82 Devonshire Street
Boston, Massachusetts02109FIDELITY MANAGEMENT TRUST COMPANY NOTICE TO PARTICIPANTS IN THE FOLLOWING PLANS
The Conic Corporation Deferred Income Retirement Plan, The
Frequency Sources, Inc. 401(k) Retirement Savings Plan, The K&F
Industries Savings Plan, The Loral/Rolm Mil-Spec Corp. Retirement
Income Savings Plan, The Loral Aerospace Savings Plan, The Loral
Corporation Deferred Income Savings Plan, The Loral Defense Systems
Retirement Savings Plan, The Loral Defense Systems Savings and
Investment Plan, The Loral Electro-Optical Systems, Inc. 401(k)
Matching Contribution Plan, The Loral Fairchild Corp. Savings Plan,
The Loral Federal Systems Deferred Income Retirement Plan, The
Loral Infrared & Imaging Systems, Inc. Savings Plan, The Loral
Librascope Retirement Savings Plan, The Loral Vought Systems
Corporation Capitol Accumulation Plan, The Narda Microwave
Supplemental Retirement Savings Plan, and The Narda-Western
Operations 401(k) Deferred Income Retirement Plan
Dear Plan Participant:
Enclosed are tender offer materials and a Trustee Direction
Form relating to an offer by LAC Acquisition Corporation (the
"Purchaser"), a wholly owned subsidiary of Lockheed Martin
Corporation, to purchase all outstanding shares of Common Stock,
par value $.25 per share ("Shares"), of Loral Corporation (the
"Company") at $38.00 per share, net to the seller in cash, without
interest (the "Offer"). The tender offer materials comprised of
the Purchaser's Offer to Purchase, the Letter of Transmittal and
the Company's Recommendation Statement, which have been furnished
to you, together describe the terms and conditions of the Offer as
well as the facts and circumstances surrounding the Offer. SUCH
MATERIALS CONTAIN IMPORTANT INFORMATION THAT YOU NEED TO READ IN THEIR ENTIRETY PRIOR TO MAKING ANY DECISION REGARDING THE OFFER.
In a related transaction, following the consummation of the
Offer, the Company will distribute (the "Spin-Off") common stock of
Loral Space & Communications Ltd. to the holders of Shares on a
record date to be determined by the Board of Directors of the
Company. In no event shall the record date occur after acceptance
of tendered Shares for payment by the Purchaser. Even if you elect
to tender your Shares, you will be considered the holder for
purposes of the Spin-Off until the Purchaser accepts these Shares
for payment. The Company expects to distribute to shareholders an
information statement with respect to the business, operations and
management of this new corporation. A copy of the information
statement will be sent to you at that time.
Fidelity Management Trust Company ("Fidelity") is the trustee
of seven trusts (the "Trusts") established under the Plans. Under
the terms of the trust agreements between the Company and Fidelity
establishing the Trusts, in the case of a tender offer for any
Shares, each participant whose Plan account has an interest in
Loral Common Stock under the Trusts has the right to direct the
trustee to tender or not tender some or all of the Shares credited
to such participant's Plan account invested in Loral Common Stock
under the Trusts.
The Trusts now hold approximately seven and one tenth percent
(7.1%) of all the Company's outstanding Shares. The trust
agreements require Fidelity to tender the Shares held in the Trusts
in accordance with directions received from participants with an
interest in Loral Common Stock under the Trusts, and have been or
will be amended to require that, with respect to Shares for which
no instructions are received, Fidelity tender in accordance with
directions received from an independent fiduciary to be appointed
by the Company.
Direction to the Trustee
Only the Trustee can tender the Shares held by the Trusts.
However, participants whose Plan accounts are credited with Shares
held in Loral Common Stock under the Trusts have the opportunity to
direct Fidelity to tender such Shares pursuant to the Offer.
PLEASE NOTE THAT UNDER THE TERMS OF THE TRUSTS, FIDELITY IS REQUIRED TO HOLD YOUR INSTRUCTIONS IN CONFIDENCE AND IS NOT PERMITTED TO DISCLOSE THE CONTENTS OF YOUR DIRECTIONS TO THE COMPANY, THE PURCHASER OR ANY EMPLOYEE OR OFFICER THEREOF.
In order to be assured that your tender instructions to
Fidelity will be followed, you must, in accordance with the
procedures set forth below, complete, sign, date and return the
enclosed Direction Form to Fidelity as soon as possible, BUT IN NO
EVENT LATER THAT 12:00 MIDNIGHT, NEW YORK TIME, ON MONDAY, FEBRUARY5, 1996, UNLESS THE OFFER IS EXTENDED. PLEASE COMPLETE AND RETURN THE DIRECTION FORM EVEN IF YOU DECIDE NOT TO PARTICIPATE IN THE OFFER.
You may change, amend or rescind your directions to Fidelity
at any time prior to the deadline specified in the preceding
paragraph by delivering to Fidelity a new Direction Form. Upon
receipt of a timely change, amendment or rescission of a previously
delivered Direction Form, any previous instructions will be deemed
canceled. Additional Direction Forms and transmittal envelopes can
be obtained by telephoning the Loral Savings Plan Service Center at
1-800-354-7125. No facsimile transmittals of the Direction Form
will be accepted.
PLEASE NOTE THAT THE LETTER OF TRANSMITTAL HAS BEEN PROVIDEDFOR YOUR INFORMATION ONLY, AND CAN NOT BE USED TO TENDER THE SHARES CREDITED TO YOUR ACCOUNT.
Please note that on the reverse side of the Direction Form the
number of Shares credited to your account (based on your holdings
as of Tuesday, January 9, 1996) is indicated to the right of your
address. This number of Shares may fluctuate somewhat from January9, 1996 until February 2, 1996, the date the Trustee will begin the
process of tabulating directions, unless the Offer is extended, due
to additional employee and employer contributions. Because of this
fluctuation, the instructions on the Direction Form refer to the
percentage of Shares allocated to your account on February 2, 1996,
unless the Offer is extended.
IF YOUR DIRECTION FORM IS NOT TIMELY RECEIVED BY FIDELITY ATITS ADDRESS SET FORTH ON THE DIRECTION FORM, THE DECISION TO TENDER OR NOT TO TENDER THE SHARES CREDITED TO YOUR ACCOUNT WILL BE MADE BY AN INDEPENDENT FIDUCIARY TO BE APPOINTED BY THE COMPANY. YOUR DIRECTION FORM MUST BE RECEIVED BY FIDELITY AT ITS ADDRESS SET FORTH ON THE DIRECTION FORM BY 12:00 MIDNIGHT, NEW YORK TIME, ON MONDAY, FEBRUARY 5, 1996, UNLESS THE OFFER IS EXTENDED. BE SURE TO REVIEW ALL OF THE TENDER OFFER MATERIALS BEFORE YOUCOMPLETE YOUR DIRECTION FORM. FIDELITY MAKES NO RECOMMENDATION WITH RESPECT TO YOUR DECISION REGARDING THE OFFER. PLEASE REMEMBER TO RETURN YOUR DIRECTION FORM DIRECTLY TO FIDELITY IN THE ENCLOSED ENVELOPE, RATHER THAN TO THE COMPANY OR TO THE PURCHASER.
If you hold Shares directly, you will receive, under separate
cover, tender offer materials directly from the Purchaser, which
can be used to tender such Shares directly to the Purchaser. Those
tender offer materials may not be used to direct the Trustee to
tender or not tender the Shares credited to your account under the
Plans. The direction to tender or not tender Shares credited to
your account under the Plans may be made only in accordance with
the procedure set forth herein.
In accordance with the provisions of the Trusts, the proceeds
from the sale of Shares in your account will not be distributed to
you. Cash proceeds will be invested in the investment option
designated for such purposes in the trust agreements (either a pool
of guaranteed investment contracts or a money market fund). Shares
of Loral Space & Communications Corporation received in connection
with the Spin-Off will be retained in the Plan in a unitized stock
fund, and your account will be credited with a proportional number
of units in that fund. You may change the investment option in
which such proceeds are invested by telephoning the Loral Savings
Plan Center at 1-800-354-7125 in accordance with the normal
procedures for changing investment options.
If you require additional information concerning the procedure
to tender your Shares, please contact the Loral Savings Plan
Service Center at 1-800-354-7125. If you have any questions about
the terms and conditions of the Offer, please contact the
manager/dealer for the Offer, Bear Stearns, at 1-800-7216-9849.
DIRECTION FORM BEFORE COMPLETING THIS FORM, READ CAREFULLY THE ACCOMPANYING OFFER TO PURCHASE AND ALL OTHER ENCLOSED MATERIALS
In connection with the Offer to Purchase dated January 12, 1996, (the
"Offer"), made by LAC Acquisition Corporation, a Wholly Owned Subsidiary of
Lockheed Martin Corporation, a copy of which I have received, I hereby
instruct Fidelity Management Trust Company (the "Trustee") to tender the
shares of Loral Corporation Common Stock held in my account in the Plan
before the expiration of the Offer, as follows (check one box and
Box 1 ( ) I direct the Trustee to tender ALL of the shares of Loral
Corporation held in my account in the Plan, in accordance
with the terms of the Offer.
Box 2 ( ) I direct the Trustee to tender percent (insert a
percentage less than 100%) of the shares of Loral
Corporation held in my account in the Plan, in accordance
with the terms of the Offer, and not to tender the remainder
of such shares.
Box 3 ( ) I direct the Trustee NOT to tender any of the shares of
Loral Corporation held in my account in the Plan, in
accordance with the terms of the Offer.
The Trustee makes no recommendation to any Plan participant as to whether
to tender or not. Your instructions to the Trustee will be kept
confidential, and will not be disclosed to anyone at Loral Corporation or
Lockheed Martin Corporation.
PLEASE NOTE THAT IF YOU DO NOT SEND IN YOUR FORM, OR IF IT IS NOT RECEIVED BEFORE 12:00 MIDNIGHT NEW YORK TIME ON FEBRUARY 5, 1996, THE DECISION TO TENDER YOUR SHARES OR NOT TO TENDER YOUR SHARES WILL BE MADE BY AN INDEPENDENT FIDUCIARY APPOINTED BY LORAL CORPORATION. YOUR FORM MUST BE RECEIVED BEFORE 12:00 MIDNIGHT NEW YORK TIME AT P.O. BOX 9124, HINGHAM, MA02043 ON FEBRUARY 5, 1996 IN ORDER TO BE EFFECTIVE.
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Dates Referenced Herein and Documents Incorporated by Reference