SEC Info

Home

Search

My Interests

Help

Sign In

Please Sign In

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 6/20/05  Crown Financial Holdings/Inc      PRE 14A     7/28/05    1:40                                     1193125

Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14A     Preliminary Proxy Statement                         HTML    319K 

Table of Contents

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

File No. 0-17973

Filed by the Registrant x                                                     Filed by a Party other than the Registrant ¨

Check the appropriate box:

CROWN FINANCIAL HOLDINGS, INC.

(Name of Registrant as Specified in its Charter)

Payment of Filing Fee (Check the appropriate box):

N/A

N/A

N/A

N/A

$____________

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.

Table of Contents

CROWN FINANCIAL HOLDINGS, INC.

525 Washington Boulevard

Jersey City, NJ 07310

(201) 459-9500

June 20, 2005

Dear Shareholder:

It is my pleasure to invite you to Crown Financial Holdings, Inc.’s 2005 Annual Meeting of Shareholders.

We will hold the meeting on [Thursday, July 28, 2005 at the Courtyard by Marriott Jersey City/Newport, 540 Washington Boulevard, Jersey City, New Jersey 07310 at 8:00 a.m]. In addition to the formal items of business, I will be available at the meeting to answer your questions. This booklet includes the Notice of Annual Meeting and the proxy statement. The proxy statement describes the business that we will conduct at the meeting, and provides information about our company. This proxy statement is being mailed to all shareholders on or about July 5, 2005. We urge you to read this information carefully.

Please note that only shareholders of record at the close of business on June 10, 2005, the record date, may vote at the meeting. Your vote is important. Whether or not you plan to attend the Annual Meeting, please complete, date, sign and return the enclosed proxy card promptly. If you attend the meeting and prefer to vote in person, you may do so.

We look forward to seeing you at the meeting.

Table of Contents

CROWN FINANCIAL HOLDINGS, INC.

Newport Tower, 34th Floor

525 Washington Boulevard, Jersey City, New Jersey 07310

tel: (201) 459-9500

Notice of Annual Meeting of Shareholders

To the Shareholders of Crown Financial Holdings, Inc.:

Notice is hereby given that an Annual Meeting of Shareholders (Annual Meeting) of Crown Financial Holdings, Inc., a New Jersey corporation (Crown Holdings), will be held at the [Courtyard by Marriott Jersey City/Newport, 540 Washington Boulevard, Jersey City, New Jersey 07310 on Thursday, July 28, 2005 at 8:00 a.m.], for the following purposes, which are fully described in the accompanying proxy statement:

1. To elect directors, each to serve until the next shareholder meeting or until his successor has been duly elected and qualified;

2. To ratify the appointment of Marcum & Kliegman LLP as our independent registered public accountants;

4. To transact such other business as may properly come before the Annual Meeting or any adjournment thereof.

A proxy statement describing the matters to be considered at the Annual Meeting is attached to this notice. Only holders of record of shares of our common stock and Series A Convertible Preferred Stock (Series A Preferred) at the close of business on June 10, 2005 (Record Date) are entitled to notice of, and to vote at, the Annual Meeting. On that day, 18,463,902 shares of common stock and 7,807 shares of Series A Preferred were outstanding. Each share of Series A Preferred is convertible into 1,000 shares of common stock and has voting rights on an as converted basis. A complete list of shareholders entitled to vote at the Annual Meeting will be available for examination, for proper purposes, during ordinary business hours at our corporate offices, Newport Tower, 34^th Floor, 525 Washington Boulevard, Jersey City, New Jersey 07310, during the ten days before the Annual Meeting. Your vote is very important regardless of how many shares of our stock you own.

WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE PROVIDED.

Jersey City, New Jersey

June 20, 2005

Table of Contents

 Crown Financial Holdings, Inc.

Table of Contents

Table of Contents

Crown Financial Holdings, Inc.

Annual Meeting of Shareholders to be held on

[July 28, 2005]

Proxy Statement

Dated June 20, 2005

 Information about the Annual Meeting and Voting

 Why did you send me this proxy statement?

We sent you this proxy statement and the enclosed proxy card because the Board of Directors (Board) of Crown Financial Holdings, Inc. (Crown Holdings) is soliciting your proxy vote at the 2005 Annual Meeting of Shareholders (Annual Meeting). This proxy statement summarizes the information you need to vote intelligently on the proposals to be considered at the Annual Meeting. However, you do not need to attend the Annual Meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card.

 What is Crown Financial Holdings, Inc.?

In January 2005, Crown Financial Group, Inc., a New Jersey corporation and a NASD broker-dealer (Group) effected a holding company reorganization as permitted under New Jersey corporate laws. For that purpose, Group formed Crown Holdings and, after the holding company reorganization, became a wholly-owned subsidiary of Crown Holdings. The holding company organizational structure was effected pursuant to an Agreement and Plan of Merger (Merger Agreement), by and among Group, Crown Holdings and CFGI Merger Sub, Inc., a New Jersey corporation formed for the sole purpose of effecting the organization. The Merger Agreement provided for the merger of CFGI Merger Sub with and into Group, after which Group remained as the surviving entity and became a wholly-owned subsidiary of Crown Holdings. The holding company reorganization did not require shareholder approval under New Jersey laws.

As a result of the Merger, Group’s shareholders became shareholders of Crown Holdings and have the same number of shares and percentage ownership and the same rights, privileges and interests with respect to Crown Holdings that they held in Group immediately prior to the reorganization. Additionally, each outstanding option or warrant to purchase shares of the Group’s common stock were automatically converted into an option or warrant to purchase, upon the same terms and conditions, an identical number of shares of Crown Holdings’ common stock. The conversion of shares of capital stock in the Merger occurred without an exchange of certificates. Certificates representing shares of outstanding capital stock of Group are deemed to represent the same number of shares of capital stock in Crown Holdings. The authorized capital stock of Crown Holdings, the designations, rights, powers and preferences of such capital stock and the qualifications, limitations and restrictions thereof were also consistent with those of Group’s capital stock immediately prior to the Merger. The directors of Crown Holdings were the same individuals who were directors of Crown Holdings immediately prior to the Merger.

1

Table of Contents

Prior to February 17, 2005, Group was a registered broker dealer engaging in market making activities in excess of approximately 7,000 securities listed on the Nasdaq National Market System, Nasdaq SmallCap, OTC Bulletin Board and the Pink Sheets. Group provided securities market making, trading, underwriting, investment banking and brokerage services, primarily for institutions and corporations. On February 22, 2005, Crown Holdings announced that Group, its wholly-owned broker-dealer subsidiary, had voluntarily ceased market making activities due to issues related to net capital requirements of broker dealers as mandated by the SEC. On May 23, 2005, the NASD staff issued a letter to Group stating that it was required to cease conducting a securities business, based on Group’s May 20, 2005 notice to the SEC and NASD that it was not in compliance with its minimum net capital requirement. As of the date hereof, Group is not conducting a securities business and is in the process of seeking strategic investment. Group remains as a registered broker-dealer with the SEC and is an NASD member.

 How many votes do I have?

We will be sending this proxy statement, the attached Notice of Annual Meeting and the enclosed proxy card on or about July 5, 2005 to all shareholders. At the close of business on June 10, 2005 (Record Date) shareholders who owned our (i) common stock are entitled to 1 vote for each share of common stock they held on that date, in all matters properly brought before the Annual Meeting and (ii) Series A Convertible Preferred Stock (Series A Preferred) are entitled to 1,000 votes for each share of Series A Preferred. Series A Preferred shares vote equally with the common stock shares, on an as converted basis, and not as a separate class, with the exception of Proposal #3. On the Record Date, we had 18,463,902 shares of common stock and 7,807 shares of Series A Preferred shares issued and outstanding.

 What proposals will be addressed at the Annual Meeting?

We will address the following proposals at the Annual Meeting:

2

Table of Contents

 Why would the Annual Meeting be postponed?

The Annual Meeting will be postponed if a quorum is not present on the date of the meeting. A majority of the voting stock issued and outstanding and entitled to vote at the Annual Meeting, present in person or represented by proxy, constitutes a quorum at all meetings of the shareholders for transaction of business. If a quorum is not present, the Annual Meeting may be postponed to a later date when a quorum is obtained. Abstentions and broker non-votes are counted for purposes of determining the presence of a quorum for the transaction of business, but are not counted as an affirmative vote for purposes of determining whether a proposal has been approved. For the purposes of determining whether a proposal has received a majority of votes cast, where a shareholder abstains from voting, those shares will be counted against the proposal.

 How do I vote in person?

If you plan to attend the Annual Meeting, or at a later date if it is postponed, and vote in person, we will give you a ballot when you arrive. However, if your shares are held in the name of your broker, bank or other nominee, you must bring a power of attorney executed by the broker, bank or other nominee that owns the shares of record for your benefit, authorizing you to vote the shares.

 How do I vote by proxy?

Whether you plan to attend the Annual Meeting or not, we urge you to vote your shares now, in accordance with the instructions on the proxy card. You have several voting options, including the internet, phone or mail. Voting now will not affect your right to attend the Annual Meeting and vote in person.

If you vote on a timely basis as described above, your “proxy” (one of the individuals named on your proxy card) will vote your shares as you have directed. If you vote, but do not make specific choices, your proxy will vote your shares as recommended by our Board as follows:

If any other matter is presented, your proxy will vote in accordance with his best judgment. At the time this proxy statement went to press, we knew of no matters that needed to be acted on at the Annual Meeting other than those discussed in this proxy statement.

 May I revoke my proxy?

If you give a proxy, you may revoke it at any time before it is exercised. You may revoke your proxy in any one of three ways:

3

Table of Contents

 Where are Crown Holdings’ principal executive offices?

Our principal executive offices are located at 525 Washington Boulevard, Jersey City, NJ 07310. Our telephone number is (201) 459-9500.

 What vote is required to approve each proposal?

Proposal 1:    Election of Directors

A plurality of the eligible votes cast is required to elect director nominees. A nominee who receives a plurality means he has received more votes than any other nominee for the same director’s seat. So, if you do not vote for the nominee, or you indicate “withhold authority to vote” for the nominee on you proxy card, your vote will not count either “for” or “against” the nominee. Owners of common stock are not entitled to cumulative voting in the election of directors.

Proposal 2:    Ratification of Independent Registered Public Accountants

The vote of the holders of a majority of stock having voting power present in person or represented by proxy at the Annual Meeting is required for approval of Proposal 2.

Proposal 3:    Amendment to the Certificate of Incorporation to Increase Authorized Capital Stock.

The affirmative vote of two-thirds of the shares of each class outstanding and entitled to vote on the proposal at the Annual Meeting is required for approval of Proposal 3. Upon approval by the required shareholder vote, the amendment will become effective upon the filing of the Certificate of Amendment to the Certificate of Incorporation with the Department of State of the State of New Jersey, which filing is anticipated to occur shortly following the Annual Meeting. A copy of this Amendment is included as Appendix A to this proxy statement for your reference.

 Are there any dissenters’ rights of appraisal?

The Board has not proposed any action for which the laws of the State of New Jersey, our Certificate of Incorporation or By-laws provide a right of a shareholder to dissent and obtain payment for shares.

 Who bears the cost of soliciting proxies?

We will bear the cost of soliciting proxies in the accompanying form and will reimburse brokerage firms and others for expenses involved in forwarding proxy materials to beneficial owners or soliciting their execution. We estimate that the costs associated with solicitations of the proxies requested by this proxy statement will be approximately $10,000.

4

Table of Contents

 How can I obtain additional information regarding Crown Holdings?

Copies of our 2005 Annual Report on Form 10-K will be sent to all shareholders along with this proxy statement. Additional copies will be furnished without charge to shareholders upon written request. Exhibits to the Annual Report will be provided upon written request and payment of an appropriate processing fee. All written requests should be directed to: Regina H. Connolly, Corporate Secretary, Crown Financial Holdings, Inc., 525 Washington Boulevard, Jersey City, NJ 07310.

We are subject to the informational requirements of the Securities Exchange Act of 1934, which requires that it file reports, proxy statements and other information with the Securities and Exchange Commission. The SEC maintains a website on the Internet that contains reports, proxy and information statements and other information regarding registrants, including the Company, that file electronically with the SEC. The SEC’s website address is http://www.sec.gov . In addition, our Exchange Act filings may be inspected and copied at the public reference facilities of the SEC located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549; and at the SEC’s regional offices at 233 Broadway, New York, NY 10279 and Citicorp Center, 500 West Madison Street, Room 1400, Chicago, IL 60661. Copies of the material may also be obtained upon request and payment of the appropriate fee from the Public Reference Section of the SEC located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549.

 Information about Crown Holdings Stock Ownership

 Which shareholders own at least 5% of Crown Holdings?

The common stock and Series A Preferred constitute our only voting securities. Each share of Series A Preferred is convertible into 1,000 shares of common stock and has voting rights on an as converted basis. The following table shows, as of the Record Date and to the best of our knowledge, all persons we know to be “beneficial owners” of more than 5% of the voting stock. On the Record Date, there were 18,463,902 shares of common stock and 7,807 shares of Series A Preferred issued and outstanding, respectively. This information is based, in part, upon information provided by certain shareholders. In the case of persons other than our officers and directors, the information is based on our records in the case of private placements of restricted securities and a review of Schedules 13D and 13G filed with the SEC.

5

Table of Contents

6

Table of Contents

 How much stock is beneficially owned by directors and executive officers of Crown Holdings?

The following table shows, as of the Record Date, the common stock owned by each director and executive officer. As of the Record Date, all of the present directors, as a group of four persons, own beneficially 5,164,225 shares (a beneficial ownership of 18.2%) and all of our present directors and executive officers, as a group of nine persons, own beneficially 5,424,828 shares (a beneficial ownership of 19%) of our common stock. Unless noted, all of such shares of common stock are owned as of Record Date by each person or entity named as beneficial owner and such person or entity has sole voting and dispositive power with respect to the shares of common stock owned by each of them. As to each person or entity named as beneficial owners, such person’s or entity’s percentage of ownership is determined by assuming that any options or convertible securities held by such person or entity which are exercisable or convertible within 60 days from the date hereof have been exercised or converted, as the case may be. Unless otherwise stated, the business address of each of the named individuals in this table is c/o Crown Financial Holdings, Inc., 525 Washington Boulevard, Jersey City, New Jersey 07310.

7

Table of Contents

 Do any of the officers and directors have an interest in the matters to be acted upon?

Messrs. Leighton, Duncan, Toh, and Shek are the nominees for re-election to the Board and therefore all have an interest in the outcome of Proposal 1. To the best of our knowledge, no directors or officers have an interest, direct or indirect, in any of the other matters to be acted upon.

8

Table of Contents

 Did directors, executive officers and greater-than-10% shareholders comply with Section 16(a) beneficial ownership reporting requirements during fiscal year ended January 31, 2005?

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of any publicly traded class of our equity securities, to file reports of ownership and changes in ownership of our equity securities with the SEC. Officers, directors, and greater than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms that they file.

Based solely on the reports received and on the representations of the reporting persons, we believe that these persons have complied with all applicable filing requirements of Section 16(a) of the Exchange Act during the fiscal year ended January 31, 2005, except for the following individuals that inadvertently filed late reports, including John P. Leighton (5 Form 4, 1 Form 5), Jeffrey M. Hoobler (1 Form 4, 1 Form 5), Charles B. Kennedy III (1 Form 3, 1 Form 4, 1 Form 5), Alan E. Feitell (1 Form 3, 4 Form 4, 1 Form 5), Robert S. Thornton (1 Form 3, 2 Form 4, 1 Form 5); Alfred T. Duncan (1 Form 4, 1 Form 5), Donald Shek (1 Form 3, 1 Form 4, 1 Form 5), Susan S. Ciallella (1 Form 4), Andrew Wimpfheimer (former independent director) (1 Form 4, 1 Form 5) and Henry Y.L. Toh (1 Form 3, 1 Form 4, 1 Form 5).

 Information about Directors and Executive Officers

 Directors and Executive Officers

The following table sets forth certain information about our directors and executive officers as of June 10, 2005:

9

Table of Contents

Below are descriptions of the backgrounds of our executive officers and directors and their principal occupation for the last five years.

John P. Leighton, Chairman, Chief Executive Officer, President and Director. Mr. Leighton became our Co-Chairman, Chief Executive Officer and a Director in January 2003. Later in January 2003, he was named President and in April 2003 he became our Chairman. From November 2000 until joining the company, Mr. Leighton was a private investor. From March 1995 to November 2000, Mr. Leighton was Executive Vice President, Managing Director Global Institutional Sales at Knight Securities, L.P., a broker-dealer (Knight). Mr. Leighton received a B.S. degree in Business Administration from Niagara University.

Jeffrey M. Hoobler, Interim President, Chief Executive Officer. Mr. Hoobler joined the company as Executive Vice President and Chief Operating Officer in January 2003. From July 1997 through September 2001 and from July 2002 until joining the company, Mr. Hoobler served as Senior Vice President with responsibility, among other areas, for Institutional eCommerce Sales, Restricted Equities, and Sponsored Access for Institutions at Knight. Mr. Hoobler received a B.S. degree from the United States Naval Academy.

Robert S. Thornton, Senior Vice President, Chief Financial Officer and Treasurer. Robert S. Thornton joined the company on September 8, 2003 as Controller. Prior to that, he spent 10 years at Schroder & Co. Inc. as Director, Assistant Controller and Manager of Financial Planning and Analysis. Previously, he spent seven years at Smith Barney, Harris Upham as Managing Director, Manager of Financial Planning and Analysis. In addition, Mr. Thornton is a Certified Public Accountant and practiced in the financial services division of Arthur Andersen & Co. Mr. Thornton received his B.S. degree in Accounting from Lehigh University.

Alan E. Feitell, Senior Vice President, Manager of Equity Trading. Mr. Feitell joined the company on May 1, 2003 as Co-Manager of OTC/Bulletin Trading. Prior to that he spent two years at National Securities as Vice President and Manager of Over-the-Counter Trading. Previously, he spent twenty years at Alfred Securities, of which he was a Co-Founder. Mr. Feitell earned his B.S. degree in Economics from the Wharton School, University of Pennsylvania.

Brian J. McCann, Vice President, Head of Institutional Sales. Mr. McCann joined the company in May of 2003 as an Institutional Sales Trader. Prior to joining the company, he spent five years at Knight Securities, L.P., in a similar capacity. Additionally, Mr. McCann has 13 years experience with Troster Singer, now Spear Leads & Kellogg, where he was a market maker in Nasdaq securities. Mr. McCann received his B.A. degree from the State University of New York at New Paltz and an M.B.A. from Adelphia University.

George Schneider, Head of Investment Banking. Mr. Schneider joined the company in March 2002 as Head of Investment Banking. Prior to that Mr. Schneider was a senior investment banker for Credit Research and Trading LLC (1997-2001) and before that Houlihan, Lokey, Howard and Zukin, a national investment banking firm. Additionally, Mr. Schneider served as a fixed-income portfolio manager for Prudential Insurance Company and General Reinsurance Corporation involving tax-exempt and taxable securities in public and private markets. Mr. Schneider received his undergraduate degree from the Wharton School, University of Pennsylvania, with majors in Finance, Economics, Organizational Management and Entrepreneurial Management.

10

Table of Contents

Alfred T. Duncan, Independent Director. Alfred T. Duncan joined the Board of Directors in January of 1997 and is currently a member of the Audit, Compensation and Nominating and Corporate Governance Committees of the Board of Directors. Mr. Duncan has been an independent management consultant since 1992, specializing in financial management for small growth firms. Prior to 1992, he held numerous senior positions with Commodore International, Ltd. including General Manager of Latin America and Eastern Europe (1990-1991) and General Manager of U. S. operations (1987-1990). He was President and Chief Executive Officer of Victor Technologies (1986-1987) and has held financial management positions with A. M. International, Abbott Laboratories, First National Bank of Chicago, and Ford Motor Company. He was Executive Vice President and Chief Financial Officer of On Site Sourcing Inc. (1998-2000) and Chief Financial Officer of the New Jersey Devils Franchise of the National Hockey League (1997-1998). He received an M.B.A. degree from Harvard University and a B.S.C.E. degree from Duke University.

Donald Shek, Independent Director. On June 1, 2004, the Board of Directors appointed Donald Shek to the Board, on September 9, 2004 he was appointed to the Audit Committee of the Board and on June 20, 2005 he was appointed to the Nominating and Corporate Governance Committee of the Board of Directors. Mr. Shek is an independent consultant and CPA who has been involved in the securities industry since 1971, including as a broker with Financial West Group (1993-2002). Mr. Shek has been a registered Financial and Operations Principal and General Securities Principal with both public and private companies. Mr. Shek currently serves on the Board of Directors of National Auto Credit, Inc. (since 2003), The Volunteers of America of Colorado (since 1989) and the St. Francis Center (since 2000). Mr. Shek is a graduate of New York University and began his career at Arthur Andersen & Co. in the Financial Services Group.

Henry Y. L. Toh, Independent Director. On March 22, 2004, the Board of Directors appointed Henry Y. L. Toh to the Board of Directors and to the Audit and Compensation Committees of the Board of Directors. On June 20, 2005, Mr. Toh was appointed to Nominating and Corporate Governance Committee of the Board of Directors. Mr. Toh has served as an officer and director of several public companies, including (i) Acceris Communications Inc., a publicly held voice over IP company, and Four M International, Inc., a privately held offshore investment company, since 1992, (ii) Teletouch Communications Inc., a telecommunications company,