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): June 15, 2007
FIRST MONTAUK FINANCIAL CORP.
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(Exact name of registrant as specified in its charter)
COMMISSION FILE NUMBER: 0-6729
NEW JERSEY 22-1737915
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Parkway 109 Office Center
328 Newman Springs Road
Red Bank, NJ 07701
(Address and zip code of principal executive offices)
(732) 842-4700
(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:
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into Material Definitive Agreement
On June 15, 2007, First Montauk Financial Corp. (the "Registrant"),
Victor Kurylak ("Kurylak"), Ward R. Jones, Jr., Barry Shapiro, David
I. Portman and Mindy Horowitz ("collectively, the "Registrant
Parties") and Edward H. Okun ("Okun"), Investment Properties of
America, LLC ("IPofA"), IPofA Water View, LLC ("Water View"), FMFG
AcquisitionCo, Inc. ("AcquisitionCo"), FMFG Ownership, Inc.
("Ownership I"), and FMFG Ownership II, Inc. ("Ownership II" and
collectively with Okun, IPofA, Water View, AcquisitionCo, Ownership
I, the "Okun Parties") executed a settlement agreement ("Settlement
Agreement") pursuant to which all parties agreed to settle all
disputes among the parties. The Settlement Agreement constitutes a
final and binding obligation on the part of all parties. The
Settlement Agreement is effective as of June 15, 2007 ("Closing
Date").
Mr. Kurylak is the President, Chief Executive Officer and director of
the Registrant. Messrs. Jones, Shapiro and Portman are independent
directors of the Registrant and Ms. Horowitz is the Acting Chief
Financial Officer of the Registrant.
Mr. Okun is a private investor and the beneficial owner of 11,117,027
shares of Common Stock of the Registrant representing 52.8% of the
outstanding voting power of the Registrant through two affiliated
companies, Ownership I and Ownership II, according to Amendment No. 4
to Schedule 13D, dated February 23, 2007, filed with the Securities
and Exchange Commission jointly by Mr. Okun, Ownership I and
Ownership II, Inc.
The Settlement Agreement provides as follows:
1. On the Closing Date, the parties shall direct the escrow agent,
Signature Bank New York, to pay to Ownership I all of the funds on
deposit by the Okun Parties under the Escrow Agreement executed and
delivered pursuant to the May 5, 2006 Merger Agreement by and among
Montauk, Ownership I and AcquisitionCo. The parties shall execute
and deliver the instructions to the Escrow Agent on the Closing Date.
2. Upon the Closing Date, the Okun Parties shall surrender for
cancellation all of the shares held by Ownership II and Series A
Preferred Stock held by Ownership I on the date hereof, and such
additional shares, if any, as may be necessary to cause Okun's
aggregate beneficial ownership of Common Stock of the Registrant to
equal 24.9% (3,300,308) of the total outstanding shares of Common
Stock of the Registrant as determined in accordance with Section 13D
of Securities and Exchange Act of 1934, as amended (the "Closing
Securities").
3. Upon the Closing Date, and for 60 days thereafter (the "Option
Period"), Registrant shall have the exclusive right to purchase the
balance of the shares held by Ownership I (the "Option Securities")
for the aggregate purchase price of $2,500,000 (the "Option"). During
the Option Period, Registrant shall be entitled to vote the Option
Securities on any matter before the Company's shareholders. The
Option may be exercised by Registrant pro rata from time to time
during the Option Period.
4. Upon the Closing Date, the lease between Water View and
Registrant shall be deemed void ab initio.
5. The parties agreed that no party shall make any negative or
derogatory statements in verbal, written, electronic or any other
form about each other, or the officers, employees and directors of
the parties including, but not limited to, a negative or derogatory
statement made in, or in connection with, any article or book, on a
website, in a chat room or via the internet.
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6. Upon the Closing Date, the actions (the "Actions") pending in
(i) the Superior Court of the State of New Jersey, Chancery Division,
Monmouth County Docket No. C-07-07 entitled First Montauk Financial
Corp., against Edward H. Okun, et al.; (ii) the United States
District Court, District of New Jersey, Civil Action No. 07cv00725,
entitled FMFG Ownership, Inc. against Victor Kurylak, et al. (the
"Derivative Action"); (iii) the United States District Court,
Southern District of Florida, Case No. 07-20482-Civ, entitled FMFG
Ownership, Inc. against Victor Kurylak; and (iv) the United States
District Court, District of New Jersey, Civil Action No.
3:07-cv-02578 (MLC) (JJH), entitled First Montauk Financial Corp. v.
Edward H. Okun, et al., (collectively the "Actions") shall be
dismissed with prejudice against all parties and without costs;
provided, however, if required, the dismissal of the Derivative
Action shall be subject to the approval of the court. The parties
agree to proceed in good faith and use best efforts to take all such
actions as are required to receive necessary court, regulatory and
self-regulatory approvals and negotiate, execute and deliver the
required documentation.
7. Until five (5) years from the Closing Date, the Okun Parties
shall not, purchase, or enter into any agreement directly or
indirectly to purchase, any securities of the Registrant, directly or
indirectly, individually, or as part of a group.
8. The Okun Parties and the Registrant shall bear their own costs
and expenses (including expenses of representatives) incurred in
connection with this transaction. Registrant's expenses shall include
the costs of indemnification of officers and directors. The parties
shall not request legal fees or reimbursement of costs or expenses in
the derivative action pending in the United States District Court,
District of New Jersey, Civil Action No. 07cv00725 or any other
Action.
This foregoing summary of the Settlement Agreement is qualified in
its entirety by reference to full text of the Settlement Agreement,
which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
Item 8.01 Other Events
On June 15, 2007, the Registrant issued a press release announcing
that the Registrant and certain directors and officers of the
Registrant had executed a final and binding settlement agreement
with Edward H. Okun and certain of his affiliated companies
settling all disputes among them. A copy of this press release is
attached as Exhibit 99.1 to this Current Report. Exhibit 99.1 is
being "furnished" and shall not be deemed "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, nor shall it be
deemed incorporated by reference in any filing under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except as shall
be expressly set forth by specific reference in such filing.
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Item 9.01 Financial Statements and Exhibits
(c) Exhibits
The following exhibits are filed or furnished herewith:
10.1 Settlement Agreement, dated as of June 15, 2007, among the
Registrant, Edward H. Okun, Investment Properties of
America, LLC, IPofA Water View, LLC, FMFG Acquisition
Co., FMFG Ownership I, FMFG Ownership II, Victor Kurylak,
Ward R. Jones, Jr., Barry Shapiro, David Portman and
Mindy Horowitz
99.1 Press Release dated June 15, 2007
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report on Form 8-K to be signed on its
behalf by the undersigned hereunto duly authorized.
FIRST MONTAUK FINANCIAL CORP.
By: /s/ Victor K. Kurylak
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Name: Victor K. Kurylak
Title: President and Chief Executive
Officer
Date: June 15, 2007
EXHIBIT INDEX
Exhibit Description
Number
10.1 Settlement Agreement, dated as of June 15, 2007, among the
Registrant, Edward H. Okun, Investment Properties of
America, LLC, IPofA Water View, LLC, FMFG Acquisition
Co., FMFG Ownership I, FMFG Ownership II, Victor Kurylak,
Ward R. Jones, Jr., Barry Shapiro, David Portman and
Mindy Horowitz
99.1 Press Release dated June 15, 2007
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