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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 18, 1998
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QUESTECH, INC.
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
VIRGINIA 2-88617 54-0844913
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(State or other jurisdiction of (Commission File No.) (IRS Employer
incorporation) Identification Number)
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7600-A Leesburg Pike
Falls Church, VA 22043
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(Address of principal executive offices)
(703) 760-1000
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS.
On May 18, 1998, the registrant entered into a letter of intent with
CACI International Inc. ("CACI"), expressing the mutual intent of the parties
for CACI, through a wholly-owned subsidiary, to acquire all of the issued and
outstanding shares of common stock of the registrant.
Under the letter of intent, the proposed acquisition is to be
consummated within five months of the date of the letter. The purchase price
is contemplated to be $18.375 per share for each issued and outstanding share,
estimated to total $35,195,548 for the 1,915,404 issued and outstanding shares.
Completion of the transaction is subject to several conditions, including that
there be no material adverse change in the financial condition, business or
prospects of the registrant, and the discovery of no adverse material
information by CACI during its due diligence process. The letter of intent
provides for a $1 million break-up fee in the event the registrant does not
approve the transaction within 150 days of the date of the letter of intent or
accepts another acquisition proposal.
The foregoing is only a summary of certain provisions of the letter of
intent and is qualified by reference to that letter, a copy of which is filed
as Exhibit No. 2 hereto and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS
The following exhibit is filed as part of this Current Report on Form 8-K:
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Exhibit No. Exhibit
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2 Letter of Intent dated May 18, 1998 from CACI International Inc.
to QuesTech, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
QUESTECH, INC.
By: /s/ Vincent L. Salvatori
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Vincent L. Salvatori
Chief Executive Officer and
Chairman of the Board
Date: June 3, 1998
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[CACI LETTERHEAD]
May 18, 1998
Mr. Vincent L. Salvatori
Chairman of the Board and Chief Executive Officer
QuesTech, Inc.
7600-A Leesburg Pike
Falls Church, VA 22043
Dear Mr. Salvatori:
This letter will confirm our mutual intent to effect the acquisition of all of
the issued and outstanding shares of common stock (the "Shares") of QuesTech,
Inc. (QTI) by CACI International Inc (CACI) and will outline the proposed terms
and conditions of such acquisition.
1. It is intended that the acquisition will be structured as a purchase of
all of the Shares of QTI by a wholly-owned CACI subsidiary.
2. It is intended that the proposed acquisition will be consummated at a
closing which shall be at such place and on such date within five (5)
months of the execution of this letter as the parties mutually agree (the
"Closing"), pursuant to a definitive agreement to be negotiated between
the parties (the "Agreement"). This letter of intent shall expire, and be
of no further force and effect, on the 150th day after the date of
execution hereof.
3. It is intended that the Agreement will set forth the specific purchase
consideration to be paid and include provisions embodying the other
substantive terms of the transaction as contained in this letter,
including representations, warranties and covenants concerning QTI, as
are customary in transactions of this sort.
4. CACI will pay Eighteen Dollars and Thirty-Seven and One-Half Cents
($18.375) per share for each of the issued and outstanding Shares. CACI
estimates that the total purchase price will be Thirty Five Million One
Hundred Ninety-Five Thousand Five Hundred Forty Eight Dollars
($35,195,548.00) based on payment of Eighteen Dollars and Thirty-Seven
and One-Half Cents ($18.375) per share for each of the estimated One
Million Nine Hundred Fifteen Thousand Four Hundred Four (1,915,404)
issued and outstanding Shares.
5. The Closing of the proposed transaction will be subject to the execution
of an Agreement containing representations, warranties and conditions
which are customary in transactions of this sort, and satisfaction as of
the Closing date of various conditions which are customary in
transactions of this sort, including the following:
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QuesTech, Inc.
Letter of Intent
May 18, 1998
Page 2
A. Completion of the transaction will be subject to there being no
material adverse change in the financial condition of QTI as
disclosed prior to the date hereof in publicly available
information or as disclosed privately to CACI prior to the date
hereof, or in the business or prospects of QTI between the date
of this letter and the Closing.
B. All necessary covenants, approvals and orders shall have been
obtained from such regulators and other governmental entities
as are necessary in order to permit the transaction to take place
as contemplated and for CACI's business to be continued as
currently conducted following the acquisition.
C. The entire transaction shall have been approved by the separate
boards of directors of CACI and QTI, and by the stockholders of
QTI, in accordance with applicable corporate law.
D. QTI shall have disposed of its entire interest in QuesTech
Packaging, Inc. (QTPI) prior to or in conjunction with this
transaction. Our offer assumes no residual value for QTPI's
assets or liabilities.
E. Any excess stock or cash held by the Stock Employee Compensation
Trust (SECT) following the exercise of all outstanding QTI
options shall be distributed to QTI to apply to a benefit plan
or trust in which a broad cross-section of individuals employed
by QTI participates.
F. CACI reserves the right to terminate this transaction at any
time before execution of the Agreement, if, in CACI's sole discretion,
any information obtained by CACI concerning QTI during its "due
diligence" process adversely and materially affects the value of
the transaction.
6. Except as provided in paragraphs 7 and 8 below, each party will pay its
own expenses, including attorneys, accounting, investment
bankers/valuation experts, and other fees, incurred in connection with
this transaction, and neither CACI, nor QTI, nor any subsidiary or
affiliate of CACI or QTI will be responsible for fees and expenses
other than its own, except as expressly provided hereinafter.
7. It is understood that CACI will invest substantial time to complete
its investigation of QTI and otherwise to prepare for consummation of
this transaction. Accordingly, following the execution hereof until
the Closing, neither QTI, nor any of its directors, officers, employees
or other representatives or agents shall directly or indirectly, solicit,
initiate or participate in discussions or negotiations with or otherwise
cooperate in any way with, or provide any
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QuesTech, Inc.
Letter of Intent
May 18, 1998
Page 3
information to, any corporation, partnership, person, or other entity or
group concerning any tender offer, exchange offer, merger, business
combination, sale of substantial assets, sale of shares of capital stock
or similar transaction involving QTI (all such transactions being referred
to herein as "Acquisition Proposals"). Notwithstanding the foregoing,
QTI's Board of Directors may consider an Acquisition Proposal if its legal
and/or financial advisors determine that such consideration is required in
the exercise of the Board's fiduciary duties.
8. Nothwithstanding the foregoing, in the event that QTI accepts an
Acquisition Proposal from any person or entity other than CACI, or QTI's
Board of Directors or stockholders fail to recommend or withdraws or
modifies its approval of the transaction contemplated hereby, QTI shall pay
to CACI the sum of One Million Dollars ($1,000,000).
9. Neither party shall announce or disclose to any other party (other than
those employees, agents, advisors or representatives who have a "need to
know" in order to help effectuate the transaction) the terms or provisions
of this letter or the proposed Agreement without the prior consent of the
other party (which consent shall not be unreasonably withheld) except as
disclosure maybe required by law. CACI and QTI shall consult each other
before issuing any press release or other public announcement referring to
this letter, the Agreement, or the terms and conditions of the transaction
contemplated hereby or thereby.
10. This letter signifies the intention of the parties to negotiate the
Agreement contemplated hereby, but will not be binding upon the parties
hereto except for paragraphs 6, 7, 8 and 9, which paragraphs will be
binding in accordance with their respective terms. Except as set forth
in such paragraphs, binding obligations between the parties hereto
concerning the proposed transaction will be created only though execution
and delivery of the Agreement. This letter supersedes all prior letters,
agreements and arrangements by or between CACI and QTI concerning the
proposed transaction.
11. This letter has been negotiated and executed in the Commonwealth of
Virginia and will be governed by, and construed and enforced in
accordance with, the substantive laws of the Commonwealth of Virginia
without regard to its principles of conflicts of laws.
12. During the negotiations concerning the terms of this letter or the
Agreement pending the Closing, representatives of CACI and its accountants
and attorneys will be given access at reasonable times to all relevant
books and records of QTI; and QTI shall cooperate fully in making its
officers and other employees available to such representatives of CACI at
reasonable times.
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QuesTech, Inc.
Letter of Intent
May 18, 1998
Page 4
If the foregoing correctly sets forth our understanding, please sign and return
a counterpart of this letter to the undersigned. This letter will expire and
be of no further force and effect if not countersigned by you on or before 5:00
p.m. (EDT) on Monday, May 18, 1998.
Very truly yours,
CACI INTERNATIONAL INC
By: /s/ J.P. London
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J.P. London
Chairman and Chief Executive Officer
Accepted and agreed to:
QuesTech, Inc.
By: /s/ Vincent L. Salvatori
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Vincent L. Salvatori
Date: May 18, 1998
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