<PAGE>
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e) (2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MAXCOR FINANCIAL GROUP INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule and the
date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Dated Filed:
<PAGE>
Maxcor Financial Group Inc.
April 30, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual
Meeting of Stockholders of Maxcor Financial Group Inc. (the "Company"),
to be held at the Company's New York City offices at Two World Trade
Center, 84th Floor, on Wednesday, June 10, 1998, at 10:00 A.M. local
time.
In addition to electing a class of directors and attending to
other business as described in the attached Proxy Statement, we will
review the Company's results of operations for fiscal 1997 and first
quarter 1998 and report on other matters of interest. There will also be
an opportunity following the formal Meeting for informal questions and
discussion.
Whether or not you expect to attend the Meeting, please sign and
date the enclosed proxy card and return it in the accompanying
postage-paid return envelope as promptly as possible. This will not
prevent you from voting by ballot or changing your proxy should you
attend the Meeting and wish to vote in person or simply wish to change
your vote.
Also, please mark the appropriate space on the proxy card if you
plan to attend the Meeting in person, so that we can make appropriate
arrangements with security at the World Trade Center for your attendance.
On behalf of the Board of Directors and management of Maxcor
Financial Group Inc., we thank you for your continued support and
confidence in the Company.
Sincerely,
Gilbert D. Scharf
Chairman, President
and CEO
- -----------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, DATE AND RETURN
YOUR PROXY CARD PROMPTLY,
WHETHER OR NOT YOU PLAN TO
ATTEND THE ANNUAL MEETING.
- -----------------------------------------------------------------------------
Two World Trade Center, 84th Floor, New York, New York 10048 o
Tel. 212-748-7000 o Fax. 212-748-7329
<PAGE>
MAXCOR FINANCIAL GROUP INC.
Two World Trade Center, 84th Floor
New York, New York 10048
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 10, 1998
The Annual Meeting of Stockholders of Maxcor Financial Group
Inc., a Delaware corporation (the "Company"), will be held at the
Company's New York City offices, Two World Trade Center, 84th Floor, New
York, New York 10048, at 10:00 a.m., local time, on Wednesday, June 10,
1998. The meeting will be held for the purpose of considering and acting
upon the following matters:
1. The election of two Class II directors to serve until the
third succeeding annual meeting of stockholders;
2. The ratification of the appointment of Price Waterhouse LLP as
the Company's independent auditors for the year ending December
31, 1998; and
3. The transaction of such other business as may properly come
before the meeting or any adjournments or postponements thereof.
Information relating to the matters to be considered and voted
on at the meeting is set forth in the Proxy Statement attached to this
Notice. The Board of Directors has fixed the close of business on April
28, 1998, as the record date for determining stockholders of the Company
entitled to notice of and to vote at the meeting. For ten days prior to
(and at) the meeting, a list of stockholders entitled to vote at the
meeting will be maintained at the Company's New York City offices and
will be subject to inspection during regular business hours by any
stockholder.
You are cordially invited to attend the meeting. However, so
that your shares will be represented whether or not you plan to attend
the meeting, please sign, date and promptly return the enclosed proxy
card in the pre-addressed stamped envelope provided.
By Order of the Board of Directors,
Roger E. Schwed
Secretary
New York, New York
April 30, 1998
<PAGE>
MAXCOR FINANCIAL GROUP INC.
Two World Trade Center, 84th Floor
New York, New York 10048
----------------------------
PROXY STATEMENT
----------------------------
General
The accompanying proxy is solicited on behalf of the Board of
Directors of Maxcor Financial Group Inc., a Delaware corporation (the
"Company"), with principal executive offices at Two World Trade Center,
84th Floor, New York, New York 10048, for use at the Annual Meeting of
Stockholders to be held at 10:00 a.m., local time, on Wednesday, June 10,
1998, and at any adjournments or postponements thereof (the "Annual
Meeting"), for the purposes set forth in the foregoing Notice.
This Proxy Statement and the accompanying Notice and proxy card
are first being sent to stockholders on or about April 30, 1998. The
Company's annual report to stockholders for the fiscal year ended
December 31, 1997 has been integrated with the Company's annual report on
Form 10-K for the same period. Accordingly, the Form 10-K is being mailed
to all stockholders of record and accompanies this Proxy Statement.
Revocability of Proxies
All stockholders are cordially invited to attend the Annual
Meeting. However, so that your shares will be represented whether or not
you plan to attend the Annual Meeting, please sign, date and promptly
return the enclosed proxy card in the pre-addressed stamped envelope
provided. You have the right to revoke your proxy at any time prior to
its being voted at the Annual Meeting by (i) filing with the Secretary of
the Company, at or before the taking of the vote at the Annual Meeting, a
written notice of revocation bearing a later date than the proxy, (ii)
duly executing a subsequent proxy relating to the same shares and
delivering it to the Secretary of the Company before the Annual Meeting
or (iii) attending the Annual Meeting and voting in person (although
presence at the Annual Meeting without further action will not revoke a
proxy).
Voting Rights
The Board of Directors has fixed the close of business on April
28, 1998 as the record date (the "Record Date") for the Annual Meeting.
Accordingly, only holders of record of the Common Stock, par value $.001
per share ("Common Stock"), of the Company at the close of business on
such date are entitled to notice of and to vote at the Annual Meeting. At
the close of business on the Record Date, 11,330,631 shares of Common
Stock were issued and outstanding. On all matters to be voted upon at the
Annual Meeting, holders of shares of Common Stock vote as a single class
with each record holder entitled to one vote per share. Stockholders do
not have cumulative voting rights with respect to the election of
directors.
1
<PAGE>
Voting Procedures; Quorum
Proxies received prior to the Annual Meeting and not revoked
will be voted at the Annual Meeting in accordance with the instructions
indicated on such proxies. If no instructions are indicated on a returned
proxy card, the shares represented thereby will be voted in accordance
with the recommendations of the Board of Directors (i) "FOR" the election
of the two nominees to the Board of Directors and (ii) "FOR" ratification
of the appointment of Price Waterhouse LLP as the Company's independent
auditors for fiscal year 1998. The Board of Directors is not aware of any
other matter which is to come before the Annual Meeting, but if any other
matter is properly presented for consideration, the persons named in the
enclosed proxy card will have discretion to vote on such matter in
accordance with their best judgment. So-called "street name" shares that
are held of record by brokers or other nominees, in the absence of
instructions or withheld authority from the beneficial owner, may be
voted in the discretion of such brokers or nominees with respect to each
of the two proposals set forth herein (although if any other matter
properly comes before the Annual Meeting, the nature of such matter will
determine whether the broker or nominee has such discretion).
The presence in person or by properly executed proxy, of holders
of a majority of the outstanding shares of Common Stock entitled to vote
at the Annual Meeting will constitute a quorum. For purposes of
determining the number of shares present in person or represented by
proxy at the Annual Meeting, all votes cast "for," "against" or "abstain"
are included. "Broker non-votes," which occur when brokers or other
nominees are prohibited by applicable rules from exercising discretionary
voting authority on a particular proposal for beneficial owners who have
not provided voting instructions, are also deemed present for purposes of
determining a quorum, but are not counted for the purpose of determining
the vote required for approval of such proposal.
Required Votes
Assuming the presence of a quorum at the Annual Meeting, (i)
directors will be elected (Proposal 1) if they receive a plurality of the
votes cast at the Annual Meeting (and, accordingly, abstentions and
broker non-votes have no effect) and (ii) the appointment of Price
Waterhouse LLP as the Company's independent auditors (Proposal 2) will be
ratified if the Proposal receives the affirmative vote of a majority of
the votes cast at the Annual Meeting (and, accordingly, abstentions and
broker non-votes have the same effect as a negative vote). A "plurality"
means that the director nominees who receive the greatest number of votes
present or represented by proxy (up to the maximum number of two
directors to be elected at the Annual Meeting) are elected as the
directors.
2
<PAGE>
ELECTION OF DIRECTORS
(Proposal 1 on the proxy card)
Article SIXTH of the Company's Restated Certificate of
Incorporation provides that the number of directors shall be not less
than three nor more than twelve, and empowers the Company's Board of
Directors to fix the exact number of directors and to fill any vacancies
on the Board of Directors. Article SIXTH further provides that the Board
of Directors shall be divided into three classes: Class I, Class II and
Class III, with each class to consist, as nearly as possible, of
one-third of the members of the Board. The Company's Board of Directors
has set the number of directors at seven (reduced from eight as the
result of the January 1998 resignation of one of the Company's Class II
directors), with two directors in each of Classes I and II and three
directors in Class III. The term of the Class II directors will expire at
the Annual Meeting, the term of the Class III directors will expire at
the next annual meeting of stockholders and the term of the Class I
directors will expire at the second succeeding annual meeting of
stockholders. Under Article SIXTH, directors elected at an annual meeting
of stockholders to succeed those whose terms expire are identified as
being of the same class as those directors they succeed and are elected
for a term to expire at the third annual meeting of stockholders after
their election.
At the Annual Meeting, two Class II directors will be elected to
hold office until the third succeeding annual meeting of stockholders or
until their successors are elected and shall have been qualified. William
B. Wigton and Keith E. Reihl have been nominated for election as Class II
directors of the Company. Both directors currently are serving as Class
II directors of the Company.
Shares authorized to be voted by the proxies named in a returned
proxy card will be voted "FOR" the election of Messrs. Wigton and Reihl
unless authority to do so is withheld as provided in the proxy card. The
nominees have consented to serve if elected and the Board of Directors
has no reason to believe that the nominees will be unable to accept the
office of director, but if such contingency should arise, it is the
intention of the proxies named in the proxy card to vote for such person
or persons as the Board of Directors may recommend.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
THESE TWO NOMINEES AS DIRECTORS OF THE COMPANY.
Certain information with respect to the nominees for election as
directors proposed by the Company and the other directors whose terms of
office as directors will continue after the Annual Meeting is set forth
below.
Nominees for Election:
Class II Directors
William B. Wigton, 51, has been a director of the Company since
its August 1996 acquisition of Euro Brokers Investment Corporation ("Euro
Brokers") in a merger transaction
3
<PAGE>
(the "Merger"). Mr. Wigton was a founding member and has been a managing
partner of Merrion Group, L.P., a broker-dealer, since its inception in
1989. He is also a managing director of and investor in Merrion
Investors, L.P., a private investment fund, and from 1996 to 1997 served
as a director of Munn, Bernhard & Associates, a registered investment
advisor. From 1981 to 1989, Mr. Wigton was employed at Lazard Freres &
Co. and was a general partner from 1987 to 1989, with responsibility for
corporate bond sales. From 1979 to 1981, Mr. Wigton was a senior vice
president at Dillon Read & Co. Inc. ("Dillon Read"). Prior thereto, he
was associated from 1975 to 1979 with Morgan Stanley & Co. ("Morgan
Stanley") and from 1970 to 1975 with Morgan Guaranty Trust Company. Mr.
Wigton received his B.A. degree from Lynchburg College. He is a member of
the Board's Compensation Committee.
Keith E. Reihl, 46, has been a director of the Company since
April 1997, when he was appointed to the Board of Directors to fill the
vacancy created by the resignation in November 1996 of Donald R.A.
Marshall, the former Chief Executive Officer of Euro Brokers, and, since
August 1997, Chief Financial Officer and Treasurer of the Company. Mr.
Reihl also is the Chief Operating Officer and Treasurer of Euro Brokers
and a number of its subsidiaries, as well as a member of such companies'
respective boards of directors. Prior to being appointed Chief Operating
Officer in November 1996, Mr. Reihl had served since 1983 as the Chief
Financial Officer of Euro Brokers and a number of its subsidiaries. Prior
to that time, Mr. Reihl was employed for nine years by Price Waterhouse
LLP, serving lastly as Senior Audit Manager. Mr. Reihl is a Certified
Public Accountant and received his B.A. degree in Accounting from
Elizabethtown College in 1974.
Directors Continuing in Office:
Class I Directors
James W. Stevens, 61, has been a director of the Company since
its August 1996 acquisition of Euro Brokers, when he became the designee
to the Board of Directors, pursuant to the Merger agreement, of Euro
Brokers and its largest shareholder, Welsh, Carson, Anderson & Stowe VI,
L.P. ("Welsh Carson"), and has since been re-elected by the Company's
stockholders at last year's annual meeting. Mr. Stevens has held various
senior positions at The Prudential Insurance Company of America
("Prudential") from October 1987 through December 1994. Mr. Stevens
retired from Prudential in January 1995. As an Executive Vice President
of Prudential, from October 1987 to December 1994, his responsibilities
included serving on the Operating Council since 1993 and serving as
Chairman and Chief Executive Officer of the Prudential Asset Management
Group with responsibility for global institutional money management since
1993. From April 1985 to October 1987, he was a Managing Director of
Dillon Read in its investment banking and private investment origination
group. From 1974 to 1985, Mr. Stevens held several senior positions at
Citicorp, including Chairman of Citicorp Venture Capital Ltd. and Group
Executive of the Capital Markets Group, responsible for the Western
Hemisphere merchant banking and investment management activities of
Citicorp. Mr. Stevens currently serves on the boards of directors of the
following companies: Biogen, Inc., Markem Corporation, Polyfibron
Technologies, Inc., Pen-Tab Industries, Inc. and Walsh International,
Inc. Mr. Stevens received
4
<PAGE>
his B.A. degree from Williams College and his M.B.A. from New York
University. He is Chairman of the Board's Audit Committee.
Frederick B. Whittemore, 66, has been a director of the Company
since its inception in 1994. Mr. Whittemore currently serves as a member
of the boards of directors of Partner Re Services Ltd., Southern Pacific
Petroleum, Integon Insurance and Chesapeake Energy Corporation. Since
1989, Mr. Whittemore has been an Advisory Director at Morgan Stanley and
he is Chairman of several of Morgan Stanley's mutual funds. Mr.
Whittemore started at Morgan Stanley in 1958; he was a Partner from 1967
to 1970 and a Managing Director from 1970 until 1988. He was a senior
banker in Corporate Finance, Mergers and Acquisitions and Capital
Markets, and Syndicate Manager responsible for organizing and pricing all
public offerings. Mr. Whittemore has also been a member of the Council of
Foreign Relations since 1983 and was Chairman of the Board, Amos Tuck
School of Business Administration at Dartmouth College from 1988 to June
1992. From 1977 to 1984, Mr. Whittemore was a Governor of the American
Stock Exchange ("AMEX") and from 1982 to 1984 he was Vice Chairman of
AMEX. Mr. Whittemore earned an A.B. degree from Dartmouth College and an
M.B.A. from the Amos Tuck School of Business Administration. He is a
member of the Board's Audit Committee.
Class III Directors
Gilbert D. Scharf, 49, has been Chairman of the Board, President
and Chief Executive Officer of the Company since its inception in 1994.
Since April 1993, Mr. Scharf has been a director and Secretary of Niagara
Corporation, a holding company with operating subsidiaries in the
business of manufacturing cold drawn steel bars ("Niagara"), and until
March 1998, was also Vice President and Treasurer of Niagara. Since 1989,
Mr. Scharf has been a private investor and Chairman of Scharf Advisors,
Inc. ("Scharf Advisors"). From 1985 to January 1989, Mr. Scharf was a
Managing Director of Lazard Brothers & Co. Ltd. in London, where he was
responsible for establishing and managing capital market activities. From
1983 to 1985, Mr. Scharf was the General Partner of Mendez, Scharf & Co.,
a private investment partnership. Prior thereto, Mr. Scharf was a
Managing Director at Morgan Stanley from 1978 to 1983, where he managed
all corporate and international bond trading and new issue commitments
and the money market department, and was co-chairman of the risk
management committee. Upon consummation of the Company's acquisition of
Euro Brokers, Mr. Scharf became the Vice-Chairman of Euro Brokers and is
currently the Chairman, President and Chief Executive Officer of Euro
Brokers, as well as of a number of its subsidiaries. Mr. Scharf earned a
B.A. degree from Duke University. He is the Chairman of the Board's
Executive Committee.
Michael J. Scharf, 55, has been a director of the Company since
its inception in 1994 and, until August 1997, was also Vice President,
Secretary and Treasurer of the Company. Since April 1993, Mr. Scharf has
been the Chairman of the Board, President and Chief Executive Officer of
Niagara. From August 1989 to April 1994, he was a private investor. From
October 1983 to August 1989, Mr. Scharf was the Chairman and Chief
Executive Officer of Edgcomb Steel of New England, Inc. and its successor
corporation, Edgcomb Corporation, which was,
5
<PAGE>
from 1984 to 1989, one of the largest independent metals service center
and distribution companies in the United States. Edgcomb Corporation was
sold in 1989 to a company controlled by The Blackstone Group. Mr. Scharf
received an A.B. degree from Princeton University and an M.B.A. from
Harvard Business School. He is a member of the Board's Executive
Committee.
Larry S. Kopp, 55, has been a director of the Company since its
inception in 1994. Since November 1992, Mr. Kopp has been Managing
Director of Frank Russell and Company, a pension consulting firm which
currently has $1,000 billion under advisement and $60 billion in
investment funds through its global investment and administrative
relationships. From 1978 to November 1992, Mr. Kopp held several senior
management positions in strategic growth areas of Citicorp, including
General Manager of its bank card business and Chairman of Citicorp
Insurance Services. From 1974 to 1978, Mr. Kopp was involved in venture
capital transactions and was an advisor at E.M. Warburg Pincus and
Company, where he served as a consultant to corporations regarding
strategic planning, turnarounds, financial restructuring and sales of
assets. Mr. Kopp earned B.A. and M.B.A. degrees from Stanford University.
He is Chairman of the Board's Compensation Committee.
Committees, Meetings and Compensation of the Board of Directors
During 1997, the Board of Directors met four times. All
directors attended at least 75% of the meetings of the Board and Board
Committees on which they serve.
The Board of Directors has standing Executive, Audit and
Compensation Committees. The Executive Committee is currently comprised
of Messrs. Gilbert Scharf (Chairman) and Michael Scharf, and is
authorized to exercise all powers and authority of the Board of
Directors, except those reserved to the Board by law, Board resolution or
the Company's Restated Certificate of Incorporation or By-laws. The
Executive Committee did not meet during 1997.
The Audit Committee is comprised of Messrs. Stevens (Chairman)
and Whittemore and recommends to the Board of Directors the accounting
firm to be appointed as independent accountants for the Company; reviews
with the Company's management and independent accountants the Company's
quarterly and annual operating results; and reviews with the Company's
independent accountants the scope and results of their audit and the
adequacy of the Company's internal accounting procedures and systems. The
Audit Committee met three times during 1997.
The Compensation Committee is comprised of Messrs. Kopp
(Chairman) and Wigton and determines the cash and non-cash compensation
payable to executive officers of the Company. The Compensation Committee
also administers the Company's 1996 Stock Option Plan (the "Option
Plan"). The Compensation Committee met once during 1997.
The members of the Board of Directors are compensated in a
manner and at a rate determined from time to time by the full Board. In
August 1996, each non-employee member of the Board of Directors (which at
the time included Messrs. Stevens, Whittemore, Kopp and
6
<PAGE>
Wigton) received as compensation a one-time grant of options under the
Option Plan to acquire 10,000 shares of Common Stock, exercisable at
$5.00 per share, and vesting in equal 50% increments on the dates
respectively six months and twelve months after the date of grant.
Non-employee directors are also compensated annually in arrears (on or
before the time of the Company's annual meeting) at the rate of $500 for
each Board or Committee meeting attended, plus reimbursement of
reasonable expenses to attend.
Certain Other Relationships and Related Transactions
On August 16, 1996, the Company completed its Merger acquisition
of Euro Brokers, with Euro Brokers becoming a wholly-owned subsidiary of
the Company. In connection with the Merger, the Company entered into a
registration rights agreement with Welsh Carson and certain related
investors, certain members of Euro Brokers then-management (including
Messrs. Reihl and Dulski) and the Company's initial stockholders
(including Messrs. G. Scharf, M. Scharf, Kopp and Whittemore) providing
for two demand registration rights, and certain "piggy-back" registration
rights, with respect to their shares of Common Stock. The first demand
may only be initiated by holders of at least a majority of the total
shares of Common Stock issued in the Merger to Welsh Carson and certain
related investors, but will extend to the other stockholders who are
parties to the agreement. The second demand may be made by holders of a
majority of the total shares of Common Stock held by all stockholders who
are parties to the agreement.
In connection with the Merger, the Company also entered into a
security transfer agreement with certain of its security holders,
including Welsh Carson and Messrs. G. Scharf, M. Scharf, Reihl and
Dulski, obligating such holders, if the Company consummated an exchange
offer (an "Exchange Offer") prior to November 30, 1997, involving the
issuance of Common Stock in exchange for its Redeemable Common Stock
Purchase Warrants ("Warrants"), to tender into such Exchange Offer at
least such portion of the Warrants then held by such holder as is
proportionate to the percentage of Warrants tendered by all other Warrant
holders. On October 16, 1997 the Company commenced, and on November 17,
1997, the Company consummated, an Exchange Offer on the basis of 0.1667
of a share of Common Stock for each Warrant. Pursuant thereto, the
Company issued an aggregate of 2,380,975 shares of Common Stock in
exchange for 14,283,296 (or approximately 95.1%) of the then-outstanding
Warrants, with the above-named parties to the security transfer agreement
each tendering all of their Warrants.
Also in connection with the Merger, the Company entered into an
escrow agreement pursuant to which, among other things, 10% of the shares
of Common Stock issued in the Merger to former Euro Brokers stockholders
(including Welsh Carson, Mr. Reihl and executive officers Walter E.
Dulski and Michael C. Morrison) were placed in escrow to pay, among other
things, indemnities, if any, that become owed to the Company under the
Merger agreement. Such escrow shares were released, without adjustment,
in January 1998.
Gilbert D. Scharf and Michael J. Scharf are brothers. There are
no other family relationships among the Company's directors, executive
officers or persons nominated or chosen by the Company to become a
director or executive officer.
7
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is certain information concerning beneficial
ownership of Common Stock (i) as of the Record Date, by (x) each director
and director nominee of the Company, (y) each named executive officer
(see below) of the Company and (y) all executive officers and directors
of the Company as a group and (ii) based on public filings made through
April 27, 1997, by persons known to the Company to be the beneficial
owners of 5% or more of the outstanding shares of Common Stock.
Beneficial Ownership of Shares of Common Stock
<TABLE>
<CAPTION>
Percentage
Name(1) Number of Shares(2) Beneficially Owned(3)
- ------- ------------------- ---------------------
<S> <C> <C>
Gilbert D. Scharf (4).................. 1,051,133 9.2
Michael J. Scharf (5).................. 444,233 3.9
James W. Stevens....................... 20,000 *
Frederick B. Whittemore................ 43,335 *
Larry S. Kopp.......................... 46,500 *
William B. Wigton...................... 10,000 *
Keith E. Reihl......................... 193,780 1.7
Walter E. Dulski....................... 192,254 1.7
Roger E. Schwed........................ 10,000 *
Michael C. Morrison (6)................ -- --
Donald R.A. Marshall................... 732,616 6.4
Welsh, Carson, Anderson
& Stowe VI, L.P. (7).................. 2,986,346 26.4
All executive officers and directors as
a group (10 persons).................. 2,011,235 17.6
</TABLE>
- ---------------
* Less than 1%
(1) The address of each stockholder, other than Welsh Carson, is c/o
Maxcor Financial Group Inc., Two World Trade Center, 84th Floor,
New York, New York 10048. The address of Welsh Carson is 320 Park
Avenue, Suite 2500, New York, New York 10022.
(2) Includes shares of Common Stock issuable upon exercise of stock
options held by each stockholder that are currently exercisable or
exercisable within 60 days ("Exercisable Options"). Beneficial
ownership of Exercisable Options is as follows: James W. Stevens -
10,000; Frederick B. Whittemore - 10,000; Larry S. Kopp - 10,000;
William B. Wigton - 10,000; Gilbert D. Scharf - 50,000; Michael J.
Scharf - 2,000; Keith E. Reihl - 20,000; Walter E. Dulski - 6,000;
Roger E. Schwed - 10,000; Donald R.A. Marshall - 50,000; and all
executive officers and directors as a group - 128,000.
(3) Based on 11,330,631 shares of Common Stock outstanding as of the
Record Date, plus any shares issuable upon exercise of Exercisable
Options held by the stockholder (but not by any other
stockholders).
8
<PAGE>
(4) Includes 395,794 shares of Common Stock that are held in the
Gilbert D. Scharf Living Trust, of which the Reporting Person is the
sole trustee.
(5) Includes 3,733 shares of Common Stock that are held in the Michael
J. Scharf 1987 Grantor Income Trust, of which the Reporting Person
is a trustee, and 9,500 shares of Common Stock that are held in the
Scharf Family 1989 Trust, of which the Reporting Person is a
trustee.
(6) Mr. Morrison is no longer an executive officer of the Company,
having resigned his position as Chief Operating Officer of the
Company's London operations, effective January 9, 1998.
(7) Includes 50,248 shares of Common Stock owned by WCAS Information
Partners, L.P ("WCAS Information"). Information with respect to
Welsh Carson and WCAS Information and their respective holdings is
derived from Amendment No. 1 to their joint Schedule 13D with
respect to the Common Stock, filed with the Securities and Exchange
Commission on February 27, 1998.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires the Company's directors, officers and
persons who beneficially own more than 10% of a registered class of the
Company's equity securities ("10% stockholders") to file with the
Securities and Exchange Commission (the "SEC") initial reports of
ownership and changes in ownership in the Company's equity securities and
to furnish the Company with copies of all such forms. Based solely on its
review of the copies of such forms received by it, and written
representations from certain of the reporting persons that no other
reports were required, the Company believes that all such Section 16(a)
filing requirements applicable to its directors, officers and 10%
stockholders with respect to the Company's fiscal year ending December
31, 1997 and its prior fiscal years were complied with on a timely basis.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is certain information with respect to each of
the executive officers of the Company who is not also a director or
director nominee of the Company.
Walter E. Dulski, 57, became an Executive Vice President of
Euro Brokers and a number of its subsidiaries in 1997. Prior thereto,
Mr. Dulski had been a Senior Vice President of Euro Brokers and such
subsidiaries. Mr. Dulski is also a director of Euro Brokers Inc. and a number
of other Euro Brokers subsidiaries. Mr. Dulski joined the predecessor business
of Euro Brokers in 1979 and was a member of the American Stock Exchange from
1977 to 1984. Mr. Dulski received his B.S. degree in Economics from Villanova
University in 1963.
Roger E. Schwed, 40, has been Vice President and General Counsel
of the Company since October 1996 and, in August 1997, also became
Secretary of the Company (having previously been Assistant Secretary).
Mr. Schwed is also Executive Vice President, General Counsel and
Secretary of Euro Brokers and Executive Vice President and Secretary of a
number of Euro Brokers subsidiaries. Prior to joining the Company, from
March 1995 to September 1996, Mr. Schwed was Counsel at the law firm
Skadden, Arps, Slate, Meagher & Flom LLP in
9
<PAGE>
New York, and, from October 1987 to February 1995, an attorney at the law
firm Cleary, Gottlieb, Steen & Hamilton. Mr. Schwed received an A.B.
degree from Princeton University in 1979 and a J.D. degree from Columbia
University School of Law in 1986.
Michael C. Morrison, 39, is the former Chief Operating Officer
of the Company's Euro Brokers London operations, having held that
position from November 1996 until his January 1998 resignation from his
various positions with the Company and its subsidiaries. Under SEC
disclosure requirements, Mr. Morrison nonetheless is considered an
executive officer of the Company for purposes of this Proxy Statement
because he was still serving as an executive officer at December 31,
1997, the end of the Company's last fiscal year. Since 1987, up until his
resignation, Mr. Morrison also served as the Chief Financial Officer and
Secretary of such London operations and a member of the boards of
directors of the companies comprising such London operations. Prior to
that time, Mr. Morrison was employed for five years with Price Waterhouse
in London, serving lastly as Audit Manager. Mr. Morrison is a Chartered
Accountant and graduated Ardingly College in 1976, receiving his Diploma
in Accountancy from City of London Polytechnic in 1977.
COMPENSATION OF EXECUTIVE OFFICERS
Summary Compensation Table
The following table summarizes compensation paid by the Company
and its subsidiaries, during each of the last three fiscal years, to its
Chief Executive Officer and its four remaining most highly compensated
executive officers as of December 31, 1997 (collectively, the "Named
Executive Officers").
10
<PAGE>
Summary Compensation Table and Long-Term Compensation Awards
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------- ------------
Name and Fiscal Securities Underlying All Other
Principal Position Year Salary Bonus Options (# of shares) Compensation(1)
------------------ ---- ------ ----- --------------------- ---------------
<S> <C> <C> <C> <C> <C>
Gilbert D. Scharf, 1997 $ 450,000 $ -- -- $ 3,302
Chairman of the 1996 168,750 -- 250,000 --
Board, President 1995 -- -- -- --
and Chief Executive
Officer (2)
Keith E. Reihl, 1997 300,000 30,000 -- 6,655
Chief Financial Officer 1996 281,250 50,000 100,000 6,419
and Treasurer 1995 270,000 90,000 -- 6,293
Walter E. Dulski, 1997 270,000 90,000 -- 3,778
Executive Vice President 1996 270,000 75,000 30,000 3,673
of Euro Brokers 1995 270,000 -- -- 3,673
Roger E. Schwed, 1997 250,000 100,000 -- 2,362
Vice President and 1996 62,500 25,000 50,000 1,780
General Counsel (3)
Michael C. Morrison, 1997 164,010 57,404 -- 453
Chief Operating Officer 1996 157,300 133,705 50,000 382
of Euro Brokers 1995 158,140 95,951 -- 432
London operations (4)
</TABLE>
(1) Amounts for each of Messrs. Scharf, Reihl, Dulski and Schwed
include annual premiums ranging from $537 to $1,342 paid by Euro
Brokers Inc. on travel accident insurance policies providing
coverage of $2.5 million for Mr. Scharf (1997 only) and $1 million
for each of Messrs. Reihl, Dulski and Schwed (1997 only). Amounts
for each of Messrs. Reihl and Dulski also include annual premiums
ranging from $1,281 to $4,158 paid by Euro Brokers Inc. on
long-term disability policies currently providing for, in the
event of disability, monthly payments for life to Mr. Reihl of
$6,900 and monthly payments for two years to Mr. Dulski of $3,000.
Amounts for all Named Executive Officers, other than Mr. Morrison,
also include (x) $1,000 contributions annually made by Euro
Brokers Inc. to the Euro Brokers Inc. 401(k) Savings Plan and (y)
annual premiums ranging from $780 to $960 paid by Euro Brokers
Inc. on life insurance policies providing coverage for such
officers of two times the prior year's reported Form W-2 earnings
(or base salary and guaranteed bonus, if higher), up to a maximum
coverage of $500,000. Amounts for Mr. Morrison are comprised of
pro rated annual premiums paid by Euro Brokers London operations
on a group life insurance policy providing coverage for Mr.
Morrison of four times his base salary. Certain perquisites and
other personal benefits that aggregate in each case to less than
10% of the Named Executive Officer's annual salary and bonus have
been omitted pursuant to item 402(b)(1)(iii)(C)(1) of Regulation
S-K.
(2) Mr. Scharf did not draw a salary from the Company prior to the
date of the Merger (August 16, 1996). His compensation disclosed
for 1996 relates only to the partial year following the Merger
(reflecting an annual base salary of $450,000).
(3) Mr. Schwed did not join the Company until October 1, 1996. His
compensation disclosed for 1996 relates only to a partial year
(reflecting an annual base salary, inclusive of guaranteed bonus,
of $250,000). His salary disclosed for 1997 includes $35,000 of
guaranteed bonus. Mr. Schwed's 1996 option grants include 25,000
options granted in February 1997, but relating to fiscal year
1996.
11
<PAGE>
(4) All amounts for Mr. Morrison reflect the U.S. Dollar equivalent of
amounts actually paid in Pounds Sterling, using average U.S.
Dollar/Pounds Sterling exchange rates of 1.6401, 1.5730 and 1.5814
for 1997, 1996 and 1995, respectively.
Stock Option Grants in Last Fiscal Year
The Company did not grant any stock options to any of its Named
Executive Officers during the fiscal year ended December 31, 1997 that
related to such fiscal year.
Stock Option Exercises and Fiscal Year End Values
No options were exercised by any of the Named Executive Officers
during the Company's 1997 fiscal year. In addition, based on the December
31, 1997 closing sale price for the Common Stock of $2.813 per share and
the exercise prices for the options held by the Named Executive Officers
(ranging from a low of $4.8125 to a high of $5.50), none of such options
were "in-the-money" at 1997 fiscal-year end (i.e., none had an exercise
price below such closing sale price).
The following table sets forth, for each Named Executive
Officer, the number of shares of Common Stock underlying the total number
of options held by such Named Executive Officer at the Company's December
31, 1997 fiscal-year end, with those options that were then exercisable
and those that were then unexercisable separately identified.
Exercisable/Unexercisable Stock Options at Fiscal-Year End
Number of Securities Underlying Unexercised Options
at 1997 Fiscal Year End
-----------------------
Name Exercisable Unexercisable
---- ----------- -------------
Gilbert Scharf 50,000 200,000
Keith Reihl 20,000 80,000
Walter Dulski 6,000 24,000
Roger Schwed 5,000 45,000
Michael Morrison (1) 10,000 40,000
(1) Under the terms of the Option Plan, which generally requires that
options held by ex-employees be exercised within 30 days of the
termination (by reason other than death or retirement) of their
employment or be forfeited, all of Mr. Morrison's options have
subsequently been recaptured by the Company as the result of Mr.
Morrison's January 1998 resignation.
12
<PAGE>
Employment Agreements
Each of the Named Executive Officers has an employment agreement
with the Company or one of its subsidiaries. Each of Mr. Scharf's and Mr.
Reihl's agreements (respectively with the Company and Euro Brokers)
became effective August 16, 1996, for initial three-year terms, with
annual, automatic one-year extensions beginning on the second anniversary
of the effective date unless either party gives notice of non-renewal on
or prior to such anniversary. These agreements provide Mr. Scharf and Mr.
Reihl with minimum annual base salaries of $450,000 and $300,000,
respectively, as from time-to-time reviewed and increased by the
employer's board of directors. Each agreement provides for annual bonuses
that will be determined by the board, but only if the book value per
share of Common Stock increases during the applicable period or in
accordance with any annual incentive plan adopted by the employer, and
for participation in current and future employee benefit plans. If the
executive's employment is terminated by death, by the employer for
"Cause" (as defined in such agreements) or by the executive other than
for "Good Reason" (as defined in such agreements), he will be entitled to
no further payments under his agreement. If the executive's employment is
terminated for "Disability" (as defined in such agreements), he will be
entitled to an additional six months of base salary, followed by such
benefits as are provided under any applicable disability plan. If the
executive's employment is terminated by the employer without "Cause" or
by the executive for "Good Reason," the executive will be entitled to (i)
continuation of base salary to the end of the employment term or, if
longer, for one year (a "Salary Continuation Period"), and (ii)
continuation of coverage under all health, medical and life insurance
benefit plans for the longer of one year and the remainder of the
employment term or, if earlier, until the executive is re-employed and is
entitled to similar benefits from his new employer. Under the agreements,
the executive is subject to certain confidentiality obligations and,
during any Salary Continuation Period or, if the executive's employment
is terminated by the employer for "Cause" or by the executive other than
for "Good Reason," during the one-year period following any such
termination (the "Non-Compete Period"), is obliged not to engage in
certain competitive businesses (in consideration of the employer
continuing to pay the executive at a rate equal to one-half of his base
salary), not to solicit employees of the employer (or its subsidiaries)
to work in such competitive businesses and not to solicit customers of
the employer (or its subsidiaries) for such competitive businesses.
Mr. Schwed's employment agreement is with the Company and is
similar to the ones described above, except that (i) it has a two-year
initial term from an effective date of October 1, 1996 (with annual,
automatic one-year extensions beginning on the first anniversary of the
effective date unless either party gives notice of non-renewal on or
prior to such anniversary), (ii) it provides for a minimum annual base
salary (inclusive of a minimum annual bonus of $35,000) of $250,000,
(iii) it does not require an increase in the Company's per share book
value for the payment of discretionary bonuses, (iv) it permits
unilateral termination of employment by the executive upon 60 days prior
written notice, (v) the continuation of base salary after a termination
by the employer without "Cause" or by the executive for "Good Reason"
will terminate to the extent the executive is re-employed and is entitled
to similar base salary from his new employer and (vi) the Non-Compete
Period is six months, with the employer having the choice to enforce
executive's covenant not to engage in certain competitive businesses during
13
<PAGE>
such time by continuing to pay the executive at a rate equal to his base
salary and minimum bonus.
Mr Dulski's employment agreement is with Euro Brokers Inc. and
has a term that began on September 1, 1996 and ends on June 30, 1999,
subject to automatically continuing past such termination date unless and
until either party gives the other not less than six months prior written
notice of termination expiring on or after such termination date. Under
the agreement, Mr. Dulski's base salary is $270,000, and he is entitled
to be considered for discretionary semi-annual bonuses. Upon the
executive's death or termination of the executive's employment
unilaterally by the executive or by the employer for "Cause" (as defined
in the agreement), he is entitled to no further payments under the
agreement. The agreement provides for certain confidentiality
obligations, a six-month post-termination non-competition period with
respect to not engaging in certain competitive businesses or soliciting
clients of the employer (in consideration of the continuance of the
executive's base salary during such period), and a one-year
post-termination period with respect to non-solicitation of employees.
Mr. Morrison's employment agreement is with Euro Brokers
International Limited and had a fixed term that began on June 1, 1994 and
ended on May 31, 1996, and an automatic rolling term that continues past
such termination date unless and until either party gives the other not
less than six months prior written notice of termination. Mr. Morrison
gave such notice during 1997 and left the employ of the Company on
January 9, 1998. Under the agreement, Mr. Morrison's base salary was
(pounds)100,000, and he was entitled to be considered for discretionary
semi-annual bonuses. The agreement provides for certain confidentiality
obligations, a six-month non-competition period (running from the earlier
of the date a termination notice is given and the date the executive's
employment is terminated) with respect to not engaging in certain
competitive businesses or soliciting clients of the employer, and a
one-year period (running from the same date) with respect to
non-solicitation of employees.
PERFORMANCE GRAPH
The following graph compares cumulative total return of the
Common Stock with the cumulative total return of (i) the Standard &
Poor's MidCap 400 Index (the "S&P MidCap 400 Index") and (ii) an industry
peer group index comprised of seven other publicly-traded financial
companies (the "Peer Group Index"). The graph assumes $100 was invested
on December 7, 1994 (the day the Common Stock was first traded on the OTC
Bulletin Board) in shares of Common Stock, stocks comprising the S&P
MidCap 400 Index and stocks comprising the Peer Group Index, and the
reinvestment of all dividends.
The companies comprising the Peer Group Index are
publicly-traded financial companies that either (i) are, or have a
subsidiary that is, an inter-dealer broker (these companies are: Exco plc
and Trio Holdings PLC) or (ii) are, or have subsidiaries that are,
broker-dealers, share the Company's SIC code and have a market
capitalization within a certain range of the Company's (these companies
are: First Albany Companies Inc., Kinnard Investments, Inc., Rodman &
Renshaw Capital Group, Inc., Hoenig Group Inc. and Stifel Financial
Corp). The returns of each
14
<PAGE>
company have been weighted according to their respective stock market
capitalization for purposes of arriving at a peer group average. Market
prices, dividends and capitalization for the two companies (Exco and
Trio) traded on the London Stock Exchange have been converted to U.S.
Dollars at rates ranging from 1.50 to 1.71.
[LINE CHART OF TOTAL STOCKHOLDER RETURNS](1)
(1) The comparisons in the performance graph above (and the table below) are set
forth in response to SEC disclosure requirements, and therefore are not
intended to forecast or be indicative of future performance of the Common
Stock (or of any of the indices or the companies comprising them).
12/7/94 12/31/94 12/31/95 12/31/96 12/31/96
------- -------- -------- -------- --------
Maxcor Financial Group Inc. 100.00 100.00 108.82 72.05 66.16
S&P MidCap 400 Index 100.00 102.37 134.05 159.79 211.33
Peer Group Index 100.00 97.44 77.43 70.58 83.23
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors, formed in
August 1996 after the Merger, is comprised of Messrs. Larry S. Kopp
(Chairman) and William B. Wigton, each of whom is an independent outside
director and a "disinterested person" within the meaning of Rule 16b-3
under the Exchange Act. There are no "interlocks," as defined by the SEC
with respect to any director who serves or for any part of fiscal year
1997 served as a member of the Compensation Committee.
General
The Compensation Committee is responsible for determining the
compensation of the Company's executive officers, including the Chief
Executive Officer and the other Named
15
<PAGE>
Executive Officers, and also is charged with administering the Company's
Option Plan, which was adopted and approved by the Company's stockholders
in connection with the Merger. The Committee is also charged with
reviewing the Company's existing compensation and benefit plans and
programs with the goal of revising existing and/or adding new plans and
programs, if and to the extent necessary, in order to enhance the
Company's long-term profitability by attracting, motivating and retaining
high-quality executives and aligning their individual interests with the
long-term interests of the Company and its stockholders.
Currently, the Compensation Committee's objectives are
implemented through compensation packages for executive officers
comprised of three major components - base salary, annual bonus and stock
option awards. In considering and determining (or, in certain instances,
recommending to the full Board) these components, the Committee will for
the relevant compensation period, among other things, review the
Company's performance, looking at factors such as its earnings per share,
any increase/decrease in its book value and its financial and other
performance (both compared to prior periods and other financial companies
or industry competitors), review the individual executive's performance
in light of his or her duties (both objectively and subjectively), and
receive the recommendations of the Chief Executive Officer. The Committee
also takes into account the salary and bonus provisions in existing
employment agreements with certain of the Company's executives. In making
compensation decisions (or recommendations to the full Board), the
Committee exercises its discretion and judgment based on the foregoing
and other criteria, without applying a specific formula to determine the
weight of each factor considered. The Committee also considers equity and
fairness when comparing compensation packages among the Company's
executives, in an effort to maintain consistency throughout the executive
compensation program.
Prior to the Merger, the Company did not pay compensation to any
of its officers, who then consisted solely of Messrs. Gilbert Scharf and
Michael Scharf. In connection with the Merger, Mr. G. Scharf entered into
a three-year employment agreement with the Company, effective only from
and after the Merger, providing for an annual base salary of $450,000
and, if the book value of the Company has increased over the relevant
period, discretionary annual bonuses (this agreement is described in
further detail above - see "Employment Agreements"). The terms of this
agreement were negotiated prior to the Merger by Mr. G. Scharf with Euro
Brokers, Welsh Carson and their respective counsel, and were not
reviewed, negotiated or set by the Compensation Committee.
Prior to the Merger, compensation paid by Euro Brokers to its
officers was set either by Mr. Donald R.A. Marshall, who was then the
Chairman, Chief Executive Officer and President of Euro Brokers, and/or
by the Board of Directors of Euro Brokers. Euro Brokers did not have a
separate compensation committee.
CEO Fiscal 1997 Compensation
In reviewing and establishing Mr. Gilbert Scharf's cash
compensation in 1997, the Compensation Committee determined, reflective
of Mr. Scharf's own recommendation, not to increase the base salary
provided for in his employment agreement or to pay any cash bonus. In
16
<PAGE>
making this determination, the Committee primarily considered the
Company's 1997 fiscal year financial performance, including its results
of operations, as well as the difficult operating environment encountered
by many inter-dealer brokers during this period. Pursuant to Mr. Scharf's
employment agreement, a cash bonus could have been paid to him with
respect to the first half of the fiscal year, when book value increased,
but not with respect to the second half of the fiscal year.
With respect to non-cash compensation, the Compensation
Committee determined, again reflective of Mr. Scharf's recommendation,
not to grant Mr. Scharf (or any other Named Executive Officer) any
additional stock options under the Option Plan. In making this
determination, the Committee primarily considered the size and terms of
the grants previously made in or relating to fiscal 1996, as well as the
limited number of options currently remaining available for future grants
under the Option Plan.
Tax Considerations
Section 162(m) of the U.S. Internal Revenue Code limits the tax
deductibility by a company of compensation in excess of $1 million paid
to its chief executive officer and four remaining most highly compensated
executive officers in a taxable year. However, compensation which
qualifies as "performance-based" is excluded from the $1 million limit
if, among other requirements, the compensation is payable only upon
attainment of pre-established, objective performance goals under a plan
approved by stockholders. Compensation attributable to the Option Plan
has been designed to be, and should qualify as, "performance-based" under
Section 162(m).
The Compensation Committee does not presently expect total
compensation payable to any individual Named Executive Officer to exceed
the $1 million taxable year limit. The Committee will continue to monitor
the compensation levels potentially payable under the Company's
compensation programs, but intends to retain the flexibility necessary to
provide total compensation in line with the Company's compensation
philosophy and the Company's strategic goals and best interests.
Compensation Committee
Larry S. Kopp, Chairman
William B. Wigton
17
<PAGE>
RATIFICATION OF APPOINTMENT OF AUDITORS
(Proposal 2 on the proxy card)
Subject to stockholder ratification, the Board of Directors,
upon recommendation of the Audit Committee, has reappointed Price
Waterhouse LLP ("Price Waterhouse") as the Company's independent auditors
for the fiscal year ending December 31, 1998. Price Waterhouse has acted
as the independent auditors for the Company's Euro Brokers group of
subsidiaries since the organization of Euro Brokers in 1986 (and for the
predecessor business of Euro Brokers prior to that time). For the fiscal
year ended December 31, 1997, Price Waterhouse audited the Company's
consolidated financial statements, consulted in the preparation of the
Company's Annual Report on Form 10-K and provided assistance to Company
personnel on accounting, tax and related matters. As noted above, certain
executive officers of the Company, prior to their employment by the
Company, were employees of Price Waterhouse.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS RATIFY SUCH
APPOINTMENT. If no instructions are provided, shares authorized to be
voted by the proxies named in a returned proxy card will be voted "FOR"
the ratification of Price Waterhouse as the Company's independent
auditors for 1998.
Representatives of Price Waterhouse are expected to attend the
Annual Meeting and will have the opportunity to make a statement if they
desire and to respond to appropriate questions from stockholders.
The following disclosure is required by Item 304 of Regulation
S-K under the Exchange Act. Similar disclosure has previously been made
in the Company's Amendment No. 1 to its Current Report on Form 8-K/A,
dated December 2, 1996 and filed with the SEC on December 16, 1996, and
in the Company's Proxy Statement relating to its 1997 Annual Meeting,
filed with the SEC on April 29, 1997.
On December 2, 1996, the Company engaged Price Waterhouse as its
independent accountant and dismissed BDO Seidman, LLP ("BDO Seidman") as
such independent accountant. The change related to the Company's
acquisition of Euro Brokers in the Merger that was consummated on August
16, 1996. Price Waterhouse, as noted above, had acted as the independent
accountant for Euro Brokers for many years, and Euro Brokers and its
subsidiaries comprise substantially all of the Company's business and
assets. As a result, management of the Company believed Price Waterhouse
was better positioned, following the Merger, to act as its independent
accountant.
The Board of Directors of the Company, including both members of
the Board's Audit Committee, approved the change in accountants at a
special meeting of the Board of Directors held on November 27, 1996. The
engagement of Price Waterhouse and the dismissal of BDO Seidman occurred
on December 2, 1996.
During the period from August 18, 1994 (inception of the
Company) to December 31, 1994, the year ended December 31, 1995 and the
subsequent interim period up to December 2,
18
<PAGE>
1996, (i) there were no disagreements between the Company and BDO Seidman
on any matter of accounting principles or practices, financial statement
disclosure or auditing scope or procedure, which disagreement(s), if not
resolved to the satisfaction of BDO Seidman, would have caused BDO
Seidman to make reference to the subject matter of the disagreement(s) in
connection with its report, and (ii) BDO Seidman has not advised the
Company of any reportable events described in paragraphs (A) through (D)
of Item 304(a)(1)(v) of Regulation S-K. The report of BDO Seidman on the
financial statements of the Company for the year ended December 31, 1995
and the period from August 18, 1994 (inception) to December 31, 1994 did
not contain any adverse opinion or a disclaimer of opinion, and was not
qualified or modified as to uncertainty, audit scope or accounting
principles.
Pursuant to the requirements of Regulation S-K, the Company has
previously provided each of Price Waterhouse and BDO Seidman with a copy
of the above statements relating to the change in accountants and an
opportunity to furnish the Company with a brief statement, to be included
herein, if either accountant believes any of such statements are
incorrect or incomplete. Each of Price Waterhouse and BDO Seidman has
previously indicated to the Company that it does not believe any such
incorrectness or incompleteness exists and, accordingly, neither has
furnished such a statement.
Form 10-K and Exhibits
THE COMPANY'S ANNUAL REPORT ON FORM 10-K IS BEING MAILED TO ALL
STOCKHOLDERS OF RECORD AND ACCOMPANIES THIS PROXY STATEMENT. STOCKHOLDERS
OF RECORD WHO SO DESIRE MAY OBTAIN COPIES OF ANY EXHIBIT TO THE FORM 10-K
BY WRITING TO MAXCOR FINANCIAL GROUP INC. (ATTENTION OF THE SECRETARY),
TWO WORLD TRADE CENTER, 84TH FLOOR, NEW YORK, NEW YORK 10048 AND
SPECIFYING (I) THAT THEY WERE A STOCKHOLDER OF RECORD AS OF APRIL 28,
1998, (II) THE EXHIBIT OR EXHIBITS DESIRED AND (III) THEIR AGREEMENT TO
REIMBURSE THE COMPANY FOR ITS REASONABLE COSTS OF COPYING AND MAILING
SUCH EXHIBIT(S).
Solicitation of Proxies
The cost of solicitation of proxies will be borne by the
Company. Solicitation will be made by mail, and may be made by directors,
officers and employees of the Company, personally or by telephone or
telegram. Proxy cards and materials also will be distributed to
beneficial owners of shares of Common Stock through brokers, custodians,
nominees and other parties, and the Company expects to reimburse such
parties for their reasonable charges and expenses.
Stockholder Proposals
Recommendations for nominees to be elected to the Board of
Directors and proposals of stockholders intended to be presented at the
next annual meeting must be submitted in writing to
19
<PAGE>
Maxcor Financial Group Inc. (attention of the Secretary), Two World Trade
Center, 84th Floor, New York, New York 10048. Stockholder proposals must
be received by the Secretary no later than January 1, 1999 in order to be
included in next year's proxy statement and proxy card.
Other Matters
The Board of Directors is not aware of any other matter which is
to come before the Annual Meeting, but if any other matter is properly
presented for consideration, the persons named in the enclosed proxy card
will have discretion to vote on such matter in accordance with their best
judgment.
By Order of the Board of Directors,
Roger E. Schwed
Secretary
April 30, 1998
20
<PAGE>
PROXY
MAXCOR FINANCIAL GROUP INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF MAXCOR FINANCIAL GROUP INC.
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 10, 1998
The undersigned hereby appoints Gilbert D. Scharf, Michael J. Scharf and Roger
E. Schwed, and each of them, proxies for the undersigned with full power of
substitution, to vote all shares of common stock, par value $.001 per share, of
Maxcor Financial Group Inc. (the "Company"), held of record by the undersigned
on April 28, 1998, at the Annual Meeting of Stockholders of the Company, to be
held on June 10, 1998 at 10:00 A.M. local time, and at any and all adjournments
or postponements thereof (the "Annual Meeting"), upon the matters set forth
below and described in the accompanying Proxy Statement and upon such other
business as may properly come before the Annual Meeting. The undersigned hereby
acknowledge(s) receipt of the Notice of Annual Meeting of Stockholders and the
accompanying Proxy Statement. Any and all proxies heretofore given by the
undersigned are hereby revoked.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL OF THE PROPOSALS. IF
ANY OTHER BUSINESS PROPERLY COMES BEFORE THE ANNUAL MEETING, THE PROXIES WILL
HAVE DISCRETIONARY AUTHORITY TO VOTE THIS PROXY WITH RESPECT THERETO IN
ACCORDANCE WITH THEIR JUDGMENT.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF PROPOSALS 1 AND 2.
Proposal 1. Election of Directors:
NOMINEES: William B. Wigton and Keith E. Reihl
(INSTRUCTIONS: To withhold authority to vote for any
individual nominee, mark the "For All Except" box and write
that nominee's name in the space provided below.)
For Withhold For All
All All Except
/ / / / / / --------------------------------
(Continued and to be signed on reverse side.)
<PAGE>
Proposal 2. Ratification of the appointment of Price Waterhouse LLP as the
Company's Independent Auditors for the year ending December 31, 1998:
For Against Abstain
/ / / / / /
I PLAN TO ATTEND THE ANNUAL MEETING / /
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW / /
IF NO BOXES ARE MARKED, THIS
PROXY WILL BE VOTED IN THE MANNER
DESCRIBED ON THE REVERSE SIDE.
Dated: _________ , 1998
Signature: ____________
NOTE: Please sign exactly
as your name appears
hereon. Joint owners
should each sign. When
signing as attorney,
executor, administrator,
trustee, or guardian,
please give your full
title as such.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
