<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement
pursuant to Section 14(d)(4) of the
Securities Exchange Act of 1934
(Amendment No. 1)
Loral Corporation
(Name of Subject Company)
Loral Corporation
(Name of Person(s) Filing Statement)
Common Stock, par value $.25 per share
(Title of Class of Securities)
543859 10 2
(CUSIP Number of Class of Securities)
Michael B. Targoff
Senior Vice President and Secretary
Loral Corporation
600 Third Avenue
New York, New York 10016
(212) 697-1105
(Name and address and telephone number of person
authorized to receive notice and communications on
behalf of the person(s) filing statement)
with a copy to:
Bruce R. Kraus, Esq.
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
(212) 821-8000
<PAGE>1
This Amendment No. 1 amends and supplements the
Solicitation/Recommendation Statement on Schedule 14D-9 (as such may be amended
from time to time, the "Schedule 14D-9") filed on January 16, 1996 by Loral
Corporation, a New York corporation (the "Company" or "Loral"), with the
Securities and Exchange Commission (the "Commission"), relating to the tender
offer (the "Offer") by LAC Acquisition Corporation, a New York corporation (the
"Purchaser") and a wholly-owned subsidiary of Lockheed Martin Corporation, a
Maryland corporation ("Parent" or "Lockheed Martin"), disclosed in a Tender
Offer Statement on Schedule 14D-1 (the "Schedule 14D-1"), dated January 12,
1996, for all outstanding shares of common stock (the "Common Stock"), par value
$.25 per share, of the Company, and the associated preferred stock purchase
rights (the "Rights," and together with the Common Stock, the "Shares"), for a
per Share consideration of $38.00 net in cash to the seller, upon the terms and
subject to the conditions set forth in the Agreement and Plan of Merger, dated
as of January 7, 1996 (the "Merger Agreement"), among Parent, the Purchaser and
the Company.
All capitalized terms used herein but not otherwise defined
herein shall have the meanings ascribed thereto in the Schedule 14D-9. In
connection with the foregoing, the Company is hereby amending the Schedule 14D-9
as follows:
Item 8. Additional Information to be Furnished.
Item 8 is amended and supplemented by the addition of the following
paragraphs thereto:
"Hart-Scott-Rodino Filings. On January 24, 1996,
Loral received a notice from Lockheed Martin that Lockheed Martin
intends to file on or about January 24, 1996, and Loral has been
informed that Lockheed Martin did file on January 24, 1996, a
Notification and Report Form pursuant to the HSR Act with respect to
the Offer. On January 24, 1996, Loral filed a Notification and Report
Form pursuant to the HSR Act with respect to the Offer. Under the
provisions of the HSR Act applicable to the Offer, the purchase of
Shares under the Offer may not be consummated until the expiration of a
15-calendar day waiting period following such filing by Lockheed
Martin. Accordingly, the waiting period with respect to the Offer will
expire at 11:59 p.m., New York City time, on February 8, 1996, unless
Lockheed Martin or Loral receives a request for additional information
or documentary material, or the Antitrust Division and the FTC
terminate the waiting period prior thereto. Section 16 of Lockheed
Martin's Offer to Purchase sets forth additional information relating
to the HSR Act and such waiting period as they relate to the Offer.
<PAGE>2
Piven Lawsuit. The Company, certain of its directors
(the "Director Defendants") and Lockheed Martin have been named as
defendants in a purported class action lawsuit entitled Sylvia B. Piven
v. Loral Corp., Bernard L. Schwartz, Frank C. Lanza, Howard Gittis,
Robert B. Hodes, Gershon Kekst, Charles Lazarus, Donald E. Shapiro,
Allen W. Shinn, Thomas J. Stanton, Jr., Daniel Yankelovich, Arthur L.
Simon, and Lockheed Martin Corp., Index Number 96-100390 (such lawsuit,
the "Piven Lawsuit"), which was filed in the Supreme Court of the State
of New York, in the County of New York, on or about January 9, 1996.
The plaintiff in the Piven Lawsuit served a copy of the complaint (the
"Piven Complaint") upon the Company and the Director Defendants on
January 19, 1996 and purportedly served a copy of the complaint upon
Lockheed Martin thereafter. Such action purports to be brought as a
class action on behalf of all stockholders of the Company. The Piven
Complaint alleges, among other things, that (a) the defendants
allegedly sought to enrich and/or entrench themselves at the expense of
the Company's stockholders, (b) the Director Defendants allegedly
breached their fiduciary duties and allegedly have not protected
stockholders from any alleged conflicts of interest between such
Defendant Directors and the Company's stockholders, (c) the defendants
allegedly have taken advantage of their allegedly superior information
regarding the Company's relative values, (d) the Director Defendants
allegedly did not seek other purchasers for the Company at the highest
possible price for Loral stockholders and allegedly sought to chill
third party offers for the Company, and (e) Parent allegedly induced,
aided and abetted the breach of fiduciary duty by the Director
Defendants.
As relief, the Piven Complaint seeks, among other
things, (a) a declaration that the defendants conduct is unfair, unjust
and inequitable to plaintiff and other members of the purported class,
(b) an injunction preliminarily and permanently enjoining the
defendants from taking any steps to complete the Offer, the Merger and
the Spin-Off (the "Transaction"), (c) the award of compensatory damages
in an unspecified amount, and (d) the award to plaintiff of attorney's
fees and costs. Loral believes that the Piven Lawsuit is without merit
and intends to vigorously defend such action. The above summary of the
Piven Lawsuit does not purport to be complete and is qualified in its
entirety by reference to the full text of the Piven complaint, which is
attached as Exhibit 17 hereto and which is hereby incorporated herein
by reference.
<PAGE>3
Goltz Lawsuit. The Company and certain of its
directors and officers (the "Individual Defendants") have been named as
defendants in a purported class action lawsuit entitled Arthur Goltz
and Murray Zucker v. Loral Corporation, Bernard L. Schwartz, Frank C.
Lanza, Howard Gittis, Robert B. Hodes, Gershon Kekst, Charles Lazarus,
Malvin A. Ruderman, E. Donald Shapiro, Allen M. Shinn, Thomas J.
Stanton, Jr., Daniel Yankelovich, Michael P. DeBlasio, Robert V.
LaPenta and Michael B. Targoff, Case Number BC142098 (such lawsuit, the
"Goltz Lawsuit"), which was filed in the Superior Court of the State of
California, in the County of Los Angeles, on or about January 22, 1996.
Such action purports to be brought as a class action on behalf of all
shareholders of the Company. The complaint (the "Goltz Complaint") in
the Goltz Lawsuit alleges, among other things, that (a) the Individual
Defendants allegedly breached their fiduciary duties and failed to
attempt in good faith to maximize shareholder value in connection with
the Transaction, (b) the Individual Defendants allegedly sought to
entrench themselves in their position with the Company at the expense
of the Company's stockholders, (c) the Individual Defendants allegedly
sought to thwart third party offers for the Company allegedly through,
among other things, the adoption of a shareholder rights plan and
providing in the Merger Agreement for the payment of certain
termination fees under certain circumstances, and (d) the Individual
Defendants allegedly have not protected stockholders from any alleged
conflicts of interest between such Individual Defendants and the
Company's stockholders.
As relief, the Goltz Complaint seeks, among other
things, (a) an injunction enjoining the defendants to fulfill their
fiduciary duties by seeking third party offers for the Company, (b) an
injunction enjoining the Transaction and enjoining defendants from
enforcing either the Company's shareholder rights plan or the Merger
Agreement provisions for the payment of certain termination fees, (c)
the award of compensatory damages in an unspecified amount, and (d) the
award to plaintiff of attorney's fees and costs. Loral believes that
the Goltz Lawsuit is without merit and intends to vigorously defend
such action. The above summary of the Goltz Lawsuit does not purport to
be complete and is qualified in its entirety by reference to the full
text of the Goltz Complaint, which is attached as Exhibit 18 hereto and
which is hereby incorporated herein by reference.
NYSE Inquiry. On January 19, 1996, Loral received a
written inquiry from the New York Stock Exchange (the "NYSE") in
connection with the NYSE's regularly conducted review of market
activity surrounding significant corporate announcements. In connection
with the Transaction, the NYSE has initiated a review of the trading in
common stock of the Company which preceded the January 8, 1996 public
announcement that the Company and Lockheed Martin were entering into
the Transaction. The NYSE has requested, and Loral intends to provide
to the NYSE, certain information relating to the Transaction and the
events preceding such public announcement.
<PAGE>4
Information Statement. On January 24, 1996, Loral
Space & Communications Ltd. ("Loral Space") filed with the Commission
pursuant to the Exchange Act a Registration Statement on Form 10 (such
document, which includes and incorporates by reference the Information
Statement, the "Form 10") with respect to the Loral Space Common Stock.
As noted in the Schedule 14D-9, the Distribution is conditioned upon
the satisfaction or waiver of a number of conditions, including, among
others, the condition that the Form 10 shall have been declared
effective by the Commission. Pursuant to Section 3.1(a) of the
Distribution Agreement, the Company and Loral Space have agreed to use
their respective reasonable efforts to cause the Form 10 to be declared
effective under the Exchange Act."
Item 9. Material To Be Filed As Exhibits.
Exhibit 17. Complaint in an action filed in the Supreme Court
of the State of New York, County of New York,
entitled Sylvia B. Piven v. Loral Corp., Bernard
L. Schwartz, Frank C. Lanza, Howard Gittis,
Robert B. Hodes, Gershon Kekst, Charles Lazarus,
Donald E. Shapiro, Allen M. Shinn, Thomas J.
Stanton, Jr., Daniel Yankelovich, Arthur L. Simon,
and Lockheed Martin Corp., Index Number 96-100390.
Exhibit 18. Complaint in an action filed in the Superior Court
of the State of California, in the County of Los
Angeles, entitled Arthur Goltz and Murray Zucker v.
Loral Corporation, Bernard L. Schwartz, Frank C.
Lanza, Howard Gittis, Robert B. Hodes, Gershon
Kekst, Charles Lazarus, Malvin A. Ruderman, E.
Donald Shapiro, Allen M. Shinn, Thomas J. Stanton,
Jr., Daniel Yankelovich, Michael P. DeBlasio,
Robert V. LaPenta and Michael B. Targoff, Case
Number BC142098.
Exhibit 19 Copy of notice to plan participants from Fidelity
Management Trust Company, as trustee under certain
benefit plans ("Fidelity"), relating to the Offer,
and accompanying form of instruction to Fidelity
from such plan participants.
<PAGE>5
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: January 25, 1996
LORAL CORPORATION
By: /s/ Michael B. Targoff
Name: Michael B. Targoff
Title: Senior Vice President
and Secretary
<PAGE>6
EXHIBIT INDEX
Exhibit No. Exhibit
Exhibit 99.17. Complaint in an action filed in the Supreme Court
of the State of New York, County of New York,
entitled Sylvia B. Piven v. Loral Corp., Bernard
L. Schwartz, Frank C. Lanza, Howard Gittis,
Robert B. Hodes, Gershon Kekst, Charles Lazarus,
Donald E. Shapiro, Allen M. Shinn, Thomas J.
Stanton, Jr., Daniel Yankelovich, Arthur L. Simon,
and Lockheed Martin Corp., Index Number 96-100390.
Exhibit 99.18. Complaint in an action filed in the Superior Court
of the State of California, in the County of Los
Angeles, entitled Arthur Goltz and Murray Zucker v.
Loral Corporation, Bernard L. Schwartz, Frank C.
Lanza, Howard Gittis, Robert B. Hodes, Gershon
Kekst, Charles Lazarus, Malvin A. Ruderman, E.
Donald Shapiro, Allen M. Shinn, Thomas J. Stanton,
Jr., Daniel Yankelovich, Michael P. DeBlasio,
Robert V. LaPenta and Michael B. Targoff, Case
Number BC142098.
Exhibit 99.19 Copy of notice to plan participants from Fidelity
Management Trust Company, as trustee under certain
benefit plans ("Fidelity"), relating to the Offer,
and accompanying form of instruction to Fidelity
from such plan participants.
<PAGE>1
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
- ----------------------------------------x
SYLVIA B. PIVEN, On Behalf Of : Index No.
Herself And All Others Similarly :
Situated, :
:
Plaintiff, :
: CLASS ACTION
- against - : COMPLAINT
:
LORAL CORP., BERNARD L. SCHWARTZ, :
FRANK C. LANZA, HOWARD GITTIS, :
ROBERT B. HODES, GERSHON KEKST, :
CHARLES LAZARUS, DONALD E. SHAPIRO, :
ALLEN M. SHINN, THOMAS, J. STANTON, JR.,:
DANIEL YANKELOVICH, ARTHUR L. SIMON, :
and LOCKHEED MARTIN CORP., :
:
Defendants. :
- ----------------------------------------x
Plaintiff, by her attorneys, alleges upon information and belief
(said information and belief being based, in part, upon the investigation
conducted by and through her counsel), except with respect to her ownership of
Loral Corp. common stock and her suitability to serve as a class
representative, which are alleged upon personal knowledge, as follows:
PARTIES
1. Plaintiff Sylvia B. Piven is, and has been for years, the owner
of 800 shares of common stock of defendant Loral Corp. ("Loral" or the
"Company").
2. Defendant Loral is a corporation organized and existing under
and by virtue of the laws of the State of New York. Defendant Loral maintains
its principal offices at 600
<PAGE>2
Third Avenue, New York, New York, which is in the City, County and State of
New York.
3. Defendant Bernard L. Schwartz ("Schwartz") is the Chairman of
the Board and Chief Executive Officer of defendant Loral.
4. Defendant Frank C. Lanza ("Lanza") is President, Chief
Operating Officer and a Director of defendant Loral.
5. Defendant Howard Gittis ("Gittis") is a Director of defendant
Loral.
6. Defendant Robert B. Hodes ("Hodes") is a Director of defendant
Loral.
7. Defendant Gershon Kekst ("Kekst") is a Director of defendant
Loral.
8. Defendant Charles Lazarus ("Lazarus") is a Director of
defendant Loral.
9. Defendant Donald E. Shapiro ("Shapiro") is a Director of
Defendant Loral.
10. Defendant Allen M. Shinn ("Shinn") is a Director of Defendant
Loral.
11. Defendant Thomas J. Stanton, Jr. ("Stanton") is a Director of
defendant Loral.
12. Defendant Daniel Yankelovich ("Yankelovich") is a Director of
defendant Loral.
13. Defendant Arthur L. Simon ("Simon") is a Director of defendant
Loral.
<PAGE>3
14. The foregoing individuals, collectively referred to as the
"Defendant Directors," as directors and/or officers of Loral, owe fiduciary
duties to Loral and its shareholders.
15. Defendant Lockheed Martin Corp. ("Lockheed") is a corporation
organized and existing under and by virtue of the laws of the State of
Maryland. Defendant Lockheed maintains its principle offices at 6801
Rockledge Drive, Bethesda, Maryland.
CLASS ACTION ALLEGATIONS
16. Plaintiff brings this action on her own behalf and as a class
action, pursuant to Section 901 of the CPLR, on behalf of all shareholders of
Loral (except defendants herein and any person, firm, trust, corporation or
other entity related to or affiliated with any of the defendants) or their
successors in interest, who have been or will be adversely affected by the
conduct of defendants alleged herein.
17. This action is properly maintainable as a class action for the
following reasons:
(a) The class of shareholders for whose benefit this
action is brought is so numerous that joinder of all class members is
impracticable. As of October 31, 1995, there were over 172 million shares of
defendant Loral's common stock outstanding owned by 4,500 shareholders of
record scattered throughout the United States and foreign countries.
(b) There are questions of law and fact which are common
to members of the class and which predominate
<PAGE>4
over any questions affecting any individual members. The common questions
include, inter alia, the following:
i. Whether the defendants have engaged in a plan and
scheme to enrich and/or entrench themselves at the expense of Loral's public
shareholders;
ii. Whether the Defendant Directors have breached
fiduciary duties owed by them to plaintiff and members of the Class, and/or
have aided and abetted in such breach, by virtue of their participation and/or
acquiescence and by their other conduct complaint of herein;
iii. Whether defendants have failed to fully disclose the
true value of defendant Loral's assets and earning power and the future
financial benefits which they expect to derive from the takeover by Lockheed;
iv. Whether the Defendant Directors have wrongfully
failed and refused to seek a purchaser of Loral at the highest possible price
and instead, have sought to chill potential offers and acquire the valuable
assets of defendant Loral for defendant Lockheed at an unfair and inadequate
price;
v. Whether defendant Lockheed has induced, aided or
abetted breaches of fiduciary duty by members of Loral's Board of Directors.
vi. Whether plaintiff and the other members of the Class
will be irreparably damaged by the conduct and transactions complained of
herein;
<PAGE>5
vii. Whether defendants have breached or aided and
abetted the breach of the fiduciary and other common law duties owed by them
to plaintiff and the other members of the Class; and
viii. Whether defendants are pursuing a scheme and course
of business designed to eliminate the public shareholders of defendant Loral
in violation of the laws of the State of New York.
18. Plaintiff is committed to prosecuting this action and has
retained competent counsel experienced in litigation of this nature. The
claims of plaintiff are typical of the claims of the other members of the
Class and plaintiff has the same interests as the other members of the Class.
Accordingly, plaintiff is an adequate representative of the Class and will
fairly and adequately protect the interests of the Class.
19. Plaintiff anticipates that there will not be any difficulty in
the management of this litigation.
20. For the reasons stated herein, a class action is superior to
other available methods for the fair and efficient adjudication of this
action.
SUBSTANTIVE ALLEGATIONS
21. Defendant Loral develops and manufactures airborne electronic
warfare systems and equipment, weapons systems trainers and microwave
components; produces electronic communications equipment and systems used in
antisubmarine and
<PAGE>6
space warfare; operates and maintains simulator networks for ground vehicle
and airborne platform training; and provides systems integration services,
operations management services and post-deployment systems support services.
22. Defendant Lockheed is a holding company with subsidiaries which
research, develop and produce aerospace products, systems and services;
design, manufacture and integrate advanced technology products and services
for the U.S. Government and private industry; produce construction aggregates
and specialty chemical products; and manage certain facilities for the
Department of Energy.
23. On January 8, 1996, it was announced that defendant Lockheed
had agreed to acquire Loral's defense electronics and systems integration
businesses for approximately $9.1 billion (the "Transaction"). The
Transaction essentially has three elements: first, each shareholder of Loral
will receive $38 in cash per share through a tender offer set to commence by
January 12, 1996; second, Loral shareholders will receive, for each share, one
share of the newly-formed public company, to be called Loral Space and
Communications Corp. ("Loral Space"), which will own Loral's present satellite
and telecommunications interests; and third, Lockheed will invest $344 million
for a 20% equity position in Loral Space.
24. Defendant Schwartz admits that the Company has had no "serious
discussions" regarding a combination with any third
<PAGE>7
parties. In fact, according to press reports, at the same time it approved
the Lockheed transaction, the Loral Board also adopted a shareholder rights
plan to deter other potential suitors from making a competing offer. In
addition, the $38 per share offer provides little premium to shareholders for
their Loral stock which closed on January 5, 1996, at $36 per share. Also,
the value of the Loral Space stock can only be "estimated" at this time and
its business according to the Los Angeles Times has been "untested."
25. The Transaction is wrongful, unfair and harmful to Loral's
public stockholders, the Class members, and represents an attempt by
defendants to aggrandize their personal and financial positions and interest
and to enrich themselves at the expense of and to the detriment of the public
shareholders of the Company. The Transaction will deny plaintiff and other
Class members their rights to share proportionately in the true value of the
Company's assets and future growth in profits and earnings, while usurping the
same for the benefit of defendant Lockheed at an unfair and inadequate price.
According to the Dow Jones News Wire, in conjunction with the Transaction,
defendant Schwartz will become chairman and CEO of Loral Space and will become
Vice Chairman of the Board of Lockheed. Defendant Lanza will also join
Lockheed's Board of Directors and serve as Executive Vice President and Chief
Operating Officer of Lockheed.
<PAGE>8
CAUSE OF ACTION FOR BREACH OF FIDUCIARY DUTIES
26. Defendants other than defendant Lockheed, acting in concert,
have violated their fiduciary duties owed to the public shareholders of Loral
and put their own personal interests and the interests of defendant Lockheed
ahead of the interests of the Loral public shareholders at the expense of
Loral's public shareholders.
27. The Defendant Directors failed to (1) undertake an adequate
evaluation of Loral's worth as a potential merger/acquisition candidate; (2)
take adequate steps to enhance Loral's value and/or attractiveness as a
merger/acquisition candidate; (3) effectively expose Loral to the marketplace
in an effort to create an active and open auction for Loral; or (4) act
independently so that the interests of public shareholders would be protected.
Instead, defendants have accepted a cash value for the publicly held shares of
defendant Loral without an appropriate premium or recognition of the added
value of Loral that will result from it being wholly-owned by defendant
Lockheed, and have agreed to terms which will impede maximization of
shareholder value.
28. Furthermore, in contemplating and implementing their plan to
obtain immediate financial rewards for themselves, the Defendant Directors
have failed to (1) adequately insure that no conflicts of interest existed,
and, instead, have resolved such conflicts in favor of themselves and
defendant Lockheed,
<PAGE>9
rather than ensure that all conflicts were resolved in the best interest of
Loral and its public shareholders; or (2) acted independently or in any other
way to ensure that the interests of Loral's public shareholders will be
protected.
29. Defendants have reached understandings among themselves that
they will not solicit a proposal or initiate any discussions with any person
or entity regarding any offer or proposal for the acquisition of the business
of Loral by merger, asset sale, stock sale or otherwise, while Loral is still
a publicly-held company. While the Defendant Directors of Loral should seek
out other possible purchasers of the assets of Loral or its stock in a manner
designed to obtain the highest possible price for Loral's shareholders, or
seek to enhance the value of Loral for all its current shareholders, they have
instead resolved to wrongfully obtain the valuable assets of Loral for
defendant Lockheed at a bargain price, which under the circumstances here,
disproportionately benefits them. These understandings have been reached in
violation of the Defendant Directors' fiduciary duties.
30. These tactics pursued by the defendants are, and will continue
to be, wrongful, unfair and harmful to Loral's public shareholders, serve no
legitimate business purpose of Loral, and are an attempt by the defendants to
aggrandize their personal positions, interests and finances at the expense of
and to the detriment of the public stockholders of Loral. These
<PAGE>10
maneuvers by the defendants will deny members of the Class their right to
share in the true value of Loral's valuable assets, future earnings and
profitable businesses to the same extent as they would as Loral shareholders.
31. In contemplating, planning and/or doing the foregoing specified
acts and in pursuing and structuring the Transaction, the defendants are not
acting in good faith toward plaintiff and the Class, and have breached, and
are breaching, their fiduciary duties to plaintiff and the Class.
32. Because the Defendant Directors (and those acting in concert
with them) dominate and control the business and corporate affairs of Loral
and because they are in possession of private corporate information concerning
Loral's businesses and future prospects, there exists an imbalance and
disparity of knowledge and economic power between the defendants and the
public shareholders of Loral which makes it inherently unfair to Loral's
public shareholder. The Transaction will ensure that defendants
disproportionately benefit from the value and future financial prospects of
Loral, in contravention of defendants' fiduciary duties to assure that Loral's
shareholders receive the highest value for their shares.
33. Defendant Lockheed has acted and is acting with knowledge that
the other defendants are in breach of their fiduciary duties to Loral's public
shareholders and has intentionally, recklessly or negligently induced, aided
and
<PAGE>11
abetted such breaches of fiduciary duties by the directors of Loral.
34. By reason of the foregoing acts, practices and course of
conduct, the Defendant Directors have failed to use due care and diligence in
the exercise of their fiduciary obligations toward Loral and its public
shareholders.
35. The acts complained of here above were willful, malicious, and
oppressive, in that the defendants, and each of them, know that their actions
as complained of herein, involve improper and illegal practices, violations of
law and other acts completely alien to the duties of officers and directors to
carry out corporate affairs in a just, honest, and equitable manner. By
reasons of the foregoing, the Class is entitled to exemplary damages
determined through a proper process to maximize shareholder value.
36. As a result of the actions of the defendants, plaintiff and the
Class have been and will be damaged in that they will not receive the fair
value of Loral's assets and business in exchange for their Loral shares, and
have been and will be prevented from obtaining a price for their shares of
Loral common stock determined through a proper process to maximize shareholder
value.
37. Unless enjoined by this Court, the Defendant Directors will
continue to breach their fiduciary duties owed to plaintiff and the Class, and
will exclude the Class from
<PAGE>12
receiving fair value for their proportionate share of Loral's valuable assets
and businesses, all to the irreparable harm of the Class, as aforesaid.
38. Plaintiff has no adequate remedy at law.
WHEREFORE, plaintiff demands judgment as follows:
(a) Declaring that this action may be maintained as a class
action pursuant to CPLR 901 et seq.;
(b) Declaring that defendants' conduct is unfair, unjust and
inequitable to plaintiff and the other members of the Class;
(c) Enjoining preliminarily and permanently the defendants
from taking any steps necessary to accomplish or implement the proposed sale
of defendant Loral to defendant Lockheed at a price that is not fair and
equitable.
(d) Imposing a voting trust upon the shares of Loral owned or
controlled by defendants to restrain their ability to use their voting power
in connection with the Transaction;
(e) Requiring defendants to compensate plaintiff and the
members of the Class for all losses and damages suffered and to be suffered by
them as a result of the acts and transactions complained of herein, together
with prejudgment interest from the date of the wrongs to the date of the
judgment herein;
<PAGE>13
(d) Awarding plaintiff the costs and disbursements of this
action, including reasonable attorneys', accountants', and experts' fees; and
(E) Granting such other and further relief as may be just and
proper.
Dated: New York, New York
January 9, 1996
WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP
Fred Taylor Isquith
270 Madison Avenue
New York, New York 10016
(212) 545-4600
Attorneys for Plaintiff
<PAGE>1
KEVIN J. YOURMAN (147159)
JAMES E. TULLMAN (175008)
WEISS & YOURMAN
10940 Wilshire Blvd.
24th Floor
Los Angeles, CA 90024
(310) 208-2800
Attorneys for Plaintiffs
(Additional Counsel Appear on Signature Page)
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF LOS ANGELES
ARTHUR GOLTZ and MURRAY ZUCKER, on ) Case No.
behalf of themselves and all )
others similarly situated, ) CLASS ACTION
)
Plaintiffs, ) CLASS ACTION COMPLAINT FOR
) BREACH OF FIDUCIARY DUTIES
vs. )
) Plaintiffs Demand
LORAL CORPORATION, BERNARD L. ) Trial By Jury
SCHWARTZ, FRANK C. LANZA, HOWARD )
GITTIS, ROBERT B. HODES, GERSHON )
KEKST, CHARLES LAZARUS, MALVIN A. )
RUDERMAN, E. DONALD SHAPIRO, ALLEN )
M. SHINN, THOMAS J. STANTON, JR., )
DANIEL YANKELOVICH, MICHAEL P. )
DEBLASIO, ROBERT V. LAPENTA, )
MICHAEL B. TARGOFF, )
)
Defendants )
__________________________________
Plaintiffs, by their attorneys, allege upon information and belief,
except as to the allegations which are alleged upon personal knowledge, as
follows:
NATURE OF THE ACTION
1. This is a class action lawsuit on behalf of the stockholders of
Loral Corporation ("Loral" or the "Company") who have been, and continue to
be, deprived of the opportunity to
<PAGE>2
fully realize the benefits of their investment in Loral as a result of
defendants' insincere attempt to put the Company up for auction or consider
offers by other companies to acquire the Company. Defendants' conduct
constitutes breach of defendants' fiduciary duties to maximize shareholder
value and an unlawful scheme and attempt by defendants to entrench themselves
in positions of control at the expense of the Company's shareholders.
PARTIES
2. Plaintiff Murray Zucker is the owner of shares of Loral common stock
and has been the owner of such shares during the relevant time period.
3. Plaintiff Arthur Goltz is the owner of shares of Loral common stock
and has been the owner of such shares during the relevant time period.
4. Defendant Loral is a leading supplier of electronic surveillance
systems, electronic warfare systems, military equipment, microwave components,
telecommunications equipment, electronic components, aircraft navigation
systems, aircraft simulators and services to the U.S. and allied defense
departments. Loral has a work-force of 39,000 employees and an estimated
revenue of 6.4 billion in 1995. Two of Loral's major offices and facilities
are in California, including one in Rancho Santa Margarita, employing 1,100
people and one in Camarillo, California which employs 75 people. Loral
maintains its corporate headquarters at 600 Third Avenue, New York, New York,
<PAGE>3
10016. Loral stock trades over the New York Stock Exchange under ticker
symbol ("LOR").
5. Defendant Bernard L. Schwartz ("Schwartz") is and was at all
relevant times the Chief Executive Officer and Chairman of the Board of Loral.
Schwartz is the beneficial owner of $3.7 million shares of Loral common stock
and has served as a director since 1972. Schwartz will receive an $18 million
dollar bonus for his efforts when the buy-out with Lockheed is consummated.
6. Defendant Frank C. Lanza ("Lanza") is and was at all relevant times
the President and Chief Operating Officer of Loral and has served as a
director since 1981.
7. Defendants Howard Gittis, Robert B. Hodes, Gershon Kekst, Charles
Lazarus, Malvin A. Ruderman, E. Donald Shapiro, Allen M. Shinn, Thomas J.
Stanton, Jr., and Daniel Yankelovich were at all relevant times directors of
Loral and owed fiduciary duties of care, loyalty and candor to Loral's public
shareholders.
8. Defendants Michael P. Deblasio, Robert V. LaPenta and Michael B.
Targoff were at all relevant times officers of Loral and owed fiduciary duties
of care, loyalty and candor to Loral's public shareholders.
9. By reason of their corporate positions and because of their ability
to control the business and internal affairs of Loral, the officer and
director defendants (collectively referred to herein as the "Individual
Defendants") owe Loral shareholders, including plaintiffs and all others
similarly situated, fiduciary
<PAGE>4
obligations of fidelity, trust, loyalty and due care. Accordingly, said
defendants were, and are, required to use their utmost ability to control and
manage the Company in furtherance of the best interests of the Company's
stockholders. In addition, each of the officer and director defendants owes
Loral shareholders the fiduciary duty to exercise due care and diligence, as
well as the highest obligations of good faith and fair dealing. Furthermore,
each of the officer and director defendants owes to the Company and its
stockholders the fiduciary duty to assure that all reasonable offers or
overtures to purchase the Company are conveyed to the full board of directors,
to entertain, encourage, evaluate and pursue any bona fide offers or
expressions of interest to purchase the Company's outstanding stock or other
merger transactions in a manner that will maximize shareholder value.
10. Each defendant herein is sued individually as a conspirator and
aider and abettor, as well as in his/her capacity as an officer and/or
director of the Company, and the liability of each arises from the fact that
he or she has engaged in all or part of the unlawful acts, plans, schemes, or
transactions complained of herein.
CLASS ACTION ALLEGATIONS
11. This action seeks to enjoin the breach of fiduciary duties owed to
Plaintiffs and the Class by Loral and the Individual Defendants in connection
with the prospective merger, acquisition, or other business combination
involving Loral.
<PAGE>5
Plaintiffs also seek appropriate relief to ensure that a merger, acquisition,
or other business combination or alternative transaction is not foreclosed by
Loral and the Individual Defendants, that the Individual Defendants properly
inform themselves with respect to all such transactions, and that the
Individual Defendants take all necessary and appropriate action to ensure that
plaintiffs and the Class receive the maximum value for their Loral securities
in any sale or liquidation of the Company.
12. Plaintiffs bring this case on their own behalf and as a class
action, pursuant to applicable rules of the California Rules of Civil
Procedure, on behalf of all stockholders of the Company, or their successors
in interest, who are similarly situated and who are or may be deprived of the
opportunity to maximize the value of their Loral securities by the wrongful
acts of the defendants described herein (the "Class"). Excluded from the
Class are defendants herein and any person, firm, trust, corporation, or other
entity related to or affiliated with any of the defendants.
13. This action is properly maintained as a class action.
14. The class is so numerous that joinder of all members is
impracticable. The Company has over 4500 stockholders of record and has over
172 million shares outstanding as of October 31, 1995.
15. Questions of law and fact common to the class predominated over
questions affecting any individual class member. The common questions
include, inter alia, whether:
<PAGE>6
a. defendants have breached the fiduciary duties owed by them to
plaintiffs and other members of the Class by failing and refusing to attempt
in good faith to maximize shareholder value in connection with the sale of
Loral;
b. the individual defendants have acted to entrench themselves in
their office and deprive Loral public shareholders of the maximum value of
their holdings;
c. defendants have breached or aided and abetted the breach of the
fiduciary duties owed by them to plaintiffs and other members of the Class;
d. defendants engaged in a plan and scheme to thwart interested
companies from participating in bidding on Loral; and
e. plaintiffs and the other members of the Class are being and
will continue to be injured by the wrongful conduct alleged herein, and, if
so, the proper remedy and/or measure of damages.
16. Plaintiffs are committed to prosecuting this action and have
retained competent counsel experienced in litigation of this nature.
Plaintiffs' claims are typical of the claims of the other members of the
Class, and plaintiffs have the same interests as the other members of the
Class.
17. The class action is superior to any other method available for the
fair and efficient adjudication of this controversy since it would be
impractical and undesirable for each of the members of the Class who has
suffered or will suffer
<PAGE>7
damages to bring separate actions in various parts of the country.
SUBSTANTIVE ALLEGATIONS
18. On January 8, 1996, the Loral Board of Directors announced that
Lockheed Martin ("Lockheed") agreed to acquire a majority of Loral's assets.
Lockheed will pay $7 billion in cash or $38.00 for each Loral share through a
tender offer due to begin January 12, 1996. It will also assume $2.1 billion
in debt. Lockheed will consume Loral's core defense electronics and systems
integration businesses. The remaining satellite and telecommunications
business will be reorganized into a new company called Loral Space and
Communications Corp., in which Lockheed is also buying a 20% stake for $344
million. Loral shareholders will get $38.00 a share plus one share in Loral
Space for every share of Loral, equalling a total of $45.50 for each share
owned.
19. The members of the Loral Board of Directors possessed conflicts of
interest which should have prevented them from voting on the buy-out. Two of
the members on the Board discussed employment terms with Lockheed Martin and
will enjoy positions in Lockheed Martin after the merger. Nevertheless, the
Board determined that it was not necessary to appoint a committee of
independent directors or an unaffiliated representative to act on behalf of
the shareholders of the Company for the purposes of negotiating the terms of
the Merger Agreement.
<PAGE>8
20. The scheme of Schwartz and Lanza to entrench themselves in positions
of power and prestige was accomplished. According to a January 9, 1996 report
in the Los Angeles Times: "Both men will remain with Lockheed after the
merger. Schwartz will be a vice chairman of Lockheed Martin and Lanza will be
an executive vice president of the corporation and chief operating officer of
its new tactical systems unit."
21. Furthermore, a January 9, 1996 New York Times article reported:
"One clear benefit of the acquisition is that it will produce a fortune for
Mr. Schwartz, who earned $6.24 million in compensation last year. He owns
stock that is now worth about $160 million."
22. Finally, Bloomberg News reported that: as holder of 2% of Loral
stock, Schwartz stands to make almost $70 million from this merger.
23. On Thursday, January 11, 1996, Loral set a 10 day window for any
potential rival offer to the buy-out deal with Lockheed. Such an attempt to
attract outside bidders is facile and does not adequately fulfill defendants'
fiduciary duties to shareholders in light of the fact that talks with Lockheed
Martin had been conducted for over 4 months. No doubt exists that defendants'
10-day window for potential offers was merely a vacuous attempt to convince
Loral shareholders that defendants were acting in the shareholders' best
interests. Thus, any company which was actually interested in making an offer
for
<PAGE>9
Loral would need much more time than 10 days to adequately investigate and
analyze the company.
24. Furthermore, Loral announced that its stockholder rights plan, which
spells out investor rights during a takeover, will take effect on January 22,
1996. The plan contains a "poison pill" defense against hostile takeover.
25. The Poison Pill, a typical anti-takeover provision, would allow
Loral stockholders to buy stock at a 50 percent discount if another company
tries to acquire at least 20 percent of Loral. The maneuver would dilute the
holdings of the Company attempting the takeover, making the buy-out too
expensive.
26. Loral said it has amended the stockholders' rights plan to exempt
Lockheed Martin, thus disabling the right of shareholders to effectively
object to the Lockheed Martin buy-out.
27. Furthermore, the Poison Pill has the effect of precluding the
successful completion of any other offer for Loral, no matter how attractive
because, under the Poison Pill, the Loral Board of Directors must approve any
offer. Thus, the Poison Pill enacted by defendants in effect eliminated the
likelihood of any bona fide offer to purchase the Company for adequate
consideration, thereby denying the Company's shareholders an opportunity to
make their own choice as to the fate of the Company that they own.
28. The Poison Pill is just one of the many tactics that the defendants
have used to maintain control of the Company, and
<PAGE>10
to deny shareholders the opportunity to maximize returns by making informed
investment decisions.
29. Moreover, the agreement between Loral and Lockheed Martin provides,
among other things, that in the event that Loral terminates the agreement, it
would be required to pay Lockheed Martin a fee (or penalty) of $175 million
dollars and as much as $45 million in additional expenses. Thus, in order for
another company to effectively bid for Loral, it would have to pay a price of
$220 million above the value of the Company, effectively ruling out any
serious chance for a fair and free auction for Loral.
30. On January 12, 1996 The Orlando Sentinel reported that: "Loral's
action Thursday came in the wake of speculation that another aerospace giant -
McDonnell Douglas Corp. of St. Louis - may be considering a counter-offer for
Loral."
31. By failing to entertain a meaningful public auction of Loral as well
as thwarting outside buyers' ability to bid on Loral, the defendants were
acting to the detriment of the best interests of the Company's public
shareholders.
CAUSE OF ACTION AGAINST DEFENDANTS
32. By the acts, transactions and courses of conduct alleged herein,
defendants, individually and as part of a common plan and scheme or in breach
of their fiduciary duties to plaintiffs and the other members of the Class,
are attempting unfairly to deprive plaintiffs and other members of the Class
of the true value of their investment in Loral.
<PAGE>11
33. Defendants owe fundamental fiduciary obligations to the Company's
shareholders to take all necessary and appropriate steps to maximize the value
of their shares, including considering, encouraging and accepting outside bids
that would maximize the value of the stock owners' holdings in Loral. In
addition, the Individual Defendants have the responsibility to act
independently so that the interests of Loral's public stockholders will be
protected. Defendants are obliged to seriously consider any bona fide offers
for the Company and to conduct fair and active bidding procedures or other
mechanisms for checking the market to assure that the highest price is
achieved. Furthermore, the Individual Defendants must adequately ensure that
no conflict of interest exists between their own interests and their fiduciary
obligations to maximize shareholder value or, if such conflicts exist, to
ensure that all such conflicts will be resolved in the best interests of the
Company's public stockholders.
34. By failing to entertain a meaningful public auction of Loral, as
well as thwarting outside companies' ability to bid on Loral, the Individual
Defendants are acting to entrench themselves in their offices and positions
and maintain their substantial salaries and perquisites, all at the expense
and to the detriment of the best interests of the Company's public
shareholders.
35. By the acts, transactions and courses of conduct alleged herein, the
Individual Defendants, individually and as
<PAGE>12
part of a common plan and scheme in breach of their fiduciary duties and
obligations, are attempting to unfairly deprive plaintiffs and the other
members of the Class of the premiums they could realize in an acquisition
transaction and to ensure continuance of their positions as directors and
officers. The Individual Defendants have been engaged in a wrongful effort to
entrench themselves in their offices and positions of control and prevent the
acquisition of Loral except on terms which would further their own personal
interests.
36. By virtue of the acts and conduct alleged herein, the Individual
Defendants, who control the actions of the Company, have carried out a
preconceived plan and scheme to place their own personal interests ahead of
the interests of the shareholders of Loral and, thereby, entrench themselves
in their jobs and emoluments of office within the Company.
37. The Individual Defendants have breached their fiduciary and other
common law duties owed to plaintiffs and other members of the Class in that
they have not and are not exercising independent business judgment and have
acted and are acting to the detriment of the Class in order to benefit
themselves and Loral's senior management.
38. As a result of defendants' actions, plaintiffs and the other members
of the Class have been and will be damaged in that they have not and will not
receive their fair proportion of the value of Loral's assets and businesses
and/or have been and will
<PAGE>13
be prevented from obtaining a fair and adequate price for their shares of
Loral's common stock.
39. Plaintiffs seek preliminary and permanent injunctive relief and
declaratory relief preventing defendants from inequitably and unlawfully
depriving plaintiffs and the Class of their rights to realize a full and fair
value for their stock at a substantial premium over the market price and to
compel defendants to carry out their fiduciary duties to maximize shareholder
value in selling Loral.
40. Only through the exercise of this Court's equitable powers can
plaintiffs be fully protected from the immediate and irreparable injury which
the defendants' action threaten to inflict.
41. Unless enjoined by the Court, defendants will continue to breach
their fiduciary duties owed to plaintiffs and the members of the Class, and/or
aid and abet and participate in such breaches of duty, and will prevent the
sale of Loral at a substantial premium, all to the irreparable harm of
plaintiffs and the other members of the Class.
42. Plaintiffs and the Class have no adequate remedy at law.
WHEREFORE, plaintiffs demand judgment as follows:
(a) Declaring this to be a proper class action and certifying
plaintiffs as class representatives;
<PAGE>14
(b) Ordering the Individual Defendants to carry out their fiduciary
duties to plaintiffs and the other members of the Class by announcing their
intention to:
(i) cooperate fully with any entity or person, having a bona
fide interest in proposing any transaction that would maximize shareholder
value, including but not limited to, a buy-out or takeover of the Company;
(ii) immediately undertake an appropriate evaluation of
Loral's worth as a merger/acquisition candidate;
(iii) take all appropriate steps to enhance Loral's value and
attractiveness as a merger/acquisition candidate;
(iv) take all appropriate steps to effectively expose Loral
to the marketplace in an effort to create an active auction of the Company;
(v) act independently so that the interests of the Company's
public shareholders will be protected; and
(vi) adequately ensure that no conflicts of interest exist
between the Individual Defendants' own interest and their fiduciary obligation
to maximize shareholder value or, in the event such conflicts exist, to ensure
that all conflicts of interest are resolved in the best interests of the
public shareholders of Loral;
(c) Enjoining the use of the Poison Pill and imposition of the $175
million penalty fee;
<PAGE>15
(d) Enjoining the complained of transaction or any related
transaction;
(e) Appointing an independent committee of unaffiliated directors
to consider the Lockheed Martin proposal or other possible business
combinations or alternative transactions;
(f) Ordering the Individual Defendants jointly and severally to
account to plaintiffs and the Class for all damages suffered and to be
suffered by them as a result of the acts and transaction alleged herein;
(g) Declaring that Loral aided and abetted and substantially
participated in the individual defendants' breach of fiduciary duties;
(h) Awarding plaintiffs the cost and disbursements of this action,
including a reasonable allowance for plaintiffs' attorneys' and experts' fees;
and
(i) Granting such other and further relief as may be just and
proper.
<PAGE>16
JURY DEMAND
Plaintiffs demand a trial by jury of all issues so triable.
Dated: January 21, 1996
KEVIN J. YOURMAN (147159)
JAMES E. TULLMAN (175008)
WEISS & YOURMAN
/s/ Kevin J. Yourman
Kevin J. Yourman
10940 Wilshire Blvd.
24th Floor
Los Angeles, CA 90024
(310) 208-2800
EDWARD P. DIETRICH
MICHAEL D. BRAUN
STULL STULL & BRODY
10940 Wilshire Blvd.
23rd Floor
Los Angeles, CA 90024
(310) 209-2468
Counsel for Plaintiffs
62630222
<PAGE>1
82 Devonshire Street
Boston, Massachusetts 02109
FIDELITY MANAGEMENT TRUST COMPANY
NOTICE TO PARTICIPANTS
IN THE FOLLOWING PLANS
The Conic Corporation Deferred Income Retirement Plan, The
Frequency Sources, Inc. 401(k) Retirement Savings Plan, The K&F
Industries Savings Plan, The Loral/Rolm Mil-Spec Corp. Retirement
Income Savings Plan, The Loral Aerospace Savings Plan, The Loral
Corporation Deferred Income Savings Plan, The Loral Defense Systems
Retirement Savings Plan, The Loral Defense Systems Savings and
Investment Plan, The Loral Electro-Optical Systems, Inc. 401(k)
Matching Contribution Plan, The Loral Fairchild Corp. Savings Plan,
The Loral Federal Systems Deferred Income Retirement Plan, The
Loral Infrared & Imaging Systems, Inc. Savings Plan, The Loral
Librascope Retirement Savings Plan, The Loral Vought Systems
Corporation Capitol Accumulation Plan, The Narda Microwave
Supplemental Retirement Savings Plan, and The Narda-Western
Operations 401(k) Deferred Income Retirement Plan
(THE "PLANS")
Dear Plan Participant:
Enclosed are tender offer materials and a Trustee Direction
Form relating to an offer by LAC Acquisition Corporation (the
"Purchaser"), a wholly owned subsidiary of Lockheed Martin
Corporation, to purchase all outstanding shares of Common Stock,
par value $.25 per share ("Shares"), of Loral Corporation (the
"Company") at $38.00 per share, net to the seller in cash, without
interest (the "Offer"). The tender offer materials comprised of
the Purchaser's Offer to Purchase, the Letter of Transmittal and
the Company's Recommendation Statement, which have been furnished
to you, together describe the terms and conditions of the Offer as
well as the facts and circumstances surrounding the Offer. SUCH
MATERIALS CONTAIN IMPORTANT INFORMATION THAT YOU NEED TO READ IN
THEIR ENTIRETY PRIOR TO MAKING ANY DECISION REGARDING THE OFFER.
In a related transaction, following the consummation of the
Offer, the Company will distribute (the "Spin-Off") common stock of
Loral Space & Communications Ltd. to the holders of Shares on a
record date to be determined by the Board of Directors of the
Company. In no event shall the record date occur after acceptance
of tendered Shares for payment by the Purchaser. Even if you elect
to tender your Shares, you will be considered the holder for
purposes of the Spin-Off until the Purchaser accepts these Shares
for payment. The Company expects to distribute to shareholders an
information statement with respect to the business, operations and
management of this new corporation. A copy of the information
statement will be sent to you at that time.
<PAGE>2
Background
Fidelity Management Trust Company ("Fidelity") is the trustee
of seven trusts (the "Trusts") established under the Plans. Under
the terms of the trust agreements between the Company and Fidelity
establishing the Trusts, in the case of a tender offer for any
Shares, each participant whose Plan account has an interest in
Loral Common Stock under the Trusts has the right to direct the
trustee to tender or not tender some or all of the Shares credited
to such participant's Plan account invested in Loral Common Stock
under the Trusts.
The Trusts now hold approximately seven and one tenth percent
(7.1%) of all the Company's outstanding Shares. The trust
agreements require Fidelity to tender the Shares held in the Trusts
in accordance with directions received from participants with an
interest in Loral Common Stock under the Trusts, and have been or
will be amended to require that, with respect to Shares for which
no instructions are received, Fidelity tender in accordance with
directions received from an independent fiduciary to be appointed
by the Company.
Direction to the Trustee
Only the Trustee can tender the Shares held by the Trusts.
However, participants whose Plan accounts are credited with Shares
held in Loral Common Stock under the Trusts have the opportunity to
direct Fidelity to tender such Shares pursuant to the Offer.
PLEASE NOTE THAT UNDER THE TERMS OF THE TRUSTS, FIDELITY IS
REQUIRED TO HOLD YOUR INSTRUCTIONS IN CONFIDENCE AND IS NOT
PERMITTED TO DISCLOSE THE CONTENTS OF YOUR DIRECTIONS TO THE
COMPANY, THE PURCHASER OR ANY EMPLOYEE OR OFFICER THEREOF.
Instructions
In order to be assured that your tender instructions to
Fidelity will be followed, you must, in accordance with the
procedures set forth below, complete, sign, date and return the
enclosed Direction Form to Fidelity as soon as possible, BUT IN NO
EVENT LATER THAT 12:00 MIDNIGHT, NEW YORK TIME, ON MONDAY, FEBRUARY
5, 1996, UNLESS THE OFFER IS EXTENDED. PLEASE COMPLETE AND RETURN
THE DIRECTION FORM EVEN IF YOU DECIDE NOT TO PARTICIPATE IN THE
OFFER.
<PAGE>3
You may change, amend or rescind your directions to Fidelity
at any time prior to the deadline specified in the preceding
paragraph by delivering to Fidelity a new Direction Form. Upon
receipt of a timely change, amendment or rescission of a previously
delivered Direction Form, any previous instructions will be deemed
canceled. Additional Direction Forms and transmittal envelopes can
be obtained by telephoning the Loral Savings Plan Service Center at
1-800-354-7125. No facsimile transmittals of the Direction Form
will be accepted.
PLEASE NOTE THAT THE LETTER OF TRANSMITTAL HAS BEEN PROVIDED
FOR YOUR INFORMATION ONLY, AND CAN NOT BE USED TO TENDER THE SHARES
CREDITED TO YOUR ACCOUNT.
Please note that on the reverse side of the Direction Form the
number of Shares credited to your account (based on your holdings
as of Tuesday, January 9, 1996) is indicated to the right of your
address. This number of Shares may fluctuate somewhat from January
9, 1996 until February 2, 1996, the date the Trustee will begin the
process of tabulating directions, unless the Offer is extended, due
to additional employee and employer contributions. Because of this
fluctuation, the instructions on the Direction Form refer to the
percentage of Shares allocated to your account on February 2, 1996,
unless the Offer is extended.
IF YOUR DIRECTION FORM IS NOT TIMELY RECEIVED BY FIDELITY AT
ITS ADDRESS SET FORTH ON THE DIRECTION FORM, THE DECISION TO TENDER
OR NOT TO TENDER THE SHARES CREDITED TO YOUR ACCOUNT WILL BE MADE
BY AN INDEPENDENT FIDUCIARY TO BE APPOINTED BY THE COMPANY.
YOUR DIRECTION FORM MUST BE RECEIVED BY FIDELITY AT ITS
ADDRESS SET FORTH ON THE DIRECTION FORM BY 12:00 MIDNIGHT, NEW YORK
TIME, ON MONDAY, FEBRUARY 5, 1996, UNLESS THE OFFER IS EXTENDED.
BE SURE TO REVIEW ALL OF THE TENDER OFFER MATERIALS BEFORE YOU
COMPLETE YOUR DIRECTION FORM. FIDELITY MAKES NO RECOMMENDATION
WITH RESPECT TO YOUR DECISION REGARDING THE OFFER. PLEASE REMEMBER
TO RETURN YOUR DIRECTION FORM DIRECTLY TO FIDELITY IN THE ENCLOSED
ENVELOPE, RATHER THAN TO THE COMPANY OR TO THE PURCHASER.
If you hold Shares directly, you will receive, under separate
cover, tender offer materials directly from the Purchaser, which
can be used to tender such Shares directly to the Purchaser. Those
tender offer materials may not be used to direct the Trustee to
tender or not tender the Shares credited to your account under the
Plans. The direction to tender or not tender Shares credited to
your account under the Plans may be made only in accordance with
the procedure set forth herein.
<PAGE>4
In accordance with the provisions of the Trusts, the proceeds
from the sale of Shares in your account will not be distributed to
you. Cash proceeds will be invested in the investment option
designated for such purposes in the trust agreements (either a pool
of guaranteed investment contracts or a money market fund). Shares
of Loral Space & Communications Corporation received in connection
with the Spin-Off will be retained in the Plan in a unitized stock
fund, and your account will be credited with a proportional number
of units in that fund. You may change the investment option in
which such proceeds are invested by telephoning the Loral Savings
Plan Center at 1-800-354-7125 in accordance with the normal
procedures for changing investment options.
If you require additional information concerning the procedure
to tender your Shares, please contact the Loral Savings Plan
Service Center at 1-800-354-7125. If you have any questions about
the terms and conditions of the Offer, please contact the
manager/dealer for the Offer, Bear Stearns, at 1-800-7216-9849.
DIRECTION FORM
BEFORE COMPLETING THIS FORM, READ CAREFULLY THE ACCOMPANYING OFFER TO
PURCHASE AND ALL OTHER ENCLOSED MATERIALS
In connection with the Offer to Purchase dated January 12, 1996, (the
"Offer"), made by LAC Acquisition Corporation, a Wholly Owned Subsidiary of
Lockheed Martin Corporation, a copy of which I have received, I hereby
instruct Fidelity Management Trust Company (the "Trustee") to tender the
shares of Loral Corporation Common Stock held in my account in the Plan
before the expiration of the Offer, as follows (check one box and
complete):
Box 1 ( ) I direct the Trustee to tender ALL of the shares of Loral
Corporation held in my account in the Plan, in accordance
with the terms of the Offer.
Box 2 ( ) I direct the Trustee to tender percent (insert a
percentage less than 100%) of the shares of Loral
Corporation held in my account in the Plan, in accordance
with the terms of the Offer, and not to tender the remainder
of such shares.
Box 3 ( ) I direct the Trustee NOT to tender any of the shares of
Loral Corporation held in my account in the Plan, in
accordance with the terms of the Offer.
<PAGE>5
The Trustee makes no recommendation to any Plan participant as to whether
to tender or not. Your instructions to the Trustee will be kept
confidential, and will not be disclosed to anyone at Loral Corporation or
Lockheed Martin Corporation.
PLEASE NOTE THAT IF YOU DO NOT SEND IN YOUR FORM, OR IF IT IS NOT RECEIVED
BEFORE 12:00 MIDNIGHT NEW YORK TIME ON FEBRUARY 5, 1996, THE DECISION TO
TENDER YOUR SHARES OR NOT TO TENDER YOUR SHARES WILL BE MADE BY AN
INDEPENDENT FIDUCIARY APPOINTED BY LORAL CORPORATION.
YOUR FORM MUST BE RECEIVED BEFORE 12:00 MIDNIGHT NEW YORK TIME AT P.O. BOX
9124, HINGHAM, MA 02043 ON FEBRUARY 5, 1996 IN ORDER TO BE EFFECTIVE.
Date
Please print name
Signature
