SECURITIES AND EXCHANGE COMMISSION
Washington. D.C. 20549
FORM 11-K
(Mark one)
|X| ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2001
OR
|_| TRANSACTION REPORT PURSUANT TO SECTION 15(d) OF THE OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________________ to ____________________
Commission file number 1-3879
DYNCORP SAVINGS AND RETIREMENT PLAN
(Full title of the plan)
DynCorp
11710 Plaza America Drive
Reston, Virginia 20190
(Name of issuer of the securities held pursuant to the plan and
the address of its principal executive offices)
(703) 261-5000)
(Registrant's telephone number)
Notices and communications from the Securities and Exchange Commission relative
to this report should be sent to:
John J. Fitzgerald
Vice President & Controller
DynCorp
11710 Plaza America Drive
Reston, Virginia 20190
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Administrative Committee of the DynCorp Savings and Retirement Plan has duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Date: July 15, 2002 DYNCORP SAVINGS AND RETIREMENT PLAN
By: /S/ H. Montgomery Hougen
------------------------
H. Montgomery Hougen
Member, Administrative Committee
DynCorp Savings and Retirement Plan
Audited Financial Statements and
Supplemental Schedules
Year ended December 31, 2001
Contents
Report of Independent Auditors - Ernst & Young LLP...........................1
Report of Independent Public Accountants - Arthur Andersen LLP...............2
Audited Financial Statements
Statements of Net Assets Available for Benefits..............................4
Statement of Changes in Net Assets Available for Benefits....................5
Notes to Financial Statements................................................6
Supplemental Schedules
Schedule H, Line 4i--Schedule of Assets (Held At End of Year)................18
Schedule H, Line 4j--Schedule of Reportable Transactions.....................19
Report of Independent Auditors
Administrative Committee
DynCorp Savings and Retirement Plan
We have audited the accompanying statement of net assets available for benefits
of DynCorp Savings and Retirement Plan as of December 31, 2001, and the related
statement of changes in net assets available for benefits for the year then
ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2001, and the changes in its net assets available for benefits for
the year then ended, in conformity with accounting principles generally accepted
in the United States.
Our audit was performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
(held at end of year) as of December 31, 2001, and reportable transactions for
the year then ended, are presented for purposes of additional analysis and are
not a required part of the financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in our audit of the 2001 financial statements and, in our
opinion, are fairly stated in all material respects in relation to the financial
statements taken as a whole.
/s/ Ernst & Young LLP
McLean, Virginia
June 25, 2002
Report of independent public accountants
To the DynCorp Savings and Retirement Plan Committee:
We have audited the accompanying statements of net assets available for benefits
of DynCorp Savings and Retirement Plan (the Plan) as of December 31, 2000 and
1999, and the related statement of changes in net assets available for benefits
for the year ended December 31, 2000. These financial statements and the
schedules referred to below are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements and
schedules based on our audits.
Except as explained in the following paragraph, we conducted our audits in
accordance with auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As permitted by 29 CFR 2520.103-8 of the Department of Labor Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974, investment assets held by T. Rowe Price, the trustee of
the Plan, and transactions in those assets were excluded from the scope of our
audit of the Plan's 1999 financial statements, except for comparing the
information provided by the trustee, which is summarized in Note 3, with the
related information included in the financial statements.
Because of the significance of the information that we did not audit, we were
unable to, and do not, express an opinion on the Plan's financial statements as
of December 31, 1999. The form and content of the information included in the
1999 financial statements, other than derived from the information certified by
the trustee, have been audited by us and, in our opinion, are presented in
compliance with the Department of Labor Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974.
In our opinion, the financial statements, referred to above, of DynCorp Savings
and Retirement Plan as of December 31, 2000, and for the year then ended present
fairly, in all material respects, the net assets available for benefits of the
Plan as of December 31, 2000 and the changes in its net assets available for
benefits for the year then ended in conformity with accounting principles
generally accepted in the United States.
Our audit of the Plan's financial statements as of and for the year ended
December 31, 2000, was made for the purpose of the forming an opinion on the
basic financial statements taken as a whole. The supplemental schedule of assets
(held at end of year) and schedule of reportable transactions are presented for
purposes of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employment Retirement Income Security Act of 1974. The supplemental
schedules have been subjected to the auditing procedures applied in the audit of
the basic financial statements for the year ended December 31, 2000, and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Arthur Andersen LLP
Vienna, Virginia
May 2, 2002
This is a copy of the audit report previously issued by Arthur Andersen in
connection with the Plan's filing on Form 11-K for the year ended December 31,
2000. This audit report has not been reissued by Arthur Andersen in connection
with this filing on Form 11-K.
DynCorp Savings and Retirement Plan
Statements of Net Assets Available for Benefits
December 31
2001 2000
--------------------------------------------
Assets
Investments, at fair value $ 376,491,929 $ 191,687,913
Receivables:
Employee contributions receivable 698,797 986,319
Employer contributions receivable 12,306 -
Receivable from DynCorp Capital
Accumulation Retirement Plan 27,907 -
--------------------------------------------
Total assets 377,230,939 192,674,232
Liabilities
Cash overdrafts 60,719 -
Due to broker 1,375 -
--------------------------------------------
--------------------------------------------
Total liabilities 62,094 -
--------------------------------------------
Net assets available for benefits $ 377,168,845 $ 192,674,232
============================================
See accompanying notes.
DynCorp Savings and Retirement Plan
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2001
Additions
Contributions:
Employee contributions $ 20,621,162
Employee rollovers 4,097,560
Employer contributions 14,512,417
--------------------
Total contributions 39,231,139
Investment income:
Dividends and interest 2,994,730
Net realized and unrealized appreciation in fair
value of investments 80,144,246
--------------------
Total investment income 83,138,976
--------------------
Total additions 122,370,115
Deductions
Distributions to participants 27,012,903
Administrative expenses 126,576
--------------------
Total deductions 27,139,479
Transfer from other plans, net 89,263,977
--------------------
Net increase 184,494,613
Net assets available for benefits:
Beginning of year 192,674,232
--------------------
End of year $ 377,168,845
====================
See accompanying notes.
DynCorp Savings and Retirement Plan
Notes to Financial Statements
December 31, 2001
1. Description of the Plan
Effective January 1, 2001, the DynCorp Savings and Retirement Plan, adopted as
of April 1, 1983 (the Plan), was bifurcated into the following two identical
savings and retirement plans under section 401K of the Internal Revenue Code
(IRC): 1) the DynCorp Savings and Retirement Plan (SARP or the Plan) and 2) the
DynCorp Capital Accumulation Retirement Plan (CAP). As a result, assets totaling
$52,873,307 were transferred from the SARP to the CAP. Concurrently with the
bifurcation of the DynCorp Savings and Retirement Plan into the CAP and the
SARP, the DynCorp Employee Stock Ownership Plan (ESOP) was bifurcated into two
identical qualified plans, one of which, ESOP "A", was applicable to
participants under the SARP, and the other of which, ESOP "B", was applicable to
participants under the CAP. Effective January 1, 2001, ESOP "A" merged into the
SARP and ESOP "B" merged into the CAP. Thus, on January 1, 2001, assets of
$142,137,284 transferred from the ESOP to the SARP, which was comprised
primarily of 4,460,504 ESOP shares as well as a portion of the cash balance
outstanding as of December 31, 2000. Therefore, each eligible participant of the
Plan on January 1, 2001 now has a 401K account (401K Account) and an ESOP
account (ESOP Account) under the Plan.
The SARP is a multiple employer defined contribution plan under IRC section
413(c). Employers participating in the Plan include DynCorp, DynKePRO LLC,
DynPort Vaccine Company LLC and DynPar LLC (collectively, DynCorp or the
Company). The SARP provides for retirement, disability, and death benefits and
is subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended (ERISA). There is an Administrative Committee for the Plan,
which is composed of members appointed by the Board of Directors of DynCorp.
The Plan's ESOP Accounts as well as DynCorp common stock held in the Plan's 401K
Accounts are held in trust under an agreement between the Company and HSBC Bank
USA. The Company serves as the record-keeper for the ESOP Accounts. All
remaining assets of the Plan's 401K Accounts are held in trust under an
agreement between the Company and T. Rowe Price Trust Company (T. Rowe). T. Rowe
is also the record-keeper for these assets.
The following description of the Plan provides only general information.
Participants should refer to the Summary Plan Description for a more complete
description of the Plan's provisions.
DynCorp Savings and Retirement Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Eligibility
The Plan is generally available to salaried and non-union employees. Employees
become eligible to participate in the Plan on the first day of their first
payroll period following their date of hire.
Contributions
The Plan is a contributory plan under which participating employees may
contribute up to 18% of their pre-tax compensation, as defined by the Plan, or
$10,500 for the year ended December 31, 2001 (subject to annual change by the
IRC). Certain employees may also make after-tax contributions of 1% to 10% of
their compensation, as defined by the Plan. Participants may also contribute
amounts representing distributions from other qualified plans.
The Company makes a matching employer contribution and a supplemental matching
employer contribution and may make discretionary employer contributions
(collectively the Employer Contributions). The matching employer contribution is
equal to 50% of the first 8% of the participant's salary deferral contributions.
The supplemental matching employer contribution relates to those salary deferral
contributions made by a participant to DynCorp common stock (DynCorp Stock) and
is equal to 50% of the first 3% of the participant's salary deferral
contributions to that fund. The discretionary employer contribution is to be
allocated to each eligible participant's account in an amount equal to at least
1% of the participant's compensation. The Company may make the Employer
Contributions in cash, DynCorp Stock, or a combination thereof. During the year
ended December 31, 2001, of the total employer contributions made to the Plan,
$14,071,417 was made in DynCorp Stock. During 2001, the Company made a
discretionary contribution equal to 1% of each eligible participant's
compensation.
A participant who is covered by a collective bargaining agreement between the
Company and a union may only make or receive such salary deferral contributions
and any employer contributions as provided for in such collective bargaining
agreement. Employer contributions are generally made in cash.
There were no contributions to any participant's ESOP Account in 2001. In
addition, it is not expected that new participants will receive an ESOP Account.
DynCorp Savings and Retirement Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Investment Options
Except for contributions to DynCorp Stock, participants may direct the
investment of all employee and employer contributions in their 401K Accounts in
any of thirteen available investment options, which currently include mutual
funds and common/collective trusts. Participants may also elect to invest in a
variety of other mutual funds and publicly traded stocks and bonds through a
self-directed brokerage account option, Tradelink+.
All salary deferral contributions which the participant elects to initially
invest in DynCorp Stock and all Employer Contributions made on or after January
1, 2001 which the Company elects to make in DynCorp Stock are invested in the
Restricted DynCorp Stock Fund and may not be reinvested in other investment
funds until the expiration of four full calendar quarters following the end of
the payroll period to which such contributions relate. At the expiration of this
waiting period, the stock and related earnings are transferred to the
Unrestricted DynCorp Stock Fund at which time a participant may re-direct the
investment of these monies. Employer Contributions and related earnings made in
DynCorp Stock prior to January 1, 2001 must stay invested in the Restricted
DynCorp Stock Fund and are never eligible for transfer to another fund.
Contributions to the Restricted DynCorp Stock Fund are initially invested in a
short-term interest bearing fund (T. Rowe Price Prime Reserve Fund) until
DynCorp stock can be purchased on a future trade date (see The Internal Market
below).
The Internal Market
On May 10, 1996, the Company's Form S-1 filing for the registration of shares of
common stock became effective, resulting in the establishment of a limited
trading market (the Internal Market) established by the Company's wholly owned
subsidiary, Dyn Ex, Inc. The Internal Market is managed by Dyn Ex, Inc., to
provide employees, directors, and stockholders of the Company with the
opportunity to buy and sell shares of common stock. The Internal Market
generally permits eligible stockholders to buy and sell shares of common stock
on four predetermined days each year (each a Trade Date) at a price determined
by the DynCorp Board of Directors.
DynCorp Savings and Retirement Plan
Notes to Financial Statements (contintued)
1. Description of the Plan (continued)
The Internal Market (continued)
The Company may also sell (through one or more of its employee benefit plans) or
buy shares of common stock on the Internal Market for its own account, but will
do so only to address imbalances between the number of shares offered for sale
and bid for purchase by shareholders on any particular Trade Date. The Company
will not be both a buyer and a seller on the Internal Market on the same Trade
Date. The purchase and sale of shares on the Internal Market are carried out by
Buck Investment Services, Inc., a registered broker-dealer, upon instructions
from the respective buyers and sellers. There is no public market for the common
stock, and it is not currently anticipated that such a market will develop.
Vesting
Participants are at all times 100% vested in their 401K Account elective salary
deferrals, voluntary after-tax contributions, and rollover contributions.
Participants are fully vested in their 401K Account Employer Contributions upon
completion of one year of service.
Participants are fully vested in their ESOP Accounts in accordance with the
following vesting schedule based on credited years of service as defined in the
Plan:
Years of Vesting
Service Percentage
- ----------------------------------------------------------------------------
Less than two years 0%
Two years but less than three years 50%
Three years but less than four years 75%
Four years or more 100%
Participant Accounts
Each participant's 401K Account is credited with the participant's contribution,
any Employer Contributions, and an allocation of Plan earnings less any
administrative expenses. Allocations of earnings and administrative expenses are
based on account balances.
DynCorp Savings and Retirement Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Participant Loans
Participants may borrow from their 401K Accounts up to 50% of their vested
account balance subject to a minimum of $1,000 and a maximum of the lesser of
(a) $50,000 less the highest outstanding loan balance in the preceding 12-month
period over the outstanding loan balance on the day immediately preceding
issuance of the loan or (b) the amount of the participant's account invested in
non-Company stock investment funds, the terms of which permit withdrawals
without penalty. No more than one plan loan for the purpose of purchasing a
primary residence and one plan loan for other purposes may be outstanding at any
one time. Loan terms range from one to five years, but may extend beyond five
years for the purchase of a primary residence. The loans are secured by the
balance in the participant's account and bear interest at a rate commensurate
with local prevailing rates as determined by the Plan administrator. Principal
and interest are paid through payroll deductions.
Forfeitures
Forfeited balances of terminated participants' nonvested accounts are used to
reduce future Employer Contributions. At December 31, 2001 and 2000, forfeited
nonvested accounts totaled $108,600 and $129,794, respectively.
Plan Expenses
Loan fees and brokerage fees related to TradeLink+ transactions are paid by
participants. All other administrative expenses of the Plan are paid by the Plan
and allocated to participant accounts or, at the election of the Company, are
paid by the Company. For the year ended December 31, 2001, the Company paid
approximately $217,000 of the Plan's expenses.
Payment of Benefits
Benefits provided by the Plan are paid from net assets available for benefits.
The benefit to which a Plan participant is entitled is the benefit that can be
provided from the participant's vested account.
DynCorp Savings and Retirement Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Payment of Benefits (continued)
401K Accounts
- -------------
In-service withdrawals and hardship distributions are permitted as defined in
the Plan. Participants may elect one of several types of annuities or receive
payment in one lump sum, subject to certain Plan restrictions related to
investments in DynCorp Stock.
ESOP Accounts
- -------------
Upon retirement, death or disability, a participant's vested account balance in
his or her ESOP Account, consisting of DynCorp Stock, becomes payable in 20%
installments distributed within 60 days after the end of the Plan year. Balances
less than $5,000 or fewer than 100 shares are payable in a single distribution
to be distributed within 60 days after the end of the Plan year. For all other
terminations of employment, participants may request distribution of their
vested shares in 20% installment to begin five years after the Plan year the
participant terminates employment. Balances less than $5,000 or fewer than 100
shares are paid out as soon as administratively practical after the close of the
Plan year, following a one Plan year break in service. Upon a participant's
timely request to sell distributed shares, either during the first 60 days after
receiving an initial distribution letter or at a specified time within the next
year, the Company is obligated to purchase the shares from the participant at
the fair market value as long as the Company's stock is not publicly traded (see
The Internal Market above). Under the Subscription Agreement with the Plan dated
September 9, 1998, the Company is permitted to defer put options if, under
Delaware law, the capital of the Company would be impaired as a result of such a
repurchase. After ten years of participating in the Plan and upon reaching age
55, participants may commence to diversify in other investments. The effect of
this Plan provision is to allow participants nearing retirement age to put
shares back to the Company prior to termination.
2. Summary of Significant Accounting Policies
Basis of Presentation
The financial statements have been prepared on the accrual basis of accounting.
Benefits are recorded when paid.
DynCorp Savings and Retirement Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
Investment Valuation and Income Recognition
The Plan's investments are stated at fair value. Shares of mutual funds and
common/collective trusts are valued at quoted market prices at the net asset
value of shares held by the Plan at year-end. With respect to investments held
in TradeLink+ accounts, securities traded on a national securities exchange are
valued at the last reported sales price on the last business day of the plan
year; investments traded in the over-the-counter market and listed securities
for which no sale was reported on that date are valued at the average of the
last reported bid and ask prices. Participant loans are valued at their unpaid
balances, which approximate fair value.
At December 31, 2001, the fair value of the DynCorp Stock and the ESOP shares
were determined based on an annual independent appraisal. The estimated fair
value was determined to be $47.00 for enterprise shares and $44.75 for minority
shares as of December 31, 2001. Enterprise shares (certain ESOP shares) are
shares bought at a "control premium," reflecting the higher price that buyers
typically pay when they buy an entire company (as the ESOP and other investors
did in 1988). Minority shares (certain ESOP shares and the DynCorp Stock) are
shares bought at a "minority interest price," reflecting the lower price that
buyers typically pay when they are buying a minority position in a company.
During each year, quarterly independent appraisals were also performed to
determine the fair value of the DynCorp Stock and ESOP shares on each Trade
Date.
At December 31, 2000, the DynCorp Stock was recorded at fair value based on the
share price for the December 2000 Trade Date which was determined based on an
independent appraisal. The fair value of the ESOP enterprise and minority shares
was determined based on an annual independent appraisal.
The valuations were prepared utilizing several different pricing methodologies
and assumptions and were based on the Company's financial statements,
management's forecasts, and general economic, market and other financial
conditions at December 31, 2001. The projections used in the valuations
included, among other things, an increase in revenues, operating margins and
cash flow, and a plan to further diversity and expand DynCorp's business base.
Because of the inherent uncertainty of the valuation, the estimated value may
differ significantly from the value that would have been used had a ready market
for the securities existed, and the differences could be material.
Purchases and sales of securities are recorded on a trade-date basis. Dividends
are recorded on the ex-dividend date.
DynCorp Savings and Retirement Plan
Notes to Financial Statements (continued)
2. Summary of Significant Accounting Policies (continued)
Reclassifications
Loans receivable of $5,631,425 as of December 31, 2000 reported as receivables
in the prior year have been reclassified to investments to conform to the
current year's presentation.
3. Investments
The following presents investments that represent 5% or more of the Plan's net
assets as of December 31, 2001:
December 31
2001 2000
--------------------------------------
401K Accounts
T. Rowe Price Growth Stock Fund $26,150,098 $44,712,926
T. Rowe New Horizons Fund 22,049,089
T. Rowe Price Growth & Income Fund 21,547,135
T. Rowe Price Mid-Cap Growth Fund 19,642,039
T. Rowe Price Stable Value Common Trust Fund 19,357,077
T. Rowe Price Equity Index Trust Fund 16,037,768
Restricted DynCorp Stock Fund* 43,702,979 15,926,592
ESOP Accounts
DynCorp Stock* 194,780,581
*Nonparticipant directed
During 2001, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated (depreciated) in
fair value as follows:
Investments at quoted fair value:
Mutual funds $ (6,593,630)
Common/collective trusts (1,522,261)
Tradelink+ (primarily common stock and mutual funds) 2,636
Investments at estimated fair value:
DynCorp Stock - 401K Accounts 24,007,144
DynCorp Stock - ESOP Accounts 64,250,357
---------------------
Total $ 80,144,246
=====================
DynCorp Savings and Retirement Plan
Notes to Financial Statements (continued)
4. Nonparticipant Directed Investments
Information about the net assets and the significant components of the changes
in net assets relating to the Plan's nonparticipant-directed investments are as
follows:
Restricted DynCorp Stock Fund
December 31
2001 2000
---------------------------------------------
Net assets:
Investments, at estimated fair value:
Interest-bearing cash $ 218,935 $ 432,955
DynCorp Stock 43,484,044 15,493,637
----------------------------------------------
43,702,979 15,926,592
Employee contribution receivable 202,924 171,393
----------------------------------------------
$43,905,903 $16,097,985
==============================================
Year ended
December 31
2001
---------------------
Changes in net assets:
Employee contributions $ 5,965,511
Employer contributions 14,071,417
Dividends and interest 30,832
Net realized and unrealized appreciation in fair
value of investments 15,918,367
Distributions to participants (1,956,279)
Transfer to Unrestricted DynCorp Stock Fund (2,826,237)
Transfer to other plans (3,395,693)
---------------------
$27,807,918
=====================
DynCorp Savings and Retirement Plan
Notes to Financial Statements (continued)
4. Nonparticipant Directed Investments (continued)
ESOP Account
December 31
2001
---------------------
Net assets:
Investments, at estimated fair value:
DynCorp Stock $ 194,780,581
Employer contributions receivable 3,178
Receivable from CAP 27,907
Cash overdrafts (60,719)
---------------------
$194,750,947
=====================
Year ended
December 31
2001
---------------------
Changes in net assets:
Dividends and interest $ 10,769
Net realized and unrealized appreciation in fair
value of investments 64,244,144
Distributions to participants (11,530,990)
Administrative expenses (110,260)
Transfer from other plan 142,137,284
---------------------
$194,750,947
=====================
At December 31, 2001, 1,726,712 enterprise shares and 2,539,109 minority shares
were outstanding, respectively.
5. Plan Termination
Although it has not expressed any intent to do so, the Company has the right,
under the Plan, to terminate the Plan subject to the provisions of ERISA. In the
event of Plan termination, participants will become 100% vested in their
accounts.
DynCorp Savings and Retirement Plan
Notes to Financial Statements (continued)
6. Income Tax Status
The Plan has received a determination letter from the Internal Revenue Service
dated November 9, 1995, stating that the Plan is qualified under Section 401(a)
of the IRC and, therefore, the related trust is exempt from taxation. Subsequent
to this issuance of the determination letter, the Plan was amended. Once
qualified, the Plan is required to operate in conformity with the IRC to
maintain its qualification. The plan administrator believes the Plan is being
operated in compliance with the applicable requirements of the IRC and,
therefore, believes that the Plan, as amended, is qualified and the related
trust is tax exempt.
7. Party-in-Interest Transactions
Certain Plan 401K Account investments are shares of mutual funds or
common/collective trusts managed by T. Rowe, the trustee. Transactions involving
these investments are considered to be party-in-interest transactions for which
a statutory exemption exists.
8. Reconciliation of Financial Statements to Form 5500
Amounts allocated to withdrawing participants for benefit claims that have been
processed and approved for payment prior to December 31, but not yet paid as of
those dates, are recorded on Form 5500 but not in the accompanying financial
statements.
The following is a reconciliation of net assets available for benefits per the
financial statements to Form 5500:
December 31
2001 2000
---------------------- ----------------------
Net assets available for benefits per the financial $377,168,845 $192,674,232
statements
Amount allocated to withdrawing participants (482,438) (10,708)
---------------------- ----------------------
Net assets available for benefits per Form 5500 $376,686,407 $192,663,524
====================== ======================
DynCorp Savings and Retirement Plan
Notes to Financial Statements (continued)
8. Reconciliation of Financial Statements to Form 5500 (continued)
The following is a reconciliation of benefits paid to participants per the
financial statements to Form 5500:
Year ended
December 31
2001
---------------------
Benefits paid to participants per the financial statements $27,012,903
Add--Amounts allocated to withdrawing participants at
December 31, 2001 482,438
Less-Amounts allocated to withdrawing participants at
December 31, 2000 (10,708)
---------------------
Benefits paid to participants per Form 5500 $27,484,633
=====================
The following is a reconciliation of transfer from other plans per the financial
statements to Form 5500:
Year ended
December 31
2001
---------------------
Transfer from other plans, net $89,263,977
Less--Amounts allocated to withdrawing participants at
December 31, 2000 (185,645)
---------------------
Transfers from other plans, net per Form 5500 $89,078,332
=====================
9. Subsequent Events
Effective January 1, 2002, the Company adopted certain amendments to the Plan.
Beginning on January 1, 2002, participating employees may contribute up to 50%
of their pre-tax compensation, as defined by the Plan, or 12% if the participant
was a highly-paid employee or $11,000 (subject to annual change by the IRC).
Effective May 30, 2002, Great Banc Trust Company replaced HSBC Bank USA as
trustee for the Plan's ESOP accounts.
Supplemental Schedules
DynCorp Savings and Retirement Plan
Schedule H, Line 4i--Schedule of Assets (Held At End of Year)
EIN-36-2408747 Plan-333
December 31, 2001
Description of Investment
Including Maturity Date,
Indentity of Issuer, Borrower, Lessor, or Rate of Interest, Collateral
Similar Party Par or Maturity Value Cost Current Value
- ----------------------------------------------------------------------------------------------------------------------------
Restricted DynCorp Stock Fund** Restricted Company Stock $28,703,485 $43,702,979
T. Rowe Price Growth Stock Fund* Mutual Fund *** 26,150,098
T. Rowe Price New Horizons Fund* Mutual Fund *** 17,210,207
T. Rowe Price Growth & Income Fund* Mutual Fund *** 14,820,851
T. Rowe Price Mid-Cap Growth Fund* Mutual Fund *** 16,278,048
T. Rowe Price Stable Value Common ***
Trust Fund* Common/Collective Trust 14,607,293
T. Rowe Price Equity Index Trust Fund* Mutual Fund *** 11,799,159
Unrestricted DynCorp Stock Fund* Unrestricted Company Stock *** 15,806,079
T. Rowe Price Corporate Income Fund* Mutual Fund *** 4,722,174
T. Rowe Price Global Stock Fund* Mutual Fund *** 3,535,196
T. Rowe Price International Stock Fund* Mutual Fund *** 2,607,828
T. Rowe Price Personal Strategy Growth Fund* Mutual Fund *** 2,316,482
T. Rowe Price Personal Strategy Mutual Fund *** 1,535,224
Balanced Fund*
T. Rowe Price U.S. Treasury Mutual Fund *** 2,588,531
Intermediate Fund*
TradeLink+ Investments Investments in Mutual Funds and *** 288,704
Publicly Traded Stocks and
Bonds
T. Rowe Price Personal Strategy Income Fund* Mutual Fund *** 804,185
DynCorp common stock** ESOP Account 112,706,152 194,780,581
Participant loans* Loans (6.00% - 10.50%) 2,938,310
---------------
$376,491,929
===============
*Represents a party-in-interest
**Represents a party-in-interest and a nonparticipant directed investment
*** Represents a participant-directed investment and, therefore, historical cost
is not required to be presented
DynCorp Savings and Retirement Plan
Schedule H, Line 4j--Schedule of Reportable Transactions
EIN-36-2408747 Plan-333
Year ended December 31, 2001
(h) Current Value
of Asset on (i) Net
(c) Purchase (d) Selling (g) Cost of Transaction Gain or
(a) Identity of Party Involved (b) Description of Assets Price Price Asset Date (Loss)
- -----------------------------------------------------------------------------------------------------------------------------------
Category (iii) - series of transactions
Restricted DynCorp Stock Fund Common stock $18,659,960 $18,659,960 $18,659,960
Restricted DynCorp Stock Fund Common stock $6,168,261 6,125,491 6,168,261 $42,770
Restricted DynCorp Stock Fund T. Rowe Price Prime Reserve
Fund 5,949,578 5,949,578 5,949,578
Restricted DynCorp Stock Fund T. Rowe Price Prime Reserve
Fund 6,162,401 6,162,401 6,162,401 -
There were no Category (i), (ii) or (iv) transactions during the year ended
December 31, 2001.
Columns (e) and (f) are not applicable