SEC Comment Letter for BGC Group, Inc. (BGC) (CIK 0001094831) (BGC) — Feb 7, 2008
BGC Group, Inc. (BGC) (CIK 0001094831)
Date: Feb. 7, 2008 · CIK: 0001094831 · Accession: 0000000000-08-007000
AI Filing Summary & Sentiment
Reasoning
Referenced dates: December 28, 2007, January 24, 2008
Letter
Mail Stop 3561 February 7, 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 February 4, 2008 File No. 0-28191
Dear Mr. Lutnick:
We have reviewed the above-referenced filing and have the following comments. Where indicated, we think you should revise your document 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
Opinion of Financial Advisor to eS peed’s Special Committee, page 11 1. We note your response to prior comment ei ght from our letter dated January 24, 2008. However, we reissue the comment as the requested disclosure regarding the fact that the fairne ss opinion will not be update d and does not take into account the amendment to the merger agre ement does not appear to be in the Summary beginning on page si x of the proxy statement.
Howard W. Lutnick eSpeed, Inc. February 7, 2008 Page 2 Risk Factors, page 36
Comments by the SEC on this proxy statement …, page 39 2. Per your response to prior comment 14 in your letter dated December 28, 2007, please remove this risk factor. Proposal 1 – The Merger, page 79
3. We note your revised disclosure on page 79 and elsewhere in the proxy statement regarding the issuance of restricted st ock units. You disclose that “certain employees of BGC and other persons w ho provide services to BGC” were informed that they would receive RSU in terests in lieu of a portion of their discretionary bonus for 2007. It appears th at one group of employees is receiving 276,204 RSU interests and another is rece iving 1,220,772 RSU inte rests; briefly disclose what the difference is between these two groups of employees and why they are receiving different amounts. Also, your statement that the 1,220,772 BGC RSUs have “an aggregate es timated value of $1,862,425 and $10,589,451” is unclear as it would app ear that you mean to disclose one total dollar amount here or that you have omitted the number of RSUs that correlate to the second dollar amount disclosed. 4. You disclose here that BGC Holdings ha s recently entered into an acquisition agreement in connection with which it ha s agreed to issue $5 million of REUs upon the closing of the merger. Please el aborate upon the parties and purpose of the acquisition agreement and explain as of what date the value of the REUs will be determined; provide an es timation of the number of REUs to be issued as of an assumed date.
Compensation Discussion and Analysis, page 160 5. Please disclose the name of the comp ensation consultant that advised the compensation committee. 6. You mention on page 162 that, follow ing the merger, the compensation committee of the Combined Company will establish base salary and incentive performance goals for the executive officer s of the Combined Company. We also note that the merger agreement contemplates certain employment agreements, as disclosed in detail on page 165. Consid ering these employment agreements have an initial term of three year s, it would appear that, at the very least, base salary has already been set for th e executive officers of the Combined Company. Please revise or advise.
Howard W. Lutnick eSpeed, Inc. February 7, 2008 Page 3 7. With respect to the poten tial payments upon change of control, please discuss and analyze how the 200% of aggregate comp ensation and other amounts and periods were negotiated and how and why the co mpany agreed to th e specified amounts and periods.
*****
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 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 February 7, 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 February 4, 2008 File No. 0-28191 Dear Mr. Lutnick: We have reviewed the above-referenced filing and have the following comments. Where indicated, we think you should revise your document 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 Opinion of Financial Advisor to eS peed’s Special Committee, page 11 1. We note your response to prior comment ei ght from our letter dated January 24, 2008. However, we reissue the comment as the requested disclosure regarding the fact that the fairne ss opinion will not be update d and does not take into account the amendment to the merger agre ement does not appear to be in the Summary beginning on page si x of the proxy statement. Howard W. Lutnick eSpeed, Inc. February 7, 2008 Page 2 Risk Factors, page 36 Comments by the SEC on this proxy statement …, page 39 2. Per your response to prior comment 14 in your letter dated December 28, 2007, please remove this risk factor. Proposal 1 – The Merger, page 79 3. We note your revised disclosure on page 79 and elsewhere in the proxy statement regarding the issuance of restricted st ock units. You disclose that “certain employees of BGC and other persons w ho provide services to BGC” were informed that they would receive RSU in terests in lieu of a portion of their discretionary bonus for 2007. It appears th at one group of employees is receiving 276,204 RSU interests and another is rece iving 1,220,772 RSU inte rests; briefly disclose what the difference is between these two groups of employees and why they are receiving different amounts. Also, your statement that the 1,220,772 BGC RSUs have “an aggregate es timated value of $1,862,425 and $10,589,451” is unclear as it would app ear that you mean to disclose one total dollar amount here or that you have omitted the number of RSUs that correlate to the second dollar amount disclosed. 4. You disclose here that BGC Holdings ha s recently entered into an acquisition agreement in connection with which it ha s agreed to issue $5 million of REUs upon the closing of the merger. Please el aborate upon the parties and purpose of the acquisition agreement and explain as of what date the value of the REUs will be determined; provide an es timation of the number of REUs to be issued as of an assumed date. Compensation Discussion and Analysis, page 160 5. Please disclose the name of the comp ensation consultant that advised the compensation committee. 6. You mention on page 162 that, follow ing the merger, the compensation committee of the Combined Company will establish base salary and incentive performance goals for the executive officer s of the Combined Company. We also note that the merger agreement contemplates certain employment agreements, as disclosed in detail on page 165. Consid ering these employment agreements have an initial term of three year s, it would appear that, at the very least, base salary has already been set for th e executive officers of the Combined Company. Please revise or advise. Howard W. Lutnick eSpeed, Inc. February 7, 2008 Page 3 7. With respect to the poten tial payments upon change of control, please discuss and analyze how the 200% of aggregate comp ensation and other amounts and periods were negotiated and how and why the co mpany agreed to th e specified amounts and periods. ***** 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 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