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August 20, 2014
16:47 EDTJMPJMP Group approves restructuring transaction to become public partnership
JMP Group announced that its board of directors has approved a transaction whereby JMP Group would enter into a series of related and concurrent internal transactions to convert its corporate form into a limited liability company that would be taxed as a partnership, and not as a corporation, for U.S. federal income tax purposes. The proposed restructuring transaction would allow JMP to operate in a more tax efficient manner compared to that afforded by its current structure. If the restructuring is approved by JMPís stockholders, it is expected that JMP would be able to execute its current business strategy in a manner that would minimize entity-level taxation of its net investment income. As part of the transaction, JMP has entered into an agreement and plan of merger with a newly formed, wholly owned, limited liability company subsidiary, JMP Group LLC, and a newly formed Delaware corporation and indirect wholly owned subsidiary, JMP Merger Corp. Subject to the approval of JMPís stockholders and the decision of its board of directors to complete the transaction, JMP would be merged with and into JMP Merger Corp., with JMP continuing as the surviving entity and as a direct, wholly owned subsidiary of JMP Group LLC. The Reorganization Transaction, if completed, would result in each share of currently issued and outstanding JMP stock being exchanged for a limited liability company interest in JMP Group LLC. On August 20, JMP filed a preliminary proxy statement/prospectus with the U.S. SEC on Form S-4 for the Reorganization Transaction. Following the Reorganization Transaction, JMP Group LLC would hold, through its subsidiaries, including JMP, the assets currently held by JMP. The Reorganization Transaction would have the effect of converting JMPís top-level form of organization from a corporation to a limited liability company, with such conversion treated as a tax-deferred contribution of JMP common stock to JMP Group LLC for federal and state income tax purposes. JMP expects that the Reorganization Transaction, if approved by its stockholders, will be completed by January 1, 2015, provided, however, that JMPís board of directors may elect to complete the transaction prior to January 1, 2015, or defer completion before or after the stockholder approval or may abandon the Reorganization Transaction at any time.
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