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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
AVONDALE INDUSTRIES, INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $1.00 PER SHARE
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(Title of Class of Securities)
054350103
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(CUSIP Number)
JOHN E. PRESTON, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
LITTON INDUSTRIES, INC.
21240 BURBANK BOULEVARD
WOODLAND HILLS, CA 91367
(818) 598-5000
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
JUNE 3, 1999
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box: [_].
(Continued on following pages)
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CUSIP NO. 538021106
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Litton Industries, Inc.
IRS # 95-1775499
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS WC, BK
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
[ ]
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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Number of 7. SOLE VOTING POWER
Shares 1,312,000 shares of common stock*
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Beneficially 8. SHARED VOTING POWER
Owned By 0
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Each 9. SOLE DISPOSITIVE POWER
Reporting 1,312,000 shares of common stock*
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Person With 10. SHARED DISPOSITIVE POWER
0
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,312,000*
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
[ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.0% of number of shares of common stock**
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14. TYPE OF REPORTING PERSON
CO
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* Represents the total number of shares of common stock that may be purchased
pursuant to an option granted by the Issuer as reported in this statement. Such
option is not currently exercisable and the Reporting Person does not have the
right to vote or dispose of the shares of common stock subject to the option.
The Reporting Person disclaims beneficial ownership of all such shares.
** Calculated as follows: 1,312,000 (the number of shares issuable upon exercise
of the option covered by this statement) divided by the sum of 1,312,000 plus
13,260,867 (the number of shares of Issuer common stock reported as outstanding
on March 31, 1999).
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ITEM 1. SECURITY AND ISSUER.
This statement relates to the common stock, par value $1.00 per share
("Company Common Stock"), of Avondale Industries, Inc., a Louisiana corporation
(the "Company"). The principal executive offices of the Company are located at
5100 River Road, Avondale, Louisiana 70094.
ITEM 2. IDENTITY AND BACKGROUND.
This statement is being filed by Litton Industries, Inc., a Delaware
corporation ("Parent"). The address of the principal business and principal
offices of Parent is 21240 Burbank Boulevard, Woodland Hills, California 91367.
Parent is a leader in worldwide technology markets for advanced electronic,
defense, and information systems, and is a designer and builder of surface
combatant ships for the U.S. Navy and allied nations.
The names of the directors and executive officers of Parent, their
citizenship and present principal occupations or employment are set forth on
Schedule I hereto, which Schedule is incorporated herein by reference. Neither
Parent nor, to the best of Parent's knowledge, any of the persons named on
Schedule I has, during the last five years: (i) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
If the Option (as defined below) were exercisable and Parent were to
exercise the Option on the date of this Schedule 13D, the funds required to
purchase the shares of Company Common Stock issuable upon exercise of the Option
would be $51,824,000. If Parent were to exercise the Option in full, it
currently anticipates that the funds necessary to pay the exercise price would
be provided, in part, from Parent's working capital and the balance would be
obtained through bank borrowings from one or more banks which have not been
identified. The Option is also exercisable under a "cash-out right" which would
allow Parent to obtain the financial value of the Option without the expenditure
of funds.
ITEM 4. PURPOSE OF TRANSACTION.
On June 3, 1999, Parent, ATL Acquisition Corporation, a Louisiana
corporation and a wholly owned subsidiary of Parent ("Sub"), and the Company
entered into an Agreement and Plan of Merger (the "Merger Agreement"), dated as
of such date. Pursuant to the terms of the Merger Agreement, Sub will be merged
with and into the Company (the "Merger"), with the Company surviving (the
"Surviving Corporation") as a wholly owned subsidiary of Parent. At the
Effective Time, each outstanding share of Company Common Stock will be converted
into the right to receive $39.50 in cash. Upon consummation of the Merger, the
Company Common Stock will be delisted from trading on The Nasdaq National
Market, on which it currently trades under the symbol "AVDL."
Concurrently with and as an inducement and condition to Parent's
entering into the Merger Agreement, Parent and the Company entered into a stock
option agreement (the
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"Company Stock Option Agreement") pursuant to which the Company granted Parent
the option (the "Option") to purchase up to 1,312,000 shares of Company Common
Stock (or such greater number as equals 9.9% of the then-outstanding shares of
Company Common Stock), at a purchase price of $39.50 per share.
Under the terms of the Company Stock Option Agreement, the Option is
exercisable only after a termination of the Merger Agreement in connection with
which Parent is or may be entitled to a termination fee pursuant to the terms of
the Merger Agreement. The Company Stock Option Agreement provides that the
Notional Total Option Profit (as defined in such agreement) that Parent may
realize from the option granted pursuant thereto may not exceed $14,000,000. All
references to the Company Stock Option Agreement are qualified in their entirety
by the full text of such agreement, which is filed herewith as Exhibit 2 and
incorporated by reference herein.
In accordance with the terms of the Merger Agreement, Parent reimbursed
the Company for the full amount of a $15,000,000 termination fee paid by the
Company to Newport News Shipbuilding, Inc., a Delaware corporation ("Newport
News"), in connection with the termination of the merger agreement, dated as of
January 19, 1999, among the Company, Newport News and a subsidiary of Newport
News. Parent also agreed to pay to Newport News, on behalf of the Company, any
cash amounts that become payable to Newport News pursuant to a stock option
agreement, dated as of January 19, 1999, between the Company and Newport News
(the "Newport News Option Agreement"), not to exceed $14,000,000 in the
aggregate.
On June 3, 1999, Newport News notified the Company of its intention to
exercise a cash-out right under the Newport News Option Agreement. Pursuant to
this exercise, the amount of $5,248,000 became payable to Newport News by the
Company, and pursuant to the Merger Agreement, Parent made such payment (which
was in full satisfaction of all of the Company's obligations under the Newport
News Option Agreement) to Newport News on the Company's behalf on June 8, 1999.
Consummation of the Merger is subject to the satisfaction or waiver of
the conditions to closing set forth in the Merger Agreement, including, among
other things, (i) approval by shareholders of the Company, (ii) obtaining
certain regulatory approvals and (iii) other customary closing conditions. The
consummation of the Merger is expected to occur in the third quarter of calendar
year 1999.
Pursuant to the Merger, the directors of Sub immediately prior to the
time at which a certificate of merger is filed with the Secretary of State of
Louisiana (the "Effective Time") shall be the directors of the Surviving
Corporation until the earlier of their resignation or removal, or until their
respective successors are duly elected or appointed and qualified. The officers
of the Company immediately prior to the Effective Time shall continue as
officers of the Surviving Corporation until the earlier of their resignation or
removal, or until their respective successors are duly elected or appointed and
qualified.
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ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
A total of 1,312,000 shares of Company Common Stock may be purchased by
Parent upon the exercise of the Option, which would represent approximately 9.0%
of the shares of Company Common Stock outstanding upon exercise of the Option
(based on the sum of the number of shares of Company Common Stock outstanding
and the number of shares of Company Common Stock issuable pursuant to the
Option). The Option is not currently exercisable and Parent has no right to vote
or dispose of the shares of Company Common Stock subject to the Option.
Accordingly, Parent expressly disclaims beneficial ownership of all such shares.
Except as described herein, neither Parent nor, to the best of Parent's
knowledge, any other person referred to in Schedule I, beneficially owns or has
acquired or disposed of any shares of Company Common Stock during the past 60
days. If Parent were to exercise the Option, it would have sole power to vote
and, subject to the terms of the Company Stock Option Agreement, sole power to
direct the disposition of the shares of Company Common Stock issuable pursuant
to the Option.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Except as described in Item 4 and Item 5 of this Schedule 13D, neither
Parent nor, to the best of its knowledge, any of the persons listed on Schedule
I, has any contract, arrangement, understanding or relationship (legal or
otherwise) with any person with respect to any securities of the Company,
including, but not limited to, the transfer or voting of any of the securities,
finder's fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or losses, or the giving or
withholding of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
1. Agreement and Plan of Merger, dated as of June 3, 1999, among
Litton Industries, Inc., ATL Acquisition Corporation and Avondale
Industries, Inc. (incorporated by reference to Exhibit 2.1 to the
Current Report on Form 8-K of Litton Industries, Inc. filed on
June 11, 1999).
2. Company Stock Option Agreement, dated as of June 3, 1999, between
Litton Industries, Inc. and Avondale Industries, Inc. (incorporated by
reference to Exhibit 2.2 to the Current Report on Form 8-K of Litton
Industries, Inc. filed on June 11, 1999).
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: June 11, 1999
By: /s/ John E. Preston
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Name: John E. Preston
Title: Senior Vice President and
General Counsel
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EXHIBIT INDEX
Exhibit No. Description
Exhibit 1 Agreement and Plan of Merger, dated as of June 3, 1999, among
Litton Industries, Inc., ATL Acquisition Corporation, and Avondale
Industries, Inc. (incorporated by reference to Exhibit 2.1 to the
Current Report on Form 8-K of Litton Industries, Inc. filed on
June 11, 1999.)
Exhibit 2 Company Stock Option Agreement, dated as of June 3, 1999, between
Avondale Industries, Inc. and Litton Industries, Inc.
(incorporated by reference to Exhibit 2.2 to the Current Report on
Form 8-K of Litton Industries, Inc. filed on June 11, 1999.)
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SCHEDULE 1
DIRECTORS AND EXECUTIVE OFFICERS OF LITTON INDUSTRIES, INC.
The names, present principal occupations and business addresses of the directors
and executive officers of Litton Industries, Inc. are set forth below. Unless
otherwise indicated, all directors and officers listed below are citizens of the
United States.
ITEM 1 DIRECTORS
Alton J. Brann Chairman and Chief Executive Officer of UNOVA, Inc.
21900 Burbank Boulevard, Woodland Hills, CA 91367
Michael R. Brown Chairman, President and Chief Executive Officer of
Litton Industries, Inc.
21240 Burbank Boulevard, Woodland Hills, CA 91367
Joseph T. Casey Retired Vice Chairman and Chief Financial Officer of
Western Atlas Inc.
21240 Burbank Boulevard, Woodland Hills, CA 91367
Carol B. Hallett President and Chief Executive Officer of Air Transport
Association of America
1301 Pennsylvania Avenue, N.W., Washington, DC 20004
Orion L. Hoch Chairman Emeritus of Litton Industries, Inc.
21240 Burbank Boulevard, Woodland Hills, CA 91367
David E. Jeremiah President and Chief Executive Officer of Technology
Strategies & Alliances
5242 Lyngate Court, Burke, VA 22015
John M. Leonis Chairman Emeritus of Litton Industries, Inc.
21240 Burbank Boulevard, Woodland Hills, CA 91367
William P. Sommers Retired President and Chief Executive Officer of SRI
International
21240 Burbank Boulevard, Woodland Hills, CA 91367
C. B. Thornton, Jr. President of Thornton Corporation
523 West Sixth Street, Suite 636,
Los Angeles, CA 90014
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ITEM 2 EXECUTIVE OFFICERS
The business address of each of the following executive officers is 21240
Burbank Boulevard, Woodland Hills, CA 91637.
Michael R. Brown Chairman, President and Chief Executive Officer
Harry Halamandaris Executive Vice President and Chief Operating Officer
Michael D. Steuert Senior Vice President and Chief Financial Officer
John E. Preston Senior Vice President and General Counsel
Larry A. Frame Senior Vice President
Donald A. Lepore Senior Vice President
Alden V. Munson Senior Vice President
Gerald J. St. Pe Senior Vice President
Timothy J. Paulson Vice President and Treasurer
Carol A. Wiesner Vice President and Controller
