<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
PMC Capital, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
PMC CAPITAL, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
WEDNESDAY, MAY 14, 1997
To the Shareholders of
PMC CAPITAL, INC.:
The Annual Meeting of Shareholders of PMC Capital, Inc. (the
"Company") will be held at its corporate headquarters, 17290 Preston Road, 3rd
Floor, Dallas, Texas, on Wednesday, May 14, 1997, at 9:30 a.m., local time, for
the following purposes:
(1) To elect three directors, each to hold office for a term of
three years and until their respective successors shall have
been elected and qualified;
(2) To consider and act upon a proposal to adopt and approve the
Company's 1997 Director Stock Option Plan and 1997 Employee
Stock Option Plan;
(3) To ratify the appointment of Coopers & Lybrand L.L.P. as the
independent public accountants of the Company; and
(4) To transact such other business as may properly come before
such meeting.
March 31, 1997 has been fixed as the date of record for determining
shareholders entitled to receive notice of and to vote at the Annual Meeting.
By Order of the Board of Directors,
Lance B. Rosemore,
Secretary
April 7, 1997
YOUR VOTE IS IMPORTANT. PLEASE DATE, VOTE, SIGN AND MAIL BACK THE
ENCLOSED PROXY AT YOUR EARLIEST CONVENIENCE. THE ENCLOSED RETURN ENVELOPE MAY
BE USED FOR THAT PURPOSE.
<PAGE> 3
PMC CAPITAL, INC.
PMC CAPITAL BUILDING
17290 PRESTON ROAD
THIRD FLOOR
DALLAS, TEXAS 75252
PROXY STATEMENT
The persons named in the accompanying form of proxy have been
authorized to solicit proxies from shareholders of PMC Capital, Inc. (the
"Company") on behalf of the Board of Directors of the Company for use at the
Annual Meeting of Shareholders to be held on May 14, 1997 (the "Annual
Meeting") and at any adjournments thereof. The notice of the Annual Meeting,
the proxy statement and the form of proxy are mailed to shareholders of the
Company on or about April 7, 1997. Any shareholder giving a proxy in the
accompanying form will retain the power to revoke it prior to its exercise by
later proxy received by the Company or by giving notice of revocation to the
Company in writing or at the Annual Meeting.
RECORD DATE; VOTING SECURITIES
The record date for shareholders entitled to vote at the Annual
Meeting is the close of business on March 31, 1997 (the "Record Date") at which
time the Company had issued and outstanding 11,276,355 shares of its common
stock, par value $.01 per share (the "Common Stock"). The Common Stock is the
only class of capital stock of the Company issued and outstanding. In deciding
all questions, a holder of Common Stock shall be entitled to one vote for each
share.
PURPOSE OF THE ANNUAL MEETING
At the Annual Meeting, the Company's shareholders will be asked to
consider and vote on the following proposals:
(i) To elect three directors for terms to expire at the 2000
annual meeting of shareholders and until their respective
successors have been elected and qualified;
(ii) To consider and act upon a proposal to adopt and approve the
Company's 1997 Director Stock Option Plan and 1997 Employee
Stock Option Plan (together, the "Plans");
(iii) To ratify the appointment of Coopers & Lybrand L.L.P. as the
independent public accountants of the Company; and
(iv) To transact such other business as may properly come before
the Annual Meeting.
The Board of Directors does not know of any other matter that is to come before
the Annual Meeting. If any other matters are properly presented for
consideration, however, the persons
<PAGE> 4
authorized by the enclosed proxy will have directions to vote on such matters
in accordance with their best judgment.
QUORUM AND VOTING REQUIREMENTS
The holders of record of a majority of the outstanding shares of
Common Stock at the Record Date will constitute a quorum for the transaction of
business at the Annual Meeting. If a quorum should not be present or
represented at the Annual Meeting, the shareholders present or represented at
the Annual Meeting may adjourn the Annual Meeting from time to time without
notice other than announcement at the Annual Meeting until a quorum is
obtained.
Each share of Common Stock may be voted for up to three (3)
individuals (the number of directors to be elected) as directors of the
Company. The three (3) nominees for director receiving the highest number of
votes cast by holders of shares of Common Stock present or represented by proxy
at the Annual Meeting, if a quorum is present thereat, will be elected as
directors by the Company. It is intended that, unless authorization to vote
for one or more nominees for director is withheld, proxies will be voted FOR
the election of all of the nominees set forth in this Proxy Statement.
Approval of a majority of the shares of Common Stock represented and
voting at the Annual Meeting will be necessary for the adoption and approval of
the Plans and for ratification of the selection of Coopers & Lybrand L.L.P. as
independent public accountants for the Company for the year ending December 31,
1997.
Votes cast by proxy or in person will be counted by two persons
appointed by the Company to act as inspectors for the Annual Meeting. The
election inspectors will treat shares represented by proxies that reflect
abstentions as shares that are present and entitled to vote for the purpose of
determining the presence of a quorum and of determining the outcome of any
matter submitted to the shareholders for a vote; however, abstentions will not
be deemed outstanding and, therefore, will not be counted in the tabulation of
votes on the proposals presented to the shareholders.
The election inspectors will treat shares referred to as "broker
non-votes" (i.e., shares held by brokers or nominees as to which instructions
have not been received from the beneficial owners and as to which the broker or
nominee does not have discretionary voting power on a particular matter) as
shares that are present and entitled to vote for the purpose of determining the
presence of a quorum. However, for the purpose of determining the outcome of
any matter as to which the broker or nominee has indicated on the proxy that it
does not have discretionary authority to vote, those shares will be treated as
not present and not entitled to vote with respect to that matter (even though
those shares are considered entitled to vote for quorum purposes and may be
entitled to vote on other matters).
RIGHT TO REVOKE PROXY
Any shareholder giving the proxy enclosed with the Proxy Statement has
the power to revoke such proxy at any time prior to the exercise thereof by
giving notice of such revocation, or by
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delivering a later-dated proxy, to the Secretary of the Company prior to the
Annual Meeting. Shareholders will also have an opportunity to revoke their
proxies by attending the Annual Meeting and voting in person (although
attendance at the Annual Meeting will not in and of itself constitute a
revocation of a proxy).
I. ELECTION OF DIRECTORS
GENERAL
The Company's Articles of Incorporation currently provide for a Board
of Directors of not less than five (5) and no more than twenty (20) directors,
as fixed, from time to time, by the Board of Directors. Pursuant to the
Articles of Incorporation, the directors are divided into three classes, with
each class serving a three-year term and one class being elected by the
shareholders annually. The Board of Directors currently consists of nine (9)
members divided among the three classes of directors.
NOMINEES
Set forth below is the principal occupation of, and certain other
information with respect to, each of the nominees for election as a director of
the Company, to hold office until the 2000 annual meeting of shareholders and
until their respective successors shall have been elected and qualified. THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE TO ELECT THE THREE NOMINEES FOR
DIRECTORS.
DR. FREDRIC M. ROSEMORE* - Dr. Rosemore, 73, has been the Chairman of
the Board and Treasurer of the Company since 1983. From 1990 to 1992, Dr.
Rosemore was a Vice President of the Company and from 1979 to 1990, Dr.
Rosemore was the President of the Company. For many years he was engaged in
diverse businesses, including the construction of apartment complexes, factory
buildings, and numerous commercial retail establishments. From 1948 to 1980,
Dr. Rosemore practiced optometry. He has been a director of the Company since
1983.
MR. LANCE B. ROSEMORE* - Mr. Rosemore, 48, has been Chief Executive
Officer of the Company since May 1992, President of the Company since 1990 and
Secretary since 1983. From 1990 to May 1992, Mr. Rosemore was Chief Operating
Officer of the Company. Previously, Mr. Rosemore has owned a consumer finance
company and has been employed by C.I.T. Financial and United Carolina Bank
Shares. Mr. Rosemore has been a trust manager and President of PMC
__________________________________
* Mr. Lance B. Rosemore and Dr. Andrew S. Rosemore are the sons of Dr.
Fredric M. Rosemore. Dr. Fredric M. Rosemore and Dr. Andrew S.
Rosemore each own in excess of 5% of the outstanding shares of Common
Stock. Consequently, all such persons may be deemed to be "interested
persons" as defined under the Investment Company Act of 1940, as
amended (the "Investment Company Act").
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Commercial Trust, a Texas real estate investment trust and an affiliate of the
Company ("PMC Commercial"), since June 1993 and a director of the Company since
1983.
DR. ANDREW S. ROSEMORE* - Dr. Rosemore, 50, has been Chief Operating
Officer of the Company since May 1992 and Executive Vice President of the
Company since 1990. From 1988 to May 1990, Dr. Rosemore was Vice President of
the Company. From 1973 to 1988, Dr. Rosemore owned and managed commercial
rental properties, apartment complexes and factory buildings. Since 1972, Dr.
Rosemore has been a licensed physician in Alabama. Dr. Rosemore has been a
trust manager of PMC Commercial since June 1993 and Chairman of the Board of
PMC Commercial since January 1994 and a director of the Company since 1988.
DIRECTORS CONTINUING IN OFFICE
Set forth below is the principal occupation, and certain other
information with respect to, each director of the Company who is continuing in
office following the Annual Meeting.
DR. IRVIN M. BORISH - Dr. Borish, 84, served as Benedict
(Distinguished) Professor of Optometry at the University of Houston after
retiring from Indiana University, where he holds the status of Professor
Emeritus. He operated a private practice of optometry for over thirty years.
He is the author of a major text in his field and holds five patents in contact
lenses. He has been a director of the Company since 1989. His term as
director expires in 1998.
MR. THOMAS HAMILL - Mr. Hamill, 43, is vice president of Jardine Sayer
& Company, Inc., the US reinsurance intermediary subsidiary of Jardine Lloyd
Thompson plc. From 1989 through 1996, Mr. Hamill was president of Caliban
Holdings Ltd. ("Caliban") and its subsidiaries, including Belvedere Insurance
Company Ltd. ("Belvedere"). From September 1986 through December 1989, Mr.
Hamill was vice president of Belvedere Corporation. Mr. Hamill is a non-
executive director and Chairman of the Board of Caliban, Belvedere and Midlands
Management Corporation. Mr. Hamill has been a director the Company since 1992,
when he was elected pursuant to an agreement between the Company and Belvedere
in April 1991 whereby the directors of the Company agreed at that time to
support a representative of Caliban Holdings in his candidacy for director in
exchange for Belvedere's purchase of 185,000 shares of Common Stock. His term
as director expires in 1998.
MR. BARRY A. IMBER - Mr. Imber, 50, has been a principal of Imber and
Company, Certified Public Accountants, or its predecessor, since 1982. Imber
and Company was the independent certified public accountant for the Company and
its subsidiaries for the years ended December 31, 1988 through December 31,
1991. Mr. Imber was trust manager of PMC Commercial from September 1993 to
March 1995 and a director of the Company since March 1995. His term as
director expires in 1998.
MR. ROBERT DIAMOND - Mr. Diamond, 65, has been an attorney for 40
years. He is currently of counsel to the law firm of Diamond & Diamond, P.A.,
Millburn, New Jersey. He served as a director of the Company from 1982 to 1992
and rejoined the Board of Directors in January 1994. He served as a member of
the Board of Directors of Allstate Financial Corporation from 1991 to 1993. He
has managed personal investments since 1991. His term as director expires in
1999.
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DR. MARTHA R. GREENBERG** - Dr. Greenberg, 45, has practiced optometry
for 22 years in Russellville, Alabama and currently serves on the Board of
Trustees of Southern College of Optometry. Dr. Greenberg has been a trust
manager of PMC Commercial since May 1996 and a director of the Company since
1984. Her term as director expires in 1999.
MR. LEE RUWITCH - Mr. Ruwitch, 83, is currently the owner of a
ministorage facility, Regency Storage, Inc., which is located in West Palm
Beach, Florida. Mr. Ruwitch has been involved with the daily management of
personal investments since he sold a major legal printing business in 1986. He
is the President of LFR Corporation and has been a partner in TCA Joint Venture
in Miami since 1992. He is involved with the Francien and Lee Ruwitch
Charitable Foundation in Miami, Florida. Mr. Ruwitch was a director of the
Company from 1984 to December 1993 and rejoined the board in September 1994.
His term as director expires in 1999.
NOMINATIONS FOR ELECTION TO THE BOARD OF DIRECTORS
The Company does not have a nominating committee. The Board of
Directors considers persons who will be eligible or desirable for membership on
the Board of Directors. Names are solicited from all directors and an effort
is made to obtain information with respect to all such potential nominees for
the position of director. Shareholders wishing to recommend candidates for
consideration by the Board of Directors can do so by writing to the Secretary
of the Company at its offices in Dallas, Texas.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors had four regular (including video conferences)
meetings, and conducted four special meetings via telephonic conference, during
1996. Each person who was a director for the entire year attended or
participated in at least 75% of all regular meetings held by the Board of
Directors and all committees on which such director served during such year.
Non-employee directors were compensated $500 for each meeting they attended.
The Company reimburses the directors for the travel expenses incurred by them
in connection with such meetings.
The Audit Committee of the Board of Directors is currently comprised
of Mr. Hamill and Mr. Imber. The principal functions of the Audit Committee
are to oversee the financial reporting policies, the accounting issues, the
portfolio valuation and the entire audit function of the Company. The Audit
Committee reports its activities to the Board of Directors. The Audit
Committee holds meetings at such times as may be required for the performance
of its functions and, during the year ended December 31, 1996, held one
meeting.
There is no compensation committee; however, the Board of Directors as
a whole performs the functions of such committee. The Company has appointed an
Independent Directors Committee currently consisting of Dr. Borish, Mr. Hamill,
Mr. Ruwitch, Mr. Diamond and Mr. Imber, each of
__________________________________
** Martha R. Greenberg is the daughter of Dr. Fredric M. Rosemore.
Consequently, she may be deemed to be an "interested person" as
defined under the Investment Company Act.
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whom is otherwise disinterested with respect to the Company. The Independent
Directors Committee, which held one meeting during 1996, reviews all proposed
affiliated transactions to ensure that such transactions do not violate the
appropriate provisions of the Investment Company Act.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company has no compensation committee. Each of Mr. Lance
Rosemore and Dr. Andrew Rosemore participated in deliberations of the Company's
Board of Directors concerning executive compensation for the year ended
December 31, 1996. Mr. Lance Rosemore and Dr. Andrew Rosemore serve as
executive officers and members of the Board of Trust Managers of PMC
Commercial.
EXECUTIVE OFFICERS
The following table sets forth the names and ages of the executive
officers of the Company (each of whom serves at the pleasure of the Board of
Directors), all positions held with the Company by each individual, and a
description of the business experience of each individual for at least the past
five years.
<TABLE>
<CAPTION>
Name Age Title
---- --- -----
<S> <C> <C>
Dr. Fredric M. Rosemore 73 Chairman of the Board and Treasurer
Mr. Lance B. Rosemore 48 President, Chief Executive
Officer and Secretary
Dr. Andrew S. Rosemore 50 Executive Vice President and
Chief Operating Officer
Mr. Jan F. Salit 46 Executive Vice President,
Chief Investment Officer
and Assistant Secretary
Mr. Barry N. Berlin 36 Chief Financial Officer
Ms. Mary J. Brownmiller 42 Senior Vice President
Ms. Cheryl T. Murray 30 General Counsel
</TABLE>
For a description of the business experience of Drs. Fredric Rosemore
and Andrew Rosemore and Mr. Lance Rosemore, see "Election of Directors" above.
MR. SALIT has been Executive Vice President of the Company since May
1993 and Chief Investment Officer since March 1994. Mr. Salit has also been
Executive Vice President of PMC
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Commercial since June 1993 and Chief Investment Officer and Assistant Secretary
since January 1994. From 1979 to 1992, Mr. Salit was employed by Glenfed
Financial Corporation and its predecessor company, Armco Financial Corporation,
a commercial finance company, holding various positions including Executive
Vice President and Chief Financial Officer.
MR. BERLIN has been Chief Financial Officer of the Company since
November 1992. Mr. Berlin has also been Chief Financial Officer of PMC
Commercial since June 1993. From August 1986 to November 1992, he was an audit
manager with Imber & Company, Certified Public Accountants. Mr. Berlin is a
certified public accountant.
MS. BROWNMILLER has been Senior Vice President of the Company since
1992 and Vice President of the Company since November 1989. Ms. Brownmiller
has also been Senior Vice President of PMC Commercial since June 1993. From
1987 to 1989, she was Vice President for Independence Mortgage, Inc., a Small
Business Association ("SBA") lender. From 1976 to 1987, Ms. Brownmiller was
employed by the SBA, holding various positions including senior loan officer.
Ms. Brownmiller is a certified public accountant.
MS. MURRAY has been General Counsel of the Company since March 1994.
Ms. Murray has also been General Counsel of PMC Commercial since March 1994.
From 1992 to 1994 she was associated with the law firm of Johnson & Gibbs, P.C.
and practiced in the financial services department. Ms. Murray earned her law
degree from Northwestern University School of Law.
MANAGEMENT COMPENSATION
The following table sets forth the aggregate amount of compensation
paid by the Company during 1996 to each of the three highest paid executive
officers and to all directors of the Company during fiscal year 1996.
<TABLE>
<CAPTION>
Total
Profit Sharing Total Profit Compensation
Capacities in Which Contribution Sharing Benefits Paid
Remuneration Aggregate Accrued During Accrued by Company
Name of Person Received Compensation (1) Last Fiscal Year (2) to Date to Directors
-------------- -------- ---------------- -------------------- ------- ------------
<S> <C> <C> <C> <C> <C>
Dr. Fredric M. Rosemore Chairman of Board $213,610 $14,970 $177,534
Mr. Lance B. Rosemore President, Chief 369,887 18,662 184,372
Executive Officer
Dr. Andrew S. Rosemore Executive Vice 329,481 18,662 149,113
President, Chief
Operating Officer
Dr. Irvin M. Borish Director $1,500
Mr. Thomas Hamill Director 1,500
Mr. Barry A. Imber Director 2,500
Dr. Martha R. Greenberg Director 2,000
Mr. Robert Diamond Director 2,000
Mr. Lee Ruwitch Director 1,500
- -------------------
</TABLE>
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(1) The Company has determined that the amount of perquisites and other
personal benefits paid to each of the executive officers listed in the
compensation table does not exceed the lesser of $50,000 or 10% of
each such person's annual salary and bonus reported in such table and
that the aggregate amount of perquisites and other personal benefits
paid to all executive officers and directors as a group does not
exceed the lesser of 10% of all such person's annual salary and bonus
or $650,000 ($50,000 multiplied by 13, the number of executive
officers and directors). Accordingly, none of such perquisites and
other personal benefits is included in the above table.
(2) The participants in the Company's profit sharing plan (the "Plan")
consist of all employees who are at least 20-1/2 years old, have been
employed by the Company for six months and are employed at the end of
each fiscal year or have died, become totally disabled or retired
after age 65 during such fiscal year. The Plan is intended to qualify
under Section 401(a) of the Internal Revenue Code of 1986, as amended.
A required distribution of $19,597.00 was paid to Dr. Fredric M.
Rosemore. No monies were withdrawn from the Plan during 1996 for the
benefit of Mr. Lance B. Rosemore or Dr. Andrew S. Rosemore. Mr. Lance
B. Rosemore and Dr. Fredric M. Rosemore are co-administrators of the
Plan.
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with Fredric M.
Rosemore, Lance B. Rosemore, Andrew S. Rosemore, Jan F. Salit, Barry N. Berlin
and Mary J. Brownmiller. Each of these employment agreements provides for at
least annual reviews by the Board of Directors or executive management of the
salaries contained therein. In addition, the Board of Directors may determine,
in its discretion, to award bonuses to each of the foregoing persons based on
the Company's performance. Each of the employment agreements also provides
that if a new board of directors of the Company is put in place, as a result of
the acquisition of the Common Stock by an outside party or otherwise, and such
new board requests the covered executive to resign or substantially modifies
the duties or working conditions of the executive, the executive could resign
and be entitled to be paid by the Company an amount equal to 2.99 times the
average compensation paid to the executive over the last five years.
II. ADOPTION AND APPROVAL OF THE PLANS
GENERAL
Subject to shareholder approval, the Company has established the PMC
Capital, Inc. 1997 Employee Stock Option Plan (the "Employee Plan"), which
provides for the grant of incentive and non-qualified stock options (the
"Options"), and the PMC Capital, Inc. 1997 Director Stock Option Plan (the
"Director Plan" and, together with the Employee Plan, the "Stock Option
Plans"), which provides for the grant of non-qualified Options. The number of
shares of Common Stock available for issuance under the Stock Option Plans is
equal to an aggregate of 6% of the total number of shares of Common Stock
outstanding at any time (at March 31, 1997 the number of shares of Common Stock
issuable under the Stock Option Plans would have been 676,581). The number of
shares of Common Stock issuable under each Stock Option Plan will be at the
discretion of the Committee (as defined below).
The following is a summary of certain provisions of the Stock Option
Plans and does not purport to be complete. The summary is qualified in its
entirety by reference to the Employee Plan
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and the Director Plan, which Stock Option Plans will be made available to any
shareholder upon their request.
ADMINISTRATION
The Stock Option Plans are administered by a committee consisting of
not fewer than two "non-employee" directors, as designated by the Board of
Directors (the "Committee"). Membership on the Committee is subject to such
limitations as are necessary to permit transactions in the shares of Common
Stock pursuant to the Stock Option Plans to be exempt under Section 16(b) of
the Securities Exchange Act of 1934, as amended, pursuant to Rule 16b-3
thereunder. The Board of Directors may remove from, add members to or fill
vacancies of the Committee. Subject to the express provisions of the Stock
Option Plans, the Committee has the authority to, in its sole discretion,
interpret the provisions of the Stock Option Plans and, subject to the
requirements of applicable law, including Rule 16b-3, to prescribe, amend and
rescind rules and regulations relating to the Stock Option Plans as the
Committee deems necessary and advisable. All decisions made by the Committee
pursuant to the provisions of the Stock Option Plans shall be final, conclusive
and binding on all persons, including the Company, its shareholders, the Board
of Directors, employees and the plan participants.
SHARES AVAILABLE FOR OPTIONS
Subject to adjustment (described below under the caption "Adjustments
Upon Certain Changes"), authorized and issued or unissued shares of Common
Stock held as treasury shares may be offered to eligible persons pursuant to
the exercise of Options granted under the Employee Plan. An aggregate of six
percent (6%) of the shares of Common Stock outstanding at any time have been
reserved for issuance under the Stock Option Plans. If an Option lapses or
terminates without having been fully exercised, the shares of Common Stock
subject to any such Option may then be available for purposes of the applicable
Plan.
As of March 31, 1997, there were no Options outstanding under the
Employee Plan or the Director Plan.
OPTIONS
The Committee has the authority under the Employee Plan to determine
the terms of Options granted under the Employee Plan, including, among other
things, the individuals who shall receive Options, whether an incentive Option
("ISO") or non-qualified Option shall be granted and the number of shares of
Common Stock subject to each Option. The exercise price and term of each
Option are fixed by the Committee; provided, however, that the term of the
Option shall not exceed five years and provided further that no ISO may be
granted to any employee who, at the time of grant, owns, directly or
indirectly, shares possessing more than 10% of the total combined voting power
of all classes of shares of the Company or any of its subsidiaries unless the
exercise price of the ISO is at least 110% of the Fair Market Value (as defined
in the Employee Plan) of the shares of Common Stock on the date of grant. With
respect to any individual, the aggregate market price (determined at the time
the Option is granted) of shares of Common Stock with respect to which
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<PAGE> 12
ISOs may be granted under the Employee Plan, or any other plan of the Company
or any subsidiary, which ISOs are exercisable for the first time during any
calendar year, may not exceed $100,000.
Each non-employee director shall be granted an Option to purchase
2,000 shares on the first June 1st following the effective date of the Director
Plan, and each newly elected non-employee director shall be granted an Option
to acquire 2,000 shares on the first June 1st following his or her election to
the Board of Directors of the Company. Additional Options to purchase 1,000
shares each June 1st thereafter shall be granted to each non-employee Director
so long as such non-employee director is a director of the Company on such
date.
ADJUSTMENTS UPON CERTAIN CHANGES
In order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Stock Option Plans,
in the event of a dividend or other distribution (whether in the form of cash,
shares of Common Stock or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of shares of Common Stock or other
securities, the issuance of warrants or other rights to purchase shares of
Common Stock or other securities or other similar corporate transactions, the
Committee shall, in such manner as the Committee may deem equitable, adjust any
of (i) the number and types of shares of Common Stock that thereafter may be
made subject to Options, (ii) the number and type of shares of Common Stock
subject to outstanding Options and (iii) the grant or exercise price with
respect to any Option or, if deemed appropriate, make provision for a cash
payment to the holder of any outstanding Option.
PERSONS WHO MAY PARTICIPATE IN THE PLANS
Officers (including directors) and key employees in the Company and
directors, officers and key employees of the Company's subsidiaries are
eligible for selection to participate in the Employee Plan upon approval by the
Committee and non-employee directors participate automatically in the Director
Plan.
ACQUISITION OF SHARES PURSUANT TO THE PLANS AND PAYMENT FOR SHARES OFFERED
Each Option granted under the Stock Option Plans is made at a price
and on the terms and conditions contained in the Option agreement entered into
between the Company and the Option holder.
PERIODS DURING WHICH OPTIONS WILL BE EXERCISED OR RECEIVED. The term
of each Option shall be a period of not more than five years from the date of
grant and is subject to earlier termination as hereinafter provided. Each
Option will be exercisable in one or more installments commencing not earlier
than the first anniversary of the grant date thereof.
FORFEITURE OR TERMINATION OF OPTIONS. In the event of the termination
of a director or an employee of the Company for any reason (other than death or
disability as provided below), any Option then outstanding under either Stock
Option Plan shall be deemed cancelled and terminated
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<PAGE> 13
on the date following the thirty-day period commencing on the date of such
termination, unless the Option is earlier terminated pursuant to its terms;
provided, however, if such termination is attributable to fraud, embezzlement,
theft or other misconduct injurious to the Company or its subsidiaries or
affiliates (such determination to be made by the Committee in its sole
discretion) any Option not previously exercised or expired shall be deemed
cancelled and terminated as of the date of such termination.
In the event that an Option holder dies while employed by the Company
or during his term as a director of the Company, any Option granted to him not
previously expired or exercised shall, to the extent exercisable on the date of
death, be exercisable by the estate of such Option holder or any person who
acquired such Option by bequest or inheritance, at any time within thirty days
after the death of the option holder, unless the Option is earlier terminated
pursuant to its terms. In the event an Option holder is terminated by the
Company or any of its subsidiaries or affiliates as an employee or as a
director due to "total disability" (as defined in the Stock Option Plans), the
Option holder or his guardian or legal representative shall have the
unqualified right to exercise any Options which the Option holder is eligible
to exercise as of the first date of total disability (as determined by the
Committee) at any time within thirty days after such termination, unless the
Option is earlier terminated pursuant to its terms.
EXERCISE PRICE AND MANNER OF PAYMENT. The purchase price of the
shares of Common Stock covered by each Option is determined by the Committee
and set forth in the Option agreement entered into between the Company and the
Option holder. The stated purchase price of any shares of Common Stock to be
acquired pursuant to exercise of an Option may not be less than 100% of the
Fair Market Value of such shares of Common Stock on the date of grant of such
Option. Options granted under the Stock Option Plans shall be exercised by the
grantee thereof (or by his or her executors, administrators, guardians or legal
representatives, as provided in the Stock Option Plans) as to all or part of
the shares of Common Stock covered thereby, by written notice of the exercise
to the Company, specifying the number of shares of Common Stock to be
purchased, accompanied by payment of the full purchase price for the shares of
Common Stock being purchased. Payment of such purchase price shall be made
within five business days following the date of exercise and shall be made (i)
in cash or by certified check or bank check, (ii) with the consent of the
Committee, by tendering previously acquired shares of Common Stock (valued at
their Fair Market Value, as determined by the Committee as of the date of
tender) or (iii) with the consent of the Committee, any combination of (i) and
(ii); provided, however, that payment may not be made pursuant to (ii) above
unless the Option holder shall have owned the shares of Common Stock tendered
in payment for a period of at least six months prior to the date of exercise of
the Option.
The Company shall notify the Option holder of any income tax reporting
requirements arising as a result of the exercise of an Option. The Company
shall have the right to require such Option holder to pay such withholding
taxes. If the Option holder shall fail to make such tax payments as are
required, 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 such Option
holder, or to take such other action as may be necessary to satisfy such
withholding obligations.
11
<PAGE> 14
AMENDMENT
The Stock Option Plans may be altered, suspended or terminated by the
Board of Directors at any time, provided that the Board of Directors may not
amend the Stock Option Plans in any manner that would result in noncompliance
with Rule 16b-3 or any applicable law.
TAX EFFECTS OF PARTICIPATION IN THE STOCK OPTION PLANS
Under present law, the Federal income tax treatment of Options granted
under the Stock Option Plans should be generally as described below.
An Option holder will realize no taxable income at the time an Option
is granted under the Stock Option Plans.
With regard to ISOs, no income will be recognized by an Option holder
upon transfer to him or her of shares of Common Stock pursuant to his or her
exercise of an ISO. In order to avail himself or herself of this tax benefit,
the Option holder must make no disposition of the shares of Common Stock so
received before he or she has held such shares of Common Stock for at least one
year and at least two years have passed since he or she was granted the Option.
Assuming compliance with this and other applicable tax provisions, an Option
holder will realize long-term capital gain or loss when he or she disposes of
his or her shares of Common Stock, measured by the difference between the
exercise price of the Option and the amount received for the shares of Common
Stock at the time of disposition. If the Option holder disposes of shares of
Common Stock acquired by exercise of the Option before the expiration of the
above-noted periods, any amount realized from such disqualifying disposition
will be taxable at such time as follows: (i) as ordinary income in the year of
disposition to the extent of the difference between the Option exercise price
and the lesser of: (a) the Fair Market Value of the shares of Common Stock on
the date the Option was exercised or (b) the amount realized upon such
disposition and (ii) as long or short-term capital gain, depending upon the
holding period of the shares of Common Stock, to the extent of any excess. If
the amount realized upon such disposition is less than the exercise price, the
loss will be treated as long or short-term capital loss, depending upon the
holding period of the shares of Common Stock.
With regard to non-qualified Options, ordinary income will be realized
by the Option holder at the time of his or her exercise of an Option. The
amount of income will be equal to the difference between the exercise price of
the Option and the Fair Market Value of the shares of Common Stock on the date
of exercise. When an Option holder disposes of shares of Common Stock acquired
upon the exercise of the Option, any amount received in excess of the Fair
Market Value of the shares of Common Stock on the date of exercise will be
treated as long or short-term capital gain, depending upon the holding period
of the shares of Common Stock, and if the amount received is less than the Fair
Market Value of the shares of Common Stock on the date of exercise the loss
will be treated as long or short-term capital loss, depending upon the holding
period of the shares of Common Stock.
No deduction will be allowed to the Company for Federal income tax
purposes at the time of the grant or exercise of an ISO. At the time of a
disqualifying disposition by an ISO holder, the Company will be entitled to a
tax deduction (as compensation) for the amount taxable to the ISO
12
<PAGE> 15
holder as ordinary income. The Company will be entitled to a deduction for
Federal income tax purposes at the same time and in the same amount as the
employee is considered to have realized ordinary income in connection with the
exercise of a nonqualified Option.
As described above, the employee directors, officers and key employees
of the Company who will receive Options under the Employee Plan and the number
of the Options are generally to be determined by the Committee in its
discretion. Thus, it is not possible either to predict the benefits or amounts
that will be received by or allocated to particular individuals or groups of
employees or to determine the benefits or amounts that would have been received
or allocated to such persons for under the Employee Plan, as amended. Grants
of Options under the Director Plan are made automatically each June 1 to each
person who is a non-employee member of the Board of Directors on such date. See
"Options" above.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ADOPTION AND
APPROVAL OF THE PLANS.
III. RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
At a meeting held on December 14, 1997, the Board of Directors,
including a majority of the directors who are not "interested persons" (as
defined in the Investment Company Act) of the Company, selected Coopers &
Lybrand L.L.P. as the independent public accountants of the Company for the
year ending December 31, 1997, and such selection is submitted to the
shareholders of the Company for ratification. Coopers & Lybrand L.L.P. will
perform the audit of the Company's financial statements and prepare the
Company's tax returns. Representatives of Coopers & Lybrand L.L.P. will be in
attendance at the Annual Meeting, will have the opportunity to make a statement
if they desire to do so and will be available to respond to appropriate
shareholder questions.
THE BOARD OF DIRECTORS RECOMMENDS THE RATIFICATION OF COOPERS &
LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
13
<PAGE> 16
INFORMATION AS TO SHARE OWNERSHIP
On March 31, 1997, the Company had outstanding 11,276,355 shares of
Common Stock. The table below lists, as of the same date, certain information
regarding the beneficial ownership of the Company's Common Stock by all persons
who are known by the Company to be the beneficial owners of more than 5% of the
Common Stock, the directors, the executive officers and by all executive
officers and directors as a group.
<TABLE>
<CAPTION>
Names and Addresses Amount and Nature of Percent of
of Beneficial Owners Beneficial Ownership Ownership
-------------------- ---------------------- ----------
<S> <C> <C>
Dr. Irvin M. Borish (1) 135,000 1.2%
4000 Hollywood Blvd.
Suite 435 South
Hollywood, Florida 33021
Mr. Robert Diamond (2) 353,935 3.1%
4000 Hollywood Blvd.
Suite 435 South
Hollywood, Florida 33021
Dr. Martha R. Greenberg *(3) 518,057 4.6%
P.O. Box 1177
Russellville, Alabama 35653
Mr. Thomas Hamill (4) 5,000 **
4000 Hollywood Blvd.
Suite 435 South
Hollywood, Florida 33021
Mr. Barry A. Imber - **
4000 Hollywood Blvd.
Suite 435 South
Hollywood, Florida 33021
Dr. Andrew S. Rosemore *(5) 773,417 6.9%
17290 Preston Road, 3rd Floor
Dallas, Texas 75252
Dr. Fredric M. Rosemore *(6) 565,637 5.0%
4000 Hollywood Blvd.
Suite 435 South
Hollywood, Florida 33021
Mrs. Marion Rosemore (7) 565,637 5.0%
4000 Hollywood Blvd.
Suite 435 South
Hollywood, Florida 33021
Mr. Lance B. Rosemore *(8) 221,957 2.0%
17290 Preston Road, 3rd Floor
Dallas, Texas 75252
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
Names and Addresses Amount and Nature of Percent of
of Beneficial Owners Beneficial Ownership Ownership
-------------------- ---------------------- ---------
<S> <C> <C>
Mr. Lee Ruwitch (9) 401,401 3.6%
4000 Hollywood Blvd.
Suite 435 South
Hollywood, Florida 33021
Mr. Jan F. Salit (10) 658 **
17290 Preston Road, 3rd Floor
Dallas, Texas 75252
Mr. Barry N. Berlin 227 **
17290 Preston Road, 3rd Floor
Dallas, Texas 75252
Ms. Mary J. Brownmiller 2,110 **
17290 Preston Road, 3rd Floor
Dallas, Texas 75252
Ms. Cheryl T. Murray 200 **
17290 Preston Road, 3rd Floor
Dallas, TX 75252
Directors and executive officers 2,977,599 26.4%
as a group (13 persons)
</TABLE>
______________________
(1) Includes 44,500 shares held jointly with his wife and 90,500 shares
held in the Irvin B. Borish Revocable Trust.
(2) Includes 179,691 shares held in an individual retirement rollover
account.
(3) Includes 15,730 shares in which her children have a beneficial
interest, 31,400 shares held in an individual retirement account,
127,500 shares held jointly with her husband and 126,767 shares held
in a pension trust. Does not include 225,660 shares owned by her
husband, as to which shares she disclaims any beneficial interest.
(4) Does not include 321,000 shares held by two companies of which Mr.
Hamill is a director, as to which shares he disclaims any beneficial
interest.
(5) Includes 368,332 shares held by a partnership of which Dr. Rosemore
and his wife are general partners, 17,550 shares held as custodian for
his children, 353,550 shares held in individual retirement accounts,
24,785 shares held in trust for the benefit of Dr. Rosemore and his
children and 9,200 shares held by a partnership for the benefit of Dr.
Rosemore and his children.
(6) Represents shares held by a partnership of which Dr. Fredric M.
Rosemore is a general partner.
(7) Represents shares held by a partnership of which Mrs. Marion Rosemore
is a general partner.
(8) Includes 2,537 shares in which his minor children have beneficial
interest, 142,989 shares held jointly with his wife, 10,756 shares
held in an individual retirement account, 26,095 shares held in trust
for the benefit of Mr.
15
<PAGE> 18
Rosemore and his children, 6,600 shares held by a partnership for the
benefit of Mr. Rosemore and his children and 3,560 shares owned
individually by Mr. Lance B. Rosemore's wife.
(9) Includes 5,625 shares held in the name of his wife, 114,567 shares
held in trust for the benefit of Mr. Ruwitch and 45,452 shares held by
a corporation controlled by Mr. Ruwitch and a pension plan thereof.
Does not include shares owned individually by other members of his
family, as to which shares he disclaims any beneficial interest.
(10) Consists of 658 shares held in an individual retirement account.
* Mr. Lance B. Rosemore and Dr. Andrew S. Rosemore are the sons, and
Dr. Martha R. Greenberg is the daughter, of Dr. Fredric M. Rosemore
and Mrs. Marion Rosemore. Dr. Fredric M. Rosemore, Mrs. Marion
Rosemore and Dr. Andrew S. Rosemore each own in excess of 5% of the
shares of the Company. Consequently, all such persons may be deemed
to be "interested persons" as defined under the Investment Company
Act.
** Less than 1.0%
CERTAIN AFFILIATED TRANSACTIONS
A corporation controlled by certain of the executive officers and
directors of the Company owns the office building at 17290 Preston Road,
Dallas, Texas, in which the Company leases approximately 12,400 square feet of
space. A substantial portion of the Company's space under the lease (10,693
square feet) was leased on November 23, 1991 and is currently rented at
$148,192 per year. The lease expires in 2006. Management believes that these
terms are no less favorable to the Company than those which the Company could
obtain in an unaffiliated transaction. On August 4, 1992, such lease was
amended to allow the Company to terminate such lease without the penalty upon
60 days written notice to the landlord. The decision whether or not the
Company will continue the lease will be made by the Independent Directors
Committee on an annual basis.
PROPOSALS OF SHAREHOLDERS
Proposals of shareholders that are intended by such persons to be
presented at the 1998 Annual Meeting of Shareholders of the Company and to be
included in the Company's proxy statement and form of proxy relating to such
meeting must be received by the Company not later than December 19, 1997.
Shareholder proposals will be presented at the 1997 Annual Meeting of
Shareholders only to the extent that such proposals meet certain guidelines
established under federal securities laws. Proposals should be sent to Mr.
Lance B. Rosemore, Secretary, 17290 Preston Road, 3rd Floor, Dallas, Texas
75252.
16
<PAGE> 19
COSTS OF SOLICITATION
The cost of soliciting proxies will be borne by the Company. The
Company may request banks, brokerage house and other custodians, nominees and
fiduciaries to forward copies of the proxy materials to beneficial holders of
the shares, or to request authority for the execution of the proxies, and the
Company may reimburse such banks, brokerage house and other custodians,
nominees and fiduciaries for their out-of-pocket expenses incurred in
connection therewith. In addition to solicitations by mail, officers of the
Company may, without extra remuneration, make supplementary solicitations of
proxies personally or by telephone, telegram or cable.
OTHER MATTERS
Management of the Company is not aware of any other matters to be
presented for action at the Annual Meeting; however, if any such matters are
properly presented for action, it is the intention of the persons named in the
enclosed form of proxy to act in accordance with their best judgment on such
matters. It is important that proxies be returned promptly to avoid
unnecessary expense. Shareholders are urged, regardless of their number of
shares of Common Stock, to date, sign and return the enclosed proxy. The
Company's Annual Report to Shareholders is being distributed along with this
Proxy Statement. If you do not receive a copy of the Annual Report, please
contact the Company's Investor Relations Department at (972) 380-0044 and one
will be provided to you.
By Order of the Board of Directors
April 7, 1997 LANCE B. ROSEMORE
Secretary
17
<PAGE> 20
REVOCABLE PROXY
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
OF PMC CAPITAL, INC.
The undersigned hereby appoint(s) Barry N. Berlin and Jan F. Salit, or
either of them, with full power of substitution and resubstitution, proxies of
the undersigned, with all the powers that the undersigned would possess if
personally present, to cast all votes which the undersigned would be entitled
to cast at the Annual Meeting of Shareholders (the "Annual Meeting") of PMC
Capital, Inc. (the "Company") to be held on Wednesday, May 14, 1997, at the
offices of the Company, 17290 Preston Road, 3rd Floor, Dallas, Texas,
commencing at 9:30 a.m., local time, and any and all adjournments thereof,
including (without limiting the generality of the foregoing) to vote and
act as follows:
(CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE)
<PAGE> 21
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF SHAREHOLDERS
PMC CAPITAL, INC.
MAY 14, 1997
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
- ------------------------------------------------------------------------------
A [X] Please mark your
votes as in this
example.
1. ELECTION OF DIRECTORS
[ ] FOR the nominees
listed at right Nominees: Dr. Fredric M. Rosemore
(except as indicated
to the contrary) Mr. Lance B. Rosemore
[ ] WITHHOLD Dr. Andrew S. Rosemore
AUTHORITY
to vote for the
nominees listed at right
Instruction: To withhold authority to vote for any individual
nominee(s), write the nominee(s) name:
---------------------------------------------------
---------------------------------------------------
2. Proposal to adopt and approve the Company's
1997 Director Stock Option Plan and 1997
Employee Stock Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to ratify the appointment of Coopers &
Lybrand L.L.P. as independent public accountants
of the Company for the fiscal year ending
December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
THIS PROXY WILL BE VOTED AT THE ANNUAL MEETING OR ANY ADJOURNMENT THEREBY IN
ACCORDANCE WITH THE INSTRUCTIONS SET FORTH ABOVE OR, IN THE EVENT NO
INSTRUCTIONS ARE SET FORTH, THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES
FOR DIRECTOR AND FOR PROPOSALS 2 AND 3. THIS PROXY HEREBY REVOKES ALL PRIOR
PROXIES GIVEN WITH RESPECT TO THE SHARES OF THE UNDERSIGNED.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR EACH
OF THE NOMINEES FOR DIRECTOR AND FOR PROPOSALS 2 AND 3. ACCORDINGLY, PLEASE
COMPLETE, SIGN, DATE AND RETURN THIS PROXY IN THE ENVELOPE PROVIDED FOR SUCH
PURPOSE. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES.
Signature(s) Dated:
----------------------------------------- -------------------
Important: Please date this proxy and sign exactly as your name appears
above. If shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator, trustee or
guardian, please give title as such. If a corporation, please
sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by
authorized person.
