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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)--APRIL 23, 1996
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LOCKHEED MARTIN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 1-11437 52-1893632
(STATE OR OTHER (COMMISSION FILE NUMBER) (IRS EMPLOYER
JURISDICTION OF IDENTIFICATION NO.)
INCORPORATION)
6801 ROCKLEDGE DRIVE,
BETHESDA, MARYLAND
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
20817
(ZIP CODE)
(301) 897-6000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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NOT APPLICABLE
(FORMER NAME OR ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On January 7, 1996, Lockheed Martin Corporation (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 of 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. Subsequent to the consummation of
the Tender Offer, 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. ("Tactical Systems" or the "Company").
As a result of these transactions, Tactical Systems became a wholly owned
subsidiary of the Corporation. References in Item 7 and in Exhibits 99(a) and
99(b) of this Current Report on Form 8-K to "Loral Corporation and
Subsidiaries--Retained Business" constitute references to Tactical Systems.
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.
The purchase price paid by the Corporation in connection with the
transactions contemplated by the Loral Merger Agreement was determined by
arms-length negotiations between the Corporation and Loral. Prior to the
execution of the Loral Merger Agreement, other than certain contracts in the
ordinary course of business that were the result of arm's length negotiations,
neither the Corporation nor, to its knowledge, any of its affiliates,
directors or officers, or any associate of any director or officer, had any
material relationship with Loral.
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 by the Corporation and through borrowings under revolving
credit facilities (the "Credit Facilities") with a syndicate of commercial
banks formed by Morgan Guaranty Trust Company of New York and Bank of America
National Trust and Savings Association, as Co-Arrangers. 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. There are no required prepayments or scheduled reductions of
availability of loans under the Credit Facilities. Management of the
Corporation intends to refinance a portion of the indebtedness incurred in
connection with the consummation of the Tender Offer and the transactions
contemplated by the Loral Merger Agreement in the long-term debt markets.
Each Bank's obligation to make loans under the Credit Facilities is subject
to, among other things, compliance by the Corporation with various
representations, warranties, covenants and agreements, including but not
limited to covenants limiting the ability of the Corporation and certain of
its subsidiaries to encumber their assets and a covenant not to exceed a
maximum leverage ratio.
In connection with the closing of the Credit Facilities, the Corporation and
Loral each terminated their previously existing revolving credit facilities.
In connection with the consummation of the transactions contemplated by the
Loral Merger Agreement, the Corporation assumed the obligations of Loral as
guarantor under the Revolving Credit Agreement of Globalstar, L.P. (the
"Globalstar Revolving Credit Agreement"), an affiliate of Loral SpaceCom, and
the parties to the Globalstar Revolving Credit Agreement released Loral from
its prior guarantee. The maximum principal amount of loans to Globalstar, L.P.
that are guaranteed by the Corporation as a result of these transactions is
$250 million, subject to the assumption by certain of the Globalstar partners
of a portion of the Corporation's obligations as guarantor.
Reference is made to Item 5, "Other Events," for certain information
concerning the business of Tactical Systems.
ITEM 5. OTHER EVENTS
A. BUSINESS OF LOCKHEED MARTIN TACTICAL SYSTEMS, INC.
The principal businesses of Tactical Systems consist of electronic combat;
command, control, communications and intelligence ("C/3/I") and
reconnaissance; training and simulation; tactical weapons; systems
integration; and space. Tactical Systems supplies electronic systems,
components and services to the United States Government and foreign
governments for defense and non-defense applications.
Sales to the United States Government, excluding foreign military sales,
represented approximately 79.0% and 78.3% of Tactical Systems' sales for the
nine months ended December 31, 1995 and for the year ended March 31, 1995,
respectively.
Products and Services
Electronic Combat. The Electronic Combat business, which historically
concentrated primarily in the manufacture of self-protection devices,
electronic countermeasures and targeting/tracking systems for tactical fighter
jets and support aircraft, has grown to encompass military avionics,
helicopter, shipboard and armored vehicle systems integration.
The growing requirement for systems integration in aircraft, ship, and
ground vehicle defenses has caused the Electronic Combat business to develop
and acquire capabilities to integrate defense systems weapons, platforms and
sensors. In recent years, the Electronic Combat business has placed increased
importance on maritime and border surveillance, requiring capabilities the
Electronic Combat business acquired as a prime systems integrator for United
States and foreign government naval fixed-wing and rotary wing surveillance
aircraft.
The Electronic Combat business has prime systems integration responsibility
for the United Kingdom's EH-101 Merlin antisubmarine warfare (ASW) helicopter
and the United States Navy's Light Airborne Multipurpose System (LAMPS) Mk III
ASW helicopter. As prime contractor for the LAMPS Block II upgrade, the
Electronic Combat business is developing and integrating new radar, electronic
support measures, mission computing, control-and-display technology and new
operational software.
The Electronic Combat business also provides systems integration expertise
in both national and international shore- and carrier-based maritime patrol,
airborne early warning, and airborne command and control systems. Programs in
these areas include the P-3C Antisurface Warfare Improvement Program, the
Royal Australian Air Force P-3 Data Management System upgrade and the P-3C
Update III.
The Electronic Combat business produces and supplies the NITE Hawk forward
looking infrared (FLIR) targeting and weapon delivery pods. The NITE Hawk,
which permits United States Navy and Marine Corps
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F/A-18 pilots to autonomously identify, track and deliver precision munitions
on targets in daylight or darkness, is also being supplied to foreign
customers. The United States Navy's developmental F/A-18E/F will extend the
delivery pod's presence on the service's current strike jet.
In 1995, Electronic Combat was awarded a contract for the Intelligence and
Electronic Warfare Common Sensor (IEWCS) program, which is intended to provide
Army land combat elements with intelligence-gathering sensors and subsystems
that help identify, locate and determine the intentions of enemy forces. This
indefinite delivery and indefinite quantity production and integration program
calls for initially manufacturing, procuring and integrating three sensor
systems on various light and heavy air and ground platforms, including the
High Mobility Multi-Wheeled Vehicle and the EH-60L helicopter.
The Electronic Combat business in recent years has broadened its customer
base in the area of radar warning receivers (RWR). In addition to
manufacturing the ALR-56 family of advanced, programmable RWRs used on United
States Air Force and allied F-15 and F-16 jet fighters, Electronic Combat also
supplies the ALQ-178 Rapport fully integrated countermeasures suite, as well
as a new advanced jammer designated as ALQ-202 for both F-16 and F/A-18
fighter aircraft.
The Electronic Combat business also produces the Electronic Support Measures
system for the United States Air Force's B-2 Stealth bomber; a day/night,
adverse weather missions system for the MC-130H Combat Talon II aircraft and
the central computer for the F-15 jet fighter.
Command, Control, Communications & Intelligence (C/3/I) and
Reconnaissance. The C/3/I and Reconnaissance business focuses on meeting the
nation's strategic and tactical requirements by offering systems integration,
operations management and engineering services, post-deployment systems
support, military satellite communication terminals, information processing
and display hardware, information management software and secure tactical
communications systems.
The C/3/I and Reconnaissance business is developing a core system for United
States Air Force theater battle management, integrating operations and
intelligence information systems into an automated C/3/I system for planning
and executing air campaigns. This program, Theater Battle Management Core
System (TBMCS), has ties to associated contracts within Tactical Systems for
the Defense Message System and Global Transportation Network.
The C/3/I and Reconnaissance business has responsibility for defining the
architecture of the United States Air Force's Spacelift Range System under the
Range Standardization and Automation Phase IIA program. Using commercial or
non-developmental products, C/3/I and Reconnaissance is to design, integrate
and deliver systems to modernize the spacelift range assets over the next
decade.
Another responsibility of the C/3/I and Reconnaissance business is
modernizing the Global Positioning System (GPS) ground control software. C/3/I
and Reconnaissance is developing software that United States Air Force
satellite controllers will use to command and direct the advanced upgraded
Block IIR constellation of satellites that are expected to be launched
beginning in 1996. The business also supports the United States Air Force's
Satellite Control Network (AFSCN) command and control segment, including the
Command and Data Processing program, which has been engineered and is being
maintained to permit AFSCN operators to launch and track satellites in orbit,
and Engineering Services & Modifications, a program to implement AFSCN
modernization.
The C/3/I and Reconnaissance business provides technical support and
monitors orbiting space systems which are designed to alert the United States
and its allies of potential attacks. The Space Defense Operations Center
(SPADOC) allows the United States Space Command in Cheyenne Mountain to
determine whether a United States space system in Earth orbit is in danger of
colliding with another spacecraft or is threatened by a hostile object. This
business also supplies the Rapid Execution and Combat Targeting (REACT)
system, which standardizes the command and control system among various
intercontinental ballistic missile (ICBM) forces and
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permits rapid retargeting of on-alert missiles. It also provides operations,
maintenance, technical and engineering support at the National Test Facility
(NTF) at Falcon Air Force Base in Colorado Springs, Colorado. This contract
requires the C/3/I and Reconnaissance business to operate, maintain and
upgrade all simulation and test, data processing and communications systems at
the NTF, where the Air Force conducts simulations vital to the nation's
strategic defense.
In the undersea and shipboard area, the C/3/I and Reconnaissance business
programs have been expanded in recent years to include shipboard navigation
and combat control systems. Key programs in this area include the design,
development and integration of the combat systems for the United States Navy's
FFG-7 frigates, Canadian patrol frigates, the PFG-2 frigate for Taiwan, and
Australian Adelaide-class frigates. The business also makes the Mk 92 and Mk
76 fire control systems, the AN/USQ-70 Advanced Display System and standard
military computers, such as the AN/UYK-43 and UYK-44, for the United States
Navy.
Also in undersea systems, the C/3/I and Reconnaissance business supplies
antisubmarine warfare and combat control systems for submarines and surface
ships, including the AN/BSY-1 combat system for the United States Navy's SSN
688-class attack submarines and portions of the AN/BSY-2 combat control system
for the Navy's SSN 21 attack submarines. The business is responsible for the
design, development and integration of the navigation system for the United
States Navy's Trident Fleet Ballistic Missile submarines. The business
performs modifications to the United States Navy's AN/BQQ-5E submarine sonar
system for ballistic missile submarines, and is also under contract to develop
a high-priority, next-generation, deployable antisubmarine warfare
surveillance system for use in shallow water.
The C/3/I and Reconnaissance business has a contract to supply the United
States Army's Command and Control Vehicle (C/2/V) with state of the art
communications and computer equipment. The business is developing the
communications element of the All-Source Analysis System, a tactical
intelligence fusion system that will receive, process and display battlefield
information to tactical commanders in near real time.
The C/3/I and Reconnaissance business also manufactures and produces high-
performance intelligence collection and satellite communication systems for
the United States Department of Defense (DoD). These systems for strategic and
tactical operations include high data rate satellite communications,
battlefield imagery dissemination and weapons targeting data links.
Capabilities in this area include covert, anti-jam microwave communications,
communication systems integration and support, image compression, and spread
spectrum systems.
The reconnaissance systems produced by the C/3/I and Reconnaissance business
utilize advanced electronic imaging, communications and information processing
techniques to provide integrated tactical battlefield information and
navigation and targeting capability in airborne platforms for the United
States Air Force, Navy and Marines. These imaging products are a major
component of the Advanced Tactical Air Reconnaissance System (ATARS) program
for the United States Navy, the Long-Range Oblique Photography System
(LOROPS), the F-30-50 tactical reconnaissance pod and a tactical
reconnaissance system for German Tornado aircraft.
Among other activities, the C/3/I and Reconnaissance business manufactures
and sells the commercial data and voice recorders mandated by the Federal
Aviation Administration for commercial and general aviation aircraft.
Training & Simulation. The Training and Simulation business offers a range
of training capabilities with modular training solutions and complete training
curricula to fit a wide range of customer needs, from laser-based, force-on-
force combat training to full-fidelity cockpit and weapon systems trainers,
and from range training systems and instructor services to low-cost, computer-
driven simulators that let soldiers, sailors and aircrews train interactively.
The Training and Simulation business is assisting the United States Army
with a number of training initiatives, including the Close Combat Tactical
Trainer (CCTT) program, the Advanced Distributed Simulation
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and Training (ADST) program and Warfighters Simulation 2000. Through these
programs, Training and Simulation is leveraging the Army's investment in its
Simulation Networking (SIMNET) project to develop a computer-based capability
to simulate vehicles, weapon systems and dismounted infantry on a virtual
battlefield. The complementary Warfighters' Simulation 2000 is developing the
architecture for an advanced command and control simulation capability that is
intended to extend command post training exercises across all operational
levels.
The Training and Simulation business also provides the United States Army
and allied armed forces with computer-controlled target ranges for live-fire
training, featuring the first moving targets in the Army inventory. The
systems can be configured for use in infantry, armor, or helicopter gunship
training. The family of laser-based training systems produced by Training and
Simulation includes the Air-to-Ground Engagement System (AGES), the Precision
Gunnery Training System (PGTS), Simulated Area Weapons Effects (SAWE),
Precision Range Integrated Maneuver Exercise (PRIME), and Mobile Automated
Instrumentation Suite (MAIS). These laser-based training systems are utilized
in the training and evaluation of ground combat troops and military equipment
for the United States and allied defense departments.
The Training and Simulation business' long-established program base in
cockpit training systems includes the assessment of pilot training
requirements for the United States Air Force's next-generation F-22 jet
fighter, as well as supplying operational flight and weapons system trainers
that simulate F-15 and F-15E jet aircraft avionics under combat conditions. It
also supplies the United States Air Force Special Operations Forces Aircrew
Training System (SOF-ATS).
The Training and Simulation business also operates and maintains the United
States Navy's and Air Force's primary pilot training ranges and electronic
warfare ranges, providing instructors for classroom training and supplying
avionics and undersea simulators.
Tactical Weapons. The Tactical Weapons business is seeking to develop new
technological approaches while continuing to modify proven technologies to
enhance mission effectiveness and meet new requirements. The major program in
this area, the Patriot Advanced Capability (PAC III) missile, formerly known
as the Extended Range Interceptor (ERINT), is in the engineering and
manufacturing development (EMD) phase with the United States Army Missile
Command. PAC III, which replaces older, blast fragmentation technology with a
kinetic energy, hit-to-kill interceptor to destroy incoming ballistic
missiles, represents an important development in theater defense.
The Tactical Weapons business produces the Multiple Launch Rocket System
(MLRS), a saturation artillery rocket system designed and manufactured to
suppress enemy infantry, armor, fire support and air defenses. The MLRS has
substantial markets internationally. Fired from the same MLRS launcher, the
Army Tactical Missile System (ATACMS) provides a long-range, tactical missile.
An upgrade to ATACMS, the Block IA, features a Global Positioning System (GPS)
receiver and antenna that is intended to increase missile accuracy at longer
ranges.
The Vertical Launch Antisubmarine Warfare Rocket (VLA) produced by the
Tactical Weapons business provides United States Navy ships equipped with the
Mk 41 vertical launch system with a quick-reaction, urgent-attack ASW missile.
For U.S. infantry forces, including the Marine Corps and Army, the Tactical
Weapons business is developing the Predator and Multi-Purpose Individual
Munition short-range antitank and bunker-busting weapon that features a man-
portable fire-and-forget design.
The Tactical Weapons business is also involved in the Line-of-Sight Antitank
(LOSAT) portion of the AAWS-H program, including LOSAT's kinetic energy
missile. Additionally, Tactical Weapons' electro-optical and infrared (IR)
sensors, advanced algorithms and processors are employed in a wide range of
tactical weapons and guidance systems, and its IR sensors have been selected
for the United States Army's Theater High-Altitude
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Area Defense (THAAD) system, which is currently undergoing
demonstration/validation flight tests to verify its design and performance.
Other guidance programs within the Tactical Weapons business include the
Digital Scene Matching Area Correlation System (DSMAC) for Tomahawk cruise
missile guidance and the Sidewinder air-to-air missile, including the AIM-9M
and AIM-9P.
Systems Integration. The Systems Integration business integrates complex
hardware and software systems for the United States DoD, a wide range of non-
DoD government agencies and commercial customers.
The Systems Integration business is responsible for the Advanced Automation
System (AAS) upgrade for the Federal Aviation Administration (FAA) that will
be applied throughout United States airports. Under the restructured program,
Systems Integration is to develop and install the Display System Replacement
(DSR) for en route centers--the basic air traffic control system--and develop
the Tower Control Computer Complex (TCCC) for airport towers. Also in air
traffic management, Systems Integration is installing the state-of-the-art New
En Route Centre air traffic control system in the United Kingdom.
For the United States Postal Service, the Systems Integration business
supplies bar-code-based mail sorting systems and remote character recognition
systems to improve postal materials handling and delivery. The business's
postal automation expertise has been expanded to include the Advanced Facer
Canceler System/Input Subsystem, Flats Sorter Module (FSM 1000), Integrated
Retail Terminals, the Small Parcel and Bundle Sorter, and Self-Service Mailing
Centers.
Another program, the Document Processing System (DPS) for the Internal
Revenue Service, is being designed to image and store tax returns and
correspondence, thereby streamlining the task of processing hundreds of
millions of tax returns annually.
The Systems Integration business is involved with a number of programs that,
while serving the United States DoD, are related to large information systems
rather than weapon systems. For example, the Systems Integration business is
under contract with the United States DoD to install a new electronic mail and
messaging system that is to improve the ability of military and civilian
organizations and personal users worldwide to communicate with one another.
The Defense Message System-Government Open Systems Interconnection Profile
(DMS-GOSIP) will replace the DoD's current organizational messaging system.
Two other Systems Integration programs for DoD agencies have wide
applications. For the United States Army, Systems Integration is the prime
contractor for the Sustaining Base Information Services (SBIS) program, which
is being developed to comprehensively manage information and administrative
processing for personnel, payroll, financial accounting and records
management. Also, for the United States DoD, Systems Integration is developing
the Global Transportation Network (GTN), a worldwide command and control
system that will integrate data from a variety of diverse and widely
distributed transportation systems to provide a real-time capability for
centralized traffic management of all DoD materiel in times of both war and
peace.
In the commercial transportation area, for the United States Department of
Transportation and regional and state departments of transportation, Systems
Integration is involved in a number of programs to improve surface
transportation and to develop and implement advanced traveler information
services and traffic management centers under a national Intelligent
Transportation System initiative.
The Systems Integration business also includes the NEXRAD Doppler weather
radar system for the National Oceanic and Atmospheric Administration. The
business also produces the Medical Diagnostic Imaging System involving the
application of high-volume data storage and retrieval technologies into the
medical
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marketplace for the United States DOD, the Veterans Administration, university
medical centers or other private health care facilities.
Space. 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 performs Safety, Reliability, and Quality Assurance for
NASA's Space Shuttle and International Space Station programs. The business is
also responsible for designing, developing and integrating systems for the
Space Shuttle's onboard hardware and flight control software, and is
modernizing the Mission Systems Control center at Johnson Space Center in
Houston.
In space science, the Space business is developing the Atmospheric Infrared
Sounder (AIRS), a scientific instrument that will fly on NASA's Earth
Observing System (EOS) platform in the next century. At NASA's Goddard Space
Flight Center, the Space business is developing the computer system to store,
archive and distribute data collected by the EOSDIS system.
Other. The Tactical Systems businesses engage in a number of classified
programs that cannot be referred to specifically, but are included in the
consolidated financial statements. The nature of and business risks associated
with the classified programs do not differ materially from those other
programs and products in which the Corporation participates.
Customers
Substantially all of the products and services of the Tactical Systems
business are sold to agencies of the United States government, primarily to
the DOD, to foreign government agencies or to prime contractors or
subcontractors thereof. For the nine months ended December 31, 1995 and for
the year ended March 31, 1995, approximately $3.7 billion and $4.3 billion,
respectively, of Tactical Systems' sales were directly or indirectly
attributable to United States and foreign government defense contracts, and
approximately $900 million and $1.0 billion, respectively, were directly or
indirectly attributable to United States and foreign government non-defense
contracts. Total foreign sales (including foreign military sales) represented
18.0% and 18.6% of total sales for the nine months ended December 31, 1995 and
for the year ended March 31, 1995, respectively.
Backlog
Tactical Systems' funded backlog at December 31, 1995, totaled approximately
$7.0 billion, compared with approximately $6.4 billion at March 31, 1995. It
is expected that 53% of the backlog at December 31, 1995, will be recorded as
sales during calendar year 1996. At December 31, 1995, approximately $6.1
billion of funded backlog was directly or indirectly for United States and
foreign government defense contracts and approximately $900 million of funded
backlog was directly or indirectly for United States and foreign government
non-defense contracts. Foreign customers accounted for approximately $2.7
billion of the total backlog at December 31, 1995.
Competition
The Tactical Systems businesses face intense competition in all product and
service areas. All products must be designed to meet or exceed rigid
specifications and are subject to stringent testing procedures. Tactical
Systems' sales depend largely upon the quality, design and pricing of Tactical
Systems' products and services and the timeliness of deliveries. Most of
Tactical Systems' business is obtained through the submission of competitive
contract proposals.
Raw Materials and Seasonality
Tactical Systems has not experienced significant difficulties in its ability
to obtain raw materials and other supplies needed in the production process of
its products in recent years. None of Tactical Systems' businesses are
considered to be seasonal.
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Government Contracts
Tactical Systems' government contracts are normally for production, service
or development. Such contracts are typically of the fixed-price or cost-type
variety.
Fixed-price contracts may provide for a firm fixed-price or may be fixed-
type incentive contracts. Under a firm fixed-price contract, the contractor
agrees to perform for an agreed price and derives benefits from cost savings,
but bears the entire risk of cost overruns. Under a fixed-price incentive
contract, if actual costs incurred are less than estimated costs for the
contract, the savings are apportioned between the government and contractor.
However, if actual costs under such a contract exceed estimated costs, excess
costs are apportioned between the government and contractor up to a ceiling.
The contractor bears all costs that exceed the ceiling. Some firm fixed-price
contracts and fixed-price incentive contracts also provide for price
adjustments in the event inflation differs from specified measurement indices,
or in the event performance exceeds specified objectives or schedules.
Cost-type contracts generally provide for reimbursement of the contractor's
actual costs, to the extent such costs are allowable, and additional
compensation in the form of a fixed, incentive or award fee. Under cost-
sharing contracts, costs are apportioned between the government and contractor
according to an agreed formula. Cost-type contracts contain cost ceilings and
the contractor is not obligated to incur costs in excess of such ceilings.
All United States government contracts and subcontracts to which Tactical
Systems is a party are subject to audit, various cost controls and standard
provisions for termination at the convenience of the government. Multi-year
government contracts and related orders are subject to cancellation if funds
for contract performance for any subsequent year become unavailable. Upon
termination other than for a contractor's default, the contractor is normally
entitled to reimbursement for allowable costs, but not necessarily all costs,
and to an allowance for the proportionate share of fees or earnings for the
work completed. Foreign government contracts generally contain comparable
provisions relating to termination for the convenience of the government.
Government contractors are subject to certain business risks peculiar to the
defense industry. These risks include the ability of the government to
unilaterally suspend Tactical Systems from receiving new government contracts
pending resolution of alleged violations of procurement laws or regulations.
In addition, all government contractors are subject to risks associated with
dependence on government appropriations, changes in government procurement
policies, political environment, obtaining required government export licenses
for international sales, uncertain cost factors related to technologically
scarce skills and exotic components, the frequent need to bid on programs in
advance of design completion (which may result in unforeseen technological
difficulties and/or cost overruns), design complexity and rapid obsolescence,
and the constant necessity for design improvement.
Environmental Matters
Tactical Systems' operations are subject to and affected by a variety of
federal, state and local environmental protection laws and regulations.
Tactical Systems is involved in environmental responses at certain of its
facilities and at certain waste disposal sites not currently owned by Tactical
Systems (third-party sites) where Tactical Systems has been designated a
"potentially responsible party" (PRP) by the United States Environmental
Protection Agency (EPA). At such third-party sites, the EPA or a state agency
has identified the site as requiring removal or remedial action under the
federal "Superfund" and other related federal or state laws governing the
remediation of hazardous materials. Generally, PRPs that are ultimately
determined to be "responsible parties" are strictly liable for site clean-ups
and usually agree among themselves to share, on an allocated basis, in the
costs and expenses for investigation and remediation of the hazardous
materials. Under existing environmental laws, however, responsible parties are
jointly and severally liable and, therefore, Tactical Systems is potentially
liable for the full cost of funding such remediation. In the unlikely event
that Tactical
8
Systems will be required to fund the entire cost of such remediation, the
statutory framework provides that Tactical Systems may pursue rights of
contribution from other PRPs.
At third-party sites, Tactical Systems continues to pursue a course of
action designed to minimize and mitigate its potential liability through
assessing the legal basis for its involvement, including an analysis of such
factors as (i) the amount and nature of materials disposed of by Tactical
Systems, (ii) the allocation process, if any, used to assign all costs to all
involved parties and (iii) the scope of the response action that is or may
reasonably be required. Tactical Systems also continues to pursue active
participation in steering committees, consent orders and other appropriate and
available avenues. Management of Tactical Systems believes that this approach
should minimize Tactical Systems' proportionate share of liability at third-
party sites where other PRPs share liability.
Patents and Licenses
Although the Tactical Systems business owns some patents and has filed
applications for additional patents, it does not believe that its operations
depend upon its patents. In addition, Tactical Systems' United States
Government contracts generally license it to use patents owned by others.
Similar provisions in the United States Government contracts awarded to other
companies make it impossible for Tactical Systems to prevent the use by other
companies of its patents in most domestic work.
Research and Development
Tactical Systems employs scientific, engineering and other personnel to
improve its existing product lines and to develop new products and
technologies in the same or related fields. The largest portion of this work
is performed under specific United States Government contracts. At December
31, 1995, Tactical Systems employed approximately 11,700 engineers, of which
approximately 5,200 devote all or part of their effort to Tactical Systems-
sponsored research projects.
The amounts of research and development performed under customer-funded
contracts and Tactical Systems-sponsored research projects, including bid and
proposal costs, were as follows:
CUSTOMER- TACTICAL SYSTEMS-
FUNDED SPONSORED TOTAL
--------- ----------------- ------
(IN MILLIONS)
Nine months ended December 31, 1995..... $1,180 $174 $1,354
Year ended March 31, 1995............... $1,630 $228 $1,858
Personnel
At December 31, 1995, Tactical Systems employed approximately 35,100
persons. A significant part of the operations of Tactical Systems is dependent
upon professional, technical and engineering personnel whose tenure is not
generally secured by employment contracts. Tactical Systems has agreements
with labor organizations representing certain hourly employees.
Forward Looking Statements--Safe Harbor Provisions
This Current Report on Form 8-K contains statements, which, to the extent
they are not recitations of historical fact, constitute "forward looking
statements" within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. All forward looking
statements involve risks and uncertainties. The forward looking statements in
this document are intended to be subject to the safe harbor protection
provided by Sections 27A and 21E. For a discussion identifying some important
factors that could cause actual results to vary materially from those
anticipated in the forward looking statements see the Corporation's Securities
and Exchange Commission filings, including but not limited to, the discussion
of "Competition" and "Government Contracts" in this Current Report on Form 8-
K, Management's Discussion and Analysis of Financial Condition and Results of
Operations in Exhibits 99(a) and 99(b) of this Current Report
9
on Form 8-K and Notes 1, 2, 9, 10, 11, 13 and 14 to the Audited Consolidated
Financial Statements of "Loral Corporation and Subsidiaries--Retained
Business" included in Exhibit 99(a) to this Current Report on Form 8-K.
B. PROPERTIES OF LOCKHEED MARTIN TACTICAL SYSTEMS, INC.
Tactical Systems operates a number of plants and office facilities in the
United States and abroad. At December 31, 1995, Tactical Systems'
manufacturing, engineering, research, administrative, warehousing and sales
facilities aggregated approximately 24.2 million square feet, of which 58% was
owned by Tactical Systems and 42% was leased by Tactical Systems.
C. LOCKHEED MARTIN TACTICAL SYSTEMS, INC. LEGAL PROCEEDINGS
On July 7, 1995, Loral Corporation was served with a subpoena issued by the
United States Attorney for the Eastern District of New York, seeking documents
relating to a number of programs conducted at Loral Corporation's Defense
Systems-East (Great Neck, New York) operations. These operations now form a
part of Tactical Systems. Tactical Systems has been provided minimal
information concerning the focus of the investigation, but it appears to arise
from anonymous complaints provided to the Government by employees about
testing and quality control matters. Tactical Systems is unaware of any such
issues and is cooperating in the investigation.
D. AGREEMENT CONTAINING CONSENT ORDER WITH FEDERAL TRADE COMMISSION.
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 proposed Consent Order requires the Corporation to divest a systems
engineering and technical assistance contract with the United States Federal
Aviation Administration within six months of April 15, 1996. This contract is
one of those acquired as part of the Loral Transaction. The proposed Consent
Order also prohibits the Corporation from providing certain technical
services, personnel, information or facilities relating to the Corporation's
space businesses to Space Systems/Loral, Inc., a wholly owned subsidiary of
Loral SpaceCom.
Further, the proposed Consent Order prohibits any director or officer of the
Corporation who is also a director or officer of Loral SpaceCom (a "Common
Director or Officer") from participating in any matters involving or having
access to non-public information regarding the Corporation's space businesses,
or providing non-public information relating to Space Systems/Loral, Inc. to
the Corporation. Other than stock based compensation provided generally to
directors, the Corporation may not compensate a Common Director or Officer in
any manner based on the profitability or performance of the Corporation's
space businesses. Pursuant to the proposed Consent Order, in the event that
the Corporation's percentage ownership of the equity securities of Loral
SpaceCom increases above 20% at any time, the Corporation must reduce that
ownership interest to no more than 20%. Finally, the proposed Consent Order
prohibits the Corporation's military aircraft and unmanned aerial vehicle
businesses from access to certain non-public information that other of the
Corporation's businesses receive from aircraft manufacturers and unmanned
aerial vehicle manufacturers that compete with the Corporation and limits the
Corporation's use of that information to matters in connection with which the
information is provided.
The foregoing summary of the Consent Agreement is not intended to be a
complete description thereof and is qualified in its entirety by the Consent
Agreement and the proposed Consent Order, copies of which are included in the
Agreement Containing Consent Order incorporated by reference in this Current
Report on Form 8-K.
10
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
A. FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
The following Audited Consolidated Financial Statements of Loral Corporation
and Subsidiaries--Retained Business as of March 31, 1995 and 1994, and for
each of the three years then ended, and related Management's Discussion and
Analysis of Results of Operations and Financial Condition are included as
Exhibit 99(a) to this Current Report on Form 8-K:
PAGE
----
Management's Discussion and Analysis of Results of Operations and Finan-
cial Condition........................................................... A-2
Audited Consolidated Financial Statements
Report of Independent Auditors........................................... A-7
Consolidated Statements of Operations--Years ended March 31, 1995, 1994
and 1993................................................................ A-8
Consolidated Balance Sheets--March 31, 1995 and 1994..................... A-9
Consolidated Statements of Changes in Net Assets--Years ended March 31,
1995, 1994 and 1993..................................................... A-10
Consolidated Statements of Cash Flows--Years ended March 31, 1995, 1994
and 1993................................................................ A-11
Notes to the Consolidated Financial Statements........................... A-12
The following Unaudited Consolidated Financial Statements of Loral
Corporation and Subsidiaries--Retained Business as of December 31, 1995 and
March 31, 1995, and for the nine months ended December 31, 1995 and 1994, and
related Management's Discussion and Analysis of Results of Operations and
Financial Condition are included as Exhibit 99(b) to this Current Report on
Form 8-K.
PAGE
----
Management's Discussion and Analysis of Results of Operations and
Financial Condition...................................................... B-2
Unaudited Condensed Consolidated Financial Statements
Unaudited Condensed Consolidated Statements of Operations--Nine Months
ended December 31, 1995 and 1994........................................ B-5
Unaudited Condensed Consolidated Balance Sheets--December 31, 1995 and
March 31, 1995.......................................................... B-6
Unaudited Condensed Consolidated Statements of Changes in Net Assets--
Nine Months ended December 31, 1995 and 1994............................ B-7
Unaudited Consolidated Statements of Cash Flows--Nine Months ended
December 31, 1995 and 1994.............................................. B-8
Notes to Unaudited Condensed Consolidated Financial Statements........... B-9
11
B. PRO FORMA FINANCIAL INFORMATION
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, incorporated in the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1995; and the historical financial statements
of Tactical Systems and related notes thereto, included in this Current Report
on Form 8-K.
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
======= ====== =======
See accompanying notes to unaudited pro forma combined condensed financial
statements.
12
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.
13
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.
14
(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
=====
15
C. EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
99(a) Audited Consolidated Financial Statements of Loral Corporation and
Subsidiaries--Retained Business as of March 31, 1995 and 1994,
and for each of the three years then ended, and related
Management's Discussion and Analysis of Results of Operations and
Financial Condition.
99(b) Unaudited Condensed Consolidated Financial Statements of Loral
Corporation and Subsidiaries--Retained Business as of December
31, 1995 and March 31, 1995, and for the nine months ended
December 31, 1995 and 1994, and related Management's Discussion
and Analysis of Results of Operations and Financial Condition.
99(c) Revolving Credit Agreement (364 day), dated as of April 15, 1996,
by and among the Corporation, LAC Acquisition Corporation, the
Banks parties thereto, Morgan Guaranty Trust Company of New York,
as Documentation Agent, and Bank of America National Trust and
Savings Association, as Administrative Agent, incorporated by
reference herein from Amendment No. 10 to the Schedule 14D-1
filed by the Corporation with the Securities and Exchange
Commission (the "Commission") on April 19, 1996.
99(d) Revolving Credit Agreement (5 year), dated as of April 15, 1996,
by and among the Corporation, LAC Acquisition Corporation, the
Banks parties thereto, Morgan Guaranty Trust Company of New York,
as Documentation Agent, and Bank of America National Trust and
Savings Association, as Administrative Agent, incorporated by
reference herein from Amendment No. 10 to the Schedule 14D-1
filed by the Corporation with the Commission on April 19, 1996.
99(e) Agreement and Plan of Merger dated as of January 7, 1996, by and
among Loral Corporation, Lockheed Martin Corporation and LAC
Acquisition Corporation, incorporated by reference herein from
the Schedule 14D-1 in respect of Loral Corporation filed by the
Corporation with the Commission on January 12, 1996.
99(f) Letter Amendment dated as of April 15, 1996, to the Agreement and
Plan of Merger dated as of January 7, 1996, by and among Loral
Corporation, Lockheed Martin Corporation and LAC Acquisition
Corporation, incorporated by reference herein from Amendment No.
10 to the Schedule 14D-1 in respect of Loral Corporation filed by
the Corporation with the Commission on April 19, 1996.
99(g) Restructuring, Financing and Distribution Agreement dated as of
January 7, 1996, by and among Loral Corporation, Loral Aerospace
Holdings, Inc., Loral Aerospace Corp., Loral General Partner
Inc., Loral Globalstar, L.P., Loral Globalstar Limited, Loral
Telecommunications Acquisition, Inc. (to be renamed "Loral Space
& Communications Ltd.") and Lockheed Martin Corporation,
incorporated by reference herein from the Schedule 14D-1 in
respect of Loral Corporation filed by the Corporation with the
Commission on January 12, 1996.
99(h) Letter Amendment dated as of April 15, 1996, to the Restructuring,
Financing and Distribution Agreement dated as of January 7, 1996,
by and among Lockheed Martin Corporation, Loral Corporation,
Loral Space and Communications Corporation, Loral Aerospace
Holdings, Inc., Loral Aerospace Corp., Loral General Partner
Inc., Loral Globalstar, L.P., Loral Globalstar Limited, and Loral
Space & Communications Ltd., incorporated by reference herein
from Amendment No. 11 to the Schedule 14D-1 in respect of Loral
Corporation filed by the Corporation with the Commission on April
22, 1996.
99(i) Agreement Containing Consent Order entered into between Lockheed
Martin Corporation and the Federal Trade Commission on April 15,
1996, incorporated by reference herein from Amendment No. 11 to
the Schedule 14D-1 in respect of Loral Corporation filed by the
Corporation with the Commission on April 22, 1996.
99(j) Consent of Coopers & Lybrand L.L.P.
16
EXHIBIT NO. DESCRIPTION
----------- -----------
99(k)(i) Restated Certificate of Incorporation of Tactical Systems.
(ii) Certificate of Merger dated April 30, 1996 of LAC Acquisition
Corporation into Tactical Systems.
99(l) Bylaws of Tactical Systems, incorporated by reference herein from
the Annual Report on Form
10-K of Loral Corporation (now known as Tactical Systems) for
the year ended March 31, 1994.
17
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED.
Lockheed Martin Corporation
/s/ Robert E. Rulon
By: _________________________________
ROBERT E. RULON VICE PRESIDENT AND
CONTROLLER
1 May 1996
18
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
99(a) Audited Consolidated Financial Statements of Loral
Corporation and Subsidiaries--Retained Business as of March
31, 1995 and 1994, and for each of the three years then
ended, and related Management's Discussion and Analysis of
Results of Operations and Financial Condition.
99(b) Unaudited Condensed Consolidated Financial Statements of
Loral Corporation and Subsidiaries--Retained Business as of
December 31, 1995 and March 31, 1995, and for the nine
months ended December 31, 1995 and 1994, and the related
Management's Discussion and Analysis of Results of
Operations and Financial Condition.
99(c) Revolving Credit Agreement (364 day), dated as of April 15,
1996, by and among the Corporation, LAC Acquisition
Corporation, the Banks parties thereto, Morgan Guaranty
Trust Company of New York, as Documentation Agent, and Bank
of America National Trust and Savings Association, as
Administrative Agent, incorporated by reference herein from
Amendment No. 10 to the Schedule 14D-1 in respect of Loral
Corporation filed by the Corporation with the Commission on
April 19, 1996.
99(d) Revolving Credit Agreement (5 year), dated as of April 15,
1996, by and among the Corporation, LAC Acquisition
Corporation, the Banks parties thereto, Morgan Guaranty
Trust Company of New York, as Documentation Agent, and Bank
of America National Trust and Savings Association, as
Administrative Agent, incorporated by reference herein from
Amendment No. 10 to the Schedule 14D-1 in respect of Loral
Corporation filed by the Corporation with the Commission on
April 19, 1996.
99(e) Agreement and Plan of Merger dated as of January 7, 1996,
by and among Loral Corporation, Lockheed Martin Corporation
and LAC Acquisition Corporation, incorporated by reference
herein from the Schedule 14D-1 in respect of Loral
Corporation filed by the Corporation with the Commission on
January 12, 1996.
99(f) Letter Amendment dated as of April 15, 1996, to the
Agreement and Plan of Merger dated as of January 7, 1996,
by and among Loral Corporation, Lockheed Martin Corporation
and LAC Acquisition Corporation, incorporated by reference
herein from Amendment No. 10 to the Schedule 14D-1 in
respect of Loral Corporation filed by the Corporation with
the Commission on April 19, 1996.
99(g) Restructuring, Financing and Distribution Agreement dated
as of January 7, 1996, by and among Loral Corporation,
Loral Aerospace Holdings, Inc., Loral Aerospace Corp.,
Loral General Partner Inc., Loral Globalstar, L.P., Loral
Globalstar Limited, Loral Telecommunications Acquisition,
Inc. (to be renamed "Loral Space & Communications Ltd.")
and Lockheed Martin Corporation, incorporated by reference
herein from the Schedule 14D-1 in respect of Loral
Corporation filed by the Corporation with the Commission on
January 12, 1996.
99(h) Letter Amendment dated as of April 15, 1996, to the
Restructuring, Financing and Distribution Agreement dated
as of January 7, 1996, by and among Lockheed Martin
Corporation, Loral Corporation, Loral Space and
Communications Corporation, Loral Aerospace Holdings, Inc.,
Loral Aerospace Corp., Loral General Partner Inc., Loral
Globalstar, L.P., Loral Globalstar Limited, and Loral Space
& Communications Ltd., incorporated by reference herein
from Amendment No. 11 to the Schedule 14D-1 in respect of
Loral Corporation filed by the Corporation with the
Commission on April 22, 1996.
99(i) Agreement Containing Consent Order entered into between
Lockheed Martin Corporation and the Federal Trade
Commission on April 15, 1996, incorporated by reference
herein from Amendment No. 11 to the Schedule 14D-1 in
respect of Loral Corporation filed by the Corporation with
the Commission on April 22, 1996.
19
EXHIBIT NO. DESCRIPTION PAGE
----------- ----------- ----
99(j) Consent of Coopers & Lybrand L.L.P.
99(k)(i) Restated Certificate of Incorporation of Tactical Systems.
(ii) Certificate of Merger dated April 30, 1996 of LAC
Acquisition Corporation into Tactical Systems.
99(l) Bylaws of Tactical Systems, incorporated by reference
herein from the Annual Report on Form 10-K of Loral
Corporation (now known as Tactical Systems) for the year
ended March 31, 1994.
20