UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Global Sports, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Not Applicable
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) 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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] 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.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
[LOGO] Global Sports
Inc.
April 26, 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Global Sports, Inc. which will be held on Thursday, May 23, 2002 at 10:00 a.m.
local time at the Radisson Hotel Valley Forge, 1160 First Avenue, King of
Prussia, PA 19406. The official notice of the Annual Meeting together with a
proxy statement and proxy card are enclosed. Please give this information your
careful attention.
At the meeting, stockholders of Global Sports are being asked to elect eight
directors of Global Sports, to approve an amendment to Global Sports'
certificate of incorporation to change its corporate name to GSI Commerce, Inc.
and to act upon such other business as may properly come before the meeting.
Whether or not you expect to attend the meeting in person, it is important
that your shares be voted at the meeting. I urge you to specify your choices by
marking the enclosed proxy and returning it promptly.
Sincerely,
/s/ Michael G. Rubin
Michael G. Rubin
Chairman of the Board, President
and Chief Executive Officer
1075 First Avenue, King of Prussia, PA 19406 (610) 265-3229
[LOGO] Global Sports
Inc.
GLOBAL SPORTS, INC.
1075 FIRST AVENUE
KING OF PRUSSIA, PA 19406
-----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held May 23, 2002
-----------------
To Our Stockholders:
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Global Sports, Inc. ("Global Sports") will be held on Thursday,
May 23, 2002, at 10:00 a.m. local time, at the Radisson Hotel Valley Forge,
1160 First Avenue, King of Prussia, PA 19406, for the following purposes:
1. To elect eight directors, as more fully described in the accompanying
Proxy Statement;
2. To approve the amendment of Global Sports' Certificate of
Incorporation to change Global Sports' name to GSI Commerce, Inc.; and
3. To act upon such other business as may properly come before the Annual
Meeting or any postponement or adjournment thereof.
The Board of Directors is not aware of any other business to come before the
Annual Meeting.
The Board of Directors has fixed March 26, 2002 as the record date for the
determination of stockholders entitled to vote at the Annual Meeting. Only
stockholders of record at the close of business on that date will be entitled
to notice of, and to vote at, the Annual Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER OR
NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE URGED TO SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY. A SELF-ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE; NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors,
/s/ Arthur H. Miller
Arthur H. Miller
Secretary
King of Prussia, Pennsylvania
April 26, 2002
Global Sports, Inc.
1075 First Avenue
King of Prussia, PA 19406
-----------------
PROXY STATEMENT
-----------------
The accompanying Proxy is solicited by and on behalf of the Board of
Directors of Global Sports, Inc. ("Global Sports" or the "Company") for the
Annual Meeting of Stockholders (the "Annual Meeting") to be held on Thursday,
May 23, 2002, at 10:00 a.m. local time, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders, and at any postponement
or adjournment thereof. The Annual Meeting will be held at the Radisson Hotel
Valley Forge, 1160 First Avenue, King of Prussia, PA 19406. Unless the context
requires otherwise, all references herein to Global Sports refer to Global
Sports, Inc. and its subsidiaries. This Proxy Statement, the Notice of Annual
Meeting and the Proxy are first being mailed to stockholders on or about April
29, 2002.
The cost of soliciting proxies will be borne by Global Sports. In addition
to solicitation by mail, proxies may be solicited in person or by telephone,
telegraph, e-mail or fax by directors, officers or employees of Global Sports
without additional compensation. Upon request by brokers, dealers, banks or
voting trustees, or their nominees who are record holders of Global Sports
Common Stock, Global Sports will pay the reasonable expenses incurred by such
record holders for mailing proxy materials to any beneficial owners of the
Common Stock.
Record Date and Quorum
Only stockholders of record at the close of business on March 26, 2002 (the
"Record Date") will be entitled to notice of, and to vote at, the Annual
Meeting. As of the Record Date, Global Sports had 38,536,797 shares of Common
Stock issued and outstanding and 400 shares of Series A Preferred Stock issued
and outstanding. Each share of Common Stock outstanding is entitled to one vote
on each matter which may be brought before the Annual Meeting. The shares of
Series A Preferred Stock outstanding have no voting rights with respect to any
matter which may be brought before the Annual Meeting.
In order for a quorum to be present at the Annual Meeting, a majority of the
outstanding shares of Global Sports Common Stock as of the close of business on
the Record Date must be present in person or represented by proxy at the Annual
Meeting. All such shares that are present in person or represented by proxy at
the Annual Meeting, including abstentions and broker non-votes will be counted
in determining whether a quorum is present.
Voting of Shares
A Proxy is enclosed. If properly executed and received in time for voting,
and not revoked, the enclosed Proxy will be voted in accordance with the
instructions indicated by the stockholders. If no instructions to the contrary
are indicated, the persons named in the enclosed Proxy will vote all shares of
Common Stock represented by such Proxy:
(i) FOR election of all nominees for director named in this Proxy
Statement;
(ii) FOR approval of the amendment of Global Sports' Certificate of
Incorporation to change its name to GSI Commerce, Inc.; and
(iii) in the discretion of the persons named in the enclosed Proxy as to
any other matter that may properly come before the Annual Meeting.
The election of directors will be determined by a plurality vote. The
affirmative vote of a majority of the shares of Common Stock outstanding on the
Record Date is required to approve the amendment of Global Sports' Certificate
of Incorporation. An abstention, withholding of authority to vote or broker
non-vote on any proposal, other than the election of directors, will have the
same legal effect as a vote "against" the proposal.
1
Revocation of Proxies
Sending in a signed Proxy will not affect the stockholder's right to attend
the Annual Meeting and vote in person since the Proxy is revocable. Any
stockholder giving a Proxy has the power to revoke it by delivering a later
dated Proxy or giving written notice to the Secretary of Global Sports at any
time before the Proxy is exercised. Attendance at the Annual Meeting will not,
by itself, revoke a Proxy.
Change in Fiscal Year End
For all years prior to 1999, Global Sports' fiscal year ended on December
31. Effective for 1999, Global Sports changed its fiscal year from the last day
of December to the Saturday nearest the last day of December. As used in this
Proxy Statement, "fiscal 1999", "fiscal 2000" and "fiscal 2001" refer to Global
Sports' fiscal years ended January 1, 2000, December 30, 2000 and December 29,
2001, respectively, and "fiscal 2002" refers to Global Sports' fiscal year
ending December 28, 2002.
2
PROPOSAL 1--ELECTION OF DIRECTORS
Global Sports' Bylaws, as amended, provide that the number of directors
shall be set at nine unless otherwise determined by the Board of Directors. The
Board of Directors has set the number of directors at eight. The following
table sets forth certain information regarding the nominees for election to the
Board of Directors to serve for one-year terms until the 2003 Annual Meeting
and until their respective successors are elected and qualified. All of the
nominees currently serve as directors of Global Sports.
Director
Name Age(1) Position(s) Held in the Company Since
- ---- ------ ----------------------------------------------- --------
Michael G. Rubin 29 Chairman, President and Chief Executive Officer 1995
Kenneth J. Adelberg 49 Director 1995
M. Jeffrey Branman 46 Director 2001
Ronald D. Fisher 54 Director 2000
Harvey Lamm (2)(3) 66 Director 1998
Mark S. Menell (3) 37 Director 2000
Michael S. Perlis (2)(3) 49 Director 2001
Jeffrey F. Rayport (2) 42 Director 1999
- --------
(1) As of March 30, 2002.
(2) Member of Compensation Committee.
(3) Member of Audit Committee.
The principal occupation of each nominee for election to the Board of
Directors is set forth below.
Michael G. Rubin has served as Global Sports' Chairman of the Board and
Chief Executive Officer since July 1995 and as Global Sports' President since
June 2000. Mr. Rubin was named Entrepreneur of the Year in 1994 and 2000 at the
Greater Philadelphia Entrepreneur of the Year Awards sponsored by Ernst &
Young. Mr. Rubin attended Villanova University, Villanova, Pennsylvania.
Kenneth J. Adelberg has been one of Global Sports' directors since July
1995. Mr. Adelberg has served as President and Chief Executive Officer of HiFi
House Group of Companies, a privately-held company based in Broomall,
Pennsylvania, since 1987. Mr. Adelberg is a director and founding stockholder
of US Wats, Inc., a publicly-traded company specializing in business
telecommunications services, located in Bala Cynwyd, Pennsylvania, which was
established in 1989. Mr. Adelberg is a founding stockholder and director of
Republic Bank, Philadelphia, Pennsylvania, a publicly-traded bank which has
been in operation since 1989. Mr. Adelberg is also a director of Trackpower,
Inc. Mr. Adelberg holds Bachelor of Science degrees in Biophysics and
Physiological Psychology from Pennsylvania State University and attended the
MBA program at Drexel University, Philadelphia, Pennsylvania.
M. Jeffrey Branman has been one of Global Sports' directors since October
2001. Mr. Branman has served as President of Interactive Technology Partners, a
subsidiary of Comcast Corporation since April 2000. Interactive Technology
Partners serves as financial advisor to Interactive Technology Holdings, LLC, a
joint venture of Comcast Corporation and QVC, Inc. From March 1996 to February
2000, Mr. Branman was Senior Vice President Corporate Development of Foot
Locker, Inc. and Chief Executive Officer of FootLocker.com, the internet and
direct marketing subsidiary of Foot Locker. Mr. Branman is also Chairman of
Commerce Technologies, Inc. Mr. Branman is a graduate of the University of
California, Berkeley and the Carnegie Mellon University Graduate School of
Industrial Administration.
Ronald D. Fisher has been one of Global Sports' directors since March 2000.
Mr. Fisher currently serves as the Vice Chairman of SOFTBANK Holdings, Inc. and
Chief Executive Officer of SOFTBANK Global Ventures, a global private equity
organization. He joined SOFTBANK in October 1995. From January 1990 to
September 1995, Mr. Fisher was Chief Executive Officer of Phoenix Technologies,
Ltd., a developer and marketer of system software products. Mr. Fisher is also
a director of SOFTBANK Corporation, E*TRADE Group, Inc., InsWeb Corporation,
Key3media Group, Inc., PeoplePC, Inc and OptiMark Technologies. Mr. Fisher
received a Bachelor of Commerce degree from the University of Witwatersand in
South Africa and an MBA from Columbia University.
Harvey Lamm has been one of Global Sports' directors since April 1998. Mr.
Lamm has served as a director and Chief Executive Officer of Vintek
Corporation, a privately-held company based in Philadelphia,
3
Pennsylvania since 1996. Vintek specializes in automated title management and
the development of tools to reduce cost and manage risk for automotive finance
institutions. From 1990 to 1996, Mr. Lamm spent his time managing his
investments. From 1967 until 1990, Mr. Lamm served as Chairman of the Board,
Chief Executive Officer, President and Chief Operating Officer of Subaru of
America, Inc., until its acquisition by Fuji Heavy Industries Ltd. Mr. Lamm
helped found Subaru of America, which was the exclusive importer of Subaru
brand vehicles in the United States and was a publicly traded company listed on
the Nasdaq National Market. Mr. Lamm holds degrees from Pennsylvania State
University and Drexel University.
Mark S. Menell has been one of Global Sports' directors since April 2000.
Mr. Menell has been a partner of Rustic Canyon Ventures since January 2000.
From August 1990 to January 2000, Mr. Menell was an investment banker at Morgan
Stanley Dean Witter, most recently as Principal and co-head of Morgan Stanley
Dean Witter's Technology Mergers and Acquisitions Group, based in Menlo Park,
CA. Mr. Menell received a B.A. magna cum laude in economics from the University
of Pennsylvania and a B.S. magna cum laude in finance and an MBA from the
University of Pennsylvania's Wharton School of Business.
Michael S. Perlis has been once of Global Sports' directors since May 2001.
Mr. Perlis has been a Managing Partner of SOFTBANK Capital Partners LP since
July 2000. From November 1998 to June 2000, Mr. Perlis was employed by
Ziff-Davis Inc., most recently as President & Chief Executive Officer. While at
Ziff-Davis, Mr. Perlis was responsible for the portfolio of Ziff-Davis owned
and licensed titles. From June 1996 to October 1998, Mr. Perlis served as
President, Chief Operating Officer and Partner of TVSM Inc., a publisher of
system specific television listing and guidance publications. Mr. Perlis
received a B.A. from Syracuse University.
Dr. Jeffrey F. Rayport has been one of Global Sports' directors since April
1999. Dr. Rayport has been Chief Executive Officer of Marketspace LLC, an
information industries strategy and research business of Monitor Group,
headquartered in Cambridge, Massachusetts, since September, 1998. Dr. Rayport
has also been a faculty member in the Service Management Unit at the Harvard
Business School since prior to 1995. Dr. Rayport went on leave from the Harvard
Business School in September, 1998. Dr. Rayport earned an A.B. from Harvard
College, an M.Phil. in International Relations at the University of Cambridge
and an A.M. in the History of American Civilization and a Ph.D. in Business
History at Harvard University. Dr. Rayport is also a director of BeFree, Inc.
and MarketWatch.com, Inc.
The stock purchase agreements pursuant to which certain funds affiliated
with SOFTBANK America Inc. ("SOFTBANK") acquired their shares of Global Sports
Common Stock provide that SOFTBANK has the right to designate up to two members
of Global Sports' Board of Directors, depending on the number of shares of
Global Sports Common Stock held by SOFTBANK. Additionally, one of the SOFTBANK
directors will be entitled to serve as a member of each committee of the Board
of Directors. Messrs. Fisher and Perlis are the SOFTBANK nominees for election
to the Board of Directors at the Annual Meeting. The stock purchase agreement
pursuant to which Rustic Canyon Ventures, L.P., f/k/a TMCT Ventures, L.P.
("Rustic Canyon") acquired its shares of Global Sports Common Stock provides
that Rustic Canyon has the right to designate one member of Global Sports'
Board of Directors. Mr. Menell is the Rustic Canyon nominee for election to the
Board of Directors at the Annual Meeting. The stock purchase agreement pursuant
to which Interactive Technology Holdings, LLC ("ITH") acquired its shares of
Global Sports Common Stock provides that ITH has the right to designate up to
two members of Global Sports' Board of Directors, depending on the number of
shares of Global Sports Common Stock held by ITH. Additionally, one of the ITH
directors will be entitled to serve as a member of each committee of the Board
of Directors. Mr. Branman is the ITH nominee for election to the Board of
Directors at the Annual Meeting. ITH has not nominated its second member of
Global Sports' Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR
ELECTION OF ALL OF THE NOMINEES FOR DIRECTORS.
Board, Committees and Attendance at Meetings
The Board of Directors of Global Sports held 10 meetings during fiscal 2001.
During fiscal 2001, no director attended fewer than 75% of the aggregate of (i)
the total number of Board meetings held during the
4
period for which he was a director and (ii) the total number of meetings held
by committees of the Board of Directors on which he served, during the period
he served, except that Mr. Rayport was unable to attend four Board meetings and
that Mr. Lamm was unable to attend three Board meetings. The following is a
description of each of the committees of the Board of Directors of Global
Sports.
Audit Committee. Since May 2001, the members of the Audit Committee have
been Messrs. Lamm, Menell and Perlis. The Audit Committee reviews Global
Sports' audited financial statements and the independence of the independent
auditors and makes recommendations to the Board of Directors concerning Global
Sports' accounting practices and policies and the selection of independent
accountants. The responsibilities of the Audit Committee are described in the
Audit Committee Charter adopted by the Audit Committee and the Board of
Directors, a copy of which is filed with the Securities and Exchange
Commission. Each member of the Audit Committee is independent, as defined in
Rule 4200(a)(15) of the National Association of Securities Dealers' listing
standards. The Audit Committee held six meetings during fiscal 2001.
Compensation Committee. Since May 2001, the members of the Compensation
Committee have been Messrs. Lamm, Perlis and Rayport. The Compensation
Committee is responsible for establishing salaries, bonuses and other
compensation for the executive officers and administers Global Sports' stock
option plans. The Compensation Committee held six meetings during fiscal 2001.
Compensation of Directors
Under Global Sports' current policy, as compensation for their service as
directors of Global Sports, each non-employee director receives an option to
purchase 25,000 shares of Global Sports Common Stock upon his or her initial
election as a director and an option to purchase 10,000 shares of Global Sports
Common Stock on each subsequent annual election as a director. The directors do
not receive any cash compensation for their services on behalf of Global Sports
but are reimbursed for reasonable travel and lodging expenses incurred in
attending meetings of the Board of Directors and any Committee. Mr. Rubin, the
only director who is also an officer of Global Sports, does not receive any
separate fee for acting in his capacity as a director.
On September 19, 1995, the Board of Directors adopted, and on November 15,
1995, the stockholders approved, the 1995 Non-Employee Directors' Stock Plan
(the "Directors' Plan"). Pursuant to the Directors' Plan, options originally
could be granted with respect to an aggregate of 12,500 shares of Common Stock.
Effective December 31, 1997, the Board of Directors terminated the Directors'
Plan, which remains in effect only as to unexercised options granted under the
Directors' Plan.
Audit Committee Report
The Audit Committee serves as an independent and objective party to monitor
Global Sports' financial reporting process and internal control system. The
Audit Committee reviews and appraises the audit efforts of Global Sports'
independent accountants and financial management, including internal auditing,
if applicable, and provides an open avenue of communication among the
independent accountants, financial and senior management and the Board of
Directors. Each member of the Audit Committee is independent, as defined in
Rule 4200(a)(15) of the National Association of Securities Dealers' listing
standards. The Board of Directors adopted a written charter for the Audit
Committee on June 14, 2000, a copy of which is filed with the Securities and
Exchange Commission.
The Audit Committee has reviewed and discussed the audited financial
statements with Global Sports' management. The Audit Committee has also
discussed with Deloitte & Touche LLP, the Company's independent auditors, the
matters required to be discussed by Statement on Auditing Standards No. 61,
"Communication with
5
Audit Committees." The Audit Committee has received the disclosures from
Deloitte & Touche LLP required by Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees," and has discussed with
Deloitte & Touche LLP their independence. Based upon the review and discussions
referred to above, the Audit Committee recommended to the Board of Directors of
Global Sports that the audited financial statements be included in Global
Sports' Annual Report on Form 10-K for fiscal 2001 for filing with the
Securities and Exchange Commission.
Harvey Lamm
Mark S. Menell
Michael S. Perlis
6
BENEFICIAL OWNERSHIP OF COMMON STOCK
The following table sets forth, as of April 1, 2002, the beneficial
ownership of Global Sports Common Stock by: (i) each person known by Global
Sports to be the beneficial owner of five percent or more of Global Sports'
outstanding Common Stock, (ii) each director and nominee for director of Global
Sports, (iii) each executive officer of Global Sports who is named in the
Summary Compensation Table below (the "Named Officers") and (iv) the directors
and executive officers of Global Sports as a group. Unless otherwise specified,
all persons listed below have sole voting and investment power with respect to
their shares. The business address of the officers and directors of Global
Sports is that of Global Sports.
Name, Position and Address Number of Shares Percentage
of Beneficial Owner Beneficially Owned(1) of Class
-------------------------- --------------------- ----------
Michael G. Rubin (2)
Chairman, President and
Chief Executive Officer........................................ 7,317,096 18.9%
Robert W. Liewald (3)
Executive Vice President,
Merchandising.................................................. 221,664 *
Arthur H. Miller (4)
Executive Vice President and
General Counsel................................................ 224,176 *
Mark S. Reese (5)
Executive Vice President and
Chief Operating Officer........................................ 88,538 *
Glenn P. Walls (6)
Senior Vice President,
Merchandising.................................................. 10,800 *
Kenneth J. Adelberg (7)
Director....................................................... 130,650 *
M. Jeffrey Branman (8)
Director....................................................... 33,000 *
Ronald D. Fisher (9)
Director....................................................... 9,922,600 25.0%
Harvey Lamm (10)
Director....................................................... 162,260 *
Mark S. Menell (11)
Director....................................................... 1,115,650 2.9%
Michael S. Perlis (12)
Director....................................................... 9,928,850 25.0%
Jeffrey F. Rayport (13)
Director....................................................... 48,750 *
Interactive Technology Holdings, LLC (14)........................ 13,800,000 31.8%
SOFTBANK Affiliates (15)......................................... 9,903,850 25.0%
All executive officers and directors as a group (15 persons) (16) 19,646,042 47.3%
- --------
* Less than one percent
(1) The securities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the SEC. Accordingly, they may include securities owned by
or for, among others, the wife and/or minor children of the individual and
any other relative who has the same home as such individual, as well as
other securities as to which the individual has or shares voting or
investment power or has the right to acquire under outstanding stock
options within 60 days of the date of this table. Beneficial ownership may
be disclaimed as to certain of the securities.
(2) Includes 250,000 shares of Common Stock issuable upon the exercise of
options.
(3) Includes 163,750 shares of Common Stock issuable upon the exercise of
options and 10,000 shares of Common Stock issuable upon the exercise of
warrants. Effective April 23, 2002, options to purchase 75,000 shares of
Common Stock terminated.
7
(4) Includes 220,833 shares of Common Stock issuable upon the exercise of
options. Effective April 23, 2002, options to purchase 100,000 shares of
Common Stock terminated.
(5) Includes 40,624 shares of Common Stock issuable upon the exercise of
options.
(6) Includes 7,500 shares of Common Stock issuable upon the exercise of options.
(7) Includes 85,000 shares of Common Stock issuable upon the exercise of
options.
(8) Includes 25,000 shares of Common Stock issuable upon the exercise of
options. Does not include any shares owned by ITH. ITH is a joint venture
company formed by Comcast Corporation and QVC, Inc. Mr. Branman is
President of Interactive Technology Partners, a subsidiary of Comcast
Corporation that serves as financial advisor to ITH. Mr. Branman disclaims
beneficial ownership of all shares owned by ITH. Mr. Branman is not named
as a beneficial owner in Schedule 13D/A filed by ITH with the SEC on August
29, 2001.
(9) Consists of (i) 38,750 shares of Common Stock issuable to Mr. Fisher upon
the exercise of options; (ii) 4,309,176 shares of Common Stock held by
SOFTBANK Capital Partners LP; (iii) 4,235,098 shares of Common Stock held
by SOFTBANK Capital LP; (iv) 109,576 shares of Common Stock held by
SOFTBANK Capital Advisors Fund LP; (v) 624,978 shares of Common Stock
issuable to SOFTBANK Capital Partners LP upon the exercise of warrants;
(vi) 614,234 shares of Common Stock issuable to SOFTBANK Capital LP upon
the exercise of warrants; and (vii) 10,788 shares of Common Stock issuable
to SOFTBANK Capital Advisors Fund LP upon the exercise of warrants. Mr.
Fisher is a Managing Director of the general partner of each of these
SOFTBANK entities. Mr. Fisher disclaims beneficial ownership of these
shares, except to the extent of his pecuniary interest.
(10) Includes 150,000 shares of Common Stock issuable upon the exercise of
options.
(11) Consists of (i) 38,750 shares of Common Stock issuable upon the exercise
of options; (ii) 764,400 shares of Common Stock held by Rustic Canyon; and
(iii) 312,500 shares of Common Stock issuable to Rustic Canyon upon the
exercise of warrants. Mr. Menell is a Partner of Rustic Canyon. Mr. Menell
disclaims beneficial ownership of these shares, except to the extent of
his pecuniary interest.
(12) Consists of (i) 25,000 shares of Common Stock issuable to Mr. Perlis upon
the exercise of options; (ii) 4,309,176 shares of Common Stock held by
SOFTBANK Capital Partners LP; (iii) 4,235,098 shares of Common Stock held
by SOFTBANK Capital LP; (iv) 109,576 shares of Common Stock held by
SOFTBANK Capital Advisors Fund LP; (v) 624,978 shares of Common Stock
issuable to SOFTBANK Capital Partners LP upon the exercise of warrants;
(vi) 614,234 shares of Common Stock issuable to SOFTBANK Capital LP upon
the exercise of warrants; and (vii) 10,788 shares of Common Stock issuable
to SOFTBANK Capital Advisors Fund LP upon the exercise of warrants. Mr.
Perlis is a Managing Partner of SOFTBANK Capital Partners LP. Mr. Perlis
disclaims beneficial ownership of these shares, except to the extent of
his pecuniary interest.
(13) Consists of 48,750 shares of Common Stock issuable upon the exercise of
options.
(14) Includes 4,800,000 shares of Common Stock issuable upon the exercise of
warrants. The business address of Interactive Technology Holdings, LLC is
c/o QVC, Inc., Studio Park, West Chester, PA 19380.
(15) Consists of (i) 4,309,176 shares of Common Stock held by SOFTBANK Capital
Partners LP; (ii) 4,235,098 shares of Common Stock held by SOFTBANK
Capital LP; (iii) 109,576 shares of Common Stock held by SOFTBANK Capital
Advisors Fund LP; (iv) 624,978 shares of Common Stock issuable to SOFTBANK
Capital Partners LP upon the exercise of warrants; (v) 614,234 shares of
Common Stock issuable to SOFTBANK Capital LP upon the exercise of
warrants; and (vi) 10,788 shares of Common Stock issuable to SOFTBANK
Capital Advisors Fund LP upon the exercise of warrants. The business
address of SOFTBANK is 10 Langley Road, Suite 403, Newtown Center, MA
02159.
(16) Includes (i) an aggregate of 1,435,514 shares of Common Stock issuable
upon the exercise of options held by all executive officers and directors
as a group; (ii) an aggregate of 10,000 shares of Common Stock issuable
upon the exercise of warrants held by all executive officers and directors
as a group; (iii) 4,309,176 shares of Common Stock held by SOFTBANK
Capital Partners LP; (iv) 4,235,098 shares of Common Stock held by
SOFTBANK Capital LP; (v) 109,576 shares of Common Stock held by SOFTBANK
Capital Advisors Fund LP; (vi) 764,400 shares of Common Stock held by
Rustic Canyon; (vii) 624,978 shares of Common Stock issuable to SOFTBANK
Capital Partners LP upon the exercise of warrants; (viii) 614,234 shares
of Common Stock issuable to SOFTBANK Capital LP upon the exercise of
warrants; (ix)10,788 shares of Common Stock issuable to SOFTBANK Capital
Advisors Fund LP upon the exercise of warrants; (x) 312,500 shares of
Common Stock issuable to Rustic Canyon upon the exercise of warrants; and
(xi) 4,800,000 shares of Common Stock issuable to Interactive Technology
Holdings, LLC upon the exercise of warrants. Effective April 23, 2002,
options to purchase 315,000 shares of Common Stock terminated.
8
PROPOSAL 2--AMENDMENT OF CERTIFICATE OF INCORPORATION
TO CHANGE GLOBAL SPORTS NAME TO GSI COMMERCE INC.
The Company's current name is Global Sports, Inc. On February 5, 2002, the
Board of Directors approved an amendment to the Company's Certificate of
Incorporation to change the Company's name to GSI Commerce, Inc. The
Certificate of Incorporation, as proposed to be amended is attached, as
Appendix A to this Proxy Statement.
Global Sports has evolved from providing outsource e-commerce solutions for
sporting goods companies to serving other vertical categories, including
general merchandise retailers and media companies, and, through the acquisition
of Ashford.com, Global Sports serves the jewelry and luxury goods category. The
Global Sports' name has become limiting, given the expanded focus of the
Company's business. The new name, GSI Commerce, will maintain the corporate
recognition already developed by Global Sports while also accommodating the
Company's broadening focus.
Stockholder approval of this proposal is required under Delaware law.
Approval of the amendment to Global Sports' Certificate of Incorporation
requires the affirmative vote of the holders of a majority of the outstanding
shares of Global Sports Common Stock.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE AMENDMENT OF
GLOBAL SPORTS' CERTIFICATE OF INCORPORATION TO CHANGE ITS NAME TO GSI COMMERCE,
INC.
EXECUTIVE COMPENSATION
Compensation Committee Report
Since May 2001, Global Sports' Compensation Committee of the Board of
Directors was comprised of Messrs. Lamm, Perlis and Rayport. For fiscal 2001,
the Compensation Committee reviewed the compensation of executive officers,
made decisions regarding executive compensation and administered Global Sports'
employee equity incentive plans.
Global Sports' compensation policies for executive officers are to:
. provide compensation packages to attract, motivate and retain executives,
. link a significant portion of compensation to financial results to reward
successful performance, and
. provide long-term equity based compensation to further align the
interests of executives with those of the stockholders and further reward
success and performance.
The principal components of Global Sports' executive compensation are base
salary, incentive compensation and periodic grants of stock options or awards.
The award of bonuses and stock options serve as incentives for superior
performance and are based upon both the performance of the executives and
Global Sports.
In determining compensation levels, Global Sports considers compensation
packages offered by similar sized companies involved in similar businesses.
Compensation levels for individual executive officers may be more or less than
those offered by such other companies, depending on a subjective assessment of
individual factors, such as the executive's position, skills, achievements,
tenure with Global Sports and historical compensation levels.
Global Sports has employment agreements with the following Named Officers:
Michael G. Rubin, Global Sports' Chairman, President and Chief Executive
Officer, Arthur H. Miller, Global Sports' Executive Vice President and General
Counsel and Mark S. Reese, Global Sports' Executive Vice President and Chief
Operating Officer. Compensation of the Named Officers for fiscal 2001 was
determined in accordance with these employment agreements as described herein.
Mr. Rubin's compensation in fiscal 2001 consisted solely of the base salary
provided for in his employment agreement. Other than through options, Mr.
Rubin's compensation was not based on Global Sports' performance.
9
Under the stock option plans established by Global Sports, stock options are
periodically granted to employees at the discretion of the Board of Directors
or Compensation Committee. It is contemplated that executives of Global Sports
will be eligible to receive stock option grants, subject to individual
performance and the performance of Global Sports as a whole.
During fiscal 2001, Global Sports' Named Officers were granted a total of
1,385,000 options to purchase Common Stock at exercise prices ranging from
$5.56 to $9.00 per share.
Section 162(m) of the Code generally denies a deduction to any publicly held
company, such as Global Sports, for certain compensation exceeding $1,000,000
paid in any taxable year to the chief executive officer and the four other
highest paid executive officers, excluding, among other things, certain
qualified performance-based compensation. The Board of Directors has not yet
recommended any change to Global Sports' executive compensation policies and
plans as a result of Section 162(m). The Compensation Committee has considered
the impact of Section 162(m) and believes that it will not have a material
adverse effect on Global Sports in fiscal 2002.
Harvey Lamm
Michael S. Perlis
Jeffrey Rayport
Compensation Committee Interlocks and Insider Participation
During fiscal 2001, the Compensation Committee consisted of Harvey Lamm,
Charles R. Lax (until May 2001), Michael S. Perlis (beginning May 2001) and
Jeffrey Rayport. None of the members of the Board's Compensation Committee is
or has been an officer or employee of Global Sports. Mr. Perlis is a Managing
Partner of SOFTBANK Capital Partners LP, the SOFTBANK affiliate through which
SOFTBANK has acquired an aggregate of 4,309,176 shares of Global Sports Common
Stock and warrants to purchase an aggregate of 624,978 shares of Global Sports
Common Stock. Two other SOFTBANK affiliates, SOFTBANK Capital LP and SOFTBANK
Advisors Funds LP, own 4,235,098 and 109,576 shares, respectively, of Global
Sports Common Stock and warrants to purchase an aggregate of 614,234 and 10,788
shares, respectively, of Global Sports Common Stock. See also "Certain
Relationships and Related Transactions."
10
Summary Compensation Table
The following table sets forth information regarding compensation paid by
Global Sports and its subsidiaries to each Named Officer.
Long Term
Compensation
-----------------------
Annual Compensation Awards (1)
------------------------------ -----------------------
Securities
Restricted Underlying
Fiscal Other Annual Stock Options/ All Other
Name and Principal Position Year Salary Bonus Compensation(2) Award(s) SARS (#) Compensation(3)
- --------------------------- ------ -------- -------- --------------- ---------- ---------- ---------------
Michael G. Rubin 2001 $325,000 -- -- -- -- $ 765
Chairman, President and 2000 375,400 -- -- -- -- 510
Chief Executive Officer.. 1999 450,000 -- -- -- -- 510
Robert W. Liewald 2001 250,000 -- -- -- 150,000 7,861
Executive Vice President, 2000 200,000 $100,000 -- -- 25,000 4,318
Merchandising............ 1999 90,769 100,000 -- -- 105,000 170
Arthur H. Miller 2001 225,000 100,000 -- -- 175,000 5,329
Executive Vice President 2000 200,000 100,000 -- -- 50,000 3,846
and General Counsel...... 1999 40,385 25,000 $130,505(4) $149,900(5) 100,000 43
Mark S. Reese
Executive Vice President 2001 250,000 -- -- -- 25,000 8,250
and Chief Operating 2000 144,231 30,000 -- 199,421(6) 125,000 37,796(7)
Officer.................. 1999 -- -- -- -- -- --
Glenn P. Walls 2001 190,000 -- -- 31,450(8) 30,000 3,021
Senior Vice President, 2000 162,500 24,375 -- -- 50,000 --
Merchandising............ 1999 -- -- -- -- -- --
- --------
(1) Global Sports did not grant any stock appreciation rights during the years
presented.
(2) Excludes perquisites and other personal benefits that do not, in the
aggregate, exceed $50,000 or 10% of each officer's total salary and bonus.
(3) For fiscal 2001, consists of (i) Global Sports' matching contributions
under its 401(k) Profit Sharing Plan in the amount of $375, $7,471, $4,939,
$7,860 and $2,631 for Messrs. Rubin, Liewald, Miller, Reese and Walls,
respectively, and (ii) insurance premiums paid by Global Sports with
respect to term life insurance in the amount of $390 for each of Messrs.
Rubin, Liewald, Miller, Reese and Walls.
(4) Consists of amounts reimbursed during fiscal 1999 for the payment of taxes.
(5) On August 9, 1999, Mr. Miller was granted a restricted stock award of
10,000 shares of Global Sports Common Stock vesting on the date of grant.
The amount set forth in the table is the market value of the award on the
date of grant, net of the amount paid by Mr. Miller.
(6) On May 26, 2000, Mr. Reese was granted a restricted stock award of 46,377
shares of Global Sports Common Stock vesting on the date of grant. The
amount set forth in the table is the market value of the award on the date
of grant, net of the amount paid by Mr. Reese.
(7) Includes $37,378 reimbursement of relocation costs paid pursuant to Mr.
Reese's Employment Agreement.
(8) On January 5, 2001, Mr. Walls was granted a restricted stock award of 5,000
shares of Global Sports Common Stock vesting on the date of grant. The
amount set forth in the table is the market value of the award on the date
of grant, net of the amount paid by Mr. Walls.
11
Option/SAR Grants in Last Fiscal Year
The following table sets forth certain information regarding options to
purchase shares of Common Stock granted to the Named Officers during fiscal
2001. No SAR's were granted during fiscal 2001.
Potential Realized Value
at Assumed Annual
Rates of Stock Price
Appreciation for Option
Individual Grants Term (1)
--------------------------------------------- ------------------------
Number of % of Total
securities Options/SARs Exercise
underlying Granted to or Base
Options/SARs Employees in Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5% ($) 10% ($)
---- ------------ ------------ -------- ---------- ---------- ----------
Michael G. Rubin
Chairman, President and Chief
Executive Officer................... 1,000,000(2) 38.2% $5.56 01/03/11 $3,498,571 $8,865,763
Robert W. Liewald
Executive Vice President, 75,000(3) 5.56 01/03/11 262,393 664,931
Merchandising....................... 75,000(4) 5.7 9.00 07/19/11 424,508 1,075,748
Arthur H. Miller
Executive Vice President and General 75,000(5) 5.56 01/03/11 262,393 664,931
Counsel............................. 100,000(6) 6.7 9.00 07/19/11 566,010 1,434,330
Mark S. Reese
Executive Vice President and Chief
Operating Officer................... 25,000(7) 1.0 5.56 01/03/11 87,464 221,644
Glenn P. Walls
Senior Vice President,
Merchandising....................... 30,000(8) 1.1 5.56 01/03/11 104,957 265,973
- --------
(1) Represents the difference between the market value of the Common Stock for
which the option may be exercised, assuming that the market value of the
Common Stock on the date of grant appreciates in value to the end of the
ten-year option term at annualized rates of 5% and 10%, respectively, and
the exercise price of the option. The rates of appreciation used in this
table are prescribed by regulation of the SEC and are not intended to
forecast future appreciation of the market value of the Common Stock.
(2) Such option vests as follows: 250,000 on each of January 4, 2002, January
4, 2003, January 4, 2004 and January 4, 2005.
(3) Such option vests as follows: 37,500 shares on January 4, 2001 and 12,500
shares on each of January 4, 2002, January 4, 2003 and January 4, 2004.
(4) Such option vests as follows: 36,250 on July 20, 2001 and 38,750 on
February 20, 2004.
(5) Such option vests as follows: 37,500 shares on January 4, 2001 and 12,500
shares on each of January 4, 2002, January 4, 2003 and January 4, 2004.
(6) Such option vests as follows: 50,000 shares on July 20, 2001, 2,084 shares
on the 20/th day of each month thereafter for the next 23 months and 2,068
shares on July 20, 2003. /
(7) Such option vests as follows: 6,250 shares on each of January 4, 2001,
January 4, 2002, January 4, 2003 and January 4, 2004.
(8) Such option vests as follows: 7,500 shares on each of January 4, 2001,
January 4, 2002, January 4, 2003 and January 4, 2004.
12
Aggregated Option/SAR Exercises in Last Fiscal Year and Fiscal Year End
Option/SAR Values
The following table sets forth information regarding options to purchase
shares of Common Stock exercised by the Named Officers during fiscal 2001 under
Global Sports' stock option plans and the values of options held by such
individuals at fiscal year end.
Value of Unexercised
Number of Securities In-the-Money
Underlying Unexercised Options/SARs at
Options/SARs at Fiscal Fiscal Year End
Shares Acquired Value Year End Exercisable/
Name on Exercise(#) Realized Exercisable/Unexercisable Unexercisable (1)
---- --------------- -------- ------------------------- --------------------
Michael G. Rubin
Chairman, President and Chief
Executive Officer............ -- -- 0/1,000,000 $ 0/$14,387,000
Robert W. Liewald
Executive Vice President,
Merchandising................ -- -- 133,645/136,355 1,444,928/1,360,897
Arthur H. Miller
Executive Vice President and
General Counsel.............. -- -- 183,592/141,408 1,917,379/1,533,496
Mark S. Reese
Executive Vice President and
Chief Operating Officer...... 50,000 $538,962 10,937/89,063 163,209/1,369,241
Glenn P. Walls
Senior Vice President,
Merchandising................ 20,000 181,747 0/60,000 $ 0/811,658
- --------
(1) Represents the aggregate market value (market price of the Common Stock
less the exercise price) of the options granted based upon the closing
sales price per share of $19.95 at the end of fiscal 2001.
Employment Agreements
Michael G. Rubin. Effective January 1, 2001, Global Sports entered into a
new employment agreement with Mr. Rubin for a term of four years to serve as
Global Sports' President and Chief Executive Officer. Pursuant to the terms of
the employment agreement, Mr. Rubin is entitled to receive (i) an annual base
salary of $325,000 during fiscal 2001, subject to annual increases of $25,000
in each successive year, (ii) an annual bonus in such amount and based upon the
achievement of such goals as Mr. Rubin and the Compensation Committee may
determine and (iii) other benefits similar to those provided to Global Sports'
other officers.
Mr. Rubin's employment agreement may be terminated by Global Sports with
cause, which is defined to include gross negligence or willful misconduct in
the performance of his duties under the agreement, willful breach of the
agreement or conviction of a felony. Mr. Rubin may terminate his employment
with Global Sports for good reason, which is defined to include, among other
things, demotion or removal from his position or diminishment of his duties,
reduction in base salary or a material reduction in benefits, breach of the
agreement by Global Sports or relocation of Mr. Rubin's principal place of
employment. In the event of termination by Global Sports other than for cause
or termination by Mr. Rubin for good reason, Global Sports will pay Mr. Rubin
two years of his base salary, in accordance with Global Sports' normal payroll
practices, and provide Mr. Rubin with his benefits during such two-year period.
Under the employment agreement, for a period of two years following his
termination, Mr. Rubin is prohibited from engaging in a business that is
competitive with Global Sports' business or from soliciting employees of Global
Sports to become an employee of someone else.
Mark S. Reese. On May 30, 2000, Global Sports entered into an employment
agreement with Mark S. Reese, Executive Vice President and Chief Operating
Officer of Global Sports, for a term of four years beginning May 29, 2000. Mr.
Reese is entitled to receive the following compensation: (i) an annual base
salary of $250,000 for fiscal 2000, subject to annual increases in accordance
with Global Sports' annual performance review procedures, (ii) incentive
bonuses up to $50,000 as determined by Global Sports' Chief Executive Officer,
(iii) an automobile allowance of $1,000 per month and (iv) other benefits
similar to those provided to Global Sports' other officers.
13
Arthur H. Miller. On August 9, 1999, Global Sports entered into an
employment agreement with Arthur H. Miller, Executive Vice President and
General Counsel of Global Sports, for an initial term, beginning September 20,
1999, of five years that has been extended by two years. Mr. Miller is entitled
to receive the following compensation: (i) an annual base salary of $200,000
for fiscal 2000 subject to annual increases of $25,000, (ii) an incentive bonus
of $100,000, as determined by Global Sports' Chief Executive Officer, (iii) an
automobile allowance of $1,000 per month and (iv) other benefits similar to
those provided to Global Sports' other officers.
Each of Messrs. Miller's and Reese's employment agreements may be terminated
by Global Sports with cause, which is defined similarly to the definition of
cause in Mr. Rubin's agreement. In addition, Messrs. Miller and Reese may
terminate their agreements for good reason, which is defined similarly to the
definition of good reason in Mr. Rubin's agreement. In the event of termination
by Global Sports other than for cause or termination by Mr. Miller or Mr. Reese
for good reason, Global Sports will pay the executive the severance and
benefits specified in his agreement. Messrs. Miller's and Reese's employment
agreements each contain a one year restrictive covenant similar to the one in
Mr. Rubin's agreement.
STOCK PERFORMANCE GRAPH
The following graph shows a comparison of the cumulative total return for
Global Sports Common Stock, the ISDEX Internet Stock Index and the NASDAQ Stock
Market, assuming an investment of $100 in each on December 29, 1996, and the
reinvestment of all dividends. The data points used for the performance graph
are listed below.
[CHART]
Total Return Analysis 12/29/96 12/31/97 12/31/98 12/31/99 12/31/00 12/29/01
- --------------------- -------- -------- -------- -------- -------- --------
Global Sports............. $100.00 $ 54.99 $157.51 $251.28 $110.64 $399.06
ISDEX Internet Stock Index $100.00 $100.37 $338.69 $864.67 $363.06 $181.76
NASDAQ.................... $100.00 $122.15 $171.24 $318.72 $193.50 $152.76
Note: Stock price performance shown in the Stock Performance Graph for
Global Sports Common Stock is historical and not necessarily indicative of
future price performance.
14
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Global Sports does not have any formal policy concerning the direct or
indirect pecuniary interest of any of its officers, directors, security holders
or affiliates in any investment to be acquired or disposed of by Global Sports
or in any transaction to which Global Sports is a party or has an interest.
Global Sports will not enter into any such transactions unless approved by a
majority of the entire Board of Directors, not including any interested
director, or a majority of the Audit Committee.
Prior to moving to its current location, Global Sports' main executive
offices and warehouse were located in a 75,000 square foot facility leased from
Michael G. Rubin, Global Sports' Chairman, President and Chief Executive
Officer. The lease was terminated effective December 30, 2000 in exchange for a
$500,000 payment by Global Sports to Mr. Rubin in full satisfaction of Global
Sports' obligations to Mr. Rubin under the lease. Payments by Global Sports to
Mr. Rubin under the lease totaled approximately $500,000 in fiscal 2001.
On September 13, 2000, Global Sports agreed to sell to ITH, a joint venture
company formed by Comcast Corporation and QVC, Inc., 5,000,000 shares of Global
Sports Common Stock at $8.15 per share for an aggregate purchase price of $40.8
million. In addition, ITH agreed to purchase, for approximately $563,000,
five-year warrants to purchase an additional 4,500,000 shares of Global Sports
Common Stock, at prices ranging from $8.15 to $10.00 per share.
On July 20, 2001, Global Sports agreed to sell to ITH 3,000,000 shares of
our Common Stock at $10.00 per share for an aggregate purchase price of $30.0
million. In addition, Global Sports issued to ITH a five-year warrant to
purchase an aggregate of 300,000 shares of Global Sport's Common Stock at an
exercise price of $6.00 per share in consideration for certain corporate
development services performed by ITH on behalf of Global Sports. Mr. Branman
is President of Interactive Technology Partners, a subsidiary of Comcast
Corporation, which provides financial advisory services to ITH.
Global Sports has entered into strategic alliances to provide procurement
and fulfillment services for QVC, Inc. and for certain partners which may be
considered affiliates of SOFTBANK America Inc. (or its related companies).
Global Sports recognized net revenues of $3.5 million on sales to these related
parties in fiscal 2001. The terms of these sales are comparable to those given
to other Global Sports partners.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires Global Sports' directors, executive officers, and persons who own more
than 10% of a registered class of Global Sports' equity securities, to file
with the SEC initial reports of ownership and reports of changes in ownership
of Common Stock and other equity securities of Global Sports. Officers,
directors and greater than 10% stockholders are required by SEC regulations to
furnish Global Sports with copies of all Section 16(a) forms they file.
To Global Sports' knowledge, based solely on a review of the copies of such
reports furnished to Global Sports and written representations that no other
reports were required, all Section 16(a) filing requirements applicable to
Global Sports' executive officers, directors and greater than 10% beneficial
stockholders were complied with during fiscal 2001, except that the following
reports were not timely filed: initial statement of beneficial ownership of
securities and statement of changes in beneficial ownership filed by Mr. Perlis.
OTHER MATTERS
As of the date of this Proxy Statement, Global Sports knows of no other
business that will be presented for consideration at the Annual Meeting (other
than procedural matters). However, the enclosed proxy confers discretionary
authority to vote with respect to any and all of the following matters that may
come before the Annual Meeting: (i) matters that Global Sports' Board of
Directors does not know, a reasonable time before proxy solicitation, are to be
presented for approval at the Annual Meeting; (ii) approval of the minutes of a
prior
15
meeting of stockholders, if such approval does not constitute ratification of
the action at the meeting; (iii) the election of any person to any office for
which a bona fide nominee is unable to serve or for good cause will not serve;
(iv) any proposal omitted from this Proxy Statement and the form of proxy
pursuant to Rules 14a-8 or 14a-9 under the Exchange Act; and (v) matters
incident to the conduct of the Annual Meeting. If any such matters come before
the Annual Meeting, the proxy agents named in the accompanying proxy card will
vote in accordance with their judgment.
INDEPENDENT PUBLIC ACCOUNTANTS
General
The appointment of an independent public accountant is approved annually by
the Board of Directors based upon the recommendation of the Audit Committee.
The accounting firm of Deloitte & Touche LLP acted as Global Sports'
independent public accountants for fiscal 2001. No independent public
accountant has been selected for fiscal 2002 as the Audit Committee has not yet
made its recommendation. A representative of Deloitte & Touche LLP is expected
to be present at the Annual Meeting and to have the opportunity to make a
statement, if he or she desires to do so, and is expected to be available to
respond to appropriate questions.
Audit Fees
The aggregate fees billed by Deloitte & Touche LLP for professional services
rendered for the audit of Global Sports' annual financial statements for the
fiscal year ended December 29, 2001 and the reviews of the financial statements
included in Global Sports' Forms 10-Q for fiscal 2001 were approximately
$346,000.
Financial Information Systems Design and Implementation Fees
The aggregate fees billed by Deloitte & Touche LLP for professional services
related to financial information systems design and implementation for fiscal
2001 were approximately $106,000.
All Other Fees
The aggregate fees billed for services rendered by Deloitte & Touche LLP,
other than for services covered by the preceding two paragraphs, totaled
approximately $77,000 for fiscal 2001.
The Audit Committee has considered and determined that the services provided
by Deloitte & Touche LLP are compatible with Deloitte & Touche LLP maintaining
its independence.
ADDITIONAL INFORMATION
Global Sports is subject to the reporting requirements of the Exchange Act,
and in accordance therewith files periodic reports and other information with
the SEC. Such reports, proxy statements and other information concerning Global
Sports may be inspected and copies may be obtained (at prescribed rates) at
Public Reference Room maintained by the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at (202) 942-8092. In
addition, electronically filed documents, including reports, proxy and
information statements and other information regarding Global Sports, can be
obtained from the SEC's website at http://www.sec.gov.
16
STOCKHOLDER PROPOSALS
A shareholder proposal for Global Sports' 2003 Annual Meeting must be
submitted to Global Sports at its office located at 1075 First Avenue, King of
Prussia, Pennsylvania, 19406, by December 30, 2002 to receive consideration for
inclusion in Global Sports' 2003 Annual Meeting proxy materials. Any such
proposal must also comply with the proxy rules under the Exchange Act,
including Rule 14a-8.
In addition, the deadline for providing Global Sports timely notice of any
stockholder proposal to be submitted outside of the Rule 14a-8 process for
consideration at Global Sports' 2003 Annual Meeting is March 15, 2003. As to
all such matters which Global Sports does not have notice on or prior to March
15, 2003, discretionary authority shall be granted to the persons designated in
Global Sports' proxy related to the 2003 Annual Meeting to vote on such
proposal.
ANNUAL REPORT
This Proxy Statement is accompanied by Global Sports' Annual Report to
Stockholders for fiscal 2001 (the "Annual Report").
Global Sports will furnish without charge to each person to whom this proxy
statement is delivered, a copy of any or all of the documents incorporated by
reference in Global Sports' Annual Report on Form 10-K for the fiscal year
ended December 29, 2001, other than exhibits to such documents (unless such
exhibits are specifically incorporated by reference to the information that is
incorporated), upon the written request of such person. Requests should be sent
to:
Global Sports, Inc.
1075 First Avenue
King of Prussia, PA 19406
(610) 265-3229
Attention: Investor Relations
By Order of the Board of Directors,
/s/ Arthur H. Miller
Arthur H. Miller,
Secretary
17
Appendix A
PROPOSED FORM OF CERTIFICATE OF AMENDMENT TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
GLOBAL SPORTS, INC.
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
GLOBAL SPORTS, INC.
Global Sports, Inc., a Delaware corporation (the "Corporation"), does hereby
certify that:
FIRST: This Certificate of Amendment amends provisions of the Corporation's
Amended and Restated Certificate of Incorporation ("Certificate of
Incorporation").
SECOND: The terms and provisions of this Certificate of Amendment have been
duly adopted in accordance with Section 242 of the General Corporation Law
of the State of Delaware and shall become effective at , eastern time,
on , 2002.
THIRD: Article I of the Certificate of Incorporation is hereby amended by
deleting Article I in its entirety and replacing it with the following:
ARTICLE I: The current name of the Corporation is GSI Commerce, Inc. The
name under which the Corporation was originally incorporated was ABE
Corporation, and the date of filing of its original Certificate of
Incorporation with the Secretary of State of the State of Delaware was
September 15, 1985.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to
be signed by its President and Chief Executive Officer on this day of
, 2002.
By:________________________________
Michael G. Rubin,
President and Chief Executive Officer
A-1
PROXY
GLOBAL SPORTS, INC.
Annual Meeting of Stockholders--May 23, 2002
SOLICITED ON BEHALF OF THE COMPANY AND APPROVED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Michael G. Rubin and Kenneth J. Adelberg to
act as attorneys and proxies for the undersigned, with full powers of
substitution, to appear at the Annual Meeting of Stockholders of Global
Sports, Inc. (the "Company") to be held on the 23th day of May, 2002 at the
Radisson Hotel Valley Forge, 1160 First Avenue, King of Prussia, Pennsylvania
19406 and at any postponement or adjournment thereof, and to vote all of the
shares of the Company that the undersigned is entitled to vote, with all the
powers and authority the undersigned would possess if personally present. The
undersigned hereby directs that this proxy be voted as follows:
1. To elect eight directors, each to hold office for one-year terms and until
their successors are elected and qualified. Nominees: Michael G. Rubin,
Kenneth J. Adelberg, M. Jeffrey Branman, Ronald D. Fisher, Harvey Lamm,
Mark S. Menell, Michael S. Perlis and Jeffrey F. Rayport.
FOR the nominees listed WITHHOLD AUTHORITY to
below (except as vote for all nominees
indicated below) [_]
[_]
INSTRUCTION: To withhold authority to vote for any nominee write that
nominee's name in this space: ________________________________________ .
2. To approve the amendment of Global Sports' Certificate of Incorporation to
change Global Sports' name to GSI Commerce, Inc.
[_] FOR [_] AGAINST [_] ABSTAIN
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED "FOR" ELECTION OF ALL NOMINEES FOR DIRECTOR LISTED IN
THE ACCOMPANYING PROXY STATEMENT AND "FOR" APPROVAL OF THE AMENDMENT TO THE
COMPANY'S CERTIFICATE OF INCORPORATION. A MAJORITY OF THE PROXY AGENTS PRESENT
AND ACTING IN PERSON OR BY THEIR SUBSTITUTES (OR IF ONLY ONE IS PRESENT AND
ACTING, THEN THAT ONE) MAY EXERCISE ALL THE POWERS CONFERRED HEREBY.
DISCRETIONARY AUTHORITY IS CONFERRED HEREBY AS TO CERTAIN MATTERS DESCRIBED IN
THE COMPANY'S PROXY STATEMENT.
The Board of Directors recommends a vote "FOR" election of all nominees for
director and "FOR" approval of the amendment to the Company's Certificate of
Incorporation.
(Continued and to be SIGNED on Reverse Side)
(Continued from reverse side)
Should the undersigned be present and choose to vote at the Meeting or at
any adjournments or postponements thereof, and after notification to the
Secretary of the Company at the Meeting of the stockholder's decision to
terminate this proxy, then the power of such attorneys or proxies shall be
deemed terminated and of no further force and effect. This proxy may also be
revoked by filing a written notice of revocation with the Secretary of the
Company or by duly executing a proxy bearing a later date.
Receipt of the Notice of the Annual Meeting and Proxy Statement relating
thereto is hereby acknowledged.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
Dated: ____________________________, 2002
(Please date this Proxy)
_________________________________________________
_________________________________________________
(Signature(s) of Stockholder(s))
Please sign exactly as your name(s) appear(s) to
the left. When signing as attorney, executor,
administrator, trustee or guardian, please give
your full title. If shares are held jointly, each
holder should sign.