SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 7, 2000
GLOBAL SOURCES LIMITED
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(Exact Name of Registrant as Specified in Charter)
Delaware 333-41389 13-4020643
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File No.) Identification No.)
342 Madison Avenue, Suite 1815 New York, New York 10173
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 687-6363
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 21, 2000, Global Sources Limited (the "Company") acquired all
of the issued and outstanding capital stock of Phillips & Chambers Limited, a
United Kingdom company ("Phillips"). Phillips is the holding company of The
McMillan Partnership Limited ("McMillan"), a United Kingdom company that
provides training and development consultancy and services to a wide range of
global clients predominantly in the technology and telecommunications sectors,
including several Fortune and FT 100 companies.
Pursuant to an Agreement dated July 21, 2000 (the "Acquisition
Agreement"), by and among the Company, each of Angela Phillips, Scott Chambers
and Shawn O'Rourke (collectively, the "A Shareholders") and each of Andrew
Maggs, James Lawson and Patrick McGwire (collectively, the "B Shareholders"),
the A Shareholders and B Shareholders received, in proportion to their ownership
interest in Phillips, a total of 1,101,816 and 261,817 shares of the Company's
common stock, par value $0.001 (the "Common Stock"), respectively. The parties
to the Acquisition Agreement valued the total consideration paid by the Company
to have an aggregate value of $3 million.
The Acquisition Agreement also provides for issuance of additional
shares of the Common Stock to the A Shareholders (the "Additional
Consideration") in each of the next three (3) years, commencing June 30, 2001,
based upon Phillips' consolidated earnings before taxes calculated for the
twelve (12) month period ending June 30th of each such year and the average bid
and ask price of the Common Stock. The aggregate value of Common Stock issued as
Additional Consideration over the three year period shall not exceed $5 million.
The Company has agreed to file a registration statement with the
Securities and Exchange Commission to register the shares of Common Stock issued
at the closing. The Company has also agreed to register the shares of Additional
Consideration after their issuance as soon as reasonably practicable.
Under the Acquisition Agreement, the Company assumed the three-year
service agreements (the "Service Agreements") between Phillips and each of Scott
Chambers, Angela Phillips and Shawn O'Rourke (each an "Executive") to oversee
the day-to-day operations, management and control of McMillan. Under the Service
Agreements, each Executive will receive a base salary (being (pound)80,000 for
Scott Chambers and Angela Phillips and (pound)60,000 for Shawn O'Rourke),
certain benefits and bonuses based on specific performance criteria. Each
Service Agreement can be terminated by the Company or the Executive on or after
June 30, 2003 upon three (3) months notice or by the Company at any time for
reasons specified in the Service Agreements. Under the Service Agreements, each
Executive has agreed not to compete with or to solicit the customers of Phillips
or McMillan during or after termination of employment.
In addition, the Company has agreed to invest up to $250,000 as
additional equity capital in Phillips during the next few months.
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This acquisition is the Company's first European acquisition.
The descriptions of the Acquisition Agreement and other agreements
discussed above are qualified in their entirety by reference to such agreements,
which are attached as exhibits and/or incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of the Business Acquired.
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Audited financial statements relating to the acquisition will
be filed by amendment within 60 days of the date this Report was required to be
filed.
(b) Pro Forma Financial Information and Exhibits.
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Pro Forma financial information relating to the acquisition
will be filed by amendment within 60 days of the date this Report was required
to be filed.
(c) Exhibits
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2.1 - Acquisition Agreement dated as of July 21, 2000 by
and among the Company, the A Shareholders and the B
Shareholders.
10.1 - Service Agreement by and between Phillips and
Angela Phillips dated as of July 21, 2000.
10.2 - Service Agreement by and between Phillips and Scott
Chambers dated as of July 21, 2000.
10.3 - Service Agreement by and between Phillips and Shawn
O'Rourke dated as of July 21, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: August 7, 2000
GLOBAL SOURCES LIMITED,
a Delaware Corporation
By: /s/ John Mazzuto
Name: John Mazzuto
Title: President and Chief Financial
Officer
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EXHIBIT INDEX
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Exhibit No. Description
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2.1 Acquisition Agreement dated as of July 21, 2000 by and among
the Company, the A Shareholders and the B Shareholders.
List of Omitted Exhibits and Schedules
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2.2 - Disclosure Letter from the A Shareholders to the Company
3.1 - Articles of Association of Phillips (Registered Number
2658545)
10.1 Service Agreement by and between Phillips and Angela Phillips
dated as of July 21, 2000.
10.2 Service Agreement by and between Phillips and Scott Chambers
dated as of July 21, 2000.
10.3 Service Agreement by and between Phillips and Shawn O'Rourke
dated as of July 21, 2000.
