EXHIBIT 99.1
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Anteon International Corporation
3211 Jermantown Road, Suite 700
Fairfax, Virginia 22030
March 1, 2006
Re: HOW THE GENERAL DYNAMICS
ACQUISITION WILL AFFECT YOUR ANTEON STOCK OPTIONS
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Dear Optionholder:
As you are likely aware, on December 13, 2005, Anteon International
Corporation ("Anteon" or the "Company") entered into an agreement and plan of
merger with General Dynamics Corporation ("General Dynamics"), pursuant to
which Anteon will, in a merger transaction (the "MERGER"), become a subsidiary
of General Dynamics. Our records indicate that you are the holder of
outstanding stock options ("ANTEON OPTIONS") to purchase shares of common stock
of Anteon, which were granted under the Amended and Restated Anteon
International Corporation Omnibus Stock Plan. This letter addresses how your
Anteon Options will be affected by the potential acquisition of Anteon by
General Dynamics. Please keep in mind that there are a number of conditions
which must be satisfied before the Merger can close, all of which are more
fully described in the proxy statement related to the Merger, which is
available on Anteon's website (WWW.ANTEON.COM) under Investor Relations/SEC
Filings. If the Merger does not close, you will continue to hold your
unexercised Anteon Options.
PLEASE NOTE THAT AS AN OPTIONHOLDER, YOU ARE NOT ENTITLED TO VOTE ON
THE MERGER OR THE MERGER AGREEMENT. OF COURSE, IF YOU OWN ANTEON STOCK, YOU
WILL BE ENTITLED TO VOTE ALONG WITH THE OTHER STOCKHOLDERS, AS DESCRIBED IN THE
PROXY STATEMENT.
A. EFFECT OF THE MERGER ON VESTED AND UNVESTED ANTEON OPTIONS
VESTED OPTIONS. In connection with the Merger, all VESTED ANTEON
OPTIONS outstanding immediately prior to the closing of the Merger will
automatically be cancelled and all rights with respect to those options will be
cancelled. You will receive for each of your vested Anteon Options that is
cancelled an amount, subject to applicable tax withholdings, equal to the
PRODUCT OF (A) the amount of cash to be received for a share of Anteon common
stock in the Merger ($55.50) MINUS the per share exercise price of your vested
Anteon Options and (B) the number of shares of Anteon common stock subject to
your vested Anteon Options. You do not need to do anything to receive this
"cash out" payment in cancellation of your Anteon Options. Anteon will make
this payment to you through its payroll operations within five business days
after the effective date of the Merger. This payment will be fully taxable to
you as compensation income, and payroll taxes and income taxes withholdings
will apply.
UNVESTED OPTIONS. In connection with the Merger, all UNVESTED ANTEON
OPTIONS outstanding immediately prior to the closing of the Merger will fully
vest as of the closing and all rights with respect to those options will be
cancelled. You will receive a payment in respect of those unvested options,
calculated as described above for vested Anteon Options, subject to the same
tax withholdings described in the preceding paragraph. Again, you do not need
to do anything to receive this "cash out" payment. If this process begins and
for some reason the Merger does not close, the vesting acceleration will be
reversed and your unvested option's vesting schedule will return to its
original dates.
B. EXERCISING OPTIONS THAT QUALIFY
AS INCENTIVE STOCK OPTIONS BEFORETHE MERGER
If any of your vested Anteon Options are incentive stock options
(commonly referred to as ISOs), you may be able to achieve some tax savings by
exercising those vested options prior to the closing of the Merger. These tax
savings may be possible because ISOs are not subject to Social Security and
Medicare taxes, known as FICA taxes, when exercised, or when the stock acquired
through the exercise of an ISO is subsequently sold. For your information, the
employee portion of FICA taxes is 7.65% of the first $94,200 of compensation
received during a year and 1.45% of all amounts of compensation received during
a year.
TAX MATTERS ARE COMPLEX AND THE TAX CONSEQUENCES TO YOU HOLDING OR
EXERCISING YOUR ANTEON OPTIONS WILL DEPEND ON YOUR SPECIFIC SITUATION. YOU ARE
STRONGLY ENCOURAGED TO CONTACT YOUR OWN TAX ADVISOR TO OBTAIN SPECIFIC
INFORMATION REGARDING THE TAX CONSEQUENCES TO YOU OF HOLDING OR EXERCISING YOUR
ANTEON OPTIONS.
ISO optionholders are also reminded of their reporting
responsibilities under their Stock Option Grant Agreement. You are obligated to
notify Anteon in writing of a "disqualifying disposition" of any shares of
common stock acquired through the exercise of an ISO. A "disqualifying
disposition" is the sale of shares acquired through exercise of an incentive
stock option within two years of the grant date or within one year of the
purchase date.
C. EXERCISING STOCK OPTIONS BEFORE THE MERGER
If you would like to exercise any of your vested outstanding ISOs or
nonqualified vested Anteon Options prior to the effective time of the Merger,
you may do so by following the procedure described in Section D of this letter.
However, the FICA tax savings discussed in Section B of this letter do not
apply to nonqualified stock options.
D. EXERCISING VESTED INCENTIVE STOCK
OPTIONS AND NONQUALIFIED STOCK OPTIONS
If you would like to exercise any of your outstanding vested Anteon
Options, whether they are ISOs or nonqualified stock options, prior to the
effective time of the Merger, you may do so by completing and submitting to
Fidelity a Notice of Exercise and paying the exercise price for the shares of
Anteon common stock you are purchasing no later than four days prior to the
effective date of the Merger. At this time the effective date of the Merger is
not known. Anteon will endeavor to provide optionholders sufficient advance
notice of the effective date of the Merger in order to give holders the
opportunity to exercise their Anteon Options if they choose, but Anteon cannot
assure that ample notice will be provided. At this time, we do not believe the
Merger will occur until after the Special Meeting of Stockholders scheduled for
March 3, 2006.
To exercise your options you may go on-line to
www.netbenefits.fidelity.com, or if you are subject to pre-clearance, you may
call Fidelity at 800-544-9354. A Notice of Exercise is not effective until it
and any required cash payments are received by Fidelity.
Please note that if you are prohibited from effecting transactions in
Anteon securities during the current trading blackout period under Anteon's
Securities Trading Policy (Policy Number 1507), you may exercise your Anteon
Options, but you may not sell your shares of Anteon common stock or utilize
Fidelity for "cashless" exercises. Anteon does not anticipate ending the
current blackout period prior to the closing of the Merger.
THIS LETTER IS INFORMATIONAL ONLY, DOES NOT CONSTITUTE TAX ADVICE AND
IS NOT INTENDED TO REPRESENT A DISCUSSION OF THE FULL SCOPE OF TAX RULES AND
REGULATIONS TO BE CONSIDERED BY EACH OPTIONHOLDER. TAX MATTERS ARE COMPLEX AND
EACH OPTION HOLDER SHOULD SEEK THE ADVICE OF A QUALIFIED TAX PROFESSIONAL TO
OBTAIN A FULL AND COMPLETE UNDERSTANDING OF ALL THE SPECIFIC CONSIDERATIONS
APPLICABLE TO YOUR INDIVIDUAL TAX SITUATION.
If you have any questions regarding your Anteon Options please contact
Fidelity at 800-544-9354 or Heather Sheu at (703) 246-0749. If you would like
to obtain a report regarding the status of your Anteon Options, please contact
Fidelity at 800-544-9354.
Sincerely,
/s/ Kerry S. Ross
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Kerry S. Ross
Vice President, Human Resources
Anteon International Corporation