8-KLeadership ChangesExhibits & Filings

Globalstar, Inc. 8-K Report, Executive Changes (Nov 20, 2008)

Filed November 20, 2008For Securities:GSAT

Summary

Globalstar, Inc. filed an 8-K on November 20, 2008, reporting a significant change in its director compensation structure, effective November 14, 2008. Instead of receiving their final two quarterly restricted stock grants for 2008, the company's Board of Directors, including the CEO, was granted options to purchase 200,000 shares of common stock each. The exercise price for these options was set at $0.38 per share, reflecting the closing price on the grant date. This move appears to be an incentive for continued service through November 1, 2010, with a portion of the options subject to incremental forfeiture conditions tied to continued board membership. This change in compensation is notable for investors as it alters the equity compensation awarded to the highest leadership. While all options are vested, the forfeiture provisions introduce a performance-based element for a portion of the award. Investors should note the exercise price of $0.38, which provides context for potential future gains or losses on these options, and understand the company's strategy to retain board members through equity incentives during this period.

Key Highlights

  • 1Globalstar, Inc. modified its director compensation structure on November 14, 2008.
  • 2Directors will receive options to purchase 200,000 shares of common stock, replacing upcoming restricted stock grants.
  • 3The exercise price for the director options is $0.38 per share, matching the stock's closing price on the grant date.
  • 4The options are granted under the Amended and Restated 2006 Equity Incentive Plan.
  • 5All directors, including the Chairman and CEO, received these options.
  • 6While vested, 100,000 options per director are subject to decreasing incremental risk of forfeiture until November 1, 2010, contingent on continued service.
  • 7This compensation change aims to incentivize director retention through November 1, 2010.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report a change in the compensation structure for Globalstar, Inc.'s Board of Directors. Specifically, it details the granting of stock options to directors in lieu of previously planned restricted stock awards.

Instead of receiving the last two quarterly grants of restricted stock for 2008 (valued at $15,000 total), each director has been granted options to purchase 200,000 shares of Globalstar common stock at an exercise price of $0.38 per share. This is intended to compensate them for future service through November 1, 2010.

The options are vested, meaning directors can exercise them immediately if they choose. However, 100,000 of the options granted to each director are subject to forfeiture conditions tied to their continued service as a director until November 1, 2010. This means a portion of the award could be lost if they leave the board before that date.

The exercise price of $0.38 per share was the closing price of Globalstar's common stock on November 14, 2008, the date the options were granted. This price represents the cost for directors to purchase shares using their options. Any value realized from these options would depend on the future market price of Globalstar's stock exceeding this exercise price.