Document:

Unassociated Document

Exhibit 10.49

 

POPE RESOURCES

INCENTIVE COMPENSATION PROGRAM SUMMARY

Revised February 2011

 

 

 

GENERAL PROGRAM INFORMATION

In 2010 Pope Resources (“POPE”) implemented a new incentive compensation program (the “Program”) to reward selected management employees who provide services to POPE and certain related entities for performance that builds long-term unitholder value.  While POPE had a previous incentive compensation program that was also focused on building long-term unitholder value, this new Program improves both transparency and alignment with POPE’s unitholders, while simplifying the administration of the Program.

 

POPE’s Managing General Partner, Pope MGP, Inc. (the “General Partner”), intends that the Program be continuing and permanent for participants but can suspend and or terminate the Program at any time, as long as previously earned awards are not forfeited.   The Human Resources Committee of the Board of Directors of the General Partner (the “HR Committee”) will act as the manager of the Program and, as such, has the authority, in its discretion, to determine all matters relating to Awards to be granted hereunder.  With respect to the Program, the HR Committee has the sole authority to interpret its provisions and any applicable rule or regulation. The HR Committee’s interpretation shall be conclusive and binding on all interested parties.  It is anticipated that the HR Committee will present Awards to participants in individualized annual letters that spell out POPE’s obligations and participant’s rights under the Award.  Subsequent to the grant of any Award, however, the HR Committee may not unilaterally modify any of a participant’s rights under previously tendered Award letters, except as spelled out in the Award letter.

 

The Program has two components – the Performance Restricted Unit (“PRU”) plan and the Long-Term Incentive Plan (“LTIP”).  Both components have a long-term emphasis, with the PRU plan focused on annual decision making and performance, and the LTIP focused on 3-year performance of POPE’s publicly traded units relative to a group of peer companies to be determined at the beginning of each plan cycle.  The Program was developed after considerable deliberation by the HR Committee and its compensation consultant.  This Program is unusual in its exclusive emphasis on long-term decision making.  The HR Committee believes this focus is appropriate for the nature of POPE’s assets and for strengthening the alignment with unitholders.  Each of these two Program components is described in more detail below.  Participants in the Program may obtain additional information about the Program from either POPE’s CEO or CFO.

 

 

PERFORMANCE RESTRICTED UNIT PLAN (“PRU”)

 

Key Design Features of PRU

	●	The sum of target awards for participants will form a target award pool with the initial target awards (starting in 2010) set at:
	 	m	6,000 PRU’s for the CEO
	 	m	20,000 PRU’s for all other plan participants combined
	 	m	 
The pool may be adjusted upward or downward if participants move in or out of the plan during the year

 

 

1

 

 

	●	 
PRU targets will generally be held constant over time, and recalibrated only infrequently based on significant capital or talent market changes

	●	 
Most participants will earn 100% of PRU targets most years, however, participants will earn:

	 	m	 
0% when a notable negative situation occurs due to either:

	 	 	■	Poor decisions and/or performance which leave POPE vulnerable to erosion of long-term value (internal factors), or
	 	 	■	 
Financial challenges, despite good decisions, that put POPE in a vulnerable position (external factors)

	 	m	 
Up to 200% only when exceptional value has been added, which is directly attributable to game-changing ideas generated and/or implemented by an individual or group of individuals

 

Mechanics of the PRU

	●	 
 
Immediately following the end of each year:

	 	m	 
 
The HR Committee will determine:

	 	 	■	 
The size of the PRU pool based on their assessment of the quality of decision-making and performance for the year

	 	 	■	 
 
If there are any game changer events that merit a special award for either individuals or groups and, if so, decide who to make awards to and in what amount and form (up to 1x each individual’s target PRU grant paid either in POPE units or cash)

	 	m	 
Each participant’s award is converted into a value based on a 60-trading-day (ending at December 31) average POPE unit price with actual award values fluctuating from year to year with the unit price

	●	 
Some participants will receive their payout entirely in POPE restricted units, some entirely in cash and others a blend of the two with the mix predetermined by participant position

	●	 
PRUs that are paid in POPE units will vest 25% per year over 4 years

	●	 
For PRUs paid in POPE units, a grant agreement executed by POPE and the participant will set forth the terms and conditions of vesting

 

Specific drivers of PRU grants by business unit

The determination of PRU grants to individuals within each business unit will reference different metrics for gauging performance across POPE’s business lines. The following is a summary of those key metrics grouped by business unit:

 

Corporate   Increase in net asset value, debt-to-total-capital ratio, working capital optimization, growth in distributions, profit, and free cash flow.

 

Fee Timber   Allowable cut, stumpage realizations ($ per MBF), cost/MBF harvested (harvest, haul and other), SFI audit results, and segment free cash flow.

 

TM&C   Total committed (and not placed) capital at end of year, capital placed during year, cumulative assets under management, IRR of funds, and operating income for segment.

 

Real Estate   Estimated impact of entitlements and/or land improvements on market value, sales price as a percent of book value, and segment free cash flow.

Participants in the PRU

Participants in the PRU include the following: CEO and direct management reports, Tree Farm Managers, Acquisitions Manager, Planning Manager, Investment Analyst, VP OPG, Gig Harbor and Port Gamble Project Managers, Port Gamble Property Manager, Controller, Financial Reporting Manager, and IT Manager.  As titles and/or job descriptions change, this list of participants may be modified by the HR Committee.

 

2

 

 

3-YEAR CASH LONG-TERM INCENTIVE PLAN (“LTIP”)

Key Design Features of the LTIP

	
●

	
POPE’s total shareholder return (TSR) is calculated for rolling 3-year increments starting with the period 2008 – 2010 and each succeeding year the TSR for POPE is calculated for the next 3-year period (2009 - 2011, 2010 – 2012, et seq.)

	
●

	
Essentially, TSR is a computation that measures unit price appreciation over the relevant return period (in this case, three years) and factors in unitholder distributions as an additional component of return

	
●

	
The beginning and end-of-period unit price used to calculate POPE’s TSR is a 60-trading-day average unit price as of each of those dates

	
●

	
POPE’s TSR is then compared to the TSR’s of a group of “peer” companies, identified at the beginning of each performance cycle, for the same period, each calculated in the same way as POPE, using a 60-trading-day average share price as of the beginning and end of the period

	
●

	
The  peer companies for the 2008-10 2009-11 and 2010-12 periods (with trading symbols so indicated) include a mix of timber REITs, other forest products, real estate, agriculture, and metals & mining as detailed below:

	
Forest Products

	
Real Estate

	
Agriculture

	
Metals & Mining

	
Deltic (DEL)

	
Amer. Realty Inv. (ARL)

	
Alico (ALCO)

	
China Direct (CDII)

	
Plum Creek (PCL)

	
Amer. Spectrum (AQQ)

	
Griffin Land (GRIF)

	
Jaguar Mining (JAG)

	
Potlatch (PCH)

	
Avatar Holdings (AVTR)

	
Limoneira (LMNR)

	
Royal Gold (RGLD)

	
Rayonier (RYN)

	
EastGroup Properties (EGP)

	  	  
	
St. Joe (JOE)

	
First Potomac (FPO)

	  	  
	
Weyerhaeuser (WY)

	
InterGroup Corp. (INTG)

	  	  
	  	
Maui Land & Pineapple (MLP)

	  	  
	  	
Monmouth RE Investment (MNR)

	  	  
	  	
NTS Realty (NLP)

	  	  
	  	
Tejon Ranch (TRC)

	  	  
	  	
Thomas Properties Group (TPGI)

	  	  

	
●

	
POPE’s TSR is expressed as a percentile of the range of TSRs within the other  peer companies with “target performance level” pegged at the 50th percentile

	
●

	
At target performance (50th percentile) the LTIP award payout is 100% of target

	
●

	
Maximum LTIP award payout of 200% of target for any single 3-year performance period is reached if POPE’s relative TSR is at the 80th percentile or higher

	
●

	
Below the 20th percentile, there is no LTIP award payout

	
●

	
If POPE’s relative TSR ranking vs. the peer group is between the 20th and 80th percentiles, the award payout is derived by interpolation between discrete points on the 0-200% of target payout

	
●

	
The target LTIP award for each year is expressed in a cash amount that varies by participant

	
●

	
Awards, if performance warrants, will be paid out in cash early in the year following the close of each 3-year performance cycle

	
●

	
Award levels may be altered by +/- 20% at the discretion of the HR Committee

 

 

3

 

 

Participants in the LTIP

Participation in the LTIP is comprised of the CEO and his direct management reports.

PARTICIPANTS ENTERING AND EXITING THE PRU AND THE LTIP

The following table outlines the treatment for varying entries and exits to the incentive plans.

	
Situation

	
PRU (1)

	
LTIP

	  	  	  
	
General conditions for awards

	
Participant needs to be employed by POPE through the last day of the calendar year and be an employee in good standing in order to receive an award (except as provided below)

	
Participant needs to be employed by POPE through the last day of the performance cycle and be an employee in good standing in order to receive an award (except as provided below)

	  	  	  
	
New hire

	
- If person joins prior to September 30, participant receives a pro-rated annual PRU award opportunity

- If person joins after September 30, participant receives PRU award opportunity when next year begins

	
- If person joins prior to September 30, participant receives a pro-rated award opportunity for percentage of year employed for current cycle

- If person joins after September 30, participant will receive an award opportunity for cycle which begins in following year (2)

	  	  	  
	
Promotion into plan

	
Same as new hire

	
Same as new hire

	  	  	  
	
Demotion out of plan

	
HR Committee may make a downward adjustment to annual PRU award on a subjective basis at year-end

	
Participant’s cash opportunity is pro-rated for time in eligible position

	  	  	  
	
Termination for normal retirement

	
PRU award at end of year is pro-rated for time served, with any PRU grant delivered in units vesting immediately upon grant

	
Participant’s cash opportunity is pro-rated for time in performance cycle

	  	  	  
	
Voluntary termination

	
Participant forfeits PRU award opportunity

	
Participant forfeits cash opportunity

	  	  	  

 

 

4

 

 

	 	 	 
	
Involuntary termination for cause (including non-performance)

	
Participant forfeits PRU award opportunity

	
Participant forfeits cash opportunity

	  	  	  
	
Change in control (CIC)

	
- No change if plan is continued and participant is not terminated within one year of the CIC

- If plan is discontinued and/or if participant is terminated within one year of the CIC, the participant earns target PRU award and immediately vests in all outstanding PRU grants

- No gross ups

	
- No change if plan is continued and participant is not terminated within one year of the CIC

- If plan is discontinued and/or if participant is terminated within one year of the CIC, the participant is paid cash award at accrued performance level at time of termination, prorated for length of cycle completed

- No gross ups

	  	  	  
	
Leave of absence

	
PRU grant can be prorated for time on leave during each year at discretion of HR Committee or CEO

	
Participant’s cash opportunity is prorated for time on leave during cycle, as long as participant is in cycle for at least two of the three years; otherwise forfeited

	  	  	  
	
Death

	
Prorated PRU award is paid to estate at time of death, based on most recent quarter-end unit price

	
Prorated cash award is paid to estate at time of death, based on accrued relative TSR performance through most recently competed quarter

	  	  	  
	
Termination due to permanent disability

	
-Prorated PRU award paid based on year-end unit price

- Payout occurs at normal time at end of year

	
-Participant’s cash opportunity is prorated for time served during cycle

- Payout occurs at normal time at end of cycle

	  	  	  

 

 

	
(1)   

	
Once PRUs are granted, any grants of restricted units will vest 25% per year on the anniversary date of the grant

	
(2)   

	
In select situation, RUs may be granted as part of recruitment package to recognize that participant will only be eligible for performance cycles that begin in the year of hire

 

 

FEDERAL INCOME TAX CONSEQUENCES

 

As discussed above, Awards paid under the Program may be in the form of cash and/or POPE units. Cash awards are taxable upon receipt and the participant’s employer will withhold the appropriate taxes from any cash compensation so due.

 

 

5

 

 

Grants of POPE units as part of the PRU will be subject to a vesting schedule and, as such, the tax consequences are delayed until the units vest, at which time the fair market value of the vested units (determined at the time of vesting) constitutes taxable income to the recipient.  The HR Committee will institute procedures to ensure that sufficient funds are available for POPE (or the participant’s employer) to satisfy its tax withholding obligations.

 

Recipients of unit grants will receive distributions paid by POPE in connection with the units.  Distributions paid in connection with unvested units will be paid to the participant and treated as compensation, taxed at ordinary income rates and subject to income tax withholding.  When the participant satisfies the applicable vesting schedule, from that point forward distributions in connection with the units will have the same treatment as that afforded to other limited partners receiving distributions.

 

 

 

CLAWBACKS

 

The HR Committee acknowledges that POPE’s incentive compensation program will be subject to the clawback provisions of the recently passed Dodd-Frank Act.  In the meantime, the HR Committee reserves the right and option to require the return of incentive compensation paid pursuant to this program in any instances of fraudulent employee misconduct or a restatement of the company financial reports affecting the calculation of the payout amounts.

 

 

6EXHIBIT 10.1

                                LETTER OF INTENT

THIS LETTER OF INTENT (the "LOI"), is entered into by and,

BETWEEN:   ADVANCED  MESSAGING  SOLUTIONS,  INC., a Nevada corporation having an
           office at 2377 Gold Meadow  Way,  Suite 100,  Gold River,  California
           U.S.A. 95670

           ("COMPANY")

AND:       SHENZHEN CC POWER  CORPORATION,  a People's Republic of China company
           having an  office at Room 706,  Cyber  Times  Tower B,  Tairan  Road,
           Futian District, Shenzhen, China 518040

           ("CC POWER")

                             BACKGROUND AND PURPOSE

The Company is a publicly  traded  company with the ticker  symbol "ADMS" on the
United States over-the-counter (OTC) bulletin board securities market.

The  Company  wishes to  acquire  CC Power  through a  reverse  acquisition  and
believes CC Power to have a valuable  existing  business  providing mobile phone
and internet  products  through  monthly  subscriptions  to large cellular phone
carriers and OEM partners.

The  Company  and the  stockholders  of CC Power wish to enter into a  voluntary
share exchange  transaction  whereby the Company would acquire all of the issued
and  outstanding  shares  of CC  Power  in  exchange  for  the  issuance  to the
stockholders of CC Power or their nominees of fifty and one half percent (50.5%)
ownership interest in the Company (on a post-Closing basis).

                                    AGREEMENT

NOW,  THEREFORE,  in consideration of the mutual agreements and  representations
contained  herein,  and other good and valuable  consideration,  the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1.   Except for the  provisions  in  Paragraphs  1 and 9-16,  this  proposal  is
     expressly  intended  to be  non-binding  and  subject  to the  satisfactory
     completion  of due  diligence and the  negotiation  of mutually  acceptable
     definitive  agreements between the Company and CC Power with regard to this
     transaction.
2.   The  Company  and CC Power  agree that they will  enter  into a  definitive
     agreement  containing  substantially  the same terms and  provisions as set
     forth in Paragraphs 3-8 of this LOI within sixty (60) days from the date of
     execution of this LOI (the "DEFINITIVE AGREEMENT").
3.   Upon  the  satisfaction  of the  conditions  set  forth  herein  and in the
     Definitive  Agreement,  the  Company  will  acquire  all of the  issued and
     outstanding  capital  stock of CC Power in exchange for the issuance to the
     stockholders  of CC Power or their legal nominees (the "NEW  STOCKHOLDERS")
     of fifty and one half percent  (50.5%) of the  outstanding  common stock of
     the  Company  (the  "EXCHANGE").  Upon  Closing,  CC Power  shall  become a
     wholly-owned subsidiary of the Company.
4.   The parties  agree that if CC power enters into a corporate  restructuring,
     the terms and conditions of this LOI shall be construed broadly to meet the
     intent of the parties in this LOI. Both parties  acknowledge  that CC Power
     may restructure itself such that all of its issued and outstanding  capital
     stock is owned by a non-PRC entity ("PARENT").  As such, the Exchange shall
     occur  between the  Company,  CC Power,  Parent,  and the  stockholders  of
     Parent.
<PAGE>
5.   The closing of the Exchange (the "CLOSING") shall occur on or before thirty
     (30)  days  from the date on which  CC  Power  completes  the  audit of its
     financial  statements  as  required  to be  filed by the  Company  upon the
     Closing in accordance with the Securities Exchange Act of 1934, as amended.
6.   After  Closing,  the Board of  Directors of the Company  shall  comprise of
     three (3) directors.  The New Stockholders shall have the right to nominate
     two directors to the Board of Directors of the Company.
7.   The  officers  of CC Power  shall  become the  officers  of the  Company at
     Closing.
8.   The  Definitive  Agreement  shall  contain  customary   representation  and
     warranties, covenants and indemnification provisions.
9.   In  consideration  of the time and effort the Company  will incur to pursue
     this  transaction,  CC Power agrees that (except for a capital financing by
     CC Power  approved by the Company),  from the date of execution of this LOI
     (or,  if  sooner,  until  such  time as the  parties  agree in  writing  to
     terminate   this  LOI)  until  the  Closing,   neither  CC  Power  nor  its
     stockholders  nor any person or entity  acting on their  behalf will in any
     way directly or indirectly (i) solicit,  initiate,  encourage or facilitate
     any offer to directly or indirectly  purchase CC Power or any of its assets
     or equity, (ii) enter into any discussions, negotiations or agreements with
     any person or entity which provide for such  purchase,  or (iii) provide to
     any persons other than the Company or its  representatives  any information
     or data related to such purchase or afford access to the properties,  books
     or records of CC Power to any such persons.  If CC Power,  its stockholders
     or its representatives receive any inquiry or proposal offering to purchase
     CC Power or any part of its assets or equity, CC Power will promptly notify
     the Company.
10.  No party hereto will make any  disclosure  or public  announcements  of the
     proposed  transactions,  the LOI or the  terms  thereof  without  the prior
     knowledge of the other parties,  which shall not be unreasonably  withheld,
     or except as required by relevant securities laws;  provided,  however, the
     Company may issue press releases in the ordinary course of business.
11.  Each party  agrees  and  acknowledges  that such  party and its  directors,
     officers,  employees,  agents and  representatives  will disclose  business
     information and information about the proposed transaction in the course of
     securing  financings  for the Company and CC Power and that the parties and
     their  representatives  may be required to disclose that information  under
     the continuous  disclosure  requirements of the Securities  Exchange Act of
     1934.
12.  This LOI shall be construed in accordance  with,  and governed by, the laws
     of the State of  Nevada,  and each  party  separately  and  unconditionally
     subjects to the  jurisdiction  of any court of  competent  authority in the
     State of Nevada,  and the rules and regulations  thereof,  for all purposes
     related to this agreement and/or their respective performance hereunder.
13.  The parties shall prepare, execute and file any and all documents necessary
     to comply with all applicable  federal and state securities laws, rules and
     regulations in any jurisdiction where they are required to do so.
14.  If any term or provision hereof shall be held illegal or invalid,  this LOI
     shall be  construed  and  enforced  as if such  illegal or invalid  term or
     provision had not been contained herein.
15.  This  LOI  may be  executed  in  counterparts,  by  original  or  facsimile
     signature,  with  the  same  effect  as if  the  signatures  to  each  such
     counterpart were upon a single  instrument;  and each counterpart  shall be
     enforceable  against the party  actually  executing such  counterpart.  All
     counterparts shall be deemed an original copy.
16.  The delay or failure of a party to  enforce  at any time any  provision  of
     this LOI shall in no way be considered a waiver of any such  provision,  or
     any other  provision of this LOI. No waiver of, delay or failure to enforce
     any  provision  of this LOI  shall in any way be  considered  a  continuing
     waiver or be construed as a subsequent waiver of any such provision, or any
     other provision of this LOI.

                                       2
<PAGE>
DATED EFFECTIVE MARCH 8, 2011

ADVANCED MESSAGING SOLUTIONS, INC.

-------------------------------------
(Authorized Signatory)

SHENZHEN CC POWER CORPORATION

-------------------------------------
(Authorized Signatory)

                                       3

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