SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
ANNUAL REPORT
JANUARY 31, 1994
EXHIBIT 28(a)
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 1994
----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to ________
Commission file number _____________
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
---------------------------------
(Full title of the plan)
Science Applications International Corporation
10260 Campus Point Drive, San Diego, California 92121
-----------------------------------------------------
(Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office)
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Science Applications International Corporation
1993 Stock Purchase Plan Committee have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly
authorized.
SCIENCE APPLICATIONS
INTERNATIONAL CORPORATION
1993 EMPLOYEE STOCK
PURCHASE PLAN
Date: March 11, 1994 BY: /s/Anne Maharry
---------------
Anne Maharry
Science Applications
International Corporation
1993 Stock Purchase
Plan Committee
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
INDEX TO FINANCIAL STATEMENTS
Page
____
Report of Independent Accountants F-2
Financial Statements:
Statement of Net Assets Available
for Benefits as of January 31, 1994 and 1993 F-3
Statement of Changes in Net Assets
Available for Benefits for the years ended
January 31, 1994, 1993, and 1992 F-4
Notes to Financial Statements F-5
Schedules:
None
All schedules are omitted because they are not applicable or
the required information is shown in the Financial Statements or
the notes thereto.
F-1
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stock Purchase Plan Committee and Participants of the
Science Applications International Corporation 1993 Employee Stock
Purchase Plan
In our opinion, the financial statements listed in the
accompanying index present fairly, in all material respects, the
net assets available for benefits of the Science Applications
International Corporation 1993 Employee Stock Purchase Plan at
January 31, 1994 and 1993, and the changes in net assets
available for benefits for each of the three years in the period
ended January 31, 1994, in conformity with generally accepted
accounting principles. 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
audits. We conducted our audits of these statements in accordance
with generally accepted auditing standards which 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, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE
San Diego, California
March 11, 1994
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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF NET ASSETS AVAILABLE
FOR BENEFITS
January 31
-------------------------
1994 1993
------------ ------------
ASSETS:
Investments at fair value:
SAIC Class A Common Stock
(Cost $2,358,000 and
$1,815,000, respectively) $ 2,601,000 $ 1,889,000
Receivables:
Participant contributions
withheld 727,000 645,000
Employer contributions
receivable 38,000 34,000
----------- -----------
3,366,000 2,568,000
LIABILITIES:
Benefits distributable 2,601,000 1,889,000
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $ 765,000 $ 679,000
=========== ===========
See accompanying notes to financial statements.
F-3
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended January 31
-------------------------------------
1994 1993 1992
----------- ----------- -----------
Gain realized on distribution
of investments in SAIC
Common Stock $ 74,000 $ 84,000 $ 43,000
Increase (decrease)
in unrealized appreciation
of investments in SAIC
Common Stock 168,000 (10,000) 42,000
Participant contributions 3,061,000 2,456,000 2,079,000
Employer contributions 163,000 129,000 109,000
Benefits paid and
additions to benefits
distributable (3,380,000) (2,521,000) (2,149,000)
----------- ----------- -----------
Increase in net assets 86,000 138,000 124,000
Net assets at beginning of year 679,000 541,000 417,000
----------- ----------- -----------
Net assets at end of year $ 765,000 $ 679,000 $ 541,000
=========== =========== ===========
See accompanying notes to financial statements.
F-4
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
1993 EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE A - PLAN DESCRIPTION
The Science Applications International Corporation 1993
Employee Stock Purchase Plan (the "Plan") is a two year plan which
became effective on July 9, 1993 and will terminate on July 31,
1995. The financial statements reflect the net assets and
changes in net assets of the Plan as well as the previous plan
(the "1991 Plan") which became effective June 27, 1991. The 1991
Plan terminated on June 31, 1993. All shares purchased under the
1991 Plan were distributed or repurchased by March 31, 1994. The
plans are identical except for the number of shares reserved for
issuance. Both plans provide for the purchase of Class A Common
Stock of Science Applications International Corporation (the
"Company" or "SAIC") by participating employees through voluntary
payroll deductions. Each participant is furnished with a copy of
the complete Plan before electing to participate in the Plan.
Science Applications International Corporation is the Trustee
under the Plan. No trustee fees have ever been paid by the Plan.
No bonds of any nature are furnished to the Plan by the Trustee,
its officers or employees. The Plan is administered by the Stock
Purchase Plan Committee (the "Committee") whose members are
appointed by the Company's Board of Directors to serve at the
discretion of the Board. The members of the Committee do not act
in the capacity of trustees. The members of the Committee receive
no compensation from the Plan for services rendered in connection
therewith. The members of the Committee as of March 11, 1994
are: A. Maharry, W. Reed, W. A. Roper. The Plan is not subject
to the Employee Retirement Income Security Act of 1974, as
amended.
At predetermined purchase dates during the year, the Trustee
purchases for the account of each participant the whole number of
shares of the Company's Class A Common Stock (the "Common Stock")
which may be acquired from funds available in the participant's
Stock Purchase Account, together with the Company's 5%
contribution described below. The authority to control and manage
the operation and administration of the Plan is vested in the
Stock Purchase Plan Committee. Generally, all employees of the
Company and its affiliates who have adopted the Plan are eligible
to participate in the Plan. Employees may contribute to the Plan
by authorizing payroll deductions in amounts equal to 3% or more,
up to a maximum of 10%, of their base compensation. These
contributions are allocated to the Stock Purchase Accounts of the
respective participants. No interest is paid on amounts in the
participants' Stock Purchase Accounts.
Purchases of SAIC's Common Stock are made in the limited
secondary market or from the Company. There is no general public
market for the Common Stock. However, the Company has established
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and maintains a limited secondary market for the Common Stock
through its wholly-owned subsidiary, Bull, Inc. This limited
market permits stockholders to sell stock at a price determined by
a formula (the "Formula Price") to employees, consultants and
directors of the Company who have been approved by the Board of
Directors or the Operating Committee of the Board of Directors as
being entitled to purchase an equity interest in the Company.
The purchase price to be paid for shares of Common Stock is
the prevailing Formula Price. Of this price, 95% is paid out of
the participant contributions, and 5% is paid or accrued by the
Company. A participant is not entitled to purchase an amount of
Common Stock having a fair market value, as measured on its
purchase date, in excess of $25,000 in any calendar year pursuant
to the Plan and any other employee stock purchase plans which may
be adopted by the Company.
A participant's interest in his account is 100% vested at all
times. Shares of Common Stock acquired under the Plan will be
issued to the participant no later than 90 days after the end of
the Company's fiscal year in which the acquisition occurred.
Until distribution occurs, the shares are held by the Company,
acting as Trustee, on behalf of the participants. Each
participant is furnished with a statement of account in the Plan
at the time of any distribution.
All shares of Common Stock purchased pursuant to the Plan are
subject to the Company's right of repurchase upon the
participant's termination of employment or affiliation with the
Company. The repurchase price is the then prevailing Formula
Price in the case of shares held by the participant directly, and
at the Formula Price in effect at the time of the annual
distribution of shares out of the Plan in the case of shares held
by the Plan for the benefit of the participant. Such shares are
also subject to the Company's right of first refusal in the event
that the participant desires to sell such shares other than in the
limited market.
Participants may withdraw the money held in their Stock
Purchase Accounts at any time prior to the acquisition of shares
of Common Stock therewith, although upon doing so the participant
will no longer be eligible to re-enroll until the beginning of
the next applicable plan year.
The Plan will terminate on the earlier of July 31, 1995 or
when 650,000 shares of Common Stock have been purchased pursuant
to the Plan or at the discretion of the Company's Board of
Directors. For the Plan year ended January 31, 1994, 248,077
shares of Common Stock were purchased by the Plan.
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NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accompanying financial statements are prepared on the
accrual basis of accounting.
INVESTMENT VALUATION AND INCOME, GAINS AND LOSSES
The fair value of Common Stock is determined using the
Formula Price. Realized gains and losses on Common Stock are the
difference between the Formula Price when distributed and the
original cost of the shares of Common Stock. As of January 31,
1994 and 1993, the Formula Price per share was $14.19 and $12.01,
respectively, for Class A Common Stock. The number of shares held
by the Plan was 183,278 and 157,327 on January 31, 1994 and 1993,
respectively.
BENEFITS DISTRIBUTABLE
Investments in Common Stock which are distributed from the
Plan after the end of the Plan's fiscal year are considered a
liability of the Plan in the year in which the shares were
acquired.
ADMINISTRATIVE EXPENSES OF THE PLAN
All expenses incurred in the administration of the Plan,
including Trustee fees, are paid out of the Plan assets unless the
Company elects to pay such costs. During Plan years ended January
31, 1994, 1993, and 1992, the Company paid all administrative
expenses of the Plan.
CONTRIBUTIONS
Participant contributions are accrued when the compensation
from which the contribution is made is earned. Employer
contributions are accrued when the corresponding participant's
contributions are accrued.
NOTE C - TAX STATUS AND FEDERAL INCOME TAX CONSEQUENCES TO
PARTICIPANTS
The Plan is not subject to federal income taxes and is
intended to qualify under Section 423(b) of the Internal Revenue
Code.
No taxable income will be recognized by a participant in the
1993 Stock Purchase Plan until the taxable year of sale or
certain other dispositions of the shares of Common Stock acquired
under the Plan.
F-7