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): October 15, 2008
PMC COMMERCIAL TRUST
(Exact name of registrant as specified in its charter)
| TEXAS | 1-13610 | 75-6446078 | ||
| (State or other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 17950 Preston Road, Suite 600, Dallas, TX |
75252 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code: (972) 349-3200
| None |
| (Former name or former address if changed since last report.) |
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:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
On October 15, 2008, Andrew S. Rosemore, Executive Vice President and Chief Operating Officer of PMC Commercial Trust (the “Company”) resigned his positions as an officer and employee of the Company. On October 15, 2008, the Company entered into a Separation Agreement and General Release (“Separation Agreement”) with Dr. Rosemore. A copy of the Separation Agreement is filed as Exhibit 10.1 to this Current Report. The description of the Separation Agreement is qualified in its entirety by reference to the full text of Exhibit 10.1.
The Separation Agreement provides that effective as of October 15, 2008, Dr. Rosemore’s employment as an officer and employee of the Company and all of its subsidiaries, affiliates and related entities shall be separated. Pursuant to the Separation Agreement, the Company has agreed to pay Dr. Rosemore one lump sum payment in the gross amount of $1,388,000 on the date that is six months and one day after the effective date of the Separation Agreement, subject to applicable taxes and lawful deductions. The Company has further agreed to continue, to the same extent provided to Dr. Rosemore upon the termination of his employment, health and dental insurance coverage for Dr. Rosemore and his dependents for a period ending on the earlier of (1) the termination of his Consulting Agreement (as hereinafter defined) as a result of his breach of the confidentiality provisions therein; (2) his 66th birthday; (3) the date he obtains health and dental insurance coverage through subsequent employment or work; or (4) the date the Company elects to no longer provide health and/or dental coverage for its executives or reimbursement for such coverage (in any form, including a stipend or compensatory salary increase). Dr. Rosemore’s stock options and restricted shares, if any, shall be governed by the terms and conditions of the applicable plans governing such stock options and restricted shares.
Pursuant to the terms of the Separation Agreement each of Dr. Rosemore and the Company waived any right to sue the other and released the other from any and all claims, whether known or unknown, which in any way arise out of Dr. Rosemore’s employment with the Company, the separation of that employment, any agreements between the Company and Dr. Rosemore or based on any other set of facts or events occurring prior to the effective date of the Separation Agreement.
The Separation Agreement will become effective upon the eighth day after Dr. Rosemore signs the Separation Agreement unless he cancels it prior thereto. In the event that Dr. Rosemore elects to cancel the Separation Agreement, the Company will have no obligation to pay him or provide him with the compensation or benefits provided thereby; provided, any such revocation shall not constitute a waiver of any provision of his Executive Employment Contract (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007).
Item 2.05 Costs Associated with Exit or Disposal Activities.
On October 15, 2008, the Company reduced its workforce by approximately 25%. The decision to reduce employment is part of the Company’s cost reduction initiatives. The Company estimates that this reduction in work force will result in one-time charges of approximately $1.8 million (including the one lump sum payment to Dr. Rosemore of $1,388,000 described in Item 1.01 above) of which approximately $1.6 million will be recorded in the third quarter of 2008 and approximately $0.2 million to be recorded in the fourth quarter of 2008.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On October 15, 2008, the Company announced that Roy H. Greenberg resigned from the Company’s Board of Trust Managers effective as of October 15, 2008. Mr. Greenberg does not have any disputes with the Company.
On October 15, 2008, the Company announced that Andrew S. Rosemore, Executive Vice President, Chief Operating Officer and a Trust Manager of the Company resigned all positions held with the Company effective October 15, 2008. Dr. Rosemore does not have any disputes with the Company. To facilitate a smooth transition of his responsibilities, Dr. Rosemore will continue to serve as a consultant for the Company pursuant to a consulting agreement (“Consulting Agreement”), which is attached hereto as Exhibit 99.1 and is incorporated herein by reference. The description of the Consulting Agreement is qualified in its entirety by reference to the full text of Exhibit 99.1.
The Consulting Agreement has an initial term of one year and thereafter is automatically renewed month-to-month unless either party provides notice of non-renewal at least thirty days prior to the end of the applicable renewal term. During the term of the Consulting Agreement, Dr. Rosemore will assist the Company with such duties as are reasonably assigned to him, including, without limitation, loan origination and underwriting support, site visits and loan committee participation, as well as other transition services and input as may be requested by the President, any Executive Vice President or the Board of Trust Managers of the Company or their designee. Dr. Rosemore will provide approximately 500 hours of consulting services to the Company per year.
For his services rendered to the Company, Dr. Rosemore will be paid $4,166.67 per month with the first payment being pro rated and made on October 31, 2008.
Effective October 15, 2008, Jan F. Salit, 58, Executive Vice President, Chief Investment Officer and Assistant Secretary of the Company, has been appointed as the Company’s Chief Operating Officer. Mr. Salit has been Executive Vice President of the Company since June 1993, and Chief Investment Officer and Assistant Secretary since January 1994. Mr. Salit is currently a party to an Executive Employment Contract with the Company (filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008).
Effective October 15, 2008, Barry N. Berlin, 48, Chief Financial Officer of the Company, has been appointed Executive Vice President. Mr. Berlin has been Chief Financial Officer of the Company since June 1993. Mr. Berlin is currently a party to an Executive Employment Contract with the Company (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008).
Item 7.01 Regulation FD Disclosure.
On October 15, 2008, the Company issued a press release announcing its reduction in work force, the resignation of Andrew S. Rosemore and the adoption of a share repurchase program. The press release is furnished as Exhibit 99.2 hereto.
The information disclosed under this Item 7.01, including Exhibit 99.2 hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01 Financial
Statements and Exhibits.
(d) Exhibits
| 10.1 | Separation Agreement and General Release dated October 15, 2008 between the Company and Andrew S. Rosemore | |
| 99.1 | Consulting Agreement dated October 15, 2008 between the Company and Andrew S. Rosemore | |
| 99.2 | Press Release dated October 15, 2008 |
SIGNATURE
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: October 20, 2008
| PMC COMMERCIAL TRUST | ||
| By: | /s/ Barry N. Berlin | |
| Barry N. Berlin, Chief Financial Officer and Executive Vice President |
||
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 10.1 | Separation Agreement and General Release dated October 15, 2008 between the Company and Andrew S. Rosemore | |
| 99.1 | Consulting Agreement dated October 15, 2008 between the Company and Andrew S. Rosemore | |
| 99.2 | Press Release dated October 15, 2008 |
Exhibit 10.1
SEPARATION AGREEMENT
AND
GENERAL RELEASE
AND
GENERAL RELEASE
TO: Andrew S. Rosemore
This Separation Agreement and General Release (the “Agreement”) is executed on the dates given
on the signature pages by and between PMC Commercial Trust, a Texas Real Estate Investment Trust,
(“PMC” or the “Company”) and Andrew S. Rosemore (“Executive,” “you” or “I”).
RECITALS
WHEREAS, Executive is currently employed by PMC as its Executive Vice President and
Chief Operating Officer; and
WHEREAS, PMC and Executive are parties to that certain Executive Employment Contract dated
June 25, 2007 (the “Employment Agreement”); and
WHEREAS, effective October 15, 2008, the parties agree that Executive’s employment as an
officer and employee of PMC and all of its subsidiaries, affiliates and related entities shall be
separated; and
WHEREAS, the parties agree to provide each other with a general release of claims as contained
herein.
NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
I. Separation of Employment
A. PMC and Executive hereby agree that Executive’s employment with PMC as an officer and
employee shall be separated as of October 15, 2008 (the “Separation Date”) and that neither shall
thereafter have any liabilities, rights, duties or obligations to the other party under or in
connection with Executive’s employment with the Company, except as provided in this Agreement, the
Consulting Agreement dated October 15, 2008 between Executive and PMC (the “Consulting Agreement”),
PMC’s 2005 Equity Incentive Plan and any agreements executed pursuant thereto.
B. PMC and Executive hereby waive any rights to prior notification of termination of
Executive’s employment, including any notice requirements required by the Employment Agreement.
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C. Executive understands and agrees that, effective on the Separation Date, his employment as
an officer and employee of PMC and all of its subsidiaries, affiliates and related entities shall
terminate. Executive shall resign his position on the Board of Trust Managers.
II. Special Compensation, Benefits and Consideration
In consideration for Executive’s release of claims, as well as his other promises contained
herein, PMC agrees to provide Executive with the following benefits:
| • | Six (6) months and one (1) day after the Effective Date of this Agreement (as defined in
Section IV(K) below), PMC agrees to pay to Executive or his estate, as appropriate, the
gross amount of $1,388,000, payable in one lump sum payment, subject to applicable taxes
and lawful deductions. The parties agree that the timing for the delay in commencing
payment of this amount is intended to satisfy the requirements of Section 409A(2)(B)(i) of
the Internal Revenue Code of 1986, as amended (the “Code”). |
| • | PMC agrees to provide certain medical and reimbursement payments to Executive as
provided below. PMC’s obligation to provide such benefits shall cease upon the
earlier of: (i) Executive’s breach of his obligations under of Section 6 of the
Consulting Agreement; (ii) Executive’s 66th birthday; (iii) the date Executive obtains
health and dental insurance coverage through subsequent employment or work; or (iv) the
date the Company elects to no longer provide health and/or dental coverage for its
executives or reimbursement for such coverage (in any form, including a stipend or
compensatory salary increase) (each the “Benefit Termination Date”). PMC shall have no
obligation to provide any compensation to Executive with regard to benefits terminated
under this provision on the Benefit Termination Date. |
| A. | Medical Plan Coverage. Beginning November 1, 2008, PMC shall use
commercially reasonable efforts to cause PMC’s group health and dental plan (the
“Medical Plan”) to permit Executive to continue to participate in the Medical Plan
during any period he is a Consultant with PMC by paying the full cost of coverage under
the plan, provided, however, that this requirement shall not apply if such
participation would be classified as the provision of “nonqualified deferred
compensation” under Section 409A of the Code. Effective on the date Executive ceases
to be eligible to participate in the Medical Plan as a participant, Executive shall, to
the extent permitted under the Consolidated Omnibus Budget Reconciliation Act of 1986
and, to the extent applicable, Texas law, elect to receive continuation coverage under
the Medical Plan’s terms for Executive and his dependents (the “Continuation
Benefits”). |
| B. | Initial Medical Reimbursement. During the period between November 1,
2008 and April 30, 2010, PMC shall reimburse Executive for any medical premium expenses
he incurs to purchase group health and dental coverage under the Medical Plan,
including any Continuation Benefits, provided, however, that PMC may, with the consent
of its insurance company, elect to pay such amount directly to the insurance company. |
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| C. | Additional Medical Reimbursement. During (i) the period between May 1,
2010 and December 31, 2010, (ii) the period between January 1, 2011 and December 31,
2011, and (iii) the period between January 1, 2012 and November 30, 2012, PMC shall pay
to Executive a monthly payment in an amount equal to 150% of the subsidy provided by
PMC to its executives who receive group health and dental coverage under the Medical
Plan (determined as of January 1st of each applicable calendar year).
Payments under this provision shall be subject to the following limitations: (i) the
payment amount for any calendar year will not be increased or decreased to reflect the
amount actually reimbursed in a prior or subsequent calendar year, and (ii) all
payments under this paragraph will be paid to Executive on the first day of the
applicable calendar month. |
Executive understands and agrees that the compensation and benefits recited in this Section II
constitute the full compensation and benefits from PMC to Executive, and that other than any
compensation that he is entitled to be paid pursuant to the Consulting Agreement, no other payments
or benefits are due to Executive for any reason or pursuant to any agreement, including the
Employment Agreement. Executive’s stock options and restricted shares, if any, shall be governed
by the terms and conditions of the applicable plans governing such stock options and restricted
shares.
III. Mutual General Release
A. In return for the consideration referenced in this Agreement, I, Andrew S. Rosemore, agree to
the following:
I agree, on behalf of myself and all of my heirs or personal representatives, to release PMC,
its parent companies, subsidiaries, all affiliates of each, predecessors and successors, and all of
its present or former officers, directors, members, managers, representatives, employees, agents,
attorneys, employee benefit programs, and the trustees, administrators, fiduciaries and insurers of
such programs (collectively the “Company Released Parties”), from any and all claims for relief of
any kind, whether known to me or unknown, which in any way arise out of or relate to my employment
at PMC or any of the Company Released Parties, the separation of my employment at PMC or any of the
Company Released Parties, any agreements between PMC or any of the Company Released Parties and me,
including without limitation the Employment Agreement, or concerning any set of facts or events
occurring at any time up to the Effective Date of this Agreement, including, but not limited to,
any and all claims of wrongful discharge, discrimination or retaliation of any kind, and any
contractual, tort or other common law claims. This release and waiver includes all such claims,
whether for breach of contract, quasi-contract, implied contract, quantum meruit, unjust
enrichment, compensation, deferred compensation, equity interest, any tort claims, any and all
claims under any applicable federal laws, including, but not limited to, the Age Discrimination in
Employment Act, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights
Act of 1991, 42 U.S.C. § 1981, the Americans with Disabilities Act, as amended, the Equal Pay Act,
as amended, the Worker Adjustment and Retraining Notification Act, the Employee Retirement Income
Security Act of 1974, as amended, the Family and Medical Leave Act, as amended, the Fair Labor
Standards Act, as amended, the Sarbanes-Oxley Act, or under any applicable state or local laws or ordinances or any
other legal restrictions on PMC’s rights, including without limitation, the Texas Commission on
Human Rights Act and Section 451 of the Texas Labor Code. However, I recognize and understand that
this release does not prohibit me from filing an administrative charge with any governmental
agency. I further recognize and understand that even if I file a charge with an administrative
agency or one is filed on my behalf, I will be entitled to no damages relating to any event which
occurred prior to the Effective Date of this Agreement.
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B. I further agree not to file a suit of any kind against PMC or any of the Company Released
Parties relating to my employment at PMC or any of the Company Released Parties, the separation
thereof, any agreements between PMC or any of the Company Released Parties and me, including
without limitation the Employment Agreement, or any set of facts or events occurring up to the
Effective Date of this Agreement, or to participate voluntarily in any claim brought by any other
party against PMC or any of the Company Released Parties. Even if a court rules that I may file a
lawsuit against PMC or any of the Company Released Parties arising from my employment at PMC or any
of the Company Released Parties, the separation thereof, any agreements between PMC or any of the
Company Released Parties and me, including without limitation the Employment Agreement, or based on
any other set of facts or events occurring prior to the Effective Date of this Agreement, I agree
not to accept any money damages or any other relief in connection with any such lawsuit. I
understand that this Agreement and General Release effectively waives any right I might have to sue
PMC or any of the Company Released Parties for any claim arising out of my employment at PMC or any
of the Company Released Parties, the separation of my employment, any agreements between PMC or the
Company Released Parties and me, including without limitation the Employment Agreement, or based on
any other set of facts or events occurring prior to the Effective Date of this Agreement. In the
event that PMC fails to make the lump sum payment within five (5) days of the date due as required
by Section II of this Agreement, the release contained in Section III (A) and (B) shall be void and
have no force or effect.
Notwithstanding the foregoing, this release does not waive my rights to (i) enforce this
Agreement, (ii) COBRA benefits under the Company’s standard benefit programs applicable to me,
(iii) my vested 401(k) or pension monies, (iv) my final paycheck, or (v) reimbursement of any
outstanding business expense amounts (in accordance with PMC’s existing reimbursement policies).
C. In return for the Executive’s covenants and agreements contained in this Agreement, PMC
agrees to the following:
Except as set forth in the last paragraph of this Section, PMC agrees, on behalf of itself and
all of its parent companies, subsidiaries, affiliates, predecessors, successors, shareholders and
investors, and all of their present or former officers, directors, agents, managers, employees,
attorneys, and shareholders to release Executive and all of his spouse, heirs, assigns and personal
representatives (collectively the “Executive Released Parties”), from any and all claims for relief
of any kind, whether known to it or unknown, which in any way arise out of or relate to Executive’s
employment at PMC or any of the Company Released Parties, the separation of Executive’s employment
at PMC or any of the Company Released Parties, any agreements between PMC or any of the Company Released Parties and Executive, including without limitation the
Employment Agreement, or concerning any set of facts or events occurring at any time up to the
Effective Date of this Agreement,
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Except as set forth in the last paragraph of this Section, PMC further agrees not to file a
suit of any kind against Executive or any of the Executive Released Parties relating to Executive’s
employment at PMC or any of the Company Released Parties, the separation thereof, any agreements
between PMC or any of the Company Released Parties and Executive, including without limitation the
Employment Agreement, or any set of facts or events occurring up to the Effective Date of this
Agreement, or to participate voluntarily in any claim brought by any other party against Executive
or any of the Executive Released Parties. Even if a court rules that PMC may file a lawsuit
against Executive or any of the Executive Released Parties arising from Executive’s employment at
PMC or any of the Executive Released Parties, the separation thereof, any agreements between PMC or
any of the Company Released Parties and Executive, including without limitation the Employment
Agreement, or based on any other set of facts or events occurring prior to the Effective Date of
this Agreement, PMC agrees not to accept any money damages or any other relief in connection with
any such lawsuit. PMC understands that this Agreement and General Release effectively waives any
right it might have to sue Executive or any of the Executive Released Parties for any claim arising
out of Executive’s employment at PMC or any of the Company Released Parties, the separation of that
employment, any agreements between PMC or the Company Released Parties and Executive, including
without limitation the Employment Agreement, or based on any other set of facts or events occurring
prior to the Effective Date of this Agreement.
Notwithstanding the generality of the foregoing, nothing contained herein shall release
Executive or any of the Executive Released Parties from any claim relating to (i) a breach by
Executive of any provision of any agreement that pursuant to this Agreement survives the execution
hereof, (ii) Executive’s obligations set forth herein, or (iii) Executive’s fraud, willful
misconduct or gross negligence.
IV. Restrictive Covenants and Miscellaneous Provisions
A. While Executive understands that he has had such an obligation since he began his
employment with PMC or any of the Company Released Parties, he confirms that he shall not disclose
any of the trade secrets or other confidential or proprietary information of PMC or any of the
Company Released Parties and shall not make use of such trade secrets or confidential or
proprietary information in any fashion at any time, including in any future employment, task, work
or business. Confidential or proprietary information shall not include information that is or
becomes generally available to the public other than as a result of disclosure by the Executive or
his representatives that Executive has no reason to believe was disclosed without authorization.
Executive further agrees to comply with his obligations under the Employment Agreement and/or the
common law that survives the termination of Executive’s employment and/or the Employment Agreement.
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B. Executive understands and agrees that PMC shall have the right to and will terminate the
payments for the continued insurance benefits provided in Section II above, and/or sue him for breach of this Agreement if he violates the provisions of Section IV, or otherwise
fails to comply with this Agreement. Executive further acknowledges that but for his agreements to
comply with his obligations described in this Section IV and this Agreement, PMC would not provide
him with the compensation, benefits and other consideration set forth in Section II and elsewhere
in the Agreement.
C. Executive warrants that he has returned to PMC all company property in his possession,
including, but not limited to, originals and all copies of non-Board related company files, work
product, confidential information, proprietary information, trade secrets or documents containing
confidential, proprietary, and/or trade secret information, computer equipment, computer software,
cell phones, pagers, personal data devices, corporate credit cards, identification cards, manuals,
company documents and company keys. Executive further agrees to cooperate and work with the Chief
Financial Officer to ensure his compliance with this Section IV(C).
D. Executive understands that the short-term disability, long-term disability and life
insurance coverage provided by PMC, if any, will terminate on the Separation Date. Executive also
understands that PMC will not pay for any business-related or other charges incurred by him after
the Separation Date, unless such expenses are expressly approved in advance by the Chief Financial
Officer of PMC or provided for in the Consulting Agreement. Executive further understands that he
ceased to accrue vacation time as of the Separation Date.
E. Executive acknowledges and agrees that this Agreement does not constitute an admission of
any kind by PMC, but is simply an accommodation that offers certain extra benefits to which he
would not otherwise be entitled in return for his agreeing to and signing this document.
F. Executive agrees not to voluntarily make the terms and conditions or the circumstances
surrounding this Agreement known to anyone other than an attorney and/or tax consultant from whom
he receives counseling, or, if he is married, to his spouse, or except as otherwise required by
law. Executive acknowledges that any such person must agree not to further disclose the terms of
this Agreement.
G. PMC agrees not to make any statement that disparages the reputation of Executive or his
services. Executive agrees not to make any statement that disparages the reputation of PMC, its
executives, trust managers or employees, or its services. Executive agrees that any breach or
violation of this non-disparagement provision shall entitle PMC to terminate the paid insurance
benefits and/or sue him on this Agreement for the immediate recovery of any damages caused by such
breach.
H. The venue for the litigation of any dispute arising out of this Agreement shall be a court
of competent jurisdiction in Dallas County, Texas. If either party files a lawsuit in state court
arising out of this Agreement, the other party may remove the lawsuit to federal court to the
extent jurisdiction exists. This Agreement shall be governed by the laws of the State of Texas.
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I. All payments under this Agreement will be subject to taxes and lawful deductions, if any.
J. Executive acknowledges that in the course of his employment with the Company, he has gained
knowledge and experience and/or was a witness to events and circumstances that may arise in the
Company’s defense or prosecution of subsequent proceedings. Executive agrees to cooperate fully
with the Company in the investigation, defense or prosecution of such proceedings, including
without limitation providing truthful testimony and promptly meeting with the Company’s counsel at
reasonable times upon their request. Executive further agrees to appear upon the Company’s
reasonable request as a witness and/or consultant in defending or prosecuting claims of all kinds,
including but not limited to any litigation, administrative actions or arbitrations, at the
Company’s expense, which shall include payment of Executive’s reasonable attorneys’ fees incurred
as a result of such appearance. To the extent he is required to provide services pursuant to this
Section IV(J), PMC agrees to compensate Executive for his time incurred, unless such time is
incurred providing testimony in a deposition, hearing, trial or administrative action, either
through the applicable payment provisions contained in the Consulting Agreement or otherwise at a
reasonable rate consistent with the then current market.
K. Executive acknowledges and agrees that he is entering into this Agreement freely and
voluntarily. Executive has carefully read and understands all of the provisions of this Agreement.
Executive understands that this Agreement sets forth the entire agreement between him and the
Company and he represents that no other statements, promises, or commitments of any kind, written
or oral, have been made to him by the Company, or any of its agents, to cause him to accept it.
Executive acknowledges that he has been advised to consult legal counsel concerning this Agreement
prior to signing the Agreement, and that he has had sufficient opportunity to do so. Executive
acknowledges and understands that the information contained on Attachment A hereto is being
provided to him pursuant to the Older Workers’ Benefit Protection Act. Executive understands that
he may have up to forty-five (45) days from the date of his receipt of this Agreement to consider
this Agreement. Executive understands that if he signs this Agreement, he will then have seven (7)
days to cancel it if he so chooses. Executive may cancel this Agreement by delivering a written
notice of cancellation to the Chief Financial Officer, PMC Commercial Trust, 17950 Preston Road,
Suite #600, Dallas, Texas 75252. However, if Executive elects to cancel this Agreement, he
understands that he will not be entitled to any of the benefits, compensation, or other
consideration referenced in this Agreement; however, Executive’s cancellation of this agreement
shall not constitute a waiver of any provision of the Employment Agreement. Executive understands
and agrees that this Agreement is not effective or enforceable until the seven-day period expires
without revocation. Executive understands that this Agreement will not become effective until the
eighth day after he signs the Agreement without revocation (the “Effective Date”). Executive
understands and agrees that PMC will have no duty to pay him or provide him with the compensation
and benefits listed in Section II until the Effective Date of this Agreement.
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L. PMC agrees that any breach or violation of this Agreement or the Consulting Agreement by
Executive shall not give PMC the right to withhold payment of the lump sum payment pursuant to the
first bullet point of Section II of this Agreement.
M. To the extent that any party has incurred legal fees or expenses in connection with the
subject matter of this Agreement, each party shall bear the cost of his or its own legal fees and
expenses, except as provided herein. In the event that either party materially breaches any
provision of this Agreement, the prevailing party in any action to enforce this Agreement shall be
entitled to payment of all reasonable legal fees and expenses incurred in the prosecution or
defense of such an action, including costs of court.
[remainder of page left intentionally blank]
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I acknowledge acceptance of this Agreement by my signature below:
| /s/ Andrew S. Rosemore | 10/15/08 | |||
| Andrew S. Rosemore | Date | |||
Agreed to and accepted on behalf of PMC Commercial Trust:
| By: | /s/ Jan F. Salit | |
| | ||
| Name: | Jan F. Salit | |
| Title: | Executive Vice President | |
| Date: | 10/15/08 |
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Exhibit 99.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the “Agreement”) is entered into effective October 15, 2008,
between PMC Commercial Trust (the “Company”), and Andrew S. Rosemore (the “Consultant”).
It is hereby agreed between the Company and Consultant as follows:
| 1. | Consulting Period. This Agreement is effective on the date stated above and
shall continue in effect for a period of one (1) year (“Initial Term”); provided,
however, either party may terminate this Agreement for any reason at any time
(including during the Initial Term) upon sixty (60) day’s written notice. After the
expiration of the Initial Term, this Agreement shall be automatically renewed
month-to-month (the “Renewal Term”) unless either party provides notice of non-renewal
at least thirty (30) days prior to the end of the any applicable Renewal Term. The
Initial Term and any Renewal Term shall be referred to herein as the “Consulting
Period.” |
| 2. | Services. During the Consulting Period, Consultant shall be reasonably
available on call on an as needed basis to assist the Company with such duties as are
reasonably assigned by the Company, including, without limitation, loan origination and
underwriting support, site visits and loan committee participation, as well as such
other transition services and input as may be requested by the President, any Executive
Vice President or the Board of Trust Managers of the Company (the “Board”) or their
designee. Consultant shall provide approximately 500 hours of consulting services to
the Company per year. In the event Consultant provides significantly more than 500
hours of consulting services in any year, Consultant shall notify the Board so that the
Board, in its sole discretion, may determine whether an increase in compensation for
such services should be awarded. |
| 3. | Compensation. For his services rendered during the Consulting Period, the
Company agrees to pay Consultant equal monthly installments of $4,166.67, which
payments shall be made to Consultant on the last business day of each month during the
Consulting Period, with the first payment being pro rated and made on October 31, 2008.
The Company shall have the right to withhold any payment to Consultant, if in the
Board of Trust Managers’ reasonable discretion, it determines that Consultant has not
performed the quantity or quality of work contemplated by this Agreement or if
Consultant is in breach of the Separation Agreement and General Release executed by
Consultant and the Company on October 15, 2008. If the Company determines that
Consultant has not performed the quantity or quality of work contemplated by this
Agreement, the Company will only withhold payment until such time as, in its reasonable
discretion, it determines that Consultant has corrected the quality or quantity
shortfall. |
| 4. | Independent Contractor. Consultant is an independent contractor. This
Agreement shall not create the relationship of employer and employee, a partnership or
a joint venture between the parties. The Company shall not control or direct the
details and means by which Consultant performs his assignments. Consultant
acknowledges and agrees that he has no authority to enter into contracts on behalf of
the Company or to otherwise obligate the Company in any respect during the Consulting
Period, without the prior written approval of the President, any Executive Vice
President or the Board of the Company. |
| 5. | Non-Exclusive. This Agreement shall not limit Consultant’s right to provide
services for other businesses, provided that such businesses are not competitors of the
Company and, under no circumstances will Consultant use any Confidential Information
(as defined below) of the Company in any future employment, work, business or task. |
| 6. | Confidential Information. During the Consulting Period, the Company promises
to provide Confidential Information (as defined below) to Consultant and, during the
Consulting Period and at all times thereafter, Consultant shall maintain in strict
confidence and not disclose to third parties or use in any employment, task, work or
business (except on behalf of the Company) any proprietary or Confidential Information
regarding the Company and/or Consultant’s work with the Company, including without
limitation, trade secrets, information regarding the Company’s processes, clients,
client information, loan portfolio information, computer programs and/or records,
software programs, reports, intellectual property, acquisition, expansion, marketing,
financial and other business strategies, information and plans, compilations of data,
confidential information developed by consultants and contractors, employee
information, manuals, memoranda, projections and minutes (“Confidential Information”),
without the express written permission of the Board of the Company or its designee.
Consultant’s confidentiality obligation shall include, but not be limited to, any
Company information to which Consultant has had access, regardless of when he was given
access to such information, as well as any information designated as confidential by
the Company. Upon the termination of his assignment with the Company (for whatever
reason), Consultant shall immediately return to the Company all Confidential
Information and all copies thereof obtained by him, or his employees or agents.
Consultant acknowledges that the Company would not retain his services or provide him
with access to its Confidential Information without his covenants and promises
contained in this paragraph. The Company shall take reasonable steps to identify for
the benefit of Consultant any information of a competitively sensitive or proprietary
nature, including by using confidentiality notices in written material where
appropriate. Notwithstanding the foregoing restrictions, Consultant may disclose any
Confidential Information to the extent required by an order of any court or other
governmental authority, but in each case only after the Company has been so notified
and has had the opportunity, if possible, to obtain reasonable protection for such
information in connection with such disclosure. The Company shall
have the right, in addition to all other rights and remedies, to seek and obtain
injunctive relief for any violation of this Section 6. |
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| 7. | Return of Documents. Consultant agrees that upon the request of the Company or
the termination of this Agreement (for whatever reason), Consultant will leave with or
immediately return to the Company, without limitation, all Company property, work
product, Confidential Information, Work (as defined in Section 10) records, files,
memoranda, reports, customer lists, vendor lists, documents and other information, in
whatever form (including on computer disc), and any copies thereof, or if such items
are not on the premises of the Company, Consultant agrees to return such items
immediately upon the termination of the Agreement or, at any time upon the request of
the Company. Consultant acknowledges that all such items are and remain the property
of the Company. |
| 8. | Taxes. Consultant shall be responsible for and pay all costs of conducting his
business, including but not limited to, the expense and responsibility for any and all
applicable insurance, city, county, state and federal licenses, permits, taxes and
assessments of any and all regulatory agencies, boards or municipalities. Consultant
is responsible for payment of his self-employment taxes, including without limitation,
income taxes, unemployment taxes, workers’ compensation taxes, social security taxes
and business and occupation taxes, and shall indemnify and hold the Company harmless
from paying such taxes. The Company will issue a Form 1099 to Consultant for all
payments to him under this Agreement. |
| 9. | Expenses. The Company shall reimburse Consultant for all pre-approved travel,
lodging, meals and other reasonable expenses incurred by Consultant in providing
services to the Company under this Agreement. All such expenses must be approved by
the President, an Executive Vice President or Board of the Company. Consultant must
submit an expense reimbursement request form to the Company and all approved expenses
will be reimbursed in accordance with Company policy. Consultant shall provide, at his
own expense, an office, telephone, computer and additional office materials necessary
to perform the services required under this Agreement. |
| 10. | Acknowledgment of the Company’s Right In Work Product. Consultant will create,
develop and contribute for consideration certain ideas, plans, calculations, technical
specifications, works of authorship, inventions, information, data, formulas, models,
reports, processes, photographs, marks, designs, computer code, concepts and/or other
proprietary materials to Company related to the operation or promotion of the business
of the Company (collectively, the “Work”). |
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| (a) | All of the Work is, was and shall hereafter be, a commissioned
“work for hire” owned by the Company within the meaning of Title 17, Section
101 of the United States Code, as amended. If any portion of the Work is
determined not to be a “work for hire” or such doctrine is not effective,
Consultant hereby irrevocably assigns, conveys and otherwise transfers to
the Company, and its respective successors, licensees, and assigns, all
right, title and interest worldwide in and to such portion of the Work and
all proprietary rights therein, including, without limitation, all
copyrights, trademarks, design patents, trade secret rights, moral rights,
and all contract and licensing rights, and all claims and causes of action
with respect to any of the foregoing, whether now known or hereafter to
become known. In accordance with this assignment, the Company shall hold
all ownership to all rights, without limitation, in and to all of the Work
for its own use and for its legal representatives, assigns and successors,
and this assignment shall be binding on and extended to the heirs, assigns,
representatives and successors of Consultant. In the event Consultant has
any right or interest in the Work which cannot be assigned, Consultant
agrees to waive enforcement worldwide of any and all such rights or
interests against the Company and its respective successors, licensees and
assigns, and Consultant hereby exclusively and irrevocably licenses any and
all such rights and interests, worldwide, to the Company in perpetuity and
royalty-free, along with the unfettered right to sublicense. All such
rights are fully assignable by Company. Consultant hereby agrees that all
Work is created or developed for the sole use of the Company, and that
Consultant has no right to utilize in any manner whatsoever or market in any
manner whatsoever any such Work. |
| (b) | Consultant represents and warrants that: (i) the Work was
created solely by him, during the course of his assignment with the Company,
and/or independent contractors who have properly assigned all right, title and
interest in their work to Consultant for the sole benefit of the Company; (ii)
to the best knowledge of Consultant, no third-party has any right, title or
interest in the tangible forms of the Work or any intellectual property rights;
(iii) the Work and the intellectual property rights protecting it is free and
clear of all encumbrances, including, without limitation, security interests,
licenses, liens, charges or other restrictions; (iv) the Work is not in the
public domain; and (v) Consultant has full power and authority to make and
enter into this Agreement. Consultant agrees to save, defend, indemnify and
hold harmless the Company, its officers, directors, managers, agents and
employees for any claims, suits or proceedings alleging a breach of any of
these warranties. Consultant agrees that he will take all actions and execute
any and all documents as may be reasonably requested by the Company, at the
Company’s expense, from time to time to fully vest in the Company all rights,
title and interests worldwide in and to the Work. Upon request by the Company,
Consultant shall immediately deliver to the Company all tangible materials,
drawings, computer software, data, audio or video recordings or any other
information of any kind whatsoever evidencing the creation or development of
all or any portion of the Work, or derived therefrom. |
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| (c) | Consultant, on behalf of himself and his affiliates, agents,
employees, trustees, transferees and assigns, does hereby fully release and
discharge the Company, its agents, attorneys, officers, directors, managers,
predecessors, successors, affiliates, subsidiaries, trustees, transferees and
assigns, of and from any claims or causes of action, known or unknown, choate
or inchoate, whether arising in whole or in part prior to or after the date of
this Agreement, which Consultant has, may have, or may have ever had relating
to this Agreement or the Work, including any claims or causes of action for
copyright, patent, trademark, trade dress, service mark or other intellectual
property infringement. |
11. Miscellaneous.
| 11.1 | The failure of either party to this Agreement to enforce at any
time any of its provisions or terms shall not be construed to be a waiver of
such provision or term, nor of the right of either party to later enforce such
term or provision. |
| 11.2 | This Agreement shall be governed by the laws of the State of
Texas. Venue for enforcement of this Agreement shall be proper in any court of
competent jurisdiction in Dallas County, Texas. If either party files a
lawsuit in state court arising out of this Agreement, the other party may
remove the lawsuit to federal court to the extent jurisdiction exists. |
| 11.3 | If any provision of this Agreement is held to be unenforceable,
the remaining provisions will nevertheless continue to be valid and
enforceable. |
| 11.4 | Each party’s obligations hereunder are in addition to, and not
exclusive of, any and all of its or his other obligations and duties to the
other party, whether express, implied, in fact or in law. |
| 11.5 | This Agreement represents and contains the entire understanding
between the parties in connection with their consulting relationship. The
parties expressly acknowledge that there are no oral or written collateral
agreements, understandings or representations. The parties acknowledge that
they have not relied upon any representation or statement not set forth in this
Agreement made by the other party or that party’s agent. However, nothing
herein shall be construed as superceding or otherwise affecting the parties’
obligations and covenants under the Separation Agreement and General Release
with the Company, dated October 15, 2008. |
| 11.6 | This Agreement may be signed in multiple counterparts, which
shall be construed together as one instrument. |
| 11.7 | No party may assign this Agreement or the rights or obligations
hereunder without the written consent of the other party. |
| 11.8 | Sections 6 and 10 of this Agreement shall survive any
termination of this Agreement, as shall any other provision intended to survive
such termination . |
| 11.9 | This Agreement may only be modified by a written agreement
signed by both parties. Only the Board of the Company may sign a modification
agreement on behalf of the Company. |
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IN WITNESS WHEREOF, the parties have signed this Agreement.
| COMPANY | CONSULTANT: | |||||||
By:
|
/s/ Jan F. Salit | By: | /s/ Andrew S. Rosemore | |||||
Its:
|
Executive Vice President
|
|||||||
Dated: October 15, 2008
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Exhibit 99.2
FOR IMMEDIATE PRESS RELEASE
FOR:
|
PMC COMMERCIAL TRUST | CONTACT: | Investor Relations | |||
| 17950 Preston Road, Suite 600 | 972-349-3235 | |||||
| Dallas, TX 75252 | www.pmctrust.com |
PMC COMMERCIAL TRUST ANNOUNCES
COST REDUCTION INITIATIVES AND
SHARE REPURCHASE PROGRAM
COST REDUCTION INITIATIVES AND
SHARE REPURCHASE PROGRAM
PMC Commercial Trust
NYSE ALTERNEXT US (Symbol: “PCC”)
NYSE ALTERNEXT US (Symbol: “PCC”)
| Dallas, Texas | October 15, 2008 |
PMC Commercial Trust’s (“PMC Commercial” or the “Company”) Board of Trust Managers (the “Board”)
announced that it is undertaking a number of cost reduction initiatives. These initiatives include
streamlining the Company’s sales, credit and servicing, as well as outsourcing some functions.
These initiatives are expected to result in one-time severance related charges of approximately
$1.8 million to be recorded in the third quarter (approximately $1.6 million) and fourth quarter
(approximately $0.2 million) and the elimination of approximately 25% of the Company’s workforce.
Lance B. Rosemore, Chairman of the Board and Chief Executive Officer, stated “These types of
actions are never easy and result in difficult situations for individuals. However, we believe
these steps are necessary to be a stronger company in this difficult environment. Despite recent
Federal market intervention, a general lack of liquidity remains in the marketplace and there is no
certainty as to when liquidity will return. We have been profitable each quarter since our
inception and are confident that these actions will strengthen our profitability by reducing
operating costs and better positioning the Company to take advantage of market conditions as and
when they stabilize. Unlike many of our competitors, we did not use excessive leverage or risky
lending practices to ramp up our assets under management. As a result, we only have $24.0 million
in debt outstanding under our $45.0 million revolving credit facility, which matures December 31,
2009. We also have a conservative outstanding debt-to-equity ratio below 0.5 to 1.0. We have been,
and for the near term will be, focusing exclusively on SBA 7(a) lending. Our actions were
motivated by our desire to align more closely our assets and management resources with our ongoing
strategic direction. Our actions have resulted in an increase in both SBA 7(a) commitments and
fundings.”
The Company also announced that Andrew S. Rosemore, Executive Vice President, Chief Operating
Officer and a Trust Manager of the Company, has resigned from his positions with the Company
effective October 15. He will continue in a consulting role to ensure a smooth transition. Moving
forward, Jan F. Salit, the Company’s Executive Vice President, Chief Investment Officer and
Assistant Secretary has been appointed as the Company’s Chief Operating Officer.
PMC Commercial’s Board has also authorized up to $10.0 million for the repurchase of the Company’s
outstanding common shares of beneficial interest over the next two years. The Company may purchase
the shares from time to time in the open market or pursuant to negotiated transactions subject to
applicable law.
Jan F. Salit, Executive Vice President and Chief Operating Officer, stated “We believe that the
share repurchase program represents an attractive and appropriate investment and use of our working
capital, which will enhance shareholder value. The programs that are being implemented should
provide stability to our future earnings. As a result, our Board feels confident that the current
$0.225 per share quarterly dividend will be maintained for the next year.”
Certain matters discussed in this press release are “forward-looking statements” intended to
qualify for the safe harbors from liability established by the Private Securities Litigation Reform
Act of 1995. These forward-looking statements can generally be identified as such because the
context of the statement will include words such as the Company “expects,” “anticipates,” “will” or
words of similar import. Similarly, statements that described the Company’s future plans,
objectives or goals are also forward-looking statements. Such forward-looking statements can be
subject to certain risks and uncertainties, including the financial performance of the Company,
real estate conditions and market valuation of its shares, which could cause actual results to
differ materially from those currently anticipated. Although the Company believes the expectations
reflected in any forward-looking statements are based on reasonable assumptions, the Company can
give no assurance that its expectations will be attained. Shareholders, potential investors and
other readers are urged to consider these factors carefully in evaluating the forward-looking
statements. The forward-looking statements made herein are only made as of the date of this press
release and the Company undertakes no obligation to publicly update such forward-looking statements
to reflect subsequent events or circumstances.