<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 6, 1996
POST EFFECTIVE AMENDMENT NO. 1 TO REGISTRATION STATEMENT NO. 33-51523
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-4
----------
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 8731 95-3630868
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
10260 CAMPUS POINT DRIVE
SAN DIEGO, CALIFORNIA 92121
(619) 546-6000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
----------
Copy to:
Douglas E. Scott, Esq.
Corporate Vice President and General Counsel
Science Applications International Corporation
10260 Campus Point Drive
San Diego, California 92121
(619) 546-6000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------
Approximate date of commencement of proposed sales to the public:
From time to time after the Registration Statement becomes effective.
----------
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. /X/
If the securities being registered on this form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed maximum Proposed maximum Amount of
Title of each class of Amount to offering price aggregate registration
securities to be registered be registered per unit* offering price fee
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock,
par value $.01 per share........ 970,347 shs. $20.41 $19,804,782 $6,833
=============================================================================================================================
</TABLE>
* Estimated solely for the purpose of calculating the registration fee.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
contained herein will be used in connection with the securities covered by this
Registration Statement and Registration Statement No. 33-51523.
================================================================================
<PAGE> 2
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
CROSS-REFERENCE SHEET
BETWEEN
ITEMS IN FORM S-4 AND LOCATION IN PROSPECTUS
<TABLE>
<CAPTION>
FORM S-4 ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
-------------------------------- ----------------------
<S> <C>
1. Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus................ Facing Page; Cross-Reference
Sheet; Outside Front Cover Page
of Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus......................................... Inside Front and Outside Back
Cover Pages of Prospectus
3. Summary Information, Risk Factors, Ratio of
Earnings to Fixed Charges and Other
Information........................................... Information Incorporated by
Reference; Risk Factors; The
Company; Government Contracts;
Selected Financial Data*
4. Terms of the Transaction................................. The Offering; Description of
Capital Stock; Market
Information*
5. Pro Forma Financial Information.......................... *
6. Material Contracts with the Company Being
Acquired.............................................. *
7. Additional Information Required for Reoffering
by Persons and Parties Deemed to be
Underwriters.......................................... Resales by Affiliates of Acquired
Companies*
8. Interests of Named Experts and Counsel................... Legal Matters; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities........ *
10. Information with Respect to S-3 Registrants.............. Information Incorporated by
Reference; The Company;
Dividend Policy; Market
Information; Selected Financial
Data; Description of Capital Stock
11. Incorporation of Certain Information by
Reference............................................. Information Incorporated by
Reference
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
FORM S-4 ITEM NUMBER AND CAPTION LOCATION IN PROSPECTUS
-------------------------------- ----------------------
<S> <C>
12. Information with Respect to S-2 or S-3
Registrants........................................... *
13. Incorporation of Certain Information by
Reference............................................. *
14. Information with Respect to Registrants Other
Than S-2 or S-3 Registrants........................... *
15. Information with Respect to S-3 Companies................ *
16. Information with Respect to S-2 or S-3
Companies............................................. *
17. Information with Respect to Companies Other
Than S-2 or S-3 Companies............................. *
18. Information if Proxies, Consents or
Authorizations Are to be Solicited.................... *
19. Information if Proxies, Consents or
Authorizations Are Not to be Solicited or in
an Exchange Offer..................................... *
</TABLE>
- ---------------------------
* Not applicable (in whole or in part) or answer negative upon the date
of filing of this Registration Statement. The registrant may be
required to provide information (or further information) in response to
one or more of such items under certain circumstances by means of a
post-effective amendment to this Registration Statement or supplement
to the Prospectus contained herein.
<PAGE> 4
PROSPECTUS (LOGO)
3,000,000 SHARES OF CLASS A COMMON STOCK
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
Science Applications International Corporation ("SAIC" or the
"Company") has registered 3,000,000 shares of its Class A Common Stock, par
value $.01 per share (the "Class A Common Stock"), which may be offered from
time to time by this Prospectus in connection with one or more acquisition
transactions (each, an "Acquisition").
The consideration to be offered by the Company in Acquisitions may
consist of shares of the Class A Common Stock ("Acquisition Shares"), cash,
promissory notes, the assumption of liabilities, commitments to make future
capital contributions to the business to be acquired or any combination thereof.
Acquisitions may be accomplished by one or more methods, including but not
limited to the acquisition by the Company of stock, partnership interests or
assets of a business or entity to be acquired or the merger or consolidation of
such corporation or entity with the Company or a subsidiary of the Company. The
amount and type of consideration to be offered and the other terms of each
Acquisition will be determined by negotiations between the Company and the
owners or controlling persons of the business or assets to be acquired and will
be set forth in a definitive agreement among such parties governing such
Acquisition.
This Prospectus, as amended or supplemented if appropriate, has also
been prepared for use by persons who will receive shares issued by the Company
in Acquisitions and who wish to offer and sell such shares, on terms then
obtainable, in transactions in which they may be deemed underwriters within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"). Any
profits realized on such sales by such persons may be regarded as underwriting
compensation under the Securities Act. See "Resales by Affiliates of Acquired
Companies." In addition, if permitted by law, the Company may pay finders' fees
from time to time in connection with specific Acquisitions. Finders' fees may be
in the form of cash but will not be paid in shares of the Class A Common Stock
offered hereby. Any person receiving any such fees may be deemed underwriters
within the meaning of the Securities Act, and such fees may be regarded as
underwriting compensation under the Securities Act. Other than as provided
above, the Company does not expect to pay underwriting commissions or discounts
in connection with this Offering.
All of the Acquisition Shares will be subject to certain restrictions
(including restrictions on their transferability) set forth in the Company's
Certificate of Incorporation and may be subject to certain contingencies. See
"Description of Capital Stock--Common Stock--Restrictions on Class A Common
Stock." SEE "RISK FACTORS" ON PAGES 3 TO 5 FOR A DESCRIPTION OF THIS AND CERTAIN
OTHER RISKS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
--------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------
This Prospectus contains forward-looking statements that involve risks
and uncertainties. The Company's actual results may differ significantly from
the results discussed in the forward-looking statements. Factors that might
cause such differences include, but are not limited to, those discussed in "Risk
Factors" and the Company's periodic reports incorporated by reference herein.
THE DATE OF THIS PROSPECTUS IS MAY __, 1996
<PAGE> 5
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement under the Securities
Act with respect to the securities offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement and the
exhibits thereto. For further information, reference is made to such
Registration Statement and exhibits. Statements contained in this Prospectus as
to the contents of any contract or any other document are not necessarily
complete, and in each instance reference is made to the copy of such contract or
document filed as an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference. Copies of the Registration
Statement and the exhibits thereto may be inspected without charge at the
offices of the Commission listed below, and copies of all or any part thereof
may be obtained from the Commission upon payment of prescribed fees.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
with the requirements of the Exchange Act, the Company files with the Commission
reports, proxy statements and other information which can be inspected and
copied at the offices of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549; Suite 1400, Northwestern Atrium Center, 500 West Madison
Street, Chicago, Illinois 60661-2511; and World Trade Center, New York, New York
10048. Copies of such materials can be obtained at prescribed rates from the
Commission's Public Reference Section, Washington, D.C. 20549.
INFORMATION INCORPORATED BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1996 (the "1996 10-K"), which has been filed by the Company with the
Commission pursuant to the Exchange Act, is incorporated herein by reference. In
addition, all documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this
offering shall be deemed to be incorporated herein by reference. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein will be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is, or is deemed to be, incorporated by
reference herein modifies or supersedes any such statement. Any such statement
so modified or superseded will not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS, WITHOUT EXHIBITS
(UNLESS SUCH EXHIBITS ARE INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS), ARE
AVAILABLE, WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST FROM SCIENCE
APPLICATIONS INTERNATIONAL CORPORATION, 10260 CAMPUS POINT DRIVE, SAN DIEGO,
CALIFORNIA 92121, ATTENTION: CORPORATE SECRETARY (TELEPHONE 619-535-7323). IN
ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE AT
LEAST FIVE BUSINESS DAYS PRIOR TO THE DATE ON WHICH A FINAL INVESTMENT DECISION
IS TO BE MADE.
2
<PAGE> 6
RISK FACTORS
Prior to purchasing the Class A Common Stock offered in the Prospectus,
purchasers should carefully consider all of the information contained in the
Prospectus and in particular should carefully consider the following factors:
CONCENTRATION OF REVENUE/DEPENDENCE ON GOVERNMENT CONTRACTS
Revenues generated from the sale of the Company's Technical Services
and Products (as such terms are defined on page 5) to the U.S. Government as a
prime contractor or subcontractor accounted for 83%, 86% and 88% of revenues in
fiscal years 1996, 1995 and 1994, respectively. U.S. Government spending has
declined in recent years, and the current Congress and presidential
administration have indicated that they intend to further reduce U.S. Government
spending. The loss of a substantial amount of government business could have a
material adverse effect on the Company's operations and financial condition.
Although the Company has made progress in its efforts to diversify into
non-governmental business, it remains heavily dependent upon business with the
U.S. Government, and there can be no assurances that the Company will be
successful in expanding its customer base or that any new customers will place
orders for the Company's Technical Services or Products in amounts comparable to
those of the U.S. Government. See "The Company."
DEPENDENCE ON ACQUISITIONS FOR GROWTH
A significant portion of the growth in the Company's revenues in recent
years has been achieved through acquisitions of businesses that complement the
Company's Products and Technical Services. The Company intends to make
additional acquisitions in the future. While the Company has been successful in
identifying and consummating acquisitions in the past, there can be no assurance
that it will be able to continue to make such acquisitions in the future at
prices that it considers reasonable or, if the acquisitions are consummated,
that the Company will be able to integrate the acquired business without
adversely affecting the Company's results of operations and financial
condition. See "The Company."
COMPETITION
The business in which the Company is engaged are highly competitive.
The Company's competitors include larger organizations with substantially
greater financial resources and larger technical staffs, smaller, more highly
specialized entities and the U.S. Government's own in-house capabilities and
federal non-profit contract research centers. The Company's continued success is
dependent upon its ability to provide superior service and performance on a
cost-effective basis. See 1996 10-K, Item 1, "Business--Competition."
EARLY TERMINATION OF GOVERNMENT CONTRACTS
Many of the U.S. Government programs in which the Company participates
as a contractor or subcontractor may extend for several years; however, such
programs are normally funded on an annual basis. All U.S. Government contracts
and subcontracts may be modified, curtailed or terminated at the convenience of
the government. Modification, termination or curtailment of major programs or
contracts of the Company could have a material adverse effect on the results of
the Company's operations. Although such contract and program modifications,
terminations or curtailments have not had a material adverse effect on the
Company in the past, no assurance can be given that they will not have such an
effect in the future. See "Government Contracts."
3
<PAGE> 7
CONTRACT REVENUES SUBJECT TO AUDITS BY GOVERNMENT AGENCIES
Contract costs for services or products supplied to the U.S.
Government, including allocated indirect costs, are subject to audit and
adjustments by negotiations between the Company and U.S. Government
representatives. Substantially all of the Company's indirect contract costs have
been agreed upon through the fiscal year ended January 31, 1991. Contract
revenues for subsequent years have been recorded in amounts which are expected
to be realized upon final settlement. However, no assurance can be given that
audits and adjustments for subsequent years will not result in decreased
revenues or profits for those years. See "Government Contracts."
FIXED PRICE CONTRACT EXPOSURE
During the fiscal years ended January 31, 1996, 1995 and 1994,
approximately 15%, 13% and 12%, respectively, of the Technical Services revenues
were from firm fixed-price type contracts, while the majority of Products
revenues in these three years were derived from such contracts. Because the
Company assumes the risk of performing a firm fixed-price contract at the
stipulated price, the failure to accurately estimate ultimate costs or to
control costs during performance of the work could result, and in some instances
has resulted, in reduced profits or losses for particular firm fixed-price
contracts. See "Government Contracts."
AT RISK CONTRACT COSTS
Any costs incurred by the Company prior to the execution of a contract
or contract amendment are incurred at the Company's risk, and it is possible
that such costs will not be reimbursed by the customer. Unbilled receivables in
this category which were included in Technical Services and Products revenues at
January 31, 1996 were $18,561,000 and $2,025,000, respectively. Although the
Company expects to recover substantially all such costs, no assurance can be
given that the contracts or contract amendments will be received or that the
related costs will be recovered. See "Government Contracts."
ABSENCE OF A PUBLIC MARKET
There is no public market for the Common Stock. The Company and the
trustees of the Company's and certain of its subsidiaries' employee benefit
plans are currently authorized, but not obligated, to purchase shares of Class A
Common Stock in the Limited Market on any Trade Date (as such terms are defined
on page 12), but only if and to the extent that they, in their discretion,
determine to make such purchases. To the extent that purchases by such trustees
or the Company are not sufficient, the ability of stockholders to resell their
shares in the Limited Market will likely be adversely affected. No assurance can
be given that a stockholder desiring to sell all or a portion of his or her
shares of the Class A Common Stock in any trade will be able to do so. See
"Market Information--The Limited Market."
OFFERING PRICE DETERMINED BY FORMULA
The offering price and the price at which the Class A Common Stock
trades in the Limited Market are, and subsequent prices will be, determined by
means of the formula and valuation process described on page 14 of the
Prospectus (the "Formula Price"). See "Market Information--Price Range of Class
A Common Stock and Class B Common Stock."
NO ASSURANCES REGARDING FUTURE RETURNS
There can be no assurance that the Class A Common Stock will in the
future provide returns comparable to historical returns. See "Market
Information--Price Range of Class A Common Stock and Class B Common Stock."
4
<PAGE> 8
NO CASH DIVIDENDS
The Company has never declared or paid any cash dividends on its
capital stock and no cash dividends on the Class A Common Stock or Class B
Common Stock are contemplated in the foreseeable future. The Company's present
intention is to retain any future earnings for use in its business. See
"Dividend Policy."
RESTRICTIONS ON CLASS A COMMON STOCK
Certain of the shares of Class A Common Stock presently outstanding
are, and all shares of Class A Common Stock offered hereby will be, subject to
certain restrictions (including a right of first refusal and a right of
repurchase upon termination of employment or affiliation and other restrictions
on their transferability) set forth in the Company's Certificate of
Incorporation. See "Description of Capital Stock--Common Stock--Restrictions on
Class A Common Stock."
DEPENDENCE UPON KEY PERSONNEL
The Company's success will depend upon the continued contributions of
its founder, J.R. Beyster, its officers and key personnel, the loss of which
could materially adversely affect the Company's operations. The Company's growth
will depend upon its ability to attract and retain skilled employees and the
ability of its officers and key employees to successfully manage growth. Any
failure to do so could have a material adverse effect on the Company's
operations. The Company has not generally entered into long-term employment
contracts with its officers and key employees. In addition, the Company does not
maintain "key man" life insurance for its officers or key employees.
ANTI-TAKEOVER EFFECTS
Consistent with and in furtherance of the Company's employee ownership
philosophy, certain provisions of the Company's Certificate of Incorporation and
Bylaws may discourage, delay, or prevent attempts to acquire control of the
Company that are not approved by the Company's Board of Directors. The
provisions 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, as well as making it more difficult for
individual stockholders or a group of stockholders to elect directors. See
"Description of Capital Stock--Anti-Takeover Effects."
THE COMPANY
Since its founding in 1969, the Company has been engaged in providing
diversified professional and technical services ("Technical Services") and
designs, develops and manufactures high-technology products ("Products"). The
Company's Technical Services and Products are primarily sold to departments and
agencies of the U.S. Government, including the Department of Defense ("DOD"),
Department of Energy ("DOE"), Department of Transportation, Department
of Veterans Affairs ("VA"), Environmental Protection Agency and National
Aeronautics and Space Administration. Revenues generated from the sale
of Technical Services and Products to the U.S. Government as a prime contractor
or subcontractor accounted for 83%, 86% and 88% of revenues in fiscal years
1996, 1995 and 1994, respectively. The balance of the Company's revenues are
attributable to the sales of Technical Services and Products to foreign, state
and local governments, commercial customers and others. See "Risk
Factors--Concentration of Revenue/Dependence on Government Contracts."
The percentage of revenues attributable to Technical Services and
Products has remained relatively constant at 93% and 7%, respectively, for
fiscal year 1996; 91% and 9%, respectively, for
5
<PAGE> 9
fiscal year 1995 and 92% and 8%, respectively, for fiscal year 1994. The Company
provides Technical Services primarily in the areas of "National Security,"
"Environment," "Energy" and "Other Technical Services," the last of which
includes the Company's health, space, transportation and commercial information
technology business areas. The percentage of Technical Services revenues
attributable to National Security-related work has gradually declined to 45% of
total revenues for fiscal year 1996. For fiscal year 1996, the Environment,
Energy and Other Technical Services business areas accounted for 13%, 8% and
28%, respectively, of total revenues.
A significant portion of the growth in the Company's revenues in recent
years has been achieved through acquisitions of businesses that complement the
Company's Products and Technical Services. Acquisitions of businesses in 1996
were made primarily with issuance of Class A Common Stock and were primarily
financed with cash in fiscal years 1995 and 1994. The Company expects to
continue to acquire businesses and equity interests in other businesses in the
future. While the Company has been successful in identifying and consummating
acquisitions in the past, there can be no assurance that it will be able to
continue to make such acquisitions in the future at prices that it considers
reasonable or, if the acquisitions are consummated, that the Company will be
able to integrate the acquired business without adversely affecting the
Company's results of operations. See "Risk Factors--Dependence on Acquisitions
for Growth."
As of April 19, 1996, the Company had approximately 21,200 employees
and did business at over 330 locations throughout the world. The Company's
principal executive offices are located at 10260 Campus Point Drive, San Diego,
CA 92121, telephone (619) 546-6000. As used in this Prospectus, all references
to the Company include, unless the context indicates otherwise, Science
Applications International Corporation and its predecessor and subsidiary
corporations.
TECHNICAL SERVICES
National Security
The Company currently provides a wide array of national
security-related Technical Services to its customers, including advanced
research and technology development, systems engineering and systems integration
and technical, operational and management support services. Examples of the
Company's Technical Services in the national security area include the
following:
- Development and integration of command, control and intelligence
applications software, middleware and data bases in client-server
architectures to provide situational awareness and decision-aiding
to military commanders and organizations; range of services
include architectural definition, systems and software
engineering, systems installation, training and site support.
- Information system engineering and support services, including
requirements analysis and acquisition support, computer system
design, information and user environment modeling and data
communication systems support.
- Defense studies and analyses for various defense and intelligence
agencies of the U.S. Government, including studies regarding
conventional and nuclear warfare issues, treaty negotiation and
verification, and the integration of military operational and
technological considerations with defense policy issues.
- Development of core technology for advanced distributed simulation
and applications for the DOD and other government and commercial
customers.
6
<PAGE> 10
- Support of numerous DOD test and evaluation requirements of
ground, air, sea and space systems; assistance to the U.S. Air
Force, U.S. Navy, U.S. Army, U.S. Marine Corps and the Office of
the Secretary of Defense in assessing the military effectiveness
and suitability of major communication, sensor, navigation, weapon
and related systems that support primary service and/or joint
service roles and missions.
- Logistics engineering services and turnkey logistics information
management systems for a wide variety of government customers.
- Design, integration, implementation and operation of battlefield
simulation training ranges on land, air and sea.
- Systems engineering and technical assistance for cruise missiles,
unmanned aerial vehicles, future aircraft and ballistic missile
concepts; systems analysis of sensors for the detection and
tracking of aircraft and ballistic missiles; and studies regarding
the survivability of tactical aircraft and strategic missiles.
- Support to the DOD in imagery collection, processing, exploitation
and dissemination systems for digital processing, technology
intelligence communications and information management.
- Maintenance engineering and training, including field technical
services and repair, electronic system design and hands-on
operational support, primarily to the U.S. Navy.
- Independent verification and validation and software quality
assurance support services for shipboard combat systems, mission
planning functions, operational flight software command and
control processors, nuclear surety systems, soft copy imagery
processing, data storage and dissemination systems and various
submarine, surface ship and command, control and communications
systems.
- Engineering, environmental, quality assurance, integration and
program support to the U.S. Army's chemical demilitarization and
remediation activity.
Environment
In the environmental area, the Company performs site assessments,
remedial investigations and feasibility studies, remedial actions, technology
evaluations, sampling, monitoring and regulatory compliance support and
training. Examples of the Company's Technical Services in the environment area
include the following:
- Management and technical support to the DOE for the
characterization of the nation's first potential high-level waste
repository, including the preparation and coordination of
environmental assessments, field testing, technical evaluations,
public information, quality assurance, information systems and
training.
- Development, demonstration and evaluation of new technologies for
hazardous waste treatment, including bioremediation and
high-energy plasma treatment systems.
- Solid and hazardous waste services to federal, state and local
governments and the private sector, including environmental
assessments, environmental impact statements, design engineering,
remedial investigations and feasibility studies, remedial actions,
regulatory and enforcement support, pollution prevention and
engineering services.
7
<PAGE> 11
- Analysis of a broad range of environmental issues associated with
the marine sciences such as ocean dumping, mineral exploration,
global change and global ocean circulation and temperature trends.
- Support associated with the development of treatment technologies,
including treatability studies, development of protocols for
technology evaluation, pollution prevention assessments, waste
minimization and technology assessments.
- Development and implementation of information systems.
Energy
The energy-related Technical Services of the Company include safety
evaluations, security, reliability and availability engineering evaluations,
technical reviews, quality assurance, information systems, plant monitoring
systems and project management. Examples of the Company's Technical Services in
the energy area include the following:
- Engineering and support services to nuclear, electric, gas and
other utility operations in the areas of computer systems,
information processing, configuration management, risk assessment,
safety analysis, nuclear engineering, reliability and availability
evaluations, simulator upgrades, energy policy analysis and
alternative energy evaluation.
- Support to DOE in planning, facility transitions, safety analysis,
transportation, waste management, quality assurance, emergency
preparedness and public outreach.
- Design, fabrication and application of alternative energy sources
such as solar generators and fuel cells.
- Information systems services to the DOE, including collection,
analysis and storage of energy information, the development of
geographic information systems and the overall management of large
computer facilities.
- Support to DOE in fusion energy research, including facility
management, computer system development and project management
support in connection with an international thermonuclear
experimental reactor.
- Systems integration services to the utility industry, including
design, development and installation of plant process computer
systems, supervisory control and data acquisition (SCADA) systems,
and electronic security systems.
- Management, operation and technical services for fossil energy
research laboratories.
Other Technical Services
The Company provides Technical Services to government and commercial
customers in such other areas as health, space, transportation and commercial
information technology. The Company's health-related Technical Services
include medical information systems, technology development and adolescent
counseling. Examples of health-related and other Technical Services provided by
the Company are described below:
- Applied research, systems integration and customer support
services to both commercial and federal health care clients,
including research initiatives for the U.S. Advanced Research
Projects Agency, developing and operating a nationwide health care
frame relay-based
8
<PAGE> 12
telecommunications system for the VA and automating the
information systems for the DOD's medical treatment facilities
worldwide.
- Research support services to the National Cancer
Institute-Frederick Cancer Research and Development Center,
including management and operations support, quality and safety
operations, ongoing research and research support tasks.
- Development, installation and operation of computer and
telecommunications systems for various transportation
applications, including automated toll revenue collection, rail
asset and freight management, intermodal terminal operation,
advanced traffic and congestion management, rail electrification,
traffic control, air traffic control, commercial vehicle
electronic clearance, explosive and contraband detection, and
state motor vehicle registration.
- Strategic planning, operational analysis and evaluation, surface
transportation planning and engineering, software development and
reengineering, safety and human factors research, and hazardous
material transportation safety.
- Information technology and automatic data processing outsourcing
services for commercial clients.
- Support to the U.S. Army in the biomedical area, including
providing expert analysis, research planning, program design and
review, and topical research on a variety of military medical
issues, including medical countermeasures to chemical and
biological warfare, casualty care, battlefield hazards and the
U.S. Army's breast cancer research program, as well as biomedical
service and management of government facilities.
- Scientific and computing services to federal agencies involved in
global change research, including processing, utilization and
scientific analysis of space, airborne and ground-based remotely
sensed data.
- Security services for the U.S. Government and commercial
customers, including material control and accountability, computer
and information security, technical surveillance countermeasures,
intrusion detection, access control and physical plant threat
assessments and vulnerability analysis.
PRODUCTS
The Company designs, develops and manufactures high-technology products
for government and commercial customers. Examples of the Company's Products
include the following:
- Automatic equipment identification technology for rail, truck, air
and sea transportation modes.
- Ruggedized/militarized computers for various military and
industrial applications.
- A variety of flat panel displays for military applications based
on plasma and electroluminescent technology and liquid crystal
display technology.
GOVERNMENT CONTRACTS
Many of the U.S. Government programs in which the Company participates
as a contractor or subcontractor may extend for several years; however, such
programs are normally funded on an annual basis. All U.S. Government contracts
and subcontracts may be modified, curtailed or terminated at the
9
<PAGE> 13
convenience of the government. In the event that a contract is terminated for
convenience, the Company generally would be reimbursed for its allowable costs
through the date of termination and would be paid a proportionate amount of the
stipulated profit or fee attributable to the work actually performed.
Termination or curtailment of major programs or contracts of the
Company could have a material adverse effect on the results of the Company's
operations. Although such contract and program terminations have not had a
material adverse effect on the Company in the past, no assurance can be given
that curtailments or terminations of U.S. Government programs or contracts will
not have a material adverse effect on the Company in the future. See "Risk
Factors--Early Termination of Government Contracts."
The Company's business with the U.S. Government and other customers is
generally performed under cost-reimbursement, time-and-materials, fixed-price
level-of-effort or firm fixed-price contracts. Under cost-reimbursement
contracts, the customer reimburses the Company for its direct costs and
allocable indirect costs, plus a fixed fee or incentive fee. Under
time-and-materials contracts, the Company is paid for labor hours at negotiated,
fixed hourly rates and reimbursed for other allowable direct costs at actual
costs plus allocable indirect costs. Under fixed-price level-of-effort
contracts, the customer pays the Company for the actual labor hours provided to
the customer at negotiated hourly rates. Under firm fixed-price contracts, the
Company is required to provide stipulated products, systems or services for a
fixed price. Because the Company assumes the risk of performing a firm
fixed-price contract at the stipulated price, the failure to accurately estimate
ultimate costs or to control costs during performance of the work could result,
and in some instances has resulted, in reduced profits or losses for particular
firm fixed-price contracts. See "Risk Factors--Fixed Price Contract Exposure."
During the fiscal years ended January 31, 1996, 1995 and 1994,
approximately 57%, 64% and 65%, respectively, of Technical Services revenues
were derived from cost-reimbursement type contracts and approximately 15%, 13%
and 12%, respectively, of the Technical Services revenues were from firm
fixed-price type contracts, with the balance from time-and-materials and
fixed-price level-of-effort type contracts. In contrast, the majority of
Products revenues in these three years were derived from firm fixed-price type
contracts.
Any costs incurred by the Company prior to the execution of a contract
or contract amendment are incurred at the Company's risk, and it is possible
that such costs will not be reimbursed by the customer. Unbilled receivables in
this category which were included in the Technical Services revenues, exclusive
of related fees, at January 31, 1996 were approximately $18,561,000. Unbilled
receivables in this category which were included in the Products revenues,
exclusive of related fees, at January 31, 1996 were approximately $2,025,000.
Although no assurance can be given that the contracts or contract amendments
will be received or that the related costs will be recovered, the Company
expects to recover substantially all such costs. See "Risk Factors--At Risk
Contract Costs."
Contract costs for services or products supplied to the U.S.
Government, including allocated indirect costs, are subject to audit and
adjustments by negotiations between the Company and U.S. Government
representatives. Substantially all of the Company's indirect contract costs have
been agreed upon through the fiscal year ended January 31, 1991. Contract
revenues for subsequent years have been recorded in amounts which are expected
to be realized upon final settlement. However, no assurance can be given that
audits and adjustments for subsequent years will not result in decreased
revenues or profits for those years. See "Risk Factors--Contract Revenues
Subject to Audits by Government Agencies."
The Company is from time to time subject to certain U.S. Government
inquiries and investigations of its business practices. The Company does not
anticipate any action as a result of such inquiries and investigations that
would have a material adverse effect on its consolidated financial position or
results of operations or its ability to conduct business.
10
<PAGE> 14
THE OFFERING
The offering consists of up to 3,000,000 shares of Class A Common Stock
which may be offered by the Company from time to time pursuant to this
Prospectus in connection with one or more Acquisitions (the "Offering"). The
consideration to be offered by the Company in Acquisitions may include
Acquisition Shares, cash, promissory notes, the assumption of liabilities,
commitments to make future capital contributions to the business to be acquired
or any combination thereof. Acquisitions may be accomplished by one or more
methods, including but not limited to the acquisition by the Company of stock,
partnership interests or assets of a business or entity to be acquired or the
merger or consolidation of such corporation or entity with the Company or a
subsidiary of the Company. The amount and type of consideration to be offered
and the other terms of each Acquisition will be determined by negotiations
between the Company and the owners or controlling persons of the business or
assets to be acquired and will be set forth in a definitive agreement among such
parties governing such Acquisition (an "Acquisition Agreement"). The Company
expects that, in most cases, the aggregate market value of the Acquisition
Shares to be issued in connection with any Acquisition will be determined upon
signing of the Acquisition Agreement relating to such Acquisition. Such
Acquisition Shares may be issued in installments or subject to contingencies or
vesting requirements.
The Company's acquisition strategy is primarily to target companies or
business operations that would add new or complementary technologies,
capabilities or customers. In circumstances where it is financially attractive
to the Company, the Company may also acquire companies or business operations
involving existing capabilities or customers in order to increase its presence
in the relevant markets.
The Company anticipates that none of the Acquisitions will require the
approval of the stockholders of SAIC. Therefore, under Delaware law, holders of
the Class A Common Stock and Class B Common Stock, par value $.05 per share (the
"Class B Common Stock"), would not have any dissenters' rights with respect to
any of the Acquisitions. Generally, to the extent that any Acquisition involves
the sale of all or substantially all of the assets of the company to be acquired
(the "Acquired Company") or the merger or consolidation of the Acquired Company
with SAIC or a subsidiary of SAIC, such Acquisition would require the approval
of the stockholders of the Acquired Company in accordance with the laws of the
state of incorporation of the Acquired Company and/or its certificate or
articles of incorporation. The availability of appraisal or similar rights to
dissenting stockholders of the Acquired Company will also be a matter to be
determined under the law of the state of incorporation of the Acquired Company
and/or its certificate or articles of incorporation.
The Offering will be conducted primarily through the efforts of the
Company's management. No officer, director, employee or affiliate of the Company
is expected to receive any direct or indirect compensation relating to the
Offering, nor is any such person expected to have any material interest, direct
or indirect, in any Acquisition under consideration by the Company. Under
certain circumstances, persons who receive Acquisition Shares and who wish to
offer and sell such shares, on terms then obtainable, may be deemed to be
underwriters within the meaning of the Securities Act. In addition, if permitted
by law, the Company may pay finders' fees from time to time in connection with
specific Acquisitions. Finders' fees may be in the form of cash but will not be
paid in shares of Class A Common Stock offered hereby. Any person receiving any
such fees may be deemed underwriters within the meaning of the Securities Act,
and such fees may be regarded as underwriting compensation under the Securities
Act.
The Company expects to account for the Acquisitions by the purchase
method of accounting, in which case the stock or assets acquired will be valued
based on the fair market value of the consideration, including the Acquisition
Shares, paid or payable therefor.
The federal income tax consequences of Acquisitions are likely to
differ as a function of the structure of each specific Acquisition, the terms of
the governing Acquisition Agreement and other
11
<PAGE> 15
factors. Until each specific Acquisition is structured, it is not possible to
determine the federal income tax consequences of such Acquisition to the
Company, the Acquired Company or its stockholders. However, it is expected that
no Acquisition will have significant federal income tax consequences to the
Company. On the other hand, the federal income tax consequences to the Acquired
Company or its stockholders may be significant. Therefore, before deciding
whether to participate in or to approve, consent or otherwise authorize an
Acquisition in which the Acquired Company or its stockholders would receive
Acquisition Shares (in total or partial consideration thereof), the Acquired
Company and each such stockholder should consult their own tax advisors as to
the tax consequences of such transaction.
RESALES BY AFFILIATES OF ACQUIRED COMPANIES
This Prospectus, as appropriately amended or supplemented, has also
been prepared for use by those persons who may receive Acquisition Shares from
the Company and who are deemed to control, be controlled by or under common
control with the Acquired Company. Such persons (referred to under this caption
as "Affiliates") may be entitled to offer and sell such Class A Common Stock, on
terms then obtainable, under circumstances requiring the use of a Prospectus;
provided, however, that no such Affiliate will be authorized to use this
Prospectus for any offer or sale of such Class A Common Stock without first
obtaining the consent of the Company. The Company may consent to the use of this
Prospectus, together with a Prospectus Supplement, if required (as discussed
below), for a limited period of time by such Affiliates and subject to
limitations and conditions which may be varied by agreement between the Company
and such Affiliates. Resales of such shares may be on the Limited Market (as
defined below) or in private transactions. In connection with such transactions,
such Affiliates may be deemed to be underwriters within the meaning of the
Securities Act. Any profits realized on such sales by such Affiliates may be
regarded as underwriting compensation.
When resales on behalf of such Affiliates are to be made through the
Limited Market, the Affiliates, like all stockholders selling shares in the
Limited Market (other than the Company and certain employee benefit plans of the
Company), will pay the Company's wholly-owned, broker-dealer subsidiary, Bull,
Inc., a commission equal to two percent of the proceeds from their sales. See
"Market Information--The Limited Market." In connection with such sales, Bull,
Inc. may be deemed to be an underwriter within the meaning of the Securities Act
and any commissions earned by Bull, Inc. may be deemed to be underwriting
compensation under the Securities Act. A Prospectus Supplement, if required,
will be filed under Rule 424(c) under the Securities Act, disclosing the number
of shares involved, the price at which such shares were sold by such Affiliate,
the commissions to be paid by such Affiliate to Bull, Inc. and information about
the Affiliate.
It is not expected that any individual who is or has been an officer,
director, employee or affiliate of SAIC or any of its subsidiaries will be
receiving any shares of Class A Common Stock offered hereby.
MARKET INFORMATION
THE LIMITED MARKET
Since its inception, the Company has followed a policy of remaining
essentially employee owned. As a result, there has never been a general public
market for any of the Company's securities. In order to provide liquidity for
its stockholders, however, the Company has maintained a limited secondary market
(the "Limited Market") through its wholly-owned, broker-dealer subsidiary, Bull,
Inc., which was organized in 1973 for the purpose of maintaining the Limited
Market.
The Limited Market generally permits existing stockholders to sell
shares of Class A Common Stock on four predetermined days each year (each a
"Trade Date"). All shares of Class B Common Stock to be sold in the Limited
Market must first be converted into five times as many shares of Class A Common
Stock. All sales are made at the prevailing Formula Price to employees,
directors and
12
<PAGE> 16
consultants of the Company who have been approved by the Board of Directors or
the Operating Committee of the Board of Directors as being entitled to purchase
up to a specified number of shares of Class A Common Stock. In addition, the
trustees of the Company's Employee Stock Ownership Plan ("ESOP"), Cash or
Deferred Arrangement ("CODA"), 1995 Stock Purchase Plan, Stock Compensation
Plan, Management Stock Compensation Plan, Key Executive Stock Deferral Plan, and
the Syntonic Technology, Inc. Retirement Savings Plan ("Syntonic Savings Plan")
(collectively, the "Benefit Plans") may also purchase shares of Class A Common
Stock for their respective trusts in the Limited Market. All sellers in the
Limited Market (other than the Company and certain employee benefit plans of the
Company), pay Bull, Inc. a commission equal to two percent of the proceeds
from such sales. No commission is paid by purchasers in the Limited Market.
In the event that the aggregate number of shares offered for sale in
the Limited Market on any Trade Date is greater than the aggregate number of
shares sought to be purchased by authorized buyers and the Company, offers by
stockholders to sell 500 or less shares of Class A Common Stock, or up to the
first 500 shares if more than 500 shares of Class A Common Stock are offered by
any such stockholder, will be accepted first. Offers to sell in excess of 500
shares of Class A Common Stock will be accepted on a pro-rata basis determined
by dividing the total number of shares remaining under purchase orders by the
total number of shares remaining under sell orders. If, however, there are
insufficient purchase orders to support the primary allocation of 500 shares of
Class A Common Stock for each proposed seller, then the purchase orders will be
allocated equally among all of the proposed sellers up to the total number of
shares offered for sale. To the extent that the aggregate number of shares
sought to be purchased exceeds the aggregate number of shares offered for sale,
the Company may, but is not obligated to, sell authorized but unissued shares of
Class A Common Stock in the Limited Market.
The Company is currently authorized, but not obligated, to purchase up
to 1,250,000 shares of Class A Common Stock in the Limited Market on any Trade
Date, but only if and to the extent that the number of shares offered for sale
by stockholders exceeds the number of shares sought to be purchased by
authorized buyers and the Company, in its discretion, determines to make such
purchases. In fiscal years 1996 and 1995, the Company purchased 33,372 shares
and 279,668 shares, respectively, in the Limited Market. The Company's
purchases in fiscal years 1996 and 1995 accounted for 2% and 16%, respectively,
of the total shares purchased by all buyers in the Limited Market during those
years.
During the 1996 and 1995 fiscal years, the trustees of the Company's
CODA, 1993 Employee Stock Purchase Plan, 1995 Employee Stock Purchase Plan, and
the Syntonic Technology, Inc. Retirement Savings Plan purchased an aggregate of
1,045,893 shares and 1,065,741 shares, respectively, in the Limited Market.
These purchases accounted for approximately 69% and 61% of the total shares
purchased by all buyers in the Limited Market during fiscal years 1996 and 1995,
respectively. Such purchases may change in the future, depending on the levels
of participation in and contributions to such plans and the extent to which such
contributions are invested in Class A Common Stock. To the extent that purchases
by the trustees of the Benefit Plans decrease and purchases by the Company do
not increase, the ability of stockholders to resell their shares in the Limited
Market will likely be adversely affected. No assurance can be given that a
stockholder desiring to sell all or a portion of his or her shares of the
Company's Class A Common Stock in any trade will be able to do so. See "Risk
Factors--Absence of a Public Market."
The Company received a no-action letter from the SEC that authorizes
the Company and the ESOP to commence on an annual basis, at the Company's
discretion, a joint tender offer (a "Tender Offer") to purchase all shares of
the Company's Class A Common Stock held by persons who are not employees,
directors or consultants of the Company (or family members of, or trustees for,
such employees, directors or consultants of the Company) as of the date the
Tender Offer is commenced (the "Outside Stockholders"). Under current federal
income tax laws, the Tender Offer, as structured, would allow Outside
Stockholders who tender certain shares purchased by the ESOP to defer the
payment of
13
<PAGE> 17
federal income tax under Section 1042 of the Code on any capital gain derived
from the sale, provided certain conditions are met.
The Company and the ESOP have completed one Tender Offer pursuant to
which the ESOP purchased on an aggregate of 700,444 shares of Class A Common
Stock from 186 Outside Stockholders on November 20, 1992. The Company has not
yet determined whether it will commence a Tender Offer during calendar year
1996. There can be no assurance that a Tender Offer will be commenced in the
future or, if commenced, that it will be completed. If a Tender Offer is
undertaken in the future, the Company will be required to take certain actions
to ensure that such Tender Offer does not negatively affect the liquidity of the
Limited Market on the Trade Date upon which such Tender Offer is completed.
PRICE RANGE OF CLASS A COMMON STOCK AND CLASS B COMMON STOCK
The fair market value of the Class A Common Stock is established
pursuant to the valuation process described below, which uses the formula set
forth below to determine the Formula Price at which the Class A Common Stock
trades in the Limited Market. The Formula Price is reviewed by the Board of
Directors at least four times each year, generally in conjunction with Board of
Directors meetings which are currently scheduled for January, April, July and
October. Pursuant to the Certificate of Incorporation, the price applicable to
shares of Class B Common Stock is equal to five times the Formula Price. See
"Risk Factors--Offering Price Determined by Formula."
The following formula ("Formula") is used in determining the Formula
Price: the price per share is equal to the sum of (i) a fraction, the numerator
of which is the stockholders' equity of the Company at the end of the fiscal
quarter immediately preceding the date on which a price determination is to
occur ("E") and the denominator of which is the number of outstanding common
shares and common share equivalents at the end of such fiscal quarter ("W1") and
(ii) a fraction, the numerator of which is 5.66 multiplied by the market factor
("M" or "Market Factor"), multiplied by the earnings of the Company for the four
fiscal quarters immediately preceding the price determination ("P"), and the
denominator of which is the weighted average number of outstanding common shares
and common share equivalents for those four fiscal quarters, as used by the
Company in computing primary earnings per share ("W"). The number of outstanding
common shares and common share equivalents described above assumes the
conversion of each share of Class B Common Stock into five shares of Class A
Common Stock. The 5.66 multiplier is a constant which was first included in the
Formula in March 1976. The Market Factor is a numerical factor which yields a
fair market value for the Class A Common Stock and the Class B Common Stock by
reflecting existing securities market conditions relevant to the valuation of
such stock. In establishing the Market Factor, the Board of Directors considers
the performance of the general securities markets and relevant industry groups,
the financial performance of the Company versus comparable public companies,
general economic conditions, input from an independent appraisal firm and other
relevant factors. The Market Factor is generally reviewed quarterly by the Board
of Directors in conjunction with an appraisal which is prepared by the
independent appraisal firm for the committees administering the qualified
retirement plans of the Company and certain of its subsidiaries (collectively,
the "Committee") and which is relied upon by the Committee and the Board of
Directors. The Market Factor, as determined by the Board of Directors, remains
in effect until subsequently changed by the Board of Directors. The Formula
Price of the Class A Common Stock, expressed as an equation, is as follows:
E 5.66MP
Formula Price = --- + --------
W W
1
14
<PAGE> 18
The Formula was modified by the Board of Directors on April 14, 1995 to
delete a limitation that the Formula Price not be less than 90% of the net book
value per share of the Class A Common Stock at the end of the quarter
immediately preceding the date on which a price revision is to occur (the "Book
Value Floor"). The modification was intended to ensure that the Formula Price
would be a fair market value as required by law. The Formula Price has always
exceeded the Book Value Floor, and the Book Value Floor has never been used to
establish the Formula Price. With the exception of this modification, the
Formula has not been modified by the Board of Directors since March 23, 1984.
The following table sets forth information concerning the Formula Price
for the Class A Common Stock, the applicable price for the Class B Common Stock
and the Market Factor in effect for the periods beginning on the dates
indicated. There can be no assurance that the Class A Common Stock or the Class
B Common Stock will in the future provide returns comparable to historical
returns. See "Risk Factors--No Assurances Regarding Future Returns."
<TABLE>
<CAPTION>
Price Price
Per Share Per Share
Market of Class A of Class B
DATE Factor Common Stock Common Stock
- ---- ------ ------------ ------------
<S> <C> <C> <C>
April 9, 1994..................................... 1.50 $14.46 $72.30
July 9, 1994...................................... 1.45 $14.48 $72.40
October 15, 1994.................................. 1.45 $15.07 $75.35
January 14, 1995.................................. 1.50 $15.72 $78.60
April 14, 1995.................................... 1.50 $16.41 $82.05
July 14, 1995..................................... 1.60 $17.79 $88.95
October 13, 1995.................................. 1.60 $18.27 $91.35
January 12, 1996.................................. 1.70 $19.33 $96.65
April 12, 1996.................................... 1.80 $20.41 $102.05
</TABLE>
The Board of Directors believes that the valuation process and Formula
result in a fair market value for the Class A Common Stock within a broad range
of financial criteria. Other than the quarterly review and possible modification
of the Market Factor, the Board of Directors will not change the Formula unless
(i) in the good faith exercise of its fiduciary duties and after consultation
with the Company's independent accountants as to whether the change would result
in a charge to earnings upon the sale of Class A Common Stock or Class B Common
Stock, the Board of Directors, including a majority of the directors who are not
employees of the Company, determines that the Formula no longer results in a
fair market value for the Class A Common Stock or (ii) a change in the Formula
or the method of valuing the Class A Common Stock is required under applicable
law.
DIVIDEND POLICY
The Company has never declared or paid any cash dividends on its
capital stock and no cash dividends on the Class A Common Stock or Class B
Common Stock are contemplated in the foreseeable future. The Company's present
intention is to retain any future earnings for use in its business. See "Risk
Factors--No Cash Dividends."
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<PAGE> 19
SELECTED FINANCIAL DATA
The following table sets forth certain consolidated financial data for
the Company for the periods indicated and should be used in conjunction with the
Consolidated Financial Statements and Financial Statement Schedules, related
notes and other financial information appearing in the documents incorporated
herein by reference.
<TABLE>
<CAPTION>
Year ended January 31
===========================================================================
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(Amounts in thousands, except earnings per share)
<S> <C> <C> <C> <C> <C>
Revenues.............................. $2,155,657 $1,921,880 $1,670,882 $1,504,112 $1,285,294
Cost of revenues...................... 1,875,072 1,692,623 1,477,701 1,327,992 1,124,756
Selling, general and
administrative expenses............ 173,742 146,083 120,387 113,174 101,935
Interest expense...................... 4,529 3,468 2,966 2,841 2,964
Provision for income taxes............ 45,018 30,654 28,328 22,030 22,023
---------- ---------- ---------- ---------- ----------
Net income............................ 57,296 49,052 41,500 38,075 33,616
========== ========== ========== ========== ==========
Earnings per share1 .................. $ 1.13 $ 1.01 $ .89 $ .83 $ .75
Average number of shares
outstanding, including
common stock equivalents........... 51,306 49,264 47,429 46,179 44,825
</TABLE>
<TABLE>
<CAPTION>
JANUARY 31
=========================================================================
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Total assets.......................... $859,290 $752,584 $611,575 $523,613 $437,975
Working capital....................... 227,185 173,467 206,580 174,797 131,177
Long-term liabilities................. 33,151 28,955 25,060 25,851 27,036
Stockholders' equity.................. 459,097 387,564 335,502 280,047 234,874
</TABLE>
- ---------------------------
1 Fully diluted earnings per share are substantially the same as primary
earnings per share for the years presented. The Company has never
declared or paid cash dividends on its capital stock and no cash
dividends are presently contemplated.
16
<PAGE> 20
DESCRIPTION OF CAPITAL STOCK
GENERAL
The Company is authorized to issue 100,000,000 shares of Class A Common
Stock, par value $.01 per share, 5,000,000 shares of Class B Common Stock, par
value $.05 per share, and 3,000,000 shares of Preferred Stock, par value $.05
per share (the "Preferred Stock"). As of April 19, 1996, there were 47,627,245
shares of Class A Common Stock, 329,673 shares of Class B Common Stock and no
shares of Preferred Stock issued and outstanding. The Class A Common Stock and
Class B Common Stock are sometimes collectively or individually referred to as
the "Common Stock."
COMMON STOCK
General
Except as otherwise provided by law, the holders of shares of Class A
Common Stock and Class B Common Stock vote together as a single class in all
matters, with each holder of Class A Common Stock having one vote per share and
each holder of Class B Common Stock having five votes per share. The holders of
shares of Class A Common Stock and Class B Common Stock are entitled to cumulate
their votes for the election of directors. Cumulative voting entitles each
stockholder to cast the number of votes that equals the number of shares of
Class A Common Stock or five times the number of shares of Class B Common Stock
held by such stockholder multiplied by the number of directors to be elected.
Each stockholder may cast all of such votes for a single nominee or may
distribute them among any two or more nominees as such stockholder sees fit. The
Certificate of Incorporation provides for a classified Board of Directors
consisting of three classes of directors, as nearly as equal in number as
practicable. The number of authorized directors is currently fixed at 21
directors, evenly divided between Class I, Class II and Class III directors.
Each year the stockholders elect a different class of directors to serve a
three-year term. As a result of the classification of the Board of Directors,
the votes of a greater number of shares would be required to ensure the election
of a director than would be required without such classification.
Subject to the prior rights of the holders of any Preferred Stock then
outstanding, the holders of Class A Common Stock and Class B Common Stock are
entitled to receive dividends, out of funds legally available therefor, when and
as declared by the Board of Directors and to participate equally and ratably in
the net assets of the Company available for distribution in the event of
liquidation, dissolution or winding up, after payment of any amounts due to
creditors; provided, however, that any dividend or distribution with respect to
a share of Class B Common Stock must be five times the dividend or distribution,
as the case may be, with respect to a share of Class A Common Stock.
Holders of Class A Common Stock have no conversion rights and holders
of Class A Common Stock and Class B Common Stock have no preemptive or
subscription rights. Neither class of Common Stock may be subdivided,
consolidated, reclassified or otherwise changed unless the relative powers,
preferences, rights, qualifications, limitations and restrictions applicable to
the other class of Common Stock are maintained. In any merger, consolidation or
business combination to which the Company is a party (other than a merger,
consolidation or business combination in which the Company is the surviving
corporation and which does not result in any reclassification of or change in
the outstanding shares of Common Stock), the consideration to be received with
respect to each share of Class B Common Stock must be equal to five times the
consideration to be received with respect to each share of Class A Common Stock,
except that if capital stock is distributed in any such transaction, such shares
may differ as to the rights of the holders thereof only to the extent that such
rights differ pursuant to Article FOURTH of the Certificate of Incorporation.
All shares of Class A Common Stock and Class B
17
<PAGE> 21
Common Stock presently outstanding are, and the shares offered hereby upon full
payment therefor will be, fully paid and nonassessable.
Pursuant to the terms of the Certificate of Incorporation, the Company
is prohibited from issuing any additional shares of Class B Common Stock. Each
share of Class B Common Stock is convertible at any time, at the option of the
holder thereof, into five shares of Class A Common Stock, and all shares of
Class B Common Stock reacquired by the Company will be retired and will not be
available for reissuance.
Article FOURTEENTH of the Certificate of Incorporation generally
requires that mergers and certain other business combinations ("Business
Combinations") between the Company and any holder of 5% or more of the Company's
outstanding voting power (a "Related Person") must be approved by the holders of
securities having 80% of the Company's outstanding voting power, as well as by
the holders of a majority of such securities that are not owned by the Related
Person. Under Delaware law, unless the Certificate of Incorporation provides
otherwise, only a majority of the Company's outstanding voting power is required
to approve certain of these transactions, such as mergers and consolidations,
while certain other of these transactions would not require stockholder
approval.
The 80% and majority of independent voting power requirements of
Article FOURTEENTH (the "Supermajority Vote Requirements") will not apply,
however, to a Business Combination with a Related Person, if (i) the transaction
is approved by the Board of Directors prior to the time the Related Person
becomes a Related Person (i.e., prior to the time the Related Person acquired
beneficial ownership of 5% or more of the Company's outstanding voting power),
(ii) the transaction is approved by at least a majority of the members of the
Board of Directors who are unaffiliated with the Related Person and who were
directors before the Related Person became a Related Person or (iii) the
Business Combination involves only the Company and one or more of its
subsidiaries and certain other conditions are satisfied.
Article FOURTEENTH also provides that in the event a Business
Combination with a Related Person subject to the Supermajority Vote Requirements
is consummated, stockholders of the Company who voted against the Business
Combination, at their option, will have the right to receive a price which is
equal to (i) the price offered by the Related Person in the Business Combination
or (ii) the greater of (a) the highest price per share paid by the Related
Person in acquiring shares of capital stock of the Company or (b) a price which
bears the same percentage relationship to the market price of the Company's
capital stock immediately preceding the announcement of the Business Combination
as the highest price paid by the Related Person for any of the Company's capital
stock bears to the market price of the Company's capital stock immediately
before the Related Person initially acquired any shares of the Company's capital
stock.
Article FOURTEENTH was adopted by the stockholders of the Company at
the 1983 Annual Meeting of Stockholders and the full text of such Article
appeared as Exhibit B to the Company's Proxy Statement for that meeting.
Additional copies of Article FOURTEENTH may be obtained, upon request, by
writing the Company at 10260 Campus Point Drive, San Diego, CA 92121, Attention:
Corporate Secretary.
The amendment of certain provisions of the Certificate of Incorporation
and Bylaws require the approval of not less than two-thirds of the total voting
power of all outstanding shares of voting stock of the Company. Such provisions
relate to the number of directors, the election of directors and the vote of
stockholders required to modify the provisions of the Certificate of
Incorporation and Bylaws requiring such approvals.
The Company acts as its own transfer agent for the Class A Common Stock
and Class B Common Stock.
18
<PAGE> 22
As of April 19, 1996, there were 12,630 record holders of Class A
Common Stock and 130 record holders of Class B Common Stock.
Restrictions on Class A Common Stock
All the shares of Class A Common Stock presently outstanding are, and
all shares of Class A Common Stock offered hereby will be, subject to certain
restrictions (including restrictions on their transferability) set forth in
Article FOURTH of the Certificate of Incorporation, which restrictions provide
substantially as follows:
RIGHT OF REPURCHASE UPON TERMINATION OF EMPLOYMENT OR AFFILIATION. All
shares of Class A Common Stock owned by a person who is an employee or director
of, or a consultant to, the Company (except for shares of Class A Common Stock
that are held by a stockholder who received such shares (i) in connection with
the reorganization of the Company in 1984 in exchange for shares of the Company
which immediately prior thereto were not subject to a right of repurchase upon
termination of employment or affiliation on the part of the Company, (ii) upon
exercise of a non-qualified stock option granted prior to October 1, 1981 under
the Company's 1979 Stock Option Plan which were not converted into ISOs, (iii)
in exchange for shares of Class B Common Stock that were not subject to a right
of repurchase upon termination of employment or affiliation on the part of the
Company or (iv) pursuant to a stock dividend or a stock split on the outstanding
shares of Class A Common Stock which have been theretofore issued under any of
the circumstances described in clauses (i), (ii), (iii) or this clause (iv))
will be subject to the Company's right of repurchase upon the termination of
such holder's employment or affiliation with the Company. Such right of
repurchase will also be applicable to all shares of Class A Common Stock which
such person has the right to acquire after his or her termination of employment
or affiliation pursuant to any of the Company's employee benefit plans (other
than the Employee Stock Ownership Plan or any other retirement or pension plan
adopted by the Company or any of its subsidiaries which by its terms does not
provide for the Company's right to repurchase shares issued thereunder upon
termination of employment or affiliation) or pursuant to any option or other
contractual right to acquire shares of Class A Common Stock which was
outstanding at the date of such termination of employment or affiliation.
The Company's right of repurchase is exercised by mailing a written
notice to such holder within 60 days following termination of employment or
affiliation. If the Company repurchases the shares, the price will be the
Formula Price per share (i) on the date of such termination of employment or
affiliation, in the case of shares owned by the holder at that date and shares
issuable to the holder after that date pursuant to any option or other
contractual right to acquire shares of Class A Common Stock which were
outstanding at that date or (ii) on the date such shares are distributed to the
holder, in the case of shares distributable to the holder after his or her
termination of employment or affiliation pursuant to any of the Company's
employee benefit plans. The Company will, in the event it exercises its right of
repurchase upon termination of employment or affiliation, pay for such shares in
cash within 90 days after the date referred to in (i) or (ii) above, as the case
may be.
RIGHT OF FIRST REFUSAL. In the event that a holder of Class A Common
Stock desires to sell any of his or her shares to a third party other than in
the Limited Market, such person must first give notice to the Corporate
Secretary of the Company consisting of: (i) a signed statement setting forth
such holder's desire to sell his or her shares of Class A Common Stock and that
he or she has received a bona fide offer to purchase such shares; (ii) a
statement signed by the intended purchaser containing (a) the intended
purchaser's full name, address and taxpayer identification number, (b) the
number of shares to be purchased, (c) the price per share to be paid, (d) the
other terms under which the purchase is intended to be made and (e) a
representation that the offer, under the terms specified, is bona fide and (iii)
if the purchase price is payable in cash, in whole or in part, a copy of a
certified check, cashier's check or money order payable to such holder from the
purchaser in the amount of the purchase price to be paid in cash.
19
<PAGE> 23
Upon receiving such notice, the Company will have the right,
exercisable within 14 days, to purchase all of the shares specified in the
notice at the offer price and upon the same terms as set forth in the notice. In
the event the Company does not exercise such right, the holder may sell the
shares specified in the notice within 30 days thereafter to the person specified
in the notice at the price and upon the terms and conditions set forth therein.
The holder may not sell such shares to any other person or at any different
price or on any different terms without first re-offering the shares to the
Company.
TRANSFERS OTHER THAN BY SALE. Except for sales in the Limited Market
and as described above, no holder of Class A Common Stock may sell, assign,
pledge, transfer or otherwise dispose of or encumber any shares of Class A
Common Stock without the prior written approval of the Company. Any attempt to
do so without such prior approval will be null and void. The Company may
condition its approval of a transfer of any shares of Class A Common Stock,
other than by sale by an employee, director or a consultant of the Company or by
a person who acquired such shares other than by purchase, directly or
indirectly, from an employee, director or consultant of the Company, upon the
transferee's agreement to hold such shares subject to the Company's right to
repurchase such shares upon the termination of employment or affiliation of the
employee, director or consultant.
LAPSE OR WAIVER OF RESTRICTIONS. All restrictions upon the shares of
Class A Common Stock will automatically terminate (i) if the Company makes an
underwritten offering of either class of its Common Stock, or securities
convertible into any class of its Common Stock, to the general public or (ii) if
the Company applies to have any class of its Common Stock, or securities
convertible into any class of its Common Stock, listed on a national securities
exchange. In addition, the Board of Directors may waive any or all of the
restrictions on shares of Class A Common Stock in such other circumstances as
the Board deems appropriate. See "Risk Factors--Restrictions on Class A Common
Stock."
Restrictions on Class B Common Stock
Substantially all of the presently outstanding shares of Class B Common
Stock are subject to a right of first refusal on the part of the Company in the
event a stockholder desires to sell his or her shares of Class B Common Stock
other than in the Limited Market. Such right is exercisable by the Company at
the third-party offer price. In addition, all of the presently outstanding
shares of Class B Common Stock that were issued subsequent to October 1, 1981
(other than shares issued subsequent to that date which were distributed out of,
or are presently held in, the Profit Sharing Retirement Plan, Employee Stock
Ownership Plan and CODA or that were issued upon the exercise of stock options
granted prior to that date) are subject to a right of repurchase on the part of
the Company upon termination of the stockholder's employment or affiliation with
the Company. This right is generally exercisable by the Company at a price equal
to five times the Formula Price for Class A Common Stock prevailing at the time
of such termination. By their terms, all such restrictions will terminate in the
event that either class of the Common Stock is listed on any national securities
exchange or is traded on a regular basis, as determined by the Company, in the
over-the-counter market.
PREFERRED STOCK
Pursuant to the Certificate of Incorporation, the Board of Directors
may, from time to time, authorize the issuance of one or more series of
Preferred Stock and fix by resolution or resolutions adopted at the time of
issuance the designations, preferences and relative rights, qualifications and
limitations of each series. Each series of Preferred Stock could, as determined
by the Board of Directors at the time of issuance, rank senior to the Class A
Common Stock and Class B Common Stock with respect to dividend, redemption and
liquidation rights.
The Certificate of Incorporation authorizes the Board of Directors to
determine, among other things, with respect to each series of Preferred Stock
which may be issued: (i) the dividend rates, conditions and preferences, if any,
in respect of the Class A Common Stock and Class B Common Stock and among the
20
<PAGE> 24
series of Preferred Stock, (ii) whether dividends would be cumulative and, if
so, the date from which dividends on the series would accumulate, (iii) whether,
and to what extent, the holders of the series would have voting rights in
addition to those prescribed by law, (iv) whether, and upon what terms, the
series would be convertible into or exchangeable for other securities, (v)
whether, and upon what terms, the series would be redeemable, (vi) the
preference, if any, to which the series would be entitled in the event of
voluntary or involuntary liquidation, dissolution or winding up of the Company
and (vii) whether or not a sinking fund would be provided for the redemption of
the series and, if so, the terms and conditions thereof. With regard to
dividend, redemption and liquidation rights, the Board of Directors may
determine that any particular series of Preferred Stock may rank junior to, on a
parity with or senior to any other series of Preferred Stock.
Holders of shares of Preferred Stock will have no preferential or
preemptive right to purchase any shares of the Company's capital stock. The
Company has no present intention or plan to issue any shares of Preferred Stock.
ANTI-TAKEOVER EFFECTS
The combined effect of the classification of the Board of Directors
into three different classes, the cumulative voting rights of the stockholders,
the Supermajority Vote Requirements, the provisions of the Certificate of
Incorporation and Bylaws of the Company requiring the approval of at least
two-thirds of the voting power of all outstanding shares of Common Stock for
certain amendments to the Certificate of Incorporation or Bylaws, the Company's
right of first refusal, and the Company's right of repurchase upon termination
of employment or affiliation, may discourage, delay or prevent attempts to
acquire control of the Company that are not approved by the Company's Board
of Directors. The provisions 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 in the
Limited Market, as well as making it more difficult for individual stockholders
or a group of stockholders to elect directors. However, the Board of Directors
believes that these provisions are in the best interests of the Company and its
stockholders, because such provisions may encourage potential acquirors to
negotiate directly with the Board of Directors which is in the best position to
act on behalf of all stockholders. See "Risk Factors--Anti-Takeover Effects."
LEGAL OPINION
The legality of the Class A Common Stock offered hereby has been passed
upon for the Company by Douglas E. Scott, Esquire, Corporate Vice President and
General Counsel of the Company. As of April 19, 1996, Mr. Scott owned of record
13,502 shares of Class A Common Stock, had the right to acquire an additional
18,800 shares pursuant to previously granted stock options and beneficially
owned a total of 4,042 shares through the Company's retirement plans.
EXPERTS
The consolidated financial statements incorporated in this Prospectus
by reference to the Company's Annual Report on Form 10-K for the fiscal year
ended January 31, 1996, have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
21
<PAGE> 25
================================================================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION IN SUCH JURISDICTION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information ................................................... 2
Information Incorporated by Reference ................................... 2
Risk Factors ............................................................ 3
The Company ............................................................. 5
Government Contracts .................................................... 9
The Offering ............................................................ 11
Resales by Affiliates of Acquired
Companies ............................................................ 12
Market Information ...................................................... 12
Dividend Policy ......................................................... 15
Selected Financial Data ................................................. 16
Description of Capital Stock ............................................ 17
Legal Opinion ........................................................... 21
Experts ................................................................. 21
</TABLE>
================================================================================
================================================================================
3,000,000 SHARES
CLASS A COMMON STOCK
[LOGO]
--------------------
P R O S P E C T U S
--------------------
May __, 1996
22
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware grants each
corporation organized thereunder, such as the Registrant, the power to indemnify
its directors and officers against certain circumstances. Article FIFTEENTH of
the Registrant's Restated Certificate of Incorporation requires the Registrant
to indemnify its directors and officers to the fullest extent permitted by law.
The Company also has directors and officers liability insurance, with
policy limits of $25 million, under which directors and officers of the Company
are insured against certain liabilities which they may incur in such capacities.
ITEM 21. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibits Incorporated by Reference To
------- ----------------------- ----------------------------
<S> <C> <C>
4(a) Article FOURTH of the Registrant's Exhibit 3 to the Registrant's Post-Effective
Certificate of Incorporation. Amendment No. 1 to Form S-2 as filed on
August 21, 1987 with the SEC.
4(b) Form of Non-Qualified Stock Option Exhibit 4(c) to the Registrant's Annual
Agreement of the Registrant's 1992 Report on Form 10-K for the fiscal year
Stock Option Plan (form dated ended January 31, 1993 (the "1993 10-K").
August 1992).
4(c) Form of Non-Qualified Stock Option Exhibit 4(p) to the Registrant's Annual
Agreement of the Registrant (Employee, Report on Form 10-K for the fiscal year
Director and Consultant of the ended January 31, 1991 (the "1991 10-K").
Registrant's 1982 Stock Option Plan
(form dated October 1990)).
4(d) Form of Stock Restriction Agreement of Exhibit 4(e) to the Registrant's Annual
the Registrant's Employee Stock Report on Form 10-K for the fiscal year
Ownership Plan (form dated March 1, ended January 31, 1985 (the "1985 10-K").
1985).
4(e) Form of Stock Restriction Agreement of Exhibit 4(f) to the 1991 10-K.
the Registrant's Bonus Compensation
Plan (form dated October 1990).
4(f) Form of Stock Restriction Agreement of Exhibit 4(g) to the 1985 10-K.
the Registrant's Cash or Deferred
Arrangement (TRASOP Account) (form
dated March 1, 1985).
4(g) Registrant's Bonus Compensation Plan, Exhibit 4(l) to the 1991 10-K.
as amended through April 2, 1991.
</TABLE>
II-1
<PAGE> 27
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibits Incorporated by Reference To
------- ----------------------- ----------------------------
<S> <C> <C>
4(h) Registrant's 1982 Stock Option Plan, as Exhibit 4(n) to the Registrant's Annual
amended through June 9, 1989. Report on Form 10-K for the fiscal year
ended January 31, 1990 (the "1990 10-K").
4(i) Form of Stock Restriction Agreement of Exhibit 4(r) to 1991 10-K.
the Registrant's Employee Stock
Ownership Plan (TRASOP Account)
(form dated April 1, 1991).
4(j) Registrant's 1992 Stock Option Plan, Exhibit 4(g) to the Registrant's Annual
amended through November 3, 1994. Report on Form 10-K for the fiscal year
ended January 31, 1995 (the "1995 10-K").
4(k) Form of Stock Restriction Agreement of Exhibit 4(v) to the 1993 10-K.
the Registrant's Bonus Compensation
Plan (form dated July 1992).
4(l) Registrant's Stock Compensation Plan, Exhibit 4(k) to Registrant's Annual Report on
as amended through April 3, 1996. Form 10-K for the fiscal year ended
January 31, 1996 (the "1996 10-K").
4(m) Registrant's Management Stock Exhibit 4(l) to the 1996 10-K.
Compensation Plan, as amended through
April 3, 1995.
4(n) Form of Non-Qualified Stock Option Exhibit 4(n) to the 1995 10-K.
Agreement of the Registrant's 1992
Stock Option Plan (form dated February
1995).
4(o) Form of Non-Qualified Stock Option Exhibit 4(o) to the 1995 10-K.
Agreement of the Registrant's 1992
Stock Option Plan (form dated February
1995).
4(p) Form of Stock Restriction Agreement of Exhibit 4(p) to the 1995 10-K.
the Registrant's Bonus Compensation
Plan (form dated March 1995).
4(q) 1995 Employee Stock Purchase Plan. Annex II of the Registrant's Proxy Statement
for the 1995 Annual Meeting of Stockholders
as filed June 1995 with the SEC (the "1995
Proxy").
4(r) 1995 Stock Option Plan. Annex I to the 1995 Proxy.
4(s) Keystaff Deferral Plan, as amended Exhibit 4(r) to the 1996 10-K.
through November 1, 1995.
</TABLE>
II-2
<PAGE> 28
<TABLE>
<CAPTION>
Exhibit
No. Description of Exhibits Incorporated by Reference To
------- ----------------------- ----------------------------
<S> <C> <C>
4(t) Key Executive Stock Deferral Plan. Exhibit 4(s) to the 1996 10-K.
4(u) Form of Non-Qualified Stock Option Exhibit 4(t) to the 1996 10-K.
Agreement of the Registrant's 1995
Stock Option Plan (form dated August
1995).
4(v) Form of Incentive Stock Option Exhibit 4(u) to the 1996 10-K.
Agreement of the Registrant's 1995
Stock Option Plan (form dated August
1995).
4(w) Form of Restriction Agreement of the Exhibit 4(v) to the 1996 10-K.
Registrant's Key Executive Stock
Deferral Plan (form dated March 1996).
5 Opinion of Douglas E. Scott, Esq. **
21 Subsidiaries of the Registrant. **
23(a) Consent of Douglas E. Scott, Esq. **
(contained in Exhibit 5 to this
Registration Statement).
23(b) Consent of Price Waterhouse LLP. **
</TABLE>
- -----------
** Filed herewith.
II-3
<PAGE> 29
ITEM 22. UNDERTAKINGS
(a) Rule 415 Offering
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to the Registration
Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement; excluding information contained in
periodic reports filed with or furnished to the Commission by
the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the Offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by
Reference
The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Registration on Form S-4 of Securities Offered for Resale
(1) The Registrant hereby undertakes that prior to any public
reoffering of the securities registered hereunder through use of a prospectus
which is a part of this Registration Statement, by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c), such reoffering
prospectus will contain the information called for by the applicable
registration form with
II-4
<PAGE> 30
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other Items of the applicable form.
(2) The Registrant undertakes that every prospectus (i) that
is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports
to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and
is used in connection with an offering of securities subject to Rule 415, will
be filed as part of an amendment to the Registration Statement and will not be
used until such amendment is effective, and that, for purposes of determining
any liability under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(d) Securities and Exchange Commission Policy Regarding
Indemnification
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions of Section 145 of the General
Corporation Law of Delaware and Article FIFTEENTH of the Registrant's
Certificate of Incorporation, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of the expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(e) Requests for Information
The Registrant hereby undertakes to respond to requests for information
that is incorporated by reference into the Prospectus pursuant to Items 4,
10(b), 11, or 13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the Registration Statement through the date
of responding to the request.
(f) Post-Effective Amendments
The Registrant hereby undertakes to supply by means of post-effective
amendment all information concerning a transaction, and the company being
acquired involved therein, that was not the subject of and included in the
Registration Statement when it became effective.
II-5
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-4 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of San Diego, State of California on May 6, 1996.
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
/s/ J.R. Beyster
----------------------------------
J.R. Beyster
Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints J.D. Heipt and D.E. Scott, or any
one of them jointly and severally, such persons' attorneys-in-fact, each with
the power of substitution, for such person in any and all capacities, to execute
any and all amendments (including post-effective amendments) to this
Registration Statement on Form S-4 and to file the same, with all exhibits
thereto, and any other documents in connection therewith, with the Securities
and Exchange Commission under the Securities Act of 1933, and hereby ratifies
and confirms all that each of said attorneys-in-fact, or each of their
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE Title Date
--------- ----- ----
<S> <C> <C>
/s/ J.R. Beyster Chairman of the Board and
- ----------------------- Chief Executive Officer May 6, 1996
J.R. Beyster
/s/ W.A. Roper, Jr.
- -----------------------
W.A. Roper, Jr. Principal Financial Officer May 6, 1996
/s/ P.N. Pavlics
- -----------------------
P.N. Pavlics Principal Accounting Officer May 6, 1996
/s/ V.N. Cook
- -----------------------
V.N. Cook Director May 6, 1996
/s/ C.K. Davis
- -----------------------
C.K. Davis Director May 6, 1996
</TABLE>
II-6
<PAGE> 32
<TABLE>
<S> <C> <C>
/s/ W.H. Demisch
- -----------------------
W.H. Demisch Director May 6, 1996
/s/ W.A. Downing
- -----------------------
W.A. Downing Director May 6, 1996
/s/ E.A. Frieman
- -----------------------
E.A. Frieman Director May 6, 1996
/s/ J.E. Glancy
- -----------------------
J.E. Glancy Director May 6, 1996
/s/ D.A. Hicks
- -----------------------
D.A. Hicks Director May 6, 1996
/s/ B.R. Inman
- -----------------------
B.R. Inman Director May 6, 1996
/s/ L.A. Kull
- -----------------------
L.A. Kull Director May 6, 1996
/s/ W.M. Layson
- -----------------------
W.M. Layson Director May 6, 1996
/s/ C.B. Malone
- -----------------------
C.B. Malone Director May 6, 1996
/s/ J.W. McRary
- -----------------------
J.W. McRary Director May 6, 1996
/s/ W.A. Owens
- -----------------------
W.A. Owens Director May 6, 1996
/s/ E.A. Straker
- -----------------------
E.A. Straker Director May 6, 1996
/s/ M.E. Trout
- -----------------------
M.E. Trout Director May 6, 1996
/s/ J.P. Walkush
- -----------------------
J.P. Walkush Director May 6, 1996
/s/ J.H. Warner, Jr.
- -----------------------
J.H. Warner, Jr. Director May 6, 1996
/s/ J.A. Welch
- -----------------------
J.A. Welch Director May 6, 1996
</TABLE>
II-7
<PAGE> 33
<TABLE>
<S> <C> <C>
/s/ J.B. Wiesler
- -----------------------
J.B. Wiesler Director May 6, 1996
/s/ A.T. Young
- -----------------------
A.T. Young Director May 6, 1996
</TABLE>
II-8
<PAGE> 1
EXHIBIT 5
May 6, 1996
Science Applications
International Corporation
10260 Campus Point Drive
San Diego, CA 92121
Gentlemen:
I am the Corporate Vice President and General Counsel of Science
Applications International Corporation (the "Company"). As such, I have acted as
your counsel in connection with the Prospectus of the Company covering the offer
and sale by the Company of up to 3,000,000 shares (the "Company Shares") of its
Class A Common Stock, par value $0.01 per share (the "Class A Common Stock"),
which may be offered and sold directly by the Company in connection with one or
more acquisition transactions. The Company Shares are being offered pursuant to
a Prospectus which constitutes a part of the Registration Statement on Form S-4
(the "Registration Statement") to be filed with the Securities and Exchange
Commission (the "Commission") on May 6, 1996 under the Securities Act of 1933,
as amended (the "Securities Act").
I am generally familiar with the affairs of the Company. In addition, I
have examined and am familiar with originals or copies, certified or otherwise
identified to my satisfaction, of (i) the Registration Statement, (ii) the
Restated Certificate of Incorporation and Bylaws of the Company as currently in
effect, (iii) resolutions adopted by the Board of Directors and the Operating
Committee thereof relating to the filing of the Registration Statement and the
issuance of the Company Shares thereunder and (iv) such other documents as I
have deemed necessary or appropriate as a basis for the opinions set forth
below. In my examination, I have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to me as originals, the conformity to original documents of all documents
submitted to me as certified or photostatic copies, and the authenticity of the
originals of such copies.
Based upon and subject to the foregoing, I am of the opinion that the
Company Shares that are being offered and sold directly by the Company have been
duly authorized for issuance and when certificates therefor have been duly
executed, delivered and paid for, will be legally issued, fully paid and
nonassessable.
I hereby consent to the use of my name in the Registration Statement
under the caption "Legal Opinion" and to the filing of this opinion as an
exhibit to the Registration Statement. In giving such consent, I do not thereby
admit that I come within the category of persons whose consent is required under
Section 7 of the Securities Act or the rules and regulations of the Commission
thereunder.
Very truly yours,
/s/ Douglas E. Scott
--------------------------
Douglas E. Scott
Corporate Vice President
and General Counsel
<PAGE> 1
Exhibit 21
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
WHOLLY-OWNED SUBSIDIARIES
<TABLE>
<CAPTION>
State of Incorporation
----------------------
<S> <C>
American Systems Engineering Corporation Delaware
Andrew Palmer & Associates Limited England
(wholly-owned by SAIC UK Limited)
Bull, Inc. California
Campus Point Realty Corporation California
Energy and Technology Management Corporation Delaware
Environmental Restoration Systems, Inc. Delaware
General Sciences Corporation Delaware
Hicks & Associates, Inc. Delaware
JHK & Associates, Inc. Delaware
JMD Development Corporation dba JDA California
Network Solutions, Inc. District of Columbia
Pathology Associates International Corporation Delaware
R.E. Wright Environmental, Inc. Delaware
Sachse Engineering Associates, Inc. California
SAIC Colombia, Limitada Colombia
SAIC Commercial Enterprises, Inc. California
SAIC de Mexico, S.A. de C.V. Mexico
SAIC Engineering, Inc. California
SAIC Engineering of Ohio, Inc. Ohio
SAIC Global Technology Corporation Delaware
SAIC in Novosibirsk Russia
SAIC-MIR Russia
SAIC Limited (wholly-owned by SAIC UK Limited) England
SAIC UK Limited England
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
State of Incorporation
----------------------
<S> <C>
Science Applications International (Barbados) Corporation Barbados
Science Applications International Corporation (SAIC Canada) Canada
Science Applications International Corporation Venezuela
de Venezuela, S.A.
Science Applications International, Europe S.A. France
Science Applications International Pty. Ltd. Australia
Science Applications International Technology California
Syntonic Technology, Inc. Delaware
Systems Control Technology, Inc. Delaware
TST International Pty., Ltd. Australia
Wright Laboratory Services, Inc. Delaware
(wholly-owned by R.E. Wright Environmental, Inc.)
</TABLE>
<PAGE> 1
EXHIBIT 23(B)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of our report dated
April 4, 1996 appearing on page F-2 of Science Applications International
Corporation's Annual Report on Form 10-K for the year ended January 31, 1996. We
also consent to the incorporation by reference in such Prospectus of our report
dated April 4, 1996 appearing on page F-2 of the Annual Report of the Science
Applications International Corporation Employee Stock Purchase Plan for the year
ended January 31, 1996 appearing in the Science Applications International
Corporation Annual Report on Form 10-K. In addition, we hereby consent to the
incorporation by reference in such Prospectus of our report dated April 4, 1996
appearing on page F-2 of the Annual Report of the Science Applications
International Corporation Cash or Deferred Arrangement for the year ended
December 31, 1995 appearing in the Science Applications International
Corporation Annual Report on Form 10-K. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
San Diego, California
May 6, 1996
