Registration No. 333-77045
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
AMENDMENT NO. 3
TO FORM S-3 CONVERTED TO
FORM S-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------
COMPTEK RESEARCH, INC.
- ---------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
NEW YORK 16-0959023
- -------------------------------- --------------------
(State or other Jurisdiction of (IRS
Employer
Incorporation or Organization)
Identification No.)
2732 TRANSIT ROAD
BUFFALO, NEW YORK 14224-2523
(716) 677-4070
- ----------------------------------------------------------------
(Address, including zip code, and telephone number, including
area code of Registrant's Principal Executive Offices)
------------------------
CHRISTOPHER A. HEAD, ESQ.
COMPTEK RESEARCH, INC.
2732 TRANSIT ROAD
BUFFALO, NEW YORK 14224-2523
(716) 677-4070
- ----------------------------------------------------------------
(Address, including zip code, and telephone number,
including area code, of agent for service)
______________________________
Copies to:
JAMES R. TANENBAUM, ESQ.
STROOCK & STROOCK & LAVAN, LLP
180 MAIDEN LANE
NEW YORK, NY 10038
<PAGE i>
Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME AFTER THIS REGISTRATION STATEMENT BECOMES
EFFECTIVE.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
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(c) under the Securities Act of 1933, 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(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier
effective registration statements for the same offering. [ ]
If delivery of this Prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
<PAGE ii>
<ITALIC><BOLD>
Calculation Of
Registration
Fee</ITALIC></
BOLD>
Proposed Proposed
Maximum Maximum Amount
Title of each Amount to Offering Aggregate of
class of be Price Per Offering Registra
Securities to Registered Security(1) Price tion Fee
be Registered
- -----------------------------------------------------------------------
8 1/2%
Convertible
Subordinated
Debentures due
2004 $15,000,000 100% $15,000,000 $4,170(3)
Common Stock,
par value $.02
per share 1,578,947(2) --- --- ---
(1) Equals the aggregate principal amount of the securities being
registered.
(2) This represents the number of shares of common stock that are
currently issuable upon conversion of the debentures based upon
a conversion rate of $9.50 per share. In addition, pursuant to
Rule 416 under the Securities Act, the registrant is also
registering such indeterminate number of shares of common stock
as may be issued from time to time upon conversion of the
debentures as a result of the anti-dilution protection of the
debentures. Pursuant to Rule 457(i), no registration fee is
required for these shares.
(3) Previously paid.
<ITALIC>The registrant hereby undertakes to amend 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 SEC, acting pursuant to said Section 8(a), may
determine.</ITALIC>
<PAGE iii>
<BOLD><ITALIC>Prospectus
The information in this prospectus is not complete and may be
changed. The selling security holders may not sell these
securities until the registration statement, filed with the
Securities and Exchange Commission, is effective. This
prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any state where
the offer of sale is not permitted
Subject To Completion, Dated August ___, 1999
Comptek Research, Inc.
$15,000,000
8 1/2% Convertible Subordinated Debentures Due 2004
and
1,578,947 Shares Of Common Stock Issuable Upon Conversion Of The
Debentures</BOLD></ITALIC>
The selling security holders, as listed on page 23, are
offering for sale our 8 1/2% convertible subordinated debentures
and shares of our common stock into which the debentures are
convertible. The debentures and the shares are being offered on a
continuous basis until at least August __, 2001 or the earlier
sale of all the debentures and shares of common stock.
The debentures and shares of common stock may be sold at market
prices prevailing at the time of sale or at privately negotiated
prices.
On August 2, 1999, the closing price of our common stock on
the American Stock Exchange symbol "CTK" was $8.1875 per share.
We do not intend to apply for listing of the debentures on any
securities exchange or for quotation through any automated
quotation system.
Eight and one-half percent (8 1/2%) annual interest is payable on
the debentures on October 1 and April 1 each year, beginning
October 1, 1999 until converted to common stock or maturity at
April 1, 2004. The debentures are convertible into shares of
common stock at the rate of $9.50 per share, subject to
adjustments in certain events.
<BOLD><ITALIC>Investing in the debentures or the common stock
into which the debentures are convertible involves a high degree
of risk. See "Risk Factors" commencing on page 6 for a
discussion of some important risks you should consider before
buying any debentures or any shares of common stock.
Neither the Securities and Exchange Commission nor any state
securities commission 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.</BOLD>
The date of this Prospectus is August __, 1999 </ITALIC>
<PAGE 1>
<ITALIC><BOLD>Table Of Contents</BOLD>
About This Prospectus 3
Summary 4
Risk Factors 6
Forward-Looking Information 9
Use Of Proceeds 9
Ratio Of Earnings To Fixed Charges 9
Recent Developments 9
Description Of Debentures 12
Description of Capital Stock 20
Selling Security Holders 22
Plan Of Distribution 24
Legal Matters 26
Experts 26
How To Obtain More Information 26</ITALIC>
<PAGE 2>
<BOLD>About This Prospectus</BOLD>
You should rely only on the information incorporated by reference
or provided in this prospectus or any prospectus supplement. We
have not authorized anyone else to provide you with different
information. The selling security holders 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 or any prospectus supplement is accurate as of any
date other than the date on the front of the document. This
prospectus is accompanied by a copy of Comptek's Form 10-K Annual
Report for the year ended March 31, 1999.
In this prospectus, references to "we," "us," "our," and
"Comptek" refer to Comptek Research, Inc. and its subsidiaries,
unless the context otherwise requires, and not to the selling
security holders.
<PAGE 3>
<ITALIC><BOLD>Summary</BOLD>
This summary highlights information contained in this prospectus
or incorporated by reference into this prospectus from our
current filings with the SEC.</ITALIC>
Overview
Comptek develops and integrates surveillance and communications
systems used primarily for military applications. We provide
engineering and project management services for electronic
warfare systems. Our products and services enhance the
operational performance and readiness of existing weapons
systems, as well as extend their useful lives and survivability.
We have been involved in either the development, lifecycle
support or testing of nearly all of the major electronic warfare
systems that have been fielded by either the United States Air
Force or United States Navy since 1974, including systems for B-
1B Lancer and B-2A Spirit bombers; EF-111 Raven, EA-6B Prowler
and F/A-18 Hornet aircraft; and navy surface combatants including
AEGIS class destroyers and cruisers.
Our primary activities are:
* Tactical Systems. Comptek is a leading supplier of
electronic warfare systems used for the processing of intercepted
radar signals, threat analysis and counter measures. We also
provides command and control, mission planning and air combat
measurement instrumentation systems.
* Electronic Warfare Simulation/Stimulation and Training. We
specialize in the design, development and manufacture of
electronic environment simulators. We supply stimulators used to
test military electronics surveillance, equipment including
electronic warfare systems, radar warning receivers and
electronic counter-measures equipment.
* Engineering and Technical Services. We provide a wide range
of technical and engineering services, including systems design
and integration, software development and test, project
management and support for the design, operation, maintenance and
upgrade of weapon and information systems.
Our customers include the U.S. Department of Defense, all of the
branches of the United States Armed Forces, and certain foreign
governments. Our present prime contractor relationships include
the Boeing Company, GEC-Marconi Hazeltine Corporation, Lockheed
Martin Corporation, Northrop Grumman Corporation and the Raytheon
Company. International customers include the foreign governments
of Australia, Canada, France, Germany, Israel, Italy, Japan,
Sweden, Switzerland and the United Kingdom.
Expansion through acquisitions and increased international
activities have both been, and continue to be, important elements
of our business strategy. Over the last three years, we have
acquired three private companies. In March 1996, we acquired
Advanced Systems Development, Inc., a highly-specialized
developer of electronic warfare simulation/stimulation, training
and software validation systems related to electronic
surveillance. Largely as a result of the acquisition of Advanced
Systems Development, Inc., we substantially increased our
presence in international markets. Effective May 1, 1998, we
completed our acquisition of PRB Associates, Inc., a leader in
the development of military mission-planning and precision-
targeting systems. On March 26, 1999, we completed the purchase
of the business operations and substantially all of the related
assets and liabilities of Amherst Systems, Inc., a firm
specializing in simulation/stimulation and evaluation systems for
electronic defense applications. We paid a purchase price of $30
million and assumed Amherst Systems's long-term debt of $5.1
million. We paid the purchase price by delivering to Amherst
Systems $20 million in cash and $10 million in subordinated
promissory notes of Comptek.
<PAGE 4>
Comptek's executive offices are located at 2732 Transit Road,
Buffalo, New York 14224-2423. Our telephone number is (716) 677-
4070.
We maintain a Web site at http://www.comptek.com. Information
contained on our Web site, however, is not part of this
prospectus.
Summary of the Debentures and Common Stock Offered By Selling
Security Holders
Securities $15,000,000 aggregate principal amount of
Offered 8 1/2% Convertible Subordinated Debentures,
$1,000 par value, due 2004. See
"Description of Debentures."
1,578,947 shares of common stock issuable
upon conversion of the debentures.
Interest Rate 8 1/2% payable semi-annually in arrears.
Interest October 1 and April 1, commencing October
Payment Dates 1, 1999.
Maturity April 1, 2004.
Conversion The debentures are convertible into shares
of common stock of Comptek.
Conversion The debentures are convertible at a
Price conversion price of $9.50, subject to
adjustment as described herein, including
an adjustment if Comptek reports income
before extraordinary item and accounting
change diluted earnings per share of less
than $0.80 for its fiscal year ending
March 31, 2000. In such case, the
conversion price will be reset to $8.50
per share. See "Description of Debentures
- Conversion Rights."
Redemption The debentures are not redeemable by
Comptek prior to March 1, 2002.
Thereafter, the debentures will be
redeemable at Comptek's option at any
time, in whole or in part, together with
accrued and unpaid interest, as follows:
On or after: Premium:
March 1, 2002 103.4%
March 1, 2003 101.7%
March 1, 2004 and thereafter 100.0%
See "Description of Debentures - Optional
Redemption."
Change of Upon a change of control of Comptek, each
Control holder of the debentures may require us to
repurchase the debenture held by such
holder at 101% of the principal amount
thereof plus accrued and unpaid interest
to the date of repurchase. The term
"Change of Control" is defined in the
"Description of Debentures - Certain
Rights to Require Repurchase of Debentures
by the Company."
Ranking The debentures are unsecured and
subordinated to all senior indebtedness.
See "Description of Debentures -
Subordination of Debentures."
Use of Proceeds Comptek will not receive any of the
proceeds from the sale by selling security
holders of the debentures or the
underlying common stock.
<PAGE 5>
<BOLD><ITALIC>Risk Factors
You should carefully consider the risks and uncertainties
described below and the other information in this prospectus and
in any documents incorporated in the prospectus, before making an
investment decision.</ITALIC>
Because we are dependent on future military spending and
substantially all of our sales are derived from military
requirements any decrease in military spending may reduce our
sales and profits.</BOLD>
We are subject to changes in national defense policies and
priorities and changes in government appropriations. In recent
years, a reduction in the defense budgets of many countries has
caused many defense-related government contractors to experience
declining revenues. There can be no assurance that a continued
decline in worldwide military spending will not affect our
ability to increase revenues and may result in declines in future
revenues and may have a material adverse impact on our business,
financial condition or results of operations.
<BOLD>We are heavily dependent on U.S. Government contracts and
as a U.S. Government contractor we are subject to specialized
rules and regulations. Failure to comply with these rules and
regulations could cause us to lose contracts or bids.</BOLD>
Historically in excess of 85.0% of our revenues have been
attributable to contracts with departments and agencies of the
U.S. Government, specifically the Department of Defense. As a
contractor and subcontractor to the U.S. Government, we are
subject to various laws and regulations that are more restrictive
than those applicable to non-government contractors. U.S.
Government contracts are subject to special risks, such as:
* delay in funding;
* early termination;
* reduction or modification due to changes in policies or as
the result of budgetary constraints, political changes or other
factors that do not depend on Comptek;
* the U.S. Government's rights to technical data and to audit
financial data; and
* the ability of U.S. Government and its agencies unilaterally
to suspend contractors from receiving new contracts pending
resolution of alleged violations of procurement laws or
regulations.
Government agencies often have complex and time-consuming
procurement procedures. We generally obtain military contracts
through a competitive bidding process in which, in many
instances, numerous bidders participate. There can be no
assurance that we will continue to be successful in having our
bids accepted which would affect our ability to increase revenues
and may result in declines in future revenues.
<BOLD>Our risk of sustaining a loss is greater with a fixed-price
contract as opposed to a cost-plus contract. Our percentage of
fixed-price contracts is increasing.</BOLD>
For the fiscal year ended March 31, 1999, approximately 29.0% of
our sales were recorded on fixed-price contracts, as opposed to
cost-plus or cost-sharing contracts. Under fixed-price
contracts, we assume the risk that increased or unexpected costs
may reduce profits or cause a loss. To the extent that actual
costs exceed the projected costs on which bids or contract prices
are based, Comptek could sustain a loss under the contract.
Since a majority of the contracts we acquired from Amherst
Systems, Inc. are fixed-price, we
<PAGE 6>
expect the percentage of fixed-
price work to increase and therefore increase our exposure to
potential losses on individual contracts. For the fiscal year
ended March 31, 1999, as adjusted to give effect to the business
operations acquired from Amherst Systems, 40.2% of the our sales
would have been fixed-price.
<BOLD>The integration of our recent acquisitions and the making
of future acquisitions could adversely impact our current
operations by diverting managements attention from our existing
operations and by leveraging our balance sheet.</BOLD>
Our acquisitions of Advanced Systems Development in March 1996,
of PRB Associates in May 1998, and of the business operations of
Amherst Systems in March 1999 are part of a business development
strategy which seeks internally- and externally-generated sales
growth in niche markets. While there are currently no
commitments with respect to any future acquisitions, we
frequently evaluate the strategic opportunities available to us
and expect to pursue acquisitions of additional complementary
products, technologies or businesses. Such acquisitions may
result in the diversion of our attention from the day-to-day
business operations and may include numerous other risks,
including:
* difficulties in the integration of the operations and
products;
* integration and retention of personnel of the acquired
companies; and
* financial risks.
Future acquisitions by us may result in:
* dilutive issuances of equity securities;
* the incurrence of additional debt;
* reduction of existing cash balances; and
* amortization expenses related to goodwill and other
intangible assets and other charges to operations.
<BOLD>To service our substantial debt and make future
acquisitions, we will require a significant amount of cash. Our
ability to generate cash and borrow on acceptable terms depends
on many factors beyond our control. Failure to secure future
financing will hamper our ability to grow revenues and make
future acquisitions.</BOLD>
At March 31, 1999, our bank debt was $26.1 million and our total
funded debt was $53.6 million. Our future growth will depend in
part on additional acquisitions and our ability to obtain
additional financing on acceptable terms. We will from time to
time seek additional funding through public or private financing,
including equity or debt financing. If additional funds are
raised by issuing equity securities, our stockholders may
experience dilution. There can be no assurance that we will be
successful in securing additional financing or that adequate
funding will be available and, if available, will be on terms
that are acceptable to us. Further, debt may continue to
increase and there can be no assurance that we will generate
sufficient cash flow to meet our principal and interest payment
obligations.
<BOLD>Our ability to sell products and services internationally
are subject to U.S. Government export controls that could
prevent, or significantly delay, our making international
sales.</BOLD>
We have recently placed greater emphasis on international sales
and have increased marketing expenses in order to compete in
international markets. Our products and services are subject to
export control regulations of the U.S. Government. In most
instances a specific export license is required for the sale of
our products and services directly to international customers.
Failure to receive, or a delay in receiving,
<PAGE 7>
these export
licenses would greatly limit our ability to increase sales.
Direct sales to foreign governments and international customers
were 12.8% of total sales in fiscal 1999.
<BOLD>In addition to competing against large defense contractors
with greater financial resources we also have many small
competitors that receive certain preference in bidding for which
we do not qualify. In some situations, our status puts us at a
competitive disadvantage in bidding for contracts.</BOLD>
The defense industry is dominated by several large companies, all
of whom have much greater resources than we have. These
competitors include the Boeing Company, Lockheed Martin
Corporation, Raytheon Company, GEC-Marconi Hazeltine Corporation,
Northrop Grumman Corporation, United Industrial Corporation,
Unisys Corporation, Computer Sciences Corporation, TRW, Inc., and
Condor Systems, Inc. The size and reputation of many of these
companies may give them an advantage in competing for contracts.
We also compete with several small companies that can sometimes
take advantage of special government programs, such as small
business and small disadvantaged business set-asides whereby
competition is limited to qualifying small and small
disadvantaged businesses. In fiscal 1998 and earlier, we were
able to qualify for small business status when the standard used
was 750 employees or less. As a result of our acquisition of PRB
Associates, Inc. in May 1998, our total number of employees
increased to approximately 900, which is likely to result in our
not qualifying for small business status in most circumstances,
except where that standard used is 1,500 employees or less. As a
result of the acquisition of Amherst Systems, Inc., we now have
approximately 1,200 employees. Since we no longer qualify for
these bidding preferences, our competitive bidding position has
been affected and, in certain instances makes it more difficult
for us to win new contracts.
<BOLD>The debentures are subordinated to our current senior
indebtedness and all of future senior indebtedness. If we were
to liquidate, holders of the debentures may receive significantly
less than the face value of the debentures.</BOLD>
The debentures are expressly subordinated in right of payment to
all of our existing and future senior indebtedness, which
includes current and future borrowing under our bank line of
credit recently increased to $27.0 million. As of March 31, 1999
our senior indebtedness was $26.1 million. Neither the
provisions of the indenture nor the debentures limit our ability
to incur additional senior indebtedness or other indebtedness.
The indenture and the debentures do not contain any financial
covenants or similar restrictions on us. Therefore, the holders
of the debentures will have no protection, other than rights upon
"Events of Default" as described under "Description of
Debentures," from adverse changes in our financial condition. In
the event of insolvency, bankruptcy, liquidation, reorganization,
dissolution or winding up of our business or upon our default in
payment with respect to any indebtedness our assets will be
available to pay the amounts due on the debentures only after all
senior indebtedness has been paid in full.
<BOLD>A failure of our computer programs, or the computer
programs of our customers or suppliers, to correctly recognize
the Year 2000 could have a material adverse impact on our
business.</BOLD>
Numerous business publications and government reports have
alerted businesses and investors to the potential adverse impact
of computer programs failing to correctly recognize the Year
2000, a situation commonly referred to as the "Year 2000 Issue"
or the "Year 2000 Problem." We believe we are adequately
addressing modification or replacement of our internal operating
systems and our products. We do not currently anticipate that we
will incur material expenditures to complete any such
modification or replacement because we believe that a majority of
our systems and products are Year 2000 compliant, although there
can be no assurance in this regard. A failure of suppliers or
customers to successfully address the Year 2000 Issue, however,
could have a material adverse impact on our business, financial
condition or results of operations. The Department of Defense
and its agencies are our largest customer group, representing
87.2% of our fiscal 1999 net sales. A failure by the Department
of Defense to adequately address the Year 2000 Problem could,
among other things, result in payment delays and
<PAGE 8>
contract
administration delays which may result in a need for increased
borrowing and interest expense to satisfy our operational and
capital expenditure needs.
<BOLD>There is currently no liquid market for the debentures and,
since we do not intend to list the debentures on any exchange, we
do not anticipate one will develop. Without a liquid trading
market, holders of the debentures may have difficulty selling the
debentures.</BOLD>
There has been no public market for the debentures, and we
believe it is unlikely that an active or liquid trading market
will develop or be sustained.
<BOLD><ITALIC>Forward-Looking Information/BOLD></ITALIC>
This prospectus includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
This Act provides a "safe harbor" for forward-looking statements
to encourage companies to provide prospective information about
themselves so long as they identify these statements as forward-
looking and provide meaningful cautionary statements identifying
important factors that could cause actual results to differ from
the projected results. All statements other than statements of
historical fact we make in the prospectus or in any document
incorporated by reference are forward-looking. In particular,
the statements herein regarding industry prospects and our future
results of operations or financial position are forward-looking
statements. Forward-looking statements reflect our current
expectations and are inherently uncertain. Our actual results
may differ significantly from our expectations. The above
section entitled "Risk Factors" describes some, but not all, of
the factors that could cause these differences.
<BOLD><ITALIC>Use Of Proceeds</BOLD></ITALIC>
Comptek will not receive any proceeds from the sale by any
selling security holder of the debentures or the underlying
common stock.
<BOLD><ITALIC>Ratio Of Earnings To Fixed Charges</BOLD></ITALIC>
The ratio of earnings to fixed charges for each of the periods
indicated is as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
Fiscal Year Ended March 31,
1995 1996 1997 1998 1999
--------------------------------
Ratio of
earnings
(loss) to
fixed charges . . . - - 4.1x 5.5x 3.2x
</TABLE>
In fiscal 1994, 1995 and 1996 fixed charges exceeded earnings by
$7.5 million, $1.1 million and $8.3 million, respectively.
For these ratios, "earnings (loss)" represents income or loss
before taxes plus fixed charges. Fixed charges consist of
interest expense, including amortization of debt issuance costs,
and that portion of rental expense we believe to be
representative of interest.
<BOLD><ITALIC>Recent Developments</BOLD></ITALIC>
In March 1999, we sold $15 million of 8 1/2% convertible
subordinated debentures in a private placement pursuant to
Regulation D under the Securities Act. We used the net proceeds
of the sale, approximately $13.8 million, as part of the purchase
price of our acquisition of the business operations and related
assets
<PAGE 9>
and liabilities of Amherst Systems, Inc. We paid a
purchase price of $30 million and assumed long-term debt of $5.1
million. We paid the purchase price by delivering to Amherst
Systems $20 million in cash and $10 million in subordinated
promissory notes of Comptek. These promissory notes, which
mature on March 26, 2001, bear interest at the rate of 5.5% per
year compounded annually, payable at maturity. The promissory
notes are unsecured and subordinated to Comptek's senior
indebtedness and the debentures. At maturity, however, the
promissory notes may be replaced by indebtedness which would be
senior to the debentures.
Amherst Systems is a manufacturer of computer controlled
simulation/stimulation equipment and systems which are used to
test military avionics equipment including radar warning
receivers, radar counter-measures equipment, radars, and infrared
sensor systems. These systems are also used to train electronic
warfare systems operators. Amherst Systems also produces
receiver systems used to verify simulation environments. Amherst
Systems has expertise in the development of large computer
programs for real-time processing, the design of high speed
digital processing hardware, the generation of embedded software
for digital signal processors, the development of wide band
microwave systems, and the development of microwave components.
Amherst Systems has experienced growth in its systems sales as
the systems it tests have grown more accurate and complex
necessitating a corresponding increase in the sophistication of
the Amherst Systems test equipment. Other factors driving growth
include the increase in sales of new products ranging from
portable units to very large systems installed in test
facilities, systems integration work and sales to overseas
customers. Sales for the eight months ended December 31, 1998
and for the fiscal year ended April 30, 1998, were $29.2 million
and $31.6 million, respectively. Amherst Systems customers
include the U.S. Air Force, Navy, and Army and major aerospace
prime contractors such as Lockheed, Boeing, and Northrop Grumman.
Amherst Systems' contract backlog as of March 31, 1999 was $63.7
million, of which $57.2 million was funded.
<BOLD>Summary Pro Forma Financial Data</BOLD>
* The following table presents unaudited pro forma summary
financial data as of the dates indicated giving effect to the
following transactions 1) the acquisition of PRB Associates; 2)
the acquisition of the business operations of Amherst Systems;
and 3) the sale of debentures. The pro forma statement of
operations for the year ended March 31, 1998, gives effect to the
acquisition of PRB Associates, the acquisition of the business
operations of Amherst systems, and the sale of debentures as if
all of these transactions had occurred on April 1, 1997. For
this purpose, the historical financial statements of PRB for its
year ended December 31, 1997, and of Amherst for its year ended
April 30, 1998, have been used together with Comptek's
consolidated financial statements for the year ended March 31,
1998.
* The pro forma statement of operations for the nine
months ended December 25, 1998, gives effect to the acquisition of
the business operations of Amherst Systems and the sale of
debentures as if the acquisition had occurred on April 1, 1997.
Comptek's historical financial statements as of December 25, 1998,
already reflect the acquisition of PRB from May 1, 1998, and
accordingly, required the addition of PRB results for a one month
period through a pro forma adjustment to the financial
statements. The historical consolidated financial statements of
Amherst for the 8 months ended December 31, 1998, have been used
in this pro forma and, accordingly, required the addition of
Amherst results for a one month period through a pro forma
adjustment.
* No pro forma balance sheet data is provided as the effect of
the related transactions are already included in our historical
March 31, 1999, consolidated balance sheet.
<PAGE 10>
<TABLE>
<CAPTION>
Pro Forma
Year Ended March 31,
1998
----------------------
Pro Forma
Including Nine
Before Amherst Months
Amherst Acquisition Ended
Acquisi- and Sale of December
tion Debentures 25, 1998
---------------------------------
<S> <C> <C>
Statement of Operations
Data:
Net sales $101,300 $132,944 $105,409
Gross Margins 19,994 27,202 25,591
Selling, general and 11,793 16,889 14,790
administrative
Research and development 1,827 3,979 4,152
Other income 144 144 -
-------- -------- --------
Operating profit 6,518 6,478 6,649
Interest expense , net (1,651) (4,320) (3,399)
Minority interest (13) (13) -
-------- -------- --------
Income from continuing
operations before
income taxes 4,854 2,145 3,250
Income taxes (2,002) (589) (1,010)
-------- -------- --------
Income from continuing
operations $2,852 $1,556 $2,240
======== ======== ========
Basic earnings per share $0.55 $0.30 $0.45
Diluted earnings per share $0.54 $0.29 $0.43
Weighted average shares 5,184 5,184 5,027
outstanding - basic
Weighted average shares 5,316 5,316 5,203
outstanding - diluted
Other Data:
Depreciation and $3,138 $5,812 $2,942
amortization
Capital expenditures $2,502 $4,550 1,833
Ratio of earnings to fixed 2.8 1.4 1.8
charges
Contract backlog $165,271 $210,771 212,679
</TABLE>
<PAGE 11>
<BOLD><ITALIC>Description Of Debentures</BOLD></ITALIC>
The 8 1/2% convertible subordinated debentures were issued under
an indenture, dated as of March 24, 1999, between Comptek and The
Bank of New York, as the trustee under the indenture. The terms
of the debentures include those stated in the indenture and those
made a part of the indenture by reference to the Trust Indenture
Act of 1939.
A form of the debentures and the indenture are included as an
exhibit to the registration statement, and include the
definitions of certain terms to which we make reference in this
section. This prospectus is only a part of the registration
statement, which is on file with the SEC. Prior to purchasing
any debentures, we strongly recommend that you read the form of
debenture and the indenture in their entirety.
General
The debentures are unsecured subordinated general obligations of
Comptek, and convertible into our common stock as described under
"Conversion Rights" below. The debentures will mature on April
1, 2004. The debentures bear interest at a rate of 8 1/2% per year.
We pay interest semiannually on April 1 and October 1 of each
year. The first interest payment will be for the period from the
date we issued the debentures to October 1, 1999. We will pay
interest on the debentures to the persons who are registered
holders of debentures at the close of business on the September
15 or March 15 preceding the applicable interest payment date.
Initially, the offices of the trustee will serve as the location
for:
a) payment of principal, premium, if any, and interest;
b) conversion and transfer of the debentures; and
c) registration of any transfer.
We may, however, maintain another location for these purposes in
the future We may pay principal and interest by check and may
mail an interest check to a holder's registered address. Holders
must surrender debentures to a paying agent to collect principal
payments.
Initially, The Bank of New York will act as paying agent,
registrar and conversion agent. At our discretion, we may change
any paying agent, registrar, conversion agent or co-registrar ,
or we may act in any such capacity ourselves.
Form of Debentures
The debentures are in fully registered form without coupons in
denominations of $1,000 or any multiples thereof. A holder may
transfer or exchange debentures in accordance with the indenture.
No service charge will be made for:
* any registration or transfer, exchange or conversion of
debentures;
* tax or other governmental charges that may be imposed;
* transfer or exchange any debentures selected for redemption.
<PAGE 12>
Also, in the event of a partial redemption, the registrar need
not transfer or exchange any debentures for a period of 15 days
before selecting debentures to be redeemed. Except as described
in "Certain Rights to Require Repurchase of Debentures by the
Company" below, the indenture does require us to repurchase the
debentures in the event of a leveraged buyout, recapitalization
or similar restructuring of Comptek. Any of these events could
negatively impact our credit worthiness and the market value of
the debentures may decline significantly as a result. The
indenture does not protect holders of the debentures against any
decline in our credit quality. The registered holder of a
debenture may be treated as its owner for all purposes.
Conversion Rights
If the debentures have not been redeemed or called for
redemption, the holders of the debentures are entitled at any
time prior to maturity, to convert any or all of the into shares
of our common stock at the conversion price of $9.50 per share.
This conversion price is subject to adjustments as described
below and conversion must be made in $1,000 amounts or multiples
thereof. No payment or adjustment will be made for accrued
interest on a converted debenture. If any debenture not called
for redemption is converted between a record date for the payment
of interest and the next succeeding interest payment date, the
relevant debenture must be accompanied by funds equal to the
interest payable to the registered holder on the next interest
payment date on the principal amount to be converted. We will
not issue fractional interests in shares of common stock upon
conversion of the debentures and instead will deliver a check to
the debenture holder equal to the fractional share multiples the
market value of the common stock on the last trading date prior
to the conversion date. If the debentures are called for
redemption, any holders right to convert the debenture into our
common stock will expire at the close of business on the
redemption date, unless we default in payment due upon such
redemption.
The conversion price is subject to adjustments in certain events,
including:
* the payment of dividends or distributions on our common
stock in shares of capital stock;
* subdivisions or combinations of our common stock into a
greater or smaller number of shares of common stock;
* reclassification of the shares of our common stock resulting
in an issuance of any shares of our capital stock;
* distribution of rights or warrants to all holders of our
common stock entitling them to purchase common stock at less than
the then current price at that time; and
* the distribution to all holders of common stock of assets,
excluding certain cash dividends and distributions, or debt
securities or any rights or warrants to purchase securities of
Comptek; provided, however, that no adjustment will be required
if holders of the debentures receive notice of and are allowed to
participate in such transactions.
We do not have to adjust the conversion price if we grant rights
to purchase our common stock pursuant to a plan we establish for
the reinvestment of dividends or interest. Nor do we have to
adjust the conversion price for a change in the par value of our
common stock. We do not have to adjust the conversion price
unless the adjustment would be at least 1.0% in the conversion
price; however, we will carry forward any adjustment that would
otherwise be required and will take it into account in any
subsequent adjustment. We may voluntarily reduce the conversion
price for a period of time.
If we report income before extraordinary item and accounting
charge diluted earnings per share of less than $0.80 for our
fiscal year ending March 31, 2000, the conversion price will be
adjusted downward to
<PAGE 13>
$8.50, or to an amount reflecting a 10.5%
reduction to the then current conversion price if an adjustment
to the conversion price had previously been made as outlined
above. This adjustment would take effect, if at all, at 8:00
a.m. as of the next business day following the day on which we
filed our Annual Report on Form 10-K for the fiscal year ending
March 31, 2000.
If we:
* pay dividends on our common stock in shares of capital
stock;
* subdivide or combine the common stock;
* issue by reclassification of our common stock any shares of
our capital stock; or
* merge with, or transfer or lease substantially all of our
assets to, another corporation or trust;
the holders of the debentures then outstanding may convert their
debentures into the kind and amount of shares of capital stock,
other securities, cash or other assets which they would have
owned had they converted their debentures immediately before the
effective date of the transaction.
After a debenture has been called for redemption, any holder who
has not elected to convert those debentures into our common stock
on or before the close of business on the redemption date may be
required to sell those debentures at the redemption price to one
or more investment banks or other purchasers who may have agreed
with us to purchase those debentures and convert them into our
common stock.
Penalty For Late Delivery of Conversion Shares
Holders of the debentures will be entitled to receive a penalty
payment from us if, upon delivering a properly executed
conversion notice and the debenture to be converted, we fail to
deliver, the shares of our common stock for which the debenture
is being converted within three business days after delivery of
the conversion notice and the debentures. The penalty payment
will apply to the period beginning on the business day after
delivery was due and ending on the day we actually make delivery.
The penalty payment would accrue at a rate of 0.50% of the
principal amount of the debentures.
Subordination of Debentures
The indebtedness evidenced by the debentures is subordinated and
junior in right of payment to the prior payment in full of all of
our senior indebtedness. We will not pay principal of (or
premium, if any) or interest on the debentures, if we have
defaulted on any of our senior indebtedness, until that default
or event of default is cured or waived by the senior lender or no
longer exists.
If the principal of the debentures is accelerated or there is any
distribution of our assets upon any receivership, dissolution,
winding-up, liquidation, reorganization or similar proceedings of
Comptek, whether voluntary or involuntary, or in bankruptcy or
insolvency, all amounts due or to become due upon all senior
indebtedness must be paid in full before the holders of the
debentures are entitled to receive or retain any of our assets.
Because of this provision, in the event of our insolvency,
holders of the debentures may recover less, ratably, than holders
of senior indebtedness.
"Senior indebtedness" is the principal, premium, if any, interest
on and all other amounts payable under or in respect of our
indebtedness, other than indebtedness owed to one of our
subsidiaries, indebtedness which is expressly pari passu with the
debentures or indebtedness which is expressly subordinated to the
debentures. There is no limit on the amount of senior
indebtedness that we may incur.
<PAGE 14>
Optional Redemption
At our option we may redeem the debentures, as a whole or in
part, at any time or from time to time commencing on or after
March 1, 2002. We must give holders of the debentures at least
30 days' and not more than 60 days' prior notice by mail. The
redemption prices as a percentage of principal amount, are as
follows for the 12-month period beginning on or after March 1 of
the following years:
Redemption
Year Price
2002 103.4%
2003 101.7%
2004 and thereafter 100.0%
Certain Rights to Require Repurchase of Debentures by the
Company
In the event of any Change in Control, as described below, of
Comptek occurring on or prior to maturity of the debenture, each
holder has the right, to require us to repurchase all or any part
of that holder's debentures. We would have to repurchase the
debentures 75 days after the date we give notice of the Change in
Control at a price equal to 101.0% of the principal amount,
together with accrued and unpaid interest to the date of
repurchase. On or prior to the date of repurchase, we would be
required to deposit with the trustee or a paying agent an amount
of money sufficient to pay the repurchase price of the debentures
that are to be repaid on the date of repurchase.
Our failure to repurchase the debentures under these
circumstances would result in an event of default under the
indenture, whether or not such repurchase is permitted by the
subordination provisions of the indenture.
On or before the 15th day after the occurrence of a Change in
Control, we would be obligated to mail to all holders of the
debentures a notice of:
* the event constituting and the date of such Change in
Control,
* the date on which the repurchase will be made,
* the date by which the repurchase right must be exercised,
* the repurchase price for debentures, and
* the procedures that a holder must follow to exercise a
repurchase right.
To exercise the repurchase right, a holder of a debenture must
deliver, on or before the 10th day prior to the date of
repurchase, written notice to us and to the trustee of the
holder's desire to exercise the right, together with the
certificates evidencing the debentures, duly endorsed for
transfer. We may also designated an agent to receive notice for
us.
<PAGE 15>
A "Change in Control" will occur when:
(1) all, or substantially all, of Comptek's assets are sold as
an entirety to any person or related group of persons;
(2) there shall be consummated any consolidation or merger of
Comptek
(A) in which Comptek is not the continuing or surviving
corporation (other than a consolidation or merger with a wholly-
owned subsidiary of Comptek in which all common shares
outstanding immediately prior to the effectiveness thereof are
changed into or exchanged for the same consideration) or
(B) pursuant to which the common stock is converted into cash,
securities, other property, in each case other than a
consolidation or merger of Comptek in which the holders of the
common stock immediately prior to the consolidation or merger
have, directly or indirectly, at least a majority of the common
stock of the continuing or surviving corporation immediately
after such consolidation or merger; or
(3) any person, or any persons acting together that would
constitute a "group" for purposes of Section 13(d) of the
Exchange Act, together with any affiliates thereof, acquires
beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act) of at least 50.0% of the total voting power of all classes
of capital shares of Comptek entitled to vote generally in the
election of directors of Comptek.
Notwithstanding clause (3) above, a Change in Control will not be
deemed to have occurred solely by virtue of Comptek; any
subsidiary; any employee share purchase plan, share option plan,
or other share incentive plan or program; retirement plan or
automatic dividend reinvestment plan; or any substantially
similar plan of Comptek or any subsidiary or any person holding
our securities for or pursuant to the terms of any such employee
benefit plan, filing or becoming obligated to file a report under
or in response to Schedule 13D or Schedule 14D-1 (or any
successor schedule, form, or report) under the Exchange Act, as
amended, disclosing beneficial ownership by it of shares or
securities of Comptek, whether at least 50.0% of the total voting
power referred to in clause (3) above or otherwise. A
recapitalization or a leveraged buyout or similar transaction
involving members of management or their affiliates will
constitute a Change in Control if it meets the foregoing
definition.
Notwithstanding the foregoing, a Change in Control as described
above will not be deemed to have occurred if:
* the current market price of the common stock on the date of
a Change in Control is at least equal to 105.0% of the conversion
price of the debentures in effect immediately preceding the time
of such Change in Control;
* all of the consideration, excluding cash payments for
fractional shares, in the transaction giving rise to such Change
in Control to the holders of common stock consists of shares of
common stock that are, or immediately upon issuance will be,
listed on a national securities exchange or quoted on the Nasdaq
National Market, and as a result of such transaction the
debentures will become convertible solely into such shares of
common stock; or
* the consideration in the transaction giving rise to such
Change in Control to the holders of common stock consists of cash
or securities that are, or immediately upon issuance will be,
listed on a national securities exchange or quoted on the Nasdaq
National Market, or a combination of cash and such securities,
and the aggregate fair market value of such
<PAGE 16>
consideration is at
least 105.0% of the conversion price of the debentures in effect
on the date immediately preceding the closing date of such
transaction. In the case of securities, fair market value will
be deemed to be equal to the average of the daily closing prices
of such securities during the 10 consecutive trading days
commencing with the sixth trading day following consummation of
such transaction.
There is no definition of the phrase "all or substantially all"
as applied to our assets and used in the definition of Change in
Control in the indenture, and there is no clear definition of the
phrase under applicable law. As a result of the uncertainty of
the meaning of this phrase, in the event we were to sell a
significant amount of our assets, the holders and us may disagree
over whether the sale gives rise to the right of holders to
require us to repurchase the debentures. In that event, the
holders would likely not be able to require us to repurchase the
debentures unless and until the disagreement were resolved in
favor of the holders.
The right to require us to repurchase debentures as a result of a
Change in Control could create an event of default under senior
indebtedness. As a result, any repurchase could, absent a
waiver, be blocked by the subordination provisions of the
debentures. See "Subordination of Debentures" above. Our
ability to pay cash to the holders upon a repurchase may also be
limited by certain financial covenants contained in our senior
indebtedness.
In the event a Change in Control occurs and the holders exercise
their rights to require us to repurchase debentures, we intend to
comply with applicable tender offer rules under the Exchange Act,
including Rules 13e-4 and 14e-1, as then in effect, with respect
to any such purchase. The Change in Control purchase feature of
the debentures may in certain circumstances make more difficult
or discourage a takeover of Comptek. The Change in Control
purchase feature, however, is not the result of management's
knowledge of any specific effort to accumulate common stock or to
obtain control of Comptek, or part of a plan by management to
adopt a series of anti-takeover provisions. Instead, the Change
in Control purchase feature is a standard term contained in other
similar debt securities.
The foregoing provisions would not necessarily afford holders of
debentures protection in the event of highly leveraged or other
transactions involving Comptek that may adversely affect the
value of debentures.
Modification of the Indenture
Under the indenture, with certain exceptions, our rights and
obligations with respect to the debentures and the rights of
holders of the debentures may only be modified by us and the
trustee with the written consent of the holders of not less than
66-2/3% in principal amount of the outstanding debentures.
However, without the consent of each holder of any debenture
affected, an amendment, waiver or supplement may not:
(a) reduce the amount of debentures whose holders may consent to
an amendment;
(b) reduce the rate or change the time of payment of interest on
any debenture;
(c) reduce the principal of or change the fixed maturity of any
debenture;
(d) make any debenture payable in money other than that stated
in the debenture;
(e) change the provisions of the indenture regarding the right
of the holders of a majority of the debenture to waive defaults
under the indenture or impair the right of any holder of
debentures to institute suit for the enforcement of any payment
of principal and interest on the debentures on and after their
respective due dates;
<PAGE 17>
(f) make any change that adversely affects the right to convert
any debenture;
(g) make any change to the subordination or seniority of the
debentures that adversely affects the rights of any holder; or
(h) impair the right, as limited in the indenture, of any holder
to institute any suit or proceeding.
Events of Default, Notice and Waiver
The following are "Events of Default" under the indenture with
respect to the debentures:
(a) default in the payment of interest on the debentures when
due and payable which continues for 30 days;
(b) default in the payment of principal of (and premium, if any,
on) the debentures when due and payable, at maturity, upon
redemption or otherwise;
(c) our failure to perform any other covenant contained in the
indenture or the debentures which continues for 60 days after
notice as provided in the indenture;
(d) acceleration of any indebtedness for money borrowed
(including obligations under leases required to be capitalized on
the balance sheet of the lessee under generally accepted
accounting principles but not including any indebtedness or
obligation for which recourse is limited to property purchased)
in an aggregate principal amount in excess of $20.0 million,
whether existing on the date of the execution of the indenture or
thereafter created, if such indebtedness is not paid or such
acceleration is not annulled within ten days after notice to us
of such acceleration; and
(e) certain events of bankruptcy, insolvency or reorganization
relating to us.
If an Event of Default occurs and is continuing with respect to
the debentures, either the trustee or the holders of at least a
majority in principal amount of the debentures may declare all of
the debentures to be due and payable immediately.
If any Events of Default have occurred and are continuing or
would exist immediately after giving effect to such action, we
will not (i) declare or pay any dividends or make any
distribution to holders of our capital stock or (ii) purchase,
redeem or otherwise acquire or retire for value any of our common
stock, or any warrants, rights or options, to purchase or acquire
any shares of our common stock (other than the debentures or any
other convertible indebtedness of ours that is neither secured
nor subordinated to the debentures).
The trustee may require indemnity reasonably satisfactory to it
before it enforces the indenture or the debentures. Subject to
certain limitations, holders of a majority in principal amount of
the debentures may direct the trustee in its exercise of any
trust or power. The trustee may withhold from holders of the
debentures notice of any default, except a default in payment of
principal or interest, if it determines that withholding notice
is in their interests. We are required to file with the trustee
annually an officer's statement as to the absence of defaults.
No consent of the holders of the debentures is required for (1)
Comptek to consolidate with or merge into or transfer or lease
substantially all of its assets to another corporation or trust
which assumes the obligations of Comptek under the indenture and
debentures or (2) for any reorganization within the
<PAGE 18>
meaning of
Section 368(a)(1)(B) of the Internal Revenue Code of 1986. Also,
no consent of holders of the debentures is required for any
amendment of the indenture or the debentures by Comptek or the
trustee to:
* cure any ambiguity, defect or inconsistency, or to provide
for uncertificated debentures in addition to certified
debentures, or
* to make any change that does not adversely affect the right
of a holder of a debenture.
Consolidation, Merger, Sale or Conveyance
The indenture provides that Comptek may not merge or consolidate
with, or sell or convey all, or substantially all, of its assets
to another person unless:
* such person is a company or a trust;
* such person assumes by supplemental indenture all the
obligations of Comptek under the debentures and the indenture;
and
* immediately after the transaction no default or Event of
Default shall exist.
Marketability
At present there is no public market for the debentures, and it
is not likely that a market will develop. The debentures were
initially sold pursuant to exemptions from registration under the
Securities Act. We filed a registration statement under the
Securities Act relating to the resale of the debentures and the
underlying shares of common stock. However, there can be no
assurance that we will be able to maintain the effectiveness of
the current registration statement as required. The absence of
such an effective registration statement may limit any holder's
ability to sell the debentures or the underlying shares of common
stock or could adversely affect the price at which the debentures
or the underlying shares of common stock can be sold.
Governing Law
The indenture and the debentures are governed by and construed in
accordance with the laws of the State of New York.
Registration Rights Agreement
Pursuant to a registration rights agreement entered into by us in
connection with the initial sale of the debentures, the
debentures and the underlying shares of common stock have been
registered under the Securities Act with the SEC. We have also
agreed to prepare and file such amendments and supplements to the
registration statement as may be necessary to keep the
registration statement effective until :
* Two years from the effective date of the registration
statement, or
* Such shorter period when all the debentures and the shares
of common stock offered hereby have been sold thereby, or
* Until the debentures and the Conversion Shares are no
longer, by reason of Rule 144 promulgated under the Securities
Act or any other rule of similar effect, required to be
registered for the sale thereof.
<PAGE 19>
Description of Capital Stock
Our certificate of incorporation authorizes us to issue, without
stockholder approval, up to 3,000,000 shares of preferred stock
and up to 10,000,000 shares of common stock. As of the date of
this prospectus, no shares of preferred stock are outstanding,
nor do we have plans to issue any shares of preferred stock other
than as part of the exercise of shareholder rights under the
rights plan described below.
Common Stock
Each holder of our common stock is entitled to one vote per share
held of record on each matter submitted to stockholders.
Cumulative voting for the election of directors is not permitted,
and the holders of a majority of shares voting for the election
of directors can elect all members of the Board of Directors
standing for election each year.
Subject to the rights of the holders of our preferred stock, if
any, holders of record of shares of our common stock are entitled
to receive, ratably, dividends when and if declared by the Board
of Directors out of funds legally available for dividends. In
the event of a voluntary or involuntary winding up or
dissolution, liquidation or partial liquidation, holders of the
common stock are entitled to participate ratably in any
distribution of our assets, subject to the rights of our
creditors and the holders of our preferred stock, if any.
Holders of the common stock have no conversion, redemption or
preemptive rights. All outstanding shares of the common stock
are validly issued, fully paid and nonassessible.
Preferred Stock
We are authorized to issued shares of preferred stock in one or
more series, which can have rights senior to those of our common
stock. Our Board of Directors may fix or alter any of the
following for any unissued series of our preferred stock:
* number of shares;
* powers;
* designation;
* dividend rights;
* dividend rate;
* conversion rights;
* voting rights;
* rights and terms of redemption (including sinking fund
provisions);
* redemption price or prices;
* liquidation and other preferences; and
<PAGE 20>
* other special rights.
Our issuance of preferred stock could adversely affect holders of
common stock. These effects could include the following:
* if dividends on the preferred stock have not been made,
dividends on our common stock may be restricted;
* to the extent the preferred stock has voting rights, the
voting rights of our common stock will be diluted;
* if holders of preferred stock are entitled to preferred
dividends or liquidation preferences, the amount of earnings and
assets available for distribution to holders of our common stock
may be reduced;
* our issuance of preferred stock could decrease the market
price of our common stock; and
* our issuance of preferred stock may have the effect of
delaying or preventing a change in control.
Shareholders Rights Plan
On April 16, 1999, our Board of Directors adopted a shareholders
rights plan. Our Board of Directors at that time declared a
dividend of one preferred-share-purchase-right, generally
referred to as a "right," on each share of common stock. The
rights dividend was issued to each shareholder of record as of
April 30, 1999. The description and terms of the rights are set
forth in a rights agreement between us and American Stock
Transfer & Trust Company, as rights agent. The shareholder
rights plan and related rights agreement were filed as an exhibit
to our Current Report on Form 8-K filed with the SEC on April 19,
1999. We strongly encourage you to read the rights agreement
prior to purchasing any of the securities offered pursuant to
this prospectus.
Each right entitles shareholders to buy one-hundredth of a share
of Series A Junior Participating Preferred Stock at an initial
exercise price of $45. The rights will be exercisable if a
person or group acquires beneficial ownership of 20% or more of
our outstanding common stock, or begins a tender or exchange
offer for 20% or more of the common stock. In addition, the
rights will be exercisable if an "adverse person," as determined
by the directors, acquires beneficial ownership of 10% or more of
our outstanding common stock.
Until a triggering event, the rights attach to and trade with the
shares of our common stock. No separate rights certificate will
be issued until an event triggering the exercise of the rights
occurs.
If any person becomes the beneficial owner of 20% or more of
Comptek's common stock - except through an offer which the Board
of Directors determines to be fair - and the Board does not
redeem the rights within 10 days, or a 10% holder is determined
by the directors to be an "adverse person," then each right not
owned by such "adverse person" will then enable its holder to
purchase, at the right's then-current exercise price, common
stock of the other entity having a value of twice the rights
exercise price.
Under certain circumstances, if we are acquired in a merger or
similar transaction with another person, or sells more than 50%
of our assets, earning power or cash flow to another entity, each
right that has not previously been exercised will entitle its
holder to purchase, at the right's then-current exercise price,
common stock of such other entity having a value of twice the
right's exercise price.
<PAGE 21>
The rights will expire on April 29, 2009, unless redeemed by us
at an earlier date. We will generally be entitled to redeem the
rights at one cent per right at any time until 10 days following
a public announcement that a 20% position has been acquired. The
time limit may be extended by the directors.
Anti-Takeover Effects
Our Certificate of Incorporation provides for a Board of
Directors consisting of not less than six persons divided into
classes of at least three directors serving staggered terms. We
currently have eight directors divided into two classes of four
directors each serving staggered two-year terms. The Certificate
of Incorporation also requires the affirmative vote of 80% of the
then outstanding voting shares for certain business combination
transactions.
The provisions of our Certificate of Incorporation on the
classification of the Board of Directors, preferred stock and
voting requirements for certain business combinations may have
the effect of delaying, deferring or preventing a change in
control of Comptek.
The rights also have certain anti-takeover effects. The rights
will cause substantial dilution to a person or group that
attempts to acquire Comptek on terms not approved by our Board of
Directors, except pursuant to any offer conditioned on a
substantial number of rights being acquired. The rights should
not interfere with any merger or other business combination
approved by the Board of Directors since the rights may be
redeemed by us prior to the time that a person or group has
acquired beneficial ownership of 20% or more of the common
shares.
Selling Security Holders
We originally sold the debentures to the initial purchasers in
transactions exempt from the registration requirements of the
Securities Act. We reasonably believed that each such person
was an "accredited investors," as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act. The selling security holders
may from time to time offer and sell any or all of the debentures
and common stock into which the debentures are convertible
pursuant to this prospectus. The term "selling security holders"
includes their transferees, pledgees or donees or their
successors
The following table sets forth information, as of June 16, 1999,
with respect to the selling security holders and the respective
principal amounts of debentures beneficially owned by each that
may be offered pursuant to this prospectus. The table is based
on information provided by or on behalf of the selling security
holders. Because the selling security holders may offer all or
some portion of the debentures or the common stock, no estimate
can be given as to the amount of the debentures or the common
stock that will be held by the selling security holders upon
termination of any such sales. In addition, the selling security
holders identified below may have sold, transferred or otherwise
disposed of all or a portion of their debentures in transactions
exempt from the registration requirements of the Securities Act
since the date on which they provided the information regarding
their debentures to us.
<PAGE 22>
<TABLE>
<CAPTION>
Debentures
Beneficially Common Stock Owned
Name Owned and Beneficially
Offered Hereby Offered and Hereby
- --------------------------------------------------------------
Princi- Number of
pal %(1) Shares(2) %(3)
Amount
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Centura Small-Cap
Equity Fund 400,000 2.7% 42,105 .8%
DS Founders Group,
LP 200,000 1.3% 21,052 .4%
Leonardo, LP 600,000 4.0% 63,157 1.2%
Libertyview Funds,
L.P. 800,000 5.3% 84,210 1.6%
Libertyview Fund,
LLC 200,000 1.3% 21,052 .4%
Joseph Stechler &
Company,
Incorporated 2,000,000 13.3% 210,526 4.0%
Manu Shah Living
Trust 250,000 1.7% 26,315 .5%
Quasar Rabbico
N.V. 1,500,000 10.0% 157,894 3.0%
Ramius Fund, LTD. 400,000 2.7% 42,105 .8%
Raphael, L.P. 200,000 1.3% 21,052 .4%
Raphael II, L.P. 150,000 1.0% 15,789 .3%
Shrem, Fudim,
Kelner & Co.,
Ltd. 200,000 1.3% 21,052 .4%
Strong River
Investments,
Inc. 500,000 3.3% 52,631 1.0%
The Canada-Israel
Opportunity
Fund, LP 100,000 .07% 10,526 .2%
Warburg Pincus
Emerging
Growth Fund 7,000,000 46.7% 736,842 12.7%
Coastal
Convertible LTD. 500,000 3.3% 52,631 1.0%
________________
(1) Based on 15,000,000 principal amount of debentures
outstanding.
(2) Assumes conversion of all of the holder's debentures at
a conversion price of $9.50.
(3) Calculated based on Rule 13d(d)(i) of the Exchange Act
using 5,086,233 shares of common stock outstanding as of June
16, 1999. In calculating the percentage amount, we treat as
outstanding the number of shares of common stock issuable
upon conversion of all of that particular holder's
debentures. We did not assume, however, the conversion of
any other holder's debentures.
</TABLE>
None of the selling security holders has had any material
relationship with Comptek or its affiliates within the past three
years. The selling security holders purchased all of the
debentures in a private transactions exempt from the registration
requirements of the Securities Act. All of the debentures were
"restricted securities" under the Securities Act prior to this
registration. The selling security holders have represented to
us that they purchased the debentures for their own account for
investment only and not with a view toward selling or
distributing them, except pursuant to sales registered under the
Securities Act or exemptions.
Information concerning the selling security holders may change
from time to time and any such changed information will be set
forth in supplements to this prospectus if and when necessary.
In addition, the per share conversion price, and, therefore, the
number of shares of common stock issuable upon conversion of the
debentures, is subject to adjustment under certain circumstances.
Accordingly, the aggregate principal amount of debentures and the
number of shares of common stock into which the debentures are
convertible may increase or decrease.
<PAGE 23>
Plan Of Distribution
The selling security holders and their successors may sell the
debentures and the common stock into which the debentures are
convertible directly to purchasers or through underwriters,
broker-dealers or agents, who may receive compensation in the
form of discounts, concessions or commissions from the selling
security holders. These discounts, concessions or commission as
to any particular underwriter, broker-dealer or agent may be in
excess of those customary in the types of transactions involved.
The debentures and the common stock into which the debentures are
convertible may be sold in one or more transactions:
* at fixed prices;
* at prevailing market prices at the time of sale;
* at prices related to such prevailing market prices;
* at varying prices determined at the time of sale; or
* at negotiated prices.
Such sales may be effected in transactions; which may involve
crosses or block transactions:
(1) on any national securities exchange or quotation service on
which the debentures or the common stock may be listed or quoted
at the time of sale;
(2) in the over-the-counter market;
(3) in transactions otherwise than on such exchanges or services
or in the over-the-counter market;
(4) through the writing of options (whether such options are
listed on an options exchange or otherwise); or
(5) through the settlement of short sales.
In connection with the sale of the debentures and the common
stock into which the debentures are convertible or otherwise, the
selling security holders may enter into hedging transactions with
broker-dealers or other financial institutions. Those entities
may in turn engage in short sales of the debentures or the common
stock into which the debentures are convertible. Any selling
security holder, broker-dealer or other financial institution
engaging in these transactions may deliver these securities to
close out such short positions, or loan or pledge the debentures
or the common stock into which the debentures are convertible to
broker-dealers that in turn may sell these securities.
The aggregate proceeds to the selling security holders from the
sale of the debentures or common stock into which the debentures
are convertible offered by them hereby will be the purchase price
of such debentures or common stock less discounts and
commissions, if any. Each of the selling security holders, or
any agent acting on their behalf, reserves the right to accept
or to reject, in whole or in part, any proposed purchase of
debentures or common stock. We will not receive any of the
proceeds from this offering.
<PAGE 24>
Our common stock is listed on the American Stock Exchange. We do
not intend to list the debentures for trading on any national
securities exchange or on the Nasdaq National Market and can give
no assurance about the development of any trading market for the
debentures.
In order to comply with the securities laws of some states, if
applicable, the debentures and common stock into which the
debentures are convertible may be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition,
in some states the debentures and common stock into which the
debentures are convertible may not be sold unless they have been
registered or qualified for sale or an exemption from
registration or qualification requirements is available and is
complied with.
Both Warburg Pincus Emerging Growth Fund and Joseph Stechler &
Company, Incorporated are affiliated with a registered broker-
dealer and because of such affiliation will be "underwriters"
within the meaning of Section 2(11) of the Securities Act. Each
of the other selling security holders have informed us that they
are not affiliated with any registered broker-dealer. Those
selling security holders and any underwriters, broker-dealers or
agents that participate in the sale of the debentures and common
stock into which the debentures are convertible may be
"underwriters" within the meaning of Section 2(11) of the
Securities Act. Any discounts, commission, concessions or profit
they earn on any resale of the securities may be underwriting
discounts and commissions under the Securities Act. Selling
security holders who are "underwriters" within the meaning of
Section 2(11) of the Securities will be subject to the prospectus
delivery requirements of the Securities Act. The selling
security holders have acknowledged that they understand their
obligations to comply with the provisions of the Exchange Act and
the rules thereunder relating to stock manipulation, particularly
Regulation M, and have agreed that they will not engage in any
transaction in violation of such provisions.
In addition, any securities covered by this prospectus which
qualify for sale pursuant to Rule 144 of the Securities Act may
be sold under Rule 144 rather than pursuant to this prospectus.
A selling security holder may not sell any debentures or common
stock described herein and may not transfer, devise or gift such
securities by other means not described in this prospectus.
To the extent required, the following information will be set
forth in an accompanying prospectus supplement or, if
appropriate, a post-effective amendment to the registration
statement of which this prospectus is a part:
(a) the specific debentures or common stock to be sold;
(b) the names of the selling security holders;
(c) the respective purchase prices and public offering prices;
(d) the names of any agent, dealer or underwriter; and
(e) any applicable commissions or discounts with respect to a
particular offer.
The Registration Rights Agreement provides for cross-
indemnification of the selling security holders and Comptek and
their respective directors, officers and controlling persons
against certain liabilities in connection with the offer and sale
of the debentures and the common stock, including liabilities
under the Securities Act. We will pay substantially all of the
expenses incurred by the selling security holders and us incident
to the offering and sale of the debentures and the common stock,
provided that each selling holder will be responsible for payment
of commission, concessions and discounts of underwriters, broker
dealers or agents.
<PAGE 25>
Legal Matters
The validity of the debentures and shares of common stock offered
hereby will be passed upon by Christopher A. Head, General
Counsel for Comptek. Mr. Head is an executive officer of
Comptek. As of June 16, 1999, Mr. Head owns less than one
percent of the outstanding shares of the Comptek.
Experts
The consolidated financial statements and schedule of Comptek as
of March 31, 1999 and 1998, and for each of the years in the
three-year period ended March 31, 1999, have been incorporated by
reference herein and in the registration statement in reliance
upon the reports of KPMG LLP, independent certified public
accountants, upon the authority of said firm as experts in
accounting and auditing.
The financial statements for Amherst Systems for each of the
years in the three-year period ended April 30, 1998 have been
incorporated by reference herein and in the registration
statement in reliance upon the report of KPMG LLP, independent
certified public accountants, upon the authority of said firm as
experts in accounting and auditing.
The financial statements for PRB Associates for the years ended
December 31, 1997 and 1996, have been incorporated in this
prospectus by reference from Comptek's Form 8-K, and have been
audited by Deloitte & Touche, LLP, independent auditors, as
stated in their report which is incorporated herein by reference
as has been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and
auditing.
How To Obtain More Information
We file reports, proxy statements and other information with the
Securities and Exchange Commission. You may read any document we
file at the SEC's public reference rooms in Washington, D.C.,
Chicago, Illinois and New York, New York. Please call the SEC
toll free at 1-800-SEC-0330 for information about its public
reference rooms. You may also read our filings at the SEC's Web
site at http://www.sec.gov.
We have filed with the SEC a registration statement on Form S-2
under the Securities Act of 1933. This prospectus does not
contain all of the information in the registration statement. We
have omitted certain parts of the registration statement, as
permitted by the rules and regulations of the SEC. You may
inspect and copy the registration statement, including exhibits,
at the SEC's public reference facilities or Web site. Our
statements in this prospectus about the contents of any contract
or other document are not necessarily complete. You should refer
to the copy of each contract or other document we have filed as
an exhibit to the registration statement for complete
information.
The SEC allows us to "incorporate by reference" into this
prospectus the information we have filed with it. This means
that we can disclose important information to you by referring to
you those documents. This information we incorporate by
reference is considered a part of this prospectus. We
incorporate by reference the documents listed below:
* Our Annual Report on Form 10-K for the year ended March 31,
1999.
* The description of our Preferred Stock Purchase Rights
contained in our Report on Form 8-K filed April 19, 1999.
* Information on our acquisition of PRB Associates, Inc.
contained in our Report on Form 8-K/A filed July 27, 1998.
<PAGE 26>
* Information on our acquisition of the business operations,
assets and liabilities of Amherst Systems, Inc. contained in our
Report on Form 8-K filed April 12, 1999.
You may obtain copies of these documents free of charge by
contacting us orally or in writing at:
Comptek Research, Inc.
2732 Transit Road
Buffalo, New York 14224
Attn: Corporate Secretary
(716) 677-4070
(716) 677-0014 (fax)
You should rely only on the information incorporated by reference
or provided in this prospectus. We have not authorized anyone
else 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 the information in this
prospectus is accurate as of any date other than the date on the
front of this prospectus or the date of a subsequent amendment.
<PAGE 27>
<ITALIC>No dealer, sales representative or any other person has
been authorized to give information or make any representation
not contained in this prospectus in connection with the offer
made by this prospectus and, if given or made, such information
or representation must not be relied upon as having been
authorized by Comptek. This prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any securities
other than those specifically offered hereby or of any securities
offered hereby in any jurisdiction to any person to whom it is
unlawful to make an offer or solicitation in such jurisdiction.
Neither the delivery of this prospectus nor any sale made
hereunder shall, under any circumstances, create an implication
that there has been no change in our affairs since the date
hereof or that the information contained herein is correct as of
any time subsequent to the date hereof.</ITALIC>
<PAGE 28>
<BOLD><ITALIC>Part II
Information Not Required In Prospectus</ITALIC></BOLD>
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth estimated expenses in connection
with the issuance and distribution of the securities being
registered. All amounts shown are estimates, except for the SEC
registration fee. The listed expenses are payable by the Company.
<TABLE>
<S> <C>
4,170
Registration Fee:
500
Printing and Engraving Fee:
4,000
Accounting Fees:
8,000
Legal Fees:
1,100
Miscellaneous: --------
17,770
Total ========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Article IX. of the Company's By-laws provides as follows:
Every person who is or was a director, officer or
employee of the corporation, or of any other
corporation which he served as such at the request of
the corporation, may in accordance with the second
paragraph of this Article IX be indemnified by the
corporation against any and all liability and
reasonable expense that may be incurred by him in
connection with or resulting from any claim, action,
suit or proceeding (whether brought by or in the right
of the corporation or such other corporation or
otherwise), civil or criminal, or in connection with an
appeal relating thereto, in which he may be involved,
as a party or otherwise, by reason of his being or
having been a director, officer or employee of the
corporation or such other corporation, or by reason of
any action taken or not taken in his capacity as such
director, officer or employee, whether or not he
continues to be such at the time such liability or
expense shall have been incurred, provided such person
acted, in good faith, in a manner he reasonably
believed to be in or not opposed to the best interests
of the corporation or such other corporation, as the
case may be, and, in addition in any criminal action or
proceeding, had no reasonable cause to believe that his
conduct was unlawful. As used in this Article IX, the
terms "liability" and "expense" shall include, but
shall not be limited to, court costs, counsel fees and
disbursements and amounts of judgements, fines or
penalties against, and amounts paid in settlement by, a
director, officer or employee. The termination of any
claim, action, suit or proceeding, civil or criminal,
by judgment, settlement (whether with or without court
approval), conviction or upon a pleas of guilty or nolo
contendere, or its equivalent, shall not create a
presumption that a director, officer or employee did
not meet the standards of conduct set forth in this
paragraph.
<PAGE 29>
Expenses incurred with respect to any claim, action,
suit or proceeding of the character described in the
first paragraph of this Article IX may be advanced by
the corporation prior to the final disposition thereof
upon receipt of any undertaking by or on behalf of the
recipient to repay such amount unless it shall
ultimately be determined that he is entitled to
indemnification under this Article IX.
The rights of indemnification provided in this Article
IX shall be in addition to any other rights to which
any such director, officer or employee may otherwise be
entitled by contract, as a matter of law, by vote of
the stockholders, or otherwise; and in the event of any
such person's death, such rights shall extend to his
heirs and legal representatives.
Paragraph TENTH of the Company's Certificate of Incorporation
provides as follows:
TENTH: No director shall be personally liable to the
Corporation or any shareholder for damages for any
breach of duty as a director, except for (a) the
liability of any director if a judgment or other final
adjudication adverse to him establishes that (i) his
acts or omissions were in bad faith or involved
intentional misconduct or a knowing violation of law or
(ii) he personally gained in fact a financial profit or
other advantage to which he was not legally entitled or
(iii) his acts violated Section 719 of the New York
Business Corporation Law, or (b) the liability of any
director for any act or omission prior to the adoption
of this paragraph TENTH. Any repeal or modification of
this paragraph TENTH by the shareholders of the
corporation shall not, unless otherwise required by
law, adversely affect any right or protection of a
director existing at the time of such repeal or
modification with respect to acts or omissions
occurring prior to such repeal or modification. If the
New York Business Corporation Law is amended after
approval by the shareholders of this paragraph TENTH to
authorize corporate action further eliminating or
limiting the personal liability of directors, then the
liability of a director of the corporation shall be
eliminated or limited to the fullest extent permitted
by New York Business Corporation Law, as amended from
time to time.
Section 722 of the New York Business Corporation Law (the "BCL")
permits indemnification against judgments, fines and amounts paid
in settlement and reasonable expenses, including attorneys' fees,
actually and necessarily incurred as a result of legal actions or
proceedings. Under Section 723 of the BCL, if a litigant is
successful in the defense of such an action or proceeding, he or
she is automatically entitled to indemnification. Otherwise,
indemnification will depend upon whether or not the director or
officer has lived up to an appropriate standard of conduct in the
performance of his or her duties.
<PAGE 30>
Item 16. Exhibits.
4.1(a) Indenture dated March 24, 1999 between the Registrant
and The Bank of New York, as Trustee.
4.1(b) Form of Debenture (included in Exhibit 4.1(a)).
4.1(c) Form of Registration Rights Agreement.
5.1 Opinion of Christopher A. Head, counsel to the Company.
10.1 Registrant's 1992 Equity Incentive Plan, as amended.
10.1a Registrant's 1998 Equity Incentive Stock Plan
10.1b Form of incentive stock option agreement and non-
qualified stock agreement issued under Registrant's
Equity Incentive Plan to plan participants, including
executive officers.
10.1c Non-Qualified Stock Option Agreement dated June 20,
1996 by and between Registrant and John J. Sciuto.
10.2 1994 Stock Option Plan for Non-Employee Directors, as
amended.
10.3 Employment agreement between Registrant and John J.
Sciuto.
10.3a Employment agreement between Registrant and Christopher
A. Head.
10.3b Employment agreement between Registrant and Laura L.
Benedetti.
10.3c Employment agreement between Registrant and James D.
Morgan.
10.3d Loan Agreement between Comptek Federal Systems, Inc.
(wholly-owned subsidiary of the Registrant) and John
Sciuto.
10.3e Loan Agreement, dated February 3, 1999, between Comptek
Federal Systems, Inc. (wholly-owned subsidiary of the
Registrant) and John J. Sciuto
10.3f Employment agreement between PRB Associates, Inc.
(wholly-owned subsidiary of the Registrant) and
Lawrence M. Schadegg.
10.3g Restricted Stock Agreement between Registrant and
Lawrence M. Schadegg.
10.3h Employment agreement between Registrant and Charles E.
Dowdell
10.5 Interest Rate Swap Agreement, dated May 1, 1998, between
Registrant and KeyBank,
N.A.
10.5a Loan Agreement, dated May 14, 1998, between Registrant
and Manufacturers and Traders Trust Company.
<PAGE 31>
10.5b Loan Agreement, dated March 24, 1999, between
Registrant and Manufacturers and Traders Trust Company
10.6 Real property lease between Registrant and Southern Maryland
Property Management Associates premises at 43865 Airport View
Drive, Hollywood, MD
10.6a Real property lease between Registrant and Charles E.
Dowdell and Nancy L. Dowdell for 30 Wilson Road,
Williamsville, NY
11.1 Reconciliation of Basic and Diluted EPS Comptuations.
12.1 Statement Re Computation of Ratios
15.1 Letter Regarding Unaudited Interim Financial Information
23.1 Consent of Christopher A. Head (included in
Exhibit 5).
23.2 Consent of KPMG LLP, independent auditors for the
Company.
23.3 Consent of KPMG LLP, independent auditors for Amherst
Systems, Inc.
23.2 Consent of Deloitte & Touche, LLP, independent auditors for
PRB Associates, Inc.
25.1 Form T-1 Statement of Eligibility and Qualification under
the Trust Indenture Act of 1939 of the Trustee.
Item 17. Undertakings
I. 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. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high
end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b), in the
aggregate, the changes in volume and price
represent no more than a 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement.
(iii)To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
<PAGE 32>
Provided, however, that paragraphs (i) and (ii)
above do not apply if the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this
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 pursuant
to this registration statement, 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.
II. Acceleration of Effectiveness - Indemnification Undertaking.
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 15 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
that than the payment by the registrant of 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.
<PAGE 33>
Signatures
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all the requirements for filing on Form S-2
and has duly caused this registration statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in
Buffalo, New York on August 2, 1999.
COMPTEK RESEARCH, INC.
By: /s/John J. Sciuto
John J. Sciuto, Chairman
President and Chief
Executive Officer
<PAGE 34>
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following
persons in the capacities indicated.
/s/Joseph A. Alutto* August 2, 1999
Joseph A. Alutto, Director
/s/Laura L. Benedetti* August 2, 1999
Laura L. Benedetti,
Chief Financial Officer
Vice President - Finance
and Treasurer (principal accounting
and financial officer)
/s/John R. Cummings* August 2, 1999
John R. Cummings, Director
/s/G. Wayne Hawk* August 2, 1999
G. Wayne Hawk, Director
/s/Patrick J. Martin* August 2, 1999
Patrick J. Martin, Director
/s/Wayne E. Meyer* August 2, 1999
Wayne E. Meyer, Director
/s/James D. Morgan* August 2, 1999
James D. Morgan, Director
/s/John J. Sciuto* August 2, 1999
John J. Sciuto, Chairman,
Chief Executive Officer
and Director (principal executive officer)
/s/Henry P. Semmelhack* August 2, 1999
Henry P. Semmelhack, Director
*By: /s/Christopher A. Head August 2, 1999
Christopher A. Head
Attorney-in-fact
<PAGE 35>
Exhibit Index
Number Description Page
4.1(a) Indenture dated March 24, 1999 between the Regis-
trant and The Bank of New York, as Trustee. (f)
4.1(b) Form of Debenture (included in Exhibit 4.1(a)). (f)
4.1(c) Form of Registration Rights Agreement. (f)
5.1 Opinion of Christopher A. Head, counsel to
the Company. (38)
10.1 Registrant's 1992 Equity Incentive Plan, as
amended. (a)
10.1a Registrant's 1998 Equity Incentive Stock Plan (e)
10.1b Form of incentive stock option agreement and non-
qualified stock agreement issued under
Registrant's Equity Incentive Plan to plan
participants, including executive officers. (c)
10.1c Non-Qualified Stock Option Agreement dated June
20, 1996 by and between Registrant and John J.
Sciuto. (c)
10.2 1994 Stock Option Plan for Non-Employee Directors,
as amended. (g)
10.3 Employment agreement between Registrant and
John J. Sciuto. (d)
10.3a Employment agreement between Registrant and
Christopher A. Head. (d)
10.3b Employment agreement between Registrant and
Laura L. Benedetti. (d)
10.3c Employment agreement between Registrant and
James D. Morgan. (d)
10.3d Loan Agreement between Comptek Federal Systems,
Inc. (wholly-owned subsidiary of the Registrant)
and John Sciuto. (b)
10.3e Loan Agreement, dated February 3, 1999,
between Comptek Federal Systems, Inc. (wholly-
owned subsidiary of the Registrant) and John
J. Sciuto (g)
10.3f Employment agreement between PRB Associates, Inc.
(wholly-owned subsidiary of the Registrant) and
Lawrence M. Schadegg. (d)
10.3g Restricted Stock Agreement between Registrant and
Lawrence M. Schadegg. (d)
10.3h Employment agreement between Registrant and
Charles E. Dowdell (g)
10.5 Interest Rate Swap Agreement, dated May 1, 1998,
between Registrant and KeyBank, N.A. (d)
<PAGE 36>
10.5a Loan Agreement, dated May 14, 1998, between
Registrant and Manufacturers and Traders Trust
Company. (d)
10.5b Loan Agreement, dated March 24, 1999, between
Registrant and Manufacturers and Traders Trust
Company (g)
10.6 Real property lease between Registrant and
Southern Maryland Property Management Associates
premises at 43865 Airport View Drive, Hollywood,
MD (g)
10.6a Real-property lease between Registrant and
Charles E. Dowdell and Nancy L. Dowdell for
30 Wilson Road, Williamsville, NY (g)
11.1 Reconciliation of Basic and Diluted EPS
Computations. (g)
12.1 Statement Re Computation of Ratios (g)
15.1 Letter Regarding Unaudited Interim Financial
Information (39)
23.1 Consent of Christopher A. Head (included
in Exhibit 5). (38)
23.2 Consent of KPMG LLP, independent auditors for the
Company. (40)
23.3 Consent of KPMG LLP, independent auditors for
Amherst Systems, Inc. (41)
23.4 Consent of Deloitte & Touche, LLP, independent
auditors for PRB Associates, Inc. (42)
25.1 Form T-1 Statement of Eligibility and Qualifi-
cation under the Trust Indenture Act of 1939 of
the Trustee. (g)
___________________________
LOCATION OF EXHIBITS
_______________
Exhibit
No.
(a) Designates Exhibit annexed to the Company's Form 10-Q for
the quarter ended September 29, 1995
(b) Designates Exhibit annexed to the Company's Form 10-Q for
the quarter ended September 27, 1996.
(c) Designates Exhibit annexed to the Company's Form 10-K for
the year ended March 31, 1997.
(d) Designates Exhibit annexed to the Company's Form 10-K for
the year ended March 31, 1998.
(e) Designates Exhibit annexed to the Company's 1998
Definitive Proxy Statement (filed July 8, 1998).
(f) Designates Exhibit annexed to the Company's Registration
Statement, #333-77045, dated April 26, 1999.
(g) Designates Exhibit annexed to the Company's Registration
Statement, #333-77045, Amendment No.1, dated June 25,
1999.
<PAGE 37>
Exhibit 5.1
(including Exhibit 23.1)
August 2, 1999
Board of Directors
Comptek Research, Inc.
2732 Transit Road
Buffalo, NY 14224
Re: Registration of Shares on Form S-2
Dear Sirs:
I have acted as counsel to Comptek Research, Inc., a New York
corporation (the "Company"), in connection with the registration
of $15 million in convertible subordinated debentures and the
shares of common stock into which the debentures are convertible,
pursuant to a registration statement initially on Form S-3 and
converted to Form S-2 under the Securities Act of 1933, as
amended.
Based upon my examination of the originals or copies of such
documents, corporate records, certificates of officers of the
Company and other instruments as I have deemed necessary and upon
the laws as presently in effect, I am of the opinion: (i) that
the debentures have been duly authorized and legally issued by
the Company, are fully paid and are legal binding obligations of
the Company; (ii) the shares have been duly authorized and when
issued upon conversion of the debentures will be legally issued,
fully paid, and nonassessable.
I hereby consent to the filing of this opinion as an exhibit to
the registration statement and to the reference to me under the
caption "Legal Matters" in the Prospectus that constitutes a part
of the registration statement.
Very truly yours,
/s/Christopher A. Head
Christopher A. Head
Executive Vice President
and General Counsel
<PAGE 38>
Exhibit 15.1
With respect to this registration statement, we acknowledge our
awareness of the use herein of our reports dated July 17, 1998,
October 19, 1998, and January 21, 1999 related to our reviews of
interim financial information.
Pursuant to rule 436(c) under the Securities Act of 1933 (the
Act), such reports are not considered part of a registration
statement prepared or certified by an accountant or a report
prepared or certified by an accountant within the meaning of
section 7 and 11 of the Act.
Very truly yours,
/S/KPMG LLP
KPMG LLP
Buffalo, New York
August 3, 1999
<PAGE 39>
Exhibit 23.2
Consent Of Independent Auditors
We consent to the use of our reports dated May 14, 1999, on the
consolidated financial statements of Comptek Research, Inc. and
subsidiaries as of March 31, 1999 and 1998 and for each of the
years in the three-year period ended March 31, 1999 and the
related financial statement schedule incorporated by reference
herein and to the reference to our firm under the heading
"Experts" in the prospectus.
/s/KPMG LLP
KPMG LLP
Buffalo, New York
August 3, 1999
<PAGE 40>
Exhibit 23.3
Consent Of Independent Auditors
We consent to the use of our report dated June 12, 1998 on the
consolidated financial statements of Amherst Systems, Inc. as of
April 30, 1997 and 1998 and for each of the years in the three-
year period ended April 30, 1998, incorporated by reference
herein and to the reference to our firm under the heading
"Experts" in the prospectus.
/s/KPMG LLP
KPMG LLP
Buffalo, New York
August 3, 1999
<PAGE 41>
Exhibit 23.4
Independent Auditors' Consent
We consent to the incorporation by reference in this registration
statement on Form S-2 of Comptek Research, Inc., of our report
dated March 27, 1998 with respect to the consolidated balance
sheets of PRB Associates, Inc., and Subsidiaries as of December
31, 1997 and 1996, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the
years in the two-year period ended December 31, 1997, which
appears in Form 8-K/A of Comptek Research, Inc. dated July 27,
1998. We also consent to the reference to us under the heading
Experts in the prospectus which is part of this registration
statement.
/s/Deloitte & Touche LLP
Deloitte & Touche LLP
McLean, Virginia
August 3, 1999
<PAGE 42>
