Edgar Filing: SHOCHET HOLDING CORP

SHOCHET HOLDING CORP.
433 PLAZA REAL, SUITE 275
BOCA RATON, FLORIDA 33432

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INFORMATION STATEMENT PURSUANT TO SECTION 14(F) OF
THE SECURITIES EXCHANGE ACT OF 1934 AND SEC RULE 14F-1

NOTICE OF CHANGE IN THE COMPOSITION
OF THE BOARD OF DIRECTORS

MARCH 14, 2002

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This Information Statement is being furnished to holders of record of the
common stock, par value $.0001 per share, of Shochet Holding Corp., a Delaware
corporation, in accordance with the requirements of Section 14(f) of the
Securities Exchange Act of 1934, as amended, and Rule 14f-1 promulgated under
the Exchange Act.

NO VOTE OR OTHER ACTION BY OUR STOCKHOLDERS IS REQUIRED IN RESPONSE TO THIS
INFORMATION STATEMENT. PROXIES ARE NOT BEING SOLICITED.

INTRODUCTION

We anticipate that, following the expiration of the ten-day period
beginning on the later of the date of the filing of this Information Statement
with the SEC pursuant to Rule 14f-1 or the date of mailing of this Information
Statement to our stockholders, the transactions contemplated by the purchase
agreement discussed below under "Change of Control" will be completed. At that
time:

o Sutter Opportunity Fund 2, LLC, a California limited liability
company, will acquire ownership of approximately 56.45% of our
outstanding common stock; and

o John P. Margaritis, the sole member of our board of directors, will
resign and Robert E. Dixon and William G. Knuff, III will be appointed
as new directors and shall constitute the entire board of directors
immediately following the consummation of the purchase agreement.

Because of the change in the composition of our board of directors and the
sale of securities pursuant to the purchase agreement, there will be a change in
control of our company on the date the transactions contemplated by the purchase
agreement are completed.

As of March 14, 2002, we had issued and outstanding 2,150,000 shares of
common stock, our only class of voting securities that would be entitled to vote
for directors at a stockholders meeting if one were to be held. Each share of
common stock is entitled to one vote.

Please read this Information Statement carefully. It describes the terms of
the purchase agreement and contains certain biographical and other information
concerning our executive officers and directors after completion of the
transactions under the purchase agreement.

CHANGE OF CONTROL

On March 12, 2002, Firebrand Financial Group, Inc., our majority
stockholder, entered into a common stock purchase agreement with Sutter
Opportunity Fund 2, LLC. The agreement provides that Firebrand Financial Group
will sell to Sutter Opportunity Fund 2, LLC 1,213,675 shares, or approximately
56.45%, of our outstanding common stock for a cash purchase price of $727,400,
subject to adjustment and subject to specified indemnification obligations. The
purchase agreement also provides that Mr. Margaritis will resign as the sole
member of our board of directors and will be replaced with Robert E. Dixon and
William G. Knuff, III, two nominees of Sutter Opportunity Fund 2, LLC. Further,
with the exception of Arnold Roseman, our chief financial officer, all of our
executive officers will resign and Messrs. Dixon and Knuff will become our
co-chief executive officers.

SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number of shares of common stock
beneficially owned as of March 14, 2002 by (i) those persons or groups known to
beneficially own more than 5% of our common stock prior to the closing of the
purchase agreement, (ii) those persons or groups known to beneficially own more
than 5% of our common stock on and after the closing of the purchase agreement,
(iii) each current director and each person that will become a director upon the
closing of the purchase agreement, (iv) our chief executive officer and each
executive officer whose compensation exceeded $100,000 in the fiscal year ended
January 31, 2002, (v) all current directors and executive officers as a group
and (vi) all directors and executive officers on and after the closing of the
purchase agreement as a group. The information is determined in accordance with
Rule 13d-3 promulgated under the Exchange Act. Except as indicated below, the
stockholders listed possess sole voting and investment power with respect to
their shares. Except as otherwise indicated in the table below, the business
address of each of the persons listed is One State Street Plaza, New York, New
York 10004.

Before Closing of After Closing of
Purchase Agreement(1) Purchase Agreement
------------------------ -------------------------
Amount and Amount and
Nature of Nature of
Beneficial Percent Beneficial Percent
Name and Address of Beneficial Owner Ownership of Class Ownership of Class
------------------------------------ --------- -------- --------- --------

Firebrand Financial Group, Inc. 1,266,460 58.9% 52,785 2.5%
Roger N. Gladstone 74,000(2) 3.4% 74,000(2) 3.4%
David F. Greenberg 24,000(2) 1.1% 24,000(2) 1.1%
John P. Margaritis -0- -0- -0- -0-
Sutter Opportunity Fund 2, LLC -0- -0- 1,213,675 56.5%
c/o Sutter Capital Management, LLC
150 Post Street, Suite 320
San Francisco, California 94108
Robert E. Dixon -0- -0- 1,213,675(3) 56.5%
c/o Sutter Capital Management, LLC
150 Post Street, Suite 320
San Francisco, California 94108
William G. Knuff, III -0- -0- -0- -0-
c/o Sutter Capital Management, LLC
150 Post Street, Suite 320
San Francisco, California 94108

All executive officers and directors as a group 101,333(5) 4.6% 1,217,008(6) 56.5%
(four persons prior to and three persons on
and after consummation of the Purchase
Agreement) (4)

---------------------

* Less than 1%.

(1) Based on 2,150,000 shares outstanding on March 14, 2002.

(2) Includes 24,000 shares of common stock issuable upon exercise of options
held by these individuals that are, or will become, exercisable within the
next 60 days. Does not include 12,000 shares of common stock issuable upon
exercise of options held by these individuals that are not currently
exercisable and will not become exercisable within the next 60 days.

(3) Represents 1,213,675 shares of common stock to be held by Sutter
Opportunity Fund 2, LLC. Mr. Dixon is the principal owner and manager of
Sutter Capital Management, LLC, the manager of Sutter Opportunity Fund 2,
LLC.

(4) Prior to the closing of the purchase agreement, this group was comprised of
Roger N. Gladstone, David F. Greenberg, John P. Margaritis and Arnold
Roseman. After the closing of the purchase agreement, this group will be
comprised of Robert E. Dixon, William G. Knuff, III and Arnold Roseman.

(5) Includes 51,333 shares of common stock issuable upon exercise of currently
exercisable options. Excludes 30,667 shares of common stock issuable upon
exercise of options held by these individuals that are not currently
exercisable and will not become exercisable within the next 60 days.

(6) Includes the shares of common stock beneficially owned by Sutter
Opportunity Fund 2, LLC and 3,333 shares of common stock issuable upon
exercise of currently exercisable options.

EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

Effective upon the completion of the transaction under the purchase
agreement following the expiration of the ten-day period beginning on the later
of the date of the filing of this Information Statement with the SEC pursuant to
Rule 14f-1 or the date of mailing of this Information Statement to our
stockholders, our board of directors will be reconstituted and fixed at two
directors. On that date Mr. John P. Margaritis will resign as our sole director
and Robert E. Dixon and William G. Knuff, III will be appointed as directors and
shall constitute the entire board of directors immediately following the closing
of the transactions contemplated by the purchase agreement. The following tables
set forth information regarding our current executive officers, directors and
key employees and our proposed executive officers and directors after completing
the transaction under the purchase agreement. If any proposed director listed in
the table below should become unavailable for any reason, which we do not
anticipate, the directors will vote for any substitute nominee or nominees who
may be designated by Sutter Opportunity Fund 2, LLC prior to the date the new
directors take office.

Each member of our board of directors serves a term of one year or from the
date of election until the end of the designated term and until the successor is
elected and qualified.

CURRENT EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES

Name Age Position
---- --- --------

Roger N. Gladstone........................... 48 Chief Executive Officer
David F. Greenberg........................... 54 President and Chief Operating Officer
John P. Margaritis........................... 51 Director
Arnold I. Roseman............................ 54 Chief Financial Officer

ROGER N. GLADSTONE has served as our chairman and chief executive officer
since November 1999. He resigned as our chairman and as a director on March 8,
2002. He has also served as an executive officer of our subsidiary, SSI
Securities Corp. (formerly Shochet Securities, Inc.), since November 1995. Mr.
Gladstone has served as vice chairman of the board of directors of Firebrand
Financial Group since June 1999 and as a director of that company since January
1987. From 1987 to June 1999, he served as president of Firebrand Financial
Group. He is also a member of the Young Presidents Organization and an honorary
member of the board of directors of the Sid Jacobson Community Center in Roslyn,
New York. Mr. Gladstone is a director of No Small Affair South, a charitable
foundation which provides positive experiences for disadvantaged children. From
1984 through 1986, Mr. Gladstone was engaged primarily in the acquisition,
management, syndication and operation of real estate projects. From 1980 through
1984, Mr. Gladstone was engaged in the private practice of law in New York. Mr.
Gladstone received his B.A. from Stanford University, his M.B.A. from New York
University and his J.D. from the Benjamin N. Cardozo School of Law, Yeshiva
University. Mr. Gladstone is a member in good standing of both the New York and
Florida Bar Associations.

DAVID F. GREENBERG has served as our president, chief operating officer
and a director since November 1999. He resigned as a director on March 8, 2002.
He has also served as chief operating officer of SSI Securities since it became
a subsidiary of Firebrand Financial Group in November 1995. Mr. Greenberg has
served as president of SSI Securities since June 1999. Mr. Greenberg was
employed by GKN Securities Corp., a broker dealer and wholly owned subsidiary of
Firebrand Financial Group, from 1991 to July 1999, initially as director of
compliance and then as branch manager of its New York office. In January 1996,
he became GKN's senior vice president and director of operations and risk
management, in which capacity he served until January 2000. From 1985 to 1986,
Mr. Greenberg served as president and chief executive officer of First New York
Discount Corp., a broker-dealer, which he founded. From 1978 to 1985, Mr.
Greenberg served in several capacities, including as director of compliance and
branch liaison manager and general securities and options principal for US
Clearing Corp. Mr. Greenberg also serves as a member of Securities Industry
Association - Discount Brokerage Committee Year 2000.

JOHN P. MARGARITIS has served as a director since February 2000. He has
also served as a director of Firebrand Financial Group since August 1996. Mr.
Margaritis served as president and chief executive officer of Firebrand
Financial Group from December 1999 until December 2001 and as chairman of
Firebrand Financial Group from December 2000 until December 2001. Mr. Margaritis
has served as a consultant to Firebrand Financial Group since January 2002. From
September 1998 to December 1999, Mr. Margaritis served as president and chief
executive officer of The Hawthorn Group New York, an international public
relations firm. From June 1997 until September 1998, Mr. Margaritis served as
chief executive officer of Margaritis & Associates, a public relations
consulting firm. Mr. Margaritis was the president and chief executive officer of
Ogilvy Adams & Rinehart (currently known as Ogilvy Public Relations Worldwide),
a public relations firm, from January 1994 through February 1997, and was the
president and chief operating officer from January 1992 to January 1994. From
July 1988 until January 1992, Mr. Margaritis was chairman and chief executive
officer of Ogilvy & Mathers Public Relations. Mr. Margaritis is a director and
member of the executive committee of the Arthur Ashe Institution for Urban
Health and Research America, a non-profit organization to promote government
support of medical research, and a member of the President's Advisory

Counsel for the Museum of Television and Radio. Mr. Margaritis is also a trustee
of Washington and Jefferson College. Mr. Margaritis received his B.A. from
Washington and Jefferson College and received his M.A. from the New School for
Social Research.

ARNOLD I. ROSEMAN has served as our chief financial officer since June 2001
and chief financial officer of SSI Securities since March 2000. From March 1999
to February 2000, Mr. Roseman served as director of compliance of First Colonial
Securities Group, a broker-dealer located in Boca Raton, Florida. From February
1994 to October 1998, Mr. Roseman served as compliance director for Biltmore
Securities, Inc. From 1983 to 1993, Mr. Roseman served as senior vice president
and chief financial officer of First Institutional Securities. In addition, from
1973 to 1976, Mr. Roseman was employed by the National Association of Securities
Dealers as a senior examiner and performed special projects for Nasdaq in
Washington DC. Mr. Roseman received his B.A. - Finance (cum laude) from Franklin
Pierce College.

EXECUTIVE OFFICERS AND DIRECTORS AFTER THE CLOSING OF THE PURCHASE AGREEMENT

Name Age Position
---- --- --------

Robert E. Dixon.............................. 31 Co-Chief Executive Officer and Director
William G. Knuff, III........................ 34 Co-Chief Executive Officer and Director
Arnold I. Roseman............................ 54 Chief Financial Officer

ROBERT E. DIXON was nominated to serve as a director of ours and our
co-chief executive officer on March 8, 2002. Since 1998, Mr. Dixon has served as
the managing member of the venture capital investment firm of Sutter Capital
Management LLC. Sutter Capital is the manager of Sutter Opportunity Fund 2, LLC.
Prior to 1998, Mr. Dixon was attending business school.

WILLIAM G. KNUFF, III was nominated to serve as a director of ours and our
co-chief executive officer on March 8, 2002. Since August 2001, Mr. Knuff has
acted as a principal of Sutter Capital Management LLC. Mr. Knuff has also acted
as a consultant to RegalRetreats, LLC, an online luxury property registry, since
he started it in May 2000 and to GainsKeeper, Inc., a provider of automated
financial tools and services for the investment community, since May 1999. From
August 1998 until joining Sutter Capital Management LLC, he worked as a senior
associate in investment banking at Robertson Stephens, Inc. Prior to 1998, Mr.
Knuff was attending business school.

BOARD OF DIRECTORS' MEETINGS AND COMMITTEES

During the fiscal year ending January 31, 2002, our board of directors met
on three occasions and acted by unanimous written consent on two occasions. Our
entire board participated in each of the three meetings. We do not have a
standing nominating committee. We had standing audit and compensation committees
of the board of directors, but currently there are no members on those
committees. During the fiscal year ending January 31, 2002, the audit committee
did not meet but acted by unanimous written consent on one occasion. During the
fiscal year ending January 31, 2002, the compensation committee did not meet.

DIRECTOR COMPENSATION

Our directors currently are not compensated for serving as members of our
board of directors.

NASDR MATTER

In August 1997, GKN Securities and certain of its executive officers,
senior managers or former and present brokers, including Roger Gladstone and
David Greenberg, reached settlements with the NASDR resolving an NASDR
investigation concerning alleged excessive mark-ups on warrants for seven
companies underwritten by GKN Securities and for which it made a market during
the period from December 1993 through April 1996. This settlement was entered
into without admitting or denying the NASDR's allegations. Under the settlement,
GKN Securities consented to sanctions including censure, the payment of
restitution, interest and fines of $1,723,000 and engaged an independent
consultant to review GKN Securities' policies, practices and procedures relating
to the fair pricing and commissions charged to customers and related to
supervisory and compliance policies and structure and agreed to implement the
recommendations of the independent consultant. Roger Gladstone consented to a
censure, a $50,000 fine and a suspension from association in a capacity with any
member of the NASD for 30 days. David Greenberg consented to a $15,000 fine and
to a suspension from any supervisory position with any member of the NASD for 10
days.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Our compensation committee is comprised of Messrs. Gladstone, Greenberg and
Roberts. Mr. Gladstone is our chairman of the board and chief executive officer
and Mr. Greenberg is our president and chief operating officer.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
our officers, directors and persons who beneficially own more than 10% of our
common stock to file reports of ownership and changes in ownership with the SEC.
These reporting persons are also required to furnish us with copies of all
Section 16(a) forms they file. To our knowledge, for the fiscal year ended
January 31, 2002, no person who is an officer, director or beneficial owner of
more than 10% of our common stock or any other person subject to Section 16 of
the Exchange Act failed to file on a timely basis, reports required by Section
16(a) of the Exchange Act.

EXECUTIVE COMPENSATION

The table below sets forth the aggregate compensation paid to our chief
executive officer and all other executive officers that received compensation
greater than $100,000 for the fiscal year ended January 31, 2002 (collectively,
the "Named Executive Officers"). With respect to the Named Executive Officers,
the Summary Compensation Table provides compensation information for services
rendered to us during the fiscal years ended January 31, 2001 and 2002,
respectively.

SUMMARY COMPENSATION TABLE
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LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------------------------------
NAME AND OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) COMPENSATION ($) OPTIONS/SARS (#) COMPENSATION ($)
--------------------------------------------------------------------------------------------------------------------------

ROGER N. GLADSTONE 2002 120,000 -- -- --
Chief Executive Officer 2001 120,000 75,159.30(1) 36,000 --
--------------------------------------------------------------------------------------------------------------------------
DAVID GREENBERG 2002 150,000 -- -- --
President 2001 150,000 22,964.87(1) 36,000 --
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(1) Represents brokerage commissions earned by these individuals.

EMPLOYMENT ARRANGEMENTS

We had entered into automatically renewing one-year employment agreements
with each of Roger Gladstone and David Greenberg. These employment agreements
will be terminated by mutual consent effective March 15, 2002. Both Messrs.
Gladstone and Greenberg have waived any bonus that might have been granted to
them under their employment agreements.

Each agreement provided for the granting of ten-year options to purchase
36,000 shares of common stock at the per-share offering price of our initial
public offering, or $9.00 per share. The options vested in equal annual
installments over a three-year period commencing on the one-year anniversary
date of the employment agreements. Mr. Gladstone's agreement provided for an
annual base salary of $120,000. Mr. Greenberg's agreement provided for an annual
base salary of $150,000. Each of the agreements gave the executive the right to
terminate his employment in the event of a change in control of our company, in
which case the executive would be entitled to immediate vesting of his options
and continued payment of his salary and benefits through the expiration of the
then current term of his employment agreement. Mr. Gladstone was also entitled
to a minimum bonus of $120,000, and Mr. Greenberg was entitled to a minimum
bonus of $150,000, in the event of termination by them because of a change in
control. Each of Mr. Gladstone's and Mr. Greenberg's agreement also contained
prohibitions on competing with us for one year after termination of employment
for any reason. Mr. Gladstone's agreement provided that he devote substantially
all of his business time to us while Mr. Greenberg's agreement provided for
full-time services.

In fiscal 2001, we lent to each of Messrs. Gladstone and Greenberg $22,750
and $17,500, respectively, for the purpose of enabling them to purchase shares
of our common stock on the open market. In fiscal 2002, these loans were
forgiven in exchange for their relinquishment to us of the shares they
purchased.

OPTION GRANTS

We did not grant any stock options to the Named Executive Officers during
the fiscal year ended January 31, 2002.

The following table sets forth the fiscal year-end option values of
outstanding options at January 31, 2002, and the dollar value of unexercised,
in-the-money options for the Named Executive Officers. There were no stock
options exercised by any of the Named Executive Officers during the fiscal year
ended January 31, 2002.

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AGGREGATED FISCAL YEAR-END OPTION VALUES
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NUMBER OF SECURITIES UNDERLYING DOLLAR VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR END: FISCAL YEAR END
------------------------------------------- --------------------------------------------
NAME EXERCISABLE (#) UNEXERCISABLE (#) EXERCISABLE ($) UNEXERCISABLE ($)
---------------------------- --------------------- --------------------- --------------------- ----------------------

Roger N. Gladstone 12,000 24,000 -0- -0-
---------------------------- --------------------- --------------------- --------------------- ----------------------
David F. Greenberg 12,000 24,000 -0- -0-
---------------------------- --------------------- --------------------- --------------------- ----------------------

1999 PERFORMANCE EQUITY PLAN

In November 1999, our board of directors adopted our 1999 Performance
Equity Plan. Our stockholders approved the plan in December 1999. This plan
authorizes the granting of awards of up to 350,000 shares of common stock to our
key employees, officers, directors and consultants. Awards consist of stock
options (both nonqualified options and options intended to qualify as incentive
stock options under Section 422 of the Internal Revenue Code of 1986),
restricted stock awards, deferred stock awards, stock appreciation rights and
other stock-based awards, as described in the plan.

The plan is administered by our board of directors which determines the
persons to whom awards will be granted, the number of awards to be granted and
the specific terms of each grant, including their vesting schedule, subject to
the provisions of the plan. The plan will terminate at such time as no further
awards may be granted and all awards granted under the plan are no longer
outstanding. However, incentive options may only be granted until December 1,
2009.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We, SSI Securities and Firebrand Financial Group and affiliates of
Firebrand Financial Group engaged in a variety of transactions between and among
each other in the ordinary course of our businesses. We have not retained an
independent third party to evaluate transactions with Firebrand Financial Group
and its affiliates and there has been no independent committee of the board of
directors to evaluate these transactions. The terms and conditions of these
transactions, including fees or other amounts paid by us connection with these
transactions, were agreed upon by all parties.

On August 31, 2001, we completed the transactions contemplated by an
agreement, dated August 1, 2001 and supplemented and amended on August 31, 2001
and November 7, 2001, with SSI Securities, BlueStone Capital Corp. and
HealthStar Corp. Pursuant to the agreement, SSI Securities sold and transferred
to BlueStone the substantial majority of its securities brokerage accounts,
registered representatives and employees and other tangible and intangible
assets. Following this transaction, SSI Securities filed a Form BDW to
relinquish its license as a broker-dealer and is no longer an operating
subsidiary of ours. In connection with this transaction, we entered into an
inter-company services agreement with SSI Securities and Firebrand Financial
Group, dated as of August 1, 2001. Under the services agreement:

o Firebrand Financial Group provided us and SSI Securities with
services in connection with the negotiation and consummation of
the agreement;

o Firebrand Financial Group would assist SSI Securities in the
subsequent wind-down of its operations for a period not to exceed
three-months from the date of the closing of the transaction; and

o Firebrand Financial Group would provide us and SSI Securities
with use of office space and other administrative and back-office
services.

As consideration for these services, during the fiscal year ended January 31,
2002, we paid to Firebrand Financial Group or accrued (and will subsequently pay
such accrual during this fiscal year) a total of $119,109. This inter-company
services agreement is being terminated upon completion of the transaction under
the purchase agreement between Firebrand Financial Group and Sutter Opportunity
Fund 2, LLC.

SHOCHET HOLDING CORP.

Dated: March 14, 2002