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1/57

PALEY

ATrom.ErB

T L W

H A M P D E N L A N E

T H

FLOOR

MD 20814

f x

IN

THE

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MARYLAN D

(Southern Division)

B R E T T K I M B E R L I N ,

et al.

Plaintiff,

v.

Case No .

8:15-cv-000723 GJH

H U N T O N &

W I L L I A M S ,

L L P ,

et al

Defendants.

MOTION

TO DISMISS BY DEFENDANTS GREG HOGLUND . STRATIO

INFORMATION T ECHNOLOGY .

L L C F/K/A

HB GARY

FEDERAL .

LLC ) , AND

MANTECH

INTERNATIONAL

CORPORATION

Defendants, Greg Hoglund ( Hoglund ), Stratio Information Technology, L L C (f/k/a H B

Gary Federal,

L L C

( Stratio ), and ManTech International Corporation ( ManTech ) (together

the HB Gary Defendants ), by and through counsel, Glenn

M .

Cooper,

Trish M .

Weaver, D

Jack B l um , and Paley, Rothman, Goldstein, Rosenberg, Ei g & Cooper, Chartered, move th

Court pursuant

to Fed. R. C iv . Proc. 12(b)(6) and 9(b) to dismiss the Complaint of

Plaintiff,

Bret

Kimber l in ( Kimberlin ),

for failure to state a claim on which relief may be granted and failur

to plead fraud with particularity. In support

thereof,

the HB Gary Defendants direct the Court t

their Memorandum of Points and Authorities in support of this

Mot ion ,

which is f i led herewith.

W H E R E F O R E , the HB Gary Defendants respectfully

request

that the Court:

A . Grant this

Mot ion

and dismiss

Kimberlin's

Complaint with prejudice; and

B .

Grant such further

relief

as the Court may deem

appropriate.


2/57

P A L E Y , R O T H M A N , G O L D S T E I N ,

R O S E N B E R G , E IG &

C O O P E R ,

CH T D .

By: /s_D. Jack

Blum

Tilenn

M . Cooper,

#00977

Patricia M . Weaver, #10951

D . Jack

B l um ,

#07241

4800 Hampden Lane, Sixth Floor

Bethesda, Maryland 20814

Telephone: (301) 951-9360

Facsimile: (301) 654-7354

gcooper@,palevrothman.com

tweaver@,paleyrothman. com

j

blum@,paleyrothman, com

ttorneys for Defendants Greg Hoglund Stratio

nformation Technology LLC and ManTech

nternational Corporation

CERTIF ICATE OF SERVICE

I hereby certify

that

on September 4, 2015, a copy of the foregoing Mot ion to Dismiss B

Defendants Greg Hoglund, Stratio Information Technology, L L C

(f/lc/a H B

Gary Federal,

LLC

and ManTech International Corporation was served via the Court's

C M / E C F

system to al

counsel of record, and a copy ofthe foregoing was also sent by first-class mail to the fol lowing

pro

se parties:

Brett Kimberl in

8100 Beech Tree Road

Bethesda, Maryland

20817

Wil l i am Hoge

20 Ridge Road

Westminster, Maryland 21157

lsl

D . Jack Blum

D . Jack

Blum


3/57

IN THE UNITED STATES DISTRICT COURT

FOR THE

DISTRICT OF MARYL AND

(Southern Division)

B R E T T K I M B E R L I N ,

et al

Plaintiff,

v.

CaseNo.: 8:15-cv-000723 GJH

H U N T O N &

W I L L I A M S ,

L L P , et al

Defendants.

[PROPOSED ORDER

Upon

consideration of the Motion to Dismiss By Defendants Greg Hoglund, Stratio

Information Technology, LL C (f/lc/a HB Gary Federal, L LC ) , and ManTech

Internationa

Corporation, any Opposition

thereto,

and the

arguments

advanced at any hearing thereon, it i

this

day of . . 2015, by the U.S

District

Court for the District of Maryland:

O R D E R E D ,

that

the Motion to Dismiss By

Defendants

Greg Hoglund, Strati

Information Technology, L L C

(f/lc/a

HB Gary Federal, LLC ) , and ManTech Internationa

Corporation is G R A N T E D ; and it is further

O R D E R E D , that

all of the claims

asserted

against Defendants Greg Hoglund, Strati

Information Technology, L L C (f/lc/a HB Gary Federal, LLC ) , and ManTech

Internationa

Corporation in this action are

D I S M I S S E D

W I T H P R E J U D I C E .

Judge George J. Hazel

U . S . District Court for the District of Maryland


4/57

IN THE UNITED STATES DISTRICT COURT

FOR

T HE DISTRICT OF MA RY LA ND

Southern Division)

B R E T T K I M B E R L I N , el al., )

Plaintiff, )

v. ) CaseNo.:

8:15-cv-000723

GJ H

H U N T O N

& W I L L I A M S , L L P ,

et al., )

Defendants.

)

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO

DISMISS

BY DEFENDANTS

GREG

HOGLUND STRATIO INFORMATION

TECHNOLOGY ,

L L C F/K/A HB GARY

F EDERAL ,

LLC ) ,

AND

MANTECH

INTERNATIONAL CORPORATION

TABLE

OF CONTENTS

I. Introduction 1

I N C O R P O R A T E D

A R G U M E N T

1

A

Kimberlin's Claims Are Barred by the

Statute

of Limitations 1

B .

Kimberlin Does Not Allege Cognizable Legal Injury 1

C.

Kimberlin Fails to Plausibly Plead the

Substantive

Elements of his

Claims 1

II. Statement Regarding Parties 2

III.

Standard

of Review 4

IV . Kimberlin Fails to

State

a Claim Upon Which Relief May Be Granted Under

the Maryland Uniform

Fraudulent Conveyances

Act 5

A . Kimber lin is Not a Creditor of the HB Gary Defendants

Because

He

Fails to Plausibly Allege Any

Substantive Cause

of Action 5

B . Kimberlin Has Not Alleged Any

Constructive

Fraud Claim Under

M U F C A

Because

He Does Not Allege that ManTech's Asset

Purchase

Was Without Fair

Consideration

6

C . Kimber lin's Actual Fraud Allegations are Not Plausible and Lack the

Required Particularity 6

H A M P D E N L A N E ^ ' Hoglund is Not a

Proper Party

to Kimberlin's

Fraudulent Conveyance

T H

F L O O R Claim 10

MD 2 814

v. Conclusion 12

f x

w paleyrothman com


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I.

Introduction.

The

heated rhetoric and conspiracy theories

that

constitute

Kimberlin's Complaint

fail

to state any

claim

against the HB

Gary

Defendants on

which relief

can be granted. As is set

forth

at length in the Motions to Dismiss fi led by Defendants

United

States Chamber of

Commerce

(Docket No. 40) and Palantir Technologies, Inc. (Docket No. 50),

which

are

incorporated and adopted by reference herein (the Incorporated

Motions ), Kimber l in

has

not suffered any compensable

injury, failed

to

fi le

his

Complaint within

the applicable

limitation

periods, and has not

plausibly pled

the elements of any of the statutory or tort

causes of actions that he asserts. See Docket N o . 40-1 at §§ 1-3; Docket N o . 50-1 at § 3.

Those claims must be dismissed.

Rather than burdening the Court

with

restating the same arguments set forth in the

Incorporated

Motions,

the H B

Gary

Defendants, for purposes

of judicial

economy, adopt and

direct

the Court to the pertinent arguments set forth in the Incorporated

Motions.

1

This

M ot ion

instead addresses the substance of

Kimberlin's

Count II for fraudulent conveyance against the

H B

Gary

Defendants relating to the sale ofthe

assets

o f

H B

Gary/Federal

(as

identified

by

Kimber l in

in his Complaint) to

ManTech.

L ike his other wi ld allegations,

Kimberlin's

fraudulent conveyance count

fails

to state a claim on which relief can be granted.

Kimberl in

does not allege

that

the sale of

assets

by any of the H B

Gary

Defendants to

ManTech

was

without

fair

consideration. Nor does

Kimb er l in

allege plausibly, much less

with

the required

particularity,

that

any of the H B

Gary

Defendants engaged in actual fraud in conducting the

asset

sale. Rather,

Kimber l in

has pled the occurrence of a common

commercial

transaction in

which one business purchases the assets, but not the liabilities, of another. Because

Kimberl in

1

The H B

Gary

Defendants request and reserve the right to adopt and incorporate arguments

set forth in Motions to Dismiss fi led by any other Defendant in this action.


6/57

has not plausibly alleged facts from which the Court could

find

that

this transaction

was

fraudulent, his Count II fai ls to state a claim on which relief may be granted.

Only two factual allegations in the Complaint are about

Defendant

ManTech. The

first, paragraph 9, alleges that ManTech is a cyber-security company and acquired HB Gary,

Inc.'s

assets

in 2012. The second factual allegation, paragraph 49, alleges

that

ManTech

purchased

the assets of H B Gary, Inc. with knowledge that HB Gary, Inc. had been involved

in illegal activities and structured the purchase to avoid liabilities. Based on

those

alleged

facts, Kimberlin

alleges

that ManTech conspired to

make

a

fraudulent

conveyance. As set

forth herein, Count 2 fails to

state

a claim for

fraudulent

conveyance and should be dismissed.

N o

other

claim in the Complaint is directed at ManTech.

II.

Statement Regarding Parties.

2

Kimberlin's Complaint fails to properly or clearly identify the parties against whom

his Complaint is

asserted.

The Complaint's caption lists as a party-defendant HB

Gary/Federal. The section of

Kimberlin's

Complaint regarding the

parties

to this action

does

not identify or provide any additional information about the HB Gary/Federal entity listed

in the caption. See Complaint at f f 1-20.

Kimber l in

later identifies HB Gary/Federal as an

amalgamation of two separate and legally-distinct

entities

which Kimberlin identifies as HB

Gary

Federal and H B Gary. Complaint at pg. 16 f 5.

3

2

This Statement is offered for clarification purposes due to the lack of proper party

identification in Kimberlin 's Complaint. Regardless of who the parties to the

events

alleged

in the Complaint are, Kimberlin's Count II (along with

each

and every other

count

averred

against the HB Gary Defendants in his Complaint) fails to state a claim on which relief may

be granted.

3

At

page

12 of his Complaint, Kimberlin

abandons

the sequential numbering of his

allegations and restarts his

numbered

paragraphs from the beginning at

1.

- 2 -


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Kimberlin's Complaint is primarily aimed at alleged actions involving Team

Themis.

Kimber l in

identifies HB Gary/Federal as a defendant to five (5) different counts

that

are

based

on the alleged plan developed by Team Themis, which plan

never came

to

fruition.

4

The exhibits to his Complaint identify HB Gary Federal as HB Gary Federal,

L L C on documents relating to Team Themis. Complaint, at Exhibit E (alleged proposal to

Hunton & Wi l l i ams, L L P from Berico Technologies,

L L C ,

Palantir Technologies, Inc., and

H B Gary Federal L L C ) ; Exhibit RR (alleged teaming agreement between Berico

Technologies, L L C and HB Gary Federal L L C to submit a proposal to Hunton &

Wil l iams,

L L P ) .

H B Gary, Inc. is not listed as one of the parties submitting the proposal or

participating in the teaming agreement. Complaint at

E x .

E, RR.

Although Kimber l in seeks

to treat the two legally-distinct entities of H B Gary Federal,

L L C

and HB Gary, Inc. as a single entity that he calls HB Gary/Federal, he

cannot

by slight

of hand or slip of allegation transform two entities into one.

G i ven

that the bulk of the

Complaint

is aimed at the alleged activities of Team Themis, this M ot i on is fi led on behalf of

H B Gary Federal,

L L C .

The party whose assets were sold to ManTech, on the other hand, was H B Gary, Inc.

See Exhibit 1 hereto, Form 10-Q

dated

May 4, 2012 fi led by ManTech International

Corporation, at pg. 27 ( On

Apr i l

2,

2012,

we completed the acquisition of certain assets of

H B G a r y , Inc. ).

5

HB Gary, Inc. subsequently changed its corporate name to Terracina

4

The five counts involving Team Themis are: Count 1 (Conspiracy to Violate Ci v i l Rights

Act), Count 3 (Conspiracy to Invade Privacy - Intrusion Upon Seclusion), Count 6

(Commission

of and Conspiracy to Commit

R IC O ) ,

Count 7 (Conspiracy to Interfere with

Business Relations and Prospective Business Advantage), and Count 8 (Intentional Infliction

of Emotional Distress).

5

The Court may properly take judicial notice of

documents

fi led with the Securities and

Exchange Commission,

In re Municipal Mortg.

Equity,

LLC, Securities and Derivative


8/57

Ventures, Inc. ( Terracina ). Terracina has not been served with Kimberlin's Complaint and

is not before the Court at this time.

III. Standard of

Review.

This

Mot ion under Rule 12(b)(6)

tests

the legal

sufficiency

of Kimberlin's Complaint.

Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006). While the Court accepts

Kimberlin's

well-pleaded factual allegations as true,

that

deference is inapplicable to legal

conclusions

and [tjhreadbare recitals o f the elements of a cause of action, supported by

mere conclusory statements, do not suffice. Ashcroft v. Iqbal, 556 U . S . 662, 678 (2009). In

order to survive this

Mot ion , Kimber l in

must

state[]

a plausible

claim

for

relief

that

permit[s] the court to infer more than the mere possibility of misconduct. Id. at 679. The

required well-pleaded facts in

Kimberlin's

Complaint must raise a right to relief above the

speculative level and be more than merely consistent with the occurrence of the alleged

fraudulent conveyance. Bell Atl. Corp. v. Twombly, 550 U.S . 544, 555, 557 (2007). In

assessing this

Mot ion ,

the Court may consider documents

that

are integral to the Complaint

and also may consider extrinsic facts that are susceptible to judicial notice. Am. Chiro. Ass n

v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004); Brooks v. Arthur, 626 F.3d 194,

200 (4th Cir . 2010).

Kimberlin's

Count II alleges

that

the H B Gary Defendants engaged in actual fraud in

conducting the asset sale. Complaint at % 66. Allegations of fraud are subject not only to

Twombly s and Iqbal s

plausibility

standard; but also to Fed. R. Civ . Proc. 9(b)'s particularity

requirement. Under Fed. R.

Civ .

Proc. 9(b)'s standard, Kimber l in is required to set for th 'the

who, what, when, where, and how of the alleged fraud' before access to the discovery process

Litigation, 876 F.Supp.2d 616, 626 n.7 (D. M d. 2012), and may therefore consider this

evidence in deciding this

Mot ion .

Brooks, 626 F.3d at 200.

- 4 -


9/57

should

be granted.' Murphy v. Capella Educ. Co., 589 Fed.

A p p x .

646, 652 (4th Cir . 2014)

(quoting United States ex rel. Wilson v. Kellogg Brown Root, 525 F.3d 370, 379 (4th Cir .

2008)).

IV. Kimberlin Fails to State a Claim Upon Which Relief May Be Granted Under the

Maryland Uniform Fraudulent

Conveyances

Act.

A .

Kimber l in is Not a Creditor of the H B Gary Defendants Because He Fails to

Plausibly

Allege A n y Substantive Cause of Act ion.

A t the outset, Kimberlin's Count II must be dismissed because he does not plausibly

allege any other substantive cause of action against the H B Gary Defendants and is, therefore,

not a creditor of the H B Gary Defendants. As described in the Incorporated

Motions,

Kimber l in affirmatively alleges that he discovered his causes of action by March 11, 2011

(see Complaint at \ 46), rendering his claims time-barred, has not suffered any

legally-

cognizable

injury, and does not plausibly allege the substantive elements of the causes of

action

he attempts to plead. Even if any of Kimberlin's claims survived the

M ot i on

to

Dismiss stage (though they clearly should not),

Kimber l in does

not and cannot advance

those

claims against ManTech or HB Gary, Inc. (the parties to the conveyance). Kimber l in plainly

is not and was not a creditor or either the buyer or seller to the asset purchase.

The

Maryland

Uniform Fraudulent Conveyances Act ( M U F C A ) provides a claim

only

for creditors. M d . Code, CommT. Law Art . , §§ 15-209, 15-210. A creditor is a

person who has any claim, whether matured or unmatured, liquidated or unliquidated,

absolute, fixed, or contingent. M d. Code,

CommT.

Law

Art . ,

§ 15-201(d).

Kimber l in

has

not plausibly alleged that he is a creditor of the HB Gary Defendants because his Complaint

does

not show that he has any claim against any of the H B Gary Defendants. Id.

Accordingly, Kimberlin's Count II must be dismissed for lack of standing.


10/57

B .

Kimber l in

Has Not Alleged Anv Constructive Fraud Claim Under

M U F C A

Because He Does Not

Allege that ManTech's

Asset Purchase Was Without

Fair Consideration.

M U F C A

provides constructive and actual fraud fraudulent conveyance claims.

Each

of

M U F C A ' s

four constructive fraud claims requires that the conveyance is made without. .

. fair

consideration.

M d .

Code, CommT.

Law Art.,

§§ 15-204, 15-205, 15-206, 15-208.

Kimber l in does not allege anywhere in his Complaint that the asset sale to ManTech

di d

not provide for the payment of

fair

consideration for the purchased assets. Because

Kimber l in

has

failed

to plead, much less plausibly plead, this essential element of a

M U F C A

constructive fraud

claim,

his Count II must be dismissed.

Beyond

the

absence

of any averment that the asset sale lacked

fair

consideration,

Kimber l in

has also completely

failed

to allege other elements of his

M U F C A

claim. He has

not alleged that H B Gary, Inc. (which is not a party to this case) was insolvent at the time of

the sale or was rendered insolvent by the sale. M d. Code,

CommT.

Law

Art.,

§ 15-204. He

has not alleged that H B Gary, Inc. was engaged in business with unreasonably small capital,

M d .

Code, CommT. La w

Art.,

§ 15-205; in fact, Kimber l in alleges the opposite by averring

that Defendant

H B

Gary/Federal shuttered its operations and was no longer engaging in any

business. Complaint at | 49. Nor has he alleged that H B Gary, Inc. intended or believed it

would

incur debts beyond its ability to pay after the closing of the asset sale. M d . Code,

CommT.

Law Art., § 15-206.

Kimber l in

has simply alleged none o f the elements of a

M U F C A constructive fraud claim.

C. Kimberlin's

Actual Fraud Allegations are Not Plausible and Lack the Required

Particularity.

Kimber l in

also

falls

far short of pleading an actual fraud

M U F C A

claim. See Md .

Code, CommT. Law Art ., § 15-207. Although Kimberlin's actual fraud claim is subject to


11/57

both the

Twomblyllqbal

plausibility

standard and Fed. R. Ci v. Proc. 9(b)'s particularity

requirement, it meets neither test and must be dismissed.

The sole averments in

Kimberlin's

Complaint regarding the H B

Gary

Defendants'

asset

sale are as

follows:

49. Upon

information and belief, in 2012, Defendant HB Gary/Federal

shuttered its operations in order to

limit

its

liability

regarding the Team Themis

activity. It then intentionally

sold

its

assets

to Defendant Mantech to protect

them

from liability.

Defendant Mantech purchased

these assets

on or about

Apr i l

1, 2012,

with fu l l

laiowledge

that

HB Gary/Federal had been

involved

with

the

illegal

Team Themis activities and

knowingly

structured its purchase

to

l imi t

its purchase to

assets

and to

avoid liabilities

66.

Defendants H B Gary/Federal,

Hoglund

and Mantech conspired to and

did

fraudulently, knowingly and intentionally transfer

assets

belonging to HB

Gary/Federal

in order to

shield

them

from

legal process in this case, and

created a sales agreement to

specifically limit l iabil i ty

of Mantech for the

i l legal

conduct alleged above by

H B

Gary/Federal.

67.

Defendants

H B Gary/Federal

were advised by letter in

March 2011 that

they was

[sic]

facing legal action

with

regard to the

il legal

conduct alleged

above.

Upon

receiving that letter, it

[sic]

initiated action to transfer

assets

to

Defendant Mantech to keep them beyond the reach of

Plaintiff,

a future

creditor,

thereby causing him harm.

Complaint

at f f 49, 66-67. These averments fal l far short of what is required for actual fraud.

There is no allegation of any misrepresentation made or concealment engaged in by any

ofthe

H B Gary

Defendants.

Kimber l in fails

to identify any misleading, deceptive, or false

statement

or action by any of the

H B

Gary

Defendants in connection

with

the

asset

sale, much

less the who, what, when, where, and how of the alleged fraud as Fed. R. Civ . Proc. 9(b)

requires. Murphy, 589

Fed.Appx.

at 652 (internal quotation omitted).

In

fact, the

judicially-noticeable

evidence

ofthe Form 10-Q

quarterly report

fi led with

the U . S . Securities and Exchange Commission by

ManTech

(a publicly-traded corporation)

- 7 -


12/57

shortly after the asset sale demonstrates the exact opposite by plainly stating the terms of the

transaction:

O n

Apr i l 2, 2012, we completed the acquisition of certain

assets

of

H B G ary ,

Inc.

(HBGary) .

The acquisition was completed through an

asset

purchase

agreement (HBGary Purchase Agreement) dated February 27, 2012, by and

among a subsidiary of

ManTech

International

Corporation, H B G a r y ,

Inc., and

the shareholders of H B G ary .

ManTech

funded the

acquisition with

cash on hand. The

preliminary

purchase

price was $23.8

mil l ion

and may increase or decrease depending on the

finalization

o f the post-closing

working

capital adjustment.

Form

10-Q dated M ay 4, 2012, at pg.

17,

attached as

Exhibit

1.

This

was not a transaction

that took place in the shadows through fraud or deceit; it was a transaction that was ful ly

disclosed

to the government and the general

public.

Nor is

there

any allegation by

Kimberl in

that the H B

Gary

Defendants are related parties, that H B

Gary,

Inc. retained any interest i n the

assets

conveyed, and

obviously there

was

significant

consideration

paid. Kimber l in

must do

more than plead facts merely consistent

with

a fraudulent conveyance, Twombly, 550

U.S.

at 557, but

fails

to do so because nothing

that

he pleads in his

Complaint plausibly

suggests

anything

other than an arms-length transaction between

commercial

parties.

The fact that one purpose of the asset sale may have been to

limit liability

is

insufficient

to allege a fraudulent conveyance. In

Christian v. Minn. Mining Mfg. Co.,

126

F.Supp.2d

951 (D. M d . 2001), this Court rejected a claim

that

3 M engaged in a fraudulent

conveyance when it

sold

its

silicone

implant

division

even though 3M

acloiowledge[d] that

the fear of future lawsuits factored into its decision to divest.

Id.

at 961. The Court in

Christian

also notably ruled

that

the presence in the

asset

purchase agreement of an

indemnification clause limiting the buyer's post-sale

liabil i ty

did not give rise to a fraudulent

- 8 -


13/57

conveyance. Id. Christian makes clear that a motivation to avoid future liabil i ty does not

give rise to a fraudulent conveyance.

Kimberlin's allegation that the H B Gary Defendants entered into the asset sale to

protect HB Gary, Inc.'s assets from liabil i ty is nonsensical and implausible. Complaint at f f

49,

66. An y rights that

Kimber l in

may have

would

not be enforced by an in rem proceeding

directly against H B Gary, Inc.'s assets, but would instead be enforced by obtaining an in

personam money judgment against H B

Gary,

Inc. itself. Kimberlin's averment that the HB

Gary

Defendants

sold

the assets, Complaint at f 49, is

telling.

A sale is merely the

exchange of one set of

assets

for a different type of

asset,

money. Because

Kimber l in does

not, and cannot, allege facts demonstrating that the asset sale was for less than

fair

consideration, Kimber l in cannot plausibly allege that the asset sale was a fraudulent

conveyance that hindered

Kimber l in

or any other creditor or potential creditor in any way.

Nor does the fact that ManTech allegedly took actions to limit its liabil i ty, see

Complaint at ff 49, 66, give rise to a fraudulent conveyance. The general rule under

Maryland law is that ManTech as the acquirer of another corporation's assets does not also

acquire the predecessor's debts and liabilities. Academy of IRM v. LVI Environmental

Services, Inc., 344 Md. 434, 451, 687 A.2 d 669, 677 (1997).

Kimber l in would

have this

Court turn the general rule on its head by ruling that a fraudulent conveyance necessarily

occurs when a successor avails itself of the traditional rule that a purchaser of

assets does

not

also purchase liabilities. In the absence of plausible and particularized allegations of fraud,

this is not the law of Maryland. Id.

Kimber l in

does not allege any misrepresentation or concealment and does not allege

well-pleaded facts from

which

the Court

could f i nd

a fraudulent conveyance.

Kimberlin's

- 9 -


14/57

averments amount to, at

best,

a claim that the H B Gary Defendants exchanged one set of

assets

(those

formerly used in HB Gary, Inc.'s business) for a more liquid asset of cash.

Again ,

there is no allegation that

H B Gary,

Inc. did not receive

fair

consideration for the sale

of its assets.

6

This did not hinder creditors; i f anything it made H B Gary, Inc. more

susceptible to collection efforts by replacing potentially i l l iquid business

assets

with cash.

Because

Kimber l in fails

to allege, much less allege

with

particularity, any actual fraudulent

representation or concealment and fails to plausibly aver that the asset sale hindered any

creditor,

Kimber l in

has not

stated

a

M U F C A

actual fraud claim.

D.

Hoglund

is Not a Proper Party to

Kimberlin's

Fraudulent Conveyance

Claim.

Even

i f

Kimberlin's

allegations

stated

a plausible fraudulent conveyance claim

with

respect to the asset sale, which they do not, Hoglund in his individual capacity is not a proper

party to that claim.

The only allegation pertinent to Count II regarding Hoglund is that Hoglund conspired

in

the

asset

sale. Complaint at

66. First, Hoglund cannot conspire

with

H B

Gary,

Inc., as

Maryland law is well-settled that an employee cannot conspire with his employer. Marmott

v. Md. Lumber Co., 807 F.2d 1180, 1184 (4th

Cir.

1986).

Further, Kimber l in does not claim that any of

Hoglund's

personal assets were

transferred or that Hoglund received any of the

assets

that were

sold.

Accordingly, there is no

relief that can be obtained against Hoglund on the fraudulent conveyance claim. M U F C A

permits the Court to have the conveyance set aside or levy on or garnish the property

conveyed as

i f

the conveyance was not made.

M d .

Code,

CommT.

Law

Art.,

§ 15-209(a)(l)-

(2). It also permits the Court to restrain the defendant fro m disposing of his property and

6

Exhibit 1 reflects a substantial preliminary sales price.

-

10-


15/57

appoint a receiver to take charge of the property. M d . Code,

CommT.

Law Art., § 1 5 -

210(b)(l)-(2).

None of those forms of relief are applicable to

Hoglund

because Kimber l in has

not alleged that any of Hoglund's property has been conveyed or that Hoglund received any

of H B Gary, Inc.'s property.

Nor can Kimber l in seek damages from Hoglund for conspiracy (if one was even

possible) relating to any fraudulent conveyance

because

Kimberlin's claims against any ofthe

H B Gary Defendants have not matured through the entry of a judgment in his favor. Van

Royen v. Lacey, 262 Md . 94, 99, 277 A.2 d 13, 15 (1971) ( [A] general creditor, without a

l ien,

has no legal right or interest in the debtor's property and cannot be legally injured by any

action

by way of conspiracy on the part of the debtor and others to dispose of his property in

order to evade payment of his general obligations. ).

Kimberlin's

status as a an alleged

potential creditor lacking a judgment lien is not, . . ., sufficient to maintain a suit for

conspiracy to defraud. Id. at 17.

7

As set forth earlier, Kimber l in has no val id claims against any of the H B Gary Defendants

and is not even a potential creditor.


16/57

V . Conclusion.

For

the

reasons

set forth above, and in the Incorporated

Motions,

each and every

cause

of action alleged by

Kimber l in

against the HB

Gary

Defendants should be dismissed for

failure

to state a plausible

claim

on

which relief

may be granted and failure to plead fraud

with

particularity.

P A L E Y , R O T H M A N , G O L D S T E I N ,

R O S E N B E R G , EIG & C O O P E R , C H T D .

B y : /s D . Jack

B l u m

Glenn M .

Cooper, #00977

Patricia

M .

Weaver,

#10951

D . Jack

B l u m , #07241

4800 Hampden Lane,

Sixth Floor

Bethesda,

Maryland

20814

Telephone: (301) 951-9360

Facsimile:

(301) 654-7354

gcooper(fl),paleyro thman.com

tweaver @paleyrothman.

com

blum @paleyrothman.

com

Attorneys

for

Defendants Greg Hoglund Stratio

Information Technology

LLC, and

ManTech

International Corporation

-

12-


17/57

EXHIBIT 1


18/57

http://www.sec.gov/Archives/edgar/data/892537/000089253712000

10-Q

mant-3312012xl0q.htm

F O R M

10-Q

UNITED

STATES

SECURITIES AND

E X C H A N G E COMMISSION

WASHINGTON, D.C. 20549

F O R M 10-Q

(Mark

One)

x

QUARTERLY

REPORT PURSUANT

T O

SECTION

13 OR

15(d)

OF

TH E SECURITIES

E X C HA N GE A C T OF 1934

For the quarterly period ended March 31,2012

or

o

TRANSITION REPORT PURSUANT

TO

SECTION

13 OR 15(d) OF TH E SECURITIES

E X C HA N GE

A C T OF

1934

For the

transition

period

from

to

Commission File No. 000-49604

ManTech

International

Corporation

(Exact name of registrant as specified

in its

charter)

Delaware

(State or

other jurisdiction

of

incorporation

or

organization)

22-1852179

(I.R.S.

Employer

Identification

No.)

12015

Lee Jackson

Highway,

Fairfax, V A

(Address

of

principal

executive offices)

22033

(Zip

Code)

(703) 218-6000

(Registrant's

telephone

number, including area

code)

Indicate by check mark whether the registrant (1) has

filed

all reports required to be

f i led

by Section 13 or 15(d)

ofthe

Securities

Exchange

A ct

of 1934

during

the preceding 12 months (or for such shorter period

that

the registrant was required to

file

such reports),

and (2) has been subject to such

filing

requirements for the

past

90

days, x

Yes

o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, i f any, every

Interactive Data

File

required to be submitted and posted pursuant to

Rule

405 of

Regulation

S-T (232.405 of this chapter)

during

the

preceding 12 months (or for such shorter period that the registrant was required to submit and post such files), x Yes o No

Indicate

by

check mark whether

the

registrant

is a

large accelerated

filer,

an

accelerated

filer,

a

non-accelerated

filer,

or a

smaller

reporting company. See definitions

of

large accelerated

filer,

accelerated

filer,

and smaller reporting company in Rule

12b-2

ofthe

Exchange

A ct (Check

one):

Large

accelerated

filer x

Accelerated

filer o

Non-accelerated

filer

o (Do not check

i f

a smaller reporting company) Smaller reporting company o

Indicate by check mark

whether the registrant is a shell

company

(as defined inRule

12b-2

ofthe Exchange

Act), o Yes x No

As of

M ay

2, 2012 there were outstanding 23,718,551 shares o f our Class A common stock and 13,192,845 shares o f our Class B

common stock.

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T-3.31.2012- 10Q


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http://www.sec.gov/Ai-chives/edgai7data/892537/000089253712000

M A N T E C H INTERNATIONAL

CORPORAT I ON

F O R M

10-Q

FO R T H E QUART E R ENDED March 31, 2012

INDEX

Page

No.

PART

I

-

FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Condensed Consolidated Balance

Sheets at March

31. 2012 and December 31. 2011 3

Condensed Consol idated Statements o f Income for the Three Months Ended

March

31.

2012

and 2011 4

Condensed Consolidated

Statements o f

Comprehensive Income for the Three Months Ended

March

31. 2012

and

2011 5

Condensed Consolidated

Statements of Cash

Flows for the Three Months Ended

March 31 .

2012 and

2011

6

Notes to Condensed Consolidated Financial Statements 7

Item

2.

Management's

Discussion

and Analysis

of

Financial Condition and Results

of

Operations 18

Item 3. Quantitative and Qualitative Disclosures about Market Risk 23

Item

4.

Controls and Procedures 23

Part

H

-

O T H E R

INFORMATION

Item 1.

Legal

Proceedings 25

Item IA . Risk Factors 25

Item 6. Exhibits 25

2

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

M A N T E C H INTERNATIONAL CORPORAT I ON

CONDENSED CONSOL I DAT E D B A L A N C E SHEETS

(In

Thousands

Except

Share Amounts)

(unaudited)

March

31, December 31,

2012 2011

ASSETS

CURRE NT

ASSETS:

Cash

and cash equivalents $

119,277 $ 114,483

Receivables—net

569,591

540,468

Prepaid expenses

and other

23,346

33,115

Total Current

Assets

712,214

688,066

Property and equipment—net

35,341

47,435

Goodwil l

842,890

808,455

Other intangibles—net

177,193

177,764

Employee

supplemental savings plan

assets

24,597 25,026

Other

assets

12,487 13,460

T O T A L

ASSETS 1,804,722 $

1,760,206

LIABILITIES

AND

ST OCKHOL DE RS E QUI T Y

CURRE NT

LIABILITIES:

Accounts payable and accrued

expenses

$

308,844 $

280,277

Accrued salaries and related

expenses

78,577

72,467

Billings

in excess of revenue earned

20,648

34,956

Total Current Liabilities

408,069 387,700

Long-term

debt 200,000 200,000

Accrued retirement

25,726

26,155

Other long-term

liabilities

9,075

7,871

Deferred income

taxes—non-current

51,045

49,223

T O T A L

LIABILITIES

693,915

670,949

COM M I T M E NT S A ND CONTINGENCIES

S T O C K H O L D E R S

EQUITY:

Common

stock, Class

A—$0.01

par value; 150,000,000 shares authorized; 23,938,897 and

23,882,331

shares

issued at

March

31, 2012 and December 31, 2011; 23,694,784 and

23,638,218 shares outstanding at

March

31 , 2012 and December 31, 2011

239

239

Common

stock, Class

B—$0.01

par value; 50,000,000

shares

authorized; 13,192,845 and

13,192,845

shares

issued and outstanding at

March

3 1,

2012 and December

31,

2011

132

132

Additional paid-in

capital

409,787 406,083

Treasury stock,

244,113

and

244,113 shares

at cost at

March

3 1,

2012 and December 31,

2011

(9,158)

(9,158)

Retained

earnings

710,169 692,272

Accumulated other comprehensive income (loss)

(362)

(311)

T O T A L

ST OCKHOL DE RS

EQUITY

1,110,807

1,089,257

T O T A L

LIABILITIES

AND

ST OCKHOL DE RS

E QUI T Y

1,804,722

$

1,760,206

See

notes

to condensed consolidated

financial

statements.

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M A N T E C H INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Thousands Except Per Share Amounts)

(Unaudited)

Three months ended

March

31,

2012 2011

RE VE NUE S

$ 676,509

$

700,864

Cost o f services

582,867

599,767

General

and

administrative

expenses

47,947 45,242

OPERATING INCOME

45,695

55,855

Interest expense

(4,148)

(3,970)

Interest

income

72

64

Other income

(expense), net

15

96

INCOME

F R O M

OPERATIONS BEFOR E INCOME TAXES

41,634

52,045

Provision for

income

taxes

(15,992)

(20,142)

NET INCOME

$ 25,642 $ 31,903

BASIC EARNINGS

PER SHARE:

Class A basic earnings per share

$

0.70 $

0.87

Weighted

average

common

shares

outstanding

23,642

23,206

Class B basic earnings per share

$

0.70 $

0.87

Weighted

average

common

shares

outstanding

13,193

13,275

DILUTED

EARNINGS

PER SHARE:

Class A diluted earnings per share

$

0.69 $

0.87

Weighted

average

common

shares

outstanding

23,716

23,357

Class B diluted earnings per share

$

0.69 $

0.87

Weighted

average common shares outstanding 13,193 13,275

See

notes to

condensed consolidated financial

statements.

4

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M A N T E C H INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In

Thousands)

(Unaudited)

Three

months ended

March

31,

2012

2011

NET INCOME

$ 25,642

$

31,903

OT HE R

COM PRE HE NSIVE I NCOM E (LOSS):

Translation adjustment,

net

of

tax (51)

(17)

Total other comprehensive income (loss)

(51)

(17)

COMPREHENSIVE INCOME

$

25,591 $

31,886

See

notes to

condensed consolidated

financial

statements.

5

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M A N T E C H INTERNATIONAL

CORPORAT I ON

CONDENSED CONSOLIDATED

STATEMENTS OF CASH

FLOWS

(In Thousands)

(Unaudited)

Three

months ended

March

31,

2012 2011

CASH FL OWS F R O M OPERATING ACTIVITIES:

Net income

$ 25,642 $

31,903

Adjustments to reconcile net income to net cash provided by operating activities:

Stock-based compensation

2,367 2,202

Excess tax benefits from the exercise of

stock

options

(43)

(203)

Deferred income

taxes

2,029 (1,092)

Depreciation and amortization

21,724

7,252

Change in

assets

and liabilities—net o f effects

from

acquired businesses:

Receivables—net

(22,114)

(88,998)

Prepaid

expenses

and other

8,360

4,877

Accounts payable and accrued expenses

22,177 25,434

Accrued

salaries and related

expenses

4,344

13,635

Billings in excess of revenue earned

(14,400)

15,336

Accrued

retirement

(429)

(399)

Other

2,592

996

Net cash

flow

from

operating activities

52,249

10,943

CASH

F L O W S F R O M

INVESTING ACTTVITDSS:

Acquisition

o f

businesses—net

of cash acquired

(38,435)

(21,640)

Purchases of property and equipment

(3,688)

(5,991)

Disposition

o f

a

business

1,799

Investment

in

capitalized

software for internal use (573) (561)

Net cash

flow

from investing

activities

(40,897) (28,192)

CASH FL OWS F R O M

FINANCING

ACTTVITIES:

Dividends

paid

(7,716) —

Proceeds from exercise o f stock options

1,115 5,241

Excess

tax

benefits from

the exercise o f stock options

43

203

Treasury stock

acquired

(44)

Net cash

flow

from financing

activities (6,558)

5,400

NE T

C H A N G E

TN

CASH AND CASH

EQUIVALENTS

4,794

(11,849)

CASH AND CASH EQUIVALENTS, BEGINNING O F PERIOD 114,483

84,829

CASH AND CASH

EQUIVALENTS,

END

O F

PERIOD $ 119,277 $

72,980

SUPPLEMENTAL CASH

F L O W

INFORMATION

Cash

paid

for income

taxes

$ 509 $

564

Cash

paid for interest

$ 296 $

174

Noncash

financing

activities:

Employee Stock Ownership Plan Contributions

$ 563 $

498

See

notes

to condensed consolidated

financial statements.

6

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NOTES TO CONDENSED CONSOL I DAT E D FINANCIAL

STATEMENTS

March

31,

2012

UNAUDITED

1.

Introduction

and Overview

ManTech International Corporation (depending on the circumstances, ManTech Company we our ours or us ) is a

leading provider of innovative technologies and solutions for mission-critical national security programs for the intelligence

community; the Departments of Defense,

State,

Homeland Security, Energy and Justice,

including

the Federal Bureau of Investigation

(FBI); the space community; and other U.S. federal government customers. Our services include the following solution sets that are

aligned

with the long-term needs of our national security clients: command, control, communications, computers, intelligence,

surveillance and reconnaissance (C4ISR) lifecycle support; cyber security; global logistics support; intelligence/counter-intelligence

support; information technology (IT) modernization and sustainment; systems engineering; test and evaluation; and health IT. We

support major national missions, such as military readiness, terrorist threat detection, information security and border protection. Our

employees

operate primarily in

the United

States,

as wel l as

in

numerous locations internationally.

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial

statements

have been prepared pursuant to the rules and

regulations of the Securities and Exchange Commission (SEC). Certain information and note disclosures normally included in the

annual financial

statements,

prepared in accordance with accounting principles generally accepted in the United

States

o f

America,

have been condensed or omitted pursuant to

those

rules and regulations. We recommend that you read these unaudited condensed

consolidated financial statements in conjunction with the audited consolidated financial statements and related

notes

included in our

Annual Report on Form

10-K

for the

fiscal

year ended December 31, 2011, previously filed with the SE C. We believe that the

unaudited condensed consolidated financial

statements

in this Form 10-Q reflect all adjustments that are necessary to fairly present

the financial

position,

results of operations and cash flows for the interim periods presented. The results o f operations for such

interim

periods are not necessarily indicative

of

the results that can be expected for the fiill year.

3. Acquisitions

Our

acquisitions have been accounted for using the acquisition method of accounting under the Accounting Standards

Codification

(ASC)

805, Business Combination.

Evolvent Technologies Inc.-On January 6, 2012, we completed the acquisition

of Evolvent

Technologies, Inc. (Evolvent). The

results of

Evolvent's

operations have been included in our consolidated financial statements since that date. The acquisition was

completed through an equity purchase agreement dated January 6, 2012, by and among ManTech, shareholders and warrantholders of

Evolvent, and its

parent,

and Prudent Management,

L L C

in its capacity as the sellers' representative.

Evolvent provides services in clinical IT, clinical business intelligence, imaging cyber security, behavioral health, tele-health,

software development and systems integration. Its systems and processes enable

better

decision-making at the point of care and full

integration

of

medical information across different platforms. At January 6, 2012, Evolvent had 189 employees.

This

acquisition

wi l l

enable ManTech to expand its customer relationships and deliver IT solutions through Evolvent's existing

relationships with the Department of Defense health organizations, the Veterans Administration and the Department of Health and

Human Services.

ManTech funded the acquisition with cash on hand. The preliminary purchase price was $39.0 million and may increase or

decrease depending on the finalization o f post-closing working capital adjustments. The equity purchase agreement did not contain

provisions for contingent consideration. Pursuant to the equity purchase agreement, $8.0 million was placed into an escrow account to

satisfy potential indemnification

liabilities

of

Evolvent.

The escrow period

wi l l

expire 36 months after the purchase closing

date.

At

March 31,

2012, the balance in the escrow account was $8.0 million.

During the three months ended March 31, 2012, the Company incurred $0.2 million of

acquisition

costs. These costs are included

in

general and administrative expense in our income statement.

The preliminary purchase price of $39.0 million was allocated to the underlying assets and liabilities based on their fair value at

the date of acquisition. The

following

information

represents

the preliminary purchase price allocation, as we are still in the process

of

reviewing the

working

capital accounts at the date of acquisition for potential

adjustments

to the purchase price . Total

assets

were

$46.7

million,

including goodwill and intangible assets recognized in connection

with

the acquisition, and total

liabilities

were $8.6

million.

Included in total assets were $3.7 million in acquisition related intangible assets. We recorded goodwill of $34.2

million,

which is not deductible for tax purposes. Recognition of

goodwill

is largely attributed to the highly skilled employees and the value

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paid

for companies

providing

IT services and solutions to the federal government

healthcare sector.

7

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In

allocating the preliminary purchase price, we consider among other factors, analyses of

historical

performance and

estimates

of

future perfonnance of Evolvent's contracts. The components of other intangible

assets

associated with the acquisition were

customer relationships and backlog valued at $3.4 million and $0.3 million, respectively. Customer contracts and related

relationships

represent

the underlying relationships and

agreements

with Evolvent's existing customers. Customer relationships and

backlog are amortized over their estimated useful lives

o f

20 years and

1

year, respectively, using the pattern

of

benefits method. The

weighted-average

amortization

period for the intangible

assets

is 18.5 years.

Worldwide Information Network Systems Inc.-On

November 15, 2011, we completed the acquisition of Worldwide

Information Network Systems, Inc.

(WINS).

The results of WENS' operations have been included in our consolidated financial

statements since

that date.

The acquisition was completed through a stock purchase

agreement

dated October 26, 2011, by and among

a

subsidiary

of ManTech

International Corporation,

WINS

and its sole shareholder.

WENS is a provider of IT solutions

with

network engineering and cyber security technical expertise to the Department of

Defense, Department of

State

and other agencies.

WINS'

largest customer is the Defense Intelligence

Agency

(DIA)

through its prime

position

on the Solutions for the Information Technologies Enterprise

(SITE)

Indefinite

Delivery/Indefinite

Quantity contract

vehicle.

At November

15, 2011,

WINS

had 199 employees

of

which

96% held security clearances.

This acquisition,

consistent

with

our long-term strategy,

wi l l

allow

us to broaden our footprint in the high-end defense and

intelligence

markets. The addition of

WINS'

IT

capabilities,

and its prime position on the

D IA

SITE

and other contracts

wi l l enhance

our positioning with important customers and further our growth prospects.

ManTech

funded

the acquisition with cash on hand. The purchase price was $90.4 million. The stock purchase

agreement

did not

contain

provisions for contingent consideration. Pursuant to the stock purchase

agreement,

$9.0

million

was placed into an escrow

account to satisfy potential

indemnification liabilities

of

WESTS.

The escrow period

wi l l

expire

18

months after the purchase closing

date.

A t

March

31,

2012, the balance

in

the escrow

account

was $9.0

million.

During

the three months ended

March

31, 2012, the Company incurred $0.1 million

o f

acquisition costs. These costs are included

in

general and administrative expense

in

our income statement.

The purchase price of $90.4 million was allocated to the underlying

assets

and liabilities based on their

fair

value at the

date

of

acquisition. Total

assets

were $100.5 million,

including goodwill

and intangible

assets

recognized in connection

with

the acquisition,

and total

liabilities

were $10.1

million.

Included in total

assets

were $18.7

million

in acquisition related intangible

assets.

We

recorded

goodwill

of $62.5

million, which

wi l l

be deductible for tax puiposes over

15

years, assuming

adequate

levels o f taxable

income.

Recognition of

goodwill

is largely attributed to the highly

skilled

employees and the value paid for companies supporting

high-end defense, intelligence and homeland security markets.

In allocating the purchase price, we consider among other factors, analyses of

historical

performance and estimates of future

performance of WENS' contracts. The components o f other intangible

assets

associated with the acquisition were customer

relationships and backlog valued at $18.0

million

and $0.7

million,

respectively. Customer contracts and related relationships

represent

the underlying relationships and

agreements

with WENS'

existing customers. Customer relationships and backlog are

amortized

over their estimated useful lives of

20

years and 1 year, respectively, using the pattern of benefits method. The weighted-

average amortization period for the intangible

assets

is 19.3 years.

TranTech Inc.

-On

February 11, 2011, we completed the acquisition of

TranTech,

Inc. (TranTech). The results of TranTech's

operations have been included in our consolidated financial statements since that

date.

The acquisition was completed through a stock

purchase

agreement

dated February

11,

2011, by and among

ManTech

International Corporation, TranTech and its sole shareholder.

TranTech provides information technology, network and cyber security services to the federal government. AtFebruary

11,

2011,

TranTech had 57 employees.

The acquisition allows us to continue extending our presence in the defense, security and intelligence communities, and to offer

comprehensive solutions through a prime

position

on the Defense Information Systems

Agency

E N C O R E

II contract.

During the three months ended

March

31, 2011, the Company incurred $0.3 million

o f

acquisition costs. These costs are included

in

general and administrative expense in our income statement.

ManTech funded the acquisition with cash on hand. The purchase price o f

$21.5

million was allocated to the underlying

assets

and liabilities based on their

fair

values at the

date o f

acquisition. Total

assets

were $23.8 million,

including goodwill

and intangible

assets

recognized in connection

with

the acquisition, and total

liabilities

were $2.3 million. Included

i n

total

assets

were $5.0 million

in

acquisition related intangible

assets.

We recorded

goodwill

of $14.6

million, which

wi l l

be deductible for tax purposes over 15

years, assuming

adequate

levels

of

taxable income.

Recognition

of

goodwill

is largely attributed to the highly

skilled

employees and

the value paid for companies supporting high-end defense, intelligence and homeland security markets.

In

allocating

the purchase price, we consider among other factors, analyses

of

historical

performance and

estimates

o f

future

of

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performance o f TranTech's contracts. The components of other intangible assets associated

with

the acquisition were customer

relationsMps

and backlog valued at $4.6

million

and $0.4

million,

respectively. Customer contracts and related relationsMps

represent the underlying relationsMps and agreements

with

TranTech's existing customers. Customer relationsMps and backlog are

amortized over their estimated useful lives of 20

years

and 1 year, respectively, using the

pattern

of benefits method. The weighted-

average

amortization period for the intangible

assets

is 18.5 years.

4.

Earnings

Per

Share

Under

A S C

260, Earnings

per

Share, the two-class method is an

earMngs

allocation formula that determines earnings per

share

for each class o f common stock according to dividends declared (or accumulated) and participation rights in undistributed earMngs.

Under that method, basic and diluted earMngs per share data are presented for each class

of

common stock.

In

applying the two-class method, we determined that undistributed earMngs should be allocated equally on a per share basis

between Class A and Class B common stock. Under the Company's Certificate of Incorporation, the holders of the common stock are

entitled to participate ratably, on a share-for-share basis as

if

al l shares of common stock were of a single class, in such dividends as

may be declared by the Board of Directors. During the firs t

quarter

of 2012, we declared and paid a dividend of $0.21 per

share

on

both classes of common stock.

Basic earnings per

share

has been computed by

dividing

net income available to common stockholders by the weighted average

number of shares of 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 in wMch the shares were outstanding. Diluted earMngs per

share

has been computed

in

a manner consistent

with

that

of basic earMngs per

share

while

giving

effect to all potentially dilutive common

shares that

were

outstanding during each period.

The weighted average number

of

common

shares

outstanding is computed as follows (in thousands):

Numerator for net income per Class A and Class B

common stock:

Distributed earMngs

Undistributed earMngs

Net income

Three months

ended

March 31,

2012 2011

$ 7,745 $ —

17,897 31,903

$ 25,642 $ 31,903

Numerator for basic net income Class A common stock

Numerator for basic net income Class B common stock

$ 16,458 $

$ 9,184 $

20,294

11,609

Numerator for diluted net income Class A common stock

Numerator for diluted net income Class B common stock

$ 16,476 $

$ 9,166 $

20,342

11,561

Basic

weighted average common shares

outstanding

Class A common stock

Class

B common stock

23,642

13,193

23,206

13,275

Effect

of

potential exercise

of

stock options

Class

A common stock

Class

B common stock

Diluted weighted average common shares outstanding

- Class

A

Diluted weighted average common shares outstanding

- Class B

74

23,716

13,193

151

23,357

13,275

For the tMee months ended

March

31, 2012 and 2011, options to purchase 2.7 million and 1.9 million

shares,

respectively, were

outstanding but not included in the computation of diluted earMngs per share because the options' effect would have been

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anti-dilutive.

For the tMee

months

ended

March

31, 2012 and 2011,

shares

issued

from

the exercise of stock options were 37

thousand and

173

thousand, respectively.

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5.

Receivables

We

deliver

a

broad array o f information technology and

techMcal

services solutions under contracts

with

the

U.S.

government,

state

and

local

governments and

commercial

customers. The components

of

contract receivables are

as follows

(in

thousands):

December 31,

March 31,2012 2011

Bil led

receivables

$ 429,580

$

422,954

Unbilled

receivables:

Amounts billable

126,084

101,997

Revenue recorded in excess of funding

17,292

19,982

Retainage

6,610

5,264

Allowance for doubtful accounts

(9,975)

(9,729)

Total

receivables, net

$ 569,591 $

540,468

Amounts billable

consist

principally

of amounts

to be billed within

the next month. Revenues recorded in excess of funding are

billable

upon receipt of contractual amendments

or

other modifications. The retainage

is billable

upon completion of the contract

performance and approval of

final

indirect expense

rates

by the government. Accounts receivable at

March

31,

2012,

are expected

to

be substantially collected

within

one year except for approximately $1.4

million, of wMch

amount 90.6%

is

related

to

receivables

from

direct sales to the U.S. government. The remainder is related to receivables

from

contracts in wMch we acted

as a

subcontractor

to other contractors.

The Company

does

not believe it has sigMficant exposure

to

credit

risk

as accounts receivable and the related unbilled amounts

are primarily due from the U.S. government. The allowance for doubtful accounts

represents

the Company's exposure to compliance

issues, contractual issues and bad

debt

related to prime contractors.

6. Property and Equipment

Major

classes of property and equipment are summarized as

follows (in

thousands):

December 31,

March 31,2012 2011

FurMture

and

eqmpment

$ 92,596

$

88,623

Leasehold improvements

23,865

23,345

116,461 111,968

Less:

Accumulated depreciation and amortization

(81,120)

(64,533)

Total

property and eqMpment, net

$ 35,341

$

47,435

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7.

Goodwill and Other

Intangibles

The changes

in

the

carrying

amounts

of

goodwill

during

the year ended December

31, 2011

and the period ended

March

31,2012

are as follows

( in

thousands):

Balance at December

31,

2010

Additional

consideration for the acquisition

o f QinetiQ North

America's Security and Intelligence Solutions

business

Additional

consideration

for

the acquisition o f

M T C S C ,

Inc.

Acquisition-TranTech

Acquisition-WINS

Other

Balance

at

December

31,

2011

Additional

consideration

for

the acquisition

of WINS

Acqui s ition-Evo lvent

Balance

at March

31,2012

Other intangible

assets

consisted ofthe

following

(in

thousands):

Goodwill

Balance

729,558

148

2,694

14,601

62,242

(788)

808,455

212

34,223

842,890

March 31,2012

December

31,

2011

Gross

Gross

Carrying

Amount

Accumulated

Amortization

Net Carrying

Amount

Carrying

Amount

Accumulated

Amortization

Net Carrying

Amount

Other intangible

assets:

Contract and program

intangibles

$ 246,782

$ 79,367 $ 167,415 $ 243,082 $ 75,351

$ 167,731

Capitalized

software

cost

fo r

internal use 27,749 18,001 9,748 27,231 17,230 10,001

Capital

software cost

for

sale

3,729 3,729

3,729 3,729

Other

58

28 30 58

26 32

Total

other intangibles,

net

$ 278,318

$ 101,125 $ 177,193 $ 274,100 $ 96,336

$ 177,764

Aggregate amortization expense

relating to

intangible

assets forthe three

months ended

March

31,

2012 and 2011 was $4.8

million

and $5.2

million,

respectively. We estimate

that

we

w i l l

have the

following

amortization expense for the future periods

indicated

below

( in

thousands):

For

the

remaining

nine months ending December 31, 2012

Year

ending:

December 31, 2013

December 31, 2014

December 31, 2015

December 31,

2016

December 31, 2017

$ 14,228

$ 18,226

$ 16,475

$ 14,749

$ 12,768

$ 11,408

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8. Long-term

Debt

Long-term

debt

consisted

of

the

following

(in

thousands):

December

31,

March 31,2012

2011

Revolving

credit

facility

$ — $

—

7.25% senior unsecured

notes

200,000 200,000

Long-term

debt

$ 200,000 $ 200,000

Revolving Credit Facility-We

maintain a credit

agreement with

a syndicate of lenders led by Bank of

America, N . A ,

as

administrative

agent.

The credit

agreement

provides for a $500.0

million revolving

credit

facility,

with

a $25.0

million

letter

of

credit

sublimit

and a $30.0 million swing line loan sublimit. The credit

agreement

also contains an accordion

feature

that permits the

Company to

arrange

with the lenders for the

provision

of

up

to $250.0 million in additional commitments. The maturity

date

for the

credit

agreement

is October 12, 2016.

Borrowings under the credit

agreement

are collateralized by substantially

a ll

the

assets of ManTech

and its

Material

Subsidiaries

(as defined

in

the credit

agreement)

and bear interest at one

of

the

following

variable

rates

as selected by the Company at the time of

borrowing:

a

London

Interbank

Offer

Rate

(LIBOR)

based

rate

plus market-rate

spreads

(1.25%

to 2.25% based on the Company's

consolidated

total leverage ratio) or Bank of

America's

base rate

plus market spreads (0.25% to 1.25% based on the Company's

consolidated total leverage ratio).

The

terms

of the credit

agreement

permit prepayment and termination o f the loan commitments at any time, subject to certain

conditions.

The credit

agreement

requires the Company to comply

with

specified

financial

covenants,

including

the maintenance of

certain leverage ratios and a certain

fixed

charge coverage ratio. The credit

agreement

also contains various covenants, including

affirmative

covenants

with

respect to certain reporting requirements and maintaining certain business activities, and negative

covenants

that,

among other things, may

limit

or impose restrictions on our

ability

to incur liens, incur additional indebtedness, make

investments, make acquisitions and undertake certain additional actions. As of

March

31, 2012, we were in compliance

with

our

financial

covenants under the credit

agreement.

We

had no outstanding balance on our credit

facility

at

March

31,

2012 and December

31, 2011.

The maximum additional

available borrowing under the credit

facility

at

March

31, 2012 was $498.9 million. As of

March

31, 2012, we were contingently

liable

under

letters o f

credit totaling $1.1 million, which reduced our availability to borrow under our credit

facility.

The

following

table summarizes the activity under our

revolving

credit

facility

for the

three

months ended

March

31,

2012 and

2011

(in

thousands):

Three

months

ended

March 31,

2012 2011

Borrowing under

revolving

credit

facility

$ 8,000

Repayment

o f

borrowings under

revolving

credit

facility

$ (8,000)

7 25 Senior Unsecured Afoto-Effective Apri l

13,

2010, the Company issued $200.0 million of 7.25% senior unsecured

notes

in

a private placement that were resold inside the United

States

to qualified institutional buyers in reliance on Rule 144A under the

Securities Act of 1933, and outside the

United

States to

non-U.S.

persons in reliance on Regulation S under the Securities A ct o f

1933.

A portion of the proceeds was used to pay down the balance on the revolving credit

facility

incurred to pay for the Sensor

Technologies

Inc. acquisition.

Pursuant to the

terms

of a

registration rights

agreement

entered into in connection

with

the issuance

of

the 7.25% senior unsecured

notes, on August 19,

2010, ManTech

completed the exchange of $200.0

million

in

aggregate

principal amount o f 7.25% senior

unsecured

notes

due

2018 that

are registered under the Securities

A ct

of

1933,

as amended, for all

of

the then outstanding unregistered


notes

due 2018.

The 7.25% senior unsecured

notes

mature on

Apri l

15, 2018 with interest payable semi-annually starting on October 15, 2010.

The 7.25% senior unsecured

notes

were issued at 100% of the

aggregate

principal amount and are effectively subordinate to the

Company's

existing and future senior secured

debt

(to the extent of the value of the

assets

securing such debt), including

debt

of

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outstanding under our revolving credit

facility.

The 7.25% senior unsecured notes may be redeemed, in whole or in part, at any time,

at the option

of

the Company, subject to certain conditions specified

in

the indenture governing the 7.25% senior unsecured

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notes. The 7.25% senior unsecured

notes

are guaranteed,

jointly

and severally, on a senior unsecured basis by each of our

wholly-owned

domestic subsidiaries

that

also guaranteed

debt

obligations under our prior

revolving

credit

facility

or

wi l l

guarantee

debt

obligations under our

revolving

credit

facility.

The

fair

value

ofthe


notes

as of

March

31, 2012 was approximately $212.0

million

based on quoted

market prices.

The Company incurred approximately $4.9

million

in issuance costs,

which

are being amortized to interest expense over the

contractual

life

o f


notes

using

the

effective

interest

rate

method, resulting in an

effective rate

o f

7.67%.

The indenture

governing


notes

contains customary

events

of default, as

wel l

as restrictive covenants,

wliich, subject to important exceptions and qualifications specified in such indenture,

wi l l ,

among other things,

limit

our

ability

and

the

ability

of our subsidiaries

that

guarantee


notes

to: pay dividends or distributions, repurchase equity,

prepay subordinated

debt

or make certain investments; incur additional

debt

or issue certain

disqualified

stock and preferred stock;

incur liens on assets; merge or consolidate with another company or

sell

all or substantially all assets; and allow to exist certain

control provisions.

An

event of default under the indenture

wi l l

allow either the trustee of the

notes

or the holders of at least 25% in

principal

amount of the then outstanding

notes

to accelerate, or in certain cases,

wi l l

automatically

cause

the acceleration of, the

amounts due under the notes. As

of March

31, 2012, the

Company

was in compliance

with al l

required covenants under the indenture.

9.

Commitments

ECF 57 Redacted

Documents

Transcript of ECF 57 Redacted