SEC Comment Letter for BGC Group, Inc. (BGC) (CIK 0001094831) (BGC) — Jan 24, 2008
BGC Group, Inc. (BGC) (CIK 0001094831)
Date: Jan. 24, 2008 · CIK: 0001094831 · Accession: 0000000000-08-004028
AI Filing Summary & Sentiment
Reasoning
Referenced dates: December 6, 2007
Letter
Mail Stop 3561 January 24, 2008 Howard W. Lutnick Chairman of the Board, Chief Executive Officer and President eSpeed, Inc. 110 East 59 th Street New York, NY 10022 Re: eSpeed, Inc. Revised Preliminary Proxy Statement Relating to a Merger or Acquisition on Schedule 14A Filed December 28, 2007 File No. 0-28191
Dear Mr. Lutnick:
We have reviewed the above-referenced f ilings and have the following comments. Where indicated, we think you should revise your document(s) in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Pl ease be as detailed as necessary in your explanation. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. After reviewing this information, we may raise additional comments. The page numb ers set forth below refer to the tape-bound courtesy copy of the revised preliminary proxy statement. Summary, page 6
1. We note your response to prior comment 6 of our letter dated December 6, 2007 and the accompanying revisions you have ma de to your disclosure. It does not appear, however, that you addr ess the latter portion of our comment as it relates to the ability of the Class B common stockholde rs to convert their shares into Class A Common Stock. 2. Please move your first full-length reference to restricted equity interests from page 11 to page 10, where you first refer to the term. 3. We note your response to prior comment 11 of our letter dated December 6, 2007 and the accompanying revisions you have ma de. It is still not clear, however,
Howard W. Lutnick eSpeed, Inc. January 24, 2008 Page 2 why you refer to the ownership of the pub lic stockholders in terms of economic and voting power of 40.7% and 11.2%, respectively, on pages 15 and 37 and 39.4% and 12.3%, respectively in the letter to shareholders, pages 2, 12 and 73. While the difference in amounts is slight, explain why you believe it is necessary to refer to both of them. Risk Factors, page 36
4. It appears that the risk factor beginning on the bottom of page 42 addresses similar risks related to recr uiting and retention as the la st risk factor on page 37. Please consider combining the risk fact ors in order to e liminate duplicative disclosure or revise them to dis tinguish the nature of the risks. 5. It appears that the two risk factors on page 63 address similar issues. Please consider combining them and reducing th e amount of disclosure that appears within the risk factor. For example, it appears the disclosure on page 64 under the bullet point “Corporate Opport unities” includes disclosure that mitigates the risk of Cantor using its control of the comb ined company in a detrimental manner. Please delete disclosure that mitigates the risk being described. Structure of the Combined Company, page 76
6. We note your response to prior comment 19 to our letter dated December 6, 2007. Please disclose in the proxy statement how the one-to-one exchange ratio for the conversion of BGC Holdings interests into common stock of the combined company was determined.
Background of the Merger, page 81 7. We note the revised disclosure in the last paragraph on page 83 regarding the meeting on April 5, 2007 that Cantor will ha ve the ability to use the inter-dealer broker technology to compete with the combined company. This disclosure appears to conflict with the disclosure in the last sentence on page 119 that indicates that Cantor can not create an electronic brokerage system to compete with the company. Please advise us as to why the statements are compatible or revise as appropriate. 8. We note your response to prior comment 30 to our letter dated December 6, 2007. Please add the disclosure regarding the fact that Sandler O’Neill will not be updating their fairness opinion and did not consider the amendment to the merger agreement to the Summary.
Howard W. Lutnick eSpeed, Inc. January 24, 2008 Page 3 The Merger Agreement, page 112
Value of the Transaction, page 124 9. Please move the disclosure regarding the value of the merger transaction forward to the section discussing the merger consideration on page 112 of the proxy statement.
Related Agreements, page 125 Pre-Contribution Loan, page 127 10. We note the disclosure adde d in response to prior comment 45 to our letter dated December 6, 2007. Please add additiona l detail regarding the specific “regulatory” and “other busin ess” reasons for the loans.
Compensation Discussion and Analysis, page 159 11. Please update the information required by Item 402 of Regulation S-K to include information for the year ended Dece mber 31, 2007. See Question 4.01 in the questions and answers regarding It em 402 of Regulation S-K under the Compliance and Disclosure Interpretations in the Corporation Finance section of the SEC website ( http://www.sec.gov/divisi ons/corpfin/guidance.htm .). In doing so, please ensure that yo u provide information rega rding your incentive bonus targets for 2008 and the amounts of RSUs to be delivered in 2008 in lieu of cash compensation for 2007, if known.
Incentive Bonus Compensation Targets for 2007, page 164 12. We note your response to prior comment 57 to our letter dated December 6, 2007. Please clarify whether the bonuses that ar e expected to be paid to certain employees pursuant to the merger in 2008 are in addition to any bonuses paid out of the Incentive Bonus Compensation to be granted for 2008.
Proposal 4 – Approval of Amended and Rest ated BGC Partners, Inc. Long Term Incentive Plan, page 290 13. Please provide the information missing on pages 292 and 293 in a timely manner so that we may have time to review the information before you mail the proxy statement. *****
As appropriate, please amend your filing in response to our comments. You may wish to provide us with marked copies of th e amendment to expedite our review. Please furnish a cover letter with your amendment th at keys your responses to our comments
Howard W. Lutnick eSpeed, Inc. January 24, 2008 Page 4 and provides any requested information. Deta iled cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your amendment and responses to our comments. Please contact Regina Balderas, Staf f Accountant, at (202) 551-3722 or Jim Allegretto, Senior Assistant Chief Accountan t, at (202) 551-3720 w ith any questions on the financial statements or related notes. Pl ease contact Blair Petri llo, Staff Attorney, at (202) 551-3550, Mara Ransom, Legal Branch Chief, at (202) 551-3264 or me at (202) 551-3725 with any other questions. S i n c e r e l y , H. Christopher Owings Assistant Director cc: Gavin D. Solotar Wachtell, Lipton, Rosen & Katz
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Mail Stop 3561 January 24, 2008 Howard W. Lutnick Chairman of the Board, Chief Executive Officer and President eSpeed, Inc. 110 East 59 th Street New York, NY 10022 Re: eSpeed, Inc. Revised Preliminary Proxy Statement Relating to a Merger or Acquisition on Schedule 14A Filed December 28, 2007 File No. 0-28191 Dear Mr. Lutnick: We have reviewed the above-referenced f ilings and have the following comments. Where indicated, we think you should revise your document(s) in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Pl ease be as detailed as necessary in your explanation. In some of our comments, we may ask you to provide us with information so we may better understand your disclosure. After reviewing this information, we may raise additional comments. The page numb ers set forth below refer to the tape-bound courtesy copy of the revised preliminary proxy statement. Summary, page 6 1. We note your response to prior comment 6 of our letter dated December 6, 2007 and the accompanying revisions you have ma de to your disclosure. It does not appear, however, that you addr ess the latter portion of our comment as it relates to the ability of the Class B common stockholde rs to convert their shares into Class A Common Stock. 2. Please move your first full-length reference to restricted equity interests from page 11 to page 10, where you first refer to the term. 3. We note your response to prior comment 11 of our letter dated December 6, 2007 and the accompanying revisions you have ma de. It is still not clear, however, Howard W. Lutnick eSpeed, Inc. January 24, 2008 Page 2 why you refer to the ownership of the pub lic stockholders in terms of economic and voting power of 40.7% and 11.2%, respectively, on pages 15 and 37 and 39.4% and 12.3%, respectively in the letter to shareholders, pages 2, 12 and 73. While the difference in amounts is slight, explain why you believe it is necessary to refer to both of them. Risk Factors, page 36 4. It appears that the risk factor beginning on the bottom of page 42 addresses similar risks related to recr uiting and retention as the la st risk factor on page 37. Please consider combining the risk fact ors in order to e liminate duplicative disclosure or revise them to dis tinguish the nature of the risks. 5. It appears that the two risk factors on page 63 address similar issues. Please consider combining them and reducing th e amount of disclosure that appears within the risk factor. For example, it appears the disclosure on page 64 under the bullet point “Corporate Opport unities” includes disclosure that mitigates the risk of Cantor using its control of the comb ined company in a detrimental manner. Please delete disclosure that mitigates the risk being described. Structure of the Combined Company, page 76 6. We note your response to prior comment 19 to our letter dated December 6, 2007. Please disclose in the proxy statement how the one-to-one exchange ratio for the conversion of BGC Holdings interests into common stock of the combined company was determined. Background of the Merger, page 81 7. We note the revised disclosure in the last paragraph on page 83 regarding the meeting on April 5, 2007 that Cantor will ha ve the ability to use the inter-dealer broker technology to compete with the combined company. This disclosure appears to conflict with the disclosure in the last sentence on page 119 that indicates that Cantor can not create an electronic brokerage system to compete with the company. Please advise us as to why the statements are compatible or revise as appropriate. 8. We note your response to prior comment 30 to our letter dated December 6, 2007. Please add the disclosure regarding the fact that Sandler O’Neill will not be updating their fairness opinion and did not consider the amendment to the merger agreement to the Summary. Howard W. Lutnick eSpeed, Inc. January 24, 2008 Page 3 The Merger Agreement, page 112 Value of the Transaction, page 124 9. Please move the disclosure regarding the value of the merger transaction forward to the section discussing the merger consideration on page 112 of the proxy statement. Related Agreements, page 125 Pre-Contribution Loan, page 127 10. We note the disclosure adde d in response to prior comment 45 to our letter dated December 6, 2007. Please add additiona l detail regarding the specific “regulatory” and “other busin ess” reasons for the loans. Compensation Discussion and Analysis, page 159 11. Please update the information required by Item 402 of Regulation S-K to include information for the year ended Dece mber 31, 2007. See Question 4.01 in the questions and answers regarding It em 402 of Regulation S-K under the Compliance and Disclosure Interpretations in the Corporation Finance section of the SEC website ( http://www.sec.gov/divisi ons/corpfin/guidance.htm .). In doing so, please ensure that yo u provide information rega rding your incentive bonus targets for 2008 and the amounts of RSUs to be delivered in 2008 in lieu of cash compensation for 2007, if known. Incentive Bonus Compensation Targets for 2007, page 164 12. We note your response to prior comment 57 to our letter dated December 6, 2007. Please clarify whether the bonuses that ar e expected to be paid to certain employees pursuant to the merger in 2008 are in addition to any bonuses paid out of the Incentive Bonus Compensation to be granted for 2008. Proposal 4 – Approval of Amended and Rest ated BGC Partners, Inc. Long Term Incentive Plan, page 290 13. Please provide the information missing on pages 292 and 293 in a timely manner so that we may have time to review the information before you mail the proxy statement. ***** As appropriate, please amend your filing in response to our comments. You may wish to provide us with marked copies of th e amendment to expedite our review. Please furnish a cover letter with your amendment th at keys your responses to our comments Howard W. Lutnick eSpeed, Inc. January 24, 2008 Page 4 and provides any requested information. Deta iled cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your amendment and responses to our comments. Please contact Regina Balderas, Staf f Accountant, at (202) 551-3722 or Jim Allegretto, Senior Assistant Chief Accountan t, at (202) 551-3720 w ith any questions on the financial statements or related notes. Pl ease contact Blair Petri llo, Staff Attorney, at (202) 551-3550, Mara Ransom, Legal Branch Chief, at (202) 551-3264 or me at (202) 551-3725 with any other questions. S i n c e r e l y , H. Christopher Owings Assistant Director cc: Gavin D. Solotar Wachtell, Lipton, Rosen & Katz