-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MCNfq/1EY54lqAFeuOJT+mCsiUPCI8vsLhOvIQKnjegLSzVv53hJ0zasSEa9knig y+3cWpReIXNGxYrZt/lsNQ== 0000950133-97-001934.txt : 19970520 0000950133-97-001934.hdr.sgml : 19970520 ACCESSION NUMBER: 0000950133-97-001934 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORBITAL SCIENCES CORP /DE/ CENTRAL INDEX KEY: 0000820736 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 061209561 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18287 FILM NUMBER: 97606859 BUSINESS ADDRESS: STREET 1: 21700 ATLANTIC BOULEVARD CITY: DULLES STATE: VA ZIP: 20166 BUSINESS PHONE: 7034065000 MAIL ADDRESS: STREET 1: 21700 ATLANTIC BLVD STREET 2: 21700 ATLANTIC BLVD CITY: DULLES STATE: VA ZIP: 20166 FORMER COMPANY: FORMER CONFORMED NAME: ORBITAL SCIENCES CORP II DATE OF NAME CHANGE: 19900212 10-Q 1 ORBITAL SCIENCES CORPORATION FORM 10-Q. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter ended MARCH 31, 1997 ORBITAL SCIENCES CORPORATION Commission file number 0-18287 DELAWARE 06-1209561 - --------------------------------------------- ------------------------------------- (State of Incorporation) (IRS Identification number) 21700 ATLANTIC BOULEVARD DULLES, VIRGINIA 20166 (703) 406-5000 - --------------------------------------------- ------------------------------------- (Address of principal executive offices) (Telephone number)
The registrant has (1) 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 (2) has been subject to such filing requirements for the past 90 days. As of April 30, 1997, 32,109,716 shares of the registrant's common stock were outstanding. 2 PART 1 FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ORBITAL SCIENCES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED; IN THOUSANDS, EXCEPT SHARE DATA)
A S S E T S ----------- MARCH 31, DECEMBER 31, 1997 1996 -------------- ----------------- CURRENT ASSETS: Cash and cash equivalents $29,249 $26,859 Short-term investments, at market 10,022 5,827 Receivables, net 147,381 144,774 Inventories, net 23,459 27,159 Deferred income taxes and other assets 7,723 6,475 --------------- ----------------- TOTAL CURRENT ASSETS 217,834 211,094 PROPERTY, PLANT AND EQUIPMENT, AT COST, LESS ACCUMULATED depreciation and amortization of $71,607 and $68,161, respectively 102,130 102,673 SATELLITE SYSTEMS, AT COST, LESS ACCUMULATED depreciation of $1,593 and $1,373, respectively 27,907 25,189 INVESTMENTS IN AFFILIATES, NET 86,252 86,524 EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED, less accumulated amortization of $16,963 and $15,972, respectively 68,688 69,512 DEFERRED INCOME TAXES AND OTHER ASSETS 12,310 9,720 -------------- ----------------- TOTAL ASSETS $515,121 $504,712 ============== ================= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: Short-term borrowings and current portion of long-term obligations $40,902 $38,519 Accounts payable 29,272 25,789 Accrued expenses 33,698 32,372 Deferred revenue 34,416 30,741 -------------- ----------------- TOTAL CURRENT LIABILITIES 138,288 127,421 LONG-TERM OBLIGATIONS, NET OF CURRENT PORTION 29,346 33,076 OTHER LIABILITIES 14,009 15,523 -------------- ----------------- TOTAL LIABILITIES 181,643 176,020 NON-CONTROLLING INTERESTS IN NET ASSETS OF CONSOLIDATED SUBSIDIARIES (2,356) (1,810) COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY: Preferred Stock, par value $.01; 10,000,000 shares authorized: Series A Special Voting Preferred Stock, one share authorized and outstanding - - Class B Preferred Stock, 10,000 shares authorized and outstanding - - Common Stock, par value $.01; 40,000,000 shares authorized, 32,209,013 and 32,160,598 shares outstanding, after deducting 15,735 shares held in treasury 322 322 Additional paid-in capital 324,034 323,592 Unrealized gains (losses) on short-term investments (6) 14 Cumulative translation adjustment (3,865) (3,681) Retained earnings 15,349 10,255 -------------- ----------------- TOTAL STOCKHOLDERS' EQUITY 335,834 330,502 -------------- ----------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $515,121 $504,712 ============== =================
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. -2- 3 ORBITAL SCIENCES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited; in thousands, except share data)
FOR THE THREE MONTHS ENDED MARCH 31, ------------------------------------ 1997 1996 ------------ ------------ REVENUES $122,112 $104,894 COSTS OF GOODS SOLD 88,434 72,582 ------------ ------------ GROSS PROFIT 33,678 32,312 RESEARCH AND DEVELOPMENT EXPENSES 7,012 6,378 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 19,878 19,265 AMORTIZATION OF EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED 741 797 ------------ ------------ INCOME FROM OPERATIONS 6,047 5,872 NET INVESTMENT INCOME (EXPENSE) 260 (635) EQUITY IN LOSSES OF AFFILIATES (1,268) (2,018) NON-CONTROLLING INTERESTS IN LOSSES OF CONSOLIDATED SUBSIDIARIES 621 257 ------------ ------------ INCOME BEFORE PROVISION FOR INCOME TAXES 5,660 3,476 PROVISION FOR INCOME TAXES 566 348 ------------ ------------ NET INCOME $5,094 $3,128 ============ ============ NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE $0.16 $0.12 SHARES USED IN COMPUTING NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE 32,819,432 27,154,259 ============ ============ NET INCOME PER COMMON SHARE, ASSUMING FULL DILUTION $0.16 $0.12 SHARES USED IN COMPUTING NET INCOME PER COMMON SHARE, ASSUMING FULL DILUTION 32,819,432 31,050,110 ============ ============
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. -3- 4 ORBITAL SCIENCES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
FOR THE THREE MONTHS ENDED MARCH 31, ----------------------------- 1997 1996 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME $5,094 $3,128 ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES: Depreciation and amortization expense 6,461 6,117 Equity in losses of affiliates 1,268 2,018 Non-controlling interests in losses of consolidated subsidiaries (621) (257) Foreign currency translation adjustment (184) (393) CHANGES IN ASSETS AND LIABILITIES: (Increase) decrease in receivables (5,780) (10,410) (Increase) decrease in inventories 3,700 (106) (Increase) decrease in other current assets (1,454) (526) (Increase) decrease in other non-current assets (2,515) (1,736) Increase (decrease) in accounts payable and accrued expenses 4,892 (7,901) Increase (decrease) in deferred revenue 4,201 (1,017) Increase (decrease) in other liabilities (1,514) (2,975) ------------- ------------- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 13,547 (14,058) ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (2,995) (4,040) Investments in satellite systems (1,738) (1,603) Purchases of available-for-sale investment securities (9,454) -- Sales of available-for-sale investment securities 553 8,543 Maturities of available-for-sale investment securities 4,686 -- Investments in affiliates (1,304) (7,174) ------------- ------------- NET CASH USED IN INVESTING ACTIVITIES (10,252) (4,274) ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Short-term borrowings, net of repayments 3,350 12,700 Principal payments on long-term obligations (4,697) (3,452) Net proceeds from issuances of common stock to employees 442 429 ------------- ------------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (905) 9,677 ------------- ------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,390 (8,655) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 26,859 15,317 ------------- ------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $29,249 $6,662 ============= =============
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS. -4- 5 ORBITAL SCIENCES CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1997 AND 1996 (UNAUDITED) BASIS OF PRESENTATION In the opinion of management, the accompanying unaudited interim financial information reflects all adjustments, consisting of normal recurring accruals, necessary for a fair presentation thereof. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the Securities and Exchange Commission ("SEC"). Although the company believes that the disclosures provided are adequate to make the information presented not misleading, these unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the footnotes thereto included in the company's Annual Report on Form 10-K for the year ended December 31, 1996. Operating results for the three-month period ended March 31, 1997 are not necessarily indicative of the results expected for the full year. Orbital Sciences Corporation is hereafter referred to as "Orbital" or the "company." (1) Common Stock and Income Per Share Income per common and common equivalent share ("primary EPS") is calculated using the weighted average number of common and common equivalent shares, to the extent dilutive, outstanding during the periods. Income per common share assuming full dilution ("fully-diluted EPS") is calculated using the weighted average number of common and common equivalent shares outstanding during the periods. Any reduction of less than three percent in the aggregate has not been considered dilutive in the calculation and presentation of income per common share assuming full dilution. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128 ("SFAS No. 128"), "Earnings Per Share." SFAS No. 128 provides new procedures for the computation, presentation and disclosure of primary EPS and fully-diluted EPS, simplifying the calculations and making them more comparable with international accounting standards. Pursuant to SFAS No. 128, the company will adopt the new requirements in the fourth quarter of 1997, restating all prior periods. The company expects that the adoption of SFAS No. 128 will not materially impact 1997 EPS or previously reported amounts. -5- 6 (2) Income Taxes The company has recorded its interim income tax provision based on estimates of the company's effective tax rate expected to be applicable for the full fiscal year. Estimated effective rates recorded during interim periods may be periodically revised, if necessary, to reflect current estimates. (3) Reclassifications Certain reclassifications have been made to the 1996 condensed consolidated financial statements to conform to the 1997 condensed consolidated financial statement presentation. (4) Subsequent Events On May 8, 1997, the company's subsidiary, Orbital Imaging Corporation ("ORBIMAGE"), completed a private placement of 300,100 shares of convertible preferred stock, raising approximately $30,010,000. On that date, Orbital also increased its common equity investment in ORBIMAGE, bringing its total equity invested to approximately $88,000,000. Pursuant to the terms of the sale of the preferred stock, Orbital no longer controls ORBIMAGE's financial and operational affairs and, accordingly, will no longer consolidate ORBIMAGE's financial results. On May 7, 1997, the company borrowed $25,000,000 from a syndicate of six banks under a six-month credit facility. The facility bears interest at approximately 8.25%, and expires on October 24, 1997. -6- 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1997 AND 1996 Statements included in this discussion relating to future revenues, sales, expenses, growth rates, net income, new business, operational performance, schedules, sources and uses of funds, and the level of the company's investment in satellite imaging projects and the ORBCOMM business are forward-looking statements that involve risks and uncertainties. Factors that may cause the actual results, performance or achievements of the company to differ materially from any future results, performance, achievements, or investments expressed or implied by such forward-looking statements include, among other things, general and economic business conditions, launch success, product performance, availability of required capital, market acceptance of new products and technologies and other factors more fully described in Exhibit 99 to this Report on Form 10-Q. The company's products and services are grouped into three business sectors: Space and Ground Infrastructure Systems, Satellite Access Products, and Satellite-Delivered Services. Space and Ground Infrastructure includes Launch Systems, Satellites, Electronics and Sensor Systems, and Ground Systems. The company's Satellite Access Products sector consists of satellite-based navigation and communications products. The company's Satellite-Delivered Services sector includes satellite-based, two-way mobile data communications services and satellite-based imagery services. REVENUES. Orbital's revenues for the three-month periods ended March 31, 1997 and 1996 were $122,112,000 and $104,894,000, respectively. Space and Ground Infrastructure Systems Revenues from the company's Space and Ground Infrastructure Systems totaled $106,199,000 and $81,661,000 for the three months ended March 31, 1997 and 1996, respectively. Revenues from the company's launch systems increased to $29,894,000 in the first quarter of 1997, from $19,317,000 in the first quarter of 1996. The significant increase in revenues in 1997 compared to a year ago is attributable to increased revenues from the company's Taurus launch vehicle program, and from the resumption of production and launch of the company's Pegasus launch vehicle. Additionally, the company generated significantly more revenues in the 1997 first quarter for work performed on the X-34 reusable launch vehicle. During 1997, Orbital has carried out six successful space missions, including five suborbital missions and a successful Pegasus launch from the Canary Islands, Spain. Orbital expects total 1997 launch systems revenues to exceed total 1996 launch systems revenues. -7- 8 For the three months ended March 31, 1997, satellite revenues increased to $30,803,000 from $22,559,000 in the first quarter of 1996. The increase in satellite sales is primarily due to additional revenues generated from new satellite orders received in the second half of 1996. Revenues for the three months ended March 31, 1997 include sales to ORBCOMM Global, L.P. ("ORBCOMM"), a Delaware limited partnership in which Orbital holds a 50% equity interest, of $11,500,000 as compared to first quarter 1996 sales to ORBCOMM of $13,700,000. The company expects revenues from satellites to continue to exceed 1996 revenues on a quarterly basis, throughout the remainder of 1997. Revenues from electronics and sensor systems were approximately $28,066,000 for the three months ended March 31, 1997 as compared to $16,479,000 in the comparable 1996 period. The significant increase in revenues is primarily a result of work performed on defense electronics and transportation management systems orders received during the second half of 1996. Orbital expects sales of electronics and sensor systems to continue to exceed 1996 levels, throughout the remainder of 1997 due to the new orders received during the second half of 1996. Revenues from the company's ground systems products were $17,436,000 in the first quarter of 1997 as compared to $23,306,000 in the 1996 quarter. The 1996 first quarter revenues include approximately $4,500,000 of sales generated by the company's former subsidiary, The PSC Communications Group Inc. ("PSC"); the company sold substantially all the assets of PSC during the fourth quarter of 1996. The remaining slight decrease in ground systems products revenues during the first quarter of 1997 is primarily a result of the company nearing completion of a large defense contract for the Canadian government. The company expects 1997 annual ground systems products revenue to slightly exceed 1996 annual revenues, excluding the revenues attributable to PSC, due to new orders received during the fourth quarter of 1996. Satellite Access Products Revenues from sales of navigation and communications products decreased to $15,646,000 for the 1997 first quarter as compared to $22,768,000 for the comparable 1996 period. The first quarter of 1996 reflected strong sales resulting from the company closing out a large number of orders that could not be completed in the previous quarter (fourth quarter of 1995) due to a shortage of available components. Revenues for the first quarter of 1997 are generally consistent with, or higher than, the immediately preceding two quarters. The company anticipates the introduction of several new navigation and communications products during the remainder of 1997. Should such products achieve anticipated market acceptance, the company expects navigation and communications products revenues to increase from the first quarter 1997 amounts. Satellite-Delivered Services The company's ORBCOMM and ORBIMAGE start-up businesses generated service revenues of approximately $267,000 in the 1997 first quarter as compared to $465,000 in the first quarter of 1996. Significant revenues from either business are not expected until 1998. -8- 9 GROSS PROFIT. Gross profit depends on a number of factors, including the company's mix of contract types and costs incurred thereon in relation to estimated costs. The company's gross profit for the first quarter of 1997 was $33,678,000 as compared to $32,312,000 in the 1996 first quarter. Gross profit margin as a percentage of sales for those periods was approximately 27.6% and 30.8%, respectively. The decreased gross profit margin as a percentage of sales in 1997 is primarily attributable to completing work on certain lower margin launch vehicle contracts and to increased revenues generated from lower margin transportation management systems products. The company expects that its gross profit margin for the remainder of 1997 will be generally consistent with the margin achieved during the first quarter. RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses represent Orbital's self-funded product development activities, and exclude direct customer-funded development. Research and development expenses during the three-month periods ended March 31, 1997 and 1996 were $7,012,000 and $6,378,000, respectively. Research and development expenses in both quarters relate primarily to the development of new or improved navigation and communications products, improved launch vehicles and new satellite initiatives. The company expects its research and development expenditures, on a quarterly basis, for the rest of 1997 to be lower than the first quarter of 1997. Additionally, the company expects total 1997 expenditures to be slightly lower than 1996 expenditures both as a percentage of revenues and in absolute dollars. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and administrative expenses include the costs of marketing, advertising, promotional and other selling expenses as well as the costs of the finance, administrative and general management functions of the company. Selling, general and administrative expenses for the first quarters of 1997 and 1996 were $19,878,000 (or 16.3% of revenues) and $19,265,000 (or 18.4% of revenues), respectively. The decrease in selling, general and administrative expenses as a percentage of revenues during 1997 as compared to 1996 was primarily attributable to substantial revenue growth, particularly in launch vehicles and defense electronics, with only a modest growth in selling, general and administrative expenses. The company expects selling, general and administrative expenses as a percentage of revenues during the remainder of 1997 to be higher than the percentage attained during the first quarter of 1997 but still lower than 1996 levels. INTEREST INCOME AND INTEREST EXPENSE. Net interest income was $260,000 for the three months ended March 31, 1997 as compared to net interest expense of $635,000 in the 1996 first quarter. Interest income for the periods reflects interest earnings on short-term investments. Interest expense in 1997 is primarily for outstanding amounts on Orbital's revolving credit facilities and on other secured and unsecured debt. In 1996, interest expense included interest on the company's convertible debentures, which were converted to common stock in August 1996. Interest expense has been reduced by capitalized interest of $1,313,000 and $1,682,000 in 1997 and 1996, respectively. The -9- 10 company expects net interest expense for the remainder of 1997 to be less than 1996, primarily as a result of the conversion of the convertible debentures in 1996. EQUITY IN EARNINGS (LOSSES) OF AFFILIATES AND NON-CONTROLLING INTERESTS IN CONSOLIDATED SUBSIDIARIES. Equity in earnings (losses) of affiliates and non-controlling interests in (earnings) losses of consolidated subsidiaries for the first quarters of 1997 and 1996 were ($647,000) and ($1,761,000), respectively. These amounts primarily represent (i) elimination of 50% of the profits on sales of infrastructure products to ORBCOMM, (ii) the company's pro rata share of ORBCOMM's and ORBCOMM International Partners L.P.'s current period earnings and losses and (iii) non-controlling shareholders' pro rata share of ORBCOMM USA L.P.'s current period earnings and losses. The company expects ORBCOMM's losses to increase during the remainder of 1997 and further in 1998. As a result, the company expects its share of ORBCOMM Global's losses to increase from 1996 amounts. Based on the terms of the sale of ORBIMAGE preferred stock discussed below, the company will record its share of ORBIMAGE's start-up losses as Equity in Losses of Affiliates beginning in the second quarter of 1997. PROVISION FOR INCOME TAXES. The company recorded an income tax provision of $566,000 and $348,000 for the three month periods ended March 31, 1997 and 1996, respectively. The company records its interim income tax provisions based on estimates of the company's effective tax rate expected to be applicable for the full fiscal year. Estimated effective rates recorded during interim periods may be periodically revised, if necessary, to reflect current estimates. At December 31, 1996, Orbital had approximately $120,000,000 and $3,000,000 of net operating loss and tax credit carryforwards, respectively, which are available to reduce future income tax obligations, subject to certain annual limitations and other restrictions. LIQUIDITY AND CAPITAL RESOURCES The company's growth has required substantial capital to fund both an expanding business base and significant research and development and capital expenditures. The company has funded these requirements to date, and expects to fund its requirements in the future, through cash generated by operations, working capital, loan facilities, asset-based financings, joint venture arrangements, and private and public equity and debt offerings. Additionally, the company has historically made strategic acquisitions of businesses and routinely evaluates potential acquisition candidates. The company expects to continue to pursue potential acquisitions that it believes would enhance its businesses. The company has historically financed its acquisitions, and expects to finance its future acquisitions, through cash on hand, cash generated by operations, the issuance of debt and/or equity securities, and/or asset-based financings. -10- 11 Cash, cash equivalents and short-term investments were $29,249,000 at March 31, 1997, and the company had short-term and long-term debt obligations outstanding of approximately $70,248,000. The outstanding debt relates primarily to advances under the company's line of credit facilities, secured and unsecured notes, and fixed asset financings. Orbital's $20,000,000 unsecured note agreement was amended during the first quarter of 1997 primarily to permit future investments by the company in ORBIMAGE. In connection with this amendment, the interest rate on the note was increased from 11 1/2% to 12% effective March 31, 1997. The company's primary revolving credit facility provides for total borrowings from an international syndicate of six banks ("credit facility bank group") of up to $65,000,000, subject to a defined borrowing base comprised of certain contract receivables. Approximately $5,000,000 of borrowings were outstanding under the facility at March 31, 1997, and the available facility limit was approximately $31,000,000. At March 31, 1997, the average interest rate on outstanding borrowings under this facility was approximately 7.75%. Borrowings are secured by contract receivables and certain other assets. The facility prohibits the payment of dividends and contains certain covenants with respect to the company's working capital, fixed charge ratio, leverage ratio and tangible net worth, and expires in September 1997. The company is currently in discussions with the credit facility bank group to replace the credit facility with a new facility which would include similar terms and provide an increased borrowing capacity. The company (or its subsidiaries) also maintains two additional, smaller revolving credit facilities, under which approximately $29,500,000 was outstanding March 31, 1997. The borrowing capacity of the two additional agreements is approximately $35,000,000. The company's operations provided net cash of approximately $13,500,000 in the first quarter of 1997. The company expects quarterly cash provided by operations during the remainder of 1997 to be significantly less than the amount achieved during the first quarter. During the first quarter, the company invested approximately $1,310,000 in ORBCOMM (consisting solely of capitalized interest costs), incurred $1,738,000 in capital expenditures related to ORBIMAGE, and incurred approximately $2,995,000 in capital expenditures for office equipment and various spacecraft, launch vehicle and other production and test equipment. On May 8, 1997, the company's subsidiary, ORBIMAGE, completed a private placement of 300,100 shares of convertible preferred stock, raising approximately $30,010,000. On that date, Orbital also increased its common equity investment in ORBIMAGE, bringing its total equity to approximately $88,000,000. ORBIMAGE currently expects that it will require approximately $65,000,000 in additional financing to fund fully its current business plan. To the extent some or all of the additional funding can not be raised, Orbital has agreed to provide up to $50,000,000 -11- 12 (up to $30,000,000 by December 31, 1997 and up to $20,000,000 by June 30, 1998) for two different classes of preferred stock. On May 7, 1997, the company borrowed $25,000,000 under a six-month credit facility from the credit facility bank group. The facility bears interest at approximately 8.25%, and expires on October 24, 1997. The company anticipates repaying the loan with proceeds from an expanded revolving credit facility with the same bank group. Orbital expects that its capital needs for the remainder of 1997 will in part be provided by working capital, cash flows from operations, existing and planned credit facilities, customer financings and operating lease arrangements. The company may also consider new debt financings to realign its debt structure and to fund its currently planned operations and capital requirements through 1997. -12- 13 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Not applicable. ITEM 2. CHANGES IN SECURITIES Not applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - A complete listing of exhibits required is given in the Exhibit Index that precedes the exhibits filed with this report. (b) Not applicable. 14 SIGNATURES Pursuant to the requirements 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. ORBITAL SCIENCES CORPORATION DATED: May 14, 1997 By: /s/ David W. Thompson --------------------------------------------- David W. Thompson, President and Chief Executive Officer DATED: May 14, 1997 By: /s/ Jeffrey V. Pirone --------------------------------------------- Jeffrey V. Pirone, Senior Vice President and Principal Financial Officer 15 EXHIBIT INDEX The following exhibits are filed as part of this report.
Exhibit No. Description ----------- ----------- 10.2.4 Fourth Amendment to NWML Note Agreement, dated as of March 31, 1997. 10.15.1 Amendment No. 1 to Restated Master Agreement, restated as of September 12, 1995, by and among the Company, OCC, Teleglobe Inc. and Teleglobe Mobile Partners filed on August 30, 1996. 10.19 Orbital Sciences Corporation 1997 Stock Option and Incentive Plan 11 Statement re: Computation of Earnings Per Share (transmitted herewith). 27 Financial Data Schedule (such schedule is furnished for the information of the Securities and Exchange Commission and is not to be deemed "filed" as part of the Form 10-Q, or otherwise subject to the liabilities of Section 18 of the Securities Exchange Act of 1934) (transmitted herewith). 99 Important Factors Regarding Forward-Looking Statements (transmitted herewith).
EX-10.2.4 2 FOURTH AMENDMENT TO NWML AGREEMENT. 1 EXHIBIT 10.2.4 FOURTH AMENDMENT TO NOTE AGREEMENT THIS FOURTH AMENDMENT to Note Agreement dated as of March 31, 1997 ("Fourth Amendment"), is entered into between Orbital Sciences Corporation, a Delaware corporation (the "Company") and The Northwestern Mutual Life Insurance Company (the "Purchaser"). RECITALS: A. The Company and the Purchaser have heretofore entered into the Note Agreement dated as of June 1, 1995, the First Amendment to Note Agreement dated as of June 30, 1995, the Second Amendment to Note Agreement dated as of March 15, 1996 and the Third Amendment to Note Agreement dated as of July 31, 1996 (as amended, the "Note Agreement"). B. The Company and the Purchaser now desire to further amend, effective on and as of March 31, 1997 (the "Effective Date"), certain of the terms of the Note Agreement. C. In consideration of the Purchaser's agreeing to amend the Note Agreement as set forth herein, the Company has agreed to increase the interest rate on the Notes outstanding under the Note Agreement. D. Capitalized terms used herein shall have the respective meanings ascribed thereto in the Note Agreement unless herein defined or the context shall otherwise require. E. All requirements of law have been fully complied with and all other acts and things necessary to make this Fourth Amendment a valid, legal and binding instrument according to its terms for the purposes herein expressed have been done or performed. NOW, THEREFORE, the Company and the Purchaser, in consideration of good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, do hereby agree as follows: SECTION 1. AMENDMENT. Section 1.1. From and after the Effective date, the Note Agreement shall be and is hereby amended as follows: (i) the references to "11.50%" throughout the Note Agreement, including each of the exhibits thereto, shall be changed to "12.00%"; (ii) the reference to 10.50% in the definition of "Make Whole Amount" contained in Section 8.1 of the Note Agreement shall be changed to 12.00%; (iii) the references to "13.50%" throughout the Note Agreement, including each of the exhibits thereto, shall be changed to "14.00%"; and (iv) the references to "American Space Lines" throughout the Note Agreement, including each of the exhibits thereto, shall be changed to "ORBIMAGE". Section 1.2. Section 5.9 of the Note Agreement is hereby amended in its entirety to read as follows: "Section 5.9. Priority Funded Debt Ratio. The Company will not at any time permit the ratio of Consolidated Priority Funded Debt to Consolidated Tangible Net Worth to exceed .65 to 1.OO." 2 Section 1.3. Section 8.1 of the Note Agreement shall be and is hereby amended as follows: (a) The definition of "Reinvestment Rate" contained within the definition of "Make Whole Amount:" shall be and is hereby amended in its entirety to read as follows: "Reinvestment Rate" shall mean (1) the sum of 2.00%, plus the yield reported on page "USD" of the Bloomberg Financial Markets Services Screen (or, if not available, any other nationally recognized trading screen reporting on-line intraday trading in the United States government Securities) at 11:00 A.M. (New York, New York time) for the United States government Securities having a maturity (rounded to the nearest month) corresponding to the remaining Weighted Average Life to Maturity of the principal of the Notes being prepaid or paid (taking into account the application of such prepayment and payments required by Section 2.1) or (2) in the event that no nationally recognized trading screen reporting on-line intraday trading in the United States government Securities is available, Reinvestment Rate shall mean the sum of 2.00%, plus the arithmetic mean of the yields for the two columns under the heading "Week Ending" published in the Statistical Release under the caption "Treasury Constant Maturities" for the maturity (rounded to the nearest month) corresponding to the Weighted Average Life to Maturity of the principal of the Notes being prepaid or paid (taking into account the application of such prepayment payments required by Section 2.1). If no maturity exactly corresponds to such Weighted Average Life to Maturity, yields for the two published maturities most closely corresponding to such Weighted Average Life to Maturity shall be calculated pursuant to the immediately preceding sentence and the Reinvestment Rate shall be interpolated or extrapolated from such yields on a straight-line basis, rounding in each of such relevant periods to the nearest month. For the purposes of calculating the "Reinvestment Rate", the most recent Statistical Release published prior to the date of determination of the Make-Whole Amount shall be used: (b) Clause (d) of the definition of "Restricted Investments" shall be and is hereby amended in its entirety to read as follows: Investments made by the Company (i) after the Closing Date in connection with the development and growth of the business of ORBCOMM Development, and (ii) after December 31, 1996 in connection with the formation and development of the business of ORBIMAGE, provided that the aggregate amount of such additional Investments described in clauses (i) and (ii) shall not exceed $75,000,000, and provided further that the amount of such additional Investments described in clause (ii) shall not exceed $55,000,000. SECTION 2. WAIVER. The Purchaser hereby waives from and after the Effective Date any Default or Event of Default arising under Section 5.13(c) of the Note Agreement arising or resulting from the sale by the Company of preferred shares of ORBIMAGE to third party purchasers. 2 3 SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Section 3.1. To induce the Purchaser to execute and deliver this Fourth Amendment, the Company represents and warrants to the Purchaser (which representations shall survive the execution and delivery of this Fourth Amendment) that: (a) this Fourth Amendment has been duly authorized, executed and delivered by it and this Fourth Amendment constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally; (b) the Note Agreement, as amended by this Fourth Amendment, constitutes the legal, valid and binding obligation, contract and agreement of the Company enforceable against it in accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally; (c) the execution, delivery and performance by the Company of this Fourth Amendment (i) has been duly authorized by all requisite corporate action and, if required, shareholder action, (ii) does not require the consent or approval of any governmental or regulatory body or agency, and (iii) will not (A) violate (1) any provision of law, statute, rule or regulation or its certificate of incorporation or bylaws, (2) any order of any court or any rule, regulation or order of any other agency or government binding upon it, or (3) any provision of any material indenture, agreement or other instrument to which it is a party or by which its properties or assets are or may be bound, or (B) result in a breach or constitute (alone or with due notice or lapse of time or both) a default under any indenture, agreement or other instrument referred to in clause (iii)(A)(3) of this Section 3.1(c); and (d) as of the date hereof and after giving effect to this Fourth Amendment, no Default or Event of Default has occurred which is continuing. SECTION 4. CONDITIONS TO EFFECTIVENESS OF FOURTH AMENDMENT. Section 4.1. This Fourth Amendment shall not become effective until, and shall become effective when, each and every one of the following conditions shall have been satisfied: (a) executed counterparts of this Fourth Amendment, duly executed by the Company and the Purchaser, shall have been delivered to the Purchaser; (b) the Purchaser shall have received a new Note in the form of Exhibit A hereto duly executed by the appropriate officer of the Company which reflects the amendment to the interest rate set forth in Section 1.1 hereof; and (c) the representations and warranties of the company set forth in Section 3 hereof shall be true and correct on and with respect to the date hereof. Upon receipt of all of the foregoing, this Fourth Amendment shall on the Effective Date become effective. SECTION 5. MISCELLANEOUS. Section 5.1. Except as modified and expressly amended by this Fourth Amendment, the Note Agreement is in all respects ratified, confirmed and approved and all of the terms, provisions and conditions thereof shall be and remain in full force and effect. 3 4 Section 5.2. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Fourth Amendment may refer to the Note Agreement without making specific reference to this Fourth Amendment but nevertheless all such references shall include this Fourth Amendment unless the context otherwise requires. Section 5.3. This Fourth Amendment shall be governed by and construed in accordance with the laws of the State of Illinois. Section 5.4. This Fourth Amendment may be executed and delivered in any number of counterparts, each of such counterparts constituting an original, but all together only one Fourth Amendment. IN WITNESS WHEREOF, the Company and the Purchaser have caused this instrument to be executed, all as of the day and year first above written. ORBITAL SCIENCES CORPORATION By: --------------------------------- Accepted and Agreed to: THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY By: --------------------------------- 4 5 EXHIBIT A (To Fourth Amendment) ORBITAL SCIENCES CORPORATION 12.00% Senior Note Due June 14, 2001 No. R-3 December 15, 1996 ORBITAL SCIENCES CORPORATION, a Delaware corporation (the "Company"), for value received, hereby promises to pay to THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY or registered assigns on the fourteenth day of June, 2001 the principal amount of TWENTY MILLION DOLLARS ($20,000,000) and to pay interest (computed on the basis of a 360-day year of twelve 30-day months) on the principal amount from time to time remaining unpaid hereon at the rate of 12.00% per annum from the date hereof until maturity, payable semiannually on the fourteenth of June and December in each year (commencing on December 14, 1995) and at maturity. The Company agrees to pay interest on overdue principal (including any overdue required or optional prepayment of principal) and premium, if any, and (to the extent legally enforceable) on any overdue installment of interest, at the rate Overdue Rate after the due date, whether by acceleration or otherwise, until paid. "Overdue Rate" shall mean the lesser of (a) the maximum interest rate permitted by law and (b) the greater of (1) 14.00% per annum and (2) the rate which Morgan Guaranty Trust Company of New York, New York City, New York, announces from time to time as its prime lending rate as in effect from time to time, plus 2.00%. Both the principal hereof and interest hereon are payable at the principal office of the Company in Dulles, Virginia in coin or currency of the United States of America at which the time of payment shall be legal tender for the payment of public and private debts. If any amount of principal, premium, if any, or interest on or in respect of this Note becomes due and payable on any date which is not a Business Day, such amount shall be payable on the immediately preceding Business Day. "Business Day" means any day other than a Saturday, Sunday or other day on which banks in Dulles, Virginia or New York, New York are required by law to close or are customarily closed. This Note is one of the 12.00% Senior Notes due June 14, 2001 (the "Note") of the Company in the aggregate principal amount of $20,000,000 issued or to be issued under and pursuant to the terms and provisions of the Note Agreement dated as of June 1, 1995 as amended by the First Amendment dated as of June 1, 1995, the Second Amendment dated as of March 15, 1996, Third Amendment dated as of July 31, 1996, and the Fourth Amendment dated as of March 31, 1997 (collectively, the "Note Agreement"), entered into by the Company with the original Purchaser therein referred to and this Note and the holder hereof are entitled equally and ratably with the holders of all other Notes outstanding under the Note Agreement to all the benefits provided for thereby or referred to therein. Reference is hereby made to the Note Agreement for a statement of such rights and benefits. 5 6 This Note and the other Notes outstanding under the Note Agreement may be declared due prior to their expressed maturity date and certain prepayments are required to be made thereon, all in the events, on the terms and in the manner and amounts as provided in the Note Agreement. The Notes are not subject to prepayment or redemption at the option of the Company prior to their expressed maturity dates except on the terms and conditions and in the amounts and with the premium, if any, set forth in the Note Agreement. This Note is registered on the books of the Company and is transferable only by surrender thereof at the principal office of the Company duly endorsed or accompanied by a written instrument of transfer duly executed by the registered holder of this Note or its attorney duly authorized in writing. Payment of or on account of principal, premium, if any, and interest on this Note shall be made only to or upon the order in writing of the registered holder. This Note and said Note Agreement are governed by and construed in accordance with the laws of Illinois, including all matters of construction, validity and performance. ORBITAL SCIENCES CORPORATION By: --------------------------------- Document No. 58707 6 EX-10.15.1 3 AMENDMENT NO.1 TO RESTATED MASTER AGREEMENT. 1 EXHIBIT 10.15.1 AMENDMENT NO. 1 TO RESTATED MASTER AGREEMENT This Amendment No. 1 to the Restated Master Agreement ("Amendment No. 1") is made and entered into this 5th day of February 1997 by and among Orbital Sciences Corporation ("Orbital"), Orbital Communications Corporation ("ORBCOMM"), Teleglobe Inc. ("Teleglobe") and Teleglobe Mobile Partners ("Teleglobe Mobile"). W I T N E S S E T H WHEREAS, Orbital, ORBCOMM, Teleglobe and Teleglobe Mobile previously entered into a Restated Master Agreement dated as of September 12, 1995 (the "Restated Master Agreement"); and WHEREAS, Orbital, ORBCOMM, Teleglobe and Teleglobe Mobile desire to amend and modify the Restated Master Agreement. NOW, THEREFORE, the parties agree as follows: SECTION 1. Terms used but not otherwise defined herein shall have the meanings assigned thereto in the Restated Master Agreement. SECTION 2. Section 4.1(d) of the Restated Master Agreement is hereby amended to replace the number "750,000" appearing therein with the number "900,000". IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to the Restated Master Agreement as of the day and year first above written. ORBITAL SCIENCES CORPORATION By: /s/ BRUCE W. FERGUSON ------------------------------------ Name: Bruce W. Ferguson Title: Executive Vice President and General Manager/Communications and Information Systems Group 2 ORBITAL COMMUNICATIONS CORPORATION By: /s/ ALAN L. BARKER ------------------------------------ Name: Alan L. Parker Title: President TELEGLOBE INC. By: /s/ CLAUDE SEGUIN ------------------------------------ Name: Claude Seguin Title: Executive Vice President, Finance and Corporate Development and Chief Financial Officer TELEGLOBE MOBILE PARTNERS By: Teleglobe Mobile Investment Inc., its Managing Partner By: /s/ CLAUDE SEGUIN ------------------------------------ Name: Claude Seguin Title: Chairman of the Board and Chief Executive Officer 2 EX-10.19 4 STOCK OPTION AND INCENTIVE PLAN. 1 EXHIBIT 10.19 ORBITAL SCIENCES CORPORATION 1997 STOCK OPTION AND INCENTIVE PLAN 1. PURPOSE OF PLAN The purpose of this 1997 Stock Option and Incentive Plan (the "Plan") is to advance the interests of Orbital Sciences Corporation and its stockholders by enabling Orbital and Participating Companies (as defined below) to attract and retain highly talented employees, directors, consultants and advisers who are in a position to make significant contributions to the success of Orbital, to reward them for their contributions to the success of Orbital, and to encourage them, through stock ownership, to increase their proprietary interest in Orbital and their personal interest in its continued success and progress. The Plan provides for the award of Orbital stock options and Orbital common stock. Options granted pursuant to the Plan may be incentive or nonstatutory stock options. Options granted pursuant to the Plan shall be presumed to be nonstatutory options unless expressly designated as incentive options at the time of grant. 2. DEFINITIONS For the purposes of this Plan and related documents, the following definitions apply: "Award Agreement" means the stock option agreement, restricted stock agreement or other written agreement between Orbital and a Grantee that evidences and sets out the terms and conditions of a Grant. "Board" means the Board of Directors of the Company. "Committee" means a committee of, and designated from time to time by resolution of the Board, which shall consist of no fewer than two members of the Board, none of whom shall be an officer or other salaried employee of the Company or any affiliate, and each of whom shall qualify in all respects as a "non-employee director" within the meaning of Rule 16b-3 under the Exchange Act or any successor rule or regulation. Commencing on the Effective Date, and until such time as the Board shall determine otherwise, the Committee shall be the Human Resources and Nominating Committee of the Board. "Company" or "Orbital" means Orbital Sciences Corporation, a Delaware corporation, or any successor thereof. "Effective Date" means January 24, 1997. "Exchange Act" means the Securities Exchange Act of 1934, as amended. 2 "Fair Market Value" means the closing sale price of Stock on the national securities exchange on which the Stock is then principally traded or, if that measure of price is not available, on a composite index of such exchanges or, if that measure of price is not available, in a national market system for securities on the date of the option grant (or such other date as is specified herein). In the event that there are no sales of Stock on any such exchange or market on date of the option grant (or such other date as is specified herein), the fair market value of Stock on the date of the grant (or such other date as is specified herein) shall be deemed to be the closing sales price on the next preceding day on which Stock was sold on any such exchange or market. In the event that the Stock is not listed on any such market or exchange on the applicable date, a reasonable valuation of the fair market value of the Stock on such date shall be made by the Board. "Grant" means an award of an option or Restricted Stock under the Plan. "Grantee" means a person who receives or holds an option or Restricted Stock under the Plan. "I.R.C." means the Internal Revenue Code of 1986, as it may be amended from time to time. "Incentive Option" means any option granted under the Plan intended to satisfy the requirements under I.R.C. Section 422(b) as an incentive stock option. "Nonstatutory Option" means any option granted under the Plan that does not qualify as an Incentive Option. "Old Option Plans" shall mean Orbital's 1990 Stock Option Plan and Orbital's 1990 Stock Option Plan for Non-Employee Directors. "Option Termination Date" is defined in Section 11(c) below. "Outside Director" means a member of the Board who is not an officer or employee of the Company. "Parent" means a parent corporation as defined in I.R.C. Section 424(e). "Participating Company" means the Company, any Parent of the Company, and any subsidiary (as defined in Rule 405 under the Securities Act of 1933, as amended) of the Company or its Parent. "Plan" means this 1997 Stock Option and Incentive Plan. "Restricted Stock" means shares of Stock awarded to a Grantee pursuant to Section 13 hereof. 2 3 "Stock" means shares of the Company's authorized Common Stock, $.01 par value per share. "Subsidiary" means a subsidiary corporation as defined in I.R.C. Section 424(f). "Terminating Transaction" means any of the following events: (a) the dissolution or liquidation of the Company; (b) a reorganization, merger or consolidation of the Company with one or more other persons in which the Company is not the surviving corporation or becomes a subsidiary of another corporation other than a corporation that was a Participating Company immediately prior to such event; (c) a sale of substantially all the Company's assets to a person or entity other than a corporation that was a Participating Company immediately prior to such event; or (d) a person (or persons acting as a group or otherwise in concert) owning equity securities of the Company that represent a majority or more of the aggregate voting power of all outstanding equity securities of the Company. As used herein or elsewhere in this Plan, the word "person" shall mean an individual, corporation, partnership, association or other person or entity, or any group of two or more of the foregoing that have agreed to act together. "Total Disability" means a "total and permanent disability" as defined in I.R.C. Section 22(e)(3). 3. ADMINISTRATION OF PLAN (a) Administration by Board. The Plan shall be administered by the Board. The Board shall have authority, not inconsistent with the express provisions of the Plan, to: (i) award Grants consisting of options or Restricted Stock, or both, to such eligible persons as the Board may select; (ii) determine the timing of Grants and the number of shares of Stock subject to each Grant; (iii) determine the terms and conditions of each Grant, including whether an option is an Incentive Option or a Nonstatutory Option (consistent with the requirements of the I.R.C.) and the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting or forfeiture of a Grant; (iv) adopt such rules and regulations as the Board may deem necessary or appropriate to carry out the purposes of the Plan; and (v) interpret the provisions of the Plan and of any Grants made hereunder and decide any questions and settle all controversies and disputes that may arise in connection with the Plan. 3 4 All decisions, determinations, interpretations or other actions by the Board with respect to the Plan shall be final, conclusive and binding on all persons, including the Company, Participating Companies and Grantees and their respective legal representatives, their successors in interest and permitted assigns and upon all other persons claiming by, through, under or against any of them. (b) Administration and Delegation by Committee. The Board, in its sole discretion, may delegate some or all of its powers with respect to the Plan to a Committee (in which case references to the Board in this Plan shall be deemed to refer to the Committee, where appropriate) except for interpreting or making changes to Section 9 or Section 11(b) and except with respect to any grants to directors of the Company under Sections 8 and 13. The Committee, in its sole discretion, may delegate to the Chairman, the President and the Chief Executive Officer, or any of them, while any such officer is a member of the Board, authority to award Grants under the Plan. Such authority shall be on such terms and conditions, and subject to such limitations, as the Committee shall specify in its delegation of authority. Except to the extent otherwise specified by the Committee in such delegation, the delegated authority to grant awards of options and Restricted Stock shall include the power to: (i) award Grants consisting of options or Restricted Stock, or both, to such eligible persons as the authorized officer may select; (ii) determine the timing of Grants and the number of shares of Stock subject to each award; and (iii) determine the terms and conditions of each Grant, including whether an option is an Incentive Option or a Nonstatutory Option (consistent with the requirements of the I.R.C.) and the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting or forfeiture of a Grant. Except to the extent otherwise specified by the Committee in such delegation, the authority so delegated shall be in addition to, and not in lieu of, the authority of the Committee to make awards under the Plan. 4. SHARES SUBJECT TO THE PLAN (a) Availailability. Subject to adjustment as provided in Section 4(c) below, the maximum aggregate number of shares of Stock available for issuance under the Plan shall be 1,600,000. (b) Reavailability of Options; Stock to be Delivered. If any Stock covered by a Grant is not purchased or is forfeited, or if a Grant otherwise terminates without delivery of any Stock subject thereto, then the number of shares of Stock so terminated or forfeited shall again be 4 5 available for making Grants under the Plan. In the event that Stock that was previously issued by the Company is reacquired by the Company as part of the consideration received (in accordance with Section 12(b) below) upon the subsequent exercise of an option, such reacquired Shares shall again be available for the granting of options hereunder. Stock delivered under the Plan shall be authorized but unissued shares or, at the Board 's discretion, previously issued Stock acquired by the Company and held in its treasury. No fractional shares of Stock shall be delivered under the Plan. (c) Changes in Stock. In the event of a stock dividend, stock split or combination of shares, exchange of shares, distribution payable in capital stock, recapitalization or other change in Orbital's capital stock, the number and kind of shares of Stock subject to Grants then outstanding or subsequently awarded under the Plan, the exercise price of any outstanding option, the maximum number of shares of Stock that may be delivered under the Plan, and other relevant provisions shall be appropriately adjusted by the Board, so that the proportionate interest of the Grantee immediately following such event shall, to the extent practicable, be the same as immediately before such event. 5. EFFECTIVE DATE. The Plan shall be effective as of the Effective Date, subject to approval of the Plan within one year of the Effective Date by Orbital's shareholders. Upon approval of the Plan by the stockholders of Orbital as set forth above, all Grants made under the Plan on or after the Effective Date shall be fully effective as if Orbital's stockholders had approved the Plan on the Effective Date. If the stockholders fail to approve the Plan within one year of the Effective Date, any Grants made hereunder shall be null and void and of no effect. 6. AWARD AGREEMENT Each Grant pursuant to the Plan shall be evidenced by an Award Agreement, to be executed by Orbital and by the Grantee, in such form or forms as the Board shall from time to time approve. Each Award Agreement evidencing a Grant of options shall specify whether such options are intended to be Nonstatutory Options or Incentive Options. 7. OPTION EXERCISE PRICE The option exercise price for shares of Stock to be issued under the Plan shall be the Fair Market Value of the Stock on the Grant date (or 110% of the Fair Market Value in the case of an Incentive Option granted to a ten-percent shareholder). 5 6 8. DISCRETIONARY OPTION GRANTS. Grants may be made under the Plan to any employee or director of any Participating Company as the Board shall determine and designate from time to time. Grants of options may be made under the Plan to any consultant or adviser to any Participating Company whose participation in the Plan is determined by the Board to be in the best interests of the Company and is so designated by the Board. Notwithstanding the foregoing, grants to persons who are not employees of the Company or any Parent or Subsidiary of the Company shall not be Incentive Options. 9. OUTSIDE DIRECTOR OPTION GRANTS (a) Automatic Grants. On January 2 of each year, each Outside Director shall automatically be awarded a Grant of a Nonstatutory Option to purchase 3,000 shares of Stock. (b) Grants in Lieu of Annual Fee. Each Outside Director shall be entitled to receive a Nonstatutory Option to purchase a specified number of shares of Stock in lieu of his or her annual Board retainer fee. Such specified number (i) shall be calculated by the Chief Financial Officer of the Company, using a Black-Scholes (or other generally accepted) valuation method based on the Fair Market Value of the Stock on January 15 of the applicable year (or the next business day, if January 15 falls on a weekend), assuming a ten-year option term and (ii) shall be adjusted upward by 10% to take into account the one-year vesting term. The exercise price of such option shall be equal to the Fair Market Value of Shares on January 15 (or the next business day, if January 15 falls on a weekend), which shall also be the Grant date. Any Outside Director desiring to receive an option in lieu of cash shall notify the Company of this election, which shall be irrevocable, by submitting a written notice to the Corporate Secretary in accordance to procedures as determined by the Board. 10. LIMITATIONS ON GRANTS (a) Limitation on Shares of Stock Subject to Grants. The maximum number of shares of Stock subject to Options that can be awarded under the Plan to any person eligible for a Grant under Section 8 hereof is 750,000 shares of Stock during the first ten (10) calendar years of the Plan, and 100,000 per year thereafter. The "per individual" limitations described in this paragraph shall be construed and applied consistent with the rules and regulations under I.R.C. Section 162(m). (b) Limitations on Incentive Options. Incentive Options may only be granted to employees of the Company or any Parent or Subsidiary of the Company. 6 7 11. VESTING AND TERMINATION OF OPTIONS (a) Vesting of Discretionary Options. Subject to the other provisions of this Section 11, Options granted pursuant to Section 8 shall vest and become exercisable at such time and in such installments as the Board shall provide in each individual Award Agreement. Notwithstanding the foregoing, the Board may, in its sole discretion, accelerate the time at which all or any part of an option may be exercised. (b) Vesting of Outside Director Options. Subject to the other provisions of this Section 11, options granted under Section 9 shall become exercisable as to 100% of the Stock covered thereby on the first anniversary of the Grant date. (c) Termination of Options. All options shall expire and terminate on such date as the Board shall determine ("Option Termination Date"), which in no event shall be later than ten (10) years from the date such option was granted. In the case of an Incentive Option granted to a ten-percent stockholder, the option shall not be exercisable after the expiration of five (5) years from the date such option was granted. Upon termination of an option or portion thereof, the Grantee shall have no further right to purchase Stock pursuant to such option. (d) Termination of Employment or Service. (i) Termination of Employment or Directorship. Upon the termination of the employment or directorship of a Grantee with a Participating Company for any reason other than for "cause" (pursuant to Section 14 below) or by reason of death or Total Disability, all options that are not exercisable shall terminate on the employment/directorship termination date. Options that are exercisable on the employment/directorship termination date shall continue to be exercisable for (A) six (6) months following the employment/directorship termination date (in the case of Nonstatutory Options), (B) three (3) months following the employment termination date (in the case of Incentive Options), or (C) the Option Termination Date, whichever occurs first. A Grantee who is an employee or director of a Participating Company shall be deemed to have incurred a termination for purposes of this Section 11 (d)(i) if such Participating Company ceases to be a Participating Company, unless such Grantee is an employee, director, consultant or adviser of any other Participating Company. (ii) Service Termination. In the case of an optionee who is not an employee or director of any Participating Company, provisions relating to the exercisability of options following termination of service shall be specified in the award. If not so specified, all options held by such optionee that are not then exercisable shall terminate upon termination of service for any reason. Unless such termination was for "cause" (pursuant to Section 14 below), options that are exercisable on the date the optionee's service as a consultant or adviser terminates shall continue to be exercisable for a period of six (6) months following the service termination date (as defined in a consulting or similar agreement or as determined by the Board) or the Option Termination Date, whichever occurs first. 7 8 (e) Rights in the Event of Death. In the event that the employment and/or directorship of an optionee with a Participating Company is terminated by reason of death, all options that are not exercisable shall terminate on the date of death. Options that were exercisable on the date prior to the optionee's death may be exercised by the optionee's executor or administrator or by the person or persons to whom the option is transferred by will or the applicable laws of descent and distribution, at any time within the one-year period (or such longer period as the Board may determine prior to the expiration of such one-year period) beginning with the date of the optionee's death, but in no event beyond the Option Termination Date. (f) Rights in the Event of Total Disability. In the event that the employment and/or directorship of an optionee with a Participating Company is terminated by reason of Total Disability, all options that are not exercisable shall terminate on the employment/directorship termination date. Options that were exercisable on the employment/directorship termination date may be exercised at any time within the one-year period (or such longer period as the Board may determine prior to the expiration of such one-year period) beginning with the commencement of the optionee's Total Disability (as determined by the Board) but in no event beyond the Option Termination Date. (g) Leave of Absence. An approved leave of absence shall not constitute a termination of employment under the Plan. An approved leave of absence shall mean an absence approved pursuant to the policy of a Participating Company for military leave, sick leave, or other bona fide leave, not to exceed ninety (90) days or, if longer, as long as the employee's right to re-employment is guaranteed by contract, statute or the policy of a Participating Company. Notwithstanding the foregoing, in no event shall an approved leave of absence extend an option beyond the Option Termination Date. 12. EXERCISE OF OPTIONS; NON-TRANSFERABILITY (a) Exercise of Options. Vested options may be exercised, in whole or in part, by giving written notice of exercise to the Company, which notice shall specify the number of shares of Stock to be purchased and shall be accompanied by payment in full of the purchase price in accordance with Section 12(b) below and the full amount of any federal and state withholding and other employment taxes applicable to such person as a result of such exercise. No shares of Stock shall be issued until full payment of the purchase price and applicable withholding tax has been made. Until the issuance of stock certificates, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to optioned shares notwithstanding the exercise of the option. (b) Payment. Full payment of the purchase price for the Stock as to which an option is being exercised shall be made (i) in United States dollars in cash or by check in a form satisfactory to the Company, (ii) at the Grantee's election, and subject to discretion of the Board, through delivery of Shares having a Fair Market Value on the day immediately preceding the day notice of exercise is received by the Company equal to the cash exercise price of the option, (iii) 8 9 in accordance with a so-called cashless exercise plan established with a securities brokerage firm, or (iv) by any combination of the permissible forms of payment. (c) Non-Transferability of Options. Except as the Board may otherwise determine, no option may be transferred other than by will or by the laws of descent and distribution, and during an optionee's lifetime an option may be exercised only by the Grantee. 13. RESTRICTED STOCK (a) Grant of Restricted Stock. The Board may from time to time grant Restricted Stock to certain employees and directors of a Participating Company, subject to such restrictions, conditions and other terms, if any, as the Board may determine. (b) Restrictions. At the time a Grant of Restricted Stock is made, the Board may establish a period of time (the "Restricted Period") during which a Grantee's right to all or a portion of such Restricted Stock shall vest over time, subject to certain terms and conditions. Each Grant of Restricted Stock may be subject to a different Restricted Period. The Board may, in its sole discretion, at the time a Grant of Restricted Stock is made, prescribe forfeiture or vesting conditions in addition to or other than the expiration of the Restricted Period. The Board also may, in its sole discretion, shorten or terminate the Restricted Period or waive any other restrictions applicable to all or a portion of the Restricted Stock. Restricted Stock may not be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period or prior to the satisfaction of any other restrictions prescribed by the Board with respect to such Restricted Stock. (c) Restricted Stock Certificates. Orbital shall issue, in the name of each Grantee to whom Restricted Stock has been granted, stock certificates representing the total number of shares of Restricted Stock granted to the Grantee. The Secretary of Orbital shall hold such certificates for the Grantee's benefit until such time as the restrictions lapse or the Restricted Stock is forfeited to Orbital. (d) Rights of Holders of Restricted Stock. Unless the Board otherwise provides in an Award Agreement, holders of Restricted Stock shall have the right to vote such Stock and the right to receive any dividends declared or paid with respect to such Stock. The Board may provide that any dividends paid on Restricted Stock must be reinvested in Stock, which may or may not be subject to the same vesting conditions and restrictions applicable to such Restricted Stock. All distributions, if any, received by a Grantee with respect to Restricted Stock as a result of any stock split, stock dividend, combination of shares, or other similar transaction shall be subject to the restrictions applicable to the original Grant. (e) Termination of Employment. Upon termination of the employment/directorship of a Grantee with Orbital, other than by reason of death or Total Disability, any Restricted Stock held by such Grantee that has not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited, unless the Board, in its 9 10 discretion, determines otherwise. Upon forfeiture of Restricted Stock, the Grantee shall have no further rights with respect to such Grant, including but not limited to any right to vote Restricted Stock or any right to receive dividends with respect to shares of Restricted Stock. (f) Rights in the Event of Total Disability or Death. The rights of a Grantee with respect to Restricted Stock in the event such Grantee terminates employment/directorship with Orbital by reason of Total Disability or death shall be determined by the Board at the time of Grant. (g) Delivery of Stock and Payment Therefor. Upon the expiration or termination of the Restricted Period and the satisfaction of any other conditions prescribed by the Board, the restrictions applicable to shares of Restricted Stock shall lapse, and, upon payment by the Grantee to Orbital, in cash or by check, of the aggregate par value of the shares of Stock represented by such Restricted Stock, a stock certificate for such shares shall be delivered, free of all such restrictions, to the Grantee or the Grantee's beneficiary or estate, as the case may be. 14. FORFEITURE CONDITIONS. The Board may provide in an Award Agreement for conditions of forfeiture for "cause" of any Grantee's rights with respect to a Grant. "Cause" shall include engaging in an activity that is detrimental to the Company including, without limitation, criminal activity, failure to carry out the duties assigned to the Grantee as a result of incompetence or willful neglect, conduct casting such discredit on the Company as in the opinion of the Board justifies termination or forfeiture of the Grant, or such other reasons, including the existence of a conflict of interest, as the Board may determine. "Cause" is not limited to events that have occurred prior to the Grantee's termination of service, nor is it necessary that the Board's finding of "cause" occur prior to such termination. If the Board determines, subsequent to a Grantee's termination of service but prior to the exercise of any rights under a Grant, that either prior or subsequent to the Grantee's termination the Grantee engaged in conduct that would constitute "cause," then the rights with respect to a Grant shall be forfeited. 15. COMPLIANCE WITH SECURITIES LAWS. (a) The delivery of Stock upon the exercise of an option or lapse of a Restricted Period shall be subject to compliance with (i) applicable federal and state laws and regulations, (ii) all applicable listing requirements of any national securities exchange or national market system on which the Stock is then listed or quoted, and (iii) Company counsel's approval of all other legal matters in connection with the issuance and delivery of such Stock. If the sale of Stock has not been registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the option or receipt of Restricted Stock, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of such Act and may require that the certificates evidencing such Stock bear an appropriate legend restricting transfer. 10 11 (b) It is the intent of the Company that Grants pursuant to the Plan and the exercise of options granted hereunder will qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action by the Board does not comply with the requirements of Rule 16b-3 in respect of an employee or director subject to Section 16(b) of the Exchange Act, it shall be deemed inoperative to the extent permitted by law and deemed advisable by the Board, and shall not affect the validity of the Plan. In the event that Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify this Plan in any respect necessary to satisfy the requirements of, or take advantage of any features of the revised exemption or its replacement. 16. MERGERS, etc. (a) Effect on Options and Plan. Except as otherwise provided herein, all options outstanding under the Plan shall accelerate and become immediately exercisable for a period of fifteen days (or such longer or shorter period as the Board may prescribe) immediately prior to the scheduled consummation of a Terminating Transaction, which exercise shall be (i) conditioned upon the consummation of the Terminating Transaction and (ii) effective only immediately before the consummation of such Terminating Transaction. Upon consummation of any such event, the Plan and all outstanding but unexercised options shall terminate. Notwithstanding the foregoing, to the extent provision is made in writing in connection with such Terminating Transaction, for the continuation of the Plan and the assumption of options under the Plan theretofore granted, or for the substitution for such options of new options covering the stock of a successor company, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kinds of shares or units and exercise prices, then the Plan and options theretofore granted shall continue in the manner and under the terms so provided, and the acceleration and termination provisions set forth in the first two sentences of this Section 16(a) shall be of no effect. The Company shall send written notice of a Terminating Transaction to all individuals who hold options not later than the time at which the Company gives notice thereof to its stockholders. b. Effect on Restricted Stock. All outstanding shares of Restricted Stock shall be deemed to have vested, and all restrictions and conditions applicable to such shares of Restricted Stock shall be deemed to have lapsed immediately prior to the occurrence of a Terminating Transaction. 17. TAXES The Board shall make such provisions and take such steps as it deems necessary or appropriate for the withholding of any federal, state, local and other tax required by law to be withheld with respect to the grant or exercise of options, or the vesting of or other lapse of restrictions applicable to Restricted Stock, or with respect to the disposition of Stock acquired pursuant to the Plan, including, but without limitation, the deduction of the amount of any such 11 12 withholding tax from any compensation or other amounts payable to a Grantee, or requiring a Grantee (or the optionee's beneficiary or legal representative), as a condition of a Grant or exercise of an option or receipt of Restricted Stock, to pay to the appropriate Participating Company any amount required to be withheld, or to execute such other documents as the Board deems necessary or desirable in connection with the satisfaction of any applicable withholding obligation. 18. EMPLOYMENT RIGHTS Neither the adoption of the Plan nor the making of any Grants shall confer upon any Grantee any right to continue as an employee or director of, or consultant or adviser to, any Participating Company or affect in any way the right of any Participating Company to terminate them at any time. Except as specifically provided by the Board in any particular case, the loss of existing or potential profit in Grants under this Plan shall not constitute an element of damages in the event of termination of the relationship of a Grantee even if the termination is in violation of an obligation of the Company to the Grantee by contract or otherwise. 19. AMENDMENT OR TERMINATION OF PLAN (a) Neither adoption of the Plan nor the making of any Grants shall affect the Company's right to make awards to any person that is not subject to the Plan, to issue to such persons Stock as a bonus or otherwise, or to adopt other plans or arrangements under which Stock may be issued. (b) The Board may at any time discontinue granting awards under the Plan. With the consent of the Grantee, the Board may at any time cancel an existing Grant in whole or in part and make any other Grant for such number of shares as the Board specifies. The Board may at any time, prospectively or retroactively, amend the Plan or any outstanding Grant for the purpose of satisfying the requirements of I.R.C. Section 422 or of any changes in applicable laws or regulations or for any other purpose that may at the time be permitted by law, or may at any time terminate the Plan as to further grants of awards, but no such amendment shall materially adversely affect the rights of any Grantee (without the Grantee's consent) under any outstanding Grant. (c) In the Board's discretion, the Board may, with an optionee's consent, substitute Nonstatutory Options for outstanding Incentive Options, and any such substitution shall not constitute a new option grant for the purposes of the Plan, and shall not require a revaluation of the option exercise price for the substituted option. Any such substitution may be implemented by an amendment to the applicable option agreement or in such other manner as the Board in its discretion may determine. 12 13 20. GENERAL PROVISIONS (a) Titles and Headings. Titles and headings of sections of the Plan are for convenience of reference only and shall not affect the construction of any provision of the Plan. (b) Governing Law. The Plan shall be governed by, interpreted under and construed and enforced in accordance with the internal laws, and not the laws pertaining to conflicts or choice of laws, of the State of Delaware, applicable to agreements made and to be performed wholly within the State of Delaware. (c) Severability. If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction. * * * The Plan was duly adopted by the Board of Directors of the Company as of January 24, 1997. ------------------------------------------------- Leslie C. Seeman Senior Vice President, General Counsel and Secretary of the Company The Plan was duly approved by the stockholders of the Company on April _____, 1997. ------------------------------------------------- Leslie C. Seeman Senior Vice President, General Counsel and Secretary of the Company 13 EX-11 5 COMPUTATION OF EARNINGS PER SHARE. 1 EXHIBIT 11. STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
THREE MONTH PERIOD ENDED MARCH 31, 1997 - ------------------------------------------------------------------------------------------------------ ASSUMING PRIMARY FULL DILUTION ----------------- -------------------- WEIGHTED AVERAGE OF OUTSTANDING SHARES 32,172,963 32,172,963 COMMON EQUIVALENT SHARES: OUTSTANDING STOCK OPTIONS 646,469 646,469 OTHER POTENTIALLY DILUTIVE SECURITIES: N/A N/A ----------------- -------------------- SHARES USED IN COMPUTING NET INCOME PER SHARE 32,819,432 32,819,432 ================= ==================== NET INCOME $5,093,592 $5,093,592 ADJUSTMENTS ASSUMING FULL DILUTION: N/A N/A ----------------- -------------------- NET INCOME $5,093,592 $5,093,592 ================= ==================== NET INCOME PER SHARE $0.155 $0.155 DILUTION PERCENTAGE ASSUMING FULL DILUTION (1) N/A 0.0% NET INCOME PER SHARE $0.16 $0.16 ================= ====================
NOTES: (1) - DILUTION CAUSED BY COMMON STOCK EQUIVALENTS AND OTHER POTENTIALLY DILUTIVE SECURITIES THAT IS LESS THAN 3% IS CONSIDERED IMMATERIAL, AND ONLY PRIMARY EARNINGS PER SHARE IS PRESENTED IN THE ACCOMPANYING CONDENSED CONSOLIDATED STATEMENT OF EARNINGS. NOTE - SUBSIDIARY STOCK OPTIONS THAT ENABLE HOLDERS TO OBTAIN SUBSIDIARY'S COMMON STOCK PURSUANT TO EFFECTIVE STOCK OPTION PLANS ARE INCLUDED IN COMPUTING THE SUBSIDIARY'S EARNING PER SHARE, TO THE EXTENT DILUTIVE. THOSE EARNINGS PER SHARE DATA ARE INCLUDED IN THE COMPANY'S PER SHARE COMPUTATIONS, TO THE EXTENT DILUTIVE, BASED ON THE COMPANY'S HOLDINGS OF THE SUBSIDIARY'S STOCK. FOR THE THREE MONTHS ENDED MARCH 31, 1997, ALL SUCH SUBSIDIARY STOCK OPTIONS WERE ANTI-DILUTIVE. EX-99 6 IMPORTANT FACTORS. 1 Exhibit 99 IMPORTANT FACTORS REGARDING FORWARD LOOKING STATEMENTS The following factors, among others, could affect the Company's actual results and could cause Orbital's actual consolidated results during the second quarter of 1997 and beyond, to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company. (Capitalized terms used herein have the meanings assigned to them in Orbital Sciences Corporation's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997 with which this exhibit is filed.) - - Orbital, like most companies and governments that have launch and satellite programs, has experienced occasional product failures and other problems, including with respect to certain of its launch vehicles and satellites. In addition to any costs resulting from product warranties, contract performance or required remedial action, product failures may result in increased costs or loss of revenues due to postponement or cancellation of subsequently scheduled launches or spacecraft operations or other product deliveries. - - As of December 31, 1996, approximately 60% of Orbital's backlog is with the U.S. Government and its agencies or from subcontracts with prime contractors to the U.S. Government. Most of Orbital's government contracts are funded incrementally on a year-to-year basis. Changes in government policies, priorities or funding levels through agency or program budget reductions by the U.S. Congress or the imposition of budgetary constraints could materially adversely affect Orbital's financial condition or results of operations. All the Company's U.S. Government contracts and, in general, its subcontracts with U.S. Government prime contractors, provide that such contracts may be terminated at will by the U.S. Government or the prime contractor, respectively. There can be no assurance that these contracts will not be terminated or suspended in the future, or that contract suspensions or termination will not result in unreimbursable expenses or charges or other adverse effects on the Company. - - Certain of the Company's revenues have been generated under fixed-price incentive fee, firm fixed-price and cost-plus-fee long-term contracts. Revenue recognition and profitability, if any, from a particular contract may be adversely affected to the extent that original cost estimates, estimated costs to complete or incentive or award fee estimates are revised, delivery schedules are delayed, or progress under a contract is otherwise impeded. - - The accuracy and appropriateness of Orbital's direct and indirect costs and expenses under its U.S. Government contracts are subject to extensive regulation and audit by the Defense Contract Audit Agency or by other appropriate agencies of the U.S. Government. These agencies have the right to challenge Orbital's cost estimates or allocations with respect to any such contract. Additionally, a substantial portion of payments to the Company under U.S. 2 Government contracts are provisional payments that are subject to potential adjustment upon audit by such agencies. - - Start-up of the ORBCOMM System will produce significant ORBCOMM Global operating losses for several more years. Even if the ORBCOMM System is fully constructed and operational, there can be no assurance that an adequate market will develop for ORBCOMM services, that ORBCOMM Global will achieve profitable operations or that Orbital will recover any of its past or anticipated investment in the ORBCOMM System. Because Orbital (through OCC) has a 50% participating interest in ORBCOMM Global, Orbital expects to recognize its proportionate share of ORBCOMM Global profits and losses. If full development and implementation of the ORBCOMM System were to be delayed or significantly restricted, the Company could be required to expense part or all of its investment in the ORBCOMM System. 2 EX-27 7 FINANCIAL DATA SCHEDULE.
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF EARNINGS AT AND FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000820736 ORBITAL SCIENCES CORP/DE/ 1,000 YEAR DEC-31-1997 JAN-01-1997 MAR-31-1997 29,249 10,022 148,983 (1,602) 23,459 217,834 203,237 (73,200) 515,121 138,288 29,346 0 0 322 335,512 515,121 122,112 122,112 88,434 88,434 0 142 97 5,660 566 5,094 0 0 0 5,094 0.16 0.16
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