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Filed Pursuant to Rule 424(b)(1)
Registration No. 333-81051
15,049,432 Shares
GENERAL DYNAMICS CORPORATION
Common Stock
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All of the shares of common stock in the offering are being sold by the
selling stockholders identified in this prospectus. General Dynamics will not
receive any of the proceeds from the sale of the shares.
The common stock is listed on the New York Stock Exchange under the symbol
"GD". The last reported sale price of the common stock on September 25, 2000 was
$63.25 per share.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Initial price to public..................................... $63.00 $948,114,216.00
Underwriting discount....................................... $ 1.90 $ 28,593,920.80
Proceeds, before expenses, to the selling stockholders...... $61.10 $919,520,295.20
</TABLE>
To the extent that the underwriters sell more than 15,049,432 shares of
common stock, the underwriters have the option to purchase up to an additional
1,504,943 shares from the selling stockholders at the initial price to public
less the underwriting discount.
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The underwriters expect to deliver the shares against payment in New York,
New York on September 29, 2000.
GOLDMAN, SACHS & CO. MERRILL LYNCH & CO.
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Prospectus dated September 25, 2000.
<PAGE> 2
GENERAL DYNAMICS
Our primary businesses focus on business aviation, information systems,
shipbuilding, marine systems, and land and amphibious combat systems. Each of
these businesses involves design, manufacturing and program management
expertise, advanced technology, strong governmental relationships and a complex
systems integration capability. The primary customers for the company's
businesses are a diverse base of corporate and industrial buyers, the United
States military, the armed forces of allied nations and other governmental
organizations.
We operate in four primary business groups: Aerospace, Information Systems
and Technology, Marine Systems and Combat Systems.
Gulfstream Aerospace is the leading designer, developer, manufacturer and
marketer of technologically advanced intercontinental business jet aircraft.
Gulfstream has produced approximately 1,160 aircraft for customers around the
world since 1958 and offers a full range of aircraft products and services,
including the Gulfstream IV-SP and the ultra-long range Gulfstream V.
The Information Systems and Technology group provides telecommunications
and data management services, such as C(4)ISR systems for sea, air and land
defense. It has established a global presence in specialized data acquisition
and processing, creating products for use on the ocean floor and in outer space,
in advanced electronics for aircraft of all kinds, and in the total battlespace
information management systems that are key to military superiority in the 21st
century. It also provides telecommunications solutions and data management
services for the commercial market.
Marine Systems has experience in shipbuilding, fleet management and repair;
it has the broadest range of integration, design, engineering and production
skills in naval shipbuilding. Marine Systems is the U.S. Navy's leading supplier
of combat vessels, including nuclear submarines, surface combatants and
auxiliary ships. The group also manages ready-reserve and prepositioning ships
and builds commercial vessels.
Combat Systems is a leading supplier of land and amphibious combat system
development, production and support. Its product line includes a full spectrum
of armored vehicles, light wheeled reconnaissance vehicles, suspensions,
engines, transmissions, guns and ammunition handling systems, turrets and turret
drive systems, and reactive armor and ordnance.
We also own coal mining and aggregates operations in the Midwest, and a
leasing operation for liquefied natural gas tankers.
We have been growing our business through both internal and external means,
including profitable organic growth from all operating units; continuous process
improvements in operations; and disciplined capital deployment, including
internal investment and accretive acquisitions. In all of our acquisitions, both
defense and commercial, we seek to apply our broad expertise in creating
efficient manufacturing operations to further enhance financial performance and
competitive market positions. In identifying acquisitions, management has
primarily focused on defense and employed the following strategy:
- aggressively pursue targets directly related to our core business, and
- opportunistically consider acquisitions related to core competencies.
Our core competencies include the computerized design and production of
complex products involving advanced electro-mechanical, electronic and aerospace
systems; the integration of information and technology systems, including
secured communications, data processing and data management systems; the
marketing of advanced products and systems to domestic and international
customers, including government agencies; and the production and assembly of
high precision products.
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USE OF PROCEEDS
We will not receive any proceeds from the offering. The selling
stockholders will receive the proceeds from the offering.
SELLING STOCKHOLDERS
The selling stockholders are Forstmann Little & Co. Subordinated Debt and
Equity Management Buyout Partnership-IV, L.P., Gulfstream Partners, L.P. and
Gulfstream Partners II, L.P. The selling stockholders are former stockholders of
Gulfstream and acquired their shares of our common stock in the merger of one of
our wholly owned subsidiaries with Gulfstream in July 1999.
The following table sets forth the number of shares of our common stock
beneficially owned by each selling stockholder as of September 25, 2000 and the
number of shares being offered.
<TABLE>
<CAPTION>
NUMBER OF SHARES
SHARES BENEFICIALLY BENEFICIALLY
OWNED NUMBER OF SHARES OWNED AFTER THE PERCENTAGE AFTER
BEFORE THE OFFERING BEING OFFERED OFFERING(2) THE OFFERING
----------------------- ---------------- ---------------- ----------------
NAME NUMBER PERCENT(1)
---- ------ ----------
<S> <C> <C> <C> <C> <C>
Forstmann Little & Co.
Subordinated Debt and
Equity Management Buyout
Partnership-IV, L.P. ...... 10,265,915 5.2% 9,332,650 933,265 *
Gulfstream Partners, L.P. ... 2,674,325 1.3% 2,431,205 243,120 *
Gulfstream Partners II,
L.P. ...................... 3,614,135 1.8% 3,285,577 328,558 *
</TABLE>
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* Less than one percent.
(1) Based on 198,752,170 shares outstanding as of August 31, 2000.
(2) If the underwriters exercise their option to purchase an additional
1,504,943 shares, none of the selling stockholders after the offering will
own any shares.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This prospectus, which includes documents incorporated in this prospectus,
contains forward-looking statements about our financial condition, results of
operations, plans, objectives, future performance and business. It also includes
statements using words like "believes," "expects," "intends," "anticipates" or
"estimates" or similar expressions.
These forward-looking statements involve risks and uncertainties. Actual
results may differ materially from those predicted by the forward-looking
statements because of various factors and possible events, including the
following:
- the defense procurement budgets of the United States and its allies are
reduced or priorities changed;
- future defense procurement programs are delayed or reduced in scope or
contracts relating to these programs are awarded to competing companies;
- government contracts are terminated due to unilateral government action;
- customer demand or preference for business aircraft adversely change;
- our expectations with respect to our customers' exercise of business
aircraft options adversely change;
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- there occur catastrophic events with respect to our business aircraft and
they are determined to be related to the aircraft manufacturer;
- the outcome of legal and/or regulatory proceedings or of labor
negotiations is unfavorable;
- we encounter significant performance issues with key suppliers and
subcontractors;
- we are unsuccessful in the execution of internal performance plans;
- there are adverse changes in general economic or political conditions;
- competition increases in our industry or markets; and
- costs or difficulties related to the integration of businesses we have
recently acquired or may acquire in the future are greater than expected.
There is also the risk that we incorrectly analyze these risks and forces,
or that the strategies we develop to address them are unsuccessful.
Because these forward-looking statements involve risks and uncertainties,
actual results may differ significantly from those predicted in these
forward-looking statements. You should not place a lot of weight on these
statements. These statements speak only as of the date of this prospectus or, in
the case of any document incorporated by reference, the date of that document.
All subsequent written and oral forward-looking statements attributable to us or
any person acting on our behalf are qualified by the cautionary statements in
this section. We have no obligation to revise these forward-looking statements.
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UNDERWRITING
The selling stockholders and the underwriters for the offering named below
have entered into an underwriting agreement with respect to the shares being
offered. Subject to certain conditions, each underwriter has severally agreed to
purchase the number of shares indicated in the following table.
<TABLE>
<CAPTION>
Underwriters Number of Shares
------------ ----------------
<S> <C>
Goldman, Sachs & Co......................................... 11,663,310
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... 3,386,122
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Total............................................. 15,049,432
==========
</TABLE>
If the underwriters sell more shares than the total number set forth in the
table above, the underwriters have an option to buy up to an additional
1,504,943 shares from the selling stockholders to cover these sales. They may
exercise that option for 30 days. If any shares are purchased pursuant to this
option, the underwriters will severally purchase shares in approximately the
same proportion as set forth in the table above.
The following table shows the per share and total underwriting discounts
and commissions to be paid to the underwriters by the selling stockholders.
These amounts are shown assuming both no exercise and full exercise of the
underwriters' option to purchase 1,504,943 additional shares.
Paid by the Selling Stockholders
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<TABLE>
<CAPTION>
No Exercise Full Exercise
-------------- --------------
<S> <C> <C>
Per Share......................................... $ 1.90 $ 1.90
Total............................................. $28,593,920.80 $31,453,312.50
</TABLE>
Shares sold by the underwriters to the public will initially be offered at
the initial price to public set forth on the cover of this prospectus. Any
shares sold by the underwriters to securities dealers may be sold at a discount
of up to $1.14 per share from the initial price to public. Any such securities
dealers may resell any shares purchased from the underwriters to certain other
brokers or dealers at a discount of up to $0.10 per share from the initial price
to public. If all the shares are not sold at the initial price to public, the
representatives may change the offering price and the other selling terms.
General Dynamics, its executive officers and directors have agreed with the
underwriters not to dispose of or hedge any shares of General Dynamics' common
stock or securities convertible into or exchangeable for shares of common stock
owned directly by them or with respect to which they are deemed to be beneficial
owners during the period from the date of this prospectus continuing through the
date 90 days after the date of this prospectus, except with the prior written
consent of Goldman, Sachs & Co. This agreement does not apply to the issuance of
securities pursuant to any of our existing benefit plans.
In connection with the offering, the underwriters may purchase and sell
shares of common stock in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions created by
short sales. Short sales involve the sale by the underwriters of a greater
number of shares than they are required to purchase in the offering. "Covered"
short sales are sales made in an amount not greater than the underwriters'
option to purchase additional shares from the selling stockholders in the
offering. The underwriters may close out any covered short position by either
exercising their option to purchase additional shares or purchasing shares in
the open market. In determining the source of shares to close out
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the covered short position, the underwriters will consider, among other things,
the price of shares available for purchase in the open market as compared to the
price at which they may purchase shares through the overallotment option.
"Naked" short sales are any sales in excess of such option. The underwriters
must close out any naked short position by purchasing shares in the open market.
A naked short position is more likely to be created if the underwriters are
concerned that there may be downward pressure on the price of the common stock
in the open market after pricing that could adversely affect investors who
purchase in the offering. Stabilizing transactions consist of various bids for
or purchases of common stock made by the underwriters in the open market prior
to the completion of the offering.
The underwriters may also impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased shares sold
by or for the account of such underwriter in stabilizing or short covering
transactions.
Purchases to cover a short position and stabilizing transactions may have
the effect of preventing or retarding a decline in the market price of General
Dynamics' stock, and together with the imposition of the penalty bid, may
stabilize, maintain or otherwise affect the market price of the common stock. As
a result, the price of the common stock may be higher than the price that
otherwise might exist in the open market. If these activities are commenced,
they may be discontinued at any time. These transactions may be effected on the
NYSE, in the over-the-counter market or otherwise.
The selling stockholders estimate that their share of the total expenses of
the offering, excluding underwriting discounts and commissions, will be
approximately $10,000.
General Dynamics and the selling stockholders have each agreed to indemnify
the several underwriters against certain liabilities, including liabilities
under the Securities Act of 1933.
LEGAL MATTERS
The validity of the common stock being offered by this prospectus is being
passed upon for General Dynamics by Jenner & Block, Chicago, Illinois. Certain
legal matters will be passed upon for the underwriters by Simpson Thacher &
Bartlett, New York, New York.
EXPERTS
The December 31, 1999 consolidated financial statements of General
Dynamics, incorporated by reference in this prospectus, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are incorporated by reference in this
prospectus in reliance upon the authority of Arthur Andersen LLP as experts in
accounting and auditing giving said reports.
Arthur Andersen LLP did not audit the financial statements of Gulfstream
Aerospace Corporation for the years ended December 31, 1998 and 1997 which are
included in the consolidated financial statements of General Dynamics. These
financial statements of Gulfstream Aerospace Corporation were audited by
Deloitte & Touche LLP whose report has been furnished to Arthur Andersen LLP for
1998 and 1997. Insofar as the December 31, 1998 and 1997 consolidated financial
statements of General Dynamics relate to amounts included for Gulfstream
Aerospace Corporation, the opinion of Arthur Andersen LLP is based solely on the
report of Deloitte & Touche LLP, which report is included as an exhibit to
General Dynamics' Form 10-K for the fiscal year ended December 31, 1999 and
incorporated by reference in this prospectus in reliance upon the authority of
Deloitte & Touche LLP as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC under
the Securities Exchange Act. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. You may read and copy this
information at the following locations of the SEC:
<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661-2511
</TABLE>
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. The SEC also maintains an Internet world wide
web site that contains reports, proxy statements and other information about
issuers, including us, who file electronically with the SEC. The address of that
site is www.sec.gov. You can also inspect reports, proxy statements and other
information about us at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be a part of this prospectus, except
for any information that is superseded by information that is included directly
in this prospectus.
This prospectus incorporates by reference the General Dynamics documents
listed below (and any amendments thereto) that we have previously filed with the
SEC. They contain important information about us and our financial condition.
The section captioned "Description of General Dynamics Capital Stock"
contained on page 66 of the Joint Proxy/Prospectus in General Dynamics
Corporation's Registration Statement on Form S-4 (No. 333-80213).
Annual Report on Form 10-K for the fiscal year ended December 31, 1999.
Annual Report on Form 10-K/A for the fiscal year ended December 31, 1999.
Quarterly Report on Form 10-Q for the quarter ended April 2, 2000.
Quarterly Report on Form 10-Q for the quarter ended July 2, 2000.
In addition, we incorporate by reference any filings we make under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act until the selling
stockholders sell all of the shares which are the subject of this prospectus.
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You can obtain any of the documents incorporated by reference in this
prospectus from the SEC through the SEC's web site at the address provided above
or from us. Documents incorporated by reference are available from us without
charge, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference as an exhibit in this prospectus. You can
obtain these documents by requesting them in writing at the following address:
General Dynamics Corporation
3190 Fairview Park Drive
Falls Church, Virginia 20042-4523
Attention: Corporate Secretary
Telephone: (703) 876-3000
If you request any incorporated documents from us, we will mail them to you
by first class mail, or another equally prompt means, within one business day
after we receive your request.
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No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the shares offered hereby, but only under circumstances
and in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
General Dynamics.................... 3
Use of Proceeds..................... 4
Selling Stockholders................ 4
Cautionary Statement Regarding
Forward-Looking Information....... 4
Underwriting........................ 6
Legal Matters....................... 7
Experts............................. 7
Where You Can Find More
Information....................... 8
</TABLE>
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15,049,432 Shares
GENERAL DYNAMICS CORPORATION
Common Stock
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PROSPECTUS
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GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
Representatives of the Underwriters
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