UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Proxy Statement Pursuant to Section 14(a) of
the
Securities Exchange Act of 1934
(Amendment No. ) | | | | | |
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Filed by a Party other than the Registrant | o |
Check the appropriate box:
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o | Preliminary Proxy Statement |
o | Confidential, forFor Use of the Commission Only (as permittedPermitted by Rule 14a-6(e)(2)) |
x | Definitive Proxy Statement |
o | Definitive Additional Materials |
o | Soliciting Material underPursuant to §240.14a-12 |
CREATIVE MEDIA & COMMUNITY TRUST CORPORATION
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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CIM Commercial Trust Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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x | No fee required. |
o | Fee paid previously with preliminary materials. |
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| Aggregate number of securities to which transaction applies:
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| Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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| Proposed maximum aggregate value of transaction:
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o
| Fee paid previously with preliminary materials.
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| Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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CREATIVE MEDIA & COMMUNITY TRUST CORPORATION
17950 PRESTON ROAD, SUITE 600
DALLAS, TEXAS 75252
Dear
CIM CommercialCreative Media & Community Trust Corporation
Common Stockholder:
You are cordially invited to attend the
annual meeting2023 Annual Meeting of
the stockholdersStockholders of
CIM CommercialCreative Media & Community Trust Corporation, a Maryland
real estate investment trust (“CIM Commercial”corporation (the “Company”),
to be held at
9:10:00 a.m., Pacific Time, on
May 4, 2016 at the Hollywood Roosevelt Hotel, 7000 Hollywood Boulevard, Los Angeles, California 90028July 27, 2023 (and any postponement or adjournment thereof) if you are a
common stockholder of record as of
March 30, 2016.the close of business on May 11, 2023. The meeting will be held as a virtual meeting conducted exclusively via live webcast at http://register.proxypush.com/CMCT. For procedures for attending the virtual meeting, please refer to Question 6 of the proxy statement.
At the annual meeting,
CIM Commercialthe Company’s common stockholders will be asked to
electconsider and vote upon each of the seven directors nominated in the proxy statement to serve
for a one-year term,until the next annual meeting of stockholders of the Company, and until their successors are
duly elected and
qualified.qualify. In addition, we will ask
common stockholders to
consider and vote upon (i)
ratify the
selectionapproval of
BDO USA,the amendment to the Company’s 2015 Equity Compensation Plan (the “Equity Compensation Plan”) to increase the number of shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), available for issuance thereunder by 400,000 shares of Common Stock resulting in an aggregate of 533,333 shares of Common Stock authorized for issuance under the Equity Compensation Plan (if such increase is authorized by the stockholders); (ii) the approval, by a non-binding advisory vote, of a resolution on our executive compensation as described in our proxy statement, (iii) the approval, by a non-binding advisory vote, of the frequency of future advisory votes on executive compensation; and (iv) the ratification of the appointment of Deloitte & Touche, LLP as
CIM Commercial’sthe Company’s independent registered public accounting firm for the fiscal year ending December 31,
2016 and (ii) approve, by a non-binding advisory vote, executive compensation.2023.
The
recommendation of the Board of Directors of
CIM Commercial recommends the
approval ofCompany with respect to each of these proposals
and such other business that will be transacted as may properly come beforeis set forth in the
annual meeting.proxy statement. These foregoing items of business are more fully described in the proxy statement. We urge you to carefully review the proxy statement.
Your vote is very important. If you were a
registeredcommon stockholder
of record as of the close of business on
March 30, 2016,May 11, 2023, please
authorize a proxy to vote your shares as soon as possible using one of the following methods to ensure that your vote is counted, regardless of whether you expect to attend the
virtual annual
meeting in person:meeting: (1)
call the toll-free number specified on the enclosed proxy card and follow the instructions when prompted, (2) access the internet website specified on the enclosed proxy card and follow the instructions provided to you or (3) complete, sign, date and return the enclosed proxy card in the
postage-paidpostage‑paid envelope
provided.provided or (2) as otherwise described herein. If you hold your shares in “street name” through a bank, broker or other nominee, you will need to follow the instructions provided to you by your bank, broker or other nominee
regarding how to
ensure thatinstruct your bank, broker or other nominee to vote your shares
are represented and votedat the annual meeting or, to the extent permitted, regarding how to vote your shares yourself at the annual meeting. If you are a
common stockholder of record and you attend the
virtual annual meeting and wish to vote
in person,at the annual meeting, you may withdraw your proxy and vote
in person. Proof of share ownership and a form of photo identification will be required for admission toonline at the annual meeting.
On behalf of our Board of Directors, I thank you for your continued support.
| Sincerely,
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| Sincerely, |
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| Charles E. Garner II
David Thompson
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| Chief Executive Officer |
April 8, 2016
June 21, 2023
This proxy statement is first being
mailedsent or given to the
common stockholders of
CIM Commercialthe Company on or about
April 8, 2016.June 27, 2023.
CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION
17950 PRESTON ROAD, SUITE 600
OF STOCKHOLDERS OF
CIM COMMERCIALCREATIVE MEDIA & COMMUNITY TRUST CORPORATION
TO BE HELD ON
MAY 4, 2016JULY 27, 2023
Dear
CIM CommercialCreative Media & Community Trust Corporation
Common Stockholder:
You are cordially invited to attend the annual meeting of Stockholdersstockholders (the “Annual Meeting”) of CIM CommercialCreative Media & Community Trust Corporation, (“CIM Commercial”a Maryland corporation (the “Company”), to be held at 9:10:00 a.m., Pacific Time, on July 27, 2023 (and any postponement or adjournment thereof) if you are a common stockholder of record as of the close of business on May 4, 201611, 2023. The Annual Meeting will be held as a virtual meeting conducted exclusively via live webcast at http://register.proxypush.com/CMCT. For procedures for attending the Hollywood Roosevelt Hotel, 7000 Hollywood Boulevard, Los Angeles, California 90028. virtual meeting, please refer to Question 6 of the proxy statement.
The
purposespurpose of the Annual Meeting
are as follows:is to consider and vote on the following proposals:
1.Proposal 1: To electThe election of the seven directors nominated in the proxy statement to serve for a one-year term,until the next annual meeting of stockholders of the Company, and until their successors are duly elected and qualified;qualify; 2.Proposal 2: To ratifyThe approval of the selectionamendment to the Company’s 2015 Equity Compensation Plan (the “Equity Compensation Plan”) to increase the number of BDO USA,shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), available for issuance thereunder by 400,000 shares of Common Stock resulting in an aggregate of 533,333 shares of Common Stock authorized for issuance under the Equity Compensation Plan (if such increase is authorized by the stockholders);
3.Proposal 3: The approval, by a non-binding advisory vote, of an advisory resolution on the Company’s executive compensation as described in the accompanying proxy statement;
4.Proposal 4: The approval, by a non-binding advisory vote, of the frequency of future advisory votes on executive compensation;
5.Proposal 5: The ratification of the appointment of Deloitte & Touche, LLP as CIM Commercial’sthe Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016;3. Proposal 3: To approve, by a non-binding advisory vote, executive compensation;2023; and
4. To consider
6.The consideration of any other business that is properly presented at the Annual Meeting and any postponementspostponement or adjournmentsadjournment thereof. The Board of Directors
of the Company has fixed the close of business on
March 30, 2016May 11, 2023 as the record date for determining stockholders entitled to notice of and to vote at the Annual Meeting. The proxy card is enclosed with this notice of Annual Meeting and proxy statement.
Your vote is important to us and our business. I encourage you to complete, date, sign and return the accompanying proxy
card whether or not you plan to attend the
virtual Annual Meeting. If you plan to attend the
virtual Annual Meeting to vote
in person and your shares are in the name of a broker,
bank or
other nominee, please contact your broker, bank
you must secure a proxy from the broker or
bank assigning voting rights to youother nominee for
your shares.instructions. | Sincerely,
| | | | |
| Sincerely, |
| Jan F. Salit
President
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| Barry N. Berlin |
| Chief Financial Officer, Treasurer and |
| Secretary |
April 8, 2016
June 21, 2023
Important Notice Regarding the Availability of Proxy Materials for our Annual Meeting of
Stockholders to be Held on
May 4, 2016.July 27, 2023.
Our proxy statement
is availableand our Annual Report on
our website at http://investors.cimcommercial.com/sec.cfm andour annual report to stockholdersForm 10-K for the year ended December 31, 2015 is2022 are available on our website
at http:https://investors.cimcommercial.com/sec.cfm.shareholders.creativemediacommunity.com/financials/sec-filings
2023 ANNUAL MEETING OF
COMMON STOCKHOLDERS
TO BE HELD ON
MAY 4, 2016JULY 27, 2023
This proxy statement, with the enclosed proxy card, is being furnished to the common stockholders of CIM CommercialCreative Media & Community Trust Corporation, (“CIM Commercial” and togethera Maryland corporation (together with its subsidiaries, the “Company,” “we,” “us” or “our”), in connection with the solicitation by the Board of Directors of the Company (the “Board”) of proxies to be voted at the annual meeting2023 Annual Meeting of Stockholders of the Company’s stockholdersCompany (the “Annual Meeting”) to be held at 9:10:00 a.m., Pacific Time, on May 4, 2016July 27, 2023 (and any postponement or adjournment thereof) exclusively via live webcast at the Hollywood Roosevelt Hotel, 7000 Hollywood Boulevard, Los Angeles, California 90028 and at any adjournments or postponements thereof. http://register.proxypush.com/CMCT.
The Notice of Annual Meeting, this proxy statement, and the accompanying proxy card are being mailed to all
common stockholders
of record as of the below record date on or about
April 8, 2016.June 27, 2023. The proxy statement
will also be available on the internet at http://investors.cimcommercial.com/sec.cfm and our
annual report to stockholdersAnnual Report on Form 10-K for the year ended December 31,
2015 is2022 are available on our website at
http:https://
investors.cimcommercial.com/sec.cfm.shareholders.creativemediacommunity.com/financials/sec-filings.
Only
common stockholders of record as of the close of business on
March 30, 2016May 11, 2023 are entitled to notice of and to vote at the Annual Meeting. As of such date, we had
97,666,02122,737,853 shares of common stock,
$0.001 par value per share
$0.001 (“Common Stock”)
, outstanding. Each holder of record of Common Stock
as of the close of business on the record date is entitled to one vote on each matter properly brought before the Annual Meeting for each share of Common Stock held.
TABLE OF CONTENTS
Page
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
1.
Who is entitled to vote?Only
stockholdersholders of record
of Common Stock as of the close of business on
March 30, 2016May 11, 2023 (the “record date”) are entitled to notice of and to vote at the Annual Meeting.
It is your legal designation of another person to vote the shares you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document also is called a proxy or a proxy card. We have designated our Chief Executive Officer,
Charles E. Garner II, President, Jan F. Salit,David Thompson, and our Chief Financial Officer
David Thompson,and Secretary, Barry N. Berlin, as proxies for the Annual Meeting.
3.
How many votes isare each share of Common ShareStock entitled to?Each holder of record of Common Stock on the record date is entitled to one vote on each matter properly brought before the Annual Meeting for each
share of Common
ShareStock held.
4.
What is the difference between a stockholder of record and stockholder who holds shares in “street name?”If your shares are registered in your name, you are a stockholder of record. If your shares are held in the name of your
bank, broker or
bank,other nominee, your shares are held in “street name” and you are a beneficial owner.
5.How do I attend the Annual Meeting? What do I need
Our Annual Meeting will be a completely virtual meeting conducted exclusively via live webcast. The meeting will begin promptly at 10:00 a.m., Pacific Time, on July 27, 2023. We encourage you to
bring?access the Annual Meeting prior to the start time. Online check-in will begin at 9:45 a.m., Pacific Time, and you should allow ample time for the check-in procedures. We will have technicians ready to assist you with any technical difficulties you may have accessing the Annual Meeting. If you encounter any difficulties accessing the virtual-only Annual Meeting platform, including any difficulties voting or submitting questions, you may call the technical support number that will be posted in your instructional email.
If you hold shares other than through a Tel Aviv Stock Exchange (“TASE”) member, to participate in the virtual meeting, visit http://register.proxypush.com/CMCT and enter the control number included on your proxy card or on the instructions that accompanied your proxy materials. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the meeting and will also permit you to submit questions.
If your shares are
held in “street name” in the name of a
stockholder of record,TASE member, to participate in the virtual meeting, you will need to
bringobtain from your TASE member an executed ownership certificate (‘Ishur Ba’alut’), signed by your TASE member with respect to the record date (i.e., the close of business on May 11, 2023), and e-mail the executed form to Goldfarb, Gross, Seligman & Co. (“Goldfarb Gross”), the Company’s counsel in Israel, at yuvale@gkh-law.com no later than the close of business in Israel on July 25, 2023. Once Goldfarb Gross has received your properly executed certificate, Goldfarb Gross will e-mail you a
photo ID withcontrol number that you can use to register for the meeting at http:// register.proxypush.com/CMCT. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to the meeting and will also permit you to
the Annual Meeting.If you own shares in “street name,” bring your most recent brokerage statement with you to the Annual Meeting. We can use your statement to verify your ownership of shares and admit you to the Annual Meeting; however, you will not be able to vote your shares at the Annual Meeting without a legal proxy, as described in question submit questions.
6.
You will also need to bring a photo ID.Please note that use of cameras, sound or video recording equipment, cellular telephones or other similar equipment will not be allowed at the Annual Meeting.
1
6.How can I vote at the Annual Meeting?
If you are a holder of record of Common Stock on the record date, you may vote during the Annual Meeting
if I own shares in “street name?”by going to the meeting website at http://register.proxypush.com/CMCT. You will need the control number included on your proxy card or voting instruction form. Upon completing your registration, you will receive further instructions via email, including your unique links that will allow you access to askthe meeting and will also permit you to submit questions.
If your shares are held in “street name” in the name of a bank, broker or bank forother nominee (other than through a legal proxy. YouTASE member), you will need to bringobtain a legal proxy from your bank, broker or other nominee. Once you have obtained the legal proxy, with you tomust submit a copy of the Annual Meeting. You willlegal proxy following the instructions found on http://register.proxypush.com/CMCT. Please be aware that obtaining a legal proxy may take several days.
If your shares are held in “street name” in the name of a TASE member, you may not
be able to vote your shares
at the Annual Meeting without a legal proxy.Please note that if you request a legal proxy, any previously executed proxy will be revoked, and your vote will not be counted unless you appearonline at the Annual Meeting and vote in person or legally appoint another proxy to vote on your behalf.
If you do not receive the legal proxy in time, you canmust instead follow the procedures described in response to question 5 to attend the Annual Meeting. However, you will not be able to vote your shares at the Annual Meeting.
9.
7.
What shares are included on the proxy card?If you are a stockholder of record
of Common Stock as of the
close of business on March 30, 2016,record date, you will receive one proxy card for all the shares of Common Stock you hold
as of the record date in each single account, regardless of whether you hold them in certificate form or in book entry form. If you receive more than one proxy card, it generally means you hold
shares of Common Stock registered in more than one account. Please sign and return all of the proxy cards you receive to ensure that your shares are voted.
8.
What constitutes a quorum?The presence,
in persononline or represented by proxy, of stockholders entitled to cast a majority of all votes entitled to be cast at the Annual Meeting is necessary to constitute a quorum at the Annual
Meeting.Meeting or any postponement or adjournment thereof. However, if a quorum is not present at the Annual Meeting, the chairman of the Annual Meeting may adjourn the Annual Meeting to a date not more than 120 days after the original record date without notice other than an announcement at the Annual Meeting.
9.
What different methods can I use to vote?Depending on how you hold your shares, you may generally choose to authorize a proxy to vote your shares by mail or by attending and voting at the Annual Meeting. The method by which you vote does not affect your right to attend the Annual Meeting.
If your shares are registered directly in your name through our stock transfer agent, American Stock Transfer & Trust Company, you may vote your shares:
•By Written Proxy: All stockholders can vote by returningMail: Complete, sign, date and mail the completed written proxy card received with this proxy statement.By Telephone: All stockholders can
•Telephone: You may vote by authorizing a proxy by telephone throughby calling the telephone number shown on your proxy card.Over the Internet: All stockholders can vote over the Internet at the web address shown on your proxy card.
In Person: All stockholders of record
•Online: You may vote in persononline at the Annual Meeting. “Street
If your shares are held in “street name”
holdersin the name of a bank, broker or other nominee (other than a TASE member, which is discussed below), you may
vote your shares by following the instructions that your bank, broker or other nominee provides to you, which may allow you to vote online or by mail or telephone. To vote in person at the Annual Meeting,
if they have a legal proxy, as describedfollow the instructions provided in question 6.
If your shares are held in “street name” in the name of a TASE member, you may vote your shares online via the electronic voting system of the Israel Securities Authority (the “ISA”) at the web address https://votes.isa.gov.il no later than July 27, 2023 at 4:00 a.m., Pacific Time (or July 27, 2023 at 2:00 p.m. Israel Time). You may receive guidance on the use of the electronic voting system from the TASE member through which you hold your shares.
10.
What is the record date and what does it mean?The record date for the Annual Meeting is the close of business on
March 30, 2016.May 11, 2023. The record date is established by the Board
as allowed byin accordance with our bylaws and the Maryland General Corporation Law. Owners of record
of shares of Common Stock at the close of business on the record date are entitled to receive notice of the Annual Meeting and
to vote at the Annual Meeting and any
adjournmentspostponement or
postponementsadjournment of the Annual Meeting.
11.
What is the deadline for voting my shares if I do not attend the Annual Meeting?If you are a common stockholder of record and do not attend the Annual Meeting, your proxy must be received by telephoneat or the Internet bybefore 11:59 p.m., EasternPacific Time, on May 3, 2016July 26, 2023, in order for your shares to be voted at the Annual Meeting. If you are a stockholder of record and you received a printed set of proxy materials, you also have the option of completing, signing, dating and returning the proxy card enclosed with the proxy materials before the Annual Meeting in order for your shares to be voted at the Annual Meeting.
If you are a beneficial owner of Common Stock
held in “street name” (other than through a TASE member), please comply with the deadlines included in the voting instructions provided by the bank, broker or other nominee that holds your shares.
2
If you hold shares in “street name” through a TASE member, your votes must be recorded in the electronic voting system of the ISA no later than July 27, 2023 at 4:00 a.m., Pacific Time (or July 27, 2023 at 2:00 p.m. Israel Time).
12.How will voting on other business be conducted?
As to any other business that may properly come before the Annual Meeting, all properly submitted proxies will be voted by the proxyholder named in the proxy card, at
hishis/her discretion. We do not presently know of any other business that may come before the Annual Meeting.
13.
What can I do if I change my mind after I return my proxy card?Returning your proxy card will in no way limit your right to
attend and vote
online at the Annual
Meeting if you later decide to attend in person.Meeting. Stockholders can revoke a proxy
prior to the completion of voting at the Annual Meeting by:
·•giving written notice of revocation to the Corporate Secretary of the Company;Company, which notice must be received by the Company prior to 11:59 p.m., Pacific Time on July 26, 2023;
·•delivering a later-dated proxy;later‑dated proxy in accordance with the procedure set forth in question 11; or·• voting in person atattending the virtual Annual Meeting (unless you are a “street name” holder without a legal proxy,and voting online as described in question 6).14.Are votes confidential? Who counts6 (attending the votes?
The Company will keep all the proxies and voting tabulations private. Only the Inspector of Elections will examine these documents. The Companyvirtual Annual Meeting alone will not needrevoke your proxy), unless shares are held in “street name” in the name of a TASE member.
If your shares are held in an account at a bank, broker or other nominee and you desire to
knowchange your vote or vote electronically at the meeting, you should contact your bank, broker or other nominee for instructions on how
you voted on a specific proposal unless it is necessary to
meet legal requirements. The Company will, however, disclose the total votes received for and against each proposal in a Form 8-K filing following the Annual Meeting, as required by law.15.do so.
14. On what items am I voting?
You are being asked to
consider and vote on the following items:
·• to electthe election of seven directors nominated by the Board;·•the approval of the amendment to ratifythe Company’s 2015 Equity Compensation Plan (the “Equity Compensation Plan”) to increase the number of shares of the Company’s Common Stock, available for issuance thereunder by 400,000 shares of Common Stock resulting in an aggregate of 533,333 shares of Common Stock authorized for issuance under the Equity Compensation Plan (if such increase is authorized by the stockholders);
•the approval, by a non-binding advisory vote, of an advisory resolution on the Company’s executive compensation as described in this proxy statement;
•the approval, by a non-binding advisory vote, of the frequency of future non-binding advisory votes on executive compensation; and
• the ratification of the appointment of BDO USA,Deloitte & Touche, LLP (“BDO”Deloitte”) as our independent registered public accounting firm for the fiscal year ending December 31, 2016; and·2023. to approve, by a non-binding advisory vote, executive compensation.
16.
15. What are my voting choices when voting for director nominees?
In the vote on the election of the seven director nominees,
common stockholders of record may:
·(1)vote in favor of all nominees;·(2)vote in favor of specific nominees;·(3) vote against all nominees;· vote against specific nominees;
· abstain from votingwithhold their votes with respect to all nominees; or
·(4) abstain from votingwithhold their votes with respect to specific nominees.17.
16. What vote is required to approve each proposal?
Proposal No. 1—Election of Directors. To be elected as a director, our current Bylawsbylaws require that a nominee must receive a plurality of all the votes cast in the election of directors at the Annual Meeting at which a quorum is present. There is no cumulative voting in the election of directors.3
Proposal No. 2—RatificationApproval of the Appointment of BDO as our Independent Registered Public Accounting Firm.Amendment to the Equity Compensation Plan. The affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present will be required for the approval of the ratificationadoption of the appointment of BDO as our independent registered public accounting firm foramendment to the fiscal year ending December 31, 2016.
Equity Compensation Plan.
Proposal No. 3—Approval, By a Non-Binding Advisory Vote, of Executive Compensation.The affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present will be required to approve the executive compensation proposal. Even though your vote is advisory and therefore will not be binding on the Company, the Board will review and consider the voting results when making future decisions regarding executive compensation.
18.Proposal No. 4—Approval, By a Non-Binding Advisory Vote, of the Frequency of the Advisory Vote on Executive Compensation. The option of one year, two years,or three years that receives a majority of votes cast by stockholders at the Annual Meeting at which a quorum is present will be the frequency for the advisory vote on executive compensation that has been selected by stockholders. In the event that no option receives a majority of the votes cast, we will consider the option that receives the most votes to be the option selected by common stockholders. Even though your vote is advisory and therefore will not be binding on the Company, the Board will review and consider the voting results when making future decisions regarding the frequency of the advisory vote on executive compensation.
Proposal No. 5—Ratification of the Appointment of Deloitte & Touche, LLP as our Independent Registered Public Accounting Firm. The affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present will be required for the approval of the ratification of the appointment of Deloitte & Touche, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2023.
17. How does the Board recommend that I vote?
The Board recommends a vote:
·•FOR each of the seven director nominees;·•FOR the approval of the amendment to the Equity Compensation Plan;
•FOR the non-binding advisory approval of an advisory resolution on the Company’s executive compensation as described in this proxy statement;
•In favor of one year for the frequency of future votes for non-binding advisory approval of executive compensation; and
•FOR the ratification of the appointment of Deloitte & Touche, LLP as the independent registered public accounting firm; and· FORfirm for the non-binding advisory approval of executive compensation.
19.Company for the fiscal year ending December 31, 2023.
18. What if I do not specify a choice for a matter when returning a proxy?
Stockholders should specify their choice for each matter on the enclosed proxy card. If no specific instructions are given, proxies that are signed and returned will be voted:
·•FOR the election of all director nominees;·•FOR the approval of the amendment to the Equity Compensation Plan;
•FOR the non-binding advisory approval of an advisory resolution on the Company’s executive compensation as described in this proxy statement;
•In favor of one year for the frequency of future votes for non-binding advisory approval of executive compensation; and
•FOR the ratification of the appointment of the independent registered public accounting firm; and·firm. FOR the non-binding advisory approval of executive compensation.
20.
19. How are
abstentions and broker
non-votesnon‑votes counted?
Holders in “street name” (other than through a TASE member)
If on the record date your shares were held
in “street name” through a broker, bank or other
agent and not in your name, then you arenominee (other than a
“beneficial owner.” If you are a beneficial owner, your shares are held in “street name,” as is the case for most of the Company’s stockholders. As a beneficial owner, you should have received a form with the voting instructions from the organization holding your account, rather than from the Company, and you have the right to direct how the shares in your account are to be voted. Please complete and mail the voting form as instructed to ensure your vote is counted. Alternatively, you may vote by telephone or over the Internet if permitted by your bank, broker or other agent by following the instructions provided in the voting instruction form. As a beneficial owner, you are also invited to attend the Annual Meeting. However, since you are not a stockholder of record, you may not vote your shares in person at the Annual Meeting unless you request and obtain a valid proxy from your bank, broker or other agent. Follow the instructions from your broker, bank or other agent included with the proxy materials, or contact your bank, broker or other agent to request such form of proxy.If you are a beneficial owner, the broker, bank or other agent will not vote your shares on certain mattersTASE member), in the absence of specific instructions from you on how to vote your shares.shares, your broker, bank or other nominee may not be able to vote your shares on certain matters. The shares whichthat cannot be voted by banks, brokers or other agents on non-routine mattersnominees if the beneficial holder fails to provide instructions are called broker non-votes. If you hold your shares in a brokerage account, then:
non‑votes. Broker non-votes will have the following effects at the Annual Meeting:
(1)Proposal No. 1—Election of Directors. Your broker, bank or other nominee is not entitled to vote your shares if no instructions are received from you. Broker non-votes,non‑votes, if any, will have no effect on the election of directors. ·(2)Proposal No. 2—Ratification Approval of the Appointment of BDO as our Independent Registered Public Accounting FirmAmendment to the Equity Compensation Plan. Your broker, bank or other nominee is not entitled to vote yourshares if no instructions are received from you.4
Broker non-votes, if any, will have no effect on the approval of the amendment to the Equity Compensation Plan.
·(3)Proposal No. 3—Approval, By a Non-Binding Advisory Vote, of Executive Compensation. Compensation. Your broker, bank or other nominee is not entitled to vote your shares if no instructions are received from you. Broker non-votes, if any, will have no effect on the result of the vote on this proposal.
Because an abstention
(4)Proposal No. 4—Approval, By a Non-Binding Advisory Vote, of the Frequency of the Advisory Vote on Executive Compensation. Your broker, bank or othernominee is not entitled to vote your shares if no instructions are received from you. Broker non-votes, if any, will have no effect on the result of the vote on this proposal.
(5)Proposal No. 5—Ratification of the Appointment of Deloitte & Touche, LLP as our Independent Registered Public Accounting Firm. Your broker, bank or other nominee is entitled to vote your shares if no instructions are received from you. Broker non-votes, if any, will have no effect on the result of the vote on this proposal.
Holders in “street name” through a TASE member
If on the record date your shares were held in “street name” through a TASE member, your TASE member will not vote cast, ifyour shares (as described above) and you instructmust vote through the electronic voting system of the ISA as described in question 9. If you do not vote your proxy or brokershares through this system, we will treat your shares as not present and not entitled to “abstain” on any matter, itvote for the purpose of determining the presence of a quorum and your shares will have no effect on the vote of any proposal.
20. How are abstentions counted?
If you abstain or instruct your proxy or broker, bank or other nominee to “abstain” or vote “abstain” via the electronic voting system of the ISA on any
ofmatter, it will be treated as not a vote cast (which will have no effect on the vote cast on the matters to be
consideredconducted at the Annual
Meeting.Meeting). However, abstentions will be counted as shares that are present and entitled to vote for the purpose of determining the presence of a quorum.
21.
Can I access the Proxy Statementproxy statement and Annual Report on Form 10-K on the Internet?The proxy statement
is available on our website at http://investors.cimcommercial.com/sec.cfm and our Annual Report
to stockholderson Form 10-K for the year ended December 31,
2015 is2022 (including the Form 10-Ks/A filed on March 31, 2023) are available on our website at
http:https://
investors.cimcommercial.com/sec.cfm.shareholders.creativemediacommunity.com/financials/sec-filings.
22.
How are proxies solicited and what is the cost?We will bear all expenses incurred in connection with the solicitation of proxies. We have not engaged any solicitor to assist with the solicitation of proxies. In accordance with Securities and Exchange Commission (“SEC”) rules, we will reimburse brokers, fiduciaries and custodians for their costs in forwarding proxy materials to the beneficial owners of shares.
Our
In addition to soliciting proxies by mail, certain of our directors,
and officers
or employees of affiliates of our operator may solicit proxies by
mail, telephone,
and personal
contact.contact, email or other means of communication. They will not receive any additional compensation for these activities.
IMPORTANT: If your shares of Common Stock are held in the name of a brokerage firm, bank, nominee or other institution
(other than a TASE member), you should provide instructions to your broker, bank, nominee or other institution on how to vote your shares of Common Stock. Please contact the person responsible for your account and give instructions for a proxy to be
completedexercised for your shares of Common Stock.
5
If you hold your shares through a TASE member, you should vote your shares by following the instructions in question 9.
SECURITY OWNERSHIP OF CIM COMMERCIAL’STHE COMPANY’S BOARD OF DIRECTORS AND EXECUTIVE OFFICERS AND CURRENT BENEFICIAL OWNERS
Directors and Executive Officers
The following table sets forth
certain information regarding the beneficial ownership of our Common Stock,
Series A Preferred Stock, $0.001 par value per share (“Series A Preferred Stock”), and Series A1 Preferred Stock, $0.001 par value per share (“Series A1 Preferred Stock”), as of
March 30, 2016June 16, 2023 by (1) each named executive officer, (2) each current director and (3) all executive officers and directors as a group.
Name of Beneficial Owner(1) | | Number of Shares
Beneficially Owned | | Percent
of Class | |
Charles E. Garner II | | 9,108 | | * | |
Jan F. Salit | | 52,601 | (2) | * | |
David Thompson | | — | | — | |
Richard Ressler | | 95,821,922 | (3) | 98.1 | % |
Avi Shemesh | | 95,808,216 | (3) | 98.1 | % |
Shaul Kuba | | 95,808,216 | (3) | 98.1 | % |
Kelly Eppich | | 4,492 | | * | |
Douglas Bech | | 9,000 | | * | |
Robert Cresci | | 4,000 | | * | |
Frank Golay, Jr. | | 4,000 | | * | |
Directors and Executive Officers as a group (10 persons) | | 95,933,667 | | 98.2 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Common Stock | | Series A Preferred Stock | | Series A1 Preferred Stock |
| Name of Beneficial Owner | | No. of Shares | | Percent of Class | | No. of Shares | | Percent of Class | | No. of Shares | | Percent of Class |
| David Thompson | | 25,000 | | | * | | — | | — | | — | | — |
| Barry N. Berlin | | 27,901 | | | * | | — | | — | | — | | — |
| Richard Ressler | | 10,152,921 | (1)(2) | | 44.65% | | 568,681 | | 7.15% | | 200,000 | | 2.51% |
| Avraham Shemesh | | 10,075,713 | (1)(3) | | 44.31% | | 568,681 | | 7.15% | | 200,000 | | 2.51% |
| Shaul Kuba | | 10,075,713 | (1)(3) | | 44.31% | | 568,681 | | 7.15% | | 200,000 | | 2.51% |
| Douglas Bech | | 43,450 | | | * | | — | | — | | — | | — |
| Marcie Edwards | | 13,829 | | | * | | — | | — | | — | | — |
| John Hope Bryant | | — — | | | * | | — | | — | | — | | — |
| Elaine Wong | | 7,746 | | | * | | — | | — | | — | | — |
| Directors and Executive Officers as a group (9 persons) | | 10,361,688 | | | 45.57% | | — | | — | | — | | — |
__________________
(1)
The business address of Messrs. Garner, Salit, Bech, Cresci and Golay, for the purposes hereof, is c/o CIM Commercial Trust Corporation, 17950 Preston Road, Suite 600, Dallas, Texas 75252. The business address of Messrs. Thompson, Ressler, Shemesh, Kuba and Eppich, for the purposes hereof, is c/o CIM Group,
4700 Wilshire Boulevard, Los Angeles, California 90010.(2) Mr. Salit hasLLC is the indirect sole votingequity member of each of CIM Urban Sponsor, LLC, CIM CMCT MLP, LLC and investment power over these shares, which include 122 shares held in an IRA. Includes 667 restricted stock awards owned by Mr. Salit.
(3) Messrs.CIM Capital Real Property Management, LLC. Because of their positions with CIM Group, LLC, Shaul Kuba, Richard Ressler and Avraham Shemesh, and Kubathe founders of CIM Group, LLC, may be deemed to beneficially own 95,440,000the 9,168,916 shares of Common Stock (40.32%) and 568,681 shares of Series A Preferred Stock (7.15%) owned directly by virtueCIM CMCT MLP, LLC, the 473,033 shares of their position as the control persons of CIM Holdings, Inc., which is the sole managing member of CIM Group, LLC (“CIM Group”Common Stock (2.08%), which is the sole manager of owned directly by CIM Urban Partners GP,Sponsor, LLC which isand the sole managing member200,000 shares of Urban Partners II, LLC, that has the power to vote and dispose of such shares. Messrs. Ressler, Shemesh and Kuba may also be deemed to beneficially own 353,944 sharesSeries A1 Preferred Stock (2.51%) owned directly by virtue of their position as the control persons of CIM Service Provider, LLC that has the power to vote and dispose of such shares.Capital Real Property Management, LLC. Messrs. Ressler, Shemesh and Kuba have shared voting and investment power over all of these shares. Each of Messrs. Ressler, Shemesh and Kuba disclaims beneficial ownership of all of these shares except to the extent of his pecuniary interest therein.
(2) Mr. Ressler has sole voting and investment power over 122,628 shares of Common Stock held by a subsidiary of a trust formed by Mr. Ressler for the benefit of his family members.
(3) Each of Messrs. Shemesh and Kuba have shared voting and investment power over 45,420 shares of Common Stock held by each of their respective family trusts, with respect to which they were grantors.
Beneficial Owners of More than 5% of our Common Stock
The following table sets forth certain information regarding the beneficial ownership of our Common Stock,
Series A Preferred Stock and Series A1 Preferred Stock based on filings with the SEC as of
March 30, 2016June 16, 2023 by each person known by us to
beneficially own
beneficially more than 5% of our
shares.Name and Address of Beneficial Owner | | Number of Shares
Beneficially Owned | | Percent of
Class | |
Urban Partners II, LLC | | 95,440,000 | | 97.7 | % |
c/o CIM Group
4700 Wilshire Boulevard
Los Angeles, California 90010 | | | | | |
Richard Ressler(1) | | 95,821,922 | | 98.1 | % |
Avi Shemesh(1) | | 95,808,216 | | 98.1 | % |
Shaul Kuba(1) | | 95,808,216 | | 98.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Common Stock | Series A Preferred Stock | | Series A1 Preferred Stock |
| Name and Address of Beneficial Owner | | No. of Shares | | Percent of Class | | No. of Shares | | Percent of Class | | No. of Shares | | Percent of Class |
Richard Ressler(1) | | 10,152,921 | (2) | 44.65% | | 568,681 | | 7.15% | | 200,000 | | 2.51% |
Avraham Shemesh(1) | | 10,075,713 | (3) | 44.31% | | 568,681 | | 7.15% | | 200,000 | | 2.51% |
Shaul Kuba(1) | | 10,075,713 | (3) | 44.31% | | 568,681 | | 7.15% | | 200,000 | | 2.51% |
CIM CMCT MLP, LLC (1) | | 9,168,916 | | 40.32% | | 568,681 | | 7.15% | | — | | — |
The 1 8 999 Trust, XYZ LLC, Daniel M. Negari, The Insight Trust and Michael R. Ambrose 13D Group(4) 2121 E. Tropicana Avenue, Suite 2, Las Vegas, Nevada 89119 | | 1,381,045 | | 6.07% | | — | | — | | — | | — |
___________________
(1)The business address of Messrs. Ressler, Shemesh and Kuba, for the purposes hereof, and the address of CIM CMCT MLP, LLC, is c/o CIM Group, LLC, 4700 Wilshire Boulevard, Los Angeles, California 90010. Messrs.CIM Group, LLC is the indirect sole equity member of each of CIM CMCT MLP, LLC and CIM Capital Real Property Management, LLC. Because of their positions with CIM Group, LLC, Shaul Kuba, Richard Ressler and Avraham Shemesh, and Kubathe founders of CIM Group, LLC, may be deemed to beneficially own 95,440,000the 9,168,916 shares of Common Stock (40.32%), 568,681 shares of Series A Preferred Stock (7.15%) owned directly by virtueCIM CMCT MLP, LLC and the 200,000 shares of their position as the control persons ofSeries A1 Preferred Stock (2.51%) owned directly by CIM Holdings, Inc., which is the sole managing member of CIM Group, which is the sole manager of CIM Urban Partners GP, LLC, which is the sole managing member of Urban Partners II, LLC, that has the power to vote and dispose of such shares. Messrs. Ressler, Shemesh and Kuba may also be deemed to beneficially own 353,944 shares by virtue of their position as the control persons of CIM Service Provider, LLC that has the power to vote and dispose of such shares.Capital Real Property Management, LLC. Messrs. Ressler, Shemesh and Kuba have shared voting and investment power over all of these shares. Each of Messrs. Ressler, Shemesh and Kuba disclaims beneficial ownership of all of these shares except to the extent of his pecuniary interest therein.6
(2)Mr. Ressler has sole voting and investment power over 122,628 shares of Common Stock held by a subsidiary of a trust formed by Mr. Ressler for the benefit of his family members.
(3)Each of Messrs. Shemesh and Kuba have shared voting and investment power over 45,420 shares of Common Stock held by each of their respective family trusts, with respect to which they were grantors.
(4)This information is based solely upon information contained in a Schedule 13D filed with the SEC on March 10, 2023 and Amendment No 1 to such Schedule 13D filed on April 17, 2023. The 1 8 999 Trust directly beneficially owned 624,045 shares of Common Stock (2.7%). XYZ, LLC directly beneficially owned 750,000 Shares (3.3%). Mr. Negari, as trustee of the 1 8 999 Trust and a manager and an owner of XYZ LLC, may be deemed to beneficially own the 624,045 Shares beneficially owned by the 1 8 999 Trust and the 750,000 Shares beneficially owned by XYZ, LLC. The Insight Trust directly beneficially owned 7,000 Shares (less than 1%). Mr. Ambrose, as trustee of The Insight Trust and an owner of XYZ, LLC, may be deemed to beneficially own the 7,000 Shares beneficially owned by The Insight Trust and the 750,000 Shares beneficially owned by XYZ, LLC.
PROPOSAL 1
1:
ELECTION OF DIRECTORS
Pursuant to our Bylaws, the
The Board presently consists of seven directors.
At the Annual Meeting, you will be asked to
electconsider and vote upon the election of seven directors. The seven current directors will be up for election at the Annual Meeting. For your review and consideration, a biography of each nominee for director is contained in this proxy statement under the section titled “Corporate Governance, Director Nominees.” The term of office of each person elected to be a director of the Company will be until the
next regular or annual meeting of the stockholders
at which election of directors is an agenda item,in 2024 and until such person’s successor is duly elected and
qualified.qualifies. If any unforeseen event prevents one or more of the nominees from serving as a director, your votes will be cast for the election of
aany substitute or substitutes
selectednominated by the Board. In no event, however, can the proxies be voted for a greater number of persons than the number of nominees named. Unless otherwise instructed, the proxies will vote for the election of
each current director and the nominees
listed below to serve as directors of the Company.
Directors are elected by a plurality of the affirmative votes cast by those holders present and entitled to vote at the Annual Meeting at which a quorum is present. There is no cumulative voting in the election of directors.
The Board recommends a vote “FOR” the election of each of the directors nominated.
7
PROPOSAL 2
RATIFICATION2:
AMENDMENT OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
THE EQUITY COMPENSATION PLAN
Background and Purpose
The Audit Committee, comprisedBoard adopted the Equity Compensation Plan and submitted it to our stockholders for their approval at the 2015 annual meeting of stockholders. On May 6, 2015, our stockholders approved the Equity Compensation Plan. An aggregate of 133,333 shares of our Common Stock was reserved for issuance under the Equity Compensation Plan (taking into consideration the 1-for-3 reverse stock split that occurred in 2019). Since the adoption of the Equity Compensation Plan, 114,547 shares (after giving effect to the 1-for-3 reverse stock split that occurred in 2019) have been issued in accordance with grants under the Equity Compensation Plan. An increase in the number of authorized shares is therefore necessary in order for the Company to be able to continue to utilize the Equity Compensation Plan.
Our Board has unanimously adopted and is submitting for stockholder approval an amendment to increase the number of shares covered by, and reserved for issuance under, the Equity Compensation Plan by 400,000 shares of Common Stock (the “Amendment”). If such increase is authorized by the stockholders, it would result in an aggregate of 533,333 shares of Common Stock authorized for issuance under the Equity Compensation Plan, which represents approximately 2.34% of our issued and outstanding Common Stock. The Amendment will enable the Company to continue to make grants under the Equity Compensation Plan to the independent membersdirectors of the Company. The Equity Compensation Plan is otherwise materially unchanged. A copy of the Amendment is attached as Appendix A hereto.
As of the date of this proxy statement, assuming the current usage rate and stock price levels, if the increase in the number of shares authorized for issuance under the Equity Compensation Plan is not approved, the Company would not have sufficient shares to make equity-based grants pursuant to the Equity Compensation Plan to its independent directors (the “Non-Employee Directors”). The Board believes that without the continued ability to make grants of equity-based awards pursuant to the Equity Compensation Plan, the Company would be at a competitive disadvantage in the recruitment and retention of Non-Employee Directors.
The following summary of the material terms of the Equity Compensation Plan, as amended, is qualified in its entirety by reference to the Equity Compensation Plan, which is attached as Exhibit “A” to our proxy statement filed with the SEC on April 17, 2015, and the Amendment. Capitalized terms used in this summary but not defined in this proxy statement have the meanings set forth in the Equity Compensation Plan.
Overview
The purpose of the Equity Compensation Plan is to help the Company and any of its subsidiaries: (1) align the interests of award grantees (each, a “Grantee”) with the Company’s stockholders; and (2) promote ownership of the Company’s equity. The Equity Compensation Plan permits the granting of restricted shares or restricted stock units to its Non-Employee Directors. The Equity Compensation Plan also provided for specific grants to certain employees, but since the grants have already occurred, the related provisions are not described herein.
Administration
The Board or any committee or sub-committee of the Board (the “Audit Committee”as designated by the Board from time to time (collectively, the “Committee”) administers the Equity Compensation Plan. In particular, the Committee will have the authority in its sole discretion to: exercise all of the powers granted to it under the Equity Compensation Plan; construe, interpret and implement the Equity Compensation Plan and all written documents by which an award pursuant to the Equity Compensation Plan (an “Award”) is evidenced (an “Award Agreement”); prescribe, amend and rescind rules and regulations relating to the Equity Compensation Plan, including rules governing the Committee’s own operations; make all determinations necessary or advisable in administering the Equity Compensation Plan; amend the Equity Compensation Plan to reflect changes in applicable law; and grant, or recommend to the Board for approval to grant, Awards and determine who will receive Awards, when such Awards will be granted and the terms of such Awards.
Actions of the Committee may be taken by the vote of a majority of its members present at a meeting (which may be held telephonically). Any action may be taken by a written instrument signed by a majority of the Committee members, and action so taken will be as fully effective as if it had been taken by a vote at a meeting. The determination of the Committee on all matters relating to the Equity Compensation Plan or any Award Agreement will be final, binding and conclusive.
Eligibility
Awards under the Equity Compensation Plan may be made to any Non-Employee Director of the Company. As of June 21, 2023, all four of our Non-Employee Directors are eligible to participate in the Equity Compensation Plan.
Available Shares and Adjustments
Subject to adjustment as described below, the total number of shares of Common Stock that may be granted under the Equity Compensation Plan, as amended by this Proposal 2, will be 533,333.
The Committee will (a) adjust the number of authorized shares of restricted stock, (b) adjust the individual Award amounts set forth above and (c) adjust the terms of any outstanding Awards (including, without limitation, the number of shares of restricted stock covered by each outstanding Award and the type of property or securities to which the Award relates), has appointed BDOin each case, in such manner as our independent registered public accounting firm (the independent auditors)it deems appropriate (including, without limitation, by payment of cash) to prevent the enlargement or dilution of rights, as a result of any increase or decrease in the number of issued shares of restricted stock (or issuance of shares of stock other than Common Stock) resulting from a recapitalization, stock split, reverse stock split, stock dividend, spinoff, split up, combination, reclassification or exchange of shares of Common Stock, merger, consolidation, rights offering, separation, reorganization or liquidation or any other change in the corporate structure or shares, including any extraordinary dividend or extraordinary distribution.
Awards Under the Equity Compensation Plan
Awards may be made under the Equity Compensation Plan in the form of restricted shares or restricted stock units, which may, in either case, provide for dividend equivalent rights.
Restricted Shares
Upon grant of restricted shares, the Grantee will have the rights of a stockholder with respect to our operations forsuch restricted shares, subject to any other restrictions and conditions as the fiscal year ending December 31, 2016. RepresentativesCommittee may include in the applicable Award Agreement. Each Grantee of BDO are expected toan Award of restricted shares will, during the period of restriction, be present at the Annual Meetingbeneficial and record owner of such restricted shares and will have full voting rights with respect thereto. Unless the opportunity to make a statement if they desire to do so andCommittee determines otherwise in an Award Agreement, during the period of restriction, all dividends or other distributions paid upon any restricted share will answer appropriate questions. Stockholder ratificationbe retained by the Company for the account of the appointmentrelevant Grantee. Such dividends or other distributions will revert back to the Company if for any reason the restricted share upon which such dividends or other distributions were paid reverts back to the Company. Upon the expiration of BDOthe period of restriction, all such dividends or other distributions made on such restricted shares and retained by the Company will be paid to the relevant Grantee (without interest).
Restricted Stock Units
The Committee may grant Awards of restricted stock units in such amounts and subject to such terms and conditions as our independent registered public accounting firmthe Committee may determine. A Grantee of a restricted stock unit will have only the rights of a general unsecured creditor of the Company, until delivery of shares, cash or other securities or property is made as specified in the applicable Award Agreement. On the delivery date specified in the Award Agreement, the Grantee of each restricted stock unit not requiredpreviously forfeited or terminated will receive one share of Common Stock, cash or other securities or property equal in value to a share of Common Stock or a combination thereof, as specified by our Bylawsthe Committee.
Dividend Equivalent Rights
The Committee may include in the Award Agreement with respect to any Award a dividend equivalent right entitling the Grantee to receive amounts equal to all or otherwise. However,any portion of the regular cash dividends that would be paid on the shares covered by such Award if such shares had been delivered pursuant to such Award. The Grantee of a dividend equivalent right will have only the rights of a general unsecured creditor of the Company until payment of such amounts is made as specified in the applicable Award Agreement. In the event such a provision is included in an Award Agreement, the Committee will determine whether such payments will be made in cash, in shares or in another form, whether they will be conditioned upon the vesting of the Award to which they relate, the time or times at which they will be made, and such other terms and conditions as the Committee will deem appropriate.
Amendment
Unless otherwise provided in the Equity Compensation Plan or in an Award Agreement, the Board is submitting the appointment of BDO to the stockholders for ratification as a matter of good corporate governance. If the stockholders fail to ratify the appointment, the Audit Committee may reconsider whether or not to retain BDO. Even if the selection is ratified, the Audit Committee may in its discretion select a different independent registered public accounting firm at any time duringand from time to time suspend, discontinue, revise or amend the year if it determinesEquity Compensation Plan in any respect whatsoever but, subject to the administration and adjustment provisions of the Equity Compensation Plan (summarized above), no such
amendment may materially adversely impair the rights of the Grantee of any Award without the Grantee’s consent and no Award Agreement may be amended to materially adversely impair the rights of a Grantee without the Grantee’s consent.
Unless otherwise determined by the Board, stockholder approval of any suspension, discontinuance, revision or amendment will be obtained only to the extent necessary to comply with any applicable laws, regulations or rules of a securities exchange or self-regulatory agency.
New Plan Benefits
The amounts that such a change wouldwill be awarded under the Equity Compensation Plan cannot currently be determined because the Awards will be made at the Committee’s discretion, subject to the terms of the Equity Compensation Plan. Simply to illustrate potential future use of the Equity Compensation Plan, the grant date fair value (determined in accordance with ASC Topic 718) and number of shares of Common Stock subject to Awards that were received by the four Non-Employee Directors in the best interests2022 fiscal year were $219,988 and 30,984, respectively, in the aggregate.
U.S. Federal Tax Implications of Awards
The following summary generally describes the principal federal (but not state and local) income tax consequences of the
Companyissuance of restricted shares and
its stockholders.We are asking that you ratifyrestricted stock units under the appointment of BDO, although your ratificationEquity Compensation Plan. It is general in nature and is not required.
intended to cover all tax consequences that may apply to a particular participant or the Company. The provisions of the Internal Revenue Code of 1986, as amended, and the regulations thereunder relating to these matters are complex and subject to change and their impact in any one case may depend upon the particular circumstances.
A Grantee will not realize any income, and the Company will not be entitled to a deduction, at the time that a restricted share or restricted stock unit is granted under the Equity Compensation Plan or at the time that a restricted stock unit vests. Upon vesting of a restricted share, payment or settlement of a restricted stock unit award in Common Stock, cash or other securities or property, the Grantee will recognize ordinary income, and the Company will be entitled to a corresponding deduction, equal to the fair market value of any Common Stock, cash or other securities or property vested or received.
The affirmative vote of a majority of the votes cast at the Annual Meeting
at which a quorum is present is required to approve the
ratification of the appointment of BDO as our independent registered public accounting firm.Amendment.
The Board recommends a vote “FOR” the ratificationapproval of the appointment of BDO as our independent registered public accounting firm.amendment to the Equity Compensation Plan.
PROPOSAL 3
3:
ADVISORY VOTE ON EXECUTIVE COMPENSATION
As
we do each year, and as required by Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we are seeking advisory stockholder approval of the compensation of our named executive
officers.officers as further described below under “Executive Compensation.” The stockholder vote is an advisory vote only and is not binding on the Company or the Board. Although the vote is non-binding, the Board values the opinion of our stockholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers.
As described in detail in Unless the “Compensation Discussion and Analysis” section below, ourBoard modifies its policy on the frequency of future advisory votes on executive compensation, the next such vote will occur at the 2024 annual meeting of stockholders.
Our executive compensation system is generally designed to promote the Company’s financial and operational success by (i) attracting, motivating and assisting in the retention of highly qualified and talented executives, including our named executive officers, who will enable us to perform better than our competitors and drive long-term stockholder value; and (ii) reinforcing desired financial business results to our executives, including our named executive officers, and motivating them to make decisions that produce such results. We believe that our executive compensation system appropriately links pay to both the Company’s and the executive’s performance and is well aligned with the long-term interests of our stockholders. The Board does not allocate a fixed percentage to any specific component of compensation, but works with management to design an overall compensation structure that best serves its goals and appropriately motivates our executive officers to provide outstanding service to the Company. We believe that our executive compensation objectives have resulted in executive compensation decisions that have appropriately incentivized (without undue risk) the achievement of financial goals that have benefited our Company and our stockholders and are expected to drive long-term stockholder value over time. The
As described in detail in the “Compensation Discussion and Analysis” section below, the Company is externally
managedoperated by
the Operator (as defined in “Related Person Transactions—Transactions with Related Persons—Asset Management and Other Fees to Related Parties”), an affiliate of CIM
REIT and CIM Group, L.P.
(as further described under “Related Person Transactions,” the “Advisor”), pursuant to an Investment Management Agreement (the “Investment Management Agreement”) between the
AdvisorOperator and CIM Urban Partners L.P. (“CIM Urban”), a principal subsidiary of the Company. In addition, CIM Service Provider, LLC (the
“Manager”“Administrator”), a subsidiary of CIM Group,
LLC, provides certain
management and administrative services to the Company and its subsidiaries pursuant to a Master Services Agreement (the “Master Services Agreement”).
Mr. GarnerDavid Thompson, the Company’s Chief Executive Officer, and
Mr. ThompsonNathan D. DeBacker, the Company’s former Chief Financial Officer, are employed by an affiliate of the
AdvisorOperator and the
ManagerAdministrator and their compensation is determined by, and paid to them directly by, such affiliate. The Company did not pay Mr.
Garner, our Chief Executive Officer, andThompson or Mr.
Thompson, our Chief Financial Officer,DeBacker any compensation in
2015.2021 and 2022. Therefore, their compensation is not discussed in the “Compensation Discussion and Analysis” section below.
We are asking stockholders to vote on the following advisory resolution:
Resolved, that the stockholders approve,
on a non-binding advisory basis, the compensation of
Jan F. Salit,Barry N. Berlin, the Company’s only named executive officer being compensated by the Company, as disclosed pursuant to the SEC’s compensation disclosure rules, including the Compensation Discussion and Analysis, compensation tables and narrative discussion contained in
thisthe proxy statement.
The affirmative vote of a majority of the votes cast at the Annual Meeting
at which a quorum is present is required to approve the proposal.
The Board recommends a vote “FOR” the approval of the
advisory resolution on the Company’s executive compensation
of Jan F. Salit, a named executive officer,for the year ended December 31, 2022, as disclosed in this proxy statement.
9
PROPOSAL 4:
ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON EXECUTIVE COMPENSATION
As required under Section 14A of the Exchange Act, we are also asking our stockholders to vote on a proposal, commonly known as a “say on pay frequency” proposal, which gives our stockholders the opportunity to indicate how often they believe we should conduct future advisory votes on executive compensation, or “say-on-pay” votes, such as that provided for in Proposal 3. Stockholders may indicate whether they prefer that we hold a “say-on-pay” vote every one year, every two years or every three years, or they may abstain from this vote. We are required to seek an advisory stockholder vote on the frequency of future “say-on-pay” votes at least once every six years, although we may seek stockholder input more frequently. As this is an advisory vote, the result will not be binding, however, we value the opinion of our stockholders and welcome communication regarding our executive compensation structure and policies.
After considering each option for the frequency on advisory say-on-pay votes, the Board has determined that an annual “say-on-pay” vote is the best approach for our Company and our stockholders and is consistent with our current, annual “say-on-pay” voting.
You may cast your vote by choosing the option of one year, two years, three years, or abstain from voting.
Vote Required
The option of one year, two years, or three years that receives a majority of votes cast by stockholders at the Annual Meeting at which a quorum is present will be the frequency for the advisory vote on executive compensation that has been selected by stockholders. In the event that no option receives a majority of votes cast, we will consider the option that receives the most votes to be the option selected by stockholders. Even though your vote is advisory and therefore will not be binding on the Company, the Board values the opinion of our stockholders and will consider our stockholders’ vote. Nonetheless, the Board may decide that it is in the best interests of our stockholders and the Company to hold an advisory vote on executive compensation more or less frequently than the option voted by our stockholders.
The Board unanimously recommends a vote of “one year” as the frequency with which stockholders are provided an advisory vote on executive compensation.
PROPOSAL 5:
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE, LLP
AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee, comprised of independent members of the Board (the “Audit Committee”), has appointed Deloitte & Touche, LLP (“Deloitte”) as our independent registered public accounting firm with respect to our operations for the fiscal year ending December 31, 2023. Representatives of Deloitte are expected to be present at the Annual Meeting and will have the opportunity to make a statement if they desire to do so and will answer appropriate questions. Stockholder ratification of the appointment of Deloitte as our independent registered public accounting firm is not required by our bylaws or otherwise. However, the Board is submitting the appointment of Deloitte to the common stockholders for ratification as a matter of good corporate governance. If the common stockholders fail to ratify the appointment, the Audit Committee may reconsider whether to retain Deloitte. Even if the appointment is ratified, the Audit Committee may in its discretion select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company.
We are asking that you ratify the appointment of Deloitte, although your ratification is not required.
Vote Required
The affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present is required to approve the ratification of the appointment of Deloitte as our independent registered public accounting firm.
The Board recommends a vote “FOR” the ratification of the appointment of Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2023.
Company Leadership Structure; Board Role in Risk Oversight
Leadership Structure.The Board does not have a formal policy regarding the leadership structure of the Company and whether the roles of chairman and chief executive officer should be separated, but instead believes that these matters should be determined based on a number of different factors and circumstances, including the Company’s position, history, size, culture, stockholder base, board size and board composition and that, as a result, the appropriate structure may change from time to time as circumstances warrant. From October 26, 2012 until March 11, 2014, Mr. Salit served as our Chief Executive Officer and as our Chairman of the Board. On March 11, 2014 following the closing of the merger (the “Merger”) pursuant to the Agreement and Plan of Merger, dated as of July 8, 2013, by and among PMC Commercial Trust, CIM Urban REIT, LLC (“CIM REIT”), and their respective merger subsidiaries, we separatedCurrently, the roles of Chairman of the Board and principal executive officer.Chief Executive Officer of the Company are separated. Our principal executive officer is Mr. Garner and our Chairman of the Board is Mr. Ressler.Ressler and our Chief Executive Officer is Mr. Thompson.
Risk Oversight.The Company is exposed to a variety of risks. The entire Board regularly assesses major risks facing the Company and reviews options for their mitigation. The Board may appoint a committee to address a specific risk or to oversee the Company’s response to a particularspecific risk. In particular, the Audit Committee of the Board oversees the Company’s policies with respect to risk assessment and risk oversight and oversees risk with respect to financial reporting matters. The Board also relies on management to bring significant matters to its attention. The Board believes that the Company’s current leadership structure, including the independent Audit Committee oversight function and the open access of the Board to the Company’s executive officers and senior management as the Board determines is appropriate, supports the oversight role of the Board in the Company’s risk management.
Statement on Corporate Governance
Governance Principles. The Company is dedicated to establishing and maintaining high standardsBoard has adopted a set of corporate governance.
Governance Principles that provides a framework for the governance of the Company. The Company’s Governance Principles may be found on the Company’s website at https://shareholders.creativemediacommunity.com/corporate-overview/corporate-governance in the section entitled “Governance Documents.”
Contacting the Board.The Board welcomes your questions and comments. If you would like to communicate directly with the Board, or if you have a concern related to the Company’s business ethics or conduct, financial statements, accounting practices or internal controls, then you may submit your correspondence to the Secretary of the Company, at 17950 Preston Road, Suite 600, Dallas, Texas 75252, or you may call the Ethics Hotline at 1-800-292-4496. All communications will be forwarded to the Audit Committee.Committee, which in turn may forward certain communications to the entire Board in its discretion.
Code of Ethics.The Board has adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees of the Company, the AdvisorOperator (as defined below) and the Manager,Administrator (as defined below), including the Company’s principal executive officer and principal financial and accounting officer (the “Code of Ethics”). If the Board amends any provisions of the Code of Ethics that applies to the Company’s principal executive officer or
senior financial officersany other executive officer of the Company or grants a waiver in favor of any such persons, the Company intends to satisfy its disclosure requirements by disclosing the amendment or waiver
in a Current Report on
a Form
8-K8 K filed with the SEC within four business days following such amendment or waiver.
The Company’s Code of
Business Conduct and Ethics may be
viewedfound on the Company’s website at
http:https://
investors.cimcommercial.com/ under the “Corporate Overview/Corporate Governance” section.Independence of Directors
As a result of and immediately following the Merger, Urban Partners II, LLC (“Urban II”), an affiliate of CIM REIT, acquired approximately a 97.8% ownership interestshareholders.creativemediacommunity.com/corporate-overview/corporate-governance in the Company. Currently, Urban II beneficially owns shares of Common Stock that represents, together with shares held by other affiliates of CIM Group and the Company’s executive officers and directors, approximately 98.2% of the total voting power of the Company. As a result of this ownership level, CIM Commercial is a “controlled company” exempt from certain rules of The NASDAQ Stock Market LLC requiring, among other things, a board of directors with a majority of independent directors.
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section entitled “Governance Documents.”
The Board undertook a review of the independence of the current members of the Board. In making independence determinations, the Board observes all criteria for independence established by the SEC and The NASDAQ Stock Market LLC. During this review, the Board considered transactions and relationships between each director or any member of his or her immediate family and the Company, including (if applicable) those reported under “Related Person Transactions.” The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent. As a result of this review, the Board affirmatively determined that Mr. Bech, Mr. Cresci and Mr. Golay meet the aforementioned criteria for “independence.”
Meetings of the Board
The Board held a total of
nineseven meetings during the year ended December 31,
2015.2022. Each
incumbent director attended
an aggregate of at least 75 percent of the
aggregate number of Board meetings and the meetings of committees on which he
or she served during
2015.2022. Directors are encouraged to attend
in person the annual meeting of stockholders of the Company. All
of the membersbut one member of our Board
virtually attended our
20152022 annual meeting of stockholders.
Independent Director Meetings
The independent directors have at least one regularly scheduled meeting or executive session per year without the presence of other directors and management. Any independent director can request that an additional executive session be scheduled.
The Board has
the following standing committees: an audit
committee. The Board is not required to have (and does not have)committee, a compensation committee
orand a nominating and corporate governance
committee, based on its status as a “controlled company,” but may decide to have such committees (or other committees) in the future.committee.
Audit Committee.Committee. The Company has a standing Audit Committee that oversees the accounting and financial reporting processes as well as legal, compliance and risk management matters. The Audit Committee consists of Mr. CresciMs. Wong (chairman), Mr. Bech and Mr. Golay.Ms. Edwards. The Audit Committee is comprised entirely of directors who meet the independence and financial literacy requirements of The NASDAQ Stock Market LLC, as well as the standards established under the Sarbanes-Oxley Act of 2002.Nasdaq and applicable SEC rules. See “Corporate Governance—“—Independence of Directors.” In addition, the Board has determined that Mr. CresciMs. Wong qualifies as an “audit committee financial expert” as defined in SEC rules. The Audit Committee’s responsibilities include providing assistance to the Board in fulfilling its responsibilities with respect to oversight of the integrity of the Company’s financial statements, the Company’s compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications, performance and independence, and the performance of the Company’s internal audit function, if any. In accordance with its Audit Committee Charter, the Audit Committee is directly responsible for the appointment and oversight of the independent registered public accounting firm, who reports directly to the Committee, approval of the engagement fee of the independent registered public accounting firm and
pre-approvalpre approval of the audit services and any permitted
non-auditnon audit services they may provide to the Company. In addition, the Audit Committee reviews the scope of audits as well as the annual audit plan and evaluates matters relating to the audit and internal controls of the Company. The Audit Committee holds separate executive sessions, outside the presence of executive management, with the Company’s independent registered public accounting firm.
The
During 2022, the Audit Committee held
eight meetings during the fiscal year ended December 31, 2015.six meetings.
The charter for the Audit Committee may be viewedfound on the Company’s website at http:https://investors.cimcommercial.com/ undershareholders.creativemediacommunity.com/corporate-overview/corporate-governance in the “Corporate Overview/section entitled “Committee Charters.”
Compensation Committee. Our Compensation Committee consists of two of our independent directors: Mr. Bech, who serves as chairman, and Ms. Wong. Our Board has adopted a charter for the Compensation Committee that sets forth its specific functions, powers, duties and responsibilities. Among other things, the Compensation Committee charter calls upon the Compensation Committee to:
•In consultation with senior management, establish the Company’s general compensation philosophy and oversee the development, implementation and administration of compensation plans, policies and programs, if any;
•Oversee compliance of all compensation-related disclosure requirements, including producing an annual Compensation Committee Report for inclusion in the Company’s proxy statement in accordance with applicable SEC rules and regulations; and
•Review and make recommendations to the Board regarding any changes in compensation for directors.
During 2022, the Compensation Committee held four meetings.
The charter for the Compensation Committee may be found on the Company’s website at https://shareholders.creativemediacommunity.com/corporate-overview/corporate-governance in the section entitled “Committee Charters.”
Nominating and Corporate Governance” section.Governance Committee
Director Nomination ProceduresEffective with the Merger, the Company does not have a nominating. Our Nominating and Corporate Governance Committee is comprised of two of our independent directors: Mr. Bech, who serves as chairman, and Ms. Edwards. The Nominating and Corporate Governance Committee was formed to establish and implement our corporate governance committee. The Board believes that it is appropriatepractices and to nominate individuals for CIM Commercial not to have such a committee because of CIM Commercial’s status as a “controlled company.” The entire Board participates in the consideration of nominees for director.
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The Board will consider nominees for director suggested by stockholders in written submissionselection to the Company’s Secretary in compliance withBoard. Our Nominating and Corporate Governance Committee operates pursuant to a written charter adopted by our Board. Among other things, the nomination procedures set forth below.
Director Qualifications. The Board has policies establishing certain desired attributescommittee charter calls upon the Nominating and Corporate Governance Committee to: (i) periodically review the size and composition of the Board and recommend to the Board such modifications to its size and/or composition as are determined by the Nominating and Corporate Governance Committee to be necessary or desirable; (ii) recommend to the Board the director nominees for the next annual meeting of stockholders; and (iii) develop and recommend to the Board a whole. Eachset of corporate governance principles applicable to the Company.
During 2022, the Nominating and Corporate Governance Committee held four meetings.
The charter for the Nominating and Corporate Governance Committee may be found on the Company’s website at https://shareholders.creativemediacommunity.com/corporate-overview/corporate-governance in the section entitled “Committee Charters.”
Director Nomination Procedures
Director Qualifications. The Nominating and Corporate Governance Committee believes that each member of the Board must possess high personal and professional ethics, integrity and values, and be committed to representing the long-termlong term interests of the stockholders, as well as an inquisitive mind, an objective perspective, practical wisdom and mature judgment. In addition, directors must be willing to devote sufficient time carryingto carry out their duties and responsibilities effectively. The Board does not have a formal policy with regardNominating and Corporate Governance Committee is committed to the consideration of diversity in identifying director nominees. However,on the Board, values diversity and believes the Board should reflect an appropriate diversity of viewpoints, background, experience, ethnicity, gender, culture and other demographics.
Identifying and Evaluating Nominees.The BoardNominating and Corporate Governance Committee may consider those factors it deems appropriate in evaluating director candidates as outlined above. The skills and personality of each director should fit with those of the other directors in building a Board that is effective, collegial and responsive to the needs of the Company. The Board considersNominating and Corporate Governance Committee may consider candidates for the Board from any reasonable source, including current board members, stockholders, professional search firms or other persons. The BoardNominating and Corporate Governance Committee does not evaluate candidates differently based on who has made the recommendation. The BoardNominating and Corporate Governance Committee may hire and pay a fee to consultants or search firms to assist in the process of identifying and evaluating candidates.candidates; however, no such consultant or search firm was engaged in the year ended December 31, 2022.
Stockholder Nominees.The BoardNominating and Corporate Governance Committee will consider properly submitted stockholder nominees for election to the Board and will apply the same evaluation criteria in considering such nominees as it would to persons nominated under any other circumstances. Any such nominations proposed for consideration by the Nominating and Corporate Governance Committee must be submitted in accordance with the procedures specified in our bylaws as described below under “Stockholder Proposals for the 2024 Annual Meeting.” Any stockholder nominations proposed for consideration by the BoardNominating and Corporate Governance Committee should include the information required by our bylaws, including the nominee’s name and sufficient biographical information to demonstrate that the nominee meets the qualification requirements for board service as set forth under “—Director Qualifications.” The nominee’s written consent to the nomination should also be included with the nomination submission, which should be sent in accordance with the provisions of our bylaws and addressed to: CIM Commercial Trust Corporation,Mr. Barry Berlin, Secretary of the Company, 17950 Preston Road, Suite 600, Dallas, Texas 75252, Attn: Secretary.75252.
Additional information regarding submitting stockholder proposals is set forth in our
existing bylaws. Stockholders may request a copy of
the bylaw provisions relating to stockholder proposalsour bylaws from the Company’s Secretary,
at CIM CommercialMr. Barry Berlin, Secretary of the Company, Creative Media & Community Trust Corporation, 17950 Preston Road, Suite 600, Dallas, Texas
75252, Attn: Secretary.75252.
Set forth below are the names of the persons nominated as directors, their ages, their offices in the Company, if any, their principal occupations or employment for at least the past five years, the length of their tenure as directors
of the Company and the names of other public companies in which such persons hold or have held directorships during the past five years.
Name
|
| Age
|
| Position
| | | | | | | | | | |
Douglas Bech
Name | | 70
Age | | Director (independent)
Position |
Robert Cresci
Douglas Bech | | 72
77 | | Director (independent) |
Kelly Eppich
John Hope Bryant | | 59
57 | | Director (independent) |
Frank Golay, Jr.
Marcie Edwards | | 68
66 | | Director (independent) |
Shaul Kuba | | 53
60 | | Director |
Richard Ressler | | 57
64 | | Director and Chairman of the Board |
AviAvraham Shemesh
| | 54
61 | | Director |
| Elaine Wong | | 44 | | Director (independent) |
Douglas Bech has served as a director of the Company since March 2014, and since 1997 as founder and Chief Executive Officer of Raintree Resorts International, and its predecessors since August 1997. Raintree owns and operates upscalea private enterprise engaged in vacation ownership resortsand resort operations in Mexico, the United States and Canada. Prior to founding Raintree, Mr. Bech practiced securities and corporate finance law
from 1970
untilto 1997. Mr. Bech also
has served as a director of
j2J2 Global,
sinceInc. from November
2000. From2000 to October 2021 and from August 1988 through November 2000, he served as a director of eFax.com, a company
j2J2 Global,
Inc. acquired in November 2000.
In October 2021 Mr. Bech was appointed non-executive chairman of the Board of directors of Consensus Cloud Solutions, Inc., a company which was spun off to the J2 (now renamed Ziff-Davis) shareholders. Mr. Bech also
servesserved as
leadpresiding independent director of HollyFrontier Corporation
which was the result of a merger of Frontier Oil Corporation and Holly Corporation infrom July 2011
anduntil May 2021, when Mr. Bech retired from its board of directors. Mr. Bech had previously served as a director of Frontier Oil Corporation
since 1993.from 1993 until its merger with Holly Corporation in July 2011. Mr. Bech also served,
from 2014 until February 1, 2016, as an independent trust manager of Moody National REIT II, Inc., a registered, non-traded real estate investment trust that acquires
only limited service hotels in the United States. Mr. Bech’s previous work as a securities and corporate finance lawyer, as a director of other diverse public companies, and his
current experience as a chief executive officer of a
privatemulti-national enterprise
engaged in marketing, management and consumer finance in three different countries, provides expertise on corporate governance, legal matters and finance, as well as a general business management perspective to the Board.
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Robert CresciJohn Hope Bryant has served as a director of the Company since March 2014November 2022. Mr. Bryant is chairman and chief executive officer of Bryant Group Ventures and The Promise Homes Company (“TPHC”), the largest for-profit minority controlled owner of institutional-quality, single-family residential rental homes in the U.S. Bryant founded TPHC as a start-up idea in the summer of 2017, and, by the summer of 2021, it had become the largest minority controlled single family home rental company in the nation. Further, Mr. Bryant has beenserved as a Managing director of Pecks Management Partners Ltd., an investment management firm,Nextdoor Holdings, Inc. since 1990. HeNovember 2021 and currently serves on its Nominating, Corporate Governance, and Corporate Responsibility Committee. Mr. Bryant is also the boardsFounder, Chairman, and Chief Executive Officer of j2Operation HOPE, Inc., the largest not-for-profit and best-in-class provider of financial literacy, financial inclusion, and economic empowerment tools and services in the United States for youth and adults. He has served as an advisor to three sitting U.S. presidents from both political parties. Mr. Bryant is a founding member of the Clinton Global Presbia PLC, Luminex CorporationInitiative and OFS Capital Corporation.a member of the World Economic Forum’s “The Forum of Young Global Leaders.” In addition, he hosts a national podcast series on iHeart and is a regular guest on CNBC’s Squawk Box, a columnist for Bloomberg Opinion and a contributor to Huffington Post and Black Enterprise. Mr. Cresci previously served on the boardBryant was selected to serve as a director because of Continucare Corporation until 2011 and the board of Sepracor, Inc. until 2009. Mr. Cresci’s extensive knowledge of investment management and accounting from his experience with Pecks Management Partnersas an entrepreneur and a real estate investor, his leadership skill and his experience serving on other public company boardsdeep connections to the community, all of directors provides expertise regarding investment strategies, accounting issues and public company matters.
Kelly Eppich which are expected to bring valuable insight to the Board.
Marcie Edwards has served as a director of the Company since March 2014 and is a Principal, Investments of CIM Group, L.P. As a Principal, he servesher appointment by our Board on CIM Group, L.P.’s Investment Committee and Credit Committee. Prior to joining CIM Group, L.P., Mr. EppichFebruary 11, 2021. Ms. Edwards served as the Chief Financial Officer for Decurion Corporation/Pacific Theatres.General Manager of the Los Angeles Department of Water and Power (LADWP) from 2014 to 2017. In that capacity, he was responsible for all areas of finance, accounting, treasury, risk management and information systems development of Decurion Corporation/Pacific Theatres. From 1989 to 2000, he was Vice President Finance / Controller and then Vice President of Business Development, Finance and Administration for the International Recreation Enterprises Division of Warner Brothers. Prior to joining Warner Brothers, Mr. Eppich served as an Assistant Vice President and Assistant Corporate Controller for Maxicare Health Plans, Inc. (1986—1989) and worked for Ernst & Young (1979—1986). Mr. Eppich receivedshe managed a B.S. degree in Financecity agency with an emphasis in Accounting from Weber State University. Mr. Eppich has in-depth knowledgeannual budget of CIM Urban’s businessmore than $6 billion and operations and has significant experience in the preparation and analysisapproximately 10,000 employees. As part of financial statements, strategic planning and financial management.Frank Golay, Jr. hasher role at LADWP, she served as a directormember of the Company since MarchBoard of the Water and Power Employees’ Retirement Plan, overseeing more than $12 billion in investments. Prior to her tenure at LADWP, Ms. Edwards was the City Manager of the City of Anaheim from 2013 to 2014, overseeing an annual budget of more than $1 billion with approximately 3,000 employees, including a fire department, a police department, and a public utility company. From 2000 to 2012, Ms. Edwards was the Utility General Manager of Anaheim Public Utilities and, prior to 2000, Ms. Edwards spent almost 25 years with LADWP in a variety of positions. From 2019 to 2021, she was Chair to the California Wildfire Safety Advisory Board as a gubernatorial appointee. Since 2019, Ms. Edwards has been associated with Sullivan & Cromwell LLPa board member of S&C Electric Company in Chicago (and a member of the Audit Committee since September 1977. From 19772021). In 2019, Ms. Edwards was invited to 1985 he was an associate locatedserve on the Southern California Gas Company’s Advisory Safety Council. Ms. Edwards has a Master in the firm’s New York and London offices. From 1985 to 1988 he was a partner in the firm’s New York office, and from 1988 to 2008 he served as partner in Sullivan & Cromwell LLP’s Los Angeles office. Mr. Golay retired at the end of 2008. Afterwards, he was of counsel to the firm. But in 2016, wishing more completely to retirePublic Administration degree from the practiceUniversity of law, Mr. Golay became a senior counsel to Sullivan & Cromwell LLP, and changed his state bar memberships to retired/inactive. Prior to his retirement, Mr. Golay’s practice included numerous securities offerings, including REIT offerings, merger and acquisition transactions and general corporate advice. He represented both issuers and underwriters, and companies and their financial advisors. Mr. Golay’s clients included Orchard Capital, j2 Global and CIM Group, L.P. Mr. Golay’sLaVerne. Ms. Edwards’ extensive legal experience in the securities, mergers and acquisitions, and general corporate fieldspublic administration provides the Board with a strong resource on a variety of important strategic matters.
Shaul Kuba has served as a director of the Company since March 2014.2014 and Chief Investment Officer of the Company since November 2022. Mr. Kuba is a Co-Founder, Principal and a PrincipalPresident of CIM Group, L.P., has been anCIM’s Real Asset Services division with more than 30 years of active real estate, investor for over 25 years.infrastructure and lending experience. Since co-founding CIM Group, L.P. in 1994, Mr. Kuba has been an integral part of building CIM Group, L.P.’s investment platforms. As a Principal and Head of CIM Group, L.P.’s Development Group, he is actively involved in the development, redevelopment and repositioning of CIM Group, L.P.’s real estate investments including notable projects such as 432 Park Avenue.assets. Additionally, Mr. Kuba is instrumental in sourcing new investment transactionsopportunities and establishing and maintaining relationships with national and regional retailers, hospitality brands and restaurateurs. He serves on CIM Group, L.P.’s Investment, CommitteeAllocation and Real Asset Management CommitteeCommittees and provides guidance on the diverse investment ideasopportunities across CIM Group, L.P.’sCIM’s platforms. He also serves as an officer of various affiliates of CIM. Prior to CIM Group, L.P., Mr. Kuba was involved in a number of successful entrepreneurial real estate activities including co-founding Dekel Development, which developed a varietydeveloper of commercial and residentialmultifamily properties in Los Angeles. Mr. Kuba has in-depthin depth knowledge of CIM Urban’s business and operations and has significant experience with the real estate development process and sourcing new investment transactions as a result of his experience with CIM Group, L.P., including as Co-Founder thereof. Richard Ressler has served as a director and chairman of the Company since March 2014. Mr. Ressler is the founder and President of Orchard Capital Corp.Corporation (“Orchard Capital”), a firm that provides consulting and advisory services tothrough which Mr. Ressler oversees companies in which Orchard Capital or its affiliates invest. Through his affiliation with Orchard Capital, Mr. Ressler serves in various senior capacities with, among others, CIM Group, L.P. (together with its controlled affiliates, “CIM”), a community-focused real
estate and infrastructure investmentowner, operator, lender and management company, anddeveloper, Orchard First Source Asset Management, LLC (together with its controlled affiliates, “OFSAM”), anwhich provides personnel staffing to OFS Capital Management, LLC, a registered investment adviser focusing primarily on investments in middle market and broadly syndicated US loans, debt investments.and equity positions in collateralized loan obligations and other structured credit investments, OFS CLO Management, LLC, a registered investment adviser focusing primarily on investments in broadly syndicated US loans, and OCV Management, LLC (“OCV”), an investor, owner and operator of technology companies. Mr. Ressler also serves as a board member for various public and private companies in which Orchard Capital or its affiliates invest, includinginvest. Mr. Ressler served as non-executive chairman of j2 Global,the board of Ziff Davis, Inc. (NASDAQ “JCOM”(NASDAQ: ZD), formerly known as j2Global, Inc., from 1997 until May 2022. In addition, he has also served as the Chief Executive Officer and President and as a director of CIM Real Estate Finance Trust, Inc. (“CMFT”), a non-listed REIT operated by an affiliate of CIM that invests in net lease core real estate assets as well as real estate loans and other credit investments, since February 2018, and has served as Chairman of its board of directors since August 2018. Mr. Ressler has served as the chairman of the investment risk management committee of CMFT since April 2022 and served as a member of the nominating and corporate governance committee from August 2018 to March 2022. Mr. Ressler served as the Chief Executive Officer, President and a director of Presbia PLC (NASDAQ “LENS”CIM Income NAV, Inc. (“CIM Income NAV”) from February 2018 to December 2021 and as Chairman of the board of directors of CIM Income NAV from August 2018 to December 2021 until CIM Income NAV’s merger with and into CMFT in December 2021. Mr. Ressler served as the Chief Executive Officer and President and as a director of Cole Office & Industrial REIT (CCIT III), Inc. (“CCIT III”) from February 2018 and that are advised by CIM, including as chairman of the Company. its board of directors from August 2018 until CCIT III’s merger with and into CMFT in December 2020. Mr. Ressler also served as a director of Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”) from January 2019 until CCIT II’s merger with Griffin Realty Trust, Inc. (“GRT”) in March 2021 and as a director of Cole Credit Property Trust V, Inc. (“CCPT V”) from January 2019 to October 2019.
Mr. Ressler co-founded CIM Group, L.P. in 1994 and through an agreement with Orchard Capital, chairs its investment, allocation and asset management committees and serves on its credit committee. CIM is a full service urban real estate and infrastructure fund manager with in-house research, acquisition, investment, development, finance, leasing and management capabilities. CIM Investment Advisors, LLC, an affiliateas the Executive Chairman of CIM is registered with the SECand as a registered investment adviser.an officer of various affiliates of CIM, including our manager. He chairs CIM’s Executive, Investment, Allocation and Real Asset Management Committees. Mr. Ressler co-founded the predecessor of OFSAM in 2001 and through an agreement with Orchard Capital, chairs its executive committee. Both OFSAM and its wholly owned subsidiary, OFS Capital Management, LLC, are registered with the SEC as registered investment advisers. Mr. Ressler served as Chairmanco-founded OCV in 2016 and CEO of JCOM from 1997 to 2000 and, through an agreement with Orchard Capital, currently serves aschairs its non-executive Chairman. Mr. Ressler has served as a director of LENS since January 2015 and as chairman of CIM Commercial since 2014.executive committee. Prior to founding Orchard Capital, from 1988 until 1994, Mr. Ressler co-founded and served as Vice Chairman of Brooke Group Limited, the predecessor of Vector Group, Ltd. (NYSE “VGR”)(NYSE: VGR) and served in various executive capacities at VGR and its subsidiaries. Prior to VGR, Mr. Ressler was with Drexel Burnham Lambert, Inc., where he focused on merger and acquisition transactions and the financing needs of middle-market companies. Mr. Ressler began his career in 1983 with Cravath, Swaine and Moore LLP, working on public offerings, private placements, and merger and acquisition transactions. Mr. Ressler holds a B.A. from Brown University, and J.D. and M.B.A. degrees from Columbia University. Mr. Ressler has in-depthin depth knowledge of CIM Urban’s business and operations and has extensive experience with, and knowledge of, business management and finance as a result of his experience with CIM, including as Co-Founder thereof.13
thereof.
AviAvraham Shemesh has served as a director of the Company since March 2014. Mr. Shemesh is a Co-Founder, Principal and a PrincipalPresident of CIM Group, L.P., has been anCIM’s Real Asset Management division with more than 30 years of active real estate, investor for over 25 years.infrastructure and lending experience. Since co-founding CIM Group, L.P. in 1994, Mr. Shemesh has been instrumental in building CIM Group, L.P.’s real estate, infrastructure and infrastructure platforms. As a Principal and Head of CIM Group, L.P.’s Investments Group, he is actively involved in the investment process and provides guidance on the diverse investment ideas across CIM Group, L.P.’s investmentdebt platforms. He serves on CIM Group, L.P.’s Investment, Allocation, Real Assets Management and Valuation Committees as well as the Investment Committee – Credit Subcommittee (“ICCS”), providing guidance on the diverse opportunities available across CIM’s various platforms and Asset Management Committee. Additionally,acts in various senior capacities within CIM Mr. Shemesh is responsible for the day-to-day operationsCIM’s long-time relationships with strategic institutions and oversees teams essential to acquisitions, portfolio management and internal and external communication. He serves as an officer of various affiliates of CIM. In addition, Mr. Shemesh has served as a director of CMFT since March 2019. He served as a director of CIM Group, L.P., including strategic initiatives, property managementIncome NAV from January 2019 to December 2021. He also served as the Chief Executive Officer and leasingPresident and investor relations.as a director of CCIT II from February 2018, and as Chairman of the board of directors of CCIT II from August 2018 until CCIT II’s merger with GRT in March 2021. Until the mergers of such entities with and into CMFT in December 2020, he served as the Chief Executive Officer and as a director of CCPT V beginning in March 2018, as Chairman of the board of directors of CCPT V beginning in August 2018, and as a director of CCIT III beginning in January 2019. Prior to CIM Group, L.P., Mr. Shemesh was involved in a number of successful entrepreneurial real estate activities, including co-founding Dekel Development, which developed a developer of a wide variety of commercial and residentialmultifamily properties in Los Angeles. Mr. Shemesh has in-depthin depth knowledge of CIM Urban’s business and operations and has significant experience with the real estate investmentoperating process and strategic planning as a result of his experience with CIM Group, L.P., including as Co-Founder thereof.
Elaine Wong has served as a director of the Company since May 2022. Ms. Wong was a Principal at CIM Group, L.P. and served as its Head of Marketing & Communications from May 2018 until her retirement from CIM at the end of June 2021. Ms. Wong was a member of CIM’s Investment Committee from February 2015 to June 2021. From February 2015 to April 2018, Ms. Wong served as CIM’s Global Head of Partner & Co-Investor Relations. She served at CIM from February 2012 to January 2015 as 1st Vice President, Global Head of Fundraising and Investor Relations, from February 2010 to January 2012 as
Vice President, Fundraising & Investor Relations, and from April 2007 to January 2010 as Associate, Investor Relations. She was also a director of CMFT from October 2019 to December 2021, a director of CIM Income NAV from October 2019 until its merger with CMFT in December 2021, a director of CCPT V from October 2019 until its merger with CMFT in December 2020 and a director of CCIT II from October 2019 until its merger with GRT in March 2021. Prior to joining CIM, Ms. Wong served from May 2005 to March 2007 as an Associate at Perry Capital, LLC, and from July 2001 to April 2005 as an Analyst, and then Associate in the Equities Division, Financial and Strategic Management, of Goldman Sachs & Co. Ms. Wong received a Bachelor of Science degree in Accounting and Finance from New York University, Leonard N. Stern School of Business. Ms. Wong was selected to serve as a director because of her financial background and experience and expertise in investor relations, marketing and communications strategy, and fundraising, all of which are expected to bring valuable insight to the Board.
Board Diversity Matrix
| | | | | | | | |
| Board Diversity Matrix (As of June 21, 2023) |
| Total Number of Directors | 7 |
| Part I: Gender Identity | | |
| Female | Male |
| Directors | 2 | 5 |
| Part II: Demographic Background | | |
| White | 1 | 4 |
| Asian (other than South Asian) | 1 | |
| African American | | 1 |
Director Compensation
The Company uses a combination of cash and share based compensation to attract and retain qualified candidates to serve on the Board. In setting compensation for the Company’s independent directors of the Board, the Compensation Committee considers, among other things, the substantial time commitment on the part of the directors in fulfilling their duties as well as the skill level it requires of directors. In addition, all directors of the Board are reimbursed by the Company for their expenses related to attending meetings of the Board and its committees.
The cash component of each independent director’s compensation is set forth according to the following schedule:
| | | | | | | | |
| Annual board retainer | | $ 55,000 |
| Annual audit committee chair retainer | | $ 20,000 |
The annual board retainer and the annual audit committee chairman retainer are payable quarterly in advance. No separate retainer is paid for an independent director’s serving as chair of the Compensation Committee or the Nominating and Corporate Governance Committee.
The compensation arrangement for each independent director in 2023 is expected to be substantially the same as the annualized compensation arrangement for the independent directors in 2022, which is set forth in the table below:
Director Compensation in 2022
| | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash | | Share
Awards (1) | | Total |
| Douglas Bech | | $ | 55,000 | | $ | 54,997 | | $ | 109,997 |
John Hope Bryant(2) | | $ | 12,055 | | $ | — | | $ | 12,055 |
Frank Golay, Jr. (3) | | $ | 27,500 | | $ | — | | $ | 27,500 |
Kelly Eppich (4) | | $ | 56,250 | | $ | 54,997 | | $ | 111,247 |
| Marcie Edwards | | $ | 55,000 | | $ | 54,997 | | $ | 109,997 |
Elaine Wong(5) | | $ | 53,925 | | $ | 54,997 | | $ | 108,922 |
___________________
(1)Represents the grant date fair value of the restricted shares or share options, as the case may be, for purposes of ASC Topic 718, Compensation—Stock Compensation. Each of Mr. Bech, Mr. Eppich, Ms. Edwards and Ms. Wong received a grant of 7,746 restricted shares of Common Stock on June 30, 2022. The grant date fair value of the restricted shares is based on the per share closing price of our Common Stock on June 30, 2022, which was $7.10.
(2)Mr. Bryant joined the Board on November 22, 2022. Mr. Bryant did not receive any restricted shares at the time of his appointment to the Board. Instead, as compensation for his service as a director for the remainder of the 2022-2023 term, Mr. Bryant has been receiving in cash a pro-rata portion of the annual retainer valued at $110,000 based on the total compensation provided by the Company to its independent directors for such term.
(3)Mr. Golay retired from the Board on May 2, 2022.
(4)Mr. Eppich passed away on July 4, 2022.
(5)Ms. Wong joined the Board on May 2, 2022. As compensation for her service as a director on the Board for the remainder of the 2021-2022 term, Ms. Wong received in cash a pro-rata portion of the annual retainer valued at $110,000 based on the total compensation provided by the Company to its independent directors for such term. In August 2022, the Board appointed Ms. Wong as Acting Chair of the Audit Committee; in December 2022, the Board appointed Ms. Wong as Chair of the Audit Committee.
Messrs. Kuba, Ressler and Shemesh did not receive any compensation (other than the reimbursement of expenses related to attending meetings of the Board and its committees) for their service as directors in the year ended December 31, 2022.
Set forth below are the names of the persons who are our executive officers as of the date
of this proxy statement,hereof, their ages and their positions with the Company.
Each executive officer will serve until his successor is duly appointed, or until his earlier death, resignation or removal from office.Name
|
| Age
|
| Position
| | | | | | | | | | |
Charles E. Garner II
Name | | 53
Age | | Position |
| David Thompson | | 59 | | Chief Executive Officer |
Jan F. Salit
Barry N. Berlin | | 65
63 | | President and Secretary
|
David Thompson
| | 52
| | Chief Financial Officer and Secretary; Executive Vice President and Treasurer |
Charles E. Garner II
David Thompson has been Chief Executive Officer of the Company since August 20, 2014.March 2019. Mr. Garner servesThompson served as a Principal, Investments of CIM Group, L.P. As a Principal, Investments, he is involved in the investment and asset management process across CIM Group, L.P.’s platforms, and serves on CIM Group, L.P.’s Investment and Asset Management Committees. Prior to joining CIM Group, L.P., Mr. Garner worked closely with CIM Group, L.P. in various capacities since 1996, including originating Federal Realty Investment Trust’s partnership with CIM Group, L.P. and managing that relationship for Federal Realty Investment Trust. Mr. Garner has been involved in billions of dollars of real estate transactions including the acquisition, joint venture investment, disposition and equity and debt financing of more than 100 properties. He began his career as a C.P.A. in the Washington, D.C. office of PricewaterhouseCoopers and has held various transactional positions with Federal Realty, Walker & Dunlop and The Stout & Teague Companies. Mr. Garner received a B.S. degree in Management with a concentration in Accounting from Tulane University’s A.B. Freeman School of Business.Jan F. Salit has been President and Secretary of the Company since March 2014. Mr. Salit was Chief Executive Officer, Chairman of the Board and Secretary of PMC Commercial Trust from October 2012 to March 2014, Treasurer of PMC Commercial Trust from October 2008 to March 2014, Chief Operating Officer of PMC Commercial Trust from October 2008 to October 2012, Executive Vice President of PMC Commercial Trust from June 1993 to October 2012, and Chief Investment Officer and Assistant Secretary of PMC Commercial Trust from January 1994 to October 2012. He was also Executive Vice President of PMC Capital, Inc. (an affiliate of PMC Commercial Trust that merged into PMC Commercial Trust in February 2004) from May 1993 to February 2004 and Chief Investment Officer and Assistant Secretary of PMC Capital, Inc. from March 1994 to February 2004. From 1979 to 1992, Mr. Salit was employed by Glenfed Financial Corporation and its predecessor company Armco Financial Corporation, a commercial finance company, holding various positions, including Executive Vice President and Chief Financial Officer. Mr. Salit began his career in the Investment Department of Mutual Benefit Life from 1972 to 1979. In addition, he was an adjunct professor at Montclair State University and Fairleigh Dickenson University from 1976 to 1979. Mr. Salit received his B.A. degree from Michigan State University and his MBA degree from New York University.
David Thompson has been Chief Financial Officer of the Company sincefrom March 2014.2014 to March 2019. Mr. Thompson is also a Principal, Chief Financial Officer of CIM Group, L.P. and serves on CIM Group, L.P.’s Investment, Committee.Valuation Committee and the ICCS. He joined CIM Group, L.P. in 2009. In addition, Mr. Thompson has served as the Chief Executive Officer and Trustee of CIM Real Assets & Credit Fund, a closed-ended interval fund that seeks to invest in a mix of institutional-quality real estate and credit assets, since February 2019. Prior to joining CIM Group, L.P. in 2009, Mr. Thompson spent fifteen15 years with Hilton Hotels Corporation, most recently as Senior Vice President and Controller, where he was responsible for worldwide financial reporting, financial planning and analysis, internal control and technical accounting compliance. Mr. Thompson’s experience includes billions of dollars of real estate acquisitions and dispositions in the office, retail, multifamily, hotel, gaming and timeshare sectors, as well as significant capital markets experience. HeMr. Thompson began his career as a C.P.A. in the Los Angeles office of Arthur Andersen & Co. Mr. Thompson received a B.S. degree in Accounting from the University of Southern California.
14
Barry N. Berlin has been Chief Financial Officer and Secretary of the Company since August 2022. Mr. Berlin has been the Executive Vice President and Treasurer of the Company since October 2008 and was Chief Financial Officer of the Company’s predecessor from June 1993 to March 2014. He has been Chief Financial Officer of the Company’s wholly-owned subsidiary lending business since 1992 and has been the Chief Executive Officer and Chairman of the Board of Directors of that business since 2020. In addition, Mr. Berlin has served in various finance and accounting roles within CIM Group and its affiliates since 2017 and is currently a Managing Director of CIM Group, Chief Financial Officer of CIM Real Assets & Credit Fund, a closed-ended interval fund advised by an affiliate of CIM Group that is registered as an investment company under the Investment Company Act of 1940, as amended, Chief Financial Officer of CIM Capital, LLC, the Company’s operator and an investment adviser registered with the Securities and Exchange Commission. Mr. Berlin earned a Bachelor of Science degree in Accounting from the University of Florida and is a certified public accountant. Mr. Berlin began his career in public accounting.
The information contained in this Report of the Audit Committee shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the
Securities Exchange Act
of 1934, as amended (the “Exchange Act”), whether made before or after the date hereof and irrespective of any general incorporation language in any such filing (except to the extent that we specifically incorporate this information by reference) and shall not otherwise be deemed “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act (except to the extent that we specifically incorporate this information by reference).
The Audit Committee
(the “Audit Committee”) of the Board of Directors (the “Board”) of Creative Media & Community Trust Corporation, a Maryland corporation (the “Company”), operates under a written charter adopted by the Board. The Audit Committee reviews and assesses the adequacy of its charter on an annual basis. The Audit Committee charter is available on the corporate governance section of the Company’s website at
http:https://
investors.cimcommercial.com/.shareholders.creativemediacommunity.com/corporate-overview/corporate-governance in the section entitled “Committee Charters.”
During
2015,2022, the Audit Committee, either through separate private sessions or during its regularly scheduled meetings with the independent registered public accounting firm and the director of internal audit, had candid discussions regarding financial management, legal, accounting, auditing and internal control issues.
The Audit Committee has been provided with updates on management’s process to assess the adequacy of the Company’s system of internal control over financial reporting, the framework used to make the assessment and management’s conclusions on the effectiveness of the Company’s internal control over financial reporting. The updates include discussions with the independent registered public accounting firm about the Company’s internal control assessment process and the independent registered public accounting firm’s evaluation of the Company’s system of internal control over financial reporting.
The Audit Committee reviewed with executive management and the director of internal audit the Company’s policies and procedures with respect to risk assessment and risk management.
The Audit Committee recommended to the Board the engagement of
BDODeloitte & Touche, LLP as the independent registered public accounting firm for the year ended December 31,
2015,2022, and reviewed (with senior members of the Company’s financial management team and the independent registered public accounting firm) the overall audit scope and plans, the results of internal and external audit examinations, evaluations by management and the independent registered public accounting firm of the Company’s internal controls over financial reporting and the quality of the Company’s financial reporting. The Audit Committee has the sole authority to appoint the independent registered public accounting firm.
The Audit Committee has reviewed and discussed the audited financial statements included in
ourthe Company’s Annual Report on Form
10-K10‑K with management including a discussion of the accounting principles, the reasonableness of significant accounting judgments and estimates, and the clarity of disclosures in the financial statements.
The Audit Committee also discussed with the independent registered public accounting firm, who is engaged to audit and report on the consolidated financial statements of the Company and subsidiaries and the effectiveness of the Company’s internal control over financial reporting, those matters required to be discussed by the auditors with the Audit Committee
in accordance withby the applicable requirements of the Public Company Accounting Oversight Board
(PCAOB) Auditing Standard No. 16, Communication with Audit Committees, as currently in effect.(the “PCAOB”) and the SEC. The Audit Committee has received the written disclosures and the letter from the independent accountant required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with the independent accountant the independent accountant’s independence for
2015.2022.
In performing all of these functions, the Audit Committee acts in an oversight capacity. The Audit Committee reviews the Company’s quarterly and annual reports on Form
10-Q10‑Q and Form
10-K10‑K prior to filing with the SEC. In its oversight role, the Audit Committee relies on the work and assurances of the Company’s management, which has the primary responsibility for establishing and maintaining adequate internal control over financial reporting and for preparing the financial statements, and other reports.
In reliance on these reviews and discussions, and the reports of the independent registered public accounting firm, the Audit Committee has recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form
10-K10‑K for the year ended December 31,
2015,2022, for filing with the SEC.
This report is submitted by the following members of the Audit Committee:
Robert Cresci
Douglas Bech
Frank Golay, Jr.
15
Marcie Edwards
EXECUTIVE COMPENSATION
Compensation Committee
The Board is not required to have (and does not have) a compensation committee, based on its status as a “controlled company,” but may decide to have such committees (or other committees) in the future.
Compensation Discussion and Analysis
This Compensation Discussion and Analysis relates to compensation paid to the Company’s named executive officers during fiscal year
2015.20152022.
2022 Named Executive Officers
The following individuals were our named executive officers
for 2015:during 2022:Name
|
| Title
| | | | | | |
Charles E. Garner II
Name | | Position |
| David Thompson | | Chief Executive Officer |
Jan F. Salit
Barry N. Berlin* | | President and Secretary
|
David Thompson
| | Chief Financial Officer and Secretary; Executive Vice President and Treasurer |
| Nathan D. DeBacker* | | Chief Financial Officer and Secretary |
___________________
* Mr. DeBacker stepped down as Chief Financial Officer and Secretary of the Company on August 10, 2022. On the same day, Mr. Berlin was appointed Chief Financial Officer and Secretary of the Company.
The Company is externally managedoperated by the Advisor,Operator, an affiliate of CIM REIT and CIM Group, L.P. In addition, the Manager,CIM Service Provider, LLC (the “Administrator”), a subsidiary of CIM Group, provides certain management and administrative services to the Company and its subsidiaries. Mr. GarnerThompson, Chief Executive Officer, and Mr. ThompsonDeBacker, former Chief Financial Officer and Secretary, are employed by an affiliate of the AdvisorOperator and the ManagerAdministrator and their compensation is determined by, and paid to them directly by, such affiliate. The Company did not pay Mr. Garner, our Chief Executive Officer, andThompson or Mr. Thompson, our Chief Financial Officer,DeBacker any compensation in 2015.2022. Therefore, their compensation is not discussed in this Compensation Discussion and Analysis.
While Mr.
Salit wasBerlin has an employment agreement with the Company as described below under“—Potential Payments Upon Termination or Change in Control,” Mr. Berlin has been jointly employed by the Company and
CIM SBA Staffing, LLC (“CIM SBA”)an affiliate of the Operator and the Administrator. Mr. Berlin became the Chief Financial Officer and Secretary of the Company in August 2022. In addition, during
2022, Mr. Berlin was the
fiscal year ended December 31, 2015; as discussed in “Related Person Transactions—Transaction with Related Persons,” his cashExecutive Vice President and Treasurer of the Company, Chief Financial Officer of the Company’s wholly-owned subsidiary lending business and Chief Executive Officer and Chairman of the Board of Directors of that business. In 2022, Mr. Berlin’s compensation was paid by
CIM SBA, which in turnan affiliate of the Operator and the Administrator. Such affiliate was
then reimbursed by the Company.
Accordingly, his 2015 compensation is described in this Compensation Discussion and Analysis and accompanying tables.RoleIn 2022, the amount of Board in Setting Compensation Following the Merger
Following the Merger, the Board determined not to establish a separate compensation committee, but rather determined that the full Board would assume the responsibilities that were historically carried out by the Compensation Committee priorreimbursement was based on Mr. Berlin’s time spent (i) working on matters pertaining to the Merger.
lending business of the Company and (ii) in his role as Executive Vice President and Treasurer of the Company from January 1, 2022 to August 10, 2022 (when Mr. Berlin assumed the additional role of Chief Financial Officer and Secretary). In 2022, such affiliate did not seek reimbursement from the Company for the time that Mr. Berlin spent in his role as Chief Financial Officer of the Company.
Role of Management
in the Compensation-Setting ProcessThe Chairman of the Board discussed historical compensation practices and the Company’s annual incentive compensation history with Mr. Salit. The Chairman considered Mr. Salit’s input and made recommendations to the Board with respect to the amounts of Mr. Salit’s 2015 annual incentive compensation and restricted stock award and the Board madein the final determinationCompensation Setting Process
Management of
those amounts.the Company and the Board had no role in setting the compensation of Mr. Berlin.
Stockholder Advisory Vote
Because stockholders expressed support for
Mr. Berlin became Chief Financial Officer and Secretary of the Company in August 2022. There was no vote on the Company’s executive compensation
programs in
2015 by approving2021 because the
Company’s most recent stockholder advisory vote on executive compensation and because Mr. Salit’s terms of employment are governed by the terms of his existing employment agreement, the BoardCompany did not
makepay compensation to any
changes to the Company’sof its named executive
compensation programs in 2015.officers for 2021.
Compensation Policies and Practices
Inin Relation to Risk Management
As of December 31,
2015,2022, the Company had
ten employees, one of whom, Mr. Salit, is jointly employed by the Company and CIM SBA and whose terms of employment are governed by the terms of his existing employment agreement with the Company. The other employees consisted of one officer and eight property-level staff.five employees. Accordingly, the
BoardCompensation Committee does not believe that the Company’s compensation policies and practices are reasonably likely to have a material adverse effect on the Company.
16
Use of Independent Compensation Consultant
The
BoardCompensation Committee did not engage the services of an independent compensation consultant in
2015 when determining the amount of the 2015 annual incentive compensation and restricted stock award for Mr. Salit.2022.
Determining
20152022 Executive Compensation
As described above, Messrs.
GarnerThompson and
ThompsonDeBacker are employed and paid by an affiliate of the
AdvisorOperator and the
ManagerAdministrator and, therefore, their
20152022 compensation is not discussed
herein. In 2022, as described above under “—2022 Name Executive Officers,” Mr. Berlin’s compensation that was attributable to the time that he spent in
this proxy statement. The Board determinedhis role as Chief Financial Officer of the
amountsCompany was not borne by the Company but by an affiliate of
Mr. Salit’s 2015 annual incentive compensationthe Operator and
restricted stock awards.2015 Base Salary
Thethe Administrator. Accordingly, the Board did not make any adjustments toplay a role in determining Mr. Salit’s base salary of $450,000 for 2015.
2015Berlin’s compensation.
2022 Base Salary and Annual Cash Incentive
The annual cash incentive paid
Mr. Berlin’s compensation that was attributable to
Mr. Salit was discretionary andthe time that he spent in his role as Chief Financial Officer of the Company was not
determined based on pre-established performance goals,borne by the Company but
rather was based on the Board’s assessment in December of each fiscal yearby an affiliate of the
Company’sOperator and
Mr. Salit’s performance. In December 2015,the Administrator as described above under “—2022 Name Executive Officers.” Accordingly, the Board
determined the amount of the annual cash incentive fordid not play a role in determining Mr.
Salit taking into account a number of factors, including the Company’s performance, the performance of the lending division and Mr. Salit’s performance and efforts in connection with the sale of part of the lending division. The Board determined that the total amount of 2015 annual cash incentives to be earned by Mr. Salit would be equal to the sum of the annual cash incentive earned in 2014 and a special bonus equal to $800,000 in connection with Mr. Salit’s work on the sale of substantially all of our commercial mortgage loans. Accordingly, for 2015, the Board approved an annual cash bonus of $950,000 for Mr. Salit.Long-term Equity Incentives
In March 2015, the Board determined to grant an equity award to Mr. Salit in the form of 1,000 restricted shares under the 2005 Equity Incentive Plan with one-third of such shares of common stock vesting immediately upon issuance and one-third vesting on the anniversary of the grant date for the next two years. In determining the number of restricted shares to be granted to Mr. Salit, the Board was primarily influenced by the desire to align the interests of Mr. Salit with the interests of our stockholders. The Board established a two-year vesting period for the restricted shares because it believed that the restricted shares provide an incentive for Mr. Salit to maximize the Company’s financial performance over that period.
Berlin’s compensation.
Severance and Change in Control Agreements
Mr.
Salit’sBerlin’s employment agreement with the Company
providesprovided for a severance payment as specified therein.
The employment agreement is discussed in greater detail below in the section entitled “Executive Compensation—Potential Payments Upon Termination or Change in Control.”Other Compensation Plans
The Company maintained a profit sharing plan that included a defined contribution component and a discretionary profit sharing component (the “401(k) and Profit Sharing Plan”) that was intended to satisfy the tax qualification requirements of Section 401(a) of the Internal Revenue Code. This plan was transferred to CIM SBA effective January 1, 2015. CIM SBA’s full time employees, including Mr. Salit, were eligible to participate in the 401(k) and Profit Sharing Plan and were permitted to contribute a portion of their eligible compensation (subject to the applicable statutory limits of $18,000, or $24,000 for eligible participants who are 50 or older, in calendar year 2015). While CIM SBA may (but is not required to) make “matching contributions” under the 401(k) and Profit Sharing Plan, none were made during fiscal 2015. In lieu of matching contributions, CIM SBA elected to make a discretionary profit sharing contribution of $260,000, in the aggregate, during the year ended December 2015 and was reimbursed by the Company for such contribution. The Company elected to make a discretionary profit sharing contribution of $256,000, in the aggregate, during the plan year ended December 2014, and $235,000, in the aggregate, during the plan year ended December 31, 2013. Profit sharing contributions to the 401(k) and Profit Sharing Plan are available to all full-time employees of CIM SBA who meet the eligibility requirements of the plan. In general, vesting in the Profit Sharing Plan occurs ratably between the second and sixth year of employment.
17
Internal Revenue Code Section 162(m)
places a limit of $1,000,000 ongenerally limits the
amountdeductibility of compensation
that the Company may deduct for federal income tax purposespaid to certain executive officers in excess of $1,000,000 in any one
year with respect to the Company’s Chief Executive Officer, and the next three highest paid executives (other than the Chief Financial Officer). However, performance-based compensation that meets certain requirements is excluded from the $1,000,000 limitation. In 2015, the Boardyear. The Compensation Committee was aware of
this tax law,the impact of Internal Revenue Code Section 162(m), but
believed that our named executive
officerofficers did not receive compensation
at or nearfrom the Company in excess of the $1,000,000
maximum (as determined underlimit. The Compensation Committee will continue to consider the
Internal Revenue Code). Thetax consequences when determining named executive officer compensation. As in the past, the Board,
plans to keep this provision in mind for future compensation decisions, and plans to take measures to preserveupon the
deductibilityrecommendation of
compensation payments and benefits to the
extent reasonably practicable and to the extent consistent with its other compensation objectives. However, the BoardCompensation Committee, reserves the right to make compensation payments that are nondeductible.
Anti-Pledging/ Anti-Hedging
Hedging and Pledging Restrictions
The Company believes it is inappropriate for any director, officer or employee of the Company to enter into speculative transactions in the Company’s equity securities and, therefore, prohibits all hedging transactions.securities. The Company’s Trading Policy prohibits all such persons, and members of their households or immediate family (spouse and minor children), from engaging in all speculative financial transactions involving securities of the Company, including buying and selling put and call options or engaging in short selling, and hedging transactions with respect to securities of the Company, including purchasing financial instruments or entering into transactions (such as prepaid variable forward contracts, equity swaps, collars and onlyexchange funds) designed to hedge or offset any decrease in the market value of equity securities of the Company. Holding and exercising options or other securities granted under any equity incentive plan of the Company are not prohibited by the Company’s Trading Policy.
Additionally, the Company’s Trading Policy permits pledging of securities of the Company securitiesonly with the approval of thean attorney designated underby the insider trading policyCompany.
Compensation Committee Interlocks and Insider Participation
Our Compensation Committee is comprised of two of our independent directors. Neither of them (1) has at any time served as
the legal representative for purposesan officer or employee of the
policy.Company or (2) has or had any relationship requiring disclosure pursuant to the SEC’s rules regarding related party transactions (i.e., Item 404(a) of Regulation S-K). None of our executive officers has served as a director or member of the Compensation Committee of any entity that has one or more of its executive officers serving as a member of our Board or Compensation Committee.
Compensation Committee Report
The BoardCompensation Committee has furnished the following report. The information contained in this “Compensation Committee Report” is not to be deemed “soliciting material” or “filed” with the SEC, nor is such information to be incorporated by reference into any future filings under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate it by reference into such filings.
The Compensation Committee has reviewed and discussed the
above Compensation Discussion and Analysis with management. Based
upon thaton such review and
discussion,discussions, the
Compensation Committee recommended to our Board
determined that the Compensation Discussion and Analysis be included in this
proxy statement.Board of Directors
Proxy Statement.
COMPENSATION COMMITTEE
Douglas Bech,
Robert Cresci
Kelly Eppich
Frank Golay, Jr.
Shaul Kuba
Richard Ressler
Avi Shemesh
18
Chairman
Elaine Wong
Summary Compensation Table
The table below sets forth information concerning compensation earned for services rendered to the Company byof each of our named executive officers for the years ended December 31, 2015, 20142022 and, 2013,2021, respectively. As described in the Compensation Discussion and Analysis, Messrs. GarnerThompson and ThompsonDeBacker are employed by an affiliate of the AdvisorOperator and the ManagerAdministrator and their compensation is determined by, and paid to them directly by, such affiliate. The Company did not pay Messrs. Garner and Thompson or DeBacker any compensation in 2015. The2022.
Mr. Berlin has been jointly employed by the Company
and an affiliate of the Operator and the Administrator. Mr. Berlin has
entered into an employment agreement with
Mr. Salit,the Company, which
agreement is described below under
“Executive Employment Agreement.“—Potential Payments Upon Termination or Change in Control.”
As describedMr. Berlin became the Chief Financial Officer and Secretary of the Company in
August 2022. Prior to that, Mr. Berlin has been the
Compensation DiscussionExecutive Vice President and
Analysis,Treasurer of the Company since October 2008, Chief Financial Officer of the Company’s wholly-owned subsidiary lending business since 1992 and Chief Executive Officer and Chairman of the Board of Directors of that business since 2020. In 2022, Mr.
Salit’s cashBerlin’s compensation was paid by
CIM SBA in 2015;an affiliate of the Operator and the Administrator. Such affiliate was then reimbursed by the Company. The amount of the reimbursement was based on Mr. Berlin’s time spent working on matters pertaining to the lending business of the Company
then reimbursed CIM SBA forin 2022 and in his role as Executive Vice President and Treasurer of the Company from January 1, 2022 to August 10, 2022 (when Mr. Berlin assumed the additional role of Chief Financial Officer and Secretary) relative to Mr. Berlin’s time spent on matters unrelated to the Company. The amount of such
payment.Name and Principal Position | | Year | | Salary | | Bonus(1) | | Stock
Awards(2)(3) | | Option
Awards | | All Other
Compensation(4) | | Total | |
Charles E. Garner | | 2015 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | |
Chief Executive Officer, effective as of August 20, 2014 | | 2014 | | — | | — | | — | | — | | — | | — | |
David Thompson | | 2015 | | — | | — | | — | | — | | — | | — | |
Chief Financial Officer, effective as of March 11, 2014 | | 2014 | | — | | — | | — | | — | | — | | — | |
Jan F. Salit | | 2015 | | 450,000 | | 950,000 | | 16,980 | | — | | 54,085 | | 1,471,065 | |
President and Secretary | | 2014 | | 450,000 | | 150,000 | | 22,540 | | — | | 53,286 | | 675,826 | |
2013 | | 425,000 | | 150,000 | | 24,064 | | — | | 51,662 | | 650,726 | |
| | | | | | | | | | | | | | | | | | | | | |
(1) As describedreimbursement is provided in the table below. In 2022, such affiliate did not seek reimbursement from the Company for the time that Mr. Berlin spent in his role as Chief Financial Officer of the Company.
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| Name and Principal Position | | Year | | Salary | | Bonus | | Stock Awards | | All Other Compensation(2),(3) | | Total |
| David Thompson | | 2022 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| Chief Executive Officer | | 2021 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
| Barry N. Berlin | | | | | | | | | | | | |
Chief Financial Officer and Secretary; Executive Vice President and Treasurer(1),(3) | | 2022 | | $ | 91,876 | | $ | 55,781 | | $ | — | | $ | 3,507 | | $ | 151,164 |
| Nathan D. DeBacker | | 2022 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
Chief Financial Officer and Secretary(1) | | 2021 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — |
___________________
(1) Mr. DeBacker stepped down as Chief Financial Officer and Secretary of the Company on August 10, 2022. On the same day, Mr. Berlin was appointed Chief Financial Officer and Secretary of the Company. Please see the disclosure under the first paragraph of “—Summary Compensation
Discussion and Analysis,Table” regarding the
Board granted Mr. Salit’s annual cash incentives on a discretionary basis and Mr. Salit’s 2015 annual incentive included a special bonus equal to $800,000 in connectioninformation provided with
his work on the sale of substantially all of our commercial mortgage loans.(2) As described in the Compensation Discussion and Analysis, the Board granted restricted stock awardsrespect to Mr. Salit on a discretionary basis. The terms of the share awards provide for dividends on non-vested restricted shares to be paid to the holder.
(3) Represents the grant date fair value of stock awards for the applicable fiscal year in accordance with Accounting Standards Codification (“ASC”) Topic 718, Compensation—Stock Compensation.Berlin’s position.
(2) See
the “Grants of Plan-Based Awards in 2015”explanation immediately preceding this table for information
on awards madepertaining to Mr. Berlin’s compensation for his services performed for the Company and its subsidiaries as disclosed in
2015. These amounts do not correspond to the
actual value that will be recognized as compensation by the named executive officers.(4)table.
(3) See table below for a breakdown of all other compensation. The Company has determined that the amounts of perquisites and
All other
personal benefitscompensation paid to
each of the
Company’s named executive officers
does not exceed $10,000.All other compensationin the table above consisted of the following during 2015:following:
Name | | Unused
Vacation
Pay | | Tax Qualified
401(k)
Plan | | Car
Allowance | | Other | | Total | |
Jan F. Salit | | $ | 21,635 | | $ | 25,850 | | $ | 6,600 | | $ | — | | $ | 54,085 | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Year | | Unused Vacation Pay | | Tax Qualified 401(k) Plan | | Automobile Allowance | | Other | | Total |
| Barry N. Berlin | | 2022 | | $ | — | | $ | 1,773 | (1) | $ | 1,734 | | $ | — | (2) | $ | 3,507 |
Grants of
Plan-BasedPlan Based Awards
in 2015The following table provides information concerning each grant
There were no grants of
restricted shares madeequity awards to our named executive officers
pursuant to our 2005 Equity Incentive Plan during
2015.Name | | Grant Date | | All Other
Stock Awards:
Number of
Shares or
Units (1) | | All Other
Option Awards:
Number of
Securities
Underlying
Options | | Exercise or
Base Price
of Option
Awards
($/SH) | | Grant Date
Fair Value of
Stock and
Option
Awards (2) | |
Jan F. Salit | | March 6, 2015 | | 1,000 | | — | | $ | — | | $ | 16.98 | |
| | | | | | | | | | | | | |
(1) Represents a grant of restricted stock to Mr. Salit in the amount specified. The terms of these restricted share awards are described below in the section entitled “Equity Incentive Plan Compensation.”
(2) Represents the grant date fair value of the restricted shares or share options, as the case may be, for purposes of ASC Topic 718, Compensation—Stock Compensation. The grant date fair value of the restricted shares is based on the per share closing price of our Common Stock on March 5, 2015, which was $16.98.
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Equity Incentive Plan Compensation
The restricted share awards made to Mr. Salit on March 6, 2015 were granted under our 2005 Equity Incentive Plan. Under the terms of the restricted share awards, 1,000 restricted awards, as detailed in Grants of Plan-Based Awards in 2015 table, were granted to Mr. Salit on March 6, 2015. One-third of the restricted shares were vested on the date of grant, with one-third of the restricted shares scheduled to vest on March 6, 2016 and the remaining one-third of the restricted shares scheduled to vest on March 6, 2017, provided the recipient continues his employment with us through the applicable vesting dates. Our 2005 Equity Incentive Plan provides for the accelerated vesting of equity awards such as the restricted share awards in the event of (1) the dissolution or liquidation of the Company, (2) a sale of the Company’s assets, (3) a merger, consolidation or reorganization where the outstanding shares are converted into or exchanged for a different kind of securities of the successor entity and the holders of the Company’s outstanding voting power immediately prior to such transaction do not own a majority of the outstanding voting power of the successor entity immediately upon completion of such transaction, or (4) the sale of all the Company’s shares to an unrelated party. Dividends are payable on the restricted shares at the same rate and at the same time that dividends are paid to our stockholders.
Outstanding Equity Awards at Fiscal Year End
The following table provides information on the
There were no outstanding
share option and restricted shareequity awards
held by our named executive officers as of December 31,
2015. | | Option Awards | | Share Awards | |
Name | | Number of
Securities
Underlying
Unexercised
Options
Exercisable | | Option
Exercise
Price | | Option
Expiration
Date | | Number of
Shares or
Units of
Stock
That Have
Not Vested | | Market Value
of Shares
or Units of
Stock
That Have
Not Vested(2) | |
Jan F. Salit | | — | | — | | — | | 1,001 | (1) | $ | 15,556 | |
| | | | | | | | | | | | |
(1) Represents 667 awards and 334 awards of restricted shares made to Mr. Salit on March 6, 2015 and May 6, 2014, respectively, which will vest as described above in the section entitled “Equity Incentive Plan Compensation.”
(2) Based on the per share closing market price of $15.54 of our Common Stock on December 31, 2015.
Option Exercises and SharesStock Vested in 2015
The following table sets forth, for each of our named executive officers, information regarding the value of2022
There were no restricted share awards that vested during the fiscal year ended December 31,
2015. | | Share Awards | |
Name | | Number of Shares
Acquired on
Vesting (1) | | Value
Realized on
Vesting (2) | |
Jan F. Salit | | 666 | | $ | 12,121 | |
| | | | | | |
(1) Based on the following awards: (a) 333 restricted shares granted on May 6, 2014, which vested on May 6, 2015 and (b) 333 restricted shares granted on March 6, 2015, which vested immediately. The per share market price of the restricted shares was $16.98 on March 5, 2015 and $19.42 on May 6, 2015.
(2) Calculated as the aggregate market value on the date of vesting of the restricted stock with respect to which restrictions lapsed (or restricted shares became vested) during 2015 (calculated before payment of any applicable withholding or other income taxes).
Pension Benefits
We do not sponsor or maintain any plans that provide for specified retirement payments or benefits, such as tax-qualified defined benefit plans or supplemental executive retirement plans, for our named executive officers.
20
Non-qualified Deferred Compensation
We do not have any non-qualified deferred compensation plans or arrangements in which our named executive officers participate.
Potential Payments Upon Termination or Change in Control
Executive Employment Agreement
Mr.
SalitBerlin is party to an executive employment agreement (an “Executive Employment Agreement”) with the Company, which
amended and restated his previous employment agreement and became effective upon the consummation of
a merger between the
MergerCompany’s predecessor and a fund managed by an affiliate of the Operator and the Administrator on March 11, 2014.
The Executive Employment Agreement continues to govern the terms of employment for Mr. Salit following the Merger. Under the Executive Employment Agreement, Mr.
SalitBerlin is entitled to a minimum annual salary of
$425,000. The Company’s Board may, in its discretion, increase$350,000 (provided that, as discussed above under “—Summary Compensation Table,” Mr. Berlin’s compensation was paid by an affiliate of the
annual base salaryOperator and
may also consider bonus compensation.the Administrator). The Executive Employment Agreement also entitles Mr.
SalitBerlin to health insurance coverage for himself, his wife and his dependent children, and a monthly automobile allowance of $550.
Under the Executive Employment Agreement, if (1) Mr. Salit voluntarily resigned his employment no earlier than 12 months following the effective date of the agreement but no later than December 31, 2015 or (2) the Company terminated the executive’s employment without cause on or before December 31, 2015, Mr. Salit would have been entitled to receive compensation equal to 2.99 times the average of the last three years’ compensation calculated as of the termination date, based on the calculation methodology set forth in the Executive Employment Agreement, which refers to the calculation methodology set forth in the Company’s definitive proxy statement for its 2013 annual meeting and provides that the amount of any annual equity awards included in such calculation would be capped at $25,000 per annum.
If Mr.
SalitBerlin is unable to perform his services due to illness or total incapacity (to be determined based on standards similar to those utilized by the U.S. Social Security Administration),
he shallthe Executive Employment Agreement entitles Mr. Berlin to receive his full salary for up to one year of such incapacity, reduced by any amounts paid by any Company-provided insurance. If
the executive’sMr. Berlin’s total incapacity continues beyond one year and he is not thereafter able to devote full time to his employment with the Company, then his employment and his Executive Employment Agreement will terminate.
If Mr.
SalitBerlin dies during his employment with the Company before reaching the age of seventy, his estate will be entitled to a payment of two times his annual salary plus unused vacation pay. The Company-paid amount of such death benefits will be made over the course of twelve months, offset by any amounts paid under any group life insurance issued by the Company.
On January 4, 2016, Mr. Salit received a grant of 43,734 shares of common stock of the Company and the Company paid approximately $253,000 in payroll taxes on Mr. Salit’s behalf pursuant to the terms of the Executive Employment Agreement. Such share grants were vested upon grant in accordance with the terms of the Executive Employment Agreements.
In the event that Mr.
Salit’sBerlin’s employment is terminated by the Company for Cause
(as defined below), or if Mr.
SalitBerlin resigns his employment with the Company, he will be entitled to receive only his base salary then in effect, prorated to the date of termination, and all benefits accrued through the date of termination. If the Company terminates Mr.
Salit’sBerlin’s employment without Cause, Mr.
SalitBerlin will be entitled to receive a severance payment in an amount equal to his annual base salary then in effect, to be paid out in a lump sum on the 60th day following his termination date, conditioned upon the execution of a general release of claims.
For purposes of the Executive Employment Agreement, “Cause” means (1) the intentional, unapproved material misuse of corporate funds, (2) professional incompetence or (3) acts or omissions constituting gross negligence or willful misconduct of executive’s obligations or otherwise relating to the business of the Company.
Assuming all vacation days are taken and all reasonable business expenses have been reimbursed, based on the Company’s best estimate, assuming the applicable scenario occurred on December 31, 2015,2022, the Company would have owed Mr. Salit $900,000 if he diedBerlin $700,000 (representing two times his annual base salary), $450,000 if he died or $350,000 (representing his annual base salary) if he became disabled (representingor if the Company terminated his annual base salary)employment without Cause.
Pay Versus Performance Table
In accordance with the rules adopted by the SEC, pursuant to the Dodd-Frank Act, the following table and related disclosure provide information about (i) the “total compensation” of our principal executive officer (the “PEO”) and our other named executive officers (the “Other NEOs”) as presented in “—Summary Compensation Table” above (the “SCT Amounts”), $1,989,000 if he resigned(ii) the “compensation actually paid” to our PEO and our Other NEOs, as calculated pursuant to the SEC’s pay-versus-performance rules (the “CAP Amounts”) and (iii) certain financial performance measures.
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| Year | | Summary Compensation Table Total for PEO ($)(1) | | Compensation Actually Paid to PEO ($)(1) | | Average Summary Compensation Table Total for Other NEOs ($)(2) | | Average Compensation Actually Paid to Other NEOs ($)(3) | | Value of Initial Fixed $100 Investment Based on Total Stockholder Return: | | Net Income (Loss) ($) in thousands) |
| 2022 | | $ | — | | $ | — | | $ | 151,164 | | $ | 151,164 | | $ | 37 | | $ | 5,945 |
| 2021 | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 53 | | $ | (841) |
___________________
(1)Our PEO for 2022 and 2021 was Mr. Thompson, our current Chief Executive Office. As discussed under “—Summary Compensation Table” above, Mr. Thompson is employed by an affiliate of the Operator and the Administrator and his compensation is determined by, and paid to them directly by, such affiliate. The Company did not pay Mr. Thompson any compensation in 2022 and 2021.
(2)Our Other NEOs for 2022 are Mr. Berlin, our current Chief Financial Officer and Secretary, and Mr. DeBacker, our prior Chief Financial Officer and secretary. Our other NEO for 2021was Mr. DeBacker. As discussed earlier, Mr. DeBacker is employed by an affiliate of the Operator and the Administrator and his compensation is determined by, and paid to them directly by, such affiliate. The Company did not pay Mr. DeBacker any compensation in 2022 and 2021. In 2022, Mr. Berlin’s compensation was paid by an affiliate of the Operator and the Administrator. Such affiliate was then reimbursed by the Company based on Mr. Berlin’s time spent working on matters pertaining to the lending business of the Company during 2022 and in his role as Executive Vice President and Treasurer of the Company from January 1, 2022 to August 10, 2022 (when Mr. Berlin assumed the additional role of Chief Financial Officer and Secretary). The amount of such reimbursement is provided in the table above.
(3)The SCP Amount and the CAP Amounts are the same because Mr. Berlin did not receive any equity awards or was terminated without cause (the productpension benefits as part of his three-year averagecompensation and therefore the adjustments provided by the applicable rules adopted by the SEC do not apply to Mr. Berlin’s compensation.
Description of Relationship Between CAP Amounts and cumulative Total Stockholder Return and Net Income
As Mr. Berlin became Chief Financial Officer and Secretary of the Company in August 2022, and as the Company did not bear the compensation of Mr. Berlin for serving as Chief Financial Offer and Secretary in 2022, the Company believes that any comparison between CAP Amounts and total annual compensation (based onstockholder returns or net income is not meaningful.
RELATED PERSON TRANSACTIONS
Transactions with Related Persons
Asset Management and Other Fees to Related Parties
CIM Urban and CIM Capital, LLC, an affiliate of CIM Group (“CIM Capital”) are parties to an Investment Management Agreement pursuant to which CIM Urban engaged CIM Capital to provide certain services to CIM Urban. CIM Capital has assigned its duties under the calculation methodologyInvestment Management Agreement to its four wholly-owned subsidiaries: CIM Capital Securities Management, LLC, a securities manager, CIM Capital RE Debt Management, LLC, a debt manager, CIM Capital Controlled Company Management, LLC, a controlled company manager, and CIM Capital Real Property Management, LLC, a real property manager. The “Operator” refers to CIM Capital and its four wholly-owned subsidiaries. The Company and its subsidiaries are parties to a Master Services Agreement with the Administrator pursuant to which the Administrator provides or arranges for other service providers to provide management and administration services to the Company and its subsidiaries.
On January 5, 2022, the Company and certain of its subsidiaries entered into a Fee Waiver (the “Fee Waiver”) with the Operator and the Administrator with respect to fees that are payable to them under the Investment Management Agreement and the Master Services Agreement, respectively. The Fee Waiver is effective retroactively to January 1, 2022 (the “Effective Date”). Pursuant to the Fee Waiver, the Administrator agrees to voluntarily waive any fees in excess of those set forth in the Executive Employment Agreement)Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Master Service Agreement, and 2.99),the Operator agrees to voluntarily waive any fees in excess of those set forth in the Fee Waiver, to the extent it would otherwise have been entitled to such additional compensation under the Investment Management Agreement. Following the end of each quarter, the Administrator will deliver to the Company (i) a calculation of the cumulative fees earned by the Operator and $15,556 if there wasthe Administrator under the methodology prescribed by the Fee Waiver from the Effective Date through the end of such quarter and (ii) a changecalculation of the cumulative fees that would have been earned by the Operator and the Administrator during such period under the Master Services Agreement and the Investment Management Agreement without giving effect to the Fee Waiver. If, in control (representingrespect of any quarter, the aggregate fees that are payable under the methodology prescribed by the Fee Waiver exceed the aggregate fees that would have been payable under the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver, such quarter will be deemed an “Excess Quarter.” For any quarter following an Excess Quarter, the Company (upon the direction of the independent members of the Board) may, at its option and upon written notice to the Administrator, elect to calculate all fees due to the Administrator and the Operator in accordance with the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver, from and after such Excess Quarter. Any such election by the Company will be irrevocable, and all fees due to the Administrator and the Operator from and after such election will be calculated in accordance with the Master Services Agreement and the Investment Management Agreement, without giving effect to the Fee Waiver.
The fees payable to the Operator and the Administrator are determined as follows under the Fee Waiver.
1.Base Fee: A base asset management fee (the “Base Fee”) is payable quarterly in arrears to the Operator in an amount equal to an annual rate of 1% (or 0.25% per quarter) of the average of the “Net Asset Value Attributable to Common Stockholders” as of the first and last day of the applicable quarter. Net Asset Value Attributable to Common stockholders is defined as (a) the sum of the Company’s (1) investments in real estate at fair value, (2) cash, (3) loans receivable at fair value and (4) the book value of unvested outstanding equity awards outstanding as of December 31, 2015 that, according to the disclosure above under “Equity Incentive Plan Compensation,” would single-trigger vest on a change in control).21
Equity Incentive Awards
The equity awards that have been granted to Mr. Salit at the discretion of the Board are not governed by the employment agreements, but rather through our 2005 Equity Incentive Plan. Our 2005 Equity Incentive Plan provides that upon either (1) the dissolution or liquidationother assets of the Company, (2)excluding deferred costs and net of other liabilities at book value, less (b) the Company’s (i) debt at face value, (ii) outstanding preferred stock at stated value, and (iii) non-controlling interests at book value; provided, that, non-controlling interests in any UPREIT operating partnership relating to the Company shall not be excluded. It is likely that the Company will seek to pay some or part of the Base Fee due to the Operator in 2022 in shares of Series A Preferred Stock.
2.Incentive Fee: A revised incentive fee (the “Revised Incentive Fee”) is payable quarterly in arrears to the Administrator with respect to the quarterly core funds from operations in excess of a salequarterly threshold equal to 1.75% (i.e., 7.00% on an annualized basis) of the Company’s assets, (3)“Adjusted Common Equity” (as defined below) for such quarter (“Excess Core FFO”) as follows: (i) no Incentive Fee in any quarter in which the Excess Core FFO is $0; (ii) 100% of any Excess Core FFO up to an amount equal to the product of (x) the average of the Adjusted Common Equity as of the first and last day of the applicable quarter and (y) 0.4375%; and (iii) 20% of any Excess Core FFO thereafter. Revised Incentive Fees payable for any partial quarter will be appropriately prorated.
“Adjusted Common Equity” means Common Equity plus Excluded Depreciation and Amortization. “Common Equity” means Total Stockholders’ Equity minus Excluded Equity. “Total Stockholders’ Equity” means the amount reflected as total stockholders’ equity in accordance with GAAP on the consolidated balance sheet of the Company and its subsidiaries as of the last day of a merger, consolidation or reorganization wheregiven quarter. “Excluded Equity” means the outstanding shares are converted into or exchanged for a different kindsum of all preferred securities of the successor entityCompany and its subsidiaries classified as permanent equity
in accordance with GAAP on the
holdersconsolidated balance sheet of the
Company’s outstanding voting power immediately prior to such transaction do not own a majorityCompany and its subsidiaries as of the
outstanding voting powerlast day of a given quarter. “Excluded Depreciation and Amortization” means, for a given quarter, the amount of all accumulated depreciation and amortization of (i) the Company and its subsidiaries and (ii) to the extent allocable to the Company and its subsidiaries, the unconsolidated affiliates, in each case as of the
successor entity immediately upon completionlast day of such
transaction or (4) the sale of all the Company’s shares to an unrelated party, all unvested share options and restricted shares shall receive accelerated vesting.Board Compensation
The Company uses a combination of cash and share-based compensation to attract and retain qualified candidates to serve on the Board. In setting directors’ compensation, the Board considers, among other things, the substantial time commitment on the part of Board in fulfilling their duties as well as the skill level it requires of directors. In addition, directors are reimbursed by the Company for their expenses related to attending board or committee meetings.
The independent directors are compensated accordingquarter that corresponds to the following schedule:
Annual board retainer | | $ | 50,000 | |
Annual audit committee chairman retainer | | $ | 20,000 | |
The annual board retainerperiodic depreciation and the annual audit committee chairman retainer areamortization expense calculated in each case in accordance with GAAP that is a permitted add back to net income calculated in accordance with GAAP when calculating funds from operations.
3.Capital Gains Fee: A capital gains fee (the “Capital Gains Fee”) is payable quarterly in advance.The compensation arrangement forarrears to the independent directorsAdministrator in 2016 is expectedan amount equal to be(i) 15% of the same ascumulative aggregate realized capital gains minus the compensation arrangement forcumulative aggregate realized capital losses (in each case since the independent directors in 2015.
Director Compensation in 2015
Name | | Fees Earned
or Paid
in Cash | | Share Awards(1) | | Total | |
Robert Cresci | | $ | 70,000 | | $ | 36,160 | | $ | 106,160 | |
Douglas Bech | | 50,000 | | 36,160 | | 86,160 | |
Frank Golay, Jr. | | 50,000 | | 36,160 | | 86,160 | |
| | | | | | | | | | |
(1) RepresentsEffective Date), minus (ii) the grant date fairaggregate capital gains fees paid since the Effective Date. Realized capital gains and realized capital losses are calculated by subtracting from the sales price of a property: (a) any costs incurred to sell such property, and (b) the current gross value of the restrictedproperty (meaning the property’s original acquisition price plus any subsequent, non-reimbursed capital improvements thereon paid for by the Company).
For the year ended December 31, 2022 and the three months ended March 31, 2023, the Operator earned asset management fees of $3.6 million and $720,000, respectively. The Company issued to the Operator an aggregate of 270,209 shares
or share options, as the case may be, for purposes of
ASC Topic 718, Compensation—its Series A Preferred Stock,
Compensation. Eachin lieu of cash payment of the
independent directors received a grant of 2,000asset management fees incurred during the year ended December 31, 2021. The Company issued to the Operator 110,285 shares of
CommonSeries A1 Preferred Stock
on April 3, 2015, which shares will vest one year fromin lieu of cash payment for the
date of grant. The grant date fair value ofasset management fees incurred during the
restricted shares is based on the per share closing price of our Common Stock on April 2, 2015, which was $18.08.RELATED PERSON TRANSACTIONS
Transactions with Related Persons
nine months ended September 30, 2022.
Affiliates of CIM Group (collectively, the “CIM Management Entities”) provide property management, leasing, and development services to CIM Urban. The CIM Management Entities earned property management fees, which are included in rental and other property operating expenses, totaling
$5,814,000$1.7 million and
$5,284,000$477,000 for the
yearsyear ended December 31,
20152022 and
2014,the three months ended March 31, 2023, respectively. CIM Urban also reimbursed the CIM Management Entities
$8,319,000$2.8 million and
$7,369,000$1,070,000 during the
yearsyear ended December 31,
20152022 and
2014,the three months ended March 31, 2023, respectively, for
the cost of on-site personnelonsite management costs incurred on behalf of CIM Urban, which
isare included in rental and other property operating expenses. The CIM Management Entities earned leasing commissions of
$697,000$794,000 and
$1,904,000$39,000 for the
yearsyear ended December 31,
20152022 and
2014,the three months ended March 31, 2023, respectively, which were capitalized to deferred charges. In addition, the CIM Management Entities earned construction management fees of
$1,055,000$398,000 and
$566,000$118,000 for the
yearsyear ended December 31,
20152022 and
2014,the three months ended March 31, 2023, respectively, which were capitalized to investments in real estate.
22
PMC Commercial Trust and CIM REIT entered into various agreements with plaintiffs to settle their claims with regards to the Merger, which agreements were effective as of January 28, 2014 and were approved by the court on April 4, 2014 (the “Settlement Agreement”). Under the terms of the Settlement Agreement, the Manager entered into a trading plan (the “Trading Plan”) designed to comply with Rule 10b5-1 under the Exchange Act to provide for the purchase of up to 550,000 shares of Common Stock at prices up to $25.00 per share. The Trading Plan commenced on March 12, 2014 and expired on August 10, 2014. Pursuant to the Trading Plan, the Manager acquired approximately 254,000 shares of Common Stock. Additionally, CIM Commercial agreed to be responsible for providing and administering notice of the class action settlement to the members of the settlement class and pay for all reasonable costs incurred in providing such notice. As a result of the settlement, CIM Commercial agreed to payment of attorney’s fees and expenses of plaintiffs’ counsel of $772,000. In addition, pursuant to the terms of the Settlement Agreement, the Manager purchased 100,000 shares of Common Stock owned by REIT Redux LP and its other “reporting persons” at a price of $25.00 per share in August 2014.
On March 11, 2014, CIM Commercial and its subsidiaries entered into the Master Services Agreement with the Manager pursuant to which the Manager agrees to provide or arrange for other service providers to provide management and administrative services to CIM Commercial and its subsidiaries. Pursuant to the Master Services Agreement, we appointed an affiliate of CIM Group as the manageradministrator of CIM Urban GP.Partners GP, LLC. Under the Master Services Agreement, CIM Commercial paysfor fiscal quarters prior to April 1, 2020, the Company paid a base service fee (the “Base Service Fee”) to the ManagerAdministrator initially set at $1,000,000 per year (subject to an annual escalation by a specified inflation factor beginning on January 1, 2015), payable quarterly in arrears. Based onFor the annual escalation factor,year ended December 31, 2020, we issued to the Administrator 11,273 shares of Series A Preferred Stock in lieu of cash as payment of the Base Service Fee for 2015 was $1,010,000. The Base Service Fee began to accrue on March 11, 2014 and was pro-rated based on the numberin respect of days during the first quarter in whichfiscal quarter. On May 11, 2020, the Master Services Agreement was in effect. Foramended to replace the years ended December 31, 2015 and 2014, the Manager earned a Base Service Fee with an incentive fee pursuant to which the Administrator was entitled to receive, on a quarterly basis, 15.00% of $1,010,000the Company’s quarterly core funds from operations in excess of a quarterly threshold equal to 1.75% (i.e., 7.00% on an annualized basis) of the Company’s average adjusted common stockholders’ equity (i.e., common stockholders’ equity plus accumulated depreciation and $806,000, respectively.
amortization) for such quarter. The amendment was effective as of April 1, 2020 and was further modified by the Fee Waiver described above. No such incentive fee was paid by the Company.
In addition, pursuant to the terms of the Master Services Agreement, the
ManagerAdministrator may receive compensation and/or reimbursement for performing certain services for
CIM Commercialthe Company and its subsidiaries that are not covered
underby the Base Service
Fee.Fee or the incentive fee arrangement in place between May 11, 2020 and January 5, 2022, as the case may be. During the
yearsyear ended December 31,
20152022 and
2014,the three months ended March 31, 2023, such services performed by the
ManagerAdministrator and its affiliates included accounting, tax, reporting, internal audit, legal, compliance, risk management, IT, human resources,
corporate communications, operational and
corporate communications.on-going support in connection with the Company’s offering of Series A Preferred Stock. The
Manager’sAdministrator’s compensation is based on the salaries and benefits of the employees of the
ManagerAdministrator and/or its affiliates who performed these services (allocated based on the percentage of time spent on the affairs of
CIM Commercialthe Company and its subsidiaries). For the
yearsyear ended December 31,
20152022 and
2014,the three months ended March 31, 2023, we expensed
$2,993,000$1.9 million and
$1,193,000$528,000, respectively, for such services,
respectively.In May 2005, CIM Urban and CIM Urban REIT Management L.P., each an affiliate of CIM REIT and CIM Group, entered into an Investment Management Agreement, pursuantwhich are included in expense reimbursements to which CIM Urban engaged CIM Urban REIT Management L.P.related parties—corporate.
The Company is a party to
provide investment advisory services to CIM Urban. CIM Investment Advisors, LLC, an affiliate of CIM REIT and CIM Group, registered with the SEC as an investment adviser and, in connection with such registration, CIM Urban entered into a new Investment Management Agreement with CIM Investment Advisors, LLC in December, 2015, on terms substantially similar to those in the previous Investment Management Agreement, pursuant to which CIM Urban engaged CIM Investment Advisors, LLC to provide investment advisory services, and the previous Investment Management Agreement was terminated. The Advisor manages CIM Urban’s investments in real estate and other assets, including debt, equity and equity-related interests in real estate, securities and investments (including cash), and has the power and authority to determine, and with full discretion to purchase, retain and dispose of such investments and to execute agreements relating thereto in accordance with the investment objectives, policies and restrictions set forth in the CIM Urban’s partnership agreement. “Advisor” refers to CIM Urban REIT Management L.P. prior to December 10, 2015 and to CIM Investment Advisors, LLC on and after December 10, 2015. For the years ended December 31, 2015 and 2014, the Advisor earned asset management fees of $24,882,000 and $23,223,000, respectively.On March 11, 2014, CIM Commercial entered into a Registration Rights and Lockup Agreement with Urban II pursuant to which Urban II is entitled to registration rights, subject to certain limitations, with respect to Common Stock it received in the Merger and the Common Stock issued upon conversion of the Preferred Shares it received in the Merger. Specifically, Urban II has eight demand registration rights (rights to require CIM Commercial to file a registration statement with the SEC). It also has certain piggyback and incidental registration rights. In accordance with such registration rights agreement, CIM Commercial filed a registration statement that was declared effective in May 2015. CIM Commercial bore the expenses incurred in connection with the filing of such registration statement in accordance with such registration rights agreement.
As of January 1, 2015, substantially all of CIM Commercial’s lending segment employees moved to CIM SBA, an affiliate of CIM Group, except for two officers of the Company including Mr. Salit, our President and Secretary, who became jointly employed by CIM Commercial and CIM SBA and his employment agreement with CIM Commercial continues in full force and effect. In connection with this move, on January 1, 2015, CIM Commercial entered into a Staffing and Reimbursement Agreement with CIM SBA Staffing, LLC, an affiliate of CIM Group, and our subsidiary, PMC Commercial Lending, LLC, whichLLC. The agreement provides that CIM SBA will provide personnel and resources to the Company and the Company will reimburse CIM SBA Staffing, LLC for the costs and expenses of providing such personnel and resources. For the year ended December 31, 2015, we2022 and the three months ended March 31, 2023,
the Company incurred expenses related to services subject to reimbursement by usthe Company under thisthe agreement of $4,627,000,$1.9 million and $608,000 respectively, in each case included as expense reimbursements to related parties – lending segment.
CCO Capital, LLC (“CCO Capital”) became the exclusive dealer manager for the Company’s public offering of the Series A Preferred Stock and Series A Preferred Warrants effective as of May 31, 2019. CCO Capital is a registered broker dealer and is under common control with the Operator and the Administrator. The Company’s offering of the Series A Preferred Warrants ended at the end of January 2020. On January 28, 2020, the Company entered into the Second Amended and Restated Dealer Manager Agreement, pursuant to which areCCO Capital acted as the exclusive dealer manager for the Company’s public offering of its Series A Preferred Stock and Series D Preferred Stock. The Second Amended and Restated Dealer Manager Agreement was subsequently amended by the Company and CCO Capital to address changes to, among other things, selling commissions and dealer manager fees.
On June 16, 2022, the Company entered into the Third Amended and Restated Dealer Manager Agreement, pursuant to which CCO Capital has been acting as the exclusive dealer manager for the Company’s public offering of its Series A1 Preferred Stock. Thereunder, the Company agreed to compensate CCO Capital, as the dealer manager for the offering, as follows: (1) a dealer manager fee of up to 3.00% of the selling price of each share of Series A1 Preferred Stock sold and (2) selling commissions of up to 7.00% of the selling price of each share of Series A1 Preferred Stock sold. The Company has been informed that CCO Capital generally reallows 100% of the selling commissions on sales of Series A1 Preferred Stock and generally reallows substantially all of the dealer manager fee on sales of Series A1 Preferred Stock to participating broker-dealers. In addition, pursuant to the Third Amended and Restated Dealer Manager Agreement, CCO Capital will no longer solicit or make any offers for the sale of shares of Series A Preferred Stock or Series D Preferred Stock.
In connection with the offering of the Series A Units, Series A Preferred Stock and Series D Preferred Stock, at December 31, 2022 and for the three months ended March 31, 2023, $2.3 million and $2.5 million, respectively, was included in discontinued operations,deferred costs as reimbursable expenses incurred pursuant to the Master Services Agreement and $434,000,the then applicable dealer manager agreement with CCO Capital, of which are$17,000 and $75,000, respectively, was included in asset management and other feesdue to related parties. CCO Capital incurred non-issuance specific costs of $689,000 and $144,000 for the year ended December 31, 2022 and the three months ended March 31, 2023, respectively.
At December 31, 2022 and March 31, 2023, upfront dealer manager and trailing dealer manager fees of $454,000 and $413,000, respectively, were included in due to related parties. CCO Capital earned upfront dealer manager and trailing dealer manager fees of $2.0 million and $320,000 for the year ended December 31, 2022 and three months ended March 31, 2023, respectively.
Affiliate Investments
In addition, we expensed $1,638,000February 2022, the Company invested with a CIM-managed separate account in an unconsolidated joint venture, which purchased an office property in Los Angeles, California for transaction costs paid to CIM SBAa gross purchase price of approximately $51.0 million, of which the Company initially contributed approximately $22.4 million and the CIM-managed account initially contributed the remaining balance.
In February 2023, the Company and a CIM-managed interval fund invested in an unconsolidated joint venture (the “1902 JV”) which purchased a multifamily property in the Echo Park neighborhood of Los Angeles, California for reimbursementa gross purchase price of costs in$19.1 million. The Company owns 50% of the 1902 Park JV. In connection with the saleclosing in February 2023, the 1902 Park JV obtained financing of substantially all$9.6 million through a mortgage loan. The Company and the CIM-managed interval fund both initially contributed $6.6 million to the 1902 Park JV.
During the three months ended both March 31, 2023, the Company acquired an interest in four assets from entities indirectly wholly-owned by a fund that is managed by affiliates of our commercial mortgage loansCIM Group Management, LLC for $282.9 million (exclusive of transactions costs). As part of this transaction, the Company had a $3.7 million receivable due from the affiliate related to an unrelated third party.23
certain post-closing items that was included in accounts receivable, net on the consolidated balance sheet as of March 31, 2023. Subsequent to March 31, 2023, the Company received the full proceeds related to these post-closing items.
Other
On October 1, 2015, an affiliate ofMay 15, 2019, CIM Group entered into a 5-yearan approximately 11-year lease renewalfor approximately 32,000 rentable square feet with respect to a property owned by the Company. The lease provides a yearly rent ofwas amended on August 7, 2019 to reduce the rentable square feet to approximately $102,000 per year.30,000 rentable square feet. In February 2023, the Company sold an 80% interest in the property (4750 Wilshire) and now holds its retained 20% interest in the property through an unconsolidated joint venture. For the years ended December 31, 20152022 and 2014, wethe three months ended March 31, 2023, the Company recorded rental and other property income related to this leasetenant of $104,000$1.5 million and $100,000,$194,000, respectively.
Mr. Kuba, Mr. Ressler and Mr. Shemesh, directors of the Company, together with their respective heirs and trusts for the benefit of their respective heirs, directly and indirectly, control and are the majority owners of CIM Group and its subsidiaries, which receive asset management and certain other fees from CIM Urban and services fees from CIM Commercial and its subsidiaries as contemplated in the Master Services Agreement.
Review, Approval and Ratification of Transactions with Related Persons
The Board has adopted a written related person transaction policy. Under the policy, a “Related Person Transaction” includes certain transactions, arrangements or relationships (or any series of similar transactions, arrangements or relationships) in which the Company (including any of its subsidiaries) was, is or will be a participant, and in which a related person had, has or will have a direct or indirect material interest.
Any person who was in any of the following categories during the applicable period:
·•a director or nominee for director;·•any executive officer; or·•any immediate family member of a director or executive officer, or of any nominee for director, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,mother in law, father in law, son in law, daughter in law, brother in law, or sister-in-lawsister in law of the director, executive officer, or nominee for director and any person (other than a tenant or employee) sharing the household of such security holder.Any person who was in any of the following categories when a transaction in which such person had a direct or indirect material interest occurred or existed:
·•any person who is known to the Company to be the beneficial owner of more than 5% of our shares; and·•any immediate family member of any such security holder, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law,mother in law, father in law, son in law, daughter in law, brother in law, or sister-in-lawsister in law of such security holder and any person (other than a tenant or employee) sharing the household of such security holder.A person who has a position or relationship within a firm, corporation or other entity that engages in a transaction with the Company will not be deemed to have an “indirect material interest” within the meaning of “Related Person Transaction” when:
The interest arises only:
·•from such person’s position as a director of another corporation or organization that is a party to the transaction; or24
·•from the direct or indirect ownership by such person and all other persons specified in the definition of “Related Person” in the aggregate of less than 10% equity interest in another person (other than a partnership) which is a party to the transaction; or
·•from both such position and ownership; or·•from such person’s position as a limited partner in a partnership in which the person and all other persons specified in the definition of “Related Person” have an interest of less than 10%, and the person is not a general partner of and does not hold another position in the partnership.Each of the Company’s executive officers is encouraged to help identify any potential Related Person Transaction.
If a new Related Person Transaction is identified, it will initially be brought to the attention of the Chief Financial Officer, who will then prepare a recommendation to the Board and/or a committee thereof regarding whether the proposed transaction is reasonable and fair to the Company.
A committee comprised solely of independent directors, who are also independent of the Related Person Transaction in question, will determine whether to approve a Related Person Transaction. In general, the committee will only approve or ratify a Related Person Transaction if it determines, among other things, that the Related Person Transaction is reasonable and fair to the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a)
Independence of Directors
Under the corporate governance standards of Nasdaq, a majority of the Exchange Act requires our directorsmembers of the Board must be independent. In making independence determinations, the Board observes all criteria for independence established by the SEC and executive officers,Nasdaq. As part of such review, the Board considers transactions and persons who own more than 10%relationships between each director or any member of his or her
immediate family and the Company, including (if applicable) those reported under “Related Person Transactions.” The purpose of such review is to determine whether any such relationships or transactions are inconsistent with a
registered classdetermination that a director is independent. Based on the foregoing, the Board has determined that each of
our equity securities, to file reports of holdingsMessrs. Bech and
transactionsBryant, Ms. Edwards and Ms. Wong are independent directors. Mr. Eppich passed away in
our securities withJuly 2022; the
SEC. Executive officers, directors and greater than 10% beneficial owners are required by applicable regulations to furnish us with copies of all Section 16(a) forms they file with the SEC.Based solely upon a review of these reports, during the fiscal year ended December 31, 2015, we believeBoard concluded that all SEC filing requirements applicable to our directors, executive officers and beneficial owners of more than 10% of our Common Stock were satisfied on a timely basis in 2015.
Mr. Eppich remained an independent director until his passing.
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
BDO
Deloitte was appointed to serve as our independent registered public accounting firm for the fiscal year
endingended December 31,
2016.2022. Although ratification of the appointment of
BDODeloitte by our stockholders is not required, the Board is submitting the selection of
BDODeloitte to our stockholders for ratification as a matter of good corporate governance. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another independent registered public accounting firm.
PricewaterhouseCoopers LLP (“PwC”) audited the legacy PMC Commercial Trust financial statements for the year ended December 31, 2013. Upon the consummation of the Merger in 2014, PwC was dismissed as our independent registered public accounting firm and subsequently BDO was engaged to be our independent registered public accounting firm for the fiscal years ended December 31, 2014 and 2015. The Merger was treated as a reverse acquisition for accounting purposes and, as such, the historical financial statements of the accounting acquirer, CIM Urban, have become our historical financial statements. Deloitte & Touche LLP (“Deloitte”) audited the CIM Urban financial statements prior to the Merger and was dismissed as the auditors for CIM Urban during 2014.
PwC’s audit reports on the legacy PMC Commercial Trust financial statements for the fiscal years ended December 31, 2013 and 2012 did not contain an adverse opinion or disclaimer of opinion, or qualification or modification as to uncertainty, audit scope, or accounting principles. In connection with the audits of the legacy PMC Commercial Trust financial statements for each of the fiscal years ended December 31, 2013 and December 31, 2012 and through March 11, 2014, there were (1) no disagreements between PMC Commercial Trust and PwC on any matters of accounting principles or practices, financial statement disclosure, or auditing scope and procedures that, if not resolved to the satisfaction of PwC, would have caused PwC to make reference to the subject matter in its audit report and (2) there were no reportable events as defined in Item 304(a)(1)(v) of the SEC’s Regulation S-K.
25
In addition, for the fiscal years ended December 31, 2013 and 2012 and through the date that Deloitte was dismissed as the independent registered public accounting firm for CIM Urban, Deloitte’s audit reports on CIM Urban financial statements did not contain an adverse opinion or disclaimer of opinion, or qualification or modification as to uncertainty, audit scope, or accounting principles. In connection with the audits of CIM Urban financial statements for each of the fiscal years ended December 31, 2013 and December 31, 2012 and through the date that Deloitte was dismissed as the independent registered public accounting firm for CIM Urban, there were (1) no disagreements between CIM Urban and Deloitte on any matters of accounting principles or practices, financial statement disclosure, or auditing scope and procedures that, if not resolved to the satisfaction of Deloitte, would have caused Deloitte to make reference to the subject matter in its audit report and (2) there were no reportable events as defined in Item 304(a)(1)(v) of the SEC’s Regulation S-K.
We provided PwC with a copy of the foregoing disclosures as contained in Item 4.01 of our Current Report on Form 8-K filed with the SEC on March 11, 2014, and requested that PwC furnish a letter addressed to the SEC stating whether it agreed with the above statements made by the Company. A copy of such letter, dated March 11, 2014, is filed as Exhibit 16.1 to that Current Report on Form 8-K.
On September 8, 2014, our Audit Committee formally engaged BDO to be our independent registered public accounting firm for the fiscal year ended December 31, 2014. During the years ended December 31, 2013 and 2012 and during the interim period from January 1, 2014 to September 8, 2014, the Company did not consult with BDO with regards to the financial statements of legacy PMC Commercial Trust which were audited by PwC, with respect to any of (i) the application of accounting principles to a specified transaction, either completed or proposed; (ii) the type of audit opinion that might be rendered on the legacy PMC Commercial Trust financial statements; or (iii) any other matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions to Item 304 of Regulation S-K) or a reportable event of the type described in Item 304(a)(1)(v) of Regulation S-K. Additionally, during the years ended December 31, 2013 and 2012 and during the interim period from January 1, 2014 to September 8, 2014, no written report or oral advice was provided to the Company by BDO that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue.
We expect representatives of BDODeloitte to be present at the virtual Annual Meeting, and they will have an opportunity to make a statement if they so desire and are expected to be available to respond to appropriate questions by stockholders.
Principal Accounting Firm Fees
Aggregate fees for services rendered to the Company for the years ended December 31,
20152022 and
20142021 by the Company’s principal accounting firm for such years,
BDO,Deloitte & Touch, LLP (“Deloitte”), were as follows:
| | 2015 | | 2014 | |
Audit fees(1) | | $ | 865,361 | | $ | 630,241 | |
Non-Audit Related Fees (2) | | 59,415 | | — | |
Tax Fees | | — | | — | |
All Other Fees | | — | | — | |
Total | | $ | 924,776 | | $ | 630,241 | |
| | | | | | | | | | | | | | |
| | Year Ended December 31, |
| Type of Service | | 2022 | | 2021 |
Audit fees (1) | | $ | 751,625 | | $ | 693,645 |
| Audit-related fees | | — | | — |
| Tax fees | | 179,941 | | 165,985 |
| All other fees | | — | | — |
| Total | | $ | 931,566 | | $ | 859,630 |
__________________
(1)Audit fees consisted of professional services performed in connection with (i) the audit of the Company’s annual financial statements and internal control over financial reporting, (ii) the statutory auditaudits of the financial statements of a subsidiarytwo subsidiaries of the Company in 2022 and 2021, (iii) the review of financial statements included in its quarterly reports on Form 10-Q, and (iv) procedures related to consents and assistance with and review of documents filed with the SEC. Not includedSEC, (v) other services related to (and necessary for) the audit of the Company’s financial statements and (vi) agreed-upon-procedures in 2021 in connection with a securitization completed by a subsidiary of the 2014 amount is $187,964 paid to Deloitte, our principal auditor during 2013, for services performed on 2014 financial statement matters.(2)Company in 2018. Non-audit related fees consisted of fees for non-audit accounting-related advice.
26
Pre‑Approval Policies
Pre-Approval Policies
The Company’sAudit Committee’s charter requires review and pre-approval by the Audit Committee pursuant to its exclusive authority, reviewed and approved the Company’s engagement of BDO as its independent registered public accounting firms, and the incurrence of all of the fees described above, for 2015audit and 2014.permissible non-audit services provided by our outside auditors. The Audit Committee has adopted Pre-Approval Policies forpre-approved all otheraudit services its independent registered public accounting firm may perform forprovided by our outside auditors during fiscal years 2022 and 2021 and the Company. The Pre-Approval Policies detail with specificity the services that are authorized within each of the above-described categories of services and provide for aggregate maximum dollar amountsfees paid for such pre-approved services. Any additional services not described or otherwise exceeding the maximum dollar amounts prescribed by the Pre-Approval Policies will require the further advance review and approval of the Audit Committee. For each proposed service, the independent registered public accounting firm is required to provide detailed back-up documentation at the time of approval to permit the Audit Committee to make a determination whether the provision of such services would impair the independent registered public accounting firm’s independence. The Audit Committee has delegatedmay, in its discretion, delegate to one or more of its members the authority to grantpre-approve any audit or non-audit services to be performed by the independent auditors, provided that any such additional required approvalapprovals are presented to the Committee at its Chairman between meetings of the Audit Committee, provided that the Chairman reports the details of the exercise of any such delegated authority at the next meeting of the Audit Committee.
scheduled meeting.
Management does not intend to present any business at the Annual Meeting not mentioned in this proxy statement, and at the time of preparation of this proxy statement knows of no other business to be presented. If any other matters are properly brought before the Annual Meeting, the appointed proxies will vote all proxies on such matters in
accordance with their
judgment of the best interests of the Company.discretion.
STOCKHOLDER PROPOSALS FOR THE
20172024 ANNUAL MEETING
The deadline for submission of stockholder proposals in our proxy statement and form of proxy for the annual meeting of stockholders of the Company to be held in
20172024 (the
“2017“2024 Annual Meeting”)
, calculated in accordance with Rule
14a-814a‑8 under the Exchange Act
(“Rule 14a-8”), is
December 9, 2016.February 28, 2024. Any such proposal must also comply with the other requirements of Rule 14a-8.
Under our
Bylaws,current bylaws, a stockholder is
only eligible to submit a stockholder proposal,
including a proposal for the nomination of one or more directors, outside the processes of Rule
14a-814a‑8 if the stockholder is (1) a stockholder of record both at the time of giving notice and at the time of the
20172024 Annual Meeting,
and (2) is entitled to vote at the
20172024 Annual
Meeting. TheMeeting, and (3) satisfies the requirements in our current bylaws with respect to such proposal. Our current bylaws require that such stockholder
also must provide timely notice
in proper written form of the proposal
or nomination, including all of the information required by our current bylaws, to the Company, addressed to
Mr. Jan F. Salit, Secretary of the Company, 17950 Preston Road, Suite 600, Dallas, Texas 75252. To be timely under our
Bylaws,current bylaws, we
generally must receive advance notice of the proposal no earlier than
November 9, 2016January 29, 2024 and no later than 5:00 p.m., Eastern Time, on
December 9, 2016.ANNUAL REPORT
February 28, 2024. However, in the event that the 2024 Annual Meeting is held before June 27, 2024 or after August 26, 2024, advance notice will be timely if received by the Company no earlier than 150 days prior to the date of the 2024 Annual Meeting and not later than 5:00 p.m., Eastern Time, on the later of (a) 120 days prior to the date of the 2024 Annual Meeting and (b) the tenth day following the day on which we first made a public announcement of the date of the 2024 Annual Meeting. In addition to satisfying the deadlines in the advance notice provisions of the Company’s bylaws, a stockholder who intends to solicit proxies in support of nominees submitted under these advance notice provisions must also comply with the additional requirements of Exchange Act Rule 14a-19, including providing the notice required under Exchange Act Rule 14a-19(b) no later than May 28, 2024.
AVAILABILITY OF DOCUMENTS
We have provided, without charge,
a copy of the annual report to stockholders for fiscal year 2015, which includes a copy of the Form 10-K as filed with the SEC (excluding exhibits), to each person being solicited by this proxy
statement.statement, a copy of this proxy statement and the Annual Report on Form 10‑K for the year ended December 31, 2022, including the consolidated financial statements contained therein (excluding exhibits thereto). Upon the written request by any person being solicited by this proxy statement, we will provide
without chargeupon the payment of a
copyreasonable fee as we may specify to cover our expenses copies of
the exhibits to the Annual Report on Form
10-K as filed with the SEC (excluding exhibits, for which a reasonable charge shall be imposed).10‑K. All requests should be directed to the Company’s
InvestorStockholder Relations Department
atby writing to 17950 Preston Road, Suite 600, Dallas, Texas
75252.75252 or e-mailing shareholders@creativemediacommunity.com.
REDUCE DUPLICATE MAILINGS
The SEC has adopted rules that permit companies and intermediaries (for example, brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. A number of brokers with account holders who are stockholders of the Company “household” the Company’s proxy materials in this manner. If you
have received notice from your broker that it will be householding communications to your address, householding will continue until you are
notified otherwise or until you revoke your consent. If, at any time, youan affected stockholder and no longer wish to participate in householding,
and would prefer to receive a separate proxy statement or annual statement, or if you
currently receiveare receiving multiple copies of the proxy statement
at your addressor the Notice and
would likewish to
request householding of your communications,receive only one, please
follow the instructions described below and notify your broker,
or the Company’s transfer agentif your shares are held in
writinga brokerage account, or
by telephone.Stockholders of record should contact our transfer agent, American Stock Transfer and Trust, at:
at 6201 15th Avenue,
Brooklyn, NY 11219
or (800) 937-5449
Stockholders who hold their shares in “street name” should contact their broker.
27
937‑5449, if you are the record holder of your shares.
Additionally, we will deliver promptly to any affected stockholder an additional copy of the proxy statement, annual report and/or Notice of Internet Availability of Proxy Materials, as applicable, upon a written or oral request made to the Stockholder Relations Department of the Company at 17950 Preston Road, Suite 600, Dallas, Texas 75252 or (972) 349-3200.
WHERE YOU CAN FIND MORE INFORMATION
CIM Commercial is subject to the information and periodic reporting requirements of the Exchange Act and files annual, quarterly and current reports, proxy statements and other information with the SEC as required by the Exchange Act. You can read CIM Commercial’s SEC filings, including CIM Commercial’s proxy statement, over the internet at the SEC’s website at www.sec.gov. You may also read and copy any document CIM Commercial files with the SEC at the SEC public reference room located at 100 F Street, N.E., Room 1580, Washington, D.C., 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. You may also obtain copies of the materials described above at prescribed rates by writing to the SEC, Public Reference Section, 100 F Street, N.E., Washington, D.C. 20549.
If
you would like additional copies of this proxy statement or if you have questions about the proposals to be presented at the Annual Meeting, you should contact
CIM Commercialthe Company by telephone or in writing:
Creative Media & Community Trust Corporation
17950 Preston Road, Suite 600
Dallas, Texas 75252
Attention: Stockholder Relations
(972) 349-3200
APPENDIX A: AMENDMENT TO THE
CREATIVE MEDIA & COMMUNITY TRUST CORPORATION
2015 EQUITY COMPENSATION PLAN
This Amendment (this “Amendment”) amends the 2015 Equity Compensation Plan (the “Plan”) of Creative Media & Community Trust Corporation, f/k/a CIM Commercial Trust Corporation
4700 Wilshire Blvd.
Los Angeles, California 90010
Attn: Investor Relations
(323) 860-4900
| BY ORDER OF THE BOARD OF DIRECTORS
|
| |
| Charles E. Garner II
Chief Executive Officer
|
| |
| Dated: April 8, 2016
|
28
(the “Company”).
WHEREAS, Section 3.1 of the Plan provides that the Board may amend the Plan, provided that stockholder approval will be obtained to the extent necessary to comply with applicable laws.NOW, THEREFORE, the Plan is hereby amended as follows:
1.The first sentence of Section 1.6.1 of the Plan shall be deleted in its entirety and replaced with the following: “Subject to the other provisions of this Section 1.6, the total number of Shares that may be granted under the Plan will be 533,333.”
2.All other provisions of the Plan shall remain in full force and effect.
3.This Amendment was approved by the Board of Directors of the Company on June 20, 2023.
4.This Amendment shall be effective upon receipt of approval of this Amendment by the Company’s stockholders, and shall be subject to and contingent upon receipt of such approval.
CREATIVE MEDIA & COMMUNITY TRUST
CORPORATION, a Maryland corporation
By:
Name:
Title:
ANNUAL MEETING OF STOCKHOLDERS OF CIM COMMERCIAL
CREATIVE MEDIA & COMMUNITY TRUST CORPORATION May 4, 2016
July 27, 2023
GO GREEN e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access.
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
The Notice of Meeting, proxy statement, and proxy card and Annual Report on Form 10-K
are available at http:https://investors.cimcommercial.com/sec.cfm. shareholders.creativemediacommunity.com/financials/sec-filings.
The Annual Report is availablemeeting will be held as a virtual meeting conducted exclusively via live webcast at http://investors.cimcommercial.com/sec.cfm. register.proxypush.com/CMCT, please follow the instructions under question 6 in the proxy statement.
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
↓ Please detach along perforated line and mail in the envelope provided. 20730030000000000000 2 050416 Commercial’s auditor for the fiscal year ending December 31, 2016. (See instructions below) O Avi Shemesh SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.↓
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| PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x |
Item 1. To consider and vote upon election of seven members of the Company’s board of directors, each to hold office until the next annual meeting of stockholders and until their respective successors have been elected and qualified | Item 2. To consider and approve the amendment to the Equity Compensation Plan. | FOR ☐ | AGAINST ☐ | ABSTAIN ☐ |
| ☐ | FOR ALL NOMINEES | NOMINEES: | The Board recommends you vote “FOR” the approval of the amendment to the Equity Compensation Plan. |
☐
☐ | WITHHOLD AUTHORITY FOR ALL NOMINEES
FOR ALL EXCEPT (See instructions below) | ( ) Douglas Bech ( ) John Hope Bryant ( ) Marcie Edwards ( ) Shaul Kuba ( ) Richard Ressler ( ) Avraham Shemesh ( ) Elaine Wong | Item 3. To consider and approve, by a non-binding advisory vote, the executive compensation for the fiscal year ended December 31, 2022, as disclosed in the proxy statement. | FOR ☐ | AGAINST ☐ | ABSTAIN ☐ |
| The Board recommends you vote “FOR” the approval, by a non-binding advisory vote, of the executive compensation. |
| The Board recommends you vote “FOR” each of the director nominees. | Item 4. To consider and determine, by a non-binding advisory vote, the frequency of the advisory vote on executive compensation | 1 year ☐ | 2 years ☐ | 3 years ☐ | ABSTAIN☐ |
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: ☐ | The Board recommends you vote for “1 YEAR” as the frequency. |
Item 5. To consider and approve the ratification of Deloitte & Touche, LLP as the Company’s auditor for the fiscal year ending December 31, 2023. | FOR ☐ | AGAINST ☐ | ABSTAIN ☐ |
| The Board recommends you vote “FOR” the approval of the ratification of Deloitte. |
| To change the address on your account, please check the box to the right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. |
☐ | UPON THE PROPER EXECUTION AND DELIVERY OF THIS PROXY, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS DIRECTED HEREIN. IF THIS PROXY IS PROPERLY EXECUTED AND DELIVERED, BUT NO DIRECTION IN RESPECT OF A GIVEN PROPOSAL IS INDICATED, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED IN RESPECT OF SUCH PROPOSAL WILL BE CAST AS RECOMMENDED BY THE BOARD. THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. |
| |
| Please mark, sign and return this proxy in the enclosed envelope. The undersigned acknowledges receipt from the Company of a Notice of Annual Meeting of Stockholders and a proxy statement. Each of the Notice of Annual Meeting of Stockholders and proxy statement is incorporated by reference. |
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| Signature of Stockholder | | Date: | | Signature of Stockholder | | Date: | |
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x 1. To consider and elect seven members of CIM Commercial’s board of directors, each to hold office until the next annual meeting of stockholders and until their respective successors have been elected and qualified. NOMINEES: FOR ALL NOMINEESO Douglas Bech O Robert Cresci WITHHOLD AUTHORITYO Kelly Eppich FOR ALL NOMINEESO Frank Golay, Jr. O Shaul Kuba FOR ALL EXCEPTO Richard Ressler The Board recommends you vote “FOR” each of the director nominees. INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: FOR AGAINST ABSTAIN 2. To consider and approve the ratification of BDO as CIM The Board recommends you vote “FOR” the approval of the ratification of BDO. FOR AGAINST ABSTAIN 3. To consider and approve, by a non-binding advisory vote, executive compensation. The Board recommends you vote “FOR” the approval of the compensation of our named executive officers. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED AS RECOMMENDED BY THE BOARD. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THE PROXY IN HIS BEST JUDGMENT. THIS PROXY IS Please mark, sign and return this proxy in the enclosed envelope. The undersigned acknowledges receipt from CIM Commercial of a Notice of Annual Meeting of Stockholders and a proxy statement. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that this method. Signature of Stockholder Date: Signature of StockholderDate:
- 0 CIM COMMERCIAL TRUST CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CREATIVE MEDIA & COMMUNITY TRUST CORPORATION
The undersigned stockholder of Creative Media & Community Trust Corporation, a Maryland corporation (the “Company”), hereby appoints Charles E. Garner II, Jan F. SalitDavid Thompson and David ThompsonBarry N. Berlin, or either of them, with power of substitution, as proxy and attorney-in-fact and hereby authorizes them to represent and vote, as designated on the reverse side, all the shares of common stock of CIM Commercial Trust Corporation (“CIM Commercial”)the Company, which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the Annual Meeting of Stockholders of CIM Commercialthe Company to be held at 9:10:00 a.m., Pacific Time, on May 4, 2016July 27, 2023 or any postponement or adjournment thereof, with all powers whichthat the undersigned would possess if present at the Annual Meeting. (Continued and to be signed on the reverse side.) 14475 1.1
ANNUAL MEETING OF STOCKHOLDERS OF CIM COMMERCIAL TRUST May 4, 2016 CORPORATION INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. Vote online/phone until 11:59 PM EST the day before the meeting. MAIL - Sign, date and mail your proxy card in the envelope provided as soon as possible. IN PE RSON - You may vote your shares in person by attending the Annual Meeting. GO GREEN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access. Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. 20730030000000000000 2 050416 Commercial’s auditor for the fiscal year ending December 31, 2016. (See instructions below) O Avi Shemesh SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. changes to the registered name(s) on the account may not be submitted via Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x 1. To consider and elect seven members of CIM Commercial’s board of directors, each to hold office until the next annual meeting of stockholders and until their respective successors have been elected and qualified. NOMINEES: FOR ALL NOMINEESO Douglas Bech O Robert Cresci WITHHOLD AUTHORITYO Kelly Eppich FOR ALL NOMINEESO Frank Golay, Jr. O Shaul Kuba FOR ALL EXCEPTO Richard Ressler The Board recommends you vote “FOR” each of the director nominees. INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: FOR AGAINST ABSTAIN 2. To consider and approve the ratification of BDO as CIM The Board recommends you vote “FOR” the approval of the ratification of BDO. FOR AGAINST ABSTAIN 3. To consider and approve, by a non-binding advisory vote, executive compensation. The Board recommends you vote “FOR” the approval of the compensation of our named executive officers. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED AS RECOMMENDED BY THE BOARD. IF ANY OTHER BUSINESS IS PRESENTED AT THE ANNUAL MEETING, THIS PROXY WILL BE VOTED BY THE PROXY IN HIS BEST JUDGMENT. THIS PROXY IS Please mark, sign and return this proxy in the enclosed envelope. The undersigned acknowledges receipt from CIM Commercial of athe Notice of Annual Meeting of Stockholders and a proxy statement. To changestatement for the addressAnnual Meeting of Stockholders, the terms of which are incorporated herein by reference.
(Continued and to be signed on your account, please check the box at right and indicate your new address in the address space above. Please note that this method. Signature of Stockholder Date: Signature of StockholderDate: NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting, proxy statement and proxy card are available at http://investors.cimcommercial.com/sec.cfm. The Annual Report is available at http://investors.cimcommercial.com/sec.cfm. COMPANY NUMBER ACCOUNT NUMBER PROXY VOTING INSTRUCTIONSreverse side)
