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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 6, 1999
REGISTRATION STATEMENT NO. 333-________
================================================================================
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)
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<S> <C> <C>
DELAWARE 8711 95-3630868
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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10260 CAMPUS POINT DRIVE
SAN DIEGO, CALIFORNIA 92121
(858) 826-6000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
DOUGLAS E. SCOTT, ESQ.
Senior Vice President and General Counsel
Science Applications International Corporation
10260 Campus Point Drive
San Diego, California 92121
(858) 826-6000
(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 the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(b)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If any of the securities being registered in 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]
---------------
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CALCULATION OF REGISTRATION FEE
=======================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT* OFFERING PRICE REGISTRATION FEE**
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, par value
$.01 per share..................... 2,100,280 shs. $77.44 $162,645,684 $45,216
=======================================================================================================================
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* ESTIMATED SOLELY FOR THE PURPOSE OF CALCULATING THE REGISTRATION FEE.
** PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (RULE
"429"), THIS REGISTRATION STATEMENT CONTAINS A COMBINED PROSPECTUS THAT
RELATES TO 2,100,280 SHARES OF THE REGISTRANT'S CLASS A COMMON STOCK BEING
REGISTERED HEREUNDER, AND TO 2,899,720 SHARES OF THE 3,000,000 SHARES OF
THE REGISTRANT'S CLASS A COMMON STOCK REGISTERED ON REGISTRATION STATEMENT
NO. 33-51523 ON FORM S-4, AS AMENDED, PREVIOUSLY FILED BY THE REGISTRANT ON
DECEMBER 16, 1993 (THE "EARLIER REGISTRATION STATEMENT"). PURSUANT TO RULE
429 , THE REGISTRATION FEE COVERS ONLY THE 2,100,280 SHARES OF CLASS A
COMMON STOCK BEING REGISTERED FOR THE FIRST TIME. FEES TOTALING $15,561
COVERING THE PREVIOUSLY REGISTERED SHARES WERE PAID BY THE REGISTRANT UPON
FILING THE EARLIER REGISTRATION STATEMENT.
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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SUBJECT TO COMPLETION __________, 1999
PROSPECTUS
20,000,000 SHARES OF CLASS A COMMON STOCK
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
We may use this prospectus from time to time to issue our shares of Class A
common stock to owners of businesses that we may acquire.
STOCK AS CONSIDERATION: We may pay for our acquisitions with Class A common
stock, cash, promissory notes, and the assumption of liabilities or commitments
to make future capital contributions to the acquired business. We may structure
the acquisitions in a variety of ways, including acquiring stock, partnership
interests, limited liability company interests or assets of the acquired
business or merging or consolidating the acquired company with us or one of our
subsidiaries. The amount and type of consideration we will offer and the other
specific terms of each acquisition will be determined by negotiations with the
owners or persons who control the acquired business. We may be required to
provide further information by means of a post-effective amendment to the
Registration Statement or supplement to this prospectus once we know the actual
information concerning an acquisition and the company to be acquired.
EXPENSES: We will pay all expenses of this offering. We will not pay
underwriting discounts or commissions in connection with issuing the shares for
acquisitions, although we may pay finder's fees in cash in specific
acquisitions. Any person receiving a finder's fee may be deemed an underwriter
within the meaning of the Securities Act of 1933.
RESALES: All of the shares of Class A common stock offered by this
prospectus may, subject to certain conditions, also be offered and resold from
time to time pursuant to this prospectus by the persons who receive shares of
Class A common stock in acquisitions.
RESTRICTIONS ON TRANSFER: Our certificate of incorporation limits a
stockholder's right to transfer the Class A common stock. We have a right to
repurchase the shares of Class A common stock if a stockholder's employment or
affiliation with us terminates.
RISKS OF OFFERING: THE SHARES OF CLASS A COMMON STOCK OFFERED OR SOLD UNDER
THIS PROSPECTUS INVOLVE RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS _____________, 1999
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RECENT REORGANIZATION
On April 9, 1999, our board of directors approved amendments to our
certificate of incorporation, including:
o an increase in the number of shares of Class A common stock that we are
authorized to issue to 1,000,000,000
o a split of each outstanding share of Class A common stock into four
shares
o an increase in voting and other rights of the Class B common stock to
maintain parity with Class A common stock
Our stockholders approved these amendments on July 9, 1999 at the 1999
Annual Meeting of Stockholders. The amendments will become effective when we
file a restated certificate of incorporation with the Secretary of State of the
State of Delaware. We anticipate making that filing by August 31, 1999. All the
information in this prospectus, including references to the number of shares of
Class A common stock, assumes that the restated certificate has been filed and
that the amendments are in effect.
TABLE OF CONTENTS
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Page
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Where You Can Find More Information..................................... 2
Science Applications International Corporation.......................... 3
Risk Factors............................................................ 4
The Offering............................................................ 9
Resales by Affiliates of Acquired Companies............................. 10
Selected Financial Data................................................. 12
Description of Class A Common Stock..................................... 13
Legal Matters........................................................... 17
Experts................................................................. 17
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. We have also filed with the SEC a registration
statement on Form S-4 to register the shares of Class A common stock being
offered in this prospectus. This prospectus, which forms a part of the
registration statement, does not contain all of the information included in the
registration statement. For further information about us and the shares of Class
A common stock offered in this prospectus, you should refer to the registration
statement and its exhibits and our other SEC filings.
You may read and copy any document we file at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please call
the SEC at 1-800-SEC-0330 for further information on the public reference rooms.
Our SEC filings are also available to the public at the SEC's web site at
http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with the SEC. This means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus.
Information that we file with the SEC after the date of this prospectus will
automatically update and supersede this information.
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We incorporate by reference the documents listed below and any future
filings made with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until the offering covered by this prospectus is
completed:
o Annual Report on Form 10-K for the year ended January 31, 1999
o Quarterly Report on Form 10-Q for the quarter ended April 30, 1999
o Current Reports on Form 8-K filed with the SEC on February 17, 1999,
April 14, 1999 and July 14, 1999
o Current Report on Form 8-K/A filed with the SEC on May 4, 1999
You may request a copy of these filings, at no cost, by writing to or
telephoning our corporate secretary at the following address:
Science Applications International Corporation
10260 Campus Point Drive
San Diego, California 92121
Attention: Corporate Secretary
Tel: (858) 826-7323
YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
PROVIDED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT COVER THIS PROSPECTUS.
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
SAIC's primary business is offering professional and technical services to
both commercial and government customers worldwide. We also design and develop
high technology products. Through our subsidiary, Telcordia Technologies, Inc.
(formerly Bell Communications Research, Inc.), we provide software, engineering
and consulting services, advanced research and development, and technical
training to the telecommunications industry.
SAIC provides technical services mainly in the following market areas:
o telecommunications
o national security
o health care
o energy
o environment
o information technology
o space
o law enforcement
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Acquisitions, investments and joint ventures have contributed to a
significant portion of our growth in revenues in recent years. We financed our
acquisitions of businesses in fiscal years 1999, 1998 and 1997 primarily with
cash. We expect to evaluate potential acquisitions, investments and joint
ventures on an ongoing basis. While we have been successful in identifying,
completing and integrating into our company acquisitions, investments and joint
ventures in the past, we cannot assure you that we will be able to continue to
do so. We also cannot assure you that we can accurately estimate the financial
effect of these transactions on our business.
Our principal office and corporate headquarters are located in San Diego,
California at 10260 Campus Point Drive, San Diego, California 92121 and our
telephone number is (858) 826-6000.
RISK FACTORS
You should carefully consider the risks and uncertainties described below
in your evaluation of us and our business. These are not the only risks and
uncertainties that we face. If any of these risks or uncertainties actually
occur, our business, financial condition or operating results could be
materially harmed and the price of our Class A common stock could decline.
RISKS RELATING TO OUR BUSINESS
A SUBSTANTIAL PERCENTAGE OF OUR REVENUE IS FROM U.S. GOVERNMENT CUSTOMERS AND
THE REGIONAL BELL OPERATING COMPANIES
We derive a substantial portion of our revenues from the U.S. Government in
our capacity as a prime contractor or a subcontractor. The percentage of total
revenues from the U.S. Government were 50% in fiscal year 1999, 66% in fiscal
year 1998 and 79% in fiscal year 1997. Our revenues could be adversely impacted
by a reduction in the overall level of U.S. Government spending and by changes
in its spending priorities from year to year. Furthermore, even if the overall
level of U.S. Government spending does increase or remain stable, the budgets of
the government agencies with whom we do business may be decreased or our
projects with them may not be sufficiently funded, particularly because Congress
usually appropriates funds for a given project on a fiscal-year basis even
though contract performance may take more than one year. In addition, obtaining
U.S. Government contracts continues to be competitive as our revenue growth
shifts toward contracts with lower reimbursable costs.
Our wholly-owned subsidiary, Telcordia Technologies, Inc. (which we refer
to as "Telcordia"), has historically derived a majority of its revenues from the
regional bell operating companies, which we call "RBOCs." In order for Telcordia
to maintain or exceed historical growth rates, it will need to continue to
increase its market share from the RBOCs and/or diversify its business by
obtaining new customers. Loss of business from the RBOCs could reduce revenues.
We have made progress in our efforts to diversify our business across a
greater number of customers. However, we still remain heavily dependent upon the
U.S. Government as a primary customer and our Telcordia subsidiary depends
heavily upon the RBOCs for its revenues. Our future success and revenue growth
will depend upon our ability to continue to expand our customer base.
WE MAY NOT BE ABLE TO IMPLEMENT OUR ACQUISITION STRATEGY
We have historically supplemented our internal growth through acquisitions,
investments and joint ventures. We evaluate potential acquisitions, investments
and joint ventures on an ongoing basis. Our acquisition and investment strategy
poses many risks, including:
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o We may not be able to compete successfully for available acquisition
candidates, complete future acquisitions and investments or accurately
estimate their financial effect on our business
o Future acquisitions, investments and joint ventures may require us to
issue additional Class A common stock, spend significant cash amounts
or decrease our operating income
o We may have trouble integrating the acquired business and retaining its
personnel
o Acquisitions, investments or joint ventures may disrupt our business
and distract our management from other responsibilities
o To the extent that any business which we acquire or in which we invest
fails, our business could be harmed
WE MAY LOSE REVENUE OR INCUR SIGNIFICANT COSTS IF YEAR 2000 COMPLIANCE ISSUES
ARE NOT PROPERLY ADDRESSED
Our evaluation of our computer systems showed that certain portions of our
software and systems require modification or replacement to address the Year
2000 issue. In addition, we are communicating with our critical service
providers, suppliers and vendors to determine the extent to which we are
vulnerable to those third parties' failure to remediate their own Year 2000
issues. If we do not complete the necessary modifications to existing software
and conversions to new software or are affected by third parties' failure to be
Year 2000 ready, the Year 2000 issue could have a material adverse impact on our
consolidated financial position, results of operations, cash flows or our
ability to conduct business. We also have an ongoing program to assess our
exposure with respect to our products and services. To date, we are not aware of
any matters that would have a material adverse effect on our consolidated
financial position, results of operations, cash flows or our ability to conduct
business; however, we cannot assure you that we will not be subject to material
liability claims in the future.
Our 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 customers, third party 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, we cannot assure you that these estimates will be
achieved and actual results could differ materially from those anticipated.
WE FACE INCREASING RISKS ASSOCIATED WITH OUR GROWING INTERNATIONAL BUSINESS
Our revenues from customers outside the U.S. have increased more rapidly
than our domestic revenues and are expected to continue to increase in the
future. Consequently, we are increasingly subject to the risks of conducting
business internationally. These risks include:
o unexpected changes in regulatory requirements
o tariffs
o political and economic instability
o restrictive trade policies
o inconsistent product regulation
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o cost of complying with a variety of laws
o licensing requirements
We do not know the impact of such regulatory, geopolitical and other
factors on our business in the future.
We have transactions denominated in foreign currencies because some of our
business is conducted outside of the United States. In addition, our foreign
subsidiaries generally conduct business in foreign currencies. We are exposed to
fluctuations in exchange rates, which could result in losses and have a
significant impact on our results of operations. This risk may be significant
for entities, such as INTESA, a Venezuelan joint venture in which we own 60%,
that operate in a highly inflationary economy. Our risks include the possibility
of significant changes in exchange rates and the imposition or modification of
foreign exchange controls by either the U.S. or applicable foreign governments.
We have no control over the factors that generally affect these risks, such as
economic, financial and political events and the supply and demand for the
applicable currencies. We may use forward foreign currency exchange rate
contracts to hedge against movements in exchange rates for contracts denominated
in foreign currencies. We cannot assure you that a significant fluctuation in
exchange rates will not have a significant negative impact on our results of
operations.
WE ARE DEPENDENT UPON THE SERVICES OF DR. BEYSTER AND OTHER KEY PERSONNEL
Our success depends on the continued contributions of our founder and chief
executive officer, J.R. Beyster (age 74), and, to a lesser extent, our other
executive officers. The loss of any of these key personnel could materially
affect our operations. We generally do not have long-term employment contracts
with these key personnel nor do we maintain "key man" life insurance policies.
WE FACE RISKS RELATING TO GOVERNMENT CONTRACTS
The Government May Modify or Terminate our Contracts. Many of the U.S.
Government programs in which we participate as a contractor or subcontractor may
extend for several years; however, such programs are normally funded on an
annual basis. The U.S. Government may modify or terminate its contracts and
subcontracts at its convenience. Modification or termination of our major
programs or contracts could have a material adverse effect on our results of
operations and financial condition.
Our Business is Subject to Potential Government Inquiries and
Investigations. We are from time to time subject to certain U.S. Government
inquiries and investigations of our business practices due to our participation
in government contracts. We cannot assure you that any such inquiry or
investigation would not have a material adverse effect on our results of
operations and financial condition.
Our Contract Costs are Subject to Audits by Government Agencies. The costs
we incur on our U.S. Government contracts, including allocated indirect costs,
may be audited by U.S. Government representatives. These audits may result in
adjustments to our contract costs. We normally negotiate with the U.S.
Government representatives before settling on final adjustments to our contract
costs. Substantially all of our indirect contract costs have been agreed upon
through fiscal year 1998. We have recorded contract revenues in fiscal year 1999
and 2000 based upon costs we expect to realize upon final audit. However, we do
not know the outcome of any future audits and adjustments and we may be required
to reduce our revenues or profits upon completion and final negotiation of these
audits.
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OUR FAILURE TO CONTROL FIXED-PRICE CONTRACTS MAY RESULT IN REDUCED PROFITS OR IN
LOSSES
The percent of our revenues from firm fixed-price contracts was 39% for
fiscal year 1999, 32% for fiscal year 1998 and 24% for fiscal year 1997. Because
we assume the risk of performing a firm fixed-price contract at a set 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 in losses for such contracts.
PRE-CONTRACT COSTS MAY NOT BE RECOVERED
Any costs we incur before the execution of a contract or contract amendment
are incurred at our risk, and it is possible that the customer will not
reimburse us for such costs. At April 30, 1999, we had unbilled receivables of
$26,198,000 included in revenues, exclusive of related fees for such pre-
contract costs. We cannot assure you that contracts or contract amendments will
be executed or that the related costs will be recovered.
RISKS RELATING TO OUR INDUSTRY
WE MUST ATTRACT, TRAIN AND RETAIN SKILLED EMPLOYEES
The availability of highly trained and skilled professional, administrative
and technical personnel is critical to our future growth and profitability.
Competition for scientists, engineers, technicians, management and professional
personnel is intense and competitors aggressively recruit key employees. Because
of our growth and competition for experienced personnel, it has become more
difficult to meet all of our needs for such employees in a timely manner. We
intend to continue to devote significant resources to recruit, train and retain
qualified employees; however, we cannot assure you that we will be able to
attract, train and retain such employees on acceptable terms. Any failure to do
so could have a material adverse effect on our operations.
OUR FAILURE TO REMAIN COMPETITIVE COULD HARM OUR BUSINESS
Our business is highly competitive, particularly in the business areas of
telecommunications and information technology outsourcing. We compete with
larger companies that have greater financial resources and larger technical
staffs. We also compete with smaller, more highly specialized entities who are
able to concentrate their resources on particular areas. In addition, we compete
with the U.S. Government's own in-house capabilities and federal non-profit
contract research centers. To continue our success, we must provide superior
service and performance on a cost-effective basis.
RISKS RELATING TO OUR STOCK
NO PUBLIC MARKET EXISTS FOR OUR STOCK AND THE ABILITY OF A STOCKHOLDER TO SELL
OUR STOCK IS LIMITED
There is no public market for the Class A common stock. The limited market
maintained by our wholly-owned broker-dealer subsidiary, Bull, Inc., permits
existing stockholders to offer our stock for sale only on predetermined trade
dates (which we refer to as a "Trade Date"). Generally, there are four Trade
Dates each year. If there are insufficient buyers for the stock on any Trade
Date, our stockholders will not be able to sell their stock on the Trade Date.
OUR STOCK PRICE IS DETERMINED BY OUR BOARD OF DIRECTORS AND IS NOT ESTABLISHED
BY MARKET FORCES
Our stock price is not determined by a trading market of bargaining buyers
and sellers. Our board of directors determines the price at which the Class A
common stock trades in the limited market
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pursuant to a valuation process which includes a formula adopted by the board of
directors. Our board of directors believes that the stock price represents a
fair market value; however, we cannot assure you that the stock price represents
the value that would be obtained if our stock was publicly traded. The formula,
which is one part of the valuation process, does not specifically include
variables reflecting all financial and valuation criteria that may be relevant.
Absent changes in the Market Factor, which may change considerably from quarter
to quarter as appropriate to reflect changing business, financial and market
conditions, the mechanical application of the formula tends to reduce the impact
on the stock price of quarterly fluctuations in our operating results because
the formula takes into account our net income for the four preceding quarters.
FUTURE RETURNS ON OUR CLASS A COMMON STOCK MAY DIFFER SIGNIFICANTLY FROM
HISTORICAL RETURNS
We cannot assure you that the price of the Class A common stock will not
decline or provide returns in the future comparable to those achieved
historically.
CHANGES IN OUR BUSINESS MAY INCREASE THE VOLATILITY OF THE STOCK PRICE
The stock price could be subject to greater fluctuations than it has
experienced in the past. The increased volatility is expected to result from the
impact on our stock price of:
o our ownership interest in Network Solutions, Inc., a publicly traded
and highly volatile Internet company. As of June 3, 1999, we owned
approximately 44.7% of the outstanding common stock of Network
Solutions
o the increase of our commercial and international business as a
proportion of our overall business and the greater volatility
associated with companies in those business areas
o the impact of acquisitions, investments and joint ventures that we may
pursue in the future
Finally, the Market Factor in the formula may change considerably, from
quarter to quarter as appropriate, to reflect changing business, financial and
market conditions.
THE ABILITY OF A STOCKHOLDER TO SELL OR TRANSFER OUR CLASS A COMMON STOCK IS
RESTRICTED
Our certificate of incorporation limits our stockholders' ability to sell
or transfer shares of Class A common stock in some circumstances. These
restrictions include:
o our right of first refusal to purchase shares a stockholder offers to
sell to a third party other than in our limited market
o our right to repurchase shares upon the termination of a stockholder's
employment or affiliation with us
The repurchase restriction does not apply to qualified employees who elect
to have us defer our repurchase rights for five years.
RESTRICTIONS IN OUR CERTIFICATE OF INCORPORATION AND BYLAWS MAY DISCOURAGE
TAKEOVER ATTEMPTS THAT YOU MIGHT FIND ATTRACTIVE
Our certificate of incorporation and bylaws may discourage or prevent
attempts to acquire control of us that are not approved by our board of
directors, including transactions in which stockholders might receive a premium
for their shares above the stock price. Our stockholders may view such a
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takeover attempt favorably. In addition, the restrictions may make it more
difficult for our stockholders to elect directors.
FORWARD-LOOKING STATEMENT RISKS
YOU MAY NOT BE ABLE TO RELY ON FORWARD-LOOKING STATEMENTS
The information contained in this prospectus or in documents that we
incorporate by reference includes some forward-looking statements that involve a
number of risks and uncertainties. A number of factors could cause our actual
results, performance, achievements, or industry results to be very different
from the results, performance or achievements expressed or implied by these
forward-looking statements.
In addition, forward-looking statements depend upon assumptions, estimates
and dates that may not be correct or precise and involve known or unknown risks,
uncertainties and other factors. Accordingly, a forward-looking statement is not
a prediction of future events or circumstances and those future events or
circumstances may not occur. Given these uncertainties, you are warned not to
rely on the forward-looking statements. A forward-looking statement is usually
identified by our use of certain terminology including "believes," "expects,"
"may," "will," "should," "seeks," "pro forma," "anticipates" or "intends," or by
discussions of strategies or intentions. We are not undertaking any obligation
to update these factors or to publicly announce the results of any changes to
our forward- looking statements due to future events or developments.
THE OFFERING
THE ACQUISITIONS
We may offer up to 20,000,000 shares of Class A common stock from time to
time under this prospectus in connection with one or more acquisitions. We may
pay for our acquisitions with Class A common stock, cash, promissory notes, and
the assumption of liabilities or commitments to make future capital
contributions to the acquired business. We may structure the acquisitions in a
variety of ways, including acquiring stock, partnership interests, limited
liability company interests or assets of the acquired business or merging or
consolidating the acquired company with us or one of our subsidiaries. The
amount and type of consideration we will offer and the other specific terms of
each acquisition will be determined by negotiations with the owners or persons
who control the acquired business.
We expect that, in most cases, the aggregate market value of the Class A
common stock we issue in connection with any acquisition will be determined upon
signing or closing of the acquisition agreement. The shares may be issued in
installments or subject to contingencies or vesting requirements. We do not
expect that any individual who is an officer, director, employee or affiliate of
us or any of our subsidiaries will be receiving any shares of Class A common
stock offered by this prospectus.
ACQUISITION STRATEGY
Our acquisition strategy is primarily to target companies or business
operations that would add new or complementary technologies, capabilities or
customers. We may also acquire companies or business operations involving
existing capabilities or customers in order to increase our presence in the
relevant markets.
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STOCKHOLDER APPROVAL
We do not anticipate that any of the acquisitions will require the approval
of our stockholders. Therefore, under Delaware law, our stockholders would not
have any dissenters' rights with respect to any of the acquisitions. Generally,
the stockholders of an acquired company must approve an acquisition if it
involves the sale of all or substantially all of the assets of the company to be
acquired or the merger or consolidation of the acquired company with us or one
of our subsidiaries. The laws of the state of incorporation of the acquired
company and/or its charter documents will determine the availability of
appraisal or similar rights to stockholders of the acquired company who oppose
the acquisition.
COMPENSATION
The offering will be conducted primarily through the efforts of our
management. We do not expect that any of our officers, directors, employees or
affiliates will receive any direct or indirect compensation relating to the
offering. We also do not expect that any of these persons will have any material
interest, direct or indirect, in any acquisition we consider.
We will pay all expenses of this offering. We will not pay underwriting
discounts or commissions in connection with issuing the shares for acquisitions,
although we may pay finder's fees in cash in specific acquisitions. Any person
receiving a finder's fee may be deemed an underwriter within the meaning of the
Securities Act of 1933.
We expect 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 we pay, including any of the shares
of Class A common stock.
FEDERAL INCOME TAX CONSEQUENCES
The federal income tax consequences of the acquisitions are likely to be
different, depending on the structure of each specific acquisition and the terms
of the governing acquisition agreement. We cannot determine the federal income
tax consequences to the acquired company, its stockholders or to us until the
acquisition is actually structured. However, we do not expect any acquisition to
have significant federal income tax consequences to us. On the other hand, the
federal income tax consequences to the acquired company or its stockholders may
be significant. Therefore, the acquired company and each of its stockholders
should consult their own tax advisors as to the tax consequences of the
transaction before deciding whether to participate in or to approve an
acquisition in which the acquired company or its stockholders would receive
shares of Class A common stock.
RESALES BY AFFILIATES OF ACQUIRED COMPANIES
This prospectus has also been prepared for use by those persons who receive
shares we issue in acquisitions and who control or are controlled by the
acquired company. These affiliates of the acquired company may be required to
offer and sell the Class A common stock under circumstances requiring the use of
a prospectus. However, none of these affiliates will be authorized to use this
prospectus for any offer or sale of the Class A common stock without our prior
consent. We may consent to the use of this prospectus, together with a
prospectus supplement, if required, for a limited period of time by these
affiliates, subject to limitations and conditions which may be varied by
agreement between us and the affiliates.
10
<PAGE> 12
Resales of the shares may be through:
o private transactions or
o in the limited secondary market maintained by us through Bull Inc., our
wholly-owned broker-dealer subsidiary
Bull, Inc. was organized in 1973 for the purpose of providing liquidity to
our stockholders. Stockholders can generally sell shares of Class A common stock
in the limited market on the four predetermined trade dates in each year.
In connection with the transactions involving resales of the shares of
Class A common stock received in an acquisition the affiliate may be deemed to
be an underwriter within the meaning of the Securities Act. Any profits realized
on the sales by these affiliates may be regarded as underwriting compensation.
When resales on behalf of the affiliates are to be made through our limited
market, the affiliates, like all our stockholders selling shares in the limited
market (other than us and certain of our employee benefit plans), will pay Bull,
Inc. a two percent commission. In connection with these 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
the shares were sold by the affiliate, the commissions to be paid by the
affiliate to Bull, Inc. and information about the affiliate.
11
<PAGE> 13
SELECTED FINANCIAL DATA
The selected historical financial information set forth below at January
31, 1999, 1998, 1997, 1996 and 1995, and for the years then ended, has been
derived from our audited consolidated financial statements incorporated by
reference into this prospectus. The selected historical financial information
set forth below for the three months ended April 30, 1999 and 1998 has been
derived from our unaudited interim financial statements incorporated by
reference into this prospectus which, in the opinion of our management, include
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the results of operations for the unaudited interim
periods. Interim operating results and balance sheet information are not
necessarily indicative of the operating results or financial condition that may
be expected for the full year. The selected historical financial information set
forth below should be read in conjunction with our consolidated financial
statements and related notes and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" incorporated by reference into
this prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED APRIL 30 YEAR ENDED JANUARY 31
------------------------- -------------------------------------------------------------------
1999(1) 1998 1999(2) 1998 1997 1996 1995
----------- ----------- ----------- ----------- ----------- ----------- -----------
UNAUDITED
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues ..................... $ 1,184,006 $ 1,008,380 $ 4,740,433 $ 3,089,351 $ 2,402,224 $ 2,155,657 $ 1,921,880
Cost of revenues ............. 910,896 798,944 3,732,890 2,623,339 2,094,447 1,875,183 1,686,970
Selling, general and
administrative expenses .... 192,910 139,856 684,905 301,093 191,836 173,742 146,083
Interest expense ............. 8,594 3,758 33,813 11,682 4,925 4,529 3,468
Other (income) expense, net .. (714,757) (60) (17,012) (15,864) (2,193) (111) 5,653
Minority interest in income
of consolidated subsidiaries 6,500 2,614 17,842 10,608 -- -- --
Provision for income taxes ... 331,442 29,230 137,307 73,699 49,529 45,018 30,654
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income ................... $ 448,421 $ 34,038 $ 150,688 $ 84,794 $ 63,680 $ 57,296 $ 49,052
=========== =========== =========== =========== =========== =========== ===========
Earnings per share(3):
Basic ...................... $ 7.69 $ .63 $ 2.68 $ 1.65 $ 1.30 $ 1.19 $ 1.05
=========== =========== =========== =========== =========== =========== ===========
Diluted .................... $ 7.09 $ .59 $ 2.46 $ 1.55 $ 1.23 $ 1.14 $ 1.02
=========== =========== =========== =========== =========== =========== ===========
Common equivalent shares(3):
Basic ...................... 58,302 53,823 55,621 51,349 49,157 48,143 46,605
=========== =========== =========== =========== =========== =========== ===========
Diluted .................... 63,218 57,922 60,304 54,806 51,738 50,285 47,865
=========== =========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
APRIL 30 JANUARY 31
------------------------- -------------------------------------------------------------------
1999 1998 1999 1998 1997 1996 1995
----------- ----------- ----------- ----------- ----------- ----------- -----------
UNAUDITED
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Total assets ................. $ 3,851,864 $ 2,475,487 $ 3,172,546 $ 2,415,234 $ 1,012,462 $ 859,290 $ 752,584
Working capital .............. 879,285 238,928 369,473 94,588 270,553 227,185 173,467
Long-term debt ............... 137,525 147,025 143,051 145,958 15,227 15,592 14,222
Long-term liabilities ........ 339,241 324,656 318,002 313,677 29,114 18,524 14,733
Stockholders' equity ......... 1,644,285 889,231 1,084,602 754,778 527,459 458,132 386,760
</TABLE>
- ----------------------
(1) Included in other income for the first quarter ended April 30, 1999 is a
gain on the sale of subsidiary common stock in the amount of $698 million.
(2) Revenues for fiscal year 1999 include a full year of operations for our
Telcordia subsidiary which we acquired in the fourth quarter of 1998.
12
<PAGE> 14
(3) After giving effect to the four-for-one stock split of SAIC's Class A
common stock to be effected on or about August 31, 1999, the share and per
share data would be as follows:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED APRIL 30 YEAR ENDED JANUARY 31
----------------- --------------------------------------------------
1999 1998 1999 1998 1997 1996 1995
------- ------- ------- ------- ------- ------- -------
PROFORMA AND UNAUDITED
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings per share:
Basic ................. $ 1.92 $ .16 $ .67 $ .41 $ .32 $ .30 $ .26
======= ======= ======= ======= ======= ======= =======
Diluted ............... $ 1.77 $ .15 $ .62 $ .39 $ .31 $ .28 $ .26
======= ======= ======= ======= ======= ======= =======
Common equivalent shares:
Basic ................. 233,209 215,289 222,483 205,397 196,630 192,573 186,419
======= ======= ======= ======= ======= ======= =======
Diluted ............... 252,872 231,687 241,216 219,226 206,956 201,140 191,461
======= ======= ======= ======= ======= ======= =======
</TABLE>
DESCRIPTION OF CLASS A COMMON STOCK
We are authorized to issue
o 1,000,000,000 shares of Class A common stock
o 5,000,000 shares of Class B common stock
o 3,000,000 shares of preferred stock
As of July 31, 1999, 235,364,456 shares of Class A common stock, 301,460
shares of Class B common stock and no shares of preferred stock were issued and
outstanding.
As of July 31, 1999, there were 28,561 record holders of Class A common
stock and 154 record holders of Class B common stock.
COMMON STOCK
GENERAL
VOTING
Except as otherwise provided by law, the holders of shares of Class A and
Class B common stock vote together as a single class in all matters. Each holder
of Class A common stock has one vote per share and each holder of Class B common
stock has 20 votes per share.
All the holders of common stock are entitled to cumulate their votes for
the election of directors. This means that each Class A stockholder can cast the
number of votes that equals the number of shares of Class A common stock held
multiplied by the number of directors to be elected. Each Class B stockholder
can cast 20 times the number of shares of Class B common stock held multiplied
by the number of directors to be elected. Each stockholder may cast all of their
votes for a single nominee or may distribute them among any two or more nominees
as the stockholder sees fit.
CLASSIFIED BOARD OF DIRECTORS
Our certificate of incorporation provides for a classified board of
directors consisting of three classes which shall be nearly as equal in number
as possible. The number of authorized directors is currently fixed at 22
directors, with eight directors in Class III and seven directors in each of
Class I and Class II. Each year the stockholders elect a different class of
directors to serve a three-year term. Classification of the board of directors
requires a greater number of votes to ensure the election of a director than
would be required without the classification.
DIVIDENDS
Subject to the rights of any preferred stockholders, our common
stockholders have the right to receive dividends that our board of directors
declares and to share proportionately in our assets in the event of liquidation
or dissolution, after payment of any amounts due to creditors. Any dividend or
13
<PAGE> 15
distribution made with respect to a share of Class B common stock must be 20
times the dividend or distribution made with respect to each share of Class A
common stock.
RECLASSIFICATION
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.
PROHIBITION ON ISSUANCE OF CLASS B COMMON STOCK
Under the terms of our certificate of incorporation, we are prohibited from
issuing any additional shares of Class B common stock. The holders may convert
each share of Class B common stock at any time into 20 shares of Class A common
stock. We will retire all shares of Class B common stock that we reacquire and
those shares will not be available for reissuance.
MERGERS, CONSOLIDATIONS OR BUSINESS COMBINATIONS
In any merger, consolidation or business combination to which we are a
party, other than one where we are the surviving corporation and which does not
result in any reclassification of or change in the outstanding shares of common
stock, each share of Class B common stock is entitled to receive 20 times the
consideration to be received with respect to each share of Class A common stock.
MERGERS WITH RELATED PERSONS
Our certificate of incorporation generally requires that mergers and
certain other business combinations between us and a related person must be
approved by the holders of securities having 80% of our outstanding voting
power, as well as by the holders of a majority of such securities that are not
owned by the related person. A "related person" means any holder of 5% or more
of our outstanding voting power. Under Delaware law, unless the certificate of
incorporation provides otherwise, only a majority of our 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 our
certificate of incorporation will not apply, however, to a business combination
with a related person, if the transaction
(1) is approved by our board of directors before the related person acquired
beneficial ownership of 5% or more of our outstanding voting power, or
(2) is approved by at least a majority of the members of our board of directors
who are not affiliated with the related person and who were directors
before the related person became a related person, or
(3) involves only us and one or more of our subsidiaries and certain other
conditions are satisfied.
AMENDMENT OF CHARTER
The amendment of certain provisions of our certificate of incorporation and
bylaws require the approval of at least two-thirds of the total voting power of
all of our outstanding shares of voting stock. These 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 these approvals.
TRANSFER AGENT
We act as our own transfer agent for both the Class A and Class B common
stock.
RESTRICTIONS ON CLASS A COMMON STOCK
The shares of Class A common stock are subject to restrictions under our
certificate of incorporation, including
14
<PAGE> 16
1. Right of Repurchase Upon Termination of Employment or Affiliation
Generally, shares of Class A common stock are subject to our right of
repurchase upon the termination of the stockholder's employment or affiliation
with us.
Our right of repurchase does not apply to shares of Class A common stock
that are held by a stockholder who received the shares
o in connection with our reorganization in 1984 in exchange for our
shares that were not subject to a right of repurchase upon termination
of employment or affiliation
o upon exercise of a non-qualified stock option granted prior to October
1, 1981 under our 1979 Stock Option Plan that were not converted into
incentive stock options
o in exchange for shares of Class B common stock that were not subject to
a right of repurchase upon termination of employment or affiliation
o in connection with a stock dividend or a stock split on the outstanding
shares of Class A common stock which have been issued under any of the
circumstances described in the bullet points above
Our right of repurchase will apply to all shares of Class A common stock
which the stockholder has the right to acquire after his or her termination of
employment or affiliation under
o any of our employee benefit plans, except our Employee Stock Retirement
Plan or any other retirement or pension plan that we or one of our
subsidiaries adopt that does not provide us the repurchase right
o any option or other contractual right to acquire shares of Class A
common stock which was in effect at the date of the termination of
employment or affiliation
Our right of repurchase is exercised by mailing a written notice to the
stockholder within 60 days following termination of employment or affiliation.
If we repurchase the shares, the price will be the stock price per share on
the date
o of the termination of employment or affiliation, for shares owned by
the stockholder on that date or shares acquired after that date in
connection with options or other contractual right which were in effect
on that date or
o the shares are distributed to the holder, for shares distributed to the
holder after termination of employment or affiliation in connection
with any of our employee benefit plans
We will pay for the shares in cash within 90 days of the date used to
determine the repurchase price.
Our repurchase right does not apply to qualified employees who elect to
have us defer our repurchase right for five years. Under our Alumni Program, an
employee who is over 59 1/2 and has more than 10 years of employment with us at
the date of his or her retirement can make this election. During the five-year
deferral period, the stockholder may sell shares in our limited market or
transfer shares to family members. At the end of the five-year deferral period,
all the shares will be subject to repurchase at the stock price in effect at
that time. The Alumni Program pertains only to the deferral of our right of
repurchase. It does not provide the employee any rights with respect to the
vesting or forfeiture of any shares or options the employee holds at the date of
his or her retirement, nor does it guarantee that we will repurchase the shares
at the end of the deferral period.
2. Right of First Refusal
If a stockholder wants to sell any shares of Class A common stock other
than in our limited market, the stockholder must give us notice first. The
notice must include the following:
o a statement signed by the stockholder that he or she wants to sell
shares of Class A common stock and has received a valid offer to
purchase the shares
15
<PAGE> 17
o a statement signed by the person offering to buy the shares that
includes the following:
-- the intended purchaser's full name, address and taxpayer
identification number
-- the number of shares to be purchased
-- the price per share to be paid
-- the other terms under which the purchase is intended to be made
-- a representation that the offer, under the terms specified, is
valid
o if the purchase price is payable in cash, a copy of a certified check,
cashier's check or money order payable to the stockholder from the
purchaser in the amount of the purchase price to be paid in cash
We have the right to purchase the shares from the stockholder within 14
days on the same terms described in the notice. If we do not exercise this
right, the holder may sell the shares within 30 days to the person and at the
price and on the terms identified in the notice. The holder may not sell the
shares to any other person or at any different price or on any different terms
without first re-offering the shares to us.
3. Transfers Other than by Sale
Except for sales in our limited market and as described above, a
stockholder may not sell, assign or transfer any shares of Class A common stock
without our prior written approval. We may require the person to whom the shares
are transferred to agree to hold the shares subject to our right to repurchase
the shares upon the termination of employment or affiliation of the employee,
director or consultant who is transferring the shares.
4. Lapse or Waiver of Restrictions
All of the restrictions on the Class A common stock will automatically
terminate if we make an underwritten public offering of either class of our
common stock or apply to have any class of our common stock listed on a national
securities exchange. In addition, our board of directors may waive any or all of
the restrictions on shares of Class A common stock in other circumstances that
they deem appropriate.
PREFERRED STOCK
Under our certificate of incorporation, the board of directors may issue
shares of preferred stock at any time in one or more series without stockholder
approval. The board of directors determines the designations, preferences and
relative rights, qualifications and limitations of each series. Each series of
preferred stock could rank senior to the Class A and Class B common stock with
respect to dividend, redemption and liquidation rights.
Holders of preferred stock would not have any preferential right to
purchase any shares of our capital stock. We do not have any present plan to
issue any shares of preferred stock.
ANTI-TAKEOVER EFFECTS
The combined effect of a variety of provisions may discourage, delay or
prevent attempts to acquire control of us that are not approved by our board of
directors. These provisions include:
o the classification of our board of directors into three different
classes
o the cumulative voting rights of the stockholders
o the supermajority vote requirements for mergers or business
combinations with related persons
o the provisions of our certificate of incorporation and bylaws requiring
two-thirds approval for certain amendments to the certificate of
incorporation or bylaws
16
<PAGE> 18
o our right of first refusal
o our right of repurchase upon termination of employment or affiliation
These provisions may have the effect of discouraging takeover attempts that
some stockholders might consider to be in their best interests, including tender
offers in which stockholders might receive a premium for their shares over the
stock price available in our limited market. These provisions may also make it
more difficult for individual stockholders or a group of stockholders to elect
directors. However, our board of directors believes that these provisions are in
the best interests of our stockholders and us. These provisions may encourage
potential acquirers to negotiate directly with the board of directors, which is
in the best position to act on behalf of all stockholders.
LEGAL MATTERS
The legality of the Class A common stock being offered hereby has been
reviewed for us by Douglas E. Scott, Esquire, Senior Vice President and General
Counsel of Science Applications International Corporation. As of July 31, 1999,
Mr. Scott owned of record 60,860 shares of Class A common stock, had the right
to acquire an additional 92,000 shares pursuant to previously granted stock
options and beneficially owned a total of 18,912 shares through our 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, 1999, have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
17
<PAGE> 19
20,000,000 SHARES
CLASS A COMMON STOCK
[LOGO]
-------------------
P R O S P E C T U S
-------------------
____________________, 1999
<PAGE> 20
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 provides that the
Registrant indemnify its directors and officers to the fullest extent permitted
by law.
Registrant also has directors and officers liability insurance, with policy
limits of $50 million, under which directors and officers of the Registrant 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 Annex I of the Registrant's Proxy
Certificate of Incorporation Statement for the 1999 Annual Meeting
of Stockholders as filed April 1999
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.**
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 PricewaterhouseCoopers
LLP**
</TABLE>
- --------------------
** Filed herewith
ITEM 22. UNDERTAKINGS
(a) Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this 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.
II-1
<PAGE> 21
(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 undersigned 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 undersigned 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 undersigned 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 Act 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 described under Item 20 above, 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 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 Act and
will be governed by the final adjudication of such issue.
II-2
<PAGE> 22
(e) Requests for information
The undersigned 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 undersigned 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> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
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 August 6, 1999.
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
/S/ J.R. BEYSTER
----------------------------------------
J.R. Beyster
Chairman of the Board
and Chief Executive Officer
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 person's 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 August 6, 1999
- --------------------------------------- Principal Executive Officer
J.R. Beyster
/S/ W.A. ROPER, JR. Principal Financial Officer August 6, 1999
- ---------------------------------------
W.A. Roper, Jr.
/S/ P.N. PAVLICS Principal Accounting Officer August 6, 1999
- ---------------------------------------
P.N. Pavlics
/S/ D.P. ANDREWS Director August 6, 1999
- ---------------------------------------
D.P. Andrews
/S/ V.N. COOK Director August 6, 1999
- ---------------------------------------
V.N. Cook
/S/ W.H. DEMISCH Director August 6, 1999
- ---------------------------------------
W.H. Demisch
/S/ D.W. DORMAN Director August 6, 1999
- ---------------------------------------
D.W. Dorman
/S/ W.A. DOWNING Director August 6, 1999
- ---------------------------------------
W.A. Downing
/S/ J.E. GLANCY Director August 6, 1999
- ---------------------------------------
J.E. Glancy
/S/ B.R. INMAN Director August 6, 1999
- ---------------------------------------
B.R. Inman
</TABLE>
II-4
<PAGE> 24
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ A.K. JONES Director August 6, 1999
- ---------------------------------------
A.K. Jones
/S/ H.M.J. KRAEMER, JR. Director August 6, 1999
- ---------------------------------------
H.M.J. Kraemer, Jr.
/S/ C.B. MALONE Director August 6, 1999
- ---------------------------------------
C.B. Malone
/S/ J.W. MCRARY Director August 6, 1999
- ---------------------------------------
J.W. McRary
/S/ S.D. ROCKWOOD Director August 6, 1999
- ---------------------------------------
S.D. Rockwood
- --------------------------------------- Director
L.A. Simpson
/S/ R.C. SMITH, JR. Director August 6, 1999
- ---------------------------------------
R.C. Smith, Jr.
/S/ E.A. STRAKER Director August 6, 1999
- ---------------------------------------
E.A. Straker
- --------------------------------------- Director
M.E. Trout
/S/ J.P. WALKUSH Director August 6, 1999
- ---------------------------------------
J.P. Walkush
/S/ J.H. WARNER, JR. Director August 6, 1999
- ---------------------------------------
J.H. Warner, Jr.
/S/ J.A. WELCH Director August 6, 1999
- ---------------------------------------
J.A. Welch
/S/ J.B. WIESLER Director August 6, 1999
- ---------------------------------------
J.B. Wiesler
- --------------------------------------- Director
A.T. Young
</TABLE>
II-5
<PAGE> 1
Exhibit 5
August 6, 1999
Science Applications
International Corporation
10260 Campus Point Drive
San Diego, CA 92121
Gentlemen:
I am the Senior 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 20,000,000 shares of its Class A Common Stock,
par value $.01 per share (the "Class A Common Stock") (the shares of Class A
Common Stock being offered by the Company are hereinafter referred to as the
"Shares"), which may be offered and sold by the Company in connection with the
Company's acquisition, from time to time, of various businesses or business
operations. The shares are being offered pursuant to a Prospectus which
constitutes a part of the Registration Statement on Form S-4 (the "Registration
Statement") filed with the Securities and Exchange Commission on August 6, 1999
under the Securities Act of 1933, as amended (the "Securities Act").
On July 9, 1999 at the Company's Annual Meeting of Stockholders, the
stockholders approved amendments to our certificate of incorporation, including
(1) increase the number of authorized shares of Class A Common Stock to
1,000,000,000 shares, (2) split each outstanding share of Class A Common Stock
into four shares, and (3) increase the voting and other rights of the Class B
Common Stock to maintain parity with the Class A Common Stock. The amendments
will become effective when the Company files a restated certificate of
incorporation with the Secretary of State of the State of Delaware (the
"Restated Certificate"). The Restated Certificate is expected to be filed on or
about August 31, 1999. All the information and opinions contained in this letter
relating to the Shares are based upon the assumption that the Restated
Certificate has been filed and that the amendments are in effect.
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
Certificate of Incorporation and Bylaws of the Company as currently in effect
and the form of Restated Certificate, (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 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.
<PAGE> 2
Based upon and subject to the foregoing, I am of the opinion that the
Shares that are being offered and sold by the Company have been duly authorized
for issuance and when certificates therefor have been duly executed, delivered
and paid for, will be validly 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
Senior Vice President
and General Counsel
<PAGE> 1
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
Bellcore International, Inc. (subsidiary of Telcordia Technologies, Inc.) Delaware
Bellcore International Pty. Ltd. (subsidiary of Telcordia Technologies, Inc.) Australia
Bellcore Ventures, Inc. (subsidiary of Telcordia Technologies, Inc.) New Jersey
Bull, Inc. California
Campus Point Realty Corporation California
CommSource, Inc. (subsidiary of Telcordia Technologies, Inc.) Delaware
Database Service Management, Inc. (subsidiary of Telcordia Technologies, Inc.) Delaware
General Sciences Corporation Delaware
Global Integrity Corporation Delaware
Hicks & Associates, Inc. Delaware
JHK & Associates, Inc. dba TransCore Delaware
JMD Development Corporation dba JDA California
Network Solutions, Inc. Delaware
Oacis Healthcare Holdings Corporation 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
</TABLE>
1
<PAGE> 2
<TABLE>
<CAPTION>
State of Incorporation
----------------------
<S> <C>
SAIC Engineering of Ohio, Inc. Ohio
SAIC Europe Limited England
SAIC Global Technology Corporation Delaware
SAIC in Novosibirsk Russia
SAIC Information Services Sector Corporation Delaware
SAIC Limited (subsidiary of SAIC Europe Limited) England
SAIC - MIR Russia
SAIC Services, Inc. Delaware
SAIC Ukraine Corporation Delaware
Science Applications (Greece) Ltd. Greece
Science Applications International (Barbados) Corporation Barbados
Science Applications International Corporation (SAIC Canada) Canada
Science Applications International Corporation de Venezuela, S.A. Venezuela
Science Applications International Corporation (Singapore) Pte. Ltd. Singapore
Science Applications International Deutschland GmbH Germany
Science Applications International, Europe S.A. France
Science Applications International Germany GmbH Germany
Science Applications International Pty. Ltd. Australia
Science Applications International Technology California
Soliant, Inc. (subsidiary of Telcordia Technologies, Inc.) Delaware
Syntonic Technology, Inc. dba TransCore Delaware
Systems Control Technology, Inc. Delaware
Telcordia Technologies, Inc. (formerly Bell Communications Research, Inc.) Delaware
Tenth Mountain Systems, Inc. Delaware
</TABLE>
2
<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 2, 1999 appearing on page F-2 of Science Applications International
Corporation's Annual Report on Form 10-K for the year ended January 31, 1999. We
also consent to the incorporation by reference in such Prospectus of our report
dated April 15, 1999 appearing on page 1 of the Annual Report on Form 11-K of
the Science Applications International Corporation Cash or Deferred Arrangement
for the year ended December 31, 1998. We also consent to the incorporation by
reference in such Prospectus of our report dated April 2, 1999 appearing on page
1 of the Annual Report on Form 11-K of the TransCore Retirement Savings Plan for
the year ended December 31, 1998. We also consent to the incorporation by
reference in such Prospectus of our report dated March 26, 1999 appearing on
page 1 of the Annual Report on Form 11-K of the Bell Communications Research
Savings and Security Plan for the year ended December 31, 1998. We also consent
to the incorporation by reference in such Prospectus of our report dated March
26, 1999 appearing on page 1 of the Annual Report on Form 11-K of the Bell
Communications Research Savings Plan for Salaried Employees for the year ended
December 31, 1998. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/PRICEWATERHOUSECOOPERS LLP
San Diego, California
August 3, 1999
