þ
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
FOR THE TRANSITION PERIOD FROM __________ TO ________
|
Delaware
|
|
27-4757800
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
|
|
|
|
4553 Glencoe Avenue
|
|
|
Los Angeles, California
|
|
90292
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
o
|
|
Accelerated filer
þ
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
(Class)
|
|
|
(Outstanding as of May 6, 2015)
|
|
||
COMMON STOCK, $0.0001 PAR VALUE
|
|
|
77,104,388
|
|
SHARES*
|
|
Item No.
|
|
Description
|
|
Page
|
|
|
|
|
|
|
|
PART I — Financial Information
|
|
|
|
|
|
|
|
Item 1.
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
Item 2.
|
|
|
||
|
|
|
|
|
Item 3.
|
|
|
||
|
|
|
|
|
Item 4.
|
|
|
||
|
|
|
|
|
|
|
PART II — Other Information
|
|
|
|
|
|
|
|
Item 1.
|
|
|
||
|
|
|
|
|
Item 1A.
|
|
|
||
|
|
|
|
|
Item 2.
|
|
|
||
|
|
|
|
|
Item 3.
|
|
|
||
|
|
|
|
|
Item 4.
|
|
|
||
|
|
|
|
|
Item 5.
|
|
|
||
|
|
|
|
|
Item 6.
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
Revenue
|
|
$
|
100,305
|
|
|
$
|
85,968
|
|
Operating expenses:
|
|
|
|
|
||||
Cost of sales
|
|
69,426
|
|
|
65,117
|
|
||
Sales and marketing expenses
|
|
3,275
|
|
|
2,835
|
|
||
Product development
|
|
7,230
|
|
|
3,922
|
|
||
General and administrative
|
|
18,119
|
|
|
17,067
|
|
||
Amortization of intangible assets
|
|
5,983
|
|
|
6,419
|
|
||
Restructuring charges
|
|
302
|
|
|
—
|
|
||
Total operating expenses
|
|
104,335
|
|
|
95,360
|
|
||
Loss from operations
|
|
(4,030
|
)
|
|
(9,392
|
)
|
||
Other income (expense):
|
|
|
|
|
||||
Interest expense, net
|
|
(245
|
)
|
|
(161
|
)
|
||
Change in fair value of derivatives
|
|
954
|
|
|
(15,538
|
)
|
||
Other (expense) income, net
|
|
(796
|
)
|
|
199
|
|
||
Loss before income taxes
|
|
(4,117
|
)
|
|
(24,892
|
)
|
||
Income tax (benefit) expense
|
|
(686
|
)
|
|
1,257
|
|
||
Net loss
|
|
(3,431
|
)
|
|
(26,149
|
)
|
||
Net income attributable to non-controlling interests
|
|
—
|
|
|
194
|
|
||
Net loss attributable to Global Eagle Entertainment Inc. common stockholders
|
|
$
|
(3,431
|
)
|
|
$
|
(26,343
|
)
|
|
|
|
|
|
||||
Net loss per common share -- basic
|
|
$
|
(0.04
|
)
|
|
$
|
(0.37
|
)
|
Net loss per common share -- diluted
|
|
$
|
(0.06
|
)
|
|
$
|
(0.37
|
)
|
|
|
|
|
|
||||
Weighted average common shares - basic
|
|
76,874
|
|
|
71,978
|
|
||
Weighted average common shares - diluted
|
|
78,725
|
|
|
71,978
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
Net loss
|
|
$
|
(3,431
|
)
|
|
$
|
(26,149
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
||||
Unrealized foreign currency translation losses
|
|
(228
|
)
|
|
—
|
|
||
Unrealized gains (losses) on available for sale securities
|
|
|
|
|
||||
Unrealized gain on available for sale securities
|
|
—
|
|
|
91
|
|
||
Unrealized gain on available for sale securities, net
|
|
—
|
|
|
91
|
|
||
Other comprehensive (loss) income
|
|
(228
|
)
|
|
91
|
|
||
Comprehensive loss
|
|
(3,659
|
)
|
|
(26,058
|
)
|
||
Comprehensive income attributable to non-controlling interests
|
|
—
|
|
|
200
|
|
||
Comprehensive loss attributable to Global Eagle Entertainment Inc. common stockholders
|
|
$
|
(3,659
|
)
|
|
$
|
(26,258
|
)
|
|
Common Stock
|
Treasury Stock
|
Additional
|
Subscriptions
|
Accumulated
|
Accumulated Other
|
Total
|
||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Paid-in Capital
|
Receivable
|
Deficit
|
Comprehensive Income (Loss)
|
Stockholders' Equity
|
||||||||||||||||
Balance at December 31, 2014
|
79,626
|
|
$
|
8
|
|
(3,054
|
)
|
$
|
(30,659
|
)
|
$
|
645,110
|
|
$
|
(503
|
)
|
$
|
(301,331
|
)
|
$
|
4
|
|
$
|
312,629
|
|
Exercise of stock options and warrants
|
532
|
|
—
|
|
—
|
|
—
|
|
5,323
|
|
—
|
|
—
|
|
—
|
|
5,323
|
|
|||||||
Equity component of convertible senior notes
|
—
|
|
—
|
|
—
|
|
—
|
|
12,674
|
|
—
|
|
—
|
|
—
|
|
12,674
|
|
|||||||
Stock-based compensation
|
|
|
—
|
|
—
|
|
—
|
|
2,550
|
|
—
|
|
—
|
|
—
|
|
2,550
|
|
|||||||
Interest income on subscription receivable
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(6
|
)
|
—
|
|
—
|
|
(6
|
)
|
|||||||
Excess tax benefit related to the exercise of stock option
|
—
|
|
—
|
|
—
|
|
—
|
|
75
|
|
—
|
|
—
|
|
—
|
|
75
|
|
|||||||
Other comprehensive income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(228
|
)
|
(228
|
)
|
|||||||
Net loss
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(3,431
|
)
|
—
|
|
(3,431
|
)
|
|||||||
Balance at March 31, 2015
|
80,158
|
|
$
|
8
|
|
(3,054
|
)
|
$
|
(30,659
|
)
|
$
|
665,732
|
|
$
|
(509
|
)
|
$
|
(304,762
|
)
|
$
|
(224
|
)
|
$
|
329,586
|
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
||||
Net loss
|
$
|
(3,431
|
)
|
|
$
|
(26,149
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
8,165
|
|
|
9,395
|
|
||
Non-cash interest expense, net
|
97
|
|
|
—
|
|
||
Change in fair value of derivative financial instrument
|
(954
|
)
|
|
15,538
|
|
||
Stock-based compensation
|
2,550
|
|
|
2,616
|
|
||
Deferred income taxes
|
(3,748
|
)
|
|
(1,563
|
)
|
||
Other
|
170
|
|
|
81
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(6,733
|
)
|
|
1,533
|
|
||
Inventory and content library
|
1,205
|
|
|
(4,645
|
)
|
||
Prepaid expenses and other assets
|
(1,841
|
)
|
|
(4,986
|
)
|
||
Accounts payable and accrued expenses
|
44
|
|
|
4,472
|
|
||
Deferred revenue
|
(393
|
)
|
|
248
|
|
||
Other liabilities
|
1,115
|
|
|
587
|
|
||
NET CASH USED IN OPERATING ACTIVITIES
|
(3,754
|
)
|
|
(2,873
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
||||
Purchases of property and equipment
|
(2,651
|
)
|
|
(2,032
|
)
|
||
NET CASH USED IN INVESTING ACTIVITIES
|
(2,651
|
)
|
|
(2,032
|
)
|
||
|
|
|
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
||||
Proceeds from issuance of convertible senior notes
|
81,250
|
|
|
—
|
|
||
Repayments of notes payable
|
(282
|
)
|
|
(3,099
|
)
|
||
Proceeds from the exercise of common stock options
|
4,963
|
|
|
—
|
|
||
Other financing activities, net
|
(105
|
)
|
|
(239
|
)
|
||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
85,826
|
|
|
(3,338
|
)
|
||
Effects of exchange rate movements on cash and cash equivalents
|
221
|
|
|
—
|
|
||
Net increase (decrease) in cash and cash equivalents
|
79,642
|
|
|
(8,243
|
)
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
197,648
|
|
|
258,796
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
277,290
|
|
|
$
|
250,553
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||||
|
Content
|
|
Connectivity
|
|
Consolidated
|
|
Content
|
|
Connectivity
|
|
Consolidated
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Licensing and services
|
$
|
71,650
|
|
|
$
|
22,200
|
|
|
$
|
93,850
|
|
|
$
|
63,590
|
|
|
$
|
16,494
|
|
|
$
|
80,084
|
|
Equipment
|
—
|
|
|
6,455
|
|
|
6,455
|
|
|
—
|
|
|
5,884
|
|
|
5,884
|
|
||||||
Total revenue
|
71,650
|
|
|
28,655
|
|
|
100,305
|
|
|
63,590
|
|
|
22,378
|
|
|
85,968
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Licensing and services
|
50,002
|
|
|
13,698
|
|
|
63,700
|
|
|
46,144
|
|
|
13,722
|
|
|
59,866
|
|
||||||
Equipment
|
—
|
|
|
5,726
|
|
|
5,726
|
|
|
—
|
|
|
5,251
|
|
|
5,251
|
|
||||||
Total Cost of sales
|
50,002
|
|
|
19,424
|
|
|
69,426
|
|
|
46,144
|
|
|
18,973
|
|
|
65,117
|
|
||||||
Contribution profit
|
21,648
|
|
|
9,231
|
|
|
30,879
|
|
|
17,446
|
|
|
3,405
|
|
|
20,851
|
|
||||||
Other operating expenses
|
|
|
|
|
34,909
|
|
|
|
|
|
|
30,243
|
|
||||||||||
Loss from operations
|
|
|
|
|
$
|
(4,030
|
)
|
|
|
|
|
|
$
|
(9,392
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Net income (loss) (numerator):
|
|
|
|
|
||||
Net loss
|
|
$
|
(3,431
|
)
|
|
$
|
(26,149
|
)
|
Income allocable to non-controlling interests
|
|
—
|
|
|
194
|
|
||
Net loss for basic EPS
|
|
(3,431
|
)
|
|
(26,343
|
)
|
||
|
|
|
|
|
||||
Less: adjustment for change in fair value on warrants liability for diluted EPS after assumed exercise of warrants liability
|
|
954
|
|
|
—
|
|
||
Net loss for dilutive EPS
|
|
$
|
(4,385
|
)
|
|
$
|
(26,343
|
)
|
|
|
|
|
|
||||
Shares (denominator):
|
|
|
|
|
||||
Weighted-average shares for basic EPS
|
|
76,874
|
|
|
71,978
|
|
||
Effect of assumed exercise of warrants liability
|
|
1,851
|
|
|
—
|
|
||
Adjusted weighted-average share for diluted EPS
|
|
78,725
|
|
|
71,978
|
|
||
|
|
|
|
|
||||
Basic loss per share
|
|
$
|
(0.04
|
)
|
|
$
|
(0.37
|
)
|
Diluted loss per share
|
|
$
|
(0.06
|
)
|
|
$
|
(0.37
|
)
|
|
|
Three Months Ended
March 31, |
||||
|
|
2015
|
|
2014
|
||
|
|
|
|
|
||
Stock options
|
|
2,708
|
|
|
1,742
|
|
Restricted stock units
|
|
25
|
|
|
—
|
|
Non-employees stock options
|
|
3
|
|
|
—
|
|
Equity warrants
|
|
537
|
|
|
2,904
|
|
Liability warrants
|
|
—
|
|
|
4,785
|
|
Convertible notes
|
|
2,026
|
|
|
—
|
|
|
March 31, 2015
|
|
Quotes Prices in Active Markets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Other Unobservable Inputs (Level 3)
|
||||||||
Earn-out liability
(1)
|
$
|
1,710
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,710
|
|
Global Eagle warrants
(2)
|
51,660
|
|
|
51,660
|
|
|
—
|
|
|
—
|
|
||||
Total financial liabilities
|
$
|
53,370
|
|
|
$
|
51,660
|
|
|
$
|
—
|
|
|
$
|
1,710
|
|
|
December 31, 2014
|
|
Quotes Prices in Active Markets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Other Unobservable Inputs (Level 3)
|
||||||||
Earn-out liability
(1)
|
$
|
1,710
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,710
|
|
Global Eagle warrants
(2)
|
52,671
|
|
|
52,671
|
|
|
—
|
|
|
—
|
|
||||
Total financial liabilities
|
$
|
54,381
|
|
|
$
|
52,671
|
|
|
$
|
—
|
|
|
$
|
1,710
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Financial liabilities:
|
|
|
|
|
|
|
|
||||||||
Convertible senior notes
(1)
|
$
|
69,564
|
|
|
$
|
81,469
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Notes payable
|
$
|
2,760
|
|
|
$
|
2,760
|
|
|
$
|
3,015
|
|
|
$
|
3,015
|
|
|
Earn-Out Liability
|
||
Balance, December 31, 2014
|
$
|
1,710
|
|
Change in value
|
—
|
|
|
Balance, March 31, 2015
|
$
|
1,710
|
|
Balance at December 31, 2014
|
$
|
53,014
|
|
Currency translation adjustment
|
(258
|
)
|
|
Balance at March 31, 2015
|
$
|
52,756
|
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Leasehold improvements
|
$
|
2,023
|
|
|
$
|
1,592
|
|
Furniture and fixtures
|
1,932
|
|
|
2,293
|
|
||
Equipment
|
18,079
|
|
|
17,593
|
|
||
Computer equipment
|
5,400
|
|
|
4,115
|
|
||
Computer software
|
5,862
|
|
|
5,950
|
|
||
Automobiles
|
286
|
|
|
307
|
|
||
Buildings
|
2,649
|
|
|
2,649
|
|
||
Albatross (aircraft)
|
425
|
|
|
425
|
|
||
Other
|
1,040
|
|
|
1,501
|
|
||
Total property, plant, and equipment
|
37,696
|
|
|
36,425
|
|
||
Accumulated depreciation
|
(13,292
|
)
|
|
(12,774
|
)
|
||
Property, plant, and equipment, net
|
$
|
24,404
|
|
|
$
|
23,651
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
Depreciation expense:
|
|
|
|
|
||||
Cost of sales
|
|
$
|
667
|
|
|
$
|
721
|
|
Sales and marketing
|
|
155
|
|
|
123
|
|
||
Product development
|
|
341
|
|
|
170
|
|
||
General and administrative
|
|
869
|
|
|
623
|
|
||
Total depreciation expense
|
|
$
|
2,032
|
|
|
$
|
1,637
|
|
|
|
|
|
|
|
|
|
March 31, 2015
|
||||||||
|
Weighted Average Useful Lives
|
|
Gross Carrying Value
|
Accumulated Amortization
|
Net Carrying Value
|
||||||
Intangible assets:
|
|
|
|
|
|
||||||
Definite life:
|
|
|
|
|
|
||||||
Existing technology - software
|
7 years
|
|
$
|
2,575
|
|
$
|
(797
|
)
|
$
|
1,778
|
|
Existing technology - games
|
5 years
|
|
12,331
|
|
(5,343
|
)
|
6,988
|
|
|||
Developed technology
|
8 years
|
|
7,317
|
|
(1,372
|
)
|
5,945
|
|
|||
Customer relationships
|
7.2 years
|
|
119,879
|
|
(35,143
|
)
|
84,736
|
|
|||
Other
|
2.5 years
|
|
7,310
|
|
(3,800
|
)
|
3,510
|
|
|||
Content library (acquired post Business Combination)
|
1.5 years
|
(1)
|
34,735
|
|
(22,278
|
)
|
12,457
|
|
|||
Content library (acquired in the Business Combination)
|
1.5 years
|
|
14,298
|
|
(14,298
|
)
|
—
|
|
|||
|
|
|
$
|
198,445
|
|
$
|
(83,031
|
)
|
$
|
115,414
|
|
Currency translation adjustment
|
|
|
|
|
(130
|
)
|
|||||
Total intangible assets
|
|
|
|
|
$
|
115,284
|
|
|
|
|
December 31, 2014
|
||||||||
|
Weighted Average Useful Lives
|
|
Gross Carrying Value
|
Accumulated Amortization
|
Net Carrying Value
|
||||||
Intangible assets:
|
|
|
|
|
|
||||||
Definite life:
|
|
|
|
|
|
||||||
Existing technology - software
|
7 years
|
|
$
|
2,575
|
|
$
|
(705
|
)
|
$
|
1,870
|
|
Existing technology - games
|
5 years
|
|
12,331
|
|
(4,727
|
)
|
7,604
|
|
|||
Developed technology
|
8 years
|
|
7,317
|
|
(1,143
|
)
|
6,174
|
|
|||
Customer relationships
|
7.2 years
|
|
119,879
|
|
(30,437
|
)
|
89,442
|
|
|||
Other
|
2.5 years
|
|
7,319
|
|
(3,448
|
)
|
3,871
|
|
|||
Content library (acquired in Business Combination)
|
1.5 years
|
|
14,298
|
|
(14,148
|
)
|
150
|
|
|||
Content library (acquired post Business Combination)
|
1.5 years
|
(1)
|
31,949
|
|
(18,586
|
)
|
13,363
|
|
|||
Total intangible assets
|
|
|
$
|
195,668
|
|
$
|
(73,194
|
)
|
$
|
122,474
|
|
Year ending December 31,
|
Amount
|
||
2015 (remaining nine months)
|
$
|
26,927
|
|
2016
|
25,505
|
|
|
2017
|
19,481
|
|
|
2018
|
15,874
|
|
|
2019
|
10,992
|
|
|
Thereafter
|
16,505
|
|
|
Total
|
$
|
115,284
|
|
|
Three Months Ended March 31,
|
||||
|
2015
|
|
2014
|
||
Common stock price on grant date
|
$13.14
|
|
$16.88
|
||
Expected life (in years)
|
4.0
|
|
|
4.0
|
|
Risk-free interest rate
|
1.31
|
%
|
|
1.75
|
%
|
Expected stock volatility
|
50
|
%
|
|
65
|
%
|
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
Fair value of stock options granted
|
$5.37
|
|
$8.48
|
Global Eagle Stock Option Plan
|
Shares (in thousands)
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (in years)
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Outstanding at January 1, 2015
|
5,771
|
|
|
$
|
10.64
|
|
|
|
|
|
|
|
Granted
|
795
|
|
|
$
|
13.14
|
|
|
|
|
|
||
Exercised
|
(513
|
)
|
|
$
|
9.84
|
|
|
|
|
|
||
Forfeited
|
(121
|
)
|
|
$
|
12.59
|
|
|
|
|
|
||
Outstanding at March 31, 2015
|
5,932
|
|
|
$
|
11.01
|
|
|
3.73
|
|
$
|
14,161
|
|
Vested and expected to vest at March 31, 2015
|
5,122
|
|
|
$
|
10.95
|
|
|
3.64
|
|
$
|
12,706
|
|
Exercisable at March 31, 2015
|
1,471
|
|
|
$
|
10.44
|
|
|
2.75
|
|
$
|
4,479
|
|
|
Units (in thousands)
|
|
Weighted Average Grant Date Fair Value
|
|
Aggregate Intrinsic Value (in thousands)
|
|||||
Outstanding at January 1, 2015
|
59
|
|
|
$
|
12.90
|
|
|
|
||
Granted
|
123
|
|
|
$
|
13.15
|
|
|
|
||
Forfeited
|
(6
|
)
|
|
$
|
12.90
|
|
|
|
||
Balance nonvested at March 31, 2015
|
176
|
|
|
$
|
13.07
|
|
|
$
|
2,359
|
|
Vested and expected to vest at March 31, 2015
|
155
|
|
|
$
|
13.07
|
|
|
$
|
2,060
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Stock-based compensation expense:
|
|
|
|
|
||||
Cost of services
|
|
$
|
41
|
|
|
$
|
—
|
|
Sales and marketing expenses
|
|
26
|
|
|
—
|
|
||
Product development
|
|
313
|
|
|
—
|
|
||
General and administrative
|
|
2,170
|
|
|
2,616
|
|
||
Total stock-based compensation expense
|
|
$
|
2,550
|
|
|
$
|
2,616
|
|
|
Weighted Average Exercise Price per Warrant
|
|
Number of Warrants (as converted) (in thousands)
|
|
Weighted Average Remaining Life
(in years)
|
|||
Common stock warrants
|
$
|
8.79
|
|
|
690
|
|
|
1.97
|
Series C Preferred stock warrants
|
$
|
8.74
|
|
|
734
|
|
|
2.19
|
Global Eagle Warrants
|
|
Number of Warrants (in thousands)
|
|
Weighted Average Exercise price
|
|
Weighted Average Remaining Contractual Term (in years)
|
|||
Outstanding at January 1, 2015
|
|
10,149
|
|
|
$
|
11.5
|
|
|
|
Exercised
|
|
(19
|
)
|
|
11.5
|
|
|
|
|
Outstanding and exercisable at March 31, 2015
|
|
10,130
|
|
|
$
|
11.5
|
|
|
2.84
|
Years Ending December 31,
|
Amount
|
||
2015 (remaining nine months)
|
$
|
639
|
|
2016
|
861
|
|
|
2017
|
861
|
|
|
2018
|
61
|
|
|
2019
|
62
|
|
|
Thereafter
|
83,180
|
|
|
Total
|
$
|
85,664
|
|
|
Three Months Ended March 31,
|
||||
|
2015
|
|
2014
|
||
Southwest Airlines
|
25
|
%
|
|
14
|
%
|
(1)
|
The Company estimates that it will incur total expenses relating to employee termination benefits, which primarily include severance and transitional-related expenses, of approximately
$2.7 million
, all of which represents cash expenditures which were incurred and expensed through
March 31, 2015
.
|
(2)
|
In connection with the closure of its German operations pursuant to the Plan, the Company expects disposals of approximately
11,000
square feet of leased facilities in Duisburg and Munich, Germany, representing approximately
6%
of its global facilities square footage. The Company incurred an aggregate of approximately
$0.4 million
of facilities disposal charges pursuant to the Plan through
March 31, 2015
.
|
(3)
|
Beginning in the third quarter of 2014 through the first half of 2015, the Company anticipates incurring periodic restructuring expenditures in an aggregate amount of
$1.5
to
$2.0 million
, comprised of legal and professional fees associated with the execution of the Plan. Through
March 31, 2015
, the Company has incurred and expensed approximately
$1.4 million
in professional fees in connection with the Plan.
|
|
|
Termination benefits
|
|
Leases and other contractual obligations
|
|
Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Restructuring charges
|
|
$
|
238
|
|
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
302
|
|
Total Restructuring charges
|
|
$
|
238
|
|
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
302
|
|
|
|
Termination Costs
|
|
Leases and other contractual obligations
|
|
Other
|
|
Total
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Expense
|
|
$
|
2,726
|
|
|
$
|
386
|
|
|
$
|
1,412
|
|
|
$
|
4,524
|
|
Payments
|
|
(2,726
|
)
|
|
(366
|
)
|
|
(810
|
)
|
|
(3,902
|
)
|
||||
Restructuring reserves as of March 31,2015
|
|
$
|
—
|
|
|
$
|
20
|
|
|
$
|
602
|
|
|
$
|
622
|
|
(1)
|
We estimate that we will incur total expenses relating to employee termination benefits, which primarily include severance and transitional-related expenses, of approximately
$2.7 million
, all of which represents cash expenditures which were incurred and expensed through March 31, 2015.
|
(2)
|
In connection with the closure of our German operations pursuant to the Plan, we expect disposals of approximately
11,000
square feet of leased facilities in Duisburg and Munich, Germany, representing approximately
6%
of our global facilities square footage. We incurred an aggregate of approximately
$0.4 million
of facilities disposal charges pursuant to the Plan through
March 31, 2015
.
|
(3)
|
Beginning in the third quarter of 2014 through the first half of 2015, we anticipate incurring periodic restructuring expenditures in an aggregate amount of
$1.5
to
$2.0 million,
comprised of legal and professional fees associated with the execution of the Plan. Through March 31, 2015, we have incurred and expensed approximately $1.4 million in professional fees in connection with the Plan.
|
|
Three Months Ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Revenue
|
$
|
100,305
|
|
|
$
|
85,968
|
|
Operating expenses:
|
|
|
|
||||
Cost of sales
|
69,426
|
|
|
65,117
|
|
||
Sales and marketing expenses
|
3,275
|
|
|
2,835
|
|
||
Product development
|
7,230
|
|
|
3,922
|
|
||
General and administrative
|
18,119
|
|
|
17,067
|
|
||
Amortization of intangible assets
|
5,983
|
|
|
6,419
|
|
||
Restructuring charges
|
302
|
|
|
—
|
|
||
Total operating expenses
|
104,335
|
|
|
95,360
|
|
||
Loss from operations
|
(4,030
|
)
|
|
(9,392
|
)
|
||
Other income (expense):
|
|
|
|
||||
Interest expense, net
|
(245
|
)
|
|
(161
|
)
|
||
Change in fair value of derivatives
|
954
|
|
|
(15,538
|
)
|
||
Other (expense) income, net
|
(796
|
)
|
|
199
|
|
||
Loss before income taxes
|
(4,117
|
)
|
|
(24,892
|
)
|
||
Income tax (benefit) expense
|
(686
|
)
|
|
1,257
|
|
||
Net loss
|
(3,431
|
)
|
|
(26,149
|
)
|
||
Net income attributable to non-controlling interests
|
—
|
|
|
194
|
|
||
Net loss attributable to Global Eagle Entertainment Inc. common stockholders
|
(3,431
|
)
|
|
(26,343
|
)
|
||
|
|
|
|
||||
Net loss per common share - basic
|
$
|
(0.04
|
)
|
|
$
|
(0.37
|
)
|
Net loss per common share - diluted
|
$
|
(0.06
|
)
|
|
$
|
(0.37
|
)
|
|
|
|
|
||||
Weighted average common shares - basic
|
76,874
|
|
|
71,978
|
|
||
Weighted average common shares - diluted
|
78,725
|
|
|
71,978
|
|
|
|
Three Months Ended
March 31, |
||||||
|
|
2015
|
|
2014
|
||||
Cost of sales
|
|
667
|
|
|
721
|
|
||
Sales and marketing
|
|
155
|
|
|
123
|
|
||
Product development
|
|
341
|
|
|
170
|
|
||
General and administrative
|
|
869
|
|
|
623
|
|
||
Total depreciation expense
|
|
$
|
2,032
|
|
|
$
|
1,637
|
|
|
|
Three Months Ended
March 31, |
||||||
Stock-based compensation expense:
|
|
2015
|
|
2014
|
||||
Cost of sales
|
|
$
|
41
|
|
|
$
|
—
|
|
Sales and marketing expenses
|
|
26
|
|
|
—
|
|
||
Product development
|
|
313
|
|
|
—
|
|
||
General and administrative
|
|
2,170
|
|
|
2,616
|
|
||
Total stock-based compensation expense
|
|
$
|
2,550
|
|
|
$
|
2,616
|
|
|
|
Three Months Ended
March 31, |
||||
|
|
2015
|
|
2014
|
||
Revenue
|
|
100
|
%
|
|
100
|
%
|
Operating expenses:
|
|
|
|
|
||
Cost of sales
|
|
69
|
%
|
|
76
|
%
|
Sales and marketing expenses
|
|
3
|
%
|
|
3
|
%
|
Product development
|
|
7
|
%
|
|
5
|
%
|
General and administrative
|
|
18
|
%
|
|
20
|
%
|
Amortization of intangible assets
|
|
6
|
%
|
|
7
|
%
|
Restructuring charges
|
|
—
|
%
|
|
—
|
%
|
Total operating expenses
|
|
104
|
%
|
|
111
|
%
|
Loss from operations
|
|
(4
|
)%
|
|
(11
|
)%
|
Other income (expense), net
|
|
—
|
%
|
|
(18
|
)%
|
Loss before income taxes
|
|
(4
|
)%
|
|
(29
|
)%
|
Income tax (benefit) expense
|
|
(1
|
)%
|
|
1
|
%
|
Net loss
|
|
(3
|
)%
|
|
(30
|
)%
|
Net income attributable to non-controlling interests
|
|
—
|
%
|
|
—
|
%
|
Net loss attributable to common stockholders
|
|
(3
|
)%
|
|
(31
|
)%
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||||
|
Content
|
|
Connectivity
|
|
Consolidated
|
|
Content
|
|
Connectivity
|
|
Consolidated
|
||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Licensing and services
|
$
|
71,650
|
|
|
$
|
22,200
|
|
|
$
|
93,850
|
|
|
$
|
63,590
|
|
|
$
|
16,494
|
|
|
$
|
80,084
|
|
Equipment
|
—
|
|
|
6,455
|
|
|
6,455
|
|
|
—
|
|
|
5,884
|
|
|
5,884
|
|
||||||
Total revenue
|
71,650
|
|
|
28,655
|
|
|
100,305
|
|
|
63,590
|
|
|
22,378
|
|
|
85,968
|
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of sales
|
50,002
|
|
|
19,424
|
|
|
69,426
|
|
|
46,144
|
|
|
18,973
|
|
|
65,117
|
|
||||||
Contribution profit
|
21,648
|
|
|
9,231
|
|
|
30,879
|
|
|
17,446
|
|
|
3,405
|
|
|
20,851
|
|
||||||
Other operating expenses
|
|
|
|
|
34,909
|
|
|
|
|
|
|
30,243
|
|
||||||||||
Loss from operations
|
|
|
|
|
$
|
(4,030
|
)
|
|
|
|
|
|
$
|
(9,392
|
)
|
|
Three Months Ended March 31,
|
% Change
|
|||||||
|
2015
|
|
2014
|
2015 to 2014
|
|||||
Services
|
$
|
22,200
|
|
|
$
|
16,494
|
|
35
|
%
|
Equipment revenue
|
6,455
|
|
|
5,884
|
|
10
|
%
|
||
Total revenue Connectivity segment
|
$
|
28,655
|
|
|
$
|
22,378
|
|
28
|
%
|
|
Three Months Ended March 31,
|
% Change
|
|||||||
|
2015
|
|
2014
|
2015 to 2014
|
|||||
Licensing revenue
|
$
|
71,650
|
|
|
$
|
63,590
|
|
13
|
%
|
|
Three Months Ended March 31,
|
% Change
|
|||||||
|
2015
|
|
2014
|
2015 to 2014
|
|||||
Service cost of sales
|
$
|
13,698
|
|
|
$
|
13,722
|
|
—
|
%
|
Equipment cost of sales
|
5,726
|
|
|
5,251
|
|
9
|
%
|
||
Total Connectivity cost of sales
|
$
|
19,424
|
|
|
$
|
18,973
|
|
2
|
%
|
|
Three Months Ended March 31,
|
% Change
|
|||||||
|
2015
|
|
2014
|
2015 to 2014
|
|||||
Content cost of sales
|
$
|
50,002
|
|
|
$
|
46,144
|
|
8
|
%
|
|
Three Months Ended March 31,
|
% Change
|
|||||||
|
2015
|
|
2014
|
2015 to 2014
|
|||||
Sales and marketing expenses
|
$
|
3,275
|
|
|
$
|
2,835
|
|
16
|
%
|
Product development
|
7,230
|
|
|
3,922
|
|
84
|
%
|
||
General and administrative
|
18,119
|
|
|
17,067
|
|
6
|
%
|
||
Amortization of intangible assets
|
5,983
|
|
|
6,419
|
|
(7
|
)%
|
||
Restructuring charges
|
302
|
|
|
—
|
|
—
|
%
|
|
Three months ended March 31,
|
||||||
|
2015
|
|
2014
|
||||
Net cash used in operating activities
|
$
|
(3,754
|
)
|
|
$
|
(2,873
|
)
|
Net cash used in investing activities
|
$
|
(2,651
|
)
|
|
$
|
(2,032
|
)
|
Net cash provided by (used in) financing activities
|
$
|
85,826
|
|
|
$
|
(3,338
|
)
|
|
March 31,
2015 |
|
December 31,
2014 |
||||
Bank Loans
|
$
|
1,831
|
|
|
$
|
2,071
|
|
Bank Debt
|
$
|
928
|
|
|
$
|
943
|
|
Convertible Senior Notes
|
$
|
69,564
|
|
|
$
|
—
|
|
Years Ending December 31,
|
Amount
|
||
2015 (remaining nine months)
|
$
|
639
|
|
2016
|
861
|
|
|
2017
|
861
|
|
|
2018
|
61
|
|
|
2019
|
62
|
|
|
Thereafter
|
83,180
|
|
|
Total
|
$
|
85,664
|
|
|
Three Months Ended March 31,
|
||||
|
2015
|
|
2014
|
||
Southwest Airlines
|
25
|
%
|
|
14
|
%
|
GLOBAL EAGLE ENTERTAINMENT INC.
|
|
By:
|
/s/ Michael Zemetra
|
|
Michael Zemetra
|
|
Chief Financial Officer and Treasurer
|
|
(principal financial officer, principal accounting officer and duly authorized officer)
|
Exhibit
|
|
Description
|
4.1
|
|
Indenture (including the Form of Convertible Note), dated as of February 18, 2015, with respect to the Company’s 2.75% Convertible Senior Notes due 2035, between the Company and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (File No. 001-35176), filed with the SEC on February 19, 2015).
|
|
|
|
10.1
|
|
Consent to Loan and Security Agreement, dated as of February 6, 2015, by and among Citibank, N.A., the Company, and the direct or indirect domestic subsidiaries of the Company listed on Schedule 1 thereto or otherwise a party thereto from time to time (incorporated by reference to Exhibit 10.37 to the Company’s Annual Report on Form 10-K (File No. 001-35176) filed with the SEC on March 17, 2015).
|
|
|
|
10.2*
|
|
Amendment No. 1 to the Framework Agreement, dated February 11, 2015, between the Company and New Skies Satellites B.V. (incorporated by reference to Exhibit 10.39 of the Company’s Annual Report on Form 10-K (File No. 001-35176), filed with the SEC on March 17, 2015).
|
|
|
|
10.3*
|
|
Amendment No. 1 to the Amended and Restated Master Services Agreement and Master Purchase Agreement, dated February 12, 2015 between Hughes Network Systems, LLC and Row 44, Inc.
|
|
|
|
10.4
|
|
Amendment No. 1 to the Executive Employment Agreement by and between the Company and David M. Davis (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-35176) filed with the SEC on April 16, 2015.
|
|
|
|
10.5
|
|
Non-Employee Director Compensation Policy.
|
|
|
|
10.6
|
|
Form of Restricted Stock Unit Award Agreement for Non-Employee Directors.
|
|
|
|
10.7
|
|
Form of Restricted Stock Unit Award Agreement for Executives.
|
|
|
|
10.8*
|
|
2015 Global Eagle Entertainment Inc. Annual Incentive Plan.
|
|
|
|
31.1
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
|
|
|
32.1
|
|
Section 1350 Certification of Chief Executive Officer
|
|
|
|
32.2
|
|
Section 1350 Certification of Chief Financial Officer
|
|
|
|
101.1
|
|
The following financial information from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 formatted in eXtensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets as of March 31, 2015 (Unaudited) and December 31, 2014; (ii) Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014; (iii) Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2015 and 2014; (iv) Unaudited Condensed Consolidated Statement of Stockholders' Equity for the three months ended March 31, 2015; (v) Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.
|
|
|
|
a.
|
Except for amounts disputed in good faith by Customer, Customer shall make each and every Service Fee payment [***] without offset, withholding or deduction of any kind, by wire transfer to such bank account as Hughes may designate by notice to Customer. Each payment is considered to have been received when Hughes’ bank account has been credited with such payment. Any undisputed payment due from Customer (and any disputed payment later determined to have been correct) that is not received on the date it is due will bear interest at the rate of the lesser of [***] per month or the maximum rate permitted by law, calculated from the date payment was due until the date it is received. [***] For any period during which there is a Confirmed Outage, SES shall apply an Outage Credit.
|
c)
|
The Services to be provided by HNS to the Customer will consist of the following:
|
i.
|
Satellite capacity necessary to support Customer applications:
|
ii.
|
Evaluate satellite capacity for Customer application with respect to link budgets, skew angles, etc.
|
iii.
|
Generate coverage maps for the satellite capacity under consideration
|
iv.
|
Assist in satellite selection based on capacity and coverage requirements for new or expansion capacity
|
v.
|
Create frequency plans for new or expansions
|
vi.
|
Plan and implement space segment
|
vii.
|
Interface with Provider to report and recover network from any external RF interferences
|
viii.
|
Act as a liaison between Customer and Provider to resolve any interference cause by Customer
|
h)
|
Termination or Suspension of Service
|
1.
|
Acceptance of Terms and Conditions
. To be eligible to receive this Award, you must sign this Agreement and return it to [____________] within 30 days after the Award Date. By signing this Agreement, you agree to be bound by the terms and conditions herein, the Plan and any and all conditions established by the Corporation in connection with Awards issued under the Plan, and you further acknowledge and agree that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against the Corporation or any Subsidiary (collectively, the “
Global Eagle Companies
”) directly or indirectly, or give rise to any cause of action at law or in equity against the Global Eagle Companies.
|
2.
|
Grant of Restricted Stock Units
. Subject to the restrictions, limitations, terms and conditions specified in the Plan, the Prospectus for the Plan (the “
Plan Prospectus
”), and this Agreement, the Corporation hereby grants you as of the Award Date
[number]
RSUs. These RSUs will remain restricted until the vesting date set forth below (the “
Vesting Date
”) or, if earlier, an event described in either Section 5 (death or Disability) or Section 7 (Change in Control) below. Prior to becoming vested, the RSUs are not transferable by you by means of sale, assignment, exchange, pledge, or otherwise. On the below-stated Vesting Date on which you continue to serve as a director of the Corporation, you will vest in the below-stated percentage of the total number of RSUs awarded in this Agreement:
|
Vesting Date
|
Vested Percentage
|
13-month anniversary
of Award Date
|
100%
|
3.
|
Dividend Equivalents
. Subject to the restrictions, limitations and conditions described in the Plan, dividend equivalents payable on the RSUs will be accrued on your behalf at the time that cash dividends are otherwise paid to owners of Common Stock. Accrued dividend equivalent balances will be paid to you without interest upon the distribution of the Shares following the Vesting Date.
|
4.
|
Distribution of Shares upon Vesting Date or Subsequent Deferral Date
. The relevant Shares attributable to the RSUs that have become vested under Paragraph 2 above will be delivered to you within five business days after the Vesting Date. In lieu of receiving Shares on such Vesting Date, you may elect to defer the issuance of Shares payable with respect to the RSUs to the date that is five years after the Vesting Date (the “
Subsequent Deferral Date
”). An election to choose a Subsequent Deferral Date shall be made within thirty days after the Award Date and shall be on such terms and conditions as specified by the Committee. This Paragraph 4 shall be interpreted and administered consistent with the requirements of Treas. Reg. Sect. §1.409A-2(b).
|
5.
|
Death or Disability
.
In the event that you cease to serve as a director of the Corporation because of your death or Disability prior to the Vesting Date or the Subsequent Deferral Date (if you have elected one), all unvested RSUs will vest as of the date of death or the date you are determined to have suffered a Disability, and the shares attributable to such RSUs be distributed during the first two months of the year immediately following the calendar year in which you die or suffered a Disability. Notwithstanding the foregoing, if you elected a Subsequent Deferral Date, a termination due to Disability under this Paragraph 5 must also constitute a “disability” as defined in Treasury Regulation § 1.409A-3(i)(4) in order for payment to be made on an accelerated basis as described in this Paragraph 5.
|
6.
|
Termination Other than as a Result of Death or Disability.
If you cease to serve as a director of the Corporation for any reason other than death or Disability, then all unvested RSUs at such time are forfeited on the date your service terminates. If you terminate services as a director under this Paragraph 6 and you elected a Subsequent Deferral Date, then the shares attributable to any vested RSUs will be distributed within five business days after such termination so long as it qualifies as a “separation from service” under Section 409A of the Code.
|
7.
|
Change of Control.
In the event of a Change of Control prior to the Vesting Date or the Subsequent Deferral Date (if you have elected one), all restrictions on outstanding RSUs shall lapse, and RSUs shall be paid out as promptly as practicable. Notwithstanding the foregoing, if you elected a Subsequent Deferral Date, a transaction or event must also constitute a “change in control event,” as defined in Treasury Regulation § 1.409A-3(i)(5) in order for payment to be made on an accelerated basis. .
|
8.
|
Taxes
. You are personally responsible for the proper reporting and payment of all taxes related to distribution and payment of accrued dividend equivalent balances. The Global Eagle Companies shall have the right to deduct from any Award, an amount equal to any income, social, or other taxes of any kind required by law to be withheld in connection with the settlement of the RSUs or other securities pursuant to this Agreement. If the distribution of RSUs is subject to tax withholding, such taxes will be settled by withholding cash and/or a number of Shares with a market value not less than the amount of such taxes. Any cash from dividend equivalents remaining after withholding taxes are paid will be paid in cash to you. If withholding of taxes is not required, none will be taken and the gross number of Shares will be distributed and dividend payments made.
|
9.
|
Adjustments
.
If the number of outstanding Shares is changed as a result of a stock split or the like without additional consideration to the Corporation, the number of RSUs subject to this Award shall be adjusted to correspond to the change in the outstanding Shares.
|
10.
|
Rights as a Stockholder
. Except as provided in Paragraph 3 above (regarding dividends), by accepting this Award, you shall have no rights as a stockholder of the Corporation in respect of the RSUs, including the right to vote until and unless the RSUs have vested and ownership of Shares issuable upon vesting of the RSUs has been transferred to you.
|
11.
|
Public Offer Waiver
. By voluntarily accepting this Award, you acknowledge and understand that your rights under the Plan are offered to you strictly as a director of the Corporation and that this Award of RSUs is not an offer of securities made to the general public.
|
12.
|
Conformity with the Plan.
This Award is intended to conform in all respects with, and is subject to, all applicable provisions of the Plan. Inconsistencies between this Agreement, the Plan Prospectus or the Plan shall be resolved in accordance with the terms of the Plan. By your acceptance of this Agreement, you agree to be bound by all of the terms of this Agreement, the Plan, and the Plan Prospectus.
|
13.
|
Interpretations.
Any dispute, disagreement or question that arises under, or as a result of, or in any way relates to the interpretation, construction or application of the terms of this Agreement, the Plan, or the Plan Prospectus will be determined and resolved by the Committee or its authorized delegate. Such determination or resolution by the Committee or its authorized delegate will be final, binding and conclusive for all purposes.
|
14.
|
Consent to Transfer Personal Data
. By accepting this Award, you voluntarily acknowledge and consent to the collection, use, processing and transfer of personal data as described in this Paragraph. You are not obliged to consent to such collection, use, processing and transfer of personal data. The Corporation holds certain personal information about you, that may include your name, home address and telephone number, fax number, email address, family size, marital status, sex, beneficiary information, emergency contacts, passport/visa information, age, language skills, drivers license information, date of birth, birth certificate, social security number or other employee identification number, nationality, C.V. (or resume), wage history, job title, current wage and benefit information, personal bank account number, tax related information, plan or benefit enrollment forms and elections, option or benefit statements, any Shares or directorships in the Corporation, details of all options or any other entitlements to Shares awarded, canceled, purchased, vested, unvested or outstanding in your favor, for the purpose of managing and administering the Plan (“
Data
”). The Corporation may transfer Data to any third parties assisting the Corporation in the implementation, administration and management of the Plan. These recipients may be located throughout the world, including the United States. You authorize them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and the subsequent holding of Shares on your behalf to a broker or other third party with whom you may elect to deposit any Shares acquired pursuant to the Plan. You may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Corporation.
|
15.
|
Miscellaneous
.
|
a.
|
Modification
. The Award of these RSUs is documented by the records of the Committee or its delegate which shall be the final determinant of the number of Shares granted and the conditions of this Agreement. The Committee may amend or modify this Award in any manner to the extent that the Committee would have had the authority under the Plan initially to grant such Award, provided that no such amendment or modification shall impair your rights under this Agreement without your consent. Except as in accordance with the two immediately preceding sentences and Paragraph 17, this Agreement may be amended, modified or supplemented only by an instrument in writing signed by both parties hereto.
|
b.
|
Governing Law
. All matters arising under this Agreement, including matters of validity, construction and interpretation, shall be governed by the internal laws of the State of Delaware, without regard to any state’s conflict of law principles. You and the Corporation agree that all claims in respect of any action or proceeding arising out of or relating to this Agreement shall be heard or determined in any state or federal court sitting in Delaware and you agree to submit to the jurisdiction of such courts, to bring all such actions or proceedings in such courts and to waive any defense of inconvenient forum to such actions or proceedings. A final judgment in any action or proceeding so brought shall be conclusive and may be enforced in any manner provided by law.
|
c.
|
Successors and Assigns
. Except as otherwise provided herein, this Agreement will bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not.
|
d.
|
Severability
. Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
|
16.
|
Section 409A
. It is intended that this Award will be exempt from Section 409A or, if an election is made to have a Subsequent Deferral Date, comply with the requirements of Section 409A of the Code. However, nothing in the Agreement shall be construed to result in a guarantee of this tax treatment, and you shall be responsible for all of your federal, state and local taxes (and any related liabilities). This Paragraph 16 does not create an obligation on the part of the Corporation to modify the Plan or this Agreement and does not guarantee that the RSUs or the shares of Stock delivered hereunder will not be subject to taxes, interest and penalties under Section 409A of the Code. You shall be responsible for all of the Grantee’s federal, state and local taxes (and any related liabilities)
|
17.
|
Amendment
. By accepting this Award, you agree that the granting of the Award is at the discretion of the Committee and that acceptance of this Award is no guarantee that future Awards will be granted under the Plan. Notwithstanding anything in this Agreement, the Plan Prospectus, or the Plan to the contrary, this Award may be amended by the Corporation without your consent, including but not limited to modifications to any of the rights granted to you under this Agreement, at such time and in such manner as the Corporation may consider necessary or desirable to reflect changes in law. You understand that the Corporation may amend, resubmit, alter, change, suspend, cancel, or discontinue the Plan at any time without limitation.
|
1.
|
Acceptance of Terms and Conditions
. To be eligible to receive this Award, you must sign this Agreement and return it to [______________] within [________] days after the Award Date. By signing this Agreement, you agree to be bound by the terms and conditions herein, the Plan and any and all conditions established by the Corporation in connection with Awards issued under the Plan, and you further acknowledge and agree that this Award does not confer any legal or equitable right (other than those rights constituting the Award itself) against the Corporation or any Subsidiary (collectively, the “Global Eagle Companies”) directly or indirectly, or give rise to any cause of action at law or in equity against the Global Eagle Companies.
|
2.
|
Grant of Restricted Stock Units
. Subject to the restrictions, limitations, terms and conditions specified in the Plan, the Prospectus for the Global Eagle Entertainment Inc. 2013 Equity Incentive Plan (the “Plan Prospectus”), and this Agreement, the Corporation hereby grants you as of the Award Date [________________] RSUs. These RSUs will remain restricted until the applicable vesting date set forth below (each, a “Vesting Date”). Prior to the Vesting Dates, the RSUs are not transferable by you by means of sale, assignment, exchange, pledge, or otherwise. On each of the below-stated Vesting Dates on which you continue to be employed by the Global Eagle Companies, you will vest in the below-stated percentage of the total number of RSUs awarded in this Agreement, until you are 100% vested:
|
Vesting Date
|
Vested Percentage of RSUs Awarded
|
|
|
|
|
|
|
3.
|
Dividend Equivalents
. Subject to the restrictions, limitations and conditions described in the Plan, dividend equivalents payable on the RSUs will be accrued on your behalf at the time that cash dividends are otherwise paid to owners of Common Stock. Accrued dividend equivalent balances will be paid to you with the distribution of the Shares following each of the Vesting Dates.
|
4.
|
Distribution of Shares Upon Vesting
. Upon each Vesting Date specified in Paragraph 2, the relevant Shares will be delivered to you. You are personally responsible for the payment of all taxes related to distribution. The Global Eagle Companies shall have the right to deduct from any Award, an amount equal to any income, social, or other taxes of any kind required by law to be withheld in connection with the settlement of the RSUs or other securities pursuant to this Agreement. If the distribution of RSUs is subject to tax withholding, such taxes will be settled by withholding cash and/or a number of Shares with a market value not less than the amount of such taxes. Any cash from dividend equivalents remaining after withholding taxes are paid will be paid in cash to you. If withholding of taxes is not required, none will be taken and the gross number of Shares will be distributed.
|
6.
|
Death or Disability
.
In the event that you cease active employment with the Global Eagle Companies because of your death or Disability, all RSUs will vest as of the date of death or the date you are determined to be totally disabled, and will be distributed during the 2½ month period following the end of the calendar year in which you die or become disabled
.
|
7.
|
Post-Employment Provisions.
|
a.
|
Termination Other than as a Result of Death or Disability.
If your employment is terminated by the Global Eagle Companies for any reason other than death or Disability, then all unvested RSUs are forfeited on the date of termination.
|
e.
|
Change of Control.
In the event your employment with the Global Eagle Companies is involuntarily terminated within twelve months after a Change of Control as defined in the Plan, all restrictions on outstanding RSUs shall lapse, and RSUs shall be paid out as promptly as practicable; provided that if payment would not be a permissible distribution event, such payment will be made under terms described in Section 9 of the Plan.
|
8.
|
Forfeiture/Right of Offset.
Notwithstanding anything contained in this Agreement to the contrary, if you engage in any activity inimical, contrary or harmful to the interests of the Global Eagle Companies, including but not limited to: (a) without the prior written consent of the Global Eagle Companies, counseling or becoming employed by, or otherwise engaging or participating in, or performing consulting services for, any Competing Business (regardless of whether you receive any compensation of any kind), where “Competing Business” means any business that competes with any business that the Global Eagle Companies conducted at any time during your employment with the Global Eagle Companies, (b) violating the Corporation’s Code of Conduct, (c) without the prior written consent of the Global Eagle Companies, soliciting any present or future employees or customers of the Global Eagle Companies to terminate such employment or business relationship(s) with the Global Eagle Companies, (d) disclosing or misusing any confidential information regarding the Global Eagle Companies, or (e) disparaging or criticizing, orally or in writing, the business, products, policies, decisions, directors, officers or employees of the Global Eagle Companies to any person (all activities described in (a) – (e) above collectively referred to as “wrongful conduct”), then (i) RSUs, to the extent they remain subject to restriction, shall be forfeited automatically on the date on which you first engaged in such wrongful conduct and (ii) you shall pay to the Corporation in cash any financial gain you received with respect to this Award within the 12-month period immediately preceding such wrongful conduct. For purposes of this Paragraph 8, financial gain shall equal, on each Vesting Date during the twelve-month period immediately preceding such wrongful conduct, the fair market value of Corporation Shares on that date, multiplied by the number of Shares vested on that date, reduced by any taxes paid in countries other than the United States with respect to such vesting and which taxes are not otherwise eligible for refund from the taxing authorities.
|
9.
|
Adjustments
.
If the number of outstanding Shares is changed as a result of a stock split or the like without additional consideration to the Corporation, the number of RSUs subject to this Award shall be adjusted to correspond to the change in the outstanding Shares.
|
10.
|
Rights as a Stockholder
. Except as provided in Paragraph 3 above (regarding dividends), by accepting this Award, you shall have no rights as a stockholder of the Corporation in respect of the RSUs, including the right to vote until and unless the RSUs have vested and ownership of Shares issuable upon vesting of the RSUs has been transferred to you.
|
11.
|
Public Offer Waiver
. By voluntarily accepting this Award, you acknowledge and understand that your rights under the Plan are offered to you strictly as an employee of the Global Eagle Companies and that this Award of RSUs is not an offer of securities made to the general public.
|
12.
|
Conformity with the Plan and Share Ownership and Retention Requirements.
This Award is intended to conform in all respects with, and is subject to, all applicable provisions of the Plan. Inconsistencies between this Agreement, the Plan Prospectus or the Plan shall be resolved in accordance with the terms of the Plan. By your acceptance of this Agreement, you agree to be bound by all of the terms of this Agreement, the Plan, and the Plan Prospectus.
|
13.
|
Interpretations.
Any dispute, disagreement or question that arises under, or as a result of, or in any way relates to the interpretation, construction or application of the terms of this Agreement, the Plan, or the Plan Prospectus will be determined and resolved by the Committee or its authorized delegate. Such determination or resolution by the Committee or its authorized delegate will be final, binding and conclusive for all purposes.
|
14.
|
No Rights to Continued Employment
. By voluntarily acknowledging and accepting this Award, you acknowledge and understand that this Award shall not form part of any contract of employment between you and any of the Global Eagle Companies. Nothing in the Agreement, the Plan Prospectus, or the Plan confers on you any right to continue in the employ of the Global Eagle Companies or in any way affects the Global Eagle Companies’ right to terminate your employment without prior notice at any time or for any reason. You further acknowledge that this Award is for future services to the Global Eagle Companies and is not under any circumstances to be considered compensation for past services.
|
15.
|
Consent to Transfer Personal Data
. By accepting this Award, you voluntarily acknowledge and consent to the collection, use, processing and transfer of personal data as described in this Paragraph. You are not obliged to consent to such collection, use, processing and transfer of personal data. The Corporation holds certain personal information about you, that may include your name, home address and telephone number, fax number, email address, family size, marital status, sex, beneficiary information, emergency contacts, passport/visa information, age, language skills, drivers license information, date of birth, birth certificate, social security number or other employee identification number, nationality, C.V. (or resume), wage history, employment references, job title, employment or severance contract, current wage and benefit information, personal bank account number, tax related information, plan or benefit enrollment forms and elections, option or benefit statements, any Shares or directorships in the Corporation, details of all options or any other entitlements to Shares awarded, canceled, purchased, vested, unvested or outstanding in your favor, for the purpose of managing and administering the Plan (“Data”). The Corporation and/or its Subsidiaries will transfer Data amongst themselves as necessary for the purpose of implementation, administration and management of your participation in the Plan, and the Corporation may further transfer Data to any third parties assisting the Corporation in the implementation, administration and management of the Plan. These recipients may be located throughout the world, including the United States. You authorize them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing your participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and the subsequent holding of Shares on your behalf to a broker or other third party with whom you may elect to deposit any Shares acquired pursuant to the Plan. You may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Corporation.
|
16.
|
Miscellaneous
.
|
a.
|
Modification
. The Award of these RSUs is documented by the records of the Committee or its delegate which shall be the final determinant of the number of Shares granted and the conditions of this Agreement. The Committee may amend or modify this Award in any manner to the extent that the Committee would have had the authority under the Plan initially to grant such Award, provided that no such amendment or modification shall impair your rights under this Agreement without your consent. Except as in accordance with the two immediately preceding sentences and Paragraph 17, this Agreement may be amended, modified or supplemented only by an instrument in writing signed by both parties hereto.
|
b.
|
Governing Law
. All matters arising under this Agreement, including matters of validity, construction and interpretation, shall be governed by the internal laws of the State of Delaware, without regard to any state’s conflict of law principles. You and the Corporation agree that all claims in respect of any action or proceeding arising out of or relating to this Agreement shall be heard or determined in any state or federal court sitting in Delaware and you agree to submit to the jurisdiction of such courts, to bring all such actions or proceedings in such courts and to waive any defense of inconvenient forum to such actions or proceedings. A final judgment in any action or proceeding so brought shall be conclusive and may be enforced in any manner provided by law.
|
c.
|
Successors and Assigns
. Except as otherwise provided herein, this Agreement will bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not.
|
d.
|
Severability
. Whenever feasible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.
|
e.
|
Impact Upon Termination of Employment
. By voluntarily acknowledging and accepting this Award, you agree that no benefits accruing under the Plan will be reflected in any severance or indemnity payments that the Corporation may make or be required to make to you in the future, regardless of the jurisdiction in which you may be located.
|
17.
|
Amendment
. By accepting this Award, you agree that the granting of the Award is at the discretion of the Committee and that acceptance of this Award is no guarantee that future Awards will be granted under the Plan. Notwithstanding anything in this Agreement, the Plan Prospectus, or the Plan to the contrary, this Award may be amended by the Corporation without your consent, including but not limited to modifications to any of the rights granted to you under this Agreement, at such time and in such manner as the Corporation may consider necessary or desirable to reflect changes in law. You understand that the Corporation may amend, resubmit, alter, change, suspend, cancel, or discontinue the Plan at any time without limitation.
|
Company Adjusted EBITDA
|
||
Level of Achievement
|
Achievement as a % of
Target Performance |
Payout as a % of
Target Payout |
|
<[***]%
|
0%
|
Threshold
|
[***]%
|
25%
|
|
[***]%
|
50%
|
Target
|
[***]%
|
100%
|
|
[***]%
|
125%
|
Maximum
|
[***]%
|
150%
|
|
|
|
Company Strategic Goals
|
||
Level of Achievement
|
Achievement as a % of
Target Performance |
Payout as a % of
Target Payout |
|
<[***]%
|
0%
|
Threshold
|
[***]%
|
50%
|
|
[***]%
|
75%
|
Target
|
[***]%
|
100%
|
|
[***]%
|
125%
|
Maximum
|
[***]%
|
150%
|
|
|
|
(a)
|
“Adjusted EBITDA” is defined as net income (loss) before income tax expense, other income (expense), interest expense (income), depreciation and amortization, stock-based compensation, acquisition and realignment costs, F/X gain (loss) on intercompany loans and any gains or losses on certain asset sales or dispositions. The Company may change the definition of Adjusted EBITDA from time-to-time, and at their discretion and or as instructed by the Board. For the most current definition of Adjusted EBITDA, please refer to the Company’s most recent quarterly or annual public filing located on
www.sec.gov
.
|
(b)
|
“Award” means the dollar amount payable to a Participant under the provisions of the Plan.
|
(c)
|
“Board” refers to Global Eagle Entertainment Inc.’s Board of Directors
|
(d)
|
“Code” refers to Section 409A of the Internal Revenue Code of 1986, as amended.
|
(e)
|
“Compensation Committee” means the Compensation Committee of Global Eagle Entertainment Inc., whose members are members of the Board and who have been selected by the Board to administer the Plan.
|
(f)
|
“Company” means Global Eagle Entertainment Inc.
|
(g)
|
“Disabled” or “Disability” means, with respect to a Participant, a mental or physical disability (considering reasonable accommodation) or incapacity (as determined by a physician selected by the Company in its good faith judgment) for one hundred twenty (120) consecutive days or one hundred eighty (180) days out of any three hundred sixty (360) day. A Participant shall cooperate with the Company, including making the Participant reasonably available for examination by physicians at the Company’s request and at the Company’s expense to determine whether or not the Participant is Disabled.
|
(h)
|
“Eligible Employee” means each employee of the Company who (a) has been employed with the Company by October 1
st
of any Plan year or (b) has become eligible under the plan prior to October 1
st
of any Plan year.
|
(i)
|
“Participant” means an Eligible Employee who is granted an Award under the Plan, in the event of the death of such employee, his or her designated beneficiary or estate.
|
(j)
|
“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
|
(k)
|
“Performance Period” means the fiscal year that has been designated by the Committee as a period for which an Award may be earned.
|
(l)
|
“Plan” means this 2015 Global Eagle Entertainment Inc. Annual Incentive Plan, as the same may be amended and in effect from time to time.
|
(m)
|
“Revenue” means total revenue earned from our Connectivity and Content segments including all licensing, service and equipment in accordance with US Generally Accepted Accounting Principles.
|
(n)
|
“Target Annual Incentive” is defined as each Participant’s targeted payout, expressed as a percentage of base salary, if the Company’s and the Participant’s performance goals are met.
|
Date: May 8, 2015
|
/s/ David M. Davis
|
|
David M. Davis
|
|
Chief Executive Officer
|
|
(principal executive officer)
|
Date: May 8, 2015
|
/s/ Michael Zemetra
|
|
Michael Zemetra
|
|
Chief Financial Officer and Treasurer
|
|
(principal financial officer and principal accounting officer)
|
Date: May 8, 2015
|
/s/ David M. Davis
|
|
David M. Davis
|
|
Chief Executive Officer
|
|
(principal executive officer)
|
Date: May 8, 2015
|
/s/ Michael Zemetra
|
|
Michael Zemetra
|
|
Chief Financial Officer and Treasurer
|
|
(principal financial officer and principal accounting officer)
|