SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No. 1
QuesTech, Inc.
(Name of Issuer)
Common Stock, Par Value $.05 Per Share
(Title of Class of Securities)
74835710
(CUSIP Number)
David Gutridge
Modern Technologies Corporation
4032 Linden Avenue
Dayton, OH 45432
(937) 252-9199
--------------------------------------------------------
(Name, Address and Telephone Number of Persons Authorized
to Receive Notices and Communications)
May 11, 1998
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Note. Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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CUSIP No. 74835710
Schedule 13D
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Modern Technologies Corporation - I.R.S. No. 31-1150875
2) Check the Appropriate Row if a Member of a Group (See
------------------------------------------------
Instructions)
(a) X
(b)
3) SEC Use Only
4) Source of Funds (See Instructions)
WC
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization Ohio
Number of 7) Sole Voting Power 0
Shares Bene-
ficially 8) Shared Voting Power 36,500
Owned by
Each 9) Sole Dispositive Power 0
Reporting
Person With 10) Shared Dispositive Power 36,500
11) Aggregate Amount Beneficially Owned by Each Reporting Person
36,500
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11)
See Item 5
14) Type of Reporting Person (See Instructions)
CO
<PAGE>
CUSIP No. 74835710
Schedule 13D
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Rajesh K. Soin
2) Check the Appropriate Row if a Member of a Group (See
------------------------------------------------
Instructions)
(a) X
(b)
3) SEC Use Only
4) Source of Funds (See Instructions)
PF
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization United States
------------------------------------
Number of 7) Sole Voting Power 0
Shares Bene-
ficially 8) Shared Voting Power 85,400
Owned by
Each 9) Sole Dispositive Power 0
Reporting
Person With 10) Shared Dispositive Power 85,400
11) Aggregate Amount Beneficially Owned by Each Reporting Person
85,400
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11)
See Item 5
14) Type of Reporting Person (See Instructions)
IN
<PAGE>
CUSIP No. 74835710
Schedule 13D
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Indu Soin
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a) X
(b)
3) SEC Use Only
4) Source of Funds (See Instructions)
PF
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization United States
Number of 7) Sole Voting Power 0
Shares Bene-
ficially 8) Shared Voting Power 48,900
Owned by
Each 9) Sole Dispositive Power 0
Reporting
Person With 10) Shared Dispositive Power 48,900
11) Aggregate Amount Beneficially Owned by Each Reporting Person
48,900
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11)
See Item 5
14) Type of Reporting Person (See Instructions)
IN
<PAGE>
CUSIP No. 74835710
Schedule 13D
1) Names of Reporting Persons/I.R.S. Identification Nos. of
Above Persons (Entities Only)
Shiva Enterprise Family Partnership - I.R.S. No. 31-1440772
2) Check the Appropriate Row if a Member of a Group (See
Instructions)
(a) X
(b)
3) SEC Use Only
4) Source of Funds (See Instructions)
5) Check if Disclosure of Legal Proceedings is Required
Pursuant to Item 2(d)or 2(e)
6) Citizenship or Place of Organization Ohio
Number of 7) Sole Voting Power 0
Shares Bene-
ficially 8) Shared Voting Power 0
Owned by
Each 9) Sole Dispositive Power 0
Reporting
Person With 10) Shared Dispositive Power 0
11) Aggregate Amount Beneficially Owned by Each Reporting Person
0
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions)
13) Percent of Class Represented by Amount in Row (11)
See Item 5
14) Type of Reporting Person (See Instructions)
PN
<PAGE>
Modern Technologies Corporation, an Ohio corporation ("Modern
Technologies"), Rajesh K. Soin, Indu K. Soin and the Shiva Family Limited
Partnership (the "Partnership" and together with Modern Technologies, Rajesh K.
Soin and Indu K. Soin, the "Reporting Persons") hereby amend the Schedule 13D
(the "Schedule 13D") filed March 30, 1998 with respect to the Common Stock, $
.05 par value per share (the "Common Stock"), of QuesTech, Inc., a Virginia
corporation ("QuesTech"), which has its principal executive offices at 7600-W
Leesburg Pike, Falls Church, Virginia 22043.
Items 3, 4 and 5 of the Schedule 13D are amended as set forth below.
Item 3. Source and Amount of Funds or Other Consideration.
Modern Technologies used $298,733 in funds from working capital to
purchase its shares of Common Stock.
Mr. Soin and Mrs. Soin, whose shares of Common Stock are
held as joint tenant, used $398,275 in personal funds to
purchase their shares of Common Stock.
Item 4. Purpose of the Transaction
The Reporting Persons acquired the Common Stock owned by them in order
to obtain a significant equity position in QuesTech. The Reporting
Persons have been evaluating a possible negotiated acquisition
transaction between Modern Technologies and QuesTech. In correspondence
dated January 21, 1998 and in a meeting with the chief executive
officer of QuesTech, Mr. Soin has indicated Modern Technologies'
interest in making a cash offer as part of a negotiated transaction to
acquire a minimum of 55% of the outstanding Common Stock and a maximum
of 100% of the outstanding Common Stock for $11.00 per share.
In correspondence delivered May 11, 1998 to the chief executive officer
of QuesTech, Mr. Soin indicated Modern Technologies' revised proposal
to structure a negotiated transaction as a cash tender offer pursuant
to which it would offer to acquire all of the outstanding Common Stock
not currently owned by it, at a price of $13.00 per share, subject to,
among other things, there being tendered a number of shares which,
together with the shares owned by it, constitute at least two-thirds of
the then outstanding shares of Common Stock. Any shares not tendered in
the offer would be acquired in a backend merger pursuant to which each
share would be converted into the right to receive the same per share
consideration as that paid in the offer.
<PAGE>
In a letter dated February 3, 1998 addressed to Mr. Soin, Michael P.
Rivera, the Vice President and General Counsel of QuesTech indicated
that QuesTech was in the process of evaluating strategic alternatives
and that the Modern Technologies expression of interest had been
forwarded to QuesTech's financial advisors. Mr. Rivera's letter stated
that while the evaluation process is continuing, QuesTech intends to
maintain its independence and is not for sale.
Modern Technologies remains interested in pursuing a negotiated
transaction with QuesTech and the Reporting Persons may consider
acquiring additional shares in open market transactions, privately
negotiated transactions or otherwise. In the event Modern Technologies
and QuesTech pursue a negotiated transaction, Modern Technologies may
consider changes to the directors and management of QuesTech after such
a transaction, although Modern Technologies presently anticipates that
the QuesTech management team would continue managing QuesTech after any
acquisition by Modern Technologies. After any such transaction, the
registration of the Common Stock pursuant to Section 12 of the
Securities Exchange Act of 1934, as amended, may be terminated and the
Common Stock may cease to be quoted on NASDAQ.
In the event QuesTech does not indicate a timely interest in pursuing a
negotiated transaction with Modern Technologies, the Reporting Persons
may sell all or part of their shares of Common Stock, in one or more
transactions, at prices they consider attractive in open market
transactions, in privately negotiated transactions, or a combination of
such transactions.
Except as discussed above, the Reporting Persons do not presently have
any plans or proposals which relate to or would result in:
(a) The acquisition by any person of additional securities
of the issuer, or the disposition of securities of the
issuer;
(b) An extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the issuer or any of
its subsidiaries;
(c) A sale or transfer of a material amount of assets of
the issuer or any of its subsidiaries;
(d) Any change in the present board of directors or management of
the issuer, including any plans or proposals to change the
number or term of directors or to fill any existing vacancies
on the board;
(e) Any material change in the present capitalization or
dividend policy of the issuer;
<PAGE>
(f) Any other material change in the issuer's business or
corporate structure;
(g) Changes in the issuer's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the issuer by any person;
(h) Causing a class of securities of the issuer to be delisted
from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association;
(i) A class of equity securities of the issuer becoming eligible
for termination of registration pursuant to Section 12(g)(4)
of the Act; or
(j) Any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Company
(c) On April 7, 1998, the Partnership sold 6,000 shares of Common
Stock in the open market for $10 3/4 per share. On April 7,
1998, Modern Technologies purchased 6,000 shares of Common
Stock in the open market for $10 3/4 per share.
(e) On April 6, 1998, the QuesTech Stock Employee Compensation
Trust (the "Trust") filed a Schedule 13D reporting that it had
purchased 296,847 shares of Common Stock on March 26, 1998. As
a result of the reported issuance of shares of Common Stock to
the Trust, the Reporting Persons own less than 5% of the
outstanding Common Stock.
Item 7. Material to be Filed as Exhibits
1. Letter, dated January 20, 1998, from Rajesh K. Soin to Vincent
L. Salvatori - previously filed.
2. Letter, dated May 8, 1998, from Rajesh K. Soin to Vincent L.
Salvatori - filed herewith.
<PAGE>
Signature
After reasonable inquiry and to the best of knowledge and belief of
each of the undersigned, such person certifies that the information set forth in
this Statement is true, complete and correct.
Dated: May 12, 1998 MODERN TECHNOLOGIES CORPORATION
By: s/Rajesh K. Soin
-----------------------------
Rajesh K. Soin
Chairman, President and
Chief Executive Officer
s/Rajesh K. Soin
-----------------------------
Rajesh K. Soin
s/Indu Soin
-----------------------------
Indu Soin
Shiva Enterprises Limited
Partnership
By: s/Rajesh K. Soin
-----------------------------
Rajesh K. Soin
General Partner
Exhibit 2
May 8, 1998
PERSONAL AND CONFIDENTIAL
Mr. Vincent Salvatori
Chairman of the Board & CEO
QuesTech, Inc.
7600-A Leesburg Pike
Falls Church, VA 22043
Dear Mr. Salvatori:
On behalf of Modern Technologies Corporation ("MTC"), I am pleased to present
this preliminary indication of our interest in entering into a transaction
resulting in the combination of our two companies. We are very excited by this
opportunity to affiliate QuesTech, Inc. and MTC. We are convinced that such a
combination is in the very best interest of our respective organizations, our
shareholders, employees, customers, and communities.
At Modern Technologies Corp., similar to QuesTech, we believe it is people that
create the competitive advantage for us. Because our businesses are
complementary and because of our mutual philosophy of building and growing
businesses, we believe this merger would enhance the growth opportunities for
all of our employees. Indeed, we see your management team and the other talented
people in the QuesTech organization as a key component of the value of the
combined organizations. Our similar management styles and shareholder driven
philosophies will lead to a consistent organizational culture that is critical
to the success of any merger.
Based on our preliminary evaluation, we propose to structure the transaction as
a cash tender offer pursuant to which we would offer to acquire all of the
outstanding Common Stock of QuesTech, Inc. which we do not currently own at a
price of $13.00 per share, subject to, among other things, there being tendered
a number of shares which, together with the shares owned by us, constitutes at
least 2/3 of the then outstanding shares of Common Stock. This amounts to a
total transaction value of $31.9 million after giving consideration to the
assumption of the debt shown in Exhibit A. Any shares not tendered in the offer
would be acquired in a backend merger pursuant to which each share would be
converted into the right to receive the same per share consideration as was paid
in the offer. This proposed offer represents a 50% premium to the
<PAGE>
high close for 1997 and is an even higher premium to the 1998 average share
price prior to the filing of our 13-D.
This proposal is based upon the information in the Confidential Descriptive
Memorandum and the other information you have been kind enough to provide us in
our preliminary review, and assumes that prior to the closing date, the assets
and liabilities of QTPI will have been previously spun off, such that the
acquired corporation will have an opening balance sheet, approximating in all
material respects, as shown in Exhibit A, hereto.
This proposal is non-binding and is contingent upon the successful completion of
a due diligence review, negotiation and execution of a mutually agreeable
definitive agreement containing customary terms and conditions for this type of
transaction, approval of the transaction by QuesTech's Board of Directors and
compliance with any necessary regulatory filing requirements and receipt of
applicable regulatory and/or contractual approvals.
MTC has an excellent track record of significant cash flow and a strong balance
sheet, which we would be happy to share with you at the appropriate time. We
anticipate financing this transaction with the members of our bank group, with
which we maintain excellent working relationships. In preliminary discussions, 3
major regional lenders have indicated a willingness to finance this transaction.
We believe this merger will benefit both shareholder groups, creating an
enterprise well positioned to meet the challenges of competing in the government
services and information technologies industries, as we approach the turn of the
century.
In order to minimize the impact of this proposal on our two businesses and on
our customers, we look forward to a quick response to this offer, so that we may
immediately begin our due diligence review.
Sincerely,
Mr. Rajesh K. Soin
Chairman & CEO
