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 the earliest event reported): November 20,
1997
Ryan, Beck & Co., Inc.
(Exact name of registrant as specified in its charter)
New Jersey
(State or other jurisdiction of incorporation)
0-1 4684
(Commission File Number)
22-1773796
(IRS Employer Identification No.)
220 South Orange Ave., Livingston, New Jersey 07039
(Address and zip code of principal executive offices)
Registrant's telephone number, including area code: (973) 597-6000
This document consists of 10 pages
Item 5. Other Events
On November 19, 1997, the Company borrowed $20 million via a
temporary subordinated loan from PNC Bank at the Federal Funds rate
plus 100 basis points. This loan was required to maintain sufficient
net capital for open contractual commitments in accordance with SEC
Rule 15c3-1. On November 20, 1997, the Company co-managed an
underwritten public offering which involved a $100 million debt issue
and a $45 million equity issue.
Under applicable regulations, the Company is limited to three
subordinated loans in any rolling 12 month period. This loan is the
Company's second subordinated loan since October 14, 1997 and,
therefore, the Company is limited to one additional temporary
subordinated loan until after October 13, 1998.
In light of increased investment banking activities, the Company
is reviewing its net capital position and the potential need to raise
additional capital in the future.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits
( a )Financial Statements of Businesses Acquired
None
( b )Proforma Financial Information
None
( c )Exhibits
Exhibit 99 - Temporary Subordinated Loan Agreement
dated November 13, 1997 between PNC Bank, National Association and
Ryan, Beck & Co., Inc.
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Form 8-K to be signed on its
behalf by the undersigned, thereunto duly authorized.
Ryan, Beck & Co., Inc.
Registrant
/S/ Leonard J. Stanley
Leonard J. Stanley
Senior Vice President, Chief
Financial and Administrative
Officer
Date: November 20, 1997
EXHIBIT 99
NASD
TEMPORARY
SUBORDINATED LOAN AGREEMENT
SL-2
AGREEMENT BETWEEN:
Lender: PNC Bank, National Association
1600 Market Street, 21st Floor
Philadelphia, Pennsylvania 19103
AND
Broker-Dealer: Ryan, Beck & Co., Inc.
220 South Orange Avenue
Livingston, New Jersey 07039
NASD ID NO: 003248
DATED FILED: ___________________________________________________
I. Permissive Prepayments (Optional)
At the option of the Broker-Dealer, but not at the option of the Lender,
payment of all or part of the "Payment Obligation" amount hereof prior to
the Scheduled Maturity Date may be made by the Broker-Dealer only upon
receipt of the prior written approval of the NASD. No prepayment shall be
made if, after giving effect thereto (and to all payments of Payment
Obligations under any other subordination agreements then outstanding, the
maturity or accelerated maturity of which are scheduled to fall due on or
prior to the date on which the Payment Obligation hereof is scheduled to
mature), without reference to any projected profit or loss of the Broker-
Dealer, either aggregate indebtedness of the Broker-Dealer would exceed 1000
percent of its net capital or such lesser percent as may be made applicable
to the Broker-Dealer from time to time by the NASD or a governmental agency
or self-regulatory body having appropriate authority or if the Broker-Dealer
is operating pursuant to paragraph (a) (1) (ii) of 17 CFR 240.15c3-1, its
net capital would be less than 5 percent of aggregate debit items computed
in accordance with 17 CFR 240.15c3-3a, or if registered as a futures
commission merchant, 7 percent of the funds required to be segregated
pursuant to the Commodity Exchange Act and the regulations thereunder, (less
the market value of commodity options purchased by option customers on or
subject to the rules of a contract market, provided, however, the deduction
for each option customer shall be limited to the amount of customer funds in
such option customer's account), if greater, or its net capital would be
less than 120 percent to the minimum dollar amount required by 17 CFR
240.15c3-1 including paragraph (a) (1) (ii), if applicable, or such greater
dollar amount as may be made applicable to the Broker-Dealer by the NASD, or
a governmental agency or self-regulatory body having appropriate authority.
II. Suspended Repayments
(a) The Payment Obligation of the Broker-Dealer shall be suspended and
shall not mature if, after giving effect to such payments (together
with the payment of any Payment Obligation of the Broker-Dealer under
any other subordination agreement scheduled to mature on or before
such Payment Obligation) the aggregate indebtedness of the Broker-
Dealer would exceed 1200 percent of its net capital or such lesser
percent as may be made applicable to the Broker-Dealer from time to
time by the NASD, or a governmental agency or self-regulatory body
having appropriate authority, or if the Broker-Dealer is operating
pursuant to paragraph (a) (1) (ii) of 17 CFR 240.15c3-1, its net
capital would be less than 5 percent of aggregate debit items computed
in accordance with 17 CFR 240.15c3-3a, or , if registered as a futures
commission merchant, 6 percent of the funds required to be segregated
pursuant to the Commodity Exchange Act and the regulations thereunder,
(less the market value of commodity options purchased by option
customer on or subject to the rules of a contract market, provided,
however, the deduction for each option customer shall be limited to
the amount of customer funds in such option customer's account,) if
greater, or its net capital would be less than 120 percent of the
minimum dollar amount as may be made applicable to the Broker-Dealer
by the NASD, or a governmental agency or self-regulatory body having
appropriate authority.
(b) (Optional) The Broker-Dealer agrees that if its obligation to pay the
principal amount hereof is suspended for a period of six months, the
Broker-Dealer will thereupon commence a rapid and orderly complete
liquidation of its business. The date on which the liquidation
commences shall be the maturity date for each subordination agreement
of the Broker-Dealer then outstanding.
III. Accelerated Maturity of the Subordination Agreement Upon the
Occurrence of an Event of Default (Optional)
(a) If the liquidation of the business of the Broker-Dealer has not
already commenced, the Payment Obligation shall mature, together with
accrued interest or compensation upon the occurrence of an Event of
Default, as hereinafter defined.
(b) Further, if liquidation of the business of the Broker-Dealer has not
already commenced, the rapid and orderly liquidation of the business
of the Broker-Dealer shall then commence upon the happening of an
Event of Default, and the date of said Event of Default shall be the
date on which the Payment Obligations of the Broker-Dealer with
respect to all other subordination agreements then outstanding shall
mature.
Events of Default Which May be Included Shall be Limited to:
(i) The filing of an application by the Securities Investor Protection
Corporation for a decree adjudicating that customers of the Broker-
Dealer are in need of protection under the Securities Investor
Protection Act of 1970 and the failure of the Broker-Dealer to obtain
the dismissal of such application within 30 days;
(ii) The aggregate indebtedness of the Broker-Dealer exceeding 1500
percentum of its net capital or, in the case of a Broker-Dealer which
has elected to operate under paragraph (a) (1) (ii) of 17 CFR
240.15c3-1, its net capital computed in accordance therewith is less
than 2 percent of its aggregate debit items computed in accordance
with 17 CFR 240.15c3-3a, or if registered as a futures commission
merchant, 4 percent of the funds required to be segregated pursuant to
the Commodity Exchange Act and the regulations thereunder, (less the
market value of commodity options purchased by option customers on or
subject to the rules of a contract market, provided, however, the
deduction for each option customer shall be limited to the amount of
customer funds in such option customer's account,) if greater,
throughout a period of 15 consecutive business days, commencing on the
day the Broker-Dealer first determines and notifies the Lender and the
NASD, or the NASD or the Commission first determines and notifies the
Broker-Dealer of such fact;
(iii) Revocation by the Commission of the registration of the Broker-Dealer;
(iv) Suspension by the NASD (without reinstatement with 10 days) or
revocation of the Broker-Dealer's status as a member thereof; and
(v) Receivership, insolvency, liquidation pursuant to the Securities
Investor Protection Act of 1970 or otherwise, bankruptcy, assignment
for the benefit of creditors, reorganization whether or not pursuant
to bankruptcy laws, or any other marshaling of the assets and
liabilities of the Broker-Dealer.
IV. Notice of Maturity or Accelerated Maturity
The Broker-Dealer shall immediately notify the NASD if, after giving effect
to all payments of Payment Obligations under subordination agreements then
outstanding which are then due or mature within six months without reference
to any projected profit or loss of the Broker-Dealer, either the aggregate
indebtedness of the Broker-Dealer would exceed 1200 percent of its net
capital, or, in the case of a Broker-Dealer operating pursuant to paragraph
(a) (1) (ii) of 17 CFR 240.15c3-1, its net capital would be less than 5
percent of aggregate debit items computed in accordance with 17 CFR
240.15c3-3a, or, if registered as a futures commission merchant, 6 percent
of the funds required to be segregated pursuant to the Commodity Exchange
Act and the regulations thereunder, (less the market value of commodity
options purchased by option customers on or subject to the rules of a
contract market, provided, however, the deduction for each option customer
shall be limited to the amount of customer funds in such option customer's
account,) if greater, and in either case, if its net capital would be less
than 120 percent of the minimum dollar amount required by 17 CFR 240.15c3-1
including paragraph (a) (1) (ii), if applicable, or such greater dollar
amount as may be made applicable to the Broker-Dealer by the NASD, or a
governmental agency or self-regulatory body having appropriate authority.
V. Broker-Dealers Carrying the Accounts of Specialists and Market Makers
in Listed Options
A Broker-Dealer who guarantees, endorses, carries or clears specialist or
market-maker transactions in options listed on a national securities
exchange or facility of a national securities association shall not permit a
reduction, prepayment or repayment of the unpaid principal amount if the
effect would cause the equity required in such specialist or market-maker
accounts to exceed 1000 percent of the Broker-Dealer's net capital or such
percent as may be made applicable to the Broker-Dealer from time to time by
the NASD, or a governmental agency or self-regulatory body having
appropriate authority.
VI. Broker-Dealer Registered With CFTC
If the Broker-Dealer is a futures commission merchant or introductory broker
as that term is defined in the Commodity Exchange Act, the Organization
agrees, consistent with the requirements of Section 1.17(h) of the
regulations of the CFTC (17 CFR 1.17(h)), that:
(a) Whenever prior written notice by the Broker-Dealer to the NASD is
required pursuant to the provisions of this Agreement, the same prior
written notice shall be given by the Broker-Dealer to (i) the CFTC at
its principal office in Washington, D.C., attention Chief Accountant
of Division of Trading and Markets, and/or (ii) the commodity exchange
of which the Organization is a member and which is then designated by
the CFTC as the Organization's designated self-regulatory organization
(the "DSRO");
(b) Whenever prior written consent, permission or approval of the NASD is
required pursuant to the provisions of this Agreement, the Broker-
Dealer shall also obtain the prior written consent, permission or
approval of the CFTC (and/or of the DSRO); and,
(c) Whenever the Broker-Dealer receives written notice of acceleration of
maturity pursuant to the provisions of this Agreement, the Broker-
Dealer shall promptly give written notice thereof to the CFTC at the
address above stated and/or to the DSRO.
VII. General
This Temporary Subordinated Loan Agreement shall not be available to the
Broker-Dealer if within the preceding thirty calendar days, it has given
notice pursuant to 17 CFR 240.17a-11 under the Securities Exchange Act of
1934, irrespective of its compliance with such provisions, or if immediately
prior to entering into such subordination agreement either the aggregate
indebtedness of the Broker-Dealer exceeds 1000 percent of its net capital,
or, in the case of a Broker-Dealer operating pursuant to paragraph (a) (1)
(ii) of 17 CFR 240.15c3-1, its net capital is less than 5 percent of
aggregate debit items computed in accordance with 17 CFR 240.15c3-a, or, if
registered as a futures commission merchant, 7 percent of the funds required
to be segregated pursuant to the Commodity Exchange Act and the regulations
thereunder, (less the market value of commodity options purchased by option
customers on or subject to the rules of a contract market, provided,
however, the deduction for each option customer shall be limited to the
amount of customer funds in such option customer's account,) if greater, and
in either case, if its net capital would be less than 120 percent of the
minimum dollar amount required by 17 CFR 240.15c3-1 including paragraph (a)
(1) (ii), if applicable, or such greater dollar amount as may be made
applicable to the Broker-Dealer by the NASD, or a governmental agency or
self-regulatory body having appropriate authority, or if the amount of its
then outstanding satisfactory subordination agreements exceeds 70 percent of
its debt-equity total as this term is defined in paragraph (d) of 17 CFR
240.15c3-1 for a period in excess of 90 days, or for such longer period
which the Commission may upon application of the Broker-Dealer grant in the
public interest or for the protection of investors.
The Agreement shall not be subject to cancellation by either the Lender or
the Broker-Dealer, and no payment shall be made, nor the Agreement
terminated, rescinded or modified by mutual consent or otherwise if the
effect thereof would be inconsistent with the requirements of 17 CFR
240.15c3-1 and 240.15c3-1d.
In the event of the appointment of a receiver or trustee of the Broker-
Dealer or in the event of its insolvency, liquidation pursuant to the
Securities Investor Protection Act of 1970 or otherwise, bankruptcy,
assignment for the benefit of creditors, reorganization whether or not
pursuant to bankruptcy laws, or any other marshaling of the assets and
liabilities of the Broker-Dealer, the Payment Obligation of the Broker-
Dealer shall mature, and the holder hereof shall not be entitled to
participate or share, ratably or otherwise, in the distribution of the
assets of the Broker-Dealer until all claims of all other present and future
creditors of the Broker-Dealer, whose claims are senior hereto, have been
fully satisfied.
This Agreement may not be transferred, sold, assigned, pledged or otherwise
encumbered or otherwise disposed of, and no lien, charge or other
encumbrance may be created or permitted to be created thereon without the
prior written consent of the NASD.
The Lender irrevocably agrees that the loan evidenced hereby is not being
made in reliance upon the standing of the Broker-Dealer as a member
organization of the NASD or upon the NASD surveillance of the Broker-
Dealer's financial position or its compliance with the By-Laws, rules and
practices of the NASD. The Lender has made such investigation of the
Broker-Dealer and its partners, officers, directors and stockholders as the
Lender deems necessary and appropriate under the circumstances.
TEMPORARY SUBORDINATED LOAN AGREEMENT
AGREEMENT dated November 13, 1997, to be effective November 19, 1997,
between PNC Bank, National Association, (the "Lender") and Ryan, Beck &
Company (the "Broker-Dealer") for the purpose of participating in a "firm
commitment underwriting" of BankAtlantic Bancorp. <F1>
In consideration of the sum of $20,000,000.00 and subject to the terms
and conditions hereinafter being set forth, the Broker-Dealer promises to
pay to the Lender or assigns on January 2, 1998, (the "Scheduled Maturity
Date") at the principal office of the Lender the aforedescribed sum and
interest thereon payable at each day's opening Fed Funds rate plus one
percent (1%) per annum, calculated on the basis of a 365-day year from the
effective date of this Agreement, which date shall be the date so agreed
upon by the Lender and the Broker-Dealer unless otherwise determined by the
National Association of Securities Dealers, Inc. ("NASD"). This Agreement
shall not be considered a satisfactory subordination agreement pursuant to
the provisions of 17 CFR 240.15c3-ld unless and until the NASD has found the
Agreement acceptable and such Agreement has become effective in the form
found acceptable.
The cash proceeds covered by this Agreement shall be used and dealt
with by the Broker-Dealer as part of its capital and shall be subject to the
risks of the business. The Broker-Dealer shall have the right to deposit
any cash proceeds of this Subordinated Loan Agreement in an account or
accounts in its own name in any bank or trust company.
The Lender irrevocably agrees that the obligations of the Broker-
Dealer under this Agreement with respect to the payment of principal and
interest shall be and are subordinate in right of payment and subject to the
prior payment or provisions for payment in full of all claims of all other
present and future creditors of the Broker-Dealer arising out of any matter
occurring prior to the date on which the related Payment Obligation (as
defined herein) matures consistent with the provisions of 17 CFR 240.15c3-1
and 240.15c3-1d, except for claims which are the subject of subordination
agreements which rank on the same priority as or are junior to the claim of
the Lender under such subordination agreements.
The Lender is not relying upon the NASD to provide any information
concerning or relative to the Broker-Dealer and agrees that the NASD has no
responsibility to disclose to the Lender any information concerning or
relating to the Broker-Dealer which it may now, or at any time, have.
The term "Broker-Dealer" as used in this Agreement shall include the
Broker-Dealer, it heirs, executors, administrators, successors and assigns.
The term "Payment Obligation" shall mean the obligation of the Broker-
Dealer to repay cash lent to it pursuant to this Subordinated Loan
Agreement.
The provisions of this Agreement shall be binding upon the Broker-
Dealer and the Lender and their respective heirs, executors, administrators,
successors and assigns.
This instrument embodies the entire agreement between the Broker-
Dealer and Lender and no other evidence of such agreement has been or will
be executed without the prior written consent of the NASD.
This agreement shall be deemed to have been made under and shall be
governed by the laws of the Commonwealth of Pennsylvania in all respects.
IN WITNESS WHEREOF the parties have set their hands and seals this
13th day of November, 1997.
PNC Bank, National Association Ryan, Beck & Co., Inc.
By: By:
/s/ Paul Devine /s/ Louis G. Intorre
Paul Devine Louis G. Intorre
Vice President Vice President
For NASD use only
Accepted by:
Name:
Title:
Effective Date:
Loan Number:
SUBORDINATED LOAN AGREEMENT
LENDER'S ATTESTATION
1. I have received and reviewed a copy of Appendix D of 17 CFR 240, 15c3-
1 and am familiar with its provisions.
2. I am aware that the funds or securities subject to this Agreement are
not covered by the Securities Investor Protection Act of 1970.
3. I understand that I will be furnished financial statements pursuant to
SEC Rule 17a-5(c).
4. On the date this agreement was entered into, the broker-dealer did not
carry funds or securities for our account.
5. Lender's business relationship to the broker-dealer is that of a
commercial bank making a loan to a corporate customer.
6. Neither a partner nor a stockholder actively engaged in the business
of the broker-dealer, I acknowledge receipt of the following:
a. Certified audit and accountant's certificate dated 12/31/96.
b. There was no disclosure required of financial and/or operational
problems since the last certified audit which required reporting pursuant to
SEC Rule 17a-11.
c. Balance sheet and statement of ownership equity dated 9/30/97.
d. Most recent computation of net capital and aggregated
indebtedness or aggregate debit items dated 9/30/97 and reflecting a net
capital of $4,209,000.00 and a ratio of 123%.
e. Debt/equity ratio as of 9/30/97 of 0%.
f. Other disclosures: none.
PNC Bank, National Association
By: Paul Devine, Vice President
[FN]
<F1>
A Temporary Subordinated Loan is only available for the purpose of enabling
a broker-dealer to participate as an underwriter of securities. Therefore,
for net capital computations the effective date of a temporary subordination
shall be the day immediately preceding the date the underwriting is declared
effective by the Securities and Exchange Commission.
</FN>
