UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____________)
Orion Network Systems
(Name of Issuer)
Common Stock, par value $.01 per share
(Title and Class of Securities)
68628K 10 4(1)
(CUSIP Number)
J. Gail Bancroft
Powell, Goldstein, Frazer & Murphy LLP
1001 Pennsylvania Avenue N.W.
Washington D.C. 20004
202.624.7268
(Name, Address, and Telephone Number
of Person Authorized to Receive Notices and Communications)
January 31, 1997
(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 [ ]
- --------
(1) The Issuer has advised the filing entities that it has applied for a new
CUSIP number but that such number is not yet available.
Page 1 of 16
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SCHEDULE 13D
CUSIP NO. 68628K 10 4
- --------------------------------------------------------------------------------
1 Name of Reporting Person; S.S. or I.R.S. Identification No.
of Above Person
MCN Sat U.S., Inc.
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (a)
----
(b) X
----
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3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
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5 Check Box If Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
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6 Citizenship or Place of Organization
United States
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Number of Shares 7 Sole Voting Power
Beneficially 1,021,428
Owned by Each -------------------------------------------------------------
Reporting Person 8 Shared Voting Power
None
-------------------------------------------------------------
9 Sole Dispositive Power
1,021,428
-------------------------------------------------------------
10 Shared Dispositive Power
None
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11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,735,714
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate amount in Row (11) Excludes
Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
13.7%
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14 Type of Reporting Person
CO
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Page 2 of 16
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SCHEDULE 13D
CUSIP NO. 68628K 10 4
- --------------------------------------------------------------------------------
1 Name of Reporting Person; S.S. or I.R.S. Identification No.
of Above Person
Matra Marconi Space UK Limited
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group (a)
------
(b) X
------
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check Box If Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e)
[ ]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
England & Wales
- --------------------------------------------------------------------------------
7 Sole Voting Power
714,286
-------------------------------------------------------------
Number of Shares 8 Shared Voting Power
Beneficially None
Owned by Each -------------------------------------------------------------
Reporting Person 9 Sole Dispositive Power
714,286
-------------------------------------------------------------
10 Shared Dispositive Power
None
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
1,735,714
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate amount in Row (11) Excludes
Certain Shares [ ]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
13.7%
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
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Page 3 of 16
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Item 1. Security and Issuer:
Issuer: Orion Network Systems, Inc. (the "Issuer")
2440 Research Boulevard, Suite 400
Rockville, Maryland 20850
Security: Common Stock, par value $.01 per share, of the Issuer
(the "Common Stock").
Item 2. Identity and Background:
Items 2(a) & (b) Name and Residence of Filing Persons:
MCN Sat U.S., Inc. ("MCN Sat")
c/o Matra Marconi Space S.A.
37, avenue Louis Breguet, B.P. 1
78146 Velizy Villacoublay
France
Matra Marconi Space UK Limited ("MMS")
Gunnels Wood Road
Stevenage, Hertfordshire SG1 2AS
England
Item 2(c) Not applicable
Items 2(d) & (e) During the last five years, neither MCN Sat nor MMS nor any
of the executive officers or directors of either (a) has
been convicted in a criminal proceeding (excluding traffic
violations and similar misdemeanors) or (b) was a party to
a civil proceeding of a judicial or administrative body of
competent jurisdiction that resulted in such person being
subject to a judgment, decree, or final order enjoining
future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or
a finding of any violation with respect to such laws.
Page 4 of 16
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Item 2(f) Citizenship:
MCN Sat: United States
MCN Sat Directors and Executive Officers:
Claude Goumy, Director and CEO, and Georges
Payet and Dominique Martres, both of whom
are Directors, are citizens of the Republic
of France.
MMS: England and Wales
MMS Directors and Executive Officers:
Nicholas E. Franks, Managing Director, and
Ian G. King, Director, are citizens of Great
Britain; Armand Carlier, Director, is a
citizen of the Republic of France.
Item 3. Source and Amount of Funds or Other Consideration:
MCN Sat:
Under the Section 351 Exchange Agreement and Plan of
Merger, dated as of June, 1996, as amended, among
the Issuer, Orion Satellite Corporation, a Delaware
corporation that is wholly owned by the Issuer and
that is the general partner of International Private
Satellite Partners, L.P. a Delaware limited
partnership ("IPSP"), and each of IPSP's limited
partners (including MCN Sat but excluding the
Issuer) (the "Exchange Agreement"), MCN Sat received
17,875 shares of the Issuer's Series C 6% Cumulative
Redeemable Convertible Preferred Stock (the
"Preferred Stock") in consideration for (a) MCN
Sat's assignment to the Issuer of its limited
partnership interest in IPSP, (b) the assignment to
the Issuer by MCN Sat and MCN Sat Service S.A., a
French corporation and an affiliate of MCN Sat
("Service") of all right, title and interest of MCN
Sat and Service in and to certain IPSP-related
documents, including agreements obligating IPSP to
repay to MCN Sat and Service certain amounts paid to
IPSP by MCN Sat Service pursuant to such documents,
and (c) the termination of a certain other agreement
under which IPSP was required to repay to MCN Sat
certain amounts that MCN Sat previously paid to
IPSP. MCN Sat's Shares of Preferred Stock are
convertible at any time into 1,021,428 shares of
Common Stock. The transaction contemplated by the
Exchange Agreement (the "Exchange Transaction")
closed on January 31, 1997.
MMS:
Pursuant to the Second Amended and Restated Purchase
Contract, dated as of September 26, 1991, between
IPSP and MMS (the "Purchase Contract"), IPSP is
required to make periodic payments to MMS in respect
of a spacecraft that it acquired from MMS under the
Purchase
Page 5 of 16
<PAGE>
Contract (the "Incentive Payments"). Prior to
January 31, 1997, certain financing documents to
which IPSP was a party prevented IPSP from making
such Payments. In December, 1996, MMS entered into
Amendment #10 to the Purchase Contract ("Amendment
#10") which required IPSP to pay to MMS on Amendment
#10's effective date $13,000,000 of the Incentive
Payments due on such date. It also required MMS to
use $10,000,000 of the amount received from the
Issuer to purchase $10,000,000 principal amount of
the Issuer's Convertible Junior Subordinated
Debentures, Due February 1, 2012 (Interest Payable
in Common Stock) (the "Debentures") on such date.
Amendment #10 became effective on January 31, 1997,
and MMS purchased the Debentures on such date. The
Debentures are convertible into 714,286 shares of
Common Stock.
Item 4. Purpose of Transaction:
MCN Sat:
MCN Sat consented to participate in the Exchange
Transaction to (a) facilitate the Issuer's stated
business objectives, including the objective of
simplifying IPSP's management to enable the Issuer
to more easily access the capital markets and (b)
terminate the continuing payment obligations of MCN
Sat and Service under the IPSP-related documents to
which reference is made in Item 3.
In satisfaction of an obligation of MCN Sat to
British Aerospace plc, MCN Sat intends to transfer
1,914 shares of its Preferred Stock to British
Aerospace plc or an affiliate thereof as soon as the
Issuer permits such transfer to occur.
The Issuer will pay dividends on the Preferred Stock
in Common Stock.
MMS:
MMS agreed to purchase the Debentures to facilitate
the Issuer's business plans.
The Issuer will pay interest on the Debentures in
Common Stock.
Neither MCN Sat nor MMS has any present intention to
acquire additional securities of the Issuer (other
than in payment of dividends or interest) or to
dispose of the Preferred Stock, the Debentures, or
the Common Stock into which the Preferred Stock or
the Debentures may be converted but each reserves
the right to take such action as it deems
appropriate, in light of circumstances existing at
the time, to acquire additional shares of Common
Stock or to dispose of some or all of the
Page 6 of 16
<PAGE>
Preferred Stock, the Debentures, or the Common Stock
into which the Preferred Stock or the Debentures may
be converted, in the open market, in privately
negotiated transactions, by tender offer, or
otherwise.
Item 5. Interest in Securities of the Issuer:
By virtue of its acquisition of shares of Preferred
Stock pursuant to the Exchange Transaction and the
fact that said shares of Preferred Stock are
convertible into shares of Common Stock at any time,
MCN Sat is the beneficial owner of 1,021,428 shares
of Common Stock,
By virtue of its purchase of the Debentures and the
fact that the Debentures are convertible into shares
of Common Stock at any time, MMS is the beneficial
owner of 714,286 shares of Common Stock.
The percentage of the Issuer that MCN Sat will
directly own upon conversion of the Preferred Stock
is 8.04%. The percentage of the Issuer that MMS will
directly own upon conversion of the Debentures is
5.62%. MCN Sat and MMS together beneficially own
1,735,714 shares of Common Stock, representing
13.66% of the Issuer, because the shares of Common
Stock were acquired by the reporting entities in the
same business transaction and because MCN Sat and
MMS are affiliates.
Item 6. Contracts, Arrangements, Understandings, or
Relationships with Respect to the Securities of the
Issuer:
MCN Sat:
Resale Restriction Agreement. Pursuant to a Resale
Restriction Agreement, dated as of January 31, 1997,
between MCN Sat and the Issuer (the "Resale
Agreement"), for a period of 180 days from the date
of issuance of the Preferred Stock (the "Lock-up
Period"), MCN Sat cannot, directly or indirectly,
sell, offer, contract to sell, make any short sale,
pledge, or otherwise dispose of any shares of Common
Stock issued upon conversion of the Preferred Stock
or as dividends on such Preferred Stock without the
prior written consent of the Issuer unless any such
sale or disposition (a) is to a Company affiliate,
as such term is defined in Rule 144 of the
Securities Act of 1933, as amended, and does
Page 7 of 16
<PAGE>
not involve a public distribution or public offering
or (b) is effected (1) pursuant to a tender or
exchange offer made by or on behalf of the Issuer or
a third party, (2) in connection with a merger,
consolidation, sale of all or substantially all of
the assets, recapitalization, or similar transaction
involving the Issuer, or (3) pursuant to a
transaction not involving a public distribution or
an offering registered under the Securities Act and
not made through a broker, dealer, or market-maker
pursuant to Rule 144.
The Resale Agreement also prohibits MCN Sat, for
five years from the date of issuance of the
Preferred Stock, from transferring, during any
90-day period, any Common Stock that collectively
represents more than 25% of the aggregate number of
shares of Common Stock issuable upon the conversion
of the Preferred Stock or as dividends on such
Preferred Stock unless such transfer is (a) pursuant
to an underwritten public offering pursuant to a
registration statement under the Securities Act, (b)
pursuant to a tender or exchange offer made by or on
behalf of the Issuer or a third party, (c) in
connection with a merger, consolidation, sale of all
or substantially all of the assets,
recapitalization, or similar transaction involving
the Issuer, or (d) pursuant to a transaction not
involving a public distribution or an offering
registered under the Securities Act and not made
through a broker, dealer, or market-maker pursuant
to Rule 144.
Registration Rights Agreement. The shares of
Preferred Stock are not registered under the
Securities Act. The Registration Rights Agreement,
among the Issuer and IPSP's former limited partners,
including MCN Sat (the "MCN Registration Rights
Agreement"), requires the Issuer to prepare and
file, within 195 days after the issuance of the
Preferred Stock, a shelf registration statement
covering the registration of all Common Stock
underlying the Preferred Stock that the holders
thereof desire to include in the registration
statement and that the Resale Agreement permits to
be included and to periodically prepare and file
additional registration statements covering Common
Stock not covered by the initial shelf registration
statement.
In addition, the Issuer must file a registration
statement if, at any time after the expiration of a
180-day period following the date the Preferred
Stock was issued, one or more holders of the
Preferred Stock request the Issuer to register the
sale of Common Stock with a market value of at least
$17,500,000.
Also, the holders of the Preferred Stock may
participate in other registration statements filed
by the Issuer other than registration statements
filed in connection with a business acquisition or
combination
Page 8 of 16
<PAGE>
or an employee benefit plan.
MMS is not a party to the Resale Agreement or the
MCN Registration Rights Agreement.
MMS:
Registration Rights Agreement. The Debentures are
not registered. The Registration Rights Agreement,
dated January 31, 1997, among the Issuer, British
Aerospace Holdings, Inc. ("BAe"), and MMS (the "MMS
Registration Rights Agreement"), provides that each
Debenture holder may demand, at any time after the
180th day following the issuance of the Debentures,
that the Issuer register the sale of the Common
Stock underlying such holder's Debentures pursuant
to an underwritten offering. The MMS Registration
Rights Agreement does not limit the number of
demands that may be made but provides that the
minimum market value of the Common Stock to be sold
pursuant to any demand registration by BAe is $20
million and by MMS is $10 million. If either BAe or
MMS makes a demand for registration, the other is
allowed to `piggyback' on the demand registration
statement. If the underwriters cannot sell all of
the Common Stock for which a demand registration is
requested, then the number of shares of Common Stock
that each of MMS and BAe will be allowed to sell
will be proportionate to the principal amount of
Debentures then outstanding. If the underwriters can
sell a greater number of shares than that for which
the demand is made, then the Company and other
holders of Common Stock may also `piggyback' on the
registration statement, but their shares will be
sold after the Debenture holders' Common Stock. The
Issuer is not required to effect more than one
demand registration every twelve months or within 90
days from the earlier of (a) the date upon which
Common Stock is sold pursuant to a demand
registration statement and (b) the date such
registration statement ceases to be effective.
Notwithstanding the foregoing, neither a demand by
MMS nor a demand by BAe in any 12 month period will
preclude a demand by the other.
Within 10 days following the first anniversary of
the issuance of the Debentures and after each
interest payment date occurring thereafter, the
Issuer is required to register the sale of the
Common Stock it delivers to MMS and BAe in payment
of interest due on the Debentures. In addition,
after the first anniversary of the Closing Date, it
must register the sale of any other shares of Common
Stock that MMS or BAe receives upon conversion of
the principal of their Debentures unless the sale of
such Common Stock is subject to another registration
statement. The Issuer must use its best efforts to
keep the shelf registration statement effective for
15 years or until all of the securities covered by
the shelf registration statement are sold. The
Issuer may direct a Holder
Page 9 of 16
<PAGE>
to suspend sales of Common Stock pursuant to a shelf
registration statement upon the occurrence of
certain events specified in the MMS Registration
Rights Agreement ("Suspension Events"). It may make
this demand once every 12 months and one additional
time during the term of the MMS Registration Rights
Agreement but not during any other Suspension Event
or within 90 days thereafter.
If the Issuer registers the offering of its Common
Stock, MMS and BAe may require the Issuer to
register the sale of all or a portion of their
shares of Common Stock in the registration
statement. If the underwriters cannot sell all of
the shares of Common Stock proposed to be sold in
the registration, then the underwriters first will
sell the Common Stock offered by the Issuer and then
will sell such other number of shares of Common
Stock for which they determine there is a market.
The number of such shares of Common Stock that each
of MMS and BAe will be allowed to sell will be
proportionate to the principal amount of Debentures
then outstanding. Under certain circumstances, MMS
and BAe may piggyback on other registrations.
MCN Sat is not a party to the MMS Registration
Rights Agreement.
Item 7. Material to be Filed as Exhibits:
1. Joint Filing Agreement.
2. Powers of Attorney appointing J. Gail Bancroft
as attorney-in-fact.
Page 10 of 16
<PAGE>
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.
January 10, 1997
MCN Sat U.S., Inc.
/s/ Claude Goumy*
-------------------------------
Claude Goumy, President and CEO
/s/ J. Gail Bancroft
- ----------------------
*By J. Gail Bancroft
Attorney-in-Fact
Page 11 of 16
<PAGE>
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.
January 10, 1997
Matra Marconi Space UK Limited
/s/ Nicholas E. Franks*
-------------------------------
Nicholas E. Franks
/s/ J. Gail Bancroft
- -----------------------
*By J. Gail Bancroft
Attorney-in-Fact
Page 12 of 16
EXHIBIT 1
JOINT FILING AGREEMENT
The undersigned hereby agree that the foregoing Schedule 13D may be
filed on behalf of each of them.
January 10, 1997
Matra Marconi Space UK Limited
By: Nicholas E. Franks, Managing Director
/s/ Nicholas E. Franks*
-------------------------------------
MCN Sat U.S., Inc.
By: Claude Goumy, President and CEO
/s/ Claude Goumy*
-------------------------------------
/s/ J. Gail Bancroft
- ----------------------
*J. Gail Bancroft, Attorney-in-Fact
Page 13 of 16
EXHIBIT 2
------------------
POWERS OF ATTORNEY
------------------
MCN SAT U.S., INC.
AND
MATRA MARCONI SPACE UK LIMITED
Page 14 of 16
<PAGE>
MCN SAT OF U.S.
POWER OF ATTORNEY
I, Claude GOUMY, President and Chief Executive Officer of MCN Sat of U.S. Inc.,
(the "Corporation"), hereby appoint J. Gail BANCROFT, 1001 Pennsylvania Avenue,
N.W., Washington, D.C. 20004 USA, as my true and lawful agent (with full power
of substitution) to act in my name, place or stead to execute and file with the
Securities and Exchange Commission (1) a Schedule 13D under the Securities
Exchange Act of 1934 (including any and all amendments thereto) reporting the
Corporation's interest in shares of Common Stock, par value $.01 per share, of
Orion Network Systems, Inc., together with other information required thereby,
and (2) a Joint Filing Agreement in connection therewith;
This Power of Attorney shall not be affected by subsequent disability or
incompetence.
In Witness Whereof, the undersigned has hereunto set his hand this 10th day of
February 1997.
/s/ Claude GOUMY
-----------------------------------
Claude GOUMY
Page 15 of 16
<PAGE>
MATRA MARCONI SPACE
POWER OF ATTORNEY
I, Nicholas E. FRANKS, Managing Director of Matra Marconi Space UK Limited (the
"Corporation"), hereby appoint J. Gail Bancroft, 1001 Pennsylvania Avenue, N.W.
Washington, D.C. 20004, as my true and lawful agent (with full power of
substitution) to act in my name, place or stead to execute and file with the
Securities and Exchange Commission (1) a Schedule 13D under the Securities
Exchange Act of 1934 (including any and all amendments thereto) reporting the
Corporation's interest in shares of Common Stock, par value $.01 per share, of
Orion Network Systems, Inc., together with other information required thereby,
and (2) a Joint Filing Agreement in connection therewith.
This Power of Attorney shall not be affected by subsequent disability or
incompetence.
In Witness Whereof, the undersigned has hereunto set his hand this 10th day of
February 1997.
/s/ Nicholas E. Franks
----------------------
Nicholas E. Franks
Page 16 of 16
