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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 4, 1998
POST-EFFECTIVE AMENDMENT NO. 3 TO REGISTRATION STATEMENT NO. 33-51523
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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POST-EFFECTIVE AMENDMENT NO. 3
TO
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>
<CAPTION>
DELAWARE 8731 95-3630868
<S> <C> <C>
(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)
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COPY TO:
DOUGLAS E. SCOTT, ESQ.
Senior 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)
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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. / /
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.
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<PAGE>
PROSPECTUS
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, limited liability company 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. The Company may be required to provide information (or further
information) by means of a post-effective amendment to the Registration
Statement or supplement to this Prospectus once the required information
concerning an Acquisition and the company to be acquired pursuant thereto are
known to the Company.
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
Restated Certificate of Incorporation (the "Certificate of Incorporation")
and may be subject to certain contingencies. See "Description of Class A
Common Stock --Common Stock -- Restrictions on Class A Common Stock." SEE
"RISK FACTORS" ON PAGES 3 TO 7 FOR A DESCRIPTION OF THIS AND CERTAIN OTHER
RISKS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
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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 statements which constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements appear in a number of places in this Prospectus and
include statements regarding the intent, belief or current expectations of
the Company or its officers with respect to, among other things, trends
affecting the Company's financial condition or results of operations and the
impact of competition.
Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties and that actual results may differ materially from those in the
forward-looking statements as a result of various factors. The accompanying
information contained in this Prospectus, including, without limitation, the
information under "Risk Factors" identifies important factors that could
cause such differences.
THE DATE OF THIS PROSPECTUS IS ____________, 1998
<PAGE>
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. The Commission maintains a web site at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference: (1) the
Company's Annual Report on Form 10-K for the fiscal year ended January 31,
1998 (the "1998 10-K"); (2) the Company's Current Report on Form 8-K dated
July 11, 1997; (3) the Company's Current Report on Form 8-K dated September 19,
1997; (4) the Company's Current Report on Form 8-K dated February 8,
1998; and (5) the Company's Current Report on Form 8-K dated April 15, 1998.
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.
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<PAGE>
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
Revenues generated from the sale of the Company's Technical Services and
Products (as such terms are defined on page 7) to the U.S. Government as a
prime contractor or subcontractor accounted for 66%, 79%, and 83% of revenues
in fiscal years 1998, 1997, and 1996, 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. In addition, revenues from the U.S. Government continues
to shift toward lower cost service type contracts. The loss of a substantial
amount of government business could have a material adverse effect on the
Company's results of operations and financial condition. In addition, the
Company's wholly-owned subsidiary, Bell Communications Research, Inc.
("Bellcore"), has historically derived substantially all of its revenues from
the Regional Bell Operating Companies (the "RBOCs"). Although the Company has
made progress in its efforts to diversify its business, it remains heavily
dependent upon business with the U.S. Government and with the RBOCs, 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 or the RBOCs. See "The Company."
POTENTIAL IMPACT OF ACQUISITION OF BELLCORE
On November 14, 1997, pursuant to a definitive agreement, the Company
completed its acquisition of Bellcore, a global provider of software,
engineering and consulting services, advanced research and development,
technical training and other services to the telecommunications industry. As
of January 31, 1998, Bellcore had approximately 5,400 employees and annual
revenues of approximately $1 billion. The acquisition resulted in a
substantial growth in both the employee base and commercial revenues of the
Company. The Company financed a portion of the purchase price of Bellcore
with debt financing. Such growth and additional debt may place a significant
strain on the Company's management, operational and financial resources.
There can be no assurance that the Company will be able to effectively manage
the expansion of its operations or that the Company's systems, procedures or
controls will be adequate to support the integration of the acquired
business. Any inability to effectively integrate the acquired business or
manage the growth could have a material adverse effect on the Company's
results of operations and financial condition.
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 Technical Services and Products. Although the Company intends
to make additional acquisitions in the future, the number and size of the
acquisitions that the Company can complete may be limited due to the
Company's acquisition of Bellcore. In addition, 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 businesses without adversely affecting the Company's results of
operations and financial condition.
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YEAR 2000 COMPLIANCE
The Company has commenced, and in some cases finalized, the evaluation
of computer systems to ensure its operations will not be adversely impacted
by Year 2000 software problems. The evaluation determined that certain
portions of the Company's software and systems require modification or
replacement. If the necessary modifications to existing software and
conversions to new software are not made, or are not completed timely, the
Year 2000 issue could have a material adverse impact on the Company's
consolidated financial position, results of operations, cash flow or its
ability to conduct business. In addition, the Company has initiated
communications with its critical service providers, suppliers and vendors to
determine the extent to which the Company is vulnerable to those third
parties' failure to remediate their own Year 2000 issues. There can be no
assurance that such failure would not have a material adverse effect on the
Company's consolidated financial position, results of operations, cash flows
or its ability to conduct business. Furthermore, the Company has implemented
an ongoing program to assess its exposure with respect to its products and
services. To date, no matters have come to the attention of the Company's
management that would have a material adverse effect on the Company's
consolidated financial position, results of operations, cash flows or its
ability to conduct business; however, there can be no assurance that the
Company will not be subject to material liability claims in the future.
The Company's assessment of the Year 2000 issue, including the costs of
the project and the timing of completion are based on management's best
estimates and input from third party customers, service providers, suppliers
and vendors. These estimates were derived using numerous assumptions about
future events, including the continued availability of certain resources,
third party modification plans and other factors. However, there can be no
assurance that these estimates will be achieved and actual results could
differ materially from those anticipated. See 1998 10-K, Item 7,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
ABSENCE OF A PUBLIC MARKET
There is no public market for the Common Stock. The Limited Market (as
such term is defined on page 9) permits existing stockholders to offer for
sale shares of Class A Common Stock on predetermined days (each a "Trade
Date"). Generally, there are four Trade Dates each year. The Company and the
trustees and agents 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, 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,
agents, or the Company are not sufficient, the ability of stockholders to
resell their shares in the Limited Market will likely be adversely affected.
In each trade occurring during the last two fiscal years, all shares of Class
A Common Stock offered for sale in the Limited Market were matched with buy
orders and sold in the Limited Market. No assurance, however, can be given
that a stockholder desiring to sell all or a portion of his or her shares of
Class A Common Stock in any trade will be able to do so. See 1998 10-K, Item
5, "Market for Registrant's Common Equity and Related Stockholder Matters--
The Limited Market."
CLASS A COMMON STOCK PRICE DETERMINED BY BOARD OF DIRECTORS
The offering price and the price at which the Class A Common Stock
trades in the Limited Market are not, and subsequent prices (the "Formula
Price") will not be, determined by the operation of a market of bargaining
buyers and sellers. Instead, the Formula Price is a value established by the
Board of Directors pursuant to a formula adopted by the Board of Directors
(the "Formula") and valuation process which the Board of Directors believes
represents a fair market value. The Board of Directors generally has broad
discretion to modify the Formula. The Formula was last modified in April
1998. The Formula does not specifically include variables reflecting all
relevant financial and valuation criteria. The mechanical application of the
Formula, assuming a constant market factor that is set by the Board of
Directors, tends to smooth the impact on the stock
4
<PAGE>
price of quarterly fluctuations in the Company's operating results because
the Formula takes into account the net income of the Company for the four
preceding quarters. See 1998 10-K, Item 5, "Market for Registrant's Common
Equity and Related Stockholder Matters--Price Range of Class A Common Stock
and Class B Common Stock."
POSSIBLE VOLATILITY OF STOCK PRICE
The Formula Price of the Class A Common Stock could be subject to
greater fluctuations in the future than it has experienced in the past. The
increased volatility is expected to result from a number of factors,
including (i) plans to continue to increase the proportion of the Company's
business involving private sector customer, international customers and
information technology and the greater stock price volatility associated with
companies in such business areas, (ii) the financial leverage impact of
current and any future debt levels of the Company as debt financing is used
to finance acquisitions and for other purposes, (iii) other equity
transactions that the Company may pursue, including public offerings of
securities of the Company's subsidiaries or affiliates, and (iv) the
volatility of the stock price of the Class A Common Stock of Network
Solutions, Inc. ("NSI"), a publicly-traded security of a majority-owned
subsidiary of the Company, and its impact on the Formula Price. As of March
13, 1998, the Company owned 100% of the outstanding Class B Common Stock of
NSI, representing approximately 76% of the combined outstanding common stock
of NSI. The NSI Class B Common Stock is convertible into NSI Class A Common
Stock, subject to certain limitations.
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 or that the Formula
Price will not decline. See 1998 10-K, Item 5, "Market for Registrant's
Common Equity and Related Stockholder Matters--Price Range of Class A Common
Stock and Class B Common Stock."
COMPETITION
The businesses 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, 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 1998 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 Company's results of operations and financial condition.
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.
POTENTIAL GOVERNMENT INQUIRIES AND INVESTIGATIONS
The Company is from time to time subject to certain U.S. Government
inquiries and investigations of its business practices. No assurance can be
given that any such inquiry or investigation would not have a material
adverse effect on the Company's results of operations and financial condition.
5
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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, 1997. 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.
FIXED PRICE CONTRACT EXPOSURE
During the fiscal years ended January 31, 1998, 1997 and 1996,
approximately 32%, 20% and 16%, respectively, of 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.
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, 1998 were $14,583,000 and $664,000, respectively. The
Company expects to recover substantially all such costs; however, no
assurance can be given that the contracts or contract amendments will be
received or that the related costs will be recovered.
RISKS ASSOCIATED WITH INTERNATIONAL SALES AND CURRENCY EXCHANGES
The Company conducts a portion of its business outside of the U.S. in
transactions denominated in foreign currencies. As a result, the Company is
exposed to fluctuations in exchange rates which could result in losses, and
in turn, could adversely impact the Company's results of operations. Under
the Company's current foreign currency management policy, the Company may use
forward foreign currency exchange rate contracts to hedge against movements
in exchange rates for contracts executed in foreign currencies. However, the
Company generally does not hedge its exchange rate risks for its foreign
subsidiaries, which generally conduct business in currencies other than the
U.S. Dollar. Significant fluctuations in exchange rates in such countries
could have a material adverse effect on the Company's results of operations.
This risk may be significant for entities such as INTESA (a Venezuelan joint
venture in which the Company has a 60% ownership interest) that operate in
highly inflationary economies. To date, losses resulting from exchange rate
fluctuations have not had a material adverse impact on the Company's results
of operations; however, there can be no assurance that the Company's future
results of operations will not be materially impacted by exchange rate
fluctuations.
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.
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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.
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 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.
ATTRACTION AND RETENTION OF SKILLED EMPLOYEES
The highly technical and complex services and products provided by the
Company are dependent upon the availability of professional, administrative
and technical personnel having high levels of training and skills. Because of
the Company's growth and competitive business environment, it has become more
difficult to meet all of the Company's needs for such employees in a timely
manner. Competition for such personnel is intense and competitors often
employ aggressive tactics to recruit key employees. The Company intends to
continue to devote significant resources to recruit and retain qualified
employees; however, no assurance can be given that the Company will be able
to attract and retain such employees on acceptable terms. Any failure to do
so could have a material adverse effect on the Company's operations.
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 Class A Common Stock--Anti-Takeover Effects."
THE COMPANY
The Company provides diversified professional and technical services
("Technical Services") and designs, develops and manufactures high-technology
products ("Products"). The Company's Technical Services and Products have
been primarily sold to departments and agencies of the U.S. Government,
including the Department of Defense, Department of Energy, Department of
Transportation, Department of Veterans Affairs, Environmental Protection
Agency and National Aeronautics and Space Administration. The balance of the
Company's revenues were attributable to the sales of Technical Services and
Products to foreign, state and local governments, commercial customers and
others. With the completion of the acquisition of Bellcore, the Company's
revenues attributable to sales of Technical Services and Products to
commercial customers are expected to increase substantially as a percentage
of revenues. See "Risk Factors--Concentration of Revenue."
The percentage of revenues attributable to Technical Services has
increased since fiscal year 1996 while Products revenues have correspondingly
decreased. The Company provides Technical Services primarily in the areas of
"National Security," "Health," "Environment," "Energy," "Telecommunications,"
"Commercial
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Information Technology" and "Other Technical Services," the last of which
includes the Company's transportation and space business areas. The
percentage of Technical Services revenues attributable to National
Security-related work has gradually declined since fiscal year 1996.
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 Technical Services. Acquisitions of businesses in fiscal years
1998 and 1997 were primarily financed with cash and in fiscal year 1996 were
made primarily with issuance of Class A Common Stock. On November 14,
1997,pursuant to a definitive agreement, the Company completed its
acquisition of Bellcore, a global provider of software, engineering and
consulting services, advanced research and development, technical training
and other services to the telecommunications industry. As of January 31,
1998, Bellcore had approximately 5,400 employees and annual revenues of
approximately $1 billion. The acquisition resulted in a substantial growth in
both the employee base and commercial revenues of the Company. The Company
financed a portion of the purchase price of Bellcore with debt financing. See
"Risk Factors--Potential Impact of Acquisition of Bellcore " and
"--Dependence on Acquisitions for Growth."
The Company's principal executive offices are located at 10260 Campus
Point Drive, San Diego, CA 92121 and its telephone number is (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.
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, limited liability company 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
or closing of the Acquisition Agreement relating to such Acquisition (subject
to post-closing adjustments, if any). Such Acquisition Shares may be issued
in installments or subject to contingencies or vesting requirements. It is
not expected that any individual who is 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.
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 the 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
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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 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 secondary market (the "Limited Market") maintained by the
Company through its wholly-owned broker-dealer subsidiary, Bull, Inc., which
was organized in 1973 for the purpose of providing liquidity to the Company's
stockholders, or in private transactions. 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"). In connection with the
transactions involving resales of Acquisition Shares, 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
9
<PAGE>
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 1998 10-K, Item 5, "Market for
Registrant's Common Equity and Related Stockholder Matters -- 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.
10
<PAGE>
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
--------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ----------- ----------
(Amounts in thousands, except earnings per share)
<S> <C> <C> <C> <C> <C>
Revenues . . . . . . . . . . . . $3,089,351 $2,402,224 $2,155,657 $1,921,880 $1,670,882
Cost of revenues . . . . . . . . 2,623,339 2,094,447 1,875,183 1,686,970 1,475,485
Selling, general and
administrative expenses. . . . . 301,093 191,836 173,742 146,083 120,387
Interest expense . . . . . . . . 11,682 4,925 4,529 3,468 2,966
Other (income) expense, net . . . (15,864) (2,193) (111) 5,653 2,216
Minority interest in income of
consolidated subsidiaries(1) . . 10,608
Provision for income taxes . . . 73,699 49,529 45,018 30,654 28,328
---------- ---------- ---------- ----------- ----------
Net income. . . . . . . . . . . . $ 84,794 $ 63,680 $ 57,296 $ 49,052 $ 41,500
---------- ---------- ---------- ----------- ----------
---------- ---------- ---------- ----------- ----------
Earnings per share(2):
Basic . . . . . . . . . . . . . . $ 1.65 $ 1.30 $ 1.19 $ 1.05 $ .91
---------- ---------- ---------- ----------- ----------
---------- ---------- ---------- ----------- ----------
Diluted . . . . . . . . . . . . . $ 1.55 $ 1.23 $ 1.14 $ 1.02 $ .89
---------- ---------- ---------- ----------- ----------
---------- ---------- ---------- ----------- ----------
Common equivalent shares:
Basic . . . . . . . . . . . . . . 51,349 49,157 48,143 46,605 45,403
---------- ---------- ---------- ----------- ----------
---------- ---------- ---------- ----------- ----------
Diluted . . . . . . . . . . . . . 54,806 51,738 50,285 47,865 46,759
---------- ---------- ---------- ----------- ----------
---------- ---------- ---------- ----------- ----------
<CAPTION>
January 31
--------------------------------------------------------------------
1998 1997 1996 1995 1994
---------- ---------- ---------- ----------- ----------
(Amounts in thousands)
<S> <C> <C> <C> <C> <C>
Total assets . . . . . . . . . . . $2,415,234 $1,012,462 $ 859,290 $ 752,584 $ 611,575
Working capital. . . . . . . . . . 94,588 270,553 227,185 173,467 206,580
Long-term debt . . . . . . . . . . 145,958 15,227 15,592 14,222 13,437
Long-term liabilities. . . . . . . 313,677 29,114 18,524 14,733 11,623
Stockholders' equity. . . . . . . $ 754,778 $ 527,459 $ 458,132 $ 386,760 $ 334,597
</TABLE>
- -------------------
(1) Relates to INTESA, the Company's consolidated 60%-owned joint venture and
NSI, the Company's consolidated 76%-owned subsidiary.
(2) Earnings per share has been restated for 1997, 1996, 1995 and 1994 to
conform with the new Statement of Financial Accounting Standards No. 128,
"Earnings per Share." The Company has never declared or paid cash
dividends on its capital stock and no cash dividends are presently
contemplated.
11
<PAGE>
DESCRIPTION OF CLASS A COMMON 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 13, 1998, there were
53,287,080 shares of Class A Common Stock, 314,173 shares of Class B Common
Stock and no shares of Preferred Stock issued and outstanding. The Class A
Common Stock and the 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, with seven directors serving in each
class. 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, 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 presently
outstanding are, and the shares offered hereby upon full payment therefor
will be, fully paid and nonassessable.
12
<PAGE>
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 both the Class A Common
Stock and the Class B Common Stock.
As of April 13, 1998, there were 19,732 record holders of Class A Common
Stock and 151 record holders of Class B Common Stock.
13
<PAGE>
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 Retirement 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.
Notwithstanding the provisions of the Certificate of Incorporation and
the Company's employee benefit plans, a retiring employee of the Company who
meets certain criteria can elect to defer the repurchase of the employee's
shares for five years under the Company's Alumni Program. Under the Alumni
Program, an employee who is over 59 1/2 and has more than 10 years of
employment with the Company at the date of his or her retirement can elect to
have the Company defer its right of repurchase by executing and delivering to
the Company an agreement within 60 days following the date of the employee's
termination. If the employee makes such an election, transferees of the
employee's shares are also eligible to make the same deferral election with
respect to shares of stock transferred to them by the employee. During the
five-year deferral period, the stockholder may offer shares of stock for sale
in the Limited Market or make transfers to family members. At the end of the
five-year deferral period, all such shares will be subject to repurchase by
the Company at the then current Formula Price. The Alumni Program pertains
only to the deferral of the Company's right of repurchase and does not
provide the employee any rights with respect to the vesting or forfeiture of
any shares or options
14
<PAGE>
held by the employee at the date of his or her retirement or guarantee the
repurchase at the end of the deferral period.
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.
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 of Directors
deems appropriate. See "Risk Factors--Restrictions on Class A Common Stock."
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
15
<PAGE>
the Class A Common Stock and Class B Common Stock with respect to dividend,
redemption and liquidation rights.
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 MATTERS
The legality of the Class A Common Stock offered hereby has been passed
upon for the Company by Douglas E. Scott, Esquire, Senior Vice President and
General Counsel of the Company. As of April 13, 1998, Mr. Scott owned of
record 16,410 shares of Class A Common Stock, had the right to acquire an
additional 21,000 shares pursuant to previously granted stock options and
beneficially owned a total of 4,591 shares through the Company's retirement
plans.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of Science Applications
International Corporation for the year ended January 31, 1998 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.
The consolidated financial statements of Bell Communications Research,
Inc. incorporated by reference in this Prospectus from the Company's Report
on Forms 8-K dated July 11, 1997 and September 19, 1997, have been
incorporated by reference herein in reliance on the report of Coopers &
Lybrand L.L.P., independent accountants, given on the authority of said firm
as experts in auditing and accounting.
16
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
The Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Resales by Affiliates of Acquired Companies. . . . . . . . . . . . . . 9
Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . 10
Description of Class A Common Stock. . . . . . . . . . . . . . . . . . 11
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
3,000,000 SHARES
CLASS A COMMON STOCK
[LOGO]
-------------------
P R O S P E C T U S
-------------------
_______, 1998
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
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 $50 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
NUMBER DESCRIPTION OF EXHIBITS INCORPORATED BY REFERENCE TO
------- ----------------------- ----------------------------
<S> <C> <C>
4(a) Article FOURTH of the Registrant's Exhibit 3 to the Registrant's
Certificate of Incorporation. Post-Effective Amendment No. 1
to Form S-2 as filed on August 21,
1987 with the SEC.
10(a) Form of Alumni Agreement. Exhibit 4(w) to the Registrant's
Annual Report on Form 10-K for the
fiscal year ended January 31, 1997.
5 Opinion of Douglas E. Scott, Esq. Exhibit 5 to the Registrant's
Registration Statement No. 33-51523
on Form S-4 as filed May 6, 1996 with
the SEC.
21 Subsidiaries of the Registrant. **
23(a) Consent of Douglas E. Scott, Esq. Contained in Exhibit 5 to the
Registrant's Registration Statement
No. 33-51523 on Form S-4 as filed
May 6, 1996 with the SEC.
23(b) Consent of Price Waterhouse LLP. **
23(c) Consent of Coopers & Lybrand L.L.P. **
</TABLE>
- -----------------------
** Filed herewith.
II-1
<PAGE>
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
informationset 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 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
II-2
<PAGE>
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 Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 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 of 1933 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-3
<PAGE>
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
Post-Effective Amendment to 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 4, 1998.
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
*
-----------------------------
J.R. Beyster
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to 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>
* Chairman of the Board and May 4, 1998
- ------------------------ Principal Executive Officer
J.R. Beyster
* Principal Financial Officer May 4, 1998
- ------------------------
W.A. Roper, Jr.
* Principal Accounting Officer May 4, 1998
- ------------------------
P.N. Pavlics
- ------------------------ Director
D.P. Andrews
* Director May 4, 1998
- ------------------------
V.N. Cook
* Director May 4, 1998
- ------------------------
W.H. Demisch
* Director May 4, 1998
- ------------------------
W.A. Downing
* Director May 4, 1998
- ------------------------
J.E. Glancy
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director May 4, 1998
- ------------------------
B.R. Inman
Director
- ------------------------
A.K. Jones
Director
- ------------------------
H.M.J. Kraemer, Jr.
* Director May 4, 1998
- ------------------------
W.M. Layson
* Director May 4, 1998
- ------------------------
C.B. Malone
* Director May 4, 1998
- ------------------------
J.W. McRary
Director
- ------------------------
S.D. Rockwood
Director
- ------------------------
R.C. Smith
* Director May 4, 1998
- ------------------------
E.A. Straker
* Director May 4, 1998
- ------------------------
M.E. Trout
* Director May 4, 1998
- ------------------------
J.P. Walkush
* Director May 4, 1998
- ------------------------
J.H. Warner, Jr.
* Director May 4, 1998
- ------------------------
J.A. Welch
* Director May 4, 1998
- ------------------------
J.B. Wiesler
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Director May 4, 1998
- ------------------------
A.T. Young
</TABLE>
* By /s/ D.E. SCOTT
-----------------------
D.E. Scott
as Attorney-in-Fact
II-6
<PAGE>
Exhibit 21
SUBSIDIARIES OF THE REGISTRANT
<TABLE>
<CAPTION>
State of Incorporation
----------------------
<S> <C>
AMSEC Corporation Delaware
Andrew Palmer & Associates Limited (wholly-owned by
SAIC Limited) England
AW Software und Technologie GmbH Austria
Bell Communications Research, Inc. Delaware
Bull, Inc. California
Campus Point Realty Corporation California
Environmental Restoration Systems, Inc. Delaware
General Sciences Corporation Delaware
Hicks & Associates, Inc. Delaware
JHK & Associates, Inc. dba TransCore Delaware
JMD Development Corporation dba JDA California
Network Solutions, Inc. Delaware
Pathology Associates International Corporation Delaware
PT Science Applications International Corporation
Indonesia Indonesia
R.E. Wright Environmental, Inc. Delaware
Sachse Engineering Associates, Inc. California
SAIC (Bermuda) Ltd. Bermuda
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 North Carolina, Inc. North Carolina
SAIC Engineering of Ohio, Inc. Ohio
SAIC Europe Limited England
SAIC Global Technology Corporation Delaware
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
State of Incorporation
----------------------
<S> <C>
SAIC in Novosibirsk Russia
SAIC Limited (subsidiary of SAIC Europe Limited) England
SAIC - MIR Russia
SAIC Services Delaware
SAIC Ukraine Corporation Delaware
Science Applications (Greece) Ltd. Greece
Science Applications International (Barbados) Barbados
Corporation
Science Applications International Corporation
(SAIC Canada) Canada
Science Applications International Corporation de Venezuela
Venezuela, S.A.
Science Applications International Corporation Singapore
(Singapore) Pte. Ltd.
Science Applications International Deutschland GmbH Germany
Science Applications International, Europe S.A. France
Science Applications International Pty. Ltd. Australia
Science Applications International Technology California
Syntonic Technology, Inc. dba TransCore Delaware
Systems Control Technology, Inc. Delaware
Tenth Mountain Systems, Inc. Delaware
</TABLE>
<PAGE>
Exhibit 23(b)
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Post-Effective Amendment No. 3 to Form S-4
Registration Statement of our report dated April 3, 1998 appearing on page
F-2 of Science Applications International Corporation's Annual Report on Form
10-K for the year ended January 31, 1998. We also consent to the
incorporation by reference in such Prospectus of our report dated February
27, 1998 appearing on page F-2 of the Annual Report on Form 11-K of the
Science Applications International Corporation Employee Stock Purchase Plan
for the year ended January 31, 1998. We also consent to the incorporation by
reference in such Prospectus of our report dated April 3, 1998 appearing on
page F-2 of the Annual Report on Form 11-K of the Science Applications
International Corporation Cash or Deferred Arrangement for the year ended
December 31, 1997. We also consent to the incorporation by reference in such
Prospectus of our report dated April 3, 1998 appearing on page F-2 of the
Annual Report on Form 11-K of the TransCore Retirement Savings Plan for the
year ended December 31, 1997. We also consent to the incorporation by
reference in such Prospectus of our report dated April 3, 1998 appearing on
page F-2 of the Annual Report on Form 11-K of the Bell Communications
Research Savings and Security Plan for the year ended December 31, 1997. We
also consent to the incorporation by reference in such Prospectus of our
report dated April 3, 1998 appearing on page F-2 of the Annual Report on Form
11-K of the Bell Communications Research Savings Plan for Salaried Employees
for the year ended December 31, 1997. We also consent to the reference to us
under the heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
San Diego, California
April 29, 1998
<PAGE>
Exhibit 23(c)
Consent of Independent Accountants
We consent to the incorporation by reference in the post-effective amendment
to the registration statement of Science Applications International
Corporation on Form S-4 (No. 33-51523) of our report dated February 12, 1997,
on our audits of the consolidated financial statements of Bell Communications
Research, Inc. as of December 31, 1996 and 1995 and for each of the three
years in the period ended December 31, 1996, which report is included in
Science Applications International Corporation's Current Reports on Form 8-K
dated July 11, 1997 and September 19, 1997. We also consent to the reference
to our firm under the caption "Experts".
/s/COOPERS & LYBRAND L.L.P.
Parsippany, New Jersey
April 29, 1998
