UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
Commission File No. 0-22531
PanAmSat Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-4607698
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
One Pickwick Plaza, Greenwich, CT 06830
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: 203-622-6664
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
As of June 30, 1999, an aggregate of 149,261,585 shares of the
Company's Common Stock were outstanding.
1
<PAGE>
Cautionary Statement for Purposes of the "Safe Harbor"
Provisions of the Private Securities Litigation Reform Act of 1995
This Quarterly Report on Form 10-Q contains certain forward-looking
statements. The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for certain forward-looking statements. When used in this
Quarterly Report on Form 10-Q, the words "estimate," "plan," "project,"
"anticipate," "expect," "intend," "outlook," "believe" and other similar
expressions are intended to identify forward-looking statements and information.
The Company identifies the following important factors which could cause the
Company's actual results to differ materially from any results which might be
projected, forecasted, estimated or budgeted by the Company in forward-looking
information: (i) risks associated with technology (including without limitation,
delayed launches, launch failures and in-orbit failures), (ii) regulatory risks,
including the ability to obtain export licenses, (iii) risks associated with the
Year 2000 issue and (iv) litigation. Such factors are more fully described in
"Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations" of this Quarterly Report on Form 10-Q and in "Item 3. Legal
Proceedings" and under the captions "Risk Factors" and "Year 2000 Readiness
Disclosure" in "Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1998 (the "Form 10-K"). Reference is also
made to such other risks and uncertainties detailed from time to time in the
Company's other filings with the Securities and Exchange Commission. The Company
cautions that the foregoing list of important factors is not exclusive.
Furthermore, the Company operates in an industry sector where securities values
may be volatile and may be influenced by economic and other factors beyond the
Company's control.
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PANAMSAT CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 6,748 $177,542
Accounts receivable-net 72,877 63,326
Net investment in sales-type leases 22,947 22,595
Prepaid expenses and other 51,611 38,692
Deferred income taxes 25,890 36,438
Insurance claim receivable 268,220 -
----------- -----------
Total current assets 448,293 338,593
SATELLITES AND OTHER PROPERTY AND
EQUIPMENT-Net 2,937,791 2,895,191
NET INVESTMENT IN SALES-TYPE LEASES 161,960 173,382
GOODWILL-Net of amortization 2,401,058 2,433,538
DEFERRED CHARGES 67,449 49,793
----------- -----------
TOTAL ASSETS $ 6,016,551 $ 5,890,497
----------- ------------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
3
<PAGE>
PANAMSAT CORPORATION
CONSOLIDATED BALANCE SHEETS - (continued)
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 137,439 $ 88,005
Deferred gains on sale-leasebacks 21,523 34,303
Deferred revenues 6,866 21,294
----------- -----------
Total Current Liabilities 165,828 143,602
DUE TO AFFILIATES (PRINCIPALLY MERGER-RELATED INDEBTEDNESS) 1,800,357 1,788,353
LONG-TERM DEBT 835,056 750,056
DEFERRED GAINS ON SALE-LEASEBACKS 59,595 121,477
DEFERRED INCOME TAXES 272,055 231,373
DEFERRED CREDITS AND OTHER (PRINCIPALLY
CUSTOMER DEPOSITS AND DEFERRED
REVENUE) 115,965 111,239
ACCRUED OPERATING LEASEBACK EXPENSE 17,061 55,982
----------- -----------
TOTAL LIABILITIES 3,265,917 3,202,082
----------- -----------
COMMITMENTS AND CONTINGENCIES
</TABLE>
4
<PAGE>
<TABLE>
<S> <C> <C>
STOCKHOLDERS' EQUITY:
Common Stock, $0.01 par value -- 400,000,000
shares authorized; 149,261,585 and 149,231,121
outstanding at June 30, 1999 and December 31, 1998,
respectively 1,492 1,492
Additional paid-in-capital 2,505,502 2,504,316
Retained earnings 243,640 182,607
----------- -----------
Total stockholders' equity 2,750,634 2,688,415
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 6,016,551 $ 5,890,497
----------- -----------
The accompanying notes are an integral part of these consolidated financial statements
</TABLE>
5
<PAGE>
PANAMSAT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months Ended June 30, 1999 and 1998
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
June 30, June 30,
1999 1998
----------- -----------
<S> <C> <C>
REVENUES:
Operating leases, satellite services and other $ 194,421 $ 185,277
Outright sales and sales-type leases 5,961 5,803
----------- -----------
Total revenues 200,382 191,080
----------- -----------
OPERATING COSTS AND EXPENSES:
Leaseback expense, net of deferred gain 7,696 11,822
Depreciation and amortization 68,473 60,915
Direct operating costs 25,685 24,226
Selling, general and administrative expenses 16,136 14,234
Provision for loss on Galaxy IV - 6,314
----------- -----------
Total operating costs and expenses 117,990 117,511
----------- -----------
INCOME FROM OPERATIONS 82,392 73,569
INTEREST EXPENSE, NET 28,295 24,432
----------- -----------
INCOME BEFORE INCOME TAXES 54,097 49,137
INCOME TAXES 23,532 21,380
----------- -----------
NET INCOME $ 30,565 $ 27,757
----------- -----------
NET INCOME PER COMMON SHARE - basic and diluted
$ 0.20 $ 0.19
----------- -----------
Weighted average common shares outstanding 149,304,802 149,725,807
----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
6
<PAGE>
PANAMSAT CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Six Months Ended June 30, 1999 and 1998
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
June 30, June 30,
1999 1998
----------- -----------
<S> <C> <C>
REVENUES:
Operating leases, satellite services and other $ 381,803 $ 367,065
Outright sales and sales-type leases 12,088 17,040
----------- -----------
Total revenues 393,891 384,105
----------- -----------
OPERATING COSTS AND EXPENSES:
Leaseback expense, net of deferred gain 15,391 25,584
Depreciation and amortization 136,207 118,917
Direct operating costs 50,923 46,547
Selling, general and administrative expenses 30,663 28,298
Provision for loss on Galaxy IV - 6,314
----------- -----------
Total operating costs and expenses 233,184 225,660
----------- -----------
INCOME FROM OPERATIONS 160,707 158,445
INTEREST EXPENSE, NET 52,684 46,640
----------- -----------
INCOME BEFORE INCOME TAXES 108,023 111,805
INCOME TAXES 46,990 48,700
----------- -----------
NET INCOME $ 61,033 $ 63,105
----------- -----------
NET INCOME PER COMMON SHARE - basic and diluted
$ 0.41 $ 0.42
----------- -----------
Weighted average common shares outstanding
149,430,623 149,652,612
----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
7
<PAGE>
PANAMSAT CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30, 1999 and 1998
(In Thousands)
<TABLE>
<CAPTION>
June 30, June 30,
1999 1998
----------- -----------
<S> <C> <C>
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income $61,033 $ 63,105
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 136,207 118,917
Deferred income taxes 51,230 59,222
Amortization of gains on sale-leasebacks (10,762) (18,988)
Amortization of debt issuance costs 3,055 2,843
Interest expense capitalized (28,090) (28,984)
Provision for uncollectible receivables (680) -
Provision for loss on Galaxy IV - 6,314
Changes in assets and liabilities:
Collections on investments in sales-type leases 11,069 30,380
Operating leases and other receivables (8,871) (39,780)
Prepaid expenses and other assets (37,327) (13,900)
Accounts payable and accrued liabilities 24,178 1,724
Accrued operating leaseback expense (18,624) (18,913)
Deferred gains and revenues 5,605 (16,148)
----------- -----------
Net cash provided by operating activities 188,023 145,792
----------- -----------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (305,813) (215,217)
Early buyout of sale-leaseback (141,253) (155,530)
Net book value of satellites recovered through insurance 5,110 29,121
----------- -----------
Net cash used in investing activities (441,956) (341,626)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
New borrowings 760,000 975,000
Repayments of long-term debt (675,000) (739,914)
Repayments of incentive obligations (3,047) (30,250)
Stock issued to 401(k) plan 1,186 1,914
----------- -----------
Net cash provided by financing activities 83,139 206,750
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(170,794) 10,916
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
177,542 91,739
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD
$ 6,748 $102,655
----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash received for interest $ 2,369 $ 8,464
----------- -----------
Cash paid for interest $ 78,959 $ 60,067
----------- -----------
Cash paid for taxes $ 9,261 $ 1,919
----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements
9
<PAGE>
PANAMSAT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) General.
These unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments which are of a normal recurring nature necessary to present
fairly the financial position, results of operations and cash flows as
of and for the three and six month periods ended June 30, 1999 and 1998
have been made. Operating results for the three months and six months
ended June 30, 1999 and 1998 are not necessarily indicative of the
operating results for the full year. For further information, refer to
the financial statements and footnotes thereto included in the Form
10-K.
(2) Satellite Developments
Reference is made to "Item 1. - Business - The Satellites - Planned
Satellites / Satellite Deployment Plan" and "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operations - Spacecraft Developments and - Satellite Deployment Plan"
in the Form 10-K for a detailed description of the Company's satellite
fleet and its satellite expansion and restoration plan. For a
discussion of certain delays related to the Company's launch and
in-service dates for satellites under construction and development, see
"Management's Discussion and Analysis of Financial Condition and
Results of Operations- Satellite Developments" in this Quarterly Report
on Form 10-Q.
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<PAGE>
PANAMSAT CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company's selected operating data shown below are not necessarily
indicative of future results.
SELECTED OPERATING DATA
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
(unaudited; in thousands) (unaudited; in thousands)
1999 1998 1999 1998
<S> <C> <C>
Operating lease revenues $194,421 $185,277 $381,803 $367,065
Outright sales and sale-type lease revenues 5,961 5,803 12,088 17,040
Total revenues 200,382 191,080 393,891 384,105
Leaseback expense, net of deferred gain 7,696 11,822 15,391 25,584
Direct operating and SG&A costs 41,821 38,460 81,586 74,845
Depreciation and amortization 68,473 60,915 136,207 118,917
Income from operations 82,392 73,569 160,707 158,445
Interest expense, net 28,295 24,432 52,684 46,640
Income tax expense 23,532 21,380 46,990 48,700
</TABLE>
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PANAMSAT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Revenues. Revenues increased $9.3 million, or 5%, to $200.4 million for
the three months ended June 30, 1999 from $191.1 million for the same period in
1998. Revenues for the six months ended June 30, 1999 were $393.9, an increase
of $9.8 million, or 3%, from $384.1 million for the same period in 1998. These
changes are principally a result of changes based upon type of service offering.
The Company provides video services which are primarily full-time, part-time and
occasional satellite services for the transmission of news, sports,
entertainment and educational programming worldwide. The Company also provides
telecommunications services which support satellite-based networks that relay
voice, video and data communications within individual countries, throughout
regions and on a global basis. Video services revenues were $142.0 million for
the three months ended June 30, 1999, an increase of 2% from the same period in
1998. Video services revenues were $279.7 million for the six months ended June
30, 1999, a decrease of 1% from the same period in 1998. The increase in video
services revenues for the three months ended June 30, 1999 was due primarily to
the commencement of new service agreements for full-time video distribution
services. The decrease in video services revenues for the six months ended June
30, 1999 was primarily due to lower revenues on the PAS-5 satellite in 1999
resulting from a reduction in its usable capacity. Telecommunications services
revenues were $47.2 million for the three months ended June 30, 1999, an
increase of 19% from the same period in 1998. Telecommunications services
revenues were $91.7 million for the six months ended June 30, 1999, an increase
of 19% from the same period in 1998. The increase in telecommunications services
revenues was due primarily to the growth in data and Internet-related services
during 1999.
Revenues can also be analyzed based on the type of agreement. Revenues
from sales and sales-type leases increased to $6.0 million for the three months
ended June 30, 1999 from $5.8 million for the same period in 1998. Revenues from
sales and sales-type leases decreased to $12.1 million for the six months ended
June 30, 1999 from $17.0 million for the same period in 1998. The decrease for
the six months ended June 30, 1999 is attributable to a lower volume in 1999
relative to 1998 of sales-type lease agreements outstanding. Revenues from
operating leases of transponders, satellite services and other increased $9.1
million, or 5%, to $194.4 million for the three months ended June 30, 1999 from
$185.3 million for the same period in 1998. Revenues from operating leases of
transponders, satellite services and other increased $14.7 million, or 4%, to
$381.8 million for the six months ended June 30, 1999 from $367.1 million for
the same period in 1998. The increase in revenues from operating leases of
transponders, satellite services and other for the three and six month periods
is due primarily to increased available transponder capacity on new satellites
placed in service since the first quarter of 1998.
Leaseback Expense, Net of Deferred Gain. Leaseback expense, net of
deferred gain, decreased $4.1 million, or 35%, to $7.7 million for the three
months ended June 30, 1999, from $11.8 million for the same period in 1998.
Leaseback expense, net of deferred gain, decreased $10.2 million, or 40%, to
$15.4 million for the six months ended June 30,
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1999 from $25.6 million for the same period in 1998. The decrease is primarily
attributable to the exercise by the Company of certain sale-leaseback early
buy-out options during 1998 and 1999.
Direct Operating and Selling, General and Administrative Costs. Direct
operating and selling, general and administrative costs increased $3.3 million,
or 9%, to $41.8 million for the three months ended June 30, 1999 from $38.5
million for the same period in 1998. Direct operating and selling, general and
administrative costs increased $6.8 million, or 9%, to $81.6 million for the six
months ended June 30, 1999 from $74.8 million for the same period in 1998. The
increase is due primarily to direct costs associated with the addition of three
new satellites placed in service and costs associated with the continued growth
of the Company.
Depreciation and Amortization. Depreciation and amortization increased
$7.6 million, or 12%, to $68.5 million for the three months ended June 30, 1999
from $60.9 million for the same period in 1998. Depreciation and amortization
for the six months ended June 30, 1999 increased $17.3 million, or 15%, to
$136.2 million from $118.9 million for the same period in 1998. The increase in
depreciation and amortization for the three and six month periods is due
primarily to depreciation expense associated with the addition of three new
satellites placed in service.
Income from Operations. Income from operations increased $8.8 million,
or 12%, to $82.4 million for the three months ended June 30, 1999 from $73.6
million for the same period in 1998. Income from operations increased $2.3
million, or 1%, to $160.7 million for the six months ended June 30, 1999 from
$158.4 million for the same period in 1998. The increase in income from
operations for the three and six months ended June 30, 1999, is due primarily to
higher operating lease revenues coupled with lower leaseback expense resulting
from the exercises by the Company of sale-leaseback early buy-out options during
1998 and 1999.
Interest Expense, Net. Interest expense, net increased $3.9 million, or
16%, to $28.3 million for the three months ended June 30, 1999, from $24.4
million for the same period in 1998. Interest expense, net increased $6.1
million, or 13%, to $52.7 million for the six months ended June 30, 1999 from
$46.6 million for the same period in 1998. The increase was due primarily to
lower levels of interest income in 1999 and higher interest expense as the
public notes were outstanding for the entire six months of 1999 as opposed to a
portion of the same period in the prior year.
Income Tax Expense. Income tax expense increased $2.1 million, or 10%,
to $23.5 million for the three months ended June 30, 1999, from $21.4 million
for the same period in 1998. Income tax expense decreased $1.7 million, or 3%,
to $47.0 million for the six months ended June 30, 1999 from $48.7 million for
the same period in 1998. The effective tax rate remained at a consistent level
between 1999 and 1998 and the changes in tax expense referred to above were
therefore due principally to changes in income before income taxes.
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<PAGE>
Satellite Developments. Reference is made to "Item 1. - Business - The
Satellites - Planned Satellites / Satellite Deployment Plan" and "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Spacecraft Developments and - Satellite Deployment Plan" in the
Form 10-K for a detailed description of the Company's satellite fleet and its
satellite expansion and restoration plan.
The Company currently has seven satellites under construction and
development by Hughes Space & Communications Company ("HSC"). As previously
reported by the Company on its Form 10-Q for the quarter ended March 31, 1999,
as a result of manufacturing delays communicated to the Company by HSC in May
1999, the Company revised its satellite launch schedule. Based upon information
provided by HSC, the Company's current estimate of the launch and in-service
dates for the satellites under construction remains the same as previously
reported and is repeated in the following chart. Preliminary indications from
the Company's launch providers are that they can accommodate the revised launch
schedule. No assurance can be given that further delays in the satellite
delivery, launch or in-service dates will not occur.
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<PAGE>
<TABLE>
<CAPTION>
Spacecraft Launch Date In-Service Date
<S> <C> <C>
Galaxy XI Q4-1999 Q1-2000
Galaxy X-R Q1-2000 Q2-2000
Galaxy IV-R Q1-2000 Q2-2000
PAS-1R Q2-2000 Q3-2000
PAS-9 Q2-2000 Q3-2000
PAS-10* Q2/Q3-2000 Q3/Q4-2000
Galaxy III-C Q1/Q2-2001 Q2/Q3-2001
</TABLE>
*Previously announced as a new satellite that can serve as a backup or
replacement of PAS-4.
Regulatory Developments. Effective March 1999, the U.S. government
transferred the administration of export licensing and controls related to
communications satellites from the Department of Commerce to the Department of
State by adding communications satellites to the munitions list subject to the
International Traffic in Arms Regulations ("ITAR"). As a result, additional
restrictions and regulations now apply to the transfer of certain types of
information related to communications satellites and related ground control
equipment, as well as to the rendering of certain types of services related to
such satellites and equipment, to non-U.S. persons such as launch providers,
insurers, potential and existing customers, non-U.S. employees, non-U.S.
regulatory bodies such as the International Telecommunications Union, non-U.S.
national telecommunications authorities, and any other "Foreign Person" as
defined under ITAR. The Department of State's interpretation and application of
the ITAR restrictions and regulations to the Company's operations is not yet
clear. However, it is possible that the ITAR restrictions and regulations could
adversely affect or delay the Company's ability to launch and insure its
satellites and to sell capacity to non-U.S. customers.
Financial Condition. In addition to a term loan in the amount of $1.725
billion from Hughes Electronics Corporation, an affiliate of the Company, at
June 30, 1999 the Company also had long-term indebtedness of $835.1 million
(comprised primarily of $750 million of public notes and $85.0 million of notes
outstanding under the Company's commercial paper program).
The significant cash outlays for the Company will continue to be
primarily capital expenditures related to the construction and launch of
satellites, debt service costs and potential acquisitions. The Company now has
seven satellites under various stages of development for which the Company has
budgeted capital expenditures. The Company will require approximately $675
million to complete the construction, insure and launch such satellites. In
addition to funding the construction and launch of new satellites, the Company
has exercised its remaining early buy-out options under certain satellite
sale-leaseback transactions entered into in prior years. In January 1999, the
Company funded outlays of $141.3 million in cash in connection with the early
buy-out of transponders on the Galaxy VII satellite. On July 2, 1999, the
Company executed the last of its early buy-out opportunities on the Galaxy VII
and Galaxy III-R satellites. The total cost was approximately $104 million in
cash plus the assumption of $124 million of floating rate debt (LIBOR + 25bp)
following the July exercise of the early buy-out opportunities and is secured by
the transponders. As a result, the Company's cash, deferred gains on
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<PAGE>
sale-leasebacks and accrued operating leaseback expense balances have declined
from December 31, 1998. Other than indemnity obligations, the Company no longer
has any obligations under sale-leaseback agreements.
In April 1999, the Company filed two insurance claims related to
anomalies on its PAS-8 and PAS-5 satellites, which anomalies are more
specifically described in the Company's Form 10-K. The claim on the PAS-8
satellite is for a partial loss primarily resulting from the loss in geographic
coverage, connectivity and/or switchability of the Ku-band
transponders. The claim on PAS-5 is for a constructive total loss of the
satellite because the Company has ceased using all of the Ku-band capacity of
the satellite on a full-time basis, and this capacity represents more than 50%
of the satellite's communications capacity. To the extent that such claims are
paid by the insurers, future revenues on PAS-5 and the affected transponders on
PAS-8 may be subject to certain revenue-sharing provisions of the insurance
policy. The aggregate amount of these insurance claims is approximately $270
million. There can be no assurance that the Company will recover the full
amount of the claims.
PanAmSat believes that funds available from operations, insurance
claims, and its existing financing programs will be sufficient to fund its
planned obligations over the balance of 1999. There can be no assurance,
however, that PanAmSat's assumptions with respect to future construction and
launch costs will be correct, or that funds available from its existing sources
will be sufficient to cover any shortfall in funding caused by launch failures,
cost overruns, delays or other unanticipated expenses. The failure to obtain
such funds could have a material adverse effect on PanAmSat's operations and its
ability to accomplish its business plan. In addition, any strategic transactions
or other significant projects that the Company might undertake would require
additional financing which financing would be subject to the terms of PanAmSat's
existing indebtedness.
Net cash provided by operating activities increased to $188.0 million
for the six months ended June 30, 1999, from $145.8 million for the six months
ended June 30, 1998. The increase in 1999 was primarily attributable to lower
working capital offset by lower levels of deferred gain amortization due to the
exercise of early buy-out options.
Net cash used in investing activities increased to $442.0 million for
the six months ended June 30, 1999, from $341.6 million for the six months ended
June 30, 1998. The increase in 1999 was primarily attributable to increased
capital expenditures for satellite systems under development.
Net cash provided by financing activities decreased to $83.1 million
for the six months ended June 30, 1999 from $206.8 million for the six months
ended June 30, 1998. The decrease in 1999 was primarily due to lower net
borrowings during the first six months of 1999.
Year 2000 Readiness Disclosure. Many of the world's computer systems
currently use a two-digit format, as opposed to a four-digit format, to indicate
the year. If not modified, these computer systems will be unable to properly
recognize dates beyond the year 1999, which could lead to system failures and
business disruption in the U.S. and
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<PAGE>
internationally. The Company's Year 2000 Plan ("Y2K Plan") addresses Year 2000
issues in the following phases:
(i) identification of the Company's systems, equipment and suppliers
that may be vulnerable to Year 2000 issues;
(ii) assessment of the areas identified to determine risks associated
with their failure to be Year 2000 compliant and corrective
actions that would be necessary to prevent such failure;
(iii) correction of affected systems and equipment;
(iv) testing of systems and equipment to determine if Year 2000
compliant; and
(v) contingency planning for reasonably likely worst-case scenarios.
PanAmSat commenced its Y2K Plan in 1997. A project team consisting of
members of the engineering, operations, and software development groups meets
regularly and is in charge of plan scheduling and implementation. Identification
of susceptible systems and assessment of the corrective actions has been
completed by all functional areas.
None of the Company's primary assets, the in-orbit satellites, have
date-dependent processing and therefore they are not at substantial risk due to
Year 2000 issues. Stationkeeping operations for the Company's satellites are not
date-dependent and no real-time commands will be required at the time of the
date change.
Correction of the Company's telemetry, tracking and control ("TT&C")
software for the HSC-manufactured satellites is the most significant component
of the Y2K Plan. The core TT&C software was delivered by Raytheon, the software
vendor, in March 1999. Modification of the PanAmSat-unique sections of the
software code began immediately and were completed during the second quarter of
1999. Integration of the unique and Raytheon sections of the software was also
completed during the second quarter. All subsystem-level and system level
testing of the combined code is complete. Installation of the software at remote
TT&C sites started in July 1999 and is scheduled for completion in August 1999,
marking the date at which the ground software will be compliant for all existing
in-orbit satellites operated by PanAmSat. Software for satellites to be launched
during the fourth quarter of 1999 and the first quarter of 2000 is to be
delivered to PanAmSat during the third quarter of 1999 in a Y2K compliant state.
Final testing of the entire software system, including newly-delivered Y2K
compliant software, is scheduled for the fourth quarter of 1999.
Raytheon is also responsible for delivery of many of the satellite
simulators used by PanAmSat for individual satellite procedure verification and
anomaly resolution. The majority of the satellite simulators have been
delivered, but the final simulator is not scheduled for delivery until November
1999. PanAmSat has worked with Raytheon to prioritize the simulator deliveries
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so that there are no impacts on the overall software remediation schedule and no
delays to PanAmSat's overall Y2K compliance verification are anticipated.
Five of PanAmSat's satellites are controlled by third party satellite
operators. PanAmSat has sent requests for compliance certification, remediation
schedules, and contingency plans to each of these operators. GE Americom,
operator of PAS-1, has responded that both the satellite and the TT&C network
are fully compliant. Loral Space & Communications, the operator of three of the
Company's satellites, has informed the Company that final installation of
certain TT&C equipment previously expected to be completed by the end of the
first quarter of 1999, will not be completed until October 1999. Remediation and
testing of Loral's TT&C software is completed and installation of the codes at
all control sites is expected to be completed during August 1999. Optus,
operator of PAS-4, has completed remediation of their control software and
expects to complete testing and final installation during August 1999. PanAmSat
is continuing to work with its third-party operators to obtain the information
required, and create acceptable contingency plans, and to expedite remediation
schedules wherever possible.
PanAmSat has recently added Arianespace to its list of critical service
suppliers who are required to provide documentation of Y2K compliance.
Arianespace has provided information stating that remediation efforts to their
facilities, ground control systems, and launch vehicles are currently underway
and expect to be complete by the third quarter of 1999.
Compliance verification requests have been sent to all other identified
third-party equipment and system suppliers. PanAmSat's Y2K Plan team worked with
such suppliers to correct all non-compliant systems and most met our target
compliance date of June 30, 1999. Several vendors, however, still have
outstanding issues. Upgrades to most compressed digital video (CDV) systems are
complete and the remaining system update is scheduled for completion in August
of 1999. Replacement of certain network and communications equipment is
scheduled to occur during the third quarter of 1999. Software upgrades for a
payload monitoring system are in process and will be completed during the third
quarter of 1999. In addition, the Company is acquiring a new carrier monitoring
system ("CMS") for monitoring and troubleshooting remote customer transmissions
to replace the Company's existing system (which is not Year 2000 compliant).
While the Company has begun to install the CMS at the Company's monitoring
sites, final installation will not occur until the fourth quarter of 1999. All
mission critical components are already accounted for in the Company's
contingency plan.
An older CDV system still occasionally used by PanAmSat for services on
PAS-1 is no longer supported by its vendor. The equipment is fully compliant
when operated in unencrypted mode rather than encrypted mode, and the Company
plans to replace the system when the existing services are transferred to
PAS-1R, which will not occur until 2000 due to a delay in the PAS-1R launch
date. Consequently, with the consent of the customers, PanAmSat has begun
operating the existing CDV equipment on PAS-1 in unencrypted mode and will
continue to operate in that mode until the transfer of services to PAS-1R.
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The Company has also completed an evaluation of the various management
information systems used by the Company for financial and administrative
functions and has determined that such systems are largely Y2K compliant.
Upgrades to non-compliant hardware systems are 98% complete and software
applications are 70% complete. Final hardware and software upgrades are
scheduled for completion during the third quarter of 1999. Modifications to core
business systems are complete and final testing of those systems is also
scheduled for the third quarter of 1999. Existing back-up procedures can be used
to perform normal Company financial and administrative functions in the event of
potentially uncorrected problems.
The Company has identified the potential loss of real-time satellite
control software functionality as a reasonably likely worst case scenario. A
contingency plan involving the use of back-dated processors installed at each of
the primary TT&C locations has been developed to maintain satellite control
capability for Hughes-built spacecraft in the event the main software processing
system experiences a failure during a date rollover. Experienced satellite
control personnel will also be deployed to the primary TT&C sites. On site
personnel and data processing capability also eliminates the external fiber
telecommunications lines from being a part of the Company's critical failure
path. Formal contingency plans were completed in March 1999 and contingency
procedures were completed during the second quarter of 1999. Installation of the
processors and contingency plan testing is scheduled for August of 1999.
Internal efforts on Y2K projects have had a minimal impact on other
non-Y2K IT and non-IT projects. Any transition of activities currently being
performed by third-party Y2K solutions providers to internal resources could
delay some internal software projects.
The Y2K Plan is funded from cash flows from the Company's operations.
Approximately $2.4 million has been incurred through June 30, 1999 in connection
with the Y2K Plan. Of this amount, approximately $250,000 was incurred in 1998
and $200,000 during 1997. The total cost through completion of the Y2K Plan is
expected to be approximately $4.4 million, representing an increase from
previously estimated costs due primarily to the utilization of additional
external Y2K solutions providers. No assurance can be given that the cost of the
Y2K Plan will not increase.
Based on its current assessment efforts, the Company does not believe
that Year 2000 issues will have a material adverse effect on the financial
condition or results of operations of the Company. The Company's Year 2000
issues, however, and any potential business interruption, costs, damages, or
losses related thereto, are also dependent upon the Year 2000 compliance of
third parties, both domestic and international, such as governmental agencies,
vendors and suppliers. As a result, the Company is unable to determine at this
time whether Year 2000 issues for third parties will materially affect the
Company.
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PANAMSAT CORPORATION
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The Annual Meeting of Stockholders was held on May 5, 1999.
(b) (i) Registrant's Certificate of Incorporation provides that
nominees to the Registrant's Board of Directors shall be elected
to serve as directors until the next annual meeting of
stockholders or until their successors are elected and have
qualified. The eleven nominees for director, Mr. Michael T.
Smith, Ms. Roxanne S. Austin, Mr. Patrick J. Costello, Mr.
Dennis F. Hightower, Mr. James M. Hoak, Mr. R. Douglas Kahn, Mr.
Stephen R. Kahn, Mr. Tig H. Krekel, Mr. Frederick A. Landman,
Mr. Charles H. Noski and Mr. Joseph R. Wright, Jr., were elected
by plurality of the votes cast by the holders of Registrant's
Common Stock voting thereon:
(A) Mr. Smith: 130,490,559 votes for and 97,925 votes withheld;
(B) Ms. Austin: 130,490,059 votes for and 98,425 votes withheld;
(C) Mr. Costello: 130,490,559 votes for and 97,925 votes withheld;
(D) Mr. Hightower: 130,490,559 votes for and 97,925 votes withheld;
(E) Mr. Hoak: 130,490,559 votes for and 97,925 votes withheld;
(F) Mr. R. Douglas Kahn: 130,490,259 votes for and 98,225 votes
withheld;
(G) Mr. Stephen R. Kahn: 130,475,126 votes for and 113,358 votes
withheld;
(H) Mr. Krekel: 130,475,059 votes for and 113,425 votes withheld;
(I) Mr. Landman: 130,490,126 votes for and 98,358 votes withheld;
(J) Mr. Noski: 130,490,059 votes for and 98,425 votes withheld;
(K) Mr. Wright: 130,490,559 votes for and 97,925 votes withheld;
(c) (v) A proposal (designated Proposal 2 and set forth in
Registrant's Proxy Statement), approved by the Board of
Directors, to elect Deloitte & Touche LLP as the Registrant's
independent accountants for 1999, was approved by a majority of
the votes cast by the holders of Registrant's Common Stock
voting thereon: 130,576,941 affirmative votes; 3,010 negative
votes; 8,533 votes abstained.
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ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No.
3.2 Restated Bylaws of PanAmSat Corporation
10.15.11 Amendment No. 6 dated as of June 4, 1999, to Agreement
for Launching into Geostationing Transfer Orbit of PanAmSat
Satellites by an Ariane Launch Vehicle, No. 95.5.933, between
PanAmSat and Arianespace S.A., constituting Exhibit 10.12.3 to
PanAmSat International Systems, Inc.'s ("PanAmSat International")
Quarterly Report on Form 10-Q for the period ended March 31, 1996.
(1)
10.27.3 First Amendment dated as of June 17, 1999, to Second
Amended and Restated Transponder Purchase and Sale Agreement
between PanAmSat International and NetSat Servicios Ltda.,
constituting Exhibit 10.2.1 to NetSat Servicios Ltda.'s
Regulations Statement on Form F-4 (Reg. No. 333-6318) dated
January 21, 1997. (1)
27 Financial Data Schedule.
(b) Reports on Form 8-K.
The Company did not file any reports on Form 8-K during the
quarter for which this report is filed.
_____
(1) Portions of this Exhibit have been omitted pursuant to a
request for confidential treatment filed with the Securities and
Exchange Commission.
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SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
PanAmSat Corporation
Date: August 10, 1999 /s/ Kenneth N. Heintz
----------------------------
Kenneth N. Heintz
Executive Vice President and
Chief Financial Officer
and a Duly Authorized
Officer of the Company
22
Exhibit 3.2
As Amended Through July 9, 1999
RESTATED BYLAWS
OF
PANAMSAT CORPORATION
ARTICLE I
Stockholders
SECTION 1.1. Annual Meetings. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as may be designated by resolution of
the Board of Directors from time to time. Any other proper business may be
transacted at the annual meeting.
SECTION 1.2. Special Meetings. Special meetings of stockholders for any
purpose or purposes may be called at any time by the Board of Directors, or by a
committee of the Board of Directors that has been duly designated by the Board
of Directors and whose powers and authority, as provided in a resolution of the
Board of Directors, include the power to call such meetings, but such special
meetings may not be called by any other person or persons.
SECTION 1.3. Notice of Meetings. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the certificate of incorporation or
these Bylaws, the written notice of any meeting shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, such notice shall be
deemed to be given when deposited in the United States mail, postage prepaid,
directed to the stockholder at his address as it appears on the records of the
Corporation.
SECTION 1.4. Adjournments. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business which
might have been transacted at the
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original meeting. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
SECTION 1.5. Quorum. Except as otherwise provided by law, the
certificate of incorporation or these Bylaws, at each meeting of stockholders
the presence in person or by proxy of the holders of shares of stock having a
majority of the votes which could be cast by the holders of all outstanding
shares of stock entitled to vote at the meeting shall be necessary and
sufficient to constitute a quorum. Where a separate vote by a series, class or
classes is required, a majority of the outstanding shares of stock of such class
or classes on any particular issue, present in person or represented by proxy,
shall be necessary and sufficient to constitute a quorum for purposes of such
issue. In the absence of a quorum, the stockholders so present may, by majority
vote, adjourn the meeting from time to time in the manner provided in Section
1.4 of these Bylaws until a quorum shall attend. Shares of its own stock
belonging to the Corporation or to another corporation, if a majority of the
shares entitled to vote in the election of directors of such other corporation
is held, directly or indirectly, by the Corporation, shall neither be entitled
to vote nor be counted for quorum purposes; provided, however, that the
foregoing shall not limit the right of the Corporation to vote stock, including
but not limited to its own stock, held by it in a fiduciary capacity.
SECTION 1.6. Organization. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his absence by the President,
or in his absence by an Executive Vice President, or in the absence of the
foregoing persons by a chairman designated by the Board of Directors, or in the
absence of such designation by a chairman chosen at the meeting. The Secretary
shall act as secretary of the meeting, but in his absence the chairman of the
meeting may appoint any person to act as secretary of the meeting. The chairman
of the meeting shall announce at the meeting of stockholders the date and time
of the opening and the closing of the polls for each maker upon which the
stockholders will vote.
SECTION 1.7. Voting; Proxies. Each stockholder entitled to vote at any
meeting of stockholders shall be entitled to one vote for each share of stock
held by such stockholder which has voting power upon the matter in question. At
all meetings of stockholders for the election of directors, a plurality of the
votes cast shall be sufficient to elect a director. All other elections and
questions shall, unless otherwise provided by law, the certificate of
incorporation, these Bylaws or the rules or regulations of any stock exchange
applicable to the Corporation, be decided by the affirmative vote of the holders
of shares of stock having a majority of the votes present in person or
represented by proxy and entitled to vote thereon. Each stockholder entitled to
vote at a meeting of stockholders may authorize another person or persons to act
for him by proxy, but no
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such proxy shall be voted or acted upon after three years from is date, unless
the proxy provides for a longer period. A proxy shall be irrevocable if it
states that it is irrevocable and if, and only as long as, it is coupled with an
interest sufficient in law to support an irrevocable power. A stockholder may
revoke any proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or by delivering
a proxy in accordance with applicable law bearing a later date to the Secretary
of the Corporation. Voting at meetings of stockholders need not be by written
ballot.
SECTION 1.8. Fixing Date for Determination of Stockholders of Record.
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors and which record date: (i) in the case of determination
of stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty nor
less than ten (10) days before the date of such meeting; and (ii) in the case of
any other action, shall not be more than sixty (60) days prior to such other
action. If no record date is fixed: (i) the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; and (ii) the record date for
determining stockholders for any other purpose shall be at the close of business
on the day on which the Board of Directors adopts the resolution relating
thereto. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjured meeting.
SECTION 1.9. List of Stockholders Entitled to Vote. The Secretary shall
prepare and make, at least ten (10) days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten (10) days prior to
the meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the
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time and place of the meeting during the whole time thereof and may be inspected
by any stockholder who is present.
SECTION 1.10. Stock Ledger. The stock ledger of the Corporation shall
be the only evidence as to who are the stockholders entitled to examine the
stock ledger, the list required by Section 1.9 of this ARTICLE I, or to vote in
person or by proxy at any meeting of stockholders.
SECTION 1.11. Conduct of Meetings. The Board of Directors of the
Corporation may adopt by resolution such rules and regulations for the conduct
of the meeting of stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of stockholders shall have the right and
authority to prescribe such rules, regulations and procedures and to do all such
acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) rules and procedures for maintaining
order at the meeting and the safety of those present; (iii) limitations on
attendance at or participation in the meeting to stockholders of record of the
Corporation, their duly authorized and constituted proxies or such other persons
as the chairman of the meeting shall determine: (iv) restrictions on entry to
the meeting after the time fixed for the commencement thereof; and (v)
limitations on the time allotted to questions or comments by participants.
Unless and to the extent otherwise determined by the Board of Directors or the
chairman of the meeting, meetings of stockholders shall not be required to be
held in accordance with the rules of parliamentary procedure.
SECTION 1.12. Advance Notice of Stockholder Nominations and Business.
(A) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors and
the proposal of business to be considered by the stockholders may be made at an
annual meeting of stockholders (a) pursuant to the Corporation's notice of
meeting, (b) by or at the direction of the Board of Directors or (c) by any
stockholder of the Corporation who was a stockholder of record at the time of
giving of notice provided for in this Bylaw, who is entitled to vote at the
meeting and complies with the notice procedures set forth in this Bylaw.
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(2) For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(l) of
this Bylaw, the stockholder must have given timely notice thereof in writing to
the Secretary of the Corporation and such other business must otherwise be a
proper matter for stockholder action. To be timely, a stockholder's notice shall
be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 60th day nor earlier
than the close of business on the 90th day prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is more than thirty (30) days before or more than
sixty (60) days after such anniversary date, notice by the stockholder to be
timely must be so delivered not earlier than the close of business on the 90th
day prior to such annual meeting and not later than the close of business on the
later of the 60th day prior to such annual meeting or the 10th day following the
day on which public announcement of the date of such meeting is first made by
the Corporation. In no event shall the public announcement of an adjournment of
an annual meeting commence a new time period for the giving of a stockholder's
notice as described above. Such stockholder's notice shall set forth (a) as to
each person whom the stockholder proposes to nominate for election or
re-election as a director all information relating to such person that is
required to be disclosed in solicitations of proxies for election of directors
in an election contest, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and Rule 14a-11 thereunder (including such person's written
consent to being named in the proxy statement as a nominee and to serving as a
director if elected); (b) as to any other business that the stockholder proposes
to bring before the meeting, a brief description of the business desired to be
brought before the meeting, the reasons for conducting such business at the
meeting and any material interest in such business of such stockholder and the
beneficial owner, if any, on whose behalf the proposal is made; and (c) as to
the stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of such
stockholder, as they appear on the Corporation's books, and of such beneficial
owner, (ii) the class and number of shares of the Corporation which are owned
beneficially and of record by such stockholder and such beneficial owner, and
(iii) whether the proponent intends or is part of a group which intends to
solicit proxies from other stockholders in support of such proposal or
nomination.
(3) Notwithstanding anything in the second sentence of paragraph (A)(2)
of this Bylaw to the contrary, in the event that the number of directors to be
elected to the Board of Directors of the Corporation is increased
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and there is no public announcement by the Corporation naming all of the
nominees for director or specifying the size of the increased Board of Directors
at least seventy (70) days prior to the first anniversary of the preceding
year's annual meeting, a stockholder's notice required by this Bylaw shall also
be considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.
(B) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this Bylaw, who shall be entitled to vote at the meeting and who
complies with the notice procedures set forth in this Bylaw. In the event the
Corporation calls a special meeting of stockholders for the purpose of electing
one or more directors to the Board of Directors, any such stockholder may
nominate a person or persons (as the case may be) for election to such
position(s) as specified in the Corporation's notice of meeting, if the
stockholder's notice required by paragraph (A)(2) of this Bylaw shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the close of business on the 90th day prior to such special
meeting and not later than the close of business on the later of the 60th day
prior to such special meeting, or the 10th day following the day on which public
announcement is first made of the date of the special meeting and of the
nominees proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement or an adjournment of a special meeting
commence a new time period for the giving of a stockholder's notice as described
above. (C) General.
(1) Only such persons who are nominated in accordance with the
procedures set forth in this Bylaw shall be eligible to serve as directors and
only such business shall be conducted at a meeting of stockholders as shall have
been brought before the meeting in accordance with the
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procedures set forth in this Bylaw. Except as otherwise provided by law, the
certificate of incorporation or these Bylaws, the chairman of the meeting shall
have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made or proposed, as the case may
be, in accordance with the procedures set forth in this Bylaw and, if any
proposed nomination or business is not in compliance with this Bylaw, to declare
that such defective proposal or nomination shall be disregarded.
(2) For purposes of this Bylaw, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Bylaw, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights
(i) of stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders
of any series of Preferred Stock to elect directors under specified
circumstances.
SECTION 1.13. Stockholder Action. Any action required or permitted to
be taken by any stockholders of the Corporation must be effected at a duly
called annual or special meeting of such stockholders and may not be effected by
any consent in writing by such stockholders. Except as otherwise required by
law, special meetings of stockholders of the Corporation may be called only by
the Board of Directors pursuant to a resolution approved by a majority of the
entire Board of Directors.
SECTION 1.14. Inspectors of Election. The Corporation shall, in advance
of any meeting of stockholders, appoint one or more inspectors of election, who
may be employees of the Corporation, to act at the meeting or any adjournment
thereof and to make a written report thereof. The Corporation may designate one
or more persons as alternate inspectors to replace any inspector who fails to
act. In the event that no inspector so appointed or designated is able to act at
a meeting of stockholders, the person presiding at the meeting shall appoint one
or more inspectors to act at the meeting. Each inspector, before entering upon
the discharge of his or her duties, shall take and sign an oath to execute
faithfully the duties of inspector with strict impartiality and according to the
best of his or her ability. The inspector or inspectors so appointed or
designated shall (i) ascertain the number of shares of capital stock of the
Corporation outstanding and the voting power of each such share, (ii) determine
the shares of capital stock of the Corporation represented
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at the meeting and the validity of proxies and ballots, (iii) count all votes
and ballots, (iv) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors, and
(v) certify their determination of the number of shares of capital stock of the
Corporation represented at the meeting and such inspectors' count of all votes
and ballots. Such certification and report shall specify such other information
as may be required by law. In determining the validity and counting of proxies
and ballots cast at any meeting of stockholders of the Corporation, the
inspectors may consider such information as is permitted by applicable law. No
person who is a candidate for an office at an election may serve as an inspector
at such election.
ARTICLE II
Board of Directors
SECTION 2.1. Number; Qualifications. The Board of Directors shall
consist of one or more members, the number thereof to be determined from time to
time by resolution of the Board of Directors. Directors need not be
stockholders.
SECTION 2.2. Election; Resignation; Removal; Vacancies. At the first
annual meeting of stockholders and at each annual meeting thereafter, the
stockholders shall elect directors each of whom shall hold office for a term of
one year or until his successor is elected and qualified. The number of
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directors constituting the initial Board of Directors shall be ten. Subject to
the rights of holders of any series of Preferred Stock to elect directors under
specified circumstances, the number of directors may be modified from time to
time exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of directors which the Corporation would have if
there were no vacancies. Any director may resign at any time upon written notice
to the Corporation. Any newly created directorship or any vacancy occurring in
the Board of Directors for any cause may be filled by a majority of the
remaining members of the Board of Directors, although such majority is less than
a quorum, or by a plurality of the votes cast at a meeting of stockholders, and
each director so elected shall hold office until the expiration of the term of
office of the director whom he has replaced or until his successor is elected
and qualified.
SECTION 2.3. Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board of Directors may from time to time determine, and if
so determined notices thereof need not be given.
SECTION 2.4. Special Meetings. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary, or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least twenty-four hours before the special meeting.
SECTION 2.5. Telephonic Meetings Permitted. Members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Bylaw shall constitute presence in person at such meeting.
SECTION 2.6. Quorum; Vote Required for Action. At all meetings of the
Board of Directors a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. The vote of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
SECTION 2.7. Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his absence by the
President, or in their absence by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his absence the chairman
of the meeting may appoint any person to act as secretary of the meeting.
SECTION 2.8. Informal Action by Directors. Unless otherwise restricted
by the certificate of incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board of
Directors or such committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
of Directors or such committee.
ARTICLE Ill
Committees
SECTION 3.1. Committees. The Board of Directors shall appoint the
committees provided for in these Bylaws in Sections 3.2 and 3.3 and may, by
resolution passed by the Board of Directors, designate one or more additional
committees, each committee to consist of one or more of the directors of the
Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of a
member of the committee, the member or members thereof present at any meeting
9
<PAGE>
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the Board of Directors to act at the
meeting in place of any such absent or disqualified member. Any such committee,
to the extent permitted by law and to the extent provided in the resolution of
the Board of Directors, shall have and may exercise all the powers and authority
of the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it.
Section 3.2 Compensation and Nominating Committee.
(a) At each annual meeting of the Board of Directors, the Board of
Directors shall, by a resolution adopted by the Board of Directors, designate
and appoint from its members a Compensation and Nominating Committee consisting
of three or more directors, each of whom shall be a "disinterested" person.
(b) The Compensation Committee and Nominating Committee shall have the
powers and responsibilities designated by the Board of Directors from time to
time.
(c) Action taken by the Compensation and Nominating Committee or at a
meeting duly called shall require the affirmative vote of at least a majority of
its members.
SECTION 3.3. Audit Committee.
(a) At each annual meeting of the Board of Directors, the Board of
Directors shall, by a resolution adopted by the Board of Directors, designate
and appoint from its members an Audit Committee consisting of three or more
directors, none of whom is an officer or employee of the Corporation.
(b) The Audit Committee shall have the powers and responsibilities as
designated by the Board of Directors from time to time.
SECTION 3.4. Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules
each committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to ARTICLE 11 of these Bylaws.
10
<PAGE>
ARTICLE IV
Officers
SECTION 4.1. Executive Officers; Election; Qualifications; Term of
Office; Resignation; Removal; Vacancies. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board from among its members. The Board of Directors may also choose a Chief
Operating Officer, one or more Executive Vice Presidents, one or more Senior
Vice Presidents, one or more Vice Presidents, one or more Assistant Secretaries,
a Treasurer and one or more Assistant Treasurers. Each such officer shall hold
office until the first meeting of the Board of Directors after the annual
meeting of stockholders next succeeding his election, and until his successor is
elected and qualified or until his earlier resignation or removal. Any officer
may resign at any time upon written notice to the Corporation. The Board of
Directors may remove any officer with or without cause at any time, but such
removal shall be without prejudice to the contractual rights of such officer, if
any, with the Corporation. Any number of offices may be held by the same person.
Any vacancy occurring in any office of the Corporation by death, resignation,
removal or otherwise may be filled for the unexpired portion of the term by the
Board of Directors at any regular or special meeting.
SECTION 4.2. Powers and Duties of Executive Officers. The officers of
the Corporation shall have such powers and duties in the management of the
Corporation as may be prescribed in a resolution by the Board of Directors and,
to the extent not so provided, as generally pertain to their respective offices,
subject to the control of the Board of Directors.
SECTION 4.3. Chairman of the Board. The Chairman of the Board shall be
a member of the Board of Directors. He shall preside at each meeting of the
Board of Directors or the stockholders. Unless the Chairman also holds another
office described in these Bylaws, he shall be a non-executive officer of the
Corporation.
SECTION 4.4. The President. The President shall be the chief executive
officer of the Corporation. He shall, in the absence of the Chairman of the
Board, preside at each meeting of the Board of Directors or the stockholders.
The President shall be responsible for the general supervision and control of
the business and affairs of the Corporation, subject to the direction of the
Board of Directors. The President may sign or countersign certificates,
contracts, agreements and other documents and instruments in the name and on
behalf of the Corporation, unless and except to the extent that any document or
instrument is required by law or by the Board of Directors to be signed or
11
<PAGE>
countersigned by another officer of the Corporation. The President may appoint
additional officers that are not executive officers described in these Bylaws
(unless such appointments are approved by the Board of Directors), and such
additional officers shall serve the Corporation at the discretion of the
President. The President shall perform all duties incident to the office of the
President, and such other duties as may from time to time be assigned to him by
the Board of Directors.
SECTION 4.5. Chief Operating Officer. The Chief Operating Officer shall
report to the President and shall be responsible for day-to-day management of
the sales, operations and strategic activities of the Corporation and such other
duties as may from time to time be assigned to him by the President or the Board
of Directors. At the request of the President, or in his absence or in the event
of his inability or refusal to act, the Chief Operating Officer shall perform
the duties of the President, and when so acting, shall have the powers of and be
subject to the restrictions placed upon the President in respect of the
performance of such duties.
SECTION 4.6. Executive Vice President. Each Executive Vice President
shall perform all such duties as from time to time may be assigned to him by the
Board of Directors or the President. At the request of the President or the
Chief Operating Officer or in his absence or in the event of his inability or
refusal to act, the Executive Vice President, or if there shall be more than
one, the Executive Vice Presidents in the order determined by the Board of
Directors (or if there be no such determination, then the Executive Vice
Presidents in the order of their appointment), shall perform the duties of the
Chief Operating Officer, and when so acting, shall have the powers of and be
subject to the restrictions placed upon the Chief Operating Officer in respect
of the performance of such duties.
SECTION 4.7. Senior Vice President. Each Senior Vice President shall
perform all such duties as from time to time may be assigned to him by the Board
of Directors or the President. There shall be no duties that are incident to the
office of the Senior Vice President, other than those which are specifically
assigned by the Board of Directors or the President. A Senior Vice President may
not sign or countersign certificates, contracts, agreements and other documents
and instruments in the name and on behalf of the Corporation, unless and except
to the extent that the Board of Directors or President assigns such
responsibility to such officer.
SECTION 4.8. Chief Financial Officer. The Chief Financial Officer shall
be responsible for the financial affairs of the Corporation and shall be the
chief accounting officer for public securities purposes. If the Chief Financial
Officer is not also the Treasurer of the Corporation, he shall be responsible
for the supervision of the Treasurer. He shall perform all duties incident to
the office of Chief Financial Officer, and such other duties as may from time to
time be assigned to him by the Board of Directors.
12
<PAGE>
SECTION 4.9. Vice President. Each Vice President shall perform all such
duties as from time to time may be assigned to him by the Board of Directors or
the President. There shall be not duties that are incident to the office of the
Vice President, other than those which are specifically assigned by the Board of
Directors or the President. A Vice President may not sign or countersign
certificates, contracts, agreements and other documents and instruments in the
name and on behalf of the Corporation, unless and except to the extent that the
Board of Directors or President assigns such responsibility to such officer.
SECTION 4.10. Treasurer. The Treasurer shall:
(a) have charge and custody of, and be responsible for, all the funds
and securities of the Corporation;
(b) keep full and accurate accounts of receipts and disbursements in
books belonging to the Corporation;
(c) deposit all moneys and other valuables to the credit of the
Corporation in such depositaries as may be designated by the Board of Directors
or pursuant to its direction;
(d) receive, and give receipts for, moneys due and payable to the
Corporation from any source whatsoever;
(e) disburse the funds of the Corporation and supervise the investments
of its funds;
(f) render to the Board of Directors, whenever the Board of Directors
may require, an account of the financial condition of the Corporation; and
(g) in general, perform all duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him by the Board
of Directors.
In the event that any officer of the Corporation other than the
Treasurer shall be designated as the Corporation's chief financial officer, the
Treasurer shall share the foregoing powers and duties with such chief financial
officer, and all references in these Bylaws to the Treasurer shall be deemed to
include such chief financial officer of the Corporation.
13
<PAGE>
SECTION 4.11. Secretary. The Secretary shall:
(a) keep or cause to be kept in one or more books provided for the
purpose, the minutes of all meetings of the Board of Directors, the committees
of the Board of Directors and the stockholders;
(b) see that all notices are duly given in accordance with the
provisions of these Bylaws and as required by law;
(c) be custodian of the records and the seal of the Corporation and
affix and attest the seal to all certificates for shares of the Corporation and
affix and attest the seal to all other documents to be executed on behalf of the
Corporation under its seal;
(d) see that the books, reports, statements, certificates and other
documents and records required by law to be kept and filed are properly kept and
filed; and
(e) in general, perform all duties incident to the office of Secretary
and such other duties as from time to time may be assigned to him by the Board
of Directors.
SECTION 4.12. Assistant Secretaries. During the absence or disability
of the Secretary, the Assistant Secretary shall have and may exercise all of the
powers and shall discharge all of the duties of the Secretary. Each Assistant
Secretary shall also perform all such other duties as are incident to his office
or are properly requested by the President, the Secretary or the Board of
Directors.
SECTION 4.13. Assistant Treasurers. During the absence or disability of
the Treasurer, the Assistant Treasurer shall have and may exercise all of the
powers and shall discharge all of the duties of the Treasurer. Each Assistant
Treasurer shall also perform all such other duties as are incident to his office
or are properly requested by the President, the Treasurer or the Board of
Directors.
SECTION 4.14. Additional Officers. The Board of Directors may appoint
such other officers and agents as it may deem appropriate, and such other
officers and agents shall hold their offices for such terms and shall exercise
such powers and perform such duties as may be determined from time to time by
the Board of Directors. The Board of Directors may from time to time delegate to
any officer or agent the power to appoint subordinate officers or agents and to
prescribe their respective rights, terms of office, authorities and duties. Any
such officer or agent may remove any such subordinate officer or agent appointed
by him, for or without cause.
14
<PAGE>
ARTICLE V
Stock
SECTION 5.1. Certificates. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the Corporation by the Chairman
or the President or an Executive Vice President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
Corporation, certifying the number of shares owned by him in the Corporation.
Any of or all the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue.
SECTION 5.2. Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The Corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it alleged to have been lost,
stolen or destroyed, and the Corporation may require the owner of the lost,
stolen or destroyed certificate, or his legal representative, to give the
Corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
ARTICLE VI
Miscellaneous
SECTION 6.1. Fiscal Year. The fiscal year of the Corporation shall be
determined by resolution of the Board of Directors.
SECTION 6.2. Seal. The corporate seal shall have the name of the
Corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.
SECTION 6.3. Waiver of Notice of Meetings of Stockholders, Directors
and Committees. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
15
<PAGE>
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at nor the purpose of any
regular or special meeting of the stockholders, directors or members of a
committee of directors need be specified in any written waiver of notice.
SECTION 6.4. Manner of Notice. Except as otherwise provided herein,
notices to directors and stockholders shall be in writing and delivered
personally or mailed to the directors or stockholders at their addresses
appearing on the books of the Corporation. Notice to directors may be given by
telegram, telecopier, telephone or other means of electronic transmission.
SECTION 6.5. Interested Directors; Quorum. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, partnership, association or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof which
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose, if: (i) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee, and the Board of Directors or committee in
good faith authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested directors
be less than a quorum; or (ii) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or (iii) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the Board of Directors, a committee
thereof, or the stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee which authorizes the contract or transaction.
SECTION 6.6. Form of Records. Any records maintained by the Corporation
in the regular course of its business, including its stock ledger, books of
account and minute books, may be kept on, or be in the form of, punch cards,
magnetic tape, photographs, microphotographs, or any other information storage
device, provided that the records so kept can be converted into clearly legible
form within a reasonable time.
SECTION 6.7. Amendment of Bylaws. These Bylaws may be altered or
repealed, and new bylaws made, by the Board of Directors, but the stockholders
may make additional bylaws and may alter and repeal any Bylaws whether adopted
by them or otherwise.
16
Exhibit 10.15.11
Page 1
This Amendment #6 to the Launch Services Agreement 95.5.933 is entered into
between:
ARIANESPACE S.A., a company incorporated under the laws of France and having a
principal office at Boulevard de l'Europe, 91006, EVRY, France (hereinafter
referred to as "Arianespace")
AND
PanAmSat Corporation, a company organized under the laws of the State of
Delaware with principal offices at One Pickwick Plaza, Greenwich, Connecticut,
USA (hereinafter referred to as "PanAmSat Corporation" or under this Amendment,
"Customer")
and
PanAmSat International Systems, Inc. (referred to as PanAmSat International in
previous amendments), a company organized under the laws of the State of
Delaware with principal offices at One Pickwick Plaza, Greenwich, Connecticut,
USA (hereinafter referred to as "PanAmSat International" or under this
Amendment, "Customer").
Reference is made to the Launch Services Agreement 95.5.933 executed between
PanAmSat Corporation and Arianespace on December 20, 1995 for the Launch of up
to four PanAmSat Satellites as amended (said agreement being hereinafter
referred to as the "Agreement").
The Parties hereby agree to amend the Agreement in order to modify certain terms
applicable to Firm Launch #6 (which should nominally be PAS 10 and is for the
benefit of PanAmSat Corporation) in the manner set forth hereafter:
ARTICLE 1
Paragraph B iii) of Article 1 of Amendment #5 to the Agreement is hereby
replaced by the following:
iii) for Firm Launch #6:
a) Price:
The price shall be [ ********************************************************
********* ] for a mass of 3475 kg (lift off mass for standard GTO orbit on a
dedicated Ariane 4. [ ******************************************************** ]
[ *** ] Filed separately with the Commission pursuant to a request for
confidential treatment.
Confidential - Arianespace Proprietary
<PAGE>
Page 2
b) Mass / Launch Vehicle
The provisions of Paragraph I B) ii) b) of Amendment #5 to the Agreement shall
also apply to Firm Launch #6 except that for the purpose of sub-paragraph x) and
xx), Customer's rights are extended until the later of seven (7) days after
the relevant Confirmation Date as defined hereafter, or the date(s) as otherwise
determined thereunder.
c) Payment Plan:
The Launch Services Price for Firm Launch #6 shall be paid by the Customer a
follows:
Plan A
Date Percentage of Launch Services Price
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
At the date hereof and in the absence of any election by Customer under Article
2, Plan A shall apply
or
Plan B
Date Percentage of Launch Services Price
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
or
[ *** ] Filed separately with the Commission pursuant to a request for
confidential treatment.
Confidential - Arianespace Proprietary
<PAGE>
Page 3
Plan C
Date Percentage of Launch Services Price
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
[ ******************************************************** ]
ARTICLE 2
In addition to the provisions of Article 11 of the Agreement, Customer shall
have the right to reschedule Firm Launch #6 as follows:
i) Customer shall have the option, to be exercised in writing no later than 1
September 1999, to
x) Confirm the initial Launch Period of Firm Launch #6 as set forth
under Article 1 of this Amendment #6 ("Launch Period A"). If Customer
so confirms, Payment Plan A defined hereabove shall apply; or
xx) Consult with Arianespace in order to defer Firm Launch #6 to a
Launch Period from 1 April 2000 up to and including 30 June 2000
("Launch Period B") subject to the availability of Launch Opportunities
during this time period. If Customer selects the option in this
paragraph xx), Payment Plan B defined hereabove shall apply. If no
Launch Opportunity is available during this Launch Period or if
Customer so elects, the Launch Period shall be as set forth under
sub-paragraph ii) xx). AND
ii) If Customer has selected option xx) hereabove, Customer shall have the
further additional option defined hereafter to be exercised in writing no later
than 1 November 1999, to:
x) Confirm the Launch Period B determined under Paragraph i)xx)
hereabove. If Customer so confirms, Payment Plan B defined hereabove
shall apply; or
xx) Reschedule Firm Launch #6 to a Launch Period from 1 July 2000 up to
and including 30 September 2000 ("Launch Period C"). If Customer
selects the option in this paragraph Payment Plan C defined hereabove
shall apply. AND
iii) For the purpose of this Article, the following provisions shall apply:
[ *** ] Filed separately with the Commission pursuant to a request for
confidential treatment.
Confidential - Arianespace Proprietary
<PAGE>
Page 4
x) The date at which Customer confirms its election under subparagraphs
i) and/or ii) shall constitute the applicable "Confirmation Date" and
the Launch Slot of Firm Launch #6 and the identity of the Satellite
shall, notwithstanding the provisions of the first sentence of
Paragraph 5.3 and Paragraph 6.2 of the Agreement be determined no later
than the later of 7 (seven) days after the latest Confirmation Date, or
the date(s) as otherwise determined thereunder.
xx) Should Customer fail to notify to Arianespace its election under
the applicable provision hereabove, the Launch Period of Firm Launch #6
shall not be modified.
xxx) The Parties agree to consult regularly in order to discuss the
availability of Launch Opportunities for the Launch Period from July
1st - September 30th 2000.
xxxx) For the purpose of the Agreement, rescheduling of Firm Launch #6
under the provisions of this Article shall not be considered a
postponement by either Party under Article 11 and, unless Customer
confirms Launch Period A under Paragraph i) of Article 2 above, the
"initial Launch Period" shall be deemed 1 April 2000 up to and
including 30 June 2000. AND
xxxxx) It is understood that PanAmSat has three other Launches now
scheduled with Arianespace from November 1999 through March 2000, and
that if any of these Launches are materially delayed beyond what has
now been disclosed, such delays could prevent Arianespace from
launching Firm Launch #6 within the first quarter of 2000, which Launch
(if not otherwise postponed hereunder) would then be moved to the
second quarter of 2000 without being considered a postponement by
either party under Article 11.
[ *** ] Filed separately with the Commission pursuant to a request for
confidential treatment.
Confidential - Arianespace Proprietary
<PAGE>
Page 5
ARTICLE 3
This Amendment #6 constitutes an amendment to the Agreement within the meaning
of its Paragraph 20.6.
Executed this 4th day of June 1999
For ARIANESPACE For PanAmSat Corporation
By: s\J.M. Luton By: s\James W. Cuminale
Title: President-Directeur General Title: Executive V.P. and General
Counsel
For PanAmSat International Systems, Inc.
By: s\James W. Cuminale
Title: Executive V.P. and General Counsel
[ *** ] Filed separately with the Commission pursuant to a request for
confidential treatment.
Confidential - Arianespace Proprietary
Exhibit 10.27.3
FIRST AMENDMENT TO
SECOND AMENDED AND RESTATED
TRANSPONDER PURCHASE AND SALE AGREEMENT
This Amendment (the "Amendment") is entered into as of the 17th day of
June, 1999, by and between PanAmSat International Systems, Inc., a Delaware
corporation ("PanAmSat") and NetSat Servicos Ltda., a Brazilian limited
liability quota company ("Buyer") to that certain Second Amended and Restated
Transponder Purchase and Sale Agreement dated March 5, 1998, by and between
Buyer and PanAmSat (the "Transponder Agreement"). Capitalized terms, unless
otherwise defined, have the meanings ascribed to them in the Transponder
Agreement. WHEREAS, Buyer [****************************************************
************************************************************ ]
WHEREAS, the parties desire to document their agreement with respect
to the foregoing.
NOW, THEREFORE, in consideration of the foregoing and for other
valuable consideration, the receipt and adequacy of which Buyer and PanAmSat
each hereby acknowledges, Buyer and PanAmSat agree as follows:
1. PAS-6B Delivery Date. The Delivery Date for PAS-6B is
acknowledged and agreed to have occurred on February 26, 1999.
2. [ ********* ] Certain Installment Payments. The foregoing
notwithstanding, from February 26, 1999, through and including [ ********* ],
(the "Initial PAS-6B Period") PanAmSat shall [ **** ] Installment payments for
[ ****************** ] PAS-6B Transponders. Accordingly, Buyer agrees to pay
PanAmSat during the Initial PAS-6B Period, without claim for deduction or
offset, at the [ ******* ] Transponder rate. As of [ ********* ], it is agreed
that payments will be made at the [ ********* ] Transponder rate for PAS-6B.
3. Uplink Services. From approximately February 26, 1999, into
April 1999, at Buyer's request, PanAmSat performed certain uplink services for
the delivery of Buyer's signal to PAS-6. PanAmSat hereby [ *********** ] for
said uplink services and Buyer hereby agrees to [ ******* ] PanAmSat, upon
invoice, for [ ************************************ ] by PanAmSat in providing
such services.
[ *** ] Filed separately with the Commission pursuant to a request for
confidential treatment.
<PAGE>
-2-
4. Release of PAS-3 and PAS-6. Buyer hereby acknowledges that it
--------------------------
has no further right to employ the PAS-3 or PAS-6 Brazil Beam Transponders.
5. Additional PAS-6B Operational Procedures. New Sections 13.4,
----------------------------------------
13.5, and 13.6 are hereby added to the Agreement, as follows:
13.4 During Buyer's use of the PAS-6B Transponders, at least once
each week and at any time immediately after commencement of a
[ ************************* **********************************
*************************** ], PanAmSat will conduct an
evaluation of the [ *************************
******************************** ] PAS-6B's Brazil Beam.
PanAmSat will provide to Buyer [ ************ ] showing the
results of each such evaluation within [ ******* ] after each
evaluation is completed (or, in accordance with such
procedures as the technical representatives of the parties may
agree), as well as in the event of an
[ ************************** ].
13.5 If at any time the
[ *************************************************
**************************************************************
**************************************************************
****** ], then PanAmSat will initiate a meeting among
representatives of PanAmSat, Buyer and, if reasonably
possible, the Satellite's manufacturer (collectively the
"Performance Team"). The Performance Team will be tasked to
evaluate the measured data, and after consideration of all
relevant factors (including but not limited to the
[ ********************************
**************************************************************
**************************************************************
******************** ], to reach consensus agreement whether
and, if so, what
[ **************************************************** ] is
warranted. Each party agrees in seeking to reach such
consensus agreement to base its decisions on its good faith
analysis of relevant factors consistent with the intent stated
herein. There shall be [ ***** ] to Buyer for modifications
made pursuant to this paragraph. The goal of the Performance
Team's effort shall be to maintain a [
**************************************************************
***************************** ], consistent with all other
spacecraft functions.
13.6 Without limitation, in no event shall PanAmSat be required to
make any changes that it deems, in good faith, to pose any
risk to Satellite health or performance. Further, if for any
reason changes are made under Section 13.5 above in
circumstances when the affected Buyer's Transponders are
meeting their Performance Specifications which, for the
avoidance of doubt, shall not be deemed modified by anything
contained in this Amendment, and such changes result in the
Brazil Beam Transponders failing to meet their Performance
Specifications, then, provided that
[ *** ] Filed separately with the Commission pursuant to a request for
confidential treatment.
<PAGE>
-3-
PanAmSat promptly and expeditiously restores as soon as
possible the affected Buyer's Transponders to their
Performance Specifications once such failure is determined,
unless the failure was the result of [ **********************
], such failure to meet the Performance Specifications shall
not, for other contract purposes, be deemed to have occurred
and shall be without contractual remedy. Finally, all data
and meeting requirements shall be subject to any applicable
legal restrictions as to the disclosure of technical data as
well as contractual confidentiality provisions.
Each of the parties have executed and delivered this Amendment as of
the day and year first written above.
PANAMSAT INTERNATIONAL SYSTEMS, INC.
By: s/Alvaro T. Gazzolo
--------------------------------
Name:
------------------------------
Title: Senior Vice President
-----------------------------
WITNESSED:
By: s/William C. Schmidt
-------------------------------
Printed Name:
--------------------------------
and
By: s/Susan Linning
---------------------------------
Printed Name:
---------------------------------
Alvaro T. Gazzolo appeared before me on 6 28, 1999, at
----------- --- ---
PanAmSat Coral Gables Office
- --------------------------------------------[location].
s/Gillian Gaggano
-----------------------------------------
Notary Public
My Commission expires October 19, 2001
----------------------------------
[ *** ] Filed separately with the Commission pursuant to a request for
confidential treatment.
<PAGE>
-4-
NETSAT SERVICOS LTDA.
By: s/Luis Celso Machado
----------------------------------------------------
Name:
----------------------------------------------
Title: Chief Technology Officer
---------------------------------------------
WITNESSED:
By: s/Agricio Silva Neto
------------------------------------
Printed Name:
------------------------------------
and
By: s/Flavio Suplicy
------------------------------------
Printed Name:
------------------------------------
appeared before me on ____ ___, 1999, at
-------------
[location].
- --------------------------------------------
---------------------------------------
Notary Public
My Commission expires
------------------------------------
[ *** ] Filed separately with the Commission pursuant to a request for
confidential treatment.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This financial data schedule contains summary financial information extracted
from the Consolidated Balance Sheet and related Consolidated Statement of Income
as of and for the six month period ending June 30, 1999 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 6,748
<SECURITIES> 0
<RECEIVABLES> 76,522
<ALLOWANCES> 3,645
<INVENTORY> 0
<CURRENT-ASSETS> 448,293
<PP&E> 3,583,097
<DEPRECIATION> 645,306
<TOTAL-ASSETS> 6,016,551
<CURRENT-LIABILITIES> 165,828
<BONDS> 835,056
0
0
<COMMON> 1,492
<OTHER-SE> 2,749,142
<TOTAL-LIABILITY-AND-EQUITY> 6,016,551
<SALES> 393,891
<TOTAL-REVENUES> 393,891
<CGS> 0
<TOTAL-COSTS> 233,184
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,684
<INCOME-PRETAX> 108,023
<INCOME-TAX> 46,990
<INCOME-CONTINUING> 61,033
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61,033
<EPS-BASIC> $ .41
<EPS-DILUTED> $ .41
</TABLE>
