Attached files
| file | filename |
|---|---|
| EX-10.3 - SEVERANCE AGREEMENT - R. BRADLEY FORTH - HIGHBURY FINANCIAL INC | v168844_ex10-3.htm |
| EX-10.2 - SEVERANCE AGREEMENT - RICHARD S. FOOTE - HIGHBURY FINANCIAL INC | v168844_ex10-2.htm |
| EX-10.1 - AGREEMENT OF PLAN OF MERGER - HIGHBURY FINANCIAL INC | v168844_ex10-1.htm |
| EX-10.5 - TERMINATION AGREEMENT - ASTON ASSET MANAGEMENT LLC. - HIGHBURY FINANCIAL INC | v168844_ex10-5.htm |
| EX-99.1 - PRESS RELEASE - HIGHBURY FINANCIAL INC | v168844_ex99-1.htm |
| EX-10.6 - AMENDMENT NUMBER ONE TO RIGHTS AGREEMENT - HIGHBURY FINANCIAL INC | v168844_ex10-6.htm |
| EX-10.4 - TERMINATION AGREEMENT - BERKSHIRE CAPITAL SECURITIES LLC - HIGHBURY FINANCIAL INC | v168844_ex10-4.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
Of Report (Date Of Earliest Event Reported): December 12, 2009
Highbury
Financial Inc.
(Exact
name of Registrant as Specified in its Charter)
|
Delaware
|
20-3187008
|
|
|
(State
of Other Jurisdiction Of
|
(I.R.S.
Employer
|
|
|
Incorporation
or Organization)
|
Identification
No.)
|
999
Eighteenth Street, Suite 3000
Denver,
CO 80202
(Address
of Principal Executive Offices, Including Zip Code)
(303)
357-4802
(Registrant’s
Telephone Number, Including Area Code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
x Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
x Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-
2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01 Entry Into a Material Definitive Agreement
The
Merger Agreement
General
On
December 12, 2009, Highbury Financial Inc. (“Highbury”) entered into an
Agreement and Plan of Merger (the “Merger Agreement”) by and among Affiliated
Managers Group, Inc., a Delaware corporation publicly traded on the New York
Stock Exchange (“AMG”), Manor LLC, a newly formed Delaware limited liability
company and a wholly-owned subsidiary of AMG (“Merger Sub”), and Highbury,
pursuant to which Highbury will merge with and into the Merger Sub (the
“Merger”). Following the Merger, the separate corporate existence of
Highbury will cease and Merger Sub will continue as the surviving limited
liability company under the name “Manor LLC” and be the wholly-owned subsidiary
of AMG.
Consideration
Pursuant
to the Merger Agreement, the holders of shares of common stock, par value
$0.0001 per share, of Highbury (the “Highbury Common Stock”) will receive
1,748,879 shares of common stock, par value $0.01 per share (the “AMG Common
Stock”), in the aggregate as consideration in the Merger (the “Aggregate Merger
Consideration”), subject to potential adjustment as described
below. At the effective time of the Merger, each share of Highbury
Common Stock issued and outstanding immediately prior to the effective time of
the Merger will be cancelled and automatically converted into the right to
receive such number of shares of AMG Common Stock as is equal to the Aggregate
Merger Consideration divided by the number of shares of Highbury Common Stock
issued and outstanding immediately prior to the effective time of the Merger,
following (i) the exchange of Series B Convertible Preferred Stock, par value
$0.0001 per share, of Highbury (the “Series B Preferred Stock”) for newly issued
shares of Highbury Common Stock pursuant to the terms of an exchange agreement
entered into by Highbury with each holder of Series B Preferred Stock and (ii)
the exercise or expiration of all of Highbury’s outstanding warrants which
expire on January 25, 2010 (other than shares owned or held directly by Highbury
and other than shares of Highbury Common Stock held by stockholders who are
entitled to demand and have properly demanded appraisal rights in connection
with the Merger). Assuming that all of Highbury’s outstanding
warrants are exercised and the Aggregate Merger Consideration is not adjusted,
then of the 1,748,879 shares of AMG Common Stock that will be issued as
consideration in the Merger, 336,729 shares will be issued to the former holders
of the Series B Preferred Stock. If the revenue run rate of
Highbury’s wholly-owned operating subsidiary, Aston Asset Management LLC
(“Aston”), as of the end of the calendar month prior to the closing of the
Merger, attributable to clients who consent to continuing their agreements
following the Merger is less than 90% of the revenue run rate as of November 30,
2009 (without giving effect to market movement between those two dates) then the
Aggregate Merger Consideration payable to Highbury stockholders will be reduced
by 1% for each 1% by which the revenue run rate as of the end of the calendar
month prior to the closing of the Merger is less than 90% of the revenue run
rate as of November 30, 2009 (without giving effect to market movement between
those two dates).
In
addition, immediately prior to the closing of the Merger, subject to applicable
law and the terms of the Merger Agreement, the board of directors of Highbury is
permitted to declare a special dividend, payable upon the closing of the Merger,
to all holders of record of shares of Highbury Common Stock immediately prior to
the effective time of the Merger (including the holders of shares of Highbury
Common Stock issued in exchange for shares of Series B Preferred Stock) in an
aggregate amount equal to Highbury’s working capital (including all Highbury
liabilities then outstanding) as of the end of the calendar month prior to the
closing of the Merger minus $5,000,000.
In
connection with the Merger Agreement, each holder of shares of Highbury’s Series
B Preferred Stock has agreed, immediately prior to the closing of the Merger, to
exchange its shares of Series B Preferred Stock, and any accrued and unpaid
dividends thereon, for shares of Highbury Common Stock. The exchange
ratio shall be the same as set forth in the Certificate of Designation of the
Series B Preferred Stock.
Closing
The
closing of the Merger will take place on the tenth business day after the first
calendar month in which the conditions to the Merger contained in the Merger
Agreement are either satisfied or waived.
Representations
and Warranties
The
Merger Agreement contains customary representations and warranties made by
Highbury, on the one hand, and AMG and Merger Sub, as applicable, on the other
hand. Such representations relate to, among other things, (a) proper corporate
organization and similar corporate matters, (b) capital structure, (c) the
absence of undisclosed liabilities and changes, (d) assets, properties and
intellectual property, (e) contracts, (f) compliance with laws, (g) litigation,
(h) related party transactions, (i) taxes, (j) regulatory reports and financial
statements, (k) employee benefits and (l) certain matters relating to
Aston.
Covenants
Each
party to the Merger Agreement has agreed to perform or comply with certain
customary covenants, including but not limited to, covenants related to (a) the
parties’ conduct of their respective businesses between the signing and closing
of the Merger Agreement, (b) restrictions on Highbury’s ability to solicit,
negotiate or enter into an acquisition transaction with another party, (c) the
parties’ cooperation and efforts to prepare and file a joint proxy statement
with respect to the Merger and a registration statement for the shares of AMG
Common Stock to be issued as consideration in the Merger and the effectiveness
of the registration statement, (d) requirements to call a meeting of the
Highbury stockholders in order to obtain the requisite stockholders approval of
the Merger, (e) requirements to use reasonable best efforts to obtain board and
shareholder approvals of each registered investment company advised by Aston of
new advisory contracts with Aston to be in effect after the closing of the
Merger, the election of certain nominees to the board of trustees of each such
registered investment company and the continuation of each of Aston’s existing
sub-advisory contracts, (f) using reasonable best efforts to make all
appropriate regulatory and other filings, and to obtain all required
governmental approvals (including antitrust approvals) and third-party consents
to the Merger, (g) Highbury’s obligation to provide AMG with access to
information concerning its business, including monthly financing statements and
information concerning assets under management (subject to confidentiality
obligations), (h) making public announcements between the signing and closing of
the Merger Agreement and (i) certain other customary covenants.
Closing
Conditions
The
obligations of each of Highbury and AMG to complete the Merger are subject to
the satisfaction or waiver by the other party at or prior to the closing date of
various conditions, including: (a) the approval of the Merger by the
stockholders of Highbury; (b) the receipt of all required regulatory approvals,
including approval under the Hart-Scott Rodino Antitrust Improvements Act; (c)
the effectiveness of the registration statement covering the shares of AMG
Common Stock to be issued under the Merger Agreement and the approval of such
shares for listing on the New York Stock Exchange; (d) confirmation that all of
the outstanding Highbury warrants have expired or have been exercised in full,
in accordance with their terms; (e) the revenue run rate of Aston as of the end
of the month prior to the closing of the Merger being at least equal to 82.5% of
the revenue run rate as of November 30, 2009 (giving effect to market
movements); and (f) the revenue run rate of Aston as of the end of the month
prior to the closing of the Merger, attributable to clients who consent to
continuing their agreements with Aston following the Merger, being at least
equal to 80% of the revenue run rate as of November 30, 2009 (without giving
effect to market movements).
In
addition, the parties’ obligations to complete the Merger are subject to the
satisfaction or waiver by the other party at or prior to the closing date of the
following conditions: (a) the accuracy of the parties’ respective
representations and warranties contained in the Merger Agreement; (b) the
performance by each of Highbury and AMG in all material respects of their
respective obligations under the Merger Agreement; (c) the receipt by each
registered investment company advised by Aston of board and shareholder approval
of a new advisory contract with Aston, and the election of not less than nine
AMG nominees to the board of trustees of each such registered investment
company; (d) the receipt by each registered investment company advised by Aston
of board approval of certain sub-advisory agreements with Aston and the
continued effectiveness of certain specified sub-advisory agreements and related
agreements with Aston; (e) the continued effectiveness of certain ancillary
agreements described below and the continued employment by Aston of certain
individuals; and (f) the absence of a material adverse effect (as defined in the
Merger Agreement) on either Highbury or AMG.
In
addition, upon entering into the Merger Agreement, AMG also entered into
separate voting agreements with each of Stuart D. Bilton, Kenneth C. Anderson,
R. Bruce Cameron, Richard S. Foote, Aidan J. Riordan, Hoyt Ammidon Jr., R.
Bradley Forth, Broad Hollow LLC and Woodbourne Partners,
L.P. pursuant to which, each of the stockholders has agreed, subject
to the terms thereof, to vote all shares of Highbury Common Stock and Series B
Preferred Stock owned by them in accordance with the terms of the voting
agreement. The shares of Highbury Common Stock and Series B Preferred
Stock subject to voting agreements represent, in the aggregate, 5,607,813
shares, or approximately 30% of the shares, of Highbury Common Stock entitled to
vote to approve the Merger.
Termination
The
Merger Agreement may be terminated prior to closing:
(1) by
mutual written consent of Highbury and AMG;
(2) by
AMG if the board of directors of Highbury fails to recommend, or withdraws or
modifies its recommendation of the Merger Agreement to its stockholders, fails
to call or hold the stockholders meeting or breaches any of its material
obligations relating to entering into transactions with other
parties;
(3) by
Highbury prior to the approval of the Merger and Merger Agreement by the
required votes, if the board of directors of Highbury determines in good faith
and after consultation with its advisors that failure to terminate the Merger
Agreement would be inconsistent with its fiduciary duties;
(4) by
either Highbury or AMG if:
(a) the
Merger is not consummated on or before August 13, 2010;
(b) a
governmental authority enters a final and non-appealable order that prohibits
the Merger;
(c) the
holders of Highbury Common Stock (including the holders of the Series B
Preferred Stock who will vote together with the holders of Highbury Common Stock
in accordance with the Certificate of Designation for the Series B Preferred
Stock) fail to approve the Merger;
(d) the
other party is in breach of the Merger Agreement in a manner which prevents
satisfaction of the closing conditions, which breach either is not capable of
being cured or is not cured within 10 business days’ following notice of such
breach, provided that the terminating party is not in material breach of the
Merger Agreement; or
(e) if
a material adverse effect (as defined in the Merger Agreement) has occurred with
respect to the other party.
If the
Merger Agreement is terminated as a result of (4)(c) above, Highbury will pay
AMG’s reasonable transaction expenses, up
to $1,000,000. If the Merger Agreement is terminated by
AMG pursuant to (2) above or by Highbury pursuant to (3) above, Highbury must
pay a termination fee to AMG of $3.6 million less any previously paid
expenses. Highbury will also be required to pay AMG the termination
fee if either party terminates the Merger Agreement pursuant to (4)(c) above or
AMG terminates the Merger Agreement pursuant to 4(d) above and, in either case,
an acquisition proposal was publicly made by a third party with respect to
Highbury at the time of such termination and within 12 months of termination
Highbury (i) enters into a definitive agreement with respect to an acquisition
proposal, and such proposal is subsequently consummated, or (ii) consummates
such acquisition proposal.
The
foregoing is a summary of the material terms of the Merger Agreement, a copy of
which is attached as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated herein by reference. This summary is qualified in its entirety by
reference to the Merger Agreement.
The
Merger Agreement has been included to provide investors and security holders
with information regarding its terms. It is not intended to provide any factual
information about AMG or Highbury. The representations and warranties were made
only for purposes of such agreement and as of the specific dates set forth
therein, were solely for the benefit of the parties to the Merger Agreement, and
may be subject to limitations agreed upon by the contracting parties, including
being qualified by confidential disclosures exchanged between the parties in
connection with the execution of the Merger Agreement. The representations and
warranties may have been made for the purpose of allocating contractual risk
between the parties to the Merger Agreement, with respect to certain
matters,
rather than for the purpose of establishing these matters as facts,
and may be subject to standards of materiality applicable to the contracting
parties that differ from those applicable to investors. Investors and security
holders are not, and are not intended to be, third party beneficiaries under the
Merger Agreement, and should not rely on the representations and warranties as
characterizations of the actual state of facts or conditions of AMG or Highbury.
Moreover, information concerning the subject matter of the representations and
warranties may change after the date of the Merger Agreement, which subsequent
information may or may not be fully reflected in AMG’s or Highbury’s public
disclosures.
Amended
and Restated Limited Partnership Agreement of Aston Asset Management,
LP
In
connection with the entering into of the Merger Agreement, Aston, Merger Sub and
certain employee members of the Aston management team entered into an Amended
and Restated Limited Partnership Agreement of Aston (the “LP Agreement”) to be
effective immediately prior to the closing of the Merger. Pursuant to
the terms of the LP Agreement, immediately prior to the closing of the Merger,
Aston will be converted into a limited partnership under Delaware law and shall
operate under the LP Agreement following such conversion. Merger Sub
will be the general partner of the partnership following such conversion, and
the Aston management employees will be limited partners of the
partnership. Pursuant to the LP Agreement, 67% of the revenues (the
“Operating Allocation”) of Aston is allocated for use by management of Aston to
pay the operating expenses of Aston, including salaries and
bonuses. The remaining 33% of the revenues (the “Owners Allocation”)
of Aston is allocated to the owners of Aston. The Owners’ Allocation
is allocated among the partners of Aston according to their relative ownership
interests. Of the 33% Owners Allocation, 1.7% of Aston revenue is
allocated to Stuart Bilton and 1.3% of Aston revenue is allocated to Kenneth
Anderson. Pursuant to the LP Agreement, 28% of Aston revenues (or 85%
of the Owners' Allocation) is allocated to Merger Sub and the remaining 5% of
Aston revenues (or 15% of the Owners' Allocation) is allocated among the
management limited partners as a group, including the interests of Messrs.
Bilton and Anderson described above. Messrs. Bilton and Anderson are
currently directors of Highbury. Pursuant to the terms of the current
Management Agreement (as defined below) between the management stockholders and
Highbury, 72% of the revenues of Highbury is allocated to Operating
Allocation. Under the terms of the LP Agreement, the 5% difference in
revenues that is no longer allocated to Operating Allocation, as is currently
provided for under the existing Management Agreement, is provided to the
management limited partners as Owners’ Allocation.
Merger
Sub’s contractual share of revenues has priority over the distributions to the
management members in the event Aston’s actual operating expenses exceed the
Operating Allocation. As a result, excess expenses first reduce the
portion of the Owners’ Allocation allocated to the management limited partners
until the management limited partners’ allocation is eliminated, after which
Merger Sub’s allocation is reduced.
The
limited partnership interests owned by the management limited partners are
subject to certain put and call rights upon the happening of certain events and
are generally restricted from being transferred by the management limited
partners.
Employment
Agreements
As a
condition to AMG entering into the Merger Agreement each of Stuart Bilton and
Kenneth Anderson and certain other key employees of Aston (the “Key Employees”),
entered into employment agreements, dated as of December 12, 2009, with
Highbury, Aston and Merger Sub (the “Employment Agreements”). The
Employment Agreements will become effective upon the closing of the Merger and
will terminate upon termination of the Merger Agreement if the closing of the
Merger does not occur. The term of each Employment Agreement is 15
years except for the Employment Agreement with Mr. Bilton which has a term of
four years. The Key Employees’ compensation (including salary and
bonus) will be determined by a management committee of Aston (the “Management
Committee”) or its delegates in accordance with the LP Agreement. The
Key Employees will hold those positions and perform such duties as assigned to
them in accordance with the LP Agreement. The Key Employees may only
be terminated (i) for cause by Merger Sub, as the general partner of Aston, or
by the Management Committee upon consent of Merger Sub, (ii) other than for
cause, by the Management Committee with the prior consent of Merger Sub, (iii)
upon permanent incapacity or (iv) upon death. Each Employment
Agreement includes restrictions on competition and solicitation of clients and
employees for a term expiring one year after termination of the Employment
Agreement, except for the Employment Agreements with Messrs. Bilton and Anderson
which include restrictions on competition and solicitation for a term expiring
two years after termination of the Employment Agreement.
Partner
Non-Competition Agreements
As an
additional condition to AMG entering into the Merger Agreement, each of Stuart
Bilton and Kenneth Anderson entered into Partner Non-Competition Agreements,
dated as of December 12, 2009, with Highbury, Aston and Merger
Sub. The Partner Non-Competition Agreements will become effective
upon the closing of the Merger and will terminate upon the termination of the
Merger Agreement if the closing of the Merger does not occur. For a
period of six years (or, in certain cases with respect to Mr. Anderson, two
years) after the closing of the Merger, Messrs. Bilton and Anderson agree they
will not compete with Aston or solicit clients or employees of Aston or Merger
Sub.
Severance
Agreements
In
connection with entering into of the Merger Agreement, Highbury entered into
Severance Agreements, dated as of December 12, 2009 (the “Severance
Agreements”), with Richard S. Foote, Highbury’s President and Chief Executive
Officer, and R. Bradley Forth, Highbury’s Executive Vice President, Chief
Financial Officer and Secretary. The Severance Agreements terminate
on December 31, 2010.
Pursuant
to the Severance Agreements, if Mr. Foote or Mr. Forth (i) is terminated for
cause (as defined in the Severance Agreements) or (ii) voluntarily terminates
his employment with Highbury, other than a voluntary termination for good reason
(as defined in the Severance Agreements), then Highbury shall pay to Mr. Foote
or Mr. Forth, as the case may be, his base salary earned but unpaid through the
date of termination (the “Earned Salary”) and any vested amounts or benefits
owing to him under Highbury’s otherwise applicable employee benefit plans and
programs, including any compensation previously deferred by him (together with
any accrued earnings thereon) and not yet paid (the “Accrued
Obligations”).
If the
employment of Mr. Foote or Mr. Forth is terminated (i) by Highbury without
cause, (ii) due to the death or (iii) voluntarily for good reason, then Highbury
shall pay to Mr. Foote or Mr. Forth, as the case may be, the following: (a) his
Earned Salary, (b) his Accrued Obligations and (c) a separation payment (the
“Separation Payment”) equal to $584,000, in the case of Mr. Foote, and $292,000,
in the case of Mr. Forth (each amount equal to the sum of his respective base
salary currently in effect and the amount payable to him as an annual incentive
payment for services rendered by him in 2009). As described in the
Severance Agreements, the definition of “termination for good reason” requires
both a change in control of Highbury and the occurrence of certain enumerated
events. A change of control of Highbury (as defined in the Severance
Agreements) includes the transactions contemplated by the Merger
Agreement. As the Merger Agreement calls for the resignation of all
of Highbury’s officers, as a condition to the closing, “good reason” also
includes each executive’s voluntary resignation after the conditions to closing
of the Merger have been satisfied, to be effective upon the closing of the
Merger.
Payment
of the Separation Payment is contingent upon Mr. Foote or Mr. Forth, as the case
may be, executing a general release agreement in favor of Highbury within 60
days of his termination. The Separation Payment shall be payable in
all cases, other than death, as soon as practicable (but no later than 10 days)
following the expiration of the seven-day revocation period stated in the
general release agreement, and in the case of death, within 30 days after
death. In addition, Mr. Forth will be subject to a six-month
post-termination non-competition commitment in favor of Highbury.
The
foregoing is a summary of the material terms of the Severance Agreements, copies
of which are attached as Exhibits 10.2 and 10.3 to this Current Report on Form
8-K and incorporated herein by reference. This summary is qualified in its
entirety by reference to the Severance Agreements.
Item
1.02 Termination of a Material Definitive Agreement
Office
Services Agreement
On
October 31, 2007, Highbury entered into an office services agreement (the
“Office Services Agreement”) with Berkshire Capital Securities LLC (“Berkshire
Capital”) which provides for a monthly fixed fee of $10,000 for office
and
secretarial services including use and access to Highbury’s office in Denver,
Colorado and those other office facilities of Berkshire Capital as Highbury may
reasonably require as well as information technology equipment and access to
numerous subscription-based periodicals and databases. In addition, certain
employees of Berkshire Capital provide Highbury with financial reporting,
administrative and information technology support on a daily basis. R. Bruce
Cameron, our Chairman of the Board, Richard S. Foote, our President, Chief
Executive Officer and Director, and R. Bradley Forth, our Executive Vice
President, Chief Financial Officer and Secretary are employees and equity owners
of Berkshire Capital.
In
connection with the signing of the Merger Agreement, Highbury and Berkshire
Capital entered into a Termination Agreement, dated as of December 12, 2009 (the
“Berkshire Termination Agreement”), pursuant to which the Office Services
Agreement will terminate at the time of the closing of the
Merger. This summary is qualified in its entirety by reference to the
Berkshire Termination Agreement which is attached as Exhibit 10.4 to this
Current Report on Form 8-K and incorporated herein by reference.
Financial
Advisor Engagement
Highbury
previously engaged Berkshire Capital to act as its non-exclusive financial
adviser in connection with possible acquisitions and a review of strategic
alternatives. If Highbury enters into an agreement to acquire a target company
during the term of Berkshire Capital’s engagement or within two years
thereafter, and such acquisition is completed, then Highbury will pay Berkshire
Capital a success fee at closing equal to the greater of (a) the sum of 3.0% of
the first $15 million of the aggregate consideration in such transaction and
1.0% of the aggregate consideration in such transaction in excess of $15
million, and (b) $600,000. If, on or before September 18, 2011, Highbury enters
into an agreement for its sale, and such sale is completed, then Highbury will
pay Berkshire Capital a success fee at closing equal to the greater of (x) 1.0%
of the aggregate consideration in such transaction and (y) $1,000,000. Upon the
execution of a definitive agreement with respect to an acquisition, Highbury
will pay Berkshire Capital $200,000, and upon the execution of a definitive
agreement with respect to a sale, Highbury will pay Berkshire Capital $150,000,
which, in each case, will be credited against the success fee. Highbury will
also reimburse Berkshire Capital for its reasonable expenses in performing its
services under the engagement letter and will indemnify Berkshire Capital for
liabilities it incurs in performing such services, unless such liabilities are
attributable to Berkshire Capital’s gross negligence or willful misconduct. R.
Bruce Cameron, our Chairman of the Board, Richard S. Foote, our President, Chief
Executive Officer and Director, and R. Bradley Forth, our Executive Vice
President, Chief Financial Officer and Secretary are employees and equity owners
of Berkshire Capital. As a result of these affiliations, these individuals will
benefit from the transaction to the extent of their interest in Berkshire
Capital. Berkshire Capital has agreed to take such measures as necessary to
ensure that Messrs. Cameron, Foote and Forth do not receive compensation from
Berkshire Capital directly from the fee paid to Berkshire Capital in connection
with any sale transaction.
Pursuant
to the terms of the Berkshire Termination Agreement, Berkshire Capital’s
engagement as financial advisor of Highbury will terminate at the time of the
closing of the Merger. This summary is qualified in its entirety by
reference to the Berkshire Termination Agreement which is attached as Exhibit
10.4 to this Current Report on Form 8-K and is incorporated herein by
reference.
Management
Stockholder Agreements
On August
10, 2009, Highbury entered into (i) an Exchange Agreement (the “First Exchange
Agreement”) with the holders (the “B Investors”) of Series B limited liability
company interests of Aston (“Series B LLC Units”) and the persons named as
management stockholders therein who own interests in certain of the B Investors
and are employees of Aston (the “Management Stockholders”), pursuant to which
the B Investors exchanged their Series B LLC Units for shares of Series B
Preferred Stock, (ii) an Investor Rights Agreement with the B Investors and the
Management Stockholders (the “Investor Rights Agreement”) which granted the B
Investors certain registration rights and placed certain restrictions on the
transfer of the Series B Preferred Stock issued to the B Investors and (iii) a
Management Agreement with each of the Management Stockholders and Aston which
delegates certain powers to a management committee composed initially of
Management Stockholders to operate the business of Aston (the “Management
Agreement”), each as described in Highbury’s Current Report on Form 8-K filed
with the SEC on August 11, 2009.
On
September 14, 2009, Highbury entered into (i) an Exchange Agreement (the “Second
Exchange Agreement”) with the B Investors pursuant to which the B Investors
agreed to exchange up to 36% of their shares of Series B Preferred Stock to
Highbury for up to 1,620,000 shares of Common Stock of Highbury and (ii) an
Amended and Restated Investors Rights Agreement (the “Amended and Restated
Investor Rights Agreement”) with the B Investors and Management Stockholders,
each as described in Highbury’s Current Report on Form 8-K/A filed with the SEC
on September 14, 2009.
In
connection with the signing of the Merger Agreement, Highbury and each of the B
Investors have entered into an Exchange Agreement, dated as of December 12, 2009
(the “Exchange Agreement”), pursuant to which the B Investors will exchange all
of their shares of Series B Preferred Stock for newly issues shares of Highbury
Common Stock immediately prior to the effective time of the Merger.
In
connection with the signing of the Merger Agreement, Highbury, Aston, the B
Investors and the Management Stockholders entered into a Termination Agreement,
dated as of December 12, 2009 (the “Management Termination Agreement”), pursuant
to which the First Exchange Agreement, the Second Exchange Agreement, the
Amended and Restated Investor Rights Agreement and the Management Agreement will
each terminate effective immediately prior to the time of the closing of the
Merger. Notwithstanding the termination of the foregoing agreements,
the parties to the Management Termination Agreement agreed that the Management
Termination Agreement will not affect in any way Highbury’s, Aston’s, the B
Investors’ or the Management Stockholders’ rights or obligations under such
agreements relating to any indemnification, exculpation or contribution
provisions therein. This summary is qualified in its entirety by
reference to the Management Termination Agreement which is attached as Exhibit
10.5 to this Current Report on Form 8-K and incorporated herein by
reference.
Item
3.03 Material Modification to Rights of Security Holders
On
December 12, 2009, Highbury entered into Amendment Number One to Rights
Agreement with Continental Stock Transfer & Trust Company (the “Amendment”)
relating to Highbury’s Series A Junior Participating Preferred
Stock. Pursuant to the Amendment, AMG and its affiliates are excluded
from the definition of “Acquiring Person” in connection with any actions taken
pursuant to any merger or acquisition agreement and any related voting agreement
to the extent that such merger or acquisition agreement is approved by the Board
of Directors of Highbury. The Amendment was entered into so that the
Merger described in Item 1.01 would not trigger the exercise of the rights under
the Rights Plan.
The
Amendment is attached as Exhibit 10.6 to this Current Report on Form 8-K and
incorporated herein by reference. This summary is qualified in its entirety by
reference to the Amendment.
Item
5.02. Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
The
information included under the headings “Employment Agreements” and “Severance
Agreements” under Item 1.01 above is incorporated herein by
reference.
On
December 12, 2009, in consideration of the exceptional effort and time
commitment required of R. Bradley Forth both to effect the special dividend in
October 2009 and in connection with the negotiation and execution of the Merger
Agreement, the Compensation Committee determined to award Mr. Forth a one-time
non-recurring recognition bonus of $25,000. This bonus is in addition to the
annual incentive award otherwise payable to Mr. Forth in respect of his and
Highbury's performance in 2009 and will be paid in December 2009.
Item
7.01 Regulation FD Disclosure
Highbury
issued a press release on December 14, 2009, a copy of which is attached as
Exhibit 99.1 to this report and incorporated herein by reference, in which it
announced the execution of the Merger Agreement. This information
shall not be deemed "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934 and shall not be deemed incorporated by reference in any
filing under the Securities Act of 1933, as amended.
Item
9.01 Financial Statements and Exhibits
|
Exhibit
No.
|
Description
|
|
Exhibit
10.1
|
Agreement
and Plan of Merger, dated as of December 12, 2009, among Affiliated
Managers Group, Inc., Manor LLC and Highbury Financial
Inc.
|
|
Exhibit
10.2
|
Severance
Agreement, dated as of December 12, 2009, between Highbury Financial Inc.
and Richard S. Foote.
|
|
Exhibit
10.3
|
Severance
Agreement, dated as of December 12, 2009, between Highbury Financial Inc.
and R. Bradley Forth.
|
|
Exhibit
10.4
|
Termination
Agreement, dated December 12, 2009, between Highbury Financial Inc. and
Berkshire Capital Securities LLC.
|
|
Exhibit
10.5
|
Termination
Agreement, dated December 12, 2009, between Highbury Financial Inc., Aston
Asset Management LLC, and the investors and management stockholders named
therein.
|
|
Exhibit
10.6
|
Amendment
Number One to Rights Agreement, effective as of December 12, 2009, by and
between Highbury Financial Inc. and Continental Stock Transfer & Trust
Company.
|
|
Exhibit
99.1
|
Press
Release of Highbury Financial Inc., dated December 14,
2009.
|
Where
to Find Additional Information
Highbury
and AMG intend to file with the Securities and Exchange Commission (the “SEC”) a
joint registration statement and proxy statement, which will contain a
prospectus relating to the securities AMG intends to issue in the proposed
Merger and a preliminary proxy statement in connection with the proposed Merger,
and Highbury intends to mail a definitive proxy statement and other relevant
documents to Highbury stockholders. Stockholders of Highbury and
other interested persons are advised to read, when available, Highbury’s
preliminary proxy statement, and amendments thereto, and definitive proxy
statement in connection with Highbury’s solicitation of proxies for the special
meeting to be held to approve the Merger because these proxy statements will
contain important information about AMG, Highbury and the proposed
Merger. The definitive proxy statement will be mailed to stockholders as
of a record date to be established for voting on the Merger. Stockholders will
also be able to obtain a copy of the preliminary and definitive proxy
statements, without charge, once available, at the SEC's Internet site at
http://www.sec.gov or by directing a request to: Highbury Financial Inc., 999
Eighteenth Street, Suite 3000, Denver, CO 80202, Attention: Corporate Secretary,
Tel: (303) 357-4802.
Highbury
and its directors and executive officers may, under SEC rules, be deemed to be
participants in the solicitation of proxies from Highbury’s stockholders in
connection with the special meeting to be held to approve the Merger. Additional
information concerning Highbury’s directors and executives officers, including
information regarding Highbury’s directors’ and officers’ beneficial ownership
of Highbury common stock and preferred stock, will be included in the
preliminary and definitive proxy statements filed with the SEC when the
preliminary and definitive proxy statements become available.
2009
Annual Meeting
Additional
information relating to Highbury’s director nominees and its 2009 annual meeting
is included in the Definitive Proxy Statement filed with the SEC on November 24,
2009. The Definitive Proxy Statement and any other documents filed by
Highbury with the SEC may be obtained free of charge at the SEC’s web site at
http://www.sec.gov. In addition, investors and security holders may
obtain free copies of the documents filed with the Commission by Highbury on the
“Investor Information” pages of Highbury’s website at
http://www.highburyfinancial.com, or by contacting Richard S. Foote at (212)
688-2341. Investors and security holders should read the proxy statement and the
other relevant materials when they become available before making any voting or
other decision with respect to the 2009 annual meeting. Highbury and
its directors and executive officers may, under SEC rules, be deemed to be
participants in the solicitation of proxies from Highbury’s stockholders in
connection with the 2009 annual meeting of stockholders. Additional information
concerning Highbury’s directors and executives officers is included in the
Definitive Proxy Statement filed with the SEC.
Cautionary
Statements Regarding Forward-Looking Statements
Certain
statements in this communication regarding the proposed Merger between AMG and
Highbury, other statements relating to future results, strategy and plans of AMG
and Highbury (including certain projections and business trends, and statements
which may be identified by the use of the words “may”, “intend”, “expect” and
like words), and statements relating to the amount of the special dividend,
constitute “forward-looking statements” as defined in the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
projected as a result of certain risks and uncertainties. For AMG, these risks
and uncertainties include, but are not limited to changes in the securities or
financial markets or in general economic conditions, the availability of equity
and debt financing, competition for acquisitions of interests in investment
management firms, the ability to close pending investments, the investment
performance of AMG’s affiliates and their ability to effectively market their
investment strategies and other risks detailed from time to time in AMG’s
filings with the SEC. For Highbury, factors include, but are not
limited to: the successful combination of Highbury with AMG’s business, the
ability to retain key personnel and the ability to achieve stockholder and
regulatory approvals and to successfully close the transaction. Additional
information other factors that may cause actual results and Highbury’s
performance to differ materially is included in Highbury’s periodic reports
filed with the SEC, including but not limited to Highbury’s Form 10-K for the
year ended December 31, 2008 and subsequent Forms 10-Q. Copies may be obtained
by contacting Highbury or at the SEC’s web site at http://www.sec.gov. Highbury
cautions readers not to place undue reliance upon any forward-looking
statements, which speak only as of the date made. These forward-looking
statements are made only as of the date hereof, and Highbury undertakes no
obligations to update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise, except as required by
law.
Signature(s)
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
HIGHBURY
FINANCIAL INC.
|
|||
|
By:
|
/s/ Richard S. Foote | ||
| Richard S. Foote | |||
| President and Chief Executive Officer | |||
Date:
December 14, 2009
EXHIBIT
INDEX
|
Exhibit
No.
|
Description
|
|
Exhibit
10.1
|
Agreement
and Plan of Merger, dated as of December 12, 2009, among Affiliated
Managers Group, Inc., Manor LLC and Highbury Financial
Inc.
|
|
Exhibit
10.2
|
Severance
Agreement, dated as of December 12, 2009, between Highbury Financial Inc.
and Richard S. Foote.
|
|
Exhibit
10.3
|
Severance
Agreement, dated as of December 12, 2009, between Highbury Financial Inc.
and R. Bradley Forth.
|
|
Exhibit
10.4
|
Termination
Agreement, dated December 12, 2009, between Highbury Financial Inc. and
Berkshire Capital Securities LLC.
|
|
Exhibit
10.5
|
Termination
Agreement, dated December 12, 2009, between Highbury Financial Inc., Aston
Asset Management LLC, and the investors and management stockholders named
therein.
|
|
Exhibit
10.6
|
Amendment
Number One to Rights Agreement, effective as of December 12, 2009, by and
between Highbury Financial Inc. and Continental Stock Transfer & Trust
Company.
|
|
Exhibit
99.1
|
Press
Release of Highbury Financial Inc., dated December 14,
2009.
|