Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
___________
FORM
8-K
___________
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported):
March
2, 2009
___________
BROADPOINT
SECURITIES GROUP, INC.
(Exact
name of registrant as specified in its charter)
___________
New
York
(State
or other jurisdiction of incorporation)
0-14140
(Commission
File Number)
22-2655804
(IRS
Employer Identification No.)
12
East 49th Street,
31st
Floor
New
York, New York
(Address
of Principal Executive Offices)
10117
(Zip
Code)
(212) 273-7100
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
____________
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
1.01. Entry into a Material Definitive
Agreement.
Agreement and Plan of
Merger
Broadpoint
Securities Group, Inc. (the “Company”) and
Magnolia Advisory LLC (“Merger Sub”), a
wholly-owned subsidiary of the Company, entered into an Agreement and Plan of
Merger, dated as of March 2, 2009 (the “Merger Agreement”),
among the Company, Merger Sub, Gleacher Partners Inc., certain stockholders of
Gleacher Partners Inc. (the “Signing
Stockholders”) and each of the holders of interests in Gleacher Holdings
LLC other than Gleacher Partners Inc. (each such holder, a “Holder”, and together
with the Signing Stockholders, the “Selling Parties”),
providing for (i) the acquisition by Merger Sub of all the membership interests
in Gleacher Holdings LLC not owned by Gleacher Partners Inc. and (ii) the merger
of Gleacher Partners Inc. with and into Merger Sub, with Merger Sub as the
surviving company, in exchange for total consideration to the stockholders of
Gleacher Partners Inc. and the Holders of 23,000,000 shares of common stock of
the Company, par value $.01 per share (“Company Common
Stock”), and $20,000,000 in cash ($10 million of which will be paid at
closing with the remainder paid after five years, subject to acceleration in
certain circumstances), subject to adjustment as provided in the Merger
Agreement (the “Transaction”).
Pursuant
to the terms of the Merger Agreement, the Company agreed to appoint Eric
Gleacher to its Board of Directors and designate him Chairman of the Board of
Directors, effective at the time of the closing of the
Transaction. In connection therewith, the Company agreed to appoint
Mr. Gleacher to the class of directors with a term expiring in 2011 (Class I),
and also agreed that the Board of Directors of the Company would not take any
action to remove Eric Gleacher as a director for so long as he is employed under
his Employment Agreement (as defined below).
The
shares of Company Common Stock to be issued in the Transaction will be subject
to transfer restrictions and may not be sold or transferred until five years
after the closing of the Transaction, subject to acceleration under certain
circumstances.
The
Transaction is expected to close on or before June 30, 2009, subject to
receiving certain regulatory approvals, among other conditions. The
Merger Agreement may be terminated by either party if
the Transaction is not completed by September 30, 2009. The
Merger Agreement also contains customary indemnification provisions.
In
connection with the Transaction, the Company’s majority shareholder,
MatlinPatterson FA Acquisition LLC (“MatlinPatterson”),
executed a written consent (the “MP Consent”)
concurrent with the execution of the Merger Agreement. The MP Consent
approved two amendments, to become effective at the time of the closing of the
Transaction, to the Amended and Restated Certificate of Incorporation of the
Company. The amendments will (1) increase the number of authorized
shares of Company Common Stock to 200,000,000 and (2) change the name of the
Company to Broadpoint Gleacher Securities Group, Inc. The MP Consent
also approved the issuance of Company Common Stock pursuant to the
Transaction. (Such approval is required by Nasdaq rules because the
shares of Company Common Stock to be issued in the Transaction will exceed 20%
of the shares outstanding before the issuance.)
The
foregoing description of the terms of the Merger Agreement is not complete and
is qualified in its entirety by reference to the Merger Agreement, a copy of
which is attached as Exhibit 10.1 hereto and incorporated herein by
reference.
The
representations and warranties of each party set forth in the Merger Agreement
have been made solely for the benefit of the other parties to the Merger
Agreement. In addition, such representations and warranties (a) have been
qualified by confidential disclosures made to the other party in connection with
the Merger Agreement, (b) are subject to a materiality standard contained in the
Merger Agreement that may differ from what may be viewed as material by
investors, (c) were made only as of the date of the Merger Agreement or such
other date as is specified in the Merger Agreement, and (d) may have been
included in the Merger Agreement for the purpose of allocating risk among the
parties rather than establishing matters as facts. Accordingly, the
Merger Agreement is included with this filing only to provide investors with
information regarding the terms of the Merger Agreement, and not to provide
investors with any other factual information regarding the parties or their
respective businesses. The Merger Agreement should not be read alone,
but should instead be read in conjunction with the other information regarding
the companies and the Merger that will be contained in, or incorporated by
reference into, the information statement that the Company will be filing in
connection with the Merger, as well as in the Forms 10-K, Forms 10-Q and other
filings that the Company may make with the Securities and Exchange
Commission.
Employment Agreement and
Non-Competition and Non-Solicitation Agreement with Eric
Gleacher
In
connection with the Merger Agreement, the Company agreed to appoint Eric
Gleacher as Chairman of the Board and as a senior member of the Investment
Banking Division of Broadpoint Capital, Inc. (“BCI”), a wholly-owned
subsidiary of the Company, effective as of the closing of the Transaction. In
connection with such appointment, the Company, BCI, Gleacher Partners LLC
(“Partners”)
and Mr. Gleacher entered into an employment agreement, effective as of the
closing of the Transaction (the “Employment
Agreement”). During the period beginning on the date of the closing of
the Transaction and ending as of the date on which the Company determines that
Mr. Gleacher’s employment should be transferred to BCI, Mr. Gleacher also will
continue to serve as the Chief Executive Officer of Partners. The
Company will use its reasonable best efforts to combine BCI and Partners, or to
transfer the employment of all employees of Partners to BCI, by December 31,
2009.
The
Employment Agreement provides that Mr. Gleacher will be employed (initially by
Partners and then by BCI following the transfer of his employment) for a
three-year term commencing on the effective date of the Transaction,
automatically extended for one additional year upon the third anniversary of the
effective date without any affirmative action, unless either party to the
agreement provides at least six (6) months’ advance written notice to the
other party that the employment period will not be extended. Mr. Gleacher will
be entitled to receive an annual base salary of $350,000 and to participate in
the Investment Banking Division’s annual investment banking bonus
pool. Mr. Gleacher’s bonus for the fiscal year that begins prior to
the effective date of the Employment Agreement will be pro-rated to correspond
to the portion of the fiscal year that follows the effective date.
The
Employment Agreement provides that upon termination of employment, Mr. Gleacher
will be entitled to certain payments or benefits, the amount of which depends
upon the circumstances of termination. If Mr. Gleacher terminates employment
without “Good Reason” (as defined in the Employment Agreement), he will be
entitled to any unpaid base salary and unpaid benefits and any earned but unpaid
bonus and continued vesting in accordance with the schedules provided in the
award agreements of any equity compensation awards granted to him prior to
termination. In the event of his termination by the Company “Without Cause” (as
defined in the Employment Agreement) he will receive his base salary for twelve
months following termination; a prorated bonus for the fiscal year in which the
twelve-month base salary continuation period ends; continued health and welfare
coverage for twelve months following termination; any earned but unpaid bonus;
and, if he executes a settlement and release agreement, continued vesting in
accordance with the schedules provided in the award agreements of any equity
compensation awards granted to him prior to termination. If Mr. Gleacher
terminates employment for “Good Reason” (as defined in the Employment Agreement)
or if his employment is terminated following (and due to) the expiration of the
Employment Agreement, he will be entitled to any unpaid base salary and unpaid
benefits; any earned but unpaid bonus; a pro-rated bonus for the year in which
termination occurs; and continued vesting in accordance with the schedules
provided in the award agreements of any equity compensation awards granted to
him prior to termination. If Mr. Gleacher is terminated by the
Company for “Cause” (as defined in the Employment Agreement), he will be
entitled to any unpaid base salary and unpaid benefits and any earned but unpaid
bonus. Following the termination of Mr. Gleacher’s employment for any reason, he
must resign any and all officerships and directorships he then holds with the
Company, BCI and any of their affiliates. The Employment Agreement
provides that, in the event that Mr. Gleacher becomes subject to the excise tax
under Section 4999 of the Internal Revenue Code, he will be entitled to an
additional payment such that he will be placed in the same after-tax position as
if no such excise tax had been imposed.
In
connection with the Employment Agreement, the Company and Mr. Gleacher entered
into a Non-Competition and Non-Solicitation Agreement (the “Non-Competition and
Non-Solicitation Agreement”). The Non-Competition and
Non-Solicitation Agreement contains provisions regarding confidentiality,
non-solicitation and other restrictive covenants. The Employment Agreement
incorporates by reference the terms of the Non-Competition and Non-Solicitation
Agreement.
The
foregoing description of the terms of the Employment Agreement and the
Non-Competition and Non-Solicitation Agreement are not complete and are
qualified in their entirety by reference to the Employment Agreement, a copy of
which is attached as Exhibit 10.2 hereto and incorporated herein by
reference, and the Non-Competition and Non-Solicitation Agreement, a copy of
which is attached as Exhibit 10.3 hereto and incorporated herein by
reference.
Item
3.02. Unregistered Sales of Equity
Securities.
In
connection with, and as consideration for, the Transaction, the Company has
agreed to issue 23,000,000 shares of Company Common Stock (the “Stock
Issuance”). The Stock Issuance was agreed upon between the
Company and the Selling Parties in connection with the negotiation of the Merger
Agreement. The Stock Issuance will be made in a private
placement in reliance upon exemptions from registration pursuant to
Section 4(2) of the Securities Act and Regulation D promulgated
thereunder. Each Selling Party is an accredited investor as defined
in Rule 501 of Regulation D.
Item
9.01. Financial Statements and
Exhibits.
(d)
Exhibits
The following exhibit is furnished as
part of this Current Report on Form 8-K:
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10.1
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Agreement
and Plan of Merger, dated as of March 2, 2009, among Broadpoint Securities
Group, Inc., Magnolia Advisory LLC, Gleacher Partners Inc., certain
stockholders of Gleacher Partners Inc. and each of the holders of
interests in Gleacher Holdings LLC.
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10.2
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Employment
Agreement, dated as of March 2, 2009, among Broadpoint Securities Group,
Inc., Broadpoint Capital, Inc., Gleacher Partners LLC and Eric
Gleacher.
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10.2
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Non-Competition
and Non-Solicitation Agreement, dated as of March 2, 2009, between
Broadpoint Securities Group, Inc. and Eric
Gleacher.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BROADPOINT
SECURITIES GROUP, INC.
By: /s/ Robert
Turner
Robert
Turner
Chief
Financial Officer
Dated: March
4, 2009
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