-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KtDnwIGIzZ/VI08vto/8UVFIASUygKXHw4X/38zMI4bkv1Ul/tLGMip9JqyBI9l9 mYhwjtYrcLw5Cup5TLWdOw== 0001053949-01-500204.txt : 20010808 0001053949-01-500204.hdr.sgml : 20010808 ACCESSION NUMBER: 0001053949-01-500204 CONFORMED SUBMISSION TYPE: POS AM PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20010807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DRS TECHNOLOGIES INC CENTRAL INDEX KEY: 0000028630 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 132632319 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: POS AM SEC ACT: 1933 Act SEC FILE NUMBER: 333-69751 FILM NUMBER: 1699870 BUSINESS ADDRESS: STREET 1: 3RD FLOOR STREET 2: 5 SYLVAN WAY CITY: PARSIPPANY STATE: NJ ZIP: 07054 BUSINESS PHONE: 9738981500 MAIL ADDRESS: STREET 1: 16 THORNTON RD CITY: OAKLAND STATE: NJ ZIP: 07436 FORMER COMPANY: FORMER CONFORMED NAME: DIAGNOSTIC RETRIEVAL SYSTEMS INC DATE OF NAME CHANGE: 19920703 POS AM 1 e900591_r3.txt POST EFFECTIVE AMENDMENT 3 ON S3 TO S4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 7, 2001 Registration No. 333-69751 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 POST-EFFECTIVE AMENDMENT NO. 2 ON FORM S-3 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------- DRS TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Delaware 13-2632319 (State or other jurisdiction (I.R.S. Employee of incorporation or organization) Identification Number) 5 Sylvan Way Parsippany, New Jersey 07054 (973) 898-1500 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) Mark S. Newman 5 Sylvan Way Parsippany, New Jersey 07054 (973) 898-1500 (Name, address, including zip code, and telephone number, including area code, of agent for service) --------------------------------- Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 (as defined below), other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] ________________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] ________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] Explanatory Note DRS Technologies, Inc. hereby amends its Registration Statement on Form S-4 (Registration No. 333-69751), as amended and effective as of January 25, 1999 (the "Registration Statement"), by filing this post-effective amendment no. 2 on Form S-3 (this "Post-Effective Amendment No. 2") relating to up to 603,175 shares of the common stock, par value $0.01 per share, of DRS (the "DRS Common Stock") issuable upon exercise of warrants issued by DRS in connection with the merger of DRS' wholly-owned subsidiary with and into NAI Technologies, Inc. ("NAI") on February 19, 1999. Such warrants were issued to replace the warrants to purchase NAI's common stock outstanding and unexercised immediately prior to the effective time of such merger. The shares of DRS Common Stock issuable upon the exercise of such warrants were registered under the Registration Statement on Form S-4 and are hereby transferred to this Form S-3. This Post-Effective Amendment No. 2 does not replace, but is in addition to, the post-effective amendment no. 1 on Form S-8 to the Form S-4 filed with the Securities and Exchange Commission on February 22, 1999. The information in this prospectus is not complete and may be changed. We may not sell these securities until this post-effective amendment to the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. PROSPECTUS Subject to completion, dated August 7, 2001 DRS TECHNOLOGIES, INC. UP TO 603,175 SHARES OF COMMON STOCK (par value $0.01 per share) This prospectus relates to up to 603,175 shares of our Common Stock issuable upon exercise of our Warrants. We issued these Warrants in connection with the merger on February 19, 1999 of our wholly-owned subsidiary with and into NAI Technologies, Inc. In connection with the merger, we (among other things) assumed warrants issued by NAI, which were outstanding and unexercised immediately prior to the effective time of the merger. We issued our Warrants to replace these assumed NAI warrants. Each Warrant entitles the registered holder of the Warrant to purchase one share of Common Stock at $10.00 per share at any time on or before 5:30 p.m., local time, February 15, 2002. Our Common Stock is quoted on the American Stock Exchange ("AMEX") and traded under the symbol "DRS". Our Warrants are quoted on the Over-the-Counter Bulletin Board ("OTCBB") and traded under the symbol "DRSTW". See "Risk Factors" beginning on page 3 for a discussion of certain material factors that you should consider in connection with an investment in our Common Stock. --------------------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. --------------------------------- The date of this prospectus is August 7, 2001 TABLE OF CONTENTS Forward-Looking Statements.......................................... 2 Risk Factors........................................................ 3 About Us............................................................ 9 Use of Proceeds..................................................... 10 Plan of Distribution................................................ 10 Description of Securities........................................... 10 Legal Matters....................................................... 13 Experts............................................................. 13 Where You Find More Information..................................... 13 You should rely only on the information contained in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date. --------------------------------- FORWARD LOOKING STATEMENTS Some of the information contained in this prospectus or documents incorporated by reference may contain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements in this prospectus or in documents incorporated by reference are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Persons reading this prospectus or documents incorporated by reference are cautioned that risks and uncertainties are inherent to forward-looking statements. Accordingly, our actual results could differ materially from those suggested by such forward-looking statements. Risks include, without limitation, the effect of our acquisition strategy on future operating results; the uncertainty of acceptance of new products and successful bidding for new products; the effect of technological changes or obsolescence relating to our products and services; the effects of government regulation or shifts in government policy, as they may relate to our products and services; competition; and other matters referred to in this prospectus and documents incorporated by reference. We undertake no obligation to publicly update or revise any forward-looking statement in this prospectus or any document incorporated by reference, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties, and assumptions, the events suggested by the forward-looking statements in this prospectus or the documents incorporated by reference might not occur. 2 RISK FACTORS You should carefully consider the following factors and other information contained in our current and future reports, including information incorporated by reference in this prospectus, before you invest in the shares of Common Stock being offered in this prospectus. Our Revenues Depend on Our Ability to Maintain Our Level of Government Business We derive a significant portion of all of our revenues from contracts or subcontracts with domestic and foreign government agencies. A reduction in the purchase of our products by these agencies (and principally by the U.S. Navy and U.S. Army) would have a material adverse effect on our business. In the fiscal years ended March 31, 2001, 2000 and 1999, approximately 78%, 80% and 81% of our revenues were derived directly or indirectly from defense-industry contracts with the U.S. government. In addition, approximately 12% in the fiscal year ended March 31, 2001, 12% in the fiscal year ended March 31, 2000 and 8% in the fiscal year ended March 31, 1999 were derived directly or indirectly from sales to foreign governments. Therefore, the development of our business in the future will depend upon the continued willingness of the U.S. government to commit substantial resources to defense programs and, in particular, upon continued purchase of our products, and other products which incorporate our products, by the U.S. government. The risk that governmental purchases of our products may decline stems from the nature of our business with the U.S. government, in which the U.S. government may: o terminate contracts at its convenience; o terminate, reduce or modify contracts or subcontracts if its requirements or budgetary constraints change; o cancel multi-year contracts and related orders if funds become unavailable; o shift its spending priorities; and o adjust contract costs and fees on the basis of audits done by its agencies. Upon the termination of a contract with the U.S. government, a defense contractor is entitled to reimbursement for allowable costs and an allowance for the proportionate share of fees or earnings for the work completed if the contract was not terminated due to the contractor's default. Foreign defense contracts generally also contain comparable provisions relating to termination at the convenience of the foreign government. 3 In addition, as a defense business, we are subject to the following risks in connection with government contracts: o the frequent need to bid on programs prior to completing the necessary design, which may result in unforeseen technological difficulties and/or cost overruns; o the difficulty in forecasting long-term costs and schedules and the potential obsolescence of products related to long-term fixed price contracts; and o when we act as a subcontractor, the failure or inability of the primary contractor to perform its prime contract, which may result in our inability to obtain payment of our fees and contract costs. We Face Acquisition and Integration Risks Since March 31, 1993, we have consummated 18 acquisitions and may continue to acquire businesses that present a strategic fit with our operations. Our growth may place significant demands on our management and our operational, financial and marketing resources. In connection with acquisitions and opening of new locations, we have expanded and may continue to expand the number of our employees, the scope of our operating and financial systems and the geographic area of our operations. We believe this growth will increase the complexity of our operations and the level of responsibility exercised by both existing and new management personnel. We cannot assure you that our current operating and financial systems and controls will continue to be adequate as we grow or that any steps taken to improve such systems and controls will be sufficient. Acquisitions involve numerous risks, including: o difficulties in assimilating and integrating the operations, technologies, and products acquired; o the diversion of management's attention from other business concerns; o the risks of entering markets in which we have limited or no prior experience; and o the potential loss of key employees. Our failure to successfully integrate acquired businesses and manage our growth may have a material adverse effect on our business, financial condition, results of operations or prospects. Further, there can be no assurance that our management will be able to maintain or enhance the profitability of any acquired business or consolidate its operations to achieve cost savings. In addition, there may be liabilities that we fail or are unable to discover in the course of performing due diligence investigations on each company or business we acquired or seek to acquire in the future. Such liabilities could include those arising from employee benefits contribution obligations of a prior owner or non-compliance with 4 applicable federal, state or local environmental requirements by prior owners for which we, as a successor owner, may be responsible. In addition, there may be additional costs relating to acquisitions including, but not limited to, possible purchase price adjustments. We try to minimize these risks by conducting such due diligence, including employee benefit and environmental reviews, as we deem appropriate under the circumstances. However, we cannot assure you that we have identified, or in the case of future acquisitions, will identify, all existing or potential risks. We also generally require each seller of acquired businesses or properties to indemnify us against undisclosed liabilities. In some cases this indemnification obligation may be supported by deferring payment of a portion of the purchase price or other appropriate security. However, we cannot assure you that the indemnification, even if obtained, will be enforceable, collectible or sufficient in amount, scope or duration to fully offset the possible liabilities associated with the business or property acquired. Any such liabilities, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations or prospects. We May Not Be Successful in Implementing Our Growth Strategy if We Are Unable to Identify Suitable Acquisition Targets or Complete Those Acquisitions We Identify as Desirable Finding, consummating and successfully integrating acquisitions is an important component of our growth strategy. Our continued ability to grow by acquisition is dependent upon the availability of acquisition candidates at reasonable prices, limitations in our then existing loan agreements and our ability to obtain additional acquisition financing on acceptable terms. We experience competition in making acquisitions from larger companies with significantly greater resources. Implementation of our acquisition strategy may depend upon our ability to attract and retain qualified management personnel to oversee our expanded operations resulting from future acquisitions. We may need to use significant amounts of cash, issue additional equity securities, incur debt and amortize expenses related to intangibles in connection with future acquisitions, each of which could have a material adverse effect on our business, financial condition and results of operations. Failure to Anticipate Technical Problems, Estimate Costs Accurately or Control Costs During Performance of a Fixed-Price Contract May Reduce Our Profit or Cause a Loss We provide our services primarily through three types of contracts: firm fixed-price, cost-plus-incentive-fee and cost-plus-fixed-fee contracts. Approximately 94% of our total revenues for the fiscal year ended March 31, 2001, were derived from firm fixed-price contracts which require us to perform services under a contract at a stipulated price. We derived the balance of our revenues during that period from cost-plus-incentive-fee contracts, by which we are reimbursed for incurred costs and receive a fee that is dependent on cost savings and/or performance, and cost-plus-fixed-fee contracts, by which we are reimbursed our costs and receive a fixed fee which is negotiated but limited by statutes. 5 We assume greater financial risk on firm fixed-price contracts than on cost-based contracts. We believe that an increasing percentage of our contracts will be fixed-priced. Failure to anticipate technical problems, estimate costs accurately or control costs during performance of a fixed-price contract may reduce our profit or cause a loss. Although management believes that adequate provision for our performance is reflected in our financial statements, we can give no assurance that this provision is adequate or that losses on fixed-price and cost-based contracts will not occur in the future. We May Experience Production Delays if Suppliers Fail to Deliver Materials to Us Our manufacturing process for certain of our products consists primarily of the assembly of purchased components and testing of the product at various stages in the assembly process. Although we can obtain materials and purchase components generally from a number of different suppliers, several suppliers are our sole source of certain components. If a supplier should cease to deliver such components, we would probably find other sources; however, this could result in added cost and manufacturing delays. We have not experienced significant production delays attributable to supply shortages, but we occasionally experience procurement problems with respect to certain components, such as semiconductors and connectors. In addition, with respect to our electro-optical products, certain materials, such as germanium, zinc sulfide and cobalt, may not always be readily available. Our Revenues Will Be Adversely Affected if We Fail to Receive Renewal or Follow-On Contracts Renewal and follow-on contracts are important because our contracts are for fixed terms. These terms vary from shorter than one year to over five years, particularly for contracts with options. The average term of our contracts with the U.S. government is between one and three years. Our possible failure to obtain a renewal or follow-on contract with respect to any significant contract or a number of lesser contracts would result in a loss of revenues. If revenues from the award of new contracts fail to offset the loss of contracts, it could have a material adverse effect on our results of operations and financial position. The loss of revenues from our possible failure to obtain renewal or follow-on contracts may be significant because our U.S. government contracts account for a substantial portion of our revenues. For example, in the fiscal years ended 2001, 2000 and 1999, the AN/UYQ-70 advanced display system program accounted for approximately 22%, 21% and 28%, respectively, of our total revenues. In addition, we sometimes enter into U.S. government contracts with a fully funded backlog, which means that the U.S. government has appropriated funds sufficient to cover all of the sales orders represented by such contracts at the time of award. The price per unit of our product, however, may not be determined at the time of award. We will be adversely 6 affected if the price per unit is ultimately determined to be significantly less than we anticipated. Our Operating Results May Fluctuate and Our Backlog Is Subject to Reduction and Cancellation. Our results of operations have fluctuated in the past and may continue to fluctuate in the future as a result of a number of factors, many of which are beyond our control. These factors include: o the termination of a key government contract as the result of a reduction or cancellation of funding; o the size and timing of new contract awards to replace completed or expired contracts; o our ability to design and produce new products meeting the specifications of our customers; o increased competition from existing competitors and new entrants to the market; and o changes in Department of Defense policies and budgetary priorities. We record our defense backlog as funded backlog. Funded backlog represents products the government has committed by contract to purchase from us. Our funded backlog as of March 31, 2001 was approximately $456.5 million. Our funded backlog is subject to fluctuations and is not necessarily indicative of future sales. Moreover, cancellations of purchase orders or reductions of product quantities in existing contracts could substantially and materially reduce our funded backlog and, consequently, future revenues. Our failure to replace canceled or reduced backlog could result in lower revenues. We Face a Competitive Industry and Depend on Strategic Alliances The military electronics industry in which we participate is highly competitive and characterized by rapid technological change. Our potential inability to improve existing product lines and develop new products and technologies could adversely affect our business. In addition, our competitors could introduce new products with greater capabilities which could adversely affect our business. There are many competitors in the markets in which we sell our products. Many of these competitors are substantially larger than we are, devote substantially greater resources to research and development and generally have greater resources. Consequently, these competitors may be better positioned to take advantage of economies of scale and develop new technologies. Some of these competitors are also our suppliers or customers. 7 In the military sector, we compete with many large and mid-tier defense contractors on the basis of product performance, cost, overall value, delivery and reputation. As defense spending in the U.S. has decreased in recent years, the industry has experienced substantial consolidation, increasing the market share of certain companies. Accordingly, it is important for us to maintain our good relationships with such companies. Our International Operations Expose Us to Risks of Losses Approximately 12%, 12% and 8% of our revenues in the years ended March 31, 2001, 2000 and 1999, respectively, were derived from sales to foreign governments. We are also exploring the possibility of expansion into additional international markets. We cannot assure you that we will maintain significant operations internationally or that any such operations will be successful. Any international operations we do establish will be subject to risks similar to those affecting our North American operations in addition to a number of other risks, including lack of local business experience, foreign currency fluctuations, difficulty in enforcing intellectual property rights, language and other cultural barriers and political and economic instability. We Are Subject to Government Regulation Which Could Limit Our Ability to Sell Some of Our Products Outside the United States The sale of certain of our products outside the United States is subject to compliance with the United States Export Administration Regulations. The absence of comparable restrictions on competitors in other countries may adversely affect our competitive position. In addition, in order to sell our products in European Union countries, we must satisfy certain technical requirements. If we were unable to comply with those requirements with respect to a significant quantity of our products, our sales in Europe could be restricted, which could have a material adverse effect on our business, financial condition and results of operations. Government Rights Limit Our Intellectual Property Rights We seek to protect the competitive benefits we derive from our patents, proprietary information and other intellectual property. However, we do not have the right to prohibit the U.S. government from using certain technologies developed by us or to prohibit third party companies, including our competitors, from using those technologies in providing products and services to the U.S. government. The government has the right to royalty-free use of technologies that we have developed under government contracts. We are free to commercially exploit those government-funded technologies and may assert our intellectual property rights to seek to block other non-government users thereof, but we cannot assure you we could successfully do so. We Are Subject to Legal Proceedings from Time to Time. We Cannot Assure You that an Adverse Outcome from Any Such Legal Proceeding Will Not Have a Material Adverse Effect on Us 8 We are a party to various legal actions and claims arising in the ordinary course of our business. While we believe we have adequate legal defenses for each of the actions and claims, we cannot assure you that their ultimate disposition will not have a material adverse effect on our operating results and financial position. We Are Subject to Environmental Laws and Regulations and Our Ongoing Operations May Expose Us to Environmental Liabilities Our operations are subject to federal, state, foreign and local environmental laws and regulations. As a result, we are involved from time to time in administrative or legal proceedings relating to environmental matters. We cannot assure you that the aggregate amount of future clean up costs and other environmental liabilities will not be material. We cannot predict what environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted or what environmental conditions may be found to exist. Enactment of more stringent laws or regulations or more strict interpretation of existing laws and regulations may require us to make additional expenditures, some of which could be material. A Failure to Attract and Retain Technical Personnel Could Reduce Our Revenues and our Operational Effectiveness There is a continuing demand for qualified technical personnel, and we believe that our future growth and success will depend upon our ability to attract, train and retain such personnel. An inability to attract or maintain a sufficient number of trained personnel could have a material adverse effect on our contract performance or on our ability to capitalize on market opportunities. ABOUT US We are a leading supplier of defense electronics products and systems. Incorporated in 1968, DRS has served the defense industry for over thirty years. We provide advanced technology products and services to government and commercial customers worldwide. We develop and manufacture a broad range of mission critical products--from rugged computers and peripherals to systems and components in the areas of communications, combat systems, data storage, digital imaging, electro-optics, flight safety and space. Our defense electronics systems and subsystems are sold to all branches of the U.S. military, selected U.S. government intelligence agencies, major aerospace/defense contractors and international military forces. We have grown substantially in recent years, as a result of internal business development and strategic acquisitions. Acquisitions have significantly expanded our business base and have increased and further diversified our backlog. We have increased our annual revenues and operating income at a compound annual growth rate of approximately 33.3% and 34.4% respectively over the last five years. For the year ended March 31, 2001, we had sales of $427.6 million and operating income of $37.5 million. We are divided into three groups: the Electronic Systems Group, the Electro-Optical Systems 9 Group and the Flight Safety and Communications Group. Funded backlog also has increased substantially. At March 31, 2001, our funded backlog was approximately $456.5 million, an increase of 17.6% from March 31, 2000. As of March 31, 2001, approximately 41% and 30% of our backlog related to products and services for the U.S. Army and U.S. Navy, as compared with 45% and 28% at March 31, 2000, respectively. To achieve this level of growth and business development, we have executed a consistent long-term business strategy. Our goal is to enhance our position as a leading supplier of defense electronics products and systems by maintaining our reputation for technical excellence, focusing on the development of profitable long-term contracts and acquiring businesses that complement or extend existing product lines. Our principal executive offices are located at 5 Sylvan Way, Parsippany, NJ 07054 and our telephone number is (973) 898-1500. For further information about our business and operations, reference is made to our reports incorporated by reference. See "Where You Can Find More Information" below. USE OF PROCEEDS Although we cannot predict whether some, all, or none of the Warrants will be exercised, if all of the Warrants are exercised, the gross proceeds to us would be approximately $6 million. We intend to use the net proceeds from the exercise of the Warrants for general corporate purposes. PLAN OF DISTRIBUTION Upon the exercise of any Warrant by its holder in accordance with its terms on or before 5:30 p.m., local time, February 15, 2002, we will issue and deliver the applicable number of shares of Common Stock directly to that holder. DESCRIPTION OF SECURITIES Our authorized capital stock consists of 20,000,000 shares of Common Stock, par value $0.01 per share, and 2,000,000 share of undesignated preferred stock, $10.00 par value per share. As of May 31, 2001, 12,112,995 shares of Common Stock were issued and outstanding and approximately 2,613,580 shares of Common Stock were reserved for issuance under our 1996 Omnibus Plan and other agreements. As of May 31, 2001, there were no shares of our preferred stock designated or issued. All of our outstanding shares of Common Stock are fully paid and non-assessable. In connection with the merger, we issued 2,858,266 shares of Common Stock to holders of NAI common stock. 10 Common Stock We have not paid any cash dividends since 1976. We intend to retain future earnings for use in our business and do not expect to declare cash dividends on Common Stock in the foreseeable future. Our bank borrowings restrict our ability to pay dividends or make other distributions on the Common Stock. Any future declaration of dividends will be subject to the discretion of our Board of Directors. The timing, amount and form of any future dividends will depend, among other things, on our results of operations, financial condition, cash requirements, plans of expansion and other factors deemed relevant by our Board of Directors. The holders of our Common Stock have one vote per share with respect to matters submitted to a vote of our stockholders. Under our bylaws, any action that may be taken at a meeting of our stockholders may be taken without a meeting, without prior notice and without a vote, if a written consent setting forth the action to be taken is signed by the holders of not less than the minimum number of votes that could be necessary to take such action at a meeting of the stockholders at which all shares entitled to vote thereon were present and voted. Our bylaws also provide that prompt notice of the taking of corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. The Common Stock is listed on the AMEX. Warrants Discussion of the Warrants in this prospectus is qualified entirely by reference to the form of the Warrant filed with the SEC. Following completion of the merger, we offered to exchange for the assumed NAI warrants appropriate warrants representing rights with respect to the Common Stock. Each Warrant entitles the holder to purchase specified numbers of shares of Common Stock at an exercise price equal to $10.00 per share, subject to adjustment, on or before 5:30 p.m., local time, February 15, 2002. As of the effective time of the merger, there were Warrants outstanding and unexercised which would result in the issuance of approximately 603,175 shares of Common Stock upon exercise. Each Warrant is subject to adjustment upon the occurrence of any of the following events: o our recapitalization or reclassification of the securities to be received upon conversion or any merger or consolidation of us into or with a corporation or other business entity, or the sale or transfer of all or substantially all of our assets or any successor corporation's assets to any other corporation or business entity; o the subdivision or combination of shares of Common Stock; o the payment of dividends or other distributions in the form of Common Stock; and 11 o the issuance of shares of Common Stock at less than the closing price. No adjustment to the Warrants is required to be made until cumulative adjustments otherwise required to be made amount to 1% or more of the exercise price. The Warrants will be exercisable, at any time and from time to time, on or before 5:30 p.m., local time, February 15, 2002 by surrendering the Warrant to us, accompanied with the appropriate form of consideration in payment for the number of shares of Common Stock as set forth in the subscription form. The right to purchase shares of Common Stock will be forfeited after such date and time. Each Warrant may be exercised in whole or in part so long as any exercise in part would not involve the issuance of fractional shares of Common Stock. We will reserve such shares of Common Stock as shall be required for issuance upon conversion of the Warrants. Holders of the Warrants are not entitled to any rights as our stockholders. The Warrants are listed on the OTCBB. Transfer Agent and Registrar Mellon Investor Services LLC, 85 Challenger Road, Ridgefield Park, New Jersey 07660, is the transfer agent and the registrar of the Common Stock and is the warrant agent and registrar of the Warrants. 12 LEGAL MATTERS The validity of the shares of Common Stock to be issued upon exercise of the Warrants will be passed upon for us by Nina Laserson Dunn, Esq., our General Counsel. As of the date of this prospectus, Ms. Dunn beneficially owned shares of the Common Stock and options to purchase additional shares of the Common Stock, which in the aggregate constitute less than 0.6% of the Common Stock outstanding. EXPERTS The consolidated financial statements and consolidated financial statement schedule of DRS Technologies, Inc. and subsidiaries as of March 31, 2001 and 2000, and for each of the years in the three-year period ended March 31, 2001, have been incorporated by reference herein and in the Registration Statement in reliance upon the report, incorporated herein by reference, of KPMG LLP, independent certified public accountants, and upon the authority of said firm as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our filings with the SEC are available to the public over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings are also available at the offices of the American Stock Exchange, 86 Trinity Place, New York, New York 10006, on which our Common Stock and Warrants are listed. We are "incorporating by reference" in the prospectus the information we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. We are incorporating by reference our Annual Report on Form 10-K for the fiscal year ended March 31, 2001 and any future filings we make with the SEC under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 prior to the termination of this offering. 13 You may request a copy of these filings at no cost, by writing or telephoning us at the following address: DRS Technologies, Inc. Corporate Headquarters 5 Sylvan Way Parsippany, NJ 07054 Tel. No.: (973) 898-1500 Attn: Patricia M. Williamson We have filed with the SEC a registration statement (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), on Form S-4 (Registration No. 333-69751) with respect to the securities offered hereby. This prospectus does not contain all of the information set forth in the Registration Statement and the exhibits to the Registration Statement. Statements made in this prospectus as to the contents of any agreement or other document are not necessarily complete. With respect to each such agreement or document filed as an exhibit to the Registration Statement, reference is made to the exhibit for a more complete description. The Registration Statement and any amendments to the Registration Statement, including exhibits filed or incorporated by reference as a part of the Registration Statement, are available for inspection and copying as described above. You should rely only on the information or representations provided or incorporated by reference in this prospectus. We have authorized no one to provide information other than that provided or incorporated by reference in this prospectus. We are not making any offer of these securities in any state where the offer is not permitted. The information contained in this prospectus is current as of August 7, 2001. 14 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution Legal fees and expenses.................................... $20,000* Accounting fees and expenses............................... 5,000* Cost of printing and preparing Registration Statement, Prospectus and other documents....................... 10,000* ------- Total............................................. $35,000* - ------- * Estimated Item 15. Indemnification of Directors and Officers. Set forth below is a description of certain provisions of the Company's Amended and Restated Certificate of Incorporation, as amended (the "Restated Certificate of Incorporation"), the Amended and Restated By-laws, as amended (the "Bylaws"), of the Company and the General Corporation Law of the State of Delaware, as such provisions relate to the indemnification of the directors and officers of the Company. This description is intended only as a summary and is qualified in its entirety by reference to the Restated Certificate of Incorporation, the Bylaws and the General Corporation Law of the State of Delaware. The Restated Certificate of Incorporation provides that the Company shall, to the full extent permitted by Sections 102 and 145 of the General Corporation Law of the State of Delaware, as amended from time to time, indemnify all persons whom it may indemnify pursuant thereto and eliminates the personal liability of its directors to the full extent permitted by Section 102(b)(7) of the General Corporation Law of the State of Delaware, as amended from time to time. Section 145 of the General Corporation Law of the State of Delaware permits a corporation to indemnify its directors and officers against expenses (including attorneys' fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by them in connection with any action, suit or proceeding brought by third parties, if such directors or officers acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. In a derivative action, i.e., one by or in the right of the corporation, indemnification may be made only for expenses actually and reasonably incurred by directors and officers in connection with the defense or settlement of an action or suit, and only with respect to a matter as to which they shall have acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made if such person shall have been adjudged liable for negligence or misconduct in the performance of his respective duties to the corporation, I although the court in which the action or suit was brought may determine upon application that the defendant officers or directors are reasonably entitled to indemnity for such expenses despite such adjudication of liability. Section 102(b)(7) of the General Corporation Law of the State of Delaware provides that a corporation may eliminate or limit the personal liability of a director to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, provided that such provision shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. No such provision shall eliminate or limit the liability of a director for any act or omission occurring prior to the date when such provision becomes effective. Item 16. Exhibits. Exhibit No. Description 4.1 Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant (previously filed as Exhibit 4.1 to this Registration Statement on Form S-4). 4.2 Amended and Restated Certificate of Incorporation of the Registrant, as filed April 1, 1996 (incorporated by reference to Exhibit 3.4 to the Registrant's Registration Statement No. 33-64641, Post-Effective Amendment No. 1). 4.3 Amendment to the By-Laws of the Registrant, as adopted by resolution of the Registrant's stockholders on August 9, 2000. 4.4 Amended and Restated By-Laws of the Registrant, as of April 1, 1996 (incorporated by reference to Exhibit 3.8 to the Registrant's Registration Statement No. 33-64641, Post-Effective Amendment No. 1). 4.5 Form of Assumption of the Registrant, together with form of Warrant to purchase Common Stock of NAI (previously filed as Exhibit 4.4 to this Registration Statement on Form S-4). 4.6 Form of Warrant to purchase Common Stock of the Registrant (previously filed as Exhibit 4.5 to this Registration Statement on Form S-4). 4.7 Warrant Agreement, dated as of August 26, 1996, between NAI and American Stock Transfer & Trust Company (previously filed as Exhibit 4(ii) to NAI's Quarterly Report on Form 10-Q for the quarterly period ended September 28, 1996). II 4.8 Amendment to the Warrant Agreement, dated as of February 18, 1999, among NAI, Continental Stock Transfer & Trust Company and American Stock Transfer & Trust Company. 4.9 Amended and Restated Warrant Agreement, dated as of June 8, 2001, between the Registrant and Mellon Investor Services LLC. 5.1 Opinion of Nina Laserson Dunn, Esq. as to the legality of the securities being registered by this Registration Statement (previously filed as Exhibit 5.1 to this Registration Statement on Form S-4). 8.1 Opinion regarding tax matters (previously filed as Exhibit 8.2 to this Registration Statement on Form S-4). 23.1 Consent of KPMG LLP. 23.2 Consent of Nina Laserson Dunn, Esq. (included in the opinion filed as Exhibit 5.1 hereto). 24.1 Powers of Attorney of the directors and certain officers of the Registrant (included on the signature page hereto). Item 17. Undertakings. (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represents a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering III price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. provided, however, that the undertakings set forth in clauses (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those clauses is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this registration statement. (3) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and (4) To remove from the registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. IV SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this Post-Effective Amendment No. 2 on Form S-3 to the Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in Parsippany, in the state of New Jersey, on August 7, 2001. DRS TECHNOLOGIES, INC. By: /s/ Mark S. Newman ---------------------------------------------- Name: Mark S. Newman Title: Chairman of the Board, President, Chief Executive Officer and Director Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. Each person, in so signing also makes, constitutes and appoints Mark S. Newman and Nina Laserson Dunn, and each of them acting alone, his true and lawful attorney-in-fact, with full power of substitution, to execute and cause to be filed with the Securities and Exchange Commission pursuant to the requirements of the Securities Act of 1933, as amended, any and all amendments and post-effective amendments to this Registration Statement, with exhibits thereto and other documents in connection therewith, and hereby ratifies and confirms all that said attorney in fact or his substitute or substitutes may do or cause to be done by virtue hereof. NAME CAPACITY DATE - -------------------------- ----------------------------------- -------------- /s/ Mark S. Newman - ------------------------ Mark S. Newman Chairman of the Board, President, August 7, 2001 Chief Executive Officer and Director /s/ Richard A. Schneider - ------------------------ Richard A. Schneider Executive Vice President, Chief August 7, 2001 Financial Officer and Treasurer V NAME CAPACITY DATE - -------------------------- ----------------------------------- -------------- /s/ Ira Albom - ----------------------- Ira Albom Director August 7, 2001 /s/ Donald C. Fraser - ----------------------- Donald C. Fraser Director August 7, 2001 /s/ William F. Heitmann - ----------------------- William F. Heitmann Director August 7, 2001 /s/ Steven S. Honigman - ----------------------- Steven S. Honigman Director August 7, 2001 /s/ C. Shelton James - ----------------------- C. Shelton James Director August 7, 2001 /s/ Mark N. Kaplan - ----------------------- Mark N. Kaplan Director August 7, 2001 /s/ Stuart F. Platt - ----------------------- Stuart F. Platt Director August 7, 2001 /s/ Dennis J. Reimer - ---------------------- Dennis J. Reimer Director August 7, 2001 /s/ Eric J. Rosen - ---------------------- Eric J. Rosen Director August 7, 2001 VI EXHIBIT INDEX Exhibit Page Number Description Number - ------ ----------- ------ 4.1 Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Registrant (previously filed as Exhibit 4.1 to this Registration Statement on Form S-4). 4.2 Amended and Restated Certificate of Incorporation of the Registrant, as filed April 1, 1996 (incorporated by reference to Exhibit 3.4 to the Registrant's Registration Statement No. 33-64641, Post-Effective Amendment No. 1). 4.3 Amendment to the By-Laws of the Registrant, as adopted by resolution of the Registrant's stockholders on August 9, 2000. 4.4. Amended and Restated By-Laws of the Registrant, as of April 1, 1996 (incorporated by reference to Exhibit 3.8 to the Registrant's Registration Statement No. 33-64641, Post-Effective Amendment No. 1). 4.5 Form of Assumption of the Registrant, together with form of Warrant to purchase Common Stock of NAI (previously filed as Exhibit 4.4 to this Registration Statement on Form S-4). 4.6 Form of Warrant to purchase Common Stock of the Registrant (previously filed as Exhibit 4.5 to this Registration Statement on Form S-4). 4.7 Warrant Agreement, dated as of August 26, 1996, between NAI and American Stock Transfer & Trust Company (previously filed as Exhibit 4(ii) to NAI's Quarterly Report on Form 10-Q for the quarterly period ended September 28, 1996). 4.8 Amendment to the Warrant Agreement, dated as of February 18, 1999, among NAI, Continental Stock Transfer & Trust Company and American Stock Transfer & Trust Company. 4.9 Amended and Restated Warrant Agreement, dated as of June 8, 2001, between the Registrant and Mellon Investor Services LLC. 5.1 Opinion of Nina Laserson Dunn, Esq. as to the legality of the securities being registered by this Registration Statement (previously filed as Exhibit 5.1 to this Registration Statement on Form S-4). 8.1 Opinion regarding tax matters (previously filed as Exhibit 8.2 to this Registration Statement on Form S-4). 23.1 Consent of KPMG LLP. 23.2 Consent of Nina Laserson Dunn, Esq. (included in the opinion filed as Exhibit 5.1 hereto). 24.1 Powers of Attorney of the directors and certain officers of the Registrant (included on the signature page hereto). EX-4.3 3 ex-4_3.txt AMENDMENT OF BY-LAWS Exhibit 4.3 RESOLUTION ADOPTED BY STOCKHOLDERS ON AUGUST 9, 2000 AMENDING THE BY-LAWS OF DRS TECHNOLOGIES, INC. (the "Company") RESOLVED, that Article III, Section 2 of the By-Laws of the Company be amended so that, as amended, it shall read as follows: "The number of directors which shall constitute the whole Board shall be such number, not less than seven nor more than eleven, as shall be determined from time to time by a resolution adopted by the directors then in office or by the remaining director if there be only one. Directors need not be stockholders of the Corporation, citizens of the United States, or residents of the State of Delaware." EX-4.8 4 ex-4_8.txt AMENDMENT TO WARRANT AGREEMENT NAI TECHNOLOGIES, INC. AMENDMENT TO WARRANT AGREEMENT This Amendment to the Warrant Agreement dated as of February 18, 1999 (the "Amendment"), is entered into between NAI Technologies, Inc., a New York corporation (the "Company"), Continental Stock Transfer & Trust Company of New York, New York ("Continental") and American Stock Transfer & Trust Company of New York, New York ("American Stock"). Reference is made to that certain Warrant Agreement, dated as of August 26, 1996, (the "Warrant Agreement") by and between the Company and American Stock. WITNESSETH: WHEREAS, pursuant to the merger (the "Merger") of DRS Merger Sub, Inc., a New York corporation and wholly-owned subsidiary of DRS Technologies, Inc. ("DRS"), with and into NAI, DRS will assume the obligations of the Company's outstanding and unexercised warrants to purchase shares of common stock at the purchase price of $2.50 per share (the "Warrants") under the terms and conditions of the Agreement and Plan of Merger dated August 26, 1998 (the "Merger Agreement"); and WHEREAS, the Company desires to discharge American Stock of its duties under the Warrant Agreement and appoint Continental as the successor Warrant Agent pursuant to Section 12 of the Warrant Agreement; NOW THEREFORE, in consideration of the premises and the mutual agreement herein set forth, the parties hereby agree as follows: 1. The Company hereby appoints Continental as the successor Warrant Agent under the terms and conditions of the Warrant Agreement and Continental hereby accepts such appointment. 2. Each reference to American Stock as Warrant Agent within the Warrant Agreement as amended is hereby replaced with a reference to Continental. 3. Continental is hereby vested with the same powers, rights, duties, and responsibilities as if it had been originally named as Warrant Agent, and Continental assumes and accepts such powers, rights, duties and responsibilities. 4. Upon consummation of the Merger, the terms of the Warrants shall be amended in accordance with the Merger Agreement so that each Warrant will represent the right to receive 0.25 of a share of DRS common stock for each share that the holder would have received under the original Warrant, at an exercise price of $10.00 per share of DRS common stock. 5. Section 12 of the Warrant Agreement is hereby amended to direct that notice to the Warrant Agent in the manner provided in the Warrant Agreement shall hereinafter be given as follows: Continental Stock Transfer & Trust Company 2 Broadway, 19th Floor New York, NY 10004 Attention: Compliance Department IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above. NAI Technologies, Inc. By: /s/ Richard A. Schneider ---------------------------- Richard A. Schneider Executive VP, CFO, Secretary & Treasurer Continental Stock Transfer & Trust Company By: /s/ Roger Bernhammer ---------------------------- Roger Bernhammer Vice President American Stock Transfer & Trust Company By: /s/ Herbert J. Lemmer ---------------------------- Herbert J. Lemmer Vice President AGREED & ACCEPTED DRS Technologies, Inc. By: /s/ Nina Laserson Dunn ---------------------------- Nina Laserson Dunn, Esq. Executive Vice President, General Counsel & Secretary 2 EX-4.9 5 ex-4_9.txt WARRANT TO PURCHASE COMMON STOCK EXHIBIT 4.9 AMENDED AND RESTATED WARRANT AGREEMENT THIS AMENDED AND RESTATED WARRANT AGREEMENT, dated as of June 8, 2001 (this "Agreement") is entered into between DRS TECHNOLOGIES, INC., a Delaware corporation (the "Company"), and MELLON INVESTOR SERVICES LLC, a New Jersey limited liability company ("Warrant Agent"). W I T N E S S E T H: WHEREAS, NAI Technologies, Inc. ("NAI") entered into a Warrant Agreement dated as of August 26, 1996 (the "Original Warrant Agreement") with American Stock Transfer & Trust Company (the "Original Warrant Agent") contemporaneously with the effectiveness of a registration statement filed by NAI covering, among, other matters, the public offer and sale of warrants (the "NAI Warrants") to purchase up to approximately 4,119,700 shares of common stock, par value $.10 per share, of NAI (the "NAI Common Stock") which were being sold from time to time by the holders thereof, each NAI Warrant representing the right to purchase from NAI one (1) share of NAI Common Stock at the purchase price of $2.50 per share, subject to adjustment, until the expiration of the NAI Warrant on February 15, 2002; and WHEREAS, pursuant to the merger (the "Merger") of DRS Merger Sub, Inc., a wholly-owned subsidiary of the Company, with and into NAI, with NAI being the surviving corporation and wholly-owned subsidiary of the Company, (i) each issued and outstanding NAI Warrant was converted to a warrant (collectively, the "Warrants") to purchase shares of the common stock, par value $.01 per share, of the Company (the "Common Stock") at a conversion ratio of 0.25 share of Common Stock to one share of NAI Common Stock at a purchase price of $10.00 per share, subject to adjustment (the "Purchase Price"), and (ii) the Company assumed the obligations of NAI under the Warrant Agreement; and WHEREAS, in connection with the Merger, NAI, the Original Warrant Agent and Continental Stock Transfer & Trust Company ("Continental") entered into an Amendment to the Original Warrant Agreement dated as of February 18, 1999 (as the Original Warrant Agreement was so amended, the "Warrant Agreement") pursuant to which the Original Warrant Agent was discharged of its duties under the Original Warrant Agreement and Continental was appointed a successor warrant agent pursuant to Section 12 of the Original Warrant Agreement; and WHEREAS, the Company has discharged Continental as successor warrant agent pursuant to Section 12 of the Warrant Agreement; and WHEREAS, the Company desires to appoint Warrant Agent, and Warrant Agent desires to be appointed, as successor warrant agent pursuant to Section 12 of the Warrant Agreement; and WHEREAS, the Company desires to amend and restate the Warrant Agreement and to appoint Warrant Agent to act on behalf of the Company, and Warrant Agent is willing so to act, in connection with the issuance, transfer, exchange, and replacement of the certificates evidencing the Warrants (the "Warrant Certificates") and the exercise of the Warrants, and to act as depository for the Warrants. NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: Section 1. Appointment of Warrant Agent. The Company hereby appoints Mellon Investor Services LLC to act as agent for the Company in accordance with the terms and conditions contained (i) hereinafter in this Agreement and (ii) in the Warrant Certificate substantially in the form of the draft attached hereto as Exhibit A and made a part hereof, and Mellon Investor Services LLC hereby accepts such appointment. Warrant Agent is hereby vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent and Warrant Agent accepts and assumes such powers, rights, duties and responsibilities. The Company may from time to time appoint such Co-Warrant Agents as it may deem necessary or desirable. Section 2. Form of Warrant Certificate The Warrant Certificates (and the terms and conditions of the Warrant to be printed on the reverse thereof) shall be substantially in the form of the draft attached hereto as Exhibit A and may have such letters, numbers, or other marks of identification or designation and such legends, summaries, or endorsements printed, lithographed, or engraved thereon as the Company may deem appropriate (which does not materially change or affect the rights, duties and obligations of the Warrant Agent) and as are not inconsistent with the provisions of this Warrant Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange. The Warrant Certificate sets forth the rights of the holders of the Warrant Certificate. Section 3. Countersignature and Registration The Warrant Certificates shall be executed on behalf of the Company by its Chairman of the Board, its President, or any Vice President, by facsimile signature, and have affixed thereto a facsimile of the Company's seal which shall be attested by the Secretary or an Assistant Secretary of the Company by facsimile signature. The Warrant Certificates shall be manually counter-signed by Warrant Agent and shall not be valid for any purpose unless so counter-signed. In case any officer of the Company who has signed any of the Warrant Certificates ceases to be such officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Warrant Certificates, nevertheless, may be counter-signed by Warrant Agent, issued, and delivered with the same force and effect as though the person who signed such Warrant Certificates had not ceased to be such officer of the Company. Warrant Agent shall keep, or cause to be kept, at its designated office, books for registration and transfer of the Warrant Certificates issued hereunder. Such books shall show the names and address of the respective holders of the Warrant Certificates, the number of Warrants evidenced on its face by each of the Warrant Certificates, and the date of each of the Warrant Certificates. Section 4. Transfer, Split-Up, Combination, and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. A. Subject to the provisions of Section l(c) of the Warrant Certificate, any Warrant Certificate, with or without other Warrant Certificates, may be transferred, split up, combined, or exchanged for another Warrant Certificate or Warrant Certificates in accordance with Sections 1 and 4 of the Warrant Certificate. B. Upon receipt by the Company and Warrant Agent of evidence reasonably satisfactory to each of the Company and Warrant Agent of the loss, theft, destruction, or mutilation of a Warrant Certificate, and in case of loss, theft, destruction, or mutilation, of indemnity reasonably satisfactory to the Company and the Warrant Agent and, in the case of mutilation, upon surrender and cancellation thereof, Warrant Agent will execute and deliver a new Warrant Certificate in accordance with Section 7 of the Warrant Certificate. Section 5. Subsequent Issue of Warrant Certificates. No Warrant Certificates may be issued except (a) Warrant Certificates issued in accordance with Section 4.A hereof and (b) Warrant Certificates issued in accordance with Section 4.B hereof. Section 6. Exchange, Transfer or Assignment of Warrant Certificates Fees. The Company covenants and agrees that it will pay when due and payable any and all governmental taxes (excluding income taxes) and charges which may be payable in respect of the issuance or delivery of the Warrant Certificates or of any shares of Common Stock upon the exercise of Warrants in accordance with Section 4 of the Warrant Certificate. The Company shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates, or the issuance or delivery of certificates for shares of Common Stock in a name other than that of the registered holder of the Warrant Certificate evidencing Warrants surrendered for exercise, or to issue or deliver any certificates for shares of Common Stock upon the exercise of any Warrants, until any such tax has been paid (any such tax being payable by the holder of such Warrant Certificate at the time of surrender) or until it has been established to the Company's satisfaction that no such tax is due. Section 7. Right of Action. All rights of action in respect of this Agreement are vested in the respective registered holders of the Warrant Certificates; and any registered holder of any Warrant Certificate, without the consent of Warrant Agent or of the holder of any other Warrant Certificate, may, in such holder's own behalf and for such holder's own benefit, enforce, and may institute and maintain any suit action, or proceeding against the Company to enforce, or otherwise in respect of, such holder's right to exercise the Warrants evidenced by such Warrant Certificate in the manner provided in such Warrant Certificate. Section 8. Registration and Transfer of Warrant Certificates. The Company agrees that: A. The Warrants are transferable only on the registry books of Warrant Agent upon surrender of the Warrant Certificates at the designated office of Warrant Agent and only as provided in Section 4 of the Warrant Certificate; and B. Warrant Agent may deem and treat the person in whose name the Warrant Certificate is registered as the absolute owner thereof and of the Warrants evidenced thereby (notwithstanding any notations of ownership or writing on the Warrant Agent) for all purposes whatsoever, and neither the Company nor Warrant Agent shall be affected by any notice to the contrary. Section 9. Concerning Warrant Agent. The Company agrees to pay to Warrant Agent the fees set forth in Schedule I hereto for all services rendered by Warrant Agent in the execution and administration of this Agreement, to reimburse Warrant Agent for all reasonable expenses (including reasonable counsel fees), disbursements, taxes and governmental charges and other charges of any kind and nature incurred by Warrant Agent in the preparation, execution, delivery, amendment and administration of this Agreement and to indemnify Warrant Agent and save it harmless against any and all liabilities, including judgments, costs, losses, damages, fines, penalties, claims, demands, settlements and reasonable counsel fees, for any action taken, suffered or omitted to be taken by Warrant Agent in connection with the execution and administration of this Agreement except as a result of the Warrant Agent's gross negligence, willful misconduct or bad faith (each as finally determined by a court of competent jurisdiction). The foregoing indemnities in this paragraph shall survive termination or removal of the Warrant Agent or termination of this Agreement. The reasonable costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company. Any liability of Warrant Agent under this Agreement to the Company will be limited to the amount of fees paid by the Company to Warrant Agent. Section 10. Merger or Consolidation or Change of Name of Warrant Agent. Any entity into which Warrant Agent or any successor Warrant Agent may be merged or with which it may be consolidated, or any entity resulting from any merger or consolidation to which Warrant Agent or any successor Warrant Agent is a party, or any entity succeeding to the business of Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing of any amendment or any further act on the part of any of the parties hereto, provided that such entity would be eligible for appointment as a successor Warrant Agent under the provisions of Section 12. In case at the time such successor Warrant Agent succeeds to the agent created by this Agreement, any of the Warrant Certificates have been counter-signed but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so counter-signed; and in case at that time any of the Warrant Certificates have not been countersigned, Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement. In case at any time the name of Warrant Agent is changed and at such time any of the Warrant Certificates have been counter-signed but not delivered, Warrant Agent may adopt the countersignature under its prior name and deliver Warrant Certificates so counter-signed; and in case at that time any of the Warrant Certificates have not been counter-signed, Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement. Section 11. Duties of Warrant Agent. Warrant Agent undertakes only the duties and obligations expressly imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Warrant Certificates, by their acceptance thereof, shall be bound: A. Warrant Agent may consult with legal counsel for the Company, and the advice or opinion of such counsel shall be full and complete authorization and protection to Warrant Agent as to any action taken, suffered or omitted by it in good faith and in accordance with such advice or opinion. B. Whenever in the performance of its duties under this Agreement Warrant Agent deems it necessary or desirable that any fact or matter be provided or established by the Company prior to taking, suffering or omitting to take any action hereunder such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chairman of the Board, the President, or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary, or an Assistant Secretary of the Company, and delivered to Warrant Agent; and such certification shall be full authorization to Warrant Agent for any action taken, suffered or omitted in good faith by it under the provisions of this Agreement in reliance upon such certificate. C. Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrant Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. D. Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its countersignature thereof) or the genuineness of any endorsed document of assignment or other document believed by it to be genuine; nor shall it be responsible for the adjustment of the Purchase Price or the making of any change in the number of shares of Common Stock required under the provisions of the Warrant or responsible for the manner, method, or amount of any such change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect to the exercise of Warrants evidenced by Warrant Certificates after actual notice of any adjustment of the Purchase Price); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any securities to be issued pursuant to this Agreement or any Warrant Certificate or as to whether any securities will, when issued, be validly authorized and issued, fully paid, and nonassessable. E. The Company agrees that it shall perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by Warrant Agent for the carrying out or performing by Warrant Agent of the provisions of this Agreement. F. Warrant Agent is hereby authorized, protected and directed to accept instruments with respect to the performance of its duties hereunder from the Chairman of the Board, the President, a Vice President, the Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken, suffered or omitted to be taken by it in good faith in accordance with instructions received from any such officer. G. Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys, agents or employees. H. Warrant Agent shall incur no liability or responsibility to the Company or to any holder of a Warrant Certificate for any action taken in reliance on any notice, resolution, waiver, consent, order, certificate or other paper, document or instrument reasonably believed by it to be genuine and to have been signed, sent or presented by the proper party or parties except for Warrant Agent's own gross negligence, willful misconduct or bad faith (each as finally determined by a court of competent jurisdiction). I. Warrant Agent and any stockholder, affiliate, director, officer or employee of Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude Warrant Agent from acting in any other capacity for the Company or for any other legal entity. J. Warrant Agent shall act hereunder solely as agent for the Company and in a ministerial capacity, and its duties shall be determined solely by the provisions hereof. Warrant Agent shall not be liable for any action taken, suffered or omitted to be taken in connection with this Agreement except for its own gross negligence, willful misconduct or bad faith (each as finally determined by a court of competent jurisdiction). Notwithstanding anything herein to the contrary, in no event shall Warrant Agent be liable for special, indirect, punitive, incidental or consequential loss or damage of any kind whatsoever (including, but not limited to, lost profits) even if Warrant Agent has been advised of the likelihood of such loss or damage. L. No provision of this Warrant Agreement shall require Warrant Agent to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties herewith or in the exercise of its rights hereunder if it believes that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it. Section 12. Change of Warrant Agents. Warrant Agent may resign and be effectively discharged from its duties under this Agreement upon thirty days' notice in writing mailed to the Company by registered or certified mail, and to the holder of the Warrants by first-class mail. The Company may remove Warrant Agent or any successor Warrant Agent upon thirty days' notice in writing mailed to Warrant Agent or a successor Warrant Agent, as the case may be, and to each transfer agent of the Common Stock, by first class mail. If the Warrant Agent resigns, is removed, or becomes otherwise incapable of acting, the Company shall appoint a successor Warrant Agent. If the Company fails to make such appointment within a period of thirty (30) days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by the holder of a Warrant (who shall, with such notice, submit his, her, or its Warrant Certificate for inspection by the Company), then the Company, the Warrant Agent or the registered holder of any Warrant may apply to any court of competent jurisdiction for the appointment of a new Warrant Agent. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be an entity organized and doing business, or a partnership or association formed, under the laws of the United States or of the State of New York in good standing, having an office in New York City, New York, which has at the time of its appointment as Warrant Agent a combined capital and surplus of at least Ten Million Dollars ($10,000,000). After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties, and responsibilities as if it had been originally named as Warrant Agent without further act or deed; and, upon payment in full of amounts owed to the predecessor Warrant Agent, the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act, or deed necessary for that purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the registered holders of the Warrants. Failure to give any notice provided for in this Section "12," however, or any defect therein, shall not affect the legality or validity of the resignation or removal of Warrant Agent or the appointment of the successor Warrant Agent, as the case may be. A. Notices or demands authorized by this Agreement to be given or made by Warrant Agent or by the holder of any Warrant Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing by the Company with Warrant Agent) as follows: DRS Technologies, Inc. 5 Sylvan Way Parsippany, NJ 07054 Attention: Mr. Richard A. Schneider Subject to the provisions of the Warrant Certificate, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Warrant to or on Warrant Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing by Warrant Agent with the Company) as follows: Mellon Investor Services LLC 44 Wall Street, 6th Floor New York, New York 10005 Attention: Relationship Management Notices or demands authorized by this Agreement to be given or made by the Company or Warrant Agent to the holder of any Warrant shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the registered holder received the notice. Section 13. Modification of Agreement. Warrant Agent may, without the consent or concurrence of the holders of the Warrants, by supplemental agreement or otherwise, join with the Company in making any change to, or correction in, this Agreement that they shall have been advised by counsel (who may be counsel for the Company): (1) are required to cure any ambiguity or to correct any defective or inconsistent provision or clerical omission or mistake or manifest error herein contained; or (2) add to the covenants and agreements of the Company in this Agreement further covenants and agreements thereafter to be observed, or surrender any right reserved to or conferred upon the Company in this Agreement; and (3) in either case, do not adversely affect, alter, or change the rights, privileges, or immunities of the holders of the Warrant Certificates or Warrant Agent. Section 14. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. Section 15. Benefits of this Agreement. Nothing expressed in this Agreement and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the Company, Warrant Agent, and the holders of the Warrants any right, remedy, or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof; and all covenants, conditions, stipulations, promises, and agreements in this Agreement contained herein shall be for the sole and exclusive benefit of the Company and Warrant Agent and their respective successors and of the holders of the Warrants. Section 16. Governing Law. This Agreement and each Warrant Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be governed by and construed in accordance with the laws of such State. Section 17. Descriptive Heading. Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 18. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one single document. SIGNATURES IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Warrant Agreement to be duly executed as of the date first written above. DRS TECHNOLOGIES, INC. By: /s/ Richard A. Schneider ----------------------------------- Richard A. Schneider Executive V.P., CFO Attest: /s/ Nina Laserson Dunn (SEAL) - -------------------------------------- MELLON INVESTOR SERVICES LLC, as Warrant Agent By: /s/ Scott Bellinger ----------------------------------- Scott Bellinger Relationship Manager Attest: /s/ Donald Messmer (SEAL) - -------------------------------------- EXHIBIT A No. B-____ _______ Shares DRS TECHNOLOGIES, INC. WARRANT TO PURCHASE COMMON STOCK VOID AFTER 5:30 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE THIS WARRANT AND ANY SHARES ISSUED UPON THE EXERCISE OF THIS WARRANT ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER SET FORTH IN SECTION 2 OF THIS WARRANT. FOR VALUE RECEIVED, DRS TECHNOLOGIES, INC., a Delaware corporation (the "Company"), hereby agrees to sell upon the terms and on the conditions hereinafter set forth, but no later than 5:30 p.m., New York City time, on the Expiration Date (as hereinafter defined) to __________________________, or registered assigns (the "Holder"), under the terms as hereinafter set forth, ______________________________ (______) fully paid and non-assessable shares of the Company's Common Stock, par value $.01 per share (the "Warrant Stock"), at a purchase price per share of Ten Dollars ($10.00) (the "Warrant Price"), pursuant to this warrant (this "Warrant"). The number of shares of Warrant Stock to be so issued and the Warrant Price are subject to adjustment in certain events as hereinafter set forth. The term "Common Stock" shall mean, when used herein, unless the context otherwise requires, the stock and other securities and property at the time receivable upon the exercise of this Warrant. This Warrant is one of a series of the Company's Warrants to purchase Common Stock (collectively, the "Warrants"), issued pursuant to that certain Agreement and Plan of Merger, dated as of August 26, 1998, by and among the Company, NAI Technologies, Inc. and DRS Merger Sub, Inc. (the "Agreement"). Capitalized terms used and not otherwise defined herein shall have the respective meanings attributed to such terms in the Agreement. 1. Exercise of Warrant. (a) The Holder may exercise this Warrant according to its terms by surrendering this Warrant to the Company at the address set forth in Section 10, the subscription form attached hereto having then been duly executed by the Holder, accompanied by cash, certified check or bank draft in payment of the purchase price, in lawful money of the United States of America, for the number of shares of the Warrant Stock specified in the subscription form, or as otherwise provided in this Warrant prior to 5:30 p.m., New York City time, on February 15, 2002 (the "Expiration Date"). (b) This Warrant may be exercised in whole or in part so long as any exercise in part hereof would not involve the issuance of factional shares of Warrant Stock. If exercised in part, the Company shall deliver to the Holder a new Warrant, identical in form, in the name of the Holder, evidencing the right to purchase the number of shares of Warrant Stock as to which this Warrant has not been exercised, which new Warrant shall be signed by the Chairman and Chief Executive Officer or the President and the Secretary or the Assistant Secretary of the Company. The term Warrant as used herein shall include any subsequent Warrant issued as provided herein. (c) No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. The Company shall pay cash in lieu of fractions with respect to the Warrants based upon the fair market value of such fractional shares of Common Stock (which shall be the closing price of such shares on the exchange or market on which the Common Stock is then traded) at the time of exercise of this Warrant. (d) In the event of any exercise of the rights represented by this Warrant, a certificate or certificates for the Warrant Stock so purchased, registered in the name of the Holder, shall be delivered to the Holder within a reasonable time after such rights shall have been so exercised. The person or entity in whose name any certificate for the Warrant Stock is issued upon exercise of the rights represented by this Warrant shall for all purposes be deemed to have become the holder of record of such shares immediately prior to the close of business on the date on which the Warrant was surrendered and payment of the Warrant Price and any applicable taxes was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the opening of business on the next succeeding date on which the stock transfer books are open. Except as provided in Section 4 hereof, the Company shall pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Common Stock on exercise of this Warrant. 2. Disposition of Warrant Stock and Warrant. If, at the time of issuance of the shares issuable upon exercise of this Warrant, no registration statement is in effect with respect to such shares under applicable provisions of the Securities Act of 1933, as amended (the "Act"), the Company may at its election require that any stock certificate delivered to the Holder of a surrendered Warrant bear legends reading substantially as follows: "TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH IN THE WARRANT PURSUANT TO WHICH THESE SHARES WERE PURCHASED FROM THE COMPANY. COPIES OF THOSE RESTRICTIONS ARE ON FILE AT THE PRINCIPAL OFFICES OF THE COMPANY, AND NO TRANSFER OF SUCH SHARES OR OF THIS CERTIFICATE, OR OF ANY SHARES OR OTHER 2 SECURITIES (OR CERTIFICATES THEREFOR) ISSUED IN EXCHANGE FOR OR IN RESPECT OF SUCH SHARES, SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND CONDITIONS THEREIN SET FORTH SHALL HAVE BEEN COMPLIED WITH." "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THIS CERTIFICATE THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT." In addition, so long as the foregoing legend may remain on any stock certificate delivered to the Holder, the Company may maintain appropriate "stop transfer" orders with respect to such certificates and the shares represented thereby on its books and records and with those to whom it may delegate registrar and transfer functions. 3. Reservation of Shares. The Company hereby agrees that at all times there shall be reserved for issuance upon the exercise of this Warrant such number of shares of its Common Stock as shall be required for issuance upon exercise of this Warrant. The Company further agrees that all shares which may be issued upon the exercise of the rights represented by this Warrant will be duly authorized and will, upon issuance and against payment of the exercise price, be validly issued, fully paid and non-assessable, free from all taxes, Liens, charges and preemptive rights with respect to the issuance thereof, other than taxes, if any, in respect of any transfer occurring contemporaneously with such issuance and other than transfer restrictions imposed by federal and state securities laws. 4. Exchange, Transfer, Assignment or Loss of Warrant. This Warrant is exchangeable, without expense, at the option of the Holder, upon presentation and surrender hereof to the Company or at the office of its stock transfer agent, if any, for other Warrants of different denominations, entitling the Holder or Holders thereof to purchase in the aggregate the same number of shares of Common Stock purchasable hereunder. Upon surrender of this Warrant to the Company or at the office of its stock transfer agent, if any, with the Assignment Form annexed hereto duly executed and funds sufficient to pay any transfer tax, the Company shall, without charge, execute and deliver a new Warrant in the name of the assignee named in such instrument of assignment and this Warrant shall promptly be canceled. This Warrant may be divided or combined with other Warrants that carry the same rights upon presentation hereof at the office of the Company or at the office of its stock transfer agent, if any, together with a written notice 3 specifying the names and denominations in which new Warrants are to be issued and signed by the Holder hereof. 5. Capital Adjustments. This Warrant is subject to the following further provisions: (a) Recapitalization, Reclassification and Succession. If any recapitalization of the Company or reclassification of its Common Stock or any merger or consolidation of the Company into or with a corporation or other business entity, or the sale or transfer of all or substantially all of the Company's assets or of any successor corporation's assets to any other corporation or business entity (any such corporation or other business entity being included within the meaning of the term "successor corporation") shall be effected, at any time while this Warrant remains outstanding and unexpired, then, as a condition of such recapitalization, reclassification, merger, consolidation, sale or transfer, lawful and adequate provision shall be made whereby the Holder of this Warrant thereafter shall have the right to receive upon the exercise hereof as provided in Section 1 and in lieu of the shares of Common Stock immediately theretofore issuable upon the exercise of this Warrant, such shares of capital stock, securities or other property as may be issued or payable with respect to or in exchange for a number of outstanding shares of Common Stock equal to the number of shares of Common Stock immediately theretofore issuable upon the exercise of this Warrant had such recapitalization, reclassification, merger, consolidation, sale or transfer not taken place, and in each such case, the terms of this Warrant shall be applicable to the shares of stock or other securities or property receivable upon the exercise of this Warrant after such consummation. (b) Subdivision or Combination of Shares. If the Company at any time while this Warrant remains outstanding and unexpired shall subdivide or combine its Common Stock, the number of shares of Warrant Stock purchasable upon exercise of this Warrant and the Warrant Price shall be proportionately adjusted. (c) Stock Dividends and Distributions. If the Company at any time while this Warrant is outstanding and unexpired shall issue or pay the holders of its Common Stock, or take a record of the holders of its Common Stock for the purpose of entitling them to receive, a dividend payable in, or other distribution of, Common Stock, then (i) the Warrant Price shall be adjusted in accordance with Section 5(e) and (ii) the number of shares of Warrant Stock purchasable upon exercise of this Warrant shall be adjusted to the number of shares of Common Stock that Holder would have owned immediately following such action had this Warrant been exercised immediately prior thereto. (d) Stock and Rights Offering to Stockholders. If at any time after the date of issuance of this Warrant, the Company shall issue or sell, or fix a record date for the purposes of entitling holders of its Common Stock to receive, (i) Common Stock or (ii) rights, options or warrants entitling the holders thereof to subscribe for or purchase Common Stock (or securities convertible or exchangeable into or exercisable for Common Stock), in any such case, at a price per share (or having a conversion, exchange 4 or exercise price per share) that is less than the closing price per share of the Company's Common Stock on the principal national securities exchange on which the Common Stock is listed or admitted to trading or, if not listed or traded on any such exchange, on the National Market System (the "National Market System") of the National Association of Securities Dealers Automated Quotations System ("Nasdaq"), or if not listed or traded on any such exchange or system, the average of the bid and asked price per share on Nasdaq or, if such quotations are not available, the fair market value per share of the Company's Common Stock as reasonably determined by the Board of Directors of the Company (the "Closing Price") on the date of such issuance or sale or on such record date then, immediately after the date of such issuance or sale or on such record date, (x) the Warrant Price shall be adjusted in accordance with Section 5(e), and (y) the number of shares of Warrant Stock purchasable upon exercise of this Warrant shall be adjusted to that number determined by multiplying the number of shares of Warrant Stock purchasable upon exercise of this Warrant immediately before the date of such issuance or sale or such record date by a fraction, the denominator of which will be the number of shares of Common Stock outstanding on such date plus the number of shares of Common Stock that the aggregate offering price of the total number of shares so offered for subscription or purchase (or the aggregate initial conversion price, exchange price or exercise price of the convertible securities or exchangeable securities or rights, options or warrants, as the case may be, so offered) would purchase at such Closing Price, and the numerator of which will be the number of shares of Common Stock outstanding on such date plus the number of additional shares of Common Stock offered for subscription or purchase (or into which the convertible or exchangeable securities or rights, options or warrants so offered are initially convertible or exchangeable or exercisable, as the case may be). If the Company shall at any time after the date of issuance of this Warrant distribute to all holders of its Common Stock any shares of capital stock of the Company (other than Common Stock) or evidences of its Indebtedness or assets (excluding cash dividends or distributions paid from retained earnings or current year's or prior year's earnings of the Company) or rights or warrants to subscribe for or purchase any of its securities (excluding those referred to in the immediately preceding paragraph) (any of the foregoing being hereinafter in this paragraph called the "Securities"), then in each such case, the Company shall reserve shares or other units of such securities for distribution to the Holder upon exercise of this Warrant so that, in addition to the shares of the Common Stock to which such Holder is entitled, such Holder will receive upon such exercise the amount and kind of such Securities which such Holder would have received if the Holder had, immediately prior to the record date for the distribution of the Securities, exercised this Warrant. (e) Warrant Price Adjustment. Whenever the number of shares of Warrant Stock purchasable upon exercise of this Warrant is adjusted, as herein provided, the Warrant Price payable upon the exercise of this Warrant shall be adjusted to that price determined by multiplying the Warrant Price immediately prior to such adjustment by a fraction (i) the numerator of which shall be the number of shares of Warrant Stock purchasable upon exercise of this Warrant immediately prior to such adjustment, and (ii) 5 the denominator of which shall be the number of shares of Warrant Stock purchasable upon exercise of this Warrant immediately thereafter. (f) Certain Shares Excluded. The number of shares of Common Stock outstanding at any given time for purposes of the adjustments set forth in this Section 5 shall exclude any shares then directly or indirectly held in the treasury of the Company. (g) Deferral and Cumulation of De Minimis Adjustments. The Company shall not be required to make any adjustment pursuant to this Section 5 if the amount of such adjustment would be less than one percent (1%) of the Warrant Price in effect immediately before the event that would otherwise have given rise to such adjustment. In such case, however, any adjustment that would otherwise have been required to be made shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment or adjustments so carried forward, shall amount to not less than one percent (1%) of the Warrant Price in effect immediately before the event giving rise to such next subsequent adjustment. (h) Duration of Adjustment. Following each computation or readjustment as provided in this Section 5, the new adjusted Warrant Price and number of shares of Warrant Stock purchasable upon exercise of this Warrant shall remain in effect until a further computation or readjustment thereof is required. 6. Notice to Holders. (a) Notice of Record Date. In case: (i) the Company shall take a record of the holders of its Common Stock (or other stock or securities at the time receivable upon the exercise of this Warrant) for the purpose of entitling them to receive any dividend (other than a cash dividend payable out of earned surplus of the Company) or other distribution, or any right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right; (ii) of any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation with or merger of the Company into another corporation, or any conveyance of all or substantially all of the assets of the Company to another corporation; or (iii) of any voluntary dissolution, liquidation or winding-up of the Company; then, and in each such case, the Company will mail or cause to be mailed to the Holder hereof at the time outstanding a notice specifying, as the case may be, (i) the date on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character of such dividend, distribution or right, or (ii) the date on which such reorganization, reclassification, consolidation, merger, conveyance, 6 dissolution, liquidation or winding-up is to take place, and the time, if any, is to be fixed, as of which the holders of record of Common Stock (or such stock or securities at the time receivable upon the exercise of this Warrant) shall be entitled to exchange their shares of Common Stock (or such other stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, conveyance, dissolution or winding-up. Such notice shall be mailed at least thirty (30) days prior to the record date therein specified, or if no record date shall have been specified therein, at least thirty (30) days prior to such specified date. (b) Certificate of Adjustment. Whenever any adjustment shall be made pursuant to Section 5 hereof, the Company shall promptly make a certificate signed by its Chairman and Chief Executive Officer, its President or a Vice President and by its Treasurer or Assistant Treasurer or its Secretary or Assistant Secretary, setting forth in reasonable detail the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated and the Warrant Price and number of shares of Warrant Stock purchasable upon exercise of this Warrant after giving effect to such adjustment, and shall promptly cause copies of such certificates to be mailed (by first class mail, postage prepaid) to the Holder of this Warrant. 7. Loss, Theft, Destruction or Mutilation. Upon receipt by the Company of evidence satisfactory to it, in the exercise of its reasonable discretion, of the ownership and the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, of indemnity reasonably satisfactory to the Company and, in the case of mutilation, upon surrender and cancellation thereof, the Company will execute and deliver in lieu thereof, without expense to the Holder, a new Warrant of like tenor dated the date hereof. 8. Warrant Holder Not a Stockholder. The Holder of this Warrant, as such, shall not be entitled by reason of this Warrant to any rights whatsoever as a stockholder of the Company. 9. Definitions. As used herein, unless the context otherwise requires, the following terms have the respective meanings: (a) "GAAP": United States generally accepted accounting principles, consistently applied. (b) "Indebtedness": at any time and with any respect to any Person, (i) all indebtedness of such Person for borrowed money, (ii) all indebtedness of such Person for the deferred purchase price of property or services (other than property, including inventory, and services purchased, and expense accruals and deferred compensation items arising, in the ordinary course of business, provided that the same shall not be overdue (i.e., the earlier of ninety (90) days from the invoice date or the date the obligee commences an action to recover such amounts), or if overdue, are being contested in good faith and by appropriate proceedings), (iii) all obligations of such Person evidenced by notes, bonds, debentures or other similar instruments (other than performance, surety and appeal bonds arising in the ordinary course of business), (iv) all indebtedness of such 7 Person created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (v) all obligations of such Person under leases which have been or should be, in accordance with GAAP, recorded as capital leases, to the extent required to be so recorded, (vi) all reimbursement, payment or similar obligations of such Person, contingent or otherwise, under acceptance, letter of credit or similar facilities, (vii) all Indebtedness referred to in clauses (i) through (vi) above guaranteed directly or indirectly by such Person including without limitation through any agreement (A) to pay or purchase such Indebtedness or to advance or supply funds for the payment or purchase of such Indebtedness, (B) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against loss in respect of such Indebtedness, (C) to supply funds to or in any other manner invest in the debtor (including any agreement to pay for property or services irrespective of whether such property is received or such services are rendered) or (D) otherwise to assure a creditor against loss in respect of such Indebtedness, and (viii) all Indebtedness referred to in clauses (i) through (vii) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon property (including, without limitation, accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness. (c) "Lien": any mortgage, pledge, security interest, encumbrance, lien or charge of any kind whatsoever. (d) "Person": any natural person, corporation, division of a corporation, partnership, limited liability company, trust, joint venture, association, company, estate, unincorporated organization or government or any agency or political subdivision thereof. (e) "Subsidiaries": with respect to any Person, any corporation, association or other business entity (whether now existing or hereafter organized) of which at least a majority of the securities or other ownership interests having ordinary voting power for the election of directors is, at the time as of which any determination is being made, owned or controlled by such Person or one or more subsidiaries of such Person. 10. Notices. Any notice required or contemplated by this Warrant shall be deemed to have been duly given if transmitted by registered or certified mail, return receipt requested, to the Company at 5 Sylvan Way, Parsippany, New Jersey 07054, Attention: President, or to the Holder at the name and address set forth in the Warrant Register maintained by the Company. 11. Choice of Law. THIS WARRANT IS ISSUED UNDER AND SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 8 IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed on its behalf, in its corporate name and by its duly authorized officer, as of this _____ day of _____________ 1999. DRS TECHNOLOGIES, INC. By: ----------------------------------- Name: Title: SUBSCRIPTION FORM The undersigned, the Holder of the attached Warrant, hereby irrevocably elects to exercise purchase rights represented by such Warrant for, and to purchase thereunder, the following number of shares of Common Stock of DRS TECHNOLOGIES, INC.: Number of Shares Purchase Price Per Share ---------------- ------------------------ The undersigned herewith makes payment of $_____________ therefor, and requests that certificates for such shares (and any warrants or other property issuable upon such exercise) be issued in the name of and delivered to ______________________ whose address is __________________________________________________________ _______________________________________ (social security or taxpayer identification number ________________) and, if such shares shall not include all of the shares issuable under such warrant, that a new warrant of like tenor and date for the balance of the shares issuable thereunder be delivered to the undersigned. HOLDER: ------------------------ Signature ------------------------ Signature, if jointly held ------------------------ Date ASSIGNMENT FORM FOR VALUE RECEIVED, _____________________________________________ hereby sells, assigns and transfers unto Name____________________________________________________________________________ (Please typewrite or print in block letters) Social Security or Taxpayer Identification Number_______________________________ the right to purchase shares of Common Stock of DRS TECHNOLOGIES, INC., a Delaware corporation, represented by this Warrant to the extent of shares as to which such right is exercisable and does hereby irrevocably constitute and appoint _________________________________, Attorney, to transfer the same on the books of the Company with full power of substitution in the premises. DATED:__________________ -------------------------- Signature -------------------------- Signature, if jointly held Witness: - --------------------- SCHEDULE I Mellon Investor Services LLC Schedule of Fees as Warrant Agent for DRS Technologies, Inc. ================================================================================ I. Acceptance Fee (One time fee) $2,500.00 II. Reviewing Warrant Agent Agreement and appointment documents By Appraisal III. Annual fee for acting as Warrant Agent $2,500.00 IV. Conversion of Warrants (per item) $100.00 (includes the receipt of warrants and necessary funds, cancellation of warrant, issuance of new security and wiring of funds to issuer) V. Special Services (Mailing of materials to holders), Minimum $250.00 Mechanically affixing labels to envelopes or enclosures, each $.03 Mechanically inserting enclosures into envelopes (letter size), each $.05 EX-23.1 6 ex-23_1.txt ACCOUNTANT'S CONSENT Exhibit 23.1 ACCOUNTANTS' CONSENT The Board of Directors DRS Technologies, Inc.: We consent to the use of our report incorporated herein by reference and to the reference to our firm under the heading "Experts" in the prospectus. /s/ KPMG LLP Short Hills, New Jersey August 6, 2001 -----END PRIVACY-ENHANCED MESSAGE-----