SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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Amendment No. 3 to
Form 8-K
on
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) February 8, 2001
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LADENBURG THALMANN FINANCIAL SERVICES INC.
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(Exact Name of Registrant as Specified in Charter)
Florida 1-15799 65-0701248
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
590 Madison Avenue, New York, New York 10022
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (212) 409-2000
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N/A
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events
Purchase Agreement and Loan Agreement Adjustments
On August 31, 2001, pursuant to the terms of the adjustment provisions
contained in the previously reported Stock Purchase Agreement ("Purchase
Agreement"), dated February 8, 2001, as amended, among Ladenburg Thalmann
Financial Services Inc. ("Company"), New Valley Corporation ("New Valley"), New
Valley Capital Corporation (f/k/a Ladenburg, Thalmann Group Inc.) ("NVCC"),
Berliner Effektengesellschaft AG ("Berliner") and Ladenburg, Thalmann & Co. Inc.
("Ladenburg"), and the previously reported Loan Agreement ("Loan Agreement"),
dated as of February 8, 2001, as amended, between the Company and Frost-Nevada,
Limited Partnership ("Frost-Nevada"):
o the Company issued 4,034,462 additional shares of the
Company's common stock to NVCC and 1,002,319 additional shares
of the Company's common stock to Berliner;
o the conversion price of the senior convertible promissory
notes issued by the Company to NVCC and Berliner was decreased
from $2.60 to approximately $2.08; and
o the conversion price of the senior convertible promissory note
issued by the Company to Frost-Nevada was decreased from $2.00
to approximately $1.54.
As a result of the adjustment provisions of the Purchase Agreement and Loan
Agreement, the Company now has 42,025,211 shares of common stock outstanding and
New Valley, Berliner and Frost-Nevada now beneficially own approximately 57.6%,
13.0% and 16.3%, respectively, of the Company's common stock (including the
shares that may be acquired by New Valley and Frost-Nevada pursuant to the
Warrants discussed below).
Further Amendments to Purchase Agreement and Loan Agreement
On the same date, the Company entered into an Amendment No. 2 to the
Purchase Agreement ("Purchase Agreement Amendment") and an Amendment No. 2 to
the Loan Agreement ("Loan Agreement Amendment"). The amendments provide that the
Company may be required to issue an additional number of shares of common stock,
and the conversion price of the notes issued by the Company to NVCC, Berliner
and Frost-Nevada may be required to be decreased, on or about May 7, 2003
pending a final resolution of all pre-closing litigation adjustments.
Employment Agreement Amendments
On the same date, the Company entered into Second Amendments
("Employment Amendments") to the Employment Agreements, dated August 24, 1999,
as amended, with each of Richard J. Rosenstock, Mark Zeitchick, Vincent A.
Mangone and Joseph Berland. Pursuant to the Employment Amendments, effective
August 1, 2001:
o Mr. Rosenstock will (i) receive 0.25% of all retail and
institutional brokerage commissions generated from the brokers
in the offices of GBI Capital Partners Inc., the Company's
wholly owned subsidiary, located in Bethpage, New York and New
York, New York (Cortlandt Street) and (ii) be entitled to
participate in the Company's Special Performance Incentive
Plan ("Plan") (to the extent provided for in Mr. Rosenstock's
Employment Amendment) in exchange for Mr. Rosenstock
relinquishing his right to receive a $250,000 per year
guaranteed bonus and reducing his base salary by $160,000 per
year;
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o Messrs. Zeitchick's and Mangone's base salaries will be
reduced by $30,000 per year each and their aggregate
participation in the Plan will be reduced by an amount equal
to Mr. Rosenstock's participation in the Plan, as set forth in
each of their Employment Amendments; and
o Mr. Berland's base salary shall be reduced by $30,000 per
year.
Loans to the Company
On the same date, New Valley and Frost-Nevada each loaned ("Loans") the
Company $1,000,000. The Loans are evidenced by promissory notes (collectively,
the "Notes") that mature on the earlier of (i) February 28, 2002 and (ii) the
next business day after the Company receives its federal income tax refund for
the fiscal year ending September 30, 2001. The Notes bear interest at the Prime
Rate as published in the Wall Street Journal plus 1%. The Notes state that the
Company will not, so long as any amount under the Notes remains outstanding and
unpaid, incur or assume any indebtedness that is not subordinated in all
respects to the Notes without the prior written consent of the holder. As
consideration for the Loans, the Company issued to each of New Valley and
Frost-Nevada a five-year, immediately exercisable warrant (collectively, the
"Warrants") to purchase 100,000 shares of the Company's common stock at an
exercise price of $1.00 per share.
Investor Rights Agreement Amendment
On the same date, in connection with the Loans, the Company entered
into an amendment (the "IRA Amendment") to the previously reported Investor
Rights Agreement ("IRA"), dated as of February 8, 2001, among the Company, New
Valley, NVCC, Berliner, Frost-Nevada and The Principals (as such term is defined
in the IRA). The IRA originally required the Company to file, and have declared
effective, a registration statement (the "Registration Statement") covering
resales of certain shares of common stock on or before November 7, 2001. The IRA
Amendment removed this time limitation and requires the Company to file the
Registration Statement as soon as practicable following the date of the IRA
Amendment. Additionally, the Company agreed to include in the Registration
Statement the common stock issuable upon exercise of the Warrants.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits
(c) Exhibits
Exhibit
Number Description
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4.1 Amendment No. 2 to the Stock Purchase Agreement, dated February 8,
2001, as amended, by and among the Company, New Valley Corporation, New
Valley Capital Corporation, Berliner Effektengesellschaft AG and
Ladenburg, Thalmann & Co. Inc.
4.2 Form of Senior Convertible Promissory Note, as amended, issued to New
Valley Capital Corporation and Berliner Effektengesellschaft AG
4.3 Senior Convertible Promissory Note, as amended, issued to Frost-Nevada,
Limited Partnership
4.4 Form of Promissory Note issued to New Valley Corporation and
Frost-Nevada, Limited Partnership
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10.1 Amendment No. 2 to the Loan Agreement, dated as of February 8, 2001, as
amended, between the Company and Frost-Nevada, Limited Partnership
10.2 Second Amendment to the Employment Agreement, dated August 24, 1999, as
amended, among the Company, GBI Capital Partners Inc. and Richard J.
Rosenstock
10.3 Second Amendment to the Employment Agreement, dated August 24, 1999, as
amended, among the Company, GBI Capital Partners Inc. and Mark
Zeitchick
10.4 Second Amendment to the Employment Agreement, dated August 24, 1999, as
amended, among the Company, GBI Capital Partners Inc. and Vincent A.
Mangone
10.5 Second Amendment to the Employment Agreement, dated August 24, 1999, as
amended, among the Company, GBI Capital Partners Inc. and Joseph
Berland
10.6 Form of Warrant issued to New Valley Corporation and Frost-Nevada,
Limited Partnership
10.7 Letter Amendment to the Investor Rights Agreement, dated as of February
8, 2001, among the Company, New Valley Corporation, New Valley Capital
Corporation, Berliner Effektengesellschaft AG, Frost-Nevada, Limited
Partnership and The Principals
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: September 10, 2001 LADENBURG THALMANN FINANCIAL SERVICES INC.
By: /s/ J. Bryant Kirkland III
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J. Bryant Kirkland III
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
Number Description
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4.1 Amendment No. 2 to the Stock Purchase Agreement, dated February 8,
2001, as amended, by and among the Company, New Valley Corporation, New
Valley Capital Corporation, Berliner Effektengesellschaft AG and
Ladenburg, Thalmann & Co. Inc.
4.2 Form of Senior Convertible Promissory Note, as amended, issued to New
Valley Capital Corporation and Berliner Effektengesellschaft AG
4.3 Senior Convertible Promissory Note, as amended, issued to Frost-Nevada,
Limited Partnership
4.4 Form of Promissory Note issued to New Valley Corporation and
Frost-Nevada, Limited Partnership
10.1 Amendment No. 2 to the Loan Agreement, dated as of February 8, 2001, as
amended, between the Company and Frost-Nevada, Limited Partnership
10.2 Second Amendment to the Employment Agreement, dated August 24, 1999, as
amended, among the Company, GBI Capital Partners Inc. and Richard J.
Rosenstock
10.3 Second Amendment to the Employment Agreement, dated August 24, 1999, as
amended, among the Company, GBI Capital Partners Inc. and Mark
Zeitchick
10.4 Second Amendment to the Employment Agreement, dated August 24, 1999, as
amended, among the Company, GBI Capital Partners Inc. and Vincent A.
Mangone
10.5 Second Amendment to the Employment Agreement, dated August 24, 1999, as
amended, among the Company, GBI Capital Partners Inc. and Joseph
Berland
10.6 Form of Warrant issued to New Valley Corporation and Frost-Nevada,
Limited Partnership
10.7 Letter Amendment to the Investor Rights Agreement, dated as of February
8, 2001, among the Company, New Valley Corporation, New Valley Capital
Corporation, Berliner Effektengesellschaft AG, Frost-Nevada, Limited
Partnership and The Principals
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