ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
6531 |
||||
(State or other Jurisdiction of Incorporation or Organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Title of Each Class |
Name of Each Exchange on Which Registered | |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
Emerging growth company |
Class |
Outstanding at April 26 , 2021 | |
Class A Common Stock, par value $0.01 per share |
||
Class B Common Stock, par value $0.01 per share |
Page |
||||||
1 | ||||||
2 | ||||||
ITEM 10. |
2 | |||||
ITEM 11. |
9 | |||||
ITEM 12. |
31 | |||||
ITEM 13. |
36 | |||||
ITEM 14. |
56 | |||||
56 | ||||||
ITEM 15. |
56 |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
Name |
Age |
Director Since |
Biographies | |||
Howard W. Lutnick |
59 |
2017 |
Mr. Lutnick has served as our Chairman since 2016. As Chairman, Mr. Lutnick serves as the Chairman of our Board of Directors and as our principal executive officer. Mr. Lutnick is the Chairman of the Board of Directors and Chief Executive Officer of BGC Partners, Inc., a leading global brokerage and financial technology company (“BGC Partners” or “BGC”), positions in which he has served since 1999. Mr. Lutnick joined Cantor Fitzgerald, L.P. (“Cantor”) in 1983 and has served as President and Chief Executive Officer of Cantor since 1992 and as Chairman since 1996. Mr. Lutnick also served as President of Cantor from 1991 until 2017. Mr. Lutnick also served as the Chairman and Chief Executive Officer of CF Finance Acquisition Corp, from October 2015 until consummation of its business combination with GCM Grosvenor in November 2020 and as the Chairman and Chief Executive Officer of CF Finance Acquisition Corp. II from September 2019 until consummation of its business combination with View, Inc. (“View”) in March 2021. Currently, Mr. Lutnick has served as Chairman and Chief Executive Officer of CF Finance Acquisition Corp. III since March 2016, CF Acquisition Corp. IV since January 2020, CF Acquisition Corp. V since April 2020, CF Acquisition Corp. VI since April 2020, CF Acquisition Corp VI since July 2020 and CF Acquisition Corp. VIII since July 2020, all of which are special purpose acquisition companies or “SPACS.” In addition, Mr. Lutnick also holds offices at and provides services to various other affiliates of Cantor and provides services to our and BGC’s operating partnerships and subsidiaries, including Newmark Partners, L.P. (“Newmark OpCo”), BGC Partners, L.P. (“BGC U.S. OpCo”) and BGC Global Holdings, L.P. (“BGC Global OpCo”). Mr. Lutnick’ s company, CF Group Management, Inc. (“CFGM”), is the managing general partner of Cantor. Mr. Lutnick is a member of the Board of Directors of the Fisher Center for Alzheimer’s Research Foundation at Rockefeller University, the Board of Directors of the Horace Mann School, the Board of Directors of the National September 11 Memorial & Museum, the Board of Directors of the Partnership for New York City and the Board of Overseers of The Hoover Institution. Mr. Lutnick has served as Chairman and Chief Executive Officer of each of Cantor Fitzgerald Income Trust, Inc. (formerly known as Rodin Global Property Trust, Inc.) and Rodin Income Trust, Inc. since February 2017 and as President of Rodin Income Trust, Inc. since January 2018, which are non-traded real estate investment trusts, or REITs. |
Name |
Age |
Director Since |
Biographies | |||
Michael Snow | 73 | 2017 | Mr. Snow has been a director of our Company since December 2017. Mr. Snow was the Managing Member of Snow Fund One, LLC, a short volatility fund trading in S&P options, from October 2005 to March 2020. Mr. Snow is a Registered Investment Advisor and founded Snow Financial Management, LLC in 1997. Prior to establishing this company, he was employed in the banking industry for over 25 years. At the Union Bank of Switzerland, Mr. Snow was Second in Charge of the North American Region. He achieved the rank of Senior Managing Director and was Head of Fixed Income, where he was responsible for: Treasury, Money Markets, Precious Metals, Foreign Exchange, Mortgage-Backed Securities, Government Securities, Derivatives, Corporate Bonds, Emerging Markets, High-Yield Securities, and Capital Markets. In addition, since August 2013, he has served as an independent director of BGC Derivative Markets, L.P., a subsidiary of BGC Partners, and, since March 2014, he has served as an independent director of Remate Lince, S.A.P.I. de C.V., a BGC affiliate and one of Mexico’s top inter-dealer brokers. BGC Derivative Markets, L.P. conducts operations as a Swap Execution Facility, which offers trading in swaps products subject to mandatory clearing, as well as swaps classified as permitted transactions. He has also served as an independent member of Cantor Clearinghouse Holdings, LLC and Cantor Futures Exchange Holdings, LLC, in each case since August 2016. |
Name |
Age |
Director Since |
Biographies | |||
Virginia S. Bauer | 64 | 2018 | Ms. Bauer has been a director of our Company since June 2018. Ms. Bauer has served as Chief Executive Officer of GTBM, Inc., a security technology company that develops and markets proprietary software solutions, since 2010. Prior thereto, Ms. Bauer served as Senior Vice President of Covenant House International from 2009 to 2010, as the Secretary of Commerce for the State of New Jersey from 2004 to 2008, and as Director of the New Jersey Lottery Commission from 2003 to 2004. In addition, Ms. Bauer has served on the Board of the New Jersey Economic Development Authority since January 2020, on the Foundation Board of Monmouth Medical Center since 2009 and on the Board of Directors of the National September 11Memorial & Museum since 2008. She previously served on the Board of Commissioners of The Port Authority of New York and New Jersey from 2008 to 2012 and on the Advisory Board of the Lower Manhattan Development Corporation from 2001 to 2004. | |||
Peter F. Cervinka | 72 | 2018 | Mr. Cervinka has been a director of our Company since June 2018. Mr. Cervinka has resigned as a director effective April 29, 2021. Mr. Cervinka has been the sole owner and Chief Executive Officer of Cerco Funding LLC, a private real estate financing company based in New York, since 2013. He has also served as the Chief Executive Officer of a private asset management office since 2004. Mr. Cervinka has more than 30 years of experience in real estate finance, development and management. He previously founded Allputz GmbH & Co KG, an Austrian construction company. In addition, Mr. Cervinka serves as an advisor to Gabrielle’s Angel Foundation for Cancer Research. | |||
Kenneth A. McIntyre | 60 | 2020 | Mr. McIntyre has been a director of our Company since January 2020. Mr. McIntyre has over 25 years of experience in the commercial real estate industry. Since February 2020, Mr. McIntyre has been the Chief Executive Officer of the Real Estate Executive Council (“REEC”), having served as a founding member of the Board of Directors of the organization since 2003. REEC is a preeminent trade association in the U.S. for minority commercial real estate professionals. Since 2012, Mr. McIntyre has been the Founder and Managing Principal of PassPort Real Estate, LLC, a New York based consulting firm focused on advising developers and institutions on commercial real estate deal and platform structuring. His clients have included REAP, a non-profit that is focused on increasing the diversity of talent in the commercial real estate industry, where he served as the Executive Director, and the Port Authority of New York and New Jersey, where he served as Executive Advisor to the Office of Diversity & Inclusion. Mr. McIntyre was a former Senior Vice President and Head of Commercial Real Estate at Hudson City Savings Bank from May 2014 to May 2016. Prior to joining Hudson City Saving Bank, Mr. McIntyre was a Managing Director in MetLife’s Real Estate Investments Group with various responsibilities across both the debt and equity portfolios, including: Head of Equity Acquisitions; Head of Strategic Initiatives; Head of Real Estate Capital Markets; and Head of Commercial Mortgage Production and Pricing. Prior to joining MetLife, Mr. McIntyre held senior origination and relationship management roles at KeyBank, GE Capital Real Estate, UBS and Chase. Since March 2021, Mr. McIntyre has served on the Board of Trustees of Acadia Realty Trust. In addition, he is on the Board of Directors of The Real Estate Roundtable, where he serves on the Equity, Diversity and Inclusion Committee. Mr. McIntyre is also a Member of the Board of Governors for the Real Estate Board of New York and serves on the Boards of the National Jazz Museum of Harlem, the Yorkville Youth Athletic Association, and R*E*N*T, and is a member of the Advisory Board for Council of Urban Real Estate (CURE, f/k/a African American Real Estate Professionals of New York). |
ITEM 11. |
EXECUTIVE COMPENSATION |
Introduction |
• | pre-tax or after-tax net income; |
• | pre-tax or after-tax operating income; |
• | gross revenue; |
• | profit margin; |
• | stock price, dividends and/or total stockholder return; |
• | cash flow(s); |
• | market share; |
• | pre-tax or after-tax earnings per share; |
• | pre-tax or after-tax operating earnings per share; |
• | expenses; |
• | return on equity; or |
• | strategic business criteria, consisting of one or more objectives based on meeting specified revenue, market penetration, or geographic business expansion goals, cost targets, and goals relating to acquisitions or divestitures, or any combination thereof. |
• | Mr. Lutnick’s 2020 aggregate bonus of $3,450,000 was paid solely in a long-term partnership award represented by 166,025 non-exchangeable Newmark Holdings PSUs and 166,025 non-exchangeable Newmark Holdings PPSUs. The bonus for Mr. Lutnick represented a $1,050,000, or approximate 23.3%, decrease from the prior year in light of the impact of the COVID-19 pandemic on the Company’s business as a whole. This long-term award represents an incentive which aligns Mr. Lutnick’s compensation with the Company’s performance and earnings and is critical for the present market. |
• | Mr. Gosin’s aggregate bonus of $7,933,891 for 2020 was paid solely in a long-term incentive partnership award represented by 381,804 non-exchangeable Newmark Holdings PSUs and 381,804 non-exchangeable Newmark Holdings PPSUs. The bonus for Mr. Gosin |
represented a $2,566,109, or approximate 24.4%, decrease from the prior year in light of the impact of the COVID-19 pandemic on the Company’s business as a whole. This long-term award represents an incentive which aligns Mr. Gosin’s compensation with the Company’s performance and earnings and is critical for the present market. |
• | Mr. Rispoli’s aggregate bonus of $392,288 for 2020 was paid solely in a long-term partnership award represented by 18,878 non-exchangeable Newmark Holdings PSUs and 18,878 non-exchangeable Newmark Holdings PPSUs. These units were granted by the Committee to continue to incentivize Mr. Rispoli in his efforts with respect to the Company’s overall finances and increased operational responsibilities. The bonus for Mr. Rispoli represented a $307,712, or approximately 44.0%, decrease from the prior year as a result of the impact of the COVID-19 pandemic on the Company’s business as a whole. |
• | Mr. Merkel’s 2020 bonus of $579,000 was paid solely in a long-term partnership award represented by 27,864 non-exchangeable Newmark Holdings PSUs and 27,864 non-exchangeable Newmark Holdings PPSUs, reflecting Mr. Merkel’s overall leadership and advice on complex business and legal matters in connection with certain transactions and other projects. The bonus for Mr. Merkel represented a $296,000, or approximate 33.8%, decrease from the prior year as a result of the impact of the COVID-19 pandemic on the Company’s business as a whole. |
• | Replacement of NPSUs with PSUs: On or about each April 1 of 2020, 2021, 2022, and 2023, the Company shall grant Mr. Lutnick an aggregate award of 125,000 non-exchangeable PSUs in replacement of 125,000 of the above NPSUs, provided that (i) the Company, inclusive of its affiliates, earns, in aggregate, at least $5 million in gross revenues in the calendar quarter in which the applicable award of PSUs is to be granted and (ii) except in the event of death prior to the applicable grant date, Mr. Lutnick remains an employee of the Company or an affiliate thereof and has at all times remained in compliance with the Newmark Holdings Limited Partnership Agreement. Pursuant to this grant, on April 1, 2021 the Company granted Mr. Lutnick an aggregate award of 125,000 non-exchangeable PSUs in replacement of 125,000 NPSUs. |
• | Replacement of NPPSUs with PPSUs: On or about each April 1 of 2020, 2021, 2022, and 2023, the Company shall grant Mr. Lutnick an aggregate award of 125,000 non-exchangeable PPSUs in replacement of 125,000 of the above NPPSUs (which, upon replacement, shall be cancelled and no longer exist), provided that (i) the Company, inclusive of its affiliates, earns, in aggregate, at least $5 million in gross revenues in the calendar quarter in which the applicable award of PPSUs is to be granted and (ii) except in the event of death prior to the applicable grant date, Mr. Lutnick remains an employee of the Company or an affiliate thereof and has at all times remained in compliance with the Newmark Holdings Limited Partnership Agreement. Pursuant to this grant, on April 1, 2021 the Company granted Mr. Lutnick an aggregate award of 125,000 non-exchangeable PPSUs in replacement of 125,000 NPPSUs. |
THE COMPENSATION COMMITTEE |
Michael Snow, Chair Virginia S. Bauer Peter F. Cervinka Kenneth A. McIntyre |
(a) Name and Principal Position |
(b) Year (1) |
(c) Salary ($) (3) |
(d) Bonus ($) (4) |
(e) Equity Awards (Related to Prior Periods) ($) |
(f) Option Awards ($) |
(g) Non-Equity Incentive Plan Compensation ($) (9) |
(h) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
(i) All Other Compensation ($) |
(j) Total ($) |
|||||||||||||||||||||||||||
Howard W. Lutnick, Chairman |
|
2020 2019 2018 |
(1) (1)(2) (1)(2) |
|
675,000 1,000,000 1,000,000 |
(3) |
|
— — — |
|
|
— — 7,529,510 |
(4) (4) (4) |
|
— — |
|
|
3,450,000 4,500,000 4,500,000 |
|
|
— — |
|
|
— — |
|
|
4,125,000 5,500,000 13,029,510 |
| |||||||||
Barry M. Gosin, Chief Executive Officer |
|
2020 2019 2018 |
(2) (2) |
|
675,000 1,000,000 1,000,000 |
(3) |
|
— — — |
|
|
— — — |
(5) (5) (5) |
|
— — |
|
|
7,933,891 10,500,000 9,895,107 |
|
|
— — — |
|
|
119,821 118,653 229,291 |
(10)(11) (11) (10)(11) |
|
8,728,712 11,618,653 11,124,398 |
| |||||||||
Michael J. Rispoli, Chief Financial Officer |
|
2020 2019 2018 |
(2) (2) |
|
620,212 625,000 500,000 |
(3) (2) |
|
— — — |
|
|
— — — |
(6) (6) (6) |
|
— — — |
|
|
392,288 700,000 600,000 |
|
|
— — — |
|
|
— — — |
|
|
1,012,500 1,325,000 1,100,000 |
| |||||||||
Stephen M. Merkel, Chief Legal Officer |
|
2020 2019 |
(2) |
|
452,250 500,000 |
(3) |
|
— — |
|
|
— 2,072,278 |
(4)(8) |
|
— — |
|
|
579,000 875,000 |
|
|
— — |
|
|
— — |
|
|
1,031,250 3,447,278 |
| |||||||||
James R. Ficarro, Former Chief Operating Officer (12) |
|
2020 2019 2018 |
(2) (2) |
|
— — 572,884 |
|
|
— — |
|
|
— — — |
(7) (7) (7) |
|
— — — |
|
|
— — — |
|
|
— — — |
|
|
— — — |
|
|
— — 572,8840 |
|
(1) | The table does not include matters for 2018, 2019 and 2020 described above under “Compensation Discussion and Analysis—NPSU Grants and Related Replacement and Exchange Right Grants—Previous BGC Partners Grants Attributable to Newmark” and “Compensation Discussion and Analysis—Replacement and Exchange Right Grants” because the shares granted were fewer than the number of limited partnership units redeemed/exchanged, those units had been granted in partial payment of prior years’ bonuses at full notional value, and the partnership unit and cash payment adjustments described as part of the program were incidental adjustments required by the terms of the partnership unit agreements and the timing of the program in relation to distributions on units. |
(2) | The amounts set forth in the table and corresponding footnotes reflect the total compensation awarded to each executive officer for all years presented. |
(3) | On April 27, 2020, in response to the continuing macroeconomic impact of the COVID-19 pandemic, our executive officers volunteered to reduce their annual base salaries by 50% for Messrs. Lutnick and Gosin and by 15% for Messrs. Merkel and Rispoli. These reductions were effective as of April 27, 2020 and remained in place until December 31, 2020. This table reflects actual amounts paid to the executive officers during the year. |
(4) | The 2019 amount under column (e) for Mr. Merkel represents $976,224, which is the aggregate fair value of: (i) the redemption of 40,909 Newmark Holdings PPSUs at the determination price of $8.34 per PPSU (totaling $341,181) and redemption of 50,000 Newmark Holdings PSUs for zero and (ii) issuance of 46,660 shares of Newmark Class A Common Stock at $13.61 per share (totaling $635,043), as part of a larger redemption and shares issuance exercise approved by the Newmark Compensation Committee for Mr. Merkel on December 19, 2019. Such redeemed PSUs and PPSUs were originally issued in 2019 in connection with the issuance of underlying BGC Holdings, L.P. PSUs and PPSUs pursuant to the prior approval of the BGC Compensation Committee in 2016. In addition, the 2019 amount under column (e) for Mr. Merkel represents $1,096,054, which represents 50% of $2,192,108, which is Newmark’s allocation of (i) the redemption of 90,000 BGC Holdings PPSUs at the determination price of $6.26 per PPSU and redemption of 110,000 BGC Holdings PSUs for zero; (ii) issuance of 93,560 shares of BGC Class A Common Stock at $6.26 per share, which is less applicable taxes and withholdings; (iii) the redemption of 40,909 Newmark Holdings PPSUs at the determination price of $10.70 per PPSU and redemption of 50,000 Newmark Holdings PSUs for zero; and (iv) issuance of 42,864 shares of Newmark Class A Common Stock at $10.26 per share, which is less applicable taxes and withholdings, as approved by the BGC Compensation Committee for Mr. Merkel on February 22, 2019. The foregoing amount of $2,192,108 was allocated 50% to BGC and 50% to Newmark based on the allocation methodology for Mr. Merkel. Such redeemed BGC Holdings PSUs and PPSUs were originally issued in 2018 pursuant to the prior approval of the BGC Compensation Committee in 2016, and such redeemed Newmark Holdings PSUs and PPSUs were originally issued in 2018 in connection with the issuance of such BGC Holdings PSUs and PPSUs. |
(5) | For Mr. Gosin, column (e) does not include any of the following units, because these units had been previously granted in partial payment of prior year-end annual bonuses, commissions or base salary as non-exchangeable awards at full notional value: (i) in March 2018, 52,293 BGC Holdings APSUs, 1,146,696 BGC Holdings PSUs and 51,011 BGC Holdings PPSUs were made exchangeable. With respect to the grant of exchangeability that occurred in 2018, such grant of exchangeability also applied to the ratable portion of the Newmark Holdings interests or units held in association with such non-exchangeable BGC Holdings APSUs, BGC Holdings PSUs and BGC Holdings PPSUs, as applicable. |
(6) | For Mr. Rispoli, column (e) does not include any of the following units, because these units had previously been granted in partial payment of prior years’ annual bonuses at full notional value: (i) on April 2, 2018, 17,211 non-exchangeable BGC Holdings PSUs, and 14,082 non-exchangeable BGC Holdings PPSUs, of which 9,381 BGC Holdings PPSUs have a determination price of $9.07 per unit and 4,701 BGC |
Holdings PPSUs have a determination price of $11.40 per unit, were made exchangeable, (ii) On April 17, 2015, 2,094 BGC Holdings PSUs and 1,606 BGC Holdings PPSUs were made exchangeable, on December 1, 2015, 196 BGC Holdings PSUs and 160 BGC Holdings PPSUs were made exchangeable, on May 2, 2016, 4,755 BGC Holdings PSUs and 2,540 BGC Holdings PPSUs were made exchangeable, and on April 17, 2017, 17,040 BGC Holdings PSUs and 13,942 BGC Holdings PPSUs were made exchangeable. On June 9, 2016, 4,755 BGC Holdings PSUs were exchanged for a value of $42,528 and 2,540 BGC Holdings PPSUs for a value of $16,993. |
(7) | For Mr. Ficarro, column (e) does not include any of the following units, because these units had previously been granted in partial payment of prior year-end annual bonuses at full notional value:, (i) on May 2, 2016, 7,177 BGC Holdings PSUs and 4,765 BGC Holdings PPSUs were made exchangeable, (ii) on March 21, 2017, 15,586 BGC Holdings PSUs and 12,752 BGC Holdings PPSUs were made exchangeable, (iii) on April 24, 2017, 12,373 BGC Holdings PSUs and 10,123 BGC Holdings PPSUs were made exchangeable, and (iv) on April 2, 2018, 31,846 non-exchangeable BGC Holdings PSUs, and 25,214 non-exchangeable BGC Holdings PPSUs, of which 9,200 BGC Holdings PPSUs have a determination price of $6.05 per unit and 16,140 BGC Holdings PPSUs have a determination price of $11.40 per unit, were made exchangeable. |
(8) | For Mr. Merkel, column (e) does not include the fair value of the cancellation on December 19, 2019 of 145,464 non-exchangeable Newmark Holdings PSUs held by Mr. Merkel, and the cancellation of 178,179 non-exchangeable Newmark Holdings PPSUs (which had an average determination price of $10.61 per unit) because the foregoing units had been previously granted in partial payment of prior years’ bonuses at full notional value. Additionally, on December 19, 2019, Mr. Merkel exchanged 4,222 already exchangeable Newmark Holdings PSUs, which were units distributed to him in the Separation, in exchange for 3,940 shares of Class A common stock. These transactions resulted in Mr. Merkel being issued a total of 132,429 shares of Class A common stock. On that same day, the Company purchased Mr. Merkel’s 132,429 shares issued pursuant to the above at the closing price on the date of approval, which was $13.61, for total net proceeds of approximately $1,802,359. |
(9) | The amounts in column (g) reflect the bonus awards to our named executive officers under our Incentive Plan. For 2020, Mr. Lutnick’s Incentive Plan bonus was paid $3,450,000 in the form of 166,025 non-exchangeable Newmark Holdings PSUs and 166,025 non-exchangeable Newmark Holdings PPSUs; Mr. Gosin’s Incentive Plan bonus was paid $7,933,891 in the form of 381,804 non-exchangeable Newmark Holdings PSUs and 381,804 non-exchangeable Newmark Holdings PPSUs; Mr. Rispoli’s bonus was paid $392,288 the form of 18,878 non-exchangeable Newmark Holdings PSUs and 18,878 non-exchangeable Newmark Holdings PPSUs and Mr. Merkel’s bonus was paid $579,000 in the form of 27,864 non-exchangeable Newmark Holdings PSUs and 27,864 non-exchangeable Newmark Holdings PPSUs. |
(10) | For 2020, Mr. Gosin received commissions in the amount of $16,109 payable in connection with brokerage transactions. This amount was paid in $1,611 in cash and $14,498 in the form of 1,519 non-exchangeable Newmark Holdings NPSUs. |
(11) | Mr. Gosin receives the use of a car and driver in connection with Mr. Gosin’s duties. Such personal benefits had an aggregate incremental cost of approximately, $124,398 in 2018, $118,653 in 2019 and $103,712 in 2020. See “Compensation Discussion and Analysis—Perquisites” above. |
(12) | Mr. Ficarro resigned from the Company effective November 2018 and was not paid a bonus for 2018. |
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
(j) |
(k) |
(l) |
|||||||||||||||||||||||||||||||||
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards |
Estimated Future Payouts Under Equity Incentive Plan Awards |
All Other Grant Awards: Number of Shares of Stock or Units (#) |
All Other Option Awards: Number of Securities Underlying Options (#) |
Exercise or Base Price of Option Awards ($/Sh) |
Grant Date Fair Value of Stock and Option Awards ($) (2) |
|||||||||||||||||||||||||||||||||||||||
Name |
Grant Date |
Threshold ($) |
Target ($) |
Allowable Plan Maximum ($) (1) |
Threshold (#) |
Target (#) |
Maximum (#) |
|||||||||||||||||||||||||||||||||||||
Howard W. Lutnick |
1/1/20 | — | — | 25,000,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Barry M. Gosin |
1/1/20 | — | — | 25,000,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Michael J. Rispoli |
1/1/20 | — | — | 25,000,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Stephen M. Merkel |
1/1/20 | — | — | 25,000,000 | — | — | — | — | — | — | — |
(1) | The amounts in column (e) reflect the maximum possible individual payment under the Newmark Incentive Plan. During 2020, there were no specific minimum and target levels under the Newmark Incentive Plan. The $25,000,000 maximum amount was the maximum annual amount available for payment to any one executive officer under the Newmark Incentive Plan for 2020, and the Newmark compensation committee retained negative discretion to award less than this amount. Actual amounts paid to each named executive officer for 2020 are set forth in column (g) of the Summary Compensation Table. |
Option Awards |
Grant Awards |
|||||||||||||||||||||||||||||||||||
(a) Name |
(b) Number of Securities Underlying Unexercised Options/ Exchangeable Units Exercisable/ Exchangeable (1) (#) |
(c) Number of Securities Underlying Unexercised Options/ Exchangeable Units Unexercisable/ Unexchangeable (2) (#) |
(d) Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
(e) Option Exercise Price ($) |
(f) Option Expiration Date |
(g) Number of Shares or Units of Stock That Have Not Vested (#) (2) |
(h) Market Value of Shares or Units of Stock That Have Not Vested (2) |
(i) Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
(j) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) |
|||||||||||||||||||||||||||
Howard W. Lutnick |
1,111,933 | 0 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Barry M. Gosin |
2,035,806 | 0 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Michael J. Rispoli |
23,363 | 0 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Stephen M. Merkel |
0 | 0 | — | — | — | — | — | — | — |
(1) | For Mr. Lutnick, column (b) represents 473,073 exchangeable Newmark Holdings PSUs, 552,483 non-exchangeable PSU-H units, and 86,377 exchangeable Newmark Holdings PSUs granted in connection with the Spin-Off held as of December 31, 2020. |
(2) | Column (c) does not include non-exchangeable Newmark Holdings PPSUs held as of December 31, 2020 because they did not represent a right to acquire our Class A common stock. As of December 31, 2020, the non-exchangeable Newmark Holdings PPSUs held by the named executive officers were as follows: Mr. Lutnick, 1,564,504 units; Mr. Gosin, 1,035,682 units; Mr. Merkel, 86,649 units; and Mr. Rispoli, 63,939 units. |
Name |
Base Salary ($) |
Bonus ($) |
Earned but Unpaid Commissions |
Non-Compete Payments ($) |
Vesting of Equity Compensation ($) |
Welfare Benefit Continuation ($) |
Tax Gross- Up Payment ($) (6) |
Total ($) |
||||||||||||||||||||||||
Howard W. Lutnick |
||||||||||||||||||||||||||||||||
Termination of Employment in connection with a Change in Control(1) |
1,350,000 | 6,900,000 | — | — | — | 96,548 | — | 8,346,548 | ||||||||||||||||||||||||
Extension of Employment in connection with a Change in Control |
675,000 | 3,450,000 | — | — | — | 96,548 | — | 4,221,548 | ||||||||||||||||||||||||
Barry M. Gosin |
||||||||||||||||||||||||||||||||
Termination of Employment without Cause Prior to a Change in Control(2) |
675,000 | (4) | 2,000,000 | (5) | — | — | — | 2,675,000 | ||||||||||||||||||||||||
Termination of Employment without Cause in connection with a Change in Control(3) |
675,000 | (4) | 2,000,000 | (5) | — | — | — | 2,675,000 | ||||||||||||||||||||||||
Any Termination of Employment |
— | — | — | 2,000,000 | (5) | — | — | — | 2,000,000 |
(1) | Upon a change in control at December 31, 2020, Mr. Lutnick would have had the right to receive (i) replacement of any partnership units ineligible for exchange rights with new partnership units eligible for such exchange rights, (ii) grants of immediately exchangeable exchange rights into stock or cash, as applicable, with respect to any non-exchangeable limited partnership units (including those replacement units described in clause (i)); and (iii) the immediate lapse of any restrictions on transferability of any shares of restricted stock held by him at such time. |
(2) | Upon a termination of Mr. Gosin’s employment without cause, any unvested compensatory partnership units held by Mr. Gosin would vest immediately. At December 31, 2020, Mr. Gosin had no unvested partnership units. See “—Employment Agreements” below. |
(3) | Upon a change in control at December 31, 2020, any PSUs held by Mr. Gosin in Newmark Holdings and BGC Holdings as of such date would have been immediately exchangeable into restricted shares of Class A common stock of Newmark or BGC, as applicable, transferable ratably over the first through third anniversaries of the Change in Control, subject to certain conditions. Mr. Gosin also has this right with respect to any PSUs that he then holds in BGC Holdings in the event of a change of control of BGC Partners under the terms of his agreement with BGC Holdings. |
(4) | On December 1, 2019, Mr. Gosin’s base salary was $1,000,000, payable in cash. |
(5) | Following a termination of Mr. Gosin’s employment for any reason, he would be eligible to receive a monthly cash payment equal to $83,333 in exchange for his non-compete for up to 24 months; provided that the Company may elect to release Mr. Gosin from his non-compete and cease making such payments at any time. If the Company elected to enforce Mr. Gosin’s non-compete for the full 24-month period, the value of such payment would be $2,000,000. |
(6) | Mr. Lutnick is also entitled to a tax gross-up for excess parachute payments, if any, that would be due in respect of the impact a change in control would have on certain of his outstanding partnership units as stated in footnote (1). The aggregate tax-gross up payment upon a termination of employment in connection with a change of control is $41,529,194 when calculated based upon the equity compensation in footnote (1), base salary, bonus, and welfare benefit continuation as of December 31, 2020. The aggregate tax-gross up payment upon an extension of employment in connection with a change of control is $37,594,158 when calculated based upon the equity compensation in footnote (1), base salary, bonus, and welfare benefit continuation as of December 31, 2020. |
• | the annual total compensation of the median employee was $68,124; |
• | the annual total compensation of the Chairman, as reported in the Summary Compensation Table, was $4,125,000; and |
• | the ratio of the annual total compensation of the Chairman to the median employee of the Company was approximately 61 to 1. |
• | an annual cash retainer of $100,000, |
• | an annual stipend for the chair of our Compensation Committee of $15,000, |
• | an annual stipend for the chair of our ESG Committee of $15,000, and |
• | an annual stipend for the chair of our Audit Committee of $25,000. |
(a) Name (1) |
(b) Fees Earned or Paid in Cash ($) |
(c) Stock Awards ($)(2) |
(d) Option Awards ($)(3) |
(e) Non-Equity Incentive Plan Compensation ($) |
(f) Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) |
(g) All Other Compensation ($) |
(h) Total ($) |
|||||||||||||||||||||
Michael Snow Director |
136,062.50 | 50,000 | — | — | — | — | 186,062.50 | |||||||||||||||||||||
Virginia S. Bauer Director |
122,750 | 50,000 | — | — | — | — | 172,750 | |||||||||||||||||||||
Peter F. Cervinka Director(4) |
144,937.50 | 50,000 | — | — | — | — | 194,937.50 | |||||||||||||||||||||
Kenneth A. McIntyre Director |
122,750 | 120,000 | — | — | — | — | 242,750 |
(1) | Howard Lutnick, our Chairman, is not included in this table as he is an employee of our Company and thus received no compensation for his services as director. The compensation received by Mr. Lutnick as an employee of our Company is shown in the Summary Compensation Table. This table includes compensation paid with respect to 2020. |
(2) | Reflects the grant date fair value of RSUs granted on September 22, 2020 to each of Messrs. Cervinka, Snow and McIntyre and Ms. Bauer. More information with respect to the calculation of these amounts is included in the footnotes to our consolidated financial statements included in Item 8 of our Annual Report on Form 10-K. Mr. McIntyre received 5,465 RSUs granted on January 2, 2020 at his initial appointment. In addition, on September 22, 2020, each of Messrs. Cervinka, Snow and McIntyre and Ms. Bauer was granted 12,049 RSUs. As of December 31, 2020, Mr. Cervinka had 14,695 RSUs outstanding; Mr. Snow had 14,695 RSUs outstanding, Mr. McIntyre had 14,782 RSUs outstanding and Ms. Bauer had 14,695 RSUs outstanding. |
(3) | No options were granted to non-employee directors in 2020. As of December 31, 2020, none of the non-employee directors had any options outstanding. |
(4) | Mr. Cervinka resigned effective April 29, 2021. |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Name |
Class B Common Stock |
Class A Common Stock |
||||||||||||||
Shares |
% |
Shares |
% |
|||||||||||||
5% Beneficial Owners (1): |
||||||||||||||||
Cantor Fitzgerald, L.P. |
44,588,861 | (2) |
99.2 | (3) |
44,588,861 | (4) |
21.4 | (5) | ||||||||
CF Group Management, Inc.(10) |
44,942,187 | (6) |
100.0 | (3) |
45,967,799 | (7) |
22.0 | (8) | ||||||||
Vanguard Group Inc. |
— | — | 21,218,015 | 13.0 | ||||||||||||
BlackRock, Inc. |
— | — | 10,837,189 | 6.6 | ||||||||||||
Executive Officers and Directors (1): |
||||||||||||||||
Executive Officers |
||||||||||||||||
Howard W. Lutnick(11) |
44,942,187 | (9) |
100.0 | (3) |
57,032,062 | (12) |
26.2 | (13) | ||||||||
Barry M. Gosin |
— | — | 4,729,446 | (14) |
2.9 | (15) | ||||||||||
Stephen M. Merkel |
— | — | 13,868 | (16) |
* | |||||||||||
Michael J. Rispoli |
— | — | 23,618 | (17) |
* | |||||||||||
Directors |
||||||||||||||||
Michael Snow |
— | — | 12,171 | (18) |
* | |||||||||||
Virginia S. Bauer |
— | — | 22,079 | (19) |
* | |||||||||||
Peter F. Cervinka |
— | — | 12,079 | (20) |
* | |||||||||||
Kenneth A. McIntyre |
— | — | — | (21) |
* | |||||||||||
All executive officers and directors as a group (8 persons) |
44,942,187 | 100.0 | 61,845,324 | 28.4 | (22) |
* | Less than 1% |
(1) | Based upon information supplied by directors, executive officers and 5% beneficial owners in filings under Sections 13(d) and 16(a) of the Securities Exchange Act of 1934, as amended (which we refer to as the “Exchange Act”). |
(2) | Consists of (a) 20,932,207 shares of our Class B common stock held directly and (b) 23,656,654 shares of our Class B common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(3) | Percentage based on (a) 21,285,533 shares of our Class B common stock outstanding and (b) 23,656,654 shares of our Class B common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(4) | Consists of (a) 20,932,207 shares of our Class A common stock acquirable upon conversion of 20,932,207 shares of our Class B common stock held directly by Cantor and (b) 23,656,654 shares of our Class A common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(5) | Percentage based on (a) 163,164,204 shares of our Class A common stock outstanding as of March 31, 2021, (b) 20,932,207 shares of our Class A common stock acquirable upon conversion of 20,932,207 shares of our Class B common stock held by Cantor, and (c) 23,656,654 shares of our Class A common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(6) | Consists of (a) 353,326 shares of our Class B common stock held by CFGM, (b) 20,932,207 shares of our Class B common stock held by Cantor, and (c) 23,656,654 shares of our Class B common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(7) | Consists of (a) 353,326 shares of our Class A common stock acquirable upon conversion of 353,326 shares of our Class B common stock held by CFGM, (b) 951,076 shares of our Class A common stock acquirable upon exchange of 951,076 April 2008 distribution rights by CFGM, receipt of which has been deferred, (c) 74,536 shares of our Class A common stock acquirable upon exchange of 74,536 February 2012 distribution rights by CFGM, receipt of which has been deferred, (d) 20,932,207 shares of our Class A common stock acquirable upon conversion of 20,932,207 shares of our Class B common stock held by Cantor, and (e) 23,656,654 shares of our Class A common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(8) | Percentage based on (a) 163,164,204 shares of our Class A common stock outstanding as of March 31, 2021, (b) 21,285,533 shares of our Class A common stock acquirable upon conversion of 21,285,533 shares of our Class B common stock held by Cantor and CFGM (c) 23,656,654 shares of our Class A common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership units held by Cantor, (d) 951,076 shares of our Class A common stock acquirable upon exchange of 951,076 April 2008 distribution rights by CFGM, receipt of which has been deferred, and (e) 74,536 shares of our Class A common stock acquirable upon exchange of 74,536 February 2012 distribution rights by CFGM, receipt of which has been deferred. |
(9) | Consists of (a) 353,326 shares of our Class B common stock held by CFGM, (b) 20,932,207 shares of our Class B common stock held by Cantor, and (c) 23,656,654 shares of our Class B common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership units held by Cantor. |
(10) | CFGM is the managing general partner of Cantor. |
(11) | Mr. Lutnick is the Chairman and Chief Executive Officer of CFGM and also the trustee of an entity that is the sole shareholder of CFGM. CFGM is the managing general partner of Cantor. |
(12) | Mr. Lutnick’s holdings consist of: |
(i) | 2,334,940 shares of our Class A common stock held directly; |
(ii) | 232,327 of our Class A common stock held in Mr. Lutnick’s 401(k) account (as of March 31, 2021); |
(iii) | 1,682,570 shares of our Class A common stock held in various trust, retirement and custodial accounts consisting of (a) 960,989 shares held in Mr. Lutnick’s grantor retained annuity trust (GRAT), (b) 301,803 shares held by a trust for the benefit of descendants of Mr. Lutnick and his immediate family (the “Trust”), of which Mr. Lutnick’s wife is one of two trustees and Mr. Lutnick has limited powers to remove and replace such trustees, (c) 107,251 shares held in a Keogh retirement account for Mr. Lutnick, (d) 249,498 shares held by trust accounts for the benefit of Mr. Lutnick and members of his immediate family, (e) 37,918 shares held in Mr. Lutnick’s personal asset trust, of which he is the sole trustee, (f) 13,268 shares held in other retirement accounts, (g) 7,827 shares held in custodial accounts for the benefit of certain members of Mr. Lutnick’s family under the Uniform Gifts to Minors Act, and (h) 4,016 shares of Class A common stock held in other retirement accounts for Mr. Lutnick’s spouse; |
(iv) | 353,326 shares of our Class A common stock acquirable upon conversion of 353,326 shares of our Class B common stock held by CFGM; |
(v) | 20,932,207 shares of our Class A common stock acquirable upon conversion of 20,932,207 shares of our Class B common stock held by Cantor; |
(vi) | 23,656,654 shares of our Class A common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership interests held by Cantor; |
(vii) | 3,591,626 shares of our Class A common stock acquirable upon exchange of 3,591,626 April 2008 distribution rights by Mr. Lutnick, receipt of which has been deferred; |
(viii) | 571,238 shares of our Class A common stock acquirable upon exchange of 571,238 February 2012 distribution rights by Mr. Lutnick, receipt of which has been deferred; |
(ix) | 951,076 shares of our Class A common stock acquirable upon exchange of 951,076 April 2008 distribution rights by CFGM, receipt of which has been deferred; |
(x) | 74,536 shares of our Class A common stock acquirable upon exchange of 74,536 February 2012 distribution rights by CFGM, receipt of which has been deferred; |
(xi) | 746,955 shares of our Class A common stock acquirable upon exchange of 746,955 April 2008 distribution rights by the Trust, receipt of which has been deferred; |
(xii) | 950,057 shares of our Class A common stock acquirable upon exchange of 950,057 April 2008 distribution rights by KBCR, by virtue of Mr. Lutnick being the managing member of KBCR, which is a non-managing General Partner of Cantor, receipt of which has been deferred; |
(xiii) | 133,587 shares of our Class A common stock acquirable upon exchange of 133,587 February 2012 distribution rights by KBCR, receipt of which has been deferred; |
(xiv) | 75,077 shares of our Class A common stock acquirable upon exchange of 75,077 April 2008 distribution rights by LFA, receipt of which has been deferred; |
(xv) | 7,512 shares of our Class A common stock acquirable upon exchange of 7,512 February 2012 distribution rights by LFA, receipt of which has been deferred; |
(xvi) | 278,772 shares of our Class A common stock owned of record by KBCR; |
(xvii) | 16,557 shares of our Class A common stock owned of record by LFA; and |
(xviii) | 443,045 shares of Class A common stock acquirable upon exchange of 473,072 Newmark Holdings exchangeable limited partnership units by Mr. Lutnick. |
(13) | Percentage based on (a) 163,164,204 shares of Class A common stock outstanding as of March 31, 2021, (b) 21,285,533 shares of Class A common stock outstanding acquirable upon conversion of 21,285,533 shares of our Class B common stock held by Cantor and CFGM (c) 23,656,654 shares of Class A common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership interests held by Cantor, (d) 3,591,626 shares of our Class A common stock acquirable upon exchange of 3,591,626 April 2008 distribution rights by Mr. Lutnick, receipt of which has been deferred, (e) 571,238 shares of our Class A common stock acquirable upon exchange of 571,238 February 2012 distribution rights by Mr. Lutnick, receipt of which has been deferred, (f) 951,076 shares of our Class A common stock acquirable upon exchange of 951,076 April 2008 distribution rights by CFGM, receipt of which has been deferred, (g) 74,536 shares of our Class A common stock acquirable upon exchange of 74,536 February 2012 distribution rights by CFGM, receipt of which has been deferred, (h) 746,955 shares of our Class A common stock acquirable upon exchange of 746,955 April 2008 distribution rights by the Trust, receipt of which has been deferred, (i) 950,057 shares of our Class A common stock acquirable upon exchange of 950,057 April 2008 distribution rights by KBCR, receipt of which has been deferred, (j) 133,587 shares of our Class A common stock acquirable upon exchange of 133,587 February 2012 distribution rights by KBCR, receipt of which has been deferred, (k) 75,077 shares of our Class A common stock acquirable upon exchange of 75,077 April 2008 distribution rights by LFA, receipt of which has been deferred, (l) 7,512 shares of our Class A common stock acquirable upon exchange of 7,512 February 2012 distribution rights by LFA, receipt of which has been deferred and (m) 443,045 shares of Class A common stock acquirable upon exchange of 473,072 Newmark Holdings exchangeable limited partnership units by Mr. Lutnick. |
(14) | Mr. Gosin’s holdings consists of (a) 2,771,662 shares of our Class A common stock held directly, and (b) 1,957,784 shares of our Class A common stock acquirable upon exchange of 2,090,472 Newmark Holdings exchangeable limited partnership units. |
(15) | Percentage based on (a) 163,164,204 shares of our Class A common stock outstanding as of July 31, 2020, and (b) 1,957,784 shares of our Class A common stock acquirable upon exchange of 2,090,472 Newmark Holdings exchangeable limited partnership units held by Mr. Gosin. |
(16) | Mr. Merkel’s holdings consist of 10,967 shares of our Class A common stock held directly, and (b) 2,901 held in trusts for the benefit of the Mr. Merkel’s immediate family, of which Mr. Merkel’s spouse is the sole trustee of each trust and Mr. Merkel has the power to remove and replace such trustee. |
(17) | Mr. Rispoli’s holdings consists of (a) 1,962 shares of our Class A common stock held directly, and (b) 21,656 shares of our Class A common stock acquirable upon exchange of 23,124 Newmark Holdings exchangeable partnership units. |
(18) | Mr. Snow’s holdings consist of (a) 12,159 shares of our Class A common stock held directly, and (b) 12 shares of our Class A common stock held by Mr. Snow’s son. |
(19) | Ms. Bauer’s holdings consist of 22,079 shares of our Class A common stock held directly. |
(20) | Mr. Cervinka’s holdings consist of 12,079 shares of our Class A common stock held directly. Effective April 29, 2021, Mr. Cervinka resigned from the Board. |
(21) | Mr. McIntyre does not beneficially own any of our Class A common stock. |
(22) | Percentage based on (a) 163,164,204 shares of our Class A common stock outstanding as of July 31, 2020, (b) 21,285,533 shares of our Class A common stock acquirable upon conversion of 21,285,533 shares of our Class B common stock, (c) 23,656,654 shares of our Class A common stock acquirable upon exchange of 25,259,977 Newmark Holdings exchangeable limited partnership units held by Cantor, (d) 2,422,485 shares of our Class A common stock acquirable upon exchange of 2,586,668 Newmark Holdings exchangeable limited partnership units held by our executive officers and directors, (e) 3,591,626 shares of our Class A common stock acquirable upon exchange of 3,591,626 April 2008 distribution rights by Mr. Lutnick, receipt of which has been deferred, (f) 571,238 shares of our Class A common stock acquirable upon exchange of 571,238 February 2012 distribution rights by Mr. Lutnick, receipt of which has been deferred, (g) 951,076 shares of our Class A common stock acquirable upon exchange of 951,076 April 2008 distribution rights by CFGM, receipt of which has been deferred, (h) 74,536 shares of our Class A common stock acquirable upon exchange of 74,536 February 2012 distribution rights by CFGM, receipt of which has been deferred, (i) 746,955 shares of our Class A common stock acquirable upon exchange of 746,955 April 2008 distribution rights by the Trust, receipt of which has been deferred, (j) 950,057 shares of our Class A common stock acquirable upon exchange of 950,057 April 2008 distribution rights by KBCR, receipt of which has been deferred, (k) 133,587 shares of our Class A common stock acquirable upon exchange of 133,587 February 2012 distribution rights by KBCR, receipt of which has been deferred, (l) 75,077 shares of our Class A common stock acquirable upon exchange of 75,077 April 2008 distribution rights by LFA, receipt of which has been deferred, and (m) 7,512 shares of our Class A common stock acquirable upon exchange of 7,512 February 2012 distribution rights by LFA, receipt of which has been deferred. |
Number of securities to be issued upon exercise of outstanding restricted stock units, options, warrants and rights (a) |
Weighted-average exercise price of outstanding options, warrants and rights (b) |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
||||||||||
Equity Plan (approved by security holders) |
20,571,354 | $ | 7.52 | 366,036,902 | ||||||||
Equity compensation plans not approved by security holders |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total |
20,571,354 | $ | 7.52 | 366,036,902 |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
• | the principal corporate transactions pursuant to which BGC, BGC Holdings and BGC U.S. OpCo and their respective subsidiaries (other than the Newmark group (defined below), the “BGC group”) transferred to Newmark, Newmark Holdings and Newmark OpCo and their respective subsidiaries (the “Newmark group”) the assets and liabilities of the BGC group relating to BGC’s Real Estate Services business (the “Separation”); |
• | the proportional distribution in the Separation of interests in Newmark Holdings to holders of interests in BGC Holdings; |
• | the IPO and certain pre-IPO contributions of assets by BGC Partners to Newmark in exchange for additional shares thereof; |
• | the assumption and repayment of indebtedness by the BGC group and the Newmark group, as further described below; |
• | the Spin-Off, including the termination of certain arrangements between the BGC Group and the Newmark Group immediately prior thereto; |
• | future access to information, records and personnel necessary or appropriate to comply with regulatory requests or inquiries, for the preparation of financial statements or tax returns, or to conduct litigation; and |
• | other agreements governing the relationship between BGC, Newmark and Cantor. |
• | the transferred liabilities; |
• | the failure of any member of the Newmark group or any other person to pay, perform or otherwise promptly discharge any of the transferred liabilities in accordance with their terms, whether prior to, at or after the Separation; |
• | any breach by any member of the Newmark group of the Separation and Distribution Agreement or any of the ancillary agreements, other than the transition services agreement or the administrative services agreement; |
• | except to the extent relating to an excluded liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement or arrangement for the benefit of any member of the Newmark group by any member of the BGC Partners group that survives following the Separation; and |
• | any untrue statement or alleged untrue statement of a material fact in our registration statement on Form S-1 with respect to our IPO other than statements made explicitly in the name of a member of the BGC Partners group (including the reasons of the Board of Directors of BGC Partners for the Separation) or specifically relating to the BGC Partners group or the BGC Partners business. |
• | the excluded liabilities; |
• | the failure of any member of the BGC Partners group or any other person to pay, perform or otherwise promptly discharge any of the excluded liabilities in accordance with their terms, whether prior to, at or after the Separation; |
• | any breach by any member of the BGC Partners group of the Separation and Distribution Agreement or any of the ancillary agreements, other than the transition services agreement; |
• | except to the extent relating to a transferred liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement or arrangement for the benefit of any member of the BGC Partners group by any member of the Newmark group that survives following the Separation; and |
• | any untrue statement or alleged untrue statement of a material fact in our registration statement on Form S-1 with respect to our IPO, but only with respect to statements made explicitly in the name of a member of the BGC Partners group (including the reasons of the Board of Directors of BGC Partners for the Separation) or specifically relating to the BGC Partners group or the BGC Partners business. |
• | a general partnership interest, which is held indirectly by us; |
• | a special voting limited partnership interest, which is held indirectly by us and which entitles us to remove and appoint the general partner of Newmark Holdings; |
• | Newmark Holdings exchangeable limited partnership interests, which are held by Cantor; |
• | Newmark Holdings founding partner interests, which are limited partnership interests that will be issued in the Separation in respect of BGC Holdings founding partner interests (which were issued to certain partners in connection with the 2008 separation of BGC Partners from Cantor); and |
• | Newmark Holdings limited partnership interests and units, including REU and AREU interests and working partner interests (including RPU, ARPU, PSI, PSE, APSI, PSU, APSU, LPU and NPSU interests and Preferred Units). |
• | pursuant to the Separation or as otherwise contemplated by the Separation and Distribution Agreement or the Newmark Holdings limited partnership agreement; |
• | to Cantor and members of the Cantor group, (1) in connection with a reinvestment in Newmark Holdings or (2) in the event of a termination or bankruptcy of a founding/working partner or limited partnership unit holder or the redemption of a founding/working partner interest or limited partnership unit pursuant to the Newmark Holdings limited partnership agreement; |
• | with respect to Newmark Holdings founding/working partner interests, to an eligible recipient, which means any limited partner or member of the Cantor group or any affiliate, employee service provider or partner thereof, in each case as directed by a Newmark Holdings exchangeable limited partner majority in interest (provided that such person or entity is not primarily engaged in a business that competes with Newmark Holdings or its subsidiaries); |
• | as otherwise agreed by the general partner and a Newmark Holdings exchangeable limited partner interest majority in interest; |
• | pursuant to the Participation Plan; |
• | to any then-current founding/working partner or limited partnership unit holder pursuant to the Newmark Holdings limited partnership agreement; or |
• | to any Newmark Holdings partner in connection with a conversion of an issued unit and interest into a different class or type of unit and interest. |
• | If the legacy BGC Holdings units and legacy Newmark Holdings unit are held by an employee of the BGC group providing services solely to the BGC group, then BGC Partners shall make such determination; |
• | If the legacy BGC Holdings units and legacy Newmark Holdings unit are held by an employee of the Newmark group providing services solely to the Newmark group, then Newmark shall make such determination; and |
• | If the legacy BGC Holdings units and legacy Newmark Holdings unit are held by an employee of the BGC group, the Newmark group or the Cantor group providing services to both the BGC group and the Newmark group, then BGC Partners shall make such determination to the extent that the grant of the exchange right relates to compensation for services by such employee to the BGC group, and Newmark shall make such determination to the extent that the grant of the exchange right relates to compensation for services by such employee to the Newmark group. Grants of exchangeability may be made at any time in the discretion of the relevant service recipient, and future grant practices may differ from prior practices, including without limitation in connection with performance achievement, changes in incentive arrangements, accounting principles, and tax laws (including deductibility of compensation) and other applicable laws. |
• | amend any provisions which require the consent of a specified percentage in interest of the limited partners without the consent of that specified percentage in interest of the limited partners; |
• | alter the interest of any partner in the amount or timing of distributions or the allocation of profits, losses or credits, if such alteration would either materially adversely affect the economic interest of a partner or would materially adversely affect the value of interests, without the consent of the partners holding at least two-thirds of all units, in the case of an amendment applying in substantially similar manner to all classes of interests, or two-thirds in interest of the affected class or classes of the partners, in the case of any other amendment; or |
• | alter the special voting limited partner’s ability to remove a general partner. |
• | a general partnership interest, which is held indirectly by Newmark Holdings; |
• | limited partnership interests, which are held by Newmark and Newmark Holdings; and |
• | a special voting limited partnership interest, which is held indirectly by Newmark Holdings and which entitles the holder thereof to remove and appoint the general partner of Newmark OpCo. |
• | pursuant to the Separation; |
• | to Newmark and/or Newmark Holdings and members of their group, as the case may be, in connection with an investment in Newmark OpCo; |
• | to Newmark Holdings or members of its group in connection with a redemption pursuant to the Newmark Holdings limited partnership agreement; |
• | as otherwise agreed by each of the general partner and the limited partners (by affirmative vote of the limited partners holding a majority of the units underlying limited partnership interests outstanding of Newmark OpCo (except that if Newmark Holdings and its group holds a majority in interest and Cantor and its group holds a majority of units underlying the Newmark Holdings exchangeable limited partnership interests, then majority of interest means Cantor) (which we refer to as a “Newmark OpCo majority in interest”)); |
• | to Newmark or Newmark Holdings in connection with a grant of equity by Newmark or Newmark Holdings; and |
• | to any Newmark OpCo partner in connection with a conversion of an issued unit and interest into a different class or type of unit and interest. |
• | amend any provisions which require the consent of a specified percentage in interest of the limited partners without the consent of that specified percentage in interest of the limited partners; |
• | alter the interest of any partner in the amount or timing of distributions or the allocation of profits, losses or credits, if such alteration would either materially adversely affect the economic interest of a partner or would materially adversely affect the value of interests, without the consent of the partners holding at least two-thirds of all units, in the case of an amendment applying in substantially similar manner to all classes of interests, or two-thirds in interest of the affected class or classes of the partners, in the case of any other amendment; or |
• | alter the special voting limited partner’s ability to remove a general partner. |
• | the Adjustment Factor shall be equal to the Reinvestment Cash divided by the Newmark Current Market Price (as defined in the Separation and Distribution Agreement) as of the day prior to the date on which the adjustment to the Exchange Ratio is made for such fiscal quarter; provided |
• | if, in any subsequent fiscal quarter, the Exchange Ratio shall be further adjusted and the Newmark Current Market Price as of the day prior to the date on which such further adjustment is made is greater than the Newmark Current Market Price used in the bullet above, then the Adjustment Factor for such prior fiscal quarter shall be re-calculated using such greater Newmark Current Market Price. |
• | administration and benefits services; |
• | employee benefits, human resources and payroll services; |
• | financial and operations services; |
• | internal auditing services; |
• | legal related services; |
• | risk and credit services; |
• | accounting and general tax services; |
• | office space; |
• | personnel, hardware and equipment services |
• | communication and data facilities; |
• | facilities management services; |
• | promotional, sales and marketing services; |
• | procuring of insurance coverage; and |
• | any miscellaneous services to which the parties reasonably agree. |
• | potential acquisitions and dispositions of businesses; |
• | the issuance, acquisition or disposition of securities by us; |
• | the election of new or additional directors to our Board of Directors; |
• | the payment of dividends by us (if any), distribution of profits by Newmark OpCo and/or Newmark Holdings and repurchases of shares of our Class A common stock or purchases of Newmark Holdings limited partnership interests or other equity interests in our subsidiaries, including from Cantor or our executive officers, other employees, partners and others; |
• | any loans to or from us or Cantor |
• | business operations or business opportunities of ours and Cantor’s that would compete with the other party’s business opportunities; |
• | intellectual property matters; |
• | business combinations involving us; and |
• | the nature, quality and pricing of administrative services and transition services to be provided to or by BGC Partners or Cantor or their respective affiliates |
• | such contract, agreement, arrangement or transaction is approved by our Board of Directors or any committee thereof by the affirmative vote of a majority of the disinterested directors, even if the disinterested directors constitute less than a quorum; |
• | such contract, agreement, arrangement or transaction is approved by our stockholders by the affirmative vote of a majority of the voting power of all of our outstanding shares of capital stock entitled to vote thereon, excluding from such calculation shares of capital stock that are beneficially owned (as such term is defined in Rule 16a-1(a)(2) promulgated by the SEC under the Exchange Act) by a BGC Partners Company or a Cantor Company, respectively; or |
• | such contract, agreement, arrangement or transaction, judged according to the circumstances at the time of the commitment, is fair to us. |
• | “BGC Partners Company” means BGC Partners or any of its affiliates (other than us and our subsidiaries); |
• | “Cantor Company” means Cantor or any of its affiliates (other than us and our subsidiaries); |
• | “representatives” means, with respect to any person, the directors, officers, employees, general partners or managing member of such person; and |
• | “corporate opportunity” means any business opportunity that we are financially able to undertake, that is, from its nature, in our lines of business, is of practical advantage to us and is one in which we have an interest or a reasonable expectancy, and in which, by embracing the opportunities, the self-interest of a BGC Partners Company or a Cantor Company or any of their respective representatives, as the case may be, will be brought into conflict with our self-interest. |
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Year Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Audit fees |
$ | 2,719,554 | $ | 2,716,056 | ||||
Audit-related fees |
195,090 | 206,506 | ||||||
Tax fees |
1,426,640 | 750,964 | ||||||
All other fees |
— | — | ||||||
|
|
|
|
|||||
Total |
$ | 4,341,284 | $ | 3,673,526 | ||||
|
|
|
|
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
Newmark Group, Inc. | ||
By: | /s/ Howard W. Lutnick | |
Name: | Howard W. Lutnick | |
Title: | Chairman |