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Mantech International Corp – ‘424B4’ on 2/8/02

On: Friday, 2/8/02 · Accession #: 950168-2-108 · File #: 333-73946

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 2/08/02  Mantech International Corp        424B4                  1:367K                                   Donnelley Financial/FA

Prospectus — Rule 424(b)(4)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B4       Prospectus                                           112    562K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Backlog and GSA Schedule Contract Value Business Capitalization Common Stock Cost of services Description of Capital Stock, Certificate of Incorporation and Bylaws Dilution Discontinued Operations Dividend Policy Experts George J. Pedersen Gross profit Income from continuing operations Income from operations Independent Auditors' Report Index to Consolidated Financial Statements Information Technology Solutions John A. Moore, Jr Legal Proceedings Management and Key Advisors Management's Discussion and Analysis of Financial Condition and Results of Operations ManTech International Corporation Mr. Pedersen, Our Chairman, Chief Executive Officer and President, Will Continue To Control Our Company Notes to Consolidated Financial Statements Offering, The Principal and Selling Stockholder Prospectus Summary Registrar and Transfer Agent Related Party Transactions Report of Independent Accountants Revenues Risk Factors Secure Systems and Infrastructure Solutions Selected Financial Data Shares Eligible for Future Sale Systems Engineering Solutions Tax Considerations The Offering Transactions Prior to the Offering Underwriting Use of Proceeds Validity of Common Stock Where You Can Find More Information
1	1st Page - Filing Submission
"	ManTech International Corporation
4	Prospectus Summary
7	The Offering
"	Risk Factors
9	Transactions Prior to the Offering
19	Mr. Pedersen, Our Chairman, Chief Executive Officer and President, Will Continue To Control Our Company
21	Use of Proceeds
"	Dividend Policy
22	Capitalization
23	Dilution
24	Selected Financial Data
27	Management's Discussion and Analysis of Financial Condition and Results of Operations
29	Revenues
"	Cost of services
"	Gross profit
30	Income from operations
"	Income from continuing operations
34	Discontinued Operations
36	Business
41	Secure Systems and Infrastructure Solutions
42	Information Technology Solutions
43	Systems Engineering Solutions
49	Backlog and GSA Schedule Contract Value
52	Legal Proceedings
54	Management and Key Advisors
"	John A. Moore, Jr
64	Principal and Selling Stockholder
"	George J. Pedersen
65	Related Party Transactions
67	Registrar and Transfer Agent
"	Shares Eligible for Future Sale
70	Description of Capital Stock, Certificate of Incorporation and Bylaws
"	Common Stock
74	Tax Considerations
77	Underwriting
80	Validity of Common Stock
"	Experts
81	Where You Can Find More Information
82	Index to Consolidated Financial Statements
83	Independent Auditors' Report
84	Report of Independent Accountants
91	Notes to Consolidated Financial Statements

424B4 1st Page of 112 TOC ↑Top Previous Next ↓Bottom Just 1st
Registration No. 333-73946
Rule 462(b) Registration No. 333-82310

[Logo of Mantech]

7,200,000 Shares

ManTech International Corporation

Class A Common Stock

-----------------

We are offering 6,866,667 shares of our Class A common stock and the
selling stockholder identified in this prospectus is offering 333,333 shares of
our Class A common stock through a syndicate of underwriters. The underwriters
also have an option to purchase up to an additional 1,080,000 shares of Class A
common stock from us and the selling stockholder solely to cover
over-allotments. We will not receive any of the proceeds from the sale of
shares by the selling stockholder.

This is our initial public offering. The initial public offering price of
our Class A common stock is $16.00 per share. Our Class A common stock has been
approved for quotation on The Nasdaq Stock Market's National Market under the
symbol "MANT."

Investing in our common stock involves risks. See "Risk Factors" beginning
on page 7.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

-----------------

[Download Table]

Per Share Total
--------- ------------

Public offering price............................ $16.00 $115,200,000
Underwriting discount............................ $ 1.12 $ 8,064,000
Proceeds to us (before expenses)................. $14.88 $102,176,005
Proceeds to selling stockholder (before expenses) $14.88 $ 4,959,995

The underwriters expect to deliver the shares to purchasers on or about
February 12, 2002.

Jefferies & Company, Inc.

Legg Mason Wood Walker
Incorporated

BB&T Capital Markets

-----------------

The date of this prospectus is February 7, 2002.

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[INSIDE FRONT COVER ART.]

1. Inside Left Page:

The ManTech logo is positioned in the upper left corner of the page,
written in solid black lettering blending into white-on-red lettering, divided
with horizontal white lines. Beneath the logo is a caption reading, "Supporting
U.S. Intelligence Community and Department of Defense Customers in Responding
to the Challenges of Emerging Global Threats."

The lower right one-third of the page is solid red in the shape of a half
circle with three photos positioned in outlined circles in the center of the
red section against a white background. Above the circles a caption reads,
"Managing Technology for a Changing World" in which the word "World" curves
around the first quarter of the right-hand circle.

The left circle contains a picture of a satellite ground station. Beneath
this circle a caption reads "Secure Systems and Infrastructure Solutions." The
center circle contains a picture of a CD ROM with an image of binary code
superimposed in light blue. Beneath this circle a caption reads, "Information
Technology Solutions." The right circle contains a picture of the Hubble Space
Telescope taken from space. Beneath this circle a caption reads, "Systems
Engineering Solutions."

Centered at the bottom of the page is the text "ManTech International
Corporation."

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-----------------

TABLE OF CONTENTS

[Enlarge/Download Table]

Page
----

Prospectus Summary................................................................... 1
Risk Factors......................................................................... 7
Use of Proceeds...................................................................... 18
Dividend Policy...................................................................... 18
Capitalization....................................................................... 19
Dilution............................................................................. 20
Selected Financial Data.............................................................. 21
Management's Discussion and Analysis of Financial Condition and Results of Operations 24
Business............................................................................. 33
Management and Key Advisors.......................................................... 51
Principal and Selling Stockholder.................................................... 61
Related Party Transactions........................................................... 62
Registrar and Transfer Agent......................................................... 64
Shares Eligible for Future Sale...................................................... 64
Description of Capital Stock, Certificate of Incorporation and Bylaws................ 67
Tax Considerations................................................................... 71
Underwriting......................................................................... 74
Validity of Common Stock............................................................. 77
Experts.............................................................................. 77
Where You Can Find More Information.................................................. 78
Index to Consolidated Financial Statements........................................... F-1

-----------------

Through and including March 4, 2002, which is the 25th day after the date
of this prospectus, all dealers effecting transactions in the Class A common
stock, whether or not participating in this distribution, may be required to
deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments.

You should rely only on the information contained in this document. We have
not authorized anyone to provide you with information that is different. This
document may only be used where it is legal to sell these securities. The
information in this document may only be accurate on the date of this document.

424B4 4th Page of 112 TOC 1st Previous Next ↓Bottom Just 4th
PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
This summary may not contain all of the information that you should consider
before deciding to invest in our Class A common stock. We urge you to read this
entire prospectus carefully, including the "Risk Factors" section and our
consolidated financial statements and the notes to those statements. Unless
otherwise indicated, information presented in this prospectus assumes no
exercise of the underwriters' over-allotment option and assumes the occurrence
of the transactions described in "Transactions Prior to the Offering" on page 6.

ManTech International Corporation

ManTech International Corporation delivers a broad array of information
technology and technical services solutions to U.S. federal government
customers, focusing primarily on critical national defense programs for the
intelligence community and Department of Defense. We design, develop, procure,
implement, operate, test and maintain mission-critical, enterprise information
technology and communication systems and infrastructures for federal government
customers in the United States and 28 countries worldwide. More than 1,700 of
our nearly 3,500 employees hold government security clearances, including over
600 with access to Top Secret Sensitive Compartmented Information, allowing us
to work with our customers in highly classified environments and at front-line
deployments. We have established and maintain long-standing, successful
relationships with our customers, having supported many of them for 15 to 30
years. Given the critical nature of many of our services and our close
relationships with our customers, we are often called upon to support our
customers as they respond to crisis situations around the world.

We provide comprehensive information technology and technical services
solutions, separately or in combination, to our customers by drawing upon three
principal areas of expertise: secure systems and infrastructure; information
technology; and systems engineering. In some cases, our work under a single
contract draws upon two or all three of our areas of expertise. We provide
these solutions for sophisticated airborne, shipboard, satellite and tactical
and strategic land-based communication and information systems and
intelligence-processing activities.

. As part of our secure systems and infrastructure solutions, we conduct
vulnerability assessments of critical infrastructures that enable our
customers to identify evolving foreign and domestic threats, which may
include espionage, terrorist activities and other intelligence
operations, to quantify exposure to these threats and to implement
prudent countermeasures. We also design, implement and maintain secure
communication systems, computer networks and other information assurance
programs, and develop and integrate signal processing systems that assist
our government customers in their intelligence gathering activities.

. As part of our information technology solutions, we integrate diverse
technologies into customized systems that meet a variety of customer
needs. We design and implement electronic data interchange systems and
network infrastructures that help sustain or extend our customers'
existing proprietary or legacy systems and provide enhanced capabilities
based on new technology platforms. We also provide systems support for
customers' critical information management systems.

. As part of our systems engineering solutions, we analyze and assist in
designing, developing, integrating and installing hardware and software
for communication, intelligence, electronic

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warfare and information systems. We also test and certify complex
military systems hardware and software and orbital payloads and perform a
variety of environmental research and testing functions for federal
government customers.

Since our founding in 1968, we have grown from supplying engineering
services to the U.S. Navy to providing sophisticated information technology and
technical services solutions to a wide range of federal government customers.
For both the year ended December 31, 2000 and the nine months ended September
30, 2001, approximately 84.0% of our revenues were derived from our customers
in the intelligence community and Department of Defense. Among our intelligence
community customers are a number of the 13 federal agencies and departments
that the government identifies as being part of the U.S. intelligence
community, including the Department of State, the Department of Energy and a
number of the branches of the military within the Department of Defense. Our
other Department of Defense customers include the Office of the Secretary of
Defense, the Army, Navy, Air Force and Marine Corps, and a number of joint
military commands.

We also provide comprehensive information technology and technical services
solutions to federal government civilian agencies, including the National
Aeronautics and Space Administration (NASA), the Environmental Protection
Agency (EPA) and the Departments of Justice, Commerce and Energy. Additionally,
we provide business enterprise solutions to state and local governments and
database conversion solutions to commercial customers.

Our Market Opportunity

The federal government has consistently increased spending on information
technology each year since 1980 and is the largest purchaser of these services
and products. According to Input, an independent market research firm, this
trend of increased spending is expected to continue over the next five years as
federal government spending on information technology increases from $36.4
billion in 2001 to $60.3 billion in 2006, a compound annual growth rate of
10.6%. Moreover, this data may not fully reflect government spending on
complementary technical services, which include sophisticated systems
engineering and testing services. We believe that strong growth opportunities
exist for information technology and technical services providers who serve the
government market because the federal government is:

. Increasing defense spending focused on C4I (command, control,
communication, computers and intelligence), homeland defense and
intelligence activities;

. Adopting commercialized procurement methods that promote the use of
efficient contracting vehicles, such as government- or agency-wide
pricing schedule contracts that are negotiated and awarded by the General
Service Administration (GSA) and other central contracting authorities;

. Increasing reliance on technology service providers to deliver
cost-effective solutions and to address staffing challenges facing the
government; and

. Focusing on modernizing proprietary legacy information technology and
communication infrastructures.

Our Approach

We seek to address the requirements of our customers in the intelligence
community and Department of Defense through our:

. Comprehensive technology-based solutions;

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. Expertise in the migration, integration, optimization and maintenance of
proprietary legacy systems used by the federal government and ability to
enhance the interoperability and accessibility of critical enterprise
data;
. More than 1,700 employees with government security clearances, which are
required for work on classified programs for the intelligence community
and Department of Defense;
. Proven track record of fulfilling our customers' requirements,
demonstrated by our many long-standing customer relationships; and
. Extensive experience of our management team and advisory board members in
supporting our customers in the intelligence community and Department of
Defense.

As part of your evaluation of us, you should take into account the risks we
face in our business and not solely our business approach and strategy. Because
our business is substantially dependent upon contracts with the U.S. federal
government, we are subject to a number of risks that arise from the way in
which the U.S. federal government conducts business. For example, as a
government contractor, our operations are subject to complex government
procurement laws and regulations and may be affected by government-favorable
provisions that are included in our contracts with the government, and our
operations are subject to government audits and to shifts in government
spending priorities. Because of the labor-intensive nature of our work, we must
recruit and retain skilled employees, many of whom must obtain and maintain
security clearances, and our business may be harmed if our employees do not
properly perform their jobs. In addition, we depend on relationships and the
reputation of members of our management team and advisory board to maintain
good customer relationships and identify new business opportunities. You should
also be aware that there are various risks involved in investing in our common
stock. For more information about these and other risks, see "Risk Factors"
beginning on page 7. You should carefully consider all of the risk factors
together with all of the other information included in this prospectus.

Our Strategy

Our objective is to profitably grow our business as a premier provider of
comprehensive information technology and technical services solutions to the
federal government, focusing primarily on customers in the intelligence
community and Department of Defense. To achieve our objective, we intend to:

. Expand our customer base by capitalizing on our existing customer
relationships and reputation and pursuing strategic acquisitions to
attract new customers and to cross-sell solutions and products to
existing and new customers, and by selectively hiring key individuals
with additional customer relationships;
. Increase profitability by focusing our contract bidding and new business
development efforts on specialized services that can generate higher
value-added solutions, such as threat exposure analysis and systems
architecture design, and on more efficient and flexible contract
vehicles, such as GSA schedule contracts;
. Target our service offerings in high growth program areas, including
safeguarding critical infrastructures and information assurance for the
intelligence community and Department of Defense;
. Continue to attract and retain skilled professionals, including
engineers, scientists, analysts, technicians and support specialists, who
possess a wide range of technical skills and prior experience with the
intelligence community or Department of Defense; and

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. Pursue a disciplined acquisition strategy focused on businesses that
support the intelligence community and Department of Defense, expand our
service offerings and establish relationships with new customers.

Corporate Structure

Our principal executive offices are located at 12015 Lee Jackson Highway,
Fairfax, Virginia 22033-3300. Our telephone number at that address is (703)
218-6000. Our website can be visited at www.mantech.com. Information contained
on our website is not part of this prospectus.

The Offering

The share information contained below excludes the 3,000,000 shares of
Class A common stock reserved for issuance under our Management Incentive Plan.

[Enlarge/Download Table]

Class A common stock offered by us......... 6,866,667 shares.

Class A common stock offered by our selling
stockholder..............................
333,333 shares.

Class A common stock to be outstanding
immediately after this offering.......... 8,018,813 shares.

Class B common stock to be outstanding
immediately after this offering.......... 17,514,517 shares.

Use of proceeds............................ We expect to use the net proceeds of this
offering to repay a portion of our existing
indebtedness, to fund strategic acquisitions of
businesses and for working capital and general
corporate purposes. See "Use of Proceeds" on
page 18.

Over-allotment option...................... We and one of our existing stockholders have
granted the underwriters an option to purchase
up to an additional 1,080,000 shares solely to
cover over-allotments. If this over-allotment is
exercised in full, we will sell to the underwriters
an additional 696,487 shares, and the selling
stockholder will sell to the underwriters an
additional 383,513 shares.

Nasdaq symbol.............................. MANT

Risk Factors

See "Risk Factors" beginning on page 7 for a discussion of material risks
that prospective purchasers of our Class A common stock should consider.

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Summary Financial Data

The following summarizes our historical consolidated financial information.
We derived the information as of and for each of the five years ended December
31, 2000 and for the nine months ended September 30, 2001 from our audited
consolidated financial statements. The data for the nine months ended September
30, 2000 is derived from our unaudited consolidated financial statements and
includes all adjustments, consisting of normal and recurring adjustments, that
we consider necessary for a fair presentation of the financial position and
results of operations as of and for such periods. Interim consolidated
financial results for the nine months ended September 30, 2000 and September
30, 2001 are not necessarily indicative of the results that may be expected for
the full year. You should read the summary financial data presented below in
conjunction with our consolidated financial statements, the notes to our
consolidated financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

[Enlarge/Download Table]

Nine Months Ended
Year Ended December 31, September 30,
----------------------------------------------- ------------------
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- -------- -------- --------
(In thousands, except per share amounts)

Statement of Income Data:
Revenues..................................... $223,049 $286,051 $314,309 $353,924 $378,827 $280,970 $316,266
Cost of services............................. 191,589 245,857 265,189 296,306 315,414 234,834 258,412
Gross profit................................. 31,460 40,194 49,120 57,618 63,413 46,136 57,854
Income from operations....................... 7,019 10,381 13,447 15,168 18,589 12,695 22,237
Income from continuing operations............ 3,077 5,438 2,921 6,796 7,125 5,113 12,160
(Loss) income from discontinued operations(1) (1,039) 255 (1,268) (2,727) (4,667) (3,124) (6,533)
Loss on disposal of discontinued operations.. (93) -- -- -- (719) (719) (5,890)
-------- -------- -------- -------- -------- -------- --------
Net income (loss)............................ $ 1,945 $ 5,693 $ 1,653 $ 4,069 $ 1,739 $ 1,270 $ (263)
======== ======== ======== ======== ======== ======== ========

As Reported:
Income from continuing operations per share - $ 1.64 $ 3.54 $ 2.43 $ 5.93 $ 6.24 $ 4.49 $ 10.59
diluted(2).................................. ======== ======== ======== ======== ======== ======== ========
Net income (loss) per share - diluted(2)..... $ 0.69 $ 3.75 $ 1.34 $ 3.55 $ 1.52 $ 1.12 $ (0.23)
======== ======== ======== ======== ======== ======== ========
Post-Split:
Income from continuing operations per share -
diluted(3).................................. $ 0.10 $ 0.22 $ 0.15 $ 0.36 $ 0.38 $ 0.28 $ 0.65
======== ======== ======== ======== ======== ======== ========
Net income (loss) per share - diluted(3)..... $ 0.04 $ 0.23 $ 0.08 $ 0.22 $ 0.09 $ 0.07 $ (0.01)
======== ======== ======== ======== ======== ======== ========

Balance Sheet Data:
Cash and cash equivalents.................... $ 13,276 $ 17,318 $ 14,572 $ 19,571 $ 29,578 $ 11,366 $ 18,231
Total assets................................. 108,705 154,886 165,718 186,070 186,843 176,736 177,061
Long-term debt............................... 37,642 49,135 66,377 72,005 73,000 69,075 66,668
Total stockholders' equity................... 12,506 16,831 15,515 19,548 21,794 21,433 21,402

-----------------
(1) We have decided to exit certain lines of business so that we can continue
to enhance our core competencies. For more information on our discontinued
operations, please see "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Discontinued Operations" and note 15
to our consolidated financial statements.
(2) Represents the calculation of earnings per share of our corporate
predecessor, ManTech International Corporation (New Jersey), as reported in
the historical consolidated financial statements, prior to our
reincorporation, recapitalization and subsequent stock split, as discussed
below in "Transactions Prior to the Offering."
(3) Prior to this offering, we reincorporated from New Jersey to Delaware,
recapitalized and effected a 16.3062-for-one stock split, and the
Post-Split per share data gives effect to these transactions. The holders
of each share of Class A common stock are entitled to one vote per share,
and the holders of each share of Class B common stock are entitled to ten
votes per share.

424B4 9th Page of 112 TOC 1st Previous Next ↓Bottom Just 9th
Transactions Prior to the Offering

Termination of Personal Service Corporation Status. For periods prior to
the closing of this offering, we had elected to be taxed as a personal service
corporation. As a result, we accounted for our earnings on a cash basis for
federal income tax purposes. Effective as of the closing of this offering, our
status as a personal service corporation terminates and we will apply
accrual-based accounting for federal income tax purposes. The termination of
our personal service corporation status will result in approximately $36.0
million in deferred income being recognized for tax purposes. Taxes on this
amount totaling $14.0 million will be due with respect to the four taxable
years beginning with the taxable year of this offering. Because we previously
recognized the deferred income for accounting purposes and accrued for the
taxes, this change in our tax status and the tax payments will not affect our
earnings.

Reincorporation, Recapitalization and Stock Split. We are incorporated in
Delaware and are the successor by merger to ManTech International Corporation,
a New Jersey corporation. See "Description of Capital Stock, Certificate of
Incorporation and Bylaws." As a result of the merger, we reincorporated from
New Jersey to Delaware and recapitalized our common stock. Our predecessor
corporation had three classes of common stock outstanding prior to the
effective date of the merger: Class A common stock, Class B common stock and
Class C common stock, of which the Class B common stock was redeemable and,
therefore, not counted as equity for accounting purposes. On the effective date
of the merger, each outstanding share of the New Jersey corporation's common
stock was exchanged for one share of our Class A common stock or for one share
of our Class B common stock. Immediately after the merger, we effected a
16.3062-for-one stock split of our Class A common stock and Class B common
stock. The holders of each share of Class A common stock are entitled to one
vote per share, and the holders of each share of Class B common stock are
entitled to ten votes per share. For purposes of this prospectus, unless stated
otherwise, all references to our common stock refer to shares of the Delaware
corporation after giving effect to the reincorporation, recapitalization and
stock split, other than with respect to the historical consolidated financial
statements.

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RISK FACTORS

Before making an investment in our Class A common stock you should
carefully consider the risks described below, as well as the other information
set forth in this prospectus, including our consolidated financial statements
and related notes. Some of the following risks relate principally to the
industry in which we operate and to our business. Other risks relate
principally to the securities markets and ownership of our stock. Additional
risks and uncertainties not presently known to us, or risks that we currently
consider immaterial, may also impair our operations. Any of the risk factors
described below could significantly and negatively affect our business,
prospects, financial condition or operating results, which could cause the
trading price of our Class A common stock to decline and could cause you to
lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

We are dependent on contracts with the U.S. federal government for
substantially all of our revenues.

For the year ended December 31, 2000 and for the nine months ended
September 30, 2001, we derived 96.1% and 95.8%, respectively, of our revenues
from federal government contracts, either as a prime contractor or a
subcontractor. For 2000 and for the nine months ended September 30, 2001, we
derived 83.6% and 84.1%, respectively, of our revenues from contracts with
agencies in the intelligence community and Department of Defense. We expect
that federal government contracts will continue to be the primary source of our
revenues for the foreseeable future. If we were suspended or debarred from
contracting with the federal government generally, or any significant agency in
the intelligence community or Department of Defense, if our reputation or
relationship with government agencies were impaired, or if the government
otherwise ceased doing business with us or significantly decreased the amount
of business it does with us, our business, prospects, financial condition or
operating results could be materially harmed.

Federal government spending priorities may change in a manner adverse to our
business.

Our business depends upon continued federal government expenditures on
intelligence, defense and other programs that we support. The overall U.S.
defense budget declined from time to time in the late 1980s and the early
1990s. While spending authorizations for intelligence and defense-related
programs by the government have increased in recent years, and in particular
after the September 11, 2001 terrorist attacks, future levels of expenditures
and authorizations for those programs may decrease, remain constant or shift to
programs in areas where we do not currently provide services. A significant
decline in government expenditures, or a shift of expenditures away from
programs that we support, could adversely affect our business, prospects,
financial condition or operating results.

Federal government contracts contain provisions that are unfavorable to us.

Federal government contracts contain provisions and are subject to laws and
regulations that give the government rights and remedies not typically found in
commercial contracts, including allowing the government to:

. Terminate existing contracts for convenience, as well as for default;

. Reduce or modify contracts or subcontracts;

. Cancel multi-year contracts and related orders if funds for contract
performance for any subsequent year become unavailable;

. Decline to exercise an option to renew a multi-year contract;

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. Claim rights in products and systems produced by us;

. Suspend or debar us from doing business with the federal government or
with a governmental agency; and

. Control or prohibit the export of our products.

If the government terminates a contract for convenience, we may recover
only our incurred or committed costs, settlement expenses and profit on work
completed prior to the termination. If the government terminates a contract for
default, we may not recover even those amounts, and instead may be liable for
excess costs incurred by the government in procuring undelivered items and
services from another source. As is common with government contractors, some of
our contracts have had or are currently experiencing performance issues. We
have received and may in the future receive show cause or cure notices under
contracts that, if not addressed to the government's satisfaction, could give
the government the right to terminate those contracts for default or to cease
procuring our services under those contracts in the future.

We must comply with complex procurement laws and regulations.

We must comply with and are affected by laws and regulations relating to
the formation, administration and performance of federal government contracts,
which affect how we do business with our customers and may impose added costs
on our business. For example, we are subject to the Federal Acquisition
Regulations and all supplements, which comprehensively regulate the formation,
administration and performance of federal government contracts, and to the
Truth in Negotiations Act, which requires certification and disclosure of cost
and pricing data in connection with contract negotiations. If a government
review or investigation uncovers improper or illegal activities, we may be
subject to civil and criminal penalties and administrative sanctions, including
termination of contracts, forfeiture of profits, suspension of payments, fines
and suspension or debarment from doing business with federal government
agencies, which could materially adversely affect our business, prospects,
financial condition or operating results. From time to time in the past, we
have been subject to government investigations. Currently, we are subject to
three on-going investigations. For additional information regarding the
government investigations to which we are currently subject, see
"Business--Legal Proceedings." In addition, we are subject to industrial
security regulations of Department of Defense and other federal agencies that
are designed to safeguard against foreigners' access to classified information.
If we were to come under foreign ownership, control or influence, our federal
government customers could terminate or decide not to renew our contracts, and
it could impair our ability to obtain new contracts. The government may reform
its procurement practices or adopt new contracting rules and regulations,
including cost accounting standards, that could be costly to satisfy or that
could impair our ability to obtain new contracts.

We face competition from other firms, many of which have substantially greater
resources.

We operate in highly competitive markets and generally encounter intense
competition to win contracts. We compete with many other firms, ranging from
small specialized firms to large diversified firms, many of which have
substantially greater financial, management and marketing resources than we do.
Our competitors may be able to provide customers with different or greater
capabilities or benefits than we can provide in areas such as technical
qualifications, past contract performance, geographic presence, price and the
availability of key professional personnel. Our failure to compete effectively
with respect to any of these or other factors could have a material adverse
effect on our business, prospects, financial condition or operating results. In
addition, our competitors also have established or may establish relationships
among themselves or with third parties to increase their

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ability to address customer needs. Accordingly, it is possible that new
competitors or alliances among competitors may emerge.

We derive significant revenues from contracts awarded through a competitive
bidding process.

We derive significant revenues from federal government contracts that were
awarded through a competitive bidding process. For example, in each of the past
three fiscal years, each of our ten largest contracts, in terms of revenues,
was awarded through a competitive bidding process. Much of the business that we
expect to seek in the foreseeable future likely will be awarded through
competitive bidding. Competitive bidding presents a number of risks, including
the:

. Need to bid on programs in advance of the completion of their design,
which may result in unforeseen technological difficulties and cost
overruns;

. Substantial cost and managerial time and effort that we spend to prepare
bids and proposals for contracts that may not be awarded to us;

. Need to accurately estimate the resources and cost structure that will be
required to service any contract we are awarded; and

. Expense and delay that may arise if our competitors protest or challenge
contract awards made to us pursuant to competitive bidding, and the risk
that any such protest or challenge could result in the resubmission of
bids on modified specifications, or in termination, reduction or
modification of the awarded contract.

We may not be provided the opportunity in the near term to bid on contracts
that are held by other companies and are scheduled to expire if the government
determines to extend the existing contract. If we are unable to win particular
contracts that are awarded through the competitive bidding process, we may not
be able to operate in the market for services that are provided under those
contracts for a number of years. If we are unable to consistently win new
contract awards over any extended period, our business and prospects will be
adversely affected.

Failure to maintain strong relationships with other contractors could result in
a decline in our revenues.

For 2000 and for the nine months ended September 30, 2001, we derived 7.8%
and 8.4%, respectively, of our revenues from contracts in which we acted as a
subcontractor to other contractors or to joint ventures which we and other
contractors have formed to bid on and execute particular contracts or programs.
We expect to continue to depend on relationships with other contractors for a
portion of our revenues in the foreseeable future. Our business, prospects,
financial condition or operating results could be adversely affected if other
contractors eliminate or reduce their subcontracts or joint venture
relationships with us, either because they choose to establish relationships
with our competitors or because they choose to directly offer services that
compete with our business, or if the government terminates or reduces these
other contractors' programs or does not award them new contracts.

We may not receive the full amount authorized under contracts that we have
entered into and may not accurately estimate our backlog and GSA schedule
contract value.

The maximum contract value specified under a government contract that we
enter into is not necessarily indicative of revenues that we will realize under
that contract. For example, we derive some of our revenues from government
contracts in which we are not the sole provider, meaning that the government
could turn to other companies to fulfill the contract, and from indefinite
delivery, indefinite quantity contracts, which specify a maximum but only a
token minimum amount of goods or

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services that may be provided under the contract. In addition, Congress often
appropriates funds for a particular program on a yearly basis, even though the
contract may call for performance that is expected to take a number of years.
As a result, contracts typically are only partially funded at any point during
their term, and all or some of the work to be performed under the contracts may
remain unfunded unless and until Congress makes subsequent appropriations and
the procuring agency allocates funding to the contract. Nevertheless, we look
at these contract values, including values based on the assumed exercise of
options relating to these contracts, in estimating the amount of our backlog.
Because we may not receive the full amount we expect under a contract, we may
not accurately estimate our backlog. Similarly, in recent years we have been
deriving an increasing percentage of our revenues under GSA schedule contracts.
GSA schedule contracts are procurement vehicles under which government agencies
may, but are not required to, purchase professional services or products. As a
result, we believe that potential GSA schedule contract values are not fully
reflected in traditional backlog calculations. We have developed a method of
calculating GSA schedule contract value that we use to evaluate estimates for
the revenues we may receive under our GSA schedule contracts. Although we
believe our method of determining GSA schedule contract value is based on
reasonable estimates and assumptions, our experience with GSA schedule
contracts has been limited to date. We are not currently aware of other
companies within our market that employ comparable methods of determining GSA
schedule contract value. Estimates of future revenues included in backlog and
GSA schedule contract value are not necessarily precise and the receipt and
timing of any of these revenues are subject to various contingencies, many of
which are beyond our control. For a discussion of these contingencies see
"Business--Backlog and GSA Schedule Contract Value." The actual accrual of
revenues on programs included in backlog and GSA schedule contract value may
never occur or may change.

We may not accurately estimate the expenses, time and resources necessary to
satisfy our contractual obligations.

We enter into three types of federal government contracts for our services:
cost-plus, time-and-materials and fixed-price. For the nine months ended
September 30, 2001, we derived 36.3%, 35.6% and 28.1% of our revenues from
cost-plus, time-and-materials and fixed-price contracts, respectively. For
2000, the revenues were 39.7%, 34.6% and 25.7%, respectively. Under cost-plus
contracts, we are reimbursed for allowable costs and paid a fee, which may be
fixed or performance-based. To the extent that the actual costs incurred in
performing a cost-plus contract are within the contract ceiling and allowable
under the terms of the contract and applicable regulations, we are entitled to
reimbursement of our costs, plus a profit. However, if our costs exceed the
ceiling or are not allowable under the terms of the contract or applicable
regulations, we may not be able to recover those costs. Under
time-and-materials contracts, we are reimbursed for labor at negotiated hourly
billing rates and for certain expenses. We assume financial risk on
time-and-material contracts because we assume the risk of performing those
contracts at negotiated hourly rates. Under fixed-price contracts, we perform
specific tasks for a fixed price. Compared to cost-plus contracts, fixed-price
contracts generally offer higher margin opportunities, but involve greater
financial risk because we bear the impact of cost overruns and receive the
benefit of cost savings. Our profits could be adversely affected if our costs
under any of these contracts exceed the assumptions we used in bidding for the
contract. Although we believe that we have recorded adequate provisions in our
consolidated financial statements for losses on our contracts, as required
under U.S. generally accepted accounting principles, our contract loss
provisions may not be adequate to cover all actual losses that we may incur in
the future.

Our contracts are subject to audits and cost adjustments by the federal
government.

The federal government audits and reviews our performance on contracts,
pricing practices, cost structure and compliance with applicable laws,
regulations and standards. Like most large government

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contractors, our contract costs are audited and reviewed on a continual basis.
Although audits have been completed on our incurred contract costs through
1999, audits for costs incurred or work performed after 1999 remain ongoing
and, for much of our work in recent years, have not yet commenced. In addition,
non-audit reviews by the government may still be conducted on all our
government contracts. An audit of our work, including an audit of work
performed by companies we have acquired or may acquire, could result in a
substantial adjustment to our revenues because any costs found to be improperly
allocated to a specific contract will not be reimbursed, and revenues we have
already recognized may need to be refunded. If a government audit uncovers
improper or illegal activities, we may be subject to civil and criminal
penalties and administrative sanctions, including termination of contracts,
forfeiture of profits, suspension of payments, fines and suspension or
debarment from doing business with federal government agencies. In addition, we
could suffer serious harm to our reputation if allegations of impropriety were
made against us.

We may be liable for systems and service failures.

We create, implement and maintain information technology and technical
services solutions that are often critical to our customers' operations,
including those of federal, state and local governments. We have experienced
and may in the future experience some systems and service failures, schedule or
delivery delays and other problems in connection with our work. If our
solutions, services, products or other applications have significant defects or
errors, are subject to delivery delays or fail to meet our customers'
expectations, we may:

. Lose revenues due to adverse customer reaction;

. Be required to provide additional services to a customer at no charge;

. Receive negative publicity, which could damage our reputation and
adversely affect our ability to attract or retain customers; or

. Suffer claims for substantial damages against us.

In addition to any costs resulting from product warranties, contract
performance or required corrective action, these failures may result in
increased costs or loss of revenues if they result in customers postponing
subsequently scheduled work or canceling or failing to renew contracts.

While many of our contracts with the federal government limit our liability
for damages that may arise from negligence in rendering services to our
customers, we cannot be sure that these contractual provisions will protect us
from liability for damages if we are sued. Furthermore, our errors and
omissions and product liability insurance coverage may not continue to be
available on reasonable terms or in sufficient amounts to cover one or more
large claims, or the insurer may disclaim coverage as to some types of future
claims. The successful assertion of any large claim against us could seriously
harm our business. Even if not successful, these claims could result in
significant legal and other costs and may be a distraction to our management.

Security breaches in classified government systems could adversely affect our
business.

Many of the programs we support and systems we develop, install and
maintain involve managing and protecting information involved in intelligence,
national security and other classified government functions. A security breach
in one of these systems could cause serious harm to our business, damage our
reputation and prevent us from being eligible for further work on critical
classified systems for federal government customers. Losses that we could incur
from such a security breach could exceed the policy limits that we have for
errors and omissions or product liability insurance.

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Our quarterly operating results may vary widely.

Our quarterly revenues and operating results may fluctuate significantly in
the future. A number of factors cause our revenues, cash flow and operating
results to vary from quarter to quarter, including:

. Fluctuations in revenues earned on fixed-price contracts and contracts
with a performance-based fee structure;

. Commencement, completion or termination of contracts during any
particular quarter;

. Variable purchasing patterns under government GSA schedule contracts,
blanket purchase agreements and indefinite delivery, indefinite quantity
contracts;

. Changes in Presidential administrations and senior federal government
officials that affect the timing of technology procurement;

. Changes in policy or budgetary measures that adversely affect government
contracts in general;

. Acquisitions of other technology service providers; and

. Increased purchase requests from customers for equipment and materials in
connection with the federal government's fiscal year end, which may
affect our fourth quarter operating results.

Changes in the volume of services provided under existing contracts and the
number of contracts commenced, completed or terminated during any quarter may
cause significant variations in our cash flow from operations because a
relatively large amount of our expenses are fixed. We incur significant
operating expenses during the start-up and early stages of large contracts and
typically do not receive corresponding payments in that same quarter. We may
also incur significant or unanticipated expenses when contracts expire or are
terminated or are not renewed. In addition, payments due to us from government
agencies may be delayed due to billing cycles or as a result of failures of
governmental budgets to gain Congressional and Administration approval in a
timely manner.

Our senior management and advisory board are important to our customer
relationships.

We believe that our success depends in part on the continued contributions
of our co-founder, Chairman of the Board of Directors, Chief Executive Officer
and President, George J. Pedersen, our Executive Vice President, Chief
Financial Officer, Treasurer and Director, John A. Moore, Jr., other members of
our senior management and advisory board. We rely on our executive officers and
senior management to generate business and execute programs successfully. In
addition, the relationships and reputation that members of our management team
and advisory board have established and maintain with government and military
personnel contribute to our ability to maintain good customer relations and to
identify new business opportunities. While we have employment agreements with
some of our executive officers, these agreements do not prevent them from
terminating their employment. The loss of Mr. Pedersen, Mr. Moore or any other
senior management or advisory board members could impair our ability to
identify and secure new contracts and otherwise to manage our business.

We must recruit and retain skilled employees to succeed in our labor-intensive
business.

We believe that an integral part of our success is our ability to provide
employees who have advanced information technology and technical services
skills and who work well with our customers in a government or defense-related
environment. These employees are in great demand and are likely to remain a
limited resource in the foreseeable future. If we are unable to recruit and
retain a sufficient number of these employees, our ability to maintain and grow
our business could be negatively

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impacted. In addition, some of our contracts contain provisions requiring us to
commit to staff a program with certain personnel the customer considers key to
our successful performance under the contract. In the event we are unable to
provide these key personnel or acceptable substitutions, the customer may
terminate the contract, and we may not be able to recover our costs in the
event the contract is terminated.

Our business is dependent upon obtaining and maintaining required security
clearances.

Many of our federal government contracts require our employees to maintain
various levels of security clearances, and we are required to maintain certain
facility security clearances complying with
Department of Defense requirements. Obtaining and maintaining security
clearances for employees involves a lengthy process, and it is difficult to
identify, recruit and retain employees who already hold security clearances. If
our employees are unable to obtain or retain security clearances or if our
employees who hold security clearances terminate employment with us, the
customer whose work requires cleared employees could terminate the contract or
decide not to renew it upon its expiration. In addition, we expect that many of
the contracts on which we will bid will require us to demonstrate our ability
to obtain facility security clearances and perform work with employees who hold
specified types of security clearances. To the extent we are not able to obtain
facility security clearances or engage employees with the required security
clearances for a particular contract, we may not be able to bid on or win new
contracts, or effectively rebid on expiring contracts.

If we are unable to manage our growth, our business could be adversely affected.

Sustaining our growth has placed significant demands on our management, as
well as on our administrative, operational and financial resources. For us to
continue to manage our growth, we must continue to improve our operational,
financial and management information systems and expand, motivate and manage
our workforce. If we are unable to successfully manage our growth without
compromising our quality of service and our profit margins, or if new systems
that we implement to assist in managing our growth do not produce the expected
benefits, our business, prospects, financial condition or operating results
could be adversely affected.

We may undertake acquisitions that could increase our costs or liabilities or
be disruptive.

One of our key operating strategies is to selectively pursue acquisitions.
While we do not currently have any commitments, agreements or understandings to
acquire any specific businesses or other material operations, we have made a
number of acquisitions in the past and will consider other acquisitions in the
future. We may not be able to locate suitable acquisition candidates at prices
that we consider appropriate or to finance acquisitions on terms that are
satisfactory to us. If we do identify an appropriate acquisition candidate, we
may not be able to successfully negotiate the terms of an acquisition, finance
the acquisition or, if the acquisition occurs, integrate the acquired business
into our existing business. Negotiations of potential acquisitions and the
integration of acquired business operations could disrupt our business by
diverting management away from day-to-day operations. The proceeds we receive
from this offering may not be sufficient to fund the full cost of acquisitions
that we may determine to pursue. Acquisitions of businesses or other material
operations may require additional debt or equity financing, resulting in
additional leverage or dilution of ownership. The difficulties of integration
may be increased by the necessity of coordinating geographically dispersed
organizations, integrating personnel with disparate business backgrounds and
combining different corporate cultures. We also may not realize cost
efficiencies or synergies that we anticipated when selecting our acquisition
candidates. In addition, we may need to record write downs from future

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impairments of intangible assets, which could reduce our future reported
earnings. At times, acquisition candidates may have liabilities or adverse
operating issues that we fail to discover through due diligence prior to the
acquisition.

We may be exposed to liabilities or losses from operations that we have
discontinued.

We have determined to dispose of certain of our businesses, either by
selling them or by winding down their operations. For more information on these
discontinued operations, please see "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Discontinued Operations" and
note 15 to our consolidated financial statements. Our consolidated financial
statements reflect, under the heading "Discontinued Operations," our estimate
of the net losses expected from these operations through the date we estimate
we will dispose of them, and all losses expected to be realized upon disposal
of these operations. If we incur greater losses than we expect on dispositions,
or if the operation of these businesses generates greater losses than we expect
prior to disposition, there will be a negative impact on future operating
results. Even if we are successful in disposing of these businesses, we may
continue to be exposed to some liabilities for their operations.

For example, we are a defendant in a lawsuit where the plaintiff alleges
that one of the businesses we intend to dispose of or its subcontractors caused
soil and groundwater contamination by improperly disposing of dry cleaning
solvents and we are involved in a second lawsuit where defendants are seeking
to add us as a third-party defendant with respect to allegations that they
caused or contributed to soil and ground water contamination. For more
information on these lawsuits, see "Business--Legal Proceedings." The
operations from this business, particularly the performance of environmental
consulting and remediation services, may not have been or in the future may not
be conducted in compliance with environmental laws, exposing us to further
liability and damages for the costs of investigating and cleaning up sites of
spills, disposals or other releases of hazardous materials. We cannot assure
you that our liability in these matters, or any other environmental liabilities
that arise in the future, will not exceed our resources or will be covered by
insurance. Even after we dispose of this and the other discontinued operations,
we likely will remain liable for any costs, damages or other liabilities
imposed upon them that result from or relate to their operations prior to the
disposition.

We may be affected by intellectual property infringement claims.

Our business operations rely extensively on procuring and deploying
intellectual property. Our employees develop some of the software solutions and
other forms of intellectual property that we use to provide information
technology solutions to our customers, but we also license technology from
primary vendors. Typically, under federal government contracts, our government
customers may claim rights in the intellectual property we develop, making it
impossible for us to prevent their future use of our intellectual property. We
are and may in the future be subject to claims from our employees or third
parties who assert that software solutions and other forms of intellectual
property that we used in delivering services and solutions to our customers
infringe upon intellectual property rights of such employees or third parties.
If our vendors, our employees or third parties assert claims that we or our
customers are infringing on their intellectual property, we could incur
substantial costs to defend these claims. In addition, if any of our vendors'
infringement claims are ultimately successful, our vendors could require us to:

. Cease selling or using products or services that incorporate the
challenged software or technology;

. Obtain a license or additional licenses from our vendors; or

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. Redesign our products and services that rely on the challenged software
or technology.

Covenants in our credit facility may restrict our financial and operating
flexibility.

Our credit facility contains covenants that limit or restrict, among other
things, our ability to borrow money outside of the amounts committed under the
credit facility, make investments in our subsidiaries that are borrowers under
the credit facility and designated as discontinued operations or in other
entities not listed as borrowers under the credit facility, make other
restricted payments, pay dividends on our common stock, sell or otherwise
dispose of assets other than in the ordinary course of business, merge or
consolidate, or make acquisitions, in each case without the prior written
consent of our lenders. Our credit facility also requires us to maintain
specified financial covenants relating to fixed charge coverage, interest
coverage, debt coverage, and minimum consolidated net worth. Our ability to
satisfy these financial ratios can be affected by events beyond our control,
and we cannot assure you that we will meet those ratios. For example, on two
occasions in the past five years, in March 2001 and in November 2000, we
obtained waivers for failure to maintain the required fixed charge coverage
ratio as of the end of the preceding quarters under the credit facility that
was in effect at that time. Default under our credit facility could allow the
lenders to declare all amounts outstanding to be immediately due and payable.
We have pledged substantially all of our assets, including the stock of our
subsidiaries to secure the debt under our credit facility. If the lenders
declare amounts outstanding under the credit facility to be due, the lenders
could proceed against those assets. Any event of default, therefore, could have
a material adverse effect on our business if the creditors determine to
exercise their rights. We also may incur future debt obligations that might
subject us to restrictive covenants that could affect our financial and
operational flexibility, restrict our ability to pay dividends on our common
stock or subject us to other events of default. Any such restrictive covenants
in any future debt obligations we incur could limit our ability to fund our
businesses with equity investments or intercompany advances, which would impede
our ability to operate or expand our business.

From time to time we may require consents or waivers from our lenders to
permit actions that are prohibited by our credit facility. For example, we will
require the consent of our lenders to complete the merger through which we
reincorporate in Delaware. If in the future our lenders refuse to provide
waivers of our credit facility's restrictive covenants and/or financial ratios,
then we may be in default under our credit facility, and we may be prohibited
from undertaking actions that are necessary to maintain and expand our business.

Our employees may engage in misconduct or other improper activities.

We are exposed to the risk that employee fraud or other misconduct could
occur. Misconduct by employees could include intentional failures to comply
with federal government procurement regulations and failing to disclose
unauthorized or unsuccessful activities to us. Employee misconduct could also
involve the improper use of our customers' sensitive or classified information,
which could result in regulatory sanctions and serious harm to our reputation.
It is not always possible to deter employee misconduct, and the precautions we
take to prevent and detect this activity may not be effective in controlling
unknown or unmanaged risks or losses.

RISKS RELATED TO OUR COMMON STOCK AND THIS OFFERING

An active public market for our Class A common stock may not develop.

The initial price of our Class A common stock to be sold in this offering
will be determined through negotiations between us and the representatives of
the underwriters and may not be indicative

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of prices that will prevail in the trading market. Before this offering, no
public market existed for our common stock. An active public market for our
Class A common stock may not develop or be sustained after this offering, which
could affect your ability to sell your shares or depress the market price of
your shares. The market price of your shares may fall below the initial public
offering price.

You will experience immediate and substantial dilution.

The initial public offering price per share will significantly exceed the
current net tangible book value per share of our stock that was outstanding
prior to this offering. As a result, investors purchasing Class A common stock
in this offering at $16.00 per share will experience immediate and substantial
dilution in the amount of $11.62 per share. In addition, we have issued options
to acquire Class A common stock at prices below the initial public offering
price. The exercise of these employee and director stock options will result in
further dilution to new investors.

Mr. Pedersen, our Chairman, Chief Executive Officer and President, will
continue to control our company.

Upon completion of this offering, Mr. Pedersen will own or control
approximately 95.78% of the combined voting power of the Class A and Class B
common stock, or 95.12% if the underwriters' over-allotment option is exercised
in full, and he will own approximately 69.72% of the outstanding shares of
Class A and Class B common stock, or 66.41% if the underwriters' over-allotment
option is exercised in full. Accordingly, Mr. Pedersen will control the vote on
all matters submitted to a vote of the holders of our common stock. For more
information, see "Description of Capital Stock, Certificate of Incorporation
and Bylaws--Common Stock." As long as Mr. Pedersen beneficially owns a majority
of the combined voting power of our common stock, he will have the ability,
without the consent of our public stockholders, to elect all members of our
board of directors and to control our management and affairs. Mr. Pedersen's
voting control may have the effect of preventing or discouraging transactions
involving an actual or a potential change of control of ManTech, regardless of
whether a premium is offered over then-current market prices. Mr. Pedersen will
be able to cause a change of control of our company. Mr. Pedersen also will be
able to cause a registration statement to be filed and to become effective
under the Securities Act of 1933, thereby permitting him to freely sell or
transfer the shares of common stock that he owns. In addition, the interests of
Mr. Pedersen may conflict with the interests of other holders of our common
stock.

Provisions in our charter documents could make a merger, tender offer or proxy
contest difficult.

Our certificate of incorporation and bylaws may discourage, delay or
prevent a change in control of ManTech that stockholders may consider
favorable. Our certificate of incorporation and bylaws:

. Authorize the issuance of blank check preferred stock that could be
issued by our board of directors to thwart a takeover attempt;

. Prohibit cumulative voting in the election of directors, which would
otherwise allow holders of less than a majority of the stock to elect
some directors;

. Limit who may call special meetings of stockholders;

. Prohibit stockholder action by written consent, requiring all actions to
be taken at a meeting of the stockholders;

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. Establish advance notice requirements for nominating candidates for
election to our board of directors or for proposing matters that can be
acted upon by stockholders at stockholder meetings; and

. Require that vacancies on our board of directors, including newly-created
directorships, be filled only by a majority vote of directors then in
office.

In addition, Section 203 of the Delaware General Corporation Law may
discourage, delay or prevent a change in control by prohibiting the company
from engaging in a business combination with an interested stockholder for a
period of three years after the person becomes an interested stockholder. For
more information, see "Description of Capital Stock, Certificate of
Incorporation and Bylaws."

The market price of our Class A common stock may fluctuate widely and trade at
prices below the initial public offering price.

The price of our Class A common stock after this offering may fluctuate
widely, depending upon many factors, including our perceived prospects, and the
prospects of the information technology and government contracting industries
in general, differences between our actual financial and operating results and
those expected by investors and analysts, changes in analysts' recommendations
or projections, changes in general valuations for information technology and
technical services companies, changes in general economic or market conditions
and broad market fluctuations. In addition, the terrorist attacks of September
11, 2001 and subsequent bioterrorism concerns have contributed to an economic
slowdown and to significant instability in the U.S. and other global financial
equity markets. The armed hostilities that were initiated as a result of these
attacks and future responses by the federal government may lead to further acts
of terrorism in the United States or elsewhere, and such developments would
likely cause further instability in financial markets. All of these factors
subject our operations to increased risks and could have a material adverse
effect on your investment in our common stock. As a result, our Class A common
stock may trade at prices significantly below the initial public offering price.

We will have broad discretion over the use of proceeds from this offering.

We intend to use the net proceeds from this offering to retire portions of
our outstanding debt obligations, to pursue possible acquisitions and for
working capital and other general corporate purposes. We may not use the
proceeds from this offering for each of these purposes. Future events,
including changes in competitive conditions, our ability to identify
appropriate acquisition candidates, the availability of other financing and
funds generated from operations and the status of our business from time to
time, may lead us to change the allocation of the net proceeds of this offering
among these possible uses. We will have broad discretion with respect to the
use of these funds and the determination of the timing of expenditures. We
cannot assure you that we will use these funds in a manner that you would
approve of or that the allocations will be in the best interests of all of our
stockholders.

We make forward-looking statements in this prospectus that involve risks,
uncertainties and assumptions.

We have made forward-looking statements in this prospectus, including in
the section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations," that are based on our management's
beliefs and assumptions and on information currently available to our
management. Forward-looking statements include all statements that are not
historical facts and can be identified by the use of forward-looking
terminology such as the words "believes," "expects,"

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"anticipates," "intends," "plans," "estimates" or similar expressions.
Forward-looking statements include the information concerning our possible or
assumed future results of operations, business strategies, anticipated
expenses, anticipated backlog and GSA schedule contract value, financing plans,
competitive position, potential growth opportunities, the future of our
industry, the effects of future regulation and the effects of competition.
Forward-looking statements involve risks, uncertainties and assumptions. You
should not put undue reliance on any forward-looking statements. You should
understand that many important factors discussed in this "Risk Factors" section
and elsewhere in this prospectus could cause our results to differ materially
from those expressed in forward-looking statements. We do not have any
intention or obligation to update forward-looking statements after the
underwriters cease to distribute this prospectus, except as provided by law.

USE OF PROCEEDS

We estimate the net proceeds to us of this offering to be approximately
$100.3 million, based on an offering price of $16.00 per share, after deducting
the estimated expenses related to this offering and the portion of the
underwriting discount payable by us. We intend to use the net proceeds we
receive to pay off all of the principal and accrued interest then outstanding
under our term loan and under our subordinated debt and to pay off all but
$25.0 million of principal owing under our revolving credit facility. The
amounts outstanding under these borrowings fluctuate from time to time, but as
of December 31, 2001, the principal and accrued interest under our term loan
was approximately $5.9 million, principal and accrued interest under our
subordinated debt was approximately $8.0 million, and principal and accrued
interest under our revolving credit facility was approximately $57.3 million.
The term loan, revolving credit facility and subordinated debt agreements
mature on December 31, 2004 and accrue interest at per annum rates of prime
plus 1.25% (6.0% at December 31, 2001), prime plus 0.75% (5.5% at December 31,
2001) and 12.0%, respectively. We incurred the indebtedness under the term loan
and the revolving credit facility in December 2001 and used the net proceeds of
this indebtedness to pay off our prior term loan and revolving credit facility.

We intend to use the remainder of the net proceeds of this offering
(together with cash on hand, additional borrowings and capital stock) to fund
all or a portion of the costs of any acquisitions of complementary businesses
we determine to pursue in the future, although there are no assurances that we
will be able to successfully identify or consummate any such acquisitions. To
the extent that we do not pursue or consummate any acquisitions, any remaining
net proceeds to us will be used for working capital and general corporate
purposes. We have no present commitments, agreements or understandings to
acquire any business. We may invest the net proceeds of this offering in
short-term, investment grade, interest-bearing securities or guaranteed
obligations of the United States or its agencies. We will not receive any
proceeds from the sale of the shares to be sold by the selling stockholder in
this offering or under the over-allotment option.

DIVIDEND POLICY

Our credit facility prohibits us from paying cash dividends to holders of
our common stock. In addition, we currently intend to retain any earnings for
the future operation and growth of our business. Therefore, we do not
anticipate paying any cash dividends on our common stock in the foreseeable
future. No dividends have been declared on any class of our common stock during
the past two fiscal years. Any future dividends declared would be at the
discretion of our board of directors and would depend, among other factors,
upon our results of operations, financial condition and cash requirements and
the terms of our credit facility and other financing agreements at the time
such payment is considered.

424B4 22nd Page of 112 TOC 1st Previous Next ↓Bottom Just 22nd
CAPITALIZATION

The following table sets forth our cash and cash equivalents and
capitalization at September 30, 2001 on an actual and as adjusted basis. As
adjusted figures assume the application of the net proceeds of this offering to
us, and that the over-allotment option is not exercised. You should read this
table in conjunction with the consolidated financial statements and notes to
the consolidated financial statements included elsewhere in this prospectus.

[Download Table]

At September 30, 2001
--------------------
As
Actual Adjusted(1)
-------- -----------
(In thousands)

Cash and cash equivalents....................... $ 18,231 $ 74,070
======== ========
Debt:
Current portion of long-term debt............ $ 2,769 $ 0
Total long-term debt, net of current portion. 66,668 25,000
-------- --------
Total debt............................... 69,437 25,000
-------- --------
Redeemable Class B common stock................. 1,462 0
Stockholders' equity:
Common stock................................. 1,200 2,734
Additional paid-in capital................... 2,468 102,672
Retained earnings............................ 33,246 18,634
Accumulated other comprehensive loss......... (1,540) (1,540)
Deferred compensation........................ 640 640
Treasury stock............................... (14,612) 0
-------- --------
Total stockholders' equity............... 21,402 123,140
-------- --------
Total capitalization............................ $ 92,301 $148,140
======== ========

--------
(1) The as adjusted balance sheet data as of September 30, 2001 gives effect to
the following transactions:
. Our reincorporation as a Delaware corporation through our merger with
ManTech International Corporation, a New Jersey corporation. On the
effective date of the merger, each outstanding share of the New Jersey
corporation's common stock was exchanged for one share of our Class A
common stock or Class B common stock; and
. Immediately after the merger, we effected a 16.3062-for-one stock split
of the outstanding shares of Class A and Class B common stock.

424B4 23rd Page of 112 TOC 1st Previous Next ↓Bottom Just 23rd
DILUTION

At September 30, 2001, we had net tangible book value of $11.6 million, or
$0.62 per share. After giving effect to the sale of 6,866,667 shares of Class A
common stock that we are offering at an initial public offering price of $16.00
per share, and after deducting the estimated offering expenses and the portion
of the underwriting discount payable by us, our pro forma net tangible book
value per share is $4.38. This represents an immediate appreciation in net
tangible book value of $3.76 per share to existing stockholders and an
immediate dilution of net tangible book value of $11.62 per share to new
investors. The following table illustrates the pro forma per share dilution and
appreciation at September 30, 2001:

[Enlarge/Download Table]

. Initial public offering price per share......................................... $16.00
. Net tangible book value per share as of September 30, 2001...................... $ 0.62
. Appreciation per share attributable to new investors............................ $ 3.76
. Pro forma net tangible book value per share after giving effect to this offering $ 4.38
. Dilution per share to new investors............................................. $11.62

Net tangible book value per share of common stock is determined by dividing
our tangible net worth, which consists of tangible assets less liabilities, by
the number of shares of our common stock outstanding. Dilution is determined by
subtracting the net tangible book value per share of Class A common stock after
this offering from the public offering price per share. Appreciation per share
attributable to new investors would be $4.04 if the underwriters exercise in
full their over-allotment option.

The following table compares the public offering price of the shares of
Class A common stock to the cost to our existing stockholders of shares of
Class A and Class B common stock that they acquired within the past five years,
or which they have the right to acquire under outstanding stock options.

[Download Table]

Shares Purchased Total Consideration
---------------------- ----------------------
Average
Price Per
Number Percent(1) Amount Percent(2) Share
--------- ---------- ------------ ---------- ---------

Existing stockholders 159,621(3) 2.27% $ 268,806 0.24% $ 1.68(4)
New investors........ 6,866,667 97.73 109,866,672 99.76 16.00
--------- ------ ------------ ------
Total............. 7,026,288 100.00% $110,135,478 100.00%
========= ====== ============ ======

--------
(1) The number of shares purchased as a percent of the total number of shares
of our common stock outstanding on September 30, 2001.
(2) The amount paid for the shares purchased as a percent of total price paid
for the shares of our common stock in the past five years.
(3) Includes all shares of our common stock purchased in the last five years
and assumes the exercise of all stock options outstanding as of September
30, 2001.
(4) Based on the weighted average exercise price of all stock options exercised
during the last five years, as well as all stock options outstanding as of
September 30, 2001.

424B4 24th Page of 112 TOC 1st Previous Next ↓Bottom Just 24th
SELECTED FINANCIAL DATA

The selected financial data presented below for the nine months ended
September 30, 2001 and for each of the years in the five-year period ended
December 31, 2000 is derived from our audited consolidated financial
statements. The data for the nine months ended September 30, 2000 and the
recent operating results for each of the most recent eight quarters is derived
from our unaudited consolidated financial statements and includes all
adjustments, consisting of normal and recurring adjustments, that we consider
necessary for a fair presentation of the financial position and results of
operations as of and for such periods. Interim financial results for any
quarter and for the nine months ended September 30, 2000 and September 30, 2001
are not necessarily indicative of the results that may be expected for the full
year. You should read the selected financial data presented below in
conjunction with our consolidated financial statements, the notes to our
consolidated financial statements and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

[Enlarge/Download Table]

Nine Months Ended
Year Ended December 31, September 30,
------------------------------------------------ ------------------
1996 1997 1998 1999 2000 2000 2001
-------- -------- -------- -------- -------- -------- --------
(In thousands, except per share amounts)

Statement of Income Data:
Revenues................................................ $223,049 $286,051 $314,309 $353,924 $378,827 $280,970 $316,266
Cost of services..................................... 191,589 245,857 265,189 296,306 315,414 234,834 258,412
-------- -------- -------- -------- -------- -------- --------
Gross profit............................................ 31,460 40,194 49,120 57,618 63,413 46,136 57,854
-------- -------- -------- -------- -------- -------- --------
Costs and expenses:
General and administrative........................... 23,141 27,509 33,389 39,175 41,545 30,993 33,166
Depreciation and amortization........................ 1,300 2,304 2,284 3,275 3,279 2,448 2,451
-------- -------- -------- -------- -------- -------- --------
Total costs and expenses.......................... 24,441 29,813 35,673 42,450 44,824 33,441 35,617
-------- -------- -------- -------- -------- -------- --------
Income from operations.................................. 7,019 10,381 13,447 15,168 18,589 12,695 22,237
Interest expense........................................ 1,647 2,434 4,020 4,122 4,438 3,316 2,383
Loss from investment default............................ -- -- 5,230 -- -- -- --
Other (income) expense, net............................. (326) (1,925) (940) (1,253) 1,039 (73) (1,386)
-------- -------- -------- -------- -------- -------- --------
Income before provision for income taxes and
minority interest...................................... 5,698 9,872 5,137 12,299 13,112 9,452 21,240
Provision for income taxes.............................. (2,614) (4,410) (2,183) (5,466) (5,974) (4,327) (9,062)
Minority interest....................................... (7) (24) (33) (37) (13) (12) (18)
-------- -------- -------- -------- -------- -------- --------
Income from continuing operations....................... 3,077 5,438 2,921 6,796 7,125 5,113 12,160
(Loss) income from discontinued operations.............. (1,039) 255 (1,268) (2,727) (4,667) (3,124) (6,533)
Loss on disposal of discontinued operations............. (93) -- -- -- (719) (719) (5,890)
-------- -------- -------- -------- -------- -------- --------
Net income (loss)....................................... $ 1,945 $ 5,693 $ 1,653 $ 4,069 $ 1,739 $ 1,270 $ (263)
======== ======== ======== ======== ======== ======== ========
Income from continuing operations available to
common stockholders.................................... $ 1,947 $ 4,189 $ 2,838 $ 6,796 $ 7,125 $ 5,113 $ 12,160
======== ======== ======== ======== ======== ======== ========
As Reported:
Basic earnings per share from continuing operations(1).. $ 1.67 $ 3.60 $ 2.46 $ 5.98 $ 6.29 $ 4.53 $ 10.68
======== ======== ======== ======== ======== ======== ========
Diluted earnings per share from continuing operations(1) $ 1.64 $ 3.54 $ 2.43 $ 5.93 $ 6.24 $ 4.49 $ 10.59
======== ======== ======== ======== ======== ======== ========
Post-Split:
Basic earnings per share from continuing operations(2).. $ 0.10 $ 0.22 $ 0.15 $ 0.37 $ 0.39 $ 0.28 $ 0.66
======== ======== ======== ======== ======== ======== ========
Diluted earnings per share from continuing operations(2) $ 0.10 $ 0.22 $ 0.15 $ 0.36 $ 0.38 $ 0.28 $ 0.65
======== ======== ======== ======== ======== ======== ========
Balance Sheet Data:
Cash and cash equivalents............................... $ 13,276 $ 17,318 $ 14,572 $ 19,571 $ 29,578 $ 11,366 $ 18,231
Working capital......................................... 36,916 46,593 59,354 66,784 71,882 67,503 62,016
Total assets............................................ 108,705 154,886 165,718 186,070 186,843 176,736 177,061
Long-term debt.......................................... 37,642 49,135 66,377 72,005 73,000 69,075 66,668
Total stockholders' equity.............................. 12,506 16,831 15,515 19,548 21,794 21,433 21,402

(1) Represents the calculation of earnings per share of our corporate
predecessor, ManTech International Corporation (New Jersey), as reported in
the historical consolidated financial statements, prior to our
reincorporation, recapitalization and subsequent stock split, as discussed
in "Transactions Prior to the Offering" on page 6.
(2) Prior to this offering, we reincorporated from New Jersey to Delaware,
recapitalized and effected a 16.3062-for-one stock split, and the
Post-Split per share data gives effect to these transactions. The holders
of each share of Class A common stock are entitled to one vote per share,
and the holders of each share of Class B common stock are entitled to ten
votes per share.

424B4 25th Page of 112 TOC 1st Previous Next ↓Bottom Just 25th
QUARTERLY RESULTS OF OPERATIONS

Our results of operations, particularly our revenues, gross profit and cash
flow, may vary significantly from quarter to quarter depending on a number of
factors, including the progress of contract performance, revenues earned on
contracts, the number of billable days in a quarter, the timing of customer
orders and billing of other direct costs, the commencement and completion of
contracts during any particular quarter, the timing of government contract
awards, the term of each contract that we have been awarded and general
economic conditions. For example, revenues in the first quarter of 2000 were
lower than the fourth quarter of 1999 due to two fewer billable days in the
first quarter, and the inclusion in the fourth quarter's revenues of a larger
than usual amount of other direct costs incurred on our programs. Because a
significant portion of our expenses, such as personnel and facilities costs,
are fixed in the short term, successful contract performance and variation in
the volume of activity, as well as in the number of contracts commenced or
completed during any quarter may cause significant variations in operating
results from quarter to quarter.

The federal government's fiscal year ends September 30. If a budget for the
next fiscal year has not been approved by that date in each year, our customers
may have to suspend engagements that we are working on until a budget has been
approved. Such suspensions may cause us to realize lower revenues in the fourth
quarter of the year. Further, a change in Presidential administrations or in
senior government officials may negatively affect the rate at which the federal
government purchases technology. The federal government's fiscal year end can
also trigger increased purchase requests from customers for equipment and
materials. Any increased purchase requests we receive as a result of the
federal government's fiscal year end would serve to increase our fourth quarter
revenues but will generally decrease profit margins for that quarter, as these
activities typically are not as profitable as our normal service offerings.

As a result of the factors above, period-to-period comparisons of our
revenues and operating results may not be meaningful. You should not rely on
these comparisons as indicators of future performance as no assurances can be
given that quarterly results will not fluctuate, causing a material adverse
effect on our operating results and financial condition.

424B4 26th Page of 112 TOC 1st Previous Next ↓Bottom Just 26th
[Enlarge/Download Table]

Quarters Ended
--------------------------------------------------------------------------
Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30,
1999 2000 2000 2000 2000 2001 2001 2001
-------- -------- -------- --------- -------- -------- -------- ---------
(In thousands)

Statement of Income Data:
Revenues................................ $94,953 $91,320 $93,485 $96,165 $97,857 $105,081 $105,627 $105,558
Cost of services..................... 80,642 75,717 78,558 80,559 80,580 86,433 86,623 85,356
------- ------- ------- ------- ------- -------- -------- --------
Gross profit............................ 14,311 15,603 14,927 15,606 17,277 18,648 19,004 20,202
------- ------- ------- ------- ------- -------- -------- --------
Costs and expenses:
General and administrative........... 10,937 10,431 10,076 10,486 10,552 10,436 11,258 11,472
Depreciation and amortization........ 786 824 828 796 831 826 827 798
------- ------- ------- ------- ------- -------- -------- --------
Total costs and expenses.......... 11,723 11,255 10,904 11,282 11,383 11,262 12,085 12,270
------- ------- ------- ------- ------- -------- -------- --------
Income from operations.................. 2,588 4,348 4,023 4,324 5,894 7,386 6,919 7,932
Interest expense........................ 1,057 1,027 1,082 1,207 1,122 807 771 805
Loss from investment default............ -- -- -- -- -- -- -- --
Other (income) expense, net............. (585) (246) 141 32 1,112 (443) (749) (194)
------- ------- ------- ------- ------- -------- -------- --------
Income before provision for income taxes
and minority interest.................. 2,116 3,567 2,800 3,085 3,660 7,022 6,897 7,321
Provision for income taxes.............. (930) (1,617) (1,314) (1,396) (1,647) (3,006) (2,953) (3,103)
Minority interest....................... (12) (7) -- (5) (1) (7) (7) (4)
------- ------- ------- ------- ------- -------- -------- --------
Income from continuing operations....... 1,174 1,943 1,486 1,684 2,012 4,009 3,937 4,214
Loss from discontinued operations....... (603) (886) (1,394) (844) (1,543) (2,361) (1,907) (2,265)
Loss on disposal of discontinued
operations............................. -- -- -- (719) -- -- -- (5,890)
------- ------- ------- ------- ------- -------- -------- --------
Net income (loss)....................... $ 571 $ 1,057 $ 92 $ 121 $ 469 $ 1,648 $ 2,030 $ (3,941)
======= ======= ======= ======= ======= ======== ======== ========
As a Percentage of Revenues:
Revenues................................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of services..................... 84.9 82.9 84.0 83.8 82.3 82.3 82.0 80.9
------- ------- ------- ------- ------- -------- -------- --------
Gross profit............................ 15.1 17.1 16.0 16.2 17.7 17.7 18.0 19.1
------- ------- ------- ------- ------- -------- -------- --------
Costs and expenses:
General and administrative........... 11.5 11.4 10.8 10.9 10.8 9.9 10.7 10.9
Depreciation and amortization........ 0.8 0.9 0.9 0.8 0.8 0.8 0.8 0.8
------- ------- ------- ------- ------- -------- -------- --------
Total costs and expenses.......... 12.3 12.3 11.7 11.7 11.6 10.7 11.5 11.7
------- ------- ------- ------- ------- -------- -------- --------
Income from operations.................. 2.8 4.8 4.3 4.5 6.1 7.0 6.5 7.4
Interest expense........................ 1.1 1.1 1.2 1.3 1.1 0.8 0.7 0.8
Loss from investment default............ -- -- -- -- -- -- -- --
Other (income) expense, net............. (0.6) (0.3) 0.2 0.0 1.1 (0.4) (0.7) (0.2)
------- ------- ------- ------- ------- -------- -------- --------
Income before provision for income taxes
and minority interest.................. 2.3 4.0 2.9 3.2 3.9 6.6 6.5 6.8
Provision for income taxes.............. (1.0) (1.8) (1.4) (1.5) (1.7) (2.9) (2.8) (2.9)
Minority interest....................... (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0) (0.0)
------- ------- ------- ------- ------- -------- -------- --------
Income from continuing operations....... 1.3 2.2 1.5 1.7 2.2 3.7 3.7 3.9
Loss from discontinued operations....... (0.6) (1.0) (1.5) (0.9) (1.6) (2.2) (1.8) (2.1)
Loss on disposal of discontinued
operations............................. -- -- -- (0.7) -- -- -- (5.6)
------- ------- ------- ------- ------- -------- -------- --------
Net income (loss)....................... 0.7% 1.2% 0.0% 0.1% 0.6% 1.5% 1.9% (3.8%)
======= ======= ======= ======= ======= ======== ======== ========

424B4 27th Page of 112 TOC 1st Previous Next ↓Bottom Just 27th
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of
operations should be read together with the consolidated financial statements
and the notes to those statements included elsewhere in this prospectus. This
discussion contains forward-looking statements that involve risks and
uncertainties. For additional information regarding some of the risks and
uncertainties that affect our business and the industry in which we operate and
that apply to an investment in our Class A common stock, please see "Risk
Factors" at page 7. This discussion addresses only our continuing operations,
except in the discussion under the heading, "Discontinued Operations." For more
information on our discontinued operations, please see "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Discontinued
Operations" and note 15 to our consolidated financial statements.

Overview

We deliver a broad array of information technology and technical services
solutions to U.S. federal government customers, focusing primarily on critical
national defense programs for the intelligence community and Department of
Defense. We design, develop, procure, implement, operate, test and maintain
mission-critical, enterprise information technology and communication systems
and intelligence processing infrastructures for our federal government
customers. We also provide solutions to federal government civilian agencies,
as well as to state and local governments and commercial customers.

A substantial portion of our revenues are derived from contracts with the
federal government. For the nine months ended September 30, 2001 and the year
ended December 31, 2000, 95.8% and 96.1%, respectively, of our revenues were
derived, either as a prime or a subcontractor, from contracts with the federal
government. For the nine months ended September 30, 2001 and 2000, we derived
84.1% and 83.3%, respectively, of our revenues from contracts with our
customers in the intelligence community and Department of Defense.

Our revenues consist primarily of payments for the work of our employees
and, to a lesser extent, the pass-through of costs for material and subcontract
efforts under contracts with our customers. We enter into three types of
federal government contracts: cost-plus, time-and-materials and fixed-price.
Under cost-plus contracts, we are reimbursed for allowable costs and paid a
fee, which may be fixed or performance-based. Under time-and-materials
contracts, we are reimbursed for labor at negotiated hourly billing rates and
for certain expenses. We assume financial risk on time-and-material contracts
because we assume the risk of performing those contracts at negotiated hourly
rates. Under fixed-price contracts, we perform specific tasks for a fixed
price. Compared to cost-plus contracts, fixed-price contracts generally offer
higher margin opportunities but involve greater financial risk because we bear
the impact of cost overruns and receive the benefit of cost savings. For the
nine months ended September 30, 2001, we derived approximately 36.3%, 35.6% and
28.1% of our revenues from cost-plus, time-and-materials and fixed-price
contracts, respectively. For the year ended December 31, 2000, we derived
approximately 39.7%, 34.6% and 25.7% of our revenues from cost-plus,
time-and-materials and fixed-price contracts, respectively.

We recognize revenues under cost-plus contracts as our costs are incurred
and we include an estimate of applicable fees earned. We recognize revenues
under time-and-materials contracts by multiplying the number of direct
labor-hours expended in the performance of the contract by the contract billing
rates and adding other billable direct costs. For contracts that include
performance-based incentives, we recognize the incentives when they have been
earned and we can reasonably demonstrate satisfaction of the performance goal
or when the incentive has been awarded. We

424B4 28th Page of 112 TOC 1st Previous Next ↓Bottom Just 28th
recognize revenues under fixed-price contracts using the percentage of
completion method, which involves a periodic assessment of costs incurred to
date in relation to the estimated total costs at completion, or upon the
delivery of specific products or services. We record the cumulative effects of
any revisions to our estimated total costs and revenues in the period in which
the facts requiring revisions become known. If we anticipate a loss on a
contract, we provide for the full amount of the anticipated loss at the time of
that determination.

Our most significant expense is our cost of services, which consists
primarily of direct labor costs for program personnel and direct expenses
incurred to complete contracts, including cost of materials and subcontract
efforts. Our ability to accurately predict personnel requirements, salaries and
other costs, as well as to manage personnel levels and successfully redeploy
personnel, can have a significant impact on our cost of services. General and
administrative expenses consist primarily of costs associated with our
management, finance and administrative groups; personnel training; sales and
marketing expenses which include bid and proposal efforts; and certain
occupancy, travel and other corporate costs.

Results of Operations

The following table sets forth, for each period indicated, the percentage
of items in the consolidated statement of operations in relation to revenues.

[Enlarge/Download Table]

Nine Months
Year Ended Ended
December 31, September 30,
------------------- ------------
1998 1999 2000 2000 2001
----- ----- ----- ----- -----

Revenues...................................................... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of services........................................... 84.4 83.7 83.3 83.6 81.7
----- ----- ----- ----- -----
Gross profit.................................................. 15.6 16.3 16.7 16.4 18.3
----- ----- ----- ----- -----
Costs and expenses:
General and administrative................................. 10.6 11.1 11.0 11.0 10.5
Depreciation and amortization.............................. 0.7 0.9 0.9 0.9 0.8
----- ----- ----- ----- -----
Total costs and expenses............................... 11.3 12.0 11.9 11.9 11.3
----- ----- ----- ----- -----
Income from operations........................................ 4.3 4.3 4.8 4.5 7.0
Interest expense.............................................. 1.3 1.2 1.2 1.2 0.8
Loss from investment default.................................. 1.7 -- -- -- --
Other (income) expense, net................................... (0.3) (0.4) 0.3 (0.0) (0.4)
----- ----- ----- ----- -----
Income before provision for income taxes and minority interest 1.6 3.5 3.3 3.3 6.6
Provision for income taxes.................................... (0.7) (1.5) (1.6) (1.5) (2.9)
Minority interest............................................. (0.0) (0.0) (0.0) (0.0) (0.0)
----- ----- ----- ----- -----
Income from continuing operations............................. 0.9 2.0 1.7 1.8 3.7
Loss from discontinued operations............................. (0.4) (0.8) (1.2) (1.1) (2.1)
Loss on disposal of discontinued operations................... -- -- (0.2) (0.3) (1.9)
----- ----- ----- ----- -----
Net income (loss)............................................. 0.5% 1.2% 0.3% 0.4% (0.3)%
===== ===== ===== ===== =====

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The following table sets forth, for each period indicated, the percentage
of our revenues derived from each of our major types of customers.

[Download Table]

Nine Months
Year Ended Ended
December 31, September 30,
------------------- ------------
1998 1999 2000 2000 2001
----- ----- ----- ----- -----

Intelligence / Department of Defense 82.9% 81.7% 83.6% 83.3% 84.1%
Federal Civilian Agencies........... 14.2 14.3 12.5 12.8 11.7
Commercial / State / Local.......... 2.9 4.0 3.9 3.9 4.2
----- ----- ----- ----- -----
Total............................ 100.0% 100.0% 100.0% 100.0% 100.0%
===== ===== ===== ===== =====

Nine Months Ended September 30, 2001 Compared to the Nine Months Ended
September 30, 2000

Revenues. Revenues increased 12.6% to $316.3 million for the nine months
ended September 30, 2001, compared to $281.0 million for the period in 2000.
This increase is attributable primarily to additional work under contracts that
were in existence during the corresponding period of the prior year. Additional
work from the Department of State and the Army for secure systems and
infrastructure solutions, the Defense Security Service for information
technology solutions and from the Marine Corps for systems engineering
solutions contributed significantly to the increased revenues. We derived
approximately 31.1% of our revenues for the nine months ended September 30,
2001 from work under GSA schedule contracts, compared with approximately 29.8%
for 2000. We derived approximately 8.4% of our revenues for the nine months
ended September 30, 2001 from contracts in which we acted as a subcontractor,
compared with approximately 7.8% for 2000.

Cost of services. Cost of services increased 10.0% to $258.4 million for
the nine months ended September 30, 2001, compared to $234.8 million for 2000.
As a percentage of revenues, cost of services decreased from 83.6% to 81.7%.
Direct labor costs increased by 6.0%, while other direct costs increased by
18.2% over 2000. Material and subcontract costs increased 18.2% to $108.6
million for the nine months ended September 30, 2001, compared to $91.9 million
for 2000. The increase arose primarily from our secure systems and
infrastructure solutions work and, to a lesser degree, our Defense Security
Service information technology work.

Gross profit. Gross profit increased 25.4% to $57.9 million for the nine
months ended September 30, 2001, compared to $46.1 million for 2000. Gross
profit margin increased to 18.3% for the nine months ended September 30, 2001,
compared to 16.4% for 2000. The increase resulted from higher margins on new
secure systems and infrastructure and information technology tasks, in
conjunction with our improved realization of cost efficiencies, as a greater
percentage of our work is performed under GSA schedule contracts.

General and administrative. General and administrative expenses increased
7.0% to $33.2 million for the nine months ended September 30, 2001, compared to
$31.0 million for 2000 for additional management personnel and infrastructure
to support the growth of our business. As a percentage of revenues, general and
administrative expenses declined 0.5% over the comparable period during the
prior year as a result of operating efficiencies, such as our improved
monitoring of costs.

Depreciation and amortization. Depreciation and amortization expense has
remained relatively constant for the nine months ended September 30, 2001 and
2000, because we have not acquired any companies or made any significant
purchases of fixed assets during the periods.

424B4 30th Page of 112 TOC 1st Previous Next ↓Bottom Just 30th
Income from operations. Income from operations increased 75.2% to $22.2
million for the nine months ended September 30, 2001, compared with $12.7
million for 2000. The increase was primarily a result of the increase in
revenues relative to the cost of services discussed above. Another contributing
factor was the improvement in other income that was driven by our receipt of
$500,000 from our agreement to discontinue a subcontract.

Income from continuing operations. Income increased 137.8% to $12.2
million for the nine months ended September 30, 2001, compared to $5.1 million
for 2000. The increase resulted from higher operating income, an increase in
other income, reduced interest expense and a lower effective tax rate. Other
income increases are primarily attributable to our equity investment in an
affiliate which incurred losses in 2000, but has been profitable in 2001.
Interest expense for the period decreased by 28.1% from the nine months ended
September 30, 2000 as a result of a $4.0 million reduction in our average
balance under our line of credit and from lower interest rates. Our effective
tax rate for the nine months ended September 30, 2001 was 42.7%, compared to
45.8% for 2000, due to a relative decrease in non-deductible expenses.

Year Ended December 31, 2000 Compared to the Year Ended December 31, 1999

Revenues. Revenues increased 7.0% to $378.8 million for the year ended
December 31, 2000, compared to $353.9 million for 1999. This increase was
attributable primarily to additional work under contracts that were in
existence during the prior year. Additional work from the Department of State
and the Army for secure systems and infrastructure solutions and from the
Marine Corps for systems engineering solutions contributed significantly to the
increased revenues, offset in part by declines in work under an Army
information technology solutions contract. We derived approximately 29.8% of
our revenues for 2000 from work under GSA schedule contracts, compared with
approximately 20.3% for 1999. We derived approximately 7.8% of our revenues for
2000 from contracts in which we acted as a subcontractor, compared with
approximately 6.8% for 1999.

Cost of services. Cost of services increased 6.4% to $315.4 million for
2000, compared to $296.3 million for 1999. As a percentage of revenues, cost of
services decreased from 83.7% to 83.3%. Direct labor costs increased by 5.9%,
while other direct costs increased by 8.2% over 1999. Material and subcontract
costs increased 8.2% to $127.2 million in 2000, compared to $117.6 million in
1999, as a result of costs primarily associated with increased secure systems
and infrastructure solutions.

Gross profit. Gross profit increased 10.1% to $63.4 million for 2000,
compared to $57.6 million for 1999. Gross profit margin increased to 16.7% for
2000, compared to 16.3% for 1999. This increase resulted from our improved
realization of cost efficiencies as a greater percentage of our work was
performed under GSA schedule contracts.

General and administrative. General and administrative expenses increased
6.0% to $41.5 million for 2000, compared to $39.2 million for 1999, as our
expenses grew in line with the growth of our business. As a percentage of
revenues, general and administrative expenses declined 0.1%.

Depreciation and amortization. Depreciation and amortization expense
remained relatively constant for 2000 and 1999, because we did not acquire any
companies in 2000 or make any significant purchases of fixed assets during the
year. There were no significant purchases of fixed assets during the year,
primarily due to the fact that we began leasing the majority of our computer
equipment under three-year leases in the first quarter of 1999.

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Income from operations. Income from operations increased 22.6% to $18.6
million for 2000, compared to $15.2 million for 1999. The increase was
primarily a result of the increase in revenues relative to the cost of services
discussed above, offset by increased general and administrative expenses.

Income from continuing operations. Income increased 4.8% to $7.1 million
for 2000, compared to $6.8 million for 1999. The increase resulted from higher
operating income, offset by higher interest expense, a reduction in other
income and a higher effective tax rate. While the average debt balance remained
fairly constant year over year, interest expense for the year increased by $0.3
million from the prior year as a result of increasing interest rates. Other
income declined by $2.3 million in 2000 compared to 1999 as a result of reduced
earnings from an equity investment and a non-recurring $0.4 million gain
recorded in 1999 upon our sale of a building. Our effective tax rate for 2000
was 45.6%, compared to 44.4% for 1999, due to a relative increase in
non-deductible expenses.

Year Ended December 31, 1999 Compared to the Year Ended December 31, 1998

Revenues. Revenues increased 12.6% to $353.9 million for the year ended
December 31, 1999, compared to $314.3 million for 1998. This increase is
attributable primarily to contracts with the Department of State and other
intelligence agency contracts for secure systems and infrastructure solutions,
which were awarded in 1999. We also had approximately $7.4 million in
additional revenues, which resulted from our January 1999 acquisition of
Advanced Development Group, Inc., most of which consists of information
technology work for the Army. The balance of the increase is attributable to
additional work under contracts that were in existence during the prior year,
including work from several intelligence agency customers and from the Marine
Corps for systems engineering solutions. We derived approximately 20.3% of our
revenues for 1999 from work under GSA schedule contracts, compared with
approximately 10.4% for 1998. We derived approximately 6.8% of our revenues for
1999 from contracts in which we acted as a subcontractor, compared with
approximately 6.2% for 1998.

Cost of services. Cost of services increased 11.7% to $296.3 million for
1999, compared to $265.2 million for 1998. As a percentage of revenues, cost of
services decreased from 84.4% to 83.7%. Direct labor costs increased by 14.6%
as a result of additional staff hired to support new and expanded contract work
as well as the addition of staff from Advanced Development Group. Other direct
costs increased by 7.6% over the comparable period in 1998. Material and
subcontract costs increased 7.6% to $117.6 million for 1999, compared to $109.2
million for 1998.

Gross profit. Gross profit increased 17.3% to $57.6 million for 1999,
compared to $49.1 million for 1998. Gross profit margin increased to 16.3% for
1999, compared to 15.6% for 1998. This increase resulted from improved margins
as a result of reduced reliance on subcontractors and additional services
provided under new GSA schedule contracts.

General and administrative. General and administrative expenses increased
17.3% to $39.2 million for 1999, compared to $33.4 million for 1998. As a
percentage of revenues, general and administrative expenses increased 0.5% over
the prior year, primarily as a result of increased infrastructure requirements,
including expenses associated with our management and marketing of our new GSA
schedule contracts.

Depreciation and amortization. Depreciation and amortization expense
increased 43.4% to $3.3 million for 1999 compared to $2.3 million for 1998. The
increase resulted from amortization of purchased contract costs and noncompete
agreements associated with our acquisition of Advanced

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Development Group and, to a lesser extent, amortization of capitalized software
development costs. There were no significant purchases of fixed assets during
1999, primarily due to the fact that we began leasing the majority of our
computer equipment under three-year leases in the first quarter of 1999.

Income from operations. Income from operations increased 12.8% to $15.2
million for 1999, compared to $13.4 million in 1998. The increase was primarily
a result of the increase in revenues relative to the cost of services discussed
above, offset by increased general and administrative expenses.

Income from continuing operations. Income increased 132.7% to $6.8 million
for 1999, compared to $2.9 million for 1998. The increase resulted from higher
operating income and higher other income, offset by a higher effective tax
rate. Other income rose during the period by $0.4 million as a result of a gain
posted on the sale of a building. Interest expense for 1999 increased by $0.1
million from an increase of $0.9 million in the average debt balance. Our
effective tax rate for 1999 was 44.4%, compared to 42.5% for 1998, due to a
relative increase in non-deductible expenses. In addition, income from
continuing operations in 1998 was affected by a $5.2 million non-recurring
charge that resulted from Global Intellicom defaulting on notes it had issued
to us in 1996 in connection with Global Intellicom's 1996 purchase of our
custom computer hardware business.

Liquidity and Capital Resources

Our primary source of liquidity is cash provided by operations and our
revolving credit and term-loan facility. We fund our operations primarily
through cash provided by operating activities. Cash provided by continuing
operations was $12.5 million for the nine months ended September 30, 2001, an
increase of $11.3 million from the prior year period. The primary reason for
this increase was a $7.0 million increase in income from continuing operations
and increases in salary-related accruals and decreases in prepaid and other
assets offset by increased contract receivables and decreased advanced billings
and accounts payable and other accruals.

Cash provided by operating activities of continuing operations for 2000,
1999 and 1998 was $19.9 million, $9.4 million and $7.9 million, respectively.
In 2000, cash provided by operating activities was generated primarily from
income from continuing operations of $7.1 million, a decrease in contract
receivables as a result of greater efforts to monitor and collect these
amounts, an increase in advanced billings and an increase in salary-related
accruals, offset by increases in prepaid expenses and other assets and
decreases in accounts payable and accrued expenses. In 1999, cash flow was
principally due to income from continuing operations of $6.8 million, increases
in accounts payable and accrued expenses and decreases in prepaid expenses and
other assets, offset by a significant increase in contract receivables
resulting from growth in our contract base. In 1998, cash was generated by
income from continuing operations of $2.9 million plus the non-cash investment
default of $5.2 million offset by increased contract receivables and decreased
advanced billings.

Cash used in investing activities of continuing operations was $5.6 million
for the nine months ended September 30, 2001, compared to $2.1 million for the
prior nine month period. Investment activities included extending loans to an
affiliate, purchase of property and equipment and investments in intellectual
property. Cash used in investing activities for 2000, 1999 and 1998 was $4.2
million, $2.6 million and $5.0 million, respectively. Financing activities have
primarily consisted of investments in intellectual property, acquisitions of
businesses, investments and loans to affiliates and purchase of property and
equipment.

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Cash used in financing activities of continuing operations was $7.7 million
for the nine months ended September 30, 2001, compared to $3.8 million for the
nine months ended September 30, 2000. The net cash used during 2001 and 2000 is
primarily the result of reduction in debt.

Cash used in financing activities of continuing operations was $0.0 million
for 2000. Cash provided by financing activities of continuing operations was
$2.0 million for 1999 and $1.3 million for 1998. Debt repayments and borrowings
produced no significant cash impact in 2000. Borrowings under our line of
credit exceeded repayments of other debt items by $2.0 million in 1999. In
1998, we undertook $8.0 million in subordinated debt in order to finance the
redemption of $8.0 million in preferred stock. We also redeemed $2.9 million in
common stock from a former employee. This was financed through borrowings under
our line of credit.

On December 17, 2001, we executed a new Business Loan and Security
Agreement with Citizens Bank of Pennsylvania, PNC Bank N.A., Branch Banking and
Trust Company of Virginia, and Chevy Chase Bank, F.S.B. to refinance and
replace our prior agreement. The new agreement provides for a $65.0 million
revolving credit facility and a $6.4 million term loan. Under the term-loan
portion of the new agreement, the principal balance is payable in consecutive
quarterly installments of $0.5 million on the last business day of each quarter
commencing with the last business day of December 2001. The maturity date of
the new agreement is December 31, 2004. Borrowings under the new agreement are
collateralized by our eligible contract receivables, inventory, all of our
stock in our subsidiaries and certain property and equipment and bear interest
at the London Interbank Offering Rate (LIBOR), or the lender's prime rate, plus
market-rate spreads that are determined based on a company leverage ratio
calculation. The LIBOR spreads may range from 1.75% to 2.75% and the prime rate
spreads may range from 0.50% to 1.50%.

Our new loan agreement replaced a November 1998 Business Loan and Security
Agreement with Mellon Bank N.A., First Union Commercial Corporation and PNC
Bank N.A. that, as modified in October 2000, consisted of a $60.0 million
revolving credit facility and a $16.0 million term loan. Under the revolving
portion of the former agreement, we could borrow the lesser of defined
percentages of receivables or $60.0 million. Under the term-loan portion of the
former agreement, the principal balance was payable in consecutive quarterly
installments of $0.8 million on the last business day of each quarter with a
final payment of $6.4 million due upon the expiration of the agreement on
December 31, 2001. Borrowings under the former agreement were collateralized by
our eligible contract receivables, inventory and certain property and equipment
and as of September 30, 2001 bore interest at the agreed-upon LIBOR plus 2.25%
for the first $25.0 million outstanding, at LIBOR plus 2.75% for the term loan,
at LIBOR plus 2.03125% for European currency loans of $1.0 million and at the
bank's prime rate plus 1.00% for outstanding amounts greater than $33.2
million. The aggregate weighted average interest rate for the nine months ended
September 30, 2001 was 8.49%. At September 30, 2001, we had $60.3 million in
borrowings outstanding under the former agreement.

In January 1998, we executed a seven-year Subordinated Credit Agreement
with First Source Financial LLP for $8.0 million to finance the redemption of
preferred stock. The principal balance is payable in eight consecutive
quarterly installments of $0.9 million on the first business day of each
quarter commencing with the first business day of January 2003. A ninth and
final payment is due on the last day of December 2004.

We believe the capital resources available to us under our credit
agreements and cash from our operations are adequate to fund our ongoing
operations and to support the internal growth we expect to achieve for at least
the next 12 months. We anticipate financing our external growth from
acquisitions

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as well as our longer-term internal growth through one or a combination of the
following: cash from operations; additional borrowing; issuance of equity; use
of the existing revolver facility; or a refinancing of our credit facilities.

Discontinued Operations

Prompted by the prospect in the early 1990s of stable or declining federal
government spending on defense programs as a result of the end of the Cold War,
we made a number of investments in businesses operating primarily in
non-governmental markets in the United States and internationally. Our
investment in commercial and international business ventures contributed to our
expertise with leading-edge information technology and technical services
solutions. As a result of the favorable outlook for government technology
service providers and the slowdown in the commercial information technology
market, we determined in January 2001 to refocus our business strategy on our
core competencies and business operations in the U.S. federal government
market. In September 2001, we decided to exit certain lines of business
involving foreign operations or operations that primarily serve commercial
customers. We have decided to dispose of or discontinue our Australian-based
software solutions consulting business, our United Kingdom-based bank
remittance processing business, our China-based consulting business, our
U.S.-based environmental consulting and remediation business and our U.S.-based
application-hosting business. We are not discontinuing or disposing of our
operations that currently provide comprehensive information technology and
systems engineering solutions to federal governmnent agencies, including the
EPA, or that currently provide database conversion solutions to commercial
customers. The lines of business to be disposed of or discontinued have been
classified as discontinued operations in our consolidated financial statements.
Based on independent valuations, market comparable information and interest
expressed in these businesses, we have estimated the likely net gains and
losses to income expected from these businesses through the estimated date of
disposal. In accordance with Accounting Principles Board Opinion No. 30,
Reporting the Results of Operations--Reporting the Effects of Disposal of a
Segment of a Business and Extraordinary Unusual and Infrequently Occurring
Events and Transactions, we have recorded all current and expected future
losses and deferred all gains expected to be realized upon disposal of the
respective entities.

Quantitative and Qualitative Disclosures About Market Risk

Our exposure to market risk relates to changes in interest rates for
borrowings under our senior term loan and our revolving credit facility. These
borrowings bear interest at variable rates. We also have an unsecured note that
bears interest at a fixed rate. We estimate the fair value of this note to
approximate the $8.0 million principal balance. Based on our senior term loan
and our revolving credit facility borrowings during 2000, a hypothetical 10%
increase in interest rates would have increased our annual interest expense by
approximately $0.5 million and would have decreased our annual cash flow from
operations by approximately $0.5 million.

In November 2000, we entered into an interest swap agreement in order to
reduce our exposure associated with the market volatility of interest rates.
This agreement has a notional amount of $25.0 million and, as of September 30,
2001, had a rate of 6.53%. This agreement is a hedge against revolving debt of
$25.0 million, which bears interest at monthly floating LIBOR plus 2.25%. At
stated monthly intervals the difference between the interest on the floating
LIBOR-based debt and the interest calculated in the swap agreement are settled
in cash. The value of the swap at September 30, 2001 was a negative $2,084,000.
In December 2001, the swap agreement was reset within our new banking group at
a rate of 6.83% with a four-year term.

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Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS
No. 141, Business Combinations (SFAS No. 141). SFAS No. 141 requires that all
business combinations be accounted for by a single method--the purchase method.
The provisions of SFAS No. 141 apply to all business combinations initiated
after June 30, 2001. SFAS No. 141 also applies to all business combinations
accounted for using the purchase method for which the date of acquisition is
July 1, 2001, or later. We do not expect the adoption of the provisions of SFAS
No. 141 to have an impact on our consolidated financial position or results of
operations.

In June 2001, the FASB issued Statement No. 142, Goodwill and Other
Intangible Assets (SFAS No. 142). SFAS No. 142 requires that, upon its
adoption, amortization of goodwill will cease and instead, the carrying value
of goodwill will be evaluated for impairment on an annual basis. Identifiable
intangible assets will continue to be amortized over their useful lives and
reviewed for impairment in accordance with SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
(SFAS No. 121). SFAS No. 142 will be effective for fiscal years beginning after
December 15, 2001. We have not yet completed our analysis of this new
pronouncement and the impact it will have on the consolidated financial
statements.

In July 2001, the FASB issued Statement No. 143, Accounting for Asset
Retirement Obligations (SFAS No. 143). SFAS No. 143 requires that the fair
value of a liability for an asset retirement obligation be recognized in the
period in which it is incurred, if a reasonable estimate of fair value can be
made. The associated asset retirement cost would be capitalized as part of the
carrying amount of the long-lived asset. SFAS No. 143 will be effective for
fiscal years beginning after June 15, 2002. We have not determined the effect
that this statement will have on our consolidated financial position or results
of operations.

In October 2001, the FASB issued Statement No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets (SFAS No. 144), that replaces SFAS
No. 121. SFAS No. 144 requires that long-lived assets be measured at the lower
of carrying amount or fair value less cost to sell, whether reported in
continuing operations or in discontinued operations. SFAS No. 144 also broadens
the reporting of discontinued operations to include all components of an entity
with operations that can be distinguished from the rest of the entity and that
will be eliminated from the ongoing operations of the entity in a disposal
transaction. The provisions of SFAS No. 144 are effective for financial
statements issued for fiscal years beginning after December 15, 2001. We have
not yet completed our analysis of this new pronouncement and the impact it will
have on the consolidated financial statements.

In November 2001, the Emerging Issues Task Force (EITF) issued Topic No.
D-103, Income Statement Characterization of Reimbursements Received for
"Out-of-Pocket" Expenses Incurred. EITF No. D-103 requires that companies
report reimbursements received for out-of-pocket expenses incurred as revenue,
rather than as a reduction of expenses. The provisions of EITF No. D-103 are
effective for financial statements issued for fiscal years beginning after
December 15, 2001. As we have historically accounted for reimbursements of
out-of-pocket expenses in the manner provided for under EITF No. D-103, we do
not expect the adoption of the provisions of EITF No. D-103 to have an impact
on our consolidated financial position or results of operations.

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BUSINESS

Overview

ManTech International Corporation delivers a broad array of information
technology and technical services solutions to U.S. federal government
customers, focusing primarily on critical national defense programs for the
intelligence community and Department of Defense. We design, develop, procure,
implement, operate, test and maintain mission-critical, enterprise information
technology and communication systems and intelligence processing
infrastructures for our federal government customers. More than 1,700 of our
nearly 3,500 employees hold government security clearances, including over 600
with access to Top Secret Sensitive Compartmented Information allowing us to
work with our customers in highly classified environments and at front-line
deployments in the United States and 28 countries globally.

We were founded in 1968 and have exhibited strong growth and profitability
since 1980 largely as a result of successful long-standing relationships with
our customers, having supported many of them for 15 to 30 years. For both the
year ended December 31, 2000 and the nine months ended September 30, 2001,
approximately 84.0% of our revenues were derived from our customers in the
intelligence community and Department of Defense. These customers include the
Office of the Secretary of Defense; the Department of State; various
intelligence agencies; the U.S. Army, Navy, Air Force and Marine Corps; and
joint military commands. We also provide solutions to federal government
civilian agencies, including NASA, EPA and the Departments of Justice, Commerce
and Energy, as well as to state and local governments and commercial customers.

Industry Background

The federal government is the largest purchaser of information technology
solutions. Federal government spending on information technology has
consistently increased in each year since 1980. Input, an independent market
research firm, expects this trend to continue, with federal government spending
on information technology expected to increase from $36.4 billion in 2001 to an
estimated $60.3 billion in 2006, a compound annual growth rate of 10.6%.
Moreover, this data may not fully reflect government spending on complementary
technical services, which include sophisticated systems engineering and testing
services. We believe that government spending will continue to increase due to
several trends:

Increasing U.S. Department of Defense budgets. The Department of Defense
is the largest purchaser of information technology in the federal government.
JSA Research Inc., an independent market research firm, has stated that the
federal government is projected to increase spending on defense-related
programs from $291.0 billion in 2001 (excluding $20.0 billion authorized for
fiscal year 2001 under the emergency supplemental spending bill signed by
President Bush following the September 11th attacks) to $400.0 billion in 2003,
a compound annual growth rate of 17.2%. For fiscal year 2002, the President has
signed a bill that authorizes $343.0 billion in defense spending, of
which $317.0 billion has been formally appropriated. This same appropriations
bill also includes supplemental funding of $3.5 billion to the Department of
Defense. Within this expanding market, there are several notable trends
affecting information technology and technical services providers:

. Command, Control, Communication, Computers and Intelligence
(C4I). According to Frost & Sullivan, a market research firm, the
federal government spends approximately $11.3 billion annually on
advanced systems and communications for C4I-related activities. We
believe that spending on advanced command and control architectures will
increase as the Department of Defense seeks to use information technology
to increase combat power, improve battle management and enhance
communications and systems interoperability.

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. Homeland Defense Programs. The Pentagon has stated that the military's
most urgent priority is to defend the United States from external attack,
including cyber-assaults and bioterrorism. To accomplish this mission, we
believe the federal government will rely heavily on cooperative and
coordinated information systems, technologies and technical services.
According to the Government Electronics and Information Technology
Association, federal spending on information assurance initiatives is
expected to increase from $2.7 billion in 2000 to $6.7 billion in 2005, a
compound annual growth rate of approximately 19.9%. In addition, on
September 18, 2001, the President signed into law an emergency spending
bill that provides $40.0 billion for Homeland Defense initiatives, $20.0
billion of which will be obligated for spending in fiscal year 2001 and
$20.0 billion for fiscal year 2002. According to the Office of Management
and Budget, of the $19.7 billion already obligated for spending under
fiscal year 2001 programs, approximately $5.6 billion has been obligated
to the Department of Defense for the war on terrorism and related
initiatives. The 2002 defense appropriations bill, for which Congress has
already authorized funding, provides an additional $20 billion for
homeland defense initiatives, including $3.5 billion for the Department
of Defense and $8.3 billion for non-Department of Defense homeland
defense.

. Intelligence Spending. The U.S. intelligence community is comprised of
13 federal agencies and organizations responsible for the collection,
analysis and dissemination of strategic and tactical intelligence
information. The 13 agencies comprising the U.S. intelligence community
are:

[Download Table]

[_] Central Intelligence Agency [_] Department of State
[_] Defense Intelligence Agency [_] Department of Energy
[_] National Security Agency [_] Department of the Treasury
[_] Army Intelligence [_] Federal Bureau of Investigation
[_] Navy Intelligence [_] National Reconnaisance Office
[_] Air Force Intelligence [_] National Imagery and Mapping Agency
[_] Marine Corps Intelligence

The budget for the intelligence community is coordinated under the
Director of Central Intelligence and the Secretary of Defense. The
intelligence community budget has traditionally been classified for
national security reasons, but figures released to the public for the
fiscal years 1997 and 1998 indicated annual budgets in excess of $26.0
billion. While budget numbers for subsequent years have not been
released, according to the U.S. House of Representatives Appropriations
Committee, the fiscal year 2002 spending bill "adds significant funds in
support of classified programs and also provides funding to accelerate
and enhance U.S. military intelligence, surveillance, and reconnaissance
(ISR) capabilities." In addition, the emergency supplemental spending
bill signed into law by the President on September 18, 2001 allows for
spending on intelligence-related activities, although specific spending
amounts have not been released to the public.

Increasing adoption of commercialized procurement methods in the federal
government. Recent changes in procurement legislation have incorporated
commercial buying techniques into the government's source selection process.
These changes have resulted in reduced supplier selection time and have
facilitated "best value" contracting, which considers qualitative selection
criteria, such as past performance and technical approach. Other changes allow
government technology service providers to attain pre-approved status and gain
the opportunity to market their services to federal government customers
through contracts with established pricing metrics, such as GSA schedule
contracts. These contracts enable government agencies to transition from
cost-plus contracts to time-and-materials and

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fixed-price contracts, which promotes increased efficiencies for federal
government customers by incentivizing technology service providers to reduce
costs.

Increasing reliance on technology service providers. The independent
market research firm Input estimates that the federal government information
technology outsourcing budget will grow from approximately $6.3 billion in 2001
to approximately $13.2 billion in 2006, a compound annual growth rate of
approximately 15.9%, due to the government's need for cost-effective
technologies and efficient services. The trend towards use of technology
service providers is expected to accelerate in light of staffing challenges
facing the government. The National Academy of Public Administrators estimates
that approximately 50.0% of the federal government information technology
workforce will be eligible to retire by 2006 and that there will be a shortage
of technically skilled replacements. Given the difficulty the federal
government has experienced in hiring and retaining skilled technology personnel
in recent years, we believe the federal government will need to rely heavily on
technology service providers that have experience with government legacy
systems, can sustain mission-critical operations and have the required
government security clearances to deploy qualified personnel in classified
environments.

Increasing focus on modernizing information technology and communication
infrastructures. Traditionally, the federal government has relied on
proprietary legacy systems that were developed with programming and computer
standards unique to the government. These legacy systems often are expensive to
maintain, lack scalability and are incompatible with current technologies.
Nevertheless, the government has a significant amount of money and resources
invested in these legacy systems, many of which serve mission-critical
functions where even a minor failure can lead to substantial losses, including
potential loss of life. The government therefore requires technology service
providers with domain expertise who can successfully integrate and transition
proprietary legacy systems to modern technologies.

Requirements for Government Technology Service Providers

We believe that government technology service providers face significant
challenges when providing services to the intelligence community and Department
of Defense. We believe they must:

. Provide and support comprehensive technology-based solutions;

. Demonstrate expertise in sustaining proprietary government legacy systems
to maintain mission-critical functionality, while integrating or
replacing them with modern systems and applications;

. Comply with strict personnel and facility security clearance requirements
for classified programs;

. Demonstrate domain expertise, a record of past performance and the
ability to successfully manage large and complex programs; and

. Have a strong management team with practical experience in managing
programs for the intelligence community and Department of Defense.

ManTech's Competitive Advantages

We believe we are well positioned to address the requirements of our
customers in the intelligence community and Department of Defense because we
possess the following key competitive advantages:

Comprehensive technology solutions provider. We offer comprehensive
systems life-cycle support, through which we design, develop, procure,
implement, operate, test and maintain

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sophisticated communication and information technology systems and
infrastructures. Our ability to provide this broad array of capabilities
affords us opportunities to expand our business with existing customers and to
develop relationships with new customers. By offering domain expertise in
customers' systems and infrastructures, we are able to identify, develop,
implement and deploy solutions to support our customers' mission-critical and
enterprise systems.

Extensive experience with government legacy systems. Our expertise with
legacy systems migration, integration, optimization and maintenance enables us
to sustain, modernize, maximize and protect our government customers'
investments in systems and infrastructures. For over 30 years, we have worked
with a variety of legacy information technology systems and programming
languages that are proprietary to our customers in the intelligence community
and Department of Defense, and we have gained extensive domain expertise
through our on-site presence at government facilities. With this background, we
can transition a customer's legacy systems to, or integrate them with, new
commercial technologies and web-enabled customized applications, enhancing the
interoperability and accessibility of critical enterprise data.

Employees with security clearances. We are able to satisfy the strict
security clearance requirements for personnel who work on classified programs
for the intelligence community and Department of Defense. More than 1,700 of
our approximately 3,500 employees have government security clearances.
Approximately 1,100 of these employees hold Top Secret security clearances,
including more than 600 employees who have access to Sensitive Compartmented
Information. These employees have already completed the lengthy process
necessary to obtain a security clearance, which requires a candidate to be
sponsored by the government for a particular purpose, entails extensive
background investigations that typically take between six months to a year and,
for restricted access clearance, may require successful completion of polygraph
testing. We also maintain facility clearances as required to support classified
programs.

Proven track record of providing services to the federal government. We
have a successful track record of fulfilling our customer needs as demonstrated
by our long-term relationships with many of our largest customers. We have
supported technical services programs for the Navy for over 30 years,
intelligence activities for the Army for over 20 years and security programs
for the Department of State for over 15 years. For example, since 1981 we have
provided services under five successive competitively awarded contracts in
support of the Naval Aviation Logistics Command Management Information System.

Experienced management team. Our executives and advisory board members
provide us extensive experience supporting the intelligence community and
Department of Defense. Many of our executives and advisory board members have
long tenures in the government marketplace, and several are former senior
military officers or intelligence agency executives. With their knowledge,
valued relationships and reputations, our management plays a key role in
building and sustaining our customer base.

ManTech's Growth Strategy

Our objective is to profitably grow our business as a premier provider of
comprehensive information technology and technical services solutions to the
federal government market. Our strategies for achieving this objective include:

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Expand Our Customer Base. We intend to capitalize on our long-term
relationships with our customers and our reputation within the intelligence
community and Department of Defense to attract new customers and to cross-sell
our broad array of solutions to our existing customers. Under the "best value"
contracting process that has resulted from reforms in the government process,
past performance and technical approach are key factors which the government
may consider when evaluating competitive bids. Based on our long-term support
to numerous customers, we believe we have a successful past performance track
record and demonstrated technical expertise that gives us credibility
recognition with these customers and enhances our ability to be successful in
bidding on follow-on contracts and in competition for new programs of both
existing and new customers. We also intend to pursue these opportunities by
hiring key personnel with targeted domain expertise and by pursuing strategic
acquisitions. Because our personnel are on-site with, or working in close
proximity to, our customers, we develop close relationships with them and are
often able to enhance our customers' operations by rapidly identifying and
developing solutions for customer-specific requirements.

Increase Contract Profitability. We intend to continue increasing our
profitability by pursuing contracts that require higher value-added solutions
and by transitioning our services to more efficient and flexible contract
vehicles, such as competitively awarded GSA schedule contracts. We leverage our
customer relationships and our existing core competencies to identify and
compete for service offerings where we can obtain improved margins by
delivering higher value-added solutions. In addition, we have actively pursued
flexible contract vehicles, such as competitively awarded GSA schedule
contracts, as a quick, efficient way to engage our services. GSA schedule
contracts are competitively awarded acquisition contracts which government
agencies may use to purchase our solutions at predetermined ceiling prices,
terms and conditions. In marketing to our customers, we are able to highlight
the advantages that these contract vehicle alternatives offer our customers. In
addition to providing our customers with pre-negotiated competitively priced
arrangements, these advantages include the broad range of services that can be
obtained under them, the quick response flexibility they offer to meet short
time constraints and the capability to accommodate overall program technical,
schedule and cost requirements at fair market prices. Customers which select
these contract vehicles find that they can obtain the benefit of competitively
priced services without the cost and delay of the government's traditional
formal proposal and bid process. These contract vehicles also incentivize us to
provide our services on a more cost-efficient basis. If we achieve cost
efficiencies through effective management of these contracts, we can increase
our profitability. Under GSA schedule contracts, we can also proactively market
our advanced technology solutions to our federal government customers.

Target High Growth Segments of the Market. We believe the projected growth
in government information technology and technical services spending will offer
opportunities for development and delivery of advanced technology solutions for
enterprise applications and information systems. We intend to expand our
service offerings in high growth program areas. In particular, we intend to
focus on providing new or improved solutions in critical infrastructure
protection and information assurance, including cybersecurity and homeland
defense programs, and other secure systems and infrastructure solutions to the
intelligence community, Department of Defense and other civilian agencies. For
example, our staffing levels in support of the Department of State's critical
infrastructure and information assurance functions increased from approximately
100 to 450 personnel since 1998.

Attract and Retain Highly Skilled Personnel. We intend to continue to
attract and retain skilled professionals, including engineers, scientists,
analysts, technicians and support specialists, to ensure we have the
capabilities to fulfill our customers' requirements. We target candidates who
have served in

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the military or as civilian experts in the intelligence community and
Department of Defense. We believe we can continue to retain our employees by
offering competitive compensation and incentive plans, opportunities for career
growth through company-supported education programs and diverse, challenging
assignments at over 160 locations worldwide.

Pursue Strategic Acquisitions. We plan to enhance our internal growth by
selectively pursuing strategic acquisitions of businesses that can
cost-effectively broaden our domain expertise and service offerings and allow
us to establish relationships with new customers. We are primarily focused on
acquiring businesses that provide value-added solutions for the intelligence
community and Department of Defense but will also consider opportunities to
acquire other businesses where we can leverage our reputation and experienced
management team.

ManTech's Services

We deliver comprehensive information technology and technical services
solutions for mission-critical, enterprise information technology and
communication systems through three principal areas of expertise, which are
offered separately or in combination across our customer base:

Secure Systems and Infrastructure Solutions

We provide a broad range of solutions to enhance systems and network
availability and mission-critical performance of our customers' hardware,
software, computer, network and telecommunication assets, including:

Intelligence Operations. We provide services for strategic and tactical
intelligence systems, networks and facilities in support of the intelligence
community and Department of Defense. To support classified systems and
facilities designed to collect, analyze, process and report on signals
intelligence, we develop and integrate advanced, signal processing systems and
new signal processing techniques. Our intelligence-related services also
include the design, rapid development and prototyping, integration and
management of real-time signal processing systems. For example, when an
adversary implements a new communication technique or protocol, we provide
rapid prototyping and re-engineering services, which enable our customers in
the intelligence community to decipher and exploit the communications.

Communication systems and infrastructure support. We design, develop,
modify and maintain secure communication systems and network infrastructures.
This process involves evaluating industry standards, systems architectures and
applications in order to recommend and develop technology solutions and
integrate them into a customer's secure communication systems. We also procure,
install and test new voice, data and video communication systems. For example,
we provided a comprehensive communication network infrastructure and systems
solution in relocating, re-establishing and upgrading a major military command
headquarters from Panama to Miami, Florida. We integrated the customer's
classified and unclassified information processing and telecommunication
network without disruption to the command mission.

Safeguarding critical infrastructures. We identify potential foreign and
domestic threats, including terrorism, to quantify exposure to the threats and
recommend prudent countermeasures. Our capabilities include threat definition
and modeling, vulnerability identification, adversary characterization, lethal
force defense analysis, security life-cycle planning and management, physical
and cyber countermeasure optimization techniques and operations security
assessments. For example,

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to assist the Department of State in addressing the requirements of
Presidential Decision Directive 63, which requires all government agencies to
identify and safeguard critical infrastructures from all forms of threats, we
provide on-going support in the department-wide vulnerability assessments of
their critical infrastructure and resources and perform worldwide network
management and other integrated security services.

Information assurance. We provide comprehensive information assurance
programs that assess and implement integrated physical, technical, operations,
personnel, computer and communication security requirements, including disaster
recovery assessment. Our services include systems security architecture
development, test and evaluation, certification and accreditation support and
compliance audits and inspections. We offer information assurance support for
both classified and unclassified systems. For example, for the Department of
State, we design and implement networks and host-based intrusion detection
programs that are compatible with their evolving virtual private network
architecture.

Information Technology Solutions

We provide a broad range of information technology solutions to our
customers, including:

Systems integration services. We perform comprehensive systems integration
of hardware and software components using commercial products and our
customers' proprietary software and legacy applications for our government and
commercial customers. We analyze customer information systems, applications and
platforms and develop solutions to sustain or extend systems performance and
availability. For example, as a subcontractor on the Navy-Marine Corps Intranet
program, we are transitioning legacy software applications to a standardized,
end-to-end systems infrastructure for voice, video and data. This includes
support of over 10,000 critical legacy business applications serving 350,000
Navy personnel, which must be migrated to the new program architecture. We also
develop and provide specialized training programs for information systems,
including interactive electronic training and technical manuals and
enterprise-wide distance learning programs. We are working with the Internal
Revenue Service's General Business Institute to design, develop and implement a
web-based training management and delivery solution that provides access to
more than 100 training courses via their intranet or the Internet.

In addition, we perform database conversion and application migration
services for our customers. For example, we developed a software tool that
enhances our database conversion and application migration services. This
solution automates the database conversion process to enable better, faster and
less expensive conversions and migrations.

Enterprise application solutions. We design, develop, implement, test,
maintain and web-enable software applications for our customers' information
systems and network infrastructures. We provide comprehensive e-commerce
services, including web development efforts that focus on designing and
maintaining scalable, interoperable, reliable and portable end-to-end
information management solutions. Our e-commerce services also include global
web-based collaboration, electronic cataloging, automated document imaging and
business process re-engineering. For example, as part of our business process
re-engineering services, we are working with the Office of the Secretary of
Defense to develop industry-wide electronic data interchange standards.

We design, develop and implement electronic data interchange solutions,
which enable different entities to communicate and execute orders and
transactions electronically. For example, we developed

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an electronic data interchange solution for the Defense Commissary Agency,
which operates over 370 commissaries worldwide. We also currently provide a
web-based integrated solution for managing millions of vital records that
document birth, death, marriage and divorce for several state and local
governments.

Our information technology solutions allow end-users insight into and
control over supply chain management. We have developed and implemented
logistics management information systems for the Navy for more than 20 years,
including the sophisticated Naval Aviation Logistics Command Management
Information System application, which is used on every ship in the Navy and at
over 450 shore facilities. We have also expanded our services for the Navy in
this area so that we now develop, maintain and provide continuous systems
process improvements for 19 other information systems as part of the Navy
Tactical Command Support System, which automates numerous logistics functions.
Applications we designed for the Navy have been adopted for use by other
agencies, including the Marine Corps, the White House Communications Agency and
three NASA centers.

Systems/network maintenance services. We have extensive experience in
maintaining a wide range of information management resources for our customers.
We perform comprehensive systems administration, including 24x7 support for
continuous mission operations. For example, for the Army, we provide systems
administration and help desk functions at a domestic location for a command and
management system, as well as help desk functions in an overseas remote
location that supports 1,500 users. For this customer, we also provide on-site
support for the command and management system workstations and networks located
throughout countries in Central and South America.

Systems Engineering Solutions

We offer our customers a broad range of systems engineering solutions,
including:

Systems engineering services. We perform comprehensive systems engineering
services to analyze and develop solutions for customer hardware and software
requirements. We also evaluate existing systems designs to determine if
performance enhancements or cost savings can be derived through the integration
of current technologies. For more than 15 years, we have provided a broad range
of systems engineering services to analyze acoustic data requirements and
develop instrumentation to assist the Navy in maintaining or increasing the
acoustical advantages of U.S. submarines. As part of these services, we have
developed a wide range of hull-mounted and towed array sonar systems and
acoustic measurement systems. We also provide systems engineering and technical
services that support the design and installation of communication,
intelligence, electronic warfare and information systems aboard Navy and Coast
Guard ships and at shore-based facilities.

Testing and evaluation. For the past three decades, we have tested complex
and mission-critical hardware and software systems used by the Army, Navy and
NASA. We have played key roles in improving the performance, reliability,
maintainability, supportability and weapons effectiveness of in-service rotary
and fixed wing platforms, including the F/A-18E/F Super Hornet, and their
associated ordnance. We are participating in development of plans for testing
and evaluating the Joint Strike Fighter. We also perform submarine and surface
ship acoustical trials to evaluate stealth abilities and to maintain the
acoustical credibility of U.S. submarines. We have performed acoustic testing
for every operational class of Navy combat vessel, both surface and submarine,
in use today.

Through our work at NASA's Goddard Space Flight Center, our space payload
test and integration services have supported every in-house earth orbit program
since 1971. We conduct a broad

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range of tests, including structural, acoustics, vibration, space simulation
and electromagnetic tests, to certify that all flight hardware can withstand
the extreme conditions of space flight. We have won recognition within both
Goddard and the NASA community for our test, integration, transportation and
launch site support of the Hubble Space Telescope repair and servicing
missions. For example, we received the Goddard Contractor Excellence Award for
2000.

We also design, manufacture and produce automated test technology for
military and commercial customers. For example, we are the prime contractor for
the U.S. Marine Corps Third Echelon Test System, a mobile testing platform that
is designed to provide electronic repair support on the front lines of the
battlefield.

Our services also include our environmental science, toxicology and ecology
research and development services for the EPA, including assessing the human
health impacts of a wide variety of air and waterborne contaminants, monitoring
and predicting exposures, understanding exposure routes in the event of a
release of chemicals or biological agents and modeling migration strategies to
predict the movement of airborne and waterborne contaminants. In response to
the September 11, 2001 terrorist attacks, we were asked by the EPA's National
Exposure Research Laboratory to assemble and calibrate equipment for monitoring
pollutants released around the collapsed World Trade Center complex. In less
than 48 hours, we defined monitoring needs and configured equipment in a mobile
laboratory that was delivered to the World Trade Center site to collect and
evaluate samples of contaminants.

Independent validation and verification. We perform tests to certify that
new systems or upgraded systems operate in accordance with their design
requirements. For example, we have performed certification services for
aircraft weapon systems in support of U.S. Naval Air Systems Command programs.

ManTech's Customers

Our customers include U.S. federal government intelligence, military and
civilian agencies and other state and local governments and commercial
customers. We have successful long-standing relationships with our customers,
having supported many of them for 15 to 30 years. Representative customers
include:

. Intelligence and Department of Defense Customers
[_] Office of the Secretary of Defense
[_] U.S. Army, Navy, Air Force and Marine Corps
[_] Multiple Intelligence and Classified Agencies
[_] Department of State
[_] Defense Information Systems Agency
[_] Defense Logistics Agency
[_] Defense Commissary Agency
[_] Joint Interoperability Test Command

. Civilian Agencies or Departments
[_] Department of Energy
[_] Department of Justice
[_] National Aeronautics and Space Administration
[_] Environmental Protection Agency
[_] Internal Revenue Service
[_] National Institutes of Health, including the National Cancer
Institute

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Our revenues derived from our federal government customers, consisting
primarily of customers in the intelligence community and Department of Defense,
accounted for approximately 95.8% of our revenues for the nine months ended
September 30, 2001, and approximately 96.1%, 96.0% and 97.1% of our revenues
for 2000, 1999 and 1998, respectively. Our federal government customers
typically exercise independent contracting authority, and even offices or
divisions within an agency or department may directly, or through a prime
contractor, use our services as a separate customer so long as that customer
has independent decision-making and contracting authority within its
organization. For example, under a blanket purchasing agreement with one of the
Army's contracting agencies, program managers throughout the Army and from
other services and defense agencies are able to purchase a wide range of our
solutions. Even though task orders under this agreement together accounted for
12.5% of our revenues for the nine months ended September 30, 2001, no one task
order represented more than 4.7% of our revenues during that period.

For 2000 and the nine months ended September 30, 2001, we derived 7.8% and
8.4%, respectively, of our revenues through relationships with prime
contractors, who contract directly with the customer and subcontract to us. For
2000, we derived 98.7% and 1.3% of our revenues from services provided in the
United States and abroad, respectively. For the nine months ended September 30,
2001, we derived 98.4% and 1.6% of our revenues from services provided in the
United States and abroad, respectively.

Representative Customer Solutions

We have selected the following case studies to illustrate the breadth of
comprehensive information technology and technical services solutions that we
provide and the range of customers that benefit from our solutions. While we
believe they are helpful in that regard, our selection of these case studies
should not be viewed as depicting our largest or most profitable contracts, the
full range of work that we have undertaken in the past or the type of contracts
we will pursue in the future.

Intelligence-Related Support

Task Objective: Establish and operate strategic and tactical intelligence
systems, networks and facilities in classified
environments to support our customers' worldwide
intelligence-related operations.

Solution: For over 20 years, we have supported a broad range of
strategic programs for classified agency customers to
enhance signals intelligence systems and infrastructure
availability and mission-critical functionality. We
design, develop, monitor, maintain and upgrade designated
site hardware, software, network and telecommunication
assets to support continuous operations. We have
consistently achieved required systems availability levels
while accommodating a broad range of new technology
integration initiatives for our customers' legacy systems.

For U.S. Army intelligence customers, we currently operate
four centers in the United States, one in Germany and one
in South Korea to support intelligence, electronic warfare
and other systems. These centers must be able to adapt and
expand to support a wide range of electronic maintenance
or logistics support missions. We perform broad
maintenance, logistical and

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administrative services, including systems and network
troubleshooting, maintenance and repair, and installation,
integration and testing of electronic, electrical and
mechanical equipment designed for vehicular, airborne and
portable platforms. We also provide dedicated or on-call
support on a 24x7 basis for designated systems during
exercise and active deployments.

U.S. Department of State Critical Infrastructure Protection Services

Task Objective: Establish program to support the Department of State's
electronic and physical security systems, network
intrusion detection systems, and classified communications
programs at worldwide embassies and posts.

Solution: We are the primary technology service provider responsible
for upgrading all electronic physical security
infrastructure at more than 250 U.S. embassies and posts
worldwide. This infrastructure includes perimeter
surveillance, closed-circuit television, intrusion
detection, access control and fire suppression systems. We
continuously evaluate emerging security technologies for
suitability and possible integration into Department of
State facilities.

We also assess and test commercial off-the-shelf cyber
intrusion detection products to meet the requirements of
each location. We test each product in our secure
laboratory prior to deployment. We recently designed and
implemented a network and PC-based intrusion detection
program compatible with the evolving virtual private
network architecture serving the Department of State and
the foreign affairs community. We also provide incident
handling support and develop procedures for coordinating
espionage investigations.

For one of the Secretary of State's highest information
technology priorities, we support the development of a
secure global network and infrastructure for 190 foreign
service post installations worldwide. We build, test and
integrate equipment into approved solution configurations,
which are shipped overseas and installed in the posts.
Based on the customer's connectivity requirements, the
solutions we provide range from simple secure dial-up to a
more complex secure NT local area network providing
classified message and e-mail delivery. To date, we have
successfully installed classified Windows NT-based local
area network solutions at 52 posts.

We have recently been tasked to provide Internet access
worldwide at each department desktop within a secure
infrastructure. We are developing a segmented architecture
that identifies how security functionality can be
implemented on local and wide area networks and host
resources.

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U.S. Southern Command Headquarters Services

Task Objective: Establish and maintain C4I information management
processing capabilities for the headquarters of the U.S.
Southern Command in Miami, Florida.

Solution: We were the C4I systems integration contractor for the
relocation of the headquarters of the U.S. Southern
Command from Panama to Miami, Florida. We designed and
delivered a comprehensive integrated communications
solution for the new facility that enhanced the overall
information management capabilities of the command. We
designed secure and non-secure local area networks for the
new facility and migrated all military information
processing and communication networks and commercial
telecommunication services into a state-of-the-art,
commercial off-the-shelf enterprise solution. We completed
this $35 million program within 18 months, on-time, within
budget and without any interruption of mission operations.

Since the relocation, we have provided comprehensive
services in support of the U.S. Southern Command facility
to maintain and administer all automated information
systems and networks. Our personnel perform:

. Hardware and software maintenance services for all
headquarters systems, including web and software
development;

. Multimedia services and video teleconferencing
operations;

. Systems administration, help desk services and network
systems management on classified and unclassified
networks; and

. Technology upgrade integration to meet continuously
changing user requirements.

Defense Commissary Agency Corporate Information Utility Systems

Task Objective: Establish capability to support the Defense Commissary
Agency business enterprise systems infrastructure, which
consists of over 370 commissaries worldwide that service
millions of customers each year.

Solution: Since 1995, we have worked with the agency to conduct
detailed analyses of current and future agency business
requirements and to recommend integration of new
commercially available software and hardware products for
large-scale upgrades to the agency's legacy systems.
Recently, we developed the agency's first executive
decision support system that automates many of the
accounting functions performed at the individual
commissaries and provides a tool for region and zone
managers to effectively monitor their assigned stores.

We also developed and implemented a web-based electronic
data interchange interface that facilitates wholesale
point-of-sale capability and allows small grocery vendors
to submit product prices directly to the agency. It also
provides real-time tracking of all consumer product prices

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and an on-line payment system. We deployed the solution to
all of the agency's regional headquarters and stores in
the United States. We believe our solutions played a key
role in the agency winning the award for the Best
Electronic Commerce Team in the Department of Defense in
1999.

Navy Tactical Command Support System

Task Objective: Develop an integrated suite of applications to support
mission-critical functions for a widely dispersed user
population in the Naval aviation community.

Solution: Since 1981, we have been the prime contractor for
development, implementation and systems life-cycle support
of major applications that comprise the Navy Tactical
Command Support System. This sophisticated logistics
management information system now consists of 19
applications ranging from stand-alone desktops to
web-enabled applications that facilitate management of the
information, personnel, material and funds required to
maintain and operate surface ships, submarines, aircraft
and shore commands. At least one of the 19 systems
applications is used aboard every ship in the Navy, in
every Navy and Marine Corps aviation organizational
maintenance activity and intermediate maintenance
activity, by Marine Corps ground combat forces, and by
more than 450 shore-based organizations worldwide.

Our recent improvements to legacy applications include the
integration of new technologies such as automated
identification technology for component tracking, two-way
data replication to facilitate information exchange among
commands and development of interfaces with new tools such
as smart cards and portable handheld electronic devices.
After re-engineering and modernizing legacy systems, we
are managing orderly, phased user migrations from legacy
systems to the new optimized systems.

Joint Interoperability Test Command Support Services

Task Objective: Support the Joint Interoperability Test Command in
conducting interoperability and certification testing of
new or upgraded C4I systems and information exchange
standards in the command's verification and
interoperability facility.

Solution: For the past 18 years, we have supported a wide range of
interoperability, certification and standards conformance
testing on tactical and strategic assets in support of all
military systems and operations. Our services include
comprehensive systems integration support during test and
certification processes. We develop test plans and
procedures, conduct tests and document test results on the
interoperability of all C4I systems. We have developed and
implemented networks; performed software development; and
provided facility support, including help desk support for
the command's 600-user local area network.

We designed, installed, and operate a $65 million Joint
Interoperability Testbed and the Network Interoperability
Testing Laboratory, consisting of

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tactical equipment from the various military services
interconnected through a distributed test network. This
virtual test network is quickly reconfigurable to
replicate operational networks and permits the
interconnection and testing of equipment and networks
anywhere in the world. We also support the Joint Logistics
Warfighter Initiative designed to improve military
readiness by improving the responsiveness of multiple
logistics systems of different military branches by
integrating current technologies and business process
improvements. We deploy with the command during military
exercises and contingency operations and have supported 53
operations globally since 1991.

Backlog and GSA Schedule Contract Value

At September 30, 2001, our backlog was $765.0 million, of which $228.6
million was funded backlog. At September 30, 2000, our backlog was $871.9
million, of which $282.5 was funded backlog. In addition, we estimate our GSA
schedule contract value at September 30, 2001 was $1,051.8 million. At
September 30, 2000, we estimate our GSA schedule contract value was $311.8
million. Backlog, funded backlog and GSA schedule contract value represent
estimates that we calculate on the bases described below. We expect that more
than 93.5% of our funded backlog at September 30, 2001 will be recognized as
revenues prior to September 30, 2002.

We define backlog as our estimate of the remaining future revenues from
existing signed contracts, assuming the exercise of all options relating to
such contracts and including executed task orders issued under GSA schedule
contracts. This includes an estimate of revenues for solutions that we believe
we will be asked to provide in the future under the terms of executed
multiple-award contracts in which we are not the sole provider, meaning that
the customer could turn to companies other than us to fulfill the contract. It
also includes an estimate of revenues from indefinite delivery, indefinite
quantity contracts, which specify a maximum, but only a token minimum, amount
of goods or services that may be provided under the contract. Backlog does not
include the value for contracts where we have been given permission by the
customer to begin or continue working, but where a formal contract or contract
extension has not yet been signed.

We define funded backlog to be the portion of backlog for which funding
currently is appropriated and allocated to the contract by the purchasing
agency or otherwise authorized for payment by the customer upon completion of a
specified portion of work. Our funded backlog does not include the full value
of our contracts, because Congress often appropriates funds for a particular
program or contract on a yearly or quarterly basis, even though the contract
may call for performance that is expected to take a number of years.

At September 30, 2001, our backlog included $293.2 million of revenues for
solutions pursuant to task orders that have been executed under GSA schedule
contracts, of which $119.0 million was included in funded backlog. The amount
of our revenues generated under GSA schedule contracts has increased in recent
years. Specifically, for the years ended December 31, 1998, 1999, and 2000,
funded awards under GSA schedule contracts were $35.1 million, $102.5 million
and $135.2 million, respectively, and for the nine months ended September 30,
2001, funded awards under GSA schedule contracts were $136.1 million. We
believe that potential GSA schedule contract revenues are not fully reflected
in traditional backlog calculations because, as described below, while GSA
schedule contracts provide our customers with the flexibility to obtain our
solutions through a streamlined

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procurement process, they do not provide for fixed, minimum or maximum purchase
commitments. Therefore, we have developed a method of calculating GSA schedule
contract value that we use to evaluate estimates for the amount of revenues
that we may receive under our GSA schedule contracts. For these purposes, we
determine GSA schedule contract value by multiplying the average monthly amount
of funded work that we have been awarded under each of our GSA schedule
contracts over the past nine months, by the number of months remaining in the
term of those contracts, including under existing options, except that we do
not take into account remaining contract terms of more than 72 months. Under
this method, our GSA schedule contract value as of September 30, 2001 was
approximately $1,051.8 million. Beginning in January 2002, we intend to
calculate GSA schedule contract value by multiplying the average monthly amount
of funded work that we have been awarded under each of our GSA schedule
contracts over the preceding twelve months by the number of months remaining in
the term of those contracts, including under existing options, except that we
do not take into account remaining contract terms of more than 72 months.

GSA schedule contracts are competitively awarded government-wide
acquisition contracts negotiated and awarded by the General Services
Administration and effectively act as fixed-price or time-and-materials
contracts which government agencies may, but are not required to, use to
purchase professional services and information technology products at
predetermined ceiling prices, terms and conditions. Many of our customers are
authorized to use GSA schedule contracts through blanket purchase agreements,
which operate similarly to GSA schedule contracts by permitting one or more
federal agencies to purchase professional services or products from technology
service providers at predetermined prices, terms and conditions. GSA schedule
contracts are master agreements that do not, by themselves, authorize the
delivery of services or products. Therefore, even though we have been awarded a
GSA schedule contract or blanket purchase agreement, we often must actively
solicit post-award sales, and it remains difficult for us to estimate the
amount of work, if any, we will obtain under the contract.

GSA schedule contracts benefit our federal government customers in a number
of ways. First, they provide customers a streamlined means to competitively
obtain professional services and technology products, allowing for a more
efficient and timely procurement process. Second, because we must actively
promote our services and technology to obtain work under these types of
agreements, the customer benefits from continued competition. Third, as with
fixed-price or time-and-materials contracts, GSA schedule contracts shift the
risks of cost overruns to the technology service provider and promote effective
contract management and cost-efficiencies by allowing the technology service
provider to receive the benefit of cost savings that it generates. Although we
must compete for or solicit individual task orders under GSA schedule
contracts, we have found that they can benefit companies such as ours which can
respond quickly to emerging customer requirements and can manage contract
performance efficiently. Finally, as with traditional fixed-price contracts,
GSA schedule contracts involve greater financial risk but we believe offer
opportunities for higher profitability because we bear the impact of cost
overruns and receive the benefit of cost savings.

Changes in the amount of our backlog, funded backlog and GSA schedule
contracts value result from potential future revenues from the execution of new
contracts or the extension of existing contracts, reductions from contracts
that end or are not renewed, reductions from the early termination of
contracts, and adjustments to estimates of previously included contracts.
Changes in the amount of our funded backlog and GSA schedule contract value
also are affected by the funding cycles of the government. These estimates of
future revenues are necessarily inexact and the receipt and timing of any of
these revenues is subject to various contingencies, many of which are beyond
our control. The

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actual accrual of revenues on programs included in backlog, funded backlog and
GSA schedule contract value may never occur or may change because a program
schedule could change or the program could be canceled, a contract could be
modified or canceled, an option that we have assumed would be exercised is not
exercised or initial estimates regarding the level of solutions that we may
provide could prove to be wrong. For the same reason, we believe that
period-to-period comparisons of backlog, funded backlog and GSA schedule
contract value are not necessarily indicative of future revenues that we may
receive.

Sales and Marketing

We market our solutions through the valuable relationships of our senior
management, advisory board and business development staff. We also seek to
leverage existing customer relationships and respond to competitive
solicitations.

We employ a team-selling approach, where our senior management, business
development staff and our program managers collaborate in identifying and
developing business opportunities. With this approach, we are able to assess
opportunities quickly, drawing on the experience and perspective of senior
personnel across the company, including those working in close proximity with
our customers. We have also established a formal process for making bid/no-bid
decisions and use automated resources to track the status of each bid
opportunity. We have effectively used GSA schedule contracts to respond quickly
to emerging customer requirements.

To supplement or complement our core competencies, we have teaming
relationships to work together on contracts with various industry partners,
such as Computer Sciences Corporation, Electronic Data Systems Corporation and
TRW Inc. While we are the prime contractor on substantially all of our
contracts, we serve as subcontractor when teaming in that manner furthers our
goals of expanding our customer base or pursuing high growth markets.
Similarly, in some cases, we establish joint ventures with other companies in
order to present the best value solution or proposal, particularly when we seek
to enter new markets.

Employees

As of October 31, 2001, we had 3,539 employees, including 1,758 employees
with government security clearances. Of these employees, 1,100 employees hold
Top Secret security clearances, including 613 employees who have access to
Sensitive Compartmented Information. Our employees with security clearances
have already completed the lengthy process necessary to obtain the clearance.
This process typically requires a candidate to be sponsored by the government
with respect to a particular requirement, entails extensive background
investigations that typically take from six months to a year and, for the most
restricted access, may require successful completion of polygraph testing.

Over 3,150 of our employees are technical and service professionals and
managers, and over 350 are in administrative or executive functions.
Approximately 185 of our employees, all of whom are located at NASA's Goddard
Space Flight Center, are represented by the International Brotherhood of
Electrical Workers union under a collective bargaining agreement which is due
to expire in June 1, 2005. We have not experienced any work stoppage or strike
by these employees.

We believe we are successful in retaining our employees by offering
competitive salary structures, attractive incentive compensation and benefits
programs, career growth opportunities,

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flexible work assignments and the opportunity to perform mission-critical
services, often in classified environments. Our current employees are offered
an opportunity to respond to new job opportunities before we pursue external
recruiting. We consider our relations with employees to be good.

Competition

We believe that the major competitive factors in our market are distinctive
technical competencies, security clearances, price of services, successful past
contract performance, reputation for quality and key management with domain
expertise. Our key competitors currently include divisions of large defense
contractors, such as BAE SYSTEMS, plc, Lockheed Martin Corporation, Northrop
Grumman Corporation, Raytheon Company and TRW Inc., as well as information
technology service companies, such as Affiliated Computer Systems, Inc., Booz
Allen & Hamilton, CACI International, Inc., Computer Sciences Corporation,
DynCorp, Electronic Data Systems Corporation, Science Applications
International Corporation, Titan Corporation and Veridian Corporation.

Intellectual Property

Our solutions are not generally dependent upon patent protection. We
routinely enter into confidentiality and non-disclosure agreements with our
employees to protect our trade secrets. Our rights in intellectual property
that we develop depend in part on the degree to which the intellectual property
is developed with our private funds, rather than with funds of the federal
government. Our federal government contracts routinely provide that we may
retain ownership rights in works of authorship and inventions developed during
the performance of those contracts. However, the rights granted to the federal
government are, from time to time, a source of negotiation, and typically
include the right of the federal government to use and share our intellectual
property with other government contractors, making it impossible for us to
prevent their non-exclusive use of our intellectual property. Our ability to
protect our rights in intellectual property developed or delivered under
government contracts also is dependent upon our compliance with applicable
federal procurement statutes and regulations. There can be no assurance that
the steps we take to protect our intellectual property will be adequate to
deter misappropriation or to prevent use by others of our intellectual
property.

Legal Proceedings

On July 29, 1999, Thomas Harris Corporation filed suit in state court in
Rockwall County, Texas, against our environmental remediation subsidiary (which
is among our businesses included in discontinued operations) and subcontractors
to that subsidiary, alleging that our subsidiary or its subcontractors caused
soil and groundwater contamination by improperly disposing of dry cleaning
solvents, and seeking an unspecified amount of actual, consequential and
punitive damages. We vigorously dispute and deny these allegations. Trial in
this case has been set for April 22, 2002. While the ultimate outcome of
litigation cannot be assured, if and to the extent that the damages alleged by
the plaintiffs are ultimately determined to be our responsibility, we believe
that we will be able to recover a portion of the amount from our professional
liability insurance, including fees for our attorneys, and that any amounts
that we bear will not have a material adverse effect on our business,
prospects, financial condition or operating results.

On June 1, 2001, CHBP, Ltd., a customer of our environmental remediation
subsidiary, filed suit against a number of parties alleging that they caused
soil and groundwater contamination while occupying a commercial business center
owned by CHBP, Ltd. On November 15, 2001, some of the defendants in this suit
filed a third-party complaint against our environmental remediation subsidiary,
alleging that services provided by our subsidiary to CHBP, Ltd. caused or
contributed to the alleged

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contamination of the property. We have denied the third-party plaintiffs'
allegations in our answer to the third-party complaint, and believe that we
have other defenses and claims, including indemnification claims and
professional liability insurance coverage, and do not believe this litigation
will have a material adverse effect on our business, prospects, financial
condition or operating results.

Like most large government defense contractors, our contract costs are
audited and reviewed on a continual basis by an in-house staff of auditors from
the Defense Contract Auditing Agency. In addition to these routine audits, we
are subject from time to time to audits and investigations by other agencies of
the federal government. These audits and investigations are conducted to
determine if our performance and administration of our government contracts is
compliant with contractual requirements and applicable federal statutes and
regulations. An audit or investigation may result in a finding that our
performance and administration is compliant or, alternatively, may result in
the government initiating proceedings against us or our employees, including
administrative proceedings seeking repayment of monies, suspension and/or
debarment from doing business with the federal government or a particular
agency, or civil or criminal proceedings seeking penalties and/or fines. Audits
and investigations conducted by the federal government frequently span several
years. Other than routine audits of our contract costs, we are not aware of any
other government audits or investigations except as set forth below.

On August 17, 2001, we were served with a grand jury subpoena issued by the
United States District Court for the Eastern District of Virginia. The U.S.
Attorney's Office for the Eastern District of Virginia has advised us that the
investigation relates to whether we improperly charged a portion of our
corporate merger and acquisition-related expenses and certain expenses of our
Australian-based software consulting subsidiary (which is one of our businesses
included in discontinued operations) in a manner that would have resulted in
those expenses being reimbursed by the U.S. government. Based on conversations
with the U.S. Attorney's Office, we believe that we may receive a second
subpoena or other request for information from the U.S. Attorney's Office
relating to this investigation. This investigation is in its preliminary stages
and accordingly it is too early to tell whether the consequences of the
investigation will have a material adverse effect on our business, prospects,
financial condition or operating results. We are fully cooperating with the
federal government's investigation of this matter.

We also are currently subject to an investigation by the Inspector General
of the Department of State regarding our allocation of costs to a contract with
the Department of State and an investigation by the Inspector General of the
EPA regarding the number of hours we charged in the performance of a contract
with the EPA. We do not believe that the outcome of either of these
investigations will have a material adverse effect on business, prospects,
financial condition or operating results. We are fully cooperating with the
federal government's investigation of both matters.

In addition to the foregoing, we are subject to certain other legal
proceedings, claims and disputes which arise in the ordinary course of our
business. Although we cannot predict the outcomes of these other legal
proceedings, based on the information now available to us, we do not believe
that the ultimate resolution of these matters, either individually or in the
aggregate, will have a material adverse effect on our business, prospects,
financial condition or operating results.

Facilities

Since 1992, we have leased our corporate headquarters office building in
Fairfax, Virginia. We are in the fourth year of a ten-year lease on this
facility. As of September 30, 2001, we leased 21 additional operating
facilities throughout the metropolitan Washington, D.C. area and 63 facilities
in other parts of the United States. We also have employees working at customer
sites throughout the United States and in other countries. We believe that our
facilities are adequate to support the normal course of business.

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MANAGEMENT AND KEY ADVISORS

Directors and Executive Officers

The following table sets forth information concerning our directors and
executive officers as of the date of this prospectus.

[Enlarge/Download Table]

Name Age Position
---- --- --------

George J. Pedersen...... 66 Chairman of the Board of Directors, Chief Executive Officer
and President
John A. Moore, Jr....... 49 Executive Vice President, Chief Financial Officer, Treasurer
and Director
R. Evans Hineman........ 67 Executive Vice President and Chief Science and Technology
Officer
Eugene C. Renzi......... 68 Executive Vice President
Jerry L. Unruh.......... 62 Senior Vice President
Bradley H. Feldmann..... 40 Senior Vice President
Michael D. Golden....... 61 Director
Stephen W. Porter....... 62 Director
Walter W. Vaughan....... 69 Director
Walter R. Fatzinger, Jr. 59 Director Nominee
Richard J. Kerr......... 66 Director Nominee

George J. Pedersen -- Co-founder, Chairman of the Board of Directors, Chief
Executive Officer and President. Mr. Pedersen, who co-founded ManTech in 1968,
has served as Chairman of the Board of Directors since 1979, adding the
positions of Chief Executive Officer and President in 1995. Mr. Pedersen has
been a Director of GSE Systems, Inc., an affiliated software design and
development company, since 1994 and an executive employee since 1999.
Mr. Pedersen has served on the board of directors of GP Strategies Corporation,
a workforce development company that provides training, management systems and
engineering services, since 2001. Mr. Pedersen is Chairman of the Board of
Directors for the Institute for Software Research, Inc., a not-for-profit
corporation that performs research and advanced development of software and
related technologies, including research for NASA. Mr. Pedersen also serves as
a Director Emeritus of the Professional Services Council, a national
association of technology services companies, and as a Director and Executive
Committee member of the National Defense Industrial Association, a trade
association for the defense industry.

John A. Moore, Jr. -- Executive Vice President, Chief Financial Officer,
Treasurer and Director. Mr. Moore joined us in 1982 and has served as Chief
Financial Officer since 1993 and Executive Vice President since 1997 and has
been a Director of our company since 1994. Mr. Moore oversees our financial
operations and our business development activities. Mr. Moore has been a
Director of GSE Systems, Inc., since 1997 and an executive employee since 1999.
Prior to joining us, Mr. Moore was a supervisory auditor for the Defense
Contract Audit Agency, which is responsible for performing contract audits for
the Department of Defense.

R. Evans Hineman -- Executive Vice President and Chief Science and
Technology Officer, ManTech International Corporation; President, National
Security Solutions Group. Mr. Hineman joined us in 2001. From 1999 to 2001, he
served as Vice President for Intelligence of Litton Industries Inc.'s
Information Systems Group. From 1989 to 1999, Mr. Hineman was an officer of
TASC, Inc., a provider of information management and systems engineering
solutions, serving as President from 1998 to 1999. From 1964 to 1989, Mr.
Hineman worked for the Central Intelligence Agency, serving as Deputy Director
for Science and Technology from 1982 to 1989. Prior to 1982, he held various
other senior positions with the Central Intelligence Agency, including Director
of Weapons Intelligence and Chairman of the Director of Central Intelligence's
Weapon and Space Systems

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Intelligence Committee. Mr. Hineman was one of 50 recipients of the Trailblazer
award on the 50th anniversary of the Central Intelligence Agency, and he was
awarded the Central Intelligence Agency's Distinguished Intelligence Medal and
the National Reconnaissance Office's Distinguished Service Medal.

Eugene C. Renzi -- Executive Vice President, ManTech International
Corporation; President, ManTech Telecommunications and Information Systems
Corporation (MTISC). Major General, U.S. Army (Ret.). Major General Renzi
joined us in 1993 and since 1995 has served as President of MTISC. Prior to
1993, Major General Renzi served in the U.S. Army for more than 32 years,
including as Director for Command, Control and Communications Systems for the
U.S. Pacific Command from 1988 to 1990. Major General Renzi received numerous
awards and decorations for his service in the U.S. Army, including the Defense
Superior Service Medal, the Legion of Merit and the Joint Service Commendation
Medal.

Jerry L. Unruh -- Senior Vice President, ManTech International Corporation;
President, Systems Engineering Group. Vice Admiral, U.S. Navy (Ret.). Vice
Admiral Unruh joined us in 1998 and since 1999 has served as President of
ManTech Systems Engineering Corporation. From 1996 to 1998, Vice Admiral Unruh
served as the President of the Association of Naval Aviation, a not-for-profit
corporation that educates the public and national leaders about the role of
naval aviation in national defense. Prior to that, Vice Admiral Unruh served in
the U.S. Navy for over 37 years, including as Commander of the U.S. Third Fleet
in the Pacific, Current Operations and Readiness Officer for the NATO Staff of
Supreme Allied Commander Europe and held battlegroup, aircraft carrier and
fighter squadron commands. Vice Admiral Unruh received numerous awards for his
service in the U.S. Navy, including the Distinguished Service Medal, the
Defense Superior Service Medal, the Legion of Merit and the Air Medal.

Bradley H. Feldmann -- Senior Vice President, ManTech International
Corporation; President, Information Technology Group. Mr. Feldmann joined us in
2000. Mr. Feldmann served as the Senior Vice President and Chief Operating
Officer of Comptek Research, Inc., a company supplying operational signal
processing software for military systems that was acquired by Northrop Grumman
Corporation in 2000. From 1989 to 1999, Mr. Feldmann worked for Cubic Defense
Systems, Inc., a provider of combat training systems, where he served in
various positions, including Senior Vice President and Chief Operating Officer.
Prior to that, Mr. Feldmann served with the U.S. Air Force for five years and
received two Meritorious Service Medals.

Michael D. Golden -- Director. Mr. Golden has been a Director of our
company since 1995. He is a founding partner of the law firm of Golden &
Nelson, PLLC, where he has practiced law since 1998, focusing on corporate and
securities law. Prior to founding Golden & Nelson, PLLC, he was a partner at
the law firm of Ginsburg, Feldman & Bress, Chtd. from 1996 to 1997, and prior
to that, he was a partner at Verner, Liipfert, Bernhard, McPherson and Hand
from 1991 to 1996.

Stephen W. Porter -- Director. Mr. Porter has been a Director of our
company since 1991. Mr. Porter is a partner at the law firm of Arnold & Porter
where he has practiced law since June 1993, focusing on real estate, tax and
corporate law. Mr. Porter became a certified public accountant in 1961. Mr.
Porter currently serves on the board of directors of the Greater Washington
Board of Trade and the District of Columbia Chamber of Commerce. From 1992 to
1994, he served as a member of the Advisory Board of the Center for Strategic
and International Studies, a non-partisan public policy institute.

Walter W. Vaughan -- Director. Mr. Vaughan has been a Director of our
company since 1991. Mr. Vaughan has been self-employed as a consultant to us
since 1990. From 1956 to 1989, Mr. Vaughan worked in the banking industry,
serving most recently as an Executive Vice President of American Security Bank
N.A. in Washington, D.C., and as Vice Chairman of the bank's advisory board
from 1983 to 1985. From 1986 to 1989, Mr. Vaughan served as Chief Agent for the
Receiver for the Maryland Deposit Insurance Fund, for which he received a State
of Maryland Governor's citation.

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Walter R. Fatzinger, Jr. -- Director Nominee. Mr. Fatzinger has been named
to become a Director at the closing of this offering. Mr. Fatzinger joined ASB
Capital Management, Inc., an asset management firm, in February 1999 and since
that date has served as President and Chief Executive Officer of the firm. Mr.
Fatzinger also is an executive vice president of Chevy Chase Bank, F.S.B., the
parent of ASB Capital Management, Inc. From 1994 to 1999, Mr. Fatzinger served
as President of First National Bank of Maryland's Greater Washington Region and
Executive Vice President of First National Bank of Maryland's Institutional
Bank. Prior to 1994, Mr. Fatzinger worked for American Security Bank, N.A. for
15 years, serving in various executive positions, including as President from
1991 to 1994. Mr. Fatzinger currently serves on the board of directors of the
Cafritz Company, a real estate development and property management firm, and of
the YMCA of Metropolitan Washington. He also serves as trustee to the Community
Foundation for the National Capital Region and as Vice-Chairman of the Board of
Directors and as a member of the Board of Governors of the University of
Maryland.

Richard J. Kerr -- Director Nominee. Mr. Kerr has been named to become a
Director at the closing of this offering. Mr. Kerr has been Chairman of our
Advisory Board since 1994. Mr. Kerr currently is a member of the President's
Commission on Intelligence Reform. From 1996 to 2001, Mr. Kerr served as
President of the Security Affairs Support Association, an organization composed
of government and industry members that is focused on national security policy.
Prior to that, Mr. Kerr worked at the Central Intelligence Agency for 32 years,
including serving as Deputy Director for Central Intelligence. Mr. Kerr
formerly served as a member of the Scientific Advisory Board of the National
Security Agency and the Board of Visitors of the Joint Military Intelligence
College and is currently on the advisory boards of the Los Alamos National
Laboratory, the Sandia National Laboratory and the Lawrence Livermore
Laboratory. Mr. Kerr was awarded the Citizens Medal, the second highest
civilian award given by the President of the United States, and two National
Intelligence Distinguished Service Medals and two Distinguished Intelligence
Medals from the Central Intelligence Agency.

Advisory Board

Our advisory board, which is comprised of recognized leaders in the
intelligence community and defense industry, assists us in identifying
opportunities to provide our solutions to the federal government. Our advisory
board consists of the following individuals and includes Richard J. Kerr, who
will serve as Chairman of the Advisory Board until he becomes a Director upon
the closing of this offering.

Dr. Roger L. Hagengruber (Age 59) -- Dr. Hagengruber has been a member of
our Advisory Board since 1994. Dr. Hagengruber is the Senior Vice President for
National Security at Sandia National Laboratories, a U.S. government research
and development laboratory, where he has held a number of key positions since
1972. Dr. Hagengruber has extensive experience on issues involving arms
control, satellite and sensor systems and national security. Dr. Hagengruber
has served in a variety of government assignments, including four assignments
as a member of various U.S. arms control negotiating teams. In 1979,
Dr. Hagengruber was appointed the U.S. expert to an international forum on New
Weapons of Mass Destruction.

Harley A. Hughes Lt. Gen., U.S. Air Force (Ret.) (Age 66) -- Lt. General
Hughes has been a member of our Advisory Board since 1996. Lt. General Hughes
is the Chairman of F & H One, Inc., where he has worked since 1997, and he is
the President of USTAR, LLC, where he has worked since 1997, both privately
held consulting firms. Prior to that, Lt. General Hughes served for 31 years in
the U.S. Air Force, including as the U.S. Air Force Deputy Chief of Staff for
plans and operations and the U.S. Air Force Operations Deputy, Joint Chiefs of
Staff from 1985 to 1988. Lt. General Hughes

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received a Silver Star, the Distinguished Flying Cross, the Distinguished
Service Medal, the Defense Superior Service Medal and the National Defense
Service Medal.

David E. Jeremiah Admiral, U.S. Navy (Ret.) (Age 67) -- Admiral Jeremiah
has been a member of our Advisory Board since 1994. From 1994 to the present,
Admiral Jeremiah has served as President of Technology Strategies & Alliances
Corporation, a strategic advisory and investment banking firm engaged primarily
in the aerospace, defense, telecommunications and electronics industries. Prior
to that, Admiral Jeremiah served in the U.S. Navy for more than 39 years,
including as Vice Chairman, Joint Chiefs of Staff for Generals Colin L. Powell
and John M. Shalikashvili from 1990 to 1994. Admiral Jeremiah serves on the
board of directors for Alliant Techsystems Inc., a manufacturer and developer
of solid propulsion systems, on the board of the National Committee on
U.S.-China Relations and on an advisory board for Northrop Grumman Corporation.
Admiral Jeremiah also is a member of various government commissions, including
a joint Defense Policy Board and Defense Science Board Task Force on Theater
Missile Defense, the Commission to Assess U.S. National Security Space
Management and Organization, the National Defense Panel on Department of
Defense's Quadrennial Defense Review and a Defense Science Board Task Force on
Human Resources.

Sir Colin McColl (Age 69) -- Sir Colin McColl has been a member of our
Advisory Board since 1998. From 1994 to the present, Sir Colin McColl has been
a consultant for Oxford Analytica, an international consulting firm, focusing
on political and economic affairs, since 1994. Prior to that, Sir Colin McColl
served in the British Secret Intelligence Service for 38 years, including as
Chief of the British Secret Intelligence Service from 1988 until 1994. Sir
Colin McColl is a Director of the Scottish-American Investment Trust and an
advisory director of Campbell Lutyens, an international private equity firm.
Sir Colin McColl is an honorable fellow for the Queen's College, Oxford
University.

Thomas C. Richards General, U.S. Air Force (Ret.) (Age 71) -- General
Richards has been a member of our Advisory Board since 1994. From 1997 to the
present, General Richards has been a member of the Center for Advanced Aviation
System Development of the MITRE Corporation, a not-for-profit national
technology resource corporation. From 1993 to 1997, General Richards was
President and Chief Executive Officer of the National Security Industrial
Association, a trade association for the defense industry. In 1992 and 1993,
General Richards served as the Administrator of the Federal Aviation
Administration, and prior to that served as an appointee of President George H.
Bush to the Presidential Commission on Aviation Security and Terrorism. Prior
to that, General Richards served in the U.S. Air Force for 33 years, including
as Deputy Commander Chief of the U.S. European Command. General Richards is a
member of the Federal Aviation Administration Future Planning Committee and the
Air Force Senior Statesmen Program. General Richards received the Distinguished
Service Medal, the Silver Star with Oak Leaf, the Legion of Merit with Oak
Leaf, the Distinguished Flying Cross, 18 Air Medals, the Bronze Star and the
Purple Heart with Oak Leaf.

Board of Directors

Upon the closing of this offering, our board of directors will consist of
seven individuals. In addition to our directors who served prior to the closing
of this offering, in January 2002, Mr. Fatzinger and Mr. Kerr were named to
serve as members of our board of directors, effective upon the closing of this
offering. Our board of directors is elected annually, and each director holds
office for a one-year term. Mr. Pedersen is, and will continue to be after the
closing of this offering, the beneficial owner of a majority of the voting
power of our common stock and will be able to unilaterally elect or remove
directors.

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As a matter of good corporate governance, our board of directors intends to
adopt a policy providing that any transaction or series of similar transactions
entered into after this offering between us (or any of our subsidiaries) and
one or more of our executive officers, directors or greater than five percent
stockholders, an immediate family member of any of the foregoing persons, or an
entity in which any of the foregoing persons has or have a direct or indirect
material interest, must be approved by a majority of the directors who do not
have an interest in such transaction(s), if the amount involved in the
transaction(s) exceeds $60,000.

Committees of our Board of Directors

Our board of directors has a compensation committee and, in connection with
this offering, formed an audit committee. Our board of directors may from time
to time establish other committees.

Audit Committee. Prior to the closing of this offering, our audit
committee is comprised of two non-employee directors, Mr. Golden and Mr.
Vaughan. Following the closing of this offering, our audit committee will be
comprised of at least three independent directors within the meaning of Nasdaq
listing rules. The primary responsibilities of the audit committee are to:

. Oversee management's conduct of our financial reporting process and
systems of internal accounting and financial control;

. Monitor the independence and performance of our outside auditor;

. Provide an avenue of communication among the outside auditor, management
and our board of directors;

. Make reports and recommendations to our board and our stockholders as
necessary under the rules of the Securities and Exchange Commission or as
otherwise within the scope of its functions; and

. Oversee and, where appropriate, report to our board on our review of and
response to any government audit, inquiry or investigation, as they
determine to be appropriate.

Compensation Committee. Our board of directors has a compensation
committee, which consists of three directors prior to the closing of this
offering. Immediately after this offering, at least two directors on the
compensation committee will be independent or outside directors, as determined
with reference to the rules of the U.S. Securities and Exchange Commission and
the Internal Revenue Code. The compensation committee will have the authority
to recommend to the board or establish compensation for our directors and
officers, to approve employee health and benefit plans and to administer our
stock plans.

Compensation Committee Interlocks and Insider Participation. Prior to this
offering, our compensation committee has been comprised of Mr. Vaughan as
Chairman, Mr. Pedersen and Mr. Moore. Mr. Pedersen also serves as our Chairman,
Chief Executive Officer and President. Mr. Moore also serves as our Executive
Vice President, Chief Financial Officer, Treasurer and Director.

We have from time to time extended loans to our Chairman of the Board of
Directors, Chief Executive Officer and President, George J. Pedersen, who has
used the loan proceeds for miscellaneous personal expenditures. This
indebtedness is represented by promissory notes executed by Mr. Pedersen, which
are payable upon demand and bear interest at a rate of 8.0%. The largest
aggregate amount outstanding since January 1, 1998, was $183,122. As of the
date of this prospectus, the outstanding amount of indebtedness is $183,122.

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In January 2000, our predecessor corporation, ManTech International
Corporation (New Jersey), purchased 6,582 shares of its Class B common stock
from Mr. John A. Moore, Jr., our Executive Vice President, Chief Financial
Officer, Treasurer and Director, for an aggregate purchase price of $566,082.

Director Compensation

Prior to this offering, Messrs. Golden and Porter were paid annual
retainers of $25,000 for their service as directors and Mr. Vaughan was paid an
annual retainer of $40,000 for service as a director and as chairman of our
compensation committee. The remaining directors are employed by us and are not
separately compensated for their service as directors. Following this offering,
the compensation committee will from time to time establish compensation for
the non-employee directors.

Executive Compensation

The following table shows the cash compensation and certain other
compensation paid to or accrued by our Chief Executive Officer and our four
most highly compensated executive officers, whom we refer to collectively as
our named executive officers, for 2001.

Summary Compensation Table

[Enlarge/Download Table]

Annual Compensation
--------------------------------------
Other Annual All Other
Name and Principal Position(1) Year Salary Bonus(2) Compensation(3)(4) Compensation(5)(6)
------------------------------ ---- ---------- -------- ------------------ ------------------

George J. Pedersen....................... 2001 $1,460,781 $500,000 $70,590 $709,250
Chairman of the Board of Directors, 2000 1,320,010 500,000 53,646 159,040
Chief Executive Officer and President

John A. Moore, Jr........................ 2001 557,228 350,000 -- 71,000
Executive Vice President, 2000 495,019 350,000 -- 67,903
Chief Financial Officer, Treasurer
and Director

Eugene C. Renzi.......................... 2001 489,434 -- -- 4,844
Executive Vice President 2000 437,507 150,000 -- 4,815

Bradley H. Feldmann...................... 2001 250,978 -- 72,082 4,138
Senior Vice President 2000 19,232 6,250 -- --

Jerry L. Unruh........................... 2001 212,087 -- -- 5,100
Senior Vice President 2000 206,358 45,000 -- 5,100

--------
(1) Our executive officers for 2001 are Mr. Pedersen, Mr. Moore, Mr. Hineman,
Major General Renzi, Mr. Feldmann and Vice Admiral Unruh. Mr. Hineman is an
Executive Vice President and was hired on August 20, 2001. Mr. Feldmann is
a Senior Vice President and was hired on December 4, 2000.
(2) Amounts shown in this column reflect bonuses earned in 2000 and paid in
2001 and, with respect to Mr. Pedersen and Mr. Moore, bonuses earned in
2001 and paid in 2002. Executive officer bonuses for 2001 have not yet been
determined, other than for Mr. Pedersen and Mr. Moore. Annual bonus awards
typically are determined at the end of the first quarter in the succeeding
fiscal year. The primary criteria for determining bonus amounts are company
profitability and subjective performance evaluations.
(3) Other Annual Compensation for Mr. Pedersen in 2001 includes the portion of
an employee's time spent on non-corporate matters on behalf of Mr.
Pedersen, which amounted to $51,742. Other Annual Compensation for Mr.
Feldmann in 2001 included $64,461 for relocation expenses, including
temporary housing costs.

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(4) Other Annual Compensation in 2000 for Mr. Pedersen includes the portion of
an employee's time spent on non-corporate matters on behalf of Mr.
Pedersen, which amounted to $33,370.
(5) All Other Compensation for 2001 consists of the following amounts: (a)
matching contributions made to our 401(k) plan in the amount of $3,400 for
Mr. Moore, $3,144 for Major General Renzi, $2,438 for Mr. Feldmann and
$3,400 for Vice Admiral Unruh; (b) contributions under our Employee Stock
Ownership Plan in the amount of $1,700 each for Mr. Moore, Major General
Renzi, Mr. Feldmann and Vice Admiral Unruh; and (c) contributions to
supplemental executive retirement plans in the amount of $50,000 for Mr.
Pedersen and $25,000 for Mr. Moore. In addition, the amounts reported
include a benefit of $659,250 to Mr. Pedersen and a benefit of $40,900 to
Mr. Moore pursuant to split dollar life insurance policies. These benefits
represent the price of the term portion of the policy premiums plus the
discounted present value of the imputed interest on the investment portion
of the premiums over each executive's expected life. We will be reimbursed
for the amount of the cumulative premiums attributable to the non-term
portions of the policies upon the maturity or surrender of the policies.
(6) All Other Compensation for 2000 consists of the following amounts: (a)
matching contributions made to our 401(k) plan in the amount of $3,046 for
Mr. Pedersen, $3,115 for Major General Renzi and $3,400 for Vice Admiral
Unruh; (b) contributions under our Employee Stock Ownership Plan in the
amount of $1,700 each for Mr. Moore, Major General Renzi and Vice Admiral
Unruh; and (c) contributions to supplemental executive retirement plans in
the amount of $50,000 for Mr. Pedersen and $25,000 for Mr. Moore. In
addition, the amounts reported include a benefit of $105,994 to Mr.
Pedersen and a benefit of $41,203 to Mr. Moore pursuant to split dollar
life insurance policies. These benefits represent the price of the term
portion of the policy premiums plus the discounted present value of the
imputed interest on the investment portion of the premiums over each
executive's expected life. We will be reimbursed for the amount of the
cumulative premiums attributable to the non-term portions of the policies
upon the maturity or surrender of the policies.

Aggregated Option Exercises in 2001 and Year-End Option Values

The following table shows information about the value of unexercised
options at the end of 2001. No shares were acquired on the exercise of stock
options by these individuals in 2001.

[Enlarge/Download Table]

Number of Securities Underlying Value of Unexercised In-the-Money Options at
Unexercised Options at Year-End Year-End
------------------------------- --------------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ------------- -------------

George J. Pedersen. -- -- $ -- $ --
John A. Moore, Jr.. 9,789(1) -- 2,285,773(2) --
Eugene C. Renzi.... -- -- -- --
Bradley H. Feldmann -- -- -- --
Jerry L. Unruh..... -- -- -- --

--------
(1) Exercisable for 9,789 shares of Class B common stock of our corporate
predecessor, ManTech International Corporation (New Jersey). Following our
reincorporation, recapitalization and stock split, the options will be
exercisable for 159,621 shares of our Class A common stock.

(2) There was no public market for the Class B common stock of our corporate
predecessor, ManTech International Corporation (New Jersey), at December
31, 2001. Amounts shown under the column "Value of Unexercised In-the-Money
Options at Year-End" are calculated on the basis of the per share offering
price of $16.00 per share, less the per share exercise price payable for
these shares, multiplied by the number of shares underlying the option, as
adjusted for our

424B4 61st Page of 112 TOC 1st Previous Next ↓Bottom Just 61st
reincorporation, recapitalization and stock split. This per share offering
price does not necessarily represent the actual value of our common stock
at December 31, 2001.

Retention Agreements

Prior to the closing of this offering, we expect to enter into employment
retention agreements with George J. Pedersen and John A. Moore, Jr. which will
contain the following terms. Mr. Pedersen's retention agreement provides for
his employment at-will, with an annual salary for 2002 of $1,000,000. Mr.
Pedersen will continue to receive contributions to qualified and non-qualified
retirement plans, insurance programs and perquisites on the same terms as
provided in 2001, but is not eligible for stock option grants in 2002 or for a
bonus for services performed during 2002. He is entitled to receive a bonus,
payable in 2002, for services performed in 2001. For subsequent years, Mr.
Pedersen's salary, bonus and incentive compensation shall be determined by the
Compensation Committee of our board of directors. If we terminate
Mr. Pedersen's employment without cause, we are required to pay Mr. Pedersen a
lump sum amount equal to one year's base salary at the rate in effect
immediately prior to such termination of employment. The one year period for
which payment of severance is calculated is the "severance period." Mr.
Pedersen agrees not to compete with us and not to solicit our customers or
employees during the term of his employment and through the severance period.

Mr. Moore's retention agreement provides for an initial two-year term, with
an automatic one year extension on each anniversary of the agreement, unless
either party provides advance written notice of its intent to terminate the
agreement. Under the agreement, Mr. Moore will receive an annual salary of
$425,000 and will continue to receive contributions to qualified and
non-qualified retirement plans, insurance programs and perquisites on the same
terms as provided in 2001. He is also entitled to participate in bonus and
other incentive compensation as determined by the Compensation Committee of our
board of directors, and he is entitled to receive a bonus, payable in 2002, for
services he performed in 2001. If we terminate Mr. Moore's employment without
cause, we are required to pay Mr. Moore a lump sum amount equal to the salary
that otherwise would have been payable through the "severance period," which is
the remaining term of the agreement or six months, whichever is greater. Mr.
Moore agrees not to compete with us and not to solicit our customers or
employees during the term of his employment and through the severance period.

We also expect to enter into confidentiality and noncompete agreements with
R. Evans Hineman, Eugene C. Renzi, Jerry L. Unruh and Bradley H. Feldmann prior
to the closing of this offering. Under the terms of these confidentiality and
noncompete agreements, each officer agrees not to compete with us and not to
solicit our customers or employees during the term of their respective
employments and for a period of one year thereafter. As consideration for
entering into these confidentiality and noncompete agreements, we will grant
options to each officer to purchase shares of our Class A common stock. In
addition, we have entered into a severance arrangement with Mr. Feldmann, which
provides that in the event we elect to terminate his employment with us for any
reason, we will be required to pay Mr. Feldmann a lump sum amount equal to his
annual salary, plus a pro-rata share of his bonus for that portion of the year
we employed him prior to such termination.

Management Incentive Plan

In January 2002, the board of directors adopted and our stockholders
approved our Management Incentive Plan. The plan is designed to enable us to
attract, retain and motivate our directors, officers

424B4 62nd Page of 112 TOC 1st Previous Next ↓Bottom Just 62nd
and other senior management and technical personnel, and to further align their
interests with those of our stockholders, by providing for or increasing their
proprietary interest in our company. The plan allows us to grant the following
types of awards:

. Incentive stock options, which are intended to qualify under Section 422
of the Code;

. Non-qualified stock options, which are not intended to qualify as
incentive stock options;

. Incentive bonuses, which represent the opportunity to receive an amount
paid in cash or Class A common stock based on satisfaction of performance
criteria established for the performance period by the compensation
committee; and

. Incentive stock, which is an award or issuance of shares of Class A
common stock, the grant, issuance, retention, vesting and/or
transferability of which is conditioned upon satisfaction of criteria
determined by the compensation committee.

Awards may be settled in cash, shares of Class A common stock or a
combination thereof, or by stock units which provide for settlement in cash or
deferred issuance of shares of Class A common stock. Any person who is a
director, an employee or a prospective employee of ours or any of our
subsidiaries is eligible to be selected as a recipient of an award under the
plan. We intend to grant options to approximately 125 of our directors,
officers and key employees exercisable for approximately 1,000,000 shares of
our Class A common stock at the initial public offering price. Class B common
stock may not be issued under the plan.

The plan will be administered by the compensation committee of our board of
directors, although the board of directors may exercise any authority of the
committee under the plan and the compensation committee may delegate its
authority under the plan. Subject to the express provisions of the plan, the
committee has broad authority to administer and interpret the plan, including
the discretion, in each case not inconsistent with the plan, to:

. Determine the exercise price and vesting schedule of options, the events
causing an option to expire, the number of shares of our Class A common
stock subject to any option, the restrictions on transferability of an
option and other terms and conditions;

. Determine the terms of any incentive bonus, including the target and
maximum amount payable to a participant as an incentive bonus, the
performance criteria and level of achievement versus these criteria that
determines the amount payable under an incentive bonus, the period as to
which performance will be measured for determining the amount of any
payment, the timing of any payment earned by virtue of performance, the
dollar amount or number of shares subject to any incentive bonus,
restrictions on the alienation or transfer of an incentive bonus prior to
payment, forfeiture provisions and other terms and conditions; and

. Determine the terms of any incentive stock award, including the number of
shares of Class A common stock subject to an incentive stock award or a
formula for determining that number, the purchase price, if any, for the
shares, the conditions that determine the number of shares granted,
issued, retainable and/or vested, forfeiture provisions, the effect of
termination of employment for various reasons and other terms and
conditions.

The aggregate number of shares of our Class A common stock that is
available for issuance under the plan is 3,000,000 plus, in 2003 and each year
thereafter, a number of additional shares equal to one and one-half percent of
the number of shares of Class A common stock outstanding on December 31st

424B4 63rd Page of 112 TOC 1st Previous Next ↓Bottom Just 63rd
of that year. The aggregate number of shares issuable under Awards granted
under the plan during any calendar year to any eligible person may not exceed
500,000. The number of shares authorized under the plan may be adjusted to
account for stock splits, stock dividends, recapitalizations and similar events.

The board of directors may amend or alter the plan except that approval
from our stockholders is required for certain amendments to the plan, including
amendments that materially increase the number of shares available under the
plan, extend the term of the plan or alter eligibility standards.

424B4 64th Page of 112 TOC 1st Previous Next ↓Bottom Just 64th
PRINCIPAL AND SELLING STOCKHOLDER

The following table sets forth information regarding the beneficial
ownership of our common stock as of the date of this prospectus, prior to and
after giving effect to this offering, with respect to:

. Each person or group known to us who beneficially owns five percent or
more of the outstanding shares of our common stock;

. Each director and named executive officer;

. Our executive officers and members of our board of directors as a group;
and

. The selling stockholder.

Except as indicated in the footnotes to the table, the persons named in the
table have sole voting and investment power with respect to all shares
beneficially owned. The business address of each person named in the table
below is 12015 Lee Jackson Highway, Fairfax, VA 22033-3300.

Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Shares of our common stock subject to options
that are currently exercisable or exercisable within 60 days of the date of
this prospectus are deemed outstanding for the purpose of computing the
percentage ownership of any person. These shares, however, are not considered
outstanding when computing the percentage ownership of any other person. In
addition, because Class B common stock may be voluntarily converted into Class
A common stock on a share-for-share basis, each share of Class B common stock
also represents beneficial ownership of a share of Class A common stock.
However, for purposes of this presentation, share amounts are presented based
upon outstanding shares without regard to convertibility, except as
specifically noted otherwise.

[Enlarge/Download Table]

Class A Class B
Common Stock(1) Common Stock(1)
------------------------------------------------- -----------------------
Shares Beneficially Shares
Owned Prior to this Being Shares to be Beneficially Owned
Offering Offered After this Offering
------------------- ------- ------------------------------------------
Name Number Percent Number Number Percent Number Percent
---- --------- ------- ------- ------- ------- ---------- -------

George J. Pedersen
(selling stockholder,
Chairman of the Board
of Directors, Chief
Executive Officer and
President)............... 621,691(2) 53.96% 333,333(3) 288,358(4) 3.60% 17,514,517(3)(5) 100%
John A. Moore, Jr.(6)..... 531,157 40.49 -- 531,157 6.49 -- --
Walter W. Vaughan(7)...... 95,766 8.31 -- 95,766 1.19 -- --
Michael D. Golden......... 63,153 5.48 -- 63,153 0.79 -- --
Bradley H. Feldmann....... -- -- -- -- -- -- --
R. Evans Hineman.......... -- -- -- -- -- -- --
Stephen W. Porter......... -- -- -- -- -- -- --
Eugene C. Renzi........... -- -- -- -- -- -- --
Jerry L. Unruh............ -- -- -- -- -- -- --
All executive officers and
directors as a
group (9 persons)........ 1,311,767 100% 333,333 978,434 11.96% 17,514,517 100%
[Download Table]

Percent Of Vote Of All
Classes Of Common Stock
--------------------------

Name Before Offering After Offering
---- --------------- --------------

George J. Pedersen
(selling stockholder,
Chairman of the Board
of Directors, Chief
Executive Officer and
President)............... 99.70% 95.78%(3)
John A. Moore, Jr.(6)..... 0.30 0.29
Walter W. Vaughan(7)...... 0.05 0.05
Michael D. Golden......... 0.04 0.03
Bradley H. Feldmann....... -- --
R. Evans Hineman.......... -- --
Stephen W. Porter......... -- --
Eugene C. Renzi........... -- --
Jerry L. Unruh............ -- --
All executive officers and
directors as a
group (9 persons)........ 100% 96.07%

--------
(1) The holders of each share of Class A common stock are entitled to one vote
per share, and the holders of each share of Class B common stock are
entitled to ten votes per share.
(2) Consists of 333,333 shares of Class B common stock held by Mr. Pedersen
that he will convert voluntarily to Class A common stock on a one-for-one
basis immediately prior to this offering, and 288,358 shares of Class B
common stock held by the ManTech Employee Stock

424B4 65th Page of 112 TOC 1st Previous Next ↓Bottom Just 65th
Ownership Plan Trust, over which Mr. Pedersen shares voting and investment
control as trustee, which shares the ESOP Trust will convert voluntarily
into an equivalent number of shares of Class A common stock in connection
with this offering.
(3) The 333,333 shares of Class A common stock to be offered by Mr. Pedersen
assumes no exercise of the underwriters' over-allotment option. If the
over-allotment option is exercised in full, Mr. Pedersen will sell a total
of 716,846 shares of Class A common stock in the offering and will own
17,131,004 shares of our Class B common stock after the closing of this
offering.
(4) Consists of 288,358 shares of Class B common stock held by the ManTech
Employee Stock Ownership Plan Trust, over which Mr. Pedersen shares voting
and investment control as trustee, which shares the ESOP Trust will convert
voluntarily into an equivalent number of shares of Class A common stock in
connection with this offering.
(5) Includes 1,168,565 shares of Class B common stock owned by the Pedersen
Family Limited Partnership I, of which Mr. Pedersen is the general partner;
77,517 shares of Class B common stock held by the ManTech Special
Assistance Fund, Inc., a fund over which Mr. Pedersen has voting and
investment control; and 609,296 shares of Class B common stock owned by the
ManTech Supplemental Executive Retirement Plan for the benefit of Mr.
Pedersen.
(6) Includes options to purchase 159,621 shares of our Class A common stock
which is immediately exercisable.
(7) Includes 95,766 shares of Class A common stock owned by the Waldan Defined
Benefit Pension Plan and Trust for the benefit of Mr. Vaughan.

RELATED PARTY TRANSACTIONS

GSE Systems, Inc.

ManTech and its designees hold stock in GSE Systems, Inc. (GSE), a company
created by the merger of one of our majority-owned subsidiaries and two other
entities in 1994. As of September 30, 2001, we owned approximately 17.5% of
GSE's common stock. We also hold warrants that are currently exercisable for
150,000 shares of GSE's common stock.

In October 2000, we extended a loan to GSE, which is evidenced by a demand
promissory note for $1.8 million, which was amended and subsequently replaced
in March 2001. We amended this note in April 2001 to increase the amount due
under the note to $3.9 million. The largest aggregate amount outstanding under
this note and its predecessor note since October 2000 was $3.9 million.
Interest accrued on this note at the prime lending rate plus 1.0%. The $3.9
million demand note was convertible into shares of Series A preferred stock of
GSE, at the option of the holder any time after issuance and prior to the third
anniversary of issuance. On December 5, 2001, we exercised our option and
converted this $3.9 million promissory note receivable into 39,000 shares of
Series A preferred stock of GSE. The GSE Series A preferred stock has no voting
rights, and we have agreed to a holding period of one year from the date of
issuance, after which it is convertible into GSE common stock at any time
during the subsequent three-year period at a conversion price of $2.645 per
share.

In June 2001, we extended a loan to GSE, which is evidenced by an
additional promissory note from GSE. The largest aggregate amount outstanding
under this note since June 2001 has been $1.0 million, and as of December 31,
2001 this amount remains outstanding. Interest accrues on this note at the
prime lending rate plus 1.0%.

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Under a purchasing arrangement with GSE entered into in January 2001, we
combined our purchases of products with purchases for GSE in order to obtain
volume discounts, for which GSE paid us the full purchase price plus a handling
fee. Purchases under this agreement totaled $843,290 for the nine months ended
September 30, 2001. This purchasing arrangement terminated in June 2001, and
GSE has no outstanding obligations to us, nor do we have any outstanding
obligations to GSE, in connection with this purchasing arrangement.

Our Chairman of the Board of Directors, Chief Executive Officer and
President, George J. Pedersen, as well as John A. Moore, Jr., our Executive
Vice President, Chief Financial Officer, Treasurer and Director, own 56,250
shares, or 1.1%, and 83,925 shares, or 1.6% of GSE common stock, respectively,
and serve on GSE's board of directors. Mr. Pedersen and Mr. Moore entered into
agreements with GSE in 1999 to serve as executive employees providing strategic
planning in acquisitions and divestitures, management of financing arrangements
and customer and other business development activities. Under these agreements,
GSE pays Mr. Pedersen and Mr. Moore annual fees of $120,000 and $60,000,
respectively, and granted Mr. Pedersen and Mr. Moore options to purchase
100,000 and 50,000 shares, respectively, of GSE common stock at an exercise
price of $3.3125. Mr. Pedersen and Mr. Moore intend to terminate these
agreements but may continue to serve on GSE's board of directors.

MARE, Incorporated

We have loaned money to MARE, Inc., a marine products business. Mr.
Pedersen's son-in-law is the president of MARE, Inc., and Mr. Pedersen is the
owner of 50.0% of the outstanding capital stock of the company. Mr. Pedersen
and Mr. Moore also serve on the board of directors of MARE, Inc. The loan is
evidenced by a demand note that accrues interest at a rate of 10.0%. The
largest amount outstanding since January 1, 1998 was $1.5 million. As of the
date of this prospectus, this note had an outstanding balance of $1.3 million.
The principal outstanding under this note is adjusted on a daily basis, based
on amounts advanced to or paid down by MARE. As collateral for this note, MARE
has pledged to ManTech all of its inventory, consisting primarily of boats and
parts, and any other assets that are not otherwise encumbered. MARE intends to
pay the balance of principal and interest due on this note at the closing of
this offering.

Repurchases of Stock

In January 2000, our predecessor corporation purchased 6,582 shares of its
Class B common stock from Mr. John A. Moore, Jr., our Executive Vice President,
Chief Financial Officer, Treasurer and Director, for an aggregate purchase
price of $566,082, or $86.00 per share. In February 2000, our predecessor
corporation purchased 1,000 shares of its Class B common stock from Mr. Michael
Golden, one of our directors, for an aggregate purchase price of $86,060, or
$86.06 per share, and in December 2000 it purchased an additional 1,000 shares
of its Class B common stock from Mr. Golden for an aggregate purchase price of
$123,240, or $123.24 per share. The price per share for the January and
February 2000 repurchases was calculated by dividing a valuation of the company
as of December 31, 1998 by the total number of shares of all classes of common
stock outstanding on that date. The price per share for the December 2000
repurchase was calculated by dividing a valuation of the company as of December
30, 1999 by the total number of shares of all classes of common stock
outstanding on that date. The same independent third party valuation firm
performed each of the respective valuations.

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Legal Services

Mr. Stephen Porter, one of our directors, is a partner in the law firm of
Arnold & Porter, Washington, D.C., which has performed legal services for us
from time to time and is expected to do so in the future. The amount of fees we
paid to Mr. Porter's law firm did not exceed five percent of that firm's gross
revenues in each of its last three full fiscal years.

Mr. Michael Golden, one of our directors, is a partner in the law firm of
Golden & Nelson PLLC, Washington, D.C., which has performed legal services for
us from time to time and is expected to do so in the future. The amount of fees
we paid to Mr. Golden's law firm during 2001 totaled $51,269. The amount of
fees we paid to Mr. Golden's law firm for services rendered totaled $57,675 in
2000 and $72,780 in 1999.

Ownership of Subsidiary Stock

From time to time we have allowed certain of our officers or officers of
our subsidiaries to purchase minority interests of common stock in our
subsidiaries. These purchases have been pursuant to stock purchase and
restriction agreements that generally restrict the transferability of the
shares, including granting the subsidiary a right of first refusal with respect
to any proposed sale of the common stock by the stockholder and granting the
subsidiary a right to call the stock in the event of death, permanent
disability or termination of the stockholder's employment by us or the
subsidiary.

Employee Relationships

Ms. Christine Lancaster, an employee of ours, is one of Mr. Pedersen's
daughters. Ms. Lancaster's compensation for her work on our corporate matters
totaled $110,512 in 2001, $123,082 in 2000 and $118,032 in 1999. From time to
time, we have employed Mr. Pedersen's other two daughters on a part-time or
temporary basis. The amount paid to each of them as compensation has not
exceeded $60,000 in any of the last three full fiscal years.

Business Loan and Security Agreement

Mr. Walter R. Fatzinger, Jr., one of our director nominees, is President
and Chief Executive Officer of ASB Capital Management, Inc. and is an executive
vice president of Chevy Chase Bank, F.S.B., the parent of ASB Capital
Management and one of the four financial institutions that is a party to the
Business Loan and Security Agreement that we executed on December 17, 2001. As
of December 31, 2001, the indebtedness outstanding under this Agreement was
$63.2 million, and the portion of this amount attributable to Chevy Chase Bank
was $11.52 million.

REGISTRAR AND TRANSFER AGENT

The registrar and transfer agent for the Class A common stock is American
Stock Transfer & Trust.

SHARES ELIGIBLE FOR FUTURE SALE

Shares Outstanding and Freely Tradeable After Offering

Upon completion of this offering, we will have 8,018,813 shares of Class A
common stock and 17,514,517 shares of Class B common stock outstanding
(assuming that the underwriters do not

424B4 68th Page of 112 TOC 1st Previous Next ↓Bottom Just 68th
exercise their over-allotment option). Shares of Class B common stock are
convertible at the option of the holder into an equal number of shares of Class
A common stock. The 6,866,667 shares of Class A common stock to be sold by us
in this offering and all shares sold by the selling stockholder will be freely
tradeable without restriction or limitation under the Securities Act of 1933,
as amended, except for any such shares held by our "affiliates," as such term
is defined under Rule 144 of the Securities Act. Shares of Class A and Class B
common stock held by our affiliates may be sold only if registered under the
Securities Act or sold in accordance with an applicable exemption from
registration, such as Rule 144. The remaining 18,333,330 shares of our common
stock outstanding upon completion of this offering are restricted securities,
as defined under Rule 144 and may not be sold publicly unless they are
registered under the Securities Act or are sold pursuant to Rule 144 or another
exemption from registration.

Rule 144

In general, under Rule 144 under the Securities Act of 1933, as currently
in effect, beginning 90 days after the date of this prospectus, a person,
including an affiliate, who has beneficially owned restricted securities that
were last purchased from us or an affiliate of ours at least one year before
the date the shares are proposed to be sold would be entitled to sell publicly
within any three-month period, a number of shares that does not exceed the
greater of:

. 1% of the then outstanding shares of that class of common stock; or
. The reported average weekly trading volume of that class of the common
stock on the automated quotation system of a registered securities
association or the consolidated transaction reporting system during the
four calendar weeks preceding such sale.

Sales under Rule 144 also are subject to certain requirements regarding the
manner of sale, notice and availability of current public information about us.
In addition, a person who is not deemed to have been an affiliate of ours at
any time during the 90 days preceding a sale, and who holds shares that were
last purchased from us or an affiliate of ours more than two years before the
date the shares are proposed to be sold, would be entitled to sell such shares
under Rule 144(k) without regard to the requirements described above.

We and our existing stockholders, executive officers, directors and
director nominees have agreed not to offer, sell, contract to sell, grant any
option to purchase, announce any intention to sell, transfer the economic risk
of ownership in, make any short sale, pledge or otherwise dispose of, directly
or indirectly, or file a registration statement under the Securities Act
relating to, any shares of our common stock or securities either owned as of
the date of this prospectus or thereafter acquired without the prior written
consent of the underwriters for a period of 180 days after the date of this
prospectus, other than:

. the conversion of shares of Mr. Pedersen's Class B common stock to Class
A common stock, and the sale by Mr. Pedersen of those shares of Class A
common stock in this offering, including, if exercised, pursuant to the
over-allotment option;

. the conversion of the Class B common stock to Class A common stock either
voluntarily or upon Mr. Pedersen's death; and

. certain permitted transfers such as transfers to family members, trusts
established for the benefit of a transferring stockholder and its family
members or transfers by stockholders that are partnerships or
corporations to the partners or stockholders of such stockholder, but in
each case subject to the prior execution by the transferee(s) of a
lock-up agreement satisfactory to Jefferies & Company, Inc.

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Upon the expiration of this 180-day lock-up period, substantially all of
these shares will become eligible for sale, subject to the restrictions of Rule
144. These restrictions will not affect our ability to:

. Issue, sell or award shares of our common stock or securities convertible
into, exercisable or exchangeable for, shares of our common stock
pursuant to our Management Incentive Plan as long as such shares and
securities do not vest and are not exercisable prior to the expiration of
this 180-day period (other than upon the death or disability of a holder
thereof);

. Issue shares of our common stock or other securities pursuant to the
exercise of stock options currently outstanding; or

. Issue shares of our common stock or securities convertible into, or
exercisable or exchangeable for, shares of our common stock in connection
with an acquisition of or merger with another corporation as long as such
securities are not registered under the Securities Act during this
180-day period. See "Underwriting."

Rule 701

Subject to limitations on the aggregate offering price of a transaction and
other conditions, Rule 701 may be relied upon with respect to the resale of
securities originally purchased from us by our employees, directors, officers,
consultants or advisers prior to the closing of this offering, pursuant to
written compensatory benefit plans or written contracts relating to the
compensation of such persons. In addition, the Securities and Exchange
Commission has indicated that Rule 701 will apply to stock options granted by
us before this offering, along with the shares acquired upon exercise of such
options. Securities issued in reliance on Rule 701 are deemed to be restricted
shares and, beginning 90 days after the date of this prospectus unless subject
to the contractual restrictions previously discussed, may be sold by persons
other than affiliates subject only to the manner of sale provisions of Rule 144
and by affiliates under Rule 144 without compliance with the two-year minimum
holding period requirements.

Stock Plan Registration Statements

We intend to file one or more registration statements under the Securities
Act covering approximately 3,000,000 shares of common stock reserved for
issuance under our Management Incentive Plan and with respect to the employee
stock options held by John A. Moore, Jr. These registration statements are
expected to be filed soon after the date of this prospectus and will
automatically become effective upon filing. Accordingly, shares registered
under the registration statements will be available for sale in the open
market, unless such shares are subject to vesting restrictions with us or the
contractual restrictions described above.

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DESCRIPTION OF CAPITAL STOCK, CERTIFICATE OF INCORPORATION AND BYLAWS

General

Our authorized capital stock consists of 150,000,000 shares of Class A
common stock, $0.01 par value, 50,000,000 shares of Class B common stock, $0.01
par value, and 20,000,000 shares of preferred stock, $0.01 par value, after
giving effect to our reincorporation, recapitalization and stock split. For
more information, see "Transactions Prior to the Offering" on page 6. Together,
the Class A common stock and the Class B common stock comprise all of the
authorized common stock. Prior to this offering, there were 530,455 shares of
Class A common stock and 18,136,208 shares of Class B common stock outstanding
and held of record by three and five stockholders, respectively. Included
within the outstanding 18,136,208 shares of Class B common stock are 288,358
shares of Class B common stock held by the ManTech Employee Stock Ownership
Plan Trust which shares will be converted voluntarily into an equivalent number
of shares of Class A Common Stock in connection with this offering.

Common Stock

Upon completion of this offering, and assuming the over-allotment option is
not exercised, there will be 8,018,813 shares of Class A common stock and
17,514,517 shares of Class B common stock outstanding. All of the outstanding
Class B common stock is beneficially owned by George J. Pedersen, our Chairman
of the Board of Directors, Chief Executive Officer and President. The number of
shares outstanding represents 12.77% of all of the authorized common stock. In
addition an aggregate of 3,000,000 shares of our common stock will be reserved
for issuance under our Management Incentive Plan under which 1,159,621 options
to purchase an equivalent number of shares of our Class A common stock will be
outstanding as of the date of this prospectus.

The rights, preferences and privileges of holders of our common stock are
subject to, and may be adversely affected by, the rights of holders of shares
of any series of preferred stock that we may designate and issue in the future.
The outstanding shares of our common stock are fully paid and non assessable.

Voting. Holders of Class A common stock are entitled to one vote for each
share held of record, and holders of Class B common stock are entitled to ten
votes for each share held of record, except with respect to any "going private
transaction" (generally, a transaction in which Mr. Pedersen, his affiliates,
his direct or indirect permitted transferees or a group, which includes Mr.
Pedersen, such affiliates and permitted transferees, seek to buy all
outstanding shares), as to which each share of Class A common stock and Class B
common stock are entitled to one vote per share. The Class A common stock and
the Class B common stock vote together as a single class on all matters
submitted to a vote of stockholders, including the election of directors,
except as required by law. Our common stock does not have cumulative voting
rights in the election of directors.

As a result of this offering, the percentage of the voting power of the
outstanding common stock owned or controlled by Mr. Pedersen will decline to
approximately 95.78%, if the over-allotment option is not excercised, and
95.12% if the underwriters' over-allotment option is exercised in full; but he
will continue to control all actions to be taken by the stockholders, including
the election of all directors to the board of directors. See "Principal and
Selling Stockholder" and "Risk Factors--Mr. Pedersen, Our Chairman, Chief
Executive Officer and President, Will Continue To Control Our Company."

Dividends; Stock Splits. Holders of the common stock are entitled to
receive, when and if declared by the board of directors from time to time, such
dividends and other distributions in cash, stock or property from our assets or
funds legally available for such purposes subject to any dividend preferences
that may be attributable to preferred stock that may be authorized. Each share
of Class A

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common stock and Class B common stock is equal in respect of dividends and
other distributions in cash, stock or property, except that in the case of
stock dividends, only shares of Class A common stock will be distributed with
respect to the Class A common stock and only shares of Class B common stock
will be distributed with respect to Class B common stock. In no event will
either Class A common stock or Class B common stock be split, divided or
combined unless the other class is proportionately split, divided or combined.
For example, if we effect a two-for-one stock split with respect to the Class A
common stock, we will at the same time effect a two-for-one stock split with
respect to the Class B common stock.

Conversion. The shares of Class A common stock are not convertible into
any other series or class of securities. Each share of Class B common stock,
however, is freely convertible into one share of Class A common stock at the
option of the Class B stockholder. Except for transfers to certain family
members or trusts established for the benefit of such family members, transfers
to partnerships, corporations, or similar entities whose general partners,
stockholders or members are, directly or indirectly, such family members, and
transfers to certain charitable organizations or to one of our employee benefit
plans (each, a "Permitted Transferee"), any transfer of Class B common stock
will result in the automatic conversion of the transferred shares into Class A
common stock. In addition, if Mr. Pedersen (either individually or through the
Pedersen Family Limited Partnership I or the ManTech Special Assistance Fund,
Inc.) transfers shares of Class B common stock to one or more Permitted
Transferees, and at any time after such transfer or transfers he does not
exercise voting control over the transferred shares and does not exercise
voting control over shares of Class B common stock representing in excess of
fifty percent of the voting power of all outstanding shares of common stock
entitled to vote on the election of directors, then all of the shares of Class
B common stock which Mr. Pedersen (either individually or through the Pedersen
Family Limited Partnership I or the ManTech Special Assistance Fund, Inc.) has
transferred to all Permitted Transferees and over which Mr. Pedersen does not
exercise voting control will automatically convert to an equivalent number of
shares of Class A common stock. Shares of Class B common stock may be pledged
as collateral for indebtedness but, unless the pledgee is a Permitted
Transferee, the shares will automatically convert to Class A common stock upon
any transfer in foreclosure of the pledged shares. Upon Mr. Pedersen's death,
all outstanding shares of Class B common stock automatically convert to Class A
common stock.

Mergers, Consolidation and Other Transactions. In the event that we enter
into any consolidation, merger, combination or other transaction in which
shares of common stock are exchanged for other capital stock, cash or property,
then the shares of each class of common stock will be exchanged for the same
amount of capital stock, cash or property, as the case may be, for which each
share of any other class of common stock is exchanged. Holders of each class of
common stock may receive different distributions of stock, securities, cash or
property if:

. Shares of common stock are exchanged for shares of capital stock, then
the shares exchanged may differ only to the extent that the Class A
common stock and the Class B common stock differ;

. The holders of Class A common stock receive an amount of stock,
securities, cash or property per share having a value greater than or
equal to the value per share into which or for which each share of Class
B common stock is exchanged; or

. Holders of Class A common stock and holders of Class B common stock
receive an amount of stock, securities, cash or property per share in
accordance with a transaction approved by the holders of a majority of
Class A common stock and by the holders of a majority of Class B common
stock, each voting separately as a class.

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Nasdaq. Our Class A common stock has been approved for quotation on The
Nasdaq Stock Market's National Market under the symbol "MANT."

Preferred Stock

Subject to Delaware law, the board of directors, without further action by
the stockholders, is authorized to issue an aggregate of 20,000,000 shares of
preferred stock. No shares of preferred stock are outstanding and the board of
directors currently has no plans to issue a series of preferred stock. The
board of directors may, without stockholder approval, issue preferred stock
with dividend rates, redemption prices, preferences on liquidation or
dissolution, conversion rights, voting rights and any other preferences, which
rights and preferences could adversely affect the voting power or other rights
of the holders of our common stock. The issuance of preferred stock, while
providing desirable flexibility in connection with possible acquisitions or
other corporate purposes, could have the effects of making it more difficult
for a third party to acquire, or could discourage or delay a third party from
acquiring, a majority of our outstanding stock and of decreasing the amount of
earnings or assets available for distribution to the holders of our common
stock.

Corporate Governance Provisions of Our Certificate of Incorporation and Bylaws

Advance Notice. Our bylaws require that advance written notice of all
director nominations or other business matters proposed to be brought before an
annual meeting of stockholders be delivered to our secretary at our principal
executive office not later than 60 days nor more than 120 days prior to the
first anniversary of the date on which we first mailed our proxy materials for
the prior year's annual meeting of stockholders. This provision may make it
more difficult for stockholders to nominate or elect directors or take action
opposed by our board.

Special Meetings. Our certificate of incorporation and bylaws provide that
special meetings of the stockholders may be called by our Secretary at the
direction of:

. the affirmative vote of a majority of the board of directors;

. the chairman of the board of directors;

. the chief executive officer; or

. the holders of shares representing a majority of the voting power of the
outstanding common stock entitled to vote at such meeting of stockholders.

No Stockholder Action by Written Consent. Our certificate of incorporation
provides that stockholders entitled to take action on any matter may act solely
at a meeting of stockholders duly called and held in accordance with law and
our certificate of incorporation and bylaws and may not act by a consent or
consents in writing. Accordingly, our stockholders will not be able to take
action by written consent in lieu of a meeting. This provision may have the
effect of deterring hostile takeovers or delaying changes in control or
management.

Indemnification of Directors and Officers. Our certificate of
incorporation and bylaws provide a right to indemnification to the fullest
extent permitted by law for expenses, attorney's fees, damages, punitive
damages, judgments, penalties, fines and amounts paid in settlement actually
and reasonably incurred by any person whether or not the indemnified liability
arises or arose from any threatened, pending or completed proceeding by or in
our right by reason of the fact that he or she is or was our director or
officer or while our director or officer, is or was serving at our request as a
director, officer, partner, venturer, proprietor, trustee, employee, agent, or
similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan or other
enterprise, to the fullest extent permitted under the Delaware General
Corporation Law. Our

424B4 73rd Page of 112 TOC 1st Previous Next ↓Bottom Just 73rd
certificate of incorporation and bylaws also provide for the advancement of
expenses to an indemnified party. Additionally, we may indemnify any employee
or agent of ours to the fullest extent permitted by law. Our bylaws authorize
us to take steps to ensure that all persons entitled to the indemnification are
properly indemnified, including, if the board of directors so determines,
purchasing and maintaining insurance.

Certain Provisions of Delaware Law

We are a Delaware corporation and are therefore subject to the provisions
of Section 203 of the Delaware General Corporation Law, an anti-takeover law.
In general, the statute prohibits a publicly held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction by which that person
became an interested stockholder, unless the business combination is approved
in a prescribed manner. For purposes of Section 203, a "business combination"
includes a merger, asset sale or other transaction resulting in a financial
benefit to the interested stockholder, and an "interested stockholder" is a
person who, together with affiliates and associates, owns, or within three
years prior did own, 15.0% or more of our voting stock.

Limitations on Liability and Indemnification of Officers and Directors

Our certificate of incorporation provides that none of the directors shall
be personally liable to us or our stockholders for monetary damages for breach
of fiduciary duty as a director, except liability for:

. Any breach of the director's duty of loyalty to us or our stockholders;

. Acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

. The payment of unlawful dividends and certain other actions prohibited by
Delaware General Corporation Law; and

. Any transaction from which the director derived any improper personal
benefits.

The effect of this provision of our certificate of incorporation is to
eliminate our rights and the rights of our stockholders to recover monetary
damages against a director for breach of the fiduciary duty of care as a
director, including breaches resulting from negligent or grossly negligent
behavior, except in the situations described above. This provision does not
limit or eliminate our rights or the rights of any stockholder to seek
non-monetary relief, such as an injunction or rescission in the event of a
breach of a director's duty of care.

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TAX CONSIDERATIONS

This is a general summary of material U.S. federal income and estate tax
considerations with respect to your acquisition, ownership and disposition of
our common stock if you are a beneficial owner of shares other than:

. A citizen or resident of the United States;

. A corporation, partnership or other entity created or organized in, or
under the laws of, the United States or any political subdivision of the
United States;

. An estate, the income of which is subject to U.S. federal income taxation
regardless of its source;

. A trust, if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S.
persons have the authority to control all substantial decisions of the
trust; or

. A trust that existed on August 20, 1996, was treated as a U.S. person on
August 19, 1996, and elected to be treated as a U.S. person.

This summary does not address all of the U.S. federal income and estate tax
considerations that may be relevant to you in light of your particular
circumstances or if you are a beneficial owner subject to special treatment
under United States income tax laws such as a:

. Controlled foreign corporation;

. Passive foreign investment company;

. Foreign personal holding company;

. Company that accumulates earnings to avoid U.S. federal income tax;

. Foreign tax-exempt organization;

. Financial institution;

. Broker or dealer in securities; or

. Former U.S. citizen or resident.

This summary does not discuss any aspect of state, local or non-United
States taxation. This summary is based on current provisions of the Internal
Revenue Code, Treasury regulations, judicial opinions, published positions of
the U.S. Internal Revenue Service and all other applicable authorities, all of
which are subject to change, possibly with retroactive effect. This summary is
not intended as tax advice.

We urge prospective non-United States stockholders to consult their tax
advisors regarding the United States federal, state, local and non-United
States income and other tax considerations of acquiring, holding and disposing
of shares of our common stock.

424B4 75th Page of 112 TOC 1st Previous Next ↓Bottom Just 75th
Dividends

In general, any distributions we make to you with respect to your shares of
our common stock that constitute dividends for U.S. federal income tax purposes
will be subject to U.S. withholding tax at a rate of 30.0% of the gross amount,
unless you are eligible for a reduced rate of withholding tax under an
applicable income tax treaty and you provide proper certification of your
eligibility for such reduced rate (usually on an IRS Form W-8BEN). A
distribution will constitute a dividend for U.S. federal income tax purposes to
the extent of our current or accumulated earnings and profits as determined
under the Internal Revenue Code. Any distribution not constituting a dividend
will be treated first as reducing your basis in your shares of our common stock
and, to the extent it exceeds your basis, as gain from the disposition of your
shares of our common stock.

Dividends we pay to you that are effectively connected with your conduct of
a trade or business within the United States and, if certain income tax
treaties apply, are attributable to a U.S. permanent establishment maintained
by you, generally will not be subject to U.S. withholding tax if you comply
with applicable certification and disclosure requirements. Instead, such
dividends generally will be subject to U.S. federal income tax, net of certain
deductions, at the same rates applicable to U.S. persons. If you are a
corporation, effectively connected income may also be subject to a "branch
profits tax" at a rate of 30.0%, or a lower rate specified by an applicable
income tax treaty. Dividends that are effectively connected with your conduct
of a trade or business but that under an applicable income tax treaty are not
attributable to a U.S. permanent establishment maintained by you may be
eligible for a reduced rate of U.S. withholding tax under such treaty, provided
you comply with certification and disclosure requirements necessary to obtain
treaty benefits.

Sale or Other Disposition of Our Common Stock

You generally will not be subject to U.S. federal income tax on any gain
realized upon the sale or other disposition of your shares of our common stock
unless:

. The gain is effectively connected with your conduct of a trade or
business within the United States and, under certain income tax treaties,
is attributable to a U.S. permanent establishment you maintain;

. You are an individual, you hold your shares of our common stock as
capital assets, you are present in the United States for 183 days or more
in the taxable year of disposition and you meet other conditions, and you
are not eligible for relief under an applicable income tax treaty; or

. We are or have been a "United States real property holding corporation"
for U.S. federal income tax purposes (which we believe we are not and
have never been, and do not anticipate we will become) and you hold or
have held, directly or indirectly, at any time within the shorter of the
five-year period preceding disposition or your holding period for your
shares of our common stock, more than 5.0% of our Class A common stock.

Gain that is effectively connected with your conduct of a trade or business
within the United States generally will be subject to U.S. federal income tax,
net of certain deductions, at the same rates applicable to U.S. persons. If you
are a corporation, the branch profits tax, as discussed above, also may apply
to such effectively connected gain. If the gain from the sale or disposition of
your shares is effectively connected with your conduct of a trade or business
in the United States but under an applicable income tax treaty is not
attributable to a permanent establishment you maintain in the

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United States, your gain may be exempt from U.S. tax under the treaty. If you
are described in the second bullet point above, you generally will be subject
to U.S. tax at a rate of 30.0% on the gain realized, although the gain may be
offset by some U.S. source capital losses realized during the same taxable year.

Information Reporting and Backup Withholding

We must report annually to the IRS the amount of dividends or other
distributions we pay to you on your shares of our common stock and the amount
of tax we withhold on these distributions regardless of whether withholding is
required. The IRS may make copies of the information returns reporting those
dividends and amounts withheld available to the tax authorities in the country
in which you reside pursuant to the provisions of an applicable income tax
treaty or exchange of information treaty.

The United States imposes a backup withholding tax on dividends and certain
other types of payments to U.S. persons at a rate of 30.5% (with scheduled
reductions through 2006 and a scheduled increase to 31.0% in 2011) of the gross
amount. You will not be subject to backup withholding tax on dividends you
receive on your shares of our common stock if you provide proper certification
(usually on an IRS Form W-8BEN) of your status as a non-U.S. person or you are
a corporation or one of several types of entities and organizations that
qualify for exemption.

Information reporting and backup withholding generally are not required
with respect to the amount of any proceeds from the sale of your shares of our
common stock outside the United States through a foreign office of a foreign
broker that does not have certain specified connections to the United States.
However, if you sell your shares of our common stock through a U.S. broker or
the United States office of a foreign broker, the broker will be required to
report to the IRS the amount of proceeds paid to you and also backup withhold
at a rate of 30.5% (with scheduled reductions through 2006 and a scheduled
increase to 31.0% in 2011) of that amount unless you provide appropriate
certification (usually on an IRS Form W-8BEN) to the broker of your status as a
non-U.S. person or you are a corporation or one of several types of entities
and organizations that qualify for exemption. Information reporting and backup
withholding, if the appropriate certification is not provided, also apply if
you sell your shares of our common stock through a foreign broker deriving more
than a specified percentage of its income from U.S. sources or having certain
other connections to the United States.

Any amounts withheld with respect to your shares of our common stock under
the backup withholding rules will be refunded to you or credited against your
U.S. federal income tax liability, if any, by the IRS if the required
information is furnished in a timely manner.

Estate Tax

Shares of our common stock owned or treated as owned by an individual who
is not a citizen or resident, as defined for U.S. federal tax purposes, of the
United States at the time of his or her death will be subject to U.S. federal
estate tax unless an applicable estate tax treaty provides otherwise.

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UNDERWRITING

Subject to the terms and conditions stated in the underwriting agreement
between us, the selling stockholder and the underwriters, each of the
underwriters named below has severally agreed to purchase, and we and the
selling stockholder have agreed to sell to each named underwriter, the number
of shares set forth opposite the name of each underwriter.

[Download Table]

Underwriters Number of Shares

Jefferies & Company, Inc....................... 3,069,000
Legg Mason Wood Walker, Incorporated........... 1,953,000
BB&T Capital Markets/Scott & Stringfellow, Inc. 558,000
Credit Lyonnais Securities (USA) Inc........... 180,000
Lazard Freres & Co. LLC........................ 180,000
U.S. Bancorp Piper Jaffray Inc................. 180,000
RBC Capital Markets............................ 180,000
A.G. Edwards & Sons, Inc....................... 180,000
Thomas Weisel Partners LLC..................... 180,000
Morgan Keegan & Company, Inc................... 90,000
WR Hambrecht + Co.............................. 90,000
Wells Fargo Securities, LLC.................... 90,000
SunTrust Capital Markets, Inc.................. 90,000
Janney Montgomery Scott LLC.................... 90,000
CJS Securities, Inc............................ 90,000
---------
Total.......................................... 7,200,000
=========

The underwriting agreement provides that the obligations of the several
underwriters to purchase the shares offered by us and the selling stockholder
are subject to some conditions. The underwriters are obligated to purchase all
of the shares offered by us and the selling stockholder, other than those
covered by the over-allotment option described below, if any of the shares are
purchased. The underwriting agreement also provides that, in the event of a
default by an underwriter, in some circumstances the purchase commitments of
non-defaulting underwriters may be increased or the underwriting agreement may
be terminated.

Prior to this offering, there has been no public market for the Class A
common stock. The initial offering price will be negotiated among us and the
representatives for the underwriters. Among the factors to be considered in
determining the initial public offering price of the Class A common stock
shares, in addition to prevailing market conditions, will be our historical
performance, estimates of our business potential and earnings prospects, an
assessment of our management and consideration of the above factors in relation
to market valuations of companies in related businesses. There can be no
assurance, however, that the prices at which the Class A common stock shares
will sell in the public market after this offering will not be lower than the
price at which they are sold by the underwriters or that an active trading
market in the shares will develop and continue after this offering.

The underwriters propose to offer the shares to the public initially at the
public offering price set forth on the cover of this prospectus, and to some
dealers at that price less a concession not in excess of $0.67 per share. The
underwriters may allow, and those dealers may reallow, a discount not in excess
of $0.10 per share to other dealers. After this offering, the public offering
price, the concession to selected dealers and the reallowance to other dealers
may be changed by the underwriters.

We and the selling stockholder have granted to the underwriters an option,
exercisable not later than 30 days after the date of this prospectus, to
purchase, in whole or in part, up to 1,080,000 additional shares at the public
offering price less the underwriting discount set forth on the cover of this
prospectus.

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The underwriters may exercise that option only to cover over-allotments, if
any, made in connection with the sale of the shares of Class A common stock
offered by us and the selling stockholder. To the extent that option is
exercised, each underwriter will be obligated, subject to some conditions, to
purchase a number of additional shares approximately proportionate to that
underwriter's initial purchase commitment as indicated in the table above.

The following table shows the per share and total underwriting discounts
and commissions to be paid to the underwriters by us and the selling
stockholder. Such amounts are shown assuming both no exercise and full exercise
of the underwriters' option to purchase 1,080,000 additional shares.

[Download Table]

Paid By Us Paid By The Selling Stockholder
------------------------------- -------------------------------
Without With Without With
Exercise of Full Exercise of Exercise of Full Exercise of
Over-allotment Over-allotment Over-allotment Over-allotment
-------------- ---------------- -------------- ----------------

Per share $ 1.12 $ 1.12 $ 1.12 $ 1.12
Total.... $7,690,667 $8,470,733 $373,333 $802,868

We estimate that the total expenses of this offering, excluding the
underwriting discounts and commissions, will be approximately $1.9 million,
which will be paid by us.

This offering of the shares is made for delivery when, as and if accepted
by the underwriters and subject to prior sale and to withdrawal, cancellation
or modification of this offering without notice. The underwriters reserve the
right to reject an order for the purchase of shares in whole or in part.

We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the Securities Act, and to contribute to payments
the underwriters may be required to make in respect of these liabilities.

Our Class A common stock has been approved for quotation on The Nasdaq
National Market under the symbol "MANT."

We and our existing stockholders, executive officers, directors and
director nominees have agreed not to offer, sell, contract to sell, grant any
option to purchase, announce any intention to sell, transfer the economic risk
of ownership in, make any short sale, pledge or otherwise dispose of, directly
or indirectly, or file a registration statement under the Securities Act
relating to, any shares of our common stock or securities or other rights
convertible into or exchangeable or exercisable for any shares of our common
stock or securities either owned as of the date of this prospectus or
thereafter acquired without the prior written consent of the underwriters for a
period of 180 days after the date of this prospectus, other than:

. the conversion of the Class B common stock to Class A common stock either
voluntarily or upon Mr. Pedersen's death; and

. certain permitted transfers, such as transfers to family members, trusts
established for the benefit of a transferring stockholder and its family
members or transfers by stockholders that are partnerships or
corporations to the partners or stockholders of such stockholders, but in
each case subject to the prior execution by the transferee(s) of a
lock-up agreement which is satisfactory to Jefferies & Company, Inc.

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Upon the expiration of this 180-day lock-up period, substantially all of
these shares will become eligible for sale, subject to the restrictions of Rule
144. These restrictions will not affect our ability to:

. Issue shares of our common stock or other securities pursuant to the
exercise of stock options currently outstanding; or

We have been advised by the representatives that, in accordance with
Regulation M under the Securities Act, some persons participating in this
offering may engage in transactions, including syndicate covering transactions,
stabilizing bids or the imposition of penalty bids, that may have the effect of
stabilizing or maintaining the market price of the shares at a level above that
which might otherwise prevail in the open market.

A "syndicate covering transaction" is a bid for or the purchase of shares
on behalf of the underwriters to reduce a syndicate short position incurred by
the underwriters in connection with this offering. The underwriters may create
a syndicate short position by making short sales of our shares and may purchase
our shares in the open market to cover syndicate short positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in this offering. Short
sales can be either "covered" or "naked." "Covered" short sales are sales made
in an amount not greater than the underwriters' over-allotment option to
purchase additional shares from us and the selling stockholder in this
offering. "Naked" short sales are sales in excess of the over-allotment option.
A naked short position is more likely to be created if the underwriters are
concerned that there may be downward pressure on the price of the shares in the
open market after pricing that could adversely affect investors who purchase in
this offering. If the underwriters create a syndicate short position, they may
choose to reduce or "cover" this position by either exercising all or part of
the over- allotment option to purchase additional shares from us and the
selling stockholder or by engaging in "syndicate covering transactions." The
underwriters may close out any covered short position by either exercising
their over-allotment option or purchasing shares in the open market. The
underwriters must close out any naked short position by purchasing shares in
the open market. In determining the source of shares to close out the covered
short position, the underwriters will consider, among other things, the price
of shares available for purchase in the open market as compared to the price at
which they may purchase shares through the over-allotment option.

A "stabilizing bid" is a bid for or the purchase of shares on behalf of the
underwriters for the purpose of fixing or maintaining the price of our Class A
common stock. A "penalty bid" is an arrangement that permits the
representatives to reclaim the selling concession from an underwriter or a
syndicate member when shares sold by such underwriter or syndicate members are
purchased by the representatives in a syndicate covering transaction and,
therefore, have not been effectively placed by the underwriter or syndicate
member.

We have been advised by the representatives that these transactions may be
effected on The Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time. Similar to

424B4 80th Page of 112 TOC 1st Previous Next ↓Bottom Just 80th
other purchase activities, these activities may have the effect of raising or
maintaining the market price of our Class A common stock or preventing or
retarding a decline in the market price of our Class A common stock. As a
result, the price of our Class A common stock may be higher than the price that
might otherwise exist in the open market.

Both Jefferies & Company, Inc. and Quarterdeck Investment Partners, LLC,
which is affiliated with Jefferies & Company, Inc. (which we refer to
collectively as our financial advisors), have provided and in the future may
provide investment banking and other financial advisory services to us,
including strategic planning with respect to acquisitions, for which we have
paid and expect to pay customary fees and expenses. In connection with our
engagement of these financial advisors, we have granted to them a right of
first refusal to act as managers or co-managers of a subsequent offering of
securities by us.

Quarterdeck Investment Partners, LLC has provided financial advisory
services to us with respect to this offering. In consideration for such
services, Quarterdeck Investment Partners, LLC will be paid a fee. This fee is
included in the table set forth above detailing the underwriters' compensation
on a total and per share basis. Quarterdeck Investment Partners, LLC does not
have any material relationship with us or any of our officers, directors or
other controlling persons, except its contractual relationship with us relating
to the investment banking and financial advisory services provided to us which
are described above.

Branch Banking and Trust Company of Virginia, an affiliate of BB&T Capital
Markets, a division of Scott & Stringfellow, Inc., is a member of a syndicate
of banking institutions that has advanced two loans, with an outstanding
balance of $7.4 million as of December 31, 2001, to us. In connection with our
application of the net proceeds of this offering, as described under "Use of
Proceeds" above, less than 10% of such proceeds to us will be used to repay
indebtedness to affiliates of the underwriters.

VALIDITY OF COMMON STOCK

The validity of the shares of Class A common stock offered by us in this
offering and the shares of Class A common stock offered by the selling
stockholder will be passed upon for us and the selling stockholder by Gibson,
Dunn & Crutcher LLP, Washington, D.C. Certain legal matters relating to this
offering will be passed upon for the underwriters by Morgan Lewis & Bockius
LLP, New York, New York.

EXPERTS

The consolidated financial statements as of December 31, 1999 and 2000 and
September 30, 2001 and for the years ended December 31, 1999 and 2000, and the
nine months ended September 30, 2001, included in this prospectus and the
related financial statement schedule included elsewhere in this registration
statement have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their reports appearing herein and elsewhere in the registration
statement, and have been so included in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.

The consolidated financial statements for the year ended December 31, 1998
included in this prospectus have been so included in reliance on the report of
PricewaterhouseCoopers LLP,

424B4 81st Page of 112 TOC 1st Previous Next ↓Bottom Just 81st
independent accountants, given on the authority of said firm as experts in
auditing and accounting. We have also included our financial statement schedule
for the same period in the registration statement along with
PricewaterhouseCoopers LLP report on the schedule.

Change in Independent Auditors

In July 1999, we determined to change our independent auditors from
PricewaterhouseCoopers LLP, to Deloitte & Touche LLP. In connection with
PricewaterhouseCoopers LLP's audits of our financial statements for the years
ended December 31, 1997 and 1998 and through July 1999, there were no
disagreements with PricewaterhouseCoopers LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, nor any reportable events. The reports of PricewaterhouseCoopers LLP
on the financial statements for the years ended December 31, 1997 and 1998
contained no adverse opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principle. The decision
to change auditors was approved by our board of directors. We have provided
PricewaterhouseCoopers LLP with a copy of the disclosure contained in this
section of this prospectus.

We have requested that PricewaterhouseCoopers LLP furnish us with a letter
addressed to the Commission stating whether or not it agrees with the above
statements. A copy of such letter, dated December 31, 2001, is filed as Exhibit
16.1 to our registration statement on Form S-1.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission a registration
statement on Form S-1, including exhibits and schedules, under the Securities
Act with respect to the Class A common stock to be sold in this offering. This
prospectus, which constitutes a part of the registration statement, does not
contain all of the information set forth in the registration statement or the
exhibits and schedules that are part of the registration statement. Any
statements made in this prospectus as to the contents of any contract,
agreement or other document are not necessarily complete. With respect to each
such contract, agreement or other document filed as an exhibit to the
registration statement, we refer you to the exhibit for a more complete
description of the matter involved, and each statement in this prospectus shall
be deemed qualified in its entirety by this reference. You may read and copy
all or any portion of the registration statement or any reports, statements or
other information in the files at the following public reference facilities of
the Securities and Exchange Commission:

Washington, D.C.
Room 1024
450 Fifth Street, N.W.
Washington, D.C. 20549

You can request copies of these documents upon payment of a duplicating fee
by writing to the Securities and Exchange Commission. You may call the
Securities and Exchange Commission at 1-800-SEC-0330 for further information on
the operation of its public reference rooms. Our filings, including the
registration statement, will also be available to you on the Internet web site
maintained by the Securities and Exchange Commission at www.sec.gov.

We intend to furnish our stockholders with annual reports containing
financial statements audited by our independent auditors, and make available to
our stockholders quarterly reports for the first three quarters of each year
containing unaudited interim financial statements.

424B4 82nd Page of 112 TOC 1st Previous Next ↓Bottom Just 82nd
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

[Enlarge/Download Table]

Page
- ----

Independent Auditors' Report....................................................................... F-2

Report of Independent Accountants.................................................................. F-3

Consolidated Balance Sheets as of December 31, 1999 and 2000 and September 30, 2001................ F-4

Consolidated Statements of Income for the years ended December 31, 1998, 1999 and 2000 and the nine
months ended September 30, 2000 (unaudited) and 2001............................................. F-6

Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 1998,
1999 and 2000 and the nine months ended September 30, 2001....................................... F-7

Consolidated Statements of Cash Flows for the years ended December 31, 1998, 1999 and 2000 and for
the nine months ended September 30, 2000 (unaudited) and 2001.................................... F-8

Notes to Consolidated Financial Statements......................................................... F-10

F-1

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INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
ManTech International Corporation
Fairfax, Virginia:

We have audited the accompanying consolidated balance sheets of ManTech
International Corporation and subsidiaries (the Company) as of December 31,
1999 and 2000 and September 30, 2001, and the related consolidated statements
of income, stockholders' equity, and cash flows for the years ended December
31, 1999 and 2000 and the nine months ended September 30, 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of ManTech International
Corporation and subsidiaries at December 31, 1999 and 2000 and September 30,
2001, and the results of their operations and their cash flows for the years
ended December 31, 1999 and 2000 and the nine months ended September 30, 2001
in conformity with accounting principles generally accepted in the United
States of America.

As discussed in Note 8, effective January 1, 2001, the Company adopted
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended.

DELOITTE & TOUCHE LLP

McLean, Virginia
November 16, 2001, except for Note 8
as to which the date is December 17, 2001

F-2

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REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
MANTECH INTERNATIONAL CORPORATION:

In our opinion, the accompanying consolidated statement of income, of changes
in stockholders' equity and of cash flows present fairly, in all material
respects, the results of operations and cash flows of ManTech International
Corporation (the Company) for the year ended December 31, 1998, in conformity
with accounting principles generally accepted in the United States of America.
These financial statements are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements based
on our audit. We conducted our audit of these statements in accordance with
auditing standards generally accepted in the United States of America, which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

PricewaterhouseCoopers LLP

McLean, Virginia
April 26, 1999, except for Note 16,
as to which the date is June 7, 1999 and
Note 15, as to which the date
is November 15, 2001

F-3

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[Download Table]

MANTECH INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
December 31, September 30,
----------------- -------------
1999 2000 2001
-------- -------- -------------

ASSETS

CURRENT ASSETS:
Cash and cash equivalents............... $ 19,571 $ 29,578 $ 18,231
Receivables--net........................ 88,482 83,481 90,849
Inventory............................... 756 -- --
Prepaid expenses and other.............. 5,757 11,893 6,808
Assets held for sale.................... 34,770 26,521 22,387
-------- -------- --------
Total current assets.................. 149,336 151,473 138,275

Property and equipment--net.............. 8,803 7,033 6,746
Goodwill and other intangibles........... 14,598 12,347 11,226
Investments.............................. 4,614 3,810 4,366
Employee supplemental savings plan assets 6,045 6,898 7,003
Other assets............................. 2,674 5,282 9,445
-------- -------- --------
TOTAL ASSETS............................. $186,070 $186,843 $177,061
======== ======== ========

F-4

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MANTECH INTERNATIONAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)

[Enlarge/Download Table]

December 31, September 30,
------------------ -------------
1999 2000 2001
-------- -------- -------------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current portion of debt.............................................. $ 4,501 $ 4,200 $ 2,769
Accounts payable and accrued expenses................................ 21,781 19,923 21,870
Accrued salaries and related expenses................................ 13,502 15,349 18,211
Deferred income taxes................................................ 15,882 16,722 15,697
Billings in excess of revenue earned................................. 3,243 7,939 4,393
Liabilities held for sale............................................ 23,643 15,458 13,319
-------- -------- --------
Total current liabilities.......................................... 82,552 79,591 76,259

Debt--net of current portion.......................................... 72,005 73,000 66,668
Deferred rent......................................................... 513 441 597
Accrued retirement.................................................... 7,548 8,382 8,480
Deferred income taxes................................................. 2,347 2,139 2,140
Minority interest..................................................... 95 34 53
-------- -------- --------
TOTAL LIABILITIES..................................................... 165,060 163,587 154,197
-------- -------- --------

COMMITMENTS AND CONTINGENCIES

REDEEMABLE CLASS B COMMON STOCK....................................... 1,462 1,462 1,462

STOCKHOLDERS' EQUITY:
Common stock, Class A--no par value; 25,000,000 shares authorized;
4,111,502 shares issued; 1,022,882, 1,033,938 and 1,040,566 shares
outstanding at December 31, 1999 and 2000, and September 30, 2001,
respectively....................................................... 1,179 1,179 1,179
Common stock, Class C--no par value; 100,000 shares authorized;
71,664 shares issued and outstanding............................... 21 21 21
Additional paid in capital........................................... -- 1,326 2,468
Retained earnings.................................................... 31,770 33,509 33,246
Accumulated other comprehensive loss................................. (159) (240) (1,540)
Deferred compensation................................................ 640 640 640
Treasury stock--at cost; 3,088,620, 3,077,564 and 3,070,936 shares of
Class A; and 39,156, 47,738 and 47,738 shares of Class B at
December 31, 1999 and 2000, and September 30, 2001, respectively... (13,903) (14,641) (14,612)
-------- -------- --------
Total stockholders' equity......................................... 19,548 21,794 21,402
-------- -------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............................ $186,070 $186,843 $177,061
======== ======== ========

See notes to consolidated financial statements.

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MANTECH INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in Thousands Except Per Share Amounts)

[Enlarge/Download Table]

Nine Months Ended
Year Ended December 31, September 30,
---------------------------------- ----------------------
1998 1999 2000 2000 2001
---------- ---------- ---------- ----------- ----------
(Unaudited)

REVENUES........................................ $ 314,309 $ 353,924 $ 378,827 $ 280,970 $ 316,266
COST OF SERVICES................................ 265,189 296,306 315,414 234,834 258,412
---------- ---------- ---------- ---------- ----------
GROSS PROFIT.................................. 49,120 57,618 63,413 46,136 57,854
---------- ---------- ---------- ---------- ----------
COSTS AND EXPENSES:
General and administrative.................... 33,389 39,175 41,545 30,993 33,166
Depreciation and amortization................. 2,284 3,275 3,279 2,448 2,451
---------- ---------- ---------- ---------- ----------
Total costs and expenses.................... 35,673 42,450 44,824 33,441 35,617
---------- ---------- ---------- ---------- ----------
INCOME FROM OPERATIONS.......................... 13,447 15,168 18,589 12,695 22,237

Interest expense................................ 4,020 4,122 4,438 3,316 2,383
Loss from investment default.................... 5,230 -- -- -- --
Equity in (earnings) losses of affiliates....... (911) (810) 1,162 (53) (869)
Other income.................................... (29) (443) (123) (20) (517)
---------- ---------- ---------- ---------- ----------
INCOME BEFORE PROVISION FOR INCOME
TAXES AND MINORITY INTEREST.................... 5,137 12,299 13,112 9,452 21,240
Provision for income taxes...................... (2,183) (5,466) (5,974) (4,327) (9,062)
Minority interest............................... (33) (37) (13) (12) (18)
---------- ---------- ---------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS............... 2,921 6,796 7,125 5,113 12,160
Loss from discontinued operations--net.......... (1,268) (2,727) (4,667) (3,124) (6,533)
Loss on disposal of discontinued operations--net -- -- (719) (719) (5,890)
---------- ---------- ---------- ---------- ----------
NET INCOME (LOSS)............................... $ 1,653 $ 4,069 $ 1,739 $ 1,270 $ (263)
========== ========== ========== ========== ==========
INCOME FROM CONTINUING OPERATIONS
AVAILABLE TO COMMON STOCKHOLDERS............... $ 2,838 $ 6,796 $ 7,125 $ 5,113 $ 12,160
========== ========== ========== ========== ==========
BASIC EARNINGS (LOSS) PER SHARE:
Income from continuing operations............. $ 2.46 $ 5.98 $ 6.29 $ 4.53 $ 10.68
Loss from discontinued operations............. (1.10) (2.40) (4.76) (3.40) (10.91)
---------- ---------- ---------- ---------- ----------
$ 1.36 $ 3.58 $ 1.53 $ 1.13 $ (0.23)
---------- ---------- ---------- ---------- ----------
Weighted average common shares outstanding...... 1,152,790 1,135,659 1,132,140 1,129,831 1,138,449
========== ========== ========== ========== ==========
DILUTED EARNINGS (LOSS) PER SHARE:
Income from continuing operations............. $ 2.43 $ 5.93 $ 6.24 $ 4.49 $ 10.59
Loss from discontinued operations............. (1.09) (2.38) (4.72) (3.37) (10.82)
---------- ---------- ---------- ---------- ----------
$ 1.34 $ 3.55 $ 1.52 $ 1.12 $ (0.23)
---------- ---------- ---------- ---------- ----------
Weighted average common shares outstanding...... 1,168,289 1,145,448 1,141,929 1,139,620 1,148,238
========== ========== ========== ========== ==========

See notes to consolidated financial statements.

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MANTECH INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Dollars in Thousands)

[Enlarge/Download Table]

Accumulated Other
Common Additional Comprehensive Retained Comprehensive Deferred
Stock Paid In Capital Income (Loss) Earnings Income (Loss) Compensation
------ --------------- ------------- -------- ----------------- ------------

BALANCE, JANUARY 1, 1998........................... $1,200 $ -- $26,131 $ (163) $ --
Net income....................................... $ 1,653 1,653
-------
Other comprehensive income (loss):...............
Net unrealized holding gain--net of income tax
provision of $70............................... 110
Translation adjustments......................... (70)
-------
Other comprehensive income....................... 40 40
-------
Comprehensive income............................. $ 1,693
=======
Dividends on redeemable common stock............. (83)
Redemption of Class B common stock...............
Common stock held in rabbi trust................. 640
------ ------ ------- ------- ----
BALANCE, DECEMBER 31, 1998......................... 1,200 -- 27,701 (123) 640
Net income....................................... $ 4,069 4,069
-------
Other comprehensive loss:........................
Translation adjustments......................... (36)
-------
Other comprehensive loss......................... (36) (36)
-------
Comprehensive income............................. $ 4,033
------ ------ ======= ------- ------- ----
BALANCE, DECEMBER 31, 1999......................... 1,200 -- 31,770 (159) 640
Net income....................................... $ 1,739 1,739
-------
Other comprehensive loss:........................
Translation adjustments......................... (81)
-------
Other comprehensive loss......................... (81) (81)
-------
Comprehensive income............................. $ 1,658
=======
Contribution of Class A common stock to Employee
Stock Ownership Plan............................ 1,326
Redemption of Class B common stock...............
------ ------ ------- ------- ----
BALANCE, DECEMBER 31, 2000......................... 1,200 1,326 33,509 (240) 640
Net loss......................................... $ (263) (263)
-------
Other comprehensive loss:........................
Cash flow hedge................................. (1,251)
Translation adjustments......................... (49)
-------
Other comprehensive loss......................... (1,300) (1,300)
-------
Comprehensive loss............................... $(1,563)
=======
Contribution of Class A common stock to Employee
Stock Ownership Plan............................ 1,142
------ ------ ------- ------- ----
BALANCE, SEPTEMBER 30, 2001........................ $1,200 $2,468 $33,246 $(1,540) $640
====== ====== ======= ======= ====
[Download Table]

Treasury Total Stockholders'
Stock Equity
-------- -------------------

BALANCE, JANUARY 1, 1998........................... $(10,337) $16,831
Net income....................................... 1,653

Other comprehensive income (loss):...............
Net unrealized holding gain--net of income tax
provision of $70...............................
Translation adjustments.........................

Other comprehensive income....................... 40

Comprehensive income.............................

Dividends on redeemable common stock............. (83)
Redemption of Class B common stock............... (2,926) (2,926)
Common stock held in rabbi trust................. (640) --
-------- -------
BALANCE, DECEMBER 31, 1998......................... (13,903) 15,515
Net income....................................... 4,069

Other comprehensive loss:........................
Translation adjustments.........................

Other comprehensive loss......................... (36)

Comprehensive income.............................
-------- -------
BALANCE, DECEMBER 31, 1999......................... (13,903) 19,548
Net income....................................... 1,739

Other comprehensive loss:........................
Translation adjustments.........................

Other comprehensive loss......................... (81)

Comprehensive income.............................

Contribution of Class A common stock to Employee
Stock Ownership Plan............................ 37 1,363
Redemption of Class B common stock............... (775) (775)
-------- -------
BALANCE, DECEMBER 31, 2000......................... (14,641) 21,794
Net loss......................................... (263)

Other comprehensive loss:........................
Cash flow hedge.................................
Translation adjustments.........................

Other comprehensive loss......................... (1,300)

Comprehensive loss...............................

Contribution of Class A common stock to Employee
Stock Ownership Plan............................ 29 1,171
-------- -------
BALANCE, SEPTEMBER 30, 2001........................ $(14,612) $21,402
======== =======

See notes to consolidated financial statements.

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MANTECH INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)

[Enlarge/Download Table]

Nine Months Ended
Year Ended December 31, September 30,
------------------------- -------------------
1998 1999 2000 2000 2001
------- ------- ------- ----------- -------
(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).......................................... $ 1,653 $ 4,069 $ 1,739 $ 1,270 $ (263)
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Equity in (earnings) losses of affiliates................ (911) (810) 1,162 (53) (869)
Loss from discontinued operations........................ 1,268 2,727 4,667 3,124 6,533
Loss on disposal of discontinued operations.............. -- -- 719 719 5,890
Deferred income taxes.................................... (196) (338) 981 451 (134)
Minority interest in income of consolidated
subsidiaries........................................... 33 37 15 11 19
Loss from investment default............................. 5,230 -- -- -- --
Loss (gain) on disposal of property and equipment........ 6 (183) 142 289 88
Depreciation and amortization............................ 4,379 5,635 5,548 4,173 3,868
Change in assets and liabilities--net of effects from
acquired and disposed businesses:
(Increase) decrease in receivables..................... (3,133) (9,965) 5,010 (5,885) (7,389)
(Increase) decrease in prepaid expenses and
other................................................ (160) 2,637 (8,180) (6,246) 4,157
(Increase) decrease in inventory....................... (263) 171 755 755 --
(Decrease) increase in accounts payable and
accrued expenses..................................... (740) 5,144 (1,377) (4,734) (54)
(Decrease) increase in accrued salaries and related
expenses............................................. (503) 10 3,211 5,601 3,953
(Decrease) increase in billings in excess of revenue
earned............................................... (1,418) (1,380) 4,699 516 (3,537)
(Decrease) increase in deferred rent................... (44) 51 (73) (17) 157
Increase in accrued retirement......................... 2,708 1,582 834 1,228 97
------- ------- ------- ------- -------
Net cash provided by operating activities of
continuing operations.............................. 7,909 9,387 19,852 1,202 12,516
------- ------- ------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment......................... (3,538) (2,181) (1,344) (964) (1,616)
Proceeds from sales of property and equipment.............. 113 1,168 225 222 --
Proceeds from notes receivable............................. 207 -- -- -- --
Loans receivable from GSE.................................. -- -- (1,550) -- (3,350)
Investment in GSE Common Stock............................. -- -- (500) (500) --
Investment in capitalized software products................ (1,787) (900) (316) (233) (933)
Investment in ADG, net of cash acquired of $4,429.......... -- (19) (496) (372) --
Investment in REVIVE....................................... -- (677) -- -- --
(Investment in) dividends from MASI U.K.................... -- -- (216) (216) 285
------- ------- ------- ------- -------
Net cash used in investing activities of
continuing operations.............................. (5,005) (2,609) (4,197) (2,063) (5,614)
------- ------- ------- ------- -------

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MANTECH INTERNATIONAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)

[Enlarge/Download Table]

Nine Months Ended
Year Ended December 31, September 30,
------------------------- --------------------
1998 1999 2000 2000 2001
------- ------- ------- ----------- --------
(Unaudited)

CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in borrowings under lines
of credit...................................... 5,717 7,900 4,413 (269) (4,344)
Repayment of term loan........................... (800) (3,200) (2,400) (1,600) (2,400)
Repayment of notes payable....................... (375) (1,204) (276) (276) (1,000)
Repayment of mortgage............................ (75) (1,163) -- -- --
Payment of not-to-compete financings............. (443) (337) (1,000) (1,000) --
Repurchase of Class B common stock............... (2,926) -- (775) (652) --
Redemption of preferred stock.................... (8,029) -- -- -- --
Proceeds from subordinated debt.................. 8,000 -- -- -- --
Proceeds from exercise of stock options.......... 269 -- -- -- --
Dividends paid................................... (83) -- -- -- --
------- ------- ------- ------- --------
Net cash provided by (used in)
financing activities of continuing
operations............................... 1,255 1,996 (38) (3,797) (7,744)
------- ------- ------- ------- --------

EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS....................... 5 (39) 167 (98) 3
------- ------- ------- ------- --------

NET CASH USED IN DISCONTINUED
OPERATIONS...................................... (6,910) (3,736) (5,777) (3,449) (10,508)
------- ------- ------- ------- --------

NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS................................ (2,746) 4,999 10,007 (8,205) (11,347)

CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD....................................... 17,318 14,572 19,571 19,571 29,578
------- ------- ------- ------- --------

CASH AND CASH EQUIVALENTS, END OF
PERIOD.......................................... $14,572 $19,571 $29,578 $11,366 $ 18,231
======= ======= ======= ======= ========

See notes to consolidated financial statements

F-9

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

1. Description of the Business

2. Summary of Significant Accounting Policies

Principles of Consolidation--The accompanying consolidated financial
statements include the accounts of ManTech International Corporation and its
majority-owned subsidiaries (the Company). Minority interest represents
minority stockholders' proportionate share of the equity in one of the
Company's consolidated subsidiaries. The Company's share of affiliates'
earnings (losses) is included in the consolidated statements of income using
the equity method (see note 12). All intercompany accounts and transactions
have been eliminated.

Use of Accounting Estimates--The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
of America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. These estimates
involve judgments with respect to, among other things, various future economic
factors that are difficult to predict and are beyond the control of the
Company. Therefore, actual amounts could differ from these estimates.

Revenue Recognition--The majority of the Company's revenues are derived
from cost-plus-fixed-fee, cost-plus-award-fee, firm-fixed-price, or
time-and-materials contracts. Under cost-plus-fixed or award-fee contracts,
revenues are recognized as costs are incurred and include an estimate of
applicable fees earned. Under firm-fixed-price contracts, revenues are
estimated on the percentage of completion method, on the basis of costs
incurred in relation to estimated total costs, or upon delivery of specific
products or services, as appropriate. For time-and-material contracts, revenues
are computed by multiplying the number of direct labor-hours expended in the
performance of the contract by the contract billing rates and adding other
billable direct costs. Performance incentives are incorporated in certain
contracts, which provide increased and decreased revenues based on actual
performance compared to established targets. Incentives based upon cost
performance are recorded when earned and other incentives and awards are
recorded when the amounts are earned and can be reasonably determined, or are
awarded. In certain circumstances, revenues are recognized when contract
amendments have not been finalized. Anticipated losses are recognized in the
accounting period in which they are first determined.

Cost of Services--Cost of services consists primarily of compensation
expenses for program personnel and direct expenses incurred to complete
programs, including cost of materials and subcontract efforts.

Cash and Cash Equivalents--For the purpose of reporting cash flows, cash
and cash equivalents include cash on hand, amounts due from banks, and
short-term investments with maturity dates of three months or less at the date
of purchase.

F-10

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

2. Summary of Significant Accounting Policies (Continued)

Property and Equipment--Property and equipment are recorded at original
cost. Upon sale or retirement, the costs and related accumulated depreciation
or amortization are eliminated from the respective accounts and any resulting
gain or loss is included in income. Maintenance and repairs are charged to
expense as incurred.

Depreciation and Amortization--Furniture and office equipment are
depreciated using the straight-line method with estimated useful lives ranging
from five to fifteen years. Leasehold improvements are amortized using the
straight-line method over a life of five years, or the term of the lease,
whichever is shorter.

Inventory--Inventory is carried at the lower of cost or market. Cost is
computed on a specific identification basis.

Goodwill and Other Intangibles--Goodwill, the excess of cost over the fair
value of net tangible and identifiable intangible assets of acquired companies,
is amortized on a straight-line basis over periods ranging from two to twenty
years. Contract rights and other intangibles are amortized on a straight-line
basis over periods ranging from three to five years.

Software Development Costs--The Company accounts for software development
costs in accordance with Statement of Financial Accounting Standards (SFAS) No.
86, Accounting for the Costs of Computer Software to be Sold, Leased, or
Otherwise Marketed. For projects fully funded by the Company, significant
development costs are capitalized from the point of demonstrated technological
feasibility until the point in time that the product is available for general
release to customers. Once the product is available for general release,
capitalized costs are amortized on a straight-line basis over a five-year
period or other such shorter period as may be required. The Company recorded
$29,000, $431,000, and $665,000 of amortization expense for the years ended
December 31, 1998, 1999 and 2000, respectively, and $499,000 for the nine
months ended September 30, 2001. Capitalized software costs included in other
intangibles at December 31, 1999 and 2000, and September 30, 2001 were
$2,380,000, $2,031,000 and $2,465,000, respectively.

Employee Supplemental Savings Plan (ESSP) Assets--The Company maintains
several nonqualified defined contribution supplemental retirement plans for
certain key employees that are accounted for in accordance with Emerging Issues
Task Force (EITF) Issue 97-14, Accounting for Deferred Compensation
Arrangements Where Amounts Earned Are Held in a Rabbi Trust and Invested, as
the underlying assets are held in rabbi trusts with investments directed by the
respective employee. A rabbi trust is a grantor trust generally set up to fund
compensation for a select group of management and the assets of this trust are
available to satisfy the claims of general creditors in the event of bankruptcy
of the Company. As required by EITF 97-14, the assets held by the rabbi trusts
are recorded at fair value in the consolidated financial statements as Employee
Supplemental Savings Plan Assets with a corresponding amount recorded as a
deferred compensation liability in Accrued Retirement.

Impairment of Long-Lived Assets--Whenever events or changes in
circumstances indicate that the carrying amount of long-lived assets, including
goodwill, software development costs and other intangibles, may not be fully
recoverable, the Company evaluates the probability that future

F-11

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

2. Summary of Significant Accounting Policies (Continued)

undiscounted net cash flows, without interest charges, will be less than the
carrying amount of the assets. If any impairment were indicated as a result of
this review, the Company would recognize a loss based on the amount by which
the carrying amount exceeds the estimated discounted future cash flows. The
Company believes that no impairments exist as of September 30, 2001.

Income Taxes--Deferred income taxes are recognized based on the estimated
future tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used
for income tax purposes. Valuation allowances are established when necessary to
reduce deferred tax assets to amounts expected to be realized. Income tax
expense represents the current tax provision for the period and the change
during the period in deferred tax assets and liabilities. No provision is made
for U.S. taxes on foreign subsidiaries where earnings are expected to be
reinvested indefinitely.

Foreign Currency Translation--All assets and liabilities of foreign
subsidiaries are translated into U.S. dollars at fiscal year-end exchange
rates. Income and expense items are translated at average monthly exchange
rates prevailing during the fiscal year. The resulting translation adjustments
are recorded as a component of Accumulated other comprehensive income (loss).

Comprehensive Income (Loss)--Comprehensive income (loss) consists of net
income (loss), unrealized gains or losses on certain investments, cash flow
hedge and foreign currency translation adjustments and is presented in the
Consolidated Statements of Changes in Stockholders' Equity.

Stock-Based Compensation--As permitted under SFAS No. 123, Accounting for
Stock-Based Compensation, the Company accounts for stock-based awards using the
intrinsic value method prescribed in Accounting Principles Board (APB) Opinion
No. 25, Accounting for Stock Issued to Employees. Accordingly, no compensation
expense has been recognized in the financial statements related to employee
stock option awards.

Fair Value of Financial Instruments--The carrying value of the Company's
cash and cash equivalents, accounts receivable, accounts payable and accrued
expenses approximate their fair values.

New Accounting Pronouncements--In June 2001, the Financial Accounting
Standards Board (FASB) issued SFAS No. 141, Business Combinations, which
requires that all business combinations be accounted for by a single method -
the purchase method. The provisions of SFAS No. 141 apply to all business
combinations initiated after June 30, 2001. SFAS No. 141 also applies to all
business combinations accounted for using the purchase method for which the
date of acquisition is July 1, 2001, or later. The Company does not expect the
adoption of the provisions of SFAS No. 141 to have a material impact on its
consolidated financial position or results of operations.

In June 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible
Assets. SFAS No. 142 requires that, upon its adoption, amortization of goodwill
will cease and instead, the carrying value of goodwill will be evaluated for
impairment on an annual basis. Identifiable intangible assets will continue to
be amortized over their useful lives and reviewed for impairment in accordance
with SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be

F-12

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

2. Summary of Significant Accounting Policies (Continued)

Disposed Of. SFAS No. 142 will be effective for fiscal years beginning after
December 15, 2001. The Company has not yet completed its analysis of this new
pronouncement and the impact it will have on the consolidated financial
statements.

In July 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations. SFAS No. 143 requires that the fair value of a liability for an
asset retirement obligation be recognized in the period in which it is
incurred, if a reasonable estimate of fair value can be made. The associated
asset retirement cost would be capitalized as part of the carrying amount of
the long-lived asset. SFAS No. 143 will be effective for fiscal years beginning
after June 15, 2002. The Company has not yet completed its analysis of this new
pronouncement and the impact it will have on the consolidated financial
statements.

In October 2001, the FASB issued SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets, which replaces SFAS No. 121. SFAS
No. 144 requires that long-lived assets be measured at the lower of carrying
amount or fair value less cost to sell, whether reported in continuing
operations or in discontinued operations. SFAS No. 144 also broadens the
reporting of discontinued operations to include all components of an entity
with operations that can be distinguished from the rest of the entity and that
will be eliminated from the ongoing operations of the entity in a disposal
transaction. The provisions of SFAS No. 144 are effective for financial
statements issued for fiscal years beginning after December 15, 2001. The
Company has not yet completed its analysis of this new pronouncement and the
impact it will have on the consolidated financial statements.

In November 2001, the EITF issued Topic No. D-103, Income Statement
Characterization of Reimbursements Received for "Out-of-Pocket'' Expenses
Incurred. EITF No. D-103 requires that companies report reimbursements received
for out-of-pocket expenses incurred as revenue, rather than as a reduction of
expenses. The provisions of EITF No. D-103 are effective for financial
statements issued for fiscal years beginning after December 15, 2001. As we
have historically accounted for reimbursements for out-of-pocket expenses in
the manner provided for under EITF No. D-103, we do not expect the adoption of
the provisions of EITF No. D-103 to have an impact on our consolidated
financial position or results of operations.

Reclassifications--Certain reclassifications have been made to previously
reported balances to conform with the current-period presentation.

3. Earnings per Share

Basic earnings per share has been computed by dividing net income available
to common stockholders by the weighted average number of shares of Class A,
Class B and Class C Common Stock outstanding during each period. Shares issued
during the period and shares reacquired during the period are weighted for the
portion of the period that they were outstanding. Diluted earnings per share
have been computed in a manner consistent with that of basic earnings per share
while giving effect to all potentially dilutive common shares that were
outstanding during each period.

F-13

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

3. Earnings per Share (Continued)

Basic and diluted earnings available to common stockholders are the same
and are computed as follows (in thousands):

[Enlarge/Download Table]

Nine Months Ended
Year Ended December 31, September 30,
----------------------- ------------------
1998 1999 2000 2000 2001
----- ----- ----- ----------- ------
(Unaudited)

Income from continuing operations............. 2,921 6,796 7,125 5,113 12,160
Less: Dividends paid to Redeemable Class B
common stockholders......................... (83) -- -- -- --
----- ----- ----- ----- ------
Income from continuing operations available to
common stockholders......................... 2,838 6,796 7,125 5,113 12,160
===== ===== ===== ===== ======

The weighted average number of common shares outstanding is computed as
follows (in thousands):

[Enlarge/Download Table]

Nine Months Ended
Year Ended December 31, September 30,
----------------------- -----------------
1998 1999 2000 2000 2001
----- ----- ----- ----------- -----
(Unaudited)

Basic weighted average common shares
outstanding................................ 1,153 1,135 1,132 1,130 1,138
Effect of potential exercise of stock options 15 10 10 10 10
----- ----- ----- ----- -----
Diluted weighted average common shares
outstanding................................ 1,168 1,145 1,142 1,140 1,148
===== ===== ===== ===== =====

4. Business Segment and Geographic Area Information

The Company operates as one segment, delivering a broad array of
information technology and technical services solutions under contracts with
the U.S. Government. No single customer accounted for 10% or more of the
Company's accounts receivable or revenues as of or for the years ended December
31, 1998, 1999 and 2000, and nine months ended September 30, 2001. In addition,
there were no sales to any customers within a single country except for the
United States where the sales accounted for 10% or more of total revenue.
Substantially all assets of continuing operations were held in the United
States for the years ended December 31, 1998, 1999 and 2000, and nine months
ended September 30, 2001. Revenues by geographic customer and the related
percentages of total revenues

F-14

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

4. Business Segment and Geographic Area Information (Continued)

for the years ended December 31, 1998, 1999 and 2000, and the nine months ended
September 30, 2001, were as follows (in thousands):

[Download Table]

Nine Months Ended
Year Ended December 31, September 30,
---------------------------- -----------------
1998 1999 2000 2001
-------- -------- -------- -----------------

United States $312,507 $352,423 $373,989 $311,214
International 1,802 1,501 4,838 5,052
-------- -------- -------- --------
$314,309 $353,924 $378,827 $316,266
======== ======== ======== ========
United States 99.4 % 99.6 % 98.7 % 98.4 %
International 0.6 0.4 1.3 1.6
-------- -------- -------- --------
100.0 % 100.0 % 100.0 % 100.0 %
======== ======== ======== ========

5. Revenues and Receivables

The Company delivers a broad array of information technology and technical
services solutions under contracts with the U.S. Government. Revenues from the
U.S. Government under prime contracts and subcontracts, as compared to total
contract revenues, were approximately 97%, 96% and 96% for the years ended
December 31, 1998, 1999 and 2000, respectively, and approximately 96% for the
nine months ended September 30, 2001. Approximately 44%, 45%, 40% and 36% of
the Company's revenues were generated under cost-reimbursable contracts for the
years ended December 31, 1998, 1999 and 2000, and for the nine months ended
September 30, 2001, respectively.

The components of contract receivables are as follows (in thousands):

[Enlarge/Download Table]

December 31, September 30,
---------------- -------------
1999 2000 2001
------- ------- -------------

Billed receivables...................................... $61,025 $59,561 $71,335
Unbilled receivables:
Amounts currently billable............................ 20,612 16,529 14,192
Revenues recorded in excess of estimated contract
value or funding.................................... 4,914 4,307 1,385
Retainage............................................... 2,198 1,761 1,665
Indirect costs incurred in excess of provisional billing
rates................................................. 1,571 2,755 4,212
Allowance for doubtful accounts......................... (1,838) (1,432) (1,940)
------- ------- -------
$88,482 $83,481 $90,849
======= ======= =======

Indirect cost rates in excess of provisional billing rates on U.S.
Government contracts are generally billable at actual rates less a reduction of
.5% of the actual general and administrative rate base before a Defense
Contract Audit Agency (DCAA) audit is completed. The balance remaining, as well
as any retainage, is billable upon completion of a DCAA audit (see note 13).
Revenues recorded

F-15

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

5. Revenues and Receivables (Continued)

in excess of contract value or funding are billable upon receipt of contractual
amendments. Amounts currently billable consist principally of amounts to be
billed within the next month.

6. Property and Equipment

Major classes of property and equipment are summarized as follows (in
thousands):

[Enlarge/Download Table]

December 31, September 30
------------------------- -------------
1999 2000 2001
-------- -------- -------------

Furniture and equipment................................ $ 24,202 $ 22,504 $ 23,170
Leasehold improvements................................. 4,672 4,511 4,407
-------- -------- --------
28,874 27,015 27,577
Less: Accumulated depreciation and amortization........ (20,071) (19,982) (20,831)
-------- -------- --------
$ 8,803 $ 7,033 $ 6,746
======== ======== ========

Depreciation and amortization expense for the years ended December 31, 1998, 1999 and 2000,
and for the nine months ended September 30, 2001 was $2,606,000, $2,912,000, $2,837,000 and
$1,816,000, respectively.

7. Goodwill and Other Intangibles

The components of goodwill and other intangibles are as follows (in thousands):

December 31, September 30
------------------------- -------------
1999 2000 2001
-------- -------- -------------
Goodwill............................................... $ 17,948 $ 18,092 $ 18,092
Other intangibles...................................... 8,691 9,007 9,939
-------- -------- --------
26,639 27,099 28,031
Less: Accumulated amortization......................... (12,041) (14,752) (16,805)
-------- -------- --------
$ 14,598 $ 12,347 $ 11,226
======== ======== ========

Goodwill amortization expense for the years ended December 31, 1998, 1999
and 2000, and for the nine months ended September 30, 2001 was $836,000,
$1,033,000, $1,124,000 and $863,000, respectively.

F-16

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

8. Debt

[Download Table]

December 31, September 30,
--------------- -------------
1999 2000 2001
------- ------- -------------

Borrowings under the Amended and Restated
Business Loan and Security Agreement:
Revolving credit facility.............. $53,100 $57,496 $53,133
Term loan.............................. 12,000 9,600 7,200
------- ------- -------
65,100 67,096 60,333
Subordinated credit agreement............ 8,000 8,000 8,000
Other notes.............................. 3,406 2,104 1,104
------- ------- -------
Total debt........................... 76,506 77,200 69,437
Less: Current portion of debt........ 4,501 4,200 2,769
------- ------- -------
Debt--net of current portion......... $72,005 $73,000 $66,668
======= ======= =======

On December 17, 2001, the Company executed a new Business Loan and Security
Agreement (the Agreement) with Citizens Bank of Pennsylvania, PNC Bank N.A.
Branch Banking and Trust Company of Virginia, and Chevy Chase Bank, F.S.B. to
refinance and replace the company's agreement. The Agreement provides for
maximum borrowings of $71.4 million and consists of a $65.0 million revolving
credit facility and a $6.4 million term loan. Under the term loan portion of
the Agreement, the principal balance is payable in consecutive quarterly
installments of $492,308 on the last business day of each quarter commencing
with the last business day of December 2001. The maturity date of the Agreement
is December 31, 2004. Borrowings under the Agreement are collateralized by the
Company's eligible contract receivables, inventory, and certain property and
equipment and bear interest at the agreed-upon London Interbank Offering Rate
(LIBOR) plus market-rate spreads that vary according to the calculation of a
certain Company leverage ratio. Under the Agreement, the Company is required to
maintain specified financial covenants relating to fixed charge coverage,
interest coverage, debt coverage, and minimum consolidated net worth. The
Agreement also places limitations on additional borrowings, mergers, and
related party transactions, issuance of capital stock and payment of dividends,
and limitations with respect to capital expenditures.

On October 27, 2000, the Company executed the Second Amendment to the
Amended and Restated Business Loan and Security Agreement (the Prior Agreement)
with Mellon Bank N.A. (Mellon), First Union Commercial Corporation (First
Union) and PNC Bank N.A., which provides for maximum borrowings of $76.0
million. The Prior Agreement consisted of a $60.0 million revolving credit
facility and a $16.0 million term loan. Under the revolving portion of the
Prior Agreement, the Company could borrow the lesser of defined percentages of
receivables or $60.0 million. The maximum available borrowing under the
revolving credit facility at September 30, 2001 was $60.0 million. Under the
term loan portion of the Prior Agreement, the principal balance was payable in
consecutive quarterly installments of $800,000 on the last business day of each
quarter commencing with the last business day of December 1998. A final payment
of $6.4 million was due upon expiration of the Prior Agreement on December 31,
2001. In conjunction with the execution of the Prior Agreement, the Company
recorded $175,000 in loan origination costs, included in other assets, which
are being amortized ratably over the term of the Prior Agreement.

F-17

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

8. Debt (Continued)

Borrowings under the Prior Agreement were collateralized by the Company's
eligible contract receivables, inventory, and certain property and equipment
and bear interest at the agreed-upon LIBOR plus 2.25% for the first $25.0
million outstanding, at LIBOR plus 2.75% for the $7.2 million associated with
the term loan, at LIBOR plus 2.03125% for European currency loans of $1.0
million, and at the bank's prime rate plus 1.00% for outstanding amounts
greater than $33.2 million. At September 30, 2001, the agreed-upon LIBOR rate
was 2.79% for $15.0 million, 3.52% for $10.0 million, 3.49% for $6.4 million,
4.95% for $1.0 million and the bank's prime rate was 6.00% for the remaining
$27.9 million. The aggregate annual weighted average interest rates were 8.15%,
7.52% and 8.75% for 1998, 1999 and 2000, respectively. The aggregate weighted
average interest rate for the nine months ended September 30, 2001 was 8.49%.
The weighted average borrowings under the revolving portion of the Prior
Agreement during the years ended December 31, 1998, 1999 and 2000, and the nine
months ended September 30, 2001, were $43,663,000, $32,357,000, $43,876,000 and
$36,848,000, respectively.

As of September 30, 2001, the Company was contingently liable under letters
of credit totaling $6,703,000, which reduce the availability to borrow under
the revolving portion of the Prior Agreement.

The Company had $16.0 million and $20.5 million in borrowings under the
Prior Agreement at December 31, 1999 and 2000, respectively, and $13.8 million
in borrowings at September 30, 2001, which were repaid immediately after the
end of the respective periods.

On January 15, 1998, the Company redeemed all 75,000 shares of its then
outstanding Preferred Stock for a total of $8,029,000, or $107.05 per share
(see note 10). In order to provide the funding necessary to redeem the
Preferred Stock, the Company executed a seven-year Subordinated Credit
Agreement with First Source Financial LLP for $8,000,000 on January 9, 1998.
The remaining $29,000 of funding was provided by the Company's revolving credit
facility. The principal balance is payable in eight consecutive quarterly
installments of $888,889 on the first business day of each quarter commencing
with the first business day of January 2003. A ninth and final payment of
$888,888 is due on the last business day of December 2004. Interest under the
Subordinated Credit Agreement accrues at a fixed rate of 12% per annum and is
payable quarterly in arrears.

Debt outstanding at September 30, 2001, is scheduled to mature by the
following calendar year ends: $1,292,000 in 2001, $1,969,000 in 2002,
$6,525,000 in 2003, and $59,546,000 in 2004, and $104,000 in 2005.

The total interest paid was $4,510,000, $6,094,000, $6,073,000 and
$3,614,000, for the years ended December 31, 1998, 1999 and 2000, and for the
nine months ended September 30, 2001, respectively.

The Company uses interest rate swap agreements to manage exposure to
fluctuations in interest rates. At September 30, 2001, the Company had an
unleveraged swap agreement with First Union with a notional principal amount of
$25,000,000. This agreement was placed on November 22, 2000 with a fixed LIBOR
rate of 6.53% and is settled in cash on a monthly basis. The term of the
agreement is four years, but is cancelable at the option of First Union after
the third year. In December 2001, the swap agreement was reset within our new
banking group at a rate of 6.83% with a four-year term.

F-18

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

8. Debt (Continued)

Effective January 1, 2001, the Company adopted SFAS No. 133, Accounting for
Derivative Instruments and Hedging Activities, which, as amended by SFAS No.
138, establishes accounting and reporting standards for derivative instruments,
including some derivative instruments embedded in other contracts, and for
hedging activities. Upon adoption of SFAS No. 133, the Company recorded a
$704,000 ($422,000 net of tax) transition adjustment in other comprehensive
loss as a cumulative effect of a change in accounting principle. The Company
will reclassify this amount into interest expense over the remaining life of
the interest rate swap. The amount of the transition adjustment that will be
reclassified to earnings over the 12 months following the initial adoption of
SFAS No. 133 will be $180,000.

The Company hedges the cash flows of some of its long-term debt using an
interest rate swap. The Company enters into these derivative contracts to
manage its exposure to interest rate movements by achieving a desired
proportion of fixed rate versus variable rate debt. In an interest rate swap,
the Company agrees to exchange the difference between a variable interest rate
and either a fixed or another variable interest rate, multiplied by a notional
principal amount.

As of September 30, 2001, the Company has recognized the cash flow hedge at
its fair value of $2,084,000 in accounts payable and accrued expenses on the
consolidated balance sheet. The interest rate swap qualifies for cash flow
hedge accounting, therefore, an unrealized loss of $1,380,000 ($829,000 net of
tax), representing the effective portion of the change in its fair value, is
reported in other comprehensive loss and will be reclassified into interest
expense. The ineffective portion of the change in fair value of the swap
qualifying for cash flow hedge accounting is recognized in the consolidated
statements of income in the period of the change. For the nine months ended
September 30, 2001, the swap did not have any ineffectiveness for the cash flow
hedge.

Management believes that the fair value of debt is not significantly
different from what is recorded by the Company, based on comparable market
rates on similar issues.

9. Income Taxes

The domestic and foreign components of income before provision for income
taxes and minority interest were as follows (in thousands):

[Download Table]

Nine Months Ended
Year Ended December 31, September 30,
---------------------- -----------------
1998 1999 2000 2001
------ ------- ------- -----------------

Domestic $4,454 $11,556 $13,401 $20,376
Foreign. 683 743 (289) 864
------ ------- ------- -------
$5,137 $12,299 $13,112 $21,240
====== ======= ======= =======

F-19

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

9. Income Taxes (Continued)

The provision for income taxes was comprised of the following components
(in thousands):

[Download Table]

Year Ended Nine Months Ended
December 31, September 30,
----------------------- -----------------
1998 1999 2000 2001
------ ------- ------ -----------------

Current provision (benefit):....
Federal....................... $1,540 $ 5,352 $4,291 $ 9,215
State......................... 828 1,064 1,893 1,959
Foreign....................... -- (10) (203) 143
------ ------- ------ -------
2,368 6,406 5,981 11,317
------ ------- ------ -------
Deferred provision (benefit):...
Federal....................... (371) (1,227) 606 (1,947)
State......................... (25) 48 (732) (427)
Foreign....................... 211 239 119 119
------ ------- ------ -------
(185) (940) (7) (2,255)
------ ------- ------ -------
Total provision for income taxes $2,183 $ 5,466 $5,974 $ 9,062
====== ======= ====== =======

The provision for income taxes varies from the amount of income tax
determined by applying the applicable U.S. statutory tax rate to pre-tax income
as a result of the following:

[Enlarge/Download Table]

Nine Months Ended
Year Ended December 31, September 30,
---------------------- -----------------
1998 1999 2000 2001
---- ---- ---- -----------------

Statutory U.S. Federal tax rate.............. 35.0% 35.0% 35.0% 35.0%
Increase (decrease) in rate resulting from:
State taxes--net of Federal benefit...... 4.9 4.6 3.9 5.2
Foreign taxes............................ (1.7) 0.2 (0.4) (0.2)
Other--additional provision.............. -- -- 2.8 --
Nondeductible items:
Goodwill amortization.................... 6.1 2.6 2.5 1.2
Other.................................... (1.8) 2.0 1.8 1.5
---- ---- ---- ----
Effective tax rate........................... 42.5% 44.4% 45.6% 42.7%
==== ==== ==== ====

The Company paid income taxes, net of refunds, of $1,996,000, $1,648,000,
$4,100,000 and $2,711,000 for the years ended December 31, 1998, 1999 and 2000,
and for the nine months ended September 30, 2001, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

9. Income Taxes (Continued)

Deferred income taxes arise from temporary differences between the tax
basis of assets and liabilities and their reported amounts in the financial
statements. A summary of the tax effect of the significant components of
deferred income taxes follows (in thousands):

[Enlarge/Download Table]

December 31, September 30,
---------------- -------------
1999 2000 2001
------- ------- -------------

Gross deferred tax liabilities:
Receivables and payables........................................... $19,720 $20,628 $19,536
Investments........................................................ 1,846 1,323 1,546
Other assets....................................................... 1,294 1,016 1,308
Property and equipment............................................. 109 -- --
------- ------- -------
Total deferred tax liabilities................................... 22,969 22,967 22,390
------- ------- -------
Gross deferred tax assets:
Tax credits and net operating loss carryforwards................... (2,708) (2,751) (2,468)
Accrued liabilities................................................ (1,703) (1,431) (1,404)
Cash flow hedge.................................................... -- -- (833)
Allowance for potential contract losses and other contract reserves (1,231) (631) (675)
Property and equipment............................................. -- (195) (75)
------- ------- -------
Total deferred tax assets........................................ (5,642) (5,008) (5,455)
Less: Valuation allowance.......................................... 902 902 902
------- ------- -------
Total deferred tax assets--net................................... (4,740) (4,106) (4,553)
------- ------- -------
Net deferred tax liabilities......................................... $18,229 $18,861 $17,837
======= ======= =======

At September 30, 2001, the Company has state net operating losses of
approximately $13,300,000 that expire beginning 2001 through 2020. At September
30, 2001, the Company had a capital loss carryforward of $2,127,000 that
expires in 2003.

10. Capital Stock, Employee Stock Plan

Common Stock--Class A Common Stock is voting, no par value. The Company has
25,000,000 shares authorized with 4,111,502 shares issued and 1,022,882,
1,033,938 and 1,040,566 shares outstanding at December 31, 1999 and 2000, and
September 30, 2001, respectively. There were 3,088,620, 3,077,564 and 3,070,936
shares of Class A Common Stock held as Treasury Stock at December 31, 1999 and
2000, and September 30, 2001, respectively. At December 31, 1999 and 2000, and
September 30, 2001, there were an additional 37,366 shares of Class A Common
Stock, with a cost value of $640,000, reflected as Treasury Stock in accordance
with Emerging Issues Task Force Abstract 97-14, Accounting for Deferred
Compensation Arrangements where Amounts Earned are Held in a Rabbi Trust and
Invested. These shares are held in a Rabbi Trust to satisfy a defined
contribution pension obligation, to be paid in stock for the benefit of a
senior Company employee.

Class C Common Stock is no par value, nonvoting common stock. At December
31, 1999 and 2000, and September 30, 2001, the Company had 100,000 Class C
Common Stock shares authorized and 71,664 shares issued and outstanding.

F-21

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

10. Capital Stock, Employee Stock Plan (Continued)

Redeemable Class B Common Stock--Class B Common Stock is no par value,
nonvoting stock and is mandatorily redeemable by the stockholder at any time
and by the Company in the event of the involuntary or voluntary termination of
the stockholder's position within the Company at a per share price to be
determined by an independent valuation company. On July 31, 1998, the Company
redeemed 39,156 shares of Class B Common Stock from a former employee for
$2,926,500. On January 6, 2000, the Company redeemed 6,582 shares of Class B
Common Stock from an employee for $566,082. On February 29, 2000, the Company
redeemed 1,000 shares of Class B Common Stock from an outside Director for
$86,060. On December 18, 2000, the Company redeemed an additional 1,000 shares
of Class B Common Stock from an outside Director for $123,240. All of these
shares were placed in Treasury at their redemption value. The Company had
250,000 shares of Class B Common Stock authorized, 80,269 shares issued, and
41,113, 32,531 and 32,531 shares outstanding at December 31, 1999 and 2000, and
September 30, 2001, respectively.

On December 18, 1998, the Board of Directors approved a change to the
Company By-Laws, effective January 1, 1999, to conform Class B Common Stock
dividend rights on a parri-passu basis with Class A and Class C Common Stock.
Prior to this amendment, the Board of Directors paid an annual, per share
dividend on the Class B Common Stock using the prime rate announced
periodically by the Company's primary lender. These dividends were paid
quarterly. The 1998 Class B Common Stock cash dividends totaled $83,200, or
$1.43 per share. Class B Common Stock dividends paid in 1998 totaled $69,200,
whereas dividends payable at December 31, 1998, paid on January 15, 1999,
totaled $14,000.

With respect to liquidation rights, the Class C Common Stock is on a pro
rata parity with the Class A and Class B Common Stock.

Preferred Stock--Each December 31, beginning in 1994, the Company had the
right to require the holders of Preferred Stock to sell all or any part of the
75,000 authorized and issued shares of Preferred Stock for the Redemption
Price, which equated to the greater of (i) the par value plus accrued but
unpaid dividends or (ii) the fair market value of the Preferred Stock. In
December 1997, the Company's Board of Directors chose to exercise this right
and announced its intention to repurchase all of the Preferred Stock shares
based on a valuation performed as December 31, 1997.

On January 15, 1998, the Company redeemed and retired all 75,000 shares of
the Preferred Stock for a total of $8,029,000, or $107.05 per share. In
accordance with the terms of the Preferred Stock, the per share redemption
price was based on a valuation performed by an independent third party as of
December 31, 1997. In order to provide the funding necessary to redeem the
Preferred Stock, the Company executed a seven-year Subordinated Credit
Agreement with First Source Financial LLP for $8,000,000 on January 9, 1998
(see note 8).

Stock Options--The Company has a nonqualified fixed option plan that
reserves shares of Class B Common Stock for issuance to key employees. The
Company has adopted the disclosure-only provisions of SFAS No. 123, Accounting
for Stock-Based Compensation. No compensation cost is recognized for the stock
option plan.

The plan provides that shares granted come from the Company's authorized
but unissued Class B Common Stock. The price of the options granted pursuant to
this plan was not less than 100%

F-22

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

10. Capital Stock, Employee Stock Plan (Continued)

of the fair market value of the shares on the date of grant. On April 15, 1995,
the Company granted options to purchase 19,578 shares at an exercise price of
$27.46 per share. These options vested quarterly over a three-year period from
the date of grant. In July 1998, options to purchase 9,789 shares were
exercised. At December 31, 1998, 1999 and 2000, and at September 30, 2001,
options to purchase 9,789 shares were outstanding and exercisable, and expire
on April 15, 2005. No grants have been made since 1995.

In November 2001, the Board of Directors adopted, and the Stockholders
approved, the 2001 Stock Incentive Plan. No grants under this plan have been
made.

11. Retirement Plans

The Company maintains nonqualified supplemental defined benefit pension
plans for certain retired employees of an acquired company. The weighted
average assumptions used in accounting for the Company's pension plans in 1999,
2000 and 2001 were as follows:

[Download Table]

1999 2000 2001
---- ---- ----

Discount rate................. 8.0% 8.0% 7.5%
Expected return on plan assets 6.0 6.0 6.0
Rate of compensation increase. N/A N/A N/A

The discount rate is the estimated rate at which the obligation for pension
benefits could effectively be settled. The expected return on plan assets
reflects the average rate of earnings that the Company estimates will be
generated on the assets of the plans. The Plans were partially funded beginning
in 1999. The rate of compensation increase reflects the Company's best estimate
of the future compensation levels of the individual employees covered by the
plans and is not applicable, as all covered employees had retired prior to 1998.

F-23

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

11. Retirement Plans (Continued)

The following table sets forth the status of the plans (in thousands):

[Enlarge/Download Table]

Year Ended Nine Months Ended
December 31, September 30,
---------------- -----------------
1999 2000 2001
------- ------- -----------------

Change in benefit obligation:
Benefit obligation at beginning of period....... $ 1,748 $ 1,693 $ 1,707
Interest cost................................... 132 131 98
Actuarial (gain) loss........................... (16) 58 105
Benefits paid................................... (171) (175) (131)
------- ------- -------
Benefit obligation at end of period........... 1,693 1,707 1,779
------- ------- -------
Change in plan assets:
Fair value of plan assets at beginning of period -- 180 203
Employer contribution........................... 351 198 150
Benefits paid................................... (171) (175) (132)
------- ------- -------
Fair value of plan assets at end of period.... 180 203 221
------- ------- -------
Funded status at end of period.................... (1,513) (1,504) (1,558)
Unrecognized actuarial loss....................... 28 83 186
Unrecognized prior-service cost................... 110 79 55
Unrecognized net transition obligation............ 41 20 5
------- ------- -------
Net amount recognized at end of period........ $(1,334) $(1,322) $(1,312)
======= ======= =======

The components of net periodic pension cost for the Company's defined
benefit plans are provided in the following table (in thousands):

[Enlarge/Download Table]

Year Ended Nine Months Ended
December 31, Septeber 30,
-------------- -----------------
1998 1999 2000 2001
---- ---- ---- -----------------

Interest cost on projected benefit obligation........ $134 $132 $131 $ 98
Net amortization of prior-service cost and transition
obligation......................................... 53 52 54 42
---- ---- ---- ----
Net periodic pension cost........................ $187 $184 $185 $140
==== ==== ==== ====

The Company maintains two qualified defined contribution plans, which cover
substantially all employees, that comply with Section 401 of the Internal
Revenue Code. Under these plans, the Company's stipulated Basic Matching
Contribution matches a portion of the participants' contribution based upon a
defined schedule. Contributions are invested by an independent investment
company in one or more of several investment alternatives. The choice of
investment alternatives is at the election of each participating employee. The
Company's contributions to the plans were approximately $2,091,000, $2,317,000,
$2,420,000 and $1,917,000 for the years ended December 31, 1998, 1999 and 2000,
and for the nine months ended September 30, 2001, respectively.

F-24

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

11. Retirement Plans (Continued)

The Company maintains nonqualified defined contribution supplemental
retirement plans for certain key employees. Under these plans the Company
accrues a stated annual amount and may also include interest at the greater of
10% or the Company's annual rate of return on investments. The Company incurred
expenses associated with these plans of $75,000 for each of the years ended
December 31, 1998, 1999 and 2000, and for the nine months ended September 30,
2001.

The Company also maintains a nonqualified deferred compensation plan for
certain key employees. Under this plan, eligible employees may defer up to 18%
of qualified annual compensation. Employee contributions to this plan were
approximately $1,729,000, $1,911,000, $1,875,000 and $1,598,000 for the years
ended December 31, 1998, 1999 and 2000, and nine months ended September 30,
2001, respectively.

On December 18, 1998, the Board of Directors approved the establishment of
a qualified Employee Stock Ownership Plan (ESOP), effective January 1, 1999,
for the benefit of substantially all of the Company's U.S. domestic-based
employees. The ESOP is non-leveraged and will be funded entirely through
Company contributions based on a percentage of eligible employee compensation,
as defined in the plan. Participants must be employees of the Company or
eligible Company subsidiaries and must meet minimum service requirements to be
eligible for annual contributions. The ESOP specifies a five-year vesting
schedule over which participants become vested in the Class A Common Stock
allocated to their participant account. The amount of the Company's annual
contribution to the ESOP is at the discretion of the Company's Board of
Directors.

For the years ended December 31, 1999 and 2000, the Company contributed and
allocated to participants' accounts $1,363,000 and $1,419,000, respectively,
worth of Class A common stock and cash. The Board of Directors has authorized
an additional ESOP contribution for the year ended December 31, 2001. It is
anticipated that shares attributable to the year ended December 31, 2001
commitment will be issued to the ESOP during the second quarter 2002, after an
independent appraisal of the stock value as of December 31, 2001, has occurred.
At September 30, 2001, an obligation to fund $910,000 was accrued.

As required under Statement of Position No. 93-6, Employers' Accounting for
Employee Stock Ownership Plans, compensation expense is recorded for shares
committed to be released to employees based on the fair market value of those
shares in the period in which they are committed to be released. The difference
between cost and fair market value of the released shares, which was $1,326,000
and $1,142,000, for the year ended December 31, 2000 and the nine months ended
September 30, 2001, respectively, is recorded in additional paid in capital.

12. Investments

GSE Systems, Inc.--The Company and its designees hold stock in GSE Systems,
Inc. (GSE), which was created by the merger of one of the Company's
majority-owned subsidiaries and two other entities in April 1994. In January
2000, the Company purchased 116,959 additional shares of common stock in GSE,
increasing the Company's ownership to 17.61%. The Company's ownership
percentage of GSE was 17.53% at September 30, 2001. The Company's and its
designee's ownership percentage of GSE was 20.22% at September 30, 2001.

F-25

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

12. Investments (Continued)

The Company also holds notes receivable from GSE totaling $4.9 million as
of September 30, 2001. Of this amount, $3.9 million is convertible into GSE
preferred stock. The Company intends to convert the $3.9 million note into
preferred stock and the balance of the notes is due to be repaid in December
2001.

During the nine months ended September 30, 2001, the Company determined
that it had obtained significant influence with respect to GSE. As a result,
for the nine months ended September 30, 2001, the Company began accounting for
its investment in GSE using the equity method and recorded $469,000 in equity
earnings for the nine months ended September 30, 2001. Additionally the Company
has restated prior year amounts and has recorded $219,000, $16,000,
($1,555,000) in equity earnings (losses) for the years ended December 31, 1998,
1999 and 2000, respectively. The after-tax impact to net income as a result of
this restatement was $130,000, $10,000, and ($934,000) for the years ended
December 31, 1998, 1999 and 2000, respectively. The related impact to basic and
diluted earnings per share was $0.11, $0.01, and ($0.82) for the years ended
December 31, 1998, 1999 and 2000, respectively.

Vosper-ManTech Limited--On September 7, 1995, MASI U.K. Limited, a
majority-owned subsidiary of the Company, and Vosper Thornycroft Limited
entered into a Joint Venture agreement to form Vosper-ManTech Limited (the
Joint Venture). The Joint Venture is owned 40% by MASI U.K. Limited and 60% by
Vosper Thornycroft Limited. In 2000, the Joint Venture began work on a ten-year
follow-on contract providing outsourcing of the Government Communications
Headquarters (GCHQ) for the United Kingdom's logistics and engineering services.

The Company's interest in the Joint Venture is accounted for using the
equity method. The Company recorded $692,000, $794,000, $393,000 and $400,000
in equity earnings for the years ended December 31, 1998, 1999 and 2000, and
for the nine months ended September 30, 2001, respectively.

The components of investments are as follows (in thousands):

[Download Table]

December 31, September 30,
------------- -------------
1999 2000 2001
------ ------ -------------

GSE Systems, Inc....... $2,753 $1,698 $2,167
Vosper-ManTech Limited. 1,861 2,112 2,199
------ ------ ------
Total investments.. $4,614 $3,810 $4,366
====== ====== ======

13. Commitments and Contingencies

Payments to the Company on cost-reimbursable contracts with the U.S.
Government are provisional payments subject to adjustment upon audit by the
DCAA. Audits through 1999 have been completed and resulted in no material
adjustments. The audits for 2000 through 2001 are not expected to have a
material effect on the results of future operations.

The Company is involved in certain legal proceedings, claims and disputes
arising from the normal course of business and has litigation pending under
several suits; however, management

F-26

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

13. Commitments and Contingencies (Continued)

believes that the ultimate resolution of these matters will not have a material
effect on the Company's financial position or results of operations.

In February 2000, a judgment was entered against the Company in favor of
Boston Properties, a real estate management firm, in the amount of $1,175,000
for unpaid rent under a lease held by Boston Properties with Global-InSync,
Inc. (Global). Global is the successor to a business sold by the Company in
1996 (see note 16). The Company provided a financial guarantee to Boston
Properties on the lease to facilitate the timely closing of this business sale.
Boston Properties and Global extended the original lease without notice to the
Company. The legal action sought to recover unpaid rent beyond the term of the
original lease. After losing the appeal, the Company paid this judgment and
other related expenses in August 2000.

The Company leases office space and equipment under long-term operating
leases. A number of the leases contain renewal options and escalation clauses.
At September 30, 2001, aggregate future minimum rental commitments under these
leases are as follows (in thousands):

[Download Table]

Office
Space Equipment Total
------- --------- -------

Three months ending December 31, 2001 $ 1,929 $ 1,191 $ 3,120
Year ending:
December 31, 2002.................. 6,288 3,069 9,357
December 31, 2003.................. 5,333 2,508 7,841
December 31, 2004.................. 4,752 1,934 6,686
December 31, 2005.................. 4,214 1,523 5,737
Thereafter....................... 8,193 1,269 9,462
------- ------- -------
Total............................ $30,709 $11,494 $42,203
======= ======= =======

Office space and equipment rent expense totaled approximately $6,303,000,
$7,441,000, $9,578,000 and $7,715,000 for the years ended December 31, 1998,
1999 and 2000, and for the nine months ended September 30, 2001, respectively.

14. Acquisitions

Each of the following acquisitions has been accounted for as a purchase,
and accordingly, the operating results of each of the acquired entities have
been included in the Company's consolidated financial statements since the
respective dates of acquisition. The aggregate amount of goodwill and other
intangibles resulting from the excess of the respective purchase prices over
the fair market value of net assets acquired in 1999 was approximately
$3,558,000.

REVIVE Technologies, Inc.--On April 16, 1999, the Company acquired certain
assets and liabilities of REVIVE Technologies, Inc. (REVIVE) for a cash
purchase price of $500,000 and a note payable of $1,105,000 (interest accrues
at a rate of 6.50%), due and payable in four equal quarterly installments
beginning in July 1999. REVIVE specializes in the automated conversion of
legacy mainframe databases.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

14. Acquisitions (Continued)

Advanced Development Group, Inc.--On January 5, 1999, the Company acquired
all of the outstanding stock of Advanced Development Group, Inc. (ADG) for a
purchase price of $2,000,000 in the form of a note payable over two years
(interest accrues at the prime rate). This acquisition also provided for
additional cash payments, not to exceed $5,000,000, to be made over the three
years following the closing, based on the attainment of certain earnings
levels. In May 2000, the Company paid $495,000 against this obligation.

ADG specializes in the development of interactive multimedia and distance
learning training products. It is the leading Interactive Multimedia
Instruction (IMI) developer for the U.S. Army. In addition, ADG has developed a
proprietary IMI Course Builder Program(C) to enable the development of
high-quality, low-cost training products that incorporate sophisticated
animation, graphics and video.

15. Discontinued Operations

On September 26, 2001, the Company executed a formal plan to exit certain
commercial and foreign lines of business that no longer contribute to the core
competencies. The businesses include the Australian-based software solutions
consulting business, the United Kingdom-based bank remittance processing
business, the China-based consulting business, the U.S.-based environmental
consulting and remediation business and the U.S.-based application-hosting
business. Although some of these ventures show promise and growth, these
businesses are oriented towards commercial customers and do not contribute to
the core competencies on which the Company is currently focused. All of these
businesses are expected to be sold, and all of the dispositions are expected to
be completed on or before June 30, 2002. Based on independent valuations,
market comparable information and interest expressed in these businesses, an
estimate has been provided for the likely net gains and losses to income
expected from these businesses through the estimated date of disposal. As a
result, in accordance with APB Opinion No. 30, Reporting the Results of
Operations--Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions,
results of operations have been classified as discontinued and prior periods
have been restated. The Company has segregated the net assets and liabilities
held for sale, recorded all current and expected future losses and deferred all
gains expected to be realized upon disposal of the respective entities. The
amounts the Company will ultimately realize could differ in the near term from
the amounts estimated in arriving at the loss on disposal of the discontinued
operations.

F-28

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Year Ended December 31, 1998, 1999 and 2000 and Nine Months Ended September 30,
2001

15. Discontinued Operations (Continued)

Revenues and losses from discontinued operations are as follows (in
thousands):

[Enlarge/Download Table]

Nine Months Ended
Year Ended December 31, September 30,
----------------------------- -----------------
1998 1999 2000 2001
-------- --------- -------- -----------------

Income statement data:
Revenues............................. $ 85,976 $ 97,503 $ 63,389 $ 37,587
Costs and expenses................... (87,034) (101,428) (72,554) (48,390)
-------- --------- -------- --------
Operating loss....................... (1,058) (3,925) (9,165) (10,803)
Minority interest.................... (716) (652) 1,333 851
Income tax benefit................... 506 1,850 3,165 3,419
-------- --------- -------- --------
Loss from discontinued operations net
of tax and minority interest....... $ (1,268) $ (2,727) $ (4,667) $ (6,533)
======== ========= ======== ========

The estimated net loss on disposal of discontinued operations recorded for
the nine months ended September 30, 2001 was $5,890,000, net of an income tax
benefit of $3,818,000. This loss included a provision for anticipated closing
costs and net operating losses through the estimated date of disposal of
$3,852,000, net of an income tax benefit of $2,404,000.

The Company's Australian-based software solutions consulting business
disposed of its Local Government business on June 30, 2000 and recorded a loss
on the disposal of $719,000, net of tax. The revenues and operating losses of
this business unit were not significant for the periods presented.

16. Loss From Investment Default

On September 16, 1996, the Company sold certain assets of the Systems
Integration business to Global in exchange for notes receivable of $1,956,000,
due and payable in full over the next five years, and stock in their parent
company, Global Intellicom, Inc. as follows: 49,778 shares of common stock and
convertible exchangeable preferred stock with a carrying value of $3,080,000,
based upon an independent third-party valuation as of the date of sale.

At December 31, 1997, Global was in default on its note obligations but had
proposed a payment plan satisfactory to the Company to cure this default. In
1998, Global was unable to discharge the payment plan and defaulted on the full
note obligations in early 1999. As a result of the general financial condition
of Global Intellicom, Inc. and a sharp decline in the trading value of their
stock, it is the belief of the Company management that the value of all
investments in Global Intellicom, Inc. are permanently impaired. A pre-tax
charge of $5,230,000 ($3,138,000 after tax) was recorded against 1998 earnings,
representing the total recorded value of all notes and stock in Global and
Global Intellicom, Inc., respectively.

* * * * * *

F-29

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[INSIDE BACK COVER ART]

The background of the page is solid red with a black outlined circle in the
center of the page. Inside the circle is a collage of photo images including
(in clockwise order from the top): an American flag, a computer screen, a
submarine, a computer control room, a chemist in a protective mask, a soldier
working with automated test equipment on the back of a military vehicle, a man
working at a computer workstation, a fighter jet, and a man working with
automated test equipment. In the center of the collage is a closed circuit TV
security camera. Above the circle a caption reads, "ManTech International
Corporation." A caption below the circle reads "A continuing tradition of
service and solutions on critical national defense programs for the U.S.
Intelligence Community and Department of Defense."

424B4 Last Page of 112 TOC 1st Previous Next ↓Bottom Just 112th
[GRAPHIC]

MANTECH LOGO
MANTECH INTERNATIONAL CORPORATION
The back page is white with the ManTech logo in the center of the page written
in solid black lettering blending into white-on-red lettering, divided with
white lines.

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘424B4’ Filing	Date	First	Last	Other Filings

	12/31/05	108		10-K, 11-K, NT 11-K
	6/1/05	51		8-K
	4/15/05	104
	12/31/04	21	108	10-K, 11-K, 11-K/A
	12/31/03	108		10-K, 10-K/A, 11-K, 11-K/A, 5, NT 11-K
	12/31/02	108		10-K, 11-K, 5, 5/A
	9/30/02	49		10-Q
	6/30/02	109		10-Q, 10-Q/A
	6/15/02	35	94
	4/22/02	52
	3/4/02	3		S-8
	2/12/02	1
Filed on:	2/8/02
	2/7/02	1		S-1MEF
	12/31/01	21	108	10-K
	12/17/01	33	98
	12/15/01	35	94
	12/5/01	65
	11/16/01	83
	11/15/01	52	84
	10/31/01	51
	9/30/01	5	110
	9/26/01	109
	9/18/01	37
	9/11/01	10	44
	8/20/01	59
	8/17/01	53
	7/1/01	35	93
	6/30/01	35	93
	6/1/01	52
	1/1/01	83	100
	12/31/00	5	110
	12/18/00	103
	12/4/00	59
	11/22/00	99
	10/27/00	98
	9/30/00	8	82
	6/30/00	110
	2/29/00	103
	1/6/00	103
	12/31/99	30	110
	12/30/99	66
	7/29/99	52
	6/7/99	84
	4/26/99	84
	4/16/99	108
	1/15/99	103
	1/5/99	109
	1/1/99	103	106
	12/31/98	31	110
	12/18/98	103	106
	7/31/98	103
	1/15/98	99	103
	1/9/98	99	103
	1/1/98	58	88
	12/31/97	81	110
	9/16/96	110
	8/20/96	74
	8/19/96	74
	9/7/95	107
	4/15/95	104
				List all Filings

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Filing Submission 0000950168-02-000108 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Mantech International Corp – ‘424B4’ on 2/8/02

On: Friday, 2/8/02 · Accession #: 950168-2-108 · File #: 333-73946

Prospectus — Rule 424(b)(4)Filing Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Prospectus — Rule 424(b)(4)
Filing Table of Contents