UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
Financial Services Acquisition Corporation
(Name of Issuer)
Common Stock, par value $.001 per share
(Title of Class of Securities)
31769Q - 10 - 8
(CUSIP Number)
Michael J. Scharf
P.O. Box 1592
Ponte Vedra Beach, Florida 32004
with a copy to:
Roger E. Schwed, Esq.
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
(212) 735-3000
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
August 16, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box ( ).
Check the following box if a fee is being paid with the statement ( ).
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five
percent of the class of securities described in Item 1; and (2) has filed
no amendment subsequent thereto reporting beneficial ownership of five
percent or less of such class.) (See Rule 13D-7.)
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
SCHEDULE 13D
CUSIP NO. 31769Q-10-8
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael J. Scharf
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) ( )
(b) ( )
3 SEC USE ONLY
4 SOURCE OF FUNDS*
PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7 SOLE VOTING POWER
720,001 (including shares issuable upon
exercise of Warrants)
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
EACH
9 SOLE DISPOSITIVE POWER
REPORTING 720,001 (including shares issuable upon
PERSON exercise of Warrants)
WITH
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
720,001 (including shares issuable upon exercise of
Warrants)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* ( )
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.7%
14 TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Michael J. Scharf (the "Reporting Person") hereby amends
(and restates, pursuant to Rule 101(a)(2)(ii) of Regulation S-T)
his Statement on Schedule 13D, dated December 7, 1994, as amended
on March 14, 1996, relating to the Common Stock, $.001 par value,
of Financial Services Acquisition Corporation, a Delaware
corporation.
Item 1. Securities and Issuer.
This statement relates to the Common Stock, par value $.001
per share (the "Common Stock"), of Financial Services Acquisition
Corporation, a Delaware corporation (the "Issuer"). The Issuer's
principal executive offices are located at 667 Madison Avenue,
New York, NY 10021.
Item 2. Identity and Background.
(a) Name of the Reporting Person: Michael J. Scharf
(b) Residence or business address:
P.O. Box 1592
Ponte Vedra Beach, Florida 32004
(c) Present principal occupation or employment and the
name, principal business and address of any corporation or other
organization in which such employment is conducted:
The Reporting Person is Chairman of the Board, President and
Chief Executive Officer of Niagara Corporation. The Reporting
Person is also Vice President, Secretary, Treasurer and a
director of the Issuer and a director of Euro Brokers Investment
Corporation ("Euro Brokers"), a Delaware corporation and a wholly
owned subsidiary of the Issuer located at Two World Trade Center,
Suite 8400, New York, NY 10048. Niagara Corporation is located
at 667 Madison Avenue, New York, NY 10021.
(d)-(e) The Reporting Person has not, during the last five
years, (i) been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) been a party
to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or
is subject to a judgment, decree or final order enjoining future
violation of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violations with
respect to such laws.
(f) Citizenship: United States of America
Item 3. Source and Amount of Funds
or Other Consideration
All funds used to purchase Common Stock of the Issuer held
by the Reporting Person were personal funds. No amount of such
funds were borrowed or otherwise procured from other sources.
The amounts of funds or other consideration used or to be
used in making the purchases is as follows:
(a) The Reporting Person purchased from the Issuer an
aggregate of 220,000 shares of Common Stock (the "Pre-IPO
Shares") in August 1994 at a price of $.03 per share.
(b) The Reporting Person purchased 166,667 Units, each Unit
consisting of one share of Common Stock and two redeemable Common
Stock purchase warrants (the "Warrants"), from the Issuer on
December 7, 1994, at a price of $6.00 per Unit, in the Issuer's
initial public offering (the "IPO"). Each Warrant entitles the
holder thereof to purchase one share of Common Stock for $5.00.
As a result of the consummation on August 16, 1996 of the Merger
described below in Item 6, the Warrants are currently
exercisable. The Warrants expire on November 30, 2001.
Item 4. Purpose of Transaction.
The Reporting Person has acquired the Common Stock of the
Issuer referred to in Item 3 above for the purpose of investment
and in connection with his serving as Vice President, Secretary,
Treasurer and a director of the Issuer. At a meeting of the
Issuer's stockholders held on August 15, 1996, the Reporting
Person was re-elected as a director of the Issuer to serve a
three-year term expiring at the Issuer's annual meeting in 1999.
Subject to the matters referred to below (including Item 6
hereof), the Reporting Person may maintain his investment at its
current level, acquire additional securities of the Issuer or
sell, convert or exchange all or a part of his investment. In
any such case, the decision by the Reporting Person would depend
upon a continuing evaluation of the Issuer's business, prospects
and financial condition, the market for the securities, other
investment opportunities available to him, his positions at the
Issuer and its subsidiaries, general economic conditions, stock
market conditions, availability of funds and other factors and
future developments that he may deem relevant from time to time.
Any acquisition or disposition of securities of the Issuer by the
Reporting Person may be effected through open market or privately
negotiated transactions, gifts or otherwise.
Except to the extent set forth above, or in any other Item
hereof, and except in his capacity as Vice President, Secretary,
Treasurer and a director of the Issuer, which from time to time
may consider various transactions involving its securities, the
Reporting Person does not have any present plans or proposals
that relate to or would result in any of the actions required to
be described in Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a) The Reporting Person currently beneficially owns (i)
386,667.shares of Common Stock and (ii) 333,334 Warrants
representing the right to receive, upon exercise thereof at the
exercise price of $5.00 per Warrant, an aggregate of 333,334
shares of Common Stock. Of these securities, (x) 375,367 shares
of Common Stock (including all of the Pre-IPO Shares) and 321,734
Warrants are directly owned by the Reporting Person, (y) 2,800
shares of Common Stock and 5,600 Warrants are held in the Michael
J. Scharf 1987 Grantor Income Trust, and (z) 8,500 shares of
Common Stock and 6,000 Warrants are held in the Scharf Family
1989 Trust. The Reporting Person is a trustee of both of the
aforementioned trusts. The Pre-IPO Shares have all been
deposited in escrow pursuant to the terms of the Escrow Agreement
described below in Item 6. In its Current Report on Form 8-K,
dated August 26, 1996, the Issuer reported that, giving effect to
the issuance of the entirety of the merger consideration in the
Merger, a total of 9,011,332 shares of Common Stock will be
outstanding. Based on such information, the Common Stock and
Warrants currently beneficially owned by the Reporting Person
represent approximately 7.7% of the Common Stock outstanding
following the Merger (including shares issuable upon exercise of
the Warrants held by the Reporting Person).
(b) The Reporting Person has the sole power to vote and
direct the voting of and, subject to the terms of the Letter
Agreement (described below in Item 6) and the Escrow Agreement,
to dispose and to direct the disposition of the securities
referred to in paragraph (a) above.
(c) Other than the transactions described herein, no
transactions in the Common Stock were effected during the past
sixty days by the Reporting Person.
(d) Pursuant to the Escrow Agreement, all non-cash
dividends payable during the escrow period on the shares of
Common Stock deposited in escrow are to be delivered to the
escrow agent and held in accordance with the terms of the Escrow
Agreement. Subject to the foregoing, no person is known to have
the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the Common
Stock owned by the Reporting Person.
(e) Not applicable.
Item 6. Contracts, Understandings or Relationships
with Respect to Securities of the Issuer
The Reporting Person entered into a Letter Agreement, dated
September 9, 1994 (the "Letter Agreement"), with the Issuer, GKN
Securities Corp. and Barington Securities Corp., the underwriters
for the Issuer's IPO (the "Underwriters"), pursuant to which the
Reporting Person agreed, among other things, that: (i) if the
Issuer solicits stockholder approval of an initial business
combination (a "Business Combination") with another entity, the
Reporting Person will vote the 220,000 Pre-IPO Shares in
accordance with a majority of the votes cast by the stockholders
who purchased shares of the Issuer's Common Stock in the IPO;
(ii) if the Issuer fails to consummate a Business Combination and
is forced to liquidate, the Reporting Person waives his right to
any liquidation distribution with respect to the Pre-IPO Stock;
(iii) the Reporting Person will present to the Issuer for
consideration suitable Business Combination opportunities before
presenting such opportunities to any other person or entity; (iv)
the Reporting Person will not accept a finder's fee or any other
compensation in consideration of his originating a Business
Combination; (v) the Reporting Person will not accept any
compensation for services rendered to the Issuer prior to the
consummation of a Business Combination, except that an entity
affiliated with the Reporting Person is entitled to receive up to
$5,000 per month in reimbursement for the use of certain office
facilities and services, and the Reporting Person is entitled to
reimbursement of expenses incurred in connection with seeking and
consummating a Business Combination; (vi) for three years
following the effective date of the IPO (November 30, 1994), the
Reporting Person will place the Pre-IPO Shares in escrow, unless
the stockholders of the Issuer are "cashed out" in a transaction
following a Business Combination; and (vii) for five years
following the effective date of the IPO, the Reporting Person
will offer the Underwriters a right of first refusal to purchase
for their accounts or to sell for the Reporting Person's account
any shares of Common Stock sold by the Reporting Person pursuant
to Rule 144 of the Securities Act of 1933, as amended (the
"Securities Act"). The Merger described below constituted a
Business Combination and, accordingly, the provisions of the
Letter Agreement described above in clauses (i) through (v) are
no longer applicable.
Each other initial stockholder of the Issuer prior to the
IPO, consisting of Messrs. Gilbert D. Scharf, Denis Martin, Larry
S. Kopp, William D. Birch and Frederick B. Whittemore
(collectively with the Reporting Person, the "Initial
Stockholders"), also entered into a letter agreement with the
Issuer and the Underwriters substantially similar to the Letter
Agreement.
The foregoing is merely a summary of certain provisions of
the Letter Agreement and is qualified in its entirety by
reference to the full text of the Letter Agreement, a copy of
which is attached hereto as Exhibit 1 and incorporated herein by
reference.
In accordance with the provisions of the Letter Agreement,
the Reporting Person entered into a Stock Escrow Agreement, dated
November 30, 1994 (the "Escrow Agreement"), with the Issuer,
Continental Stock Transfer & Trust Company (the "Escrow Agent")
and the other Initial Stockholders, and, pursuant to the terms
thereof, deposited the 220,000 Pre-IPO Shares owned by the
Reporting Person with the Escrow Agent (the "Escrow Shares").
The Escrow Shares are to be held by the Escrow Agent until three
years from November 30, 1994 (the "Escrow Period"). During the
Escrow Period, the Reporting Person will not be able to sell or
otherwise transfer the Escrow Shares, except (i) in a transaction
which occurs after the consummation of a Business Combination and
which is offered to all holders of Common Stock and (ii) in
certain transfers to family members or pursuant to the laws of
descent (provided that the transferee agrees to be bound by the
Escrow Agreement and the Letter Agreement). During the Escrow
Period the Reporting Person retains the right to vote the Escrow
Shares and to receive cash dividends paid thereon. Pursuant to
the Escrow Agreement, the other Initial Stockholders deposited an
aggregate of 613,333 shares of Common Stock (acquired prior to
the IPO) with the Escrow Agent.
The foregoing is merely a summary of certain provisions of
the Escrow Agreement and is qualified in its entirety by
reference to the full text of the Escrow Agreement, a copy of
which is attached hereto as Exhibit 2 and incorporated herein by
reference.
On March 8, 1996, the Issuer announced that it had entered
into a definitive Merger Agreement, dated as of March 8, 1996, as
amended (the "Merger Agreement"), by and among the Issuer, EBIC
Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of the Issuer, and Euro Brokers, pursuant to which
EBIC Acquisition Corp. would be merged with and into Euro Brokers
(the "Merger"), with Euro Brokers thereafter becoming a wholly
owned subsidiary of the Issuer. In the Merger, holders of common
stock of Euro Brokers would be issued a combination of shares of
Common Stock, Warrants (Series B) and cash. The Merger Agreement
also contemplated that as soon as reasonably practicable
following consummation of the Merger (subject to the advice of
the Issuer's financial advisors), the Issuer would commence an
exchange offer (the "Exchange Offer") to acquire all outstanding
Warrants of the Issuer (including the Series B Warrants to be
issued in the Merger) on the basis of one share of Common Stock
for a number of Warrants to be mutually agreed post-closing
between the Issuer and Euro Brokers' majority stockholder,
Welsh, Carson, Anderson & Stowe VI, L.P. ("WCAS").
In connection with the execution of the Merger Agreement,
the Reporting Person, together with the Issuer, Gilbert D. Scharf
(an officer of the Issuer and a brother of the Reporting Person,
and currently a holder of approximately 15.9% of the outstanding
Common Stock) and certain stockholders of Euro Brokers (then
holding approximately 81% of the outstanding capital stock of
Euro Brokers) entered into a Security Transfer Agreement, dated
as of March 8, 1996 (the "Security Transfer Agreement"). The
Security Transfer Agreement provides, among other things, that
each signatory thereto (other than the Issuer) will not, for the
period commencing on the effective time of the Merger (the
"Effective Time") and ending on November 30, 1996, sell, pledge,
encumber, dispose of, grant a security interest in or otherwise
dispose of or transfer ("Sell") any shares of Common Stock or
Warrants owned or acquired, beneficially or of record, by such
signatory following the Effective Time. Notwithstanding the
foregoing, any such signatory who is a natural person may Sell
such Common Stock (i) by means of a gift to a member of such
signatory's immediate family or to a trust, the beneficiary of
which is such signatory or a member of such signatory's immediate
family or (ii) by virtue of the laws of descent and distribution
upon the death of such signatory, provided that the transferee
agrees to be bound by the Security Transfer Agreement.
If the Exchange Offer is made, the Security Transfer
Agreement also obligates the stockholders who are parties thereto
(including the Reporting Person) to tender for exchange (and not
withdraw) in the Exchange Offer their Warrants in numbers
proportionate to the percentage of Warrants held by persons not
parties to the Security Transfer Agreement and that are tendered
in the Exchange Offer.
The Security Transfer Agreement applies to 166,667 shares of
the 386,667 shares of Common Stock currently beneficially owned
by the Reporting Person and to all 333,334 Warrants currently
beneficially owned by the Reporting Person (and will also apply
to any additional shares of Common Stock subsequently acquired,
including upon exercise or exchange of the Warrants). The
220,000 Pre-IPO Shares owned by the Reporting Person are subject
to the Letter Agreement and Escrow Agreement described above in
this Item 6, but not to the Security Transfer Agreement.
The foregoing is merely a summary of certain provisions of
the Security Transfer Agreement and is qualified in its entirety
by reference to the full text of the Security Transfer Agreement,
a copy of which is attached hereto as Exhibit 3 and incorporated
herein by reference.
In connection with, and as a condition to consummation of,
the Merger, the Issuer entered into a Registration Rights
Agreement, dated as of August 16, 1996 (the "Registration Rights
Agreement"), with the stockholders named therein, including the
Reporting Person, providing for certain registration rights under
the Securities Act, with respect to the shares of Common Stock
specified therein. The Registration Rights Agreement provides
for two demand registration rights, in each case which may not
become effective until after November 30, 1996, with the first
demand only to be initiated by holders of at least a majority of
the Common Stock issued in the Merger to WCAS and certain related
investors, but which will extend to the other stockholders
(including the Reporting Person) who are parties to the
agreement. The second demand may be made by holders of at least
a majority of the Common Stock held by all stockholders
(including the Reporting Person) who are parties to the
agreement. The number of shares to be included in any
registration statement may be subject to reduction or limited in
certain instances. The Registration Rights Agreement also
provides for certain "piggy-back" registration rights for the
stockholders named therein if the Issuer, at any time after
November 30, 1996 (other than in connection with the Exchange
Offer or certain other circumstances) proposes to register shares
of Common Stock.
All 386,667 shares of Common Stock currently beneficially
owned by the Reporting Person, as well as any additional shares
of Common Stock acquired pursuant to exercise or exchange of the
333,334 Warrants currently beneficially owned by the Reporting
Person, are covered by the provisions of the Registration Rights
Agreement (subject, in the case of the Escrow Shares, to the
terms of the Escrow Agreement).
The foregoing is merely a summary of certain provisions of
the Registration Rights Agreement and is qualified in its
entirety by reference to the full text of the Registration Rights
Agreement, a copy of which is attached hereto as Exhibit 4 and
incorporated herein by reference.
Other than as described in the preceding paragraphs, the
Reporting Person does not have any contracts, arrangements,
understandings or relationships with any person with respect to
any securities of the Issuer.
Item 7. Material to be Filed as Exhibits.
1. Letter Agreement, dated September 9, 1994 (incorporated
herein by reference to Exhibit 1 to the Statement on
Schedule 13D of the Reporting Person, dated December 7,
1994).
2. Stock Escrow Agreement, dated November 30, 1994
(incorporated herein by reference to Exhibit 10.6 to
Amendment No. 1 to the Registration Statement on Form
S-1 of the Issuer (Reg. No. 33-85346), filed with the
Securities and Exchange Commission on November 23,
1994).
3. Security Transfer Agreement, dated as of March 8, 1996
(incorporated herein by reference to Exhibit 2.2 to the
Quarterly Report on Form 10-Q of the Issuer, dated May
15, 1996).
4. Registration Rights Agreement, dated as of August 16,
1996 (incorporated herein by reference to Exhibit 2.5
to the Current Report on Form 8-K of the Issuer, dated
August 26, 1996).
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
statement is true, complete and correct.
Dated: August 28, 1996
/s/ Michael J. Scharf
________________________
Michael J. Scharf
Exhibit Index
Exhibit
1. Letter Agreement, dated September 9, 1994 (incorporated
herein by reference to Exhibit 1 to the Statement on
Schedule 13D of the Reporting Person, dated December 7,
1994).
2. Stock Escrow Agreement, dated November 30, 1994
(incorporated herein by reference to Exhibit 10.6 to
Amendment No. 1 to the Registration Statement on Form
S-1 of the Issuer (Reg. No. 33-85346), filed with the
Securities and Exchange Commission on November 23,
1994).
3. Security Transfer Agreement, dated as of March 8, 1996
(incorporated herein by reference to Exhibit 2.2 to the
Quarterly Report on Form 10-Q of the Issuer, dated May
15, 1996).
4. Registration Rights Agreement, dated as of August 16,
1996 (incorporated herein by reference to Exhibit 2.5
to the Current Report on Form 8-K of the Issuer, dated
August 26, 1996).
