SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM 10-K/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002
COMMISSION FILE NUMBER 1-14180
LORAL SPACE & COMMUNICATIONS LTD.
C/O LORAL SPACECOM CORPORATION
600 THIRD AVENUE
NEW YORK, NEW YORK 10016
TELEPHONE: (212) 697-1105
JURISDICTION OF INCORPORATION: BERMUDA
IRS IDENTIFICATION NUMBER: 13-3867424
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
------------------- -------------------
COMMON STOCK, $.10 PAR VALUE NONE
The registrant has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and
has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2). Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. Yes [X] No [ ]
The aggregate market value of the common shares held by non-affiliates of
the registrant, based upon the closing sale price of the common shares on June
30, 2002, as reported on the New York Stock Exchange was approximately $360
million.
At March 1, 2004, 45,125,202 common shares were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's 2003 definitive proxy statement (to be filed
not later than 120 days after the end of the registrant's fiscal year) are
incorporated by reference into Part III.
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TABLE OF CONTENTS
PAGE
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Part IV
Item 14. Evaluation of Disclosure Controls and Procedures 2
Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K 2
Signatures 8
EXPLANATORY NOTE
Item 14 (Evaluation of Disclosure Controls and Procedures) of our Annual
Report on Form 10-K for the year ended December 31, 2002 (the "2002 Annual
Report"), originally filed with the Securities and Exchange Commission on March
31, 2003, stated the conclusion of our certifying officers that, as of a date
within 90 days before the filing of the 2002 Annual Report, our disclosure
controls and procedures were adequate and designed to ensure that material
information relating to the Company and its consolidated subsidiaries would be
made known to them by others within those entities. As requested by the staff of
the SEC, we are filing this Amendment on Form 10-K/A to the 2002 Annual Report
solely for the purpose of amending Item 14 of the 2002 Annual Report to make
clear that our certifying officers concluded that, as of December 31, 2002, our
disclosure controls and procedures were effective and designed to ensure that
material information relating to the Company and its consolidated subsidiaries
would be made known to them by others within those entities.
In addition, we have filed the following exhibits herewith:
31.1 Certification of Chief Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.2 Certification of Chief Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
Except as specifically indicated herein, no other information included in
the Annual Report on Form 10-K is amended by this Amendment on Form 10-K/A.
PART IV
ITEM 14. EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
(a) Disclosure controls and procedures. Our chief executive officer and
our chief financial officer, after evaluating the effectiveness of our
"disclosure controls and procedures" (as defined in the Securities and Exchange
Act of 1934 Rules 13a-15(e) and 15-d-15(e)) as of December 31, 2002, have
concluded that our disclosure controls and procedures were effective and
designed to ensure that material information relating to Loral and its
consolidated subsidiaries required to be in our filings under the Securities and
Exchange Act of 1934 would be made known to them by others within those entities
in a timely manner.
(b) Internal controls over financial reporting. There were no changes in
our internal controls over financial reporting (as defined in the Securities and
Exchange Act of 1934 Rules 13a-15(f) and 15-d-15(f)) during the most recent
fiscal quarter that we judge to have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
2
PAGE
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Index to Financial Statements....................................... F-1
Loral Space & Communications Ltd.
Independent Auditors' Report.................................... F-2
Consolidated Balance Sheets as of December 31, 2002 and 2001.... F-3
Consolidated Statements of Operations for the years ended December 31,
2002, 2001 and 2000.......................................... F-4
Consolidated Statements of Shareholders' (Deficit) Equity for the years
ended December 31, 2002, 2001 and 2000....................... F-5
Consolidated Statements of Cash Flows for the years ended December 31,
2002, 2001 and 2000.......................................... F-6
Notes to Consolidated Financial Statements...................... F-7
(a) 2. Financial Statements Schedules
Independent Auditors' Report S-1
Consolidated Financial Statements of Globalstar, L.P S-2
Financial statement schedules not listed are either not
required or the information required is reflected in the
consolidated financial statements.
(b) 3. Exhibits
EXHIBIT
NUMBER DESCRIPTION
------ --------------------------------------------------------------------
2.1 Restructuring, Financing and Distribution Agreement, dated as of
January 7, 1996, among Loral Corporation, Loral Aerospace Holdings,
Inc., Loral Aerospace Corp., Loral General Partner, Inc., Loral
Globalstar L.P., Loral Globalstar Limited, the Registrant and
Lockheed Martin Corporation(1)
2.2 Amendment to Restructuring, Financing and Distribution Agreement,
dated as of April 15, 1996(1)
2.3 Agreement for the Purchase and Sale of Assets dated as of September
25, 1996 by and between AT&T Corp., as Seller, and Loral Space &
Communications Ltd., as Buyer(2)
2.4 First Amendment to Agreement for the Purchase and Sale of Assets
dated as of March 14, 1997 by and between AT&T Corp., as Seller, and
Loral Space & Communications, Ltd. as Buyer(3)
2.5 Agreement and Plan of Merger dated as of October 7, 1997 by and
among Orion Network Systems, Inc., Loral Space & Communications Ltd.
and Loral Satellite Corporation(4)
2.6 First Amendment to Agreement and Plan of Merger dated as of February
11, 1998 by and among Orion Network Systems, Inc., Loral Space &
Communications Ltd. and Loral Satellite Corporation(5)
2.7 Second Amendment to Agreement and Plan of Merger dated as of March
20, 1998 by and among Orion Network Systems, Inc., Loral Space &
Communications Ltd. and Loral Satellite Corporation(11)
3.1 Memorandum of Association(1)
3.2 Memorandum of Increase of Share Capital dated January 1996(1)
3.2.1 Memorandum of Increase of Share Capital dated May 1997(25)
3.2.2 Memorandum of Increase of Share Capital dated May 1999(25)
3.3 Third Amended and Restated Bye-laws(16)
3.4 Schedule IV to the Third Amended and Restated Bye-laws(16)
4.1 Rights Agreement dated March 27, 1996 between the Registrant and The
Bank of New York, Rights Agent(1)
4.2 Indenture dated as of January 15, 1999 relating to Registrant's
9 1/2% Senior Notes due 2006(12)
10.1 Shareholders Agreement dated as of April 23, 1996 between Loral
Corporation and the Registrant(1)
10.1.1 Amended Shareholders Agreement dated as of March 29, 2000 between
the Registrant and Lockheed Martin Corporation(16)
10.2 Tax Sharing Agreement dated as of April 22, 1996 between Loral
Corporation, the Registrant, Lockheed Martin Corporation and LAC
Acquisition Corporation(1)
10.3 Exchange Agreement dated as of April 22, 1996 between the Registrant
and Lockheed Martin Corporation(1)
10.4 Amended and Restated Agreement of Limited Partnership of Globalstar,
L.P. dated as of January 26, 1999 among Loral/Qualcomm Satellite
Services, L.P., Globalstar Telecommunications Limited, AirTouch
Satellite Services, Inc., Dacom Corporation, Dacom International,
Inc., Hyundai Corporation, Hyundai Electronics Industries Co., Ltd.,
Loral/DASA Globalstar, L.P., Loral Space & Communications Ltd., San
Giorgio S.p.A., TeleSat Limited, TE.S.AM and Vodafone Satellite
Services Limited(12)
3
EXHIBIT
NUMBER DESCRIPTION
------ --------------------------------------------------------------------
10.4.1 Amendment dated as of December 8, 1999 to the Amended and Restated
Agreement of Limited Partnership of Globalstar, L.P.(13)
10.4.2 Amendment dated as of February 1, 2000 to the Amended and Restated
Agreement of Limited Partnership of Globalstar, L.P.(16)
10.5 Service Provider Agreements by and between Globalstar, L.P. and each
of Loral General Partner, Inc. and Loral/DASA Globalstar, L.P.(7)
10.6 Contract between Globalstar, L.P. and Space Systems/Loral, Inc.(7)
10.7 1996 Amended and Restated Stock Option Plan++(26)
10.7.1 Amendment No. 1 to 1996 Amended and Restated Stock Option Plan++(26)
10.7.2 2000 Amended and Restated Stock Option Plan++(26)
10.7.3 Amendment No. 1 to 2000 Amended and Restated Stock Option Plan++(26)
10.8 Common Stock Purchase Plan for Non-Employee Directors(1)++
10.9 Employment Agreement between the Registrant and Bernard L.
Schwartz(1)++
10.9.1 Amendment dated as of March 1, 1998 to Employment Agreement between
the Registrant and Bernard L. Schwartz(11)++
10.9.2 Amendment dated as of July 18, 2000 to Employment Agreement between
the Registrant and Bernard L. Schwartz(20)++
10.9.3 Amendment dated February 25, 2003 to Employment Agreement between
the Registrant and Bernard L. Schwartz++(26)
10.10 Registration Rights Agreement dated as of August 9, 1996 among Loral
Space & Communications Ltd., Lehman Brothers Capital Partners II,
L.P., Lehman Brothers Merchant Banking Portfolio Partnership L.P.,
Lehman Brothers Offshore Investment Partnership L.P. and Lehman
Brothers Offshore Investment Partnership-Japan L.P.(8)
10.11 Registration Rights Agreement dated November 6, 1996 relating to the
Registrant's 6% Convertible Preferred Equivalent Obligations due
2006(6)
10.12 Registration Rights Agreement (Series C Preferred Stock) dated as of
March 31, 1997 between Loral Space & Communications Ltd. and
Finmeccanica S.p.A. and dated as June 23, 1997 among Loral Space &
Communications Ltd., Aerospatiale SNI and Alcatel Espace(9)
10.13 Registration Rights Agreement (Common Stock) dated as of June 23,
1997 among Loral Space & Communications Ltd., Aerospatiale SNI and
Alcatel Espace(9)
10.14 Alliance Agreement dated as of June 23, 1997 among Loral Space &
Communications Ltd., Aerospatiale SNI, Alcatel Espace and
Finmeccanica S.p.A.(9)
10.15 Principal Stockholder Agreement dated as of October 7, 1997 among
Loral Space & Communications Ltd., Loral Satellite Corporation,
Orion Network Systems, Inc. and certain Orion stockholders signatory
thereto(4)
10.16 Agreement of Limited Partnership of CyberStar, L.P. dated as of June
30, 1997(11)
10.17 Purchase and Sale Agreement dated November 17, 1997 between the
Federal Government of the United Mexican States and Corporativo
Satelites Mexicanos, S.A. de C.V. for the purchase and sale of the
capital stock of Satelites Mexicanos, S.A. de C.V. (English
translation of Spanish original)(11)
10.18 Amended and Restated Membership Agreement dated and effective as of
August 21, 1998 among Loral Satmex Ltd. and Ediciones Enigma, S.A.
de C.V. and Firmamento Mexicano, S. de R.L. de C.V.(12)
10.19 Letter Agreement dated December 29, 1997 between Loral Space &
Communications Ltd., Telefonica Autrey S.A. de C.V., Donaldson,
Lufkin & Jenrette Securities Corporation, Lehman Brothers Inc. and
Lehman Commercial Paper Inc. and related Agreement between the
Federal Government of the United Mexican States, Telefonica Autrey,
S.A. de C.V., Ediciones Enigma, S.A. de C.V., Loral Space &
Communications Ltd., Loral Satmex Ltd. and Servicios Corporativos
Satelitales, S.A. de C.V.(11)
4
EXHIBIT
NUMBER DESCRIPTION
------ --------------------------------------------------------------------
10.20 Shareholders Agreement dated December 7, 1998 by and among Alcatel
SpaceCom, Loral Space & Communications Ltd., Dr. Jurgen
Schulte-Hillen and Europe*Star Limited(12)
10.21 Registration Rights Agreement dated as of January 21, 1999 relating
to Registrant's 9 1/2% Senior Notes due 2006(12)
10.22 Lease Agreement dated as of August 18, 1999 by and between Loral
Asia Pacific Satellite (HK) Limited and APT Satellite Company
Limited(15)
10.23 Registration Rights Agreement dated as of February 18, 2000 relating
to Registrant's 6% Series D Convertible Redeemable Preferred Stock
due 2007(16)
10.24 Fee Agreement dated as of April 19, 1996 by and among Globalstar,
Globalstar Telecommunications Limited, Loral Corporation, Loral
Space & Communications Ltd., Qualcomm Limited Partner, Inc., Space
Systems/Loral, Inc. and DASA Globalstar Limited Partner, Inc.(18)
10.25 Intercreditor Agreement dated as of April 19, 1996 by and among
Globalstar, Globalstar Telecommunications Limited, Loral
Corporation, Loral Space & Communications Ltd., Qualcomm Limited
Partner, Inc., Space Systems/Loral, Inc. and DASA Globalstar Limited
Partner, Inc.(18)
10.26 Credit Agreement dated as of November 17, 2000 by and among Loral
Satellite, Inc., Bank of America, National Association, Bank of
America Securities LLC, Credit Lyonnais and Lehman Commercial Paper,
Inc.(19)
10.27.1 First Amendment to the Credit Agreement, dated as of December 21,
2001, among Loral Satellite, Inc., Bank of America, N.A., as
Administrative Agent, and the other lenders parties thereto(24)
10.27.2 Form of Second Amendment to Credit Agreement, dated as of March 31,
2003, among Loral Satellite, Inc., Bank of America, N.A., as
Administrative Agent, and the other lender parties thereto.(26)
10.28.1 Guarantee dated as of November 17, 2000 made by Loral Space &
Communications Ltd.(19)
10.28.2 Form of First Amendment to Guarantee dated as of March 31, 2003 made
by Loral Space & Communications Ltd.(26)
10.29 Assignment, Amendment and Release Agreement dated as of November 17,
2000 by and among the lenders parties to the Globalstar Credit
Agreement, Loral Satellite, Inc., Loral Satcom Ltd., Loral Space &
Communications Ltd., Loral Space & Communication Corporation,
Globalstar, L.P. and Bank of America, National Association(19)
10.30 Amended and Restated Collateral Agreement dated as of November 17,
2000 by and among Loral Satellite, Inc. and Bank of America,
National Association(19)
10.31 Form of Employment Protection Agreement(20)++
10.31.1 Form of Amendment No. 1 to Employment Protection Agreement++(25)
10.32 Form of Subordinated Guaranty Agreement between Loral Space &
Communications Ltd. and Loral SpaceCom Corporation, with respect to
the $29.7 million aggregate principal amount, 10% Subordinated Note
due 2006, with a copy of the 10% Subordinated Note due 2006 included
therein(21)
10.33 Warrant Agreement dated as of December 21, 2001 between Loral Space
& Communications Ltd. and The Bank of New York, as warrant agent(22)
10.34 Guaranty Agreement dated as of December 21, 2001 between Loral Space
& Communications Ltd. and Bankers Trust Company, as trustee(22)
10.35 Indenture, dated as of December 21, 2001, by and among Loral
CyberStar, Inc., certain of its subsidiaries and Bankers Trust
Company, as trustee(22)
10.36 Consent Agreement dated January 9, 2002 among the United States
Department of State, Loral Space & Communications Ltd. and Space
Systems/Loral, Inc.(23)
10.37.1 Amended and Restated Credit Agreement dated as of December 21, 2001
by and among Loral SpaceCom Corporation, Bank of America, N.A., as
Administrative Agent, and the other lenders parties thereto(24)
10.37.2 Form of First Amendment to Amended and Restated Credit Agreement
dated as of March 31, 2003 by and among Loral SpaceCom Corporation,
Bank of America, N.A., as Administrative Agent, and the other
lenders parties thereto.(26)
5
EXHIBIT
NUMBER DESCRIPTION
------ --------------------------------------------------------------------
10.38 Guarantee dated as of December 21, 2001 made by Loral Space &
Communications Corporation and certain subsidiaries of Loral
SpaceCom Corporation in favor of Bank of America, N.A., as
Administrative Agent(24)
10.39 Security Agreement dated as of December 21 2001, by and among Loral
SpaceCom Corporation, Space Systems/Loral, Inc., Loral
Communications Services, Inc., Loral Ground Services, L.L.C. and
Bank of America, N.A., as Collateral Agent(24)
10.40.1 Pledge Agreement dated as of December 21, 2001 by and among Loral
SpaceCom Corporation, Space Systems/Loral, Inc., Loral Ground
Services, L.L.C., Loral Space & Communications Corporation, Loral
Communications Services, Inc. and Bank of America, N.A., as
Collateral Agent(24)
10.40.2 Form of Second Amended and Restated Pledge Agreement dated as of
March 31, 2003.(26)
10.41.1 Intercreditor and Subordination Agreement dated as of December 21,
2001 by and among Loral SpaceCom Corporation, Bank of America, N.A.,
as Administrative Agent for the lenders under the senior credit
facility, Bank of America, N.A. as Administrative Agent for the
lenders under the junior credit facility, and Bank of America, N.A.,
as Collateral Agent(24)
10.41.2 Form of Second Intercreditor and Subordination Agreement dated as of
March 31, 2003.(26)
10.42 Apstar V Condosat Agreement dated as of December 10, 2002 between
APT Satellite Company Limited and Loral Orion, Inc.(26)
12 Statement Re: Computation of Ratios(26)
21 List of Subsidiaries of the Registrant(26)
23.1 Consent of Deloitte & Touche LLP(26)
23.2 Consent of Deloitte & Touche LLP(26)
31.1 Certification of Chief Executive Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002+
31.2 Certification of Chief Financial Officer pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002+
----------
(1) Incorporated by reference from the Registrant's Registration Statement on
Form 10 (No. 1-14180).
(2) Incorporated by reference from the Registrant's Current Report on Form 8-K
filed on September 27, 1996.
(3) Incorporated by reference from the Registrant's Current Report on Form 8-K
filed on March 28, 1997.
(4) Incorporated by reference from the Registrant's Current Report on Form 8-K
filed on October 10, 1997.
(5) Incorporated by reference from the Registrant's Registration Statement on
Form S-4 filed on February 17, 1998 (File No. 333-46407).
(6) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the nine month period ended December 31, 1996.
(7) Incorporated by reference from the Registration Statement on Form S-1 of
Globalstar Telecommunications Limited (File No. 33-86808).
(8) Incorporated by reference from the Registrant's Current Report on Form 8-K
filed on August 13, 1996.
(9) Incorporated by reference from the Registrant's Current Report on Form 8-K
filed on July 8, 1997.
(10) Incorporated by reference from the Registrant's Current Report on Form 8-K
filed on December 9, 1997.
6
(11) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1997.
(12) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1998.
(13) Incorporated by reference from the Current Report on Form 8-K filed on
December 21, 1999 by Globalstar Telecommunications Limited and Globalstar,
L.P.
(14) Incorporated by reference from Registrant's Current Report on Form 8-K
filed on August 6, 1999.
(15) Incorporated by reference from Registrant's Current Report on Form 8-K
filed on August 23, 1999.
(16) Incorporated by reference from the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1999.
(17) Incorporated by reference from Registrant's Current Report on Form 8-K
filed on May 3, 2000.
(18) Incorporated by reference from Registrant's Current Report of Form 8-K
filed on July 7, 2000.
(19) Incorporated by reference from Registrant's Current Report on Form 8-K
filed on November 20, 2000.
(20) Incorporated by reference from Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 2000.
(21) Incorporated by reference from Registrant's Current Report on Form 8-K
filed on December 14, 2001.
(22) Incorporated by reference from Registrant's Current Report on Form 8-K
filed on January 7, 2002.
(23) Incorporated by reference from Registrant's Current Report on Form 8-K
filed on January 9, 2002.
(24) Incorporated by reference from Registrant's Current Report on Form 8-K
filed on January 10, 2002.
(25) Incorporated by reference from Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 2001.
(26) Previously filed with the Registrant's Annual Report on Form 10-K for the
fiscal year ended December 31, 2002.
+ Filed herewith.
++ Management compensation plan.
(b) Reports on Form 8-K.
DATE OF REPORT DESCRIPTION
---------------- -------------
October 15, 2002 Item 5 -- Other Events Exchange Offer
7
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
LORAL SPACE & COMMUNICATIONS LTD.
By: /s/ BERNARD L. SCHWARTZ
---------------------------
Bernard L. Schwartz
Chairman of the Board
and Chief Executive Officer
Dated: April 7, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
/s/ BERNARD L. SCHWARTZ Chairman of the Board and Chief April 7, 2004
------------------------ Executive Officer
Bernard L. Schwartz
/s/ HOWARD GITTIS Director April 7, 2004
------------------
Howard Gittis
/s/ ROBERT B. HODES Director April 7, 2004
--------------------
Robert B. Hodes
/s/ GERSHON KEKST Director April 7, 2004
-----------------
Gershon Kekst
/s/ CHARLES LAZARUS Director April 7, 2004
-------------------
Charles Lazarus
/s/ SALLY MINARD Director April 7, 2004
-----------------
Sally Minard
/s/ MALVIN A. RUDERMAN Director April 7, 2004
-----------------------
Malvin A. Ruderman
/s/ E. DONALD SHAPIRO Director April 7, 2004
---------------------
E. Donald Shapiro
/s/ ARTHUR L. SIMON Director April 7, 2004
-------------------
Arthur L. Simon
/s/ DANIEL YANKELOVICH Director April 7, 2004
-----------------------
Daniel Yankelovich
/s/ ERIC J. ZAHLER Director, President and COO April 7, 2004
-------------------
Eric J. Zahler
/s/ RICHARD J. TOWNSEND Executive Vice President and CFO April 7, 2004
------------------------ (Principal Financial Officer)
Richard J. Townsend
/s/ HARVEY B. REIN Vice President and Controller April 7, 2004
------------------- (Principal Accounting Officer)
Harvey B. Rein
8