COOK: I did not realize that SAIC was now a minority shareholder.
Certainly still with enormous influence, but at least without
outright control.
From Edgar:
Excerpts Form 10-Q for NETWORK SOLUTIONS INC /DE/ filed on May 17 1999
SECONDARY STOCK OFFERING
On February 12, 1999, Network Solutions completed a secondary stock
offering in which a total of 9,160,000 shares of Class A common stock
were sold. Concurrent with the offering, Science Applications
International Corporation, commonly known as "SAIC", converted 9,000,000
shares of Class B common stock into 9,000,000 shares of Class A common
stock sold in the offering. The remaining 160,000 shares of Class A
common stock were sold by other selling stockholders after they
exercised the applicable stock options simultaneously
with the closing of the offering. Network Solutions was not a selling
stockholder, and, therefore, did not receive any proceeds from the stock
offering other than proceeds from options exercised as part of the
offering. After the offering, SAIC owns approximately 89% of the
combined voting power and approximately 45% of the economic interest of
the outstanding common stock.
By May 31, 1999, SAIC intends to convert all of the remaining Class B
common stock into an identical number of shares of Class A common stock.
After that conversion, Class A common stock will be the only class of
common stock outstanding and SAIC will own approximately 45% of the
voting power and economic interest of Network Solutions' outstanding
common stock.
...
INVESTMENT RISKS
...
[EXCERPT}
SAIC owns 14,850,000 of the outstanding shares of our common stock.
A decision by SAIC to sell such stock could depress the market price of
the Class A common stock.
Because it holds a significant number of shares of our Class B common
stock, which have ten votes per share, SAIC controls 89% of the combined
voting power of the Class A and Class B common stock and, therefore,
effectively controls all matters requiring approval by our stockholders
including the election of members of our board of directors, changes in
the size and composition of the board of directors and a change in control.
We do not have an agreement with SAIC which restricts its rights to
convert, distribute or sell its shares of our common stock.
If SAIC converts all of its remaining shares of Class B common stock
into Class A common stock its economic interest and voting power will be
below 50% of the total economic interest and voting power of our common
stock after such conversion. Nonetheless, SAIC will remain our largest
stockholder and may be able to exercise significant influence over us.
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