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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. 2)*
Globalstar Telecommunications Limited
(Name of Issuer)
Common Stock, par value $1.00
(Title of Class of Securities)
G3930H104
(CUSIP Number)
Eric J. Zahler, Senior Vice President, Secretary and General Counsel, Loral
Space & Communications Ltd., c/o Loral SpaceCom Corporation, 600 Third Avenue,
New York, New York 10016
(212) 697-1105
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
April 14, 1998
(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-l(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
disclosures provided in a prior cover page.
The information required on 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).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. G3930H104 PAGE 2 OF 8 PAGES
- --------------------------------------------------------------------------------
1 NAME OF REPORT PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Loral Space & Communications Ltd.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
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4 SOURCE OF FUNDS*
00
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Bermuda
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
8,695,691
NUMBER ----------------------------------------------------------
OF SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED
BY EACH REPORTING
PERSON WITH ----------------------------------------------------------
9 SOLE DISPOSITIVE POWER
8,695,691
----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON
8,695,691
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
21.21%
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14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
<PAGE> 3
Loral Space & Communications Ltd., a Bermuda company ("Loral"), hereby
amends and supplements, in this Amendment No. 2 to Schedule 13D (this "Amendment
No. 2"), the Statement on Schedule 13D originally filed on October 29, 1996, as
amended on May 21, 1997 (as so amended, the "Schedule 13D"), with respect to
shares of Common Stock, $1.00 par value per share (the "Shares"), of Globalstar
Telecommunications Limited, a Bermuda company (the "Company), as follows:
Capitalized terms used herein but not defined herein have the meanings
assigned to them in the Schedule 13D.
On April 27, 1998, the Board of Directors of the Company voted to
effect a two-for-one stock split of the common stock in the form of a dividend
payable on June 8, 1998 to shareholders of record as of May 29, 1998.
Information contained herein does not give effect to this stock split.
Item 2. Identity and Background
Item 2 of the Schedule 13D is hereby amended by replacing the first
paragraph thereof with the following:
This Statement is filed by and on behalf of Loral, a Bermuda company.
Loral is engaged in the space and telecommunications business and has its
principal executive offices at Cedar House, 41 Cedar Avenue, Hamilton HM12,
Bermuda. The executive office of Loral SpaceCom Corporation, the subsidiary that
supervises the activities of Loral's subsidiaries in North America, is located
at 600 Third Avenue, New York, New York 10016. Schedule I of the Schedule 13D is
hereby amended and restated by Schedule I attached to this Amendment No. 2.
Item 3. Source and Amount of Funds or Other Considerations
Item 3 of the Schedule 13D is hereby amended by adding the following
after the second paragraph thereof.
Loral acquired the CPEO Shares (as defined below) upon the conversion
of 2,050,000 6-1/2% Convertible Preferred Equivalent Obligations (the "CPEOs")
of the Company held by Loral at a conversion price of $30.81. Upon the
provisional redemption by the Company of its CPEOs, the Company was required
pursuant to the terms of the indenture governing the CPEOs to pay to each holder
of CPEOs an interest make-whole payment of 0.0435 Share for each CPEO held. The
Interest Make-Whole Shares (as defined below) were acquired by Loral as a result
of this redemption.
Item 4. Purpose of Transaction
Item 4 of the Schedule 13D is hereby amended and restated in its
entirety as follows:
The sole business of the Company is acting as a general partner in
Globalstar, L.P. ("Globalstar"), which is building and preparing to launch and
operate a worldwide, low-earth
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orbit satellite-based digital telecommunications system (the "Globalstar
System(TM)"). Loral owns, directly and directly, approximately 38%, on a fully
diluted basis, of the outstanding equity of Globalstar and has overall
management responsibility for the design, construction, deployment and
operation of the Globalstar System. A portion of Loral's interest in Globalstar
is held through the Company, and a majority of the Company's directors are also
members of the Board of Directors or senior management of Loral. See Item 6 for
further description of the relationship between Loral and the Company.
The purpose of the acquisition of the Warrant Shares, the Rights Shares
and the CPEOs by Loral was to increase Loral's ownership of Globalstar and
provide Globalstar with additional funds for the construction and deployment of
the Globalstar System. The CPEO Shares were acquired upon the conversion of the
CPEOs and the Interest Make-Whole Shares were acquired in connection with the
Company's call for provisional redemption of the CPEOs.
Loral may make further purchases of Shares from time to time. Loral may
not sell the Shares unless they are registered under the Securities Act of 1933,
as amended (the "Securities Act") or sold pursuant to an exemption from
registration, including an exemption under Rule 144 of the Securities Act.
Loral has agreed to purchase 4,200,000 partnership interests of
Globalstar for $420 million in cash subject to satisfaction of certain
conditions. Concurrently with such purchase of Globalstar partnership interests,
Loral will sell to entities advised by or associated with Soros Fund Management
L.L.C. ("Soros") 4,200,000 Shares (the "Soros Shares") at a purchase price of
$58 1/3 per share. The Company has agreed to file a shelf registration statement
covering the Soros Shares and have such registration statement declared
effective within one year from the date of purchase. The foregoing arrangements
are subject to the execution and delivery of definitive documentation.
The purpose of the acquisition of the Shares by the Executive Officers
and Directors is for investment. The Executive Officers and Directors may make
further purchases of Shares from time to time and, subject to any applicable
restrictions under the Securities Act, may dispose of any or all of the Shares
held by them at any time.
Except as set forth above and in Item 6 below, neither Loral nor, to
the best knowledge of Loral, any of the persons listed in Schedule I, has any
plans or proposals that relate to or would result in any of the consequences set
forth in Sections (a) through (j) of Item 4 of Schedule 13D. Each of Loral and
each of the persons listed on Schedule I may, at any time, review or reconsider
its or his position with respect to the Company and formulate plans or proposals
with respect to any of such matters, but has no present intention of doing so.
Item 5. Interest in Securities of the Company
Item 5(a)-(c) of the Schedule 13D is hereby amended and restated as
follows:
(a)-(b) Except as set forth in Item 6:
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(i) Loral Beneficially Owns 8,695,691 Shares by virtue of having sole
voting and dispositive power with respect to the Shares.
Loral acquired 1,674,400 Shares on April 22, 1996 in a distribution
from Loral Corporation in connection with the Spin-Off. Loral SpaceCom
Corporation, a wholly-owned subsidiary of Loral, transferred 267,256 of such
Shares (the "Lehman GTL Shares") to certain partnerships affiliated with Lehman
Brothers Holdings Inc. (the "Lehman Partnerships") on August 9, 1996 in exchange
for shares of Series S Redeemable Preferred Stock of SS/L (Bermuda) Ltd. (the
"Lehman Transaction"). On March 3, 1996, Loral acquired 2,050,000 CPEOs, which
were initially convertible, at a conversion price of $65.00, into 1,576,923
Shares. On April 29, 1997, Loral, by virtue of its ownership of 1,407,144
Shares, acquired 159,170 Shares (the "Rights Shares") pursuant to the exercise
of subscription rights to purchase Common Stock at $26.50 per share ("GTL
Rights") distributed by GTL to shareholders of record on March 24, 1997. On
April 30, 1997, Loral and Space Systems/Loral, Inc., a wholly owned subsidiary
of Loral ("SS/L"), exercised their GTL Warrants and purchased 942,428 and
195,094 Shares, respectively (collectively, the "Warrant Shares"). On May 5,
1997, Loral acquired 16,002 Shares (the "Standby Shares") pursuant to a Standby
Agreement between Loral and the Company under which Loral was obligated to
purchase any Shares not purchased by shareholders pursuant to the exercise of
Rights.
On May 28, 1997, the Company issued a 100% stock dividend (the "Stock
Split"). As a result of the Stock Split, Loral's ownership of Shares increased
from 2,719,838 Shares to 5,439,676 Shares. Of these Shares, 994,000 represent
Shares underlying options granted to certain executives and directors of Loral
and its predecessor entity. As of June 1, 1998, 160,000 such options had been
exercised and accordingly, Loral's ownership of Shares was reduced to 5,279,676
Shares.
As a result of an antidilution adjustment in the conversion price of
the CPEOs effected by the Stock Split and the distribution of the Rights, Loral
became entitled to convert its CPEOs into an additional 1,749,917 Shares. On
March 31, 1998, the Company called for the provisional redemption of the CPEOs.
Under the terms of the indenture governing the CPEOs, the Company was required
in connection with such provisional redemption, to pay to each holder of CPEOs
an interest make-whole payment of 0.0435 share of common stock for each CPEO
held. On April 14, 1998, Loral converted its CPEOs into 3,326,840 Shares (the
"CPEO Shares") and on April 30, 1998, Loral received 89,175 Shares as an
interest make-whole payment (the "Interest Make-Whole Shares"). The Shares
Beneficially Owned by Loral constitute 21.21% of the outstanding Shares of the
Company.
(ii) To the best knowledge of Loral, the Executive Officers and
Directors Beneficially Own the number of Shares set forth opposite their names
on Schedule I hereto. To the best knowledge of Loral and except as set forth on
Schedule I hereto, the Executive Officers and Directors have sole voting and
dispositive power with respect to their respective Shares. The respective
percentage interests of the Executive Officers and Directors are set forth
opposite their names in Schedule I hereto.
<PAGE> 6
Loral's percentage is calculated based upon the 40,988,702 Shares
issued and outstanding as reported on the Company's 10Q for the quarter ended
March 31, 1998. The percentage interests of the Executive Officers and Directors
are calculated based upon the 40,988,702 Shares stated to be issued and
outstanding.
(c) The trading date, number of Shares purchased or disposed of and price per
Share (excluding commissions, if any) for all transactions by Loral and the
Executive Officers and Directors for the 60-day period preceding April 14, 1997
through the date hereof are set forth in Schedule II hereto. With the exception
of the conversion by Loral of the CPEOs and the receipt of the Interest
Make-Whole Shares in connection with the Company's provisional redemption, all
other transactions in the Shares were effected on the Nasdaq National Market.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Company
(i) The second, third and fourth paragraphs of Item 6 of the Schedule
13D is hereby amended and restated as follows:
Globalstar is managed by a General Partners' Committee, which is
majority controlled by representatives designated directly or indirectly by
Loral. The Company's sole business is acting as a general partner of Globalstar.
The Company's independent directors serve as the Company's representatives on
the General Partners' Committee and have the right to pass upon certain matters
prior to any decision to submit such matters to a vote of Globalstar's partners
and have certain authority over the hiring or dismissal of senior officers of
Globalstar. In the event of (i) a change of control of the Company at a time
when the Company owns less than 50% of the Globalstar partnership interests
outstanding, including certain changes in the Company's Board of Directors, or
(ii) a sale or other disposition of partnership interests following which the
equity interest of the Company in Globalstar has been reduced to an interest of
less than 5% (a "Reduction in Interest"), which, in the event of either clause
(i) or (ii) above, has not been approved by Globalstar's managing general
partner, which is an affiliate of Loral, or by the partners of Globalstar, the
Company will become a limited partner in Globalstar and will no longer appoint
representatives to serve on the General Partners' Committee. Certain other
governance rights granted to the Company under the Globalstar partnership
agreement will also be revoked, and it will enjoy only the rights of a limited
partner in Globalstar. In either event, the Company may be deemed to be an
investment company, subject to regulation under the Investment Company Act of
1940, as amended.
Loral has beneficial ownership (calculated on a proportionate basis, in
the case of ownership interests held through entities not wholly-owned by Loral)
of approximately 22,590,217 Globalstar partnership interests, constituting
approximately 38% of Globalstar's total outstanding partnership interests (after
giving effect to exercise of warrants held by GTL to acquire 1,032,250
Globalstar partnership interests). Loral's beneficial interest in Globalstar
consists of (i) 18,242,372 partnership interests held directly and indirectly by
Loral and SS/L and (ii) approximately 4,347,845 partnership interests held
indirectly by Loral through its holdings of Shares.
<PAGE> 7
The Company has entered into an Exchange and Registration Rights
Agreement, dated as of December 31, 1994, with Globalstar and each of the other
partners named therein, as amended on April 8, 1998 to add an additional partner
as a party thereto, pursuant to which the Company has granted to each other
partner in Globalstar, the right, following the date on which Globalstar
achieves full coverage via a 48-satellite constellation (the "Full Coverage
Date") and after at least two consecutive reported fiscal quarters of positive
income, to exchange its Globalstar partnership interests for an equal number of
Shares (subject to antidilution adjustments) subject to the following
limitations: (i) in any 12-month period, the sum of the number of Globalstar
partnership interests so transferred plus all other transfers of Globalstar
partnership interests will not be permitted to exceed 5% of the total number of
Globalstar partnership interests outstanding (including those held by the
Company), and (ii) the number of Shares so issued in any 12-month period will
not exceed 10% of the number of Shares outstanding at the beginning of that
year. The Company has agreed, with certain limited exceptions, to file, and to
use reasonable efforts to maintain the effectiveness of, a registration
statement covering the issuance of such Shares. In the event of a bona fide
offer or solicitation that would result in a change of control involving a
majority of the outstanding Shares or a majority of the members of the Company's
Board of Directors not approved by the partners of Globalstar, the exchange
rights will become fully exercisable, regardless of such limitation, whether or
not the Full Coverage Date has occurred. Loral will have the right, through its
direct and indirect interests in Globalstar, pursuant to this agreement to
acquire 36,484,744 Shares.
Loral has agreed to purchase 4,200,000 partnership interests of
Globalstar for $420 million in cash subject to satisfaction of certain
conditions. Concurrently with such purchase of Globalstar partnership interests,
Loral will sell to entities advised by or associated with Soros Fund Management
L.L.C. ("Soros") 4,200,000 Shares (the "Soros Shares") at a purchase price of
$58 1/3 per share. The Company has agreed to file a shelf registration statement
covering the Soros Shares and have such registration statement declared
effective within one year from the date of purchase. The foregoing arrangements
are subject to the execution and delivery of definitive documentation.
<PAGE> 8
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: June 10, 1998
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ Eric J. Zahler
-------------------------------------
Name: Eric J. Zahler
Title: Senior Vice President,
Secretary and General Counsel
<PAGE> 9
SCHEDULE I
Set forth below is the name, position, present principal occupation and
amount of beneficial interest in the Shares, if any, of the directors and
executive officers of Loral Space & Communications Ltd. Except as set forth
below, the business address of each of these persons is c/o Loral SpaceCom
Corporation., 600 Third Avenue, New York, New York 10016. Each such person is a
citizen of the United States except that Mr. Gregory Clark holds dual U.S. and
Australian citizenship.
Directors and Executive Officers of Loral Space &
Communications Ltd.
<TABLE>
<CAPTION>
Number of Shares
Name and Position in Owned and
addition to Present Aggregate Percentage
Principal Occupation Present Principal Occupation Purchase Price Interest
-------------------- ---------------------------- -------------- --------
<S> <C> <C> <C>
Bernard L. Schwartz Chairman of the Board of Directors 603,802(1) 1.5%
and Chief Executive Officer
Gregory Clark President and Chief Operating Officer 10,000(2) *
Howard Gittis, Director Vice Chairman and Chief 40,000(3) *
Administrative Officer of MacAndrews
& Forbes Holdings, Inc.
35 E. 62nd St.
New York, NY 10021
Robert B. Hodes, Director Counsel to 52,226(4) *
Willkie Farr & Gallagher
153 East 53rd St.
New York, NY 10022
</TABLE>
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* Less than one percent.
1 Includes 40,000 options at an exercise price of $10.00 per Share and
240,000 options at an exercise price of $12.50 per Share.
2 Consists of 10,000 options at an exercise price of $25.75 per Share.
3 Consists of 40,000 options at an exercise price of $16.6875 per Share.
4 Includes 40,000 options at an exercise price of $16.6875 per Share and
10,000 options at an exercise price of $25.1875 per Share.
I-1
<PAGE> 10
<TABLE>
<CAPTION>
Number of Shares
Name and Position in Owned and
addition to Present Aggregate Percentage
Principal Occupation Present Principal Occupation Purchase Price Interest
-------------------- ---------------------------- -------------- --------
<S> <C> <C> <C>
Gershon Kekst, Director President of Kekst and Company, Inc. 40,000(5) *
437 Madison Ave.
New York, NY 10022
Charles Lazarus, Director Chairman and Director of Toys "R" Us, 40,000(6) *
Inc.
461 From Road
Paramus, NJ 07652
Malvin A. Ruderman, Director Professor of Physics, Columbia 41,112(7) *
University
29 Washington Sq. West
New York, NY 10011
E. Donald Shapiro, Director Joseph Solomon Distinguished 54,462(8) *
Professor of Law
New York Law School
57 Worth Street
New York, NY 10013
Arthur L. Simon, Director Independent consultant 40,000(9) *
971 Haverstraw Road
Suffern, NY 10901
Daniel Yankelovich, Director Chairman of DYG, Inc. 47,904(10) *
21 Holiday Point Rd.
Sherman, CT 06784
</TABLE>
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5 Consists of 40,000 options at an exercise price of $16.6875 per Share.
6 Consists of 40,000 options at an exercise price of $16.6875 per Share.
7 Includes 1,000 Shares held by his wife as to which he disclaims beneficial
ownership and 40,000 options at an exercise price of $16.6875 per Share.
8 Includes 40,000 options at an exercise price of $16.6875 per Share.
9 Consists of 40,000 options at an exercise price of $16.6875 per Share.
10 Includes 40,000 options at an exercise price of $16.6875 per Share.
I-2
<PAGE> 11
<TABLE>
<CAPTION>
Number of Shares
Name and Position in Owned and
addition to Present Aggregate Percentage
Principal Occupation Present Principal Occupation Purchase Price Interest
-------------------- ---------------------------- -------------- --------
<S> <C> <C> <C>
Laurence D. Atlas Vice President, Government Relations 0 *
-- Telecommunications
W. Neil Bauer Vice President 0 *
Robert E. Berry Senior Vice President 222 *
Jeanette H. Clonan Vice President, Communications and 1,146 *
Investor Relations
Michael P. DeBlasio First Senior Vice President and Chief 64,000(11) *
Financial Officer
Terry J. Hart Vice President 0 *
Stephen L. Jackson Vice President, Administration 222 *
Avi Katz Vice President, Deputy General 500 *
Counsel and Assistant Secretary
Russell Mack Vice President, Business Ventures 7,000(12) *
Ronald C. Maehl Vice President 0 *
Nicholas C. Moren Senior Vice President and Treasurer 52,226(13) *
Harvey B. Rein Vice President and Controller 6,194(14) *
</TABLE>
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11 Includes 40,000 options at an exercise price of $10.00 per Share and
20,000 options at an exercise price of $12.50 per Share.
12 Consists of 7,000 options at an exercise price of $8.31 per Share.
13 Includes 40,000 options at an exercise price of $10.00 per Share and
10,000 options at an exercise price of $12.50 per Share.
I-3
<PAGE> 12
<TABLE>
<CAPTION>
Number of Shares
Name and Position in Owned and
addition to Present Aggregate Percentage
Principal Occupation Present Principal Occupation Purchase Price Interest
-------------------- ---------------------------- -------------- --------
<S> <C> <C> <C>
Thomas B. Ross Vice President, Government Relations 9,178(15) *
Eric J. Zahler Senior Vice President, General 54,006(16) *
Counsel and Secretary
</TABLE>
- ----------
14 Includes 4,000 options at an exercise price of $12.50 per Share and 1,750
options at an exercise price of $8.3125 per Share.
15 Includes 2,500 Shares at an exercise price of $8.3125 per Share and 6,678
shares held by his wife as to which he disclaims beneficial ownership.
16 Includes 2,226 Shares held in a Keogh Account, 1,780 Shares held in trust
for his children, 40,000 options at an exercise price of $10.00 per Share
and 10,000 options at an exercise price of $12.50 per Share.
I-4
<PAGE> 13
SCHEDULE II
TRANSACTIONS IN SHARES DURING THE PERIOD COMMENCING FROM THE 60-
DAY PERIOD PRECEDING APRIL 14, 1997 THROUGH THE DATE HEREOF
<TABLE>
<CAPTION>
Price
Name Date Shares per Share A/S*
---- ---- ------ --------- ----
<S> <C> <C> <C> <C>
Loral Space & Communications Ltd. 4/14/98 3,326,840 ** A
Loral Space & Communications Ltd. 4/30/98 89,175 ** A
Donald Shapiro 4/29/98 3,245 *** A
Donald Shaprio 4/30/98 87 *** A
</TABLE>
- ----------
* A indicates an acquisition of Shares and S indicates a sale of Shares. The
above table does not show disposition of shares by Loral in connection
with the exercise by certain persons of options to acquire Shares
previously granted to them by Loral.
** 3,326,840 Shares were acquired upon conversion of the CPEOs at an exercise
price of $30.81 and 89,175 Shares were paid by the Company to Loral in
connection with the Company's provisional redemption of the CPEOs.
*** 3,245 Shares were acquired upon conversion of CPEOS held by Donald Shapiro
at an exercise price of $30.81 and 87 Shares were paid by the Company to
Professor Shapiro in connection with the Company's provisional redemption
of the CPEOs.
II-1
