Item 1.01 Entry into a Material Definitive Agreement
On April 23, 2021, Loral Space & Communications Inc. ("Loral" or the "Company"),
along with Telesat Canada ("Telesat"), Public Sector Pension Investment Board
("PSP Investments") and 4440480 Canada Inc., an indirect wholly-owned subsidiary
of the Company (the "Special Purchaser"), entered into Restricted Share Unit
Grant Agreements with respect to shares in Telesat (the "RSU Grant Agreements")
with the following executives of Telesat: Daniel Goldberg, President and Chief
Executive Officer, Andrew Browne, Chief Financial Officer, Erwin Hudson, Vice
President, LEO, and Michael Schwartz, Senior Vice President, Corporate and
Business Development (each a "Participant" and collectively, the
"Participants"). Telesat is owned principally by the Company together with
PSP Investments. The RSU Grant Agreements were approved by the Compensation and
Corporate Governance Committee of the Telesat Board of Directors in connection
with Telesat's compensation arrangements with each of the Participants.
The RSU Grant Agreements document grants to the Participants of restricted share
units with respect to shares in Telesat and provides for certain rights,
obligations and restrictions related to such restricted share units, which
include, among other things, the obligation of the Special Purchaser, prior to
the occurrence of the Integration Transaction (as defined below), to purchase
Telesat shares upon exercise by Telesat of its call right under Telesat's
Restricted Share Unit Plan in the event of the termination of Participant's
employment.
The RSU Grant Agreements further provide that, in the event the Special
Purchaser is required to purchase Telesat shares pursuant to the RSU Grant
Agreements, such shares, together with the obligation to pay for such shares,
shall be transferred to a subsidiary of the Special Purchaser, which subsidiary
shall be wound up into Telesat, with Telesat agreeing to the acquisition of such
subsidiary by Telesat from the Special Purchaser for nominal consideration and
with the purchase price for the shares being paid by Telesat within ten (10)
business days after completion of the winding-up of such subsidiary into
Telesat.
The foregoing description of the RSU Grant Agreements is not intended to be
complete and is qualified in its entirety by reference to the RSU Grant
Agreements for Messrs. Goldberg, Brown, Hudson and Schwartz filed as Exhibit
10.1, Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4 hereto, respectively.
Item 1.02 Termination of a Material Definitive Agreement
On April 25, 2021, Telesat and each of the Participants entered into an Option
Cancellation Agreement pursuant to which each of the Participants surrendered,
and Telesat cancelled, certain options (collectively, the "Options") to acquire
Telesat shares previously granted to the Participants. Under the Option
Cancellation Agreements, each of the Participants acknowledged and agreed that:
(a) the Options are surrendered and cancelled absolutely in consideration for
CAD 1.00; and (b) the Participant shall have no further rights or entitlement
with respect to the Options. Accordingly, as a result of the Option Cancellation
Agreements, neither Loral nor the Special Purchaser has any further obligations
under the following stock option grant agreements previously entered into among
Telesat, each of the Participants, PSP Investments, Loral and the Special
Purchaser: Grant Agreements with Mr. Goldberg dated November 28, 2018 (Exhibit
10.31 and Exhibit 10.33 to the Company's Annual Report on Form 10-K for the year
ended December 31, 2020 filed with the Securities and Exchange Commission
("SEC") on March 9, 2021 (the "Loral 2020 10-K)); a Grant Agreement with Mr.
Browne dated December 10, 2019 (Exhibit 10.35 to the Loral 2020 10-K); a Grant
Agreement with Mr. Hudson dated September 6, 2018 (Exhibit 10.30 to the Loral
2020 10-K); and Grant Agreements with Mr. Schwartz dated January 28, 2016
(Exhibit 10.29 to the Loral 2020 10-K) and March 18, 2019 (Exhibit 10.34 to the
Loral 2020 10-K). Moreover, under Mr. Goldberg's Option Cancellation Agreement,
220,000 Options under a Grant Agreement with Mr. Goldberg dated November 18,
2013 (Exhibit 10.27 to the Loral 2020 10-K) were cancelled, with the balance of
the options under that agreement remaining outstanding.
In addition, options to purchase shares of Telesat previously granted to certain
Telesat executives under the following grant agreements among Telesat, the
Telesat executives, PSP Investments, Loral and the Special Purchaser have been
either exercised for Telesat shares or previously cancelled, and, accordingly,
neither Loral nor the Special Purchaser has any further obligations under these
agreements: a Grant Agreement with Mr. Goldberg dated May 20, 2011 (Exhibit
10.24 to the Loral 2020 10-K); Grant Agreements with Michelle Cayouette
(formerly Chief Financial Officer of Telesat) dated May 31, 2011 and November
18, 2013 (Exhibit 10.26 and Exhibit 10.28 to the Loral 2020 10-K); and a Grant
Agreement with Mr. Schwartz dated May 31, 2011 (Exhibit 10.25 to the Loral 2020
10-K).
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On April 22, 2021, the Board of Directors of Loral approved and adopted
Amendment No. 2 to the Amended and Restated Bylaws of Loral Space &
Communications Inc. to extend the period in which Loral may notify its
stockholders of stockholder meetings from 10-50 days prior to the meeting date
to 10-60 days prior to the meeting date. Amendment No. 2 to the Amended and
Restated Bylaws of Loral Space & Communications Inc. dated April 22, 2021 is
attached hereto as Exhibit 3.1 and incorporated herein by reference.
Item 5.08 Shareholder Director Nominations.
The Company did not hold an annual meeting of stockholders in 2020. Accordingly,
the deadlines set forth in the Company's definitive proxy statement filed with
the SEC on April 11, 2019 for stockholder proposals and director nominations for
consideration at the delayed 2020 annual meeting of stockholders of the Company
(including any adjournment or postponement thereof, the "2020 Annual Meeting")
no longer apply. The new deadlines for (x) proposals and director nominations of
stockholders intended to be included in the Company's proxy statement and form
of proxy for the 2020 Annual Meeting pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934, as amended, and (y) proposals and director nominations of
stockholders intended to be considered at the 2020 Annual Meeting other than by
means of inclusion in the Company's proxy statement and form of proxy card are,
in each case, the close of business on May 6, 2021 (which the Company has
determined to be a reasonable time before it expects to begin to print and
distribute its proxy materials prior to the 2020 Annual Meeting). Stockholders
submitting proposals or nominations using the foregoing procedures should
deliver or mail the proposal or nomination, and all supporting information
required by Rule 14a-8 or the Company's Amended and Restated Bylaws, as
applicable, to the Corporate Secretary of the Company at our principal executive
offices, located at Loral Space & Communications Inc., 600 Fifth Avenue, New
York, New York 10020. In addition to complying with this deadline, stockholder
proposals and nominations must comply with all applicable SEC rules, including
Rule 14a-8, applicable law and the requirements set forth in the Company's
Amended and Restated Bylaws, a copy of which will be sent to any stockholder
upon written request to the Corporate Secretary of the Company.
Item 8.01 Other Events.
On April 20, 2021, the Company received a notice from the Listing Qualifications
Department of The Nasdaq Stock Market ("Nasdaq") that the Nasdaq staff has
determined to grant the Company an extension to June 30, 2021 to regain
compliance with Rule 5620(a) of the Nasdaq Listing Rules, which required the
Company to hold an annual meeting of stockholders within 12 months of the end of
the Company's fiscal year on December 31, 2019. The Company plans to hold its
annual meeting of stockholders on or before June 30, 2021.
On April 22, 2021, the Board of Directors of the Company fixed May 7, 2021 as
the record date for determining stockholders entitled to receive notice of and
to vote at the delayed 2020 Annual Meeting of Stockholders; the prior record
date established for such meeting (November 30, 2020) was rescinded.
On April 26, 2021, Telesat Corporation ("Telesat Corporation") and Telesat
Partnership LP ("Telesat Partnership") filed a registration statement on Form
F-4 with the SEC relating to the previously disclosed integration transaction
(the "Integration Transaction") contemplated by the Transaction Agreement and
Plan of Merger, dated November 23, 2020, among Loral, Telesat, Telesat
Partnership, Telesat Corporation, Telesat CanHold Corporation, Lion Combination
Sub Corporation, PSP Investments and Red Isle Private Investments Inc. The
registration statement includes a preliminary proxy statement of Loral and, when
declared effective, will include a definitive proxy statement of Loral with
respect to the 2020 Annual Meeting.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
3.1 Amendment No. 2 to Amended and Restated Bylaws of Loral Space &
Communications dated April 22, 2021
Restricted Share Unit Grant Agreement dated April 23, 2021 by and among
10.1. Telesat Canada, Loral Space & Communications Inc., Public Sector Pension
Investment Board, 4440480 Canada Inc. and Daniel Goldberg *
Restricted Share Unit Grant Agreement dated April 23, 2021 by and among
10.2 Telesat Canada, Loral Space & Communications Inc., Public Sector Pension
Investment Board, 4440480 Canada Inc. and Andrew Browne *
Restricted Share Unit Grant Agreement dated April 23, 2021 by and among
10.3 Telesat Canada, Loral Space & Communications Inc., Public Sector Pension
Investment Board, 4440480 Canada Inc. and Erwin Hudson *
Restricted Share Unit Grant Agreement dated April 23, 2021 by and among
10.4 Telesat Canada, Loral Space & Communications Inc., Public Sector Pension
Investment Board, 4440480 Canada Inc. and Michael Schwartz *
* Management contract or compensatory plan, contract or arrangement with
directors or named executive officers
Forward-Looking Statements
This report contains forward-looking statements within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. When used in this report, the
words "believes," "expects," "plans," "may," "will," "would," "could," "should,"
"anticipates," "estimates," "project," "intend" or "outlook" or other variations
of these words or other similar expressions are intended to identify
forward-looking statements and information. In addition, Loral or its
representatives have made or may make forward-looking statements, orally or in
writing, which may be included in, but are not limited to, various filings made
from time to time with the SEC, and press releases or oral statements made with
the approval of an authorized executive officer of Loral. Actual results may
differ materially from anticipated results as a result of certain risks and
uncertainties which are described as "Risk Factors" in Loral's current Annual
Report on Form 10-K and in Loral's Quarterly Reports on Form 10-Q. The reader is
specifically referred to these documents, as well as Loral's other filings with
the SEC. Risks and uncertainties include but are not limited to (1) risks
associated with financial factors, including swings in the global financial
markets, increases in interest rates and access to capital; (2) risks associated
with satellite services, including dependence on large customers, launch delays
and failures, in-orbit failures and competition; (3) risks and uncertainties
associated with the LEO Constellation, including overcoming technological
challenges, access to spectrum and markets, governmental restrictions or
regulations to address environmental concerns, raising sufficient capital to
design and implement the system and competition from other low earth orbit
systems; (4) regulatory risks, such as the effect of industry and government
regulations that affect Telesat; (5) risks related to the satisfaction of the
conditions to closing the Integration Transaction with PSP Investments and
Telesat in the anticipated timeframe or at all, including the failure to obtain
necessary regulatory and stockholder approvals; (6) risks relating to the
inability or failure to realize the anticipated benefits of the Integration
Transaction; (7) risks of disruption from the Integration Transaction making it
more difficult to maintain business and operational relationships; (8) risks
relating to the incurrence of significant transaction costs and unknown
liabilities, including litigation or regulatory actions related to the
Integration Transaction; and (9) other risks, including risks relating to and
resulting from the COVID-19 pandemic. The foregoing list of important factors is
not exclusive. Furthermore, each of Telesat and Loral operate in an industry
sector where securities values may be volatile and may be influenced by economic
and other factors beyond Telesat's or Loral's control.
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Additional Information and Where to Find It
This report does not constitute an offer to sell or the solicitation of an offer
to buy any securities, or a solicitation of any vote or approval, nor shall
there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. In connection with the
Integration Transaction, Telesat Corporation and Telesat Partnership have filed
with the SEC a registration statement on Form F-4 that includes a preliminary
proxy statement/prospectus and that, when declared effective, will include the
definitive proxy statement to be mailed by Loral to its stockholders in
connection with the Integration Transaction. The proxy statement/prospectus has
also been filed with the applicable Canadian securities regulators. WE URGE
INVESTORS AND SECURITY HOLDERS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY
OTHER RELEVANT DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT LORAL, TELESAT, TELESAT CORPORATION, TELESAT
PARTNERHSIP AND THE INTEGRATION TRANSACTION. Investors and security holders will
be able to obtain these materials (when they are available) and other documents
filed with the SEC and the Canadian securities regulators free of charge at the
SEC's website, www.sec.gov and at the System for Electronic Document Analysis
and Retrieval (SEDAR) at www.sedar.com. In addition, a copy of the proxy
statement/prospectus (when it becomes available) may be obtained free of charge
from Telesat's internet website for investors
www.telesat.com/investor-relations, or from Loral's investor relations website
at www.loral.com/Investors. Investors and security holders may also read and
copy any reports, statements and other information that Loral, Telesat, Telesat
Corporation or Telesat Partnership files with the SEC on the SEC's website at
www.sec.gov.
Participants in the Solicitation of Votes
Loral, Telesat, and their respective directors, executive officers and certain
other members of management and employees may be deemed to be participants in
the solicitation of proxies from the stockholders of Loral in respect of the
proposed Integration Transaction. Information regarding Telesat directors and
executive officers is available in its Form 20-F for the year ended December 31,
2020 filed by Telesat on SEDAR at www.sedar.com on March 4, 2021, and
information regarding Loral's directors and executive officers is available in
its Form 10-K for the year ended December 31, 2020 filed with the SEC on March
9, 2021. Other information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by security holdings
or otherwise, will be contained in the definitive proxy statement/prospectus and
other relevant materials to be filed with the SEC and the Canadian securities
regulators when they become available.
For more information regarding these and other risks and uncertainties that
Loral may face, see the section entitled "Risk Factors" in Loral's Form 10-K,
Form 10-Q and Form 8-K filings with the SEC and as otherwise enumerated herein
or therein.
For more information regarding these and other risks and uncertainties that
Telesat may face, see the section entitled "Risk Factors" in Telesat's Form 20-F
and Form 6-K filings with the SEC and as otherwise enumerated herein or therein.
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