Document:

exv10w1

 

Exhibit 10.1

PMC COMMERCIAL TRUST

2005 EQUITY INCENTIVE PLAN

			
	SECTION 1	 	GENERAL PURPOSE OF THE PLAN; DEFINITIONS

The name of the plan is the PMC Commercial Trust 2005 Equity Incentive Plan (the “Plan”). The
purpose of the Plan is to encourage and enable the officers, employees and Independent Trust
Managers of PMC Commercial Trust (the “Company”) upon whose judgment, initiative and efforts the
Company largely depends for the successful conduct of its business to acquire a proprietary
interest in the Company. It is anticipated that providing such persons with a direct stake in the
Company’s welfare will assure a closer identification of their interests with those of the Company,
thereby stimulating their efforts on the Company’s behalf and strengthening their desire to remain
with the Company.

The following terms shall be defined as set forth below:

“Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

“Administrator” is defined in Section 2(a).

“Award” or “Awards”, except where referring to a particular category of grant under the Plan, shall
include Incentive Share Options, Non-Qualified Share Options and Restricted Share Awards.

“Board” means the Board of Trust Managers of the Company.

“Change of Control” is defined in Section 16.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related
rules, regulations and interpretations.

“Committee” means the Committee of the Board referred to in Section 2.

“Effective Date” means the date on which the Plan is approved by shareholders as set forth in
Section 13.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder.

“Fair Market Value” on any given date means the last reported sale price at which the Shares are
traded on such date, or, if no Shares are traded on such date, the most recent date on which the
Shares were traded, as reported on the American Stock Exchange or, if applicable, any other
national stock exchange on which the Shares are traded.

“Incentive Share Option” means any Share Option designated and qualified as an “incentive stock
option” as defined in Section 422 of the Code.

“Independent Trust Manager” means a member of the Board who is not also an employee of the Company.

“Non-Qualified Share Option” means any Share Option that is not an Incentive Share Option.

“Option” or “Share Option” means any option to purchase Shares granted pursuant to Section 5.

“Restricted Share Award” means Awards granted pursuant to Section 6.

“Shares” mean the Common Shares of Beneficial Interest, par value $0.01 per share, of the Company.

			
	SECTION 2	 	ADMINISTRATION OF PLAN: ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE
AWARDS

(a) Committee. The Plan shall be administered by the Compensation Committee of the Board
(the “Administrator”).

(b) Powers of Administrator. The Administrator shall have the power and authority to grant
Awards consistent with the terms of the Plan, including the power and authority:

(i) to select the individuals to whom Awards may from time to time be granted;

1

 

(ii) to determine the time or times of grant, and the extent, if any, of the Awards, and any
combination thereof, granted to one or more grantees;

(iii) to determine the number of Shares to be covered by any Award;

(iv) to determine and modify from time to time the terms and conditions, including restrictions,
not inconsistent with the terms of the Plan, of any Award, which terms and conditions may differ
among individual Awards and grantees, and to approve the form of written instruments evidencing the
Awards;

(v) to accelerate at any time the exercisability or vesting of all or any portion of any Award;

(vi) subject to the provisions of Section 5(a)(ii), to extend at any time the period in which Share
Options may be exercised;

(vii) to determine at any time whether, to what extent, and under what circumstances distribution
or the receipt of Shares and other amounts payable with respect to an Award shall be deferred
either automatically or at the election of the grantee and whether and to what extent the Company
shall pay or credit amounts constituting interest (at rates determined by the Administrator) or
dividends or deemed dividends on such deferrals; and

(viii) at any time to adopt, alter and repeal such rules, guidelines and practices for
administration of the Plan and for its own acts and proceedings as it shall deem advisable; to
interpret the terms and provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the administration of the Plan; to
decide all disputes arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.

All decisions and interpretations of the Administrator shall be binding on all persons, including
the Company and Plan grantees.

(c) Delegation of Authority to Grant Awards. The Administrator, in its discretion, may
delegate to the Chief Executive Officer of the Company all or part of the Administrator’s authority
and duties with respect to the granting of Awards to individuals who are not subject to the
reporting and other provisions of Section 16 of the Exchange Act or “covered employees” within the
meaning of Section 162(m) of the Code. Any such delegation by the Administrator shall include a
limitation as to the amount of Awards that may be granted during the period of the delegation and
shall contain guidelines as to the determination of the exercise price of any Share Option, the
conversion ratio or price of other Awards and the vesting criteria. The Administrator may revoke or
amend the terms of a delegation at any time but such action shall not invalidate any prior actions
of the Administrator’s delegate or delegates that were consistent with the terms of the Plan.

(d) Indemnification. Neither the Board nor the Committee, nor any member of either or any
delegatee thereof, shall be liable for any act, omission, interpretation, construction or
determination made in good faith in connection with the Plan, and the members of the Board and the
Committee (and any delegatee thereof) shall be entitled in all cases to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent
permitted by law and/or under any trust managers’ and officers’ liability insurance coverage which
may be in effect from time to time.

			
	SECTION 3	 	SHARES ISSUABLE UNDER THE PLAN MERGERS; SUBSTITUTION

(a) Shares Issuable. The maximum number of Shares reserved and available for issuance under
the Plan shall be 500,000 Shares, subject to adjustment as provided in Section 3(b). For purposes
of this limitation, the Shares underlying any Awards which are forfeited, canceled, held back upon
exercise of an Option or settlement of an Award to cover the exercise price or tax withholding,
reacquired by the Company prior to vesting, satisfied without the issuance of Shares or otherwise
terminated (other than by exercise) shall be added back to the Shares available for issuance under
the Plan. Subject to such overall limitation, Shares may be issued up to such maximum number
pursuant to any type or types of Award; provided, however, that Share Options with respect to no
more than 20,000 Shares may be granted to anyone individual grantee during any calendar year
period. The Shares available for issuance under the Plan may be authorized but unissued Shares or
Shares reacquired by the Company.

(b) Changes in Shares. Subject to Section 3(c) hereof, if, as a result of any
reorganization, recapitalization, reclassification, share dividend, share split, reverse share
split or other similar change in the Shares, the outstanding Shares are increased or decreased or
are exchanged for a different number or kind of shares or other securities of the Company, or
additional shares or different shares or other securities of the Company or other non-cash assets
are distributed with respect to such Shares or other securities, or, if, as a result of any merger
or consolidation, sale of all or substantially all of the assets of the Company, the outstanding
Shares are converted into or exchanged for a different number or kind of securities of the Company
or any successor entity (or a parent or subsidiary thereof), the Administrator shall make an
appropriate or proportionate adjustment in (i) the maximum number of Shares reserved for issuance
under the Plan, (ii) the number of Share Options that can be granted to anyone individual grantee,
(iii) the number and kind of Shares or other securities subject to any then outstanding Awards
under the Plan, (iv) the repurchase price, if any, per share subject to each outstanding Restricted
Share Award, and (v) the price for each Share subject to any then outstanding Share Options under
the Plan, without changing the aggregate exercise price (i.e., the exercise price multiplied by the
number of Share Options) as to which such Share

2

 

Options remain exercisable. The adjustment by the Administrator shall be final, binding and
conclusive. No fractional Shares shall be issued under the Plan resulting from any such adjustment,
but the Administrator in its discretion may make a cash payment in lieu of fractional Shares.

The Administrator may also adjust the number of Shares subject to outstanding Awards and the
exercise price and the terms of outstanding Awards to take into consideration material changes in
accounting practices or principles, extraordinary dividends, acquisitions or dispositions of Shares
or property or any other event if it is determined by the Administrator that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no such adjustment
shall be made in the case of an Incentive Share Option, without the consent of the grantee, if it
would constitute a modification, extension or renewal of the Option within the meaning of Section
424(h) of the Code.

(c) Mergers and Other Transactions. In the case of and subject to the consummation of (i)
the dissolution or liquidation of the Company, (ii) the sale of all or substantially all of the
assets of the Company on a consolidated basis to an unrelated person or entity, (iii) a merger,
reorganization or consolidation in which the outstanding Shares are converted into or exchanged for
a different kind of securities of the successor entity and the holders of the Company’s outstanding
voting power immediately prior to such transaction do not own a majority of the outstanding voting
power of the successor entity immediately upon completion of such transaction, or (iv) the sale of
all of the Shares to an unrelated person or entity (in each case, a “Sale Event”), all Options that
are not exercisable immediately prior to the effective time of the Sale Event shall become fully
exercisable as of the effective time of the Sale Event and all other Awards shall become fully
vested and nonforfeitable as of the effective time of the Sale Event, except as the Administrator
may otherwise specify with respect to particular Awards in the relevant Award documentation. Upon
the effective time of the Sale Event, the Plan and all outstanding Awards granted hereunder shall
terminate, unless provision is made in connection with the Sale Event in the sole discretion of the
parties thereto for the assumption or continuation of Awards theretofore granted by the successor
entity, or the substitution of such Awards with new Awards of the successor entity or parent
thereof, with appropriate adjustment as to the number and kind of shares and, if appropriate, the
per share exercise prices, as such parties shall agree (after taking into account any acceleration
hereunder). In the event of such termination, each grantee shall be permitted, within a specified
period of time prior to the consummation of the Sale Event as determined by the Administrator, to
exercise all outstanding Options held by such grantee, including those that will become exercisable
upon the consummation of the Sale Event; provided, however, that the exercise of Options not
exercisable prior to the Sale Event shall be subject to the consummation of the Sale Event.

Notwithstanding anything to the contrary in this Section 3(c), in the event of a Sale Event
pursuant to which holders of the Shares will receive upon consummation thereof a cash payment for
each share surrendered in the Sale Event, the Company shall have the right, but not the obligation,
to make or provide for a cash payment to the grantees holding Options, in exchange for the
cancellation thereof, in an amount equal to the difference between (A) the value as determined by
the Administrator of the consideration payable per Share pursuant to the Sale Event (the “Sale
Price”) times the number of Shares subject to outstanding Options (to the extent then exercisable
at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such
outstanding Options.

(d) Substitute Awards. The Administrator may grant Awards under the Plan in substitution
for share and share-based awards held by employees, trust managers or other key persons of another
corporation in connection with the merger or consolidation of the employing corporation with the
Company or the acquisition by the Company of property or stock of the employing corporation. The
Administrator may direct that the substitute Awards be granted on such terms and conditions as the
Administrator considers appropriate in the circumstances. Any substitute Awards granted under the
Plan shall not count against the share limitation set forth in Section 3(a).

			
	SECTION 4	 	ELIGIBILITY

Grantees under the Plan will be such full or part-time officers and other employees and Independent
Trust Managers of the Company as are selected from time to time by the Administrator in its sole
discretion.

			
	SECTION 5	 	SHARE OPTIONS

Any Share Option granted under the Plan shall be in such form as the Administrator may from time to
time approve.

Share Options granted under the Plan may be either Incentive Share Options or Non-Qualified Share
Options. Incentive Share Options may be granted only to employees of the Company. To the extent
that any Option does not qualify as an Incentive Share Option, it shall be deemed a Non-Qualified
Share Option.

(a) Share Options. Share Options granted pursuant to this Section 5(a) shall be subject to
the following terms and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Administrator shall deem desirable. If the
Administrator so determines, Share Options may be granted in lieu of cash compensation at the
optionee’s election, subject to such terms and conditions as the Administrator may establish.

3

 

(i) Exercise Price. The exercise price per share for the Shares covered by a Share Option
granted pursuant to this Section 5(a) shall be determined by the Administrator at the time of grant
but shall not be less than 100 percent of the Fair Market Value on the date of grant. If an
employee owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10 percent of the combined voting power of all classes of shares of the Company or
any parent or subsidiary corporation and an Incentive Share Option is granted to such employee, the
option price of such Incentive Share Option shall be not less than 110 percent of the Fair Market
Value on the grant date.

(ii) Option Term. The term of each Share Option shall be fixed by the Administrator, but no
Share Option shall be exercisable more than five (5) years after the date the Share Option is
granted.

(iii) Exercisability; Rights of a Shareholder. Share Options shall become exercisable at
such time or times, whether or not in installments, as shall be determined by the Administrator at
or after the grant date. The Administrator may at any time accelerate the exercisability of all or
any portion of any Share Option. An optionee shall have the rights of a shareholder only as to
Shares acquired upon the exercise of a Share Option and not as to unexercised Share Options.

(iv) Method of Exercise. Share Options may be exercised in whole or in part, by giving
written notice of exercise to the Company, specifying the number of Shares to be purchased. Payment
of the purchase price may be made by one or more of the following methods to the extent provided in
the Option Award agreement:

(A) In cash, by certified or bank check or other instrument acceptable to the Administrator;
or

(B) Through the delivery (or attestation to the ownership) of Shares that have been purchased
by the optionee on the open market or that have been beneficially owned by the optionee for
at least one year and are not then subject to restrictions under any Company plan. Such
surrendered Shares shall be valued at Fair Market Value on the exercise date.

Payment instruments will be received subject to collection. The delivery of certificates
representing the Shares to be purchased pursuant to the exercise of a Share Option will be
contingent upon receipt from the optionee (or a purchaser acting in his stead in accordance with
the provisions of the Share Option) by the Company of the full purchase price for such Shares and
the fulfillment of any other requirements contained in the Option Award agreement or applicable
provisions of laws. In the event an optionee chooses to pay the purchase price by previously-owned
Shares through the attestation method, the number of shares transferred to the optionee upon the
exercise of the Share Option shall be net of the number of shares attested to.

(v) Annual Limit on Incentive Share Options. To the extent required for “incentive stock
option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined as of
the time of grant) of the Shares with respect to which Incentive Share Options granted under this
Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable
for the first time by an optionee during any calendar year shall not exceed $100,000. To the extent
that any Share Option exceeds this limit, it shall constitute a Non-Qualified Share Option.

(b) Non-transferability of Options. No Share Option shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution and all Share Options shall be
exercisable, during the optionee’s lifetime, only by the optionee, or by the optionee’s legal
representative or guardian in the event of the optionee’s incapacity. Notwithstanding the
foregoing, the Administrator, in its sole discretion, may provide in the Award agreement regarding
a given Option that the optionee may transfer his Non-Qualified Share Options to members of his
immediate family, to trusts for the benefit of such family members, or to partnerships in which
such family members are the only partners, provided that the transferee agrees in writing with the
Company to be bound by all of the terms and conditions of this Plan and the applicable Option.

			
	SECTION 6	 	RESTRICTED SHARE AWARDS

(a) Nature of Restricted Share Awards. A Restricted Share Award is an Award entitling the
recipient to acquire, at such purchase price (which may be zero) as determined by the
Administrator, Shares subject to such restrictions and conditions as the Administrator may
determine at the time of grant (“Restricted Shares”). Conditions may be based on continuing
employment (or other service relationship) and/or achievement of pre-established performance goals
and objectives. The grant of a Restricted Share Award is contingent on the grantee executing the
Restricted Share Award agreement. The terms and conditions of each such agreement shall be
determined by the Administrator, and such terms and conditions may differ among individual Awards
and grantees. No more than 10,000 Restricted Shares may be granted to all executive officers in
the aggregate and no more than 5,000 Restricted Shares may be granted to all Independent Trust
Managers in the aggregate during any fiscal year.

(b) Rights as a Shareholder. Upon execution of a written instrument setting forth the
Restricted Share Award and payment of any applicable purchase price, a grantee shall have the
rights of a shareholder with respect to the dividend and voting rights of the Restricted Shares,
subject to such conditions contained in the written instrument evidencing the Restricted Share
Award. Unless the Administrator shall otherwise determine, (i) uncertificated Restricted Shares
shall be accompanied by a notation on the records of the Company or the transfer agent to the
effect that they are subject to forfeiture until such Restricted Shares are vested as provided in
Section 6(d) below, and (ii) certificated Restricted Shares shall remain in

4

 

the possession of the Company until such Restricted Shares are vested as provided in Section 6(d)
below, and the grantee shall be required, as a condition of the grant, to deliver to the Company
such instruments of transfer as the Administrator may prescribe.

(c) Restrictions. Restricted Shares may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of except as specifically provided herein or in the Restricted
Share Award agreement. Except as may otherwise be provided by the Administrator either in the Award
agreement or, subject to Section 9 below, in writing after the Award agreement is issued, if any,
if a grantee’s employment (or other service relationship) with the Company terminates for any
reason, any Restricted Shares that have not vested at the time of termination shall automatically
and without any requirement of notice to such grantee from, or other action by or on behalf of, the
Company be deemed to have been reacquired by the Company at their original purchase price, if any,
from such grantee or such grantee’s legal representative simultaneously with such termination of
employment (or other service relationship), and thereafter shall cease to represent any ownership
of the Company by grantee or rights of grantee as a shareholder. Following such deemed
reacquisition of unvested Restricted Shares that are represented by physical certificates, grantee
shall surrender such certificates to the Company upon request without consideration.

(d) Vesting of Restricted Share Awards. The Administrator at the time of grant shall
specify the date or dates and/or the attainment of pre-established performance goals, objectives
and other conditions on which the non-transferability of the Restricted Shares and the Company’s
right of repurchase or forfeiture shall lapse. Subsequent to such date or dates and/or the
attainment of such pre-established performance goals, objectives and other conditions, the Shares
on which all restrictions have lapsed shall no longer be Restricted Shares and shall be deemed
“vested.” Except as may otherwise be provided by the Administrator either in the Award agreement
or, subject to Section 9 below, in writing after the Award agreement is issued, a grantee’s rights
in any Restricted Shares that have not vested shall automatically terminate upon the grantee’s
termination of employment (or other service relationship) with the Company and such Shares shall be
subject to the provisions of Section 6(c) above.

			
	SECTION 7	 	TAX WITHHOLDING

(a) Payment by Grantee. Each grantee shall, no later than the date as of which the value of
an Award or of any Share or other amounts received thereunder first becomes includable in the gross
income of the grantee for Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator (including a decrease in the net Award to the grantee from a
target gross Award to approximate the after-tax value) regarding payment of, any Federal, state, or
local taxes of any kind required by law to be withheld with respect to such income. The Company
shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of
any kind otherwise due to the grantee. The Company’s obligation to deliver share certificates to
any grantee is subject to and conditioned on tax obligations being satisfied by the grantee.

(b) Payment in Shares. Subject to approval by the Administrator, a grantee may elect to
have the minimum required tax withholding obligation satisfied, in whole or in part, by (i)
authorizing the Company to withhold from Shares to be issued pursuant to any Award a number of
Shares with an aggregate Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, or (ii) transferring to the Company Shares owned by the grantee
with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy
the withholding amount due.

			
	SECTION 8	 	TRANSFER; LEAVE OF ABSENCE, ETC.

For purposes of the Plan, the following events shall not be deemed a termination of employment:

(a) a transfer to the employment of the Company from a subsidiary or from the Company to a
subsidiary, or from one subsidiary to another; or

(b) an approved leave of absence for military service or sickness, or for any other purpose
approved by the Company, if the employee’s right to re-employment is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.

			
	SECTION 9	 	AMENDMENTS AND TERMINATION

The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any time,
amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any other
lawful purpose, but no such action shall adversely affect rights under any outstanding Award
without the holder’s consent. Except as provided in Section 3(b) or 3(c), in no event may the
Administrator exercise its discretion to reduce the exercise price of outstanding Options or effect
repricing through cancellation and re-grants. Any material Plan amendments (other than amendments
that curtail the scope of the Plan), including any Plan amendments that (i) increase the number of
Shares reserved for issuance under the Plan, (ii) expand the type of Awards available, materially
expand the eligibility to participate or materially extend the term of the Plan, or (iii)
materially change the method of determining Fair Market Value, shall be subject to approval by the
Company shareholders entitled to vote at a meeting of shareholders. In addition, to the extent
determined by the Administrator to be required by the Code to ensure that Incentive Share Options
granted under the Plan are qualified under Section 422 of the Code, Plan amendments shall be
subject to approval by the Company shareholders entitled to
vote at a meeting of shareholders. Nothing in this Section 9 shall limit the Administrator’s
authority to take any action permitted pursuant to Section 3(c).

5

 

			
	SECTION 10	 	STATUS OF PLAN

With respect to the portion of any Award that has not been exercised and any payments in cash,
Shares or other consideration not received by a grantee, a grantee shall have no rights greater
than those of a general creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the Administrator may
authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver
Shares or make payments with respect to Awards hereunder, provided that the existence of such
trusts or other arrangements is consistent with the foregoing sentence.

			
	SECTION 11	 	CHANGE OF CONTROL PROVISIONS

Upon the occurrence of a Change of Control as defined in this Section 11:

(a) Except as otherwise provided in the applicable Award agreement, each outstanding Share Option
shall automatically become fully exercisable.

(b) Except as otherwise provided in the applicable Award Agreement, conditions and restrictions on
each outstanding Restricted Share Award will be removed.

(c) “Change of Control” shall mean the occurrence of any one of the following events:

(i) any “person,” as such term is used in Sections 13(d) and l4(d) of the Exchange Act (other than
the Company, any trustee, fiduciary or other person or entity holding securities under any employee
benefit plan of the Company), together with all “affiliates” and “associates” (as such terms are
defined in Rule 12b-2 under the Exchange Act) of such person, shall become the “beneficial owner”
(as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 40 percent or more of either (A) the combined voting power
of the Company’s then outstanding securities having the right to vote in an election of the
Company’s Board of Trust Managers (“Voting Securities”) or (B) the then outstanding Shares (in
either such case other than as a result of acquisition of securities directly from the Company); or

(ii) persons who, as of the Effective Date, constitute the Company’s Board of Trust Managers (the
“Incumbent Trust Managers”) cease for any reason, including, without limitation, as a result of a
tender offer, proxy contest, merger or similar transaction, to constitute at least a majority of
the Board, provided that any person becoming a trust manager of the Company subsequent to the
Effective Date whose election or nomination for election was approved by a vote of at least a
majority of the Incumbent Trust Managers shall, for purposes of this Plan, be considered an
Incumbent Trust Manager; or

(iii) the shareholders of the Company shall approve (A) any consolidation or merger of the Company
where the shareholders of the Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such term is defined in Rule
13d- 3 under the Exchange Act), directly or indirectly, shares representing in the aggregate 50
percent of the voting securities of the corporation issuing cash or securities in the consolidation
or merger (or of its ultimate parent corporation, if any), (B) any sale, lease, exchange or other
transfer (in one transaction or a series of transactions contemplated or arranged by any party as a
single plan) of all or substantially all of the assets of the Company or (C) any plan or proposal
for the liquidation or dissolution of the Company.

Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have occurred for
purposes of the foregoing clause (i) solely as the result of an acquisition of securities by the
Company which, by reducing the number of Shares or other Voting Securities outstanding, increases
(x) the proportionate number of Shares beneficially owned by any person to 40 percent or more of
the Shares then outstanding or (y) the proportionate voting power represented by the Voting
Securities beneficially owned by any person to 40 percent or more of the combined voting power of
all then outstanding Voting Securities; provided, however, that if any person referred to in clause
(x) or (y) of this sentence shall thereafter become the beneficial owner of any additional Shares
or other Voting Securities (other than pursuant to a share split, share dividend, or similar
transaction or as a result of an acquisition of securities directly from the Company) and
immediately thereafter beneficially owns 40 percent or more of the combined voting power of all
then outstanding Voting Securities, then a “Change of Control” shall be deemed to have occurred for
purposes of the foregoing clause (i).

			
	SECTION 12	 	GENERAL PROVISIONS

(a) No Distribution: Compliance with Legal Requirements. The Administrator may require each
person acquiring Shares pursuant to an Award to represent to and agree with the Company in writing
that such person is acquiring the Shares without a view to distribution thereof.

6

 

No Shares shall be issued pursuant to an Award until all applicable securities law and other legal
and share exchange or similar requirements have been satisfied. The Administrator may require the
placing of such stop-orders and restrictive legends on certificates for Shares and Awards as it
deems appropriate.

(b) Delivery of Share Certificates. Share certificates to grantees under this Plan shall be
deemed delivered for all purposes when the Company or a transfer agent of the Company shall have
mailed such certificates in the United States mail, addressed to the grantee, at the grantee’s last
known address on file with the Company. Uncertificated Shares shall be deemed delivered for all
purposes when the Company or a transfer agent of the Company shall have given to the grantee by
United States mail, at the grantee’s last known address on file with the Company, notice of
issuance and recorded the issuance in its records (which may include electronic “book entry”
records).

(c) Other Compensation Arrangements; No Employment Rights. Nothing contained in this Plan
shall prevent the Board from adopting other or additional compensation arrangements, including
trusts, and such arrangements may be either generally applicable or applicable only in specific
cases. The adoption of this Plan and the grant of Awards do not confer upon any employee any right
to continued employment with the Company.

(d) Trading Policy Restrictions. Option exercises and other Awards under the Plan shall be
subject to such Company’s insider trading policy, as in effect from time to time.

(e) Designation of Beneficiary. Each grantee to whom an Award has been made under the Plan
may designate a beneficiary or beneficiaries to exercise any Award or receive any payment under any
Award payable on or after the grantee’s death. Any such designation shall be on a form provided for
that purpose by the Administrator and shall not be effective until received by the Administrator.
If no beneficiary has been designated by a deceased grantee, or if the designated beneficiaries
have predeceased the grantee, the beneficiary shall be the grantee’s estate.

			
	SECTION 13	 	EFFECTIVE DATE OF PLAN

This Plan shall become effective upon approval by the holders of a majority of the votes cast at a
meeting of shareholders at which a quorum is present. Subject to such approval by the shareholders
and to the requirement that no Shares may be issued hereunder prior to such approval, Options may
be granted hereunder on and after adoption of this Plan by the Board. No grants of Non-Qualified
Share Options and other Awards may be made hereunder after the tenth (10th) anniversary of the
Effective Date and no grants of Incentive Share Options may be made hereunder after the tenth
(10th) anniversary of the date the Plan is approved by the Board of Trust Managers.

			
	SECTION 14	 	GOVERNING LAW

This Plan and all Awards and actions taken thereunder shall be governed by, and construed in
accordance with, the laws of the State of Texas, applied without regard to conflict of law
principles.

DATE APPROVED BY BOARD OF TRUST MANAGERS: March 5, 2005

DATE APPROVED BY SHAREHOLDERS: June 11, 2005

7exv10w2

 

Exhibit 10.2

EXECUTIVE EMPLOYMENT CONTRACT

     THIS AGREEMENT made as of June 15, 2005 by and between PMC Commercial Trust, a Texas Real
Estate Investment Trust with its principal places of business in Dallas, Collin County, Texas,
hereinafter referred to as the “CORPORATION”, and Andrew S. Rosemore, hereinafter referred to as
“EXECUTIVE”.

WITNESSETH THAT:

     In consideration of the promises herein contained, the parties hereto mutually agree as
follows:

     1. Employment: The Corporation hereby employs the Executive as its Executive Vice
President and Chief Operating Officer with such powers and duties as may be specified by the Board
of Directors. The Executive hereby accepts employment upon the terms and conditions as hereinafter
set forth.

     2. Term: Subject to the provisions for termination as hereinafter provided, the term
of this Agreement shall begin immediately and shall terminate on the earlier of (i) the Executive’s
seventieth (70th) birthday or (ii) July 31, 2008 or such later date as determined by the
Board of Directors (the “Term”). The Term of this Executive Employment Contract may be extended
annually by the Board of Directors.

     3. Compensation: For all services rendered by the Executive under this contract, the
Executive shall be paid an annual salary at a minimum at the annual rate for the Executive
effective as of September 30, 2004 (the “Minimum Rate”). The Minimum Rate may be increased by the
Board at its discretion. The annual salary is payable pursuant to the normal payroll practices of
the Corporation.

     The Board of Directors may consider bonus compensation for the Executive if the performance of
the Corporation and the Executive justifies such bonus compensation.

     4. Authorized Expenses: The Executive is authorized to incur reasonable expenses for
the promotion of the business of the Corporation. The Corporation will reimburse the Executive for
all such reasonable expenses upon the presentation by the Executive, from time to time, of an
itemized account of such expenditures.

     The Executive shall be entitled to such additional and other fringe benefits as the Board of
Directors shall from time to time authorize, including but not limited to: A) health insurance
coverage for the Executive, his wife and dependent children; B) a monthly automotive allowance of
$550, which the Executive is to use to obtain an automobile to be available for company needs. All
operating expenses such as maintenance, insurance and fuel (excluding fuel for company travel) will
be the responsibility and expense of the Executive.

     5. Extent of Services: The Executive shall devote a substantial portion of business
time, attention

 

 

and energies to the business of the Corporation, and shall not, during the term of this Agreement,
engage in any other business activities, whether or not such activities are pursued for gain,
profit or other pecuniary advantage. This provision is not meant to prevent him from A) devoting
reasonable time to civic or philanthropic activities or B) investing his assets in such form or
manner providing that it does not require any substantial services on the part of the Executive
that will interfere with the Executive’s employment pursuant to this Agreement. Executive’s
employment is considered as full-time.

     6. Working Facilities: The Executive shall be furnished with such facilities and
services suitable to his position and adequate for the performance of his duties.

     7. Duties: The Executive is employed in an executive and supervisory capacity and
shall perform such duties consistent herewith as the Board of Directors of the Corporation shall
from time to time specify. Subject to the provisions of Section 14 hereof, the precise services of
the Executive may be extended or curtailed, from time to time, at the discretion of the Board of
Directors of the Corporation.

     8. Disclosure of Information: The Executive recognizes and acknowledges that the
Corporation’s operating procedures or service techniques are valuable, special and unique assets of
the Corporation’s business. The Executive will not, during or after the term of his employment,
disclose the list of the Corporation’s customer base or service techniques to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever. In the event of
breach or threatened breach by the Executive of the provisions of this paragraph, the Corporation
shall be entitled to an injunction restraining any such breach. Nothing herein shall be construed
as prohibiting the Corporation from pursuing any other remedies available to the Corporation for
such breach or threatened breach, including the recovery of damages from the Executive.

     9. Vacations: The Executive shall be entitled each year to a vacation in accordance
with the vacation contract addendum dated effective July 1, 1999.

     10. Disability: If the Executive is unable to perform his services by reason of
illness or total incapacity, based on standards similar to those utilized by the U.S. Social
Security Administration, he shall receive his full salary for one (1) year of said total incapacity
through coordination of benefits with any existing disability insurance program provided by the
Corporation ( a reduction in salary by that amount paid by any Corporation provided insurance).
Should said Executive be totally incapacitated beyond a one-year period, so that he is not able to
devote full time to his employment with said Corporation, then this Agreement shall terminate.

 

 

     11. Death During Employment: If the Executive dies during the term of employment and
has not attained the age of seventy years, the Corporation and/or any third party insurance
provided by the Corporation, through a coordination of benefits, shall pay the estate of the
Executive a death benefit equal to two times the Executive’s annual salary. In the event the
Executive receives death benefits payable under any group life insurance policy issued to the
Corporation, the Corporation’s liability under this clause will be reduced by the amount of the
death benefit paid under such policy. The Corporation shall pay any remaining death benefits to
the estate of the Executive over the course of twelve (12) months in the same manner and under the
same terms as the Executive would have been paid if he had still been working for the Corporation.
No later than one (1) month from the date of death, the estate of the Executive will also be paid
any accumulated vacation pay. Such payments pursuant to this paragraph shall constitute the full
compensation of said Executive and he and his estate shall have no further claim for compensation
by reason of his employment by the Corporation.

     12. Assignment: The acts and obligations of the Corporation under this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of the Corporation.

     13. Invalidity: If any paragraph or part of this Agreement is invalid, it shall not
affect the remainder of this Agreement but the remainder shall be binding and effective against all
parties.

     14. Additional Compensation: If during the Term, this Agreement is terminated by the
Corporation (other than pursuant to the provisions of Section 15 hereof) or by the Executive due to
“Constructive Discharge” then the Executive shall receive termination pay in an amount equal to
2.99 times the average of the last three years compensation. For purposes of this Agreement,
“Constructive Discharge” shall mean:

	 	•	 	Any reduction in salary below the Minimum Rate;
	 
	 	•	 	A material change diminishing the Executive’s job function, authority, duties

or responsibilities, or a similar change deteriorating Executive’s working
	 
	 	 	 	conditions that would not be in accordance with the spirit of this Agreement;
	 
	 	•	 	A required relocation of Executive of more than 100 miles from Executive’s
	 
	 	 	 	current job location; or requires Executive to travel away from Executive’s office
	 
	 	 	 	in the course of discharging Executive’s responsibilities in excess of that
	 
	 	 	 	typically required of executives in similar positions.
	 
	 	•	 	Any breach of any of the terms of this Agreement by the Corporation which is
	 
	 	 	 	not cured within 14 days following written notice thereof by Executive to the
	 
	 	 	 	Corporation.

 

 

The amount payable by the Corporation pursuant to this Section 14 shall be made in one lump sum
cash payment payable to the Executive no later than 30 days following termination of this
Agreement.

     15. Termination: The Corporation cannot terminate this agreement except for: 1) the
intentional, unapproved material misuse of corporate funds, 2a) professional incompetence (i.e. the
intentional refusal to perform or the inability to perform the duties associated with Executive’s
position with the Corporation in a competent manner, which is not cured within 15 days following
written notice to Executive) or 2b) willful neglect of duties or responsibilities in either case
not otherwise related to or triggered by the occurrence of any event or events described in or
prescribed by Section 14 hereof.

     16. Indemnification: The Corporation hereby agrees to indemnify and hold the
Executive harmless from any loss for any corporate undertaking, as contemplated in Section 7
hereof, whereby a claim, allegation or cause of action shall be made against the Executive in the
performance of his contractual duties except for willful illegal misconduct. Said indemnification
shall include but not be limited to reasonable cost incurred in defending the Executive in his
faithful performance of contractual duties.

     17. Entire Agreement: This contract may not be changed except in writing and embodies
the whole Agreement between the parties hereto and there are no inducements, promises, terms,
conditions or obligations made or entered into by the Corporation or the Executive other than
contained herein. This Executive Employment Contract supercedes and replaces that certain Executive
Employment Contract dated September 17, 2004 between the Corporation and the Executive.

     IN WITNESS WHEREOF, the parties here hereunto signed and sealed this Agreement the date first
above written.

	 	 	 	 	 
	Signed, Sealed and Delivered

In the presence of:	 	“Corporation”

PMC Commercial Trust
	 
	 	 	 	 
	 
	 	 	 	 
	/s/ Angela Sparks	 	/s/ Lance B. Rosemore
	 

	 	By:
	 	Lance B. Rosemore
	 

	 	 	 	President
	 
	 	 	 	 
	 

	 	 	 	“EXECUTIVE”
	 
	 	 	 	 
	/s/ Jan F. Salit	 	/s/ Andrew S. Rosemore
	 

	 	By:
	 	Andrew S. Rosemore,
	 

	 	 	 	Executive Vice President
	 

	 	 	 	and Chief Operating Officer
	 
	 	 	 	 
	 	 	(CORPORATE SEAL)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00088-of-00352.parquet"}]]