UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
(
Mark One)
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ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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FOR
THE FISCAL YEAR ENDED DECEMBER 31,
2008
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OR
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
FOR THE TRANSITION PERIOD FROM
TO
COMMISSION
FILE NUMBER 001-33920
TRIAN
ACQUISITION I CORP.
(Exact
name of registrant as specified in its charter)
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DELAWARE
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26-1252336
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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280
PARK AVENUE
NEW
YORK, NEW YORK 10017
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10017
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(Address
of principal executive offices)
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(Zip
code)
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(212)
451-3000
(Registrant’s
telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
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Title of Each Class:
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Name of Each Exchange on Which
Registered:
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Units,
each consisting of one share of Common Stock and one
Warrant
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NYSE
Alternext US
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Common
Stock, par value $0.0001 per share
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NYSE
Alternext US
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Warrants
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NYSE
Alternext US
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Securities
registered pursuant to Section 12(g) of the Act:
None
(Title of
class)
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes
£
No
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Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes
£
No
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Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes
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No
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Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.
£
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company. See definition of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act. (Check one):
Large
Accelerated Filer
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Accelerated
Filer
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Non-Accelerated
Filer
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Smaller
Reporting Company
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Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes
þ
No
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The
aggregate market value of the voting common stock held by non-affiliates of the
registrant computed by reference to the closing sales price for the registrant’s
common stock on June 30, 2008, as reported on the NYSE Alternext US, was
approximately $851,740,809.
The
number of shares of common stock outstanding as of March 2, 2009 was
115,000,000.
TABLE OF CONTENTS
PART
I
PART
II
PART
III
PART
IV
Cautionary Note Regarding Forward-Looking
Statements
The
statements contained in this Annual Report on Form 10-K, and the information
incorporated by reference, that are not purely historical are forward-looking
statements. Our forward-looking statements include, but are not
limited to, statements regarding our or our management’s expectations, hopes,
beliefs, intentions or strategies regarding the future. In addition,
any statements that refer to projections, forecasts or other characterizations
of future events or circumstances, including any underlying assumptions, are
forward-looking statements. The words “anticipates,” “believe,”
“continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,”
“possible,” “potential,” “predicts,” “project,” “should,” “would” and similar
expressions may identify forward-looking statements, but the absence of these
words does not mean that a statement is not
forward-looking. Forward-looking statements in this Annual Report on
Form 10-K may include, for example, statements about:
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our
ability to consummate our business combination;
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our
success in retaining or recruiting, or changes required in, our officers,
key employees or directors following our business
combination;
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our
officers and directors allocating their time to other businesses and
potentially having conflicts of interest with our business or in approving
our business combination, as a result of which they would then receive
expense reimbursements;
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our
potential ability to obtain additional financing to consummate our
business combination, particularly in light of recent significant
disruptions in the equity and credit markets;
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our
pool of prospective target businesses;
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the
ability of our officers and directors to generate a number of potential
investment opportunities;
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our
public securities’ liquidity and trading;
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the
delisting of our securities from the NYSE Alternext
US
or the ability to have
our securities listed on the NYSE Alternext US or any other securities
exchange following a business combination;
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the
use of proceeds not held in the trust account or available to us from
income on the trust account balance; or
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our
financial performance.
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The
forward-looking statements contained or incorporated by reference in this Annual
Report on Form 10-K are based on our current expectations and beliefs concerning
future developments and their potential effects on us. There can be
no assurance that future developments affecting us will be those that we have
anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond our control) or other assumptions
that may cause actual results or performance to be materially different from
those expressed or implied by these forward-looking statements. These
risks and uncertainties include, but are not limited to, those factors described
under the heading “Item 1A. Risk Factors.” Should one or more of these risks or
uncertainties materialize, or should any of our assumptions prove incorrect,
actual results may vary in material respects from those projected in these
forward-looking statements. We undertake no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required under applicable
securities laws.
References in this Annual Report on
Form 10-K to “we,” “us,” “our,” “company” or “our company” refer to Trian
Acquisition I Corp. References to our “public stockholders” refer to
holders of common stock acquired either as part of the units sold in our initial
public offering or in the after market.
PART
I
Introduction
We are a blank check company formed
under the laws of the State of Delaware on October 16, 2007 for the purpose
of effecting a merger, capital stock exchange, asset acquisition, stock
purchase, reorganization or similar business combination with one or more
domestic or international operating businesses or assets, which we refer to as
our business combination. Our efforts in identifying prospective
target businesses are not limited to a particular industry or group of
industries.
A
registration statement for our initial public offering was declared effective on
January 23, 2008. On January 29, 2008, we completed our
initial public offering of 92,000,000 units (including 12,000,000 units
purchased pursuant to the underwriters’ over-allotment option) at an offering
price of $10.00 per unit. Each unit consists of one share of common
stock and one warrant to purchase an additional share of common stock at a price
of $7.00 commencing on the later of the consummation of our business combination
and January 23, 2009, provided that we have an effective registration
statement covering the common stock issuable upon exercise of the warrants and a
current prospectus is available. The warrants expire on
January 23, 2013, unless earlier redeemed. In addition, our
sponsor, Trian Acquisition I, LLC, purchased 10,000,000 warrants, which we refer
to as the sponsor warrants, at a price of $1.00 per warrant ($10 million in the
aggregate) in a private placement that occurred immediately prior to the
consummation of our initial public offering.
We
received net proceeds of approximately $905.6 million from our initial public
offering (including proceeds from the exercise by the underwriters of their
over-allotment option) and the sale of the sponsor warrants. Of these
net proceeds, approximately $29.8 million is attributable to the portion of the
underwriters’ discount that has been deferred until the consummation of our
business combination. The net proceeds were deposited into a trust
account and will be part of the funds distributed to our public stockholders in
the event we are unable to consummate a business combination. Unless
and until our business combination is consummated, the proceeds held in the
trust account will not be available to us (except for certain amounts available
to fund tax liabilities and working capital requirements). For a more
complete discussion of our financial information, see “Item
6. Selected Financial Data.”
In
connection with our initial public offering, Trian Fund Management, L.P., an
affiliate of our sponsor, has agreed that it will, or it will cause one of its
affiliates or the funds and accounts managed by it or its affiliates, to place
limit orders to purchase up to $75 million of our common stock, at a price equal
to or below the per-share value of the trust account at that time, commencing
two business days after we file a preliminary proxy statement relating to our
business combination and ending on the business day immediately preceding the
record date for the meeting of stockholders at which such business combination
is to be approved. Any portion of the $75 million not used for open
market purchases will be applied to the purchase of units from the company, at a
price of $10.00 per unit, immediately prior to the consummation of our business
combination. We refer to the foregoing as the Trian Fund Management,
L.P. purchase commitment and to any such units purchased from the company as the
co-investment units.
Business
Strategy
We seek
to capitalize on the substantial investing and operating expertise of our
management team. Led by Nelson Peltz, Peter W. May and Edward P.
Garden, our management team has extensive experience investing in, owning and
operating businesses across many sectors, including the consumer, industrial and
financial services sectors. Our management team has generated
attractive investment returns for over 35 years through its operations-centric
investment strategy that targets fundamentally strong companies that have been
mismanaged or undermanaged and creates value at those companies primarily by
increasing profitability. This strategy seeks to execute strategic
and operational initiatives that will result in higher sales, lower expenses and
enhanced free cash flow. Though the strategy does not primarily rely
on leverage or other balance sheet opportunities, we also seek to enhance value
through optimization of a target company’s capital structure, including
adjusting a company’s leverage to levels that we think are more
efficient. Consistent with this strategy, we have identified the
following general criteria and guidelines that we believe are important in
evaluating prospective target businesses. We use these criteria and
guidelines in evaluating acquisition opportunities, but we may decide to enter
into a business combination with a target business that does not meet these
criteria and guidelines.
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Companies
with fundamentally strong businesses that have been mismanaged or
undermanaged.
We seek to acquire a company with a
fundamentally strong business that has been mismanaged or
undermanaged. For example, we typically focus on companies that
have a leading or niche market position and that demonstrate advantages
when compared to their competitors, which may help to protect their market
position and profitability and deliver strong free cash
flow. We analyze the strengths and weaknesses of target
businesses relative to their competitors, focusing on product quality,
customer loyalty, strength of intellectual property and brand
positioning. We seek to acquire a business that operates within
an industry that has strong fundamentals, looking at factors such as
growth prospects, competitive dynamics, level of consolidation, need for
capital investment and barriers to entry. We typically focus on
established businesses in industries that we understand
well. We do not intend to acquire start-up
companies.
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Companies
with potential for increased profitability.
We seek to
acquire a company that has the potential to significantly improve
profitability through fundamental operational
improvements.
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Increased
sales.
We seek a company with opportunities to increase
sales through, among other things, investing in brand development,
adopting innovative marketing practices, repositioning products to attract
new customers, optimizing global expansion opportunities, improving
product pricing, accelerating the introduction of new products and making
strategic acquisitions.
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Reduced
expenses.
We seek a company with the potential to reduce
expenses through, among other things, refocusing on core competencies,
eliminating unnecessary bureaucracy, enhancing management of inventory,
accounts receivable and supply chains, investing in technology and exiting
non-core businesses.
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Companies
with potential for strong free cash flow generation.
We
seek to acquire a company that has the potential to generate strong and
stable free cash flow. We typically focus on companies that
have predictable, recurring revenue streams and low working capital and
capital expenditure requirements. We also seek to prudently
leverage this cash flow in order to enhance shareholder
value.
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Competitive
Strengths
We
believe we have the following competitive strengths:
Operating
expertise
We expect
to utilize the significant operating expertise of our management team to
identify, acquire and operate a business whose operations can be fundamentally
improved and where there are opportunities for increased
profitability. In addition, we believe that the experience of our
management team may provide us with opportunities to recruit highly qualified
executives with whom they have worked in the past to join the management of the
operating business we acquire.
Our
management team has substantial experience owning and operating successful
businesses across many sectors. Nelson Peltz and Peter W.
May have been business partners for more than 35 years, during which time
they have created significant value as owners and day-to-day operators of both
small and large capitalization companies. Their successful track
record historically was built utilizing a combination of their personal assets
and capital raised through controlled public holding companies such as Triarc
Companies, Inc. (which recently changed its name to Wendy’s/Arby’s Group, Inc.
following its acquisition of Wendy’s International, Inc.). Their
landmark investments include: Triangle Industries, Inc. (which acquired National
Can Corporation and the packaging business of American Can Company to become one
of the world’s largest packaging companies and a Fortune 100 industrial
company); Snapple Beverage Group, Inc. (Snapple was purchased by Triarc in 1997
for $300 million and the beverage group was sold by Triarc in 2000 for
approximately $1.5 billion); and Wendy’s International, Inc. and Arby’s
Restaurant Group, Inc. (which are owned by Wendy’s/Arby’s
Group). Edward P. Garden joined Mr. Peltz and Mr. May at Triarc
in August 2003 and was named Vice Chairman and a director of Triarc in
December 2004. In addition to operating experience, Mr. Garden
brought to Triarc an extensive Wall Street background in finance and the capital
markets.
In
November 2005, Mr. Peltz, Mr. May and Mr. Garden launched Trian Fund
Management, L.P., an investment management firm that we refer to, together with
the funds and accounts it and its affiliates manage, as Trian
Partners. To date, Trian Partners has focused on utilizing its
successful operations-centric investment strategy to make non-control
investments in underperforming public companies. Trian Partners seeks
to become a significant shareholder in fundamentally good businesses that have
been mismanaged or undermanaged and create long-term value by working with
management teams and boards of directors principally to build the income
statement. By utilizing a constructive, hands-on approach in working
with management that is based on thorough and thoughtful analysis, extensive due
diligence, and a deep understanding of the underlying business, Trian Partners
believes it has developed a reputation as a positive change agent and achieved
significant credibility with boards, management teams and institutional
investors. Notable investments of Trian Partners include: Cadbury
plc, H. J. Heinz Company, Kraft Foods Inc., Tiffany & Co., Dr Pepper Snapple
Group, Inc. and Wendy’s/Arby’s Group, Inc.
Prior to
making its investments, Trian Partners typically develops a highly detailed
action plan (or “white paper”) that sets forth operational initiatives aimed at
increasing sales, reducing expenses and maximizing free cash
flow. The action plans also address capital structure efficiency and
strategic redirection. In the case of Wendy’s, the principal focus of
Trian Partners’ action plan was a substantial improvement in operating margins
at Wendy’s Old Fashioned Hamburger restaurants owned and operated by Wendy’s,
which Trian Partners believed were less than half those of its peer group and
some of its franchisees. The action plan called for a reduction in
costs by approximately $200 million. And in the case of Heinz, Trian
Partners’ action plan called for: significantly reducing annual costs, which had
been growing faster than sales; focusing on consumer marketing and innovation,
rather than competing on price, by reinvesting dollars otherwise spent on deals,
allowances and other trade spending to retailers; increasing focus on key brands
and geographies; and implementing a more efficient capital
structure. Trian Partners currently has representatives on each of
these companies’ boards of directors and continues to work to increase
shareholder value.
As
further detailed below, we believe that our access to the experience,
capabilities and infrastructure of Trian Partners will enable us to generate
proprietary deal flow opportunities, evaluate potential business combination
opportunities in a thoughtful and methodical fashion and structure a successful
business combination transaction. Trian Partners currently has more
than 35 employees, including 16 investment professionals that have extensive
operating, investment, mergers and acquisitions, legal, financing,
restructuring, tax and accounting experience.
Unique
platform for deal generation
We
believe that the involvement of Mr. Peltz, Mr. May and Mr. Garden in the
investment activities of Trian Partners may result in proprietary deal flow
opportunities for us because Trian Partners does not typically seek to acquire
majority ownership of operating companies. Trian Partners will
typically seek to become one of the largest shareholders and work proactively
with management and the board of directors to effect positive operational
change, and in many cases, a member of the firm will join the
board. In these situations, Trian Partners’ position and competitive
advantage could lead to proprietary deal flow opportunities for our company,
particularly in a case where a company in which Trian Partners has invested is
seeking to divest a non-core asset because Trian Partners does not typically
acquire majority ownership of operating businesses. In addition,
through its involvement with Trian Partners, we expect that our management team
will be able to stay close to trends and developments in various industries and,
although there may not be immediate acquisition opportunities, we believe this
will allow us to be opportunistic in pursuing our business
combination.
In
addition to their involvement in Trian Partners, over the course of their
careers, Mr. Peltz, Mr. May and Mr. Garden have developed a diverse network
of operational and transactional relationships that have generated a significant
flow of investment opportunities, many of which are
proprietary. These relationships include an extensive array of
industry experts, consultants, investment banks, law firms, institutional
investors, investment funds, financial sponsors and entrepreneurs.
We
believe that we will receive a number of proprietary deal flow opportunities
that would not otherwise necessarily be available to us as a result of our
management’s involvement with Trian Partners as well as the track record and
business relationships it has developed over time. However, we can
make no assurances that our relationship with Trian Partners or our other
business relationships will result in opportunities to acquire a target
business.
Intense focus on due diligence that
seeks to identify key value drivers and significant risks
Our
management team employs an exhaustive operations-centric due diligence process
that has been developed throughout its many years of investing experience, most
recently at Trian Partners. For example, this experience has given
our management team insight and knowledge on such key issues as valuations,
appropriate capital structures, strategic vision and capabilities of an
acquisition target’s management team. As a result, we believe that
this provides us with certain analytical advantages and insights as we evaluate
potential business combination opportunities. During the due
diligence phase, our management team will carefully evaluate prospective
business targets to uncover key issues that will drive value or, as importantly,
pose a significant risk (such as contingent liabilities, pension matters and
environmental issues). We believe our management team’s deep and
diverse set of skills in management, operations and corporate finance, together
with our access to the extensive mergers and acquisitions, legal, financing,
restructuring, tax and accounting experience of Trian Partners’ investment
professionals, will enable us to avoid potential risks that other investors may
not identify.
The due
diligence process will begin with an initial evaluation of the target company’s
business, management, risks and potential opportunities. After we
reach an internal consensus to proceed, the review process will include
extensive meetings with several levels of management, a detailed analysis of
historical and projected financial statements and strategic plans, visits to key
facilities and interviews with customers, suppliers and
competitors. As the due diligence process proceeds, our management
team will identify a prioritized set of operational, financial and strategic
improvements that will form the basis for an action plan, that, when
implemented, will create improved and sustained growth and profit
enhancements.
We
believe this time-tested due diligence methodology will not only help us to
identify key value drivers and potential growth opportunities, but will also
enable us to avoid potential risks that other investors may not
identify.
Transaction
structuring
Another
distinguishing feature that we believe provides a competitive advantage is the
manner in which we approach transaction structuring. Our goal is to
structure a transaction that addresses a target company’s strategic and
operating objectives while at the same time creating an attractive risk-return
proposition for our company and its shareholders. When we identify
potential investment opportunities, we will work closely with the target’s
management to understand its objectives. We will then seek to design
a transaction structure that balances the achievement of these objectives with
the need to minimize risks associated with the potential transaction as well as
implement the operational and other initiatives identified in our action
plan. We will consider a variety of factors, including capital
structure, valuation, contractual rights, regulatory issues, management
alignment and incentive compensation structures, to accomplish these
objectives. We believe our management team’s extensive mergers and
acquisitions, legal, tax and accounting experience will help enable us to
structure a successful business combination.
Status as a public
company
We
believe our structure will make us an attractive business combination partner to
target businesses that are not public companies (although we have the
flexibility to acquire a public company). As an existing public
company, we offer a target business that is not itself a public company an
alternative to the traditional initial public offering through a merger or other
business combination. In this situation, the owners of the target
business would exchange their shares of stock in the target business for shares
of our stock or for a combination of shares of our stock and cash, allowing us
to tailor the consideration to the specific needs of the
sellers. Although there are various costs and obligations associated
with being a public company, we believe non-public target businesses will find
this method a more certain and cost effective method to becoming a public
company than the typical initial public offering. In a typical
initial public offering, there are additional expenses incurred in marketing,
road show and public reporting efforts that will likely not be present to the
same extent in connection with a business combination with us.
Financial position
With
funds available in the amount of approximately $880.9 million as of December 31,
2008, we offer a target business a variety of options such as creating a
liquidity event for its owners, providing capital for the potential growth and
expansion of its operations and strengthening its balance sheet by reducing its
debt ratio. Because we are able to consummate a business combination
using our cash, debt or equity securities, or a combination of the foregoing, we
should have the flexibility to use the most efficient combination that will
allow us to tailor the consideration to be paid to the target business to fit
its needs and desires. However, we have not taken any steps to secure
third party financing and there can be no assurance it will be available to
us.
Effecting
our Business Combination
General
We are
not presently engaged in any operations, and we will not engage in any
operations unless and until we consummate our business
combination. We intend to utilize the cash proceeds of our initial
public offering and the private placement of the sponsor warrants, our capital
stock, debt or a combination of these as the consideration to be paid in our
business combination. Although we have allocated substantially all of
the net proceeds of our initial public offering for the purpose of consummating
our business combination, the proceeds are not otherwise designated for more
specific purposes. Accordingly, there is no current basis for
stockholders to evaluate the specific merits or risks of a target
business. If our business combination is paid for using our capital
stock or debt securities or with proceeds that are less than those in the trust
account, we may apply the remaining cash released to us from the trust account
for general corporate purposes, including for maintenance or expansion of
operations of acquired businesses, the payment of principal or interest due on
indebtedness incurred in consummating our business combination, to fund the
purchase of other companies or for working capital. In addition,
because we may issue voting securities in connection with a transaction, it is
possible that our stockholders immediately prior to our business combination
will not hold a majority of the voting equity interests of the surviving company
after giving effect to the business combination.
We are
currently in the process of identifying and evaluating targets for our business
combination. We have not entered into any definitive business
combination agreement.
Subject
to the requirements that our business combination have a fair market value of at
least 80% of our net assets held in trust (net of taxes and amounts disbursed to
us for working capital purposes and excluding the amount of the underwriters’
deferred discount held in trust) at the time of the business combination, and
that we acquire a controlling interest in the target company (either through the
acquisition of a majority of the voting equity interests in the target or
through other means), we have virtually unrestricted flexibility in identifying
and selecting one or more prospective target businesses. Accordingly,
there is no current basis for stockholders to evaluate the possible merits or
risks of the target business with which we may ultimately consummate our
business combination. Although our management will assess the risks
inherent in a particular target business with which we may enter into a business
combination, we cannot assure you that this assessment will result in our
identifying all risks that a target business may
encounter. Furthermore, some of those risks may be outside of our
control, meaning that we can do nothing to control or reduce the chances that
those risks will adversely impact a target business.
Waiver of claims and Trian Fund
Management, L.P. liability for certain claims
Prior to
consummation of our business combination, we will seek to have all vendors,
prospective target businesses or other entities, which we refer to as potential
contracted parties or a potential contracted party, that we engage, execute
agreements with us waiving any right, title, interest or claim of any kind in or
to any monies held in the trust account for the benefit of our public
stockholders. There is no guarantee that potential contracted parties
will execute such waivers, or even if they execute such waivers that they would
be prevented from bringing claims against the trust account, including but not
limited to fraudulent inducement, breach of fiduciary responsibility and other
similar claims, as well as claims challenging the enforceability of the waiver,
in each case in order to seek recourse against our assets, including the funds
held in the trust account. Further, we could be subject to claims
from parties not in contract with us who have not executed a waiver, such as a
third party claiming tortious interference as a result of our business
combination. If a potential contracted party refuses to execute such
a waiver, then Trian Fund Management, L.P. has agreed to cover the potential
claims made by such party for services rendered and goods sold to the extent we
do not have working capital outside the trust account (including amounts
available for release) sufficient to cover such claims. However,
Trian Fund Management, L.P.’s obligation does not apply to any claims under our
indemnity of the underwriters of our initial public offering against certain
liabilities, including liabilities under the Securities Act. In the
event that Trian Fund Management, L.P. did not comply with its indemnity
obligation, we believe that we would have an obligation to seek enforcement of
the obligation and that our board of directors would have a fiduciary duty to
seek enforcement of such obligation on our behalf. We cannot assure
you that Trian Fund Management, L.P., which is a privately held limited
partnership without publicly disclosed financial statements, will have
sufficient assets to satisfy those obligations. As a result, the
steps outlined above may not effectively mitigate the risk of creditors’ claims
reducing the amounts in the trust account.
Sources of target
businesses
In
addition to the potential sources of target businesses described above under
“
—
Competitive
Strengths
—
Unique platform
for deal generation,” we anticipate that target business candidates will be
brought to our attention from various unaffiliated sources, including investment
bankers, venture capital funds, private equity funds, leveraged buyout funds,
management buyout funds and other members of the financial
community. Target businesses may be brought to our attention by such
unaffiliated sources as a result of being solicited by us. These
sources may also introduce us to target businesses they think we may be
interested in on an unsolicited basis, since many of these sources will have
read this report and know what types of businesses we are
targeting.
While we
do not presently anticipate engaging the services of professional firms or other
individuals that specialize in business acquisitions on any formal basis, we may
engage these firms or other individuals in the future, in which event we may pay
a finder’s fee, consulting fee or other compensation to be determined in an
arm’s length negotiation based on the terms of the transaction.
We will
engage a finder only to the extent our management determines that the use of a
finder may bring opportunities to us that may not otherwise be available to us
or if finders approach us on an unsolicited basis with a potential transaction
that our management determines is in our best interest to
pursue. Payment of finder’s fees is customarily tied to completion of
a transaction, in which case any such fee will be paid out of the funds held in
the trust account. In no event, however, will our sponsor or any of
our existing officers or directors, or any entity with which they are
affiliated, be paid any finder’s fee, consulting fee or other compensation prior
to, or for any services they render in order to effectuate, the consummation of
our business combination (regardless of the type of transaction that it is),
other than (i) the reimbursement of out-of-pocket expenses, (ii) a
$10,000 monthly fee to Trian Fund Management, L.P. in exchange for office space
and administrative services and (iii) by virtue of their ownership of
sponsor units, sponsor warrants, securities purchased in the after market or any
securities included in or issuable upon exercise of such
securities. Although some of our officers and directors may enter
into employment or consulting agreements with the acquired business following
our business combination, the presence or absence of any such arrangements is
not used as a criteria in our selection process of an acquisition
candidate.
Selection of a target business and
structuring of our business combination
Subject
to the requirement that our business combination have a fair market value of at
least 80% of our net assets held in trust (net of taxes and amounts disbursed to
us for working capital purposes and excluding the amount of the underwriters’
deferred discount held in trust) at the time of the business combination, we
have virtually unrestricted flexibility in identifying and selecting one or more
prospective target businesses. In addition, we will not consummate a
business combination unless we acquire a controlling interest in the target
company. We will acquire a controlling interest either through the
acquisition of a majority of the voting equity interests in the target or
through the acquisition of a significant voting equity interest that enables us
to exercise a greater degree of control over the target than any other equity
holder. In the event we acquire less than a majority of the voting
equity interests in the target, we may seek an even greater degree of control
through contractual arrangements with the target and/or other target equity
holders, or through special rights associated with the target equity security
that we hold, which arrangements or rights may grant us the ability, among other
things, to appoint certain members of the board (or equivalent governing body)
or management of the target or the ability to approve certain types of
significant transactions that the target may seek to enter into.
We have
not established any specific attributes or criteria (financial or otherwise) for
prospective target businesses, other than the general guidelines set forth under
“—Business Strategy” above. Consistent with our operations-centric
investment strategy, our management may consider a variety of factors in
evaluating a prospective target business, including one or more of the
following:
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results
of operations and potential for increased profitability and
growth;
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brand
recognition and potential;
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size,
secular growth rate, and strategic fundamentals of the target business’
industry;
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competitive
dynamics including barriers to entry, future competitive threats and the
target business’ competitive
position;
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product
positioning and life cycle;
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development
of detailed projections, quantification of sensitivity of drivers of
growth and profit enhancement;
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attractiveness
of the target business’ cash flow generation capability and return on
capital employed;
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reasonableness
of the valuation with a particular focus on the multiple of free cash
flow;
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quality
and depth of the management team as it relates to current company
operations, as well as the envisioned company in the
future;
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existing
distribution arrangements and the potential for
expansion;
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proprietary
aspects of products and the extent of intellectual property or other
protection for products or
formulas;
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regulatory
environment of the industry;
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costs
associated with effecting the business combination;
and
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industry
leadership, sustainability of market share and attractiveness of market
sectors in which target business
participates.
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These
criteria are not intended to be exhaustive. Any evaluation relating
to the merits of a particular business combination may be based, to the extent
relevant, on the above factors as well as other considerations our management
deems relevant to our business objective. In evaluating a prospective
target business, we expect to conduct an extensive due diligence review that
will encompass, among other things, meetings with incumbent management and
employees, document reviews, interviews of customers and suppliers, inspection
of facilities, as well as review of financial and other information that will be
made available to us.
The time
required to select and evaluate a target business and to structure and
consummate our business combination, and the costs associated with this process,
are not currently ascertainable with any degree of certainty. Any
costs incurred with respect to the identification and evaluation of a
prospective target business with which a business combination is not ultimately
consummated will result in our incurring losses and will reduce the funds we can
use to consummate another business combination.
If we
determine to simultaneously acquire several businesses and such businesses are
owned by different sellers, we will need for each of such sellers to agree that
our purchase of its business is contingent on the simultaneous closings of the
other acquisitions, which may make it more difficult for us, and delay our
ability, to consummate the business combination. With multiple
acquisitions, we could also face additional risks, including additional burdens
and costs with respect to possible multiple negotiations and due diligence
investigations (if there are multiple sellers) and the additional risks
associated with the subsequent assimilation of the operations and services or
products of the acquired companies in a single operating business.
Fair market value of target business or businesses
Our
business combination must occur with one or more target businesses that have a
collective fair market value of at least 80% of our net assets held in trust
(net of taxes and amounts disbursed to us for working capital purposes and
excluding the amount of the underwriters’ deferred discount held in trust) at
the time of such business combination. Our board of directors will
determine the fair market value based on standards generally accepted by the
financial community, such as discounted cash flow valuation or value of
comparable businesses. If our board of directors is not able to
independently determine the fair market value of our business combination, we
will obtain an opinion from an unaffiliated, independent investment banking firm
that is subject to oversight by the Financial Industry Regulatory Authority as
to the fair market value. We will seek to have any such opinion
provide that our stockholders would be entitled to rely upon such
opinion. The willingness of an investment banking firm to provide for
such reliance would be a factor considered by us in selecting an independent
investment banking firm. If no opinion is obtained, our public
stockholders will be relying solely on the judgment of our board of
directors.
If we
acquire less than 100% of the equity interests or assets of a target business or
businesses, the portion of such business or businesses that we acquire is what
will be valued for purposes of the 80% of net assets test.
Lack of business diversification
For an
indefinite period of time after consummation of our business combination, the
prospects for our success may depend entirely on the future performance of a
single business. Unlike other entities that have the resources to
consummate business combinations with multiple entities in one or several
industries, it is probable that we will not have the resources to diversify our
operations and mitigate the risks of being in a single line of
business. By consummating a business combination with only a single
entity, our lack of diversification may:
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subject
us to negative economic, competitive and regulatory developments, any or
all of which may have a substantial adverse impact on the particular
industry in which we operate after our business combination,
and
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cause
us to depend on the marketing and sale of a single product or limited
number of products or services.
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Limited ability to evaluate the target’s management team
Although
we intend to closely scrutinize the management of a prospective target business
when evaluating the desirability of effecting a business combination with that
business, we cannot assure you that our assessment of the target business’
management will prove to be correct. In addition, we cannot assure
you that the future management will have the necessary skills, qualifications or
abilities to manage a public company. Furthermore, the future role of
members of our management team, if any, in the target business cannot presently
be stated with any certainty. While it is possible that one or more
of our officers and/or directors will remain associated in some capacity with us
following a business combination, it is unlikely that any of them will devote
their full efforts to our affairs subsequent to a business
combination. The determination as to whether and in what capacity any
of our key personnel will remain with the combined company will be made at the
time of our business combination. Moreover, we cannot assure you that
members of our management team will have significant experience or knowledge
relating to the operations of the particular target business.
Following
a business combination, we may seek to recruit additional managers to supplement
the incumbent management of the target business. We cannot assure you
that we will have the ability to recruit additional managers, or that additional
managers will have the requisite skills, knowledge or experience necessary to
enhance the incumbent management.
Stockholder approval of our business combination
Pursuant
to our amended and restated certificate of incorporation, we will seek
stockholder approval before we effect our business combination, even if the
nature of the acquisition would not ordinarily require stockholder approval
under applicable state law. In connection with our business
combination, we will also seek stockholder approval for a proposal to amend our
amended and restated certificate of incorporation to provide for our corporate
life to continue perpetually following the consummation of such business
combination. Any vote to extend our corporate life to continue
perpetually following the consummation of our business combination will be taken
only if such business combination is approved.
We will
only proceed with our business combination if:
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the
business combination is approved by a majority of votes cast by our public
stockholders at a duly held stockholders
meeting,
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an
amendment to our amended and restated certificate of incorporation to
provide for our perpetual existence is approved by a holders of a majority
of our outstanding shares of common stock,
and
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conversion
rights have been exercised with respect to less than 40% of the shares of
common stock issued in our initial public offering, on a cumulative basis
(including the shares as to which conversion rights were exercised in
connection with (i) a stockholder vote, if any, to approve an
extension of the time period within which we must consummate our business
combination and (ii) the stockholder vote to approve our business
combination).
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In
connection with seeking the approval of our stockholders for any business
combination, we will furnish our stockholders with proxy solicitation materials
prepared in accordance with the Exchange Act, which, among other things, will
include a description of the operations of target candidates and audited
historical financial statements of the target candidates.
It is our
understanding and intention in every case to structure and consummate a business
combination in which approximately 39.99% of the public stockholders may
exercise their conversion rights and the business combination will still go
forward. Although this threshold level increases the likelihood of an
approval of any proposed business combination by making it easier for us to
consummate a business combination with which public stockholders may not agree,
it also entails certain risks described under “Item 1A. Risk
Factors—Risks Relating to Our Structure as a Development Stage
Company.” Voting against the proposed business combination alone will
not result in conversion of a stockholder’s shares of common stock into a pro
rata share of the trust account. Such stockholder must also exercise
its conversion rights described below.
In
connection with the vote required for approving our business combination, our
sponsor, our officers and directors, and our other stockholders who owned shares
of our common stock prior to our initial public offering, which we refer to as
our non-public stockholders, have agreed, and their permitted transferees will
agree, to vote the shares of common stock included in the units purchased by our
sponsor prior to our initial public offering, which we refer to as the sponsor
units, in accordance with the majority of the shares of common stock voted by
the public stockholders. Our sponsor, our officers and directors and
our other non-public stockholders have also agreed, and their permitted
transferees will agree, that they will vote all such shares in favor of the
amendment to our amended and restated certificate of incorporation to provide
for our perpetual existence in connection with a vote to approve our business
combination. In addition, Trian Fund Management, L.P. has agreed to
vote or cause to be voted all shares of common stock purchased in the open
market pursuant to its purchase commitment in favor of our business combination
and in favor of the amendment providing for our perpetual
existence.
If a vote
on our business combination is held and the conditions to proceeding with a
business combination are not satisfied, we may continue to try to consummate our
business combination until January 23, 2010 (the date that is 24 months
from the date of the prospectus relating to our initial public offering), or up
to July 23, 2010 (30 months from the date of such prospectus) if our
stockholders approve an extension.
Upon the
consummation of our business combination, unless required by Delaware law, the
federal securities laws and the rules and regulations promulgated thereunder, or
the rules and regulations of an exchange upon which our securities are listed,
we do not presently intend to seek stockholder approval for any subsequent
mergers, acquisitions or similar transactions.
Extension of time to complete a business combination to up to 30
months
We have
until January 23, 2010 (a period of 24 months from the date of the
prospectus relating to our initial public offering) to effect our business
combination. However, if we have entered into a definitive agreement
by January 23, 2010, we may, prior to such date, call a meeting of our
stockholders for the purpose of soliciting their approval to amend our amended
and restated certificate of incorporation to extend the date before which we
must complete our business combination by up to an additional six months to
avoid being required to liquidate. If the extended date is approved
by holders of a majority of our outstanding shares of common stock, we would
have until up to July 23, 2010 (which is 30 months from the date of the
prospectus relating to our initial public offering) to complete a business
combination. In connection with seeking stockholder approval for the
extended period, we will furnish our stockholders with proxy solicitation
materials prepared in accordance with the Exchange Act.
If
holders of a majority of our outstanding shares of common stock vote against the
proposed extension to up to 30 months, or if holders of 40% or more of the
shares sold in our initial public offering vote against the proposed extension
to up to 30 months and elect to convert their shares into a pro rata share of
the trust account, we will not extend the date before which we must complete our
business combination beyond 24 months. In such event, if we cannot
complete the business combination within such 24 month period, we will be
required to liquidate, with the amount remaining in the trust account returned
to all public stockholders.
In
connection with the vote required for the extension to up to 30 months, our
sponsor, our officers and directors and our other non-public stockholders have
agreed, and their permitted transferees will agree, to vote the shares of common
stock included in the sponsor units in accordance with the majority of votes
cast by our public stockholders. In addition, Trian Fund Management,
L.P. has agreed to vote or cause to be voted all shares of common stock
purchased in the open market pursuant to its purchase commitment in favor of any
such extension of our corporate existence to up to 30 months.
If the
proposal for the extension to up to 30 months is approved, we will still be
required to seek stockholder approval before effecting our business combination,
even if the business combination would not ordinarily require stockholder
approval under applicable law.
If at the
end of the extension period we have not effected our business combination, our
corporate existence will automatically cease without the need for a stockholder
vote and we will liquidate.
Conversion rights
Pursuant
to our amended and restated certificate of incorporation, at the time we seek
stockholder approval of our business combination, each public stockholder voting
against a business combination will have the right to convert its shares of
common stock into a pro rata share of the aggregate amount then on deposit in
the trust account and legally available for distribution, including both income
earned on the trust account and the deferred underwriting discount (net of taxes
payable and the amount permitted to be disbursed to us for working capital
purposes), provided that our business combination is approved and
consummated. In addition, any stockholders voting against a proposed
extension of the time period within which we must complete our business
combination will be eligible to convert their shares into a pro rata share of
the trust account if we effect the extension. Under Delaware law, a
corporation generally may only purchase or redeem its own shares of capital
stock when the capital of the corporation is not impaired and when the purchase
or redemption would not cause the capital of the corporation to be
impaired. Our capital is equal to the aggregate par value of our
outstanding shares of common stock. Capital is impaired when the net
assets of the corporation (the amount by which total assets exceed total
liabilities) do not exceed the capital of the corporation.
Our
sponsor, our officers and directors, our other non-public stockholders and their
permitted transferees will not have such conversion rights with respect to the
common stock included in the sponsor units. In addition, any entities
that participate in the Trian Fund Management, L.P. purchase commitment are not
permitted to exercise conversion rights with respect to any shares of common
stock purchased in the open market pursuant to the purchase
commitment.
The
actual per-share conversion price as of December 31, 2008 was approximately
$9.90 (including the income earned through such date on the proceeds in the
trust account in excess of the amount permitted to be disbursed to us for
working capital purposes, net of taxes payable on such income and trust account
expenses incurred through such date). As this amount is lower than
the $10.00 per unit initial public offering price and it may be less than the
market price of the common stock on the date of repurchase, there may be a
disincentive on the part of public stockholders to exercise their conversion
rights.
Notwithstanding
the foregoing, a public stockholder, together with any affiliate of his or any
other person with whom he is acting as a “group” (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) will be restricted from
seeking conversion rights with respect to more than 10% of the shares of common
stock included in the units sold in our initial public offering, on a cumulative
basis, which includes any exercise of conversion rights in connection with
either the stockholder vote, if any, required to approve an extension of the
time period within which we must complete our business combination or the
stockholder vote required to approve our business combination. Shares
converted in connection with the vote on an extension of the time period within
which we must complete our business combination and in connection with the vote
on the business combination will be aggregated for purposes of this 10%
limit. Such a public stockholder would still be entitled to vote
against an extension or a proposed business combination with respect to all
shares owned by him or his affiliates. We believe this restriction
will deter stockholders from accumulating large blocks of stock before the vote
held to approve an extension or a proposed business combination and prevent an
attempt to use the conversion right as a means to force us or our management to
purchase their stock at a premium to the then current market
price. For example, absent this provision, a public stockholder who
owns 15% of the shares included in the units sold in our initial public offering
could threaten to vote against an extension or a proposed business combination
and seek conversion, regardless of the merits of the transaction, if his shares
are not purchased by us or our management at a premium to the then current
market price (or if our sponsor or management refuses to transfer to him some of
their shares). By limiting a stockholder’s ability to convert only
10% of the shares included in the units sold in our initial public offering, we
believe we have limited the ability of a small group of stockholders to
unreasonably attempt to block a transaction that is favored by our other public
stockholders. However, we are not restricting the stockholders’
ability to vote all of their shares against the transaction or against an
extension.
An
eligible public stockholder may request conversion of its shares at any time
after the mailing to our stockholders of the proxy statement and prior to the
vote taken with respect to a proposed business combination or an extension of
the time period within which we must complete our business combination at a
meeting held for that purpose, but the request will not be granted unless the
stockholder votes against our business combination or an extension, our business
combination is approved and consummated or the extension is approved, the
stockholder holds its shares through the closing of our business combination or
the date of the approval of the extension and the stockholder follows the
specific procedures for conversion that will be set forth in the proxy statement
relating to the stockholder vote. It is anticipated that the funds to
be distributed to public stockholders who elect conversion will be distributed
within three business days after consummation of our business combination or the
approval of an extension of the time period within which we must complete our
business combination, as applicable. Public stockholders who exercise
their conversion rights will still have the right to exercise any warrants they
may hold. Any request for conversion, once made, may be withdrawn at
any time up to the date of the meeting of stockholders being held for the
purpose of approving the business combination or the extension.
We view
the right to seek conversion as an obligation to our stockholders and will not
take any action to amend or waive this provision in our amended and restated
certificate of incorporation without the affirmative vote of holders of at least
95% of our outstanding shares of common stock.
Dissolution and liquidation if no business combination is
consummated
Our
amended and restated certificate of incorporation provides that our corporate
existence will automatically cease on January 23, 2010 (the date that is 24
months from the date of the prospectus relating to our initial public offering),
or up to July 23, 2010 (30 months from the date of such prospectus) if our
stockholders approve an extension, except for the purposes of winding up our
affairs and liquidating pursuant to Section 278 of the Delaware General
Corporation Law. This has the same effect as if our board of
directors and stockholders had formally voted to approve our dissolution
pursuant to Section 275 of the Delaware General Corporation
Law. We view this provision terminating our corporate life by
January 23, 2010 (the date that is 24 months from the date of the
prospectus relating to our initial public offering), or up to July 23, 2010
(30 months from the date of such prospectus) if our stockholders approve an
extension, as an obligation to our stockholders and will not take any action to
amend or waive this provision to allow us to survive for a longer period of time
except in connection with the consummation of our business combination or with
the affirmative vote of holders of at least 95% of our outstanding shares of
common stock.
If we are
unable to consummate our business combination by January 23, 2010 (the date
that is 24 months from the date of the prospectus relating to our initial public
offering), or up to July 23, 2010 (30 months from the date of such
prospectus) if our stockholders approve an extension, as soon as practicable
thereafter we will adopt a plan of distribution in accordance with
Section 281(b) of the Delaware General Corporation
Law. Section 278 of the Delaware General Corporation Law
provides that our existence will continue for at least three years after its
expiration for the purpose of prosecuting and defending suits, whether civil,
criminal or administrative, by or against us, and of enabling us gradually to
settle and close our business, to dispose of and convey our property, to
discharge our liabilities and to distribute to our stockholders any remaining
assets, but not for the purpose of continuing the business for which we were
organized. Our existence will continue automatically even beyond the
three-year period for the purpose of completing the prosecution or defense of
suits begun prior to the expiration of the three-year period, until such time as
any judgments, orders or decrees resulting from such suits are fully
executed. Section 281(b) will require us to pay or make
reasonable provision for all then-existing claims and obligations, including all
contingent, conditional, or unmatured contractual claims known to us, and to
make such provision as will be reasonably likely to be sufficient to provide
compensation for any then-pending claims and for claims that have not been made
known to us or that have not arisen but that, based on facts known to us at the
time, are likely to arise or to become known to us within 10 years after the
date of dissolution. Under Section 281(b), the plan of
distribution must provide for all of such claims to be paid in full or make
provision for payments to be made in full, as applicable, if there are
sufficient assets. If there are insufficient assets, the plan must
provide that such claims and obligations be paid or provided for according to
their priority and, among claims of equal priority, ratably to the extent of
legally available assets. Any remaining assets will be available for
distribution to our stockholders. We will distribute to all of our
public stockholders, in proportion to their respective equity interests, an
aggregate sum equal to the amount in the trust account, inclusive of any income
earned on the trust account (net of (i) taxes, (ii) up to $9.5 million disbursed
to us for working capital purposes and (iii) up to $75,000 that we may request
from the trustee to pay for liquidation costs and expenses) plus any remaining
net assets (subject to our obligations under Delaware law to provide for claims
of creditors as described below).
We
anticipate notifying the trustee of the trust account to begin liquidating such
assets promptly after our dissolution and expect that the distribution will
occur as promptly as reasonably practicable thereafter. We cannot
provide stockholders with assurances of a specific timeframe for our dissolution
and liquidation. Our sponsor, our officers and directors and our
other non-public stockholders have waived, and their permitted transferees will
waive, their right to participate in any liquidation distribution occurring upon
our failure to consummate a business combination and a subsequent liquidation
with respect to the shares of common stock included in the sponsor
units. In addition, the underwriters have agreed to waive their
rights to the approximately $29.8 million of the underwriters’ deferred discount
deposited in the trust account in the event we do not timely consummate a
business combination and dissolve and distribute the funds held in the trust
account upon our dissolution. There will be no distribution from the
trust account with respect to our warrants, which will expire worthless if we
dissolve and liquidate before the consummation of a business
combination. We will pay the costs of liquidation from our remaining
assets outside of the trust account; however, we may request up to $75,000 of
income earned on the trust account from the trustee to pay for liquidation costs
and expenses.
If we do
not consummate our business combination by January 23, 2010 (the date that
is 24 months from the date of the prospectus relating to our initial public
offering), or up to July 23, 2010 (30 months from the date of such
prospectus) if our stockholders approve an extension, and expend all of the net
proceeds of our initial public offering, other than the proceeds deposited in
the trust account, the per-share liquidation price as of December 31, 2008 would
be approximately $9.90 per share eligible to receive distributions (including
the income earned through such date on the proceeds in the trust account in
excess of the amount permitted to be disbursed to us for working capital
purposes, net of taxes payable on such income and trust account expenses
incurred through such date), or approximately $0.10 less than the per-unit
initial public offering price of $10.00. The per share liquidation
price includes approximately $29.8 million in deferred underwriting discount
that would also be distributable to our public stockholders.
The
proceeds deposited in the trust account could, however, become subject to the
claims of our creditors (which could include vendors and service providers we
have engaged to assist us in any way in connection with our search for a target
business and that are owed money by us, as well as target businesses
themselves), if any, which could have higher priority than the claims of our
public stockholders. We cannot assure you that the actual per-share
liquidation price will not be less than the per-share liquidation price of
approximately $9.90 as of December 31, 2008. Although we will seek to
have all vendors, prospective target businesses or other entities with which we
engage execute agreements with us waiving any right, title, interest or claim of
any kind in or to any monies held in the trust account for the benefit of our
public stockholders, there is no guarantee that they will execute such
agreements or even if they execute such agreements that they would be prevented
from bringing claims against the trust account. In addition, there is
no guarantee that such entities will agree to waive any claims they may have in
the future as a result of, or arising out of, any negotiations, contracts or
agreements with us and will not seek recourse against the trust account for any
reason.
If we
dissolve and liquidate prior to consummating a business combination, Trian Fund
Management, L.P. has agreed that it will be liable to us if and to the extent
any claims by a third party for services rendered or products sold, or by a
prospective target business for fees and expenses of third parties that we agree
in writing to pay in the event we do not consummate a business combination with
such target business, reduce the amounts in the trust account, except as to
(i) any claims by a third party who executed a waiver (even if such waiver
is subsequently found to be invalid and unenforceable) of any and all rights to
seek access to the funds in the trust account, or (ii) any claims under our
indemnity of the underwriters of our initial public offering against certain
liabilities, including liabilities under the Securities Act. In the
event that this indemnity obligation arose and Trian Fund Management, L.P. did
not comply with such obligation, we believe that we would have an obligation to
seek enforcement of the obligation and that our board of directors would have a
fiduciary duty to seek enforcement of such obligation on our
behalf. In the event Trian Fund Management, L.P. has liability to us
under this indemnification arrangement, we cannot assure you that it will have
the assets necessary to satisfy those obligations. In addition, the
underwriters have agreed to forfeit any rights or claims against the proceeds
held in the trust account, which includes their deferred underwriters’
discount. Accordingly, the actual per-share liquidation price could
be less than the per-share liquidation price of approximately $9.90 as of
December 31, 2008 due to claims of creditors. In addition, if we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us which is not dismissed, the proceeds held in the trust account could
be subject to applicable bankruptcy law, and may be included in our bankruptcy
estate and subject to the claims of third parties with priority over the claims
of our stockholders. To the extent any bankruptcy claims deplete the
trust account, we may not be able to return to our public stockholders at least
the per-share liquidation price of approximately $9.90 as of December 31,
2008.
Under the
Delaware General Corporation Law, 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 Delaware General Corporation Law
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 stockholder’s 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, we do not intend to
comply with those procedures since, as stated above, it is our intention to make
liquidating distributions to our stockholders as soon as reasonably possible
after January 23, 2010 (the date that is 24 months from the date of the
prospectus relating to our initial public offering), or up to July 23, 2010
(30 months from the date of such prospectus) if our stockholders approve an
extension, in the event our business combination has not been
consummated. As such, our stockholders could potentially be liable
for any claims to the extent of distributions received by them (but no more) and
any liability of our stockholders may extend beyond the third anniversary of
such date. Because we will not be complying with Section 280,
Section 281(b) of the Delaware General Corporation Law requires us to adopt
a plan that will provide for our payment, based on facts known to us at such
time, of (i) all existing claims, (ii) all pending claims and
(iii) all claims that may be potentially brought against us within the
subsequent 10 years. Accordingly, we would be required to provide for
any claims of creditors known to us at that time or those that we believe could
be potentially brought against us within the subsequent 10 years prior to our
distributing the funds in the trust account to our public
stockholders. As a result, if we liquidate, the per-share
distribution from the trust account could be less than the per-share liquidation
price of approximately $9.90 as of December 31, 2008, due to claims or potential
claims of creditors. However, because we are a blank check company,
rather than an operating company, and our operations are limited to searching
for prospective target businesses to acquire, the most likely claims, if any, to
arise would be from our vendors and service providers (such as accountants,
lawyers, investment bankers, etc.) and potential target businesses.
If we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us that is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy court could seek to recover all amounts received by our
stockholders. Furthermore, because we intend to distribute the
then-remaining proceeds held in the trust account, this may be viewed or
interpreted as giving preference to our public stockholders over any potential
creditors with respect to access to or distributions from our
assets. Furthermore, our board of directors may be viewed as having
breached its fiduciary duties to our creditors and/or may have acted in bad
faith, and thereby exposed itself and our company to claims of punitive damages,
by paying public stockholders from the trust account prior to addressing the
claims of creditors. We cannot assure you that claims will not be
brought against us for these reasons.
Amended and restated certificate
of incorporation
Our
amended and restated certificate of incorporation sets forth certain
requirements and restrictions that apply to us until the consummation of our
business combination. Specifically, our amended and restated
certificate of incorporation provides, among other things, that:
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a
certain amount of the offering proceeds from our initial public offering
be placed into the trust account, which proceeds may not be disbursed from
the trust account except (i) in connection with or following our
business combination or thereafter, (ii) for the payment to holders
exercising their conversion rights, (iii) for the payment of taxes in
respect of the trust account, (iv) to the extent of $9.5 million of
income earned that may be disbursed to us for working capital purposes or
(v) upon our dissolution and liquidation and to the extent of $75,000
of income earned to pay our expenses of liquidation and dissolution, if
necessary;
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we
will submit any proposed business combination to our stockholders for
approval prior to consummating our business combination, even if the
nature of the transaction is such as would not ordinarily require
stockholder approval under applicable state
law;
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we
will submit any proposed amendment to our amended and restated certificate
of incorporation to extend the time period within which we must consummate
our business combination to our stockholders for approval prior to giving
effect to any such extension;
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our
public stockholders will have the right to convert their shares of common
stock into cash in accordance with the conversion rights described in this
Annual Report on Form 10-K (subject to the limitation on conversion rights
of stockholders or “groups” holding more than 10% of the shares included
in the units sold in our initial public
offering);
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we
will consummate a business combination only if it has a fair market value
equal to at least 80% of our net assets held in trust (net of taxes and
amounts disbursed to us for working capital purposes and excluding the
amount of the underwriters’ deferred discount held in trust) at the time
of our business combination;
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we
may not consummate any business combination, merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or similar
transaction prior to the consummation of a transaction that satisfies the
conditions of our business
combination;
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we
will consummate our business combination only if (i) the business
combination is approved by a majority of votes cast by our public
stockholders at a duly held stockholders meeting, (ii) an amendment
to our amended and restated certificate of incorporation to provide for
our perpetual existence is approved by holders of a majority of our
outstanding shares of common stock and (iii) conversion rights have
been exercised with respect to less than 40% of the shares of common stock
issued in our initial public offering, on a cumulative basis (including
the shares as to which conversion rights were exercised in connection with
a stockholder vote, if any, to approve an extension of the time period
within which we must consummate our business combination and the
stockholder vote to approve our business combination);
and
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if
we do not consummate our business combination by January 23, 2010
(the date that is 24 months from the date of the prospectus relating to
our initial public offering), or up to July 23, 2010 (30 months from
the date of such prospectus) if our stockholders approve an extension, our
corporate purposes and powers will immediately thereupon be limited to
acts and activities related to liquidating and winding up our affairs,
including liquidation, and we will not be able to engage in any other
business activities.
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Our
amended and restated certificate of incorporation provides that the
above-referenced requirements and restrictions may only be amended prior to
consummation of our business combination with the affirmative vote of holders of
at least 95% of our outstanding shares of common stock. In light of
the 95% vote required for amendments to these provisions, we do not anticipate
any changes to such requirements and restrictions prior to the consummation of
our business combination, if any.
Conflicts
of Interest
Our
officers and directors are not required to commit their full time to our affairs
and, accordingly, may have conflicts of interest in allocating their time among
various business activities. In the course of their other business
activities, our officers and directors may become aware of investment and
business opportunities that may be appropriate for presentation to our company
as well as the other entities with which they are affiliated.
In order
to minimize potential conflicts of interest that may arise from multiple
affiliations, each of our officers and directors (other than our independent
directors) has agreed, until the earliest of the consummation of our business
combination, January 23, 2010 (the date that is 24 months from the date of
the prospectus relating to our initial public offering), or July 23, 2010
(30 months from the date of such prospectus) if our stockholders approve an
extension, and such time as he ceases to be an officer or director, to present
to our company for our consideration, prior to presentation to any other entity,
any business combination opportunity involving the potential acquisition of a
controlling interest (whether through the acquisition of a majority of the
voting equity interests of the target or through other means) in a company that
is not publicly traded on a stock exchange or over-the-counter market with an
enterprise value of between $800 million and $3.2 billion, subject to
(i) any fiduciary duties or contractual obligations they may have currently
or in the future in respect of Trian Partners and any companies in which Trian
Partners invests and (ii) any other pre-existing fiduciary duties or
contractual obligations they may have. We expect primarily to target
businesses within this range of enterprise values (calculated as equity value
plus debt, minus cash), although we have the flexibility to acquire a business
outside of this range.
Each of
our officers and directors (other than our independent directors) has a duty to
present Trian Partners with opportunities that meet the investment strategy of
Trian Partners, which currently consists primarily of making non-control
investments in existing public companies. Mr. Peltz, Mr. May and
Mr. Garden are also directors of Wendy’s/Arby’s Group, Inc. (formerly named
Triarc Companies, Inc.) and, in addition to the general fiduciary duties they
owe to Wendy’s/Arby’s, each of them (as well as Trian Fund Management, L.P.) has
a contractual obligation to present Wendy’s/Arby’s with opportunities relating
to investments in excess of 50% of the outstanding voting securities of
businesses relating to the quick service restaurant industry. This
contractual obligation will remain in effect for as long as Wendy’s/Arby’s
continues to control the outstanding equity interest of businesses in the quick
service restaurant industry, one or more of Mr. Peltz, Mr. May and Mr.
Garden serves as a director of Wendy’s/Arby’s and these individuals together own
in excess of 10% of Wendy’s/Arby’s common equity. Even in the absence
of this contractual obligation, Mr. Peltz, Mr. May and Mr. Garden may owe
fiduciary duties to present Wendy’s/Arby’s with business opportunities relating
to the quick service restaurant industry, before presenting such opportunities
to us, for as long as they serve on Wendy’s/Arby’s board of
directors.
In
addition, Mr. Peltz owes a fiduciary duty to H. J. Heinz Company, of which he is
a director, Mr. May owes a fiduciary duty to Tiffany & Co. and
Deerfield Capital Corp., of which he is a director, and Mr. Garden owes a
fiduciary duty to Chemtura Corporation, of which he is a director. To
the extent that such individuals identify business combination opportunities
that may be suitable for entities to which they have pre-existing fiduciary
obligations, or are presented with such opportunities in their capacities as
fiduciaries to such entities, they may honor their pre-existing fiduciary
obligations to such entities. Accordingly, they may not present
business combination opportunities to us that otherwise may be attractive to
such entities unless the other entities have declined to accept such
opportunities.
Competition
In
identifying, evaluating and selecting a target business for a business
combination, we may encounter intense competition from other entities having a
business objective similar to ours, including other blank check companies,
private equity groups and leveraged buyout funds, and operating businesses
seeking strategic acquisitions. Many of these entities are well
established and have extensive experience identifying and effecting business
combinations directly or through affiliates. Moreover, many of these
competitors possess greater financial, technical, human and other resources than
us. Our ability to acquire larger target businesses will be limited
by our available financial resources. This inherent limitation gives
others an advantage in consummating a business
combination. Furthermore:
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our
obligation to seek stockholder approval of a business combination or
obtain necessary financial information may delay the completion of a
transaction;
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our
obligation to convert into cash shares of common stock held by our public
stockholders who vote against the business combination or an extension and
exercise their conversion rights may reduce the resources available to us
for a business combination;
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we
will only consummate a business combination if conversion rights have been
exercised with respect to less than 40% of the shares of common stock
issued in our initial public offering, on a cumulative basis (including
the shares as to which conversion rights were exercised in connection with
(i) a stockholder vote, if any, to approve an extension of the time
period within which we must consummate our business combination and
(ii) the stockholder vote to approve our business
combination);
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our
outstanding warrants, and the future dilution they potentially represent,
may not be viewed favorably by certain target businesses;
and
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the
requirement to effect a business combination with one or more businesses
or assets that have a fair market value of at least 80% of our net assets
held in trust (net of taxes and amounts disbursed to us for working
capital purposes and excluding the amount of the underwriters’ deferred
discount held in trust) at the time of the business combination, could
require us to acquire the assets of several businesses at the same time,
all of which sales would be contingent on the closings of the other sales,
which could make it more difficult to consummate the business
combination.
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Any of
these factors may place us at a competitive disadvantage in successfully
negotiating a business combination.
Employees
We
currently have seven executive officers. These individuals are not
obligated to devote any specific number of hours to our matters but they intend
to devote as much of their time as they deem necessary to our affairs until we
have consummated our business combination. The amount of time they
will devote in any time period will vary based on whether a target business has
been selected for our business combination and the stage of the business
combination process the company is in. We do not intend to have any
full-time employees prior to the consummation of our business
combination.
ITEM
1A.
Risk Factors
The
following risk factors should be read in conjunction with the other information
contained in this Annual Report on Form 10-K. These risks should be
carefully considered because if any of the following events occur, our business,
financial condition and operating results may be materially adversely
affected.
Risks
Relating to Our Structure as a Development Stage Company
We
are a development stage company with no operating history and, accordingly, you
will not have any basis on which to evaluate our ability to achieve our business
objective.
We are a
recently incorporated development stage company with no operating results to
date. Since we do not have any operations or an operating history,
our stockholders have no basis upon which to evaluate our ability to achieve our
business objective, which is to acquire one or more domestic or international
operating businesses. We are currently in the process of evaluating
and identifying prospective target businesses concerning a business combination,
but may be unable to complete a business combination. We will not
generate any revenues or income (other than income on the trust account) until,
at the earliest, after the consummation of a business combination.
We
will liquidate if we do not consummate a business combination.
Pursuant
to our amended and restated certificate of incorporation, we have until
January 23, 2010 (the date that is 24 months from the date of the
prospectus relating to our initial public offering) to consummate a business
combination. If we have entered into a definitive agreement with
respect to a business combination by January 23, 2010 and we anticipate that we
may not be able to complete the business combination by such date, we may seek
stockholder approval to extend the period of time to consummate a business
combination by up to six months. In such case, we will present such
proposal to our stockholders. The time period in which we must
complete our business combination will not be extended unless (i) holders
of a majority of our outstanding shares of common stock approve the extension
and (ii) conversion rights are exercised with respect to less than 40% of
the shares sold in our initial public offering. If we fail to
consummate a business combination within this time frame, our corporate
existence will cease except for the purposes of winding up our affairs and
liquidating. We may not be able to find suitable target businesses
within the required time frame. In addition, our negotiating position
and our ability to conduct adequate due diligence on any potential target may be
reduced as we approach the deadline for the consummation of a business
combination. We view this obligation to liquidate as an obligation to
our stockholders and we presume that stockholders rely, at least in part, on
this provision. Neither we nor our board of directors will take any
action to amend or waive any provision of our amended and restated certificate
of incorporation to allow us to survive beyond July 23, 2010 (30 months
from the date of the prospectus relating to our initial public offering), except
in connection with the consummation of a business combination or upon the
affirmative vote of holders of at least 95% of our outstanding capital
stock. If we are forced to liquidate, stockholders may not receive
the full amount of their original investment.
Unlike
most other blank check companies, we will be permitted, pursuant to our amended
and restated certificate of incorporation, to seek to extend the date before
which we must complete a business combination to up to 30 months. To
the extent they acquire shares of common stock issued in our initial public
offering and become public stockholders, Trian Partners, our sponsor and our
officers and directors may be able to influence whether we extend our corporate
existence. If an extension is approved, the funds in the trust
account will not be released for up to two and a half years after our initial
public offering.
Unlike
most other blank check companies, if we have entered into a definitive agreement
by January 23, 2010 (the date that is 24 months from the date of the
prospectus relating to our initial public offering), we may seek to extend the
date before which we must complete our business combination, to avoid being
required to liquidate, beyond January 23, 2010 to up to July 23, 2010
(30 months from the date of the prospectus relating to our initial public
offering) by calling a special (or annual) meeting of our stockholders for the
purpose of soliciting their approval for such extension. We will only
extend our corporate existence to up to July 23, 2010 if (i) holders
of a majority of our outstanding shares of common stock approve an amendment to
our amended and restated certificate of incorporation giving effect to such
extension and (ii) holders of less than 40% of the shares of common stock
sold in our initial public offering vote against the proposed extension and
exercise their conversion rights as described in this Annual Report on Form
10-K. In connection with the vote required for an extension of our
corporate existence, our sponsor, our officers and directors and our other
non-public stockholders have agreed, and their permitted transferees will agree,
to vote the shares of common stock included in the sponsor units in accordance
with the majority of votes cast by our public stockholders. We have
also agreed that, prior to our business combination, we will not issue any
shares of common stock, warrants or any other securities convertible into common
stock or that vote as a class with our common stock in respect of any proposed
extension or business combination. As a result of these agreements, a
proposal to extend our corporate existence to up to July 23, 2010 may not
be approved without the affirmative vote of a majority of votes cast by our
public stockholders.
In
connection with any vote to extend our corporate existence to up to
July 23, 2010, Trian Fund Management, L.P. has agreed to vote or cause to
be voted all shares of common stock purchased in the open market pursuant to its
purchase commitment in favor of an extension. In addition, our
sponsor and our officers and directors may acquire shares in the open market or
otherwise and may vote such shares in favor of an extension. As a
result, to the extent they acquire shares issued in our initial public offering
and become public stockholders, these persons may be able to influence whether
we extend out corporate existence to up to July 23, 2010.
Without
the option of extending the date before which we must complete a business
combination to up to July 23, 2010, if we enter into a definitive agreement
near the end of the 24-month period ending on January 23, 2010, we may not
have sufficient time to secure the approval of our stockholders and satisfy
customary closing conditions. If the proposal for the extension to up
to July 23, 2010 is approved by our stockholders as described in this
Annual Report on Form 10-K, we will have up to an additional six months beyond
January 23, 2010 to complete our business combination. As a
result, we may be able to hold public stockholder funds in the trust account
until July 23, 2010 and thus delay the receipt by public stockholders of
funds from the trust account on liquidation.
Although
historically blank check companies have used a 20% threshold for conversion
rights, we have used a 40% threshold. This higher threshold will make
it easier for us to consummate a business combination, or extend the time period
within which we must complete our business combination, with which our public
stockholders may not agree, and public stockholders may not receive the full
amount of their original investment upon exercise of their conversion
rights.
We will
proceed with our business combination only if a majority of the shares of common
stock voted by the public stockholders are voted in favor of the business
combination and public stockholders owning less than 40% of the shares included
in the units sold in our initial public offering cumulatively vote against the
business combination or an extension of the time period within which we must
consummate our business combination and exercise their conversion
rights. Accordingly, public stockholders holding approximately 39.99%
of the shares included in the units sold in our initial public offering may vote
against the business combination, or the extension of time, and exercise their
conversion rights and we could still consummate a proposed business
combination. Historically, blank check companies have had a
conversion threshold of 20%, which makes it more difficult for such companies to
consummate their business combination. Thus, because we permit a
larger number of stockholders to vote against the business combination and
exercise their conversion rights, it may be easier for us to consummate a
business combination with a target business that public stockholders may believe
is not suitable for us, and public stockholders may not receive the full amount
of their original investment upon exercise of their conversion
rights.
The
ability of a larger number of our stockholders to exercise their conversion
rights may not allow us to consummate the most desirable business combination or
optimize our capital structure.
When we
seek stockholder approval of a business combination or an extension of the time
period within which we must complete our business combination, we will offer
each public stockholder (but not our sponsor, our other non-public stockholders
or their permitted transferees with respect to the common stock included in the
sponsor units) the right to have its shares of common stock converted to cash if
the stockholder votes against the business combination or extension and the
business combination is approved and consummated or the extension is
approved. Such holder must both vote against such business
combination or extension and then exercise its conversion rights to receive a
pro rata share of the trust account. Accordingly, if our business
combination requires us to use substantially all of our cash to pay the purchase
price, because we will not know how many stockholders may exercise such
conversion rights, we may either need to reserve part of the trust account for
possible payment upon such conversion, or we may need to arrange third party
financing to help fund our business combination in case a larger percentage of
stockholders exercise their conversion rights than we expect. In the
event that the business combination involves the issuance of our stock as
consideration, we may be required to issue a higher percentage of our stock to
make up for a shortfall in funds. Raising additional funds to cover
any shortfall may involve dilutive equity financing or incurring indebtedness at
higher than desirable levels. This may limit our ability to
effectuate the most attractive business combination available to
us. We have not taken any steps to secure third party
financing. Therefore, we may not be able to consummate a business
combination that requires us to use all of the funds held in the trust account
as part of the purchase price, or we may end up having a leverage ratio that is
not optimal for our business combination.
Public
stockholders, together with any affiliates of theirs or any other person with
whom they are acting as a “group,” will be restricted from seeking conversion
rights with respect to more than 10% of the shares of common stock included in
the units sold in our initial public offering.
When we seek
stockholder approval of a proposed business combination or extension of the time
period within which we must complete our business combination, we will offer
each public stockholder (but not our sponsor, our officers and directors, our
other non-public stockholders or their permitted transferees with respect to the
common stock included in the sponsor units) the right to have its shares of
common stock converted to cash if the stockholder votes against a business
combination or the extension and the business combination is approved and
consummated or the extension is approved. Notwithstanding the
foregoing, a public stockholder, together with any affiliate or any other person
with whom it is acting as a “group” (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), will be restricted from seeking conversion
rights with respect to more than 10% of the shares of common stock included in
the units sold in our initial public offering, on a cumulative basis, which
includes any exercise of conversion rights in connection with either the
stockholder vote, if any, required to approve an extension of the time period
within which we must complete our business combination or the stockholder vote
required to approve our business combination. Shares of common stock
converted in connection with the vote on the extension and in connection with
the vote on our business combination will be aggregated for purposes of this 10%
limit. Accordingly, if a stockholder purchased more than 10% of the
shares of common stock included in the units sold in our initial public offering
and a proposed business combination or an extension of the time period within
which we must complete our business combination is approved, such stockholder
will not be able to seek conversion rights with respect to the full amount of
its shares and may be forced to hold such additional shares or sell them in the
open market. We cannot assure you that the value of such additional
shares will appreciate over time following a business combination or that the
market price of the common stock will exceed the per-share conversion
price.
We
may require stockholders who wish to convert their shares to comply with
specific requirements for conversion that may make it more difficult for them to
exercise their conversion rights prior to the deadline for exercising conversion
rights.
We may
require public stockholders who wish to convert their shares to physically
tender their stock certificates to our transfer agent prior to the stockholder
meeting or to deliver their shares to the transfer agent electronically using
the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian)
System. We may impose such a requirement in order to provide a clear
deadline and greater certainty as to the number of shares that will be subject
to conversion following our business combination, as well as for administrative
ease. The proxy solicitation materials that we will furnish to
stockholders in connection with the vote for any proposed business combination
or an extension of the time period within which we must complete our business
combination will indicate whether we are requiring stockholders to satisfy such
a delivery requirement, in which case, a stockholder would have from the time we
send out our proxy statement through the vote on the business combination or
extension to deliver his shares if he wishes to exercise his conversion
rights. If applicable, this time period will vary depending on the
specific facts of each transaction. In order to obtain a physical
stock certificate, a stockholder’s broker and/or clearing broker, DTC and our
transfer agent will need to act to facilitate this request. It is our
understanding that stockholders should generally allot at least two weeks to
obtain physical certificates from the transfer agent. However,
because we do not have any control over this process or over the brokers or DTC,
it may take significantly longer than two weeks to obtain a physical stock
certificate. While we have been advised that it takes a short period
of time to deliver shares through the DWAC System, it may take
longer. Accordingly, if it takes longer than we anticipate for
stockholders to deliver their shares, stockholders who wish to convert may be
unable to meet the deadline for exercising their conversion rights and thus will
be unable to convert their shares.
Certain
provisions of our amended and restated certificate of incorporation may be
amended other than in connection with the consummation of a business
combination.
We view
the provisions of our amended and restated certificate of incorporation to be
obligations to our stockholders and we presume that stockholders rely, at least
in part, on these provisions. Although we are contractually
obligated, pursuant to the underwriting agreement entered into with the
underwriters in connection with our initial public offering, not to amend or
waive these provisions without the affirmative vote of holders of at least 95%
of our outstanding shares of common stock prior to our business combination,
this supermajority requirement may not be enforceable under Delaware law in
which case these provisions may be amended or waived by a vote of fewer than 95%
of such shares.
If
we are forced to liquidate before the consummation of a business combination and
distribute the amounts in the trust account, our public stockholders may receive
significantly less than the per-share liquidation price of approximately $9.90
as of December 31, 2008 and our warrants will expire worthless.
We have
until January 23, 2010 (the date that is 24 months from the date of the
prospectus relating to our initial public offering), or up to July 23, 2010
(30 months from the date of such prospectus) if extended pursuant to a
stockholder vote as described in this Annual Report on Form 10-K, to consummate
a business combination. If we are unable to consummate a business
combination within this time frame and are forced to liquidate the trust
account, the per-share liquidation price received by our public stockholders
from the trust account may be less than $10.00 because of the expenses of our
initial public offering, our general and administrative expenses and the
anticipated costs of seeking a business combination. Upon the
liquidation of the trust account, public stockholders would be entitled to
receive (unless there are claims not otherwise satisfied by the amount not held
in the trust account or the indemnification provided by Trian Fund Management,
L.P.) approximately $9.90 per share as of December 31, 2008
(including the income earned through such date on the proceeds in the trust
account in excess of the amount permitted to be disbursed to us for working
capital purposes, net of taxes payable on such income and trust account expenses
incurred through such date), which includes approximately $29.8 million of the
underwriters’ deferred discount and the $10 million purchase price of the
sponsor warrants. In addition, if we do not have sufficient funds to
pay the costs of liquidation from our remaining assets outside of the trust
account, we may request from the trustee up to $75,000 of income earned on the
trust account to pay for liquidation costs and expenses. In the event
that we liquidate and it is subsequently determined that the reserve for claims
and liabilities is insufficient, stockholders who received a return of funds
from the liquidation of our trust account could be liable for claims made by our
creditors. Furthermore, there will be no distribution with respect to
our outstanding warrants, which will expire worthless if we liquidate the trust
account in the event we do not consummate a business combination within the
prescribed time frame.
If
third parties bring claims against us, the proceeds held in the trust account
could be reduced and the per-share liquidation price received by stockholders
from the trust account as part of our plan of distribution could be less than
the per-share liquidation price of approximately $9.90 as of December 31,
2008.
Our
placing of funds in trust may not protect those funds from third-party claims
against us. Third-party claims may include contingent or conditional
claims and claims of directors and officers entitled to indemnification under
our amended and restated certificate of incorporation or under indemnity
agreements. We intend to pay any claims from our funds not held in
trust to the extent sufficient to do so. Although we will seek to
have all vendors, service providers and prospective target businesses or other
entities that are owed money by us for services rendered or contracted for or
products sold to us waive any right, title, interest or claim of any kind in or
to any monies held in the trust account for the benefit of our public
stockholders, there is no guarantee that they will execute such
agreements. Even if they execute such agreements, they could bring
claims against the trust account including but not limited to fraudulent
inducement, breach of fiduciary responsibility or other similar claims, as well
as claims challenging the enforceability of the waiver, in each case in order to
gain an advantage with a claim against our assets, including the funds held in
the trust account. If any third party refused to execute an agreement
waiving such claims to the monies held in the trust account, we would perform an
analysis of the alternatives available to us if we chose not to engage such
third party and evaluate if such engagement would be in the best interest of our
stockholders. Examples of possible instances where we may engage a
third party that refused to execute a waiver include the engagement of a third
party consultant whose particular expertise or skills are believed by management
to be significantly superior to those of other consultants that would agree to
execute a waiver or in cases where management is unable to find a provider of
required services willing to provide the waiver.
Accordingly,
the proceeds held in trust could be subject to claims that could take priority
over the claims of our public stockholders and the per-share liquidation price
could be less than the per-share liquidation price of approximately $9.90 as of
December 31, 2008, due to claims of such creditors. If we are unable
to consummate a business combination and we liquidate, Trian Fund Management,
L.P. will be liable to ensure that the proceeds in the trust account are not
reduced if we did not obtain a waiver from vendors, service providers, or other
entities that are owed money by us for services rendered or contracted for or
products sold to us, as well as from any prospective target businesses for fees
and expenses of third parties that we agree in writing to pay in the event we do
not consummate a combination with such target business. We cannot
assure you that Trian Fund Management, L.P., which is a privately held limited
partnership without publicly disclosed financial statements, will have
sufficient assets to satisfy those obligations. The indemnification
provisions are set forth in a letter executed by Trian Fund Management,
L.P. The letter specifically sets forth that in the event we obtain a
waiver of any right, title, interest or claim of any kind in or to any monies
held in the trust account for the benefit of our stockholders from a vendor,
service provider, prospective target business or other entity that is owed money
by us for services rendered or contracted for or products sold to us, the
indemnification from Trian Fund Management, L.P. will not be available, even if
such waiver is subsequently found to be invalid and
unenforceable. The indemnification from Trian Fund Management, L.P.
will also be unavailable in respect of any claims under our indemnity of the
underwriters against certain liabilities related to our initial public offering
or in respect of any claims under the indemnification provisions of our amended
and restated certificate of incorporation or the indemnity agreements we have
entered into with our officers and directors (although Trian Fund Management,
L.P. has separately guaranteed certain of our obligations under such indemnity
agreements with our officers and directors prior to our business
combination).
In
addition, if we are forced to file a bankruptcy case or an involuntary
bankruptcy case is filed against us that is not dismissed, the funds held in our
trust account will be subject to applicable bankruptcy law, and may be included
in our bankruptcy estate and subject to the claims of third parties with
priority over the claims of our stockholders. To the extent any
bankruptcy claims deplete the trust account we may not be able to return to our
public stockholders the liquidation amounts due them.
Our
stockholders may be held liable for claims by third parties against us to the
extent of distributions received by them.
Our
amended and restated certificate of incorporation provides that we will continue
in existence only until January 23, 2010 (the date that is 24 months from
the date of the prospectus relating to our initial public offering), or up to
July 23, 2010 (30 months from the date of such prospectus) if our
stockholders approve an extension. If we have not consummated a
business combination within such time frame and amended this provision in
connection therewith, pursuant to the Delaware General Corporation Law, our
corporate existence will cease except for the purposes of winding up our affairs
and liquidating. Under Section 282 of the Delaware General
Corporation Law, 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 Delaware General Corporation Law 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
stockholder’s 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, it is our intention to
make liquidating distributions to our stockholders as soon as reasonably
possible after our corporate existence terminates and, therefore, we do not
intend to comply with those procedures. Because we will not be
complying with those procedures, we are required, pursuant to Section 281
of the Delaware General Corporation Law, to adopt a plan that will provide for
our payment, based on facts known to us at such time, of (i) all existing
claims, (ii) all pending claims and (iii) all claims that may be
potentially brought against us within the subsequent 10
years. Accordingly, we would be required to provide for any claims of
creditors known to us at that time or those that we believe could be potentially
brought against us within the subsequent 10 years prior to distributing the
funds held in the trust to stockholders. We may not be able to
properly assess all claims that may be potentially brought against
us. As such, our stockholders could potentially be liable for any
claims to the extent of distributions received by them and any liability of our
stockholders may extend well beyond the third anniversary of such
date. Accordingly, third parties may seek to recover from our
stockholders amounts owed to them by us. In the event of our
liquidation, we may have to adopt a plan to provide for the payment of claims
that may potentially be brought against us, which could result in the per-share
liquidation amount to our stockholders being significantly less than the
per-share liquidation price of approximately $9.90 as of December 31,
2008.
Our
public stockholders will not have any rights or interest in funds from the trust
account, except under certain limited circumstances.
Our
public stockholders will be entitled to receive funds from the trust account
only in the event of our liquidation or if they seek to convert their respective
shares of common stock into cash in connection with a business combination that
the stockholder voted against and that is consummated by us or in connection
with an extension of the time period within which we must consummate our
business transaction that the stockholder voted against and that is
approved. In no other circumstances will a stockholder have any right
or interest of any kind in the trust account.
If
we are deemed to be an investment company, we may be required to institute
burdensome compliance requirements and our activities may be restricted, which
may make it difficult for us to consummate a business combination.
If we are
deemed to be an investment company under the Investment Company Act of 1940, we
may be subject to certain restrictions that may make it more difficult for us to
consummate a business combination, including:
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restrictions
on the nature of our investments;
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restrictions
on borrowing; and
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restrictions
on the issuance of securities, including
warrants.
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In
addition, we may have imposed upon us certain burdensome requirements,
including:
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registration
as an investment company;
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adoption
of a specific form of corporate structure;
and
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reporting,
record keeping, voting, proxy, compliance policies and procedures and
disclosure requirements and other rules and
regulations.
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We do not
believe that our anticipated principal activities will subject us to the
Investment Company Act. To this end, the proceeds held in trust may
be invested by the trust agent only in United States “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act with a
maturity of 180 days or less, or in money market funds meeting certain
conditions under Rule 2a-7 promulgated under the Investment Company
Act. By restricting the holdings of the trust account to these
instruments, we believe that we will not be deemed an investment company within
the meaning of the Investment Company Act. The trust account and the
purchase of government securities and money market funds for the trust account
is intended as a holding place for funds pending the earlier to occur of either:
(i) the consummation of our primary business objective, which is a business
combination, or (ii) absent a business combination, liquidation and return
of the funds held in this trust account to our public stockholders.
If we are
deemed to be an investment company at any time, we will be required to comply
with additional regulatory requirements under the Investment Company Act that
would require additional expenses for which we have not
budgeted. Furthermore, if we are deemed to be an investment company,
our contracts may be voided and we may be unable to consummate a business
combination.
If
we are unable to consummate a business combination, our public stockholders will
be forced to wait the full 24 months (or up to 30 months if our stockholders
approve an extension) before receiving liquidation distributions.
We have
until January 23, 2010 (the date that is 24 months from the date of the
prospectus relating to our initial public offering), or up to July 23, 2010
(30 months from the date of such prospectus) if our stockholders approve an
extension, to consummate a business combination. We have no
obligation to return funds to stockholders prior to such date (other than
pursuant to conversion rights in connection with an extension) unless we
consummate a business combination prior thereto and only then in cases where
stockholders have properly sought conversion of their shares. Only
after the expiration of this 24-month period ending January 23, 2010 (or up
to 30-month period ending July 23, 2010, if our stockholders approve an
extension) will public stockholders be entitled to liquidation distributions if
we are unable to consummate a business combination.
Stockholders
will not be entitled to protections normally afforded to stockholders of blank
check companies.
Since the
net proceeds of our initial public offering are intended to be used to
consummate a business combination with an unidentified target business, we may
be deemed to be a blank check company under the United States securities
laws. However, since we had net tangible assets in excess of $5
million upon the consummation of our initial public offering and filed a current
report on Form 8-K with the Securities and Exchange Commission on
February 4, 2008, including an audited balance sheet demonstrating this
fact, we are exempt from rules promulgated by the Securities and Exchange
Commission to protect stockholders of blank check companies such as Rule
419. Accordingly, investors will not be afforded the benefits or
protections of those rules, such as entitlement to all the income earned on the
funds deposited in the trust account. Because we are not subject to
these rules, including Rule 419, we have a longer period of time to consummate a
business combination in certain circumstances than we would if we were subject
to such rule.
Risks
Relating to Our Business Combination
The
requirement that we consummate a business combination by January 23, 2010 (or up
to July 23, 2010, if our stockholders approve an extension) may give potential
target businesses leverage over us in negotiating a business
combination.
We will
liquidate and promptly distribute only to our public stockholders on a pro rata
basis the net amount in our trust account (subject to our obligations under
Delaware law for claims of creditors) plus any remaining net assets if we do not
effect a business combination by January 23, 2010 (the date that is 24
months from the date of the prospectus relating to our initial public offering),
or up to July 23, 2010 (30 months from the date of such prospectus) if our
stockholders approve an extension. Any potential target business with
which we enter into negotiations concerning a business combination will be aware
of this requirement. Consequently, such target businesses may obtain
leverage over us in negotiating a business combination, knowing that if we do
not consummate a business combination with that particular target business, we
may be unable to consummate a business combination with any target
business. This risk will increase as we get closer to the time limit
referenced above.
We
may issue shares of our capital stock to consummate a business combination,
which would reduce the equity interest of our stockholders and may cause a
change in control of our ownership.
Our
amended and restated certificate of incorporation authorizes the issuance of up
to 500,000,000 shares of common stock, par value $0.0001 per share, and
1,000,000 shares of preferred stock, par value $0.0001 per
share. Immediately after our initial public offering, there were
260,000,000 authorized but unissued shares of our common stock available for
issuance (after appropriate reservation for the issuance of shares of common
stock upon full exercise of our outstanding warrants) and all of the 1,000,000
shares of preferred stock available for issuance. We may issue a
substantial number of additional shares of our common or preferred stock, or a
combination of common and preferred stock, to consummate a business
combination. In addition, we may issue common stock as part of the
co-investment units and upon the exercise of warrants included in the
co-investment units described in this Annual Report on Form 10-K. The
issuance of additional shares of our common stock or any number of shares of our
preferred stock:
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may
significantly reduce the equity interest of our
stockholders;
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may
subordinate the rights of holders of common stock if preferred stock is
issued with rights senior to those afforded to the holders of our common
stock;
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may
cause a change in control if a substantial number of our shares of common
stock are issued, which may affect, among other things, our ability to use
our net operating loss carry forwards, if any, and could result in the
resignation or removal of our present officers and directors and cause our
public stockholders to become minority stockholders in the combined
entity; and
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may
adversely affect prevailing market prices for our common
stock.
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For a
more complete discussion of the possible structure of a business combination,
see “Item 1. Business—Effecting our Business Combination—General.”
We
may not be able to consummate a business combination in the current economic
environment.
The U.S.
and global economies are currently experiencing a severe financial crisis and
the U.S. equity markets have declined substantially in recent months. The
downturn in the equity markets, particularly the markets for initial public
offerings, could adversely impact our ability to consummate a business
combination. Potential targets may not be willing to sell their businesses at
current depressed equity valuations. In addition, public stockholders will have
the ability to make a new investment decision whether to approve the transaction
and become owners of an operating company, or to receive their pro rata portion
of the funds in the trust account. To the extent potential targets are unwilling
to sell to us, or public stockholders are unwilling to invest in a new
public operating company, or continue to invest in the equity markets
generally, our ability to consummate a business combination could be
hindered.
We
may be unable to obtain additional financing, if required, to consummate a
business combination or to fund the operations and growth of the target
business, which could compel us to restructure the transaction or abandon a
particular business combination.
Although
we believe that the net proceeds of our initial public offering, the private
placement of sponsor warrants and, if applicable, the Trian Fund Management,
L.P. purchase commitment will be sufficient to allow us to consummate a business
combination, we cannot ascertain the capital requirements for any particular
transaction. If the net proceeds of our initial public offering, the
private placement and, if applicable, the Trian Fund Management, L.P. purchase
commitment prove to be insufficient, either because of the size of the business
combination or the obligation to convert into cash a significant number of
shares of our common stock from dissenting stockholders, we will be required to
seek additional financing such as debt, equity or co-investment with other
investors. Given the current global economic crisis, such additional
financing might not be available to us on acceptable terms, if at
all. To the extent that additional financing proves to be unavailable
when needed to consummate a particular business combination, we would be
compelled to either restructure the transaction or abandon that particular
business combination and seek an alternative target business
candidate. If we are unable to secure additional financing, and, as a
result, we fail to consummate a business combination in the allotted time, we
would liquidate the trust account, which may result in a loss of a portion of
our public stockholders’ investment. In addition, if we consummate a
business combination, we may require additional financing to fund continuing
operations and/or growth. The failure to secure any such additional
financing following a business combination could have a material adverse effect
on our ability to continue to develop and grow. Other than the Trian
Fund Management, L.P. purchase commitment, none of our officers or directors,
our sponsor or any of their affiliates or any other third party is required to
provide any financing to us in connection with or after the consummation of a
business combination.
Our
investments in any future joint investment could be adversely affected by our
lack of sole decision-making authority, our reliance on a partner’s financial
condition and disputes between us and our partners.
While we
will not structure our business combination in such a way that we will not
acquire a controlling interest in a target company (whether through the
acquisition of a majority of the voting equity interests of the target or
through other means), we may in the future co-invest with third parties through
partnerships or joint investment in an acquisition target or other
entities. In such circumstances, we may not be in a position to
exercise sole decision-making authority regarding a target business, partnership
or other entity. Investments in partnerships or other entities may,
under certain circumstances, involve risks not present were a third party not
involved, including the possibility that partners might become insolvent or fail
to fund their share of required capital contributions. Partners may
have economic or other business interests or goals that are inconsistent with
our business interests or goals, and may be in a position to take actions
contrary to our policies or objectives. Such partners may also seek
similar acquisition targets as us and we may be in competition with them for
such business combination targets. Disputes between us and partners
may result in litigation or arbitration that would increase our expenses and
distract our officers and/or directors from focusing their time and effort on
our business. Consequently, actions by, or disputes with, partners
might result in subjecting assets owned by the partnership to additional
risk. We may also, in certain circumstances, be liable for the
actions of our third-party partners. For example, in the future we
may agree to guarantee indebtedness incurred by a partnership or other
entity. Such a guarantee may be on a joint and several basis with our
partner in which case we may be liable in the event such party defaults on its
guaranty obligation.
If
the net proceeds of our initial public offering not placed in trust together
with income earned on the trust account available to us are insufficient to
allow us to operate until at least January 23, 2010 (or up to July 23, 2010, if
our stockholders approve an extension), we may not be able to consummate a
business combination.
We
currently believe that the remaining portion of the sum of the $500,000 in funds
available to us outside of the trust account plus the $9.5 million of income
earned on the trust account that may be disbursed to us, which remaining portion
equals $8.0 million as of December 31, 2008, will be sufficient to allow us to
operate until at least January 23, 2010 (the date that is 24 months from
the date of the prospectus relating to our initial public offering), or up to
July 23, 2010 (30 months from the date of such prospectus) if our
stockholders approve an extension, assuming that a business combination is not
consummated during that time. However, our estimates may not be
accurate. We will depend on sufficient income being earned on the
proceeds held in the trust account to provide us with up to $9.5 million of
additional working capital we may need to identify one or more target businesses
and to consummate our business combination, as well as to pay any taxes that we
may owe. The current low level of interest rates may result in our
having insufficient funds available with which to structure, negotiate or close
our business combination. In such event, we would need to raise
additional funds to operate or may be forced to liquidate. Neither
our sponsor nor any member of our management team is under any obligation to
loan us money under such circumstances.
We could
use a portion of the funds not being placed in trust or that may be released to
us from the trust to pay due diligence costs in connection with a potential
business combination or to pay fees to consultants to assist us with our search
for a target business. We could also use a portion of these funds as
a down payment, “reverse break-up fee” (a payment to the target company under a
merger agreement if the financing for an acquisition is not obtained), or to
fund a “no-shop” provision (a provision in letters of intent designed to keep
target businesses from “shopping” around for transactions with others on terms
more favorable to such target businesses) with respect to a particular proposed
business combination, although we do not have any current intention to do
so. If we entered into such a letter of intent where we paid for the
right to receive exclusivity from an acquisition target and were subsequently
required to forfeit such funds (whether as a result of our breach or for other
reasons) or if we agree to a reverse break-up fee and subsequently were required
to pay such fee (whether as a result of failure to obtain the necessary
financing or for other reasons), we might not have sufficient funds to continue
searching for, or conduct due diligence with respect to any other potential
acquisition targets. In such event, we would need to obtain
additional funds to continue operations. Neither our sponsor nor our
management team is under any obligation to advance funds in such
circumstances.
Because
of our limited resources and the significant competition for business
combination opportunities, including numerous companies with a business plan
similar to ours, it may be more difficult for us to consummate a business
combination.
We expect
to encounter intense competition from other entities having a business objective
similar to ours, including private investors (which may be individuals or
investment partnerships), other blank check companies, and other entities,
domestic and international, competing for the type of businesses that we may
intend to acquire. Many of these competitors possess greater
technical, human and other resources, or more local industry knowledge, or
greater access to capital, than we do and our financial resources will be
relatively limited when contrasted with those of many of these
competitors. While we believe that there are numerous target
businesses that we could potentially acquire with the net proceeds of our
initial public offering, our ability to compete with respect to the acquisition
of certain target businesses that are sizable will be limited by our available
financial resources. This inherent competitive limitation gives
others an advantage in pursuing the acquisition of certain target
businesses. Furthermore, the obligation that we have to seek
stockholder approval of a business combination may delay the consummation of a
transaction and make us less attractive to a potential target
business. In addition, our outstanding warrants, and the future
dilution they potentially represent, may not be viewed favorably by certain
target businesses. Also, our obligation in certain instances to
convert into cash shares of our common stock may reduce the resources available
to us for a business combination. Any of these factors may place us
at a competitive disadvantage in successfully negotiating a business
combination.
Since
we have not yet selected any target business with which to consummate a business
combination, we are unable to currently ascertain the merits or risks of the
business’s operations and stockholders will be relying on management’s ability
to source and evaluate potential business combinations.
Because we
have not yet identified a prospective target business, stockholders currently
have no basis to evaluate the possible merits or risks of our business
combination. Although our management and board of directors will
evaluate the risks inherent in a particular target business, they may not
properly ascertain or assess all of the significant risk
factors. Except for the limitation that a target business have a fair
market value of at least 80% of our net assets held in trust (net of taxes and
amounts permitted to be disbursed to us for working capital purposes and
excluding the amount of the underwriters’ deferred discount held in trust) at
the time of such business combination, we have virtually unrestricted
flexibility in identifying and selecting a prospective acquisition
candidate. Public stockholders will be relying on the ability of our
officers and directors to source business combinations, evaluate their merits,
conduct or monitor diligence and conduct negotiations.
We
may have only limited ability to evaluate the management of the target
business.
While we
intend to closely scrutinize any individuals we engage after a business
combination, we cannot assure you that our assessment of these individuals will
prove to be correct. These individuals may be unfamiliar with the
requirements of operating a public company, which could cause us to have to
expend time and resources helping them become familiar with such
requirements. This could be expensive and time-consuming and could
lead to various operational issues that may adversely affect our
operations.
Since
we may acquire a business that has operations outside the United States, we may
encounter risks specific to one or more countries in which we ultimately
operate.
If we
acquire a business that has operations outside the United States, we will be
exposed to risks that could negatively impact our future results of operations
following a business combination. The additional risks to which we
may be exposed in any such case include but are not limited to:
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tariffs
and trade barriers;
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regulations
related to customs and import/export
matters;
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tax
issues, such as tax law changes and variations in tax laws as compared to
the United States;
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cultural
and language differences;
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an
inadequate banking system;
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foreign
exchange controls;
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restrictions
on the repatriation of profits or payment of
dividends;
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crime,
strikes, riots, civil disturbances, terrorist attacks and
wars;
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nationalization
or expropriation of property;
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law
enforcement authorities and courts that are inexperienced in commercial
matters; and
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deterioration
of political relations with the United
States.
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In
addition, if we acquire a business that conducts a substantial portion of its
business in emerging economies, we could face additional risks, including the
following:
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the
challenge of navigating a complex set of licensing requirements and
restrictions affecting the conduct of business in such countries by
foreign companies;
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difficulties
and limitations on the repatriation of
cash;
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currency
fluctuation and exchange rate
risks;
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protection
of intellectual property, both for us and our customers;
and
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difficulty
retaining management personnel and skilled
employees.
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If we are
unable to manage these risks following a business combination, we may face
significant liability, our international sales could decline and our financial
results could be adversely affected.
Foreign
currency fluctuations could adversely affect our business and financial
results.
A target
business with which we combine may do business and generate sales within other
countries. Foreign currency fluctuations may affect the costs that we
incur in such international operations. It is also possible that some
or all of our operation expenses may be incurred in non-U.S. dollar
currencies. The appreciation of non-U.S. dollar currencies
in those countries where we have operations against the U.S. dollar
would increase our costs and could harm our results of operations and financial
condition.
Because
any target business with which we attempt to consummate a business combination
will be required to provide our stockholders with financial statements prepared
in accordance with certain requirements set out by U.S. federal securities laws,
the pool of prospective target businesses may be limited.
In
accordance with the requirements of U.S. federal securities laws, in order to
seek stockholder approval of a business combination, a proposed target business
will be required to have certain financial statements that are prepared in
accordance with International Financial Reporting Standards (IFRS), in
accordance with U.S. generally accepted accounting principles (U.S. GAAP) or in
accordance with another comprehensive basis of accounting reconciled to U.S.
GAAP, and that are audited in accordance with the standards of the Public
Company Accounting Oversight Board (United States). To the extent
that a proposed target business does not have and cannot prepare financial
statements that have been prepared in accordance with IFRS or U.S. GAAP, or that
can be reconciled to U.S. GAAP, and that are audited in accordance with the
standards of the PCAOB, we will not be able to acquire that proposed target
business. These financial statement requirements may limit the pool
of potential target businesses.
Resources
could be wasted in researching acquisitions that are not consummated, which
could materially adversely affect subsequent attempts to locate and acquire or
merge with another business.
It is
anticipated that the investigation of each specific target business and the
negotiation, drafting, and execution of relevant agreements, disclosure
documents, and other instruments will require substantial management time and
attention and substantial costs for accountants, attorneys and other
advisors. If a decision is made not to consummate a specific business
combination, the costs incurred up to that point for the proposed transaction
likely would not be recoverable. Furthermore, even if an agreement is
reached relating to a specific target business, we may fail to consummate the
business combination for any number of reasons, including those beyond our
control, such as public stockholders who own 40% or more of the shares of common
stock issued in our initial public offering voting against the proposed business
combination or an extension of the time period within which we must consummate
our business combination and opting to have us redeem their stock for a pro rata
share of the trust account, even if a majority of the shares of common stock
voted by the public stockholders are voted in favor of the business
combination. Any such event will result in a loss to us of the
related costs incurred, which could materially adversely affect subsequent
attempts to locate and acquire or merge with another business.
Initially,
we may only be able to consummate one business combination, which will cause us
to be solely dependent on a single asset or property.
The net
proceeds from our initial public offering and the private placement of sponsor
warrants (excluding the underwriters’ deferred discount of approximately $29.8
million held in trust) provided us with approximately $875.8 million, which is
held in trust and may be used by us to consummate a business
combination. We currently have no restrictions on our ability to seek
additional funds through the sale of securities or through loans. As
a consequence, we could seek to acquire a target business that has a fair market
value significantly in excess of 80% of our net assets held in trust (net of
taxes and amounts permitted to be disbursed for working capital purposes and
excluding the amount of the underwriters’ deferred discount held in trust) at
the time of such business combination. We could seek to fund such a
business combination by raising additional funds through the sale of our
securities or through loan arrangements. However, if we were to seek
such additional funds, any such arrangement would only be consummated
simultaneously with our consummation of a business
combination. Consequently, it is probable that we will have the
ability to consummate only a single business combination, although this may
entail the simultaneous acquisitions of several assets or closely related
operating businesses. However, should our management elect to pursue
more than one acquisition simultaneously, our management could encounter
difficulties in consummating all or a portion of such acquisitions due to a lack
of adequate resources, including the inability of management to devote
sufficient time to the due diligence, negotiation and documentation of each
acquisition. Furthermore, even if we consummate the acquisition of
more than one target business at substantially the same time, we may not be able
to integrate the operations of such target businesses. Accordingly,
the prospects for our ability to effect our business strategy may
be:
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solely
dependent upon the performance of a single business;
or
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dependent
upon the development or market acceptance of a single or limited number of
products, processes or services.
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In this
case, we will not be able to diversify our operations or benefit from the
possible spreading of risks or offsetting of losses, unlike other entities that
may have the resources to consummate several business combinations in different
industries or different areas of a single industry. Furthermore,
since our business combination may entail the simultaneous acquisitions of
several assets or operating businesses at the same time and may be with
different sellers, we will need to convince such sellers to agree that the
purchase of their assets or businesses is contingent upon the simultaneous
closings of the other acquisitions.
We
are not required to obtain an opinion from an unaffiliated third party as to the
fair market value of the target business or businesses or that the price we are
paying for such business or businesses is fair to our stockholders.
We are
not required to obtain an opinion from an unaffiliated third party that the
target business or businesses we select have a fair market value of at least 80%
of our net assets held in trust (net of taxes and amounts permitted to be
disbursed to us for working capital purposes and excluding the amount of the
underwriters’ deferred discount held in trust) at the time of our business
combination, unless our board is not able to independently determine that the
target business or businesses have a sufficient fair market value. We
are also not required to obtain an opinion from an unaffiliated third party that
the price we are paying for the target business or businesses we select is fair
to our stockholders.
Firms
providing fairness opinions typically place limitations on the purposes for
which the opinion may be used, and there can be no assurance that, as a result
of such limitations or applicable law, our stockholders, in addition to our
board of directors, will be entitled to rely on any opinion that may be
obtained. We expect to require that any firm selected by us to
provide a fairness opinion will adhere to general industry practice in stating
the purposes for which its opinion may be used. If no opinion is
obtained, our stockholders will be relying on the judgment of our board of
directors.
There
may be tax consequences associated with our acquisition, holding and disposition
of target companies and assets.
We may
incur significant taxes in connection with effecting acquisitions; holding,
receiving payments from, and operating target companies and assets; and
disposing of target companies and assets.
The
potential loss of key customers, management and employees of a target business
could cause us not to realize the benefits anticipated to result from an
acquisition.
It is
possible that, following our business combination, the potential loss of key
customers, management and employees of an acquired business could cause us not
to realize the benefits anticipated to result from an acquisition.
Certain
regulatory requirements may increase the time and costs of consummating an
acquisition.
If we
were to acquire a previously privately owned company, it most likely will incur
additional costs in order to comply with the requirements of the Sarbanes-Oxley
Act of 2002 and other public company requirements, which in turn would reduce
our earnings. Section 404 of the Sarbanes-Oxley Act of 2002
requires that we evaluate and report on our system of internal controls and
requires that we have such system of internal controls audited on an annual
basis. If we fail to maintain the adequacy of our internal controls,
we could be subject to regulatory scrutiny, civil or criminal penalties and/or
stockholder litigation. Any inability to provide reliable financial
reports could harm our business. Section 404 of the
Sarbanes-Oxley Act also requires that our independent registered public
accounting firm report on management’s evaluation of our system of internal
controls. A target company may not be in compliance with the
provisions of the Sarbanes-Oxley Act regarding adequacy of their internal
controls. The development of the internal controls of any such entity
to achieve compliance with the Sarbanes-Oxley Act may increase the time and
costs necessary to complete any business combination. Furthermore,
any failure to implement required new or improved controls, or difficulties
encountered in the implementation of adequate controls over our financial
processes and reporting in the future, could harm our operating results or cause
us to fail to meet our reporting obligations. Inferior internal
controls could also cause investors to lose confidence in our reported financial
information, which could have a negative effect on the trading price of our
stock.
We
may issue notes or other debt securities, or otherwise incur substantial debt,
to consummate a business combination, which may adversely affect our financial
condition.
Although
we currently have no commitments to issue any notes or other debt securities, or
to otherwise incur debt, we may choose to incur substantial debt to consummate a
business combination. The incurrence of debt could result
in:
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default
and foreclosure on our assets if our operating cash flow after a business
combination were insufficient to pay our debt
obligations;
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acceleration
of our obligations to repay the indebtedness even if we have made all
principal and interest payments when due, if the debt contained covenants
that required the maintenance of certain financial ratios or reserves and
any such covenant were breached without a waiver or renegotiation of that
covenant;
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our
immediate payment of all principal and accrued interest, if any, if the
debt was payable on demand;
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covenants
that limit our ability to pay dividends on our common stock, acquire
capital assets or make additional acquisitions;
and
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our
inability to obtain additional financing, if necessary, if the debt
contained covenants restricting our ability to obtain additional financing
while such debt was outstanding.
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Risks
Relating to Our Securities
Our
outstanding warrants may have an adverse effect on the market price of our
common stock and make it more difficult to effect a business
combination.
We issued
warrants to purchase up to 92,000,000 shares of common stock as part of the
units sold in our initial public offering. In addition, immediately
prior to the closing of our initial public offering, we issued and sold
10,000,000 warrants to our sponsor in exchange for $10 million, which was
deposited in our trust account, and in October 2007, we issued 23,000,000
warrants (after giving effect to an adjustment in connection with a stock
dividend) to our sponsor as part of the sponsor units. We may also
issue additional warrants as part of the co-investment units Trian Fund
Management, L.P. purchases or causes to be purchased immediately prior to our
business combination to the extent Trian Fund Management, L.P. has not purchased
or caused to be purchased the full $75 million of our common stock pursuant to
its purchase commitment described in this Annual Report on Form
10-K.
To the
extent we issue shares of common stock to effect a business combination, the
potential for the issuance of a substantial number of additional shares of
common stock upon exercise of these warrants could make us a less attractive
acquisition vehicle in the eyes of a target business. Such
securities, when exercised, will increase the number of issued and outstanding
shares of our common stock and reduce the value of the shares of common stock
issued to consummate the business combination. Therefore, our
warrants may make it more difficult to effectuate a business combination or
increase the cost of acquiring the target business. In addition, the
sale, or even the possibility of sale, of the shares of common stock issuable
upon exercise of the warrants could have an adverse effect on the market price
for our securities or on our ability to obtain future financing. If
and to the extent these warrants are exercised, stockholders may experience
dilution to their holdings.
If
we redeem the warrants included in the units offered to the public, the sponsor
warrants and the warrants included in the sponsor units, which are
non-redeemable so long as they are held by the sponsor or its permitted
transferees, could provide the sponsor and its permitted transferees with the
ability to realize a larger gain than the public warrant holders.
The
warrants held by our public warrant holders may be called for redemption at any
time after the warrants become exercisable:
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in
whole and not in part;
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at
a price of $0.01 per warrant;
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upon
a minimum of 30 days prior written notice of redemption to each warrant
holder; and
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if,
and only if, the last sale price of our common stock equals or exceeds
$13.75 per share for any 20 trading days within a 30-trading day period
ending on the third business day prior to the notice of redemption to
warrant holders.
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In
addition, we may not redeem such warrants unless the shares of common stock
issuable upon exercise of those warrants are covered by an effective
registration statement from the beginning of the measurement period through the
date fixed for the redemption.
Redemption
of the warrants could force the warrant holders to (i) exercise the
warrants and pay the exercise price at a time when it may be disadvantageous for
the holders to do so, (ii) sell the warrants at the then current market
price when they might otherwise wish to hold the warrants or (iii) accept
the nominal redemption price, which, at the time the warrants are called for
redemption, is likely to be substantially less than the market value of the
warrants.
As a
result of the sponsor warrants and the warrants included in the sponsor units
not being subject to redemption so long as they are held by the sponsor or its
permitted transferees, holders of such warrants could realize a larger gain than
our public warrant holders in the event we redeem our public
warrants.
Our
management’s ability to require holders of our public warrants to exercise such
warrants on a cashless basis, if exercised, would cause holders to receive fewer
shares of common stock upon their exercise of the warrants than they would have
received had they been able to exercise their warrants for cash.
If we
call our public warrants for redemption after the redemption criteria described
above have been satisfied, our management will have the option to require any
holder that wishes to exercise his warrant to do so on a “cashless basis.” If
our management chooses to require holders to exercise their warrants on a
cashless basis, the number of shares of common stock received by a holder upon
exercise will be fewer than it would have been had such holder exercised his
warrant for cash. This will have the effect of reducing the potential
“upside” of the holder’s investment in our company.
A
market for our securities may not develop or be sustained, which would adversely
affect the liquidity and price of our securities.
Although
our securities are listed on the NYSE Alternext US (formerly the American Stock
Exchange), a national securities exchange, an active trading market for our
securities may never develop or, if developed, it may not be
sustained. Stockholders may be unable to sell their securities unless
a market can be established or sustained.
The
NYSE Alternext US may de-list our securities from quotation on its exchange,
which could limit a stockholder’s ability to make transactions in our securities
and subject us to additional trading restrictions.
Our
securities are listed on the NYSE Alternext US, a national securities
exchange. However, our securities may not continue to be listed on
the NYSE Alternext US in the future. In addition, in connection with
a business combination, it is likely that the NYSE Alternext US may require us
to file a new listing application and meet its initial listing requirements, as
opposed to its more lenient continued listing requirements. We may
not be able to meet those initial listing requirements at that
time.
If the
NYSE Alternext US de-lists our securities from trading on its exchange, we could
face significant material adverse consequences, including:
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a
limited availability of market quotations for our
securities;
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a
determination that our common stock is a “penny stock,” which would
require brokers trading in our common stock to adhere to more stringent
rules and possibly resulting in a reduced level of trading activity in the
secondary trading market for our common
stock;
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a
more limited amount of news and analyst coverage for our
company;
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a
decreased ability to issue additional securities or obtain additional
financing in the future; and
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a
decreased ability of our security holders to sell their securities in
certain states.
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An
effective registration statement may not be in place when a holder desires to
exercise warrants, thus precluding such a holder from being able to exercise its
warrants and causing such warrants to expire worthless.
Holders
of our warrants will be able to exercise the warrants only if (i) a current
registration statement under the Securities Act relating to the shares of our
common stock issuable upon exercise of the warrants is then effective and
(ii) such shares of common stock are qualified for sale or exempt from
qualification under the applicable securities laws of the states in which the
various holders of warrants reside. Although we have undertaken in
the warrant agreement, and therefore have a contractual obligation, to use our
reasonable efforts to maintain a current registration statement covering the
issuance of the shares of common stock issuable upon exercise of the warrants to
the extent required by federal securities laws, and we intend to comply with our
undertaking, we may not be able to do so and therefore the warrants could expire
worthless. Such expiration would result in each holder paying the
full unit purchase price solely for the shares of common stock included in the
units. In addition, we have agreed to use our reasonable efforts to
register the issuance of the shares of common stock issuable upon exercise of
the warrants under the blue sky laws of the states of residence of the existing
warrant holders, to the extent an exemption is not available. The
value of the warrants may be greatly reduced if a registration statement
covering the issuance of the shares of common stock issuable upon the exercise
of the warrants is not kept current or if the securities are not qualified, or
exempt from qualification, in the states in which the holders of warrants
reside. Holders of warrants who reside in jurisdictions in which the
issuance of the shares of common stock issuable upon exercise of the warrants
are not qualified and in which there is no exemption will be unable to exercise
their warrants and would either have to sell their warrants in the open market
or allow them to expire unexercised. In no event will the registered
holders of a warrant be entitled to receive a net cash settlement, stock, or
other consideration in lieu of physical settlement in shares of our common
stock. If and when the warrants become redeemable by us, we may
exercise our redemption right even if we are unable to qualify the underlying
securities for sale under all applicable state securities laws.
Certain
warrant holders are unlikely to receive direct notice of redemption of our
warrants.
We expect
most warrant holders hold their securities through one or more intermediaries
and consequently warrant holders are unlikely to receive notice directly from us
that the warrants are being redeemed. If a warrant holder fails to
receive notice of redemption from a third party and its warrants are redeemed
for nominal value, such warrant holder will not have recourse against
us.
Provisions
in our amended and restated certificate of incorporation, our amended and
restated bylaws and Delaware law may delay or prevent our acquisition by a third
party, which could limit the price investors might be willing to pay in the
future for our common stock and could entrench management.
Our
amended and restated certificate of incorporation and amended and restated
by-laws contain several provisions that may make it more difficult or expensive
for a third party to acquire control of us without the approval of our board of
directors. These provisions also may delay, prevent or deter a
merger, acquisition, tender offer, proxy contest or other transaction that might
otherwise result in our stockholders receiving a premium over the market price
for their common stock. The provisions include, among
others:
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provisions
establishing a board of directors that is divided into three classes with
staggered terms;
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provisions
relating to the number and election of directors, the appointment of
directors upon an increase in the number of directors or vacancy and
provisions permitting the removal of directors only for cause and with a
66 2/3% stockholder vote;
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provisions
requiring a 66 2/3% stockholder vote for the amendment of certain
provisions of our certificate of incorporation and for the adoption,
amendment and repeal of our
by-laws;
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provisions
barring stockholders from calling a special meeting of stockholders or
requiring one to be called;
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elimination
of the right of our stockholders to act by written consent;
and
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provisions
prescribing advance notice procedures for stockholders’ nominations of
directors and proposals for consideration at meetings of
stockholders.
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Moreover,
our board of directors has the ability to designate the terms of and issue new
series of preferred stock. Together, these provisions of our amended
and restated certificate of incorporation, by-laws and Delaware law may make the
removal of management more difficult and may discourage potential takeover
attempts that could otherwise involve payment of a premium over prevailing
market prices for our securities and reduce the price that investors might be
willing to pay for shares of our common stock in the future, which could reduce
the market price of our common stock.
Risks
Relating to Our Officers and Directors and Our Sponsor
Our
ability to successfully effect a business combination and to be successful
thereafter will be totally dependent upon the efforts of our officers and
directors, some or all of whom may not continue with us up until or following a
business combination.
None of
our current key personnel, including our officers, will have entered into
employment or consulting agreements with us prior to our business
combination. Accordingly, such key personnel may not continue in
their positions with us until we have identified and consummated our initial
business combination. Further, although we presently anticipate that
our officers will remain associated in senior management, advisory or other
positions with us following a business combination, some or all of the
management associated with a target business may also remain in
place.
In making
the determination as to whether current management of the target business should
remain with us following the business combination, we will analyze the
experience and skill set of the target business’s management and negotiate as
part of the business combination that our initial officers and directors remain
if it is believed that it is in the best interests of the combined company after
the consummation of the business combination. While we intend to
closely scrutinize any individuals we engage after a business combination, our
assessment of these individuals may not prove to be correct.
Our key
personnel may not continue to provide services to us after the consummation of a
business combination if we are unable to negotiate employment or consulting
agreements with them in connection with or subsequent to the business
combination, the terms of which would be determined at such time between the
respective parties. Such negotiations would take place simultaneously
with the negotiation of the business combination and could provide for such
individuals to receive compensation in the form of cash payments and/or our
securities for services they would render to us after the consummation of the
business combination. While the personal and financial interests of
such individuals may influence their motivation in identifying and selecting a
target business, the ability of such individuals to remain with us after the
consummation of a business combination will not be the determining factor in our
decision as to whether or not we will proceed with any potential business
combination. In addition, it is possible that certain key employees
of a target business may not remain with the surviving company and may need to
be replaced by our officers or other management personnel recruited by
us. We may be unable to successfully fill these positions, which
could materially harm our business and results of operations.
Our
officers and directors are not required to commit their full time to our affairs
and, accordingly, may have conflicts of interest in allocating their time among
various business activities. Such conflicts of interest could have a
negative impact on our ability to consummate a business
combination.
While we
expect that our current officers and directors will devote a portion of their
time to our business, our officers and directors are not required to commit
their full time to our affairs, which could create a conflict of interest when
allocating their time between our operations and their other
commitments. We do not intend to have any full time employees prior
to the consummation of a business combination. All of our current
officers and directors are currently employed by other entities and are not
obligated to devote any specific number of hours to our affairs. If
other entities require them to devote more substantial amounts of time to their
business and affairs, it could limit their ability to devote time to our affairs
and could have a negative impact on our ability to consummate a business
combination. These conflicts may not be resolved in our
favor.
We
may engage in a business combination with one or more target businesses that
have relationships or are affiliated with our officers or directors or our
sponsor, which may raise potential conflicts.
We may
engage in a business combination with one or more target businesses that have
relationships or are affiliated with our officers or directors or our sponsor,
which may raise potential conflicts. We are unable to predict
whether, when or under what circumstances we would pursue or enter into any such
business combination. Also, the consummation of a business
combination between us and an entity owned by a business in which our officers
or directors or our sponsor may have an interest could present a conflict of
interest.
Our
sponsor and our officers and directors currently own shares of our common stock
that will not participate in the liquidation of the trust account and a conflict
of interest may arise in determining whether a particular target business is
appropriate for a business combination.
Our
sponsor, our officers and directors and our other non-public stockholders own
shares of common stock that were issued prior to our initial public offering,
but they have waived their right to participate in any liquidation distribution
with respect to those shares of common stock if we are unable to consummate a
business combination. In addition, our sponsor purchased 10,000,000
warrants directly from us in a private placement immediately prior to the
consummation of our initial public offering at a purchase price of $1.00 per
warrant for a total purchase price of $10 million. The shares of
common stock acquired prior to our initial public offering and any warrants
owned by our sponsor will expire worthless if we do not consummate a business
combination. The personal and financial interests of our officers and
directors may influence their motivation in timely identifying and selecting a
target business and consummating a business
combination. Consequently, the discretion of our officers and
directors in identifying and selecting a suitable target business may result in
a conflict of interest when determining whether the terms, conditions and timing
of a particular business combination are appropriate and in our stockholders’
best interest and as a result of such conflicts management may choose a target
business that is not in the best interests of our public
stockholders.
Our
officers, directors, security holders and their respective affiliates may have a
pecuniary interest in certain transactions in which we are involved, and may
also compete with us.
We have
not adopted a policy that expressly prohibits our directors, officers, security
holders or affiliates from having a direct or indirect pecuniary interest in any
investment to be acquired or disposed of by us or in any transaction to which we
are a party or have an interest. Nor do we have a policy that
expressly prohibits any such persons from engaging for their own account in
business activities of the types conducted by us. Accordingly, such
parties may have an interest in certain transactions such as strategic
partnerships or joint ventures in which we are involved, and may also compete
with us. However, we have adopted a policy that, prior to the
consummation of a business combination, none of our existing officers or
directors or our sponsor, or any entity with which they are affiliated, will be
paid, either by us or a target company, any finder’s fee, consulting fee or
other compensation for any services they render in order to effectuate the
consummation of a business combination, other than (i) the reimbursement of
out-of-pocket expenses, (ii) the monthly administrative services fee of
$10,000 payable to Trian Fund Management, L.P. and (iii) by virtue of their
ownership of sponsor units, sponsor warrants, securities purchased in the after
market or any securities included in or issuable upon exercise of such
securities.
In
the course of their other business activities, our officers and directors may
become aware of investment and business opportunities that may be appropriate
for presentation to our company as well as the other entities with which they
are affiliated. Our officers and directors may have conflicts of
interest in determining to which entity a particular business opportunity should
be presented.
None of
our officers or directors have been or currently are a principal of, or
affiliated or associated with, a blank check company. However, our
officers and directors may in the future become affiliated with additional
entities, including other blank check companies, which may be engaged in
activities similar to those intended to be conducted by us. In
addition, our officers and directors may become aware of business opportunities
that may be appropriate for presentation to us and the other entities to which
they owe fiduciary duties or other contractual
obligations. Accordingly, our officers and directors may have
conflicts of interest in determining to which entity a particular business
opportunity should be presented.
In order
to minimize potential conflicts of interest that may arise from multiple
affiliations, each of our officers and directors (other than our independent
directors) has agreed, until the earliest of the consummation of our business
combination, January 23, 2010 (the date that is 24 months from the date of
the prospectus relating to our initial public offering), or up to July 23, 2010
(30 months from the date of such prospectus) if our stockholders approve an
extension, and such time as he ceases to be an officer or director, to present
to our company for our consideration, prior to presentation to any other entity,
any business combination opportunity involving the potential acquisition of a
controlling interest (whether through the acquisition of a majority of the
voting equity interests of the target or through other means) in a company that
is not publicly traded on a stock exchange or over-the- counter market with an
enterprise value of between $800 million and $3.2 billion, subject to
(i) any fiduciary duties or contractual obligations they may have currently
or in the future in respect of Trian Partners and any companies in which Trian
Partners invests and (ii) any other pre-existing fiduciary duties or
contractual obligations they may have. We expect primarily to target
businesses within this range of enterprise values (calculated as equity value
plus debt, minus cash), although we have the flexibility to acquire a business
outside of this range.
Each of
our officers and directors (other than our independent directors) has a duty to
present Trian Partners with opportunities that meet the investment strategy of
Trian Partners, which consists primarily of making non-control investments in
existing public companies. Mr. Peltz, Mr. May and Mr. Garden are also
directors of Wendy’s/Arby’s Group, Inc. and, in addition to the general
fiduciary duties they owe to Wendy’s/Arby’s, each of them (as well as Trian Fund
Management, L.P.) has a contractual obligation to present Wendy’s/Arby’s with
opportunities relating to investments in excess of 50% of the outstanding voting
securities of businesses relating to the quick service restaurant
industry. This contractual obligation will remain in effect for as
long as Wendy’s/Arby’s continues to control the outstanding equity interest of
businesses in the quick service restaurant industry, one or more of Mr. Peltz,
Mr. May and Mr. Garden serves as a director of Wendy’s/Arby’s and these
individuals together own in excess of 10% of Wendy’s/Arby’s common
equity. Even in the absence of this contractual obligation, Mr.
Peltz, Mr. May and Mr. Garden may owe fiduciary duties to present
Wendy’s/Arby’s with business opportunities relating to the quick service
restaurant industry, before presenting such opportunities to us, for as long as
they serve on Wendy’s/Arby’s board of directors.
In
addition, Mr. Peltz owes a fiduciary duty to H. J. Heinz Company, of which he is
a director, Mr. May owes a fiduciary duty to Tiffany & Co. and Deerfield
Capital Corp., of which he is a director, and Mr. Garden owes a fiduciary duty
to Chemtura Corporation, of which he is a director. To the extent
that such individuals identify business combination opportunities that may be
suitable for entities to which they have pre-existing fiduciary obligations, or
are presented with such opportunities in their capacities as fiduciaries to such
entities, they may honor their pre-existing fiduciary obligations to such
entities. Accordingly, they may not present business combination
opportunities to us that otherwise may be attractive to such entities unless the
other entities have declined to accept such opportunities.
In
addition, our amended and restated certificate of incorporation provides that
the doctrine of corporate opportunity, or any other analogous doctrine, will not
apply against us or any of our officers or directors or our sponsor in
circumstances that would conflict with any fiduciary duties or contractual
obligations they may have currently or in the future in respect of Trian
Partners or any companies in which Trian Partners invests or any other fiduciary
duties or contractual obligations they may have as of January 29, 2008 (the
date of the consummation of our initial public offering).
The
requirement that we consummate a business combination within 24 months (or up to
30 months if our stockholders approve an extension) after the consummation of
our initial public offering may motivate our officers and directors to approve a
business combination during that time period so that they may get their
out-of-pocket expenses reimbursed.
Our
officers and directors and our sponsor may receive reimbursement for
out-of-pocket expenses incurred by them or their affiliates in connection with
activities on our behalf such as identifying potential target businesses and
performing due diligence on suitable business combinations, including traveling
to and from the offices, service centers or similar locations of prospective
target businesses to examine their operations. The funds for such
reimbursement will be provided from the money that is being held outside of the
trust or is permitted to be disbursed to us from the trust. In the
event that we do not effect a business combination by January 23, 2010 (the
date that is 24 months from the date of the prospectus relating to our initial
public offering), or up to July 23, 2010 (30 months from the date of such
prospectus) if our stockholders approve an extension, then any expenses incurred
by such individuals in excess of the money being held outside of the trust or
permitted to be disbursed to us from the trust will not be repaid as we will
liquidate at such time. On the other hand, if we consummate a
business combination within such time period, those expenses may be repaid by
the target business. Consequently, our officers and directors may
have an incentive to approve and consummate a business combination for reasons
other than just what is in the best interest of our stockholders.
Our
sponsor exercises significant influence over us and its interests in our
business may be different than yours.
Our
sponsor, its permitted transferees (including our officers and directors and our
other non-public stockholders) and certain affiliates of Trian Fund Management,
L.P. collectively own approximately 25% of our issued and outstanding common
stock. This ownership interest, together with any other acquisitions
of our shares of common stock (or warrants that are subsequently exercised),
including purchases pursuant to Trian Fund Management, L.P.’s purchase
commitment, could allow our sponsor to influence the outcome of matters
requiring stockholder approval, including the election of directors and approval
of significant corporate transactions after consummation of our business
combination. The interests of our sponsor and our public stockholders
may not always align and taking actions that require approval of a majority of
our stockholders, such as selling the company, may be more difficult to
accomplish. Certain of our directors and affiliates have purchased,
and our sponsor or our officers or directors or any of their affiliates may in
the future purchase, for financial or other reasons, our securities in the open
market or in private transactions in compliance with our insider trading
policy. Any decision to purchase additional securities in the open
market or in private transactions will likely be based on the offering or
trading price of the securities and a determination that the purchase represents
an attractive investment opportunity.
In the
event our sponsor or our officers or directors purchase shares in privately
negotiated transactions from stockholders who have already cast votes against a
proposed business combination and requested conversion of their shares, such
selling stockholders would be required to revoke their prior votes against the
proposed business combination and to revoke their prior elections to convert
their shares and to cast new votes in favor of the proposed business
combination. The revocation of prior negative votes and substitution
therefor of votes in favor of the proposed business combination would have the
effect of reducing conversions and increasing votes in favor of the proposed
business combination, thereby making it more likely that a proposed business
combination would be approved.
We have
opted out of Section 203 of the Delaware General Corporation Law, which,
subject to certain exceptions, prohibits a publicly held Delaware corporation
from engaging in a business combination transaction with an interested
stockholder for a period of three years after the interested stockholder became
such. Therefore, subject to certain transfer restrictions described
herein, our sponsor may transfer control of us to a third party by transferring
our common stock, which would not require the approval of our board of directors
or our other stockholders. In addition, such a change of control may
not involve a merger or other transaction that would require payment of
consideration to our other stockholders. The possibility that such a
change of control could occur may limit the price that investors are willing to
pay in the future for shares of our common stock.
Claims
for indemnification by our officers and directors may reduce the funds available
to satisfy successful third-party claims against us and may reduce the amount of
money in the trust account.
Under our
amended and restated certificate of incorporation and pursuant to certain
indemnity agreements, we have agreed to indemnify our officers and directors
against a variety of expenses (including attorneys’ fees) to the fullest extent
permitted under Delaware law. If indemnification payments are made to
our officers and directors pursuant to our amended and restated certificate of
incorporation and indemnity agreements, the amount of money in the trust account
may be reduced.
In
certain circumstances, our board of directors may be viewed as having breached
its fiduciary duty to our creditors, thereby exposing itself and our company to
claims of punitive damages.
If we are
forced to file a bankruptcy case or an involuntary bankruptcy case is filed
against us that is not dismissed, any distributions received by stockholders
could be viewed under applicable debtor/creditor and/or bankruptcy laws as
either a “preferential transfer” or a “fraudulent conveyance.” As a result, a
bankruptcy court could seek to recover all amounts received by our
stockholders. Furthermore, because we intend to distribute the
proceeds held in the trust account to our public stockholders on a pro rata
basis promptly after the termination of our existence by operation of law, this
may be viewed or interpreted as giving preference to our public stockholders
over any potential creditors with respect to access to or distributions from our
assets. Furthermore, our board of directors may be viewed as having
breached its fiduciary duty to our creditors and/or acted in bad faith, by
paying public stockholders from the trust account prior to addressing the claims
of creditors. Claims may be brought against us for these reasons
thereby exposing our board of directors and our company to claims of punitive
damages.
ITEM
1B.
Unresolved Staff
Comments.
None.
We
currently maintain our executive offices at 280 Park Avenue, 41st Floor, New
York, New York 10017. The cost for this space is included in the
$10,000 per month fee that Trian Fund Management, L.P. charges us for general
and administrative services. We believe, based on rents and fees for
similar services in the New York metropolitan area, that the fee charged by
Trian Fund Management, L.P. is at least as favorable as we could have obtained
from an unaffiliated person. We consider our current office space
adequate for our current operations.
|
ITEM
3.
|
Legal Proceedings
|
We are
not currently subject to any material legal proceedings, nor, to our knowledge,
is any material legal proceeding threatened against us.
|
ITEM
4.
|
Submission of Matters to a Vote of Security
Holders
.
|
No matters were submitted to a vote of
security holders during the fourth quarter of the fiscal year covered by this
Annual Report on Form 10-K
PART
II
|
ITEM
5.
|
Market for Registrant’s Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity
Securities.
|
Market
Information
Our units
began trading on the NYSE Alternext US (formerly named the American Stock
Exchange) on January 24, 2008 under the symbol “TUX.U,” prior to which there was
no established public trading market for our securities. Each of our
units consists of one share of common stock and one warrant to purchase an
additional share of common stock. On February 5, 2008, the
warrants and common stock underlying our units began to trade separately on the
NYSE Alternext US under the symbols “TUX.WS” and “TUX,”
respectively. Each warrant entitles the holder to purchase one share
of our common stock at a price of $7.00 commencing on the later of our
consummation of a business combination and January 23, 2009, provided that
we have an effective registration statement covering the common stock issuable
upon exercise of the warrants and a current prospectus is
available. The warrants will expire on January 23, 2013, or
earlier upon redemption.
The
following table sets forth the high and low sales prices per unit, warrant and
share of common stock, respectively, as reported on the NYSE Alternext
US. The quotations listed below reflect interdealer prices, without
retail markup, markdowns or commission and may not necessarily represent actual
transactions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
|
|
|
Warrants
|
|
|
Common
Stock
|
|
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
|
|
|
March 31,
2008(1)(2)
|
|
$
|
10.50
|
|
|
$
|
9.73
|
|
|
$
|
1.11
|
|
|
$
|
.65
|
|
|
$
|
9.30
|
|
|
$
|
9.00
|
|
|
June 30,
2008
|
|
$
|
10.47
|
|
|
$
|
9.65
|
|
|
$
|
1.06
|
|
|
$
|
.61
|
|
|
$
|
9.40
|
|
|
$
|
9.00
|
|
|
September 30,
2008
|
|
$
|
10.23
|
|
|
$
|
8.97
|
|
|
$
|
.83
|
|
|
$
|
.23
|
|
|
$
|
9.35
|
|
|
$
|
8.75
|
|
|
December 31,
2008
|
|
$
|
9.45
|
|
|
$
|
8.70
|
|
|
$
|
.39
|
|
|
$
|
.15
|
|
|
$
|
9.09
|
|
|
$
|
8.25
|
|
_____
|
(1)
|
Represents
the high and low sales prices from January 24, 2008, the first day our
units began trading.
|
|
(2)
|
Represents
the high and low sales prices from February 5, 2008, the first day our
warrants and common stock became separately
tradable.
|
Holders
of Common Equity
On March
2, 2009, there were approximately 2 holders of record of our units,
approximately 2 holders of record of our warrants and approximately 13 holders
of record of our common stock. Such numbers do not include beneficial
owners holding shares, warrants or units through nominee names.
Dividends
On
January 23, 2008, prior to the closing of our initial public offering, we
declared a dividend of 0.06667 shares of common stock for each share of common
stock issued and outstanding and adjusted the number of sponsor units and
warrants included in (or formerly included in) such units, so that, after giving
effect to our initial public offering, our sponsor, our officers and directors
and our other non-public stockholders and their permitted transferees own 20% of
our issued and outstanding units (or their equivalent in shares of common stock
and warrants). Except for this stock dividend, we have not paid any
dividends on our common stock to date and will not pay cash dividends prior to
the consummation of our business combination. After we consummate our
business combination, the payment of dividends will depend on our revenues and
earnings, if any, our capital requirements and our general financial
condition. The payment of dividends after our business combination
will be within the discretion of our board of directors at that
time. Our board of directors currently intends to retain any earnings
for use in our business operations and, accordingly, we do not anticipate that
our board will declare any dividends in the foreseeable
future. Further, any credit agreements we enter into in connection
with our business combination or otherwise may restrict or prohibit payment of
dividends. In the event that we do declare dividends, our board of
directors will determine the dates on which any entitlements to dividends arise,
the methods of calculating such dividends and the cumulative or non-cumulative
nature of dividend payments.
Stock
Price Performance Graph
The
following graph compares the cumulative total return for our common stock from
February 5, 2008, the date our common stock first became separately
tradable, through December 31, 2008 with the comparable cumulative return of two
indices, the S&P 500 Index and the NYSE Alternext US Composite (formerly the
Amex Composite Index). The graph assumes $100 invested on February
5, 2008 in our common stock and $100 invested at that same time in each of
the two listed indices.
Recent
Sales of Unregistered Securities
The
information in this section has been adjusted to reflect a dividend on
January 23, 2008 of 0.06667 shares of common stock for each share of common
stock issued and outstanding on such date and a corresponding adjustment to the
number of sponsor units and warrants included in (or formerly included in) such
units.
On
October 29, 2007, we sold 23,000,000 units, with each unit consisting of
one share of common stock and one warrant to purchase one share of common stock,
to our sponsor without registration under the Securities Act. Such
securities were issued in connection with our organization pursuant to the
exemption from registration contained in Section 4(2) of the Securities Act
as they were sold to an accredited investor. The securities were sold
for an aggregate offering price of $25,000 at an average purchase price of
approximately $0.0011 per unit.
In
addition, our sponsor purchased from us 10,000,000 warrants at $1.00 per warrant
(for an aggregate purchase price of $10 million). This purchase
occurred on a private placement basis on January 29, 2008 immediately prior
to the consummation of our initial public offering. The issuance of
the sponsor warrants was made pursuant to the exemption from registration
contained in Section 4(2) of the Securities Act as they were sold to an
accredited investor.
Securities
Authorized for Issuance Under Equity Compensation Plans
We have
no compensation plans under which equity securities are authorized for
issuance.
Use
of Proceeds from our Initial Public Offering
On
January 29, 2008, we consummated our initial public offering of 92,000,000
units (including 12,000,000 units sold pursuant to the underwriters’
over-allotment option), each unit consisting of one share of common stock and
one warrant to purchase one share of common stock at $7.00 per
share. The units were sold at a price of $10.00 per unit, generating
gross proceeds of $920 million. Also on January 29, 2008, we
completed the sale of 10,000,000 warrants to our sponsor at a purchase price of
$1.00 per warrant, generating gross proceeds to the Company of $10
million. The securities sold in our initial public offering were
registered under the Securities Act on a registration statement on Form S-1
(File Nos. 333-147094 and 333-148830). The SEC declared
the registration statement effective on January 23,
2008. Deutsche Bank Securities Inc. and Merrill Lynch & Co.
served as joint bookrunning managers of the offering, and Maxim Group LLC served
as co-manager.
We
received net proceeds of approximately $905.6 million from our initial public
offering and the sale of the sponsor warrants, of which $29.8 million is
attributable to the portion of the underwriters’ discount that has been deferred
until the consummation of our business combination. The net proceeds
were deposited in a trust account then maintained by Wilmington Trust Company
(“Wilmington”). Effective October 1, 2008, in accordance with the
terms of the investment management trust agreement dated as of January 23, 2008
(the “Original Trust Agreement”) between us and Wilmington, by mutual agreement
of the parties, Wilmington resigned as trustee and custodian and we appointed
U.S. Trust as successor trustee and custodian. We and U.S. Trust have
entered into an Amended and Restated Investment Management Trust Agreement dated
as of October 1, 2008, the terms of which are substantially the same as the
Original Trust Agreement. These funds will not be released until the
earlier to occur of our business combination and our dissolution and
liquidation, except that the underwriters’ deferred discount will be payable to
the underwriters only upon the consummation of our business combination, and
will be reduced pro ratably to the extent public stockholders exercise
conversion rights. Up to $9.5 million of the income earned on the
trust account may be released to us to fund expenses related to investigating
and selecting a target business and other working capital requirements, and any
amounts necessary to pay any tax obligations on the income earned on the trust
account and to pay trust account expenses may also be released to
us. The net proceeds deposited into the trust account remain on
deposit in the trust account and earned approximately $12.2 million in gross
interest income through December 31, 2008.
Since the
consummation of our initial public offering on January 29, 2008, we have
not incurred any significant expenses relating to the
offering. However, certain legal and printing and engraving expenses
previously incurred in connection with the offering, in the amount of $350,000
in the aggregate, were deferred until after the consummation of the offering and
have since been paid from income earned on the trust account.
Purchases
of Equity Securities by the Issuer and Affiliated Purchasers
The
following table provides information with respect to purchases of our securities
by our “affiliated purchasers” (as defined in Rule 10b-18(a)(3) under the
Securities Exchange Act of 1934, as amended) during the fourth fiscal quarter of
2008:
Issuer
Repurchases of Equity Securities
|
Period
|
Total
Number of Shares Purchased (1)
|
Average
Price Paid Per Share
|
Total
Number of Shares Purchased As Part of Publicly Announced
Plan (2)
|
Approximate
Dollar Value of Shares That May Yet Be Purchased Under the Plan
(2)
|
|
October
1, 2008
through
October
31, 2008
|
5,141,300 common
728,000 units
1,583,000 warrants
|
$8.86
$8.91
$0.26
|
---
|
---
|
|
November
1, 2008
through
November
31, 2008
|
---
|
---
|
---
|
---
|
|
December
1, 2008
through
December
31, 2008
|
1,000,000 warrants
|
$0.29
|
---
|
|
|
Total
|
5,141,300 common
728,000 units
2,583,000 warrants
|
|
---
|
---
|
|
(1)
|
Represents
common stock, units and warrants purchased by funds and accounts that are
managed by Trian Fund Management, L.P. and that may be deemed to be under
common control with us. All such purchases were made in open
market transactions.
|
|
(2)
|
We do not have a
securities repurchase program and have not repurchased any of our
securities to date.
|
|
ITEM
6.
|
Selected Financial
Data
|
|
|
|
|
|
|
|
|
Period
from
|
|
|
Period
from
|
|
|
|
|
|
|
|
October
16,
|
|
|
October
16,
|
|
|
|
|
|
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
(inception)
to
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
Statement
of Operations Data:
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
12,197,688
|
|
|
$
|
253
|
|
|
$
|
12,197,435
|
|
|
Professional
fees and other expenses
|
|
|
1,526,884
|
|
|
|
116,575
|
|
|
|
1,410,309
|
|
|
Provision
for income taxes
|
|
|
4,805,354
|
|
|
|
--
|
|
|
|
4,805,354
|
|
|
Net
income (loss)
|
|
|
5,865,450
|
|
|
|
(116,322
|
)
|
|
|
5,981,772
|
|
|
Deferred
interest, net of taxes, attributable to common
stock
subject to redemption
|
|
|
(2,135,033
|
)
|
|
|
--
|
|
|
|
(2,135,033
|
)
|
|
Net
income attributable to common stock
|
|
|
3,730,417
|
|
|
|
(116,322
|
)
|
|
|
3,846,739
|
|
|
Earnings
per share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares outstanding, basic
and
diluted
|
|
|
64,405,418
|
|
|
|
23,000,000
|
|
|
|
73,747,542
|
|
|
Net
income (loss) per share, basic and diluted:
|
|
$
|
0.06
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement
of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
cash and cash equivalents provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
activities
|
|
$
|
470,318
|
|
|
$
|
(36,747
|
)
|
|
$
|
507,065
|
|
|
Investing
activities
|
|
|
(905,608,000
|
)
|
|
|
--
|
|
|
|
(905,608,000
|
)
|
|
Financing
activities
|
|
|
905,313,296
|
|
|
|
154,521
|
|
|
|
905,158,775
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2007
|
|
|
December 31,
2008
|
|
|
|
|
|
|
|
|
|
|
Balance
Sheet Data:
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
117,774
|
|
|
$
|
175,614
|
|
|
Restricted
cash equivalents held in the trust account
|
|
|
--
|
|
|
|
231,474,921
|
|
|
Restricted
short-term investments held in the trust account
|
|
|
--
|
|
|
|
678,943,070
|
|
|
Total
assets
|
|
|
1,053,753
|
|
|
|
911,562,179
|
|
|
Common
stock subject to conversion
|
|
|
--
|
|
|
|
362,152,639
|
|
|
Total
stockholders’ equity (deficit)
|
|
|
(94,583
|
)
|
|
|
517,083,074
|
|
|
ITEM
7.
|
Management’s Discussion and Analysis of Financial Condition and
Results of Operations
|
Overview
We are a
blank check company formed on October 16, 2007 for the purpose of effecting
a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more domestic or
international operating businesses or assets. We consummated our
initial public offering on January 29, 2008. We are currently in
the process of evaluating and identifying targets for a business
combination. Our efforts in identifying prospective target businesses
are not limited to a particular industry or group of industries.
We intend
to effect our business combination using cash from the proceeds of our initial
public offering, our capital stock, debt or a combination of cash, stock and
debt.
The
issuance of additional shares of our stock in a business
combination:
|
·
|
may
significantly dilute the equity interest of our public
stockholders;
|
|
·
|
may
subordinate the rights of holders of common stock if preferred stock is
issued with rights senior to those afforded our common
stock;
|
|
·
|
may
cause a change in control if a substantial number of our shares of common
stock are issued, which may affect, among other things, our ability to use
our net operating loss carry forwards, if any, and could result in the
resignation or removal of our present officers and directors and cause our
public stockholders to become minority stockholders in the combined
entity;
|
|
·
|
may
have the effect of delaying or preventing a change of control of us by
diluting the stock ownership or voting rights or a person seeking to
obtain control of our company; and
|
|
·
|
may
adversely affect prevailing market prices for our common stock and/or
warrants.
|
Similarly,
if we issue debt securities, it could result in:
|
·
|
default
and foreclosure on our assets if our operating revenues after a business
combination are insufficient to repay our debt
obligations;
|
|
·
|
acceleration
of our obligations to repay the indebtedness even if we make all principal
and interest payments when due if we breach certain covenants that require
the maintenance of certain financial ratios or reserves without a waiver
or renegotiation of that covenant;
|
|
·
|
our
immediate payment of all principal and accrued interest, if any, if the
debt security is payable on demand;
and
|
|
·
|
our
inability to obtain necessary additional financing if the debt security
contains covenants restricting our ability to obtain such financing while
the debt security is outstanding.
|
If we are
unable to consummate our business combination by January 23, 2010 (or July 23,
2010 if our stockholders approve an extension), our charter requires that we
wind up our affairs and liquidate. Our plans to consummate our
business combination may not be successful and, accordingly, we may be required
to liquidate as soon as practicable after January 23, 2010 (or up to July 23,
2010 if our stockholders approve an extension).
Results
of Operations and Known Trends or Future Events
We have
neither engaged in any operations nor generated any revenues to date (other than
interest income), other than in connection with our initial public
offering. Our only activities since inception have been
organizational activities, those necessary to consummate our initial public
offering and those in connection with identifying and investigating targets for
a business combination. We will not generate any operating revenues
until after consummation of our business combination. We will
generate non-operating income in the form of interest income on cash, cash
equivalents and investments. We have incurred expenses as a result of
being a public company (for legal, financial reporting, accounting and auditing
compliance), as well as for due diligence activities. We expect our
expenses to increase substantially.
For the
year ended December 31, 2008, we had interest income of $12.2 million,
substantially all of which related to the investment of $905.6 million of the
net proceeds from our initial public offering in restricted cash equivalents and
short-term investments. We also recognized $1.4 million of
professional fees and other expenses during that period. After
recognizing an income tax provision of $4.8 million, we had net income for the
year ended December 31, 2008 of $6.0 million. For the period from
October 16, 2007 (our inception) to December 31, 2008, we had interest income of
$12.2 million, recognized $1.5 million of professional fees and other expenses
and, after recognizing an income tax provision of $4.8 million, had net income
of $5.9 million. For the period from October 16, 2007 (our inception)
to December 31, 2007, our net loss of $0.1 million reflected professional fees
and other expenses of $0.1 million.
For the
year ended December 31, 2008, our operating activities provided cash and cash
equivalents of $0.5 million, our investing activities used cash and cash
equivalents of $905.6 million and our financing activities provided cash and
cash equivalents of $905.2 million. For the period from October 16,
2007 (our inception) to December 31, 2008, our operating activities provided
cash and cash equivalents of $0.5 million, our investing activities used cash
and cash equivalents of $905.6 million and our financing activities provided
cash and cash equivalents of $905.3 million. For the period from
October 16, 2007 (our inception) to December 31, 2007, the $0.1 million increase
in cash and cash equivalents principally reflected cash and cash equivalents
provided by financing activities.
Liquidity
and Capital Resources
A total
of $905.6 million of the net proceeds from our initial public offering,
including $10.0 million from the sale of the sponsor warrants in a private
placement and $29.8 million of deferred underwriting commissions, was placed in
a trust account initially at Wilmington Trust Company, which we refer to as
Wilmington, with Wilmington serving as trustee and
custodian. Effective October 1, 2008, in accordance with the terms of
the investment management trust agreement dated as of January 23, 2008 between
us and Wilmington, which we refer to as the Original Trust Agreement, by mutual
agreement of the parties, Wilmington resigned as trustee and custodian of the
trust account and we appointed U.S. Trust Company of Delaware, which we refer to
as U.S. Trust, as successor trustee and custodian. We and U.S. Trust
have entered into an amended and restated investment management trust agreement
dated as of October 1, 2008, the terms of which are substantially the same as
the Original Trust Agreement.
As of
December 31, 2008, the trust account was invested in Treasury bills with
maturities ranging from 64 to 178 days when purchased and, to a lesser extent, a
money market mutual fund that invests exclusively in U.S. Treasury
securities. In addition, after the effect of $0.8 million that was
deducted from the offering proceeds to pay expenses of the offering, we received
$0.5 million of the offering proceeds to be held outside of the trust account to
fund a portion of our working capital requirements. A portion of the
amount held outside the trust account was used to repay a $0.25 million loan
from our sponsor, the proceeds of which had been used to fund offering related
expenses.
As of
December 31, 2008, the balance in the trust account was $910.4 million, or
approximately $9.90 per share held by stockholders that participated in our
initial public offering, which we refer to as our public
stockholders. Up to $9.5 million of interest income earned on the
cash equivalents and short-term investments in the trust account may be
withdrawn to fund general and administrative expenses. Amounts
necessary to pay (a) income taxes and (b) the trustee’s investment management
fees, which fees may not exceed $0.35 million per year, may also be withdrawn in
addition to the $9.5 million of interest income. From the
establishment of the trust account through December 31, 2008, $12.2 million
of interest income was earned, $5.5 million was withdrawn to pay estimated
income tax payments, $0.2 million was withdrawn to pay the trustee’s investment
management fees and $1.7 million was withdrawn to fund general and
administrative expenses, including $0.35 million of legal and printing and
engraving expenses previously incurred in connection with the offering but that
had been deferred until after the consummation of the offering. As of
December 31, 2008, the balance of our cash and cash equivalents held outside the
trust account was $0.2 million.
Prior to
the consummation of a business combination, we intend to use a substantial
portion of the cash released to us from the trust account in connection with
identifying and evaluating prospective target businesses, selecting one or more
target businesses, and structuring and negotiating the business
combination. We intend to effect a business combination using the
proceeds from our initial public offering, our capital stock, debt or a
combination of cash, stock and debt. The proceeds held in the trust
account (less amounts paid to any public stockholders who exercise their
conversion rights and deferred underwriting commissions paid to the
underwriters) that are not utilized as part of the consideration for a business
combination will be released to us and will be available to finance the
operations of the target business or businesses. Such working capital
funds could be used in a variety of ways including continuing or expanding the
target business’ operations, for strategic acquisitions or the payment of
principal or interest due on indebtedness incurred in consummating a business
combination or preexisting indebtedness of the target business. Such
funds could also be used to repay any operating expenses or finder’s fees that
we had incurred prior to the consummation of our business combination if the
funds available to us outside of the trust account were insufficient to cover
such expenses.
We expect
to have available to us up to an aggregate of $10.8 million to fund our working
capital requirements and certain other expenses, comprised of (1) $0.8 million
of offering expense reimbursement obtained from the proceeds of our initial
public offering, (2) $0.5 million of working capital held outside the trust
account and also obtained from the proceeds of our initial public offering and
(3) income of up to $9.5 million, net of income taxes, earned on the
balance of the trust account. Of this amount, we have used an
aggregate of $2.8 million to fund offering expenses and general and
administrative expenses through December 31, 2008. We expect to earn
sufficient interest income on the cash equivalents and short-term investments
held in the trust account in order to generate the $9.5 million permitted to be
withdrawn from the trust account. However, due to the current low
level of interest rates on U.S. Treasury securities, there can be no assurance
that sufficient interest income will be generated. We believe the
remaining $8.0 million will be sufficient to allow us to operate at least until
January 23, 2010 (the date that is 24 months from the date of the
prospectus relating to our initial public offering), or up to July 23, 2010
(30 months from the date of such prospectus) if extended pursuant to a
stockholder vote, assuming our business combination is not consummated during
that time. We estimate our primary liquidity requirements during that
period to include legal, accounting and other expenses associated with
structuring, negotiating and documenting a business combination, the trustee’s
investment management fees, payments to Trian Fund Management, L.P. of $10,000
per month for up to 24 months (or up to 30 months in the event our stockholders
approve an extension) for office space, administrative services and support,
legal and accounting fees related to regulatory reporting requirements, and
general working capital that will be used for miscellaneous expenses and
reserves, including director and officer liability insurance.
On
November 5, 2007, our sponsor made a $250,000 loan to us to fund a portion of
the organizational and offering expenses owed by us to third
parties. The principal balance of the loan was repaid on January 29,
2008.
If our
estimates of the costs of undertaking in-depth due diligence and negotiating a
business combination are less than the actual amount necessary to do so, we may
have insufficient funds available to operate our business prior to our business
combination. Moreover, we may need to obtain additional financing
either to consummate our business combination or because we become obligated to
convert into cash a significant number of shares of public stockholders voting
against our business combination, in which case we may issue additional
securities or incur debt in connection with such business
combination. Following our business combination, if cash on hand is
insufficient, we may need to obtain additional financing in order to meet our
obligations.
Off-Balance
Sheet Arrangements
We have
never entered into any off-balance sheet financing arrangements and have never
established any special purposes entities. We have not guaranteed any
debt or commitments of other entities or entered into any options on
non-financial assets.
Contractual
Obligations
We do not
have any long-term debt, capital lease obligations, operating lease obligations,
purchase obligations or other long-term liabilities.
We are
obligated to pay a $10,000 monthly fee to Trian Fund Management, L.P. for office
space, administrative services and support for up to 24 months (or up to 30
months in the event our stockholders approve an extension) from the date of our
initial public offering. As of December 31, 2008, the maximum amount
of future payments under this obligation is $180,000 through July 23,
2010. This obligation terminates upon the earlier of the consummation
of our business combination and our liquidation.
Application
of Critical Accounting Policies
The preparation of our financial
statements in conformity with generally accepted accounting principles requires
us to make estimates and assumptions in applying our critical accounting
policies that affect the reported amounts of assets, liabilities, revenues and
expenses. We evaluate those estimates and assumptions on an ongoing
basis based on various factors we believe are reasonable.
We believe that the following represent
our more critical accounting policies used in the preparation of our financial
statements:
Restricted cash equivalents and
short-term investments held in the trust account
—Of the net proceeds of
our initial public offering and the private placement, $905.6 million was placed
in the trust account including $29.8 million of deferred underwriters’
discount. These amounts are classified as restricted assets since
such amounts can only be used by us in connection with a business
combination. At December 31, 2008, the Trust Account is invested in
U.S. Treasury bills and a money market mutual fund that invests only in U.S.
Treasury securities.
Restricted cash equivalents held in
the trust account
—We classify investments in U.S. Treasury bills with
maturities of 90 days or less when purchased and money market mutual fund
investments as “Restricted cash equivalents held in the trust
account.”
Restricted short-term investments
held in the trust account
—We classify investments in U.S. Treasury bills
with maturities greater than 90 days and less than 181 days when purchased as
“Restricted short-term investments held in the trust account.” These
investments are classified as held-to-maturity and, accordingly, are carried at
amortized cost.
Common stock subject to
redemption
—We will only proceed with a business combination if (1) it is
approved by a majority of the votes cast by public stockholders and (2) public
stockholders holding less than 40% (36 million) of the shares of common stock
sold in the offering exercise their conversion rights. Accordingly,
we have classified 36.8 million shares of our common stock outside of permanent
equity. We recognize changes in the redemption value as they occur
and adjust the carrying value of deferred interest attributable to common stock
subject to redemption to reflect the required adjustment to the redemption value
at the end of each reporting period by an adjustment to the surplus accumulated
during the development stage, or in the absence of a surplus, by an adjustment
to paid-in capital.
Income per share
—Basic and
diluted income per share is computed by dividing net income attributable to
common stock by the weighted average number of shares of common stock
outstanding, excluding the common stock subject to redemption, during the
period. The exclusion of common stock subject to redemption for
income per share purposes gives effect to the fact that we may be required, upon
the exercise of stockholder conversion rights, to redeem those shares for
their pro rata portion of the trust account, as a result of which the terms of
the common stock subject to redemption are considered to be substantially
different than those of the common stock. Increases in the redemption
value of the common stock subject to redemption reduce the net income
attributable to common stock. Warrants have not been considered in
the calculation of income per share because the shares underlying the
warrants are contingently issuable.
Recently
Issued Accounting Pronouncements
In
December 2007, the Financial Accounting Standards Board, with we refer to as the
FASB, issued Statement No. 141 (revised 2007), “Business Combinations,” which we
refer to as SFAS 141(R). SFAS 141(R) retains the fundamental
requirements of SFAS 141 that the acquisition method of accounting (which SFAS
141 called the purchase method) be used for all business combinations and for an
acquirer to be identified for each business combination. SFAS 141(R)
establishes principles and requirements for recognizing and measuring
identifiable assets and goodwill acquired, liabilities assumed, and any
noncontrolling interest in an acquisition, at their fair value as of the
acquisition date. SFAS 141(R) also requires an acquirer to recognize
assets acquired and liabilities assumed arising from contractual contingencies
as of the acquisition date, measured at their acquisition-date fair
values. Additionally, SFAS 141(R) will require that
acquisition-related costs in a business combination be expensed as incurred,
except for costs incurred to issue debt and equity securities. This statement
applies prospectively to business combinations effective with our first fiscal
quarter of 2009. Early adoption is not permitted. We are
in the process of evaluating the impact SFAS 141(R) may have on our financial
position and results of operations.
In
December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in
Consolidated Financial Statements – an amendment of Accounting Research Bulletin
No. 51,” which we refer to as SFAS 160. SFAS 160 amends Accounting
Research Bulletin No. 51 to establish accounting and reporting standards for the
noncontrolling interest, also referred to as minority interest, in a subsidiary
and for the deconsolidation of a subsidiary. SFAS 160 requires that
the noncontrolling interest in a subsidiary be clearly identified and presented
within the equity section of the consolidated statement of financial position
but separate from the company’s equity. Consolidated net income
attributable to the parent and to the noncontrolling interest must be clearly
identified and presented on the face of the consolidated statement of
income. SFAS 160 requires that any subsequent changes in a parent’s
ownership interest while still retaining its controlling financial interest in
its subsidiary must be accounted for as equity transactions on a consistent
basis. In addition, SFAS 160 requires that upon the deconsolidation
of a subsidiary, both the gain or loss arising from the deconsolidation and any
retained noncontrolling equity investment in the former subsidiary be measured
at fair value. SFAS 160 is effective commencing with our first fiscal
quarter of 2009. Early adoption is not permitted. We are
in the process of evaluating the impact FAS 160 may have on our financial
position and results of operations.
In September 2006, the FASB issued
Statement No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157
defines fair value, expands disclosures about fair value measurements,
establishes a framework for measuring fair value in accordance with generally
accepted accounting principles and establishes a hierarchy that categorizes and
prioritizes the sources to be used to estimate fair value. On
February 12, 2008, the FASB issued FSP No. 157-2, “Effective Date of FASB
Statement No. 157” (“FSP 157-2”), which delayed the effective date of SFAS 157
for one year for all nonfinancial assets and nonfinancial liabilities, except
those that are recognized or disclosed at fair value in the financial statements
on a recurring basis. We adopted the provisions of SFAS 157 on
January 1, 2008 on a prospective basis, except for those items for which we
elected deferral under the provisions of FSP 157-2, which became effective on
January 1, 2009. The adoption of SFAS 157 did not have a significant
impact on our 2008 financial statements. We are in the process of
evaluating the impact that adopting the provisions of SFAS 157 that were
deferred by FSP 157-2 may have on our financial position and results of
operations.
We do not believe that any other
recently issued, but not effective, accounting standards, if currently adopted,
would have a material effect on our financial statements.
ITEM 7A.
Quantitative and Qualitative Disclosures About Market
Risk.
The net
proceeds from our initial public offering, including amounts in the trust
account, have been invested in U.S. government treasury bills with a maturity of
180 days or less or in money market funds meeting certain conditions under Rule
2a-7 under the Investment Company Act. As of December 31, 2008, the
aggregate carrying amounts of the investments in Treasury bills (held at
amortized cost) and a money market fund were $788.9 million and $121.5 million,
respectively. The Treasury bills had remaining maturities ranging
from 2 to 169 days as of December 31, 2008, with a weighted average remaining
maturity of 106 days. We are subject to interest rate risk to the
extent of changes in interest rates on U.S. Treasury
securities. However, due to the short-term nature of these
investments, we do not believe the associated risk is material. As of
December 31, 2008, the aggregate estimated fair values of the investments in
Treasury bills and the money market fund were $789.8 million and $121.5 million,
respectively. We do not believe we have significant exposure to other
types of market risk, such as equity price risk.
|
ITEM
8.
|
Financial Statements and Supplementary
Data
.
|
INDEX
TO FINANCIAL STATEMENTS
|
|
|
|
|
|
|
Report
of Independent Registered Public Accounting Firm
|
|
|
Balance
Sheets as of December 31, 2007 and December 31, 2008
|
|
|
Statements
of Operations for the period from October 16, 2007 (inception) to December
31, 2008,
|
|
|
for
the period from October 16, 2007 (inception) to December 31, 2007 and for
the year ended
|
|
|
December
31, 2008
|
|
|
Statement
of Stockholders’ Equity (Deficit) for the period from October 16, 2007
(inception) to December 31,
2008
|
|
|
Statements
of Cash Flows for the period from October 16, 2007 (inception) to December
31, 2008, for the period from October 16, 2007 (inception) to December 31,
2007 and for the year ended December 31, 2008
|
|
|
Notes
to Financial Statements
|
|
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the
Board of Directors and Stockholders of
Trian
Acquisition I Corp.:
We have audited the accompanying
balance sheets of Trian Acquisition I Corp. (a corporation in the development
stage) (the “Company”) as of December 31, 2008 and December 31, 2007, and the
related statements of operations, stockholders’ equity (deficit) and cash flows
for the period from October 16, 2007 (date of inception) to December 31, 2008,
for the period from October 16, 2007 (inception) to December 31, 2007 and for
year ended December 31, 2008. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such financial
statements present fairly, in all material respects, the financial position of
the Company as of December 31, 2008 and 2007, and the results of its operations
and its cash flows for the period from October 16, 2007 (date of inception) to
December 31, 2008, for the period from October 16, 2007 (inception) to December
31, 2007 and for year ended December 31, 2008, in conformity with accounting
principles generally accepted in the United States of America.
As described in Note 1 to the financial
statements, the Company will only continue in existence for a specified period
of time if a business combination is not consummated by January 23, 2010 (or
July 23, 2010 if an extension is approved by the Company’s
stockholders).
We have also audited, in accordance
with the Standards of the Public Company Accounting Oversight Board (United
States), the Company’s internal control over financial reporting as of December
31, 2008, based on the criteria established in
Internal Control-Integrated
Framework
issued by the Committee of Sponsoring Organization of the
Treadway Commission, and our report dated March 16, 2009 expressed an
unqualified opinion on the Company’s internal control over financial
reporting.
/s/
Deloitte & Touche LLP
New York,
New York
March 16,
2009
TRIAN
ACQUISITION I CORP.
(A
Development Stage Company)
BALANCE
SHEETS
|
|
|
December
31,
|
|
|
December
31,
|
|
|
|
|
2007
|
|
|
2008
|
|
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
117,774
|
|
|
$
|
175,614
|
|
|
Restricted
cash equivalents held in the trust account (Notes 1 and 3)
|
|
|
--
|
|
|
|
231,474,921
|
|
|
Restricted
short-term investments held in the trust account (Notes 1 and
3)
|
|
|
--
|
|
|
|
678,943,070
|
|
|
Prepaid
income taxes
|
|
|
--
|
|
|
|
684,646
|
|
|
Other
prepaid expenses
|
|
|
--
|
|
|
|
283,928
|
|
|
Total
current assets
|
|
|
117,774
|
|
|
|
911,562,179
|
|
|
Noncurrent
assets:
|
|
|
|
|
|
|
|
|
|
Deferred
offering costs
|
|
|
935,979
|
|
|
|
--
|
|
|
Total
assets
|
|
$
|
1,053,753
|
|
|
$
|
911,562,179
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
and Stockholders’ Equity (Deficit)
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Accrued
expenses
|
|
$
|
895,075
|
|
|
$
|
383,433
|
|
|
Deferred
underwriters’ discount (Note 1)
|
|
|
--
|
|
|
|
29,808,000
|
|
|
Note
payable to sponsor (Note 5)
|
|
|
250,000
|
|
|
|
--
|
|
|
Total
current liabilities
|
|
|
1,145,075
|
|
|
|
30,191,433
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock subject to redemption, $0.0001 par value;
|
|
|
|
|
|
|
|
|
|
3,000,000
shares issued and outstanding at December 31, 2007,
|
|
|
|
|
|
|
|
|
|
36,799,999
shares issued and outstanding at December 31, 2008
|
|
|
|
|
|
|
|
|
|
(Note
1)
|
|
|
3,261
|
|
|
|
362,152,639
|
|
|
Deferred
interest attributable to common stock subject to
redemption
|
|
|
|
|
|
|
|
|
|
(net
of income taxes of $1,746,845) (Note 1)
|
|
|
--
|
|
|
|
2,135,033
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’
equity (deficit):
|
|
|
|
|
|
|
|
|
|
Preferred
stock, $0.0001 par value; 1,000,000 shares authorized;
|
|
|
|
|
|
|
|
|
|
none
issued or outstanding (Note 7)
|
|
|
--
|
|
|
|
--
|
|
|
Common
stock, $0.0001 par value; 225,000,000 shares authorized,
|
|
|
|
|
|
|
|
|
|
20,000,000
shares issued and outstanding at December 31, 2007,
|
|
|
|
|
|
|
|
|
|
500,000,000
shares authorized; 78,200,001 shares issued and
|
|
|
|
|
|
|
|
|
|
outstanding
at December 31, 2008 (Notes 1, 2 and 7)
|
|
|
2,000
|
|
|
|
7,820
|
|
|
Additional
paid-in capital (Notes 1 and 2)
|
|
|
19,739
|
|
|
|
513,344,837
|
|
|
Surplus
(deficit) accumulated during the development stage
|
|
|
(116,322
|
)
|
|
|
3,730,417
|
|
|
Total
stockholders’ equity (deficit)
|
|
|
(94,583
|
)
|
|
|
517,083,074
|
|
|
Total
liabilities and stockholders’ equity (deficit)
|
|
$
|
1,053,753
|
|
|
$
|
911,562,179
|
|
See
accompanying notes to financial statements.
TRIAN
ACQUISITION I CORP.
(A
Development Stage Company)
STATEMENTS
OF OPERATIONS
|
|
|
Period
from
|
|
|
Period
from
|
|
|
|
|
|
|
|
October
16,
|
|
|
October
16,
|
|
|
|
|
|
|
|
2007
|
|
|
2007
|
|
|
Year
|
|
|
|
|
(inception)
to
|
|
|
(inception)
to
|
|
|
Ended
|
|
|
|
|
December
31,
2008
|
|
|
December
31,
2007
|
|
|
December
31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income:
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
12,197,688
|
|
|
$
|
253
|
|
|
$
|
12,197,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Professional
fees and other expenses
|
|
|
1,526,884
|
|
|
|
116,575
|
|
|
|
1,410,309
|
|
|
Income
(loss) before income taxes
|
|
|
10,670,804
|
|
|
|
(116,322
|
)
|
|
|
10,787,126
|
|
|
Provision
for income taxes
|
|
|
4,805,354
|
|
|
|
--
|
|
|
|
4,805,354
|
|
|
Net
income (loss)
|
|
$
|
5,865,450
|
|
|
$
|
(116,322
|
)
|
|
$
|
5,981,772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
interest, net of taxes, attributable to
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common
stock subject to redemption
|
|
|
(2,135,033
|
)
|
|
|
--
|
|
|
|
(2,135,033
|
)
|
|
Net
income (loss) attributable to common stock
|
|
$
|
3,730,417
|
|
|
$
|
(116,322
|
)
|
|
$
|
3,846,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
(loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted
|
|
$
|
0.06
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
and diluted (Note 1)
|
|
|
64,405,418
|
|
|
|
23,000,000
|
|
|
|
73,747,542
|
|
See
accompanying notes to financial statements.
TRIAN
ACQUISITION I CORP.
(A
Development Stage Company)
STATEMENT
OF STOCKHOLDERS’ EQUITY (DEFICIT)
For
the period from October 16, 2007 (inception) to December 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
Surplus
(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
Additional
|
|
|
During
the
|
|
|
Stockholders’
|
|
|
|
|
Common
Stock
|
|
|
Paid-in
|
|
|
Development
|
|
|
Equity
|
|
|
|
|
Shares
|
|
|
Amount
|
|
|
Capital
|
|
|
Stage
|
|
|
(Deficit)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance
of units to initial stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
at
$0.0011 per unit (Note 1)
|
|
|
20,000,000
|
|
|
$
|
2,000
|
|
|
$
|
19,739
|
|
|
$
|
--
|
|
|
$
|
21,739
|
|
|
Net
loss
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
(116,322
|
)
|
|
|
(116,322
|
)
|
|
Balance
at December 31, 2007
|
|
|
20,000,000
|
|
|
|
2,000
|
|
|
|
19,739
|
|
|
|
(116,322
|
)
|
|
|
(94,583
|
)
|
|
Reclassification
to permanent equity of
common
stock subject to mandatory
redemption
(Note 6)
|
|
|
3,000,000
|
|
|
|
300
|
|
|
|
2,961
|
|
|
|
--
|
|
|
|
3,261
|
|
|
Issuance
of units in initial public
offering
(Notes 1 and 2)
|
|
|
92,000,000
|
|
|
|
9,200
|
|
|
|
919,990,800
|
|
|
|
--
|
|
|
|
920,000,000
|
|
|
Reclassification
of common stock
subject
to redemption (Note 1)
|
|
|
(36,799,999
|
)
|
|
|
(3,680
|
)
|
|
|
(362,148,959
|
)
|
|
|
--
|
|
|
|
(362,152,639
|
)
|
|
Recognition
of underwriters’ discount
(including
$29,808,000 of deferred
discount
(Note 1)
|
|
|
--
|
|
|
|
--
|
|
|
|
(52,900,000
|
)
|
|
|
--
|
|
|
|
(52,900,000
|
)
|
|
Costs
related to initial public offering
|
|
|
--
|
|
|
|
--
|
|
|
|
(1,619,704
|
)
|
|
|
--
|
|
|
|
(1,619,704
|
)
|
|
Proceeds
of issuance of warrants to
Sponsor
(Notes 1 and 5)
|
|
|
--
|
|
|
|
--
|
|
|
|
10,000,000
|
|
|
|
--
|
|
|
|
10,000,000
|
|
|
Net
income
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
5,981,772
|
|
|
|
5,981,772
|
|
|
Deferred
interest, net of taxes,
attributable
to common stock subject
to
redemption (Note 1)
|
|
|
--
|
|
|
|
--
|
|
|
|
--
|
|
|
|
(2,135,033
|
)
|
|
|
(2,135,033
|
)
|
|
Balance
at December 31, 2008
|
|
|
78,200,001
|
|
|
$
|
7,820
|
|
|
$
|
513,344,837
|
|
|
$
|
3,730,417
|
|
|
$
|
517,083,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
accompanying notes to financial statements.
TRIAN
ACQUISITION I CORP.
(A
Development Stage Company)
STATEMENTS
OF CASH FLOWS
|
|
|
Period
from
|
|
|
Period
from
|
|
|
|
|
|
|
|
October
16,
|
|
|
October
16,
|
|
|
|
|
|
|
|
2007
|
|
|
2007
|
|
|
Year
|
|
|
|
|
(inception)
to
|
|
|
(inception)
to
|
|
|
Ended
|
|
|
|
|
December
31,
2008
|
|
|
December
31,
2007
|
|
|
December
31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
5,865,450
|
|
|
$
|
(116,322
|
)
|
|
$
|
5,981,772
|
|
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income on restricted cash equivalents and restricted short-
term
investments held in the trust account
|
|
|
(12,192,446
|
)
|
|
|
--
|
|
|
|
(12,192,446
|
)
|
|
Withdrawal
of restricted cash equivalents investments held in
the
trust account
|
|
|
7,382,455
|
|
|
|
--
|
|
|
|
7,382,455
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
in prepaid income taxes
|
|
|
(684,646
|
)
|
|
|
--
|
|
|
|
(684,646
|
)
|
|
Increase
in other prepaid expenses
|
|
|
(283,928
|
)
|
|
|
--
|
|
|
|
(283,928
|
)
|
|
Increase
in other accrued expenses
|
|
|
383,433
|
|
|
|
79,575
|
|
|
|
303,858
|
|
|
Net
cash and cash equivalents provided by (used in) operating
|
|
|
|
|
|
|
|
|
|
|
|
|
|
activities
|
|
|
470,318
|
|
|
|
(36,747
|
)
|
|
|
507,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Initial
investment in restricted cash equivalents held in the trust
account
|
|
|
(905,608,000
|
)
|
|
|
--
|
|
|
|
(905,608,000
|
)
|
|
Purchases
of restricted short-term investments held in the trust
account
|
|
|
(1,340,725,126
|
)
|
|
|
--
|
|
|
|
(1,340,725,126
|
)
|
|
Maturities
of restricted short-term investments held in the trust
account
|
|
|
662,346,548
|
|
|
|
--
|
|
|
|
662,346,548
|
|
|
Redemption
of restricted cash equivalents held in the trust account
|
|
|
678,378,578
|
|
|
|
--
|
|
|
|
678,378,578
|
|
|
Net
cash and cash equivalents used in investing activities
|
|
|
(905,608,000
|
)
|
|
|
--
|
|
|
|
(905,608,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
Flows from Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
of initial public offering, including deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
underwriters’
discount, held in the trust account
|
|
|
895,608,000
|
|
|
|
--
|
|
|
|
895,608,000
|
|
|
Proceeds
from issuance of sponsor warrants held in the trust
account
|
|
|
10,000,000
|
|
|
|
--
|
|
|
|
10,000,000
|
|
|
Proceeds
from initial public offering held outside the trust
account
|
|
|
1,300,000
|
|
|
|
--
|
|
|
|
1,300,000
|
|
|
Payments
for offering costs
|
|
|
(1,619,704
|
)
|
|
|
(120,479
|
)
|
|
|
(1,499,225
|
)
|
|
Proceeds
from note payable to sponsor
|
|
|
250,000
|
|
|
|
250,000
|
|
|
|
--
|
|
|
Repayment
of note payable to sponsor
|
|
|
(250,000
|
)
|
|
|
--
|
|
|
|
(250,000
|
)
|
|
Proceeds
from sale of units subject to redemption
|
|
|
3,261
|
|
|
|
3,261
|
|
|
|
--
|
|
|
Proceeds
from sale of other units
|
|
|
21,739
|
|
|
|
21,739
|
|
|
|
--
|
|
|
Net
cash and cash equivalents provided by financing activities
|
|
|
905,313,296
|
|
|
|
154,521
|
|
|
|
905,158,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase
in cash and cash equivalents
|
|
|
175,614
|
|
|
|
117,774
|
|
|
|
57,840
|
|
|
Cash
and cash equivalents at beginning of period
|
|
|
--
|
|
|
|
--
|
|
|
|
117,774
|
|
|
Cash
and cash equivalents at end of period
|
|
$
|
175,614
|
|
|
$
|
117,774
|
|
|
$
|
175,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure of Noncash Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrual
of deferred underwriters’ discount
|
|
$
|
29,808,000
|
|
|
$
|
--
|
|
|
$
|
29,808,000
|
|
|
Deferred
offering costs included in accrued expenses
|
|
$
|
--
|
|
|
$
|
815,500
|
|
|
$
|
--
|
|
Due to
its non-cash nature, the reclassification to permanent equity of the $3,261
corresponding to common stock that had been subject to mandatory redemption is
not reflected in the statement of cash flows for the periods ended December 31,
2008.
See
accompanying notes to financial statements.
TRIAN
ACQUISITION I CORP.
(A
Development Stage Company)
NOTES
TO FINANCIAL STATEMENTS
NOTE
1—ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING
POLICIES
Organization
and Business Operations
Trian Acquisition I Corp. (the
“Company”) was incorporated in Delaware on October 16, 2007 for the purpose of
effecting a merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more domestic or
international operating businesses or assets. The Company is
considered in the development stage and is subject to the risks associated with
development stage companies.
At December 31, 2008, the Company had
not effected a business combination. All activity through December
31, 2008 relates to the Company’s formation, its initial public offering
described below and conducting the selection process with respect to a business
combination or combinations. In connection with the Company’s
formation and as described in Note 6, in October 2007 the Company’s Sponsor (as
defined below) purchased an aggregate of 23,000,000 units of the Company, each
consisting of one share of common stock and one warrant to purchase an
additional share of common stock. The Company’s fiscal year ends on
December 31.
The registration statement for the
Company’s initial public offering (the “Offering”) described in Note 2 was
declared effective January 23, 2008. The Company consummated the
Offering (including units sold pursuant to the underwriters’ exercise of their
over-allotment option) on January 29, 2008 and immediately prior to such
Offering, the Sponsor purchased 10,000,000 warrants at $1.00 per warrant from
the Company in a private placement (the “Private Placement”) (see Notes 2 and
5). The Company intends to effect a business combination using the
proceeds of the Offering and the Private Placement, its capital stock, debt or a
combination of cash, stock and debt. The business combination must
occur with one or more target businesses that together have a fair market value
of at least 80% of the Company’s net assets held in trust (net of taxes and
amounts disbursed to the Company for working capital purposes and excluding the
amount of the underwriters’ deferred discount held in trust) at the time of such
business combination. If the Company acquires less than 100% of one
or more target businesses, the aggregate fair market value of the portion or
portions the Company acquires must equal at least 80% of such net assets at the
time of the business combination. The Company will not consummate a
business combination unless it acquires a controlling interest in a target
company, whether through the acquisition of the majority of the voting interests
of the target or through other means.
The Company’s efforts in identifying
prospective target businesses are not limited to a particular industry or group
of industries. Instead, the Company intends to focus on various
industries and target businesses that may provide significant opportunities for
increasing profitability.
Net proceeds of $905,608,000 from the
Offering and the Private Placement received on January 29, 2008 are held in a
trust account (“Trust Account”) and will only be released to the Company upon
the earlier of: (i) the consummation of a business combination; or (ii) the
Company’s liquidation, except to satisfy stockholder conversion rights (as
described below). The proceeds in the Trust Account include
$29,808,000 of deferred underwriting discount, which represents 3.24% of the
Offering proceeds. Upon consummation of a business combination, such
deferred underwriting discount, reduced pro-ratably by the exercise of
stockholder conversion rights, will be paid to the underwriters from the funds
held in the Trust Account. Proceeds held outside of the Trust Account
as well as income of up to $9,500,000 earned on the Trust Account that may be
released to the Company (as discussed in Note 2) may be used to pay for
business, legal and accounting due diligence on prospective acquisitions and
continuing general and administrative expenses. The proceeds held in
the Trust Account may be invested by the trustee only in United States
government securities with maturities of 180 days or less or in money market
funds, both meeting certain conditions of the Investment Company Act of
1940.
If the Company does not consummate a
business combination by January 23, 2010 (which is 24 months from the date of
the prospectus filed with the Securities and Exchange Commission relating to the
Offering), or by July 23, 2010 (which is 30 months from the date of such
prospectus) (the “Extension Period”) if our stockholders approve an extension,
the Company will liquidate and promptly distribute only to the holders of common
stock acquired either as part of the units sold in the Offering or in the after
market (the “Public Stockholders”) the amount in the Trust Account, less any
income taxes payable on income, investment management fees payable to the
trustee and any income of up to $9,500,000 previously released to the Company
and used to fund its working capital requirements. If the Company
fails to consummate a business combination within such time period, the
Company’s amended and restated certificate of incorporation also provides that
the Company’s corporate existence will automatically cease on January 23, 2010
(or at the conclusion of the Extension Period, if applicable) except for the
purpose of winding up its affairs and liquidating. In the event of liquidation,
it is possible that the per share value of the residual assets remaining
available for distribution (including Trust Account assets) will be less than
the $10 offering price per share (assuming no value is attributed to the
warrants contained in the units offered in the Offering discussed in Note
2).
The Company will seek stockholder
approval before it effects its initial business combination, even if the
business combination would not ordinarily require stockholder approval under
applicable law. In connection with the stockholder vote required to
approve a business combination or an extension of the Company’s corporate
existence up to the end of the Extension Period in the event the Company has
entered into a definitive agreement for, but has not yet consummated, a business
combination, the Company’s stockholders immediately prior to the consummation of
the Offering, including Trian Acquisition I, LLC, a Delaware limited liability
company (the “Sponsor”), have agreed and their permitted transferees will agree,
to vote the shares owned by them immediately before the Offering in accordance
with the majority of the shares of common stock voted by the Public
Stockholders. The Company will proceed with a business combination
only if (i) the business combination is approved by a majority of votes cast by
the Public Stockholders at a duly held stockholders meeting, (ii) an amendment
to the Company’s amended and restated certificate of incorporation to provide
for the Company’s perpetual existence is approved by a majority of the Company’s
outstanding shares of common stock, and (iii) conversion rights (as described
below) have been exercised with respect to less than 40% of the shares of common
stock issued in the Offering, on a cumulative basis (including the shares as to
which conversion rights were exercised in connection with a stockholder vote, if
any, to approve an extension of the time period within which the Company must
consummate a business combination and the stockholder vote to approve a business
combination). If the conditions to consummate the proposed business
combination are not met but sufficient time remains before the Company’s
corporate life expires, the Company may attempt to effect another business
combination.
If the business combination is approved
and consummated, subject to a limitation on the ability of a stockholder or more
than one stockholder acting as a group to exercise conversion rights with
respect to more than 10% of the outstanding shares, each Public Stockholder
voting against such business combination will be entitled to convert its shares
of common stock into a pro rata share of the aggregate amount then on deposit in
the Trust Account (including the deferred underwriters’ discount and income
earned on the Trust Account, net of income taxes payable on such income,
investment management fees paid to the trustee and income of up to $9,500,000 on
the Trust Account disbursed to fund the Company’s working capital
requirements). Public Stockholders who convert their stock into their
share of the Trust Account will continue to have the right to exercise any
warrants they may hold.
On
January 23, 2008 the Company declared a stock dividend of 0.06667 shares of
common stock for each share of common stock issued and outstanding and adjusted
the number of Sponsor units and warrants included in those units. All
share and per share data in the accompanying financial statements and these
notes reflect this stock dividend.
Significant
Accounting Policies
Cash and cash equivalents
—The
Company considers all highly liquid investments with original maturities of
three months or less when acquired to be cash equivalents. Cash and
cash equivalents at December 31, 2007 and 2008 principally consisted of cash in
a mutual fund money market account.
Restricted cash equivalents and
short-term investments held in the trust account
—Of the net proceeds of
the Offering and the Private Placement, $905,608,000 was placed in the Trust
Account including $29,808,000 of deferred underwriters’
discount. These amounts are classified as restricted assets since
such amounts can only be used by the Company in connection with a business
combination. At December 31, 2008, the Trust Account is invested in
U.S. Treasury bills and a money market mutual fund that invests only in U.S.
Treasury securities. At December 31, 2008, the aggregate balance in
the Trust Account was $910,417,991, which reflects $12,192,446 of interest
income less $7,382,455 withdrawn to make income tax payments and pay expenses,
and represents approximately $9.90 per share held by Public
Stockholders.
Restricted cash equivalents held in
the trust account
—The Company classifies investments in U.S. Treasury
bills with maturities of 90 days or less when purchased and money market mutual
fund investments as “Restricted cash equivalents held in the trust
account.”
Restricted short-term investments
held in the trust account
—The Company classifies investments in U.S.
Treasury bills with maturities greater than 90 days and less than 181 days when
purchased as “Restricted short-term investments held in the trust
account.” These investments are classified as held-to-maturity and,
accordingly, are carried at amortized cost.
Concentration of credit
risk
—Financial instruments that potentially subject the Company to a
significant concentration of credit risk consist primarily of cash and cash
equivalents and short-term investments. The Company may maintain deposits in
federally insured financial institutions in excess of federally insured limits.
However, management believes that the Company is not exposed to significant
credit risk due to the financial position of the depository institution in which
those deposits are held. The Company does not believe the cash
equivalents and short-term investments held in the Trust Account are subject to
significant credit risk as the portfolio is invested in United States government
securities and a money market fund that invests only in securities of the United
States government.
Use of estimates
—The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those
estimates.
Common stock subject to
redemption
—As discussed in more detail above, the Company will only
proceed with a business combination if (1) it is approved by a majority of the
votes cast by Public Stockholders and (2) Public Stockholders holding less than
40% (36,800,000) of the shares of common stock sold in the Offering exercise
their conversion rights. Accordingly, the Company has classified
36,799,999 shares of its common stock outside of permanent equity as “Common
stock subject to redemption,” at the initial conversion price of
$9.84. The Company recognizes changes in the redemption value as they
occur and adjusts the carrying value of “Deferred interest attributable to
common stock subject to redemption” to reflect the required adjustment to the
redemption value at the end of each reporting period by an adjustment to
“Surplus accumulated during the development stage,” or in the absence of a
surplus, by an adjustment to paid-in capital.
Income per share
—Basic and
diluted income per share is computed by dividing net income attributable to
common stock by the weighted average number of shares of common stock
outstanding, excluding the common stock subject to redemption, during the
period. The exclusion of common stock subject to redemption from
income per share gives effect to the fact that the Company may be required, upon
the exercise of stockholder conversion rights, to redeem those shares for
their pro rata portion of the Trust Account, as a result of which the terms of
the common stock subject to redemption are considered to be substantially
different than those of the common stock. Increases in the redemption
value of the common stock subject to redemption reduce the net income
attributable to common stock. Warrants, of which there were
23,000,000 outstanding from inception through January 29, 2008 and 115,000,000
thereafter through December 31, 2008, have not been considered in the
calculation of income per share because the shares underlying the
warrants are contingently issuable.
Income taxes
—Deferred income
tax assets and liabilities are computed for differences between the financial
statement and tax basis of assets and liabilities that will result in future
taxable or deductible amounts and are based on enacted tax laws and rates
applicable to the periods in which the differences are expected to effect
taxable income. Valuation allowances are established when necessary
to reduce deferred income tax assets to the amount expected to be
realized.
Deferred offering
costs
—Deferred offering costs consisting principally of legal, accounting
and printing and engraving expenses that were related to the Offering were
charged to additional paid-in capital upon the closing of the Offering on
January 29, 2008.
Recent accounting
pronouncements
—In December 2007, the Financial Accounting Standards Board
(the “FASB”) issued Statement No. 141 (revised 2007), “Business Combinations”
(“SFAS 141(R)”). SFAS 141(R) retains the fundamental requirements of
SFAS 141 that the acquisition method of accounting (which SFAS 141 called the
purchase method) be used for all business combinations and for an acquirer to be
identified for each business combination. SFAS 141(R) establishes
principles and requirements for recognizing and measuring identifiable assets
and goodwill acquired, liabilities assumed, and any noncontrolling interest in
an acquisition, at their fair value as of the acquisition date. SFAS 141(R) also
requires an acquirer to recognize assets acquired and liabilities assumed
arising from contractual contingencies as of the acquisition date, measured at
their acquisition-date fair values. Additionally, SFAS 141(R) will
require that acquisition-related costs in a business combination be expensed as
incurred, except for costs incurred to issue debt and equity securities. This
statement applies prospectively to business combinations effective with the
Company’s first fiscal quarter of 2009. Early adoption is not
permitted. The Company is in the process of evaluating the impact
SFAS 141(R) may have on its financial position and results of
operations.
In
December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in
Consolidated Financial Statements – an amendment of Accounting Research Bulletin
No. 51” (“SFAS 160”). SFAS 160 amends Accounting Research Bulletin
No. 51 to establish accounting and reporting standards for the noncontrolling
interest, also referred to as minority interest, in a subsidiary and for the
deconsolidation of a subsidiary. SFAS 160 requires that the
noncontrolling interest in a subsidiary be clearly identified and presented
within the equity section of the consolidated statement of financial position
but separate from the company’s equity. Consolidated net income
attributable to the parent and to the noncontrolling interest must be clearly
identified and presented on the face of the consolidated statement of
income. SFAS 160 requires that any subsequent changes in a parent’s
ownership interest while still retaining its controlling financial interest in
its subsidiary must be accounted for as equity transactions on a consistent
basis. In addition, SFAS 160 requires that upon the deconsolidation
of a subsidiary, both the gain or loss arising from the deconsolidation and any
retained noncontrolling equity investment in the former subsidiary be measured
at fair value. SFAS 160 is effective commencing with the Company’s
first fiscal quarter of 2009. Early adoption is not
permitted. The Company is in the process of evaluating the impact
SFAS 160 may have on its financial position and results of
operations.
In September 2006, the FASB issued
Statement No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157
defines fair value, expands disclosures about fair value measurements,
establishes a framework for measuring fair value in accordance with generally
accepted accounting principles and establishes a hierarchy that categorizes and
prioritizes the sources to be used to estimate fair value. On
February 12, 2008, the FASB issued FSP No. 157-2, “Effective Date of FASB
Statement No. 157” (“FSP 157-2”), which delayed the effective date of SFAS 157
for one year for all nonfinancial assets and nonfinancial liabilities, except
those that are recognized or disclosed at fair value in the financial statements
on a recurring basis. The Company adopted the provisions of SFAS 157
on January 1, 2008 on a prospective basis, except for those items for which the
Company elected deferral under the provisions of FSP 157-2, which became
effective on January 1, 2009. The adoption of SFAS 157 did not have a
significant impact on our 2008 financial statements. The Company is
in the process of evaluating the impact that adopting the provisions of SFAS 157
that were deferred by FSP 157-2 may have on its financial position and results
of operations.
Management
does not believe that any other recently issued, but not effective, accounting
standards, if currently adopted, would have a material effect on the Company’s
financial statements.
Reclassifications
—Certain
amounts included in the accompanying prior period’s financial statements have
been reclassified to conform with the current year’s
presentation.
NOTE
2—PUBLIC OFFERING
On January 29, 2008, the Company sold
92,000,000 units, including 12,000,000 units sold pursuant to the underwriters’
exercise of their over-allotment option, in the Offering at a price of $10.00
per unit. Each unit consists of one share of the Company’s common stock, $0.0001
par value, and one warrant. Each warrant entitles the holder to
purchase from the Company one share of common stock at an exercise price of
$7.00 per share commencing on later of (i) the consummation of the business
combination or (ii) January 23, 2009. The warrants will be
exercisable only if a current registration statement covering the shares of
common stock issuable upon exercise of the warrants is then
effective. In no event will the holder of a warrant be entitled to
receive a net cash settlement or other consideration in lieu of physical
settlement in shares of the Company’s common stock.
The warrants expire on January 23,
2013, unless earlier redeemed. The warrants included in the units
sold in the Offering are redeemable in whole and not in part at a price of $0.01
per warrant upon a minimum of 30 days’ notice after the warrants become
exercisable, but only in the event that the last sale price of the common stock
exceeds $13.75 per share for any 20 trading days within a 30-trading day
period.
The warrants are classified within
stockholders’ equity since, under the terms of the warrants, the Company cannot
be required to settle or redeem them for cash.
NOTE
3—RESTRICTED CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS HELD IN THE TRUST
ACCOUNT
The restricted cash equivalents held in
the Trust Account at December 31, 2008 were as follows:
|
Money market mutual fund invested only in United States Treasury
securities
|
$121,476,494
|
|
United
States Treasury bills
|
109,998,427
|
|
|
$231,474,921
|
All of the restricted short-term
investments held in the Trust Account at December 31, 2008, aggregating
$678,943,070, had maturities of greater than 90 days and less than 181 days when
purchased.
The United States Treasury investments
that are held in “Restricted cash equivalents held in the trust account” and
“Restricted short-term investments held in the trust account” are classified and
accounted for by the Company as “held-to-maturity”
securities. Accordingly, such investments are reported at their
amortized cost. All of these investments mature within 180 days of
December 31, 2008. The aggregate carrying value and fair value of
such investments, including accrued interest, as of December 31, 2008 are
presented below.
|
|
|
Carrying
Value
|
|
|
Unrealized
Holding
Gains
|
|
|
Fair
Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States Treasury money market funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Classified
in restricted cash equivalents held
in
the trust account
|
|
$
|
121,476,494
|
|
|
$
|
--
|
|
|
$
|
121,476,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States Treasury bills
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Classified
in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted
cash equivalents held in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
the
trust account
|
|
$
|
109,998,427
|
|
|
$
|
1,573
|
|
|
$
|
110,000,000
|
|
|
Restricted
short-term investments held
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in
the trust account
|
|
|
678,943,070
|
|
|
|
845,230
|
|
|
|
679,788,300
|
|
|
|
|
$
|
788,941,497
|
|
|
$
|
846,803
|
|
|
$
|
789,788,300
|
|
As discussed in Note 1,
effective January 1, 2008, the Company adopted certain provisions of SFAS No.
157, which provides enhanced guidance for measuring fair value. The
standard requires the Company to provide expanded information about the assets
and liabilities measured at fair value and the potential effect of these fair
valuations on the Company’s financial performance. SFAS 157
establishes a hierarchal disclosure framework that prioritizes and ranks the
level of market price observability used in measuring investments at fair
value. Market price observability is impacted by a number of factors,
including the type of investment and the characteristics specific to the
investment. Investments with readily available active quoted prices
or for which fair value can be measured from actively quoted prices generally
will have a higher degree of market price observability and a lesser degree of
judgment used in measuring fair value.
Investments measured and reported at
fair value are classified and disclosed in one of the following
categories:
Level
I−Quoted prices are available in active markets for identical investments as of
the reporting date.
Level
II−Pricing inputs are other than quoted prices in active markets, which are
either directly or indirectly observable as of the reporting date, and fair
value is determined through the use of models or other valuation
methodologies.
Level
III−Pricing inputs are unobservable and include situations where there is
little, if any, market activity for the investment.
As of December 31, 2008, the Company’s
cash and cash equivalents, restricted cash equivalents held in the trust account
and short-term investments held in the trust account are classified as Level
I.
NOTE
4—INCOME TAXES
The provision for income taxes
consisted of the following components:
|
|
|
Period
from
|
|
|
Period
from
|
|
|
|
|
|
|
|
October
16,
|
|
|
October
16,
|
|
|
|
|
|
|
|
2007
|
|
|
2007
|
|
|
Year
|
|
|
|
|
(inception)
to
|
|
|
(inception)
to
|
|
|
Ended
|
|
|
|
|
December
31,
2008
|
|
|
December
31,
2007
|
|
|
December
31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal
|
|
$
|
3,021,596
|
|
|
$
|
--
|
|
|
$
|
3,021,596
|
|
|
State
|
|
|
1,783,758
|
|
|
|
--
|
|
|
|
1,783,758
|
|
|
Total
|
|
$
|
4,805,354
|
|
|
$
|
--
|
|
|
$
|
4,805,354
|
|
A reconciliation of the difference
between the reported provision percentage for income taxes and the provision or
benefit percentage that would result from applying the 34% Federal statutory
rate to the income before income taxes is as follows:
|
|
Period
from
|
Period
from
|
|
|
|
October
16,
|
October
16,
|
|
|
|
2007
|
2007
|
Year
|
|
|
(inception)
to
|
(inception)
to
|
Ended
|
|
|
December
31,
|
December
31,
|
December
31,
|
|
|
2008
|
2007
|
2008
|
|
Income
tax provision (benefit)
computed
at Federal statutory rate
|
34.0%
|
|
(34.0)%
|
|
34.0%
|
|
|
State
income taxes, net of Federal benefit
|
11.0%
|
|
--
|
|
11.0%
|
|
|
Valuation
allowance
|
--
|
|
34.0%
|
|
--
|
|
|
Utilization
of prior period net operating loss
carryforward
|
--
|
|
--
|
|
(0.5)%
|
|
|
Total
|
45.0%
|
|
--
%
|
|
44.5%
|
|
At December 31, 2008, the Company had
no net operating loss carryforwards or deferred tax assets or
liabilities. Components of the Company’s deferred tax assets at
December 31, 2007 were as follows:
|
Net
operating loss carryforwards
|
|
$ 39,549
|
|
Less
valuation allowance
|
|
(39,549
)
|
|
Total
|
|
$ --
|
Management recorded a full valuation
allowance against its deferred tax assets at December 31, 2007 because it did
not believe it was more likely than not that sufficient taxable income would be
generated.
NOTE
5—NOTE PAYABLE TO SPONSOR AND OTHER RELATED PARTY TRANSACTIONS
On November 5, 2007, the Sponsor made a
$250,000 loan to the Company to fund a portion of the organizational and
offering expenses owed by the Company to third parties. The principal
balance of the loan was repaid on January 29, 2008. No interest
accrued on the unpaid principal balance of the loan.
On January 29, 2008, the Sponsor
purchased 10,000,000 warrants at $1.00 per warrant (for an aggregate purchase
price of $10,000,000) from the Company. The Sponsor is permitted to
transfer the warrants held by it to certain permitted transferees, including the
Company’s officers, directors and employees, any affiliates or family members of
such individuals, any affiliates of the Company or the Sponsor, Trian Fund
Management, L.P., an affiliate of the Sponsor, and any officers, directors,
members and employees of the Sponsor, Trian Fund Management, L.P. or such
affiliates, but the transferees receiving such securities will be subject to the
same agreements with respect to such securities as the
Sponsor. Otherwise, these warrants are not transferable or salable by
the Sponsor (except as described below) until after the consummation of a
business combination. The Sponsor warrants may be exercised by paying
cash or on a cashless basis and are non-redeemable as long as they are held by
the Sponsor or its permitted transferees. Otherwise, the Sponsor
warrants have terms and provisions that are identical to those of the warrants
included in the units sold in the Offering.
In
connection with the closing of the Offering, Trian Fund Management, L.P. agreed
to cause Trian Partners (defined below) to place limit orders for up to
$75,000,000 of the Company’s common stock commencing two days after the Company
files a preliminary proxy statement relating to a business combination and
ending on the business day immediately preceding the record date for the meeting
of stockholders at which the business combination is to be approved, or earlier
under certain circumstances. “Trian Partners” refers to Trian Fund
Management, L.P., its affiliates and the funds and accounts managed by Trian
Fund Management, L.P. or its affiliates. The limit orders will
require Trian Partners to purchase any of the shares of the Company’s common
stock offered for sale at or below a price equal to the per-share value of the
Trust Account as of the date of the Company’s most recent annual report on Form
10-K or quarterly report on Form 10-Q, as applicable, filed prior to such
purchase. Any portion of the $75,000,000 not used for open market
purchases of the Company’s common stock will be applied to the purchase of the
Company’s units from the Company, at a price of $10 per unit, immediately prior
to the consummation of a business combination.
In December 2007, the Sponsor sold an
aggregate of 1,893,332 shares of common stock included in the Sponsor units
discussed in Note 5 to certain officers and directors of the Company and other
related parties for an aggregate purchase price of $2,058, or $0.0011 per share,
which is equal to the purchase price per unit paid by the Sponsor.
In connection with travel relating to
the January 2008 marketing efforts with respect to the Offering, aircraft owned
by Wendy’s/Arby’s Group, Inc. (formerly Triarc Companies, Inc.) and one of its
subsidiaries (collectively, “Wendy’s/Arby’s”) were used. The aircraft
were made available pursuant to the terms of aircraft time sharing agreements
between Wendy’s/Arby’s and Trian Fund Management, L.P. (the “Time Sharing
Agreements”), an affiliate of the Sponsor. The Company reimbursed
Trian Fund Management, L.P., which in turn reimbursed Wendy’s/Arby’s pursuant to
the Time Sharing Agreements, for the incremental costs of the air travel, which
aggregated $293,221. The Company’s Chairman and Vice Chairman are
also the non-executive Chairman and Vice Chairman, respectively, of
Wendy’s/Arby’s, and together with funds and accounts managed by Trian Fund
Management, L.P. are significant shareholders of Wendy’s/Arby’s. The
Company’s Chief Executive Officer is also a director of
Wendy’s/Arby’s.
The Company pays Trian Fund Management,
L.P. $10,000 a month for office space and general and administrative
services. Services commenced promptly after the completion of the
Offering and will terminate upon the earlier of (i) the consummation of a
business combination and (ii) the liquidation of the
Company. Payments under this arrangement aggregated $120,000 for the
year ended December 31, 2008. The Company’s officers and certain of
its directors are also employees of Trian Fund Management, L.P.
During the year ended December 31,
2008, funds managed by Trian Fund Management, L.P. purchased in open market
transactions, and held at December 31, 2008, an aggregate of 5,968,400 shares of
the Company’s common stock and 3,311,000 of the Company’s warrants, including
shares of common stock and warrants purchased together in units.
In addition, prior to a business
combination, Trian Fund Management, L.P. has agreed to guarantee certain of the
Company’s obligations to its officers and directors under indemnity
agreements. The Company will not pay a fee for such
guarantees.
NOTE
6—SPONSOR UNITS
In October 2007, the Sponsor purchased
an aggregate of 23,000,000 units for an aggregate purchase price of $25,000, or
$0.0011 per unit. This included an aggregate of 3,000,000 units that
were subject to mandatory redemption by the Company if and to the extent the
underwriters’ over-allotment option was not exercised, so that the Sponsor and
its permitted transferees would own 20% of the Company’s issued and outstanding
shares after the Offering. As the underwriters’ over-allotment was
exercised in full in connection with the Offering, such units are no longer
mandatorily redeemable. Accordingly, the $3,261 corresponding to the
common stock that was subject to mandatory redemption was reclassified to
permanent equity in January 2008. There are no circumstances beyond
the Company’s control that would require the Company to redeem the warrants for
cash. Accordingly, the warrants included in the units are classified
within “Stockholders’ equity” in the accompanying balance sheets.
Each Sponsor unit consists of one share
of common stock and one warrant. The common stock and warrants
comprising the Sponsor units are identical to the common stock and warrants
comprising the units sold in the Offering, except that:
|
·
|
such
common stock and warrants are subject to the transfer restrictions
described below;
|
|
·
|
the
Sponsor has agreed, and any permitted transferees will agree, to vote the
shares of common stock in the same manner as a majority of the shares of
common stock voted by the Public Stockholders at a special or annual
stockholders meeting called for the purpose of approving the Company’s
business combination or any extension of the Company’s corporate existence
up to July 23, 2010 in the event the Company has entered into a definitive
agreement for, but has not yet consummated, any business
combination;
|
|
·
|
the
Sponsor and its permitted transferees will not be able to exercise the
conversion rights described in Note 1 with respect to the common
stock;
|
|
·
|
the
Sponsor and its permitted transferees will have no right to participate in
any liquidation distribution with respect to the common stock if the
Company fails to consummate a business
combination;
|
|
·
|
such
warrants may not be exercised unless and until the last sale price of the
common stock equals or exceeds $13.75 for any 20 days within any
30-trading day period beginning 90 days after the business
combination;
|
|
·
|
such
warrants will not be redeemable by the Company as long as they are held by
the Sponsor or its permitted transferees;
and
|
|
·
|
such
warrants may by exercised by the holders, at their election, by paying
cash or on a cashless net share settlement
basis.
|
The Sponsor has agreed, subject to
certain exceptions described below, not to transfer, assign or sell any of the
Sponsor units or any of the common stock or warrants included in such units
(including the common stock issuable upon exercise of such warrants) for a
period of 180 days from the date of consummation of a business
combination.
The Sponsor is permitted to transfer
the Sponsor units and the common stock and warrants comprising such units
(including the common stock issuable upon exercise of such warrants) to the
Company’s officers, directors and employees, any affiliates or family members of
such individuals, any affiliates of the Company, the Sponsor or Trian Fund
Management, L.P. and any officers, directors, members or employees of the
Sponsor, Trian Fund Management, L.P. or such affiliates, but the transferees
receiving such securities will be subject to the same transfer restrictions as
the Sponsor. Any such transfers will be made in accordance with
applicable securities laws. See Note 5 for disclosure of the
transfers that took place in December 2007.
NOTE
7—STOCKHOLDERS’ EQUITY
Preferred
Stock
The
Company is authorized to issue up to 1,000,000 shares of preferred stock, par
value $0.0001 per share, with such designations, voting and other rights and
preferences as may be determined from time to time by the board of
directors. No shares of preferred stock were issued and outstanding
as of December 31, 2008.
Common
Stock
The
initial authorized common stock of the Company included up to 225,000,000
shares. Holders of common stock are entitled to one vote for each
share of common stock. In addition, holders of common stock are
entitled to receive dividends when, as and if declared by the board of
directors. On January 29, 2008, the Company amended and restated its
certificate of incorporation to, among other things, increase the number of
authorized shares of the Company’s common stock to 500,000,000.
NOTE
8—QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Unaudited financial information for
each of the fiscal quarters of the year ended December 31, 2008 is
presented below. The results for any quarter are not necessarily
indicative of the results for any future quarter or other period.
|
|
|
Three
Months Ended
|
|
|
|
|
March
31,
2008
|
|
|
June
30,
2008
|
|
|
September
30,
2008
|
|
|
December
31,
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
$
|
3,217,573
|
|
|
$
|
3,245,358
|
|
|
$
|
3,750,135
|
|
|
$
|
1,984,369
|
|
|
Total
expenses
|
|
|
289,590
|
|
|
|
321,156
|
|
|
|
290,503
|
|
|
|
509,060
|
|
|
Income
before income taxes
|
|
|
2,927,983
|
|
|
|
2,924,202
|
|
|
|
3,459,632
|
|
|
|
1,475,309
|
|
|
Provision
for income taxes
|
|
|
1,171,193
|
|
|
|
1,462,290
|
|
|
|
1,556,834
|
|
|
|
615,037
|
|
|
Net
income
|
|
$
|
1,756,790
|
|
|
$
|
1,461,912
|
|
|
$
|
1,902,798
|
|
|
$
|
860,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
interest, net of taxes,
attributable
to common stock
subject
to redemption
|
|
|
(506,014
|
)
|
|
|
(361,211
|
)
|
|
|
(827,768
|
)
|
|
|
(440,040
|
)
|
|
Net
income attributable to common
stock
|
|
$
|
1,250,776
|
|
|
$
|
1,100,701
|
|
|
$
|
1,075,030
|
|
|
$
|
420,232
|
|
|
Income
per common share, basic and
diluted
|
|
$
|
0.02
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
Weighted
average common shares
outstanding,
basic and diluted
|
|
|
60,292,308
|
|
|
|
78,200,001
|
|
|
|
78,200,001
|
|
|
|
78,200,001
|
|
NOTE
9—CHANGE IN TRUSTEE
Effective
October 1, 2008, in accordance with the terms of the investment management trust
agreement dated as of January 23, 2008 (the “Original Trust Agreement”) between
the Company and Wilmington Trust Company (“Wilmington”), by mutual agreement of
the parties, Wilmington resigned as trustee and custodian of the Trust Account
and the Company appointed U.S. Trust Company of Delaware (“U.S. Trust”) as
successor trustee and custodian. The Company and U.S. Trust entered
into an amended and restated investment management trust agreement dated as of
October 1, 2008, the terms of which are substantially the same as the Original
Trust Agreement.
|
ITEM
9.
|
Changes in and Disagreement with Accountants on Accounting and
Financial Disclosure.
|
None.
ITEM
9A.
Controls and
Procedures.
Evaluation
of Disclosure Controls and Procedures
Our
management, with the participation of our Chief Executive Officer and our Chief
Financial Officer, carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31,
2008. Based on that evaluation, our Chief Executive Officer and our
Chief Financial Officer have concluded that, as of December 31, 2008, our
disclosure controls and procedures were effective to provide reasonable
assurance that information required to be disclosed by us in the reports that we
file or submit under the Exchange Act was accumulated and communicated to
management, including our Chief Executive Officer and our Chief Financial
Officer, recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the SEC.
Management’s
Report on Internal Control Over Financial Reporting
Our management is responsible for
establishing and maintaining adequate internal control over financial reporting
(as defined in Rules 13a-15(f) and 15(d)-15(f) of the Exchange
Act). Our management, with the participation of our Chief Executive
Officer and our Chief Financial Officer, carried out an assessment of the
effectiveness of our internal control over financial reporting as of December
31, 2008. The assessment was performed using the criteria for
effective internal control reflected in the Internal Control-Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
Based on our assessment of the system
of internal control, management believes that, as of December 31, 2008, our
internal control over financial reporting was effective.
The Company’s independent registered
public accounting firm, Deloitte & Touche LLP, has issued a report dated
March 16, 2009 on the Company’s internal control over financial
reporting.
Change
in Internal Control Over Financial Reporting
There were no changes in our internal
control over financial reporting made during our most recent fiscal quarter that
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
Inherent
Limitations on Effectiveness of Controls
There are inherent limitations on the
effectiveness of any control system, including the potential for human error and
the circumvention of overriding of the controls and
procedures. Additionally, judgments in decision-making can be faulty
and breakdowns can occur because of simple error or mistake. An
effective control system can provide only reasonable, not absolute, assurance
that the control objectives of the system are adequately
met. Accordingly, our management, including our Chief Executive
Officer and our Chief Financial Officer, does not expect that our control system
can prevent or detect all errors or fraud. Finally, projections of
any evaluation or assessment of effectiveness of a control system to future
periods are subject to the risks that, over time, controls may become inadequate
because of changes in an entity’s operating environment or deterioration in the
degree of compliance with policies or procedures.
Report
of Independent Registered Public Accounting Firm
To the
Board of Directors and Stockholders of
Trian
Acquisition I Corp.:
We have
audited the internal control over financial reporting of Trian Acquisition I
Corp. (a corporation in the development stage) (the “Company”) as of
December 31, 2008, based on criteria established in
Internal Control – Integrated
Framework
issued by the Committee of Sponsoring Organizations of the
Treadway Commission. The Company's management is responsible for
maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting,
included in the accompanying Management’s Report on Internal Control over
Financial Reporting. Our responsibility is to express an opinion on the
Company's internal control over financial reporting based on our
audit.
We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all
material respects. Our audit included obtaining an understanding of
internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness
of internal control based on that risk, and performing such other procedures as
we considered necessary in the circumstances. We believe that our audit
provides a reasonable basis for our opinion.
A
company's internal control over financial reporting is a process designed by, or
under the supervision of, the company's principal executive and principal
financial officers, or persons performing similar functions, and effected by the
company's board of directors, management, and other personnel to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company's internal control
over financial reporting includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company's
assets that could have a material effect on the financial
statements.
Because
of the inherent limitations of internal control over financial reporting,
including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may not be prevented or
detected on a timely basis. Also, projections of any evaluation of the
effectiveness of the internal control over financial reporting to future periods
are subject to the risk that the controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
In our
opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2008, based on the criteria
established in
Internal
Control – Integrated Framework
issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
We have
also audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the financial statements as of December 31,
2008 and 2007 and for the period from October 16, 2007 (date of inception) to
December 31, 2008, for the period from October 16, 2007 (date of inception) to
December 31, 2007 and for the year ended December 31, 2008 of the Company and
our report dated March 16, 2009 expressed an unqualified opinion on those
financial statements and included an explanatory paragraph about the Company
only continuing in existence for a specified period of time if a business
combination is not consummated by January 23, 2010 (or July 23, 2010 if an
extension is approved by the Company’s stockholders).
/s/
Deloitte & Touche LLP
New York,
New York
March 16,
2009
ITEM
9B.
Other
Information
.
None.
PART
III
|
ITEM
10.
|
Directors, Executive Officers and Corporate
Governance.
|
Directors
and Executive Officers
Our
directors and executive officers are as follows:
|
|
|
|
|
Nelson
Peltz
|
66
|
Chairman
of the Board
|
|
Peter
W. May
|
66
|
Vice
Chairman and Director
|
|
Edward
P. Garden
|
47
|
President,
Chief Executive Officer and Director
|
|
Geoffrey
C. Bible
|
71
|
Director
|
|
Kenneth
W. Gilbert
|
58
|
Director
|
|
Richard
A. Mandell
|
66
|
Director
|
|
Joel
E. Smilow
|
75
|
Director
|
|
Brian
L. Schorr
|
50
|
Executive
Vice President and Chief Legal Officer
|
|
Chad
Fauser
|
35
|
Executive
Vice President
|
|
Greg
Essner
|
47
|
Treasurer
and Chief Financial Officer
|
|
David
I. Mossé
|
35
|
General
Counsel, Secretary and Chief Compliance
Officer
|
Nelson Peltz
has been the
Chairman of our Board since our inception. Mr. Peltz is also the
Chief Executive Officer and a founding partner of Trian Fund Management,
L.P. Mr. Peltz currently serves as non-executive Chairman of
Wendy’s/Arby’s Group, Inc. (formerly Triarc Companies, Inc.). From
1993 through June 2007, Mr. Peltz served as Chairman, Chief Executive Officer
and a director of Triarc. From its formation in 1989 to 1993, Mr.
Peltz was Chairman and Chief Executive Officer of Trian Group, Limited
Partnership, which provided investment banking and management services for
entities controlled by Mr. Peltz and his business partner Peter W.
May. From 1983 until 1988, he was Chairman and Chief Executive
Officer and a director of Triangle Industries, Inc., which, through wholly-owned
subsidiaries, was, at that time, a manufacturer of packaging products (through
American National Can Company), copper electrical wire and cable and steel
conduit and currency and coin handling products. Mr. Peltz has been a
director of H. J. Heinz Company since 2006. From 2004 until
2007, Mr. Peltz was Chairman of the board of directors of Deerfield Capital
Corp. (formerly Deerfield Triarc Capital Corp.) and a member of its investment
committee. From 2003 to 2006, he served as a director of Encore
Capital Group, Inc. Mr. Peltz is Co-Chairman of the Board of
Directors of the Simon Wiesenthal Center and Chairman of the New York
Tolerance Center. Mr. Peltz attended The Wharton School of the
University of Pennsylvania. He is the father-in-law of Edward P.
Garden.
Peter W. May
has been the Vice
Chairman of our Board since our inception. Mr. May is also the
President and a founding partner of Trian Fund Management,
L.P. Mr. May currently serves as non-executive Vice Chairman of
Wendy’s/ Arby’s (formerly Triarc). From 1993 through June 2007, Mr.
May served as President, Chief Operating Officer and a director of
Triarc. In addition, he has been a director of Tiffany & Co.
since 2008 and a director of Deerfield Capital Corp. since 2004. From
its formation in 1989 until 1993, Mr. May was President and Chief Operating
Officer of Trian Group. He was President and Chief Operating Officer
and a director of Triangle Industries from 1983 until December
1988. In addition, from 1999 to 2000, he was a director of Ascent
Entertainment Group and, from 1998 to 2007, he was a director of Encore Capital
Group, Inc. Mr. May is Chairman of the board of trustees of Mount
Sinai Medical Center in New York. Mr. May is a graduate of the
University of Chicago, A.B. and The University of Chicago School of Business,
M.B.A. and is a Certified Public Accountant. Mr. May also holds an Honorary
Doctorate in Humane Letters from The Mount Sinai School of Medicine of New York
University.
Edward P. Garden
has been our
President, Chief Executive Officer and a director since our
inception. Mr. Garden is also the Vice Chairman and a founding
partner of Trian Fund Management, L.P. Mr. Garden currently serves a
director of Wendy’s/Arby’s (formerly Triarc). From 2004 through June
2007, Mr. Garden served as Vice Chairman of Triarc, where he was Executive Vice
President from 2003 until 2004. Mr. Garden has also been a director
of Chemtura Corporation since January 2007. Mr. Garden served as a
member of the investment committee of Deerfield Capital Corp. from 2004 until
2007. Prior to joining Triarc, from 1999 to 2003, Mr. Garden was a
Managing Director of Credit Suisse First Boston, where he served as a senior
investment banker in the Financial Sponsors Group. From 1994 to 1999,
he was a Managing Director at BT Alex Brown, where he was a senior member of the
Financial Sponsors Group and, prior to that, co-head of Equity Capital
Markets. Mr. Garden graduated from Harvard College with a B.A. in
Economics. Mr. Garden is the son-in-law of Nelson Peltz.
Geoffrey C. Bible
has been a
director since December 2007. Since 2002, Mr. Bible has served
on the board of SABMiller plc and on the Advisory Board of Metalmark Capital
LLC, a private equity firm. Prior to his retirement in 2002, Mr.
Bible served as Chief Executive Officer of Altria Group, Inc. (formerly Philip
Morris Companies Inc.) from 1994 until 2002 and as Chairman of the Altria board
from 1995 until 2002. Between 2001 and 2002, he also served as
Chairman of the Board of Kraft Foods Inc. Mr. Bible also served as a
director of News Corp. from 1998 until 2004, the New York Stock Exchange
from 1995 until 2001 and B-Sky-B plc from 1994 until 1997. He is a
graduate of the Institute of Chartered Accountants in Australia and the
Chartered Institute of Management Accountants in the United
Kingdom.
Kenneth W. Gilbert
has been a
director since December 2007. Between 2003 and 2004, he served
as President and Chief Operating Officer of Uniworld Group, an advertising
agency. Between 1995 and 2001, he was Senior Vice President and Chief
Marketing Officer of Snapple Beverage Group, Inc. In
September 2004, Mr. Gilbert founded his current company RazorFocus, a
marketing research and consultancy serving a broad range of clients in package
goods, pharmaceutical, insurance, publishing and advertising. He
attended Howard University and has a B.S. in Corporate and Organizational
Management from the University of Connecticut.
Richard A. Mandell
has been a
director since December 2007. Mr. Mandell is a private investor
and financial consultant. From 2004 until May 2007, he served as
the Chairman of the Board of Directors of Encore Capital Group, Inc., where he
currently serves as a director. Mr. Mandell also serves on the Board
of Directors of Hampshire Group LTD. Mr. Mandell was previously a
Vice President—Private Investments of Clariden Asset Management (NY) Inc., a
subsidiary of Clariden Bank, a private Swiss bank, and prior to that, he was a
Managing Director at Prudential Securities Incorporated. Mr. Mandell
holds a B.S.E. degree from the Wharton School of the University of Pennsylvania
and is a Certified Public Accountant.
Joel E. Smilow
has been a
director since December 2007. Mr. Smilow is the Chairman of
Dinex Group, LLC, a company he formed in 1992 with chef Daniel Boulud that owns
and/or operates nine restaurants and a catering business in New York City and
four other cities. Formerly, Mr. Smilow was the Chairman of the Board
and Chief Executive Officer of Playtex Products, Inc. He retired in
1995 having served as Chairman and/or President of the company and its
predecessors for more than 25 years. Mr. Smilow is a graduate of Yale
College and the Harvard Graduate School of Business Administration.
Brian L. Schorr
has been our
Executive Vice President and Chief Legal Officer since our
inception. Mr. Schorr is Chief Legal Officer of Trian Fund
Management, L.P. where he has served as a member of the investment team and
chief legal strategist since November 2005. From June 1994
through June 2007, he served as Executive Vice President and General
Counsel of Triarc and certain of its subsidiaries. Prior thereto, Mr.
Schorr was a partner at the law firm of Paul, Weiss, Rifkind, Wharton &
Garrison LLP, which he joined in 1982. Mr. Schorr received a J.D.
from the New York University School of Law and a B.A. and an M.A. from
Wesleyan University.
Chad Fauser
has been our
Executive Vice President since our inception. He has been a member of
the investment team of Trian Fund Management, L.P. since
November 2005. From October 2003 through June 2007, he
served as a Vice President, Corporate Development, of Triarc. Prior
to joining Triarc, Mr. Fauser worked at Morgan Stanley from 1996 to 2003,
working in various groups including leveraged finance, mergers and acquisitions,
financial sponsor coverage and equity capital markets. Mr. Fauser
received a B.A. in Economics from Duke University.
Greg Essner
has been our
Treasurer and Chief Financial Officer since our inception. Mr. Essner
has been Chief Financial Officer of Trian Fund Management, L.P. since its
inception in November 2005. He was also Senior Vice President
and Treasurer of Triarc from 2005 through June 2007. Prior
thereto, he was Vice President, Treasury Services and Financial Planning of
Triarc since 2001. From 2000 to 2001, he was Corporate Controller of
FrontLine Capital Group. Prior to joining FrontLine, he held various
positions at Triarc from 1993 to 2000, most recently that of Controller and
Assistant Treasurer. Mr. Essner received a B.B.A. in Accounting from
Adelphi University.
David I. Mossé
has been our
General Counsel, Secretary and Chief Compliance Officer since
January 2008. Mr. Mossé has been the Chief Compliance Officer
and a member of the investment team of Trian Fund Management, L.P. since
November 2005. He is a director of Farrell Sports Concepts,
Inc., a Trian Partners portfolio company. Mr. Mossé served as a Vice
President and Assistant General Counsel of Triarc from October 2003 through
June 2007. Prior to joining Triarc, from 1997 to 2000 and again
from 2002 to 2003, Mr. Mossé was an associate with the law firm Cravath, Swaine
& Moore LLP, and from 2000 to 2002 Mr. Mossé was a Senior Attorney with the
law firm Venture Law Group. Mr. Mossé received a J.D. from
New York University School of Law and a B.A. from Duke
University.
Number
and Terms of Office of Directors and Officers
Our
amended and restated certificate of incorporation divides our board of directors
into three classes with only one class of directors being elected in each year
and each class (except for those directors appointed prior to our first annual
meeting of stockholders) serving a three-year term. The term of
office of the first class of directors, consisting of Messrs. May and
Smilow, will expire at our first annual meeting of stockholders in
2009. The term of office of the second class of directors, consisting
of Messrs. Garden and Bible, will expire at the second annual meeting of
stockholders in 2010. The term of office of the third class of
directors, consisting of Messrs. Peltz, Gilbert and Mandell, will expire at the
third annual meeting of stockholders in 2011.
Our
officers are appointed by the board of directors and serve at the discretion of
the board of directors, rather than for specific terms of office. Our
board of directors is authorized to appoint persons to the offices set forth in
our amended and restated bylaws as it deems appropriate. Our amended
and restated bylaws provide that our officers may consist of a Chairman of the
Board, Chief Executive Officer, President, Chief Financial Officer, Vice
Presidents, Secretary, Treasurer and such other officers as may be determined by
the board of directors.
Collectively,
through their positions described above, our officers and directors have
extensive experience in investing in, owning and operating
businesses. These individuals will play a key role in identifying and
evaluating prospective acquisition candidates, selecting the target businesses,
and structuring, negotiating and consummating their acquisition.
Director
Independence
The NYSE
Alternext US requires that a majority of our board of directors must be composed
of independent directors, which are defined generally as persons other than an
officer or employee of the company or its subsidiaries or any other individual
having a relationship that, in the opinion of the company’s board of directors,
would interfere with the director’s exercise of independent judgment in carrying
out the responsibilities of a director. Our board of directors has
determined that each of Messrs. Bible, Gilbert, Mandell and Smilow are
independent directors as such term is defined under the rules of the NYSE
Alternext US and Rule 10A-3 of the Exchange Act. Our independent
directors will have regularly scheduled meetings or executive sessions at which
only independent directors are present.
Committees
of the Board
Our board
of directors has three standing committees: an audit committee, an executive
committee and a nominating and corporate governance
committee. Subject to phase-in rules and a limited exception, the
rules of the NYSE Alternext US and Rule 10A of the Exchange Act require that the
audit committee of a listed company be comprised solely of independent
directors. Subject to phase-in rules and a limited exception, the
rules of the NYSE Alternext US require that the nominating and corporate
governance committee of a listed company be comprised solely of independent
directors.
Audit
Committee
We have
established an audit committee of our board of directors, which consists of Mr.
Mandell (Chairman), Mr. Bible and Mr. Smilow, all of whom have been determined
by our board of directors to be “independent” as defined in Rule 10A-3 of the
Exchange Act and the rules of the NYSE Alternext US and to meet the financial
literacy requirements under the rules of the NYSE Alternext US. In
addition, the board of directors has determined that Mr. Mandell satisfies the
NYSE Alternext US’s definition of financial sophistication and also qualifies as
an “audit committee financial expert,” as defined under rules and regulations of
the Securities and Exchange Commission.
The audit
committee’s duties, which are specified in our Audit Committee Charter, include,
but are not limited to:
|
·
|
reviewing
and discussing with management and the independent auditor the annual
audited financial statements and recommending to the board whether the
audited financial statements should be included in our Annual Report on
Form 10-K;
|
|
·
|
discussing
with management and the independent auditor significant financial
reporting issues and judgments made in connection with the preparation of
our financial statements;
|
|
·
|
discussing
with management major risk assessment and risk management
policies;
|
|
·
|
monitoring
the independence of the independent
auditor;
|
|
·
|
verifying
the rotation of the lead (or coordinating) audit partner having primary
responsibility for the audit and the audit partner responsible for
reviewing the audit as required by
law;
|
|
·
|
reviewing
and approving all related-party
transactions;
|
|
·
|
inquiring
and discussing with management our compliance with applicable laws and
regulations;
|
|
·
|
pre-approving
all audit services and permitted non-audit services to be performed by our
independent auditor, including the fees and terms of the services to be
performed;
|
|
·
|
appointing
or replacing the independent
auditor;
|
|
·
|
determining
the compensation and oversight of the work of the independent auditor
(including resolution of disagreements between management and the
independent auditor regarding financial reporting) for the purpose of
preparing or issuing an audit report or related work;
and
|
|
·
|
establishing
procedures for the receipt, retention and treatment of complaints received
by us regarding accounting, internal accounting controls or reports which
raise material issues regarding our financial statements or accounting
policies.
|
Prior to
our consummation of a business combination, the audit committee will also
monitor on a quarterly basis our compliance with the material terms relating to
our initial public offering. If any noncompliance is identified, then
the audit committee will be responsible for immediately taking all action
necessary to rectify such noncompliance or otherwise cause compliance with the
terms of our initial public offering.
Executive
Committee
We have
established an executive committee of the board of directors. The
executive committee has the authority to act between meetings of the board of
directors, except where action of the board of directors is required by
law. The members of the executive committee are Mr. Peltz (Chairman),
Mr. Garden, Mr. Gilbert, Mr. Mandell and Mr. May.
Nominating
and Corporate Governance Committee
We have
established a nominating and corporate governance committee of the board of
directors, which consists of Mr. Gilbert (Chairman), Mr. Bible and Mr. Mandell,
all of whom have been determined by our board of directors to be “independent”
as defined in Rule 10A-3 of the Exchange Act and the rules of the NYSE Alternext
US. The nominating and corporate governance committee is responsible
for overseeing the selection of persons to be nominated to serve on our board of
directors. The nominating and corporate governance committee
considers persons identified by its members, management, stockholders,
investment bankers and others.
The
guidelines for selecting nominees, which are specified in the Charter of the
Nominating and Corporate Governance Committee, generally provide that persons to
be nominated:
|
·
|
should
have demonstrated notable or significant achievements in business,
education or public service;
|
|
·
|
should
possess the requisite intelligence, education and experience to make a
significant contribution to the board of directors and bring a range of
skills, diverse perspectives and backgrounds to its deliberations;
and
|
|
·
|
should
have the highest ethical standards, a strong sense of professionalism and
intense dedication to serving the interests of the
stockholders.
|
The nominating and corporate governance
committee has established procedures that stockholders must follow in order to
recommend director candidates for consideration by the committee. In
general, recommendations must be received by the company no later than 30 days
after the end of the company’s fiscal year and the recommendation must contain
detailed information regarding the qualifications, as well as the written
consent, of each candidate being recommended.
Code
of Ethics and Committee Charters
We have
adopted a code of ethics that applies to our officers, directors and
employees. We have filed a copy of our code of ethics as an exhibit
to our Current Report on Form 8-K filed on January 29, 2008 and copies of our
committee charters as exhibits to this Annual Report on Form
10-K. You may review these documents by accessing our public filings
at the Securities and Exchange Commission’s web site at
www.sec.gov
. In
addition, a copy of the code of ethics will be provided without charge upon
request to us. We intend to disclose any amendments to or waivers of
certain provisions of our code of ethics in a current report on Form
8-K.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our officers, directors and persons who own
more than ten percent of a registered class of our equity securities to file
reports of ownership and changes in ownership with the SEC. Officers,
directors and ten percent stockholders are required by regulation to furnish us
with copies of all Section 16(a) forms they file. Based solely on a
review of the reports furnished to us, or written representations from reporting
persons that all reportable transactions were reported, we believe that during
the fiscal year ended December 31, 2008, our officers, directors and greater
than ten percent owners timely filed all reports they were required to file
under Section 16(a), except that four transactions entered into by funds managed
by Trian Fund Management, L.P. were inadvertently reported late on one report,
and one transaction entered into by Millenco LLC and its affiliates was reported
late on one report.
|
ITEM
11.
|
Executive
Compensation.
|
None of
our executive officers or directors has received or will receive any cash
compensation for services rendered prior to the consummation of our business
combination. Other than (i) the $10,000 per-month administrative
fee paid to Trian Fund Management, L.P., (ii) reimbursement of any
out-of-pocket expenses incurred in connection with activities on our behalf such
as identifying potential target businesses and performing due diligence on
suitable business combinations, and (iii) by virtue of the ownership of the
sponsor units, the sponsor warrants and any securities included in or issuable
upon exercise of such securities, no compensation or fees of any kind, including
finder’s fees, consulting fees or other similar compensation, will be paid to
our sponsor, officers or directors, or to any of their respective affiliates,
prior to or with respect to our business combination (regardless of the type of
transaction that it is). We are not party to any agreements with our
executive officers and directors that provide for benefits upon termination of
employment.
After the
consummation of our business combination, directors or members of our management
team who remain with us may be paid consulting, management or other fees from
the combined company with any and all amounts being fully disclosed to
stockholders, to the extent then known, in the proxy solicitation materials
furnished to our stockholders in connection with the stockholder meeting to
approve a proposed business combination. It is unlikely the amount of
such compensation will be known at the time of a stockholder meeting held to
consider a business combination, as it will be up to the directors of the
post-combination business to determine executive and director
compensation. We do not intend to take any action to ensure that
members of our management team maintain their positions with us after the
consummation of our business combination, although it is possible that some or
all of our executive officers and directors may negotiate employment or
consulting arrangements to remain with the company after the business
combination. The existence or terms of any such employment or
consulting arrangements to retain their positions with the company may influence
our management’s motivation in identifying or selecting a target business but we
do not believe that the ability of our management to remain with the company
after the consummation of a business combination will be a determining factor in
our decision to proceed with any potential business combination.
|
ITEM
12.
|
Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder
Matters.
|
The
following table sets forth information regarding the beneficial ownership of our
common stock as of February 17, 2009, by:
|
·
|
each
person known by us to be the beneficial owner of more than 5% of our
outstanding shares of common stock;
|
|
·
|
each
of our officers and directors; and
|
|
·
|
all
our officers and directors as a
group.
|
Unless
otherwise indicated, we believe that all persons named in the table have sole
voting and investment power with respect to all shares of common stock
beneficially owned by them. The following table does not reflect
record or beneficial ownership of the sponsor warrants as these warrants are not
exercisable within 60 days of February 17, 2009.
Name
and Address of Beneficial Owner
|
|
Number
of Shares
Beneficially
Owned
(1)
|
|
|
Percentage
of
Outstanding
Common Stock
|
|
|
Trian
Acquisition I, LLC(2),(3)
|
|
|
21,106,667
|
|
|
|
18.35
|
%
|
|
Trian
Fund Management, L.P.(3),(4)
|
|
|
5,968,400
|
|
|
|
5.19
|
%
|
|
Nelson
Peltz(2),(3),(4)
|
|
|
27,075,067
|
|
|
|
23.54
|
%
|
|
Peter
W. May(2),(3),(4)
|
|
|
27,075,067
|
|
|
|
23.54
|
%
|
|
Edward
P. Garden(2),(3),(4)
|
|
|
27,075,067
|
|
|
|
23.54
|
%
|
|
Geoffrey
C. Bible(5)
|
|
|
100,000
|
|
|
|
0.09
|
%
|
|
Kenneth
W. Gilbert(3)
|
|
|
100,000
|
|
|
|
0.09
|
%
|
|
Richard
A. Mandell(3)
|
|
|
100,000
|
|
|
|
0.09
|
%
|
|
Joel
E. Smilow(3)
|
|
|
306,240
|
|
|
|
0.27
|
%
|
|
Brian
L. Schorr(3),(6)
|
|
|
533,333
|
|
|
|
0.46
|
%
|
|
Chad
Fauser(3),(6)
|
|
|
373,333
|
|
|
|
0.32
|
%
|
|
Greg
Essner(3),(6)
|
|
|
53,333
|
|
|
|
*
|
|
|
David
I. Mossé(3),(6)
|
|
|
53,333
|
|
|
|
*
|
|
|
Integrated
Core Strategies/Millenco(7)
|
|
|
13,324,201
|
|
|
|
11.59
|
%
|
|
QVT
Financial LP(8)
|
|
|
6,065,700
|
|
|
|
5.27
|
%
|
|
Deutsche
Bank AG(9)
|
|
|
8,454,653
|
|
|
|
7.35
|
%
|
|
All
officers and directors as a group
(eleven
persons)
|
|
|
28,694,639
|
|
|
|
24.95
|
%
|
|
(1)
|
Gives
effect to the stock dividend of 0.06667 shares of common stock for each
issued and outstanding share of common stock that was declared on
January 23, 2008.
|
|
(2)
|
Trian
Acquisition I, LLC, our sponsor, owns 21,106,667 shares of common
stock. Each of Mr. Peltz, Mr. May and Mr. Garden is a
member of Trian Acquisition I, LLC. Each of Mr. Peltz, Mr.
May and Mr. Garden may be deemed to be the beneficial owner of all of
the shares of our common
stock held by our
sponsor. Each of Mr. Peltz, Mr. May and Mr. Garden
disclaims beneficial ownership of any shares in which he does not have a
pecuniary interest.
|
|
(3)
|
The
business addresses of our sponsor, Trian Fund Management, L.P., Mr. Peltz,
Mr. May, Mr. Garden, Mr. Gilbert, Mr. Mandell, Mr. Smilow, Mr. Schorr, Mr.
Fauser, Mr. Essner and Mr. Mossé is c/o Trian Fund Management, L.P., 280
Park Avenue, 41
st
Floor, New York, New York 10017.
|
|
|
|
|
(4)
|
Trian
Fund Management, L.P. beneficially owns an aggregate amount of 5,968,400
shares of common stock. This amount excludes 3,311,000 shares
issuable upon the exercise of warrants beneficially owned by Trian Fund
Management, L.P. that are not currently exercisable and will not become
exercisable within 60 days of February 17, 2009. Trian Fund
Management GP, LLC, as general partner of Trian Fund Management, L.P., may
be deemed to beneficially own the shares of common stock reported by Trian
Fund Management, L.P. Each of Mr. Peltz, Mr. May and Mr.
Garden is a member of Trian Fund Management GP, LLC. Each of
Mr. Peltz, Mr. May and Mr. Garden may be deemed to be the beneficial
owner of all of the shares of our common stock beneficially owned by Trian
Fund Management GP, LLC. Each of Mr. Peltz, Mr. May and
Mr. Garden disclaims beneficial ownership of any shares in which he does
not have a pecuniary interest.
|
|
(5)
|
The
business address of Mr. Bible is c/o Wagga Enterprises, One East Putnam
Avenue, Greenwich, Connecticut
06830.
|
|
(6)
|
For
each of the officers, one-third of these shares vest on December 31,
2009, and the remaining two-thirds of these shares vest on
December 31, 2010, provided that the officer is still affiliated with
us or our sponsor as an employee, officer or director, or such affiliation
has been terminated without cause or as a result of the death or
disability of the officer or by the officer for good reason. In
the event such officer is not affiliated with us or our sponsor prior to
the dates set forth above, for reasons other than as described in the
previous sentence, our sponsor has a right to repurchase under certain
terms and conditions these shares at a purchase price of approximately
$0.0011 per share. Our sponsor’s repurchase right is assignable
to us by our sponsor and such repurchase right will expire upon a change
in control that occurs following the consummation of our business
combination.
|
|
(7)
|
Integrated
Core Strategies (US) LLC (“Integrated Core Strategies”) beneficially owns
11,242,161 shares of common stock. This amount excludes
4,730,310 shares issuable upon the exercise of warrants held by Integrated
Core Strategies that are not currently exercisable and will not become
exercisable within 60 days of February 17, 2009. Millenco LLC
(“Millenco”) beneficially owns 2,082,040 shares of common
stock. Millennium Management LLC (‘‘Millennium Management’’) is
(i) the general partner of Integrated Holding Group LP, which is the
managing member of Integrated Core Strategies, and (ii) the manager of
Millenco. Consequently, Millennium Management may be deemed to
have shared voting control and investment discretion over securities owned
by Integrated Core Strategies and Millenco. Israel A. Englander
is the managing member of Millennium Management, and consequently may be
deemed to have shared voting control and investment discretion over
securities deemed to be beneficially owned by Millennium Management. The
business address of Integrated Core Strategies, Millenco, Millennium
Management and Mr. Englander is c/o Millennium Management LLC,
666 Fifth Avenue, New York, New York 10103. The foregoing
information was derived from a Schedule 13G/A filed with the Securities
and Exchange Commission on February 10,
2009.
|
|
(8)
|
QVT
Financial LP (“QVT Financial”) is the investment manager for QVT Fund LP
(“QVT Fund”), which beneficially owns 5,101,209 shares of common
stock. QVT Financial is the investment manager for Quintessence
Fund L.P. (“Quintessence”), which beneficially owns 524,800 shares of
common stock. QVT Financial is also the investment manager for
a separate discretionary account managed for a third party (the “QVT
Separate Account”), which holds 439,691 shares of common
stock. QVT Financial has the power to direct the vote and
disposition of the common stock held by each of the QVT Fund, Quintessence
and the QVT Separate Account. Accordingly, QVT Financial may be
deemed to be the beneficial owner of an aggregate amount of 6,065,700
shares of common stock. QVT Financial GP LLC, as
general partner of QVT Financial, may be deemed to beneficially own the
same number of shares of common stock as reported for QVT
Financial. QVT Associates GP LLC, as general partner of the QVT
Fund, may be deemed to be beneficially own the aggregate number of shares
of common stock owned by the QVT Fund and Quintessence, and accordingly,
QVT Associates GP LLC may be deemed to be the beneficial owner of an
aggregate amount of 5,626,009 shares of common stock. The QVT
Fund, Quintessence and the QVT Separate Account also own warrants to
purchase additional shares of common stock that are not currently
exercisable and will not become exercisable within 60 days of February 17,
2009. The business address of QVT Financial, QVT Financial GP
LLC and QVT Associates GP LLC is 1177 Avenue of the Americas, 9
th
Floor, New York, New York 10036 and the business address of the QVT Fund
is c/o Walkers SPV, Walker House, 87 Mary Street, George Town, Grand
Cayman, KY1-9002 Cayman Islands. The foregoing information was
derived from a Schedule 13G/A filed with the Securities and Exchange
Commission on February 9, 2009.
|
|
(9)
|
Reflects
3,121,885 and 5,332,768 shares of common stock beneficially owned by
Deutsche Bank AG, London Branch, and Deutsche Bank Securities Inc.,
respectively, each of which is a subsidiary of Deutsche Bank
AG. The business address of Deutsche Bank AG is
Theodor-Heuss-Allee 70, 60468 Frankfurt am Main, Federal Republic of
Germany. The foregoing information was derived from a Schedule
13G filed with the Securities and Exchange Commission on February 6,
2009.
|
|
ITEM
13.
|
Certain Relationships and Related Transactions, and Director
Independence.
|
Mr.
Peltz, Mr. May and Mr. Garden own all of the outstanding interests in our
sponsor. In October 2007, we issued an aggregate of 23,000,000
units (after giving effect to an adjustment in connection with the stock
dividend described below) to our sponsor, for an aggregate purchase price of
$25,000 in cash, or approximately $0.0011 per unit. On
January 23, 2008, we declared a dividend of 0.06667 shares of common stock
for each share of common stock issued and outstanding and adjusted the number of
sponsor units and warrants included in (or formerly included in) such units, so
that, after giving effect to our initial public offering, our sponsor, our
officers and directors and our other non-public stockholders and their permitted
transferees own 20% of our issued and outstanding units (or their equivalent in
shares of common stock and warrants).
In
December 2007, our sponsor sold an aggregate of 1,893,332 shares of common
stock included in the sponsor units (after giving effect to the stock dividend)
to certain of our officers and directors and other related parties for a
purchase price per share equal to the purchase price per unit paid by our
sponsor. Included in these sales are the following sales of shares of
our common stock to the officers and directors listed below:
|
|
Number
of
Shares
|
|
|
|
Brian
L. Schorr
|
533,333
|
|
Executive
Vice President and Chief Legal Officer
|
|
Chad
Fauser
|
373,333
|
|
Executive
Vice President
|
|
Geoffrey
C. Bible
|
100,000
|
|
Director
|
|
Kenneth
W. Gilbert
|
100,000
|
|
Director
|
|
Richard
A. Mandell
|
100,000
|
|
Director
|
|
Joel
E. Smilow
|
100,000
|
|
Director
|
|
Greg
Essner
|
53,333
|
|
Treasurer
and Chief Financial Officer
|
|
David
I. Mossé
|
53,333
|
|
General
Counsel, Secretary and Chief Compliance Officer
|
|
|
|
|
|
|
|
Our
sponsor also purchased 10,000,000 warrants from us in a private placement on
January 29, 2008, immediately prior to the closing of our initial public
offering. Each sponsor warrant entitles the holder to purchase one
share of our common stock. Our sponsor has agreed that the sponsor
warrants (including the common stock issuable upon exercise of the warrants)
will not, subject to certain limited exceptions, be transferred, assigned or
sold by it until after the consummation of our business
combination.
In
addition, on January 29, 2008, Trian Fund Management, L.P., which is an
affiliate of our sponsor, entered into an agreement with Deutsche Bank
Securities Inc. and Merrill Lynch & Co. in accordance with Rule 10b5-1 under
the Securities Exchange Act of 1934, as amended, pursuant to which it will, or
it will cause one of its affiliates or the funds and accounts managed by it or
its affiliates to, place limit orders for up to $75 million of our common stock
commencing two business days after we file a preliminary proxy statement
relating to our business combination and ending on the business day immediately
preceding the record date for the meeting of stockholders at which such business
combination is to be approved, or earlier in certain
circumstances. The limit orders require such entities to purchase any
of our shares of common stock offered for sale at or below a price equal to the
per-share value of the trust account as of the date of our most recent Annual
Report on Form 10-K or Quarterly Report on Form 10-Q, as applicable, filed prior
to such purchase. The purchase of such shares will be made by
Deutsche Bank Securities Inc., Merrill Lynch & Co. or another broker dealer
mutually agreed upon by such firms and Trian Fund Management, L.P. It
is intended that purchases pursuant to the limit orders will satisfy the
conditions of Rule 10b-18(b) under the Exchange Act and the broker’s purchase
obligation will otherwise be subject to applicable law, including Regulation M
which may prohibit purchases under certain circumstances. Such
entities will agree to vote all shares of common stock purchased pursuant to
such limit orders in favor of our business combination and in favor of an
extension of our corporate existence to up to July 23, 2010 (30 months from
the date of the prospectus relating to our initial public offering) in the event
we have entered into a definitive agreement for, but have not yet consummated,
our business combination. As a result, such entities may be able to
influence the outcome of our business combination or a proposed
extension. Such entities will not be permitted to exercise conversion
rights with respect to any shares of common stock purchased pursuant to such
limit orders but they will participate in any liquidation distribution with
respect to such shares. Any portion of the $75 million not used for
open market purchases of common stock will be applied to the purchase of units
from us, at a price of $10.00 per unit, immediately prior to the consummation of
our business combination. Such entities will agree not to sell or
transfer any shares of common stock or co-investment units (including the
securities underlying or issuable upon exercise of such securities) purchased
pursuant to these agreements, subject to certain exceptions, until 180 days
after the consummation of our business combination.
Trian
Fund Management, L.P. has agreed to, from January 29, 2008 through the
earlier of our consummation of a business combination or our liquidation, make
available to us office space and certain office and secretarial services, as we
may require from time to time. We have agreed to pay Trian Fund
Management, L.P. $10,000 per month for these services. However, this
arrangement is solely for our benefit and is not intended to provide any of our
officers or directors compensation in lieu of salary. We believe
that, based on rents and fees for similar services in the New York
metropolitan area, the fee charged by Trian Fund Management, L.P. is at least as
favorable as we could have obtained from an unaffiliated person.
In
connection with travel relating to the January 2008 marketing efforts with
respect to our initial public offering, aircraft owned by Wendy’s/Arby’s and one
of its subsidiaries were used. The aircraft were made available
pursuant to the terms of aircraft time sharing agreements between Wendy’s/Arby’s
and Trian Fund Management, L.P. We reimbursed Trian Fund Management,
L.P., which in turn reimbursed Wendy’s/Arby’s pursuant to the time sharing
agreements, for the incremental costs of the air travel, which aggregated
$293,221.
Other
than (i) the $10,000 per-month administrative fee paid to Trian Fund
Management, L.P., (ii) reimbursement of any out-of-pocket expenses incurred
in connection with activities on our behalf such as identifying potential target
businesses and performing due diligence on suitable business combinations and
(iii) by virtue of the ownership of the sponsor units, the sponsor warrants
and any securities included in or issuable upon exercise of such securities, no
compensation or fees of any kind, including finder’s fees, consulting fees or
other similar compensation, will be paid to our sponsor, officers or directors,
or to any of their respective affiliates, prior to or with respect to our
business combination (regardless of the type of transaction that it
is).
We have
entered into a license agreement with Trian Fund Management, L.P. permitting us
to use the corporate name “Trian” prior to our business
combination. We are not obligated to pay Trian Fund Management, L.P.
for this license.
On
November 5, 2007, our sponsor made a $250,000 loan to us to fund a portion of
the organizational and offering expenses owed by us to third
parties. The principal balance of the loan was repaid on January 29,
2008. The loan had been repayable on the earlier of (i) the date
of the consummation of our initial public offering and
(ii) September 30, 2008. No interest accrued on the unpaid
principal balance of the loan.
We have
agreed to indemnify our officers and directors against certain liabilities and
expenses. Prior to our business combination, Trian Fund Management,
L.P. will provide guarantees of certain of our obligations to our officers and
directors under the indemnity agreements. We will not pay a fee for
any such guarantees.
Prior to
consummation of our business combination, we will seek to have all vendors,
prospective target businesses or other entities, which we refer to as potential
contracted parties or a potential contracted party, that we engage, execute
agreements with us waiving any right, title, interest or claim of any kind in or
to any monies held in the trust account for the benefit of our public
stockholders. If a potential contracted party refuses to execute such
a waiver, then Trian Fund Management, L.P. has agreed to cover the potential
claims made by such party for services rendered and goods sold to the extent we
do not have working capital outside the trust account (including amounts
available for release) sufficient to cover such claims. However,
Trian Fund Management, L.P.’s obligation does not apply to any claims under our
indemnity of the underwriters of our initial public offering against certain
liabilities, including liabilities under the Securities Act. In the
event that Trian Fund Management, L.P. did not comply with its indemnity
obligation, we believe that we would have an obligation to seek enforcement of
the obligation and that our board of directors would have a fiduciary duty to
seek enforcement of such obligation on our behalf.
We have
entered into a registration rights agreement with respect to the sponsor units
and sponsor warrants. Pursuant to the registration rights agreement
between us, our sponsor, our other stockholders who owned our common stock prior
to the initial public offering, including Messrs. Bible, Gilbert,
Mandell, Smilow, Schorr, Fauser, Essner and Mossé, and Trian Fund Management,
L.P., the holders of the sponsor units and the co-investment units (and the
common stock and warrants comprising such units and the common stock issuable
upon exercise of such warrants), the sponsor warrants (and the common stock
issuable upon exercise of such warrants) and any shares of common stock
purchased pursuant to the Trian Fund Management, L.P. purchase commitment are
entitled to four demand registration rights, “piggy-back” registration rights
and short-form resale registration rights commencing after the consummation of
our business combination, in the case of the sponsor warrants, and 180 days
after the consummation of our business combination, in the case of the sponsor
units, the co-investment units and the shares of common stock purchased pursuant
to the purchase commitment. We will bear the expenses incurred in
connection with the filing of any such registration statements pursuant to such
rights.
Pursuant
to lock-up provisions in letter agreements with us and the underwriters entered
into by our sponsor, our officers and directors and our other non-public
stockholders, our sponsor, our officers and directors, and such other
stockholders have agreed, subject to certain exceptions described below, not to
transfer, assign or sell, directly or indirectly:
|
·
|
any
of the sponsor units or any of the common stock or warrants included in
such units (including the common stock issuable upon exercise of the
warrants) for a period of 180 days from the date of consummation of our
business combination, or
|
|
·
|
any
of the sponsor warrants (including the common stock issuable upon exercise
of the warrants) until after we consummate our business
combination.
|
In
addition, the entities participating in the Trian Fund Management, L.P. purchase
commitment will agree not to sell or transfer any shares of common stock or
co-investment units (including the securities underlying or issuable upon
exercise of such securities) purchased pursuant to the purchase commitment,
subject to certain exceptions, until 180 days after the consummation of our
business combination.
Notwithstanding
the foregoing, the sponsor units, the sponsor warrants and the co-investment
units (including the securities underlying or issuable upon exercise of such
securities) and any shares of common stock purchased pursuant to the Trian Fund
Management, L.P. purchase commitment will be transferable to the following
permitted transferees under the following circumstances:
|
·
|
to
us, our officers, directors and employees, any affiliates or family
members of such individuals, our sponsor, Trian Partners, any affiliates
of us, our sponsor or Trian Partners and any officers, directors, members
and employees of our sponsor, Trian Partners or such
affiliates;
|
|
·
|
in
the case of individuals, by gift to a member of the individual’s immediate
family or to a trust, the beneficiary of which is a member of the
individual’s immediate family, an affiliate of the individual or to a
charitable organization;
|
|
·
|
in
the case of an individual pursuant to a qualified domestic relations
order;
|
|
·
|
if
the transferor is a corporation, partnership or limited liability company,
any stockholder, partner or member of the transferor;
and
|
|
·
|
to
any individual or entity by virtue of laws or agreements governing descent
or distribution upon the death or dissolution of the
transferor.
|
All
permitted transferees receiving such securities must agree in writing to be
subject to the same transfer restrictions as our sponsor and any such transfers
will be made in accordance with applicable securities laws.
After our
business combination, members of our management team who remain with us may be
paid consulting, management or other fees from the combined company with any and
all amounts being fully disclosed to our stockholders, to the extent then known,
in the proxy solicitation materials furnished to our stockholders. It
is unlikely the amount of such compensation will be known at the time of a
stockholder meeting held to consider our business combination, as it will be up
to the directors of the post-combination business to determine executive and
director compensation.
All
ongoing and future transactions between us and any member of our management team
or his or her respective affiliates, including loans by members of our
management team, will be on terms as a whole believed by us at that time, based
upon other similar arrangements known to us, to be no less favorable to us than
are available from unaffiliated third parties. Such transactions or
loans, including any forgiveness of loans, involving an aggregate payment or
consideration in excess of $25,000, will require prior approval in each instance
by our audit committee, which will have access, at our expense, to our attorneys
or independent legal counsel. If a transaction with an affiliated
third party were found to be on terms as a whole less favorable to us than with
an unaffiliated third party, we would not engage in such
transaction.
|
ITEM
14.
|
Principal Accountant Fees and
Services.
|
The firm
of Deloitte & Touche LLP (“Deloitte”) acts as our principal
accountant. The following is a summary of fees paid to Deloitte for
services rendered:
Audit
Fees
The
aggregate fees billed or expected to be billed by Deloitte for professional
services rendered for the audit of our annual financial statements for the
fiscal years ended December 31, 2007 and 2008, this Annual Report on Form 10-K
and our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31,
2008, June 30, 2008 and September 30, 2008, each of which were filed in 2008,
were $25,000 with respect to 2007 and $180,000 with respect to
2008.
Audit-Related
Fees
The
aggregate fees billed for audit-related services rendered by Deloitte that are
not reported as Audit Fees for the fiscal years ended December 31, 2007 and 2008
related to services in connection with our initial public offering and amounted
to an aggregate of $140,000.
Tax
Fees
The
aggregate fees expected to be billed for the fiscal year ended December 31, 2008
for the professional services rendered by Deloitte for tax compliance, tax
advice and tax planning are approximately $20,000. We did not receive
professional services for tax compliance, tax advice and tax planning for the
fiscal year ended December 31, 2007.
All
Other Fees
We did
not receive products and services provided from Deloitte, other than those
discussed above, for the fiscal years ended December 31, 2007 and
2008.
Pre-Approval
Policy
The audit
committee pre-approves all audit services and permitted non-audit services by
our independent accountants including the fees and terms thereof (subject to the
de minimis
exceptions
for non-audit services described in the Exchange Act, which are approved by the
audit committee prior to the completion of the audit). The audit
committee may form and delegate authority to subcommittees of the audit
committee consisting of one or more members when appropriate, including the
authority to grant pre-approvals of audit and permitted non-audit services,
provided that decisions of such subcommittee to grant pre-approvals must be
presented to the full audit committee at its next scheduled
meeting. For audit services, each year the independent auditor
provides the audit committee with an engagement letter outlining the scope of
proposed audit services to be performed during the year, which must be formally
accepted by the audit committee before the audit commences. The
independent auditor also submits an audit services fee proposal, which also must
be approved by the audit committee before the audit commences.
PART
IV
|
ITEM
15.
|
Exhibits and
Financial Statement Schedules.
|
(a)
The following documents are filed as a part of this Report:
1. Financial
Statements:
Report of
Independent Registered Public Accounting Firm
Balance
Sheet
Statement
of Operations
Statement
of Stockholders’ Equity
Statement
of Cash Flows
Notes to
Financial Statements
2. Financial
Statement Schedule(s):
All
schedules are omitted for the reason that the information is included in the
financial statements or the notes thereto or that they are not required or are
not applicable.
3. Exhibits:
See
attached Exhibit Index of this Annual Report on Form 10-K.
(b)
Exhibits:
We hereby
file as part of this Annual Report on Form 10-K the Exhibits listed in the
attached Exhibit Index. Exhibits which are incorporated
herein by reference can be inspected and copied at the public reference
facilities maintained by the SEC, 100 F Street, N.E., Room 1580, Washington
D.C. 20549. Such materials can also be accessed through
the SEC’s website at
www.sec.gov
.
(c)
Financial Statement Schedules
All
schedules are omitted for the reason that the information is included in the
financial statements or the notes thereto or that they are not required or are
not applicable.
The
following exhibits are being filed as part of, or incorporated by reference
into, this Annual Report on Form 10-K:
|
|
|
|
1.1
|
Underwriting
Agreement, dated January 23, 2008, among Trian Acquisition I Corp. and
Deutsche Bank Securities Inc. and Merrill Lynch & Co., as
representatives of the underwriters (incorporated by reference to
Exhibit 1.1 of our Current Report on Form 8-K filed on January 29,
2008).
|
|
|
|
|
3.1
|
Amended
and Restated Certificate of Incorporation (incorporated by reference to
Exhibit 3.1 of our Current Report on Form 8-K filed on January 29,
2008).
|
|
|
|
|
3.2
|
Amended
and Restated By-laws (incorporated by reference to Exhibit 3.2 of our
Current Report on Form 8-K filed on January 29, 2008).
|
|
|
|
|
4.1
|
Specimen
Unit Certificate (incorporated by reference to Exhibit 4.1 of
Amendment No. 1 to our Registration Statement on Form S-1 (No.
333-147094)).
|
|
|
|
|
4.2
|
Specimen
Common Stock Certificate (incorporated by reference to Exhibit 4.2 of
Amendment No. 1 to our Registration Statement on Form S-1 (No.
333-147094)).
|
|
|
|
|
4.3
|
Specimen
Warrant Certificate (incorporated by reference to Exhibit 4.3 of
Amendment No. 5 to our Registration Statement on Form S-1 (No.
333-147094)).
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|
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4.4
|
Second
Amended and Restated Warrant Agreement between American Stock Transfer
& Trust Company, as warrant agent, and Trian Acquisition I Corp.
(incorporated by reference to Exhibit 4.4 of Amendment No. 5 to our
Registration Statement on Form S-1 (No. 333-147094)).
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4.5
|
Amendment
to Second Amended and Restated Warrant Agreement, dated as of January 23,
2008, between Trian Acquisition I Corp. and American Stock Transfer &
Trust Company, as warrant agent (incorporated by reference to
Exhibit 4.2 of our Current Report on Form 8-K filed on January 29,
2008).
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|
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10.1
|
Unit
Subscription Agreement between Trian Acquisition I Corp. and Trian
Acquisition I, LLC (incorporated by reference to Exhibit 10.1 of our
Registration Statement on Form S-1 (No. 333-147094)).
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10.2
|
Amendment
to Unit Subscription Agreement, dated as of January 23, 2008, between
Trian Acquisition I Corp. and Trian Acquisition I, LLC (incorporated by
reference to Exhibit 4.3 of our Current Report on Form 8-K filed on
January 29, 2008).
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|
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10.3
|
Amended
and Restated Sponsor Warrant Purchase Agreement between Trian Acquisition
I Corp. and Trian Acquisition I, LLC (incorporated by reference to
Exhibit 10.2 of Amendment No. 3 to our Registration Statement on Form
S-1 (No. 333-147094)).
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10.4
|
Letter
Agreement, dated as of January 23, 2008, among Trian Acquisition I Corp.,
the Underwriters and Trian Acquisition I, LLC (incorporated by reference
to Exhibit 10.7 of our Current Report on Form 8-K filed on January
29, 2008).
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10.5
|
Letter
Agreement, dated as of January 23, 2008, among Trian Acquisition I Corp.,
the Underwriters and each of the officers and management directors
(incorporated by reference to Exhibit 10.4 of our Current Report on
Form 8-K filed on January 29, 2008).
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|
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10.6
|
Letter
Agreement, dated as of January 23, 2008, among Trian Acquisition I Corp.,
the Underwriters and each of the independent directors (incorporated by
reference to Exhibit 10.5 of our Current Report on Form 8-K filed on
January 29, 2008).
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|
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10.7
|
Letter
Agreement, dated as of January 23, 2008, among Trian Acquisition I Corp.,
the Underwriters and each stockholder (who is not also a director or
officer) (incorporated by reference to Exhibit 10.6 of our Current
Report on Form 8-K filed on January 29, 2008).
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10.8
|
Letter
Agreement, dated as of January 23, 2008, between Trian Acquisition I Corp.
and Trian Acquisition I, LLC providing for administrative services
(incorporated by reference to Exhibit 10.9 of our Current Report on
Form 8-K filed on January 29, 2008).
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|
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10.9
|
Registration
Rights Agreement, dated January 29, 2008, among Trian Acquisition I Corp.,
Trian Acquisition I, LLC, Trian Fund Management, L.P. and certain
stockholders (incorporated by reference to Exhibit 10.2 of our
Current Report on Form 8-K filed on January 29, 2008).
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|
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10.10
|
License
Agreement between Trian Acquisition I Corp., Trian Acquisition I, LLC and
Trian Fund Management, L.P. (incorporated by reference to
Exhibit 10.9 of Amendment No. 2 to our Registration Statement on Form
S-1 (No. 333-147094)).
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|
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10.11
|
Co-Investment
Unit Subscription Agreement, dated January 29, 2008, between Trian
Acquisition I Corp. and Trian Fund Management, L.P. (incorporated by
reference to Exhibit 10.3 of our Current Report on Form 8-K filed on
January 29, 2008).
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|
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10.12
|
Letter
Agreement, dated as of January 23, 2008, among Trian Acquisition I Corp.,
the Underwriters and Trian Fund Management, L.P. (incorporated by
reference to Exhibit 10.8 of our Current Report on Form 8-K filed on
January 29, 2008).
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|
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10.13
|
Amended
and Restated Investment Management Trust Agreement, dated as of October 1,
2008, between Trian Acquisition I Corp. and U.S. Trust Company of
Delaware, as trustee (incorporated by reference to Exhibit 99.1 of
our Current Report on Form 8-K filed on October 1,
2008).
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|
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10.14
|
Code
of Conduct and Ethics (incorporated by reference to Exhibit 14 of our
Current Report on Form 8-K filed on January 29, 2008).
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24.1*
|
Power
of Attorney (included on signature page).
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31.1*
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
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31.2*
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
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32.1*
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
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99.1*
|
Charter
of Audit Committee.
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99.2*
|
Charter
of Nominating and Corporate Governance Committee.
|
*Filed
herewith.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, as amended, the Registrant has duly caused this Annual Report on
Form 10-K to be signed on its behalf by the undersigned hereunto duly
authorized.
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Date:
March 19, 2009
|
TRIAN
ACQUISITION I CORP.
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By:
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/s/EDWARD P.
GARDEN
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|
Edward
P. Garden
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|
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|
President,
Chief Executive Officer and Director
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(Duly
Authorized Signatory, Principal Executive
|
|
|
|
Officer)
|
POWER
OF ATTORNEY
KNOW ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints each of Edward P. Garden, Greg Essner, Brian L. Schorr
and David I. Mossé as his true and lawful attorney-in-fact and agent with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities to sign any and all amendments to this Annual
Report on Form 10-K, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the SEC granting unto said
attorney-in-fact and agent the full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
foregoing, as to all intents and purposes as either of them might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and
agent, or their substitute, may lawfully do or cause to be done by virtue
hereof.
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/s/EDWARD P.
GARDEN
Edward
P. Garden
|
|
President,
Chief Executive Officer and Director (Principal Executive
Officer)
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|
March
19, 2009
|
|
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|
/s/GREG
ESSNER
Greg
Essner
|
|
Treasurer
and Chief Financial Officer (Principal Financial and Accounting
Officer)
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|
March
19, 2009
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/s/NELSON
PELTZ
Nelson
Peltz
|
|
Chairman
of the Board
|
|
March
19, 2009
|
|
|
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/s/PETER W.
MAY
Peter
W. May
|
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Vice
Chairman
|
|
March
19, 2009
|
|
|
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/s/GEOFFREY C.
BIBLE
Geoffrey
C. Bible
|
|
Director
|
|
March
19, 2009
|
|
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/s/KENNETH W. GILBERT
Kenneth
W. Gilbert
|
|
Director
|
|
March
19, 2009
|
|
|
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/s/RICHARD A. MANDELL
Richard
A.
Mandell
|
|
Director
|
|
March
19, 2009
|
|
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/s/JOEL E.
SMILOW
Joel
E. Smilow
|
|
Director
|
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March
19, 2009
|
EXHIBIT
31.1
CERTIFICATION
I, Edward
P. Garden, certify that:
1. I
have reviewed this annual report on Form 10-K of Trian Acquisition I
Corp.;
2. Based
on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4. The
registrant’s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
a) Designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within these entities, particularly during the
period in which this report is being prepared;
b) Designed
such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
d) Disclosed
in this report any change in the registrant’s internal control over financial
reporting that occurred during the registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
5. The
registrant’s other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of registrant’s board of directors
(or persons performing the equivalent functions):
a) All
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
b) Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant’s internal control over financial
reporting.
|
Date:
March 19, 2009
|
By:
|
/s/EDWARD P.
GARDEN
|
|
|
|
Edward
P. Garden
|
|
|
|
President
and Chief Executive Officer
|
|
|
|
(Principal
Executive Officer)
|
EXHIBIT
31.2
CERTIFICATION
I, Greg
Essner, certify that:
1.
I have reviewed this annual report on Form 10-K of Trian Acquisition I
Corp.;
2. Based
on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in
light of the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial
condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4. The
registrant’s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
a) Designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within these entities, particularly during the
period in which this report is being prepared;
b) Designed
such internal control over financial reporting, or caused such internal control
over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
c) Evaluated
the effectiveness of the registrant’s disclosure controls and procedures and
presented in this report our conclusions about the effectiveness of the
disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
d) Disclosed
in this report any change in the registrant’s internal control over financial
reporting that occurred during the registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting; and
5. The
registrant’s other certifying officer and I have disclosed, based on our most
recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of registrant’s board of directors
(or persons performing the equivalent functions):
a) All
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the registrant’s ability to record, process, summarize and
report financial information; and
b) Any
fraud, whether or not material, that involves management or other employees who
have a significant role in the registrant’s internal control over financial
reporting.
|
Date:
March 19, 2009
|
By:
|
/s/GREG
ESSNER
|
|
|
|
Greg
Essner
|
|
|
|
Treasurer
and Chief Financial Officer
|
|
|
|
(Principal
Financial Officer)
|
EXHIBIT
32.1
CERTIFICATION PURSUANT TO
18
U.S.C. SECTION 1350,
AS
ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Annual Report of Trian Acquisition I Corp. (the “Company”)
on Form 10-K for the year ended December 31, 2008 (the “Report”), and
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned
officers of the Company does hereby certify, to the best of such officer’s
knowledge, that:
|
|
|
(1)
|
The
Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended;
and
|
|
|
|
(2)
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
|
Date:
March 19, 2009
|
By:
|
/s/EDWARD P.
GARDEN
|
|
|
|
Edward
P. Garden
|
|
|
|
President
and Chief Executive Officer
|
|
Date:
March 19, 2009
|
By:
|
/s/GREG
ESSNER
|
|
|
|
Greg
Essner
|
|
|
|
Treasurer
and Chief Financial Officer
|
A signed
original of this written statement required by Section 906, or other document
authenticating, acknowledging or otherwise adopting the signature that appears
in typed form within the electronic version of this written statement required
by Section 906, has been provided to Trian Acquisition I Corp. and
will be retained by Trian Acquisition I Corp. and furnished to the Securities
and Exchange Commission or its staff upon request.
The
foregoing certification is being furnished solely pursuant to section 906 of the
Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63
of title 18, United States Code) and is not being filed as part of
the Annual Report on Form 10-K or as a separate disclosure
document.