x
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|
o |
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
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For the transition period from ________ to ________ |
Delaware | 91-1313292 |
(State of Organization) | (IRS Employer I.D. No.) |
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Title of each class
Depositary Receipts (Units)
|
Name of each exchange on which registered
NASDAQ
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Large Accelerated Filer o | Accelerated Filer x |
Non-Accelerated Filer o (Do not check if a smaller reporting company) | Smaller reporting company o |
Page
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79 | |||||
80 | |||||
81 | |||||
85 | |||||
96 | |||||
98 | |||||
99 | |||||
99 | |||||
106 |
Species
|
2010 Volume
|
Percent of total
|
||||||
Douglas-fir
|
227 | 72 | % | |||||
Western hemlock
|
38 | 12 | % | |||||
Western red cedar
|
15 | 5 | % | |||||
Other conifer
|
12 | 4 | % | |||||
Red alder
|
19 | 6 | % | |||||
Other hardwood
|
3 | 1 | % | |||||
Total
|
314 | 100 | % |
Species
|
2010 Volume
|
Percent of total
|
||||||
Douglas-fir
|
195 | 58 | % | |||||
Western hemlock
|
90 | 27 | % | |||||
Western red cedar
|
3 | 1 | % | |||||
Other conifer
|
33 | 10 | % | |||||
Red alder
|
13 | 4 | % | |||||
Other hardwood
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1 | - | % | |||||
Total
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335 | 100 | % |
Age
|
12/31/2010
|
12/31/2010
|
||||||||||||||
Class
|
Partnership Acres
|
%
|
Fund I & II Acres
|
%
|
||||||||||||
Clear-cut
|
1,667 | 2 | % | 233 | – | % | ||||||||||
0 to 4
|
7,504 | 8 | % | 2,522 | 5 | % | ||||||||||
5 to 9
|
10,358 | 11 | % | 2,843 | 6 | % | ||||||||||
10 to 14
|
13,731 | 14 | % | 3,005 | 6 | % | ||||||||||
15 to 19
|
4,282 | 4 | % | 4,514 | 9 | % | ||||||||||
20 to 24
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14,688 | 15 | % | 7,526 | 14 | % | ||||||||||
25 to 29
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16,775 | 18 | % | 5,513 | 11 | % | ||||||||||
30 to 34
|
9,854 | 10 | % | 7,470 | 14 | % | ||||||||||
35 to 39
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4,749 | 5 | % | 6,401 | 12 | % | ||||||||||
40 to 44
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4,580 | 5 | % | 6,101 | 12 | % | ||||||||||
45 to 49
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1,594 | 2 | % | 2,368 | 5 | % | ||||||||||
50 to 54
|
742 | 1 | % | 1,896 | 4 | % | ||||||||||
55 to 59
|
665 | 1 | % | 736 | 1 | % | ||||||||||
60 to 64
|
1,538 | 1 | % | 274 | – | % | ||||||||||
65+
|
2,569 | 3 | % | 608 | 1 | % | ||||||||||
95,296 | 52,010 |
Segment
|
Full-Time
|
Part-Time/
Seasonal
|
Total
|
|||||||||
Fee Timber
|
14 | - | 14 | |||||||||
Timberland Management & Consulting
|
5 | - | 5 | |||||||||
Real Estate
|
13 | 3 | 16 | |||||||||
General & Administrative
|
10 | - | 10 | |||||||||
Totals
|
42 | 3 | 45 |
·
|
A revised Northern Spotted Owl Recovery Plan is being worked on at the federal level that stipulates that, unlike prior versions, all forest lands should contribute to the recovery effort. Whereas past recovery plans relied on federal and state lands for habitat set-asides, the new plan may affect or preclude operations on private land deemed to be essential habitat. The 2010 Draft Recovery Plan is now in the peer review and public comment stage, with efforts being made to demonstrate the already large contribution being made to the recovery effort through Washington’s HCP as well as significant habitat contributions on private land in both states.
|
·
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A lawsuit in Oregon resulted in a ruling that water channeling structures such as culverts on logging roads are, in fact, point sources of pollution. If this ruling is upheld on appeal, it could require an EPA discharge permit for each such structure, numbering millions of such permits across the nation.
|
·
|
State budget shortfalls are affecting state regulatory agencies such that the states are expected to impose new, or increase existing, fees for the conduct of forest practices.
|
·
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Provide compliance with the Endangered Species Act (ESA) for aquatic and riparian dependent species on private forest lands;
|
·
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Restore and maintain riparian habitat on private land to support a harvestable supply of fish;
|
·
|
Meet the requirements of the Clean Water Act for water quality on private forest lands; and
|
·
|
Keep the timber industry economically viable in the State of Washington.
|
Description
|
2009
|
Transfers
|
Acquisitions
|
Other (1)
|
2010
|
|||||||||||||||
Timberland:
|
||||||||||||||||||||
Hood Canal tree farm (2)
|
70,788 | (312 | ) | - | (10 | ) | 70,466 | |||||||||||||
Columbia tree farm (2)
|
43,625 | - | 2 | - | 43,627 | |||||||||||||||
Total Timberland
|
114,413 | (312 | ) | 2 | (10 | ) | 114,093 | |||||||||||||
Land held for sale:
|
||||||||||||||||||||
Bremerton - Wright Creek
|
1 | (1 | ) | - | - | - | ||||||||||||||
Hansville - Chatham
|
10 | (10 | ) | - | - | - | ||||||||||||||
Jefferson County
|
14 | (14 | ) | - | - | - | ||||||||||||||
Everett - East Crest Hills
|
2 | - | 2 | |||||||||||||||||
Timberland Ridge
|
40 | (40 | ) | - | - | - | ||||||||||||||
Subtotal land held for sale
|
67 | (65 | ) | - | - | 2 | ||||||||||||||
Land held for development:
|
||||||||||||||||||||
Bremerton - Wright Creek
|
44 | 1 | 1 | - | 46 | |||||||||||||||
Gig Harbor - Harbor Hill
|
251 | - | - | - | 251 | |||||||||||||||
Homestead
|
39 | - | - | - | 39 | |||||||||||||||
Jefferson County
|
70 | 143 | - | - | 213 | |||||||||||||||
Mason County
|
- | 183 | - | - | 183 | |||||||||||||||
Kingston - Arborwood
|
356 | - | - | - | 356 | |||||||||||||||
Kingston - 5-Acre zoning
|
366 | - | - | - | 366 | |||||||||||||||
Nursery Hansville
|
106 | - | - | - | 106 | |||||||||||||||
Oak Bay
|
205 | - | - | - | 205 | |||||||||||||||
Hansville - Chatham
|
142 | 10 | - | - | 152 | |||||||||||||||
Port Gamble townsite
|
167 | - | - | - | 167 | |||||||||||||||
Shine Canyon
|
69 | - | - | - | 69 | |||||||||||||||
Port Ludlow - Tala Point
|
256 | - | - | - | 256 | |||||||||||||||
Tarboo Easement
|
129 | - | - | - | 129 | |||||||||||||||
Timberland Ridge
|
95 | 40 | - | - | 135 | |||||||||||||||
Walden
|
120 | - | - | - | 120 | |||||||||||||||
Other
|
41 | - | - | - | 41 | |||||||||||||||
Subtotal land held for development
|
2,456
|
377 | 1 | - | 2,834 | |||||||||||||||
Total Real Estate Acres
|
2,523 | 312 | 1 | - | 2,836 | |||||||||||||||
Grand Total Acres
|
116,936 | - | 3 | (10 | ) | 116,929 |
(1)
|
Certain parcels adjusted due to a Geographic Information Systems (GIS) reconciliation for Timberland ownership.
|
(2)
|
A subset of this property is used as collateral for the Partnership's long-term debt, excluding debt of the Funds.
|
Current Land Inventory (acres) |
2010 Land Sales
|
|||||||||||||||||||||||
Zoning Designation
|
Real Estate
|
Fee Timber
|
Totals
|
Acres
|
$/Acre
|
Total Sales
|
||||||||||||||||||
Urban zoning
|
687 | - | 687 | - | $ | - | $ | - | ||||||||||||||||
1 DU per 5 acres
|
708 | 1,632 | 2,340 | - | - | - | ||||||||||||||||||
1 DU per 10 acres
|
131 | 713 | 844 | - | - | - | ||||||||||||||||||
1 DU per 20 acres
|
882 | 34,976 | 35,858 | - | - | - | ||||||||||||||||||
1 DU per 40 acres
|
45 | 2,219 | 2,264 | - | - | - | ||||||||||||||||||
1 DU per 80 acres
|
251 | 50,640 | 50,891 | - | - | - | ||||||||||||||||||
Forest Resource Lands
|
26 | 23,832 | 23,858 | - | - | - | ||||||||||||||||||
Open Space
|
20 | 81 | 101 | - | - | - | ||||||||||||||||||
Historic Rural Town
|
86 | - | 86 | |||||||||||||||||||||
Total
|
2,836 | 114,093 | 116,929 | - | $ | - | $ | - |
|
High
|
|
|
Low
|
Distributions
|
|||
|
|
|||||||
Year Ended December 31, 2008
|
|
|
||||||
First Quarter
|
|
|
$38.50
|
$34.01
|
$0.40
|
|||
Second Quarter
|
|
|
37.50
|
32.01
|
0.40
|
|||
Third Quarter
|
|
|
34.00
|
28.06
|
0.40
|
|||
Fourth Quarter
|
28.48
|
15.00
|
0.40
|
|||||
Year Ended December 31, 2009
|
|
|
||||||
First Quarter
|
|
|
$22.89
|
$15.61
|
$0.20
|
|||
Second Quarter
|
|
|
28.98
|
18.52
|
0.20
|
|||
Third Quarter
|
|
|
25.28
|
21.56
|
0.20
|
|||
Fourth Quarter
|
25.25
|
22.32
|
0.10
|
|||||
Year Ended December 31, 2010
|
|
|
||||||
First Quarter
|
|
|
$28.89
|
$23.32
|
$0.10
|
|||
Second Quarter
|
|
|
28.90
|
25.02
|
0.10
|
|||
Third Quarter
|
|
|
28.00
|
24.00
|
0.25
|
|||
Fourth Quarter
|
38.61
|
26.62
|
0.25
|
(Dollars in thousands, except per unit data)
|
Year Ended December 31,
|
|||||||||||||||||||
Statement of operations data
|
2010
|
2009
|
2008
|
2007
|
2006
|
|||||||||||||||
Revenue:
|
||||||||||||||||||||
Fee Timber
|
$ | 27,674 | $ | 14,847 | $ | 23,551 | $ | 35,514 | $ | 35,260 | ||||||||||
Timberland Management & Consulting
|
31 | 601 | 944 | 1,344 | 3,670 | |||||||||||||||
Real Estate
|
3,487 | 5,030 | 3,683 | 15,037 | 27,320 | |||||||||||||||
Total revenue
|
31,192 | 20,478 | 28,178 | 51,895 | 66,250 | |||||||||||||||
Operating income/(loss):
|
||||||||||||||||||||
Fee Timber
|
9,703 | 3,724 | 6,294 | 15,215 | 14,592 | |||||||||||||||
Timberland Management & Consulting
|
(1,250 | ) | (375 | ) | (543 | ) | (883 | ) | 1,266 | |||||||||||
Real Estate (1)
|
(809 | ) | 1,663 | (1,111 | ) | 5,163 | 13,864 | |||||||||||||
General and Administrative
|
(4,731 | ) | (3,733 | ) | (3,951 | ) | (4,782 | ) | (3,817 | ) | ||||||||||
Total operating income
|
2,913 | 1,279 | 689 | 14,713 | 25,905 | |||||||||||||||
Net income (loss) attributable to unitholders
|
$ | 2,038 | $ | (272 | ) | $ | 1,162 | $ | 15,508 | 24,910 | ||||||||||
Earnings (loss) per unit – diluted
|
$ | 0.43 | $ | (0.07 | ) | $ | 0.23 | $ | 3.22 | $ | 5.22 | |||||||||
Distributions per unit
|
$ | 0.70 | $ | 0.70 | $ | 1.60 | $ | 1.36 | $ | 1.06 | ||||||||||
Balance sheet data
|
||||||||||||||||||||
Total assets
|
235,837 | 187,080 | 165,411 | 148,550 | 180,282 | |||||||||||||||
Long-term debt, net of current portion
|
50,468 | 28,659 | 28,169 | 29,385 | 30,866 | |||||||||||||||
Partners’ capital
|
70,990 | 83,126 | 87,817 | 96,644 | 87,605 | |||||||||||||||
Debt to total capitalization (2)
|
36 | % | 26 | % | 25 | % | 24 | % | 27 | % |
(1)
|
Real Estate operating loss in 2010, 2009, 2007, and 2006 includes $875,000, $30,000, $1,878,000, and $260,000, respectively, of environmental remediation charges.
|
(2)
|
Debt-to-total-capitalization ratio is calculated as the long-term debt of the partnership, excluding debt of the Funds, divided by Partner’s capital
|
(Dollars in thousands, except per unit data)
|
Year Ended December 31,
|
|||||||||||||||||||
Free cash flow
(3):
|
2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||
Cash provided by operations (4)
|
$ | 8,950 | $ | 662 | $ | 3,952 | $ | 12,113 | $ | 33,114 | ||||||||||
Plus:
|
||||||||||||||||||||
Net loss attributable to noncontrolling interests (5)
|
1,218 | 950 | 1,018 | 402 | 69 | |||||||||||||||
Less:
|
||||||||||||||||||||
Principal payments
|
(1,038 | ) | (1,418 | ) | (1,342 | ) | (1,481 | ) | (1,675 | ) | ||||||||||
Change in operating accounts and non-cash charges (6)
|
(3,295 | ) | (585 | ) | 44 | 2,528 | (4,004 | ) | ||||||||||||
Capital expenditures, excluding
|
||||||||||||||||||||
timberland acquisitions (7)
|
(941 | ) | (1,224 | ) | (1,715 | ) | (2,294 | ) | (1,720 | ) | ||||||||||
Free cash flow
|
4,894 | (1,615 | ) | 1,957 | 11,268 | 25,784 | ||||||||||||||
Other data
|
||||||||||||||||||||
Acres owned/managed (thousands)
|
175 | 150 | 405 | 430 | 433 | |||||||||||||||
Fee timber harvested (MMBF)
|
53 | 32 | 38 | 55 | 55 |
(3)
|
Management considers free cash flow, a non-GAAP measure, to be a relevant and meaningful indicator of liquidity and earnings performance commonly used by investors, financial analysts and others in evaluating companies in its industry and, as such, has provided this information in addition to the generally accepted accounting principle-based presentation of cash provided by operating activities.
|
(4)
|
In the third quarter of 2009, the Partnership changed its classification of cash flows
to
include real estate development capital expenditures within cash flows from operating activities. Prior to the end of the third quarter, these expenditures were reported within investing activities within the Partnership’s statement of cash flows. Presentation of prior periods has been revised for consistent treatment of these expenditures for all periods presented.
|
(5)
|
Backs out the impact of the Funds and IPMB on Pope Resources’ free cash flow.
|
(6)
|
Non-cash charges exclude cost of land sold, depletion, depreciation and amortization, and capitalized development activities.
|
(7)
|
Fund II acquired 25,000 and 12,000 acres of timberland in 2010 and 2009, respectively, and the Partnership acquired 1,180 acres of timberland in 2008. Fund I acquired 24,000 acres of timberland in 2006. The cost of these acquisitions was not included in the calculation of free cash flow.
|
Segment
|
2010
|
2009
|
2008
|
Fee Timber
|
89%
|
72%
|
84%
|
Timberland Management & Consulting
|
-%
|
3%
|
3%
|
Real Estate
|
11%
|
25%
|
13%
|
YEAR TO YEAR COMPARISONS
|
||||||||
(Amounts in $000's)
|
||||||||
2010 vs. 2009
|
2009 vs. 2008
|
|||||||
Total
|
Total
|
|||||||
Net income (loss) attributable to unitholders:
|
||||||||
2010 period
|
$ | 2,038 | ||||||
2009 period
|
$ | (272 | ) | $ | (272 | ) | ||
2008 period
|
$ | 1,162 | ||||||
Variance
|
$ | 2,310 | $ | (1,434 | ) | |||
Detail of earnings variance:
|
||||||||
Fee Timber
|
||||||||
Log price realizations (A)
|
4,028 | $ | (3,116 | ) | ||||
Log volumes (B)
|
8,421 | (2,673 | ) | |||||
Depletion
|
(3,168 | ) | 1,469 | |||||
Production costs
|
(2,905 | ) | 1,439 | |||||
Other Fee Timber
|
(397 | ) | 311 | |||||
Timberland Management & Consulting
|
||||||||
Management fee changes
|
(531 | ) | (317 | ) | ||||
Other Timberland Management & Consulting
|
(344 | ) | 485 | |||||
Real Estate
|
||||||||
Land and conservation easement sales
|
(1,199 | ) | 1,433 | |||||
Environmental remediation liability
|
(845 | ) | (30 | ) | ||||
Timber depletion on HBU sale
|
6 | 478 | ||||||
Other Real Estate
|
(434 | ) | 893 | |||||
General & administrative costs
|
(998 | ) | 218 | |||||
Net interest expense
|
(137 | ) | (782 | ) | ||||
Debt extinguishment costs
|
(113 | ) | (1,137 | ) | ||||
Other (taxes, noncontrolling interests, impairment)
|
926 | (105 | ) | |||||
Total change in earnings
|
$ | 2,310 | $ | (1,434 | ) |
(A)
|
Price variance calculated by extending the change in average price realized by current period volume.
|
(B)
|
Volume variance calculated by extending change in sales volume by the average log sales price for the
the comparison period.
|
Volume (in MBF)
|
2010
|
% Total
|
2009
|
% Total
|
2008
|
% Total
|
Sawlogs
|
||||||
Douglas-fir
|
34,978
|
66%
|
22,383
|
69%
|
24,913
|
66%
|
Whitewood
|
7,096
|
13%
|
1,080
|
3%
|
3,121
|
8%
|
Cedar
|
865
|
2%
|
827
|
2%
|
795
|
2%
|
Hardwoods
|
941
|
2%
|
835
|
3%
|
977
|
3%
|
Pulpwood
|
||||||
All Species
|
9,119
|
17%
|
7,336
|
23%
|
7,942
|
21%
|
Total
|
52,999
|
100%
|
32,461
|
100%
|
37,748
|
100%
|
Fiscal Year
|
|||||||||||||||||
∆ from 2009 to 2010 |
|
||||||||||||||||
2010
|
$/MBF
|
%
|
2009
|
||||||||||||||
Sawlogs
|
Douglas-fir
|
$ | 528 | $ | 93 | 21 | % | $ | 435 | ||||||||
Whitewood
|
446 | 137 | 44 | % | 309 | ||||||||||||
Cedar
|
917 | 100 | 12 | % | 817 | ||||||||||||
Hardwood
|
502 | 56 | 13 | % | 446 | ||||||||||||
Pulpwood
|
All Species
|
311 | 15 | 5 | % | 296 | |||||||||||
Overall
|
486 | 76 | 19 | % | 410 | ||||||||||||
Fiscal Year
|
|||||||||||||||||
∆ from 2008 to 2009
|
|||||||||||||||||
2009 |
$/MBF
|
%
|
2008 | ||||||||||||||
Sawlogs
|
Douglas-fir
|
$ | 435 | $ | (102 | ) | -19 | % | $ | 537 | |||||||
Whitewood
|
309 | (103 | ) | -25 | % | 412 | |||||||||||
Cedar
|
817 | (428 | ) | -34 | % | 1,245 | |||||||||||
Hardwood
|
446 | (192 | ) | -30 | % | 638 | |||||||||||
Pulpwood
|
All Species
|
296 | (63 | ) | -18 | % | 359 | ||||||||||
Overall
|
410 | (96 | ) | -19 | % | 506 |
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||
Destination
|
Volume
|
%
|
Price
|
Volume
|
%
|
Price
|
Volume
|
%
|
Price
|
|||||||||||||||||||||||||||
Export brokers
|
17,673 | 33 | % | $ | 526 | 4,876 | 15 | % | $ | 581 | 5,615 | 15 | % | $ | 610 | |||||||||||||||||||||
Domestic mills
|
26,207 | 50 | % | 520 | 20,249 | 62 | % | 410 | 24,191 | 64 | % | 531 | ||||||||||||||||||||||||
Pulpwood
|
9,119 | 17 | % | 311 | 7,336 | 23 | % | 296 | 7,942 | 21 | % | 359 | ||||||||||||||||||||||||
Total
|
52,999 | 100 | % | $ | 486 | 32,461 | 100 | % | $ | 410 | 37,748 | 100 | % | $ | 506 |
Year ended
|
Q1 | Q2 | Q3 | Q4 | ||||||||||||
2010
|
22 | % | 27 | % | 30 | % | 21 | % | ||||||||
2009
|
27 | % | 22 | % | 20 | % | 31 | % | ||||||||
2008
|
25 | % | 38 | % | 31 | % | 6 | % |
Cost of
|
||||||||
($ Million)
|
Harvest, Haul
|
Conservation
|
Total Cost
|
|||||
Year ended
|
and Other
|
Easement Sale
|
Depletion
|
of Sales
|
||||
2010
|
$8.9
|
-
|
$5.2
|
$14.1
|
||||
2009
|
6.0
|
-
|
2.0
|
8.0
|
||||
2008
|
7.5
|
2.2
|
3.4
|
13.1
|
Year ended December 31, 2010
|
||||||||||||
Pooled
|
Funds
|
Total
|
||||||||||
Volume harvested (MBF)
|
42,277 | 10,722 | 52,999 | |||||||||
Rate/MBF
|
$ | 62 | $ | 236 | $ | 98 | ||||||
Depletion expense (000's)
|
$ | 2,640 | $ | 2,529 | $ | 5,169 |
Year ended December 31, 2009
|
||||||||
Pooled
|
Total
|
|||||||
Volume harvested (MBF)
|
32,461 | 32,461 | ||||||
Rate/MBF
|
$ | 62 | $ | 62 | ||||
Depletion expense (000's)
|
$ | 2,001 | $ | 2,001 |
Year ended December 31, 2008
|
||||||||||||
Pooled
|
Fund I
|
Total
|
||||||||||
Volume harvested (MBF)
|
32,455 | 5,293 | 37,748 | |||||||||
Rate/MBF
|
$ | 65 | $ | 254 | $ | 91 | ||||||
Depletion expense (000's)
|
$ | 2,094 | $ | 1,343 | $ | 3,437 | ||||||
($ Million) Year ended
|
2010
|
2009
|
2008
|
|||||||||
Operating Expenses
|
$ | 3.8 | $ | 3.1 | $ | 4.2 | ||||||
Average Acres
|
162,484 | 144,277 | 137,780 | |||||||||
$/Acre
|
$ | 23 | $ | 22 | $ | 30 |
Year Ended December 31, (Millions)
|
2010
|
2009
|
2008
|
|||||||||
Revenue internal
|
$ | 1.5 | $ | 1.5 | $ | 1.9 | ||||||
Intersegment eliminations
|
(1.5 | ) | (0.9 | ) | (1.0 | ) | ||||||
Revenue external
|
$ | 0.0 | $ | 0.6 | $ | 0.9 | ||||||
Operating income-internal
|
$ | 0.0 | $ | 0.4 | $ | 0.1 | ||||||
Intersegment eliminations
|
(1.3 | ) | (0.8 | ) | (0.6 | ) | ||||||
Operating loss-external
|
$ | (1.3 | ) | $ | (0.4 | ) | $ | (0.5 | ) |
Year ended
|
Revenue
|
Environmental
remediation expense
|
Operating income
(loss)
|
|||||||||
2010
|
$ | 3.5 | $ | 0.9 | $ | (0.8 | ) | |||||
2009
|
5.0 | - | 1.7 | |||||||||
2008
|
3.7 | - | (1.1 | ) |
Thousands
|
Per Acre Amounts
|
|||||||||||||||||||
Description
|
Revenue
|
Gross
Margin
|
Acres
Sold
|
Revenue
|
Gross Margin
|
|||||||||||||||
Conservation Easement
|
$ | 2,400 | $ | 2,244 | 6,886 | $ | 349 | $ | 326 | |||||||||||
Rentals
|
1,013 | 1,011 |
NA
|
|||||||||||||||||
Other
|
74 | 70 |
NA
|
|||||||||||||||||
2010 Total
|
$ | 3,487 | $ | 3,325 | 6,886 | |||||||||||||||
Conservation Easement
|
$ | 3,298 | $ | 3,108 | 2,290 | $ | 1,440 | $ | 1,357 | |||||||||||
Rural Residential
|
521 | 328 | 50 | 10,420 | 6,566 | |||||||||||||||
Rentals
|
1,154 | 1,153 |
NA
|
|||||||||||||||||
Other
|
57 | 49 |
NA
|
|||||||||||||||||
2009 Total
|
$ | 5,030 | $ | 4,638 | 2,340 | |||||||||||||||
Conservation Easement
|
$ | 830 | $ | 418 | 118 | $ | 7,034 | $ | 3,543 | |||||||||||
Conservation Sale
|
479 | 324 | 75 | 6,387 | 4,322 | |||||||||||||||
Rural Residential
|
1,147 | 734 | 141 | 8,135 | 5,206 | |||||||||||||||
Rentals
|
1,158 | 1,157 |
NA
|
|||||||||||||||||
Other
|
69 | 71 |
NA
|
|||||||||||||||||
2008 Total
|
$ | 3,683 | $ | 2,704 | 334 |
($ Thousands)
|
Balances at
|
Additions
|
Expenditures
|
|||||||||||||
Year ended
|
the Beginning
|
to
|
for
|
Balance at
|
||||||||||||
December 31,
|
of the Year
|
Accrual
|
Remediation
|
Year-end
|
||||||||||||
2010
|
1,269 | 875 | 211 | 1,933 | ||||||||||||
2009
|
1,554 | 30 | 315 | 1,269 | ||||||||||||
2008
|
1,994 | - | 440 | 1,554 |
Change from 2009 to 2010 ($ thousands)
|
Amount
|
|||
Increase in cash provided by operations
|
$ | 8,288 | ||
Timberland acquisitions
|
(23,785 | ) | ||
Partnership units repurchased
|
(10,429 | ) | ||
Issuance of long-term debt, net of principal payments
|
20,892 | |||
Proceeds from Fund II capital call
|
11,273 | |||
Cash from option exercises
|
622 | |||
Cash distributions
|
(828 | ) | ||
Other
|
8 | |||
Total
|
$ | 6,041 |
Operating cash activities (in thousands):
|
2010
|
2009
|
2008
|
|||||||||
Cash received from customers
|
$ | 31,289 | $ | 20,854 | $ | 29,071 | ||||||
Cash paid to suppliers and employees
|
(19,210 | ) | (16,533 | ) | (21,281 | ) | ||||||
Interest received
|
103 | 280 | 1,025 | |||||||||
Interest paid, net of amounts capitalized
|
(903 | ) | (1,226 | ) | (1,401 | ) | ||||||
Debt extinguishment costs
|
(1,250 | ) | (1,137 | ) | - | |||||||
Capitalized development activities
|
(1,075 | ) | (1,639 | ) | (3,451 | ) | ||||||
Income taxes refunded (paid)
|
(4 | ) | 63 | (11 | ) | |||||||
Cash provided by operating activities
|
$ | 8,950 | $ | 662 | $ | 3,952 |
Investing activities (in thousands):
|
2010
|
2009
|
2008
|
|||||||||
Timber and roads
|
$ | (582 | ) | $ | (617 | ) | $ | (555 | ) | |||
Buildings and equipment
|
(359 | ) | (607 | ) | (1,160 | ) | ||||||
Timberland acquisitions
|
(58,206 | ) | (34,421 | ) | (904 | ) | ||||||
Redemption of short-term investments
|
1,497 | 1,815 | 26,775 | |||||||||
Proceeds from the sale of fixed assets
|
- | 50 | 41 | |||||||||
Cash provided by (used in) investing activities
|
$ | (57,650 | ) | $ | (33,780 | ) | $ | 24,197 |
Financing activities (in thousands):
|
2010
|
2009
|
2008
|
|||||||||
Cash distribution to unitholders
|
$ | (3,241 | ) | $ | (3,219 | ) | $ | (7,444 | ) | |||
ORM Timber Fund II, Inc. capital call
|
38,800 | 27,527 | 370 | |||||||||
ORM Timber Funds distributions
|
(806 | ) | - | (800 | ) | |||||||
Proceeds from line of credit
|
9,600 | - | - | |||||||||
Unit repurchases
|
(12,267 | ) | (1,838 | ) | (3,940 | ) | ||||||
Repayment of long-term debt
|
(1,038 | ) | (1,418 | ) | (1,342 | ) | ||||||
Extinguishment of long-term debt
|
(18,554 | ) | (8,478 | ) | - | |||||||
Proceeds from issuance of long-term debt
|
31,000 | 9,800 | - | |||||||||
Debt issuance costs
|
(283 | ) | (71 | ) | - | |||||||
Cash received from unit option exercises
|
622 | - | 644 | |||||||||
Excess tax benefit from equity-based compensation
|
- | 17 | 167 | |||||||||
Preferred stock issuance - ORM Timber Fund II, Inc.
|
125 | - | - | |||||||||
Preferred stock distribution - ORM Timber Fund II, Inc.
|
(15 | ) | - | - | ||||||||
Cash provided by (used in) financing activities
|
$ | 43,943 | $ | 22,320 | $ | (12,345 | ) |
Payments Due By Period /Commitment Expiration Date
|
||||||||||||||||||||
Obligation or Commitment (in 000's)
|
Total
|
Less than
1 year
|
1-3 years
|
4-5 years
|
After 5 years
|
|||||||||||||||
Total debt
|
$ | 50,498 | $ | 30 | $ | 9,668 | $ | 5,000 | $ | 35,800 | ||||||||||
Operating leases
|
66 | 51 | 15 | - | - | |||||||||||||||
Interest on debt
|
21,518 | 2,462 | 4,344 | 3,915 | 10,796 | |||||||||||||||
Environmental remediation
|
1,933 | 397 | 1,536 | - | - | |||||||||||||||
Other long-term obligations
|
210 | 25 | 50 | 50 | 86 | |||||||||||||||
Total contractual obligations or commitments
|
$ | 74,225 | $ | 2,965 | $ | 15,613 | $ | 8,965 | $ | 46,682 |
Page
|
||
Reports of independent registered public accounting firm
|
54
|
|
Financial statements:
|
||
Consolidated balance sheets
|
56
|
|
|
||
Consolidated statements of operations
|
57
|
|
Consolidated statements of partners’
|
||
capital and comprehensive income (loss)
|
58
|
|
Consolidated statements of cash flows
|
59
|
|
Notes to consolidated financial statements
|
61
|
|
Financial statement schedule
|
100
|
ASSETS
|
2010
|
2009
|
||||||
Current assets:
|
||||||||
Pope cash and cash equivalents
|
$ | 237 | $ | 6,035 | ||||
ORM Timber Funds cash and cash equivalents
|
2,186 | 1,145 | ||||||
Cash and cash equivalents
|
2,423 | 7,180 | ||||||
Student loan auction rate securities, current
|
- | 690 | ||||||
Accounts receivable, net
|
543 | 261 | ||||||
Land held for sale
|
3 | 367 | ||||||
Current portion of contracts receivable
|
219 | 320 | ||||||
Prepaid expenses and other
|
805 | 468 | ||||||
Total current assets
|
3,993 | 9,286 | ||||||
Properties and equipment, at cost:
|
||||||||
Land held for development
|
27,737 | 25,872 | ||||||
Land
|
33,980 | 25,072 | ||||||
Roads and timber, net of accumulated depletion of $60,044 and $54,743
|
164,961 | 120,457 | ||||||
Buildings and equipment, net of accumulated depreciation of $7,739 and $7,321
|
3,854 | 3,967 | ||||||
Total properties and equipment, at cost
|
230,532 | 175,368 | ||||||
Other assets:
|
||||||||
Contracts receivable, net of current portion
|
652 | 1,140 | ||||||
Student loan auction rate securities, non-current
|
- | 796 | ||||||
Other
|
660 | 490 | ||||||
Total other assets
|
1,312 | 2,426 | ||||||
Total assets
|
$ | 235,837 | $ | 187,080 | ||||
LIABILITIES AND PARTNERS' CAPITAL
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | 868 | $ | 586 | ||||
Accrued liabilities
|
2,656 | 808 | ||||||
Current portion of environmental remediation liabilities
|
397 | 200 | ||||||
Current portion of long-term debt
|
30 | 831 | ||||||
Deferred revenue
|
674 | 469 | ||||||
Other current liabilities
|
191 | 196 | ||||||
Total current liabilities
|
4,816 | 3,090 | ||||||
Long-term debt, net of current portion
|
50,468 | 28,659 | ||||||
Environmental remediation liabilities, net of current portion
|
1,536 | 1,069 | ||||||
Other long-term liabilities
|
210 | 205 | ||||||
Commitments and contingencies
|
||||||||
Partners' capital:
|
||||||||
General partners' capital (units issued and outstanding 60 and 60)
|
992 | 1,089 | ||||||
Limited partners' capital (units issued and outstanding 4,203 and 4,520)
|
69,998 | 82,037 | ||||||
Noncontrolling interests
|
107,817 | 70,931 | ||||||
Total partners' capital and noncontrolling interests
|
178,807 | 154,057 | ||||||
Total liabilities, partners' capital, and noncontrolling interests
|
$ | 235,837 | $ | 187,080 |
2010
|
2009
|
2008
|
||||||||||
Revenue
|
||||||||||||
Fee Timber
|
$ | 27,674 | $ | 14,847 | $ | 23,551 | ||||||
Timberland Management & Consulting
|
31 | 601 | 944 | |||||||||
Real Estate
|
3,487 | 5,030 | 3,683 | |||||||||
Total revenue
|
31,192 | 20,478 | 28,178 | |||||||||
Costs and expenses
|
||||||||||||
Cost of sales:
|
||||||||||||
Fee Timber
|
(14,184 | ) | (7,980 | ) | (13,092 | ) | ||||||
Real Estate
|
(162 | ) | (392 | ) | (979 | ) | ||||||
Total cost of sales
|
(14,346 | ) | (8,372 | ) | (14,071 | ) | ||||||
Operating expenses:
|
||||||||||||
Fee Timber
|
(3,787 | ) | (3,143 | ) | (4,165 | ) | ||||||
Timberland Management & Consulting
|
(1,281 | ) | (976 | ) | (1,487 | ) | ||||||
Real Estate
|
(3,259 | ) | (2,945 | ) | (3,815 | ) | ||||||
Environmental remediation
|
(875 | ) | (30 | ) | - | |||||||
General & Administrative (G&A)
|
(4,731 | ) | (3,733 | ) | (3,951 | ) | ||||||
Total operating expenses
|
(13,933 | ) | (10,827 | ) | (13,418 | ) | ||||||
Operating income (loss)
|
||||||||||||
Fee Timber
|
9,703 | 3,724 | 6,294 | |||||||||
Timberland Management & Consulting
|
(1,250 | ) | (375 | ) | (543 | ) | ||||||
Real Estate
|
(809 | ) | 1,663 | (1,111 | ) | |||||||
General & Administrative (G&A)
|
(4,731 | ) | (3,733 | ) | (3,951 | ) | ||||||
Total operating income
|
2,913 | 1,279 | 689 | |||||||||
Other income (expense)
|
||||||||||||
Interest expense
|
(1,815 | ) | (2,317 | ) | (2,469 | ) | ||||||
Interest capitalized to development projects
|
569 | 1,091 | 1,279 | |||||||||
Interest income
|
102 | 219 | 965 | |||||||||
Net gain (loss) on student loan auction rate securities dispositions
|
11 | (66 | ) | - | ||||||||
Impairment of student loan auction rate securities
|
- | (252 | ) | (381 | ) | |||||||
Total other expense
|
(1,133 | ) | (1,325 | ) | (606 | ) | ||||||
Debt extinguishment costs
|
(1,250 | ) | (1,137 | ) | - | |||||||
Income (loss) before income taxes
|
530 | (1,183 | ) | 83 | ||||||||
Income tax benefit (expense)
|
290 | (39 | ) | 61 | ||||||||
Net income (loss)
|
820 | (1,222 | ) | 144 | ||||||||
Net loss attributable to noncontrolling interests-ORM Timber Funds
|
1,218 | 950 | 1,018 | |||||||||
Net income (loss) attributable to unitholders
|
$ | 2,038 | $ | (272 | ) | $ | 1,162 | |||||
Allocable to general partners
|
27 | (4 | ) | 15 | ||||||||
Allocable to limited partners
|
2,011 | (268 | ) | 1,147 | ||||||||
Earnings (loss) per unit attributable to unitholders:
|
||||||||||||
Basic
|
$ | 0.43 | $ | (0.07 | ) | $ | 0.23 | |||||
Diluted
|
$ | 0.43 | $ | (0.07 | ) | $ | 0.23 | |||||
Distributions per unit
|
$ | 0.70 | $ | 0.70 | $ | 1.60 |
Attributable to Pope Resources
|
||||||||||||||||
General
|
Limited
|
Noncontrolling
|
||||||||||||||
Partners
|
Partners
|
Interests
|
Total
|
|||||||||||||
December 31, 2007
|
$ | 1,244 | $ | 95,400 | $ | 45,802 | $ | 142,446 | ||||||||
Net income and comprehensive income
|
30 | 1,132 | (1,018 | ) | 144 | |||||||||||
Cash distributions
|
(96 | ) | (7,348 | ) | (800 | ) | (8,244 | ) | ||||||||
Capital call
|
- | - | 370 | 370 | ||||||||||||
Excess tax benefit from equity-based compensation
|
2 | 165 | - | 167 | ||||||||||||
Equity-based compensation
|
8 | 576 | - | 584 | ||||||||||||
Unit repurchases
|
(51 | ) | (3,889 | ) | - | (3,940 | ) | |||||||||
Proceeds from option exercises
|
9 | 635 | - | 644 | ||||||||||||
December 31, 2008
|
$ | 1,146 | $ | 86,671 | $ | 44,354 | $ | 132,171 | ||||||||
Net loss and comprehensive loss
|
(4 | ) | (268 | ) | (950 | ) | (1,222 | ) | ||||||||
Cash distributions
|
(42 | ) | (3,177 | ) | - | (3,219 | ) | |||||||||
Capital call
|
- | - | 27,527 | 27,527 | ||||||||||||
Excess tax benefit from equity-based compensation
|
1 | 16 | - | 17 | ||||||||||||
Equity based compensation
|
12 | 609 | - | 621 | ||||||||||||
Unit repurchases
|
(24 | ) | (1,814 | ) | - | (1,838 | ) | |||||||||
December 31, 2009
|
$ | 1,089 | $ | 82,037 | $ | 70,931 | $ | 154,057 | ||||||||
Net income and comprehensive income
|
64 | 1,974 | (1,218 | ) | 820 | |||||||||||
Cash distributions
|
(42 | ) | (3,199 | ) | (821 | ) | (4,062 | ) | ||||||||
Proceeds from option exercises
|
19 | 603 | - | 622 | ||||||||||||
Preferred stock issuance
|
- | - | 125 | 125 | ||||||||||||
Capital call
|
- | - | 38,800 | 38,800 | ||||||||||||
Equity-based compensation
|
22 | 690 | - | 712 | ||||||||||||
Unit repurchases
|
(160 | ) | (12,107 | ) | - | (12,267 | ) | |||||||||
December 31, 2010
|
$ | 992 | $ | 69,998 | $ | 107,817 | $ | 178,807 | ||||||||
Weighted average units outstanding
|
12/31/2010
|
12/31/2009
|
12/31/2008
|
|||||||||||||
Basic
|
4,554 | 4,539 | 4,597 | |||||||||||||
Diluted
|
4,578 | 4,539 | 4,661 |
2010
|
2009
|
2008
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Cash received from customers
|
$ | 31,289 | $ | 20,854 | $ | 29,071 | ||||||
Cash paid to suppliers and employees
|
(19,210 | ) | (16,533 | ) | (21,281 | ) | ||||||
Interest received
|
103 | 280 | 1,025 | |||||||||
Interest paid, net of amounts capitalized
|
(903 | ) | (1,226 | ) | (1,401 | ) | ||||||
Debt extinguishment costs
|
(1,250 | ) | (1,137 | ) | - | |||||||
Capitalized development activities
|
(1,075 | ) | (1,639 | ) | (3,451 | ) | ||||||
Income taxes received (paid)
|
(4 | ) | 63 | (11 | ) | |||||||
Net cash provided by operating activities
|
8,950 | 662 | 3,952 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Capital expenditures
|
(941 | ) | (1,224 | ) | (1,715 | ) | ||||||
Proceeds from sale of fixed assets
|
- | 50 | 41 | |||||||||
Redemption of short-term investments
|
1,497 | 1,815 | 26,775 | |||||||||
Timberland acquisitions by ORM Timber Funds
|
(58,206 | ) | (34,421 | ) | (904 | ) | ||||||
Net cash provided by (used in) investing activities
|
(57,650 | ) | (33,780 | ) | 24,197 | |||||||
Cash flows from financing activities:
|
||||||||||||
Cash distributions to unitholders
|
(3,241 | ) | (3,219 | ) | (7,444 | ) | ||||||
Capital call- ORM Timber Fund II, Inc.
|
38,800 | 27,527 | 370 | |||||||||
Cash distributions- ORM Timber Funds
|
(806 | ) | - | (800 | ) | |||||||
Borrowings on line of credit
|
9,600 | - | - | |||||||||
Unit repurchases
|
(12,267 | ) | (1,838 | ) | (3,940 | ) | ||||||
Repayment of long-term debt
|
(1,038 | ) | (1,418 | ) | (1,342 | ) | ||||||
Extinguishment of long-term debt
|
(18,554 | ) | (8,478 | ) | - | |||||||
Proceeds from issuance of long-term debt
|
31,000 | 9,800 | - | |||||||||
Debt issuance costs
|
(283 | ) | (71 | ) | - | |||||||
Proceeds from option exercises
|
622 | - | 644 | |||||||||
Excess tax benefit from equity-based compensation
|
- | 17 | 167 | |||||||||
Preferred stock issuance- ORM Timber Fund II, Inc.
|
125 | - | - | |||||||||
Preferred stock distribution- ORM Timber Fund II, Inc.
|
(15 | ) | - | - | ||||||||
Net cash provided by (used in) financing activities
|
43,943 | 22,320 | (12,345 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents
|
(4,757 | ) | (10,798 | ) | 15,804 | |||||||
Cash and cash equivalents:
|
||||||||||||
Beginning of year
|
7,180 | 17,978 | 2,174 | |||||||||
End of year
|
$ | 2,423 | $ | 7,180 | $ | 17,978 |
Reconciliation of net income (loss) to net cash
|
2010
|
2009
|
2008
|
|||||||||
provided by operating activities:
|
||||||||||||
Net income (loss)
|
$ | 820 | $ | (1,222 | ) | $ | 144 | |||||
Depletion
|
5,169 | 2,001 | 3,915 | |||||||||
Equity-based compensation
|
712 | 621 | 584 | |||||||||
Excess tax benefit from equity-based compensation
|
- | (17 | ) | (167 | ) | |||||||
Depreciation and amortization
|
642 | 810 | 774 | |||||||||
Write-off of debt issuance costs
|
32 | - | - | |||||||||
(Gain) loss on student loan auction rate securities
|
(11 | ) | 318 | 381 | ||||||||
Deferred taxes, net
|
(252 | ) | (222 | ) | (143 | ) | ||||||
Cost of land sold
|
67 | 127 | 2,614 | |||||||||
Capitalized development activities
|
(1,075 | ) | (1,639 | ) | (3,451 | ) | ||||||
Increase (decrease) in cash from changes in
|
||||||||||||
operating accounts:
|
||||||||||||
Deferred revenue
|
205 | 126 | (63 | ) | ||||||||
Accounts receivable
|
(282 | ) | 239 | 385 | ||||||||
Contracts receivable
|
174 | 11 | 571 | |||||||||
Prepaid expenses and other current assets
|
(71 | ) | (138 | ) | 5 | |||||||
Accounts payable and accrued liabilities
|
2,157 | (45 | ) | (1,526 | ) | |||||||
Other current liabilities
|
(6 | ) | 35 | 53 | ||||||||
Environmental remediation
|
664 | (285 | ) | (440 | ) | |||||||
Other long-term liabilities
|
5 | (31 | ) | (62 | ) | |||||||
Other long-term assets
|
- | (6 | ) | 384 | ||||||||
Other, net
|
- | (21 | ) | (6 | ) | |||||||
Net cash provided by operating activities
|
$ | 8,950 | $ | 662 | $ | 3,952 |
2011
|
$ | 219 | ||
2012
|
23 | |||
2013
|
194 | |||
2014
|
307 | |||
2015
|
9 | |||
Thereafter
|
119 | |||
Total
|
$ | 871 |
Description
|
12/31/2010
|
12/31/2009
|
||||||
Buildings
|
$ | 8,177 | $ | 7,996 | ||||
Equipment
|
2,795 | 2,676 | ||||||
Furniture and fixtures
|
621 | 617 | ||||||
Total
|
$ | 11,593 | $ | 11,289 | ||||
Accumulated depreciation
|
(7,739 | ) | (7,321 | ) | ||||
Net buildings and equipment
|
$ | 3,854 | $ | 3,967 |
Year Ended December 31,
|
||||||||||||
(Thousands)
|
2010
|
2009
|
2008
|
|||||||||
Average per unit trading price
|
$ | 30.80 | $ | 21.07 | $ | 27.29 | ||||||
Total options outstanding
|
47,874 | 163,053 | 166,053 | |||||||||
Less: options with strike price above average trading price (out-of-the-money)
|
(1,464 | ) | (41,323 | ) | (1,869 | ) | ||||||
Options used in calculation of dilutive unit equivalents
|
46,410 | 121,730 | 164,184 | |||||||||
Net income (loss) attributable to Pope Resources’ unitholders
|
$ | 2,038 | $ | (272 | ) | $ | 1,162 | |||||
Dilutive unit equivalents
|
24 | 42 | 64 | |||||||||
Less: unit equivalents considered anti-dilutive due to net loss in period
|
- | (42 | ) | - | ||||||||
Dilutive unit equivalents used to calculate dilutive EPS
|
24 | - | 64 |
Year Ended December 31,
|
||||||||||||
(Thousands)
|
2010
|
2009
|
2008
|
|||||||||
Net income (loss) attributable to Pope Resources' unitholders
|
$ | 2,038 | $ | (272 | ) | $ | 1,162 | |||||
Nonforfeitable distributions paid to unvested restricted unitholders
|
(45 | ) | (39 | ) | (99 | ) | ||||||
Dividends paid to Fund II preferred shareholders
|
(15 | ) | - | - | ||||||||
Net income (loss) attributable to outstanding unitholders
|
$ | 1,978 | $ | (311 | ) | $ | 1,063 | |||||
Weighted average units outstanding (in thousands):
|
||||||||||||
Basic
|
4,554 | 4,539 | 4,597 | |||||||||
Dilutive effect of unit equivalents
|
24 | - | 64 | |||||||||
Diluted
|
4,578 | 4,539 | 4,661 | |||||||||
Earnings (loss) per unit: Basic
|
$ | 0.43 | $ | (0.07 | ) | $ | 0.23 | |||||
Earnings (loss) per unit: Diluted
|
$ | 0.43 | $ | (0.07 | ) | $ | 0.23 |
|
·
|
$596,000 held in trust by an IRC Section 1031 exchange facilitator as of December 31, 2007 used to acquire timberlands as of March 31, 2008.
|
|
·
|
$360,000 for capital improvements accrued in 2007 and paid 2008. This amount is partially offset by $70,000 of accrued investing activity in 2008 and paid in 2009.
|
|
·
|
$203,000 of long-term debt incurred in 2008 relating to a cost-share reimbursement to the City of Tacoma for bridge construction ensuring continued access to Fund I property.
|
December 31, 2010
|
||||||||||||
Gross
|
||||||||||||
Amortized
|
Unrealized
|
Estimated
|
||||||||||
Cost
|
Loss
|
Fair Value
|
||||||||||
Cash and cash equivalents
|
$ | 2,423 | $ | - | $ | 2,423 |
December 31, 2009
|
||||||||||||
Gross
|
||||||||||||
Amortized
|
Unrealized
|
Estimated
|
||||||||||
Cost
|
Loss
|
Fair Value
|
||||||||||
Cash and cash equivalents
|
$ | 7,180 | $ | - | $ | 7,180 | ||||||
Securities maturing after ten years:
|
||||||||||||
Auction rate securities, current
|
925 | (235 | ) | 690 | ||||||||
Auction rate securities, non-current
|
1,000 | (204 | ) | 796 |
Date
|
Description
|
Proceeds
|
Basis
|
Gain/(Loss)
|
|||||||||||
Jan 21st
|
Pennsylvania Higher Education
|
$ | 25,000 | $ | 18,653 | $ | 6,347 | ||||||||
Jan 28th
|
Pennsylvania Higher Education
|
702,000 | 671,490 | 30,510 | |||||||||||
Mar 5th
|
Brazos
|
770,000 | 796,100 | (26,100 | ) | ||||||||||
Total
|
$ | 1,497,000 | $ | 1,486,243 | $ | 10,757 |
|
·
|
Level 1 - quoted prices for identical assets/liabilities in active markets
|
|
·
|
Level 2 - quoted prices in a less active market, quoted prices for similar but not identical assets/liabilities, observable inputs other than quoted prices
|
|
·
|
Level 3 - significant unobservable inputs including the Partnership’s own assumptions in determining the fair value of investments
|
December 31, 2010
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Cash and cash equivalents
|
$ | 2,423 | $ | - | $ | - | $ | 2,423 | ||||||||
Total financial assets at fair value
|
$ | 2,423 | $ | - | $ | - | $ | 2,423 |
December 31, 2009
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Cash and cash equivalents
|
$ | 7,180 | $ | - | $ | - | $ | 7,180 | ||||||||
Auction rate securities, current
|
- | 690 | - | 690 | ||||||||||||
Auction rate securities, non-current
|
- | 796 | - | 796 | ||||||||||||
Total financial assets at fair value
|
$ | 7,180 | $ | 1,486 | $ | - | $ | 8,666 |
Activity for Securities Valued Using Level 3 Inputs
|
2010
|
2009
|
||||||
Balance at beginning of period
|
$ | - | $ | 3,619 | ||||
Transfers into Level 3
|
- | - | ||||||
Transfers out of Level 3
|
- | (1,486 | ) | |||||
Dispositions
|
- | (1,815 | ) | |||||
Unrealized losses
|
- | (252 | ) | |||||
Realized losses on dispositions
|
- | (66 | ) | |||||
Balance at end of period
|
$ | - | $ | - |
2010
|
2009
|
|||||||
Cash
|
$ | 2,186 | $ | 1,145 | ||||
Other current assets
|
413 | 38 | ||||||
Timber, land, and roads (net of $5,141 and $2,612
|
||||||||
of accumulated depletion in 2010 and 2009)
|
144,063 | 88,342 | ||||||
Other long-term assets
|
141 | 6 | ||||||
Total assets
|
$ | 146,803 | $ | 89,531 | ||||
Current liabilities excluding long-term debt
|
$ | 954 | $ | 741 | ||||
Current portion of long-term debt
|
30 | 29 | ||||||
Total current liabilities
|
984 | 770 | ||||||
Long-term debt
|
11,068 | 98 | ||||||
Funds' equity
|
134,751 | 88,663 | ||||||
Total liabilities and equity
|
$ | 146,803 | $ | 89,531 |
At December 31,
|
||||||||
(Amounts in thousands:)
|
2010
|
2009
|
||||||
Pope Resources debt:
|
||||||||
Mortgages payable to NWFCS, collateralized by timberlands, as follows:
|
||||||||
Five-year tranche, interest at 4.10% with monthly interest-only payments.
|
||||||||
Matures in July 2015.
|
$ | 5,000 | $ | - | ||||
Seven-year tranche, interest at 4.85% with monthly interest-only payments.
|
||||||||
Matures in July 2017.
|
5,000 | - | ||||||
Ten-year tranche, interest at 6.40%, collateralized by timberlands
|
||||||||
with monthly interest-only payments. Matures September 2019.
|
9,800 | 9,800 | ||||||
Fifteen-year tranche, interest at 6.05% with monthly interest-only payments.
|
||||||||
Matures in July 2025.
|
10,000 | - | ||||||
29,800 | 9,800 | |||||||
Mortgage payable to JHLIC, interest at 7.63%, collateralized by timberlands with monthly interest payments and annual principal payments. Repaid in April 2010.
|
- | 19,303 | ||||||
Local improvement district assessments, with interest ranging from 5.03% to 6.5%.
|
- | 260 | ||||||
Operating line of credit, variable interest rate based on LIBOR variable plus 2.25%, with monthly interest-only payments. Matures August 2013.
|
9,600 | |||||||
Total Partnership debt
|
39,400 | 29,363 | ||||||
ORM Timber Funds debt:
|
||||||||
Fund I note payable to the City of Tacoma, with interest at 4.5%, with monthly principal and interest payments maturing January 2014.
|
98 | 127 | ||||||
Fund II mortgage payable to MetLife, interest at 4.85%, collateralized by Fund II timberlands with quarterly interest payments maturing September 2020.
|
11,000 | - | ||||||
Total ORM Timber Funds debt
|
11,098 | 127 | ||||||
Consolidated subtotal
|
50,498 | 29,490 | ||||||
Less current portion
|
(30 | ) | (831 | ) | ||||
Consolidated long-term debt
|
$ | 50,468 | $ | 28,659 |
2011
|
$ | 30 | ||
2012
|
32 | |||
2013
|
9,633 | |||
2014
|
3 | |||
2015
|
5,000 | |||
Thereafter
|
35,800 |
2010
|
2009
|
2008
|
||||||||||
Income (loss) before income taxes
|
$ | 530 | $ | (1,183 | ) | $ | 83 | |||||
Less: Income/(loss) earned in entities that pass-through pre-tax earnings to the partners
|
1,408 | (1,263 | ) | 144 | ||||||||
Income (loss) subject to income taxes
|
$ | (878 | ) | $ | 80 | $ | (61 | ) |
2010 | 2009 | 2008 | ||||||||||
Current
|
$ | 38 | $ | (278 | ) | $ | (249 | ) | ||||
Deferred
|
252 | 222 | 143 | |||||||||
Paid in capital
|
- | 17 | 167 | |||||||||
Total
|
$ | 290 | $ | (39 | ) | $ | 61 |
2010 | 2009 | 2008 | ||||||||||
Statutory tax on income
|
34 | % | 34 | % | 34 | % | ||||||
Income earned in entities that pass-through pre-tax earnings to the partners
|
(67 | %) | (37 | %) | (107 | %) | ||||||
Effective income tax rate
|
(33 | %) | (3 | %) | (73 | %) |
2010 | 2009 | 2008 | ||||||||||
Current (included in prepaid expenses and other)
|
$ | 401 | $ | 111 | $ | 100 | ||||||
Non current (included in other assets)
|
335 | 373 | 162 | |||||||||
Total
|
$ | 736 | $ | 484 | $ | 262 |
2010 | 2009 | 2008 | ||||||||||
Employee-related accruals
|
$ | 647 | $ | 403 | $ | 205 | ||||||
Depreciation
|
38 | 25 | 7 | |||||||||
Other
|
51 | 56 | 50 | |||||||||
Total
|
$ | 736 | $ | 484 | $ | 262 |
Weighted Avg
|
||||||||
Grant Date
|
||||||||
Units
|
Fair Value ($)
|
|||||||
Outstanding December 31, 2007
|
53,250 | 37.27 | ||||||
Grants
|
19,500 | 32.99 | ||||||
Vested, net of units tendered back
|
(8,896 | ) | 33.87 | |||||
Tendered back to pay tax withholding
|
(479 | ) | 37.13 | |||||
Forefeited
|
(1,500 | ) | 37.15 | |||||
Outstanding December 31, 2008
|
61,875 | 36.42 | ||||||
Grants
|
11,695 | 20.52 | ||||||
Vested, net of units tendered back
|
(16,196 | ) | 34.32 | |||||
Tendered back to pay tax withholding
|
(1,179 | ) | 33.98 | |||||
Outstanding December 31, 2009
|
56,195 | 33.76 | ||||||
Grants
|
26,200 | 25.15 | ||||||
Vested, net of units tendered back
|
(16,334 | ) | 38.29 | |||||
Tendered back to pay tax withholding
|
(1,388 | ) | 39.24 | |||||
Outstanding December 31, 2010
|
64,673 | 29.01 |
Exercise
|
||||||||
Options
|
Price ($)
|
|||||||
Vested December 31, 2007
|
199,856 | 15.97 | ||||||
Unvested December 31, 2007
|
6,200 | 15.96 | ||||||
Outstanding December 31, 2007
|
206,056 | 15.97 | ||||||
Exercised
|
(40,003 | ) | 16.08 | |||||
Vested
|
6,200 | 15.96 | ||||||
Outstanding and Vested December 31, 2008
|
166,053 | 16.08 | ||||||
Expired
|
(3,000 | ) | 27.88 | |||||
Outstanding and Vested December 31, 2009
|
163,053 | 15.86 | ||||||
Exercised
|
(75,692 | ) | 14.96 | |||||
Expired
|
(2,500 | ) | 24.13 | |||||
Tendered back to pay exercise price and tax withholding*
|
(36,987 | ) | 18.46 | |||||
Outstanding and Vested December 31, 2010
|
47,874 | 14.85 |
Year
|
Amount
|
|||
2011
|
51,000 | |||
2012
|
15,000 | |||
2013
|
- | |||
2014
|
- |
2010
|
2009
|
2008
|
||||||||||
Revenue
|
||||||||||||
Partnership Fee Timber
|
22,474 | 14,977 | 19,282 | |||||||||
Funds Fee Timber
|
5,370 | 31 | 4,845 | |||||||||
Total Combined Fee Timber
|
27,844 | 15,008 | 24,127 | |||||||||
Timberland Management & Consulting
|
1,519 | 1,509 | 1,890 | |||||||||
Real Estate
|
3,535 | 5,078 | 3,723 | |||||||||
Total Revenue (Internal)
|
32,898 | 21,595 | 29,740 | |||||||||
Elimination of Intersegment Revenue
|
(1,706 | ) | (1,117 | ) | (1,562 | ) | ||||||
Total Revenue (External)
|
31,192 | 20,478 | 28,178 | |||||||||
Intersegment Revenue or Transfers
|
||||||||||||
Partnership Fee Timber
|
(170 | ) | (161 | ) | (577 | ) | ||||||
Funds Fee Timber
|
- | - | - | |||||||||
Total Combined Fee Timber
|
(170 | ) | (161 | ) | (577 | ) | ||||||
Timberland Management & Consulting
|
(1,488 | ) | (908 | ) | (946 | ) | ||||||
Real Estate
|
(48 | ) | (48 | ) | (39 | ) | ||||||
Total Intersegment Revenue or Transfers
|
(1,706 | ) | (1,117 | ) | (1,562 | ) | ||||||
Operating Income (Loss)
|
||||||||||||
Partnership Fee Timber
|
9,657 | 4,131 | 7,217 | |||||||||
Funds Fee Timber
|
(1,307 | ) | (1,185 | ) | (1,278 | ) | ||||||
Total Combined Fee Timber
|
8,350 | 2,946 | 5,939 | |||||||||
Timberland Management & Consulting
|
55 | 355 | 138 | |||||||||
Real Estate
|
(761 | ) | 1,711 | (1,437 | ) | |||||||
G&A
|
(4,731 | ) | (3,733 | ) | (3,951 | ) | ||||||
Total Operating Income (Internal)
|
2,913 | 1,279 | 689 | |||||||||
Intersegment Charges or Transfers
|
||||||||||||
Partnership Fee Timber
|
(119 | ) | (113 | ) | (538 | ) | ||||||
Funds Fee Timber
|
1,472 | 891 | 893 | |||||||||
Total Combined Fee Timber
|
1,353 | 778 | 355 | |||||||||
Timberland Management & Consulting
|
(1,305 | ) | (730 | ) | (681 | ) | ||||||
Real Estate
|
(48 | ) | (48 | ) | 326 | |||||||
G&A
|
- | - | - | |||||||||
Total Intersegment Charges or Transfers
|
- | - | - | |||||||||
Total Operating Income (External)
|
2,913 | 1,279 | 689 |
2010 | 2009 | 2008 | ||||||||||
Depreciation, Amortization and Depletion
|
||||||||||||
Partnership Fee Timber
|
2,883 | 2,413 | 2,381 | |||||||||
Funds Fee Timber
|
2,534 | - | 1,341 | |||||||||
Total Combined Fee Timber
|
5,417 | 2,413 | 3,722 | |||||||||
Timberland Management & Consulting
|
3 | 17 | 127 | |||||||||
Real Estate
|
240 | 190 | 684 | |||||||||
G&A
|
151 | 191 | 156 | |||||||||
Total
|
5,811 | 2,811 | 4,689 | |||||||||
Assets
|
||||||||||||
Partnership Fee Timber
|
54,990 | 57,982 | 59,911 | |||||||||
Funds Fee Timber
|
146,803 | 89,531 | 55,836 | |||||||||
Total Combined Fee Timber
|
201,793 | 147,513 | 115,747 | |||||||||
Timberland Management & Consulting
|
10 | 38 | 54 | |||||||||
Real Estate
|
31,757 | 30,604 | 28,752 | |||||||||
G&A
|
2,277 | 8,925 | 20,858 | |||||||||
Total
|
235,837 | 187,080 | 165,411 | |||||||||
Capital and Land Expenditures
|
||||||||||||
Partnership Fee Timber
|
524 | 532 | 1,795 | |||||||||
Funds Fee Timber
|
58,311 | 34,553 | 269 | |||||||||
Total Combined Fee Timber
|
58,835 | 35,085 | 2,064 | |||||||||
Timberland Management & Consulting
|
2 | - | 3 | |||||||||
Real Estate-development activities
|
1,075 | 1,639 | 3,451 | |||||||||
Real Estate-other
|
185 | 537 | - | |||||||||
G&A
|
125 | 23 | 552 | |||||||||
Total
|
60,222 | 37,284 | 6,070 | |||||||||
Revenue by product/service
|
||||||||||||
Domestic forest products
|
18,384 | 12,016 | 17,698 | |||||||||
Export forest products, indirect
|
9,290 | 2,831 | 3,426 | |||||||||
Conservation easements and sales
|
2,400 | 3,298 | 3,736 | |||||||||
Fees for service
|
31 | 632 | 944 | |||||||||
Homes, lots, and undeveloped acreage
|
1,087 | 1,701 | 2,374 | |||||||||
Total
|
31,192 | 20,478 | 28,178 |
(in thousands except per unit amounts)
|
Revenue
|
Income (loss) from operations
|
Net income (loss) attributable to unitholders
|
Earnings (loss) per partnership unit: Basic
|
Earnings (loss) per partnership unit: Diluted
|
|||||||||||||||
2010
|
||||||||||||||||||||
First quarter
|
$ | 5,966 | $ | 572 | $ | 451 | $ | 0.10 | $ | 0.10 | ||||||||||
Second quarter
|
8,089 | 131 | (1,126 | ) | (0.25 | ) | (0.25 | ) | ||||||||||||
Third quarter
|
8,591 | 889 | 1,050 | 0.23 | 0.22 | |||||||||||||||
Fourth quarter
|
8,546 | 1,321 | 1,663 | 0.35 | 0.35 | |||||||||||||||
2009
|
||||||||||||||||||||
First quarter
|
$ | 4,979 | $ | (41 | ) | $ | (123 | ) | $ | (0.03 | ) | $ | (0.03 | ) | ||||||
Second quarter
|
3,666 | (724 | ) | (693 | ) | (0.16 | ) | (0.16 | ) | |||||||||||
Third quarter
|
6,615 | 2,118 | 920 | 0.20 | 0.20 | |||||||||||||||
Fourth quarter
|
5,218 | (74 | ) | (376 | ) | (0.08 | ) | (0.08 | ) |
|
1)
|
Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;
|
|
2)
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Partnership are being made only in accordance with authorizations of management of the Partnership; and
|
|
3)
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Partnership’s assets that could have a material effect on the financial statements.
|
Name
|
Age
|
Position, Background, and Qualifications to Serve
|
David L. Nunes
(2)
|
49
|
President and Chief Executive Officer, and Director, from January 2002 to present. President and Chief Operating Officer from September 2000 to January 2002. Senior Vice President Acquisitions & Portfolio Development from November 1998 to August 2000. Vice President Portfolio Development from December 1997 to October 1998. Director of Portfolio Development from April 1997 to December 1997 of Pope MGP, Inc. and the Partnership. Held numerous positions with the Weyerhaeuser Company from 1988 to 1997, the last of which was Strategic Planning Director. Mr. Nunes, as the Partnership's CEO, serves as the only management representative on the board of directors, and is an ex officio member in that regard. Additionally, Mr. Nunes' operational experience and his hands-on knowledge of the Partnership's business and executive team allows him to provide a perspective on the execution of the Partnership's business plans and strategies not available to the non-management directors.
|
Thomas M. Ringo
|
57
|
Vice President and CFO from December 2000 to present. Senior Vice President Finance and Client Relations from June 1996 to December 2000. Vice President Finance from November 1991 to June 1996. Treasurer from March 1989 through October 1991 of Pope MGP, Inc. and the Partnership. Tax Manager of Westin Hotel Company, 1985 to March 1989. Tax Consultant for Price Waterhouse, 1981 to 1985.
|
|
||
John E. Conlin
(2), (3),
(4)
|
52
|
Director; Co-President and COO, NWQ Investment Management, 2006 to present; Member, Board of Advisors, Victory Park Capital, 2009 to present; Member, Corporate Advisory Board, University of Michigan, Ross School of Business, 2006 to present; Member, University of Rochester Endowment Committee, 2006 to present; Director, ACME Communications, 2005 to 2008; Director, Cannell Capital Management 2002 to 2006; CEO, Robertson Stephens, Inc, from 2001 to 2003; COO, Robertson Stephens, Inc, from 1999 to 2000. Held numerous positions with Credit Suisse from 1983 to 1999, the last of which was Managing Director. Mr. Conlin's background in corporate finance, capital-raising and financial analysis bring the Partnership a perspective that is unique among our directors. Moreover, Mr. Conlin offers an ability to assess capital needs, structures and returns relating to the performance and operation of the Partnership, the Funds, and our strategic goals and objectives.
|
Douglas E. Norberg
(1), (3), (4), (5)
|
70
|
Director; Vice Chairman, Wright Runstad & Company, 2000 to 2007; President, Wright Runstad & Company, 1975 until 2000. Wright Runstad & Company is in the business of real estate investing, development, and management. Mr. Norberg has extensive knowledge of real estate development, marketing and management, and consults regularly with management regarding the Partnership's real property portfolio. Mr. Norberg also brings years of experience evaluating strategic alternatives for various real property opportunities.
|
Peter T. Pope
(1), (4)
|
76
|
Director; Director, Pope & Talbot, Inc. 1971 to 2007; Chairman of the Board and CEO of Pope & Talbot, Inc., 1971 to 1999. Mr. Pope retired as CEO of Pope & Talbot, Inc. in 1999. Mr. Pope is also a director and President of Pope EGP, Inc. Mr. Pope has been a director since the formation of the Partnership and brings an historical perspective on the Partnership's assets and business that we believe is critical to the Partnership's recent successes. Moreover, Mr. Pope has more than 50 years' experience in the operation and management of all aspects of the forest products industry, which affords him the ability, not only to assess and advise regarding the Partnership's own lines of business, but also on those of the companies with which the Partnership serves as a supplier, advisor, manager, customer and client. Finally, Mr. Pope's experience offers a perspective which spans multiple business cycles that we believe is critical as management faces the current economic downturn, affording us an improved ability to tailor the Partnership's strategic and tactical responses to changing market conditions.
|
J. Thurston Roach
(1), (3),
(4)
|
69
|
Director; private investor; Director, Deltic Timber Corporation, December 2000 to present; Director, CellFor Inc. from November 2002 to May 2009; Outside Director, NBBJ Design, LLP, from November 2007 to present; Director, The Liberty Corporation May 1994 to January 2006; President and CEO, HaloSource Corporation, October 2000 to November 2001; Director, HaloSource Corporation, October 2000 to February 2002; Senior Vice President and CFO, Owens Corning, January 1999 to April 2000; Senior Vice President and President of Owens Corning’s North American Building Materials Systems Business, February 1998 to December 1998; Vice Chairman, Simpson Investment Company, July 1997 to February 1998; President, Simpson Timber Company, January 1996 to June 1997; Senior Vice President and Chief Financial Officer and Secretary, Simpson Investment Company, August 1984 to December 1995. Mr. Roach's experience as a senior executive and director at other timber and resource companies offer the Partnership insight into the practical issues facing public companies, and his specific knowledge of the timber and timberland markets, both in the Pacific Northwest and elsewhere, allow him to provide extensive input on both strategic and tactical business decisions confronting the board. His specific experience as Audit Committee chair for another public company has been leveraged effectively into a similar role at the Partnership.
|
1)
|
Class A Director
|
2)
|
Class B Director
|
3)
|
Member of the Audit Committee
|
4)
|
Member of the Human Resources Committee
|
5) | Designated financial expert for the Board of Directors Audit Committee |
Individual’s Name
|
Name of Public Company
|
Term of Directorship
|
Peter T. Pope
|
Pope & Talbot, Inc. (NYSE:POP)
|
1971 - 2007
|
J. Thurston Roach
|
The Liberty Corporation (NYSE:LC)
|
1994 - 2006
|
J. Thurston Roach
|
Deltic Timber Company (NYSE:DEL)
|
2000 - present
|
John E. Conlin
|
ACME Communications (NASDQ:ACME)
|
2005 - 2008
|
Forest Products
|
Real Estate
|
Agriculture
|
Metals & Mining
|
Deltic (DEL)
|
Amer. Realty Inv. (ARL)
|
Alico (ALCO)
|
China Direct (CDII)
|
Plum Creek (PCL)
|
Amer. Spectrum (AQQ)
|
Griffin Land (GRIF)
|
Jaguar Mining (JAG)
|
Potlatch (PCH)
|
Avatar Holdings (AVTR)
|
Limoneira (LMNR)
|
Royal Gold (RGLD)
|
Rayonier (RYN)
|
EastGroup Properties (EGP)
|
||
St. Joe (JOE)
|
First Potomac (FPO)
|
||
Weyerhaeuser (WY)
|
InterGroup Corp. (INTG)
|
||
Maui Land & Pineapple (MLP)
|
|||
Monmouth RE Investment (MNR)
|
|||
NTS Realty (NLP)
|
|||
Tejon Ranch (TRC)
|
|||
Thomas Properties Group (TPGI)
|
●
|
cash payments equal to two times the executive’s base salary, plus the executive’s target bonus for the year in which the change in control occurred;
|
●
|
immediate vesting of all outstanding unit option awards consistent with the terms of the Pope Resources 2005 Equity Incentive Plan (and, to the extent applicable, all remaining unvested awards under the Partnership’s 1997 Unit Option Plan); and
|
●
|
continued coverage for the executive and dependents under Pope Resources’ health and welfare plan for up to 18 months after termination.
|
Name
|
Two times base salary
|
Target
bonus
|
Total cash
payments
|
|||||||||
David L. Nunes, President & CEO
|
$ | 636,540 | $ | 180,000 | $ | 816,540 | ||||||
Thomas M. Ringo, Vice President & CFO
|
$ | 413,752 | $ | 80,000 | $ | 493,752 |
Name and
Principal Position
|
Year
|
Salary
($)
|
Bonus
($) (1)
|
Unit Awards
($) (2)
|
Non-equity Incentive
Program
Compensation ($) (3)
|
All Other
Compensation
($) (4)
|
Total
($)
|
David L. Nunes
President and CEO
|
2010
|
318,270
|
-
|
219,120
|
166,800
|
20,080
|
724,270
|
2009
|
318,270
|
87,500
|
197,600
|
-
|
18,550
|
621,920
|
|
2008
|
316,725
|
113,758
|
188,811
|
-
|
34,750
|
654,044
|
|
Thomas M Ringo
V.P.and CFO
|
2010
|
206,876
|
-
|
98,604
|
74,133
|
14,910
|
394,523
|
2009
|
206,876
|
45,188
|
65,455
|
-
|
15,375
|
332,894
|
|
2008
|
205,872
|
47,250
|
99,368
|
-
|
24,200
|
376,690
|
(1)
|
For 2008 and 2009, the amounts shown represent cash bonus payouts earned in the year indicated but paid in the subsequent year.
|
(2)
|
The amount for 2010 represents the market value on the date of grant of restricted units received in January 2011 as compensation under the PRU plan for 2010 performance. Expense will be recognized, however, over the four-year vesting period of this grant with 25% vesting each year. The amount for 2009 represents the market value on the date of grant of restricted units received in January 2010 as compensation for 2009 performance. Expense for the January 2010 grant will be recognized over the two-year vesting period with 50% vesting after one year and the balance upon the second anniversary of the grant. The amount for 2008 represents two grants – one in March 2009 and one in August 2008. The March 2009 grant represents compensation for 2008 performance. On the other hand, the August 2008 grant was based on the historical practice of awarding a set number of units per year with the number of units granted based on the executive’s management position. Units granted under these two awards are subject to a trading restriction until the units vest over four years with 50% vesting after three years and the remaining 50% vesting on the fourth anniversary of the grant date.
|
(3)
|
Represents awards earned in 2010 under the LTIP but paid out in January 2011 discussed in the Compensation Discussion and Analysis beginning on page 85.
|
(4)
|
Amounts represent matching contributions to the Partnership’s 401(k) plan made by the Partnership on behalf of the executive, and distributions received by the executive on unvested restricted Partnership units (the value of the restricted units is described under footnote (2) above and not repeated here.)
|
Estimated Future Payouts Under
Non-Equity Incentive Program
Awards (1)
|
Estimated Future Payouts Under
Equity Incentive Program
Awards
|
|||||||||||
Name
|
Type
of
Award
|
Grant
Date
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
Threshold
($)
|
Target
($)
|
Maximum
($)
|
All
Other
Unit
Awards:
Number of
Shares
of Unit
or Units
(#) (2)
|
All Other
Options
Awards:
Number of Securities Underlying Options (#)
|
Closing
Price
on
Grant
Date
($/Sh)
|
Grant
Date
Fair
Value
of
Stock
and
Option Awards
($)
|
David L.
Nunes
President
and CEO
|
LTIP
Cycle 1
|
No
grant date
|
-
|
180,000
|
360,000
|
|||||||
LTIP
Cycle 2
|
No
grant date
|
-
|
180,000
|
360,000
|
||||||||
LTIP
Cycle 3
|
No
grant date
|
-
|
180,000
|
360,000
|
||||||||
RU
|
January
12, 2010
|
8,000
|
24.70
|
197,600
|
||||||||
Thomas M. Ringo
V.P. and
CFO
|
LTIP
Cycle 1
|
No
grant date
|
-
|
80,000
|
160,000
|
|||||||
LTIP
Cycle 2
|
No
grant date
|
-
|
80,000
|
160,000
|
||||||||
LTIP
Cycle 3
|
No
grant date
|
-
|
80,000
|
160,000
|
||||||||
RU
|
January
12, 2010
|
2,650
|
24.70
|
65,455
|
(1)
|
Reflects potential awards under the LTIP. The LTIP was implemented in 2010 with Cycle 1 corresponding to the performance period 2008 – 10, Cycle 2 to performance period 2009 – 11, and Cycle 3 to performance period 2010 – 12. Payouts for Cycle 1 are reflected in the Summary Compensation Table. If there are payouts for Cycles 2 and 3 they will occur in January 2012 and January 2013, respectively. A description of how the LTIP works is described above beginning on page 86.
|
(2)
|
Reflects the grant of time-based restricted units that will vest over a two-year period.
|
Option Awards
|
Unit Awards
|
|||||||||||||||
Name
|
Number of Units
Acquired on Exercise
|
Value Realized
on Exercise
|
Number of Units
Acquired on Vesting
|
Value Realized
on Vesting
|
||||||||||||
(#) |
($)
|
(#) (1) |
($)
|
|||||||||||||
David L. Nunes
President and CEO
|
41,000 | $ | 516,265 | 4,500 | $ | 111,870 | ||||||||||
Thomas M. Ringo
V.P. and CFO
|
8,100 | $ | 172,652 | 2,500 | $ | 62,150 |
Name
|
Fees
Earned
or Paid
in Cash
($)
|
Unit
Awards
($) (1)
|
Option
Awards
($) (2)
|
Non
Equity
Incentive
Program
Compensation
($)
|
Change in
Pension
Value and
Non-qualified
Deferred
Compensation
Earnings
|
All Other
Compensation
($) (3)
|
Total
($)
|
John E. Conlin
|
36,250
|
39,990
|
-
|
-
|
-
|
2,063
|
51,258
|
Douglas E. Norberg
|
29,500
|
39,990
|
-
|
-
|
-
|
2,063
|
47,283
|
Peter T. Pope
|
26,500
|
39,990
|
-
|
-
|
-
|
2,063
|
44,283
|
J. Thurston Roach
|
39,500
|
39,990
|
-
|
-
|
-
|
2,063
|
54,283
|
(1)
|
Amounts represent the market value on the date of grant (May 25, 2010) of restricted units received during the year. These units are subject to a trading restriction until the units vest. These unit grants vest 50% on the third anniversary of the grant in May 2013 and the remaining 50% on the fourth anniversary of the grant date in May 2014. For each of Messrs. Norberg, Pope, and Roach
a total of 375 restricted units granted during fiscal year 2006 vested and became eligible for trading on March 8, 2010 and an additional 375 restricted units granted during fiscal year 2007 vested and became eligible for trading on January 31, 2010.
|
(2)
|
No options were awarded in 2010.
|
(3)
|
Amounts represent distributions received on unvested restricted Partnership units and the value realized upon vesting of prior grants of restricted units.
|
Name and Address of
Beneficial Owner
|
Number of
Units
(1)
|
Percent
of Class
|
||
Emily T. Andrews
600 Montgomery Street
35th Floor
San Francisco, CA 94111
|
557,100
|
(2)
|
12.7
|
|
Peter T. Pope
1500 S.W. 1st Avenue
Portland, OR 97201
|
310,762
|
(3)
|
7.1
|
|
James H. Dahl
501 Riverside Avenue, Suite 902
Jacksonville, FL 32202
|
232,291
|
(4)
|
5.3
|
(1)
|
Each beneficial owner has sole voting and investment power unless otherwise indicated. Includes unit options exercisable within 60 days but excludes those options where the exercise price renders them anti-dilutive. Also includes restricted units that are both vested and unvested since beneficial owner receives distributions on all such restricted units.
|
(2)
|
Includes 1,090 units owned by her husband, Adolphus Andrews, Jr. as to which she disclaims beneficial ownership. Also includes a total of 60,000 units held by Pope MGP, Inc. and Pope EGP, Inc., as to which she shares voting and investment power.
|
(3)
|
Includes (a) 200,925 units held by a limited liability company controlled by Mr. Pope; (b) 38,392 units owned by Mr. Pope; (c) 8,820 units held in trust for one of his children; (d) 60,000 units held by Pope MGP, Inc. and Pope EGP, Inc., as to which he shares investment and voting power; and (f) 2,625 unvested restricted units.
|
(4)
|
Mr. Dahl filed a Schedule 13G on February 4, 2011 that declared he is the direct beneficial owner of 40,945 Partnership units and that he owns another 191,346 units through various trusts over which he retains sole voting and investment power.
|
Name
|
Position and Offices
|
Number of
Units
(1)
|
Percent
of
Class
|
|
David L. Nunes
|
Chief Executive Officer and President, Pope MGP, Inc. and the Partnership; Director, Pope MGP, Inc.
|
107,400
|
(2)
|
2.4
|
Thomas M. Ringo
|
Vice President and CFO, Pope MGP, Inc. and the Partnership
|
34,424
|
(3)
|
*
|
John E. Conlin
|
Director, Pope MGP, Inc.
|
18,645
|
(4)
|
*
|
Douglas E. Norberg
|
Director, Pope MGP, Inc.
|
63,508
|
(5)
|
1.4
|
Peter T. Pope
|
Director, Pope MGP, Inc. and Pope EGP, Inc.; President, Pope EGP, Inc.
|
310,762
|
(6)
|
7.1
|
J. Thurston Roach
|
Director, Pope MGP, Inc.
|
11,250
|
(7)
|
*
|
Pope EGP, Inc.
|
Equity General Partner of the Partnership
|
54,000
|
1.2
|
|
Pope MGP, Inc.
|
Managing General Partner of the Partnership
|
6,000
|
*
|
|
All general partners, directors and officers of general partners, and officers of the Partnership as a group (6 individuals and 2 entities) | 545,989 |
(8)
|
12.4
|
(1)
|
Each beneficial owner has sole voting and investment power unless otherwise indicated. Includes unit options that are exercisable within 60 days but excludes those options where the exercise price renders them anti-dilutive. Also includes restricted units that are both vested and unvested since beneficial owner receives distributions on all such restricted units.
|
(2)
|
Units shown for Mr. Nunes include 93,000 owned units and 14,400 of unvested restricted units.
|
(3)
|
Units shown for Mr. Ringo include 28,249 owned units and 6,175 unvested restricted units.
|
(4)
|
Includes 2,625 unvested restricted units issued to Mr. Conlin.
|
(5)
|
Includes 2,625 unvested restricted units issued to Mr. Norberg.
|
(6)
|
Includes (a) 200,925 units held by a limited liability company controlled by Mr. Pope; (b) 38,392 units owned by Mr. Pope; (c) 8,820 units held in trust for one of his children; (d) 60,000 units held by Pope MGP, Inc. and Pope EGP, Inc., as to which he shares investment and voting power; and (f) 2,625 unvested restricted units.
|
(7)
|
Includes 2,625 owned units, currently exercisable options to purchase 6,000 units issued to Mr. Roach, and 2,625 unvested restricted units.
|
(8)
|
For this computation, the 60,000 units held by Pope MGP, Inc. and Pope EGP, Inc. are excluded from units beneficially owned by Mr. Pope. Mr. Pope and Emily T. Andrews, own all of the outstanding stock of Pope MGP, Inc. and Pope EGP, Inc. Includes currently exercisable options to purchase 6,000 units and 31,075 unvested restricted units.
|
Plan category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
(a)
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
(b)
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a))
(c)
|
|||||||||
Equity compensation
plans approved by
security holders
|
47,874 | $ | 14.85 | 1,005,044 | ||||||||
Equity compensation
plans not approved by
security holders
|
- | - | - | |||||||||
Total
|
47,874 | $ | 14.85 | 1,005,044 |
Description of services
|
2010
|
%
|
2009
|
%
|
||||||||||||
Audit (1)
|
$ | 319,500 | 80 | % | $ | 325,000 | 79 | % | ||||||||
Audit related (2)
|
40,500 | 10 | % | 40,000 | 10 | % | ||||||||||
Tax (3):
|
||||||||||||||||
Tax return preparation
|
9,200 | 3 | % | 9,200 | 2 | % | ||||||||||
General tax consultation
|
29,225 | 7 | % | 35,000 | 9 | % | ||||||||||
Total
|
$ | 398,425 | 100 | % | $ | 409,200 | 100 | % |
(1) Fees represent the arranged fees for the years presented, including the annual audit of
internal controls as mandated under Sarbanes-Oxley section 404, and out-of-pocket expenses
reimbursed during the years presented.
|
(2) Fees represent the arranged fees for the years presented in connection with the audits of Olympic
Resource Management LLC, ORM Timber Fund I LP, and ORM Timber Operating Company II, LLC.
|
(3) Fees paid for professional services in connection with tax consulting and tax return preparation.
|
Financial Statements
|
Page
|
|
Reports of Independent Registered Public Accounting Firm
|
54
|
|
Consolidated Balance Sheets
|
56
|
|
Consolidated Statements of Operations
|
57
|
|
Consolidated Statements of Partners’ Capital and Comprehensive Income (loss)
|
58
|
|
Consolidated Statements of Cash Flows
|
59
|
|
Notes to Consolidated Financial Statements
|
61
|
|
Financial Statement Schedule
|
1000
|
Environmental Remediation Liability
|
||||||||||||||||
Balances at the
Beginning of the
Period
|
Additions to
Accrual
|
Expenditures
for Remediation
|
Balances at
the End of the
Period
|
|||||||||||||
Year Ended December 31, 2008
|
1,994,000 | - | 440,000 | 1,554,000 | ||||||||||||
Year Ended December 31, 2009
|
1,554,000 | 30,000 | 315,000 | 1,269,000 | ||||||||||||
Year Ended December 31, 2010
|
1,269,000 | 875,000 | 211,000 | 1,933,000 |
No.
|
|
Document
|
|
|
|
3.1
|
|
Certificate of Limited Partnership. (1)
|
3.2
|
|
Limited Partnership Agreement, dated as of November 7, 1985. (1)
|
|
|
|
3.3
|
|
Amendment to Limited Partnership Agreement dated December 16, 1986. (2)
|
|
|
|
3.4
|
|
Amendment to Limited Partnership Agreement dated March 14, 1997. (4)
|
3.5
|
|
Certificate of Incorporation of Pope MGP, Inc. (1)
|
|
|
|
3.6
|
|
Amendment to Certificate of Incorporation of Pope MGP, Inc. (3)
|
|
|
|
3.7
|
|
Bylaws of Pope MGP, Inc. (1)
|
|
|
|
3.8
|
|
Certificate of Incorporation of Pope EGP, Inc. (1)
|
|
|
|
3.9
|
|
Amendment to Certificate of Incorporation of Pope EGP, Inc. (3)
|
|
|
|
3.10
|
|
Bylaws of Pope EGP, Inc. (1)
|
3.11
|
Amendment to Limited Partnership Agreement dated October 30, 2007. (12)
|
|
3.12
|
Audit Committee Charter. (10)
|
|
4.1
|
|
Specimen Depositary Receipt of Registrant. (1)
|
|
|
|
4.2
|
|
Limited Partnership Agreement dated as of November 7, 1985, as amended December 16, 1986 and March 14, 1997 (
see
Exhibits 3.2, 3.3 and 3.4).
|
4.3
|
1997 Unit Option Plan Summary (5) and Pope Resources 2005 Unit Incentive Plan. (11)
|
|
|
|
|
9.1
|
|
Shareholders Agreement entered into by and among Pope MGP, Inc., Pope EGP, Inc., Peter T. Pope, Emily T. Andrews, P&T, present and future directors of Pope MGP, Inc. and the Partnership, dated as of November 7, 1985 included as Appendix C to the P&T Notice and Proxy Statement filed with the Securities and Exchange Commission on November 12, 1985, a copy of which was filed as Exhibit 28.1 to the Partnership’s registration on Form 10 identified in footnote (1) below. (1)
|
|
|
|
10.1
|
|
Transfer and Indemnity Agreement between the Partnership and P&T dated as of December 5, 1985. (1)
|
|
|
|
10.2
|
|
Environmental Remediation Agreement. (7)
|
10.3
|
|
Timberland Deed of Trust and Security Agreement with Assignment of Rents between Pope Resources, Jefferson Title Company and John Hancock Mutual Life Insurance Company dated April 29, 1992. (6)
|
|
|
|
10.4
|
|
Amendment to Timberland Deed of Trust and Security Agreement with Assignment of Rents between Pope Resources, Jefferson Title Company and John Hancock Mutual Life Insurance Company dated May 13, 1992. (6)
|
10.5
|
|
Second Amendment to Timberland Deed of Trust and Security Agreement with Assignment of Rents between Pope Resources, Jefferson Title Company and John Hancock Mutual Life Insurance Company, dated May 25 1993. (6)
|
10.6
|
|
Third Amendment to Timberland Deed of Trust and Security Agreement with Assignment of Rents between Pope Resources, Jefferson Title Company and John Hancock Mutual Life Insurance Company dated December 19, 1995. (6)
|
|
|
|
10.7
|
|
Fourth Amendment to Timberland Deed of Trust and Security Agreement with Assignment of Rents between Pope Resources, Jefferson Title Company and John Hancock Mutual Life Insurance Company dated December 20, 1999. (6)
|
|
|
|
10.8
|
|
Amended and Restated Timberland Deed of Trust and Security Agreement with Assignment of Rents and Fixture Filing between Pope Resources and John Hancock Life Insurance Company dated March 29, 2001. (6)
|
|
|
|
10.9
|
|
Promissory Note from Pope Resources to John Hancock Mutual Life Insurance Company dated April 29, 1992. (6)
|
10.10
|
|
Amendment to Promissory Note from Pope Resources to John Hancock Mutual Life Insurance Company dated May 25, 1993. (6)
|
|
|
|
10.11
|
|
Second Amendment to Promissory Note from Pope Resources to John Hancock Mutual Life Insurance Company, dated December 19, 1995. (6)
|
|
|
|
10.12
|
|
Third Amendment to Promissory Note from Pope Resources to John Hancock Mutual Life Insurance Company dated December 20, 1999. (6)
|
|
|
|
10.13
|
|
Fourth Amendment to Promissory Note from Pope Resources to John Hancock Mutual Life Insurance Company dated March 29, 2001. (6)
|
10.14
|
|
Note Purchase Agreement between Pope Resources, John Hancock Life Insurance Company and John Hancock Variable Life Insurance Company, dated March 29, 2001. (6)
|
|
|
|
10.15
|
|
Class A Fixed Rate Senior Secured Note from Pope Resources to John Hancock Life Insurance Company dated March 29, 2001, in the principal amount of $23,500,000. (6)
|
10.16
|
|
Class A Fixed Rate Senior Secured Note from Pope Resources to John Hancock Life Insurance Company dated March 29, 2001 in the principal amount of $4,500,000. (6)
|
|
|
|
10.17
|
|
Class A Fixed Rate Senior Secured Note from Pope Resources to John Hancock Variable Life Insurance Company dated March 29, 2001, in the principal amount of $2,000,000. (6)
|
|
|
|
10.18
|
|
Timberland Deed of Trust and Security Agreement With Assignment of Rents and Fixture Filing between Pope Resources, Jefferson Title Company and John Hancock Life Insurance Company, dated March 29, 2001. (6)
|
10.19
|
Purchase and sale agreement with Costco Wholesale Corp dated December 22, 2003. (8)
|
|
10.20
|
Form of Change of control agreement. (10)
|
|
10.21
|
Purchase and sales agreement for Quilcene Timberlands dated September 28, 2004. (9)
|
|
10.22
|
Long term management agreement with Cascade Timberlands LLC dated December 31, 2004. (9)
|
10.23
|
First amendment to Note purchase agreement with John Hancock Life Insurance Company. (10)
|
|
10.24
|
Second amendment to Note purchase agreement with John Hancock Life Insurance Company. (10)
|
|
10.25
|
Third amendment to Note purchase agreement with John Hancock Life Insurance Company. (10)
|
|
10.26
|
Fourth amendment to Note purchase agreement with John Hancock Life Insurance Company. (10)
|
|
10.27
|
Master Loan Agreement between Pope Resources and Northwest Farm Credit Services, PCA dated July 31, 2008. (15)
|
|
10.28
|
Revolving Operating Note from Pope Resources to Northwest Farm Credit Services, PCA dated July 31, 2008. (15)
|
|
10.29
|
Master Loan Agreement between Pope Resources and Northwest Farm Credit Services, PCA dated September 25, 2009. (16)
|
|
10.30
|
Term Note from Pope Resources to Northwest Farm Credit Services, PCA dated September 25, 2009. (16)
|
|
10.31
|
First amendment to revolving operating note with Northwest Farm Credit Services, PCA dated September 25, 2009. (16)
|
|
10.32
|
Mortgage to Northwest Farm Credit Services, PCA, dated September 25, 2009. (16)
|
|
10.33
|
First Amended and Restated Master Loan Agreement between Pope Resources and Northwest Farm Credit Services, FLCA dated June 10, 2010.
|
|
10.34
|
Amendment No. 1 to First Amended and Restated Master Loan Agreement between Pope Resources and Northwest Farm Credit Services, FLCA dated August 6, 2010.
|
|
10.35
|
First Amended and Restated Term Note from Pope Resources to Northwest Farm Credit Services, FLCA dated June 10, 2010
|
|
10.36
|
Term Note from Pope Resources to Northwest Farm Credit Services, FLCA dated June 10, 2010.
|
|
10.37
|
First Amended and Restated Master Loan Agreement between Pope Resources and Northwest Farm Credit Services, PCA dated June 10, 2010.
|
|
10.38
|
Amendment No. 1 to First Amended and Restated Master Loan Agreement between Pope Resources and Northwest Farm Credit Services, PCA dated August 6, 2010.
|
|
10.39
|
Revolving Operating Note from Pope Resources to Northwest Farm Credit Services, PCA dated June 10, 2010.
|
|
10.40
|
Amendment No. 1 to Revolving Operating Note from Pope Resources to Northwest Farm Credit Services, PCA dated June 15, 2010.
|
|
10.41
|
Mortgage, Financing statement and Fixture Filing executed by Pope Resources in favor of Northwest Farm Credit Services, FLCA dated June 10, 2010.
|
|
10.42
|
Mortgage, Financing statement and Fixture Filing executed by Pope Resources in favor of Northwest Farm Credit Services, PCA dated June 10, 2010.
|
10.43
|
Loan Agreement between ORM Timber Operating Company II, LLC and Metropolitan Life Insurance Company dated September 1, 2010.
|
|
10.44
|
First Amendment to Loan Agreement between ORM Timber Operating Company II, LLC and Metropolitan Life Insurance Company dated February 7, 2011.
|
|
10.45
|
Promissory Note from ORM Timber Operating Company II, LLC to Metropolitan Life Insurance Company dated September 1, 2010.
|
|
10.46
|
Guaranty by ORM Timber Fund II, Inc. in favor of Metropolitan Life Insurance Company dated September 1, 2010.
|
|
10.47
|
Deed of Trust, Security Agreement, Assignment of Leases and Rents and Fixture Filing between ORM Timber Operating Company II, LLC and Metropolitan Life Insurance Company dated September 1, 2010.
|
|
10.48
|
Trust Deed, Security Agreement, Assignment of Leases and Rents and Fixture Filing between ORM Timber Operating Company II, LLC and Metropolitan Life Insurance Company dated September 1, 2010.
|
|
10.49
|
Incentive Compensation Program Summary – revised February 2011.
|
|
18.1
|
Letter from Independent Registered Public Accounting Firm related to change in accounting principle. (16)
|
|
21.1
|
Significant Subsidiaries.
|
|
23.1
|
Consent of Registered Independent Public Accounting Firm. (13)
|
|
31.1
|
Certificate of Chief Executive Officer. (13)
|
|
31.2
|
Certificate of Chief Financial Officer. (13)
|
|
32.1
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (13)
|
|
32.2
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (13)
|
|
99.1
|
Press Release of the Registrant dated February 14, 2010 (14)
|
(1)
|
Incorporated by reference from the Partnership’s registration on Form 10 filed under File No. 1-9035 and declared effective on December 5, 1985.
|
|
|
(2)
|
Incorporated by reference from the Partnership’s annual report on Form 10-K for the fiscal year ended December 31, 1987.
|
|
|
(3)
|
Incorporated by reference from the Partnership’s annual report on Form 10-K for the fiscal year ended December 31, 1988.
|
|
|
(4)
|
Incorporated by reference from the Partnership’s Proxy Statement filed on February 14, 1997.
|
|
|
(5)
|
Incorporated by reference to the Company’s Form S-8 Registration Statement (SEC file number 333-46091) filed with the Commission on February 11, 1998.
|
|
|
(6)
|
Incorporated by reference to the Partnership’s annual report on Form 10-K for the fiscal year ended December 31, 2001.
|
|
|
(7)
|
Incorporated by reference to the Partnership’s annual report on Form 10-K for the fiscal year ended December 31, 2002.
|
(8)
|
Incorporated by reference to the Partnership’s annual report on Form 10-K for the fiscal year ended December 31, 2003.
|
(9)
|
Incorporated by reference to the Partnership’s annual report on Form 10-K for the fiscal year ended December 31, 2004.
|
(10)
|
Incorporated by reference to the Partnership’s annual report on Form 10-K for the fiscal year ended December 31, 2005.
|
(11)
|
Filed with Form S-8 on September 9, 2005.
|
(12)
|
Incorporated by reference to the Partnership’s annual report on Form 10-K for the fiscal year ended December 31, 2007.
|
|
|
(13)
|
Filed with this annual report for the fiscal year ended December 31, 2009.
|
(14)
|
Incorporated by reference to the Current Report on Form 8-K filed by the Registrant on February 12, 2010.
|
(15)
|
Incorporated by reference to the Current Report on Form 10-Q filed by the Registrant on August 6, 2008.
|
(16)
|
Incorporated by reference to the Current Report on Form 10-Q filed by the Registrant November 5, 2009.
|
POPE RESOURCES, A Delaware
|
|
Limited Partnership
|
|
By POPE MGP, INC.
|
|
Managing General Partner
|
Date: March 9, 2011
|
|
By /s/ David L. Nunes
|
President and
|
||
Chief Executive Officer
|
Date: March 9, 2011
|
By /s/ David L. Nunes
|
|
David L. Nunes,
|
||
President and Chief Executive Officer (principal executive officer), Partnership and Pope MGP, Inc.; Director, Pope MGP, Inc.
|
||
Date: March 9, 2011
|
By /s/ Thomas M. Ringo
|
|
Thomas M. Ringo
|
||
Vice President & CFO (principal financial and accounting officer), Partnership and Pope MGP, Inc.
|
||
Date: March 9, 2011
|
By /s/ John E. Conlin
|
|
John E. Conlin
|
||
Director, Pope MGP, Inc.
|
||
Date: March 9, 2011
|
By /s/ Douglas E. Norberg
|
|
Douglas E. Norberg
|
||
Director, Pope MGP, Inc.
|
||
Date: March 9, 2011
|
By /s/ Peter T. Pope
|
|
Peter T. Pope
|
||
Director, Pope MGP, Inc.
|
||
Date: March 9, 2011
|
By /s/ J. Thurston Roach
|
|
J. Thurston Roach
|
||
Director, Pope MGP, Inc.
|
TERMS
|
SECTION
|
|
Definitions
|
1
|
|
Loans
|
2
|
|
Loans
|
2.01
|
|
Fees
|
2.02
|
|
Evidence of Debt
|
2.03
|
|
Payments Generally
|
2.04
|
|
Accounting Terms
|
2.05
|
|
General Authorization
|
3
|
|
Conditions Precedent
|
4
|
|
Documents Required for Closing
|
4.01
|
|
Conditions precedent to Advances Under All Loans
|
4.02
|
|
Liens and Collateral
|
5
|
|
Creation of Liens
|
5.01
|
|
Perfection of Liens
|
5.02
|
|
Collateral Pool
|
5.03
|
|
Release of Liens on Collateral
|
5.04
|
|
Representations and Warranties
|
6
|
|
Representations and Warranties of Borrower
|
6.01
|
|
Representations and Warranties of Lender
|
6.02
|
|
Survival
|
6.03
|
|
Covenants
|
7
|
|
Affirmative Covenants
|
7.01
|
|
Financial Covenants
|
7.02
|
|
Negative Covenants
|
7.03
|
|
Default
|
8
|
|
Events of Default
|
8.01
|
|
Notice and Opportunity to Cure
|
8.02
|
|
Prepayment and Breakage Fees
|
9
|
|
Prepayment Fee
|
9.01
|
Breakage Fee
|
9.02
|
Participation
|
9.03
|
Enforcement and Waiver; Indemnity
|
10
|
Enforcement and Waiver by Lender
|
10.01
|
Indemnity; Waiver of Damages by Borrower
|
10.02
|
Communications
|
11
|
Notices and Other Communications
|
11.01
|
Facsimile Documents and Signatures
|
11.02
|
Use of E-mail
|
11.03
|
Participation
|
12
|
Governing Law; Jurisdiction; Etc.
|
13
|
Governing Law
|
13.01
|
Submission to Jurisdiction
|
13.02
|
Waiver of Venue
|
13.03
|
Service of Process
|
13.04
|
Waiver of Jury Trial
|
13.05
|
Consultation with Counsel
|
13.06
|
Miscellaneous
|
14
|
Construction
|
14.01
|
Binding Effect, Assignment and Entire Agreement
|
14.02
|
Severability
|
14.03
|
No Personal Liability of General Partners
|
14.04
|
Exhibit A: Form of Compliance Certificate
|
|
Exhibit B: Covenant Compliance Worksheet
|
|
Exhibit C: Prepayment Fee and Breakage Fee
|
|
i.
|
If to Borrower:
Attention: Thomas M. Ringo
19245 Tenth Ave. NE
Poulsbo, WA 98370
Facsimile: (360) 697-1476
E-mail: tringo@orminc.com
|
|
ii.
|
If to Lender:
Attention: Kristy Searles
Northwest Farm Credit Services, FLCA
650 Hawthorne Ave. SE, Suite #210
Salem, OR 97301
Facsimile: (503) 373-3006
E-mail: NWFCSsalemagribusiness@farm-credit.com
|
LENDER:
NORTHWEST FARM CREDIT SERVICES, FLCA
|
|||
By: | |||
Authorized Agent
|
|||
BORROWER:
POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP
By: Pope MGP Inc., a Delaware corporation, its Managing General Partner
|
|||
By: | |||
David L. Nunes, President and CEO
|
|||
|
POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP
|
|
By: ______________________________
|
|
Name: ____________________________
|
|
Title: _____________________________
|
I.
|
Section 7.02 a. - Indebtedness to Total Capitalization Ratio
|
|
(measured annually at the Fiscal Year-end)
|
||
A. Companies' Indebtedness at Calculation Date
|
$
|
|
B. Indebtedness associated with non-controlling interest in Timber Funds at
|
||
Calculation Date
|
$
|
|
C. Numerator (Line I.A. minus Line I.B.)
|
$
|
|
D. Total Capitalization at Calculation Date
|
||
I. Adjusted Partners' Capital at Calculation Date
|
||
a.
Partners' capital per GAAP at Calculation Date
|
$
|
|
b. Book Value of timberland at Calculation Date
|
$
|
|
c. Book value of timber and roads net of depletion at Calculation Date
|
$
|
|
d. Book value of timberland, timber, and roads net of depletion for Timber
|
$
|
|
Funds at Calculation Date
|
||
e. Most recent Biennial Appraised Timberland Value
|
$
|
|
f. Adjusted Partners Capital (Line I.D.1.a. minus I.D.1.b. minus I.D.1.c.
|
||
plus I.D.1.d. plus I.D.1.e.)
|
$
|
|
2. Numerator from line I.C. above
|
$
|
|
E. Denominator (Line I.D.1.f. plus Line I.D.2.)
|
$
|
|
Ratio of Indebtedness to Total Capitalization (Line I.C.
divided
by Line I.E.)
|
||
Maximum Allowed
|
0.30
|
II.
|
Section 7.02 b. - Consolidated Cash Flow Coverage Ratio
|
|
(measured quarterly beginning with the Fiscal Year-end 2011)
|
||
A. Consolidated EBITDDA for the prior four Fiscal Quarters ending on the above
|
||
date (the "Subject Period")
|
||
1. Consolidated Net Income for the subject period
|
$
|
|
2. Consolidated Interest Expense for the subject period
|
$
|
|
3. Consolidated depreciation expense for the subject period
|
$
|
|
4. Consolidated amortization expense for the subject period
|
$
|
|
5. Consolidated depletion expense for the subject period
|
||
(excluding the portion associated with the non-controlling interest in
|
||
Timber Funds)
|
$
|
|
6. Cost of land sold
|
$
|
|
7. Consolidated Taxes for the subject period (to the extent considered in
|
||
calculating Consolidated Net Income)
|
$
|
|
8. Consolidated EBITDDA
|
||
(the sum of Lines II.A.1 through II.A.7. inclusive)
|
$
|
|
B. Consolidated Capital Expenditures
|
$
|
|
C. Numerator (Line II.A.8. minus Line II.B.)
|
$
|
|
D. Denominator - debt service for subject period
|
$
|
|
1. Consolidated Interest Expense for subject period
|
$
|
|
2. Scheduled principal payments and principal payments associated with
|
||
asset sales during the subject period
|
$
|
|
3. Denominator - debt service for subject period
|
||
(Line II.D.1. plus Line II.D.2.)
|
$
|
|
Consolidated Cash Flow Coverage Ratio (Line II.C.
divided
by Line II.D.3.)
|
||
Minimum Allowed
|
1.1 : 1
|
|
III.
|
Section 7.02 c. - Loans to Biennial Appraised Timberland Value
|
|
(measured annually at Fiscal Year-end)
|
||
A. Combined Balance of Loan Nos. 56548-811,841 and 442
|
$
|
|
B. Most recent Biennial Appraised Timberland Value
|
$
|
|
Loan to Value Ratio (Line III.A.
divided
by Line III.B.)
|
||
Maximum Allowed
|
50%
|
|
IV.
|
Section 7.02 d. - Loans per MBF
|
|
(measured annually)
|
||
A. Combined Balance of Loan Nos. 56548-811,841 and 442
|
$
|
|
B. Total Merchantable Timber volume on Collateral at Calculation Date
|
||
1. Merchantable Timber volume on Collateral at end of prior subject
|
||
period
|
||
2. Merchantable Timber volume harvested from Collateral for the
|
||
subject period
|
||
3. Merchantable Timber volume growth on Collateral for the
|
||
subject period
|
||
4. Merchantable Timber volume change as a result of addition or
|
||
subtraction of timberland property during subject period
|
||
5. Other changes in Merchantable Timber volume, due to cruises
|
||
and other, for the subject period
|
||
C. Merchantable Timber volume on Collateral as of Calculation Date
|
||
(Line B.1. minus Line IV.B.2. plus Line IV.B.3 plus or minus Line
|
||
IV.B.4 plus or minus Line IV.B.5)
|
||
Loans per MBF (Line IV.A.
divided
by Line IV.C.)
|
||
Maximum Allowed
|
$250/MBF
|
A. | Definitions . For purposes of this Exhibit C, the following definitions apply: | |
1.
|
“Prepayment Amount,” for the purpose of a Prepayment Fee, means the amount of any principal prepayment.
|
|
2.
|
“Prepayment Amount,” for the purpose of a Breakage Fee, means the principal that Borrower has indicated on a Notice to be advanced or priced using a Fixed Rate Option.
|
|
3.
|
“Remaining Fixed Pricing Period,” for any principal priced with a Fixed Rate Option, means the period of time beginning (a) on the date a principal prepayment is made or, (b) in the case of a Breakage Fee, on the date Notice is given and ending on the Fixed Rate Maturity Date.
|
|
4.
|
“Initial Reference Rate,” for any principal priced with a Fixed Rate Option, means the annualized rate used by Lender or a participant to obtain the funds loaned to Borrower in the case of a Prepayment Fee, or the annualized rate applicable on the last Pricing Date, or on the date Notice of prepayment is given, as the case may be, in the case of a Breakage Fee.
|
|
5.
|
“Final Reference Rate” means the annualized rate Lender or a participant would use to fund a new advance in such amount for the Remaining Fixed Pricing Period on the date of such prepayment. For a Breakage Fee, the Final Reference Rate means the annualized rate as of the date Notice is given.
|
|
B.
|
Calculation of Prepayment/Breakage Fee
. The Prepayment and the Breakage Fees are calculated on a make-whole basis in five (5) steps as provided below:
|
|
1.
|
Compare the Initial Reference Rate and the Final Reference Rate. If the Initial Reference Rate is less than or equal to the Final Reference Rate, the Prepayment / Breakage Fee is zero. If the Initial Reference Rate is greater than the Final Reference Rate, complete the following steps to calculate the Prepayment / Breakage Fee.
|
|
2.
|
Calculate the interest payment that will accrue on the Prepayment Amount over the Remaining Fixed Pricing Period at the Initial Reference Rate (“Initial Interest Amounts”).
|
|
3.
|
Calculate the interest payment that will accrue on the Prepayment Amount over the Remaining Fixed Pricing Period at the Final Reference Rate (“Final Interest Amounts”).
|
|
4.
|
Calculate the “Differential Interest Amount” for each interest payment due during the Remaining Fixed Pricing Period by subtracting the Final Interest Amount from the Initial Interest Amount for each such payment.
|
5.
|
The Prepayment or Breakage Fee is the sum of the discounted present value of each Differential Interest Amount, discounted at the Final Reference Rate from the date such payment would be due back to the prepayment date, or in the case of a Breakage Fee, on the date Notice is given.
|
An example of a Prepayment / Breakage Fee calculation is attached hereto as Exhibit C-1.
|
Net Present Value of Differential Interest Amounts – Step 5
|
|||||
Interest Payment
|
Final Reference
Rate |
Present Value
Factor |
Differential
Interest Amount |
Present Value
|
|
1
|
5.00%
|
0.98765
|
$1,250.00
|
$1,234.57
|
|
Prepayment/Breakage Fee
|
$1,234.57
|
By:
|
||
Authorized Agent |
By: | |||
Thomas M. Ringo, Vice President and CFO
|
Date: June 10, 2010 |
Pope Resources, a Delaware Limited Partnership
Customer/Note No. 56548-841
|
LENDER:
NORTHWEST FARM CREDIT SERVICES, FLCA
|
||||
By:
|
Authorized Agent
|
|||
BORROWER:
POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP
|
||||
By:
|
Pope MGP Inc., a Delaware corporation, its Managing General Partner
|
|||
By:
|
David L. Nunes, President and CEO
|
Pay to the Order of CoBank, ACB.
|
Technical Accounting Services
Northwest Farm Credit Services, FLCA
1700 South Assembly Street
Spokane, WA 99224-2121
|
P. O. Box 2515
Spokane, WA 99220-2515
|
Fax: 509-340-5508
Tel: 1-800-216-4535
|
NORTHWEST FARM CREDIT SERVICES, FLCA
|
|||||
Date: | By: | ||||
Authorized Agent |
Date: June 10, 2010 |
Pope Resources, a Delaware Limited Partnership
Customer/Note No. 56548-442
|
Rate Options
|
Applicable Margin
|
Base Rate
|
3.50%
|
5- and 7-year Fixed Rate
|
1.70
%
|
15-year Fixed Rate
|
1.60%
|
BORROWER:
POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP
|
||||
By:
|
Pope MGP Inc., a Delaware corporation, its Managing General Partner
|
|||
By:
|
David L. Nunes, President and CEO
|
Pay to the Order of CoBank, ACB.
|
Technical Accounting Services
Northwest Farm Credit Services,
FLCA
1700 South Assembly Street
Spokane, WA 99224-2121
|
P. O. Box 2515
Spokane, WA 99220-2515
|
Fax: 509-340-5508
Tel: 1-800-216-4535
|
NORTHWEST FARM CREDIT SERVICES, FLCA
|
|||||
Date: | By: | ||||
Authorized Agent |
TERMS | SECTION |
Definitions
|
1
|
Loans
|
2
|
Loans
|
2.01
|
Fees
|
2.02
|
Evidence of Debt
|
2.03
|
Payments Generally
|
2.04
|
Accounting Terms
|
2.05
|
General Authorization
|
3
|
Conditions Precedent
|
4
|
Documents Required for Closing
|
4.01
|
Conditions Precedent to Advances Under All Loans
|
4.02
|
Liens and Collateral
|
5
|
Creation of Liens
|
5.01
|
Perfection of Liens
|
5.02
|
Collateral Pool
|
5.03
|
Release of Liens on Collateral
|
5.04
|
Representations and Warranties
|
6
|
Representations and Warranties of Borrower
|
6.01
|
Representations and Warranties of Lender
|
6.02
|
Survival
|
6.03
|
Covenants
|
7
|
Affirmative Covenants
|
7.01
|
Financial Covenants
|
7.02
|
Negative Covenants
|
7.03
|
Default
|
8
|
Events of Default
|
8.01
|
Notice and Opportunity to Cure
|
8.02
|
Prepayment and Breakage Fees
|
9
|
Prepayment Fee
|
9.01
|
TERMS | SECTION |
Breakage Fee
|
9.02
|
Participation
|
9.03
|
Enforcement and Waiver; Indemnity
|
10
|
Enforcement and Waiver by Lender
|
10.01
|
Indemnity; Waiver of Damages by Borrower
|
10.02
|
Communications
|
11
|
Notices and Other Communications
|
11.01
|
Facsimile Documents and Signatures
|
11.02
|
Use of E-mail
|
11.03
|
Participation
|
12
|
Governing Law; Jurisdiction; Etc.
|
13
|
Governing Law
|
13.01
|
Submission to Jurisdiction
|
13.02
|
Waiver of Venue
|
13.03
|
Service of Process
|
13.04
|
Waiver of Jury Trial
|
13.05
|
Consultation with Counsel
|
13.06
|
Miscellaneous
|
14
|
Construction
|
14.01
|
Binding Effect, Assignment and Entire Agreement
|
14.02
|
Severability
|
14.03
|
No Personal Liability of General Partners
|
14.04
|
LENDER:
NORTHWEST FARM CREDIT SERVICES, PCA
|
||||
By:
|
Authorized Agent
|
|||
BORROWER:
POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP
|
||||
By:
|
Pope MGP Inc., a Delaware corporation, its Managing General Partner
|
|||
By:
|
David L. Nunes, President and CEO
|
I.
|
Section 7.02 a. - Indebtedness to Total Capitalization Ratio
|
|
(measured annually at the Fiscal Year-end)
|
||
A. Companies' Indebtedness at Calculation Date
|
$
|
|
B. Indebtedness associated with non-controlling interest in Timber Funds at
|
||
Calculation Date
|
$
|
|
C. Numerator (Line I.A. minus Line I.B.)
|
$
|
|
D. Total Capitalization at Calculation Date
|
||
1. Adjusted Partners' Capital at Calculation Date
|
||
a. Partners' capital per GAAP at Calculation Date
|
$
|
|
b. Book Value of timberland at Calculation Date
|
$
|
|
c. Book value of timber and roads net of depletion at Calculation Date
|
$
|
|
d. Book value of timberland, timber, and roads net of depletion for Timber
|
$
|
|
Funds at Calculation Date
|
||
e. Most recent Biennial Appraised Timberland Value
|
$
|
|
f. Adjusted Partners Capital (Line I.D.1.a. minus I.D.1.b. minus I.D.1.c.
|
||
plus I.D.1.d. plus I.D.1.e.)
|
$
|
|
2. Numerator from line I.C. above
|
$
|
|
E. Denominator (Line I.D.1.f. plus Line I.D.2.)
|
$
|
|
Ratio of Indebtedness to Total Capitalization (Line I.C.
divided
by Line I.E.)
|
||
Maximum Allowed
|
0.30
|
|
II.
|
Section 7.02 b. - Loans to Biennial Appraised Timberland Value
|
|
(measured annually at Fiscal Year-end)
|
||
A. Combined Balance of Loan Nos. 56548-811,841 and 442
|
$
|
|
B. Most recent Biennial Appraised Timberland Value
|
$
|
|
Loan to Value Ratio (Line II.A.
divided
by Line II.B.)
|
||
Maximum Allowed
|
50%
|
|
III.
|
Section 7.02 c. - Loans per MBF
|
|
(measured annually)
|
||
A. Combined Balance of Loan Nos. 56548-811,841 and 442
|
$
|
|
B. Total Merchantable Timber volume on Collateral at Calculation Date
|
||
1. Merchantable Timber volume on Collateral at end of prior subject
|
||
period
|
||
2. Merchantable Timber volume harvested from Collateral for the
|
||
subject period
|
||
3. Merchantable Timber volume growth on Collateral for the
|
||
subject period
|
||
4. Merchantable Timber volume change as a result of addition or
|
||
subtraction of timberland property during subject period
|
||
5. Other changes in Merchantable Timber volume due to cruises
|
||
and other for the subject period
|
||
C. Merchantable Timber volume on Collateral as of Calculation Date
|
||
(Line B.1. minus Line III.B.2. plus Line III.B.3 plus or minus Line III.B.4.
|
||
plus or minus Line III.B.5)
|
||
Loans per MBF (Line III.A.
divided
by Line III.C.)
|
||
Maximum Allowed
|
$250/MBF
|
IV.
|
Consolidated Interest Coverage Ratio (Pricing Only) - (measured quarterly)
|
|
A. Consolidated EBITDDA for the prior four Fiscal Quarters ending on the above
|
||
date (the "subject period")
|
||
1. Consolidated Net Income for the subject period
|
$
|
|
2. Consolidated Interest Expense for the subject period
|
$
|
|
3. Consolidated depreciation expense for the subject period
|
$
|
|
4. Consolidated amortization expense for the subject period
|
$
|
|
5. Consolidated depletion expense for the subject period
|
||
(excluding the portion associated with the non-controlling interest in
|
||
Timber Funds)
|
$
|
|
6. Cost of land sold
|
$
|
|
7. Consolidated Taxes for the subject period (to the extent considered in
|
||
calculating Consolidated Net Income)
|
$
|
|
8. John Hancock Insurance Company make whole costs
|
||
(not applicable after March 31, 2011)
|
$
|
|
9. Consolidated EBITDDA
|
||
(the sum of Lines IV.A.1 through I.A.8. inclusive)
|
$
|
|
B. Consolidated Capital Expenditures
|
$
|
|
C. Numerator (Line IV.A.9. minus Line B.)
|
$
|
|
D. Denominator - Consolidated Interest Expense for subject Period
|
$
|
|
E. Consolidated Interest Coverage Ratio (Line IV.C.
divided
by Line IV.D.)
|
|
1.
|
“Prepayment Amount,” for the purpose of a Prepayment Fee, means the amount of any principal prepayment.
|
|
2.
|
“Prepayment Amount,” for the purpose of a Breakage Fee, means the principal that Borrower has indicated on a Notice to be advanced or priced using a Fixed Rate Option.
|
|
3.
|
“Remaining Fixed Pricing Period,” for any principal priced with a Fixed Rate Option, means the period of time beginning (a) on the date a principal prepayment is made or, (b) in the case of a Breakage Fee, on the date Notice is given and ending on the Fixed Rate Maturity Date.
|
|
4.
|
“Initial Reference Rate,” for any principal priced with a Fixed Rate Option, means the annualized rate used by Lender or a participant to obtain the funds loaned to Borrower in the case of a Prepayment Fee, or the annualized rate applicable on the last Pricing Date, or on the date Notice of prepayment is given, as the case may be, in the case of a Breakage Fee.
|
|
5.
|
“Final Reference Rate” means the annualized rate Lender or a participant would use to fund a new advance in such amount for the Remaining Fixed Pricing Period on the date of such prepayment. For a Breakage Fee, the Final Reference Rate means the annualized rate as of the date Notice is given.
|
B.
|
Calculation of Prepayment/Breakage Fee
. The Prepayment and the Breakage Fees are calculated on a make-whole basis in five (5) steps as provided below:
|
|
1.
|
Compare the Initial Reference Rate and the Final Reference Rate. If the Initial Reference Rate is less than or equal to the Final Reference Rate, the Prepayment / Breakage Fee is zero. If the Initial Reference Rate is greater than the Final Reference Rate, complete the following steps to calculate the Prepayment / Breakage Fee.
|
|
2.
|
Calculate the interest payment that will accrue on the Prepayment Amount over the Remaining Fixed Pricing Period at the Initial Reference Rate (“Initial Interest Amounts”).
|
|
3.
|
Calculate the interest payment that will accrue on the Prepayment Amount over the Remaining Fixed Pricing Period at the Final Reference Rate (“Final Interest Amounts”).
|
|
4.
|
Calculate the “Differential Interest Amount” for each interest payment due during the Remaining Fixed Pricing Period by subtracting the Final Interest Amount from the Initial Interest Amount for each such payment.
|
|
5.
|
The Prepayment or Breakage Fee is the sum of the discounted present value of each Differential Interest Amount, discounted at the Final Reference Rate from the date such payment would be due back to the prepayment date, or in the case of a Breakage Fee, on the date Notice is given.
|
Net Present Value of Differential Interest Amounts – Step 5
|
|||||
Interest Payment
|
Final Reference
Rate |
Present Value
Factor |
Differential Interest
Amount |
Present Value
|
|
1
|
5.00%
|
0.98765
|
$1,250.00
|
$1,234.57
|
|
Prepayment/Breakage Fee
|
$1,234.57
|
By:
|
||
Authorized Agent |
By: | |||
Thomas M. Ringo, Vice President and CFO
|
Date:
June 10, 2010
|
Pope Resources, A Delaware Limited Partnership
|
Customer/Note No. 56548-811
|
Pricing
Level
|
Consolidated
Interest Coverage
Ratio
|
Applicable
Margin
for Base Rate
|
Applicable
Margin for Fixed
Rate Options
|
Unuse
Commitment
Fee
|
I
|
≥
3.00:1.00
|
2.25%
|
2.25%
|
0.15%
|
II
|
≥
2.00:1.00
|
2.75%
|
2.75%
|
0.25%
|
III
|
< 2.00:1.00
|
3.25%
|
3.25%
|
0.35%
|
By:
|
|||
David L. Nunes, President and CEO
|
Pay to the Order of CoBank, ACB.
|
To: | ||
Technical Accounting Services
|
||
Northwest Farm Credit Services, PCA
|
P. O. Box 2515
|
Fax: 509-340-5508
|
1700 South Assembly Street
|
Spokane, WA 99220-2515
|
Tel.: 1-800-216-4535
|
Spokane, WA 99224-2121
|
|
|
o |
New Advance
|
||
o |
Base Rate Loan Segment
|
||
o |
Fixed Rate Loan Segment Currently Priced Under Fixed Rate Option
|
||
Principal Amount
|
|||
To New Fixed Rate Option
|
|||
To be Effective (Date)
|
|||
o |
Base Rate Loan Segment
|
||
o |
Fixed Rate Loan Segment Priced
|
||
Under Option
|
|||
Principal Amount
|
|||
To be Effective (Date)
|
|||
POPE RESOURCES, A DELAWARE LIMITED
|
|||||
PARTNERSHIP
|
|||||
Date:
|
By:
|
||||
Authorized Agent
|
NORTHWEST FARM CREDIT SERVICES, PCA
|
|||||
Date:
|
By:
|
||||
Authorized Agent
|
By:
|
||
Authorized Agent
|
By:
|
|||
David L. Nunes, President and CEO
|
After Recording Return To:
|
||
Salem Agribusiness
|
||
P.O. Box 13309
|
||
Salem, OR 97309
|
Name of Mortgagor, as Debtor:
|
Pope Resources, A Delaware Limited
Partnership
|
|
Attn: Thomas M. Ringo
|
||
Address of Mortgagor:
|
19245 Tenth Ave, NE
|
|
Poulsbo, WA 98370
|
||
Name of Mortgagee, as Secured Party:
|
Northwest Farm Credit Services, FLCA
Attn: Kristy Searles
|
|
Address of Mortgagee:
|
P.O. Box 13309
|
|
Salem, OR 97309
|
||
MORTGAGOR:
|
|||||
POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP
|
|||||
By: Pope MGP Inc., a Delaware corporation, its Managing General Partner
|
|||||
By:
|
|||||
David L. Nunes, President and CEO
|
STATE OF WASHINGTON
|
)
|
|
)ss.
|
||
County of KITSAP)
|
||
Notary Public for the State of: Washington
|
||
Residing at: Indianola
|
||
My commission expires: May 20, 2014
|
||
Printed Name: Susan M. Graham-Schuyler
|
Mortgagee acknowledges that this Mortgage is subject to a security interest in favor of CoBank, ACB (“Bank”) and by its acceptance hereto and pursuant to and in confirmation of certain agreements and assignments by and between Mortgagee and Bank, does assign, transfer, and set over the same unto Bank, its successors and assigns, to secure all obligations of Mortgagee to Bank, provided that pursuant to such agreements and assignments Mortgagee has authority to perform all loan servicing and collection actions and activities hereunder, including without limitation thereto, releasing in whole or in part and foreclosing judicially or otherwise this Mortgage until the Bank, by instrument recorded in the office in which this Mortgage is recorded, revokes such authority.
|
Document 1 Title:
Mortgage
Grantors: Grantees:
Pope Resources, A Delaware Limited Partnership Northwest Farm Credit Services, PCA
|
Document 2 Title:
Financing Statement
Grantors: Grantees:
Pope Resources, A Delaware Limited Partnership Northwest Farm Credit Services, PCA
|
Document 3 Title:
Fixture Filing
Grantors: Grantees:
Pope Resources, A Delaware Limited Partnership Northwest Farm Credit Services, PCA
|
|
Name of Mortgagor, as Debtor:
|
Pope Resources, A Delaware Limited Partnership
|
|
Attn: Thomas M. Ringo
|
|
Address of Mortgagor:
|
19245 Tenth Ave, NE
|
|
Poulsbo, WA 98370
|
|
Name of Mortgagee, as Secured Party:
|
Northwest Farm Credit Services, PCA
|
|
Attn: Kristy Searles
|
|
Address of Mortgagee:
|
P.O. Box 13309
|
|
Salem, OR 97309
|
MORTGAGOR:
|
||||
POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP
|
||||
By: Pope MGP Inc., a Delaware corporation, its Managing General Partner
|
||||
By:
|
||||
David L. Nunes, President and CEO
|
||||
STATE OF WASHINGTON
|
)
|
|||
)ss.
|
||||
County of KITSAP)
|
||||
Notary Public for the State of: Washington
|
|
Residing at: Indianola
|
|
My commission expires: May 20, 2014
|
|
Printed Name: Susan M. Graham-Schuyler
|
Mortgagee acknowledges that this Mortgage is subject to a security interest in favor of CoBank, ACB (“Bank”) and by its acceptance hereto and pursuant to and in confirmation of certain agreements and assignments by and between Mortgagee and Bank, does assign, transfer, and set over the same unto Bank, its successors and assigns, to secure all obligations of Mortgagee to Bank, provided that pursuant to such agreements and assignments Mortgagee has authority to perform all loan servicing and collection actions and activities hereunder, including without limitation thereto, releasing in whole or in part and foreclosing judicially or otherwise this Mortgage until the Bank, by instrument recorded in the office in which this Mortgage is recorded, revokes such authority.
|
Page
|
||
ARTICLE 1. LOAN TERMS AND COLLATERAL
|
2
|
|
1.1
|
Loan Amount
|
2
|
1.2
|
The Note
|
2
|
1.3
|
Interest and Payments
|
2
|
1.4
|
Collateral Security for the Loan
|
2
|
1.5
|
Collateral Security Documents for Loan
|
2
|
1.6
|
Other Loan Documents
|
3
|
1.7
|
Acquisition
|
3
|
ARTICLE 2. REPRESENTATIONS AND WARRANTIES
|
3
|
|
2.1
|
Nature of Business
|
3
|
2.2
|
Financial Statements; Equity, Debt; Contracts; Material Adverse Change
|
3
|
2.3
|
Ownership of Borrower; Subsidiaries
|
4
|
2.4
|
Pending Litigation
|
4
|
2.5
|
Title to Timberlands; Collateral
|
4
|
2.6
|
Timber, Coal, Oil and Gas
|
5
|
2.7
|
Recreational and Hunting Leases; Licenses
|
6
|
2.8
|
Taxes
|
7
|
2.9
|
Non Foreign Certification
|
7
|
2.10
|
Borrower Organization and Authority
|
7
|
2.11
|
Restrictions on Borrower
|
9
|
2.12
|
Compliance with Law
|
9
|
2.13
|
Pension Plans; ERISA
|
10
|
2.14
|
Certain Laws
|
10
|
2.15
|
Environmental Compliance
|
10
|
2.16
|
Loan Transaction Legal and Authorized; Obligations are Enforceable
|
12
|
2.17
|
No Defaults
|
13
|
2.18
|
Use of Proceeds
|
13
|
2.19
|
Validity of Lien
|
13
|
2.20
|
Solvency
|
14
|
2.21
|
Full Disclosure
|
14
|
2.22
|
Representations and Warranties Specifically Relating to Certain Agreements
|
14
|
2.23
|
Survival of Representations and Warranties
|
15
|
ARTICLE 3. GENERAL COVENANTS
|
15
|
|
3.1
|
Payment of Taxes and Claims; Deposits for Taxes and Insurance Premiums
|
15
|
3.2
|
Documentary Stamps, Other Taxes
|
17
|
3.3
|
Pension Plans; ERISA
|
17
|
3.4
|
Margin Stock
|
18
|
3.5
|
Insurance
|
18
|
3.6
|
Liens
|
19
|
3.7
|
Maintenance of Properties and Legal Existence
|
21
|
ARTICLE 8. MISCELLANEOUS
|
56
|
|
8.1
|
Audit and Appraisal Rights
|
56
|
8.2
|
Fees and Expenses Incurred by Lender
|
56
|
8.3
|
Waiver by the Lender
|
57
|
8.4
|
Severability
|
57
|
8.5
|
Modification of Agreement
|
57
|
8.6
|
Authorization to Disseminate Information
|
57
|
8.7
|
Waivers by Borrower
|
57
|
8.8
|
Authorized Signature
|
58
|
8.9
|
Notices
|
58
|
8.10
|
Assignment
|
59
|
8.11
|
Actions by Lender
|
60
|
8.12
|
Performance by Lender
|
60
|
8.13
|
Entire Agreement
|
60
|
8.14
|
Partial Payment
|
60
|
8.15
|
Time of the Essence
|
61
|
8.16
|
Default Rate
|
61
|
8.17
|
Brokerage Commission
|
61
|
8.18
|
Further Assurances
|
61
|
ARTICLE 9. INTERPRETATION OF THIS AGREEMENT
|
61
|
|
9.1
|
Defined Terms
|
61
|
9.2
|
Accounting Terms; Interpretation of Financial Covenants
|
68
|
9.3
|
Directly or Indirectly
|
68
|
9.4
|
Section Headings and Table of Contents, etc
|
68
|
9.5
|
Construction
|
68
|
9.6
|
Governing Law
|
68
|
9.7
|
Jurisdiction
|
69
|
9.8
|
Waiver of Trial by Jury
|
69
|
9.9
|
Counterparts
|
69
|
9.10
|
Joint and Several Liability
|
69
|
9.11
|
Successors and Assigns
|
70
|
BORROWER
:
ORM TIMBER OPERATING COMPANY II, LLC
a Delaware limited liability company
|
||||
By: | Olympic Resource Management LLC, a | |||
Washington limited liability company | ||||
Its Manager | ||||
|
By:
|
___________________________________ | ||
Printed Name: ________________________ | ||||
Title: ______________________________ | ||||
LENDER
:
METROPOLITAN LIFE INSURANCE COMPANY,
a New York corporation |
|
|
By: |
Name: C. Ray Smith | |
Title: Director |
STATE OF WASHINGTON
|
)
|
|
) ss.
|
||
COUNTY OF ___________________
|
)
|
|
Signature:_____________________________________
|
|
Name (Print):___________________________________
|
|
NOTARY PUBLIC in and for the State
|
|
of Washington, residing at ________________________
|
|
My appointment expires:__________________________
|
Loan No. 194231
|
|
$11,000,000
|
September 1, 2010
|
ARTICLE 1.
|
INTEREST RATE
|
ARTICLE 2.
|
PAYMENTS; MATURITY DATE
|
ARTICLE 4.
|
PREPAYMENTS
|
MAKER’S INITIALS _____
|
INITIALS ______
|
INITIALS ______
|
ARTICLE 5.
|
ISSUANCE PURSUANT TO LOAN AGREEMENT
|
ARTICLE 6.
|
EVENTS OF DEFAULT AND REMEDIES
|
ARTICLE 7.
|
ACTIONS BY HOLDER
|
ARTICLE 8.
|
ATTORNEYS’ FEES
|
ARTICLE 9.
|
MAXIMUM INTEREST RATE/CHARGES
|
ARTICLE 10.
|
GOVERNING LAW AND OTHER AGREEMENTS
|
ARTICLE 13.
|
HEADINGS AND INTERPRETATION
|
ARTICLE 14.
|
MISCELLANEOUS
|
ORM TIMBER OPERATING COMPANY II, LLC
a Delaware limited liability company
|
|||||
By: | Olympic Resource Management LLC, a | ||||
Washington limited liability company | |||||
Its Manager | |||||
|
By:
|
||||
David L. Nunes
President & Chief Executive Officer |
|||||
-
|
99% owned by ORM Timber Fund II, Inc. (“Guarantor”)
|
-
|
1% owned by Olympic Resource Management LLC (“Olympic”) and Olympic is the member-manager of the LLC
|
|
Direct ownership of Guarantor is as follows:
|
-
|
100% owned by 25 common stock investors, one of which is Pope Resources, A Delaware Limited Partnership (“Pope Resources”) that owns 19.2% of Guarantor
|
-
|
There are approximately 125 preferred non-voting stock investors in Guarantor
|
-
|
100% owned by ORM, Inc., a Washington corporation, that is in turn owned 100% by Pope Resources
|
-
|
Pope MGP, Inc., the managing general partner of Pope Resources and has a profit-sharing interest only in Olympic
|
Washington:
|
Olympic Resource Management LLC
|
19245 Tenth Avenue NE
|
|
Poulsbo, Washington 98370
|
|
Oregon: | Davis Wright Tremaine LLP |
1300 SW Fifth Avenue, Suite 2300 | |
Portland, Oregon 97201 |
1.
|
The information set forth in the timber inventory verification report attached hereto as Schedule 2.6.1A setting forth the species, age, quantity, location and volumes of all standing Timber located on the Timberlands is not misleading and is true, correct and complete at 95% confidence level with a margin of error of +/- 5%, and is the same information that was provided by Borrower and Project Manager to The Healy Company in its development of the comprehensive appraisal of the Copper Creek Block referenced in Section 4.5.2 of the Loan Agreement.
|
2.
|
The information referred to above is certified knowing that Lender is relying on such certification to make this Loan.
|
By: __________________________________________
Printed Name: Thomas M. Ringo
Title: Vice President, Chief Financial Officer, Treasurer and Secretary
|
All Properties |
Property Owner Stand# Available Parcel Yr. Est. Ct. Yr. Stand Type L.S. Owl Cir |
All Properties * * * * * * * * * |
Misc1
Misc2
SubParcel
Mortgage
*
*
*
MetLife Collateral
|
LAND | Gross Acres | |
Timberland:
Non-Timbered:
|
18,924
2,
954
|
|
Grand Total:
|
21,878
|
|
PRE-Merchantable
|
Net Acres
|
|
0 - 4
5 - 9
10 - 14
15 - 19
20 - 24
25 - 29
30 - 34
|
1,597
1,280
790
2,407
1,641
1,518
1,332
|
|
Total Pre-Merch Acres
|
10,566
|
GRAND TOTAL MBF | 9,974 | 19,085 | 13,054 | 8, 846 | 126,335 |
Olympic Resource Management | Area Source: NetAcres | 8/20/2010 @ 08:34 AM |
Copper Creek |
Property Owner Stand# Available Parcel Yr. Est. Ct. Yr. Stand Type L.S. Owl Cir |
Copper Creek * * * * * * * * * |
Misc1
Misc2
SubParcel
Mortgage
*
*
*
MetLife Collateral
|
LAND | Gross Acres | |
Timberland:
Non-Timbered:
|
11,308
1,451
|
|
Grand Total:
|
12,759
|
|
PRE-Merchantable
|
Net Acres
|
|
0 - 4
5 - 9
10 - 14
15 - 19
20 - 24
25 - 29
30 - 34
|
848
301
63
97
350
597
1,214
|
|
Total Pre-Merch Acres
|
3,470
|
GRAND TOTAL MBF | 8,176 | 15,793 | 10,522 | 7,100 | 116,967 |
Olympic Resource Management | Area Source: NetAcres | 8/20/2010 @ 08:32 AM |
Riffe Lake |
Property Owner Stand# Available Parcel Yr. Est. Ct. Yr. Stand Type L.S. Owl Cir |
Riffe Lake * * * * * * * * * |
Misc1
Misc2
SubParcel
Mortgage
*
*
*
MetLife Collateral
|
LAND | Gross Acres | |
Timberland:
Non-Timbered:
|
7,617
1,502
|
|
Grand Total:
|
9,119
|
|
PRE-Merchantable
|
Net Acres
|
|
0 - 4
5 - 9
10 - 14
15 - 19
20 - 24
25 - 29
30 - 34
|
750
979
727
2,310
1,291
921
118
|
|
Total Pre-Merch Acres
|
7,096
|
GRAND TOTAL MBF | 1,798 | 3,292 | 2,532 | 1,7 46 | 9,368 |
Olympic Resource Management | Area Source: NetAcres | 8/20/2010 @ 08:30 AM |
Schedule 4.2.6 - AdIministiative Values
|
|
Species
|
$ per MBF |
Douglas-fir
|
320
|
Whitewoods
|
206
|
Hardwoods
|
267
|
Red Cedar
|
838
|
Section 1
:
|
That portion of the South half of the Southwest quarter lying South of the centerline of the Table Rock Fork of the Molalla River
TOGETHER WITH an easement for Access, Utilities, Storm Water Easement Area and Tailhold Easement Area as set forth and more fully described in Easement Exchange agreement recorded July 26, 2010 as Fee No. 2010-044441, Clackamas County Records
|
Section 2
:
|
That portion of the South half lying South of the centerline of the Table Rock Fork of the Molalla River
TOGETHER WITH an easement for Tailhold Easement Area as set forth and more fully described in Easement Exchange agreement recorded July 26, 2010 as Fee No. 2010-044441, Clackamas County Records
|
Section 3
:
|
That portion of the Southeast quarter, Southwest quarter, and the South half of the Northwest quarter lying South of the centerline of the Table Rock Fork of the Molalla River
TOGETHER WITH an easement for Access, Utilities, Storm Water Easement Area and Tailhold Easement Area as set forth and more fully described in Easement Exchange agreement recorded July 26, 2010 as Fee No. 2010-044441, Clackamas County Records
|
Section 4
:
|
That portion of the Southeast quarter of the Northeast quarter lying South of the centerline of the Table Rock Fork of the Molalla River, the North half of the Southeast quarter, and the Northeast quarter of the Southwest quarter
TOGETHER WITH an easement for Tailhold Easement Area as set forth and more fully described in Easement Exchange agreement recorded July 26, 2010 as Fee No. 2010-044441, Clackamas County Records
|
Section 10
:
|
The North half
|
Section 11
:
|
All
|
Section 12
:
|
All
|
Section 13
:
|
All
|
Section 14
:
|
The East half and the Northwest quarter
|
Section 23
:
|
The East half
|
Section 24
:
|
The North half; the North half of the Southwest quarter; the Southeast quarter of the Southwest quarter; and the Southeast quarter
|
Section 28:
|
The South half
|
Section 29
:
|
The Southeast quarter
|
Section 30
:
|
All
|
Section 31
:
|
Government Lots 1, 2, 5, 6, 7, 8, 13 and 14; the Northeast quarter; and the East half of the Northwest quarter
|
Section 32
:
|
All
|
Section 33
:
|
All
|
Section 34
:
|
All
|
Section 12
:
|
The Northeast quarter, and the North half of the Southeast quarter
|
Section 4
:
|
All
|
Section 5
:
|
All
|
Section 6
:
|
All
|
Section 8
:
|
All
|
Section 9
:
|
The North half, and the Ogle Mountain Consolidated Mining Claim, comprising the Hillside, Franklin No. 1, Franklin No. 2, Oregon City, Silver Leaf, Russell No. 1, Wildcat and Russell Fraction Lodes, being portions of the North half of the Southwest quarter, the Southeast quarter of the Southwest quarter, and the West half of the Southeast quarter of said Section 9, more particularly described as follows:
|
Commencing at the South quarter section corner of said section; thence North 88
o
10’ West a distance of 62.5 feet to Corner No. 1 of Hillside Lode, the true point of beginning, said corner being marked by a porphyry stone, 30 x 14 x 7 inches, set 15 inches in the ground, chiseled 1-710, whence a fir, 30 inches in diameter, bears North 35
o
30’ West 28 feet, and a hemlock, 20 inches in diameter, bears South 74
o
West 24.2 feet, each blazed and scribed BT 1-710; thence South 89
o
22’ West, along the Southerly line of said lode, a distance of 115.00 feet to Corner No. 2 therefrom, which is marked by a basalt stone 24 x 9 x 8 inches, set 12 inches in the ground, chiseled 2-710, whence a fir, 48 inches in diameter, bears South 77
o
20’ West 21.6 feet and a hemlock, 16 inches in diameter, bears North 27
o
West 11.4 feet, each blazed and scribed BT 2-710; thence North 5
o
49’ East, along the Westerly line of said lode, a distance of 280.37 feet to its intersection with the Southeasterly line of Franklin No. 1 Lode; thence South 55
o
50’ West, along the Southeasterly line of said Franklin No. 1 Lode, a distance of 290.49 feet to Corner No. 1 thereof, which is marked by a porphyry stone 24 x 15 x 14 inches, set 12 inches in the ground, chiseled 1-710, whence a hemlock, 16 inches in diameter, bears North 68
o
30’ East 9.3 feet, and a hemlock, 18 inches in diameter, bears South 58
o
45’ West 28.0 feet, each blazed and scribed BT 1-710; thence North 34
o
40’ West, along the Southwesterly line of said lode, a distance of 1445.30 feet to Corner No. 2 thereof, which is also Corner No. 1 of Franklin No. 2 Lode, and is marked by a basalt stone 24 x 14 x 10 inches, set 12 inches in the ground, chiseled 2-1-710, whence a hemlock, 18 inches in diameter, bears North 33
o
10’ East 26.0 feet, and a hemlock, 18 inches in diameter, bears South 11
o
30’ East 12.6 feet, each blazed and scribed BT 2-1-710; thence North 30
o
35’ West, along the Southwesterly line of Franklin No. 2 Lode, a distance of 1160.00 feet to Corner No. 2 thereof, which is marked by a cross (x) at the exact corner point and 2-710 chiseled on the East face of a ledge of rock, whence a fir, 30 inches in diameter, bears North 64
o
East 18.0 feet, and a fir, 36 inches in diameter, bears North 40
o
West 13.0 feet, each blazed and scribed BT 2-710; thence North 55
o
50’ East, along the Northwesterly line of said lode, a distance of 600.00 feet to Corner No. 3 thereof, which is marked by a basalt stone 26 x 12 x 7 inches, set 13 inches in the ground, chiseled 3-710, whence a hemlock, 18 inches in diameter, bears North 74
o
30’ East 9.3 feet and a hemlock, 18 inches in diameter, bears South 40
o
West 9.8 feet, each blazed and scribed BT 3-710; thence South 30
o
35’ East, along the Northeasterly line of said lode, a distance of 740.00 feet to Corner No. 3 of the Oregon City Lode, which is marked by a porphyry stone 24 x 14 x 14 inches, set 12 inches in the ground, chiseled 3-710, whence a hemlock, 16 inches in diameter, bears North 83
o
30’ East 22.6 feet, and a hemlock, 36 inches in diameter, bears North 18
o
East 36.4 feet, each blazed and scribed BT 3-710; thence North 59
o
25’ East, along the
|
|
Northerly line of said Oregon City Lode, a distance of 365.00 feet to Corner No. 4 thereof, which is marked by a porphyry stone 24 x 16 x 12 inches, set 12 inches in the ground, chiseled 4-710, whence a hemlock, 14 inches in diameter, bears South 52 o East 15.3 feet, and a hemlock, 30 inches in diameter, bears South 48 o 30’ West 15.8 feet, each blazed and scribed BT 4-710; thence South 21 o 15’ East, along the Easterly line of said lode, a distance of 449.70 feet to Corner No. 5 thereof, which is also Corner No. 2 of Silver Leaf Lode, and is marked by a porphyry stone 26 x 10 x 6 inches, set 13 inches in the ground, chiseled 2-710, whence a fir, 30 inches in diameter, bears South 15 o 20’ East 8.6 feet, and a hemlock, 18 inches in diameter, bears North 42 o 25’ East 10.7 feet, each blazed and scribed BT 2-5-710; thence North 62 o 50’ East, along the Northerly line of said Silver Leaf Lode, a distance of 537.9 feet to Corner No. 3 thereof, which is also Corner No. 2 of Russell Fraction Lode, and is marked by a basalt stone 26 x 10 x 5 inches, set 14 inches in the ground, chiseled 3-2-710, whence a hemlock, 18 inches in diameter, bears South 44 o 40’ West 24.8 feet, and a hemlock, 18 inches in diameter, bears North 33 o 45’ West 22.8 feet, each blazed and scribed BT 3-710; thence North 15 o 58’ West, along the Westerly line of said Russell Fraction Lode, a distance of 535.50 feet to Corner No. 3 thereof, which is marked by a cross (x) at the exact corner point and 3-710 chiseled on a ledge of rock facing West, whence a hemlock, 20 inches in diameter, bears North 33 o 30’ West 17.5 feet, and a hemlock, 22 inches in diameter, bears South 23 o West 18.2 feet, each blazed and scribed BT 3-710; thence North 80 o 21’ East, along the Northerly line of said lode, a distance of 575.00 feet to Corner No. 4 thereof, which is marked by a basalt stone 24 x 10 x 6 inches, set 12 inches in the ground, chiseled 4-710, whence a hemlock, 20 inches in diameter, bears North 3 o 20’ East 10.5 feet, and a hemlock, 16 inches in diameter, bears South 89 o 30’ West 10.3 feet, each blazed and scribed BT 4-710; thence South 0 o 17’ West, along the Easterly line of said lode, a distance of 701.15 feet to its intersection with the Northerly line of Russell No. 1 Lode; thence North 72 o 13’ East, along the Northerly line of said Russell No. 1 Lode, a distance of 306.30 feet to Corner No. 3 thereof, which is also Corner No. 2 of Wildcat Lode, and is marked by a basalt stone 24 x 10 x 8 inches, set 12 inches in the ground, chiseled 3-2-710, whence a larch, 26 inches in diameter, bears South 54 o 10’ West 26.6 feet, and a fir, 30 inches in diameter, bears South 6 o 30’ West 7.0 feet, each blazed and scribed BT 3-2-710; thence South 86 o 24’ East, along the Northerly line of said Wildcat Lode, a distance of 565.90 feet to Corner No. 3 thereof, which is marked by a basalt stone 26 x 12 x 7 inches, set 12 inches in the ground, chiseled 3-710, whence a hemlock, 36 inches in diameter, bears South 30 o West 23.3 feet, and a fir, 24 inches in diameter, bears South 38 o 30’ West 45.6 feet, each blazed and scribed BT 3-710; thence South 1 o 35’ West, along the Easterly line of said lode, a distance of 1120.70 feet to Corner No. 4 thereof, which is marked by a basalt stone 24 x 20 x 6 inches, set 12 inches in the ground, chiseled 4-710, | |
whence a fir, 24 inches in diameter, bears South 31
o
15’ West 21.2 feet, and a pine, 18 inches in diameter, bears South 27
o
30’ East 18.5 feet, each blazed and scribed BT 4-710; thence North 86
o
24’ West, along the Southerly line of said lode, a distance of 600.00 feet to Corner No. 1 thereof, which is also Corner No. 4 of said Russell No. 1 Lode, and is marked by a basalt stone 24 x 10 x 6 inches, set 12 inches in the ground, chiseled 1-4-710, whence a fir, 26 inches in diameter, bears North 39
o
10’ East 8.8 feet, and a fir, 26 inches in diameter, bears North 13
o
West 5.8 feet, each blazed and scribed 1-4-710; thence South 72
o
13’ West, along the Southerly line of said Russell No. 1 Lode, a distance of 466.80 feet to Corner No. 1 thereof, which is also Corner No. 4 of said Hillside Lode, and is marked by a basalt stone, 24 x 14 x 12 inches, set 12 inches in the ground, chiseled 4-1- 710, whence a hemlock, 30 inches in diameter, bears North 40
o
East 18.9 feet, and a hemlock, 30 inches in diameter, bears South 10
o
30’ West 21.4 feet, each blazed and scribed BT 4-1-710; thence South 20
o
57’ West, along the Easterly line of said Hillside Lode, a distance of 809.00 feet to the true point of beginning.
(The diameters of the bearing trees mentioned herein were measured in the period October 5 to 20, 1908.)
|
|
Section 12
:
|
The Southeast quarter of the Southeast quarter, and Government Lot 6.
|
Section 16
:
|
The North half, the Southwest quarter, and the West half of the Southeast quarter
|
Section 17
:
|
The East half
|
Section 18
:
|
All
|
Section 20
:
|
All
|
Section 21
:
|
The Northwest quarter
|
Beneficiary: | |||
METROPOLITAN LIFE INSURANCE COMPANY
|
|||
|
By:
|
||
Name: | |||
Title: | |||
Duly Authorized |
Trustee: | ||||
CHICAGO TITLE INSURANCE COMPANY
|
||||
|
By:
|
|||
Name: | ||||
Title: | ||||
Duly Authorized |
STATE OF WASHINGTON
|
)
|
|
) ss.
|
||
COUNTY OF
|
)
|
|
NOTARY PUBLIC in and from the State of
|
|||||
My appointment expires:
|
, |
My Commission expires on: |
GUARANTOR:
|
ORM TIMBER FUND II , INC., | |||
a Delaware corporation | ||||
By: |
Olympic Resource Management LLC,
|
|||
Its Manager
|
||||
By: | ||||
David L. Nunes | ||||
President and CEO |
4 |
Loan No. 194231
|
|
$11,000,000
|
September 1, 2010
|
MAKER’S INITIALS _____
|
INITIALS ______
|
INITIALS ______
|
|
ORM TIMBER OPERATING COMPANY II , LLC | ||
a Delaware limited liability company | |||
By: |
Olympic Resource Management LLC, a
|
||
Washington limited liability company
|
|||
Its Manager | |||
By: | |||
David L. Nunes | |||
President & Chief Executive Officer |
|
(a)
|
Modifications
. Any renewal, extension, increase, modification, alteration or rearrangement of all or any part of the Note, Loan Documents, or other document, instrument, contract or understanding between Borrower and Lender, or any other parties, pertaining to the Guarantor’s obligations or any failure of Lender to notify Guarantor of any such action.
|
|
(b)
|
Adjustment
. Any adjustment, indulgence, forbearance or compromise that might be granted or given by Lender to Borrower.
|
|
(c)
|
Condition of Borrower or Guarantor
. The insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of Borrower, Guarantor or any other party at any time liable for the payment of all or part of the obligations guaranteed hereunder; or any dissolution of Borrower or Guarantor, or any sale, lease or transfer of any or all of the assets of Borrower or Guarantor, or any changes in the shareholders, partners or members of Borrower or Guarantor; or any reorganization of Borrower or Guarantor.
|
|
(d)
|
Invalidity of Guaranteed Obligations
. The invalidity, illegality or unenforceability of all or any part of the Note or other of the Loan Documents, or any other document or agreement executed in connection therewith, for any reason whatsoever, including without limitation the fact that (i) the loan evidenced by the Note and the Loan Documents, or any part thereof, exceeds the amount permitted by law, (ii) the act of creating the loan evidenced by the Note and the Loan Documents or any part thereof is
ultra
vires
, (iii) the officers or representatives executing the Note or the other Loan Documents acted in excess of their authority, (iv) the obligations guaranteed hereby violates applicable usury laws, (v) the Borrower has valid defenses, claims or offsets (whether at law, in equity or by agreement) which render the obligations guaranteed hereby wholly or partially uncollectible from Borrower, (vi) the creation, performance or repayment of the obligations guaranteed hereby (or the execution, delivery and performance of any document or instrument representing part of the obligations guaranteed hereby or executed in connection with the obligations guaranteed hereby, or given to secure the repayment of the obligations guaranteed hereby) is illegal, uncollectible or unenforceable, or (vii) the Note or any of the other Loan Documents have been forged or otherwise are irregular or not genuine or authentic, it being agreed that Guarantor shall remain liable hereon regardless of whether Borrower or any other person be found not liable on the obligations guaranteed hereby or any part thereof for any reason.
|
|
(e)
|
Release of Obligors
. Any full or partial release of the liability of Borrower on the obligations guaranteed hereby, or any part thereof, or of any co-guarantors, or any other person or entity now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the obligations guaranteed hereby, or any part thereof, it being recognized, acknowledged and agreed by Guarantor that Guarantor may be required to pay the obligations guaranteed hereby in full without assistance or support of any other party, and Guarantor has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that other parties will be liable to pay or perform the obligations guaranteed hereby, or that Lender will look to other parties to pay or perform the obligations guaranteed hereby.
|
|
(f)
|
Other Collateral
. The taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the obligations guaranteed hereby.
|
|
(g)
|
Release of Collateral
. Any release, surrender, exchange, subordination, deterioration, waste, loss or impairment (including without limitation negligent, willful, unreasonable or unjustifiable impairment) of any collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the obligations guaranteed hereby.
|
|
(h)
|
Care and Diligence
. The failure of Lender or any other party to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security, including but not limited to any neglect, delay, omission, failure or refusal of Lender (i) to take or prosecute any action for the collection of any of the obligations guaranteed hereby or (ii) to foreclose, or initiate any action to foreclose, or, once commenced, prosecute to completion any action to foreclose upon any security therefor, or (iii) to take or prosecute any action in connection with any instrument or agreement evidencing or securing all or any part of the obligations guaranteed hereby.
|
|
(i)
|
Unenforceability
. The fact that any collateral, security, security interest or lien contemplated or intended to be given, created or granted as security for the repayment of the obligations guaranteed hereby, or any part thereof, shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other security interest or lien, it being recognized and agreed by Guarantor that Guarantor is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the obligations guaranteed hereby.
|
|
(j)
|
Merger
. The reorganization, merger or consolidation of Borrower or either of them into or with any other corporation or entity.
|
|
(k)
|
Preference
. Any payment by Borrower to Lender is held to constitute a preference under bankruptcy laws, or for any reason Lender is required to refund such payment or pay such amount to Borrower or someone else.
|
|
(l)
|
Other Actions Taken or Omitted
. Any other action taken or omitted to be taken with respect to the Loan Documents, the obligations guaranteed hereby, or the security and collateral therefor, whether or not such action or omission prejudices Guarantor or increases the likelihood that Guarantor will be required to pay the obligations guaranteed hereby pursuant to the terms hereof, it is the unambiguous and unequivocal intention of Guarantor that Guarantor shall be obligated to pay the obligations guaranteed hereby when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, which obligation shall be deemed satisfied only upon the full and final payment and satisfaction of the obligations guaranteed hereby.
|
(a)
|
Guarantor is not now insolvent and Guarantor’s obligations under this Guaranty or under any of the other Loan Documents do not render Guarantor insolvent; Guarantor is not contemplating either the filing of a petition by Guarantor under any state or federal bankruptcy or insolvency laws or the liquidating of all or a major portion of Guarantor’s property; and Guarantor has no knowledge of any person contemplating the filing of any such petition against Guarantor;
|
(b)
|
that this Guaranty constitutes the legal, valid and binding obligation of Guarantor and is fully enforceable against Guarantor in accordance with its terms;
|
(c)
|
that there are no legal proceedings or material claims or demands pending against or, to the best of Guarantor’s knowledge threatened against, Guarantor or any of its assets;
|
(d)
|
that neither the execution nor the delivery of this Guaranty nor the fulfillment and compliance with the provisions hereof will conflict with, result in a breach of, constitute a default under or result in the creation of any lien, charge, or encumbrance upon any property or assets of Guarantor under any agreement or instrument to which Guarantor is now a party or by which he may be bound;
|
(e)
|
that neither Lender nor anyone acting on behalf of Lender has made any representation, warranty or statement to Guarantor to induce Guarantor to execute and deliver this Guaranty;
|
(f)
|
that Guarantor is a principal of Borrower, is the owner of a direct and/or indirect interest in Borrower, and has received, or will receive, direct or indirect benefit from the making of this Guaranty with respect to the obligations guaranteed hereby; and
|
(g)
|
that Guarantor is familiar with, and has independently reviewed books and records regarding the financial condition of the Borrower, and is familiar with the value of any and all collateral intended to be created as security for the payment of the Note and the other obligations guaranteed hereby; however, Guarantor is not relying on such financial condition or the collateral as an inducement to enter into this Guaranty.
|
(h)
|
Guarantor has no Debt other than the Loan and the unsecured Pope Note, which is subordinate in all respects to the Obligations.
|
(i)
|
Since the date of the most recent financial statement of Guarantor delivered to Lender referred to Section 8 above there has been no material adverse change in the business, prospects, profits, property or condition (financial or otherwise) of Guarantor.
|
(j)
|
Guarantor is not or has ever been, involved in bankruptcy or adjudicated as bankrupt, and has not entered into an agreement or received the benefit of any settlement or compromise of a debt, as debtor.
|
GUARANTOR : | |||
|
ORM TIMBER FUND II , INC., | ||
a Delaware corporation | |||
By: |
Olympic Resource Management LLC,
|
||
Its Manager | |||
By: | |||
David L. Nunes | |||
President and CEO |
11 |
Maximum Principal to be Advanced: | $11,000,000 |
Maturity Date of Note: | September 1, 2020 |
GRANTOR
:
|
||||
ORM TIMBER OPERATING COMPANY
II, LLC , a Delaware limited liability company |
||||
By: |
Olympic Resource Management LLC,
a Washington limited liability company Its Manager |
|||
By:
|
||||
David L. Nunes | ||||
President & Chief Executive Officer |
Signature:____________________________
|
|
Name (Print):__________________________ | |
NOTARY PUBLIC in and for the State
of Washington, residing at_______________ My appointment expires:_________________ |
Section 1:
|
That portion of the South half of the Southwest quarter lying South of the centerline of the Table Rock Fork of the Molalla River
TOGETHER WITH an easement for Access, Utilities, Storm Water Easement Area and Tailhold Easement Area as set forth and more fully described in Easement Exchange agreement recorded July 26, 2010 as Fee No. 2010-044441, Clackamas County Records
|
Section 2:
|
That portion of the South half lying South of the centerline of the Table Rock Fork of the Molalla River
TOGETHER WITH an easement for Tailhold Easement Area as set forth and more fully described in Easement Exchange agreement recorded July 26, 2010 as Fee No. 2010-044441, Clackamas County Records
|
Section 3:
|
That portion of the Southeast quarter, Southwest quarter, and the South half of the Northwest quarter lying South of the centerline of the Table Rock Fork of the Molalla River
TOGETHER WITH an easement for Access, Utilities, Storm Water Easement Area and Tailhold Easement Area as set forth and more fully described in Easement Exchange agreement recorded July 26, 2010 as Fee No. 2010-044441, Clackamas County Records
|
Section 4:
|
That portion of the Southeast quarter of the Northeast quarter lying South of the centerline of the Table Rock Fork of the Molalla River, the North half of the Southeast quarter, and the Northeast quarter of the Southwest quarter
TOGETHER WITH an easement for Tailhold Easement Area as set forth and more fully described in Easement Exchange agreement recorded July 26, 2010 as Fee No. 2010-044441, Clackamas County Records
|
Section 10:
|
The North half
|
Section 11:
|
All
|
Section 12:
|
All
|
Section 13:
|
All
|
Section 14:
|
The East half and the Northwest quarter
|
Section 23:
|
The East half
|
Section 24:
|
The North half; the North half of the Southwest quarter; the Southeast quarter of the Southwest quarter; and the Southeast quarter
|
Section 28:
|
The South half
|
Section 29:
|
The Southeast quarter
|
Section 30:
|
All
|
Section 31:
|
Government Lots 1, 2, 5, 6, 7, 8, 13 and 14; the Northeast quarter; and the East half of the Northwest quarter
|
Section 32:
|
All
|
Section 33:
|
All
|
Section 34:
|
All
|
Section 12:
|
The Northeast quarter, and the North half of the Southeast quarter
|
Section 4:
|
All
|
Section 5:
|
All
|
Section 6:
|
All
|
Section 8:
|
All
|
Section 9:
|
The North half, and the Ogle Mountain Consolidated Mining Claim, comprising the Hillside, Franklin No. 1, Franklin No. 2, Oregon City, Silver Leaf, Russell No. 1, Wildcat and Russell Fraction Lodes, being portions of the North half of the Southwest quarter, the Southeast quarter of the Southwest quarter, and the West half of the Southeast quarter of said Section 9, more particularly described as follows:
Commencing at the South quarter section corner of said section; thence North 88
o
10’ West a distance of 62.5 feet to Corner No. 1 of Hillside Lode, the true point of beginning, said corner being marked by a porphyry stone, 30 x 14 x 7 inches, set 15 inches in the ground, chiseled 1-710, whence a fir, 30 inches in diameter, bears North 35
o
30’ West 28 feet, and a hemlock, 20 inches in diameter, bears South 74
o
West 24.2 feet, each blazed and scribed BT 1-710; thence South 89
o
22’ West, along the Southerly line of said lode, a distance of 115.00 feet to Corner No.2 therefrom, which is marked by a basalt stone 24 x 9 x 8 inches, set 12 inches in the ground, chiseled 2-710, whence a fir, 48 inches in diameter, bears South 77
o
20’ West 21.6 feet and a hemlock, 16 inches in diameter, bears North 27
o
West 11.4 feet, each blazed and scribed BT 2-710; thence North 5
o
49’ East, along the Westerly line of said lode, a distance of 280.37 feet to its intersection with the Southeasterly line of Franklin No.1 Lode; thence South 55
o
50’ West, along the Southeasterly line of said Franklin No. 1 Lode, a distance of 290.49 feet to Corner No. 1 thereof, which is marked by a porphyry stone 24 x 15 x 14 inches, set 12 inches in the ground, chiseled 1-710, whence a hemlock, 16 inches in diameter, bears North 68
o
30’ East 9.3 feet, and a hemlock, 18 inches in diameter, bears South 58
o
45’ West 28.0 feet, each blazed and scribed BT 1-710; thence North 34
o
40’ West, along the Southwesterly line of said lode, a distance of 1445.30 feet to Corner No. 2 thereof, which is also Corner No. 1 of Franklin No. 2 Lode, and is marked by a basalt stone 24 x 14 x 10 inches, set 12 inches in the ground, chiseled 2-1-710, whence a hemlock, 18 inches in diameter, bears North 33
o
10’ East 26.0 feet, and a hemlock, 18 inches in diameter, bears South 11
o
30’ East 12.6 feet, each blazed and scribed BT 2-1-710; thence North 30
o
35’ West, along the Southwesterly line of Franklin No. 2 Lode, a distance of 1160.00 feet to Corner No. 2 thereof, which is marked by a cross (x) at the exact corner point and 2-710 chiseled on the East face of a ledge of rock, whence a fir, 30 inches in diameter, bears North 64
o
East 18.0 feet, and a fir, 36 inches in diameter, bears North 40
o
West 13.0 feet, each blazed and scribed BT 2-710; thence North 55
o
50’ East, along the Northwesterly line of said lode, a distance of 600.00 feet to Corner No. 3 thereof, which is marked by a basalt stone 26 x 12 x 7 inches, set 13 inches in the ground, chiseled 3-710, whence a hemlock, 18 inches in diameter, bears North 74
o
30’ East 9.3 feet and a hemlock, 18 inches in diameter, bears South 40
o
West 9.8 feet, each blazed and scribed BT 3-710; thence South 30
o
35’ East, along the Northeasterly line of said lode, a distance of 740.00 feet to Corner No. 3 of the Oregon City Lode, which is marked by a porphyry stone 24 x 14 x 14 inches, set 12 inches in the ground, chiseled 3-710, whence a hemlock, 16 inches in diameter, bears North 83
o
30’ East 22.6 feet, and a hemlock, 36 inches in diameter, bears North 18
o
East 36.4 feet, each blazed and scribed BT 3-710; thence North 59
o
25’ East, along the Northerly line of said Oregon City Lode, a distance of 365.00 feet to Corner No. 4 thereof, which is marked by a porphyry stone 24 x 16 x 12 inches, set 12 inches in the ground, chiseled 4-710, whence a hemlock, 14 inches in diameter, bears South 52
o
East 15.3 feet, and a hemlock, 30 inches in diameter, bears South 48
o
30’ West 15.8 feet, each blazed and scribed BT 4-710; thence South 21
o
15’ East, along the Easterly line of said lode, a distance of 449.70 feet to Corner No. 5 thereof, which is also Corner No. 2 of Silver Leaf Lode, and is marked by a porphyry stone 26 x 10 x 6 inches, set 13 inches in the ground, chiseled 2-710, whence a fir, 30 inches in diameter, bears South 15
o
20’ East 8.6 feet, and a hemlock, 18 inches in diameter, bears North 42
o
25’ East 10.7 feet, each blazed and scribed BT 2-5-710; thence North 62
o
50’ East, along the Northerly line of said Silver Leaf Lode, a distance of 537.9 feet to Corner No. 3 thereof, which is also Corner No. 2 of Russell Fraction Lode, and is marked by a basalt stone 26 x 10 x 5 inches, set 14 inches in the ground, chiseled 3-2-710, whence a hemlock, 18 inches in diameter, bears South 44
o
40’ West 24.8 feet, and a hemlock, 18 inches in diameter, bears North 33
o
45’ West 22.8 feet, each blazed and scribed BT 3-710; thence North 15
o
58’ West, along the Westerly line of said Russell Fraction Lode, a distance of 535.50 feet to Corner No. 3 thereof, which is marked by a cross (x) at the exact corner point and 3-710 chiseled on a ledge of rock facing West, whence a hemlock, 20 inches in diameter, bears North 33
o
30’ West 17.5 feet, and a hemlock, 22 inches in diameter, bears South 23
o
West 18.2 feet, each blazed and scribed BT 3-710; thence North 80
o
21’ East, along the Northerly line of said lode, a distance of 575.00 feet to Corner No. 4 thereof, which is marked by a basalt stone 24 x 10 x 6 inches, set 12 inches in the ground, chiseled 4-710, whence a hemlock, 20 inches in diameter, bears North 3
o
20’ East 10.5 feet, and a hemlock, 16 inches in diameter, bears South 89
o
30’ West 10.3 feet, each blazed and scribed BT 4-710; thence South 0
o
17’ West, along the Easterly line of said lode, a distance of 701.15 feet to its intersection with the Northerly line of Russell No. 1 Lode; thence North 72
o
13’ East, along the Northerly line of said Russell No. 1 Lode, a distance of 306.30 feet to Corner No. 3 thereof, which is also Corner No. 2 of Wildcat Lode, and is marked by a basalt stone 24 x 10 x 8 inches, set 12 inches in the ground, chiseled 3-2-710, whence a larch, 26 inches in diameter, bears South 54
o
10’ West 26.6 feet, and a fir, 30 inches in diameter, bears South 6
o
30’ West 7.0 feet, each blazed and scribed BT 3-2-710; thence South 86
o
24’ East, along the Northerly line of said Wildcat Lode, a distance of 565.90 feet to Corner No. 3 thereof, which is marked by a basalt stone 26 x 12 x 7 inches, set 12 inches in the ground, chiseled 3-710, whence a hemlock, 36 inches in diameter, bears South 30
o
West 23.3 feet, and a fir, 24 inches in diameter, bears South 38
o
30’ West 45.6 feet, each blazed and scribed BT 3-710; thence South 1
o
35’ West, along the Easterly line of said lode, a distance of 1120.70 feet to Corner No. 4 thereof, which is marked by a basalt stone 24 x 20 x 6 inches, set 12 inches in the ground, chiseled 4-710, whence a fir, 24 inches in diameter, bears South 31
o
15’ West 21.2 feet, and a pine, 18 inches in diameter, bears South 27
o
30’ East 18.5 feet, each blazed and scribed BT 4-710; thence North 86
o
24’ West, along the Southerly line of said lode, a distance of 600.00 feet to Corner No. 1 thereof, which is also Corner No. 4 of said Russell No. 1 Lode, and is marked by a basalt stone 24 x 10 x 6 inches, set 12 inches in the ground, chiseled 1-4-710, whence a fir, 26 inches in diameter, bears North 39
o
10’ East 8.8 feet, and a fir, 26 inches in diameter, bears North 13
o
West 5.8 feet, each blazed and scribed 1-4-710; thence South 72
o
13’ West, along the Southerly line of said Russell No. 1 Lode, a distance of 466.80 feet to Corner No. 1 thereof, which is also Corner No. 4 of said Hillside Lode, and is marked by a basalt stone, 24 x 14 x 12 inches, set 12 inches in the ground, chiseled 4-1- 710, whence a hemlock, 30 inches in diameter, bears North 40
o
East 18.9 feet, and a hemlock, 30 inches in diameter, bears South 10
o
30’ West 21.4 feet, each blazed and scribed BT 4-1-710; thence South 20
o
57’ West, along the Easterly line of said Hillside Lode, a distance of 809.00 feet to the true point of beginning.
(The diameters of the bearing trees mentioned herein were measured in the period October 5 to 20, 1908.)
|
Section 12:
|
The Southeast quarter of the Southeast quarter, and Government Lot 6.
|
Section 16:
|
The North half, the Southwest quarter, and the West half of the Southeast quarter
|
Section 17:
|
The East half
|
Section 18:
|
All
|
Section 20:
|
All
|
Section 21:
|
The Northwest quarter
|
Exhibit B |
GRANTOR:
|
ORM TIMBER OPERATING COMPANY II, LLC
|
GRANTEES:
|
|
(1) Beneficiary:
|
METROPOLITAN LIFE INSURANCE COMPANY
|
(2) Trustee:
|
CHICAGO TITLE INSURANCE COMPANY
|
ABBREVIATED
|
Portions of Sections 4, 8, 9 and 17, Township 11 North,
|
LEGAL DESCRIPTION:
|
Range 5 East, W.M., in Lewis County, Washington
|
(See
Schedule I
at the end of the document for complete list of abbreviated legal descriptions)
|
|
Complete legal description is on
Exhibit A
of this document.
|
|
ASSESSOR’S TAX
|
026830-000-000 (TCA 739), 026892-000-000 (TCA 739)
|
PARCEL ACCOUNT NO.:
|
(See
Schedule II
at the end of the document for complete list of tax parcel account numbers)
|
REFERENCE TO
|
|
RELATED DOCUMENTS:
|
None
|
GRANTOR
:
ORM TIMBER OPERATING
COMPANY II, LLC
, a Delaware
limited liability company
By: Olympic Resource Management
LLC, a Washington limited
liability company
Its Manager
By:
David L. Nunes
President & Chief Executive Officer
|
|
Signature:____________________________
|
|
Name (Print):__________________________
|
|
NOTARY PUBLIC in and for the State
|
|
of Washington, residing at_______________
|
|
My appointment expires:_________________
|
● | The sum of target awards for participants will form a target award pool with the initial target awards (starting in 2010) set at: | |
m | 6,000 PRU’s for the CEO | |
m | 20,000 PRU’s for all other plan participants combined | |
m |
The pool may be adjusted upward or downward if participants move in or out of the plan during the year
|
● |
PRU targets will generally be held constant over time, and recalibrated only infrequently based on significant capital or talent market changes
|
||
● |
Most participants will earn 100% of PRU targets most years, however, participants will earn:
|
||
m |
0% when a notable negative situation occurs due to either:
|
||
■ | Poor decisions and/or performance which leave POPE vulnerable to erosion of long-term value (internal factors), or | ||
■ |
Financial challenges, despite good decisions, that put POPE in a vulnerable position (external factors)
|
||
m |
Up to 200% only when exceptional value has been added, which is directly attributable to game-changing ideas generated and/or implemented by an individual or group of individuals
|
● |
Immediately following the end of each year:
|
||
m |
The HR Committee will determine:
|
||
■ |
The size of the PRU pool based on their assessment of the quality of decision-making and performance for the year
|
||
■ |
If there are any game changer events that merit a special award for either individuals or groups and, if so, decide who to make awards to and in what amount and form (up to 1x each individual’s target PRU grant paid either in POPE units or cash)
|
||
m |
Each participant’s award is converted into a value based on a 60-trading-day (ending at December 31) average POPE unit price with actual award values fluctuating from year to year with the unit price
|
||
● |
Some participants will receive their payout entirely in POPE restricted units, some entirely in cash and others a blend of the two with the mix predetermined by participant position
|
||
● |
PRUs that are paid in POPE units will vest 25% per year over 4 years
|
||
● |
For PRUs paid in POPE units, a grant agreement executed by POPE and the participant will set forth the terms and conditions of vesting
|
●
|
POPE’s total shareholder return (TSR) is calculated for rolling 3-year increments starting with the period 2008 – 2010 and each succeeding year the TSR for POPE is calculated for the next 3-year period (2009 - 2011, 2010 – 2012, et seq.)
|
●
|
Essentially, TSR is a computation that measures unit price appreciation over the relevant return period (in this case, three years) and factors in unitholder distributions as an additional component of return
|
●
|
The beginning and end-of-period unit price used to calculate POPE’s TSR is a 60-trading-day average unit price as of each of those dates
|
●
|
POPE’s TSR is then compared to the TSR’s of a group of “peer” companies, identified at the beginning of each performance cycle, for the same period, each calculated in the same way as POPE, using a 60-trading-day average share price as of the beginning and end of the period
|
●
|
The peer companies for the 2008-10 2009-11 and 2010-12 periods (with trading symbols so indicated) include a mix of timber REITs, other forest products, real estate, agriculture, and metals & mining as detailed below:
|
Forest Products
|
Real Estate
|
Agriculture
|
Metals & Mining
|
Deltic (DEL)
|
Amer. Realty Inv. (ARL)
|
Alico (ALCO)
|
China Direct (CDII)
|
Plum Creek (PCL)
|
Amer. Spectrum (AQQ)
|
Griffin Land (GRIF)
|
Jaguar Mining (JAG)
|
Potlatch (PCH)
|
Avatar Holdings (AVTR)
|
Limoneira (LMNR)
|
Royal Gold (RGLD)
|
Rayonier (RYN)
|
EastGroup Properties (EGP)
|
||
St. Joe (JOE)
|
First Potomac (FPO)
|
||
Weyerhaeuser (WY)
|
InterGroup Corp. (INTG)
|
||
Maui Land & Pineapple (MLP)
|
|||
Monmouth RE Investment (MNR)
|
|||
NTS Realty (NLP)
|
|||
Tejon Ranch (TRC)
|
|||
Thomas Properties Group (TPGI)
|
●
|
POPE’s TSR is expressed as a percentile of the range of TSRs within the other peer companies with “target performance level” pegged at the 50
th
percentile
|
●
|
At target performance (50
th
percentile) the LTIP award payout is 100% of target
|
●
|
Maximum LTIP award payout of 200% of target for any single 3-year performance period is reached if POPE’s relative TSR is at the 80
th
percentile or higher
|
●
|
Below the 20
th
percentile, there is no LTIP award payout
|
●
|
If POPE’s relative TSR ranking vs. the peer group is between the 20
th
and 80
th
percentiles, the award payout is derived by interpolation between discrete points on the 0-200% of target payout
|
●
|
The target LTIP award for each year is expressed in a cash amount that varies by participant
|
●
|
Awards, if performance warrants, will be paid out in cash early in the year following the close of each 3-year performance cycle
|
●
|
Award levels may be altered by +/- 20% at the discretion of the HR Committee
|
Involuntary termination for cause (including non-performance)
|
Participant forfeits PRU award opportunity
|
Participant forfeits cash opportunity
|
Change in control (CIC)
|
- No change if plan is continued and participant is not terminated within one year of the CIC
- If plan is discontinued and/or if participant is terminated within one year of the CIC, the participant earns target PRU award and immediately vests in all outstanding PRU grants
- No gross ups
|
- No change if plan is continued and participant is not terminated within one year of the CIC
- If plan is discontinued and/or if participant is terminated within one year of the CIC, the participant is paid cash award at accrued performance level at time of termination, prorated for length of cycle completed
- No gross ups
|
Leave of absence
|
PRU grant can be prorated for time on leave during each year at discretion of HR Committee or CEO
|
Participant’s cash opportunity is prorated for time on leave during cycle, as long as participant is in cycle for at least two of the three years; otherwise forfeited
|
Death
|
Prorated PRU award is paid to estate at time of death, based on most recent quarter-end unit price
|
Prorated cash award is paid to estate at time of death, based on accrued relative TSR performance through most recently competed quarter
|
Termination due to permanent disability
|
-Prorated PRU award paid based on year-end unit price
- Payout occurs at normal time at end of year
|
-Participant’s cash opportunity is prorated for time served during cycle
- Payout occurs at normal time at end of cycle
|
(1)
|
Once PRUs are granted, any grants of restricted units will vest 25% per year on the anniversary date of the grant
|
(2)
|
In select situation, RUs may be granted as part of recruitment package to recognize that participant will only be eligible for performance cycles that begin in the year of hire
|
|
|
I, David L. Nunes, certify that:
|
|
1.
|
I have reviewed this annual report on Form 10-K of Pope Resources;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 9, 2011 | / s/ David L. Nunes | ||
David L. Nunes | |||
Chief Executive Officer |
|
|
I, Thomas M. Ringo, certify that:
|
|
1.
|
I have reviewed this annual report on Form 10-K of Pope Resources;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a–15(f) and 15d–15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: March 9, 2011 | /s/ Thomas M. Ringo | ||
Thomas M. Ringo | |||
Chief Financial Officer |
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of, and for, the periods presented in the Report.
|
/s/ David L. Nunes
|
|
David L. Nunes
|
|
Chief Executive Officer
|
|
March 9, 2011
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of, and for, the periods presented in the Report.
|
/s/ Thomas M. Ringo
|
|
Thomas M. Ringo
|
|
Chief Financial Officer
|
|
March 9, 2011
|