PURSUANT TO RULE 424(b)(5)
REGISTRATION NO. 333-01939
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY 10, 1996
$1,500,000,000
LOCKHEED MARTIN CORPORATION
$500,000,000 6.625% Notes Due 1998
$550,000,000 7.45% Notes Due 2004
$450,000,000 7.70% Notes Due 2008
GUARANTEED BY
LOCKHEED MARTIN TACTICAL SYSTEMS, INC.
Interest payable June 15 and December 15
-----------
The 6.625% Notes Due 1998, 7.45% Notes due 2004, and 7.70% Notes Due 2008 are
herein referred to as the "Offered Debt Securities." The payment of the
principal of and interest on the Offered Debt Securities will be fully
and unconditionally guaranteed by Lockheed Martin Tactical Systems,
Inc. ("Tactical Systems" or the "Guarantor"), a wholly owned
subsidiary of the Corporation. The guarantees of Tactical Systems
in respect of the Offered Debt Securities are herein referred to
as the "Guarantees." The Offered Debt Securities are not
redeemable prior to maturity. See "Description of Offered
Debt Securities."
The Offered Debt Securities will be represented by one or more Global
Securities registered in the name of the nominee of The Depository Trust
Company ("DTC"). Interests in the Global Securities will be shown on,
and transfers thereof will be effected only through, records
maintained by DTC and its participants. Except as provided herein,
Offered Debt Securities in definitive form will not be issued.
The Offered Debt Securities will trade in DTC's Same-Day Funds
Settlement System until maturity, and secondary market
trading activity for the Offered Debt Securities will
therefore settle in immediately available funds.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECU-
RITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMI-
NAL OFFENSE.
Underwriting
Price to Discounts and Proceeds to
Public(1) Commissions Corporation(1)(2)
-------------- ------------- -----------------
Per 6.625% Note Due 1998........ 99.987% .325% 99.662%
Per 7.45% Note Due 2004......... 99.818% .625% 99.193%
Per 7.70% Note Due 2008......... 99.972% .675% 99.297%
Total........................... $1,498,808,000 $8,100,000 $1,490,708,000
(1) Plus accrued interest from June 15, 1996.
(2) Before deduction of expenses payable by the Corporation estimated at
$1,100,000.
-----------
The Offered Debt Securities are offered by the several Underwriters when, as
and if issued by the Corporation, delivered to and accepted by the
Underwriters and subject to their right to reject orders in whole or in part.
It is expected that the delivery of the Offered Debt Securities, in book-entry
form, will be made through the facilities of DTC on or about June 26, 1996,
against payment in immediately available funds.
CS First Boston
Bear, Stearns & Co. Inc.
Goldman, Sachs & Co.
Merrill Lynch & Co.
Morgan Stanley & Co.
Incorporated
The date of this Prospectus Supplement is June 21, 1996.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE OFFERED DEBT
SECURITIES AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------
THE CORPORATION
The following summary of the business of the Corporation is qualified in its
entirety by and should be read together with the more detailed information and
financial statements included or incorporated by reference in this Prospectus
Supplement and the Prospectus.
The Corporation, which was incorporated in Maryland on August 29, 1994, to
effect the combination of the businesses of Martin Marietta Corporation and
Lockheed Corporation, is a diversified enterprise principally engaged in the
conception, research, development, design, manufacture and integration of
advanced technology products and services. The Corporation conducts its
principal business through six major operating sectors: Space & Strategic
Missiles; Aeronautics; Information & Technology Services; Electronics; Energy
& Environment; and Tactical Systems. The Tactical Systems Sector consists of
the defense electronics and systems integration businesses of the former Loral
Corporation recently acquired by the Corporation (the "Loral Transaction").
See "Recent Developments--Loral Transaction." Those businesses currently are
being conducted through Tactical Systems, a wholly owned subsidiary of the
Corporation.
The Corporation, a Maryland corporation, and Tactical Systems, a New York
corporation, maintain their principal executive offices at 6801 Rockledge
Drive, Bethesda, Maryland 20817 (telephone number (301) 897-6000).
RECENT DEVELOPMENTS
LORAL TRANSACTION
On January 7, 1996, the Corporation and its wholly-owned subsidiary, LAC
Acquisition Corporation ("LAC"), entered into an Agreement and Plan of Merger
(the "Loral Merger Agreement") with Loral Corporation ("Loral") pursuant to
which LAC agreed to commence a tender offer to purchase all the issued and
outstanding shares of common stock of Loral (together with the associated
preferred stock purchase rights) for an aggregate consideration of $38 per
share, net to the Seller in cash, without interest (the "Tender Offer"). The
Tender Offer was made as part of a series of transactions that resulted in (i)
the distribution, to stockholders of Loral immediately prior to the
consummation of the Tender Offer, of shares of capital stock in Loral Space &
Communications, Ltd. ("Loral SpaceCom"), a newly-formed Bermuda company, which
now owns and manages substantially all of Loral's former space and satellite
telecommunications interests, including Loral's direct and indirect interests
in Globalstar, L.P. and Space Systems/Loral, Inc. and certain other assets of
Loral, and (ii) the acquisition by the Corporation of Loral's defense
electronics and systems integration businesses.
In accordance with the terms of the Tender Offer and the Loral Merger
Agreement, on April 23, 1996, LAC purchased approximately 94.5% of the
outstanding shares of common stock of Loral. On April 29, 1996, in accordance
with the terms of the Loral Merger Agreement, LAC merged with and into Loral
and pursuant thereto each remaining share of common stock of Loral not owned
by LAC was converted into the right to receive $38, each outstanding share of
common stock of LAC was converted into shares of common stock of Loral, and
Loral changed its name to Lockheed Martin Tactical Systems, Inc. As a result
of these transactions, Tactical Systems became a wholly owned subsidiary of
the Corporation.
In connection with the transactions contemplated by the Loral Merger
Agreement and the related agreements between the Corporation and Loral, the
Corporation acquired shares of preferred stock of Loral SpaceCom that are
convertible into 20% of Loral SpaceCom's common stock on a fully diluted
basis. The Corporation's ownership of the preferred stock of Loral SpaceCom is
subject to certain limitations and restrictions set forth in the terms and
conditions of the preferred stock and in agreements between the Corporation
and Loral SpaceCom.
S-2
On April 18, 1996, in connection with the early termination of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act by the United
States Federal Trade Commission (the "FTC"), the Corporation entered into an
agreement containing consent order (the "Consent Agreement") with the FTC. The
Consent Agreement obligates the Corporation to enter into a proposed consent
order (the "Consent Order"), subject to a 60-day public notice and comment
period and final approval of the Consent Order by the FTC. Under the Consent
Agreement, the terms of the proposed Consent Order are applicable to the
Corporation during the 60-day public review period and until the final Consent
Order is entered or withdrawn. The terms of the proposed Consent Order provide
for the Corporation to divest its systems engineering and technical services
contract with the Federal Aviation Administration; prohibit the Corporation
from providing certain technical services or information to Space
Systems/Loral, a subsidiary of Loral SpaceCom; restrict participation and
compensation of persons who serve as directors or officers of both the
Corporation and Loral SpaceCom; limit the Corporation's ownership of Loral
SpaceCom; and require "firewalls" to limit information flow about competitors'
military aircraft and unmanned aerial vehicles.
In connection with the consummation of the Tender Offer and the transactions
contemplated by the Loral Merger Agreement, the Corporation entered into
revolving credit facilities (the "Credit Facilities") with a syndicate of
commercial banks that provide for loans in an aggregate amount of up to $10
billion. The Credit Facilities consist of a 364-day unsecured revolving credit
facility in the amount of $5 billion and a 5-year unsecured revolving credit
facility in the amount of $5 billion. The funds for the consummation of the
Tender Offer and the transactions contemplated by the Loral Merger Agreement
were provided through the issuance of commercial paper and through borrowings
under the Credit Facilities. Management of the Corporation is in the process
of evaluating potential near-term actions that may permit the Corporation to
reduce its long-term debt, including but not limited to the disposition of
non-core businesses and surplus properties.
RECENT FINANCING
On May 21, 1996, the Corporation completed an offering (the "Recent
Financing") of $3,500,000,000 aggregate principal amount of debt securities
consisting of $500,000,000 of 6.55% Notes Due 1999, $750,000,000 of 6.85%
Notes Due 2001, $750,000,000 of 7.25% Notes Due 2006, $600,000,000 of 7.65%
Debentures Due 2016, $600,000,000 of 7.75% Debentures Due 2026, and
$300,000,000 of 7.20% Debentures Due 2036 (collectively, the "Previously
Offered Securities"). The Previously Offered Securities are unsecured
obligations of the Corporation, and will rank pari passu with the Offered Debt
Securities. The payment of the principal of and interest on the Previously
Offered Securities is fully and unconditionally guaranteed by Tactical
Systems. The guarantees of Tactical Systems in respect of the Previously
Offered Securities are unsecured obligations of Tactical Systems. The net
proceeds from the sale of the Previously Offered Securities were used to repay
indebtedness incurred in connection with the consummation of the Loral
Transaction, for the working capital requirements of the Corporation and its
subsidiaries, and for general corporate purposes.
INTERNAL REORGANIZATION
On January 28, 1996, the Corporation consummated an internal reorganization
pursuant to which its wholly-owned subsidiaries, Martin Marietta Technologies,
Inc., Martin Marietta Corporation, Lockheed Sanders Corporation, Lockheed
Missiles and Space Company, Inc. and Lockheed Corporation, were merged in a
series of transactions into the Corporation. As a result, the businesses
previously conducted by those former subsidiaries and the Corporation now are
conducted by the Corporation.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Debt Securities, estimated to
be $1,492,930,917 (with accrued interest and after estimated expenses), will
be used to repay indebtedness incurred in connection with the consummation of
the Loral Transaction, for the working capital requirements of the Corporation
and its subsidiaries, and for general corporate purposes. The indebtedness to
be repaid represents a portion of the indebtedness incurred upon the issuance
of commercial paper, which currently bear interest at a weighted average rate
of 5.59% per annum with a weighted average maturity of 22 days.
S-3
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation (i) as of March 31, 1996, (ii) as adjusted to reflect the
consummation of the Loral Transaction and the Recent Financing on a pro forma
basis, and (iii) as further adjusted to reflect on a pro forma basis the
issuance of the Offered Debt Securities and the application of the estimated
proceeds therefrom to repay a portion of the indebtedness incurred in
connection with the Loral Transaction.
AS OF MARCH 31, 1996
---------------------------------
PRO FORMA
ACTUAL PRO FORMA AS ADJUSTED
------- --------- -----------
(IN MILLIONS)
Short-term debt and current maturities of
long-term debt............................. $ 598 $ 1,230 $ 1,230
------- -------- -------
Long-term debt:
6.625% Notes Due 1998..................... -- -- 500
7.45% Notes Due 2004...................... -- -- 550
7.70% Notes Due 2008...................... -- -- 450
Other..................................... 3,003 11,860(a) 10,360(a)
------- -------- -------
Total long-term debt.................... 3,003 11,860 11,860
Stockholders' equity:
Series A preferred stock.................. 1,000 1,000 1,000
Common stock.............................. 199 199 199
Additional paid-in capital................ 711 711 711
Retained earnings......................... 5,025 5,025 5,025
Unearned ESOP shares...................... (279) (279) (279)
------- -------- -------
Total stockholders' equity.............. 6,656 6,656 6,656
------- -------- -------
Total capitalization........................ $10,257 $ 19,746 $19,746
======= ======== =======
- --------
(a) Includes debt securities issued in the Recent Financing and commercial
paper classified as long-term debt.
RATIO OF EARNINGS TO FIXED CHARGES
For the three months ended March 31, 1996, the unaudited ratio of earnings
to fixed charges and the ratio of earnings to combined fixed charges and
preferred stock dividends of the Corporation were 6.0 and 4.7, respectively.
On a pro forma basis, assuming the transactions contemplated by the Loral
Merger Agreement had occurred on January 1, 1996, the unaudited ratios of
earnings to fixed charges and earnings to combined fixed charges and preferred
stock dividends for the three months ended March 31, 1996, would have been 2.7
and 2.5, respectively.
For purposes of computing the ratio of earnings to fixed charges, earnings
represent earnings from continuing operations before income taxes plus
interest expense on indebtedness, amortization of debt discount and premium,
and the portion of rent expense deemed representative of an interest factor,
less undistributed earnings of unconsolidated subsidiaries. Fixed charges
include interest on indebtedness (whether expensed or capitalized),
amortization of debt discount and premium, and the portion of rent expense
deemed representative of an interest factor. Combined fixed charges and
preferred stock dividends include fixed charges as described above and
preferred stock dividends on a pretax basis.
S-4
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma combined condensed financial statements
have been prepared by the Corporation's management from the historical
consolidated financial statements of the Corporation and of Tactical Systems
(formerly Loral Corporation and Subsidiaries--Retained Business). The
unaudited pro forma combined condensed statement of earnings reflects
adjustments as if the Loral Transaction had occurred on January 1, 1995. The
unaudited pro forma combined condensed balance sheet reflects adjustments as
if the Loral Transaction had occurred on December 31, 1995. See "--Note 1--
Basis of Presentation." The unaudited pro forma adjustments described in the
accompanying notes are based upon preliminary estimates and certain
assumptions that management of the Corporation believes are reasonable in the
circumstances.
The unaudited pro forma combined condensed financial statements are not
necessarily indicative of financial position or results of operations that
would have resulted if the Loral Transaction had occurred on the applicable
dates indicated above. Moreover, they are not intended to be indicative of
future results of operations or financial position. The unaudited pro forma
combined condensed financial statements should be read in conjunction with the
historical consolidated financial statements of the Corporation and related
notes thereto, and the historical financial statements of Tactical Systems and
related notes thereto, both of which are incorporated by reference in the
Prospectus.
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENT OF EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1995
---------------------------------------------------
LOCKHEED TACTICAL RECLASS- PRO FORMA PRO FORMA
MARTIN SYSTEMS IFICATIONS ADJUSTMENTS COMBINED
-------- -------- ---------- ----------- ---------
(IN MILLIONS, EXCEPT PER SHARE DATA)
Net sales.................. $22,853 $6,179 $-- $(173)(e) $28,859
Cost and expenses
Cost of sales............ 20,881 5,494 30 (173)(e) 26,401
169 (f)
Merger related and
consolidation expenses.. 690 -- -- -- 690
------- ------ ---- ----- -------
Earnings from operations... 1,282 685 (30) (169) 1,768
Other income and expenses,
net....................... 95 12 -- -- 107
------- ------ ---- ----- -------
1,377 697 (30) (169) 1,875
Interest expense........... 288 118 -- 482 (g) 888
------- ------ ---- ----- -------
Earnings before income
taxes..................... 1,089 579 (30) (651) 987
Income tax expense......... 407 220 (30) (178)(h) 419
------- ------ ---- ----- -------
Net earnings............... $ 682 $ 359 $-- $(473) $ 568
======= ====== ==== ===== =======
Earnings per common share:
Assuming no dilution..... $ 3.28 N/A $ 2.69
======= ====== =======
Assuming full dilution... $ 3.05 N/A $ 2.55
======= ====== =======
S-5
UNAUDITED PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF DECEMBER 31, 1995
---------------------------------------------------------------
LOCKHEED TACTICAL PRO FORMA PRO FORMA
MARTIN SYSTEMS RECLASSIFICATIONS ADJUSTMENTS COMBINED
-------- -------- ----------------- ----------- ---------
(IN MILLIONS)
ASSETS
Current assets:
Cash and cash
equivalents.......... $ 653 $ 227 $ -- $ -- $ 880
Receivables........... 3,876 -- 1,053 -- 4,929
Inventories........... 2,804 -- 445 -- 3,249
Contracts in process.. -- 1,376 (1,376) -- --
Other current assets.. 844 296 (122) -- 1,018
------- ------ ------- ------- -------
Total current
assets............. 8,177 1,899 -- -- 10,076
Property, plant and
equipment.............. 3,165 1,287 -- -- 4,452
Intangible assets
related to contracts
and programs acquired.. 1,808 -- -- 700 (b) 2,508
Cost in excess of net
assets acquired........ 2,817 1,774 -- 5,725 (b) 10,316
Other assets............ 1,681 621 158 467 (b)(c) 2,927
------- ------ ------- ------- -------
$17,648 $5,581 $ 158 $ 6,892 $30,279
======= ====== ======= ======= =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Customer advances and
amounts in excess of
costs incurred....... $ 1,570 $ 446 $ -- $ -- $ 2,016
Debt (short-term and
current maturities).. 722 1 -- 621 (d) 1,344
Other current
liabilities.......... 2,999 750 -- 830 (b) 4,579
------- ------ ------- ------- -------
Total current
liabilities........ 5,291 1,197 -- 1,451 7,939
Long-term debt.......... 3,010 1,869 -- 7,000 (d) 11,879
Post-retirement benefit
liabilities............ 1,778 603 165 (107)(b) 2,439
Other liabilities....... 1,136 196 (7) 264 (b) 1,589
Stockholders' equity
Series A preferred
stock................ 1,000 -- -- -- 1,000
Common stock.......... 199 -- -- -- 199
Additional paid-in-
capital.............. 683 -- -- -- 683
Retained earnings..... 4,838 -- -- -- 4,838
Unearned ESOP shares.. (287) -- -- -- (287)
Net assets............ -- 1,716 -- (1,716)(b) --
------- ------ ------- ------- -------
Total stockholders'
equity............. 6,433 1,716 -- (1,716) 6,433
------- ------ ------- ------- -------
$17,648 $5,581 $ 158 $ 6,892 $30,279
======= ====== ======= ======= =======
See accompanying notes to unaudited pro forma combined condensed financial
statements.
S-6
NOTES TO UNAUDITED PRO FORMA
COMBINED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited pro forma combined condensed statement of
earnings presents the historical results of operations of the Corporation and
Tactical Systems for the year ended December 31, 1995, with pro forma
adjustments as if the Loral Transaction had occurred on January 1, 1995. The
unaudited pro forma combined condensed balance sheet presents the historical
balance sheets of the Corporation and Tactical Systems as of December 31,
1995, with pro forma adjustments as if the Loral Transaction had been
consummated as of December 31, 1995, in a transaction accounted for as a
purchase in accordance with generally accepted accounting principles.
Certain reclassifications have been made to the historical financial
statements of the Corporation and Tactical Systems to conform to the unaudited
pro forma combined condensed financial statement presentation.
2. PRO FORMA ADJUSTMENTS
The following adjustments are provided to reflect the Loral Transaction on a
pro forma basis (in millions):
(a) To record the consideration assumed to be exchanged for Tactical
Systems (financed by the issuance of debt):
Obligation for all of the Loral common shares....................... $6,884
Estimated transaction costs......................................... 125
------
$7,009
======
(b) To adjust the assets and liabilities of Tactical Systems to their
estimated fair values (such estimated fair values are subject to
possible adjustment from future valuation analyses):
Net assets of Tactical Systems at December 31, 1995................. $1,716
Fair value adjustments:
Intangible assets related to contracts and programs acquired...... 700
Prepaid pension assets............................................ (145)
Other current liabilities......................................... (830)
Post-retirement benefit liabilities............................... 107
Deferred income tax liabilities................................... (264)
Cost in excess of net assets acquired............................. 5,725
------
$7,009
======
(c) To record the Corporation's $612 million investment in Loral SpaceCom
financed by the issuance of debt.
(d) To record the assumed issuance of debt to finance the Loral
Transaction:
Long-term debt obligations.......................................... $7,000
Short-term debt obligations......................................... 621
------
$7,621
======
(e) To eliminate intercompany sales and cost of sales. No adjustments have
been made to eliminate the related intercompany profit in ending
inventories and the net intercompany receivables and payables at
December 31, 1995 as such amounts are not material.
S-7
(f) To record the amortization of estimated intangible assets related to
contracts and programs acquired (over an estimated life of 12 years)
and estimated cost in excess of net assets acquired (over an estimated
life of 40 years), net of the state income tax benefit on the net pro
forma adjustments.
(g) To record estimated interest expense (at a blended interest rate
approximating 6.3%) resulting from the assumed issuance of debt
obligations.
(h) To record the federal income tax effect, using a 35% statutory rate, on
the net pro forma adjustments.
The accompanying unaudited pro forma combined condensed financial statements
do not include the effects of any estimated transition or restructuring costs
which may be incurred in connection with integrating the operations of
Tactical Systems into the Corporation. It is not feasible at this time to
estimate these costs. Similarly, no effects for changes in costs related to
Tactical Systems employee pension and post-retirement benefits have been
included as such changes cannot be estimated at this time.
The unaudited pro forma combined condensed statement of earnings does not
reflect any net cost savings or economies of scale that management believes
would have been achieved had the Loral Transaction occurred on January 1,
1995.
3. COMPUTATION OF PRO FORMA EARNINGS PER SHARE
(In millions, except per share data)
FOR THE YEAR ENDED
DECEMBER 31, 1995
------------------
Assuming No Dilution
Net earnings........................................ $ 568
Less preferred stock dividends...................... 60
-----
Net earnings attributable to common stock........... $ 508
=====
Weighted average number of common shares
outstanding........................................ 189
=====
$2.69
=====
Assuming Full Dilution
Net earnings........................................ $ 568
=====
Weighted average number of common shares
outstanding........................................ 189
Assumed conversion of Series A Preferred Stock...... 29
Dilutive effect of stock options (Treasury stock
method)............................................ 5
-----
223
=====
$2.55
=====
S-8
SELECTED CONSOLIDATED FINANCIAL INFORMATION
Lockheed Martin Corporation
The selected historical financial information as of and for the years ended
December 31, 1995, 1994 and 1993 presented below has been derived from the
Corporation's audited consolidated financial statements incorporated by
reference in the Prospectus. The selected historical financial information as
of and for the three months ended March 31, 1996 and 1995 has been derived
from the Corporation's unaudited financial statements incorporated by
reference in the Prospectus and, in the opinion of the Corporation's
management, includes all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of its financial position, results of
operations and cash flows. The information is qualified in its entirety by,
and should be read in conjunction with, those consolidated financial
statements and related footnotes thereto.
THREE MONTHS ENDED
MARCH 31, YEAR ENDED DECEMBER 31,
------------------- -----------------------
1996 1995 1995 1994 1993
--------- --------- ------- ------- -------
(IN MILLIONS, EXCEPT
PER SHARE AMOUNTS)
INCOME STATEMENT DATA:
Net sales
Space & Strategic Missiles...... $ 1,670 $ 1,852 $ 7,521 $ 6,719 $ 7,293
Aeronautics..................... 1,299 1,768 6,617 7,091 6,601
Information & Technology
Services....................... 1,093 1,035 4,528 4,271 3,712
Electronics..................... 867 810 3,294 4,055 4,092
Energy, Materials and Other
(a)............................ 180 179 893 770 699
--------- --------- ------- ------- -------
Total.......................... $ 5,109 $ 5,644 $22,853 $22,906 $22,397
========= ========= ======= ======= =======
Operating profit
Space & Strategic Missiles...... $ 226 $ 181 $ 431 $ 476 $ 507
Aeronautics..................... 108 140 394 511 479
Information & Technology
Services....................... 51 47 269 228 145
Electronics..................... 94 89 261 456 331
Energy, Materials and Other
(a)............................ 23 (145) 22 308 122
--------- --------- ------- ------- -------
Total.......................... $ 502 $ 312 $ 1,377 $ 1,979 $ 1,584
========= ========= ======= ======= =======
Net earnings..................... $ 272 $ 137 $ 682 $ 1,018 $ 829
Earnings per common share,
assuming full dilution.......... $ 1.22 $ .62 $ 3.05 $ 4.66 $ 3.75
CASH FLOW DATA:
Depreciation and amortization.... $ 214 $ 222 $ 921 $ 937 $ 936
Expenditures for property, plant
and equipment................... 123 127 531 509 536
Dividends on common and preferred
stock........................... 85 70 314 274 260
AS OF
AS OF DECEMBER 31,
MARCH 31, ---------------
1996 1995 1994
--------- ------- -------
(IN MILLIONS)
BALANCE SHEET DATA:
Cash and cash equivalents.......................... $ 156 $ 653 $ 639
Total assets....................................... 17,682 17,648 18,049
Total debt......................................... 3,601 3,732 3,879
Stockholders' equity............................... 6,656 6,433 6,086
- --------
(a) Includes Energy and Environment Sector, Materials and businesses not
included in the other business segments.
S-9
Lockheed Martin Tactical Systems, Inc.
The selected financial information as of and for the fiscal years ended
March 31, 1996, 1995 and 1994 presented below has been derived from Tactical
Systems' audited consolidated financial statements incorporated by reference
in the Prospectus. The information is qualified in its entirety by, and should
be read in conjunction with, those consolidated financial statements and
related footnotes thereto.
YEAR ENDED
MARCH 31,
--------------------
1996 1995 1994
------ ------ ------
(IN MILLIONS)
INCOME STATEMENT DATA:
Sales................................................... $6,123 $5,484 $4,009
Operating income........................................ 737 565 401
Net income.............................................. 384 296 232
CASH FLOW DATA:
Depreciation and amortization........................... $ 267 $ 250 $ 178
Capital expenditures.................................... 117 123 103
AS OF
MARCH 31,
-------------
1996 1995
------ ------
(IN MILLIONS)
BALANCE SHEET DATA:
Cash and cash equivalents...................................... $ 277 $ 126
Total assets................................................... 5,983 4,558
Total debt..................................................... 1,868 1,316
Net assets..................................................... 1,769 1,435
S-10
BUSINESS OF THE CORPORATION
The Corporation is a diversified enterprise principally engaged in the
conception, research, development, design, manufacture and integration of
advanced technology products and services. Prior to the consummation of the
Loral Transaction, the Corporation conducted its principal business through
five major operating sectors: Space & Strategic Missiles; Aeronautics;
Information & Technology Services; Electronics; and Energy & Environment.
Space & Strategic Missiles Sector
The Space & Strategic Missiles Sector's activities include the design,
development, engineering and production of civil, commercial and military
space systems, including spacecraft, space launch vehicles and supporting
ground systems and services; satellites; strategic fleet ballistic missiles;
tactical missile systems electronics and instrumentation; remote sensing
technology; space- and ground-based strategic systems; and surface- and space-
based information and communications systems.
Major programs of the Space & Strategic Missiles Sector include the Titan IV
expendable launch vehicle, the Trident II submarine launched fleet ballistic
missile, the Atlas expendable launch vehicle and the production of various
government and commercial satellites including environmental monitoring
satellites, military and civilian communications satellites and the THAAD
ground-based theater air defense system. Through the Space & Strategic
Missiles Sector, the Corporation is also involved in a partnership with
Russian aerospace firms with world-wide rights to Russia's Proton rocket. The
Space & Strategic Missiles Sector is also engaged in a substantial amount of
classified activities.
Aeronautics Sector
The Aeronautics Sector is involved in the design, development, engineering
and production of fighter, bomber, special mission, airlift, antisubmarine
warfare, reconnaissance and surveillance and high performance aircraft;
systems for military operations; aircraft controls and subsystems; thrust
reversers and shipboard vertical launching systems; and aircraft modification
and maintenance and logistics for military and civilian customers.
The Corporation is the prime contractor on the F-16 "Fighting Falcon"
fighter aircraft and on the Air Force's F-22 air superiority fighter program
and produces the C-130 series military airlift aircraft. The Corporation is
also involved in upgrading aircraft, including the U-2 and SR-71
reconnaissance aircraft, the F-117 fighter bomber and the C130J military
airlift aircraft, and designs, produces and supports missile launching systems
such as the Vertical Launching System for the U.S. Navy and international
customers. Activity in the commercial aircraft business continues in the areas
of maintenance and modifications through the Corporation's Aircraft Services
Company and production of thrust reversers for commercial jet engines. Through
the Skunk Works, the Aeronautics Sector performs a substantial amount of
classified work.
Information & Technology Services Sector
The Information & Technology Services Sector is involved in the development
and operation of large, complex information systems; designing, manufacturing
and marketing computer graphics products; developing and manufacturing high
capacity data storage products; electronics manufacturing services; and
providing advanced transportation systems and services, and payload
integration, astronaut training and flight operations support.
The Corporation's CalComp, Access Graphics and MountainGate businesses are
involved in commercial markets for computer graphics, hardware distribution
and data storage devices. The Corporation's Commercial Electronics Company
provides electronics contract manufacturing services for companies in the
computer, telecommunications and medical instruments industries and also is a
leading provider of electronic toll collection services and office automation
services. The Corporation also performs processing services for NASA's space
S-11
shuttle program and produces the Space Shuttle's external tank, provides
engineering and test analysis services to NASA and operates the Knolls Atomic
Power Laboratory, a government-owned research and development facility of the
U.S. Naval Nuclear Propulsion Program.
Electronics Sector
The Electronics Sector's activities primarily relate to the design,
development, engineering and production of high performance electronic systems
for undersea, shipboard, land-based and airborne applications. Major product
lines include advanced technology missiles, night navigation and targeting
systems for aircraft; submarine and surface ship combat systems; airborne,
ship and land-based radar; radio frequency, infrared, and electro-optical
countermeasure systems; surveillance systems; control systems; ordnance; and
aircraft component manufacturing and assembly.
The Corporation is the prime contractor for the U.S. Navy's AEGIS fleet air
defense system and the primary contractor for the AN/BSY-2 submarine combat
system for the Seawolf attack submarine. The Electronics Sector also produces
the Target Acquisition Designation Sight/Pilot Night Vision Sensor
(TADS/PNVS), the Hellfire II antitank missile and the Trident II Submarine
Program's fire control and guidance systems.
Energy & Environment Sector
The Energy & Environment Sector is responsible for the Corporation's energy
and environmental businesses, including the management of various U.S.
Department of Energy (DoE) activities. The Corporation is the largest
management and operations contractor within the DoE's system of laboratories
and other facilities and manages, among other facilities, the Sandia National
Laboratories, the Idaho National Engineering Laboratory and the Oak Ridge
National Laboratory.
Other
On February 24, 1994, an initial public offering of the common stock of
Martin Marietta Materials, Inc. ("Materials") was consummated and 8,797,500
shares of common stock (representing approximately 19% of the shares
outstanding) were sold. Materials carries on its operations through two
divisions, Aggregates and Magnesia Specialties. The Aggregates division is the
United States' second largest producer of aggregates for the construction of
highways and other infrastructure projects and for the commercial and
residential construction industries. Through its Magnesia Specialties
Division, Materials manufactures and markets magnesia-based products,
including refractory products for the steel industry and chemical products for
industrial, environmental and agricultural uses.
In addition to the above activities, the Corporation also has real estate
subsidiaries in Florida and Maryland, operates research laboratories and
carries on other miscellaneous activities.
S-12
The Corporation's total negotiated backlog at December 31, 1995, was $41.1
billion, which included both unfilled firm orders for the Corporation's
products for which funding has been both authorized and appropriated by the
customer (Congress, in the case of the United States Government customers) and
firm orders for which funding has not been appropriated. The following table
shows total backlog by business segment at the end of each of the last three
years:
DECEMBER 31,
-----------------------
1995 1994 1993
------- ------- -------
(IN MILLIONS)
Space & Strategic Missiles............................. $16,261 $15,920 $14,052
Aeronautics............................................ 14,775 16,146 19,822
Information & Technology Services...................... 4,669 4,855 5,526
Electronics............................................ 5,412 5,238 6,087
Energy, Materials and Other(a)......................... 8 73 23
------- ------- -------
$41,125 $42,232 $45,510
======= ======= =======
- --------
(a)Includes Energy and Environment Sector, Materials and businesses not
included in the other business segments.
The Corporation is engaged in a number of classified programs that cannot be
referred to specifically, but are included in its consolidated financial
statements. The nature of and business risks associated with classified
programs do not differ materially from those of the Corporation's other
government programs and products.
Approximately 69% of the Corporation's sales in 1995, excluding foreign
military sales, were to the United States government. During that period,
sales to foreign governments, including sales made through the United States
government, accounted for approximately 13% of revenues and sales to
commercial customers accounted for approximately 18% of revenues.
BUSINESS OF TACTICAL SYSTEMS
The businesses acquired by the Corporation in connection with the
consummation of the transactions contemplated by the Loral Merger Agreement
now constitute the sixth operating sector of the Corporation, Tactical
Systems. Tactical Systems' business consists primarily of electronic combat;
command, control, communications and intelligence ("C/3/I") and
reconnaissance; training and simulation; tactical weapons; systems
integration; and space businesses. Tactical Systems supplies electronic
systems, components and services to the United States Government and foreign
governments for defense and non-defense applications.
Electronic Combat Business
The Electronic Combat business produces the ALR/ALQ family of radar warning
receivers; electronic countermeasures (radar jamming) equipment; forward
looking radar; missile defense systems; and provides systems integration for
the Merlin and LAMPS helicopters. These products have applications in major
defense systems for primary tactical aircraft, and provide force multiplying
protection, countermeasure and precision targeting/tracking equipment required
for smaller military force size and upgrades. In general, the systems produced
by the Electronic Combat business protect United States and allied aircraft
and provide anti-submarine and anti-surface warfare, airborne early warning
and electronic support measure capabilities.
Command, Control, Communications and Intelligence and Reconnaissance Business
The C/3/I and Reconnaissance business offers systems integration, operations
management and engineering services, post deployment systems support, military
satellite communication terminals, information processing and display
hardware, information management software, and secured tactical communications
instruments to
S-13
address a broad spectrum of strategic and tactical C/3/I requirements. The
services and products provided by the C/3/I and Reconnaissance business
include engineering support, systems integration, and operations/maintenance
for the United States Air Force satellite control network; software and
hardware support for the Air Force's global positioning system; aircraft
displays; and synthetic aperture radar systems. These products and services
have application in the areas of communications and force control equipment
allowing command centers to monitor and process real-time troop movement and
improving effectiveness and reducing casualties of reduced military forces.
Training and Simulation Business
The Training and Simulation business provides simulated, realistic
battlefield synthetic environments that assist air, land and sea military
forces in order to achieve and maintain combat readiness and to aid in the
establishment and validation of military requirements for new systems and
their upgrades. The Training and Simulation business produces weapons systems
simulators and distributed interactive simulators, including force-to-force
combat training systems, full-fidelity cockpit and weapons systems trainers,
laser guided training missiles, and support services for weapons platforms.
These products have applications in maintaining and improving the readiness
and effectiveness of smaller military forces, and improving the abilities of
allied military forces through cost-efficient computer simulation. The
operational flight and weapons systems trainers produced by Tactical Systems
simulate the United States Navy's F-15 and F-15E jet aircraft avionics under
combat conditions.
Tactical Weapons Business
The Tactical Weapons business produces a variety of weaponry products, such
as the Multiple-Launch Rocket System (MLRS) for the United States Army and
allied forces; the Army Tactical Missile System (ATACMS), and the Patriot
Advanced Capability Missile (PACIII) formerly known as the Extended Range
Interceptor (ERINT). These products and systems provide essential troop and
firepower support capabilities and precision extended-strike capabilities with
smart weapons. The Tactical Weapons business also offers guidance programs,
including the Digital Scene Matching Area Correlation (DSMAC) System and
produces the Sidewinder air-to-air missile, the AIM-9M and the AIM-9P.
Systems Integration Business
The Systems Integration business focuses on integrating complex hardware and
software systems for the United States Department of Defense, as well as a
broad range of federal and foreign government organizations, including the
Federal Aviation Administration, the United States Department of Commerce, the
United States Department of Justice, the Internal Revenue Service, the United
States Postal Service and the United Kingdom's Civil Aviation Authority.
The Systems Integration business also includes network and data base systems
for the NEXRAD weather-detection system for the National Oceanic and
Atmospheric Administration, which is being designed to make critical Doppler
radar data continuously available throughout the United States. This business
also produces a medical diagnostic imaging system, involving the
implementation of high-volume data storage and retrieval technologies into the
medical marketplace for the Department of Defense, Veterans Administration,
university medical centers or other private health care facilities.
Space Business
The Space business provides engineering services supporting mission control
systems for NASA's manned and unmanned space flight, and develops and produces
computers, scientific instruments, sensors, cameras and power systems for
spacecraft. The Space business also performs Safety Reliability and Quality
Assurance testing for NASA's Space Shuttle and International Space Station
programs, and is involved in designing, developing and integrating various
other space systems.
S-14
Other
Tactical Systems also is engaged in a number of classified programs that
cannot be referred to specifically, but are included in its consolidated
financial statements. The nature of and business risks associated with
classified programs do not differ materially from those of Tactical Systems'
other government programs and products.
DESCRIPTION OF OFFERED DEBT SECURITIES
The following description of the particular terms of the Offered Debt
Securities supplements and, to the extent inconsistent therewith, supersedes,
insofar as such description relates to the Offered Debt Securities, the
description of the Debt Securities set forth in the Prospectus, to which
description reference is hereby made. Capitalized terms not otherwise defined
herein shall have the meanings given to them in the Prospectus or the
Indenture.
The Offered Debt Securities are unsecured and unsubordinated obligations of
the Corporation and will rank pari passu with all other unsecured and
unsubordinated indebtedness of the Corporation. The Guarantees are unsecured
and unsubordinated obligations of Tactical Systems and will rank pari passu
with all other unsecured and unsubordinated indebtedness of Tactical Systems.
The 6.625% Notes Due 1998, the 7.45% Notes Due 2004 and the 7.70% Notes Due
2008 will mature on June 15, 1998, June 15, 2004 and June 15, 2008,
respectively. The Offered Debt Securities will bear interest at the rates per
annum shown on the cover page of this Prospectus Supplement. Interest on the
6.625% Notes Due 1998, the 7.45% Notes Due 2004 and the 7.70% Notes Due 2008
will be payable semi-annually on June 15 and December 15 of each year (each a
"Note Interest Payment Date") commencing December 15, 1996, to the person for
whose account the Offered Debt Securities (or any predecessor Offered Debt
Securities) are held at the close of business on the June 1 and December 1, as
the case may be, next preceding such Note Interest Payment Date. Interest on
the Offered Debt Securities will be computed on the basis of a 360-day year of
twelve 30-day months.
MANDATORY REDEMPTION, SINKING FUND
The Offered Debt Securities will not be redeemable by the Corporation prior
to their maturity and will not be entitled to the benefit of a sinking fund.
DEFEASANCE
The provisions of the Indenture relating to defeasance and covenant
defeasance described under the caption "Description of Debt Securities--
Defeasance" in the Prospectus shall apply to the Offered Debt Securities.
BOOK-ENTRY SECURITIES
The Offered Debt Securities will be issued in the form of global securities.
The Global Securities will be deposited with, or on behalf of DTC (the
"Depositary"), and registered in the name of the Depositary or a nominee
thereof. Unless and until it is exchanged in whole or in part for Offered Debt
Securities in definitive form, no Offered Debt Security may be transferred
except as a whole by the Depositary to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor of such
Depositary or a nominee of such successor.
The Depositary has advised the Corporation as follows: The Depositary is a
limited purpose trust company organized under the New York Banking Law, a
"banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934, as amended. The Depositary was created to hold
securities of its participants and to facilitate the clearance and settlement
of securities transactions among its participants in such securities through
electronic book-entry changes in participants' accounts thereby eliminating
the need for
S-15
physical movement of securities certificates. The Depositary's participants
include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations, some of whom (and/or their
representatives) own the Depositary. Access to the Depositary's book-entry
system is also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, either directly or indirectly. The rules applicable to the
Depositary are on file with the Securities and Exchange Commission.
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated June 21, 1996 (the "Underwriting Agreement") and a Pricing
Agreement dated June 21, 1996 (the "Pricing Agreement"), the Underwriters
named below (the "Underwriters") have severally but not jointly agreed to
purchase from the Corporation the following respective principal amounts of
the Offered Debt Securities:
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT OF AMOUNT OF AMOUNT OF
6.625% NOTES 7.45% NOTES 7.70% NOTES
UNDERWRITER DUE 1998 DUE 2004 DUE 2008
----------- ------------ ------------ ------------
CS First Boston Corporation............ $100,000,000 $110,000,000 $ 90,000,000
Bear, Stearns & Co. Inc. .............. 100,000,000 110,000,000 90,000,000
Goldman, Sachs & Co. .................. 100,000,000 110,000,000 90,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.......................... 100,000,000 110,000,000 90,000,000
Morgan Stanley & Co. Incorporated...... 100,000,000 110,000,000 90,000,000
------------ ------------ ------------
$500,000,000 $550,000,000 $450,000,000
============ ============ ============
The Underwriting Agreement and Pricing Agreement provide that the
obligations of the Underwriters are subject to certain conditions precedent
and that the Underwriters will be obligated to purchase all the Offered Debt
Securities if any are purchased. The Underwriting Agreement provides that, in
the event of a default by an Underwriter, in certain circumstances the
purchase commitments of non-defaulting Underwriters may be increased or the
Underwriting Agreement may be terminated.
The Corporation has been advised by the Underwriters that the Underwriters
propose to offer the Offered Debt Securities to the public initially at the
public offering price set forth on the cover page of this Prospectus
Supplement and to certain dealers at such price less a concession of .20% of
the principal amount of the 6.625% Notes Due 1998, .375% of the principal
amount of the 7.45% Notes Due 2004 and .40% of the principal amount of the
7.70% Notes Due 2008, and the Underwriters and such dealers may allow a
discount of .125% of the principal amount of the 6.625% Notes Due 1998, .25%
of the principal amount of the 7.45% Notes Due 2004 and .25% of the principal
amount of the 7.70% Notes Due 2008 on sales to certain other dealers. After
the initial public offering, the public offering prices and concessions and
discounts to dealers may be changed by the Underwriters.
The Offered Debt Securities are new issues of securities with no established
trading market. The Underwriters have advised the Corporation that they intend
to act as market makers for the Offered Debt Securities. However, the
Underwriters are not obligated to do so and may discontinue any market making
at any time without notice. No assurance can be given as to the liquidity of
the trading market for the Offered Debt Securities. The Offered Debt
Securities will not be listed on any national securities exchange.
S-16
The Corporation intends to use more than 10% of the net proceeds from the
sale of the Offered Debt Securities to repay outstanding commercial paper. CS
First Boston Corporation and affiliates of Goldman, Sachs & Co. and Merrill
Lynch & Co. are primary dealers of the Corporation's commercial paper and are
affiliated with members of the National Association of Securities Dealers,
Inc. (the "NASD") who will participate in the offering of the Offered Debt
Securities as underwriters. Accordingly, the offering is being made in
compliance with the requirements of Section 44(c)(8) of Article III of the
Rules of Fair Practice of the NASD.
The Corporation and the Guarantor have agreed to indemnify the Underwriters
against certain liabilities, including certain civil liabilities under the
Securities Act, or to contribute to certain payments that the Underwriters may
be required to make in respect thereof.
From time to time, the Underwriters have provided various investment banking
and other services to the Corporation for which they have received customary
compensation.
VALIDITY OF OFFERED DEBT SECURITIES
The validity of the Offered Debt Securities will be passed on for the
Corporation by Miles & Stockbridge, a Professional Corporation, Baltimore,
Maryland. The validity of the Guarantees relating to the Offered Debt
Securities will be passed on for Tactical Systems by William J. LaSalle, Vice
President and General Counsel of the Corporation's Tactical Systems Sector.
Certain legal matters will be passed on for the Underwriters by Cravath,
Swaine & Moore, New York, New York.
EXPERTS
The consolidated balance sheets of Loral Corporation and Subsidiaries--
Retained Business as of March 31, 1996 and 1995 and the related consolidated
statements of operations, changes in net assets and cash flows for each of the
three years in the period ended March 31, 1996, included in the Corporation's
Current Report on Form 8-K filed with the Commission on June 18, 1996, which
are incorporated herein by reference, have been audited by Coopers & Lybrand
L.L.P., independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated financial
statements of Loral Corporation and Subsidiaries--Retained Business are
incorporated herein by reference in reliance upon the report of Coopers &
Lybrand L.L.P. given upon the authority of said firm as experts in accounting
and auditing.
S-17
PROSPECTUS
$5,000,000,000
LOCKHEED MARTIN CORPORATION
DEBT SECURITIES
GUARANTEED BY
LOCKHEED MARTIN TACTICAL SYSTEMS, INC.
----------------
Lockheed Martin Corporation (the "Corporation") from time to time may offer
debt securities in one or more series (the "Debt Securities"), which Debt
Securities may consist of debentures, notes or other evidences of
indebtedness, in an amount sufficient to result in an aggregate initial
offering price not to exceed $5,000,000,000 (or the equivalent in foreign
denominated currency or units based on or relating to currencies, including
European Currency Units). The Debt Securities may be offered as separate
series in amounts, at prices, and on terms to be determined by market
conditions at the time of sale. The Debt Securities may be issued in
registered form without coupons. All or a portion of the Debt Securities may
be evidenced by a Global Security or Global Securities. The Debt Securities
will be fully and unconditionally guaranteed by Lockheed Martin Tactical
Systems, Inc., a wholly owned subsidiary of the Corporation ("Tactical
Systems" or the "Guarantor"). The guarantees of Tactical Systems in respect of
the Debt Securities are herein referred to as the "Guarantees." The Debt
Securities and the Guarantees will be unsecured obligations of the Corporation
and Tactical Systems, respectively.
The accompanying Prospectus Supplement sets forth with regard to the Debt
Securities in respect of which this Prospectus is being delivered the title,
aggregate principal amount, denominations (which may be in United States
dollars, in any other currency or in units based on or relating to currencies,
including European Currency Units), maturity, rate (which may be fixed or
variable) and time of payment of any interest, any terms for redemption at the
option of the Corporation or the holder, any terms for sinking fund payments,
any listing on a securities exchange, the initial public offering price and
any other terms in connection with the offering and sale of the Debt
Securities or a series of the Debt Securities.
The Corporation may sell Debt Securities to or through underwriters or
dealers, and also may sell Debt Securities directly to other purchasers or
through agents. If underwriters are used in the sale, the Debt Securities may
be offered to the public either through underwriting syndicates represented by
one or more managing underwriters or directly by one or more of such firms.
See "Plan of Distribution." The accompanying Prospectus Supplement sets forth
the names of any underwriters, dealers or agents involved in the sale of the
Debt Securities in respect of which this Prospectus is being delivered, the
principal amounts, if any, to be purchased by underwriters or dealers, and the
compensation, if any, of those underwriters, dealers or agents. The net
proceeds to the Corporation from the sale of the Debt Securities in respect of
which this Prospectus is being delivered are set forth in the Prospectus
Supplement. See "Plan of Distribution" for possible indemnification
arrangements for underwriters, dealers and agents.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is May 10, 1996.
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR IN AN APPLICABLE PROSPECTUS SUPPLEMENT IN
CONNECTION WITH ANY OFFER MADE BY THIS PROSPECTUS AND SUCH PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR ANY
UNDERWRITER, DEALER, AGENT OR OTHER PERSON. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF OR
THEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT
DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024, 450 5th
Street, N.W., Washington, D.C. 20549, and at the following regional offices of
the Commission: New York Office, Seven World Trade Center, 13th Floor, New
York, New York 10048; and Chicago Office, Citicorp Center, Suite 1400, 500
West Madison Street, Chicago, Illinois 60661. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 5th
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, such
reports, proxy statements and other information can be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005. Tactical Systems comprises the portion of Loral Corporation that
the Corporation acquired on April 23, 1996, and is the successor by name
change to Loral Corporation. It is not anticipated that Tactical Systems will
continue to file reports, proxy statements and other information with the
Commission under the Exchange Act. In the event that Tactical Systems does not
file reports, proxy statements and other information with the Commission under
the Exchange Act, summarized financial information in respect of Tactical
Systems may be included in the footnotes to the audited consolidated financial
statements of the Corporation included in the Corporation's Annual Reports on
Form 10-K filed pursuant to Section 13 of the Exchange Act.
The Corporation and Tactical Systems have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments, documents
incorporated by reference and exhibits, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), with respect to
the Debt Securities and the Guarantees offered hereby. This Prospectus and the
Prospectus Supplement, which constitute a part of the Registration Statement,
do not contain all the information set forth in the Registration Statement,
certain parts of which are contained in exhibits to the Registration Statement
or otherwise have been omitted in accordance with the rules and regulations of
the Commission. For further information, reference is made to the Registration
Statement and to the documents incorporated therein by reference. Copies of
the Registration Statement are on file at the offices of the Commission and
may be obtained upon payment of the fees prescribed by the Commission, or
examined without charge at the public reference facilities of the Commission
described above.
2
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Corporation's Annual Report on Form 10-K for the year ended December 31,
1995, and Current Reports on Form 8-K filed with the Commission on January 12,
1996, April 5, 1996, and May 2, 1996 (as amended on May 8, 1996), are
incorporated by reference herein and made a part hereof. All documents filed
by the Corporation and Tactical Systems with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the termination of the offering of the Debt
Securities shall be deemed to be incorporated by reference and to be a part of
this Prospectus from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such a statement. A statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
The Corporation will provide, without charge, to each person to whom this
Prospectus is delivered, upon written or oral request, a copy of any and all
of the documents incorporated herein by reference other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference in
such documents). Requests should be directed to Lockheed Martin Corporation,
6801 Rockledge Drive, Bethesda, Maryland 20817, Attention: Corporate
Secretary, (301) 897-6000.
3
THE CORPORATION
The Corporation, which was incorporated in Maryland on August 29, 1994, to
effect the combination of the businesses of Martin Marietta Corporation and
Lockheed Corporation, is a diversified enterprise principally engaged in the
conception, research, development, design, manufacture and integration of
advanced technology products and services. The Corporation conducts its
principal business through six major operating sectors: Space & Strategic
Missiles; Aeronautics; Information & Technology Services; Electronics; Energy
& Environment; and Tactical Systems. The Tactical Systems Sector consists of
the businesses acquired by the Corporation on April 23, 1996, in connection
with the acquisition of Loral Corporation.
The Corporation's and Tactical Systems' principal executive offices are
located at 6801 Rockledge Drive, Bethesda, Maryland 20817. The telephone
number of the Corporation and Tactical Systems is (301) 897-6000.
USE OF PROCEEDS
Except as otherwise stated in the Prospectus Supplement in respect of which
this Prospectus is being delivered, the net proceeds from the sale of the Debt
Securities offered by the Corporation will be added to the general funds of
the Corporation and will be available to repay debt incurred in connection
with the acquisition of Tactical Systems and for the general corporate
purposes of the Corporation and its subsidiaries, which may include but are
not limited to working capital, capital expenditures, consolidation expenses,
business acquisitions and the refinancing of indebtedness.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges and
the ratio of earnings to combined fixed charges and preferred stock dividends
for each of the last five fiscal years.
YEAR ENDED DECEMBER 31
------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
(UNAUDITED)
Ratio of earnings to fixed charges..................... 4.2 5.6 4.8 5.3 4.6
Ratio of earnings to combined fixed charges and
preferred stock dividends(a).......................... 3.3 4.4 4.0 5.3 4.6
- --------
(a) Shares of preferred stock were issued on April 2, 1993. Prior to that date
no shares of preferred stock were outstanding.
On a pro forma basis, assuming the transactions contemplated by the Loral
Merger Agreement had occurred on January 1, 1995, the unaudited ratios of
earnings to fixed charges and earnings to combined fixed charges and preferred
stock dividends for the year ended December 31, 1995, would have been 2.0 and
1.8, respectively.
For purposes of computing the ratio of earnings to fixed charges, earnings
represent earnings from continuing operations before income taxes plus
interest expense on indebtedness, amortization of debt discount and premium,
and the portion of rent expense deemed representative of an interest factor,
less undistributed earnings of unconsolidated subsidiaries. Fixed charges
include interest on indebtedness (whether expensed or capitalized),
amortization of debt discount and premium, and the portion of rent expense
deemed representative of an interest factor. Combined fixed charges and
preferred stock dividends include fixed charges as described above and
preferred stock dividends on a pretax basis.
4
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain general
terms and provisions of the Debt Securities and the Guarantees to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement (the "Offered Debt Securities"),
including the nature of any variation from the following general provisions
applicable to the Offered Debt Securities, will be described in the Prospectus
Supplement relating to the Offered Debt Securities.
The Offered Debt Securities are to be issued in one or more series under an
indenture (the "Indenture") between the Corporation, Tactical Systems, as
Guarantor, and First Trust of Illinois, National Association, as Trustee (the
"Trustee"), a copy of which is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all provisions of the Indenture, including
definitions of certain terms. Provisions of or defined terms in the Indenture
that are used in this Prospectus are incorporated by reference.
GENERAL
The Indenture does not limit the aggregate principal amount of debentures,
notes or other evidences of indebtedness that may be issued thereunder and
provides that Debt Securities may be issued in one or more series in an
aggregate principal amount which may be authorized from time to time by the
Corporation. The Debt Securities will be unsecured obligations of the
Corporation and will rank equally with all other unsecured and unsubordinated
indebtedness of the Corporation. Payment of principal of (premium, if any) and
interest, if any, on the Debt Securities will be guaranteed by Tactical
Systems. See "Description of Debt Securities--Guaranties." The Guarantor also
is guarantor of the Corporation's obligations under the principal revolving
credit facilities of the Corporation.
Reference is made to the Prospectus Supplement for the following terms of
the Offered Debt Securities: (1) the title of the Offered Debt Securities; (2)
the price (expressed as a percentage of the aggregate principal amount
thereof) at which the Offered Debt Securities will be issued; (3) any limit on
the aggregate principal amount of the Offered Debt Securities or the series of
which the Offered Debt Securities are a part; (4) the date or dates (or manner
of determining the same) on which the Offered Debt Securities will mature; (5)
the rate or rates (which may be fixed or variable) per annum (or the method or
methods by which such rate or rates will be determined) at which the Offered
Debt Securities will bear interest, if any, and the date or dates from which
such interest will accrue; (6) the date or dates on which interest, if any,
will be payable and the record dates for such interest payment dates; (7) if
the trustee in respect of the Offered Debt Securities is other than the
Trustee (or any successor thereto), the identity of the trustee; (8) the place
or places where the principal of (and premium, if any) and interest, if any,
on the Offered Debt Securities will be payable and each office or agency where
the Offered Debt Securities may be presented for transfer or exchange; (9) any
mandatory or optional sinking fund or purchase fund or similar provision and
the terms and conditions thereof; (10) any provisions relating to the date
after which, the circumstances under which, the price or prices at which, and
the currency or currency unit in which, the Offered Debt Securities may,
pursuant to any optional or mandatory redemption or conversion provisions, be
redeemed or converted at the option of the Corporation or of the Holder and
certain other terms and provisions of such optional or mandatory redemption or
conversion; (11) if the Offered Debt Securities are denominated in other than
United States dollars, the currency or currencies (including composite
currencies) in which the Offered Debt Securities are denominated; (12) the
index, if any, used to determine the amount of payments of principal of (and
premium, if any) or interest, if any, on the Offered Debt Securities; (13) if
payments of principal (and premium, if any) or interest, if any, in respect of
the Offered Debt Securities are to be made in a currency other than United
States dollars or the amount of such payments are to be determined with
reference to an index based on a currency or currencies other than that in
which the Offered Debt Securities are denominated, the currency or currencies
(including composite currencies) in which such payments are to be made, or the
manner in which such amounts are to be determined, respectively; (14) if the
amount payable upon acceleration of the Offered Debt Securities is other than
the full principal amount, the portion of the principal amount payable upon
acceleration; (15) any provisions relating to the conversion of Offered Debt
Securities into
5
Debt Securities of another series; (16) any provisions restricting defeasance
of the Offered Debt Securities; (17) if any additional or special events of
default are applicable to the Offered Debt Securities, the terms and
conditions of such events of default; (18) if the Offered Debt Securities will
be issued, in whole or in part, in the form of one or more temporary or
permanent Global Securities, the identity of the depositary for such Global
Securities and certain other terms and conditions relating to the Global
Securities; and (19) any other terms of the Offered Debt Securities and the
Guarantees not inconsistent with the provisions of the Indenture.
Unless otherwise indicated in the Prospectus Supplement in respect of which
this Prospectus is being delivered, principal of (and premium, if any) and
interest, if any, on the Offered Debt Securities (other than Offered Debt
Securities issued as Global Securities) will be payable, and the Offered Debt
Securities (other than Offered Debt Securities issued as Global Securities)
will be exchangeable and transfers thereof will be registrable, at the office
of the Trustee and at any other office maintained from time to time by the
Corporation for such purpose, provided that, at the option of the Corporation,
payment of interest may be made by check mailed to the address of the holder
as it appears in the register of the Offered Debt Securities.
Unless otherwise indicated in the Prospectus Supplement relating thereto,
the Offered Debt Securities will be issued only in fully registered form,
without coupons, in denominations of $1,000 or any integral multiple thereof.
For certain information about Debt Securities issued in global form, see
"Description of Debt Securities--Global Securities." The Corporation may
charge a reasonable fee for any transfer or exchange of the Offered Debt
Securities and may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Debt Securities bearing no interest or interest at a rate that at the time
of issuance is below the prevailing market rate will be sold at a discount
below their stated principal amount. One or more series of Debt Securities may
be floating rate Debt Securities, exchangeable for fixed rate Debt Securities.
Special United States federal income tax considerations applicable to any such
discounted or floating rate Debt Securities or to certain Debt Securities
issued at par which are treated as having been issued at a discount for United
States federal income tax purposes will be described in the Prospectus
Supplement in respect of which this Prospectus is being delivered, if
applicable.
Debt Securities may be issued, from time to time, with the principal amount
(and premium, if any) payable on the applicable principal payment date, or the
amount of interest, if any, payable on the applicable interest payment date,
to be determined by reference to one or more currency exchange rates,
commodity prices, equity indices or other factors. In such cases, Holders may
receive a principal amount (and premium, if any) on any principal payment
date, or a payment of interest, if any, on any interest payment date, that is
greater than or less than the amount of principal (and premium, if any) or
interest, if any, payable on such dates, depending upon the value on such
dates of the applicable currency, commodity, equity index or other factor.
Information as to the methods for determining the amount of principal (and
premium, if any) or interest, if any, payable on any date, the currencies,
commodities, equity indices or the other factors to which the amount payable
on such date is linked and certain additional tax considerations applicable to
the Offered Debt Securities will be set forth in the Prospectus Supplement in
respect of which this Prospectus is being delivered, if applicable.
All monies paid by the Corporation to the Trustee or a Paying Agent for the
payment of principal of (or premium, if any) or interest, if any, on any
Offered Debt Security that remain unclaimed at the end of two years will be
repaid to the Corporation, unless otherwise prohibited by mandatory provisions
of applicable escheat or abandoned or unclaimed property law, and the Holder
of such Debt Security will thereafter look only to the Corporation for payment
thereof.
The Indenture does not limit the amount of additional unsecured indebtedness
that the Corporation, the Guarantor or any of their Subsidiaries may incur.
Unless otherwise specified in the resolutions or any supplemental indenture
establishing the terms of the Offered Debt Securities, the terms of the
Offered Debt Securities or the covenants contained in the Indenture do not
afford holders of the Offered Debt Securities protection in the event of a
highly leveraged or other similar transaction involving the Corporation, the
Guarantor
6
or any of their Subsidiaries, or any other transaction resulting in a decline
in the ratings on or credit quality of the Offered Debt Securities, that may
adversely affect Securityholders. See "Description of Debt Securities--Certain
Covenants."
GUARANTEES
Tactical Systems will guarantee the due and punctual payment of the
principal of (and premium, if any) or interest, if any, in respect of the Debt
Securities, when and as the same shall become due and payable, whether by
declaration thereof or otherwise. The Guarantor will be subrogated to all
rights of the Holders of the Debt Securities against the Corporation in
respect of any amounts paid by the Guarantor pursuant to the provisions of the
Indenture; provided, however, that the Guarantor shall not be entitled to
enforce, or to receive any payments arising out of or based upon, such right
of subrogation until the principal of (and premium, if any) and interest, if
any, on all Offered Debt Securities has been paid.
The obligations of the Guarantor are limited to the largest amount that will
result in the obligations of the Guarantor under the Guarantees not being
subject to avoidance under Section 548 of the United States Bankruptcy Code or
any comparable provisions of any applicable state law.
Although Holders of the Offered Debt Securities will be direct creditors of
the Guarantor by virtue of the Guarantees, existing or future creditors could
attempt to avoid or subordinate the Guarantees, in whole or in part, under
applicable fraudulent conveyance laws. In the event that any of the Guarantees
are voided as a fraudulent conveyance or held unenforceable for any other
reason, the claims of the Holders of such Offered Debt Securities against the
Guarantor would be subject to the prior payment of all liabilities of the
Guarantor.
GLOBAL SECURITIES
Debt Securities of any series may be issued, in whole or in part, in the
form of one or more Global Securities that will be deposited with a depositary
(the "Depositary") or with a nominee for a Depositary identified in the
Prospectus Supplement relating to such series. Unless and until it is
exchanged in whole or in part for Debt Securities in definitive registered
form, a Global Security may not be transferred except as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or
any nominee to a successor Depositary or a nominee of any successor.
The specific terms of the depositary arrangement with respect to any series
of Debt Securities to be represented by a Global Security will be described in
the Prospectus Supplement relating to such series. The Corporation, however,
anticipates that the provisions set forth below generally will apply to such
depositary arrangements.
Upon the issuance of a Global Security, the Depositary will credit, on its
book-entry registration and transfer system, the respective principal amounts
of the Debt Securities represented by such Global Security to the accounts of
persons that have accounts with such Depositary ("participants"). The accounts
to be credited shall be designated by any underwriters or agents participating
in the distribution of such Debt Securities or by the Corporation if the Debt
Securities are offered and sold directly by the Corporation. Ownership of
beneficial interest in a Global Security will be limited to participants or
persons that hold interests through participants, but the Corporation has no
obligations to any persons that hold interests through participants. Ownership
of beneficial interests in such Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained
by the Depositary for such Global Security (with respect to interests of
participants) or by participants or persons that hold through participants
(with respect to interests of persons other than participants). The laws of
some states require that certain purchasers of securities take physical
delivery of the securities into definitive form. Such limits and laws may
impair the ability to transfer beneficial interest in a Global Security.
As long as the Depositary or its nominee is the registered owner of such
Global Security, the Depositary or its nominee, as the case may be, will be
considered the sole owner or holder of the Debt Securities represented by the
Global Security for all purposes under the Indenture. Except as set forth
below, owners of beneficial
7
interests in a Global Security will not be entitled to have the Debt
Securities represented by such Global Security registered in their names, will
not receive or be entitled to receive physical delivery of such Debt
Securities in definitive form and will not be considered the owners or holders
thereof under the Indenture.
Payments of principal (and premium, if any) and interest, if any, on Debt
Securities represented by a Global Security registered in the name of a
Depositary or its nominee will be made to such Depositary or its nominee, as
the case may be, as the registered owner of such Global Security. Neither the
Corporation, the Guarantor, the Trustee, any Paying Agent nor the Security
Registrar for such Debt Securities will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in such Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Corporation expects that the Depositary for any Debt Securities
represented by a Global Security, upon receipt of any payment of principal
(and premium, if any) or interest, if any, in respect of a permanent Global
Security will, except as provided below, immediately credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Security as shown on the
records of the Depositary. The Corporation also expects that payments by
participants to owners of beneficial interests in such Global Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with the securities held for the
accounts of customers registered in "street names" and will be the
responsibility of such participants.
If the Depositary for any Debt Securities represented by a Global Security
is at any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by the Corporation within 90 days, the Corporation
will issue Debt Securities in definitive form in exchange for such Global
Security. In addition, the Corporation may at any time and in its sole
discretion determine not to have any of the Debt Securities of a series
represented by one or more Global Securities and, in such event, will issue in
exchange therefor Debt Securities of such series in definitive form. Further,
if the Corporation so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Global Security representing
Debt Securities of that series may, on terms acceptable to the Corporation and
the Depositary for such Global Securities, receive Debt Securities of such
series in a definitive form. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery in
definitive form of Debt Securities of the series represented by the Global
Security equal in principal amount to such beneficial interest and to have
such Debt Securities registered in its name. Debt Securities of such series so
issued in definitive form will be issued in denominations, unless otherwise
specified by the Corporation, of $1,000 and integral multiples thereof if the
Debt Securities of such series are denominated in United States dollars.
AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Debt Securities of any
series may be amended or supplemented without notice but with the written
consent of the Holders of not less than a majority in principal amount of the
then outstanding Debt Securities of each affected series and such Holders may
waive compliance by the Corporation or the Guarantor of any provisions of the
Indenture or the Debt Securities or the related Guarantees; provided, however,
that no such modification, amendment or waiver may, without the consent of the
Holder of each outstanding Debt Security affected thereby, (a) reduce the
amount of Debt Securities of any series whose holders must consent to an
amendment, supplement or waiver, (b) reduce the rate of or extend the time for
payment of interest on any Debt Security, (c) reduce the principal of (or
premium, if any) or extend the fixed maturity of any Debt Security, (d) reduce
the portion of the principal amount of a Discounted Security payable upon
acceleration of its maturity, or (e) make any Debt Security payable in a
currency or currency unit other than that stated in the Debt Security. Any
past default or compliance with any provisions may be waived with the consent
of the holders of a majority in principal amount of the Debt Securities of the
affected series, except a default in payment of principal (or premium, if any)
or interest, if any, or in respect of other provisions requiring the consent
of the Holder of each such Debt Security of that series in order to amend.
8
Without the consent of any Securityholder, the Corporation and the Trustee
may amend or supplement the Indenture or the Debt Securities of any series
without notice (a) to cure any ambiguity, omission, defect or inconsistency,
(b) to provide for uncertificated Debt Securities in addition to or in place
of certificated Debt Securities, (c) to evidence the succession of another
corporation to the Corporation or the Guarantor and to provide for the
assumption of the Corporation's or the Guarantor's obligations under the Debt
Securities or the Guarantees, as the case may be, and the Indenture by a
successor, (d) to appoint a trustee other than the Trustee (or any successor
thereto) as trustee in respect of one or more series of Debt Securities, (e)
to add, change or eliminate provisions of the Indenture as shall be necessary
or desirable in accordance with any amendment to the Trust Indenture Act of
1939, (f) to change or eliminate any of the provisions of the Indenture;
provided, however, that any such change or elimination shall become effective
only when there is no outstanding Debt Security of any series created prior to
the execution of such amendment or supplement that is entitled to the benefit
of such provision, or (g) to make any change that does not materially
adversely affect the rights of any Securityholder of that series. Without the
consent of any Securityholder, the Trustee may waive compliance with any
provisions of the Indenture or the Debt Securities if the waiver does not
materially adversely affect the rights of any Securityholder.
CERTAIN COVENANTS
Unless otherwise specified in the Board Resolution or Resolutions or any
supplemental indenture establishing the terms of the Debt Securities of any
series, the terms of the Debt Securities of any series or the covenants
contained in the Indenture do not afford holders of Debt Securities protection
in the event of a highly leveraged or other similar transaction involving the
Corporation, the Guarantor or any of their subsidiaries, or any other
transaction resulting in a decline in the ratings on or credit quality of the
Debt Securities, that may adversely affect Securityholders. If the Offered
Debt Securities contain, or a future supplemental indenture contains,
covenants to afford Securityholders protection in the event of a highly
leveraged or similar transaction or any other transaction, the Prospectus
Supplement relating to the Offered Debt Securities (or an applicable pricing
supplement) will provide a brief description of such protective covenants. The
Indenture does not limit the amount of additional unsecured indebtedness that
the Corporation or any of its Subsidiaries may incur.
The following description sets forth certain covenants imposed on the
Corporation and the Guarantor by the Indenture. In the event the covenants are
varied or supplemented in the Board Resolution or Resolutions or any
supplemental indenture establishing the terms of the Debt Securities of any
series, the Prospectus Supplement or Pricing Supplement (if applicable) will
include a description of such provisions.
Certain Definitions. For purposes of the covenants included in the
Indenture, the following terms shall have the meanings provided below.
"Attributable Debt" for a lease means the carrying value of the capitalized
rental obligation determined under generally accepted accounting principles.
The carrying value may be reduced by the capitalized value of the rental
obligations, calculated on the same basis, that any sublessee has for all or
part of the same property. This term does not include any obligation to make
payments arising from the transfer of tax benefits under the Economic Recovery
Tax Act of 1981 (as it may from time to time be amended, or any successor
statute) to the extent such obligation is offset by or conditioned upon
receipt of payments from another person. A lease obligation shall be counted
only once even if the Guarantor or the Corporation and one or more of their
Subsidiaries may be responsible for the obligation.
"Consolidated Net Tangible Assets" means total assets less (1) total current
liabilities (excluding any Debt which, at the option of the borrower, is
renewable or extendable to a term exceeding 12 months and which is included in
current liabilities and further excluding any deferred income taxes which are
included in current liabilities) and (2) goodwill, patents and trademarks, all
as reflected in the Corporation's then most recent consolidated balance sheet.
"Debt" means all indebtedness for borrowed money reported as debt in the
consolidated financial statements or any guarantee of such a debt and includes
purchase money obligations. This term does not include
9
any obligation to make payments arising from the transfer of tax benefits
under the Economic Recovery Tax Act of 1981 (as it may from time to time be
amended, or any successor statute) to the extent such obligation is offset by
or conditioned upon receipt of payments from another person. A Debt shall be
counted only once even if the Guarantor or the Corporation and one or more of
their Subsidiaries may be responsible for the obligation.
"Lien" means any mortgage, pledge, security interest or lien. This term does
not include any obligation arising from the transfer of tax benefits under the
Economic Recovery Tax Act of 1981 (as it may from time to time be amended, or
any successor statute) to the extent such obligation is offset by or
conditioned upon receipt of payments from another person.
"Long-Term Debt" means Debt that by its terms matures on a date more than 12
months after the date it was created or Debt that the obligor may extend or
renew without the obligee's consent to a date more than 12 months after the
Debt was created.
"Principal Property" means, as to any particular series of Securities, any
manufacturing facility located in the United States and owned by the
Guarantor, the Corporation or by one or more Restricted Subsidiaries from the
date Securities of that series are first issued and which has, as of the date
the Lien is incurred, a net book value (after deduction of depreciation and
other similar charges) greater than 3% of Consolidated Net Tangible Assets,
except (1) any such facility or property which is financed by obligations of
any State, political subdivision of any State or the District of Columbia
under terms which permit the interest payable to the holders of the
obligations to be excluded from gross income as a result of the plant,
facility or property satisfying the conditions of Section 103(b)(4)(C), (D),
(E), (F) or (H) of the Internal Revenue Code of 1954, as amended, Section
103(b)(6) of the Internal Revenue Code of 1954, as amended, Section 142(a) or
Section 144(a) of the Internal Revenue Code of 1986, or of any successors to
such provisions, or (2) any such facility or property which, in the opinion of
the Board of Directors of the Corporation, is not of material importance to
the total business conducted by the Corporation and its Subsidiaries taken as
a whole. However, the Chief Executive Officer or Chief Financial Officer of
the Corporation may at any time declare any manufacturing facility or other
property to be a Principal Property by delivering a certificate to that effect
to the Trustee.
"Restricted Property" means, as to any particular series of Securities, any
Principal Property, any Debt of a Restricted Subsidiary owned by the
Guarantor, the Corporation or a Restricted Subsidiary on the date Securities
of that series are first issued or secured by a Principal Property (including
any property received upon a conversion or exchange of such Debt), or any
shares of stock of the Corporation or a Restricted Subsidiary owned by the
Guarantor, the Corporation or a Restricted Subsidiary (including any property
or shares received upon a conversion, stock split or other distribution with
respect to the ownership of such stock).
"Restricted Subsidiary" means a Subsidiary that has substantially all its
assets located in, or carries on substantially all its business in, the United
States and that owns a Principal Property. Notwithstanding the preceding
sentence, a Subsidiary shall not be a Restricted Subsidiary during such period
of time as it (or any corporation (other than the Corporation) or other entity
that, directly or indirectly, beneficially owns a majority of the Voting Stock
of the Subsidiary) has shares of capital stock registered under the Exchange
Act or it files reports and other information with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act.
"Sale-Leaseback Transaction" means an arrangement whereby the Guarantor, the
Corporation or a Restricted Subsidiary now owns or hereafter acquires a
Principal Property, transfers it to a person and contemporaneously leases it
back from the person. This term does not include any transaction arising from
the transfer of tax benefits under the Economic Recovery Tax Act of 1981 (as
it may from time to time be amended, or any successor statute) to the extent
the obligation to make rental payments is offset or conditioned upon receipt
of payments from another person.
"Subsidiary" means a corporation a majority of the Voting Stock of which is
owned by the Corporation, the Corporation and one or more Subsidiaries, or one
or more Subsidiaries (including, without limitation, the Guarantor).
10
"United States" means the United States of America. The Commonwealth of
Puerto Rico, the Virgin Islands and other territories and possessions are not
part of the United States.
"Voting Stock" means capital stock having voting power under ordinary
circumstances to elect directors.
General. The Indenture requires the Corporation to covenant to the following
with respect to each series of Debt Securities: (i) to promptly pay the
principal of (and premium, if any) and interest, if any, on such series of
Debt Securities; (ii) to maintain an office or agency in each place where Debt
Securities may be presented, surrendered for payment, transferred or exchanged
and where notice upon the Corporation may be served; (iii) if the Corporation
acts as its own Paying Agent for any series of Securities, to segregate and
hold in trust for the benefit of the persons entitled thereto a sum sufficient
to pay the principal of (and premium, if any) or interest, if any, as the same
becomes due; (iv) to deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement to the effect that the Corporation has
complied with its obligations under the Indenture; and (v) to deliver to the
Trustee copies of annual and other reports that the Corporation files with the
Commission within 15 days after filing such reports with the Commission.
Limitations on Liens. Unless otherwise specified in the Prospectus
Supplement in respect of which this Prospectus is being delivered and subject
to the following two sentences, the Corporation will not, and the Corporation
will not permit any Restricted Subsidiary to, directly or indirectly, as
security for any Debt, incur a Lien on any Restricted Property, unless the
Corporation or such Restricted Subsidiary secures or causes to be secured any
outstanding Debt Securities equally and ratably with all Debt secured by such
Lien. This restriction will not apply to, among other things, certain Liens
(i) existing at the time a corporation becomes a Restricted Subsidiary; (ii)
existing at the time of the acquisition of the Restricted Property; (iii)
securing all or any part of the purchase price of property upon the
acquisition of such property by the Corporation, the Guarantor or a Restricted
Subsidiary or securing any Debt incurred or guaranteed by the Corporation, the
Guarantor or a Restricted Subsidiary prior to, at the time of, or within one
year after the later of the acquisition, completion of construction (including
any improvements on an existing property) or commencement of full operation of
such property, which Debt is incurred or guaranteed for the purpose of
financing all or any part of the purchase price thereof or construction or
improvements thereof, and which Debt may be in the form of obligations
incurred in connection with industrial revenue bonds or similar financings and
letters of credit issued in connection therewith; (iv) securing Debt of a
Restricted Subsidiary owed to the Corporation, the Guarantor or another
Restricted Subsidiary; (v) existing at the time a corporation or other entity
merges into, consolidates with or enters into a share exchange with the
Corporation, the Guarantor or a Restricted Subsidiary or transfers or leases
all or substantially all its assets to the Corporation or a Restricted
Subsidiary; (vi) in favor of any customer (including any government or
governmental authority) to secure partial, progress, advance or other payments
or performance pursuant to any contract or statute or to secure any related
indebtedness or to secure Debt guaranteed by a government or governmental
authority; (vii) arising pursuant to any order of attachment, distraint or
similar legal process in connection with court proceedings so long as the
execution or other enforcement thereof is effectively stayed and the claims
secured thereby are being contested in good faith by appropriate proceedings
or the lien is a materialman's, suppliers', tax or other similar Lien and
arising in the ordinary course of business securing obligations which are not
overdue or are being contested in good faith by appropriate proceedings; or
(viii) as to any particular series of Debt Securities, that extend, renew or
replace in whole or in part a Lien permitted by any of the foregoing clauses
or existing on the date that Debt Securities of such series were first issued.
In addition and notwithstanding the foregoing restrictions, the Corporation,
the Guarantor and any of their Restricted Subsidiaries may, without securing
the Debt Securities, incur a Lien that otherwise would be subject to the
restrictions, provided that after giving effect to such Lien the aggregate
amount of all Debt secured by Liens that otherwise would be prohibited plus
all Attributable Debt in respect of sale-leaseback transactions that otherwise
would be prohibited by the covenant limiting sale-leaseback transactions
described below would not exceed 10% of Consolidated Net Tangible Assets.
Limitations on Sale-Leaseback Transactions. Unless otherwise specified in
the Prospectus Supplement in respect of which this Prospectus is being
delivered and subject to the following two sentences, the Corporation and the
Guarantor will not, and neither will permit any Restricted Subsidiary to, sell
or transfer a Principal
11
Property and contemporaneously lease it back, except a lease for a period of
three years or less. Notwithstanding the foregoing restriction, the
Corporation, the Guarantor or any Restricted Subsidiary may sell or transfer a
Principal Property and lease it back for a longer period if (i) the lease is
between the Corporation and the Guarantor, the Corporation and a Restricted
Subsidiary, the Guarantor and a Restricted Subsidiary, or between Restricted
Subsidiaries; (ii) the Corporation, the Guarantor or such Restricted
Subsidiary would be entitled, pursuant to the provisions set forth above under
the caption "Limitations on Liens," to create a Lien on the property to be
leased securing Debt in an amount at least equal in amount to the Attributable
Debt (as herein defined) in respect of the sale-leaseback transaction without
equally and ratably securing the outstanding Debt Securities; (iii) the
Corporation owns or acquires other property which will be made a Principal
Property and is determined by the Board of Directors of the Corporation or the
Guarantor to have a fair value equal to or greater than the Attributable Debt
incurred; or (iv) the Corporation, the Guarantor or a Restricted Subsidiary
makes an optional prepayment in cash of its Debt at least equal in amount to
the Attributable Debt for the lease, the prepayment is made within 120 days,
the Debt prepaid is not owned by the Corporation, the Guarantor or a
Restricted Subsidiary, and the Debt prepaid was long-term debt at the time it
was created. In addition and notwithstanding the foregoing restrictions, the
Corporation and any of its Restricted Subsidiaries may, without securing the
Debt Securities, enter into a sale-leaseback transaction that otherwise would
be subject to the restrictions, provided that after giving effect to such
sale-leaseback transaction the aggregate amount of all Debt secured by Liens
that otherwise would be prohibited by the covenant limiting Liens described
above plus all Attributable Debt in respect of sale-leaseback transactions
that otherwise would be prohibited would not exceed 10% of Consolidated Net
Tangible Assets.
Consolidation, Merger, Sale of Assets. Neither the Corporation nor the
Guarantor shall consolidate with or merge into, or transfer all or
substantially all of its assets to, another corporation, unless (1) the
resulting, surviving or transferee corporation assumes by supplemental
indenture all of the obligations of the Corporation or the Guarantor, as the
case may be, under the Guarantees or the Debt Securities and the Indenture,
(2) immediately after giving effect to the transaction, no Event of Default,
and no circumstance which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing, and (3) the
Corporation or the Guarantor, as the case may be, shall have delivered to the
trustee an officers' certificate and an opinion of counsel each stating that
the consolidation, merger or transfer and the supplemental indenture comply
with the Indenture.
When a successor corporation, trustee, paying agent or registrar assumes all
of the obligations of its predecessor under the Debt Securities and the
Indenture, the predecessor will be released from those obligations.
DEFAULT AND REMEDIES
An Event of Default under the Indenture in respect of any series of Debt
Securities is: default for 30 days in payment of interest on the Debt
Securities of that series; default in payment of principal on the Debt
Securities of that series; failure by the Corporation or the Guarantor for 90
days after notice to it to comply with any of its other agreements in the
Indenture for the benefit of Holders of Debt Securities of that series;
certain events of bankruptcy or insolvency involving the Corporation or the
Guarantor; and any other Event of Default specifically provided for by the
terms of such series, as described in the related Prospectus Supplement. If an
Event of Default occurs and is continuing, the Trustee or the Holders of at
least 25% in principal amount of the outstanding Debt Securities of the
affected series may declare the Debt Securities of that series to be due and
payable immediately, but under certain conditions such acceleration may be
rescinded by the Holders of a majority in principal amount of the outstanding
Debt Securities of the affected series.
Securityholders may not enforce the Indenture or the Debt Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture
or the Debt Securities unless it receives indemnity satisfactory to it.
Subject to certain limitations, Holders of a majority in principal amount of
the Debt Securities of any series may direct the Trustee in its exercise of
any trust or power under the Indenture in respect of that series. The
Indenture provides that the Trustee will, within 90 days after the occurrence
of any default with respect to the Debt Securities of any particular series,
give to the Holders of such Debt Securities notice of the default if known
12
to it, unless the default shall have been cured or waived. The Trustee may
withhold from Securityholders notice of any continuing default (except a
default in payment of principal or interest) if it determines that withholding
such notice is in the interests of such Holders.
A director, officer, employee or stockholder (other than the Corporation)
shall not have any liability for any obligations of the Corporation or the
Guarantor under the Debt Securities or the Guarantees or the Indenture or for
any claim based on, in respect of, or by reason of such obligations or their
creation. By accepting a Debt Security, each Securityholder waives and
releases all such claims and liability. This waiver and release are part of
the consideration for the issuance of the Debt Securities and the execution of
the Guarantees.
DEFEASANCE
The Indenture provides, unless such provision is made inapplicable to the
Debt Securities of any series issued pursuant to the Indenture, that the
Corporation may, subject to certain conditions described below, discharge its
indebtedness, its obligations and the obligations of the Guarantor, or certain
of their obligations under the Indenture in respect of Debt Securities of a
series by depositing funds or, in the case of Debt Securities payable in
United States dollars, U.S. Government Obligations (as defined in the
Indenture), or Debt Securities of the same series with the Trustee. The
Indenture provides that (1) the Corporation and the Guarantor will be
discharged from any obligation to comply with certain restrictive covenants of
the Indenture and certain other obligations under the Indenture and any
noncompliance with such obligations shall not be an Event of Default in
respect of the series of Debt Securities or (2) provided that 91 days have
passed from the date of the deposit referred to below and certain specified
Events of Default have not occurred, the Corporation and the Guarantor will be
discharged from any and all obligations in respect of the series of Debt
Securities (except for certain obligations, including obligations to register
the transfer and exchange of the Debt Securities of such series, to replace
mutilated, lost or stolen Debt Securities of such series, to maintain paying
agencies and to cause money to be held in trust), in either case upon the
deposit with the Trustee, in trust, of money, Debt Securities of the same
series, and/or U.S. Government Obligations that, through the payment of
interest and principal in accordance with their terms, will provide money in
an amount sufficient to pay the principal of and each installment of interest
on the series of Debt Securities on the date when such payments become due in
accordance with the terms of the Indenture and the series of Debt Securities.
In the event of any such defeasance under clause (1) above, the obligations of
the Corporation under the Indenture and the Debt Securities of the affected
series, other than with respect to the covenants relating to limitations on
liens and sale-leaseback transactions and reporting thereon, and covenants
relating to consolidations, mergers and transfers of all or substantially all
of the assets of the Corporation, shall remain in full force and effect. In
the event of defeasance and discharge under clause (2) above, the holders of
Debt Securities of the affected series are entitled to look only to the trust
fund created by such deposit for payment. In the case of the Corporation's
discharge from any and all obligations in respect of a series of Debt
Securities as described in clause (2) above, the trust may be established only
if, among other things, the Corporation shall have delivered to the Trustee an
opinion of counsel to the effect that, if the subject Debt Securities are then
listed on a national securities exchange, such deposit, defeasance or
discharge will not cause the Debt Securities to be delisted. Under Federal
income tax law as of the date of this Prospectus, defeasance and discharge
under clause (2) above may be treated as a taxable exchange of the related
Debt Securities. As a consequence, each holder of such Debt Securities might
be required to recognize gain or loss equal to the difference between the
Holder's cost or other tax basis for the Debt Securities and the value of the
Holder's interest in the trust. Prospective investors are urged to consult
their own tax advisors as to the specific consequences of such a deposit and
discharge, including the applicability and effect of tax laws other than the
Federal income tax law.
Pursuant to the escrow or trust agreements that the Corporation may execute
in connection with the defeasance of all or certain of its obligations under
the Indenture as provided above, the Corporation from time to time may elect
to substitute U.S. Government Obligations or Debt Securities of the same
series for any or all of the U.S. Government Obligations deposited with the
Trustee; provided that the money, U.S. Government Obligations, and/or Debt
Securities of the same series in trust following such substitution or
substitutions will be sufficient, through the payment of interest and
principal in accordance with their terms, to pay the principal of
13
and each installment of interest on the series of Debt Securities on the date
when such payments become due in accordance with the terms of the Indenture
and the series of Debt Securities. The escrow trust agreements also may enable
the Corporation (1) to direct the Trustee to invest any money received by the
Trustee on the U.S. Government Obligations comprising the trust in additional
U.S. Government Obligations, and (2) to withdraw monies or U.S. Government
Obligations from the trust from time to time; provided that the money and/or
U.S. Government Obligations in trust following such withdrawal will be
sufficient, through the payment of interest and principal in accordance with
their terms, to pay the principal of and each installment of interest on the
series of Debt Securities on the date when such payments become due in
accordance with the terms of the Indenture and the series of Debt Securities.
GOVERNING LAW
The Debt Securities and the Indenture will be governed by the laws of the
State of Maryland.
TRUSTEE
First Trust of Illinois, National Association from time to time performs
other services for the Corporation in the normal course of business and is
trustee under other indentures pursuant to which debt securities of the
Corporation and Tactical Systems have been issued.
ADDITIONAL INFORMATION
The Indenture is an exhibit to the Registration Statement of which this
Prospectus is a part. Any person who receives this Prospectus may obtain a
copy of the Indenture without charge by writing to the Corporation at the
address listed under the caption "Incorporation of Certain Information by
Reference."
PLAN OF DISTRIBUTION
The Corporation may sell Debt Securities to or through underwriters or to
dealers, acting as principals for their own account and also may sell Debt
Securities directly to other purchasers or through agents. The Prospectus
Supplement in respect of which this Prospectus is being delivered sets forth
the terms of the offering of the Offered Debt Securities and includes, without
limitation, (i) the name or names of any underwriters, dealers or agents with
which the Corporation has entered into arrangements with respect to the sale
of the Offered Debt Securities, (ii) the initial public offering or purchase
price of the Offered Debt Securities, (iii) the principal amounts of the
Offered Debt Securities to be purchased by any such underwriters, dealers or
agents, (iv) any underwriting discounts, commissions and other items
constituting underwriters' compensation and any other discounts, concessions
or commissions allowed or reallowed or paid by any underwriters or other
dealers, (v) any commissions paid to any agents, (vi) the net proceeds to the
Corporation, and (vii) the securities exchanges, if any, on which the Offered
Debt Securities will be listed.
If underwriters are used in the offering of Debt Securities, the Debt
Securities being sold will be acquired by the underwriters for their own
account and may be resold from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of such resale. Unless otherwise set
forth in an applicable Prospectus Supplement, the obligations of the
underwriters to purchase such Debt Securities will be subject to certain
conditions precedent and each of the underwriters with respect to such Debt
Securities will be obligated to purchase all of the Debt Securities allocated
to it if any such Debt Securities are purchased. Any initial public offering
price and any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
If dealers are utilized in the sale of the Debt Securities in respect of
which this Prospectus is being delivered, the Corporation will sell such Debt
Securities to such dealers as principals. The dealers may then resell such
Debt Securities to the public at varying prices to be determined by such
dealers at the time of resale.
Offers to purchase Debt Securities may be solicited by agents designated by
the Corporation from time to time. Any such agent, who may be deemed to be an
"underwriter" as that term is defined in the Securities Act, involved in the
offer or sale of the Debt Securities in respect of which this Prospectus is
being delivered will be
14
named, and any commissions payable by the Corporation to such agent will be
set forth, in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement in respect of which this Prospectus is being delivered,
any such agent will be acting on a best efforts basis for the period of its
appointment.
Offers to purchase Debt Securities may be solicited, and sales hereof may be
made directly by the Corporation to institutional investors or otherwise, who
may be deemed to be underwriters within the meaning of the Securities Act with
respect to any resales thereof.
Underwriters, dealers and agents participating in the distribution of Debt
Securities may be deemed to be "underwriters," as that term is defined under
the Securities Act, and any discounts and commissions received by them and any
profit realized by them on the resale of those Debt Securities may be deemed
to be underwriting discounts and commissions, under the Securities Act.
Under agreements that may be entered into by the Corporation, underwriters,
dealers and agents who participate in the distribution of Debt Securities may
be entitled to indemnification by the Corporation against certain liabilities,
including certain liabilities under the Securities Act.
If indicated in the Prospectus Supplement, the Corporation may authorize
underwriters or other persons acting as the Corporation's agents to solicit
offers by certain institutions to purchase Offered Debt Securities from the
Corporation pursuant to contracts providing for payment and delivery on a
future date. Institutions with which such contracts may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and others, but in all
cases such institutions must be approved by the Corporation. The obligations
of any purchaser under any such contract will be subject to the condition that
the purchase of the Offered Debt Securities shall not at the time of delivery
be prohibited under the laws of the jurisdiction to which such purchaser is
subject. The underwriters and any such other agents will not have any
responsibility in respect of the validity or performance of such contracts.
VALIDITY
The validity of the Debt Securities offered hereby will be passed on for the
Corporation by Miles & Stockbridge, a Professional Corporation, Baltimore,
Maryland. The validity of the Guarantees will be passed on for Tactical
Systems by William J. LaSalle, Vice President and General Counsel of the
Corporation's Tactical Systems Sector.
EXPERTS
The consolidated financial statements of the Corporation incorporated by
reference in the Corporation's Annual Report (Form 10-K) for the year ended
December 31, 1995, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
The consolidated balance sheets of Loral Corporation and Subsidiaries--
Retained Business as of March 31, 1995 and 1994 and the related consolidated
statements of operations, changes in net assets and cash flows for each of the
three years in the period ended March 31, 1995, included in the Corporation's
Current Report on Form 8-K filed with the Commission on May 2, 1996 (as
amended on May 8, 1996), which are incorporated herein by reference, have been
audited by Coopers & Lybrand L.L.P., independent auditors, as set forth in
their report thereon included therein and incorporated herein by reference.
Such consolidated financial statements of Loral Corporation and Subsidiaries--
Retained Business are incorporated herein by reference in reliance upon the
report of Coopers & Lybrand L.L.P. given upon the authority of said firm as
experts in accounting and auditing.
15
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE CORPORATION, TACTICAL SYSTEMS, THE
UNDERWRITERS OR ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE CORPORATION OR TACTICAL SYSTEMS SINCE THE DATE HEREOF OR THEREOF
OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH SUCH
OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
PAGE
----
The Corporation............................................................ S-2
Recent Developments........................................................ S-2
Use of Proceeds............................................................ S-3
Capitalization............................................................. S-4
Ratio of Earnings to Fixed Charges......................................... S-4
Unaudited Pro Forma Combined
Condensed Financial Statements............................................ S-5
Selected Consolidated Financial Information................................ S-9
Business of the Corporation................................................ S-11
Business of Tactical Systems............................................... S-13
Description of Offered Debt Securities..................................... S-15
Underwriting............................................................... S-16
Validity of Offered Debt Securities........................................ S-17
Experts.................................................................... S-17
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Information by
Reference................................................................. 3
The Corporation............................................................ 4
Use of Proceeds............................................................ 4
Ratio of Earnings to Fixed Charges......................................... 4
Description of Debt Securities............................................. 5
Plan of Distribution....................................................... 14
Validity................................................................... 15
Experts.................................................................... 15
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[LOGO]
$1,500,000,000
6.625% Notes Due 1998
7.45% Notes Due 2004
7.70% Notes Due 2008
PROSPECTUS SUPPLEMENT
CS First Boston
Bear, Stearns & Co. Inc.
Goldman, Sachs & Co.
Merrill Lynch & Co.
Morgan Stanley & Co.
Incorporated
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