Annual report pursuant to Section 13 and 15(d)

Equity

v3.10.0.1
Equity
12 Months Ended
Dec. 31, 2018
Equity [Abstract]  
Equity

11. EQUITY

SLP historically made, and will continue to make, distributions of its net income to the holders of its partnership units for income tax purposes as required under the terms of its Second Amended and Restated Limited Partnership Agreement and also made, and will continue to make, additional distributions of net income under the terms of its Second Amended and Restated Limited Partnership Agreement.  Partnership distributions totaled $6,773, $6,205 and $5,761 for the years ended December 31, 2018, 2017 and 2016, respectively.   Distributions are included in non-controlling interests in the Consolidated Statements of Financial Condition.  

Pursuant to SLP’s Second Amended and Restated Limited Partnership Agreement, as amended and restated, partner incentive allocations are treated as distributions of net income. The remaining net income or loss after partner incentive allocations was generally allocated to the partners based on their pro rata ownership. Net income allocation is subject to the recovery of the allocated losses of prior periods. Distributions of partner incentive allocations of net income for the years ended December 31, 2018, 2017 and 2016 amounted to $24,935, $21,177 and $18,827, respectively. The distributions are included in non-controlling interests in the Consolidated Statements of Financial Condition and Consolidated Statement of Changes in Equity for the years ended December 31, 2018, 2017 and 2016.  The Company treats SLP’s partner incentive allocations as compensation expense and accrues such amounts when earned.  During the years ended December 31, 2018, 2017 and 2016, SLP accrued partner incentive allocations of $27,197, $25,101 and $20,238, respectively.  

Silvercrest—Equity

Silvercrest has the following authorized and outstanding equity:

 

 

  

Shares at December 31, 2018

 

  

Authorized

 

  

Outstanding

 

  

Voting Rights

  

Economic
Rights

Common shares

  

 

 

 

  

 

 

 

  

 

  

 

Class A, par value $0.01 per share

  

 

50,000,000

  

  

 

8,518,096

  

  

1 vote per
share (1), (2)

  

All (1), (2)

 

Class B, par value $0.01 per share

  

 

 

25,000,000

  

  

 

4,934,103

  

  

 

1 vote per
share (3),(4)

  

 

None (3), (4)

Preferred shares

  

 

 

 

  

 

 

 

  

 

  

 

Preferred stock, par value $0.01 per share

  

 

10,000,000

  

  

 

 

  

See footnote (5)
below

  

See footnote (5)
below

(1)

Each share of Class A common stock is entitled to one vote per share. Class A common stockholders have 100% of the rights of all classes of Silvercrest’s capital stock to receive dividends.

(2)

During 2016, Silvercrest granted 10,582 restricted stock units which will vest and settle in the form of Class A shares of Silvercrest, of which 3,792 remain unvested as of December 31, 2018.

(3)

Each share of Class B common stock is entitled to one vote per share.

(4)

Each Class B unit of SLP held by a principal is exchangeable for one share of the Company’s Class A common stock. The principals collectively hold 4,934,103 Class B units, which represents the right to receive their proportionate share of the distributions made by SLP and 243,523 restricted stock units which will vest and settle in the form of Class B units of SLP. The 243,523 restricted stock units which have been issued to our principals entitle the holders thereof to participate in distributions from SLP as if the underlying Class B units are outstanding and thus are taken into account to determine the economic interest of each holder of units in SLP. However, because the Class B units underlying the deferred equity units have not been issued and are not deemed outstanding, the holders of deferred equity units have no voting rights with respect to those Class B units. Silvercrest will not issue shares of Class B common stock in respect of deferred equity units of SLP until such time that the underlying Class B units are issued.

(5)

Silvercrest’s board of directors has the authority to issue preferred stock in one or more classes or series and to fix the rights, preferences, privileges and related restrictions, including dividend rights, dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any class or series, or the designation of the class or series, without the approval of its stockholders.

Silvercrest is dependent on cash generated by SLP to fund any dividends. Generally, SLP will distribute its profits to all of its partners, including Silvercrest, based on the proportionate ownership each holds in SLP. Silvercrest will fund dividends to its stockholders from its proportionate share of those distributions after provision for income taxes and other obligations.

During the year ended December 31, 2018, Silvercrest issued the following shares:

Class A Common Stock

 

 

 

Transaction

 

 

 

# of

 

 

 

Date

 

 

 

Shares

 

Class A common stock outstanding - January 1, 2018

 

 

 

 

 

8,142,120

 

Issuance of Class A common stock upon conversion of Class B units to Class A common stock

 

January 2018

 

 

 

31,650

 

Issuance of Class A common stock upon conversion of Class B units to Class A common stock

 

March 2018

 

 

 

85,286

 

Issuance of Class A common stock upon conversion of Class B units to Class A common stock

 

April 2018

 

 

 

20,000

 

Issuance of Class A common stock upon vesting of restricted stock units

 

May 2018

 

 

 

1,896

 

Issuance of Class A common stock upon conversion of Class B units to Class A common stock

 

May 2018

 

 

 

24,732

 

Issuance of Class A common stock upon conversion of Class B units to Class A common stock

 

August 2018

 

 

 

22,285

 

Issuance of Class A common stock upon conversion of Class B units to Class A common stock

 

September 2018

 

 

 

17,666

 

Issuance of Class A common stock upon conversion of Class B units to Class A common stock

 

November 2018

 

 

 

64,142

 

Issuance of Class A common stock upon conversion of Class B units to Class A common stock

 

December 2018

 

 

 

108,319

 

Class A common shares outstanding - December 31, 2018

 

 

 

 

 

8,518,096

 

Class B Common Stock

 

 

 

Transaction

 

 

 

# of

 

 

 

Date

 

 

 

Shares

 

Class B common stock outstanding - January 1, 2018

 

 

 

 

 

5,059,319

 

Cancellation of Class B common stock upon conversion of Class B units to Class A common stock

 

January 2018

 

 

 

(31,650

)

Cancellation of Class B common stock upon conversion of Class B units to Class A common stock

 

March 2018

 

 

 

(85,286

)

Cancellation of Class B common stock upon conversion of Class B units to Class A common stock

 

April 2018

 

 

 

(20,000

)

Issuance of Class B common stock upon vesting of restricted stock units

 

May 2018

 

 

 

948

 

Cancellation of Class B common stock upon conversion of Class B units to Class A common stock

 

May 2018

 

 

 

(24,732

)

Issuance of Class B common stock

 

June 2018

 

 

 

6,289

 

Cancellation of Class B common stock upon conversion of Class B units to Class A common stock

 

August 2018

 

 

 

(22,285

)

Issuance of Class B common stock upon vesting of restricted stock units

 

August 2018

 

 

 

241,627

 

Cancellation of Class B common stock upon conversion of Class B units to Class A common stock

 

September 2018

 

 

 

(17,666

)

Cancellation of Class B common stock upon conversion of Class B units to Class A common stock

 

November 2018

 

 

 

(64,142

)

Cancellation of Class B common stock upon conversion of Class B units to Class A common stock

 

December 2018

 

 

 

(108,319

)

Class B common shares outstanding - December 31, 2018

 

 

 

 

 

4,934,103

 

 

In January 2018, the Company redeemed from certain existing partners 31,650 shares of Class B common stock in connection with the exchange of a like number of Class B units to Class A common stock pursuant to the resale and registration rights agreement between the Company and its principals.

In March 2018, the Company redeemed from certain existing partners 85,286 shares of Class B common stock in connection with the exchange of a like number of Class B units to Class A common stock pursuant to the resale and registration rights agreement between the Company and its principals.

In April 2018, the Company redeemed from an existing partner 20,000 shares of Class B common stock in connection with the exchange of a like number of Class B units to Class A common stock pursuant to the resale and registration rights agreement between the Company and its principals.  

In May 2018, the Company issued 1,896 shares of Class A common stock and 948 shares of Class B common stock upon the vesting of restricted stock units.

In May 2018, the Company redeemed from certain existing partners 24,732 shares of Class B common stock in connection with the exchange of a like number of Class B units to Class A common stock pursuant to the resale and registration rights agreement between the Company and its principals.

In June 2018, the Company issued 6,289 shares of Class B common stock to a certain principal in connection with admission to SLP.  

In August 2018, the Company issued 241,627 shares of Class B common stock upon the vesting of restricted stock units.

In August 2018, the Company redeemed from certain existing partners 22,285 shares of Class B common stock in connection with the exchange of a like number of Class B units to Class A common stock pursuant to the resale and registration rights agreement between the Company and its principals.

In September 2018, the Company redeemed from certain existing partners 17,666 shares of Class B common stock in connection with the exchange of a like number of Class B units to Class A common stock pursuant to the resale and registration rights agreement between the Company and its principals.

In November 2018, the Company redeemed from certain existing partners 64,142 shares of Class B common stock in connection with the exchange of a like number of Class B units to Class A common stock pursuant to the resale and registration rights agreement between the Company and its principals.

In December 2018, the Company redeemed from certain existing partners 108,319 shares of Class B common stock in connection with the exchange of a like number of Class B units to Class A common stock pursuant to the resale and registration rights agreement between the Company and its principals.

The total number of shares of Class B common stock outstanding and held by employee-principals equals the number of Class B units those individuals hold in SLP. Shares of Silvercrest’s Class B common stock are issuable only in connection with the issuance of Class B units of SLP. When a vested or unvested Class B unit is issued by SLP, Silvercrest will issue to the holder one share of its Class B common stock in exchange for the payment of its par value, subject to the holder’s agreement to be bound by the terms of a stockholders’ agreement amongst the Class B stockholders of the Company. Each share of Silvercrest’s Class B common stock will be redeemed for its par value and cancelled by Silvercrest if the holder of the corresponding Class B unit exchanges or forfeits its Class B unit pursuant to the terms of the Second Amended and Restated Limited Partnership Agreement of SLP, the terms of the 2012 Equity Incentive Plan of Silvercrest, or otherwise.