SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 27, 1999
COMSAT Corporation
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(Exact name of Registrant as specified in Charter)
District of Columbia 1-4929 52-0781863
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification
Number)
6560 Rock Spring Drive, Bethesda, MD 20817
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(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (301) 214-3000
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events
Senator Conrad Burns, Chairman of the Senate Subcommittee on
Communications, sent a letter to William E. Kennard, Chairman of the
Federal Communications Commission (the "FCC") on August 13, 1999 indicating
his hope that the FCC would act in a timely manner on the application by
Lockheed Martin Corporation ("Lockheed Martin") to acquire 49 percent of
COMSAT Corporation ("COMSAT" or the "Company").
Senator Burns and Representative Tom Bliley, Chairman of the House
Committee on Commerce, had previously requested in a letter to Mr. Kennard
on January 21, 1999 that the FCC withhold action on Lockheed Martin's
application prior to Congress adopting satellite reform legislation.
An industry publication has reported that a draft order concerning the
applications of the Lockheed Martin and its subsidiary, Regulus LLC, filed
with the FCC (a) to effect a transfer of control of COMSAT Government
Systems, Inc. ("CGSI") and become a common carrier and (b) to acquire 49
percent of the Company through classification as an authorized common
carrier, were put on circulation at the FCC late Tuesday, August 17, 1999.
Under typical FCC procedures, commissioners vote on orders put on
circulation within 30 days, although there is no legal requirement that the
commissioners do so. In addition, a meeting of the commissioners of the
FCC is scheduled for September 15, 1999. It is possible that the
applications may be scheduled for consideration at the September 15
meeting. If the FCC acts in accordance with its past practices, the agenda
for that meeting would typically be released by September 8, 1999. Neither
the Company nor Lockheed Martin knows whether the application will be
scheduled to be considered at the September 15 meeting or whether the
commissioners will vote on the circulated order in accordance with the
FCC's 30 day procedure, although, either course would allow the FCC to act
upon the applications prior to September 18, 1999. The Company and Lockheed
Martin have each stressed to the FCC the importance of action prior to this
date, however, there can be no assurance that the FCC will act before
September 18, 1999 or that any action will be favorable.
COMSAT shareholders voted to approve the merger agreement with
Lockheed Martin at COMSAT's 1999 Annual Meeting of Shareholders held on
August 20, 1999.
On August 27, 1999, Lockheed Martin issued a press release pursuant to
which it announced that the tender offer had been extended until 12:00
noon, New York City time on Saturday, September 18, 1999. The terms of the
extended tender offer otherwise remain the same as those set forth in
Lockheed Martin's Offer to Purchase filed with the Securities and Exchange
Commission on September 25, 1998.
Lockheed Martin has previously disclosed that it had negotiated terms
with the Department of Justice (the "DOJ") which could form the basis of a
consent order that would resolve concerns raised by the DOJ staff in the
Hart-Scott-Rodino antitrust review process as to Lockheed Martin's
simultaneous ownership of shares of Loral Space & Communications Ltd.
("Loral Space") and, following the consummation of the tender offer,
COMSAT. The proposed consent order contemplated that Lockheed Martin would
divest its ownership interest in Loral Space. As previously disclosed,
however, Lockheed Martin has stated that its willingness to enter into a
consent order reflecting the terms negotiated was conditioned upon Lockheed
Martin's reaching certain agreements with Loral Space that would offer
Lockheed Martin assurances satisfactory to it that it could accomplish the
divestiture in accordance with the terms and conditions and within the time
periods contemplated by the proposed consent order. Lockheed Martin has
advised COMSAT that it has been unable to obtain these assurances from
Loral Space.
In addition, as previously disclosed, Lockheed Martin and COMSAT have
each received requests for additional information from the DOJ in response
to their filings with the DOJ of the notices required by the Hart-Scott-
Rodino Antitrust Improvements Act of 1976. The receipt of these requests
extends the waiting period (prior to which the companies may not complete
the tender offer or the merger under without violating the antitrust laws)
until the 20th calendar day after each company substantially complies with
the request directed to it. Also disclosed was that Lockheed Martin and
COMSAT had each provided data to the DOJ responsive to the requests for
additional information but that neither had supplied all of the information
requested. In view of the status of Lockheed Martin's discussions with
Loral Space, Lockheed Martin and COMSAT determined to provide the DOJ with
the remaining materials responsive to the requests for additional
information.
On August 27, 1999, each company supplied the additional materials and
certified that it was in substantial compliance with the request directed
to it. In conjunction with the production by Lockheed Martin and COMSAT of
the additional information and the certifications of substantial
compliance, the staff of the DOJ has requested depositions of
representatives of Lockheed Martin and COMSAT. Substantial compliance with
the DOJ's requests for information starts the running of a 20 calendar day
waiting period which the companies anticipate will expire at midnight New
York City time on September 16, 1999. The DOJ has the authority terminate
this waiting period early. If prior to the expiration of the waiting
period, the DOJ does not challenge compliance by either or both companies
with the DOJ's requests for information, the waiting period will expire. In
addition, the DOJ has the authority to bring an action alleging that the
proposed transactions would be likely to lessen competition in violation of
the antitrust laws. The expiration or termination of the waiting period is
one of conditions to the tender offer.
Neither Lockheed Martin nor COMSAT knows whether or not the DOJ will
terminate the waiting period early, will allow the period to expire or will
challenge compliance by either or both companies with the DOJ's requests
for information or will elect to bring an action challenging the
transaction as violating the antitrust laws before the expiration of the
waiting period.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
COMSAT Corporation
By: /s/ Alan Korobov
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Alan Korobov
Controller
Date: September 3, 1999