UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-12
BKF CAPITAL GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
STEEL PARTNERS II, L.P.
STEEL PARTNERS, L.L.C.
WARREN G. LICHTENSTEIN
RONALD LABOW
KURT SCHACHT
- --------------------------------------------------------------------------------
(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
- --------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
-2-
Steel Partners II, L.P. ("Steel") is filing materials contained in
this Schedule 14A with the Securities and Exchange Commission in connection with
the solicitation of proxies in support of the election of the nominees of Steel
to the Board of Directors of BKF Capital Group, Inc. (the "Company") and other
business proposals at the 2005 annual meeting of the stockholders of the Company
scheduled to be held on June 23, 2005, or any other meeting of stockholders held
in lieu thereof, and any adjournments, postponements, reschedulings or
continuations thereof (the "Annual Meeting").
Item 1: On June 16, 2005, Steel issued the following press release.
FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Media: Sitrick And Company Investors: Morrow & Co., Inc.
Los Angeles John Ferguson
Michael Sitrick (800) 654-2468
Terry Fahn steel.info@morrowco.com
(310) 788-2850
New York
Jeff Lloyd
(212) 573-6100
FOR IMMEDIATE RELEASE
STEEL PARTNERS DELIVERS LETTER TO BKF STOCKHOLDERS
NEW YORK, NY - JUNE 16, 2005 - Citing its commitment to aligning the interests
of stockholders and employees by enhancing profitability and tying compensation
to performance, Steel Partners II, L.P. today delivered the following letter to
BKF's (NYSE: BKF) stockholders:
STEEL PARTNERS II, L.P.
BKF STOCKHOLDERS - VOTE FOR INDEPENDENT
DIRECTORS WHO WILL REPRESENT YOUR INTERESTS
June 16, 2005
Fellow BKF Stockholders:
Steel Partners II, L.P. is committed to aligning the interests of stockholders
and employees by enhancing profitability and tying compensation to performance.
Our platform is straightforward. We believe that while BKF may willingly accept
the fact that it underperforms its peers, its stockholders should not. BKF must
strive for and achieve excellence in its bottom-line performance, grow its
assets under management and reward its employees for performance.
During the last few weeks we have communicated with you to discuss BKF's poor
performance, its lack of progressive corporate governance policies and its
blatant disregard for your concerns. The pressure you - the owners of BKF -
exerted on BKF's Board through your support of our nominees and platform forced
BKF's Board to adopt a few last minute corporate governance changes with the
hope of staving off the accountability that the election of our nominees would
bring to the board level. Without the election of our nominees, we doubt BKF's
Board will make the necessary changes to ensure profitability. BKF's Board would
have you believe that we are seeking control of the Board. If elected, our
nominees will hold only three of eight seats on BKF's Board.
THIS BOARD WANTS IMMUNITY - NOT ACCOUNTABILITY!
The Board admits it seeks to pay compensation "competitive with that offered by
larger or private investment management firms." Yet they claim that our
expressed desire to align their generous compensation arrangements with
stockholder interests and bottom-line performance could undermine their "ability
to attract and retain talented employees" which could affect their relationships
with their clients.
In our opinion, the Board's position is misguided: BKF's Board wants to be free
to award lucrative compensation packages (even without non-solicitation
agreements) to its executives, but any effort to align those pay packages with
stockholder interests is met with the "doomsday threat" that their employees
will leave the company, possibly destroying BKF's client relationships in the
process. It is the Board's position that compensation shouldn't be criticized or
changed in any way and that director nominees - such as ours - who advocate
change shouldn't be elected to the Board. They would like you to believe there
is no alternative to their system. This is the opposite of accountability. This
is immunity from accountability and epitomizes what is wrong with BKF's Board.
Consider the fact that Frank Rango (who already resigned from BKF) and Henry
Levin were given lucrative golden parachute contracts without any non-compete
provisions, or worse yet, non-solicitation provisions which would limit their
ability to solicit employees or clients of BKF. To us, this represents another
incident of placing management's interests over those of the stockholders. THIS
CANNOT BE TOLERATED ANY LONGER!
We believe that BKF has substantial untapped value as an independent company
with a plan that rewards its employees based on performance, not based on
revenue irrespective of performance. BKF should follow the lead of other
financial institutions who are tying compensation to performance. In January
2005, Janus Capital's 21 Denver-based portfolio managers agreed to a new
compensation plan that is tied to 1- and 3-year fund performance, with greater
emphasis on 3-year results. A significant portion of the portfolio managers'
variable compensation will be earned and paid in a combination of Janus equity
grants and Janus mutual funds. Similarly, Lazard Ltd. has established a policy
setting total compensation and benefits expense, including amounts payable to
managing directors, at a level not to exceed 57.5% of operating revenue so that
it may achieve its target operating profit margin. If our nominees are elected,
they will recommend that BKF's Board explore the adoption of similar
performance-based compensation plans.
STOCKHOLDERS DESERVE ACCOUNTABILITY AND PROFITABILITY!
Up until this proxy contest, BKF operated in an environment of immunity ignoring
any change, no matter how beneficial it may be to BKF and its bottom line. In
seeking to elect three directors to BKF's Board, our objective is to restore
profitability to BKF by increasing assets under management and reducing its cost
structure, not by causing wholesale changes to company personnel as BKF would
have you believe. Any suggestion by BKF's Board that we intend to dismantle the
company's pool of skilled portfolio managers is not true.
We are confident in our plan to restore profitability to BKF by 1) aligning the
interests of BKF employees and stockholders, 2) rewarding employees for
performance, and 3) increasing assets under management. If elected to BKF's
Board, we pledge to use our best efforts to achieve these goals. We believe the
corporate governance initiatives are the first step in the process, not the
last. We plan to seek the support of other stockholders to endorse our plan to
help fix and build BKF's business.
We urge all stockholders to vote the GOLD proxy card to support Steel Partners'
nominees.
Thank you for your support,
Warren Lichtenstein
SHAREHOLDERS OF BKF ARE ADVISED TO READ THE DEFINITIVE PROXY STATEMENT AND OTHER
DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY STEEL PARTNERS II, L.P. AND
THE OTHER PARTICIPANTS IN THE SOLICITATION FOR USE AT BKF'S ANNUAL MEETING
SCHEDULED TO BE HELD ON JUNE 23, 2005. THE DEFINITIVE PROXY STATEMENT IS
AVAILABLE AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEB SITE AT
WWW.SEC.GOV OR BY CALLING MORROW & CO., INC., TOLL FREE AT (800) 607-0088.
