UNITED STATES
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):
February 3, 2006 (January 30, 2006)
DRS TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 001-08533 13-2632319
(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification Number)
5 Sylvan Way, Parsippany, New Jersey 07054
(Address of principal executive offices)
(973) 898-1500
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
Convertible Notes
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On January 31, 2006, DRS Technologies, Inc. ("DRS") completed the
offering (the "Convertible Notes Offering") of $300 million aggregate principal
amount of its Convertible Senior Notes due 2026 (the "Convertible Notes")
pursuant to Rule 144A (Qualified Institutional Buyers) under the Securities Act
of 1933, as amended (the "Securities Act"). In connection with the Convertible
Notes Offering, DRS entered into an indenture and a registration rights
agreement.
The Convertible Notes were issued under an indenture, dated as of
January 31, 2006, among DRS, the Subsidiary Guarantors named therein and The
Bank of New York, as trustee (the "Convertible Notes Indenture"). DRS's payment
obligations under the Convertible Notes will be fully and unconditionally
guaranteed, jointly and severally, by certain of its existing and future
domestic subsidiaries.
The Convertible Notes bear interest at an annual rate of 2.00% from
January 31, 2006, or from the most recent date to which interest has been paid
or provided for, until, but not including, February 1, 2026, payable
semi-annually in arrears on February 1 and August 1. Contingent interest is
payable in certain circumstances. Holders may convert the Convertible Notes into
cash and, if applicable, shares of DRS's common stock, par value $0.01 per share
("DRS Common Stock"), based on a conversion rate of 16.7504 shares per $1,000
principal amount of Convertible Notes (representing a conversion price of
approximately $59.70 per share of common stock), subject to adjustment only
under certain circumstances.
Holders have the right to require DRS to purchase all or a portion of
their Convertible Notes for cash on February 1, 2011, February 1, 2016 and
February 1, 2021, at a purchase price equal to 100% of the principal amount of
the Convertible Notes plus accrued and unpaid interest (including additional
interest, if any) to but not including the purchase date.
Upon the occurrence of certain fundamental changes, and before the
maturity or redemption of the Convertible Notes, holders have the right to
require DRS to purchase all or a portion of their Convertible Notes for cash at
a purchase price equal to 100% of the principal amount of the Convertible Notes
plus accrued and unpaid interest (including contingent interest and additional
interest, if any) to but not including the fundamental change repurchase date.
The Convertible Notes Indenture contains customary events of default.
Neither the Convertible Notes, the guarantees nor the DRS Common Stock
issuable upon conversion of the Convertible Notes have been registered under the
Securities Act or the securities laws of any jurisdiction and are subject to
certain restrictions on transfer. DRS has no obligation to register the
Convertible Notes or the guarantees for resale.
DRS has determined that the comparable yield for the Convertible Notes
is 7.375%, compounded semi-annually.
Registration Rights Agreement
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On January 31, 2006, DRS entered into a registration rights agreement
with the initial purchasers of the Convertible Notes (Bear, Stearns & Co. Inc.,
Wachovia Capital Markets, LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Banc of America Securities LLC, CIBC World Markets Corp.,
Jefferies & Company, Inc., and Ryan Beck & Co., Inc.) for the benefit of the
holders of Convertible Notes (the "Registration Rights Agreement"). Pursuant to
the Registration Rights Agreement, DRS will, at its expense, use its reasonable
best efforts to keep its existing automatic shelf registration statement (File
No. 333-130926), effective until the earliest of:
(i) two years after the issue date of any of the Convertible Notes;
(ii) the date on which the holders of the DRS Common Stock issuable
upon conversion of the Convertible Notes are able to sell all such shares of DRS
Common Stock in accordance with the provisions of Rule 144(k) under the
Securities Act;
(iii) the date on which all of the DRS Common Stock issuable upon
conversion of the Convertible Notes has been included on the existing shelf
registration statement and disposed of pursuant to the existing shelf
registration statement;
(iv) the date on which all of the Convertible Notes cease to be
outstanding (whether as a result of repurchase and cancellation, conversion or
otherwise) and any of the conditions in clauses (ii), (iii) or (v) of this
paragraph, or a combination thereof, have been satisfied; and
(v) the date on which all of the shares of DRS Common Stock issuable
upon conversion of the Convertible Notes have been sold pursuant to Rule 144
under the Securities Act.
If the existing shelf registration statement ceases to be effective and
DRS receives a written request from a holder of Convertible Notes or shares of
DRS Common Stock issued upon conversion of the Convertible Notes, DRS will use
its reasonable best efforts to file and have declared effective a shelf
registration statement covering, without limitation, the resales of such
holder's shares within a specified time period. DRS will not need to file an
additional shelf registration statement if the existing shelf registration
statement is again declared effective within a specified period.
If DRS does not file a prospectus supplement or shelf registration
statement within the specified time periods, DRS will pay the requesting holder
additional interest on such holder's Convertible Notes.
The initial purchasers may, from time to time, engage in transactions
with, and perform services for, DRS in the ordinary course of its business.
Bear, Stearns & Co. Inc. has advised DRS in connection with the previously
announced merger with Engineered Support Systems, Inc., for which it received
customary fees and expenses. Each of Bear, Stearns Corporate Lending Inc., an
affiliate of Bear, Stearns & Co. Inc., Wachovia Bank, National Association, an
affiliate of Wachovia Capital Markets, LLC and Bank of America, N.A., an
affiliate of Banc of America Securities LLC, is a lender under DRS's amended and
restated senior secured credit facility. Wachovia Bank, National Association, an
affiliate of Wachovia Capital Markets, LLC, is the administrative agent for our
lenders under the amended and restated senior secured credit facility. Each of
the initial purchasers also acted as an underwriter in DRS's previously
announced offering of its $350 million aggregate principal amount of 6 5/8%
Senior Notes due 2016 and the $250 million aggregate principal amount of 7 5/8%
Senior Subordinated Notes due 2018.
ITEM 3.02. UNREGISTERED SALES OF EQUITY SECURITIES.
In connection with DRS's offering of the Convertible Notes as described
in Item 1.01 of this Form 8-K, DRS has entered into that certain Purchase
Agreement, dated as of January 30, 2006, among DRS, Bear, Stearns & Co. Inc.,
Wachovia Capital Markets, LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Banc of America Securities LLC, CIBC World Markets Corp.,
Jefferies & Company, Inc., and Ryan Beck & Co., Inc.
The information in Item 1.01 of this Form 8-K (with regards to the
Convertible Notes) is hereby incorporated by reference to this Item 3.02. As
described in Item 1.01, the Convertible Notes are convertible into shares of
DRS Common Stock at an initial conversion price of $16.7504, subject to
adjustment in certain circumstances. The aggregate gross proceeds to DRS from
the offering of the Convertible Notes was $300.0 million and the aggregate
proceeds net of discounts and commissions to the Initial Purchasers totaled
approximately $293.25 million.
SIGNATURE
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 thereunto duly authorized.
DRS TECHNOLOGIES, INC.
Date: February 3, 2006 By: /s/ Richard A. Schneider
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Name: Richard A. Schneider
Title: Executive Vice President,
Chief Financial Officer