<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
|X| Definitive Proxy Statement by Rule 14a-6(e) (2))
|_| Definitive Additional Materials
|_| Soliciting Material Under 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 28, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 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
Thursday, June 8, 2000, at 10:00 A.M. local time.
At the Meeting, you will be asked to elect a class of directors and to
ratify the selection of independent auditors for 2000. 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,
[LOGO] /s/ Gilbert D. Scharf
-----------------------------
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 8, 2000
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 Thursday, June 8, 2000. The meeting will be held for
the purpose of considering and acting upon the following matters:
1. The election of three Class I directors to serve until the third
succeeding annual meeting of stockholders;
2. The ratification of the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for the year ending December 31, 2000; 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 27, 2000, 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 28, 2000
<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 Thursday, June 8, 2000, 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 28, 2000. The Company's
annual report to stockholders for the fiscal year ended December 31, 1999 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 Thursday,
April 27, 2000, 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, 8,337,437 shares of Common Stock were outstanding
and entitled to vote at the Annual Meeting.
1
<PAGE>
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.
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 as follows: (i) "FOR" the election of the three
nominees to the Board of Directors and (ii) "FOR" ratification of the
appointment of PricewaterhouseCoopers LLP as the Company's independent auditors
for fiscal year 2000. The Board of Directors has not received notice, and is not
otherwise aware, of any other matter which is to come before the Annual Meeting.
Accordingly, 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 were properly to come
before the Annual Meeting, the nature of such matter would 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 of the
shares present and entitled to vote at the Annual Meeting (and, accordingly,
abstentions and broker non-votes have no effect) and (ii) the appointment of
PricewaterhouseCoopers LLP as the Company's independent auditors (Proposal 2)
will be ratified if the Proposal receives a majority of the votes of the shares
present and entitled to vote 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 of the shares present and entitled to vote at the Annual Meeting are
elected as the directors (up to the maximum number of three directors to be
elected at the Annual Meeting).
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 nine, with three directors in each
Class. The term of the Class I directors will expire at the Annual Meeting, the
term of the Class II directors will expire at the next annual meeting of
stockholders and the term of the Class III 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, three Class I 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. James W. Stevens,
Frederick B. Whittemore and Robin A. Clark have been nominated for election as
Class I directors of the Company. Each of these nominees is currently serving as
a Class I director 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. Stevens, Whittemore and Clark
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
THREE 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 I Directors
James W. Stevens, 63, has been a director of the Company since its
August 1996 acquisition of Euro Brokers Investment Corporation ("Euro Brokers")
in a merger transaction (the "Merger"), when he became the designee to the Board
of Directors, pursuant to the Merger agreement, of Euro Brokers and its largest
stockholder, Welsh, Carson, Anderson & Stowe
3
<PAGE>
("Welsh Carson"), and has since been re-elected by the Company's stockholders at
the Company's 1997 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 & Co. Inc. ("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 and Pen-Tab Industries, Inc. Mr.
Stevens received 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, 68, 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 and
Chesapeake Energy Corporation. Since 1989, Mr. Whittemore has been an Advisory
Director at Morgan Stanley & Co. Incorporated ("Morgan Stanley"). 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.
Robin A. Clark, 30, was appointed a director of the Company in January
2000. Mr. Clark is Chief Executive Officer of Euro Brokers Holdings Limited,
Maxcor's holding corporation for its London operations, Joint Managing Director
of its Euro Brokers Finacor venture and a director of its Euro Brokers
Switzerland operations. Mr. Clark joined Maxcor in 1994 to establish its yen
derivatives business in London, and assumed management responsibility for its
London operations in November 1996. Prior to joining Maxcor, Mr. Clark was
Divisional Director at M.W. Marshalls & Co.
4
<PAGE>
Directors Continuing in Office:
Class II Directors
William B. Wigton, 53, has been a director of the Company since its
August 1996 acquisition of Euro Brokers. 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. Prior
thereto, he was associated from 1975 to 1979 with 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, 48, has been a director of the Company since April
1997, and Chief Financial Officer of the Company since August 1997. Mr. Reihl
also served as Treasurer of the Company from August 1997 through November 1998.
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.
Oscar M. Lewisohn, 61, was appointed a director of the Company in
January 2000. Mr. Lewisohn is currently Chairman of Soditic Limited, the London
subsidiary of the Soditic Group, a European investment banking group with other
offices in Geneva, Milan and Jersey, Channel Islands. He is also an advisor to
Mercury Asset Management, London. In Switzerland, Mr. Lewisohn is a director of
the HSBC Republic Bank (Suisse) S.A., Geneva. Mr. Lewisohn was formerly a Deputy
Chairman of S.G. Warburg & Co. Ltd. in London from 1987 to 1994, and a director
of the S.G. Warburg Group plc from 1985 to 1995. Mr. Lewisohn is a Life Governor
of the Imperial Cancer Research Fund, London, and a member of the President's
Committee of the Memorial Sloan Kettering Cancer Center, New York.
Class III Directors
Gilbert D. Scharf, 51, 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
5
<PAGE>
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. From 1978 to 1983, Mr. Scharf was a Managing Director at
Morgan Stanley, 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 August 1996
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, 57, 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 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, 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.
From 1989 (when Edgcomb was sold) until 1993 (when Niagara was founded), Mr.
Scharf managed his personal investments. Since December 1997, Mr. Scharf has
been a director of Worlds Inc., a development stage company which designs,
develops and markets three-dimensional music-oriented Internet sites, and, until
April 1999, also served as its Chairman of the Board. 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, 57, has been a director of the Company since its
inception in 1994. Currently a private investor, from November 1992 through June
1999 Mr. Kopp was a Managing Director of Frank Russell and Company, a pension
consulting firm that was acquired by The Northwestern Mutual Life Insurance
Company in 1999. 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 1999, the Board of Directors met six times. 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
6
<PAGE>
law, Board resolution or the Company's Restated Certificate of Incorporation or
By-laws. The Executive Committee did not meet during 1999.
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 two times during
1999.
The Compensation Committee is comprised of Messrs. Kopp (Chairman) and
Wigton and determines or recommends to the full Board 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 two times during 1999.
All directors attended at least 75% of the meetings of the Board and
Board Committees on which they serve, except that Mr. Michael Scharf attended
four of the six (67%) Board meetings.
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 1999, this
compensation consisted of each non-employee member of the Board of Directors
(consisting of Messrs. Stevens, Whittemore, Kopp, Wigton and M. Scharf)
receiving on November 9, 1999, a one-time grant of options under the Option Plan
to acquire 10,000 shares of Common Stock, exercisable at $2.60 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
In June 1999, the Company repurchased 2,986,345 shares of Common Stock
held by certain investment partnerships of the venture capital firm, Welsh
Carson. The 2,986,345 shares represented approximately 26.4% of the Common Stock
then outstanding. The Company paid a total of approximately $5.23 million, or
$1.75 per share, to repurchase the shares. In connection with the repurchase,
the Company's existing registration rights agreement, entered into in August
1996 in connection with its Merger acquisition of Euro Brokers, was terminated.
Parties to the registration rights agreement included Welsh Carson and certain
related investors, certain members of Euro Brokers then-management (including
Mr. Reihl) and the Company's initial stockholders (including Messrs. G.
Scharf, M. Scharf, Kopp and Whittemore).
7
<PAGE>
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.
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 24, 2000, 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).................. 1,271,383 14.9
Michael J. Scharf (5).................. 463,233 5.5
James W. Stevens....................... 35,000 *
Frederick B. Whittemore................ 58,335 *
Larry S. Kopp.......................... 61,500 *
William B. Wigton...................... 25,000 *
Keith E. Reihl......................... 263,280 3.1
Oscar Lewisohn (6)..................... -- --
Robin A. Clark......................... 60,800 *
Walter E. Dulski (7)................... 216,254 2.6
Roger E. Schwed (8).................... 45,000 *
Steven R. Vigliotti.................... 2,500 *
Donald R.A. Marshall (9)............... 682,616 8.2
All executive officers and
directors as a group (12 persons) 2,502,285 28.5
</TABLE>
- ---------------
* Less than 1%
(1) The address of each stockholder, other than Donald Marshall, is c/o Maxcor
Financial Group Inc., Two World Trade Center, 84th Floor, New York, New
York 10048. The address of Mr. Marshall is 927 Mohawk Road, Franklin
Lakes, New Jersey 07417.
(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 - 25,000; Frederick B.
Whittemore - 25,000; Larry S. Kopp - 25,000; William B. Wigton - 25,000;
Gilbert D. Scharf - 168,750; Michael J. Scharf - 21,000; Keith E. Reihl -
72,500; Robin A. Clark - 35,000; Walter E. Dulski - 23,000; Roger E.
Schwed - 35,000; Steven R. Vigliotti - 2,500; and all executive officers
and directors as a group - 457,750.
8
<PAGE>
(3) Based on 8,337,437 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).
(4) Includes 440,794 shares of Common Stock that are held in the Gilbert D.
Scharf Living Trust, of which Mr. G. Scharf 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 Mr. M. Scharf is a trustee, and
9,500 shares of Common Stock that are held in the Scharf Family 1989
Trust, of which Mr. M. Scharf is a trustee.
(6) Mr. Lewisohn is a settlor, but neither a trustee nor a beneficiary, of a
trust established for the benefit of certain immediate family members who
do not share his household. Mr. Lewisohn does not retain any power to
revoke the trust. As of the Record Date, the trust held 69,143 shares of
Common Stock. Mr. Lewisohn disclaims beneficial ownership of, and any
pecuniary interest in, such shares.
(7) Includes 7,000 shares of Common Stock owned by Mr. Dulski's spouse.
(8) Includes 10,000 shares of Common Stock jointly owned with Mr. Schwed's
spouse.
(9) Information with respect to Mr. Marshall and his holdings is derived from
Amendment No. 2 to his Schedule 13D with respect to the Common Stock and
his most recent Form 4 with respect to the Common Stock, each filed with
the Securities and Exchange Commission on December 10, 1997.
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, executive officers and 10%
stockholders with respect to the Company's fiscal year ending December 31, 1999
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, 58, 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.
9
<PAGE>
Roger E. Schwed, 42, 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 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.
Steven R. Vigliotti, 32, has been Treasurer of the Company since
December 1998, and Chief Financial Officer of Euro Brokers since May 1998. He
has also served as Chief Financial Officer of a number of Euro Brokers'
subsidiaries since July 1998. Prior to joining Euro Brokers, Mr. Vigliotti was
employed by the accounting firm of BDO Seidman, LLP for approximately seven
years, lastly as an audit partner in the firm's financial services group. Mr.
Vigliotti is a certified public accountant and received his B.B.A. degree in
accounting from Hofstra University in 1990.
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, 1999 (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, 1999 $ 425,000 $ 350,000 -- $ 3,086
Chairman of the 1998 443,750 135,000 325,000 (3) 3,307
Board, President 1997 450,000 -- -- 3,302
and Chief Executive
Officer
Keith E. Reihl, 1999 $ 275,000 $ 275,000 -- $ 6,568
Chief Financial Officer 1998 293,750 135,000 150,000 (3) 6,657
1997 300,000 30,000 -- 6,655
Robin A. Clark 1999 $ 524,908 $ 197,050 -- $ 389
Chief Executive Officer 1998 498,300 274,350 70,000 (3) 459
of Euro Brokers London 1997 492,030 442,830 -- 453
Operations (2)
Roger E. Schwed, 1999 $ 250,000 $ 200,000 -- $ 2,410
Vice President and 1998 244,170 85,000 70,000 (3) 2,499
General Counsel 1997 250,000 100,000 -- 2,362
Walter E. Dulski, 1999 $ 253,333 $ 100,000 -- $ 3,691
Executive Vice President 1998 263,750 85,000 50,000 (3) 3,780
of Euro Brokers 1997 270,000 90,000 -- 3,778
</TABLE>
(1) Amounts for each of Messrs. Scharf, Reihl, Schwed and Dulski include
annual premiums ranging from $450 to $1,347 paid by Euro Brokers Inc. on
travel accident insurance policies providing coverage of $2.5 million for
Mr. Scharf and $1 million for each of Messrs. Reihl, Schwed and Dulski.
Amounts for each of Messrs. Reihl and Dulski also include annual premiums
ranging from $1,280 to $4,159 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 $7,200 and monthly payments for
two years to Mr. Dulski of $3,000. Amounts for all Named Executive
Officers 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 of $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 or if no prior year history), up to a maximum coverage of
$500,000. Amounts for Mr. Clark are comprised of pro rated annual
premiums paid by Euro Brokers London operations on a group life insurance
policy providing coverage for Mr. Clark of four times his base salary, up
to a maximum coverage in 1999 of (pound)350,400. Certain perquisites and
other personal benefits that aggregate in each case to less than the
lesser of either $50,000 or 10% of the Named Executive Officer's annual
salary and bonus have been omitted pursuant to item 402(b)(2)(iii)(C)(1)
of Regulation S-K.
(2) All amounts for Mr. Clark reflect the U.S. dollar equivalent of amounts
actually paid in British pounds sterling, using average U.S.
dollar/pounds sterling exchange rates of 1.6151, 1.6610 and 1.6401 for
1999, 1998 and 1997, respectively. In May 1998, in connection with the
commencement of his employment agreement (see "Employment Agreements"
below), Mr. Clark also received an advance from a U.S. affiliate of
(pound)120,000, equivalent to (pound)200,000 on a gross basis, to be
deemed earned at the end of two years under certain conditions, including
Mr. Clark remaining continuously employed under the employment agreement
during such period. Accordingly, for purposes of the table above,
(pound)100,000 and (pound)66,667, representing pro-rated portions of the
gross advance, have been included in Mr. Clark's salary for 1999 and
1998, respectively.
11
<PAGE>
(3) All options granted to the Named Executive Officer in 1996 were repriced
in 1998. The repriced options consisted of 250,000 options granted to Mr.
Scharf, 100,000 options granted to Mr. Reihl, 50,000 options granted to
Mr. Clark, 50,000 options granted to Mr. Schwed, and 30,000 options
granted to Mr. Dulski. Vesting terms were not changed. Under the rules of
the Securities and Exchange Commission, the repriced 1996 option grants
are treated for disclosure purposes as having been granted anew in 1998
and, accordingly, are included in the totals presented for 1998.
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, 1999.
Stock Option Exercises and Fiscal Year End Option Values
No options were exercised by any of the Named Executive Officers during
the fiscal year ended December 31, 1999.
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, 1999 fiscal-year end,
with those options that were then exercisable and those that were then
unexercisable separately identified. Based on the December 31, 1999 closing
sales price for the Common Stock of $2.688, the table also sets forth the
aggregate value of unexercised "in-the-money" options (i.e., options with an
exercise price below such closing sales price) held by such Named Executive
Officer, calculated on a grant-by-grant basis using the difference between the
exercise price for the grant and such closing sales price.
<TABLE>
<CAPTION>
Number of Securities Underlying
Unexercised Options Value of Unexercised In-the-Money
at 1999 Fiscal Year End Options at 1999 Fiscal Year End
----------------------- -------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Gilbert D. Scharf 168,750 156,250 $ 113,663 $ 100,188
Keith E. Reihl 72,500 77,500 49,880 53,320
Robin A. Clark 35,000 35,000 24,080 24,080
Roger E. Schwed 35,000 35,000 24,080 24,080
Walter E. Dulski 23,000 27,000 15,824 18,576
</TABLE>
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 are with the Company. Mr. Scharf's has a contract term that began on
August 16, 1996 and ends on August 16, 2001, and Mr. Reihl has a contract term
that began on August 14, 1998 and ends on August 14, 2001. The agreements
provide for annual, automatic one-year extensions of the contract term
12
<PAGE>
beginning on the fourth (in the case of Mr. Scharf) or second (in the case of
Mr. Reihl) anniversary of the effective date unless either party gives notice of
non-renewal on or prior to such anniversary. The 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 Board. Each
agreement provides for semi-annual bonuses to be determined in the discretion of
the Board or in accordance with any annual incentive plan adopted by the Company
or a subsidiary, for reimbursement of the executive's reasonable business
expenses and for participation in current and future employee benefit plans. If
the executive's employment is terminated by death, by the Company 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 Company 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
contract term or, if longer, for one year (a "Salary Continuation Period"), (ii)
continuation of coverage under all health, medical and life insurance benefit
plans for the longer of one year and the remainder of the contract term or, if
earlier, until the executive is re-employed and is entitled to similar benefits
from his new employer, and (iii) treatment as an employee to the end of the
contract term for purposes of vesting of stock awards and other contingent
incentive plans. Under the agreements, the executive is subject to certain
confidentiality obligations and, if the executive's employment is terminated by
the Company 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 at the Company's request not to engage in certain competitive businesses
(in consideration of the Company continuing to pay the executive at a rate equal
to his base salary). In addition, for up to the first year of any Salary
Continuation Period, the executive is obliged 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. The agreements also provide for the indemnification of the
executive, to the full extent permitted by law, for liabilities and expenses
incurred in the performance of his duties, and, if the executive substantially
prevails with respect to a preponderance of the matters at issue, for the
reimbursement of legal fees and expenses incurred in contesting a termination or
enforcing a right under his agreement.
Both Mr. Scharf's and Mr. Reihl's employment agreements have certain
provisions triggered in the event that there is a "Change in Control" (as
defined in such agreements) with respect to the Company. Following a Change in
Control, (i) the contract term is automatically extended, if necessary, so as to
continue in effect for a minimum of twenty-four months, (ii) if the executive's
employment is terminated by the Company without Cause or by the executive for
Good Reason, the executive is entitled to a lump sum payment equal to three
times the sum of (x) his base salary prior to the Change in Control and (y) the
greater of $200,000 or his annualized bonus (determined in accordance with the
agreements), with such payment to be grossed up by the Company for any federal
excise tax applied to it (and for any federal, state or local taxes applied to
such gross-up), (iii) if a good faith dispute as to termination exists, the
executive continues to receive his full compensation and benefits during the
period of the dispute, and (iv)
13
<PAGE>
if the executive's employment is terminated by the executive for Good Reason,
the executive is obligated to observe a Non-Compete Period of six months.
Mr. Schwed's employment agreement is also with the Company and is
similar to the ones described above, except that (i) it has a contract term that
began on October 1, 1996 and ends on October 1, 2001 (with annual, automatic
one-year extensions beginning on the fourth 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 of $250,000,
(iii) it provides for a minimum annual bonus of $50,000, (iv) it permits
unilateral termination of employment by the executive upon 60 days prior written
notice, (v) the continuation of base salary and minimum bonus after a
termination by the Company 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 and minimum bonus from his new employer, (vi) the
Non-Compete Period is six months and (vii) if, following a Change in Control,
the executive's employment is terminated by the Company without Cause or by the
executive for Good Reason, the executive is entitled to a lump sum payment equal
to his aggregate base salary and minimum bonus for the remainder of the contract
term or, if longer, one year, but without any gross-up for excise taxes or
otherwise.
Mr. Clark's employment agreement is with Euro Brokers Finacor Limited
and has a contract term that began on May 1, 1998 and ends on April 30, 2001,
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.
Clark's base salary is (pound)200,000 for each of the first two years of the
contract term, and thereafter escalates to (pound)300,000, and he is entitled to
be considered for discretionary semi-annual bonuses. In consideration of the
commencement of his employment agreement at the lower base salary rate, Mr.
Clark also received an advance of (pound)120,000 from a U.S. affiliate,
equivalent to (pound)200,000 on a gross basis, to be deemed earned at the end of
two years under certain conditions, including Mr. Clark remaining continuously
employed under the employment agreement during such period. Mr. Clark's
employment agreement provides for certain confidentiality obligations, a
non-competition period lasting for twelve months (commencing upon the earlier of
the date a termination notice is given and the date the executive's employment
is terminated) or, if the contract term has less than one year remaining,
lasting for the longer of such remaining term and six months, with respect to
not engaging in certain competitive businesses or soliciting clients of the
employer, and a one-year period (commencing upon the same date) with respect to
non-solicitation of employees.
Mr. Dulski's employment agreement is with Euro Brokers, and has a
contract term that began on August 14, 1998 and ends on August 31, 2001, 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. If the executive's employment is terminated
by death, for "Disability" (as defined in the agreement), by the Company for
"Cause" (as defined in the agreement) or by the executive other than for "Good
Reason" (as defined in the agreement), he will be entitled to no further
payments under the agreement. If the executive's employment is terminated by the
14
<PAGE>
Company without Cause or by the executive for Good Reason, the executive will,
for the duration of the contract term, be entitled to continuation of his base
salary and coverage under all health, medical and life insurance benefit plans
(except to the extent the executive is re-employed and is entitled to similar
base salary and benefits coverage from his new employer), and to treatment as an
employee for purposes of vesting of stock awards and other contingent incentive
plans. If, following a Change in Control, a good faith dispute as to termination
exists, the executive continues to receive his full compensation and benefits
during the period of the dispute. The agreement provides for certain
confidentiality obligations, as well as a post-termination non-competition
period with respect to not engaging in certain competitive businesses or
soliciting clients of Euro Brokers (if requested by Euro Brokers and Euro
Brokers continues the executive's base salary during such period) and a
non-solicitation period with respect to employees of Euro Brokers, with each
such period lasting for the longer of the remaining contract term or six months.
The agreement also provides that the prevailing party in any action under it is
entitled to recover from the other party all costs and expenses.
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 six other publicly-traded financial companies (the "Peer Group
Index"). The graph assumes $100 was invested on December 31, 1994 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: Garban-Intercapital plc (which
resulted from the September 1999 merger of Garban plc and Intercapital 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., Hoenig Group Inc. and Stifel Financial Corp). As a
result of its common stock having been deregistered and delisted in 1998, Rodman
& Renshaw Capital Group, Inc. has been dropped from the Peer Group Index. The
returns of each company have been weighted according to their respective stock
market capitalization for purposes of arriving at a peer group average.
15
<PAGE>
[GRAPHIC OMITTED]
(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).
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Maxcor Financial Group Inc. 100.00 108.82 72.05 66.16 38.24 63.25
S&P MidCap 400 Index 100.00 130.94 156.08 206.43 245.87 282.06
Peer Group Index 100.00 80.96 74.60 89.97 73.40 94.44
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
Compensation Committee Interlocks and Insider Participation
The Compensation Committee of the Board of Directors 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 1999
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 Executive Officers, and also is charged with
administering the Company's Option Plan, which was adopted and approved by the
Company's stockholders in 1996. 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
16
<PAGE>
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, semi-annual bonuses and periodic 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),
compare the individual executive's compensation to comparable executives at
industry competitors, 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.
CEO Fiscal 1999 Compensation
Although Mr. Scharf's employment agreement provides for a base salary
of $450,000, as of October 1, 1998, on his own initiative, Mr. Scharf took a
voluntary pay cut to $425,000. In reviewing and establishing Mr. Gilbert
Scharf's cash compensation in 1999, the Compensation Committee determined,
reflective of Mr. Scharf's own recommendation, not to restore the cut and,
accordingly, Mr. Scharf's base salary remained at $425,000. The Committee
believed that continuing to weight Mr. Scharf's total compensation package
towards a mix with a greater emphasis on non-guaranteed components was
appropriate and would allow the Committee greater flexibility in adjusting Mr.
Scharf's total compensation to reflect relevant factors each year, including his
and the Company's respective performances.
With respect to fiscal year 1999, the Compensation Committee
recommended, and the full Board of Directors (Mr. G. Scharf abstaining)
approved, the payment of discretionary bonus compensation to Mr. Scharf totaling
$350,000. Two Hundred Fifty Thousand Dollars of this amount related to the first
half of 1999, and the balance of $100,000 related to the second half of 1999.
The Committee primarily considered the Company's return to profitability in
1999, after a difficult 1998. The Committee also took into account Mr. Scharf's
leadership in a number of strategic initiatives commenced and/or completed by
the Company in 1999, including:
o The combination of the Company's London-based capital markets
businesses - interest rate options, dollar deposits and euro,
sterling, dollar and yen swaps - with the London-based euro and
scandinavian swaps businesses of the European brokerage firm,
Finacor.
17
<PAGE>
o The combination of the Company's Tokyo-based derivatives brokering
venture with the off-balance brokerage operations of Nittan Exco
Ltd.
o The execution in the first quarter of the Company's first
significant information services agreement with Telerate, Inc.,
pursuant to which the Company provides a variety of pricing and
other Euro Brokers data on emerging market bonds.
o The repurchase from Welsh Carson in the second quarter of 26.4% of
the outstanding Common Stock at a price of $1.75 per share.
o The obtaining of an up to $5 million credit facility in connection
with the Welsh Carson repurchase, and the reduction by the end of
1999 of the Company's outstanding notes and loans payable
(including under the facility) to the historically low level of
$2.5 million.
The Committee also considered the materially higher compensation levels of chief
executive officers at a number of the Company's industry competitors.
With respect to non-cash compensation for fiscal 1999, 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 fiscal years 1996 and 1998, as well as the limited
number of options 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
18
<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 PricewaterhouseCoopers
LLP ("PricewaterhouseCoopers") as the Company's independent auditors for the
fiscal year ending December 31, 2000. PricewaterhouseCoopers 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, 1999,
PricewaterhouseCoopers 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.
In early 1999, PricewaterhouseCoopers also conducted certain agreed upon
procedures (mandated by the Securities and Exchange Commission for all
broker-dealers meeting certain net capital thresholds) with respect to the
Company's "Year 2000" compliance program and consulted on the Company's new
front and middle-office systems for processing its brokerage transactions. As
noted above, one executive officer of the Company, prior to his employment by
the Company, was an employee of one of PricewaterhouseCoopers' predecessor
businesses.
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 PricewaterhouseCoopers as the Company's independent auditors for 2000.
Representatives of PricewaterhouseCoopers 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.
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 27, 2000, (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
19
<PAGE>
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 Company's next
annual meeting of stockholders, to be held in 2001, must be submitted in writing
to Maxcor Financial Group Inc. (to the 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 December 30, 2000 in order to be
included in the Company's proxy statement and proxy card for such annual
meeting.
Pursuant to Rule 14a-4 under the Exchange Act, stockholders of the
Company are advised that, in connection with the Company's annual meeting of
stockholders to be held in 2001, proxies solicited on behalf of the Company's
Board of Directors may confer on the persons named as proxies therein
discretionary authority to vote on any stockholder proposal presented at such
meeting that has not been submitted in writing to Maxcor Financial Group Inc.
(to the attention of the Secretary), Two World Trade Center, 84th Floor, New
York, New York 10048, on or prior to March 14, 2001 (the date in 2001 that is 45
days in advance of the date that this Proxy Statement is being released to
stockholders).
Other Matters
The Board of Directors has not received notice, and is not otherwise
aware, of any other matter which is to come before the Annual Meeting.
Accordingly, 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 28, 2000
20
<PAGE>
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 8, 2000
The undersigned hereby appoints Gilbert D. Scharf, Keith E. Reihl 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 27, 2000, at the Annual Meeting of Stockholders of the Company, to be
held on June 8, 2000, 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:
<TABLE>
<S> <C>
Nominees: James W. Stevens, Frederick B. Whittemore and Robin A. Clark
(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.)
</TABLE>
<PAGE>
Proposal 2. Ratification of the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors for the year ending December 31, 2000:
For Against Abstain
[ ] [ ] [ ]
I PLAN TO ATTEND THE ANNUAL MEETING [ ]
<TABLE>
<S> <C>
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: ___________________________________________, 2000
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.
</TABLE>
