UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Amendment
No. 1)
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-12
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GLOBAL BRANDS ACQUISITION CORP.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):
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Proposed maximum aggregate value of transaction:
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and the
date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.
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TABLE OF CONTENTS
GLOBAL
BRANDS ACQUISITION CORP.
11 WEST 42ND STREET, 21ST FLOOR
NEW YORK, NEW YORK 10036
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 4,
2009
TO THE STOCKHOLDERS OF GLOBAL BRANDS ACQUISITION CORP.:
You are cordially invited to attend the special meeting of
stockholders of Global Brands Acquisition Corp. (Global
Brands) to be held at 11:00 a.m. EST on
December 4, 2009 at the offices of Global Brands
counsel, Graubard Miller, 405 Lexington Avenue, New York, New
York 10174, for the sole purpose of considering and voting upon
the following proposals:
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a proposal to amend the amended and restated certificate of
incorporation (Charter) of Global Brands (the
Extension Amendment) to extend the date on which
Global Brands corporate existence terminates from
December 6, 2009 to February 28, 2010;
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a proposal to amend the Charter to allow the holders of shares
of common stock issued in Global Brands initial public
offering (the IPO, and such shares sold in the IPO
are referred to as the public shares) to elect to
convert their public shares into a pro rata portion of the funds
held in Global Brands trust account established at the
time of the IPO (the trust account) if the Extension
Amendment is approved (the Conversion), which if
approved will also be deemed to be approval of an amendment to
the trust account agreement governing the trust account to allow
for such conversions as described in more detail herein; and
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a proposal to adjourn the special meeting to a later date or
dates, if necessary, to permit further solicitation and vote of
proxies if, based upon the tabulated vote at the time of the
special meeting, the Extension Amendment and Conversion
proposals have not been approved.
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The Global Brands board of directors has fixed the close of
business on November 18, 2009 as the date for determining
Global Brands stockholders entitled to receive notice of and
vote at the special meeting and any adjournment thereof. Only
holders of record of Global Brands common stock on that date are
entitled to have their votes counted at the special meeting or
any adjournment thereof.
On November 9, 2009, Global Brands entered into an
arrangement with Gerrity International, LLC (the Gerrity
Group) pursuant to which Global Brands will continue its
business as a corporation that will elect to qualify to be taxed
as a real estate investment trust (REIT). We refer
to this arrangement as the Framework Transactions.
Global Brands board of directors has determined that it
would be in the best interests of its stockholders to permit
Global Brands to continue its corporate existence beyond the
time established in its Charter in order to complete the
Framework Transactions.
As a result, Global Brands board of directors has
determined that it is in the best interests of Global
Brands stockholders to continue Global Brands
existence until February 28, 2010. Global Brands
board of directors recognizes the importance of the rights
afforded to the holders of the public shares (the public
stockholders) at the time of the IPO to receive a pro rata
portion of the trust account in connection with a liquidation of
Global Brands if its corporate existence were to terminate on
December 6, 2009. Accordingly, Global Brands is offering
holders of public shares the opportunity to participate in the
Conversion proposal regardless of whether the holder votes for
or against the Extension Amendment and receive the per-share
conversion price (anticipated to be approximately $9.95, which
is the same as the anticipated per-share liquidation price if
the Extension Amendment and Conversion proposals are not
approved). In order to convert your public shares, you must vote
in favor of the Conversion proposal; however, if you vote in
favor of the Conversion proposal, you are not required to
convert your public shares. Approval of the Extension Amendment
proposal is a condition to the implementation of the Conversion
and approval of the Conversion proposal is a condition to the
implementation of the Extension Amendment.
The Extension Amendment and Conversion proposals will not be
effectuated if holders of more than 8,650,000 public shares seek
conversion of their shares. If the Extension Amendment and
Conversion proposals are not approved by December 6, 2009,
Global Brands corporate existence will terminate except
for
the purposes of winding up its affairs and liquidating, pursuant
to Section 278 of the General Corporation Law of the State
of Delaware (GCL). This has the same effect as if
Global Brands board of directors and stockholders had
formally voted to approve Global Brands dissolution
pursuant to Section 275 of the GCL. Accordingly, limiting
Global Brands corporate existence to a specified date as
permitted by Section 102(b)(5) of the GCL removed the
necessity to comply with the formal procedures set forth in
Section 275 (which would have required Global Brands
board of directors and stockholders to formally vote to approve
Global Brands dissolution and liquidation and to have
filed a certificate of dissolution with the Delaware Secretary
of State). In any liquidation, the funds held in the trust
account will be distributed pro rata to the holders of the
public shares in accordance with the terms of the Charter.
Global Brands initial officers, directors and stockholders
(Global Brands Founders) have waived their rights to
participate in any liquidation distribution with respect to
their initial securities. There will be no distribution from the
trust account with respect to Global Brands warrants,
which will expire worthless in any liquidation. Global Brands
will pay the costs of liquidation from its remaining assets
outside of the trust account. If such funds are insufficient,
JLJ Partners LLC, an affiliate of the Global Brands Founders,
has agreed to advance Global Brands the funds necessary to
complete such liquidation (currently anticipated to be no more
than approximately $15,000) and has agreed not to seek repayment
of such expenses.
Global Brands IPO prospectus stated that Global Brands
would not take any action to amend or waive Articles Sixth
and Seventh of its Charter (except in connection with, and to be
effective upon, a business combination) to allow it to survive
for a longer period of time if it did not appear it would be
able to consummate a business combination by December 6,
2009. Since the completion of its IPO, Global Brands has been
dealing with many of the practical difficulties associated with
the identification of a business combination target, negotiating
business terms with potential targets and conducting related due
diligence. Following the IPO, Global Brands began a wide
international search for a suitable operating business
and/or
asset
to acquire. Global Brands created and implemented a process
involving three major components: (i) several national and
regional investment banking firms, including Citigroup, Morgan
Stanley, Merrill Lynch, JPMorgan Securities Inc., Financo,
Deutsche Bank, Goldman, Sachs & Co., Credit Suisse,
Lazard, Rothschild and Stifel, Nicolaus & Company,
among others, were solicited and informed of Global Brands
objectives and asked to recommend and introduce prospective
business combination targets; (ii) Global Brands engaged in
direct contact with private equity firms, inquiring about their
portfolio companies; and (iii) Global Brands utilized its
board of directors and officers affiliations with
other investment platforms as well as accounting and legal firms
as means of introduction and subsequent direct contact with
potential acquisition targets for a business combination.
Additionally, Global Brands worked with several private equity
firms to evaluate joint-acquisitions, whereby the private equity
firm would commit to make an investment into Global Brands to
assure that the transaction would be approved. Through this
process, Global Brands studied over 150 potential target
companies. Despite these efforts, Global Brands has not been
able to complete a business combination. As indicated above, on
November 9, 2009, Global Brands entered into an arrangement
with the Gerrity Group pursuant to which Global Brands will seek
to consummate the Framework Transactions in order to continue
its business as a corporation that will elect to qualify to be
taxed as a REIT.
You are not being asked to consider and vote on the Framework
Transactions at this time. If you are a public stockholder, the
Extension Amendment and Conversion proposals are approved, you
do not seek conversion of your public shares in connection
therewith, the warrant exchange offer is accepted by at least
95% of the outstanding public warrants and you do not
subsequently sell your shares prior to the record date for the
special meeting to be held in connection with approving the
Framework Transactions, then you will have the right to vote on
the Framework Transactions if and when it is submitted to
stockholders. Consummation of the Framework Transactions is
conditioned on, among other things, there being available to
Global Brands, after giving effect to all conversions and other
share purchases, but prior to payment of transaction expenses,
no less than $200 million.
As currently contemplated by Global Brands Charter, if
Global Brands does not complete a business combination on or
prior to December 6, 2009, Global Brands corporate
existence shall automatically terminate, Global Brands shall
liquidate the trust account for the benefit of the public
stockholders and the public stockholders shall receive
liquidating distributions. As a result of the matters proposed
to the stockholders in this proxy statement, Global Brands
board of directors proposes to extend the date on which Global
Brands existence will automatically terminate until
February 28, 2010.
If the Extension Amendment and Conversion proposals are approved
and holders of less than 8,650,000 public shares seek
conversion, Global Brands will file an amendment to its Charter
allowing it to have until February 28, 2010 to consummate
the Framework Transactions. Such approval will also constitute
consent for Global Brands to amend the trust account agreement
to (i) permit the removal from the trust account an amount
(the Withdrawal Amount) equal to the pro rata
portion of funds available in the trust account relating to the
converted public shares and deliver to the holders of such
converting public shares their pro rata portion of the
Withdrawal Amount; (ii) extend the date on which to
liquidate the remaining trust account to February 28, 2010;
(iii) only permit withdrawals from the amounts remaining in
the trust account to pay the expenses incurred in connection
with the Framework Transactions, up to a maximum of
$1 million, and upon consummation of the Framework
Transactions or Global Brands liquidation; and
(iv) prohibit any further changes in the distribution of
the trust account funds, including the date of liquidation,
unless each and every Global Brands common stockholder
specifically agrees in writing to such change. Citigroup Global
Markets Inc., the representative of the underwriters in the IPO
(Citigroup), has consented to such amendment
provided that public stockholders approve the Extension
Amendment and Conversion proposals. Global Brands will then
commence an offer to exchange all of its outstanding warrants
(which currently expire on December 5, 2012) for new
warrants with different terms, as described herein. If holders
of at least 95% of Global Brands outstanding public
warrants do not agree to exchange their warrants for new
warrants, the Framework Transactions will not be consummated. If
at least 95% of Global Brands outstanding public warrants
agree to exchange their warrants for new warrants, then Global
Brands will submit the Framework Transactions to the public
stockholders at that time for their approval. If approved, the
Framework Transactions and the warrant exchange would then be
consummated.
Global Brands decided that it would not effectuate the Extension
Amendment and Conversion proposals if more than 8,650,000 public
shares sought conversion because the parties to the Framework
Agreement determined that it was necessary to have at least
$200 million available to them (prior to the payment of
transaction expenses) in order to commence operations as a REIT.
Accordingly, even if fewer than 8,650,000 public shares seek
conversion in connection with the Extension Amendment, it is
also a condition to consummate the Framework Transactions that
there be at least $200 million available to Global Brands
(prior to the payment of transaction expenses) after taking into
account all holders that seek conversion in connection with the
special meeting called to approve the Framework Transactions. As
a result, if an aggregate of more than 8,650,000 public shares
(which is less than the maximum number of public shares that
could be converted pursuant to the Charter and IPO prospectus)
seek conversion in connection with either this meeting or the
subsequent meeting to approve the Framework Transactions, Global
Brands will not be able to consummate the Framework Transactions
and will be forced to liquidate.
If you wish to remain a stockholder of Global Brands and have
the opportunity to vote on the Framework Transactions, you must
vote in favor of both the Extension Amendment and Conversion
proposals but not seek conversion. If you do not wish to remain
a stockholder of Global Brands, you may vote either for or
against the Extension Amendment but you must vote in favor of
the Conversion proposal and seek conversion of your shares by
tendering them to Global Brands stock transfer agent prior
to the special meeting. Global Brands anticipates notifying the
trustee promptly after the stockholder meeting to liquidate the
trust account in an amount equal to the Withdrawal Amount.
Global Brands estimates that the per share pro rata portion of
the trust account will be approximately $9.95 at the time of the
special meeting.
The affirmative vote of a majority of Global Brands
outstanding common stock will be required to approve the
Extension Amendment and Conversion proposals. Adoption of the
adjournment proposal requires the affirmative vote of the
holders of a majority of the issued and outstanding shares of
Global Brands common stock entitled to vote thereon.
In considering the Extension Amendment, Global Brands
stockholders should be aware that because Global Brands
IPO prospectus stated that Global Brands would not take any
action to amend or waive any provision of its Charter (except in
connection with a business combination), such stockholders may
have securities law claims against Global Brands. Even if you do
not pursue such claims, others may do so. The Extension
Amendment will also result in Global Brands incurring additional
transaction expenses, and may also result in securities law and
other claims against Global Brands whose holders might seek to
have the claims satisfied from funds in the trust account. If
proposing the Extension Amendment results in Global Brands
incurring material liability as a result of potential securities
law claims, the trust account could be
depleted to the extent of any judgments arising from such
claims, together with any expenses related to defending such
claims, if the resources of Joel J. Horowitz, Lawrence S. Stroll
and John D. Idol, respectively Global Brands chief
executive officer, chairman, and president, who have certain
indemnification obligations with respect to the trust account,
are insufficient or unavailable to indemnify Global Brands for
the full amount. You should read the proxy statement carefully
for more information concerning the consequences of the adoption
of the Extension Amendment.
After careful consideration of all relevant factors, Global
Brands board of directors has determined that the
Extension Amendment and Conversion proposals are fair to and in
the best interests of Global Brands and its stockholders, has
declared them advisable and recommends that you vote or give
instruction to vote FOR them.
Under Delaware law and Global Brands bylaws, no other
business may be transacted at the special meeting.
Enclosed is the proxy statement containing detailed information
concerning the Extension Amendment, the Conversion and the
special meeting Whether or not you plan to attend the special
meeting, we urge you to read this material carefully and submit
a proxy to have your shares voted at the special meeting.
I look forward to seeing you at the meeting.
November , 2009
By Order of the Board of Directors
Chief Executive Officer and Director
Your vote is important. Please sign, date and return your
proxy card as soon as possible to make sure that your shares are
represented at the special meeting. If you are a stockholder of
record, you may also cast your vote in person at the special
meeting. If your shares are held in an account at a brokerage
firm or bank, you must instruct your broker or bank how to vote
your shares, or you may cast your vote in person at the special
meeting by obtaining a proxy from your brokerage firm or bank.
Your failure to vote or instruct your broker or bank how to vote
will have the same effect as voting against each of the
proposals.
YOU MUST AFFIRMATIVELY DEMAND THAT GLOBAL BRANDS CONVERT YOUR
SHARES INTO CASH NO LATER THAN THE CLOSE OF THE VOTE ON THE
CONVERSION PROPOSAL. IN ORDER TO CONVERT YOUR SHARES, YOU MUST
VOTE FOR THE CONVERSION PROPOSAL, CHECK THE BOX ON THE PROXY
CARD TO SEEK CONVERSION AND TENDER YOUR STOCK TO GLOBAL
BRANDS STOCK TRANSFER AGENT PRIOR TO THE SPECIAL MEETING
OF GLOBAL BRANDS STOCKHOLDERS. YOU MAY TENDER YOUR STOCK BY
EITHER DELIVERING YOUR STOCK CERTIFICATE TO THE TRANSFER AGENT
OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY
TRUST COMPANYS DWAC (DEPOSIT WITHDRAWAL AT CUSTODIAN)
SYSTEM. IF THE EXTENSION AMENDMENT AND CONVERSION
PROPOSALS ARE NOT APPROVED, THEN THESE SHARES WILL NOT BE
CONVERTED INTO CASH, GLOBAL BRANDS WILL LIQUIDATE AND ALL SHARES
OTHER THAN THE INSIDERS PRE-IPO SHARES SHALL BE ENTITLED
TO SHARE IN LIQUIDATION PROCEEDS. IF YOU HOLD YOUR SHARES IN
STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT
YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN
ORDER TO EXERCISE YOUR CONVERSION RIGHTS.
Important Notice Regarding the Availability of Proxy Materials
for the Special Meeting of Stockholders to be held on
December 4, 2009. This Proxy Statement to Stockholders is
available at:
http://www.cstproxy.com/globalbrandsacquisition/sm2009
GLOBAL
BRANDS ACQUISITION CORP.
11 WEST 42ND STREET, 21ST FLOOR
NEW YORK, NEW YORK 10036
SPECIAL
MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 4,
2009
The special meeting of stockholders of Global Brands Acquisition
Corp. (Global Brands), a Delaware corporation, will
be held at 11:00 a.m. EST on December 4, 2009, at
the offices of Global Brands counsel, Graubard Miller, 405
Lexington Avenue, New York, New York 10174, for the sole purpose
of considering and voting upon the following proposals:
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a proposal to amend the amended and restated certificate of
incorporation (Charter) of Global Brands (the
Extension Amendment) to extend the date on which
Global Brands corporate existence terminates from
December 6, 2009 to February 28, 2010;
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a proposal to amend the Charter to allow the holders of shares
of common stock issued in Global Brands initial public
offering (the IPO, and such shares sold in the IPO
are referred to as the public shares) to elect to
convert their public shares into their pro rata portion of the
funds held in the trust account established at the time of the
IPO (the trust account) if the Extension Amendment
is approved (the Conversion), which if approved will
also be deemed to be approval of an amendment to the trust
account agreement governing the trust account to allow for such
conversions as described in more detail herein; and
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a proposal to adjourn the special meeting to a later date or
dates, if necessary, to permit further solicitation and vote of
proxies if, based upon the tabulated vote at the time of the
special meeting, the Extension Amendment and Conversion
proposals have not been approved.
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On November 9, 2009, Global Brands entered into an
arrangement with Gerrity International, LLC (the Gerrity
Group) pursuant to which Global Brands will continue its
business as a corporation that will elect to qualify to be taxed
as a real estate investment trust (REIT). We refer
to this arrangement as the Framework Transactions.
Global Brands board of directors has determined that it
would be in the best interests of its stockholders to permit
Global Brands to continue its corporate existence beyond the
time established in its Charter in order to complete the
Framework Transactions.
The Extension Amendment and the Conversion proposals are
essential to the overall implementation of the board of
directors plan to continue Global Brands corporate
existence until February 28, 2010 to allow Global Brands
more time to complete the Framework Transactions. Approval of
the Extension Amendment proposal is a condition to the
implementation of the Conversion and approval of the Conversion
proposal is a condition to the implementation of the Extension
Amendment. If either of the Extension Amendment or Conversion
proposals is not approved by the stockholders, Global
Brands corporate existence will terminate on
December 6, 2009 and Global Brands will be unable to
complete the Framework Transactions.
The Extension Amendment and Conversion proposals will not be
effectuated if holders of more than 8,650,000 public shares seek
conversion of their shares. If the Extension Amendment and
Conversion proposals are not approved by December 6, 2009,
Global Brands corporate existence will terminate except
for the purposes of winding up its affairs and liquidating,
pursuant to Section 278 of the General Corporation Law of
the State of Delaware (GCL). This has the same
effect as if Global Brands board of directors and
stockholders had formally voted to approve Global Brands
dissolution pursuant to Section 275 of the GCL.
Accordingly, limiting Global Brands corporate existence to
a specified date as permitted by Section 102(b)(5) of the
GCL removed the necessity to comply with the formal procedures
set forth in Section 275 (which would have required Global
Brands board of directors and stockholders to formally
vote to approve our dissolution and liquidation and to have
filed a certificate of dissolution with the Delaware Secretary
of State).
If the Extension Amendment and Conversion proposals are approved
and holders of less than 8,650,000 public shares seek
conversion, Global Brands will file an amendment to its Charter
allowing it to have until February 28, 2010 to consummate
the Framework Transactions. Such approval will also constitute
consent for Global Brands to amend the trust account agreement
to (i) permit the removal from the trust account an
amount (the Withdrawal Amount) equal to the pro
rata portion of funds available in the trust account relating to
the converted public shares and deliver to the holders of such
converting public shares their pro rata portion of the
Withdrawal Amount; (ii) extend the date on which to
liquidate the remaining trust account to February 28, 2010;
(iii) only permit withdrawals from the amounts remaining in
the trust account to pay the expenses incurred in connection
with the Framework Transactions, up to a maximum of
$1 million, and upon consummation of the Framework
Transactions or Global Brands liquidation; and
(iv) prohibit any further changes in the distribution of
the trust account funds, including the date of liquidation,
unless each and every Global Brands common stockholder
specifically agrees in writing to such change. Citigroup has
consented to such amendment provided that public stockholders
approve the Extension Amendment and Conversion proposals. This
amendment will make extensions difficult for Global Brands to
effect as Global Brands believes that obtaining a unanimous vote
of its stockholders is highly unlikely due to the diverse
interests of its public stockholders. Global Brands will in
every case adhere to the strict requirements of the trust
account agreement amendment. Global Brands will then commence an
offer to exchange all of its outstanding warrants (which
currently expire on December 5, 2012) for new warrants with
different terms, as described herein. If holders of at least 95%
of Global Brands outstanding public warrants do not agree
to exchange their warrants for new warrants, the Framework
Transactions will not be consummated. If at least 95% of Global
Brands outstanding public warrants agree to exchange their
warrants for new warrants, then Global Brands will submit the
Framework Transactions to the public stockholders at that time
for their approval. If approved, the Framework Transactions and
the warrant exchange would then be consummated.
Global Brands decided that it would not effectuate the Extension
Amendment and Conversion proposals if more than 8,650,000 public
shares sought conversion because the parties to the Framework
Agreement determined that it was necessary to have at least
$200 million available to them (prior to the payment of
transaction expenses) in order to commence operations as a REIT.
Accordingly, even if fewer than 8,650,000 public shares seek
conversion in connection with the Extension Amendment, it is
also a condition to consummate the Framework Transactions that
there be at least $200 million available to Global Brands
(prior to the payment of transaction expenses) after taking into
account all holders that seek conversion in connection with the
special meeting called to approve the Framework Transactions. As
a result, if an aggregate of more than 8,650,000 public shares
(which is less than the maximum number of public shares that
could be converted pursuant to the Charter and IPO prospectus)
seek conversion in connection with either this meeting or the
subsequent meeting to approve the Framework Transactions, Global
Brands will not be able to consummate the Framework Transactions
and will be forced to liquidate.
You are not being asked to consider and vote on the Framework
Transactions at this time. If you are a public stockholder, the
Extension Amendment and Conversion proposals are approved, you
do not seek conversion of your public shares in connection
therewith, the warrant exchange offer is accepted by at least
95% of the outstanding public warrants and you do not
subsequently sell your shares prior to the record date for the
special meeting to be held in connection with the Framework
Transactions, then you will have the right to vote on the
Framework Transactions if and when it is submitted to
stockholders. Consummation of the Framework Transactions is
conditioned on, among other things, there being available to
Global Brands, after giving effect to all conversions and other
share purchases, but prior to payment of transaction expenses,
no less than $200 million.
The record date for the special meeting is November 18,
2009. Record holders of Global Brands common stock at the close
of business on the record date are entitled to vote or have
their votes cast at the special meeting. On the record date,
there were 35,937,500 outstanding shares of Global Brands common
stock including 28,750,000 public shares. Global Brands
warrants do not have voting rights.
Global Brands is soliciting proxies on behalf of its board of
directors. If you have any questions about how to vote or direct
a vote in respect of your shares of Global Brands common
stock, you may call Morrow & Co., LLC, Global
Brands proxy solicitor, at
(800) 662-5200,
or Jay Desai, Global Brands vice president-mergers and
acquisitions, at
(212) 201-8118.
This proxy statement contains important information about the
special meeting and the proposals. Please read it carefully and
vote your shares.
This proxy statement is dated November , 2009
and is first being mailed to stockholders on or about that date.
2
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING
These Questions and Answers are only summaries of the matters
they discuss. They do not contain all of the information that
may be important to you. You should read carefully the entire
document, including the annexes to this proxy statement.
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Q.
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Why am I receiving this proxy statement?
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A. Global Brands is a blank check company formed in July 2007
to effect a merger, capital stock exchange, asset acquisition or
other similar business combination with an operating business.
In December 2007, Global Brands consummated its IPO from which
it derived gross proceeds of approximately $288 million,
including proceeds from the exercise of the underwriters
over- allotment option. Like most blank check companies, Global
Brands Charter provides for the return of the IPO proceeds
held in trust to the holders of public shares if there is no
qualifying business combination consummated within two years of
the date of the IPO prospectus, which in this case is by
December 6, 2009. Global Brands Charter provides that
Global Brands corporate existence shall automatically
terminate on December 6, 2009 if it has not completed a business
combination. The board of directors believes that it is in the
best interests of the stockholders to continue Global
Brands existence until February 28, 2010 in order to
complete the Framework Transactions and is submitting these
proposals to the stockholders to vote upon in order to allow
Global Brands time to complete such transactions.
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Q.
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What is being voted on?
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A. You are being asked to vote on the Extension Amendment and
Conversion proposals and an adjournment proposal. The Extension
Amendment and the Conversion proposals are essential to the
overall implementation of the board of directors plan to
continue Global Brands corporate existence until February
28, 2010 to allow Global Brands more time to complete the
Framework Transactions. Approval of the Extension Amendment
proposal is a condition to the implementation of the Conversion
and approval of the Conversion proposal is a condition to the
implementation of the Extension Amendment.
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Q.
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Why is Global Brands proposing the Extension Amendment and
the Conversion proposal?
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A. On November 9, 2009, Global Brands entered into an
arrangement pursuant to which, upon consummation of the
Framework Transactions, and subject to the conditions described
in this proxy statement, Global Brands will continue its
business as a corporation that will elect to qualify to be taxed
as a REIT. The Charter currently requires Global Brands to
consummate an initial business combination in which it acquires
one or more operating businesses or assets with a collective
fair market value equal to at least 80% of the balance in Global
Brands trust account (excluding deferred underwriting
discounts and commissions). The Framework Transactions with the
Gerrity Group do not provide for Global Brands to acquire any
business instead, it provides that Global Brands
will continue its corporate existence and simply commence
operations as a REIT following consummation of the transactions.
Accordingly, the Framework Transactions do not constitute a
qualifying business combination as currently described in the
Charter or IPO prospectus.
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3
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Global Brands Charter currently provides that Global
Brands corporate existence shall terminate on December 6,
2009, and that such provision may only be amended in connection
with, and become effective upon, the consummation of a business
combination. As described below, Global Brands will not be able
to consummate the Framework Transactions by that date and even
if they were completed by such date, they would not constitute
a qualifying business combination.
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Global Brands board of directors believes that decisions
regarding Global Brands future, such as whether to
continue its existence or have its existence terminate, should
be determined by Global Brands current stockholders and
they should not be bound by the restrictions implemented by the
stockholders at the time of the IPO. The current stockholders
should not be prohibited from amending the Charter to allow
Global Brands to continue its existence, especially since all
holders of public shares are being offered the opportunity to
convert their public shares and receive their pro rata portion
of the trust account in connection with the approval of the
proposals which will occur close in time to December 6, 2009 as
contemplated in the IPO prospectus.
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Since the completion of its IPO, Global Brands has been dealing
with many of the practical difficulties associated with the
identification of a business combination target, negotiating the
attendant business terms, conducting the related due diligence
and obtaining the necessary audited financial statements of the
business combination target and as a result, Global Brands has
not completed a qualifying business combination.
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As Global Brands believes the Framework Transactions to be in
the best interests of its stockholders, and because Global
Brands will not be able to conclude the Framework Transactions
by December 6, 2009, Global Brands has determined to seek
stockholder approval to extend Global Brands corporate
existence until February 28, 2010.
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We are not asking you to consider and vote on the Framework
Transactions at this time. If you are a public stockholder, the
Extension Amendment and Conversion proposals are approved, you
do not seek conversion of your public shares in connection
therewith, the warrant exchange offer is accepted by at least
95% of the outstanding public warrants and you do not
subsequently sell your shares prior to the special meeting to be
held in connection with the Framework Transactions, then you
will have the right to vote on the Framework Transactions if and
when it is submitted to stockholders. Consummation of the
Framework Transactions is conditioned on, among other things,
there being available to Global Brands, after giving effect to
all conversions and other share purchases, but prior to payment
of transaction expenses, no less than $200 million.
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Q.
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Why should you vote for the Extension Amendment and
Conversion Proposals?
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A. Global Brands believes the Framework Transactions to be
in the best interests of its stockholders, and because Global
Brands will not be able to complete such transactions by
December 6,
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4
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2009, Global Brands has determined to seek stockholder approval
to extend Global Brands corporate existence from December
6, 2009 until February 28, 2010 to allow Global Brands the
opportunity to complete such transactions.
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Global Brands Charter purports to prohibit amendment to
certain of its provisions, including any amendment that would
extend its corporate existence beyond December 6, 2009, except
in connection with, and effective upon consummation of, a
business combination. Global Brands IPO prospectus did not
suggest in any way that this provision, or the Charters
other business combination procedures, were subject to change.
Global Brands believes that these provisions were included to
protect Global Brands stockholders from having to sustain
their investments for an unreasonably long period if Global
Brands failed to find a suitable transaction in the timeframe
contemplated. Global Brands also believes, however, that given
Global Brands expenditure of time, effort and money on
several possible business combinations, circumstances warrant
providing those who believe they might find the Framework
Transactions to be an attractive investment opportunity to
consider such transactions, inasmuch as Global Brands is also
affording stockholders who wish to convert their public shares
as originally contemplated the opportunity to do so as well.
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Global Brands has received an opinion from special Delaware
counsel, Richards, Layton & Finger, P.A. (Richards,
Layton), concerning the validity of the Extension
Amendment. Global Brands did not request Richards, Layton to
opine on whether the clause currently contained in Article Sixth
of Global Brands Charter prohibiting amendment of Article
Sixth prior to consummation of a business combination was valid
when adopted. Richards, Layton concluded in its opinion, based
upon the analysis set forth therein and its examination of
Delaware law, and subject to the assumptions, qualifications,
limitations and exceptions set forth in its opinion, that
the amendments to Articles Sixth and Seventh of the
Certificate of Incorporation ..., if duly adopted by the Board
of Directors of [Global Brands] (by vote of the majority of the
directors present at a meeting at which a quorum is present or,
alternatively, by unanimous written consent) and duly approved
by the holders of a majority of the outstanding stock of [Global
Brands] entitled to vote thereon, all in accordance with Section
242(b) of the [GCL], would be valid and effective when filed
with the Secretary of State in accordance with Sections 103 and
242 of the [GCL]. A copy of Richards, Laytons
opinion is included as Annex B to this proxy statement, and
stockholders are urged to review it in its entirety.
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If you wish to remain a stockholder of Global Brands and have
the opportunity to vote on the Framework Transactions, you must
vote in favor of both the Extension Amendment and Conversion
proposals, but not seek conversion. If you do not wish to
remain a stockholder of Global Brands, you may vote either for
or against the Extension Amendment but you must vote in favor of
the Conversion proposal, check the box on the proxy card to
convert
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5
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your shares and tender them to Global Brands stock
transfer agent prior to the special meeting. Global Brands
anticipates notifying the trustee promptly after the stockholder
meeting to liquidate the trust account in an amount equal to the
total pro rata portion of the converting shares. Global Brands
estimates that the per share pro rata portion of the trust
account will be approximately $9.95 at the time of the special
meeting (which is the same as the anticipated per-share
liquidation price if the Extension Amendment and Conversion
proposals are not approved). The Extension Amendment and
Conversion proposals will not be approved if holders of more
than 8,650,000 public shares seek conversion of their shares.
Global Brands decided that it would not effectuate the Extension
Amendment and Conversion proposals if more than 8,650,000 public
shares sought conversion because the parties to the Framework
Agreement determined that it was necessary to have at least
$200 million available to them (prior to the payment of
transaction expenses) in order to commence operations as a REIT.
Accordingly, even if fewer than 8,650,000 public shares seek
conversion in connection with the Extension Amendment, it is
also a condition to consummate the Framework Transactions that
there be at least $200 million available to Global Brands
(prior to the payment of transaction expenses) after taking into
account all holders that seek conversion in connection with the
special meeting called to approve the Framework Transactions. As
a result, if an aggregate of more than 8,650,000 public shares
(which is less than the maximum number of public shares that
could be converted pursuant to the Charter and IPO prospectus)
seek conversion in connection with either this meeting or the
subsequent meeting to approve the Framework Transactions, Global
Brands will not be able to consummate the Framework Transactions
and will be forced to liquidate.
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Liquidation of the trust account is a fundamental obligation of
Global Brands to the public stockholders and Global Brands is
not proposing and will not propose to change that obligation to
the public stockholders. If holders of public shares do not
elect to convert their public shares in connection with this
vote and the Extension Amendment and Conversion proposals are
approved, such holders shall retain conversion rights in
connection with any vote to be held on the Framework
Transactions (assuming they do not otherwise sell their shares
after the special meeting and prior to such vote).
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Global Brands board of directors recommends that you vote
in favor of the Extension Amendment and Conversion proposals,
but expresses no opinion as to whether you should convert your
public shares.
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Q.
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How do I exercise conversion rights?
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A. In order to convert your public shares, you must (i) vote for
the Conversion proposal, (ii) demand that Global Brands convert
your shares into cash and (iii) deliver your stock to Global
Brands transfer agent physically or electronically using
the Depository Trust Companys DWAC (Deposit Withdrawal at
Custodian) System prior to the vote at the meeting.
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6
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Any action that does not include an affirmative vote for the
Conversion proposal will prevent you from exercising your
conversion rights in connection with the Extension Amendment.
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You may demand conversion either by checking the box on the
proxy card or by submitting your request in writing to Mark
Zimkind of Continental Stock Transfer & Trust Company,
Global Brands transfer agent, at the address listed at the
end of this section.
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Any request for conversion, once made, may be withdrawn at any
time up to the vote taken with respect to the Conversion
proposal. If you delivered your shares for conversion to Global
Brands transfer agent and decide prior to the special
meeting not to elect conversion, you may request that Global
Brands transfer agent return the shares (physically or
electronically). You may make such request by contacting Global
Brands transfer agent at the phone number or address
listed at the end of this section.
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Q.
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How do the Global Brands Founders intend to vote their
shares?
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A. Pursuant to agreements entered into in connection with the
IPO, the Global Brands Founders have agreed to vote their shares
in accordance with the majority of shares of common stock voted
by the public stockholders on any proposed business combination.
However, because the Extension Amendment and Conversion
proposals are not a proposed business combination, the Global
Brands Founders may vote their shares on the Extension Amendment
and Conversion proposals any way they wish (although they have
agreed to vote in favor of the Extension Amendment and
Conversion proposals). Therefore, the Global Brands Founders and
their respective affiliates will vote any common stock over
which they have voting control (including any public shares
owned by them) in favor of the Extension Amendment and
Conversion proposals. The Global Brands Founders are not
entitled to convert any of their shares. On the record date, the
Global Brands Founders beneficially owned and were entitled to
vote 7,187,500 insider shares (Founders
Shares) of Global Brands common stock, representing
approximately 20% of Global Brands issued and outstanding
common stock, and 250,000 public shares of Global Brands common
stock, representing less than an additional 1% of Global
Brands issued and outstanding stock. Accordingly, this may
have the effect of making it easier for the Extension Amendment
and Conversion proposals to be approved.
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In addition, the Global Brands Founders or their affiliates may
choose to buy public shares in the open market and/or through
negotiated private purchases. In the event that purchases do
occur, the purchasers may seek to purchase shares from
stockholders who would otherwise have voted against the
Extension Amendment or Conversion proposals. Any public shares
held by or subsequently purchased by affiliates of Global Brands
will be voted in favor of the Extension Amendment and the
Conversion proposal.
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Q.
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Since Global Brands IPO prospectus states that
Global
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A. You should be aware that Global Brands IPO prospectus
stated that Global Brands would not take any action to amend or
waive
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7
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Brands would not amend Article Sixth or
Article Seventh except in connection with a business
combination, what are my legal rights?
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Article Sixth or Article Seventh of the Charter (except in
connection with, and upon the effectiveness of, a business
combination), including, to allow it to survive for a longer
period of time. Accordingly, each person who purchased public
shares in the IPO and still held such shares upon learning of
these facts may have securities law claims against Global Brands
for rescission (under which a successful claimant has the right
to receive the total amount paid for his or her securities
pursuant to an allegedly deficient prospectus, plus interest and
less any income earned on the securities, in exchange for
surrender of the securities) or damages (compensation for loss
on an investment caused by alleged material misrepresentations
or omissions in the sale of a security).
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Such claims may entitle stockholders asserting them to as much
as $10.00 or more per share, based on the initial offering price
of the IPO units comprised of stock and warrants, less any
amount received from sale of the original warrants, plus
interest from the date of Global Brands IPO (which, in the
case of holders of public shares, may be more than the pro rata
share of the trust account to which they are entitled on
conversion or liquidation).
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In general, a person who purchased shares pursuant to a
defective prospectus or other representation must make a claim
for rescission within the applicable statute of limitations
period, which, for claims made under Section 12 of the
Securities Act and some state statutes, is one year from the
time the claimant discovered or reasonably should have
discovered the facts giving rise to the claim, but not more than
three years from the occurrence of the event giving rise to the
claim. A successful claimant for damages under federal or state
law could be awarded an amount to compensate for the decrease in
value of his or her shares caused by the alleged violation
(including, possibly, punitive damages), together with interest,
while retaining the shares. Claims under the anti-fraud
provisions of the federal securities laws must generally be
brought within two years of discovery, but not more than five
years after occurrence. Rescission and damages claims may not
be extinguished by liquidation of the trust account.
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Even if you do not pursue such claims, others may. If they do,
holders of such claims, who may include all stockholders who own
shares issued in Global Brands IPO, might seek to have the
claims satisfied from funds in the trust account. A consequence
might be that Global Brands assets following the Extension
Amendment could be significantly reduced or depleted entirely.
In addition, the pro rata portion of the trust account payable
to holders of public shares will be less than they would
otherwise have been entitled, or such amount might be
insufficient to fully satisfy a rescission or damages award.
Global Brands cannot predict whether stockholders will bring
such claims, how many might bring them or the extent to which
they might be successful. Moreover, such litigation could result
in the delay of any payments to public stockholders of trust
account funds upon conversion or liquidation.
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8
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You should read the proxy statement carefully for more
information concerning these possibilities and other
consequences of adoption of the Extension Amendment.
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Q.
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Will Global Brands seek any further extensions to
liquidate the trust account?
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A. No, other than the extension until February 28, 2010 as
described in this proxy statement, Global Brands will not seek
any further extension to liquidate the trust account and if it
did, it would require unanimous consent from all remaining
holders of public shares which would be extremely difficult to
obtain as described elsewhere herein. Global Brands board
of directors recognizes that Global Brands IPO prospectus
stated that Global Brands would not take any action allowing it
to survive for a longer period of time except in connection
with, and effective upon, the consummation of a business
combination.
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Q.
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What happens if the Extension Amendment and Conversion
Proposals are approved?
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A. If the Extension Amendment and Conversion proposals are
approved and holders of less than 8,650,000 public shares seek
conversion, Global Brands will file an amendment to its Charter
allowing it to have until February 28, 2010 to consummate the
Framework Transactions. Such approval will also constitute
consent for Global Brands to amend the trust account agreement
to (i) permit the removal from the trust account the Withdrawal
Amount and deliver to the holders of such converting public
shares their pro rata portion of the Withdrawal Amount; (ii)
extend the date on which to liquidate the remaining trust
account to February 28, 2010; (iii) only permit withdrawals from
the amounts remaining in the trust account to pay the expenses
incurred in connection with the Framework Transactions, up to a
maximum of $1 million, and upon consummation of the Framework
Transactions or Global Brands liquidation; and (iv)
prohibit any further changes in the distribution of the trust
account funds, including the date of liquidation, unless each
and every Global Brands common stockholder specifically agrees
in writing to such change. Global Brands will then commence an
offer to exchange all of its outstanding warrants (which
currently expire on December 5, 2012) for new warrants with
different terms, as described herein. If holders of at least
95% of Global Brands outstanding public warrants do not
agree to exchange their warrants for new warrants, the Framework
Transactions will not be consummated. If at least 95% of Global
Brands outstanding public warrants agree to exchange their
warrants for new warrants, then Global Brands will submit the
Framework Transactions to the public stockholders at that time
for their approval. If approved, the Framework Transactions and
the warrant exchange would then be consummated.
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As a condition to entering into the Framework Agreement, the
parties agreed that, if approved by public stockholders, Global
Brands would be permitted to remove up to $1 million from
its trust account to pay for its expenses in connection with the
Framework Transactions as Global Brands does not have sufficient
funds to pay for such expenses. The amendment to the trust
account agreement allowing Global Brands to withdraw up to an
additional $1 million from its trust account to pay the
expenses incurred in connection with the Framework Transactions
will result
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9
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in a decrease of the per-share conversion and liquidation
prices by between approximately $0.03 per share (if no shares
are converted in connection with the Extension Amendment) and
approximately $0.05 per share (if the maximum number of shares
are converted in connection with the Extension Amendment). If
holders of public shares wish to be guaranteed the full
liquidation value, before the removal of such funds, they have
the ability to seek conversion of their shares in connection
with the Extension Amendment and be paid the full amount and
therefore their conversion proceeds will not be reduced. Such
funds will not be used to reduce the indemnity obligations of
the Global Brands Founders described elsewhere in this proxy
statement.
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Q.
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What happens if the Extension Amendment and Conversion
proposals are not approved?
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A. Since Global Brands will not have sufficient time to submit
for approval a suitable target business opportunity to the
stockholders prior to December 6, 2009, if the Extension
Amendment and Conversion proposals are not approved, Global
Brands corporate existence will terminate on December 6,
2009, except for the purposes of winding up its affairs and
liquidating, pursuant to Section 278 of the GCL. This has the
same effect as if Global Brands board of directors and
stockholders had formally voted to approve Global Brands
dissolution pursuant to Section 275 of the GCL. Accordingly,
limiting Global Brands corporate existence to a specified
date as permitted by Section 102(b)(5) of the GCL removed the
necessity to comply with the formal procedures set forth in
Section 275 (which would have required Global Brands board
of directors and stockholders to formally vote to approve Global
Brands dissolution and liquidation and to have filed a
certificate of dissolution with the Delaware Secretary of
State).
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In connection with any liquidation, Global Brands will
distribute to the holders of its public shares, in proportion to
their respective amounts of public shares, an aggregate sum
equal to the amount in the trust account, inclusive of any
interest thereon, plus remaining net assets (subject to Global
Brands obligations under Delaware law to provide for
claims of creditors as described below). The Global Brands
Founders have waived their rights to participate in any
liquidation distribution with respect to their initial
securities. As a consequence of such waivers, a liquidating
distribution will be made only with respect to the public
shares. There will be no distribution from the trust account
with respect to Global Brands warrants, which will expire
worthless. Global Brands will pay the costs of liquidation from
its remaining assets outside of the trust account, which it
believes are sufficient for such purposes. If such funds are
insufficient, JLJ Partners has agreed to advance it the funds
necessary to complete such liquidation (currently anticipated to
be no more than approximately $15,000) and has agreed not to
seek repayment of such expenses.
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Q.
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How do I change my vote?
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A. If you have submitted a proxy to vote your shares and wish
to change your vote, you may do so by delivering a later-dated,
signed proxy card to Global Brands secretary prior to the
date of the special meeting or by voting in person at the
special meeting. Attendance at the special meeting alone will
not change your vote. You also may revoke your proxy by sending
a notice of revocation
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10
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to Global Brands located at 11 West 42nd Street, 21st
Floor, New York, New York 10036, Attn: Corporate Secretary.
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Q.
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What vote is required to approve the Extension Amendment,
Conversion and Adjournment Proposals?
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A. The Extension Amendment and Conversion proposals will
require the affirmative vote of the holders of a majority of
Global Brands outstanding common stock on the record
date. Because these proposals require the affirmative vote of a
majority of the shares of common stock outstanding for approval,
abstentions and shares not entitled to vote because of a broker
non-vote will have the same effect as a vote against the
proposals.
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The approval of the adjournment proposal will require the
affirmative vote of the holders of a majority of Global
Brands outstanding common stock entitled to vote thereon.
Abstentions are deemed entitled to vote on such proposal and,
therefore, they have the same effect as a vote against the
proposal. Broker non-votes are not deemed entitled to vote on
such proposal and, therefore, they will have no effect on the
vote on such proposal.
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If your shares are held by your broker as your nominee (that is,
in street name), you may need to obtain a proxy form
from the institution that holds your shares and follow the
instructions included on that form regarding how to instruct
your broker to vote your shares. If you do not give
instructions to your broker, your broker can vote your shares
with respect to discretionary items, but not with
respect to non- discretionary items. Discretionary
items are proposals considered routine under the rules of the
New York Stock Exchange applicable to member brokerage firms.
These rules provide that for routine matters your broker has the
discretion to vote shares held in street name in the absence of
your voting instructions. On non- discretionary items for which
you do not give your broker instructions, the shares will be
treated as broker non-votes. The Extension Amendment and
Conversion proposals are considered non- discretionary items.
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Q.
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If my shares are held in street name, will my
broker automatically vote them for me?
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A. No. Your broker can vote your shares only if you provide
instructions on how to vote. You should instruct your broker to
vote your shares. Your broker can tell you how to provide these
instructions.
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Q.
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What is a quorum requirement?
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A. A quorum of stockholders is necessary to hold a valid
meeting. A quorum will be present if at least a majority of the
outstanding shares of common stock on the record date are
represented by stockholders present at the meeting or by proxy.
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Your shares will be counted towards the quorum only if you
submit a valid proxy (or one is submitted on your behalf by your
broker, bank or other nominee) or if you vote in person at the
special meeting. Abstentions and broker non- votes will be
counted towards the quorum requirement. If there is no quorum, a
majority of the votes present at the special meeting may adjourn
the special meeting to another date.
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11
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Q.
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Who can vote at the special meeting?
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A. Only holders of record of Global Brands common stock
at the close of business on November 18, 2009 are entitled to
have their vote counted at the special meeting and any
adjournments or postponements thereof. On this record date,
35,937,500 shares of common stock were outstanding and
entitled to vote.
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Stockholder of Record: Shares Registered in Your Name
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If on November 18, 2009 your shares were registered directly in
your name with Global Brands transfer agent, Continental
Stock Transfer & Trust Company, then you are a stockholder
of record. As a stockholder of record, you may vote in person
at the special meeting or vote by proxy. Whether or not you plan
to attend the special meeting in person, we urge you to fill out
and return the enclosed proxy card to ensure your shares are
voted at the special meeting.
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Beneficial Owner: Shares Registered in the Name of a Broker
or Bank
. If on November 18, 2009 your shares were held, not
in your name, but rather in an account at a brokerage firm,
bank, dealer, or other similar organization, then you are the
beneficial owner of shares held in street name and
these proxy materials are being forwarded to you by that
organization. The organization holding your account is
considered to be the stockholder of record for purposes of
voting at the special meeting. As a beneficial owner, you have
the right to direct your broker or other agent on how to vote
the shares in your account. You are also invited to attend the
special meeting. However, since you are not the stockholder of
record, you may not vote your shares in person at the special
meeting unless you request and obtain a valid proxy from your
broker or other agent.
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Q.
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What interests do the Global Brands Founders have in the
approval of the proposals?
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A. The Global Brands Founders have interests in the proposals
that may be different from, or in addition to, your interests as
a stockholder. These interests include ownership of shares and
warrants that may become exercisable in the future, the
possibility of future compensatory arrangements and the
possibility of participation in future financings. See the
section entitled
The Extension Amendment and Conversion
Proposals- Interests of the Global Brands Founders and
Others
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Q.
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What if I object to the Extension Amendment and the
Conversion proposal? Do I have appraisal rights?
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A. Global Brands stockholders do not have appraisal rights in
connection with the Extension Amendment or the Conversion
proposals under the GCL.
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Q.
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What happens to the Global Brands warrants if the
Extension Amendment and Conversion is not approved?
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A. If the Extension Amendment and Conversion is not approved,
Global Brands corporate existence will terminate on
December 6, 2009, Global Brands will be required to liquidate
the trust account on December 6, 2009 and your warrants will
become worthless.
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Q.
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What happens to Global Brands warrants if the Extension
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A. If the Extension Amendment is approved, Global Brands will
continue its corporate existence until February 28, 2010, and
will retain the blank check company restrictions previously
applicable
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Amendment and Conversion Proposals are approved?
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to it. Immediately after approval of the Extension Amendment
and Conversion Proposals, Global Brands will commence an offer
to exchange all of its outstanding warrants for new warrants
with different terms, as described herein. If holders of at
least 95% of Global Brands outstanding public warrants do
not agree to exchange their warrants for new warrants, the
Framework Transactions will not be consummated. If at least 95%
of Global Brands outstanding public warrants agree to
exchange their warrants for new warrants, then Global Brands
will submit the Framework Transactions to the public
stockholders at that time for their approval. If approved, the
Framework Transactions and the warrant exchange would then be
consummated. It is Global Brands position that the
warrants will become exercisable upon the consummation of the
Framework Transactions following stockholder approval. For
more information, see the section entitled
Background
Information-Status of Outstanding Warrants Following the Special
Meeting of Stockholders
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Q.
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What do I need to do now?
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A. Global Brands urges you to read carefully and consider the
information contained in this proxy statement, including the
annexes, and to consider how the proposals will affect you as a
Global Brands stockholder. You should then follow the
instructions provided in this proxy statement and on the
enclosed proxy card to submit a proxy to have your shares voted
at the special meeting.
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Q.
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How do I vote?
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A. If you are a holder of record of Global Brands common stock,
you may vote in person at the special meeting or by submitting a
proxy for the special meeting. Whether or not you plan to
attend the special meeting in person, we urge you to have your
shares voted at the special meeting by submitting a proxy. You
may submit your proxy by completing, signing, dating and
returning the enclosed proxy card in the accompanying
pre-addressed postage paid envelope. You may still attend the
special meeting and vote in person if you have already voted by
proxy.
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Q.
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What should I do if I receive more than one set of voting
materials?
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A. You may receive more than one set of voting materials,
including multiple copies of this proxy statement and multiple
proxy cards or voting instruction cards, if your shares are
registered in more than one name or are registered in different
accounts. For example, if you hold your shares in more than one
brokerage account, you will receive a separate voting
instruction card for each brokerage account in which you hold
shares. Please complete, sign, date and return each proxy card
and voting instruction card that you receive in order to cast a
vote with respect to all of your Global Brands shares.
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Q.
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Who is paying for this proxy solicitation?
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A. Global Brands will pay for the entire cost of soliciting
proxies. In addition to these mailed proxy materials, our
directors and officers may also solicit proxies in person, by
telephone or by other means of communication. These parties will
not be paid any additional compensation for soliciting proxies.
Global Brands may also reimburse brokerage firms, banks and
other agents for the cost of forwarding proxy materials to
beneficial owners.
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Q.
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Who can help answer my questions?
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A. If you have questions about the proposals or if you need
additional copies of the proxy statement or the enclosed proxy
card you should contact:
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Mr. Jay Desai.
Global Brands Acquisition Corp.
11 West 42nd Street, 21st Floor
New York New York 10036
Tel:
(212) 201-8118
Fax:
(646) 354-4718
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or
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Morrow & Co., LLC
470 West Avenue
Stamford, Connecticut
Tel:
(800) 662-5200
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If you intend to seek conversion of your shares, you will need
to deliver your stock (either physically or electronically) to
Global Brands transfer agent prior to the vote at the
meeting. If you have questions regarding the certification of
your position or delivery of your stock, please contact:
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Mr. Mark Zimkind
Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
Tel:
(212) 845-3287
Fax:
(212) 616-7616
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You may also obtain additional information about Global Brands
from documents filed with the U.S. Securities and Exchange
Commission (SEC) by following the instructions in
the section entitled
Where You Can Find More
Information.
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14
FORWARD-LOOKING
STATEMENTS
Global Brands believes that some of the information in this
proxy statement constitutes forward-looking statements. You can
identify these statements by forward-looking words such as
may, expect, anticipate,
contemplate, believe,
estimate, intends, and
continue or similar words. You should read
statements that contain these words carefully because they:
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discuss future expectations;
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contain projections of future results of operations or financial
condition; or
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state other forward-looking information.
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Global Brands believes it is important to communicate its
expectations to its stockholders. However, there may be events
in the future that Global Brands is not able to predict
accurately or over which Global Brands has no control. The
cautionary language discussed in this proxy statement provide
examples of risks, uncertainties and events that may cause
actual results to differ materially from the expectations
described by us in such forward-looking statements, including,
among other things, claims by third parties against the trust
account, unanticipated delays in the distribution of the funds
from the trust account, securities laws claims made against
Global Brands and Global Brands ability to finance and
consummate acquisitions following the distribution of funds from
the trust account. You are cautioned not to place undue reliance
on these forward-looking statements, which speak only as of the
date of this proxy statement.
All forward-looking statements included herein attributable to
Global Brands or any person acting on Global Brands behalf
are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. Except to
the extent required by applicable laws and regulations, Global
Brands undertakes no obligation to update these forward-looking
statements to reflect events or circumstances after the date of
this proxy statement or to reflect the occurrence of
unanticipated events.
SPECIAL
MEETING OF GLOBAL BRANDS STOCKHOLDERS
General
Global Brands is furnishing this proxy statement to its
stockholders as part of the solicitation of proxies by its board
of directors for use at the special meeting of Global Brands
stockholders to be held on December 4, 2009, and at any
adjournment or postponement thereof. This proxy statement is
first being furnished to Global Brands stockholders on or about
November
, 2009 in connection with the
vote on the proposals described herein. This proxy statement
provides you with information you need to know to be able to
vote or instruct your vote to be cast at the special meeting.
Date,
Time and Place
The special meeting of stockholders will be held on
December 4, 2009, at 11:00 a.m. EST at the
offices of Global Brands counsel, Graubard Miller, 405
Lexington Avenue, New York, New York 10174.
Purpose
of the Global Brands Special meeting
At the special meeting of stockholders, Global Brands will ask
holders of its common stock to consider and vote upon the
following proposals:
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a proposal to approve the Extension Amendment to extend the date
on which Global Brands corporate existence terminates from
December 6, 2009 to February 28, 2010;
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a proposal to approve the Conversion; and
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a proposal to adjourn the special meeting to a later date or
dates, if necessary, to permit further solicitation and vote of
proxies if, based upon the tabulated vote at the time of the
special meeting, the Extension Amendment and Conversion
proposals have not been approved.
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Approval of the Extension Amendment proposal is a condition to
the implementation of the Conversion and the approval of the
Conversion proposal is a condition to the implementation of the
Extension Amendment.
Recommendation
of Global Brands Board of Directors
Global Brands board of directors and audit committee:
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has unanimously determined that each of the proposals is fair to
and in the best interests of Global Brands and its stockholders;
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has unanimously approved each of the proposals;
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unanimously recommends that Global Brands common
stockholders vote FOR the Extension Amendment
proposal;
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unanimously recommends that Global Brands common
stockholders vote FOR the Conversion
proposal; and
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unanimously recommends that Global Brands common
stockholders vote FOR the adjournment proposal.
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Record
Date; Who is Entitled to Vote
Global Brands has fixed the close of business on
November 18, 2009, as the record date for
determining Global Brands stockholders entitled to notice of and
to attend and vote at its special meeting. As of the close of
business on November 18, 2009, there were
35,937,500 shares of Global Brands common stock
outstanding and entitled to vote. Each share of Global
Brands common stock is entitled to one vote per share at
the special meeting of stockholders.
The Global Brands Founders will vote in favor of all of the
proposals being presented at the meeting.
Quorum
The presence, in person or by proxy, of a majority of all the
outstanding shares of common stock entitled to vote constitutes
a quorum at the special meeting of stockholders.
Abstentions
and Broker Non-Votes
Proxies that are marked abstain and proxies relating
to street name shares that are returned to Global
Brands but marked by brokers as not voted will be
treated as shares present for purposes of determining the
presence of a quorum on all matters. The latter will not be
treated as shares entitled to vote on the matter as to which
authority to vote is withheld from the broker. If you do not
give the broker voting instructions, under applicable
self-regulatory organization rules, your broker may not vote
your shares on non-routine proposals, such as the
Extension Amendment and Conversion proposals.
Vote of
Global Brands Stockholders Required
The Extension Amendment and Conversion proposals will require
the affirmative vote of the holders of a majority of Global
Brands outstanding common stock on the record date.
Because these proposals require the affirmative vote of a
majority of the shares of common stock outstanding for approval,
abstentions and shares not entitled to vote because of a broker
non-vote will have the same effect as a vote against the
proposals.
The approval of the adjournment proposal will require the
affirmative vote of the holders of a majority of Global
Brands outstanding common stock entitled to vote thereon.
Abstentions are deemed entitled to vote on such proposal and,
therefore, they have the same effect as a vote against the
proposal. Broker non-votes are not deemed entitled to vote on
such proposal and, therefore, they will have no effect on the
vote on such proposal.
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Voting
Your Shares
Each share of common stock of Global Brands that you own in your
name entitles you to one vote at the special meeting of
stockholders. Your proxy card shows the number of shares of
Global Brands common stock that you own. If your shares
are held in street name or are in a margin or
similar account, you should contact your broker to ensure that
votes related to the shares you beneficially own are properly
counted.
There are three ways to vote your shares of Global Brands common
stock at the special meeting:
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You Can Submit a Proxy to Have Your Shares Voted at the
Special Meeting By Signing and Returning the Enclosed Proxy
Card.
If you submit a proxy card, your
proxy, whose name is listed on the proxy card, will
vote your shares as you instruct on the proxy card. If you sign
and return the proxy card but do not give instructions on how to
vote your shares, your shares will be voted as recommended by
Global Brands board FOR all of the proposals.
Proxy cards received after a matter has been voted upon at the
special meeting will not be counted.
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You Can Attend the Special meeting and Vote in
Person.
Global Brands will give you a ballot when
you arrive. However, if your shares are held in the name of your
broker, bank or another nominee, you must get a proxy from the
broker, bank or other nominee. That is the only way Global
Brands can be sure that the broker, bank or nominee has not
already voted your shares.
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You can submit a proxy electronically or by telephone if you
hold your securities in street name.
Stockholders who hold their securities through a broker or
bank will have the option to authorize their proxies to vote
their securities electronically through the Internet or by
telephone. If you hold your securities through a broker, bank or
other nominee, you should check your proxy card or voting
instruction card forwarded by your broker, bank or other nominee
who holds your securities for instructions on how to vote by
these methods.
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If you have any questions regarding how to vote or submit a
proxy, please contact Morrow & Co., LLC, Global
Brands proxy solicitor, at
(800) 662-5200.
Revoking
Your Proxy
If you give a proxy, you may revoke it at any time before it is
exercised by doing any one of the following:
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you may send another proxy card with a later date;
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you may notify Global Brands by sending a revocation of proxy to
its executive offices located at 11 West 42nd Street,
21st Floor, New York, New York 10036, Attn: Corporate
Secretary, before the special meeting that you have revoked your
proxy; or
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you may attend the special meeting, revoke your proxy, and vote
in person, as indicated above.
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Who Can
Answer Your Questions About Voting Your Shares
If you have any questions about how to vote or direct a vote in
respect of your shares of Global Brands common stock, you
may call Morrow & Co., LLC, Global Brands proxy
solicitor, at
(800) 662-5200,
or Jay Desai, Global Brands vice president-mergers
and acquisitions, at
(212) 201-8118.
Proxy
Solicitation Costs
Global Brands is soliciting proxies on behalf of its board of
directors. All solicitation costs will be paid by Global Brands.
This solicitation is being made by mail but also may be made by
telephone or in person. Global Brands and its directors,
officers and employees may also solicit proxies in person, by
telephone or by other electronic means, including email and
facsimile.
Global Brands has hired Morrow & Co., LLC to assist in
the proxy solicitation process. It will pay that firm a fee of
$20,000 plus disbursements. Such payments will be made from
funds held outside of the trust
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account. If the Framework Transactions are successfully closed,
Global Brands will pay Morrow & Co., LLC an additional
contingent fee of $20,000.
Global Brands will ask banks, brokers and other institutions,
nominees and fiduciaries to forward its proxy materials to their
principals and to obtain their authority to execute proxies and
voting instructions. Global Brands will reimburse them for their
reasonable expenses.
BACKGROUND
Global
Brands
Global Brands is a blank check company formed in July 2007 to
effect a merger, capital stock exchange, asset acquisition or
other similar business combination with an operating business.
On December 12, 2007, Global Brands consummated its IPO of
28,750,000 units, including 3,750,000 units subject to
the underwriters over-allotment option, with each unit
consisting of one share of common stock and one warrant, each to
purchase one share of common stock at an exercise price of $7.00
per share. Simultaneously with the consummation of the IPO,
Global Brands consummated the private sale of 5,000,000
Sponsors Warrants at a price of $1.00 per Sponsors
Warrant, generating total proceeds of $5,000,000, to JLJ
Partners, an entity controlled by Joel J. Horowitz, Global
Brands chief executive officer, treasurer and director,
Lawrence S. Stroll, Global Brands chairman of the board,
and John D. Idol, Global Brands president, secretary and
director. The units from the IPO (including the
3,750,000 units pursuant to the over-allotment option) were
sold at an offering price of $10.00 per unit, generating total
gross proceeds of $287,500,000. After deducting the underwriting
discounts and commissions and the offering expenses, the total
net proceeds to Global Brands from the offering (including the
proceeds from the 3,750,000 units pursuant to the
over-allotment option and the private sale of sponsors
warrants) were $286,390,858, of which $286,125,000 was deposited
into a trust fund and the remaining proceeds became available to
be used to provide for business, legal and accounting due
diligence on prospective business combinations and other
continuing general and administrative expenses. Since the IPO,
Global Brands also had an aggregate of up to $2,875,000 of
interest earned on the proceeds in the trust fund that is
available to it to fund its working capital requirements
(provided that there were sufficient funds available to it to
pay its tax obligations then due at that time), as well as any
amounts necessary to pay its tax obligations. Through
November 18, 2009, Global Brands had used all of the net
proceeds that were not deposited into the trust fund to pay
general and administrative expenses, and had drawn interest
income in the amount of approximately $2,600,000 and $2,500,000
for its working capital and tax obligations, respectively.
Global Brands does not currently have any funds available to it
outside of the trust account. The net proceeds deposited into
the trust fund remain on deposit in the trust fund earning
interest. As of November 18, 2009, the trust fund held
approximately $286,100,000.
Business
Combination Activity
Since the completion of its IPO, Global Brands has been dealing
with many of the practical difficulties associated with the
identification of a business combination target, negotiating
business terms with potential targets and conducting related due
diligence. Following the IPO, Global Brands began a wide
international search for a suitable operating business
and/or
asset
to acquire. Global Brands created and implemented a process
involving three major components: (i) several national and
regional investment banking firms, including Citigroup, Morgan
Stanley, Merrill Lynch, JPMorgan Securities Inc., Financo,
Deutsche Bank, Goldman, Sachs & Co., Credit Suisse,
Lazard, Rothschild and Stifel, Nicolaus & Company,
among others, were solicited and informed of Global Brands
objectives and asked to recommend and introduce prospective
business combination targets; (ii) Global Brands engaged in
direct contact with private equity firms, inquiring about their
portfolio companies; and (iii) Global Brands utilized its
board of directors and officers affiliations with other
investment platforms as well as accounting and legal firms as
means of introduction and subsequent direct contact with
potential acquisition targets for a business combination.
Additionally, Global Brands worked with several private equity
firms to evaluate joint-acquisitions, whereby the private equity
firm would commit to make an investment into Global Brands to
assure that the transaction would be approved. Through this
process, Global Brands studied over 150 potential target
companies. Primarily as a result of the difficult
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and deteriorating economic climate since its IPO, Global Brands
has not been able to identify a suitable target business to
present to its stockholders.
The
Framework Transactions
On November 9, 2009, Global Brands entered into an
arrangement with the Gerrity Group pursuant to which Global
Brands will seek to consummate the Framework Transactions in
which Global Brands will continue its business as a corporation
that will elect to qualify to be taxed as a REIT. The Framework
Transactions with the Gerrity Group do not provide for Global
Brands to acquire any business instead, it provides
that Global Brands will continue its corporate existence and
simply commence operations as a REIT following consummation of
the transactions.
The Gerrity Group is a real estate company specializing in
retail properties. Gerrity Groups management team, led by
William Gerrity, has experience in all aspects of the
underwriting, acquisition, management, leasing and operation of
retail real estate. The firm has a history of retail real estate
investing on the West Coast and operating successfully in
diverse markets globally. Gerrity Groups management team
has two decades of experience focusing on retail real estate
investments and over its history has partnered with a wide range
of institutional investors.
Upon completion of the Framework Transactions, Global Brands
will be a blind-pool REIT and intends to invest in, acquire,
own, lease, reposition and manage a diverse portfolio of
necessity-based retail properties, including, primarily, well
located community and neighborhood shopping centers, anchored by
national or regional supermarkets and drugstores. After
consummation of the Framework Transactions, the directors of
Global Brands will be William Gerrity, Matthew Ostrower, William
C. Hosler, Michael Foster, Richard Green, Joel Horowitz and John
Muse with William Gerrity serving as chief executive officer and
president and Matthew Ostrower serving as chief investment
officer. For more information on the terms of the Framework
Transactions, you should review the materials filed by Global
Brands with the SEC by following the instructions in the section
entitled
Where You Can Find More Information
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Prior to Global Brands IPO, the Global Brands Founders
acquired 7,187,500 units of Global Brands
(Founders Units), representing
7,187,500 shares of common stock of Global Brands
(Founders Shares) and 7,187,500 warrants to
purchase shares of common stock of Global Brands
(Founders Warrants). Such securities were
placed in escrow pursuant to an escrow agreement with
Continental Stock Transfer & Trust Company upon
consummation of the IPO. In connection with the Framework
Transactions, the Global Brands Founders have agreed to cancel
an aggregate of 7,118,056 Founders Shares and 6,368,056
Founders Warrants upon consummation of such transactions.
The remaining 69,444 Founders Shares and 819,444
Founders Warrants (which will be exchanged for warrants
with new terms upon consummation of the warrant exchange as
described below) will be held in escrow and will not be released
until 180 days after consummation of the Framework
Transactions.
If the Extension Amendment and Conversion proposals are approved
and effectuated, Global Brands will then commence an offer to
exchange all of its outstanding warrants for new warrants with
different terms. The new warrants to be offered in the warrant
exchange will have an exercise price of $12.00 per share and
will expire five years from the consummation of the Framework
Transactions, unless earlier redeemed if Global Brands
stock price is at least $18.75 for any 20 trading days within a
30-trading day period. The Founders Warrants and the
warrants purchased by certain of the Global Brands Founders
simultaneously with the consummation of the IPO will be
exchanged for new warrants with the same terms as described
above but such warrants will not be redeemable by Global Brands
unless the stock price is at least $22.00 for any 20 trading
days within a 30-trading day period.
If holders of at least 95% of Global Brands outstanding
public warrants do not agree to exchange their warrants for new
warrants, the Framework Transactions will not be consummated. If
at least 95% of Global Brands outstanding public warrants
(which currently expire on December 5, 2012) agree to
exchange their warrants for new warrants, then Global Brands
will submit the Framework Transactions to the public
stockholders at that time for their approval. If approved, the
Framework Transactions and the warrant exchange would then be
consummated.
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If the Framework Transactions are consummated, the remaining
funds in Global Brands trust account will be released to
pay any additional converting stockholders, transaction fees and
expenses, deferred underwriting discounts and commissions, as
well as to pay any tax liabilities and reimbursement of expenses
of the Global Brands Founders if either are incurred prior to
the closing of the Framework Transactions. The balance of the
funds will be released to invest in real estate assets in
accordance with Global Brands proposed business plan and
for working capital and general corporate purposes. Consummation
of the Framework Transactions is conditioned on, among other
things, there being available to Global Brands, after giving
effect to all conversions and other share purchases, but prior
to payment of transaction expenses, no less than
$200 million.
THE
EXTENSION AMENDMENT AND CONVERSION PROPOSALS
The
Extension Amendment and Conversion Proposals
Pursuant to the Extension Amendment, Global Brands is proposing
to amend its Charter to extend that date on which Global
Brands corporate existence terminates from
December 6, 2009 to February 28, 2010. Pursuant to the
Conversion proposal, each holder of public shares is being given
the chance to elect to convert their public shares into their
pro rata portion of the funds held in the trust account. All
holders of Global Brands public shares who vote in favor
of the Conversion, whether they vote for or against the
Extension Amendment, are entitled to convert all or a portion of
their public shares into their pro rata portion of the trust
account, provided that the Extension Amendment is approved and
receive the per-share conversion price (anticipated to be
approximately $9.95, which is the same as the anticipated
per-share liquidation price if the Extension Amendment and
Conversion proposals are not approved). Voting in favor of the
Conversion does not require you to convert your public shares.
You must, however, vote in favor of the Conversion in order to
convert your public shares.
The Extension Amendment and the Conversion proposals are
essential to the overall implementation of the board of
directors plan to continue Global Brands corporate
existence until February 28, 2010 to allow Global Brands
more time to complete the Framework Transactions. Approval of
the Extension Amendment proposal is a condition to the
implementation of the Conversion and the approval of the
Conversion proposal is a condition to the implementation of the
Extension Amendment.
The Extension Amendment and Conversion proposals will not be
effectuated if holders of more than 8,650,000 public shares seek
conversion of their shares.
If the Extension Amendment and Conversion proposals are not
approved by the stockholders, Global Brands corporate
existence will terminate on December 6, 2009 without Global
Brands consummation of the Framework Transactions.
The board of directors believes that decisions regarding Global
Brands future, such as whether to continue its existence
or have its existence terminate, should be determined by Global
Brands current stockholders and they should not be bound
by the restrictions implemented by the stockholders at the time
of the IPO. The current stockholders should not be prohibited
from amending the Charter to allow Global Brands to continue its
existence, especially since all holders of public shares are
being offered the opportunity to convert their public shares and
receive their pro rata portion of the trust account in
connection with the approval of the proposals which will occur
close in time to December 6, 2009 as contemplated in the
IPO prospectus. Additionally, given Global Brands
expenditure of time, effort and money on several possible
business combinations, circumstances warrant providing those who
believe they might find the Framework Transactions to be an
attractive investment the opportunity to approve such
transactions.
A copy of the proposed amendments to the Charter of Global
Brands is attached to this proxy statement as Annex A.
20
Reasons
for the Proposals
Since the completion of its IPO, Global Brands has been dealing
with many of the practical difficulties associated with the
identification of a business combination target, negotiating
business terms with potential targets and conducting related due
diligence. Following the IPO, Global Brands began a wide
international search for a suitable operating business
and/or
asset
to acquire. Global Brands created and implemented a process
involving three major components: (i) several national and
regional investment banking firms, including Citigroup, Morgan
Stanley, Merrill Lynch, JPMorgan Securities Inc., Financo,
Deutsche Bank, Goldman, Sachs & Co., Credit Suisse,
Lazard, Rothschild and Stifel, Nicolaus & Company,
among others, were solicited and informed of Global Brands
objectives and asked to recommend and introduce prospective
business combination targets; (ii) Global Brands engaged in
direct contact with private equity firms, inquiring about their
portfolio companies; and (iii) Global Brands utilized its
board of directors and officers affiliations with
other investment platforms as well as accounting and legal firms
as means of introduction and subsequent direct contact with
potential acquisition targets for a business combination.
Additionally, Global Brands worked with several private equity
firms to evaluate joint-acquisitions, whereby the private equity
firm would commit to make an investment into Global Brands to
assure that the transaction would be approved. Through this
process, Global Brands studied over 150 potential target
companies. Primarily as a result of the difficult and
deteriorating economic climate since its IPO, Global Brands has
been unable to identify a suitable target business to present to
its stockholders. As indicated above, on November 9, 2009,
Global Brands entered into an arrangement with the Gerrity Group
pursuant to which Global Brands will seek to consummate the
Framework Transactions in order to continue its business as a
corporation that will elect to qualify to be taxed as a REIT.
As stated above in
Why is Global Brands proposing the
Extension Amendment and the Conversion proposal?
,
Global Brands believes the Framework Transactions are in the
best interests of its stockholders, and because Global Brands
will not be able to conclude such transactions by
December 6, 2009, Global Brands has determined to seek
stockholder approval to extend Global Brands corporate
existence from December 6, 2009 until February 28,
2010 to allow Global Brands the opportunity to complete such
transactions. If the Extension Amendment and Conversion
proposals are approved and holders of less than 8,650,000 public
shares seek conversion, Global Brands will file an amendment to
its Charter allowing it to have until February 28, 2010 to
consummate the Framework Transactions. Global Brands will then
commence an offer to exchange all of its outstanding warrants
for new warrants with different terms, as described herein. If
holders of at least 95% of Global Brands outstanding
public warrants do not agree to exchange their warrants for new
warrants, the Framework Transactions will not be consummated. If
at least 95% of Global Brands outstanding public warrants
agree to exchange their warrants for new warrants, then Global
Brands will submit the Framework Transactions to the public
stockholders at that time for their approval. If approved, the
Framework Transactions and the warrant exchange would then be
consummated.
Global Brands Charter purports to prohibit amendment to
certain of its provisions, including any amendment that would
extend its corporate existence beyond December 6, 2009,
except in connection with, and effective upon consummation of, a
business combination. Global Brands IPO prospectus did not
suggest in any way that this provision, or the Charters
other business combination procedures, were subject to change.
Global Brands believes that these provisions were included to
protect Global Brands stockholders from having to sustain their
investments for an unreasonably long period, if Global Brands
failed to find a suitable business combination in the timeframe
contemplated, and the application of those investments without
the stockholder review customarily provided for them. Global
Brands also believes, however, that given Global Brands
expenditure of time, effort and money on several possible
business combinations, circumstances warrant providing those who
believe they might find the Framework Transactions to be an
attractive investment opportunity, inasmuch as Global Brands is
also affording stockholders who wish to convert their public
shares as originally contemplated, the opportunity to do so as
well.
Global Brands has received an opinion from special Delaware
counsel, Richards, Layton, concerning the validity of the
Extension Amendment. Global Brands did not request Richards,
Layton to opine on whether the provisions currently contained in
the Charter prohibiting amendments to certain provisions thereof
prior to consummation of a business combination was valid when
adopted. Richards, Layton concluded in its opinion,
21
based upon the analysis set forth therein and its examination of
Delaware law, and subject to the assumptions, qualifications,
limitations and exceptions set forth in its opinion, that
the amendments to Articles Sixth and Seventh of the
Certificate of Incorporation ..., if duly adopted by the Board
of Directors of [Global Brands] (by vote of the majority of the
directors present at a meeting at which a quorum is present or,
alternatively, by unanimous written consent) and duly approved
by the holders of a majority of the outstanding stock of [Global
Brands] entitled to vote thereon, all in accordance with
Section 242(b) of the [GCL], would be valid and effective
when filed with the Secretary of State in accordance with
Sections 103 and 242 of the [GCL]. A copy of
Richards, Laytons opinion is included as Annex B to
this proxy statement, and stockholders are urged to review it in
its entirety.
If the
Extension Amendment and Conversion Proposals Are Not
Approved
If the Extension Amendment and Conversion proposals are not
approved by December 6, 2009, Global Brands corporate
existence will terminate except for the purposes of winding up
its affairs and liquidating, pursuant to Section 278 of the
GCL. This has the same effect as if its board of directors and
stockholders had formally voted to approve its dissolution
pursuant to Section 275 of the GCL. Accordingly, limiting
its corporate existence to a specified date as permitted by
Section 102(b)(5) of the GCL removed the necessity to
comply with the formal procedures set forth in Section 275
of the GCL (which would have required its board of directors and
stockholders to formally vote to approve its dissolution and
liquidation and to have filed a certificate of dissolution with
the Delaware Secretary of State).
In connection with its liquidation, Global Brands will
distribute to the holders of its public shares, in proportion to
their respective amounts of public shares, an aggregate sum
equal to the amount in the trust account, inclusive of any
undistributed interest thereon, plus remaining net assets
(subject to Global Brands obligations under Delaware law
to provide for claims of creditors as described below). The
Global Brands Founders have waived their rights to participate
in any liquidation distribution with respect to their initial
shares. As a consequence of such waivers, a liquidating
distribution will be made only with respect to the public
shares. There will be no distribution from the trust account
with respect to Global Brands warrants, which will expire
worthless.
If Global Brands liquidates, Joel J. Horowitz, Lawrence S.
Stroll and John D. Idol have agreed that they will be personally
liable to pay debts and obligations to third parties or target
businesses that are owed money by Global Brands for services
rendered or contracted for or products sold to Global Brands in
excess of the net proceeds of the IPO not held in the trust
account but only if, and to the extent, that the claims would
otherwise reduce the amount in the trust account payable to its
public stockholders in the event of a liquidation, and only if
such a third party or prospective target business does not
execute a valid and enforceable waiver. There is no assurance,
however, that they will be able to satisfy those obligations.
Based on the cash available to Global Brands outside of its
trust account for working capital and Global Brands
outstanding expenses owed to all creditors (both those that have
signed trust fund waivers and those that have not), it is not
anticipated that Messrs. Horowitz, Stroll and Idol will
have any indemnification obligations. Accordingly, regardless of
whether an indemnification obligation exists, the per share
liquidation price for the public shares is anticipated to be
approximately $9.95. Nevertheless, Global Brands cannot assure
you that the per share distribution from the trust account, if
Global Brands liquidates, will not be less than $9.95, plus
interest, due to unforeseen claims of creditors.
Under the GCL, stockholders may be held liable for claims by
third parties against a corporation to the extent of
distributions received by them in a dissolution. If the
corporation complies with certain procedures set forth in
Section 280 of the GCL intended to ensure that it makes
reasonable provision for all claims against it, including a
60-day
notice period during which any third-party claims can be brought
against the corporation, a
90-day
period during which the corporation may reject any claims
brought, and an additional
150-day
waiting period before any liquidating distributions are made to
stockholders, any liability of stockholders with respect to a
liquidating distribution is limited to the lesser of such
stockholders pro rata share of the claim or the amount
distributed to the stockholder, and any liability of the
stockholder would be barred after the third anniversary of the
dissolution. However, if the Extension Amendment is not
approved, it is Global Brands intention to make
liquidating distributions to its stockholders as soon as
reasonably possible
22
after December 6, 2009 and, therefore, Global Brands does
not intend to comply with those procedures. As such, Global
Brands stockholders could potentially be liable for any
claims to the extent of distributions received by them and any
liability of Global Brands stockholders may extend well
beyond the third anniversary of such date. Because Global Brands
will not be complying with Section 280, Section 281(b)
of the GCL requires Global Brands to adopt a plan that will
provide for payment, based on facts known to it at such time, of
(i) all existing claims, (ii) all pending claims and
(iii) all claims that may be potentially brought against it
within the subsequent 10 years. Accordingly, Global Brands
would be required to provide for any claims of creditors known
to it at that time or those that it believes could be
potentially brought against it within the subsequent
10 years prior to it distributing the funds in the trust
account to its public stockholders. Global Brands cannot make
any assurance as to when such plan will be completed and when
liquidation distributions will be made. As a result, liquidation
distributions could take 60 days or more to be completed.
Because Global Brands is a blank check company, rather than an
operating company, and its operations have been limited to
searching for prospective target businesses to acquire, the only
likely claims to arise would be from potential target
businesses, many of whom have given Global Brands agreements
waiving any right, title, interest or claim of any kind they may
have in or to any monies held in the trust account, or Global
Brands vendors (such as accountants, lawyers, investment
bankers, etc.). As a result, the claims that could be made
against Global Brands are significantly limited and the
likelihood that any claim that would result in any liability
extending to the trust account is remote. Nevertheless, such
waiver agreements may not be enforceable. Accordingly, Global
Brands cannot assure you that third parties will not seek to
recover from Global Brands stockholders amounts owed to
them by Global Brands.
If there are no funds remaining to pay the costs associated with
the implementation and completion of the liquidation and
distribution, JLJ Partners has agreed to advance Global Brands
the funds necessary to pay such costs and complete such
liquidation (currently anticipated to be no more than
approximately $15,000) and not to seek repayment for such
expenses.
If the
Extension Amendment and Conversion Proposals are
Approved
If the Extension Amendment and Conversion proposals are approved
and holders of less than 8,650,000 public shares seek
conversion, Global Brands will file an amendment to its Charter
with the Secretary of State of the State of Delaware in the form
of Annex A hereto allowing it to have until
February 28, 2010 to consummate the Framework Transactions.
Global Brands will remain a reporting company under the
Securities Exchange Act of 1934 and its units, common stock and
warrants will remain publicly traded. Approval of the Extension
Amendment and Conversion proposals will also constitute consent
for Global Brands to amend the trust account agreement to
(i) permit the removal from the trust account the
Withdrawal Amount and deliver to the holders of such converting
public shares their pro rata portion of the Withdrawal Amount;
(ii) extend the date on which to liquidate the remaining
trust account to February 28, 2010; (iii) only permit
withdrawals from the amounts remaining in the trust account to
pay the expenses incurred in connection with the Framework
Transactions, up to a maximum of $1 million, and upon
consummation of the Framework Transactions or Global
Brands liquidation; and (iv) prohibit any further
changes in the distribution of the trust account funds,
including the date of liquidation, unless each and every Global
Brands common stockholder specifically agrees in writing to such
change. Citigroup has consented to such amendment provided that
public stockholders approve the Extension Amendment and
Conversion proposals. Global Brands will then commence an offer
to exchange all of its outstanding warrants for new warrants
with different terms, as described herein. If holders of at
least 95% of Global Brands outstanding public warrants do
not agree to exchange their warrants for new warrants, the
Framework Transactions will not be consummated. If at least 95%
of Global Brands outstanding public warrants agree to
exchange their warrants for new warrants, then Global Brands
will submit the Framework Transactions to the public
stockholders at that time for their approval. If approved, the
Framework Transactions and the warrant exchange would then be
consummated. Global Brands will have until February 28,
2010 to complete the Framework Transactions.
As a condition to entering into the Framework Agreement, the
parties agreed that, if approved by public stockholders, Global
Brands would be permitted to remove up to $1 million from
its trust account to pay for its expenses in connection with the
Framework Transactions as Global Brands does not have sufficient
funds
23
to pay for such expenses. The amendment to the trust account
agreement allowing Global Brands to withdraw up to an additional
$1 million from its trust account to pay the expenses
incurred in connection with the Framework Transactions will
result in a decrease of the per-share conversion and liquidation
prices by between approximately $0.03 per share (if no shares
are converted in connection with the Extension Amendment) and
approximately $0.05 per share (if the maximum number of shares
are converted in connection with the Extension Amendment). If
holders of public shares wish to be guaranteed the full
liquidation value, before the removal of such funds, they have
the ability to seek conversion of their shares in connection
with the Extension Amendment and be paid the full amount and
therefore their conversion proceeds will not be reduced. Such
funds will not be used to reduce the indemnity obligations of
the Global Brands Founders described elsewhere in this proxy
statement.
You are not being asked to consider and vote on the Framework
Transactions at this time. If you are a public stockholder, the
Extension Amendment and Conversion proposals are approved, you
do not seek conversion of your public shares in connection
therewith, the warrant exchange offer is accepted by at least
95% of the outstanding public warrants and you do not
subsequently sell your shares prior to the record date for the
special meeting to be held in connection with the Framework
Transactions, then you will have the right to vote on the
Framework Transactions if and when it is submitted to
stockholders. Consummation of the Framework Transactions is
conditioned on, among other things, there being available to
Global Brands, after giving effect to all conversions and other
share purchases, but prior to payment of transaction expenses,
no less than $200 million. Accordingly, if an aggregate of
more than 8,650,000 public shares (which is less than the
maximum number of public shares that could be converted pursuant
to the Charter and IPO prospectus) seek conversion in connection
with either this meeting or the subsequent meeting to approve
the Framework Transactions, Global Brands will not be able to
consummate the Framework Transactions and will be forced to
liquidate.
Possible
claims against and Impairment of the
Trust Account
The Extension Amendment and Conversion proposals will not be
effectuated if holders of more than 8,650,000 public shares seek
conversion of their shares. If the Extension Amendment and
Conversion proposals are not approved by December 6, 2009,
Global Brands corporate existence will terminate except
for the purposes of winding up its affairs and liquidating,
pursuant to Section 278 of the GCL. If the Extension
Amendment and Conversion proposals are approved and holders of
less than 8,650,000 public shares seek conversion, Global Brands
will file an amendment to its Charter allowing it to have until
February 28, 2010 to consummate the Framework Transactions.
Such approval will also constitute consent for Global Brands to
(i) remove from the trust account the Withdrawal Amount and
(ii) deliver to the holders of such converting public
shares their pro rata portion of the Withdrawal Amount. The
remaining amount in trust will only be released (except to pay
certain expenses as described herein) upon the consummation of
the Framework Transactions or Global Brands liquidation.
Since the Extension Amendment and Conversion proposals will not
be effectuated if holders of more than 8,650,000 public shares
seek conversion of their shares, it is anticipated that Global
Brands will have at least approximately $200 million, prior
to payment of transaction expenses, remaining in the trust
account after this initial special meeting. However, you should
be aware that because Global Brands IPO prospectus stated
that Global Brands would not take any action allowing it to
survive for a longer period of time except in connection with,
and effective upon, the consummation of a business combination,
as required by its certificate of incorporation, you may have
securities law claims against Global Brands for rescission
(under which a successful claimant has the right to receive the
total amount paid for his or her securities pursuant to an
allegedly deficient prospectus, plus interest and less any
income earned on the securities, in exchange for surrender of
the securities) or damages (compensation for loss on an
investment caused by alleged material misrepresentations or
omissions in the sale of a security). Such claims may entitle
stockholders asserting them to as much as $10.00 or more per
share, based on the initial offering price of the IPO units
comprised of stock and warrants, less any amount received from
sale of the original warrants, plus interest from the date of
Global Brands IPO (which, in the case of holders of public
shares, may be more than the pro rata share of the trust account
to which they are entitled on conversion or liquidation).
24
In general, a person who purchased shares pursuant to a
defective prospectus or other representation must make a claim
for rescission within the applicable statute of limitations
period, which, for claims made under Section 12 of the
Securities Act and some state statutes, is one year from the
time the claimant discovered or reasonably should have
discovered the facts giving rise to the claim, but not more than
three years from the occurrence of the event giving rise to the
claim. A successful claimant for damages under federal or state
law could be awarded an amount to compensate for the decrease in
value of his or her shares caused by the alleged violation
(including, possibly, punitive damages), together with interest,
while retaining the shares. Claims under the anti-fraud
provisions of the federal securities laws must generally be
brought within two years of discovery, but not more than five
years after occurrence. Rescission and damages claims would not
necessarily be finally adjudicated by the time the Framework
Transactions may be completed, and such claims would not be
extinguished by consummation of that transaction.
Even if you do not pursue such claims, others, who may include
all holders of public shares, may. Global Brands cannot predict
whether Global Brands stockholders will bring such claims, how
many might bring them or the extent to which they might be
successful.
Depletion of the trust account as a result of claims being made
against it as described above could have the consequence of
holders of public shares not receiving the same amount in the
distribution to them of the pro rata portion of the trust
account if no such claims had been made.
Assuming Global Brands trust account is not depleted by
liabilities for securities law claims or other expenses, Global
Brands estimates that all public stockholders would receive as
of February 28, 2010, upon liquidation, approximately $9.95
per share (not taking into account any of the $1 million
that Global Brands will have the ability to withdraw from the
trust account to pay the expenses incurred in connection with
the Framework Transactions). This per share amount may be less
than the possible per-share amount of a successful rescission
claim, which could be up to approximately $10.00, based on the
initial offering price of the IPO units comprised of stock and
warrants, less any amount received from sale of the
originally-attached warrants, plus interest from the date of the
IPO. A rescission award may also bear interest at a higher rate
than that earned on trust account funds. Public stockholders
would also incur costs in prosecuting such claims, which would
reduce the per-share amount they realize.
Global Brands has attempted to structure the Extension Amendment
and the Conversion proposals to preserve the investment
proposition set forth in the IPO prospectus for public
stockholders by giving them their right to convert on the date
of the stockholder meeting, which is scheduled for
December 4, 2009 and receive their pro rata portion of the
trust account shortly thereafter. This is designed to limit the
potential damages, but it is impossible to predict how courts
would rule in such a case. A further deterrent to the bringing
of a rescission claim is the significant costs that stockholders
would incur in prosecuting those claims.
Interests
of the Global Brands Founders and Others
In considering the recommendation of the board of directors of
Global Brands to vote for approval of the proposals, you should
be aware that the Global Brands Founders have agreements or
arrangements that provide them with interests that differ from,
or are in addition to, those of Global Brands stockholders
generally. In particular:
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If the Extension Amendment is not approved by December 6,
2009, Global Brands Charter provides that it will
automatically be liquidated. In such event, the Founders
Units issued to the Global Brands Founders before the IPO for an
aggregate purchase price of $25,000 would be worthless because
the Global Brands Founders are not entitled to receive any of
the liquidation proceeds with respect to such securities. The
Founders Warrants included in such Founders Units
are identical to the public warrants except that they will
become exercisable after the business combination only if and
when the last sales price of Global Brands common stock
exceeds $14.25 per share for any 20 trading days within any
30-trading day period beginning 90 days after the
consummation of a business combination and the warrants will be
exercisable on a cashless basis and will not be redeemable by
Global Brands, in each case, as long as they are held by the
Global Brands Founders or their permitted transferees. Such
units
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had an aggregate market value of $75,396,875 based upon the
units closing bid price of $10.49 on the NYSE Amex on
November 18, 2009, the record date for the Global Brands
special meeting. If the Framework Transactions are consummated,
the Global Brands Founders have agreed that certain of their
Founders Shares and Founders Warrants will be
cancelled.
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The Global Brands Founders also purchased 5,000,000 warrants,
for an aggregate purchase price of $5,000,000 (or $1.00 per
warrant), pursuant to agreements with Global Brands and
Citigroup that were entered into in connection with Global
Brands IPO. These purchases took place on a private
placement basis simultaneously with the consummation of Global
Brands IPO. All of the proceeds Global Brands received
from these purchases were placed in Global Brands trust
account. The warrants are identical to the Global Brands
warrants except that (i) the warrants will not be
transferable or salable by holders (except in certain limited
circumstances such as to relatives and trusts for estate
planning purposes, provided the transferee agrees to be bound by
the transfer restrictions) until Global Brands completes a
business combination, (ii) they will be exercisable on a
cashless basis and (iii) if Global Brands calls the
warrants for redemption, the warrants will not be redeemable so
long as such warrants are held by the initial holders or their
affiliates, including any permitted transferees. All of the
warrants will become worthless if the Extension Amendment is not
approved and Global Brands is liquidated (as will the public
warrants). Such warrants had an aggregate market value of
$2,500,000, based on the warrants closing bid price of
$0.50 on the NYSE Amex on November 18, 2009, the record
date for the Global Brands special meeting.
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If Global Brands liquidates prior to the consummation of a
business combination, Joel J. Horowitz, Lawrence S. Stroll and
John D. Idol, respectively Global Brands chief executive
officer, chairman, and president, will be personally liable to
ensure that the proceeds in the trust account are not reduced by
the claims of target businesses or claims of vendors or other
entities that are owed money by Global Brands for services
rendered or contracted for or products sold to Global Brands.
However, the indemnification agreement entered into by each of
Messrs. Horowitz, Stroll and Idol specifically provides for
two exceptions to the personal indemnity each has given
thereunder: Messrs. Horowitz, Stroll and Idol will have no
personal liability (1) as to any claimed amounts owed to a
target business or vendor or other entity who has executed a
valid and enforceable agreement with Global Brands waiving any
right, title, interest or claim of any kind they may have in or
to any monies held in the trust account, or (2) as to any
claims under Global Brands indemnity with the underwriters
of the IPO against certain liabilities, including liabilities
under the Securities Act. Although Global Brands has obtained
waiver agreements from certain vendors and service providers it
has engaged and owes money to, and from the prospective target
businesses it has negotiated with, whereby such parties have
waived any right, title, interest or claim of any kind they may
have in or to any monies held in the trust account, there is no
guarantee that they will not seek recourse against the trust
account notwithstanding such agreements or that other vendors
who did not execute such waivers (representing approximately
$
for liabilities owed by Global Brands) will not seek recourse
against the trust account. However, based on Global Brands
available resources outside of the trust account, it is not
anticipated that Messrs. Horowitz, Stroll and Idol will
have any exposure under this arrangement.
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If Global Brands is required to be liquidated and there are no
funds remaining to pay the costs associated with the
implementation and completion of such liquidation, JLJ Partners
has agreed to advance Global Brands the funds necessary to pay
such costs and complete such liquidation (currently anticipated
to be no more than approximately $15,000) and not to seek
repayment for such expenses.
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Under the terms of the underwriting agreement executed in
connection with Global Brands IPO, Global Brands would be
required to pay the underwriters approximately
$14.4 million of deferred underwriting discounts and
commissions upon consummation of an initial business
combination (as defined therein). In connection with the
Framework Transactions, the underwriters in the IPO have agreed
to a reduction of the amount of deferred underwriting discounts
and commissions they will be entitled to receive if such
transactions are completed to an aggregate of no less than $3.25
million (assuming the $200 million condition is met) payable
upon consummation of the transactions contemplated by the
Framework Agreement. If the Framework Transactions are not
consummated and Global Brands is required to be liquidated, the
underwriters will not receive any of such funds and such funds
will be returned to Global Brands remaining public
stockholders upon its liquidation.
26
The
Boards Recommendation
After careful consideration of all relevant factors, Global
Brands board of directors and audit committee determined
that the Extension Amendment is fair to and in the best
interests of Global Brands and its stockholders. Accordingly,
Global Brands board of directors and audit committee
unanimously approved the Extension Amendment and Conversion
proposals.
The Board of Directors and audit committee recommend that you
vote FOR the Extension Amendment and Conversion
proposals. The Board of Directors and audit committee express no
opinion as to whether you should convert your public shares.
27
THE
ADJOURNMENT PROPOSAL
The adjournment proposal, if adopted, will allow Global
Brands board of directors to adjourn the special meeting
of stockholders to a later date or dates to permit further
solicitation of proxies in the event, based on the tabulated
votes, there are not sufficient votes at the time of the special
meeting to approve the Extension Amendment and Conversion
proposals. In no event will Global Brands adjourn the special
meeting beyond the date by which it may properly do so under its
Charter and Delaware law.
In addition to an adjournment of the special meeting upon
approval of an adjournment proposal, the board of directors of
Global Brands is empowered under Delaware law to postpone the
meeting at any time prior to the meeting being called to order.
In such event, Global Brands will issue a press release and take
such other steps as it believes are necessary and practical in
the circumstances to inform its stockholders of the postponement.
Consequences
if the Adjournment Proposal is Not Approved
If the adjournment proposal is not approved by the stockholders,
Global Brands board of directors may not be able to
adjourn the special meeting to a later date in the event, based
on the tabulated votes, there are not sufficient votes at the
time of the special meeting to approve the Extension Amendment
and Conversion proposals. In such event, Global Brands would be
required to liquidate.
Required
Vote
Adoption of the adjournment proposal requires the affirmative
vote of the holders of a majority of the issued and outstanding
shares of Global Brands common stock entitled to vote
thereon. Adoption of the adjournment proposal is not conditioned
upon the adoption of any of the other proposals.
GLOBAL BRANDS BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT GLOBAL BRANDS STOCKHOLDERS VOTE FOR THE
APPROVAL OF THE ADJOURNMENT PROPOSAL.
28
BENEFICIAL
OWNERSHIP OF SECURITIES
The following table sets forth certain information as of
November 18, 2009 with respect to the beneficial ownership
of Global Brands common stock by (i) those persons or
groups known to beneficially own more than 5% of Global
Brands common stock, (ii) each of Global Brands
current executive officers and directors and (iii) all of
Global Brands current directors and executive officers as
a group. The following table does not take into account any
cancellation of securities by the Global Brands Founders upon
consummation of the Framework Transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
Approximate
|
|
|
|
|
Percentage of
|
|
|
Amount of
|
|
Outstanding
|
Name and Address of
|
|
Beneficial
|
|
Common
|
Beneficial Owner(1)
|
|
Ownership
|
|
Stock
|
|
JLJ Partners, LLC(2)
|
|
|
7,062,500
|
(3)
|
|
|
19.7
|
%
|
QVT Financial LP
|
|
|
3,127,667
|
(4)
|
|
|
8.7
|
%
|
Millenco LLC
|
|
|
2,487,000
|
(5)
|
|
|
6.1
|
%
|
Aldebaran Investments LLC
|
|
|
2,185,618
|
(6)
|
|
|
6.1
|
%
|
Arrowgrass Capital Services (US) Inc.
|
|
|
1,938,704
|
(7)
|
|
|
5.4
|
%
|
Andrew M. Weiss, Ph.D.
|
|
|
1,838,800
|
(8)
|
|
|
5.1
|
%
|
Lawrence S. Stroll
|
|
|
0
|
(9)
|
|
|
*
|
|
Joel J. Horowitz
|
|
|
0
|
(9)
|
|
|
*
|
|
John D. Idol
|
|
|
0
|
(9)
|
|
|
*
|
|
Arthur Bargonetti
|
|
|
31,250
|
(10)
|
|
|
*
|
|
John R. Muse
|
|
|
281,250
|
(11)
|
|
|
*
|
|
M. William Benedetto
|
|
|
31,250
|
(10)
|
|
|
*
|
|
Stephen F. Reitman
|
|
|
31,250
|
(10)
|
|
|
*
|
|
All directors and executive officers as a group (seven
individuals)
|
|
|
7,437,500
|
(12)
|
|
|
20.7
|
%
|
|
|
|
*
|
|
Less than one percent.
|
|
(1)
|
|
Unless otherwise indicated, the business address of each of the
individuals or entities is 11 West 42nd Street, 21st Floor,
New York, New York 10036.
|
|
(2)
|
|
Lawrence S. Stroll, Joel J. Horowitz and John D. Idol share
voting and dispositive power over the shares held by JLJ
Partners.
|
|
(3)
|
|
Does not include (i) 7,062,500 shares of common stock
issuable upon exercise of Founders Warrants and
(ii) 5,000,000 shares of common stock issuable upon
exercise of sponsors warrants, all of which are not
exercisable and will not become exercisable within 60 days.
|
|
(4)
|
|
Represents (i) 2,665,600 shares of common stock
beneficially owned by QVT Fund LP (Fund),
(ii) 278,410 shares of common stock beneficially owned
by Quintessence Fund L.P. (Quintessence), and
(iii) 183,657 shares of common stock held in a
separate discretionary account for a third party (the
Separate Account). QVT Financial LP (QVT
Financial), as the investment manager for the Fund,
Quintessence and the Separate Account, may be deemed the
beneficial owner of all such shares. QVT Financial GP LLC
(GP), as the general partner of QVT Financial, may
be deemed the beneficial owner of all such shares. QVT
Associates GP LLC (Associates), as the general
partner of the Fund and Quintessence, may be deemed the
beneficial owner of the shares held by such entities. Each
entity has shared power to vote and dispose of the shares
beneficially owned by it. Each of QVT Financial and GP LLC
disclaims beneficial ownership of such shares owned by the Fund,
Quintessence and the Separate Account. Associates disclaims
beneficial ownership of such shares owned by the Fund and
Quintessence, except to the extent of its pecuniary interest
therein. This amount does not include warrants that are not
exercisable and will not become exercisable until we complete a
business combination. The business address for QVT Financial, GP
and Associates is 1177 Avenue of the Americas, 9th Floor, New
York, New York 10036. The business address for the Fund is
Walkers SPV, Walkers House, Mary Street, George Town, Grand
Cayman, KY1 9001 Cayman Islands. The foregoing information was
|
29
|
|
|
|
|
derived from a Schedule 13G filed with the Securities and
Exchange Commission on January 9, 2008, as amended on
February 7, 2008 and January 30, 2009.
|
|
(5)
|
|
Represents 2,487,000 shares of common stock beneficially
owned by Integrated Core Strategies (US) LLC (ICS).
Integrated Holding Group LP (IHG), as the managing
member of ICS, Millenium Management LLC (Millenium),
as the general partner of IHG, and Israel A. Englander, as the
managing member of Millenium, may each be deemed the beneficial
owner of such shares. Each of ICS, IHG, Millenium and
Mr. Englander has shared power to vote and dispose of the
shares. This amount does not include 4,937,954 shares of
common stock issuable upon the exercise of warrants held by ICS.
The business address for Millenium is 666 Fifth Avenue, New
York, New York 10103 and the business address for
Mr. Englander and ICS is
c/o Millenium
Management LLC at the same address. The foregoing information
was derived from a Schedule 13G filed with the Securities
and Exchange Commission on December 26, 2007, as amended on
November 3, 2008.
|
|
(6)
|
|
Represents shares of common stock held in a separate account for
which Aldebaran Investments LLC (Aldebaran) is the
investment manager. Aldebaran has sole power to vote and dispose
of the shares. The business address of Aldebaran is 11 West
42nd Street, 21st Floor, New York, New York 10036. The foregoing
information was derived from a Schedule 13G filed with the
Securities Exchange Commission on February 17, 2009.
|
|
(7)
|
|
Represents shares of commons stock directly held by Arrowgrass
Capital Partners (US) LP. The reporting persons have shared
power to vote and dispose of the shares. The business address of
each of the reporting persons is 245 Park Avenue, New York, New
York 10167.
|
|
(8)
|
|
Represents (i) 1,169,036 shares of common stock
beneficially owned by Weiss Asset Management, LLC and
(ii) 669,764 shares of common stock beneficially owned
by Weiss Capital, LLC. Mr. Weiss is managing member of both
Weiss Asset Management, LLC and Weiss Capital, LLC. The business
address for each entity and for Mr. Weiss is 29
Commonwealth Avenue, 10th Floor, Boston, Massachusetts 02116.
The foregoing information was derived from a Schedule 13G
filed with the Securities and Exchange Commission on
April 25, 2008.
|
|
(9)
|
|
Does not include the shares held by JLJ Partners, of which each
individual is approximately a 1/3 beneficial owner, either
directly or through entities of which they or their family
members are owners and beneficiaries.
|
|
(10)
|
|
Does not include 31,250 shares of common stock issuable
upon exercise of Founders Warrants which are not
exercisable and will not become exercisable within 60 days.
|
|
(11)
|
|
Represents (i) 91,250 shares of common stock held by
Mr. Muse, (ii) 150,000 shares of common stock
held by Muse Family Enterprises, Ltd., a family partnership
benefiting Mr. Muses children,
(iii) 30,000 shares of common stock held by Muse
Childrens GS Trust, a trust established for the benefit of
Mr. Muses children, and (iv) 10,000 shares
of common stock held by The Muse Educational Foundation of which
Mr. Muse is President. Does not include
(i) 91,250 shares of common stock issuable upon
exercise of Founders Warrants and public warrants held by
Mr. Muse, (ii) 150,000 shares of common stock
issuable upon exercise of public warrants held by Muse Family
Enterprises, Ltd., (iii) 30,000 shares of common stock
issuable upon exercise of public warrants held by Muse
Childrens GS Trust and (iv) 10,000 shares of
common stock issuable upon exercise of public warrants held by
The Muse Educational Foundation, none of which are exercisable
or will become exercisable within 60 days.
|
|
(12)
|
|
Does not include (i) 7,437,500 shares of common stock
issuable upon exercise of Founders Warrants,
(ii) 250,000 shares of common stock issuable upon the
exercise of public warrants and (iii) 5,000,000 shares
of common stock issuable upon exercise of sponsors
warrants, all of which are not exercisable and will not become
exercisable within 60 days.
|
All of the Founders Units, Founders Shares and
Founders Warrants owned by the Global Brands Founders have
been placed in escrow with Continental Stock
Transfer & Trust Company, as escrow agent,
pursuant to an escrow agreement.
30
STOCKHOLDER
PROPOSALS
Global Brands 2010 annual meeting of stockholders will be
held on or about August 11, 2010 if the Extension Amendment
and Conversion proposals are approved and the Framework
Transaction are completed. In order for any stockholder proposal
or nominations to be presented at the annual meeting of
stockholders to be held in 2010 or to be eligible for inclusion
in Global Brands proxy statement for such meeting, they
must be received by us at Global Brands principal
executive offices between May 13, 2010 and June 12,
2010. Each proposal should include the exact language of the
proposal, a brief description of the matter and the reasons for
the proposal, the name and address of the stockholder making the
proposal and the disclosure of that stockholders number of
shares of common stock owned, length of ownership of the shares,
representation that the stockholder will continue to own the
shares through the stockholder meeting, intention to appear in
person or by proxy at the stockholder meeting and material
interest, if any, in the matter being proposed.
Stockholder nominations for persons to be elected as directors
should include the name and address of the stockholder making
the nomination, a representation that the stockholder owns
shares of common stock entitled to vote at the stockholder
meeting, a description of all arrangements between the
stockholder and each nominee and any other persons relating to
the nomination, the information about the nominees required by
the Exchange Act of 1934 and a consent to nomination of the
person so nominated.
Stockholder proposals and nominations should be addressed to
Global Brands Acquisition Corp., Attention: Corporate Secretary,
11 West 42nd Street, 21st Floor, New York, New
York 10036.
DELIVERY
OF DOCUMENTS TO STOCKHOLDERS
Pursuant to the rules of the SEC, Global Brands and its agents
that deliver communications to its stockholders are permitted to
deliver to two or more stockholders sharing the same address a
single copy of Global Brands proxy statement. Upon written
or oral request, Global Brands will deliver a separate copy of
the proxy statement to any stockholder at a shared address who
wishes to receive separate copies of such documents in the
future. Stockholders receiving multiple copies of such documents
may likewise request that Global Brands deliver single copies of
such documents in the future. Stockholders may notify Global
Brands of their requests by calling or writing Global Brands at
Global Brands principal executive offices at 11 West
42nd Street, 21st Floor, New York, New York 10036,
(212) 201-8118.
WHERE YOU
CAN FIND MORE INFORMATION
Global Brands files reports, proxy statements and other
information with the SEC as required by the Securities Exchange
Act of 1934, as amended. You may read and copy reports, proxy
statements and other information filed by Global Brands with the
SEC at its public reference room located at
100 F Street, N.E., Washington, D.C.
20549-1004.
You may obtain information on the operation of the Public
Reference Room by calling the SEC at
1-800-SEC-0330.
You may also obtain copies of the materials described above at
prescribed rates by writing to the SEC, Public Reference
Section, 100 F Street, N.E., Washington, D.C.
20549-1004.
Global Brands files its reports, proxy statements and other
information electronically with the SEC. You may access
information on Global Brands at the SEC website containing
reports, proxy statements and other information at
http://www.sec.gov.
This proxy statement describes the material elements of relevant
contracts, exhibits and other information attached as annexes to
this proxy statement. Information and statements contained in
this proxy statement are qualified in all respects by reference
to the copy of the relevant contract or other document included
as an annex to this document.
This proxy statement contains important business and financial
information about us that is not included in or delivered with
this document. You may obtain this additional information, or
additional copies of this
31
proxy statement, at no cost, and you may ask any questions you
may have about the Extension Amendment or the Conversion
proposal by contacting us at the following address, telephone
number or email address:
Global Brands Acquisition Corp.
11 West 42nd Street, 21st Floor
New York, New York 10036
In order to receive timely delivery of the documents in advance
of the special meeting, you must make your request for
information no later than November , 2009.
32
ANNEX A
CERTIFICATE OF AMENDMENT TO THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
GLOBAL BRANDS ACQUISITION CORP.
Pursuant to Section 242 of the
General Corporation Law of the State of Delaware
GLOBAL BRANDS ACQUISITION CORP.
(the
Corporation), a corporation duly organized and
existing under the laws of the State of Delaware, does hereby
certify as follows:
1. The Certificate of Incorporation of the Corporation is
hereby amended by deleting Article SIXTH thereof and
inserting the following in lieu thereof:
SIXTH: The Corporations existence shall terminate on
February 28, 2010 (the Termination Date). This
provision may only be amended in connection with, and become
effective upon, the consummation of a Business Combination
(defined below). A proposal to so amend this section shall be
submitted to stockholders in connection with any proposed
Business Combination pursuant to Article Seventh
(A) below.
2. The Certificate of Incorporation of the Corporation is
hereby amended by deleting paragraph E of
Article SEVENTH thereof and inserting the following in lieu
thereof:
E. A holder of IPO Shares shall be entitled to receive
distributions from the Trust Account (i) upon the
effectiveness of the Extension Amendment (as defined in the
Corporations Definitive Proxy Statement for its Special
Meeting of Stockholders held on December 4, 2009) if
the holder demands conversion of its shares in connection with
the extension of the date on which the Corporations
corporate existence terminates from December 6, 2009 to
February 28, 2010 pursuant to the Extension Amendment,
(ii) in the event that the Corporation does not consummate
a Business Combination by the Termination Date or (iii) in
the event such holder demands conversion of its shares in
accordance with paragraph C above. Except as may be
required under applicable law, in no other circumstances shall
any holder of shares of Common Stock have any right or interest
of any kind in or to the Trust Account or any amount or
other property held therein.
3. The foregoing amendments were duly adopted in accordance
with the provisions of Sections 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Global Brands Acquisition Corp. has caused
this Certificate of Amendment to the Amended and Restated
Certificate of Incorporation to be executed by its duly
authorized officer on this 4th day of December 2009.
Joel J. Horowitz, CEO
A-1
ANNEX B
(RICHARDS, LAYTON LETTERHEAD)
November 9,
2009
Global Brands Acquisition Corp.
1 West 42nd Street, 21st Floor
New York, NY 10036
Ladies and
Gentlemen:
We have acted as special Delaware counsel to Global Brands
Acquisition Corp., a Delaware corporation (the
Company), in connection with the matters set forth
herein. In this connection, you have requested our opinion as to
certain matters under the General Corporation Law of the State
of Delaware (the General Corporation Law).
For the purpose of rendering our opinion as expressed herein, we
have been furnished and have reviewed the following documents:
the Amended and Restated Certificate of Incorporation of the
Company, as filed with the Secretary of State of the State of
Delaware (the Secretary of State) on
December 6, 2007, as corrected by the Certificate of
Correction to the Amended and Restated Certificate of
Incorporation of the Company, as filed with the Secretary of
State on December 6, 2007 (collectively, the
Certificate of Incorporation);
the Bylaws of the Company, as amended on January 28, 2009
(the Bylaws);
a form of the Certificate of Amendment to the Amended and
Restated Certificate of Incorporation of the Company (the
Certificate of Amendment), a copy of which is
attached hereto as Exhibit A;
the Registration Statement of the Company (the
Registration Statement), as filed with the
Securities and Exchange Commission (the SEC) on
November 20, 2007 in connection with the Companys
initial public offering (the IPO); and
the proxy statement proposed to be filed with the SEC in
connection with, among other things, proposed amendments to the
Certificate of Incorporation (the Proxy Statement).
With respect to the foregoing documents, we have assumed:
(a) the genuineness of all signatures, and the incumbency,
authority, legal right and power and legal capacity under all
applicable laws and regulations, of each of the officers and
other persons and entities signing or whose signatures appear
upon each of said documents as or on behalf of the parties
thereto; (b) the conformity to authentic originals of all
documents submitted to us as certified, conformed, photostatic,
electronic or other copies; and (c) that the foregoing
documents, in the forms submitted to us for our review, have not
been and will not be altered or amended in any respect material
to our opinion as expressed herein. For the purpose of rendering
our opinion as expressed herein, we have not reviewed any
document other than the documents set forth above, and, except
as set forth in this opinion, we assume there exists no
provision of any such other document that bears upon or is
inconsistent with our opinion as expressed herein. We have
conducted no independent factual investigation of our own, but
rather have relied as to factual matters solely upon the
foregoing documents, the statements and information set forth
therein, and the additional matters recited or assumed herein,
all of which we assume to be true, complete and accurate in all
material respects.
B-1
BACKGROUND
We have been advised, and accordingly assume for purposes of our
opinion as expressed herein, that: (i) the Company and
Gerrity International, LLC (the Gerrity Group) have
entered into the Framework Agreement (the Framework
Agreement), dated as of November 9, 2009, which
provides for the Company to continue its business as a
corporation that will elect to be qualified as a real estate
investment trust (a REIT) within the meaning of
Section 856 of the Internal Revenue Code of 1986, as
amended, commencing with the taxable year ending March 31,
2010 (the Framework Transaction); (ii) the
Company considered and analyzed numerous companies and
acquisition opportunities in its search for an attractive
business combination, none of which were believed to be as
attractive to the public stockholders as continuing the
Companys business in accordance with the Framework
Transaction; and (iii) the Company will not be able to
complete the Framework Transaction before December 6, 2009
and pursuant to Articles Sixth and Seventh of the
Certificate of Incorporation, a failure to consummate a Business
Combination (as defined in Article Seventh of the
Certificate of Incorporation set forth below) prior to
December 6, 2009 (the Termination Date) will
result in the dissolution and liquidation of the Company.
Accordingly, in order to consummate the Framework Transaction,
the Company is proposing to (i) amend Article Sixth of
the Certificate of Incorporation as set forth in the Certificate
of Amendment to extend the date before which the Company must
complete a Business Combination (i.e., the Termination Date)
from December 6, 2009 to February 28, 2010 (the
Extension Amendment), and (ii) amend
Article Seventh of the Certificate of Incorporation as set
forth in the Certificate of Amendment to allow holders of shares
of Company common stock issued in the Companys initial
public offering (the IPO, and such shares, IPO
Shares) to elect to convert their IPO Shares into a pro
rata portion of the Trust Account (as defined in the
Article Seventh of the Certificate of Incorporation set
forth below) if the Extension Amendment is duly approved and
becomes effective (the Conversion Amendment). The
Conversion Amendment would amend paragraph E of
Article Seventh of the Certificate of Incorporation to read
in its entirety as follows:
A holder of IPO Shares shall be entitled to receive
distributions from the Trust Account (i) upon the
effectiveness of the Extension Amendment (as defined in the
Corporations Definitive Proxy Statement for its Special
Meeting of Stockholders held on December 4, 2009) if
the holder demands conversion of its shares in connection with
the extension of the date on which the Corporations
corporate existence terminates from December 6, 2009 to
February 28, 2010 pursuant to the Extension Amendment,
(ii) in the event that the Corporation does not consummate
a Business Combination by the Termination Date or (iii) in
the event such holder demands conversion of its shares in
accordance with paragraph C above. Except as may be
required under applicable law, in no other circumstances shall
any holder of shares of Common Stock have any right or interest
of any kind in or to the Trust Account or any amount or
other property held therein.
We have been further advised, and accordingly assume for
purposes of our opinion as expressed herein, that:
(i) approval of the Extension Amendment is a condition to
the implementation of the Conversion Amendment and approval of
the Conversion Amendment is a condition to the implementation of
the Extension Amendment; (ii) only holders of IPO Shares
that vote for the Conversion Amendment will be permitted (but
are not required) to convert their IPO Shares into a pro rata
portion of the Trust Account if the Extension Amendment is
duly approved and becomes effective; and (iii) the
stockholders vote on any proposal will not adversely
affect the stockholders conversion rights as originally
described in the Registration Statement.
Article Sixth of the Certificate of Incorporation provides:
The Corporations existence shall terminate on
December 6, 2009 (the Termination Date), except
for the purposes of winding up the Corporations affairs
and of liquidating the Corporation pursuant to Section 278 of
the GCL.
This provision may only be amended in connection
with, and become effective upon, the consummation of a Business
Combination
(defined below). A proposal to so amend this
section to provide that the Corporations existence shall
be perpetual shall be submitted to stockholders in connection
with any proposed Business Combination pursuant to
paragraph A of Article Seventh below.
B-2
Thus, the underlined language in Article Sixth of the
Certificate of Incorporation purports to eliminate the
Companys (and, consequently, the Companys
directors and stockholders) power to amend
Article Sixth prior to the consummation of a Business
Combination.
Article Seventh of the Certificate of Incorporation
provides in pertinent part:
The introduction and paragraphs A through J of this
Article Seventh
shall apply during the period
commencing upon the filing of this Certificate of Incorporation
and terminating upon the consummation of any Business
Combination, and
may not be amended prior to the
consummation of any Business Combination.
A Business Combination shall mean the acquisition by
the Corporation, whether by merger, capital stock exchange,
asset, stock purchase, reorganization or other similar business
combination, of one or more operating businesses or assets
(Target Business or Target Businesses)
having, individually or collectively, a fair market value equal
to at least 80% of the balance in the Trust Account
(excluding deferred underwriting discounts and commissions) at
the time of such acquisition and resulting in ownership by the
Corporation of not less than 50% of the voting securities of the
Target Business or Businesses and control by the Corporation of
the majority of any governing body of the Target Business or
Businesses. ...
* * *
IPO Shares shall mean the shares of Common Stock
issued in the IPO.
The Trust Account shall mean the trust account
established by the Corporation in connection with the
consummation of the IPO and into which the Corporation will
deposit a designated portion of the net proceeds from the IPO ...
* * *
E. A holder of IPO Shares shall be entitled to receive
distributions from the Trust Account only in the event that
the Corporation does not consummate a Business Combination by
the Termination Date or in the event such holder demands
conversion of its shares in accordance with paragraph C
above. Except as may be required under applicable law, in no
other circumstances shall any holder of shares of Common Stock
have any right or interest of any kind in or to the
Trust Account or any amount or other property held therein.
Thus, the underlined language in the first sentence of
Article Seventh of the Certificate of Incorporation
purports to eliminate the Companys (and consequently the
Companys directors and stockholders) power to
amend the introduction and paragraphs A through J of
Article Seventh prior to the consummation of any Business
Combination.
B-3
DISCUSSION
You have asked our opinion as to whether Articles Sixth and
Seventh of the Certificate of Incorporation may be amended as
provided in the Certificate of Amendment attached hereto as
Exhibit A. For the reasons set forth below, in our opinion,
the provision in the second sentence of Article Sixth of
the Certificate of Incorporation and the provision in the first
sentence of Article Seventh of the Certificate of
Incorporation, which purport to eliminate the Companys
statutory power to amend Article Sixth and
Article Seventh, respectively, prior to the consummation of
a Business Combination are not valid certificate of
incorporation provisions under the General Corporation Law.
Because the provisions in Articles Sixth and Seventh
purporting to prohibit amendments thereto prior to the
consummation of a Business Combination are invalid,
Articles Sixth and Seventh may be amended as provided in
the Certificate of Amendment, subject to compliance with the
amendatory procedures set forth in Section 242(b) of the
General Corporation Law.
Section 242(a) of the General Corporation Law provides:
After a corporation has received payment for any of its capital
stock, it may amend its certificate of incorporation, from time
to time, in any and as many respects as may be desired, so long
as its certificate of incorporation as amended would contain
only such provisions as it would be lawful and proper to insert
in an original certificate of incorporation filed at the time of
the filing of the amendment ...
8
Del. C.
§ 242(a). In addition,
Section 242(b) of the General Corporation Law provides:
Every amendment [to the Certificate of Incorporation] ...
shall
be made and effected in the following manner: (1)
[i]f the corporation has capital stock, its board of directors
shall
adopt a resolution setting forth the amendment
proposed, declaring its advisability, and either calling a
special meeting of the stockholders entitled to vote in respect
thereof for the consideration of such amendment or directing
that the amendment proposed be considered at the next annual
meeting of the stockholders... If a majority of the outstanding
stock entitled to vote thereon, and a majority of the
outstanding stock of each class entitled to vote thereon as a
class has been voted in favor of the amendment, a certificate
setting forth the amendment and certifying that such amendment
has been duly adopted in accordance with this section
shall
be executed, acknowledged and filed and
shall
become effective in accordance with § 103
of this title.
8
Del. C.
§ 242(b) (emphasis added). Thus,
Section 242(a) grants Delaware corporations broad statutory
power to amend their certificates of incorporation to the extent
permitted under Delaware law, including to the extent
contemplated by the amendments to Articles Sixth and
Seventh of the Certificate of Incorporation as set forth in the
Certificate of Amendment, subject to compliance with the
amendatory procedures set forth in Section 242(b). Implicit
in the language of Section 242 is that the power to amend
the certificate of incorporation is a fundamental power of
Delaware corporations vested in directors and stockholders of a
corporation. Nothing in Section 242 suggests that this
statutory power may be entirely eliminated by a provision of the
certificate of incorporation with respect to certain provisions
thereof. Indeed, the mandatory language in Section 242(b)
supports the proposition that the corporations broad power
to amend the certificate of incorporation cannot be eliminated.
Section 242(b) mandates that, absent a provision permitting
the board to abandon a proposed amendment, a certificate
setting forth the amendment ...
shall
be executed,
acknowledged and filed and
shall
become effective
upon obtaining the requisite board and stockholder approvals. 8
Del. C.
§ 242(b)(1) (emphasis added).
In our opinion, the second sentence of Article Sixth of the
Certificate of Incorporation that purports to eliminate the
statutory power of the Company (and, consequently, of the
directors and stockholders) to amend Article Sixth prior to
the consummation of a Business Combination, and the provision in
the first sentence of Article Seventh of the Certificate of
Incorporation that purports to eliminate the statutory power of
the Company (and, consequently, of the directors and
stockholders) to amend Article Seventh prior to the
consummation of a Business Combination, are contrary to the laws
of the State of Delaware and, therefore,
B-4
are invalid pursuant to Section 102(b)(1) of the General
Corporation Law. Section 102(b)(1) provides that a
certificate of incorporation may contain:
Any provision for the management of the business and for the
conduct of the affairs of the corporation, and any provision
creating, defining, limiting and regulating the powers of the
corporation, the directors, and the stockholders, or any class
of the stockholders . . . ;
if such provisions are not
contrary to the laws of [the State of Delaware].
8
Del. C.
§ 102(b)(1) (emphasis added).
Thus, the ability to curtail the powers of the corporation, the
directors and the stockholders through the certificate of
incorporation is not without limitation. Any provision in the
certificate of incorporation that is contrary to Delaware law is
invalid.
See
Lions Gate Entmt Corp. v.
Image Entmt Inc.
, 2006 WL 1668051, at *7 (Del. Ch.
June 5, 2006) (footnote omitted) (noting that a charter
provision purport[ing] to give the Image board the power
to amend the charter unilaterally without a shareholder
vote after the corporation had received payment for its
stock contravenes Delaware law [
i.e.
,
Section 242 of the General Corporation Law] and is
invalid.). In
Sterling v. Mayflower Hotel
Corp.
, 93 A.2d 107, 118 (Del. 1952), the Court found that a
charter provision is contrary to the laws of
[Delaware] if it transgresses a statutory enactment
or a public policy settled by the common law or implicit in the
General Corporation Law itself. The Court in
Loews Theatres, Inc. v. Commercial Credit Co.
,
243 A.2d 78, 81 (Del. Ch. 1968), adopted this view, noting that
a charter provision which seeks to waive a statutory right
or requirement is
unenforceable.
1
That the statutory power to amend the certificate of
incorporation is a fundamental power of Delaware corporations is
supported by Delaware case law. Delaware courts have repeatedly
held that a reservation of the right to amend the certificate of
incorporation is a part of any certificate of incorporation,
whether or not such reservation is expressly included
therein.
2
See
,
e.g.
,
Maddock v. Vorclone Corp.
,
147 A. 255 (Del. Ch. 1929);
Coyne v. Park &
Tilford Distillers Corp.
, 154 A.2d 893 (Del. 1959);
Weinberg v. Baltimore Brick Co.
, 114 A.2d 812, 814
(Del. 1955);
Morris v. American Public Utilities
Co.
, 122 A. 696, 701 (Del. Ch. 1923).
See also
2
David A. Drexler, Lewis S. Black, Jr. & A. Gilchrist
Sparks, III,
Delaware Corporation Law &
Practice
, § 32.02 (2005) (No case has ever
questioned the fundamental right of corporations to amend their
certificates of incorporation in accordance with statutory
procedures. From the earliest decisions, it has been held that
every corporate charter implicitly contains as a constituent
part thereof every pertinent provision of the corporation law,
including the provisions authorizing charter amendments.);
1 R. Franklin Balotti & Jesse A. Finkelstein,
The
Delaware Law of Corporations & Business
Organizations
§ 8.1 (2007 Supp.) (The power
of a corporation to amend its certificate of incorporation was
granted by the original General Corporation Law and has
continued to this day.) (footnotes omitted); 1 Edward P.
Welch, Andrew J. Turezyn & Robert S. Saunders,
Folk
on the Delaware General Corporation Law
§ 242.2.2,
GCL-VIII-13
(2007-1
Supp.) (A corporation may ... do anything that
section 242 authorizes because the grant of amendment power
contained in section 242 and its predecessors is itself a
part of the charter.) (citing
Goldman v. Postal
Tel., Inc.
, 52
1
We
note that Section 102(b)(4) of the General Corporation Law
expressly permits a Delaware corporation to include in its
certificate of incorporation provisions that modify the voting
rights of directors and stockholders set forth in other
provisions of the General Corporation Law.
8 Del.
C.
§ 102(b)(4) (the certificate of
incorporation may also contain ... [p]rovisions requiring for
any corporate action, the vote of a larger portion of the stock
... or a larger number of the directors, than is required by
this chapter.). While Section 102(b)(4) permits
certificate of incorporation provisions to require a greater
vote of directors or stockholders than is otherwise required by
the General Corporation Law, in our view, nothing in
Section 102(b)(4) purports to authorize a certificate of
incorporation provision that entirely eliminates the power of
directors and stockholders to amend the certificate of
incorporation, with respect to certain provisions thereof, as
expressly permitted by Section 242.
See also
Sellers v. Joseph Bancroft & Sons Co.
, 2
A.2d 108, 114 (Del. Ch. 1938) (where the court questioned the
validity of a certificate of incorporation provision requiring
the vote or consent of 100% of the preferred stockholders to
amend the certificate of incorporation in any manner that
reduced the pecuniary rights of the preferred stock because the
100% vote requirement made such provision practically
irrepealable.).
2
This
principle is also codified in Section 394 of the General
Corporation Law.
See
8
Del.
C.
§ 394.
Id.
B-5
F.Supp. 763, 769 (D. Del. 1943);
Davis v. Louisville
Gas & Electric Co.
, 142 A. 654,
656-58
(Del.
Ch. 1928);
Morris
, 122 A. at 701;
Peters v.
United States Mortgage Co.,
114 A. 598, 600 (Del. Ch.
1921));
Peters
, 114 A. at 600 (There is impliedly
written into every corporate charter in this state, as a
constituent part thereof, every pertinent provision of our
Constitution and statutes. The corporation in this case was
created under the General Corporation Law ... That law clearly
reserves to this corporation the right to amend its certificate
in the manner proposed.).
In
Davis v. Louisville Gas & Electric Co.
, 142
A. 654 (Del. Ch. 1928), the Court of Chancery interpreted this
reserved right to amend the certificate of incorporation broadly
and observed that the legislature, by granting broad powers to
the stockholders to amend the certificate of incorporation,
recognized the unwisdom of casting in an unchanging mould
the corporate powers which it conferred touching these questions
so as to leave them fixed for all time.
Id.
at 657.
Indeed, the Court queried, [m]ay it not be assumed that
the Legislature foresaw that the interests of the corporations
created by it might, as experience supplied the material for
judgment, be best subserved by an alteration of their
intracorporate and in a sense private powers,
i.e.
,
by an alteration of the terms of the certificate of
incorporation?
Id.
The Court further confirmed the
important public policy underlying the reservation of the right
to amend the certificate of incorporation:
The very fact that the [General Corporation Law]...deal[s] in
great detail with innumerable aspects of the [certificate of
incorporation] in what upon a glance would be regarded as
relating to its private as distinguished from its public
character, has some force to suggest that the state, by dealing
with such subjects in the statute rather than by leaving them to
be arranged by the corporate membership, has impliedly impressed
upon such matters the quality of public interest and concern.
While there is no definitive case law addressing the
enforceability or validity, under Delaware law or otherwise, of
a certificate of incorporation provision that attempts to
prohibit amendments to certain provisions thereof, in our view,
such a provision would be invalid. Indeed, in confirming the
fundamental importance of a corporations power to amend
the certificate of incorporation, Delaware courts have
suggested, in dicta, that such provision might be unenforceable.
See
,
e.g.
,
Jones Apparel Group, Inc. v.
Maxwell Shoe Co.
, 883 A.2d 837 (Del. Ch. 2004) (indicating
that the statutory power to recommend to stockholders amendments
to the certificate of incorporation is a core duty of directors
and noting that a certificate of incorporation provision
purporting to eliminate a core duty of the directors would
likely contravene Delaware public policy.);
Triplex Shoe
Co. v. Rice & Hutchins, Inc.
, 152 A. 342,
347, 351 (Del. 1930) (finding that despite the absence of common
stockholders who held the sole power to vote on
amendments to the certificate of incorporation, an amendment to
the certificate of incorporation nonetheless had been validly
approved by the preferred stockholders given that the holders of
preferred stock, by the very necessities of the
case, had the power to vote where no common stock had been
validly issued because the corporation would otherwise be
unable to function.);
Sellers v. Joseph
Bancroft & Sons Co.
, 2 A.2d 108, 114 (Del. Ch.
1938) (questioning the validity of a certificate of
incorporation provision requiring the vote or consent of 100% of
the preferred stockholders to amend the certificate of
incorporation in any manner that reduced the pecuniary rights of
the preferred stock because the 100% vote requirement made such
provision practically irrepealable.).
More recently, the Court in
Jones Apparel
suggested that
the right of directors to recommend to stockholders amendments
to the certificate of incorporation is a core right
of fundamental importance under the General Corporation Law. In
Jones Apparel
, the Delaware Court of Chancery examined
whether a certificate of incorporation provision eliminating the
power of a board of directors to fix record dates was permitted
under Section 102(b)(1) of the General Corporation Law.
While the Court upheld the validity of the record date
provision, it was quick to point out that not all provisions in
a certificate of incorporation purporting to eliminate director
rights would be enforceable.
Jones Apparel
, 883 A.2d at
848. Rather, the Court suggested that certain statutory rights
involving core director duties may not be modified
or eliminated through the certificate of incorporation. The
Jones Apparel
Court observed:
[Sections] 242(b)(1) and 251 do not contain the magic words
[unless otherwise provided in the certificate of
incorporation] and they deal respectively with the
fundamental subjects of certificate amendments and mergers. Can
a certificate provision divest a board of its statutory power to
approve a merger? Or to approve a certificate amendment? Without
answering those questions, I think it fair to say
B-6
that those questions inarguably involve far more serious
intrusions on core director duties than does [the record date
provision at issue]. I also think that the use by our judiciary
of a more context- and statute-specific approach to police
horribles is preferable to a sweeping rule that
denudes § 102(b)(1) of its utility and thereby greatly
restricts the room for private ordering under the DGCL.
Id.
at 852. While the Court in
Jones Apparel
recognized that certain provisions for the regulation of the
internal affairs of the corporation may be made subject to
modification or elimination through the private ordering system
of the certificate of incorporation and bylaws, it suggested
that other powers vested in directors such as the
power to amend the certificate of incorporation are
so fundamental to the proper functioning of the corporation that
they cannot be so modified or eliminated.
Id.
As set forth above, the statutory language of Section 242
and Delaware case law confirm that the statutory power to amend
the certificate of incorporation is a fundamental power of
Delaware corporations as a matter of Delaware public policy.
Moreover, Delaware case law also suggests that the fundamental
power to amend the certificate of incorporation is a core right
of the directors of a Delaware corporation. Because the
provision in the second sentence of Article Sixth of the
Certificate of Incorporation purports to eliminate the
fundamental power of the Company (and the core right
of the Companys directors) to amend Article Sixth
prior to a Business Combination, and because the provision in
the first sentence of Article Seventh of the Certificate of
Incorporation purports to eliminate the fundamental power of the
Company (and the core right of the Companys
directors) to amend Article Seventh prior to the
consummation of a Business Combination, such provisions are
contrary to the laws of the State of Delaware and, therefore,
are invalid.
Given our conclusion that Articles Sixth and Seventh of the
Certificate of Incorporation may be amended as provided in the
Certificate of Amendment, subject to compliance with the
amendatory procedures set forth in Section 242(b) of the
General Corporation Law, you have asked our opinion as to the
vote required for approval of the amendments to
Articles Sixth and Seventh of the Certificate of
Incorporation as provided in the Certificate of Amendment.
Section 242(b) of the General Corporation Law provides the
default voting requirements for an amendment to the certificate
of incorporation. Under Section 242(b)(1), the board of
directors of the Company (the Board) would be
required to adopt a resolution setting forth the amendments
proposed and declaring their advisability prior to submitting
such amendments to the stockholders entitled to vote on
amendments to the Certificate of Incorporation. The Board may
adopt such resolution by the affirmative vote of a majority of
the directors present at a meeting at which a quorum is present,
or, alternatively, by unanimous written consent of all
directors.
See
8
Del. C.
§§ 141(b),
141(f). After such amendments have been duly approved by the
Board, they must then be submitted to the stockholders of the
Company for a vote thereon. The affirmative vote (or written
consent) of a majority of the outstanding stock entitled to vote
thereon would be required for approval of such amendments.
See
8
Del. C.
§§ 242(b)(1), 228(a).
The default voting requirements set forth above may be increased
to require a greater vote of the directors or stockholders by a
provision in the certificate of incorporation or the bylaws (in
the case of the Board).
See
8
Del. C.
§§ 102(b)(4), 141(b), 216,
242(b)(4).
3
Because there is no valid provision in the Certificate of
Incorporation or Bylaws purporting to impose a different or
greater vote of the directors or stockholders for the approval
of an amendment to the Certificate of Incorporation, in our
view, the statutory default voting requirements would apply to
the approval of the amendments to Articles Sixth and
Seventh of the Certificate of Incorporation by the directors and
stockholders of the Company.
3
See
supra
note 1 and accompanying text.
B-7
CONCLUSION
Based upon and subject to the foregoing, and subject to the
limitations stated herein, it is our opinion that the amendments
to Articles Sixth and Seventh of the Certificate of
Incorporation set forth in the Certificate of Amendment, if duly
adopted by the Board of Directors of the Company (by vote of the
majority of the directors present at a meeting at which a quorum
is present or, alternatively, by unanimous written consent) and
duly approved by the holders of a majority of the outstanding
stock of the Company entitled to vote thereon, all in accordance
with Section 242(b) of the General Corporation Law, would
be valid and effective when filed with the Secretary of State in
accordance with Sections 103 and 242 of the General
Corporation Law.
The foregoing opinion is limited to the General Corporation Law.
We have not considered and express no opinion on any other laws
or the laws of any other state or jurisdiction, including
federal laws regulating securities or any other federal laws, or
the rules and regulations of stock exchanges or of any other
regulatory body.
The foregoing opinion is rendered for your benefit in connection
with the matters addressed herein. We understand that you may
furnish a copy of this opinion letter to the SEC in connection
with the matters addressed herein. We further understand that
you may include this opinion letter as an annex to your Proxy
Statement for the special meeting of stockholders of the Company
to consider and vote upon, among other things, the Certificate
of Amendment and we consent to your doing so.
Very truly yours,
Richards, Layton & Finger, P.A.
CSB/TNP
B-8
PROXY
Global Brands Acquisition Corp.
11 West 42nd Street, 21st Floor
New York, New York 10036
SPECIAL MEETING OF STOCKHOLDERS
December 4, 2009
YOUR VOTE IS IMPORTANT
FOLD AND DETACH HERE
GLOBAL BRANDS ACQUISITION CORP.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON
December 4, 2009
The undersigned, revoking any previous proxies relating to these shares, hereby acknowledges
receipt of the Notice and Proxy Statement, dated November
, 2009, in connection with the Special
Meeting to be held at 11:00 a.m. EST on December 4, 2009 at the offices of Graubard Miller, 405
Lexington Avenue, New York, NY 10174, and hereby appoints Joel J. Horowitz, John D. Idol, Lawrence
Stroll, and each of them (with full power to act alone), the attorneys and proxies of the
undersigned, with power of substitution to each, to vote all shares of the common stock, of Global
Brands Acquisition Corp. (the Corporation) registered in the name provided, which the undersigned
is entitled to vote at the Special Meeting of Stockholders, and at any adjournments thereof, with
all the powers the undersigned would have if personally present. Without limiting the general
authorization hereby given, said proxies are, and each of them is, instructed to vote or act as
follows on the proposals set forth in this Proxy Statement.
THIS PROXY, WHEN EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSALS CONSTITUTING THE EXTENSION AMENDMENT AND
DISTRIBUTION PROPOSAL CONSISTING OF PROPOSALS 1, 2 AND 3.
IF YOUR SHARES ARE HELD IN AN ACCOUNT AT A BROKERAGE FIRM OR BANK, YOU MUST INSTRUCT YOUR
BROKER OR BANK ON HOW TO VOTE YOUR SHARES. IF YOU DO NOT PROVIDE SUCH INSTRUCTIONS, YOUR SHARES
WILL NOT BE VOTED ON ANY OF THE PROPOSALS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting of
Stockholders to be held on December 4, 2009. This Proxy Statement to Stockholders is available at: http://www.cstproxy.com/globalbrandsacquisition/sm2009.
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FOR
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AGAINST
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ABSTAIN
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Proposal 1 Extension of Corporate Life
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Amend the Corporations Amended and
Restated Certificate of Incorporation to
permit the continuance of the existence
of the Corporation until February 28,
2010 by amending Article Sixth of the
Amended and Restated Certificate of
Incorporation.
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Proposal 2 Approve the Conversion
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o
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Amend the Corporations Amended and
Restated Certificate of Incorporation to
allow the holders of shares of common
stock issued in the Corporations
initial public offering to elect to
convert such shares sold in the initial
public offering into their pro rata
portion of the funds held in the trust
account established at the time of the
Corporations initial public offering,
which if approved will also be deemed to
be approval of an amendment to the trust
account agreement governing the trust
account to allow for such conversions.
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If you voted FOR Proposal Number 2 and you hold shares of the Corporations common stock issued
in the Corporations initial public offering, you may exercise your conversion rights and demand
that the Corporation convert your shares of common stock into a pro rata portion of the trust
account by marking the Exercise Conversion Rights box below. If you exercise your conversion
rights, then you will be exchanging your shares of the Corporations common stock for cash and will
no longer own these shares. You will only be entitled to receive cash for these shares if the
Extension Amendment and Conversion proposals are approved, you demand that the Corporation convert
your shares into cash and deliver your stock to the Corporations transfer agent physically or
electronically prior to the meeting. Failure to (a) vote FOR Proposal Number 2, (b) check the
following box, (c) deliver your stock certificate to the Corporations transfer agent or deliver
your shares electronically through the Depository Trust Company prior to the meeting, and (d)
submit this proxy in a timely manner will result in the loss of your conversion rights.
EXERCISE CONVERSION RIGHTS
o
CONVERT
PUBLIC SHARES OF THE CORPORATION
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Proposal 3 Approve the Adjournment
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To consider and vote upon a proposal to
adjourn the special meeting to a later
date or dates, if necessary, to permit
further solicitation and vote of
proxies.
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Dated:
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_________________________ 2009
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Stockholders Signature
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Stockholders Signature
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Signature should agree with name printed hereon. If stock is held in the name of more than one
person, EACH joint owner should sign. Executors, administrators, trustees, guardians, and
attorneys should indicate the capacity in which they sign. Attorneys should submit powers of
attorney.
PLEASE SIGN, DATE AND RETURN THE PROXY IN THE ENVELOPE ENCLOSED TO CONTINENTAL STOCK TRANSFER &
TRUST COMPANY. THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSALS SET FORTH IN
PROPOSALS 1, 2 AND 3 AND WILL GRANT DISCRETIONARY AUTHORITY TO
VOTE UPON SUCH OTHER PROCEDURAL MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS
THEREOF. THIS PROXY WILL REVOKE ALL PRIOR PROXIES SIGNED BY YOU.
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