price
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$
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44.5
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23.3
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%
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$
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61.8
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28.7
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%
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Cost Reimbursement
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$
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14.8
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7.8
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%
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$
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15.5
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7.2
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%
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•
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The Central Intelligence Agency (CIA)
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•
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The United States Department of Defense (DoD)
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◦
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Air Force Intelligence Surveillance and Reconnaissance Agency (AFISRA)
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◦
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Army Military Intelligence (MI)
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◦
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Defense Intelligence Agency (DIA)
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◦
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Marine Corps Intelligence Agency (MCIA)
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◦
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National Geospatial-Intelligence Agency (NGA)
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◦
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National Reconnaissance Office (NRO)
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◦
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National Security Agency (NSA)
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◦
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Office of Naval Intelligence (ONI)
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•
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United States Department of Energy
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◦
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Office of Intelligence and Counterintelligence (OICI)
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•
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United States of Homeland Security
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◦
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Office of Intelligence and Analysis (I&A)
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◦
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Coast Guard Intelligence (CGI)
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•
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United States Department of Justice
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◦
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Federal Bureau of Investigation (FBI)
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◦
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Drug Enforcement Administration (DEA)
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•
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United States Department of State
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◦
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Bureau of Intelligence and Research (INR)
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•
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United States Department of the Treasury
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◦
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Office of Terrorism and Financial Intelligence (TFI)
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Item 1A.
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RISK FACTORS
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•
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we were to lose, or there were to occur a significant reduction in, U.S. Government funding of one or more programs for which we are the prime contractor or in which we participate;
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•
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we were suspended or debarred from contracting with the U.S. Government; or
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•
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our reputation, relationships, or the reputations or relationships of our senior managers with the U.S. Government agencies with which we currently do business or seek to do business is impaired.
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•
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budgetary constraints affecting U.S. Government spending generally, or specific departments or agencies in particular, and changes in available funding;
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•
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changes in U.S. Government programs or requirements; and
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•
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U.S. Government shutdown (such as that which occurred during fiscal year 1996) and other potential delays in the appropriations process.
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•
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the Federal Acquisition Regulation, which comprehensively regulates the formation, administration and performance of federal government contracts;
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•
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the Truth in Negotiations Act, which requires certification and disclosure of all cost and pricing data in connection with cost-type contracts;
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•
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the Cost Accounting Standards and Cost Principles, which impose accounting requirements that govern our right to reimbursement under certain cost-based federal government contracts; and
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•
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laws, regulations and executive orders restricting the use and dissemination of classified information and, under U.S. export control laws, the export of certain products and technical data.
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•
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termination of contracts;
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•
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forfeiture of profits;
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•
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cost associated with triggering of price reduction clauses;
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•
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suspension of payments;
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•
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fines; and
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•
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suspension or debarment from doing business with the U.S. Government.
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•
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reduce or modify contracts or subcontracts;
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•
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cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable;
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•
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claim certain rights (including, under certain circumstances, certain intellectual property rights) in products and systems produced by us; and
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•
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suspend or debar us from doing business with the U.S. Government.
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Year ended December 31, 2012
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Actual
|
Pro Forma (unaudited)
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||||||||
Contract Type
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(in millions)
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(percentage)
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(in millions)
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(percentage)
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|
||
Time & Materials
|
$
|
116.2
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47.8
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%
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$
|
146.3
|
|
50.0
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%
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Fixed-Price-Level-of-Effort
|
$
|
33.1
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13.6
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%
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$
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36.7
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12.6
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%
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Firm-Fixed-Price
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$
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67.9
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27.9
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%
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$
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74.8
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25.5
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%
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Cost Reimbursement
|
$
|
26.3
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10.7
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%
|
$
|
34.9
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11.9
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%
|
|
Year ended December 31, 2011
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|||||||||
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Actual
|
Pro Forma (unaudited)
|
||||||||
Contract Type
|
(in millions)
|
|
(percentage)
|
|
(in millions)
|
|
(percentage)
|
|
||
Time & Materials
|
$
|
106.1
|
|
55.7
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%
|
$
|
112.6
|
|
52.3
|
%
|
Fixed-Price-Level-of-Effort
|
$
|
25.2
|
|
13.2
|
%
|
$
|
25.3
|
|
11.8
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%
|
Firm-Fixed-Price
|
$
|
44.5
|
|
23.3
|
%
|
$
|
61.8
|
|
28.7
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%
|
Cost Reimbursement
|
$
|
14.8
|
|
7.8
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%
|
$
|
15.5
|
|
7.2
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%
|
•
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the ability to implement our business strategies and to adapt and modify them as needed;
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•
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our efforts to develop and protect our reputation and customer loyalty within the sectors in which we compete for contracts;
|
•
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the management of our acquired subsidiaries and integrated operations, including the integration of any future acquisitions;
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•
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maintaining adequate control of our expenses; and
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•
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anticipating and adapting to future government proposals and the impact of any changes in government regulation.
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•
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identify suitable acquisition candidates;
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•
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negotiate appropriate acquisition terms;
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•
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obtain debt or equity financing that we may need to complete proposed acquisitions;
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•
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complete the proposed acquisitions; and
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•
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integrate the acquired business into our existing operations.
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•
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the level of demand for our products and services;
|
•
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the budgeting cycles and purchasing practices of our customers;
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•
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acquisitions of other businesses;
|
•
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failure to accurately estimate or control costs under FFP contracts;
|
•
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commencement, completion or termination of projects during any particular quarter; and
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•
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changes in senior U.S. Government officials that affect the timing of technology procurement.
|
•
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stop selling, incorporating or using our products that include the challenged intellectual property;
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•
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obtain from the owner of any infringed intellectual property right a license to sell or use the relevant technology, which license may not be available on reasonable terms, or at all; or may require us to extend a cross-license to rights under our intellectual property;
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•
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pay substantial damages; and/or
|
•
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re-design those products that use the technology.
|
•
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failure to predict market demand accurately in terms of functionality and to supply products that meet demand in a timely fashion;
|
•
|
defects, errors or failures;
|
•
|
negative publicity about their performance or effectiveness;
|
•
|
delays in releasing our new products or enhancements to the market;
|
•
|
introduction or anticipated introduction of competing products by our competitors; and
|
•
|
poor business conditions for our end-customers, causing them to delay purchases.
|
•
|
expenditure of significant financial and product development resources in efforts to analyze, correct, eliminate, or work-around errors or defects or to address and eliminate vulnerabilities;
|
•
|
loss of existing or potential customers;
|
•
|
delayed or lost revenue;
|
•
|
delay or failure to attain market acceptance; and
|
•
|
litigation, regulatory inquiries, or investigations that may be costly and harm our reputation.
|
•
|
quarterly variations in our operating results compared to market expectations;
|
•
|
changes in expectations as to our future financial performance, including financial estimates or reports by securities analysts;
|
•
|
changes in market valuations of similar companies;
|
•
|
liquidity and activity in the market for our common stock;
|
•
|
actual or expected sales of our common stock by our stockholders, including any of our significant stockholders;
|
•
|
strategic moves by us or our competitors, such as acquisitions or restructurings;
|
•
|
general market conditions;
|
•
|
future sales of our common stock; and
|
•
|
domestic and international economic, legal and regulatory factors unrelated to our performance.
|
•
|
Our charter permits our board of directors to issue preferred stock with terms that may discourage a third party from acquiring us.
Our charter permits our board of directors to issue up to 5 million shares of preferred stock, having preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption as determined by our board of directors. Our board of directors could authorize the issuance of preferred stock with terms and conditions that could have the effect of discouraging a takeover or other transaction in which holders of some or a majority of our shares might receive a premium for their shares over the then-prevailing market price; and
|
•
|
Our charter and bylaws contain other possible anti-takeover provisions
. Our charter and bylaws contain other provisions that may have the effect of delaying, deferring or preventing a change-of-control or the removal of existing directors and, as a result, could prevent our stockholders from being paid a premium for their common stock over the then-prevailing market price. These provisions include the advance notice requirements for stockholder proposals and director nominations.
|
•
|
accept, recommend or respond to any proposal by a person seeking to acquire control of the corporation;
|
•
|
authorize the corporation to redeem any rights under, or modify or render inapplicable, any stockholder rights plan;
|
•
|
make a determination under the Maryland Business Combination Act or the Maryland Control Share Acquisition Act; or
|
•
|
act or fail to act solely because of the effect that the act or failure to act might have on an acquisition or potential acquisition of control of the corporation or the amount or type of consideration that may be offered or paid to the stockholders in an acquisition.
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
Item 2.
|
PROPERTIES
|
Location
|
Square Feet
|
|
Lease Expiration Date
|
Segment
|
1400 Bridge Parkway, Suite 202
Redwood City, California 94065
|
7,818
|
|
3/31/2013
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Integrated Solutions
|
700 Brooker Creek Blvd. Suite 1400
Oldsmar, Florida 34677
|
12,800
|
|
9/30/2013
|
Integrated Solutions
|
7740 Milestone Parkway, Suite 400*
Hanover, Maryland 21076
|
122,312
|
|
5/31/2022
|
Both
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7663 Old Telegraph Road
Severn, Maryland 21144
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34,429
|
|
4/30/2017
|
Both
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1334 Ashton Road
Hanover, Maryland 21076
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22,561
|
|
5/31/2016
|
Integrated Solutions
|
10820 Guilford Road, Suites 201-226
Annapolis Junction, Maryland 20701
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17,700
|
|
1/31/2018
|
Services
|
7471 Candlewood Road, Suites 104-107
Hanover, Maryland 21076
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10,998
|
|
1/1/2018
|
Services
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9693 Gerwig Lane
Columbia, Maryland 21046
|
8,000
|
|
3/1/2015
|
Services
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9881/9891 Broken Land Parkway, Suite 120
Columbia, Maryland, 21046
|
2,447
|
|
3/31/2014
|
Services
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685 Mosser Road
McHenry, Maryland, 21541
|
669
|
|
9/1/2013
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Both
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250 Clarke Street
North Andover, Massachusetts, 01845
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9,600
|
|
3/31/2023
|
Integrated Solutions
|
Hangar #1, Lawrence Airport
North Andover, Massachusetts
|
N/A
|
|
7/31/2013
|
Integrated Solutions
|
2900 Fairview Park Drive, Suite 300
Falls Church, Virginia 22042
|
18,051
|
|
12/15/2018
|
Services
|
15036 Conference Center Dr., Suite 401
Chantilly, Virginia 20151
|
2,378
|
|
3/31/2014
|
Services
|
*
|
Headquarters
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASE OF EQUITY SECURITIES
|
|
High
|
|
Low
|
||||
Year Ended December 31, 2012:
|
|
|
|
||||
First Quarter
|
$
|
7.94
|
|
|
$
|
7.00
|
|
Second Quarter
|
$
|
10.10
|
|
|
$
|
7.63
|
|
Third Quarter
|
$
|
14.38
|
|
|
$
|
9.64
|
|
Fourth Quarter
|
$
|
13.64
|
|
|
$
|
11.87
|
|
Year Ended December 31, 2011:
|
|
|
|
|
|
||
First Quarter
|
$
|
15.54
|
|
|
$
|
11.48
|
|
Second Quarter
|
$
|
13.12
|
|
|
$
|
10.59
|
|
Third Quarter
|
$
|
12.39
|
|
|
$
|
6.72
|
|
Fourth Quarter
|
$
|
9.36
|
|
|
$
|
6.66
|
|
Plan Category
|
|
Number of Securities to be Issued upon Exercise of Outstanding Options, Warrants and Rights
(a)
|
|
Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (b)
|
|
Number of Securities Remaining Available for Future Issuance (Excluding Column (a)) (c)
(1)
|
||||
Equity compensation plans approved by security holders
|
|
2,991,414
|
|
|
$
|
9.22
|
|
|
1,266,073
|
|
Equity compensation plans not approved by security holders)
|
|
—
|
|
|
|
|
—
|
|
||
TOTAL
|
|
2,991,414
|
|
|
—
|
|
|
1,266,073
|
|
|
(1)
|
The securities remaining for future issuance are from our 2009 Stock Incentive Plan. This Plan has a maximum amount of shares available for issuance of 12,000,000 with a soft cap of 12% of the outstanding shares available for issuance. The 2013 Stock Incentive Plan, which takes effect on January 1, 2013, replaces the 2009 plan, and provides for the issuance of a maximum of 2,000,000 shares.
|
Period
|
|
Total number of shares (or units) purchased
|
|
Average price paid per share (or unit)
|
|
Total number of shares purchased as part of publicly announced plans or programs
|
|
Maximum number of shares that may yet be purchased under the plans or programs
|
|||||
December 7 – 31, 2011
|
|
425,902
|
|
|
$
|
7.24
|
|
|
425,902
|
|
|
1,574,098
|
|
January 1 – December 6, 2012
|
|
396,191
|
|
|
$
|
7.44
|
|
|
396,191
|
|
|
1,177,907
|
|
Total
|
|
822,093
|
|
|
$
|
7.34
|
|
|
822,093
|
|
|
1,177,907
|
|
Item 6.
|
SELECTED FINANCIAL DATA
|
|
Company
|
|
Predecessor
|
||||||||||||||||||||
|
Year ended Dec. 31, 2012
|
|
Year ended Dec. 31, 2011
|
|
Year ended Dec. 31, 2010
|
|
Year ended Dec. 31, 2009
|
|
July 31, (Inception) through Dec. 31, 2008
|
|
Period from Jan 1 through Sept. 29, 2008
|
||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||||
Revenue
|
$
|
243,520
|
|
|
$
|
190,587
|
|
|
$
|
107,988
|
|
|
$
|
39,037
|
|
|
$
|
9,045
|
|
|
$
|
14,563
|
|
Gross Profit
|
83,793
|
|
|
56,637
|
|
|
31,544
|
|
|
11,119
|
|
|
4,220
|
|
|
5,212
|
|
||||||
Net Operating Income (Loss)
|
3,193
|
|
|
1,828
|
|
|
(2,160
|
)
|
|
(2,309
|
)
|
|
35
|
|
|
1,108
|
|
||||||
Net Income (Loss)
|
1,015
|
|
|
535
|
|
|
10,906
|
|
|
(2,113
|
)
|
|
(2,066
|
)
|
|
1,041
|
|
||||||
Earnings (Loss) per Share of Common Stock-basic
|
0.04
|
|
|
0.02
|
|
|
0.62
|
|
|
(0.18
|
)
|
|
(0.32
|
)
|
|
n/a
|
|
||||||
Earnings (Loss) per Share of Common Stock-diluted
|
0.03
|
|
|
0.02
|
|
|
0.51
|
|
|
(0.18
|
)
|
|
(0.32
|
)
|
|
n/a
|
|
||||||
Adjusted EBITDA
|
32,978
|
|
|
20,569
|
|
|
9,031
|
|
|
2,578
|
|
|
750
|
|
|
2,702
|
|
|
Company
|
|
Predecessor
|
||||||||||||||||||
|
As of
Dec. 31, 2012
|
|
As of
Dec. 31, 2011
|
|
As of
Dec. 31, 2010
|
|
As of
Dec. 31, 2009
|
|
As of
Dec. 31, 2008
|
|
As of
Sept. 29, 2008
|
||||||||||
|
(In thousands)
|
||||||||||||||||||||
Cash and Cash Equivalents
|
$
|
5,639
|
|
|
$
|
1,294
|
|
|
$
|
5,795
|
|
|
$
|
7,333
|
|
|
$
|
5,397
|
|
|
n/a
|
Working Capital (Deficit)
|
16,451
|
|
|
(16,344
|
)
|
|
26,705
|
|
|
19,365
|
|
|
9,312
|
|
|
n/a
|
|||||
Total Assets
|
462,675
|
|
|
267,631
|
|
|
205,264
|
|
|
67,130
|
|
|
35,885
|
|
|
n/a
|
|||||
Long-Term Obligations
|
100,113
|
|
|
17,731
|
|
|
11,994
|
|
|
1,617
|
|
|
7,494
|
|
|
n/a
|
|||||
Total Stockholders' Equity
|
301,028
|
|
|
180,659
|
|
|
175,111
|
|
|
62,339
|
|
|
26,288
|
|
|
n/a
|
|
EBITDA Reconciliation
|
|
|
||||||||||||||||||||
|
Company
|
|
Predecessor
|
||||||||||||||||||||
|
Year Ended
Dec. 31, 2012
|
|
Year Ended
Dec. 31, 2011
|
|
Year Ended
Dec. 31, 2010
|
|
Year Ended
Dec. 31, 2009
|
|
Year Ended
Dec. 31, 2008
|
|
Nine Months Ended
Sept. 29, 2008
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Net Income (Loss)
|
$
|
1,015
|
|
|
$
|
535
|
|
|
$
|
10,906
|
|
|
$
|
(2,113
|
)
|
|
$
|
(2,066
|
)
|
|
$
|
1,041
|
|
Depreciation
|
4,369
|
|
|
2,082
|
|
|
760
|
|
|
310
|
|
|
24
|
|
|
9
|
|
||||||
Intangible Amortization
|
21,411
|
|
|
13,410
|
|
|
6,440
|
|
|
2,055
|
|
|
612
|
|
|
—
|
|
||||||
Stock Compensation Amortization
|
3,024
|
|
|
2,829
|
|
|
1,920
|
|
|
560
|
|
|
56
|
|
|
—
|
|
||||||
Interest Expense (Income)
|
2,307
|
|
|
907
|
|
|
1,661
|
|
|
(118
|
)
|
|
—
|
|
|
(22
|
)
|
||||||
Tax Expense (Benefit)
|
(86
|
)
|
|
218
|
|
|
7,814
|
|
|
(979
|
)
|
|
21
|
|
|
—
|
|
||||||
Warrant Expense
|
—
|
|
|
—
|
|
|
—
|
|
|
690
|
|
|
2,103
|
|
|
—
|
|
||||||
Initial Public Offering and Acquisition Costs
|
938
|
|
|
588
|
|
|
2,080
|
|
|
73
|
|
|
—
|
|
|
—
|
|
||||||
Other Non-Recurring Items
(1)
|
—
|
|
|
—
|
|
|
(22,550
|
)
|
|
2,100
|
|
|
—
|
|
|
1,674
|
|
||||||
Adjusted EBITDA
|
$
|
32,978
|
|
|
$
|
20,569
|
|
|
$
|
9,031
|
|
|
$
|
2,578
|
|
|
$
|
750
|
|
|
$
|
2,702
|
|
|
2012
|
|
2011
|
||||||||||||||||||||||||||||
|
Three
Months
Ended
March 31
|
|
Three
Months
Ended
June 30
|
|
Three
Months
Ended
Sept. 30
|
|
Three
Months
Ended
Dec. 31
|
|
Three
Months
Ended
March 31
|
|
Three
Months
Ended
June 30
|
|
Three
Months
Ended
Sept. 30
|
|
Three
Months
Ended
Dec. 31
|
||||||||||||||||
|
(Unaudited and in thousands, except per share data)
|
||||||||||||||||||||||||||||||
Revenue
|
$
|
55,776
|
|
|
$
|
56,155
|
|
|
$
|
57,353
|
|
|
$
|
74,236
|
|
|
$
|
41,661
|
|
|
$
|
44,898
|
|
|
$
|
53,957
|
|
|
$
|
50,071
|
|
Gross Profit
|
18,929
|
|
|
18,933
|
|
|
19,487
|
|
|
26,444
|
|
|
12,241
|
|
|
13,037
|
|
|
15,149
|
|
|
16,210
|
|
||||||||
Net Operating Income
|
648
|
|
|
525
|
|
|
703
|
|
|
1,317
|
|
|
175
|
|
|
239
|
|
|
345
|
|
|
1,069
|
|
||||||||
Net Income
|
168
|
|
|
325
|
|
|
341
|
|
|
181
|
|
|
64
|
|
|
49
|
|
|
105
|
|
|
317
|
|
||||||||
Per Share of Common Stock-basic
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.01
|
|
||||||||
Per Share of Common Stock-diluted
|
0.01
|
|
|
0.01
|
|
|
0.01
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.00
|
|
|
0.01
|
|
||||||||
Adjusted EBITDA
|
$
|
7,219
|
|
|
$
|
7,599
|
|
|
$
|
7,760
|
|
|
$
|
10,400
|
|
|
$
|
3,312
|
|
|
$
|
3,872
|
|
|
$
|
5,425
|
|
|
$
|
7,960
|
|
|
Adjusted EBITDA Reconciliation
|
||||||||||||||||||||||||||||||
|
2012
|
|
2011
|
||||||||||||||||||||||||||||
|
Three
Months
Ended
March 31
|
|
Three
Months
Ended
June 30
|
|
Three
Months
Ended
Sept. 30
|
|
Three
Months
Ended
Dec. 31
|
|
Three
Months
Ended
March 31
|
|
Three
Months
Ended
June 30
|
|
Three
Months
Ended
Sept. 30
|
|
Three
Months
Ended
Dec. 31
|
||||||||||||||||
|
(Unaudited and in thousands)
|
||||||||||||||||||||||||||||||
Net Income
|
$
|
168
|
|
|
$
|
325
|
|
|
$
|
341
|
|
|
$
|
181
|
|
|
$
|
64
|
|
|
$
|
49
|
|
|
$
|
105
|
|
|
$
|
317
|
|
Depreciation
|
1,028
|
|
|
1,027
|
|
|
1,085
|
|
|
1,229
|
|
|
255
|
|
|
272
|
|
|
612
|
|
|
943
|
|
||||||||
Intangible Amortization
|
4,869
|
|
|
4,869
|
|
|
4,869
|
|
|
6,804
|
|
|
2,068
|
|
|
2,465
|
|
|
3,573
|
|
|
5,304
|
|
||||||||
Stock Compensation Amortization
|
648
|
|
|
698
|
|
|
722
|
|
|
956
|
|
|
756
|
|
|
742
|
|
|
671
|
|
|
660
|
|
||||||||
Interest Expense
|
417
|
|
|
456
|
|
|
418
|
|
|
1,016
|
|
|
23
|
|
|
198
|
|
|
322
|
|
|
364
|
|
||||||||
Tax Expense (Benefit)
|
66
|
|
|
200
|
|
|
(13
|
)
|
|
(339
|
)
|
|
90
|
|
|
(16
|
)
|
|
(90
|
)
|
|
234
|
|
||||||||
Initial Public Offering and Acquisition Costs
|
23
|
|
|
24
|
|
|
338
|
|
|
553
|
|
|
56
|
|
|
162
|
|
|
232
|
|
|
138
|
|
||||||||
Adjusted EBITDA
|
$
|
7,219
|
|
|
$
|
7,599
|
|
|
$
|
7,760
|
|
|
$
|
10,400
|
|
|
$
|
3,312
|
|
|
$
|
3,872
|
|
|
$
|
5,425
|
|
|
$
|
7,960
|
|
•
|
we have various non-recurring transactions and expenses that directly impact our net income. Adjusted EBITDA is intended to approximate the net cash provided by operations by adjusting for non-recurring, non-operational items; and
|
•
|
securities analysts use adjusted EBITDA as a supplemental measure to evaluate the overall operating performance of companies.
|
•
|
as a measure of operating performance;
|
•
|
to determine a significant portion of management’s incentive compensation;
|
•
|
for planning purposes, including the preparation of our annual operating budget; and
|
•
|
to evaluate the effectiveness of our business strategies.
|
•
|
adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or other contractual commitments;
|
•
|
adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
|
•
|
adjusted EBITDA does not reflect interest expense or interest income;
|
•
|
adjusted EBITDA does not reflect cash requirements for income taxes;
|
•
|
adjusted EBITDA does not include non-cash expenses related to stock compensation;
|
•
|
although depreciation and amortization are non-cash charges, the assets being depreciated or amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash requirements for these replacements; and
|
•
|
other companies in our industry may calculate adjusted EBITDA or similarly titled measures differently than we do, limiting its usefulness as a comparative measure.
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Executive Level Overview.
Discussion of our business and overall analysis of financial and other highlights affecting our company in order to provide context for the remainder of MD&A and our overall strategy.
|
•
|
Critical Accounting Policies.
Accounting estimates that we believe are most important to understanding the assumptions and judgments incorporated in our reported financial results and forecasts.
|
•
|
Results of Operations.
An analysis of our segmented financial results comparing 2012 to 2011 and comparing 2011 to 2010.
|
•
|
Liquidity and Capital Resources.
An analysis of changes in our balance sheets and cash flows, and discussion of our financial condition and sources of and needs for liquidity.
|
•
|
Contractual Obligations and Commitments; Off-Balance-Sheet Arrangements.
Overview of contractual obligations, contingent liabilities, commitments, and off-balance-sheet arrangements outstanding as of December 31, 2012.
|
•
|
Revenue Recognition
|
•
|
Cost of Revenues
|
•
|
Inventories
|
•
|
Software Development Costs
|
•
|
Long-Lived Assets (Excluding Goodwill)
|
•
|
Goodwill
|
•
|
Intangibles
|
•
|
Research and Development Costs
|
•
|
Income Taxes
|
•
|
Share-Based Compensation
|
SERVICES SEGMENT RESULTS
(In thousands)
|
|
Year ended
December 31, 2012
|
|
Year ended
December 31, 2011
|
|
Year ended
December 31, 2010
|
||||||||||||
Revenue
|
|
$
|
171,776
|
|
100
|
%
|
|
$
|
159,748
|
|
100
|
%
|
|
$
|
95,665
|
|
100
|
%
|
Gross Margin
|
|
$
|
46,414
|
|
27
|
%
|
|
$
|
44,405
|
|
28
|
%
|
|
$
|
26,353
|
|
28
|
%
|
Intangible Amortization
|
|
$
|
11,608
|
|
7
|
%
|
|
$
|
9,581
|
|
6
|
%
|
|
$
|
6,440
|
|
7
|
%
|
INTEGRATED SOLUTIONS
SEGMENT RESULTS
(In thousands)
|
|
Year ended
December 31, 2012
|
|
Year ended
December 31, 2011
|
|
Year ended
December 31, 2010
|
||||||||||||
Revenue
|
|
$
|
71,744
|
|
100
|
%
|
|
$
|
30,839
|
|
100
|
%
|
|
$
|
12,323
|
|
100
|
%
|
Gross Margin
|
|
$
|
37,379
|
|
52
|
%
|
|
$
|
12,232
|
|
40
|
%
|
|
$
|
5,191
|
|
42
|
%
|
Intangible Amortization
|
|
$
|
9,803
|
|
14
|
%
|
|
$
|
3,829
|
|
12
|
%
|
|
$
|
—
|
|
—
|
|
|
Total
|
Less than
one year
|
1 – 3 years
|
3 – 5 years
|
More than
5 years
|
||||||||||
|
(In thousands)
|
||||||||||||||
Facilities/Office space
|
$
|
41,035
|
|
$
|
5,154
|
|
$
|
10,196
|
|
$
|
9,521
|
|
$
|
16,164
|
|
Office equipment
|
78
|
|
44
|
|
34
|
|
—
|
|
—
|
|
|||||
Total Operating Leases
|
$
|
41,113
|
|
$
|
5,198
|
|
$
|
10,230
|
|
$
|
9,521
|
|
$
|
16,164
|
|
Debt
|
89,688
|
|
5,688
|
|
14,000
|
|
70,000
|
|
—
|
|
|||||
Total Contractual Obligations
|
$
|
130,801
|
|
$
|
10,886
|
|
$
|
24,230
|
|
$
|
79,521
|
|
$
|
16,164
|
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Name
|
|
Age
|
|
Position
|
Leonard E. Moodispaw
|
|
70
|
|
President; Chief Executive Officer and Chairman of the Board of Directors
|
John E. Krobath
|
|
45
|
|
Chief Financial Officer
|
Mark A. Willard
|
|
53
|
|
Chief Impact Officer
|
Kimberly J. DeChello
|
|
51
|
|
Chief Administrative Officer and Secretary
|
Edwin M. Jaehne
|
|
60
|
|
Chief Strategy Officer
|
William I. Campbell
|
|
68
|
|
Director
|
Pierre A. Chao
|
|
46
|
|
Director
|
John G. Hannon
|
|
75
|
|
Director
|
Kenneth A. Minihan
|
|
69
|
|
Director
|
Arthur L. Money
|
|
73
|
|
Director
|
Caroline S. Pisano
|
|
46
|
|
Director
|
Conduct
|
Political Contributions, Activities and Public Positions
|
Public Disclosure
|
Government Officials and Company Personnel
|
Legal Compliance
|
Payments to Employees of Customers or Suppliers
|
Government Business
|
Conflict of Interest
|
Company Records and Accounts
|
Compliance with Tax and Currency Laws
|
Insider Trading
|
Import and Export
|
Vigilant Reporting
|
Time Recording
|
Indoctrination
|
Reporting of Violations
|
•
|
Determining the appointment, compensation, retention and oversight of our independent registered public accounting firm; evaluating the qualifications, performance and independence of our independent registered public accounting firm, and approving the audit and non-audit services to be performed by our independent registered public accounting firm;
|
•
|
Overseeing our accounting and financial reporting processes and the audits of our financial statements; and
|
•
|
Reviewing and assessing the qualitative aspects of our financial reporting, our processes to manage business and financial risk, and our compliance with significant applicable legal, ethical and regulatory requirements as they relate to financial statements or accounting matters.
|
•
|
Reviewing and recommending KEYW’s general policy regarding executive compensation;
|
•
|
Reviewing and recommending compensation for our chief executive officer and our other executive officers, including annual base salary, annual incentive bonus (including the specific goals required to receive an annual incentive bonus and the amount of any such annual incentive bonus), equity compensation and any other benefits or compensation;
|
•
|
Reviewing and recommending any employment-related agreements, severance arrangements and change-of-control arrangements and similar agreements/arrangements for our executive officers;
|
•
|
Reviewing and recommending compensation plans for our employees and amendments to our compensation plans to our board of directors;
|
•
|
Preparing the compensation committee report that the SEC requires to be included in our annual proxy statement; and
|
•
|
Overseeing, reviewing and making recommendations with respect to our equity incentive plans.
|
•
|
Advising our management and board of directors of means to ensure that we adhere to the highest ethical standards in our day to day operations;
|
•
|
Ensuring that a positive working environment is created and maintained for all of our employees and that those employees are challenged to meet such a standard;
|
•
|
Providing a forum for advice to the internal auditor and corporate counsel, our management and any of our employees to consider ethical issues; and
|
•
|
Recommending to our management and the entire board of directors means to train managers and employees.
|
•
|
Reviewing developments in corporate governance practices and developing and recommending governance principles, policies and procedures applicable to KEYW;
|
•
|
Identifying, reviewing and recommending to our board of directors nominees for election to our board of directors and to fill vacancies on our board of directors;
|
•
|
New director orientation;
|
•
|
Reviewing and making recommendations to our board of directors regarding board committee structure and membership; and
|
•
|
Succession planning for our executive officers.
|
Item 11.
|
EXECUTIVE COMPENSATION
|
•
|
Len Moodispaw — President & Chief Executive Officer;
|
•
|
John Krobath — Chief Financial Officer;
|
•
|
Mark Willard — Chief Impact Officer;
|
•
|
Kim DeChello — Chief Administrative Officer; and
|
•
|
Ed Jaehne — Chief Strategy Officer.
|
•
|
reviewing and recommending corporate goals and objectives as they relate to executive compensation;
|
•
|
evaluating the performance of executive officers;
|
•
|
overseeing the administration of incentive and equity-based compensation plans;
|
•
|
recommending new plans, plan amendments, and/or the termination of current plans;
|
•
|
recommending board of directors’ compensation, such as retainers, chairperson fees, or equity grants; and
|
•
|
overseeing the work of external consultants advising KEYW on compensation matters.
|
|
AeroVironment, Inc.
|
|
ICF International, Inc.
|
|
American Science & Engineering, Inc.
|
|
Mercury Computer Systems, Inc.
|
|
Dynamics Research Corporation
|
|
NCI, Inc.
|
|
GeoEye, Inc.
|
|
Sourcefire, Inc.
|
|
Globecomm Systems, Inc.
|
|
|
•
|
2012 Western Management Group Government Contractors Compensation Survey
|
•
|
2012 Aon Hewitt Executive Total Compensation Report
|
•
|
2012 Mercer Benchmark Database - Executive Report
|
•
|
2011 Towers Watson Survey Report on Top Management Compensation
|
Compensation Component
|
|
Description
|
|
Purpose
|
Base Salary
|
|
Base compensation for performing core responsibilities and contributions to the company.
|
|
Provide steady source of income based primarily on scope of responsibility and years of experience.
|
Annual Incentives
|
|
Annual cash incentive opportunities are provided for under the KEYW Annual Incentive Plan and are expressed as a percentage of base salary. Threshold, target, and maximum incentive opportunities are established based on corporate, business unit, and individual goals.
|
|
Ensure focus on specific annual goals, provide annual performance-based cash compensation, and motivate achievement of critical short-term performance metrics.
|
Long-Term Incentives
|
|
Equity grants provided under our equity incentive plans to all executives and employees. Equity award types provided for include Stock Options and Restricted Stock. Cash-based incentives also may be provided from time to time under our long-term incentive plan.
|
|
Align the interests of executives with stockholders, provide for executive ownership of stock, attract, retain and motivate key talent, and reward long-term growth of the business.
|
Compensation Component
|
|
Description
|
|
Purpose
|
|
Discretionary Awards
|
|
One-time awards of cash or equity.
|
|
Intended to recognize exceptional contributions to KEYW’s business by individual executives and employees.
|
|
Retirement, Health, & Welfare Benefits
|
|
Includes benefits such as:
|
|
These benefits are part of our broad-based total compensation program, available to all full-time employees of the Company.
|
|
|
|
Health, dental and vision insurance
|
|
||
|
|
Life and disability insurance
|
|
||
|
|
Long Term Care
|
|
||
|
|
Paid Time Off & Holidays
|
|
||
|
|
Company 401(k) contributions
|
|
||
|
|
Employee Stock Purchase Plan
|
|
•
|
Motivate eligible employees to achieve annual financial performance goals, other corporate goals or individual goals, depending on the level of seniority and responsibilities of the employee;
|
•
|
Reward employees for achievement of financial, business unit, and individual performance targets that contribute to the creation of long-term stockholder value; and
|
•
|
Provide maximum flexibility to reward individual employee performance and innovation.
|
|
|
2012
Base Salary
|
|
Payment Level/Percentage
Achievement of 2012 Financial Target
|
||||||||||||
Name
|
|
Minimum/90%
|
|
Target/100%
|
|
Maximum/110%
|
||||||||||
Len Moodispaw
|
|
$
|
415,002
|
|
|
$
|
155,626
|
|
|
$
|
311,252
|
|
|
$
|
466,877
|
|
John Krobath
|
|
$
|
250,016
|
|
|
$
|
62,504
|
|
|
$
|
125,008
|
|
|
$
|
187,512
|
|
Mark Willard
|
|
$
|
300,019
|
|
|
$
|
75,005
|
|
|
$
|
150,010
|
|
|
$
|
225,014
|
|
Kim DeChello
|
|
$
|
225,014
|
|
|
$
|
56,254
|
|
|
$
|
112,507
|
|
|
$
|
168,761
|
|
Ed Jaehne
|
|
$
|
210,018
|
|
|
$
|
52,505
|
|
|
$
|
105,009
|
|
|
$
|
157,514
|
|
•
|
attract, retain, and motivate key contributors to KEYW’s profitability and growth;
|
•
|
align employee and stockholder interests;
|
•
|
share the benefits of appreciation in the value of KEYW’s common stock with key contributors; and
|
•
|
facilitate stock ownership by key contributors.
|
•
|
The advantage of a longer term perspective that a triennial vote would bring, in light of the significant equity component of the Company’s compensation program with vesting over three or more years, the value of which is directly linked to share performance. Further, a vote every three years provides a longer term compensation history and business performance track record against which to measure management’s strategic long-term business decisions and more frequent votes may focus undue attention on the particular year being reported as opposed to the longer term focus the Company is seeking to achieve through its compensation policies.
|
•
|
The strong support for the Company’s compensation program evidenced by the shareholders’ 2011 advisory “say on pay” vote on compensation in which approximately 67% of the shares voting on the proposal approved the executive compensation reflected in the Company’s 2011 proxy statement.
|
•
|
The board’s recommendation contained in the proxy statement for the Company’s 2011 Annual Meeting of Stockholders that the advisory “say on pay” vote be held every three years.
|
NEO
|
|
Annual Incentive
Plan (AIP)
Performance
Award
|
|
AIP Discretionary Award
|
|
Total
|
||||||
Len Moodispaw
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
John Krobath
|
|
18,751
|
|
|
31,259
|
|
|
50,010
|
|
|||
Mark Willard
|
|
20,626
|
|
|
29,374
|
|
|
50,000
|
|
|||
Kim DeChello
|
|
15,001
|
|
|
34,999
|
|
|
50,000
|
|
|||
Ed Jaehne
|
|
15,001
|
|
|
9,999
|
|
|
25,000
|
|
|
(1)
|
The compensation committee approved a $100,000 bonus payment under the 2011 AIP to Mr. Moodispaw based on his performance and their confidence in him. Mr. Moodispaw declined the bonus payment to show his commitment in improving share value and aligning his interests with the shareholders.
|
Name/Title
|
|
2011
Base Salary
|
|
2012
Base Salary
|
|
Percentage
Increase
|
|||||
Len Moodispaw
President and Chief Executive Officer
|
|
$
|
415,002
|
|
|
$
|
415,002
|
|
|
—
|
%
|
John Krobath
Chief Financial Officer
|
|
$
|
250,016
|
|
|
$
|
250,016
|
|
|
—
|
%
|
Mark Willard
(1)
Chief Impact Officer
|
|
$
|
275,018
|
|
|
$
|
300,019
|
|
|
9.09
|
%
|
Kim DeChello
Chief Administrative Officer and Secretary
|
|
$
|
225,014
|
|
|
$
|
225,014
|
|
|
—
|
%
|
Ed Jaehne
Chief Strategy Officer
|
|
$
|
210,018
|
|
|
$
|
210,018
|
|
|
—
|
%
|
(1)
|
Mr. Willard was given a base salary increase due to his increased responsibilities because of the growth of KEYW from acquisitions and organic hiring.
|
NEO
|
|
Annual Incentive
Plan (AIP)
Performance
Award
|
|
AIP Discretionary Award
|
|
Total
|
||||||
Len Moodispaw
(1)
|
|
$
|
366,875
|
|
|
$
|
—
|
|
|
$
|
366,875
|
|
John Krobath
|
|
187,500
|
|
|
—
|
|
|
187,500
|
|
|||
Mark Willard
|
|
225,000
|
|
|
—
|
|
|
225,000
|
|
|||
Kim DeChello
|
|
168,750
|
|
|
—
|
|
|
168,750
|
|
|||
Ed Jaehne
|
|
78,750
|
|
|
—
|
|
|
78,750
|
|
|
(1)
|
The compensation committee approved a $466,875 bonus payment under the 2012 AIP o Mr. Moodispaw based on his performance and their confidence in him. Mr. Moodispaw declined $100,000 of the bonus and requested KEYW to make a charitable contribution with those funds. The Company will comply with this request in 2013.
|
Executive
|
|
Base Salary beginning December 28, 2012
|
Len Moodispaw
|
|
$500,000
|
Mark Willard
|
|
$325,000
|
John Krobath
|
|
$280,000
|
Kim DeChello
|
|
$250,000
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
(6)(7)
|
|
Option
Awards
($)
(6)(7)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
All Other
Compensation
($)
(8)
|
|
Total
($)
|
|||||||||
Len Moodispaw
President and Chief Executive Officer
|
|
2012
|
|
415,002
|
|
|
—
|
|
|
|
111,150
|
|
|
61,318
|
|
|
366,875
|
|
(1)(4)
|
|
77,961
|
|
(9)
|
|
1,032,306
|
|
2011
|
|
412,502
|
|
|
—
|
|
|
|
94,705
|
|
|
353,694
|
|
|
—
|
|
(2)
|
|
43,480
|
|
|
|
904,381
|
|
||
2010
|
|
348,080
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
131,300
|
|
(4)(5)
|
|
59,304
|
|
|
|
538,684
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
John Krobath
Chief Financial Officer
|
|
2012
|
|
250,016
|
|
|
20,000
|
|
(3)
|
|
55,575
|
|
|
47,599
|
|
|
187,500
|
|
(4)
|
|
276,437
|
|
(10)
|
|
837,127
|
|
2011
|
|
249,054
|
|
|
—
|
|
|
|
58,280
|
|
|
119,319
|
|
|
50,000
|
|
(4)
|
|
227,353
|
|
(11)
|
|
704,006
|
|
||
2010
|
|
224,053
|
|
|
—
|
|
|
|
—
|
|
|
26,786
|
|
|
56,300
|
|
(4)
|
|
44,488
|
|
|
|
351,627
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Mark Willard
Chief Impact Officer
|
|
2012
|
|
293,288
|
|
|
—
|
|
|
|
55,575
|
|
|
77,617
|
|
|
225,000
|
|
(4)
|
|
85,789
|
|
(12)
|
|
737,269
|
|
2011
|
|
273,671
|
|
|
—
|
|
|
|
58,280
|
|
|
127,841
|
|
|
50,000
|
|
(4)
|
|
59,708
|
|
|
|
569,500
|
|
||
2010
|
|
238,881
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
60,000
|
|
(4)
|
|
65,250
|
|
|
|
364,131
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Kim DeChello
Chief Administrative Officer
|
|
2012
|
|
225,014
|
|
|
—
|
|
|
|
55,575
|
|
|
47,599
|
|
|
168,750
|
|
(4)
|
|
74,933
|
|
(13)
|
|
571,871
|
|
2011
|
|
215,399
|
|
|
—
|
|
|
|
48,081
|
|
|
106,534
|
|
|
50,000
|
|
(4)
|
|
57,679
|
|
|
|
477,693
|
|
||
2010
|
|
198,769
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
50,000
|
|
(4)
|
|
58,511
|
|
|
|
307,280
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Ed Jaehne
Chief Strategy Officer
|
|
2012
|
|
210,018
|
|
|
—
|
|
|
|
22,230
|
|
|
44,758
|
|
|
78,750
|
|
(4)
|
|
76,051
|
|
|
|
431,807
|
|
2011
|
|
206,169
|
|
|
—
|
|
|
|
29,140
|
|
|
63,921
|
|
|
25,000
|
|
(4)
|
|
48,454
|
|
|
|
372,684
|
|
||
2010
|
|
199,280
|
|
|
—
|
|
|
|
—
|
|
|
14,441
|
|
|
50,000
|
|
(4)
|
|
49,189
|
|
|
|
312,910
|
|
|
(1)
|
The compensation committee approved a $466,875 bonus payment under the 2012 AIP to Mr. Moodispaw based on his performance and their full confidence in him. Mr. Moodispaw declined $100,000 of the bonus and requested KEYW to make a charitable contribution with those funds.
|
(2)
|
The compensation committee approved a $100,000 bonus payment under the 2011 AIP to Mr. Moodispaw based on his performance and their full confidence in him. Mr. Moodispaw declined the bonus payment to show his commitment in improving share value and aligning his interests with the shareholders.
|
(3)
|
The compensation committee approved a $20,000 bonus payment to Mr. Krobath for his performance for the successful secondary offering.
|
(4)
|
On January 25, 2013 AIP awards paid were based on achievement of the applicable performance targets as determined by the compensation committee. See table titled "Payment Level/Percentage Achievement of 2012 Financial Target". On January 27, 2012 AIP awards were paid based on achievement of applicable performance targets of some subsidiaries. KEYW did not meet the minimum targets but the compensation committee, under their discretion provided by the plan, determined to award additional cash awards to the NEOs based on their individual performance on non-defined targets such as integration of all previous acquisitions. 2010 AIP awards were paid January 28, 2011 based on the achievement of the applicable performance targets as determined by the compensation committee. See table title “Payment Level/Percentage Achievement of 2010 Financial Target” above in Executive Compensation.
|
(5)
|
Mr. Moodispaw invested a portion of this bonus in KEYW common stock by purchasing 10,000 shares on February 11, 2011.
|
(6)
|
Amounts reported in this column reflect the aggregate grant date fair value as calculated under FASB ASC Topic 718. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our audited financial statements and notes thereto which are included elsewhere in this Form 10-K for a description of the assumptions used in making these calculations.
|
(7)
|
Equity awards granted to our NEOs in 2010, 2011 and 2012 were issued out of our 2009 Plan. See “— Executive Compensation — Equity Incentive Plans” for a description of our 2009 and 2008 Plans.
|
(8)
|
Represents KEYW matching contributions under our 401(k), employee stock purchase plan, paid time off (PTO) payouts of amounts over the accrual limits, premiums paid by KEYW for health, dental, vision, long-term care, life and disability insurance, as well as an expense allowance to cover miscellaneous non-travel business expenses. Except as described in footnotes (9 - 13) to the Summary Compensation Table, none of the benefits included in the “All Other Compensation” column above for any of our NEOs exceeds the greater of $25,000 or 10% of the total amount of benefits for that NEO.
|
(9)
|
Includes PTO payout of $44,220, the amount over the accrual limit.
|
(10)
|
Includes gain on restricted stock vesting in the amount of $219,300.
|
(11)
|
Includes gain on restricted stock vesting in the amount of $184,200.
|
(12)
|
Includes PTO payout of $29,973, the amount over the accrual limit.
|
(13)
|
Includes PTO payout of $25,869 the amount over the accrual limit.
|
|
|
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1)
|
|
Estimated Future Payouts Under
Equity Incentive Plan
Awards (2)
|
|
All other
stock
awards:
Number of
shares of
stock or
units
(#)
|
|
All other
options
awards:
Number of
securities
underlying
options
(#)(3)
|
|
Exercise
price of option
awards
($/Sh)
|
|
Grant date fair value
of stock
and option awards
($)(4)
|
|||||||||||||||||
Name
|
|
Grant
Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
||||||||||||||||
Len Moodispaw
|
|
|
|
155,626
|
|
|
311,252
|
|
|
466,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
2/8/2012
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
60,000
|
|
|
|
|
|
|
|
|
172,468
|
|
|||||
John Krobath
|
|
|
|
62,504
|
|
|
125,008
|
|
|
187,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
2/8/2012
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
|
|
|
|
|
|
103,174
|
|
|||||
Mark Willard
|
|
|
|
75,005
|
|
|
150,010
|
|
|
225,014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
2/8/2012
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
|
|
|
|
|
|
103,174
|
|
|||||
|
|
8/15/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
10.98
|
|
|
30,017
|
|
||||||
Kim DeChello
|
|
|
|
56,254
|
|
|
112,507
|
|
|
168,761
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
2/8/2012
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
|
|
|
|
|
|
103,174
|
|
|||||
Ed Jaehne
|
|
|
|
52,505
|
|
|
105,009
|
|
|
157,514
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
2/8/2012
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
12,000
|
|
|
|
|
|
|
|
|
41,270
|
|
|||||
|
|
11/1/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
13.00
|
|
|
25,718
|
|
|
(1)
|
Amounts in these columns show the range of payouts that was possible under the Company’s AIP based on performance during 2012, as described in the Compensation Discussion and Analysis section above. The actual bonus amounts that were paid in 2013 based on 2012 performance are shown in the Summary Compensation table above in the column titled “Non-Equity Incentive Plan Compensation”.
|
(2)
|
Amounts in these columns show the maximum number of shares that may vest pursuant to the LTIP awards made to the NEOs in 2012, as described in the Compensation Discussion and Analysis section above. The LTIP awards were as follows: Mr. Moodispaw: 15,000 shares of restricted stock and 45,000 non-qualified stock options; Mr. Krobath: 7,500 shares of restricted stock and 22,500 non-qualified stock options; Mr. Willard: 7,500 shares of restricted stock and 22,500 non-qualified stock options; Ms. DeChello: 7,500 shares of restricted stock and 22,500 non-qualified stock options; Mr. Jaehne: 3,000 shares of restricted stock and 9,000 non-qualified stock options. Each of the stock option awards was made at a strike price of $7.41 except for Mr. Moodispaw which was made at $10.00. Mr. Moodispaw requested a higher strike price to demonstrate his commitment to improving share value and aligning his interests with the shareholders. The restricted stock cliff vests in February 2015, and the options have performance-based vesting based on attainment of financial performance goals: 50% in February 2013, 25% in February 2014 and 25% in February 2015. If performance is not met prior to the first vesting, the options are canceled. The financial performance goal for February 2013 vesting of the stock options was met.
|
(3)
|
Non-qualified stock options granted under the 2009 Plan. These awards are scheduled to vest with respect to 25% of the award on grant date in each of 2012, 2013, 2014 and 2015.
|
(4)
|
Amounts reported in this column reflect the aggregate grant date fair value as calculated under FASB ASC Topic 718. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our audited financial statements and notes thereto, which are included elsewhere in this Form 10-K, for a description of the assumptions used in making these calculations.
|
|
|
Option Awards
|
|
Stock Awards
|
||||||||||||||||
Name
|
|
Number of Securities Underlying Unexercised Options (#) Exercisable
|
|
Number of Securities Underlying Unexercised Options (#) Unexercisable
|
|
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)
|
|
Option Exercise
Price
($)
|
|
Option Expiration Date
|
|
Number of Shares of
Stock That Have Not Vested
(#)
|
|
Market Value
of Shares of
Stock That Have Not Vested
($) *
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, That Have Not Vested (#)
|
|
Equity Incentive Plan Awards: Market Value of Unearned Shares Units or Other Rights That Have Not Vested ($) *
|
||
Len Moodispaw
|
|
|
|
|
|
45,000
|
|
10.00
|
|
2/7/2022
(1)
|
|
6,500
(10)
|
|
82,485
|
|
|
15,000
(11)
|
|
190,350
|
|
|
|
41,500
|
|
41,500
|
|
|
|
14.57
|
|
1/30/2021
(2)
|
|
|
|
|
|
|
|
|
||
|
|
56,250
|
|
18,750
|
|
|
|
5.50
|
|
10/15/2019
(3)
|
|
|
|
|
|
|
|
|
||
John Krobath
|
|
|
|
|
|
22,500
|
|
7.41
|
|
2/7/2022
(1)
|
|
4,000
(10)
|
|
50,760
|
|
|
7,500
(11)
|
|
95,175
|
|
|
|
14,000
|
|
14,000
|
|
|
|
14.57
|
|
1/30/2021
(2)
|
|
|
|
|
|
|
|
|
||
|
|
5,625
|
|
1,875
|
|
|
|
12.65
|
|
10/26/2020
(4)
|
|
|
|
|
|
|
|
|
||
|
|
18,750
|
|
6,250
|
|
|
|
5.50
|
|
10/15/2019
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
195,000
|
|
-
|
|
|
|
5.50
|
|
10/15/2019
(5)
|
|
|
|
|
|
|
|
|
||
|
|
12,000
|
|
8,000
|
|
|
|
5.50
|
|
7/15/2019
(6)
|
|
|
|
|
|
|
|
|
||
Mark Willard
|
|
|
|
|
|
22,500
|
|
7.41
|
|
2/7/2022
(1)
|
|
4,000
(10)
|
|
50,760
|
|
|
7,500
(11)
|
|
95,175
|
|
|
|
2,500
|
|
7,500
|
|
|
|
10.98
|
|
8/14/2022
(7)
|
|
|
|
|
|
|
|
|
||
|
|
15,000
|
|
15,000
|
|
|
|
14.57
|
|
1/30/2021
(2)
|
|
|
|
|
|
|
|
|
||
|
|
18,750
|
|
6,250
|
|
|
|
5.50
|
|
10/15/2019
(3)
|
|
|
|
|
|
|
|
|
||
Kim DeChello
|
|
|
|
|
|
22,500
|
|
7.41
|
|
2/7/2022
(1)
|
|
3,300
(10)
|
|
41,877
|
|
|
7,500
(11)
|
|
95,175
|
|
|
|
12,500
|
|
12,500
|
|
|
|
14.57
|
|
1/30/2021
(2)
|
|
|
|
|
|
|
|
|
||
|
|
18,750
|
|
6,250
|
|
|
|
5.50
|
|
10/15/2019
(3)
|
|
|
|
|
|
|
|
|
||
Ed Jaehne
|
|
|
|
|
|
9,000
|
|
7.41
|
|
2/7/2022
(1)
|
|
2,000
(10)
|
|
25,380
|
|
|
3,000
(11)
|
|
38,070
|
|
|
|
1,250
|
|
3,750
|
|
|
|
13.00
|
|
10/31/2022
(8)
|
|
|
|
|
|
|
|
|
||
|
|
7,500
|
|
7,500
|
|
|
|
14.57
|
|
1/30/2021
(2)
|
|
|
|
|
|
|
|
|
||
|
|
3,750
|
|
1,250
|
|
|
|
10.00
|
|
7/27/2020
(9)
|
|
|
|
|
|
|
|
|
||
|
|
18,750
|
|
6,250
|
|
|
|
5.50
|
|
10/15/2019
(3)
|
|
|
|
|
|
|
|
|
||
|
|
6,000
|
|
4,000
|
|
|
|
5.50
|
|
7/15/2019
(6)
|
|
|
|
|
|
|
|
|
|
*
|
Market value for this purpose is determined based on the number of shares outstanding multiplied by our stock price of $12.69 on December 31, 2012, less any award price per share.
|
|
|
|
Option Awards
|
|
Stock Awards
|
|||||||||
Name
|
|
Number of Shares Acquired on Exercise
(#)
|
|
Value
Realized on
Exercise
($)
|
|
Number of Shares Acquired on Vesting
(#)
|
|
Value
Realized on
Vesting
($)
(1)
|
|||||
Len Moodispaw
(2)
|
|
—
|
|
|
—
|
|
|
38,480
|
|
|
|
488,001
|
|
John Krobath
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|
|
317,250
|
|
Mark Willard
(3)
|
|
—
|
|
|
—
|
|
|
27,000
|
|
|
|
342,410
|
|
Kim DeChello
(4)
|
|
—
|
|
|
—
|
|
|
27,000
|
|
|
|
342,410
|
|
Ed Jaehne
(5)
|
|
—
|
|
|
—
|
|
|
6,500
|
|
|
|
82,470
|
|
|
(1)
|
Market value for this purpose is determined based on the number of shares vested multiplied by our stock price of $12.69 on December 31, 2012, less any award price per share.
|
(2)
|
Award price was $0.01 per share for 30,980 shares.
|
(3)
|
Award price was $0.01 per share for 22,000 shares.
|
(4)
|
Award price was $0.01 per share for 22,000 shares.
|
(5)
|
Award price was $0.01 per share for 1,500 shares.
|
1)
|
CEO - The CEO is entitled to receive a cash payment in an amount equal to three (3) times (the total of the employee's current base salary plus the greater of (the total cash bonuses paid during the last 24 months divided by two (2) or (current year's target annual incentive opportunity)). If employment is terminated within one (1) year following the change-in-control, employee will be entitled to receive compensation and severance benefits for the remainder of the guaranteed employment period or for twelve (12) months, whichever is greater. This qualifying termination is if the Company terminates the employee without cause or at-will by the employee for “good reason”. Employee will continue to have health care, dental, disability or life insurance benefits for three years following the change-of-control. Further, subject to any overriding laws, the Company shall not be required to provide health care, dental, disability or life insurance benefits otherwise receivable by employee if employee is actually covered or becomes covered by an equivalent benefit (at the same or lesser cost to employee, if any) from another source. Any such benefit made available to Employee shall be reported to the Company. Stock options will remain exercisable for a period of one (1) year following termination, and any outstanding equity awards shall vest immediately upon the change-of-control. The company will provide a gross-up payment if payments exceed the IRS “safe harbor” limit by more than 10%. To the extent payments are less than or equal to 10% of the safe harbor, then payments are reduced to the safe harbor amount to avoid any excise tax liability.
|
2)
|
NEOs, other than the CEO - The NEO is entitled to receive a cash payment in an amount equal to two (2) times the (total of the employee's current base salary plus the greater of (the total cash bonuses paid during the last 24 months divided by two (2) or (current year's target annual incentive opportunity)). If employment is terminated within one (1) year following the change-in-control, employee will be entitled to receive compensation and severance benefits for the remainder of the guaranteed period or for twelve (12) months, whichever is greater. This qualifying termination is if the Company terminates the employee without cause or at-will by the employee for “good reason”. Employee will continue to have health care, dental, disability or life insurance benefits for three years following the change-of-control. Further, subject to any overriding laws, the Company shall not be required to provide health care, dental, disability or life insurance benefits otherwise receivable by employee if employee is actually covered or becomes covered by an equivalent benefit (at the same or lesser cost to employee, if any) from another source. Any such benefit made available to employee shall be reported to the Company. Stock options will remain exercisable for a period of one (1) year following termination, and any outstanding equity awards shall vest immediately upon the change-of-control. The company will provide a gross-up payment if payments exceed the IRS “safe harbor” limit by more than 10%. To the extent payments are less than or equal to 10% of the safe harbor, then payments are reduced to the safe harbor amount to avoid any excise tax liability.
|
|
|
TERMINATION WITHOUT CAUSE
|
|
CHANGE-OF-CONTROL
|
|||||||||||||||||
|
|
Severance
Pay
($)(1)
|
|
Welfare
Benefits
Continuation ($)(1)
|
|
Total
($)
|
|
Cash
Payment ($)(2)
|
|
Accelerated
Vesting of
Stock
Options
($)(3)(4)
|
|
Accelerated
Vesting of
Restricted
Stock
($)(3)(4)
|
|
Total
($)
|
|||||||
Len Moodispaw
|
|
633,273
|
|
|
16,817
|
|
|
650,090
|
|
|
2,900,665
|
|
|
255,862
|
|
|
272,835
|
|
|
3,429,362
|
|
John Krobath
|
|
354,166
|
|
|
16,333
|
|
|
370,499
|
|
|
935,043
|
|
|
221,333
|
|
|
145,935
|
|
|
1,302,311
|
|
Mark Willard
|
|
410,681
|
|
|
16,234
|
|
|
426,915
|
|
|
1,100,028
|
|
|
176,563
|
|
|
145,935
|
|
|
1,422,526
|
|
Kim DeChello
|
|
316,650
|
|
|
7,158
|
|
|
323,808
|
|
|
837,614
|
|
|
163,738
|
|
|
137,052
|
|
|
1,138,404
|
|
|
(1)
|
See “Executive Compensation — Employment Agreements” above for a description of the severance payment and benefits continuation that would be payable to the NEO upon termination without cause.
|
(2)
|
See “Executive Compensation — Employment Agreements” above for a description of the calculation of the cash payment owed to an NEO upon a change of control.
|
(3)
|
Assumes full vesting of stock options and restricted stock awards in connection with a change of control. See “Executive Compensation — Equity Incentive Plan” below for a description of the potential acceleration of stock options and restricted stock awards in connection with a change of control.
|
(4)
|
Calculated based on our common stock share price of $12.69 as of December 31, 2012.
|
(iv)
|
establish the terms and conditions of each Award (including, but not limited to, the Option Price of any Option, the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or the shares of Stock subject thereto, and any terms or conditions that may be necessary to qualify Options as Incentive Stock Options);
|
(vi)
|
amend, modify, or supplement the terms of any outstanding Award.
|
•
|
Annual retainer of $30,000 for board service;
|
•
|
Audit committee chairperson retainer of $10,000;
|
•
|
Compensation committee chairperson retainer of $5,000;
|
•
|
Ethics committee chairperson retainer of $5,000; and
|
•
|
Nominating and corporate governance committee chairperson retainer of $5,000.
|
Director Name
|
|
Fees Earned or
Paid in Cash ($)
|
|
Stock Awards ($)
(2)
|
|
Option
Awards ($)
(2)
|
|
Total ($)
|
||||
Bill Campbell
|
|
30,000
|
|
|
27,450
|
|
|
7,504
|
|
|
64,954
|
|
Pierre Chao
|
|
30,000
|
|
|
27,450
|
|
|
67,539
|
|
|
124,989
|
|
John Hannon
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Ken Minihan
|
|
30,000
|
|
|
27,450
|
|
|
7,504
|
|
|
64,954
|
|
Art Money
(1)
|
|
46,000
|
|
|
27,450
|
|
|
7,504
|
|
|
80,954
|
|
Caroline Pisano
|
|
40,000
|
|
|
—
|
|
|
—
|
|
|
40,000
|
|
Director Name
|
|
Stock Options Outstanding
|
|
Unvested Restricted Stock Awards
|
|
||
Bill Campbell
|
|
22,500
|
|
|
2,500
|
|
|
Pierre Chao
|
|
22,500
|
|
|
2,500
|
|
|
John Hannon
|
|
—
|
|
|
—
|
|
|
Ken Minihan
|
|
32,500
|
|
|
2,500
|
|
|
Art Money
|
|
32,500
|
|
|
2,500
|
|
|
Caroline Pisano
|
|
—
|
|
|
—
|
|
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Name and Address of Beneficial Owner*
|
|
Amount and Nature of
Beneficial Ownership
|
|
Percent of Class(1)
|
||
5% Owners
|
|
|
|
|
|
|
AllianceBernstein LP
(2)
|
|
2,610,045
|
|
|
7.1
|
%
|
Baron Capital Group, Inc. and related parties
(3)
|
|
3,000,000
|
|
|
8.2
|
%
|
BlackRock, Inc.
(4)
|
|
2,251,300
|
|
|
6.2
|
%
|
Capital Research Global Investors
(5)
|
|
2,390,000
|
|
|
6.5
|
%
|
FMR, LLC
(6)
|
|
1,895,700
|
|
|
5.2
|
%
|
GEF Capital Company, LLC and related parties
(7)
|
|
2,488,638
|
|
|
6.7
|
%
|
The Hannon Family LLC and related parties
(8)
|
|
2,250,000
|
|
|
6.0
|
%
|
Pioneer Global Asset Management S.p.A. and related parties
(9)
|
|
1,817,593
|
|
|
5.0
|
%
|
Pioneer Investment Management, Inc. and related parties
(10)
|
|
1,817,593
|
|
|
5.0
|
%
|
Vedanta Opportunities Fund, L.P. and related parties
(11)
|
|
1,969,092
|
|
|
5.3
|
%
|
Executive Officers and Directors
|
|
|
|
|
||
Len Moodispaw
(12)
|
|
1,356,500
|
|
|
3.7
|
%
|
John Krobath
(13)
|
|
372,203
|
|
|
1.0
|
%
|
Mark Willard
(14)
|
|
223,000
|
|
|
**
|
|
Kim DeChello
(15)
|
|
219,240
|
|
|
**
|
|
Ed Jaehne
(16)
|
|
67,015
|
|
|
**
|
|
Bill Campbell
(17)
|
|
43,762
|
|
|
**
|
|
Pierre Chao
(18)
|
|
15,875
|
|
|
**
|
|
John Hannon
(19)
|
|
492,640
|
|
|
1.4
|
%
|
Ken Minihan
(20)
|
|
34,625
|
|
|
**
|
|
Art Money
(21)
|
|
39,368
|
|
|
**
|
|
Caroline Pisano
(22)
|
|
1,275,480
|
|
|
3.5
|
%
|
All Directors and Executive Officers as a Group (11 persons)
(23)
|
|
4,139,708
|
|
|
10.8
|
%
|
|
*
|
The address of all directors and executive officers is c/o The KEYW Holding Corporation, 7740 Milestone Parkway, Suite 400, Hanover, MD 21076.
|
**
|
Less than 1%.
|
(1)
|
The percentages are calculated on the basis of 36,524,369 shares outstanding as of February 25, 2013 plus, for each person listed, securities deemed outstanding pursuant to Rule 13d-3(d)(1) under the Exchange Act. All restricted stock regardless of vesting status is included since these shares have voting rights.
|
(2)
|
Based on a Schedule 13G/A filed with the SEC on February 12, 2013 by AllianceBernstein LP. Principal Business Office address is 1345 Avenue of the Americas, New York, NY 10105.
|
(3)
|
Based on a Schedule 13G/A filed with the SEC on February 14, 2013 by Baron Capital Group, Inc., BAMCO, Inc., Baron Small Cap Fund and Ronald Baron. Principal Business Office address is 767 Fifth Avenue, 49
th
Floor, New York, NY 10153.
|
(4)
|
Based on a Schedule 13G filed with the SEC on January 30, 2013 by BlackRock, Inc. Principal Business Office address is 40 East 52nd Street, New York, NY 10022.
|
(5)
|
Based on a Schedule 13G filed with the SEC on February 13, 2013 by Capital Research Global Investors. Principal Business Office address is 333 South Hope Street, Los Angeles, CA 90071.
|
(6)
|
Based on a Schedule 13G filed with the SEC on February 14, 2013 by FMR, LLC, Fidelity Management and Research Company and Edward C. Johnson, III. Principal Business Office address is 82 Devonshire Street, Boston, MA 02109.
|
(7)
|
Based on a Schedule 13G filed with the SEC on February 14, 2011 by GEF Capital Company Holdings, LLC, GEF Management Corporation and Global Environment Capital Company, LLC. Principal Business Office address is c/o Global Environment Fund, 5471 Wisconsin Avenue, Suite 300, Chevy Chase, MD 20815.
|
(8)
|
Based on a Schedule 13G/A filed with the SEC on February 13, 2013, by The Hannon Family LLC, Glenn A. Hannon, Natalie R. Hannon Kizer and Nichole Potee. Principal Business Office address is 4416 East West Highway, Bethesda, MD 20814.
|
(9)
|
Based on a Schedule 13G/A filed with the SEC on February 14, 2013 by Pioneer Global Asset Management S.p.A. (PGAM). Principal Business Office address is Galleria San Carlo 6, Milan, Italy. According to such Schedule 13G, PGAM is a holding company incorporating all of the Pioneer Investments asset management business (including Pioneer Investment Management, Inc.(PIM) and additional PGAM subsidiaries) and may therefore be deemed to beneficially own the shares indicated. According to the Schedule 13G, the indicated shares are owned by (i) collective investment vehicles (funds) advised by PIM and (ii) funds advised by other advisors that are direct or indirect wholly-owned subsidiaries of PGAM. In their roles as investment manager or advisor to such funds, PIM and such additional PGAM subsidiaries possess investment and/or voting control over the indicated shares. Oak Ridge Investments, LLC, as sub-advisor to PIM, has shared power to dispose or to direct the disposition of 1,817,593 of such shares.
|
(10)
|
Based on a Schedule 13G/A filed with the SEC on February 14, 2013 by Pioneer Investment Management, Inc. (PIM). Principal Business Office address is 60 State Street, Boston, MD 02109. According to such Schedule 13G, PIM is a direct subsidiary of PGAM. PGAM is a holding company incorporating all of the Pioneer Investments asset management business (including PIM and additional PGAM subsidiaries). According to the Schedule 13G, the indicated shares are owned by (i) collective investment vehicles (funds) advised by PIM and (ii) funds advised by other advisors that are direct or indirect wholly-owned subsidiaries of PGAM. In their roles as investment manager or advisor to such funds, PIM and such additional PGAM subsidiaries possess investment and/or voting control over the indicated shares. Oak Ridge Investments, LLC, as sub-advisor to PIM, has shared power to dispose or to direct the disposition of 1,817,593 of such shares.
|
(11)
|
Based on a Schedule 13G filed with the SEC on January 18, 2011 by Vedanta Opportunities Fund, L.P., Vedanta Associates, L.P., Vedanta Partners, LLC, Alessandro Piol and Parag Saxena. Principal Business Office address is 540 Madison Avenue, 38
th
Floor, New York, NY 10022.
|
(12)
|
Of the shares shown as beneficially owned, 530,114 are owned directly by Mr. Moodispaw, 30,000 are held jointly with his spouse, 46,500 are unvested restricted stock, 20,000 represent presently exercisable rights to acquire common stock through warrants, and 141,000 represent presently exercisable rights to acquire common stock through stock options. Shares deemed to be beneficially owned by Mr. Moodispaw include 273,386 shares of common stock and presently exercisable rights to acquire 315,500 shares of common stock through warrants held by The Leonard E. Moodispaw 2009 Grantor Retained Annuity Trust . Mr. Moodispaw has voting and dispositive power over the shares beneficially owned by the trust. Mr. Moodispaw disclaims beneficial ownership of the shares held by the trust except to the extent of his pecuniary interest therein.
|
(13)
|
Of the shares shown as beneficially owned, 78,828 are owned directly by Mr. Krobath, 24,000 are unvested restricted stock, 5,750 represent presently exercisable rights to acquire common stock through warrants, and 263,625 represent presently exercisable rights to acquire common stock through stock options.
|
(14)
|
Of the shares shown as beneficially owned, 124,000 are owned directly by Mr. Willard, 44,000 are unvested restricted stock, and 55,000 represent presently exercisable rights to acquire common stock through stock options.
|
(15)
|
Of the shares shown as beneficially owned, 127,190 are owned directly by Ms. DeChello, 43,300 are unvested restricted stock, and 48,750 represent presently exercisable rights to acquire common stock through stock options.
|
(16)
|
Of the shares shown as beneficially owned 13,515 are owned directly by Mr. Jaehne, 8,000 are unvested restricted stock, and 45,500 represent presently exercisable rights to acquire common stock through stock options.
|
(17)
|
Of the shares shown as beneficially owned, 20,387 are owned directly by Mr. Campbell, 5,500 are unvested restricted stock, 2,875 represent presently exercisable rights to acquire common stock through stock options and 15,000 represent presently exercisable rights to acquire common stock through stock options under his consulting firm Sanoch Management LLC.
|
(18)
|
Of the shares shown as beneficially owned, 2,500 are owned directly by Mr. Chao, 5,500 are unvested restricted stock and 7,875 represent presently exercisable rights to acquire common stock through stock options.
|
(19)
|
Of the shares shown as beneficially owned, 35,330 are owned directly by Mr. Hannon. Shares deemed to be beneficially owned by Mr. Hannon include 126,500 shares of common stock owned by The John G. Hannon Revocable Trust U/A DTD 03/09/04 and presently exercisable rights to acquire 272,728 shares of common stock through warrants held by such trust. Mr. Hannon has voting and dispositive power over the shares owned by the above entities. Mr. Hannon disclaims beneficial ownership of the shares except to the extent of his pecuniary interest therein. Also deemed as beneficially owned by Mr. Hannon include 46,082 shares of common stock owned by a daughter who resides in his household and presently exercisable rights to acquire 12,000 shares of common stock through warrants. Mr. Hannon disclaims beneficial ownership of these securities.
|
(20)
|
Of the shares shown as beneficially owned 3,500 are owned directly by Mr. Minihan, 5,500 are unvested restricted stock, and 25,625 represent presently exercisable rights to acquire common stock through stock options.
|
(21)
|
Of the shares shown as beneficially owned 6,662 are owned directly by Mr. Money, 5,500 are unvested restricted stock, 1,581 represent presently exercisable rights to acquire common stock through warrants, and 25,625 represent presently exercisable rights to acquire common stock through stock options.
|
(22)
|
Shares deemed to be beneficially owned by Caroline S. Pisano include: (i) shares held by Ms. Pisano herself, who beneficially owns 841,820 shares of common stock, 3,000 are unvested restricted stock, 2,250 represent presently exercisable rights to acquire common stock through stock options, and presently exercisable rights to acquire 20,000 shares of common stock through warrants; (ii) presently exercisable rights to purchase 403,410 shares of common stock through warrants held by The Caroline S. Pisano 2009 Irrevocable Trust and (iii) 5,000 shares owned by her mother who resides in her household. Ms. Pisano has voting and dispositive power over the shares beneficially owned by the trust. Ms. Pisano disclaims beneficial ownership of the shares held by the trust except to the extent of her pecuniary interest therein and disclaims beneficial ownership of the securities held by her mother.
|
(23)
|
Of the shares shown as beneficially owned, 633,125 represent presently exercisable rights to acquire Common Stock through stock options and 1,050,969 represent presently exercisable rights to acquire common stock through warrants.
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Fee Category
|
|
2012
|
|
2011
|
||||
(In thousands)
|
|
|
|
|
||||
Audit Fees
|
|
$
|
398,316
|
|
|
$
|
462,684
|
|
Audit-Related Fees
|
|
113,690
|
|
|
33,600
|
|
||
Tax Fees
|
|
10,889
|
|
|
—
|
|
||
All Other Fees
|
|
6,376
|
|
|
61,710
|
|
||
Total Fees
|
|
$
|
529,271
|
|
|
$
|
557,994
|
|
(a)
|
(1) Consolidated Financial Statements
|
(2)
|
Financial Statement Schedules — All financial statement schedules required by Item 8 and Item 15 of Form 10-K have been omitted because the information requested is not required, not applicable, or is shown in the Consolidated Financial Statements or Notes thereto.
|
(3)
|
Exhibits — See Exhibit Index, which is incorporated in this item by reference.
|
(b)
|
Exhibits — See Exhibit Index, which is incorporated in this item by reference.
|
(c)
|
Financial Statement Schedules — Included in Item 15(a)(2) above.
|
THE KEYW HOLDING CORPORATION
(Registrant)
|
|
By:
|
/s/ Leonard E. Moodispaw
|
|
Leonard E. Moodispaw
President and Chief Executive Officer;
Principal Executive Officer
|
|
March 12, 2013
|
|
|
By:
|
/s/ John E. Krobath
|
|
John E. Krobath
Executive Vice President and Chief Financial Officer;
Principal Financial and Accounting Officer
|
|
March 12, 2013
|
/s/ William I. Campbell
|
|
/s/ Arthur L. Money
|
William I. Campbell, Director
|
|
Arthur L Money, Director
|
March 12, 2013
|
|
March 12, 2013
|
|
|
|
/s/ Pierre A. Chao
|
|
/s/ Leonard E. Moodispaw
|
Pierre Chao, Director
|
|
Leonard E. Moodispaw, Director
|
March 12, 2013
|
|
March 12, 2013
|
|
|
|
/s/ John G. Hannon
|
|
/s/ Caroline S. Pisano
|
John G. Hannon, Director
|
|
Caroline S. Pisano, Director
|
March 12, 2013
|
|
March 12, 2013
|
|
|
|
/s/ Kenneth A. Minihan
|
|
|
Kenneth A. Minihan, Director
|
|
|
March 12, 2013
|
|
|
|
December 31,
2012
|
|
|
December 31,
2011
|
|
||
ASSETS
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
5,639
|
|
|
$
|
1,294
|
|
Receivables
|
58,482
|
|
|
40,630
|
|
||
Inventories, net
|
8,739
|
|
|
7,242
|
|
||
Prepaid expenses
|
1,880
|
|
|
2,511
|
|
||
Income tax receivable
|
96
|
|
|
27
|
|
||
Deferred tax assets, current
|
3,149
|
|
|
1,193
|
|
||
Total current assets
|
77,985
|
|
|
52,897
|
|
||
Property and equipment, net
|
23,860
|
|
|
8,707
|
|
||
Goodwill
|
290,861
|
|
|
164,466
|
|
||
Other intangibles, net
|
53,799
|
|
|
39,002
|
|
||
Deferred tax assets
|
13,608
|
|
|
2,348
|
|
||
Other assets
|
2,562
|
|
|
211
|
|
||
TOTAL ASSETS
|
$
|
462,675
|
|
|
$
|
267,631
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable
|
$
|
7,254
|
|
|
$
|
4,136
|
|
Accrued expenses
|
8,393
|
|
|
4,370
|
|
||
Accrued salaries & wages
|
17,770
|
|
|
9,644
|
|
||
Revolver
|
21,000
|
|
|
49,500
|
|
||
Term note – current portion
|
5,688
|
|
|
—
|
|
||
Deferred income taxes
|
1,429
|
|
|
1,591
|
|
||
Total current liabilities
|
61,534
|
|
|
69,241
|
|
||
Long-term liabilities:
|
|
|
|
|
|
||
Term note – non-current portion
|
63,000
|
|
|
—
|
|
||
Non-current deferred tax liabilities
|
29,700
|
|
|
17,430
|
|
||
Other non-current liabilities
|
7,413
|
|
|
301
|
|
||
TOTAL LIABILITIES
|
161,647
|
|
|
86,972
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Preferred stock, $0.001 par value; 5 million shares authorized, none issued
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; 100 million shares authorized, 36,135,542 and 25,770,795 shares issued and outstanding
|
36
|
|
|
26
|
|
||
Additional paid-in capital
|
292,715
|
|
|
173,371
|
|
||
Retained earnings
|
8,277
|
|
|
7,262
|
|
||
Total stockholders’ equity
|
301,028
|
|
|
180,659
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
462,675
|
|
|
$
|
267,631
|
|
|
Year ended
December 31, 2012
|
|
Year ended
December 31, 2011
|
|
Year ended
December 31, 2010
|
||||||
Revenues
|
|
|
|
|
|
|
|
|
|||
Services
|
$
|
171,776
|
|
|
$
|
159,748
|
|
|
$
|
95,665
|
|
Integrated Solutions
|
71,744
|
|
|
30,839
|
|
|
12,323
|
|
|||
Total
|
243,520
|
|
|
190,587
|
|
|
107,988
|
|
|||
Costs of Revenues, excluding amortization
|
|
|
|
|
|
|
|
|
|||
Services
|
125,362
|
|
|
115,343
|
|
|
69,312
|
|
|||
Integrated Solutions
|
34,365
|
|
|
18,607
|
|
|
7,132
|
|
|||
Total
|
159,727
|
|
|
133,950
|
|
|
76,444
|
|
|||
Gross Profit
|
|
|
|
|
|
|
|
|
|||
Services
|
46,414
|
|
|
44,405
|
|
|
26,353
|
|
|||
Integrated Solutions
|
37,379
|
|
|
12,232
|
|
|
5,191
|
|
|||
Total
|
83,793
|
|
|
56,637
|
|
|
31,544
|
|
|||
Operating Expenses
|
|
|
|
|
|
|
|
|
|||
Operating expenses
|
59,189
|
|
|
41,399
|
|
|
27,264
|
|
|||
Intangible amortization expense
|
21,411
|
|
|
13,410
|
|
|
6,440
|
|
|||
Total
|
80,600
|
|
|
54,809
|
|
|
33,704
|
|
|||
Operating Income (Loss)
|
3,193
|
|
|
1,828
|
|
|
(2,160
|
)
|
|||
Non-Operating Expense (Income), net
|
2,264
|
|
|
1,075
|
|
|
(20,880
|
)
|
|||
Income before Income Taxes
|
929
|
|
|
753
|
|
|
18,720
|
|
|||
Income Tax (Benefit) Expense, net
|
(86
|
)
|
|
218
|
|
|
7,814
|
|
|||
Net Income
|
$
|
1,015
|
|
|
$
|
535
|
|
|
$
|
10,906
|
|
Weighted Average Common Shares Outstanding
|
|
|
|
|
|
|
|
|
|||
Basic
|
28,239,945
|
|
|
25,991,914
|
|
|
17,581,887
|
|
|||
Diluted
|
31,152,924
|
|
|
28,903,869
|
|
|
21,275,487
|
|
|||
Earnings per Share
|
|
|
|
|
|
|
|
|
|||
Basic
|
$
|
0.04
|
|
|
$
|
0.02
|
|
|
$
|
0.62
|
|
Diluted
|
$
|
0.03
|
|
|
$
|
0.02
|
|
|
$
|
0.51
|
|
|
Common Stock
|
|
Additional
Paid-In
Capital
(APIC)
|
|
(Accumulated
Deficit)
Retained
Earnings
|
|
Total
Shareholders’
Equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||
BALANCE, JANUARY 1, 2010
|
14,187,520
|
|
|
$
|
14
|
|
|
$
|
66,504
|
|
|
$
|
(4,179
|
)
|
|
$
|
62,339
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
10,906
|
|
|
10,906
|
|
||||
Warrant exercise
|
1,152,791
|
|
|
1
|
|
|
4,975
|
|
|
—
|
|
|
4,976
|
|
||||
Option exercise
|
11,878
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
||||
Restricted stock forfeitures
|
(800
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Warrants issued in conjunction with sub-debt
|
—
|
|
|
—
|
|
|
585
|
|
|
—
|
|
|
585
|
|
||||
Stock issued in initial public offering, net of expenses
|
9,639,090
|
|
|
10
|
|
|
88,813
|
|
|
—
|
|
|
88,823
|
|
||||
Stock issued as part of acquisitions
|
486,554
|
|
|
1
|
|
|
5,471
|
|
|
—
|
|
|
5,472
|
|
||||
Stock based compensation
|
77,500
|
|
|
—
|
|
|
1,920
|
|
|
—
|
|
|
1,920
|
|
||||
BALANCE, DECEMBER 31, 2010
|
25,554,533
|
|
|
$
|
26
|
|
|
$
|
168,358
|
|
|
$
|
6,727
|
|
|
$
|
175,111
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
535
|
|
|
535
|
|
||||
Warrant exercise
|
78,455
|
|
|
—
|
|
|
422
|
|
|
—
|
|
|
422
|
|
||||
Option exercise
|
50,296
|
|
|
—
|
|
|
434
|
|
|
—
|
|
|
434
|
|
||||
Restricted stock issuances
|
152,800
|
|
|
—
|
|
|
569
|
|
|
—
|
|
|
569
|
|
||||
Restricted stock forfeitures
|
(12,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Stock issued as part of acquisitions
|
372,613
|
|
|
—
|
|
|
4,407
|
|
|
—
|
|
|
4,407
|
|
||||
Stock based compensation
|
—
|
|
|
—
|
|
|
2,260
|
|
|
—
|
|
|
2,260
|
|
||||
Stock repurchase
|
(425,902
|
)
|
|
—
|
|
|
(3,079
|
)
|
|
—
|
|
|
(3,079
|
)
|
||||
BALANCE, DECEMBER 31, 2011
|
25,770,795
|
|
|
$
|
26
|
|
|
$
|
173,371
|
|
|
$
|
7,262
|
|
|
$
|
180,659
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
1,015
|
|
|
1,015
|
|
||||
Warrant Exercise
|
74,669
|
|
|
—
|
|
|
90
|
|
|
—
|
|
|
90
|
|
||||
Option exercise
|
81,674
|
|
|
—
|
|
|
648
|
|
|
—
|
|
|
648
|
|
||||
Stock issued in secondary offering, net of expenses
|
8,510,000
|
|
|
8
|
|
|
94,443
|
|
|
—
|
|
|
94,451
|
|
||||
Restricted stock issuances
|
314,700
|
|
|
—
|
|
|
1,021
|
|
|
—
|
|
|
1,021
|
|
||||
Restricted stock forfeitures
|
(44,400
|
)
|
|
—
|
|
|
(82
|
)
|
|
—
|
|
|
(82
|
)
|
||||
Equity issued as part of acquisitions
|
1,824,295
|
|
|
2
|
|
|
24,087
|
|
|
—
|
|
|
24,089
|
|
||||
Stock based compensation
|
—
|
|
|
—
|
|
|
2,085
|
|
|
—
|
|
|
2,085
|
|
||||
Stock repurchase
|
(396,191
|
)
|
|
—
|
|
|
(2,948
|
)
|
|
—
|
|
|
(2,948
|
)
|
||||
BALANCE, DECEMBER 31, 2012
|
36,135,542
|
|
|
$
|
36
|
|
|
$
|
292,715
|
|
|
$
|
8,277
|
|
|
$
|
301,028
|
|
|
Year ended
December 31,
2012
|
|
Year ended
December 31,
2011
|
|
Year ended
December 31,
2010
|
||||||
Net income
|
$
|
1,015
|
|
|
$
|
535
|
|
|
$
|
10,906
|
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Stock compensation
|
3,024
|
|
|
2,829
|
|
|
1,920
|
|
|||
Depreciation/Amortization
|
25,780
|
|
|
15,492
|
|
|
7,200
|
|
|||
Loss on disposal of equipment
|
87
|
|
|
—
|
|
|
10
|
|
|||
Non-cash interest expense
|
—
|
|
|
—
|
|
|
585
|
|
|||
Non-cash impact of TAGG earn-out reduction
|
—
|
|
|
—
|
|
|
(21,950
|
)
|
|||
Windfall tax benefit from option exercise
|
(140
|
)
|
|
(144
|
)
|
|
—
|
|
|||
Deferred taxes
|
(1,864
|
)
|
|
(2,036
|
)
|
|
7,668
|
|
|||
Changes in balance sheet items:
|
|
|
|
|
|
|
|
|
|||
Receivables
|
(8,546
|
)
|
|
(1,784
|
)
|
|
(7,294
|
)
|
|||
Inventory
|
(1,313
|
)
|
|
(1,903
|
)
|
|
(848
|
)
|
|||
Prepaid expenses
|
910
|
|
|
1,288
|
|
|
(911
|
)
|
|||
Income tax receivable
|
(69
|
)
|
|
251
|
|
|
—
|
|
|||
Accounts payable
|
(298
|
)
|
|
(2,694
|
)
|
|
(419
|
)
|
|||
Accrued expenses
|
(2,429
|
)
|
|
(1,554
|
)
|
|
1,708
|
|
|||
Other balance sheet changes
|
(2,128
|
)
|
|
23
|
|
|
(213
|
)
|
|||
Net cash provided by (used in) operating activities
|
14,029
|
|
|
10,303
|
|
|
(1,638
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|||
Acquisitions, net of cash acquired
|
(131,392
|
)
|
|
(58,573
|
)
|
|
(92,008
|
)
|
|||
Purchase of property and equipment
|
(10,721
|
)
|
|
(3,508
|
)
|
|
(1,909
|
)
|
|||
Proceeds from sale of equipment
|
—
|
|
|
—
|
|
|
128
|
|
|||
Net cash used in investing activities
|
(142,113
|
)
|
|
(62,081
|
)
|
|
(93,789
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|||
Proceeds from stock issuances
|
94,451
|
|
|
—
|
|
|
88,823
|
|
|||
Proceeds from term note
|
70,000
|
|
|
—
|
|
|
5,000
|
|
|||
Proceeds from revolver
|
51,500
|
|
|
79,500
|
|
|
19,600
|
|
|||
Proceeds from subordinated debt
|
—
|
|
|
—
|
|
|
8,250
|
|
|||
Repayment of debt
|
(81,312
|
)
|
|
(30,000
|
)
|
|
(32,850
|
)
|
|||
Repurchase of stock
|
(2,948
|
)
|
|
(3,079
|
)
|
|
—
|
|
|||
Windfall tax benefit from option exercise
|
140
|
|
|
144
|
|
|
—
|
|
|||
Proceeds from option and warrant exercises
|
598
|
|
|
712
|
|
|
5,066
|
|
|||
Net cash provided by financing activities
|
132,429
|
|
|
47,277
|
|
|
93,889
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
4,345
|
|
|
(4,501
|
)
|
|
(1,538
|
)
|
|||
Cash and cash equivalents at beginning of period
|
1,294
|
|
|
5,795
|
|
|
7,333
|
|
|||
Cash and cash equivalents at end of period
|
$
|
5,639
|
|
|
$
|
1,294
|
|
|
$
|
5,795
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Cash paid for interest
|
$
|
2,059
|
|
|
$
|
680
|
|
|
$
|
1,076
|
|
Cash paid for taxes
|
$
|
5,797
|
|
|
$
|
228
|
|
|
$
|
—
|
|
Equity issued for acquisitions
|
$
|
24,089
|
|
|
$
|
4,407
|
|
|
$
|
6,057
|
|
Non-cash fixed asset additions
|
$
|
7,950
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31,
2012
|
|
|
December 31,
2011
|
|
|
December 31,
2010
|
|
|||
Net income
|
$
|
1,015
|
|
|
$
|
535
|
|
|
$
|
10,906
|
|
Weighted average shares – basic
|
28,240
|
|
|
25,992
|
|
|
17,582
|
|
|||
Effect of dilutive potential common shares
|
2,913
|
|
|
2,912
|
|
|
3,693
|
|
|||
Weighted average shares – diluted
|
31,153
|
|
|
28,904
|
|
|
21,275
|
|
|||
Net income per share – basic
|
$
|
0.04
|
|
|
$
|
0.02
|
|
|
$
|
0.62
|
|
Net income per share – diluted
|
$
|
0.03
|
|
|
$
|
0.02
|
|
|
$
|
0.51
|
|
Anti-dilutive share-based awards, excluded
|
796
|
|
|
768
|
|
|
—
|
|
|||
Outstanding options and warrants, total
|
7,825
|
|
|
6,828
|
|
|
6,401
|
|
|
JKA
|
|
FASI
|
|
FLD
|
|
TI
|
|
Poole
|
|
Sensage
|
|
Rsigna/Dilijent
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash
|
$
|
8
|
|
|
$
|
452
|
|
|
$
|
4,614
|
|
|
$
|
—
|
|
|
$
|
4,412
|
|
|
$
|
1,948
|
|
|
$
|
(6
|
)
|
Current assets, net of cash acquired
|
2,934
|
|
|
2,413
|
|
|
5,126
|
|
|
—
|
|
|
7,278
|
|
|
8,995
|
|
|
801
|
|
|||||||
Fixed assets
|
87
|
|
|
14
|
|
|
3,875
|
|
|
—
|
|
|
755
|
|
|
61
|
|
|
123
|
|
|||||||
Intangibles
|
2,680
|
|
|
2,775
|
|
|
21,741
|
|
|
2,500
|
|
|
21,709
|
|
|
8,498
|
|
|
6,001
|
|
|||||||
Goodwill
|
9,097
|
|
|
14,155
|
|
|
10,607
|
|
|
1,500
|
|
|
110,928
|
|
|
9,630
|
|
|
5,837
|
|
|||||||
Other assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
54
|
|
|
—
|
|
|||||||
Total Assets Acquired
|
14,806
|
|
|
19,809
|
|
|
45,963
|
|
|
4,000
|
|
|
145,111
|
|
|
29,186
|
|
|
12,756
|
|
|||||||
Current liabilities
|
1,079
|
|
|
2,661
|
|
|
944
|
|
|
2,000
|
|
|
8,045
|
|
|
6,700
|
|
|
1,333
|
|
|||||||
Long-term obligations
|
—
|
|
|
—
|
|
|
9,787
|
|
|
—
|
|
|
9,140
|
|
|
—
|
|
|
—
|
|
|||||||
Total Liabilities Assumed
|
1,079
|
|
|
2,661
|
|
|
10,731
|
|
|
2,000
|
|
|
17,185
|
|
|
6,700
|
|
|
1,333
|
|
|||||||
Net Assets Acquired
|
$
|
13,727
|
|
|
$
|
17,148
|
|
|
$
|
35,232
|
|
|
$
|
2,000
|
|
|
$
|
127,926
|
|
|
$
|
22,486
|
|
|
$
|
11,423
|
|
Net Cash Paid
|
$
|
11,255
|
|
|
$
|
14,753
|
|
|
$
|
30,618
|
|
|
$
|
2,000
|
|
|
$
|
113,545
|
|
|
$
|
11,246
|
|
|
$
|
6,601
|
|
Equity Issued
|
2,464
|
|
|
1,943
|
|
|
—
|
|
|
—
|
|
|
9,969
|
|
|
9,292
|
|
|
4,828
|
|
|||||||
Actual Cash Paid
|
$
|
11,263
|
|
|
$
|
15,205
|
|
|
$
|
35,232
|
|
|
$
|
2,000
|
|
|
$
|
117,957
|
|
|
$
|
13,194
|
|
|
$
|
6,595
|
|
|
For the Year Ended December 31, 2011 (In thousands)
|
||||||||||||||||||||||||||
|
JKA
|
|
FASI
|
|
FLD
|
|
KEYW
|
|
Poole
(1)
|
|
Sensage
|
|
Total
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Revenue
|
$
|
3,381
|
|
|
$
|
3,903
|
|
|
$
|
17,282
|
|
|
$
|
190,587
|
|
|
$
|
40,587
|
|
|
$
|
11,858
|
|
|
$
|
267,598
|
|
Cost of Revenues
|
1,659
|
|
|
2,258
|
|
|
8,317
|
|
|
133,950
|
|
|
29,337
|
|
|
2,490
|
|
|
178,011
|
|
|||||||
Gross Profit
|
1,722
|
|
|
1,645
|
|
|
8,965
|
|
|
56,637
|
|
|
11,250
|
|
|
9,368
|
|
|
89,587
|
|
|||||||
Operating Expenses
|
1,844
|
|
|
3,611
|
|
|
3,124
|
|
|
54,809
|
|
|
9,064
|
|
|
9,639
|
|
|
82,091
|
|
|||||||
Operating (Loss) Income
|
(122
|
)
|
|
(1,966
|
)
|
|
5,841
|
|
|
1,828
|
|
|
2,186
|
|
|
(271
|
)
|
|
7,496
|
|
|||||||
Non-operating (Income) Expense
|
(2
|
)
|
|
39
|
|
|
214
|
|
|
1,075
|
|
|
—
|
|
|
419
|
|
|
1,745
|
|
|||||||
(Loss) Income before Taxes
|
(120
|
)
|
|
(2,005
|
)
|
|
5,627
|
|
|
753
|
|
|
2,186
|
|
|
(690
|
)
|
|
5,751
|
|
|||||||
Tax Expense
|
—
|
|
|
—
|
|
|
2,257
|
|
|
218
|
|
|
866
|
|
|
2
|
|
|
3,343
|
|
|||||||
Net (Loss) Income
|
$
|
(120
|
)
|
|
$
|
(2,005
|
)
|
|
$
|
3,370
|
|
|
$
|
535
|
|
|
$
|
1,320
|
|
|
$
|
(692
|
)
|
|
$
|
2,408
|
|
|
(1)
|
Poole's financials are for the year ended March 31, 2012.
|
|
For the Year Ended December 31, 2012 (In thousands)
|
||||||||||||||
|
Poole
|
|
Sensage
|
|
KEYW
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
42,321
|
|
|
$
|
6,820
|
|
|
$
|
243,520
|
|
|
$
|
292,661
|
|
Cost of Revenues
|
32,173
|
|
|
2,281
|
|
|
159,727
|
|
|
194,181
|
|
||||
Gross Profit
|
10,148
|
|
|
4,539
|
|
|
83,793
|
|
|
98,480
|
|
||||
Operating Expenses
|
7,387
|
|
|
7,654
|
|
|
80,600
|
|
|
95,641
|
|
||||
Operating Income (Loss)
|
2,761
|
|
|
(3,115
|
)
|
|
3,193
|
|
|
2,839
|
|
||||
Non-operating Expense
|
2
|
|
|
357
|
|
|
2,264
|
|
|
2,623
|
|
||||
Income (Loss) before Taxes
|
2,759
|
|
|
(3,472
|
)
|
|
929
|
|
|
216
|
|
||||
Tax Expense (Benefit)
|
1,425
|
|
|
—
|
|
|
(86
|
)
|
|
1,339
|
|
||||
Net Income (Loss)
|
$
|
1,334
|
|
|
$
|
(3,472
|
)
|
|
$
|
1,015
|
|
|
$
|
(1,123
|
)
|
Level 1
|
Valuations for assets and liabilities traded in active exchange markets. Valuations are obtained from available pricing sources for market transactions involving identical assets or liabilities.
|
Level 2
|
Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in active markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Inventory Reserve
|
Activity
|
||
Balance - January 1, 2011
|
$
|
—
|
|
Additions
|
471,000
|
|
|
Balance - December 31, 2011
|
$
|
471,000
|
|
Additions
|
750,000
|
|
|
Write-offs
|
(258,000
|
)
|
|
Balance - December 31, 2012
|
$
|
963,000
|
|
|
|
December 31, 2012 (In thousands)
|
||||||||||||
Acquisition
|
|
Intangible
|
|
Gross
Book Value
|
|
Accumulated
Amortization
|
|
Net
Book Value
|
||||||
S&H
|
|
Contracts - Fixed Price Level of Effort
|
|
$
|
1,606
|
|
|
$
|
1,205
|
|
|
$
|
401
|
|
ICCI
|
|
Contracts - Fixed Price Level of Effort
|
|
1,181
|
|
|
1,026
|
|
|
155
|
|
|||
ICCI
|
|
Contracts - T&M and IDIQ
|
|
3,018
|
|
|
2,982
|
|
|
36
|
|
|||
ESD
|
|
Contracts
|
|
1,207
|
|
|
831
|
|
|
376
|
|
|||
TAGG
|
|
Contracts
|
|
10,457
|
|
|
9,949
|
|
|
508
|
|
|||
IIT
|
|
Contracts
|
|
1,615
|
|
|
1,503
|
|
|
112
|
|
|||
IIT
|
|
Trade name
|
|
182
|
|
|
169
|
|
|
13
|
|
|||
Sycamore
|
|
Contracts
|
|
5,898
|
|
|
4,096
|
|
|
1,802
|
|
|||
Everest
|
|
Contracts
|
|
4,690
|
|
|
1,954
|
|
|
2,736
|
|
|||
JKA
|
|
Contracts
|
|
2,680
|
|
|
1,563
|
|
|
1,117
|
|
|||
FASI
|
|
Contracts
|
|
2,775
|
|
|
1,156
|
|
|
1,619
|
|
|||
FLD
|
|
Customer Relationships
|
|
17,549
|
|
|
10,287
|
|
|
7,262
|
|
|||
FLD
|
|
Contracts
|
|
2,234
|
|
|
1,582
|
|
|
652
|
|
|||
FLD
|
|
Technology Assets
|
|
1,958
|
|
|
1,148
|
|
|
810
|
|
|||
TI
|
|
Contracts
|
|
2,500
|
|
|
521
|
|
|
1,979
|
|
|||
Poole
|
|
Trade Name
|
|
795
|
|
|
159
|
|
|
636
|
|
|||
Poole
|
|
Contract rights
|
|
20,914
|
|
|
1,046
|
|
|
19,868
|
|
|||
Sensage
|
|
Marketing
|
|
249
|
|
|
50
|
|
|
199
|
|
|||
Sensage
|
|
Intellectual Property
|
|
4,567
|
|
|
381
|
|
|
4,186
|
|
|||
Sensage
|
|
Customer Relationships
|
|
3,682
|
|
|
184
|
|
|
3,498
|
|
|||
Rsignia
|
|
Intellectual Property
|
|
5,001
|
|
|
139
|
|
|
4,862
|
|
|||
Dilijent
|
|
Intellectual Property
|
|
1,000
|
|
|
28
|
|
|
972
|
|
|||
|
|
|
|
$
|
95,758
|
|
|
$
|
41,959
|
|
|
$
|
53,799
|
|
|
|
December 31, 2011 (In thousands)
|
||||||||||||
Acquisition
|
|
Intangible
|
|
Gross
Book Value
|
|
Accumulated
Amortization
|
|
Net
Book Value
|
||||||
S&H
|
|
Contracts – Fixed Price Level of Effort
|
|
$
|
1,606
|
|
|
$
|
972
|
|
|
$
|
634
|
|
ICCI
|
|
Contracts – Fixed Price Level of Effort
|
|
1,181
|
|
|
802
|
|
|
379
|
|
|||
ICCI
|
|
Contracts – T&M and IDIQ
|
|
3,018
|
|
|
2,886
|
|
|
132
|
|
|||
ESD
|
|
Contracts
|
|
1,207
|
|
|
590
|
|
|
617
|
|
|||
LEDS
|
|
Contracts
|
|
1,019
|
|
|
856
|
|
|
163
|
|
|||
Recon
|
|
Contracts
|
|
925
|
|
|
722
|
|
|
203
|
|
|||
TAGG
|
|
Contracts
|
|
10,457
|
|
|
6,463
|
|
|
3,994
|
|
|||
IIT
|
|
Contracts
|
|
1,615
|
|
|
964
|
|
|
651
|
|
|||
IIT
|
|
Trade name
|
|
182
|
|
|
109
|
|
|
73
|
|
|||
Sycamore
|
|
Contracts
|
|
5,898
|
|
|
2,130
|
|
|
3,768
|
|
|||
Everest
|
|
Contracts
|
|
4,690
|
|
|
1,016
|
|
|
3,674
|
|
|||
JKA
|
|
Contracts
|
|
2,680
|
|
|
670
|
|
|
2,010
|
|
|||
FASI
|
|
Contracts
|
|
2,775
|
|
|
462
|
|
|
2,313
|
|
|||
FLD
|
|
Customer Relationships
|
|
17,549
|
|
|
3,026
|
|
|
14,523
|
|
|||
FLD
|
|
Contracts
|
|
2,234
|
|
|
465
|
|
|
1,769
|
|
|||
FLD
|
|
Technology Assets
|
|
1,958
|
|
|
338
|
|
|
1,620
|
|
|||
TI
|
|
Contracts
|
|
2,500
|
|
|
21
|
|
|
2,479
|
|
|||
|
|
|
|
$
|
61,494
|
|
|
$
|
22,492
|
|
|
$
|
39,002
|
|
Estimated future intangible amortization expense by year (In thousands):
|
||||||||||||||||||
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||||||
$
|
24,091
|
|
|
$
|
11,135
|
|
|
$
|
9,486
|
|
|
$
|
5,398
|
|
|
$
|
3,689
|
|
Required Loan Payments (In thousands) :
|
||||||||
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
$5,688
|
|
$7,000
|
|
$7,000
|
|
$7,000
|
|
$42,000
|
|
2012
|
|
2011
|
|
2010
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
Risk-free interest rate
|
0.62% - 1.03%
|
|
0.87% – 2.24%
|
|
1.00% – 3.00%
|
Expected volatility
|
28.35% - 52.82%
|
|
28.35% – 36.35%
|
|
28.35% – 38.55%
|
Forfeitures
|
15.00% - 39.00%
|
|
15.00% – 39.00%
|
|
15.00% – 30.00%
|
|
Number of Shares
|
|
Option Exercise Price
|
|
Weighted Average Exercise Price
|
|
Outstanding 01/01/2010
|
1,032,250
|
|
|
|
|
|
Granted
|
811,400
|
|
|
$5.50 - $14.33
|
|
$10.72
|
Exercised
|
(11,878
|
)
|
|
$5.00 - $12.65
|
|
$7.57
|
Cancelled
|
(98,810
|
)
|
|
$5.00 - $12.65
|
|
$6.66
|
Outstanding 12/31/2010
|
1,732,962
|
|
|
|
|
|
Granted
|
726,200
|
|
|
$6.90 - $14.57
|
|
$12.03
|
Exercised
|
(50,296
|
)
|
|
$5.00 - $11.99
|
|
$5.76
|
Cancelled
|
(170,193
|
)
|
|
$5.00 - $14.57
|
|
$9.82
|
Options Outstanding 12/31/2011
|
2,238,673
|
|
|
|
|
|
Granted
|
1,393,700
|
|
|
$7.06 - $13.00
|
|
$10.62
|
Exercised
|
(81,674
|
)
|
|
$5.00 - $12.28
|
|
$6.22
|
Cancelled
|
(364,285
|
)
|
|
$5.00 - $14.57
|
|
$9.50
|
Options Outstanding 12/31/2012
|
3,186,414
|
|
|
|
|
|
Exercise Price
|
|
Options Outstanding
|
|
Intrinsic Value
|
|
Options Vested
|
|
Intrinsic Value
|
|
Weighted Average Remaining Life (Years)
|
||||||
$5.00
|
|
109,950
|
|
|
$
|
845,515
|
|
|
94,250
|
|
|
$
|
724,783
|
|
|
5.80
|
$5.50
|
|
752,725
|
|
|
5,412,093
|
|
|
645,378
|
|
|
4,640,268
|
|
|
6.83
|
||
$6.90 - $7.66
|
|
384,386
|
|
|
2,025,213
|
|
|
36,820
|
|
|
194,467
|
|
|
9.07
|
||
$7.96 - $8.14
|
|
92,274
|
|
|
433,819
|
|
|
42,045
|
|
|
198,213
|
|
|
8.90
|
||
$9.17 - $10.98
|
|
415,205
|
|
|
1,249,234
|
|
|
219,658
|
|
|
690,737
|
|
|
8.14
|
||
$11.18 - $11.99
|
|
176,350
|
|
|
170,430
|
|
|
108,924
|
|
|
98,292
|
|
|
8.23
|
||
$12.28 - $12.65
|
|
121,274
|
|
|
29,777
|
|
|
68,517
|
|
|
14,595
|
|
|
8.22
|
||
$12.69 - $14.57
|
|
1,134,250
|
|
|
—
|
|
|
327,692
|
|
|
—
|
|
|
9.20
|
||
|
|
3,186,414
|
|
|
$
|
10,166,081
|
|
|
1,543,284
|
|
|
$
|
6,561,355
|
|
|
|
2009 STOCK INCENTIVE PLAN
|
|
|
|
Total equity available to issue
|
|
4,336,265
|
|
Total equity outstanding or exercised
|
|
3,070,192
|
|
Total equity remaining
(1)
|
|
1,266,073
|
|
Exercise Price
|
|
Warrants Outstanding
|
|
Warrants Vested
|
|
Weighted Average
Remaining Life (Years)
|
||
$4.00
|
|
2,023,250
|
|
|
2,023,250
|
|
|
2.64
|
$5.50
|
|
2,246,780
|
|
|
2,246,780
|
|
|
3.40
|
$9.25
|
|
210,000
|
|
|
210,000
|
|
|
4.21
|
$12.65
|
|
158,116
|
|
|
158,116
|
|
|
6.90
|
|
|
4,638,146
|
|
|
4,638,146
|
|
|
|
|
Percent of Pre-tax Income
|
|||||||
|
2012
|
|
2011
|
|
2010
|
|||
Tax expense computed at statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes net of federal income tax benefit
|
(60.8
|
)%
|
|
(12.3
|
)%
|
|
5.0
|
%
|
Meals and entertainment – non-deductible
|
14.4
|
%
|
|
18.6
|
%
|
|
0.2
|
%
|
Non-deductible acquisition costs
|
18.4
|
%
|
|
12.1
|
%
|
|
1.3
|
%
|
Provision to return
|
(2.2
|
)%
|
|
(11.8
|
)%
|
|
—
|
%
|
Prior year tax credit
|
(13.8
|
)%
|
|
(12.6
|
)%
|
|
(0.6
|
)%
|
Income tax (benefit) provision
|
(9.0
|
)%
|
|
29.0
|
%
|
|
40.9
|
%
|
Major Jurisdictions
|
|
Open Years
|
United States
|
|
2001 through 2011
|
California
|
|
2001 through 2011
|
Florida
|
|
2009 through 2011
|
Maryland
|
|
2009 through 2011
|
Massachusetts
|
|
2009 through 2011
|
Virginia
|
|
2010 through 2011
|
|
December 31, 2012 (In thousands)
|
||||||||||
|
Services
|
|
Integrated Solutions
|
|
Corporate
|
||||||
Goodwill
|
$
|
271,822
|
|
|
$
|
19,039
|
|
|
$
|
—
|
|
Intangibles, net
|
37,192
|
|
|
16,607
|
|
|
—
|
|
|||
Property and Equipment, net
|
4,633
|
|
|
6,869
|
|
|
12,358
|
|
|||
Depreciation Expense
|
1,012
|
|
|
2,358
|
|
|
999
|
|
|||
Intangible Amortization
|
11,608
|
|
|
9,803
|
|
|
—
|
|
|
December 31, 2011 (In thousands)
|
||||||||||
|
Services
|
|
Integrated Solutions
|
|
Corporate
|
||||||
Goodwill
|
$
|
155,056
|
|
|
$
|
9,410
|
|
|
$
|
—
|
|
Intangibles, net
|
21,090
|
|
|
17,912
|
|
|
—
|
|
|||
Property and Equipment, net
|
1,462
|
|
|
6,050
|
|
|
1,195
|
|
|||
Depreciation Expense
|
610
|
|
|
1,176
|
|
|
296
|
|
|||
Intangible Amortization
|
9,581
|
|
|
3,829
|
|
|
—
|
|
Exhibit No.
|
|
Exhibit Description
|
|
|
2.1
|
|
Agreement and Plan of Merger, dated as of July 27, 2011, by and among The KEYW Corporation (“Purchaser”), FLD Acquisition Corporation, a wholly-owned subsidiary of Purchaser, Flight Landata Inc., and Jill Mann of Mann & Mann, P.C., as the Stockholder Representative.
|
|
(4)
|
2.2
|
|
Stock Purchase Agreement, dated September 10, 2012, by and among The KEYW Corporation, The KEYW Holding Corporation, Poole & Associates, Inc., the stockholders of Poole & Associates, Inc. and the Representative of the Sellers.
|
|
(7)
|
2.3
|
|
Agreement and Plan of Merger, dated September 13, 2012, by and among SenSage, Inc., The KEYW Corporation, The KEYW Holding Corporation, SSI Acquisition Corporation, and Fortis Advisors LLC as Representative of SenSage, Inc.'s shareholders.
|
|
(8)
|
3.1
|
|
Amended and Restated Articles of Incorporation of the Company, as filed on October 6, 2010
|
|
(2)
|
3.2
|
|
Amended and Restated Bylaws of the Company
|
|
(2)
|
4.3
|
|
Specimen of Common Stock Certificate
|
|
(1)
|
10.1*
|
|
The KEYW Corporation 2008 Stock Incentive Plan
|
|
(1)
|
10.2*
|
|
Form of Incentive Stock Option Agreement for grants pursuant to The KEYW Corporation 2008 Stock Incentive Plan
|
|
(1)
|
10.3*
|
|
Form of Non-Qualified Stock Option Agreement for grants pursuant to The KEYW Corporation 2008 Stock Incentive Plan
|
|
(1)
|
10.4*
|
|
Form of Restricted Stock Agreement for grants pursuant to The KEYW Corporation 2008 Stock Incentive Plan
|
|
(1)
|
10.5*
|
|
The KEYW Holding Corporation 2009 Stock Incentive Plan
|
|
(1)
|
10.6*
|
|
Form of Incentive Stock Option Agreement for grants pursuant to The KEYW Holding Corporation 2009 Stock Incentive Plan
|
|
x
|
10.7*
|
|
Form of Non-Qualified Stock Option Agreement for grants pursuant to The KEYW Holding Corporation 2009 Stock Incentive Plan
|
|
x
|
10.8*
|
|
Form of Restricted Stock Agreement for grants pursuant to The KEYW Holding Corporation 2009 Stock Incentive Plan
|
|
x
|
10.9*
|
|
Form of The KEYW Corporation Non-Qualified Stock Options Agreement for non-plan grants
|
|
(1)
|
10.10*
|
|
Form of The KEYW Corporation Restricted Stock Agreement for non-plan grants
|
|
(1)
|
10.11*
|
|
Long-Term Incentive Plan
|
|
(1)
|
10.12*
|
|
Annual Incentive Plan
|
|
(1)
|
10.13*
|
|
Employment Agreement, dated June 16, 2010, between The KEYW Corporation and Kimberly J. DeChello
|
|
(1)
|
10.14*
|
|
Employment Agreement, dated June 16, 2010, between The KEYW Corporation and John E. Krobath
|
|
(10)
|
10.15*
|
|
Employment Agreement, dated June 16, 2010, between The KEYW Corporation and Leonard E. Moodispaw
|
|
(10)
|
10.16*
|
|
Employment Agreement, dated June 16, 2010, between The KEYW Corporation and Mark A. Willard
|
|
(10)
|
10.17
|
|
Form of Amended and Restated Warrant
|
|
(10)
|
10.18*
|
|
The KEYW Holding Corporation 2010 Employee Stock Purchase Plan
|
|
(1)
|
10. 19*
|
|
Amendment, dated March 12, 2012, to Employment Agreement, dated June 16, 2010, between The KEYW Corporation and Kimberly J. DeChello
|
|
(3)
|
10.20*
|
|
Amendment, dated March 12, 2012, to Employment Agreement, dated June 16, 2010, between The KEYW Corporation and John E. Krobath
|
|
(3)
|
10.21*
|
|
Amendment, dated March 12, 2012, to Employment Agreement, dated June 16, 2010, between The KEYW Corporation and Leonard E. Moodispaw
|
|
(3)
|
10. 22*
|
|
Amendment, dated March 12, 2012, to Employment Agreement, dated June 16, 2010, between The KEYW Corporation and Mark A. Willard
|
|
(3)
|
10.23*
|
|
Second Amendment, dated June 29, 2012, to Employment Agreement, dated June 16, 2010, between The KEYW Corporation and Leonard Moodispaw
|
|
(5)
|
10.24*
|
|
Second Amendment, dated June 29, 2012, to Employment Agreement, dated June 16, 2010, between The KEYW Corporation and John E. Krobath
|
|
(5)
|
10.25*
|
|
Second Amendment, dated June 29, 2012, to Employment Agreement, dated June 16, 2010, between The KEYW Corporation and Mark A. Willard
|
|
(5)
|
10.26*
|
|
Second Amendment, dated June 29, 2012, to Employment Agreement, dated June 16, 2010, between The KEYW Corporation and Kimberly J. DeChello
|
|
(5)
|
10.27*
|
|
The KEYW Holding Corporation 2013 Stock Incentive Plan
|
|
(6)
|
10.28*
|
|
Form of Incentive Stock Option Agreement for grants pursuant to The KEYW Holding Corporation 2013 Stock Incentive Plan
|
|
x
|
10.29*
|
|
Form of Non-Qualified Stock Option Agreement for grants pursuant to The KEYW Holding Corporation 2013 Stock Incentive Plan
|
|
x
|
10.30*
|
|
Form of Restricted Stock Agreement for grants pursuant to The KEYW Holding Corporation 2013 Stock Incentive Plan
|
|
x
|
10.33
|
|
Amended and Restated Credit Agreement, dated as of November 20, 2012, among The KEYW Corporation, as the Borrower, the domestic direct and indirect subsidiaries of the Borrower and the KEYW Holding Corporation, as Guarantors, the lenders identified in the Amended and Restated Credit Agreement and Royal Bank of Canada, as Administrative Agent
|
|
(9)
|
14.1
|
|
Code of Ethics
|
|
(2)
|
21.1
|
|
Subsidiaries of the Registrant
|
|
x
|
23.1
|
|
Consent of Grant Thornton LLP
|
|
x
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to R Rule 13a-14(a)/15d-14(a)
|
|
x
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to R Rule 13a-14(a)/15d-14(a)
|
|
x
|
32.1**
|
|
Certification of the Chief Executive Officer and the Chief Financial Officer and Principal Accounting Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002
|
|
x
|
101.INS***
|
|
XBRL Instance Document
|
|
x
|
101.SCH***
|
|
XBRL Taxonomy Extension Schema Document
|
|
x
|
101.CAL***
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
x
|
101.LAB***
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
x
|
101.PRE***
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
x
|
101.DEF***
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
x
|
|
x
|
Filed herewith
|
*
|
Indicates management contract of compensatory agreements
|
**
|
These exhibits are being “furnished” with this periodic report and are not deemed “filed” with the Securities and Exchange Commission and are not incorporated by reference in any filing of the Company under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation by reference language in any such filing.
|
***
|
Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
|
(1)
|
Incorporated by reference to the corresponding Exhibit number to the Registrant's Registration Statement on Form S-1, as amended (File No. 333-16768).
|
(2)
|
Filed as Exhibits 3.1, 3.2 and 14.1, respectively, to Registrant's Form 10-K filed March 29, 2011, File No. 001-34891.
|
(3)
|
Filed as Exhibits 10.36, 10.37. 10.38 and 10.39, respectively, to the Registrant's Annual Report on Form 10-K, filed March 15, 2012, File No. 001-34891.
|
(4)
|
Filed as Exhibit 2.1 to Registrant's Form 8-K filed August 10, 2011, File No. 001-34891.
|
(5)
|
Filed as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to Registrant's Current Report on Form 8-K filed July 3, 2012, File No. 001-34891.
|
(6)
|
Filed as Annex A to Registrant's Definitive Proxy Statement on Schedule 14A filed July 13, 2012.
|
(7)
|
Filed as Exhibit 2.1 to Registrant's Current Report on Form 8-K filed September 12, 2012, File No. 001-34891.
|
(8)
|
Filed as Exhibit 2.1 to Registrant's Current Report on Form 8-K filed September 19, 2012, File No. 001-34891.
|
(9)
|
Filed as Exhibit 10.1 to Registrant's Current Report on Form 8-K filed November 27, 2012, File No. 001-34891.
|
(10)
|
Filed as Exhibits 10.16, 10.17, 10.18 and 10.20, respectively, to the Registrant's Registration Statement on Form S-1, as amended (File No. 333-16768).
|
Optionee:
|
|
|
(Signature)
|
|
|
Company:
|
|
|
(Signature)
|
|
|
Title:
|
|
Incentive Stock Option
|
This option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly. If you cease to be an employee of the Company, its parent or a subsidiary ("Employee") but continue to provide Service, this option will be deemed a nonstatutory stock option three months after you cease to be an Employee. In addition, to the extent that all or part of this option exceeds the $100,000 rule of section 422(d) of the Internal Revenue Code, this option or the lesser excess part will be deemed to be a nonstatutory stock option.
|
Vesting
|
This option is only exercisable before it expires and then only with respect to the vested portion of the option. Subject to the preceding sentence, you may exercise this option, in whole or in part, to purchase a whole number of vested shares (not less than 100 shares unless the number of shares purchased is the total number available for purchase under the option), by following the procedures set forth in the Plan and below in this Agreement.
Your right to purchase shares of Stock under this option vests as to equal
installments of the total number of shares covered by this option, as shown on the cover sheet under vesting schedule provided you then continue in Service.
Except as provided below, no additional shares of Stock will vest after your Service has terminated for any reason.
|
Term
|
Your option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the cover sheet. Your option will expire earlier (but never later) if your Service terminates, as described below.
[NOTE: If Grantee is a 10% stockholder, the term can't be longer than 5 years.]
|
Regular Termination
|
If your Service terminates for any reason, other than death, Disability or Cause, then your option will expire on your Termination Date.
|
Termination for
Cause
|
If your Service is terminated for Cause, then you shall immediately forfeit all rights to your option and the option shall immediately expire.
|
Death
|
If your Service terminates because of your death, then your option will be fully vested and exercisable and will expire at the close of business at Company headquarters on the date six (6) months after the date of death. During that six month period, your estate or heirs may exercise the vested portion of your option.
|
Disability
|
If your Service terminates because of your Disability, then your option will be fully vested and exercisable and will expire at the close of business at Company headquarters on the date six (6) months after your termination date.
|
Leave of Absence
|
For purposes of this option, your Service does not terminate when you go on a
bona fide
employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating 90 days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.
The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.
|
Non-Solicitation, Non-Interference
|
In consideration of (i) the grant of the option under this Agreement, and (ii) your continued employment with the Company, its parent, or a subsidiary of the Company or its parent (each a “
Covered Party
”), you hereby agree to the following:
During the period of your employment with the Company or another Covered Party and for a period ending six (6) months following the termination of your employment, for any reason, with a Covered Party, except with the prior written consent of the Company, you will not:
Directly or indirectly recruit or solicit any employee of a Covered Party or any person who was employed by a Covered Party within the six-month period prior to the termination of your employment (each a “
Covered Employee
”) for employment or for retention as a consultant or service provider;
Directly or indirectly hire or participate in the process of hiring any Covered Employee, or provide names or other information about any Covered Employees to any person or business under circumstances which could lead to the use of that information for purposes of recruiting or hiring (provided, that this restriction does not apply to any Covered Employee who responds to any general solicitation (such as an advertisement) in media of general circulation);
Solicit or induce, or in any manner attempt to solicit or induce, any Customer (as defined Below), to (1) cease being a customer of or to not become a customer of Covered Party, (2) divert any business of such Customer from a Covered Party, (3) reduce the amount of business that such Customer conducts or intends to conduct with any Covered Party; or (4) otherwise interfere with, disrupt, or attempt to interfere with or disrupt, the relationship between a Covered Party and any of its customers or clients, suppliers, consultants, or employees;
Participate in competition for the award of or perform services in connection with (1) any contract, task order or program for which a Covered Party is competing, or (2) any contract, task order or program that would replace, supersede, succeed, reduce or diminish any Covered Party's work under a contract, task order or program;
Make false or disparaging statements regarding any Covered Party, or any of Covered Party's respective officers, directors, shareholders, employees or affiliates in matters relating to a Covered Party or its business.
For purposes of this Agreement a “
Customer
” means any client or customer of the Company at the time of the termination of your employment or any prospective customer to which the Company has made or intends to make a proposal at such time, and includes in addition to any party with whom a Covered Party has a contract, the specific program office or directorate of a federal government department or agency to which products or services are ultimately provided under a contract to which a Covered Party is a party.
|
Retention Rights
|
Neither your option nor this Agreement give you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason.
|
Shareholder Rights
|
You, or your estate or heirs, have no rights as a shareholder of the Company until a certificate for your option's shares has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the Plan.
|
Adjustments
|
In the event of a stock split, a stock dividend or a similar change in the Stock, the number of shares covered by this option and the option price per share shall be adjusted (and rounded down to the nearest whole number) if required pursuant to the Plan. Your option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
|
The Plan
|
The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan.
This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded.
|
Data Privacy
|
In order to administer the Plan, the Company may process personal data about you. Such data includes but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan.
By accepting this grant, you give explicit consent to the Company to process any such personal data. You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident Grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan.
|
Consent to Electronic Delivery
|
The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this grant you agree that the Company may deliver the Plan prospectus and the Company's annual report (to the extent required) to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide copies. Please contact Kim DeChello to request paper copies of these documents.
|
Shares
|
Vesting Dated
|
|
|
|
|
|
|
|
|
Optionee:
|
|
|
(Signature)
|
|
|
Company:
|
|
|
(Signature)
|
|
|
Title:
|
|
Non-Qualified Stock Option
|
This option is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly.
|
Vesting
|
This option is only exercisable before it expires and then only with respect to the vested portion of the option. Subject to the preceding sentence, you may exercise this option, in whole or in part, to purchase a whole number of vested shares (not less than 100 shares unless the number of shares purchased is the total number available for purchase under the option), by following the procedures set forth in the Plan and below in this Agreement.
Your right to purchase shares of Stock under this option vests as to equal installments of the total number of shares covered by this option, as shown on the cover sheet, on the Grant Date and of the first three one-year anniversaries of the Vesting Start Date provided you then continue in Service.
Except as provided below, no additional shares of Stock will vest after your Service has terminated for any reason.
|
Term
|
Your option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the cover sheet. Your option will expire earlier (but never later) if your Service terminates, as described below.
|
Regular Termination
|
If your Service terminates for any reason, other than death, Disability or Cause, then your option will expire on your Termination Date.
|
Termination for
Cause
|
If your Service is terminated for Cause, then you shall immediately forfeit all rights to your option and the option shall immediately expire.
|
Death
|
If your Service terminates because of your death, then your option will be fully vested and exercisable and will expire at the close of business at Company headquarters on the date six (6) months after the date of death. During that six month period, your estate or heirs may exercise the vested portion of your option.
|
Disability
|
If your Service terminates because of your Disability, then your option will be fully vested and exercisable and will expire at the close of business at Company headquarters on the date six (6) months after your termination date.
|
Leaves of Absence
|
For purposes of this option, your Service does not terminate when you go on a
bona fide
employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating 90 days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.
The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.
|
Notice of Exercise
|
When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many shares you wish to purchase (in a parcel of at least 100 shares generally). Your notice must also specify how your shares of Stock should be registered (in your name only or in your and your spouse's names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company.
If someone else wants to exercise this option after your death, that person must prove to the Company's satisfaction that he or she is entitled to do so.
|
Non-Solicitation, Non-Interference
|
In consideration of (i) the grant of the option under this Agreement, and (ii) your continued employment with the Company, its parent, or a subsidiary of the Company or its parent (each a “
Covered Party
”), you hereby agree to the following:
During the period of your employment with the Company or another Covered Party and for a period ending six (6) months following the termination of your employment, for any reason, with a Covered Party, except with the prior written consent of the Company, you will not:
Directly or indirectly recruit or solicit any employee of a Covered Party or any person who was employed by a Covered Party within the six-month period prior to the termination of your employment (each a “
Covered Employee
”) for employment or for retention as a consultant or service provider;
Directly or indirectly hire or participate in the process of hiring any Covered Employee, or provide names or other information about any Covered Employees to any person or business under circumstances which could lead to the use of that information for purposes of recruiting or hiring (provided, that this restriction does not apply to any Covered Employee who responds to any general solicitation (such as an advertisement) in media of general circulation);
Solicit or induce, or in any manner attempt to solicit or induce, any Customer (as defined Below), to (1) cease being a customer of or to not become a customer of Covered Party, (2) divert any business of such Customer from a Covered Party, (3) reduce the amount of business that such Customer conducts or intends to conduct with any Covered Party; or (4) otherwise interfere with, disrupt, or attempt to interfere with or disrupt, the relationship between a Covered Party and any of its customers or clients, suppliers, consultants, or employees;
Participate in competition for the award of or perform services in connection with (1) any contract, task order or program for which a Covered Party is competing, or (2) any contract, task order or program that would replace, supersede, succeed, reduce or diminish any Covered Party's work under a contract, task order or program;
Make false or disparaging statements regarding any Covered Party, or any of Covered Party's respective officers, directors, shareholders, employees or affiliates in matters relating to a Covered Party or its business.
For purposes of this Agreement a “
Customer
” means any client or customer of the Company at the time of the termination of your employment or any prospective customer to which the Company has made or intends to make a proposal at such time, and includes in addition to any party with whom a Covered Party has a contract, the specific program office or directorate of a federal government department or agency to which products or services are ultimately provided under a contract to which a Covered Party is a party.
|
Retention Rights
|
Neither your option nor this Agreement gives you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason.
|
Shareholder Rights
|
You, or your estate or heirs, have no rights as a shareholder of the Company until a certificate for your option's shares has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the Plan.
|
Adjustments
|
In the event of a stock split, a stock dividend or a similar change in the Stock, the number of shares covered by this option and the option price per share shall be adjusted (and rounded down to the nearest whole number) if required pursuant to the Plan. Your option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
|
The Plan
|
The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan.
This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded.
|
Data Privacy
|
In order to administer the Plan, the Company may process personal data about you. Such data includes but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan.
By accepting this grant, you give explicit consent to the Company to process any such personal data. You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident Grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan.
|
Consent to Electronic Delivery
|
The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this grant you agree that the Company may deliver the Plan prospectus and the Company's annual report (to the extent required) to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide copies. Please contact Kim DeChello to request paper copies of these documents.
|
Shares
|
|
Vesting Dated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grantee:
|
|
|
(Signature)
|
|
|
Company:
|
|
|
(Signature)
|
|
|
Title:
|
|
Restricted Stock/ Nontransferability
|
This grant is an award of Stock in the number of shares set forth on the cover sheet, at the purchase price set forth on the cover sheet, and subject to the vesting conditions described below ("Restricted Stock"). To the extent not yet vested, your Restricted Stock may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may the Restricted Stock be made subject to execution, attachment or similar process.
|
Vesting
|
The Company will issue your Restricted Stock in your name as of the Grant Date.
Your right to the Stock under this Restricted Stock Agreement vests per the vesting schedule as shown on the cover sheet provided you then continue in Service. The resulting aggregate number of vested shares of Stock will be rounded to the nearest whole number, and you cannot vest in more than the number of shares covered by this grant.
No additional shares of Stock will vest after your Service has terminated for any reason,
provided
,
however
, that if your Service is terminated on account of your death or Disability, any unvested shares of Stock will become fully vested.
|
Forfeiture of Unvested Stock
|
Except as provided in this Agreement, in the event that your Service terminates for any reason, you will forfeit to the Company all of the shares of Stock subject to this grant that have not yet vested.
|
Issuance
|
The issuance of the Stock under this grant shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry, registration or issuance of one or more Stock certificates, with any unvested Restricted Stock bearing the appropriate restrictions imposed by this Agreement. As your interest in the Stock vests as described above, the recordation of the number of shares of Restricted Stock attributable to you will be appropriately modified. To the extent certificates are issued with regard to unvested Stock, such certificates will be held in escrow with the Secretary of the Company while the Stock remains unvested.
|
Withholding Taxes
|
You agree, as a condition of this grant, that you will make acceptable arrangements, as determined by the Company in its sole discretion, to pay any withholding or other taxes that may be due as a result of the payment of dividends or the vesting of Stock acquired under this grant. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the payment of dividends or the vesting of shares arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate (including by repurchasing vested shares of Stock under this Agreement).
|
Non-Solicitation, Non-Interference
|
In consideration of (i) the grant of the option under this Agreement, and (ii) your continued employment with the Company, its parent, or a subsidiary of the Company or its parent (each a “
Covered Party
”), you hereby agree to the following:
During the period of your employment with the Company or another Covered Party and for a period ending six (6) months following the termination of your employment, for any reason, with a Covered Party, except with the prior written consent of the Company, you will not:
* Directly or indirectly recruit or solicit any employee of a Covered Party or any person who was employed by a Covered Party within the six-month period prior to the termination of your employment (each a “
Covered Employee
”) for employment or for retention as a consultant or service provider;
* Directly or indirectly hire or participate in the process of hiring any Covered Employee, or provide names or other information about any Covered Employees to any person or business under circumstances which could lead to the use of that information for purposes of recruiting or hiring (provided, that this restriction does not apply to any Covered Employee who responds to any general solicitation (such as an advertisement) in media of general circulation);
* Solicit or induce, or in any manner attempt to solicit or induce, any Customer (as defined Below), to (1) cease being a customer of or to not become a customer of Covered Party, (2) divert any business of such Customer from a Covered Party, (3) reduce the amount of business that such Customer conducts or intends to conduct with any Covered Party; or (4) otherwise interfere with, disrupt, or attempt to interfere with or disrupt, the relationship between a Covered Party and any of its customers or clients, suppliers, consultants, or employees;
* Participate in competition for the award of or perform services in connection with (1) any contract, task order or program for which a Covered Party is competing, or (2) any contract, task order or program that would replace, supersede, succeed, reduce or diminish any Covered Party's work under a contract, task order or program;
* Make false or disparaging statements regarding any Covered Party, or any of Covered Party's respective officers, directors, shareholders, employees or affiliates in matters relating to a Covered Party or its business.
For purposes of this Agreement a “
Customer
” means any client or customer of the Company at the time of the termination of your employment or any prospective customer to which the Company has made or intends to make a proposal at such time, and includes in addition to any party with whom a Covered Party has a contract, the specific program office or directorate of a federal government department or agency to which products or services are ultimately provided under a contract to which a Covered Party is a party.
|
Retention Rights
|
This Agreement does not give you the right to be retained or employed by the Company (or any of its Affiliates) in any capacity. The Company (and any Affiliates) reserves the right to terminate your Service at any time and for any reason.
|
Shareholder Rights
|
You have the right to vote the Restricted Stock and to receive any dividends declared or paid on such stock. Any distributions you receive as a result of any stock split, stock dividend, combination of shares or other similar transaction shall be deemed to be a part of the Restricted Stock and subject to the same conditions and restrictions applicable thereto.
The Company may in its sole discretion require any dividends paid on the Restricted Stock to be reinvested in shares of Stock, which the Company may in its sole discretion deem to be a part of the shares of Restricted Stock and subject to the same conditions and restrictions applicable thereto. Except as described in the Plan, no adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued.
|
Adjustments
|
In the event of a stock split, a stock dividend or a similar change in the Company stock, the number of shares covered by this grant may be adjusted (and rounded down to the nearest whole number) pursuant to the Plan. Your Restricted Stock shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity in accordance with the terms of the Plan.
|
Optionee:
|
|
|
(Signature)
|
|
|
Company:
|
|
|
(Signature)
|
|
|
Title:
|
|
Incentive Stock Option
|
This option is intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly. If you cease to be an employee of the Company, its parent or a subsidiary ("Employee") but continue to provide Service, this option will be deemed a nonstatutory stock option three months after you cease to be an Employee. In addition, to the extent that all or part of this option exceeds the $100,000 rule of section 422(d) of the Internal Revenue Code, this option or the lesser excess part will be deemed to be a nonstatutory stock option.
|
Vesting
|
This option is only exercisable before it expires and then only with respect to the vested portion of the option. Subject to the preceding sentence, you may exercise this option, in whole or in part, to purchase a whole number of vested shares (not less than 100 shares unless the number of shares purchased is the total number available for purchase under the option), by following the procedures set forth in the Plan and below in this Agreement.
Your right to purchase shares of Stock under this option vests as to equal
installments of the total number of shares covered by this option, as shown on the cover sheet under vesting schedule provided you then continue in Service.
Except as provided below, no additional shares of Stock will vest after your Service has terminated for any reason.
|
Term
|
Your option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the cover sheet. Your option will expire earlier (but never later) if your Service terminates, as described below.
[NOTE: If Grantee is a 10% stockholder, the term can't be longer than 5 years.]
|
Regular Termination
|
If your Service terminates for any reason, other than death, Disability or Cause, then your option will expire on your Termination Date.
|
Termination for
Cause
|
If your Service is terminated for Cause, then you shall immediately forfeit all rights to your option and the option shall immediately expire.
|
Death
|
If your Service terminates because of your death, then your option will be fully vested and exercisable and will expire at the close of business at Company headquarters on the date six (6) months after the date of death. During that six month period, your estate or heirs may exercise the vested portion of your option.
|
Disability
|
If your Service terminates because of your Disability, then your option will be fully vested and exercisable and will expire at the close of business at Company headquarters on the date six (6) months after your termination date.
|
Leave of Absence
|
For purposes of this option, your Service does not terminate when you go on a
bona fide
employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating 90 days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.
The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.
|
Non-Solicitation, Non-Interference
|
In consideration of (i) the grant of the option under this Agreement, and (ii) your continued employment with the Company, its parent, or a subsidiary of the Company or its parent (each a “
Covered Party
”), you hereby agree to the following:
During the period of your employment with the Company or another Covered Party and for a period ending six (6) months following the termination of your employment, for any reason, with a Covered Party, except with the prior written consent of the Company, you will not:
Directly or indirectly recruit or solicit any employee of a Covered Party or any person who was employed by a Covered Party within the six-month period prior to the termination of your employment (each a “
Covered Employee
”) for employment or for retention as a consultant or service provider;
Directly or indirectly hire or participate in the process of hiring any Covered Employee, or provide names or other information about any Covered Employees to any person or business under circumstances which could lead to the use of that information for purposes of recruiting or hiring (provided, that this restriction does not apply to any Covered Employee who responds to any general solicitation (such as an advertisement) in media of general circulation);
Solicit or induce, or in any manner attempt to solicit or induce, any Customer (as defined Below), to (1) cease being a customer of or to not become a customer of Covered Party, (2) divert any business of such Customer from a Covered Party, (3) reduce the amount of business that such Customer conducts or intends to conduct with any Covered Party; or (4) otherwise interfere with, disrupt, or attempt to interfere with or disrupt, the relationship between a Covered Party and any of its customers or clients, suppliers, consultants, or employees;
Participate in competition for the award of or perform services in connection with (1) any contract, task order or program for which a Covered Party is competing, or (2) any contract, task order or program that would replace, supersede, succeed, reduce or diminish any Covered Party's work under a contract, task order or program;
Make false or disparaging statements regarding any Covered Party, or any of Covered Party's respective officers, directors, shareholders, employees or affiliates in matters relating to a Covered Party or its business.
For purposes of this Agreement a “
Customer
” means any client or customer of the Company at the time of the termination of your employment or any prospective customer to which the Company has made or intends to make a proposal at such time, and includes in addition to any party with whom a Covered Party has a contract, the specific program office or directorate of a federal government department or agency to which products or services are ultimately provided under a contract to which a Covered Party is a party.
|
Retention Rights
|
Neither your option nor this Agreement give you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason.
|
Shareholder Rights
|
You, or your estate or heirs, have no rights as a shareholder of the Company until a certificate for your option's shares has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the Plan.
|
Adjustments
|
In the event of a stock split, a stock dividend or a similar change in the Stock, the number of shares covered by this option and the option price per share shall be adjusted (and rounded down to the nearest whole number) if required pursuant to the Plan. Your option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
|
Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
|
The Plan
|
The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan.
This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded.
|
Data Privacy
|
In order to administer the Plan, the Company may process personal data about you. Such data includes but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan.
By accepting this grant, you give explicit consent to the Company to process any such personal data. You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident Grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan.
|
Consent to Electronic Delivery
|
The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this grant you agree that the Company may deliver the Plan prospectus and the Company's annual report (to the extent required) to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide copies. Please contact Kim DeChello to request paper copies of these documents.
|
Shares
|
Vesting Dated
|
|
|
|
|
|
|
|
|
Optionee:
|
|
|
(Signature)
|
|
|
Company:
|
|
|
(Signature)
|
|
|
Title:
|
|
Non-Qualified Stock Option
|
This option is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code and will be interpreted accordingly.
|
Vesting
|
This option is only exercisable before it expires and then only with respect to the vested portion of the option. Subject to the preceding sentence, you may exercise this option, in whole or in part, to purchase a whole number of vested shares (not less than 100 shares unless the number of shares purchased is the total number available for purchase under the option), by following the procedures set forth in the Plan and below in this Agreement.
Your right to purchase shares of Stock under this option vests as to equal
installments of the total number of shares covered by this option, as shown on the cover sheet, on the Grant Date and of the first three one-year anniversaries of the Vesting Start Date provided you then continue in Service.
Except as provided below, no additional shares of Stock will vest after your Service has terminated for any reason.
|
Term
|
Your option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Grant Date, as shown on the cover sheet. Your option will expire earlier (but never later) if your Service terminates, as described below.
|
Regular Termination
|
If your Service terminates for any reason, other than death, Disability or Cause, then your option will expire on your Termination Date.
|
Termination for
Cause
|
If your Service is terminated for Cause, then you shall immediately forfeit all rights to your option and the option shall immediately expire.
|
Death
|
If your Service terminates because of your death, then your option will be fully vested and exercisable and will expire at the close of business at Company headquarters on the date six (6) months after the date of death. During that six month period, your estate or heirs may exercise the vested portion of your option.
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Disability
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If your Service terminates because of your Disability, then your option will be fully vested and exercisable and will expire at the close of business at Company headquarters on the date six (6) months after your termination date.
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Leaves of Absence
|
For purposes of this option, your Service does not terminate when you go on a
bona fide
employee leave of absence that was approved by the Company in writing, if the terms of the leave provide for continued Service crediting, or when continued Service crediting is required by applicable law. However, your Service will be treated as terminating 90 days after you went on employee leave, unless your right to return to active work is guaranteed by law or by a contract. Your Service terminates in any event when the approved leave ends unless you immediately return to active employee work.
The Company determines, in its sole discretion, which leaves count for this purpose, and when your Service terminates for all purposes under the Plan.
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Notice of Exercise
|
When you wish to exercise this option, you must notify the Company by filing the proper “Notice of Exercise” form at the address given on the form. Your notice must specify how many shares you wish to purchase (in a parcel of at least 100 shares generally). Your notice must also specify how your shares of Stock should be registered (in your name only or in your and your spouse's names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company.
If someone else wants to exercise this option after your death, that person must prove to the Company's satisfaction that he or she is entitled to do so.
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Non-Solicitation, Non-Interference
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In consideration of (i) the grant of the option under this Agreement, and (ii) your continued employment with the Company, its parent, or a subsidiary of the Company or its parent (each a “
Covered Party
”), you hereby agree to the following:
During the period of your employment with the Company or another Covered Party and for a period ending six (6) months following the termination of your employment, for any reason, with a Covered Party, except with the prior written consent of the Company, you will not:
Directly or indirectly recruit or solicit any employee of a Covered Party or any person who was employed by a Covered Party within the six-month period prior to the termination of your employment (each a “
Covered Employee
”) for employment or for retention as a consultant or service provider;
Directly or indirectly hire or participate in the process of hiring any Covered Employee, or provide names or other information about any Covered Employees to any person or business under circumstances which could lead to the use of that information for purposes of recruiting or hiring (provided, that this restriction does not apply to any Covered Employee who responds to any general solicitation (such as an advertisement) in media of general circulation);
Solicit or induce, or in any manner attempt to solicit or induce, any Customer (as defined Below), to (1) cease being a customer of or to not become a customer of Covered Party, (2) divert any business of such Customer from a Covered Party, (3) reduce the amount of business that such Customer conducts or intends to conduct with any Covered Party; or (4) otherwise interfere with, disrupt, or attempt to interfere with or disrupt, the relationship between a Covered Party and any of its customers or clients, suppliers, consultants, or employees;
Participate in competition for the award of or perform services in connection with (1) any contract, task order or program for which a Covered Party is competing, or (2) any contract, task order or program that would replace, supersede, succeed, reduce or diminish any Covered Party's work under a contract, task order or program;
Make false or disparaging statements regarding any Covered Party, or any of Covered Party's respective officers, directors, shareholders, employees or affiliates in matters relating to a Covered Party or its business.
For purposes of this Agreement a “
Customer
” means any client or customer of the Company at the time of the termination of your employment or any prospective customer to which the Company has made or intends to make a proposal at such time, and includes in addition to any party with whom a Covered Party has a contract, the specific program office or directorate of a federal government department or agency to which products or services are ultimately provided under a contract to which a Covered Party is a party.
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Retention Rights
|
Neither your option nor this Agreement gives you the right to be retained by the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The Company (and any Parent, Subsidiaries or Affiliates) reserve the right to terminate your Service at any time and for any reason.
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Shareholder Rights
|
You, or your estate or heirs, have no rights as a shareholder of the Company until a certificate for your option's shares has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the Plan.
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Adjustments
|
In the event of a stock split, a stock dividend or a similar change in the Stock, the number of shares covered by this option and the option price per share shall be adjusted (and rounded down to the nearest whole number) if required pursuant to the Plan. Your option shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity.
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Applicable Law
|
This Agreement will be interpreted and enforced under the laws of the State of Maryland, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.
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The Plan
|
The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan.
This Agreement and the Plan constitute the entire understanding between you and the Company regarding this option. Any prior agreements, commitments or negotiations concerning this option are superseded.
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Data Privacy
|
In order to administer the Plan, the Company may process personal data about you. Such data includes but is not limited to the information provided in this Agreement and any changes thereto, other appropriate personal and financial data about you such as home address and business addresses and other contact information, payroll information and any other information that might be deemed appropriate by the Company to facilitate the administration of the Plan.
By accepting this grant, you give explicit consent to the Company to process any such personal data. You also give explicit consent to the Company to transfer any such personal data outside the country in which you work or are employed, including, with respect to non-U.S. resident Grantees, to the United States, to transferees who shall include the Company and other persons who are designated by the Company to administer the Plan.
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Consent to Electronic Delivery
|
The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this grant you agree that the Company may deliver the Plan prospectus and the Company's annual report (to the extent required) to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide copies. Please contact Kim DeChello to request paper copies of these documents.
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Shares
|
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Vesting Dated
|
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Grantee:
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|
|
(Signature)
|
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Company:
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(Signature)
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Title:
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Restricted Stock/ Nontransferability
|
This grant is an award of Stock in the number of shares set forth on the cover sheet, at the purchase price set forth on the cover sheet, and subject to the vesting conditions described below ("Restricted Stock"). To the extent not yet vested, your Restricted Stock may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may the Restricted Stock be made subject to execution, attachment or similar process.
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Vesting
|
The Company will issue your Restricted Stock in your name as of the Grant Date.
Your right to the Stock under this Restricted Stock Agreement vests per the vesting schedule as shown on the cover sheet provided you then continue in Service. The resulting aggregate number of vested shares of Stock will be rounded to the nearest whole number, and you cannot vest in more than the number of shares covered by this grant.
No additional shares of Stock will vest after your Service has terminated for any reason,
provided
,
however
, that if your Service is terminated on account of your death or Disability, any unvested shares of Stock will become fully vested.
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Forfeiture of Unvested Stock
|
Except as provided in this Agreement, in the event that your Service terminates for any reason, you will forfeit to the Company all of the shares of Stock subject to this grant that have not yet vested.
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Issuance
|
The issuance of the Stock under this grant shall be evidenced in such a manner as the Company, in its discretion, will deem appropriate, including, without limitation, book-entry, registration or issuance of one or more Stock certificates, with any unvested Restricted Stock bearing the appropriate restrictions imposed by this Agreement. As your interest in the Stock vests as described above, the recordation of the number of shares of Restricted Stock attributable to you will be appropriately modified. To the extent certificates are issued with regard to unvested Stock, such certificates will be held in escrow with the Secretary of the Company while the Stock remains unvested.
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Withholding Taxes
|
You agree, as a condition of this grant, that you will make acceptable arrangements, as determined by the Company in its sole discretion, to pay any withholding or other taxes that may be due as a result of the payment of dividends or the vesting of Stock acquired under this grant. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the payment of dividends or the vesting of shares arising from this grant, the Company shall have the right to require such payments from you, or withhold such amounts from other payments due to you from the Company or any Affiliate (including by repurchasing vested shares of Stock under this Agreement).
|
Non-Solicitation, Non-Interference
|
In consideration of (i) the grant of the award under this Agreement, and (ii) your continued employment with the Company, its parent, or a subsidiary of the Company or its parent (each a “
Covered Party
”), you hereby agree to the following:
During the period of your employment with the Company or another Covered Party and for a period ending six (6) months following the termination of your employment, for any reason, with a Covered Party, except with the prior written consent of the Company, you will not:
* Directly or indirectly recruit or solicit any employee of a Covered Party or any person who was employed by a Covered Party within the six-month period prior to the termination of your employment (each a “
Covered Employee
”) for employment or for retention as a consultant or service provider;
* Directly or indirectly hire or participate in the process of hiring any Covered Employee, or provide names or other information about any Covered Employees to any person or business under circumstances which could lead to the use of that information for purposes of recruiting or hiring (provided, that this restriction does not apply to any Covered Employee who responds to any general solicitation (such as an advertisement) in media of general circulation);
* Solicit or induce, or in any manner attempt to solicit or induce, any Customer (as defined Below), to (1) cease being a customer of or to not become a customer of Covered Party, (2) divert any business of such Customer from a Covered Party, (3) reduce the amount of business that such Customer conducts or intends to conduct with any Covered Party; or (4) otherwise interfere with, disrupt, or attempt to interfere with or disrupt, the relationship between a Covered Party and any of its customers or clients, suppliers, consultants, or employees;
* Participate in competition for the award of or perform services in connection with (1) any contract, task order or program for which a Covered Party is competing, or (2) any contract, task order or program that would replace, supersede, succeed, reduce or diminish any Covered Party's work under a contract, task order or program;
* Make false or disparaging statements regarding any Covered Party, or any of Covered Party's respective officers, directors, shareholders, employees or affiliates in matters relating to a Covered Party or its business.
For purposes of this Agreement a “
Customer
” means any client or customer of the Company at the time of the termination of your employment or any prospective customer to which the Company has made or intends to make a proposal at such time, and includes in addition to any party with whom a Covered Party has a contract, the specific program office or directorate of a federal government department or agency to which products or services are ultimately provided under a contract to which a Covered Party is a party.
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Retention Rights
|
This Agreement does not give you the right to be retained or employed by the Company (or any of its Affiliates) in any capacity. The Company (and any Affiliates) reserves the right to terminate your Service at any time and for any reason.
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Shareholder Rights
|
You have the right to vote the Restricted Stock and to receive any dividends declared or paid on such stock. Any distributions you receive as a result of any stock split, stock dividend, combination of shares or other similar transaction shall be deemed to be a part of the Restricted Stock and subject to the same conditions and restrictions applicable thereto.
The Company may in its sole discretion require any dividends paid on the Restricted Stock to be reinvested in shares of Stock, which the Company may in its sole discretion deem to be a part of the shares of Restricted Stock and subject to the same conditions and restrictions applicable thereto. Except as described in the Plan, no adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued.
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Adjustments
|
In the event of a stock split, a stock dividend or a similar change in the Company stock, the number of shares covered by this grant may be adjusted (and rounded down to the nearest whole number) pursuant to the Plan. Your Restricted Stock shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity in accordance with the terms of the Plan.
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Name
|
Jurisdiction of Organization
|
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The KEYW Corporation
|
Maryland
|
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The Analysis Group, LLC (subsidiary of The KEYW Corporation)
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Virginia
|
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Everest Technology Solutions, Inc. (subsidiary of The KEYW Corporation)
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Delaware
|
|
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JKA Technologies, Inc. (subsidiary of The KEYW Corporation)
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Maryland
|
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Forbes Analytic Software, Inc. (subsidiary of The KEYW Corporation)
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Virginia
|
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Flight Landata, Inc.
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Massachusetts
|
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FLI-HI, LLC (subsidiary of Flight Landata, Inc.)
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Massachusetts
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Poole & Associates, Inc. (subsidiary of The KEYW Corporation)
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Maryland
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SenSage, Inc. (subsidiary of The KEYW Corporation)
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California
|
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SenSage International, Inc. (subsidiary of SenSage, Inc.)
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California
|
1.
|
I have reviewed this annual report on Form 10-K of The KEYW Holding Corporation;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: March 12, 2013
|
/s/ Leonard E. Moodispaw
|
|
Leonard E. Moodispaw
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of The KEYW Holding Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 (e) and 15d-15 (e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 12, 2013
|
/s/ John E. Krobath
|
|
John E. Krobath
|
|
Executive and Chief Financial Officer
|
Date: March 12, 2013
|
By:
|
/s/ Leonard E. Moodispaw
|
|
|
Leonard E. Moodispaw
|
|
|
President and Chief Executive Officer
|
Date: March 12, 2013
|
By:
|
/s/ John E. Krobath
|
|
|
John E. Krobath
|
|
|
Chief Financial Officer
|