UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)*
TELOS CORPORATION
(NAME OF ISSUER)
12% CUMULATIVE EXCHANGEABLE REDEEMABLE PREFERRED STOCK
(TITLE OF CLASS OF SECURITIES)
126520 20 4
(CUSIP NUMBER)
Timothy G. Ewing
Fisher Ewing Partners
2200 Ross Avenue
Suite 4660 West
Dallas, Texas 75201
(214) 999-1900
(NAME, ADDRESS, TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES
AND COMMUNICATIONS)
DECEMBER 23, 1996
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with the statement [ ].
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent
of the class of securities described in Item 1; and (2) has filed no
amendment subsequent thereto reporting beneficial ownership of five percent
or less of such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
Page 1 of 7 Pages
<PAGE>
CUSIP No. 126520 20 4 Page 2 of 7 Pages
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
FISHER EWING PARTNERS
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS PURSUANT [ ]
TO ITEMS 2(d) OR 2(e)
NOT APPLICABLE
6. CITIZENSHIP OR PLACE OR ORGANIZATION
TEXAS
7. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH SOLE VOTING POWER
714,317
8. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH SHARED VOTING POWER
-0-
9. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH SOLE DISPOSITIVE POWER
714,317
10. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH SHARED DISPOSITIVE POWER
-0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
714,317
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [ ]
CERTAIN SHARES
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.87%
14. TYPE OF REPORTING PERSON
PN
<PAGE>
CUSIP No. 126520 20 4 Page 3 of 7 Pages
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
VALUE PARTNERS, LTD.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF GROUP (a) [ ]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS
WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS PURSUANT
TO ITEMS 2(d) OR 2(e)
NOT APPLICABLE
6. CITIZENSHIP OR PLACE OR ORGANIZATION
TEXAS
7. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH SOLE VOTING POWER
714,317
8. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH SHARED VOTING POWER
-0-
9. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH SOLE DISPOSITIVE POWER
714,317
10. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING
PERSON WITH SHARED DISPOSITIVE POWER
-0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
714,317
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES [ ]
CERTAIN SHARES
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.87%
14. TYPE OF REPORTING PERSON
PN
<PAGE>
CUSIP No. 126520 20 4 Page 4 of 7 Pages
AMENDMENT NO. 4 TO SCHEDULE 13D
This statement amends ("Amendment No. 4") the Schedule 13D (the "Schedule"),
and Amendment No. 1 to the Schedule ("Amendment No. 1"), Amendment No. 2 to
the Schedule ("Amendment No. 2") and Amendment No. 3 to the Schedule
("Amendment No. 3") filed by Value Partners, Ltd. ("VP") and Fisher Ewing
Partners ("FEP") with the Securities and Exchange Commission on November 13,
1995, February 15, 1996, May 13, 1996 and November 6, 1996, respectively,
with respect to the 12% Cumulative Exchangeable Redeemable Preferred Stock,
$.01 par value per share ("Exchangeable Preferred Stock"), of Telos
Corporation, a Maryland corporation (the "Issuer"). (The Schedule, Amendment
No. 1, Amendment No. 2, Amendment No. 3 and Amendment No. 4 are collectively
referred to herein as the "Schedule" where the context so permits.) All
defined terms refer to terms defined herein, in the Schedule, in Amendment
No. 1, Amendment No. 2 and Amendment No. 3. Notwithstanding this Amendment
No. 4, the Schedule and Amendment No. 1, Amendment No. 2 and Amendment No. 3
speak as of their respective dates. The Schedule, Amendment No. 1, Amendment
No. 2 and Amendment No. 3 are amended only to the extent set forth below:
ITEM 4. PURPOSE OF TRANSACTION appearing in the Schedule is deleted in
its entirety and replaced with the following:
"ITEM 4. PURPOSE OF TRANSACTION
The purpose of the acquisition of shares of the Issuer's Exchangeable
Preferred Stock by VP and FEP is for investment. The shares reported on this
Schedule were not purchased with the intention of exercising control over the
Issuer. Although the Exchangeable Preferred Stock is non-voting stock, it
has the exclusive right to vote as a class for up to two directors if at any
time or times dividends payable on the Exchangeable Preferred Stock shall be
in arrears and unpaid for three consecutive full semi-annual periods. The
Issuer's Form 10-Q for the quarterly period ended September 30, 1996 stated
that no dividends on the Exchangeable Preferred Stock were declared or paid
during fiscal years 1992 through 1995 or during fiscal year 1996.
Consequently, VP and FEP believe that, pursuant to the terms of the
Exchangeable Preferred Stock, there are currently two vacancies on the Board
of Directors of the Issuer, constituting the "Class D" directors, who may be
elected exclusively by the holders of the Exchangeable Preferred Stock and
that the holders of the Exchangeable Preferred Stock currently have the right
to elect, voting separately as a class, two directors to the Board of
Directors of the Issuer at any annual or special meeting of the stockholders
of the Issuer held for the purpose of electing directors.
VP currently intends to exercise these voting rights and, in that
regard, on December 23, 1996 mailed a letter to the Issuer which: (i)
requested that the Issuer call a special meeting of stockholders to be held
on January 31, 1997 to elect the two "Class D" directors which may be elected
by holders of the Exchangeable Preferred Stock; (ii) if the special meeting
is not called as requested by January 23, 1997, VP, as a 10.0% stockholder
has called for a special meeting of the holders of the Exchangeable Preferred
Stock to be held on Friday, February 28, 1997 at 2:00 p.m. at the offices of
VP's special counsel located at 734 15th Street, N.W., Washington, D.C.
20005 and requested, among other things, that the Company provide to holders
of record of the Exchangeable Preferred Stock 30 days written notice of the
special meeting; and (iii) nominated two persons, Mr. Julio E. Heurtematte,
Jr. and Mr. Malcolm M. B. Sterrett, to run as candidates for the Class D
director positions. VP has also requested that the Issuer provide to it
the stock books of the Issuer relating to the holders of the Exchangeable
Preferred Stock.
VP currently intends to do one or more of the following: (i) vote its
shares of the Exchangeable Preferred Stock in favor of one or more of its
(or other) nominees for the Class D director positions; (ii) enter
into discussions with the Issuer with respect to its rights as a holder of
the Exchangeable Preferred Stock; (iii) take such other action, in its sole
discretion, to facilitate the above, including contacting other holders of
the Exchangeable Preferred Stock and possibly, the solicitation of proxies
in favor of VP's or another person's nominees; (iv) seek judicial enforcement
of its legal rights as a stockholder of the Issuer, if necessary, in VP's
discretion; (v) exercise any or all rights available to holders of the
Exchangeable Preferred Stock; or (vi) take any other action it may deem to
be appropriate and in its interest as a holder of the Exchangeable Preferred
Stock which may or may not be consistent with the above.
In the future, VP or FEP may determine to purchase additional shares of
the Issuer's Exchangeable Preferred Stock (or other securities of the
Issuer), or VP or FEP may determine to sell shares of the Exchangeable
Preferred Stock. Any such determination will depend upon a number of
factors, including market prices, the Issuer's prospects and alternative
investments.
While VP and FEP intend to exercise their rights as stockholders, except
as set forth above, none of VP, FEP or Messrs. Fisher and Ewing currently has
any plans or proposals which relate to or would result in: (a) the
acquisition by any person of additional securities of the Issuer or the
disposition of securities of the Issuer; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving the
Issuer or any of its subsidiaries; (c) a sale or transfer of a material
amount of assets of the Issuer or any of its subsidiaries; (d) any change in
the present Board of Directors or management of the Issuer, including any
plans or proposals to change the number or term of directors or to fill any
existing vacancies on the Board; (e) any material change in the present
capitalization or dividend policy of the Issuer; (f) any other material
change in the Issuer's business or corporate structure; (g) changes in the
Issuer's Articles of Incorporation, Bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of the
Issuer by any person; (h) causing a class of securities of the Issuer to be
deleted from a national securities exchange or to cease to be authorized or
quoted in an inter-dealer quotation system of a registered national
securities association; (i) a class of equity securities of the Issuer
becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Exchange Act; or (j) any action similar to any of those
enumerated above."
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit A - Letter from VP to Issuer
dated December 23, 1996.
<PAGE>
CUSIP No. 126520 20 4 Page 5 of 7 Pages
SIGNATURES
After reasonable inquiry and to the best of the knowledge and belief of
the undersigned, the undersigned certifies that the information set forth in
this Amendment No. 4 to the Schedule 13D is true, complete and correct.
VALUE PARTNERS, LTD.
By: Fisher Ewing Partners,
its General Partner
/S/ TIMOTHY G. EWING
---------------------
Timothy G. Ewing, Partner
Date: December 23, 1996
FISHER EWING PARTNERS
By: /S/ TIMOTHY G. EWING
--------------------
Timothy G. Ewing, Partner
Date: December 23, 1996
<PAGE>
CUSIP No. 126520 20 4 Page 6 of 7 Pages
EXHIBIT A
Letter from VP to Issuer
dated December 23, 1996
VALUE PARTNERS, Ltd.
Suite 4660 West
2200 Ross Avenue
Dallas, Texas 75201
December 23, 1996
VIA REGISTERED MAIL
RETURN RECEIPT REQUESTED
Secretary
Telos Corporation
19886 Ashburn Road
Ashburn, VA 20147
Re: Request for Call of Special Meeting of the Stockholders of the 12%
Cumulative Exchangeable Redeemable Preferred Stock
Dear Sir or Madam:
Value Partners, Ltd. ("VP") is the holder of record of 714,317 shares
or 19.87% of the 12% Cumulative Exchangeable Redeemable Preferred Stock
(the "Exchangeable Preferred Stock") of Telos Corporation (the "Company").
Based upon the Company's Form 10-Q for the quarter ended September 30, 1996,
no dividends have been paid on the Exchangeable Preferred Stock for the
fiscal years 1992 through 1995 or for the nine months ended September 30,
1996. As you are aware, pursuant to the Company's Articles of Incorporation,
as amended (the "Articles"), holders of the Exchangeable Preferred Stock are
entitled to receive cumulative dividends at the annual rate of 12% ($1.20)
per share. As noted in the Articles, "[d]ividends payable on shares of the
Exchangeable Preferred Stock (whether payable in cash or in stock) shall be
fully cumulative and SHALL ACCRUE (WHETHER OR NOT EARNED OR DECLARED),
without interest, from the date of issuance of the Exchangeable Preferred
Stock at the Effective Date." (Emphasis ours.) Consequently, the dividends
payable on the Exchangeable Preferred Stock are in arrears and unpaid.
The Articles further provide that if, at any time, dividends on the
Exchangeable Preferred Stock shall be in arrears and unpaid for three
consecutive full semi-annual periods, then the number of directors
constituting the Board of Directors of the Company, without further action,
shall be increased by up to two directors and the holders of the
Exchangeable Preferred Stock shall have the exclusive right, voting
separately as a class, to elect the directors of the Company to fill
such newly created directorships, which directors shall be designated
as "Class D" directors. These voting rights of the holders of the
Exchangeable Preferred Stock continue until the Company has paid in full
all accumulated dividends. Accordingly, there are now two vacancies on
the Company's Board of Directors which may be filled by a vote of the
Exchangeable Preferred Stock, the voting rights of which have vested
pursuant to the terms of the Articles.
As a holder of record of the Exchangeable Preferred Stock, VP hereby
requests that the Secretary (or other proper officer) of the Company call
a special meeting of the holders of the Exchangeable Preferred Stock of
the Company on January 31, 1996 for the purpose of electing the two
Class D directors to the Company's Board of Directors. It is our preference
that the meeting be held at the principal office of the Company and that
at least 30 but not more than 40 days written notice be given to all holders
of record of the Exchangeable Preferred Stock.
If the Secretary of the Company fails to call, or cause to be called,
such a special meeting within 30 days of the postmark of this letter, then
as a holder of more than 10% of the Exchangeable Preferred Stock, VP hereby
designates Value Partners, Ltd. as the holder of the Exchangeable Preferred
Stock to call such a special meeting at the Company's expense, and VP
hereby calls such meeting upon the following terms: (i) the special meeting
of stockholders of the Exchangeable Preferred Stock shall be held on
Friday, February 28, 1997 at 2:00 p.m. at the law offices of Elias, Matz,
Tiernan & Herrick L.L.P., located at 734 15th Street, N.W., 12th Floor,
Washington, D.C. 20005; (ii) the Company shall provide 30 days written
notice of the special meeting to all holders of the Exchangeable Preferred
Stock; and (iii) voting shall be by proxy or ballot and not by voice vote.
In connection therewith, as a stockholder entitled to vote at this
special meeting, VP hereby requests that the Company make available to VP,
its agents and counsel the stock books of the Company relating to the
holders of the Exchangeable Preferred Stock on January 10, 1997 at 10:00
a.m. Please provide a photocopy machine for this purpose. Because the
Articles state that the meeting is to be at the expense of the Company,
the cost to copy such list should also be a Company expense. In lieu of
this visit, this request may be complied with by providing to VP a current
list of all holders of the Exchangeable Preferred Stock on or before
January 10, 1997.
In addition, VP hereby nominates Mr. Julio E. Heurtematte, Jr. and Mr.
Malcolm M. B. Sterrett to serve as the Class D directors (the "Nominees").
Neither of the Nominees is the beneficial owner of any shares of the
Exchangeable Preferred Stock. Attached hereto as Exhibit A are the resumes
of such nominees. Each such nominee has provided his written consent to
serve as a Class D director, if elected. The consents are attached hereto
as Exhibit B. Neither VP nor either of the nominees: (i) is an officer or
director of the Company; (ii) has had any business relationship with the
Company in the past fiscal year of the Company (other than as a holder of
the Exchangeable Preferred Stock); (iii) is an adverse party to the Company
in any material legal proceedings; (iv) has engaged in any material
transaction with the Company during the Company's last fiscal year in which
any of them had a direct or indirect material interest; (vi) has any known
family relationship with any director or officer of the Company or with
each other; (vii) is indebted to the Company; or (viii) has entered into
any understanding or arrangement pursuant to which the nominees were
selected as such. Please contact our counsel, named below, if further
information in this regard is required. VP does not currently expect to
bring any other business before the special meeting.
Enclosed also is Amendment No. 4 to VP's Schedule 13D, amended to
reflect the tendering of this request.
Your cooperation in this matter will be greatly appreciated. Our
special counsel will contact Mr. Brownley shortly to discuss the
arrangements to be made for the special meeting. VP does not view this
request as a hostile act to acquire control of the Company and accordingly
expects the Company to comply in good faith with the requirements of its
Articles. Should you have any questions concerning this correspondence or
wish to discuss any details of the request, please feel free to contact our
special counsel, Timothy B. Matz, Esq. at (202) 347-0300.
Sincerely,
VALUE PARTNERS, LTD.
By: Fisher Ewing Partners
By: /S/TIMOTHY G. EWING
Timothy G. Ewing, Partner
cc: Timothy B. Matz, Esq.
<PAGE>
EXHIBIT A
RESUMES OF
MR. HEURTEMATTE
AND
MR. STERRETT
<PAGE>
JULIO E. HEURTEMATTE, JR.
5028 LOWELL STREET, N.W.
WASHINGTON, D.C. 20016
(202)244-5686
* Born October 24, 1935. San Jose, Costa Rica.
* Graduated from the United States Military Academy (1957)
* Graduate studies in Engineering Administration - The George Washington
University (1957-1958)
* Became United States Citizen in September, 1994.
1989-PRESENT PRIVATE CONSULTANT
Consultant on International projects, international trade, and investments.
1963-1989 INTER-AMERICAN DEVELOPMENT BANK
DEPUTY MANAGER FOR PROJECT ANALYSIS (1979-1989)
- - Headed a sub-department of approximately 80 professionals (engineers,
economists, and financial analysts) with an annual budget of over US$9.3
million in 1989. Responsible for the evaluation of 40 to 50 energy,
infrastructure, industrial and credit projects yearly, resulting in annual
loans between US$1.2 and 2.5 billion (60%-70% of Bank's total lending).
Represented the Bank at numerous technical, financial and economic meetings
worldwide, and conducted procurement seminars in the United States, Europe,
Japan and Israel.
MEMBER, PENSION FUND INVESTMENT COMMITTEE (1979-1989), VICE CHAIRMAN (1987-
1989) RETIREE REPRESENTATIVE (1989-1992)
The Committee was created in 1979 to assume fiduciary responsibility and
direct the investments of the Pension Fund (US$600 million in 1992). As a
founding member of the Committee, participated in the design and
implementation of a new investment policy that allocates the assets of the
Fund in equities (U.S. and foreign), fixed income, and real estate, utilizing
specialized managers in each of the asset categories.
Participated in the group that formulates and sets the strategic asset
allocation policy. Chaired working groups responsible for the selection and
dismissal of the equity and fixed income managers.
DIVISION CHIEF, FINANCIAL INSTITUTIONS (1975-1978)
- - In charge of a group of 15 professionals. Responsible for the
evaluation of development projects and programs which use specific banks or
the banking system of a country as an intermediary to provide credit to
private firms or individuals for productive projects.
ADVISOR TO THE PROJECT ANALYSIS DEPARTMENT (1973-1975)
- - Conducted special studies related to the Bank's organization, systems,
and the analysis of projects.
LOAN AREA CHIEF, OPERATIONS DEPARTMENT (1968-1973)
- - Supervised professional staff of 6-8 loan officers. Responsible for
the identification, programming, and negotiation of Bank's loans in Colombia,
Ecuador, Venezuela, and English speaking Caribbean countries.
SPECIAL ASSISTANT TO THE EXECUTIVE VICE PRESIDENT (1965-1968)
The Executive Vice President is the Bank's Chief Operational Officer and
Chairman of the Loan Committee.
- - Reviewed the loan documents presented to the Loan Committee, analyzed
policy papers and procedural Instructions, reviewed budgets, and coordinated
staff meetings.
ENGINEER, PROJECT ANALYSIS DEPARTMENT (1963-1965)
- - Participated in the analysis of highway and water projects in various
countries.
- - Organized the Bank's unit that deals with consulting engineering firms.
1958-1963 CONSULTING ENGINEER
Worked in New York City as a civil engineer for Tippetts-Abbett-McCarty-
Stratton (TAMS) and the Leonard Wegman Company.
- - Participated in the design of various highway, railroad, and water
projects.
- - Project engineer in charge of design of a section of Interstate Route
81 in the state of New York.
1987-1994 TRINITY COLLEGE (D.C.)
Member of the Board of Trustees.
Chairman of the Finance Committee, (1988-1994).
<PAGE>
MALCOLM M. B. STERRETT
4516 WETHERILL ROAD
BETHESDA, MARYLAND 20816
(301) 229-8999 FAX (301) 229-8877
PERSONAL
Date of Birth: September 21, 1942
Marital Status: Married, one child
EDUCATION
Vanderbilt University School of Law, J.D., 1967
The Hague Academy of International Law, 1966
Princeton University, B.A., 1964
EMPLOYMENT
Partner, Pepper Hamilton & Scheetz, Washington, D.C. (1989-1993)
My practice concentrated in the areas of transportation, health, and
general administrative law.
General Counsel, United States Department of Health and Human Services
(1988-1989)
Appointed by the President as the legal counsel for the Secretary.
I was responsible for providing all legal services with respect to
the programs, operations, and activities of the Department and for
supervising a staff of over 500 lawyers in addition to other support
personnel.
Commissioner, Interstate Commerce Commission (1982-1988)
Appointed by the President as a Republican member of the Commission.
The ICC was charged with the responsibility for regulating interstate
transportation by railroads and motor and water carriers. I also served
as a Government Member of the Administrative Conference of the United
States.
Vice President and General Counsel, United States Railway Association
(1980-1982)
USRA was non-profit Federal Corporation established to administer the
investment of public funds in Conrail and monitoring Conrail's
performance. The Association also represented the Federal Government
in the complex litigation stemming from the reorganization of the
Northeast bankrupt railroads. In addition to managing the litigation,
my responsibilities included corporate affairs, Congressional relations,
and the development of the Association's policy for the improvement of
rail service in the Northeast.
Staff Director and Counsel, U.S. Senate Committee on Commerce.
Science and Transportation (1976-1980)
Staff Counsel, U.S. Senate Committee on Commerce (1972-1976)
As Staff Director, I was responsible for the development and
administration of the staff which supported the Republican senators
of the Committee in their legislative and oversight activities.
As Counsel, I was the chief counsel to the Republican members in
all areas of the Committee's jurisdiction. My responsibilities
included legislative strategy and drafting, assisting senators
during hearings, executive sessions, floor debate, and conferences,
as well as communication with the House and numerous Executive
departments and agencies.
Attorney-Advisor, Interstate Commerce Commission (1967-1972)
I provided legal services with regard to motor carrier and railroad
regulation and served on the personal staff of one the Commissioners.
<<PAGE>
EXHIBIT B
CONSENTS TO SERVE
<PAGE>
CONSENT TO SERVE
The undersigned, a nominee of Value Partners, Ltd., does hereby provide
this written consent to Telos Corporation (the "Company") and declares that
he consents to being named in the Company's proxy statement as a nominee to
be a Class D director and to serve as a Class D director of the Company if
and when elected by the holders of the 12% Cumulative Exchangeable Redeemable
Preferred Stock of the Company.
Dated: December 12, 1996
By: /S/ JULIO E. HEURTEMATTE, JR.
Name: JULIO E. HEURTEMATTE, JR.
<PAGE>
CONSENT TO SERVE
The undersigned, a nominee of Value Partners, Ltd., does hereby provide
this written consent to Telos Corporation (the "Company") and declares that
he consents to being named in the Company's proxy statement as a nominee to
be a Class D director and to serve as a Class D director of the Company if
and when elected by the holders of the 12% Cumulative Exchangeable
Redeemable Preferred Stock of the Company.
Dated: December 20, 1996
By: /S/ MALCOLM M.B. STERRETT
Name: MALCOLM M. B. STERRETT
