Certain Relationships and Related Transactions
Our policies and practices with respect to related person transactions were adopted on October 25, 2007 and amended on May 14, 2021, and are available on our website at https://investors.telos.com/
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Generally, any transaction between the Company and a related person in which the aggregate amount exceeds $120,000 is reviewed and approved by the Audit Committee. For purposes of this policy, a related person is any director or executive officer of Telos, any nominee for director, any holder of 5% or more of the Company’s voting securities, any immediate family members of the foregoing persons, and any firm, corporation or other entity in which any of the foregoing persons is employed or is a partner or principal or in a similar position or in which such person has 10% or greater beneficial ownership interest.
Mr. Emmett Wood, the brother of the Chairman and CEO, Mr. John B. Wood, was an employee of the Company from 1996 and held the position of Executive Vice President, Marketing Strategy until his resignation on February 7, 2023. The amounts earned by Mr. Emmett Wood as total compensation, including stock awards and other benefits, for 2023, 2022 and 2021 were $249,407, $3,045,669, and $4,158,522, respectively. The Company and Mr. Emmett Wood entered into an Amended Employment Agreement on May 13, 2013. This agreement is substantially similar to the employment agreement between the Company and Mr. Mark Griffin, described under the caption “Executive Officer Employment Agreements” beginning on page
31
. As of February 8, 2023, Mr. Emmett Wood owned 199,785 vested shares of the Company’s Common Stock, and 9,037 shares of Common Stock held for his benefit in the Company’s 401(k) Shared Savings Plan.
General Maluda, through his entity, JK Maluda LLC, and the Company were parties to a consulting agreement under which General Maluda provided certain consulting services to the Company. For his services from January 1 through June 30, 2023, General Maluda received a grant on January 3, 2023 of Telos’ restricted share units valued at $87,500 (16,849 restricted share units), of which 8,430 shares vested on March 8, 2023 and 8,429 shares vested on May 18, 2023. For services rendered from July 1 to December 31, 2023, the consulting agreement was amended. General Maluda received a retainer of $7,500 per month; $21,000 for attending seven events ($3,000 per event), such as trade shows or customer meetings; and a bonus payment of $25,000 for his role in facilitating the renewal and extension of a specific contract. The consulting agreement between Gen. Maluda and the Company expired on December 31, 2023.
Meetings of the Board of Directors and Committees of the Board of Directors
During the fiscal year ended December 31, 2023, the Board of Directors held five meetings. Each director attended at least 75%, in the aggregate, of all meetings, in person or virtually, of the Board and the respective committees of the Board on which they served.
The Company encourages all directors to attend the annual meeting of stockholders, and submit their proxy cards. All directors, except Ms. Carroll, attended the in-person 2023 Annual Meeting of Stockholders.
The Company has standing Audit, Management Development and Compensation, and Nominating and Corporate Governance Committees.
Audit Committee
The Audit Committee was established to assist the Board of Directors in fulfilling its oversight responsibilities for (1) the integrity of the Company’s financial statements, (2) the Company’s compliance with legal and regulatory requirements, (3) the independent registered public accounting firm’s qualifications and independence, and (4) the performance of the Company’s internal audit function and independent registered public accounting firm. The Audit Committee currently consists of directors Jacobs (chairman), Carroll, and Schaufeld, each of whom is an independent director. In 2023, the Audit Committee met five times. The Audit Committee charter is available on the Company’s website at https://investors.telos.com/. The Board has determined that Mr. Jacobs is an “audit committee financial expert” as defined by the rules adopted by the Securities and Exchange Commission (“SEC”) and is independent.
Management Development and Compensation Committee
The Management Development and Compensation Committee (the “Compensation Committee”) was established for the purpose of reviewing, determining and approving, or recommending to the Board for approval, all forms of compensation to be provided to the Company’s executive officers and directors and any stock compensation to be provided to all employees, directors or consultants. The Compensation Committee currently consists of directors
