Newmark common stock and the fractional shares of Newmark common stock for which you will receive cash promptly after the distribution date. You can obtain more information regarding the direct registration system by contacting Newmark’s transfer agent and registrar. Contact information for Newmark’s transfer agent and registrar is provided elsewhere in this information statement. If you are entitled to receive cash in lieu of fractional shares in the distribution, a check will be separately mailed to you, or such cash will otherwise be credited to you.
Employee Stock-Based Plans
In connection with the distribution, all outstanding unvested BGC Partners restricted stock unit awards will receive an equitable adjustment to reflect the impact of the transaction on the price of shares of BGC Partners common stock, as determined in accordance with the terms of the separation agreement and as described below.
At the effective time of the distribution, each outstanding, unvested BGC Partners restricted stock unit award (whether held by a BGC Partners employee or Newmark employee) will be converted into (i) a BGC Partners restricted stock unit award covering the same number of shares of BGC Partners Class A common stock as immediately prior to the distribution and (ii) a Newmark restricted stock unit award covering a number of shares of Newmark Class A common stock equal to (a) 0.463895 multiplied by (b) the number of shares of BGC Partners Class A common stock covered by such BGC Partners restricted stock unit award immediately prior to the distribution. Except as described in the immediately preceding sentence, following the distribution, both the BGC Partners and Newmark restricted stock unit awards will have the same terms and conditions, including the same vesting periods, as the BGC Partners restricted stock unit awards had immediately prior to the distribution. Any fractional Newmark restricted stock units resulting from such conversion will be rounded up to the nearest whole share of Newmark Class A common stock when, after aggregating all such Newmark restricted stock units held by such holder, such holder would otherwise receive a Newmark restricted stock unit relating to fractional shares of Newmark Class A common stock.
Material U.S. Federal Income Tax Consequences
The following is a discussion of the material U.S. federal income tax consequences of the distribution to U.S. Holders (as defined below) of BGC Partners Class A common stock. This summary is based on the Code, the Treasury Regulations promulgated thereunder, rulings and other administrative pronouncements issued by the U.S. Internal Revenue Service (which we refer to as the IRS) and judicial decisions, all as in effect on the date of this information statement, and all of which are subject to differing interpretations and change at any time, possibly with retroactive effect. Any such change or interpretation could affect the accuracy of the statements and conclusions set forth in this document. No assurance can be given that the IRS would not assert, or that a court would not sustain, a position contrary to any of the tax consequences described below.
This discussion applies only to U.S. Holders of BGC Partners Class A common stock who hold such stock as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion proceeds on the basis that the distribution, together with certain related transactions, will be consummated in accordance with the separation and distribution agreement and the other separation-related agreements and as described in this information statement. This summary is for general information only and is not tax advice. It does not address all aspects of U.S. federal income taxation that may be relevant to a particular holder of BGC Partners Class A common stock in light of such holder’s particular circumstances, nor does it address tax considerations applicable to holders that are or may be subject to special treatment under the U.S. federal income tax laws, such as (without limitation) holders who are not U.S. Holders (as defined below), holders of BGC Partners class B common stock, holders who acquired BGC Partners common stock as compensation, insurance companies, financial institutions, mutual funds, certain former U.S. citizens or long-term residents of the United States, holders liable for the alternative minimum tax, holders whose functional currency is not the U.S. dollar, holders who hold their BGC Partners common stock as part of a hedge, straddle, constructive sale or conversion transaction, brokers or dealers in securities, traders in securities that electmark-to-market treatment,tax-exempt organizations, or partnerships, other pass-through entities, and the owners thereof, holders required to accelerate the recognition of any item of gross income as a result of such income being recognized on an applicable financial statement, or any holders who directly, indirectly or constructively own more than 5% of the total voting power or of the total value of the stock of BGC Partners or of any class of BGC Partners common stock. This discussion does not address any tax consequences arising under the unearned income Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010 or with respect to the Foreign Account Tax Compliance Act of 2010 (including the Treasury Regulations promulgated thereunder and any intergovernmental agreements entered in connection therewith and any laws, regulations or practices adopted in connection with any such agreement), nor does it address any tax considerations under state, local or foreign laws or U.S. federal laws other than those pertaining to the U.S. federal income tax. The distribution may be taxable under such other tax laws, and all holders should consult their own tax advisors with respect to the applicability and effect of any such tax laws.
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