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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-9
(RULE 14d-101)
SOLICITATION/RECOMMENDATION STATEMENT UNDER SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
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Comptek Research, Inc.
(Name of Subject Company)
Comptek Research, Inc.
(Name of Person(s) Filing Statement)
Common Stock, Par Value $.02 Per Share
(Title of Class of Securities)
204682108
(CUSIP Number of Class of Securities)
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Christopher A. Head, Esq.
Executive Vice President, General Counsel and Secretary
Comptek Research, Inc.
2732 Transit Road
Buffalo, New York 14224-2523
(716) 677-4070
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of the Person(s) Filing Statement)
with copies to:
<TABLE>
<C> <S>
James R. Tanenbaum, Esq. Richard S. Forman, Esq.
Stroock & Stroock & Lavan LLP Stroock & Stroock & Lavan LLP
180 Maiden Lane 2029 Century Park East
New York, New York 10038 Los Angeles, California 90067
(212) 806-5400 (310) 556-5800
</TABLE>
[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
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<PAGE>
This Amendment No. 2 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9"), initially filed with the
Securities and Exchange Commission (the "SEC") on July 6, 2000, by Comptek
Research, Inc., a New York corporation ("Comptek"), as amended by Amendment No.
1 thereto filed with the SEC on July 11, 2000 relating to the offer by Northrop
Grumman Corp., a Delaware corporation ("Northrop"), through its wholly owned
subsidiary, Yavapai Acquisition Corporation, a Delaware corporation
("Acquisition Sub"). Unless otherwise defined herein, all capitalized terms
used herein shall have the respective meanings given such terms in the Schedule
14D-9.
Item 2. Identity And Background Of Filing Person.
Item 2 of the Schedule 14D-9 is hereby amended to read as follows:
The name, business address and business telephone number of Comptek, which
is the person filing this Schedule 14D-9, are set forth in Item 1 above.
This Schedule 14D-9 relates to the Offer by Northrop, through its wholly
owned subsidiary, Acquisition Sub, disclosed in a tender offer statement on
Schedule TO dated July 6, 2000 (together with any amendments or supplements
thereto, the "Schedule TO"), to exchange each outstanding Share for such number
of shares of the common stock, par value $1.00 per share, of Northrop (the
"Northrop Common Stock") equal to the quotient obtained by dividing $20.75 by
the Final Average Closing Price (as defined below) (the "Exchange Ratio"),
subject to adjustment as set forth below, upon the terms and subject to the
conditions set forth in the Prospectus (as defined below) and in the related
letter of transmittal (the "Letter of Transmittal" which, together with the
Prospectus, constitute the "Offer"). Northrop is making the Offer pursuant to
the Agreement and Plan of Merger, dated as of June 12, 2000, as amended to the
date of the Schedule 14D-9, by and among Northrop, Acquisition Sub and Comptek
(the "Merger Agreement"). On August 7, 2000, Northrop, Acquisition Sub and
Comptek signed an amendment to the Merger Agreement (the "First Amendment").
The Exchange Ratio will be adjusted as follows: if the Final Average Closing
Price of Northrop Common Stock is (i) equal to or less than $74.00, then the
Exchange Ratio shall be 0.2804 or (ii) equal to or greater than $84.00, then
the Exchange Ratio shall be 0.2470; provided, however, that if the Final
Average Closing Price is less than $74.00, Comptek shall have the right to
terminate the Merger Agreement if Comptek gives written notice to Northrop and
Acquisition Sub within one business day prior to the expiration date of the
Offer; provided, further, however, that such termination shall not be effective
if Northrop, in the exercise of its sole discretion, elects, by written notice
to Comptek within one business day to issue additional shares of Northrop
Common Stock sufficient to equal the value to be received if the Final Average
Closing Price had been $74.00 (the "Make Whole Right"). For purposes of the
Offer and this Schedule 14D-9, "Final Average Closing Price" means the average
of the per share closing sales price of Northrop Common Stock, rounded to four
decimal places, as reported under "NYSE Composite Reports" in The Wall Street
Journal for each of the 20 New York Stock Exchange ("NYSE") trading days in the
period ending two business days prior to the expiration of the Offer, as
extended or supplemented in accordance with the terms of the Merger Agreement.
The Merger Agreement provides that, among other things, as soon as
practicable following the satisfaction or waiver of the conditions set forth in
the Merger Agreement, Acquisition Sub will be merged with and into Comptek (the
"Merger"), and Comptek will continue as the surviving corporation (the
"Surviving Corporation"). At the effective time of the Merger (the "Effective
Time"), each Share then outstanding (excluding (i) those held in Comptek's
treasury, (ii) those owned by any wholly owned subsidiary of Comptek, (iii)
those owned by Northrop, Acquisition Sub or any subsidiary of either Northrop
or Acquisition Sub, and (iv) those as to which appraisal rights, if any, have
been exercised) will be converted into the right to receive such number of
fully paid and nonassessable shares of Northrop Common Stock as is equal to the
Exchange Ratio finally established for the Offer. Copies of the Merger
Agreement and the First Amendment are filed herewith as Exhibits (e)(1) and
(e)(1)(A), respectively, and are incorporated herein by reference.
The Merger Agreement requires Northrop to prepare and file with the SEC a
registration statement on Form S-4 to register the offer and sale of Northrop
Common Stock pursuant to the Offer (such registration
1
<PAGE>
statement, as amended from time to time, is referred to herein as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). The Registration Statement, at the time of the initial
filing thereof, will include a preliminary prospectus (the "Preliminary
Prospectus") containing the information required under Rule 14d-4(b)
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The prospectus included in the Registration Statement at the
time it is declared effective by the SEC, including all information deemed to
be included therein, as supplemented from time to time, is referred to herein
as the "Prospectus." As soon as practicable on the date of commencement of the
Offer, Northrop and Acquisition Sub shall (i) file with the SEC the Schedule TO
which will contain or incorporate by reference all or part of the Preliminary
Prospectus and the Letter of Transmittal (such Schedule TO, collectively with
such Preliminary Prospectus and Letter of Transmittal, the "Offer Documents"),
and (ii) cause the Offer Documents to be disseminated to holders of Shares.
Copies of the Preliminary Prospectus and the Letter of Transmittal are filed
herewith as Exhibits (a)(6) and (a)(2), respectively, and are incorporated
herein by reference.
The Schedule TO states that the principal executive offices of Northrop and
Acquisition Sub are located at 1840 Century Park East, Los Angeles, CA 90067.
Item 3. Past Contacts, Transactions, Negotiations And Agreements.
Item 3 of the Schedule 14D-9 is hereby amended to read as follows:
The information contained under the caption "Interests of Comptek Officers
and Directors in the Merger" in the Prospectus and in the Information Statement
which is attached hereto as Schedule I is incorporated herein by reference.
Each material agreement, arrangement or understanding and any actual or
potential conflict of interest between Comptek or its affiliates and (i)
Comptek's executive officers, directors or affiliates or (ii) Northrop or
Acquisition Sub or their respective executive officers, directors or
affiliates, is either incorporated herein by reference as a result of the
previous sentence or set forth below.
Treatment Of Options
The Merger Agreement provides that each outstanding option to purchase
Shares which has been granted to certain employees (each, an "Option"),
including the executive officers and non-employee directors of Comptek (each, a
"Management Option"), shall become fully vested and exercisable commencing ten
business days prior to the consummation of the Offer and the Options shall be
converted into options to purchase shares of Northrop Common Stock upon
consummation of the Offer. The Management Options were issued pursuant to
Comptek's 1992 Equity Incentive Plan, as amended, 1994 Stock Option Plan for
Non-Employee Directors or 1998 Equity Incentive Stock Plan (collectively, the
"Comptek Equity Plans"). Under the terms of the Comptek Equity Plans, all of
the Management Options are subject to acceleration of vesting and
exercisability upon a "change in control", which would be triggered by the
consummation of the Offer or the Merger.
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The following table sets forth, with respect to each of the executive
officers and the non-employee directors of Comptek:
. the number of Shares subject to Options held by such persons that will be
exercisable immediately prior to the consummation of the Offer (including
Options that are currently exercisable as well as Options which will
become exercisable in connection with the transactions contemplated by
the Merger Agreement);
. the weighted average exercise price of the Options held by such persons;
and
. the aggregate net cash value of such Options, computed by subtracting the
total exercise price for such Options (based on the weighted average
exercise price) from the total value of the shares of Comptek Common
Stock issuable upon exercise of such Options (based on $20.75, which is
the value of the shares of Northrop Common Stock issuable for each Share
pursuant to the Offer).
<TABLE>
<CAPTION>
Weighted
Options Which Average Aggregate Net
Will Be Exercise Price Cash Value Of
Name(1) Exercisable Per Share Options
------- ------------- -------------- -------------
<S> <C> <C> <C>
Joseph A. Alutto..................... 36,000 $11.7465 $ 324,126.00
Laura L. Benedetti................... 57,685 7.7646 749,062.80
Chris Boehm.......................... 25,000 16.00 118,750.00
John R. Cummings..................... 34,000 8.0809 430,749.00
Edward G. Eberl...................... 20,000 8.125 252,500.00
Bradley H. Feldmann.................. 35,000 9.5804 390,936.00
G. Wayne Hawk........................ 36,000 11.7465 324,126.00
Christopher A. Head.................. 88,568 6.2712 1,282,358.36
Patrick J. Martin.................... 31,000 12.2702 262,873.80
Wayne E. Meyer....................... 24,000 9.0313 281,248.80
James D. Morgan...................... 16,900 7.1043 230,612.33
Lawrence M. Schadegg................. 0 -- --
John J. Sciuto....................... 158,074 5.9808 2,334,626.52
Henry P. Semmelhack.................. 36,000 11.7465 324,126.00
</TABLE>
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(1) Includes, with respect to the following individuals, unvested Options in
the amounts set forth next to their names, the vesting of which will be
accelerated as a result of the transactions contemplated by the Merger
Agreement: Laura L. Benedetti (28,812); Chris Boehm (25,000); Edward G.
Eberl (20,000); Bradley H. Feldmann (35,000); Christopher A. Head (20,843);
James D. Morgan (6,667); and John J. Sciuto (46,667).
Change of Control Severance Agreements
Comptek has entered into change of control agreements dated December 31,
1999 with each of Messrs. Sciuto, Head, and Feldmann and Mrs. Benedetti (the
"Change of Control Agreements"). The terms of each Change of Control Agreement
are substantially the same. Each Change of Control Agreement provides that if
the employee's employment is terminated by Comptek without cause or the
employee terminates his employment for good reason, in either case upon or
within two years following the occurrence of a "change of control", the
employee shall be provided, among other things, a lump sum payment equal to
1.99 times the employee's annual base salary and target bonus. The employee
shall also be entitled to continue to participate for a period of two years in
each of Comptek's employee benefits plans which provide insurance and medical
benefits on the same basis as was provided to the employee prior to
termination.
In addition, each Change of Control Agreement provides for Comptek to pay on
behalf of the employee, any excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), on any payment
or benefit provided by Comptek deemed to be in connection with a change of
control, together with a gross-up payment to satisfy any income taxes
(including interest and penalties) imposed related to the payment of the excise
tax. These additional excise tax related payments are not limited to severance
benefits, but apply to any other benefits or payments received by the employee
and deemed to be in connection with a change of control. Each Change of Control
Agreement provides for an acceleration of vesting and exercisability of all
Management Options upon a change of control.
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The consummation of the Offer and the Merger will constitute a "change of
control" within the meaning of the Change of Control Agreements.
The following table sets forth, with respect to each of the executives party
to a Change of Control Agreement, the total amount that would be payable to
such executive if such executive's employment by Comptek were terminated
without good cause or if such executive were to terminate his or her employment
with good reason, in either case within two years following the consummation of
the Offer or the Merger (based upon such executive's base salary and target
bonus in effect on the date of this Schedule 14D-9):
<TABLE>
<CAPTION>
Salary &
Bonus
Name Payout(1)
---- ---------
<S> <C>
Laura L. Benedetti................................................. $398,000
Bradley H. Feldmann................................................ $517,400
Christopher A. Head................................................ $507,450
John J. Sciuto..................................................... $935,300
</TABLE>
--------
(1) The salary and bonus payout does not reflect the value to the executives of
continuing to participate in each of Comptek's employee benefit plans which
provide insurance or medical benefits. The payout amounts also do not
reflect the fact that Comptek has agreed to pay on behalf of the executives
any excise tax imposed as well as any "gross-up" payment to satisfy any
income tax imposed related to the payment of the excise tax.
The payments to the four executive officers described herein arising
pursuant to the Change of Control Agreements would be in addition to any
payments due to such four executives pursuant to their respective employment
agreements following any voluntary or involuntary termination of employment.
See "Employment Agreements" in the Information Statement included as Schedule I
to this Schedule 14D-9.
Change of Control Option Exercise Agreements
Pursuant to letter agreements dated March 20, 2000 between Comptek and each
of Messrs. Sciuto, Head, and Feldmann and Mrs. Benedetti (the "Option Letter
Agreements"), Comptek has agreed to pay each such executive officer an amount
equal to 50% of the reportable taxable income as a result of the exercise of
Options and subsequent disposition of shares of Comptek Common Stock in
connection with a "change of control". The consummation of the Offer and the
Merger will constitute a "change of control" of Comptek within the meaning of
the Option Letter Agreements.
Employee Benefit Plans
Pursuant to the terms of the Merger Agreement, Northrop has agreed to
provide all employees of Comptek, who remain employed after the Effective Time,
with industry competitive benefits as compared with similarly situated
employees at comparable companies, excluding (i) the Comptek Equity Plans,
and (ii) Comptek's 1999 Employee Stock Purchase Plan. Furthermore, from and
after the Effective Time, until the first anniversary of the Effective Time
such benefits shall be at least comparable, in the aggregate for each employee,
to the benefits maintained for such employee by Comptek prior to the closing of
the Merger (the "Closing").
Payment in connection with Stock Loans
In July of 1996 and February and March of 1999, John J. Sciuto executed
promissory notes totaling $317,254 in favor of Comptek Federal Systems, Inc., a
subsidiary of Comptek. Comptek Federal Systems, Inc. provided the loans to Mr.
Sciuto to facilitate his purchase of 62,178 shares of Comptek Common Stock and
for the payment of estimated alternative minimum taxes. As of June 12, 2000,
the outstanding balance on Mr. Sciuto's loans was $129,325.00. On June 12,
2000, the Board of Directors of Comptek (the "Comptek
4
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Board") adopted a resolution providing that in connection with the consummation
of the Offer, Comptek shall pay to Mr. Sciuto $193,987.50, an amount equal to
the outstanding balance on the loans from Comptek Federal Systems, Inc. and a
tax gross-up of 50%. Mr. Sciuto has agreed to use said sums for the repayment
of these stock loans from Comptek Federal Systems, Inc.
Directors and Officers Insurance and Indemnification
The Merger Agreement provides that, for six years after the Effective Time,
Comptek, as the Surviving Corporation, will indemnify and hold harmless the
current and former directors and officers of Comptek (the "Indemnified
Parties") in respect of matters pertaining to their service as such officers or
directors existing or occurring at or prior to the Effective Time to the
fullest extent that Comptek would have been permitted under New York law and
its charter documents (each as in effect on the date hereof) to indemnify such
Indemnified Parties. Northrop has agreed that Comptek shall maintain in effect
insurance reasonably comparable to the directors' and officers' liability
insurance policies maintained by Comptek immediately prior to the Effective
Time; provided, however that Comptek will not be required to expend in any one
year in excess of 150% of the annual premium currently paid by Comptek for such
coverage immediately prior to the Effective Time. The provisions with respect
to indemnification set forth in the certificate of incorporation of Surviving
Corporation shall not be amended, repealed or otherwise modified for a period
of six years from the Effective Time in any manner that would affect adversely
the rights thereunder of individuals who at or at any time prior to the
Effective Time were directors, officers, employees or agents of Comptek.
Merger Agreement
The following is a summary of certain material provisions of the Merger
Agreement. This summary is qualified in its entirety by reference to the
complete text of the Merger Agreement, a copy of which is filed herewith as
Exhibit (e)(1) and is incorporated herein by reference.
Conditions of the Offer. The Offer is subject to a number of conditions
which are described below:
(1) There must be validly tendered in accordance with the terms of the
Offer prior to the expiration date of the Offer, and not withdrawn, a
number of Shares which, together with the Shares then owned by Northrop and
Acquisition Sub, represents at least 66.67% of the total number of
outstanding Shares on a fully diluted basis (as though all outstanding
options, rights and other securities convertible into or exercisable or
exchangeable for Shares had been converted, exercised or exchanged in
accordance with their terms) as of the date that Northrop accepts the
Shares pursuant to the Offer (the "Minimum Tender Condition"). On August
15, 2000, the number of Shares needed to satisfy the Minimum Tender
Condition would have been 5,132,378.
(2) The waiting period, and any extension thereof, under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 ("HSR Act") and any other
applicable antitrust law, must have expired or been terminated.
(3) The Registration Statement must have become effective under the
Securities Act and must not be the subject of any stop order or proceedings
seeking a stop order.
(4) The shares of Northrop Common Stock issuable to Comptek shareholders
in the Offer and the Merger must have been approved for listing on the
NYSE, subject to official notice of issuance.
(5) The Offer is also subject to the conditions that, at any time on or
after the date of the Merger Agreement and prior to the time of acceptance
for exchange of Shares pursuant to the Offer:
(a) there shall not have been instituted or pending any action or
proceeding by any governmental entity, (i) challenging or seeking
to make illegal, to delay materially or otherwise directly or
indirectly to restrain or prohibit the making of the Offer, the
acceptance for exchange of, or the exchange or delivery of shares
of Northrop Common Stock for, some of or all the Shares by
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Northrop or Acquisition Sub or the consummation by Northrop or
Acquisition Sub of the Merger, seeking to obtain material damages or
otherwise directly or indirectly relating to the transactions
contemplated by the executed agreement between Acquisition Sub and
certain shareholders of Comptek dated June 15, 2000 (the "Tender
Agreement"), the Merger Agreement, the Offer or the Merger, (ii) seeking
to restrain or prohibit the Northrop's or Acquisition Sub's ownership or
operation (or that of their respective subsidiaries or affiliates) of
all or any portion of the business or assets of Comptek and its
subsidiaries, taken as a whole, or of Northrop and its subsidiaries,
taken as a whole, or to compel Northrop or any of its subsidiaries or
affiliates to dispose of or hold separate all or any portion of the
business or assets of Comptek and its subsidiaries, taken as a whole, or
of Northrop and its subsidiaries, taken as a whole, (iii) seeking to
impose limitations on the ability of Northrop or any of its subsidiaries
or affiliates effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote any Shares
acquired or owned by Northrop or any of its subsidiaries or affiliates
on all matters properly presented to Comptek's shareholders, or (iv)
seeking to require divestiture by Northrop or any of its subsidiaries or
affiliates of any Shares;
(b) there shall not be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted,
enforced, promulgated, issued or deemed applicable to the Merger
Agreement, the Offer or the Merger, by any governmental entity
that, in the reasonable judgment of Northrop, is reasonably likely,
directly or indirectly, to result in any of the consequences
referred to in clauses (i) through (iv) of the immediately
preceding paragraph;
(c) (i) Comptek's representations and warranties in the Merger
Agreement that are qualified as to materiality shall be true and
correct (except to the extent expressly made as an earlier date, in
which case as of such date), or any of the representations and
warranties that are not qualified as to materiality shall be true
and correct in all material respects (except to the extent
expressly made as an earlier date, in which case as of such date);
and (ii) there shall not be a material breach of any of the
covenants of Comptek set forth in the Merger Agreement; provided,
however, that Comptek shall not be deemed in material breach of its
obligations thereunder if any such breach is cured within ten
business days after receipt by Comptek of written notice of such
breach from Northrop, if such cure can be accomplished before the
Offer expires without any extension thereof;
(d) there shall not have been any change in or effect on the business
of Comptek or its subsidiaries that, individually or in the
aggregate (taking into account all other such changes or effects),
is, or is reasonably likely to be, materially adverse to the
business, assets, liabilities, financial condition or results of
operations of Comptek and its subsidiaries, taken as a whole (a
"Comptek Material Adverse Effect"); provided, however, that
"Comptek Material Adverse Effect" shall not be deemed to include
the impact of (a) changes in generally accepted accounting
principles, (b) acts or omissions of Comptek taken with the prior
written consent of Northrop, (c) changes in general economic or
industry conditions, (d) the compliance by Comptek with the
provisions of the Merger Agreement and the effects of the Offer and
the Merger on the business, assets, liabilities, financial
condition or results of operations of Comptek and its subsidiaries,
(e) any change in the market price or trading volume of the Comptek
Common Stock, and (f) any changes or effects as a result of the
announcement of the Offer and the Merger;
(e) the Merger Agreement shall not have been terminated in accordance
with its terms;
(f) (i) the Comptek Board (or any committee thereof) shall have
approved and shall have made a recommendation of the Offer, the
Merger and the Merger Agreement and shall have not withdrawn or
materially modified or amended in a manner adverse to Northrop or
Acquisition Sub its approval or recommendation of the Offer, the
Merger or the Merger Agreement; and (ii) the Comptek Board (or any
committee thereof) shall have not recommended to the shareholders
of Comptek any Comptek Superior Proposal (as defined below) or
resolved to, or publicly announced an intention to, do so;
6
<PAGE>
(g) Comptek shall not have entered into, or publicly announced its
intention to enter into, an agreement or agreement in principle
(other than certain confidentiality agreements permitted by the
Merger Agreement) with respect to any Comptek Superior Proposal (as
defined below under "--Other Offers");
(h) no person or "group" (as defined in Section 13(d)(3) of the
Exchange Act), other than Northrop or any of its subsidiaries,
shall have become the "beneficial owner" (as defined in Rule 13d-3
promulgated under the Exchange Act) of at least 20% of the
outstanding Shares or shall have acquired, directly or indirectly,
at least 20% of the assets of Comptek and its subsidiaries, which,
in the good faith judgment of Northrop in any such case, and
regardless of the circumstances (including any action or omission
by Northrop or Acquisition Sub) giving rise to any such condition,
makes it inadvisable to proceed with such acceptance for exchange;
and
(i) (i) Northrop shall have been furnished with evidence satisfactory
to it of the consent or approval of those certain third parties
listed in the Merger Agreement whose consent or approval may be
required in connection with the Offer and the Merger; (ii) certain
key employees of Comptek or its subsidiaries listed in the Merger
Agreement shall have executed and delivered employment agreements
and non-competition agreements reasonably acceptable to Northrop
and at least three out of the six other key employees listed in the
Merger Agreement shall have executed and delivered employment
agreements and non-competition agreements reasonably acceptable to
Northrop; and (iii) Comptek shall have terminated all contracts
with foreign consultants of Comptek or its subsidiaries for which
Northrop has requested such termination at least 45 days prior to
Effective Time.
Notwithstanding the foregoing conditions to the Offer, the Comptek Board (or
any committee thereof) may (1) withdraw or materially modify or amend in a
manner adverse to Northrop or Acquisition Sub its approval or recommendation of
the Offer, the Merger or the Merger Agreement or (2) may recommend to the
shareholders of Comptek any Company Superior Proposal or may resolve to, or
publicly announce an intention to, do so, if:
(x) the representations and warranties of Northrop set forth in the
Merger Agreement that are qualified as to materiality shall become untrue
or incorrect (except to the extent expressly made as of an earlier date, in
which case as of such date), or any of the representations and warranties
set forth in the Merger Agreement that are not so qualified shall become
untrue or incorrect in any material respect (except to the extent expressly
made as of an earlier date, in which case as of such date);
(y) there shall be a material breach of any of the covenants of Northrop
set forth in the Merger Agreement; provided, however, that Northrop shall
not be deemed in material breach of its obligations under the Merger
Agreement or any representation or warranty if any such breach is cured
within ten business days after receipt by Northrop of written notice of
such breach from Comptek, if such cure can be accomplished before the Offer
expires without any extension thereof; or
(z) there shall have been any change in or effect on the business of
Northrop and its subsidiaries that, individually or in the aggregate
(taking into account all other such changes or effects), is, or is
reasonably likely to be, materially adverse to the business, assets,
liabilities, financial condition or results of operations of Northrop and
its subsidiaries, taken as a whole (a "Northrop Material Adverse Effect");
provided, however, that "Northrop Material Adverse Effect" shall not be
deemed to include the impact of (a) changes in generally accepted
accounting principles, (b) acts or omissions of Northrop taken with the
prior written consent of Comptek, (c) changes in general economic or
industry conditions, (d) the compliance by Northrop or Acquisition Sub with
the provisions of the Merger Agreement and the effects of the Offer and the
Merger on the business, assets, liabilities, financial condition or results
of operations of Northrop and its subsidiaries, taken as a whole, (e) any
change in the market price or trading volume of Northrop Common Stock, and
(f) any changes or effects as a result of the announcement of the Offer and
the Merger.
7
<PAGE>
Amending the Offer. Pursuant to the Merger Agreement, Northrop agreed that,
without the prior written consent of Comptek, no change may be made to the
Offer which:
. changes the form or amount of consideration to be paid;
. imposes conditions to the Offer in addition to those set forth in the
Merger Agreement;
. changes or waives the Minimum Tender Condition;
. extends the Offer (except as set forth below under "--Expiration or
Termination of the Offer"); or
. makes any other change to any condition to the Offer set forth in the
Merger Agreement which is adverse to the holders of Shares.
Consideration. The Merger Agreement provides for the consideration that
Northrop will pay in the Offer, including the Exchange Ratio and the
adjustments, if any, to the Exchange Ratio.
Expiration or Termination of the Offer. Pursuant to the Merger Agreement,
Northrop agreed that if, at the scheduled expiration date of the Offer, the
conditions to the Offer shall not have been satisfied or waived, other than
several specified conditions, unless there is no reasonable possibility of all
of the conditions to the Offer being satisfied on or before October 31, 2000,
Northrop will extend the expiration date of the Offer for an additional period
or periods of time, each of which being no longer than 15 business days, until
the date that such conditions are satisfied or waived and Northrop becomes
obligated to accept for payment and pay for Shares tendered pursuant to the
Offer. However, if at any scheduled expiration date of the Offer, all of the
conditions to the Offer have been satisfied or waived other than the Minimum
Tender Condition, Northrop will only be required to extend the Offer for an
additional 20 business days following such scheduled expiration date.
The Merger. If the conditions to the Merger are satisfied or waived in
accordance with the Merger Agreement and in accordance with the General
Corporation Law of the State of Delaware (the "DGCL") and the Business
Corporation Law of the State of New York (the "BCL"), then at the Effective
Time Acquisition Sub will merge with and into Comptek. Comptek will survive the
Merger as a wholly owned subsidiary of Northrop.
Effective Time of the Merger. The Merger will become effective upon the
filing of (i) a certificate of merger with the Secretary of State of the State
of Delaware in such form as is required by, and executed in accordance with,
the relevant provisions of the DGCL and (ii) a certificate of merger with the
Secretary of State of the State of New York in such form as required by, and
executed in accordance with, the relevant provisions of the BCL or at such
later date and time as agreed by Northrop and Comptek and set forth in such
certificates of merger.
Additional Effects of the Merger. Upon completion of the Merger:
. each outstanding share of Comptek Common Stock (other than any shares of
Comptek Common Stock owned by Northrop, held by Comptek as treasury
stock, or owned by any of their respective subsidiaries) will be
converted into and become the right to receive the amount and type of
consideration received by Comptek shareholders who tendered their Shares
in the Offer;
. each outstanding share of capital stock of Acquisition Sub will be
converted into and become one share of common stock of Comptek, as the
Surviving Corporation;
. the directors and officers of Acquisition Sub at the Effective Time will
become the directors and officers of Comptek, as the Surviving
Corporation;
. the certificate of incorporation of Comptek in effect immediately prior
to the Effective Time will be amended and restated as of the Effective
Time so as to read substantially the same as the certificate of
incorporation of Acquisition Sub, and, as so amended, such certificate of
incorporation shall be the certificate of incorporation of Comptek, as
the Surviving Corporation; and
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. the bylaws of Comptek in effect immediately prior to the Effective Time
will be amended and restated in their entirety to read substantially the
same as the bylaws of Acquisition Sub, and, as so amended, such bylaws
shall be the bylaws of Comptek, as the Surviving Corporation.
Exchange Agent. At or prior to the Effective Time, Northrop shall enter into
an agreement with a bank or trust company that is reasonably acceptable to
Comptek, to act as exchange agent for the Merger (the "Exchange Agent") with
which Northrop shall deposit any required cash and certificates representing
the number of whole shares of Northrop Common Stock issuable pursuant to the
Merger Agreement in exchange for outstanding shares of Comptek Common Stock.
Soon after the Effective Time, the Exchange Agent will send a letter to each
person who was a Comptek shareholder at the Effective Time containing
instructions on how to surrender Comptek stock certificates to the Exchange
Agent and receive shares of Northrop Common Stock and cash, if any cash is
payable.
Dividends. Holders of Shares will not be entitled to receive any dividends
or other distributions payable by Northrop until they exchange the stock
certificates representing their Shares for certificates representing shares of
Northrop Common Stock. Once holders deliver their Comptek stock certificates to
the Exchange Agent, they will receive, subject to applicable laws, accumulated
dividends and distributions, without interest.
Fractional Shares. No scrip or fractional shares of Northrop Common Stock
will be issued upon the surrender of certificates representing Shares. An
outstanding fractional share interest shall not entitle the owner thereof to
vote, to receive dividends or to any rights of a shareholder of Northrop or of
the Surviving Corporation with respect to such fractional share interest.
Holders of Shares otherwise entitled to fractional shares of Northrop Common
Stock will receive a cash payment instead of such fractional shares. No later
than the Closing, Northrop shall deposit with the Exchange Agent an amount in
cash sufficient for the Exchange Agent to pay each holder of Comptek Common
Stock an amount in cash, rounded to the nearest whole cent, equal to the
product obtained by multiplying (i) the fractional share interest to which such
holder would otherwise be entitled by (ii) the Final Average Closing Price, or
$74.00, if the Make Whole Right is exercised.
As soon as practicable after the determination of the amount of cash to be
paid to holders of Shares with respect to any fractional share interests, if
any, the Exchange Agent will make available such amounts, net of any required
withholding taxes, to such holders of Comptek Common Stock, subject to and in
accordance with the terms of the Merger Agreement.
Comptek Board of Directors. Upon acceptance for exchange of Shares in the
Offer, Northrop will be entitled to designate a number of directors of Comptek,
rounded up to the next whole number, that bears the same proportion to the
total number of directors of Comptek as the proportion of the total number of
shares of Comptek Common Stock then held by Northrop bears to the total number
of outstanding shares of Comptek Common Stock, provided that until the Merger
has been consummated, the Comptek Board shall always have at least two members
(the "Continuing Directors") who were directors of Comptek prior to
consummation of the Offer. The Merger Agreement provides that, prior to the
Effective Time, if Northrop's designees are elected to the Comptek Board, the
affirmative vote of the Continuing Directors will be required to:
. amend or terminate the Merger Agreement;
. waive any of Comptek's rights, benefits or remedies under the Merger
Agreement;
. extend the time for performance of Northrop's or Acquisition Sub's
obligations under the Merger Agreement; or
. approve any other action by Comptek which is reasonably likely to
adversely affect the interests of Comptek's shareholders, other than
Northrop, Acquisition Sub or their affiliates, with respect to the
transactions contemplated by the Merger Agreement.
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Representations and Warranties. The Merger Agreement contains customary
representations of Comptek and Northrop (including its wholly owned merger
subsidiary, Acquisition Sub) relating to, among other things:
. corporate existence, corporate organization, and similar corporate
matters;
. with respect to Comptek only, ownership of subsidiaries;
. capital structure;
. corporate authority to enter into, and carry out the obligations under,
the Merger Agreement and the enforceability of the Merger Agreement;
. absence of a conflict with or violation of the certificate of
incorporation, bylaws, or laws, or, with respect to Comptek only, any
material agreement, as a result of the transactions contemplated by the
Merger Agreement;
. required filings and consents, approvals, authorizations and permits of
governmental authorities relating to the Merger Agreement and related
matters;
. possession of permits and compliance with applicable laws;
. documents filed with the SEC and stock exchanges and the accuracy of
information contained in those documents;
. financial statements and the absence of undisclosed liabilities;
. with respect to Northrop only, the accuracy of information supplied in
connection with its Prospectus and the Registration Statement and of
information supplied or to be supplied by Northrop or Acquisition Sub for
inclusion or incorporation by reference in this Schedule 14D-9 or
Comptek's proxy statement relating to the meeting of shareholders of
Comptek, if required, for the purpose of obtaining shareholder approval
of the Merger and the Merger Agreement (the "Comptek Proxy Statement");
. absence of material changes or events;
. with respect to Comptek only, matters relating to the Employee Retirement
Income Security Act of 1974, employee benefits, employment agreements,
and consultants;
. with respect to Comptek only, contracts, litigation, environmental
matters, intellectual property matters, insurance, title to properties,
and affiliates;
. filing of tax returns and payment of taxes;
. with respect to Comptek only, the opinion of its financial advisor;
. engagement and payment of fees to brokers, finders, or investment
bankers;
. with respect to Comptek only, absence of certain improper business
practices, pending claims or investigations, and business activity
restrictions;
. with respect to Comptek only, inapplicability of state takeover statutes
and absence of dissenters' rights in connection with the Offer;
. with respect to Comptek only, shareholder votes required for approval of
the Merger Agreement and the transactions contemplated thereby; and
. with respect to Northrop only, authority to issue the shares of Northrop
Common Stock in connection with the Offer and the Merger and lack of any
ownership by Northrop or Acquisition Sub of any capital stock of Comptek.
In addition, the parties have also represented to one another that they are
unaware of any circumstance or event that would prevent the Merger from being
treated as a tax-free reorganization pursuant to Section 368(a) of the Internal
Revenue Code.
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The representations and warranties contained in the Merger Agreement do not
survive the Effective Time of the Merger.
Conduct of Business Pending the Merger. Comptek has agreed that in order to
preserve substantially intact its business organization, unless Northrop
otherwise agrees in writing, Comptek and its subsidiaries will (1) conduct
their businesses only in, and not take any action except in, the ordinary
course of business consistent with past practice, (2) use all reasonable
efforts to keep available the services of current officers, significant
employees and consultants, and (3) preserve current, significant business
relationships with corporate partners, customers, suppliers and other persons.
Comptek has agreed that, except as otherwise provided by the Merger Agreement,
neither Comptek nor its subsidiaries will do any of the following without the
prior written consent of Northrop:
. amend its certificate of incorporation or bylaws;
. authorize, issue, sell, pledge, dispose of, grant, transfer, lease,
license, guarantee or encumber any shares of capital stock of Comptek or
any of its subsidiaries other than pursuant to (1) the exercise of
Options outstanding as of the date of the Merger Agreement, (2) the grant
after the date of the Merger Agreement of options to newly hired
employees in the ordinary course of business consistent with past
practice and in each case subject to the prior approval of Northrop
before grant, provided, that such additional amount of Comptek Common
Stock subject to such options shall not exceed 25,000 shares in the
aggregate or (3) Comptek's 1999 Employee Stock Purchase Plan in the
ordinary course of business consistent with past practice, provided that
Comptek shall take all necessary action to suspend offering of such
shares as of July 1, 2000;
. sell, pledge, dispose of, grant, transfer, lease, license, guarantee, or
encumber any material property or assets of Comptek or any of its
subsidiaries except transactions pursuant to existing contracts or in the
ordinary course of business consistent with past practice;
. (1) acquire any interest in another entity, other than the purchase of
assets in the ordinary course of business consistent with past practice;
(2) incur any indebtedness; (3) terminate, cancel, or request or agree to
any material change in any material contract or license agreement; (4)
make or authorize capital expenditures totaling, in the aggregate, in
excess of $500,000; or (5) enter into or amend any contract, agreement,
commitment, or arrangement that if fully performed would not be permitted
by the foregoing restrictions;
. declare, set aside, make or pay any dividends with respect to any of its
capital stock;
. reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire any of its capital stock;
. amend or change the period of exercisability of, or authorize cash
payments in exchange for, options granted under the Comptek Stock
Incentive Plans;
. amend the terms of, repurchase, redeem or otherwise acquire any
securities of Comptek or any of its subsidiaries;
. increase the compensation payable to its directors, officers,
consultants, or employees; grant any rights to severance or termination
pay or enter into any new employment or severance agreement that provides
benefits upon a change in control that would be triggered by the Merger;
establish, adopt, enter into or amend any collective bargaining, bonus,
profit sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or arrangement
for the benefit of any director, officer, consultant or employee of
Comptek or any subsidiary of Comptek; or enter into or amend any
contract, agreement, commitment or arrangement between Comptek or any
subsidiary of Comptek and any of Comptek's directors, officers,
consultants or employees;
. pay, discharge, or satisfy any claims, liabilities or obligations other
than in the ordinary course of business and consistent with past practice
or as disclosed in Comptek's audited consolidated balance sheet as of
March 31, 1999 or on the disclosure schedule provided in connection with
the Merger Agreement;
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. except as required by any governmental entity, make any material change
with respect to its accounting practices;
. make any material tax election or settle or compromise any material tax
liability; or
. authorize or enter into any agreement or make any commitment to do any of
the foregoing or take any action which would make any of the
representations or warranties of Comptek untrue or incorrect or prevent
Comptek from performing its covenants.
Access to Information. Pursuant to the Merger Agreement, Comptek agreed,
except as required pursuant to any confidentiality agreement or similar
agreement or arrangement to which Northrop or Comptek or any of their
respective subsidiaries is a party or pursuant to applicable law, to provide
Northrop (and its representatives) access at reasonable times upon prior notice
to Comptek's and its subsidiaries' officers, employees, agents, properties,
offices and other facilities and to the books and records thereof, and (ii)
furnish promptly such information concerning Comptek's and its subsidiaries'
business, properties, contracts, assets, liabilities and personnel as Northrop
or its representatives may reasonably request.
Other Offers. The Merger Agreement provides that, from the date of the
Merger Agreement until the Effective Time or, if earlier, the termination of
the Merger Agreement, Comptek will not, whether directly or indirectly, and
shall cause its officers, directors, employees, accountants, consultants, legal
counsel, agents and other representatives not to, directly or indirectly:
. solicit, initiate or encourage (including by way of furnishing nonpublic
information), any inquiries or the making of any proposal or offer
(including, without limitation, any proposal or offer to its
shareholders) that constitutes, or may reasonably be expected to lead to,
any Company Competing Transaction (as defined below); or
. enter into or maintain or continue discussions or negotiate with any
Person in furtherance of such inquiries or to obtain a Company Competing
Transaction, or agree to endorse any Company Competing Transaction; or
. authorize or permit any of Comptek's representatives or any subsidiary of
Comptek, or any representative retained by any subsidiary of Comptek, to
take any such action;
provided, however, that if and only if:
. a person submits an unsolicited, bona fide written proposal regarding a
Company Competing Transaction; and
. the Comptek Board determines that such proposal is a Company Superior
Proposal;
then the Comptek Board may provide information under a confidentiality
agreement to the person making the Company Superior Proposal and participate in
negotiations and discussions regarding the Company Superior Proposal.
Additionally, in response to a Company Superior Proposal which was not
solicited by Comptek and which did not otherwise result from a breach of the
provisions of the Merger Agreement described above, Comptek may terminate the
Merger Agreement.
Comptek has agreed to notify Northrop promptly of any proposal or offer, or
any inquiry or contact with any person with respect thereto, regarding a
Company Competing Transaction, such notice to include the identity of the
person making such proposal, offer, inquiry or contact, and other terms of such
Company Competing Transaction. Comptek immediately shall cease and cause to be
terminated all existing discussions or negotiations with any parties conducted
heretofore with respect to any Comptek Competing Transaction. Comptek shall not
release any third party from, or waive any provision of, any confidentiality or
standstill agreement to which it is a party.
The right of Northrop and Comptek to terminate the Merger Agreement will
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any party hereto, any person controlling any such party
or any of their respective officers, directors, representatives or agents,
whether prior to or after the execution of the Merger Agreement.
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No provision of the Merger Agreement prohibits the Comptek Board from
taking, and disclosing to Comptek's shareholders, a position with respect to a
third party tender offer made pursuant to Rules 14d-9 and 14e-2.
The Merger Agreement provides that:
. the term "Company Competing Transaction" means any (i) merger,
consolidation, share exchange, business combination or similar
transaction; (ii) any sale, lease, exchange, transfer or other
disposition of 20% or more of the assets of Comptek or Comptek's
Subsidiaries, taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange offer for 20% or more of
the outstanding voting securities of Comptek or the filing of a
registration statement under the Securities Act in connection therewith;
(iv) any Person having acquired "beneficial ownership" (as such term is
defined under Section 13(d) of the Exchange Act) or the right to acquire
beneficial ownership of, or any "group" (as such term is defined under
Section 13(d) of the Exchange Act) having been formed which beneficially
owns or has the right to acquire beneficial ownership of, 33% or more of
the outstanding voting securities of Comptek; (v) any solicitation by
Comptek in opposition to the Offer; or (vi) any public announcement of a
proposal, plan or intention to do any of the foregoing or any agreement
to engage in any of the foregoing.
. the term "Company Superior Proposal" means a Company Competing
Transaction as to which: (i) the Comptek Board determines in good faith
(after considering applicable law and consulting with independent outside
counsel) that its fiduciary duties to Comptek's shareholders under
applicable law require that the Comptek Board provide information to, or
otherwise negotiate with, the acquiring party making such Company
Competing Transaction; (ii) if any cash consideration is involved, shall
not be subject to any financing contingency, and with respect to which
Comptek Board shall have determined in the proper exercise of its
fiduciary duties to Comptek's shareholders that the acquiring party is
reasonably capable of consummating such Company Competing Transaction on
the terms proposed; and (iii) the Comptek Board shall have determined in
good faith (after consulting with Comptek's independent financial
advisors of nationally recognized reputation) that such Company Competing
Transaction provides greater value, in the aggregate, to the shareholders
of the Company than the Merger.
Employee Benefits. Pursuant to the terms of the Merger Agreement, Northrop
has agreed to provide all employees of Comptek, who remain employed after the
Effective Time, with industry competitive benefits as compared with similarly
situated employees at comparable companies, excluding (i) the Comptek Equity
Plans and (ii) Comptek's 1999 Employee Stock Purchase Plan. Furthermore, from
and after the Effective Time, until the first anniversary of the Effective Time
such benefits shall be at least comparable, in the aggregate for each employee,
to the benefits maintained for such employee by Comptek prior to the Closing.
Directors and Officers Insurance and Indemnification. The Merger Agreement
provides that, for six years after the Effective Time, Comptek, as the
Surviving Corporation, will indemnify and hold harmless the current and former
directors and officers of Comptek in respect of matters pertaining to their
service as such officers or directors existing or occurring at or prior to the
Effective Time to the fullest extent that Comptek would have been permitted
under New York law and its charter documents (each as in effect on the date
hereof) to indemnify such Indemnified Parties. Northrop has agreed that Comptek
shall maintain in effect insurance reasonably comparable to the directors' and
officers' liability insurance policies maintained by Comptek immediately prior
to the Effective Time; provided, however that Comptek will not be required to
expend in any one year in excess of 150% of the annual premium currently paid
by Comptek for such coverage immediately prior to the Effective Time. The
provisions with respect to indemnification set forth in the certificate of
incorporation of Surviving Corporation shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would affect adversely the rights thereunder of individuals who at
or at any time prior to the Effective Time were directors, officers, employees
or agents of Comptek.
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Comptek Shareholders' Meeting. If required by applicable law to effectuate
the Merger, the Merger Agreement requires Comptek to call a meeting of its
shareholders as soon as reasonably practicable after acceptance for payment of
Shares tendered in the Offer. If the Minimum Tender Condition is satisfied
pursuant to the Offer, Acquisition Sub will hold at least a 66.67% of the
outstanding Shares and will be able to assure that the requisite number of
affirmative votes in favor of approval and adoption of the Merger Agreement
will be received, even if no other shareholder votes in favor thereof. If
Acquisition Sub obtains at least 90% of the outstanding Shares pursuant to the
Offer, it has agreed to effect the Merger without any notice to and without the
authorization of the shareholders of Comptek pursuant to Section 253 of the
DGCL and Section 905 of the BCL.
Antitrust Approvals. Pursuant to the Merger Agreement, each of the parties
to the Merger Agreement has agreed to take, or cause to be taken, all
appropriate action and make all necessary filings, and thereafter make any
other required or appropriate submissions, with respect to the Merger
Agreement, the Offer and the Merger required under the HSR Act, if any. The
parties shall cooperate and consult with each other in connection with the
making of all such filings, including by providing copies of all such documents
to the nonfiling parties and their advisors prior to filing, and none of the
parties shall file any such document if any of the other parties shall have
reasonably objected to the filing. No party shall consent to any voluntary
extension of any statutory deadline or waiting period or to any voluntary delay
of the consummation of the Offer or the Merger at the behest of any
governmental entity without the consent and agreement of the other parties,
which consent shall not be unreasonably withheld.
Further Assurances. Each of Northrop and Comptek has agreed, pursuant to the
Merger Agreement, to use all reasonable efforts to take, or cause to be taken,
all appropriate actions, and to do, or cause to be done, all things necessary,
proper or advisable under applicable law or otherwise to consummate and make
effective, the Offer and the Merger, including, without limitation:
. use all reasonable efforts to take such action as may be required to
obtain all other necessary actions or nonactions, waivers, consents and
approvals from governmental entities and the making of all other
necessary registrations and filings (including other filings with
governmental entities, if any);
. use all reasonable efforts to obtain all necessary consents, approvals or
waivers from third parties; and
. use all reasonable efforts in the preparation of the Registration
Statement, the Offer Documents, the Schedule 14D-9 and, if necessary, any
post-effective amendment to the Registration Statement filed by Northrop
for the purpose of filing the Comptek Proxy Statement (the "Post-
Effective Amendment").
Conditions to the Completion of the Merger. Each party's obligation to
effect the Merger is subject to the satisfaction or waiver of the following
conditions:
. if required by BCL or the DGCL, the holders of at least 66.67% of all
outstanding shares of Comptek Common Stock having approved and adopted
the Merger and the Merger Agreement;
. Acquisition Sub having accepted for exchange and exchanged all shares of
Comptek Common Stock tendered pursuant to the Offer unless the failure to
consummate the Offer is the result of a willful and material breach of
the Merger Agreement by the party asserting such condition;
. no judgment, order, decree, statute, law, ordinance, rule or regulation
entered, enacted, promulgated, enforced or issued by any court or other
governmental entity of competent jurisdiction or other legal restraint or
prohibition being in effect that prevents or prohibits consummation of
the Merger; and
. the Registration Statement or a Post-Effective Amendment, as the case may
be, shall have become effective under the Securities Act and shall not be
the subject of any stop order.
Termination Events. The Merger Agreement may be terminated at any time prior
to the Effective Time, notwithstanding any approval of the Merger Agreement by
the shareholders of Comptek:
(1) by mutual written consent of Comptek and Northrop;
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(2) by Northrop or Comptek if the Offer shall have expired or been
terminated in accordance with the terms of the Merger Agreement without
Northrop or Acquisition Sub having accepted for exchange any Shares
pursuant to the Offer; provided that Northrop and Acquisition Sub shall not
be permitted to terminate the Merger Agreement if the Offer is terminated
or expires without Shares being accepted for exchange in violation of the
Merger Agreement;
(3) by Northrop or Comptek if the Offer shall not have been consummated
on or before October 30, 2000, unless the failure to consummate the Offer
is the result of a willful and material breach of the Merger Agreement by
the party seeking to terminate;
(4) by Northrop or Comptek if the Merger shall not have been consummated
as a result of any condition described above under "--Conditions to the
Completion of the Merger" being incapable of being satisfied;
(5) by Northrop or Comptek if any statute, rule, regulation, injunction
or decree having the effects set forth below shall be in effect and shall
have become final and nonappealable:
(a) there shall be instituted or pending any action or proceeding by
any governmental entity, (i) challenging or seeking to make illegal, to
delay materially or otherwise directly or indirectly to restrain or
prohibit the making of the Offer, the acceptance for exchange of, or
the exchange or delivery of shares of Northrop Common Stock for, some
of or all the Shares by Northrop or Acquisition Sub or the consummation
by Northrop or Northrop of the Merger, seeking to obtain material
damages or otherwise directly or indirectly relating to the
transactions contemplated by the Tender Agreement, the Merger
Agreement, the Offer or the Merger, (ii) seeking to restrain or
prohibit Northrop's or Acquisition Sub's ownership or operation (or
that of their respective subsidiaries or affiliates) of all or any
portion of the business or assets of Comptek and its subsidiaries,
taken as a whole, or of Northrop and its subsidiaries, taken as a
whole, or to compel Northrop or any of its subsidiaries or affiliates
to dispose of or hold separate all or any portion of the business or
assets of Comptek and its subsidiaries, taken as a whole, or of
Northrop and its subsidiaries, taken as a whole, (iii) seeking to
impose limitations on the ability of Northrop or any of its
subsidiaries or affiliates effectively to exercise full rights of
ownership of the Shares, including, without limitation, the right to
vote any Shares acquired or owned by Northrop or any of its
subsidiaries or affiliates on all matters properly presented to
Comptek's shareholders or (iv) seeking to require divestiture by
Northrop or any of its subsidiaries or affiliates of any Shares; or
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Merger Agreement, the
Offer or the Merger, by any governmental entity that, in the reasonable
judgment of Northrop, is reasonably likely, directly or indirectly, to
result in any of the consequences referred to in clauses (i) through
(iv) of paragraph (a) above, subject as aforesaid;
(6) by Northrop upon the occurrence of any Trigger Event (as defined
below under "--Termination Fee; Expenses"); or
(7) by Comptek if the Comptek Board shall have recommended to the
shareholders of Comptek a Company Competing Transaction provided that
Comptek complies with certain requirements of the Merger Agreement.
Termination Fee; Expenses. Comptek has agreed to pay Northrop a fee (the
"Termination Fee") in immediately available funds equal to $4 million promptly,
but in no event later than ten business days, after the termination of the
Merger Agreement (or such later date as may apply in the case of clause (1)
below) as a result of the occurrence of any of the events set forth below
(each, a "Trigger Event"):
(1) Comptek shall have received a Company Competing Transaction, and at
any time prior to, or within one year after the termination of the Merger
Agreement, unless the Merger Agreement is terminated pursuant to paragraphs
(1) or (5) under "--Termination Events" above, Comptek shall have entered
into,
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or shall have publicly announced its intention to enter into, an agreement
or an agreement in principle, other than a confidentiality agreement
permitted by the Merger Agreement, with respect to any Company Competing
Transaction;
(2) any person or "group" (as defined in Section 13(d)(3) of the
Exchange Act), other than Northrop or any of its subsidiaries, shall have
become the "beneficial owner" (as defined in rule 13d-3 promulgated under
the Exchange Act) of at least 20% of the outstanding Shares or shall have
acquired, directly or indirectly, at least 20% of the assets of Comptek and
its subsidiaries;
(3) Comptek shall have intentionally breached or willfully failed to
perform in any material respect any of its representations, warranties,
covenants or other agreements contained in the Merger Agreement, which
breach or failure to perform would give rise to the failure of a condition
set forth in subparagraphs (c), (d) or (e) of paragraph (5) under "--
Conditions of the Offer" above; or
(4) the Comptek Board, or any committee thereof, shall have recommended
to the shareholders of Comptek any Company Competing Transaction or shall
have resolved to, or publicly announced an intention to do so, except under
the circumstances described under "--Conditions of the Offer" above.
Notwithstanding the foregoing, no Termination Fee shall be paid pursuant to
the Trigger Events listed above if Northrop shall be in material breach of its
obligations under the Merger Agreement or if any of its representations and
warranties shall become untrue or incorrect in any material respect unless such
breach or untrue or incorrect representation or warranty is cured within ten
business days after receipt by Northrop of written notice of such breach or
untrue or incorrect representation or warranty from Comptek.
In the event that Northrop shall terminate the Merger Agreement because of
any breach or failure to perform by Comptek as set forth in clause (3) above
that is not an intentional breach or willful failure to perform on the part of
Comptek, then, without limiting any other remedies available to Northrop,
Comptek shall reimburse Northrop (not later than ten business days after
submission of statements therefor) for all actual, documented out-of-pocket
expenses not to exceed $750,000 reasonably incurred by Northrop on its behalf
in connection with the consummation of the transaction contemplated by the
Merger Agreement; provided, however, that no fee is payable if Northrop is in
material breach of its obligations under the Merger Agreement and has not cured
any such breach within five business days after receipt of written notice by
Comptek.
In the event that the Comptek Board rescinds its recommendation of the Offer
or recommends a Company Superior Proposal under the circumstances described
under "--Conditions of the Offer" above and as a result the Offer and the
Merger are not consummated, then, without limiting any other remedies available
to Comptek, Northrop shall reimburse Comptek (not later than ten business days
after submission of statements therefore) for all actual, documented out-of-
pocket expenses not to exceed $750,000 reasonably incurred by Comptek or on its
behalf in connection with the consummation of the transaction contemplated by
the Merger Agreement; provided, however, that no fee is payable if Comptek is
in material breach of its obligations under the Merger Agreement and has not
cured any such breach within five business days after receipt of written notice
by Northrop.
The Merger Agreement further provides that under certain circumstances if
Comptek or Northrop fails to pay any termination fee or any reimbursement due,
it must pay the other party's costs and expenses in connection with any action
taken to collect payment.
Except as otherwise set forth above, all expenses incurred in connection
with the Merger Agreement, the Offer and the Merger shall be paid by the party
incurring such expenses, whether or not the Offer or the Merger is consummated,
except that Northrop shall pay all expenses incurred solely for printing,
filing and mailing the Registration Statement, the Post-Effective Amendment, if
necessary, the Proxy Statement, if necessary, and all SEC and other regulatory
filing fees incurred in connection with the Registration Statement and the
Proxy Statement and any fees required to be paid under the HSR Act.
Assumption Of Certain Obligations. Pursuant to the Merger Agreement,
Northrop has agreed that it shall, or shall cause the Surviving Corporation to,
affirmatively assume the obligations of Comptek under certain indentures and
financing agreements to which Comptek is a party.
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In March 1999, Comptek issued $15 million principal amount of 8
1/2% Convertible Subordinated Debentures due 2004 (the "Convertible
Debentures") pursuant to the Indenture (the "Comptek Indenture") dated March
24, 1999 by and between Comptek and The Bank of New York, as trustee (the
"Trustee") for the benefit of the purchasers of the Convertible Debentures. As
of June 21, 2000, $5 million of Convertible Debentures remained outstanding.
The Convertible Debentures are convertible into Comptek Common Stock at the
conversion price of $9.50 per share. Pursuant to and in accordance with the
Comptek Indenture, in connection with the closing of the Merger, the Surviving
Corporation and the Trustee will execute a supplemental indenture to the
Comptek Indenture which will provide that thereafter all outstanding
Convertible Debentures be convertible into Northrop Common Stock as if such
Convertible Debentures had been converted to Comptek Common Stock immediately
prior to the Merger.
In addition to the Comptek Indenture, other financing agreements to which
Comptek is a party and which are subject to the foregoing requirement are: (i)
the Loan Agreement dated March 24, 1999 between Comptek, as borrower, and
Manufacturers and Traders Trust Company, as lender, pursuant to which Comptek
has a $30 million line of credit; (ii) the Canadian Economic Development
Corporation Performance Bond Guarantee Recourse Agreement dated November 5,
1997; and (iii) a $10 million Subordinated Note payable to Amherst Systems,
Inc. due March 26, 2001.
Tender Agreement
As required by Northrop as a condition to its entering into the Merger
Agreement, on June 15, 2000, Acquisition Sub entered into a Tender Agreement
with certain shareholders of Comptek (each, a "Shareholder," and collectively,
the "Shareholders") with respect to an aggregate of 1,419,601 shares including
Options owned by such Shareholders. The Shareholders who entered into the
Tender Agreement are: Laura L. Benedetti, John R. Cummings, Bradley H.
Feldmann, G. Wayne Hawk, Christopher A. Head, James D. Morgan, John J. Sciuto
and Henry P. Semmelhack. The following is a summary of certain provisions of
the Tender Agreement. The summary is qualified in its entirety by reference to
the full text of the Tender Agreement, a copy of which is filed herewith as
Exhibit (a)(5) and is incorporated herein by reference.
Pursuant to the Tender Agreement, each Shareholder has agreed to tender for
exchange in the Offer all Shares then owned or thereafter acquired by such
Shareholder.
Pursuant to the Tender Agreement, each Shareholder has revoked any and all
previous proxies granted with respect to such Shareholder's Shares, and
constitutes and appoints Acquisition Sub, or any nominee of Acquisition Sub
with full power of substitution, as its true and lawful attorney and proxy, to
vote each of such Shareholder's Shares at any meeting of Comptek's shareholders
(i) in favor of the adoption of the Merger Agreement, the Tender Agreement and
the approval of the Merger; (ii) against any action or agreement that would
result in a breach of any covenant, representation or warranty or the failure
to fulfill any other obligation or agreement of Comptek under the Merger
Agreement; and (iii) in favor of any other matter necessary for the
consummation of the transactions contemplated by the Merger Agreement and the
Tender Agreement. In addition, the proxy granted by each Shareholder is
irrevocable, and coupled with an interest and is granted in consideration for
Acquisition Sub entering into the Merger Agreement; provided, however, that
such proxy shall be revoked upon termination of the Merger Agreement in
accordance with its terms.
Under the terms of the Tender Agreement, each Shareholder has agreed that
such Shareholder will not directly or indirectly (i) grant any proxies (other
than proxies relating to the election of management's slate of directors at an
annual meeting of Comptek's shareholders, and other routine matters which would
not require the filing of a preliminary proxy statement under Rule 14a-6(a) of
the Exchange Act) or enter into any voting trust or other agreement or
arrangement with respect to the voting of any such Shareholder's Shares or (ii)
sell, assign, transfer, encumber or otherwise dispose of, or enter into any
contract, option or other arrangement or assignment or understanding and agrees
to notify Acquisition Sub promptly and to provide all details requested by
Acquisition Sub if such Shareholder shall be approached or solicited, directly
or indirectly, by any person with respect to any of the foregoing.
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Additionally, each Shareholder, in the capacity as a Shareholder, shall not
directly or indirectly (i) subject to the fiduciary duty under applicable law
of such Shareholder as a director of Comptek (if such Shareholder is such a
director) as further provided in the Merger Agreement, solicit, initiate or
encourage (or authorize any person to solicit, initiate or encourage) any
inquiry, proposal or offer from any person to acquire the business, property or
capital stock of Comptek or any direct or indirect subsidiary thereof, or any
acquisition of a substantial equity interest in, or a substantial amount of the
assets of, Comptek or any direct or indirect subsidiary thereof, whether by
Merger, purchase of assets, tender offer or other transaction or (ii) subject
to the fiduciary duty under applicable law of such Shareholder as a director of
Comptek (if such Shareholder is such a director) as further provided in the
Merger Agreement, participate in any discussion or negotiations regarding, or
furnish to any other person any information with respect to, or otherwise
cooperate in any way with, or participate in, facilitate or encourage any
effort or attempt by any other person to do or seek any of the foregoing. Such
Shareholder shall promptly advise Acquisition Sub of the terms of any
communications it may receive in the capacity as a Shareholder relating to any
of the foregoing.
Item 4. The Solicitation/Recommendation.
Item 4 of the Schedule 14D-9 is hereby amended to read as follows:
(a) Recommendation Of Comptek Board.
At a meeting held on June 12, 2000, the Comptek Board approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and
the Merger, are advisable, fair to and in the best interests of Comptek's
shareholders.
The Comptek Board recommends that Comptek's shareholders accept the Offer
and tender their Shares pursuant to the Offer.
A letter to Comptek's shareholders communicating the Comptek Board's
recommendation and a press release announcing the execution of the Merger
Agreement are filed herewith as Exhibits (a)(3) and (a)(4), respectively, and
are incorporated herein by reference.
(b) Background; Reasons For The Comptek Board's Recommendation; Opinion Of
Comptek's Financial Advisor.
Background
Beginning in November, 1999, senior management of Comptek began to explore
and analyze Comptek's strategic alternatives in order to maximize shareholder
value. Among other things, Comptek's senior management explored and analyzed
the following: (i) remaining as a stand-alone company and operating in
accordance with Comptek's current business model, including strategic small
acquisitions, (ii) pursuing a merger with a similar size company, and (iii)
pursuing a possible sale of Comptek.
Comptek subsequently engaged CIBC World Markets Corp. ("CIBC World Markets")
as its financial advisor to assist senior management in its review of strategic
alternatives and in any significant corporate transaction or series of
transactions that may be undertaken by Comptek. After an evaluation of, and
discussions with Comptek's management and CIBC World Markets regarding,
possible strategic alternatives, the Comptek Board determined that (i) in light
of the historical trading prices for Comptek Common Stock, remaining as a
stand-alone company was less likely to result in as great an increase in
shareholder value as pursuing a possible sale of Comptek to a substantially
larger defense industry company, and (ii) in light of the feedback from recent
preliminary contacts with a number of similar size companies operating in
similar markets and the historical trading prices for Comptek Common Stock and
for similar size companies operating in similar markets, pursuing a merger with
a similar size company also was less likely to result in as great an increase
in shareholder value as pursuing a possible sale of Comptek to a substantially
larger defense industry company. As a result, the Comptek Board determined that
the best course of action to maximize shareholder value was to explore a sale
of Comptek.
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Comptek's management, with the assistance of CIBC World Markets, then
identified a number of third parties in the defense electronics and federal
information technology services industries, and certain financial buyers, who
might have an interest in engaging in a business combination transaction with
Comptek.
Commencing in late February 2000, 37 parties were contacted in an effort to
ascertain on a preliminary basis their level of interest in engaging in a
business combination transaction with Comptek. Of the parties contacted,
approximately 20 parties, including Northrop, executed confidentiality
agreements and received limited non-public information concerning Comptek.
Prospective bidders were requested to submit preliminary indications of
interests in a possible transaction with Comptek by March 1, 2000.
In early March 2000, Comptek received preliminary indications of interest
from five parties, including a preliminary indication of interest from Northrop
of between $16.00 to $18.00 per Share. On March 20, 2000, the Board of
Directors of Comptek reviewed these five preliminary indications of interest
and instructed Comptek's financial advisor to further discuss the levels of
interest received. Depending on the outcome of those discussions, the Board of
Directors instructed Comptek's financial advisor to invite Northrop and other
prospective buyers with an opportunity to conduct limited due diligence on
Comptek at a data room established at the offices of Stroock & Stroock & Lavan
LLP, Comptek's legal counsel ("Stroock"). During these meetings,
representatives of Northrop and other potential buyers were to be provided with
an overview of Comptek's businesses and operations and were to be provided with
certain additional non-public financial information of Comptek, including
detailed financial forecasts.
From April 13 through April 14, 2000, Northrop's due diligence team reviewed
public documents, financial and technical information, financial forecasts as
well as other financial and operational information in the data room.
Northrop's due diligence team also met with and asked questions of Comptek's
management as part of its review of Comptek. On April 14, 2000, Comptek
provided to Northrop the proposed form of merger agreement prepared by Stroock.
Upon completion of this phase of due diligence, prospective bidders,
including Northrop, were requested to submit revised proposals and comments to
the proposed form of merger agreement. On April 27, 2000, Northrop submitted a
written proposal which was subject to certain conditions, including the
satisfactory completion of confirmatory due diligence, and which valued Comptek
at $20.00 per Share. Although discussions with other prospective bidders
continued, the Comptek Board, taking into account a number of factors,
including the proposed amount and form of the consideration offered and the
likelihood of completion of a transaction, authorized Comptek's management and
legal and financial advisors to pursue negotiations of a merger agreement with
Northrop. Although not binding, Northrop's April 27, 2000 written proposal
served as the basis for the parties' negotiations towards a definitive
agreement.
During the week of May 22, 2000, Northrop conducted its confirmatory due
diligence.
On June 2, 2000, Northrop submitted a revised written proposal which was no
longer subject to completion of due diligence, but was subject to the
negotiation and execution of a definitive agreement. This revised proposal
contemplated an all stock transaction at a fixed exchange ratio of 0.265 of a
share of Northrop Common Stock for each outstanding Share.
On June 4, 2000, Mr. Sciuto held a meeting with other senior members of
management of Comptek, and a telephonic meeting with Comptek's legal and
financial advisors, to update them on his discussions with Northrop.
After discussions between Comptek and Northrop, Northrop amended its June 2,
2000 conditional offer by a letter dated June 7, 2000 that established a range
of exchange ratios depending on the average closing price per share of Northrop
Common Stock for the 20 trading days immediately preceding the consummation of
the transaction to preserve the indicated value of the transaction to both
Northrop and the Comptek shareholders.
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Discussions among the parties and their respective legal and financial
advisors immediately ensued, and by a second letter dated June 7, 2000,
Northrop revised the final exchange ratios and provided the estimated value of
a share of Comptek Common Stock.
Between June 8, 2000 and June 11, 2000, there were a series of telephonic
negotiations between Albert Myers, Corporate Vice President and Treasurer of
Northrop, and John Sciuto, Chairman, President and Chief Executive Officer of
Comptek, regarding various valuation refinements. Negotiations also were
conducted in New York City on June 10 and 11 among the parties' legal and
financial advisors regarding the details, terms and conditions of a final
merger agreement.
During the period from June 4, 2000 to June 11, 2000, Mr. Sciuto had
numerous telephone conversations with each member of the Comptek Board to keep
them informed of the substance of the negotiations with Northrop.
The Comptek Board held a special meeting on June 12, 2000, to discuss the
proposed transaction with Northrop and the terms of the Merger Agreement. Mr.
Sciuto updated the Comptek Board on the negotiations with Northrop. Mr. Sciuto
reviewed the strategic business rationale for the transaction. Representatives
of Stroock summarized the terms and conditions of the Merger Agreement, the
Tender Agreement and related legal documents, and discussed the directors'
fiduciary duties under New York law. In addition, CIBC World Markets reviewed
with the Comptek Board its financial analysis of the Exchange Ratio (which is
summarized under "--Opinion of Comptek's Financial Advisor" below) and rendered
to the Comptek Board an oral opinion, which opinion was subsequently confirmed
by delivery of a written opinion dated June 12, 2000, to the effect that, as of
that date and subject to the matters described therein, the Exchange Ratio was
fair, from a financial point of view, to the holders of Shares (other than
Northrop and its affiliates).
After discussion and consideration of the factors and reasons described
below under "--Reasons for the Comptek Board's Recommendation," the Comptek
Board determined that the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger, are advisable, fair to and in the
best interests of, Comptek's shareholders, approved the Merger Agreement and
the transactions contemplated thereby, including the Offer and the Merger, and
recommended that Comptek's shareholders accept the Offer and tender their
shares of Comptek Common Stock pursuant to the Offer.
Following the meeting of the Comptek Board, as of June 12, 2000, Comptek,
Northrop and Acquisition Sub executed the Merger Agreement. On June 12, 2000,
each of Comptek and Northrop issued a press release announcing that the parties
had executed the Merger Agreement. On June 15, 2000 certain shareholders of
Comptek, including certain directors and certain members of senior management,
executed the Tender Agreement.
Reasons For The Comptek Board's Recommendation
In approving the Offer, the Merger, the Merger Agreement and the
transactions contemplated thereby and recommending that all holders of Shares
accept the Offer and tender their Shares pursuant to the Offer, the Comptek
Board, after discussions with Comptek's senior management and legal and
financial advisors, considered a number of factors, some of which were deemed
to favor the Offer and the Merger and some of which were not. Those which were
deemed to favor the Offer and the Merger included:
1. the Comptek Board's belief that the financial condition, results of
operations, cash flows, earnings, assets and prospects of Comptek if it remains
an independent company would not be as likely to result in as great an increase
in shareholder value as would a sale of the Company;
2. the belief of Comptek's management that the shares of Comptek Common
Stock have historically been undervalued due to Comptek's size and industry
focus;
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3. the potential strategic alternatives available to Comptek and the
viability and risks associated with each alternative, including the prospects
for Comptek on a stand-alone basis and the risks associated with achieving and
executing upon Comptek's business plan, both short-term and long-term;
4. the belief of Comptek's management that, based on its review of Comptek's
strategic alternatives and on the feedback from recent preliminary contacts
with a number of third parties in the defense electronics and federal
information technology services industries to ascertain their level of interest
in engaging in a business combination transaction with Comptek, it is unlikely
that any party would propose an alternative transaction that would be more
favorable to Comptek and its shareholders than the Offer and the Merger;
5. the Comptek Board's expectation that the addition of Comptek's operations
to Northrop would likely increase the overall value and profitability of
Northrop, tending to produce greater shareholder value for Comptek's
shareholders;
6. the opportunity of the combined company to reduce costs through economies
of scale that would not have been readily achievable by Comptek independently,
and the elimination of redundant operations and duplicate administrative
functions;
7. the opportunity of the combined company to further enhance research and
development efforts, including potentially more rapid development of products
as a result of shared knowledge between electronics development teams;
8. the belief of Comptek's management that the strengths of Northrop's
businesses not only outweighed any weaknesses but that the key attributes of
the combined company, in terms of, among other things, products, sales,
customers, management and competitive position, would help to strengthen
Northrop's businesses even further;
9. the fact that the defense and federal information technology services
electronics industries are extremely competitive and are characterized by rapid
change and uncertainty due to new and emerging technologies;
10. the increasing competition in Comptek's markets from both existing and
potential competitors, some of which have greater assets and resources than
Comptek, which has occurred as a result of, among other reasons, the
consolidation taking place in the defense sector in general and in the defense
electronics and federal information technology segments in particular;
11. the potential beneficial effect of the public announcement of the Offer
and the Merger on Comptek's ability to attract and retain key management,
sales, marketing and technical personnel;
12. the fact that the recent stock price performance of the shares of
Comptek Common Stock was below the $20.75 value of the shares of Northrop
Common Stock to be received in the Offer and the Merger and that the historical
stock price performance of the shares of Comptek Common Stock was well below
that value; and the fact that the recent and historical stock price performance
of the shares of Northrop Common Stock indicated that Northrop Common Stock,
which had traded well above its recent lows, was also trading well below its
historical highs, indicating an opportunity for further increases in
shareholder value;
13. the fact that the market value of the shares of Northrop Common Stock,
based on the Exchange Ratio and the closing price of such shares on the NYSE on
June 9, 2000, to be exchanged for each Share pursuant to the Offer and the
Merger represents a premium of approximately 20.7% over the closing price of
the Shares on the American Stock Exchange on June 9, 2000;
14. the financial and other terms of the Offer, the Merger and the Merger
Agreement, including the benefits of the transaction being structured as a
first-step exchange offer and second-step merger, which may provide Comptek's
shareholders with an opportunity to receive shares of Northrop Common Stock on
an accelerated basis;
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15. the fact that the provisions of the Merger Agreement are designed to
provide that the value of the shares of Northrop Common Stock to be received in
the Offer could exceed $20.75 per Share if the Final Average Closing Price
exceeds $84.00.
16. the fact that the Offer and the Merger will present the opportunity for
the holders of shares of Comptek Common Stock to participate in a significantly
larger and more diversified company and, as shareholders of the combined
company, to have greater liquidity in their shares and to benefit from any
future growth of the combined company;
17. the financial presentation of CIBC World Markets including its opinion
dated June 12, 2000 to the Comptek Board, as to the fairness, from a financial
point of view, and as of the date of the opinion, of the Exchange Ratio to the
holders of Comptek Common Stock, other than Northrop and its affiliates, as
described below under the caption "--Opinion of Comptek's Financial Advisor";
18. the Comptek Board's belief that, taken as a whole, terms and conditions
of the Merger Agreement and the conditions of the Offer were generally
favorable for the reasons described in factors 14, 15 and 19 through 21 herein;
19. the likelihood that the Offer and the Merger would be consummated,
including the limited nature of the conditions to the Offer and the experience,
reputation and financial condition of Northrop;
20. the consents and approvals required to consummate the Offer and the
Merger, including regulatory clearance under the HSR Act and foreign antitrust
laws, and the favorable prospects for receiving such consents and approvals;
and
21. the fact that the Offer and the Merger are structured in a manner so
that in certain circumstances (the existence of which will not be known prior
to the consummation of the Offer and the Merger), they should qualify as a
reorganization for federal income tax purposes, in which case Comptek's
shareholders would generally not recognize gain or loss for fractional shares
of Northrop Common Stock.
Those factors which were deemed to not favor the Offer and the Merger
included:
1. the potential detrimental effect of the public announcement of the Offer
and the Merger on Comptek's ability to attract and retain key management,
sales, marketing and technical personnel due to the uncertainties involved in
combining the operations of the two companies; and
2. the fact that although the Merger Agreement prohibits Comptek from
soliciting proposals concerning an acquisition of Comptek, the Comptek Board,
in the exercise of its fiduciary duties, would be able to provide information
to, and engage in negotiations with, a third party that makes an unsolicited
superior acquisition proposal, and that the Comptek Board would be able to
terminate the Merger Agreement and accept a superior acquisition proposal if it
determines that its fiduciary duties so require, upon payment to Northrop of a
termination fee of $4 million.
The foregoing discussion of the information and factors considered by the
Comptek Board is not intended to be exhaustive but is believed to include all
material factors considered by the Comptek Board. In view of the wide variety
of factors, both positive and negative, considered by the Comptek Board, the
Comptek Board did not find it practical to, and did not, quantify or otherwise
assign relative weights to the specific factors considered. The Comptek Board
also did not determine that any factor was of particular importance. Rather,
the Comptek Board viewed its position and recommendations as being based on the
totality of the information presented to and considered by the Comptek Board.
In addition, individual members of the Comptek Board may have given different
weights to different factors.
Opinion Of Comptek's Financial Advisor
Comptek has engaged CIBC World Markets to act as its exclusive financial
advisor in connection with the Offer and the Merger. In connection with this
engagement, Comptek requested that CIBC World Markets
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evaluate the fairness, from a financial point of view, to the holders of
Comptek Common Stock of the Exchange Ratio provided for in the Offer and the
Merger. On June 12, 2000, at a meeting of the Comptek Board held to evaluate
the Offer and the Merger, CIBC World Markets rendered an oral opinion, which
opinion was confirmed by delivery of a written opinion dated June 12, 2000, to
the effect that, as of that date and based on and subject to the matters
described in its opinion, the Exchange Ratio was fair, from a financial point
of view, to the holders of Comptek Common Stock, other than Northrop and its
affiliates.
The full text of CIBC World Markets' written opinion dated June 12, 2000,
which describes the assumptions made, matters considered and limitations on the
review undertaken, is attached to the back of this Schedule 14D-9 as Schedule
III. CIBC World Markets' opinion is addressed to the Comptek Board and relates
only to the fairness of the Exchange Ratio from a financial point of view to
the holders of Comptek Common Stock, other than Northrop and its affiliates.
The opinion does not address any other aspect of the Offer, the Merger or any
related transaction, and does not constitute a recommendation to any
shareholder as to whether such shareholder should exchange shares in the Offer
or as to any other matter relating to the Offer or the Merger. The summary of
CIBC World Markets' opinion described below is qualified in its entirety by
reference to the full text of its opinion. Holders of Comptek Common Stock are
urged to read the opinion carefully in its entirely.
In arriving at its opinion, CIBC World Markets:
. reviewed the Merger Agreement;
. reviewed audited financial statements of Comptek for the fiscal years
ended March 31, 1998, March 31, 1999 and March 31, 2000 and audited
financial statements of Northrop for the fiscal years ended December 31,
1997, December 31, 1998 and December 31, 1999;
. reviewed unaudited financial statements of Northrop for the fiscal
quarter ended March 31, 2000;
. reviewed financial projections of Comptek prepared by Comptek's
management and publicly available financial projections relating to
Northrop;
. reviewed historical market prices and trading volumes for Comptek Common
Stock and Northrop Common Stock;
. held discussions with Comptek's senior management with respect to
Comptek's business and prospects for future growth;
. reviewed and analyzed publicly available financial data for companies
that CIBC World Markets deemed comparable to Comptek and Northrop;
. reviewed and analyzed publicly available information for transactions
that CIBC World Markets deemed comparable to the Offer and the Merger;
. performed a discounted cash flow analysis of Comptek using assumptions of
future performance provided to CIBC World Markets by Comptek's management
and a discounted cash flow analysis of Northrop using publicly available
financial data;
. reviewed public information concerning Comptek and Northrop;
. at Comptek's request, approached and held discussions with third parties
to solicit indications of interest in the possible acquisition of
Comptek; and
. performed other analyses and reviewed other information as CIBC World
Markets deemed appropriate.
In rendering its opinion, CIBC World Markets relied on and assumed, without
independent verification or investigation, the accuracy and completeness of all
of the financial and other information that Comptek and its employees,
representatives and affiliates provided to CIBC World Markets. With respect to
forecasts of Comptek's future financial condition and operating results
provided to CIBC World Markets, CIBC World
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Markets assumed, at the direction of Comptek's management, without independent
verification or investigation, that the forecasts were reasonably prepared on
bases reflecting the best available information, estimates and judgments of
Comptek's management. With respect to forecasts of Northrop's future financial
condition and operating results, CIBC World Markets reviewed and discussed with
representatives of Northrop publicly available forecasts relating to Northrop,
and assumed, with Comptek's consent, that the forecasts represented reasonable
estimates and judgments as to the future financial condition and operating
results of Northrop. CIBC World Markets also assumed, with Comptek's consent,
that the Offer and the Merger would be treated as a tax-free reorganization for
federal income tax purposes.
CIBC World Markets did not make or obtain any independent evaluations or
appraisals of the assets or liabilities of Comptek, Northrop or affiliated
entities. CIBC World Markets expressed no opinion as to Comptek's and
Northrop's underlying valuation, future performance or long-term viability, or
the price at which Northrop Common Stock would trade upon or after announcement
or consummation of the Offer or the Merger. CIBC World Markets' opinion was
necessarily based on the information available to CIBC World Markets and
general economic, financial and stock market conditions and circumstances as
they existed and could be evaluated by CIBC World Markets as of the date of its
opinion. Although subsequent developments may affect its opinion, CIBC World
Markets does not have any obligation to update, revise or reaffirm its opinion.
Comptek imposed no other instructions or limitations on CIBC World Markets with
respect to the investigations made or the procedures followed by it in
rendering its opinion.
This summary is not a complete description of CIBC World Markets' opinion to
the Comptek Board or the financial analyses performed and factors considered by
CIBC World Markets in connection with its opinion. The preparation of a
fairness opinion is a complex analytical process involving various
determinations as to the most appropriate and relevant methods of financial
analysis and the application of those methods to the particular circumstances
and, therefore, a fairness opinion is not readily susceptible to summary
description. CIBC World Markets believes that its analyses and this summary
must be considered as a whole and that selecting portions of its analyses and
factors or focusing on information presented in tabular format, without
considering all analyses and factors or the narrative description of the
analyses, could create a misleading or incomplete view of the processes
underlying CIBC World Markets' analyses and opinion.
In performing its analyses, CIBC World Markets considered industry
performance, general business, economic, market and financial conditions and
other matters existing as of the date of its opinion, many of which are beyond
Comptek's and Northrop's control. No company, transaction or business used in
the analyses as a comparison is identical to Comptek, Northrop or the Offer and
the Merger, and an evaluation of the results of those analyses is not entirely
mathematical. Rather, the analyses involve complex considerations and judgments
concerning financial and operating characteristics and other factors that could
affect the acquisition, public trading or other values of the companies,
business segments or transactions analyzed.
The estimates contained in CIBC World Markets' analysis and the ranges of
valuations resulting from any particular analysis are not necessarily
indicative of actual values or future results, which may be significantly more
or less favorable than those suggested by its analyses. In addition, analyses
relating to the value of businesses or securities do not purport to be
appraisals or to reflect the prices at which businesses or securities actually
may be sold. Accordingly, CIBC World Markets' analyses and estimates are
inherently subject to substantial uncertainty.
The type and amount of consideration payable in the Offer and the Merger was
determined through negotiation between Comptek and Northrop and the decision to
enter into the Offer and the Merger was solely that of the Comptek Board. CIBC
World Markets' opinion and financial analyses were only two of many factors
considered by the Comptek Board in its evaluation of the Offer and the Merger
and should not be viewed as determinative of the views of the Comptek Board or
management with respect to the Exchange Ratio or the Offer or the Merger.
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The following is a summary of the material financial analyses underlying
CIBC World Markets' opinion, dated June 12, 2000, to the Comptek Board in
connection with the Offer and the Merger. Unless otherwise noted, calculations
utilizing closing prices of Comptek Common Stock and Northrop Common Stock were
based on closing prices on June 8, 2000 or the average closing prices for the
20 trading days ending on such date, as more fully described below. The
financial analyses summarized below include information presented in tabular
format. In order to fully understand CIBC World Markets' financial analyses,
the tables must be read together with the text of each summary. The tables
alone do not constitute a complete description of the financial analyses.
Considering the data in the tables below without considering the full narrative
description of the financial analyses, including the methodologies and
assumptions underlying the analyses, could create a misleading or incomplete
view of CIBC World Markets' financial analyses.
Selected Companies Analyses
Comptek. CIBC World Markets compared financial and stock market information
for Comptek and the following seven selected publicly held companies in the
small capitalization defense and federal information technology services
industries:
<TABLE>
<S> <C>
Small Capitalization Federal
Small Capitalization Defense Companies Information Technology Services Companies
-------------------------------------- -----------------------------------------
. Applied Signal Technology, Inc. . BTG, Inc.
. EDO Corporation . CACI International Inc
. DRS Technologies, Inc.
. Elbit Systems Ltd.
. FLIR Systems, Inc.
</TABLE>
CIBC World Markets reviewed enterprise values, calculated as equity market
value, plus straight debt, minority interest, straight preferred stock and all
out-of-the-money convertibles, less investments in unconsolidated affiliates
and cash, as multiples of latest 12 months and estimated calendar year 2000
revenues, earnings before interest and taxes, commonly referred to as EBIT, and
earnings before interest, taxes, depreciation and amortization, commonly
referred to as EBITDA. CIBC World Markets also reviewed equity market values as
multiples of estimated calendar years 2000 and 2001 earnings per share,
commonly referred to as EPS. All multiples were based on closing stock prices
on June 8, 2000. Estimated financial data for the selected companies were based
on publicly available research analysts' estimates and estimated financial data
for Comptek were based on internal estimates of Comptek's management.
CIBC World Markets then applied a range of selected multiples of latest 12
months and estimated calendar year 2000 revenues, EBIT and EBITDA and estimated
calendar years 2000 and 2001 EPS derived from the selected companies to
corresponding financial data of Comptek in order to derive an implied equity
reference range for Comptek. This analysis indicated the following implied per
Share equity reference range for Comptek, as compared to the per Share equity
value for Comptek implied by the Exchange Ratio based on the average closing
price of Northrop Common Stock for the 20 trading days ended June 8, 2000:
<TABLE>
<CAPTION>
Implied Equity Equity Value for Comptek
Reference Range for Comptek Implied by Exchange Ratio
--------------------------- -------------------------
<S> <C>
$8.64-$11.30 per Share $20.75 per Share
</TABLE>
25
<PAGE>
Northrop. CIBC World Markets also compared financial and stock market
information for Northrop and selected companies in the defense industry, which
is the industry in which Northrop operates, with particular focus on companies
with enterprise values of approximately $1 billion to $12 billion. Based on
these characteristics, CIBC World Markets selected the following five publicly
traded companies in the defense industry:
. Alliant Techsystems Inc.
. General Dynamics Corporation
. Harris Corporation
. L-3 Communications Corporation
. Litton Industries, Inc.
CIBC World Markets reviewed enterprise values as multiples of latest 12
months and estimated calendar year 2000 revenues, EBIT and EBITDA. CIBC World
Markets also reviewed equity market values per share as multiples of estimated
calendar years 2000 and 2001 EPS excluding, in the case of Northrop, pension
income. All multiples were based on closing stock prices on June 8, 2000.
Estimated financial data for the selected companies and Northrop were based on
publicly available research analysts' estimates.
CIBC World Markets then applied a range of selected multiples of latest 12
months and estimated calendar year 2000 revenues, EBIT, EBITDA and estimated
calendar years 2000 and 2001 EPS derived from the selected companies to
corresponding financial data of Northrop in order to derive an implied equity
reference range for Northrop. This analysis indicated the following implied per
share equity reference range for Northrop, as compared to the closing price of
Northrop Common Stock on June 8, 2000:
<TABLE>
<CAPTION>
Implied Equity Closing Price of Northrop
Reference Range for Northrop Common Stock on June 8, 2000
---------------------------- ----------------------------
<S> <C>
$66.43-$86.06 per share $77.63 per share
</TABLE>
26
<PAGE>
Precedent Transactions Analysis
CIBC World Markets reviewed the purchase prices and implied transaction
multiples in the following 43 selected transactions in the defense electronics
and federal information technology services industries:
Defense Electronics Transactions
<TABLE>
<CAPTION>
Acquiror Target
-------- ------
<S> <C>
. DRS Technologies NAI Technologies
. EDO Corporation AIL Technologies, Inc.
. Elbit Systems Ltd. Elop Electro-Optics Industries Ltd.
. GEC-Marconi Systems Corporation Hazeltine Corporation
. General Dynamics Corporation Computing Devices International
. General Dynamics Corporation GTE Government Systems Corporation
. General Dynamics Corporation Lucent Technologies Inc. (Advanced Technology Systems Division)
. ITT Industries, Inc. Kaman Sciences Corporation
. ITT Industries, Inc. Stanford Telecommunications, Inc. (Defense Division)
. L-3 Communications Corporation AlliedSignal, Inc. (Ocean Systems Division)
. L-3 Communications Corporation Aydin Corporation
. L-3 Communications Corporation ILEX Systems
. L-3 Communications Corporation Interstate Electronics Corporation
. L-3 Communications Corporation Microdyne Corporation
. L-3 Communications Corporation SPD Technologies, Inc.
. Litton Industries, Inc. Denro Inc.
. Marconi North America, Inc. Watkins-Johnson Company (Telecommunications Division)
. Mentmore Holdings Corporation Watkins-Johnson Company (Defense Division)
. Northrop California Microwave, Inc.
. Raytheon Company E-Systems, Inc.
. Tracor, Inc. AEL Industries, Inc.
</TABLE>
27
<PAGE>
Federal Information Technology Services Transactions
<TABLE>
<CAPTION>
Acquiror Target
-------- ------
<S> <C>
. Affiliated Computer
Services, Inc. Computer Data Systems, Inc.
. Anteon Corporation Analysis & Technology, Inc.
. Anteon Corporation Techmatics, Inc.
. AT&T Corporation GRC International, Inc.
. CACI International Inc Government Systems, Inc.
. CACI International Inc QuesTech, Inc.
. Computer Data Systems,
Inc. Analytical Systems Engineering Corporation
. Computer Sciences
Corporation Nichols Research Corporation
. General Electric plc Tracor, Inc.
. Getronics NV Wang Laboratories, Inc.
. Litton Industries, Inc. PRC Inc.
. Litton Industries, Inc. TASC, Inc.
. Northrop Logicon, Inc.
. Science Applications
International Corporation The Boeing Company (Information Systems Division)
. The Carlyle Group EG&G Technical Services, Inc.
. The Titan Corporation Advanced Communication Systems, Inc.
. The Titan Corporation AverStar, Inc.
. TRW Inc. BDM International, Inc.
. Veridian Corporation ERIM International, Inc.
. Veridian Corporation MRJ Group, Inc.
. Veridian Corporation Trident Data Systems, Inc.
. Wang Global I-NET Inc.
</TABLE>
CIBC World Markets reviewed enterprise values in the selected transactions
as multiples of latest 12 months revenues, EBIT and EBITDA, and equity purchase
prices as a multiple of latest 12 months net income. CIBC World Markets also
reviewed the premiums paid in the selected transactions. All multiples and
premiums were based on publicly available information at the time of
announcement of the relevant transaction. In order to derive an implied equity
reference range for Comptek, CIBC World Markets then applied a range of
selected multiples of latest 12 months revenue, EBIT, EBITDA and net income
derived from the selected transactions to corresponding financial data of
Comptek and a range of selected premiums derived from the selected transactions
to the closing price of Comptek Common Stock on November 17, 1999, which is the
date one day prior to Comptek's announcement of its engagement of CIBC World
Markets to assist Comptek in exploring strategic alternatives. This analysis
indicated the following implied per Share equity reference range for Comptek,
as compared to the per Share equity value for Comptek implied by the Exchange
Ratio based on the average closing price of Northrop Common Stock for the 20
trading days ended June 8, 2000:
<TABLE>
<CAPTION>
Implied Equity Equity Value for Comptek
Reference Range for Comptek Implied by Exchange Ratio
--------------------------- -------------------------
<S> <C>
$14.85-$18.56 per Share $20.75 per Share
</TABLE>
28
<PAGE>
Discounted Cash Flow Analyses
Comptek. CIBC World Markets performed a discounted cash flow analysis of
Comptek to estimate the present value of the unleveraged, after-tax free cash
flows that Comptek could generate for fiscal years 2001 through 2005, based on
internal estimates of Comptek's management. CIBC World Markets calculated a
range of estimated terminal values by applying to Comptek's projected fiscal
year 2005 EBITDA multiples ranging from 6.0x to 7.0x, which range was
calculated taking into consideration the EBITDA trading multiples of selected
companies in the small capitalization defense and federal information
technology services industries. The present value of the cash flows and
terminal values were calculated using discount rates ranging from 12.0% to
14.0%, which range was calculated taking into consideration the weighted
average cost of capital of selected companies in the small capitalization
defense and federal information technology services industries. This analysis
indicated the following implied per Share equity reference range for Comptek,
as compared to the per Share equity value for Comptek implied by the Exchange
Ratio based on the average closing price of Northrop Common Stock for the 20
trading days ended June 8, 2000:
<TABLE>
<CAPTION>
Implied Equity Equity Value for Comptek
Reference Range for Comptek Implied by Exchange Ratio
--------------------------- -------------------------
<S> <C>
$14.53-$18.57 per Share $20.75 per Share
</TABLE>
Northrop. CIBC World Markets also performed a discounted cash flow analysis
of Northrop to estimate the present value of the unleveraged, after-tax free
cash flows that Northrop could generate for fiscal years 2000 through 2004,
based on publicly available research analysts' estimates. CIBC World Markets
calculated a range of estimated terminal values by applying to Northrop's
projected fiscal year 2004 EBITDA multiples ranging from 7.5x to 8.5x, which
range was calculated taking into consideration the EBITDA trading multiples of
selected companies in the defense industry. The present value of the cash flows
and terminal values were calculated using discount rates ranging from 11.0% to
13.0%, which range was calculated taking into consideration the weighted
average cost of capital of selected companies in the defense industry. This
analysis indicated the following implied per share equity reference range for
Northrop, as compared to the closing price of Northrop Common Stock on June 8,
2000:
<TABLE>
<CAPTION>
Implied Equity Closing Price of Northrop
Reference Range for Northrop Common Stock on June 8, 2000
---------------------------- ----------------------------
<S> <C>
$81.66-$103.47 per share $77.63 per share
</TABLE>
Leveraged Buyout Analysis
CIBC World Markets derived an implied equity reference range for Comptek by
performing a leveraged buyout analysis based on internal estimates of Comptek's
management and assuming a range of required rates of return to a financial
buyer of 25% to 30% and a range of EBITDA terminal multiples of 6.5x to 7.5x,
which range was calculated taking into consideration the EBITDA trading
multiples of selected companies in the small capitalization defense and federal
information technology service industries. This analysis indicated the
following implied equity reference range for Comptek, as compared to the equity
value for Comptek implied by the Exchange Ratio based on the closing price of
Northrop Common Stock on June 8, 2000:
<TABLE>
<CAPTION>
Implied Equity Equity Value for Comptek
Reference Range for Comptek Implied by Exchange Ratio
--------------------------- -------------------------
<S> <C>
$12.00-$14.00 per Share $20.75 per Share
</TABLE>
29
<PAGE>
Exchange Ratio Analyses
Implied Exchange Ratio Analysis. CIBC World Markets calculated implied
exchange ratio reference ranges by dividing the results derived for Comptek
from the "Selected Companies Analyses," "Precedent Transaction Analysis,"
"Discounted Cash Flow Analyses" and "Leveraged Buyout Analysis" described above
by the average of the results derived for Northrop from the "Selected Companies
Analyses" and "Discounted Cash Flow Analyses" described above. CIBC World
Markets then compared these implied ranges to the Exchange Ratio. This analysis
indicated the following approximate implied exchange ratio reference ranges, as
compared to the Exchange Ratio in the Offer and the Merger of 0.2686x based on
the average closing price of Northrop Common Stock for the 20 trading days
ended June 8, 2000:
<TABLE>
<CAPTION>
Implied Exchange Ratio Range
----------------------------
<S> <C>
Selected Companies Analyses................. 0.0912x-0.1526x
Precedent Transaction Analysis.............. 0.1567x-0.2506x
Discounted Cash Flow Analyses............... 0.1533x-0.2508x
Leveraged Buyout Analysis................... 0.1266x-0.1891x
</TABLE>
Historical Exchange Ratio Analysis. CIBC World Markets performed an
historical exchange ratio analysis comparing the closing prices for Comptek
Common Stock and Northrop Common Stock on June 8, 2000, and the average daily
closing prices of Comptek Common Stock and Northrop Common Stock for the one
month, two months, three months and six months preceding June 8, 2000. This
analysis yielded an implied exchange ratio range of 0.2113x to 0.2539x, as
compared to the Exchange Ratio in the Offer and the Merger of 0.2686x based on
the average closing price of Northrop Common Stock for the 20 trading days
ended June 8, 2000, as indicated below:
<TABLE>
<CAPTION>
Period Implied Exchange Ratio
------ ----------------------
<S> <C>
June 8, 2000...................................... 0.2222x
One month average................................. 0.2113x
Two months average................................ 0.2203x
Three months average.............................. 0.2464x
Six months average................................ 0.2539x
</TABLE>
Other Factors. In rendering its opinion, CIBC World Markets also reviewed
and considered other factors, including:
. research analysts' reports on Northrop prepared by Credit Suisse First
Boston Corporation, Donaldson, Lufkin & Jenrette, Inc., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Morgan Stanley Dean Witter & Co.,
Salomon Smith Barney Inc. and SG Cowen Securities Corporation, including
targeted stock prices, earnings per share estimates for 2000 and 2001 and
investment recommendations of those analysts;
. the 52-week historical trading ranges for Comptek Common Stock and
Northrop Common Stock;
. the relationship between movements in Comptek Common Stock, movements in
the common stock of selected defense companies and information technology
companies, and movements in the S&P 500 Index; and
. potential pro forma effect of the Offer and the Merger on Northrop's EPS
for estimated calendar years 2000 through 2003, based on, in the case of
Comptek, internal estimates of Comptek's management and, in the case of
Northrop, publicly available research analysts' estimates.
(c) Intent To Tender.
To Comptek's knowledge, after reasonable inquiry and in view of the
obligations under the Tender Agreement, all executive officers, directors,
affiliates and subsidiaries of Comptek will tender pursuant to the Offer all
Shares held of record or beneficially owned by them (other than options to
acquire Shares).
30
<PAGE>
Item 8. Additional Information.
Item 8 of the Schedule 14D-9 is hereby amended to add thereto the following:
(d) All of the information in the Prospectus included in Amendment No. 2 to
the Registration Statement on Form S-4 of Northrop relating to shares of
Northrop Common Stock to be issued in the Offer and the Merger is hereby
incorporated by reference.
(e) On August 1, 2000, Northrop announced that it had extended the
expiration date of the Offer until midnight, E.D.T., on August 23, 2000.
(f) On August 14, 2000, both Northrop and Comptek announced that the 20-day
trading period that will be used to determine the exchange ratio in the Offer
will end two business days before the Offer expires.
Item 9. Exhibits.
Item 9 of the Schedule 14D-9 is hereby amended by the addition of the
following exhibits:
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
(a)(6) Preliminary Prospectus dated August 9, 2000. Incorporated herein
by reference to the prospectus included in the Registration
Statement on Form S-4 of Northrop filed with the SEC on July 6,
2000.
(a)(7) Press Release of Northrop, dated August 1, 2000. Incorporated
herein by reference to the Form 425 filed by Northrop on August 1,
2000.
(a)(8) Joint Press Release of Northrop and Comptek, dated August 14,
2000. Incorporated herein by reference to the Form 425 filed by
Comptek on August 15, 2000.
(e)(1)(A) First Amendment to Agreement and Plan of Merger, dated as of
August 7, 2000, among Northrop, Comptek and Acquisition Sub.
Incorporated herein by reference to Exhibit 2.1A to the
Registration Statement on Form S-4 of Northrop filed with the SEC
on July 6, 2000.
</TABLE>
31
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 16, 2000
COMPTEK RESEARCH, INC.
By: /s/ Christopher A. Head
_________________________________
Christopher A. Head, Esq.
Executive Vice President,
General Counsel and Secretary
32
