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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule 13D
Under the Securities Exchange Act of 1934
(Amendment No. ________)*
Orion Network Systems, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
68628K 10 4
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(CUSIP Number)
Scott M. Desmond, Esq.
Dorsey & Whitney LLP
250 Park Avenue
New York, New York 10177
(212) 415-9200
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 31, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [_]
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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Page 2 of 8 pages
SCHEDULE 13D
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CUSIP No. 68628K 10 4
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Trans-Atlantic Satellite, Inc., I.R.S. Identification No. 52-1765110
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS
N/A
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(D) OR 2(E) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. SOLE VOTING POWER
NUMBER OF 802,514 shares of Common Stock
SHARES
BENEFICIALLY 8. SHARED VOTING POWER
OWNED BY 0 shares of Common Stock
EACH
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON 802,514 shares of Common Stock
WITH
10. SHARED DISPOSITIVE POWER
0 shares of Common Stock
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
802,514 shares of Common Stock
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.8%
14. TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTION BEFORE FILLING OUT!
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Item 1. Security and Issuer
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The securities to which this Schedule 13D relates are shares of Common
Stock, $.01 par value per share (the "Common Stock"), of Orion Network Systems,
Inc., a corporation organized under the laws of the State of Delaware (the
"Issuer"). The address of the Issuer's principal executive offices is 2440
Research Boulevard, Suite 400, Rockville, Maryland 20850.
Item 2. Identity and Background
-----------------------
(a-c) This statement is being filed on behalf of Trans-Atlantic
Satellite, Inc., a corporation organized under the laws of the State of Delaware
(the "Reporting Person"). The Reporting Person is a directly and indirectly
wholly-owned subsidiary of Nisso Iwai Corporation, a Japanese corporation, and
was organized in September, 1990, for the sole purposes of investing as a
limited partner in International Private Satellite Partners, L.P. ("Orion
Atlantic") and other related transactions with Orion Atlantic. The Reporting
Person does not engage in any other business. The Reporting Person's principal
place of business and principal office is located at 1211 Avenue of the
Americas, 41st Floor, New York, New York 10036. Attached as Appendix A is
information concerning (i) the executive officers and directors of the Reporting
Person and of the person ultimately in control of the Reporting Person and (ii)
each person controlling the Reporting Person, as is required to be disclosed in
response to Item 2 and General Instruction C to Schedule 13D.
(d-e) During the last five years, neither the Reporting Person nor any
of the persons referred to in Appendix A has been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (ii) a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in such Reporting Person being subject to a judgment,
decree or final order enjoining future violation of, or prohibiting or mandating
activities subject to, federal or state securities laws or a finding of any
violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
-------------------------------------------------
Not applicable. The transaction giving rise to the filing of this
Statement did not involve the purchase of Common Stock by the Reporting Person.
Item 4. Purpose of the Transaction
--------------------------
The Issuer was formed pursuant to a merger under a certain Agreement and
Plan of Merger (the "Merger Agreement") by and between Orion Network Systems,
Inc. ("Old ONS"), a Delaware corporation (formed in 1982 to pursue authorization
from the U.S. Federal Communications Commission to operate a transatlantic
communications satellite system) and the Issuer, a newly formed wholly owned
subsidiary of ONS. Upon the effectiveness of the merger, the Issuer changed its
name to Orion Network Systems, Inc. The description herein of the Merger
Agreement is qualified in its entirety by the complete text of Exhibit 1. In
1991, Old ONS and seven limited
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partners, including the Reporting Person, formed Orion Atlantic, of which a
wholly owned subsidiary of ONS was General Partner, to construct, launch, own
and operate Orion 1, a high power Ku-band satellite, which commenced operations
in January 1995. The limited partners, including the Reporting Person, invested
$90 million in Orion Atlantic and provided credit support for the Orion 1 credit
facility (the "Orion 1 Credit Facility"). On January 31, 1997, the Issuer
completed its offering, (the "Bonds Offering") pursuant to a Registration
Statement on Form S-1, of (i) 445,000 Senior Note Units, each consisting of one
11-1/4% Senior Note due 2007 and one Warrant to purchase .8463 shares of Common
Stock, and (ii) 484,000 Senior Discount Note Units, each consisting of one
12-1/2% Senior Discount Note due 2007 and one Warrant to purchase .6628 shares
of Common Stock, and repaid in full the Orion 1 Credit Facility using in part
the proceeds of the Bonds Offering.
The Issuer entered into the Section 351 Exchange Agreement and Plan of
Conversion (Exhibit 2), as amended by the First Amendment (Exhibit 3) (as
amended, the "Exchange Agreement"), with all of the limited partners, including
the Reporting Person, of Orion Atlantic (the "Limited Partners"), pursuant to
which, and effective upon completion of the Bonds Offering, the Merger and the
other conditions provided in the Exchange Agreement the Issuer became 100% owner
of Orion Atlantic and obtained the cancellation of approximately $37.5 million
of obligations of Orion Atlantic to the Limited Partners in return for the
issuance to the Limited Partners of Series C 6% Cumulative Redeemable
Convertible Preferred Stock, $.01 par value of the Issuer (the "Preferred
Stock"), and the release of certain credit support obligations of the Limited
Partners. Pursuant to and subject to the terms and conditions of the Exchange
Agreement, the Reporting Person and all other Limited Partners have entered into
an Agreement Regarding Transfer Restrictions (Exhibit E to the Exchange
Agreement), whereby (i) there are restrictions on transfer of the shares of
Common Stock issuable upon conversion of the Preferred Stock for a period of 180
days after issuance of the Preferred Stock, and (ii) during any 90 day period,
with certain exceptions, the Reporting Person and each of the Limited Partners
may not transfer shares of Common Stock issuable upon conversion of Preferred
Stock in excess of 25% of the aggregate number of shares of Common Stock
issuable upon conversion of the Preferred Stock to the Reporting Person or each
of the Limited Partners pursuant to the Exchange Agreement. The description
herein of the Exchange Agreement is qualified in its entirety by the complete
text of Exhibits 2 and 3.
The Preferred Stock (i) is convertible as of the date of issuance in Common
Stock; (ii) pays dividend (subject to the preferential rights of holders of
Series A Preferred Stock of the Issuer and Series B Preferred Stock of the
Issuer) at the rate of 6% per annum, payable exclusively (except in the event of
liquidation) in Common Stock (dividends accrue on a daily basis commencing on
the date of issuance of each share of Preferred Stock at the simple interest
rate of 6% per annum, and the number of shares of Common Stock distributable in
a dividend on each share of Preferred Stock is calculated based on the market
price of such stock; all preferred stock issued after January 31 is required to
be subordinated to the Preferred Stock); (iii) has liquidation rights (subject
to the liquidation rights of holders of Series A Preferred Stock of the Issuer
and Series B Preferred Stock of the Issuer) before any distribution or payment
to holders of Common Stock or any other series of stock of the Issuer ranking
junior to the Preferred Stock an amount in cash equal to the greater or (a)
$1,000 per share (plus an amount equal to all accrued but unpaid dividends) of
all shares of Preferred Stock held by such holder,
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or (b) the amount which would be distributed with respect to the shares of
Common Stock into which such shares of Preferred Stock are convertible (assuming
conversion of all outstanding Preferred Stock) immediately prior to the record
date for such distribution on an as-converted basis; (iv) has voting rights on
all matters submitted to the stockholders for a vote together with the holders
of Common Stock and the holders of Series A Preferred Stock of the Issuer and
Series B Preferred Stock of the Issuer, voting together as a single class, on an
as-converted basis; (v) is redeemable (a) in the year 2022, or (b) at any time
after the second anniversary of the date of the issuance of the Preferred Stock
under the Exchange Agreement, or (c) if prior to such date, immediately prior to
the consummation of any consolidation, merger or sale in which the successor
entity or purchasing entity is other than the Issuer, by the Issuer at its
option and to the extent it has funds legally sufficient therefor and is
permitted to do so, may redeem the Preferred Stock then outstanding, in whole or
in part, for an aggregate redemption price of $1,000 per share (plus accrued and
unpaid dividends thereon); (vi) provides holders of Preferred Stock the right at
any time to convert all or a portion of their shares of Preferred Stock into
shares of Common Stock at a rate specified in the Certificate of Designations of
the Preferred Stock (Exhibit 4); and (vii) may, in certain circumstances, be
mandatorily converted by the Issuer into shares of Common Stock at a conversion
rate to be determined in accordance with the provisions of the Certificate of
Designations. The description herein of the terms of the Preferred Stock is
qualified in its entirety by the complete text of Exhibit 4.
The Limited Partners, including the Reporting Person, and the Issuer have
entered into a Registration Rights Agreement with the Issuer (Exhibit D to the
Exchange Agreement), granting shelf registration rights, demand registration
rights and piggy-back registration rights to the Limited Partners holding
Preferred Stock. The description herein of the Registration Rights Agreement is
qualified in its entirety by the complete text of Exhibit D.
Except as described in this Item 4 and elsewhere in this Schedule 13D,
neither the Reporting Person nor any of the persons named in Appendix A to Item
2 of this Schedule 13D owns any warrants, rights or options to purchase Common
Stock.
Except as described in this Item 4 and elsewhere in this Schedule 13D,
neither the Reporting Person nor any of the persons named on Appendix A to Item
2 of this Schedule 13D has any plans or proposals (in its or his capacity as a
stockholder or a principal of a stockholder of the Issuer) which relate to or
would result in: (a) the acquisition by any person of additional securities of
the Issuer, or the disposition of securities of the Issuer; (b) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a
material amount of assets of the Issuer or any of its subsidiaries; (d) any
change in the present Board of Directors or management of the Issuer, including
any plans or proposals to change the number or term of directors or to fill any
existing vacancies on the Board of Directors; (e) any material change in the
present capitalization or dividend policy of the Issuer; (f) any other material
change in the Issuer's business or corporate structure; (g) changes in the
Issuer's charter, by-laws or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Issuer by any person; (h)
causing a class of securities exchange or cease to be authorized to be quoted in
an interdealer quotation system of a registered national securities association;
(i) a class of equity securities of the
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Issuer becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Act, as amended; or (j) any action similar to those enumerated
above.
Item 5. Interest in Securities of the Issuer
------------------------------------
(a) The Reporting Person directly owns shares of Preferred Stock
convertible into 802,514 shares of Common Stock. Such holdings would constitute
beneficial ownership of 6.8% of the outstanding shares of Common Stock.
(b) The number of shares of Common Stock as to which the Reporting
Person may be deemed to (i) have sole power to vote or to direct the vote,
(ii) shared power to vote or to direct the vote, (iii) sole or shared power
to dispose or to direct the disposition, or (iv) shares power to dispose or
direct the disposition is set forth in the cover page and such information is
incorporated herein by reference.
(c) Except as reported in Item 4 herein, there have been no reportable
transactions with respect to the Common Stock within the last 60 days by the
Reporting Person and persons named in Appendix A to Item 2 of this Schedule 13D.
(d) No other person is known to have the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of, such
securities.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
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to Securities of the Issuer
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To the best knowledge of the Reporting Person and each person named in
Appendix A to Item 2 of this Schedule 13D, except for the agreements referred to
in Item 4 herein, there is no contract, arrangement, understanding or
relationship (legal or otherwise) between any of the Reporting Persons and any
other person with respect to the Preferred Stock or Common Stock, including but
not limited to transfer or voting of either the Preferred Stock or the Common
Stock, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies.
Item 7. Material to be Filed as Exhibits
--------------------------------
1. Exhibit 1 - Agreement and Plan of Merger, dated as of January 8, 1997, by
and among the Issuer (a newly formed Delaware corporation), the predecessor
company of the Issuer and Orion Merger Company, Inc. (Incorporated by reference
to Exhibit number 2.1 in Registration Statement No. 333-19795 on Form S-4 of
Orion Newco Services, Inc.)
2. Exhibit 2 - Form of Section 351 Exchange Agreement and Plan of Conversion,
dated as June __, 1996 by and among the Issuer, the Reporting Person and the
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Limited Partners. (Incorporated by reference to Exhibit 10 in Current Report on
Form 8-K dated December 20, 1996 of Orion Network Systems, Inc.)
3. Exhibit 3 - Form of First Amendment to Exchange Agreement, dated as
December __, 1996 by and among the Issuer, the Reporting Person and the Limited
Partners. (Incorporated by reference to Exhibit 10.45 in Registration Statement
No. 333-19795 on Form S-4 of Orion Newco Services, Inc.)
4. Exhibit 4 - Form of Series C 6% Cumulative Redeemable Convertible Preferred
Stock of Orion Newco Services, Inc.(Incorporated by reference to Exhibit 4.3 in
Form 8-B pursuant to Section 12(g) dated January 31, 1997 of Orion Newco
Services, Inc.)
Signature
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After reasonable inquiry and to the best of the knowledge and belief of
the undersigned, the undersigned certifies that the information
set forth in this statement by or about the undersigned is true, complete and
correct.
Dated: February 10, 1997
TRANS-ATLANTIC SATELLITE, INC.
By: /s/ Koichi Mori
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Name: Koichi Mori
Title: Vice President
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Page 8 of 8 pages
APPENDIX A
TRANS-ATLANTIC SATELLITE, INC.
PRESIDENT AND DIRECTOR VICE PRESIDENT, DIRECTOR AND SECRETARY
HIDETOSHI NISHIMURA KOICHI MORI
VICE PRESIDENT AND DIRECTOR VICE PRESIDENT
NAOYOSHI ABE ATSUFUMI FUJISHIMA
TREASURER AND DIRECTOR
KATSUHIKO MASADA
EACH OF THE ABOVE-LISTED PERSONS IS A JAPANESE CITIZEN WHOSE PRINCIPAL
PLACE OF BUSINESS IS 1211 AVENUE OF AMERICAS, 41ST FLOOR, NEW YORK, NEW YORK
10036.
NISSHO IWAI OFFICERS AND DIRECTORS
MANAGING DIRECTORS DIRECTORS CORPORATE AUDITORS
TOSHIHIRO TAMURA SHOICHI TANAKA TSUNEMITSU KITAYAMA
TAKESHI CHIBA AKIYO NOZUE KINPEL SHIOTA
SABURO SAKAKIBARA HIROHIKO KITAZAWA MASAJI SHINAGAWA
TOSHIHISA KAJIWARA TAKAHARU TANABE YOSHIRO YOSHIDA
SUKEJI ISHINO YOSHISHIGE AIKEI
YOSHINORI TAKEDA SUKEYOSHI WATANABE
KAZUO INOHARA MASASHI MIZUTANI
TAKAYUKI MABUCHI HIDETOSHI NISHIMURA
YOSHITO OTAKE MASAYOSHI HONMA
SHOUZOU WATANABE
SHINPACHI HASEGAWA
TOUMA MASAOKA
KOUSAKU NAKATANI
TETSUYA YOSHIOKA
SHIRO YASUTAKE
KUNIHIDE IZUMI
RYUJI HORI
BOARD OF DIRECTORS
PRESIDENT SENIOR MANAGING DIRECTORS
MASATAKE KUSAMICHI SUSUMU YOSHIDA
HIROSHI TOMOMORI
EXECUTIVE VICE-PRESIDENTS MASAYOSHI TORIUMI
MATAMITSU GOTO MASAMITSU HIROUMI
TASURO OKADA YASUO KATO
AKIRA YOKOUCHI
NOBUTOSHI GONDA
KATSUMI YOSHIOKA
EACH OF THE ABOVE-LISTED PERSONS IS A JAPANESE CITIZEN WHOSE PRINCIPAL
PLACE OF BUSINESS IS 4-5, AKASAKA 2-CHOME, MINATO-KU, TOKYO 107, JAPAN.
