EDGW Edgewater Technology, Inc. (delisted)

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION OF NON-EMPLOYEE DIRECTORS

Prior to the second quarter of 2017, the Company’s non-employee directors were compensated under the following structure:

Annual Cash Compensation . Each of the Company’s non-employee directors received an annual cash retainer of $20,000, payable in four quarterly installments. Each such Board member was eligible to receive an additional $1,500 meeting fee for attendance at each meeting above six (6) Board meetings per year. In addition, the following Committee retainer amounts were payable to Committee members.

The Audit Committee Chair received an annual retainer of $30,000 per year, while Audit Committee members were entitled to receive an annual retainer of $12,500. Each Audit Committee member was eligible to receive an additional $1,000 meeting fee for attendance at each meeting above eight (8) Audit Committee meetings per year. The annual retainers were paid in four quarterly installments and were in addition to the annual cash retainer for non-employee directors described above.

The Compensation Committee Chair received an annual retainer of $25,000 per year, while Compensation Committee members are entitled to receive an annual retainer of $12,500. Each Compensation Committee member was eligible to receive an additional $1,000 meeting fee for attendance at each meeting above six (6) Compensation Committee meetings per year. The annual retainers were paid in four quarterly installments and were in addition to the annual cash retainer for non-employee directors described above.

The Governance and Nominating Committee Chair received an annual retainer of $20,000 per year, while Governance and Nominating Committee members were entitled to receive an annual retainer of $7,500. Each Governance and Nominating Committee member was eligible to receive an additional $1,000 meeting fee for attendance at each meeting above the estimated four (4) Governance and Nominating Committee meetings per year. The annual retainers were paid in four quarterly installments and were in addition to the annual cash retainer for non-employee directors described above.

The Board’s Lead Independent Director received a cash retainer of $10,000, payable in four quarterly installments, in addition to the annual cash retainer for non-employee directors described above. Additionally, the Lead Independent Director was entitled to receive all applicable Committee fees, as described above.

Stock Options and Share-Based Awards . Following initial election to the Company’s Board of Directors, non-employee directors were eligible to receive a nonqualified stock option to purchase shares (set at a fixed amount of 20,000 stock options).

The Board had historically made equity awards to directors, on the date of the annual meeting, following their reelection to the Company’s Board. In March 2016, the Company’s Board and Compensation Committee, due to insufficient share availability necessary to provide competitive and meaningful awards, voted to forego annual equity grants (stock options and share-based awards) to non-employee directors. The Company’s Board and Compensation Committee believe that equity-based awards are essential to our continued success. Equity-based awards are necessary to attract, retain and motivate highly-qualified directors to serve Edgewater and to improve Edgewater’s business results and earnings by providing these individuals an opportunity to acquire or increase a direct proprietary interest in Edgewater’s operations and future success while further aligning recipient’s interests with those of shareholders.

The Board compensation guidelines described above were designed to (a) compensate Committee members through Committee cash retainers in order to provide compensation commensurate with relevant service level commitments for Committee service and (b) set overall Board compensation at a level that is competitive with market norms and peer group median levels, in order to enable the Company to attract potential new directors and provide market-based remuneration for existing directors.

Non-Equity Incentive Plan Compensation.  We do not provide Non-Equity Incentive Compensation to our directors.

Pension Benefits.  We do not have a pension plan and therefore do not offer any such pension arrangements to our directors.

Effective as of the second quarter of 2017, the Company’s non-employee directors are compensated under the following structure:

Annual Cash Compensation . We do not currently provide cash compensation to our non-employee directors.

Annual Stock Compensation. Each of the Company’s non-employee directors receives an annual stock based retainer of $20,000, payable in four quarterly installments. Each Board member is eligible to receive stock in the amount equal to an additional $1,500 meeting fee for attendance at each meeting above six (6) Board meetings per year. In addition, the following Committee retainer amounts are payable to Committee members.

- 8 -

The Audit Committee Chair receives an annual retainer of $30,000 per year, while Audit Committee members are entitled to receive an annual retainer of $12,500. Each Audit Committee member is eligible to receive an additional $1,000 meeting fee for attendance at each meeting above eight (8) Audit Committee meetings per year. The annual retainers are paid, in the form of Company stock, in four quarterly installments and are in addition to the annual retainer for non-employee directors described above.

The Compensation Committee Chair receives an annual retainer of $25,000 per year, while Compensation Committee members are entitled to receive an annual retainer of $12,500. Each Compensation Committee member is eligible to receive an additional $1,000 meeting fee for attendance at each meeting above six (6) Compensation Committee meetings per year. The annual retainers are paid, in the form of Company stock, in four quarterly installments and are in addition to the annual retainer for non-employee directors described above.

The Governance and Nominating Committee Chair receives an annual retainer of $20,000 per year, while Governance and Nominating Committee members are entitled to receive an annual retainer of $7,500. Each Governance and Nominating Committee member is eligible to receive an additional $1,000 meeting fee for attendance at each meeting above the estimated four (4) Governance and Nominating Committee meetings per year. The annual retainers are paid, in the form of Company stock, in four quarterly installments and are in addition to the annual cash retainer for non-employee directors described above.

The Board’s Lead Independent Director receives a retainer of $40,000, payable, in the form of Company stock, in four quarterly installments, in addition to the annual retainer for non-employee directors described above. Additionally, the Lead Independent Director is entitled to receive all applicable Committee fees, as described above.

Stock Options and Share-Based Awards . Following initial election to the Company’s Board of Directors, non-employee directors are eligible to receive a nonqualified stock option to purchase shares (set at a fixed amount of 20,000 stock options).

The Board compensation guidelines described above are designed to (a) compensate Committee members through Committee cash retainers in order to provide compensation commensurate with relevant service level commitments for Committee service and (b) set overall Board compensation at a level that is competitive with market norms and peer group median levels, in order to enable the Company to attract potential new directors and provide market-based remuneration for existing directors.

Non-Equity Incentive Plan Compensation.  We do not provide Non-Equity Incentive Compensation to our directors.

Pension Benefits.  We do not have a pension plan and therefore, do not offer any such pension arrangements to our directors.

- 9 -

Compensation Committee Interlocks and Insider Participation

During 2017, Messrs. Bova, Carpenter, Flynn, Wilson and Wolf and Ms. Leaming served as members of the Compensation Committee. Except with respect to Mr. Bova, who served as President and Chief Operating Officer of Edgewater from 1999 to 2000, no member of the Compensation Committee is or has ever been one of our officers or an employee of the Company. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more of its executive officers serving as a member of our Board of Directors or Compensation Committee.

COMPENSATION DISCUSSION AND ANALYSIS

The following Compensation Discussion and Analysis describes the material elements of compensation for the Edgewater executive officers (the “Named Executive Officers”) identified in the Summary Compensation Table presented below under “ Compensation of Named Executive Officer s,” provides an overview and analysis of our compensation programs, the compensation decisions we have made under those programs, and the factors we considered in making those decisions with respect to the compensation earned by our Named Executive Officers. The Compensation Committee of the Board (the “Compensation Committee”) makes all decisions for the total direct compensation—that is, the annual base salaries and benefits; annual incentive compensation; and long-term incentives of the Company’s executive officers, including the Named Executive Officers.

Our Named Executive Officers for 2017 consisted of those persons who at any time during the year served as our Chief Executive Officer or Chief Financial Officer and the three other executive officers who were employed on December 31, 2017 and had the highest total compensation for 2017. For 2017, our Named Executive Officers consisted of (i) Jeffery Rutherford, who was appointed by our Board in March 2017 as the Company’s Chairman of the Board and Interim Chief Executive Officer and Interim President, (ii) Shirley Singleton, who served as the Company’s Chairman, President and Chief Executive Officer until her employment was terminated by the Board without cause in March 2017, (iii) David Clancey, who served as the Company’s Executive Vice President, Chief Strategy Officer and Chief Technology Officer until his employment was terminated by the Board without cause in March 2017, (iv) Robin Ranzal-Knowles, who served as President of Edgewater Technology-Ranzal, Inc., a Company subsidiary, until her employment was terminated by the Board without cause in August 2017, (v) Timothy R. Oakes, the Company’s Chief Financial Officer, (vi) Kristin Zaepfel, the Company’s Vice President, Human Resources, (vii) Russell Smith, President of Edgewater Fullscope, Inc., a Company subsidiary, and (viii) Paul McNeice, who joined the Company in 2010 and was appointed by our Board as the Company’s Chief Accounting Officer in September 2017.

Executive Summary

Edgewater’s operating strategy is based on the philosophy that success in its business sector is best measured by performance in a marathon, not a sprint. Our compensation policies and practices mirror this operating strategy, as compensation incentives are implemented as a direct extension of our operating strategy, and payouts are made only when fundamental operating objectives, including satisfaction of revenue or Adjusted EBITDA-based goals, have been achieved.

- 10 -

The Company’s operating performance has varied from year to year, primarily due to volatile industry demand for information technology-related products and services. Management and the Board annually review Edgewater’s business for the purpose of developing and updating a rolling three-year strategic plan focused on continually improving and broadening the Company’s scale of operations and driving consistent growth in revenue and Adjusted EBITDA over the planning horizon.

At the beginning of 2017, the Compensation Committee established 2017 target bonus opportunities premised on specified Adjusted EBITDA levels tied to our budget and individual executive management objectives, as described in greater detail below under “ Individual Elements of Compensation; 2017 Compensation Decisions—Annual Incentive Compensation .”

Of the total 2017 bonus opportunities for Named Executive Officers, 80% was tied to Adjusted EBITDA performance against targets and 20% was tied to other specific individual management performance objective goals. The Company did not achieve the minimum Adjusted EBITDA threshold (as described below under “ Elements of the 2017 Incentive Bonus Plan Opportunity ”). Additionally, the Compensation Committee reviewed and approved the satisfaction of individual 2017 management performance objective goals for each of the Named Executive Officers.

Mr. McNeice and Mr. Smith were not named executive officers during the development and approval of the 2017 bonus plan. Mr. McNeice was subject to an annual discretionary bonus plan for the year ended December 31, 2017. Mr. Smith’s plan was established by the Committee based 40% on the service and net software revenues, 40% on the EBITDA contribution of the Fullscope Division of our ERP business, and 20% tied to other specific individual management performance objective goals. The Fullscope Division exceeded the minimum revenue and EBITDA thresholds (as described below under “ Elements of the 2017 Incentive Bonus Plan Opportunity ”).

The combined effects of the partial achievement against the 2017 Financial Performance Targets resulted in a partial bonus payout against target for all Named Executive Officers (20% of target). Mr. Smith, whose plan was based on ERP financial results, achieved greater than target payout based on measured performance (121% of target).

No stock option or restricted share awards were granted by the Board to the Company’s Named Executive Officers in March 2017 due to an insufficient number of shares available to provide competitive and meaningful awards.

Consideration of 2017 Say-On-Pay Voting Results

The Compensation Committee, when reviewing and determining compensation policies and deciding upon compensation strategies for the Company’s Named Executive Officers, considered the results of stockholder voting on the 2017 non-binding advisory vote to approve Named Executive Officer compensation. With 66% of the votes cast approving the compensation program for our Named Executive Officers, the Compensation Committee concluded that the Company’s stockholders were generally supportive of the Company’s executive compensation decisions and policies and that the Company would continue to adhere to such decisions and policies.

Compensation Philosophy

Our compensation programs are designed to attract, retain and compensate Edgewater’s executive employees, while motivating them to achieve superior performance. Different programs are geared to short- and longer-term performance with the goal of increasing stockholder value over the long term. Executive compensation programs affect all employees by setting general levels of compensation and helping to create an environment of goals, expectations and rewards. Because we believe the performance of every employee is important to our success, we are mindful of the effect executive compensation and incentive programs have on all of our employees.

We believe that the compensation of our executives primarily should reflect their success as a management team, in attaining key operating objectives, such as growth in revenue and growth in earnings before interest, taxes, stock-based compensation expense, depreciation and amortization and other non-recurring charges (or benefits) (“Adjusted EBITDA”), the development of long-term competitive advantage, and, to a lesser extent, individual performance goals and objectives. We believe that the performance of the executives in managing our Company, considered in light of general economic and specific company, industry and competitive conditions, should be the basis for determining their overall compensation. We also believe that their compensation should not be based on the short-term performance of our stock, whether favorable or unfavorable, but rather that the price of our stock will, in the long-term, reflect our operating performance, and ultimately, the management of the Company by our executives. We seek to have the long-term performance of our stock reflected in executive compensation through our stock option and other equity incentive programs.

- 11 -

For more detail regarding these components, see “ Individual Elements of Compensation— Elements of 2017 Incentive Bonus Plan Opportunity ” below.

Compensation Consultant

The Company engaged Radford, an Aon Hewitt Company (“Radford”), as an independent compensation consultant (the “Compensation Consultant”) to assist the Committee in the discharge of its duties. Our Compensation Consultant does not perform any services for us other than for the Compensation Committee, and the Compensation Committee retains the right to terminate or replace the Compensation Consultant at any time.

During 2017, our Compensation Consultant provided the Compensation Committee with:

In preparing its compensation analyses for 2017, our Compensation Consultant analyzed compensation data from the companies included in our peer group, as well as the published compensation surveys of software products/services and professional/technical services firms with a primary focus on comparable companies with revenues less than $350 million, market capitalizations less than $350 million and a market capitalization to revenue multiple between 0.7x and 1.5x and a secondary focus on companies having a similar employee headcount profile.

The following is a list of all the companies in our peer group:

- 12 -

The 2017 peer group was developed by the Compensation Consultant, with management input, and was formally reviewed with and approved by the Compensation Committee in October 2017, at which time the Company was positioned at the median of the peer group in trailing twelve-month revenues and market capitalization. The Compensation Consultant’s recommendations with respect to base salary, bonus and equity incentive compensation are generally based on a combination of the broader survey information and available published data for the companies in the peer group.

The Compensation Committee generally seeks to target all elements of direct compensation at or near the 50th percentile of the peer group data and industry market survey data. Actual long-term equity incentive compensation awards were set at lower levels based on the current limited availability of shares for granting under the Company’s equity incentive plans.

Role of the Chief Executive Officer in the Compensation Process

The Compensation Committee makes all decisions for the total direct compensation—that is, the annual base salaries and benefits; annual incentive compensation; and long-term incentives of the Company’s executive officers, including the Named Executive Officers. As it relates to compensation matters for the Company’s Named Executive Officers (other than the Chief Executive Officer), the Compensation Committee solicits recommendations from the Chief Executive Officer with regards to information that may be considered by the Compensation Committee in either the development of compensation programs or the awarding of objective and/or discretionary bonus amounts. The Compensation Committee, however, makes the final decision with respect to executive officer compensation.

Overall Compensation Goals

The goals of our executive compensation program are to:

The Compensation Committee seeks to achieve these goals by setting base salaries for our executives that are competitive with those of our peers and providing incentives that enable total compensation to be in line with peer total compensation levels. Further, we place an important emphasis on “pay for performance,” as we believe that meaningful portions of a total compensation opportunity should be at risk. In addition, Edgewater believes that total compensation should reflect and properly reward outstanding performance, including performance above targeted levels.

We believe the mix of base salary, bonuses, stock option grants and restricted stock awards described below furthers our objectives, is consistent with our philosophy described previously and effectively links executive compensation to our Company’s operational performance.

Consideration Given to Individual Elements of Compensation

The Company’s compensation program for its Named Executive Officers is based upon various individual compensation elements such as base salary, annual incentive compensation and long-term stock awards. When reviewing compensation programs, the Compensation Committee views each of the compensation elements independently, as well as collectively as total direct compensation.

The Compensation Committee annually determines the compensation levels for our Named Executive Officers by considering several factors, including each executive officer’s roles and responsibilities, how the executive officer is performing those responsibilities, our historical and anticipated future financial performance and the compensation practices of companies in our peer group and where appropriate, survey data from a broader index of comparable public companies. The Compensation Committee does not maintain a specific policy or formula when establishing the allocation of total compensation among the various compensation elements (i.e., cash and non-cash compensation). The overall goal of the Compensation Committee is to establish individual compensation elements for our Named Executive Officers that align with the goals described under “Overall Compensation Goals” above, and align the interests of our Named Executive Officers with the interests of our stockholders.

- 13 -

Individual Elements of Compensation

The current compensation program for the Named Executive Officers is composed of three primary elements: annual base salaries and benefits; annual incentive compensation in the form of cash bonus awards made under the incentive bonus program, which is technically part of our 2012 Omnibus Plan; and long-term incentives, consisting of stock options and restricted stock grants.

Annual Base Salaries and Benefits

Annual base salaries and benefits are intended to provide a degree of compensation certainty to executives by providing a reasonable amount of compensation that is not at-risk for performance.

Base Salaries. Our executive compensation strategy generally is for executives to receive a salary in line with the market, while being eligible for bonuses, stock option grants or restricted stock awards that generally generate value based on the Company’s and individual performance. We believe that competitive base salary levels in combination with performance and stock-based incentives provide our executives with the potential to earn competitive industry total executive compensation levels if corporate financial performance goals and individual performance goals are achieved.

Base salaries are designed to help attract and retain management talent. To ensure that salary ranges are competitive in the overall marketplace, salary ranges are periodically compared to the salaries paid for comparable positions within companies that compete with our Company for executive talent, including industry competitors, companies of comparable size in our key geographic markets, competitive industry practices, and companies with comparable revenues or profitability in other industries. Our compensation assessment efforts have been assisted by our Compensation Consultant, which conducted benchmark reviews of our Company to a peer group of companies as well as a broader survey of technology industry firms with less than $350 million in revenue (with a median of $168 million). These analyses compared the individual compensation elements, as well as total direct compensation, for each of our Named Executive Officers with peer group and market survey data at the market 25th, 50th and 75th percentiles.

The Compensation Committee generally reviews salaries of the Named Executive Officers in the first calendar quarter of each year to determine if any adjustment is appropriate. In reviewing and establishing salaries for the Named Executive Officers, the Committee considers the Company’s past performance, individual performance and experience and, with respect to the Named Executive Officers other than the CEO, recommendations made by the CEO. Additional factors considered in setting salary levels are the Committee members’ business judgment about the appropriate level of salary to retain, motivate and reward individual executives and to a certain extent, recommendations by our Compensation Consultant. Baseline amounts under employment agreements also influence base salary compensation levels. See “Employment, Severance and Change in Control Agreements” below.

Benefits

The Company’s Named Executive Officers receive limited benefits that would be considered executive benefits. Most benefits are consistent with those offered generally to employees, which consist of life insurance, travel accident insurance, health insurance, dental insurance, flexible spending accounts, short-term and long-term disability, fitness club reimbursement, and opportunities to participate in Edgewater’s employee stock purchase program and 401(k) plan. Benefits and perquisites include a monthly automobile allowance that is provided to each of our Named Executive Officers (other than Mr. McNeice and Mr. Smith and Ms. Zaepfel). In general, we believe the benefits described above are competitive with the marketplace. Please refer to “ Compensation of Named Executive Officers—Summary Compensation Table ” below and the related footnotes for additional information about benefits.

Annual Incentive Compensation

Incentive compensation consists of cash bonuses and awards made under the incentive bonus plan, and its objective is to motivate executives annually, and to promote long-term growth. We refer to these opportunities as “bonus” opportunities consistent with historical practice. However, for “Summary Compensation Table” purposes, awards and payouts appear under the column “Non-Equity Incentive Plan Compensation” and not under the “Bonus” column, consistent with SEC rules.

Executive Incentive Bonuses. Future cash bonus payments will be made in accordance with our incentive bonus plan, under which we set annual incentive goals at meetings of the Compensation Committee in conjunction with the release of our prior year financial results. Our incentive bonus plan represents an important element of our compensation strategy, since achieving performance targets enables our executives to attain total current compensation in line with peer pay levels. In contrast, failure to achieve performance targets may result in total current compensation for our executives falling below, possibly substantially below, peer compensation levels.

- 14 -

Elements of the 2017 Incentive Bonus Plan Opportunity . For the 2017 fiscal year, the Committee established the following cash bonus opportunities and objectives for the Named Executive Officers:

in furtherance of this objective goal, the Committee established specified performance target levels for Adjusted EBITDA, which we refer to collectively as “Financial Performance Targets” and individually as the “Financial Performance Target.”

in furtherance of this objective goal, the Committee established specified performance target levels for service revenue and for Adjusted EBITDA, which we refer to collectively as “Ranzal Financial Performance Targets” and individually as the “Ranzal Financial Performance Target.”

in furtherance of this objective goal, the Committee established specified performance target levels for service revenue and for Adjusted EBITDA, which we refer to collectively as “Fullscope Financial Performance Targets” and individually as the “Fullscope Financial Performance Target.”

- 15 -

Mr. McNeice and Mr. Smith were not named executive officers at the time of Board Approval of these plans.

2017 Financial Performance Bonus Opportunity. The 2017 Financial Performance Bonus Opportunity was established to reward executives for achieving certain goals for Adjusted EBITDA (targeted at $6.3 million). The bonus plan was also designed to provide additional incentives for overachievement beyond target goals, so that more than 100% of each target goal could be paid out if overachievement occurred.

2017 Individual Performance Bonus Opportunity. The 2017 Individual Performance Bonus Opportunity was established on an individual basis for each Named Executive Officer based upon the expected professional contribution of each functional executive position and the impact of such contribution on the overall strategic and operational goals of the Company. This constituted 20% of the aggregate total eligible bonus opportunity of each of our Named Executive Officers.

Total Eligible Bonus Opportunity. The aggregate total eligible bonus opportunity for each of the Named Executive Officers was determined in relation to a percentage of base salary.

For 2017, the total eligible bonus opportunity for the Named Executive Officers was as follows:

2017 Bonus Award Payments . In March 2018, the Compensation Committee evaluated the extent to which individual elements of the 2017 Incentive Bonus Plan Opportunity had been earned and determined the amount of bonuses payable. In 2017, Financial Performance Bonus Opportunities were focused on the attainment of service revenue and Adjusted EBITDA targets; for these purposes, Adjusted EBITDA includes all applicable incentive bonus plan expense accruals. The Compensation Committee’s review was based on its knowledge of the Company, its contact with the executives throughout the year and reviews of Company and individual executive officer performance. An executive officer must be employed by the Company as of the date any bonus is paid, in order to be eligible to receive it.

- 16 -

Each of the Named Executive Officers qualified for a bonus payment under the Individual Performance Bonus Opportunity. The Compensation Committee, based on consideration of input from Mr. Rutherford, its knowledge of the Company, its contact with the executives throughout the year and a review of each individual Named Executive Officer’s performance, determined each individual Named Executive Officer qualified for a bonus payment in connection with the satisfactory achievement of each officer’s individual management objectives.

Long-Term Incentives

We have granted in the past, and we intend to grant or award in the future, to our executives and other key employees, stock options and restricted stock awards. Options have been, and will be, granted at an exercise price equal to the closing sales price of our common stock, as reported on NASDAQ, on the date of grant. Options have no monetary value to the executives unless the market price of our common stock increases above the exercise price. Restricted stock awards, although having immediate value upon the date of the award, are subject to time vesting provisions, which generally require an executive to remain with our Company during the time vesting period, before being able to access the value of any such awards. Although we have not done so in the past, we may base vesting of future option grants or restricted stock awards on an objective analysis of various performance criteria. Restricted stock awards have historically been awarded at the par value of our Company’s common stock, which is $0.01 per share.

The value of long-term stock awards is primarily based on the performance of Edgewater common stock and therefore is designed to align the executives’ interests with those of the Company’s stockholders. A stock option is the right to purchase shares of common stock of the Company generally within seven to ten years after the date of grant.

In general, the Company’s long-term stock awards are based on each executive’s historical contributions, experience and tenure with the Company, past and expected future contributions to the Company, and in part after examining the competitive marketplace.

With the exception of a new hire grant of 20,000 shares on February 16, 2017, no stock option or restricted share awards were granted by the Board to the Company’s Named Executive Officers in 2017 due to an insufficient number of shares available to provide competitive and meaningful awards.

The Company’s Board and Compensation Committee believe that equity-based awards are essential to our continued success. Equity-based awards are necessary to attract and retain highly-qualified officers, directors, key employees and other key individuals and to motivate these individuals to serve Edgewater and to expend maximum effort to improve Edgewater’s business results and earnings by providing these individuals with an opportunity to acquire or increase a direct proprietary interest in Edgewater’s operations and future success.

Please refer to the “ Grants of Plan-Based Awards ” and “ Outstanding Equity Awards at Fiscal Year End ” tables below and the related footnotes for additional information about long-term stock awards.

Consideration Given to Annual and Long-Term Incentive Awards

After reviewing the Company’s prior year-end financial results, the Committee decides whether to grant individual cash bonuses and long-term stock awards, and determines the amount of these bonuses and awards, based on the factors previously discussed. The Committee’s review of total compensation opportunities is based on its knowledge of the Company, its contact with the executives throughout the year and a review of performance, with a primary focus on overall Company performance and a secondary focus on individual performance, as well as market and competitive factors.

- 17 -

The Committee also compares the Company’s performance to that of its peer competitors. Additionally, companies with comparable revenues in our industry, as well as similar industries, are also surveyed to ensure that executive compensation is competitive in the overall marketplace. The Compensation Committee believes that the Company should provide total compensation to its executives that is competitive among its peers in order to continue attracting and retaining the most talented people. The Compensation Committee considers the foregoing performance factors in making individual compensation decisions. The Committee also applies its own business judgment in light of these factors (and in certain circumstances, the recommendations made by its Compensation Consultant) in making final incentive award determinations.

Potential Payments Upon Termination and/or Change in Control

The Company provides a level of severance benefits that the Compensation Committee believes is necessary to provide a competitive compensation package to its senior executives. Maintaining these arrangements enables the Company to attract and retain senior executives, provide senior executives with a degree of certainty regarding their future employment relationship, and ensure the continued commitment of senior executives in the event of a potential or actual change in control. Payments upon a change in control also further align the interests of the executives with those of the stockholders. Providing change in control benefits is designed to reduce the reluctance of management to pursue potential change in control transactions that may be in the best interests of the stockholders, and helps ensure stability in the event of a change in control of the Company.

The Compensation Committee further believes that the level of severance benefits and vesting of outstanding equity awards under the employment agreements, including multiples of pay, are consistent with market practice and necessary for the Company to be competitive in attracting and retaining talent in the Company’s industry, and are also commensurate with each senior executive’s level of responsibility.

Employment, Severance and Change in Control Agreements

The Compensation Committee believes that it is in the Company’s best interest as well as the interests of its stockholders to offer severance and change in control benefits to certain of its Named Executive Officers. Edgewater competes for talent in a highly competitive market in which companies routinely offer similar benefits to senior executives. The Compensation Committee believes that providing severance and change in control benefits to its Named Executive Officers reduces any reluctance of senior management to pursue potential change in control transactions that may be in the best interests of stockholders. In addition, the income security provided by competitive severance and change in control arrangements helps minimize distractions caused by uncertain personal financial circumstances during the negotiation of a potential change in control transaction, a period of time requiring focused and thoughtful leadership to ensure a successful outcome.

Employment Agreements for Ms.  Singleton and Mr.  Clancey : On June 12, 2007, the Company entered into three-year employment agreements with Ms. Singleton, as the Company’s then President and CEO, and Mr. Clancey, as the Company’s then Executive Vice President, Chief Strategy Officer and Chief Technology Officer. The employment agreements established the following minimum annual base salary levels: Ms. Singleton, $450,000 and Mr. Clancey, $400,000. On December 17, 2010, each employment agreement was amended to update salary and severance provisions and extend the term for an additional three years. On December 4, 2013, each employment agreement was further amended to update salary and severance provisions and extend the term for an additional three years. On December 2, 2016, each employment agreement was further amended to update salary levels, extend the term through December 31, 2017 and provide severance in the event the Company failed, at any time subsequent to December 2, 2016, to renew the agreement upon all of the same terms and conditions set forth therein for a period of at least one (1) year. The employment agreements, as amended, for Ms. Singleton and Mr. Clancey are collectively referred to as the “Employment Agreements” and separately as an “Employment Agreement.”

The Employment Agreements also contained a covenant not to compete with the Company, concerning its business, non-solicitation of employees and customers during the term of the agreement and for the twelve-month period immediately following termination with the Company.

In accordance with the terms of the Employment Agreements, if either Ms. Singleton or Mr. Clancey were terminated without cause or either Ms. Singleton or Mr. Clancey terminated his or her respective employment for Good Reason (as defined therein) in the absence of a Change in Control involving the Company, then the Company would be required to (i) make a lump sum payment equal to two (2) times the employee’s annual base salary in effect at the time of such termination plus an amount equal to the employee’s bonus target for the calendar year immediately preceding the calendar year in which termination of employment occurred (but in no event would the bonus paid exceed one (1) year’s annual base salary for the employee), (ii) accelerate the vesting of all options and restricted stock awards so that all unvested options and restricted stock awards shall become immediately vested and exercisable, and (iii) continue employee’s healthcare, life insurance and disability coverage for a period of two years following such termination.

- 18 -

In March 2017, the Company’s Board of Directors voted to remove, without cause, Ms. Singleton as the Company’s President and CEO. In accordance with the terms of Ms. Singleton’s employment agreement, the Company paid Ms. Singleton a total of $1.4 million, representing two times her annual base salary in effect at the time of her termination, plus an amount equal to her bonus target for the calendar year immediately preceding the calendar year in which she was terminated. Additionally, all outstanding and unvested stock options and restricted stock awards became immediately vested and exercisable at the time of her termination.

In March 2017, the Company’s Board of Directors voted to remove, without cause, Mr. Clancey as the Company’s Executive Vice President, Chief Strategy Officer and Chief Technology Officer. In accordance with the terms of Mr. Clancey’s employment agreement, the Company paid Mr. Clancey a total of $1.2 million, representing two times his annual base salary in effect at the time of his termination, plus an amount equal to his bonus target for the calendar year immediately preceding the calendar year in which he was terminated. Additionally, all outstanding and unvested stock options and restricted stock awards became immediately vested and exercisable at the time of his termination.

Change in Control Agreement for Ms.  Ranzal-Knowles : On September 15, 2010, the Company entered into a severance agreement (the “Original Knowles Severance Agreement”) with Ms. Ranzal-Knowles, the then President of the Company’s Edgewater Technology-Ranzal, Inc. subsidiary, under which the Company would be obligated to pay, in certain circumstances, (i) severance pay for a period of six months of her annual base salary then in effect, together with six months continued coverage under the Company’s medical and dental plans, (ii) a lump sum payment in an amount equal to one-half of the annual performance bonus paid by the Company during the preceding fiscal year and (iii) full vesting of all stock option grants in the event Ms. Ranzal-Knowles’ employment were terminated by the Company without “cause” within one year following a “change in control” of the Company.

On December 4, 2013, the Company entered into a restated severance agreement with Ms. Ranzal-Knowles (the “Restated Knowles Severance Agreement”), which provided for the modification of the payment provisions associated with amounts due to Ms. Ranzal-Knowles under the provisions of the Original Knowles Severance Agreement in the event she is deemed to be a “specified employee,” as defined in the Treasury Regulations.

Under the Restated Knowles Severance Agreement, “cause” was defined as (1) the employee’s material breach of any provision of the Company’s Confidentiality and Non-Disclosure Agreement, (2) following notice and an opportunity to be heard on the subject, a determination that the employee has willfully failed and refused to comply with the material and reasonable directives of the Company or breached her fiduciary duties to the Company, (3) the employee’s failure to meet written performance standards established by the President and CEO of the Company from time to time which the employee has failed to cure within 90 days after receipt of written notice of nonperformance from the Company, (4) the employee’s gross negligence or willful or intentional misconduct, or (5) the conviction of, or the entering of a guilty plea or plea of no contest with respect to, a felony with respect to the employee, or any other criminal activity which materially affects the employee’s ability to perform her duties or materially harms the reputation of the Company.

In August 2017, the Company’s Board of Directors voted to remove, without cause, Ms. Ranzal-Knowles as the Company’s President Edgewater Ranzal. In accordance with the terms of Ms. Ranzal-Knowles severance agreement, the Company paid Ms. Ranzal-Knowles a total of $761 thousand, representing her annual base salary in effect at the time of her termination, plus an amount equal to her bonus target for the calendar year immediately preceding the calendar year in which she was terminated. Additionally, all outstanding and unvested stock options and restricted stock awards became immediately vested and exercisable at the time of her termination.

Change in Control Agreement for Mr.  Oakes : On July 21, 2008, the Company entered into a severance agreement (the “Original Oakes Severance Agreement”) with Mr. Oakes, the Company’s Chief Financial Officer, under which the Company would be obligated to pay Mr. Oakes, in certain circumstances, his annual base pay then in effect, for a period of six months, together with six months of continued coverage under the Company’s medical and dental plans, in the event his employment were terminated by the Company without “cause” within one year following a Change in Control of the Company.

On December 4, 2013, the Company entered into a restated severance agreement (the “Restated Oakes Severance Agreement”) with Mr. Oakes, which provided for the modification of the payment provisions associated with amounts due to Mr. Oakes under the provisions of the Original Oakes Severance Agreement in the event he is deemed to be a “specified employee,” as defined in the Treasury Regulations.    Under the Restated Oakes Severance Agreement, “cause” is defined as (1) the employee’s material breach of any provision of the Company’s Confidentiality and Non-Disclosure Agreement, (2) following notice and an opportunity to be heard on the subject, a determination that the employee has willfully failed and refused to comply with the material and reasonable directives of the Company or breached his fiduciary duties to the Company, (3) employee’s failure to meet written performance standards established by the President and CEO of the Company from time to time which the employee has failed to cure within 90 days after receipt of written notice of nonperformance from the Company, (4) the employee’s gross negligence or willful or intentional misconduct, or (5) the conviction of, or the entering of a guilty plea or plea of no contest with respect to, a felony with respect to the employee, or any other criminal activity which materially affects the employee’s ability to perform his duties or materially harms the reputation of the Company.

- 19 -

Change in Control Agreement for Mr.  McNeice : On March 15, 2018, the Company entered into a severance agreement (the “McNeice Severance Agreement”) with Mr. McNeice, the Company’s Chief Accounting Officer, under which the Company would be obligated to pay Mr. McNeice, in certain circumstances, his annual base pay then in effect, for a period of twelve months, in the event his employment were terminated by the Company without “cause” within one year following a Change in Control of the Company.

Jeffrey Rutherford Sale Bonus Agreement : On March 15, 2018, the Company entered into a sale bonus agreement (the “Bonus Agreement”) with Jeffrey Rutherford, who has been since March 2017 the Company’s Chairman of the Board, Interim Chief Executive Officer and Interim President. Under the Bonus Agreement, Mr. Rutherford shall be eligible to receive, subject to the terms and conditions set forth in the Agreement, a lump sum cash payment (the “Sale Bonus”) in an amount ranging from approximately $250,000 to approximately $1,250,000 based on the amount of the Transaction Equity Value (as defined in the Bonus Agreement) upon consummation of a business combination transaction involving the Company and Alithya Group Inc., a company domiciled in the Province of Québec, Canada (“Alithya”). The Sale Bonus shall be paid to Mr. Rutherford within 30 days following the date of consummation of the Alithya Transaction based upon the Transaction Equity Value determined as of the date of the Alithya Transaction.

Employment and Retention Bonus Agreement for Mr.  Smith : On December 18, 2009, the Company entered into a letter employment agreement with Russell Smith, currently the President of Edgewater Technology—Fullscope, Inc., a Company subsidiary, which provides for employment on an at will basis at an initial salary of $200,000 and subject to potential future adjustment. Under that agreement, if Mr. Smith’s employment is terminated by the Company for any reason other than “Just Cause,” Mr. Smith will be entitled to receive salary continuation for a period of three months. “Just Cause” shall mean Mr. Smith’s (a) repeated and willful refusal to comply with reasonable and explicit directives from the Company, (b) willful and repeated breach or habitual neglect of material duties or responsibilities as an employee (including, among others, failure to comply with the employee’s obligations under the confidentiality and non-disclosure agreement or the key stockholder non-competition agreement with the Company), or (c) failure to perform duties in a satisfactory manner. On December 22, 2017, the Company entered into a stay bonus agreement (the “Stay Agreement”) with Mr. Smith. The Stay Agreement provides that Mr. Smith shall be eligible to receive either (but not both of) a sale bonus or a retention bonus (collectively referred to as the “Stay Bonus”), subject to Mr. Smith’s continued employment through specified dates. The Stay Bonus, if payable under the Agreement, will be paid in cash.

Under the Stay Agreement, in the event a Sale Event were consummated on or before March 31, 2018 (a “Qualifying Sale Event”), Mr. Smith would receive an aggregate cash payment in an aggregate amount equal to $450,000 (the “Sale Bonus”). The Sale Bonus would be paid to Mr. Smith as follows: (A) 50% of the Sale Bonus would be paid within 30 days following the date of consummation of the Qualifying Sale Event, subject to Mr. Smith’s continued employment with the Company and its subsidiaries (the “Company Group”) (or its successor) through such date; and (B) 50% of the Sale Bonus would be paid within 30 days following the one-year anniversary of the date of consummation of the Qualifying Sale Event (the “Anniversary Date”), subject to Mr. Smith’s continued employment with the Company Group through such Anniversary Date. Additionally, in the event a Qualifying Sale Event were not consummated on or before March 31, 2018, Mr. Smith would receive an aggregate cash payment in an amount equal to $225,000 (the “Retention Bonus”). The Retention Bonus would be paid to Mr. Smith within 30 days following March 31, 2018 (the “Retention Date”), subject to Mr. Smith’s continued employment with the Company Group through the Retention Date.

Pay Ratio Information

As a result of the Dodd-Frank Act, the SEC requires disclosure of the relationship between the annual total compensation of our Chief Executive Officer and our median employee. For 2017:

• The median annual total compensation for employees other than our Chief Executive Officer was $l26,000.

• The annual total compensation of our Chief Executive Officer was $306,000.

As a result, for 2017, our CEO pay ratio was approximately 2.4 to 1.0.

The median employee was identified from a list of Company employees, whether employed on a full-time, part-time basis or temporary as of December 31, 2017, excluding our Chief Executive Officer. To determine the median employee, we reviewed the actual taxable compensation paid to each listed employee in 2017, [converted to U.S. dollars at appropriate exchange rates for any non-U.S. employees and] annualized for any full-time employee who did not work for the entire year. We did not apply any cost-of-living adjustments nor did we use any form of statistical sampling. After identifying the median employee, we calculated the annual total compensation for such employee in accordance with SEC Regulation S-K, Item 402(c)(2)(x) requirements for reporting total compensation in the Summary Compensation Table.

- 20 -

Tax Considerations

Section 162(m) of the Internal Revenue Code (the “Code”) generally disallows a tax deduction to publicly-held companies for compensation paid to their “covered employees” to the extent that the annual compensation paid to any such employee exceeds $1.0 million. However, as in effect for fiscal years ended on or prior to December 31, 2017, Section 162(m) provided an exception from such general non-deductibility for any such excess compensation which qualified as “performance-based compensation” as defined in Section 162(m). For fiscal years ending on or prior to December 31, 2017, Section 162(m) defined “covered employees” to include the CEO and the three next highest paid executives (other than the CFO) in the most recently completed fiscal year.

On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was signed into law which, among other changes to the Code, removed the exception from non-deductibility under Section 162(m) for “performance-based compensation” and also expanded the definition of “covered employees” by adding the CFO and providing that, once an executive officer became a “covered employee” for any fiscal year, such officer would (provided he or she continued to be employed by the Company) remain a “covered employee” for subsequent fiscal years, even though this might cause the total number of “covered employees” for any subsequent fiscal year to exceed five. Certain exceptions to such general non-deductibility are available under the Tax Act for contractual obligations entered into by a public company with its employees prior to December 31, 2017.

For the Company’s fiscal years ending on or prior to December 31, 2017, the Compensation Committee endeavored to structure grants of equity and annual bonuses to its Named Executive Officers who might be subject to Internal Revenue Code Section 162(m) in a manner that qualified those grants as “performance-based compensation” under that Section. The 1996 Plan, as amended, 2008 Plan and 2012 Omnibus Plan were approved by the Company’s stockholders at our May 8, 1998, June 11, 2008 and June 6, 2012 Annual Stockholders’ Meetings, respectively, and were designed to meet the requirements of Section 162(m) with respect to stock option awards. The 2000 Plan and the 2003 Plan, however, have not been approved by the Company’s stockholders. As a result, stock option grants or restricted stock awards to certain executive officers under the 2000 and 2003 Plans (if they cause the executive’s compensation to exceed $1.0 million in any one year) might not be fully deductible under Section 162(m). Since December 2009, stock options were granted to Ms. Singleton and Mr. Clancey from the 2000 Plan; these options will be treated for tax purposes as compensation paid in the year of their exercise. Because the 2000 Plan was not approved by the Company’s stockholders, the compensation expense arising upon the exercise of the options held by Ms. Singleton and Mr. Clancey may not be fully deductible by the Company in the year of exercise. For fiscal year 2016, compensation paid to our employees was fully deductible under Section 162(m). The Committee reserves the authority to award non-deductible compensation in certain circumstances as it deems appropriate. Further, because of ambiguities and uncertainties as to the application and interpretation of Section 162(m) and the regulations issued there under, no assurance can be given, notwithstanding our efforts, that compensation intended by the Company to satisfy the requirements for deductibility under Section 162(m) for fiscal years ending on or prior to December 31, 2017 does in fact do so.

Accounting Considerations

The Compensation Committee also considers the effects certain types of equity awards have on the financial statements of the Company. The Company reports share-based compensation expense related to all equity awards in accordance with the fair value recognition provisions of ASC Topic 718.

Risk Assessment

The Compensation Committee annually evaluates whether our executive and broad-based compensation programs contribute to unnecessary risk-taking and has concluded that our compensation programs do not motivate imprudent risk taking and the risks arising from these programs are not reasonably likely to have a material adverse effect on Edgewater.

Timing of Stock-Based Incentive Awards

The Company historically has not formalized a set program, plan or practice to time equity awards, including option grants, to its Named Executive Officers or directors in coordination with the release of material non-public information. Commencement of Service Awards are typically timed to coincide within 90 days of the start date of such new employee or director or promoted employee. Aside from Commencement of Service Awards, the grant date of option awards to a Named Executive Officer typically occurs after the public release of prior year-end financial results.

Restricted stock awards have been made at the discretion of the Compensation Committee; they have been awarded in tandem with the grant of options in 2015, 2014, 2013, 2007 and 2006. In general, future equity awards, if any, made to Named Executive Officers are expected to be authorized in a given fiscal year during the first quarter, after the release of prior year financial results and at the regularly scheduled March meeting of the Board of Directors and Compensation Committee.

- 21 -

Stock Ownership Guidelines

In March 2005, the Company’s Compensation Committee established stock ownership guidelines, as ratified by the Company’s Board, for the Company’s directors and Named Executive Officers (the “Management Group”). The objective of the stock ownership guidelines is to increase the Management Group’s equity stake in the Company and more closely align their interests with those of our stockholders.

For Named Executive Officers, the guidelines require, within a three-year period, each Named Executive Officer, excluding the Company’s Chief Executive Officer (or CEO), to attain an investment position representative of a weighted combination of directly owned shares, vested “in-the-money” stock options and/or restricted stock awards, in Edgewater stock equal to the sum of their annual base salary. The guidelines further require, within the same three-year period, the Company’s CEO attain an investment position equal to three times annual base salary. Once attained, an executive’s guideline does not change as a result of changes in his or her base salary or fluctuations in the Company’s common stock price.

For directors, the guidelines provide that each director must own 5,000 shares of the Company’s common stock. Each new Director elected to the Company’s Board has two years from the effective date of his or her appointment to directly own 5,000 shares of the Company’s stock. Apart from the above, we have created no incentives, disincentives or facilitative programs in connection with the stock ownership guidelines.

Each Director and Named Executive Officer currently required to be compliant with the ownership guidelines has attained compliance with applicable stock ownership guidelines and no other actions are required now or in the future. Messrs. Bova and Whelan, who joined the Board in March 2016, will have two years (until March 2018) to meet the stock ownership requirement. Messrs. Carpenter, DiSanto, Rutherford and Wolf, who joined the Board in March 2017, will have two years (until March 2019) to meet the stock ownership requirement. Messrs. McNeice and Smith, who became named executive officers during 2017, will have three years (until 2020) to meet the stock ownership requirement.

Report of Compensation Committee

Messrs. Bova (Chair), Carpenter and Wolf, who constitute the Compensation Committee, have reviewed the foregoing Compensation Discussion and Analysis with the Company’s management and recommended that it be included in this Amendment No. 1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

COMPENSATION OF NAMED EXECUTIVE OFFICERS

The following tables describes the compensation paid, or payable, for the last three fiscal years to our “Named Executive Officers,” who consist of those persons who at any time during 2017 served as our Chief Executive Officer or Chief Financial Officer and the three other executive officers who were employed on December 31, 2017 and had the highest total compensation for 2017.

- 22 -

- 23 -

Potential Termination Payments and Equity Awards

The employment agreements for certain of our Named Executive Officers, as described above under “Compensation Discussion and Analysis —Employment, Severance and Change of Control Agreements,” generally provide for cash payment in the event that their employment with the Company is terminated in certain circumstances by the Company without cause or by such Named Executive Officer for Good Reason (1) outside of a Change in Control and (2) in connection with a Change in Control. Similarly, the severance agreements for Mr. Oakes and Mr. McNeice provide for cash payment in event their employment with the Company is terminated without cause or in connection with a Change in Control. The potential payouts each Named Executive Officer may be eligible to receive in either instance under their respective employment agreements is calculated based upon the measurement criteria described in the employment agreements.

- 24 -

If the Named Executive Officers covered by employment agreements or severance agreements had their employment terminated as of December 31, 2017, the Named Executive Officers would have been eligible to receive payments, depending upon whether the termination was for Good Reason or based upon a Change in Control, as set forth in the following table. These disclosed amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to the Named Executive Officers, which would only be known at the time that they become eligible for payment and would only be payable if the events set forth in the table below occur.