-----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, KjKKKfmBVuDOUsU2nyflI227gwLE1kkhoGKlUl3AY+d7J1moaWIUy1b+8qM6SSoh PuopoXcwn6gdJISRi/6i2Q== 0000889812-97-000587.txt : 19970227 0000889812-97-000587.hdr.sgml : 19970227 ACCESSION NUMBER: 0000889812-97-000587 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19970226 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ORION NETWORK SYSTEMS INC/DE/ CENTRAL INDEX KEY: 0000885376 STANDARD INDUSTRIAL CLASSIFICATION: RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT [3663] IRS NUMBER: 521271418 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-45415 FILM NUMBER: 97543930 BUSINESS ADDRESS: STREET 1: 2440 RESEARCH BLVD STE 400 CITY: ROCKVILLE STATE: MD ZIP: 20850 BUSINESS PHONE: 3012588101 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: KINGSTON COMMUNICATIONS INTERNATIONAL LTD CENTRAL INDEX KEY: 0001034585 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: TELEPHONE HOUSE, CARR LANE CITY: KINGSTON UPON HULL STATE: X0 ZIP: 00000 SC 13D 1 STATEMENT OF BENEFICIAL OWNERSHIP UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. )* ORION NETWORK SYSTEMS, INC. (Name of Issuer) Common Stock, par value $.01 per share (Title of Class of Securities) 68628K104 (CUSIP Number) John P.C. Bailey Kingston Communications International Limited Telephone House, Carr Lane Kingston upon Hull HU1 3RE United Kingdom 011-44-1-482-602-576 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) January 31, 1997 (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1 (b)(3) or (4), check the following box |_|. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosure provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 68628K104 Page 2 of _____ Pages 1 Name of Reporting Person S.S. or I.R.S. Identification Nos. of Above Person Kingston Communications International Limited 2 Check the Appropriate Box If a Member of a Group* a. |_| b. |_| 3 SEC Use Only 4 Source of Funds* OO 5 Check box if disclosure of legal proceedings is required pursuant to item 2(d) or 2(e) |_| 6 Citizenship or Place of Organization England and Wales 7 Sole Voting Power Number of Shares Beneficially 8 Shared Voting Power Owned By 640,857 Each Reporting 9 Sole Dispositive Power Person With 10 Shared Dispositive Power 640,857 11 Aggregate Amount Beneficially Owned by Each Reporting Person 640,857 12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_| 13 Percent of Class Represented By Amount in Row (11) 5.5% 14 Type of Reporting Person* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! SCHEDULE 13D CUSIP No. 68628K104 Page 3 of _____ Pages 1 Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Kingston Communications (Hull) plc 2 Check the Appropriate Box If a Member of a Group* a. |_| b. |_| 3 SEC Use Only 4 Source of Funds* N\A 5 Check box if disclosure of legal proceedings is required pursuant to item 2(d) or 2(e) |_| 6 Citizenship or Place of Organization England and Wales 7 Sole Voting Power Number of Shares Beneficially 8 Shared Voting Power Owned By 640,857 Each Reporting 9 Sole Dispositive Power Person With 10 Shared Dispositive Power 640,857 11 Aggregate Amount Beneficially Owned by Each Reporting Person 640,857 12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares* |_| 13 Percent of Class Represented By Amount in Row (11) 5.5% 14 Type of Reporting Person* CO, HC *SEE INSTRUCTIONS BEFORE FILLING OUT! Item 1. Security and Issuer (a) Title of Class of Securities common stock, par value $.01 per share ("Common Stock") (b) Name of Issuer ORION NETWORK SYSTEMS, INC. (the "Issuer") (c) Address of Issuer's Principal Executive Offices 2440 Research Boulevard, Suite 400 Rockville, MD 20850 Item 2. Identity and Background This statement of beneficial ownership interest is being filed by the following persons: (i) Kingston Communications International Limited, a company existing under the laws of England and Wales ("Kingston") and (ii) Kingston Communications (Hull) plc, a company existing under the laws of England and Wales ("PLC"). Kingston is a wholly owned subsidiary of PLC. The principal business office and principal business activity of each of the Reporting Persons is as follows: (a) Kingston Telephone House, Carr Lane Kingston upon Hull HU1 3RE United Kingdom Principal Business Activity: Investment in international satellite facilities. (b) PLC Telephone House, Carr Lane Kingston upon Hull HU1 3RE United Kingdom Principal Business Activity: Public telecommunications network operator. Information regarding the executive officers and directors of each of the Reporting Persons is as follows: (a) Identity - Refer to Annex A (b) Residence or Business Address - Refer to Annex A (c) Present principal occupation or employment - Refer to Annex A (d)-(e) None of the Reporting Persons and none of the directors or executive officers who are identified on Annex A have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body of jurisdiction that resulted in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to U.S. federal or state securities laws or finding any violations with respect to such laws. (f) Citizenship - Refer to Annex A Item 3. Source and Amount of Funds or Other Consideration Acquisition of 11,215 shares of the 6% Series C Cumulative Redeemable Convertible Preferred Stock ("Series C Stock") of the Issuer by Kingston - Kingston acquired 11,215 shares of Series C Stock in exchange for all of Kingston's limited partnership interest in International Private Satellite Partners, L.P. ("Orion Atlantic") and in exchange for refund rights of Kingston related to certain advances made by Kingston to Orion Atlantic. Item 4. Purpose of Transaction The acquisition by Kingston of securities of the Issuer convertible into Common Stock (the "Acquisition Transaction") was undertaken in conjunction with certain reorganization and recapitalization transactions of the Issuer, Oldco, and Orion Atlantic (the "Restructuring Transactions"). The principal elements of the Restructuring Transactions were (i) the merger of a special purpose merger subsidiary into Orion Network Systems, Inc. ("ONS") and the exchange, pursuant to the merger of each of the preferred and common shares of ONS for preferred and common shares of Orion Newco Services, Inc., (ii) the exchange by British Aerospace Communications, COM DEV Satellite Communications Limited, Kingston, Lockheed Martin Commercial Launch Services, Inc., MCN, and Trans Atlantic Satellite, Inc. (collectively the "Exchanging Partners") of their limited partnership interests in Orion Atlantic and certain refund rights for shares of Series C Stock of the Issuer; (iii) an aggregate investment of $60,000,000 by British Aerospace Holdings, Inc. ("BAe") and Matra Marconi Space UK Limited ("Matra") in the Issuer in the form of convertible junior subordinated debentures, (iv) the exchange by British Aerospace Satellite Investments, Inc. of its interest in Asia Pacific Space and Communications Ltd. for shares of Oldco and (v) the public sale by the Issuer of units of senior notes and common stock warrants in the approximate amount of $710,000,000 resulting in net proceeds to the Issuer of approximately $575,000,000 after provision for certain pre-funded interest payments. Upon completion of the Restructuring Transactions, ONS became a wholly owned subsidiary of the Issuer and changed its name from Orion Network Systems, Inc. to Orion Oldco Services, Inc. ("Oldco") and the Issuer changed its name from Orion Newco Services, Inc. to Orion Network Systems, Inc. The Restructuring Transactions also resulted in the refinancing of $210,000,000 of existing indebtedness of Orion Atlantic under a credit agreement (together with any related documents and agreements, the "Orion 1 Credit Facility") dated December 6, 1991 among Orion Atlantic, certain banks and other lenders and the Chase Manhattan Bank (National Association), as agent and the release of commitments of the Exchanging Partners to support the Orion 1 Credit Facility pursuant to certain Communication Satellite Capacity Agreements and Contingent Communication Satellite Capacity Agreements. The Reporting Persons undertook the Acquisition Transaction for investment purposes. The shares of Series C Preferred Stock owned by the Reporting Persons are being held for investment purposes. Subject to contractual and legal restrictions or limitations, economic and market conditions and such other considerations as they may deem relevant, the Reporting Persons may, from time to time, acquire additional shares of Common Stock or additional Convertible Instruments in the open market, in private transactions or otherwise. The Reporting Persons may also dispose of some or all of the shares of Series C Stock owned by them, in the open market, in private transactions or otherwise. The Issuer is obligated to pay dividends on the Series C Preferred Stock. For as long as any of the Reporting Persons own any shares of Series C Stock, they will receive additional shares of Common Stock from the Issuer in accordance with the terms of the Series C Stock. Except as discussed in the immediately preceding paragraph, none of the Reporting Persons presently has any plans or proposals which related to or would result in any of the actions described in clauses (a) through (j) of the instructions to Item 4 to Schedule 13D or in any action similar to any of those enumerated in said clauses (a) through (j). Item 5. Interest in Securities of the Issuer (a) Kingston owns (or is presently entitled to own) 11,215 shares of Series C Stock that at the date of issuance (January 31, 1997) were convertible into 640,857 shares of Common Stock. As of January 31, 1997, the Reporting Persons owned or had an immediate right to acquire upon conversion 640,857 shares of Common Stock or approximately 5.5% of the total number of shares of Common Stock issued and outstanding as reported in the Issuer's proxy statement dated January 15, 1997, as calculated in accordance with Rule 13d-3(d)(1). As a result of its ownership of all of the issued and outstanding shares of Kingston, PLC may be deemed to be a beneficial owner of the shares of Series C Stock owned directly by Kingston. (b) By reason of its direct ownership of 100% of the voting securities of Kingston, PLC may be deemed to share voting and dispositive power over all the shares of Series C Stock directly owned by Kingston. PLC may be deemed to share voting and dispositive power over all of the shares of Common Stock and Convertible Instruments directly owned by each of the other Reporting Persons as a result of its indirect ownership of 100% of the voting securities of each of the other Reporting Persons. (c) Acquired 11,215 shares of Series C Preferred Stock directly from the Issuer on January 31, 1997 in exchange for all of its limited partnership interest in Orion Atlantic and in exchange for the right to receive certain refund payments. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer In connection with the Acquisition Transactions, the Reporting Persons have entered into the contracts described below relating to the securities of the Issuer. Each of the following summaries of agreements are qualified by reference to the full text of such agreement, each of which is filed herewith as an exhibit to this statement on Schedule 13D and are either attached hereto or are incorporated herein by reference to filings made with the Securities and Exchange Commission by either the Issuer or Oldco: Section 351 Exchange Agreement and Plan of Conversion, dated as of June __, 1996 ("Exchange Agreement") and First Amendment to Section 351 Exchange Agreement and Plan of Conversion dated as of December , 1996 among Orion Atlantic, Oldco, OrionSat and the Exchanging Partners (the "First Amendment") - Pursuant to the Exchange Agreement and the First Amendment, the Exchanging Partners (including Kingston) received shares of Series C Stock of the Issuer in exchange for all of their limited partnership interests in Orion Atlantic and all of their rights to refunds of certain advances made by the Exchanging Partners to Orion Atlantic. The Exchange Agreement also, among other things, required the termination of the obligations of the Exchanging Partners and their affiliates with respect to the Orion 1 Credit Facility. Under the registration rights agreement attached as Exhibit D to the Exchange Agreement (the "Exchanging Partner Registration Rights Agreement") the Issuer is obligated to provide certain demand, shelf and "piggy back" registration rights to the holders of the Series C Stock with respect to shares of Common Stock they receive as dividends on the Series C or upon conversion of the Series C Stock. Under a resale restriction letter agreement (the "Resale Restriction Letter"), attached as Exhibit E to the Exchange Agreement, the Exchanging Partners have agreed not to transfer any of the shares of Common Stock received as dividends or upon conversion for a period of 180 days from the date of issuance of the Series C Stock (January 31, 1997) without the prior consent of the Issuer and to limit their aggregate sales of such shares for a period of 5 years to no more than 25% of the total available in any 90 days period, except pursuant to a underwritten, registered public offering or in certain other circumstances. Certificate of Designation, Rights and Preferences of Series C 6% Cumulative Redeemable Convertible Preferred Stock (the "Certificate of Designation") - The Certificate of Designation, which establishes the terms of the Series C Stock provides, among other things, for a 6% annual cumulative dividend to be paid only in shares of Common Stock (except for dividends of fractional shares which are to be paid in cash). The number of shares of Common Stock to be distributed in satisfaction of the dividend on the Series C Stock is determined by dividing the dividend entitlement (6% per annum on the outstanding Series C Stock) by the higher of (a) the average market price per share of Common Stock over a period of 20 consecutive business days immediately preceding the dividend reference date or (b) a price of $10.21 (subject to adjustments for stock splits, recapitalizations or other subdivisions of the Common Stock). Dividends are paid annually, upon conversion of any shares of Series C Stock, the date on which a liquidation payment is made and upon final maturity (February 1, 2022). The holders of the Series C Stock are entitled to vote their Series C Stock on an "as converted basis" (i.e. one vote for each whole share of Common Stock that would be issuable upon conversion of such Series C Stock at the time the vote is taken.) The Series C Stock is subject to redemption and to mandatory conversion into Common Stock, as provided by the Certificate of Designation. Except as otherwise specifically disclosed in Item 5 and this Item 6, none of the Reporting Persons and, to the knowledge of the Reporting Persons, none of the individuals identified in Annex A have any contract, arrangement, understanding or relationship among themselves or with any other person with respect to any securities of the Issuer. Item 7. Materials to be filed as Exhibits The following materials are filed as exhibits to this statement of beneficial ownership on Schedule 13D and are either attached hereto or are incorporated by reference to registration statements or periodic reports of the Issuer or Oldco filed with the Securities and Exchange Commission, as permitted under Rule 12b-32 of the general rules and regulations under the Securities Exchange Act of 1934: 1. Joint Filing Agreement among Kingston and PLC dated February 25, 1997; 2. Exchange Agreement (including, Exchanging Partner Registration Rights Agreement (Exhibit D thereto) and Resale Restriction Letter (Exhibit E thereto)); 3. Form of Certificate of Designation of Series C 6% Cumulative Redeemable Convertible Preferred Stock of the Issuer; and 4. First Amendment to Exchange Agreement. After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: February 25, 1997 KINGSTON COMMUNICATIONS INTERNATIONAL LIMITED By: /s/ John P.C. Bailey -------------------- Name: John P.C. Bailey Title: Company Secretary KINGSTON COMMUNICATIONS (HULL) PLC By: /s/ John P.C. Bailey -------------------- Name: John P.C. Bailey Title: Company Secretary ANNEX A DIRECTORS AND EXECUTIVE OFFICERS OF THE REPORTING PERSONS KINGSTON COMMUNICATIONS (HULL) PLC NON-EXECUTIVE DIRECTORS =============================================================================== Name and Title; Principal Address Citizenship Occupation - ------------------------------------------------------------------------------- Frederick Rowland Beedle 5, Spencer Court, British Postman; Member, Saner Street, Hull City Council Hull HU 3 2TL United Kingdom - ------------------------------------------------------------------------------- Julie Lowery 16, Gloucester Street, British Retired; Member, Hull City Hull HU 4 6PT Council United Kingdom - ------------------------------------------------------------------------------ George Evans Andrews 170, Amethyst Road, British Retired; Member, Hull City Hull Council United Kingdom - ------------------------------------------------------------------------------- Ann Stanley 58, Ellesmere Avenue, British Housewife; Member, Hull City Holderness Road, Council Hull HU 8 9BT United Kingdom - ------------------------------------------------------------------------------- Michael Sidney Adamson 12, Emmott Road, British Executive Manager, Kingston Haworth Park, Communication (Hull) plc Hull HU 6 7AX United Kingdom - ------------------------------------------------------------------------------- Leonard Maxwell Bird 375 Salthouse Road, British Retired Solicitor; Hull HU 8 9HS Member, Hull City Council United Kingdom - ------------------------------------------------------------------------------- Leslie William Upfold 18 Wadhurst Close, British Retired Trades Union Officer; Bransholme, Member, Hull City Council Hull HU 7 6BH United Kingdom - ------------------------------------------------------------------------------- Steven James Bayes 7 Hinderwell Street, British Nursing Officer; Member, Princes Avenue Hull City Council Hull HU 5 3QN United Kingdom =============================================================================== KINGSTON COMMUNICATIONS (HULL) PLC EXECUTIVE DIRECTORS ================================================================================ Name and Title; Principal Address Citizenship Occupation - -------------------------------------------------------------------------------- William Aylward Pine Trees, Berry Hill Road, British Managing Director Adderbury, Banbury, Oxfordshire OX 17 3HF United Kingdom - -------------------------------------------------------------------------------- David Michael Wood 40, The Cedar Grove, British Director Molescroft, Beverley East Yorkshire United Kingdom - -------------------------------------------------------------------------------- Stephen Denison 16, Hallgate, British Technical Director Cottingham, East Yorkshire HU 16 4DJ United Kingdom - -------------------------------------------------------------------------------- Michael Lacey 25, Beechmount Park, British Director Edinburgh, East Lothian EH 12 5YT United Kingdom - -------------------------------------------------------------------------------- Owen Francis Finn Plot 42 British Finance Director Spindlewood Off Brantingham Road Elloughton HU 15 1LL United Kingdom ============================================================================== KINGSTON COMMUNICATIONS (HULL) PLC EXECUTIVE OFFICERS ============================================================================== Name and Title; Principal Address Citizenship Occupation - ------------------------------------------------------------------------------ John Philip Cureton Bailey 7 Thornleys, British Company Secretary Cherry Burton, Beverley, East Yorkshire HU 17 7SJ United Kingdom ============================================================================== KINGSTON COMMUNICATIONS INTERNATIONAL LIMITED EXECUTIVE DIRECTORS ============================================================================== Name and Title; Principal Address Citizenship Occupation - ------------------------------------------------------------------------------ David Michael Wood 40, The Cedar Grove, British Director Molescroft, Beverley, East Yorkshire United Kingdom - ------------------------------------------------------------------------------ John Philip Cureton Bailey 7 Thornleys, British Company Secretary Cherry Burton, Beverley, East Yorkshire HU 17 7SJ United Kingdom - ------------------------------------------------------------------------------ David Nicholson 3 North End British General Manager Farndon Newark on Trent Nottingham NG 24 35X United Kingdom ============================================================================== EXHIBIT INDEX EXHIBIT NO. TITLE 1 Joint filing agreement among Kingston and PLC dated February 25, 1997. 2 Exchange Agreement dated June, 1996 among Oldco, Orion Atlantic and each of the Exchanging Partners, including Exchanging Partner Registration Rights Agreement (Exhibit D thereto) and Resale Restriction Letter (Exhibit E thereto) (Incorporated herein by reference to Exhibit 10 of Oldco's Current Report on Form 8-K dated December 20, 1996) 3 First Amendment to Exchange Agreement dated December , 1996 among Oldco, Orion Atlantic, Orion Satellite Corporation and each of the Exchanging Partners (Incorporated herein by reference to Exhibit 10.45 of the Issuer's Registration Statement on Form S-4 No. 333-19795, dated January 15, 1997) 4 Form of Certificate of Designation of Series C 6% Cumulative Redeemable Convertible Preferred Stock of the Issuer (Incorporated herein by reference to Exhibit 4.3 of the Issuer's Registration Statement on Form S-4 No. 333-19795, dated January 15, 1997) EX-99.1 2 JOINT FILING AGREEMENT EXHIBIT 1 JOINT FILING AGREEMENT The undersigned hereby agree that this statement on Schedule 13D dated February 25, 1997 with respect to the Common Stock of Orion Network Systems, Inc. is, and any amendments hereto signed by each of the undersigned shall be, filed on behalf of both of us pursuant to and in accordance with the provisions of Rule 13(d)-1(f) under the Securities Exchange Act of 1934. Date: February 25, 1997 KINGSTON COMMUNICATIONS INTERNATIONAL LIMITED By: /s/ John P.C. Bailey ------------------------ Name: John P.C. Bailey Title: Company Secretary KINGSTON COMMUNICATIONS (HULL) PLC By: /s/ John P.C. Bailey ------------------------ Name: John P.C. Bailey Title: Company Secretary -----END PRIVACY-ENHANCED MESSAGE-----