View:
October 28, 2005
By facsimile to (858) 450-8499 and U.S. Mail
Douglas E. Scott, Esq.
Senior Vice President, General Counsel, and Secretary
SAIC, Inc.
10260 Campus Point Drive
San Diego, CA 92121
Re: SAIC, Inc.
Pre-effective Amendment 1 to Registration Statement on Form
S-4
Filed October 14, 2005
File No. 333-128022
Science Applications International Corporation
Annual Report on Form 10-K for the fiscal year ended January
31,
2005 and
Subsequent Exchange Act Reports
File No. 0-12771
Dear Mr. Scott:
We reviewed the filings and have the comments below. We
welcome
any questions that you may have about comments or any other aspect
of
our review. You may call us at the telephone numbers listed at
the
end of this letter.
S-4/A1
1. If applicable, comments on the S-4/A1 are comments on the S-
1/A1that was filed by SAIC, Inc. or SAIC on October 14, 2005 and
the
10-K and subsequent Exchange Act reports of Science Applications
International Corporation and vice versa.
2. We note your response to prior comments 5 and 28 that you will
file by amendment the legality opinion and a long form tax
opinion.
To expedite our review, consider providing us draft copies of the
opinions before you file them by amendment.
Letter to Stockholders
3. For greater clarity, indicate in the second paragraph that
holders
of Old SAIC stock will be entitled to receive 40 shares "of class
A
preferred stock."
4. Please disclose that officers and directors will receive
dividends
from the proceeds of the offering. In the "Interests of Our
Directors and Executive Officers in the Merger" section, please
disclose how much each named executive officer will receive.
Questions and Answers, page 1
5. Refer to prior comment 13. Replace the words "is not expected
to
be" with the words "will not be" in the answer to Q17 on page 5.
Alternatively, describe the basis for any uncertainty of the
United
States federal income tax consequences.
6. Refer to prior comment 13. Replace the word "should" with the
word "will" in the answer to Q36 on page 8. Similarly, revise the
third paragraph on page 18 and the second full paragraph on page
56.
If counsel will give a "should" opinion instead of a "will"
opinion,
you must, describe the basis for any uncertainty of the United
States
federal income tax consequences here and in the opinion. Please
also
comply with this comment in the "Material Federal Income Tax
Consequences-The Special Dividend" section on page 56.
7. In the answer to Q30 on page 7, please clarify how you intend
to
use proceeds for working capital, capital spending and investments
and acquisitions when it appears that you will use all of the
proceeds to fund the special dividend.
Summary Consolidated Financial Data, page 23
8. We note your response to prior comment 16. We note that you
have
subsequently changed the special dividend to be declared by
Science
Applications International Corporation`s (Old SAIC) board of
directors and will be paid by Old SAIC contingent upon the
completion
of the IPO. However, it appears that the special dividend is
expected to exceed earnings from the previous 12 months. As such,
SAB Topic 1:B.3 does require the excess of the special dividends
over
the earnings from the previous 12 months to be included in pro
forma
basic and diluted EPS. As such, please provide us with your
analysis
of the requirements of SAB Topic 1:B.3 and revise your disclosures
in
your Forms S-4 and S-1, as appropriate.
Interests of Our Directors and Executive Officers in the Merger,
page
50
9. Refer to prior comment 26. Clarify whether any unvested stock
options, unvested restricted stock awards, unvested stock units,
or a
combination of those components held by members of the board of
directors and executive officers vest automatically in connection
with the merger agreement. If those interests vest automatically
in
connection with the merger agreement, describe and quantify those
interests here and in the summary section. If those interests do
not
vest automatically in connection with the merger agreement, so
indicate.
Conditions to the Merger, page 54
10. Refer to prior comment 27 and this subsection`s last bullet
point. Expand the disclosure to include the information that you
gave us supplementally.
Financial Statements
Note 2 - Business Segment Information, page F-18
11. We note your response to comment 41 in our letter dated
September
28, 2005. We are unable to fully assess whether the operating
segments within the government segment have similar economic
characteristics as contemplated by SFAS 131. In this regard, we
again
reference the disparate growth rates disclosed in the Annual
Report
and also the varying profit margins. Please provide the Exhibit C
and
Exhibit D reports, or equivalents thereof, for the years ended
January 31, 2004 and January 31, 2005.
Closing
File an amendment to the S-4 in response to the comments. To
expedite our review, SAIC may wish to provide us three marked
courtesy copies of the amendment. Include with the filing any
supplemental information requested and a cover letter tagged as
correspondence that keys the responses to the comments. If SAIC
thinks that compliance with any of the comments is inappropriate,
provide the basis in the letter. We may have additional comments
after review of the amendment, the responses to the comments, and
any
supplemental information.
We urge all persons responsible for the accuracy and adequacy
of
the disclosure in the registration statement reviewed by us to
ensure
that they have provided all information investors require for an
informed decision. Since SAIC, Science Applications International
Corporation, and their management are in possession of all facts
relating to the disclosure in the registration statement, they are
responsible for the adequacy and accuracy of the disclosures that
they have made.
If SAIC requests acceleration of the registration
statement`s
effectiveness, SAIC should furnish a letter at the time of the
request, acknowledging that:
* Should the Commission or the staff acting by delegated authority
declare the registration statement effective, it does not
foreclose
the Commission from taking any action on the filing.
* The action of the Commission or the staff acting by delegated
authority in declaring the registration statement effective does
not
relieve SAIC and Science Applications International Corporation
from
their full responsibility for the adequacy and accuracy of the
registration statement`s disclosures.
* SAIC and Science Applications International Corporation may not
assert our comments and the declaration of the registration
statement`s effectiveness as a defense in any proceedings
initiated
by the Commission or any person under the United States` federal
securities laws.
The Commission`s Division of Enforcement has access to all
information that SAIC and Science Applications International
Corporation provide us in our review of the registration statement
or
in response to our comments on the registration statement.
We will consider a written request for acceleration of the
registration statement`s effectiveness under Rule 461 of
Regulation C
under the Securities Act as confirmation that those requesting
acceleration are aware of their responsibilities under the
Securities
Act and the Exchange Act as they relate to the proposed public
offering of the securities specified in the registration
statement.
We will act on the request and by delegated authority grant
acceleration of the registration statement`s effectiveness.
You may direct questions on accounting comments to Tracey L.
Houser, Staff Accountant, at (202) 551-3736 or Alfred P. Pavot,
Jr.,
Staff Accountant, at (202) 551-3738. You may direct questions on
other comments and disclosure issues to Edward M. Kelly, Senior
Counsel, at (202) 551-3728 or me at (202) 551-3767.
Very truly yours,
Jennifer R. Hardy
Legal
Branch Chief
cc: Neal H. Brockmeyer, Esq.
Jeffrey C. Thacker, Esq.
Sarah A. Solomon, Esq.
Heller Ehrman LLP
4350 La Jolla Village Drive
San Diego, CA 92122
Douglas E. Scott, Esq.
October 28, 2005
Page 5
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE