GTI Opinion Letter Volk

GTI Opinion Letter Volk - Ponzi, Lay, Leeson, Kerviel and...

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Ponzi, Lay, Leeson, Kerviel and Volk LLP 699 Exposition Boulevard, Suite 130 Los Angeles, CA 90089-0071 20 March 2011 Board of Directors and Plan Participants Global Technologies, Inc. 3000 Anywhere Road Los Angeles, CA 90071 Ladies and Gentlemen: This opinion is being delivered pursuant to your request for an independent determination regarding the calculation of sale proceeds from the sale of Global Technologies, Inc. You have waived any conflicts that might exist in order to obtain this opinion from our firm, and it is our understanding that you and the other addressees will rely upon this opinion in calculating the monies to be paid to Participants as defined in Paragraph B and Schedule A (George Washington, CEO; J.P.Morgan, CFO; Daniel Webster, EVP and General Counsel; Jim Collins, EVP for Sales; Oprah Winfrey, SVP for Strategy; and Rip Van Winkle, VP for Operations) pursuant to the Global Technologies, Inc. Transaction Bonus Plan, a term already defined. In connection with our analysis, we have examined the Global Technologies, Inc (“Global Technologies”). Transaction Bonus Plan, as well as such other matters as we have deemed appropriate. CONCLUSION Based upon the foregoing and in light of the analysis hereinafter set forth, it is our opinion that the Transaction Bonus Plan, on its face implies that the proceeds from the sale are two hundred thirty-one million dollars ($231,000,000). DISCUSSION The purpose of the Transaction Bonus Plan was to retain and motivate those key individuals identified in Schedule A of the Plan while Global Technologies solicited offers for a possible sale of the Company. This solicitation began at the behest of the Board which determined that a sale was in the best interest of the Company and its shareholders. To that end, the Board determined that it would materially increase the consideration paid to the Company’s shareholders if certain key employees were incentivized to continue to run and manage the company and maintain the Company’s going concern value. The Parties’ principal area of disagreement concerns the calculation of Net Proceeds under Paragraph F(5). The calculation of Net Proceeds determines the size of the Bonus Pool that is split amongst those key employees named in Schedule A to the agreement. Under
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Paragraph E, “if the amount of Net Proceeds received by the Company…is less than $200,000,000, the Transaction Bonus Pool shall be an amount equal to 0.5% of the Net Proceeds.” However, if the Net proceeds is between $200,000,000 and $225,000,000, the Transaction Bonus Pool rises to 1.0% of Net Proceeds. Finally for the purposes of this
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This note was uploaded on 10/18/2011 for the course LAW 700 taught by Professor Kim during the Spring '10 term at USC.

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GTI Opinion Letter Volk - Ponzi, Lay, Leeson, Kerviel and...

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