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): 10-17-2002
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Primecore Mortgage Trust, Inc.
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(Exact name of registrant as specified in its charter)
Maryland 0-30507 94-3324992
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
99 El Camino Real, Menlo Park, CA 94025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (650) 328-3060
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N/A
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(Former name or former address, if changed since last report)
Item 5. Other Events and Regulation FD Disclosure.
On October 17, 2002, our Board of Directors met to decide on means
of addressing a number of matters, including the impact on the Company of the
economic downturn over the past year. The meeting followed several prior
meetings of the Board during which the Board considered alternatives for dealing
with the economic downturn. At the meeting, the following matters were resolved
by the Board:
1. The Board voted to adjust our monthly cash distribution to
shareholders from $0.0875 per share to $0.0583 per share beginning with
distributions declared in October 2002 and paid in November 2002. In adjusting
the distribution, the Board considered the following factors: the economy over
the past year; prospects for a quick turnaround in the economy; the economic
uncertainties arising from world events; and the San Francisco Bay Area real
estate market conditions and its actual and potential impact on our loan
portfolio. The Board also considered the needs of shareholders when setting the
distribution rate, recognizing the desires of shareholders to receive monthly
distributions and also recognizing that distributions at the specified rate will
result in a return of capital to shareholders since the distributions will
exceed income. The Board will continue to review and reassess the distribution
policy as new information becomes available.
2. The Board, acting by the vote of its directors independent of
management, with all management directors abstaining, voted to concurrently
enter into: (a) an amended and restated Management Agreement with our manager,
Primecore Funding Group, Inc. ("PFG") and (b) an agreement regarding loans made
to affiliates. The principal amendments to the Management Agreement are: (a) a
change in the method of determining the management fee, whereby the management
fee is more closely tied to performance of the Company, with the base fee being
reduced, and with bonuses tied to certain cash flow and income per share
performance criteria; and (b) a change in favor of the Company in the fee
payable upon termination. The principal terms of the affiliate loan agreement,
which sets forth all obligations relating to loans previously made to affiliated
entities, are: (a) ownership of all properties secured by "Affiliate Loans"
shall be transferred to the Company; (b) PFG has agreed to pay, and has paid to
the Company, the remaining carrying amount, in accordance with generally
accepted accounting principles, of loans made to Eprime, Inc., an affiliate; and
(c) PFG has agreed to pay the Company over time the difference, if any, between
the appraised values of the properties transferred, and the carrying amounts, in
accordance with generally accepted accounting principles, of the loans securing
such properties.
This filing may contain forward-looking statements. These statements
relate to future events or our future financial performance. In some cases, one
can identify forward-looking statements by terminology. For example, "may",
"will", "should", "expect", "plan", "anticipate", "believe", "estimate",
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"predict", "potential" or "continue", or the negative of these terms or other
comparable terminology, indicate forward-looking statements. These statements
are only predictions. Actual events or results may differ materially. In
evaluating these statements, an investor should specifically consider various
factors, including the risks outlined in the Risk Factors section of the Form
10-K filing of the Company, filed on or about March 20, 2002. These factors may
cause our actual results to differ materially from any forward-looking
statement.
Although we believe the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. We will not update any of the
forward-looking statements after the date of this filing to conform them to
actual results or to changes in our expectations that occur after the date of
this filing, other than as required by law.
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.
Primecore Mortgage Trust, Inc.
Dated: October 17, 2002 /s/ MICHAEL RIDER
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Michael Rider,
Chief Financial Officer
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