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): November 30,
2007
NEW
YORK MORTGAGE TRUST, INC.
(Exact
name of registrant as specified in its charter)
|
Maryland
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001-32216
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47-0934168
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
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1301
Avenue of the Americas
New
York, New York 10019
(Address
and zip code of
principal
executive offices)
Registrant’s
telephone number, including area code: (212)
634-9400
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:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o 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.
|
On
November 30, 2007, New York Mortgage Trust, Inc. (the “Company”) entered into a
purchase agreement (the “Purchase Agreement”) with JMP Group Inc. (NYSE: JMP)
and certain of its affiliates (collectively, the “Investors”) providing for the
sale by the Company to the Investors of 1,000,000 shares of the Company’s Series
A Cumulative Redeemable Convertible Preferred Stock, $0.01 par value per share,
(the “Preferred Stock”) for an aggregate purchase price of $20,000,000.
The
shares of Preferred Stock (a) are convertible into shares of the Company’s
common stock at any time at the option of the holder at a conversion price
of
$4.00 per share of common stock, representing a conversion rate of five shares
of common stock for every share of Preferred Stock; (b) have a maturity date
of
December 31, 2010, after which time the shares will be redeemed by the Company
at the liquidation preference; (c) are entitled to receive a cash dividend
at an
annual rate of 10.0%, payable quarterly, subject to increase to the extent
any
future common stock dividends of the Company exceed $0.10 per quarter; (d)
will
have a liquidation preference of $20.00 per share plus an amount equal to all
accumulated, accrued and unpaid dividends (whether or not earned or declared)
to
the date of final distribution; (e) will be subject to
mandatory conversion to common stock by the Company if the outstanding
Preferred Stock, on an as-converted basis, represents less than 10% of the
Company’s total shares of outstanding common stock; (f) may be redeemed by the
Company in connection with certain change of control transactions; (g) may
be
redeemed by the holders in exchange for, at the Company’s election, cash or
senior notes of the Company with terms similar to the Preferred Stock if the
Company has not raised at least $50 million of new common equity by September
30, 2008; and (h) will vote together with the Company’s common stock,
voting together as a single class, as if the Preferred Stock had been converted
into common stock. The closing of the sale of the Preferred Stock will occur,
subject to satisfaction or waiver of the closing conditions contained in the
Purchase Agreement, on or before January 4, 2008, unless the parties mutually
agree to a different closing date. The Purchase Agreement also provides the
Investors with an option, exercisable not later than January 31, 2008, to
purchase up to an additional 1,000,000 shares of the Preferred Stock for $20.00
per share.
Pursuant
to the Purchase Agreement, at closing, the Company will grant the holders of
the
Preferred Stock registration rights pursuant to which the Company will be
required to file a resale registration statement by no later June 30, 2008,
registering for resale the Preferred Stock as well as the shares of common
stock
issuable upon conversion of the Preferred Stock. The Company will be required
to
use its commercially reasonable best efforts to cause the resale registration
statement to be declared effective by the SEC as soon as practicable after
filing. If the Company fails to file the resale registration statement by June
30, 2008, the Company will pay an additional dividend on the Preferred Stock
at
a quarterly rate of 0.50% for each quarter after June 30, 2008, until the
default is remedied.
Pursuant
to the Purchase Agreement, at closing, the Company and Hypotheca Capital, LLC
and New York Mortgage Funding LLC, each of which is a subsidiary of the Company,
will also enter into an advisory agreement (the “Advisory Agreement”) with JMP
Asset Management LLC (the “Advisor”), an affiliate of the Investors, providing
for the external management of the Company’s subsidiaries through which the
Advisor will be making investments pursuant to the Advisory Agreement (the
“Subsidiaries”). Under the Advisory Agreement, the Advisor will be responsible
for managing the investment activities of the Subsidiaries pursuant to
investment guidelines that target non-Agency RMBS, other mortgage assets and
other real estate-related investments. Under the Advisory Agreement, the Advisor
will be entitled to earn a base advisory fee, payable quarterly in arrears,
in
an amount equal to (i) 1/4 of the equity of the Subsidiaries as of the end
of
each quarter multiplied by (ii) 1.50%. Equity is defined in the Advisory
Agreement, to mean, for any quarter, the greater of (i) the net asset value
of
the investments of the Subsidiaries as of the end of the quarter, excluding
investments made prior to the date of the Advisory Agreement, or (ii) the sum
of
$20,000,000 plus 50% of the net proceeds to the Company or its Subsidiaries
of
any offering of common or preferred stock completed by the Company, after
deducting underwriting discounts and commissions, placement fees, offering
expenses and other fees and expenses incurred by the Company or the Subsidiaries
in connection with the offering. The Advisor will also be entitled to earn
incentive compensation each quarter, subject to achieving certain investment
returns. Under the Advisory Agreement, incentive compensation means, (A) for
each of the first three fiscal quarters of each fiscal year, an amount, not
less
than zero, equal to 25% of the product of: (i) the dollar amount by which (a)
the core earnings of the Subsidiaries for the quarter that are attributable
to
the investments made by the Advisor for the account of the Subsidiaries, before
incentive compensation, divided by the quarterly average capital of the
Subsidiaries that is invested by the Advisor for the Subsidiaries, exceeds
(b)
the greater of (x) 2.00% and (y) 0.50% plus one-fourth of the Ten Year Treasury
Rate for such quarter, and (ii) the average capital of the Subsidiaries invested
by the Advisor for the Subsidiaries during such quarter; and for the fourth
fiscal quarter of each fiscal year, an amount, not less than zero, equal to
the difference between (1) 25% of the product of: (i) the dollar amount by
which
(a) GAAP net income of the Subsidiaries attributable to the Subsidiaries’
investments made by the Advisor for the full fiscal year, before incentive
compensation, divided by the average capital of the Subsidiaries for the year
that is invested by the Advisor in investments, exceeds (b) the greater of
(x)
8.00% and (z) 2.00% plus the Ten Year Treasury Rate for such fiscal year, and
(ii) the average capital of the Subsidiaries invested by the Advisor in
investments for the fiscal year and (2) the amount of incentive compensation
paid to the Advisor for the first three fiscal quarters of such fiscal year.
A
portion of the incentive compensation may be paid in the form of common
stock.
The
Advisory Agreement will have an initial term of three years, subject to
automatic annual one-year renewals thereafter. The Company may terminate the
Advisory Agreement or elect not to renew the Advisory Agreement, subject to
certain conditions and subject to paying a termination fee equal to the
sum
of (a) the average annual base advisory fee and (b) the average annual incentive
compensation earned by the Advisor during the 24-month period immediately
preceding the date of termination. No termination fee is payable in the event
the Company terminates the Advisory Agreement for cause.
In
connection with the agreement by Steven B. Schnall, who currently serves as
the
Non-Executive Chairman and previously served as the Chief Executive Officer
of
the Company, to resign as a director of the Company upon closing of the sale
of
the Preferred Stock as described below, the Company entered into an agreement
with Mr. Schnall pursuant to which Mr. Schnall will have the right, subject
to
certain conditions, to sell up to 422,000 of the shares of Company common stock
that he beneficially owns as a selling stockholder in future common stock
offerings undertaken by the Company; or, if Mr. Schnall is not able to sell
such
shares as a selling stockholder in future common stock offerings, the Company
will purchase his shares when the Company undertakes future common stock
offerings on comparable terms.
| Item
5.02 |
Departure
of Directors or Principal Officers; Election of Directors; Appointment
of
Principal
Officers
|
On
November 30, 2007, Steven B. Schnall, Mary Dwyer Pembroke, Jerome F. Sherman
and
Thomas W. White agreed to resign as directors of the Company effective upon
the
closing of the sale of the Preferred Stock. In the event the sale of the
Preferred Stock fails to close, these individuals would remain directors of
the Company.
On
November 30, 2007, in connection with the sale of the Preferred Stock to the
Investors, the Board of Directors of the Company approved the appointments
of
James J. Fowler as Non-Executive Chairman
of the Board of Directors and Steven M. Abreu as a director of the Company,
with
such appointments to become effective upon
closing of the sale of Preferred Stock.
Mr. Fowler will also serve as the Chief Investment Officer of the Subsidiaries
upon closing of the sale of Preferred Stock.
Mr.
Fowler is a managing director of JMP Asset Management LLC and president of
JMP
Realty Trust, Inc., a private REIT that is externally managed by JMP Asset
Management and which is one of the investors in the Preferred Stock. Mr. Fowler
served as co-director of research and as a senior research analyst at JMP
Securities from 2001 until 2007, and served as a senior research analyst at
Thomas Weisel Partners from 1999 until 2001 and at Montgomery Securities from
1995 until 1999. Mr. Fowler has prior mortgage-backed securities analysis and
trading experience with Oppenheimer & Co. and Ocwen Financial Corporation.
Mr.
Abreu is currently the Chief Executive Officer and President of GreenPoint
Mortgage Funding, Inc. Prior to joining GreenPoint, Mr. Abreu was Executive
Vice
President of Headlands Mortgage Company and a Vice President in Donaldson,
Lufkin & Jenrette’s mortgage-backed securities department. He has been a
member of Fannie Mae’s National Advisory Council and the Residential Board of
Governors of the Mortgage Bankers Association.
Pursuant
to the Purchase Agreement, upon closing of the sale of the Preferred Stock,
the
Company will enter into new employment agreements with Steven R. Mumma and
David
A Akre, which will supersede and replace the existing employment agreements
with
these executive officers. Each of the new employment agreements will expire
on
December 31, 2009, with no automatic renewal or extension, and will provide
for
(i) an initial base salary of $150,000, (ii) the payment of up to $150,000
in
special bonuses during 2008 if the Company achieves certain specified
milestones, (iii) payment of potential annual cash incentive bonuses pursuant
to
a performance bonus plan to be established by the compensation committee of
the
Board of Directors, and (iv) severance in the event of a termination without
cause or resignation for good reason in the amount of $500,000
plus acceleration of vesting with respect to any unvested equity incentive
awards, except that in the event of a change in control during 2008, the cash
severance would include the $500,000 plus the executive’s target bonus for
2008.
SIGNATURE
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 thereunto
duly authorized.
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NEW
YORK
MORTGAGE TRUST, INC |
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(Registrant) |
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| Date: December
3, 2007 |
By: |
/s/ Steven
R.
Mumma |
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Steven
R. Mumma |
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President
and
Chief Financial Officer |