File No. 34--________
As filed with the Securities and Exchange Commission on April 14, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
DynCorp
(Exact name of registrant as specified in its charter)
Delaware 36-2408747
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2000 Edmund Halley Drive, Reston, Virginia 20191-3436
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 264-0330
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
(Title of class)
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. BUSINESS
This item is incorporated by reference in its entirety to Item 1 of the
Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 2. FINANCIAL INFORMATION
SELECTED FINANCIAL DATA
This item is incorporated by reference in its entirety to Item 6 of the
Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This item is incorporated by reference in its entirety to Item 7 of the
Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 3. PROPERTIES
This item is incorporated by reference in its entirety to Item 2 of the
Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
This item is incorporated by reference in its entirety to Item 12 of
the Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
This item is incorporated by reference in its entirety to Item 10 of
the Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 6. EXECUTIVE COMPENSATION
This item is incorporated by reference in its entirety to Item 11 of
the Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED INFORMATION
This item is incorporated by reference in its entirety to Item 13 of
the Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 8. LEGAL PROCEEDINGS
This item is incorporated by reference in its entirety to Note (21) of
the Consolidated Financial Statements included in Item 8 of the Registrant's
1997 Annual Report Form 10-K, filed with the Securities and Exchange Commission
on March 31, 1998, File No. 1-3879.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
This item is incorporated by reference in its entirety to Item 5 of the
Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 10.RECENT SALES OF UNREGISTERED SECURITIES
This item is incorporated by reference in its entirety to the final
paragraph of Item 5 of the Registrant's 1997 Annual Report Form 10-K, filed with
the Securities and Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 11.DESCRIPTION OF REGISTRANT'S SECURITIES
GENERAL
The authorized capital stock of the Registrant (sometimes referred to
as the "Company") consists of 20,000,000 shares of Common Stock, par value $0.10
per share, of which 10,103,948 are outstanding as of April 3, 1998, and 123,711
shares of Class C Preferred Stock, par value $0.10 per share, of which none are
outstanding. As of April 3, 1998, there were approximately 590 holders of record
of Common Stock. As of April 3, 1998, there were also outstanding Warrants to
acquire 347,185 shares of Common Stock at an exercise price of $0.25 per share;
the Warrants will expire on September 9, 1998.
The following is a summary of the material provisions of the
Certificate of Incorporation and By-Laws of the Company regarding the Company's
capital stock. The summary is not complete and is qualified in its entirety by
reference to the Certificate of Incorporation and to the By-Laws.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share held of
record in elections for directors and on all other matters required or permitted
to be approved by a vote of stockholders of the Company. Each share of Common
Stock is equal in respect of rights and liquidation and rights to dividends and
to distributions. Stockholders of the Company do not and will not have any
preferred or preemptive rights to subscribe for, purchase or receive additional
shares of any class of capital stock of the Company, or any options or warrants
for such shares, or any rights to subscribe for or purchase such shares, for any
securities convertible into or exchangeable for such shares, which may be
issued, sold or offered for sale by the Company.
INTERNAL MARKET
The Company's Common Stock is not publicly traded. However, the Company
has established an internal stock market (the "Internal Market") to provide
liquidity for its stockholders. Shares available for trading in the Internal
Market are registered under the Securities Act of 1933. The Internal Market
generally permits stockholders to sell shares of Common Stock on four
predetermined days each year (each, a "Trade Date"), subject to purchase demand.
Sales of Common Stock on the Internal Market are made at established
prices for the Common Stock determined pursuant to the formula and valuation
process described below (the "Formula Price") to eligible employees and
directors of the Company and to the trustees of the Company's Savings and
Retirement Plan and Employee Stock Ownership Plan and the administrator of the
Company's Employee Stock Purchase Plan, who may purchase shares of Common Stock
for their respective trusts and plans.
The market price of the Common Stock is established by the Board of
Directors pursuant to the valuation process described below, which uses the
formula set forth below to determine the Formula Price at which the Common Stock
trades in the Internal Market. The Formula Price, including the Market Factor,
is reviewed by the Board of Directors on a quarterly basis, in preparation for
Internal Market Trade Dates.
The Formula Price per share of Common Stock is the product of seven
times the operating cash flow ("CF"), where operating cash flow is represented
by earnings before interest, taxes, depreciation, and amortization of the
Company for the four fiscal quarters immediately preceding the date on which a
price revision is made, multiplied by a market factor ("Market Factor" denoted
MF) plus the non-operating assets at disposition value (net of disposition
costs) ("NOA"), minus the sum of interest bearing debt adjusted to market and
other outstanding securities senior to Common Stock ("IBD"), the whole divided
by the number of shares of Common Stock outstanding at the date on which a price
revision is made, on a fully diluted basis assuming exercise of all outstanding
options and warrants ("ESO"). The Market Factor is a numeric factor which
reflects existing securities market conditions relevant to the valuation of such
stock. The Formula Price of the Common Stock, expressed as an equation, is as
follows:
Formula Price = [(CF x 7)MF + NOA - IBD]
ESO
CLASSES OF DIRECTORS
The members of the Board of Directors are divided into three classes
and normally serve three-year terms. Approximately one-third of the members are
therefore elected each year.
RESTRICTIONS ON TRANSFER OF COMMON STOCK
The Board of Directors of the Company amended the By-Laws on May 10,
1995, to provide that, as to any share of Common Stock issued on or after May
11, 1995, such share may not be sold or transferred by the holder thereof to any
third party, other than (1) by descent or distribution, (2) by bona fide gift,
or (3) by bona fide sale after the holder thereof has first offered in writing
to sell the share to the Company at the same price and under substantially the
same terms as apply to the intended sale and the Company has failed or declined
in writing to accept such terms within 14 days of receipt of such written offer
or has refused to proceed to a closing on the transaction within a reasonable
time after such acceptance; provided, however, that the sale to the third party
following such failure, declination, or refusal must be made on the same terms
which were not previously accepted by the Company and within 60 days following
such event, or the Company must again be offered such refusal rights prior to a
sale of such share; provided further, however, that this right does not apply to
(A) any transactions made through the Internal Market; (B) any transactions made
at any time while the Common Stock is listed for trading on a national
securities exchange or on the over-the-counter market; (C) sales to the
Company's Employee Stock Ownership Plan Trust; or (D) shares which have been
reissued to the holder in exchange for shares issued prior to May 11, 1995 to
the extent such previously issued shares were not subject to any right of first
refusal by the Company or its stockholders.
Shares of Common Stock purchased on the Internal Market are subject to
contractual transfer restrictions having the same effect as those contained in
the By-Laws. Prior to trading on the Internal Market, each buyer is required to
adhere to the Internal Market rules which impose such transfer restrictions on
all shares purchased on the Internal Market. Shares of Common Stock issued prior
to May 11, 1995 and not subsequently purchased on the Internal Market are not
subject to such restrictions.
STOCKHOLDERS AGREEMENT
Certain individuals in the management group of the Company, Capricorn
Investors, L.P. ("Capricorn") and other outside investors who hold shares of
Common Stock are parties to a Stockholders Agreement originally dated March 11,
1988 and restated March 11, 1994 (the "Stockholders Agreement"). Under the terms
of the Stockholders Agreement, stockholders who own approximately 32% of the
fully diluted outstanding shares of Common Stock have agreed, among other
things, to vote for the election of a Board of Directors consisting of four
management group nominees, four Capricorn nominees and a joint nominee who would
be elected if needed to break a tie vote. Effective January 23, 1997, Capricorn
waived its prior right to nominate members to the Board of Directors, but not
its obligations to vote in accordance with the Stockholders Agreement. Because
the management group stockholders, directly and through ESOP holdings, and
Capricorn represent approximately 32% of the shares of Common Stock necessary to
elect the Company's Board of Directors on a fully diluted basis, it is unlikely
that other stockholders acting in concert or otherwise will be able to change
the composition of the Board of Directors. Unless extended, the Stockholder's
Agreement expires on March 10, 1999.
ANTI-TAKEOVER EFFECTS
The combined effects of management's and Capricorn's collective
ownership of a substantial portion of the outstanding shares of Common Stock,
the voting provisions of the Stockholders Agreement, the Company's right of
first refusal, and the division of the members of the Board of Directors into
three classes may discourage, delay, or prevent attempts to acquire control of
the Company that are not negotiated with the Company's Board of Directors. These
may, individually or collectively, have the effect of discouraging takeover
attempts that some stockholders might deem to be in their best interests,
including tender offers in which stockholders might receive a premium for their
shares over the Formula Price available on the Internal Market, as well as
making it more difficult for individual stockholders or a group of stockholders
to elect directors.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 102 of the General Corporation Law of the State of Delaware
("GCL") allows a corporation to eliminate the personal liability of a director
to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except in cases where the director breached his
duty of loyalty, failed to act in good faith, engaged in intentional misconduct
or a knowing violation of law, authorized the unlawful payment of a dividend or
approved an unlawful stock redemption or repurchase or obtained an improper
personal benefit. The Registrant's Amended and Restated Certificate of
Incorporation contains a provision which eliminates directors' personal
liability as set forth above.
The Amended and Restated Certificate of Incorporation of the Registrant
and the Bylaws of the Registrant provide in effect that the Registrant shall
indemnify its directors, officers, and employees to the extent permitted by
Section 145 of the GCL. Section 145 of the GCL provides that a Delaware
corporation has the power to indemnify its officers and directors in certain
circumstances.
Subsection (a) of Section 145 of the GCL empowers a corporation to
indemnify any director or officer, or former director or officer, who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal administrative or
investigative (other than an action by or in the right of the corporation),
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred in connection with such action,
suit or proceeding provided that such director or officer acted in good faith in
a manner reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding,
provided that such director or officer had no cause to believe his or her
conduct was unlawful.
Subsection (b) of Section 145 empowers a corporation to indemnify any
director or officer, or former director or officer, who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that such person acted in any of the capacities set forth
above, against expenses actually and reasonably incurred in connection with the
defense or settlement of such action or suit provided that such director or
officer acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made in respect of any claim, issue or matter as to which such director
or officer shall have been adjudged to be liable for negligence or misconduct in
the performance of his or her duty to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action was brought
shall determine that despite the adjudication of liability such director or
officer is fairly and reasonably entitled to indemnity for such expenses which
the court shall deem proper.
Section 145 further provides that to the extent a director or officer
of a corporation has been successful in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue or matter therein, he or she shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him or her in
connection therewith; that indemnification provided for by Section 145 shall not
be deemed exclusive of any other rights to which the indemnified party may be
entitled; and empowers the corporation to purchase and maintain insurance on
behalf of a director or officer of the corporation against any liability
asserted against him or her or incurred by him or her in any such capacity or
arising out of his or her status as such whether or not the corporation would
have the power to indemnify him or her against such liabilities under Section
145.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
This item is incorporated by reference in its entirety to Item 8 of the
Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 14.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
This item is incorporated by reference in its entirety to Item 9 of the
Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879.
ITEM 15.FINANCIAL STATEMENTS AND EXHIBITS
The following documents are filed as part of this registration statement:
Financial Statements
Selected financial data
Incorporated by reference to Registrant's Form 10-K for 1997, File No. 1-3879
Financial statements and supplementary data
Incorporated by reference to Registrant's Form 10-K for 1997, File No. 1-3879
Exhibit Description
3.1
Certificate of Incorporation, as currently in effect, consisting of Amended and
Restated Certificate of Incorporation (incorporated by reference to Registrant's
Form S-1, File No. 33-59279)
3.2
Registrant's By-Laws as amended to date (incorporated by reference to
Registrant's Form S-1, File No. 33-59279)
4.1
Indenture and supplement, dated April 18, 1997 between Dyn Funding Corporation
(a wholly owned subsidiary of the Registrant) and Bankers Trust Company
relating to Contract Receivable Collateralized Notes (incorporated by reference
to Registrant's Post-Effective Amendment No. 1 on Form S-2 to Form S-1, File No.
33-59279)
4.2
Registration Rights Agreement, dated as of March 17, 1997, among the Registrant,
and BT Securities Corporation and Citicorp Securities, Inc. (incorporated by
reference to Registrant's Form S-4, File No. 333-25355)
4.3
Indenture, dated March 17, 1997, between the Registrant and United States Trust
Company of New York relating to the 9 1/2% Senior Subordinated Notes due 2007
(incorporated by reference to Registrant's Form S-4, File No. 333-25355)
4.4
Specimen Common Stock Certificate (incorporated by reference to Registrant's
Form 10-K for 1988, File No. 1-3879)
4.5
Statement Respecting Warrants and Lapse of Certain Restrictions (incorporated
by reference to Registrant's Form 10-K for 1988, File No. 1-3879)
4.6
Amendment to Statement Respecting Warrants and Lapse of Certain Restrictions
(incorporated by reference to Registrant's Form 10-K for 1990, File No. 1-3879)
4.7
Article Fourth of the Amended and Restated Certificate of Incorporation
(incorporated by reference to Registrant's Form S-1, File No. 33-59279)
4.8
Second Amended and Restated Credit Agreement by and among Citicorp North
America, Inc., certain Lenders, and the Registrant dated May 15, 1997
(incorporated by reference to Registrant's Form S-4, File No. 333-25355)
4.9
Stockholders Agreement (incorporated by reference to Registrant's Form S-1,
File No. 33-59279) 10.1 Deferred Compensation Plan (incorporated by reference
to Registrant's Form 10-K for 1987, File No. 1-3879)
10.2
Management Incentive Plan (incorporated by reference to Registrant's Form 10-K
for 1997, File No. 1-3879)
10.3
DynCorp Executive Incentive Plan (incorporated by reference to Registrant's Form
10-K for 1997, File No. 1-3879)
10.4
Severance Agreement of David L. Reichardt (incorporated by reference to Exhibit
(c)(7) to Schedule 14D-9 filed by Registrant January 25, 1988)
10.5
Severance Agreement of Paul V. Lombardi, Vice President, Government Services
Group and currently President & Chief Executive Officer (incorporated by
reference to Registrant's Form 10-K for 1993, File No. 1-3879)
10.6
Severance Agreement of Patrick C. FitzPatrick, Senior Vice President and Chief
Financial Officer (incorporated by reference to Registrant's Form 10-K for 1996,
File No. 1-3879)
10.7
Restricted Stock Plan (incorporated by reference to Registrant's Form
10-K/A for 1995, File No. 1-3879)
10.8
1995 Stock Option Plan (incorporated by reference to Registrant's Form 10-K
for 1997, File No. 1-3879)
11
Computations of Earnings Per Common Share for the Years Ended December 31, 1997,
1996 and 1995 (incorporated by reference to Registrant's Form 10-K for 1997,
File No. 1-3879)
13
Registrant's 1997 Annual Report Form 10-K, filed with the Securities and
Exchange Commission on March 31, 1998, File No. 1-3879
21
Subsidiaries of the Registrant (incorporated by reference to Registrant's Form
10-K for 1997, File No. 1-3879)
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
DynCorp
Date: April 14, 1998 By: /s/ H. Montgomery Hougen
H. Montgomery Hougen
Vice President & Secretary
