<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
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))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule
14a-12
CONDOR TECHNOLOGY SOLUTIONS, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or
schedule and the date of its filing.
(1) Amount previously paid:
----------------------------------------------------------
(2) Form, schedule or registration statement no.:
----------------------------------------------------------
(3) Filing party:
CONDOR TECHNOLOGY SOLUTIONS, INC.
----------------------------------------------------------
(4) Date Filed:
4/10/00
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</TABLE>
<PAGE>
CONDOR TECHNOLOGY SOLUTIONS, INC.
170 JENNIFER ROAD
SUITE 325
ANNAPOLIS, MARYLAND 21401
April 12, 2000
Dear Stockholders:
It is my pleasure to invite you to the 2000 Annual Meeting of Stockholders
of Condor Technology Solutions, Inc. to be held on Tuesday, May 16, 2000 at
10:00 a.m., Eastern Daylight Time, at the offices of the Company at 170 Jennifer
Road, Suite 325, Annapolis, Maryland.
At the meeting, we will report on important activities and accomplishments
of the Company and review the Company's financial performance and business
operations. You will have an opportunity to ask questions and gain an up-to-date
perspective on your Company and its activities. You will also have an
opportunity to meet your directors and other executives of the Company.
The meeting will also be devoted to the election of three Class III
directors, approval of a new Employee Stock Purchase Plan, approval of
PricewaterhouseCoopers LLP as the independent accountants for 2000, and
consideration of other business matters properly brought before the meeting.
Whether or not you plan to attend, and regardless of the number of shares
you own, it is important that your shares be represented at the Annual Meeting.
I therefore urge you to complete, sign, date and return your proxy promptly in
the enclosed envelope. Your return of a proxy in advance will not affect your
right to vote in person at the Annual Meeting.
I hope that you will attend the Annual Meeting. The officers and directors
of the Company look forward to seeing you at that time.
Very truly yours,
/s/ Kennard F. Hill
Kennard F. Hill
Chairman of the Board, President and
Chief Executive Officer
<PAGE>
CONDOR TECHNOLOGY SOLUTIONS, INC.
170 JENNIFER ROAD
SUITE 325
ANNAPOLIS, MARYLAND 21401
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, MAY 16, 2000
To our Stockholders:
The Annual Meeting of Stockholders of Condor Technology Solutions, Inc. will
be held on Tuesday, May 16, 2000, at 10:00 a.m. EDT at the offices of the
Company at 170 Jennifer Road, Suite 325, Annapolis, Maryland, for the following
purposes:
1. To elect three Class III directors, each for a term of three years
and until their respective successors have been elected and qualified;
2. To consider and vote upon a proposal to approve the adoption of a new
Employee Stock Purchase Plan;
3. To ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent accountants for 2000; and
4. To transact such other business as may properly come before the
Meeting.
Stockholders of record at 5:00 p.m. EST on March 31, 2000 are entitled to
receive notice of and to vote at the Meeting.
You are cordially invited to attend the Meeting. Please carefully read the
attached Proxy Statement for additional information regarding the matters to be
considered and acted upon at the Meeting.
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING IN PERSON, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED
ENVELOPE. No postage need be affixed to the return envelope if mailed in the
United States. If you attend the Meeting, you may withdraw your proxy and vote
in person by ballot.
/s/ John F. McCabe
John F. McCabe
Vice President, General Counsel
and Secretary
Annapolis, Maryland
April 12, 2000
<PAGE>
CONDOR TECHNOLOGY SOLUTIONS, INC.
170 JENNIFER ROAD
SUITE 325
ANNAPOLIS, MARYLAND 21401
------------------------
PROXY STATEMENT
This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders and Proxy Card are being furnished in connection with the
solicitation by the Board of Directors of Condor Technology Solutions, Inc. (the
"Company") of proxies to be voted at the Annual Meeting of Stockholders
scheduled to be held on Tuesday, May 16, 2000, at 10:00 a.m. EDT, at the offices
of the Company at 170 Jennifer Road, Suite 325, Annapolis, Maryland, and any
adjournment or postponement thereof (the "Meeting"). This Proxy Statement and
the enclosed Proxy Card are being furnished on or about April 12, 2000, to all
holders of record of the Company's Common Stock as of 5:00 p.m. EST on
March 31, 2000. A copy of the Company's 1999 Annual Report to Stockholders
accompanies this Proxy Statement.
At the Meeting, Stockholders will elect three Class III directors, each to
serve for a term of three years. Stockholders will also act upon proposals to
adopt a new Employee Stock Purchase Plan and to ratify the appointment of
PricewaterhouseCoopers LLP as the Company's independent accountants for 2000.
VOTING SECURITIES AND RECORD DATE
The Board of Directors has fixed 5:00 p.m. EST on March 31, 2000 as the
record date (the "Record Date") for determination of Stockholders entitled to
notice of and to vote at the Meeting. As of the Record Date, there were
15,218,430 shares of Common Stock issued and outstanding and there were no other
voting securities of the Company outstanding. Each outstanding share of Common
Stock entitles the record holder thereof to one vote.
VOTING RIGHTS AND SOLICITATION OF PROXIES
Eligible stockholders of record may vote at the Meeting in person or by
means of the enclosed Proxy Card. You may specify your voting choices by marking
the appropriate boxes on the Proxy Card. The proxy solicited hereby, if properly
signed and returned to the Company and not revoked prior to or at the Meeting,
will be voted in accordance with the instructions specified thereon. If you
properly sign and return your Proxy Card, but do not specify your choices, your
shares will be voted by the proxy holders as recommended by the Board of
Directors.
The Board of Directors encourages you to complete and return the Proxy Card
even if you expect to attend the Meeting. You may revoke your proxy at any time
before it is voted at the Meeting by giving written notice of revocation to the
Secretary of the Company, by submission of a proxy bearing a later date or by
attending the Meeting in person and casting a ballot.
The proxy holders, Kennard F. Hill and John F. McCabe, will vote all shares
of Common Stock represented by Proxy Cards that are properly signed and returned
by stockholders. The Proxy Card also authorizes the proxy holders to vote the
shares represented with respect to any matters not known at the time this Proxy
Statement was printed that may properly be presented for consideration at the
Meeting. YOU MUST RETURN A SIGNED PROXY CARD IF YOU WANT THE PROXY HOLDERS TO
VOTE YOUR SHARES OF COMMON STOCK.
Abstentions and broker non-votes are not counted as votes cast on any matter
to which they relate. A "non-vote" occurs when a nominee holding shares for a
beneficial owner votes on one proposal, but
1
<PAGE>
does not vote on another proposal because the nominee does not have
discretionary voting power and has not received instructions from the beneficial
owner.
The cost of soliciting proxies will be borne by the Company. Following the
mailing of proxy solicitation materials, proxies may be solicited by directors,
officers and employees of the Company and its subsidiaries personally, by
telephone or otherwise. Such persons will not receive any fees or other
compensation for such solicitation. In addition, the Company will reimburse
brokers, custodians, nominees and other persons holding shares of Common Stock
for others for their reasonable expenses in sending proxy materials to the
beneficial owners of such shares and in obtaining their proxies.
PROPOSAL 1--ELECTION OF DIRECTORS
The Amended and Restated By-Laws of the Company (the "By-Laws") provide that
the Company's business shall be managed under the direction of a Board of
Directors, with the number of directors to be fixed by the Board of Directors
from time to time. The Board of Directors has fixed the number of directors
which shall constitute the entire Board of Directors at seven.
Pursuant to the Company's Amended and Restated Certificate of Incorporation,
the Company's Board of Directors is divided into three classes: Class I,
Class II and Class III, each class being as nearly equal in number as possible.
The directors in each class serve terms of three years and until their
respective successors have been elected and qualified. There are presently two
directors in each of Class I and Class II and three directors in Class III.
The term of office of one class of directors expires each year in rotation
so that one class is elected at each annual meeting of stockholders for a three
year term. The term of the three Class III directors, Ann Torre Grant, Kennard
F. Hill and William M. Newport, will expire at the Meeting. The other four
directors will remain in office for the remainder of their respective terms, as
indicated below.
Director candidates are nominated by the Board of Directors. Stockholders
are also entitled to nominate director candidates for the Board of Directors in
accordance with the procedures set forth in the By-Laws.
Each of the nominees for election as a Class III director has consented to
being named as a nominee for director of the Company and has agreed to serve if
elected. In the event that any of the nominees should become unavailable or
unable to serve as a director, the persons named as proxies on the Proxy Card
will vote for the person(s) the Board of Directors recommends.
Set forth below is certain information regarding each nominee for Class III
director and each Class I and Class II director, whose term of office will
continue after the Meeting.
NOMINEES FOR CLASS III DIRECTORS
Kennard F. Hill, 59, has been Chief Executive Officer and a director of the
Company since January 1997 and President since October 30, 1999. Mr. Hill became
Chairman of the Board of the Company upon the closing of the initial public
offering of the Company's common stock in February 1998. From January 1997 to
February 1998, Mr. Hill also served as President of the Company. Mr. Hill was
Group President of I-NET, Inc., a network computing and systems integration
services company, from September 1995 to December 1996. From June 1993 to
June 1995, Mr. Hill was President and Chief Executive Officer of Insource
Technology, Inc., an IT consulting firm. From June 1992 to June 1993, Mr. Hill
was a private consultant on client/server acquisition strategy in the healthcare
industry. From 1988 to July 1992, Mr. Hill was Chief Executive Officer of
DataLine Inc., a data processing and IT firm. From 1968 to 1988, Mr. Hill was
employed by Electronic Data Systems Corporation ("EDS"), a full-service IT
provider. He served as President of General Motors-EDS for North America from
1985 to 1988. At EDS, Mr. Hill also served as chief of the Healthcare Division,
2
<PAGE>
having previously served as its Director of Sales. Mr. Hill also was an officer
of EDS's Federal Corp. subsidiary and a director of its National Heritage
Insurance Corp. subsidiary, which provides healthcare underwriting for
lower-income policyholders. Mr. Hill serves on the board of directors of
Employee Solutions, Inc., an employee outsource services provider. Mr. Hill
attended the University of Texas and served two tours of duty as a United States
Army pilot in Vietnam.
Ann Torre Grant, 42, has been a director of the Company since March 1998.
Ms. Grant has been a strategic and financial consultant since December 1997.
Ms. Grant was Executive Vice President, Chief Financial Officer and Treasurer of
NHP, Incorporated ("NHP"), a multifamily property management company, from
February 1995 until the sale of NHP in December 1997. From 1989 to
February 1995, Ms. Grant held various corporate finance positions with US
Airways, serving as Vice President and Treasurer from 1991 to 1995. From 1983 to
1988, Ms. Grant held various corporate finance positions with American Airlines.
Ms. Grant is a director of SLM Holding Co. and its subsidiary, Sallie Mae, of
the Franklin Mutual Series Funds and of U S A Floral Products, Inc. Ms. Grant
received a bachelor in business administration from the University of Notre Dame
and a masters in business administration from Cornell University.
William M. Newport, 64, has been a director of the Company since
February 1998. In addition, Mr. Newport has been a Director and Chairman of the
Audit Committee of the Corporation for National Research Initiatives, a
non-profit national information infrastructure research and development
organization, since 1990. Mr. Newport has been a director of Authentix
Network, Inc., a privately held company engaged in providing roaming fraud
prevention services and wireless e-mail to the wireless telecommunications
industry, since July 1996. Mr. Newport has been the Chairman of the Board of
Ursus Telecom Corporation, a public international telecommunications service
company, since April 1998. Mr. Newport retired from Bell Atlantic Corporation in
December 1993 as Vice President of Strategic Planning and a member of the Office
of the Chairman after 36 years in the telecommunications industry. Mr. Newport
was the President and Chief Executive of AT&T's cellular subsidiary from 1981 to
1983 when he joined the newly formed Bell Atlantic Corporation. Mr. Newport
received a bachelor of science degree in electrical engineering from Purdue
University and a masters of science degree in management from the Sloan School
of Business at the Massachusetts Institute of Technology, which he attended as a
Sloan Fellow.
INCUMBENT CLASS II DIRECTORS--TO CONTINUE IN OFFICE FOR TERMS EXPIRING IN 2002
Dennis E. Logue, 56, has been a director of the Company since March 1998.
Mr. Logue has held various faculty positions at the Amos Tuck School of Business
Administration at Dartmouth College since 1974, including Professor of
Management since July 1985 and Associate Dean from July 1989 to June 1993. From
January 1994 to January 1995, Mr. Logue was the Economic Advisor to the Governor
of New Hampshire. Prior to joining the faculty at the Amos Tuck School in 1974,
Mr. Logue taught at Indiana University and worked at the U.S. Treasury as a
senior research economist. In addition, Mr. Logue has been a visiting professor
at the University of California at Berkeley, the University of Virginia and
Georgetown University. Mr. Logue was a founder and has served on the board of
directors of Ledyard National Bank since 1991. He also serves on the board of
directors of Sallie Mae (GSE), Promontory Software Technology, and Synergy
Innovations, Inc. Mr. Logue is also a Trustee of Crossroads Academy and a
Trustee of the Josiah Bartlett Center for Public Policy. Mr. Logue received a
bachelor of arts degree in English and philosophy from Fordham University, a
masters degree in business administration from Rutgers University and a Ph.D. in
managerial economics from Cornell University.
William E. Hummel, 37, has been a director of the Company since
February 1998. Mr. Hummel has been President of Federal Computer Corporation
("Federal"), one of the eight information technology service companies acquired
in connection with the Offering (the "Founding Companies"), since June 1994.
Mr. Hummel served as Vice President of the Company on May 4, 1999 until his
3
<PAGE>
resignation from that position on January 17, 2000. From June 1984 to May 1994,
Mr. Hummel was President of Federal Datatronics Division, Inc., a systems
integration company servicing the federal government. Mr. Hummel received a
bachelor of science degree in business administration from Drake University.
INCUMBENT CLASS I DIRECTORS--TO CONTINUE IN OFFICE FOR TERMS EXPIRING IN 2001
Peter T. Garahan, 53, has been a director of the Company since
February 1998. Mr. Garahan has been a principal of The Ryegate Group, a
strategic and financing consulting firm, since January 1997. From December 1997
through December 1999, Mr. Garahan was Chief Operating Officer of Amteva
Technologies, an Enhanced Voice Services Software Company. From March 1995 to
December 1996, Mr. Garahan was Executive Vice President--Sales and Marketing of
Mitchell International, an IT company servicing the automotive industry and a
subsidiary of the Thomson Corporation, a major publishing and information
company. From May 1992 through December 1996, Mr. Garahan was President of
Mitchell Medical, formerly Medical Decision Systems, a software company
specializing in automotive medical insurance claims analysis. Mr. Garahan serves
on the board of directors of Celeris Corporation. Mr. Garahan received a
bachelor of arts degree from the State University of New York at Stony Brook and
a masters degree in business administration from Cornell University and is a
veteran of the United States Navy.
C. Lawrence Meador, 54, has been Vice Chairman of the Board of Directors of
the Company since February 1998. Mr. Meador was the founder and President of
MST, a Founding Company, since 1992. From January 1996 to June 1998, Mr. Meador
served, under an MST contract, as the Chief Information Officer of CIGNA
Property and Casualty, an insurance company. Mr. Meador has also been on the
academic staff of the Massachusetts Institute of Technology for over 20 years,
during which period he was a consultant to numerous international Fortune 1000
companies, governmental bodies and other organizations. From 1974 to 1992,
Mr. Meador was the Founder, President and Chief Executive Officer of Decision
Support Technology, Inc., a firm established to commercialize MIT research on
Decision Support Systems. From 1985 to 1987 he served as a Co-Founder, Director
and Vice Chairman of Software Productivity Research, Inc. Mr. Meador serves as
chairman of the board of directors for Clinician Support Technology, Inc., an
internet-based health care company. Mr. Meador received a bachelor of science
degree from the University of Texas and masters degrees in management and
mechanical engineering from the Massachusetts Institute of Technology.
COMPENSATION OF DIRECTORS
Directors who are also officers or employees of the Company do not receive
additional compensation for serving as directors. Each director who is not an
officer or employee of the Company receives an annual retainer fee of $14,000,
plus $1,000 per day or any portion of a day for attendance at meetings of the
Board of Directors and any Committee of the Board, and $500 for each telephonic
meeting of the Board or Committee of the Board. In addition, under the Company's
1997 Long-Term Incentive Plan, each non-employee director will be granted,
subject to certain exceptions, an annual option to acquire 5,000 shares at the
first meeting of the Board of Directors immediately following an annual meeting
of the Company's stockholders at which such director is re-elected or remains a
director. In addition, each person who becomes a non-employee director in the
future will be granted automatically an option to acquire 10,000 shares upon
such person's initial election as a director. Each such option will have an
exercise price equal to the fair market value per share of Common Stock on the
date of grant. Directors are also reimbursed for out-of-pocket expenses incurred
in attending meetings of the Board of Directors or committees thereof, and
visiting the Company's offices and other specified locations in their capacity
as directors.
4
<PAGE>
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
During 1999, the Board of Directors held nine meetings and took action by
unanimous written consent on a number of occasions. Each director of the Company
attended 75% or more of all Board meetings and 75% or more of all meetings of
each committee on which such director served.
The Board of Directors has established an Audit Committee, a Compensation
Committee and a Finance Committee. The Audit Committee reviews the results and
scope of the audit and other services provided by the Company's independent
accountants and consists of Ms. Grant (Chair) and Messrs. Newport and Logue. The
Compensation Committee approves salaries and certain incentive compensation for
management and key employees of the Company, administers the 1997 Long-Term
Incentive Plan, administers the 1998 Employee Stock Purchase Plan, reviews
executive benefit plans and health and welfare plans, and consists of
Messrs. Garahan (Chair) and Newport and Ms. Grant. Mr. Newport was appointed to
serve on the Compensation Committee in January 2000, replacing Edward Mathias.
The Finance Committee advises the Company on financing alternatives and
arrangements, approves credit agreements and consists of Ms. Grant (Chair) and
Mr. Garahan.
5
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock of the Company as of the Record Date by (i) each
person known to beneficially own more than 5% of the outstanding shares of
Common Stock; (ii) each of the Company's directors; (iii) each named executive
officer; and (iv) all executive officers and directors as a group. Unless
otherwise indicated, all persons listed have an address in care of the Company's
principal executive offices and have sole voting and investment power with
respect to their shares.
<TABLE>
<CAPTION>
NAME NUMBER PERCENT
- ---- --------- --------
<S> <C> <C>
Capital Group International Inc.(1)......................... 1,175,000 7.7%
Fleet Boston Corporation(2)................................. 905,670 5.9
Jerry B. Ward............................................... 738,178 4.8
C. Lawrence Meador(3)....................................... 616,605 4.0
Kennard F. Hi11(4).......................................... 229,493 1.5
William E. Humme1(5)........................................ 148,244 1.0
Michael G. Paglaiccetti(6).................................. 70,162 *
Peter J. Jobse(7)........................................... 40,000 *
William M. Newport(8)....................................... 16,667 *
Ann Torre Grant(8).......................................... 15,667 *
Dennis E. Logue(8).......................................... 11,867 *
Peter T. Garahan(8)......................................... 11,667 *
All directors and executive officers as a group (15
persons).................................................. 4,207,367 27.5%
</TABLE>
- ------------------------
* less than 1.0%
1. Shares reported are based on a Form 13G filing. The stockholder's principal
address is: 11100 Santa Monica Blvd., 15(th) Floor, Los Angeles, CA 90025.
Of the total shares beneficially owned, the stockholder has the sole power
to vote for 540,000 shares.
2. Shares reported are based on a Form 13G filing. The stockholder's principal
address is: One Federal Street, Boston, MA 02110. Of the total shares
beneficially owned, the stockholder has sole power to vote for 742,770
shares.
3. The amount shown includes 3,333 restricted shares which vest ratably over
18 months.
4. Of the amount shown, 155,000 shares are owned of record by the Hill-Craft
Irrevocable Family Trust, of which Mr. Hill and his spouse, Shirley Craft,
are trustees and share voting power and investment power with respect to
such shares. The amount shown includes 68,500 restricted shares which vest
ratably over 18 to 24 months. Unvested shares forfeit upon termination.
5. The amount shown includes 1,900 restricted shares which vest ratably over 18
to 24 months. Unvested shares forfeit upon termination.
6. The amount shown includes 36,000 restricted shares which vest ratably over
18 to 24 months. Unvested shares forfeit upon termination.
7. The amount shown includes options to purchase 10,000 shares of common stock
that are currently exercisable.
8. The amount shown includes options to purchase 11,667 shares of Common Stock
that are currently exercisable.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation for the
years ended December 31, 1999, 1998 and 1997 of the Company's Chief Executive
Officer and the other four most highly compensated executive officers during
1999 (the "Named Executive Officers"). Except for the Chief Executive Officer,
no executive officer's total salary and bonus exceeded $100,000 in 1997. In
addition, no executive officers were granted options in or prior to 1997.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------------------
ANNUAL COMPENSATION SECURITIES RESTRICTED
------------------------------ UNDERLYING STOCK OTHER
YEAR SALARY BONUS(1) OTHER(2) OPTIONS AWARDS(3) COMPENSATION(4)
-------- -------- -------- -------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Kennard F. Hill.................. 1999 $446,446 $ -- $41,525 25,000(5) $175,959 $ 9,688
Chairman of the Board, 1998 289,500 80,000 40,734 150,000(5) 19,980 7,711
President and Chief Executive 1997 216,000 -- -- -- -- --
Officer
C. Lawrence Meador(6)............ 1999 431,000 -- -- 25,000(5) 13,230 3,102
Vice Chairman of the Board 1998 431,000 60,000 -- -- 19,980 10,975
Michael G. Paglaiccetti(6)....... 1999 220,000 -- -- -- 75,411 3,000
Vice President and Chief 1998 232,308 60,000 -- 75,000(5) 74,925 10,757
Operating Officer
Jerry B. Ward(6)................. 1999 210,000 -- -- -- -- 1,110
Vice President
Peter J. Jobse(6)................ 1999 176,410 65,000(7) -- 60,000 79,380 5,583
Vice President
Daniel J. Roche(6)............... 1999 253,282 -- -- 35,000(5) 110,603(8) 2,250
Former President and Chief 1998 220,000 -- -- 75,000(5) 84,915(8) 6,439
Operating Officer
</TABLE>
- ------------------------
1. Bonus amounts are reflected in the year to which they are attributable and
not the year in which they are paid.
2. Fringe benefit amounts are omitted to the extent the aggregate value of such
benefits is less than 10% of salary and bonus or $50,000. The amount shown
for Mr. Hill reflects housing allowance.
3. Restricted stock awards were issued in which certain members of management
were granted restricted Common Stock at a price of $.01 per share. Ownership
of this restricted Common Stock vests ratably over 18 to 24 months. This
stock is subject to forfeiture in the event certain tenure criteria are not
met. The amounts shown represent the full dollar value of the shares of
Common Stock based on the closing market price on the date of grant, less
the $.01 share exercise price.
4. Consists of matching contributions under a defined contribution 401(k) or
profit sharing plan and the dollar value of insurance premiums paid by the
Company with respect to term life insurance for the benefit of the Named
Executive Officer.
5. During August 1999, these options were cancelled at the request of the Named
Executive Officer.
6. Messrs. Meador and Paglaiccetti joined the Company on February 10, 1998.
Mr. Ward joined the Company on December 10, 1998. Mr. Jobse joined the
Company on February 22, 1999. Mr. Roche voluntarily terminated his
employment effective October 30, 1999.
7. Amount represents hiring bonus.
8. Unvested restricted stock award balances were forfeited upon Mr. Roche's
termination on October 30, 1999.
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
Options granted to the Named Executive Officers during 1999 are set forth in
the following table. No stock appreciation rights ("SARs") were granted during
1999.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
NUMBER OF PERCENT OF ANNUAL RATES OF STOCK
SHARES TOTAL OPTIONS PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM(2)
OPTIONS EMPLOYEES PRICE EXPIRATION -----------------------
NAME GRANTED(1) IN 1999 ($/SHARE)(1) DATE 5%($) 10%($)
- ---- ---------- ------------- ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Kennard F. Hill................ 25,000(3) 3% $11.50 2/16/09 $180,807 $458,201
C. Lawrence Meador............. 25,000(3) 3% 11.50 2/16/09 180,807 458,201
Michael G. Paglaiccetti........ -- -- -- -- -- --
Jerry B. Ward.................. -- -- -- -- -- --
Peter J. Jobse................. 30,000 4% 11.50 2/16/09 216,969 549,841
30,000 4% 2.28 8/4/09 43,035 109,060
Daniel J. Roche................ 35,000(3) 4% 11.50 2/16/09 253,130 641,481
</TABLE>
- ------------------------
1. The exercise price of each option was equal to at least the fair market
value of the underlying Common Stock on the date of grant, as determined in
accordance with the 1997 Long-Term Incentive Plan. Each option vests ratably
over a three year period.
2. Future value of current-year grants assuming appreciation of 5% and 10% per
year over the applicable option term. The actual value realized may be
greater than or less than the potential realizable values set forth in the
table.
3. These options were cancelled at the request of the Named Executive Officer.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table provides the specified information concerning
unexercised options held as of December 31, 1999 by the Named Executive
Officers. There were no options exercised by the Named Executive Officers, and
no SARs outstanding, during 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES DECEMBER 31, 1999 DECEMBER 31, 1999
ACQUIRED ON --------------------------- ---------------------------------
EXERCISE VALUE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE(1)
----------- -------------- ----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Kennard F. Hill.............. -- $ -- -- -- $-- $ --
C. Lawrence Meador........... -- -- -- -- -- --
Michael G. Paglaiccetti...... -- -- -- -- -- --
Jerry B. Ward................ -- -- -- -- -- --
Peter J. Jobse............... -- -- -- 60,000 -- --
Daniel J. Roche.............. -- -- -- -- -- --
</TABLE>
- ------------------------
1. The last reported sales price of the Common Stock on December 31, 1999, as
reported by the Nasdaq Stock Market, was $1.38, which was less than the
lowest exercise price of $2.28 per share.
8
<PAGE>
EMPLOYMENT AGREEMENTS; COVENANTS NOT TO COMPETE
Effective January 2, 1997, the Company entered into an employment agreement
with Mr. Hill providing for an annual base salary of $216,000 through
February 10, 1998 and $300,000 thereafter. On January 1, 1999, Mr. Hill's salary
was increased to $480,000 per annum. Mr. Hill's salary was reduced to a rate of
$262,500 per annum between October 1, 1999 and December 31, 1999. Mr. Hill also
participates in the incentive bonus program established by the Company in the
same manner as the other executives as described below. Mr. Hill's employment
agreement has a three-year term with automatic renewals for successive one-year
periods (each a "Renewal Period") unless, within 30 days prior to the
termination of any such period, either party shall have given written notice to
the other party that the term shall not be so extended.
Messrs. Meador and Paglaiccetti have entered into employment agreements with
the Company providing for an annual base salary of $431,815 and $220,000,
respectively, and a bonus to be determined annually in accordance with the
annual incentive program of the Company for senior executives, which bonus shall
be contingent upon the achievement of certain corporate and/or individual
performance goals established from time to time by the Compensation Committee.
Mr. Meador's agreement provides that he shall be paid a special bonus equal to
1% of the total purchase price or total investment for any acquisition or joint
venture by the Company that Mr. Meador identifies and in which he assists in the
closing thereof. Mr. Meador's employment agreement became effective as of the
closing of the initial public offering of the Company's common stock in
February 1998, and was terminated effective August 30, 1999. In accordance with
his employment agreement, Mr. Meador will receive severance payments in the form
of continuation of his base salary through February 10, 2001.
Mr. Paglaiccetti's employment agreement was effective as of February 10, 1998
for a term of three years with automatic renewals for successive one-year
periods unless, at least two months prior to the termination of any such period,
either party shall have given notice to the other party that the term shall not
be so extended. Each of these agreements provide that, in the event of a
termination of employment by the Company without cause (other than upon the
death or disability of the employee) or by the employee for good reason
(including (i) a material breach by the Company of the compensation and benefits
provisions set forth in the agreement; (ii) a material breach by the Company of
any other term of the agreement; or (iii) a material diminution in the
employee's duties or responsibilities, as defined under the agreement, the
employee shall be entitled to severance payments equal to the employee's base
salary as in effect immediately prior to such termination over the longer of the
then-remaining term or 12 months (the "Severance Period"). In addition, under
the foregoing circumstances, all options to purchase Common Stock issued to the
employee shall become immediately vested and exercisable and, subject to the
1997 Long-Term Incentive Plan, shall remain exercisable during the Severance
Period. In October 1999, Mr. Paglaiccetti was awarded a cash retention bonus in
the amount of $50,000 which vested on April 1, 2000.
Each of the aforementioned employees will also be entitled to coverage under
the group medical care, disability and life insurance benefit plans or
arrangements in which such employee is participating at the time of termination,
for the continuation of the Severance Period, provided such employee does not
have comparable substitute coverage from another employer. Each employment
agreement contains a covenant-not-to-compete with the Company without the prior
approval of the Board of Directors of the Company. The covenant-not-to-compete
is in effect during the period of employment, as well as during the Severance
Period, if applicable. In the case of Mr. Meador, the covenant-not-to-compete is
in effect initially for a period of four years from the closing of the Offering,
although the Company must continue to pay him his base salary in order to keep
the covenant-not-to-compete in effect beyond the Severance Period.
Mr. Jobse's compensation was established pursuant to a written employment
offer in January 1999 and was adjusted in November when he was promoted to the
position of Chief Operating Officer. Pursuant to a termination agreement,
Mr. Jobse will receive a $50,000 payment by April 14, 2000 and
9
<PAGE>
will receive severance in the form of salary continuation through July 31, 2000.
Mr. Jobse' restricted management stock also vests under that agreement.
Mr. Ward's compensation was established at $200,000 per annum pursuant to a
consulting agreement, which was effective upon the acquisition of the assets of
Global Core Strategies, Inc. in December 1998. The consulting agreement includes
a covenant not to compete to the later of December 10, 2001 or one year after
the expiration of the agreement.
The information set forth in the following Report shall not be deemed
incorporated by reference into any existing or future filings under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"", which
incorporate by reference this Proxy Statement, except to the extent that the
Company specifically incorporates such information by reference.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION
The Compensation Committee, subject to the approval of the Board of
Directors, determines the amount and form of compensation and benefits payable
to the Company's executive officers. The Compensation Committee currently
consists of three members, none of whom is a current or former employee or
officer of the Company.
In general, the goals of the Compensation Committee are to enable the
Company to (i) recruit, develop and retain highly motivated and qualified
executive management; (ii) maximize financial performance, balancing
appropriately the short and long term goals of the Company; and (iii) align the
interests of Company management with those of its stockholders through the use
of stock options and incentives tied to increases in stockholder value.
The Compensation Committee's philosophy in structuring a competitive
executive compensation program is to provide for both variable incentive pay and
base salary. The Committee anticipates that variable incentive compensation will
become increasingly important as the Company matures and establishes baseline
results. The Committee's evaluation of performance will focus on the operating
and financial performance of divisions and the Company as a whole.
Performance-based incentive pay is available through the 1998 Annual Incentive
Plan and the grant of equity-based compensation under the 1997 Long-Term
Incentive Plan, both of which are discussed below.
The Compensation Committee reviews the compensation of the Chief Executive
Officer, President and Chief Operating Officer and any other officer of the
Company or a subsidiary with base salary compensation of $175,000 or more
annually based on a variety of factors, including individual performance,
market-based salary trends, and the Company's overall financial results. Base
salaries for other officers are set by the Chief Executive Officer, subject to
review and approval by the Compensation Committee.
The compensation of Messrs. Hill and Roche for 1999 was established pursuant
to employment agreements entered into prior to the Offering. Mr. Paglaiccetti's
and Mr. Meador's compensation for 1999 was determined pursuant to employment
agreements, which were effective upon consummation of the Offering. The Offering
occurred prior to the appointment of the Compensation Committee. Mr. Ward's
compensation for 1999 was established pursuant to a consulting agreement, which
was effective upon the acquisition of the assets of Global Core
Strategies, Inc. in December 1998. Mr. Jobse's compensation was established
pursuant to a written employment offer in January 1999, and adjusted in November
when he was promoted to the position of Chief Operating Officer.
During 1998, the Compensation Committee recommended, and the Board of
Directors approved, an annual incentive plan (the "1998 Annual Incentive Plan").
The purpose of the 1998 Annual Incentive Plan is to provide senior management,
as well as other key employees, with additional performance incentives in the
form of an annual incentive bonus to be paid in recognition of meeting certain
financial, operational and qualitative goals to be set on an annual basis.
Incentive bonus levels
10
<PAGE>
will vary in accordance with individual and corporate performance, with senior
executives and qualified employees eligible to receive a bonus of up to 100% of
annual salary based on exceptional performance.
Based on factors described above, particularly the financial performance of
the Company, the Committee did not award cash incentive compensation in regard
to 1999.
The Committee provides equity incentive compensation through the grant of
stock options under the Company's 1997 Long-Term Incentive Plan (the "Plan").
All grants of options under the Plan are made at an exercise price equal to the
fair market value of the Common Stock on the grant date and vest in three annual
installments. In 1999 and through March 31, 2000, stock options for 829,000
shares of Common Stock were granted by the Compensation Committee under the
Plan. In addition, an aggregate of 363,300 shares of restricted stock was
granted under the Plan to 22 individuals including an aggregate of 191,800
shares to Messrs. Hill, Meador, Paglaiccetti, Jobse and Roche. Further, 530,000
stock options were cancelled to increase the pool of available unallocated stock
options, including cancellation of 385,000 options held by Messrs. Hill, Meador,
Paglaiccetti and Roche. An aggregate of 925,000 shares of restricted stock was
granted to 81 employees under a special program for employees of the Global
business unit of the Company. All restricted stock vests in equal installments
over 18 to 24 months. The Compensation Committee intends to make future grants
under the Plan based on the achievement of individual and Company goals, as well
as a subjective analysis of the executive's or key employee's contributions to
the Company.
Section 162(m) of the Internal Revenue code limits the deductibility of
compensation in excess of $1.0 million paid to the Chief Executive Officer and
the four most highly compensated officers of the company (other than the Chief
Executive Officer) in any fiscal year, unless the compensation qualifies as
"performance based compensation." The Compensation Committee's policy with
respect to Section 162(m) is to make every reasonable effort to cause
compensation to be deductible by the Company while simultaneously providing
executive officers of the Company with appropriate and competitive compensation.
The aggregate base salaries and bonuses of the Company's executive officers are
not in the foreseeable future expected to exceed the $1.0 million limit, and
options under the Company's Long-Term Incentive Plan are intended to qualify as
performance-based compensation.
Compensation Committee:
Peter T. Garahan (Chair)
Ann Torre Grant
William M. Newport
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has a Compensation Committee consisting of Peter T.
Garahan (Chair), Ann Torre Grant and William M. Newport. Except for Mr. Hill,
the Company's Chairman, President and Chief Executive Officer, no other officer
or employee participated in deliberations of the Board of Directors concerning
executive officer compensation. No member of the Compensation Committee serves
as a member of the board of directors or compensation committee of any entity
that has one or more executive officers serving as a member of the Company's
Board of Directors or Compensation Committee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers,
directors and persons who own more than ten percent (10%) of the Common Stock
(collectively, "Reporting Persons") to file initial reports of ownership and
reports of changes of ownership of the Common Stock with the
11
<PAGE>
Securities and Exchange Commission ("SEC"). Reporting Persons are required to
furnish the Company with copies of all forms that they file under
Section 16(a). Based solely upon a review of the copies of such forms received
by the Company or written representations from Reporting Persons, the Company
believes that, through the date of this Proxy Statement, all Reporting Persons
complied with all applicable filing requirements under Section 16(a).
CERTAIN TRANSACTIONS
The Company was formed in August 1996. The Company was initially capitalized
by SCM, LLC, a Virginia-based merchant banking firm known as "Commonwealth" of
which J. Marshall Coleman, formerly the Chairman of the Board, is a member. In
connection with the organization of the Company, members of Commonwealth
acquired 1,413,806 shares of Common Stock in exchange for consulting, financial
advisory and capital raising services provided by members of Commonwealth to the
Company and the commitment of a member of Commonwealth to provide the funds
necessary to effect the acquisition of the Founding Companies and the Offering.
These shares were distributed to the members of Commonwealth, Mr. Coleman, James
J. Martell, Jr. and Charles F. Smith, in November 1997. Commonwealth was
reimbursed for the funds advanced by it to the Company out of the proceeds of
the Offering, together with interest on such advances at the prime rate. Such
advances aggregated approximately $2,770,000 as of the closing of the Offering.
On May 29, 1998 the Company and Mr. Smith entered into a settlement agreement
pursuant to which the Company reimbursed Mr. Smith for certain cash advances
made by him on behalf of the Company to fund organizational costs; entered into
a sublease agreement with Mr. Smith for premises located in Virginia previously
occupied the Company; and the Company and Mr. Smith exchanged releases. The
sublease was subsequently terminated, and the premises re-let.
Simultaneously with the February 10, 1998 closing of the Offering, the
Company acquired by merger and in exchange for cash and shares of its Common
Stock (the "Mergers") all of the issued and outstanding stock of the Founding
Companies, at which time each Founding Company became a wholly owned subsidiary
of the Company. The aggregate consideration paid by the Company in the Mergers
consisted of (i) approximately $47.1 million in cash; (ii) 2,307,693 shares of
Common Stock, for an aggregate value of approximately $24.0 million; and
(iii) approximately $1.3 million of indebtedness of the Founding Companies
assumed by the Company. The Company also assumed options to purchase shares of
common stock of one of the Founding Companies, which constitute options to
purchase an aggregate of 62,471 shares of Common Stock of the Company at the
initial public offering price.
The consideration paid for the Founding Companies was determined through
arm's-length negotiations between the Company and the representatives of each
Founding Company. The factors considered by the Company in determining the
consideration paid included, among others, the historical operating results, the
net worth, the amount and type of indebtedness and the future prospects of the
Founding Companies. Each Founding Company was represented by independent counsel
in the negotiation of the terms and conditions of the Mergers. Immediately prior
to the Mergers, one of the Founding Companies repurchased certain shares held by
a minority stockholder for $2.0 million and distributed $1.0 million to its
stockholders and another Founding Company distributed $4.0 million to certain
stockholders. Each of the stockholders of the Founding Companies has agreed not
to compete with the Company through February 9, 2002.
In connection with the Merger of MST into the Company, and as consideration
for his interest in MST, Mr. Meador, who is an executive officer, director and
holder of 4% of the outstanding shares of Common Stock of the Company, received
603,846 shares of Common Stock and approximately $9.8 million in cash.
Additionally, pursuant to an arrangement in the purchase agreement, contingent
consideration of up to $8,400,000 may be paid to MST, $2,520,000 of which would
be paid in cash and the remainder of which would be paid in Common Stock,
depending on MST's pre-tax income in 1999 and 2000.
12
<PAGE>
In connection with the Merger of Federal into the Company, and as
consideration for his interest in Federal, Mr. Hummel, who is a director of the
Company, received 115,385 shares of Common Stock and approximately $1.5 million
in cash. Additionally, pursuant to an arrangement in the purchase agreement,
Mr. Hummel has earned contingent consideration of $734,203 payable in cash
and/or stock of Company.
PERFORMANCE MEASUREMENT PRESENTATION
The following graph shows a comparison of the cumulative total returns for
an investment in the Company's Common Stock, the Nasdaq Composite Index and the
Nasdaq Computer & Data Processing Services Index. Although the SEC requires the
Company to present a graph for a five year period, the Common Stock has been
publicly traded only since February 5, 1998 and; as a result, the following
chart commences as of such date.
The comparison assumes the investment of $100 on February 5, 1998 in the
Company's Common Stock and in each of the indices and, in each case, assumes
reinvestment of all dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
2/5/98 6/30/98 12/31/98 6/30/99 12/31/99
<S> <C> <C> <C> <C> <C>
Condor Technology Solutions 100.00 113.46 76.92 36.06 10.58
Nasdaq Composite Index 100.00 112.54 131.91 161.86 244.25
Nasdaq Computer & Data Processing Services Index 100.00 130.04 158.63 198.98 348.22
</TABLE>
13
<PAGE>
PROPOSAL 2--APPROVAL OF NEW EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors proposes that the stockholders of the Company approve
the adoption of the 2000 Employee Stock Purchase Plan (the "Plan" or the
"ESPP"), pursuant to which shares of the Company's Common Stock, par value $0.01
per share (the "Common Stock"), would be made available for purchase by eligible
employees of the Company. The following summary of the principal features of the
Plan is a fair and complete summary of the Plan and it is qualified in its
entirety by the full text of the Plan, which appears as EXHIBIT A to this Proxy
Statement.
GENERAL
The purpose of the Plan is to promote the success and enhance the value of
the Company by providing eligible employees with the opportunity to purchase
Common Stock of the Company so as to increase their interests in the Company's
success and encourage them to remain in the Company's employ. The Plan is
intended to qualify as an employee stock purchase plan under section 423 of the
Internal Revenue Code of 1986, as amended (the "Code").
The Plan authorizes the purchase of up to 325,000 shares of Common Stock by
eligible employees. However, the number of shares available for purchase under
the Plan will be adjusted for stock dividends, stock splits, reclassifications
and other changes affecting the Company's Common Stock. The shares available for
purchase under the Plan may, in the discretion of the Board of Directors of the
Company (the "Board"), be authorized but unissued shares of Common Stock, shares
purchased on the open market, or shares from any other proper source.
ADMINISTRATION
The ESPP will be administered by the Compensation Committee. The
interpretation and construction by the Compensation Committee will be, to the
full extent permitted by law, final.
In the event that insufficient shares are available under the ESPP for a
full allocation of shares to all participants during a given Offering Period (as
defined below), the Compensation Committee shall make a pro rata allocation of
the shares remaining available for purchase in as uniform a manner among the
persons exercising options as shall be practicable and as it shall determine to
be equitable.
ELIGIBILITY
All employees of the Company or its subsidiaries are eligible to participate
in the ESPP, except the following: (i) employees who are customarily employed
for less than 20 hours per week; (ii) employees who are customarily employed for
less than five months in a calendar year; (iii) employees who own or hold
options to purchase or who, as a result of participation in the ESPP, would own
stock or hold options to purchase stock possessing five percent (5%) or more of
the total combined voting power or value of all classes of stock of the Company
as determined pursuant to Section 424(d) of the Code; and (iv) employees whose
right to purchase Common Stock under the ESPP accrues at a rate which exceeds
$25,000 worth of stock for each calendar year in which such option is
outstanding at any time.
OFFERING PERIODS AND ENROLLMENT
Each Offering Period of Common Stock under the ESPP will be for a period of
six (6) months. Offering Periods will commence on the first day of July and
January of each year. The Compensation Committee may change the duration of
Offering Periods without stockholder approval, subject to certain limitations
set forth in the ESPP.
Eligible employees may participate in any Offering Period by submitting a
subscription agreement to the Company on or before the fifteenth day of the last
month before the Offering Period. Once enrolled, a participant automatically
will participate in each succeeding Offering Period unless the
14
<PAGE>
participant withdraws from the Offering Period or the ESPP. Upon enrollment, a
participant authorizes payroll deductions of up to five percent (5%) of the
participant's base salary or wages, bonuses and incentive compensation received
during an Offering Period. After a participant sets the rate of payroll
deductions for an Offering Period, the participant may increase or decrease the
rate for any subsequent Offering Period, but may only decrease the rate for the
current Offering Period. Only one change may be made during an Offering Period,
unless otherwise approved by the Compensation Committee. No interest accrues on
payroll deductions.
PURCHASE OF STOCK
The number of whole shares that a participant may purchase in any Offering
Period will be determined by dividing the total amount of payroll deductions
withheld from the participant during the Offering Period by the price per share
determined as described below. The purchase will take place automatically on the
Exercise Date. No fractional shares will be purchased and any payroll deductions
accumulated in a participant's account which are not sufficient to purchase a
full share will be retained for the subsequent Offering Period, subject to
earlier withdrawal as allowed by the ESPP. Any other monies remaining in a
participant's account after the Exercise Date will be returned to the
participant.
In no event may the participant purchase more than $25,000 worth of Common
Stock in any calendar year.
PURCHASE PRICE
The purchase price of shares purchased in any Offering Period will be 85% of
the average of the fair market value of the Common Stock on either (i) the first
business day of the Offering Period, or (ii) the Purchase Date, whichever is
less. The fair market value will be determined in good faith by the Compensation
Committee, based upon such factors as the Compensation Committee determines
relevant; provided, however, that if there is a public market for the Common
Stock, the fair market value of a share of Common Stock on a given date shall be
the closing price on the exchange or national market system as of such date, or
if there were no sales of Common Stock on that date, then on the next preceding
date on which there were sales, in either case as reported in THE WALL STREET
JOURNAL.
WITHDRAWAL
A participant may withdraw from the ESPP or any Offering Period by giving
written notice to the Company. All of the participant's payroll deductions
credited to the participant's account will be paid to the participant after
receipt of notice of withdrawal. After such a withdrawal, payroll deductions
will not resume at the beginning of the succeeding Offering Period unless the
participant completes a new subscription agreement.
TERMINATION OF EMPLOYMENT
If a participant's employment terminates for any reason (including death,
disability or retirement) the participant will be deemed to have elected to
withdraw from the ESPP and the payroll deductions credited to the participant's
account during the Offering Period, but not yet used to exercise the option,
will be returned to such participant, or in the case of the participant's death,
to the persons entitled to receive such funds.
RECAPITALIZATION
Subject to any required action by the Stockholders of the Company, the
number of shares of Common Stock covered by each outstanding option, and the
price per share thereof in each such option, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of
15
<PAGE>
Common Stock resulting from a subdivision or consolidation of shares or the
payment of a stock dividend (but only on the Common Stock) or any other increase
or decrease in the number of such shares effected without receipt of
consideration by the Company.
In the event of a merger or consolidation in which the Company is a
surviving corporation, each outstanding option shall pertain to and apply to the
securities to which a holder of the number of shares of Common Stock subject to
the option would have been entitled.
In the event of a change in the Common Stock as presently constituted, which
is limited to a change of all of its authorized shares with par value into the
same number of shares with a different par value or without par value, the
shares resulting from any such change shall be deemed to be the Common Stock.
Such adjustments to stock or securities of the Company shall be made by the
Compensation Committee, whose determination shall be final.
RESALE OF SHARES
The ESPP imposes a six month holding period on the shares of Common Stock
purchased by participants. The Company intends to register the shares issuable
under the ESPP on a Registration Statement on Form S-8. Participants who are
affiliates of the Company may not resell under the Form S-8 Registration
Statement any shares purchased under the ESPP. Such resales must either be
described in a separate prospectus (or, in certain instances, registered in a
separate registration statement) or be effected in accordance with Rule 144 or
another available exemption under the Securities Act.
AMENDMENT OF THE ESPP
The Company, insofar as permitted by law, may at any time amend, suspend or
discontinue the ESPP except that no revision or amendment may increase the
number of shares of Common Stock which may be issued under the ESPP, materially
increase the benefits accruing to participants under the ESPP or otherwise
materially modify the requirements for eligibility without the approval of the
stockholders of the Company.
TAX CONSEQUENCES
The ESPP is intended to qualify as an "employee stock purchase plan" within
the meaning of Section 423 of the Code. Participants will not recognize income
for federal income tax purposes either upon enrollment in the ESPP or upon
purchase of shares thereunder. All tax consequences of purchasing shares under
the ESPP are deferred until the participant sells or otherwise disposes of the
shares or dies. The Company will be entitled to a deduction for federal income
tax purposes to the extent that a participant recognizes ordinary income on a
disqualifying disposition of the shares in the year of the disqualification, but
not if a participant meets the holding requirements. The foregoing is intended
to be a brief summary of the tax consequences of transactions under the ESPP
based on federal tax laws in effect on the date hereof. As federal and state tax
laws may change, the federal, state and local tax consequences for any
participant will depend upon his or her individual circumstances.
PLAN BENEFITS
If the ESPP is approved by stockholders, the initial offering period will
commence on July 1, 2000. The number of shares that will be purchased by
executive officers or employees cannot be determined at this time because the
number of shares which may be purchased depends on the number of employees that
elect to participate in the ESPP and the amount they wish to contribute towards
the purchase of shares of Common Stock.
16
<PAGE>
REQUIRED VOTE
Approval of the adoption of the Plan requires an affirmative vote by a
majority of the total votes cast on the proposal in person or by proxy and
entitled to vote. Broker non-votes and abstentions are not treated as votes cast
for this purpose and have no effect on the outcome of the vote.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote "FOR" approval of the adoption of
the 2000 Employee Stock Purchase Plan.
PROPOSAL 3--APPROVAL OF INDEPENDENT ACCOUNTANTS
The Board of Directors, upon the recommendation of the Audit Committee, has
selected PricewaterhouseCoopers LLP, independent accountants, as auditors of the
Company to examine and report to stockholders on the consolidated financial
statements of the Company and its subsidiaries for the fiscal year ending on
December 31, 2000. PricewaterhouseCoopers LLP currently serves as the Company's
independent accountants. Representatives of PricewaterhouseCoopers LLP will be
present at the Meeting and will be given an opportunity to make a statement.
They also will be available to respond to appropriate questions from
stockholders.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends a vote "FOR" approval of the appointment
of PricewaterhouseCoopers LLP as independent accountants for the year ending
December 31, 2000.
STOCKHOLDER PROPOSALS
Stockholder proposals submitted for inclusion in the Proxy Statement for the
2001 Annual Meeting of Stockholders must be received by the Company at the
Company's executive office in Annapolis, Maryland and must be submitted in
accordance with Rule 14a-8 of the Exchange Act on or before December 13, 2000.
OTHER BUSINESS
The Board of Directors does not intend to bring any other matter before the
Meeting and does not know of any other business which others will present for
consideration at the Meeting. Except as the Board of Directors may otherwise
permit, only the business set forth and discussed in the Notice of Annual
Meeting of Stockholders and this Proxy Statement may be acted on at the Meeting.
If any other business does properly come before the Meeting the proxy holders
will vote on such matters according to their discretion.
ALL STOCKHOLDERS ARE URGED TO COMPLETE, SIGN, DATE, AND RETURN THE
ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE-PAID ENVELOPE. THANK YOU FOR
YOUR PROMPT ATTENTION TO THIS MATTER.
17
<PAGE>
EXHIBIT A
CONDOR TECHNOLOGY SOLUTIONS, INC.
2000 EMPLOYEE STOCK PURCHASE PLAN
The following constitutes the provisions of the 2000 Employee Stock Purchase
Plan (the "Plan") of CONDOR TECHNOLOGY SOLUTIONS, INC. (the "Company").
1. PURPOSE. The purpose of the Plan is to provide employees of the Company
and its Subsidiaries with an opportunity to purchase Common Stock of the Company
through payroll deductions. It is the intention of the Company that the Plan
qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal
Revenue Code of 1986, as amended. The provisions of the Plan shall, accordingly,
be construed so as to extend and limit participation in a manner consistent with
the requirements of Code Section 423.
2. DEFINITIONS.
(a) "Board" means the Company's Board of Directors.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee of the Board.
(d) "Common Stock" means the Common Stock, $0.01 par value, of the
Company.
(e) "Compensation" means an Eligible Employee's regular base pay,
overtime, incentive compensation, bonuses and commissions and any other wage
payments. The Committee, in its discretion, may (on a uniform and
nondiscriminatory basis) establish different definitions of "Compensation"
prior to a start of an Offering Period for all options to be granted during
such Offering Period.
(f) "Continuous Status as an Eligible Employee" shall mean the absence
of any interruption or termination of service as an Eligible Employee.
Continuous Status as an Eligible Employee shall not be considered
interrupted in the case of a leave of absence agreed to in writing by the
Company, provided that either such leave is for a period of not more than
ninety (90) days or re-employment upon the expiration of such leave is
guaranteed by contract or statute.
(g) "Eligible Employee" shall mean any person who is customarily
employed by the Company or a Subsidiary and is regularly scheduled to work
more than twenty (20) hours per week, including officers but excluding
directors in their capacity as such.
(h) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(i) "Fair Market Value" means the fair market value of the Common Stock
as determined in good faith by the Committee, based upon such factors as the
Committee determines relevant; PROVIDED, HOWEVER, that if there is a public
market for the Common Stock, the fair market value of a share of Common
Stock on a given date shall be the closing price on the exchange or national
market system as of such date, or, if there were no sales of Common Stock on
that date, then on the next preceding date on which there were sales, in
either case as reported in THE WALL STREET JOURNAL.
(j) "Grant Date" means the first business day of an Offering Period.
(k) "Offering Period" means a period of six calendar months for each
offering made under the Plan during which payroll deductions shall be made
from the Compensation of Eligible Employees granted an option under the
Offering.
(l) "Offering Price" means the lower of (i) eighty-five percent (85%)
of the Fair Market Value of a share of the Company's Common Stock on the
Grant Date; or (ii) eighty-five percent
<PAGE>
(85%) of the Fair Market Value of a share of the Company's Common Stock on
the Purchase Date.
(m) "Participant" means an Eligible Employee who has elected to
participate in the Plan.
(n) "Purchase Date" means the date on which the Participant's account
is credited for shares purchased under the Plan (customarily the last
business day of the third month of an Offering Period and the last business
day of an Offering Period).
(o) "Securities Act" means the Securities Act of 1933, as amended.
(p) "Subsidiary" means any corporation, domestic or foreign, in which
the Company owns, directly or indirectly, fifty percent (50%) or more of the
voting shares.
3. ELIGIBILITY. Any provisions of the Plan to the contrary
notwithstanding, no Eligible Employee shall be granted an option under the Plan
if: (i) immediately after the grant, such Eligible Employee (or any other person
whose stock ownership would be attributed to such Eligible Employee pursuant to
Code Section 424(d)) would own shares and/or hold outstanding options to
purchase shares possessing five percent (5%) or more of the total combined
voting power or value of all classes of shares of the Company or of any
Subsidiary of the Company (including all shares underlying any outstanding
options to acquire such securities); or (ii) the rate of withholding under such
option would permit the Eligible Employee's rights to purchase shares under all
employee stock purchase plans (described in Code Section 423) of the Company and
its Subsidiaries at a rate which exceeds twenty-five thousand dollars ($25,000)
of fair market value of such shares (determined at the time such option is
granted) for each calendar year.
4. OFFERINGS. Subject to the provisions of the Plan, the Company shall
from time to time in its discretion make offerings to Eligible Employees to
purchase Common Stock under the Plan, specifying the Grant Date and the Offering
Period.
5. PARTICIPATION.
(a) Subject to the limitations contained in Section 3 and the
restrictions contained in Section 6(c), an Eligible Employee may become a
Participant by completing a subscription agreement authorizing payroll
deductions on the form and in the manner provided by the Company and filing
it with the Company's payroll office not less than two (2) weeks prior to
the beginning of an Offering Period, or, for Eligible Employees who are
hired after the foregoing date, the payroll period within an Offering Period
with respect to which it is to be effective, in either case unless a
different time for filing the subscription agreement is set by the Company.
Once enrolled, a Participant remains enrolled in each subsequent Offering
Period of the Plan at the designated payroll deduction unless the
Participant withdraws by providing the Company with a written Notice of
Withdrawal in accordance with Section 9 herein or files a new subscription
agreement in accordance with Section 6(c) herein changing the Participant's
designated payroll deduction.
(b) Payroll deductions for a Participant shall commence with the next
payroll period following the beginning of the Offering Period or the first
payroll period commencing at least two (2) weeks after the date of the valid
filing of a subscription agreement, whichever is later, and shall end when
terminated by the Participant as provided in Section 9 herein or otherwise
pursuant to this Plan.
6. PAYROLL DEDUCTIONS.
(a) At the time a Participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made automatically on each
payday at a rate not exceeding five percent (5%), or such other rate as may
be determined from time to time by the Committee, of the
2
<PAGE>
Compensation which he or she would otherwise receive on such payday,
provided that the aggregate of such payroll deductions during any Offering
Period shall not exceed five percent (5%), or such other percentage as may
be determined from time to time by the Committee, of the aggregate
Compensation which he or she would otherwise have received during such
Offering Period.
(b) All payroll deductions authorized by a Participant shall be
credited to his or her account under the Plan. A Participant may not make
any additional payments into such account.
(c) A Participant may change the rate of his or her payroll deductions
by completing and filing with the Company either a withdrawal form specified
by the Company or a new payroll deduction authorization form; provided that
such form is received by the Company during one (1) of the following periods
(each a "Window Period"):
June 1 through June 15
September 1 through September 15
December 1 through December 15
March 1 through March 15
provided further, that such rate change shall be effective starting as of
the immediately following payroll period. The Committee may, from time to
time and in its discretion, modify the timing or duration of the Window
Periods or adopt other reasonable and uniform restrictions on Participants'
ability to withdraw from the Plan or change the rate of payroll deductions.
(d) To the extent necessary, but only to such extent, to comply with
Code Section 423(b)(8) and Section 3 herein, a Participant's payroll
deductions may be automatically decreased to zero percent (0%) at such time
during any Offering Period which is scheduled to end in the current calendar
year that the aggregate of all payroll deductions accumulated with respect
to the applicable Offering Period and any other Offering Period ending
within the same calendar year equals twenty-five thousand dollars ($25,000).
Payroll deductions shall recommence at the rate provided in such
Participant's subscription agreement at the beginning of the next succeeding
Offering Period, unless terminated by the Participant as provided in
Section 9 herein.
7. EXERCISE OF OPTION AND PURCHASE OF SHARES. Unless a Participant
withdraws from the Offering Period as provided in Section 9 herein, his or her
option for the purchase of shares will be exercised automatically on each
Purchase Date, and the maximum number of full shares subject to options will be
purchased at the applicable option price with the accumulated payroll deductions
in his or her account. The number of shares of Common Stock purchased by each
Participant shall be determined by dividing (i) the amount accumulated in his or
her account on the Purchase Date by (ii) the lower of (x) eighty five percent
(85%) of the Fair Market Value of a share of Common Stock on the first business
day of an Offering Period or (y) eighty five percent (85%) of the Fair Market
Value of a share of Common Stock on the Purchase Date; provided, however, that
the maximum number of shares a Participant may purchase during each Offering
Period shall be the number of shares purchasable under the Plan during the
Offering Period with the maximum payroll deductions permitted by Section 6(d)
herein, based upon the Fair Market Value of the Common Stock at the beginning of
the Offering Period. The shares purchased upon exercise of an option hereunder
shall be deemed to be transferred to the Participant on the Purchase Date.
During his or her lifetime, a Participant's option to purchase shares hereunder
is exercisable only the by Participant.
8. PARTICIPANTS' ACCOUNTS.
(a) At the time of purchase, each Participant will immediately acquire
full beneficial ownership of all shares purchased for his account. All
shares will be registered in the name of a nominee for the account of the
Participant until delivery is requested. Stock certificates will be issued
to Participants only upon their request or at the time of termination of the
Plan or a
3
<PAGE>
Participant's withdrawal from the Plan. Stock certificates will be issued
only in the name of the Participant as it appears on the Participant's
subscription agreement, or in the Participant's name jointly with a member
of the Participant's family, with a right of survivorship. A Participant who
requests a stock certificate prior to termination of the Plan or his or her
withdrawal from the Plan may not receive such stock certificate until such
time as his account is credited with at least 50 full shares, and may not in
any event receive more than one stock certificate in any calendar quarter.
(b) Each Participant will receive quarterly statements from the Company
as soon as practicable following each Purchase Date. Such statements will
set forth the amounts of payroll deductions, the per share purchase price,
the number of shares purchased and the remaining cash balance, if any.
9. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) During one of the Window Periods specified in Section 6(c) herein,
a Participant may withdraw all, but not less than all of the payroll
deductions credited to his or her account under the Plan by giving written
notice to the Company. If the Participant withdraws from the Offering
Period, all of the Participant's payroll deductions credited to his or her
account will be paid to the Participant as soon as practicable after receipt
of the notice of withdrawal and his or her option for the current Offering
Period will be automatically canceled, and no further payroll deductions for
the purchase of shares will be made during such Offering Period or
subsequent Offering Periods, except pursuant to a new subscription agreement
filed in accordance with Section 5 herein.
(b) Upon termination of the Participant's Continuous Status as an
Eligible Employee prior to a Purchase Date during an Offering Period for any
reason, including retirement or death, the payroll deductions accumulated in
his or her account will be returned to him or her as soon as practicable
after such termination or, in the case of death, to the person or persons
entitled thereto under Section 13 herein, and his or her option will be
automatically canceled.
(c) In the event a Participant fails to remain in Continuous Status as
an Eligible Employee for at least twenty (20) hours per week during an
Offering Period in which he or she is a Participant, he or she will be
deemed to have elected to withdraw from the Plan, and the payroll deductions
credited to his or her account will be returned to the Participant and the
option canceled.
(d) A Participant's withdrawal from an Offering Period will not have
any effect upon his or her eligibility to participate in any Offering Period
or in any similar plan which may hereafter be adopted by the Company.
10. INTEREST. No interest or any other sum whatsoever shall accrue on the
payroll deductions of a Participant in the Plan.
11. STOCK.
(a) The maximum number of shares of the Company's Common Stock which
shall be reserved for sale under the Plan shall be Three Hundred Twenty Five
Thousand (325,000) shares, subject to adjustment upon changes in
capitalization of the Company as provided in Section 17 herein. If the total
number of shares which would otherwise be subject to options granted
hereunder exceeds the number of shares then available under the Plan (after
deduction of all shares for which options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of the shares
remaining available for option grant in as uniform and equitable a manner as
is practicable. In such event, the Company shall give written notice of such
reduction of the number of shares subject to the option to each Participant
affected thereby and shall return
4
<PAGE>
any excess funds accumulated in each Participant's account as soon as
practicable after the next subsequent Purchase Date.
(b) Shares of Common Stock delivered under the Plan may consist, in
whole or in part, of authorized and unissued shares or treasury shares.
12. ADMINISTRATION. The Plan shall be administered by the Committee. The
Committee may, from time to time and consistent with Code Section 423, adopt
rules and regulations (applied on a uniform and nondiscriminatory basis) as it
deems advisable or desirable in its discretion including, without limitation,
rules regarding excessive Plan enrollment, terminations, withdrawals and rate
changes. The administration, interpretation or any other application of the Plan
whatsoever by the Committee shall be final, conclusive and binding upon all
Participants and any other interested parties for all purposes whatsoever.
Members of the Committee are not eligible to participate in the Plan during such
service.
13. DESIGNATION OF BENEFICIARY.
(a) A Participant may file a written designation of a beneficiary who
is to receive shares and/or cash, if any, from the Participant's account
under the Plan in the event of such Participant's death at a time when cash
or shares are held for his or her account.
(b) Such designation of beneficiary may be changed by the Participant
at any time by written notice. In the event of the death of a Participant in
the absence of a valid designation of a beneficiary who is living at the
time of such Participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the
Participant; or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one (1) or more dependents
or relatives of the Participant, or if no spouse, dependent or relative is
known to the Company, then to such other person as the Company may
reasonably designate.
14. TRANSFERABILITY. Neither payroll deductions credited to a
Participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 13 herein) by the Participant. Such
rights and interest shall not at any time be subject to the claims of creditors
nor be liable to attachment, execution or other legal process. Consequently, a
Participant's interest in the Plan is not transferable pursuant to a domestic
relations order. Any such attempt at assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such act
as an election to withdraw funds in accordance with Section 9 herein.
15. USE OF FUNDS. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
16. RIGHTS AS A STOCKHOLDER. None of the rights and privileges of a
stockholder of the Company shall exist with respect to shares purchased under
the Plan unless and until (i) the Participant or his or her nominee is reflected
as the owner of such shares on the Company's stock records or (ii) a stock
certificate representing such shares shall have been issued to the Participant
or his or her nominee, as the case may be.
17. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
(a) Subject to any required action by the stockholders of the Company,
the number of shares of Common Stock covered by each option under the Plan
which has not yet been exercised and the number of shares of Common Stock
which have been authorized for issuance under the Plan
5
<PAGE>
but have not yet been placed under option (collectively, the "Reserved
Shares"), as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, stock dividend,
combination or reclassification of the Common Stock or any other increase or
decrease in the number of shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration". Such adjustment shall be made
by the Board, whose determination in that respect shall be final, binding
and conclusive. Except as expressly provided herein, no issue by the Company
of shares of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock
subject to option.
(b) In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Board. In the event of a proposed sale of all or substantially all of the
assets of the Company, or the merger or consolidation of the Company with or
into another corporation, each option under the Plan shall be assumed or an
equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Board
determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, that the Participant shall have the right to
exercise the option as to all of the optioned stock, including shares as to
which the option would not otherwise be exercisable. If the Board makes an
option fully exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Board shall notify the Participant that
the option shall be fully exercisable, and the option will terminate upon
the expiration of such period.
(c) The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserved Shares, as well
as the price per share of Common Stock covered by each outstanding option,
in the event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of
shares of its outstanding Common Stock, and in the event of the Company
being consolidated with or merged into any other corporation.
18. AMENDMENT OR TERMINATION. The Board may at any time and for any reason
terminate or amend the Plan. Except as provided in Section 17 herein, no such
termination will affect options previously granted. Except as provided in said
Section 17, no amendment may make any change in any option theretofore granted
which adversely affects the rights of any Participant. In addition, to the
extent necessary, but only to such extent, to comply with Exchange Act
Rule 16b-3 or with Code Section 423 (or any successor rule or provision or any
other applicable law or regulation), the Company shall obtain stockholder
approval of an amendment in such a manner and to such a degree as so required.
19. NOTICES. All notices or other communications by a Participant to the
Company in connection with the Plan shall be deemed to have been duly given when
actually received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
20. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by the
stockholders of the Company within twelve (12) months before or after the date
the Plan is adopted. Such stockholder approval shall be sought in the manner and
degree required under Code Section423.
6
<PAGE>
21. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Shares shall not be issued with respect to an option unless the
exercise of such option and the issuance and delivery of such shares
pursuant thereto shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act, the
Exchange Act, any applicable foreign laws, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon
which the shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
(b) As a condition to the exercise of an option, if required by
applicable securities laws, the Company may require the Participant for
whose account the option is being exercised to represent and warrant at the
time of such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such
shares if, in the opinion of counsel for the Company, such a representation
is required by any of the aforementioned applicable provisions of law.
(c) Any sale of shares of Common Stock by an Participant during his or
her employment by the Company or a Subsidiary, or following termination of
the Eligible Employee's employment for any reason other than death, shall at
all times be subject to, and shall be permitted only to the extent that any
such sale complies with, the policies and procedures of the Company
concerning insider trading that are applicable to the Participant or were
applicable to the Participant on the date of such termination of employment,
as the case may be.
22. ADMINISTRATIVE EXPENSES. All expenses incurred in the administration
of the Plan by the Committee, or otherwise, including legal fees and expenses,
shall be paid and borne by the Company. Any brokerage fees for the purchase of
shares by a Participant shall be paid by the Company, but any fees, taxes and
other expenses whatsoever (including brokerage fees) for the transfer, sale or
resale of shares by a Participant, or the issuance of physical share
certificates, shall be borne solely by the Participant.
23. NO EMPLOYMENT RIGHTS. The Plan does not, directly or indirectly,
create any right for the benefit of any employee or class of employees to
purchase any shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company or
any Subsidiary. The Plan shall not be deemed to interfere in any way with the
Company's right to terminate, or otherwise modify, an employee's employment at
any time with or without cause; nor, upon any dismissal, shall the Plan be
deemed to confer or grant any right or interest in any specific assets of the
Company other than as expressly provided in the Plan.
24. GOVERNING LAW. The substantive laws of the State of Maryland will
govern all matters relating to this Plan except to the extent such laws are
superseded by the laws of the United States.
25. TERM OF PLAN. The Plan shall become effective upon the earlier to
occur of its adoption by the Board or its approval by the stockholders of the
Company as described in Section 20 herein. It shall continue in effect for a
term of twenty (20) years unless sooner terminated under Section 18 herein.
7
<PAGE>
PROXY CARD
CONDOR TECHNOLOGY SOLUTIONS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Kennard F. Hill and John F. McCabe (the
"Proxy Committee") or any of them as proxies, with full power of
substitution, to vote as directed all Shares of Condor Technology Solutions,
Inc. the undersigned is entitled to vote at the 2000 Annual Meeting of
Stockholders of Condor Technology Solutions, Inc. to be held at the executive
offices of the Company at 170 Jennifer Road, Suite 325, Annapolis, Maryland
on May 16, 2000, at 10:00 a.m. THIS PROXY AUTHORIZE(S) EACH OF THEM TO VOTE
AT HIS DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF. IF THIS CARD CONTAINS NO SPECIFIC VOTING
INSTRUCTIONS, MY (OUR) SHARES WILL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATION OF THE BOARD OF DIRECTORS.
<TABLE>
<S> <C> <C> <C>
/X/ Please mark your votes
as in this example
The Board of Directors recommends a vote FOR election of directors and FOR proposals 2 and 3.
FOR ALL NOMINEES WITHHELD FOR ALL
LISTED AT RIGHT
(except as
marked)
1. Election of Kennard F. Hill, Ann Torre Grant and William M. / / / /
Newport as Class III Directors for a three-year term ending
at the annual meeting in 2003
</TABLE>
To withhold authority to vote for any individual nominee, write that nominee's
name on the line below:
- --------------------------------------------------------------------------------
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
FOR AGAINST ABSTAIN
2. Approval of adoption of 2000 Employee Stock Purchase Plan / / / / / /
FOR AGAINST ABSTAIN
3. Approval of Appointment of Independent Accountants / / / / / /
</TABLE>
The signer hereby revokes all proxies heretofore given by the signer to vote at
said meeting or any adjournments thereof.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR election of the three
Class III directors and FOR proposals 2 and 3.
Date:
__________________________________
Signature(s):
__________________________________
__________________________________
__________________________________
NOTE: Please sign exactly as name
appears hereon. Joint owners
should each sign. When
signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such.
