As filed with the Securities and Exchange Commission on February _, 2000
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
THCG, INC.
(Exact name of registrant as specified in its charter)
Utah 87-0415597
---- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
650 Madison Avenue, 21st Floor
New York, New York 10022
(Address of Principal Executive Offices)
--------------------------
THE 2000 THCG, INC. STOCK INCENTIVE PLAN
THCG, INC. 2000 EMPLOYEE STOCK PURCHASE PLAN
THE 1999 WALNUT FINANCIAL SERVICES, INC. STOCK INCENTIVE PLAN
AMENDED AND RESTATED 1994 WALNUT FINANCIAL SERVICES, INC. STOCK INCENTIVE PLAN
WALNUT CAPITAL CORPORATION 1987 STOCK OPTION PLAN
AMIT AVNET STOCK OPTION AGREEMENT
MICHAEL GEGENHEIMER STOCK OPTION AGREEMENT
ALON HOSHMAND STOCK OPTION AGREEMENT
MARIA IANITTI STOCK OPTION AGREEMENT
LARRY LOEB STOCK OPTION AGREEMENT
ORI RAAM STOCK OPTION AGREEMENT
PATRICK REGAN STOCK OPTION AGREEMENT
JOSEPH SHMIDMAN STOCK OPTION AGREEMENT
ERICA SIEGEL STOCK OPTION AGREEMENT
LARRY SMITH STOCK OPTION AGREEMENT
ED TEDESCHI STOCK OPTION AGREEMENT
LUIS VERGARA STOCK OPTION AGREEMENT
GORDON WINSTON STOCK OPTION AGREEMENT
(Full Title of the Plans)
Joseph D. Mark
Co-Chief Executive Officer
THCG, Inc.
650 Madison Avenue, 21st Floor
New York, New York 10022
(Name and Address of Agent for Service)
(212) 223-0440
(Telephone Number, Including Area Code,
of Agent for Service)
Copies to:
Peter S. Kolevzon, Esq.
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
(212) 715-9100
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plans described herein.
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Securities to be Amount to be Offering Price Aggregate Offering Amount of
Registered Registered Per Share Price Registration Fee
- ------------------------------ ------------------ ------------------ -------------------- --------------------
<S> <C> <C> <C> <C>
Common Stock (par value 5,244,000 $15.50 (2) $81,282,000 $21,458.44
$0.01 per share) shares (1)
- ------------------------------ ------------------ ------------------ -------------------- --------------------
Common Stock (par value 1,386,000 shares $3.625 (4) $5,024,250 $1,326.40
$0.01 per share) (3)
- ------------------------------ ------------------ ------------------ -------------------- --------------------
Common Stock (par value 100,000 shares $7.188(4) $718,000 $189.55
$0.01 per share) (5)
- ------------------------------ ------------------ ------------------ -------------------- --------------------
Common Stock (par value 338,000 $10.00 (4) $3,380,000 $892.32
$0.01 per share) shares (6)
- ------------------------------ ------------------ ------------------ -------------------- --------------------
Common Stock (par value 930,000 shares $6.00 (4) $5,580,000 $1,473.12
$0.01 per share) (7)
- ------------------------------ ------------------ ------------------ -------------------- --------------------
Common Stock (par value 13,334 shares (8) $10.86 (4) $144,807.24 $38.22
$0.01 per share)
- ------------------------------ ------------------ ------------------ -------------------- --------------------
Common Stock (par value 1,000 shares (9) $13.50 (4) $13,500 $3.56
$0.01 per share)
- ------------------------------ ------------------ ------------------ -------------------- --------------------
Common Stock (par value 23,350 shares $10.80 (4) $252,180 $66.57
$0.10 per share) (10)
- ------------------------------ ------------------ ------------------ -------------------- --------------------
</TABLE>
(1) Represents 544,000 authorized but unissued shares of Common Stock under
The 1999 Walnut Financial Services, Inc. Stock Incentive Plan (the
"1999 Plan"), 4,500,000 authorized but unissued shares of Common Stock
under The 2000 THCG, Inc. Stock Incentive Plan, and 200,000 authorized
but unissued shares of Common Stock under the THCG, Inc. 2000 Employee
Stock Purchase Plan.
(2) Estimated, in accordance with 17 CFR 230.457(c), solely for the purpose
of calculating the registration fee. The Proposed Maximum Offering
Price Per Share is based on the average of the high and low prices
reported by the Nasdaq National Market of The Nasdaq Stock Market on
March 21, 2000, which is within five (5) business days prior to the
date of this Registration Statement.
(3) Represents shares of Common Stock subject to options issued pursuant to
the 1999 Plan on November 2, 1999.
(4) The Proposed Maximum Offering Price is equal to the exercise price per
share of each share of Common Stock with respect to the options
granted.
(5) Represents shares of Common Stock subject to options issued pursuant to
the 1999 Plan on November 8, 1999.
(6) Represents shares of Common Stock subject to options issued on December
15, 1999, an aggregate of 220,000 of which were granted under the 1999
Plan and an aggregate of 118,000 of which were granted under the Gordon
Winston Stock Option Agreement, the Larry Loeb Stock Option Agreement,
the Joseph Shmidman Stock Option Agreement, the Alon Hoshmand Stock
Option Agreement, the Luis Vergara Stock Option Agreement, the Patrick
Regan Stock Option Agreement, the Amit Avnet Stock Option Agreement,
the Erica Siegal Stock Option Agreement, the Ori Raam Stock Option
Agreement and the Maria Iannitti Stock Option Agreement.
(7) Represents shares of Common Stock subject to options issued pursuant to
the Larry Smith Stock Option Agreement, the Ed Tedeschi Stock Option
Agreement and the Michael Gegenheimer Stock Option Agreement on
December 29, 1999.
(8) Represents shares of Common Stock subject to options issued pursuant to
the Amended and Restated Walnut Financial Services, Inc. 1994 Stock
Incentive Plan (the "1994 Plan") on September 12, 1997.
2
<PAGE>
(9) Represents shares of Common Stock subject to options issued pursuant to
the 1994 Plan on January 2, 1996.
(10) Represents an aggregate of 17,762 shares of Common Stock subject to
options issued pursuant to the Walnut Capital Corporation 1987 Stock
Option Plan (the "1987 Plan") on September 7, 1994, and an aggregate of
5,588 shares of Common Stock subject to options issued pursuant to the
1987 Plan on September 7, 1996.
3
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The Registrant hereby incorporates by reference in this Registration
Statement the following documents:
(1) The Company's Annual Report on Form NT10-K for the fiscal year
ended December 31, 1998, filed March 30, 1999 pursuant to Section 13(a) of the
Securities Exchange Act of 1934 (the "Exchange Act");
(2) The Company's Annual Report on Form 10-K405 for the fiscal year
ended December 31, 1998, filed April 15, 1999 pursuant to Section 13(a) of the
Exchange Act;
(3) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1999, filed May 17, 1999 pursuant to Section 13(a) of the
Exchange Act;
(4) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended June 30, 1999, filed August 16, 1999 pursuant to Section 13(a) of the
Exchange Act;
(5) The Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended September 30, 1999, filed October 29, 1999 pursuant to Section 13(a) of
the Exchange Act;
(6) The Company's Current Report on Form 8-K, filed February 1, 1999
pursuant to Section 13 or 15(d) of the Exchange Act;
(7) The Company's Current Report on Form 8-K, filed August 6, 1999
pursuant to Section 13 or 15(d) of the Exchange Act;
(8) The Company's Current Report on Form 8-K, filed November 10, 1999
pursuant to Section 13 or 15(d) of the Exchange Act;
(9) The Company's Current Report on Form 8-K, filed January 6, 2000
pursuant to Section 13 or 15(d) of the Exchange Act;
(10) The Company's Current Report on Form 8-K/A, filed January 14, 2000
pursuant to Section 13 or 15(d) of the Exchange Act;
(11) The Company's Current Report on Form 8-K/A, filed March 13, 2000
pursuant to Section 13 or 15(d) of the Exchange Act;
(12) The Company's Registration Statement on Form 10, filed pursuant to
Section 12(g) of the Exchange Act, which contains a description of the Company's
Common Stock, including any amendment or report filed for the purpose of
updating such description; and
(13) All documents subsequently filed by the Company with the SEC
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the
filing of a post-effective amendment to the Registration Statement which
indicates that all securities offered hereby have been sold or which deregisters
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
Not applicable.
4
<PAGE>
Item 6. Indemnification of Directors and Officers.
Reference is made to Section 16-10a-841 of the Utah Revised Business
Corporation Act (the "URBCA"), which permits a corporation in its articles of
incorporation or in its bylaws to eliminate or limit the personal liability of a
director to the corporation or to its shareholders for any actions taken or any
failure to take any action as a director, except for (a) the amount of a
financial benefit received by a director to which he is not entitled; (b) an
intentional infliction of harm on the corporation or the shareholders; (c) a
violation of Section 16-10a-842 (providing for liability of directors for
unlawful distributions to shareholders); or (d) an intentional violation of
criminal law. The Registrant's Articles of Amendment and Restatement contain
provisions permitted by Section 16-10a-841 of the URBCA.
Reference is made to Sections 16-10a-902 and 16-10a-907 of the URBCA,
which provide that a corporation may indemnify an individual made a party to a
proceeding because he is or was a director, against liability incurred in the
proceeding if (a) his conduct was in good faith; (b) he reasonably believed that
his conduct was in, or not opposed to, the corporation's best interests; and (c)
in the case of any criminal proceeding, he had no reasonable cause to believe
his conduct was unlawful. A director's conduct with respect to any employee
benefit plan for a purpose he reasonably believed to be in or not opposed to the
interests of the participants in and beneficiaries of the plan is conduct that
satisfies the requirement of clause (b) in the preceding sentence. The
termination of a proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendre is not by itself determinative that the individual did
not meet the standard of conduct required for indemnification. A corporation may
not indemnify a director: (a) in connection with a proceeding by or in the right
of the corporation in which the director was adjudged liable to the corporation;
or (b) in connection with any other proceeding charging that the director
derived an improper personal benefit, whether or not involving action in his
official capacity, in which proceeding he was adjudged liable on the basis that
he derived an improper personal benefit. Indemnification permitted under these
sections of the URBCA in connection with a proceeding by or in the right of a
corporation is limited to reasonable expenses incurred in connection with the
proceeding.
Reference is made to Section 16-10a-907 of the URBCA, which provides
that a corporation may indemnify an officer of the corporation to the same
extent as a director and, with respect to an officer who is not a director, to a
greater extent if not inconsistent with public policy.
The Registrant's Articles of Amendment and Restatement and Amended and
Restated By-laws provide for the indemnification of directors and officers of
the Registrant to the fullest extent permitted by the URBCA.
The Registrant maintains liability insurance for each director and
officer for certain losses arising from claims or charges made against them
while acting in their capacities as directors or officers of the Registrant.
Section 4 of the Plan provides that the Registrant shall indemnify each
member of the Committee and any other director or employee of the Company to
whom any duty or power relating to the administration or interpretation of the
Plan has been delegated against any costs or expenses arising out of such
activities, except where the individual acted in bad faith and without
reasonable belief that it was in the best interests of the Company.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
---------
Exhibit Number Description
-------------- -----------
4.1 Articles of Amendment and Restatement of the
Registrant.
4.2 Amended and Restated By-laws of the Registrant.
5 Opinion of Stoel Rives LLP regarding legality of
securities being registered (including consent).
5
<PAGE>
23.1 Consent of BDO Seldman, LLP
23.2 Consent of Cohen & Schaeffer, P.C.
23.3 Consent of Richard A. Eisner & Company, LLP
23.4 Consent of Stoel Rives LLP (see Exhibit Number 5
above).
Item 9. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 (the "Securities Act"), each such post-effective
amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at the time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on this 22nd day of
March, 2000.
THCG, INC.
By: /s/ Joseph D. Mark
-----------------------------------
Name: Joseph D. Mark
Title: Co-Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title(s) Date
--------- -------- ----
/s/ Joseph D. Mark Co-Chief Executive March 22, 2000
- --------------------- Officer and Director
Joseph D. Mark
/s/ Adi Raviv Co-Chief Executive March 22, 2000
- --------------------- Officer and Director
Adi Raviv
/s/ Shai Novik Chief Financial Officer March 22, 2000
- ---------------------
Shai Novik
/s/ Keith Abell Director March 22, 2000
- ---------------------
Keith Abell
/s/ Gene E. Burleson Director March 22, 2000
- ---------------------
Gene E. Burleson
/s/ Burton W. Kanter Director March 22, 2000
- ---------------------
Burton W. Kanter
/s/ Joel S. Kanter Director March 22, 2000
- ---------------------
Joel S. Kanter
/s/ Henry Klein Director March 22, 2000
- ----------------------
Henry Klein
/s/ Evan Marks Director March 22, 2000
- ----------------------
Evan Marks
/s/ Larry Smith Director March 22, 2000
- ----------------------
Larry Smith
/s/ Stanley B. Stern Director March 22, 2000
- -----------------------
Stanley B. Stern
7
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on March 22nd, 2000.
The 2000 THCG, Inc. Stock Incentive Plan
By: /s/ Adi Raviv
----------------------------------
Name: Adi Raviv
Title: Co-Chief Executive Officer
2000 THCG, Inc. Employee Stock Purchase Plan
By: /s/ Adi Raviv
---------------------------------
Name: Adi Raviv
Title: Co-Chief Executive Officer
The 1999 Walnut Financial Services, Inc.
Stock Incentive Plan
By: /s/ Adi Raviv
---------------------------------
Name: Adi Raviv
Title: Co-Chief Executive Officer
Amended and Restated 1994 Walnut
Financial Services, Inc.
Stock Incentive Plan
By: /s/ Adi Raviv
---------------------------------
Name: Adi Raviv
Title: Co-Chief Executive Officer
Walnut Capital Corporation 1987 Stock
Option Plan
By: /s/ Adi Raviv
--------------------------------
Name: Adi Raviv
Title: Co-Chief Executive Officer
8
<PAGE>
EXHIBIT INDEX
Exhibit Number Description
-------------- -----------
4.1 Articles of Amendment and Restatement of the
Registrant.
4.2 Amended and Restated By-laws of the Registrant.
5 Opinion of Stoel Rives LLP regarding legality of
securities being registered (including consent).
23.1 Consent of BDO Seldman, LLP
23.2 Consent of Cohen & Schaeffer, P.C.
23.3 Consent of Richard A. Eisner & Company, LLP
23.4 Consent of Stoel Rives LLP (see Exhibit Number 5
above).
9
Exhibit 4.1
ARTICLES OF AMENDMENT AND RESTATEMENT
OF
WALNUT FINANCIAL SERVICES, INC.
Pursuant to Section 16-10a-1007 of the Utah Revised Business
Corporation Act (the "URBCA"), the undersigned corporation adopts the following
Articles of Amendment and Restatement by stating as follows:
1. The present name of the corporation is Walnut Financial Services,
Inc.
2. The following amendment and restatement of its Articles of
Incorporation was approved by the Board of Directors for submission to the
stockholders of the corporation, and was adopted by the shareholders of the
corporation at a meeting duly held on November 1, 1999, in the manner prescribed
by the URBCA.
FIRST: The name of the Corporation will be changed to THCG, Inc. (the
"Corporation").
SECOND: The address of the Corporation's present registered office in
the State of Utah and name of its present registered agent at such office is:
Name of Registered Agent Address of Registered Agent
------------------------ ---------------------------
CT Corporation Sys. 50 W. Broadway, 8th Floor
Salt Lake City, Utah 84101
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the URBCA.
FOURTH: The total number of shares of all classes of stock which the
Corporation is authorized to issue is 55,000,000 shares, of which 50,000,000
shall be designated Common Stock, par value $0.01 per share, and 5,000,000 shall
be designated Preferred Stock, par value $0.01 per share.
(a) The Common Stock:
The holders of Common Stock shall be entitled to one
vote for each share so held (with all such shares voting together as a single
group), and shall be entitled to notice of any stockholders meeting and to vote
upon any such matters as provided in the by-laws of the Corporation or as may be
provided by law. Except for and subject to those rights expressly granted to
holders of Preferred Stock, and except as may be provided by the laws of the
State of Utah, the holders of Common Stock shall have all other rights of
stockholders, including, without limitation, (i) the right to receive dividends,
when, as and if declared by the Board of Directors of the Corporation, out of
assets lawfully available therefor, and (ii) in the event of any distribution of
assets upon a liquidation or otherwise, the right to receive all the assets and
funds of the Corporation, remaining after the payment to the holders of the
Preferred Stock, if any, of the specific amounts which they are entitled to
receive upon such distribution.
(b) The Preferred Stock:
The Board of Directors is hereby expressly authorized
to provide for, designate and issue, out of the authorized but unissued shares
of Preferred Stock, one or more series of Preferred Stock, subject to the terms
and conditions set forth herein. Before any shares of any such series are
issued, the Board of Directors shall fix, and hereby is expressly empowered to
fix, by resolution or resolutions, the following provisions of the shares of any
such series:
<PAGE>
(i) the designation of such series, the number of
shares to constitute such series and the stated value thereof, if different from
the par value thereof;
(ii) whether the shares of such series shall have
voting rights or powers, in addition to any voting rights required by law, and,
if so, the terms of such voting rights or powers, which may be full or limited;
(iii) the dividends, if any, payable on such series,
whether any such dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable, and the
preference or relation which such dividends shall bear to the dividends payable
on any other series of Preferred Stock or on any other class of stock, of the
Corporation or any series of such class;
(iv) whether the shares of such series shall be
subject to redemption by the Corporation, and, if so, the times, prices and
other conditions of such redemption;
(v) the amount or amounts payable upon shares of
such series upon, and the rights of the holders of such series in, the voluntary
or involuntary liquidation, dissolution or winding up, or upon any distribution
of the assets, of the Corporation;
(vi) whether the shares of such series shall be
subject to the operation of a retirement or sinking fund and, if so, the extent
to and manner in which any such retirement or sinking fund shall be applied to
the purchase or redemption of the shares of such series for retirement or other
corporate purposes and the terms and provisions relative to the operation
thereof;
(vii) whether the shares of such series shall be
convertible into, or exchangeable for, shares of Preferred Stock of any other
series or any other class of stock of the Corporation or any series of such
class or any other securities and, if so, the price or prices or the rate or
rates of conversion or exchange and the method, if any, of adjusting the same,
and any other terms and conditions of such conversion or exchange;
(viii) the limitations and restrictions, if any, to
be effective while any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the purchase,
redemption or other acquisition by the Corporation of, the Common Stock or
shares of Preferred Stock of any other series or any other class of stock of the
Corporation or any series of such class;
(ix) the conditions or restrictions, if any, to be
effective while any shares of such series are outstanding upon the creation of
indebtedness of the Corporation or upon the issuance of any additional stock,
including additional shares of such series or of any other series of the
Preferred Stock or of any class of stock of the Corporation or any series of
such class; and
(x) any other powers, designations, preferences and
relative, participating, optional or other special rights, and any
qualifications, limitations or restrictions thereof.
The powers, designations, preferences and relative, participating,
optional or other special rights of each series of Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may differ from
those of any and all other series at any time outstanding. The Board of
Directors is hereby expressly authorized from time to time to increase (but not
above the total number of authorized shares of Preferred Stock) or decrease (but
not below the number of shares thereof then outstanding) the number of shares of
stock of any series of Preferred Stock designated as any one or more series of
Preferred Stock.
FIFTH: (a) The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors except as
otherwise provided herein, in the by-laws of the Corporation or required by law.
(b) Election of directors need not be by written
ballot unless the by-laws of the Corporation shall so provide.
(c) The number of directors of the Corporation shall
be fixed by, or in the manner provided in, the by-
<PAGE>
laws of the Corporation. Commencing on the effective time of the merger (the
"Merger") of Tower Hill Acquisition Corp., a New York corporation and a
wholly-owned subsidiary of the Corporation, with and into Tower Hill Securities,
Inc., a New York corporation, the directors, other than those who may be elected
by the holders of any series of Preferred Stock, shall be classified, with
respect to the term for which they severally hold office, into three classes, as
nearly equal in number as possible. The initial Class I, II and III directors
shall be appointed by the Board of Directors upon the effective time of the
Merger. The initial Class I directors shall serve until the first annual meeting
of stockholders after the Merger. The initial Class II directors shall serve
until the second annual meeting of stockholders after the Merger. The initial
Class III directors shall serve until the third annual meeting of stockholders
after the Merger. Members of each class shall hold office until their successors
are duly elected and qualified or until their earlier death, disqualification,
resignation or removal. At each succeeding annual meeting of the stockholders of
the Corporation, the successors of the class of directors whose term expires at
that meeting shall be elected by a plurality vote of all votes cast at such
meeting to hold office for a term expiring at the annual meeting of stockholders
held in the third year following the year of their election and until their
successors are duly elected and qualified or until their earlier death,
disqualification, resignation or removal.
(d) No director of the Corporation shall be
removed from his office as a director by vote, consent or other action of the
stockholders or otherwise except for cause.
SIXTH: Any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called annual or special meeting
of the stockholders and may not be effected by a consent in writing by any such
stockholders.
SEVENTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 16-10a-842 of the URBCA, or (iv)
for any transaction from which the director derived any improper personal
benefit. If the URBCA is amended after the date hereof to authorize corporate
action further eliminating or limiting the personal liability of directors, then
the liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the URBCA, as so amended. No amendment to or
repeal of this Article EIGHTH shall apply to or have any effect on the liability
or alleged liability of any director of the Corporation for or with respect to
any acts or omissions of such director occurring prior to such amendment.
EIGHTH: (a) The Corporation shall to the fullest extent permitted by
Utah law, as in effect from time to time (but in case of any amendment of the
URBCA, only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than said law permitted the Corporation to
provide prior to such amendment), indemnify each person who is or was a director
of officer of the Corporation (or any predecessor) or of any of its wholly-owned
subsidiaries who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, or was or is
involved in any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director,
officer, employee or agent of the Corporation or of any of its subsidiaries, or
is or was at any time serving, at the request of the Corporation, any other
corporation, partnership, limited liability company, joint venture, trust,
employee benefit plan or other enterprise in any capacity, against all expense,
liability and loss (including, but not limited to, attorneys' fees, judgments,
fines, excise taxes or penalties with respect to any employee benefit plan or
otherwise, and amounts paid or to be paid in settlement) incurred or suffered by
such director or officer in connection with such proceeding; provided, however,
that the Corporation shall not be obligated to indemnify any person under this
Article NINTH in connection with a proceeding (or part thereof) if such
proceeding (or part thereof) was initiated by such person, but was not
authorized by the Board of Directors of the Corporation against (i) the
Corporation or any of its subsidiaries; (ii) any person who is or was a
director, officer, employee or agent of the Corporation or any of its
subsidiaries and/or (iii) any person or entity which is or was controlled,
controlled by or under common control with the Corporation or has or had
business relations with the Corporation or any of its subsidiaries.
(b) Expenses incurred by a person who is or was a director or
officer of the Corporation (or any predecessor) or any of its wholly-owned
Subsidiaries in defending a proceeding shall be paid by the Corporation as they
are incurred in advance of the final disposition of such proceeding upon receipt
of an
<PAGE>
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he or she is not entitled to be
indemnified by the Corporation. Such expenses incurred by former directors or
other employees or agents of the Corporation may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.
(c) For purposes of this Article NINTH, the term "Corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed by the
Corporation in a consolidation or merger; the term "other enterprise" shall
include any corporation, partnership, joint venture, limited liability company,
trust or employee benefit plan; service "at the request of the Corporation"
shall include, without limitation, service as a director, officer or employee of
the Corporation which imposes duties on, or involves service by, such director,
officer or employee with respect to an employee benefit plan, its participants
or beneficiaries; any excise taxes assessed on a person with respect to an
employee benefit plan shall be deemed to be indemnifiable expenses; and action
by a person with respect to any employee benefit plan which such person
reasonably believes to be in the interest of the participants and beneficiaries
of such plan shall be deemed to be action in or not opposed to the best
interests of the Corporation.
(d) Notwithstanding any other provision of this Certificate of
Incorporation or the by-laws of the Corporation, no action by the Corporation,
either by amendment to or repeal of this Article NINTH or the by-laws of the
Corporation or otherwise shall diminish or adversely affect any right or
protection granted under this Article NINTH to any director or officer or former
director or officer of the Corporation (or any predecessor) or of any of its
wholly-owned subsidiaries which shall have become vested as aforesaid prior to
the date that any such amendment, repeal or other corporate action is taken.
NINTH: (a) Except as provided otherwise by law or the by-laws of the
Corporation, the by-laws of the Corporation may be amended or repealed or new
by-laws (not inconsistent with any provision of law or this Certificate of
Incorporation) may be adopted by the Board of Directors.
(b) The by-laws of the Corporation may be amended or repealed
at any annual meeting of stockholders, or special meeting of stockholders called
for such purpose, by the affirmative vote of a majority of the total votes
eligible to be cast on such amendment or repeal by holders of voting stock,
voting together as a single class.
3. At the time of the adoption of this Restatement of Articles of
Incorporation, there were a total of 3,350,533 shares of Common Stock
outstanding, all of which shares were entitled to vote on this Restatement of
Articles of Incorporation. Holders of 2,521,266 shares were indisputably
represented at the meeting.
4. At least 2,490,195 shares were voted for this Restatement of
Articles of Incorporation, and that number was sufficient for its approval.
Dated as of the 1st day of November, 1999.
WALNUT FINANCIAL SERVICES, INC.
By: /s/ Joel S. Kanter
--------------------------
Joel S. Kanter, President
ATTEST:
/s/ Joshua S. Kanter
- ---------------------------
Joshua S. Kanter, Secretary
<PAGE>
ACKNOWLEDGMENT OF REGISTERED AGENT
The undersigned, CT Corporation System, hereby acknowledges that he/she
has been named as registered agent of THCG, INC., a Utah corporation (formerly
known as Walnut Financial Services, Inc.), and the undersigned hereby agrees to
act as registered agent of said corporation.
CT Corporation System
Name: /s/ Anne E. Diamond, Asst Secretary
------------------------------------
Registered Agent
Exhibit 4.2
AMENDED AND RESTATED
BY-LAWS
OF
THCG, INC.
(formerly known as Walnut Financial Services, Inc.)
ARTICLE I
Stockholders
SECTION 1. Annual Meeting. The annual meeting of stockholders
shall be held at the hour, date and place within or without the United States
which is fixed by the Board of Directors or an officer designated by the Board
of Directors, which time, date and place may subsequently be changed at any time
by vote of the Board of Directors or by such officer so designated.
SECTION 2. Matters to be Considered at Annual Meetings. At any
annual meeting or special meeting of stockholders in lieu thereof (the "Annual
Meeting"), only such business shall be conducted, and only such proposals shall
be acted upon, as shall have been properly brought before such Annual Meeting.
To be considered as properly brought before an Annual Meeting, business must be:
(a) specified in the notice of meeting, (b) otherwise properly brought before
the meeting by, or at the direction of, the Board of Directors, or (c) otherwise
properly brought before the meeting by any holder of record (both as of the time
notice of such proposal is given by the stockholder as set forth below and as of
the record date for the Annual Meeting in question) of any shares of capital
stock of the Corporation entitled to vote at such Annual Meeting on such
business who complies with the requirements set forth in this Section 2.
In addition to any other applicable requirements, for business
to be properly brought before an Annual Meeting by a stockholder of record of
any shares of capital stock entitled to vote at such Annual Meeting, such
stockholder shall: (i) give timely notice as required by this Section 2 to the
Secretary of the Corporation, and (ii) be present at such meeting, either in
person or by a representative. For the first Annual Meeting following the merger
(the "Merger") of Tower Hill Acquisition Corp., a New York corporation and a
wholly-owned subsidiary of the Corporation, with and into Tower Hill Securities,
Inc., a New York corporation, a stockholder's notice shall be timely if
delivered to, or mailed to and received by, the Corporation at its principal
executive office not later than the close of business on the later of (A) the
75th day prior to the scheduled date of such Annual Meeting or (B) the 15th day
following the day on which public announcement of the date of such Annual
Meeting is first made by the Corporation. For all subsequent Annual Meetings, a
stockholder's notice shall be timely if delivered to, or mailed to and received
by, the Corporation at its principal executive office not less than 75 days nor
more than 120 days prior to the anniversary date of the immediately preceding
Annual Meeting (the "Anniversary Date"); provided, however, that in the event
the Annual Meeting is scheduled to be held on a date more than 30 days before
the Anniversary Date or more than 60 days after the Anniversary Date, a
stockholder's notice shall be timely if delivered to, or mailed to and received
by, the Corporation at its principal executive office not later than the close
of business on the later of (A) the 75th day prior to the scheduled date of such
Annual Meeting, or (B) the 15th day following the day on which public
announcement of the date of such Annual Meeting is first made by the
Corporation.
For purposes of these By-Laws, "public announcement" shall
mean: (i) disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service, (ii) a report or other
document filed publicly with the Securities and Exchange Commission (including,
without limitation, a Current Report on Form 8-K), or (iii) a letter or report
sent to stockholders of record of the Corporation at the close of business on
the day of the mailing of such letter or report.
<PAGE>
A stockholder's notice to the Secretary shall set forth as to
each matter proposed to be brought before an Annual Meeting: (i) a brief
description of the business the stockholder desires to bring before such Annual
Meeting and the reasons for conducting such business at such Annual Meeting,
(ii) the name and address, as they appear on the Corporation's stock transfer
books, of the stockholder proposing such business, (iii) the class and number of
shares of the Corporation's capital stock beneficially owned by the stockholder
proposing such business, (iv) the names and addresses of the beneficial owners,
if any, of any capital stock of the Corporation registered in such stockholder's
name on such books, and the class and number of shares of the Corporation's
capital stock beneficially owned by such beneficial owners, (v) the names and
addresses of other stockholders known by the stockholder proposing such business
to support such proposal, and the class and number of shares of the
Corporation's capital stock beneficially owned by such other stockholders, and
(vi) any material interest of the stockholder proposing to bring such business
before such meeting (or any other stockholders known to be supporting such
proposal) in such proposal.
If the Board of Directors or a designated committee thereof
determines that any stockholder proposal was not made in a timely fashion in
accordance with the provisions of this Section 2 or that the information
provided in a stockholder's notice does not satisfy the information requirements
of this Section 2 in any material respect, such proposal shall not be presented
for action at the Annual Meeting in question. If neither the Board of Directors
nor such committee makes a determination as to the validity of any stockholder
proposal in the manner set forth above, the presiding officer of the Annual
Meeting shall determine whether the stockholder proposal was made in accordance
with the terms of this Section 2. If the presiding officer determines that any
stockholder proposal was not made in a timely fashion in accordance with the
provisions of this Section 2 or that the information provided in a stockholder's
notice does not satisfy the information requirements of this Section 2 in any
material respect, such proposal shall not be presented for action at the Annual
Meeting in question. If the Board of Directors, a designated committee thereof
or the presiding officer determines that a stockholder proposal was made in
accordance with the requirements of this Section 2, the presiding officer shall
so declare at the Annual Meeting and ballots shall be provided for use at the
meeting with respect to such proposal.
Notwithstanding the foregoing provisions of these By-Laws, a
stockholder shall also comply with all applicable requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder with respect to the matters set forth in this By-Law, and
nothing in this By-Law shall be deemed to affect any rights of stockholders to
request inclusion of proposals in the Corporation's proxy statement, or the
Corporation's right to refuse inclusion thereof, pursuant to Rule 14a-8 under
the Exchange Act.
SECTION 3. Special Meetings. Except as otherwise permitted by
law, special meetings of the stockholders of the Corporation may be called only
by the Chief Executive Officer of the Corporation or the Board of Directors
pursuant to a resolution approved by the affirmative vote of a majority of the
Directors then in office.
SECTION 4. Matters to be Considered at Special Meetings. Only
those matters set forth in the notice of the special meeting may be considered
or acted upon at a special meeting of stockholders of the Corporation, unless
otherwise provided by law.
SECTION 5. Notice of Meetings; Adjournments. A written notice
of all Annual Meetings stating the hour, date and place of such Annual Meetings
shall be given by the Secretary (or other person authorized by these By-Laws or
by law) not less than 10 days nor more than 60 days before the Annual Meeting,
to each stockholder entitled to vote thereat and to each stockholder who, by law
or under the Articles of Incorporation of the Corporation ("Articles of
Incorporation") or under these By-Laws, is entitled to such notice, by
delivering such notice to him or by mailing it, postage prepaid, addressed to
such stockholder at the address of such stockholder as it appears on the
Corporation's stock transfer books. Such notice shall be deemed to be delivered
when hand delivered to such address or deposited in the mail so addressed, with
postage prepaid.
Notice of all special meetings of stockholders shall be given
in the same manner as provided for Annual Meetings, except that the written
notice of all special meetings shall state the purpose or purposes for which the
meeting has been called.
<PAGE>
Notice of an Annual Meeting or special meeting of stockholders
need not be given to a stockholder if a written waiver of notice is signed
before or after such meeting by such stockholder or if such stockholder attends
such meeting, unless such attendance was for the express purpose of objecting at
the beginning of the meeting to the transaction of any business because the
meeting was not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any Annual Meeting or special meeting of
stockholders need be specified in any written waiver of notice.
The Board of Directors may postpone and reschedule any
previously scheduled Annual Meeting or special meeting of stockholders and any
record date with respect thereto, regardless of whether any notice or public
disclosure with respect to any such meeting has been sent or made pursuant to
Section 2 of this Article I or Section 3 of Article II of these By-Laws or
otherwise. In no event shall the public announcement of an adjournment,
postponement or rescheduling of any previously scheduled meeting of stockholders
commence a new time period for the giving of a stockholder's notice under
Section 2 of this Article I or Section 3 of Article II of these By-Laws.
When any meeting is convened, the presiding officer may
adjourn the meeting if (a) no quorum is present for the transaction of business,
(b) the Board of Directors determines that adjournment is necessary or
appropriate to enable the stockholders to consider fully information which the
Board of Directors determines has not been made sufficiently or timely available
to stockholders, or (c) the Board of Directors determines that adjournment is
otherwise in the best interests of the Corporation. When any Annual Meeting or
special meeting of stockholders is adjourned to another hour, date or place,
notice need not be given of the adjourned meeting other than an announcement at
the meeting at which the adjournment is taken of the hour, date and place to
which the meeting is adjourned; provided, however, that if the adjournment is
for more than 30 days, or if after the adjournment a new record date is fixed
for the adjourned meeting, notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote thereat and each stockholder who, by
law or under the Articles of Incorporation or under these By-Laws, is entitled
to such notice.
SECTION 6. Quorum. The holders of shares of voting stock
representing a majority of the voting power of the outstanding shares of voting
stock issued, outstanding and entitled to vote at a meeting of stockholders,
represented in person or by proxy at such meeting, shall constitute a quorum;
but if less than a quorum is present at a meeting, the holders of voting stock
representing a majority of the voting power present at the meeting or the
presiding officer may adjourn the meeting from time to time, and the meeting may
be held as adjourned without further notice, except as provided in Section 5 of
this Article I. At such adjourned meeting at which a quorum is present, any
business may be transacted which might have been transacted at the meeting as
originally noticed. The stockholders present at a duly constituted meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
SECTION 7. Voting and Proxies. Stockholders shall have one
vote for each share of stock entitled to vote owned by them of record according
to the books of the Corporation, unless otherwise provided by law or by the
Articles of Incorporation. Stockholders may vote either in person or by written
proxy, but no proxy shall be voted or acted upon after eleven months from its
date, unless the proxy provides for a longer period. Proxies shall be filed with
the Secretary of the meeting before being voted. Except as otherwise limited
therein or as otherwise provided by law, proxies shall entitle the persons
authorized thereby to vote at any adjournment of such meeting. A proxy with
respect to stock held in the name of two or more persons shall be valid if
executed by or on behalf of any one of them unless at or prior to the exercise
of the proxy the Corporation receives a specific written notice to the contrary
from any one of them. A proxy purporting to be executed by or on behalf of a
stockholder shall be deemed valid, and the burden of proving invalidity shall
rest on the challenger.
SECTION 8. Action at Meeting. When a quorum is present, any
matter properly brought before any meeting of stockholders shall be decided by
the vote of a majority of the voting power of shares of voting stock present in
person or represented by proxy at such meeting and entitled to vote on such
matter, except where a larger vote is required by law, by the Articles of
Incorporation or by these By-Laws. Any election of Directors by stockholders
shall be determined by a plurality of the votes cast, except where a larger vote
is required by law, by the Articles of Incorporation or by these By-Laws. The
Corporation shall not directly or indirectly vote any shares of its own stock;
provided, however, that the Corporation may vote shares which it holds in a
fiduciary capacity to the extent permitted by law.
<PAGE>
SECTION 9. Stockholder Lists. The Secretary (or the
Corporation's transfer agent or other person authorized by these By-Laws or by
law) shall prepare and make a complete list of the stockholders entitled to vote
at the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
The list shall be made on the earlier of ten days before the meeting for which
the list was prepared or two days after notice of the meeting was given. Such
list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period beginning
on the date the list is made pursuant to the foregoing sentence and continuing
through the meeting and any meeting adjournments, either at a place within the
city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held.
SECTION 10. Presiding Officer. The Chairman of the Board or if
there is no Chairman of the Board, or in his absence, one of the Co-Chief
Executive Officers of the Corporation or, in their absence, such other officer
as shall be designated by the Board of Directors shall preside at all Annual
Meetings or special meetings of stockholders and shall have the power, among
other things, to adjourn such meeting at any time and from time to time, subject
to Sections 5 and 6 of this Article I. The order of business and all other
matters of procedure at any meeting of the stockholders shall be determined by
the presiding officer.
SECTION 11. Voting Procedures and Inspectors of Elections. The
Corporation shall, in advance of, or at, any meeting of stockholders, appoint
one or more inspectors to act at the meeting and make a written report thereof.
The Corporation may designate one or more persons as alternate inspectors to
replace any inspector who fails to act. If no inspector or alternate is able to
act at a meeting of stockholders, the presiding officer shall appoint one or
more inspectors to act at the meeting. Any inspector may, but need not, be an
officer, employee or agent of the Corporation. Each inspector, before entering
upon the discharge of his duties, shall take and sign an oath faithfully to
execute the duties of inspector with strict impartiality and according to the
best of his or her ability. The inspectors shall perform such duties as
circumstances reasonably require, including the counting of all votes and
ballots. The inspectors may appoint or retain other persons or entities to
assist the inspectors in the performance of the duties of the inspectors. The
presiding officer may review all determinations made by the inspector(s), and in
so doing the presiding officer shall be entitled to exercise his or her sole
judgment and discretion and he or she shall not be bound by any determinations
made by the inspector(s). All determinations by the inspector(s) and, if
applicable, the presiding officer shall be subject to further review by any
court of competent jurisdiction.
SECTION 12. No Action by Written Consent. Any action required
or permitted to be taken by the stockholders of the Corporation must be effected
at a duly called annual or special meeting of the stockholders and may not be
effected by a consent in writing by any such stockholders.
ARTICLE II
Directors
SECTION 1. Powers. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors except as
otherwise provided by the Articles of Incorporation or required by law.
SECTION 2. Number and Terms. The number of Directors
constituting the entire Board of Directors of the Corporation shall not be less
than 3 nor more than 12 as fixed by resolution duly adopted from time to time by
the Board of Directors.
Commencing on the effective time of the Merger, the Directors
shall be classified, with respect to the term for which they severally hold
office, into three classes, as nearly equal in number as possible. The initial
Class I, II and III Directors shall be appointed by the Board of Directors upon
the effective time of the Merger. The initial Class I Directors shall serve
until the first Annual Meeting after the Merger. The initial Class II Directors
shall serve until the second Annual Meeting after the Merger. The initial Class
III Directors shall serve until the third Annual Meeting after the Merger.
Members of each class shall hold office until their successors are duly elected
and qualified or until their earlier death, disqualification, resignation or
removal. At each succeeding Annual Meeting, the successors of the class of
Directors whose term expires at that meeting shall be elected by a plurality
<PAGE>
vote of all votes cast at such meeting to hold office for a term expiring at the
Annual Meeting held in the third year following the year of their election.
SECTION 3. Director Nominations. Nominations of candidates for
election as Directors of the Corporation at any Annual Meeting may be made only
(a) by, or at the direction of, the Board of Directors or (b) by any holder of
record (both as of the time notice of such nomination is given by the
stockholder as set forth below and as of the record date for the Annual Meeting
in question) of any shares of the capital stock of the Corporation entitled to
vote for the election of Directors at such Annual Meeting who complies with the
timing, informational and other requirements set forth in this Section 3. Any
stockholder who seeks to make such a nomination or his representative must be
present in person at the Annual Meeting. Only persons nominated in accordance
with the procedures set forth in this Section 3 shall be eligible for election
as Directors at an Annual Meeting.
Nominations, other than those made by, or at the direction of,
the Board of Directors, shall be made pursuant to timely notice in writing to
the Secretary of the Corporation as set forth in this Section 3. For the first
Annual Meeting following the Merger, a stockholder's notice shall be timely if
delivered to, or mailed to and received by, the Corporation at its principal
executive office not later than the close of business on the later of (A) the
75th day prior to the scheduled date of such Annual Meeting or (B) the 15th day
following the day on which public announcement of the date of such Annual
Meeting is first made by the Corporation. For all subsequent Annual Meetings, a
stockholder's notice shall be timely if delivered to, or mailed to and received
by, the Corporation at its principal executive office not less than 75 days nor
more than 120 days prior to the Anniversary Date; provided, however, that in the
event the Annual Meeting is scheduled to be held on a date more than 30 days
before the Anniversary Date or more than 60 days after the Anniversary Date, a
stockholder's notice shall be timely if delivered to, or mailed and received by,
the Corporation at its principal executive office not later than the close of
business on the later of (i) the 75th day prior to the scheduled date of such
Annual Meeting or (ii) the 15th day following the day on which public
announcement of the date of such Annual Meeting is first made by the
Corporation.
A stockholder's notice to the Secretary shall set forth as to
each person whom the stockholder proposes to nominate for election or
re-election as a Director: (i) the name, age, business address and residence
address of such person, (ii) the principal occupation or employment of such
person, (iii) the class and number of shares of the Corporation's capital stock
which are beneficially owned by such person on the date of such stockholder
notice, (iv) the consent of each nominee to serve as a Director if elected, and
(v) such information concerning such person as is required to be disclosed
concerning a nominee for election as Director of the Corporation pursuant to the
rules and regulations under the Exchange Act. A stockholder's notice to the
Secretary shall further set forth as to the stockholder giving such notice: (i)
the name and address, as they appear on the Corporation's stock transfer books,
of such stockholder and of the beneficial owners (if any) of the Corporation's
capital stock registered in such stockholder's name and the name and address of
other stockholders known by such stockholder to be supporting such nominee(s),
(ii) the class and number of shares of the Corporation's capital stock which are
held of record, beneficially owned or represented by proxy by such stockholder
and by any other stockholders known by such stockholder to be supporting such
nominee(s) on the record date for the Annual Meeting in question (if such date
shall then have been made publicly available) and on the date of such
stockholder's notice, and (iii) a description of all arrangements or
understandings between such stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by such stockholder or in connection therewith.
If the Board of Directors or a designated committee thereof
determines that any stockholder nomination was not timely made in accordance
with the terms of this Section 3 or that the information provided in a
stockholder's notice does not satisfy the informational requirements of this
Section 3 in any material respect, then such nomination shall not be considered
at the Annual Meeting in question. If neither the Board of Directors nor such
committee makes a determination as to whether a nomination was made in
accordance with the provisions of this Section 3, the presiding officer of the
Annual Meeting shall determine whether a nomination was made in accordance with
such provisions. If the presiding officer determines that any stockholder
nomination was not timely made in accordance with the terms of this Section 3 or
that the information provided in a stockholder's notice does not satisfy the
information requirements of this Section 3 in any material respect, then such
nomination shall not be considered at the Annual Meeting in question. If the
Board of Directors, a designated committee thereof or the presiding officer
determines that a nomination was made in accordance with the terms of this
Section 3, the
<PAGE>
presiding officer shall so declare at the Annual Meeting and such nominee shall
be eligible for election at the meeting.
No person shall be elected by the stockholders as a Director
of the Corporation unless nominated in accordance with the procedures set forth
in this Section. Election of Directors at the Annual Meeting need not be by
written ballot, unless otherwise provided by the Board of Directors or the
presiding officer at such Annual Meeting. If written ballots are to be used,
ballots bearing the names of all the persons who have been nominated for
election as Directors at the Annual Meeting in accordance with the procedures
set forth in this Section shall be provided for use at the Annual Meeting.
SECTION 4. Qualification. No Director need be a stockholder of
the Corporation.
SECTION 5. Vacancies. Any and all vacancies occurring on the
Board of Directors, including, without limitation, any vacancy created by reason
of an increase in the number of Directors, or resulting from death, resignation,
disqualification, removal or any other cause, may be filled by the affirmative
vote of a majority of the remaining Directors then in office, even if such
remaining Directors constitute less than a quorum of the Board of Directors, or
if such vacancy is not so filled by the remaining Directors, by the stockholders
of the Corporation. Any Director appointed or elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
class of Directors in which the new directorship was created or the vacancy
occurred and until such Director's successor shall have been duly elected and
qualified or until his or her earlier death, disqualification, resignation or
removal. When the number of Directors is increased or decreased, the Board of
Directors shall determine the class or classes to which the increased or
decreased number of Directors shall be apportioned; provided, however, that no
decrease in the number of Directors shall shorten the term of any incumbent
Director unless such Director is removed as permitted in the Articles of
Incorporation. In the event of a vacancy in the Board of Directors, the
remaining Directors, except as otherwise provided by law, may exercise the
powers of the full Board of Directors until the vacancy is filled.
SECTION 6. Removal. Directors may be removed from office in
the manner provided in the Articles of Incorporation.
SECTION 7. Resignation. A Director may resign at any time by
giving written notice to the Corporation addressed to a Co-Chief Executive
Officer or the Secretary. A resignation shall be effective upon receipt, unless
the resignation otherwise provides, and need not be accepted by the Corporation.
SECTION 8. Regular Meetings. The regular annual meeting of the
Board of Directors shall be held, without notice other than this By-Law, on the
same date and at the same place as the Annual Meeting following the close of
such meeting of stockholders. Other regular meetings of the Board of Directors
may be held at such hour, date and place as the Board of Directors may by
resolution from time to time determine without notice other than such
resolution.
SECTION 9. Special Meetings. Special meetings of the Board of
Directors may be called, orally or in writing, by or at the request of a
majority of the Directors then in office or one of the co-Chief Executive
Officers of the Corporation. The person calling any such special meeting of the
Board of Directors may fix the hour, date and place thereof.
SECTION 10. Notice of Meetings. Notice of the hour, date and
place of all special meetings of the Board of Directors shall be given to each
Director by the Secretary or the person calling such meeting, or in case of the
death, absence, incapacity or refusal of such person, by a Co-Chief Executive
Officer of the Corporation or such other officer as shall be designated by the
Board of Directors. Notice of any special meeting of the Board of Directors
shall be given to each Director in person, by telephone, or by telex, telecopy
telegram, or other written form of electronic communication, sent to his
business or home address, at least 24 hours in advance of the meeting, or by
written notice sent by next-day delivery courier service to his business or home
address, at least 48 hours in advance of the meeting. Such notice shall be
deemed to be delivered when hand delivered to such address, read to such
Director by telephone, deposited in the mail so addressed, with postage thereon
prepaid if mailed, dispatched or
<PAGE>
transmitted if telexed, telecopied or effected by another written form of
electronic communication, or when delivered to the telegraph company if sent by
telegram.
When any Board of Directors meeting, either regular or
special, is adjourned for 30 days or more, notice of the adjourned meeting shall
be given as in the case of an original meeting. It shall not be necessary to
give any notice of the hour, date or place of any meeting adjourned for less
than 30 days or of the business to be transacted thereat, other than an
announcement at the meeting at which such adjournment is taken of the hour, date
and place to which the meeting is adjourned.
A written waiver of notice signed before or after a meeting by
a Director and filed with the records of the meeting shall be deemed to be
equivalent to notice of the meeting. The attendance of a Director at a meeting
shall constitute a waiver of notice of such meeting, except where a Director
attends a meeting for the express purpose of objecting at the beginning of the
meeting to the transaction of any business because such meeting is not lawfully
called or convened. Except as otherwise required by law, by the Articles of
Incorporation or by these By-Laws, neither the business to be transacted at, nor
the purpose of, any meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
SECTION 11. Quorum. At any meeting of the Board of Directors,
a majority of the Directors then in office (but in no event less than one-third
of the entire Board of Directors) shall constitute a quorum for the transaction
of business, but if less than a quorum is present at a meeting, a majority of
the Directors present may adjourn the meeting from time to time, and the meeting
may be held as adjourned without further notice, except as provided in Section
10 of this Article II. Any business which might have been transacted at the
meeting as originally noticed may be transacted at such adjourned meeting at
which a quorum is present.
SECTION 12. Action at Meeting. At any meeting of the Board of
Directors at which a quorum is present, a majority of the Directors present may
take any action on behalf of the Board of Directors, unless otherwise required
by law, by the Articles of Incorporation or by these By-Laws.
SECTION 13. Action by Consent. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if all members of the Board of Directors consent thereto in
writing. Such written consent shall be filed with the records of the meetings of
the Board of Directors and shall be treated for all purposes as a vote at a
meeting of the Board of Directors.
SECTION 14. Manner of Participation. Directors may participate
in meetings of the Board of Directors by means of conference telephone or
similar communications equipment by means of which all Directors participating
in the meeting can hear each other, and participation in a meeting in accordance
herewith shall constitute presence in person at such meeting for purposes of
these By-Laws.
SECTION 15. Committees. The Board of Directors, by vote of a
majority of the Directors then in office, may elect from its number, one or more
committees, including but not limited to, an Executive Committee, a Compensation
Committee and an Audit Committee, and may delegate thereto some or all of its
powers except those which by law, by the Articles of Incorporation or by these
By-Laws may not be delegated. Except as the Board of Directors may otherwise
determine, any such committee may make rules for the conduct of its business,
but unless otherwise provided by the Board of Directors or in such rules, its
business shall be conducted so far as possible in the same manner as is provided
by these By-Laws for the Board of Directors. All members of such committees
shall hold such offices at the pleasure of the Board of Directors. The Board of
Directors may abolish any such committee at any time. Any committee to which the
Board of Directors delegates any of its powers or duties shall keep records of
its meetings and shall report its action to the Board of Directors. The Board of
Directors shall have power to rescind any action of any committee, to the extent
permitted by law, but no such rescission shall have retroactive effect.
SECTION 16. Compensation of Directors. Directors shall receive
such compensation for their services as shall be determined by a majority of the
Directors then in office provided that Directors who are serving the Corporation
as employees and who receive compensation for their services as such shall not
receive any salary or other compensation for their services as Directors of the
Corporation.
<PAGE>
ARTICLE III
Officers
SECTION 1. Enumeration. The officers of the Corporation shall
consist of Co-Chief Executive Officers, a Chief Operating Officer, a Chief
Financial Officer, a Secretary and such other officers, including, without
limitation, a Treasurer, a Chairman of the Board and one or more Vice-Chairmen
of the Board, Vice-Presidents (including Executive Vice Presidents or Senior
Vice Presidents), Assistant Vice Presidents, Assistant Treasurers and Assistant
Secretaries, as the Board of Directors may determine.
SECTION 2. Election. At the regular annual meeting of the
Board following the Annual Meeting, the Board of Directors shall elect the
Co-Chief Executive Officers, the Chief Operating Officer, the Chief Financial
Officer and the Secretary. Other officers may be elected or appointed by the
Board of Directors at such regular annual meeting of the Board of Directors or
at any other regular or special meeting.
SECTION 3. Qualification. No officer need be a stockholder or
a Director. Any person may occupy more than one office of the Corporation at any
time. Any officer may be required by the Board of Directors to give bond for the
faithful performance of his duties in such amount and with such sureties as the
Board of Directors may determine.
SECTION 4. Tenure. Except as otherwise provided by the
Articles of Incorporation or by these By-Laws, each of the officers of the
Corporation shall hold office until the regular annual meeting of the Board of
Directors following the next Annual Meeting and until his successor is elected
and qualified or until his earlier death, disqualification, resignation or
removal.
SECTION 5. Resignation. Any officer may resign by giving
written notice to the Corporation addressed to a Co-Chief Executive Officer or
the Secretary. A resignation shall be effective upon receipt, unless the
resignation otherwise provides, and need not be accepted by the Corporation.
SECTION 6. Removal. Except as otherwise provided by law, the
Board of Directors may remove any officer with or without cause at any time.
SECTION 7. Absence or Disability. In the event of the absence
or disability of any officer, the Board of Directors may designate another
officer to act temporarily in place of such absent or disabled officer.
SECTION 8. Vacancies. Any vacancy in any office may be filled
for the unexpired portion of the term by the Board of Directors.
SECTION 9. Powers and Duties. Each of the officers of the
Corporation shall, unless otherwise ordered by the Board of Directors, have such
powers and duties as generally pertain to the officer's respective office as
well as such powers and duties as from time to time may be conferred upon the
officer by the Board of Directors.
ARTICLE IV
Capital Stock
SECTION 1. Certificates of Stock. Each stockholder shall be
entitled to a certificate of the capital stock of the Corporation in such form
as may from time to time be prescribed by the Board of Directors. Such
certificate shall be signed by the Chairman or Vice-Chairman of the Board or a
Co-Chief Executive Officer, the Chief Operating Officer or a Vice President and
by the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary. The corporate seal and the signatures by Corporation officers, the
transfer agent or the registrar may be facsimiles. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
on such certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if he were such officer, transfer agent or registrar at
the time of its issue. Every certificate for shares of stock which are subject
to any restriction on transfer and every certificate issued when the Corporation
is authorized to issue more than one class or series of stock shall contain such
legend with respect thereto as is required by law.
<PAGE>
SECTION 2. Transfers. Subject to any restrictions on transfer
and unless otherwise provided by the Board of Directors, shares of stock may be
transferred only on the books of the Corporation by the surrender to the
Corporation or its transfer agent of the certificate theretofore properly
endorsed or accompanied by a written assignment or power of attorney properly
executed, with transfer stamps (if necessary) affixed, and with such proof of
the authenticity of signature as the Corporation or its transfer agent may
reasonably require.
SECTION 3. Record Holders. Except as may otherwise be required
by law, by the Articles of Incorporation or by these By-Laws, the Corporation
shall be entitled to treat the record holder of stock as shown on its books as
the owner of such stock for all purposes, including the payment of dividends and
the right to vote with respect thereto, regardless of any transfer, pledge or
other disposition of such stock, and regardless of any notice to the Corporation
until the shares have been transferred on the books of the Corporation in
accordance with the requirements of these By-Laws.
It shall be the duty of each stockholder to notify the
Corporation of his or her post office address and any changes thereto.
SECTION 4. Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof or entitled to receive payments of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix a
record date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted by the Board of Directors, and
which record date shall, unless otherwise required by law, not be more than
sixty nor less than ten days before the date of such meeting. If no record date
is fixed, the record date for determining stockholders entitled to notice of or
to vote at a meeting of stockholders shall be at the close of business on the
day on which the first notice is delivered to stockholders.
ARTICLE V
Indemnification
The Corporation shall to the fullest extent permitted by Utah
law, as in effect from time to time (but, in the case of any amendment of the
Utah Revised Business Corporation Act, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment), indemnify each
person who is or was a Director or officer of the Corporation (or any
predecessor) or of any of its wholly-owned subsidiaries who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, or was or is involved in any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or she
is or was a Director, officer, employee or agent of the Corporation or of any of
its subsidiaries, or is or was at any time serving, at the request of the
Corporation, any other corporation, partnership, limited liability company,
joint venture, trust, employee benefit plan or other enterprise in any capacity,
against all expense, liability and loss (including, but not limited to,
attorneys' fees, judgments, fines, excise taxes or penalties with respect to any
employee benefit plan or otherwise, and amounts paid or to be paid in
settlement) incurred or suffered by such Director or officer in connection with
such proceeding; provided, however, that the Corporation shall not be obligated
to indemnify any person under this Article V in connection with a proceeding (or
part thereof) if such proceeding (or part thereof) was initiated by such person,
but was not authorized by the Board of Directors of the Corporation, against (i)
the Corporation or any of its subsidiaries, (ii) any person who is or was a
Director, officer, employee or agent of the Corporation or any of its
subsidiaries and/or (iii) any person or entity which is or was controlled,
controlled by or under common control with the Corporation or has or had
business relations with the Corporation or any of its subsidiaries.
Expenses incurred by a person who is or was a Director or
officer of the Corporation (or any predecessor) or any of its wholly-owned
subsidiaries in defending a proceeding shall be paid by the Corporation as they
are incurred in advance of the final disposition of such proceeding upon receipt
of an undertaking by or on behalf of such Director or officer to repay such
amount if it shall ultimately be determined that he or she is not entitled to be
indemnified by the Corporation. Such expenses incurred by former Directors or
other employees or agents of the Corporation may be so paid upon such terms and
conditions, if any, as the Board of Directors deems appropriate.
<PAGE>
For purposes of this Article, the term "Corporation" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed by the Corporation in a
consolidation or merger; the term "other enterprise" shall include any
corporation, partnership, joint venture, limited liability company, trust or
employee benefit plan; service "at the request of the Corporation" shall
include, without limitation, service as a Director, officer or employee of the
Corporation which imposes duties on, or involves service by, such Director,
officer or employee with respect to an employee benefit plan, its participants
or beneficiaries; any excise taxes assessed on a person with respect to an
employee benefit plan shall be deemed to be indemnifiable expenses; and action
by a person with respect to any employee benefit plan which such person
reasonably believes to be in the interest of the participants and beneficiaries
of such plan shall be deemed to be action in or not opposed to the best
interests of the Corporation.
Notwithstanding any other provision of these By-laws, no
action by the Corporation, either by amendment to or repeal of this Article or
otherwise, shall diminish or adversely affect any right or protection granted
under this Article to any Director or officer or former Director or officer of
the Corporation (or any predecessor) or of any of its wholly-owned subsidiaries
which shall have become vested as aforesaid prior to the date that any such
amendment, repeal or other corporate action is taken.
ARTICLE VI
Miscellaneous Provisions
SECTION 1. Fiscal Year. Except as otherwise determined by the
Board of Directors, the fiscal year of the Corporation shall end on the last day
of December of each year.
SECTION 2. Seal. The Board of Directors shall have power to
adopt and alter the seal of the Corporation.
SECTION 3. Execution of Instruments. All deeds, leases,
transfers, contracts, bonds, notes and other obligations to be entered into by
the Corporation in the ordinary course of its business without Board of
Directors action may be executed on behalf of the Corporation by the Chairman of
the Board, a Co-Chief Executive Officer, the Chief Operating Officer, the Chief
Financial Officer, any Vice President or any other officer, employee or agent of
the Corporation as the Board of Directors may authorize.
SECTION 4. Voting of Securities. Unless otherwise ordered by
the Board of Directors, the Chairman of the Board, a Co-Chief Executive Officer,
the Chief Operating Officer, the Chief Financial Officer and any Vice President
each shall have full power and authority on behalf of the Corporation to attend
and to vote at any meeting of stockholders of any corporation or other entity in
which this Corporation may hold stock or an ownership interest, and may exercise
on behalf of this Corporation any and all of the rights and powers incident to
the ownership of such stock or ownership interest at any such meeting and shall
have power and authority to execute and deliver proxies, waivers and consents on
behalf of the Corporation in connection with the exercise by the Corporation of
the rights and powers incident to the ownership of such stock or ownership
interest. The Board of Directors, from time to time, may confer like powers upon
any other person or persons.
SECTION 5. Resident Agent. The Board of Directors may appoint
a resident agent upon whom legal process may be served in any action or
proceeding against the Corporation.
SECTION 6. Corporate Records. The original or attested copies
of the Articles of Incorporation, By-Laws and records of all meetings of the
incorporators, stockholders and the Board of Directors (and committees thereof)
and the stock transfer books, which shall contain the names of all stockholders,
their record addresses and the amount of stock held by each, may be kept outside
the State of Utah and shall be kept at the principal office of the Corporation,
at the office of its counsel or at an office of its transfer agent or at such
other place or places as may be designated from time to time by the Board of
Directors.
SECTION 7. Articles of Incorporation. All references in these
By-Laws to the Articles of Incorporation shall be deemed to refer to the
Articles of Incorporation of the Corporation as in effect from time to time
(including all certificates and other instruments which are filed with the
Secretary of State of the State of Utah
<PAGE>
pursuant to the provisions of the Utah Revised Business Corporation Act and
which have the effect of amending or supplementing in some respect the Articles
of Incorporation of the Corporation).
SECTION 8. Amendment of By-Laws.
(a) Amendment by Directors. Except as provided otherwise by
law, these By-Laws may be amended or repealed or new By-Laws (not inconsistent
with any provision of law or the Articles of Incorporation) may be adopted, by
the Board of Directors.
(b) Amendment by Stockholders. These By-Laws may be amended or
repealed at any Annual Meeting, or special meeting of stockholders called for
such purpose, by the affirmative vote of a majority of the total votes eligible
to be cast on such amendment or repeal by holders of voting stock, voting
together as a single class.
Exhibit 5
[LETTERHEAD OF STOEL RIVES LLP]
February 15, 2000
THCG, Inc.
650 Madison Avenue, 21st Floor
New York, New York 10022
Re: THCG, Inc. Registration Statement on Form S-8
---------------------------------------------
Ladies and Gentlemen:
We have acted as Utah counsel to THCG, Inc. (formerly known as Walnut
Financial Services, Inc.), a Utah corporation (the "Registrant"), in connection
with certain matters related to the preparation and filing by the Registrant of
a Registration Statement on Form S-8 (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") with respect to the
registration under the Securities Act of 1933, as amended (the "Act"), of an
aggregate of 8,035,684 shares (the "Shares") of common stock, par value $0.01
per share (the "Common Stock"), to be issued by the Registrant.
In connection with the preparation of this opinion letter and as the
basis for the opinion set forth below (the "Opinion"), we have made such
investigations of the laws of the State of Utah as we have deemed relevant and
necessary, and we have examined such documents as we have deemed relevant and
necessary, including the following:
(a) a photocopy of The 1999 Walnut Financial Services, Inc. Stock
Incentive Plan (the "1999 Plan"), certified as of January 31, 2000 by Shai
Novik, the corporate secretary of the Registrant;
(b) a photocopy of The 2000 THCG, Inc. Stock Incentive Plan and the
THCG, Inc. 2000 Employee Stock Purchase Plan (collectively, the "2000 Plans"),
certified as of February 15, 2000 by Shai Novik, the corporate secretary of the
Registrant;
(c) a photocopy of the separate executed Stock Option Grant Agreements
entered into by the Registrant and each of the participants in the 1999 Plan
whose names are set forth in Part I of Schedule A attached hereto and a
photocopy of the form of Stock Option Grant Agreement to be entered into by the
Registrant and any participant in the 1999 Plan after the date hereof
(collectively, the "1999 Plan Option Agreements");
(d) a photocopy of the resolutions of the board of directors of the
Registrant relating to the adoption of the 1999 Plan and the grant of options
thereunder, certified as of January 31, 2000 by Shai Novik, the corporate
secretary of the Registrant (the "1999 Plan Resolutions");
(e) a photocopy of the resolutions of the board of directors of the
Registrant relating to the adoption of the 2000 Plans and the grant of options
thereunder, certified as of February 15, 2000 by Shai Novik, the corporate
secretary of the Registrant (the "2000 Plans Resolutions");
(f) a photocopy of the Walnut Capital Corporation 1987 Stock Option
Plan (the "1987 Plan") and of the Amendment to Walnut Capital Corporation 1987
Stock Option Plan (the "Amendment to 1987 Plan" and, collectively with the 1987
Plan, the "Amended 1987 Plan");
(g) a photocopy of the Stock Option Agreements entered into by Walnut
Capital Corporation or Walnut Financial Services, Inc. (as the case may be) and
each of the participants in the Amended 1987 Plan whose
<PAGE>
names are set forth in Part II of Schedule A attached hereto (collectively, the
"Amended 1987 Plan Option Agreements");
(h) a photocopy of the NFS Services, Inc. 1994 Stock Incentive Plan
(the "1994 Plan");
(i) a photocopy of the Amended and Restated Walnut Financial Services,
Inc. 1994 Stock Incentive Plan (the "Amended and Restated 1994 Plan ");
(j) a photocopy of the unexecuted Minutes of the Board of Directors
Meeting of Walnut Financial Services, Inc. held on October 8, 1997 regarding
adoption of the Amended and Restated 1994 Plan (the "Amended and Restated 1994
Plan Resolutions");
(k) a photocopy of the executed Report and Certification of Inspectors
of Election regarding approval by the shareholders of the Amended and Restated
1994 Plan at the annual meeting of the shareholders of Walnut Financial
Services, Inc. held on December 18, 1997 (the "Certification of Inspectors of
Election");
(l) a photocopy of the Stock Option Agreements entered into by Walnut
Financial Services and each of the participants in the Amended and Restated 1994
Plan whose names are set forth in Part III of Schedule A attached hereto
(collectively, the "Amended and Restated 1994 Plan Option Agreements");
(m) a photocopy of the resolutions of the board of directors of the
Registrant relating to the granting of certain stock options (not granted under
but subject to the terms of the 1999 Plan) to the individuals whose names are
set forth in Part IV of Schedule A attached hereto (the "Non-Plan Option
Resolutions");
(n) a photocopy of the form of Stock Option Grant Agreement to be
entered into by the Registrant and the individuals whose names are set forth in
Part IV of Schedule A attached hereto (the "Non-Plan Option Agreements"); and
(o) a photocopy of the Certification of Inspector of Election regarding
the voting at the Special Meeting of Stockholders of Walnut Financial Services,
Inc. held on November 1, 1999.
For purposes of this opinion letter, the following terms and phrases have
the following meanings:
(i) "internal laws of the State of Utah" means the laws of the
State of Utah, excluding any provisions of Utah law that might require
the application of the law of any state or jurisdiction other than the
State of Utah.
(ii) "laws of the State of Utah" or "Utah law" means and is
limited to the present published statutes of the State of Utah, the
administrative rules and regulations of agencies of the State of Utah
as contained in the present published Utah Administrative Code, and the
present published decisions of the Utah Court of Appeals and the Utah
Supreme Court.
Based solely upon the examination described above, and subject to the
assumptions, qualifications, limitations and exceptions set forth in this
opinion letter, we are of the opinion that upon the issuance of the Shares,
following (i) the granting of the restricted stock and the exercise of the
options, both in accordance with the 1999 Plan and the 2000 Plans; (ii) the
exercise of the options in accordance with the Amended 1987 Plan, the Amended
and Restated 1994 Plan and the Non-Plan Option Resolutions applicable to any
such Shares; and (iii) the delivery of and payment for the Shares in accordance
with the terms stated in the 1999 Plan Resolutions, the 1999 Plan, the 2000
Plans, the 2000 Plans Resolutions, the Amended 1987 Plan, the Amended and
Restated 1994 Plan, the Non-Plan Option Resolutions, the 1999 Plan Option
Agreements, the Amended 1987 Plan Option Agreements, the Amended and Restated
1994 Plan Option Agreements and the Non-Plan Option Agreements applicable to any
such Shares, the Shares will be validly issued, fully paid and nonassessable.
The Opinion is predicated upon and is limited by the matters set forth
in the Opinion and is further subject to the qualifications, exceptions,
assumptions, and limitations set forth below:
<PAGE>
A. The Opinion is subject to the approval of the 2000 Plans by the
shareholders of the Registrant as required by each of the 2000 Plans,
respectively.
B. In rendering the Opinions, we have assumed that:
(i) The photocopy of the Amended 1987 Plan and the photocopy
of the Amended and Restated 1994 Plan provided to us are each a true,
correct and complete copy of the respective plan.
(ii) Neither the Amended 1987 Plan nor the Amended and
Restated 1994 Plan has been rescinded, amended or modified in any
respect.
(iii) The photocopy of the 1994 Plan described above is a
true, correct and complete copy of such plan prior to its amendment by
the Amended and Restated 1994 Plan.
(iv) The 1994 Plan has not been rescinded, amended or modified
in any respect other than pursuant to the Amended and Restated 1994
Plan.
(v) The Amendment to the 1987 Plan was duly approved by the
board of directors and the shareholders of Walnut Capital Corporation.
(vi) Each of the following were duly approved by the board of
directors of the proper predecessor to the Registrant: (a) the Amended
1987 Plan Option Agreements, the options granted in connection
therewith and the issuance of any shares to be made thereunder; (b) the
Amended and Restated 1994 Plan Option Agreements, the options granted
in connection therewith and the issuance of any shares to be made
thereunder; (c) the 1994 Plan; and (d) the Amended and Restated 1994
Plan Resolutions.
(vii) The Certification of Inspectors of Election accurately
reflects the events that transpired and the results of the voting at
the special meeting of shareholders described therein.
C. The Opinion is subject to the following:
(i) The Opinion is limited to the laws of the State of Utah.
We express no opinion as to local laws, federal laws or the laws of any
other state or country.
(ii) Our duties and responsibilities with respect to this
opinion letter shall at all times and in all respects be governed by
and construed solely in accordance with the internal laws of the State
of Utah.
D. We have not passed upon or considered, and for purposes of the
Opinion we have assumed (to the extent applicable), (i) the genuineness of all
signatures, (ii) the conformity to the original documents of all photocopies or
facsimile copies submitted to us, whether certified or not, and (iii) the
authenticity of all documents submitted to us as originals.
E. The Opinion is limited to that expressly stated and no other
opinions should be implied.
We hereby consent to the filing of this opinion letter as Exhibit 5 to the
Registration Statement. In giving the foregoing consent, we do not thereby admit
that we are in the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Commission thereunder.
Very truly yours,
/s/ Stoel Rives LLP
-------------------
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated April 25, 1997, with
respect to the financial statements of Hambro Resource Development, Inc.
included in the Current Report on Form 8-K/A of THCG, Inc. dated November 1,
1999, and to all references to our Firm included in this Registration Statement.
/s/ BDO Seidman, LLP
-----------------------
BDO Seidman, LLP
New York, New York
March 22, 2000
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTS
THCG, Inc.
New York, New York
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our reports dated May 20, 1998 and January 26, 1999,
appearing in the Current Report on Form 8-K/A of THCG, Inc. relating to the
March 31, 1998 and December 31, 1998 financial statements of Hambro America
Securities, Inc., respectively.
/s/ Cohen & Schaeffer, P.C.
---------------------------
Cohen & Schaeffer, P.C.
New York, New York
March 21, 2000
Exhibit 23.3
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference of our report dated January 21,
1999 on our audits of the financial statements included in the filing on Form
10-K of Walnut Financial Services, Inc. and subsidiaries as of and for the years
ended December 31, 1998 and 1997 in the Registration Statements on Form S-8 of
THCG, Inc. Our report includes emphasis paragraphs regarding assertions by the
U.S. Small Business Administration of the Company's violations of its rules and
regulations.
/s/ Richard A. Eisner & Company, LLP
------------------------------------
Richard A. Eisner & Company, LLP
New York, New York
March 21, 2000
