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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 14, 1994
LITTON INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
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Delaware 1-3998 95-1775499
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
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360 North Crescent Drive, Beverly Hills, California 90210
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 859-5000
Exhibit Index appears on Page 2 Page 1 of 6
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Item 5. Other Events
As previously reported in the Registrant's Annual Report on Form 10-K for
the fiscal year ended July 31, 1993, as a result of the "Operation Ill Wind"
investigation of defense contractor marketing practices, two employees of the
Data Systems Division of Litton Systems, Inc. ("LSI"), a wholly-owned subsidiary
of the Registrant, were convicted in March, 1991, on charges of unlawful
conveyance of governmental property (i.e., certain Government procurement-
related information), conspiracy to perform such acts, and the use
of the U.S. mails in these alleged activities. Following affirmation of such
convictions by the United States Court of Appeals for the Fourth Circuit in
August, 1992, the Registrant was informed by the Government that it intended to
proceed against LSI under the legal doctrine of respondeat superior, i.e., that
the employer is responsible for the acts of its employees.
On January 14, 1994, LSI agreed to settle all charges and claims of the
Government in connection with this matter by paying $1.5 million in fines, $1.1
million as reimbursement of costs of the Government's investigation, and $1.3
million in settlement of the Government's civil claims. In an agreement filed in
the United States District Court for the Eastern District of Virginia and
approved by the Court, LSI agreed to plead guilty to the three-count information
previously filed by the Government with the Court, which was based upon the
evidence presented by the Government at the trial of the two employees of LSI's
division who were convicted. The fine referred to above represents the maximum
penalty of $500,000 for each of such three violations.
LSI received no contracts as a result of the alleged wrongdoing and no
allegations were made by the Government that bribes or improper gratuities were
offered or taken. The Registrant believes that the suspension or debarment of
any of its operating units from receiving further Government contracts as a
result of the plea agreement is unlikely.
The agreement approved by the Court terminates both the civil and criminal
aspects of the legal proceeding previously reported.
Item 7. Exhibits
Exhibit 99: Plea Agreement entered into in the matter of United States of
America v. Litton Systems, Inc., dated January 14, 1994.......page 4
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LITTON INDUSTRIES, INC.
By: /s/ Norman L. Roberts
-----------------------
Norman L. Roberts
Senior Vice President
January 14, 1994
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EXHIBIT 99
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
ALEXANDRIA DIVISION
UNITED STATES OF AMERICA )
)
V. ) CRIMINAL NO.
)
LITTON SYSTEMS, INC. )
PLEA AGREEMENT
The United States of America, by its counsel, Helen F. Fahey, United States
Attorney, and Joseph J. Aronica and Jack I. Hanly, Assistant United States
Attorneys for the Eastern District of Virginia, and the Defendant, LITTON
SYSTEMS, INC., by its attorneys, state the following Plea Agreement reached
after negotiations pursuant to Rule 11, Federal Rules of Criminal Procedure:
1. LITTON SYSTEMS, INC. agrees to plead guilty to the three Count
Information previously filed with the Court, which is based upon the evidence
presented by the Government at the trial of United States v. Pafort and
McAusland. The information charges LITTON SYSTEMS, INC., in Count One with
violating Title 18, United States Code, Section 371, conspiracy to defraud the
United States and to commit conversion of government property and wire fraud.
Count Two charges LITTON SYSTEMS, INC. with violating Title 18, United States
Code, Section 641, conversion of government property. Count Three charges LITTON
SYSTEMS, INC. with violating Title 18, United States Code, Section 1343, wire
fraud. Each violation carries a maximum penalty of $500,000.
2. LITTON SYSTEMS, INC. hereby waives the presentence investigation and
report pursuant to Rule 32(c)(1) of the Federal Rules of Criminal Procedure. The
United States does not oppose such waiver.
3. The United States and LITTON SYSTEMS, INC. have agreed, subject to the
Court's approval, that LITTON SYSTEMS, INC. will pay a total criminal fine of
$1.5 million, i.e. $500,000 on each Count. LITTON SYSTEMS, INC. also agrees to
pay the assessment of $200.00 on each count as required by 18 U.S.C. sec. 3013.
4. Within fifteen days of the entry of the judgment of conviction LITTON
SYSTEMS, INC. agrees to pay, by wire transfer to the United States, civil claims
in the amount of $1.3 million and the sum of $1.1 million as reimbursement of
costs of investigation incurred by the FBI, DCIS, NIS, and the United States
Attorney's Office for the Eastern District of Virginia. Such payments, together
with the criminal fines referred to in paragraph 3 above (excluding assessments
under Title 18 U.S.C. sec. 3013), shall constitute a complete release and
satisfaction of all criminal restitution pursuant to Title 18 of the United
States Code, and all costs of investigation and prosecution for the conduct set
forth in the Information or any similar matter of which the United States
Attorney for the Eastern District of Virginia has knowledge at the time of the
execution of this Agreement and encompassed in the Illwind investigation.
5. The United States will close its criminal investigation of LITTON
SYSTEMS, INC., its divisions, subsidiaries, successors, assigns, affiliates or
parent thereof, for any violation of the United States Code relating to the
matters set forth in the Information or any similar matter of which the United
States Attorney for the Eastern District of Virginia has knowledge at the time
of the execution of this Agreement and is encompassed in the Illwind
investigation.
6. It is agreed that all costs (as defined in the Federal Acquisition
Regulations ("FAR") 31.205-47) incurred by or on behalf of LITTON SYSTEMS, INC.
and its subsidiaries, and their officers, directors, agents and employees in
connection with (1) the matters covered by this Plea Agreement, (2) the
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government's audit and investigation of the matters covered by this Plea
Agreement, (3) LITTON SYSTEMS, INC.'s investigation, defense of the matters, and
corrective actions, (4) the negotiation of this Plea Agreement, and (5) the
payment made to the United States pursuant to this Plea Agreement shall be
unallowable costs for government contract accounting purposes. These amounts
shall be separately accounted for by LITTON SYSTEMS, INC.. The matters covered
by this Plea Agreement include both civil and criminal matters relating to the
Illwind investigation of Litton Systems, Inc., and its subsidiaries, and their
officers, directors, agents and employees.
7. Subject to the entry of judgment and payment of the sums stipulated in
this Agreement, the United States releases and discharges LITTON SYSTEMS, INC.,
its divisions, subsidiaries, successors, assigns, affiliates or parent thereof,
from any civil claim or cause of action the United States has or may have under
the False Claims Act, 31 U.S.C. sections 3729-3733; the Program Fraud Civil
Remedies Act, 31 U.S.C. sections 3801-3812; the common law; or, for costs
incurred from 1982 through June 14, 1988, for any liability, damages, civil
penalties, or assessments in lieu of damages, or for any claim that contracts
are void or voidable; arising from the conduct set forth in the Information
identified in this Agreement, or for any other matter of which the United States
Attorney for the Eastern District of Virginia has knowledge at the time of the
execution of this Agreement, and encompassed in the Illwind investigation,
provided however, that this paragraph shall not preclude any action arising
under Title 26, United States Code (Internal Revenue Code), or which may be
brought by the U.S. Securities and Exchange Commission for any violation of the
federal securities laws or rules and regulations thereunder, provided further
that this paragraph does not constitute a release from any liability under the
contracts at issue in this Agreement for delivery of any deficient or defective
products, or from liability under any express or implied warranties pertinent to
these contracts; and provided further that this release does not constitute a
defense to, or release from, any liability or the amount of damages or civil
penalties in United States v. Litton Systems, Inc., CV-99-02276 MRP (C.D. Cal.).
8. The United States Attorney recognizes that before the Illwind
investigation became public, officers of LITTON SYSTEMS, INC. met with officials
of the Departments of Defense and Justice, and sought to clarify and change the
rules regarding the non-disclosure of certain types of government procurement
information, but not the information which the two Litton officials, knowing
that they were not authorized to receive it, were convicted of obtaining and
attempting to obtain.
9. The United States Attorney agrees to advise the Department of Defense of
this Agreement as well as the nature and extent of LITTON SYSTEMS, INC.'s,
activities with respect to this case. By this Agreement, the United States makes
no representation regarding suspension and debarment which are within the sole
authority of the Department of Defense.
10. It is agreed that if the Court refuses to accept any provision of this
Plea Agreement neither party is bound by any of the provisions of the Plea
Agreement, and no statement in this Plea Agreement or its attachments will be
admissible against either party in any proceeding.
11. No additional promises, agreements, or conditions other than those
referenced in this Plea Agreement have been entered into and none will be
entered unless in writing and signed by all parties.
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Respectfully submitted,
HELEN F. FAHEY
UNITED STATES ATTORNEY
By: /s/ Joseph J. Aronica
________________________________
Joseph J. Aronica
Virginia State Bar No. 2548
Jack I. Hanly
Virginia State Bar No. 23969
Assistant United States Attorneys
/s/ Judith Rabinowitz
____________________________________
JUDITH RABINOWITZ
Civil Division
U.S. Department of Justice
LITTON SYSTEMS, INC.
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By: /s/ Richard A. Sauber Dated: January 14, 1994
______________________________________ _______________________
Richard A. Sauber, Esquire
Fried, Frank, Harris, Shriver
& Jacobson
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