1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
GENERAL DYNAMICS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
2
GENERAL DYNAMICS CORPORATION
PRESS RELEASE
JUNE 22,1999
3
Tuesday, June 22, 6:30 am Eastern Time
Company Press Release
SOURCE: General Dynamics
GENERAL DYNAMICS TO ACQUIRE THREE
UNITS OF GTE GOVERNMENT SYSTEMS FOR
$1.05 BILLION
FALLS CHURCH, Va., June 22 /PRNewswire/ -- General Dynamics (NYSE: GD - news)
and GTE Corporation (NYSE: GTE - news) announced today that they have entered
into a definitive agreement for General Dynamics to acquire three units of
GTE's Government Systems organization for $1.05 billion in cash.
The transaction has been approved by the boards of directors of both companies
and is subject to normal regulatory approvals. General Dynamics will assume no
GTE debt in the transaction. The acquisition will be treated for tax and
accounting purposes as an asset purchase and is expected to close within 60
days. The acquisition will be immediately accretive to General Dynamics'
earnings.
GTE Government Systems is a leader in the advancement of command, control,
communications and intelligence systems; electronic defense systems,
communication switching; and information systems for defense, government, and
industry in the United States and abroad. Included in the purchase are the
Communication Systems Division in Taunton, Massachusetts; Worldwide
Telecommunications Services in Needham Heights, Massachusetts; and Electronic
Systems Division in Mountain View, California. Together, these units have a
backlog of $900 million, approximately 6,200 employees, and expect to have 1999
revenues of approximately $1.2 billion.
When the transaction closes, these units will be part of General Dynamics
Information Systems and Technology business group. "This is a solid addition to
our defense core and a superb strategic fit," said Nicholas D. Chabraja,
General Dynamics chairman and chief executive officer. "We formed the
Information Systems and Technology group in 1998 from a series of acquisitions.
Anticipated 1999 revenues for the group had been estimated at $1 billion. With
this acquisition, we more than double the size of the group, and tremendously
expand its capabilities. The Government Systems organization gives us
world-class information assurance, land communication and networking
capabilities. It strengthens our signal processing, applications and decision
support capabilities, and creates a world wide information systems support and
services organization," Chabraja said. "We are committed to our defense
customers and see significant growth opportunities in the defense electronics
market. We believe this transaction provides strong career opportunities and a
good corporate home to the fine GTE employees who have made their organization
so successful."
GTE Chairman and CEO Charles R. Lee said, "GTE Government Systems has been a
central part of GTE's heritage, and a major contributor to our success. It is
gratifying that one of the defense industry's most prominent and highly regarded
companies, General Dynamics, recognizes the talent and creativity of this
outstanding team. At the same time, this transaction is
4
important to GTE as we focus on our core telecommunications services and
reposition ourselves for future growth."
The transaction is the most recent in GTE's previously announced initiative to
sell non-core business assets to generate more than $3 billion in after-tax
proceeds. On May 27, GTE announced reaching agreements to sell wireline
properties in Alaska to the Alaska Telephone Exchange Acquisition Corporation,
Inc. (ATEAC) and in Arizona, California and Minnesota to Citizens Utilities.
Proceeds from the sale of GTE's Government Systems unit and wireline properties
will be used to pay off debt that will be incurred with GTE's pending purchase
of Ameritech wireless properties in Illinois and Missouri, and to invest in
future high-growth strategic initiatives.
General Dynamics, headquartered in Falls Church, Virginia, supplies
sophisticated defense systems and services to the United States government and
its allies around the world. The company employs 29,800 people and had 1998
sales of approximately $5 billion.
GTE Corporation, based in Irving, Texas, is a leading telecommunications
provider with one of the industry's broadest arrays of products and services.
The company has 120,000 employees and had 1998 sales of more than $25 billion.
SOURCE: General Dynamics
-2-
5
GENERAL DYNAMICS CORPORATION
MEETING OF ANALYSTS
HOTEL PALACE
NEW YORK, NEW YORK
JUNE 22, 1998
Note: This document contains forward looking statements that are subject to
risks and uncertainties. It should be read in conjunction with the Company's
SEC filings and disclosures.
6
GENERAL DYNAMICS
- --------------------------------------------------------------------------------
ACQUISITION OF GTE GOVERNMENT SYSTEMS
Investor Presentation
New York, NY
N.D. Chabraja
G. R. England
22 June 1999
7
GTE/GS Transaction
- --------------------------------------------------------------------------------
- - Communications Systems, Worldwide Telecommunications Services & Electronic
Systems Divisions
- - Cash Transaction Subject to Normal Approvals
- - No Assumption of Debt
- - Accounted for as an Asset Purchase
- - Solidly Accretive to Earnings and Cash Flow
GENERAL DYNAMICS 22 June 1999
8
GTE/GS Financials
- --------------------------------------------------------------------------------
Est. 1999 Results
- - ~ $1.2 Billion Revenues
- - ~ $93 Million EBIT
- - ~ $112 Million EBITDA
- - ~ $60 Million Free Cash From Operations
- - ~ $900 Million Backlog
GENERAL DYNAMICS 22 June 1999
9
GTE Transaction Metrics
- --------------------------------------------------------------------------------
- - Price as % of Est. '99 Sales - ~ 90%
- - Price / Est. '99 EBIT - ~ 11.3 X
- - Price / Est. '99 EBITDA ~ 9.4 X
----------------------------------------------------------------
The Price is Right!
----------------------------------------------------------------
GENERAL DYNAMICS 22 June 1999
10
SOLID DEFENSE COMMUNICATION & INTELLIGENCE BUSINESS
- --------------------------------------------------------------------------------
Communication Worldwide Electronic
Systems Telecommunications Systems
------------- ------------------ ----------
- - Ground tactical communications - Installation, operation, & - Intelligence and information
maintenance of operations
- - Network security voice, video, & data
- Crypto architectures for SIGINT
- - Multimedia broadband (like Army - Network system design & integration
distance learning) - IT privatization for intel community
- Satellite control & operation
- Information assurance
11
GD'S INFORMATION SYSTEMS & TECHNOLOGY BUSINESS
- --------------------------------------------------------------------------------
Advanced Information Computing Devices
Technology Systems Canada
---------- ----------- -----------------
- - Surveillance & undersea - Tactical avionics - Land, sea, & air electronics
- - Networking & decision support - Information distribution management - Communications
- - Special programs - Space & surveillance - Chemical-biological
- - Secure communications - Airborne C4I & mass storage
12
GOVERNMENT SYSTEMS STRENGTHENS GD IS&T PORTFOLIO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CRITICAL ENABLERS COMBINED CAPABILITIY
- --------------------------------------------------------------------------------
Decision Support X
Mission Modeling & Simulation X
CAD / CAM Modeling X
Training & Ops Modeling X
Information Distribution & Management X
Information Assurance X
Space-based Communications X
Terrestrial Communications X
Networking X
Processing X
Applications Software X
Low-Cost IS&T Services X
IS&T Systems Engineering & Integration X
13
HIGH STRATEGIC VALUE
- --------------------------------------------------------------------------------
- - Increases customer presence and balance
- - Expands national and international presence
- - Enlarges full-service support across GD products
- - Couples information, command and control systems with platform
businesses
- - Broadens C4ISR opportunities worldwide
GENERAL DYNAMICS 22 June 1999