1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 1999 [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 000-08193 A. Full title of the plan and address of the plan, if different from that of the issuer named below: Sensytech, Inc. 401(k) Profit Sharing Plan B. Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office: Sensytech, Inc. 8419 Terminal Road Newington, Virginia 22122 2 REQUIRED INFORMATION Financial Statements: 4. In lieu of requirements of Items 1-3, audited statements and schedules prepared in accordance with the requirements of ERISA for the plan's fiscal years ended December 31, 1999 and 1998 are presented on pages 3 through 8. Exhibits: 23. Consent of PricewaterhouseCoopers, L.L.P., independent auditors 3 SENSYTECH, INC. 401(k) PROFIT-SHARING PLAN FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 4 SENSYTECH, INC. 401(k) PROFIT SHARING PLAN DECEMBER 31, 1999 AND 1998 TABLE OF CONTENTS Report of Independent Accountants 2 Exhibit A Statements of Net Assets Available for Benefits December 31, 1999 and 1998 3 Exhibit B Statements of Changes in Net Assets Available for Benefits Year Ended December 31, 1999 4 Notes to Financial Statements December 31, 1999 and 1998 5-7 Schedule of Assets Held for Investment Purposes December 31, 1999 8 5 REPORT OF INDEPENDENT ACCOUNTANTS To the Participants and Administrator of the Sensytech, Inc. 401(k) Profit-Sharing Plan In our opinion, the accompanying statement of net assets available for benefits and the related statement of changes in net assets available for benefits present fairly, in all material respects, the net assets available for benefits of Sensytech, Inc. 401(k) Profit-Sharing Plan (the "Plan") at December 31, 1999, and the changes in net assets available for benefits for the year ended December 31, 1999 in conformity with accounting principles generally accepted in the United States. 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 of these statements in accordance with auditing standards generally accepted in the United States, 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 audit provides a reasonable basis for the opinion expressed above. The financial statements of the Sensytech, Inc. 401(k) Profit-Sharing Plan as of December 31, 1998, were audited by other auditors whose report dated July 14, 1999, expressed an unqualified opinion on those financial statements. Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held for investment purposes as of December 31, 1999 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is 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. The supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ PricewaterhouseCoopers LLP - ------------------------------ PricewaterhouseCoopers LLP Pittsburgh, PA May 12, 2000 -2- 6 SENSYTECH, INC. EXHIBIT A 401(k) PROFIT-SHARING PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1999 AND 1998 - -------------------------------------------------------------------------------- 1999 1998 Assets: Cash demand deposit $ - $ 8,811 Investments, at fair value 10,592,243 9,981,133 Receivables: Participant contributions 47,607 59,001 Employer contributions 17,196 153,235 --------------- ----------------- Total receivables 64,803 212,236 Loans to participants 132,179 93,175 --------------- ----------------- Total Assets 10,789,225 10,295,355 --------------- ----------------- Liabilities: Other payables - 6,876 Promissory notes payable (Note 4) - 53,967 --------------- ----------------- Total Liabilities - 60,843 --------------- ----------------- Net assets available for benefits $ 10,789,225 $ 10,234,512 =============== ================= The accompanying notes are an integral part of these financial statements. -3- 7 SENSYTECH, INC. EXHIBIT B 401(k) PROFIT-SHARING PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS YEAR ENDED DECEMBER 31, 1999 - -------------------------------------------------------------------------------- Additions: Dividend income $ 482,741 Interest income 30,075 Net appreciation in fair value of investments 1,226,780 Participant contributions 550,946 Employer contributions 178,481 Transfer of assets from other plans 162,061 ----------------- Total additions 2,631,084 Deductions: Benefits paid to participants 2,076,371 ----------------- Total deductions 2,076,371 Net increase 554,713 Net assets available for benefits: Beginning of year 10,234,512 ----------------- End of year $ 10,789,225 ================= The accompanying notes are an integral part of these financial statements. -4- 8 SENSYTECH, INC. 401(k) PROFIT-SHARING PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 - -------------------------------------------------------------------------------- 1. DESCRIPTION OF PLAN AND BENEFITS The following description of the Sensytech, Inc. 401(k) Profit-Sharing Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution, stock bonus and profit-sharing plan covering all full-time employees of the Sensytech, Inc. (the "Company") who meet the eligibility requirements of the Plan. It is subject to the provisions of the Employee Retirement Income Security Act (ERISA). CONTRIBUTIONS Each year, participants may make contributions up to 15% of pretax annual compensation into the 401(k) plan. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers nine mutual funds as investment options for participants. The Company contributes to the Plan at a rate of 50% of the employees' contribution, up to 6% of the employees' salary. Contributions are allocated among individual accounts in the name of the eligible employees. In no event, shall contributions for any year exceed the maximum amount deductible under the provisions of the Internal Revenue Code. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contribution and allocations of (a) the Company's contribution, (b) Plan earnings, and (c) forfeiture of terminated participants' nonvested accounts. Allocations are based on participant account balances and compensation, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. VESTING Participants are vested immediately in their contributions plus actual earnings thereon. Vesting in the Company's contribution portion of their accounts is based on years of continuous service. A participant is 100 percent vested after seven years of credited service. PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum of $50,000 or 50 percent of their account balance, whichever is less. The loans are secured by the balance in the participant's account and bear interest at rates equal to the Federal Reserve Prime Rate on the date of the loan plus 1%. For the year ended December 31, 1999, new participant loans were made in the amount of $85,979 and principal payments were made in the amount of $46,975. PAYMENT OF BENEFITS On termination of service due to death, disability or retirement, a participant may elect to receive either a lump-sum amount equal to the value of the participant's vested interest in his or her account, or annual installments over a ten-year period. For termination of service for other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution. -5- 9 SENSYTECH, INC. 401(k) PROFIT-SHARING PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 - -------------------------------------------------------------------------------- FORFEITURES In 1999, 1998 forfeitures totaling $15,926 were reallocated to eligible participants account balances. As of December 31, 1999, 1999 forfeitures totaling $86,391 are to be reallocated to eligible participant account balances in 2000. These amounts were not used to off-set current year employer matches. OTHER Administrative expenses, including trustee, legal, auditing, and other fees, are paid by the Company and, as such, are not expenses of the Plan. Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. 2. SUMMARY OF ACCOUNTING POLICIES RISKS AND UNCERTAINTIES The Plan provides for various investment options in any combination of mutual funds and other investment securities. These investments are exposed to various risks, such as interest rate, market and credit risk. It is at least reasonably possible that changes in risks, in the near term would materially affect participant account balances and the amounts reported in the statement of net assets available for benefits during the reporting period. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. Shares of mutual funds and common stock are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. PAYMENT OF BENEFITS Benefits are recorded when paid. USE OF ESTIMATES The preparation of the Plan's financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the changes in net assets available for benefits during the reporting period, and, when applicable, disclosure of contingent assets and liabilities. Actual results could differ from those estimates. -6- 10 SENSYTECH, INC. 401(k) PROFIT-SHARING PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 - -------------------------------------------------------------------------------- 3. INVESTMENTS The following presents investments that represent 5 percent or more of the Plan's net assets at December 31: 1999 1998 American Funds - Europacific Growth Fund $ 669,515 $ - American Funds - Washington Mutual Investors Fund 1,082,354 1,165,230 Legg Mason - Cash Reserve Trust 771,586 - Legg Mason - Special Investment Trust 703,712 630,325 Legg Mason - Value Trust 4,028,956 4,008,294 Sensytech, Inc. - Common Stock 2,447,168 2,930,726 4. PROMISSORY NOTES PAYABLE At December 31, 1998, several participants held secured promissory notes and were receiving installment distributions during the term of the notes. The notes matured in three to four years and bore interest rates ranging from six to eight percent on the principal sum. The notes were secured by shares of the Company's stock. During 1999, the participants received a full settlement amounting to $56,660. 5. TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated April 15, 1995 that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan is currently in the process of being amended. The Plan administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. -7- 11 SENSYTECH, INC. 401(k) PROFIT-SHARING PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 - -------------------------------------------------------------------------------- ISSUER DESCRIPTION COST VALUE The American Funds Group Bond Fund of America $ 374,470 $ 358,858 The American Funds Group Europacific Growth Fund 464,827 669,515 The American Funds Group Smallcap World Fund 294,787 373,084 The American Funds Group Washington Mutual Investors 1,159,961 1,082,354 Legg Mason Wood Walker, Inc. Cash Reserve Trust 771,586 771,586 Legg Mason Wood Walker, Inc. High Yield Portfolio 157,522 157,014 Legg Mason Wood Walker, Inc. Special Investment Trust 520,241 703,712 Legg Mason Wood Walker, Inc. Value Trust 2,636,623 4,028,956 Sensytech, Inc. Common Stock 1,658,670 2,447,164 -------------- ---------------- $ 8,038,687 $ 10,592,243 ============== ================ -8- 12 The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. SENSYTECH, INC. 401(k) PROFIT SHARING PLAN June 30, 2000 /s/Cinda L. Milewski ----------------------------------------------- Cinda L. Milewski, Plan Administrator