Color Annual Reportannualreports.com/HostedData/AnnualReportArchive/c/NYSE... · 2016-10-17 · is a key asset. To that end, we advanced our culture of leadership, assembling a talented

ANNUALREPORT

2014

At Ciber, we know the most inspired, innovative and industrious companies should win, regardless of size or legacy.

Letter to Our Shareholders

To the Shareholders of Ciber:

2014 marked a critical year for Ciber as we delivered the

and achieved a number of key milestones in the execution of our strategy and continued growth of the company.

Across Ciber our commitment is simple. Our mission is fostering client success, helping clients outperform their competition by applying technology and talent with unique insight, global scale and a powerful network of aligned strategic partners. Our goal is to leverage our position as a trusted and nimble partner in the IT Services marketplace, while continuing our global transformation.

Importantly, we are creating value for our clients with solutions that converge the breadth and depth of our capabilities in support of their changing needs. At Ciber, we know the most inspired, innovative and industrious companies should win, regardless of size or legacy. We believe we are uniquely equipped in our industry to simultaneously be the small company that cares and the big company that can.

Our corporate priorities are focused on four key areas:

• Leveraging our unique market position to transform ourselves and our clients critical needs in an ever changing IT industry;

• Implementing heightened operational regimes and reengineering our business processes as we grow and scale the company;

• Building a culture of leadership in a world-class organization; and

• Delivering on our commitment to return capital to shareholders.

steps to execute our strategy and achieve our overall corporate goals and I am pleased with the progress we made in each of these focus areas in 2014. Our

performance, a stronger balance sheet and advances in our systems and processes that will allow us to capture new growth and expand margins as we fully leverage a common global infrastructure.

• While navigating the challenging economic and political uncertainty in Europe, by the fourth quarter we posted revenue growth of 3% in constant currency compared to a year ago. North America revenue stabilized and International performance is on a path to improvement.

Michael Boustridge, Ciber CEO

implementing the necessary steps to execute our strategy and achieve our overall corporate goals“

”


• Operating margin (as measured by operating income before restructuring charges and amortization, divided by revenue) expanded to 3.5% by the fourth quarter, a 70 basis point improvement year over year with North America margins topping 10% and International exceeding 6%.

•

quarter.

• We made early strides in creating new value for our clients. We began by simplifying our processes and institutionalizing our go-to-market model, to drive improved performance across our business.

• portfolio of reusable solution sets. For example, we launched our application modernization services, helping companies get the most value from their existing applications and manage their transformation initiatives they way they want. To help small- to mid-size organizations mitigate risk and meet regulatory compliance requirements easily and affordably, we introduced Ciber Access Control, a module in the Ciber Compliance Suite for SAP.

• We are making inroads in the important effort to realign our geographies by practice and portfolio, and we expanded and calibrated our near- and offshore delivery mix. We grew our offshore resources by 16% over the past six months. These changes are indicative of our strategy to create practices within our North America and International segments and substantively alter our mix of business.

• We are also leveraging best practices in our solutions, and expanding them outside North America into Europe; and, similarly from Europe into North America. The initial deployment of this strategy has been successful.

• Our market leadership in our North America Higher Education vertical has been rewarded with a series of opportunities in Europe, and a major Oracle win in the UK

• Our strong reputation and success in the European utilities vertical has gained traction with North America utilities, where we have

6,500 employees

4

continents

15 countries

.

.


• On partnerships we recently announced the expansion of our Infor partnership to include Europe in addition to North America. Building on strong momentum in the U.S, our companies will now partner to offer implementation, integration and upgrade services to clients across Europe. By providing resources with insight

Infor investments.

• Ciber talent was also recently recognized by Infor, as the 2014 Alliance Partner of the Year – an acknowledgement of our thought-leadership, industry knowledge, regional expertise and

strengthen a client’s competitive position in the marketplace.

• We began the long overdue investments required to implement world-class, industry leading processes to enable the consistent delivery of differentiated solutions to our customers, on a global basis.

• Our Global Client Care organization consolidates all client care into a single point of accountability.

• Our Global Practices team provides a single point of accountability for each of the key areas, for example Oracle, SAP and Infor.

• And our Global Service Delivery organization centralizes all

processes. Develop once, deploy many.

We recognize that we are in a people business and human capital is a key asset. To that end, we advanced our culture of leadership, assembling a talented team as we build a world-class organization. In January, we celebrated the opening of our new Global Strategic Sales and Global Learning and Development Facility in Plano, Texas, which will jointly house Ciber’s presence with those of our customers sitting side-by-side with us in a very unique customer intimacy model.

Finally, we are delivering on our commitment to build long term sustainable shareholder value, strengthening our balance sheet,

share repurchase program.

3%revenue growthcompared to 2013

3.5%expansion of operating margin

,


I am proud that we achieved so many of our goals in 2014 despite the turbulence and uncertainty in many markets. This underscores the partnership we have developed with our clients and partners who validate our global strategy every single day.

While pleased with the direction and intensity of our efforts, there is still

focus on discipline, structure, process and pace is essential to move Ciber forward.

We are building Ciber for the long-term in support of the success of

and our position is unique. We have dedicated teams and a strong reputation with both partners and customers. Our customer insight helps leverage technology investments while attaining business

to power sustainable growth and lasting value for our customers and shareholders in this changing market.

in us. I look forward to sharing with you our results and progress as 2015 unfolds and I thank you for your continuing support of Ciber.

Best Regards,Michael Boustridge

operating cashgenerated

million

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6363 South Fiddler’s Green Circle, Suite 1400Greenwood Village, Colorado 80111

To Our Shareholders:

On behalf of the Board of Directors of Ciber, I am pleased to invite you to the 2015 Annual Meetingof Shareholders of Ciber, Inc. We will be holding the meeting as a ‘‘virtual meeting’’ over the Interneton June 24, 2015, at 9:00am Mountain Time. Instructions for attending the virtual meeting areincluded in the attached proxy statement.

Also included in the attached proxy statement are complete descriptions of the matters to bedecided at our annual meeting. You will find that we are proposing the election of two members toour Board of Directors, advisory approval of the compensation of our named executive officers,ratification of the selection of Ernst & Young LLP as our independent registered public accountingfirm and the approval of the Amended and Restated 2004 Incentive Plan. Please give each of theproposals your careful consideration.

We value your participation in the governance of Ciber. You may participate by joining the annualmeeting or by casting your votes by proxy. To make your voting experience as easy as possible, wehave included a proxy card that you may complete and return to us. We have also providedinstructions for voting electronically via the Internet or by telephone. The attached proxy statementincludes detailed instructions for all of these voting options. If you have any questions about votingor attending the annual meeting, please contact our Corporate Secretary and let us know how wecan help.

As always, we encourage every shareholder to communicate directly with Ciber’s management andwith the Board of Directors. We look forward to hearing from you.

Sincerely,

Paul A. JacobsChairman of the BoardGreenwood Village, ColoradoApril 30, 2015

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4APR201308491085

6363 South Fiddler’s Green Circle, Suite 1400Greenwood Village, Colorado 80111

NOTICE OF THE 2015 ANNUAL MEETING OF SHAREHOLDERS

Date: Wednesday, June 24, 2015Time: 9:00am Mountain TimeLocation: The 2015 Annual Meeting of Shareholders of Ciber, Inc. will be held as a ‘‘virtual

meeting’’ via the Internet by accessing this website:www.virtualshareholdermeeting.com/CBR2015Follow the directions at that website to log into the meeting. Use the twelve-digitnumber printed on your proxy card to register on the site. We recommend that youlog in at least fifteen minutes in advance of the meeting to ensure that you arelogged in when the meeting starts.

Items of Business: We will present the following proposals for your consideration at the annual meeting:1. Elect two Class III Directors;2. Seek advisory (non-binding) approval of the compensation of our named

executive officers;3. Ratify the appointment of Ernst & Young LLP as our independent registered

public accounting firm for the fiscal year ending December 31, 2015; and4. Approve the Amended and Restated 2004 Incentive Plan.Each of these proposals is described in detail in our proxy statement thataccompanies this notice. In addition, we will transact any other business that mayproperly come before the annual meeting, or any adjournment or postponement ofthe annual meeting.

Record Date: Shareholders of record of Ciber common stock (NYSE: CBR) at the close ofbusiness on April 29, 2015, are entitled to vote at the meeting, or any adjournmentor postponement of the meeting. A list of shareholders entitled to vote at the meetingwill be available for examination at Ciber’s corporate offices for ten days prior to andduring the annual meeting.

Proxy Voting: We encourage you to cast your vote in advance of the meeting. This will ensure thepresence of a quorum at the meeting. You may vote your shares by submitting aproxy card or by telephone or Internet. If you submit your proxy in advance of themeeting, you may revoke your proxy at any time and you may still vote your sharesat the annual meeting (see the proxy statement for more information).

Your vote is important to us, so please contact us if you have any questions about the meeting or thevoting process.

By order of the Board of Directors,

M. Sean RadcliffeSenior Vice President, General Counsel, and SecretaryGreenwood Village, ColoradoApril 30, 2015

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TABLE OF CONTENTS

Part 1—Information Concerning Solicitation and Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Information about the Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Shares Entitled to Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Attendance at the Virtual Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Revocation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Other Matters Related to Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Part 2—Proposals to Be Voted On . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5Proposal Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5PROPOSAL 1 Election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6PROPOSAL 2 Advisory Vote to Approve the Compensation of our Named Executive

Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7PROPOSAL 3 Ratification of Appointment of Independent Registered Public Accounting

Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8PROPOSAL 4 Approval the Amended and Restated 2004 Incentive Plan . . . . . . . . . . . . . 9

Part 3—Beneficial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . . . . . 26

Part 4—Directors and Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Our Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29Director Selection Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39Director Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Part 5—Corporate Governance Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Director Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Board Leadership Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Role of the Board in Risk Oversight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Meetings of Independent Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Board Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Board Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Governance Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Corporate Governance Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Code of Business Conduct and Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Compensation Committee Interlocks and Insider Participation . . . . . . . . . . . . . . . . . . . . . . . 49Report of the Compensation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Certain Relationships and Related Person Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Communicating with the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Part 6—Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Compensation Discussion and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Shareholder Outreach and Key Changes to 2015 Compensation Program . . . . . . . . . . . . . . 51Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52Key Components of Our Executive Compensation Program . . . . . . . . . . . . . . . . . . . . . . . . 54Long Term Incentive Program Changes for 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612015 President & CEO Target Total Direct Compensation . . . . . . . . . . . . . . . . . . . . . . . . . 62Stock Ownership Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62Anti-Hedging and Anti-Pledging Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62Compensation Recovery/Clawback Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62Compensation Program Risk Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63Retirement Benefits and Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

2015 Proxy Statement 1

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Health, Welfare, and Other Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63Perquisites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63Agreements between the Company and the NEOs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63Role of Compensation Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Role of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64Role of Compensation Consultant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Equity Grant Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Deductibility of Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65Taxation of Nonqualified Deferred Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66Accounting for Stock-Based Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66Executive Compensation Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

Part 7—Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Report of the Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Auditor Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Independence of our Independent Registered Accounting Firm . . . . . . . . . . . . . . . . . . . . . . 78Audit Committee Pre-Approval Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

Part 8—Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Section 16(a) Beneficial Ownership Reporting Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 79Electronic Availability of Meeting Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Proposals for the 2016 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79Other Matters for the 2015 Annual Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

APPENDIX A—CIBER, INC. AMENDED AND RESTATED 2004 INCENTIVE PLAN . . . . . . . . A-1

2 2015 Proxy Statement

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Part 1—Information Concerning Solicitation and Voting

Information about the Annual Meeting

Date: Wednesday, June 24, 2015Time: 9:00am Mountain TimeLocation: The 2015 Annual Meeting of Shareholders will be a ‘‘virtual’’ meeting, which means that

there is no physical location. Instead, the meeting is conducted with all participantslogged into a website:

www.virtualshareholdermeeting.com/CBR2015

Shares Entitled to Vote

Shareholders of record of Ciber common stock (NYSE: CBR) at the close of business on the RecordDate, April 29, 2015, are entitled to vote at the annual meeting, or any adjournment or postponement ofthe annual meeting. Each shareholder entitled to vote at the annual meeting will be entitled to one voteper share of common stock. A list of shareholders entitled to vote at the annual meeting will be availablefor examination at Ciber’s corporate offices for ten days prior to and during the annual meeting. Torequest examination of the list, contact the Corporate Secretary and be prepared to reference theinformation on your proxy card to verify your status as a shareholder.

On the Record Date, there were approximately 78,834,846 shares of common stock outstanding.

Attendance at the Virtual Annual Meeting

To attend the virtual annual meeting, log on to www.virtualshareholdermeeting.com/CBR2015 at least15 minutes prior to the start of the meeting. Register on the website as a shareholder by using the twelve-digit number printed on your proxy card. During the virtual meeting, you may electronically submit yourvote or change or revoke a prior vote. Select the ‘‘Vote’’ button and complete the information from yourproxy card to verify your eligibility to vote. Be sure to characterize whether the vote is your first vote or thewithdrawal of a prior vote. Your vote must be cast before the polls are closed.

Solicitation of Proxies

We pay the cost of printing and mailing all proxy and voting materials and all solicitation expensesassociated with this proxy statement. The Board of Directors of Ciber is soliciting the proxy accompanyingthis proxy statement. Proxies may be solicited by Ciber’s officers, directors, and employees, none ofwhom will receive any additional compensation for such activity. In addition, MacKenzie Partners, Inc.may solicit proxies on our behalf. We anticipate that the cost of MacKenzie’s services will not exceed$15,000. These solicitations may be made personally or by telephone, mail, email, or the Internet. We willreimburse brokerage firms, banks, and other fiduciaries for the expense of forwarding solicitationmaterials to their principals.

Revocation of Proxies

At any time prior to final tabulation of the votes on June 24, 2015, you may change your vote or revokeyour proxy by following one of the procedures set forth below:

• If you are a shareholder of record, deliver a letter, signed and in writing, to our CorporateSecretary stating your desire to revoke your proxy. The letter must be dated later than the date


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stated on the proxy you wish to revoke and must be received before the annual meeting. Addressthe letter to: Ciber, Inc., Attention: Corporate Secretary, 6363 South Fiddler’s Green Circle,Suite 1400, Greenwood Village, Colorado 80111.

• If you are a beneficial shareholder, you may revoke your proxy or change your vote only byfollowing the separate instructions provided by your broker, trust, bank or other nominee.

• Attend the virtual annual meeting and submit your vote prior to the close of the polls. Attendingthe virtual annual meeting will not, absent specific instructions from you, revoke or alter yourproxy.

Other Matters Related to Voting

Householding. Under a procedure called ‘‘householding,’’ we hope to reduce the environmentalimpact and cost of the proxy process by sending a single copy of this proxy statement and all relatedmaterials when multiple shareholders share an address. Any shareholder at such an address may ask toreceive a separate copy of this proxy statement and all related materials. If you wish to receive a separatecopy, contact us and we will promptly mail a complete set to you: Ciber, Inc., Attention: CorporateSecretary—Annual Meeting Document Request, 6363 South Fiddler’s Green Circle, Suite 1400,Greenwood Village, Colorado 80111.

If you are receiving multiple copies of our proxy statement or related materials at your address, you mayrequest householding in the future. Registered shareholders may send that request to our transfer agent,while beneficial shareholders will need to contact each broker or bank where you hold Ciber commonstock.

Quorum. Our bylaws provide that the holders of not less than a majority of the shares of common stockentitled to vote at the annual meeting must participate in order to constitute a quorum and conductbusiness at the annual meeting. We count on your participation by proxy or at the annual meeting to helpus achieve a quorum. So we may verify that we have a quorum in advance of the annual meeting, pleasecomplete your proxy (by mail or electronically) and return it promptly.

Effect of Abstentions on Quorum. The shares of a shareholder whose proxy card is marked to‘‘abstain’’ with respect to any proposal will be included in the number of shares present at the annualmeeting to determine whether a quorum is present.

Brokers. If your shares are held in the name of a bank or broker, the process for voting by mail,telephone or Internet will depend on the processes of your bank or broker, and you should follow thevoting instructions on the form you receive from your bank or broker. If you wish to vote the shares youown beneficially at our annual meeting, you must first request and obtain a legal proxy from your broker orother custodian. If you choose not to provide instructions or a legal proxy, your shares are referred to as‘‘uninstructed shares.’’ Whether your broker or custodian has the discretion to vote these shares on yourbehalf depends on the ballot item. See the full description of each proposal, below, for a completedescription of how uninstructed shares impact the vote on a given proposal.

Online Availability of Information. The proxy statement and 2014 Annual Report on Form 10-K areavailable at www.ciber.com under ‘‘Investor Relations—Financials.’’

This proxy statement is dated April 30, 2015 and is first being mailed to shareholders on or about April 30,2015.


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Part 2—Proposals to Be Voted On

Proposal Summary

The following proposals will be voted on at the 2015 Annual Meeting of Shareholders:

More Information BoardAbout the Proposal Recommendation

Proposal 1: Elect two Class III DirectorsRichard K. Coleman, Jr. Page 6 �For the NomineesMark Lewis

Proposal 2: Advisory vote to approve the compensationPage 7 �For

of our named executive officers

Proposal 3: Ratification of the appointment ofindependent registered public accounting Page 8 �Forfirm

Proposal 4: Approve the Amended and Restated 2004Page 9 �For

Incentive Plan

The following chart summarizes the voting standards and handling of uninstructed shares applicable toeach of the proposals to be voted on at the 2015 Annual Meeting of Shareholders:

Treatment of Uninstructed SharesVoting Standard held by Brokers or Custodians

Proposal 1: Election of Directors Plurality of Votes Present and Not entitled to vote andEntitled to Vote therefore no effect

(Directors receiving the highestnumber of votes are elected)

Proposal 2: Advisory vote to Majority Present and Entitled Not entitled to vote andapprove the to Vote therefore no effectcompensation of ournamed executiveofficers

Proposal 3: Ratification of the Majority Present and Entitled May be voted at discretionappointment of to Vote of brokers and custodiansindependent and are counted in resultsregistered publicaccounting firm

Proposal 4: Approve the Majority Present and Entitled Not entitled to vote andAmended and to Vote therefore no effectRestated 2004Incentive Plan


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Voting Instructions

You may cast your vote by any of the methods listed below. Please refer to the detailed instructionsincluded with your proxy for submission deadlines and step-by-step instructions.

Voting Prior to the Annual Meeting

Mail Telephone Internet

Complete, date, and sign your Call the toll-free telephone Access the website listed onproxy card. Mail it in the number provided with your the proxy cardpre-paid envelope that we have proxy card. Follow the (www.proxyvote.com) andprovided. Be sure to account telephone instructions on the follow the instructions to log on,for delays in the processing of proxy card. You must be including a step where youphysical mail to ensure that prepared to provide the twelve- must provide the twelve-digityour proxy card reaches us by digit number printed on your number printed on your proxyno later than 5:00pm Mountain proxy card. Be sure to call prior card. The deadline forTime on June 23, 2015. to 9:59pm Mountain Time on electronic voting is 9:59pm

June 23, 2015. Mountain Time on June 23,2015.

Important notes about voting prior to the annual meeting:

• Voting in advance of the meeting does not limit your right to attend or vote at theannual meeting.

• You may revoke your proxy or amend your vote at any time prior to the annualmeeting by following the procedures set forth in this proxy statement.

Voting During the Annual Meeting

You may vote electronically during the virtual annual meeting prior to the announcement that the polls areclosed. To vote electronically during the annual meeting, be sure you are logged on towww.virtualshareholdermeeting.com/CBR2015, follow the instructions, be ready to provide thetwelve-digit number printed on your proxy card, and register your vote.

PROPOSAL 1

Election of Directors

We ask you to elect two nominees to serve as Class III Director for the ensuing three-year term to expirein 2018, or until a successor is elected and qualified. The Nominating/Corporate Governance Committee,with the approval of the non-incumbent members of the Board, has nominated the following individuals forre-election, or election, respectively, as Class III Directors (see ‘‘Directors and Executive Officers—Class III Directors’’):

Name Age Director Since

Richard K. Coleman, Jr. 58 2014Mark Lewis 52 —

If either of the nominees becomes unavailable or unwilling to serve as a director, persons named in theproxy intend to cast votes for which they hold proxies in favor of the election of such other person as the


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Board may designate. The Board knows of no reason why either of the nominees would be unable orunwilling to serve on the Board.

Directors are elected by a plurality of votes of shares of the Company present in person or by proxy andentitled to vote at the annual meeting on the election of directors. Cumulative voting is not permitted. Thismeans that the director nominees receiving the highest number of votes will be elected. Brokers and othercustodians are not entitled to vote uninstructed shares on this proposal and such shares will not becounted in evaluating the results. Unless otherwise indicated on the proxy card, proxies will be voted FORthe election of the director nominees.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE ‘‘FOR’’ ALL NOMINEES

PROPOSAL 2

Advisory Vote to Approve the Compensation of our Named Executive Officers

We believe that the shareholder advisory vote on executive compensation represents one of the mostimportant forms of shareholder feedback. Accordingly, following the failed say-on-pay vote at the 2014Annual Meeting, our executive management team and members of our Board engaged in an extensiveprogram of shareholder outreach. In the past year, our leaders have met with and received feedback fromshareholders owning over 30% of our common stock to get their input on important matters includingCiber’s executive compensation practices.

Following these shareholder discussions, we have instituted a number of changes to our compensationprogram, including the following key 2015 program changes:

• Lower target total compensation opportunities for our Named Executive Officers (2015annualized target compensation will be more in line with market practices and will generally belower than 2013 and 2014 levels)

• Introduction of performance-vesting equity awards focusing on long-term value creation (vestingbased on EBITA performance and total shareholder return during a three-year performanceperiod)

• Reduced emphasis on time-vested equity awards (future awards will be increasingly weightedtoward performance-vesting equity)

• Annual incentive program based on annual performance (eliminating quarterly payouts)

We believe that these changes are consistent with the feedback received from our shareholders anddemonstrate our commitment to a strong pay for performance philosophy. The program changes aredescribed in detail in the ‘‘Compensation Discussion and Analysis’’ section of this proxy statement,beginning on page 51.

As required by Section 14A of the Exchange Act, we are asking for your non-binding advisory vote toapprove the compensation of the Company’s named executive officers as disclosed in this proxystatement (which disclosure includes the ‘‘Compensation Discussion and Analysis,’’ the compensationtables, and the narrative disclosures that accompany the compensation tables below). We believe that itis beneficial to seek the vote of our shareholders on the design and effectiveness of our executivecompensation program on an annual basis.


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The Board of Directors asks you to vote ‘‘FOR’’ the following resolution:

‘‘RESOLVED, that the shareholders approve, on an advisory basis, the compensation of theCompany’s named executive officers, as disclosed in this proxy statement, including theCompensation Discussion and Analysis, the executive compensation tables and the relatednarrative discussion.’’

As an advisory vote, this proposal is not binding on the Company or the Board of Directors. However, theCompensation Committee, which is responsible for designing and administering our executivecompensation program, values the opinions of our shareholders and considers the outcome of the priorshareholder votes in making compensation decisions. The Compensation Committee, as well as theBoard of Directors, intends to continue taking into account the outcome of future shareholder votes in itsdeliberations on executive compensation matters.

Approval of this proposal requires the affirmative vote of a majority of shares of the Company present inperson or by proxy at the annual meeting and entitled to vote on the proposal. Brokers and othercustodians are not entitled to vote uninstructed shares on this proposal and such shares will not becounted in evaluating the results. Unless otherwise indicated on the proxy card, proxies will be voted FORapproval of the compensation of named executive officers.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE ‘‘FOR’’

ADVISORY APPROVAL OF THE COMPENSATION OF NAMED EXECUTIVE OFFICERS

PROPOSAL 3

Ratification of Appointment of Independent Registered Public Accounting Firm

The Audit Committee of the Board has appointed Ernst & Young LLP (‘‘Ernst & Young’’) as ourindependent registered public accounting firm for the fiscal year ending December 31, 2015. Servicesprovided to Ciber, Inc. and its subsidiaries by Ernst & Young in fiscal year 2014 are described below (see‘‘Independent Registered Public Accounting Firm—Auditor Fees and Services’’).

Ernst & Young audited our consolidated financial statements for the fiscal year ended December 31,2014.

We are asking our shareholders to ratify the selection of Ernst & Young as our independent registeredpublic accounting firm for the fiscal year ending December 31, 2015. Although shareholder ratification isnot required by our bylaws or otherwise, the Board believes that submitting the selection of Ernst & Youngto the shareholders for ratification is advisable as a matter of good corporate practice. If the shareholdersfail to ratify the appointment of Ernst & Young, the Audit Committee will consider whether or not to retainErnst & Young; however, the Audit Committee may select Ernst & Young notwithstanding the failure ofthe shareholders to ratify this appointment. If the appointment of Ernst & Young is ratified, the AuditCommittee in its discretion may select a different independent registered public accounting firm at anytime during the year if it determines that such a change would be in the best interest of Ciber and itsshareholders.

Representatives of Ernst & Young will be present at the annual meeting to respond to appropriatequestions and make any statements if they desire to do so.

Approval of this proposal requires the affirmative vote of a majority of shares of the Company present inperson or by proxy at the annual meeting and entitled to vote on the proposal. Brokers and other


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custodians are entitled to vote uninstructed shares on this proposal and such votes will be counted inevaluating the results. Please contact your broker or other custodian for information on their voting policywith respect to uninstructed shares. Unless otherwise indicated on the proxy card, proxies will be votedFOR the ratification of the appointment of Ernst & Young LLP.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE ‘‘FOR’’ THE RATIFICATION

OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING

DECEMBER 31, 2015

PROPOSAL 4

Approval of the Amended and Restated 2004 Incentive Plan

We approved certain amendments to and the restatement of the 2004 Incentive Plan (the ‘‘2004 Plan’’).The amendments contemplate changes to the provisions applicable to awards that are intended to betreated as qualified performance-based compensation under Section 162(m) of the Internal RevenueCode, including the performance criteria on which performance goals are based, to improve theCompany’s compensation program and to implement other best practices, among other amendments.Our shareholders are being requested to approve certain amendments that require shareholder approval.The amendments will not increase the number of shares of common stock available for issuance

pursuant to awards granted under the 2004 Plan.

If our shareholders do not approve Proposal 4, the amendments that were approved by our Board ofDirectors that require shareholder approval will not become effective. Namely, the amendments to theprovisions relating to awards that are intended to qualify as performance-based compensation underSection 162(m) of the Internal Revenue Code and the authority to grant stock appreciation rights will notbecome effective. In addition, any awards intended to qualify as performance-based compensation underSection 162(m) of the Internal Revenue Code that were granted contingent on shareholder approval ofthe amendments to the 2004 Plan will be cancelled automatically if shareholder approval is not obtained.All other amendments that were approved by our Board of Directors that do not require shareholderapproval will continue in effect.

The 2004 Plan is the Company’s only active employee equity plan, and as of April 24, 2015, we hadapproximately 5,318,245 shares remaining for the grant of new awards under the 2004 Plan. As ofApril 24, 2015, there were 1,129,333 options outstanding in aggregate under the 2004 Plan with aweighted average exercise price of $4.93 and a weighted average remaining term of 2.95 years, and4,912,005 full value awards that were unvested and outstanding.

Approval of Material Terms of the Performance Goals under Code Section 162(m)

In order to preserve our ability to deduct in full for federal income tax purposes compensation that certainof the Company’s officers may recognize in connection with performance-based awards that may begranted in the future under the 2004 Plan, the shareholders of the Company are also being asked toapprove certain material terms of the performance goals for performance-based awards granted underthe 2004 Plan. Section 162(m) of the Internal Revenue Code generally denies a corporate tax deductionfor annual compensation exceeding $1 million paid to the chief executive officer or to any of the threeother most highly compensated officers of a publicly held company other than the chief financial officer.However, certain types of compensation, including ‘‘qualified performance-based’’ compensation, aregenerally excluded from this limit. To enable compensation in connection with awards granted under the2004 Plan that are contingent on the attainment of performance goals to qualify as ‘‘qualified


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performance-based’’ within the meaning of Section 162(m) of the Internal Revenue Code, theshareholders of the Company are being asked to approve the material terms of the applicableperformance goals. By approving the amendment and restatement of the 2004 Plan, the shareholders willbe approving, among other things: (i) the eligibility requirements for participation in the 2004 Plan; (ii) theperformance criteria upon which certain awards of restricted stock, restricted stock units andperformance bonus awards may be based; (iii) the maximum numbers of shares subject to options, stockappreciation rights, restricted stock and restricted stock units intended to as performance-basedcompensation under Section 162(m) of the Internal Revenue Code that may be granted to a participant inany calendar year; and (iv) the maximum dollar amount that a participant may receive upon settlement ofa performance bonus award.

Material Changes to the 2004 Plan

The following summary highlights the proposed material changes to the 2004 Plan.

• Amendments have been made to the 2004 Plan to improve the Company’s compensationprogram and to comply with some of the policies recommended by Institutional ShareholderServices, including:

• The share counting provision has been revised to prohibit the ‘‘recycling’’ of shares thatare used to pay tax withholding or exercise price for new options granted under the 2004Plan;

• A provision has been added to preclude the payment of dividends or dividendequivalents payable on restricted stock, restricted stock units or other share-basedawards that are full-value awards that vest on attainment conditions unless and until theunderlying awards vest;

• The 2004 Plan provides for minimum vesting requirements applicable to awards grantedafter the 2015 Annual Meeting of Shareholders; and

• The option and stock appreciation right repricing prohibition provisions have beenrevised to also include other arrangements that are considered ‘‘repricings’’ byInstitutional Shareholder Services.

• A ‘‘clawback’’ provision has been added permitting the Company to recover from participantsawards or payments made under the 2004 Plan as may be required under the Dodd-Frank Act.

• The change in control definition has been revised to reflect a definition that is more consistentwith market practice, to clarify that the applicable transaction must be completed in order beforeany change in control provisions are given effect under the plan and to exclude the carve out ofacquisitions by existing founding shareholders.

• The 2004 Plan has added the authority to grant cash-based awards that are intended to qualify asperformance-based compensation under Section 162(m) of the Internal Revenue Code. Themaximum cash amount that may be paid under performance-based awards granted to any oneparticipant in a calendar year may not exceed $5 million.

• The annual maximum limit applicable to awards granted to any one participant has been clarifiedto reflect that the limit applies only to awards that are intended to qualify as performance-basedcompensation under Section 162(m) of the Internal Revenue Code.


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• The maximum number of shares subject to awards that are intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code that may be granted toany participant in a calendar year has been increased from 1,000,000 shares to 3,000,000shares.

• The calculation of the annual limitation applicable to awards granted to any participant that areintended to qualify as performance-based compensation under Section 162(m) of the InternalRevenue Code has been changed from a rolling 12-month basis to a calendar year calculation.

• The list of performance criteria on which performance goals may be based for awards that areintended to qualify as performance-based awards under Section 162(m) of the Internal RevenueCode has been expanded to include additional performance criteria.

• The 2004 Plan has added the authority to grant additional types of awards, including restrictedstock units, stock appreciation rights, cash-based awards that vest based on performanceconditions, dividend equivalent rights and other share-based awards.

• The capitalization adjustment provision has been revised to provide for (i) automatic,non-discretionary adjustments to the share reserve, incentive stock option limitation,Section 162(m) annual limitations and number of shares and exercise price, if applicable, subjectto awards for certain capitalization events and (ii) discretionary adjustments for capitalizationevents that may not always require adjustments to the 2004 Plan and award agreement terms.

• The tax withholding provision has been revised to broaden its application and expand themethods of tax withholding that can be used for awards granted under the 2004 Plan.

• The automatic expiration upon the tenth anniversary of the 2004 Plan has been eliminated.


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Key Terms of the Plan at a Glance

The following is a summary of the key provisions of the 2004 Plan, as set forth and stated herein.

Plan Term: The 2004 Plan, as amended and restated, became effective onMarch 27, 2015, the date the Board of Directors adopted it, and willcontinue in effect until terminated by the Board of Directors.

Eligible Participants: Employees, consultants and directors of the Company and itsaffiliates generally are eligible to receive non-qualified stock option,restricted stock, stock appreciation rights, restricted stock units andother share-based awards under the 2004 Plan.

Only employees of the Company or a subsidiary meeting therequirements of the Internal Revenue Code are eligible to receive‘‘incentive stock options,’’ within the meaning of Section 422 of theInternal Revenue Code (ISOs) under the 2004 Plan.

Shares Available for Awards: 20,350,000 shares of common stock have been reserved forissuance pursuant to awards under the 2004 Plan, subject toadjustment in the event of certain changes in the capitalization of theCompany. As of April 24, 2015, 5,318,245 shares of common stockwere available for the grant of future awards under the 2004 Plan.The 2004 Plan has not been amended to increase the number ofshares of common stock reserved for issuance under the 2004 Plan.

Award Types: (1) Non-Qualified Stock Options and Incentive Stock Options

(2) Restricted stock

(3) Stock appreciation rights

(4) Restricted stock units

(5) Dividend equivalent rights

(6) Other share-based awards

(7) Performance-based awards, whether in cash or equity, (intendedto qualify under Internal Code Section 162(m))

(8) Cash-based awards that are performance-based awards

Award Terms Options and Stock Appreciation Rights (SARs) have a term of no(Exercisability Period): longer than 10 years.

ISOs granted to ten percent owners will have a term of no longer thanfive years.


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ISO Limits: No more than the maximum number of shares reserved for issuancemay be issued upon the exercise of ISOs granted under the 2004Plan.

162(m) Share Limits: Section 162(m) of the Internal Revenue Code requires, among otherthings, that the maximum number of shares awarded to an individualduring a specified period must be approved by the shareholders inorder for the awards granted under the plan to be eligible fortreatment as performance-based compensation that will not besubject to the $1 million limitation on tax deductibility forcompensation paid to certain specified senior executives.

Accordingly, the 2004 Plan limits awards that intended to qualify asperformance-based compensation under Section 162(m) of theInternal Revenue Code granted to an individual participant in anyfiscal year to:

(1) No more than 3,000,000 shares subject to all awards granted to aparticipant;

(2) No more than $5 million payable in cash with respect to all awardgranted to a participant.

Minimum Vesting: Vesting is generally determined by the Compensation Committeewithin limits set forth in the 2004 Plan, except that no award may fullyvest before the first anniversary of the grant date.

Not Permitted: (1) Repricing or reducing the exercise price of a share option or SARbelow the per share exercise price as of the date of grant withoutshareholder approval.

(2) Canceling, surrendering or substituting any outstanding option orSAR in exchange for (i) the grant of a new option or SAR with a lowerexercise price, or (ii) other awards or a cash payment at a time whenthe exercise price of the option or SAR is greater than the fair marketvalue of a share.

(3) Adding shares back to the number of shares available forissuance when (i) shares covered by an option or SARs are tenderedor withheld in payment of the exercise price or tax withholding for theexercise of the option or SAR, (ii) shares are not issued or deliveredas a result of net settlement of an outstanding SAR, and (iii) sharesare repurchased on the open market with the proceeds of theexercise of an option.

Summary of the 2004 Plan

The following summary of certain material features of the 2004 Plan is qualified in its entirety by referenceto the 2004 Plan, which is attached to this proxy statement as Appendix A.


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Purpose of 2004 Plan

The purposes of the 2004 Plan are to provide the employees and consultants of the Company and itsaffiliates or directors of the Company selected for participation in the Plan with added incentives tocontinue in the long-term service of the Company and to create in such persons a more direct interest inthe future success of the operations of the Company by relating incentive compensation to increases inshareholder value, so that the income of such persons is more closely aligned with the income of theCompany’s shareholders. The 2004 Plan is also designed to enhance the ability of the Company toattract, retain and motivate, employees, consultants and directors by providing an opportunity forinvestment in the Company.

Shares Reserved for Issuance under 2004 Plan

Shares Reserved. As proposed, the total number of shares of our common stock that will be authorizedand available for issuance pursuant to awards granted under the 2004 Plan is 20,350,000 shares, subjectto adjustment in the event of specified capitalization events of the Company. As of April 24, 2015,5,318,245 shares of common stock were available for the grant of future awards under the 2004 Plan. The2004 Plan has not been amended to increase the number of shares of common stock reserved forissuance under the plan.

Shares Reissuable Under the 2004 Plan. To the extent that an award granted under the 2004 Planterminates, expires, lapses for any reason, or if an award other than an option or SAR is settled in cash,any shares subject to the award will again be available for the grant of an award pursuant to the 2004Plan.

Shares Not Reissuable Under the 2004 Plan. The following shares will be deducted from the aggregatenumber of shares available for future awards: (i) shares surrendered by a participant or withheld by theCompany to satisfy the grant or exercise price or tax withholding obligation under an option or SAR;(ii) shares not issued or delivered as a result of the net settlement of an option or a SAR and (iii) sharesrepurchased by the Company on the open market with the proceeds of the exercise price from options.

Shares Not Counted Against Share Reserve Pool Under the 2004 Plan. To the extent permitted byapplicable law or any stock exchange rule, shares issued in assumption of, or in substitution for, anyoutstanding awards of any entity acquired in any form of combination by the Company or an affiliate willnot be counted against shares available for grant pursuant to the 2004 Plan. The payment of a dividendequivalent right in cash in conjunction with any outstanding awards will not be counted against the sharesavailable for issuance under the Amended and Restated 2004 Plan.

Award Limits for Code Section 162(m) Awards

Under Section 162(m) of the Internal Revenue Code, no deduction is allowed in any taxable year of ourCompany for compensation in excess of $1 million paid to our chief executive officer and the three otherhighest compensated executive officers of our Company (other than the chief financial officer). Anexception to this rule applies to compensation that is paid pursuant to a plan approved by shareholdersand that specifies, among other items, the maximum number of shares with respect to which options andstock appreciation rights may be granted to eligible participants under the plan during a specified period,and such options are granted with an exercise or strike price equal to at least fair market value as of thedate of grant, and in the case of full value awards, the plan specifies the maximum amount ofcompensation that may be paid to an employee during a specified period, and the payment of such awardis subject to satisfaction of specified performance objectives. For additional information regardingperformance-based awards intended to comply with Section 162(m) of the Internal Revenue Code and


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the applicable performance goals and criteria that may be established for such awards, please refer to thediscussion under the heading ‘‘Performance-Based Awards to Covered Employees,’’ below.

In any calendar year, the maximum number of shares with respect to one or more awards that may begranted to any one participant during the year under the 2004 Plan is 3,000,000 shares, subject toadjustment in the event of specified capitalization events of our Company, and the maximum amount thatmay be paid in cash during any calendar year with respect to any award is $5 million. To the extentrequired by Section 162(m) of the Internal Revenue Code, if an option is canceled, the shares subject tothe cancelled option will continue to count against the maximum number of shares with respect to whichthe option may be granted to a participant.

Awards

Under the 2004 Plan, the following awards may be granted: stock options (including ‘‘incentive stockoptions’’ within the meaning of Section 422 of the Internal Revenue Code), restricted stock, stockappreciation rights, restricted stock units, other share-based awards, and stock-based and cash-basedawards that qualify as performance-based compensation under Section 162(m) of the Internal RevenueCode (all such grants are collectively referred to as ‘‘awards’’).

Eligibility

Incentive stock options may be granted only to our employees and to employees of any of oursubsidiaries meeting the requirements of the Internal Revenue Code. Awards other than incentive stockoptions may be granted to our non-employee directors and to employees of, and consultants to, theCompany and any of its affiliates. As of April 24, 2015, seven non-employee directors and 5,696employees were eligible to participate in the 2004 Plan.

Administration

The 2004 Plan provides that it will be administered by our Board of Directors, unless the Board ofDirectors elects to delegate administration responsibilities to a committee. In this proposal, we refer to theBoard of Directors or the committee to which administration of the 2004 Plan has been delegated as the‘‘Committee’’. Unless otherwise determined by our Board of Directors, the 2004 Plan requires that anycommittee to which administration responsibilities are delegated must consist solely of two or moremembers of our Board of Directors, each of whom is an ‘‘outside director’’ within the meaning ofSection 162(m) of the Internal Revenue Code, a ‘‘non-employee director’’ satisfying the requirements ofSection 16 of the Securities Exchange Act of 1934, as amended, and an ‘‘independent director’’ under theNew York Stock Exchange rules (or other principal securities market on which our common stock istraded). The Committee has the sole authority to grant awards and sole and exclusive discretion tointerpret and administer the 2004 Plan. The Committee determines the eligible individuals who willreceive grants and the precise terms of the grants (including accelerations or waivers of any restrictions,and the conditions under which such accelerated vesting or waivers occur, such as in connection with aparticipant’s death, subject to certain limitations in the case of performance-based awards that areintended to qualify as qualified performance-based compensation under Section 162(m) of the InternalRevenue Code). The Committee has the authority to amend or modify the terms of an outstanding award,except that an amendment that materially and adversely impacts the rights under an outstanding awardwill require prior written consent from the participant, unless the amendment is necessary or desirable tofacilitate compliance with applicable law or to avoid adverse tax consequences under Section 409A of theInternal Revenue Code. The decisions of the Committee will be final and binding on all holders of awards.To the extent permitted by applicable law, our Board of Directors also may delegate to a committee of oneor more members of our Board of Directors or one or more officers of our Company the authority to grant


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or amend awards to participants other than employees who are subject to Section 16 of the SecuritiesExchange Act of 1934, as amended, employees subject to Section 162(m) of the Internal Revenue Code,or officers or directors of our Company to whom authority to grant or amend awards has been delegated.

Stock Options

The 2004 Plan authorizes the grant of incentive stock options, which are intended to satisfy therequirements of Section 422 of the Internal Revenue Code, and non-qualified stock options, which do notsatisfy the requirements of Section 422 of the Internal Revenue Code. The exercise price of stock optionsgranted under the 2004 Plan may not be less than 100% (or higher in the case of certain incentive stockoptions) of the fair market value of a share of our common stock on the date of grant. While our commonstock is traded on an established stock exchange, ‘‘fair market value’’ means, as of any given date, theclosing price of a share of our common stock as quoted on the principal exchange on which our commonstock is listed for such date, or if no sale occurred on such date, the first trading date immediately prior tosuch date during which a sale occurred. As of April 24, 2015, the closing price on the New York StockExchange (‘‘NYSE’’) of our common stock was $3.96. Options granted under the 2004 Plan will vest at therate specified by the Committee, except that no option will fully vest prior to the first anniversary of thedate of grant. No stock option will be exercisable more than ten years after the date it is granted.

The Committee determines the methods by which the exercise price of options is paid, including thefollowing: in cash or check, in shares, through a broker-dealer sale and remittance procedure pursuant towhich the participant effects a same-day exercise of the option and sale of the purchased shares in orderto cover the exercise price for the purchased shares and the applicable withholding taxes, a ‘‘netexercise’’ arrangement pursuant to which the number of shares issuable upon exercise of the option isreduced by a number of shares having a fair market value equal to the exercise price and tax withholding.In addition, the Committee may provide financial assistance to a participant who wishes to exercise his orher outstanding options, provided that the participant is not an executive officer or member of the Board ofDirectors, by allowing the participant to deliver an interest-bearing full recourse promissory note orthrough a third-party loan guaranteed by the Company in the amount of the exercise price and anyassociated withholding taxes.

An option may not be exercised for a fraction of a share. Until the underlying shares are issued, no right tovote or receive dividends or any other rights as a shareholder will exist with respect to the shares subjectto an option, notwithstanding the exercise of the option. No adjustment will be made for a dividend orother right for which the record date is prior to the date the shares are issued, except in the case of acapitalization event of the Company as provided under the terms of the 2004 Plan.

If a participant ceases to provide services to the Company or any affiliate of the Company, the participantmay exercise his or her option within such period of time as is specified in the award agreement to theextent that the option is vested on the date of termination (but in no event later than the expiration of theterm of such option as set forth in the award agreement). Unless otherwise provided by the Committee, ifon the date of termination the participant is not vested as to his or her entire option, the unvested portionof the option will be forfeited and the shares covered by the unvested portion of the option will revert to thePlan. If after termination of service the participant does not exercise his or her option within the timespecified by the Committee, the option will terminate, and the shares covered by such option will revert tothe Plan.

Restricted Stock Awards

An award of restricted stock is a direct grant of common stock, subject to such restrictions ontransferability and other restrictions as the Committee may impose (including, without limitation,


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limitations on the right to vote the underlying shares or the right to receive dividends with respect to theunderlying shares). These restrictions may lapse separately or in combination at such times, pursuant tosuch circumstances, in such installments, or otherwise, as the Committee determines at the time of thegrant of the award or thereafter, except that no award of restricted stock may fully vest prior to the firstanniversary of the grant date. Generally, any shares subject to restrictions are forfeited upon terminationof employment. The price, if any, that participants are required to pay for each share of restricted stock willbe set by the Committee and will be paid in a form approved by the Committee, which may be cash,services rendered or to be rendered to us or an affiliate of our Company, or in another form of payment. Tothe extent that any dividends are payable with respect to a restricted stock award that vests based on theattainment of performance conditions, the dividends will not be paid unless the underlying award vests.

Stock Appreciation Rights

Stock appreciation rights, or ‘‘SARs,’’ typically provide for payments to the holder based upon increasesin the price of our common stock from the date the SAR was granted to the date that the right is exercised.The Committee will generally determine when the SAR will vest and become exercisable, except that noSAR may fully vest prior to the first anniversary of the grant date. The grant price of a SAR may not be lessthan the fair market value of a share on the date of grant of the SAR. The Committee determines the termof a SAR, but no SAR will be exercisable more than ten years after the date it is granted.

The Committee may elect to settle exercised SARs in cash, in shares, or in a combination of cash andshares. Until the shares are issued, no right to vote or receive dividends or any other rights as ashareholder will exist with respect to the shares subject to a SAR, notwithstanding the exercise of theSAR. No adjustment will be made for a dividend or other right for which the record date is prior to the datethe shares are issued, except in the case of a capitalization event as provided under the terms of the 2004Plan. Upon termination of a participant’s employment (other than by reason of death or retirement), aSAR will generally be subject to the same conditions as apply to stock options.

Restricted Stock Units

Restricted stock units are denominated in unit equivalent of shares and are typically awarded toparticipants without payment of consideration. Restricted stock unit units may be subject to vestingconditions based upon the passage of time or the attainment of performance-based conditions asdetermined in the discretion of the Committee, except that no restricted stock units may fully vest beforethe first anniversary of the grant date. Except as otherwise determined by the Committee at the time of thegrant of the award or thereafter, any restricted stock units that are not vested as of the date of theparticipant’s termination of service will be forfeited. Unlike restricted stock, the stock underlying restrictedstock units will not be issued until the restricted stock units have vested. In addition, recipients ofrestricted stock units generally have no voting or dividend rights until the vesting conditions are satisfiedand the underlying shares are issued. Restricted stock units may be settled in shares, cash or acombination of both. On the vesting date (or such later date as determined by the Committee and set forthin the agreement evidencing the award), the participant will be issued one unrestricted, fully transferableshare for each restricted stock unit scheduled to be paid out on such date and not previously forfeited.Alternatively, settlement of a restricted stock unit may be made in cash (in an amount reflecting the fairmarket value of shares that would have been issued) or any combination of cash and shares, asdetermined by the Committee, in its sole discretion. The Committee may authorize dividend equivalentsto be paid on outstanding restricted stock units. If dividend equivalents are authorized to be paid, theymay be paid in cash or shares at the time dividends are declared on the shares or at the time the awardsvest, in the discretion of the Committee. To the extent that any dividend equivalents are payable withrespect to restricted stock units that vest based on the attainment of performance conditions, the dividendequivalents will not be paid unless the underlying award vests.


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Other Share-Based Awards

The Committee is authorized under the 2004 Plan to make any other award that is not inconsistent withthe provisions of the 2004 Plan and that by its terms involves or might involve the issuance of shares, or ofa right vesting based on the passage of time, the occurrence of one or more events, or the satisfaction ofperformance criteria or other conditions, or the issuance of any other security with the value derived fromthe value of the shares. The Committee may elect to settle these awards in cash, in shares, or in acombination of cash and shares. The Committee may establish the exercise price, if any, of any othershare-based awards granted under the Plan, except that the exercise price may not be less than thehigher of (i) the fair market value of a share on the date of grant for an award that is intended to be exemptfrom Section 409A of the Internal Revenue Code or (ii) the par value of a share on the date of grant,unless otherwise permitted by applicable law. To the extent that any dividend equivalents are payablewith respect to a share-based award that is a full value award that vests based on the attainment ofperformance conditions, the dividend equivalents will not be paid unless the underlying award vests.

Performance-Based Awards to Covered Employees

Performance-based awards include awards other than options or SARs which comply with IRSrequirements under Section 162(m) of the Internal Revenue Code for performance-based compensation.The Committee may designate employees as ‘‘covered employees’’ (our chief executive officer and ourthree other highest compensated executive officers other than our chief financial officer) whosecompensation for a given fiscal year may be subject to the limit on deductible compensation imposed bySection 162(m) of the Internal Revenue Code. The Committee may grant to such covered employeesawards that are paid, vest or become exercisable upon the attainment of Company performance goalswhich are related to one or more of the following performance criteria as applicable to us or any of ouraffiliates, divisions or operating business units, or the performance of an individual, any of whichperformance criteria may be measured either in absolute terms or as compared to any incrementalincrease or as compared to results of a peer group or securities or stock market index: earnings pershare, whether in total or from continuing operations, income, net income (either before or after taxes,amortization, interest and/or depreciation), operating income (either before or after restructuring andamortization charges), sales or revenue, gross or net profit margin, return on operating assets or netassets, return on shareholders’ equity, return on capital, return on sales, economic value added, stockprice appreciation, total shareholder return (measured in terms of stock price appreciation and dividendgrowth), or earnings or net earnings (either before or after interest, taxes, depreciation and amortizationor either before or after interest, taxes and amortization), operating earnings, cash flow (including, withoutlimitation, operating cash flow and free cash flow), cash flow return on capital, productivity, expense,operating efficiency, customer satisfaction, working capital, price per share, market share, new products,customer penetration, technology and risk management.

At the time of grant, the Committee may specify one or more objectively determinable adjustmentspermitted under the 2004 Plan that may be made to one or more of the performance goals.

Transferability of Awards

Except as otherwise provided by the Committee, no award granted under the 2004 Plan may beassigned, transferred, or otherwise disposed of by a participant other than by will or the laws of descentand distribution or, with respect to awards other than incentive stock options, under a registered offeringon the terms and conditions as determined by the Committee. The Committee by express provision in theaward agreement may permit an award (other than an incentive stock option) to be transferred to certainfamily members of the participant, to a trust for the benefit of the participant or certain family member ofthe participant, to a partnership, limited liability company or corporation in which the participant or certain


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family member of the participant are the only partners, members or shareholders, or for charitabledonations; provided that the assignee is bound by and subject to all of the terms and conditions of the2004 Plan and the award agreement relating to the transferred award, and will execute an agreementsatisfactory to us evidencing the obligations.

Changes in Control

Except as may otherwise be provided in an agreement evidencing an award or other agreement, in theevent of a change in control of the Company, unless an award is converted, assumed, substituted orreplaced by the successor corporation, each award outstanding under the 2004 Plan will immediatelyvest, and following the change in control, the awards will immediately terminate. The Committee may alsoprovide at any time that an award will automatically accelerate in connection with a change in control,regardless of whether it is assumed or not. Where awards are assumed, substituted or otherwisecontinued after a change in control of the Company, the Committee may provide that one or more awardswill automatically accelerated upon an involuntary termination of the participant’s employment or servicewithin a designated period following the effective date of a change of control. ‘‘Change in control’’ asreferenced in this Proposal 4 has the meaning given it in the 2004 Plan, a copy of which is attached to thisproxy statement as Appendix A.

Adjustments Upon Changes in Capitalization

In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation,or other distribution (other than normal cash dividends) of assets to our shareholders or any other changein capitalization affecting our common stock other than certain equity restructurings identified in the 2004Plan, the Committee has discretion to make appropriate adjustments in the number and type of sharessubject to the 2004 Plan, the terms and conditions of any award outstanding under the 2004 Plan, and thegrant or exercise price of any such award. In the case of certain equity restructurings as specified in the2004 Plan, the number and type of securities subject to each outstanding award and the grant or exerciseprice will be adjusted without any discretion on the part of the Committee.

Amendment and Termination of Plan

With the approval of our Board of Directors, at any time and from time to time, the Board may terminate,amend or modify the 2004 Plan, except that the Board may not, without prior shareholder approval,amend the 2004 Plan in any manner that would require shareholder approval to comply with anyapplicable laws, rules or regulations, including increasing the number of shares available under the 2004Plan (other than any adjustment), or permitting the Board to extend the exercise period for an optionbeyond ten years from the date of grant. Except as may be required to avoid adverse tax consequencesunder Section 409A of the Internal Revenue Code or as may be required or desirable to facilitatecompliance with applicable law, no termination, amendment or modification of the 2004 Plan mayadversely affect in any material way any award granted under the 2004 Plan without the consent of theparticipant.

In addition, absent approval of our shareholders, no option or SAR may be amended to reduce theexercise price or grant price of the shares subject to such option or SAR and (except as permitted underthe provisions of the 2004 Plan dealing with certain capitalization adjustments and change in control) nooption or SAR may be cancelled in exchange for the grant of an option or SAR having a lower per shareexercise price or for a cash payment or another award at a time when the option or SAR has a per shareexercise price that is higher than the fair market value of the shares.


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Clawback/Recovery

Awards are subject to recoupment under any ‘‘clawback’’ policy that the Company is required to adoptunder applicable stock exchange rules or as otherwise required by the Dodd-Frank Act or otherapplicable law.

Plan Term

The 2004 Plan will continue in effect until terminated by our Board of Directors, but no incentive stockoptions may be granted under the 2004 Plan after the tenth anniversary of the date the amendments tothe 2004 Plan were approved by our Board of Directors. Any awards that are outstanding at the time the2004 Plan terminates will remain in force according to the terms of the 2004 Plan and the applicableagreement evidencing the award.

Federal Income Tax Consequences

The following is a summary of the U.S. federal income tax consequences applicable to equity awardsunder the 2004 Plan based on current U.S. federal income tax laws. The 2004 Plan is not qualified underSection 401(a) of the Internal Revenue Code. The summary is general in nature and is not intended

to cover all tax consequences that may apply to a particular employee, director or to the

Company. The provisions of the Internal Revenue Code and regulations thereunder relating to

these matters are complicated, may change and their impact in any one case may depend upon

the particular circumstances. Further, this summary does not discuss the tax consequences of a

participant’s death or the provisions of any income tax laws of any municipality, state or foreign

country in which a participant may reside.

Nonqualified Stock Options. With respect to nonqualified stock options: (i) no income is recognizedby the participant at the time the nonqualified stock option is granted; (ii) generally, at exercise, ordinaryincome is recognized by the participant in an amount equal to the difference between the option exerciseprice paid for the shares and the fair market value of the shares on the date of exercise and we are entitledto a tax deduction in the same amount (subject to the restrictions on deductibility described under‘‘Section 162(m) Limitation’’ below); and (iii) upon disposition of the shares, any gain or loss is treated ascapital gain or loss. If the options are exercised and the shares acquired are sold on the same date,generally, the difference between the option exercise price paid for the shares and the sale price isrecognized as ordinary income and no capital gain or loss is reported. If required, income tax must bewithheld from the participant on the income recognized by the participant upon exercise of a nonqualifiedstock option.

Incentive Stock Options. The grant of an incentive stock option under the 2004 Plan will not result inany federal income tax consequences to the participant or to us. A participant recognizes no federaltaxable income upon exercising an incentive stock option (subject to the alternative minimum tax rulesdiscussed below), and we receive no deduction at the time of exercise. In the event of a disposition ofcommon stock acquired upon exercise of an incentive stock option, the tax consequences depend uponhow long the participant has held the shares of common stock. If the participant does not dispose of theshares within two years after the incentive stock option was granted, nor within one year after theincentive stock option was exercised, the participant will recognize a long-term capital gain (or loss) equalto the difference between the sale price of the shares and the exercise price. We are not entitled to anydeduction under these circumstances.

If the participant fails to satisfy either of these holding periods, he or she must recognize ordinary incomein the year of the disposition (referred to as a ‘‘disqualifying disposition’’). The amount of such ordinary


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income generally is the lesser of (A) the difference between the amount realized on the disposition andthe exercise price or (B) the difference between the fair market value of the common stock on the exercisedate and the exercise price. Any gain in excess of the amount taxed as ordinary income will be treated asa long or short-term capital gain, depending on whether the common stock was held for more than oneyear. In the year of the disqualifying disposition, we are entitled to a deduction equal to the amount ofordinary income recognized by the participant, subject to possible limitations imposed by Section 162(m)of the Internal Revenue Code.

The ‘‘spread’’ under an incentive stock option—i.e., the difference between the fair market value of theshares at the time of exercise and the exercise price—is classified as an item of adjustment in the year ofexercise for purposes of the alternative minimum tax. If a participant’s alternative minimum tax liabilityexceeds such participant’s regular income tax liability, the participant will owe the larger amount of taxes.The alternative minimum tax will not apply with respect to incentive stock options if the participant sells theshares within the same calendar year in which the incentive stock options are exercised. However, such asale of shares within the same year of exercise will constitute a disqualifying disposition, as describedabove.

Stock Appreciation Rights. Upon exercise of a SAR, the participant will recognize ordinary income(treated as compensation) in an amount equal to the difference between the aggregate fair market valueof the shares with respect to the number of shares that the SAR is exercised over the aggregate exerciseprice for such shares subject to the SAR. We generally will be entitled to a business expense deduction inthe same amount and at the same time as the participant recognizes ordinary compensation income(subject to the limits of Section 162(m) of the Internal Revenue Code). If required, income tax must bewithheld from the participant on the income recognized by the participant upon exercise of a SAR.

Restricted Stock. In the absence of a Section 83(b) election (as described below), a participant whoreceives restricted stock will recognize no income at the time of grant. When the restrictions lapse, aparticipant will recognize ordinary income (treated as compensation) equal to the fair market value of thestock when the restrictions lapse over the amount paid (if any) for the stock. As the restrictions applicableto a grant of restricted stock lapse (for example, if the restrictions on 20% of a grant lapse on eachanniversary of the grant date), the participant will include the applicable portion of the shares that vests asordinary income (treated as compensation). The participant’s basis in the common stock is equal to theamount included in income on the expiration of the restrictions and the amount paid (if any), and theholding period will begin when the restrictions end. Any disposition of the restricted stock will result in along- or short-term capital gain or loss (depending on the time the common stock is held after therestrictions end). We generally will be entitled to a deduction equal to the fair market value of the commonstock when it is included in the participant’s income, and will also be entitled to a business expensededuction for dividends paid to the participant (if any) on common stock that remains subject torestrictions (in each case subject to the limits of Section 162(m) of the Internal Revenue Code).

If a participant makes a Section 83(b) election within 30 days of the grant of the award, the participantmust recognize the fair market value of the restricted stock on the date of grant as ordinary income(treated as compensation) as of the date of grant, and the holding period would begin at the time therestricted stock is granted. We generally would be entitled to a corresponding business expensededuction for the grant, but dividends on the stock would not be deductible. Any subsequent disposition ofthe stock by the participant, other than by forfeiture, would result in capital gain or loss, which would belong- or short-term, depending on the holding period. Upon a subsequent forfeiture of restricted stock withrespect to which a Section 83(b) election has been made, no deduction will be allowed in respect of theamount included as income at the time the Section 83(b) election was made; however, the participant willgenerally be allowed a loss deduction equal to the amount (if any) the participant paid for the restrictedstock over the amount (if any) we paid the participant for the restricted stock at the time it is forfeited.


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If required, income tax must be withheld from the participant on the income recognized by the participantat the time the restrictions on the restricted stock lapse (or grant of the restricted stock, in the event theparticipant makes a Section 83(b) election).

Restricted Stock Units. A participant will not recognize any income at the time a restricted stock unit isgranted, nor will we be entitled to a deduction at that time. When payment on a restricted stock unit ismade, the participant will recognize ordinary income in an amount equal to the fair market value of thecommon stock received (or if the restricted stock unit is settled in cash, the cash amount). If required,income tax must be withheld on the income recognized by the participant. We will receive a deduction forfederal income tax purposes equal to the ordinary income recognized by the participant, subject to thelimits of Section 162(m) of the Internal Revenue Code.

Performance-Based Awards. A participant will generally not recognize income at the time an awardbased on achievement of performance objectives is granted, nor will we be entitled to a deduction at thattime. When payment on the performance award is made, the participant generally will recognize ordinaryincome in an amount equal to the fair market value of the common stock received (or if the award issettled in cash, the cash amount). If required, income tax must be withheld on the income recognized bythe participant. We will receive a deduction for federal income tax purposes equal to the ordinary incomerecognized by the participant, subject to the limits of Section 162(m) of the Internal Revenue Code.

Dividend Equivalents. A recipient of dividend equivalents generally will recognize ordinary income atthe time the dividend equivalent is paid. If required, income tax must be withheld on the incomerecognized by the participant. We will receive a deduction for federal income tax purposes equal to theordinary income recognized by the participant, subject to the limits of Section 162(m) of the InternalRevenue Code.

Section 162(m) Limitation. In general, under Section 162(m) of the Internal Revenue Code, incometax deductions of publicly-held corporations may be limited to the extent total compensation (includingbase salary, annual bonus, stock option exercises and non-qualified benefits paid) for specified executiveofficers exceeds $1 million (less the amount of any ‘‘excess parachute payments’’ as defined inSection 280G of the Internal Revenue Code) in any one year. However, under Section 162(m), thededuction limit does not apply to certain ‘‘performance-based compensation’’ as provided for by theInternal Revenue Code and established by an independent compensation committee which is adequatelydisclosed to, and approved by, shareholders. In particular, stock options and SARs will satisfy the‘‘performance-based compensation’’ exception if the awards are made by a qualifying compensationcommittee, the underlying plan sets the maximum number of shares that can be granted to any personwithin a specified period and the compensation is based solely on an increase in the stock price after thegrant date (i.e., the option exercise price is equal to or greater than the fair market value of the stocksubject to the award on the grant date). Performance or incentive awards, such as performance-basedrestricted stock and restricted stock units granted under the 2004 Plan may qualify as ‘‘qualifiedperformance-based compensation’’ for purposes of Section 162(m) if such awards are granted or vestupon the pre-established objective performance goals described above.

We have attempted to structure the 2004 Plan in such a manner that the Committee may grant stockoptions, SARs and performance and incentive awards granted under the 2004 Plan in a manner thatremuneration attributable to such awards will not be subject to the $1 million limitation. However, therecan be no assurance that such compensation under the 2004 Plan will be fully deductible under allcircumstances. In addition, in the event that the Committee determines that it is advisable to grantperformance-based awards that are not intended to qualify as performance-based compensation, theCommittee may make such grants without satisfying the requirements of Code Section 162(m) and basevesting on performance measures other than those set forth above.


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Section 409A. Section 409A of the Internal Revenue Code imposes certain requirements onnon-qualified deferred compensation arrangements. These include requirements on an individual’selection to defer compensation and the individual’s selection of the timing and form of distribution of thedeferred compensation. Section 409A also generally provides that distributions must be made on orfollowing the occurrence of certain events (i.e., the individual’s separation from service, a predetermineddate, or the individual’s death). Section 409A imposes restrictions on an individual’s ability to change hisor her distribution timing or form after the compensation has been deferred. For certain individuals whoare officers, Section 409A requires that such individual’s distribution commence no earlier than sixmonths after such officer’s separation from service.

Certain awards under the 2004 Plan may be designed to be subject to the requirements of Section 409Ain form and in operation. For example, restricted stock units that provide for a settlement date followingthe vesting date may be subject to Section 409A. If an award under the 2004 Plan is subject to and fails tosatisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income onthe amounts deferred under the award, to the extent vested, which may be prior to when thecompensation is actually or constructively received. Also, if an award that is subject to Section 409A failsto comply with the requirements of Section 409A, Section 409A imposes an additional 20% federalpenalty tax on compensation recognized as ordinary income, as well as interest on such deferredcompensation.

New Plan Benefits

Future awards to employees, officers, directors and consultants under the 2004 Plan are generally madeat the discretion of the Committee. Therefore the benefits and amounts that will be received or allocatedunder the 2004 Plan in the future are not determinable at this time.


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Past Grants under the 2004 Plan

As of April 24, 2015, awards covering 26,408,510 shares of the common stock had been granted underthe 2004 Plan. The following table shows information regarding the grants of those awards among thepersons and groups identified below.

Prior Grants Under the 2004 Plan

Performance RSUs

Options and RSUs Target MaximumNo. of Shares No. of Shares No. of Shares

Michael Boustridge, President & CEO* 891,934 216,254 648,762Christian Mezger, EVP & CFO 836,611 68,147 204,441Tina Piermarini, EVP & Chief Administrative Officer 359,011 68,147 204,441R. Bruce Douglas, Former SVP, North America 561,150 — —David Peterschmidt, Former President & CEO 1,376,000 — —Michael E. Lehman, Former Interim CFO — — —Anthony Fogel, Former SVP & Chief Human

Resources Officer 422,800 — —M. Sean Radcliffe, SVP, General Counsel &

Secretary 470,558 54,518 163,554All Current Executive Officers as a Group 2,558,114 407,066 1,221,198All Current Non-Executive Directors as a Group* 775,374 — —All Current Non-Executive Officer Employees as a

Group 4,212,381 40,889 122,667

* Number of shares subject to award for Mr. Boustridge and the total number of shares subject toaward for our named executive officers as a group include awards received by Mr. Boustridgeduring his service as a non-executive director of the Company and prior to his appointment as ourChief Executive Officer.

Required Vote

Approval of this Proposal requires the affirmative vote of the majority of shares of the Company present inperson or by proxy at the annual meeting and entitled to vote on this Proposal, provided a quorum ispresent.


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Equity Compensation Plans

The following table sets forth information as of December 31, 2014, with respect to the Company’s equitycompensation plans:

Number of securitiesremaining available for

Number of securities future issuance underto be issued upon Weighted-average equity compensation

exercise of exercise price of plans (excludingoutstanding options, outstanding options, securities reflected inwarrants and rights warrants and rights column (a))

(a) (b) (c)

Equity compensation plans/arrangements approved bysecurity holders 4,168,408(1) $4.71 9,814,763(2)

Equity compensation plans/arrangements not approved bysecurity holders 2,931,258(3) $3.10 —

Total 7,099,666 9,814,763

(1) Consists of 1,538,959 stock options with a weighted average exercise price of $4.71 and2,629,449 restricted stock units.

(2) Includes 7,513,976 shares remaining available for future grants at December 31, 2014, under ourIncentive Plan, plus 2,300,787 shares available for future sales to employees under ourEmployee Stock Purchase Plan.

(3) Represents 2,215,217 stock options issued and 716,041 restricted stock unit awards issued asinducement awards. The options have a weighted average exercise price of $3.10.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE ‘‘FOR’’ THE APPROVAL OF

THE AMENDMENT AND RESTATEMENT OF THE 2004 INCENTIVE PLAN


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Part 3—Beneficial Ownership

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding beneficial ownership of our common stock on April 24,2015 (unless noted otherwise). The table includes stock options exercisable for shares of common stockwithin sixty days of April 24, 2015 and Restricted Stock Unit (‘‘RSU’’) awards that will vest within sixtydays of April 24, 2015, held by (i) each person or group of persons known by us to own beneficially morethan 5% of the outstanding common stock, (ii) each of our directors and director nominees, (iii) eachNamed Executive Officer (as identified and defined in ‘‘Executive Compensation’’ below), and (iv) all ofour executive officers and directors as a group. All information is taken from or based upon ownershipfilings made by such persons with the Securities and Exchange Commission and other informationprovided by such persons to us. Unless otherwise indicated, (i) the beneficial owners listed below havesole voting and investment power with respect to the shares reported as owned and (ii) the address for allof the beneficial owners listed below is 6363 South Fiddler’s Green Circle, Suite 1400, GreenwoodVillage, Colorado, 80111. On April 24, 2015, there were 78,787,867 shares of common stock outstanding.

Amount and Nature of Percentage ofBeneficial Ownership Class(1)

Named Executive Officers, Directors and Director Nominees:Michael Boustridge(2) 400,062 *%Christian Mezger(3) 251,846 *%Tina Piermarini 35,777 *%David Peterschmidt(4) 2,178,610 *%Michael E. Lehman(5) — —R. Bruce Douglas(6) 133,368 *%Anthony Fogel(7) 84,270 *%Richard K. Coleman, Jr.(8) 19,971 *%Jean-Francois Heitz(9) 79,820 *%Paul A. Jacobs(10) 123,980 *%Stephen S. Kurtz(11) 141,280 *%Kurt J. Lauk(12) 95,741 *%Mark Lewis — —James C. Spira(13) 121,800 *%Bobby G. Stevenson(14) 6,511,060 8.2%

All current directors and executive officers as a group(11 persons)(15) 7,880,473 10.0%

5% Shareholders:Invesco Ltd.(16) 7,290,058 9.3%BlackRock, Inc.(17) 6,964,281 8.9%Dimensional Fund Advisors LP(18) 6,182,235 7.9%Frontier Capital Management Co., LLC(19) 4,107,027 5.2%Heartland Advisors, Inc.(20) 3,903,300 5.0%

* less than 1%

(1) Shares of common stock subject to RSUs or stock options currently exercisable or exercisablewithin 60 days following April 24, 2015, are deemed outstanding for computing the shareownership and percentage of the person holding such RSUs or stock options, but are notdeemed outstanding for computing the percentage of any other person. The percentage of our


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common stock owned by each of our executive officers and directors was calculated using thetotal number of shares of our common stock outstanding as of April 24, 2015. The aggregatepercentage of our common stock owned by each of Invesco Ltd. (‘‘Invesco’’), BlackRock, Inc.(BlackRock’’), Dimensional Fund Advisors LP (‘‘Dimensional’’), Frontier CapitalManagement Co., LLC (‘‘Frontier’’) and Heartland Advisors, Inc. (‘‘Heartland’’) was calculatedusing the total number of shares of common stock outstanding as of December 31, 2014. Thetotal number of shares of common stock outstanding as of December 31, 2014, was 78,696,527.

(2) Mr. Boustridge’s beneficial ownership includes (i) vested options to purchase 152,853 shares ofcommon stock and (ii) options to purchase 33,968 shares of common stock exercisable within60 days of April 24, 2015.

(3) Mr. Mezger’s beneficial ownership includes (i) 27,747 RSUs that will vest within 60 days ofApril 24, 2015 and (ii) vested options to purchase 95,000 shares of common stock.

(4) As of June 12, 2014, Mr. Peterschmidt was no longer a current officer of the Company. Beneficialownership includes equity awards that were accelerated and became vested on June 12, 2014,pursuant to the severance agreement between Mr. Peterschmidt and the Company effectiveJune 12, 2014, and vested options to purchase 1,358,689 shares of common stock that are stillexercisable as of April 24, 2015.

(5) As of February 11, 2014, Mr. Lehman was no longer a current executive officer of the Company.

(6) As of January 24, 2015 Mr. Douglas was no longer a current executive officer of the Company.

(7) As of June 13, 2014, Mr. Fogel was no longer a current executive officer of the Company.

(8) Mr. Coleman’s beneficial ownership includes 7,572 RSUs that will vest within 60 days of April 24,2015.

(9) Mr. Heitz’s beneficial ownership includes 7,572 RSUs that will vest within 60 days of April 24,2015.

(10) Mr. Jacob’s beneficial ownership includes (i) 7,572 RSUs that will vest within 60 days of April 24,2015 and (ii) vested options to purchase 10,000 shares of common stock.

(11) Mr. Kurtz’s beneficial ownership includes (i) 7,572 RSUs that will vest within 60 days of April 24,2015 and (ii) vested options to purchase 20,000 shares of common stock.

(12) Dr. Lauk’s beneficial ownership includes 7,572 RSUs that will vest within 60 days of April 24,2015.

(13) Mr. Spira’s beneficial ownership includes (i) 7,572 RSUs that will vest within 60 days of April 24,2015 and (ii) vested options to purchase 10,000 shares of common stock.

(14) Mr. Stevenson’s beneficial ownership includes: (i) 6,022,840 shares of common stock held by theBobby G. Stevenson Revocable Trust, of which Mr. Stevenson is the Settlor, Trustee, andBeneficiary; (ii) 15,000 vested and exercisable options owned directly by Mr. Stevenson;(iii) 7,572 RSUs that will vest within 60 days of April 24, 2015 (iv) 360,000 shares of commonstock held by the Dixie Foundation, which is governed by a four member board of directors


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controlled by Mr. Stevenson’s family members; and (v) 105,648 shares of common stock held inan IRA account.

(15) The total beneficial ownership reported includes an aggregate of (i) 91,055 RSUs that will vestwithin 60 days of April 24, 2015, (ii) vested options to purchase 377,047 shares of common stockand (iii) options to purchase 40,419 shares of common stock exercisable within 60 days ofApril 24, 2015.

(16) On February 2, 2015, Invesco filed a Schedule 13G/A with the SEC reporting investment in ourcommon stock as of December 31, 2014. Based exclusively on the information contained therein,Invesco held sole voting and sole dispositive power over the shares of our common stockreported therein. The address for Invesco is 1555 Peachtree Street NE, Atlanta, GA 30309.

(17) On January 22, 2015, BlackRock filed a Schedule 13G/A with the SEC reporting investment inour common stock as of December 31, 2014. Based exclusively on the information containedtherein, BlackRock held sole voting power over 6,767,917 shares and sole dispositive powerover 6,964,281 shares of our common stock. The address for BlackRock is 55 East 52nd Street,New York, NY 10022.

(18) On February 5, 2015, Dimensional filed a Schedule 13G/A with the SEC reporting investment inour common stock as of December 31, 2014. Based exclusively on the information containedtherein, Dimensional held sole voting power over 5,969,318 shares and sole dispositive powerover 6,182,235 shares of our common stock. The address for Dimensional is Palisades West,Building One, 6300 Bee Cave Road, Austin, TX 78746.

(19) On February 13, 2015, Frontier filed a Schedule 13G with the SEC reporting investment in ourcommon stock as of December 31, 2014. Based exclusively on the information contained therein,Frontier held sole voting power over 1,474,445 shares and sole dispositive power over 4,107,027shares of our common stock. The address for Frontier is 99 Summer Street, Boston, MA 02110.

(20) On February 13, 2015, Heartland filed a Schedule 13G with the SEC reporting investment in ourcommon stock as of December 31, 2014. Based exclusively on the information contained therein,Heartland held shared voting and shared dispositive power over the shares of our common stockreported therein. The address for Heartland is 789 North Water Street, Milwaukee, WI 53202.


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Part 4—Directors and Executive Officers

Our Board of Directors

Each year at our annual meeting, directors constituting approximately one-third of the Board are electedfor a three-year term or until a successor is duly elected and qualified. The terms of the current Class IIIDirectors (Mr. Paul A. Jacobs and Mr. Richard K. Coleman, Jr.) will expire at this 2015 Annual Meeting ofShareholders. The Nominating/Corporate Governance Committee have nominated Mr. Coleman andMr. Lewis for election at the 2015 Annual Meeting of Shareholders as Class III directors. The terms of theClass I Directors (Mr. Jean-Francois Heitz, Mr. James C. Spira, and Mr. Bobby G. Stevenson) will expirein 2016 and the terms of the Class II Directors (Mr. Michael Boustridge, Mr. Stephen S. Kurtz, andDr. Kurt J. Lauk) will expire in 2017. Mr. Spira and Dr. Lauk have notified the Company that they will resignas directors effective as of the annual meeting and Mr. Jacobs is not standing for reelection at the annualmeeting.

The following table sets forth our directors and nominees, their ages, positions currently held with us, theyear elected, and class of directorship.

Name Age Position Director Since Class (Term Exp.)

Michael Boustridge 52 Director 2012 Class II (2017)Richard K. Coleman, Jr. 58 Director 2014 Class III (2015)Jean-Francois Heitz 65 Director 2011 Class I (2016)Paul A. Jacobs 74 Chairman and Director 2005 Class III (2015)*Stephen S. Kurtz 64 Director 2007 Class II (2017)Kurt J. Lauk 68 Director 2010 Class II (2017)**Mark Lewis 52 Director Nominee — Nominee for Class IIIJames C. Spira 72 Director 1994-1998; 2002 Class I (2016)**Bobby G. Stevenson 73 Director and Founder 1974 Class I (2016)

* Not standing for reelection at the 2015 Annual Meeting of Shareholders.

** Resigning effective as of the 2015 Annual Meeting of Shareholders.

Pursuant to our bylaws, vacancies on the Board may be filled by the affirmative vote of a majority of theremaining directors then in office. A director elected to fill a vacancy, including a vacancy created by anincrease in the size of the Board, serves for the remainder of the full term of the new directorship or of theclass of directors in which the vacancy occurred. If the number of directors is changed, any increase ordecrease will be apportioned among the classes so as to maintain the number of directors in each classas nearly equal as possible, but in no case will a decrease in the number of directors shorten the term ofany incumbent director.

On March 29, 2015, (i) Mr. Jacobs informed us of his decision not to seek reelection at the 2015 AnnualMeeting of Shareholders, and (ii) Dr. Lauk and Mr. Spira each notified us that they will resign as directorseffective as of the date of the 2015 Annual Meeting of Shareholders. On April 15, 2015, we nominatedMr. Lewis to fill the vacancy created by the departure of Mr. Jacobs. We have agreed to fill the vacancycreated by the departure of Dr. Lauk and Mr. Spira with independent directors. See ‘‘Directors andExecutive Officers—Stockholder Agreement.’’

On April 15, 2015, we reduced the size of the Board of Directors from nine to eight directors by removingone existing seat from Class III. See ‘‘Directors and Executive Officers—Resolution of StockholderNominations.’’


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Class III Directors

Richard K. Coleman, Jr.President and Chief Executive Officer

Crossroads Systems, Inc.

Service to Mr. Coleman has been a member of our Board of Directors sinceCiber April 2014. In 2014, he served as a member of the Nominating/

Corporate Governance Committee and he will continue to serve inthe same capacity in 2015.

Relevant Mr. Coleman is the President and Chief Executive Officer of CrossroadsExperience Systems, Inc., a global provider of data storage solutions. He is also the founder

and President of Rocky Mountain Venture Services, a firm that assists companiesin planning and launching new business ventures and restructuring initiatives.Previously, Mr. Coleman served in a variety of senior operational roles includingChief Executive Officer of Vroom Technologies Inc., Chief Operating Officer ofMetroNet Communications, and President of US West Long Distance. He alsopreviously held significant officer level positions with Frontier Communications,Centex Telemanagement and Sprint Communications. Mr. Coleman began hiscareer as an Air Force Telecommunications Officer managing Department ofDefense R&D projects and has served as an adjunct professor for RegisUniversity’s graduate management program and is a guest lecturer for DenverUniversity, focusing on leadership and ethics. Mr. Coleman holds a bachelor’sdegree from the United States Air Force Academy, an MBA from Golden GateUniversity, and is a graduate of the United States Air Force CommunicationsSystems Officer School.

Contribution to Mr. Coleman has extensive experience as a senior executive in the informationBoard technology marketplace, as well as significant management consulting experience

with a focus on restructuring and growth initiatives. This combination of experiencemakes him qualified to understand our business, our competitors, and our currentposition in the marketplace, and to provide meaningful guidance to the board inimplementing future strategic initiatives.

Service on In addition to being President and Chief Executive Officer of CrossroadsOther Boards System, Inc. (NASDAQ: CRDS), Mr. Coleman also serves on its board. Since May

2014, Mr. Coleman has also served on the board of Hudson Global, Inc. (NASDAQ:HSON), a leading worldwide provider of specialized recruitment, talentmanagement and recruitment process outsourcing (RPO) services, where he alsoserves on the Compensation and Nominating/Governance Committees. In additionto his prior board experience with a variety of non-profit and private companies,Mr. Coleman previously served on the boards of NTS, Inc., a broadband servicesand telecommunications company (from 2012 until its sale in 2014); AetriumIncorporated, a manufacturer of electromechanical equipment used in the handlingand testing of semiconductor devices (2013 to 2014); and On TrackInnovations Ltd., one of the pioneers of cashless payment technology (2012 to2014).


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Mark LewisChairman and Chief Executive Officer

Formation Data Systems

Service to Mr. Lewis has been nominated for election as a Class III Director atCiber the 2015 Annual Meeting of Shareholders.

Relevant Since September 2012, Mr. Lewis has been the Chairman and Chief ExecutiveExperience Officer of Formation Data Systems, a software company delivering a revolutionary

dynamic storage services platform for IT cloud computing, as well as a senioradvisor to Silver Lake, a technology company investment firm. From February 2010to April 2015, Mr. Lewis also served on the board of Board of RiverbedTechnology, Inc., a publicly traded IT company. Mr. Lewis served as Chief StrategyOfficer and President of EMC Ventures, an information infrastructure technologyand solutions company, from October 2010 to February 2012. Mr. Lewis’ prior rolesat EMC included President of the Content Management and Archiving Division,Chief Development Officer, Chief Technology Officer and co-leader of the EMCSoftware Group. Mr. Lewis joined EMC in July 2002 from Hewlett-Packard/Compaq, where he was Vice President and General Manager of Compaq’sEnterprise Storage Group. From 1998 to 1999, Mr. Lewis led Compaq’s EnterpriseStorage Software Business after serving for two years as Director of Engineeringfor Multi Vendor Online Storage. Before that, he spent 13 years in storage-relatedengineering and product development at Digital Equipment Corporation, acomputer manufacturing company. He holds a B.S. in Mechanical Engineeringfrom University of Colorado, Boulder. He has studied Business Law, Marketing,and Accounting for an MBA at University of Colorado, Colorado Springs, and heattended the Executive Education Program at the Harvard Business School.

Contribution to Mr. Lewis brings to our Board of Directors his extensive engineering and ITBoard services expertise, as well as significant experience in business management and

leadership positions with several multi-national technology companies. These arethe significant qualities that led the Nominating/Corporate Governance Committeeto the conclusion that Mr. Lewis should serve as a director of Ciber.

Service on Mr. Lewis has served on the Board of Riverbed Technology, Inc. (NASDAQ:Other Boards RVBD) since February 2010.


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Class III Director Not Standing for Reelection

Paul A. JacobsNon-Executive Chairman

Ciber Inc.

Service to Mr. Jacobs became the Chairman of our Board of Directors in AprilCiber 2010. In 2014 he served on our Audit and Nominating/Corporate

Governance Committees. Mr. Jacobs has been a Director sinceFebruary 2005. Mr. Jacobs is not standing for reelection at theannual meeting.

Relevant Mr. Jacobs was a founding member of the law firm of Jacobs Chase LLC, a DenverExperience law firm formed in 1995. In 2011, Jacobs Chase LLC ceased operations as a law

firm and substantially all of its lawyers moved to Husch Blackwell LLP, whereMr. Jacobs is Of Counsel. Mr. Jacobs was the driving force behind Denver’s 1990Major League Baseball Expansion bid and served as Executive Vice President andGeneral Counsel of the Colorado Rockies from the inception of the franchise in1991 through February 1995. Prior to that, Mr. Jacobs practiced at the Denver lawfirm of Holme Roberts & Owen (which merged with Bryan Cave LLP in December2011) for 24 years, where he served on the Executive Committee for more than10 years.

Contribution to In addition to his extensive management and personnel experience, Mr. JacobsBoard brings to our Board and his Chairmanship more than 40 years of comprehensive

legal experience in representing a variety of businesses and entrepreneurs incorporate finance, mergers and acquisitions, business planning, and real estate.Mr. Jacobs’ legal experience in corporate finance and mergers and acquisitionsand with other financial matters makes him qualified to understand our business,our competitors, and our opportunities.

Service on Mr. Jacobs is currently a Director of The Colorado Sports Hall of Fame.Other Boards


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Class I Directors

Jean-Francois Heitz(Retired) Deputy Chief Financial Officer, Microsoft Corporation

Ciber, Inc.

Service to Mr. Heitz was appointed to our Board of Directors and as aCiber member of the Board’s Audit Committee in June 2011. In 2014, he

served as a member of the Compensation Committee and as theChairman of the Audit Committee, and he will continue to serve inthe same capacities in 2015.

Relevant From 1989 to 2003, Mr. Heitz held several positions with Microsoft (NASDAQ:Experience MSFT), where he was responsible for strategic operations, and treasury and

finance functions. During his tenure with Microsoft, he was Deputy Chief FinancialOfficer from 2000 to 2003, at which time he assisted the Chief Financial Officer tolead the company’s global finance, administration, IT and operations divisions, andhe was primarily responsible for transactions, governance, integration ofacquisitions and cross-organizational issues. From 1998 to 2000, Mr. Heitz wasCorporate Treasurer of Microsoft and managed all capital markets, global cashmanagement, foreign exchange, corporate finance, and credit and riskmanagement activities. Prior to his role as Corporate Treasurer for Microsoft,Mr. Heitz served as Assistant Treasurer from 1994 to 1998 and as Director ofFinance for Microsoft Southern Europe and General Manager, BusinessOperations, of Microsoft France from 1989 to 1994. From 1980 to 1989, he heldvarious finance roles with Matra SA (now Group Lagardere), a French multinationalhigh-tech conglomerate, including 4 years in Boston, and Vice President of Financeand Administration of Matra Systemes from 1987 to 1989. While with UNITEC, aEuropean subsidiary of Envirotech Corp., he oversaw sales and marketing from1978 to 1980. From 1974 to 1978, Mr. Heitz was an Operations Research Engineerfor Air Liquide S.A.

Contribution to Mr. Heitz brings deep financial and operations knowledge and significantBoard experience in the international marketplace to Ciber’s Board. Mr. Heitz’s

experience in finance, accounting and other financial matters makes him qualifiedto understand our business, our competitors and our opportunities. In addition,Mr. Heitz’s experiences in international markets allow him to bring a globalperspective to the Board. These are significant qualities that led the Nominating/Corporate Governance Committee to the conclusion that Mr. Heitz should serve asa director of Ciber.

Service on Mr. Heitz currently serves as a Director for three private companies, ArcOther Boards International S.A., Total Immersion, and Succes Europe, and as chair of the Audit

Committee for Arc International. His past board memberships include Bull from2006 to 2010, Business Objects from 2003 to 2008, Wavecom from 2005 to 2008,Xantrex from 2007 to 2008, and TIR Systems from 2006 to 2007. Mr. Heitz is on theAdvisory Boards for the Stanford Technology Venture Program and two technologyfunds. In addition, he is a member of the Board of Trustees of the Overlake Schooland the Seattle Symphony Orchestra, where he also serves as President of theSeattle Symphony Foundation, as well as a member of the Virginia MasonFoundation Board.


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James C. SpiraPresident and Chief Operating Officer (Retired)

American Greetings Corporation

Service to Mr. Spira has been a Director since March 2002. In 2014, Mr. SpiraCiber served on the Board’s Compensation Committee and as

Chairman of the Nominating/Corporate Governance Committee.He also previously served as a Director from September 1994 untilOctober 1998. Mr. Spira is resigning from the Board, effective as ofthe annual meeting.

Relevant Mr. Spira was the President and Chief Operating Officer of American GreetingsExperience Corporation (NYSE: AM) from 2001 until his retirement in July 2003. From 1995 to

2001, he was the managing partner of Diamond Technology Partners, Inc., aChicago, Illinois-based management consulting firm providing programmanagement services to design and deploy technology-enabled businessstrategies. Previously, from 1974 to 1991, Mr. Spira was Co-founder, President,and Chief Executive Officer of Cleveland Consulting Associates, an operations andsystems management consulting firm that conducts business with multi-nationalcompanies.

Contribution to Mr. Spira has over 40 years of management consulting experience and he bringsBoard his widely regarded expertise in developing and implementing winning competitive

strategies and career-long focus on profit improvement to his membership on ourBoard of Directors. Mr. Spira’s management consulting experience, in addition tohis experience as a senior executive officer, make him qualified to understand ourbusiness, our competitors, and our opportunities. These are significant qualitiesthat led the Nominating/Corporate Governance Committee to the conclusion thatMr. Spira should serve as a director of Ciber.

Service on Mr. Spira currently serves as Chair of Spira and Company, a privately-heldOther Boards management consulting firm specializing in corporate strategy, and as

non-executive Chair of Point to Point, a privately-held marketing andcommunications firm. From 2008 to 2012, he served as non-executive Chair ofenlight Advisors, LLC, a Cleveland, Ohio privately-held management consultingfirm specializing in corporate strategy. From July 2003 until September 2008,Mr. Spira served as non-executive Chairman of the Board of Brulant, Inc., aCleveland, Ohio privately-held information services firm. He also served as adirector of Brulant from 1997 to 2008. In 2005, he joined the board of DealerTire LLC, a private company that helps original equipment automobilemanufacturers design, implement, and manage tire programs for their dealerships.In 2011, Mr. Spira became Director Emeritus for Dealer Tire LLC. From June 2004to May 2011, Mr. Spira served on the Board and as a member of the Audit andCompensation Committees of Jackson Hewitt, Inc.


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Bobby G. StevensonCo-Founder

Ciber Inc.

Service to Mr. Stevenson is a founder of the Company and has been servingCiber as a Director since 1974. He served as Chairman from 1994 to

2010. He was a key figure in Ciber’s formation and the ensuinggrowth of the Company.

Relevant Mr. Stevenson served as Vice President in charge of recruiting and management ofExperience the Company’s technical staff from 1974 until November 1977, when he became

Chief Executive Officer. As Chief Executive Officer from 1977 to 1998, he wasresponsible for management of all of our operations and Ciber’s growth anddevelopment throughout that period.

Contribution to Mr. Stevenson continues to utilize his long-term management experience with theBoard Company and his extensive knowledge of the IT industry in his role on our Board of

Directors. Mr. Stevenson’s insights and perspectives as a founder of the Companyand our prior Chief Executive Officer make him qualified to understand ourbusiness, our competitors and our opportunities. These are significant qualities thatled the Nominating/Corporate Governance Committee to the conclusion thatMr. Stevenson should serve as a director of Ciber.


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Class II Directors

Michael BoustridgeChief Executive Officer

Service to Mr. Boustridge was appointed as our Chief Executive OfficerCiber effective June 12, 2014 and was appointed to our Board of

Directors in March 2012. Mr. Boustridge served on the Board’sCompensation and Nominating/Corporate GovernanceCommittees in 2014, until his appointment as Chief ExecutiveOfficer.

Relevant Prior to his appointment as our Chief Executive Officer, Mr. Boustridge was theExperience Chief Executive Officer of Contact Solutions, a leading customer enablement

company from 2013 to 2014. From 2011 to 2013, Mr. Boustridge was founder andPresident of BoKiwi Corp. From 2006 to 2011, he served as President of BritishTelecom (‘‘BT’’) Global Services Multi-National Corporations, where he hadresponsibility for all aspects of BT’s operations and performance for the globalmulti-national corporations, including BT Professional Services and BT GlobalFinancial Services sector. Prior to being appointed to that role, he held variouspositions with BT, including President of the America, Canada, and Asia PacificDivisions. Prior to joining BT, he served as Chief Sales and Chief Marketing Officerat Electronic Data Systems, LLC, which he joined in 1996 from Hitachi DataSystems.

Contribution to Mr. Boustridge brings to our Board of Directors his extensive global experience inBoard IT services and his proven track record of strategic planning in successful service

delivery and operational results for global companies. His international experienceallows him to bring a global perspective to the Board. This together with hisexperience as a senior executive officer in the technology industry are significantqualities that led the Nominating/Corporate Governance Committee to theconclusion that Mr. Boustridge should serve as a director of Ciber.

Service on Mr. Boustridge also currently serves on the Board of Directors and theOther Boards Compensation Committee for Riverbed Technology, Inc. (NASDAQ: RVBD), a

publicly-traded technology company that specializes in improving the performanceof networks and networked applications, and on the Board of Directors of Cyan Inc.(NASDAQ: CYNI), a leading publicly-traded SDN company. Mr. Boustridge is onthe Advisory Board of Any Presence, Inc., a privately-held cloud-based mobileplatform company. He also serves on the board of one private company, DYN. Heis also a member of the Board of Trustees of the XPRIZE Foundation, aneducational nonprofit organization with the mission to bring about radicalbreakthroughs for the benefit of humanity, to inspire industries and to revitalizemarkets.


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Stephen S. KurtzChief Executive Officer

MuscleSound, LLC

Service to Mr. Kurtz was appointed to our Board in December 2007. In 2014,Ciber he served as Chairman of the Compensation Committee and as a

member of the Board’s Audit Committee, and will continue to servein those capacities in 2015.

Relevant Mr. Kurtz’s professional experience includes negotiation, structuring, and taxExperience planning for mergers, acquisitions, joint ventures, and leveraged buyouts. Since

2012, Mr. Kurtz has been the Chief Executive Officer of MuscleSound, LLC, ahealth-IT services company headquartered in Denver, Colorado. From 2001 to2013, Mr. Kurtz served as a Co-Managing Member of Mankwitz KurtzInvestments, LLC, a Denver-based private equity firm, which he formed in 2001. In2008, Mr. Kurtz formed Kurtz Financial, LLC, a consulting firm specializing inrestructuring, turnarounds, and mergers and acquisitions advisory services. From1978 to 2001, he was President of the CPA firm of Shenkin Kurtz Baker & Co.Mr. Kurtz is a certified public accountant.

Contribution to For over 30 years, Mr. Kurtz has provided professional services in accounting andBoard finance, bringing depth and financial expertise to our Board as well as our Audit and

Compensation Committees. Mr. Kurtz’s significant experience in finance,accounting, and other financial matters makes him qualified to understand ourbusiness, our competitors, and our opportunities. These are significant qualitiesthat led the Nominating/Corporate Governance Committee to the conclusion thatMr. Kurtz should serve as a director of Ciber.

Service on From 1995 to 2010, he was a member of the Board of Directors and Chairman ofOther Boards the Audit and Finance Committees of HCA-HealthOne in Denver and is a former

member of the Community Board of Wells Fargo Colorado, N.A. (NYSE: WFC).Since November 2009, Mr. Kurtz has also been a member of the Board, member ofthe Governance Committee, and the Chairman of the Audit Committee ofPembrook Mining Corp., a privately-held, Canada- based international miningcompany. In 2012, Mr. Kurtz began serving as a Board member and as Chair of theAudit Committee of LaSalle Mining Corp., a privately-held, Canada-based miningcompany.


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Kurt J. Lauk, PhDCo-Founder Globe Capital Partners

Globe CP GmbH, New York / Stuttgart

Service to Dr. Lauk was appointed to our Board in November 2010. HeCiber served as a member of the Board’s Audit and Nominating/

Corporate Governance Committees in 2014. Dr. Lauk is resigningfrom the Board, effective as of the annual meeting.

Relevant Dr. Lauk is an executive officer of Globe CP GmbH. Since 2004, Dr. Lauk has beenExperience a special advisor to Silver Lake Partners, a leader in private investments in

technology and technology-enabled industries. From 1996 to 1999, Dr. Lauk heldsenior management roles in, and was responsible for, the global CommercialVehicle Division of DaimlerChrysler and also served as a Member ofDaimlerChrysler’s Board of Management. Prior to joining DaimlerChrysler, he heldthe position of Chief Financial Officer and Chief Controller of VEBA AG (today E.onAG) (Pink Sheets: EONGY and Frankfurt Stock Exchange: EOAN), Germany’slargest publicly-listed energy conglomerate, where he served as a Member of itsBoard of Management with IT responsibilities. Prior to that, Dr. Lauk was DeputyChairman and Chief Financial Officer of Audi AG (Frankfurt Stock Exchange: AudiAG), where he also handled marketing for the Audi brand. He also served as VicePresident and Director of The Boston Consulting Group Inc., in Munich and Boston,respectively, where his practice focused on technology and manufacturingbusinesses.

Contribution to Dr. Lauk brings vast international business experience in finance, sales, andBoard marketing to Ciber’s Board. Dr. Lauk’s global expertise supports the Board’s efforts

in overseeing Ciber’s strategy to expand our operations on a global level.Dr. Lauk’s international experience in finance, sales and marketing makes himqualified to understand our business, our competitors and our opportunities. Theseare significant qualities that led the Nominating/Corporate Governance Committeeto the conclusion that Dr. Lauk should serve as a director of Ciber.

Service on Dr. Lauk currently serves as a Director and on the Audit Committee for MagnaOther Boards International, Inc. (NYSE: MGA). He also presently serves on several supervisory

boards and on selected advisory councils. Dr. Lauk serves as a Trustee of theInternational Institute for Strategic Studies in London. He is an honorary professorwith a chair for International Business Strategy at the European Business School inReichartshausen and was a lecturer in Global Management at the StanfordUniversity Graduate School of Business. Dr. Lauk serves as the Chairman of theEconomic Council to the Christian Democratic Party in Berlin, Germany, anindependent business organization. From March 2007 until October 2010, Dr. Laukwas a member of the board of The Innovation Group plc, U.K. (LSE: TIG), where hewas a member of the Nomination Committee. He has previously served on severalgovernmental commissions at both the federal and state level in Germany.


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Director Selection Process

We believe that our directors must bring the skill mix and experience necessary to perform the Board ofDirectors’ oversight function effectively. Prospective Board members are identified by a combination ofmethods, including use of search firms, studying other boards, word-of-mouth in industry circles, inquiriesof outside professionals, and recommendations made to us. Although we do not have a formal policy withregard to diversity when considering candidates for director, our Nominating/Corporate GovernanceCommittee looks at the entirety of our Board and seeks to add skills and experience that complementother members of the Board, rather than director nominees who may represent a particular constituency.We value, encourage, and draw upon diverse viewpoints, believing that they add perspective andcreativity to our discussion of business issues and challenges. The Nominating/Corporate GovernanceCommittee considers a number of factors for Board nominees including, but not limited to, the following:

• bringing diversity to the Board;

• direct experience with international business and transactions;

• experience in marketing and sales;

• experience as a chief executive, chief operating or chief financial officer;

• knowledge of our industry;

• experience with finance, accounting, internal audit and other financial matters;

• an understanding and experience with the fiduciary responsibilities of directors to shareholders;

• leadership skills;

• demonstration of sound business judgment;

• global perspective and experience;

• interpersonal effectiveness;

• personal integrity;

• experience with acquisitions; and

• the number of other boards and committees on which a candidate serves.

In recruiting Board members to serve on a designated committee, the Nominating/Corporate GovernanceCommittee also takes into account skills and experience specific to that committee. For example, ourobjective is to recruit Audit Committee members who are financial experts or financially literate.

In 2014, the Nominating/Corporate Governance Committee retained Spencer Stuart, Inc., to identify abroad candidate pool for potential nominees to our Board. Spencer Stuart assisted the Nominating/Corporate Governance Committee with an analysis to evaluate and consider potential nominees from thiscandidate pool.


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Stockholder Agreement

On March 29, 2015, we entered into a stockholder agreement (the ‘‘Stockholder Agreement’’) withBobby G. Stevenson, the 1989 Bobby G. Stevenson Revocable Trust, the Bobby G. StevensonRevocable Trust, and the Dixie Foundation (together with their affiliates and associates, the ‘‘StockholderGroup’’).

In connection with the entry into the Stockholder Agreement, on March 29, 2015, (i) Mr. Jacobs informedus of his decision not to seek reelection at the 2015 Annual Meeting of Shareholders, and (ii) Dr. Lauk andMr. Spira each notified us that they will resign as directors effective as of the date of the 2015 AnnualMeeting of Shareholders. On April 19, 2015, we nominated Mr. Lewis to fill the vacancy created by thedeparture of Mr. Jacobs, and, pursuant to the Stockholder Agreement, we have agreed to fill thevacancies created by the departure of Dr. Lauk and Mr. Spira with independent directors.

In addition, pursuant to the Stockholder Agreement, among other things, the Board of Directors agreed(i) to nominate Bobby G. Stevenson as a director of the Board at the 2016 Annual Meeting ofShareholders to serve a three-year term and (ii) following the 2015 Annual Meeting of Shareholders, toappoint Mr. Stevenson as acting Chairman of the Board with no compensation therefor until such time asthe Board of Directors appoints a new Chairman of the Board to replace Mr. Stevenson. Pursuant to theStockholder Agreement, the Stockholder Group has agreed to vote their shares in accordance with all ofthe nominations and proposals recommended by the Board until one day after the 2017 Annual Meetingof Shareholders.

The Stockholder Agreement includes customary standstill provisions, subject to certain exceptions. TheStockholder Group agreed to not disclose certain confidential information concerning the business andaffairs of the Company. Each party further agreed not to publicly disparage or criticize the other party.

The Stockholder Agreement has been filed with the SEC on a current report on Form 8-K dated April 2,2015.

Resolution of Stockholder Nominations

On April 19, 2015, Lone Star Value Investors, LP (‘‘Lone Star Value’’) sent us a letter pursuant to whichLone Star Value agreed to irrevocably withdraw the notice it tendered to us on February 27, 2015announcing its intention to nominate certain individuals for election as directors at the 2015 AnnualMeeting of Shareholders.

On April 19, 2015, we sent a letter to Lone Star Value pursuant to which we agreed to (i) decrease the sizeof the Board of Directors from nine to eight seats by removing one existing seat from Class III and(ii) nominate and recommend Richard K. Coleman, Jr. and Mark Lewis for election as Class III directors atthe 2015 Annual Meeting of Shareholders.

Director Compensation

Our Board of Directors periodically reviews and establishes the compensation of our non-employeedirectors based on recommendations from the Compensation Committee. In setting directorcompensation, we review, among other things, director compensation surveys in publications for boardsof directors and the publicly-available data of our compensation peer group (see ‘‘CompensationDiscussion and Analysis’’ below for a detailed discussion of our compensation peer group).


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The following table sets forth the components of the non-employee director compensation program thatwere in effect for 2014:

Value of Initial RSUAnnual Cash Awards for New

Retainer— Directors UponBoard Annual Cash Election or

Membership and Retainer— AppointmentCommittee Committee to the Board of Value of Annual

2014 Non-Employee Director Chairmanships Memberships Directors RSU AwardsCompensation ($) ($) ($) ($)

All Non-Employee Directors of theBoard 50,000 — 100,000 100,000

Chairman of the Board 60,000 — — —Audit Committee 30,000 15,000 — —Compensation Committee 20,000 10,000 — —Nominating/Corporate Governance

Committee 10,000 5,000 — —

The RSU awards granted upon initial service as a non-employee director are based on the closing price ofour common stock on the grant date and vest in equal quarterly installments over a period of three years.The annual RSU awards to non-employee directors are granted based on the average closing price forour common stock for the 90 days preceding the grant and vest in equal quarterly installments over aperiod of one year. Employee directors receive no additional compensation for serving on our Board ofDirectors. All equity awards were made under our 2004 Plan.

Director Stock Ownership and Retention Policy. In 2014 we increased the minimum stock holdingfor non-employee directors to $300,000. Our current non-employee directors have until January 1, 2019to meet this increased holding requirement. Any newly elected non-employee director will have until thelater of January 1, 2019 or five years from the date of his or her initial election or appointment to our Boardof Directors to meet this stock ownership requirement. In addition, all non-employee directors are alsorequired to hold at least 50% of any shares of our common stock acquired upon the vesting of any stockawards or exercise of stock options through the non-employee director compensation program for at leasta six-month period after such vesting or exercise.

Other Benefits. We reimburse our non-employee directors for travel and lodging expenses incurred inconnection with their attendance at Board and shareholders’ meetings and at other Company-sponsoredevents. We also make health care insurance and long-term care insurance available to our non-employeedirectors and their spouses, in which the non-employee directors may participate at their option. The costto us of long-term care insurance depends upon the age of the director or spouse electing to participate.Except as set forth below for Mr. Stevenson (see the notes to the ‘‘2014 Director Compensation Table’’below), our non-employee directors receive no other perquisites or other personal benefits.


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2014 Director Compensation Table

Fees Earned or All OtherPaid in Cash Stock Awards Compensation Total

Name ($) ($)(1)(2) ($)(3) ($)

Paul A. Jacobs 130,000 111,230 4,346 245,576Betsy Atkins(4) 24,185 99,999 — 124,184Michael Boustridge(5) 32,500 111,230 — 143,730Richard K. Coleman, Jr.(6) 27,500 100,001 — 127,501Jean-Francois Heitz 90,000 111,230 — 201,230Stephen S. Kurtz 85,000 111,230 8,921 205,151Kurt J. Lauk 70,000 111,230 — 181,230Archibald J. McGill(7) 32,500 111,230 96,368 240,098James C. Spira 70,000 111,230 4,244 185,474Bobby G. Stevenson 65,000 111,230 39,115(8) 215,345

(1) The amounts reported in this column represent the grant date fair value of the shares of ourcommon stock subject to the annual RSU awards granted in 2014. The grant date fair values ofthese RSU awards were computed in accordance with Financial Accounting Standards BoardAccounting Standards Codification Topic 718 (‘‘ASC Topic 718’’).

(2) We did not grant any options to purchase shares of our common stock to our non-employeedirectors in 2014. The aggregate number of vested and outstanding stock options and unvestedRSU awards held by each of our non-employee directors as of December 31, 2014, was asfollows:

Name Options RSUs

Paul A. Jacobs 30,000 6,125Betsy Atkins 0 0Michael Boustridge* 0 0Richard K. Coleman, Jr. 0 19,747Jean-Francois Heitz 0 6,125Stephen S. Kurtz 20,000 6,125Kurt J. Lauk 0 6,125Archibald J. McGill 0 0James C. Spira 15,000 6,125Bobby G. Stevenson 15,000 6,125

* Mr. Boustridge served as a non-employee member of the Board of Directors fromJanuary 1, 2014 until his appointment as Chief Executive Officer on June 12, 2014. Inconnection with his service on the Board of Directors and prior to being appointed asChief Executive Officer, Mr. Boustridge received the annual grant of RSUs made to alldirectors, but upon appointment as Chief Executive Officer on June 12, 2014,Mr. Boustridge forfeited all unvested RSUs from the 2014 grant. Equity grants made toMr. Boustridge in connection with his service as our Chief Executive Officer are reportedin ‘‘Executive Compensation,’’ below.

(3) Consists of long-term care and health insurance premiums, and, with respect to Mr. McGill,long-term care insurance in the amount of $4,412, health care premiums in the amount of $3,642,and consulting fees of $88,314, and with respect to Mr. Stevenson, the amounts as set forth infootnote 8 to this table below.


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(4) Ms. Atkins served on the Board of Directors from June 30, 2014 until October 16, 2014 and cashamounts shown are prorated.

(5) Mr. Boustridge served as a non-executive member of the Board of Directors from January 1,2014 until his appointment as Chief Executive Officer on June 12, 2014. In connection with hisservice on the Board of Directors and prior to being appointed as Chief Executive Officer,Mr. Boustridge received the annual grant of RSUs made to all directors, but upon appointment asChief Executive Officer on June 12, 2014, Mr. Boustridge forfeited all unvested RSUs from the2014 grant, resulting in a forfeiture of RSUs of $83,422. The amounts reported in this tableinclude (i) annual director fees, as pro-rated for his appointment as Chief Executive Officer (ii) thefull annual RSU grant for Mr. Boustridge for service as a non-executive Director in 2014, althoughafter the forfeiture described above, Mr. Boustridge only retained RSUs of $27,808 in connectionwith his service in 2014 as a non-executive director. For amounts paid to Mr. Boustridge inconnection with our Chief Executive Officer, see the ‘‘Summary Compensation Table’’ below.

(6) Mr. Coleman joined the Board of Directors on April 11, 2014 and cash amounts shown areprorated.

(7) Mr. McGill served on the Board of Directors until April 10, 2014 and cash amounts shown areprorated.

(8) Includes the value of insurance premiums and other benefits provided to Mr. Stevenson pursuantto an agreement with the Company entered into when he resigned as Chairman of our Board ofDirectors on April 11, 2010. In connection with the change in his role, our Board of Directorsapproved certain perquisites and other benefits for Mr. Stevenson in recognition of his status asthe Company’s Founder, which are conditioned upon his compliance with certain restrictions.Such perquisites and other personal benefits, which are reported in the ‘‘All OtherCompensation’’ column of the 2014 Director Compensation Table are as follows:

• office space through July 31, 2016 (2014 value $26,692);

• health care insurance for Mr. Stevenson and his spouse, while he is a member of our Boardof Directors (2014 value $7,284);

• payment of the remaining premiums on the long-term care insurance coveringMr. Stevenson’s spouse (2014 value $5,139); and

• In addition, we have agreed to continue paying health care insurance for Mr. Stevenson andhis spouse for three years after he ceases to be a member of our Board of Directors, subjectto certain limitations. In addition, Mr. Stevenson will be eligible to participate in theCompany’s health care insurance plan for a period of ten years after the three year periodpreviously noted for Mr. Stevenson and his spouse, to the extent permitted under theCompany’s insurance plans, and subject to his reimbursement of the net cost of suchinsurance to the Company.


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Executive Officers

(as of the Record Date)

Name Age Position Officer Since

Michael Boustridge 52 President, Chief Executive Officer, and 2014Director

Christian M. Mezger 46 Executive Vice President, Chief 2011Financial Officer and Treasurer

Tina Piermarini 58 Executive Vice President and Chief 2014Administrative Officer

M. Sean Radcliffe 46 Senior Vice President, General 2012Counsel and Corporate Secretary

Michael BoustridgeChief Executive Officer

Information regarding Mr. Boustridge is provided above under ‘‘Our Board ofDirectors.’’

Christian MezgerChief Financial Officer

Mr. Mezger has served Ciber as Executive Vice President, Chief Financial Officerand Treasurer since February 2014. Mr. Mezger, age 46, has served as Ciber’sSenior Vice President, Corporate Finance since joining Ciber in August of 2011.Prior to joining Ciber, from 2010 to 2011, Mr. Mezger was Vice President of Financefor the $11 billion technology services business of Hewlett Packard. He was

promoted to that role from a position as Vice President of Worldwide Financial Planning and Analysis, ajob in which he led global teams and steered financial management of the company’s horizontalfunctions. During his 15 year tenure at Hewlett Packard, Mr. Mezger held several management andleadership roles, including Director of Finance for the Office of Strategy and Technology where hesupported Hewlett Packard Labs. Mr. Mezger holds an MBA-equivalent degree from the University ofVienna, where his area of study concentration was in international business management.


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Tina PiermariniExecutive Vice President and Chief Administrative Officer

Ms. Piermarini joined Ciber as Executive Vice President and Chief AdministrativeOfficer in June 2014. Prior to joining Ciber, from 2008 to 2014 she was founder andprincipal of Vivezza Partners, and in 2014 founded and served as Chief ExecutiveOfficer of thinkingisrequired, a Vivezza Partners company focused on transformingbusinesses and the people who run them. Ms. Piermarini started Vivezza Partners

after serving as Senior Executive Vice President and Chief Administrative Officer for Electronic DataServices (‘‘EDS’’), a $22 billion IT services giant acquired by Hewlett Packard. At EDS, she served as acompany officer and member of the Executive Committee, reporting directly to the Chairman and ChiefExecutive Officer. Ms. Piermarini also led EDS’s global human resources, enterprise risk management,security and real estate organizations, and she played an instrumental role in revitalizing the companyduring its global business transformation. Before joining EDS, Ms. Piermarini was Vice President ofStrategic Marketing, Sales and Business Development for Halliburton affiliate GrandBasin, as well asVice President of Marketing and Innovation—Energy for Science Applications International Corp. Shealso spent 19 years at Data General Corp. helping companies transform and grow through multinationalsales, strategic marketing and technology implementation.

M. Sean RadcliffeSenior Vice President, General Counsel and Corporate Secretary

Mr. Radcliffe joined Ciber as Senior Vice President, General Counsel andCorporate Secretary in November, 2012. Mr. Radcliffe serves as chief counsel forall of our business units, drawing on his experience in a wide range of legal areas,including intellectual property protection, client and vendor engagement, humanresources, mergers and acquisitions, and regulatory compliance. Prior to joiningCiber, from 2004 to 2012, Mr. Radcliffe was chief corporate counsel and chief

compliance officer at IHS, a leading global provider of business information services and decision-support tools. He also has held key legal positions at WilTel Communications, a majortelecommunications firm, as well as at the law firms of Sneed Lang Herrold, Conner & Winters and PrayWalker. Mr. Radcliffe is currently President of the Board of Directors for the Association of CorporateCounsel, Colorado Chapter. He has been a member since 2010, and has held other positions includingFirst Vice President, Treasurer and Secretary. Mr. Radcliffe is also on the Professional Advisory Board forthe Institute for Enterprise Ethics at the Daniels College of Business, University of Denver.


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Part 5—Corporate Governance Practices

Director Independence

Our Board of Directors has determined that seven of our current eight Directors, and Mark Lewis,nominee for Class III Director at the 2015 Annual Meeting of Shareholders, are independent within themeaning of the listing standards of the NYSE and our Corporate Governance Principles (provided on ourwebsite at ‘‘Investor Relations—Corporate Governance’’). After reviewing such standards, principles andadditional relevant facts and circumstances, including any related party transactions, the Board hasdetermined that each of the following directors or nominees is independent and has or had no materialrelationship with the Company that would impair his independence: Messrs. Coleman, Heitz, Jacobs,Kurtz, Lewis, Spira and Stevenson and Dr. Lauk. Mr. Jacobs is not standing for reelection at the annualmeeting and Mr. Spira and Dr. Lauk are resigning as directors, effective as of the annual meeting. TheCompany intends to fill the two remaining vacancies created by the departures of Messrs. Jacobs andSpira and Dr. Lauk with independent directors.

Board Leadership Structure

The positions of Chief Executive Officer and Chairman of the Board of Directors are separated at Ciber. Inour Board’s opinion, such separation allows for the objective evaluation of our management’sperformance and strong, independent oversight by the Board. Mr. Jacobs currently serves as theChairman of the Board of Directors. Following the 2015 Annual Meeting of Shareholders, Mr. Stevensonwill be appointed acting Chairman of the Board of Directors with no compensation therefor until such timeas the Board of Directors appoints a new Chairman of the Board of Directors to replace Mr. Stevenson.

Role of the Board in Risk Oversight

While our entire Board is accountable for and involved in risk oversight, our directors have elected toassign primary responsibility for risk oversight to the Audit Committee. The Audit Committee periodicallyreviews the risk management processes designed and implemented by the Company and receivesreports from Company management to ensure that their approach is consistent with our corporatestrategies and that there is an appropriate culture of risk awareness and assessment in decision making.At the same time, the Audit Committee recognizes that other Board committees, such as ourCompensation Committee, have expertise in areas of risk oversight specific to their duties andresponsibilities and therefore the Audit Committee delegates specific aspects of risk oversight to the othercommittees. Each committee periodically reports key risk oversight findings back to the full Board, so thatthe risk oversight activities are coordinated and consistent with our overall risk management processes.The full Board can then monitor risk taking across the organization and ensure that appropriate risk takingis aligned with and incorporated into our strategic planning process.

Meetings of Independent Directors

Our non-management directors meet regularly in executive session without management. The executivesessions are chaired by our Chairman of the Board. The executive sessions of our non-managementdirectors are held in conjunction with each regularly scheduled Board meeting.

Board Meetings

The Board met eight times in 2014 in regularly scheduled quarterly and special meetings. Each directorparticipated either in person or by telephone conference in at least 75% of all 2014 Board meetings and


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committee meetings (of which such director was a member). Seven directors attended the 2014 annualmeeting and each director is expected to attend the 2015 Annual Meeting of Shareholders.

Board Committees

The Board has three standing committees: Audit, Compensation, and Nominating/CorporateGovernance. Current membership in those committees is set forth below.

CURRENT COMMITTEE MEMBERSHIP

Nominating/ Corporate

Director Audit Compensation Governance

Michael Boustridge — — —Paul A. Jacobs � — �Richard K. Coleman, Jr. — — �Jean-Francois Heitz Chair � —Stephen S. Kurtz � Chair —Kurt J. Lauk � — �James C. Spira — � ChairBobby G. Stevenson — — —

Audit Committee

The principal responsibilities of the Audit Committee are, among others: (1) engaging and overseeing thework of the independent auditor, including the execution of the engagement letter and review of the auditplan; (2) reviewing the independence, internal quality control procedures and performance of theindependent auditors and the qualifications of the key audit partner and audit managers; (3) overseeingthe documentation, evaluation and testing of our system of internal controls; (4) establishing our policy onprovision of non-audit services; (5) pre-approving all audit and permitted non-audit services provided tous; (6) establishing the Committee’s procedure for receiving and reviewing complaints regardingaccounting, internal controls and auditing matters; (7) discussing policies and guidelines with respect tofinancial risk exposure and management; (8) receiving reports from the auditor and reviewing with theauditor critical accounting policies and practices, alternative treatments of financial information that havebeen discussed with management and the effectiveness of internal controls and any material writtencommunications between the auditor and our management; (9) reviewing Management’s Discussion andAnalysis and our annual audited financial statements and periodic reports that include financialstatements prior to filing or distribution; (10) discussing, generally, all financial disclosures includingfinancial media releases as well as financial information and earnings guidance provided to analysts andrating agencies; (11) reviewing and approving any related party transactions pursuant to our RelatedParty Transaction Policy; (12) determining and approving the compensation of the independent auditor;(13) discussing policies with respect to risk assessment and risk management; and (14) reporting to theBoard with respect to their actions.

The Audit Committee met seven times during 2014. The Audit Committee Charter is available for reviewon our website at www.ciber.com under ‘‘Investor Relations—Corporate Governance.’’

The Board has determined that each of Mr. Kurtz, Mr. Heitz, and Dr. Lauk each qualify as an ‘‘auditcommittee financial expert’’ pursuant to Item 407(d) of Regulation S-K. The Board of Directors hasdetermined that all of the members of the Audit Committee are independent within the meaning of thelisting standards of the NYSE and applicable SEC rules and our Corporate Governance Principles.


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Compensation Committee

The principal responsibilities of the Compensation Committee are, among others: (1) to define ourphilosophy, policies and procedures regarding executive compensation; (2) to administer and approveawards under our 2004 Plan and to administer our Employee Stock Purchase Plan; (3) to review theperformance of the Chief Executive Officer, Chief Financial Officer, and the other executive officers (see‘‘Compensation Discussion and Analysis,’’ below); (4) to approve the annual base salary, cash incentivecompensation, and equity compensation for our executive officers; (5) to make recommendationsregarding non-employee director compensation; and (6) to review the Compensation Discussion andAnalysis and recommend its inclusion in the proxy statement for the 2015 Annual Meeting ofShareholders and its incorporation by reference into our 2014 Annual Report on Form 10-K.

The Compensation Committee met eight times during 2014. The Compensation Committee Charter isavailable for review on our website at www.ciber.com under ‘‘Investor Relations—CorporateGovernance.’’

The Board of Directors has determined that all of the members of the Compensation Committee areindependent within the meaning of the listing standards of the NYSE and our Corporate GovernancePrinciples.

Nominating/Corporate Governance Committee

The principal responsibilities of the Nominating/Corporate Governance Committee are to identify andnominate qualified individuals to serve as members of the Board, to evaluate and recommend to theBoard of Directors individuals to serve as Chairman of the Board and as Chief Executive Officer, todevelop and recommend to the Board of Directors a succession plan for the Chief Executive Officer andthe Chairman of the Board, and to nominate candidates to fill such other positions as may be deemednecessary and advisable by the Board. In addition, the Nominating/Corporate Governance Committee isresponsible for developing, reviewing and recommending to our Board of Directors our CorporateGovernance Principles and our Code of Business Conduct and Ethics, as well as evaluating the Boardand its processes.

The Nominating/Corporate Governance Committee met three times in 2014. The Nominating/CorporateGovernance Committee’s Charter can be found at www.ciber.com under ‘‘Investor Relations—CorporateGovernance.’’

The Board of Directors has determined that all of the members of the Nominating/Corporate GovernanceCommittee are independent within the meaning of the listing standards of the NYSE and our CorporateGovernance Principles.

Governance Policies

Corporate Governance Principles

Our Board has adopted formal Corporate Governance Principles to address matters of corporategovernance including, but not limited to, Board composition and leadership, Board member qualifications,compensation, tenure, succession, Board organization, term and age limits, service on additional publiccompany committees, and Board committee operation and responsibilities.


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Code of Business Conduct and Ethics

Our Code of Business Conduct and Ethics is applied consistently to all employees and has been aprominent part of our Employee Handbook for several years. The Code of Business Conduct and Ethicsadopted by our Board of Directors applies to all employees and includes specific requirements forexecutives and senior financial officers with respect to the ethical standards and obligations relevant toaccounting and financial reporting. The Code of Business Conduct and Ethics contains procedures forreporting suspected violations of the Code of Business Conduct and Ethics and references the AuditCommittee procedure for the reporting of questionable accounting and auditing matters or other concernsabout accounting and auditing matters.

If the Board makes any substantive amendments to, or grants certain waivers from the Code of BusinessConduct and Ethics as it applies to our principal executive officer, principal financial officer, principalaccounting officer or controller, or persons performing similar functions, we will disclose the nature ofsuch amendment or waiver on our website or in a current report on Form 8-K.

Compensation Committee Interlocks and Insider Participation

During 2014, none of the current members of our Compensation Committee served, or has at any timeserved, as an officer or employee of the Company or any of our subsidiaries. Prior to his becomingPresident & Chief Executive Officer in mid-2014, Mr. Boustridge served as a member of ourCompensation Committee. In addition, none of our executive officers has served as a member of a boardof directors or a compensation committee, or other committee serving an equivalent function, of any otherentity, one of whose executive officers served as a member of the Board or the CompensationCommittee. Accordingly, our Compensation Committee members have no interlocking relationshipsrequired to be disclosed under SEC rules and regulations.

Report of the Compensation Committee

The Compensation Committee has reviewed and discussed with management the CompensationDiscussion and Analysis included in this proxy statement. Based on that review and discussion, we haverecommended to the Board of Directors that the Compensation Discussion and Analysis be included inthis proxy statement for the 2015 Annual Meeting of Shareholders and incorporated by reference in the2014 Annual Report on Form 10-K.

Submitted by the Members of the Compensation Committee:

Stephen S. Kurtz, ChairmanJean-Francois HeitzJames C. Spira

Certain Relationships and Related Person Transactions

Our Board has adopted a written policy that requires the Audit Committee to review any financialtransactions, arrangements, or relationships that exceed $120,000 in which Ciber is a participant and arelated party (as defined in Item 404(b) of Regulation S-K) has a direct or indirect interest. AuditCommittee approval of any related party transaction will depend upon whether or not the transaction isfair and beneficial to Ciber and its shareholders. Our Related Party Transaction Policy and the conflict ofinterest provision contained in our Code of Business Conduct and Ethics further describe our policiesrelating to relationships and related party transactions.


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The Corporate Governance Principles, Code of Business Conduct and Ethics, and Related PartyTransaction Policy can be found on our website at www.ciber.com under ‘‘Investor Relations—CorporateGovernance’’ or you may request a copy by writing to us at Ciber, Inc., Attention: Investor Relations,6363 South Fiddler’s Green Circle, Suite 1400, Greenwood Village, Colorado 80111.

Communicating with the Board

Any shareholder or other interested party who wishes to contact our Chairman of the Board, ournon-management Directors, our independent Directors, or any individual director, may do so by writing toour Chairman at: Ciber, Inc., Attn: Chairman of the Board, 6363 South Fiddler’s Green Circle, Suite 1400,Greenwood Village, Colorado 80111. Any communication that raises concerns regarding our internalcontrols or financial disclosures will immediately be referred to our Audit Committee.


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Part 6—Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

Shareholder Outreach and Key Changes to 2015 Executive Compensation Program

We were disappointed with the results of the 2014 shareholder vote on our executive compensationprograms. We believe that the shareholder say-on-pay represents one of the most important forms ofshareholder feedback. Accordingly, following last year’s failed say-on-pay vote, we engaged in anextensive program of shareholder outreach. During 2014, we spoke with and received feedback fromshareholders owning over 30% of our common stock outstanding at the time. The comments receivedwere carefully considered and thoroughly reviewed by the Committee and our senior executives.Informed by these shareholder discussions, we have instituted a number of changes to our compensationprogram, including the key 2015 program changes described below.

Key 2015 Program Changes

Based upon the comments and feedback received during our extensive shareholder outreach efforts, aswell as the annual review of our executive compensation programs against market best practices, wedecided to make the following changes to the 2015 program:

� Lower Target Total Compensation Opportunities: Target total compensation opportunities,on an annualized basis, for our NEOs are competitively positioned and more in-line with ‘‘middleof the market’’ practices and levels. Given the recent hiring of our new NEOs in 2014 (and thecompensation required to secure their services) as well as other program changes implementedfor 2015, annualized 2015 target total compensation amounts for our current NEOs will generallybe lower than 2014 levels.

� Introduction of Performance-based Restricted Stock Units (PRSUs): PRSUs are nowweighted 30% of the overall Long Term Incentive (‘‘LTI’’) mix. The Compensation Committeeintends to increase this percentage to at least 50% of the overall LTI mix over the next severalyears.

� PRSUs Emphasize Long-term Value Creation: PRSU awards have a three-yearperformance period, are structured to drive profitability (via an earnings before interest, tax, andamortization- or EBITA- metric), and include a final award modifier based upon relative totalshareholder return (TSR).

� Strong Emphasis on Long-term Incentives: Our overall annual target pay mix for our seniorexecutives is structured to ensure that long-term incentives (LTI) comprise at least 50% of theoverall package.

� Cash Bonus Program to Focus More on Annual Performance and Payouts: We modifiedthe structure of goals and payments under our annual performance-based cash incentive plan sothat payments are made after the end of the year based upon year-long goals (versus the currentprogram which has quarterly goals and payouts). In addition, the payout as a percentage of targetfor threshold performance has been reduced under the 2015 plan relative to that under the 2014program, further aligning pay and performance.


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� Equity Plan Amendments Designed to Facilitate 162(m) Compliance. The 2004 Planincorporates changes designed to allow more awards—both cash and equity—to be treated asqualified performance-based compensation under Section 162(m) of the Internal Revenue Code.The amendments to the plan do not include an increase to the number of shares of commonstock available for issuance under the plan.

We believe that these changes demonstrate our ongoing commitment to a strong pay for performancephilosophy and will help to retain and motivate our senior executives to successfully implement both ourshort-term and long-term business strategies, and strengthen the link between the compensation of ourexecutives and the return to our shareholders. As in prior years, the Compensation Committee willcontinue to review the annual say on pay vote results, as well as feedback from our shareholders, anddetermine whether to make any future changes in light of the comments it receives and prevailing marketpractices.

Executive Summary

Our Compensation Discussion and Analysis provides a detailed description of our executivecompensation philosophy and programs as well as the relevant decisions and factors considered by theCompensation Committee in establishing our executive compensation programs for 2014. For 2014, ourNamed Executive Officers were:

Michael Boustridge President and Chief Executive Officer (CEO)

Christian Mezger Executive Vice President & Chief Financial Officer (CFO)

Tina Piermarini Executive Vice President & Chief Administrative Officer

R. Bruce Douglas Senior Vice President—North America (through January 24,2015)

David Peterschmidt Former President and CEO (through June 12, 2014)

Michael E. Lehman Former Interim CFO (through February 11, 2014)

Anthony Fogel Former Senior Vice President and Chief Human ResourcesOfficer (through June 13, 2014)

Mr. Boustridge and Ms. Piermarini joined Ciber as executive officers in mid-2014.

The seven individuals above are collectively referred to herein as our ‘‘Named Executive Officers’’ or‘‘NEOs.’’

The most recent year (2014) was a transformative one for Ciber. We brought in several new members ofthe senior executive team with backgrounds and experiences necessary to successfully position theCompany for future growth and ultimately, shareholder value creation. Already, our new managementteam has achieved tangible, positive results as evidenced by the following milestones that have beenachieved and initiatives that were implemented in 2014:

• Year-over-year increase in gross margin to 25.8%

• Q4 2014 marked the highest level of profitability at the Company in four years


Name Position

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• We announced a plan to buy back up to $10 million shares of our common stock on the openmarket

• We implemented our current strategic plan, the key initiatives of which include: (i) focusing onhigh-value, tightly-defined core offerings with a well-developed portfolio of reusable solution sets;(ii) performing under heightened operational regimes; and (iii) customer service

Overall, our compensation programs are designed to attract, motivate, and retain talented, competent,and high quality executives capable of successfully executing the business strategy for a leading global ITconsulting company. Consistent with prior years, our 2014 executive compensation programs werebased upon the following guiding principles:

• Emphasizing pay for performance, while also providing material retentive elements to ensure thatwe attract, retain and motivate our high caliber executives

• Designing compensation programs that are aligned with the latest trends and best practices inthe market

• Providing compensation opportunities at levels competitive to those of our peer group andcommensurate with our senior executives’ backgrounds and skill sets

• Ensuring alignment with shareholder value creation

These guiding principles are reinforced further by the following best practices found in our compensationprograms:

� Pay for performance

� Capped incentive plan (annual and long-term) opportunities

� Limited perquisites

� Double-trigger change-in-control (‘‘CIC’’) severance arrangements

� Multi-year vesting requirements for long-term incentive awards

� Annual risk assessment of compensation programs

� Stock ownership guidelines

� Use of an independent compensation consultant

� Anti-hedging policy

� Anti-pledging policy

No excise tax gross-ups or other tax reimbursements/gross-ups

No re-pricing of underwater options

No supplemental health and welfare programs that provide benefits inexcess of those offered to all employees

No supplemental retirement programs that provide benefits in excess ofthose offered to all employees


What We Do

What We Do NOT Do

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Key Components of Our Executive Compensation Program

The following table outlines the key components of our executive compensation program as well as howeach component reinforces one or more facets of our executive compensation philosophy and goals:

Base Salary • Attract and retain high performing individuals• Reflect an individual’s skills, experience, and

performance

Annual Performance-based Cash • Drive achievement of annual financial, strategic, andIncentive Plan individual goals

• Align interests and wealth creation with those ofshareholders

Performance-based Restricted • Drive achievement of long-term financial and strategicStock Units (PRSUs)—NEW for goals2015 • Align interests and wealth creation with those of

shareholders

Time-based Restricted Stock Units • Facilitate retention(RSUs) • Align interests and wealth creation with those of

shareholders

Stock Options • Facilitate inducement• Align interests and wealth creation with those of

shareholders

Retirement Programs (tax-qualified • Facilitate retention401k only) • Provided on the same terms and conditions to all of

our full-time employees

Health and Welfare Benefits • Designed to be affordable and competitive withtypical market practices

• Provided on the same terms and conditions to all ofour full-time employees

Limited Perquisites • Executives are essentially treated on the same termsas all other full-time employees

• Help to ensure executive can remain focused onexecution of the business strategy

In recent years, stock options have been used on a limited basis. The Compensation Committee viewsstock options as another performance-based LTI vehicle that can be granted, when applicable, to drivelong-term performance, as stock options do not have value unless Ciber’s stock price increases relativeto the grant date share price.


Component Rationale/Purpose

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Establishing Annual Compensation Levels

In setting annual compensation levels for our executive officers, the Compensation Committeethoughtfully considered all elements of Ciber’s compensation programs, both separately and inaggregate, to help ensure that our executive compensation objectives are met. In making its decisions,the Compensation Committee considers multiple relevant internal and external factors as it deemsappropriate, including but not limited to: the Company’s business objectives and strategy, market bestpractices and trends with respect to compensation program design and levels, executive talent attractionand retention needs, and each executive’s role/responsibilities.

Peer Group

In order to ensure that our executive compensation programs are reasonable and competitive in themarketplace, the Compensation Committee compares our compensation programs and levels to those atother companies of a size similar to Ciber (based primarily on revenues and market value) and againstwhich we compete on an operational basis and/or for executive talent. In 2014, we revised ourCompensation Peer Group by removing three peers and adding six others in order to create a peer groupmore reflective of Ciber’s size, mix of services, global client base and active restructuring process. For2014, the Compensation Peer Group included the following companies:

Acxiom, Inc. EarthLink Holdings Corp.* MAXIMUS, Inc.

CDI Corp. ePlus Inc.* Monster Worldwide, Inc.*

Computer Task Group, Incorporated ExlService Holdings, Inc. Perficient, Inc.

Convergys Corporation The Hackett Group, Inc. Sapient Corporation

CSG Systems International, Inc.* IGATE Corporation Syntel, Inc.

Datalink Corporation* Lionbridge Technologies, Inc.* * added in 2014

The Compensation Committee also was provided with competitive compensation data from the 2014Radford Global Technology survey, which was used as an additional reference source. The RadfordGlobal Technology survey provides deeper and more precise competitive compensation data than whatis available solely from the public filings of companies in the Compensation Peer Group.

Base Salary

The Compensation Committee conducts an annual review of each executive officer’s base salary, withinput from our Chief Executive Officer (except with respect to his own base salary), and makesadjustments as it determines to be reasonable and necessary to reflect the scope of an executive officer’sperformance, individual contributions and responsibilities, competitive market conditions, and retentionobjectives. While the Compensation Committee believes that the base salaries of our executive officersshould be competitively positioned relative to comparable positions at the companies in ourCompensation Peer Group, it makes decisions on individual adjustments to base salaries in its solediscretion based on its evaluation of the previously-described factors.


2014 Compensation Peer Group

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The following table shows the annualized base salaries for the NEOs for 2014:

Michael Boustridge $700,000

Christian Mezger $380,000

Tina Piermarini $405,000

R. Bruce Douglas (Former SVP, North America) $350,000

David Peterschmidt (Former CEO) $710,000

Michael E. Lehman (Former CFO) $416,000*

Anthony Fogel (Former SVP) $330,000

* Mr. Lehman’s base salary was set at an annualized rate of $416,000 while he served as ourinterim CFO and during the initial transition phase after Mr. Mezger became our CFO. FromMay 3, 2014 through July 7, 2014, Mr. Lehman’s salary was reduced to an annualized rate of$208,000 during the second part of the CFO transition process. From July 8, 2014 through histermination with Ciber on October 3, 2014, his base salary was reduced to an annualized rate of$36,000 for his service in an advisory capacity only.

Annual Performance-based Cash Incentive Plan

Consistent with our strong pay for performance philosophy and in order to align our executive officers’interests with those of our shareholders, the Compensation Committee established an annualperformance-based cash incentive plan to motivate and reward executives for achieving annual financial,strategic, and individual objectives.

The Compensation Committee established target annual incentive opportunities for each of our servingNEOs at the start of the year, except for Mr. Lehman. Target opportunities for the NEOs were set atcompetitive levels relative to comparable roles in the market based upon a review of marketcompensation and also in consideration of each NEO’s individual role and responsibilities.Ms. Piermarini’s target bonus opportunity was established upon her joining Ciber in mid-2014. Under theterms of his employment agreement, Mr. Boustridge was guaranteed a bonus for 2014. AlthoughMr. Boustridge did not participate in our 2014 annual cash incentive program, he was granted adiscretionary cash award by the Compensation Committee for Q3 and Q4 performance. Mr. Boustridgewill participate in the annual performance-based cash incentive plan in 2015. His 2014 bonuses aredescribed in greater detail below.


Name 2014 Base Salary

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For 2014, the target opportunities (as a percentage of their respective annualized base salaries) for ourNEOs were:

Michael Boustridge N/A

Christian Mezger 70%

Tina Piermarini 60%

R. Bruce Douglas (Former SVP, North America) 90%

David Peterschmidt (Former CEO) 105%

Michael E. Lehman (Former CFO) N/A

Anthony Fogel (Former SVP & CHRO) 75%

For NEOs other than Messrs. Boustridge, Douglas and Lehman, the Compensation Committeeestablished the following Corporate metrics and their respective weightings under the annualperformance-based cash incentive plan:

Corporate Net Operating Income (NOI) 40%

Corporate Revenue 40%

Individual Performance 20%

For Mr. Douglas, our SVP—North America (through January 24, 2015), the Compensation Committeeestablished the following Corporate and North American Division-specific metrics and their respectiveweightings under the annual performance-based cash incentive plan:

Corporate Net Operating Income (NOI) 12%

Corporate Revenue 12%

North America Net Operating Income (NOI) 28%

North America Revenue 28%

Individual Performance 20%


Target BonusName (% of Base Salary)

Corporate Metrics Weightings

North America Division Metrics Weightings

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Financial Metrics and Performance

The financial metrics and weightings approved by the Compensation Committee were selected becauseit believed that these (1) were the primary drivers of shareholder value in the near term and (2) providedirect accountability for our NEOs. The Compensation Committee established the following performancelevels and payout percentages related to the 2014 financial metrics—both Corporate and for the NorthAmerica Division—under the annual performance-based cash incentive plan:

Maximum 150% 150%

Target 100% 100%

Threshold 80% 80%

Goals for each of the financial metrics are set on a fiscal quarter basis. No bonuses would be paid forperformance below the threshold performance level (i.e., 80% of target), and amounts would be linearlyinterpolated for performance between the levels shown in the table above. In addition, no bonuses relatedto the Corporate NOI and Corporate Revenue metrics could be earned under the annual performance-based cash incentive plan if Corporate NOI was less than 65% of the target performance level for therespective fiscal quarter. For Mr. Douglas, similar minimum threshold performance levels wereestablished for his North America Division-specific NOI and Revenue goals. Any achievement over 100%against plan targets will only be paid at year-end, based on full-year performance. As shown in the tableabove, annual award opportunities are capped at 1.5x the target opportunities.

The following table shows the quarterly target performance goals and corresponding actual performancefor the Corporate NOI and Corporate Revenue metrics for 2014 (in $000s):

Q1 $ 6,888 $6,931 Q1 $215,655 $218,011

Q2 $ 8,460 $4,134 Q2 $221,293 $214,646

Q3 $ 8,237 $2,883 Q3 $222,587 $211,306

Q4 $11,921 $7,649 Q4 $230,423 $219,644

For Mr. Douglas, our SVP—North America, 56% of his annual performance-based cash incentive planwas split equally based upon performance against North America Division-specific NOI and Revenuegoals, which are shown below (in $000s):

Q1 $ 8,459 $ 8,472 Q1 $105,006 $103,478

Q2 $10,299 $ 9,109 Q2 $109,498 $105,154

Q3 $11,037 $10,430 Q3 $112,415 $106,300

Q4 $10,703 $10,961 Q4 $113,625 $107,748


% of Target % of TargetPerformance Goal Payout

2014 Corporate Corporate 2014 Corporate CorporateFiscal NOI Target NOI Actual Fiscal Revenue Target Revenue Actual

Quarter Performance Performance Quarter Performance Performance

2014 N. America N. America 2014 N. America N. AmericaFiscal NOI Target NOI Actual Fiscal Revenue Target Revenue Actual

Quarter Performance Performance Quarter Performance Performance

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Individual Performance

The individual performance component of our annual performance-based cash incentive plan wasweighted as 20% of the overall target opportunity. Our NEOs are eligible to earn a bonus based uponindividual performance against Compensation Committee-approved goals; any amounts earned are paidbiannually (half after Q2 and half after Q4). The evaluation of each NEO’s individual performance againsthis/her goals is based upon a subjective assessment by the Compensation Committee. We believe that itis important to have this element in our annual performance-based cash incentive plan in order to be ableto formally recognize key individual contributions made by our NEOs to our overall success that cannot bequantitatively measured.

Awards for Fiscal 2014 Performance

Final 2014 annual cash incentive payouts, including amounts earned with respect to both our financialand individual goals for each fiscal quarter, are shown in the following table. As we noted previously, 2014was a transformative year for Ciber, and the Compensation Committee believed that the significantprogress made by the senior executive team was not fully reflected in our fiscal year financialperformance. Nonetheless, net operating income in the fourth quarter was higher than that of the prior twoquarters combined, and fourth quarter 2014 was Ciber’s most profitable quarter in four years.Consequently, to reflect the strong, positive progress of our new management team in positioning Ciberfor future success, the Compensation Committee granted discretionary awards to Messrs. Boustridgeand Mezger and Ms. Piermarini in Q4 that reflected a combination of second-half 2014 financialperformance as well as each NEO’s individual performance. The discretionary award amount forMr. Mezger assumed target achievement of the Q3 and Q4 financial goals and achievement of 100% ofhis individual component. Given that Mr. Boustridge and Ms. Piermarini became NEOs in mid-2014, theCompensation Committee determined that their awards should equate to 50% of their respectiveannualized 2014 base salaries based upon our Q3 and Q4 results, as well as their individual contributionsand strategic leadership.

Payouts of performance-based and discretionary awards by fiscal quarter are shown in the followingtable:

Michael Boustridge N/A N/A $475,000 $825,000 $1,300,000

Christian Mezger $ 53,200 $ 0 $ 0 $159,600 $ 212,800

Tina Piermarini N/A N/A $ 0 $202,500 $ 202,500

R. Bruce Douglas (Former SVP,

North America) $ 62,559 $40,572 $ 59,220 $ 0 $ 162,351

David Peterschmidt (Former CEO) $179,930 N/A N/A N/A $ 179,930

Michael E. Lehman (Former CFO) N/A N/A $100,000 N/A $ 100,000

Anthony Fogel (Former SVP & CHRO) $ 49,500 N/A N/A N/A $ 49,500

Mr. Boustridge and Ms. Piermarini were not eligible for Q1 or Q2 bonuses in 2014 as they were not yetemployees of Ciber. Included above for Mr. Boustridge is a payment of $950,000 guaranteed for 2014under the terms of his employment agreement to primarily reflect compensation opportunities he wasforgoing by becoming President & Chief Executive Officer of Ciber. Mr. Boustridge will participate alongwith the other Ciber NEOs in the regular annual incentive program for 2015 and is not guaranteed a bonus


Name Q1 2014 Q2 2014 Q3 2014 Q4 2014 Total

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for 2015. Mr. Douglas did not receive a bonus for Q4 since he terminated employment with Ciber inJanuary 2015 prior to the payment of Q4 awards.

Mr. Peterschmidt, our former Chief Executive Officer, received a payout of $179,930 related to Q1 2014performance; this was his only payout for 2014 under our annual performance-based cash incentive plan.Mr. Lehman, our former interim Chief Financial Officer, received a bonus of $100,000 in July 2014 for thesuccessful completion of the Chief Financial Officer transition process; he did not receive any paymentsunder our 2014 annual performance-based cash incentive plan. Mr. Fogel, our former Senior VicePresident and Chief Human Resources Officer, received a payout of $49,500 related to Q1 2014performance; this was his only payout for 2014 under our annual performance-based cash incentive plan.

As described previously, in 2015 we have transitioned to an annual performance-based cash incentiveplan that pays out (to the extent earned) after the end of the fiscal year once the CompensationCommittee has certified Company performance against the pre-established annual goals.

Long-term Equity-based Compensation (LTI)

We use equity awards to incentivize and reward our executive officers, including the NEOs, for long-termcorporate performance based on the value of our common stock and, thereby, align the interests of ourexecutive officers with those of our shareholders. We do not apply a rigid formula in determining the valueof equity awards to be granted to our executive officers upon their initial employment. Instead, theseawards are established through arms-length negotiation at the time the individual executive officer ishired. Thereafter, as part of its annual review of our executive compensation program, the CompensationCommittee determines the value of any additional equity award at levels it considers appropriate. Thespecific dollar amount is calculated, taking into consideration the nature of the NEO’s position, his/herresponsibilities and contributions to the Company, and equivalent awards to NEOs or key employees insimilar positions at companies comparable to Ciber.

As in recent years, our 2014 annual LTI grants consisted of time-based restricted stock units (RSUs) thatvest quarterly over three years. Since Mr. Boustridge and Ms. Piermarini were not executive officers atthe time of our annual grants in March 2014, neither received a 2014 annual grant of RSUs. During 2014,the following annual grants of RSUs were made to our NEOs:

Michael Boustridge None N/A

Tina Piermarini None N/A

Christian Mezger 195,600 $929,100

R. Bruce Douglas (Former SVP, North America) 171,150 $812,963

Anthony Fogel (Former SVP & CHRO) 97,800 $464,550


Grant DateName Number of RSUs Fair Value

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To ensure that we were able to secure the services of two members of the high caliber senior executivemanagement team currently in-place, the following additional LTI awards were granted to these twoNEOs upon becoming executive officers of Ciber in 2014:

Michael Boustridge 804,721 815,217 $4,259,035

Tina Piermarini 150,000 0 $ 552,000

These RSUs granted to Mr. Boustridge and Ms. Piermarini vest quarterly, beginning with an initialinstallment that vested on the date of grant and a second installment that vested at the end of the firstmonth; remaining installments will continue to vest over a period of 30 months. Stock options granted toMr. Boustridge will vest monthly beginning with two monthly tranche installments that vested on the dateof grant, and monthly vesting will continue over the following 46 months.

To supplement our annual RSU awards, recognize the efforts and significant accomplishments of the newmanagement team in a relatively short period of time, and facilitate the future retention of thismanagement team, the following recognition and retention RSU awards were granted in December 2014and vest 100% three years from the grant date:

Michael Boustridge 350,000 $1,270,500

Tina Piermarini 200,000 $ 632,000

Christian Mezger 200,000 $ 632,000

R. Bruce Douglas (Former SVP, North America) N/A N/A

Neither of Mr. Peterschmidt, our former Chief Executive Officer, nor Mr. Lehman, our former interim ChiefFinancial Officer, received any LTI awards in 2014.

LTI Program Changes for 2015

As we mentioned previously, several changes were made to our 2015 LTI program that we believe furtheremphasize our pay for performance philosophy and increase alignment between our NEOs’ interests andthose of our shareholders:

� PRSUs have been introduced as part of our NEO’s 2015 LTI package weighted at 30% of the overallLTI mix. PRSUs will be earned based on a combination of: (1) performance against CompensationCommittee-approved EBITA targets; and (2) Ciber’s relative TSR performance against its TSR PeerGroup Index (the S&P Small Cap 600 IT Sector Index)

� In the coming years, we plan to increase the weighting on PRSUs to at least 50% of the overalltargeted LTI mix, further enhancing the performance-based component of our executivecompensation program

� The use of time-vested RSUs has been reduced. RSUs will compromise 70% of the overall LTI mixfor 2015, and this percentage will continue to be reduced in future years as increased emphasis isplaced on performance-vesting equity. The use of RSUs is intended to (1) create alignment with our


Number of Number of Total Grant DateName RSUs Options Fair Value

Grant DateName Number of RSUs Fair Value

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shareholders as the value ultimately received by our executives will depend upon Ciber’s share priceperformance and (2) also help to aid in the retention of our executives

2015 President & CEO Target Total Direct Compensation

At its January 2015 meeting, the Compensation Committee established Mr. Boustridge’s 2015 targetannual compensation package:

Base Salary $ 760,000

Target Bonus (% of Base Salary) 100%

LTI: PRSUs $ 714,000

LTI: RSUs $1,666,000

Target Total Direct Compensation $3,900,000

Mr. Boustridge’s 2015 target annual package is materially less than his total annualized compensation for2014, the year in which he became our President & Chief Executive Officer. As mentioned previously,Mr. Boustridge received several one-time awards in 2014 that were necessary in order to secure hisservices as our President & Chief Executive Officer.

Stock Ownership Guidelines

On January 1, 2014, we expanded our stock ownership policy to apply not only to members of our Boardof Directors but also to certain of our executive officers, specifically our Chief Executive Officer, ChiefFinancial Officer and, when applicable, our Chief Operating Officer. Each of these executive officers isrequired to hold equity in the Company equal to three times that officer’s annual base salary. The totalvalue of an executive officer’s equity holdings includes all shares of common stock owned by theexecutive officer, plus 50% of the value of all unvested equity awards held by the executive officer.Relevant executive officers have five years from the date of joining Ciber to meet their stock ownershiprequirement.

Anti-Hedging and Anti-Pledging Policies

Our Insider Trading Policy includes an express prohibition against trading derivatives based on oursecurities, hedging any investment in our equity securities, or pledging our equity securities by membersof our Board of Directors, executive officers, or other employees designated as ‘‘insiders.’’ We believe thispolicy is another means of preserving the ongoing alignment between our business leaders and ourshareholders.

Compensation Recovery/Clawback Policy

Under the oversight and approval of our Compensation Committee, we intend to approve a generalcompensation recovery (‘‘clawback’’) policy once the NYSE adopts final rules implementing suchrequirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act.


Compensation Element Target Value

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Compensation Program Risk Assessment

The Company reviews and monitors the compensation-related risks associated with its compensationprograms on an ongoing basis. The Compensation Committee believes that these programs, as well asour compensation policies and practices, are not reasonably likely to present material risk to theCompany.

Retirement Benefits and Plans

The Company does not provide any defined benefit pension plans or deferred compensation benefits toour NEOs.

Health, Welfare, and Other Benefits

We have established a tax-qualified Section 401(k) retirement savings plan available on the same termsand conditions to all of our full-time employees, including the NEOs. Under this plan, participants mayelect to make pre-tax contributions of up to 75% of their compensation, with the exception of employeeswho meet the Internal Revenue Service discrimination testing definition of ‘‘highly-compensatedemployees,’’ who may contribute a maximum of 9%. Contributions made may not exceed the statutoryincome tax limitation for the applicable year. In addition, in 2014, employees 50 years old or older wereeligible to make an annual ‘‘catch-up’’ contribution of up to $5,500. For the 2014 plan year, we matched upto 33% of the first 6% of compensation contributed to the plan, based on length of service with theCompany, with a limit of $2,000 per calendar year. We intend for the plan to qualify under Section 401(a)of the Internal Revenue Code so that contributions by participants to the plan, and income earned on plancontributions, are not taxable to participants until withdrawn from the plan.

Additional benefits received by our executive officers, including the NEOs, include medical, dental, andvision benefits, medical and dependent care flexible spending accounts, short-term and long-termdisability insurance, accidental death and dismemberment insurance, basic life insurance coverage, andlong-term care coverage. These benefits are provided to our executive officers on the same basis as to allof our full-time employees.

We design our employee benefits programs to be affordable and competitive in relation to the market, aswell as compliant with applicable laws and practices. We adjust our employee benefits programs asneeded based upon regular monitoring of applicable laws and practices and the competitive market.

Perquisites

We do not view perquisites or other personal benefits as a significant component of our executivecompensation program. From time to time, we have provided limited perquisites to certain executiveofficers. In the future, we may provide perquisites or other personal benefits in limited circumstances,such as where we believe it is appropriate to assist an individual executive officer in the performance ofhis or her duties, to make our executive officers more efficient and effective, and for recruitment,motivation, or retention purposes. All future practices with respect to perquisites or other personalbenefits will be approved and subject to periodic review by the Compensation Committee.

Agreements between the Company and the NEOs

We have entered into employment agreements with each of our current NEOs. These agreementscontain market competitive compensation packages designed to retain our critical personnel and tomotivate these key employees to successfully execute our long-term business strategy. The


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Compensation Committee evaluated and determined the payments and benefits to be provided pursuantto these executive employment agreements. Its determinations were based primarily upon an analysisprepared by its compensation consultant regarding the practices of our Peer Group, arms-lengthnegotiations with the applicable executive, and/or other employment market-related data at the time.

In addition to provisions relating to compensation payments and benefits, confidentiality, non-competitionand/or non-solicitation of clients and employees, the employment agreements also provide theseexecutive officers, including the NEOs, with certain protections in the event of termination of theiremployment under specified circumstances, including following a change in control of the Company. Webelieve that entering into these agreements helps these executive officers maintain continued focus anddedication to their assigned duties to maximize shareholder value when faced with a potential transactionthat could involve a change in control of the Company. The terms and conditions of these agreementswere determined after review by our Compensation Committee of our retention goals for each executiveofficer, as well as an analysis of competitive market data.

For a summary of the material terms and conditions of the post-employment compensation arrangementsfor the NEOs, including arrangements concerning our former Chief Executive Officer (Mr. Peterschmidt),see ‘‘Potential Payments upon Termination or Change in Control.’’

Role of Compensation Committee

The Compensation Committee is responsible for formulating, determining, reviewing, and modifying thecompensation of our executive officers as well as the development and oversight of our compensationphilosophy. The Compensation Committee is authorized to retain the services of one or more executivecompensation advisors, as it determines in its discretion, in connection with the discharge of itsresponsibilities. The Compensation Committee:

• Evaluates the performance of our Chief Executive Officer and other executive officers in light ofour corporate goals and objectives and, based on such evaluation, reviews and approves theannual base salary, annual performance-based cash incentive plan opportunities and awards,long-term incentive compensation and, as necessary, post-employment compensationarrangements and health and welfare benefits;

• Reviews, approves, and reports to our Board of Directors with respect to our annualperformance-based cash incentive plan awards and equity-based plans and grants of awardsthereunder;

• Reviews and approves all equity compensation plans and awards pursuant to our shareholder-approved plans; and

• Reviews succession planning for our Chief Executive Officer and other executive officers.

Role of Management

In determining the performance criteria and compensation of our executive officers, the CompensationCommittee takes into account the recommendations of our Chief Executive Officer (except with respect tohis own compensation). Typically, our Chief Executive Officer will make these recommendations for ourexecutive officers based on his assessment of each executive officer’s individual performance as well ashis knowledge of each executive officer’s job responsibilities, seniority, expected future contributions, andhis evaluation of competitive market data.


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Our Chief Executive Officer also attends meetings of our Board of Directors and the CompensationCommittee at which executive compensation matters are addressed, except with respect to discussionsinvolving his own compensation. Decisions with respect to our Chief Executive Officer’s compensationare made by the Compensation Committee, all of the members of which are also independent membersof our Board of Directors.

Role of Compensation Consultant

Prior to September 2014, Compensia served as the compensation consultant to the CompensationCommittee. In September 2014, the Compensation Committee retained the services of Radford as itscompensation consultant. Radford serves at the discretion of the Compensation Committee. Radford wasengaged to provide advice and information relating to executive officer and director compensation. In2014, Radford also assisted the Compensation Committee in (i) reviewing our Peer Group, (ii) analyzingexecutive officer compensation, (iii) reviewing and analyzing market data related to our executive officers’base salaries, annual performance-based cash incentives, and long-term equity incentive compensationlevels, and (iv) evaluating equity plan design and structures.

Radford and Compensia reported directly to the Compensation Committee and did not provide anyservices to the Company or its management in 2014 other than those provided to the CompensationCommittee described above. The Compensation Committee has considered the independence ofRadford and Compensia in light of the new listing standards of the NYSE on compensation committeeadvisor independence and the rules of the SEC and has concluded that the work performed by Radfordand Compensia did not raise any conflict of interest.

Equity Grant Policy

We do not have an established formal policy with respect to the timing of equity awards in coordinationwith the release of material nonpublic information. As a matter of practice and informal policy, however,the Compensation Committee generally grants equity awards during periods considered to be our ‘‘opentrading windows’’ (that is, the periods beginning 24 hours following our earnings release and ending onemonth 14 calendar days prior to the end of the fiscal quarter). In addition, any options to purchase sharesof our common stock are required to be granted with an exercise price at least equal to the closing price ofour common stock for the most recent trading day prior to the date of grant.

Deductibility of Executive Compensation

Generally, Section 162(m) of the Internal Revenue Code disallows a tax deduction to a publicly-tradedcorporation for any remuneration in excess of $1 million paid in any taxable year to its chief executiveofficer and each of its three other most highly-compensated executive officers (other than its chieffinancial officer). Remuneration in excess of $1 million may be deducted if, among other things, it qualifiesas ‘‘performance-based compensation’’ within the meaning of the Internal Revenue Code.

To the extent consistent with our overall compensation philosophy and practices, we generally intend toseek to qualify most of the variable compensation paid to our executive officers for the ‘‘performance-based compensation’’ exemption from the deduction limit. As such, in approving the amount and form ofcompensation for our executive officers, the Compensation Committee considers all elements of the costto us of providing such compensation, including the potential impact of the Section 162(m) deduction limit.The Compensation Committee may, in its judgment, authorize compensation payments that do notcomply with an exemption from the deduction limit when it believes that such payments are appropriate toattract and retain executive talent.


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Taxation of Nonqualified Deferred Compensation

Section 409A of the Internal Revenue Code requires that amounts that qualify as ‘‘non-qualified deferredcompensation’’ satisfy certain requirements with respect to the timing of deferral elections, timing ofpayments, and certain other matters. Generally, the Compensation Committee intends to administer ourexecutive compensation program and design individual compensation components, as well as thecompensation plans and arrangements for our employees generally, so that they are either exempt from,or satisfy the requirements of, Section 409A. From time to time, we may be required to amend some of ourcompensation plans and arrangements to ensure that they are either exempt from, or compliant with,Section 409A.

Taxation of ‘‘Parachute’’ Payments and No Excise Tax Gross-ups

Sections 280G and 4999 of the Internal Revenue Code provide that certain executive officers anddirectors who hold significant equity interests and certain other service providers may be subject to anexcise tax if they receive payments or benefits in connection with a change in control of the Company thatexceeds prescribed limits, and that the Company, or a successor, may forfeit a deduction on the amountssubject to this additional tax. The employment agreements with our executive officers provide that, if thepayments to the executive officer would cause him or her to become subject to the excise tax imposedunder Section 4999 (or any similar federal, state, or local tax), we will reduce the change in controlpayments or benefits to the extent necessary to avoid the application of the excise tax if, as a result ofsuch reduction, the net benefit payable to the executive officer as so reduced (after payment of applicableincome taxes) exceeds the net benefit to him or her of the change in control payment or benefits withoutsuch reduction (after payment of applicable income taxes and excise taxes).

Accounting for Stock-Based Compensation

The Compensation Committee considers accounting requirements in designing compensation plans andarrangements for our executive officers and other employees. Chief among these is Financial AccountingStandards Board Accounting Standards Codification Topic 718 (‘‘ASC Topic 718’’), the standard whichgoverns the accounting treatment of certain stock-based compensation. Among other things, ASC Topic718 requires us to record compensation expense in our income statement for all equity awards granted toour executive officers and other employees. This compensation expense is based on the grant date fairvalue of the equity award and, in most cases, will be recognized ratably over the award’s requisite serviceperiod, which generally will correspond to the award’s vesting schedule. The full grant date fair value ofequity awards is reported in the compensation tables below, even though recipients may never realizeany value from their equity awards.


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Executive Compensation Tables

2014 Summary Compensation Table

The following table discloses the compensation awarded, earned, or paid to each named executive officerfor the fiscal year ended December 31, 2014, as well as the two prior fiscal years, where applicable.Numbers have been rounded to the nearest dollar.

Non-EquityIncentive

Stock Option Plan All OtherSalary Bonus Awards Awards Compensation Compensation Total

Name and Principal Position Year ($) ($)(1) ($)(2) ($)(2) ($)(3) ($)(4) ($)

Michael Boustridge(5) 2014 350,000 1,300,000(6) 4,231,873(7) 1,297,662(7) — 127 7,179,662President & CEO

Christian Mezger(8) 2014 375,385 159,600 1,561,100 — 53,200 2,180 2,151,465EVP & CFO

Tina Piermarini(9) 2014 204,058 202,500 1,184,000 — — 238 1,590,796EVP & ChiefAdministrative Officer

R. Bruce Douglas(10) 2014 350,000 — 812,963 — 162,351 2,180 1,327,494Former SVP & GM, 2013 348,731 — 838,000 — 154,508 2,180 1,343,419North America 2012 320,000 52,000 82,600 67,254 104,000 869 626,723

David C. Peterschmidt(11) 2014 345,442 — 2,981,066 751,030 179,930 392,206 4,649,674Former President & CEO 2013 675,000 — 4,089,440 — 436,488 1,524 5,202,452

2012 662,885 — — — 488,374 3,048 1,154,307

Michael E. Lehman(12) 2014 205,662 100,000 — — — 435 306,097Former Interim CFO 2013 112,000 — — — — 183 112,183

Anthony Fogel(13) 2014 165,000 — 531,835 6,540 64,369 2,090 769,834Former SVP & CHRO 2013 330,000 — 419,000 — 118,553 2,180 869,733

2012 246,231 — 330,000 358,260 81,327 1,152 1,016,970

(1) Reflects guaranteed and discretionary cash bonus payments.

(2) The amounts reported in these columns reflect the grant date fair value of the RSU and optionawards granted during the applicable year, computed in accordance with ASC Topic 718.Assumptions used in the calculation of grant date fair value for equity awards granted in 2014 areincluded in Note 14 to the Consolidated Financial Statements in our 2014 Annual Report onForm 10-K. Our 2014 Annual Report on Form 10-K was filed with the SEC on February 20, 2015.For 2014, all of the amounts reported in connection with stock and option awards toMr. Peterschmidt represent the incremental fair value, computed in accordance with ASC Topic718, of the RSU awards and stock options that were accelerated in connection with hisseparation from the Company.

(3) Reflects total actual cash incentive awards which are based on the performance plan targetsapproved by the Compensation Committee at the beginning of the fiscal year. See ‘‘AnnualPerformance-based Cash Incentive Plan—Awards for Fiscal 2014 Performance’’ above.

(4) Consists of Company contributions under our Section 401(k) Savings Plan, amounts we pay forlife insurance benefits and, with respect to Mr. Peterschmidt, $762 in life insurance benefits,$6,858 in health insurance premiums under COBRA and $384,586 in consulting fees inconnection with his separation from the Company.


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(5) Mr. Boustridge was appointed President and Chief Executive Officer on June 12, 2014. His 2014annual base salary of $700,000 was prorated in 2014. Prior to his appointment as our ChiefExecutive Officer, Mr. Boustridge received compensation as a non-executive member of ourBoard of Directors. For compensation paid to Mr. Boustridge as a director prior to hisappointment as Chief Executive Officer, see ‘‘Director Compensation’’ above.

(6) Mr. Boustridge received a guaranteed $950,000 cash bonus in connection with his appointmentas President and Chief Executive Officer, as well as a $350,000 discretionary cash bonus for Q3and Q4 2014 financial performance and Mr. Boustridge’s individual performance.

(7) The amount of Stock Awards in the table above represents stock awards granted toMr. Boustridge after his appointment as President and Chief Executive Officer. For details on thestock awards he received as a member of our Board of Directors and prior to his appointment asChief Executive Officer please see ‘‘Director Compensation’’ above.

(8) Mr. Mezger was appointed EVP and Chief Financial Officer on February 11, 2014.

(9) Ms. Piermarini was appointed EVP and Chief Administrative Officer on June 13, 2014.

(10) Mr. Douglas resigned as our Senior Vice President and General Manager, North America onJanuary 24, 2015.

(11) Mr. Peterschmidt served as President and Chief Executive Officer until his resignation effectiveJune 12, 2014. The Company and Mr. Peterschmidt entered into a separation agreementeffective June 12, 2014 that provided for, among other things, the continuation of certain benefits,the acceleration of vesting of unvested equity awards, payment of relocation expenses and aconsulting agreement with the Company in exchange for a release of any claims against theCompany. The grant date fair value of stock awards and option awards represents theincremental fair value of the RSU awards and stock options that were accelerated and would nothave otherwise vested in 2014.

(12) Mr. Lehman joined the Company as interim Chief Financial Officer on September 9, 2013 andserved as the interim Chief Financial Officer through February 11, 2014.

(13) Mr. Fogel served as our Senior Vice President and Chief Human Resources Officer until hisresignation effective June 13, 2014. The Company and Mr. Fogel entered into a separationagreement effective June 13, 2014 that provided for, among other things, the continuation ofcertain benefits, the acceleration of vesting of unvested equity awards through March 20, 2015and an executive outplacement service in exchange for a release of any claims against theCompany. The grant date fair value of stock awards and option awards include the incrementalfair value of the RSU awards and stock options that were accelerated and would not haveotherwise vested in 2014.


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2014 Grants of Plan-Based Awards Table

The following table summarizes certain information regarding stock options, RSU awards and otherplan-based awards granted to the named executive officer in the year ended December 31, 2014:

All Other All Other GrantEstimated PossibleStock Option Date FairPayouts Under

Awards: Awards: Exercise Value ofNon-EquityNumber Number of or Base StockIncentive Plan

of Shares Securities Price of andAwards(1)of Stock Underlying Option Option

Type of Grant Threshold Target Maximum or Units Options Awards AwardsName Grant Date ($)(2) ($)(3) ($)(4) (#) (#) ($/Sh) ($)

Michael Boustridge Stock Options 9/15/2014 815,217(5)(6) 3.68 1,297,662RSUs 9/15/2014 804,721(5)(7) 2,961,373RSUs 12/29/2014 350,000(8) 1,270,500

Christian Mezger RSUs 3/11/2014 195,600(9) 929,100RSUs 12/10/2014 200,000(10) 632,000Cash Incentive Plan 170,240 266,000 372,400

Tina Piermarini RSUs 9/15/2014 150,000(7) 552,000RSUs 12/10/2014 200,000(10) 632,000Cash Incentive Plan 85,147 133,042 186,259

R. Bruce Douglas RSUs 3/11/2014 171,150(9) 812,963Cash Incentive Plan 151,200 252,000 346,500

David Peterschmidt RSUs 6/12/2014 636,980(11) 2,981,066Stock Options 6/12/2014 350,000(11) 2.77 751,030Cash Incentive Plan 501,784 776,330 1,090,050

Michael E. Lehman(12) — — — — — — —

Anthony Fogel Cash Incentive Plan 158,400 247,500 297,000RSUs 3/11/2014 88,909(9) 422,318RSUs 6/16/14 23,401(13) 109,517Stock Options 6/16/14 14,517(13) 4.68 6,540

(1) Amounts represent the potential cash incentive payments if the threshold, target or maximumperformance levels are achieved under the Company’s annual performance-based cashincentive plan for the complete 2014 performance period (i.e., achievement of the same awardlevel in each quarter). See the ‘‘Summary Compensation Table’’ for the actual annualperformance-based cash incentive plan payments made to each NEO during 2014.

(2) Amounts shown in the threshold column are based on the assumption that the NEO earned noneof the component of the potential award that was based on subjective individual performancemeasures and that the Company achieved the minimum threshold performance level underwhich an award could be paid, which performance level was 80% of the performance target for allfour quarters in 2014 as described in ‘‘Compensation Discussion and Analysis—AnnualPerformance-based Cash Incentive Plan’’ section above, in which case each NEO would haveearned 80% of the target cash incentive award established by the Compensation Committee forsuch NEO with respect to Company financial performance.

(3) Amounts shown in the target column are based on the assumption that the NEO earned 100% ofthe component of the potential award that was based on subjective individual performancemeasures and that the Company achieved 100% of the performance target for all four quarters in2014 as described in ‘‘Compensation Discussion and Analysis—Annual Performance-basedCash Incentive Plan’’ section above, in which case each NEO would have earned 100% of thetarget cash incentive award established by the Compensation Committee for such NEO withrespect to Company financial performance and individual performance measures.


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(4) Amounts shown in the maximum column are based on the assumption that the NEO earned100% of the component of the potential award that was based on subjective individualperformance measures and that the Company achieved 150% of the performance target for allfour quarters in 2014 as described in ‘‘Compensation Discussion and Analysis—AnnualPerformance-based Cash Incentive Plan’’ section above, in which case each NEO would haveearned 150% of the target cash incentive award established by the Compensation Committee forsuch NEO with respect to Company financial performance and 100% of the target cash incentiveaward based on individual performance measures.

(5) These awards represent grants to Mr. Boustridge after he was appointed Chief Executive Officer.For information on the stock awards Mr. Boustridge received as Director, please see ‘‘DirectorCompensation’’ above.

(6) This stock option inducement grant included the immediate vesting of two monthly tranches,followed by monthly vesting through June 30, 2018.

(7) Mr. Boustridge’s and Ms. Piermarini’s inducement grants of RSU awards began vestingimmediately with quarterly vesting through March 31, 2017.

(8) This RSU grant to Mr. Boustridge vests on December 29, 2017.

(9) These RSU awards vest in equal quarterly installments over three years commencing six monthsfollowing the grant date.

(10) These RSU awards vest on December 10, 2017.

(11) These awards represent the accelerated vesting of previously granted equity awards pursuant tothe terms of Mr. Peterschmidt’s separation agreement with the Company (see the summarydescription of Mr. Peterschmidt’s severance agreement above for additional details). The grantdate fair value of these awards represents the incremental fair value of the RSU awards andstock options that were accelerated and would not have otherwise vested in 2014.

(12) Mr. Lehman served as our interim Chief Financial Officer through February 11, 2014. Mr. Lehmanwas not eligible to participate in the Company’s Cash Incentive Award Program and did notreceive any equity awards in connection with his service.

(13) These awards represent the accelerated vesting of previously granted equity awards pursuant tothe terms of Mr. Fogel’s separation agreement with the Company (see the description ofMr. Fogel’s severance agreement below for additional details). The grant date fair value of theseawards represents the incremental fair value of the RSU awards and stock options that wereaccelerated and would not have otherwise vested in 2014.

See ‘‘Compensation Discussion and Analysis—Potential Payments Upon Termination or Change inControl’’ for additional details regarding the employment agreements with our Named Executive Officers,see ‘‘Compensation Discussion and Analysis—Annual Performance-based Cash Incentive Plan’’ foradditional details regarding the annual cash bonus program for our Named Executive Officers, and see‘‘Compensation Discussion and Analysis—Long-term Equity-based Compensation (LTI)’’ for adiscussion of the material terms of the equity awards reflected in the Summary Compensation Table andthe Grants of Plan-Based Awards Table.


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2014 Outstanding Equity Awards at Fiscal Year-End Table

The following table summarizes certain information concerning outstanding equity awards held by namedexecutive officers on December 31, 2014:

Option Awards Stock Awards

Number of Number ofSecurities Securities Number of Market Value ofUnderlying Underlying Shares or Shares or Units

Unexercised Unexercised Option Option Units of Stock of Stock thatOptions (#) Options (#) Exercise Expiration that have not have not

Name Grant Date Exercisable Unexercisable Price ($) Date Vested (#) Vested ($)

Michael Boustridge 9/15/2014 101,902 713,315(1) 3.68 9/15/2021 603,541(2) 2,142,57112/29/2014 350,000(3) 1,242,500

Christian Mezger 8/15/2011 65,000 — 3.20 8/15/20182/21/2012 28,065 1,935(4) 4.13 2/21/2019 2,273(5) 8,0694/26/2012 4,545(5) 16,135

6/3/2013 46,154(6) 163,8473/11/2014 160,036(5) 568,128

12/10/2014 200,000(7) 710,000

Tina Piermarini 9/15/2014 112,500(2) 399,37512/10/2014 200,000(7) 710,000

R. Bruce Douglas 10/13/2011 100,000 — 3.74 10/13/20182/21/2012 28,065 1,935(4) 4.13 2/21/2019 1,818(5) 6,454

6/3/2013 92,308(6) 327,6933/11/2014 140,031(5) 497,110

David Peterschmidt 7/1/2010 1,400,000(8) — 2.77 12/25/2015

Michael Lehman — — — — —

Anthony Fogel — — — — — — —

(1) Mr. Boustridge’s stock option inducement grant included the immediate vesting of two monthlytranches, followed by monthly vesting through June 30, 2018.

(2) Mr. Boustridge’s and Ms. Piermarini’s inducement grants of RSU awards began vestingimmediately with quarterly vesting through March 31, 2017.

(3) This RSU grant to Mr. Boustridge vests on December 29, 2017.

(4) These stock options vest in equal monthly installments over three years commencing six monthsfollowing the grant date.

(5) These RSU awards vest in equal quarterly installments over three years commencing six monthsfollowing the grant date.

(6) These RSU awards vest in equal quarterly installments over three years commencing on thegrant date.

(7) These RSU awards vest on December 10, 2017.

(8) Pursuant to the separation agreement between Mr. Peterschmidt and the Company effectiveJune 12, 2014, all of Mr. Peterschmidt’s unvested stock options and RSU awards wereaccelerated and immediately vested. In addition, the exercise period for all stock options wasamended to the earlier of the original expiration date or December 25, 2015. The table abovedoes not include any of Mr. Peterschmidt’s RSU awards since all stock options and RSUsbecame vested pursuant to his separation agreement. Such RSU awards are included in the2014 Option Exercises and Stock Vested Table below.


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2014 Option Exercises and Stock Vested Table

The following table summarizes information with respect to stock options exercised and RSU awards thatvested during 2014 for our named executive officers:

Option Awards Stock Awards

Number of Number ofShares Value Shares Value

Acquired on Realized on Acquired on Realized onVesting Vesting Vesting Vesting

Name (#) ($) (#) ($)(1)

Michael Boustridge(2) — — 201,180 710,836Christian Mezger — — 94,605 360,798Tina Piermarini — — 37,500 132,500R. Bruce Douglas — — 114,475 444,515David Peterschmidt(3) — — 823,499 4,462,497Michael Lehman — — — —Anthony Fogel(4) 150,000 75,949 99,224 484,361

(1) The value was determined by multiplying the number of RSU awards by the closing market priceof the underlying shares of our Common Stock on the vesting date.

(2) Includes vesting associated with RSUs granted to Mr. Boustridge in connection with him beingappointed Chief Executive Officer. For information on awards granted to Mr. Boustridge while hewas serving as a member of our Board of Directors, please see ‘‘Director Compensation’’ above.

(3) Pursuant to Mr. Peterschmidt’s separation agreement with the Company, all of his unvestedstock options and RSUs were accelerated and became vested as of June 12, 2014. This tableincludes all of Mr. Peterschmidt’s RSU awards that were accelerated pursuant to his separationagreement. All of Mr. Peterschmidt’s vested stock options remain exercisable until the earlier ofthe original expiration date for such stock options or December 25, 2015.

(4) Pursuant to Mr. Fogel’s separation agreement with the Company, all of his unvested stockoptions and RSUs that would have vested by March 20, 2015 were accelerated and becamevested as of June 13, 2014. This table includes Mr. Fogel’s RSU awards and stock option awardsthat were accelerated pursuant to his separation agreement. As of December 31, 2014, Mr. Fogelhad exercised all of his vested and outstanding stock options.

Pension Plans and Deferred Compensation

The Company does not provide any defined benefit pension plans or deferred compensation benefits toour named executive officers.

Potential Payments Upon Termination or Change in Control

Employment Agreement with Mr. Boustridge

The Company entered into an employment agreement with Mr. Boustridge effective June 12, 2014, whichprovides for certain benefits and payments upon a termination or change in control. Such benefits varydepending on the nature of the termination. Upon either Mr. Boustridge’s termination of employment bythe Company without cause, or by him for good reason (each term as defined in the employmentagreement), in addition to already earned salary and any earned but unpaid incentive compensation for


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the prior year, Mr. Boustridge is entitled to receive certain payments and benefits, subject to his executinga separation and release agreement. Such payments and benefits include:

• a prorated performance-based cash bonus (provided that performance targets are met) for theportion of the year in which the termination occurs;

• a severance payment equal to 1.5 times Mr. Boustridge’s then current base salary and annualbonus target in effect on the day of termination;

• immediate vesting of all outstanding and unvested equity awards, if any that would have vestedwithin the 12 months following Mr. Boustridge’s separation date (to the extent such equity awardsare subject to performance vesting requirements, such vesting will be calculated at the targetlevel of performance); and

• health and dental benefits for a period of 18 months following termination for Mr. Boustridge andhis spouse.

The severance payments and benefits described above are not in addition to Change in Controlpayments and benefits.

Mr. Boustridge’s employment agreement also provides for Change in Control payments and benefits thatare structured with a ‘‘double trigger,’’ which means they are contingent upon both a Change in Control(as that term is defined in the agreement) and an actual termination of employment by the Companywithout cause or a termination for good reason by Mr. Boustridge within 24 months after the occurrence ofthe Change of Control. In the event of a Change in Control followed by a termination meeting theseconditions, in addition to already earned but unpaid salary and vacation pay and reimbursement ofincurred expenses, Mr. Boustridge is entitled to receive the following severance payments and benefits:

• a prorated performance-based cash bonus (provided that performance targets are met) for theportion of the year in which the termination occurs;

• a severance payment equal to 2.0 times his then current base salary and annual performance-based cash bonus at the target level in effect on the day of termination;

• full vesting of all outstanding and unvested equity awards; and

• health and dental benefits for a period of 24 months following termination for him and his spouse.

Mr. Boustridge’s employment agreement also provides for certain benefits in the event of his terminationas a result of death or long-term disability. In the event of such a termination, Mr. Boustridge (or his estateor beneficiaries, as applicable), would be entitled to receive:

• already earned and unpaid salary prior to the separation;

• any earned but unpaid bonus for the immediately preceding calendar quarter in which it wasearned;

• a prorated performance-based cash bonus (provided that performance targets are met) forimmediately preceding calendar quarter; and


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• all vested stock options must be exercised by the earlier of the one-year anniversary ofMr. Boustridge’s separation from service and the equity grant expiration date.

The agreement with Mr. Boustridge includes terms and provisions to protect the Company’s business andconfidential information in the event of termination of his employment, including standard non-compete,non-solicitation of clients, and no-hire obligations and a standstill provision during the term of employmentand for 18 months after termination of employment. All severance or Change in Control payments andbenefits are subject to compliance with these provisions, as well as the receipt of a signed legal releasefrom Mr. Boustridge. Upon a termination of employment for cause (as defined in his employmentagreement), Mr. Boustridge is not entitled to any severance payments or benefits.

Standard Employment Agreement for EVPs, SVPs and Key VPs

During 2011 and 2012, the Compensation Committee implemented a program to standardize theemployment agreements for the Company’s executive vice presidents, senior vice presidents, and keyvice presidents. As of December 31, 2014, Messrs. Mezger and Douglas and Ms. Piermarini were eachparty to an employment agreement that reflects our standard terms, other than that Ms. Piermarini’semployment agreement provides for severance benefits upon a without cause termination only after shehas been employed by us for at least one year. The termination provisions included in the standardagreement with Messrs. Mezger and Douglas provide that upon a termination of employment by theCompany without cause (as defined in the employment agreement), in addition to already earned butunpaid salary and vacation pay and reimbursement of incurred expenses, the executive officer is entitledto receive the following payments and benefits:

• a cash severance payment equal to either nine or 12 months (depending on factors such asseniority of the executive officer) of the executive officer’s then current base salary and annualincentive at the target level in effect on the day of termination;

• immediate and full vesting of all outstanding and unvested equity awards that are scheduled tovest within six months or one year (depending on factors such as seniority of the executiveofficer) following the day of termination; and

• reimbursement of the cost of continuing health insurance coverage for the executive officer underthe Company’s health insurance plan for a period of 12 months following termination.

The severance payments and benefits described above are not in addition to Change in Control benefits.

Under the standard employment agreement, Change in Control payments and benefits are structuredwith a ‘‘double trigger,’’ which means they are contingent upon both a Change in Control (as that term isdefined in the agreement) and an actual termination of employment by the Company without cause or atermination for good reason by the executive officer within 12 months after the occurrence of the Changeof Control. In the event of a Change in Control followed by a termination of employment meeting theseconditions, in addition to already earned but unpaid salary and vacation pay and reimbursement ofincurred expenses, the executive officer is entitled to receive the following severance payments andbenefits:

• a prorated portion of the executive officer’s annual incentive for the year in which the terminationoccurs, provided that performance targets related to the award are achieved (which is paid at thesame time as the annual awards are normally paid for the year);


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• a severance payment equal to 1.25 to 1.75 times (depending on factors such as the seniority ofthe executive officer) the executive officer’s then current annual salary and annual incentive atthe target level as in effect on the day of termination;

• immediate and full vesting of all outstanding and unvested equity awards held by the executiveofficer on the day of termination; and

• reimbursement of the cost of continuing health insurance coverage for the executive officer underthe Company’s health insurance plan for a period of 12 to 18 months (depending on factors suchas seniority of the executive officer) following termination.

The standard employment agreements includes terms and provisions to protect the Company’s businessand confidential information in the event of termination of the employment of the executive officer,including standard non-compete, non-solicitation of clients, and no-hire obligations during the term ofemployment and for 12 months after termination of employment. All severance or Change in Controlpayments and benefits are subject to compliance with these provisions, as well as the receipt of a signedlegal release from the executive officer. Upon a termination of employment for cause (as defined in thestandard agreement), the executive officer is not entitled to any severance payments or benefits.

The Compensation Committee determined the payment provisions based, in part, on an analysis by theCompensation Committee’s compensation consultant of similar provisions at companies in the PeerGroup and other employment market-related data.

Separation Agreement with Mr. Peterschmidt

Pursuant to the separation agreement between Mr. Peterschmidt and the Company effective June 12,2014, in connection with his resignation from the Company in June 2014, Mr. Peterschmidt is providingconsulting services through June 12, 2015 for $59,167 per month. In addition, Mr. Peterschmidt and hisspouse are entitled to health and dental benefits (or payment of COBRA premiums) for 24 months fromthe date of Mr. Peterschmidt’s resignation, which in 2014 amounted to $6,858. Under the separationagreement the Company also will pay reasonable relocation expenses and closing costs for the sale ofMr. Peterschmidt’s Colorado residence as well as the cost, if any, of renewing Mr. Peterschmidt’s statusas a Global Services member on United Airlines for two years after the date of Mr. Peterschmidt’sresignation. As of December 31, 2014, Mr. Peterschmidt had not yet incurred any relocation-related orUnited Airlines expenses.

Under the separation agreement, all of Mr. Peterschmidt’s outstanding equity awards were acceleratedand once vested, all of Mr. Peterschmidt’s options must be exercised by the earlier of the 18 monthanniversary of his resignation or the expiration date of the option. The separation agreement alsoincludes a customary non-disparagement provision and release of claims against the Company.

Employment Agreement with Mr. Lehman

Mr. Lehman served as the Company’s interim chief financial officer pursuant to an Interim ExecutiveEmployment and Confidentiality Agreement with the Company. The agreement included terms andprovisions to protect the Company’s business and confidential information in the event of termination ofhis employment, including standard non-compete, non-solicitation of clients, and no-hire obligationsduring the term of employment and for 12 months after termination of employment. Mr. Lehman’semployment agreement did not provide for any severance payment or other benefits upon a terminationof employment in connection with a Change in Control other than payment of earned and unpaid salary


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through the date of separation, accrued, unpaid vacation pay through the date of separation andreimbursement of expenses incurred prior to separation.

Separation Agreement with Mr. Fogel

Pursuant to the separation agreement between Mr. Fogel and the Company effective June 13, 2014, theCompany provided severance benefits to Mr. Fogel, consistent with the terms of his employmentagreement, including a one-time severance payment equal to nine months of salary and bonus at targetlevel, accelerated vesting of equity awards that would have vested within six months of June 20, 2015,and twelve months of health benefits. In addition, to further facilitate the transition of global humanresource functions to Ms. Piermarini, Mr. Fogel was retained as a consultant through September 30, 2014and the Company extended the acceleration of the vesting of Mr. Fogel’s equity awards to awards thatwould vest through the period ending on March 20, 2015.

Potential payments to our NEOs upon termination or a change of control, assuming such termination orchange of control were to occur on December 31, 2014, are as follows:

Cash Accelerated Health OtherTermination Total Severance Incentive Equity Benefits Benefits

Name Scenario ($) ($) ($) ($)(1) ($) ($)

Michael Boustridge Not for Cause 3,437,368 1,050,000 1,425,000 952,252 10,116 —Change in Control 6,698,560 1,400,000 1,900,000 3,385,071 13,489 —

Christian Mezger Not for Cause 1,245,879 380,000 266,000 579,573 20,306 —Change in Control 2,627,137 665,000 465,500 1,466,178 30,459 —

Tina Piermarini Not for Cause — — — — — —Change in Control 2,260,670 708,750 425,250 1,109,375 17,295 —

R. Bruce Douglas(2) Resigned — — — — — —

David Peterschmidt(3) Resigned 4,088,958 710,004 — 3,372,096 6,858 —

Michael E. Lehman(4) Resigned — — — — — —

Anthony Fogel(5) Resigned 850,436 433,125 — 385,019 20,292 12,000

(1) Messrs. Boustridge and Mezger are entitled to vesting of their unvested equity scheduled to vestwithin the twelve months following a termination not for cause and in the event of a change ofcontrol all unvested equity shall vest.

(2) Mr. Douglas resigned on January 24, 2015 and was not entitled to any severance benefits.

(3) Reflects amounts actually paid to Mr. Peterschmidt in 2014 under his separation agreement.

(4) Mr. Lehman served as the interim Chief Financial Officer of the Company through February 11,2014 and was not entitled to any severance benefits.

(5) Reflects amounts actually paid to Mr. Fogel in 2014 under his separation agreement. Otherbenefits consist of an executive outplacement service.


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Part 7—Independent Registered Public Accounting Firm

Report of the Audit Committee

The Audit Committee of the Board assists the Board in fulfilling its responsibilities for financial reportingcompliance by reviewing the audited financial statements, reviewing the system of internal controls thatmanagement and the Board of Directors have established, and reviewing the overall audit process. TheAudit Committee, in its capacity as a committee of the Board, is directly responsible for the appointment,compensation, and oversight of the Company’s independent registered public accounting firm.

The Audit Committee has reviewed and discussed the audited financial statements for the fiscal yearended December 31, 2014 with our management and Ernst & Young LLP, our independent registeredpublic accounting firm. Management is responsible for the preparation, presentation and integrity of thefinancial statements, accounting and financial reporting principles and internal control over financialreporting. Ernst & Young LLP is responsible for performing an independent audit of the financialstatements in accordance with generally accepted auditing standards and for expressing opinions on theconformity of the financial statements with accounting principles generally accepted in the United States.

The Audit Committee has discussed with Ernst & Young LLP the matters required to be discussed byStatement on Auditing Standards No. 61, as amended, Communication With Audit Committees, and thePublic Company Accounting Oversight Board (‘‘PCAOB’’) AU Section 380, Communications with AuditCommittees, and has received the written disclosures and the letter from Ernst & Young required byapplicable requirements of the PCAOB regarding the independent auditor’s communications with theAudit Committee concerning independence. The Audit Committee has also discussed with Ernst &Young LLP their independence.

Based on its reviews and discussions referred to above, the Audit Committee recommended to the Boardthat the audited financial statements be included in our Annual Report on Form 10-K for the year endedDecember 31, 2014 for filing with the SEC.

Submitted by the Members of the Audit Committee:

Jean-Francois Heitz, ChairmanPaul A. JacobsStephen S. KurtzKurt J. Lauk

Auditor Fees and Services

The following table presents fees for professional services rendered by Ernst & Young during fiscal 2013and 2014.

2014 2013($) ($)

Audit Fees 1,966,868 2,004,027Audit-Related Fees 260,116 179,510Tax Fees 12,390 92,823All Other Fees — —


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Audit Fees. The aggregate fees billed in each of the last two fiscal years for professional servicesrendered by Ernst & Young for audit of our annual financial statements included in our Annual Reports onForm 10-K, review of our quarterly financial statements included in our Quarterly Reports on Form 10-Q,statutory audits required internationally, consents and accounting consultations, and such other servicesthat generally only our independent registered public accounting firm can provide.

Audit-Related Fees. The aggregate fees billed in each of the last two fiscal years for professionalservices rendered by Ernst & Young for employee benefit plan audits and certain attestation services notrequired by statute traditionally performed by independent registered public accounting firms.

Tax Fees. The aggregate fees billed in each of the last two fiscal years for professional servicesrendered by Ernst & Young for tax compliance, tax advice, and tax planning. The nature of the taxcompliance services provided in this category includes preparation of tax returns and refund claims. Taxplanning services include assistance with tax audits and appeals, advice with respect to mergers,acquisitions, and dispositions or other technical advice.

All Other Fees. The aggregate fees incurred in each of the last two fiscal years for products andservices provided by Ernst & Young, other than the services reported above. In each of the last two fiscalyears, no fees were billed for services other than audit, audit-related, or tax services.

Independence of Our Registered Public Accounting Firm

The Audit Committee has considered the issue of the independence of our registered public accountingfirm and concluded that the provision of services by Ernst & Young in 2014 is consistent with maintainingthe registered public accounting firm’s independence.

Audit Committee Pre-Approval Policy

The Audit Committee has established pre-approval policies and procedures as required by law thatinclude criteria for considering whether the provision of the services would be compatible with maintainingthe independence of our independent registered public accounting firm and a process by which theChairman of the Audit Committee may approve such audit and non-audit services with subsequent reviewof all pre-approved services by the full Audit Committee. The Audit Committee pre-approved all audit andnon-audit services in 2014 and 2013.


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Part 8—Other Information

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires that our directors, executive officers, and persons whobeneficially own greater than 10% of a registered class of our equity securities file initial reports ofownership and changes in ownership of such securities with us and the SEC. Based solely upon ourreview of copies of the Section 16(a) reports and the written representations we have received from ourreporting persons, we believe that during the year ended December 31, 2014, all of our directors,executive officers, and greater than 10% beneficial owners were in compliance with Section 16(a)reporting requirements, other than a Form 3 by Ms. Piermarini relating to her appointment as ExecutiveVice President and Chief Administrative Officer on June 13, 2014, a Form 4 for each of Ms. Piermarini andMr. Mezger to report grants of RSUs on December 10, 2014, and a Form 4 for Mr. Boustridge to report thegrant of RSUs on December 29, 2014.

Electronic Availability of Meeting Information

Available Information. This proxy statement has been distributed with a copy of the Ciber, Inc. AnnualReport on Form 10-K for the year ended December 31, 2014, as part of our 2014 Annual Report. If youwish to access an electronic version of this proxy statement or our 2014 Annual Report on Form 10-Kplease go to our website at www.ciber.com under ‘‘Investor Relations—Financials.’’

On our website you will also find copies of our Quarterly Reports on Form 10-Q, Current Reports onForm 8-K, and amendments to such reports filed or furnished by the Company. Our website also providescurrent corporate governance documents such as the Audit, Compensation, and Nominating/CorporateGovernance Committee Charters, the Code of Business Conduct and Ethics, and other usefulinformation about Ciber.

Request Email Delivery of Your 2016 Proxy Materials. You can enjoy the benefits and convenienceof electronic delivery of the proxy statement and online proxy voting. To learn about the service and toenroll for online delivery, please log on to www.ciber.com and select ‘‘Investor Relations,’’ which will takeyou to Ciber’s Investor Relations web page. Use the contact information provided under ‘‘Contact InvestorRelations’’ to begin the enrollment process.

Proposals for the 2016 Annual Meeting

Shareholders may submit proposals on matters appropriate for shareholder action at our annual meetingof Shareholders. To have your proposal included in our proxy statement and to properly bring yourproposal before the 2016 Annual Meeting of Shareholders, the Corporate Secretary of Ciber must receiveyour proposal at the address provided below by no later than January 1, 2016. In addition, all proposalsmust comply with our bylaws as well as Rule 14a-8 under the Securities Exchange Act of 1934 whichprovides the requirements for including a shareholder proposal in Company-sponsored proxy materials.Shareholders will be furnished a copy of our bylaws, without charge, upon written request to theCorporate Secretary. If we determine that a proposal or nominee does not meet these requirements, wereserve the right to deem it ineligible for inclusion in our proxy statement or for presentation to ourshareholders at the next annual meeting.


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Please address all shareholder proposals to:

Ciber, Inc.Attention: Corporate Secretary6363 South Fiddler’s Green Circle, Suite 1400Greenwood Village, Colorado 80111

If any shareholder intends to present a proposal or nominee director at the 2016 Annual Meeting ofShareholders, but does not intend to include the proposal in our proxy statement or form of proxy, then theproposal or nomination must meet additional requirements. As provided in our bylaws, shareholders maysubmit proposals and make nominations for the election of directors only if notice of the shareholder’sintent to make such a nomination or nominations in proper written form has been received by ourCorporate Secretary no later than the close of business on the 90th day, nor earlier than the close ofbusiness on the 120th day, prior to the first anniversary of the commencement of the preceding year’sannual meeting. Accordingly, any proposals or nominees for the 2016 Annual Meeting of Shareholdersmust be received by our Corporate Secretary no earlier than February 25, 2016, and no later thanMarch 26, 2016.

Other Matters for the 2015 Annual Meeting

Our Board does not intend to bring any other business before the annual meeting and our Board is notaware of any other matters that will be presented at the annual meeting. In the event that any otherbusiness is properly brought before the annual meeting, the designated proxy holders will vote asrecommended by the Board or, if no recommendation is given, in their own discretion.


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Appendix A

(Adopted by the Board of Directors on March 27, 2015, andApproved by the Stockholders of the Company on [ ● ], 2015)

ARTICLE 1. PURPOSES OF THE PLAN

The purposes of the Ciber, Inc. Amended and Restated 2004 Incentive Plan, as it may be amended fromtime to time (the ‘‘Plan’’), are to provide the Employees, Consultants, and Directors selected forparticipation in the Plan with added incentives to continue in the long-term service of the Company and tocreate in such persons a more direct interest in the future success of the operations of the Company byrelating incentive compensation to increases in stockholder value, so that the income of such persons ismore closely aligned with the income of the Company’s stockholders. The Plan is also designed toenhance the ability of the Company to attract, retain and motivate, Employees, Consultants, andDirectors by providing an opportunity for investment in the Company.

ARTICLE 2. DEFINITIONS

Wherever the following terms are used in the Plan they shall have the meanings specified below, unlessthe context clearly indicates otherwise. The singular pronoun shall include the plural where the context soindicates.

2.1 ‘‘Affiliate’’ shall have the meaning ascribed to such term in Rule 12b-2 promulgated under theExchange Act. The Board shall have the authority to determine the time or times at which ‘‘Affiliate’’ statusis determined within the foregoing definition.

2.2 ‘‘Award’’ means an Option, an award of Restricted Stock, a Stock Appreciation Right, an award ofRestricted Stock Units, an Other Share-Based Award, a Performance Bonus Award, or a Performance-Based Award granted to a Participant pursuant to the Plan.

2.3 ‘‘Award Agreement’’ means any written agreement, contract, or other instrument or documentevidencing the terms and conditions of an Award, including through electronic medium.

2.4 ‘‘Board’’ means the Board of Directors of the Company.

2.5 ‘‘Change in Control’’ means and includes each of the following:

(a) any ‘‘person’’ (as such term is used in Sections 3(a)(9) and 13(d) of the Exchange Act or‘‘group’’ (as such term is used in Section 13(d)(3) of the Exchange Act) is or becomes a‘‘beneficial owner’’ (as such term is used in Rule 13d-3 promulgated under the Exchange Act) ofmore than 40% of the Voting Stock of the Company;

(b) within any 24-month period the majority of the Board consists of individuals other thanincumbent Directors, which term means the members of the Board on the date hereof; providedthat any person becoming a Director subsequent to such date whose election or nomination for

CIBER, INC.AMENDED AND RESTATED 2004 INCENTIVE PLAN

2015 Proxy Statement A-1

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election was supported by a majority of the Directors who then comprised the incumbentDirectors shall be considered to be an ‘‘incumbent Director’’;

(c) the Company adopts any plan of liquidation providing for the distribution of all or substantiallyall of its assets;

(d) the Company transfers all or substantially all of its assets or business (unless theshareholders of the Company immediately prior to such transaction beneficially own, directly orindirectly, in substantially the same proportion as they owned the Voting Stock of the Company,all of the Voting Stock or other ownership interests of the entity or entities, if any, that succeed tothe business of the Company or the Company’s ultimate parent company if the Company is asubsidiary of another corporation); or

(e) the consummation of any merger, reorganization, consolidation or similar transaction unless,immediately after consummation of such transaction, the shareholders of the Companyimmediately prior to the transaction hold, directly or indirectly, more than 50% of the Voting Stockof the Company or the Company’s ultimate parent company if the Company is a subsidiary ofanother corporation.

The Committee shall have full and final authority, which shall be exercised in its discretion, to determineconclusively whether a Change in Control of the Company has occurred pursuant to the above definition,and the date of the occurrence of such Change in Control and any incidental matters relating thereto.

2.6 ‘‘Code’’ means the U.S. Internal Revenue Code of 1986, as amended. All references herein tospecific sections of the Code shall include any successor provisions of the Code or correspondingsections of any future U.S. federal tax code.

2.7 ‘‘Committee’’ means the committee of the Board appointed or described in Article 13 to administer thePlan.

2.8 ‘‘Common Stock’’ means the common stock of the Company, par value $0.01 per share, and suchother securities of the Company that may be substituted for the Common Stock pursuant to Article 12.

2.9 ‘‘Company’’ means Ciber, Inc., a Delaware corporation.

2.10 ‘‘Consultant’’ means any consultant or advisor if: (a) the consultant or advisor renders bona-fideservices to the Company or any Affiliate; (b) the services rendered by the consultant or advisor are not inconnection with the offer or sale of securities in a capital-raising transaction and do not directly orindirectly promote or maintain a market for the Company’s securities; and (c) the consultant or advisor is anatural person.

2.11 ‘‘Covered Employee’’ means an Employee who is, or could be, a ‘‘covered employee’’ within themeaning of Section 162(m) of the Code.

2.12 ‘‘Director’’ means a member of the Board.

2.13 ‘‘Disability’’ means that the Participant would qualify to receive benefit payments under thelong-term disability plan or policy, as it may be amended from time to time, of the Company or the Affiliateto which the Participant provides Service regardless of whether the Participant is covered by such policy.If the Company or the Affiliate to which the Participant provides Service does not have a long-termdisability policy, ‘‘Disability’’ means that a Participant is unable to carry out the responsibilities and

A-2 2015 Proxy Statement

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functions of the position held by the Participant by reason of any medically determined physical or mentalimpairment for a period of not less than ninety (90) consecutive days. A Participant shall not beconsidered to have incurred a Disability unless he or she furnishes proof of such impairment sufficient tosatisfy the Committee in its discretion. Notwithstanding the foregoing, for purposes of Incentive StockOptions granted under the Plan, ‘‘Disability’’ means that the Participant is disabled within the meaning ofSection 22(e)(3) of the Code.

2.14 ‘‘Dividend Equivalent Right’’ means a right to receive the equivalent value of dividends paid on theShares with respect to Shares underlying Restricted Stock Units prior to vesting of the Award. SuchDividend Equivalent Rights shall be converted to cash or additional Shares, or a combination of cash andShares, by such formula and at such time and subject to such limitations as may be determined by theCommittee.

2.15 ‘‘Effective Date’’ means March 27, 2015, the date that the Board adopted the amendment andrestatement of the Plan.

2.16 ‘‘Eligible Individual’’ means any natural person who is an Employee, a Consultant or a Director, asdetermined by the Committee.

2.17 ‘‘Employee’’ means a full-time or part-time employee of the Company or any Affiliate, including anofficer or Director, who is treated as an employee in the personnel records of the Company or Affiliate forthe relevant period, but shall exclude individuals who are classified by the Company or Affiliate as(a) leased from or otherwise employed by a third party, (b) independent contractors or (c) intermittent ortemporary, even if any such classification is changed retroactively as a result of an audit, litigation,administrative determination or otherwise. Neither services as a Director nor payment of a director’s feeby the Company or an Affiliate shall be sufficient to constitute ‘‘employment’’ by the Company or anAffiliate.

2.18 ‘‘Equity Restructuring’’ shall mean a nonreciprocal transaction between the Company and itsstockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through alarge, nonrecurring cash dividend, that affects the Shares (or other securities of the Company) or theprice of Shares (or other securities) and causes a change in the per-share value of the Shares underlyingoutstanding Awards.

2.19 ‘‘Exchange Act’’ means the U.S. Securities Exchange Act of 1934, as amended.

2.20 ‘‘Fair Market Value’’ means, as of any given date, (a) if Shares are traded on any established stockexchange, the closing price of a Share as quoted on the principal exchange on which the Shares arelisted, as reported in The Wall Street Journal (or such other source as the Company may deem reliable forsuch purposes) for such date, or if no sale occurred on such date, the first trading date immediately priorto such date during which a sale occurred; or (b) if Shares are not traded on an exchange but are regularlyquoted on a national market or other quotation system, the closing sales price on such date as quoted onsuch market or system, or if no sales occurred on such date, then on the date immediately prior to suchdate on which sales prices are reported; or (c) in the absence of an established market for the Shares ofthe type described in (a) or (b) of this Section 2.20, the fair market value established by the Committeeacting in good faith to be reasonable and in compliance with Section 409A of the Code.

2.21 ‘‘Full Value Award’’ means any Award other than an (i) Option, (ii) Stock Appreciation Right or(iii) other Award for which the Participant pays (or the value or amount payable under the Award isreduced by) an amount equal to or exceeding the Fair Market Value of the Shares, determined as of thedate of grant.


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2.22 ‘‘Incentive Stock Option’’ means an Option that is intended to meet the requirements of Section 422of the Code.

2.23 ‘‘Non-Employee Director’’ means a Director of the Company who is not an Employee.

2.24 ‘‘Non-Qualified Stock Option’’ means an Option that is not intended to be an Incentive Stock Option.

2.25 ‘‘Option’’ means a right granted to a Participant pursuant to Article 5 to purchase a specified numberof Shares at a specified price during specified time periods. An Option may be either an Incentive StockOption or a Non-Qualified Stock Option.

2.26 ‘‘Other Share-Based Award’’ shall mean an Award granted pursuant to Article 9.

2.27 ‘‘Participant’’ means any Eligible Individual who, as a Director, Consultant or Employee, has beengranted an Award pursuant to the Plan.

2.28 ‘‘Performance-Based Award’’ means an Award granted pursuant to Article 10.

2.29 ‘‘Performance Bonus Award’’ means an Award granted pursuant to Section 10.4.

2.30 ‘‘Performance Criteria’’ means the criteria that the Committee selects for purposes of establishingthe Performance Goal or Performance Goals for a Participant for a Performance Period. ThePerformance Criteria that will be used to establish Performance Goals are limited to the following:earnings per Share, whether in total or from continuing operations, income, net income (either before orafter taxes, amortization, interest and/or depreciation), operating income (either before or afterrestructuring and amortization charges), sales or revenue, gross or net profit margin, return on operatingassets or net assets, return on stockholders’ equity, return on capital, return on sales, economic valueadded, stock price appreciation, total stockholder return (measured in terms of stock price appreciationand dividend growth), or earnings or net earnings (either before or after interest, taxes, depreciation andamortization or either before or after interest, taxes and amortization), operating earnings, cash flow(including, without limitation, operating cash flow and free cash flow), cash flow return on capital,productivity, expense, operating efficiency, customer satisfaction, working capital, price per Share,market share, new products, customer penetration, technology and risk management, any of which maybe measured either in absolute terms or as compared to any incremental increase or as compared toresults of a peer group or securities or stock market index. The Committee shall define objectively themanner of calculating the Performance Criteria it selects to use for such Performance Period for suchParticipant.

2.31 ‘‘Performance Goals’’ means, for a Performance Period, the goals established in writing by theCommittee for the Performance Period based upon the Performance Criteria. Depending on thePerformance Criteria used to establish such Performance Goals, the Performance Goals may beexpressed in terms of overall Company performance, the performance of an Affiliate, the performance ofa division or a business unit of the Company or an Affiliate, or the performance of an individual. TheCommittee, in its discretion, may, to the extent consistent with, and within the time prescribed by,Section 162(m) of the Code appropriately adjust or modify the calculation of Performance Goals for suchPerformance Period in order to prevent the dilution or enlargement of the rights of Participants (a) in theevent of any unusual or extraordinary corporate item, transaction, event, or development, or (b) inrecognition of any other unusual or nonrecurring events affecting the Company, or the financialstatements of the Company, or in response to, or in anticipation of, changes in applicable laws,regulations, accounting principles, or business conditions.


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2.32 ‘‘Performance Period’’ means the one or more periods of time, which may be of varying andoverlapping durations, as the Committee may select, over which the attainment of one or morePerformance Goals will be measured for the purpose of determining a Participant’s right to, and thepayment of, a Performance-Based Award.

2.33 ‘‘Permitted Assignee’’ means any of the family members of a Participant listed in Section 11.3 towhom a Participant may assign or transfer an Award (other than an Incentive Stock Option) withoutconsideration.

2.34 ‘‘Plan’’ means this Amended and Restated 2004 Incentive Plan, as it may be amended from time totime.

2.35 ‘‘Qualified Performance-Based Compensation’’ means any compensation that is intended to qualifyas ‘‘qualified performance-based compensation’’ as described in Section 162(m)(4)(C) of the Code.

2.36 ‘‘Restricted Stock’’ means Shares awarded to a Participant pursuant to Article 6 that are subject tocertain restrictions and may be subject to risk of forfeiture.

2.37 ‘‘Restricted Stock Unit’’ means an Award granted pursuant to Article 8 that shall be evidenced by abookkeeping entry representing the equivalent of one Share.

2.38 ‘‘Securities Act’’ means the U.S. Securities Act of 1933, as amended.

2.39 ‘‘Service’’ means service as an Employee, Consultant or Non-Employee Director. Except asotherwise determined by the Committee in its sole discretion, a Participant’s Service terminates when theParticipant ceases to provide active services to the Company or an Affiliate and shall not be extended byany notice period mandated under applicable employment laws or the terms of the Participant’semployment or service contract, if any. The Company determines which leaves shall count towardService and when Service terminates for all purposes under the Plan. Further, unless otherwisedetermined by the Company, a Participant’s Service shall not be deemed to have terminated merelybecause of a change in the capacity in which the Participant provides Services to the Company or anAffiliate, or a transfer between entities (i.e., the Company or any Affiliates), provided that there is nointerruption or other termination of Service in connection with the Participant’s change in capacity ortransfer between entities. Notwithstanding the foregoing, Service does not terminate when an Employeegoes on a bona-fide leave of absence that was approved by the Company in writing. However, forpurposes of determining whether an Option is entitled to Incentive Stock Option status, an Employee’sService shall be treated as terminated 90 days after such Employee goes on leave, unless suchEmployee’s right to return to active work is guaranteed by law or by a contract.

2.40 ‘‘Share’’ means a share of Common Stock.

2.41 ‘‘Share Payment’’ means (a) a payment in the form of Shares, or (b) an option or other right topurchase or acquire Shares, as part of any bonus, deferred compensation or other arrangement grantedpursuant to Section 9.1(b) hereof.

2.42 ‘‘Stock Appreciation Right’’ or ‘‘SAR’’ means a right granted pursuant to Article 7 to receive apayment equal to the excess of the Fair Market Value of a specified number of Shares on the date theSAR is exercised over the exercise price of the SAR, as set forth in the applicable Award Agreement.

2.43 ‘‘Tax-Related Items’’ means any U.S. federal, state, and/or local taxes and any taxes imposed by ajurisdiction outside of the United States (including, without limitation, income tax, social insurance


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contributions, payment on account, employment tax obligations, stamp taxes and any other taxesrequired by law to be withheld and any employer tax liability for which the Participant is liable.

2.44 ‘‘Unrestricted Pool’’ means a number of Shares equal to 5% of the total number of Shares availablefor issuance under the Plan as of the date of the 2015 annual meeting of shareholders of the Company.

2.45 ‘‘Voting Stock’’ means securities or ownership interests of any class or classes having generalvoting power under ordinary circumstances, in the absence of contingencies, to elect the Directors.

ARTICLE 3. SHARES SUBJECT TO THE PLAN

3.1 Number of Shares. Subject to Article 12 hereof, the aggregate number of Shares which may beissued or transferred pursuant to Awards under the Plan shall be 20,350,000 Shares, of which 5,223,959are available for issuance pursuant to Awards granted on or following of the Effective Date. All of Sharesreserved for issuance hereunder may be issued pursuant to the exercise of Incentive Stock Options.

(a) Shares Reissuable Under Plan. To the extent that an Award terminates, expires, lapses forany reason, or if a Full Value Award is settled in cash, any Shares subject to such Award shallagain be available for the grant of an Award pursuant to the Plan. Notwithstanding the provisionsof this Section 3.1, no Shares may again be optioned, granted or awarded if such action wouldcause an Incentive Stock Option to fail to qualify as an Incentive Stock Option.

(b) Shares Not Reissuable under Plan. Notwithstanding the foregoing, the following Shares shallbe counted against the maximum number of Shares available for issuance pursuant toSection 3.1 hereof and shall not be returned to the Plan: (i) Shares covered by an Option or StockAppreciation Right which are surrendered in payment of the Award exercise or purchase price orin satisfaction of obligations for Tax-Related Items incident to the exercise of an Option or StockAppreciation Right; (ii) Shares that are not issued or delivered as a result of the net-settlement ofan outstanding Option or Stock Appreciation Right; or (iii) Shares that are repurchased on theopen market with the proceeds of the exercise of an Option.

(c) Shares Not Counted Against Share Pool Reserve. To the extent permitted by applicable lawor any stock exchange rule, Shares issued in assumption of, or in substitution for, anyoutstanding awards of any entity acquired in any form of combination by the Company or anAffiliate shall not be counted against Shares available for grant pursuant to this Plan. Additionally,to the extent permitted by applicable law or any stock exchange rule, in the event that a companyacquired by (or combined with) the Company or an Affiliate has shares available under apre-existing plan approved by its stockholders and not adopted in contemplation of suchacquisition or combination, the shares available for grant pursuant to the terms of suchpre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or otheradjustment or valuation ratio or formula used in such acquisition or combination to determine theconsideration payable to the stockholders of the entities party to such acquisition or combination)may, at the discretion of the Committee, be used for Awards under the Plan in lieu of awardsunder the applicable pre-existing plan of the other company and shall not reduce the Sharesauthorized for grant under the Plan; provided that Awards using such available shares shall notbe made after the date awards or grants could have been made under the terms of thepre-existing plan, absent the acquisition or combination, and shall only be made to individualswho were not employees or directors of the Company or any Affiliate in existence prior to suchacquisition or combination. The payment of Dividend Equivalent Rights in cash in conjunctionwith any outstanding Awards shall not be counted against the Shares available for issuanceunder the Plan.


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3.2 Shares Distributed. Any Shares distributed pursuant to an Award may consist, in whole or in part, ofauthorized and unissued Shares, treasury Shares or Shares purchased on the open market, subject toSection 3.1(b)(iii) hereof.

3.3 Limitation on Number of Shares Subject to and Amounts payable under Awards. Notwithstanding anyprovision in the Plan to the contrary, and subject to Article 12, where it is intended to comply withSection 162(m) of the Code, the maximum number of Shares with respect to one or more Awards thatmay be granted to any one Participant during any calendar year shall be 3,000,000 Shares and themaximum amount that may be paid in cash during any calendar year with respect to any Award (including,without limitation, any Performance Bonus Award) shall be $5,000,000. To the extent required bySection 162(m) of the Code or the U.S. Department of Treasury regulations promulgated thereunder, inapplying the foregoing limitations with respect to a Participant, if any Option or SAR is cancelled, thecancelled Option or SAR shall continue to count against the maximum number of Shares with respect towhich Options and SARs may be granted to the Participant. For this purpose, the repricing of an Option(or in the case of a SAR, the reduction of the base amount on which the stock appreciation is calculated inorder to reflect a reduction in the Fair Market Value of the Common Stock) shall be treated as thecancellation of the existing Option or SAR and the grant of a new Option or SAR.

ARTICLE 4. ELIGIBILITY AND PARTICIPATION

4.1 Eligibility. Each Eligible Individual shall be eligible to be granted one or more Awards pursuant to thePlan. An Eligible Individual who is subject to taxation in the U.S. and who is providing Service to anAffiliate may be granted Options or SARs under this Plan only if the Affiliate qualifies as an ‘‘eligible issuerof service recipient stock’’ within the meaning of the U.S. Department of Treasury regulationspromulgated under Section 409A of the Code.

4.2 Participation. Subject to the provisions of the Plan, the Committee, from time to time, may select fromamong all Eligible Individuals, those to whom Awards shall be granted and shall determine the nature andamount of each Award. No Eligible Individual shall have any right to be granted an Award pursuant to thisPlan and the grant of an Award to an Eligible Individual shall not imply any entitlement to receive futureAwards.

ARTICLE 5. STOCK OPTIONS

5.1 General. The Committee is authorized to grant Options to Eligible Individuals on the following termsand conditions and such additional terms and conditions as may be specified by the Committee:

(a) Exercise Price. The exercise price per Share subject to an Option shall be determined by theCommittee and set forth in the Award Agreement; provided that, subject to Section 5.2(c) hereof,the per-Share exercise price for any Option shall not be less than 100% of the Fair Market Valueof a Share on the date of grant.

(b) Time and Conditions of Exercise. The Committee shall determine the time or times at whichan Option may be exercised in whole or in part; provided that the term of any Option grantedunder the Plan shall not exceed ten (10) years. The Committee also shall determine theperformance or other conditions, if any, that must be satisfied before all or part of an Option maybe exercised.

(c) Death. Subject to the term of the Option set forth in the Award Agreement, upon the death ofa Participant, the Option may be exercised following the Participant’s death to the extent andwithin such period as may be specified in the Award Agreement, by such persons as may be


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permitted thereunder, which may include any of the following: (i) the Participant’s designatedbeneficiary, provided that such designation is permitted under applicable laws and that suchbeneficiary has been designated before the Participant’s death in a form acceptable to theCompany; (ii) the Participant’s legal representative or representatives; (iii) the person or personsentitled to do so pursuant to the Participant’s last will and testament; or (iv) if the Participant failsto make testamentary disposition of the Option or dies intestate, by the person or persons entitledto receive the Option pursuant to the applicable laws of descent and distribution.

(d) Payment. The Committee shall determine the methods by which the exercise price of anOption may be paid, including the following methods: (i) cash or check; (ii) surrender of Shares ordelivery of a properly executed form of attestation of ownership of Shares as the Committee mayrequire (including withholding of Shares otherwise deliverable upon exercise of the Award) whichhave a Fair Market Value on the date or surrender of attestation equal to the aggregate exerciseprice of the Shares as to which the Award is to be exercised; (iii) promissory note from aParticipant to the Company or a third-party loan guarantied by the Company (in either case, withsuch loan bearing interest at no less than such rate as shall then preclude the imputation ofinterest under the Code); (iv) through the delivery of a notice that the Participant has placed amarket sell order with a broker with respect to Shares then issuable upon exercise of the Option,and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale tothe Company in satisfaction of the Option exercise price, provided that payment of such proceedsis then made to the Company upon settlement of such sale; (v) other property acceptable to theCommittee; or (vi) any combination of the foregoing methods of payment. The Award Agreementwill specify the methods of paying the exercise price available to Participants. The Committeealso shall determine the methods by which Shares shall be delivered or deemed to be deliveredto Participants. Notwithstanding any other provision of the Plan to the contrary, no Participantwho is a Director or an ‘‘executive officer’’ of the Company within the meaning of Section 13(k) ofthe Exchange Act shall be permitted to pay the exercise price of an Option, or continue anyextension of credit with respect to the exercise price of an Option with a loan from the Companyor a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

5.2 Incentive Stock Options. Incentive Stock Options shall be granted only to Employees of the Companyor any ‘‘subsidiary corporation,’’ as defined in Section 424(f) of the Code and any applicable U.S.Department of Treasury regulations promulgated thereunder, of the Company, and the terms of anyIncentive Stock Options granted pursuant to the Plan, in addition to the requirements of Section 5.1hereof, must comply with the provisions of this Section 5.2.

(a) Expiration. Subject to Section 5.2(c) hereof, an Incentive Stock Option shall expire and maynot be exercised to any extent by anyone after the first to occur of the following events:

(i) Ten (10) years from the date of grant, unless an earlier time is set in the AwardAgreement;

(ii) Three (3) months after the Participant’s termination of Service; and

(iii) One (1) year after the date of the Participant’s termination of Service on account ofdeath or Disability (within the meaning of Section 22(e)(3) of the Code).

(b) Dollar Limitation. The aggregate Fair Market Value (determined as of the time the Option isgranted) of all Shares with respect to which Incentive Stock Options are first exercisable by aParticipant in any calendar year may not exceed $100,000 or such other limitation as imposed bySection 422(d) of the Code, or any successor provision. To the extent that Incentive Stock


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Options are first exercisable by a Participant in excess of such limitation, the excess shall beconsidered Non-Qualified Stock Options.

(c) Ten Percent Owners. An Incentive Stock Option shall be granted to any individual who, at thedate of grant, owns stock possessing more than ten percent (10%) of the total combined votingpower of all classes of Shares of the Company only if such Option is granted at a price that is notless than 110% of Fair Market Value on the date of grant and the Option is exercisable for nomore than five (5) years from the date of grant.

(d) Notice of Disposition. The Participant shall give the Company prompt notice of anydisposition of Shares acquired by exercise of an Incentive Stock Option within (i) two (2) yearsfrom the date of grant of such Incentive Stock Option or (ii) one (1) year after the transfer of suchShares to the Participant.

(e) Right to Exercise. During a Participant’s lifetime, an Incentive Stock Option may be exercisedonly by the Participant.

(f) Failure to Meet Requirements. Any Option (or portion thereof) purported to be an IncentiveStock Option, which, for any reason, fails to meet the requirements of Section 422 of the Codeshall be considered a Non-Qualified Stock Option.

ARTICLE 6. RESTRICTED STOCK AWARDS

6.1 Grant of Restricted Stock. The Committee is authorized to make Awards of Restricted Stock toEligible Individuals selected by the Committee in such amounts and subject to such terms and conditionsnot inconsistent with the Plan as the Committee shall impose.

6.2 Purchase Price. At the time of the grant of an Award of Restricted Stock, the Committee shalldetermine the price, if any, to be paid by the Participant for each Share subject to the Award of RestrictedStock. To the extent required by applicable law, the price to be paid by the Participant for each Sharesubject to the Award of Restricted Stock shall not be less than the par value of a Share (or such higheramount required by applicable law). The purchase price of Shares acquired pursuant to the Award ofRestricted Stock shall be paid either: (i) in cash at the time of purchase; (ii) at the sole discretion of theCommittee, by Service rendered or to be rendered to the Company or an Affiliate; or (iii) in any other formof legal consideration that may be acceptable to the Committee in its sole discretion and in compliancewith applicable law.

6.3 Issuance and Restrictions. Restricted Stock shall be subject to such restrictions on transferability andother restrictions as the Committee may impose (including, without limitation, limitations on the right tovote Restricted Stock or the right to receive dividends on the Restricted Stock). These restrictions, if any,may lapse separately or in combination at such times, pursuant to such circumstances, in suchinstallments, or otherwise, as the Committee determines at the time of the grant of the Award orthereafter.

6.4 Dividends. Any dividends that are distributed with respect to Shares of Restricted Stock shall be paidin accordance with the applicable Award Agreement which may, without limitation, provide that paymentof dividends will be (i) made currently, (ii) withheld by the Company and paid when the Restricted Stockvests, (iii) reinvested in additional Shares of Restricted Stock or (iv) a combination thereof, as determinedby the Committee in its sole discretion; provided that, for Shares of Restricted Stock that are subject tovesting upon the attainment of performance goals shall be accumulated and subject to any restrictionsand risk of forfeiture to which the underlying Restricted Stock is subject.


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6.5 Forfeiture. Except as otherwise determined by the Committee at the time of the grant of the Award orthereafter, upon termination of Service during the applicable restriction period, Restricted Stock that is atthat time subject to restrictions shall be forfeited; provided, however, that the Committee may (a) providein any Restricted Stock Award Agreement that restrictions or forfeiture conditions relating to RestrictedStock will be waived in whole or in part in the event of terminations resulting from specified causes, and(b) in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.

6.6 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan may be evidenced insuch manner as the Committee shall determine. If certificates representing shares of Restricted Stock areregistered in the name of the Participant, certificates shall bear an appropriate legend referring to theterms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, at itsdiscretion, retain physical possession of the certificate until such time as all applicable restrictions lapse.

ARTICLE 7. STOCK APPRECIATION RIGHTS

7.1 Grant of Stock Appreciation Rights. The Committee is authorized to grant SARs to Eligible Individualson the following terms and conditions and such additional terms and conditions as may be specified bythe Committee:

(a) Exercise Price. The exercise price per Share subject to a SAR shall be determined by theCommittee and set forth in the Award Agreement; provided that the exercise price per Share forany SAR shall not be less than 100% of the Fair Market Value of a Share on the date of grant.

(b) Time and Conditions of Exercise. The Committee shall determine the time or times at which aSAR may be exercised in whole or in part; provided that the term of any SAR granted under thePlan shall not exceed ten years. The Committee shall also determine the performance or otherconditions, if any, that must be satisfied before all or part of a SAR may be exercised.

7.2 Payment and Limitations on Exercise.

(a) A Stock Appreciation Right shall entitle the Participant (or other person entitled to exercisethe SAR pursuant to the Plan) to exercise all or a specified portion of the SAR (to the extent thenexercisable pursuant to its terms) and to receive from the Company an amount equal to theexcess of the aggregate Fair Market Value of the Shares on the date the SAR is exercised overthe aggregate exercise price of the SAR, less applicable Tax-Related Items (as further set forth inSection 16.3 hereof), subject to any limitations the Committee may impose.

(b) Payment of the amounts determined under Section 7.2(a) hereof shall be in cash, in Shares(based on the Fair Market Value of the Shares as of the date the Stock Appreciation Right isexercised) or a combination of both, as determined by the Committee in the Award Agreement.

ARTICLE 8. RESTRICTED STOCK UNITS

8.1 Restricted Stock Units. The Committee is authorized to grant Restricted Stock Units to EligibleIndividuals in such amounts and subject to such terms and conditions not inconsistent with the Plan as theCommittee shall impose.

8.2 Vesting Conditions. The Committee shall specify the date or dates on which the Restricted StockUnits shall become fully vested and nonforfeitable, and may specify such conditions to vesting, if any, as itdeems appropriate. The vesting conditions, if any, may be based on the passage of time or the attainmentof performance-based conditions.


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8.3 Form and Timing of Payment. The Committee shall specify the settlement date applicable to eachgrant of Restricted Stock Units, which date shall not be earlier than the date or dates on which theRestricted Stock Units shall become fully vested and nonforfeitable, or such settlement date may bedeferred to any later date, subject to compliance with Section 409A of the Code, as applicable. On thesettlement date, the Company shall, subject to Section 11.4(a) hereof and satisfaction of applicableTax-Related Items (as further set forth in Section 16.3 hereof), transfer to the Participant one Share foreach Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited.Alternatively, settlement of a Restricted Stock Unit may be made in cash (in an amount reflecting the FairMarket Value of the Shares that otherwise would have been issued) or any combination of cash andShares, as determined by the Committee, in its sole discretion, in either case, less applicableTax-Related Items (as further set forth in Section 16.3 hereof). Until a Restricted Stock Unit is settled, thenumber of Restricted Stock Units shall be subject to adjustment pursuant to Article 12 hereof.

8.4 General Creditors. A Participant who has been granted Restricted Stock Units shall have no rightsother than those of a general creditor of the Company. Restricted Stock Units represent an unfunded andunsecured obligation of the Company, subject to the terms and conditions of the applicable AwardAgreement evidencing the grant of the Restricted Stock Units.

ARTICLE 9. OTHER SHARE-BASED AWARDS

9.1 Grants of Other Share-Based Awards. The Committee is authorized under the Plan to make Awards(other than Options, Restricted Stock, SARs and Restricted Stock Units) to Eligible Individuals subject tothe terms and conditions set forth in this Article 9 and such other terms and conditions as may be specifiedby the Committee that are not inconsistent with the provisions of the Plan and that, by their terms, involveor might involve the issuance of, consist of, or are denominated in, payable in, valued in whole or in partby reference to, or otherwise relate to, Shares. These Awards may include, among other forms, DividendEquivalent Rights and Share Payments. The Committee may establish one or more separate programsunder the Plan for the purpose of issuing particular forms of Awards to one or more classes of Participantson such terms and conditions as determined by the Committee from time to time.

(a) Dividend Equivalent Rights. Any Participant selected by the Committee may be grantedDividend Equivalent Rights based on the dividends declared on the Shares that are subject toany Full Value Award, to be credited as of dividend payment dates, during the period between thedate the Award is granted and the date the Award is vests or is settled, as determined by theCommittee and set forth in the applicable Award Agreement. Such Dividend Equivalent Rightsshall be converted to cash or additional Shares by such formula and at such time and subject tosuch limitations as may be determined by the Committee; provided that, to the extent Sharessubject to an Award are subject to performance-based vesting conditions, any DividendEquivalent Rights relating to such Shares shall either (i) not be paid or credited or (ii) beaccumulated and subject to restrictions and risk of forfeiture to the same extent as the underlyingAward with respect to which such cash, stock or other property has been distributed.

(b) Share Payments. Any Eligible Individual selected by the Committee may receive SharePayments in the manner determined from time to time by the Committee. The number of Sharesshall be determined by the Committee and may be based upon Performance Criteria or otherspecific performance criteria determined to be appropriate by the Committee, determined on thedate such Share Payment is made or on any date thereafter. Any Award of Share Payments shallbe made in compliance with Section 409A of the Code, if applicable.


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(c) Exercise Price. The Committee may establish the exercise price, if any, of any Other Share-Based Award granted pursuant to this Article 9; provided that such exercise price shall not be lessthan the par value of a Share on the date of grant, unless otherwise permitted by applicable law.

(d) Form of Payment. Payments with respect to any Awards granted under this Section 9.1 shallbe made in cash or cash equivalent, in Shares or any combination of the foregoing, asdetermined by the Committee.

9.2 Vesting Conditions. The Committee shall specify the date or dates on which the Awards grantedpursuant to this Article 9 shall become fully vested and nonforfeitable, and may specify such conditions tovesting as it deems appropriate. The vesting conditions may be based on the passage of time or theattainment of performance-based conditions.

9.3 Term. Except as otherwise provided herein, the term of any Award granted pursuant to this Article 9shall be set by the Committee in its discretion.

ARTICLE 10. PERFORMANCE-BASED AWARDS FOR COVERED EMPLOYEES

10.1 Purpose. The purpose of this Article 10 is to provide the Committee the ability to qualify Awardsother than Options and SARs and that are granted pursuant to Articles 6, 8 or 9 as Qualified Performance-Based Compensation. If the Committee, in its discretion, decides to grant a Performance-Based Award toa Covered Employee, the provisions of this Article 10 shall control over any contrary provision containedin Articles 6, 8 or 9; provided that the Committee may in its discretion grant Awards to CoveredEmployees that are based on Performance Criteria or Performance Goals but that do not satisfy therequirements of this Article 10.

10.2 Applicability. This Article 10 shall apply only to those Covered Employees selected by theCommittee to receive Performance-Based Awards that are intended to qualify as Qualified Performance-Based Compensation. The designation of a Covered Employee as a Participant for a Performance Periodshall not entitle the Participant, in any manner, to receive an Award for the period. Moreover, thedesignation of a Covered Employee as a Participant for a particular Performance Period shall not requiredesignation of such Covered Employee as a Participant in any subsequent Performance Period anddesignation of one Covered Employee as a Participant shall not require designation of any other CoveredEmployees as a Participant in such period or in any other Performance Period.

10.3 Procedures with Respect to Performance-Based Awards. To the extent necessary to comply withthe Qualified Performance-Based Compensation requirements of Section 162(m)(4)(C) of the Code, withrespect to any Award granted under Articles 6, 8 or 9 which may be granted to one or more CoveredEmployees, no later than ninety (90) days following the commencement of any fiscal year in question orany other designated fiscal period or period of Service (or such other time as may be required or permittedby Section 162(m) of the Code), the Committee, in writing (a) shall designate one or more CoveredEmployees as eligible for an Award, (b) shall designate the Performance Period over which thePerformance Goals shall be measured; (c) shall select the Performance Criteria applicable to thePerformance Period, (d) shall establish the Performance Goals, and amounts of such Awards, asapplicable, which may be earned for such Performance Period, and (e) shall specify the relationshipbetween Performance Criteria and the Performance Goals and the amounts of such Awards, asapplicable, to be earned by each Covered Employee for such Performance Period. Following thecompletion of each Performance Period, the Committee shall certify in writing whether the applicablePerformance Goals have been achieved for such Performance Period. In determining the amount earnedby a Covered Employee, the Committee shall have the right to reduce or eliminate (but not to increase)the amount payable at a given level of performance to take into account additional factors that the


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Committee may deem relevant to the assessment of individual or corporate performance for thePerformance Period.

10.4 Performance Bonus Awards. The Committee is authorized under the Plan to grant PerformanceBonus Awards, which are Performance-Based Awards payable in the form of cash, that shall vest uponthe attainment of Performance Goals that are established by the Committee and relate to one or more ofthe Performance Criteria, in each case on a specified date or dates or over any period or periodsdetermined by the Committee.

10.5 Payment of Performance-Based Awards. Unless otherwise provided in the applicable AwardAgreement, a Participant must provide Services to the Company or an Affiliate on the day a Performance-Based Award for the appropriate Performance Period is paid to the Participant. Furthermore, a Participantshall be eligible to receive payment pursuant to a Performance-Based Award for a Performance Periodonly if the Performance Goals for such period are achieved.

10.6 Additional Limitations. Notwithstanding any other provision of the Plan, any Award which is grantedto a Covered Employee shall be subject to any additional limitations set forth in Section 162(m) of theCode (including any amendment to Section 162(m) of the Code) or any U.S. Department of Treasuryregulations or rulings issued thereunder that are requirements for qualification as qualified performance-based compensation as described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemedamended to the extent necessary to conform to such requirements.

ARTICLE 11. PROVISIONS APPLICABLE TO AWARDS

11.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the discretion of theCommittee, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant tothe Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the sametime as or at a different time from the grant of such other Awards.

11.2 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements that set forththe terms, conditions and limitations for each Award, not inconsistent with the Plan, which may include,without limitation, the term of an Award, the provisions applicable in the event the Participant’s Serviceterminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel orrescind an Award.

11.3 Minimum Vesting Requirements. Notwithstanding any other provision of the Plan, no Awards fullyvest before the first anniversary of the date of grant, subject to earlier vesting in whole or in part ascontemplated in Section 12.2 hereof or in connection with the death, disability or other termination of theParticipant’s employment; provided that the minimum vesting period set forth in this sentence shall notapply to Awards relating to Shares in the Unrestricted Pool, which shall be subject to vesting over suchperiod as the Committee shall specify.

11.4 Limits on Transfer. No right or interest of a Participant in any Award may be pledged, encumbered,or hypothecated to or in favor of any party other than the Company or an Affiliate, or shall be subject toany lien, obligation, or liability of such Participant to any other party other than the Company or an Affiliate.Except as otherwise provided by the Committee, no Award shall be assigned, transferred, or otherwisedisposed of by a Participant other than by will or the laws of descent and distribution. To the extent andunder such terms and conditions as determined by the Committee and provided such transfer isconsistent with securities offerings registered on a Form S-8, a Participant may assign or transfer anAward (other than an Incentive Stock Option) without consideration to any of the following PermittedAssignees: (i) to the Participant’s spouse, children or grandchildren (including any adopted and step


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children or grandchildren), parents, grandparents or siblings, (ii) to a trust for the benefit of one or more ofthe Participant or the persons referred to in clause (i), (iii) to a partnership, limited liability company orcorporation in which the Participant or the persons referred to in clause (i) are the only partners, membersor shareholders or (iv) for charitable donations; provided that such Permitted Assignee shall be bound byand subject to all of the terms and conditions of the Plan and the Award Agreement relating to thetransferred Award and shall execute an agreement satisfactory to the Company evidencing suchobligations; and provided further that such Participant shall remain bound by the terms and conditions ofthe Plan.

11.5 Stock Certificates; Book Entry Procedures.

(a) Notwithstanding anything herein to the contrary, the Company shall not be required to issueor deliver any certificates evidencing Shares pursuant to the exercise or vesting, as applicable, ofany Award, unless and until the Board has determined, with advice of counsel, that the issuanceand delivery of such certificates is in compliance with all applicable laws, regulations ofgovernmental authorities and, if applicable, the requirements of any exchange on which theShares are listed or traded. All certificates evidencing Shares delivered pursuant to the Plan aresubject to any stop-transfer orders and other restrictions as the Committee deems necessary oradvisable to comply with federal, state, or local securities or other laws, including laws ofjurisdictions outside of the United States, rules and regulations and the rules of any nationalsecurities exchange or automated quotation system on which the Shares are listed, quoted, ortraded. The Committee may place legends on any certificate evidencing Shares to referencerestrictions applicable to the Shares. In addition to the terms and conditions provided herein, theBoard may require that a Participant make such reasonable covenants, agreements, andrepresentations as the Board, in its discretion, deems advisable in order to comply with any suchlaws, regulations, or requirements. The Committee shall have the right to require any Participantto comply with any timing or other restrictions with respect to the settlement or exercise of anyAward, including, without limitation, a window-period limitation, as may be imposed in thediscretion of the Committee.

(b) Notwithstanding any other provision of the Plan, unless otherwise determined by theCommittee or required by any applicable law, rule or regulation, the Company shall not deliver toany Participant certificates evidencing Shares issued in connection with any Award and insteadsuch Shares shall be recorded in the books of the Company (or, as applicable, its transfer agentor stock plan administrator).

11.6 Paperless Administration. In the event that the Company establishes, for itself or using the servicesof a third party, an automated system for the documentation, granting or exercise of Awards, such as asystem using an internet website, intranet or interactive voice response, then the paperlessdocumentation, granting or exercise of Awards by a Participant may be permitted through the use of suchan automated system.

ARTICLE 12. CHANGES IN CAPITAL STRUCTURE

12.1 Adjustments.

(a) In the event of any stock dividend, stock split, combination or exchange of shares, merger,consolidation or other distribution (other than normal cash dividends) of Company assets tostockholders, or any other change affecting the Shares or the price of the Shares other than anEquity Restructuring, the Committee shall make such adjustments, if any, as the Committee in itsdiscretion may deem appropriate to reflect such change with respect to (a) the aggregate number


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and kind of shares that may be issued under the Plan (including, without limitation, adjustmentsof the limitations in Sections 3.1 and 3.3 hereof); (b) the terms and conditions of any outstandingAwards (including, without limitation, any applicable performance goals or criteria with respectthereto); and (c) the grant or exercise price per Share for any outstanding Awards under the Plan.Any adjustment affecting an Award intended as Qualified Performance-Based Compensationshall be made consistent with the requirements of Section 162(m) of the Code.

(b) In the event of any transaction or event described in Section 12.1(a) hereof or any unusual ornonrecurring transactions or events affecting the Company, any affiliate of the Company, or thefinancial statements of the Company or any affiliate, or of changes in applicable laws, regulationsor accounting principles, the Committee, in its sole and absolute discretion, and on such termsand conditions as it deems appropriate, either by the terms of the Award or by action taken priorto the occurrence of such transaction or event and either automatically or upon the Participant’srequest, is hereby authorized to take any one or more of the following actions whenever theCommittee determines that such action is appropriate in order to prevent dilution or enlargementof the benefits or potential benefits intended to be made available under the Plan or with respectto any Award under the Plan, to facilitate such transactions or events or to give effect to suchchanges in laws, regulations or principles:

(i) To provide for either (A) termination of any such Award in exchange for an amount ofcash, if any, equal to the amount that would have been attained upon the exercise ofsuch Award or realization of the Participant’s rights (and, for the avoidance of doubt, if asof the date of the occurrence of the transaction or event described in this Section 12.1 theCommittee determines in good faith that no amount would have been attained upon theexercise of such Award or realization of the Participant’s rights, then such Award may beterminated by the Company without payment) or (B) the replacement of such Award withother rights or property selected by the Committee in its sole discretion;

(ii) To provide that such Award be assumed by the successor or survivor corporation, ora parent or subsidiary thereof, or shall be substituted for by similar options, rights orawards covering the stock of the successor or survivor corporation, or a parent orsubsidiary thereof, with appropriate adjustments as to the number and kind of shares andprices;

(iii) To make adjustments in the number and type of Shares (or other securities orproperty) subject to outstanding Awards, and/or in the terms and conditions of (includingthe grant or exercise price), and the criteria included in, outstanding options, rights andawards;

(iv) To provide that such Award shall be exercisable or payable or fully vested withrespect to all Shares covered thereby, notwithstanding anything to the contrary in thePlan or the applicable Award Agreement; and

(v) To provide that the Award cannot vest, be exercised or become payable after suchevent.

(c) In connection with the occurrence of any Equity Restructuring, and notwithstanding anythingto the contrary in Sections 12.1(a) and 12.1(b) hereof:

(i) The number and type of securities subject to each outstanding Award and theexercise price or grant price thereof, if applicable, shall be equitably adjusted. The


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adjustments provided under this Section 12.1(c)(i) shall be nondiscretionary and shall befinal and binding on the affected Participant and the Company.

(ii) The Committee shall make such equitable adjustments, if any, as the Committee inits discretion may deem appropriate to reflect such Equity Restructuring with respect tothe aggregate number and kind of shares that may be issued under the Plan (including,without limitation, adjustments of the limitations in Sections 3.1 and 3.3 hereof).

12.2 Change in Control.

(a) Notwithstanding Section 12.1 hereof, and except as may otherwise be provided in anyapplicable Award Agreement or other written agreement entered into between the Company anda Participant, if a Change in Control occurs and a Participant’s Awards are not converted,assumed, substituted or replaced by a successor or survivor corporation, or a parent orsubsidiary thereof, then immediately prior to the Change in Control such Awards shall becomefully exercisable and all forfeiture restrictions on such Awards shall lapse and, following theconsummation of such Change in Control, all such Awards shall terminate and cease to beoutstanding. In the event that the terms of any agreement (other than the Award Agreement)between the Company or any Affiliate and a Participant contains provisions that conflict with andare more restrictive than the provisions of this Section 12.2(a), this Section 12.2(a) shall prevailand control and the more restrictive terms of such agreement (and only such terms) shall be of noforce or effect.

(b) The Committee may at any time provide that one or more Awards will automaticallyaccelerate in connection with a Change in Control, whether or not those Awards are assumed orotherwise continue in full force and effect. In addition, where Awards are assumed or continuedafter a Change in Control, the Committee may provide that one or more Awards will automaticallyaccelerate upon an involuntary termination of the Participant’s employment or service within adesignated period following the effective date of such Change in Control. Any such Award shallaccordingly, immediately prior to the effective date of such Change in Control or upon aninvoluntary termination of the Participant’s employment or service following a Change in Control,become fully exercisable and all forfeiture restrictions on such Award shall lapse.

(c) Upon a Change in Control, the Committee may cause any and all Awards outstandinghereunder to terminate at a specific time in the future, including, without limitation, the date ofsuch Change in Control, and shall give each Participant the right to exercise such Awards duringa period of time as the Committee, in its sole and absolute discretion, shall determine.

(d) The portion of any Incentive Stock Option accelerated in connection with a Change in Controlshall remain exercisable as an Incentive Stock Option only to the extent the applicable $100,000limitation is not exceeded. To the extent such U.S. dollar limitation is exceeded, the acceleratedportion of such Option shall be exercisable as a Non-Statutory Option under the U.S. federal taxlaws.

12.3 No Other Rights. Except as expressly provided in the Plan, no Participant shall have any rights byreason of any subdivision or consolidation of Shares of any class, the payment of any dividend, anyincrease or decrease in the number of Shares of any class or any dissolution, liquidation, merger, orconsolidation of the Company or any other corporation. Except as expressly provided in the Plan orpursuant to action of the Committee under the Plan, no issuance by the Company of Shares of any class,or securities convertible into Shares of any class, shall affect, and no adjustment by reason thereof shall


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be made with respect to, the number of Shares subject to an Award or the grant or the exercise price ofany Award.

ARTICLE 13. ADMINISTRATION

13.1 Committee. The Board, at its discretion or as otherwise necessary to comply with the requirementsof Section 162(m) of the Code, Rule 16b-3 promulgated under the Exchange Act or to the extent requiredby any other applicable law or regulation, may delegate administration of the Plan to a Committeeconsisting of two or more members of the Board. Unless otherwise determined by the Board, theCommittee shall consist solely of two or more Non-Employee Directors, each of whom is an ‘‘outsidedirector,’’ within the meaning of Section 162(m) of the Code, a ‘‘non-employee director’’ within themeaning of Rule 16b-3(b)(3) under the Exchange Act, or any successor rule, and an ‘‘independentdirector’’ under the applicable New York Stock Exchange rules (or other principal securities market onwhich Shares are traded). Notwithstanding the foregoing: (a) the full Board, acting by a majority of itsmembers in office, shall conduct the general administration of the Plan with respect to all Awards grantedto Non-Employee Directors and for purposes of such Awards the term ‘‘Committee’’ as used in this Planshall be deemed to refer to the Board and (b) the Committee may delegate its authority hereunder to theextent permitted by Section 13.5 hereof. Unless and until the Board delegates administration of the Planto a Committee as set forth below, the Plan shall be administered by the full Board, and for such purposesthe term ‘‘Committee’’ as used in this Plan shall be deemed to refer to the Board. In its sole discretion, theBoard may at any time and from time to time exercise any and all rights and duties of the Committee underthe Plan, except with respect to matters which under Rule 16b-3 under the Exchange Act orSection 162(m) of the Code, or any regulations or rules issued thereunder, are required to be determinedin the sole discretion of the Committee.

13.2 Action by the Committee. Unless otherwise established by the Board or in any charter of theCommittee, a majority of the Committee shall constitute a quorum and the acts of a majority of themembers present at any meeting at which a quorum is present, and acts approved in writing by a majorityof the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of theCommittee is entitled to, in good faith, rely or act upon any report or other information furnished to thatmember by any officer or other employee of the Company or any Affiliate, the Company’s independentcertified public accountants, or any executive compensation consultant or other professional retained bythe Company to assist in the administration of the Plan.

13.3 Authority of Committee. Subject to any specific designation in the Plan, the Committee has theexclusive power, authority and discretion to:

(a) Designate Participants to receive Awards;

(b) Determine the type or types of Awards to be granted to each Participant;

(c) Determine the number of Awards to be granted and the number of Shares to which an Awardwill relate;

(d) Determine the terms and conditions of any Award granted pursuant to the Plan, including,without limitation, the exercise price, grant price, or purchase price, any restrictions or limitationson the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisabilityof an Award, and accelerations or waivers thereof, any provisions related to non-competition andrecapture of gain on an Award, based in each case on such considerations as the Committee inits sole discretion determines; provided, however, that the Committee shall not have the authorityto accelerate the vesting or waive the forfeiture of any Performance-Based Awards intended to


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qualify as Qualified Performance Based-Compensation, except as permitted underSection 162(m) of the Code;

(e) Determine whether, to what extent, and pursuant to what circumstances an Award may besettled in, or the exercise price of an Award may be paid in, cash, Shares, other Awards, or otherproperty, or an Award may be cancelled, forfeited, or surrendered;

(f) Prescribe the form of each Award Agreement, which need not be identical for eachParticipant and may vary for Participants within and outside of the United States;

(g) Decide all other matters that must be determined in connection with an Award;

(h) Establish, adopt, or revise any rules and regulations including adopting sub-plans to the Planfor the purposes of complying with foreign laws and/or taking advantage of tax-favorabletreatment for Awards granted to Participants outside the United States, as it may deemnecessary or advisable to administer the Plan;

(i) To suspend or terminate the Plan at any time provided that such suspension or terminationdoes not impair rights and/or increase obligations of the affected Participant under anyoutstanding Award without written consent of such Participant;

(j) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement;and

(k) Make all other decisions and determinations that may be required pursuant to the Plan or asthe Committee deems necessary or advisable to administer the Plan.

13.4 Decisions Binding. The Committee’s interpretation of the Plan, any Awards granted pursuant to thePlan, any Award Agreement and all decisions and determinations by the Committee with respect to thePlan are final, binding, and conclusive on all parties.

13.5 Delegation of Authority. To the extent permitted by applicable law, the Board, from time to time, maydelegate to a Committee of one or more members of the Board or one or more officers of the Companythe authority to grant or amend Awards to Participants other than (a) Employees who are subject toSection 16 of the Exchange Act, (b) Covered Employees, or (c) officers of the Company (or Directors) towhom authority to grant or amend Awards has been delegated hereunder. Furthermore, if the authority togrant or amend Awards has been delegated to the Committee pursuant and subject to the precedingsentence, such authority may be further delegated by the Committee to one or more officers of theCompany. For the avoidance of doubt, provided it meets the limitations of this Section 13.5, anydelegation hereunder shall include the right to modify Awards as necessary to accommodate changes inapplicable laws or regulations, including in jurisdictions outside the United States. Furthermore, anydelegation hereunder shall be subject to the restrictions and limitations that the Board (or, as applicable,the Committee) specifies at the time of such delegation, and the Board (or, as applicable, the Committee)may rescind at any time the authority so delegated and/or appoint a new delegatee. At all times, thedelegatee appointed under this Section 13.5 shall serve in such capacity at the pleasure of the Board (or,as applicable, Committee).

ARTICLE 14. EFFECTIVE AND EXPIRATION DATE

14.1 Plan History. The Plan was originally approved by shareholders on April 27, 2004. The Plan wassubsequently amended on April 29, 2008, and was subsequently amended and restated on May 18, 2011


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and on May 8, 2013. The amendment and restatement of the Plan was last approved by the Board onMarch 27, 2015, and approved by stockholders of the Company on [ ● ], 2015.

14.2 Expiration Date. The Plan will continue in effect until it is terminated by the Board pursuant toSection 15.1 hereof, except that no Incentive Stock Options may be granted under the Plan after the tenth(10th) anniversary of March 27, 2015. Any Awards that are outstanding on the date the Plan terminatesshall remain in force according to the terms of the Plan and the applicable Award Agreement.

ARTICLE 15. AMENDMENT, MODIFICATION, AND TERMINATION

15.1 Amendment, Modification, and Termination. Subject to Section 16.14 hereof, with the approval ofthe Board, at any time and from time to time, the Committee may terminate, amend or modify the Plan;provided, however, that (a) to the extent necessary and desirable to comply with any applicable law,regulation, or stock exchange rule, the Company shall obtain stockholder approval of any Planamendment in such a manner and to such a degree as required, and (b) stockholder approval shall berequired for any amendment to the Plan that (i) increases the number of shares available under the Plan(other than any adjustment as provided by Article 12), or (ii) permits the Committee to extend the exerciseperiod for an Option beyond ten years from the date of grant. Notwithstanding any provision in this Plan tothe contrary, absent approval of the stockholders of the Company, no Option or SAR may be amended toreduce the per-Share exercise price of the Shares subject to such Option or SAR below the per-Shareexercise price as of the date the Option or SAR is granted and, except as permitted by Article 12, (a) noOption or SAR may be granted in exchange for, or in connection with, the cancellation, surrender orsubstitution of an Option or SAR having a higher per-Share exercise price and (b) no Option or SAR maybe cancelled in exchange for, or in connection with, the payment of a cash amount or another Award at atime when the Option or SAR has a per-Share exercise price that is higher than the Fair Market Value of aShare.

15.2 Awards Previously Granted. Except with respect to amendments made or other actions takenpursuant to Section 16.14 hereof or any amendment or other action with respect to an outstanding Awardthat may be required or desirable to facilitate compliance with applicable law, as determined in the solediscretion of the Committee, no termination, amendment, or modification of the Plan shall affectadversely, in any material way, any Award previously granted pursuant to the Plan without the priorwritten consent of the Participant; provided, however, that an amendment or modification that may causean Incentive Stock Option to become a Non-Qualified Stock Option shall not be treated as adverselyaffecting the rights of the Participant.

ARTICLE 16. GENERAL PROVISIONS

16.1 No Rights to Awards. No Eligible Individual or other person shall have any claim to be granted anyAward pursuant to the Plan, and neither the Company nor the Committee is obligated to treat EligibleIndividuals, Participants or any other persons uniformly.

16.2 No Stockholders Rights. Except as otherwise provided herein, a Participant shall have none of therights of a stockholder with respect to Shares covered by any Award, including the right to vote or receivedividends, until the Participant becomes the record owner of such Shares, notwithstanding the exercise ofan Option or SAR or vesting of another Award.

16.3 Tax-Related Items. The Company or any Affiliate, as applicable, shall have the authority and theright to deduct or withhold, or to require a Participant to remit to the Company, an amount sufficient tosatisfy the obligation for Tax-Related Items with respect to any taxable or tax withholding eventconcerning a Participant arising as a result of the Participant’s participation in the Plan or to take such


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other action as may be necessary or appropriate in the opinion of the Company or an Affiliate, asapplicable, to satisfy withholding obligations for the payment of Tax-Related Items by one or acombination of the following: (a) withholding from the Participant’s wages or other cash compensation;(b) withholding from the proceeds of sale of Shares underlying an Award, either through a voluntary saleor a mandatory sale arranged by the Company on the Participant’s behalf, without need of furtherauthorization; or (c) in the Committee’s sole discretion, by withholding Shares otherwise issuable underan Award (or allowing the return of Shares) sufficient, as determined by the Committee in its solediscretion, to satisfy such Tax-Related Items. No Shares shall be delivered pursuant to an Award to anyParticipant or other person until the Participant or such other person has made arrangements acceptableto the Committee to satisfy the obligations for Tax-Related Items with respect to any taxable or taxwithholding event concerning the Participant or such other person arising as a result of an Award.

16.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement shall interferewith or limit in any way the right of the Company or any Affiliate to terminate any Participant’s Service atany time, nor confer upon any Participant any right to continue in the Service of the Company or anyAffiliate.

16.5 Unfunded Status of Awards. The Plan is intended to be an ‘‘unfunded’’ plan for incentivecompensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothingcontained in the Plan or any Award Agreement shall give the Participant any rights that are greater thanthose of a general creditor of the Company or any Affiliate.

16.6 Indemnification. To the extent allowable pursuant to applicable law, each member of the Committeeor of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, orexpense that may be imposed upon or reasonably incurred by such member in connection with orresulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he orshe may be involved by reason of any action or failure to act pursuant to the Plan and against and fromany and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceedingagainst him or her; provided he or she gives the Company an opportunity, at its own expense, to handleand defend the same before he or she undertakes to handle and defend it on his or her own behalf. Theforegoing right of indemnification shall not be exclusive of any other rights of indemnification to whichsuch persons may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as amatter of law, or otherwise, or any power that the Company may have to indemnify them or hold themharmless.

16.7 Relationship to other Benefits. No payment pursuant to the Plan shall be taken into account indetermining any benefits pursuant to any pension, retirement, savings, profit sharing, group insurance,termination programs and/or indemnities or severance payments, welfare or other benefit plan of theCompany or any Affiliate, except to the extent otherwise expressly provided in writing in such other plan oran agreement thereunder.

16.8 Expenses. The expenses of administering the Plan shall be borne by the Company and/or itsSubsidiaries and/or Affiliates.

16.9 Titles and Headings. The titles and headings of the Sections in the Plan are for convenience ofreference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings,shall control.

16.10 Fractional Shares. No fractional Shares shall be issued and the Committee shall determine, in itsdiscretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shallbe eliminated by rounding up or down as appropriate.


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16.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan, thePlan, and any Award granted or awarded to any Participant who is then subject to Section 16 of theExchange Act, shall be subject to any additional limitations set forth in any applicable exemptive ruleunder Section 16 of the Exchange Act (including any amendment to Rule 16b-3 under the Exchange Act)that are requirements for the application of such exemptive rule. To the extent permitted by applicablelaw, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extentnecessary to conform to such applicable exemptive rule.

16.12 Government and Other Regulations. The obligation of the Company to make payment of awards inShares or otherwise shall be subject to all applicable laws, rules, and regulations of the United States andjurisdictions outside the United States, and to such approvals by government agencies, includinggovernment agencies in jurisdictions outside of the United States, in each case as may be required or asthe Company deems necessary or advisable. Without limiting the foregoing, the Company shall have noobligation to issue or deliver evidence of title for Shares subject to Awards granted hereunder prior to:(i) obtaining any approvals from governmental agencies that the Company determines are necessary oradvisable, and (ii) completion of any registration or other qualification with respect to the Shares underany applicable law in the United States or in a jurisdiction outside of the United States or ruling of anygovernmental body that the Company determines to be necessary or advisable or at a time when anysuch registration or qualification is not current, has been suspended or otherwise has ceased to beeffective. The inability or impracticability of the Company to obtain or maintain authority from anyregulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessaryto the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability inrespect of the failure to issue or sell such Shares as to which such requisite authority shall not have beenobtained and shall constitute circumstances in which the Committee may determine to amend or cancelAwards pertaining to such Shares, with or without consideration to the affected Participant. The Companyshall be under no obligation to register pursuant to the Securities Act any of the Shares paid pursuant tothe Plan. If the Shares paid pursuant to the Plan may in certain circumstances be exempt from registrationpursuant to the Securities Act, the Company may restrict the transfer of such Shares in such manner as itdeems advisable to ensure the availability of any such exemption.

16.13 Governing Law. The Plan and all Award Agreements shall be construed in accordance with andgoverned by the laws of the State of Delaware.

16.14 Section 409A. Except as provided in Section 16.15 hereof, to the extent that the Committeedetermines that any Award granted under the Plan is subject to Section 409A of the Code, the AwardAgreement evidencing such Award shall incorporate the terms and conditions required by Section 409Aof the Code. To the extent applicable, the Plan and Award Agreements shall be interpreted in accordancewith Section 409A of the Code and U.S. Department of Treasury regulations and other interpretiveguidance issued thereunder, including without limitation any such regulations or other guidance that maybe issued after the date the Plan became effective. Notwithstanding any provision of the Plan to thecontrary, in the event that following the date an Award is granted the Committee determines that theAward may be subject to Section 409A of the Code and related Department of Treasury guidance(including such Department of Treasury guidance as may be issued after the date the Plan becameeffective), the Committee may adopt such amendments to the Plan and the applicable Award Agreementor adopt other policies and procedures (including amendments, policies and procedures with retroactiveeffect), or take any other actions, including amendments or actions that would result in a reduction to thebenefits payable under an Award, in each case, without the consent of the Participant, that the Committeedetermines are necessary or appropriate to (a) exempt the Award from Section 409A of the Code and/orpreserve the intended tax treatment of the benefits provided with respect to the Award, or (b) comply withthe requirements of Section 409A of the Code and related Department of Treasury guidance and therebyavoid the application of any penalty taxes under such Section or mitigate any additional tax, interest


18APR201400425885

and/or penalties or other adverse tax consequences that may apply under Section 409A of the Code ifcompliance is not practical.

16.15 No Representations or Covenants with respect to Tax Qualification. Although the Company mayendeavor to (1) qualify an Award for favorable or specific tax treatment under the laws of the UnitedStates or jurisdictions outside of the United States (e.g., incentive stock options under Section 422 of theCode or French-qualified stock options) or (2) avoid adverse tax treatment (e.g., under Section 409A ofthe Code), the Company makes no representation to that effect and expressly disavows any covenant tomaintain favorable or avoid unfavorable tax treatment, anything to the contrary in this Plan, includingSection 16.14 hereof, notwithstanding. The Company shall be unconstrained in its corporate activitieswithout regard to the potential negative tax impact on holders of Awards under the Plan. Nothing in thisPlan or in an Award Agreement shall provide a basis for any person to take any action against theCompany or any Affiliate based on matters covered by Section 409A of the Code, including the taxtreatment of any Awards, and neither the Company nor any Affiliate will have any liability under anycircumstances to the Participant or any other party if the Award that is intended to be exempt from, orcompliant with, Section 409A of the Code, is not so exempt or compliant or for any action taken by theCommittee with respect thereto.

16.16 Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment inaccordance with any clawback policy that the Company is required to adopt pursuant to the listingstandards of any national securities exchange or association on which the Company’s securities arelisted or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act orother applicable laws.

16.17 Severability. If any provision of the Plan or the application of any provision hereof to any person orcircumstance is held to be invalid or unenforceable, the remainder of the Plan and the application of suchprovision to any other person or circumstance shall not be affected, and the provisions so held to beunenforceable shall be reformed to the extent (and only to the extent) necessary to make it enforceableand valid.

* * * *


UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K� ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31, 2014

OR

� TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-13103

Ciber, Inc.(Exact name of registrant as specified in its charter)

Delaware 38-2046833(State or other jurisdiction of (I.R.S. Employerincorporation or organization) Identification No.)

6363 South Fiddler’s Green Circle, Suite 1400,Greenwood Village, Colorado 80111

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (303) 220-0100

Securities registered pursuant to Section 12(b) of the Act:

Title of class Name of exchange on which registered

Common Stock, $0.01 par value New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the SecuritiesAct. � Yes � No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of theAct. � Yes � No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filing requirements for the past 90 days. � Yes � No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post suchfiles). � Yes � No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter)is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. �

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or asmaller reporting company. See the definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer’’ and ‘‘smaller reporting company’’in Rule 12b-2 of the Exchange Act.

Large accelerated filer � Accelerated filer � Non-accelerated filer � Smaller reporting company �(Do not check if a

smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ExchangeAct). � Yes � No

The aggregate market value of the outstanding voting stock held by non-affiliates of the registrant as of June 30, 2014, was$353,212,781 based on the closing price of the registrant’s Common Stock of $4.94 per share reported on the New York StockExchange on such date.

As of February 9, 2015, there were 78,651,636 shares of the registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the Registrant’s 2015 Annual Meeting of Shareholders, which we intend to file nolater than April 30, 2015, are incorporated by reference into Part III of this Report.

Ciber, Inc.Form 10-K

Table of Contents

Page

Part IItem 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Item 4. Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Part IIItem 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer

Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . 45Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . 47Item 9. Changes in and Disagreements with Accountants on Accounting and Financial

Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

Part IIIItem 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . 88Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Item 12. Security Ownership of Certain Beneficial Owners and Management and Related

Shareholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89Item 13. Certain Relationships and Related Transactions, and Director Independence . . . . . 89Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Part IVItem 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

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Part I

Disclosure Regarding Forward-Looking Statements

This annual report on Form 10-K contains forward-looking statements as defined in the PrivateSecurities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historicalfacts and may include financial projections and estimates and their underlying assumptions, statementsregarding plans, objectives, and expectations with respect to future operations, products, and services, andstatements regarding future performance of one or more aspects of our business. We intend forward-lookingstatements to be identified by words such as ‘‘anticipate,’’ ‘‘believe,’’ ‘‘expect,’’ ‘‘estimate,’’ ‘‘intend,’’ ‘‘may,’’‘‘opportunity,’’ ‘‘plan,’’ ‘‘potential,’’ ‘‘project,’’ ‘‘should,’’ and similar expressions.

Forward-looking statements appear in a number of places in this Form 10-K, and include statementsabout such matters as:

• business strategies and other plans and objectives for future operations, including plans for customergrowth and retention, market, service and product development and expansion and restructuring ofoperations;

• our outlook on our future financial condition or results of operations;

• our belief that we have sufficient liquidity available to finance our working capital needs through atleast the end of 2015;

• the amount and nature of future capital expenditures and the availability of liquidity and capitalresources to fund capital expenditures;

• anticipated changes in the market for information technology (‘‘IT’’) services and spending on ITservices by our customers; and

• anticipated changes in the methods we use, and costs we experience, in marketing, selling anddelivering our services.

Although we believe that the expectations reflected in such forward-looking statements are reasonable atthe time they are made, you are cautioned that forward-looking information and statements are subject tovarious risks and uncertainties, many of which are difficult to predict and generally beyond our control.Risks and uncertainties could cause actual results and developments to differ materially from thoseexpressed in, or implied or projected by, forward-looking information and statements provided here or inother disclosures and presentations. Those risks and uncertainties include, but are not limited to, the risksdiscussed or identified below in a section titled ‘‘Risk Factors.’’ As we may update those Risk Factors fromtime to time, please consult our public filings at www.sec.gov or www.ciber.com. Any forward-lookingstatement made by us in this report is based only on information currently available to us and speaks onlyas of the date on which it is made. We do not undertake any obligation to update or revise anyforward-looking information or statements.

Item 1. Business

In this Annual Report on Form 10-K, references to ‘‘we,’’ ‘‘our,’’ ‘‘us,’’ ‘‘the Company,’’ or ‘‘Ciber’’refer to Ciber, Inc. and its subsidiaries. All references to years, unless otherwise noted, refer to ourfiscal year, which ends on December 31.

Overview

Ciber is a leading global information technology (‘‘IT’’) services company founded in 1974 with40 years of proven IT experience and a wide range of technology expertise. Ciber has the infrastructureand expertise to deliver IT services on a global scale. Focusing on the client, we take a personalizedapproach that includes building long-term relationships via the creation of IT solutions for the client,

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and implementing business strategies that reflect anticipated trends. We are committed to deliveringquality solutions precisely configured to our clients’ needs and achieving the highest level of customersatisfaction and self-assessed customer delight. Our goal is delivering business value to our clients.

The key initiatives of our strategic plan include: (i) focusing on high-value, tightly-defined coreofferings with a well-developed portfolio of reusable solution sets; (ii) performing under heightenedoperational regimes and (iii) customer service.

Expertise and Capabilities:

• Ciber Services: We go to market around three groups of services that we provide to our clients,which we refer to as the three core pillars of our business: (i) Application Development andMaintenance services, or ADM, (ii) Independent Software Vendor relationships, or ISVs, and(iii) our Ciber Managed Services, which we refer to as CMS.

• Vertical Markets: Ciber has experience in a wide range of industries and has deep domainexpertise and customized, in-depth technology solutions and best practices. Our focused offeringsalign with the needs of Global 2000 blue-chip companies in industries such as manufacturing,retail, healthcare and life sciences, communications, energy and utilities, financial services, andthe public sector.

• Integrated Global Delivery: Our global delivery centers in the U.S., India, Germany, Poland, andthe Netherlands, allow us to globally integrate our delivery network and thus provide solutionsonsite, offsite, onshore, near-shore or in a blended combination. Through our global deliverycenters we produce repeatable standardized processes that allow us to optimize efficiency,investment and speed to value.

IT Industry Background

The global IT services market is approximately $1 trillion and the more specific market in whichCiber competes is approximately $100 billion in revenue. Traditional software implementation and ISVprojects comprise over half of the market, but the industry is shifting to the faster growing cloud andSaaS (Software as a Service) services.

Reportable Segments

Ciber operates globally, reporting resources in two segments: North America and International.During the second quarter of 2013, we closed down our Russian operations. In 2012 we sold ourFederal division and the infrastructure portion of our information technology outsourcing practice. As aresult, these businesses are now reported as discontinued operations within our financial statements andaccordingly, our financial statements have been reclassified for all periods presented in this AnnualReport on Form 10-K to conform to the current presentation. Additionally, discussions throughout thisAnnual Report on Form 10-K exclude the discontinued operations, unless otherwise noted.

International

In 2014, our International segment represented approximately 51% of our total revenue. Revenuesfrom International were $441.9 million, $456.4 million, and $434.2 million for the years endedDecember 31, 2014, 2013, and 2012, respectively. Our Ciber International segment is organized bycountry and primarily consists of countries in Western Europe and the Nordic region. Our four largestcountries are Germany, the Netherlands, the United Kingdom (‘‘U.K.’’) and Norway, respectively.

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North America

In 2014, our North America segment represented approximately 49% of our total revenue.Revenues from North America were $422.7 million, $423.3 million, and $432.8 million for the yearsended December 31, 2014, 2013, and 2012, respectively. Our North America segment is organized intopractices.

Services

Our International and North America segments operate to harmonize our service offerings acrossboth segments and provide consistent quality services to our global clients:

1. Staffing/Application Development and Maintenance

Ciber was founded as an IT staffing business and 40 years later it remains a large portion of ourrevenue. We support IT services needs across the full demand spectrum in a variety of technologies anddisciplines. Our staffing services cover the full software development lifecycle as well as steady-stateoperations. We excel in program and project management, business analysis, and software and systemdesign, testing and implementation.

Ciber’s Application Development and Maintenance services provide analysis, design, development,testing, implementation, and maintenance of our client’s business applications. We offer flexible,capable, objective and technical business services focusing on eCommerce, application development andenterprise modernization.

Through our project managers (PMs) and business analysts (BAs), Ciber provides experiencedtalent, capabilities, dedication and consulting acumen. Ciber’s expert project manager and businessanalyst professionals deliver first-class solutions and continue to be client focused and results drivenwith the agility that is required of modern business. Utilizing a Project Management Office (PMO)centralizes management and control of projects to ensure that they successfully achieve anorganization’s strategic business objectives. In addition to the PMO, Ciber also offers Project PortfolioManagement (PPM) services where our experts identify and analyze all projects in all portfolios,prioritize them for effectiveness, manage and control them in such a way as to achieve IT goals andobjectives, and evaluate them for best practices, reusable procedures, and return on investment.

2. ISV/Channel Partner Platforms

We have long-term relationships with leading IT software providers and systems developers, andare a leading ISV or Channel Partner for industry leaders. We provide expert project management,application and technical consulting, database administration, and infrastructure support for both aproject-based or managed-services approach, allowing clients to take maximum advantage of advancesin rapid technology. Our consulting solutions range from project strategy and planning, softwareassessment and selection, to implementation and integration, hosting and change management. Oursolutions provide customers with higher productivity, lower costs, and accelerated return on investment.

SAP: Ciber is a committed SAP partner and has been for more than 20 years. We help ourcustomers meet their business needs with their technology investments and deliver the results theydemand. As an SAP Gold Partner for Hosting, Application Management, HANA and Cloud Services,Ciber consultants have the skills and experience to guide our customers with all aspects of theirimplementation and operation of SAP systems globally.

Ciber covers the entire SAP application portfolio focusing on Cloud Apps, Analytics, HANA,hybris Omni-Commerce, UX & Mobile solutions and Governance Risk and Compliance requirements.We are an early adopter of SAP’s new technologies such as mobility, in-memory computing (HANA),and HR applications (Success Factors), and have templated solutions for Retail & Wholesale, Energy &

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Utilities, Publishing & Media, Process Industry Chemicals & Pharma and Public Sector—SocialHousing. A large set of Ciber customers have also achieved faster time to value by adopting Ciber IPin the form of software products in areas such as Compliance, Master Data Management or CoreFinance Processes.

Oracle: Ciber is an Oracle Platinum Partner. We offer a variety of traditional and cloud-basedservices. We are a business process outsourcer for Oracle which enables us to provide business servicesand Oracle software on a subscription basis in a hosted managed services environment. We haveexpertise in helping clients implement, upgrade, and maintain Oracle’s E-Business Suite, PeopleSoft,Hyperion and Cloud product lines. Since 1990, we have helped clients across the globe leverage theirOracle applications to improve business processes, reduce costs, and provide better support formanagement decision-making. We are Oracle’s premier partner in higher education, a lead partner inthe public sector, and an emerging partner in health care.

Infor: In 2014 Ciber was named Infor Partner of the Year. Since 1995, Ciber has been a premiereGlobal Alliance Infor Lawson Consulting partner providing services for a variety of industries includinghealthcare, education, government, retail, manufacturing, and many others. Our solutions include: fullERP implementation and upgrade services, human capital management and talent managementimplementation services, managed services and business intelligence and integration services, amongothers.

Microsoft: Ciber and Microsoft have been global partners since 1996. We are a recognized GlobalDynamics Partner, a Public Sector Global Partner of the Year, and a UK Dynamics Partner of theYear. We are also currently a Microsoft Inner Circle Partner, a recognition that is only given to a selectgroup of global partners. While we work with Microsoft clients in many industries we specialize inthree core verticals: financial services, the public sector and not-for-profit organizations.

Our typical Microsoft customers have very sophisticated needs and requirements and therefore oursolutions require a broad spectrum of expertise including Dynamics CRM, Office 365, Sharepoint,Yammer, Lync, Infrastructure design and delivery, Dynamics AX, and .NET development. We arerecognized in the industry as an expert in CRM/xRM solutions integration with Microsoft applicationsas well as non-Microsoft third party applications in either on-premise or cloud environments.

3. Integrated Managed Services

Managed services are the core of Ciber’s business. Today many companies selectively outsourcesome level of IT functionality because Managed Services is a proven way to reduce and controloperating costs, improve company focus and gain access to world-class IT capabilities. We partner withclients to optimize their IT environment so that they can focus on business innovation.

We work with clients utilizing a highly industrialized support concept to optimize their ITenvironment. We guide them through the jungle of innovations, allowing them to invest in high valueopportunities to drive their success.

Ciber has extensive knowledge in custom application development, maintenance and enhancement,application management, and infrastructure management. We have the knowledge and strategicexpertise to help clients shift to the cloud, integrate cloud applications and manage multi-cloudenvironments.

4. Other Services

Our business consulting practice is comprised of Enterprise Application Consultancy, IT StrategyConsultancy and Business Process Consultancy. Enterprise Application Consultancy focuses on cloud,mobility, customer engagement and enterprise information management. IT Strategy Consultancy helps

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businesses choose the right IT strategy by creating a joint business and IT road map and managing thechange within the organization. Business Process Consultancy helps businesses become more agile,aware and intelligent. As a result businesses can quickly respond to changing market demands, makepromises to clients they can live up to, and have data instantly available to make more informedbusiness decisions. Ciber’s business consulting services have in-depth industry expertise in the retail,manufacturing and utilities verticals.

The above areas represent our key service offerings. However we also offer IT services for otheremerging technologies.

Financial Information about Segments and Geographic Areas

Please refer to ‘‘Management’s Discussion and Analysis of Financial Condition and Results ofOperations’’ and Note 16 of the Notes to our Consolidated Financial Statements included under‘‘Financial Statements and Supplementary Data’’ of this Annual Report on Form 10-K for a discussionof financial information by segment and geographic areas.

Clients

Our current clients range from large corporations listed in the Fortune 100 to middle-marketclients. These entities include businesses in most major industries. We also serve government entities inboth North America and International. These organizations use significant portions of their IT budgetsto partner with outside firms which enable them to achieve their business and IT objectives. We serveindustries that include manufacturing, professional service, the public sector, healthcare and lifesciences, and retail.

Certain clients account for a significant portion of our revenue. While no specific client accountsfor over 10% of our consolidated revenues, our 5 largest clients accounted for approximately 19% ofour consolidated revenues in 2014.

Client satisfaction is one of our top priorities. It allows us to develop sustainable clientrelationships and, as a result, business success.

Competition

The IT services industry is highly competitive and characterized by continuous change in customerrequirements and improvements in technologies. Our competition varies significantly by geography, aswell as by the type of service provided and the vertical market. We believe our competitors include,among others, Accenture plc, Atos, Capgemini, Cognizant Technology Solutions Corp, InfosysTechnologies Limited, Wipro, Perficient, Inc., Sapient Corp and The Hackett Group, Inc. In addition,we compete with many smaller, emerging, local companies in the markets in which we operate, as wellas the service divisions of various software developers.

Our clients are focused on quality and cost of service. We continue to migrate work to our globaloffshore delivery centers in order to meet these customer demands and compete globally. By utilizingour global offshore delivery centers we are able to respond to our clients’ need for a complete ITsolution at competitive prices.

Our Competitive Strengths

We believe that our competitive strengths, identified below, position us to respond to thelong-term trends, changing demands and competition within our principal markets.

Long-term Client Relationships—Ciber has been in business since 1974. We regularly achieve highclient satisfaction and have great success renewing client relationships. In fact, our very first client

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remains one of our top five clients today in terms of annual revenue. We provide a variety of servicesin multiple locations for this global client. This relationship exemplifies the kind of long-termcommitment that we have toward our clients and speaks to the quality and breadth of the services thatwe provide. We are nimble to adapt to our clients’ rapidly changing needs as a result of our wide rangeof services. Because of our long-term client relationships, we are highly referenced in the verticals andpractices in which we do business.

Global Presence—Through One Ciber, our globalization initiative, we are expanding our practicesworldwide, and employing the thought leadership and intellectual property of our consultants to makeit accessible to our clients everywhere. We believe Ciber combines the best of global reach with localpresence through onshore, near-shore and offshore centers of excellence. When combined with localaccount management and long-standing client relationships, we are able to provide our clients withflexible, agile service delivery that speeds their time to value of technology investments.

Recognized Thought Leader—Influences including technology analyst firms, industry associations,and user groups, as well as our clients and partners, have recognized Ciber as a thought leader in theindustry. We often demonstrate our thought leadership through Ciber-authored white papers, speakingengagements, analyst reports, and blogs. Awards from partners, influencers and clients recognize ourthought leadership, vertical industry expertise, service excellence, and resulting client satisfaction.

Ciber has adhered to a Quality Management approach to business for many years. We haveachieved many location specific certifications including ISO 9001, ISO 27001 and ISO 20000 as well assuccessfully completed a Software Engineering Institute’s Capability Maturity Model Integration(CMMI) at our offshore center to take advantage of industry best practices. We have evolved andcustomized our processes to become more applicable to our outsourcing, management, and solutionservices. Our focus on quality allows us to better serve our clients through consistency, efficiency, andreliable IT security.

Employees

As of December 31, 2014, we had approximately 6,500 employees, including billable employees andsupport staff. We routinely supplement our employee consulting staff with the use of subcontractors,which totaled approximately 700 at December 31, 2014, most of which are from other services firms.Between Ciber employees and subcontractors, we had approximately 5,600 billable consultants atDecember 31, 2014. None of our employees are subject to a collective bargaining arrangement and webelieve our relations with our employees are good. We have employment agreements with our executiveofficers and certain other employees.

Seasonality

We experience a moderate amount of seasonality. Typically, our billable hours, which directly affectour revenue and profitability, decrease in the second half of the year, especially during the thirdquarter for our International segment and the fourth quarter for our North America segment, due tothe large number of holidays and vacation time taken by our billable consultants. As a result, ouroperating income as a percentage of total revenue is generally the lowest in the third quarter of eachcalendar year for our International segment and the fourth quarter of each calendar year for our NorthAmerica segment.

Available Information

On the Investor Relations section of our website (www.ciber.com), we make available free ofcharge our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports onForm 8-K, and any amendments to those reports, as soon as reasonably practicable after such reportsare electronically filed with or furnished to the Securities and Exchange Commission (the ‘‘SEC’’)pursuant to Section 13(a) or 15(d) of the Exchange Act.

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Item 1A. Risk Factors

We operate in a dynamic and rapidly changing economic and technological environment thatinvolves numerous risks and uncertainties, many of which are driven by factors that we cannot controlor predict. The following section describes some, but not all, of the factors that could have a materialadverse effect on our business, financial condition, results of operations, and the market price of ourcommon stock.

Our results of operations may be adversely affected if we are unable to refine our offerings, improve efficiency,and execute on these key elements of our strategic plan or our strategic plan proves to be less successful thananticipated.

If we fail to properly analyze and classify the needs of our clients and refine our offerings, we maynot be able to achieve our desired client retention and growth objectives and, as a consequence, ourfinancial performance may be negatively impacted. If we are unable to instill the appropriateoperational regimes and delivery methods to increase our overall efficiency and cost effectiveness, wemay not be able to increase our profitability, improve our cash flow, and strengthen our balance sheet.If we are unable to successfully execute any or all of the initiatives of our strategic plan, our revenues,operating results, and profitability may be adversely affected. Even if we successfully implement ourstrategic plan, we cannot guarantee that our plan will be successful and that our revenues, operatingresults, and profitability will improve to the levels we anticipate, or at all. With respect to ourpreviously-announced restructuring initiatives (the most recent of which began in the third quarter of2014), there can be no assurance that we will achieve the cost savings estimated or that we will notencounter the need to spend additional amounts to offset other factors that impact our business.

If we are not able to anticipate and keep pace with rapid changes in technology, our business may benegatively affected.

Our success depends on our ability to develop and implement technology services and solutionsthat anticipate and keep pace with rapid and continuing changes in technology, industry standards andclient preferences. We may not be successful in anticipating or responding to these developments on atimely basis, and our services and solutions may not be successful in the marketplace. In addition,services, solutions and technologies developed by current or future competitors may make our serviceor solution offerings uncompetitive or obsolete. Any one of these circumstances could adversely affectour ability to obtain and successfully complete client engagements.

A data security or privacy breach could adversely affect our business.

The protection of client, employee, and company data is critical to our reputation and the successof our business. Our clients have a high expectation that we will adequately protect their confidentialinformation. In addition, the regulatory environment surrounding information security and privacy isincreasingly demanding with new and constantly changing requirements and third-party efforts tobreach systems are increasing in frequency and sophistication. Protection of confidential client,employee, and Company data, along with compliance in the constantly changing regulatory environmentmay add expenses to our business operations. If any person, including any of our employees, negligentlydisregards or intentionally breaches our established controls with respect to such data or otherwisemismanages or misappropriates that data, we could be subject to monetary damages, fines and/orcriminal prosecution. Unauthorized disclosure of sensitive or confidential client or employee data,whether through a third party system breach, systems failure, employee negligence, fraud ormisappropriation, could damage our reputation and cause us to lose clients. Similarly, unauthorizedaccess to or through our information systems or those we develop for our clients, whether by ouremployees or third parties, could result in system disruptions, negative publicity, legal liability,monetary damages, and damage to our reputation.

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We may experience declines in profitability if we do not accurately estimate the cost of engagements conductedon a fixed-price basis.

When making a proposal for or managing a fixed-price engagement, we rely on our estimates ofcosts and timing for delivering our services, which are sometimes based on limited data and could beinaccurate. If we do not accurately estimate our costs and the timing for completion of a fixed-priceproject, the contract for such a project could prove unprofitable or yield a profit margin that is lowerthan expected. Some fixed-price engagements are subject to long-term contracts that range from threeto five years. Estimating future year costs on such long-term engagements is extremely difficult andsubject to additional risks. Often our cost estimates and the pricing we offer for outsourcing projectsanticipate long-term cost savings resulting from transformational and other initiatives that we expect toimplement and benefit from over the term of the outsourcing contract. If we fail to accurately estimatethe costs of performing our services or the amount of cost savings that we will experience on long-termcontracts, we may underprice our contracts as a result, causing an adverse effect on our profits.

Losses, if any, on fixed-price contracts are recognized when the loss is determined. Any increasedor unexpected costs or unanticipated delays in connection with the performance of fixed-pricecontracts, including delays caused by factors outside of our control, could make these contracts lessprofitable or unprofitable and may affect the amount of revenue, profit, and profit margin reported inany period.

Our business could be adversely affected if our clients are not satisfied with our services, and we could facedamage to our financial results, professional reputation and/or incur legal liability.

As a professional services firm, we depend largely on our relationships with our clients and ourreputation for high quality professional services and integrity to attract and retain clients. In addition,we depend heavily on a limited number of clients. While no specific client accounts for over 10% ofour consolidated revenues, our 5 largest clients accounted for approximately 19% of our revenues in2014. Additionally, many of our engagements involve projects that are critical to the operations of ourclients’ businesses and many involve the protection of confidential client information. If a client is notsatisfied with the quality of work performed by us or a subcontractor, or with the type of services orsolutions delivered, or if a data security breach occurs, we could incur additional costs to address thesituation, the profitability of that work might be impaired, and the client’s dissatisfaction with ourservices could damage our ability to obtain additional work from that client or other clients. Clientsthat are not satisfied may also seek to terminate contracts with us prematurely, potentially resulting inadditional costs and loss of expected revenues. In addition, negative publicity related to our clientrelationships, regardless of its accuracy, may further damage our business by affecting our ability tocompete for new contracts with current and prospective clients. If we do not meet our contractualobligations to a client, we could be subject to legal liability. Our contracts typically include provisions tolimit our exposure to legal claims relating to our services and the applications we develop; however,these provisions may not protect us, or may not be enforceable under some circumstances or under thelaws of some jurisdictions. In addition, we may enter into agreements with little or no liabilityprotection because we perceive an important economic opportunity or because our personnel did notadequately adhere to our guidelines. As a result, we may find ourselves committed to providing servicesthat we are unable to deliver or whose delivery will cause us financial loss. If we cannot or do notfulfill our obligations, we could face legal liability. In addition, if we were to fail to properly deliver ona project, we may not be able to collect any related accounts receivable or could even be required torefund amounts paid by the client.

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We rely on third-party companies to perform some of our services to our customers, which if not performed toour standards, could cause significant disruption to our business and harm our reputation.

We have arrangements with third parties to perform certain services for our customers which, ifnot performed accurately, to our standards, and in accordance with the terms of our agreements withour customers, could result in significant disruptions or costs to us. Often in these circumstances, weare liable to our clients for the performance of these third parties. Should these third parties fail toperform timely or satisfactorily, our clients may terminate their engagements with us or withholdpayment under their agreements with us until the services have been completed successfully. Inaddition, the timing of our revenue recognition may be affected or we may realize lower profits if weincur additional costs due to delays, if we must assign additional personnel to complete theengagement, if we are unable to otherwise provide those services internally, or if we fail to identify areplacement third party in an orderly, cost-effective and timely manner. Unsatisfactory performance bythese third parties could negatively impact our relationships with our clients and harm our reputation.

Termination of a contract by a significant client and/or cancellation with short notice could adversely affectour financial condition.

Our clients typically retain us on a non-exclusive, engagement-by-engagement basis through masterservice agreements (‘‘MSA’’). Our MSAs typically do not include any commitment by our clients to giveus a specific volume of business or future work. The length of individual projects and engagements canvary greatly. Our objective is to sign multi-year contracts with our clients; however, our contractsgenerally allow our client to terminate the contract for convenience or to reduce the amount of ourservices. Clients may generally cancel a contract with short notice, subject in some instances to penaltyprovisions but in many cases, without significant early termination cost. Termination, reduction, or delayof any given engagement could result from factors unrelated to our work product or the progress of theproject, such as factors related to business or financial conditions of the client, changes in clientstrategies or the domestic or global economy generally. A significant number of terminations,reductions, or delays in engagements in any given period of time could negatively and materially impactour revenues and profitability.

Our results of operations could be adversely affected if the market for IT services and solutions fluctuates ordoes not continue to grow.

Fluctuations in our customers’ needs, changes in our customers’ industries, lack of clientacceptance, uncertainty of global economic conditions or weakening economic conditions, competingtechnologies and services or reductions in corporate spending could cause the market for IT servicesand solutions to grow more slowly or could reduce demand for our services and solutions. For example,economic conditions have impacted some of our customers’ operations and technology spending andhave caused some of our clients to delay, cancel or scale back their IT projects or IT spending, to seeklower pricing or extended payment terms or otherwise exert pricing pressure on us, to delay paymentsdue to us and, as occurred with several clients, to enter into bankruptcy or liquidation. Reduceddemand for IT services has also resulted in reductions in the growth of new business and led toincreased price competition for our services and increased the likelihood of entering into contracts thatproduce lower profit margins, which may materially adversely affect our revenues, results of operationsand financial condition.

Our profitability will be adversely impacted if we are unable to maintain our utilization rates and control ourcosts.

Our profitability depends primarily on the prices for our services, our professionals’ utilization orbillable time and our costs. As a services business, our largest expense is salaries and payroll-relatedexpenses. However, it is our skilled employees that generate our revenues. Balancing our workforce

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levels against the demands for our services is difficult. Delays or cutbacks in projects or delays infinding new projects could increase the non-productive time of our consultants, which would decreaseour utilization levels and our profit margins. We generally cannot reduce our labor costs as quickly asnegative changes in revenue may occur. In addition, in a number of the countries in which we operate,the local labor laws make it very expensive to involuntarily terminate employees. As a result, some ofour operations may retain underutilized employees for longer periods. To achieve our desired level ofprofitability, we must maintain our utilization at an appropriate rate. If we are unable to achieve andmaintain our target utilization rates, our profitability could be adversely impacted. Further, if laborcosts increase, this could put upward pressure on our costs and adversely affect our profitability if weare unable to recover these increased costs by increasing the prices for our services.

If we do not continue to improve our operational, financial and other internal controls and systems to manageour growth and size or if we are unable to enter, operate and compete effectively in new geographic markets,our results of operation may suffer and the value of our business may be harmed.

Our current business and anticipated growth will continue to place significant demands on ourmanagement and other resources. Our global operations will require us to continue to develop andimprove our operational procedures, financial systems, and other internal controls at our operationsand facilities around the world. In particular, our continued growth will increase the challenges involvedin:

• recruiting, training and retaining technical, finance, marketing and management personnel withthe knowledge, skills and experience that our business model requires;

• maintaining high levels of client satisfaction;

• developing and improving our internal administrative infrastructure, particularly our financial,operational, communications and other internal systems;

• preserving our culture, values and entrepreneurial environment; and

• effectively managing our personnel and operations and effectively communicating to ourpersonnel worldwide our core values, strategies, and goals.

In addition, the increasing size and scope of our operations increase the possibility that a memberof our personnel will engage in unlawful or fraudulent activity, breach our contractual obligations, orotherwise expose us to unacceptable business risks, despite our efforts to train our employees andmaintain internal controls to prevent such instances. If we are not successful in developing andimplementing the right processes and tools to manage our enterprise, our ability to competesuccessfully and achieve our business objectives could be impaired.

If we fail to compete effectively in the new markets we enter, or if the cost of entering thosemarkets is substantially greater than we expect, our business, results of operations, and financialcondition could be adversely affected.

Our brand and reputation are key assets and competitive advantages of our Company and our business maybe affected by how we are perceived in the marketplace.

Our ability to attract and retain customers is affected by external perceptions of our brand andreputation. Reputational damage from negative perceptions or publicity could damage our reputationwith customers and employees as well as prospective customers and employees. We may not besuccessful in detecting, preventing, or negating all changes in or impacts upon our reputation. Negativeperceptions or publicity could have a material adverse effect on our business and financial results.

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Our future success depends on our ability to continue to retain and attract qualified employees and anyinability to do so, or a loss of key employees, could have a material adverse effect on our business.

Our business involves the delivery of professional services and is highly labor intensive. Our futuresuccess depends upon our ability to continue to attract, train, effectively motivate and retainhighly-skilled technical, managerial, sales and marketing personnel. Although we invest significantresources in recruiting and retaining employees, there is often considerable competition within the ITservices industry for personnel with certain in-demand qualifications, and we may be unable to competefor the most desirable employees.

From time to time, we have trouble locating sufficient numbers of highly-qualified candidateslocated in our desired geographic locations, with the required specific expertise or at the desiredcompensation levels. The inability to attract and retain qualified employees in sufficient numbers couldhave a serious negative effect on us, including our ability to obtain and successfully complete importantclient engagements and thus, maintain or increase our revenues. Such conditions could also force us toresort to the use of higher-priced subcontractors, which would adversely affect the profitability of therelated engagement. In addition, our ability to attract and retain qualified personnel in India willbecome increasingly important as we implement our plans to expand our Global Solutions Center inIndia and increase the number of employees working there.

We believe that our future success substantially depends on certain key employees within thecompany, primarily in the senior management team. Due to the competitive employment nature of ourindustry, there is a risk that we will not be able to retain these key employees. The loss of one or morekey employees could seriously impair our ability to continue to manage and expand our business, whichcould adversely affect our business and financial results. In addition, uncertainty created by turnover ofkey employees could result in reduced confidence in our financial performance, which could causefluctuations in the price of our securities and result in further turnover of our employees.

The IT services industry, in the U.S. and internationally, is highly competitive and continually evolving, andwe may not be able to compete effectively in this evolving marketplace.

We operate in a highly competitive industry that includes a large number of diverse participants.We currently compete principally with other IT professional services firms and technology vendors,including a variety of large multinational providers and large offshore service providers that offer someor all of the services that we offer, as well as many niche solution or service providers that competewith us in a specific geographic market, industry segment or service area. Many of the companies thatprovide services in our industry have significantly greater financial, technical, offshore and marketingresources than we do. In addition, a client may choose to use its own resources rather than to engagean outside firm for the type of services that we provide. We may be unable to compete successfully withcurrent or future competitors, and our revenue and profitability may be adversely affected.Additionally, some of our competitors, particularly those located outside of the U.S. and WesternEurope in regions with lower costs of doing business, may be able to provide services and solutions toclients at lower costs or on more attractive terms. Increased competition has, and may continue to, putdownward pressure on the prices we can charge for our services. In particular, one key element of ourability to improve our profitability in the face of these trends is our ability to implement and leverage aglobal workforce, deploying lower-cost resources to provide quality work at higher margins. If we arenot able to cost-effectively integrate our global workforce in services delivery, we may not be able tocompete effectively, or maintain or improve our profitability.

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We rely heavily on relationships with software vendors and the loss of one or more of our significant softwarevendors could have a material and adverse effect on our business and results of operations.

We have significant relationships with software vendors including SAP, Oracle, Infor, andMicrosoft. Our relationships with these companies enable us to acquire customers at reduced costs andto increase win rates by allowing us to leverage our vendors’ marketing efforts and benefit from strongvendor endorsements. The loss of one or more of these relationships or endorsements could reduce ourrevenues, result in increased sales and marketing costs, lead to longer sales cycles, harm our reputationand brand recognition, and adversely affect our results of operations. We cannot predict at this timewhat the impact of the loss of one or more software vendors would have on our business and results ofoperations.

We cannot guarantee that we are in compliance with all applicable laws and regulations.

We are required to comply with numerous and constantly changing laws and regulations injurisdictions around the world. If our compliance efforts prove insufficient or any of our employees failto comply with, or intentionally disregard, any of our policies or applicable laws or regulations, a rangeof liabilities could result for the employee and for the Company, including, but not limited to,significant penalties and fines, sanctions or litigation, and the expenses associated with defending andresolving any of the foregoing, any of which could have a material impact on our business, financialcondition, and operating results.

In addition, as a global company, we are subject to U.S. and foreign laws and regulations withrespect to corruption, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act.Violations of these laws and regulations could result in prohibitions on the conduct of our business andon our ability to offer our products and services in one or more countries, fines and penalties, criminalsanctions against us, our officers, or our employees, and have a material negative adverse effect on ourreputation and our operating results. Although we have implemented policies and procedures designedto ensure compliance with these U.S. and foreign laws and regulations, including the U.S. ForeignCorrupt Practices Act and the U.K. Bribery Act, there can be no assurance that our employees or ourbusiness partners will not violate our policies.

If we are unable to protect our intellectual property rights from unauthorized use or infringement by thirdparties, our business could be adversely affected.

Our success depends, in part, upon our ability to protect our proprietary methodologies and otherintellectual property. Existing laws of the various countries in which we provide services or solutionsoffer only limited protection of our intellectual property rights. These laws are subject to change at anytime and could further limit our ability to protect our intellectual property. In addition to intellectualproperty laws in each jurisdiction where we operate, we rely upon a combination of confidentialitypolicies, nondisclosure agreements, and other contractual arrangements to protect our intellectualproperty rights. In some jurisdictions where we operate, there is uncertainty concerning the scope ofavailable intellectual property protection for software and business methods, which are fields in whichwe rely on intellectual property laws to protect our rights. Our efforts to protect intellectual propertyrights may not be adequate to prevent or deter infringement or other misappropriation of ourintellectual property by competitors, former employees, or other third parties, and we might not be ableto detect unauthorized use of, or take appropriate and timely steps to enforce, our intellectual propertyrights. Enforcing our rights might also require considerable time, money, and oversight, and we maynot be successful in enforcing our rights.

Depending on the circumstances, we might need to grant a specific client greater rights inintellectual property developed in connection with a contract than we otherwise generally do. In certainsituations, we might forego all rights to the use of intellectual property we create, which would limit

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our ability to reuse that intellectual property for other clients. Any limitation on our ability to provide aservice or solution could cause us to lose revenue-generating opportunities and require us to incuradditional expenses to develop new or modified solutions for future projects.

Our services or solutions could infringe upon the intellectual property rights of others, or we might lose ourability to utilize rights we claim in intellectual property or the intellectual property of others.

We cannot be sure that our services and solutions, or the third-party software and solutions ofothers that we offer to our clients, do not infringe on the intellectual property rights of third parties,and we could have infringement claims asserted against us or against our clients. These claims couldharm our reputation, cost us money and prevent us from offering some services or solutions. In anumber of our contracts, we agree to indemnify our clients for expenses or liabilities resulting fromclaimed infringements of the intellectual property rights of third parties. In some instances, the amountof these indemnities could be greater than the revenues we receive from the client. Any claims orlitigation in this area, whether we ultimately win or lose, could be costly, injure our reputation, orrequire us to enter into royalty or licensing arrangements. We might not be able to enter into theseroyalty or licensing arrangements on acceptable terms. If a claim of infringement were successfulagainst us or our clients, an injunction might be ordered against our clients or our own services oroperations, causing further damages. We could lose our ability to utilize the intellectual property ofothers. Third-party suppliers of software, hardware or other intellectual property assets could beacquired or sued, which could disrupt use of their products or services by us and our clients. If ourability to provide services and solutions to our clients is impaired, our operating results could beadversely affected.

In addition, if we are unable to capture the intellectual capital developed by our employees andconvert such intellectual capital into reusable and commercially marketable intellectual property, ourcosts of delivering our services may increase, our development efforts may be duplicated and we maylose the economic advantage of owning and licensing Ciber intellectual property.

If we are unable to collect our receivables, our results of operations and cash flows could be adversely affected.

Our business depends on our ability to successfully obtain payment from our clients for theamounts they owe us for work performed. We evaluate the financial condition of our clients and usuallybill and collect on relatively short cycles. We maintain allowances against receivables, but actual losseson client balances could differ from those that we currently anticipate and as a result, we might need toadjust our allowances. There is no guarantee that we will accurately assess the creditworthiness of ourclients. In addition, timely collection of client balances depends on our ability to complete ourcontractual commitments and bill and collect our contracted revenues. Recent global economicconditions and other factors resulted in financial difficulties for a number of our clients and,consequently, we experienced a greater amount of bad debt expense and related payments.

If we are unable to meet our contractual requirements, we might experience delays in thecollection of, and/or be unable to collect, our client balances and, if this occurs, our results ofoperations and cash flows could be adversely affected.

Our revenues, operating results, and profitability may vary from quarter to quarter and may result inincreased volatility in the price of our stock.

Our quarterly revenues, operating results, and profitability have varied significantly in the past andmay continue to do so. Factors that have caused and may continue to cause variations in our revenues,operating results, and profitability include:

• the business decisions of our clients regarding the use of our services;• the stage of completion of existing projects and/or their termination;

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• client satisfaction with our services;• our clients’ financial ability to pay for our services;• our ability to properly manage and execute client projects, especially those under fixed-price

arrangements;• our ability to properly price fixed-price contracts to provide for adequate profits;• our ability to maintain our profit margins and manage costs, including those for personnel and

support services;• restructuring costs or charges related to changes in our business operations;• acquisition and integration costs related to possible acquisitions of other businesses;• costs related to the discontinued operations of our former Federal division, information

technology outsourcing practice, and Russian operations, including possible additional futurerelated costs we may incur;

• costs or charges associated with potential asset sales or dispositions;• changes in, or the application of changes in, accounting principles or pronouncements under

U.S. generally accepted accounting principles;• changes in significant accounting estimates;• changes in interest rates on our debts;• currency exchange rate fluctuations;• changes in estimates, accruals or payments of variable compensation to our employees; and• global, regional and local economic and political conditions and related risks.

If we are not able to maintain the rates we charge for our services or an appropriate utilizationrate for our consultants, we will not be able to sustain our profit margin and our profitability willsuffer. A number of factors affect the rates we charge for our services, including:

• our clients’ perception of our ability to add value through our services;• changes in our pricing policies or those of our competitors;• the introduction of new products or services by us or by our competitors;• the use of globally-sourced, lower-cost service delivery capabilities by our competitors and our

clients; and• economic conditions.

Additionally, a number of factors affect our utilization rates, such as:

• seasonality, including number of workdays, holidays and vacations;• our ability to transition consultants quickly from completed projects to new engagements;• our ability to forecast demand for our services and thereby maintain an appropriately balanced

and sized workforce; and• our ability to manage employee turnover.

Our international operations expose us to additional risks that could have adverse effects on our business andoperating results.

Our operations outside of the US represented just over half of our revenues in 2014. Due to ourinternational operations, we are subject to a number of financial and operational risks that mayadversely affect our revenue and profitability, including:

• the costs and difficulties related to managing geographically diverse operations;• differences in, and uncertainties arising from, unfamiliarity or changes in foreign business culture

and practices;• our ability to obtain the necessary visas and work permits for foreign nationals;• restrictions on the movement of cash and the repatriation of earnings;• multiple and possibly overlapping or conflicting laws;• the costs of complying with a wide variety of local laws;

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• operating losses incurred in certain countries and the non-deductibility of those losses for taxpurposes; and

• differences in, and uncertainties arising from, changes in legal, labor, political and economicconditions.

The revenues and expenses of our international operations generally are denominated in localcurrencies. Accordingly, we are subject to exchange rate fluctuations between such local currencies andthe U.S. dollar. These exchange rate fluctuations subject us to currency translation risk with respect tothe reported results of our international operations. There can be no assurance that we will be able toreduce the currency risks associated with our international operations. We manage our exposure tochanges in foreign currency exchange rates through our normal operating and financing activities and,when deemed appropriate, with derivative financial instruments. There is no assurance that we willcontinue to use such financial instruments in the future or that any such use will be successful inmanaging or controlling foreign currency risks.

We have experienced and may continue to experience material impacts to revenues and earningsdue to fluctuations in foreign currency rates, and in addition, these impacts may cause materialfluctuations in our revenues and earnings from period to period. Significant strengthening or weakeningof the U.S. dollar against currencies like the Great Britain Pound and the Euro may materially impactour revenue and profits. As we continue to expand our presence in India, we will have increasedexposure to fluctuations between the Indian Rupee and the U.S. dollar. In addition, we havetransactions with clients, as well as inter-company transactions between our subsidiaries, that crosscurrencies and expose us to foreign currency gains and losses. These types of events are difficult topredict and may recur.

Our credit facility, an asset-based facility, limits our operational and financial flexibility.

We have an asset-based revolving line of credit of up to $60 million, with the amount available forborrowing at any time determined based on a valuation of our eligible accounts receivable. As ofDecember 31, 2014, we had $11.4 million of borrowings outstanding under our revolving line of credit.Any borrowings we make under our credit facility are secured by liens on substantially all of our assets.

We are dependent on our asset-based revolving credit facility to meet working capital andoperational requirements, and access to our asset-based facility is dependent on, among other things,the borrowing base valuation of our eligible accounts receivable and the absence of a default under thecredit agreement. The amount available for borrowing under the credit facility could be significantlyreduced if there is a reduction in our eligible accounts receivable due to poor economic conditions,operational performance, or other factors. Any loss or material reduction of our ability to access fundsunder the credit facility could materially and negatively impact our liquidity.

The credit agreement includes, among other provisions, specific limitations on our ability to takecertain actions, which include, among others, our ability to incur indebtedness or liens, makeinvestments, issue guarantees, enter into certain mergers, dispositions, acquisitions, liquidations ordissolutions, issue additional securities, pay dividends, make loans and advances, and enter intotransactions with affiliates.

A default, if not waived or cured by amendment, could cause our debt to become immediately dueand payable and terminate our ability to draw upon the funds under the credit agreement. We may notbe able to repay our debt or borrow sufficient funds to refinance it, and even if new financing isavailable, it may not be on terms acceptable to us. This could materially adversely affect our results ofoperations and financial condition. Additionally, if we needed to obtain a waiver under, or anamendment to, the credit agreement in the future, or if we seek other financing, if available, our costof borrowing could increase significantly.

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Our operations are vulnerable to disruptions that may impact our results of operations and from which wemay not recover.

As a services business, our operations around the world are highly dependent upon our employees,independent contractors, and service providers being able to effectively serve our clients. That abilitymay be impacted by many types of events that impact the people themselves or limit access to facilitiesor technology required to perform work. Examples of such events include severe weather, pandemics,natural disasters, infrastructure outages, terrorist attacks, governmental actions, political or economicinstability, civil unrest, or the threat or perception that such events might occur. In such circumstances,our business continuity and disaster recovery plans may not be effective. In any such event, our resultsof operations could be adversely affected. In addition to the risk that we may not be able to serve ourclients, we may be unable to protect our employees or facilities from harm. Where we have facilitieswith concentrations of employees (for instance, in several cities in the US, Europe, and India), our riskof disruption that materially impacts our results of operations may be higher. Insurance, if available fora given disruptive event, may be inadequate to compensate for the losses involved. If a disruptioncontinues for an extended period of time, or if a short-term disruption renders a material portion ofour operations ineffective for an extended period of time, our business may suffer material andpotentially irreparable harm.

Our insurance policies may not fully cover all losses we may incur.

Although we attempt to limit our liability for damages arising from negligent acts, errors oromissions through contractual provisions, the limitations of liability included in our contracts may notfully protect us from liability or damages and may not be enforceable in all instances. In addition, notall of our contracts may limit our exposure for certain liabilities, such as claims of third parties forwhich we may be required to indemnify our clients. Although we have general liability insurancecoverage, this coverage may not continue to be available on terms reasonable to us or in sufficientamounts to cover one or more large claims, and our insurers may disclaim coverage as to any futureclaim. The successful assertion of one or more large claims against us that are excluded from ourinsurance coverage or that exceed our available insurance coverage, or changes in our insurancepolicies (including premium increases or the imposition of large deductible or co-insurancerequirements), could have a material adverse effect on our business, results of operations, financialcondition and cash flows.

We might not be successful at identifying, acquiring, or integrating businesses or entering into joint ventures,which could have a material adverse effect on our business and financial results.

In the past, we have made strategic and targeted acquisitions and joint ventures intended toenhance or add to our offerings of services and solutions, or to enable us to expand in certaingeographic and other markets. In order to compete in our industry, we anticipate that we may, fromtime to time, in the future acquire additional businesses or enter into additional joint ventures that webelieve would provide a strategic fit with our business. Potential issues associated with acquisitions andjoint ventures could include, among other things: our ability to identify suitable acquisitions and jointventures; our ability to offer potential acquisition targets and joint ventures competitive transactionterms; our ability to complete targeted transactions; our ability to realize the anticipated benefits orcost savings as a result of the acquisition or joint venture; diversion of management’s attention; ourability to successfully integrate our businesses with the business of the acquired company; assimilating,motivating, recruiting and retaining key employees; potential significant costs and expenses and chargesto earnings; conforming standards, controls, procedures and policies, business cultures andcompensation structures among our company and the acquired company; consolidating and streamliningsales, marketing and corporate operations; potential exposure to unknown liabilities of acquiredcompanies; loss of key employees and customers of the acquired business; and managing tax costs or

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inefficiencies associated with integrating our operations following completion of an acquisition or entryinto a joint venture. In addition, by nature, joint ventures involve a lesser degree of control over theoperations of the joint venture business, and particularly if we were to enter into such business in aminority position. If an acquisition or joint venture is not successfully completed or integrated into ourexisting operations, our business and financial results could be materially adversely impacted.

We may require substantial additional capital to support our growth, and this capital may not be available tous on acceptable terms, if at all.

We may require additional capital to support our business growth, including our need to developnew services and products, enhance our operating infrastructure or acquire complementary businessesand technologies. In the event we desire to obtain additional funding, we may not be able to secureadditional equity or debt financing on favorable terms, if at all. If we are unable to obtain additionalcapital on terms acceptable to us when needed, we may not be able to pursue our growth strategy, andour business and operating results could suffer.

We could incur additional losses due to further impairment in the carrying value of our goodwill.

We have recorded a significant amount of goodwill on our consolidated balance sheet as a resultof numerous acquisitions. At December 31, 2014, the carrying value of our goodwill was $267.6 million.The carrying value of goodwill represents the fair value of an acquired business in excess of identifiableassets and liabilities as of the acquisition date. We are required to test goodwill for impairmentannually and do so during the second quarter of each year, as well as on an interim basis to the extentthat factors or indicators become apparent that could reduce the fair value of any of our reportingunits below its book value. Such factors requiring an interim test for goodwill impairment include, butare not limited to, financial performance indicators such as negative or declining cash flows or adecline in actual or planned revenue or earnings and a sustained decrease in share price. Our cash flowestimates involve projections that are inherently subject to change based on future events. A significantdownward revision in the fair value of one or more of our business units that causes the carrying valueto exceed the fair value could cause goodwill to be considered impaired, and could result in a non-cashimpairment charge in our consolidated statement of operations.

We have recorded several goodwill impairment charges in the past. The forecasts utilized in thediscounted cash flow analysis as part of our impairment test assume future revenue and profitabilitygrowth in each of our divisions during the next five years and beyond. If our operating divisions cannotobtain, or we determine at a later date that we no longer expect them to obtain the projected levels ofprofitability, future goodwill impairment tests may also result in an impairment charge. There can beno assurances that our operating divisions will be able to achieve our estimated levels of profitability.We cannot be certain that goodwill impairment will not be required during future periods.

We depend on contracts with various public sector agencies for a significant portion of our revenue and, if thespending policies or budget priorities of these agencies change, we could lose revenue.

In 2014, approximately 12% of our total revenue was from public sector clients, including state,local, and foreign governments and agencies. Such programs can be modified or amended at any timeby acts of the governments or agencies involved. Moreover, a number of state and local governmentsand agencies are suffering from significant budget shortfalls, which may result in curtailment ofspending on consulting and technology services. Many contracts with public sector clients containprovisions and are subject to laws and regulations that provide government clients with rights andremedies not typically found in commercial contracts. Among other things, governments may cancelmulti-year contracts if funds become unavailable during the term of the engagement. Cancellation orreduction in price or scope could limit our ability to recover incurred costs, reimbursable expenses and

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profits on work completed prior to the termination. If insufficient funding is appropriated to thegovernment entity to cover termination costs, we may not be able to fully recover our investments.

Unfavorable government audits could require us to adjust previously reported operating results, to foregoanticipated revenue and subject us to penalties and sanctions.

Although we sold our Federal division in 2012, we remain responsible for any audits related tocertain engagements for the US federal government performed prior to the sale. The various agenciesthat our Federal division contracted with generally have the right to audit and review past work. Aspart of that process, the government agency could review our performance on the contract, our pricingpractices, our cost structure, and our compliance with applicable laws, regulations, and standards. Anysuch audit could result in a substantial adjustment to our previously reported operating results. Forexample, any costs that were originally reimbursed could be subsequently disallowed, one consequenceof which could be refunding cash collected in the past.

If a government audit uncovers improper or illegal activities by us, or we otherwise determine thatthese activities have occurred, we may be subject to civil and criminal penalties and administrativesanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines andsuspension or disqualification from continuing to do business, or bidding on new business, withgovernments in various jurisdictions.

We have adopted anti-takeover defenses that could make it difficult for another company to acquire control ofCiber or limit the price investors might be willing to pay for our stock, thus affecting the market price of oursecurities.

We have adopted a Rights Agreement, commonly known as a ‘‘poison pill,’’ under which eachshareholder of the Company holds one share purchase right, which we refer to as a ‘‘Right,’’ for eachshare of Company common stock held. The Rights become exercisable upon the occurrence of certainevents and may make the acquisition of our Company more difficult and expensive. In addition, ourcertificate of incorporation and bylaws each contain provisions that may make the acquisition of ourCompany more difficult without the approval of our board of directors, including a provision that givesour board of directors the ability to issue preferred stock and determine the rights and designations ofthe preferred stock at any time without shareholder approval. The rights of the holders of our commonstock will be subject to, and may be adversely affected by, the rights of the holders of any preferredstock that may be issued in the future. The issuance of preferred stock by our board of directorspursuant to our certificate of incorporation could have the effect of making it more difficult for a thirdparty to acquire, or of discouraging a third party from attempting to acquire, a majority of theoutstanding voting stock of Ciber.

In addition, the staggered terms of our board of directors could have the effect of delaying ordeferring a change in control because it is not possible for shareholders to replace all of the membersof the board of directors in a single election. Our board of directors is divided into three classes, witheach class serving for three years between elections. As a result, only approximately 1⁄3 of the board ofdirectors may be replaced at any given regular, annual meeting of the shareholders.

The above factors and certain provisions of the Delaware General Corporation Law may have theeffect of deterring hostile takeovers or otherwise delaying or preventing changes in the control ormanagement of Ciber. These provisions could limit the price that investors might be willing to pay inthe future for our securities and as a result, the price of our securities could decline. In addition, theseprovisions could prohibit, discourage or adversely affect transactions in which our shareholders mightotherwise be offered a premium over the then-current market price for their Ciber securities.

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Institutional shareholders hold a significant amount of our common stock and these shareholders may haveconflicts of interests with the interests of our other shareholders and may vote their shares in a way that isadverse to the interests of our other shareholders.

Institutional investors own or control approximately 26% of the voting power of our commonstock. The interests of these institutional shareholders may differ from our other shareholders inmaterial respects. As an example, these institutional investors may have an interest in our pursuingacquisitions, divestitures, financings or other transactions that, in their judgment, could enhance theirinvestments in Ciber, even though such transactions might involve risks to other shareholders. Theseinstitutional shareholders, or their affiliates may be in the business of making or advising oninvestments in companies, and may from time to time in the future, acquire interests in, or provideadvice to, businesses that directly or indirectly compete with our business or our customers or suppliers.These investors may also pursue acquisition opportunities that may be complementary to our businessand, as a result, those acquisition opportunities may not be available to us, which could materiallydiffer from the interests of our other shareholders.

This concentration of voting power of our common stock may make it difficult for our othershareholders to approve or defeat matters that may be submitted for action by our shareholders,including the election of directors and amendments to our Certificate of Incorporation or Bylaws. Thisalso may have the effect of deterring, delaying, or preventing a change in control of Ciber, even whensuch a change in control could benefit our other shareholders. These institutional shareholders mayhave the power to exert significant influence over our affairs in ways that may be adverse to theinterests of our other shareholders.

The outcome of litigation in which we are involved is unpredictable and an adverse decision in any suchmatter could subject us to damage awards and lower the market price of our common stock.

From time to time and in the ordinary course of our business, we are a party to litigation matterssuch as those described in Part II Item 1, ‘‘Legal Proceedings’’ of this Annual Report on Form 10-K.All such legal proceedings are inherently unpredictable, and the outcome can result in excessiveverdicts and/or injunctive relief that may affect how we operate our business or we may enter intosettlements of claims for monetary damages. Litigation is costly, time-consuming and disruptive tonormal business operations. These and any other future disputes, litigations, investigations,administrative proceedings or enforcement actions we may be involved in may divert management’stime and attention that would otherwise be used to benefit our operations, result in negative publicityand harm our customer or supplier relationships.

Although we intend to contest such matters vigorously, we cannot assure you that their outcomewill be favorable to us. An adverse resolution of any such matter in the future, including the results ofany amicable settlement, could subject us to material damage awards or settlement payments orotherwise materially harm our business. For some complaints filed against us, we are currently unableto estimate the amount of possible losses that might be incurred should these legal proceedings beresolved against us.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our principal corporate office is located at 6363 South Fiddler’s Green Circle, Suite 1400,Greenwood Village, Colorado 80111, where our corporate headquarters and other Colorado operationsoccupy office space under a lease that expires in December 2018. Generally, we provide our services at

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client locations and therefore, our office locations are primarily used for sales and other administrativefunctions.

At December 31, 2014, we had lease obligations for approximately 517,000 square feet of officespace in 50 locations. Approximately 68,000 square feet of these lease obligations was either subleasedor available for sublease as of December 31, 2014. We own one piece of property in the UnitedKingdom that is approximately 11,000 square feet. We believe our facilities are adequate for ourcurrent level of operations.

Please see Note 15 of our consolidated financial statements for information on offices that wereclosed or consolidated as a result of our restructuring activities.

Item 3. Legal Proceedings

We are subject to various claims and litigation that arise in the ordinary course of business. Thelitigation process is inherently uncertain. Therefore, the outcome of such matters is not predictable.

As previously reported, we are engaged in legal proceedings in Germany in connection with ouracquisition of a controlling interest in Novasoft AG (now known as Ciber AG) in 2004. In August 2006,we completed a buy-out of the remaining minority shareholders of Novasoft. Certain of those formerminority shareholders challenged the adequacy of the buy-out consideration by initiating a review bythe district court in Mannheim, Germany. The court made a determination in 2013 which is now underappeal by the plaintiffs. Based on information known to us, we have established a reserve that webelieve is reasonable. We are unable to predict the outcome of this matter.

As previously reported, a lawsuit titled CamSoft Data Systems, Inc. v. Southern Electronics, et al.,was filed initially in October 2009 in Louisiana state court against numerous defendants, includingCiber. The lawsuit was subsequently removed to federal court in the Middle District of Louisiana andthe complaint was amended to include additional defendants and causes of action including antitrustclaims, civil RICO claims, unfair trade practices, trade secret, fraud, unjust enrichment, and conspiracyclaims. The suit involves many of the same parties involved in related litigation in the state court inNew Orleans, which was concluded in 2009 when Ciber settled the New Orleans suit with the plaintiffs,Active Solutions and Southern Electronics, who were CamSoft’s former alleged joint venturers and arenow co-defendants in the current lawsuit. Ciber is vigorously defending the allegations. Proceedings inthe federal appellate courts concluded in January 2015 with the matter remanded back to state court.Based on information known to us, we have established a reserve that we believe is reasonable. We areunable to predict the outcome of this litigation.

As previously reported, in February 2012, a purported verified shareholder derivative lawsuit, Seniv. Peterschmidt. et al., was filed in the United States District Court for the District of Colorado againstseveral of our current and former officers and our then-current board of directors. This complaintgenerally alleged that the various defendants breached their fiduciary duties of good faith, fair dealing,loyalty, due care, reasonable inquiry, oversight, and supervision by approving the issuance of allegedlyfalse statements that misrepresented material information about the finances and operations of theCompany. On March 22, 2013, the Court dismissed this complaint with leave to amend. On April 26,2013, plaintiff filed an amended complaint that largely made the same claims as the original complaint.In February 2014, the Court dismissed the amended complaint with leave to amend. Plaintiff filed asecond amended complaint and defendants filed a motion to dismiss the second amended complaint inMarch 2014. In November 2014, a federal magistrate judge recommended that the defendants’ motionto dismiss be granted. The plaintiff did not file any objection. We await the decision of the Court touphold the magistrate judge’s recommendation. We are unable to predict the outcome of this litigation.

In March 2012, a shareholder, Valerie Denny, made a litigation demand on the board of directorsto investigate certain allegations and bring suit against the directors and certain current and former

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executive officers of the Company. In response, the board of directors formed an IndependentCommittee to investigate the claims. In December 2012, after the Independent Committee completedits investigation, it reported its findings to the board of directors. Based upon the IndependentCommittee’s findings that Denny’s claims were without merit, the board of directors formally refusedthe demand. In February 2014, Denny filed a purported verified shareholder derivative lawsuit, Dennyv. Peterschmidt, et al., in Colorado State court, Arapahoe County, against certain current and formerofficers and directors. This complaint generally made the same allegations as set out in Denny’s March2012 demand. The Complaint alleged that between December 15, 2010, and August 3, 2011, thedefendants committed breaches of fiduciary duty that caused losses to Ciber’s reputation and goodwill.The defendants were alleged to have breached their fiduciary duties by disseminating inaccurate andincomplete information about Ciber’s financial results and business prospects, failing to maintaininternal controls, and failing to properly oversee and manage the Company. Denny also made claims ofunjust enrichment and insider trading. In March 2014, Defendants filed a motion to stay the actionpending resolution of the federal derivative action (Seni v. Peterschmidt), as well as motions to dismissthe action, and an answer to the complaint. In response to those motions, Denny agreed to stay thecase. The court therefore issued an order staying the action on March 24, 2014. We intend tovigorously defend against the claims. We are, however, unable to predict the outcome of this litigation.

Item 4. Mine Safety Disclosures

Not applicable.

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Part II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchasesof Equity Securities

Market Information, Holders and Dividends

Our common stock is listed on the New York Stock Exchange under the symbol ‘‘CBR.’’ The tablebelow sets forth, for the periods indicated, the low and high sales price per share of our common stock.

Price Range

Low High

Fiscal 2013First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.00 4.99Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.32 4.98Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.17 3.95Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.08 4.30

Fiscal 2014First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.59 4.91Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.10 5.09Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.31 5.05Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.84 3.67

On February 9, 2015, the closing price of our common stock on the NYSE was $3.89 and therewere 2,407 registered shareholders of record.

Our policy is to retain our earnings to support the growth of our business. Accordingly, we havenever paid cash dividends on our common stock. In addition, we are restricted by our credit agreementin the amount of cash dividends that we can pay. The payment of any future dividends will be at thediscretion of our board of directors and subject to the credit agreement and will depend upon, amongother things, future earnings, operations, capital requirements, our general financial condition andcontractual restrictions.

Recent Sales of Unregistered Securities and Use of Proceeds from Registered Securities

None.

Purchases of Equity Securities by the Issuer

The following table sets forth information concerning our repurchases of Ciber common stock forthe fourth quarter ended December 31, 2014:

Total numberof shares Average price paid

Period purchased(1) per share

October 1 to October 31 . . . . . . . . . . . . . . . . . . . . . . 5,879 $3.25November 1 to November 30 . . . . . . . . . . . . . . . . . . 14,757 $3.13December 1 to December 31 . . . . . . . . . . . . . . . . . . . 109,463 $3.28

Total: October 1 through December 31 . . . . . . . . . . . 130,099 $3.26

(1) All shares were purchased to satisfy minimum tax withholdings for employee stock plans.No shares were purchased as part of our publicly announced share buy-back plan.

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On December 11, 2014, we announced a plan to buyback up to $10 million shares of Ciber stockon the open market. The program has no minimum share repurchase amounts and there is no fixedtime period under which any share repurchases must take place. As of December 31, 2014, no shareshad been repurchased under this plan.

Item 6. Selected Financial Data

We have derived the selected consolidated financial data presented below, as adjusted fordiscontinued operations of our Federal division, a portion of our information technology outsourcingpractice, and our Russian operations, from our Consolidated Financial Statements and the relatedNotes. This information should be read in conjunction with ‘‘Management’s Discussion and Analysis ofFinancial Condition and Results of Operations’’ and our Consolidated Financial Statements and relatedNotes, included under ‘‘Financial Statements and Supplementary Data’’ of this Annual Report onForm 10-K.

As of and for the Year Ended December 31,

2014(1) 2013(1) 2012(1) 2011(2) 2010(2)

(In thousands, except per share amounts)

Statement of Operations Data:Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $863,607 $877,293 $865,597 $888,386 $872,694Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222,666 223,057 223,478 224,299 224,656Selling, general and administrative expenses . . . . . 206,040 205,615 202,185 216,867 211,654Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . — — — 16,300 82,000Restructuring charge . . . . . . . . . . . . . . . . . . . . . . 26,232 16,923 7,981 — —Operating income (loss) from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,798) 519 12,668 (10,402) (72,211)Net loss from continuing operations . . . . . . . . . . . (18,757) (7,607) (4,073) (52,351) (54,665)Loss from discontinued operations, net of income

tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (792) (6,924) (10,009) (14,881) (23,025)Net loss attributable to Ciber, Inc. . . . . . . . . . . . . $ (19,604) $(14,520) $(14,627) $(67,261) $(77,160)

Basic and diluted loss per share attributable toCiber, Inc.:

Continuing operations . . . . . . . . . . . . . . . . . . . . . $ (0.24) $ (0.10) $ (0.06) $ (0.73) $ (0.78)Discontinued operations . . . . . . . . . . . . . . . . . . . (0.01) (0.09) (0.14) (0.21) (0.33)Basic and diluted loss per share attributable to

Ciber, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.25) $ (0.19) $ (0.20) $ (0.94) $ (1.11)

Weighted Average Shares Outstanding (Basic andDiluted) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,593 74,846 73,166 71,831 69,626

Balance Sheet Data:Working capital . . . . . . . . . . . . . . . . . . . . . . . . . . $ 85,104 $ 85,928 $105,468 $ 92,818 $132,364Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535,283 557,818 580,471 625,070 722,364Long-term debt, current portion . . . . . . . . . . . . . . — 53 6,337 25,571 10,473Long-term debt, non-current portion . . . . . . . . . . 11,402 — 19,790 41,380 77,879Total shareholders’ equity . . . . . . . . . . . . . . . . . . $326,076 $353,058 $358,953 $357,007 $419,500Shares outstanding, net of treasury . . . . . . . . . . . . 78,697 75,785 73,779 72,568 70,124

(1) During 2014, 2013 and 2012 we incurred restructuring charges of $26.2 million, $16.9 million and$8.0 million, respectively. Please Refer to Note 15 to our consolidated financial statements foradditional information on our restructuring plans.

(2) During the second quarters of 2011 and 2010, we recorded goodwill impairment charges of$16.3 million and $82.0 million, respectively, to write-down the goodwill associated with certainsegments in our continuing operations. The goodwill impairment charges in our results from

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continuing operations resulted in a $4.5 million and a $22.6 million deferred tax benefit in thesecond quarters of 2011 and 2010, respectively. Additionally, during the second quarter of 2011, weincurred a $29.1 million non-cash charge related to a valuation allowance recorded against ourUnited States deferred tax assets. For more information about the goodwill impairment chargesand the deferred tax asset valuation allowance, please refer to Note 7 and Note 12, respectively.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with our Consolidated FinancialStatements and related Notes included elsewhere in this Annual Report on Form 10-K. This discussion andanalysis also contains forward-looking statements and should also be read in conjunction with thedisclosures and information contained in ‘‘Disclosure Regarding Forward-Looking Statements’’ and ‘‘RiskFactors’’ in this Annual Report on Form 10-K. References to ‘‘we,’’ ‘‘our,’’ ‘‘us,’’ ‘‘the Company,’’ or ‘‘Ciber’’in this Annual Report on Form 10-K refer to Ciber, Inc. and its subsidiaries. All references to years, unlessotherwise noted, refer to our fiscal year, which ends on December 31.

We use the phrase ‘‘in local currency’’ to indicate that we are comparing certain financial results afterremoving the impact of foreign currency exchange rate fluctuations, thereby allowing for the comparison ofbusiness performance between periods. Financial results that are ‘‘in local currency’’ are calculated byrestating current period activity into U.S. dollars using the comparable prior period’s foreign currencyexchange rates. This approach is used for all results where the functional currency is not the U.S. dollar.

Business and Industry Overview

Ciber is a leading global information technology (‘‘IT’’) services company founded in 1974 with40 years of proven IT experience and a wide range of technology expertise. Ciber has the infrastructureand expertise to deliver IT services on a global scale. Focusing on the client, we take a personalizedapproach that includes building long-term relationships via the creation of IT solutions for the client,and implementing business strategies that reflect anticipated trends. We are committed to deliveringquality solutions precisely configured to our clients’ needs and achieving the highest level of customersatisfaction and self-assessed customer delight. Our goal is delivering business value to our clients.

Ciber operates globally, reporting resources in two segments: North America and International.During the second quarter of 2013, we closed down our Russian operations. In 2012 we sold ourFederal division and the infrastructure portion of our information technology outsourcing practice. As aresult, these businesses are now reported as discontinued operations within our financial statements andaccordingly, our financial statements have been reclassified for all periods presented in this AnnualReport on Form 10-K to conform to the current presentation. Additionally, discussions throughout thisAnnual Report on Form 10-K exclude the discontinued operations, unless otherwise noted.

Our reportable operating segments as of December 31, 2014, consisted of International and NorthAmerica. Our Ciber International segment is organized by country and primarily consists of countriesin Western Europe and the Nordic region. The four largest territories are the Netherlands, Germany,the United Kingdom, and Norway. Our North America segment is organized into practices.

We recognize the majority of our services revenue under time-and-material contracts as hours andcosts are incurred. Under fixed-price contracts, which currently make up approximately 15-20% of ourservices revenue, our revenue is fixed under the contract, while our costs to complete our obligationsunder the contract are variable. As a result, our profitability on fixed-price contracts can varysignificantly and occasionally can even be a loss. Changes in our services revenue are primarily afunction of hours worked on revenue-generating activities and, to a lesser extent, changes in ouraverage rate per hour and changes in contract mix. Hours worked on revenue-producing activities varywith the number of consultants employed and their utilization level. Utilization represents thepercentage of time worked on revenue-producing engagements divided by the standard hours available

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(i.e., 40 hours per week). With time-and-materials contracts, higher consultant utilization results inincreased revenue; however, with fixed-price contracts, it may result in higher costs and lower grossprofit margins because our revenue is fixed. We actively manage both our number of consultants andour overall utilization levels. If we determine we have excess available resources that we cannot placeon billable assignments in the near future, we consider reducing those resources.

The hourly rate we charge for our services varies based on the level of the consultant involved, theparticular expertise of the consultant and the geographic area. Our typical time-and-materials hourlyrates range from $20 to $200 per hour. For projects which are fixed-price or level-of-effort, our revenueis not directly based on labor hours incurred and our realized rate per hour will vary significantlydepending on success on such projects, as well as the blend of resources used to deliver projects.

Selling, general and administrative (‘‘SG&A’’) costs as a percentage of revenue vary by businesssegment. Approximately 60% of our overall SG&A expenses are typically for personnel costs for ouroperations management, sales and recruiting personnel and administrative staff, as well as ourcorporate support staff and executive management personnel. These costs are generally notimmediately affected by changes in revenue, however management is constantly evaluating such costs inrelation to changes in business conditions. In many foreign countries, short-term personnel actions areprohibited and/ or may require significant payments to such impacted employees. As we bid on largerand longer-term projects, the sales cycle and related sales costs for such opportunities have beenincreasing.

Other revenue includes sale of third-party software licenses and related support agreements andcommissions on sales of IT products. Our sales of software generally involve relationships with thesoftware vendors and are often sold with implementation services. Depending on the mix of thesebusiness activities, gross profit margin on other revenue will fluctuate.

Representing approximately half of our consolidated revenues, our International division operatesprimarily in Western Europe, with our largest operations located in Germany, the Netherlands, theU.K. and Norway. These operations transact business in the local currencies of the countries in whichthey operate. In recent years, approximately 50% to 60% of our International division’s revenue hasbeen denominated in Euros, 15% to 20% has been denominated in Great Britain Pounds (‘‘GBP’’) andthe balance has come from a number of other European currencies. Changes in the exchange ratesbetween these foreign currencies and the U.S. dollar affect the reported amounts of our assets,liabilities, revenues and expenses. For financial reporting purposes, the assets and liabilities of ourforeign operations are translated into U.S. dollars at current exchange rates at period end and revenuesand expenses are translated at average exchange rates for the period.

Discontinued Operations

During the second quarter of 2013, we closed down our Russian operations and met the criteriafor this business to be reported as a discontinued operation. Accordingly, the operations and cash flowswere removed from our consolidated operating results. In connection with the substantial liquidation ofour Russian investment in the fourth quarter of 2013, we released the related cumulative translationadjustment of approximately $1 million from accumulated other comprehensive income into loss fromdiscontinued operations. In 2012, we sold substantially all of the assets and certain liabilities of ourFederal division as well as certain contracts and related property and equipment and certain otherassets associated with our information technology outsourcing (‘‘ITO’’) practice, which have both beenpreviously reported as discontinued operations. In connection with the sale of the Federal division andITO practice, we retained certain assets and liabilities. Some of these items, including certain possiblecontingent liabilities, may not be settled for several years. Accordingly, adjustments to such items, aswell as administrative expenses associated with these discontinued businesses, are recorded through ourresults of discontinued operations.

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To report the results of discontinued operations, we are required to adjust the reported results ofthe business sold or shut down, from those previously reported as part of operating income byreporting segment. These adjustments eliminate corporate overhead allocations and adjust for costs ofthe business that will not be recognized on a going-forward basis. These adjustments have been madefor all periods presented.

The following table summarizes the operating results of the discontinued operations included inthe Consolidated Statements of Operations.

Year Ended December 31,

2014 2013 2012

(In thousands)

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 5,424 $ 90,777Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792 11,177 93,319

Operating loss from discontinued operations . . . . . . . . . . . . . . . . . . . . (792) (5,753) (2,542)Interest and other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,008 90

Loss from discontinued operations before income taxes . . . . . . . . . . . . (792) (6,761) (2,632)Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 211 808

Loss from discontinued operations, net of income tax . . . . . . . . . . . . . . (792) (6,972) (3,440)

Gain (loss) on sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 48 (7,256)Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (687)

Gain (loss) on sale, net of income taxes . . . . . . . . . . . . . . . . . . . . . . . . — 48 (6,569)

Total loss from discontinued operations, net of income taxes . . . . . . . $(792) $(6,924) $(10,009)

Restructuring

On July 25, 2014, we approved a restructuring plan focused on the implementation of ago-to-market model, realigning the organization and improving our near and offshore delivery mix(‘‘the 2014 Plan’’). The 2014 Plan commenced in the third quarter of 2014 and we expect it to becompleted in the third quarter of 2015. We expect the 2014 Plan to impact approximately 280 people.We estimate the total amount of the restructuring charges for the 2014 Plan will be approximately$27 million, substantially all of which will be settled in cash. The total estimated restructuring expensesinclude approximately $20 million related to employee severance and related benefits andapproximately $7 million related to professional fees, office closures and other expenses. We expect the2014 Plan will result in annualized pre-tax net savings from these actions of approximately $18 millionthat will be fully realized starting in the second half of 2015 and each year thereafter.

On July 30, 2013, we approved a restructuring plan primarily focused on our Internationaloperations (‘‘the 2013 Plan’’). The goal of the 2013 Plan was to improve utilization, strategically engageour lower-cost off-shore and near-shore resources, and centralize management of administrativefunctions in key markets to leverage shared services functions. The actions of this plan impactedapproximately 250 employees. We have completed all activities associated with the 2013 Plan. Thecharges associated with the 2013 Plan were substantially all related to personnel severance and relatedemployee benefit costs.

On November 5, 2012, we approved a company restructuring plan (‘‘the 2012 Plan’’). In the thirdquarter of 2013, all restructuring actions associated with this plan were completed. Although we havecompleted all activities associated with the 2012 Plan, our lease-related office closure costs are subjectto estimate and as such our actual restructuring charges may differ from our current estimates. In thesecond and fourth quarter of 2014, we incurred additional charges related to adjusting our sublease

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estimates. Restructuring liabilities for office closures are recorded at estimated fair value, including anestimate of sublease income which is subject to adjustment in future periods if assumptions change.

Results of Operations—Comparison of the Years Ended December 31, 2014 and 2013—Consolidated

The following tables and related discussion provide information about our consolidated financialresults of continuing operations for the periods presented.

The following table sets forth certain Consolidated Statement of Operations data in dollars andexpressed as a percentage of revenue:


2014 2013

(Dollars in thousands)

Consulting services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $812,660 94.1% $830,505 94.7%Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,947 5.9 46,788 5.3

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $863,607 100.0% $877,293 100.0%

Gross profit—consulting services . . . . . . . . . . . . . . . . . . . . . $199,936 24.6% $203,734 24.5%Gross profit—other revenue . . . . . . . . . . . . . . . . . . . . . . . . . 22,730 44.6 19,323 41.3

Gross profit—total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222,666 25.8 223,057 25.4

SG&A costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206,040 23.9 205,615 23.4Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . 192 — — —Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,232 3.0 16,923 1.9

Operating income (loss) from continuing operations . . . . . . . (9,798) (1.1) 519 0.1

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,639) (0.2) (2,539) (0.3)Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . (1,385) (0.2) 841 0.1

Loss from continuing operations before income taxes . . . . . . . (12,822) (1.5) (1,179) (0.1)Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,935 0.7 6,428 0.7

Net loss from continuing operations . . . . . . . . . . . . . . . . . . . $ (18,757) (2.2)% $ (7,607) (0.9)%

Percentage of revenue columns may not foot due to rounding.

Revenue by segment from continuing operations was as follows:

Year EndedDecember 31,

2014 2013 % change

(In thousands)

International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $441,943 $456,424 (3.2)%North America . . . . . . . . . . . . . . . . . . . . . . . . . . . 422,680 423,340 (0.2)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,703 3,357 (19.5)Inter-segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,719) (5,828) n/m

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . $863,607 $877,293 (1.6)%

n/m = not meaningful

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Revenues. Total revenues decreased $13.7 million, or 1.6%, for 2014 compared with 2013. On alocal currency basis, revenue decreased 1.6% between the comparable years. This decrease wasattributable to the following:

• During 2014, International revenues decreased $14.5 million, or 3.2%, overall, and 3.3% in localcurrency. This decline was primarily a result of decreased revenue in the Netherlands due to anoverall increase in employee attrition in the first half of 2014 and a soft revenue pipeline. Thisdecrease was partially offset by solid revenue growth in Germany, which continues to havesuccess in its CMS practice and retail vertical. We also saw growth in Norway.

• North America revenues decreased $0.7 million in 2014. This decrease is primarily due toreduced revenue in our ADM practice as a result of less billable consultants. This decrease waspartially offset by an increase in our Oracle and Infor ISV channels as well as our BusinessConsulting practice. We continue to see growth in our CMS offerings as well.

Gross Profit. Gross profit margin was 25.8% for the year ended December 31, 2014, up from25.4% for the same period in 2013. Gross profit margin for our International business improved as aresult of cost reduction actions in connection with the 2013 Restructuring Plan, and due to a moredisciplined use of subcontractors. North America’s gross margin in 2014 was up compared to 2013 dueto increased margins in certain ISV channels as well as our Business Consulting practice.

Selling, general and administrative costs. Our SG&A costs increased $0.4 million, or 0.2%, to$206.0 million for 2014, from $205.6 million for 2013. International SG&A costs increased compared to2013 due to increased labor costs related to strategic initiatives in one of our ISVs as well as our retailvertical. North America SG&A costs were down due to reduced personnel costs, improved costdiscipline, and lower facilities expense. Our corporate SG&A costs increased mainly as a result ofincreased management salaries related to new global leaders joining Ciber, as well as costs related toour management transition in the second quarter of 2014 and increased IT costs. SG&A costs as apercentage of revenue were 23.9% in 2014, up from 23.4% in 2013.

Operating income. We had an operating loss from continuing operations of $9.8 million in 2014compared to operating income of $0.5 million in 2013. This overall decline was mainly a result ofincreased restructuring charges in 2014.

Operating income from continuing operations by segment was as follows:

Year Ended 2014 2013December 31, % % of % of2014 2013 change revenue* revenue*

(In thousands)

International . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,361 $ 23,390 (17.2)% 4.4% 5.1%North America . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,972 33,511 16.3 9.2 7.9Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 315 (39.0) 7.1 9.4Corporate expenses . . . . . . . . . . . . . . . . . . . . . . . . (41,899) (39,774) (5.3) (4.9) (4.5)

Operating income before amortization andrestructuring . . . . . . . . . . . . . . . . . . . . . . . . . 16,626 17,442 (4.7) 1.9 2.0

Amortization of intangible assets . . . . . . . . . . . . . . (192) — n/m — —Restructuring charges . . . . . . . . . . . . . . . . . . . . . . (26,232) (16,923) (55.0) (3.0) (1.9)

Total operating income (loss) from continuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (9,798) $ 519 (1,987.9)% (1.1)% 0.1%


* International, North America and Other calculated as a % of their respective revenue, all othercalculated as a % of total revenue. Column may not total due to rounding.

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• International operating income decreased to $19.4 million from $23.4 million in 2013. This isprimarily due to lower revenue in the Netherlands as well as higher SG&A costs which were aresult of increased labor costs. However, International did have an improved gross margin in2014, which was partially a result of our 2013 Restructuring Plan.

• North America operating income increased to $39.0 million in 2014 from $33.5 million in 2013.The increase was mostly due to a reduction in SG&A expenses, specifically relating to reducedpersonnel costs, improved cost discipline and lower facilities expenses. North America operatingincome also benefited in 2014 from an increase in gross profit from certain ISV channel and aswell as their business consulting practice.

• Corporate expenses increased $2.1 million primarily due to increased management salariesrelated to new global leaders joining Ciber, as well as costs related to our managementtransition in the second quarter of 2014.

Interest expense. Interest expense decreased $0.9 million during 2014 compared to 2013 due to asignificant reduction in our average borrowings on our ABL facility.

Other income (expense), net. Other expense, net was $1.4 million in 2014 compared to otherincome, net of $0.8 million in 2013. This change was mostly due to foreign exchange gains and losses.

Income taxes. Our tax expense is significantly impacted by the changes in the amount and thegeographic mix of our income and loss. From continuing operations, our income (loss) before incometaxes and our income tax expense is as follows:


2014 2013

(In thousands)

Income (loss) before income taxes:United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1,600) $(3,487)Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,222) 2,308

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(12,822) $(1,179)

Income tax expense:United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,956 $ 3,581Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,979 2,847

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,935 $ 6,428

Due to our history of domestic losses, we have a full valuation allowance for all net U.S. deferredtax assets, including our net operating loss and tax credit carryforwards. As a result, we cannot recordany tax benefits for additional U.S. incurred losses and any U.S. income is offset by a reduction invaluation allowance. Irrespective of our income or loss levels, we continue to record deferred U.S. taxexpense related to tax-basis goodwill amortization. We recorded approximately $4 million of relatedU.S. deferred tax expense in 2014 and expect to record approximately $2.7 million 2015.

The effective rate on our foreign tax expense varies with the mix of income and losses acrossmultiple tax jurisdictions with most statutory tax rates varying from 21% to 34% in 2014. The foreigntax expense was higher than the normal effective rate as the result of establishing a valuation allowanceagainst the deferred tax assets and current year losses of our operations in the Netherlands and therecognition of reserves for certain tax exposure items. In addition, the difference between the effectivetax rate and statutory tax rates resulted from losses in jurisdictions where we received no tax benefitdue to a valuation allowance.

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For interim periods, we base our tax provision on forecasted book and taxable income for theentire year. As the forecast for the year changes, we adjust our year-to-date tax provision. Ourprovision for income taxes is based on many factors and is subject to significant volatility from year toyear.

Results of Operations—Comparison of the Years Ended December 31, 2013 and 2012—Consolidated

The following tables and related discussion provide information about our consolidated financialresults of continuing operations for the periods presented.

The following table sets forth certain Consolidated Statement of Operations data in dollars andexpressed as a percentage of revenue:


2013 2012

(Dollars in thousands)

Consulting services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $830,505 94.7% $819,848 94.7%Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,788 5.3 45,749 5.3

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $877,293 100.0% $865,597 100.0%

Gross profit—consulting services . . . . . . . . . . . . . . . . . . . . . . $203,734 24.5% $204,354 24.9%Gross profit—other revenue . . . . . . . . . . . . . . . . . . . . . . . . . 19,323 41.3 19,124 41.8

Gross profit—total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223,057 25.4 223,478 25.8

SG&A costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205,615 23.4 202,185 23.4Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . — — 644 0.1Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,923 1.9 7,981 0.9

Operating income from continuing operations . . . . . . . . . . . . 519 0.1 12,668 1.5

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,539) (0.3) (5,976) (0.7)Other income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 841 0.1 259 —

Income (loss) from continuing operations before income taxes (1,179) (0.1) 6,951 0.8Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,428 0.7 11,024 1.3

Net loss from continuing operations . . . . . . . . . . . . . . . . . . . . $ (7,607) (0.9)% $ (4,073) (0.5)%

Percentage of revenue columns may not foot due to rounding.

Revenue by segment from continuing operations was as follows:


2013 2012 % change

(In thousands)

International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $456,424 $434,193 5.1%North America . . . . . . . . . . . . . . . . . . . . . . . . . . . 423,340 432,832 (2.2)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,357 3,109 8.0Inter-segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,828) (4,537) n/m

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . $877,293 $865,597 1.4%


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Revenues. Total revenues increased $11.7 million, or 1.4%, for 2013 compared with 2012. In localcurrency, revenue increased 0.4% between the comparable years. This change is attributable to thefollowing:

• During 2013, international segment revenues increased 5.1% overall, but improvedapproximately 3.2% in local currency. Overall, growth was significantly impacted by foreignexchange rates. On a local currency basis, revenue growth was led by the United Kingdom,Germany and Norway, as well as a couple of our smaller territories, all of which experiencedaccelerated growth in the second half of 2013. The increase in revenue in these countries wasdue to significant new clients in 2013, as well as some additional work at existing clients,specifically within our CMS practice. This growth was slightly offset by declines in revenue in theNetherlands, due to a weak IT services market.

• North America revenues decreased $9.5 million or 2.2% during 2013 compared to 2012, asreductions in work levels at some existing clients, especially in our ADM practice, more thanoffset growth in other existing clients, as well as new clients. While our ADM practice declinedin 2013, we experienced some growth in our Business Consulting practice and certain ISVchannels, both of which benefited from several new clients, as well as growth at existing clientsin 2013. Our CMS business continued to grow in 2013, which is partially a result of our ISVsuccesses.

Gross Profit. Gross profit margin was 25.4% for the year ended December 31, 2013, compared to25.8% for 2012. Gross profit margin for our International business declined slightly as savings from ourrestructuring plans were more than offset by an increased use of subcontractors and a decline inutilization. North America gross margin was also down slightly in 2013 compared to 2012. Thisdecrease was a result of margin compression at some of our larger clients, which was partially due topricing pressure in our ADM business.

Selling, general and administrative costs. Our SG&A costs increased $3.4 million, or 1.7%, to$205.6 million for 2013, from $202.2 million for 2012. International SG&A costs increased compared to2012 due to the effects of changes in foreign currency exchange rates, increased labor costs, and anincrease in bad debt. North America SG&A costs were down due to reduced compensation costs andlower office rental expense, which was a result of the closure of offices under our 2012 restructuringplan. See Note 15 to our consolidated financial statements for more information on our restructuringplans. Our corporate SG&A costs increased as a result of higher share-based compensation expense aswell as increased management compensation costs compared with 2012. $2.6 million of these corporatecost increases are a result of our CFO transition in September 2013. SG&A costs as a percentage ofrevenue was 23.4% for both 2013 and 2012.

Operating income (loss). We had operating income from continuing operations of $0.5 million in2013 compared to $12.7 million in 2012. This decrease was primarily a result of increased restructuringcharges in 2013 compared to 2012 and the increased corporate SG&A costs discussed above. For moreinformation on our restructuring changes, see Note 15 of our consolidated financial statements.

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Operating income from continuing operations by segment was as follows:

Year Ended 2013 2012December 31, % % of % of2013 2012 change revenue* revenue*

(In thousands)

International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,390 $ 23,245 0.6% 5.1% 5.4%North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,511 30,169 11.1 7.9 7.0Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 446 (29.4) 9.4 14.3Corporate expenses . . . . . . . . . . . . . . . . . . . . . . . . . (39,774) (32,005) (24.3) (4.5) (3.7)Unallocated results of discontinued operations . . . . . — (562) n/m — (0.1)

Operating income from continuing operationsbefore amortization and restructuring . . . . . . . . 17,442 21,293 (18.1) 2.0 2.5

Amortization of intangible assets . . . . . . . . . . . . . . . — (644) 100.0 — (0.1)Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . (16,923) (7,981) (112.0) (1.9) (0.9)

Total operating income from continuing operations $ 519 $ 12,668 (95.9)% 0.1% 1.5%

* Segments calculated as a % of segment revenue, all other calculated as a % of total revenue

• International operating income increased slightly to $23.4 million in 2013 compared to$23.2 million in 2012. This increase is primarily due to improved revenues, mostly in the secondhalf of the year, which were offset by gross margin reduction from the increased use ofsubcontractors and increased SG&A costs.

• North America operating income increased to $33.5 million in 2013 from $30.2 million in 2012.The increase was due to a reduction in SG&A expenses, specifically reduced compensation costsand restructuring-related reductions in office rental expenses. However, these improvementswere somewhat offset by lower revenues at existing ADM clients and margin compression.

• Corporate expenses increased $7.8 million primarily due to higher stock compensation costs andincreased management compensation expense. Our CFO transition in September 2013contributed to $2.6 million of this increase.

Interest expense. Interest expense decreased $3.4 million during 2013 compared to 2012. Thisdecrease is primarily due to a significant reduction in our average borrowings outstanding, a lowerinterest rate on our credit facility entered into in May 2012, and the write-off of $1.1 million ofcapitalized debt fees that were written off in the second quarter of 2012.

Other income, net. Other income, net was $0.8 million in 2013, compared to $0.3 million in 2012.This increase was due to an increase in interest income as well as foreign exchange gains and losses.

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Income taxes. Our tax expense is significantly impacted by the changes in the amount and thegeographic mix of our income and loss. From continuing operations, our income (loss) before incometaxes and our income tax expense is as follows:


2013 2012

(In thousands)

Income (loss) before income taxes:United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(3,487) $(5,058)Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,308 12,009

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,179) $ 6,951

Income tax expense:United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,581 $ 5,491Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,847 5,533

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,428 $11,024

Due to our history of domestic losses, in 2011 we recorded a full valuation allowance for all netU.S. deferred tax assets, including our net operating loss and tax credit carryforwards. As a result, wecannot record any tax benefits for additional U.S. incurred losses and any U.S. income is offset by areduction in valuation allowance. Irrespective of our income or loss levels, we continue to recorddeferred U.S. tax expense related to goodwill amortization and we recorded approximately $4.6 millionof related U.S. deferred tax expense in 2013.

The effective rate on our foreign tax expense varies with the mix of income and losses acrossmultiple tax jurisdictions with most statutory tax rates varying from 23% to 33% in 2013. The reductionof foreign pre-tax income from continuing operations from 2012 to 2013 is related to an overalldecrease in profitability of the business, including the impact of restructuring costs, and theimplementation of new transfer pricing practices. The foreign tax expense in 2013 is primarily a resultof the mix of income and losses across jurisdictions including losses in certain countries for which notax benefit can be recorded due to full valuation allowances and provisions for uncertain tax provisions.

For interim periods, we base our tax provision on forecasted book and taxable income for theentire year. As the forecast for the year changes, we adjust our year-to-date tax provision. Ourprovision for income taxes is based on many factors and is subject to significant volatility from year toyear.

Liquidity and Capital Resources

At December 31, 2014, we had $85.1 million in working capital, which represented a slightdecrease from $85.9 million at December 31, 2013. Our current ratio was 1.5:1 at both December 31,2014 and December 31, 2013. Our primary sources of liquidity are cash flows from operations, availablecash reserves, and debt capacity under our credit facility. In addition, we may seek to raise additionalfunds through public or private debt or equity financings, if required, though we make no assumptionsthat we could raise additional capital on acceptable terms, or at all. We believe that our cash and cashequivalents, our expected operating cash flow, and our available credit agreement will be sufficient tofinance our working capital needs through at least the next year.

Our balance of cash and cash equivalents was $45.9 million at December 31, 2014, compared to$44.5 million at December 31, 2013. Our domestic cash balances are used daily to reduce ouroutstanding balance on our outstanding borrowings. Typically, most of our cash balance is maintainedby our foreign subsidiaries. From time to time, we may engage in short-term loans from our foreign

35

operations. Our credit agreement also provides for foreign borrowings if needed. If future events,including material changes in estimates of cash, working capital and long-term investment requirements,necessitate that the undistributed earnings of our foreign subsidiaries be distributed, an additionalprovision for income taxes may apply, which could materially affect our future tax expense. Themajority of our cash balance at December 31, 2014 and 2013 was held by our foreign subsidiaries.

Related to the execution of our 2012 restructuring plan, we had cash outlays of approximately$3.5 million during 2014. In the third quarter of 2013, all restructuring actions associated with this planwere completed. However, in the second and fourth quarter of 2014, we incurred additional chargesrelated to adjusting our sublease estimate. Total cash outlays associated with the plan will beapproximately $13 million, $12 million of which has been paid to date.

We had cash outlays of approximately $6.7 million during 2014, related to the 2013 restructuringplan. Total cash outlays for the 2013 Plan were $13 million, all of which has been paid to date.

We had cash outlays of approximately $7.5 million during 2014, related to the 2014 restructuringplan, and we estimate total cash outlays of approximately $26 million.

Cash flows from operating, investing and financing activities, as reflected in our ConsolidatedStatements of Cash Flows, are summarized as follows:


2014 2013 2012

(In thousands)

Net cash provided by (used in) continuingoperations:Operating activities . . . . . . . . . . . . . . . . . . . . . . . $ 1,952 $ 25,215 $ 1,153Investing activities . . . . . . . . . . . . . . . . . . . . . . . . (9,023) (5,213) (3,243)Financing activities . . . . . . . . . . . . . . . . . . . . . . . 12,584 (29,933) (42,956)

Net cash provided by (used in) continuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . 5,513 (9,931) (45,046)

Net cash provided by (used in) discontinuedoperations:Operating activities . . . . . . . . . . . . . . . . . . . . . . . (766) (1,273) (2,830)Investing activities . . . . . . . . . . . . . . . . . . . . . . . . — (313) 37,754

Net cash provided by (used in) discontinuedoperations . . . . . . . . . . . . . . . . . . . . . . . . . . (766) (1,586) 34,924

Effect of foreign exchange rates on cash . . . . . . . . . . (3,372) (2,849) 3,404

Net increase (decrease) in cash and cashequivalents . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,375 $(14,366) $ (6,718)

Operating activities. Cash provided by operating activities from continuing operations was$2.0 million in 2014, compared with $25.2 million and $1.2 million in 2013 and 2012, respectively. Anincrease in our net loss, as well as changes in normal short-term working capital items primarilycontributed to the overall decrease in cash from operations during 2014 as compared to 2013. While in2013, changes in normal short-term working capital items, particularly accounts receivable, primarilycontributed to the overall increase in cash from operations compared to 2012. Our working capitalfluctuates significantly due to changes in accounts receivable (discussed below), as well as due to thetiming of our domestic payroll and accounts payable processing cycles with regard to month-end datesand other seasonal factors. In 2014, we also paid $17.7 million for restructuring-related costs, which wascomprised of severance and real estate-related costs in both our North America and Internationalsegments. In 2013, our cash restructuring payments were $12.3 million and related to severance

36

expenses in our International, North America and corporate segments, and real estate costs primarily inNorth America. During 2014 and 2013, our domestic operations provided (used) ($4.5 million) and$23.0 million, respectively, of cash from continuing operations while our International operationsprovided $6.4 million and $2.2 million, respectively during the same time periods. Typically, theseasonality of our business in many European countries results in negative cash from operations in theearly part of the year with improvements in the second half of the year. Cash flow from Europeanoperations are typically maximized in the fourth quarter.

Changes in accounts receivable have a significant impact on our cash flow. Items that can affectour cash flow accounts receivable include: contractual payment terms, client payment patterns(including approval or processing delays and cash management), client mix (public vs. private),fluctuations in the level of IT product sales and the effectiveness of our collection efforts. Many of theindividual reasons are outside of our control and, as a result, it is normal for our cash flow fromaccounts receivable to fluctuate from period to period, affecting our liquidity.

Total accounts receivable decreased to $173.5 million at December 31, 2014, from $189.4 million atDecember 31, 2013. At December 31, 2014, our total unbilled accounts receivable for costs andearnings in excess of billings totaled $20.0 million, which was an increase of $11.3 million from theprior year. Total accounts receivable day’s sales outstanding (‘‘DSO’’) was 57 days at December 31,2014, compared to 59 days at December 31, 2013, a decrease of 2 days. During 2014, we experienceddecreased DSO domestically and in our International segment as both segments experienced improvedcollection efficiency in 2014 compared to 2013. This collection improvement was partially offset by anincrease in unbilled receivables on fixed-price projects at year end.

Accrued compensation and related liabilities fluctuate from period to period based on the timingof our normal bi-weekly U.S. payroll cycle and the timing of variable compensation payments. Bonusesare typically accrued throughout the year, and paid either quarterly or annually, based on theapplicable bonus program associated with an employee’s role and country in which he or she works. Assuch, bonus accruals can fluctuate from quarter to quarter. Accounts payable and other accruedliabilities typically fluctuate based on when we receive actual vendor invoices and when they are paid.The largest of such items typically relates to vendor payments for IT hardware and software productsthat we resell and payments to services-related subcontractors.

Investing activities. Investing activities are primarily comprised of purchases of property andequipment and cash paid for acquisitions. Spending on property and equipment was $8.2 million during2014, compared with $5.2 million in 2013 and $3.2 million in 2012. Generally, our capital spending isprimarily for technology equipment and software and to support our global employee base, as well asour management and corporate support infrastructure, and for investment in our domestic andoff-shore delivery centers. Such investments will fluctuate from period to period. Investing activitiesfrom discontinued operations for 2012 consisted primarily of net proceeds totaling $33.6 million fromthe sale of our Federal division and $4.5 million from the sale of a portion of our informationtechnology outsourcing practice. On December 11, 2014, we announced a plan to buyback up to$10 million shares of Ciber stock on the open market. The program has no minimum share repurchaseamounts and there is no fixed time period under which any share repurchases must take place. As ofDecember 31, 2014, no shares had been repurchased under this plan.

Financing activities. Typically, our most significant financing activities consist of the borrowingsand payments under our ABL Facility. This primarily fluctuates based on cash provided by, or used in,our domestic operations during the period as the ABL Facility is utilized for U.S. working capitalfluctuations. During 2014, we had net borrowings on our long-term debt of $11.8 million compared tonet payments of $26.2 million and $40.1 million (primarily from the repatriation of $30 million offoreign cash to the U.S. in January 2012 and the sale of our Federal Division in March 2012), in 2013and 2012, respectively. Additionally, in 2014 and 2013 we incurred no debt fees, compared to

37

$3.4 million in 2012. In 2014 and 2013, Ciber repurchased shares to satisfy minimum tax withholdingsfor employee stock plans. We had net cash inflows of $1.5 million and $0.6 million in 2014 and 2013,respectively, for proceeds from employee stock plans, net of the repurchases of shares for minimumemployee tax withholding. In 2012 we reflected a cash inflow of $1.3 million for proceeds fromemployee stock plans. Associated with our 2010 acquisition of Segmenta A/S, during the second quarterof 2013 we paid $7.1 million of contingent consideration, of which $3.4 million is classified as afinancing cash flow and $3.7 million is classified in operating activities. (See Note 3 to our ConsolidatedFinancial Statements for more information.) In the fourth quarters of 2014 and 2013 we paid$0.7 million and $0.8 million, respectively, for payments on the purchase of the noncontrolling interestof one of our foreign subsidiaries. (See Note 1 to our Consolidated Financial Statements for moreinformation.)

Credit Agreement. We have an asset-based revolving line of credit of up to $60 million (the ‘‘ABLFacility’’) with Wells Fargo Bank, N.A. The maximum amount available for borrowing at any timeunder such line of credit is determined according to a borrowing base valuation of eligible accountreceivables, which was $48.6 million at December 31, 2014. The ABL Facility provides for borrowingsin the United States, the Netherlands, the United Kingdom and Germany and matures on May 7, 2017.As of December 31, 2014, we had $11.4 million outstanding under the ABL Facility. We expect ourborrowings to fluctuate based on our working capital needs. Our obligations under the ABL Facility areguaranteed by us and are secured by substantially all of our U.S., Netherlands, United Kingdom, andGerman assets. There are no specific financial covenants required under the ABL Facility atDecember 31, 2014.

Under the ABL Facility, U.S. borrowings accrue interest at a rate of the London interbank offeredrate (‘‘LIBOR’’) plus a margin ranging from 225 to 275 basis points, or, at our option, a base rateequal to the greatest of (a) the Federal Funds Rate plus 0.50%, (b) LIBOR plus 1%, and (c) the‘‘prime rate’’ set by Wells Fargo plus a margin ranging from 125 to 175 basis points. All foreignborrowings accrue interest at a rate of LIBOR plus a margin ranging from 225 to 275 basis points, pluscertain fees related to compliance with European banking regulations. The interest rates applicable toborrowings under the Credit Agreement are subject to increase during an event of default. We are alsorequired to pay an unused line fee ranging from 0.375% to 0.50% annually on the unused portion ofthe ABL Facility. During the year ended December 31, 2014, our weighted average interest rate on ouroutstanding borrowings under the ABL Facility was 4.05%.

The ABL Facility can be prepaid in whole or in part at any time. The ABL Facility must be repaidto the extent that any borrowings exceed the maximum availability allowed under the ABL Facility. TheABL Facility also includes a number of business covenants, including customary limitations on, amongother things, indebtedness, liens, investments, guarantees, mergers, dispositions, acquisitions,liquidations, dissolutions, issuances of securities, payments of dividends, loans and advances, andtransactions with affiliates. We were in compliance with all such covenants at December 31, 2014.

We are required to be in compliance with a minimum trailing 12-month fixed charge coverageratio if (i) an event of default has occurred and is continuing, (ii) less than 25% of the ABL Facility isavailable for borrowing, or (iii) less than $15 million is available for borrowing under the ABL Facility.We must then continue to comply with the minimum trailing 12-month fixed charge coverage ratio until(1) no event of default is continuing and (2) at least 25% of the ABL Facility and a minimum of$15 million have been available for borrowing under the ABL Facility for 30 consecutive days. None ofthe above scenarios were applicable during 2014 and as such we were not required to comply with theminimum trailing 12-month fixed charge coverage ratio.

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Wells Fargo will take dominion over our U.S. cash and cash receipts and will automatically applysuch amounts to the ABL Facility on a daily basis if (i) an event of default has occurred and iscontinuing, (ii) less than 30% of the ABL Facility or less than $18 million is available for borrowingunder the ABL Facility for five consecutive days, or (iii) less than 25% of the ABL Facility or less than$15 million is available for borrowing under the ABL Facility at any time. Wells Fargo will continue toexercise dominion over our U.S. cash and cash receipts until (1) no event of default is continuing and(2) at least 30% of the ABL Facility and a minimum of $18 million have been available for borrowingunder the ABL Facility for 30 consecutive days. In addition, at all times during the term of the ABLFacility, Wells Fargo will have dominion over the cash of the United Kingdom, Dutch, and Germanborrowers when a balance is outstanding to those entities and will automatically apply such amounts tothe ABL Facility on a daily basis. As a result, if we have any outstanding borrowings that are subject tothe bank’s dominion, such amounts will be classified as a current liability on our balance sheet. AtDecember 31, 2014, we had no foreign borrowings that were subject to the bank’s dominion.

The ABL Facility generally contains customary events of default for credit facilities of this type,including nonpayment, material inaccuracy of representations and warranties, violation of covenants,default of certain other agreements or indebtedness, bankruptcy, material judgments, invalidity of theCredit Agreement or related agreements, and a change of control.

Should it be necessary, we believe that sources of credit or financing other than our ABL Facilitywould be available to us; however, we cannot predict, at this time, what types of credit or financingwould be available in the future, the costs of such credit or financing, or the terms of any amended ornew facilities.

The carrying value of the outstanding borrowings under the ABL Facility approximates its fairvalue as (1) it is based on a variable rate that changes based on market conditions and (2) the marginapplied to the variable rate is based on our credit risk, which has not changed since entering into thefacility in May 2012. If our credit risk were to change, we would estimate the fair value of ourborrowings using discounted cash flow analysis based on current rates obtained from the lender forsimilar types of debt. The inputs used to establish the fair value of the ABL Facility are considered tobe Level 2 inputs, which include inputs other than quoted prices included in Level 1 that areobservable for the asset or liability, either directly or indirectly.

Off-Balance Sheet Arrangements

We do not have any reportable off-balance sheet arrangements.

Contractual Obligations

The contractual obligations presented in the table below represent our estimates of futurepayments under fixed contractual obligations and commitments. Changes in our business needs,cancellation provisions, changing interest rates and other factors may result in actual payments differingfrom these estimates. We cannot provide certainty regarding the timing and amounts of payments.

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The following table is a summary of our contractual obligations as of December 31, 2014:

Payments due by period

Total 2015 2016 - 2017 2018 - 2019 Thereafter

(In thousands)

Principal payments on long-term debt . . . . . . . . $11,402 $ — $11,402 $ — $ —Operating leases(1) . . . . . . . . . . . . . . . . . . . . . 65,462 19,434 29,247 13,797 2,984Other commitments(2) . . . . . . . . . . . . . . . . . . . 17,756 12,681 5,035 40 —

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $94,620 $32,115 $45,684 $13,837 $2,984

(1) Includes operating leases for all office locations, automobiles and office equipment.

(2) Other commitments include, among other things, information technology, software support andmaintenance obligations, as well as other obligations in the ordinary course of business that wecannot cancel or where we would be required to pay a termination fee in the event of cancellation.It also includes our 2015 payment related to the purchase of the noncontrolling interests of one ofour foreign subsidiaries. (See Note 1 to our Consolidated Financial Statements for moreinformation on this purchase). It does not include our remaining unrecognized tax benefits of$14.9 million because we are unable to make a reasonably reliable estimate as to when a cashsettlement, if any, with the appropriate taxing authority may occur.

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements in accordance with U.S. generallyaccepted accounting principles requires management to make estimates, judgments and assumptionsthat affect the reported amounts of assets and liabilities as of the date of the financial statements, aswell as the reported amounts of revenue and expenses during the periods presented. We continuallyevaluate our estimates, judgments and assumptions based on available information and experience. Webelieve that our estimates, judgments and assumptions are reasonable based on information available tous at the time they are made. To the extent there are differences between our estimates, judgments andassumptions and actual results, our financial statements will be affected. Such differences may bematerial to our financial statements. The accounting policies that reflect our more significant estimates,judgments and assumptions are described below.

Revenue recognition—Ciber earns revenue primarily from providing IT services to its clients, and toa much lesser extent, from the sale and resale of IT hardware and software products. Ciber’s consultingservices revenue comes from three primary sources: (1) technology integration services where wedesign, build and implement new or enhanced system applications and related processes; (2) general ITconsulting services, such as system selection or assessment, feasibility studies, training and staffing; and(3) outsourcing and managed IT services in which we manage, staff, maintain, host or otherwise runsolutions and/or systems for our customers. Contracts for these services have different terms based onthe scope, deliverables and complexity of the engagement, which requires management to makejudgments and estimates in recognizing revenue. Fees for these contracts may be in the form oftime-and-materials or fixed-price billings. Approximately 70-80% of our consulting services revenue isrecognized under time-and-materials contracts as hours and costs are incurred. Consulting servicesrevenue also includes project-related reimbursable expenses for travel and other out-of-pocket expensesseparately billed to clients.

Revenue for technology integration consulting services where we design/redesign, build andimplement new or enhanced systems applications and related processes for our clients is generallyrecognized based on the percentage-of-completion method. Under the percentage-of-completionmethod, management estimates the percentage of completion based upon the contract costs incurred to

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date as a percentage of the total estimated contract costs. If the total cost estimate exceeds revenue, weaccrue for the estimated loss immediately. The use of the percentage-of-completion method requiressignificant judgment relative to estimating total contract revenue and costs, including assumptions as tothe length of time to complete the project, the nature and complexity of the work to be performed andanticipated changes in estimated costs. Estimates of total contract costs are continuously monitoredduring the term of the contract and recorded revenues and costs are subject to revision as the contractprogresses. Such revisions may result in increases or decreases to revenue and income and are reflectedin the consolidated financial statements in the periods in which they are first identified.

Revenue for general IT consulting services is recognized as work is performed and amounts areearned. We consider amounts to be earned once evidence of an arrangement has been obtained,services are delivered, fees are fixed or determinable and collectability is reasonably assured. Forcontracts with fees based on time-and-materials or cost-plus, we recognize revenue over the period ofperformance. For fixed-price contracts, depending on the specific contractual provisions and nature ofthe deliverables, revenue may be recognized on a proportional performance model based onlevel-of-effort, as milestones are achieved or when final deliverables have been provided.

Outsourcing and managed IT services arrangements typically span several years. Revenue fromtime-and-materials contracts is recognized as the services are performed. Revenue from unit-pricedcontracts is recognized as transactions are processed based on objective measures of output. Revenuefrom fixed-price contracts is recognized on a straight-line basis, unless revenues are earned andobligations are fulfilled in a different pattern. Costs related to delivering outsourcing and managedservices are expensed as incurred, with the exception of labor and other direct costs related to theset-up of processes, personnel and systems, which are deferred during the transition period andexpensed evenly over the period services are provided. Amounts billable to the client for transition orset-up activities, which do not have standalone value, are also deferred and recognized as revenueratably over the period that the managed services are provided.

We sometimes enter into arrangements (excluding software license arrangements) with customersthat purchase multiple services, or a combination of services and IT hardware products, from us at thesame time, referred to as multiple-element arrangements. Each element within a multiple-elementarrangement is accounted for as a separate unit of accounting provided that the delivered services orproducts have value to the customer on a standalone basis. We consider a deliverable element to havestandalone value if the service or product is sold separately by us or another vendor or could be resoldby the customer. For our multiple-element arrangements, the arrangement consideration is allocated atthe inception of the arrangement to all deliverable elements on the basis of their relative selling price(the relative selling price method). When applying the relative selling price method, the selling pricefor each deliverable is determined using vendor-specific objective evidence (‘‘VSOE’’) of selling price ifit exists; otherwise, third-party evidence (‘‘TPE’’) of selling price is used. If neither VSOE nor TPE ofselling price exists for a deliverable, then we use our best estimate of the selling price (‘‘ESP’’) for thatdeliverable when applying the relative selling price method. Since our services are typically customizedto each client’s specific needs, VSOE and TPE are generally not available. We determine ESP forpurposes of allocating the arrangement by considering several external and internal factors including,but not limited to, pricing practices, margin objectives, competition, geographies in which we offer ourproducts and services, and internal costs. We limit the amount of revenue recognized for deliveredelements to an amount that is not contingent upon future delivery of additional services or products.

Other revenue primarily includes resale of third-party IT hardware and software products,commissions on sales of IT products and, to a lesser extent, sales of proprietary software products.Revenue related to the sale of IT products is generally recognized when the products are shipped or ifapplicable, when delivered and installed in accordance with the terms of the sale. Where we are there-marketer of certain IT products, commission revenue is recognized when the products aredrop-shipped from the vendor to the customer. Our commission revenue represents the sales price to

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the customer less the cost paid to the vendor. Some software license arrangements also includeimplementation services and/or post-contract customer support. In such multi-element softwarearrangements, if the criteria are met, revenue is recognized when VSOE of the fair value of eachundelivered element has been established. Generally our license arrangements containing multipleelements do not qualify for separate accounting for the implementation services and the softwarelicense revenue and the related costs of third-party software products are generally recognized togetherwith the software implementation services using the percentage-of-completion method. Revenue forsoftware post-contract support is recognized ratably over the term of the related agreement.

Unbilled accounts receivable represent amounts recognized as revenue based on servicesperformed in advance of billings in accordance with contract terms. Under our typicaltime-and-materials billing arrangement, we bill our customers on a regularly scheduled basis, such asbiweekly or monthly. At the end of each accounting period, we accrue revenue for services performedsince the last billing cycle. These unbilled amounts are generally billed the following month. Unbilledaccounts receivable also arise when percentage-of-completion accounting is used and costs plusestimated contract earnings exceed billings. Such amounts are billed at specific milestone dates or atcontract completion. Management expects all unbilled accounts receivable to be collected within oneyear of the balance sheet date. Billings in excess of revenue recognized are recorded as deferredrevenue and are primarily comprised of deferred software support revenue.

Goodwill—We perform our annual impairment analysis of goodwill as of June 30 each year, ormore often if there are indicators of impairment present. We test each of our reporting units forgoodwill impairment. Our reporting units are the same as our operating divisions and reportingsegments. The goodwill impairment test requires a two-step process. The first step consists ofcomparing the estimated fair value of each reporting unit with its carrying amount, including goodwill.If the estimated fair value of a reporting unit exceeds its carrying value, then it is not consideredimpaired and no further analysis is required. If step one indicates that the estimated fair value of areporting unit is less than its carrying value, then impairment potentially exists and the second step isperformed to measure the amount of goodwill impairment. Goodwill impairment exists when theestimated implied fair value of a reporting unit’s goodwill is less than its carrying value.

We compared the carrying values of our International and North America reporting units to theirestimated fair values at June 30, 2014. We estimated the fair value of each reporting unit based on aweighting of both the income approach and the market approach. The discounted cash flows for eachreporting unit serve as the primary basis for the income approach, and were based on discrete financialforecasts developed by management. Cash flows beyond the discrete forecast period of five years wereestimated using the perpetuity growth method calculation. The annual average revenue growth ratesforecasted for our reporting units for the first five years of our projections were approximately 3%. Wehave projected a minor amount of operating profit margin improvement based on expected marginbenefits from certain internal initiatives. The terminal value was calculated assuming projected growthrates of 3% after five years, which reflects our estimate of minimum long-term growth in IT spending.The income approach valuations also included each reporting unit’s estimated weighted average cost ofcapital, which were 14.5% and 15% for International and North America, respectively. The marketapproach applied pricing multiples derived from publicly-traded companies that are comparable to therespective reporting units to determine their values. For our International and North America reportingunits, we used enterprise value/EBITDA multiples of 7 and 6, respectively, in order to value each ofour reporting units under the market approach. In addition, the fair value under the market approachincluded a control premium of 33%. The control premium was determined based on a review ofcomparative market transactions. Publicly-available information regarding our market capitalization wasalso considered in assessing the reasonableness of the cumulative fair values of our reporting units.

As a result of the first step of our goodwill impairment test as of June 30, 2014, we estimated thatthe fair values for our International and North America reporting units exceeded their carrying

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amounts by 21% and 59%, respectively, thus no impairment was indicated. As of June 30, 2014, weupdated our cash flow forecasts and our other assumptions used to calculate the estimated fair value ofour reporting units to account for our beliefs and expectations of the current business environment.While we believe our estimates are appropriate based on our view of current business trends, noassurance can be provided that impairment charges will not be required in the future.

For the quarter ended December 31, 2014, we reviewed for indicators of impairment and believedthat the sustained decline in our share price warranted an interim test for goodwill impairment for ourreporting units. We compared the carrying values of our International and North America reportingunits to their estimated fair values at December 31, 2014. We estimated the fair value of each reportingunit based on a weighting of both the income approach and the market approach. We used similarmethodologies as during our annual impairment test date of June 30, 2014, and updated our businessand valuation assumptions for the income and market approach. The discounted cash flow method(income approach) incorporates various Level 3 inputs including projected revenue growth rates,earnings margins, and the present value, based on the discount rate and terminal growth rate, offorecasted cash flows. The annual average revenue growth rates forecasted for our reporting units forthe first five years of our projections were approximately 3%. Again, we projected a minor amount ofoperating profit margin improvement based on expected margin benefits from certain internalinitiatives. The terminal value was calculated assuming projected growth rates of 3% after five years,which reflects our estimate of minimum long-term growth in IT spending. The income approachvaluations also included each reporting unit’s estimated weighted average cost of capital, which were16% and 14.5% for International and North America, respectively. The market approach appliedpricing multiples derived from publicly-traded companies that are comparable to the respectivereporting units to determine their values. For our International and North America reporting units, weused enterprise value/EBITDA multiples of approximately 8 and 6, respectively in order to value eachof our reporting units under the market approach. In addition, the fair value under the marketapproach included a control premium of 30%. The control premium was determined based on a reviewof comparative market transactions. Publicly-available information regarding our market capitalizationwas also considered in assessing the reasonableness of the cumulative fair values of our reporting units.

As a result of the first step of our interim goodwill impairment test as of December 31, 2014, weestimated that the fair values for our International and North America reporting units exceeded theircarrying amounts by 28% and 86%, respectively, thus no impairment was indicated. We updated ourcash flow forecasts and our other assumptions used to calculate the estimated fair value of ourreporting units to account for our beliefs and expectations of the current business environment. Whilewe believe our estimates are appropriate based on our view of current business trends, no assurancecan be provided that impairment charges will not be required in the future.

We currently have a remaining goodwill balance of $267.6 million at December 31, 2014. Theprocess of evaluating the potential impairment of goodwill is subjective and requires significantjudgment at many points during the analysis. In estimating the fair value of the reporting units for thepurpose of our annual or periodic goodwill impairment analysis, we make estimates and judgmentsabout the future cash flows of the reporting units, including estimated growth rates and assumptionsabout the economic environment. Although our cash flow forecasts are based on assumptions that areconsistent with the plans and estimates we are using to manage the underlying reporting units, there issignificant judgment in determining the cash flows attributable to these reporting units. We considerour market capitalization, adjusted for unallocated monetary assets such as cash and debt, a controlpremium, and other factors determined by management. As a result, several factors could result in theimpairment of a material amount of our goodwill balance in future periods, including, but not limitedto:

(1) failure of Ciber to reach our internal forecasts could impact our ability to achieve ourforecasted levels of cash flows and reduce the estimated fair values of our reporting units; and

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(2) a decline in our stock price and resulting market capitalization, if we determine that thedecline is sustained and is indicative of a reduction in the fair value of either of our reporting unitsbelow their carrying values.

Adverse changes in our market capitalization, long-term forecasts and industry growth rates couldresult in additional impairment charges being recorded in future periods for goodwill attributed to anyof our reporting units. Any future impairment charges would adversely affect our results of operationsfor those periods.

Income taxes—We are subject to income taxes in the U.S. and numerous foreign jurisdictions.Significant management judgment is required in determining the provision for income taxes anddeferred tax assets and liabilities, including any valuation allowance recorded against net deferred taxassets. The consolidated provision for income taxes will change period to period based on nonrecurringevents, such as the results of income tax audits, changes in tax laws and the timing and amount ofpossible foreign dividend repatriation, as well as recurring factors including the geographic mix ofincome before taxes, state and local taxes and the effects of various global income tax strategies.

We assess the likelihood that our deferred tax assets will be recovered from future taxable incomeand to the extent recovery is believed unlikely, we establish a valuation allowance. Significant judgmentis also required in determining any valuation allowance recorded against deferred tax assets. Inassessing the need for a valuation allowance, management considers all available evidence for eachjurisdiction including past operating results, estimates of future taxable income and the feasibility ofongoing tax planning strategies. In the event that we change our determination as to the amount ofdeferred tax assets that can be realized, we will adjust the valuation allowance with a correspondingimpact to income tax expense in the period in which such determination is made.

We have not recorded any deferred tax benefit for any domestic tax operating losses since then.Our total valuation allowance recorded against all of our deferred tax assets at December 31, 2014, was$56.9 million. The establishment of a valuation allowance does not impair our ability to use thedeferred tax assets, such as net operating loss and tax credit carryforwards, upon achieving sufficientprofitability. As we generate domestic taxable income in future periods, we do not expect to recordsignificant related domestic income tax expense until the valuation allowance is significantly reduced.As we are able to determine that it is more likely than not that we will be able to utilize the deferredtax assets, we will reduce our valuation allowance.

We apply an estimated annual effective tax rate to our quarterly operating results to determine theprovision for income tax expense. In the event there is a significant unusual or infrequent itemrecognized in our quarterly operating results, the tax attributable to that item is recorded in the interimperiod in which it occurs. Changes in the geographic mix or estimated level of annual income beforetaxes will affect our provision for income tax expense.

We are regularly audited by various taxing authorities, and sometimes these audits involveproposed assessments where the ultimate resolution may result in us owing additional taxes, plusinterest and possible penalties. Tax exposures can involve complex issues and may require an extendedperiod to resolve. We establish reserves when, despite our belief that our tax return positions areappropriate and supportable under local tax law, we believe it is more likely than not that all or someportion of a tax benefit will not be realized as the result of an audit. We evaluate these reserves eachquarter and adjust the reserves and the related interest in light of changing facts and circumstancesregarding the estimates of tax benefits to be realized, such as the progress of a tax audit or theexpiration of a statute of limitations. We believe the estimates and assumptions used to support ourevaluation of tax benefit realization are reasonable. However, final determinations of prior-year taxliabilities, either by settlement with tax authorities or expiration of statutes of limitations, could bematerially different from estimates reflected in assets and liabilities and historical income taxprovisions. The outcome of these final determinations could have a material effect on our income tax

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provision, net income or cash flows in the period in which that determination is made. We believe ourtax positions comply with applicable tax law and that we have adequately provided for any known taxcontingencies.

Allowance for doubtful accounts receivable—We maintain an allowance for doubtful accounts at anamount we estimate to be sufficient to cover the risk of collecting less than full payment on ourreceivables. At December 31, 2014, we had gross accounts receivable of $176.3 million and ourallowance for doubtful accounts was $2.8 million. Our allowance for doubtful accounts is based uponspecific identification of probable losses. We review our accounts receivable and reassess our estimatesof collectability each quarter. Historically, our bad debt expense has been a very small percentage ofour total revenue, as most of our revenues are from large, credit-worthy Global 2000 blue-chipcompanies and government agencies. Our bad debt expense was $0.7 million, $1.8 million, and$0.8 million in 2014, 2013, and 2012, respectively. If our clients’ financial condition or liquidity were todeteriorate, resulting in an impairment of their ability to make payments, or if customers were toexpress dissatisfaction with the services we have provided, additional allowances may be required. Suchitems are very difficult to predict and require significant management judgment.

Accrued compensation and certain other accrued liabilities—Employee compensation costs are ourlargest expense category. We have several different variable compensation programs that are highlydependent on estimates and judgments, particularly at interim reporting dates. Some programs arediscretionary, while others have quantifiable performance metrics. Certain programs are annual, whileothers are quarterly or monthly. Often actual compensation amounts cannot be determined until afterour results are reported. We believe we make reasonable estimates and judgments using all significantinformation available. Office closure liabilities are established when we vacate an operating leaselocation. The amount of the liability represents the present value of any remaining lease obligations,net of estimated sublease income. If the timing or amount of actual sublease income differs fromestimated amounts, this could result in an increase or decrease in the related reserves. We estimate theamounts required for incurred but not reported health claims under our self-insured employee benefitprograms. Our accrual for health costs is based on historical experience and specific claim activity andactual amounts may vary. In the ordinary course of business, we are currently involved in various claimsand legal proceedings. We periodically review the status of each significant matter and assess ourpotential financial exposure. If the potential loss from any claim or legal proceeding is consideredprobable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. Weuse significant judgment in both the determination of probability and the determination as to whetheran exposure is reasonably estimable. Because of uncertainties related to these matters, accruals arebased only on the best information at that time. As additional information becomes available, wereassess the potential liability related to our pending claims and litigation and may revise our estimates.Such revisions in the estimates of potential liabilities could have a material impact on our financialposition and results of operations. We expense legal fees as incurred.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks related to changes in foreign currency exchange rates and interestrates. We believe our exposure to other market risks is immaterial.

During 2014, approximately 51%, or $443 million of our total revenue was attributable to ourforeign operations. Using sensitivity analysis, a hypothetical 10% increase or decrease in the value ofthe U.S. dollar against all currencies would change total revenue by 5.1%, or $44 million. A portion ofthis fluctuation would be offset by expenses incurred in local currency. Additionally, we have exposureto changes in foreign currency rates related to short-term inter-company transactions with our foreignsubsidiaries and from client receivables in different currencies. At December 31, 2014, we have enteredinto the multiple short term foreign currency forward transaction to mitigate our exposure tofluctuations in the the euro, the Indian Rupee, the pound sterling, the Norwegian krone, the Swedish

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krona, and the Australian Dollar related to inter-company transactions. See Note 10 to ourconsolidated financial statements for more information on our financial instruments. Foreign sales aremostly made by our foreign subsidiaries in their respective countries and are typically denominated inthe local currency of each country. Our foreign subsidiaries incur most of their expenses in their localcurrency as well, which helps minimize our risk of exchange rate fluctuations.

Our exposure to changes in interest rates arises primarily because our ABL Facility has a variableinterest rate. For the year ended December 31, 2014, we had average borrowings outstanding under ourABL Facility of $13.5 million and the weighted average interest rate on these borrowings was 4.05%.Therefore, a 1% increase in interest rates on average outstanding indebtedness under the ABL Facilitywould result in approximately $0.1 million of additional interest expense in 2014.

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Item 8. Financial Statements and Supplementary Data

The following consolidated financial statements and supplementary data are included as part ofthis Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48Consolidated Statements of Operations—Years Ended December 31, 2014, 2013 and 2012 . . . . . . 49Consolidated Statements of Comprehensive Income (Loss)—Years ended December 31, 2014,

2013 and 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Consolidated Balance Sheets—December 31, 2014 and 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Consolidated Statements of Shareholders’ Equity—Years Ended December 31, 2014, 2013 and

2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52Consolidated Statements of Cash Flows—Years Ended December 31, 2014, 2013 and 2012 . . . . . . 53Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Ciber, Inc.

We have audited the accompanying consolidated balance sheets of Ciber, Inc. and subsidiaries (theCompany) as of December 31, 2014 and 2013, and the related consolidated statements of operations,comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in theperiod ended December 31, 2014. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements based on ouraudits.

We conducted our audits in accordance with the standards of the Public Company AccountingOversight Board (United States). Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statement presentation. Webelieve that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects,the consolidated financial position of the Company at December 31, 2014 and 2013, and theconsolidated results of its operations and its cash flows for each of the three years in the period endedDecember 31, 2014, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company AccountingOversight Board (United States), the Company’s internal control over financial reporting as ofDecember 31, 2014, based on criteria established in Internal Control—Integrated Framework issued bythe Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and ourreport dated February 20, 2015 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLPDenver, ColoradoFebruary 20, 2015

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Ciber, Inc. and Subsidiaries

Consolidated Statements of Operations



2014 2013 2012

REVENUESConsulting services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $812,660 $830,505 $819,848Other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,947 46,788 45,749

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863,607 877,293 865,597

OPERATING EXPENSESCost of consulting services . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612,724 626,771 615,494Cost of other revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,217 27,465 26,625Selling, general and administrative . . . . . . . . . . . . . . . . . . . . . . . 206,040 205,615 202,185Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . 192 — 644Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,232 16,923 7,981

Total operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 873,405 876,774 852,929

OPERATING INCOME (LOSS) FROM CONTINUINGOPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,798) 519 12,668

Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,639) (2,539) (5,976)Other income (expense), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,385) 841 259

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFOREINCOME TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,822) (1,179) 6,951

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,935 6,428 11,024

NET LOSS FROM CONTINUING OPERATIONS . . . . . . . . . . . . . (18,757) (7,607) (4,073)Loss from discontinued operations, net of income tax . . . . . . . . . . . . (792) (6,924) (10,009)

CONSOLIDATED NET LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,549) (14,531) (14,082)Net income (loss) attributable to noncontrolling interests . . . . . . . . . . 55 (11) 545

NET LOSS ATTRIBUTABLE TO CIBER, INC. . . . . . . . . . . . . . . . $ (19,604) $(14,520) $(14,627)

Basic and diluted loss per share attributable to Ciber, Inc.:Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.24) $ (0.10) $ (0.06)Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.01) (0.09) (0.14)

Basic and diluted loss per share attributable to Ciber, Inc. . . . . . $ (0.25) $ (0.19) $ (0.20)

Weighted average shares outstanding—Basic and Diluted . . . . . . . . . 77,593 74,846 73,166

See accompanying notes to consolidated financial statements.

49


Consolidated Statements of Comprehensive Income (Loss)

(In thousands)


2014 2013 2012

Consolidated net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(19,549) $(14,531) $(14,082)Reclassification adjustment to loss from discontinued operations . . . . . — 1,008 —Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . (20,339) 1,880 7,214

Comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (39,888) (11,643) (6,868)Comprehensive income (loss) attributable to noncontrolling

interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 (11) 545

Comprehensive loss attributable to Ciber, Inc. . . . . . . . . . . . . . . $(39,943) $(11,632) $ (7,413)


50


Consolidated Balance Sheets


December 31,

2014 2013

ASSETSCurrent assets:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 45,858 $ 44,483Accounts receivable, net of allowances of $2,842 and $2,335, respectively . . . . . 173,450 189,382Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,714 22,794

Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246,022 256,659

Property and equipment, net of accumulated depreciation of $46,871 and$48,500, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,115 12,923

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267,587 281,714Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,559 6,522

TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $535,283 $557,818

LIABILITIES AND EQUITYLiabilities:Current liabilities:

Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 53Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,926 34,223Accrued compensation and related liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 59,012 69,622Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,475 20,989Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 573 1,654Other accrued expenses and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,932 44,190

Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,918 170,731

Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,402 —Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,422 23,910Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,465 10,119

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209,207 204,760Commitments and contingencies

Equity:Ciber, Inc. shareholders’ equity:

Preferred stock, $0.01 par value, 1,000 shares authorized, no shares issued . . . . — —Common stock, $0.01 par value, 100,000 shares authorized, 78,728 and

75,822 shares issued, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 787 758Treasury stock, at cost, 32 and 37 shares, respectively . . . . . . . . . . . . . . . . . . . (117) (150)Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 360,419 343,944Retained earnings (accumulated deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18,348) 4,887Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . (17,243) 3,096

Total Ciber, Inc. shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,498 352,535Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 578 523

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326,076 353,058TOTAL LIABILITIES AND EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . $535,283 $557,818


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Consolidated Statements of Cash Flows

(In thousands)


2014 2013 2012

CASH FLOWS FROM OPERATING ACTIVITIESConsolidated net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (19,549) $ (14,531) $ (14,082)Adjustments to reconcile consolidated net loss to net cash provided by

(used in) operating activities:Loss from discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . 792 6,924 10,009Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,552 5,797 7,366Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 — 644Deferred income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,916 2,706 4,892Provision for doubtful receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 730 1,813 825Share-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . 11,405 11,746 7,282Amortization of debt costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 571 798 2,615Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,191 470 667Changes in operating assets and liabilities, net of acquisitions:

Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,029 2,401 (13,529)Other current and long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . (1,184) 1,337 (1,708)Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220 3,786 (4,240)Accrued compensation and related liabilities . . . . . . . . . . . . . . . . . . (6,202) 845 7,352Other current and long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . 7,002 5,868 (6,004)Income taxes payable/refundable . . . . . . . . . . . . . . . . . . . . . . . . . . (5,713) (4,745) (936)

Cash provided by operating activities—continuing operations . . . . . . 1,952 25,215 1,153Cash used in operating activities—discontinued operations . . . . . . . (766) (1,273) (2,830)

Cash provided by (used in) operating activities . . . . . . . . . . . . . . 1,186 23,942 (1,677)

CASH FLOWS FROM INVESTING ACTIVITIESAcquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (845) — —Purchases of property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . (8,178) (5,213) (3,243)

Cash used in investing activities—continuing operations . . . . . . . . . (9,023) (5,213) (3,243)Cash provided by (used in) investing activities—discontinued

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (313) 37,754

Cash provided by (used in) investing activities . . . . . . . . . . . . . . (9,023) (5,526) 34,511

CASH FLOWS FROM FINANCING ACTIVITIESBorrowings on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330,928 302,135 337,475Payments on long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (319,137) (328,354) (377,617)Employee stock purchases and options exercised . . . . . . . . . . . . . . . . . . . 5,097 2,449 1,263Purchase of shares for employee tax withholdings . . . . . . . . . . . . . . . . . . (3,596) (1,840) —Credit facility fees paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (3,389)Payment of initial fair value of acquisition-related contingent consideration . — (3,428) —Purchase of noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . (708) (800) —Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (95) (688)

Cash provided by (used in) financing activities—continuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,584 (29,933) (42,956)

Effect of foreign exchange rate changes on cash and cash equivalents . . . . . . (3,372) (2,849) 3,404

Net increase (decrease) in cash and cash equivalents . . . . . . . . . . 1,375 (14,366) (6,718)Cash and cash equivalents, beginning of period . . . . . . . . . . . . . . . . . . . . . 44,483 58,849 65,567

Cash and cash equivalents, end of period . . . . . . . . . . . . . . . . . . . . . . . . . $ 45,858 $ 44,483 $ 58,849


53


Notes to Consolidated Financial Statements

(1) Summary of Significant Accounting Policies

(a) Description of Business

Ciber is a leading global information technology (‘‘IT’’) company with a wide range of technologyexpertise. We serve a variety of clients, including corporations listed in the Fortune 100 andmiddle-market companies, as well as governmental entities and educational institutions. We solvecomplex IT and business issues across various industries such as manufacturing, healthcare and lifesciences, communications, energy and utilities, and financial services. The three pillars of our businessinclude Application Development and Maintenance (‘‘ADM’’), Independent Software Vendorrelationships (‘‘ISVs’’) and Ciber Managed Services (‘‘CMS’’). We combine local, on-site accountmanagement with a global delivery model to serve clients in an intimate manner while still utilizing thepower and cost efficiencies of global resources. To a lesser extent, we also resell certain IT hardwareand software products.

(b) Principles of Consolidation

The Consolidated Financial Statements include the accounts of Ciber, Inc. and all of itsmajority-owned subsidiaries (together ‘‘Ciber,’’ ‘‘the Company,’’ ‘‘we,’’ ‘‘our,’’ or ‘‘us’’). All materialinter-company balances and transactions have been eliminated.

The shares of our foreign subsidiaries that are owned by persons other than Ciber are referred toas noncontrolling interests in these Consolidated Financial Statements. The noncontrollingshareholders’ proportionate share of the equity of these subsidiaries is reflected as ‘‘noncontrollinginterests’’ in the Consolidated Balance Sheets. The noncontrolling shareholders’ proportionate share ofthe net income or loss of these subsidiaries is reflected as ‘‘net income (loss) attributable tononcontrolling interests’’ in the Consolidated Statements of Operations.

In June 2013, we entered into an agreement to purchase all of the noncontrolling interests of oneof our foreign subsidiaries for future cash payments of approximately $7.3 million, of which $0.8 millionwas paid in the the fourth quarter of 2013, $0.7 million was paid in the fourth quarter of 2014, and theremainder will be paid in the second quarter of 2015. Effective with the date of entering into thisagreement, we derecognized the previously recorded noncontrolling interests relating to this subsidiaryand recorded a liability for the present value of future cash payments on our consolidated balancesheet. We recorded the excess of the present value of future cash payments over the book value ofnoncontrolling interests as a reduction to Ciber, Inc. shareholders’ equity.

(c) Use of Estimates

The preparation of our Consolidated Financial Statements in conformity with U.S. generallyaccepted accounting principles (‘‘GAAP’’) requires management to make estimates and assumptionsthat affect amounts reported in the Consolidated Financial Statements and accompanying disclosures.We base our estimates on historical experience and on various other assumptions that we believe arereasonable under the circumstances. Actual results could differ from those estimates.

(d) Revenue Recognition

Ciber earns revenue primarily from providing IT services to its clients, and to a much lesser extent,from the sale and resale of IT hardware and software products. Ciber’s consulting services revenuecomes from three primary sources: (1) technology integration services where we design, build and

54


Notes to Consolidated Financial Statements (Continued)

(1) Summary of Significant Accounting Policies (Continued)

implement new or enhanced system applications and related processes; (2) general IT consultingservices, such as system selection or assessment, feasibility studies, training and staffing; and(3) managed IT services in which we manage, staff, maintain, host or otherwise run solutions and/orsystems for our customers. Contracts for these services have different terms based on the scope,deliverables and complexity of the engagement, which requires management to make judgments andestimates in recognizing revenue. Fees for these contracts may be in the form of time-and-materials,unit-priced or fixed-price billings. The majority of our consulting services revenue is recognized undertime-and-materials contracts as hours and costs are incurred. Consulting services revenue also includesproject-related reimbursable expenses for travel and other out-of-pocket expenses separately billed toclients.

Revenue for technology integration consulting services where we design/redesign, build andimplement new or enhanced systems applications and related processes for our clients is generallyrecognized based on the percentage-of-completion method. Under the percentage-of-completionmethod, management estimates the percentage of completion based upon the contract costs incurred todate as a percentage of the total estimated contract costs. If the total cost estimate exceeds revenue, weaccrue for the estimated loss immediately. The use of the percentage-of-completion method requiressignificant judgment relative to estimating total contract revenue and costs, including assumptions as tothe length of time to complete the project, the nature and complexity of the work to be performed andanticipated changes in estimated costs. Estimates of total contract costs are continuously monitoredduring the term of the contract and recorded revenues and costs are subject to revision as the contractprogresses. Such revisions may result in increases or decreases to revenue and income and are reflectedin the Consolidated Financial Statements in the periods in which they are first identified.

Revenue for general IT consulting services is recognized as work is performed and amounts areearned. For contracts with fees based on time-and-materials, we recognize revenue over the period ofperformance. For fixed-price contracts, depending on the specific contractual provisions and nature ofthe deliverables, revenue may be recognized on a proportional performance model based onlevel-of-effort, as milestones are achieved or when final deliverables have been provided.

Outsourcing and managed IT services arrangements typically span several years. Revenue fromtime-and-materials contracts is recognized as the services are performed. Revenue from unit-pricedcontracts is recognized as transactions are processed based on objective measures of output. Revenuefrom fixed-price contracts is recognized on a straight-line basis, unless revenues are earned andobligations are fulfilled in a different pattern. Costs related to delivering managed services areexpensed as incurred, with the exception of labor and other direct costs related to the set-up ofprocesses, personnel and systems, which are deferred during the transition period when appropriatecriteria have been met and expensed ratably over the period services are provided. Amounts billable tothe client for transition or set-up activities, which do not have standalone value, are also deferred andrecognized as revenue ratably over the period that the managed services are provided.

We sometimes enter into arrangements (excluding software license arrangements) with customersthat purchase multiple services, or a combination of services and IT hardware products, from us at thesame time, referred to as multiple-element arrangements. Each element within a multiple-elementarrangement is accounted for as a separate unit of accounting provided that the delivered services orproducts have value to the customer on a standalone basis. We consider a deliverable element to havestandalone value if the service or product is sold separately by us or another vendor or could be resold

55




by the customer. For our multiple-element arrangements, the arrangement consideration is allocated atthe inception of the arrangement to all deliverable elements on the basis of their relative selling price(the relative selling price method). When applying the relative selling price method, the selling pricefor each deliverable is determined using vendor-specific objective evidence (‘‘VSOE’’) of selling price ifit exists; otherwise, third-party evidence (‘‘TPE’’) of selling price is used. If neither VSOE nor TPE ofselling price exists for a deliverable, then we use our best estimate of the selling price (‘‘ESP’’) for thatdeliverable when applying the relative selling price method. Since our services are typically customizedto each client’s specific needs, VSOE and TPE are generally not available. We determine ESP forpurposes of allocating the arrangement by considering several external and internal factors including,but not limited to, pricing practices, margin objectives, competition, geographies in which we offer ourproducts and services, and internal costs. We limit the amount of revenue recognized for deliveredelements to an amount that is not contingent upon future delivery of additional services or products.

Other revenue primarily includes sales of third-party software products and related support servicesand commissions on sales of IT products and, to a lesser extent, sales of proprietary software products.Where we are the re-marketer of certain IT products, commission revenue is recognized when theproducts are drop-shipped from the vendor to the customer. Our commission revenue represents thesales price to the customer less the cost paid to the vendor. Some software license arrangements alsoinclude implementation services and/or post-contract customer support. In such multi-element softwarearrangements, if the criteria are met, revenue is recognized when VSOE of the fair value of eachundelivered element has been established. Generally our license arrangements containing multipleelements do not qualify for separate accounting for the implementation services, and the softwarelicense revenue and the related costs of third-party software products are generally recognized togetherwith the software implementation services using the percentage-of-completion method. Revenue forsoftware post-contract support is recognized ratably over the term of the related agreement.

Unbilled accounts receivable represent amounts recognized as revenue based on servicesperformed in advance of billings in accordance with contract terms. Under our typicaltime-and-materials billing arrangement, we bill our customers on a regularly scheduled basis, such asbiweekly or monthly. At the end of each accounting period, we accrue revenue for services performedsince the last billing cycle. These unbilled amounts are generally billed the following month. Unbilledaccounts receivable also arise when percentage-of-completion accounting is used and costs plusestimated contract earnings exceed billings. Such amounts are billed at specific milestone dates or atcontract completion. Management expects all unbilled accounts receivable to be collected within oneyear of the balance sheet date. Billings in excess of revenue recognized are recorded as deferredrevenue and are primarily comprised of deferred software support revenue.

(e) Cash and Cash Equivalents

Cash and cash equivalents includes bank demand and time deposits, money market funds and allother highly liquid investments with maturities of three months or less when purchased. The majority ofour cash balance at December 31, 2014 and 2013 was held by our foreign subsidiaries.

(f) Accounts Receivable and Allowance for Doubtful Accounts

We record accounts receivable at their face amount less an allowance for doubtful accounts. On aregular basis, we evaluate our client receivables, especially receivables that are past due, and we

56




establish an allowance for doubtful accounts based upon specific identification of probable losses.Accounts receivable losses are deducted from the allowance and the related accounts receivablebalances are written off when the receivables are deemed uncollectible. Recoveries of accountsreceivable previously written off are recognized when received.

(g) Property and Equipment

Property and equipment, which primarily consists of computer equipment and software, furnitureand leasehold improvements, is stated at cost. Depreciation is computed using straight-line andaccelerated methods over the estimated useful lives, ranging primarily from three to seven years, or therelated lease term, if shorter. Direct costs of time and materials incurred for the development ofsoftware for internal use are capitalized as property and equipment.

(h) Long-Lived Assets (excluding Goodwill)

Long-lived assets are reviewed for impairment whenever events or circumstances indicate that thecarrying amount of an asset may not be fully recoverable. An impairment loss is recognized if thecarrying amount of a long-lived asset is not recoverable from its undiscounted cash flows and ismeasured as the difference between the carrying amount and fair value of the asset.

(i) Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable todifferences between the financial statement carrying amounts of existing assets and liabilities and theirrespective tax bases and for operating loss carryforwards. Deferred tax amounts are based on enactedtax rates expected to be in effect during the year in which the differences reverse. The effect ondeferred tax assets and liabilities due to a change in tax rates is recognized in income tax expense inthe period that includes the enactment date. Deferred tax assets and liabilities are classified as currentand non-current amounts based on the financial statement classification of the related asset andliability. A valuation allowance is provided when it is more likely than not that a deferred tax asset willnot be realized. We use a two-step approach to recognize and measure uncertain tax positions taken orexpected to be taken in an income tax return. We first determine if the weight of available evidenceindicates that it is more likely than not that the tax position will be sustained on audit, includingresolution of any related appeals or litigation processes. The second step involves measuring the taxbenefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement.

The provision for income taxes represents the estimated amounts for federal, state and foreigntaxes. The determination of the provision for income tax expense, deferred tax assets and liabilities andrelated valuation allowance requires us to assess uncertainties, make judgments regarding possibleoutcomes and utilize estimates. As a global company, we are required to calculate and provide forincome taxes in each of the tax jurisdictions where we operate. Our global operations are subject tocomplex tax regulations in numerous taxing jurisdictions, resulting at times in tax audits, disputes andpotential litigation, the outcome of which is uncertain. We must make judgments currently about suchuncertainties and determine estimates of our tax assets and liabilities. To the extent the final outcomediffers, future adjustments to our tax assets and liabilities will be necessary. As a result, our effectivetax rate may vary significantly from period to period. In addition, changes in the geographic mix and/orestimated levels of pre-tax income affect the overall effective tax rate. Interim-period tax expense is

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recorded based upon our best estimate of the effective tax rate expected to be applicable for the fullfiscal year.

(j) Foreign Currency

The assets and liabilities of our foreign operations are translated into U.S. dollars at currentexchange rates and revenues and expenses are translated at average exchange rates for the period. Theresulting translation adjustments are included in ‘‘accumulated other comprehensive income (loss)’’ onthe Consolidated Balance Sheets. Gains and losses arising from inter-company internationaltransactions that are of a long-term investment nature are reported in the same manner as translationadjustments. Foreign currency translation adjustments are reclassified into our Consolidated Statementof Operations when our interest in subsidiaries with a functional currency is substantially liquidated.

All foreign currency transaction gains and losses, including foreign currency gains and losses onshort-term inter-company loans and advances, are included in ‘‘other expense, net’’ in the ConsolidatedStatements of Operations as incurred. During 2014, we entered into multiple foreign currency forwardtransactions to reduce our exposure to changes in foreign currency exchange rates. The unrealized gain(loss) on these transactions is also recorded in ‘‘other expense, net’’ in our Consolidated Statements ofOperations.

(k) Share-Based Compensation

We record share-based compensation expense for awards of equity instruments to employees basedon the estimated grant-date fair value of these awards, over the period the employees are required toprovide services to earn the awards. Share-based compensation cost is recognized in ‘‘selling, generaland administrative expense’’ in the Consolidated Statements of Operations.

To the extent available, we issue treasury shares when option awards are exercised or RSU awardsvest. When treasury stock is not available we issue new shares of Ciber common stock for share-basedawards.

(l) Financial Instruments and Fair Values

The Company is required to disclose the fair value of all assets and liabilities subject to fair valuemeasurement and the nature of the valuation techniques, including their classification within the fairvalue hierarchy, utilized by the Company in performing these measurements.

The FASB provides a fair value framework which requires the categorization of assets andliabilities into three levels based upon the assumptions (or inputs) used to price the assets or liabilities,which are as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjustedquoted prices for identical or similar assets or liabilities in markets that are not active,or inputs other than quoted prices that are observable for the asset or liability.

Level 3: Unobservable inputs for the asset or liability that reflect the reporting entity’s ownassumptions.

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The carrying values of our cash and cash equivalents, accounts receivable and accounts payableapproximate their fair values due to their short-term nature. The fair value of our reporting unitsutilized in our annual goodwill impairment assessment, which utilizes level 3 assumptions, is discussedin Note 7. The fair value of the borrowings under our ABL Facility utilizing level 2 assumptions isdiscussed in Note 9. Restructuring liabilities for office closures, discussed in Note 15, are initiallyrecorded at estimated fair value utilizing level 3 assumptions, including an estimate of sublease incomewhich is subject to adjustment in future periods if assumptions change.

Ciber is exposed to certain risks related to its ongoing business operations. From time to time,Ciber may choose to use derivative instruments to manage certain risks related to foreign currencyexchange rates and interest rates. We recognize all derivative instruments as either assets or liabilitieson our Consolidated Balance Sheets at fair value utilizing level 2 assumptions. The accounting forchanges in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it hasbeen designated and qualifies as part of a hedging relationship and further, on the type of hedgingrelationship. All hedging instruments must be designated, based on the exposure being hedged, as a fairvalue hedge, a cash flow hedge or a hedge of a net investment in a foreign operation.

For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss onthe effective hedge portion of the derivative instrument is reported as a component of ‘‘accumulatedother comprehensive income (loss)’’ on the Consolidated Balance Sheets and is reclassified intoearnings in the same period during which the hedged transaction affects earnings. The change in theamounts are reported in the Consolidated Statement of Comprehensive Income (Loss). The gain orloss is classified in the same statement of operations line item as the associated item being hedged.

From time to time, Ciber will also enter into foreign currency forward contracts related tocustomer agreements or intercompany transactions denominated in a foreign currency or related tocertain forecasted foreign operating results. At December 31, 2014, we have entered into multipleforeign currency forward transaction to mitigate our exposure to fluctuations in the the euro, theIndian Rupee, the pound sterling, the Norwegian krone, the Swedish krona, and the Australian Dollarrelated to inter-company transactions. We have not elected hedge accounting for these derivatives.These fair values are recorded in ‘‘prepaid expenses and other current assets’’ and ‘‘other accruedexpenses and liabilities,’’ respectively, in our Consolidated Balance Sheet. At December 31, 2013, wedid not have any material outstanding derivative instruments. For more information on our derivativeinstruments see Note 10.

(m) Business and Credit Concentrations

Financial instruments that are potentially subject to concentrations of credit risk are cash and cashequivalents and accounts receivable. Our cash and cash equivalents are primarily invested in high-creditquality short-term, interest-bearing accounts with financial institutions. Accounts receivable arereviewed on a periodic basis and an allowance for bad debts is recorded where such amounts aredetermined to be uncollectible. We do not require collateral from our customers. Our revenue andaccounts receivable are principally concentrated with large companies across several industries andgovernmental entities located throughout the United States and Europe.

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(n) Comprehensive Income (Loss)

Comprehensive income (loss) includes changes in the balances of items that are reported directlyas separate components of shareholders’ equity. Comprehensive income (loss) includes net income pluschanges in cumulative foreign currency translation adjustment, net of taxes.

The balance of ‘‘accumulated other comprehensive income (loss)’’ reflected on the ConsolidatedBalance Sheets was comprised of the following:

ForeignCurrency

Translation

(in thousands)

Balance at January 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 208

Amount reclassified from accumulated other comprehensive income . . 1,008Change in foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . 1,880

Balance at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,096

Change in foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . (20,339)

Balance at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(17,243)

(o) Contingencies

We are subject to various claims and litigation that arise in the ordinary course of business. Thelitigation process is inherently uncertain. Therefore, the outcome of such matters is not predictable.

As previously reported, we are engaged in legal proceedings in Germany in connection with ouracquisition of a controlling interest in Novasoft AG (now known as Ciber AG) in 2004. In August 2006,we completed a buy-out of the remaining minority shareholders of Novasoft. Certain of those formerminority shareholders challenged the adequacy of the buy-out consideration by initiating a review bythe district court in Mannheim, Germany. The court made a determination in 2013 which is now underappeal by the plaintiffs. Based on information known to us, we have established a reserve that webelieve is reasonable. We are unable to predict the outcome of this matter.

As previously reported, a lawsuit titled CamSoft Data Systems, Inc. v. Southern Electronics, et al.,was filed initially in October 2009 in Louisiana state court against numerous defendants, includingCiber. The lawsuit was subsequently removed to federal court in the Middle District of Louisiana andthe complaint was amended to include additional defendants and causes of action including antitrustclaims, civil RICO claims, unfair trade practices, trade secret, fraud, unjust enrichment, and conspiracyclaims. The suit involves many of the same parties involved in related litigation in the state court inNew Orleans, which was concluded in 2009 when Ciber settled the New Orleans suit with the plaintiffs,Active Solutions and Southern Electronics, who were CamSoft’s former alleged joint venturers and arenow co-defendants in the current lawsuit. Ciber is vigorously defending the allegations. Proceedings inthe federal appellate courts concluded in January 2015 with the matter remanded back to state court.Based on information known to us, we have established a reserve that we believe is reasonable. We areunable to predict the outcome of this litigation.

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As previously reported, in February 2012, a purported verified shareholder derivative lawsuit,Seni v. Peterschmidt. et al., was filed in the United States District Court for the District of Coloradoagainst several of our current and former officers and our then-current board of directors. Thiscomplaint generally alleged that the various defendants breached their fiduciary duties of good faith,fair dealing, loyalty, due care, reasonable inquiry, oversight, and supervision by approving the issuanceof allegedly false statements that misrepresented material information about the finances andoperations of the Company. On March 22, 2013, the Court dismissed this complaint with leave toamend. On April 26, 2013, plaintiff filed an amended complaint that largely made the same claims asthe original complaint. In February 2014, the Court dismissed the amended complaint with leave toamend. Plaintiff filed a second amended complaint and defendants filed a motion to dismiss the secondamended complaint in March 2014. In November 2014, a federal magistrate judge recommended thatthe defendants’ motion to dismiss be granted. The plaintiff did not file any objection. We await thedecision of the Court to uphold the magistrate judge’s recommendation. We are unable to predict theoutcome of this litigation.

In March 2012, a shareholder, Valerie Denny, made a litigation demand on the board of directorsto investigate certain allegations and bring suit against the directors and certain current and formerexecutive officers of the Company. In response, the board of directors formed an IndependentCommittee to investigate the claims. In December 2012, after the Independent Committee completedits investigation, it reported its findings to the board of directors. Based upon the IndependentCommittee’s findings that Denny’s claims were without merit, the board of directors formally refusedthe demand. In February 2014, Denny filed a purported verified shareholder derivative lawsuit,Denny v. Peterschmidt, et al., in Colorado State court, Arapahoe County, against certain current andformer officers and directors. This complaint generally made the same allegations as set out in Denny’sMarch 2012 demand. The Complaint alleged that between December 15, 2010, and August 3, 2011, thedefendants committed breaches of fiduciary duty that caused losses to Ciber’s reputation and goodwill.The defendants were alleged to have breached their fiduciary duties by disseminating inaccurate andincomplete information about Ciber’s financial results and business prospects, failing to maintaininternal controls, and failing to properly oversee and manage the Company. Denny also made claims ofunjust enrichment and insider trading. In March 2014, Defendants filed a motion to stay the actionpending resolution of the federal derivative action (Seni v. Peterschmidt), as well as motions to dismissthe action, and an answer to the complaint. In response to those motions, Denny agreed to stay thecase. The court therefore issued an order staying the action on March 24, 2014. We intend tovigorously defend against the claims. We are, however, unable to predict the outcome of this litigation.

(p) Recently Issued Accounting Pronouncements

In April 2014, the Financial Accounting Standards Board (FASB) issued Accounting StandardsUpdate No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Componentsof an Entity (‘‘ASU 2014-08’’). This update raises the threshold for disposals to qualify as discontinuedoperations, and allows companies to have significant continuing involvement and continuing cash flowswith the discontinued operation. ASU 2014-08 is effective for annual periods beginning on or afterDecember 15, 2014, and interim periods within that year. The guidance is applied prospectively, andearly adoption is permitted but only for disposals that have not been reported in financial statementspreviously issued or available for issue. This ASU may impact our assessment of future disposals, if any,once adopted.

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In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue fromContracts with Customers (Topic 606) (‘‘ASU 2014-09’’). The core principle of the standard is when anentity transfers goods or services to customers, it will recognize revenue in an amount that reflects theconsideration the entity expects to be entitled to for those goods or services. The update outlines afive-step model and related application guidance, which replaces most existing revenue recognitionguidance. ASU 2014-09 is effective for annual periods beginning after December 15, 2016, and forinterim periods within that year, and allows for both retrospective and prospective methods ofadoption. We are currently evaluating the impact of implementing this guidance on our consolidatedfinancial statements, as well as which transition method we intend to use.

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, ‘‘Presentation ofFinancial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’sAbility to Continue as a Going Concern’’ (‘‘ASU 2014-15’’), which requires management to evaluate, ateach annual and interim reporting period, whether there are conditions or events that raise substantialdoubt about the entity’s ability to continue as a going concern within one year after the date thefinancial statements are issued and provide related disclosures. ASU 2014-15 is effective for annualperiods ending after December 15, 2016, and interim periods thereafter. Early adoption is permitted.We do not anticipate that this guidance will materially impact our consolidated financial statements.

(2) Discontinued Operations

During the second quarter of 2013, we closed down our Russian operations and met the criteriafor this business to be reported as a discontinued operation. Accordingly, the operations and cash flowswere removed from our consolidated operating results. In connection with the substantial liquidation ofour Russian investment in the fourth quarter of 2013, we released the related cumulative translationadjustment of approximately $1 million from accumulated other comprehensive income into loss fromdiscontinued operations. In 2012, we sold substantially all of the assets and certain liabilities of ourFederal division as well as certain contracts and related property and equipment and certain otherassets associated with our information technology outsourcing (‘‘ITO’’) practice, which have both beenpreviously reported as discontinued operations. In connection with the sale of the Federal division andITO practice, we retained certain assets and liabilities. Some of these items, including certain possiblecontingent liabilities, may not be settled for several years. Accordingly, adjustments to such items, aswell as administrative expenses associated with these discontinued businesses, are recorded through ourresults of discontinued operations.

To report the results of discontinued operations, we are required to adjust the reported results ofthe business sold or shut down from those previously reported as part of operating income by reportingsegment. These adjustments eliminate corporate overhead allocations and adjust for costs of thebusiness that will not be recognized on a going-forward basis. These adjustments have been made forall periods presented.

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(2) Discontinued Operations (Continued)

The following table summarizes the operating results of the discontinued operations included inthe Consolidated Statements of Operations.


2014 2013 2012

(In thousands)

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 5,424 $ 90,777Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792 11,177 93,319

Operating loss from discontinued operations . . . . . . . . . . . . . . . . . . . . (792) (5,753) (2,542)Interest and other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1,008 90

Loss from discontinued operations before income taxes . . . . . . . . . . . . (792) (6,761) (2,632)Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 211 808

Loss from discontinued operations, net of taxes . . . . . . . . . . . . . . . . . . (792) (6,972) (3,440)

Gain (loss) on sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 48 (7,256)Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (687)

Gain (loss) on sale, net of income taxes . . . . . . . . . . . . . . . . . . . . . . . . — 48 (6,569)

Total loss from discontinued operations, net of income taxes . . . . . . . $(792) $(6,924) $(10,009)

(3) Acquisitions

In April 2014, we acquired certain contracts, software assets, and liabilities from an entity inDenmark. In accordance with authoritative accounting guidance for business combinations, therespective purchase price for this acquisition is allocated to the assets and liabilities acquired based ontheir estimated fair values. The excess purchase price over the respective fair values of assets isrecorded as goodwill in our International segment. All goodwill associated with this acquisition isexpected to be deductible for tax purposes. We paid approximately $0.8 million in cash at closing, andhave agreed to additional future royalty payments limited to approximately $1.1 million. This contingentconsideration is based on future software sales through the third quarter of 2017, and the fair value wasrecorded using a probability weighted approach based on management’s estimates using Level 3 inputs.The purchase price was allocated as follows: $1.4 million of intangible and other assets fair valuedbased on development costs, $1.3 million of goodwill, and $0.8 million of current liabilities.

In 2011 we fixed the value of the future acquisition-related contingent consideration for our 2010acquisition of Segmenta A/S at approximately $10 million, of which $2.1 million was paid in 2011. OnMay 31, 2013, we paid $7.1 million to settle this liability. The change in management’s estimate of theamount to be paid was recorded in ‘‘other expense, net’’ on the Consolidated Statements ofOperations. The liability was recorded in ‘‘other accrued expenses and liabilities’’ on the Consolidated

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(3) Acquisitions (Continued)

Balance Sheets, and changes in the value of the liability from January 1, 2012 through December 31,2013 were due to the following:

Contingent Consideration

(In thousands)

Balance at January 1, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,476

Interest expense accretion . . . . . . . . . . . . . . . . . . . . . . . . . . 396Foreign exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . 114

Balance at December 31, 2012 . . . . . . . . . . . . . . . . . . . . . . . 6,986

Interest expense accretion . . . . . . . . . . . . . . . . . . . . . . . . . . 176Foreign exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . (97)Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,065)

Balance at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . $ —

(4) Loss Per Share

The details of our net loss attributable to Ciber, Inc. is as follows:


2014 2013 2012

(In thousands)

NET LOSS FROM CONTINUING OPERATIONS . . . . . . . . . . . . . . $(18,757) $ (7,607) $ (4,073)Net income (loss) attributable to noncontrolling interests . . . . . . . . . . 55 (11) 545

Net loss attributable to Ciber, Inc. from continuing operations . . . . . (18,812) (7,596) (4,618)Loss from discontinued operations, net of income tax . . . . . . . . . . . (792) (6,924) (10,009)

Total net loss attributable to Ciber, Inc. . . . . . . . . . . . . . . . . . . . $(19,604) $(14,520) $(14,627)

Dilutive securities, including stock options and restricted stock units, are excluded from the dilutedweighted average shares outstanding computation in periods in which they have an anti-dilutive effect,such as when we report a net loss attributable to Ciber, Inc. from continuing operations or when stockoptions have an exercise price that is greater than the average market price of Ciber common stockduring the period. Because we had a net loss attributable to Ciber, Inc. from continuing operations forthe years ended, December 31, 2014, 2013 and 2012, approximately 3.7 million, 6.1 million and9.0 million anti-dilutive securities were excluded from the loss per share calculations.

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(5) Accounts Receivable

Accounts receivable consists of the following:

December 31,

2014 2013

(In thousands)

Billed accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . $134,040 $153,011Unbilled—scheduled billings . . . . . . . . . . . . . . . . . . . . . . . . . 22,258 29,993Costs and estimated earnings in excess of billings . . . . . . . . . . 19,994 8,713

176,292 191,717Less allowance for doubtful accounts . . . . . . . . . . . . . . . . . . . (2,842) (2,335)

Accounts receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . $173,450 $189,382

The activity in the allowance for doubtful accounts consists of the following:

Additions Effect ofBalance at Charge foreign BalanceDeductionsbeginning to cost and exchange at endof period expense Write-offs rate changes of period

(In thousands)

Year ended December 31, 2012 . . . . . . . . . . . $1,422 825 (580) 85 $1,752Year ended December 31, 2013 . . . . . . . . . . . $1,752 1,813 (1,312) 82 $2,335Year ended December 31, 2014 . . . . . . . . . . . $2,335 730 (24) (199) $2,842

(6) Property and Equipment

Property and equipment consists of the following:

December 31,

2014 2013

(In thousands)

Computer equipment and software . . . . . . . . . . . . . . . . . . . . . $ 45,173 $ 44,403Furniture and fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,090 9,525Leasehold improvements and other . . . . . . . . . . . . . . . . . . . . . 6,723 7,495

60,986 61,423Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . (46,871) (48,500)

Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . $ 14,115 $ 12,923

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(7) Goodwill

The changes in the carrying amount of goodwill are as follows:

International North America Total

(In thousands)

Balance at January 1, 2013 . . . . . . . . . . . . . . $142,918 $133,681 $276,599Effect of foreign exchange rate changes . . . . . 4,359 — 4,359Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 756 — 756

Balance at December 31, 2013 . . . . . . . . . . . . 148,033 133,681 281,714

Effect of foreign exchange rate changes . . . . . (15,409) — (15,409)Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . 1,282 — 1,282

Balance at December 31, 2014 . . . . . . . . . . . . $133,906 $133,681 $267,587

We perform our annual impairment analysis of goodwill as of June 30 each year or more often ifthere are indicators of impairment present. We test each of our reporting units for goodwillimpairment. Our reporting units are the same as our operating divisions and reportable segments. Thegoodwill impairment test requires a two-step process. The first step consists of comparing the estimatedfair value of each reporting unit with its carrying amount, including goodwill. If the estimated fair valueof a reporting unit exceeds its carrying value, then it is not considered impaired and no further analysisis required. If step one indicates that the estimated fair value of a reporting unit is less than its carryingvalue, then impairment potentially exists and the second step is performed to measure the amount ofgoodwill impairment. Goodwill impairment exists when the estimated implied fair value of a reportingunit’s goodwill is less than its carrying value.

We compared the carrying values of our International and North America reporting units to theirestimated fair values at June 30, 2014. We estimated the fair value of each reporting unit based on aweighting of both the income approach and the market approach. The discounted cash flows for eachreporting unit serve as the primary basis for the income approach, and were based on discrete financialforecasts developed by management. Cash flows beyond the discrete forecast period of five years wereestimated using the perpetuity growth method calculation. The annual average revenue growth ratesforecasted for our reporting units for the first five years of our projections were approximately 3%. Wehave projected a minor amount of operating profit margin improvement based on expected marginbenefits from certain internal initiatives. The terminal value was calculated assuming projected growthrates of 3% after five years, which reflects our estimate of minimum long-term growth in IT spending.The income approach valuations also included each reporting unit’s estimated weighted average cost ofcapital, which were 14.5% and 15% for International and North America, respectively. The marketapproach applied pricing multiples derived from publicly-traded companies that are comparable to therespective reporting units to determine their values. For our International and North America reportingunits, we used enterprise value/EBITDA multiples of 7 and 6, respectively, in order to value each ofour reporting units under the market approach. In addition, the fair value under the market approachincluded a control premium of 33%. The control premium was determined based on a review ofcomparative market transactions. Publicly-available information regarding our market capitalization wasalso considered in assessing the reasonableness of the cumulative fair values of our reporting units.

As a result of the first step of our goodwill impairment test as of June 30, 2014, we estimated thatthe fair values for our International and North America reporting units exceeded their carrying

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(7) Goodwill (Continued)

amounts by 21% and 59%, respectively, thus no impairment was indicated. As of June 30, 2014, weupdated our cash flow forecasts and our other assumptions used to calculate the estimated fair value ofour reporting units to account for our beliefs and expectations of the current business environment.While we believe our estimates are appropriate based on our view of current business trends, noassurance can be provided that impairment charges will not be required in the future.

For the quarter ended December 31, 2014, we reviewed for indicators of impairment and believedthat the sustained decline in our share price warranted an interim test for goodwill impairment for ourreporting units. We compared the carrying values of our International and North America reportingunits to their estimated fair values at December 31, 2014. We estimated the fair value of each reportingunit based on a weighting of both the income approach and the market approach. We used similarmethodologies as during our annual impairment test date of June 30, 2014, and updated our businessand valuation assumptions for the income and market approach. The discounted cash flow method(income approach) incorporates various Level 3 inputs including projected revenue growth rates,earnings margins, and the present value, based on the discount rate and terminal growth rate, offorecasted cash flows. The annual average revenue growth rates forecasted for our reporting units forthe first five years of our projections were approximately 3%. Again, we projected a minor amount ofoperating profit margin improvement based on expected margin benefits from certain internalinitiatives. The terminal value was calculated assuming projected growth rates of 3% after five years,which reflects our estimate of minimum long-term growth in IT spending. The income approachvaluations also included each reporting unit’s estimated weighted average cost of capital, which were16% and 14.5% for International and North America, respectively. The market approach appliedpricing multiples derived from publicly-traded companies that are comparable to the respectivereporting units to determine their values. For our International and North America reporting units, weused enterprise value/EBITDA multiples of approximately 8 and 6, respectively in order to value eachof our reporting units under the market approach. In addition, the fair value under the marketapproach included a control premium of 30%. The control premium was determined based on a reviewof comparative market transactions. Publicly-available information regarding our market capitalizationwas also considered in assessing the reasonableness of the cumulative fair values of our reporting units.

As a result of the first step of our interim goodwill impairment test as of December 31, 2014, weestimated that the fair values for our International and North America reporting units exceeded theircarrying amounts by 28% and 86%, respectively, thus no impairment was indicated. We updated ourcash flow forecasts and our other assumptions used to calculate the estimated fair value of ourreporting units to account for our beliefs and expectations of the current business environment. Whilewe believe our estimates are appropriate based on our view of current business trends, no assurancecan be provided that impairment charges will not be required in the future.

(8) Operating Leases

We have non-cancelable operating leases primarily for our office space, automobiles and officeequipment. Expense for operating leases totaled approximately $24.4 million, $25.4 million and$29.7 million in 2014, 2013 and 2012, respectively.

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(8) Operating Leases (Continued)

Future minimum operating lease payments as of December 31, 2014, are:

Rental Payments

(In thousands)

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,4342016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,7082017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,5392018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,0272019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,770Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,984

$65,462

(9) Borrowings

We have an asset-based revolving line of credit of up to $60 million (the ‘‘ABL Facility’’) withWells Fargo Bank, N.A. The amount available for borrowing at any time under such line of credit isdetermined according to a borrowing base valuation of eligible account receivables, which was$48.6 million at December 31, 2014. The ABL Facility provides for borrowings in the United States, theNetherlands, the United Kingdom and Germany and matures on May 7, 2017. As of December 31,2014, we had $11.4 million of borrowings outstanding under the ABL Facility. We expect ourborrowings to fluctuate based on our working capital needs. Our obligations under the ABL Facility areguaranteed by us and are secured by substantially all of our U.S., Netherlands, United Kingdom, andGerman assets. There are no specific financial covenants required under the ABL Facility atDecember 31, 2014.

Under the ABL Facility, U.S. borrowings accrue interest at a rate of the London interbank offeredrate (‘‘LIBOR’’) plus a margin ranging from 225 to 275 basis points , or, at our option, a base rateequal to the greatest of (a) the Federal Funds Rate plus 0.50%, (b) LIBOR plus 1%, and (c) the‘‘prime rate’’ set by Wells Fargo plus a margin ranging from 125 to 175 basis points. All foreignborrowings accrue interest at a rate of LIBOR plus a margin ranging from 225 to 275 basis points, pluscertain fees related to compliance with European banking regulations. The interest rates applicable toborrowings under the ABL Facility are subject to increase during an event of default. We are alsorequired to pay an unused line fee ranging from 0.375% to 0.50% annually on the unused portion ofthe ABL Facility. During the year ended December 31, 2014, our weighted average interest rate on ouroutstanding borrowing under the ABL Facility was 4.05%.

The ABL Facility can be prepaid in whole or in part at any time. The ABL Facility must be repaidto the extent that any borrowings exceed the maximum availability allowed under the ABL Facility. TheABL Facility also includes a number of business covenants, including customary limitations on, amongother things, indebtedness, liens, investments, guarantees, mergers, dispositions, acquisitions,liquidations, dissolutions, issuances of securities, payments of dividends, loans and advances, andtransactions with affiliates. We were in compliance with all such covenants at December 31, 2014.

Wells Fargo will take dominion over our U.S. cash and cash receipts and will automatically applysuch amounts to the ABL Facility on a daily basis if (i) an event of default has occurred and iscontinuing, (ii) less than 30% of the ABL Facility or less than $18 million is available for borrowing

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(9) Borrowings (Continued)

under the ABL Facility for 5 consecutive days, or (iii) less than 25% of the ABL Facility or less than$15 million is available for borrowing under the ABL Facility at any time. Wells Fargo will continue toexercise dominion over our U.S. cash and cash receipts until (1) no event of default is continuing and(2) at least 30% of the ABL Facility and a minimum of $18 million have been available for borrowingunder the ABL Facility for 30 consecutive days. In addition, at all times during the term of the ABLFacility, Wells Fargo will have dominion over the cash of the United Kingdom, Dutch and Germanborrowers when a balance is outstanding to those entities and will automatically apply such amounts tothe ABL Facility on a daily basis. As a result, if we have any outstanding borrowings that are subject tothe bank’s dominion, such amounts will be classified as a current liability on our balance sheet. AtDecember 31, 2014, we had no foreign borrowings that were subject to the bank’s dominion.

The ABL Facility generally contains customary events of default for credit facilities of this type,including nonpayment, material inaccuracy of representations and warranties, violation of covenants,default of certain other agreements or indebtedness, bankruptcy, material judgments, invalidity of theABL Facility or related agreements, and a change of control.

In connection with the ABL Facility, we capitalized debt issuance costs that we are amortizing tointerest expense over the terms of the borrowing arrangements. At December 31, 2014, the balance ofunamortized debt fees was $1.3 million.

The carrying value of the outstanding borrowings under the ABL Facility approximates its fairvalue as (1) it is based on a variable rate that changes based on market conditions and (2) the marginapplied to the variable rate is based on our credit risk, which has not changed materially since enteringinto the facility in May 2012. If our credit risk were to change, we would estimate the fair value of ourborrowings using discounted cash flow analysis based on current rates obtained from the lender forsimilar types of debt. The inputs used to establish the fair value of the ABL Facility are considered tobe level 2 inputs, which include inputs other than quoted prices included in level 1 that are observablefor the asset or liability, either directly or indirectly.

Long-Term Debt—Long-term debt consisted of the following:

December 31,

2014 2013

(In thousands)

Total bank debt—Revolving credit facility . . . . . . . . . . . . . . . . . . . . $11,402 $—Capital lease obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 53

Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,402 53Less current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 53

Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,402 $—

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(9) Borrowings (Continued)

Maturities—Maturities of bank debt were determined to be as follows:

Amount Maturing

(In thousands)

2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ —2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,402

$11,402

(10) Financial Instruments

We are exposed to certain risks related to our ongoing business operations. From time to time, wemay choose to use derivative instruments to manage certain risks related to foreign currency exchangerates and interest rates.

During 2014, we entered into various foreign currency forwards related to intercompanytransactions denominated in a foreign currency. These forwards allow us to manage our foreigncurrency exposure with respect to the the euro, the Indian Rupee, the pound sterling, the Norwegiankrone, the Swedish krona, and the Australian Dollar. The duration of these contracts generally rangesfrom one to three months and we are generally entering into new contracts on a monthly basis. Wehave not elected hedge accounting for these derivatives. During 2014, we had a net gain on our foreigncurrency forward contracts of approximately $1.0 million which is included in ‘‘other income (expense)’’on the Consolidated Statement of Operations. Each forward is recognized as either an asset or liabilityon our Consolidated Balance Sheets at fair value and is presented in either ‘‘prepaid expenses andother current assets’’ or ‘‘other accrued expenses and liabilities,’’ as applicable. All cash flows associatedwith these forward instruments are classified as operating cash flows in our Consolidated Statement ofCash Flows.

The following table summarizes our outstanding foreign currency forward contracts atDecember 31, 2014:

Currency Purchased Currency SoldForward Forward Maturity Date

NOK 29,000,000 EUR 3,212,513 1/30/2015USD 6,000,000 EUR 4,951,312 1/30/2015USD 6,000,000 EUR 4,836,759 1/30/2015GBP 3,300,000 EUR 4,225,352 1/30/2015AUD 2,000,000 EUR 1,343,815 1/30/2015EUR 1,100,000 SEK 10,366,620 1/30/2015INR 380,577,000 USD 6,000,000 1/30/2015INR 108,099,880 EUR 1,400,000 1/30/2015

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(11) Other Income (Expense)

Other income (expense), net consisted of the following:


2014 2013 2012

(In thousands)

Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 536 $857 $ 618Foreign exchange losses, net . . . . . . . . . . . . . . . . . . . . . . . (1,985) (16) (462)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 — 103

Other income (expense), net . . . . . . . . . . . . . . . . . . . . . $(1,385) $841 $ 259

(12) Income Taxes

Income tax expense from continuing operations consists of the following:


2014 2013 2012

(In thousands)

Current:Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2 $ (496) $ 36State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . (79) 70 280Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,096 4,148 5,816

3,019 3,722 6,132

Deferred:Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,824 3,396 4,528State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 611 647Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,117) (1,301) (283)

2,916 2,706 4,892

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . $ 5,935 $ 6,428 $11,024

U.S. and foreign income (loss) from continuing operations before income taxes are as follows:


2014 2013 2012

(In thousands)

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1,600) $(3,487) $(5,058)Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,222) 2,308 12,009

Income (loss) before income taxes . . . . . . . . . . . . . $(12,822) $(1,179) $ 6,951

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(12) Income Taxes (Continued)

U.S. and foreign income tax expense are as follows:


2014 2013 2012

(In thousands)

United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,956 $3,581 $ 5,491Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,979 2,847 5,533Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,935 $6,428 $11,024

Income tax expense differs from the amounts computed by applying the statutory U.S. Federalincome tax rate to income (loss) before income taxes as a result of the following:


2014 2013 2012

(In thousands)

Income tax expense (benefit) at the federal statutoryrate of 35% . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(4,488) $ (413) $ 2,433

Increase (decrease) resulting from:State income taxes, net of federal income tax benefit 95 443 927Non-deductible other costs . . . . . . . . . . . . . . . . . . . 2,623 1,329 1,678Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . 6,200 6,752 8,039Foreign cash repatriation . . . . . . . . . . . . . . . . . . . . . (530) (2,783) —Impact of foreign tax . . . . . . . . . . . . . . . . . . . . . . . . (5,719) (1,002) (2,347)Provision for uncertain tax position . . . . . . . . . . . . . 8,621 2,208 1,064Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (867) (106) (770)

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . $ 5,935 $ 6,428 $11,024

The components of the net deferred tax asset or liability are as follows:

December 31,

2014 2013

(In thousands)

Deferred tax assets:Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,741 $ 9,904Federal tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . 16,944 15,837U.S. net operating loss (‘‘NOL’’) carryforwards . . . . . . . . . . 18,452 13,206Foreign NOL carryforwards . . . . . . . . . . . . . . . . . . . . . . . . 8,818 7,500Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,714 6,445

Total gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . 60,669 52,892Less valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . (56,942) (51,160)

Deferred tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . 3,727 1,732Deferred tax liabilities:

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (27,947) (23,914)Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,830) (883)

Total gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . (29,777) (24,797)Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . $(26,050) $(23,065)

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Significant management judgment is required in determining the provision for income taxes,deferred tax assets and liabilities, and any valuation allowance recorded against net deferred tax assets.We are required to estimate income taxes in each jurisdiction where we operate. This process involvesestimating actual current tax exposure together with assessing temporary differences resulting fromdiffering treatment of items. These differences result in deferred tax assets and liabilities, which areincluded in the Consolidated Balance Sheets. We assess the likelihood that our deferred tax assets willbe recovered from future taxable income and, to the extent recovery is believed unlikely, we establish avaluation allowance. Changes in the valuation allowance for deferred tax assets impact our income taxexpense during the period.

The establishment of a valuation allowance does not impair our ability to utilize the deferred taxassets, such as net operating loss and tax credit carryforwards, upon achieving sufficient profitability. Aswe generate domestic taxable income in future periods, we do not expect to record significant relateddomestic income tax expense until the valuation allowance is significantly reduced. As we are able todetermine that it is more likely than not that we will be able to utilize the deferred tax assets, we willreduce our valuation allowance. At December 31, 2014, we have Federal net operating loss (‘‘NOL’’)and Federal tax credit carryforwards of approximately $45 million and $21 million, respectively. U.S.NOL carryforwards of $2 million begin to expire in 2022 while the remaining NOL carryforwards donot begin to expire until 2031. Our Federal tax credit carryforwards are subject to certain annual usagelimits, but do not begin to expire until 2025. At December 31, 2014, we also have approximately$51 million of foreign NOL carryforwards. We have recorded a valuation allowance for most all of ourforeign NOL carryforwards, as we do not believe it is more likely than not that we will utilize them.Approximately 54% of the foreign NOL carryforwards may expire.

At December 31, 2014, we estimate the undistributed earnings and profits of our foreignsubsidiaries that would be subject to U.S. taxes totaled approximately $41 million. Quantification of theU.S. deferred tax liability associated with indefinitely reinvested earnings and profits is not practicable.

We account for uncertain tax positions by recognizing the financial statement effects of a taxposition only when based upon the technical merits, it is ‘‘more-likely-than-not’’ that the tax position

73




will be sustained upon examination. The changes in the balance of our unrecognized tax benefits wereas follows:

UnrecognizedTax Benefits

(In thousands)

Balance at January 1, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,528Increases related to prior year tax positions . . . . . . . . . . . . . . . . . . . . 108Increases related to current year tax positions . . . . . . . . . . . . . . . . . . 1,103Decreases related to settlements with tax authorities . . . . . . . . . . . . . . (2,118)Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (147)

Balance at January 1, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,474

Increases related to prior year tax positions (net) . . . . . . . . . . . . . . . . 51Increases related to current year tax positions . . . . . . . . . . . . . . . . . . 2,157

Balance at December 31, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,682

Increases related to prior year tax positions (net) . . . . . . . . . . . . . . . . 71Increases related to current year tax positions . . . . . . . . . . . . . . . . . . 7,116

Balance at December 31, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14,869

Our unrecognized tax benefits totaled $14.9 million at December 31, 2014. During 2014, thesignificant fluctuation in the Euro to the U.S. dollar conversion rate reduced the overall outstandingliability by $1.4 million, this has been netted against the current year increase. If recognized, all ofthese benefits would affect our future income tax expense, prior to the impact of any related valuationallowance. We believe that it is not reasonably possible that any significant unrecognized tax benefitswill be released in the next twelve months. Note that the amounts recorded for our unrecognized taxbenefits represent management estimates, and actual results could differ which would impact oureffective tax rate. Interest and penalties related to income tax liabilities are included in income taxexpense in the consolidated statements of operations. We have not recorded a material amount ofinterest and penalties during 2014, 2013, and 2012.

We file a U.S. Federal income tax return and tax returns in nearly all U.S. states, as well as innumerous foreign jurisdictions. We are routinely subject to examination by various domestic and foreigntax authorities. The outcome of tax audits is always uncertain and could result in cash tax paymentsthat could be material. Additionally, tax audits may take long periods of time to ultimately resolve. Wedo not believe the outcome of any tax audits at December 31, 2014, will have a material adverse effecton our consolidated financial position or results of operations. With limited exception, we are no longersubject to U.S. Federal and state income tax audits for years through 2010. Our most significant foreignoperations and the most recent year for which they are no longer subject to tax examination are asfollows: Germany—2009; India—2008; Netherlands—2010; Norway—2003; and the UK—2012.

(13) 401(k) Savings Plan

Almost all of our U.S. employees are eligible to participate in our 401(k) savings plan. We match aportion of the employees’ contribution and the vesting of this matching contribution occurs over sixyears. Forfeitures reduce our matching contributions. We record forfeitures when a participant’s

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(13) 401(k) Savings Plan (Continued)

employment ends. We recorded expense of $1.3 million, $1.3 million and $1.0 million in 2014, 2013 and2012, respectively, related to this plan.

(14) Shareholders’ Equity

Share-Based Compensation—On April 27, 2004, our shareholders approved the adoption of theCiber, Inc. 2004 Incentive Plan (the ‘‘2004 Plan’’). To date, 20,350,000 shares of Ciber, Inc. commonstock have been authorized for issuance under the 2004 Plan. The Compensation Committee of theBoard of Directors may grant restricted stock, stock options, performance units or any combinationthereof, to officers, employees and consultants and determines the number, nature and vesting of suchawards. As of December 31, 2014, there were 7,513,976 shares available for future grants under the2004 Plan.

On November 9, 2010, the Board of Directors adopted a new non-employee director compensationprogram effective January 1, 2011. Under the new program, upon election or appointment to the Boardof Directors, non-employee directors are granted restricted stock units (‘‘RSUs’’) valued at $100,000 ofour common stock (the ‘‘initial grant’’) and non-employee directors are granted RSUs valued at$100,000 of our common stock annually (the ‘‘annual grant’’). The initial grant and annual grant vest inequal quarterly installments over a period of three years and one year, respectively. Compensationexpense for equity grants to non-employee directors was approximately $842,000, $558,000, and$517,000 for the years ended December 31, 2014, 2013, and 2012, respectively, and is included in ourtotal recorded share-based compensation costs.

In September 2014, we made an inducement grant of 815,217 options and 804,721 RSUs to ournew president and chief executive office, Michael Boustridge, as well as 150,000 RSUs to our new chiefadministrative officer, Tina Piermarini. The above option inducement grant was granted with anexercise price equal to the market value of our common stock on the date of issuance. These grantswere made outside of the 2004 Plan and are not subject to shareholder approval.

The table below summarizes the amounts recorded in the Consolidated Statements of Operationsfor share-based compensation:


2014 2013 2012

(In thousands)

Share-based compensation costs—continuing operations $11,405 $11,746 $7,282Share-based compensation costs—discontinued

operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 269

Total share-based compensation costs included inconsolidated net loss . . . . . . . . . . . . . . . . . . . . . . . . $11,405 $11,746 $7,551

Options

Options granted under the 2004 Plan generally have an exercise price that is equal to the marketvalue of our common stock on the date of issuance. We did not grant any options under the 2004 Planduring 2014 or 2013. Options granted during 2012 under the 2004 Plan are subject to a six months cliffand graded vesting thereafter over 2.5 years. In general, graded vesting under the 2004 Plan ranges

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(14) Shareholders’ Equity (Continued)

from two to three years, as determined at the date of grant by the Board of Directors, with theexception of some options granted to employees of our International segment, which may be fullyvested on the grant date. Additionally, options granted under the 2004 Plan have contractual termsranging from four to 10 years, but all 2004 Plan options must expire no later than 10 years from thegrant date. Options granted in 2012 under 2004 Plan have a contractual term of seven years.

As mentioned above, we made an inducement option grant to our new CEO in September of2014. These options vest monthly over 2.5 years and expire after 7 years. The exercise price is equal toour common stock on the date of issuance.

The fair value of each option award is estimated on the date of grant using the Black-Scholesoption pricing method. Compensation costs related to options with graded vesting are recognized on astraight-line basis over the vesting period, unless a tranche vests immediately, in which casecompensation costs are expensed ratably. The expected life for options with a contractual life of10 years is derived from historical data pertaining to option exercises and employee terminations. Theexpected life for options with a contractual life of less than 10 years is derived using the SEC’s‘‘simplified method,’’ as we do not have sufficient historical data pertaining to options with contractuallives of less than 10 years upon which to base an expected term assumption. Expected volatilities arebased on historical volatility of our common stock. The risk-free interest rate is derived from the U.S.Treasury yields in effect at the time of grant and the dividend yield is based on historical experienceand expected future changes.

A summary of the weighted average assumptions used to value options granted and the grant datefair value follows:


2014 2012

Expected life (in years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4 4.4Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.43% 0.63%Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52% 70%Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0% 0%Fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.59 $2.13

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A summary of stock option activity for 2014 is presented below:

WeightedAverage

Weighted RemainingAverage Contractual Aggregate

Number of Exercise Term IntrinsicOptions Price (In Years) Value

(In thousands, except per share amounts or asotherwise disclosed)

Outstanding at January 1, 2014 . . . . . . . . . . . . . . . . . . . . 5,377 $4.33Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 815 $3.68Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,268) $3.46Expired or canceled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,080) $6.89Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (90) $3.41

Outstanding at December 31, 2014 . . . . . . . . . . . . . . . . . . 3,754 $3.76 2.93 $1,305

Vested and expected to vest at December 31, 2014 . . . . . . . 3,654 $3.77 2.82 $1,303

Exercisable at December 31, 2014 . . . . . . . . . . . . . . . . . . . 2,938 $3.80 1.94 $1,262

The total intrinsic value of options exercised (which is the amount by which the stock priceexceeded the exercise price of the options on the date of exercise) was $1.2 million, $0.5 million, and$0.3 million during the years ended December 31, 2014, 2013, and 2012, respectively.

RSUs

RSUs granted during the last three fiscal years under the 2004 Plan are generally subject to vestingover a period of one to three years, with both cliff and graded vesting, as determined at the date ofgrant by the Board of Directors. The fair value of the RSUs, equivalent to the Company’s stock priceat the date of grant, is recognized on a straight-line basis over the vesting period, unless a tranche vestsimmediately, in which case compensation costs are expensed ratably.

A summary of RSU activity for 2014 is presented below:

WeightedAverage

Number of Grant DateRSUs Fair Value

(In thousands, exceptper share amounts)

Nonvested shares outstanding at January 1, 2014 . . . . . . . . . 2,749 $4.09Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,770 $4.09Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,298) $4.19Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (876) $4.20

Nonvested shares outstanding at December 31, 2014 . . . . . . . 3,345 $3.98

The total fair value of RSUs that vested during the years ended December 31, 2014, 2013, and2012, was $9.7 million, $6.8 million, and $2.9 million, respectively.

77




As of December 31, 2014, there was approximately $12.2 million of total unrecognizedcompensation cost related to the nonvested stock options and RSUs disclosed in the tables above. Thatcost is expected to be recognized over a weighted average period of 2.4 years.

At December 31, 2014, there were 14,613,642 shares of Ciber common stock reserved for share-based awards outstanding or available for future grants under our share-based plans.

Employee Stock Purchase Plan—Under our Employee Stock Purchase Plan (‘‘ESPP’’), which is anon-qualified plan, substantially all employees may elect to contribute up to 10% of their compensationduring one calendar year, or a maximum of $10,000. Our ESPP allows eligible employees to purchaseshares of our common stock at a price equal to 95% of fair market value on the last day of theapplicable three-month offering period. The Company records no compensation cost for our ESPP. Weissued approximately 184,000, 206,000, and 281,000 shares in 2014, 2013, and 2012, respectively, underour ESPP.

Share Buyback Program—On December 11, 2014, we announced a plan to buyback up to$10 million shares of our stock on the open market. The program has no minimum share repurchaseamounts and there is no fixed time period under which any share repurchases must take place. As ofDecember 31, 2014, no shares had been repurchased under this plan.

Shelf Registration Statements on Form S-4—At December 31, 2014, we had two effective registrationstatements on Form S-4, under which together approximately 13,469,000 shares of our common stockremained available. The shares available under either one of these registration statements may be usedby Ciber from time to time in connection with future business combinations.

Stock Purchase Rights—Pursuant to our Rights Agreement, dated August 31, 1998, Ciber, Inc. paida dividend of one preferred stock purchase right (a ‘‘Right’’) for each outstanding share of Ciber, Inc.common stock (‘‘Common Stock’’) on September 21, 1998. A Right is also attached to all shares ofCommon Stock issued after the dividend date. On May 2, 2008, we amended and restated our originalRights Agreement. Under the Amended Rights Agreement, each shareholder of the Company holdsone Right for each share of Common Stock held. The Rights generally become exercisable only in theevent that an acquiring party accumulates 15% or more of our outstanding Common Stock. Each Rightentitles the registered holder to purchase one thousandth of a share of Series A Junior ParticipatingPreferred Stock of Ciber, Inc., par value $0.01, at a purchase price of $37.00, subject to the conditionsset forth in the Amended Rights Agreement. If this were to occur, subject to certain exceptions, eachRight (except for the Rights held by the acquiring party) would allow its holder to purchase CommonStock with a value equal to twice the exercise price of the Right. In the event that, after an acquiringparty has accumulated 15% or more of our outstanding Common Stock, the Company is acquired in amerger or other business combination transaction or 50% or more of its consolidated assets, cash flowor earning power are sold, each unexercised Right (except for the Rights held by the acquiring party)would thereafter allow its holder to purchase stock of the acquiring company (or our Common Stock ifit is the surviving company to the transaction) with a value equal to twice the purchase price of theRight. If the Rights were fully exercised, the shares issued would cause substantial dilution to theacquiring party or the shareholders of the acquiring company. The Amended Rights Agreementprovides a period of time during which we may redeem the Rights, in whole or in part at a price of$0.001 per Right, such that this period will end on the earlier of (i) the tenth business day followingthe date a person or group becomes the beneficial owner of 15% or more of the Common Stock or(ii) the final expiration date of the Rights, which is May 2, 2018.

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(15) Restructuring Charges

2014 Plan

On July 25, 2014, we approved a restructuring plan focused on the implementation of ago-to-market model, realigning the organization and improving our near and offshore delivery mix(‘‘the 2014 Plan’’). The 2014 Plan commenced in the third quarter of 2014 and we expect it to becompleted in the third quarter of 2015. We expect the 2014 Plan to impact approximately 280 people.We estimate the total amount of the restructuring charges for the 2014 Plan will be approximately$27 million, substantially all of which will be settled in cash. The total estimated restructuring expensesinclude approximately $20 million related to employee severance and related benefits andapproximately $7 million related to professional fees, office closures and other expenses.

The changes in our 2014 Plan restructuring liabilities, which are primarily recorded in otheraccrued expenses, during 2014, are as follows:

Employee ProfessionalSeverance Fees, Office

and Closures andTermination Other Total

(In thousands)

Restructuring liability, as of January 1, 2014 . . . . $ — $ — $ —Restructuring charge . . . . . . . . . . . . . . . . . . . . . 19,292 5,175 24,467Non-cash items . . . . . . . . . . . . . . . . . . . . . . . . . (220) (77) (297)Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,630) (3,898) (7,528)Foreign exchange rate changes . . . . . . . . . . . . . . (290) — (290)

Restructuring liability, as of December 31, 2014 . $15,152 $ 1,200 $16,352

Restructuring charges by segment are as follows:

Year ended TotalDecember 31, Anticipated

2014 Charges

(In thousands)

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,011 $ 1,011International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,831 18,400Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 314Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,311 7,189

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,467 $26,914

2013 Plan

On July 30, 2013, we approved a restructuring plan primarily focused on our Internationaloperations (‘‘the 2013 Plan’’). The goal of the 2013 Plan was to improve utilization, strategically engageour lower-cost off-shore and near-shore resources, and centralize management of administrativefunctions in key markets to leverage shared services functions. The actions of this plan impactedapproximately 250 employees. We have completed all activities associated with the 2013 Plan. Thecharges associated with the 2013 Plan were substantially all related to personnel severance and relatedemployee benefit costs.

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(15) Restructuring Charges (Continued)

The changes in our 2013 Plan restructuring liabilities, which are recorded in other accruedexpenses, during 2014 are as follows:

(In thousands)

Restructuring liability, as of January 1, 2013 . . . . . . . . . . . . . . . . . . . $ —Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,421Non-cash items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (137)Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,990)Foreign exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160

Restructuring liability, as of January 1, 2014 . . . . . . . . . . . . . . . . . . . 7,454

Restructuring charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (701)Non-cash items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,677)Foreign exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93)

Restructuring liability, as of December 31, 2014 . . . . . . . . . . . . . . . . . $ —


Year endedDecember 31,

2014 Plan to Date

(In thousands)

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(112) $ 548International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (722) 11,394Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) 57Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 721

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(701) $12,720

2012 Plan

On November 5, 2012, we approved a company restructuring plan (‘‘the 2012 Plan’’). In the thirdquarter of 2013, all restructuring actions associated with this plan were completed. Although we havecompleted all activities associated with the 2012 Plan, our lease-related office closure costs are subjectto estimate and as such our actual restructuring charges may differ from our current estimates. In thesecond and fourth quarter of 2014, we incurred additional charges related to adjusting our subleaseestimates.

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(15) Restructuring Charges (Continued)

The changes in our restructuring liabilities, which are recorded in other accrued expenses, during2012, 2013, and 2014 are as follows:

EmployeeSeverance andTermination Office Closures Total

(In thousands)

Restructuring liability, as of January 1, 2012 . $ — $ — $ —Restructuring charges . . . . . . . . . . . . . . . . . . 6,517 1,464 7,981Non-cash items . . . . . . . . . . . . . . . . . . . . . . . (743) 68 (675)Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,218) — (2,218)

Restructuring liability, as of January 1, 2013 . 3,556 1,532 5,088

Restructuring charges . . . . . . . . . . . . . . . . . . 370 3,132 3,502Non-cash items . . . . . . . . . . . . . . . . . . . . . . . — 510 510Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,851) (2,421) (6,272)Foreign exchange rate changes . . . . . . . . . . . . (75) 17 (58)

Restructuring liability, as of January 1, 2014 . — 2,770 2,770

Restructuring charges . . . . . . . . . . . . . . . . . . — 2,466 2,466Non-cash items . . . . . . . . . . . . . . . . . . . . . . . — — —Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . — (3,532) (3,532)Foreign exchange rate changes . . . . . . . . . . . . — (10) (10)

Restructuring liability, as of December 31,2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 1,694 $ 1,694


Year endedDecember 31,

2014 Plan to Date(1)

(In thousands)

North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (3) $ 1,702International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,771 8,851Corporate(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 698 3,396

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,466 $13,949

(1) Our restructuring charges, particularly lease-related office closure costs, are subject toestimate. If we are unable to find tenants for vacated offices or sub-lease terms aredifferent from our estimates, our actual restructuring charges will differ from our currentestimates.

(2) 2012 corporate restructuring charges consist of share-based compensation expensesassociated with severance for employees in our International division. Share-basedcompensation is not charged to operating divisions, but rather is recorded as part of ourcorporate expenses. 2013 and 2014 corporate restructuring charges include costs foradministrative facility consolidation.

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(16) Segment Information

Excluding discontinued operations, our operating divisions for 2014 consisted of International andNorth America. All prior period segment data has been adjusted to conform to the 2014 presentation.

We evaluate our divisions’ results of operations based on operating income before amortization ofintangible assets and restructuring charges. We do not track our assets by operating segments.Consequently, it is not practical to show assets by operating segment. The accounting policies of ourdivisions are the same as those disclosed in the Summary of Significant Accounting Policies in Note 1,except for share-based compensation. Share-based compensation is not charged to operating divisions,but rather is recorded as part of our corporate expenses.

In 2014, the Germany and the Netherlands comprised approximately 14% and 12% of ourconsolidated revenue, respectively.

The following presents financial information about our reporting segments:


2014 2013 2012

(In thousands)

Revenues:International . . . . . . . . . . . . . . . . . . . . . . . . . . . $441,943 $456,424 $434,193North America . . . . . . . . . . . . . . . . . . . . . . . . . 422,680 423,340 432,832Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,703 3,357 3,109Inter-segment . . . . . . . . . . . . . . . . . . . . . . . . . . (3,719) (5,828) (4,537)

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . $863,607 $877,293 $865,597

Operating income (loss) from continuingoperations:International . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,361 $ 23,390 $ 23,245North America . . . . . . . . . . . . . . . . . . . . . . . . . 38,972 33,511 30,169Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 315 446Corporate expenses . . . . . . . . . . . . . . . . . . . . . . (41,899) (39,774) (32,005)Unallocated results of discontinued operations . . — — (562)

Operating income from continuing operationsbefore amortization and restructuring . . . . . 16,626 17,442 21,293

Amortization of intangible assets . . . . . . . . . . . . (192) — (644)Restructuring charges . . . . . . . . . . . . . . . . . . . . (26,232) (16,923) (7,981)

Total operating income (loss) from continuingoperations . . . . . . . . . . . . . . . . . . . . . . . . . $ (9,798) $ 519 $ 12,668

82



(16) Segment Information (Continued)

Our revenue by location is as follows:


2014 2013 2012

(In thousands)

Total foreign revenue(1) . . . . . . . . . . . . . . . . . . . . $452,519 $464,115 $444,253Total domestic revenue(1) . . . . . . . . . . . . . . . . . . . $411,088 $413,178 $421,344Netherlands(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . $104,163 $121,875 $120,325Germany(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $120,535 $111,779 $104,007

(1) Represents sales to all foreign/domestic clients based on client locations.

(2) Represents revenues based on Ciber locations.

Long-lived assets by location are as follows:

December 31,

2014 2013

(In thousands)

Total foreign long-lived assets(1) . . . . . . . . . . . . . . . . . . . . . . $148,309 $160,881Total domestic long-lived assets(2) . . . . . . . . . . . . . . . . . . . . . $139,912 $139,365

(1) This balance includes $133.9 million and $148.0 million of goodwill as of December 31,2014 and 2013, respectively.

(2) This balance includes $133.7 million of goodwill as of December 31, 2014 and 2013.

(17) Supplemental Statement of Cash Flow Information

Supplemental statement of cash flow information is as follows:


2014 2013 2012

(In thousands)

Cash paid for interest . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 972 $1,974 $5,655Cash paid for income taxes, net . . . . . . . . . . . . . . . . . . . . $4,444 $5,714 $6,182

83



(18) Selected Quarterly Financial Information (Unaudited)

First Second Third FourthQuarter Quarter Quarter Quarter Total


Year ended December 31, 2014Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $218,011 $214,646 $211,306 $219,644 $863,607Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . 56,571 54,556 54,852 56,687 222,666Operating income (loss) from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . 7,033 (2,412) (18,426) 4,007 (9,798)Net income (loss) from continuing operations . 4,066 (5,169) (20,784) 3,130 (18,757)Loss from discontinued operations, net of

income tax . . . . . . . . . . . . . . . . . . . . . . . . . (142) (288) (47) (315) (792)Net income (loss) attributable to Ciber, Inc. . . 3,919 (5,467) (20,851) 2,795 (19,604)Basic and diluted earnings (loss) per share

attributable to Ciber, Inc.:Continuing operations . . . . . . . . . . . . . . . . . $ 0.05 $ (0.07) $ (0.27) $ 0.04 $ (0.24)Discontinued operations . . . . . . . . . . . . . . . — — — — (0.01)

Basic and diluted earnings (loss) per shareattributable to Ciber, Inc. . . . . . . . . . . $ 0.05 $ (0.07) $ (0.27) $ 0.04 $ (0.25)

Year Ended December 31, 2013Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $219,541 $220,395 $215,057 $222,300 $877,293Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . 55,226 56,038 54,062 57,731 223,057Operating income (loss) from continuing

operations . . . . . . . . . . . . . . . . . . . . . . . . . 4,786 5,035 (13,469) 4,167 519Net income (loss) from continuing operations . 1,449 2,935 (13,513) 1,522 (7,607)Income (loss) from discontinued operations,

net of income tax . . . . . . . . . . . . . . . . . . . . 18 (4,555) (952) (1,435) (6,924)Net income (loss) attributable to Ciber, Inc. . . 1,613 (1,766) (14,469) 102 (14,520)Basic and diluted earnings (loss) per share

attributable to Ciber, Inc.:Continuing operations . . . . . . . . . . . . . . . . . $ 0.02 $ 0.04 $ (0.18) $ 0.02 $ (0.10)Discontinued operations . . . . . . . . . . . . . . . — (0.06) (0.01) (0.02) (0.09)

Basic and diluted earnings (loss) per shareattributable to Ciber, Inc. . . . . . . . . . . $ 0.02 $ (0.02) $ (0.19) $ — $ (0.19)

84

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures—During the fiscal period covered by thisreport, our management, with the participation of our principal executive officer and principal financialofficer, carried out an evaluation of the effectiveness of the design and operation of our disclosurecontrols and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Based uponthis evaluation, our principal executive officer and principal financial officer have concluded that, as ofthe end of the period covered by this report, our disclosure controls and procedures were effective toensure that information required to be disclosed by us in reports we file or submit under the ExchangeAct is (1) recorded, processed, summarized and reported within the time periods specified in Securitiesand Exchange Commission rules and forms, and (2) accumulated and communicated to ourmanagement, including our principal executive officer and principal financial officer, to allow timelydecisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting—Our management isresponsible for establishing and maintaining adequate internal control over financial reporting, as suchterm is defined in Exchange Act Rule 13a-15(f). Ciber’s internal control systems were designed toprovide reasonable assurance to the Company’s management and Board of Directors regarding thereliability of financial reporting and the preparation of financial statements for external purposes inaccordance with U.S. generally accepted accounting principals. All internal control systems, no matterhow well designed, have inherent limitations. Because of its inherent limitations, internal control overfinancial reporting may not prevent or detect misstatements. Therefore, even those systems determinedto be effective can provide only reasonable assurance with respect to financial statement preparationand presentation. Also, projections of any evaluation of effectiveness to future periods are subject tothe risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of our management, including our principalexecutive officer and principal financial officer, we conducted an evaluation of the effectiveness of ourinternal control over financial reporting as of December 31, 2014, based on the framework in InternalControl—Integrated Framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (2013 framework). Based on our evaluation, our management concluded that our internalcontrol over financial reporting was effective as of December 31, 2014.

The attestation report on our internal control over financial reporting as of December 31, 2014,issued by Ernst & Young LLP, the independent registered public accounting firm who also audited ourconsolidated financial statements, is included following this Item 9A.

Changes in Internal Controls—There were no changes in our internal control over financialreporting that occurred during our fiscal quarter ending December 31, 2014, that have materiallyaffected, or are reasonably likely to materially affect, our internal control over financial reporting.

We continue to monitor the effectiveness of our internal controls and make necessarymodifications to our processes and testing as appropriate on an on-going basis.

85

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Ciber, Inc.

We have audited Ciber, Inc. and subsidiaries’ (the Company) internal control over financialreporting as of December 31, 2014, based on criteria established in Internal Control—IntegratedFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission(2013 framework) (the COSO criteria). The Company’s management is responsible for maintainingeffective internal control over financial reporting, and for its assessment of the effectiveness of internalcontrol over financial reporting included in the accompanying Management’s Report on InternalControl over Financial Reporting. Our responsibility is to express an opinion on the company’s internalcontrol over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company AccountingOversight Board (United States). Those standards require that we plan and perform the audit to obtainreasonable assurance about whether effective internal control over financial reporting was maintainedin all material respects. Our audit included obtaining an understanding of internal control overfinancial reporting, assessing the risk that a material weakness exists, testing and evaluating the designand operating effectiveness of internal control based on the assessed risk, and performing such otherprocedures as we considered necessary in the circumstances. We believe that our audit provides areasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A company’s internalcontrol over financial reporting includes those policies and procedures that (1) pertain to themaintenance of records that, in reasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance that transactions arerecorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of the company are being made onlyin accordance with authorizations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, ordisposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent ordetect misstatements. Also, projections of any evaluation of effectiveness to future periods are subjectto the risk that controls may become inadequate because of changes in conditions, or that the degreeof compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control overfinancial reporting as of December, 31, 2014, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company AccountingOversight Board (United States), the consolidated balance sheets of the Company as of December 31,2014 and 2013, and the related consolidated statements of operations, comprehensive income (loss),shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2014and our report dated February 20, 2015 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Denver, ColoradoFebruary 20, 2015

86

Item 9B. Other Information

Not applicable.

87

Part III

The information required by Part III is omitted from this Report on Form 10-K because theRegistrant will file a definitive proxy statement for its 2015 Annual Meeting of Shareholders scheduledfor May 6, 2015 (the ‘‘2015 Proxy Statement’’), within 120 days after December 31, 2014, and certaininformation included therein is incorporated herein by reference.

Item 10. Directors, Executive Officers and Corporate Governance

Corporate Governance Matters

We have a Code of Business Conduct and Ethics (the ‘‘Code’’) that applies to our principalexecutive officer, principal financial officer, principal accounting officer, or persons performing similarfunctions. The code can be found on our website (www.ciber.com). We also have CorporateGovernance Guidelines and charters for the Audit, Compensation, and Nominating/CorporateGovernance Committees of our Board of Directors. These Guidelines and Charters can also be foundon our website. Certain amendments or waivers to our Code will be disclosed as necessary on ourwebsite as required by SEC rules. Additionally, copies of our Code and Corporate GovernanceGuidelines, as well as the Charters for the various Committees of the Board of Directors are availablein print, free of charge, to any shareholder that requests them.

Because our common stock is listed on the New York Stock Exchange (the ‘‘NYSE’’), our chiefexecutive officer is required to make, and will make, an annual certification to the NYSE stating thathe was not aware of any violation by us of the corporate governance listing standards of the NYSE.Our chief executive officer will make his annual certification to that effect to the NYSE within the30-day period following our 2015 Annual Meeting of Stockholders. Additionally, the Company’s chiefexecutive officer and chief financial officer certifications required by Section 302 of the Sarbanes-OxleyAct are included as Exhibits 31.1 and 31.2 in this Annual Report on Form 10-K.

The additional information required by this item is incorporated by reference from Ciber’s 2015Proxy Statement.

88

Item 11. Executive Compensation

The information required by this item is incorporated by reference from the sections captioned‘‘Executive Compensation’’ and ‘‘Corporate Governance Practices’’ in Ciber’s 2015 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related ShareholderMatters

Securities Authorized for Issuance under Equity Compensation Plans

The information required by this item is incorporated by reference from the sections captioned‘‘Equity Compensation Plans’’ and ‘‘Security Ownership of Certain Beneficial Owners andManagement’’ in Ciber’s 2015 Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated by reference from the sections captioned‘‘Certain Relationships and Related Party Transactions’’ and ‘‘Corporate Governance Practices’’ inCiber’s 2015 Proxy Statement.

Item 14. Principal Accountant Fees and Services

The information required by this item is incorporated by reference from the section captioned‘‘Independent Registered Public Accounting Firm’’ in Ciber’s 2015 Proxy Statement.

89

Part IV

Item 15. Exhibits and Financial Statement Schedules

(a) (1) Financial Statements

The following financial statements are filed as part of this report:

Report of Independent Registered Public Accounting FirmConsolidated Statements of Operations—Years Ended December 31, 2014, 2013 and

2012Consolidated Statements of Comprehensive Income (Loss)—Years Ended

December 31, 2014, 2013, 2012Consolidated Balance Sheets—December 31, 2014 and 2013Consolidated Statements of Shareholders’ Equity—Years Ended December 31, 2014,

2013 and 2012Consolidated Statements of Cash Flows—Years Ended December 31, 2014, 2013 and

2012Notes to Consolidated Financial Statements

(2) Financial Statement Schedules

All schedules are omitted, either because they are not applicable or because the requiredinformation is shown in the consolidated financial statements or notes thereto.

(3) Exhibits

The Exhibits filed as part of this Annual Report on Form 10-K are listed on the ExhibitIndex immediately preceding such Exhibits, which Exhibit Index is incorporated herein byreference.

90

EXHIBIT INDEX

Incorporated by ReferenceExhibitNumber Exhibit Description Form File No. Date Filed

2.1 Asset Purchase Agreement by and between Ciber, Inc. and 8-K 001-13103 1/23/2012CRGT Inc., dated January 21, 2012

2.2 Asset Purchase Agreement by and between Ciber, Inc. and 10-Q 001-13103 8/7/2012Savvis Communications Corporation, dated July 28, 2012

3.1 Restated Certificate of Incorporation of Ciber, Inc. 10-Q 001-13103 11/7/2005

3.2 Amended and Restated Bylaws of Ciber, Inc., as adopted 10-K 001-13103 3/5/2009February 15, 2001; Amendment to the Amended andRestated Bylaws of Ciber, Inc., as adopted February 18,2003; Amendment to the Amended and Restated Bylaws ofCiber, Inc., as adopted May 3, 2005; Amendment to theAmended and Restated Bylaws of Ciber, Inc., as adoptedFebruary 25, 2009

3.3 Amendment to the Amended and Restated Bylaws of 10-Q 001-13103 8/5/2010Ciber, Inc., as adopted June 2, 2010

4.1 Form of Common Stock Certificate S-1 33-74774 2/2/1994

4.2 First Amended and Restated Rights Agreement, dated as 8-A/A 001-13103 5/2/2008of May 2, 2008, between Ciber, Inc. and Wells Fargo Bank,National Association.

10.1* Form of Change of Control Agreement adopted as of 10-K 001-13103 3/27/2003February 18, 2003

10.2* Form of Indemnification Agreement adopted as of 10-K 001-13103 3/27/2003February 18, 2003

10.3* Employment Agreement, dated July 1, 2010, between 8-K 001-13103 7/1/2010Ciber, Inc. and David Peterschmidt

10.4* Ciber Non-Qualified Option Agreement, dated July 1, 2010, 8-K 001-13103 7/1/2010between Ciber, Inc. and David Peterschmidt

10.5* Letter Agreement, effective as of June 16, 2011, between 8-K 001-13103 6/17/2011Ciber, Inc. and Bobby G. Stevenson

10.6** Letter Agreement by and between Ciber, Inc. and 10-K 001-13103 3/12/2012CRGT Inc., dated March 9, 2012

10.7 Credit Agreement, by and among Ciber, Inc., as U.S. 8-K 001-13103 5/8/2012borrower, certain foreign subsidiaries of Ciber, Inc., asEuropean borrowers, Wells Fargo Bank, N.A., asadministrative agent, lead arranger, sole arranger, sole bookrunner and U.K. security trustee, and the lenders from timeto time party thereto, dated as of May 7, 2012.

10.8 Guaranty and Security Agreement, by and among 8-K 001-13103 5/8/2012Ciber, Inc. and certain subsidiaries of Ciber, Inc., in favorof Wells Fargo Bank, N.A., in its capacity as administrativeagent, dated May 7, 2012.

91


10.9* Offer Letter from Ciber, Inc. to Anthony Fogel dated 8-K 001-13103 4/5/2013February 14, 2012

10.10* Employment and Confidentiality Agreement between 8-K 001-13103 4/5/2013Ciber, Inc., and Anthony S. Fogel dated as of February 14,2012

10.11* Employment and Confidentiality Agreement between 8-K 001-13103 4/8/2013CIBER, Inc. and R. Bruce Douglas dated as of October 4,2011

10.12 Amendment No. 2 to Wells Fargo Credit Agreement, dated 10-Q 001-13103 4/30/2013March 26, 2013

10.13* Ciber, Inc. 2004 Incentive Plan, as amended May 8, 2013 10-Q 001-13103 7/31/2013

10.14* Employment and Confidentially Agreement between 10-Q 001-13103 10/29/2013Ciber Inc. and Michael E. Lehman dated September 24,2013

10.15* Mutual Release of Claims between Ciber Inc. and 10-K 001-13103 2/18/2014Richard A. Genovese dated January 1, 2014

10.16* Employment and Confidentially Agreement between 10-K 001-13103 2/18/2014Ciber Inc. and Christian M. Mezger dated June 10, 2013

10.17 Settlement agreement between Ciber, Inc. and Lone Star 8-K 001-13103 4/11/2014Value Management, LLC dated April 11, 2014

10.18* Employment agreement between Christian Mezger and 10-Q 001-13103 4/29/2014Ciber, Inc. dated April 14, 2014.

10.19* Employment agreement between David Peterschmidt and 10-Q 001-13103 4/29/2014Ciber, Inc. dated March 25, 2014

10.20* Release of Claims between Ciber, Inc. and David 10-Q 001-13103 7/29/2014Peterschmidt.

10.21* Employment Agreement between Michael Boustridge and 10-Q 001-13103 7/29/2014Ciber, Inc. dated June 12, 2014.

10.22* Release of Claims between Ciber, Inc. and Anthony Fogel. 10-Q 001-13103 7/29/2014

10.23* Employment Agreement between Tina Piermarini and 10-Q 001-13103 7/29/2014Ciber, Inc. dated June 13, 2014.

10.24* Michael Boustridge Notice of Grant of Restricted Stock 10-Q 001-13103 10/28/2014Units and Restrict Stock Unit Agreement

10.25* Michael Boustridge Notice of Grant of Stock Options and 10-Q 001-13103 10/28/2014Option Agreement

10.26* Tina Piermarini Notice of Grant of Restricted Stock Units 10-Q 001-13103 10/28/2014and Restricted Stock Unit Agreement

21.1 List of Subsidiaries of Ciber, Inc. Filedherewith

92


23.1 Consent of Independent Registered Public Accounting Firm Filedherewith

24 Power of Attorney Filedherewith

31.1 Certification of Principal Executive Officer Pursuant to FiledSection 302 of the Sarbanes-Oxley Act of 2002 herewith

31.2 Certification of Principal Financial Officer Pursuant to FiledSection 302 of the Sarbanes-Oxley Act of 2002 herewith

32 Certification Pursuant to Section 906 of the Sarbanes-Oxley FurnishedAct of 2002

101.INS XBRL Instance Document Filedherewith

101.SCH XBRL Taxonomy Extension Schema Document Filedherewith

101.CAL XBRL Taxonomy Extension Calculation Linkbase FiledDocument herewith

101.LAB XBRL Taxonomy Extension Label Linkbase Document Filedherewith

101.PRE XBRL Taxonomy Extension Presentation Linkbase FiledDocument herewith

101.DEF XBRL Taxonomy Extension Definition Linkbase Document Filedherewith

* Indicates a management contract or compensatory plan or arrangement.

** The annexes and schedules to the Letter Agreement have been omitted from this filing pursuantto Item 601(b)(2) of Regulation S-K. The Company will furnish copies of any of the annexes orschedules to the U.S. Securities and Exchange Commission upon request.

93

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, asamended, the Registrant has duly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized.

Ciber, Inc.

By: /s/ MICHAEL BOUSTRIDGE

Michael BoustridgeChief Executive Officer, President, and Director

(Principal Executive Officer)

Date: February 20, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signedbelow by the following persons on behalf of the registrant on February 20, 2015.

Signature Title

/s/ MICHAEL BOUSTRIDGE Chief Executive Officer, President and Director(Principal Executive Officer)Michael Boustrdige

/s/ CHRISTIAN M. MEZGER Chief Financial Officer (Principal FinancialOfficer and Principal Accounting Officer)Christian M. Mezger

*Chairman of the Board and Director

Paul A. Jacobs

*Director

Richard Coleman

*Director

Jean-Francois Heitz

*Director

Stephen S. Kurtz

*Director

Kurt J. Lauk

94

Signature Title

*Director

James C. Spira

*Founder and Director

Bobby G. Stevenson

*By: /s/ M. SEAN RADCLIFFE

M. Sean RadcliffeAttorney-in-Fact

95

28APR201506373020

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*Among CIBER, Inc., the S&P 500 Index,

and a Peer Group

$0

$50

$100

$150

$200

$250

12/09 12/10 12/11 12/12 12/1412/13

CIBER, Inc. S&P 500 Peer Group

* $100 invested on 12/31/09 in stock or index, including reinvestment of dividends. Fiscal year endingDecember 31.

Copyright� 2015 S&P, a division of McGraw Hill Financial. All rights reserved.

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