<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 6, 1998
REGISTRATION NO. 333-51653
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
AMENDMENT NO. 6 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
KNIGHT/TRIMARK GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------
DELAWARE 6211 52-2096335
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION INDUSTRIAL CLASSIFICATION DENTIFICATION NUMBER)
OFINCORPORATION OR CODE NUMBER)
ORGANIZATION)
NEWPORT TOWER, 29TH FLOOR
525 WASHINGTON BOULEVARD
JERSEY CITY, NEW JERSEY 07310
(201) 222-9400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
---------------
MICHAEL T. DORSEY, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
KNIGHT/TRIMARK GROUP, INC.
NEWPORT TOWER, 29TH FLOOR
525 WASHINGTON BOULEVARD
JERSEY CITY, NEW JERSEY 07310
(201) 222-9400
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
---------------
COPIES TO:
MATTHEW J. MALLOW, ESQ. ALEXANDER D. LYNCH, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP BABAK YAGHMAIE, ESQ.
919 THIRD AVENUE BROBECK, PHLEGER & HARRISON LLP
NEW YORK, NEW YORK 10022 1633 BROADWAY, 47TH FLOOR
(212) 735-3000 NEW YORK, NEW YORK 10019
(212) 581-1600
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
If delivery of the prospectus is expected to be made pursuant to rule 434,
please check the following box. [_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses of the offering are estimated to be as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee........... $ 54,280
NASD filing fee............................................... 18,900
NASDAQ listing fee............................................ 90,000
Legal fees and expenses....................................... 400,000
Accounting fees and expenses.................................. 400,000
Blue Sky fees and expenses (including legal fees)............. 10,000
Printing expenses............................................. 200,000
Transfer Agent fees........................................... 25,000
Miscellaneous................................................. 301,820
----------
TOTAL....................................................... $1,500,000
==========
</TABLE>
--------
* To be provided by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company, a Delaware corporation, is empowered by Section 145 of the
Delaware General Corporation Law (the "DGCL"), subject to the procedures and
limitations stated therein, to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding by reason of the fact that such person is or was a
director, officer, employee or agent of the Company, or is or was serving at
the request of the Company as a director, officer, employee or agent of
another corporation or other enterprise, against reasonable expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually incurred by him in connection with such action, suit or proceeding,
if such director, officer, employee or agent acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Company is required
by Section 145 to indemnify any person against reasonable expenses (including
attorneys' fees) actually incurred by him in connection with an action, suit
or proceeding in which he is a party because he is or was a director, officer,
employee or agent of the Company or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation or
other enterprise, if he has been successful, on the merits or otherwise, in
the defense of the action, suit or proceeding. Section 145 also allows a
corporation to purchase and maintain insurance on behalf of any such person
against any liability asserted against him in any such capacity, or arising
out of his status as such, whether or not the corporation would have the power
to indemnify him against such liability under the provisions of Section 145.
In addition, Section 145 provides that indemnification pursuant to its
provisions is not exclusive of other rights of indemnification to which a
person may be entitled under any bylaw, agreement, vote of shareholders or
disinterested directors, or otherwise.
Article 7 of the Company's Certificate of Incorporation (the "Charter")
provides that the Company shall indemnify and hold harmless any person who
was, is, or is threatened to be made a party to a proceeding by reason of the
fact that he or she (i) is or was a director or officer of the Company or (ii)
while a director or officer of the Company, is or was serving at the request
of the Company as a director, officer, partner, venturer, proprietor, trustee,
employee, agent, or similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan, or other enterprise, to the fullest extent permitted under the
DGCL. The right to indemnification under Article 7 of the Charter is a
contract right which includes, with respect to directors and officers, the
right to be paid by the Company the expenses incurred in defending any such
proceeding in advance of its disposition.
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
On March 27, 1995, Roundtable Partners, L.L.C. (the "LLC") sold an aggregate
of 304,407 common units of the LLC ("Common Units") to 22 investors, at a
price of $10 per unit, for an aggregate purchase price of $3,044,070. The LLC
also sold an aggregate of 1,095,864 Series A preferred units of the LLC
("Series A Preferred Units") to 18 investors, at a price of $10 per unit, for
an aggregate purchase price of $10,958,640. In addition, on such date, the LLC
sold an aggregate of 1,500,000 Series B preferred units of the LLC to Trimark
Securities, Inc., at a price of $10 per unit, for an aggregate purchase price
of $15,000,000.
On June 28, 1995, the LLC sold an aggregate of 23,331 Common Units to 5
investors, at a price of $10 per unit, for an aggregate purchase price of
$233,310. The LLC also sold an aggregate of 83,992 Series A Preferred Units to
a single investor, at a price of $10 per unit, for an aggregate purchase price
of $839,920.
On July 26, 1995, the LLC sold an aggregate of 33,574 Common Units to 8
investors, at a price of $10 per unit, for an aggregate purchase price of
$335,740. The LLC also sold an aggregate of 120,866 Series A Preferred Units
to 4 investors, at a price of $10 per unit, for an aggregate purchase price of
$1,208,660.
On October 25, 1995, the LLC sold an aggregate of 7,167 Common Units to 6
investors, at a price of $10 per unit, for an aggregate purchase price of
$71,670. The LLC also sold an aggregate of 25,800 Series A Preferred Units to
2 investors, at a price of $10 per unit, for an aggregate purchase price of
$258,000.
On November 29, 1995, the LLC sold an aggregate of 1,190 Common Units, at a
price of $10 per unit, for an aggregate purchase price of $11,900. The LLC
also sold an aggregate of 4,284 Series A Preferred Units, at a price of $10
per unit, for an aggregate purchase price of $42,840.
On December 27 1995, the LLC sold an aggregate of 2,979 Common Units to 6
investors, at a purchase price of $10 per unit, for an aggregate purchase
price of $29,790. The LLC also sold an aggregate of 10,724 Series A Preferred
Units to 2 investors, at a price of $10 per unit, for an aggregate purchase
price of $107,240.
On January 1, 1996, the LLC sold an aggregate of 120,849 Common Units to 5
investors, at a price of $10 per unit, for an aggregate purchase price of
$1,208,490. The LLC also sold an aggregate of 435,056 Series A Preferred Units
to a single investor, at a price of $10 per unit, for an aggregate purchase
price of $4,350,560.
On January 24, 1996, the LLC sold an aggregate of 1,699 Common Units to 5
investors, at a price of $10 per unit, for an aggregate purchase price of
$16,990. The LLC also sold an aggregate of 6,116 Series A Preferred Units to a
single investor, at a price of $10 per unit, for an aggregate purchase price
of $61,160.
On February 21, 1996, the LLC sold an aggregate of 1,783 Common Units to 5
investors, at a price of $10 per unit, for an aggregate purchase price of
$17,830. The LLC also sold an aggregate of 6,418 Series A Preferred Units to a
single investor, at a price of $10 per unit, for an aggregate purchase price
of $64,180.
On March 27, 1996, the LLC sold an aggregate of 1,190 Common Units to 6
investors, at a price of $10 per unit, for an aggregate purchase price of
$11,900. The LLC sold an aggregate of 4,284 Series A Preferred Units to 2
investors, at a price of $10 per unit, for an aggregate purchase price of
$42,840.
On April 24, 1996, the LLC sold an aggregate of 4,189 Common Units to 5
investors, at a price of $10 per unit, for an aggregate purchase price of
$41,890. The LLC also sold an aggregate of 15,080 Series A Preferred Units to
a single investor, at a price of $10 per unit, for an aggregate purchase price
of $150,800.
On May 29, 1996, the LLC sold an aggregate of 60,160 Common Units to 7
investors, at a price of $10 per unit, for an aggregate purchase price of
$601,600. The LLC also sold an aggregate of 216,575 Series A Preferred Units
to 3 investors, at a price of $10 per unit, for an aggregate purchase price of
$2,165,750.
On June 26, 1996, the LLC sold an aggregate of 29,809 Common Units to 10
investors, at a price of $10 per unit, for an aggregate purchase price of
$298,090. The LLC also sold an aggregate of 107,312 Series A Preferred Units
to 6 investors, at a price of $10 per unit, for an aggregate purchase price of
$1,073,120.
On July 24, 1996, the LLC sold an aggregate of 12,001 Common Units to 7
investors, at a price of $10 per unit, for an aggregate purchase price of
$120,010. The LLC also sold an aggregate of 43,203 Series A Preferred Units to
3 investors, at a price of $10 per unit, for an aggregate purchase price of
$432,030.
II-2
<PAGE>
On October 1, 1996, the LLC sold an aggregate of 133,769 Common Units to 12
investors, at a price of $10 per unit, for an aggregate purchase price of
$1,337,690. The LLC also sold an aggregate of 481,568 Series A Preferred Units
to 8 investors, at a price of $10 per unit, for an aggregate purchase price of
$4,815,680.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits+:
<TABLE>
<C> <S>
+1.1 Form of Underwriting Agreement.
+3.1 Form of Amended and Restated Certificate of Incorporation of the
Registrant.
+3.2 Form of Amended and Restated By-laws of the Registrant.
+4.1 Specimen Common Stock certificate.
+4.2 Form of Registration Rights Agreement.
+5.1 Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
++10.1 Clearing Agreement between Knight Securities, L.P. and Correspondent
Services Corporation, dated April 23, 1997.
++10.2 Clearing Agreement between Trimark Securities, L.P. and National
Investor Service Corporation, dated June 29, 1997.
+10.3 Lease Agreement between Newport L.P.-I, Inc. and Knight Securities,
L.P. dated December 6, 1994 (the "Knight Lease Agreement") for
office space situated in Newport Office Tower, 525 Washington
Boulevard, Jersey City, New Jersey 07310.
+10.4 Amendment to the Knight Lease Agreement, dated May 28, 1996.
+10.5 Second Amendment to the Knight Lease Agreement, dated September 30,
1997.
+10.6 Third Amendment to the Knight Lease Agreement, dated March 18, 1998.
+10.7 Lease Agreement between Nestle USA, Inc. and Trimark Securities
L.P., dated March 20, 1996, for the office space situated at 100
Manhattanville Road, Purchase, New York 10577.
+10.8 License Agreement between Automated Securities Clearance, Ltd. and
Knight Securities, L.P., dated April 5th, 1995.
+10.9 Master Program Product License Agreement between TCAM Systems, Inc.
and Trimark Securities, Inc. dated May 1, 1990.
+10.10 Form of Employment Agreement between the Registrant and Kenneth
Pasternak.
+10.11 Form of Employment Agreement between the Registrant and Walter
Raquet.
+10.12 Form of Employment Agreement between the Registrant and Steven
Steinman.
+10.13 Form of Employment Agreement between the Registrant and Robert
Lazarowitz.
+10.14 Form of Employment Agreement between the Registrant and Anthony
Sanfilippo.
+10.15 Form of Registrant's 1998 Stock Option and Award Plan.
+10.16 Form of Registrant's 1998 Nonemployee Director Stock Option Plan.
+10.17 Form of Registrant's Management Incentive Performance Plan.
+10.18 Loan Agreement between PaineWebber Capital Inc. and Roundtable
Partners, L.L.C. dated June 19, 1998.
*10.19 Form of Contribution Agreement.
+21.1 Subsidiaries of the Registrant.
*23.1 Consent of Price Waterhouse LLP.
+23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (contained in
Exhibit 5.1 hereto).
+24.1 Powers of Attorney.
+27 Financial Data Schedule.
</TABLE>
- --------
* Filed herewith.
+ Previously filed.
++ Confidential treatment has been requested for portions of this exhibit. The
copy previously filed omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this
exhibit has been filed separately with the Securities and Exchange
Commission.
II- 3
<PAGE>
(b) Consolidated Financial Statement Schedules
All schedules are omitted because the required information is inapplicable
or the information is presented in the Consolidated Financial Statements or
related notes.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes to provide to the underwriters
at the closing specified in the underwriting agreement certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN JERSEY CITY, STATE OF
NEW JERSEY, ON THE 6TH DAY OF JULY, 1998.
Knight/Trimark Group, Inc.
/s/ Walter F. Raquet
By: _________________________________
WALTER F. RAQUET
Director and
Executive Vice President
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
--------- ----- ----
* Director, President June 24, 1998
- ------------------------------------- and Chief Executive
(KENNETH D. PASTERNAK) Officer
* Director, President
- ------------------------------------- and Chief Executive July 6, 1998
(KENNETH D. PASTERNAK) Officer
* Director, Executive
- ------------------------------------- Vice President and July 6, 1998
(ROBERT I. TURNER) Chief Financial
Officer (principal
financial and
accounting officer)
* Director and
- ------------------------------------- Chairman of the July 6, 1998
(STEVEN L. STEINMAN) Board
* Director and
- ------------------------------------- Executive Vice July 6, 1998
(WALTER F. RAQUET) President
* Director and
- ------------------------------------- Executive Vice July 6, 1998
(ROBERT M. LAZAROWITZ) President
II-5
<PAGE>
SIGNATURE TITLE DATE
--------- ----- ----
* Director and
- ------------------------------------ Executive Vice July 6, 1998
(ANTHONY M. SANFILIPPO) President
* Director
- ------------------------------------ July 6, 1998
(MARTIN AVERBUCH)
* Director
- ------------------------------------ July 6, 1998
(CHARLES V. DOHERTY)
* Director
- ------------------------------------ July 6, 1998
(GENE L. FINN)
* Director
- ------------------------------------ July 6, 1998
(GARY R. GRIFFITH)
* Director
- ------------------------------------ July 6, 1998
(BRUCE R. MCMAKEN)
Director
- ------------------------------------ July 6, 1998
(J. JOE RICKETTS)
* Director
- ------------------------------------ July 6, 1998
(RODGER O. RINEY)
Director July 6, 1998
- ------------------------------------
(V. ERIC ROACH)
Director July 6, 1998
- ------------------------------------
(CHARLES A. ZABATTA)
/s/ Walter F. Raquet
*By: _______________________________
ATTORNEY IN FACT
II-6
<PAGE>
INDEX TO EXHIBITS+
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
+1.1 Form of Underwriting Agreement.
+3.1 Form of Amended and Restated Certificate of Incorporation of
the Registrant.
+3.2 Form of Amended and Restated By-laws of the Registrant.
+4.1 Specimen Common Stock certificate.
+4.2 Form of Registration Rights Agreement.
+5.1 Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP.
++10.1 Clearing Agreement between Knight Securities, L.P. and
Correspondent Services Corporation, dated April 23, 1997.
++10.2 Clearing Agreement between Trimark Securities, L.P. and
National Investor Service Corporation, dated June 29, 1997.
+10.3 Lease Agreement between Newport L.P.-I, Inc. and Knight
Securities, L.P. dated December 6, 1994 (the "Knight Lease
Agreement") for office space situated in Newport Office Tower,
525 Washington Boulevard, Jersey City, New Jersey 07310.
+10.4 Amendment to the Knight Lease Agreement, dated May 28, 1996.
+10.5 Second Amendment to the Knight Lease Agreement, dated September
30, 1997.
+10.6 Third Amendment to the Knight Lease Agreement, dated March 18,
1998.
+10.7 Lease Agreement between Nestle USA, Inc. and Trimark Securities
L.P., dated March 20, 1996, for the office space situated at
100 Manhattanville Road, Purchase, New York 10577.
+10.8 License Agreement between Automated Securities Clearance Ltd.
and Knight Securities, L.P., dated April 5th, 1995.
+10.9 Master Program Product License Agreement between TCAM Systems,
Inc. and Trimark Securities, Inc. dated May 1, 1990.
+10.10 Form of Employment Agreement between the Registrant and Kenneth
Pasternak.
+10.11 Form of Employment Agreement between the Registrant and Walter
Raquet.
+10.12 Form of Employment Agreement between the Registrant and Steven
Steinman.
+10.13 Form of Employment Agreement between the Registrant and Robert
Lazarowitz.
+10.14 Form of Employment Agreement between the Registrant and Anthony
Sanfilippo.
+10.15 Form of Registrant's 1998 Long Term Incentive Plan.
+10.16 Form of Registrant's 1998 Nonemployee Director Stock Option
Plan.
+10.17 Form of Registrant's Management Incentive Performance Plan.
+10.18 Loan Agreement between PaineWebber Capital Inc. and Roundtable
Partners, L.L.C. dated June 19, 1998.
*10.19 Form of Contribution Agreement.
+21.1 Subsidiaries of the Registrant.
*23.1 Consent of Price Waterhouse LLP.
+23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (contained
in Exhibit 5.1 hereto).
+24.1 Powers of Attorney.
+27. Financial Data Schedule.
</TABLE>
- --------
* Filed herewith.
+ Previously filed.
++ Confidential treatment has been requested for portions of this exhibit. The
copy previously filed omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this
exhibit has been filed separately with the Securities and Exchange
Commission.
<PAGE>
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of April __, 1998 (this
"Agreement"), is made and entered into by and among Roundtable Partners, L.L.C.,
a Delaware limited liability company (the "LLC"), Knight/Trimark Group, Inc., a
Delaware corporation (the "Corporation") and each Contributing Member of the LLC
that executes a counterpart signature page hereto (each, a "Contributing
Member").
WHEREAS, the Contributing Members have determined to transfer their
membership interest in the LLC to the Corporation, as a capital contribution,
and to cause the Corporation to offer shares of its common stock ("Common
Stock") to the public pursuant to an Initial Public Offering (as defined below).
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:
1. Defined Terms.
-------------
As used in this Agreement, the following terms shall have the meanings
set forth below. Capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the LLC Agreement.
"Election Letter" shall mean the letter from the LLC to Contributing
---------------
Members, dated April __, 1998, including the attachments thereto,
describing the transactions contemplated pursuant to the Agreement and
providing Contributing Members with a form of election to receive from
Newco shares of Common Stock (described in Section 7(a) hereof) with
respect to all or a portion of such Contributing Member's Undistributed
Profits.
"Initial Public Offering" shall mean the sale by the Corporation in a
-----------------------
bona fide public offering on a firm commitment underwritten basis pursuant
to a registration statement filed and declared effective by the Securities
and Exchange Commission pursuant to the Securities Act of 1933, of shares
of Common Stock of the Corporation.
"LLC Agreement" shall mean the Limited Liability Company Agreement of
-------------
Roundtable Partners, L.L.C. (as amended and in effect from time to time).
<PAGE>
"Percentage Interest" shall mean, for any Contributing Member, the
-------------------
percentage interest (expressed as a decimal to five decimal places) set
forth opposite such Contributing Member's name in Column 4 of Schedule I
attached hereto.
"Pre-IPO Outstanding Amount" shall mean the aggregate number of shares
--------------------------
of Common Stock that will be issued and outstanding immediately following
the closing of the Initial Public Offering, as disclosed in the definitive
prospectus relating thereto, including shares issued to Brown & Co. upon
conversion of its subordinated promissory note and excluding (i) shares
issued pursuant to the Initial Public Offering, including any shares issued
to cover the Underwriters' exercise of their overallotment option and (ii)
shares issued by the Corporation pursuant to Section 2(b)(2) hereof.
"Undistributed Profits" shall mean, with respect to any Contributing
---------------------
Member as of March 31, 1998, (x) the aggregate amount of Company Net
Income, Knight Net Income and Trimark Net Income allocated to such
Contributing Member, minus (y) the aggregate amount of Company Net Loss,
-----
Knight Net Loss and Trimark Net Loss allocated to such Contributing Member
minus (z) the aggregate amount of cash or other property previously
-----
distributed to such Contributing Member, in each case in respect of such
Contributing Member's Common Interest in the LLC and pursuant to the terms
of the LLC Agreement in effect from time to time.
2. Contribution of Common Units; Issuance of Initial Shares.
--------------------------------------------------------
At the Closing, in reliance upon the representations and warranties
set forth herein, and upon the terms and conditions set forth herein:
(a) each Contributing Member shall transfer, assign and deliver to the
Corporation, as a contribution to capital, all right, title and interest of such
Contributing Member in and to the Common Units of the LLC; and
(b) the Corporation shall issue to such Contributing Member the number
of shares of Common Stock equal to (1) the Percentage Interest of such
Contributing Member multiplied by the Pre-IPO Outstanding Amount and (2) the
quotient resulting from the division of (A) the portion of such Contributing
Member's Undistributed Profits which such Contributing Member elects to have
exchanged for Common Stock pursuant to such Contributing Member's election on
the election form
2
<PAGE>
attached to the Election Letter, by (B) the Initial Public Offering price. The
Corporation shall authorize the issuance of two classes of Common Stock with
identical rights, except that one class will be non-voting. Contributing
Members may, upon request, receive shares of non-voting Common Stock in
satisfaction of their rights hereunder; and
(c) the LLC shall be dissolved in accordance with Section 12.1(d) of
the LLC Agreement.
3. Closing.
-------
(a) The Closing will take place concurrently with the closing of the
Initial Public Offering.
(b) At the Closing, (i) each Contributing Member will deliver to the
Corporation an instrument of transfer sufficient to effect the contribution of
all of such Contributing Member's interest in the LLC to the Corporation; and
(ii) the Corporation shall deliver to such Contributing Member stock
certificates representing the appropriate number of shares of Common Stock,
determined in the manner set forth in Section 2(b) hereof, registered in the
name of such Contributing Member, and cash in lieu of fractional shares of
Common Stock.
4. Conditions to Closing.
---------------------
The obligations of the parties under this Agreement shall be subject
to the following conditions:
(a) The closing of the Initial Public Offering shall occur
concurrently with the Closing.
(b) The Undistributed Profits of each Contributing Member accrued
through March 31, 1998, shall have been distributed by the LLC to such
Contributing Member to the extent and in the manner described in Section 7(a)
hereof.
5. Representations and Warranties of the Corporation.
-------------------------------------------------
The Corporation hereby represents and warrants to the Contributing
Members, on the date hereof and on and as of the Closing Date, as follows:
3
<PAGE>
(a) Organization and Standing. The Corporation (i) is a corporation
-------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware; (ii) has all requisite corporate power and authority to own,
lease or otherwise hold its properties and to carry on its business as
contemplated; and (iii) is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where it is required by the nature
of its business to be so qualified.
(b) Authority. The Corporation has all requisite corporate power and
---------
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by the Corporation of this
Agreement and the consummation by the Corporation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of the Corporation. This Agreement has been duly executed and
delivered by the Corporation and constitutes a legal, valid and binding
obligation of the Corporation, enforceable against the Corporation in accordance
with its terms. The execution and delivery by the Corporation of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
conflict with, result in any violation of or default (with or without notice or
lapse of time or both) under, give rise to a right of termination, cancellation
or acceleration of any material obligation or to the loss of any material
benefit under or result in or require the creation, imposition or extension of
any lien upon any of the properties or assets of the Corporation under (i) any
material contract, (ii) any provision of the Certificate of Incorporation or By-
laws of the Corporation or (iii) any applicable law.
(c) Capitalization of the Corporation. No shares of Common Stock of
---------------------------------
the Corporation are issued or outstanding. The issuance of the Common Stock in
connection with this Agreement has been duly authorized, and the Common Stock,
when issued and delivered pursuant to this Agreement, will be validly issued,
fully paid and nonassessable and will not have been issued in violation of, and
will not be subject to, any preemptive or subscription rights.
(d) Prior Business. Except for the execution of this Agreement, the
--------------
consummation of the transactions contemplated hereby and other transactions
related thereto and matters preparatory thereto, the Corporation has not since
its date of incorporation carried on any business or other activities of any
kind whatsoever. The Corporation does not have any subsidiaries or, directly or
indirectly, own any capital stock or other equity interests in any corporation,
partnership or other entity, and the Corporation is not a member of or
participant in any partnership, joint venture or similar entity.
4
<PAGE>
(e) Brokers or Finders. No person is or will be entitled to any
------------------
broker's or finder's fee or any other commission or similar fee from the
Corporation in connection with any of the transactions contemplated hereby
(other than underwriting discounts and commissions to be paid in connection with
the Initial Public Offering).
6. Representations and Warranties of the Contributing Members.
----------------------------------------------------------
Each Contributing Member hereby represents and warrants to the LLC and
the Corporation, on the date hereof and on and as of the Closing Date, as
follows:
(a) Authority. The Contributing Member has all requisite corporate
---------
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery by the
Contributing Member of this Agreement and the consummation by the Contributing
Member of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Contributing Member. This
Agreement has been duly executed and delivered by the Contributing Member and
constitutes a legal, valid and binding obligation of the Contributing Member,
enforceable against the Contributing Member in accordance with its terms. The
execution and delivery by the Contributing Member of this Agreement does, and
the consummation of the transactions contemplated hereby will not, conflict
with, result in any violation of or default (with or without notice or lapse of
time or both) under, give rise to a right of termination, cancellation or
acceleration of any material obligation or to the loss of any material benefit
under or result in or require the creation, imposition or extension of any lien
upon any of the properties or assets of the Contributing Member under (i) any
material contract, (ii) any provision of the charter or bylaws of the
Contributing Member or (iii) any applicable law.
(b) Title to Common Units. Such Contributing Member has, and upon
---------------------
consummation of the contribution contemplated by Section 2 hereof, the
Corporation will acquire, good, valid and marketable title to the Common Units
contributed by such Contributing Member to the Corporation, free and clear of
all liens or encumbrances.
(c) Acquisition for Investment. Such Contributing Member is acquiring
--------------------------
the shares of Common Stock being acquired by such Contributing Member for his or
her own account for the purpose of investment and not with a view to or for sale
in connection with any distribution thereof, and such Contributing Member has no
present intention or plan to effect any distribution thereof or otherwise
dispose of any shares of Common Stock received pursuant to Section 2(b) hereof.
Each Contributing
5
<PAGE>
Member acknowledges that such shares of Common Stock have not been registered
under the Securities Act of 1933, as amended, and may be sold or disposed of in
the absence of such registration only pursuant to an exemption from such
registration and in accordance with this Agreement.
(d) Accredited Investor. The Contributing Member (i) is an
-------------------
"accredited investor" within the meaning of Rule 501 promulgated under the
Securities Act, (ii) has received all the information it considers necessary or
appropriate for deciding whether to acquire the shares of Common Stock, (iii)
has had an opportunity to ask questions and receive answers from the Corporation
regarding the terms and conditions of this Agreement and the business,
properties, prospects and financial condition of the Corporation, (iv) is able
to fend for itself and can bear the economic risk of an investment in the shares
of Common Stock, and (v) has such knowledge and experience in financial or
business matters that it is capable of evaluating the merits and risks of an
investment in the Common Stock.
(e) Brokers or Finders. No person is or will be entitled to any
------------------
broker's or finder's fee or any other commission or similar fee from the
Contributing Member in connection with any of the transactions contemplated
hereby.
7. Distribution of Undistributed Profits.
-------------------------------------
(a) At least seven days prior to the first offer of the Common Stock
under the Initial Public Offering registration statement, the LLC shall
distribute to each Contributing Member who has not elected to receive Common
Stock with respect to all of such Contributing Member's Undistributed Profits
pursuant to the election form attached to the Election Letter an amount of cash
equal to the portion of such Member's Undistributed Profits which such Member
has not elected to exchange for Common Stock.
(b) In the event that the Closing shall not have occurred on or prior
to September 30, 1998, each of the Contributing Members hereby provides its
consent, pursuant to Section 13.3 of the LLC Agreement, for the amendment of the
relevant sections of the LLC Agreement to provide for priority cash
distributions to those Contributing Members who did not receive cash
distributions of all of their Undistributed Profits from the LLC pursuant to
Section 7(a), in a manner to be reasonably determined by the Advisory Committee.
6
<PAGE>
(c) Any cash distributed by the LLC to a Contributing Member in
accordance with this Agreement shall result in a reduction of such Contributing
Member's share of Undistributed Profits.
8. Waiver of Registration Rights.
-----------------------------
Each Contributing Member hereby waives any registration rights to
which such Contributing Member is entitled pursuant to Section 3.7 and Schedule
3.7 of the LLC Agreement in connection with the Initial Public Offering. All
Contributing Members will receive registration rights in connection with all of
the Common Stock they receive pursuant to this Agreement, pursuant to the terms
of a registration rights agreement substantially in the form of Exhibit A
hereto.
9. Holdback Agreement.
------------------
Each Contributing Member agrees, if so requested in writing by the
Corporation, not to effect any public sale or distribution, including any
private placement or any sale pursuant to Rule 144, or any successor provision,
under the Securities Act, of any equity security of the Corporation or of any
security convertible into or exchangeable or exercisable for any equity security
of the Corporation (in each case, other than as part of such underwritten
offering) during the seven days prior to, and during the 180 day period which
begins on, the effective date of the registration statement relating to the
Initial Public Offering.
10. Legends.
-------
Each certificate evidencing the shares of Common Stock of the
Corporation issued to any Contributing Member pursuant to this Agreement shall,
at the time of issuance, bear a legend substantially in the following form:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS AND
MAY NOT BE SOLD OR OFFERED FOR SALE EXCEPT IN
COMPLIANCE WITH SUCH ACT AND LAWS.
7
<PAGE>
11. Termination.
-----------
If the Closing shall not have occurred on or prior to September 30,
1998, this Agreement and all obligations of the parties hereunder, except
obligations under Sections 7(b) and 12(g), shall terminate, unless extended by
mutual agreement of the parties. The LLC may, without liability to any
Contributing Member, terminate this Agreement, and all obligations of the
parties hereunder, except obligations under Sections 7(b) and 12(g), shall
terminate, if the Advisory Committee of the LLC determines not to consummate the
IPO.
12. Miscellaneous.
-------------
(a) Entire Agreement. This Agreement contains the entire
----------------
understanding of the parties with respect to the transactions contemplated
hereby.
(b) Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more of the counterparts have been signed by
each party and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
(c) Cooperation. The parties agree to take, or cause to be taken, any
-----------
and all further actions and to execute any and all additional documents, as
shall reasonably be necessary to make effective and consummate the transactions
contemplated by this Agreement.
(d) Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the laws of the State of New York.
(e) Signatures. This Agreement shall be effective upon delivery of
----------
original signature pages or facsimile copies thereof executed by each of the
parties hereto.
(f) Publicity. No public release, announcement or other form of
---------
publicity concerning the Initial Public Offering shall be issued without the
prior written consent of the LLC.
(g) Expenses. Whether or not the Initial Public Offering or any of
--------
the transactions contemplated by this Agreement are consummated, all costs and
8
<PAGE>
expenses incurred in connection with this Agreement shall be paid by the party
incurring such cost or expense.
(h) Assignment. No Contributing Member shall assign this Agreement or
----------
any of its rights hereunder without the prior written consent of the LLC.
9
<PAGE>
IN WITNESS WHEREOF, the LLC, the Corporation and each Contributing
Member executing a counterpart signature page hereto have caused this Agreement
to be executed and delivered by their respective officers thereunto duly
authorized.
THE LLC: ROUNDTABLE PARTNERS, L.L.C.
By:
-------------------------------------
Name:
Title:
THE CORPORATION: KNIGHT/TRIMARK GROUP, INC.
By:
-------------------------------------
Name:
Title:
10
<PAGE>
Schedule I
----------
<TABLE>
<CAPTION>
Column 1 Column 2 Column 3 Column 4
- --------------------------------------------------------------------------------
Name of Preliminary Percentage Percentage
------- ----------- ---------- ----------
Contributing Member Percentage Dilution giving Interest (1)
------------------- ---------- --------------- ------------
Interest effect to Brown
-------- ---------------
& Co. conversion
----------------
of its Subordinated
-------------------
Promissory Note
---------------
<S> <C> <C> <C>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
</TABLE>
(1) Does not give effect to the issuance of Common Stock in exchange for
Undistributed Profits pursuant to Section 2(b) of the Agreement.
11
<PAGE>
COUNTERPART SIGNATURE PAGE TO
CONTRIBUTION AGREEMENT
The undersigned hereby acknowledges receipt of the Contribution Agreement,
dated as of April 17, 1998 (the "Contribution Agreement"), by and among
Roundtable Partners, L.L.C. (The "LLC"), Knight/Trimark Securities Group, Inc.
(the "Corporation"), and each Contributing Member executing a Counterpart
Signature Page thereto. From and after the undersigned's execution and delivery
of this Counterpart Signature Page and the acceptance hereof by the LLC and the
Corporation, the undersigned shall be a party to the Contribution Agreement and
shall be deemed a "Contributing Member" for all purposes thereunder.
Each Contributing Member hereby irrevocably makes, constitutes and appoints
Kenneth D. Pasternak and Walter Raquet, or either of them, the true and lawful
representative and attorney-in-fact of such Contributing Member, with full power
of substitution, to act in the name, place and stead of such Contributing
Member, with the power from time to time to execute and delivery any document or
instrument necessary to transfer, assign and deliver to the Corporation the
Common Units owned by such Contributing Member at the Closing or otherwise to
consummate the transactions contemplated by the Contribution Agreement.
----------------------------------------
Printed Name of Contributing Member
----------------------------------------
Signature of Contributing Member
By:
-------------------------------------
Title:
----------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
12
<PAGE>
Date:
-----------------------------------
13
<PAGE>
Agreed and Accepted
ROUNDTABLE PARTNERS, L.L.C.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
KNIGHT/TRIMARK GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Date:
----------------------------------
14
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in this Amendment No. 6 to the Prospectus
constituting part of this Registration Statement on Form S-1 of our report
dated February 10, 1998, except as to Note 15, which is as of April 15, 1998,
relating to the consolidated financial statements of Roundtable Partners
L.L.C., which appears in such Prospectus. We also consent to the references to
us under the heading "Experts" in such Prospectus.
PRICEWATERHOUSECOOPERS LLP
New York, New York
July 6, 1998
