UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No. )

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Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐	Preliminary Proxy Statement

☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☑	Definitive Proxy Statement

☐	Definitive Additional Materials

☐	Soliciting Material under §240.14a-12

TELOS CORPORATION

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

☑			No fee required
☐			Fee paid previously with preliminary materials
☐			Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

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TELOS CORPORATION

19886 Ashburn Road, Ashburn, Virginia 20147-2358

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held on Tuesday, May 21, 2024

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the “Annual Meeting”) of Telos Corporation, a Maryland corporation (the “Company”), will be held in the Meeting Room at the Company’s headquarters located at 19886 Ashburn Road, Ashburn, Virginia, 20147-2358, on Tuesday, May 21, 2024 at 10:00 a.m. EDT.

The Annual Meeting is being held for the following purposes:

1.	ELECTION OF DIRECTORS: To elect seven Directors to the Board of Directors to serve until the 2025 Annual Meeting of Stockholders or until their successors are elected and qualified;

2.	INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM: To ratify the selection of PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm;

3.	AMENDED AND RESTATED 2016 OMNIBUS LONG-TERM INCENTIVE PLAN: To approve the Amended and Restated 2016 Omnibus Long-Term Incentive Plan of the Company, substantially in the form attached hereto as Exhibit A (the “Amended and Restated Plan”);

4.	ADVISORY VOTE ON EXECUTIVE COMPENSATION: To approve, on an advisory basis, the compensation of the Company’s named executive officers or “say-on-pay”; and

5.	OTHER BUSINESS: To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice.

The Board of Directors has fixed the close of business on March 28, 2024 as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.

We will be using the SEC’s Notice and Access model, which allows us to make the proxy materials available on the Internet as the primary means of furnishing proxy materials to stockholders. On or about April 9, 2024, we will mail to all stockholders a Notice of Internet Availability of Proxy Materials, which contains instructions for accessing our proxy materials on the Internet and voting by telephone or on the Internet. The Notice of Internet Availability of Proxy Materials also contains instructions for requesting a printed set of proxy materials. The Notice of Annual Meeting and Proxy Statement, and the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, are also available at: https://investors.telos.com/.

Your vote is important to us. Whether you plan to participate in the Annual Meeting or not, please be sure to vote. Please vote promptly by telephone or on the Internet by following the instructions on your Notice of Internet Availability of Proxy Materials.

By order of the Board of Directors.

Helen M. Oh, Secretary

Ashburn, Virginia

April 9, 2024

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TELOS CORPORATION

19886 Ashburn Road, Ashburn, Virginia 20147-2358

PROXY STATEMENT

FOR THE ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON May 21, 2024

This Proxy Statement is furnished by Telos Corporation, a Maryland corporation (“Telos”, the “Company”, “we”, “us” or “our”), to the holders of the Company’s Common Stock in connection with the Annual Meeting of Stockholders (“2024 Annual Meeting”) of the Company to be held on May 21, 2024, 10:00 a.m. EDT, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders (“Annual Meeting Notice”).

The Company’s Board of Directors is soliciting proxies from holders of Common Stock, and the voting recommendations are:

Proposal	Items of Business	Recommendation
1	Election of the Directors: John B. Wood (Chairman), David Borland, Bonnie Carroll, Derrick D. Dockery, Brad Jacobs, John W. Maluda, Fredrick D. Schaufeld	“FOR” each of the nominees
2	Ratification of the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024	“FOR”
3	Approve the Amended and Restated 2016 Omnibus Long-Term Incentive Plan	“FOR”
4	To approve, on an advisory basis, the compensation of our named executive officers	“FOR”

The entire cost of soliciting these proxies will be borne by the Company. As needed, the Company will request brokers and others to send proxy forms and other proxy material to the beneficial owners of the Common Stock and reimbursement will be provided for any reasonable expenses incurred in so doing. If we deem necessary, the Company may also request its employees to solicit proxies from the stockholders personally or by telephone. The Company may retain a proxy solicitor to assist in the solicitation of proxies, for which the Company would pay usual and customary fees.

The Annual Meeting Notice, this Proxy Statement and the Annual Report on Form 10-K for the fiscal year ended December 31, 2023 are available at https://materials.proxyvote.com/87969B and on the Company website at http://investors.telos.com.

We are making the proxy materials available to stockholders on the Internet under the SEC’s Notice and Access model. We believe the electronic method of delivery under the Notice and Access model will decrease postage and printing expenses, expedite delivery of proxy materials and reduce our environmental impact, and we encourage you to take advantage of the availability of the proxy materials on the Internet. The Notice of Internet Availability of Proxy Materials includes instructions for accessing the proxy materials and voting by telephone or on the Internet. Stockholders will need their unique control number which appears on their Notice of Internet Availability of Proxy Materials (printed in the box and marked by the arrow), the proxy card and the instructions that accompany the proxy materials in order to access the voting site. Beneficial stockholders who do not have a control number may gain access by logging into their broker, brokerage firm, bank, or other nominee’s (collectively referred to as “Nominee”) website and selecting the shareholder communications mailbox to link through to the 2024 Annual Meeting material. Instructions should also be provided on the voting instruction card provided by your Nominee.

If you would like to receive a full printed set of the proxy materials in the mail, please follow the instructions in the Notice of Internet Availability of Proxy Materials for requesting such materials.

Voting Procedures

Record Date. The record date for determining the stockholders entitled to vote at the 2024 Annual Meeting is March 28, 2024 (“Record Date”). As of the Record Date, there were 73,308,160 shares of Common Stock outstanding and entitled to vote at the 2024 Annual Meeting.

Votes. Each holder of Common Stock is entitled to one vote per share of Common Stock held for Proposals 1 through 4, and any other issue to be decided at the Annual Meeting.

Voting Methods. Instruction on voting is provided in the Notice of Internet Availability of Proxy Materials, which contains instructions for accessing our proxy materials on the Internet and voting by telephone or on the Internet.

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If you hold shares of the Company directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, Inc., you are a “stockholder of record” or “registered stockholder”. If you are a stockholder of record, the Notice of Internet Availability of Proxy Materials has been sent directly to you by the Company or by our representative. If you own your shares indirectly through a Nominee, your shares are said to be held in “street name.” Technically, your Nominee will vote those shares. In this case, the Notice of Internet Availability of Proxy Materials will be forwarded to you by your broker, bank, other financial institution, or other designated representative. Through this process, your bank or broker collects voting instructions from all of its customers who hold shares of the Company and then submits those votes to us.

For shares held in “street name,” when a Nominee does not receive voting instructions from its customers, the question arises whether the Nominee nonetheless has the discretion to vote those shares. For routine matters, NASDAQ gives Nominees the discretion to vote, even if they have not received voting instructions from their customers or the “beneficial owners” of such shares. In this Proxy Statement, only the ratification of our independent registered public accounting firm, PricewaterhouseCoopers LLP, (Proposal 2) is a matter considered routine by NASDAQ. If you are a beneficial owner of shares of our Common Stock, your Nominee will NOT be able to vote your shares with respect to the election of directors (Proposal 1), the approval of the Amended and Restated 2016 Omnibus Long-Term Incentive Plan (Proposal 3), and the approval, on an advisory basis, of the compensation of the Company’s named executive officers (Proposal 4) unless you give your Nominee specific voting instructions. A “broker non-vote” occurs when your Nominee submits a proxy for your shares but does not indicate a vote for a particular proposal because the Nominee does not have the authority to vote on that proposal since the Nominee has not received instructions from you. Broker non-votes and abstentions are counted for purposes of determining whether a quorum is present. Only “FOR” and “AGAINST” votes are counted for purposes of determining the votes cast in connection with each proposal. Therefore, broker non-votes will not be counted as a vote “FOR” the election of directors in Proposal 1 and will have no effect on determining the result of the vote. Broker non-votes and abstentions will not be counted as a vote “FOR” or “AGAINST” Proposals 2 through 4 and will have no effect on the result of the vote.

Quorum and Vote Required. A quorum consists of stockholders representing a majority of the votes by holders of Common Stock entitled to be cast at the 2024 Annual Meeting. Directors are elected by a plurality of the votes cast by the holders of Common Stock if a quorum is present. Only votes cast “FOR” a nominee will be counted in the election of directors. Votes that are withheld with respect to one or more nominees will result in those nominees receiving fewer votes but will not count as a vote against the nominees. The affirmative vote of a majority of votes cast by the holders of Common Stock at the 2024 Annual Meeting if a quorum is present is required to ratify the appointment of the independent registered public accounting firm, to approve the Amended and Restated 2016 Omnibus Long-Term Incentive Plan, and to approve, on an advisory basis, the compensation of the Company’s named executive officers or “say-on-pay.” You have the right to vote “FOR” or “AGAINST,” or to “ABSTAIN” from voting, in connection with Proposals 2 through 4.

Meeting Attendance. Registered holders of the Common Stock who plan to attend the meeting in person should mark the attendance box on their proxy card, and bring a copy of the proxy card with them to the meeting. Ballots will also be available at the meeting. Beneficial owners of the Common Stock that is held by a Nominee must provide adequate proof of ownership. In addition, due to security requirements at the Company’s headquarters, a government issued photo identification will be required for admission to the 2024 Annual Meeting.

Revocation of Proxies. A registered holder of the Common Stock who has provided a proxy to the Company may revoke the proxy at any time before the underlying shares are voted at the 2024 Annual Meeting by:

(1)	Executing a proxy dated later than the most recent proxy given and mailing it to:

Corporate Secretary

Telos Corporation

19886 Ashburn Road

Ashburn, VA 20147

(2)	Appearing in person and voting using a ballot at the Annual Meeting, or

(3)	Filing an instrument of revocation with the Inspector of Elections at the 2024 Annual Meeting.

If shares of the Common Stock are held in the name of a Nominee, the beneficial owner of those shares must contact the Nominee in order to change a vote. The Inspector of Elections will record each vote according to the latest instructions received from the respective stockholder.

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PROPOSAL 1: ELECTION OF DIRECTORS			1
Director Nominees			1
Board Diversity Matrix (as of March 28, 2024)			5
Board of Directors Nomination Process			6
Independence of Directors			6
Certain Relationships and Related Transactions			7
Meetings of the Board of Directors and Committees of the Board of Directors			7
Compensation of Directors			8
Amendments to the Company Bylaws			9
Stockholder Communications with Board of Directors			9
Corporate Governance			9
Corporate Governance Guidelines			10
Information Security and Risk Oversight			10
Environmental, Social and Governance (ESG) Matters			11
Advisory Board			12
PROPOSAL 2: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			14
Report of the Audit Committee			15
PROPOSAL 3: APPROVAL OF AMENDED AND RESTATED 2016 OMNIBUS LONG-TERM INCENTIVE PLAN			16
Summary of 2016 LTIP, as amended			18
PROPOSAL 4: ADVISORY VOTE ON EXECUTIVE COMPENSATION			23
Compensation Discussion and Analysis			23
Executive Summary			24
Compensation Philosophy, Objectives and Processes			25
Compensation Committee Processes			26
Risk Mitigating Features of Compensation			27
Role of the Compensation Consultant			27
Competitive Positioning			27
Elements of Compensation			28
2023 Stockholder Advisory Vote on NEO Compensation			33
Major Adjustments to Our Executive Compensation Program in 2024			34
Management Development and Compensation Committee Report			36
Summary Compensation Table			37
Executive Officers			40
2023 CEO Pay Ratio			41
Pay Versus Performance			42
Security Ownership of Certain Beneficial Owners and Management			46
STOCKHOLDER PROPOSALS FOR THE 2025 ANNUAL MEETING			47
OTHER MATTERS			47
EXHIBIT A			48

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PROPOSAL 1: Election of Directors

The Board of Directors of Telos recommends that the Director Nominees named below be elected by the holders of the Company’s Common Stock.

The election of directors requires a plurality of the voting power of the shares of our Common Stock present in person or represented by proxy at the 2024 Annual Meeting and entitled to vote thereon. Only votes cast “FOR” a nominee will be counted in the election of directors. Broker non-votes and abstentions will not be counted. Votes that are withheld with respect to one or more nominees will result in those nominees receiving fewer votes but will not count as a vote against the nominees.

Director Nominees

The Company’s Board of Directors, upon the recommendation of the Nominating and Corporate Governance Committee, has nominated the following individuals for election as directors by the holders of the Common Stock, to serve until his or her successor is elected and qualified: John B. Wood, David Borland, Bonnie Carroll, Derrick D. Dockery, Brad Jacobs, Maj. Gen. (ret) John W. Maluda, and Fredrick D. Schaufeld. Each of our directors is a United States citizen.

John B. Wood Age \| 60			President, Chief Executive Officer, Chairman of the Board of the Company. Mr. Wood joined the Company in 1992 as Executive Vice President and Chief Operating Officer and in 1994 was named President and Chief Executive Officer (“CEO”) until March 2000, when he was appointed to the newly created position of Executive Chairman of the Board. In 2002, he became Chairman of the Board subsequent to a restructuring of the Board of Directors. In January 2003, Mr. Wood resumed the positions of President and CEO. Prior to joining the Company, Mr. Wood worked on Wall Street for Dean Witter Reynolds, UBS Securities, and his own boutique investment bank. Mr. Wood graduated from Georgetown University where he earned a Bachelor of Science in Business Administration in finance and computer science. Mr. Wood also serves on several advisory boards. As the Chief Executive Officer of the Company, Mr. Wood provides the Board with not only the knowledge of the daily workings of the Company, but also with the essential experience and expertise that can be provided only by a person who is intimately involved in running the Company. Due to Mr. Wood’s broad knowledge and experience with the Company and its offerings, he is considered to have cybersecurity expertise. His experience with the Company’s stockholders, partners, customers, and vendors, resulting from his long tenure with the Company are invaluable to the Board.

David Borland Age \| 76			President, Borland Group, an information technology consulting company, since January 2004. Mr. Borland was elected to the Board of Directors in March 2004 after retiring as Deputy Chief Information Officer (“CIO”) of the U.S. Army with more than 30 years of experience in the U.S. Government. Mr. Borland’s U.S. Army career experience also includes serving as Vice Director of Information Systems for Command, Control, Communications, and Computers; Director of the Information Systems Selection and Acquisition Agency; and numerous other positions. From 1966 through 1970, Mr. Borland served in the U.S. Air Force. Mr. Borland received numerous awards, including the Meritorious Presidential Rank Award for Senior Executive Service Members (1996 and 2003), the Distinguished Presidential Rank Award (2000), and the U.S. Army Decoration for Exceptional Civilian Service (1998 and 2003). Mr. Borland holds a Master’s Degree in Finance from George Washington University. Mr. Borland’s industry experience and extensive service with the U.S. Army and the U.S. Air Force make him a valuable member of the Board of Directors.

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Bonnie Carroll Age \| 66			President and Founder, Tragedy Assistance Program for Survivors (TAPS), a non-profit organization that provides comfort, care, and resources to family members grieving the death of a member of the military, since 1994. Ms. Carroll was elected to the Board in September 2020. Ms. Carroll has also held appointments in the government, including White House Liaison at the Department of Veteran Affairs under President George W. Bush, Executive Assistant to the President for Cabinet Affairs under President Reagan, and the Senior Advisor to the Iraqi Ministry of Communications during Operation Iraqi Freedom. Ms. Carroll retired as a Major in the Air Force Reserve following 31 years of service, where her career included serving as Chief, Casualty Operations, HQ USAF. Prior to joining the USAFR, Maj. Carroll served 16 years as both a noncommissioned officer and then a commissioned officer in the Air National Guard as a Transportation Officer, Logistics Officer, and Executive Officer. Ms. Carroll holds a degree in Public Administration and Political Science from American University and has completed the Harvard University John F. Kennedy School of Government’s Executive Leadership Program on International Conflict Resolution. She is a graduate of several military service schools, including the USAF Logistics Officer Course, Squadron Officers School, Defense Equal Opportunity Management Institute, Academy of Military Science and USAF Basic Training (Honor Graduate). Ms. Carroll received the Presidential Medal of Freedom from President Barack Obama and the Zachary and Elizabeth Fisher Distinguished Civilian Humanitarian Award from the Department of Defense. Ms. Carroll’s extensive service in the military, civilian agencies, and non-profit work serving family members of military service men and woman, and the recognition of her service by the highest level of government, make her a valuable member of the Board of Directors.

Derrick D. Dockery Age \| 43			U.S. Government Affairs at TikTok, a popular video streaming and sharing app, since June 2020. Mr. Dockery was elected to the Board on January 19, 2022. Mr. Dockery is the Co-Founder of Yellow Ribbons United, a non-profit founded in 2013, which leverages professional sports platforms and resources of corporate America to increase awareness of issues affecting retired and active-duty military personnel and their families. From 2013 to 2019, Mr. Dockery worked at the U.S. House of Representatives for Speaker Paul Ryan (2016-2019) as Business and Intergovernmental Coalition Director; Chairman Jason Chaffetz, House Oversight and Government Reform Committee (2015-2016) as Communications and Coalitions Coordinator; and Chairman Paul Ryan, House Budget Committee Office (2013-2015) as Communications Press Assistant. From 2003 to 2013, Mr. Dockery played professional football as an offensive lineman for the Dallas Cowboys, Washington Redskins (now called the Commanders), and the Buffalo Bills. Mr. Dockery holds a Bachelor of Science in Education with a minor in Communications from the University of Texas in Austin, Texas and a Master of Business Administration from George Washington University in Washington, D.C. Mr. Dockery’s experience working in Congress and his relationships in the business community make him a valuable member of the Board of Directors.

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Brad Jacobs Age \| 66			Adjunct Professor at Rollins College in Florida and Consultant since January 2015. Mr. Jacobs was elected to the Board on January 19, 2022. Mr. Jacobs is a consultant for various law firms regarding U.S. Department of Defense and agency bid protests. From November 2000 until September 2014, Mr. Jacobs served in various finance roles at BAE Systems, Inc., which has 43,700 employees worldwide and generated $12 billion in sales in 2013. At BAE Systems, Inc., he held the following positions: Senior Vice President, Finance (March 2009 to September 2014); Vice President, Finance, Mergers & Acquisitions (September 2007 to February 2009); and Vice President, Finance, Electronics & Integrated Solutions Operating Group (November 2000 to August 2007). From March 1992 until November 2000, Mr. Jacobs worked in various management roles at Lockheed Martin Company. Mr. Jacobs also serves on the Board of Tragedy Assistance Program for Survivors (TAPS) and the Jewish Federation for Greater Orlando. Mr. Jacobs holds a Bachelor of Science in Finance (with honors in Economics) from the University of Maryland and a Master of Science in Industrial Administration from Purdue University. Mr. Jacobs’s education, his extensive experience with major defense contractors, and his focus on financial matters within those companies, make him a valuable member of the Board of Directors.

John W. Maluda (Maj. Gen. USAF, Ret.) Age \| 70			Retired, U.S. Air Force Major General. General Maluda was elected to the Board in October 2009. He retired from the U.S. Air Force in September 2009 after more than 34 years of continuous active duty. At the time of his retirement, General Maluda was Director of Cyberspace Transformation and Strategy, in the Office of the Secretary of the Air Force, and Chief Information Officer. In that capacity, he shaped doctrine, strategy, and policy for communications and information activities and served as the functional advocate for 30,000 personnel. Prior to that, General Maluda was Vice Commander, 8th Air Force, at Barksdale Air Force Base, Louisiana. General Maluda enlisted in the Air Force in 1973 and received his commission in 1978 as a distinguished graduate of the ROTC program at Troy State University in Alabama. His career highlights include serving at three major commands, with unified combatant commands, a defense agency, the White House and the Air Staff. General Maluda’s staff experience included positions at Headquarters U.S. Air Force, Air Combat Command, and U.S. Air Force in Europe, Air Force Special Operations Command, U.S. Space Command and the White House Communications Agency. General Maluda holds a Bachelor of Science in Electrical Engineering from Auburn University, a Master’s Degree in Systems Management from the University of Southern California, and Master’s Director Certification from the American College of Corporate Directors, a public company director education and credentialing organization. General Maluda’s comprehensive experience with the U.S. Air Force, cybersecurity expertise as a former CIO, and broad industry insight make him a valuable member of the Board of Directors.

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Fredrick D. Schaufeld

Age | 64

Co-founder and Managing Director of SWaN & Legend Venture Partners (SWaN) since 2006. Mr. Schaufeld was elected to the Board in November 2020. Mr. Schaufeld is a Partner in Monumental Sports and Entertainment, which owns the Washington Capitals (NHL), Wizards (NBA), Mystics (WNBA), Capital City Go-Go (NBA-G) and the Capital One Arena. He is a Partner in the Washington Nationals (MLB), Team Liquid (e-Sports), the Professional Fighters League (PFL) and the Hill Top House Hotel, Harpers Ferry. Mr. Schaufeld also owns American Bike Ride, the parent of DC Bike Ride. Prior to SWaN, Mr. Schaufeld founded and led NEW Corp. (NEW), which was acquired by Asurion (now NEW Asurion) in 2008. Mr. Schaufeld currently sits on the boards of several private companies. Mr. Schaufeld is the recipient of Ernst & Young’s “Entrepreneur of the Year” award, has been nominated to membership in the Horatio Alger Association, and is a member of the Economic Club of Washington, D.C., the Young Presidents Organization (YPO) and its Peace Action Network Arab American Action Forum. Mr. Schaufeld also sits of the board of several charitable organizations, including the Wolf Trap Foundation.

Mr. Schaufeld received his Bachelor’s degree in Government from Lehigh University.

Mr. Schaufeld’s extensive experience in business and finance, as well as his service to various local charitable organizations, make him a valuable member of the Board of Directors.

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Board Diversity Matrix (as of March 28, 2024)

In addition to gender and demographic diversity, we also recognize the value of other diverse attributes that Directors may bring to our Board, including service in the U.S. military. This matrix is the same as the matrix from the prior year.

Total number of Directors	7
Directors who are U.S. military veterans	3
Gender Identity
	Female	Male	Non-binary	Did Not Disclose Gender
Directors	1	6	—	—
Demographic Background
African American or Black	—	1	—	—
Alaskan Native or Native Indian	—	—	—	—
Asian	—	—	—	—
Hispanic or Latinx	—	—	—	—
Native Hawaiian or Pacific Islander	—	—	—	—
White	1	5	—	—
Two or More Races or Ethnicities	—	—	—	—
LBGTQ+	—	—	—	—
Undisclosed	—	—	—	—

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Board of Directors Nomination Process

The Nominating Committee identifies potential candidates for first-time nomination as a director by using a variety of sources such as recommendations from our management, current Board members, stockholders, and contacts in organizations served by the Company. Stockholders may nominate potential candidates by following the procedure set forth in the Company’s Bylaws. This process provides that, in order for nominations or other business to be properly brought before an annual meeting of stockholders by a stockholder, the stockholder must deliver written notice to the Company’s secretary at our principal executive offices not less than sixty (60) days nor more than ninety (90) days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than thirty (30) days or delayed by more than sixty (60) days from such anniversary date, notice by the stockholder to be timely must be so delivered not earlier than the ninetieth (90^th) day prior to such annual meeting and not later than the close of business on the later of the sixtieth (60^th) day prior to such annual meeting or the tenth (10^th) day following the day on which public announcement of the date of such meeting is first made. The Nominating Committee will consider any director nominees submitted by stockholders in accordance with these procedures.

The Nominating Committee conducts an initial review of the potential candidate’s background, including whether the individual meets the minimum qualifications for Board members; whether the individual would be considered independent under the standards adopted by the Company and NASDAQ rules; and whether the individual would meet any additional requirements imposed by law or regulation on members of the Audit and/or Compensation Committees of the Board. Among the requirements considered by the committee for potential candidates are the following: U.S. citizenship; ten (10) years of relevant business experience, preferably having served on the board of directors of a corporation; and familiarity with information technology and security. The Nominating Committee will also consider the number of other public company boards on which a nominee serves. Services in other boards and/or committees should be consistent with the Company’s conflict of interest policies. The Company believes that the Board should reflect a diversity of backgrounds and expertise. The Nominating Committee takes into account diversity considerations in determining nominees for directors and planning for director succession and believes that, as a group, the current directors and nominees bring a diverse range of perspectives to the Board’s deliberations. The evaluation process of a potential candidate’s background will not be treated differently whether or not the individual was nominated by a stockholder.

If the initial candidate review is satisfactory, the Nominating Committee will arrange an introductory meeting with the candidate and the Company’s CEO or other directors to determine the potential candidate’s interest in serving on the Board. If the candidate is interested in serving on the Board and the Nominating Committee recommends further consideration, a comprehensive interview will follow, conducted by the Nominating Committee, the CEO, other members of the Board, and in some cases, key Company executives. Upon successful conclusion of the review process, the Nominating Committee will present the candidate’s name to the Board of Directors for nomination as a director and inclusion in the Company’s Proxy Statement.

Independence of Directors

The Board has determined that each of the individuals nominated to serve on the Board (except for Mr. John B. Wood and General Maluda) has no material relationship with the Company other than in his or her capacity as a director of the Company and that each is “independent” in accordance with the standards of NASDAQ. If all director nominees are elected to serve as our directors, independent directors will constitute a majority of our Board.

In making these determinations, the Board took into account all factors and circumstances that it considered relevant, including, where applicable, the existence of any employment relationship between the director nominee or a member of the director nominee’s immediate family and the Company; whether within the past three years the director nominee has served as an executive officer of the Company; whether the director nominee or a member of the director nominee’s immediate family has received, during any twelve-month period within the last three years, direct compensation from the Company in excess of $120,000; whether the director nominee or a member of the director nominee’s immediate family has been, within the last three years, a partner or an employee of the Company’s internal or external auditors; and whether the director nominee or a member of the director nominee’s immediate family is employed by an entity that is engaged in business dealings with the Company. The Board has not adopted categorical standards with respect to director independence. The Board believes that it is more appropriate to make independence determinations on a case-by-case basis in light of all relevant factors.

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Certain Relationships and Related Transactions

Our policies and practices with respect to related person transactions were adopted on October 25, 2007 and amended on May 14, 2021, and are available on our website at https://investors.telos.com/. Generally, any transaction between the Company and a related person in which the aggregate amount exceeds $120,000 is reviewed and approved by the Audit Committee. For purposes of this policy, a related person is any director or executive officer of Telos, any nominee for director, any holder of 5% or more of the Company’s voting securities, any immediate family members of the foregoing persons, and any firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person has 10% or greater beneficial ownership interest.

Mr. Emmett Wood, the brother of the Chairman and CEO, Mr. John B. Wood, was an employee of the Company from 1996 and held the position of Executive Vice President, Marketing & Strategy until his resignation on February 7, 2023. The amounts earned by Mr. Emmett Wood as total compensation, including stock awards and other benefits, for 2023, 2022 and 2021 were $249,407, $3,045,669, and $4,158,522, respectively. The Company and Mr. Emmett Wood entered into an Amended Employment Agreement on May 13, 2013. This agreement is substantially similar to the employment agreement between the Company and Mr. Mark Griffin, described under the caption “Executive Officer Employment Agreements” beginning on page 31. As of February 8, 2023, Mr. Emmett Wood owned 199,785 vested shares of the Company’s Common Stock, and 9,037 shares of Common Stock held for his benefit in the Company’s 401(k) Shared Savings Plan.

General Maluda, through his entity, JK Maluda LLC, and the Company were parties to a consulting agreement under which General Maluda provided certain consulting services to the Company. For his services from January 1 through June 30, 2023, General Maluda received a grant on January 3, 2023 of Telos’ restricted share units valued at $87,500 (16,849 restricted share units), of which 8,430 shares vested on March 8, 2023 and 8,429 shares vested on May 18, 2023. For services rendered from July 1 to December 31, 2023, the consulting agreement was amended. General Maluda received a retainer of $7,500 per month; $21,000 for attending seven events ($3,000 per event), such as trade shows or customer meetings; and a bonus payment of $25,000 for his role in facilitating the renewal and extension of a specific contract. The consulting agreement between Gen. Maluda and the Company expired on December 31, 2023.

Meetings of the Board of Directors and Committees of the Board of Directors

During the fiscal year ended December 31, 2023, the Board of Directors held five meetings. Each director attended at least 75%, in the aggregate, of all meetings, in person or virtually, of the Board and the respective committees of the Board on which they served.

The Company encourages all directors to attend the annual meeting of stockholders, and submit their proxy cards. All directors, except Ms. Carroll, attended the in-person 2023 Annual Meeting of Stockholders.

The Company has standing Audit, Management Development and Compensation, and Nominating and Corporate Governance Committees.

Audit Committee

The Audit Committee was established to assist the Board of Directors in fulfilling its oversight responsibilities for (1) the integrity of the Company’s financial statements, (2) the Company’s compliance with legal and regulatory requirements, (3) the independent registered public accounting firm’s qualifications and independence, and (4) the performance of the Company’s internal audit function and independent registered public accounting firm. The Audit Committee currently consists of directors Jacobs (chairman), Carroll, and Schaufeld, each of whom is an independent director. In 2023, the Audit Committee met five times. The Audit Committee charter is available on the Company’s website at https://investors.telos.com/. The Board has determined that Mr. Jacobs is an “audit committee financial expert” as defined by the rules adopted by the Securities and Exchange Commission (“SEC”) and is independent.

Management Development and Compensation Committee

The Management Development and Compensation Committee (the “Compensation Committee”) was established for the purpose of reviewing, determining and approving, or recommending to the Board for approval, all forms of compensation to be provided to the Company’s executive officers and directors and any stock compensation to be provided to all employees, directors or consultants. The Compensation Committee currently consists of directors

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Schaufeld (chairman), Borland, Carroll, Dockery, and Jacobs, each of whom is an independent director. Mr. Jacobs was appointed to the committee on March 25, 2024. In 2023, the Compensation Committee met five times. The Compensation Committee charter is available on the Company’s website at https://investors.telos.com/.

The Compensation Committee continued the engagement of Lockton Companies, LLC (“Lockton”) for 2023 as an independent executive compensation advisor and renewed the engagement for 2024. Lockton advises the Compensation Committee on matters relating to benchmarking compensation and designing appropriate compensation programs for our executives, senior officers and directors. As part of its consultation with the Compensation Committee, Lockton assists the Compensation Committee with the selection of an appropriate peer group of companies to use for comparison and benchmarking purposes. The Compensation Committee has direct access to Lockton and control over its engagement, although our executive management, under the direction of the Compensation Committee, interacts with Lockton for the purpose of facilitating the flow of information between the Compensation Committee and Lockton and assisting the Compensation Committee in its work. The Compensation Committee has determined that the work of Lockton and its employees as compensation consultants to the Compensation Committee has not created any conflict of interest.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee (the “Nominating Committee”) was established to assist the Board in: (a) identifying, screening and reviewing individuals qualified to serve as directors and recommending to the Board (i) the director nominees for election at each annual meeting of the Company’s stockholders and (ii) candidates to fill any vacancies on the Board; and (b) developing and recommending to the Board a set of effective corporate governance policies and procedures applicable to the Company and overseeing the implementation of such policies and procedures. In 2022, the Nominating Committee was charged by the Board with oversight of the Company’s environmental, social and governance (“ESG”) strategy. In 2023, the Nominating Committee met two times. On March 13, 2024, the Nominating Committee recommended, and the Board approved, the Corporate Governance Guidelines, which were subsequently published on the Company website. The Nominating Committee currently consists of directors Borland (chairman), Carroll and Dockery, each of whom is an independent director. The Nominating Committee charter is available on the Company’s website at https://investors.telos.com/.

Compensation of Directors

On May 8, 2023, the Compensation Committee recommended, and Board of Directors approved, the three-part pay structure for the directors for 2023. First, each director received $35,000 as a basic retainer, plus $5,000 per committee assignment. Second, each director received a long-term incentive award of 55,555 restricted share units, valued at $100,000 as of the grant date, vesting after one year on May 8, 2024. Third, each director received 50,000 non-qualified stock options (“NSOs”), vesting in one year on May 8, 2024, with a strike price of $1.80, exercisable within ten years of the grant. In addition, the chairpersons of the Audit Committee, Compensation Committee and Nominating Committee received 10,000 NSOs, 8,000 NSOs, and 2,000 NSOs, respectively, under the same terms.

As previously disclosed, General Maluda, through his entity, JK Maluda LLC, and the Company were parties to a consulting agreement under which General Maluda provided certain consulting services to the Company. For his services from January 1 through June 30, 2023, General Maluda received a grant on January 3, 2023 of Telos’ restricted share units valued at $87,500 (16,849 restricted share units), of which 8,430 shares vested on March 8, 2023 and 8,429 shares vested on May 18, 2023. For services rendered from July 1 to December 31, 2023, General Maluda received a retainer of $7,500 per month; $21,000 for attending seven events ($3,000 per event), such as trade shows or customers meetings; and a bonus payment of $25,000 for his role in facilitating the renewal and extension of a specific contract. The consulting agreement expired on December 31, 2023.

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The following table summarizes the director compensation paid during the year ended December 31, 2023, other than for Mr. John Wood (who was not paid separate compensation for his service as a director and whose compensation is described elsewhere in this proxy statement). The directors did not receive any perquisites and the Company made no charitable donations under their names.

DIRECTOR COMPENSATION FOR 2023

Name	Cash Compensation	Stock Award⁽²⁾	Option Awards⁽³⁾	Total
David Borland	$22,500	$ 100,000	$93,600	$216,100
Bonnie L. Carroll	25,000	100,000	90,000	215,000
Derrick D. Dockery	22,500	100,000	90,000	212,500
Brad Jacobs	20,000	100,000	108,000	228,000
John W. Maluda(1)	108,500	100,000	90,000	298,000
Fredrick D. Schaufeld	22,500	100,000	104,400	226,900
TOTAL	$ 221,000	$ 600,000	$ 576,000	$1,397,000

(1)	Includes amount paid pursuant to a consulting agreement with the Company for 2023.

(2)

The grant date fair value of the RSUs granted to each of the directors on May 8, 2023. See assumptions made in the valuation of these awards for financial statement reporting purposes in Note 2 - Summary of Significant Accounting Policies to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

(3)

The grant date fair value of the stock options granted to each of the directors on May 8, 2023, which vest on May 8, 2024 and have an exercise price of $1.80 per share. See assumptions made in the valuation of these awards for financial statement reporting purposes in Note 2 - Summary of Significant Accounting Policies to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These stock options are the only outstanding stock options held by these directors.

Amendments to the Company Bylaws

On November 7, 2023, the Board of Directors approved the amendment and restatement of the Company’s Bylaws, effective as of the date of the approval. The Bylaws were amended to delegate authority to the Board of Directors, rather than the Audit Committee, to establish the compensation of the directors for their service to the Board. The Bylaws were also amended to give stockholders the power to adopt, alter or repeal any provisions of the Bylaws and to make new Bylaws, by the affirmative vote of the majority of votes entitled to be cast on the matter.

Stockholder Communications with Board of Directors

Stockholders wishing to communicate with the Board of Directors should send the communication by mail to the office of the Corporate Secretary (19886 Ashburn Road, Ashburn, VA 20147) who will forward such communication to the appropriate committee of the Board of Directors or to the individual director. There have been no changes in the procedures by which stockholders may recommend nominees to our Board of Directors.

Corporate Governance

Our Board and management are committed to sound corporate governance. In keeping with sound corporate governance practices, we maintain a majority of independent directors on the Board of Directors.

Mr. John B. Wood is both the Chairman of the Board of Directors and the Chief Executive Officer of the Company. Our policy as to whether the roles of the Chairman and the Chief Executive Officer should be separate is to adopt the practice that best serves the Company’s needs at any particular time. The Board of Directors believes that combining the Chairman and Chief Executive Officer positions is currently the most effective leadership structure and is in the best interest of the Company’s stockholders because of Mr. Wood’s long tenure with the Company, including as the Chief Executive Officer, and his broad knowledge and experience with our customers, partners and vendors and in the field of cybersecurity. The Board may decide to separate and later combine the roles of Chairman and Chief Executive Officer, if appropriate, at any time in the future. We do not have a lead independent director.

The Board of Directors has adopted a Code of Ethics and Business Conduct applicable to our Chief Executive Officer, Chief Financial Officer, and Controller. The Code of Ethics and Business Conduct is available on our website at https://investors.telos.com/. In the event that the Board of Directors amends our Code of Ethics and Business Conduct or grants a waiver from the Code of Ethics and Business Conduct, we will provide timely notice of such amendment

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or waiver on our website. In addition, our Board has adopted a Code of Ethics and Standards of Conduct to ensure that the Company adheres to ethical standards and obeys all applicable laws. The Code of Ethics and Standards of Conduct applies to the Company and to all of its subsidiaries, domestic and foreign, and all employees, consultants, officers and directors thereof. The Code of Ethics and Standards of Conduct is available on our website at https://investors.telos.com/.

Corporate Governance Guidelines

The Board of Directors adopted the Governance Guidelines (“Guidelines”) on March 13, 2024 to ensure a common set of expectations as to how the Board, its various committees, individual directors, and management should perform their functions, and how the Board should exercise its oversight responsibility to serve the best interest of the Company in a manner that is consistent with the Board’s duties. The Guidelines serve as a flexible framework within which the Board may conduct its business, not as a set of binding legal obligations. If a conflict arises between the provisions of the Guidelines and the Charter or Bylaws of the Company, the Charter or Bylaws, as applicable, will govern. The Guidelines are available on the Company website at https://investors.telos.com/.

Information Security and Risk Oversight

As part of its general responsibility to manage the Company’s business, the Board of Directors has oversight responsibility with respect to risk management. The Board reviews matters of macro-economic, political, business, supply chain, climate and competitive risk directly with management as part of management’s regular Board reporting. The Board also receives regular updates from the Company’s legal department concerning legal and certain compliance risks. The Compensation Committee is responsible for overseeing risk associated with the Company’s compensation programs. The Board of Directors has delegated responsibility for risk oversight of the balance of the Company’s significant areas of risk to the Audit Committee, including financial risk, internal control over financial reporting, audit, certain compliance requirements, and information security and cybersecurity risk. In accordance with its charter, the Audit Committee discharges these responsibilities through various processes, including the use of an independent third party to assist the Company with internal audits and other third-party advisers as and when it deems appropriate, and discusses with management the Company’s major policies with respect to risk assessment and risk management. The Audit Committee regularly reports the results of these discussions to the Board of Directors. Our Chief Information Security Officer (“CISO”) reports to the Audit Committee at each regular Audit Committee meeting on the status of cybersecurity risk assessment, identification and management, as well as reporting information security incidents as they occur, if material, and providing periodic briefings about our information security program, our internal response preparedness, and assessments led by outside auditors. The Chair of the Audit Committee, in turn, reports on these topics to the Board of Directors as and when deemed necessary and/or material. Overall, our Board contains two directors with work experience related to cybersecurity issues or oversight.

We rely heavily on our technology and infrastructure, as well as the public cloud to an increasing degree, to provide our products and services to our customers. As a result, we have developed an ISO/ICE 27001-certified Information Security Management System (“ISMS”) to enhance our corporate security measures, identify and mitigate information security risks, and protect and preserve the confidentiality, integrity, and continued availability of all information owned by the Company and that of its customers and suppliers in our control. Our ISO certification can be verified on the BSI Group website using certificate number IS 64920.

Our ISMS includes developing, implementing, and continually improving policies and procedures to safeguard information and ensure the availability of critical data and systems. These policies cover areas such as requiring secure coding practices and a secure development lifecycle process, monthly information security awareness training for all employees and enhanced training for specialized personnel, review and assessment by external, independent third parties, who certify and report on our weaknesses and internal response preparedness for the entire Company, and the performance of daily vulnerability scanning of our network infrastructure as well as annual third-party penetration testing.

Our cybersecurity risk assessment, identification, and management process consist of a dedicated Governance Risk and Compliance (“GRC”) team, within our Information Security organization, that implements a repeatable, ISO/IEC 27001-compliant methodology to asses and track cybersecurity risk. This team, reporting to and working with the CISO, identifies, tracks, and updates cybersecurity risks that threaten the Company directly and through third parties. The GRC team collaborates closely with risk owners throughout the company, vendors, and suppliers, working with them in an effort to ensure their risks are identified, documented, and mitigated in a timely fashion.

In addition to our active ISO/ICE 27001 certification, the Company also assesses itself against the National Institute

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of Standards and Technology Special Publication 800-171 as required by the Defense Federal Acquisition Regulation Supplement (“DFARS”). In accordance with our ISMS, we also actively monitor known threats that could affect our products and services and work with our suppliers to provide us with real-time reports of threats or vulnerabilities that may affect our enterprise-wide systems. Our program also includes a cyber incident response plan that provides controls and procedures for timely and accurate reporting of any material cybersecurity incident as well as a business continuity plan that provides a clear framework for how the Company can continue in the event of any significant disruption to ensure that we can offer the same level of security, support, and excellence to all our customers. In the normal course, our Security and GRC teams engage assessors, consultants, and other third parties to assist in various cyber-related matters. For example, to maintain our ISO certification, the Company utilizes an external third party to conduct yearly audits of its ISMS. Our Information Security organization also leverages third-party advisors, as appropriate, for various tasks such as conducting annual third-party penetration testing.

In 2023, we conducted an enterprise risk assessment that included an assessment of cybersecurity risk in context with other enterprise-level risks. Furthermore, our CISO and our General Counsel regularly discuss cybersecurity risk mitigation. We carry errors and omissions insurance that provides some protection against the potential losses arising from a cybersecurity incident.

In the last three years, we have not experienced a material information security breach incident or any penalties or settlements related to the same, and the expenses we have incurred from information security breach incidents were immaterial.

Environmental, Social and Governance (ESG) Matters

Our Board and management believe that operating our business in line with solid governance principles and in a socially and environmentally responsible manner furthers our core values and creates the greatest value for our stakeholders. We further believe that our environmental, social and governance priorities should support sustainable long-term financial performance.

Our Nominating and Governance Committee of the Board oversees our ESG matters. In 2023, the committee’s charter was amended by the Board to reflect this responsibility. In 2022, we formed an ESG task force to address contractual and other compliance requirements in the ESG sphere, as well as the Company’s overall ESG strategy, including greenhouse gas reduction, industry-relevant ESG reporting, and the process by which we assess certain ESG risks and opportunities.

The Company publicly reports certain climate change-related information via CDP and provides public sustainability disclosures using the SASB Software & IT Service Standard. By making these disclosures, however, we have not concluded that the information disclosed is material to our business. We do not own or operate data centers. Many of our solutions are cloud-based or are designed to facilitate our customers’ secure cloud usage or cloud migration, thereby fostering sustainable energy use.

Our management team is committed to maintaining a corporate culture that fosters mutual respect and job satisfaction for our people while delivering innovation and value to customers and shareholders. This commitment is reflected in our core values:

Always with integrity, at Telos we:

Build trusted relationships,

Work hard together,

Design and deliver superior solutions, and

Have fun doing it.

We value diversity and inclusion and are committed to providing a work environment that is free of discrimination and harassment, where our employees can do their best work, bring their whole self to work, feel supported and in turn support others. We strive to create a working environment where everyone feels included and respected and has an equal opportunity to contribute.

For more information on our human capital resources, please see our 2023 annual report on Form 10-K.

Consistent with our first core value – integrity – we have established and published a Partner Code of Conduct to address the business ethics of those with whom we collaborate, and a Global Anti-Human Trafficking Policy to reinforce that Telos will not and does not tolerate or condone human trafficking in any part of its organization or business relationships. Our business is conducted in accordance with our published Code of Ethics and Standards of

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Conduct. Furthermore, in 2022 the Board adopted a Clawback Policy to ensure that executive compensation premised upon financial performance aligns with that performance.

In one form or another, our solutions are entirely dedicated to protecting our customers’ people, information and digital assets, and we take pride in producing products and services in support of that socially beneficial goal. We acknowledge that information and data security are of paramount importance to our business and our customers – to that end, we are focused on improving our information security practices and mitigating information security risk. For more information on our information security, see the Information Security and Risk Oversight section of this Proxy Statement.

Advisory Board

On May 13, 2020, we formed the Advisory Board of Telos (the “Advisory Board”), which serves as advisors to the Company’s management team and the Board of Directors in the conduct of the Company’s business and the pursuit of its strategic objectives. Membership on the Advisory Board is determined by the Board of Directors, and once appointed to the Advisory Board, members of the Advisory Board serve until the earlier of their resignation, removal, the appointment of their replacement, or the end of a set term.

The Board of Directors has delegated to the Compensation Committee the responsibility to evaluate potential candidates for the Advisory Board, the terms upon which such candidates would serve including compensation for their service, and to recommend both appropriate candidates and terms for approval by the Board of Directors.

Responsibilities of members of the Advisory Board include:

•	Providing counsel and advice as may be requested from time to time.

•	Providing opinions to assist the Company in identifying and, in coordination with the Company’s management team, pursuing opportunities related to potential sales, technical issues, product development, marketing, strategic direction, and other matters.

•	Keeping the Company updated on technological, competitive and other changes and developments pertinent to the business of the Company.

•	Contributing to support the Company’s objectives.

The Advisory Board meets periodically pursuant to the needs or opportunities of the business of the Company. The chairperson of the Advisory Board is responsible for calling and convening such meetings. All members of the Advisory Board serve as independent contractors engaged solely to consult with the Company’s management team and Board of Directors, with no duties with respect to the management of the company or authority to bind the Company or act on its behalf. Each member of the Advisory Board enters into an agreement with the Company which governs the relationship between the Company and such member.

On May 13, 2020, the Company appointed General (Ret.) Keith Alexander to the Advisory Board as its inaugural member. General Alexander serves as a strategic partner and provides the Company with advice on key cybersecurity objectives and initiatives. General Alexander was the Founder, Chairman, CEO and President of IronNet Cybersecurity. General Alexander previously served as director of the National Security Agency, chief of the Central Security Service and commander of the United States Cyber Command, where he led DoD agencies during the conflicts in Afghanistan and Iraq at a time when cyber-attacks against the United States were on the rise. General Alexander also serves on the board of directors of Amazon.com, Inc. General Alexander’s initial term on the Advisory Board expired in May 2023. On May 8, 2023, the Board approved the appointment of General Alexander to the Advisory Board as its Chairman for another one-year term from June 1, 2023 through May 31, 2024.

On May 1, 2022, Mr. Richard Tracy was appointed to the Advisory Board for a term of one year. Mr. Tracy was appointed to the Advisory Board due to his many years of service to the Company and his in-depth knowledge of information security and our Xacta^® suite of products. Mr. Tracy joined the Company in October 1986 and held a number of management level positions, including Chief Security Officer and Chief Technology Officer, until his retirement in April 2022. Mr. Tracy pioneered the development of innovative and highly scalable enterprise risk management technologies that have become industry-leading solutions within the federal government and the financial services industry. On May 8, 2023, the Board approved the appointment of Mr. Tracy to the Advisory Board for another one-year term from June 1, 2023 through May 31, 2024.

On May 8, 2023, the Board approved the appointment of Mr. Doug Dillard to the Advisory Board for a term of one year, from June 1, 2023 through May 31, 2024. Mr. Dillard is the managing partner of Slewgrass Capital LLC with

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extensive contacts in Silicon Valley. He is also an active member of Hoya ID Fund LLC, a former member of Telos Identity Management Solutions, LLC, and is very knowledgeable in the identity and biometric industry. Mr. Dillard is a valuable asset to the directors, executives and senior managers of the Company.

For his service on the Advisory Board, General Alexander received a grant of 100,000 shares of Class A Common Stock of the Company on May 13, 2020. In accordance with the vesting schedule, 25% vested immediately upon grant and then 25% vested on each of the next three anniversary dates of the grant. On June 23, 2022, Mr. Tracy received a grant of 25,000 restricted share units that settle in shares of Common Stock as compensation for his services on the Advisory Board, and these restricted share units vested on May 18, 2023. For their term beginning in May 2023, General Alexander received a grant of 30,000 non-qualified stock options and Mr. Tracy and Mr. Dillard each received 25,000 non-qualified stock options. The options are all scheduled to vest on May 8, 2024, with a strike price of $1.80, and are exercisable up to ten years from the grant date.

The Advisory Board met in November 2023. Mr. Wood and Mr. Griffin, Executive Vice President, Security Solutions, were also present at the meeting. Each Advisory Board member is also available to the various business leads. For instance, the Company’s chief product officer for Xacta frequently confers with Mr. Tracy to seek his guidance and expertise on various issues related to the Xacta suite of products.

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PROPOSAL 2: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors of Telos recommends that the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the 2024 fiscal year be ratified by the holders of the Common Stock.

The Audit Committee selected PricewaterhouseCoopers LLP (“PwC”) to serve as the Company’s independent registered public accounting firm for the 2024 fiscal year. The ratification of the selection of PwC requires a majority of the votes cast at the Annual Meeting. Holders of Common Stock have the right to vote “FOR” or “AGAINST”, or to “ABSTAIN” from voting in connection with Proposal 2. Abstentions on Proposal 2 will have no effect on the results of the vote.

On June 6, 2022, the Company notified BDO USA, LLP (“BDO”) that the Company was dismissing BDO as its independent registered public accounting firm effective immediately. The Company engaged PWC as its independent registered public accounting firm for its second quarter ended June 30, 2022 and its fiscal year ended December 31, 2022. The decision to dismiss BDO and to engage PwC was approved by the Audit Committee of the Company’s Board of Directors.

The reports of BDO on the consolidated financial statements for the Company for each of the fiscal years ended December 31, 2021 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that BDO’s audit report dated March 28, 2022, on the Company’s internal control over financial reporting as of December 31, 2021 expressed an adverse opinion thereon. The adverse opinion was the result of identified material weaknesses described in Item 9A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 10-K”).

During the Company’s fiscal year ended December 31, 2021 and the subsequent interim periods through the date of dismissal, there were no disagreements with BDO on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which, if not resolved to the satisfaction of BDO, would have caused it to make reference to the subject matter of the disagreements in connection with its reports on the financial statements for those periods.

For the fiscal year ended December 31, 2021 and through the date of dismissal, there were no “reportable events” as that term is described in Item 304(a)(1)(v) of Regulation S-K, except that, as disclosed in the 2021 Form 10-K, the Company’s management did not maintain effective internal control over financial reporting as of December 31, 2021, as a result of the material weaknesses identified.

During the fiscal year ended December 31, 2021 and through June 6, 2022, neither the Company, nor anyone acting on its behalf, consulted with PwC with respect to (1) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that would have been rendered on the Company’s consolidated financial statements, and neither a written report nor oral advice was provided that PwC concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing, or financial reporting issue; or (2) any matter that was either the subject of a disagreement (as that term is used in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).

PwC is expected to attend the Annual Meeting and will be given an opportunity to make a statement and will be available to respond to appropriate questions.

Principal Accountant Fees and Services

Aggregate fees for professional services billed to us by PwC and BDO for the years ended December 31, 2023 and December 31, 2022 are summarized as follows:

	2023	2022
PricewaterhouseCoopers LLP:
Audit fees⁽¹⁾	$1,205,000	$1,247,100
All other fees⁽²⁾	2,000	2,900
Total	1,207,000	$1,250,000

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	2023	2022
BDO USA, LLP:
Audit fees⁽³⁾	50,000	591,000
Tax fees⁽⁴⁾		149,000
Total	$50,000	$740,000

(1)

Audit fees for 2023 include fees for the annual audit, including the integrated audit of internal control over financial reporting, the review of the Company’s quarterly reports on Form 10-Q and fees for various SEC filings. Audit fees for 2022 include fees for the annual audit, including the integrated audit of internal control over financial reporting and the review of the Company’s quarterly reports on Form 10-Q for the second and third quarters.

(2)	Fees consist of PwC technical accounting and financial statement disclosure guidance/research tools.

(3)

Audit fees for 2023 includes fees for various SEC filings. Audit fees for 2022 includes fees for the review of the Company’s quarterly report on Form 10-Q for the first quarter, fees related to the transition to PwC including a $25,000 fee for access to BDO’s workpapers, and a $500,000 fee charged for consent and re-issuance of BDO’s 2021 audit opinion for inclusion in the 2022 Form 10-K.

(4)	Represent fees related to the review of federal and state income tax returns and other tax-related services.

Pre-Approval Policies and Procedures

The Audit Committee pre-approves all services, including audit and non-audit services, provided by the Company’s independent registered public accounting firm. These services may include audit services, audit-related services, tax services and other services. The independent registered public accounting firm typically provides an engagement letter to the Audit Committee outlining the scope of the services and related fees. Approval by the Audit Committee may be made at its regularly scheduled meetings or otherwise, including by telephonic or other electronic communications.

Report of the Audit Committee

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process, including internal control over financial reporting. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited financial statements for the fiscal year ended December 31, 2023, including the quality and acceptability of accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements included in the Company’s Annual Report on Form 10-K.

The Audit Committee discussed with the independent registered public accounting firm, who is responsible for expressing an opinion on conformity of those audited financial statements with U.S. generally accepted accounting principles, the firm’s judgment as to the quality and acceptability of the Company’s accounting principles and such other matters as are required to be discussed with the independent registered public accounting firm under the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. In addition, the Audit Committee discussed with the independent registered public accounting firm the firm’s independence from management and the Company and received the written disclosures and the letter from the independent accountant required by applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence. The Audit Committee also considered whether the provision of non-audit related services by the independent registered public accounting firm was compatible with maintaining the firm’s independence and found it to be acceptable.

In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for filing with the SEC.

Brad Jacobs, Chairman

Bonnie L. Carroll

Fredrick D. Schaufeld

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PROPOSAL 3: APPROVAL OF AMENDED AND RESTATED 2016 OMNIBUS LONG-TERM INCENTIVE PLAN

The Board of Directors of the Company has approved the Amended and Restated 2016 Omnibus Long-Term Incentive Plan and recommends its approval to the Stockholders.

On March 13, 2024, the Board of Directors of the Company approved the Amended and Restated 2016 Omnibus Long-Term Incentive Plan (“Amended and Restated Plan”) to i) increase the number of shares available for issuance by eight million five hundred thousand (8,500,000) shares, and ii) clarify that certain Shares (as defined) subject to an Award may not again be made available for issuance under the Plan, subject to the approval of the stockholders at the 2024 Annual Meeting. No other substantive amendments are being proposed to the 2016 Omnibus Long-Term Incentive Plan (“2016 LTIP”) other than the share increase and “recycling” prohibition clarification described above. The Amended and Restated Plan is substantially in the form attached hereto as Exhibit A. Approval of the Amended and Restated Plan requires the affirmative vote of a majority of votes cast. Holders of Common Stock have the right to vote “FOR”, “AGAINST”, or to “ABSTAIN” from voting in connection with Proposal 3.

The Company believes that the approval of the Amended and Restated Plan is critical in our efforts to recruit and retain key employees who are important to our continued growth. Equity awards are an essential compensation component to attract top talent and any hindrance to our ability to grant awards under the 2016 LTIP will have a negative impact on our performance. Further, if the Amended and Restated Plan is not approved, there will be insufficient shares available for issuance under the 2016 LTIP and, therefore, the Company will have to take alternative strategic actions, such as increasing the cash component of employee compensation to retain and motivate our current employees and recruit the necessary talent and skill sets to the Company. This could impair the operating cash flow and/or the ability to attract and retain the individuals necessary to drive performance results that increase long-term stockholder value. Thus, the Company believes that this proposal is entirely in the best interests of its stockholders.

Once approved, the Amended and Restated Plan will become effective on the date of the 2024 Annual Meeting, and the available shares for issuance will increase by 8,500,000 shares. We believe this request is reasonable in light of the current stock price and our business growth initiatives for 2024 and going forward. These additional shares combined with those previously granted but not vested and those available for issuance under the 2016 LTIP would represent approximately 16.6% of our outstanding Common Stock, if all of the shares were issued under the 2016 LTIP.

The number of shares of Common Stock outstanding, granted, vested and forfeited in 2023 are as follows:

Restricted Stock Activity	Time-Based RSU	Performance- Based RSU	Total	Weighted-Average Grant Date Fair Value
Unvested outstanding units as of December 31, 2022	3,570,082	336,785	3,906,867	$19.53
Granted	1,888,689	—	1,888,689	2.17
Vested	(2,910,645)	—	(2,910,645)	19.04
Forfeited	(415,513)	(292,985)	(708,498)	19.11
Unvested outstanding units as of December 31, 2023	2,132,613	43,800	2,176,413	$5.07

Stock Option Activity	Stock Option Outstanding	Weighted Average Exercise Price	Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value
Outstanding option balance as of December 31, 2022	—	$—	—	$—
Granted	400,000	1.80	—	—
Exercised	—	—	—	—
Forfeited, cancelled, expired	—	—	—	—
Outstanding option balance as of December 31, 2023	400,000	1.80	9.4	740,000
Exercisable stock options as of December 31, 2023	—

TABLE OF CONTENTS

The Board of Directors considered the historical numbers of time-based and performance-based restricted share units granted starting in 2021, after the November 18, 2020 IPO event.

Annual Share Usage			2021			2022			2023

SEC Form DEF 14A filed by Telos Corporation