magicJack Announces Repurchase of $13 Million in Stock and Founder's Exit From Operations
WEST PALM BEACH, Fla. and JERUSALEM, Nov. 12, 2013 (GLOBE NEWSWIRE) -- magicJack VocalTec, Ltd.(Nasdaq:CALL), a leading cloud communications company, announced that it has repurchased in privately negotiated transactions 1,062,092 of the Company's ordinary shares at $12.24 per share, for an aggregate purchase price of approximately $13 million. The shares were purchased pursuant to agreements entered into with the independent trustees of two irrevocable trusts previously created by the Company's founder, Daniel M. Borislow.
The Company has also entered into an agreement with Mr. Borislow which provides that Mr. Borislow will not have any ongoing involvement in the business or operations of the Company or any of its subsidiaries. The agreement contains a standstill provision under which Mr. Borislow agrees, for a period of two years, to refrain from taking certain actions as a shareholder of the Company. Except as limited by this provision, Mr. Borislow may still exercise his shareholder rights. Mr. Borislow has also agreed not to compete with the Company or to solicit its employees without the Company's consent during the next two years. Mr. Borislow has also agreed to the assignment of certain intellectual property rights for the benefit of the Company. The Company will issue 300,000 of its ordinary shares to Mr. Borislow
in exchange for his obligations under this agreement.
The Company has also executed a Letter of Intent committing to negotiate an agreement to outsource to a customer care company affiliated with Mr. Borislow certain live chat customer care activities currently provided to the Company primarily by a third party. The Company has allowed Mr. Borislow to solicit six current Company employees to assist with the operation of the customer care company. If the customer care agreement is executed, the customer care services performed under such agreement will constitute an express and limited exception to the limit on Mr. Borislow's activities on behalf of the Company described above. The Letter of Intent provides for the Company to pay a $1.5 million break-up fee to the customer care company if an agreement on the terms of such customer care activities is not reached by
December 20, 2013.
"The share repurchase demonstrates our strong conviction about the future growth potential of our business and building long-term shareholder value," said magicJack VocalTec President and CEO Gerald Vento.
About magicJack VocalTec Ltd.
magicJack VocalTec Ltd. (Nasdaq:CALL), the inventor of the magicJack, is a leading cloud communications company. The Company has sold more than 10 million of the easy-to-use, award-winning magicJack since the device's launch in 2007, and has the use of more than 30 patents. It is the largest-reaching CLEC (Competitive Local Exchange Carrier) in the United States in terms of area codes available and certification in number of states, and the network has historically had uptime of over 99.99 percent.
CONTACT: Seth Potter
Source: magicJack VocalTec Ltd.
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