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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-1
(Amendment No. 4)
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(d)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
LORAL CORPORATION
(Name of Subject Company)
LOCKHEED MARTIN CORPORATION
LAC ACQUISITION CORPORATION
(Bidders)
Common Stock, par value $0.25 per share
(Title of Class of Securities)
543859 10 2
(CUSIP number of Class of Securities)
Frank H. Menaker, Esq.
Lockheed Martin Corporation
6801 Rockledge Drive
Bethesda, Maryland 20817
(301) 897-6000
(Name, address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement)
With a copy to:
Peter Allan Atkins, Esq.
Lou R. Kling, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
(212) 735-3000
This Amendment No. 4 amends and supplements the
Tender Offer Statement on Schedule 14D-1 (as may be
amended from time to time, the "Schedule 14D-1") of LAC
Acquisition Corporation, a New York corporation (the
"Purchaser") and a wholly-owned subsidiary of Lockheed
Martin Corporation, a Maryland corporation ("Lockheed
Martin"), filed on January 12, 1996 with the Securities
and Exchange Commission (the "Commission") in respect of
the tender offer (the "Offer") by the Purchaser for all
of the outstanding shares of Common Stock, par value $.25
per share, of Loral Corporation (the "Company"). The
Offer is being made pursuant to an Agreement and Plan of
Merger dated as of January 7, 1995 by and among the
Company, Purchaser and Lockheed Martin. All capitalized
terms set forth herein which are not otherwise defined
herein shall have the same meanings as ascribed thereto
in the Offer to Purchase, dated January 12, 1996 (which
is attached as Exhibit (a)(9) to the Schedule 14D-1 (the
"Offer to Purchase")). In connection with the foregoing,
the Purchaser and Lockheed Martin are hereby amending and
supplementing the Schedule 14D-1 as follows:
Item 10. Additional Information.
Item 10(e) is hereby amended and supplemented by the
addition of the following paragraph thereto:
"Silverman Lawsuit. The Company and
certain of its directors (the "Director Defendants")
have been named as defendants in a purported class
action lawsuit entitled Irene Silverman v. Bernard
L. Schwartz, Frank C. Lanza, Howard Gittis, Robert
B. Hodes, Gershon Kekst, Charles Lazarus, Malvin A.
Ruderman, E. Donald Shapiro, Allen M. Shinn, Arthur
L. Simon, Thomas J. Stanton, Jr., Daniel
Yankelovitch and Loral Corporation, Index Number 96-
102623 (such lawsuit, the "Silverman Lawsuit"),
which was filed in the Supreme Court of the State of
New York, in the County of New York, on or about
February 9, 1996. Such action purports to be
brought as a class action on behalf of all
shareholders of the Company. The complaint in the
Silverman Lawsuit (the "Silverman Complaint")
alleges, among other things, that (a) the payment by
the Company of $18 million to Mr. Bernard L.
Schwartz, the chairman and chief executive officer
of the Company, pursuant to the "change of control"
provisions of Mr. Schwartz' employment agreement
with the Company, is allegedly not required by the
terms of Mr. Schwartz' employment agreement and
therefore is allegedly a waste of corporate assets
and a breach of the fiduciary duties of the Director
Defendants, and (b) in the event that the "change of
control" provisions of Mr. Schwartz' employment
agreement are held to require such $18 million
payment, the Director Defendants allegedly breached
their fiduciary duties (i) by approving the terms of
such employment agreement in an allegedly reckless
manner and (ii) by allegedly structuring the
transaction so as to trigger such change of control
provisions and/or by failing to require that Mr.
Schwartz surrender any claim to such $18 million
payment.
As relief, the Silverman Complaint seeks,
among other things, (a) an injunction enjoining or
rescinding any payments to Mr. Schwartz to be made
in connection with the Merger, (b) the award of
compensatory damages in an unspecified amount, and
(c) the award to plaintiff of its reasonable costs
and expenses, including reasonable attorney's fees.
The Company has notified Lockheed Martin that it
believes that the Silverman Lawsuit is without merit
and that it intends to vigorously defend such
action. The above summary of the Silverman Lawsuit
does not purport to be complete and is qualified in
its entirety by reference to the full text of the
Silverman Complaint, which is attached as Exhibit
(c)(13) hereto and which is hereby incorporated
herein by reference.
SEC Inquiry. On February 8, 1996,
Lockheed Martin was informed by the Commission of an
informal inquiry by the Commission into trading in
common stock of the Company preceding the January 8,
1996 public announcement that the Company and
Lockheed Martin were entering into the Transaction.
The Commission has requested, and Lockheed Martin
has provided to the Commission, certain information
relating to the Transaction and the events preceding
such public announcement."
Item 10(f) is hereby amended and supplemented
by incorporating by reference therein the press release
issued by Lockheed Martin on February 27, 1996, a copy of
which is filed as Exhibit (a)(12) to the Schedule 14D-1.
Item 11. Material to be Filed as Exhibits
Item 11 is hereby amended and supplemented by
the addition of the following exhibits thereto:
Exhibit (a)(12) Form of press release issued by
Lockheed Martin on February 27, 1996.
Exhibit (c)(13) Complaint in an action filed in the
Supreme Court of the State of New
York, County of New York, entitled
Irene Silverman v. Bernard L.
Schwartz, Frank C. Lanza, Howard
Gittis, Robert B. Hodes, Gershon
Kekst, Charles Lazarus, Malvin A.
Ruderman, E. Donald Shapiro, Allen M.
Shinn, Arthur L. Simon, Thomas J.
Stanton, Jr., Daniel Yankelovitch and
Loral Corporation, Index Number 96-
102623.
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
LAC ACQUISITION CORPORATION
By:/s/ STEPHEN M. PIPER
Name: Stephen M. Piper
Title: Assistant Secretary
Dated: February 27, 1996
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set
forth in this statement is true, complete and correct.
LOCKHEED MARTIN CORPORATION
By:/s/ STEPHEN M. PIPER
Name: Stephen M. Piper
Title: Assistant Secretary
Dated: February 27, 1996
EXHIBIT INDEX
Exhibit No. Description
Exhibit (a)(12) Form of press release issued by Lockheed Martin
on February 27, 1996.
Exhibit (c)(13) Complaint in an action filed in the Supreme
Court of the State of New York, County of New
York, entitled Irene Silverman v. Bernard L.
Schwartz, Frank C. Lanza, Howard Gittis, Robert
B. Hodes, Gershon Kekst, Charles Lazarus,
Malvin A. Ruderman, E. Donald Shapiro, Allen M.
Shinn, Arthur L. Simon, Thomas J. Stanton, Jr.,
Daniel Yankelovitch and Loral Corporation,
Index Number 96-102623.
Exhibit (a)(12)
FOR IMMEDIATE RELEASE
TENDER OFFER EXTENSION
Bethesda, Maryland, February 27, 1996 - Lockheed Martin
Corporation (NYSE:LMT) announced today that it is
extending its Offer to purchase all outstanding shares of
common stock of Loral Corporation (NYSE:LOR) for $38 net
cash per share until 12:00 midnight Eastern Standard Time
on Wednesday, March 20, 1996. The terms of the extended
Offer are identical to those in the original Offer
contained in the Offering Materials filed with the SEC on
January 12, 1996.
Details follow:
In addition to the $38 net cash per share,
following consummation of the Offer, Loral has agreed to
distribute to its shareholders for each share of Loral
common stock held one share of common stock of the newly
formed Spin-Off company, Loral Space & Communications,
Ltd. (Loral Space), formed in Bermuda. Those persons who
hold Shares immediately prior to the time of consummation
of the Offer (whether or not the Shares are tendered
pursuant to the Offer) will participate in the
distribution of shares of Loral Space in connection with
the Spin-Off.
As described in the Offering Materials, the
Offer is conditioned upon receiving certain governmental
approvals and the satisfaction or waiver of a number of
conditions. The conditions include the following: (1)
That the antitrust waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended
(the HSR Act), with respect to the Offer shall have
expired or been terminated. On February 8, 1996, the
Federal Trade Commission (FTC) issued a request for
additional information. Lockheed Martin and Loral are in
the process of providing the FTC with the requested
information. This will extend the waiting period under
the HSR Act until 10 days after the date on which
Lockheed Martin substantially complies with the FTC's
request, unless the FTC decides to terminate the waiting
period earlier.
(2) That the record date for the Spin-Off has been set by
the Board of Directors of Loral Corporation (this is
itself conditioned upon, among other things, that the
shares of Loral Space have been registered under the
federal securities laws).
As noted in the offering materials, in the
event that the approvals are not received prior to the
new March 20 Offer expiration date, Lockheed Martin has
agreed to further extend the Offer as necessary.
Loral Corporation has advised Lockheed Martin
that, at least 10 days prior to the record date for the
Spin-Off (the time of the record date is expected to
occur immediately prior to the time on which the Offer is
consummated), Loral Corporation will give notice of the
record date and will distribute to holders of Loral
shares an information statement or prospectus relating to
the Spin-Off and Loral Space.
As of the close of business on Monday, February
26, 1996, 60,250,545 Shares had been tendered and not
withdrawn.
Lockheed Martin, headquartered in Bethesda,
Maryland, is a highly diversified advanced technology
company, with business sectors in aeronautics, space and
strategic missiles, electronics, information and
technology services and energy and environment. Loral,
headquartered in New York City, is a high technology
company that primarily concentrates in defense
electronics, communications, space and systems
integration.
CONTACT:
Charles Manor/Lockheed Martin Corporation/301-897-6258
Joanne Hvala/Loral Corporation/212-697-1105
Ruth Pachman or Jim Fingeroth/Kekst & Co./212-593-2655
Exhibit (c)(13)
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- - - - - - - - - - - - - - - - - x
IRENE SILVERMAN,
:
Plaintiff,
:
-against-
:
BERNARD L. SCHWARTZ, FRANK C.
LANZA, HOWARD GITTIS, ROBERT B. :
HODES, GERSHON KEKST, CHARLES
LAZARUS, MALVIN A. RUDERMAN, E. : DERIVATIVE COMPLAINT
DONALD SHAPIRO, ALLEN M. SHINN,
ARTHUR L. SIMON, THOMAS J. :
STANTON, JR., and DANIEL
YANKELOVITCH,, :
Defendants. :
-and- :
LORAL CORPORATION, :
Nominal Defendant. :
- - - - - - - - - - - - - - - - - x
Plaintiff Irene Silverman, for her derivative
complaint herein, alleges:
1. Plaintiff brings this shareholder
derivative action on behalf of, and for the benefit of,
nominal defendant Loral Corporation ("Loral"). She has
owned common stock of Loral for more than 35 years.
2. Loral is a New York corporation with
headquarters at 600 Third Avenue, New York, N.Y. Loral
is a leading supplier of advanced electronic systems,
components and services to U.S. and foreign governments
for defense and non-defense applications. The Company's
principal business areas are: electronic combat;
training and simulation; tactical weapons; command,
control communications and intelligence/reconnaissance;
systems integration; and telecommunications and space
systems.
3. The individual defendants are directors of
Loral. Bernard Schwartz is also chairman of the board
and chief executive officer; and Frank Lanza is also
president and chief operating officer.
4. By contract dated as of January 7, 1996
(the "merger agreement"), Loral and Lockheed Martin
Corporation agreed that Loral would be merged with a
subsidiary of Lockheed Martin, which already owns both
the Lockheed Corporation and Martin Marietta Corporation.
The merger agreement also provides that, prior to
consummation of the merger, Loral will transfer its space
and satellite communications assets to a newly created
subsidiary, Loral Space & Telecommunications, Ltd., a
Bermuda corporation ("Loral Space"), and Loral Space will
then be spun off to Loral's common stockholders. Thus,
the effect of the merger is simply to sell certain of
Loral's businesses to Lockheed Martin. Loral will
continue to operate the remainder of its businesses under
existing management and board of directors, under the
"Loral" name.
5. The defendant directors all voted in favor
of the merger and, pursuant to the merger agreement, on
or about January 12, 1996, Lockheed Martin commenced a
tender offer for any and all Loral shares at a price of
$38 per share. The offer, which is currently scheduled
to expire at midnight, February 29, 1996, is conditioned
upon Lockheed Martin receiving tenders of shares which,
when added to the shares Lockheed Martin already owns,
will give it at least 66% of Loral's common shares
outstanding. After consummation of the tender offer,
Lockheed Martin will effectuate the merger, cashing out
the non-tendering shareholders at the $38 per share price
offered in the tender offer.
6. In connection with these transactions, the
defendant directors agreed that Loral will pay $18
million to its chairman and chief executive officer,
Bernard L. Schwartz, ostensibly pursuant to the "change
of control" provisions of Mr Schwartz' employment
agreement with Loral. This payment is not required by
the employment agreement and is a waste and gift of
corporate assets and a breach of the directors' fiduciary
duties.
7. Mr. Schwartz' employment agreement
provides that if there is a "change of control" of Loral,
he has the option of terminating the agreement and
receiving a lump sum severance payment. To trigger this
provision, a transaction must either result in the
acquisition of the entire company by another company, or
must entail a hostile acquirer obtaining control of the
company over the objections of a majority of the
incumbent directors. Neither situation has occurred
here.
8. First, Lockheed Martin has acquired only
specific businesses currently owned by Loral, and not the
entire company. The net effect of these transactions is
no different than if Loral had decided simply to sell its
defense electronics and systems integration businesses
directly to Lockheed Martin, a situation which could not
possibly be deemed a change of control. The particular
form of the transaction defendants decided to utilize
here, i.e., a spin-off followed by a merger, should have
no bearing on the substance of Loral's contractual
obligations to Mr. Schwartz.
9. Second, the merger and spin-off are not
hostile transactions, since Mr. Schwartz initiated these
transactions and had a decisive voice in determining the
form they would take, and they have received unanimous
board approval.
10. Third, Mr. Schwartz has not terminated his
employment with the company. To the contrary, he is
staying on as Chairman and Chief Executive Officer of
Loral Space, with as much autonomy and control as he
previously had, and at essentially the same compensation
he previously enjoyed. In addition, he will become Vice
Chairman of Lockheed Martin. Mr. Schwartz' power and
autonomy have thus increased dramatically as a result of
these transactions.
11. Fourth, Mr. Schwartz will also reap
enormous personal profit from these transactions,
irrespective of the $18 million payment. In exchange for
his 3.57 million shares of Loral common stock, he is
entitled to receive an equivalent number of Loral Space
shares, plus about $70 million in cash ($38 per share
less his cost in exercising his Loral stock options).
12. In the event that the "change of control"
provisions of Mr. Schwartz' employment agreement are
deemed to be triggered by these transactions, the
director defendants have breached their fiduciary duties
by (1) recklessly approving an employment agreement that
provides huge windfall payments to Mr. Schwartz in
circumstances such as this, which amount to a waste and
gift of corporate assets, and (2) by structuring the
transaction so as to trigger unnecessarily the change of
control provision, and/or by failing to require Mr.
Schwartz to surrender any claim to such windfall payments
as a condition to their approval of the merger.
13. It would be futile for plaintiff to make a
presuit demand on Loral's board of directors for the
relief sought herein. The directors of Loral directly
participated in the approval of Mr. Schwartz' employment
agreement and in the decision to pay him $18 million in
connection with the Lockheed Martin merger. They cannot
now be expected to make a disinterested evaluation of
their own conduct.
Wherefore, plaintiff prays for judgment:
A. Enjoining or rescinding any payments to
Mr. Schwartz to be made in connection with the merger,
and/or awarding compensatory damages therefor.
B. Awarding plaintiff the reasonable costs
and disbursements of this action, including reasonable
attorney's fees.
Dated: New York, New York
February 9, 1996
SILVERMAN, HARNES & HARNES
International Plaza
750 Lexington Avenue
New York, New York 10022
(212) 754-2333