UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 7, 2005
0-17771
(Commission File Number)
______________________________
FRANKLIN CREDIT MANAGEMENT CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-2243266
(State of Incorporation) (IRS Employer
Identification Number)
Six Harrison Street, New York, NY 10013
(Address of registrant's principal executive office)
(212) 925-8745
(Registrant's telephone number)
______________________________
Item 1.01 Entry into a Material Definitive Agreement.
On June 7, 2005, Franklin Credit Management Corporation (the "Company")
entered into an employment agreement, effective as of June 1, 2005, between the
Company and Joseph Caiazzo, pursuant to which Mr. Caiazzo will continue to serve
as Executive Vice President of the Company. A copy of the employment agreement
is filed herewith as Exhibit 10.1.
Under the employment agreement, Mr. Caiazzo is entitled to a base salary
of $230,000, subject to adjustment by the board of directors, and to participate
in an executive bonus pool of 10% of the Company's after tax consolidated net
profits in excess of $500,000, subject to adjustment of the size of the bonus
pool in the reasonable discretion of the board of directors. Mr. Caiazzo will be
entitled to a targeted bonus in respect of 2005 in the amount of $150,000.
Determination of the actual amount of Mr. Caiazzo's bonus for 2005 will depend,
as to 80% of the targeted amount, upon the Company's financial performance and
as to 20% of the targeted amount upon Mr. Caiazzo's personal performance. Mr.
Caiazzo will be advised of his target bonus for each year subsequent to 2005 by
April 30 of such year. Additionally, Mr. Caiazzo will receive a $5,000 annual
allowance towards the purchase of a retirement annuity, and a car allowance of
$600 per month. Mr. Caiazzo is also entitled to participate in any of the
Company's stock option, stock purchase or other equity compensation plans
extended to the Company's executive officers outside the context of inducement
grants.
Mr. Caiazzo's employment term runs from the effective date of the
employment agreement until its termination by the Company or Mr. Caiazzo.
Pursuant to the employment agreement, the Company may terminate Mr. Caiazzo's
employment with or without cause (as defined in the employment agreement) and
Mr. Caiazzo may terminate it with or without good reason (as defined in the
employment agreement). If Mr. Caiazzo is terminated by the Company without cause
or Mr. Caiazzo terminates his employment for good reason, or his employment
terminates as a result of his death or disability (as defined in the employment
agreement), Mr. Caiazzo will be entitled to severance, including a lump sum
payment equal to his salary for a specified period, a prorated bonus and, at his
option, either continued health benefits during the specified period or a lump
sum payment equal to the medical insurance premiums that would be payable by us
in respect of such specified period. If the termination occurs prior to a change
in control (as defined in the employment agreement) the specified period will be
eighteen months. If the termination occurs following a change in control, the
specified period will be twenty four months.
Item 9.01 Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Description
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10.1 Employment Agreement, dated as of June 7, 2005, between
the Company and Joseph Caiazzo.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FRANKLIN CREDIT MANAGEMENT CORPORATION
By: /s/ John M. Collins
--------------------------------
Name: John M. Collins
Title: General Counsel
Date: June 9, 2005