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) NOVEMBER 1, 1999
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LASER MORTGAGE MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
MARYLAND 001-13563 22-353916
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) ID Number)
65 EAST 55TH STREET, NEW YORK, NEW YORK 10022
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (212) 758-6200
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151 WEST PASSAIC STREET, ROCHELLE PARK, NEW JERSEY 07062
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On November 1, 1999, the Registrant issued a press release announcing
that:
o Mariner Mortgage Management, L.L.C. has agreed to serve as the
external manager of the Registrant and be responsible for day-to-day management
of the Registrant's investments.
o William J. Michaelcheck, the Chairman of Mariner, has been
appointed President and Chief Executive Officer of the Registrant, and
Frederick N. Khedouri, an independent Director of the Registrant who has been
acting as non-executive President, has resigned as President and been elected
Chairman of the Board of Directors.
o The Registrant is terminating its consulting arrangement with
BlackRock Financial Management, Inc. upon completion of the transition to
Mariner.
o Robert J. Gartner, who is Vice President of the Registrant and
responsible for day-to-day investment decisions for the Registrant, will resign
upon completion of the transition to Mariner.
The Registrant's management estimated that as of September 30, 1999,
the Registrant's net asset value per share was between $4.65 and $5.15. At that
date, the Registrant estimates that its portfolio was comprised of approximately
$119 million of agency guaranteed pass-through securities, $25 million of
subordinate interests, $13 million of interest-only certificates, $4 million of
mortgage loans and $6 million of other fixed-income assets, and that it had a
total of 14,974,083 shares outstanding. The Registrant has repurchased during
the first three quarters of 1999 a total of 2,844,200 shares of common stock at
an average price per share of $3.50.
The Registrant estimates that the restructuring of its management will
reduce its base annual operating expenses (before incentive fees, if any) from
approximately $0.14 per share to approximately $0.02 per share.
The complete text of the press release dated November 1, 1999 is set
forth as Exhibit 99.1 hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Financial Statements
None.
(b) Pro Forma Financial Statements
None.
(c) Exhibits
10.1 Management Agreement dated as of November 1, 1999 by and between the
Registrant and Mariner Mortgage Management, L.L.C.
99.1 Press Release, dated November 1, 1999.
SIGNATURES
Pursuant to the requirements 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.
LASER MORTGAGE MANAGEMENT, INC.
By: /s/ William J. Michaelcheck
----------------------------------
Name: William J. Michaelcheck
Title: President
Dated: November 3, 1999
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
10.1 Management Agreement dated as of November 1, 1999 by and between the
Registrant and Mariner Mortgage Management, L.L.C.
99.1 Press Release, dated November 1, 1999.
EXHIBIT 10.1
November 1, 1999
Mariner Mortgage Management, L.L.C.
65 East 55th Street
New York, New York 10022
Dear Sirs:
The undersigned (the "Company") hereby engages Mariner Mortgage
Management, L.L.C. ("Mariner") as an investment adviser to perform services on
the terms and conditions set forth below.
1. DUTIES. (a) Under the ultimate supervision of the Company's Board
of Directors (the "Board"), Mariner (i) shall manage the Company's investments
according to the strategies and restrictions set forth from time to time by the
Board, including those set forth in any current filing of the Company made
pursuant to the Securities Act of 1933, as amended (the "1933 Act"), and the
Securities Exchange Act of 1934, as amended (the "1934 Act"), upon which Mariner
shall rely unless instructed in writing by the Board to the contrary, and in
furtherance of such general grant of authority, Mariner shall have full
discretion and authority, without obtaining the Company's prior approval, to
manage the investment and reinvestment of the assets of the Company and to
effect transactions on behalf of the Company, including purchasing and making
commitments to purchase and selling and making commitments to sell securities on
behalf of the Company and arranging financing for the Company in such manner as
Mariner considers appropriate, consistent with such written instructions of the
Board; (ii) shall use its reasonable best efforts to prepare all documentation,
under the supervision of the Company and for approval by the Company, to effect
all filings that comply in form with the 1933 Act and the 1934 Act; and (iii)
without limiting the foregoing and notwithstanding anything to the contrary in
this Agreement, Mariner shall have no duty to conduct any investigation with
respect to acts or omissions of the Company or any current or prior advisor or
manager to the Company or any of its current or prior affiliates, officers and
employees, or with respect to the Company's assets, occurring prior to the date
of this Agreement and shall not have any responsibility to recommend or take
remedial action with respect to any such acts or omissions that may be
warranted. In performing its duties under this Agreement, Mariner shall not be
liable for any actions by the Company or strategies or instructions made by the
Company that are inconsistent with, or contrary to, Mariner's actions, advice,
recommendations, suggestions or other communications; provided, however, if
Mariner objects to a strategy or instruction of the Company, it shall notify the
Company promptly and explain in writing the basis for such objection.
(b) The Company understands that Mariner, from time to time, will
purchase and sell securities of the type in which the Company may invest for the
accounts of others for whom it may provide investment advisory or other services
(collectively, "Managed Accounts"). The Company understands that when Mariner
determines that it would be appropriate for the Company and one or more Managed
Accounts to participate in an investment opportunity, Mariner will seek to
execute orders for the Company and for such Managed Accounts on an equitable
basis. In such situations, Mariner may place orders for the Company and each
Managed Account simultaneously, and if all such orders are not filled at the
same price, Mariner may cause the Company and each Managed Account to pay or
receive the average of the prices at which the orders were filled for the
Company and all Managed Accounts. If all such orders cannot be fully executed
under prevailing market conditions, Mariner may allocate the securities traded
among the Company and the Managed Accounts in a manner which it considers
equitable, taking into account the size of the order placed for the Company and
each such Managed Account, as well as any other factors which it deems relevant.
(c) Nothing in this Agreement shall prevent Mariner or any of its
affiliates from engaging in other businesses or from rendering services of any
kind to any other person or entity.
(d) Mariner shall select brokers, dealers, banks and intermediaries to
effect transactions for the Company, and may agree to such commissions, fees and
other charges on behalf of the Company as Mariner shall deem reasonable under
the circumstances taking into account all such factors it deems relevant. All
brokerage commissions and related transaction costs for transactions on behalf
of the Company will be borne by the Company. Mariner agrees to select brokers
and dealers on the basis of obtaining the best overall terms available, which
Mariner shall evaluate based on a variety of factors, including the ability to
achieve prompt and reliable executions at favorable prices; the operational
efficiency with which transactions are effected; the financial strength,
integrity and stability of the broker; the quality, comprehensiveness and
frequency of available research and related services considered to be of value;
and the competitiveness of commissions and similar charges compared to other
brokers satisfying Mariner's other selection criteria. Research and related
services furnished by brokers to Mariner may be used for the benefit of clients
other than the Company and may include: written information and analyses
concerning specific securities, companies or sectors; market, financial and
economic studies and forecasts, statistics, tax matters and pricing services;
discussions with legal and research personnel; and news, technical and
telecommunications services and equipment utilized in the investment management
process. Subject to seeking the best execution, Mariner also may consider
referrals of potential investors in the Company and research provided about the
Company as factors in the selection of brokers and may cause the Company to pay
a broker a commission in excess of that which another broker might have charged
for effecting the same transaction in recognition of the value of the brokerage,
research and related services provided by the broker.
2. TERM. Mariner's engagement hereunder shall commence as of the date
hereof and shall terminate on November 1, 2000 (the "Term"); provided, however,
the Company may terminate this Agreement without cause and without penalty (but
subject to paying fees upon termination as provided herein) at any time during
the Term upon 30 days' prior written notice to Mariner; provided, further,
however, that at any time during the Term and upon 30 days prior written notice
to the Company, Mariner may terminate this Agreement in the event (a) of the
commencement of any litigation arising under the anti-fraud provisions of the
federal or state securities laws to which the Company is a party, (b) the
Company materially breaches any obligations under this Agreement, or (c) the
Company holds "plan assets," as defined in the Employee Retirement Income
Security Act of 1974, as amended; provided, however, if the circumstances
described in subsections a, b and c of this Section 2 are eliminated or cured
during such 30 day period, this Agreement shall not terminate.
3. COMPENSATION. (a) For all services to be rendered to the Company
during the Term, the Company agrees to pay Mariner:
(i) a base fee (the "Base Fee") payable in cash, in arrears, on the
first business day of each month (the "Base Fee Payment Date"),
appropriately prorated for any partial periods, equal to 1/12th of the
product of 0.45% and the sum of (x) the product of the average number
of shares of the Company's common stock, $.001 par value (the "Common
Stock"), outstanding during the 30 days prior to the relevant Base Fee
Payment Date (the "Base Fee Payment Period") multiplied by the average
closing price of the Company's Common Stock during the Base Fee
Payment Period; (y) the aggregate amount of any distributions made by
the Company during the relevant Base Fee Payment Period; and (z) the
aggregate market value of any equity securities outstanding other than
Common Stock during the relevant Base Fee Payment Period
(appropriately adjusted for partial periods); and
(ii) an incentive fee (the "Incentive Compensation") payable in a
number of newly issued shares of Common Stock, to be issued to
Mariner, upon payment of the $0.001 par value thereof, equal to NS,
according to the following formula:
NS = (AIC / ACP);
AIC = (K x VA) + (K1 x VA1) + (K2 x VA2);
A= (ACP + CD);
if A is equal to or less than ACPI, then VA = 0, VA1 = 0 and
VA2 = 0;
if A is greater than ACPI and less than 4.0, then VA = S*(A
- ACPI); if A is equal to or greater than 4.0, then VA =
S*(4.0 - ACPI);
if A is greater than 4.0 and less than 4.5, then VA1 = S*(A
- 4); if A is equal to or greater than 4.5, then VA1 = S*.5;
if A is greater than 4.5, then VA2 = S*(A - 4.5);
K = .10;
K1 = .15;
K2 = .20;
S = the number of shares of the Company's Common Stock
outstanding at the Anniversary Date (as defined herein);
ACP = the average closing price of the Company's Common
Stock for the 15 days preceding the Anniversary Date (except
as provided in paragraph (e) of this section);
ACPI = $3.63; and
CD = the aggregate amount of distributions per share (other
than distributions of Company's Common Stock) made to
stockholders by the Company during the Term; provided,
however, such term shall not include distributions included
in the calculation of Incentive Compensation paid in any
prior period.
If the Company pays a dividend or declares a distribution in shares of
Common Stock, subdivides its outstanding shares of Common Stock,
combines its outstanding shares into a smaller number of shares,
issues by reclassification or reorganization other securities of the
Company to holders of shares generally or effects a similar
transaction, then the Board of Directors of the Company shall cause an
adjustment to be made to all of the elements of the formula used to
calculate Incentive Compensation so that Mariner shall be entitled to
receive the kind and number of shares of Common Stock or other
securities of the Company which Mariner would have been entitled to
receive in the absence of any such event. An adjustment made pursuant
hereto shall become effective immediately after the effective date of
such event, retroactive to the record date, if any, for such event,
and prompt notice thereof shall be given to Mariner. The parties
hereto agree to negotiate in good faith in connection with making
additional adjustments that they deem equitable to prevent dilution or
enlargement of the benefits intended to be granted to Mariner by this
paragraph, including, but not limited to, in the event the Company
effectuates its stock repurchase program or a similar transaction,
after the effective date of this Agreement.
(b) The Base Fee and Incentive Compensation shall be paid in
arrears. The Base Fee will be calculated by Mariner within 20 days after the end
of each month or the Anniversary Date, if earlier. Incentive Compensation will
be calculated by Mariner as promptly as practicable after the Anniversary Date.
For purposes of this Agreement, "Anniversary Date" shall mean the earliest to
occur of: the date of expiration of the Term or the date on which this Agreement
is terminated pursuant to Section 2 hereof regardless of which party terminates
this Agreement or the date on which the Company adopts (i) a plan of complete or
partial liquidation or resolutions providing for the complete or partial
liquidation or (ii) a plan to sell or exchange all or substantially all of the
property or assets of the Company or (iii) a going private transaction; and
"partial liquidation" shall mean a plan of liquidation which will result in a
reduction of the Company's net asset value to less than $0.75 per share. Such
calculations shall be promptly delivered to the Company. The Company agrees to
pay all such fees within 15 days of delivery of such calculation. In the absence
of manifest error, Mariner's calculations of such amounts shall control.
(c) No Base Fee or Incentive Compensation shall accrue or be
payable in respect of any period before the date hereof. The Base Fee and
Incentive Compensation for any partial period shall be pro-rated according to
the proportion which such partial period bears to the full period.
(d) Unless Mariner has been terminated for "cause," if prior to
November 1, 2000, the Company adopts (i) a plan of complete or partial
liquidation or resolutions providing for the complete or partial liquidation or
(ii) a plan to sell or exchange all or substantially all of the property or
assets of the Company, the Company agrees to pay Mariner a fee of $1,000,000
less any Base Fee and Incentive Compensation paid to Mariner during the Term.
Any such fee shall be payable in monthly increments (as determined by the Board
of Directors) from the date of such adoption to the expiration of the Term.
For the purposes of this agreement, "cause" shall mean that Mariner or its
employees has (i) committed an act constituting a breach of fiduciary duty,
gross negligence or willful misconduct; (ii) engaged in conduct that violated
the Company's internal policies or procedures and which is detrimental to the
business, reputation, character or standing of the Company or any of its
affiliates; (iii) committed an act of fraud, dishonesty or misrepresentation; or
(iv) materially breached its obligations under this Agreement.
(e) In the event that the Company completes a going private
transaction in which Mariner (which for purposes of this clause (e) shall
include its Affiliates (as defined herein) and its clients) does not control the
Company upon consummation of the transaction, then for purposes of Incentive
Compensation, as defined in Section 3(a)(ii) of this Agreement, "ACP" shall
equal the net asset value of the Company's assets on a per share basis on the
date of the adoption of such transaction. For purposes of this Agreement,
"Affiliate" shall mean, when used with reference to a specified person, (i) any
person that directly or indirectly controls or is controlled by or is under
common control with the specified person, (ii) any person that is an officer of,
partner in, client of or trustee of, or serves in a similar capacity with
respect to, the specified person or of which the specified person is an officer,
partner, adviser or trustee, or with respect to which the specified person
serves in a similar capacity, and (iii) any person that, directly or indirectly,
is the beneficial owner of 10% or more of any class of equity securities of the
specified person or of which the specified person is directly or indirectly the
owner of 10% or more of any class of equity securities.
4. EXPENSES. (a) Notwithstanding the specification in this Agreement
of duties and obligations with respect to the management of the Company's
assets, and notwithstanding anything to the contrary contained herein, nothing
herein shall require Mariner to pay or advance costs or expenses that are the
obligation of the Company, and Mariner shall not be liable for any expense or
obligation incurred by the Company.
(b) The Company agrees to pay directly or reimburse Mariner for
all expenses of the Company (i) (A) relating to the management and
administration of the Company's assets and business, including but not limited
to due diligence fees and legal fees and fees for independent auditors in
connection with the preparation of the Company's financial statements and
filings, including all exhibits and schedules thereto, under the 1933 Act and
the 1934 Act, or pursuant to the requirements of any governmental authority or
self-regulatory organization; and (B) incurred in connection with transactions
effected or positions held on behalf of the Company pursuant to Mariner's
exercise of its duties hereunder, including, without limitation, custodial fees,
clearing fees, brokerage commissions and related transaction costs, interest and
commitment fees on loans and debit balances and withholding or transfer taxes;
and (ii) out-of-pocket expenses paid or payable to third parties on behalf of
the Company.
(c) Mariner shall not be paid or reimbursed for its general and
administrative expenses, such as salaries of portfolio managers.
(d) If the Company shall request Mariner or any officer, employee
or affiliate of Mariner to render services for the Company other than those
required to be rendered by Mariner hereunder, such additional services, if
performed, will, to the extent not required to be paid for pursuant to this
Agreement, be compensated separately on terms agreed or to be agreed upon
between the party rendering such services and the Company.
(e) On the date hereof, the Company shall pay to Mariner an
expense allowance equal to $30,000 for its costs in connection with entering
into this Agreement.
(f) Nothing herein shall require Mariner to expend its own funds
except as expressly provided herein.
5. CONFIDENTIALITY. (a) Mariner acknowledges that the information and
knowledge obtained in the course of its performance of the services requested
hereunder relating to the Company's business (the "Confidential Information")
are of a confidential nature. Mariner shall, and shall ensure that its
employees, use commercially reasonable efforts to take all actions necessary and
appropriate to preserve the confidentiality of the Confidential Information and
prevent (i) the disclosure of the Confidential Information to any person other
than employees of Mariner who have a need to know of it in order to perform
their duties hereunder; and (ii) the use of the Confidential Information other
than in connection with the performance of its duties hereunder.
(b) The foregoing provision shall not apply to Confidential
Information that (i) has been disclosed to the public by the Company, (ii)
otherwise entered the public domain through lawful means, (iii) was or is
disclosed to Mariner by a third party and which to the knowledge of Mariner,
after investigation, is not subject to an obligation of confidentiality to the
Company, (iv) was known by Mariner prior to its receipt from the Company, (v)
was developed by Mariner independently of any disclosures previously made by the
Company to Mariner of such information, (vi) is required to be disclosed by
Mariner in connection with any judicial, administrative or other governmental
proceeding involving the Company or Mariner or any of its affiliates or
employees (whether or not such proceeding involves third parties) relating to
Mariner's services for the Company or this Agreement, provided that Mariner
first gives written detailed notice thereof to the Company as soon as possible
prior to such disclosure, unless notice would be unlawful, or (vii) is disclosed
in good faith by Mariner in the ordinary course of carrying out its duties
hereunder.
(c) Mariner acknowledges that the improper use or disclosure of
any Confidential Information may cause irreparable damage, and that the Company
shall have the right to seek injunctive relief to prevent such unauthorized use
or disclosure, and to such damages as are occasioned by such unauthorized use or
disclosure.
6. LIMITATION OF LIABILITY; INDEMNITY; RESERVE ESCROW. (a) The Company
agrees that Mariner shall not be liable to the Company, its affiliates or their
directors, officers or stockholders for any losses, damages, expenses or claims
occasioned by any act or omission of Mariner, its affiliates or the directors,
officers, stockholders, employees or agents of any of the foregoing in
connection with the performance of its services hereunder, other than as a
result of its own gross negligence or reckless disregard of its duties
hereunder.
(b) The Company agrees to indemnify Mariner and its affiliates
and their respective stockholders, officers, directors, employees and agents
against and hold them harmless from any and all liabilities, losses, damages,
costs, expenses (including reasonable attorneys' fees), demands or claims
arising out of any claim asserted or threatened to be asserted by any third
party in connection with Mariner's serving or having served as such pursuant to
this Agreement; provided, however, that Mariner shall not be entitled to
indemnification with respect to any liabilities, losses, damages, costs,
expenses, demands or claims caused by its own gross negligence or reckless
disregard of its duties hereunder. The Company shall advance to Mariner, as the
representative of the indemnified parties, the reasonable costs and expenses of
investigating and/or defending any such claim, subject to receiving a written
undertaking from Mariner to repay any such amounts advanced to it in the event
and to the extent of such determination that Mariner was not entitled to
indemnification hereunder.
(c) The Company agrees to segregate, within 10 days of the date
of this Agreement, unencumbered agency pass-through certificates having a
then-current market value of $2,500,000 (the "Certificates"). The Company shall
have the sole right at any time to substitute for the Certificates unencumbered
cash or cash equivalent securities in an amount equal to $2,000,000. The Company
agrees that either the Certificates, including any proceeds from the sale
thereof up to $2,000,000, or such cash or cash equivalent securities, as the
case may be, shall be set aside to satisfy the Company's indemnification
obligations to Mariner as set forth in Section 6(b) of this Agreement and shall
so remain for a minimum of three years after the date that substantially all of
the Company's assets are sold, unless a portion of the funds are needed to
satisfy the Company's indemnification obligations to Mariner. At the end of such
three year period, if Mariner is the subject of any asserted or threatened claim
or reasonably believes that it will be the subject of any such claim, then the
Company will continue to set aside any then remaining amounts until such time
that a final resolution of such asserted or threatened claim has occurred. If at
the end of such three year period, Mariner is not the subject of any asserted or
threatened claim or does not reasonably believe it will be the subject of any
such claim at the end of the three year period, then such amounts may be used
for such other purposes as the Company determines.
7. REPRESENTATIONS. Each party represents and warrants that (a) it has
all requisite authority to consummate the transactions contemplated hereby, (b)
the terms of the Agreement do not conflict with any obligation by which it is
bound, whether arising by contract, operation of law or otherwise, (c) this
Agreement has been duly authorized by appropriate corporate action and (d) no
waiver, consent, regulatory approval or other similar action is required to be
obtained in connection with the consummation of the transactions hereunder which
has not already been obtained.
8. OTHER ASSIGNMENTS. Nothing in this Agreement shall prevent Mariner
or any officer, employee or other affiliate thereof from providing services for
any other person, firm or corporation, or from engaging in any other lawful
activity, and shall not in any way limit or restrict Mariner or any of its
affiliates, shareholders, officers, employees or agents from buying, selling or
trading any securities or making investments for its or their own account or for
the accounts of others for whom it or they may be acting, even if such
activities are in competition with the Company; provided, however, that Mariner
will not undertake activities which, in its judgment, will substantially and
adversely affect the performance of its obligations under this Agreement.
9. RELIANCE BY MARINER. In the performance of its duties under this
Agreement, Mariner shall at all times be entitled to rely on advice of its or
the Company's counsel, accountants and tax advisers as to any requirements
imposed by (i) the Company's intent to be eligible for taxation as a real estate
investment trust as defined in Sections 856-860 of the Internal Revenue Code of
1986; (ii) the Company's status as an entity exempt from regulation under the
Investment Company Act of 1940; (iii) any other applicable provision of law; and
(iv) the provisions of the Articles of Incorporation and By-Laws of the Company,
as such documents are amended from time to time; and Mariner shall also be
entitled to rely on the policies and determinations of the Board communicated to
Mariner in writing. Mariner shall not be liable for any action taken or omitted
by it in good faith in accordance with the advice of such persons.
10. ASSIGNMENT. Mariner agrees not to assign this Agreement or the
obligations to be performed by it hereunder.
11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties relating its subject matter, and supersedes any previous
understandings with respect thereto.
12. AMENDMENT. This Agreement may be amended only by a written
instrument executed by both of the parties hereto.
13. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given when
delivered personally or mailed by certified mail, return receipt requested, or
overnight courier, to the address of the applicable party, except that notices
to the Company shall be sent to the attention of Mr. Frederick N. Khedouri,
Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New York 10167, facsimile:
212-272-2295, with a copy to James R. Tanenbaum, Stroock & Stroock & Lavan LLP,
180 Maiden Lane, New York, New York 10038, facsimile: 212-806-6006. Any
correspondence to Mariner can be sent to the attention of Mr. William J.
Michaelcheck, Mariner Mortgage Management, L.L.C., 65 East 55th Street, New
York, New York 10022.
14. SURVIVAL. The provisions of Sections 5, 6 and this Section 14
shall survive the termination of this Agreement.
15. GOVERNING LAW. This Agreement and the rights and obligations of
the parties hereto shall be construed in accordance with the internal laws of
the State of New York.
16. COUNTERPARTS. This Agreement may be executed counterparts, each of
which shall be deemed to be an original.
<PAGE>
If you agree with the foregoing, please sign and return a copy of this
Agreement.
Sincerely,
LASER MORTGAGE MANAGEMENT, INC.
By: /S/ FREDERICK N. KHEDOURI
----------------------------
Name: Frederick N. Khedouri
Title: President
Agreed to and Accepted By:
MARINER MORTGAGE MANAGEMENT, L.L.C.
By: /S/ WILLIAM J. MICHAELCHECK
-------------------------------
Name: William J. Michaelcheck
Title: Chairman
EXHIBIT 99.1
LASER MORTGAGE MANAGEMENT, INC. ANNOUNCES NEW MANAGEMENT STRUCTURE
Rochelle Park, New Jersey, November 1, 1999. The Board of Directors of
LASER Mortgage Management, Inc. (NYSE: LMM) announced today that:
o Mariner Mortgage Management, LLC has agreed to serve as the
external manager of the Company and be responsible for day-to-day management of
the Company's investments.
o William J. Michaelcheck, the Chairman of Mariner, has been
appointed President and Chief Executive Officer of the Company, and Frederick N.
Khedouri, an independent Director of the Company who has been acting as
non-executive President, has resigned as President and been elected Chairman of
the Board of Directors.
o The Company is terminating its consulting arrangement with
BlackRock Financial Management, Inc. upon completion of the transition to
Mariner.
o Robert J. Gartner, who is Vice President of the Company and
responsible for day-to-day investment decisions for the Company, will resign
upon completion of the transition to Mariner.
The Company's management estimated that as of September 30, 1999, the
Company's net asset value per share was between $4.65 and $5.15. At that date,
the Company estimates that its portfolio was comprised of approximately $119
million of agency guaranteed pass-through securities, $25 million of subordinate
interests, $13 million of interest-only certificates, $4 million of mortgage
loans and $6 million of other fixed-income assets, and that it had a total of
14,974,083 shares outstanding. The Company has repurchased during the first
three quarters of 1999 a total of 2,844,200 shares of common stock at an average
price per share of $3.50.
The Company estimates that the restructuring of its management will
reduce its base annual operating expenses (before incentive fees, if any) from
approximately $0.14 per share to approximately $0.02 per share.
Under the management agreement, Mariner will receive an annual base
management fee payable monthly in cash equal to 0.45% of the aggregate value of
the Company's outstanding equity and an incentive fee payable annually in newly
issued stock of the Company. The incentive fee will equal 10% of the amount by
which the market price of the Company's stock (plus any distributions) at the
end of 12 months exceeds $3.63 per share (which approximates the average closing
price of the Company's common stock for the fifteen days ended October 29, 1999)
up to the equivalent of $4.00 per share; 15% of amounts over $4.00 per share up
to $4.50 per share; and 20% of amounts over $4.50 per share. The agreement has a
one-year term, but is terminable by the Company without cause or penalty on 30
days' notice. Mariner may terminate the agreement in limited circumstances. In
addition, Mariner is entitled to receive a minimum fee if the Company adopts a
plan of liquidation prior to the expiration of the agreement.
Mr. Michaelcheck said "Mariner will during the next 30 days evaluate
the Company's investment strategy and consider whether changes are desirable."
LASER Mortgage Management, Inc. is a specialty finance company
investing primarily in mortgage-backed securities and mortgage loans. The
Company has elected to be taxed as a real estate investment trust under the
Internal Revenue Code of 1986, as amended.
A telephone call for investors has been scheduled for 11:00 a.m. (EST)
on November 2, 1999. Interested participants should call 1-800-277-3870 and ask
for the LASER conference call. A taped replay of the call will be available by
dialing 1-800-475-6701 access code 479933.
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995: STATEMENTS IN THIS PRESS RELEASE REGARDING LASER MORTGAGE
MANAGEMENT, INC.'S BUSINESS WHICH ARE NOT HISTORICAL FACTS ARE "FORWARD-LOOKING"
STATEMENTS THAT INVOLVE RISK AND UNCERTAINTIES.
Date: November 1, 1999
Contact: LASER Mortgage Management, Inc.
William J. Michaelcheck
President and Chief Executive Officer
212-758-6200
