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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
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[ ] Preliminary Information Statement
[ ] CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14C-5(D)(2))
[X] Definitive Information Statement
TELOS CORPORATION
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TELOS CORPORATION
19886 ASHBURN ROAD
ASHBURN, VA 20147
(703) 724-3800
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INFORMATION STATEMENT
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GENERAL INFORMATION
General
This Information Statement is being furnished by Telos Corporation, a
Maryland corporation ("Telos" or the "Company"), formerly known as C3, Inc., in
connection with the special meeting of the holders of the its 12% Cumulative
Exchangeable Redeemable Preferred Stock (the "Exchangeable Preferred Stock") to
be held on July 31, 1998 at 10:00 a.m. at the law offices of McGuire, Woods,
Battle & Boothe, LP, The Army and Navy Club Building, 1627 Eye Street, N.W.,
Washington, D.C. 20006 (the "Special Meeting").
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Purpose of Meeting
The purpose of the Special Meeting is to allow the holders of the
Exchangeable Preferred Stock to elect two Class D Directors to the Telos Board
of Directors. On May 7, 1998, the Company mailed a Notice of Special Meeting
setting forth the business to be conducted at the Special Meeting. Pursuant to
Section 5 of Article II of the Company's Bylaws, no other business may be
conducted at the Special Meeting.
Reason for Election
The holders of the Exchangeable Preferred Stock are entitled to elect two
Class D directors because dividends on the Exchangeable Preferred Stock are in
arrears and unpaid for three consecutive full semi-annual periods. Telos did not
believe that the holders of the Exchangeable Preferred Stock were entitled to
voting rights to elect class D Directors because the Company was unable to pay
the dividends. Because certain shareholders asserted that they were entitled to
the voting rights, Telos initiated a Declaratory Judgment action for an
interpretation of the disputed provision. On May 4, 1998, the Court entered a
Final Order declaring that the holders of the Exchangeable Preferred stock were
entitled to the voting rights.
Nominations
Telos has received nominations of the following persons for election as
Class D Directors:
Richard M. Goltermann
Marshall Greenblatt
Julio E. Heurtematte, Jr.
Richard C. Litsinger
Malcolm M.B. Sterrett
Applicable rules of the Securities and Exchange Commission (the "SEC")
require that, if proxies are solicited from the holders of the Exchangeable
Preferred in support of the election of any nominee to the Board of Directors of
the Company, the person soliciting such holders must provide them with a proxy
statement containing certain prescribed information, including information
concerning the nominees. Telos is aware that Value Partners, Ltd. ("Value
Partners") filed a preliminary proxy statement with the SEC on June 11, 1998
stating its intention to solicit proxies in support of the election of nominees
Heurtematte and Sterrett as Class D Directors. Information concerning nominees
Heurtematte and Sterrett is included in such preliminary proxy statement. Telos
believes, based upon information contained in Value Partners SEC filing, that
Value Partners intends to disseminate the proxy statement in final form to
holders of the Exchangeable Preferred Stock in connection with its proxy
solicitation. Telos does not know if any proxy solicitation will be made in
support of the election of nominees Greenblatt, Goltermann or Litsinger or in
opposition to the election of nominees Heurtematte and Sterrett. The Company
assumes no responsibility for the accuracy or completeness of any information
contained in any proxy material furnished to any holder of Exchangeable
Preferred Stock concerning the election of any Class D Director.
The Board of Directors of Telos does not take any position with respect to
the election of any of the nominees for election as Class D Directors, is not
soliciting any proxies in connection with the Special Meeting and does not make
any recommendation "For" or "Against" the election of any nominee.
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Voting At Meeting
The record date for determining the shareholders entitled to vote at the
Special Meeting is June 26, 1998 ("Record Date"). As of the Record Date, there
were 3,595,586 shares of Exchangeable Preferred Stock outstanding. Each share of
Exchangeable Preferred Stock is entitled to one vote at the Special Meeting on
the matter properly presented at the meeting and may be voted for as many
individuals as there are directors to be elected. There is no cumulative voting.
Directors are elected by a plurality of the votes cast with a quorum present. A
quorum consists of stockholders representing, either in person or by proxy, a
majority of the outstanding Exchangeable Preferred Stock entitled to vote at the
Special Meeting. Abstentions are considered in determining the presence of a
quorum but will not affect the plurality vote required for the election of
directors.
If the election of the Class D directors is contested, under rules
applicable to broker-dealers voting shares beneficially owned by customers, the
proposal for the election of the nominees would be considered a
"non-discretionary" item upon which broker-dealers may not vote on behalf of
their clients unless such clients have furnished voting instructions. As a
result, there may be broker non-votes at the Special Meeting. However, broker
non-votes will have no effect on the election of directors by a plurality vote.
If there is no contest, the proposal for the election of the nominees would be
considered a "discretionary" item upon which broker-dealers may vote on behalf
of their clients where the clients have not submitted voting instructions. In
that case, there would be no broker non-votes at the Special Meeting.
Security Ownership of Certain Beneficial Owners and Management
Information concerning the security ownership of management and those
persons believed by the Company to be beneficial owners of more than 5% of the
Company's Class A Common Stock and the Exchangeable Preferred Stock is
incorporated herein by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, which was filed with the SEC on March 31, 1998
(the "1997 Form 10-K").
Directors and Executive Officers
Information concerning the directors and executive officers of the Company
is incorporated herein by reference to the Company's 1997 Form 10-K.
Meetings of the Board of Directors and Committees of the Board of Directors
Information concerning the number of and attendance at meetings of the
Board of Directors of the Company as well as the nature, composition and
frequency of meetings of the committees of the Board of Directors of the Company
is incorporated herein by reference to the Company's 1997 Form 10-K.
Certain Relationships and Related Transactions
Information concerning certain relationships and related transactions
between the Company and certain of its current and former officers and directors
is incorporated herein by reference to the Company's 1997 Form 10-K.
Independent Auditors
The public accounting firm of Price Waterhouse LLP has been selected as the
independent auditors of the Company for the year ended December 31, 1998.
A representative of Price Waterhouse LLP will not be present at the meeting
unless prior to the day of the meeting the Secretary of the Company has received
written notice from a stockholder addressed to the Secretary of the Company at
19886 Ashburn Road, Ashburn, Virginia, 20147, that such stockholder will attend
the meeting and wishes to ask questions of a representative of the firm.
Information Incorporated by Reference
Certain of the information in this Information Statement is incorporated by
reference to the Company's 1997 Form 10-K. A copy of the Company's 1997 Form
10-K is available without charge to stockholders upon written request addressed
to the Secretary of the Company at 19886 Ashburn Road, Ashburn, Virginia 20147.
The Company's 1997 Form 10-K and other periodic and other reports filed by the
Company with the SEC are also available at the SEC's worldwide website
(http:/www.sec.gov).
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Telos Corporation
By: /S/ Gerald D. Calhoun
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Gerald D. Calhoun
Secretary
July 10, 1998
