Settlement to result in, among other items,
appointment of two new Minority Directors plus an additional
independent board member, establishment of a Strategic Review
Committee, requirement of majority of independent stockholders vote
on related party transactions and commitment to purchase a pro rata
share and provide backstop support for an equity offering
Globalstar, Inc. (NYSE American: GSAT) (“the Company”), together
with Mudrick Capital Management, L.P. (“Mudrick Capital”) and
Warlander Asset Management, LP (“Warlander”) and all other
litigation parties are pleased to announce that the parties have
entered into a Settlement Agreement related to the litigation
brought by Mudrick Capital and Warlander in Delaware Chancery Court
involving Globalstar and certain of its directors, officers and
employees.
As a result of the Settlement Agreement, the parties have agreed
to the addition of three new seasoned telecom executives to the
Company’s Board of Directors: Keith Cowan, Ben Wolff and Mike
Lovett. These new directors will be immediately appointed to the
Globalstar Board of Directors to fill three vacancies left by
existing board members who support this settlement and volunteered
to step down from their positions. Messrs. Cowan and Wolff will be
designated the “Minority Directors” and at the end of Minority
Directors’ terms such seats shall be filled by candidates elected
by a plurality vote of minority stockholders. Both Minority
Directors shall be appointed to a new, standing Strategic Review
Committee, and one Minority Director will be appointed to each of
the Compensation Committee and the Nominating & Corporate
Governance Committee. Additionally, Timothy Taylor, Vice President
of Thermo and Globalstar’s Vice President of Finance, Business
Operations and Strategy will join the board to fill a vacancy left
by a fourth board member retiring from his position on the
board.
The Strategic Review Committee will be comprised of Minority
Directors Ben Wolff, Keith Cowan, and two other directors, William
Hasler and Timothy Taylor. The Strategic Review Committee’s first
order of business shall be to assess financing options for
Globalstar. Furthermore, the Strategic Review Committee will have
exclusive authority for the review and oversight of certain events
and its approval shall be necessary for events including but not
limited to: (i) any acquisition by Thermo and/or any Jay Monroe
affiliated party or person of additional newly-issued securities of
Globalstar, subject to certain exceptions; (ii) any extraordinary
corporate transaction, such as a merger, reorganization or
liquidation, involving Globalstar or any of its subsidiaries; (iii)
any sale or transfer of a material amount of assets of Globalstar
or any sale or transfer of assets of any of its subsidiaries which
are material to Globalstar; (iv) any further change in the Board of
Directors of Globalstar, including any plans or proposals to change
the number or term of directors or to fill any vacancies on the
Board, provided that only elections of Minority Directors shall be
within the authority of the Strategic Review Committee; (v) any
material change in the present capitalization or dividend policy of
Globalstar; (vi) any transaction between the Company and Thermo or
one or more of its affiliates that has a value in excess of
$250,000 (subject to certain exceptions) and (vii) any other
material changes in Globalstar’s lines of business or corporate
structure. The Globalstar Certificate of Incorporation will be
amended to establish the Strategic Review Committee which shall
remain in place until such time as Thermo and its affiliates no
longer beneficially own 45% or more of Globalstar’s outstanding
stock. Additionally, the Certificate of Incorporation and Bylaws
will be amended to require a majority of independent stockholders
to vote on any related party transaction between Globalstar and Jay
Monroe, or Thermo and its and their respective affiliates, with a
value of $5 million or more (subject to certain exceptions).
Within five business days of an event of (i) refinancing of 85%
of Globalstar’s bank debt, (ii) refinancing of a minimum of $150
million of Globalstar’s bank debt with a minimum two year extension
of maturity on the remaining balance, or (iii) an extension of
maturity or amortization holiday on such debt of two years or more,
Thermo has agreed to convert all of its outstanding subordinated
debt into Globalstar common equity at the contractual conversion
price under its subordinated loan agreement. If triggered, this
conversion will have the additional benefit of immediately reducing
the Company’s debt by at least $116 million.
The Settlement Agreement requires Globalstar to conduct an
undiscounted equity offering (less any underwriting discount) of
its common stock to qualified and readily identifiable Globalstar
stockholders on a pro rata basis, based on ownership, in an amount
recommended by Globalstar’s management of not more than $60
million, exclusive of any funds raised pursuant to an underwriter
option. Thermo, Mudrick Capital and Warlander have agreed to
purchase their pro rata share of any such offering and to backstop
the balance offered to, but not purchased by, other Globalstar
stockholders, on a pro rata basis based on their respective
ownerships of Globalstar’s common stock. The settlement and any
related fee award is subject to confirmatory diligence and
confirmation and approval by the Delaware Chancery Court.
This press release shall not constitute an offer to sell or the
solicitation of any offer to buy, nor shall there be any sale of
these securities in any state or jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or
jurisdiction.
Jay Monroe, Executive Chairman of Globalstar, commented,
“Globalstar and Thermo are pleased with this outcome and happy to
put this litigation behind us. We would like to thank the outgoing
directors for their many years of service to the Company and would
like to welcome Ben, Keith and Mike to the Globalstar team. In the
last week, we have spent a significant amount of time with all
three of them and believe that they will be excellent board
members, especially given their deep telecom and spectrum
experience which is so important to our future plans.”
Mr. Monroe continued, “We are pleased to have reached agreement
with Mudrick Capital and Warlander and appreciate their support
moving forward. Litigation is costly and time consuming, and we
prefer to focus our time and resources on moving towards value
realization which this settlement frees us up to do. We continue to
believe in Globalstar’s potential and welcome the new directors to
help us realize it. Our management team looks forward to working
with the Strategic Review Committee and the full Board of Directors
on the continued thoughtful examination of our business.”
Jason Mudrick, the President and Chief Investment Officer of
Mudrick Capital and Eric Cole, Chief Executive Officer of
Warlander, together issued the following statement: “This
settlement reflects a constructive dialogue with the Globalstar
team and we look forward to continuing our collaborative
relationship in order to further enhance shareholder value. We
continue to strongly believe in the value of Globalstar’s assets
and its ability to monetize those assets. The details of this
settlement - including the minority shareholder provisions such as
the new Minority Directors, a new independent director, and the
Strategic Review Committee - provide us with additional confidence
for the future of this Company. We are also excited to have Ben,
Keith and Mike join the Globalstar board. Given their expertise in
the telecom sector and with successful spectrum transactions, we
believe they will add tremendous value immediately. We are
confident that the Settlement heralds a new era of sustainable
value creation for the benefit of all of Globalstar’s
stockholders.”
Ben Wolff, Keith Cowan and Mike Lovett jointly issued the
following statement: “We believe Globalstar has a unique collection
of assets and are excited to join the Board of Directors. We look
forward to working with the rest of the Board and the management
team to enhance value for all stakeholders.”
About Globalstar’s New Minority and Independent
Directors
Keith Cowan
Since January 2013, Mr. Cowan has served as the Chief Executive
Officer of Cowan Consulting Corporation LLC, a privately held
company that manages investments and provides strategic planning
and board advisory services. From July 2007 to January 2013, Mr.
Cowan was the President of Strategic Planning and Corporate
Initiatives at Sprint Corporation, with responsibilities that
included developing the long-term strategic plan for Sprint,
restructuring and managing Clearwire Corporation as a public
company consortium including Sprint, Comcast, Time Warner Cable,
Intel, Google, and Bright House Networks, and managing the sale of
control of Sprint to Softbank. From May 1996 to January 2007, Mr.
Cowan held a variety of roles at BellSouth Corporation, which
subsequently merged with AT&T, including Chief Development
Officer, Chief Network Field Officer and President of Marketing and
Product Management. Mr. Cowan’s time at BellSouth included his
instrumental role in the creation and governance of Cingular
Wireless and responsibility for entering, governing and exiting
many of BellSouth’s international wireless partnerships in Europe,
the Middle East, South America, and Asia.
Mr. Cowan has served as a board member of over a dozen private
companies, two public companies, and numerous not-for-profit and
civic organizations, including, currently, his service as Chairman
of the Board of Aegex Technologies, CX Technologies (ENGAGEcx),
Cobra Legal Solutions and Venadar LLC.
Ben Wolff
Mr. Wolff serves as the Chairman and CEO of Sarcos Robotics, a
global leader in mobile, dexterous, tele-operated robots. Mr.
Wolff served from 2009 to 2014 as Chief Executive Officer,
President and Chairman at satellite communications firm ICO Global
Communications which was subsequently renamed Pendrell Corp. In
2003, Mr. Wolff co-founded Clearwire Corporation, where he served
as President, CEO and Co-Chairman. Mr. Wolff oversaw the growth of
the company to more than $1 billion in revenues and 3,500
employees, raising more than $12 billion in debt and equity
financing during his tenure. Clearwire was sold to Sprint in 2013
for more than $14 billion. From 2004 to 2011, Mr. Wolff also served
as President of Eagle River Investments, a telecom and technology
focused private equity and venture capital fund, and as a member of
the board of directors of various public and private Eagle River
portfolio companies.
Michael Lovett
Since October 2012, Mr. Lovett has served as managing partner of
Eagle River Partners LLC, a privately held investment and advisory
company. Until April 2012, Mr. Lovett served as the CEO and
President of Charter Communications. Previously he was COO and
joined Charter in August 2003 as Senior Vice President of
Operations. Mr. Lovett’s career in cable and telecom related
companies began in 1980 with Centel Communications where he held a
number of positions in operations. He was with Jones Intercable
Inc. from 1989 to 1999 rising to Senior Vice President with
responsibility for operations in nine states; and AT&T
Broadband as Regional Vice President of Operations from June 1999
to November 2000. He served as Executive Vice President of
Operations for OneSecure Inc. a managed security service company
providing management/monitoring of firewalls and virtual private
networks from November 2000 to December 2001; and was Chief
Operating Officer for Voyant Technologies Inc. a voice conferencing
hardware/software solutions provider in Denver from December 2001
to August 2003.
About Globalstar
Globalstar is a leading provider of mobile satellite voice and
data services. Customers around the world in industries such as
government, emergency management, marine, logging, oil & gas
and outdoor recreation rely on Globalstar to conduct business
smarter and faster, maintain peace of mind and access emergency
personnel. Globalstar data solutions are ideal for various asset
and personal tracking, data monitoring, M2M and IoT applications.
The Company's products include mobile and fixed satellite
telephones, the innovative Sat-Fi satellite hotspot, Simplex and
Duplex satellite data modems, tracking devices and flexible service
packages.
About Mudrick Capital
Mudrick Capital Management, L.P. is an SEC-registered investment
adviser specializing in distressed credit and deep value event
driven investing. Mudrick Capital manages capital for a diverse
group of sophisticated institutions and individuals, including
endowments, foundations, insurance companies, private banks,
fund-of-funds, pensions, family offices and high net worth
individuals.
About Warlander Asset Management
Founded in 2015, Warlander Asset Management, LP is an
SEC-registered investment adviser that specializes in long/short,
credit-oriented investments, focused on opportunistically investing
across the full spectrum of global fixed income and
credit-sensitive equities.
This press release contains forward-looking statements within
the meaning of federal securities laws and regulations. These
forward-looking statements are identified by their use of terms and
phrases such as “believe,” “expect,” “intend,” “project,”
“anticipate,” “position,” and other similar terms and phrases,
including references to assumptions and forecasts of future
results. Forward-looking statements are not guarantees of future
performance and involve known and unknown risks, uncertainties and
other factors which may cause the actual results to differ
materially from those anticipated at the time the forward-looking
statements are made. These risks include, but are not limited to
the risk that the anticipated settlement may be terminated, the
consummation of the financing and those risks and uncertainties
associated with the Company’s business described from time to time
in its filings with the Securities and Exchange Commission,
including its Annual Report on Form 10-K filed on February 23,
2018. Although the Company believes the expectations reflected in
such forward-looking statements are based upon reasonable
assumptions, the Company can give no assurance that the
expectations will be attained or that any deviation will not be
material. All information in this release is as of the date of this
release, and the Company undertakes no obligation to update any
forward-looking statement to conform the statement to actual
results or changes in its expectations.
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version on businesswire.com: https://www.businesswire.com/news/home/20181217005352/en/
Globalstar contact information:Samantha
DeCastrosamantha.decastro@globalstar.com
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