UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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-12
PERFORMANCE CAPITAL MANAGEMENT, LLC
----------------------------------------------------
(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)(1) 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:
----------------------------------------------------------
4) Date Filed:
------------------------------------------------------------
PERFORMANCE CAPITAL MANAGEMENT, LLC
222 South Harbor Blvd., Suite 400
Anaheim, California 92805
- --------------------------------------------------------------------------------
NOTICE OF 2005 ANNUAL MEETING OF MEMBERS
TO BE HELD ON JUNE 13, 2005
- --------------------------------------------------------------------------------
To our Members:
NOTICE IS HEREBY GIVEN that the 2005 Annual Meeting of Members of Performance
Capital Management, LLC, a California limited liability company, will be held on
Monday, June 13, 2005, at 10:00 a.m., local time, at the Double Tree Hotel, 100
City Drive, Orange, California 92868. The purposes of the Annual Meeting are:
1. To elect four Class II directors to serve a two-year term and until
each director's successor has been duly elected and qualified;
2. To ratify the selection of Moore Stephens Wurth Frazer and Torbet,
LLP, as independent auditors for Performance Capital Management, LLC
for the fiscal year ending December 31, 2005; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy Statement
accompanying this Notice. Members of record on the books of Performance Capital
Management, LLC at the close of business on FRIDAY, APRIL 15, 2005, will be
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof.
ALL MEMBERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON, BUT
EVEN IF YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING, YOU ARE REQUESTED TO
MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN
THE ENVELOPE PROVIDED TO ENSURE YOUR REPRESENTATION. MEMBERS ATTENDING THE
ANNUAL MEETING MAY VOTE IN PERSON EVEN IF THEY HAVE PREVIOUSLY VOTED BY PROXY.
By Order of the Board of Directors,
William D. Constantino
Chief Officer of Legal Affairs
Anaheim, California
May 2, 2005
[PCMLLC LETTERHEAD]
May 2, 2005
Dear Member:
You are cordially invited to attend the 2005 Annual Meeting of Members of
Performance Capital Management, LLC, which will be held at the Double Tree
Hotel, 100 City Drive, Orange, California 92868, on Monday, June 13, 2005, at
10:00 a.m., local time.
The Notice of the 2005 Annual Meeting of Members and a Proxy Statement,
which describe the formal business to be conducted at the meeting, accompany
this letter. Our 2004 Annual Report is also enclosed for your information.
All Members entitled to vote are invited to attend the Annual Meeting.
However, to ensure your representation at the Annual Meeting, you are urged to
complete, date, sign and return the enclosed Proxy Card (a postage-prepaid
envelope is enclosed for that purpose).
YOUR LLC UNITS CANNOT BE VOTED UNLESS YOU DATE, SIGN AND RETURN THE
ENCLOSED PROXY CARD OR ATTEND THE ANNUAL MEETING IN PERSON. Regardless of the
number of LLC Units you own, your careful consideration of, and vote upon, the
matters before the Members are important.
I look forward very much to seeing you on June 13th.
Sincerely,
PERFORMANCE CAPITAL MANAGEMENT, LLC
David J. Caldwell
Chief Operations Officer
PERFORMANCE CAPITAL MANAGEMENT, LLC
222 SOUTH HARBOR BLVD., SUITE 400
ANAHEIM, CALIFORNIA 92805
- --------------------------------------------------------------------------------
PROXY STATEMENT
ANNUAL MEETING OF MEMBERS TO BE HELD ON MONDAY, JUNE 13, 2005
- --------------------------------------------------------------------------------
GENERAL
This Proxy Statement is furnished to the Members of Performance Capital
Management, LLC, a California limited liability company, in connection with the
solicitation of proxies by the Board of Directors of Performance Capital
Management, LLC (also referred to as the "Board"). The proxies are to be voted
at the 2005 Annual Meeting of Members of Performance Capital Management, LLC
(the "Annual Meeting") to be held at the Double Tree Hotel, 100 City Drive,
Orange, California 92868, at 10:00 a.m., local time, on Monday, June 13, 2005,
and any adjournment or postponement thereof, for the purposes set forth in the
accompanying Notice. The Board is not aware of any other matters to be presented
at the Annual Meeting. If any other matter should be presented at the Annual
Meeting upon which a vote properly may be taken, LLC Units represented by all
duly executed proxies received by the Board will be voted with respect thereto
in accordance with the best judgment of the persons designated as the proxies.
This Proxy Statement and the accompanying form of Proxy Card have been mailed to
Members on or about May 2, 2005.
Our principal executive offices are located at 222 South Harbor Blvd., Suite
400, Anaheim, California, 92805 and our telephone number is 714.502.3736.
We will pay all costs of solicitation, including the costs of preparing,
assembling, printing and mailing this Proxy Statement, the Proxy Card and any
additional information furnished to Members. If our tracking of responses to our
solicitation reveals a risk that we may not obtain sufficient proxies to have a
quorum present at the Annual Meeting, we may have either our employees or
temporary employees contact Members directly to remind them to execute their
proxy cards and return them to us. No additional compensation will be paid to
directors, officers or other regular employees for their services in connection
with this proxy solicitation.
ANNUAL REPORT
An Annual Report to Members (the "Annual Report"), containing audited financial
statements for the year ended December 31, 2004, accompanies this Proxy
Statement. Members are referred to the Annual Report for financial and other
information about the activities of Performance Capital Management, LLC. The
Annual Report is not incorporated by reference into this Proxy Statement and is
not deemed to be a part hereof.
UPON WRITTEN REQUEST, WE WILL FURNISH TO YOU, WITHOUT CHARGE, A COPY OF OUR
ANNUAL REPORT ON FORM 10-KSB FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
REQUESTS FOR COPIES OF THE FORM 10-KSB SHOULD BE DIRECTED TO HARVEY "BUD" WEBB,
MEMBER RELATIONS, AT PERFORMANCE CAPITAL MANAGEMENT, LLC'S PRINCIPAL ADDRESS AT
222 SOUTH HARBOR BLVD., SUITE 400, ANAHEIM, CALIFORNIA, 92805. IN THE
ALTERNATIVE, YOU MAY FIND THE FORM 10-KSB ON THE SECURITIES AND EXCHANGE
COMMISSION'S WEB-SITE AT WWW.SEC.GOV.
1
RECORD DATE AND VOTING RIGHTS
Only holders of record of our voting LLC Units at the close of business on April
15, 2005 (the "Record Date") will be entitled to notice of, and to vote at, the
Annual Meeting. On the Record Date, we had 563,926 voting LLC Units outstanding.
Each LLC Unit is entitled to one vote at the Annual Meeting.
The following table summarizes the voting requirements for the two proposals:
PROPOSAL VOTE REQUIRED
- --------------------------------------------------------------------------------------------------
Proposal No. 1: Election of four Class II For each nominee, the affirmative vote of a majority of
directors. the LLC Units held by Members present, in person or
by proxy, and entitled to vote at the Annual Meeting.
- --------------------------------------------------------------------------------------------------
Proposal No. 2: Ratification of our Audit The affirmative vote of a majority of the LLC Units
Committee's selection of Moore Stephens held by Members present, in person or by proxy, and
Wurth Frazer and Torbet, LLP as the entitled to vote at the Annual Meeting.
company's auditors for fiscal year ending
December 31, 2005.
- --------------------------------------------------------------------------------------------------
QUORUM
Members present in person or by proxy whose aggregate number of voting LLC Units
exceed one-third of our issued and outstanding voting LLC Units constitute a
quorum for the transaction of business at the Annual Meeting. Abstentions will
be included in determining the presence of a quorum at the Annual Meeting.
However, an abstention will count as a vote AGAINST the proposal.
LIST OF MEMBERS ENTITLED TO VOTE
At least 10 days before the Annual Meeting, our Chief Officer of Legal Affairs
will make a complete list of the Members entitled to vote at the Annual Meeting
arranged in alphabetical order, with the address of and number of LLC Units held
by each Member. The list will be kept on file at the principal offices of
Performance Capital Management, LLC and will be subject to inspection by any
Member at any time during normal business hours. The list will also be present
for inspection at the Annual Meeting.
ATTENDANCE AND VOTING AT THE ANNUAL MEETING
If you own voting LLC Units of record, you may attend the Annual Meeting and
vote in person, regardless of whether you have previously voted on a Proxy Card.
We encourage you to vote your units in advance of the Annual Meeting date, even
if you plan on attending the Annual Meeting. You may change or revoke your proxy
at the Annual Meeting as described below even if you have already voted.
PROXY VOTING PROCEDURES
LLC Units for which Proxy Cards are properly executed and returned will be voted
at the Annual Meeting in accordance with the directions noted thereon or, in the
absence of directions, will be voted "FOR" the election of each of the nominees
to the Board of Directors, and "FOR" the ratification of our Audit Committee's
selection of Moore Stephens Wurth Frazer and Torbet, LLP as the company's
auditors for fiscal year ending December 31, 2005. It is not expected that any
matters other than those referred to in the Notice and this Proxy Statement will
be brought before the Annual Meeting. If, however, other matters are properly
presented, the persons named as proxies will vote in accordance with their
discretion with respect to such matters.
A Proxy Card for voting your LLC Units is included with this Proxy Statement.
YOU MAY VOTE YOUR LLC UNITS BY COMPLETING, SIGNING AND RETURNING THE PROXY CARD
IN THE ENCLOSED ENVELOPE.
2
REVOCATION
Any Member holding voting LLC Units of record may revoke a previously granted
proxy at any time before it is voted by delivering to our Chief Officer of Legal
Affairs a written notice of revocation or a duly executed Proxy Card bearing a
later date or by attending the Annual Meeting and voting in person.
DATE AND TIME OF OPENING AND CLOSING OF THE POLLS
The date and time of the opening of the polls for the Annual Meeting shall be
10:00 a.m., local time, on Monday, June 13, 2005. The time of the closing of the
polls for voting shall be announced at the Annual Meeting. No ballot, proxies or
votes, nor any revocations or changes to a vote, shall be accepted after the
closing of the polls unless a court of equity, upon application by a Member,
determines otherwise.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Our directors and executive officers do not have any substantial interest in the
matters to be acted upon at the Annual Meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To our knowledge, the following table sets forth information with respect to the
beneficial ownership of our securities as of April 15, 2005 by (i) each person
known by us to beneficially own more than 5% of our voting securities; (ii) each
of our executive officers; (iii) each of our directors; and (iv) all of our
executive officers and directors as a group. Beneficial ownership is determined
in accordance with the rules of the Securities and Exchange Commission and
includes voting or investment power with respect to the securities. Unless
otherwise indicated, the address for those listed below is c/o Performance
Capital Management, LLC, 222 South Harbor Blvd., Suite 400, Anaheim, California
92805. Subject to applicable community property laws, the persons named in the
table have sole voting power with respect to all LLC Units shown as beneficially
owned by them. The number of outstanding LLC Units entitled to vote as of April
15, 2005 was 563,926. Except as noted otherwise, the amounts reflected below are
based upon information provided to us and in filings with the Securities and
Exchange Commission.
- --------------------------------------------------------------------------------------
PERCENT OF
NAME OF BENEFICIAL OWNER NUMBER OF UNITS OUTSTANDING
- ------------------------------------------------------- --------------- ------------
Larisa Gadd, Co-Chairperson of the Board (1) 4,777 *
- ------------------------------------------------------- --------------- ------------
Lester T. Bishop, Co-Chairperson of the Board (2) 398 *
- ------------------------------------------------------- --------------- ------------
Larry C. Smith, Director (3) 995 *
- ------------------------------------------------------- --------------- ------------
David Barnhizer, Director (4) 1,094 *
- ------------------------------------------------------- --------------- ------------
Rodney Woodworth, Director 2,239 *
- ------------------------------------------------------- --------------- ------------
Sanford Lakoff, Director (5) 1,593 *
- ------------------------------------------------------- --------------- ------------
Donald W. Rutherford, Director 0 *
- ------------------------------------------------------- --------------- ------------
David J. Caldwell, Chief Operations Officer 0 *
- ------------------------------------------------------- --------------- ------------
Edward M. Rucker, Accounting Manager 0 *
- ------------------------------------------------------- --------------- ------------
Darren S. Bard, Chief Information Officer 0 *
- ------------------------------------------------------- --------------- ------------
William D. Constantino, Chief Officer of Legal Affairs 0 *
- ------------------------------------------------------- --------------- ------------
ALL EXECUTIVE OFFICERS & DIRECTORS AS A GROUP 11,096 1.97%
(11 Persons)
- --------------------------------------------------------------------------------------
* Less than 1%.
(1) The 4,777 Units are owned by the GADD FAMILY TRUST DTD 5/30/97, of
which Ms. Gadd and her husband are trustees.
(2) The 398 Units are owned jointly by Mr. Bishop and his wife.
3
(3) The 995 Units are owned by the TRUST COMPANY OF AMERICA, of which Mr.
Smith is trustee.
(4) The 1,094 Units are owned by RAINDANCE PARTNERSHIP COMPANY, of which
Mr. Barnhizer's wife is Managing Partner and Mr. Barnhizer is General
Counsel.
(5) The 1,593 Units are owned by the LAKOFF FAMILY TRUST 1/13/97, of which
Mr. Lakoff and his wife are trustees.
CHANGES IN CONTROL
No change in control of Performance Capital Management, LLC has occurred since
the beginning of 2004. We are not aware of any arrangement that would upset the
control mechanisms currently in place over the company. Although it is
conceivable that a third party could attempt a hostile takeover of Performance
Capital Management, LLC, we have not received notice of any such effort.
- --------------------------------------------------------------------------------
PROPOSAL NO. 1: ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
NOMINEES FOR THE BOARD OF DIRECTORS
Our Board of Directors has proposed that four nominees be elected at the Annual
Meeting, each of whom shall hold office for two years, as provided below, and
until his or her successor shall have been elected and qualified. Unless
otherwise instructed, it is the intention of the persons named as proxies on the
accompanying Proxy Card to vote LLC Units represented by properly executed
proxies for the election of such nominees. Although our Board anticipates that
the four nominees will be available to serve as directors of Performance Capital
Management, LLC, if any of them should be unwilling or unable to serve, it is
intended that the proxies will be voted for the election of such substitute
nominee or nominees as may be designated by our Board.
The following persons currently serve and have been nominated to continue to
serve as our directors. If elected, the term of office of these Class II
directors will expire at the second annual meeting of Members after their
election. Absent his or her death, resignation or removal, a director shall
continue to serve despite the expiration of the director's term until his or her
successor is elected and qualified or until there is a decrease in the number of
directors.
The following nominees for the Board of Directors will stand for election at the
2005 Annual Meeting:
Class II Directors:
------------------
- Lester T. Bishop
- Larry C. Smith
- David Barnhizer
- Sanford Lakoff
Biographical information regarding each of the nominees for the Board of
Directors is set forth below, beginning on page 5.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF THE CLASS
II DIRECTORS NAMED ABOVE.
4
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the name, age and position of each of our
directors (and nominees for election) and executive officers as of April 15,
2005.
NAME AGE POSITION
- ---------------------- --- --------
Larisa Gadd 42 Co-Chairperson of the Board *
Lester T. Bishop 72 Co-Chairperson of the Board / Nominee **
Larry C. Smith 67 Director / Nominee **
David Barnhizer 61 Director / Nominee **
Rodney Woodworth 67 Director *
Sanford Lakoff 73 Director / Nominee **
Donald W. Rutherford 65 Director *
David J. Caldwell 51 Chief Operations Officer
Edward M. Rucker 58 Accounting Manager
Darren S. Bard 37 Chief Information Officer
William D. Constantino 54 Chief Officer of Legal Affairs
* Class I Director
** Class II Director
All of the current directors except Mr. Rutherford were appointed to the Board
of Directors on February 4, 2002. Mr. Rutherford was appointed to the Board of
Directors on January 12, 2004, following the resignation of Mr. Robert Price in
July 2003. Our Operating Agreement currently provides that our two classes of
directors serve staggered two-year terms. All directors hold office until their
respective successors are elected and qualified or until their earlier death,
resignation or removal. The terms of our Class I Directors expire at our 2006
annual meeting. The terms of our Class II Directors expire at our 2005 Annual
Meeting, and, assuming their re-election, their new terms will expire at our
2007 annual meeting. Executive officers are duly elected by the Board of
Directors to serve until their respective successors are elected and qualified.
Our officers serve at the discretion of the Board of Directors. There are no
family relationships between or among any of our directors or executive
officers.
The following information with respect to the principal occupation or
employment, other affiliations and business experience during the last five
years of our directors and executive officers has been furnished to us by each
director and executive officer.
LARISA GADD. For a period of 16 years ending in 2004, Ms. Gadd was a business
partner at Scenic Express, Inc., in Los Angeles. Scenic Express fabricates
theatrical scenery for stage and screen. Ms. Gadd was also working on obtaining
a doctorate degree in Natural Health and Healing from Clayton College of Natural
Health. From 1987 to 1988, Ms. Gadd was an instructor at Chaffey College in Alta
Loma in the area of Social Sciences. She received a B.S. degree in Psychology
and English from the California State University, Fullerton in 1984 and a M.A.
degree in Organizational and Applied Social Psychology from Claremont Graduate
School in 1986.
LESTER T. BISHOP. Mr. Bishop has taught kindergarten through 12th grade
students for the past 20 years. At the same time, Mr. Bishop owned solely and in
partnership with others a number of privately held businesses, including Whitiok
Day Camp, Good Time Promotions, Mall Munchies, Park Riviera Motel, and Imperial
Executive Suites. He has also owned and managed both residential and commercial
real estate. Mr. Bishop received a B.A. degree in Education from the University
of California, Los Angeles in 1960 and a M.A. degree from the California State
University, Los Angeles in Educational Administration in 1965 with advanced
credentials in reading, counseling and teacher effectiveness.
LARRY C. SMITH. Mr. Smith retired in 1994. Prior to retirement, from 1987 to
1994, Mr. Smith was a Senior Systems Engineering Manager at TRW Space Systems.
In that position, Mr. Smith managed the systems engineering teams in support of
classified satellite space systems development and new satellite
5
system studies. Mr. Smith is a registered U.S. Patent Agent and holds three
patents. Mr. Smith received a B.S. degree in Engineering from the University of
Washington in 1959 and completed four years of graduate studies at the
University of California, Los Angeles in Control Systems and Electronics.
DAVID BARNHIZER. Mr. Barnhizer is currently Professor of Law at Cleveland State
University College of Law and has held that position since 1972. He teaches or
has taught courses dealing primarily with business and environmental law. From
1997 to 1998, he was a Strategic Consultant to the Government of Mongolia to the
Mongolian Action Programme for the 21st Century for British Petroleum (BP) and
Sovonics Solar Systems. During that same period, he was also a consultant on
sustainable economic development and the creation of a Central American trade
zone to the U.N. Development Program. From 1995 to 1997, he was a member of the
Board of Editors for the Journal of Legal Education and served as President of
the Board of Directors of the Fairmount Fine Arts Center. Mr. Barnhizer has
published nine books / manuals and approximately 40 professional articles. He
received a Bachelor of Arts degree from Muskingum College in 1966, a Juris
Doctor degree from Ohio State University College of Law in 1969, and a Master of
Law degree from Harvard Law School in 1972.
RODNEY WOODWORTH. Mr. Woodworth retired in 1998. From 1988 to 1998, Mr.
Woodworth was the Senior Vice President of Operations at Zimmerman Holdings,
Inc., which is in the business of buying troubled manufacturing businesses,
turning them around, growing them and then selling them. Prior to working at
Zimmerman Holdings, Inc., he was the Senior Vice President of Fairchild
Industries and President of its Commercial and Industrial Products Group. Mr.
Woodworth is an alumni of the Stanford Graduate Business School and received a
B.S. degree in Mechanical Engineering from the California State Polytechnical
University, San Luis Obispo in 1960.
SANFORD LAKOFF. Mr. Lakoff is Research Professor of Political Science Emeritus
at the University of California, San Diego. He has taught at UCSD since 1974,
when he was appointed Founding Chair of the Department of Political Science. Mr.
Lakoff has written or edited eleven books and published approximately 50
scholarly articles as well as contributing to entries in the Dictionary of the
History of Ideas, the Encyclopedia of Democracy, the Encyclopedia of U.S.
Foreign Relations, and the Encyclopedia of Nationalism. He received a B.A.
degree from Brandeis University in 1953. In 1959, he received his Ph.D. from
Harvard University.
DONALD W. RUTHERFORD. Mr. Rutherford is a limited partner with Tatum CFO
Partners, LLP in Orange County, California, which he joined in January 2000.
Since joining Tatum, Mr. Rutherford has served as Chief Administrative Officer
for a $100 million manufacturer and direct marketer of promotional products, as
CFO of Aspeon, Inc., a public technology products company, as CFO of LifePoint,
Inc., a public medical device company, and as interim CFO of Composite
Technology Corporation, a public developer of innovative applications of
composite materials. From 1995 to 1999, Mr. Rutherford served as Chief Financial
Officer of USGT Resources Inc., a natural gas marketer and asset manager. As a
key member of the management team, he had assisted the company from its starting
stages and was responsible for staffing and developing and implementing systems
and obtaining financing and credit to support a 300% growth over a four-year
period to $500 million in sales. Mr. Rutherford obtained his Chartered
Accountant degree from the Institute of Chartered Accountants in Canada in 1965
after obtaining a degree in industrial engineering from University of Toronto in
1962.
DAVID J. CALDWELL. Mr. Caldwell is a business operations professional with over
20 years of experience in the consumer credit card industry. Before becoming
Chief Operations Officer of Performance Capital Management, LLC on February 4,
2002, Mr. Caldwell was Chief Operating Officer of Performance Capital
Management, Inc., one of the predecessor companies to Performance Capital
Management, LLC, from January 1998 to February 2002. As Chief Operating Officer,
Mr. Caldwell is responsible for the operational activities of Performance
Capital Management, LLC, including management of a collection center and the
sales and acquisitions of charged-off portfolios as well as the day-to-day
operations of the business. From 1975 to 1998, Mr. Caldwell worked in various
capacities at General Electric Capital Corporation, including Vice President of
Recovery Operations for the General Electric Capital Services division from
March 1997 to January 1998 and Vice President of Cardholder Operations for the
Consumer Card Services division of General Electric Capital Corporation from May
1994 to March 1997. As Vice President of Recovery
6
Operations, he was responsible for the successful operation of the Retailer
Financial Services Recovery Operation, including management of the recovery call
center, bankruptcy collections, payment processing unit, mailroom, facilities,
petition processing, legal, probate, compliance, outside attorney collections,
skip tracing, and interface with 12 outlying business centers. As Vice President
of Cardholder Operations, he was responsible for the successful operation of the
G.E. Rewards Mastercard call center, including managing over 500,000 incoming
calls per month, leading a workforce of 215 people, and overseeing a financial
budget of $5 million. Mr. Caldwell received a B.S. degree in Business
Administration from Western Michigan University in 1975.
EDWARD M. RUCKER. Before becoming the Accounting Manager of Performance Capital
Management, LLC on February 4, 2002, Mr. Rucker was the Accounting Manager of
Performance Capital Management, Inc., one of the predecessor companies to
Performance Capital Management, LLC, from October 2001 to February 2002. As
Accounting Manager, Mr. Rucker has overall responsibility for preparing the
company's accounting records and financial statements. From 1995 to August 2001,
Mr. Rucker was Controller and the Chief Financial Officer of Pickard
Construction, Inc., a construction firm performing as general contractor for
major national firms. In that position, Mr. Rucker was responsible for the
entire accounting and related financial functions of the firm. Mr. Rucker is a
Certified Public Accountant. Mr. Rucker received a B.S. degree in Accounting
from the California State University, Los Angeles in 1968.
DARREN S. BARD. Before becoming Chief Information Officer of Performance
Capital Management, LLC on February 4, 2002, Mr. Bard was Chief Information
Officer of Performance Capital Management, Inc., one of the predecessor
companies to Performance Capital Management, LLC, from April 1998 to February
2002. As Chief Information Officer, Mr. Bard manages the Information Technology
and Acquisitions/Sales Support Departments. Prior to becoming an officer of
Performance Capital Management, Inc., from April 1996 to April 1998, Mr. Bard
worked as Site Production Planning/Operations Manager at General Electric
Capital Corporation. Mr. Bard received a B.A. degree in psychology from The Ohio
State University in 1991.
WILLIAM D. CONSTANTINO. Mr. Constantino has served as the Chief Officer of Legal
Affairs of Performance Capital Management, LLC since it was formed in January
2002. Prior to that date, from July 2000 to January 2002, he served as Chief
Legal Compliance Officer of Performance Capital Management, Inc., one of the
predecessor companies to Performance Capital Management, LLC. As in-house
counsel to Performance Capital Management, LLC, Mr. Constantino is responsible
for ensuring that all collection procedures comply with federal and state
consumer protection laws, assisting with the negotiation and purchase of
portfolios, and is the general legal resource for day-to-day corporate
operations. From January 1999 to July 2000, Mr. Constantino practiced law as a
sole practitioner focusing on all aspects of insolvency law, including
commercial and consumer collections, bankruptcy law, and civil litigation. From
January 1982 to December 1998, he was managing partner in the Law Offices of
Leibowitz and Constantino. That firm focused on insolvency law and consumer
protection law. Mr. Constantino received a B.S. degree in Business
Administration from the State University of New York, Albany in 1972 and a Juris
Doctor degree from Western State University School of Law in 1979.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our
directors, our executive officers and persons who own more than ten percent of
our LLC Units to file with the Securities and Exchange Commission and
Performance Capital Management, LLC reports on Forms 3, 4 and 5 reflecting
transactions affecting beneficial ownership. Based solely upon our review of the
copies of such forms received by us, we believe that, for the period from
January 1, 2004 to December 31, 2004, all persons complied with such filing
requirements, except that a Form 3 for Mr. Donald Rutherford disclosing that he
owns no LLC Units was filed late. We have received a written representation from
each of our directors and executive officers that no Forms 5 are required for
the period ended December 31, 2004.
7
BOARD OF DIRECTORS INFORMATION
Our Board of Directors has seven members, each of whom is independent as defined
by Nasdaq Market Listing rules. Our directors are divided into two classes, with
each class serving for a two-year period. Our Board of Directors held a total of
12 meetings during the fiscal year ended December 31, 2004. Each of our
directors attended at least 75% of the meetings of the Board of Directors.
Our Board of Directors has established an Audit Committee in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. It
currently has no other separately-designated committees.
AUDIT COMMITTEE
The Audit Committee of the Board of Directors is composed of three directors,
Messrs. Rutherford, Smith and Woodworth, each of whom is independent as defined
by Nasdaq Market Listing rules. The Audit Committee is responsible to the full
Board of Directors and operates under a written Audit Committee Charter, which
was adopted by the Board of Directors in February 2003. A copy of the Audit
Committee Charter was included as Appendix A to our Proxy Statement filed on
April 29, 2003.
The Audit Committee consults with the auditors concerning the scope of the
audit, reviews the results of their examination, and reviews and approves any
material accounting policy changes affecting the company's operating results.
The Audit Committee is responsible for, among other things, monitoring the
integrity and adequacy of Performance Capital Management, LLC's financial
information, control systems, and reporting practices, and for recommending to
the Board of Directors for ratification by the Members the Audit Committee's
selection of independent auditors for Performance Capital Management, LLC. The
Audit Committee has appointed and the Board of Directors has recommended to the
Members ratification of the selection of Moore Stephens Wurth Frazer and Torbet,
LLP as Performance Capital Management, LLC's independent auditor for the fiscal
year ending December 31, 2005.
The Board of Directors designated Donald W. Rutherford as an "audit committee
financial expert" as defined by the Securities and Exchange Commission rules;
however, the members of the Audit Committee are not professionally engaged in
the practice of accounting or auditing. The Audit Committee relies, without
independent verification, on the information provided to it and on the
representations made by management and the independent auditors that the
financial statements have been prepared with integrity and objectivity and on
the representations of management and the opinion of the independent auditors
that such financial statements have been prepared in conformity with generally
accepted accounting principles.
The Audit Committee met four times last year. Each of the members of the Audit
Committee attended at least 75% of the meetings held by that committee.
NOMINATING COMMITTEE
Our Board of Directors does not have a nominating committee, as nominations are
made by the members of the Board as a whole. Our Board of Directors does not
have a nominating committee charter. All of our directors are independent as
defined by Nasdaq Market Listing rules. Our Board has not established a separate
nominating committee because all of our directors are independent and vacancies
have occurred only with respect to one director slot. Our Board of Directors
seeks to identify qualified individuals to become Board members and determine
the composition of the Board and its Audit Committee. Our Board does not have
any formal specific minimum qualifications for evaluating potential director
candidates. When considering a potential director candidate, the Board looks for
personal and professional integrity, demonstrated ability and judgment, prior
service as a director, and business experience. Our Board believes it is
important to have at least one director who is a financial expert to serve on
our Audit Committee. The Board will review and consider director nominees
recommended by Members. There are no differences in the manner in which the
Board evaluates director nominees based on whether the nominee is recommended by
a Member or otherwise. Any Member who would like to recommend a director
candidate should contact Mr. William Constantino, our Chief Officer of Legal
Affairs, at our principal executive offices.
8
Our Board of Directors does not have a policy with regard to consideration of
director candidates recommended by our Members. With the exception of Mr.
Rutherford, who joined the Board in January 2004, all of our directors were
initially appointed by the bankruptcy judge prior to our emergence from
bankruptcy in February 2002. These directors were all members of The Official
Committee of Equity Security Holders that represented our Members' interests in
the bankruptcy proceeding. Our Board has viewed its continuity during bankruptcy
and since our emergence from bankruptcy as an important stabilizing influence.
As the bankruptcy proceeding recedes further into the past and our business
evolves, our Board intends to assess whether to adopt a policy with regard to
consideration of director candidates recommended by our Members. No Member has
contacted us either suggesting a director candidate or requesting information on
how to recommend a director candidate.
We do not have a specific process for identifying new directors because we do
not regularly need to nominate new directors. In the most recent case where we
identified a new director, our Board identified Mr. Rutherford through contacts
at a firm that provides executive talent to clients on a supplemental, interim,
project or employed basis. We did not pay a fee for the introduction to Mr.
Rutherford. Our executive officers and the full Board of Directors interviewed
Mr. Rutherford prior to electing him a director. We recruited Mr. Rutherford
primarily with a view to him serving as a financial expert on our Audit
Committee, but also to enhance the accounting and financial expertise of the
Board of Directors.
STOCKHOLDER COMMUNICATION WITH MEMBERS OF THE BOARD OF DIRECTORS
We have no formal procedure for Unit Holder communications with directors.
However, our Board of Directors has provided by resolution that any Unit Holder
who wishes to communicate with a particular director or with all or certain of
the directors or with the entire Board of Directors should direct the
communication to the Chief Officer of Legal Affairs. Our Chief Officer of Legal
Affairs will process all communications received from Unit Holders in accordance
with the process approved by our Board.
ATTENDANCE AT ANNUAL MEETINGS
We do not have any policy regarding director attendance at Annual Meetings of
Members. Last year, all seven directors attended the 2004 Annual Meeting.
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed the company's audited financial
statements for the year ended December 31, 2004 with management, which has
primary responsibility for the financial statements. The Audit Committee has
discussed with Moore Stephens Wurth Frazer and Torbet, LLP the matters that are
required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees." The Audit Committee has discussed with
Moore Stephens Wurth Frazer and Torbet, LLP the auditors' independence from
Performance Capital Management, LLC and management and has received from Moore
Stephens Wurth Frazer and Torbet, LLP the written disclosures and the letter
required by Independence Standards Board Standard No. 1, "Independence
Discussions with Audit Committees."
The Audit Committee has considered whether the services provided by Moore
Stephens Wurth Frazer and Torbet, LLP are compatible with maintaining the
independence of Moore Stephens Wurth Frazer and Torbet, LLP and has concluded
that the independence of Moore Stephens Wurth Frazer and Torbet, LLP is
maintained and not compromised by the services provided.
Based on the review and discussion referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in Performance Capital Management, LLC's Annual Report on Form 10-KSB
for the year ended December 31, 2004, for filing with the Securities and
Exchange Commission.
Respectfully Submitted by the Audit Committee,
Donald W. S. Rutherford
Larry C. Smith
Rodney Woodworth
9
COMPENSATION AND OTHER INFORMATION
CONCERNING DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the compensation that we have paid to our Named
Executive Officers for the years ended December 31, 2004 and 2003, and for the
period from February 4, 2002 (Inception) to December 31, 2002. Except as
provided in the employment contracts discussed on pages 10 and 11, we do not
have a long-term compensation plan and do not grant any long-term compensation
to our executive officers. No other compensation was granted for the periods
covered.
- ------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------
Annual Compensation
--------------------------------
Fiscal Other Annual
Year Salary Bonus Compensation
Name and Principal Position Ended ($) ($) ($)
- ------------------------------ ------ -------- ------- -------------
David Caldwell 2004 200,004 - -
Chief Operations Officer 2003 200,002 - -
2002 187,413 25,000 -
- ------------------------------------------------------------------------
William Constantino 2004 135,002 - -
Chief Officer of Legal Affairs 2003 135,002 - -
2002 130,482 25,000 -
- ------------------------------------------------------------------------
Darren Bard 2004 135,003 - -
Chief Information Officer 2003 135,171 - -
2002 132,839 25,000 -
- ------------------------------------------------------------------------
OPTION GRANTS
We do not have an employee option plan, nor have we granted any options to our
officers or directors.
COMPENSATION OF DIRECTORS
All seven of our directors each receive $1,500 per attended meeting of the Board
of Directors. The Board of Directors has regularly scheduled meetings once per
month. The total amount paid to each of the seven directors during the year
ended December 31, 2004, was $18,000.
All directors receive reimbursement for travel and out-of-pocket expenses
incurred in connection with attendance at all meetings. Except as described
above, during the year ended December 31, 2004, none of our directors received
any other compensation for performance of services as a director of Performance
Capital Management, LLC or a member of any committee of our Board of Directors.
EMPLOYMENT CONTRACTS
We have entered into employment agreements with our three executive officers. We
are in the process of formalizing an indemnification agreement with Edward
Rucker, our accounting manager, which is expected to go before the Board of
Directors for final approval in June 2005. The employment agreements with the
executive officers provide for initial base salaries for David Caldwell, William
Constantino and Darren Bard of $200,000, $135,000 and $135,000, respectively.
Base salaries are to be adjusted periodically by the Board of Directors. The
agreements provide for bonus payments of $25,000 each in 2002. The agreements
also provide for an annual bonus at the end of the first year of employment as
follows: each shall share in an equal amount with all other executives the sum
of the total of all executive annual salaries times two and one half percent for
each and every percentage point for which the ratio of operating expenses to
gross revenues derived directly
10
from collection activity (excluding e.g. sales revenues collections) is less
than 55% for a specific calendar year as calculated on a cash flow basis. The
bonus may be amended or cancelled by the Board of Directors on the anniversary
of the effective date of the employment agreements. In addition, the officers
will receive in lieu of any outstanding equity or equivalent interest in
Performance Capital Management, LLC, a sum equal to the total of all executive
annual salaries divided by the total number of executive officers employed by us
at the time of (a) Performance Capital Management, LLC becoming a "C"
corporation or (b) Performance Capital Management, LLC selling substantially all
of its membership units or assets. For purposes of the compensation section of
the agreements, the executive officers shall be confined to the Chief Operations
Officer, Chief Information Officer, Chief Officer of Legal Affairs and the Chief
Human Resource Officer. The agreements provide that the executive officers shall
receive the following benefits: three weeks of vacation, paid holidays, sick
days and health care benefits.
The term of each employment agreement is five years commencing on July 31, 2002.
On July 31 of each successive year, the term of each employment agreement is
automatically extended for an additional year unless we or the officer gives 90
days advance termination notice. We reserve the right to terminate the agreement
"for cause" if the officer willfully breaches or habitually neglects the duties
that he is required to perform pursuant to the provisions of the agreement, or
commits acts of dishonesty, fraud, misrepresentation or other acts of moral
turpitude as would prevent the effective performance of his or her duties. If we
terminate the agreement "for cause", we shall pay to the officer any
compensation due under the agreement, including any unused vacation, prorated
through the date of termination, and we shall have the option to purchase the
entire ownership interest of the officer, if any, in accordance with the
agreement. The executive officer may terminate the agreement by giving us at
least 30 days notice in advance. Such a termination will be considered "for
cause".
The agreements will not be terminated by any voluntary or involuntary
dissolution of Performance Capital Management, LLC resulting from either a
merger or consolidation in which Performance Capital Management, LLC is not the
consolidated or surviving company, or a transfer of all or substantially all of
the assets of Performance Capital Management, LLC. Any rights, benefits and
obligations under the agreements are to be assigned to the surviving or
resulting company or the transferee of Performance Capital Management, LLC's
assets. On the sale or change in control of Performance Capital Management, LLC,
the executive officers will receive an amount equal to the total of all
executive officer salaries divided by the total number of executive officers.
Each of the agreements provides that we will indemnify the executive officer, if
he or she is made a party to or threatened to be made a party to, or otherwise
involved in, any proceeding commenced during the employment term, or after the
employment term, because the officer is or was an employee or agent of
Performance Capital Management, LLC. The indemnification includes any and all
expenses, judgments, fines, penalties, settlements, and other amounts, actually
and reasonably incurred by the executive officer in connection with the defense
or settlement of any such proceeding. The executive officer must have acted in
good faith and in a manner that the officer reasonably believes to be in the
best interests of Performance Capital Management, LLC and, in a criminal
proceeding, the officer must have no reasonable cause to believe that his or her
conduct was unlawful. Any and all expenses, including filing fees, costs of
investigation, attorney's fees, messenger and delivery expenses, postage, court
reporters' fees and similar fees and expenses, incurred by the executive officer
in any proceeding are to be advanced by Performance Capital Management, LLC
prior to the final disposition of the proceeding and subject to considerations
of reasonableness at the written request of the officer, but only if the officer
undertakes to repay the advanced expenses to the extent he is not entitled to
indemnification. The indemnification contemplated by the agreements is not to be
deemed exclusive of any other rights the officers may have to indemnification.
We have been advised that the SEC takes the position that these indemnification
provisions do not affect the liability of any officer or director under
applicable federal and state securities laws.
11
EMPLOYMENT BENEFIT PLAN
We have a defined contribution plan covering all eligible full-time employees of
Performance Capital Management, LLC (the "Plan Sponsor") who are currently
employed by the company and have completed six months of service from the time
of enrollment. The Plan was effective as of September 1994. The Plan was
established by a predecessor of the Plan Sponsor to provide retirement income
for its employees and is subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended (ERISA).
The Plan is a contributory plan whereby participants may contribute a percentage
of pre-tax annual compensation as outlined in the Plan agreement and as limited
by Federal statute. Participants may also contribute amounts representing
distributions from other qualified defined benefit or contribution plans. The
Plan Sponsor does not make matching contributions.
We do not have any compensation plans that will result in the issuance of LLC
Units or other equity interests.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
We are not aware of any related party transactions that would require
disclosure.
CODE OF ETHICS
On December 8, 2003, our Board of Directors adopted a Code of Business Conduct
and Ethics that applies to our Chief Operations Officer and senior financial
officers. A copy of the Code of Business Conduct and Ethics was filed as an
exhibit to our Annual Report on Form 10-KSB for the year ended December 31,
2003, and incorporated by reference into our Annual Report on Form 10-KSB for
the year ended December 31, 2004.
- --------------------------------------------------------------------------------
PROPOSAL NO. 2: RATIFY SELECTION OF INDEPENDENT AUDITORS FOR 2005
- --------------------------------------------------------------------------------
Moore Stephens Wurth Frazer and Torbet, LLP served as our independent auditors
for the year ended December 31, 2004, and has been selected by our Audit
Committee to continue as our independent auditors for the year ending December
31, 2005.
Although the selection of Moore Stephens Wurth Frazer and Torbet, LLP is not
required to be submitted to a vote of the Members, our Board of Directors
believes it appropriate as a matter of policy to request that the Members ratify
the selection of the independent auditors for the fiscal year ending December
31, 2005. In the event that the votes in opposition to ratification exceed the
votes in favor of ratification, the adverse vote will be considered as a
direction to our Board of Directors to select other auditors for the fiscal year
ending December 31, 2005.
A representative from Moore Stephens Wurth Frazer and Torbet, LLP is expected to
be present at the Annual Meeting. The representative will have the opportunity
to make a statement and will be able to respond to appropriate questions
submitted either orally or in writing at the meeting.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" RATIFICATION OF THE
SELECTION OF MOORE STEPHENS WURTH FRAZER AND TORBET, LLP, CERTIFIED PUBLIC
ACCOUNTANTS, AS OUR INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31,
2005.
12
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Moore Stephens Wurth Frazer and Torbet, LLP has audited our financial statements
for the past three years. Our Board of Directors maintains an Audit Committee in
accordance with applicable SEC rules. The Audit Committee is directly
responsible for the appointment, compensation, retention and oversight of the
work of the independent auditors for the purpose of preparing and issuing its
audit report or performing other audit, review and tax services for us. The
independent auditors report directly to the Audit Committee and the Audit
Committee is directly responsible for reviewing in advance, and granting any
appropriate pre-approvals of, (a) all auditing services to be provided by the
independent auditor and (b) all non-audit services to be provided by the
independent auditor (as permitted by the Exchange Act), and in connection
therewith to approve all fees and other terms of engagement, as required by the
applicable rules of the Exchange Act and subject to the exemptions provided for
in such rules.
The aggregate fees for professional services rendered by Moore Stephens Wurth
Frazer and Torbet, LLP for 2004 and 2003 were:
TYPES OF FEES 2004 2003
- ------------------ -------- --------
Audit Fees $110,735 $ 90,516
Audit-Related Fees 16,131 19,639
Tax Fees 17,668 11,045
All Other Fees 5,500 14,786
-------- --------
TOTAL FEES $150,034 $135,986
======== ========
In the above table, in accordance with new SEC definitions and rules, "audit
fees" are fees we paid Moore Stephens Wurth Frazer and Torbet, LLP for
professional services rendered for the audit of our annual financial statements
and review of financial statements included in our Quarterly Reports on Form
10-QSB, and for services that are normally provided by the auditors in
connection with statutory and regulatory filings or engagements; "audit-related
fees" are fees billed by Moore Stephens Wurth Frazer and Torbet, LLP for
assurance and related services that are traditionally performed by the auditor,
including the audit of our defined contribution employee benefit plan and SEC
compliance work; "tax fees" are fees for tax compliance, tax advice and tax
planning; and "all other fees" are fees billed by Moore Stephens Wurth Frazer
and Torbet, LLP to us for any services not included in the first three
categories.
POLICY ON PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
The Audit Committee's Charter provides that the Audit Committee shall
pre-approve all auditing services and permitted non-audit services to be
performed by the company's independent auditors, subject to the de minimis
exceptions for non-audit services that are approved by the Audit Committee prior
to the completion of the audit. As part of its pre-approval process, the Audit
Committee considers whether such services are consistent with the rules of the
Securities and Exchange Commission on auditor independence. The policy does not
delegate to management the Audit Committee's responsibility to pre-approve
permitted services of the independent auditors.
During 2004, our Audit Committee specifically pre-approved the services
performed by Moore Stephens Wurth Frazer and Torbet, LLP in connection with our
2004 audit. All of the other services performed by Moore Stephens Wurth Frazer
and Torbet, LLP for us during 2004 were approved by our Audit Committee as to
the scope of such services and fees paid for such services.
____________________________________
PROPOSALS OF MEMBERS
A Member proposal is a Member's recommendation or requirement that we and/or our
Board of Directors take certain action, which the Member intends to present at a
meeting of our Members. The proposal should state as
13
clearly as possible the course of action that the Member believes we should
follow and should be accompanied by a supporting statement. The proposal,
including the accompanying supporting statement, may not exceed 500 words.
Proposals received from Members are given careful consideration by us in
accordance with Rule 14a-8 under the Securities Exchange Act of 1934, as
amended. Member proposals are eligible for consideration for inclusion in the
proxy statement for the 2006 Annual Meeting of Members if they are received by
us on or before January 3, 2006. Any Member proposal should be directed to the
attention of the Chief Officer of Legal Affairs, Performance Capital Management,
LLC, at 222 South Harbor Blvd., Suite 400, Anaheim, California, 92805.
In order for a Member proposal submitted OUTSIDE of Rule 14a-8 to be considered
"timely" within the meaning of Rule 14a-4(c), such proposal must be received by
us on or before March 20, 2006. We will have discretionary authority with
respect to Member proposals submitted for consideration at the 2006 Annual
Meeting of Members that are not "timely" within the meaning of Rule 14a-4(c). We
reserve the right to reject, rule out of order, or take other appropriate action
with respect to any proposal that does not comply with these and other
applicable requirements.
ADDITIONAL INFORMATION
Members should direct communications regarding change of address, requests for
transfer of LLC Unit ownership or lost LLC Unit certificates to Performance
Capital Management, LLC, Attn: Harvey "Bud" Webb, Member Relations, 222 South
Harbor Blvd., Suite 400, Anaheim, California, 92805. Mr. Webb may also be
reached by telephone at 714.502.3736 or by facsimile at 714.502.3733.
OTHER MATTERS
We know of no other matters that are likely to be brought before the Annual
Meeting. If, however, other matters not presently known or determined properly
come before the Annual Meeting, the persons named as proxies in the enclosed
Proxy Card or their substitutes will vote such proxy in accordance with their
discretion with respect to such matters.
By Order of the Board of Directors,
David J. Caldwell
Chief Operations Officer
Anaheim, California
May 2, 2005
14
PROXY THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
PERFORMANCE CAPITAL MANAGEMENT, LLC
2005 ANNUAL MEETING OF MEMBERS - JUNE 13, 2005
The undersigned Member(s) of PERFORMANCE CAPITAL MANAGEMENT, LLC, a California
limited liability company (the "Company"), hereby acknowledges receipt of the
Notice of Annual Meeting of Members and the Proxy Statement, and hereby appoints
David Caldwell and Darren Bard, or either of them, as proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 2005 Annual Meeting
of Members of the Company to be held on Monday, June 13, 2005, and at any
adjournment(s) or postponement(s) thereof, and to vote all LLC Units that the
undersigned would be entitled to vote, if then and there personally present, on
the matters set forth below and, in accordance with their discretion, on any
other business that may come before the meeting:
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE PROPOSALS
DESCRIBED IN THE PROXY STATEMENT. IF A PROXY IS SIGNED AND DATED BUT NOT MARKED,
YOU WILL BE DEEMED TO HAVE VOTED "FOR" THE PROPOSALS DESCRIBED IN THE PROXY
STATEMENT. THIS PROXY REVOKES ALL PRIOR PROXIES GIVEN BY THE UNDERSIGNED WITH
RESPECT TO THE LLC UNITS COVERED HEREBY.
PROPOSAL NO. 1 - TO ELECT FOUR CLASS II DIRECTORS TO SERVE A TWO-YEAR TERM AND
UNTIL EACH DIRECTOR'S SUCCESSOR HAS BEEN DULY ELECTED AND QUALIFIED.
Nominees: Lester T. Bishop
Larry C. Smith
David Barnhizer
Sanford Lakoff
[_] For the Nominees Listed above (except as indicated below)
[_] Withhold Authority to Vote for All Nominees
Instruction: To withhold authority to vote for any Nominee, write that
Nominee's name on the line immediately below.
_______________________________________________________________________________
PROPOSAL NO. 2 - TO RATIFY THE SELECTION OF MOORE STEPHENS WURTH FRAZER AND
TORBET, LLP, AS INDEPENDENT AUDITORS FOR THE COMPANY FOR THE FISCAL YEAR ENDING
DECEMBER 31, 2005.
[_] For [_] Against [_] Abstain
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
Page 1 of 2
NOTE: THIS PROXY SHOULD BE MARKED, DATED AND SIGNED BY EACH MEMBER EXACTLY AS
HIS OR HER OR ITS NAME APPEARS ON THE LLC UNIT CERTIFICATE(S), AND RETURNED IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned Member(s). If you do not sign and return this proxy or attend
the meeting and vote by ballot, your LLC Units cannot be voted. If you wish to
vote in accordance with the Board of Directors' recommendations, just sign where
indicated. You need not mark any boxes.
IF YOU DO NOT MARK A BOX INDICATING HOW YOU WANT TO VOTE ON A PROPOSAL, YOUR LLC
UNITS WILL BE VOTED "FOR" THAT PROPOSAL.
When LLC Units are held of record by joint tenants, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If a corporation, please sign in full corporate name as its
authorized officer. If a partnership, please sign in partnership name as its
authorized person.
DATED: , 2005.
---------------------
-----------------------------------------------------------------
Print name(s) exactly as shown on LLC Unit Certificate(s)
------------------------------ ---------------------------
Signature (and Title, if any) Signature (if held jointly)
Page 2 of 2