SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
SCHEDULE 14D-9
(Amendment No. 1)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(D)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
______________________
COMSAT CORPORATION
(Name of Subject Company)
COMSAT CORPORATION
(Name of Person(s) Filing Statement)
Common Stock, without par value
(Title of Class of Securities)
20564D107
(CUSIP Number of Class of Securities)
Warren Y. Zeger, Esq.
Vice President, General Counsel and Secretary
COMSAT Corporation
6560 Rock Spring Drive
Bethesda, Maryland 20817
(301) 214-3200
Name, address and telephone number of person authorized to receive
notice and communication on behalf of the person(s) filing statement).
With a Copy to:
Alan C. Myers, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022-3897
(212) 735-3000
This Amendment No. 1 to the Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") of COMSAT Corporation, a District of
Columbia corporation (the "Company") amends and supplements the Schedule
14D-9 of the Company relating to the tender offer (the "Offer") by Regulus,
LLC, a single member Delaware limited liability company (the "Purchaser")
and a wholly-owned subsidiary of Lockheed Martin Corporation, a Maryland
corporation ("Parent"), disclosed in a Tender Offer Statement on Schedule
14D-1, dated September 25, 1998, as amended, to purchase up to 49% (less
certain adjustments) of the issued and outstanding shares of common stock,
without par value, of the Company (the "Shares") at a price of $45.50 per
Share, net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated
September 25,1998 (the "Offer to Purchase") and in the related Letter of
Transmittal (which together with the Offer to Purchase constitute the
"Offer"). Capitalized terms not defined herein have the meanings assigned
thereto in the Schedule 14D-9.
ITEM 3. IDENTITY AND BACKGROUND.
Item 3(b) is hereby amended and supplemented by the addition of the
following paragraphs thereto:
Pursuant to a continuing engagement, the law firm of Wunder, Knight,
Levine, Thelen & Forscey, has provided Parent general legislative support.
Peter S. Knight, a Presidentially appointed director of the Company since
September 1994 and partner in the law firm of Wunder, Knight, Levine,
Thelen & Forscey, has rendered services to Parent pursuant to such
engagement. Parent paid Wunder, Knight, Levine, Thelen & Forscey $151,370,
$135,325, $112,129 and $161,669 for services rendered and expenses
incurred during 1995, 1996, 1997 and 1998, respectively.
Additionally, pursuant to a continuing engagement, the law firm of
Manatt, Phelps & Phillips, LLP has provided Parent general legal and
legislative advocacy services in connection with government contracts
and contracting opportunities in the state of California. Charles T.
Manatt, a Presidentially appointed director of the Company since May 1995
and chairman of the law firm of Manatt, Phelps & Phillips, LLP, has not
had any personal involvement with the services rendered pursuant to the
engagement. Parent paid Manatt, Phelps & Phillips, LLP $67,365, $55,023,
$15,028 and $65,414 for services rendered and expenses incurred during
1995, 1996, 1997 and 1998, respectively.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Item 8 is hereby amended and supplemented by the addition of the
following paragraphs thereto:
On January 21, 1999, Representative Tom Bliley, Chairman of the House
Committee on Commerce, and Senator Conrad Burns, Chairman of the Senate
Subcommittee on Communications, sent a letter (the "Letter") to William E.
Kennard, Chairman of the Federal Communications Commission (the "FCC")
urging the FCC not to take any action to permit any company (including
Parent and the Purchaser) to purchase more than 10 percent of the Company
prior to Congress adopting satellite reform legislation. Copies of the
Letter and a related press release issued by Representative Bliley and
Senator Burns are attached hereto as Exhibit 23. On January 22, 1999, the
Company and Parent jointly issued a press release, a copy of which is
attached hereto as Exhibit 24, responding to the joint statement of
Representative Bliley and Senator Burns.
If the FCC, in deference to the position expressed in the Letter, does
not proceed with its review of Parent's filings related to the Offer or, if
the FCC's review does not otherwise proceed on the schedule Parent
anticipated, the Offer may not be completed in the first half of 1999, the
time-frame previously disclosed by Parent and the Company as the time-frame
during which they expected the Offer to close. Further, if the FCC were to
delay or slow its review, and if Congress does not make rapid progress on
satellite reform legislation, the Offer may not be completed by September
18, 1999. If this occurs, under the terms of the Merger Agreement, the
parties may terminate the Merger Agreement. The parties may also elect not
to avail themselves of that right or may elect to amend the Merger
Agreement to extend this date. If Congress enacts legislation promptly,
the Merger may be accelerated from the year-end date previously estimated
by Parent and the Company as the date by which they expected the Merger to
close. Conversely, if the legislative process moves slowly, the Merger is
unlikely to occur by year-end.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 23 Text of Press Release issued by Representative Tom Bliley
and Senator Conrad Burns dated January 22, 1999 and
accompanying letter from Representative Tom Bliley and
Senator Conrad Burns to William E. Kennard, Chairman of
the FCC.
Exhibit 24 Text of Joint Press Release issued by Parent and the
Company dated January 22, 1999.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
Dated: February 8, 1999 COMSAT Corporation
By: /s/ Alan G. Korobov
------------------------------
Name: Alan G. Korobov
Title: Controller
EXHIBIT INDEX
Exhibit 23 Text of Press Release issued by Representative Tom
Bliley and Senator Conrad Burns dated January 22,
1999 and accompanying letter from Representative
Tom Bliley and Senator Conrad Burns to William E.
Kennard, Chairman of the Federal Communications
Commission.
Exhibit 24 Text of Joint Press Release issued by Parent and
the Company dated January 22, 1999.
Exhibit 23
FOR IMMEDIATE RELEASE: Contact: David Fish
(202) 225-5735
January 22, 1999 Matt Raymond
(202) 224-8150
NEWS RELEASE
CHAIRMEN TO FCC: CONGRESS MUST DECIDE COMSAT OWNERSHIP
Comprehensive Satellite Reform Must Come First, They Say
WASHINGTON Two key congressional chairmen are urging the Federal
Communications Commission to take no action enabling any company to
purchase more than 10 percent interest in COMSAT. They say comprehensive,
pro- competitive reform of the intergovernmental satellite monopoly which
will likely pass Congress this year must come first.
Representative Tom Bliley (R-VA) and Senator Conrad Burns (R-MT) sent a
joint letter to FCC Chairman William Kennard on Thursday urging that his
agency "not take any action to permit any company to purchase more than 10
percent of COMSAT . . ." Their message comes as the FCC considers granting
`authorized common carrier' status to Lockheed Martin Corp., a change the
company seeks in hopes of acquiring a significant interest in COMSAT.
"Legislation the Congress considers will resolve the issues you are
addressing in this proceeding, providing you a clear legislative framework
within which to respond," Bliley and Burns wrote. "Satellite reform must
be comprehensive and, absent overall satellite privatization legislation,
no company should be able to own over 10 percent of the U.S. signatory."
"FCC action at this time may have the unintended effect of producing
uncertainty in the satellite market since Congress is considering
legislation this year," their joint letter reads. "Therefore, we strongly
urge that the Commission not take any action to permit any company to
purchase more than 10 percent of COMSAT, through the potential authorized
common carrier exception, a reverse merger, asset transfer or other similar
method."
Separately Burns added, "While I am confident the potential merger of
Lockheed and COMSAT will be pro-competitive and holds enormous potential in
the emergence of this exciting new market, I believe that these decisions
are more appropriately the realm of Congress and not a regulatory body."
Bliley chairs the House Commerce Committee; Burns chairs the Senate
Subcommittee on Communications. COMSAT is the U.S. signatory to INTELSAT
and Inmarsat, two intergovernmental organizations controlling the bulk of
international satellite telecommunications traffic.
The House passed a satellite reform bill sponsored by Bliley and
Representative Ed Markey (D-MA) last year by a wide margin. The Senate
held hearings on legislation introduced by Burns.
# # # # #
[Letterhead of the United States Congress]
January 21, 1999
The Honorable William E. Kennard
Chairman
Federal Communications Commission
Room 8-B201
445 12 St., S.W.
Washington, D.C. 20024
Dear Mr. Chairman:
The Commission has under review the request of Lockheed Martin to acquire
49 percent of COMSAT through classification as an authorized common
carrier. This issue will have substantial bearing on the future structure
of the international satellite industry. As you know, the Communications
Satellite Act of 1962 precludes any one company from owning over ten
percent of COMSAT, but for historical reasons has an exception for
authorized common carriers.
Our Committees are actively considering satellite reform legislation,
including an update of the 1962 Act. The House overwhelmingly passed a
satellite reform bill last year introduced by Chairman Bliley and Mr.
Markey and the Senate held hearings on legislation introduced by Senator
Burns. Both houses will consider legislation this year. This
consideration will reflect our shared principles including those of:
privatizing INTELSAT by a date certain; enabling the U.S. to participate in
a restructured Inmarsat through legislation; a pro-competitive
privatization of these intergovernmental satellite organizations (IGOs);
eliminating both the IGOs' and COMSAT's derivative privileges and
immunities and warehousing of orbital locations; non-discriminatory
competition; use of market access as an incentive for a pro-competitive
privatization; elimination of ownership caps on COMSAT and other
deregulation and ending the role of government in commercial satellite
operations.
Legislation the Congress considers will resolve the issues you are
addressing in this proceeding, providing you a clear legislative framework
within which to proceed. Satellite reform must be comprehensive, and
absent overall satellite privatization legislation, no company should be
able to own over 10 percent of the U.S. Signatory. Comprehensive reform is
the best way to promote a pro-competitive privatization of the
intergovernmental satellite organizations and deregulate COMSAT.
Commission action at this time may have the unintended effect of producing
uncertainty in the satellite market since Congress is considering
legislation on this very issue. Therefore, we strongly urge that the
Commission not take any action to permit any company to purchase
more than 10 percent of COMSAT, through the potential authorized common
carrier exception, a reverse merger, asset transfer or other similar
method.
We greatly appreciate your assistance on this important matter.
Sincerely,
/s/ Tom Bliley /s/ Conrad Burns
--------------------------- -------------------------------------
Tom Bliley Conrad Burns
Chairman Chairman
House Committee on Commerce Senate Subcommittee on Communications
Exhibit 24
For Immediate Release
LOCKHEED MARTIN/COMSAT CORPORATION JOINT STATEMENT
BETHESDA, Maryland, January 22, 1999 - Lockheed Martin Global
Telecommunications CEO John Sponyoe and COMSAT Corporation President and
CEO Betty Alewine today responded to a joint statement from Senate
Subcommittee on Communications Chairman Conrad Burns and House Commerce
Committee Chairman Tom Bliley committing to rapid consideration of positive
satellite reform legislation.
"We are encouraged that the chairmen have committed to placing satellite
reform at the top of their respective legislative agendas," said Sponyoe
and Alewine. "Today's letter to the Federal Communications Commission
demonstrates that the chairmen are committed to working together to enact
necessary and meaningful reform of the Communications Satellite Act of
1962."
Sponyoe and Alewine were reacting to a letter sent to the FCC Chairman
William Kennard stating the Chairmen's intention to move satellite reform
legislation early in the legislative session. The letter asked that, in
light of this expected progress, the FCC postpone its own proceeding
considering the Lockheed Martin/COMSAT combination, which requires both FCC
and congressional action.
Sponyoe and Alewine said that while the FCC must determine its response to
the congressional leaders, the two companies remain steadfast in their
belief that the Lockheed Martin/COMSAT combination is consistent with
congressional goals regarding deregulation and privatization, and
beneficial to the U.S. telecommunications industry. "As Senator Burns
noted, the potential merger of Lockheed Martin and COMSAT will be pro-
competitive and holds enormous potential in the emergence of this exciting
new market."
Contacts: Charles Manor, Lockheed Martin Global Telecommunications,
301/581-2720
Susan Lewis Sallet, COMSAT Corporation, 301/214-3442
