SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): April 23, 1996
Lockheed Martin Tactical Systems, Inc.
(as successor corporation to Loral Corporation)
(Exact Name of Registrant as Specified in Charter)
New York 1-4238 13-1718360
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
6801 Rockledge Drive, Bethesda, Maryland 20817
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (301) 897-6000
Loral Corporation, 600 Third Avenue, New York, New York 10016
(Former Name or Former Address, if Changed Since Last Report)
Item 1. CHANGES IN CONTROL OF THE REGISTRANT
The Offer. On January 12, 1996 LAC Acquisition Corpo-
ration (the "Purchaser"), a wholly owned subsidiary of
Lockheed Martin Corporation ("Lockheed Martin"), commenced a
cash tender offer (the "Offer") for all of the outstanding
shares of Common Stock (the "Shares"), par value $0.25 per
share, of Loral Corporation (the "Company" or "Loral"). The
Offer was made pursuant to an Agreement and Plan of Merger
dated as of January 7, 1995 (the "Merger Agreement") by and
among the Company, Purchaser and Lockheed Martin. The Offer
expired at Midnight, New York City time, on April 22, 1996.
Based on the final information provided by the First Chicago
Trust Company of New York (the "Depositary"), a total of
166,529,814 Shares (or approximately 95%) were validly
tendered and not withdrawn pursuant to the Offer, including
13,738,017 Shares tendered pursuant to notices of guaranteed
delivery. The Purchaser has accepted for payment all such
Shares at a purchase price of $38.00 per Share in cash.
Through April 29, 1996 166,449,231 Shares had been purchased
by the Purchaser pursuant to the Offer.
The Merger. On April 29, 1996 a merger of the Purchas-
er with and into the Company (the "Merger") pursuant to
Section 905 of the New York Business Corporation Law (the
"NYBCL") became effective. The Company was the Surviving
Corporation in the Merger and was renamed Lockheed Martin
Tactical Systems, Inc. ("Tactical Systems"). The Merger was
the second and final step in the acquisition of the Company
pursuant to the Merger Agreement. The first step was the
Offer described above. Under the Merger Agreement, each
Share outstanding immediately prior to the effective time of
the Merger was converted solely into the right to receive
the merger consideration of $38.00 per Share in cash. As a
result of the Merger, the Company (now known as Tactical
Systems) became a wholly owned subsidiary of Lockheed Mar-
tin.
Source and Amount of Funds. A description of the
source and amount of funds required to consummate the trans-
actions contemplated by the Offer and the Merger Agreement
is contained in Section 9, entitled "Source and Amount of
Funds" of the Offer to Purchase, dated as of January 12,
1996, which is filed as Exhibit (a)(9) to the Purchaser's
Tender Offer Statement on Schedule 14D-1, filed originally
on January 12, 1996, such Section, which is attached hereto
as Exhibit 99.1 is herein incorporated by reference.
Item 5. OTHER EVENTS
Following the merger referenced in Item 1, the New York
Stock Exchange, Inc. ("NYSE") suspended trading, effective
April 30, 1996, in the common stock of Loral (NYSE:LOR) and
in the following debt securities of Loral:
7.0% senior debentures due September 15, 2023 (NYSE:LOR/S23)
7 5/8% senior notes due June 15, 2004 (NYSE:LOR04)
7 5/8% senior debentures due June 15, 2025 (NYSE:LOR25)
8 3/8% senior debentures due January 15, 2023 (NYSE:LORJ23)
8 3/8% senior debentures due June 15, 2024 (NYSE:LOR24)
Applications were made to the Securities and Exchange
Commission (the "Commission") to delist Loral's common stock
and the above debt securities on May 2, 1996 and May 6, 1996,
respectively. It is anticipated that these applications will
be granted. Therefore, it is not anticipated that Tactical
Systems will continue to file reports, proxy statements and
other information with the Commission under the Securities
Exchange Act of 1934 (the "Exchange Act"). In the event that
Tactical Systems does not file reports, proxy statements and other
information with the Commission under the Exchange Act, summarized
financial information in respect of Tactical Systems may be
included in the footnotes to the audited consolidated finan-
cial statements of the Lockheed Martin included in Lockheed
Martin's Annual Report on Form 10-K filed pursuant to Sec-
tion 13 of the Exchange Act.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
(c) EXHIBITS
EXHIBIT 99.1 Section 9, entitled "Source and Amount of
Funds" of the Offer to Purchase, dated as of
January 12, 1996, which is filed as Exhibit
(a)(9) to the Purchaser's Tender Offer State-
ment on Schedule 14D-1, filed originally on
January 12, 1996.
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly authorized.
Lockheed Martin Tactical Systems, Inc.
(as successor corporation to Loral
Corporation)
Date: May 7, 1996 By: /s/ STEPHEN M. PIPER
______________________________
Name: Stephen M. Piper
Title: Vice President and Assistant
Secretary
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
EXHIBIT 99.1 Section 9, entitled "Source
and Amount of Funds" of the
Offer to Purchase, dated as
of January 12, 1996, which is
filed as Exhibit (a)(9) to
the Purchaser's Tender Offer
Statement on Schedule 14D-1
filed originally on January
12, 1996.
9. SOURCE AND AMOUNTS OF FUNDS. The total amount of funds required by
the Purchaser to acquire all outstanding Shares pursuant to the Offer
and the Merger, to consummate the transactions contemplated by the
Offer, the Merger Agreement and the Distribution Agreement, to refinance
certain indebtedness of the Company, and to pay fees and expenses
relating to the Offer and the Merger is estimated to be approximately
$8.4 billion. These funds will be provided to the Purchaser by Parent
either through an equity investment in, or debt financing provided to,
Purchaser or a combination thereof. Parent intends to obtain these
funds, together with the funds necessary to provide working capital to
support the combined operations of Parent and its subsidiaries,
including the Company and its subsidiaries following the closing of the
Offer, from loans to be provided by Morgan Guaranty Trust Company of New
York (together with its affiliates, "Morgan Guaranty"), Bank of America
National Trust and Savings Association (together with its affiliates,
"Bank of America"; collectively with Morgan Guaranty, the "Co-
Arrangers"), Citibank USA, (together with its affiliates, "Citibank")
Inc., as managing agent, and a syndicate of other commercial banks (the
"Banks") to be formed by the Co- Arrangers. It is anticipated that the
loans to be provided by Morgan Guaranty, Bank of America, Citibank, and
the other Banks (which are collectively referred to as the "Bank
Financing") will be fully and unconditionally guaranteed by Purchaser
and certain other subsidiaries of Parent and are collectively referred
to as the "Bank Financing." Alternatively, Parent may obtain all or a
portion of the necessary financing through the issuance of commercial
paper backed by the Bank Financing. The existing revolving credit
facilities of Parent and the Company will be terminated in connection
with the closing of the Offer and the consummation of the Bank
Financing.
Set forth below is a summary description of the Bank Financing.
Consummation of the Bank Financing is subject to, among other things,
successful syndication of the Bank Financing and the negotiation and
execution of definitive financing agreements on terms satisfactory to
Parent, Purchaser and the Co-Arrangers. The summary description does not
purport to be complete, and there can be no assurance that the terms set
forth below will be contained in such agreements or that such agreements
will not contain additional provisions.
Parent has received commitments from Morgan Guaranty and Bank of
America pursuant to which each of them has agreed to provide up to
$1.375 billion of the Bank Financing, and from Citibank pursuant to
which it has agreed to provide up to $750 million of the Bank Financing.
The Co-Arrangers also have agreed to act as agents for an anticipated
commercial bank syndicate (including the Co-Arrangers and Citibank).
Morgan Guaranty has advised Parent that, based upon its knowledge of,
and experience in, the loan syndication market and subject to certain
assumptions, it is highly confident that it will be able to arrange a
syndicate of lenders for an additional $6.5 billion.
Parent has agreed to pay certain fees to Morgan Guaranty, Bank of
America and to Citibank as managing agent, and has agreed to pay Bank of
America, as Administrative Agent under the Credit Facilities, an annual
administrative fee. Parent also has agreed to pay certain of the
expenses of the Co-Arrangers incurred in connection with the Bank
Financing and to provide the Co- Arrangers, Citibank, as the Managing
Agent, and their respective directors, officers, employees, and
affiliates with customary indemnification.
The Bank Financing will consist of two facilities which will be
entered into prior to or concurrently with the consummation of the
Offer. The credit facilities will consist of a 364-day unsecured
revolving credit facility in the amount of $5 billion (the "Short-Term
Facility") and a five-year unsecured revolving credit facility in the
amount of $5 billion (the "Five-Year Facility"). The Short-Term Facility
and the Five-Year Facility are collectively referred to as the "Credit
Facilities." The Short-Term Facility will have a final maturity 364 days
after the date of execution of the definitive financing agreement for
the Short-Term Facility. There will be no required prepayments or
scheduled reductions of availability of loans under the Credit
Facilities.
Revolving loans under the Credit Facilities will bear interest, at the
option of Parent, at (i) a base rate equal to the higher of the rate
announced from time to time by Bank of America as its reference rate or
the daily Federal Funds rate plus 0.5%; (ii) the London interbank
offered rate ("LIBOR") for one-, two-, three-, six- (or subject to the
Banks' consent) twelve-month periods plus an interest rate margin based
on the rating for senior, unsecured long-term debt of Parent announced
from time to time by Standard & Poor's Corporation ("S&P") and Moody's
Investor Services, Inc. ("Moody's"); (iii) a reserve- and FDIC
insurance-adjusted rate for 30-,60-, 90-, or 180-day certificates of
deposit (the "CD Rate") plus an interest rate margin based on the rating
for senior, unsecured long-term debt of Parent announced from time to
time by S&P and Moody's, and D&P; or (iv) a money market bid rate based
on competitive bids solicited of the Banks and accepted by Parent
pursuant to an auction mechanism under the Credit Facilities. The
interest rate margins over LIBOR and the CD Rate range from .165% and
.29%, respectively, to .31% and .435%, respectively, for the Short-Term
Facility, and from .145% and .27%, respectively, to .50% and .625%,
respectively, for the Five-Year Facility, depending on the level of such
ratings. Interest will be payable quarterly in arrears based on a
365/366-day year for the reference rate used in determining the rate on
base rate loans and will be payable semi-annually in arrears or at the
end of the relevant interest period, whichever is sooner, based on a
360- day year and the actual number of days elapsed for LIBOR and CD
Rate loans. Money market bid rate loans will bear interest at rates
established on the basis of a bidding procedure and interest will be
payable at such times as are determined by such procedures.
Facility fees under the Credit Facilities will be payable to each Bank
on the amount of its commitment, whether used or unused, based on the
rating for senior, unsecured long-term debt of Parent announced from
time to time by S&P and Moody's and D&P. The facility fees for the
Short-Term Facility will range from .06% to .09% and the facility fees
for the Five-Year Facility will range from .08% to .25%, depending on
the level of such ratings.
Each Bank's obligation to make loans under the Credit Facilities will
be subject to, among other things, the negotiation, execution, and
delivery of definitive financing agreements (collectively, the "Bank
Financing Agreements"), and the compliance by Parent and Purchaser
thereunder. The covenants in the Bank Financing Agreements will include
but not be limited to covenants limiting the ability of Parent and
certain of its subsidiaries to encumber certain of their assets, and a
covenant not to exceed a maximum leverage ratio. It is anticipated that
the Bank Financing Agreements will include terms, conditions,
representations, warranties, covenants, indemnities, events of default,
and other provisions customary in such agreements.
Following closing of the Offer, it is anticipated that Parent will
refinance all or a portion of the borrowings under the Credit Facilities
contemplated herein with funds raised in the public or private
securities markets. In the event the Offer has not been consummated by
April 30, 1996 the Offer is conditioned upon obtaining the financing
described herein (the "Financing Condition"). See Section 15.
