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No fee required.
April 7, 2017
(EDT), to be held virtually, by remote communication. In order to attend the meeting, you must register at https://viewproxy.com/gmre/2020/
htype.asp by 11:59 p.m. (EDT) on August 30, 2020.i
April 7, 2017
1. to elect nine nominees 2. to consider and vote on an advisory resolution to approve named executive officer (“NEO”) compensation; 3. to consider and vote on the ratification of the appointment of Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the year ending December 31, 2020; and 4. to transact such other business as may properly be brought before the Annual Meeting and at any adjournment or postponement thereof. The Board of Directors |
The Board has fixed the close of business on March 31, 2017,July 13, 2020 as the record date for determining the stockholders entitled to notice of and to vote at the Annual Meeting and any adjournment or postponement thereof.
and Secretary
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A unique join link to the Annual Meeting and a password will be provided to each stockholder who registers to attend the Annual Meeting.
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Notice of Internet Availability.
All of our common stockholders of record as of the close of business on March 31, 2017, the record date for the Annual Meeting, or their duly appointed proxies, may attend the Annual Meeting. If you wish
You may vote if you were the record owner of shares of our common stock at the close of business on March 31, 2017, the record date for the Annual Meeting. Each share of our common stock owned as of the record date has one vote.
Our Board is soliciting your vote for:
Our Board recommends you vote:
Ratification of Appointment of MaloneBailey, LLP
We
The Annual Meeting will be held at 10:00 a.m. EST, on Thursday, May 18, 2017 at the offices of Vinson & Elkins LLP, 2200 Pennsylvania Avenue NW, Suite 500 West, Washington, DC 20037. You will need to arrive early enough to check in with the security desk in the building lobby. Arriving at least 30 minutes before the meeting time would be prudent.
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Name | | | Age | | | Position | |
Jeffrey Busch | | 60 | | | Chairman of the Board, Chief Executive Officer and President | | |
| 54 | | | Chief Financial Officer and Treasurer | | ||
| 43 | | General Counsel and Secretary | | |||
Alfonzo Leon | | 44 | | | Chief Investment Officer | | |
Danica Holley | | 47 | | | Chief Operating Officer | | |
Allen Webb | | 52 | | | Senior Vice President, SEC Reporting and Technical Accounting | | |
Henry Cole† | | 75 | | | Director | | |
Matthew L. Cypher, | | 43 | | | Director | ||
Zhang Jingguo | | 56 | | | Director | | |
Ronald Marston† | | 77 | | | Director | | |
Dr. Roscoe Moore† | | 75 | | | Director | | |
Zhang Huiqi | | 30 | | | Director | |
Lori Wittman† | 61 | | | Director | | ||
Paula Crowley† | | | 65 | | | Director | |
David A. Young. Mr. Young has served as our Chief Executive Officer since February 2014 and as a director of the Company since September 2014. Since February 2014, Mr. Young has also been an employee of the Company’s external advisor, Inter-American Management LLC (our “Advisor”), where he has served as an Executive Vice President since July 1, 2016. Prior to his appointment as Chief Executive Officer of the Company and as an employee of our Advisor, Mr. Young was the Senior Vice President of Business Development at GE Capital from 2004 to 2008. From 2008 to September 2014, Mr. Young served as an independent healthcare real estate consultant. While at GE Capital, Mr. Young organized, co-launched and grew GE Capital’s first acute medical real estate financing initiative. From 2000 to 2004, Mr. Young was Vice President-Acquisitions at Windrose Medical Properties Trust, which was acquired by Health Care REIT, Inc. (NYSE: HCN) in 2006 and changed its name to Welltower Inc. in 2015. From 1990 to 1999, Mr. Young was an executive officer responsible for business development and acquisitions at Healthcare Property Investors, Inc. (NYSE: HCP). From 1988 to 1990, Mr. Young served as Associate Professor and Assistant Hospital Director of Vanderbilt University Medical Center. He served as Vice President, Corporate Marketing of Hospital Corporation of America (NYSE: HCA) from 1985 to 1988 and as Director of Corporate Planning and Business Development of American Hospital Supply Corporation (NYSE: AHSC) from 1981 to 1985. Mr. Young holds a B.S. from the University of Iowa and an M.B.A. in finance from Suffolk University.
The Nominating and Corporate Governance Committee of our Board has concluded that Mr. Young should serve as a director in recognition of his abilities to assist us in expanding our business and the contributions he can make to our strategic direction.
Jeffrey Busch. Mr. Busch has been an active investor in the real estate industry since 1985. Since 2013, Mr. Busch has served as President of our Advisor. Mr. Busch also has served as a director of our Company since September 2014 and served as Chairman and President of our Company from August 2015 to the present. Since October 2014, Mr. Buschpresent and has served as ChairmanChief Executive Officer of the Board of American Housing REIT Inc. (f/k/a On Target 360), which is also externally managed by our Advisor.Company since August 2017. His experience includes developing numerous properties in various asset classes, owning and managing real estate in several states, including rental housing, and a wide variety of commercial real estate. Since 2001, Mr. Busch has also served as President of Safe Blood International Foundation, where he oversees the establishment of medical facilities in 35 developing nations, funded by the CDC and USAID, Exxon Mobil,
1970).
institutional real estate during his leadership tenure. Dr. Cypher personally underwrote $1.5 billion of acquisitions culminating with the purchase of 230 Park Avenue in New York, which Invesco acquired on behalf of its client capital in June 2011. He also oversaw the valuations group, which marked to market Invesco’s more than $13 billion North American portfolio, and served as a member of the firm’s investment committee and investment strategy group. He has held positions as an Adjunct Professor at Southern Methodist University and a Visiting Professor at University of Texas at Arlington.
Kurt R. Harrington. Mr. Harrington began his career at Meahl, McNamara & Co. in Boston and PricewaterhouseCoopers LLP in Washington, D.C. From 1980 to 1990, he served in a number of senior financial accounting, reporting, and business planning positions at MCI Communications Corporation and Marriott Corporation. He was the Chief Financial Officer of Jupiter National, Inc., a publicly-traded, closed-end, venture capital company until 1997, when he joined Arlington Asset Investment Corp. (formerly Friedman, Billings, Ramsey Group, Inc.), a publicly traded, mortgage investment company, becoming the Chief Financial Officer and Treasurer in 2000, a position he held until March 2015. During his eighteen-year tenure at Arlington Asset he also served as the Executive Vice President, Chief Financial Officer and Treasurer of Arlington’s publicly-traded, institutional broker/dealer, FBR Capital Markets, from 2000 to 2008.
Mr. Harrington has over forty years of experience managing the financial functions for large and small publicly traded companies. He has overseen investor, banking, and lender relationships, established and maintained Sarbanes-Oxley compliant control systems and certifications, and directed strategic planning and corporate development initiatives throughout his career. He directed the preparation of financial statements, tax returns, and disclosures filed with the SEC and IRS, and also developed budgets, forecasts, and financial statements highlighting performance and corrective actions for boards of directors and executive management teams. He has executed numerous IPO, secondary, and other debt and equity capital raising transactions, and has overseen significant corporate merger and acquisition transactions.
Mr. Harrington earned a B.S. in Accounting from Nichols College in 1974, and received his Certified Public Accountant certification in 1978. Throughout his career, he has attended programs in Executive Education at the Harvard Business School and the Wharton School of The University of Pennsylvania. He has served as a trustee and treasurer of Nichols College from October 2004 to October 2016. Mr. Harrington also serves as a director of Wheeler Real Estate Investment Trust (NASDAQ: WHLR), a position he has held since June 2015.
The Nominating and Corporate Governance Committee of our Board has concluded that Mr. Harrington should serve as a director because of his thorough knowledge of finance, accounting, capital markets, taxes, control systems, and strategic planning experience in a broad range of industries, including asset management, investment banking, venture capital, telecommunications, hospitality, and real estate management.
The committee also took into account that Mr. Harrington is “independent” under SEC Rule 10A-3 and under Sections 303A.02 and 303A.07 of the listing standards of the NYSE, that his financial expertise qualifies him to serve on our Audit Committee, and that he is an “audit committee financial expert.”
Developer of Henan Province” by the Department of Housing and Urban-Rural Development of Henan Province in 2011 and “Outstanding Real Estate Developer of Zhengzhou” by the Housing Security and Real Estate Administration Bureau of Zhengzhou in 2009, 2011 and 2012. In 2012, Mr. Zhang was named “Individual with Outstanding Contribution to Market Economy of Henan Real Estate Industry” by Henan Daily and the Private Economy Research Association of Henan Province.
Mr. Zhang is the father of Zhang Huiqi.
Development. Mr. Zhang is also currently a delegate of the 13th Henan Provincial People’s Congress (January 2018 until present).
international healthcare industry.
Safety and Health, CDC. Dr. Moore has conducted clinical research on infectious diseases, has evaluated the safety and effectiveness of medical devices, and has conducted relevant epidemiological research on the utilization experience and human health effects of medical devices and radiation.
Dr. Moore currently serves on the Board of Directors of Immune Therapeutics (OTC: IMUN), a position he has held since 2018. Dr. Moore currently serves on the Board of Advisors for the Institute of Human Virology, School of Medicine, University of Maryland, and the Board of Directors for the Global Virus Network since September 2019.
Officer until October 2015, when Anchor was sold to Brinkman Management and Development. Since October 2015, Ms. Crowley has continued to be involved with Anchor, serving as its Chairman from October 2015 through November 2017 and as its Chair Emeritus since November 2017. Anchor is a national full-service real estate development, management and investment company that focuses on healthcare properties. Prior to Anchor, Ms. Crowley spent eight years as Development Director with The Rouse Company of Columbia, Maryland, where she was responsible for the development of urban retail projects.
Donald McClure
projects. From 2005
Conn Flanigan. Mr. Flanigan wasis a directormember of the Company from September 2013 until the completionAmerican Institute of the Company’s IPO in July 2016. He has served as our Secretary and General Counsel since December 2013. Mr. Flanigan previously served as our Chief Financial Officer from September 2013 until September 2014 and also served as our Chief Executive Officer from September 2013 until February 2014. Mr. Flanigan is also the Secretary and General Counsel of our Advisor, a position he has held since October 2014. From September 2013 to the present, Mr. Flanigan has served as General Counsel and Secretary and as a director of American Housing REIT Inc. (f/k/a On Target360 Group, Inc.), which is also externally managed by our Advisor. Additionally, Mr. Flanigan has served as General Counsel with eBanker Corporate Services, Inc., a Colorado subsidiary of ZH International Holdings Limited, since 2007. From 2000 to 2007, Mr. Flanigan served as corporate counsel to eVision Corporate Services, Inc., a Colorado subsidiary of ZH International Holdings Limited. Mr. Flanigan received a B.A. in International Relations from the University of San Diego in 1990 and a J.D. from the University of Denver Sturm College of Law in 1996.
Certified Public Accountants.
independent consultant during October and November of 2012 before joining Empire. Mr. Webb was the Director of SEC Reporting and Technical Accounting at Versar, Inc. (NYSE: VSR), a global project management company providing support to federal, state, and local clients worldwide from August 2011 to September 2012. From January 2011 to August 2011, Mr. Webb was an independent consultant. Prior to this, he served as the Director of Accounting at Coventry Health Care, Inc., which was acquired by Aetna (NYSE: AET) in 2013. Mr. Webb joined Coventry in April 2008. Prior to joining Coventry, Mr. Webb was the Assistant Controller for Pepco Holdings, Inc., which merged with Exelon (NYSE: EXC) in 2016. Mr. Webb joined Pepco Holdings in August 1998. Prior to joining Pepco Holdings, Mr. Webb joined the real estate industry group within the SEC’s Division of Corporation Finance in March 1997 and joined Arthur Andersen in September 1990 where he served as the engagement manager on several REIT initial public offering engagements.
Danica Holley. Ms. Holley has served as our Chief Operating Officer since March 30, 2016. Ms. Holley’s business development and management experience spans more than 18 years with an emphasis on working Mr. Webb is a Certified Public Accountant in an international environment. She has extensive experience in international program management, government procurement, and global business roll-outs and start-ups. As Executive Director for Safe Blood International Foundation, from April 15, 2008 to present, she oversaw national health initiatives in Africa and Asia, including an Ebola response project. Ms. Holley has held management positions as the Directorstate of Strategy, Corporate Business Development for WorldSpace, Inc. from 1997 to 2000, Director of Marketing for Corporate and Business at ISI Professional Services from 2000 to 2001, and Director of Administration at Tanzus Development from 1996 to 1997 and SK&I Architectural Design Group, LLC from 2003 to 2007. Ms. Holley has more than a decade of experience managing multinational teams for complex service delivery across disciplines.
She received a B.S.F.S from the Edmund Walsh School of Foreign Service at Georgetown University in International Law, Politics and Organization, an African Studies Certificate and Arabic Proficiency (May 1994). She studied International Organization at the School for International Training, Brattleboro, Vermont and Rabat, Morocco (January – June 1993). She is an ICF certified executive leadership coach and an alumna of Georgetown University’s Graduate Leadership Coaching Program (September 2010).
Name of Beneficial Owner | | | Number of Shares Beneficially Owned(1) | | | Percentage of Shares(2) | | ||||||
5% Beneficial Owners | | | | | | | | | | | | | |
The Vanguard Group | | | | | 4,290,304(3) | | | | | | 9.3% | | |
Zensun Enterprises Limited | | | | | 3,715,611(4) | | | | | | 8.0% | | |
BlackRock, Inc. | | | | | 2,602,565(5) | | | | | | 5.6% | | |
Executive Officers and Directors | | | | | | | | | | | | | |
Jeffrey Busch | | | | | 220,687(6) | | | | | | * | | |
Robert Kiernan | | | | | 51,434(7) | | | | | | * | | |
Alfonzo Leon | | | | | 86,123(8) | | | | | | * | | |
Allen Webb | | | | | 67,262(9) | | | | | | * | | |
Jamie Barber | | | | | 50,149(10) | | | | | | * | | |
Zhang Jingguo | | | | | 3,715,611(11) | | | | | | 8.0% | | |
Zhang Huiqi | | | | | 3,745,611(12) | | | | | | 8.1% | | |
Henry Cole | | | | | 19,575(13) | | | | | | * | | |
Ronald Marston | | | | | 18,960(14) | | | | | | * | | |
Matthew L. Cypher, Ph. D | | | | | 13,130(15) | | | | | | * | | |
Dr. Roscoe Moore | | | | | 7,185(16) | | | | | | * | | |
Lori Wittman | | | | | 7,185(17) | | | | | | * | | |
Paula Crowley | | | | | 7,185(18) | | | | | | * | | |
All executive officers and directors as a group (14 people) | | | | | 4,355,726 | | | | | | 9.4% | | |
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Name of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Shares(1) | ||||||
5% Beneficial Owners | ||||||||
ZH USA, LLC(2) | 2,604,500 | 14.79 | % | |||||
Executive Officers and Directors | ||||||||
David A. Young | 95,973 | (4) | * | |||||
Conn Flanigan | 23,258 | (5) | * | |||||
Donald McClure | 30,430 | (6) | * | |||||
Jeffrey Busch | 87,688 | (7) | * | |||||
Zhang Jingguo(2)(3) | 2,604,500 | 14.79 | % | |||||
Ronald Marston | 2,750 | (8) | * | |||||
Roscoe Moore | 2,750 | (8) | * | |||||
Henry Cole | 2,750 | (8) | * | |||||
Allen Webb | 25,430 | (9) | * | |||||
Danica Holley | 24,887 | (10) | * | |||||
Alfonzo Leon | 29,774 | (11) | * | |||||
Matthew L. Cypher, Ph. D | 2,750 | (8) | * | |||||
Kurt R. Harrington | 2,750 | (8) | * | |||||
Zhang Huiqi | 30,000 | (12) | * | |||||
All executive officers and director nominees as a group (14 people) | 2,965,690 | 16.51 | % |
compensation to our executive officers. Instead, our executive officers’ cash compensation iswas paid by our Advisor or its affiliates.IAM. The Compensation Committee and Board dodid not have input regarding such cash compensation. The Compensation Committee has overall responsibility for evaluating and recommending changes to the director and officer compensation plans, policies and programs of the Company and approving and recommending to the Board for its approval awards under the Plans and amendments to the Plans. The Compensation Committee has the authority to retain legal, accounting and other advisors as it determines necessary to carry out its functions. In 2016,2019, the Compensation Committee retained an independent compensation consultant, FTI Consulting, Inc. (“FTI”), to review the compensation program for our independent directors and the equity-based compensation program for our officers and key employees of our Former Advisor who perform services for us and to assist the Compensation Committee in developing a new 20172020 annual and long-term performance-based equity compensation program for our officers and key employees of our Former Advisor who perform services for us.
Our
The Board believes an effective risk management system will (1) timely identify the material risks that we face; (2) communicate necessary information with respect to material risks to our principal executive officer or principal financial officer and, officers of our Advisor and, as appropriate, to our Board or relevant committee thereof; (3) implement appropriate and responsive risk management strategies consistent with our risk profile; and (4) integrate risk management into management and our Board’s decision-making.
Kurt R. Harrington, Chairman
the vote when making future executive compensation decisions.
Our Advisor or its affiliates pay all cash compensation of our executive officers.officers in 2019. We paypaid our Former Advisor a management fee pursuant to the Prior Management Agreement, and our Former Advisor usesused the proceeds from the management fee in part to pay compensation to our officers and the Advisors’Former Advisor’s other employees who performperformed services for us.
| | | Annual Equity Incentive Plans | | | Long-Term Equity Incentive Plans | |
Structure | | | Threshold, Target and Maximum Awards based on the achievement of various annual performance goals. | | | Threshold, Target and Maximum Awards based on achievement of various long-term stockholder return goals. | |
Performance Metrics | | | Generally divided into multiple categories based on the following metrics: • Acquisition activity; • Adjusted Funds from Operations (“AFFO”)(1); • Leverage levels; and • Individual performance. | | | Performance-based component (60% of overall long-term equity award) generally divided into the following two categories: • Absolute total stockholder return (75%); and • Relative total stockholder return (25%). The remaining 40% of the long-term equity award is subject to time-based vesting only. | |
| | | Annual Equity Incentive Plans | | | Long-Term Equity Incentive Plans | |
Timing of Payout and Vesting | | | Awards are paid, through the issuance of LTIP Units, annually based on achievement of performance metrics for the prior year, and vest once issued as follows: • 50% immediately at the time of issuance; and • 50% on the one-year anniversary of the issuance date. | | | Performance-based awards are paid, through the issuance of LTIP Units, at the end of a three-year performance period, based on the achievement of absolute and relative total stockholder return goals, and vest once issued as follows: • 50% immediately at the time of issuance; and • 50% on the one-year anniversary of the date of issuance. Time-based awards vest in equal one-third installments on the first, second and third anniversary of the date of grant. | |
| | | As of and for the years ended | | |||
| | | 2019 | | | 2018 | |
Gross investment in real estate | | | $905.5 million | | | $647.6 million | |
Rental revenue | | | $70.7 million | | | $53.2 million | |
Gain on sale of investment property | | | $— | | | $7.7 million | |
Net income attributable to common stockholders per share | | | $0.10 | | | $0.35 | |
Credit facility size | | | $500.0 million | | | $350.0 million | |
Preferred stock outstanding | | | $75.0 million | | | $75.0 million | |
Total equity | | | $460.4 million | | | $299.8 million | |
We have granted, and we expect to grant again in the future, equity-based awards under the Global Medical REIT Inc. 2016 Equity Incentive Plan to our executive officers and certain officers and employees of our Advisor and other individuals who provide services to us, as designated by our Advisor, as well as to our independent directors, such awards determined by our Board after taking into account the recommendationspresent. The Chair of the Compensation Committee reports to the Board on the committee’s decisions concerning, among other things, compensation of the Board.
Prior to the completion of the IPO on July 1,
Units;
2019 Annual and Long-Term Incentive Plans
An aggregate
Name | | | Title | | | 2019 Annual Award Target | | | Number of Target Annual Award Units | | | 2019 Long- Term Award Target | | | Number of Target Long- Term Award Units | | ||||||||||||
Jeffrey Busch | | | Chairman, CEO and President | | | | $ | 180,000 | | | | | | 17,875 | | | | | $ | 230,000 | | | | | | 22,985 | | |
Robert Kiernan | | | CFO and Treasurer | | | | $ | 150,000 | | | | | | 14,896 | | | | | $ | 160,000 | | | | | | 15,990 | | |
Alfonzo Leon | | | Chief Investment Officer | | | | $ | 150,000 | | | | | | 14,896 | | | | | $ | 210,000 | | | | | | 20,987 | | |
Jamie Barber | | | General Counsel and Secretary | | | | $ | 120,000 | | | | | | 11,917 | | | | | $ | 140,000 | | | | | | 13,991 | | |
Allen Webb | | | SVP — SEC Reporting and Technical Accounting | | | | $ | 110,000 | | | | | | 10,924 | | | | | $ | 130,000 | | | | | | 12,992 | | |
Target No. of LTIP Units | | | Component | | | Performance Goal | | | 2019 Performance Result | |
25% of total Target LTIP Units | | | Acquisitions including (i) closed acquisitions from January 1, 2019 through December 31, 2019 (except those acquisitions covered in (ii) below), and (ii) acquisitions placed under definitive purchase contract on or before December 31, 2019 and closed by February 28, 2020. | | | Threshold: $100 million Target: $150 million Maximum: $200 million | | | $253.5 million 150% of Target LTIP Units earned | |
25% of total Target LTIP Units | | | AFFO per share for the year ended December 31, 2019, as reported by the Company in its year-end earnings announcement. | | | Threshold: $0.78 per share Target: $0.80 per share Maximum: $0.84 per share | | | $0.75 per share 0% of Target LTIP Units earned | |
25% of total Target LTIP Units | | | Average quarterly Consolidated Leverage Ratio (as defined in the Company’s Amended and Restated | | | Threshold: 54.99% Target: 52.50% Maximum: 49.99% | | | 45.0% 150% of Target | |
Target No. of LTIP Units | | | Component | | | Performance Goal | | | 2019 Performance Result | |
| | | Credit Agreement) (based on each fiscal quarter end). | | | | | | LTIP Units earned | |
25% of total Target LTIP Units | | | Discretionary Component | | | Entirely at the discretion of the Committee based on the Committee’s assessment of the Grantee’s individual performance in areas the Committee deems in its discretion to be important based on the Grantee’s job duties and position within the organization. | | | Individually determined based upon an evaluation of the individual performance of each NEO. | |
TSR | | | Percentage of Absolute TSR Component Earned | | |||
Less than 21% | | | | | 0% | | |
21% | | | | | 50% | | |
27% | | | | | 100% | | |
33% or greater | | | | | 200% | | |
Relative Performance | | | Percentage of Relative TSR Component Earned | | |||
TSR below the 35th percentile of the SNL Healthcare REIT Index | | | | | 0% | | |
TSR equal to the 35th percentile of the SNL Healthcare REIT Index | | | | | 50% | | |
TSR equal to the 55th percentile of the SNL Healthcare REIT Index | | | | | 100% | | |
TSR equal to or greater than the 75th percentile of the SNL Healthcare REIT Index | | | | | 200% | | |
Name and Principal Position | | | Year | | | Salary(1) | | | Stock Awards(2) | | | Other(3) | | | Total | | | | | |||||||||||||||
Jeffrey Busch Chairman, CEO and President | | | | | 2019 | | | | | $ | — | | | | | $ | 455,316(4) | | | | | $ | 141,369 | | | | | $ | 596,685 | | | | ||
| | | 2018 | | | | | $ | — | | | | | $ | 395,978(5) | | | | | $ | 110,668 | | | | | $ | 506,646 | | | | ||||
| | | 2017 | | | | | $ | — | | | | | $ | 610,007(6) | | | | | $ | 62,950 | | | | | $ | 672,957 | | | | ||||
Robert Kiernan CFO and Treasurer | | | | | 2019 | | | | | $ | — | | | | | $ | 322,723(7) | | | | | $ | 54,264 | | | | | $ | 376,988 | | | | ||
| | | 2018 | | | | | $ | — | | | | | $ | 415,983(8) | | | | | $ | 24,522 | | | | | $ | 440,504 | | | | ||||
| | | 2017 | | | | | $ | — | | | | | $ | 155,062(9) | | | | | $ | 1,195 | | | | | $ | 156,257 | | | | ||||
Alfonzo Leon CIO | | | | | 2019 | | | | | $ | — | | | | | $ | 391,475(10) | | | | | $ | 64,828 | | | | | $ | 456,304 | | | | ||
| | | 2018 | | | | | $ | — | | | | | $ | 324,983(11) | | | | | $ | 42,558 | | | | | $ | 367,542 | | | | ||||
| | | 2017 | | | | | $ | — | | | | | $ | 192,492(12) | | | | | $ | 23,819 | | | | | $ | 216,312 | | | | ||||
Jamie Barber General Counsel and Secretary | | | | | 2019 | | | | | $ | — | | | | | $ | 287,696(13) | | | | | $ | 44,469 | | | | | $ | 332,165 | | | | ||
| | | 2018 | | | | | $ | 44,355(14) | | | | | $ | 351,984(15) | | | | | $ | 23,670 | | | | | $ | 420,009 | | | | ||||
| | | 2017 | | | | | $ | 80,645(14) | | | | | $ | 179,998(16) | | | | | $ | 2,092 | | | | | $ | 262,735 | | | | ||||
Allen Webb Senior Vice President – SEC Reporting and Technical Accounting | | | | | 2019 | | | | | $ | — | | | | | $ | 264,879(17) | | | | | $ | 49,693 | | | | | $ | 314,572 | | | | ||
| | | 2018 | | | | | $ | — | | | | | $ | 217,344(18) | | | | | $ | 35,806 | | | | | $ | 253,150 | | | | ||||
| | | 2017 | | | | | $ | — | | | | | $ | 170,004(19) | | | | | $ | 20,344 | | | | | $ | 190,348 | | | |
Name | | | Type of Award | | | Grant Date | | | Date of Board Approval | | | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares or Units of Stock | | | Grant Date Fair Value(2) | | |||||||||||||||||||||
| Threshold | | | Target | | | Maximum | | ||||||||||||||||||||||||||||||||
Jeffrey Busch | | | LTIP Units | | | March 5, 2019 | | | March 5, 2019 | | | | | 15,862 | | | | | | 31,724 | | | | | | 54,511 | | | | | | 13,636(3) | | | | | $ | 455,316 | | |
Robert Kiernan | | | LTIP Units | | | March 5, 2019 | | | March 5, 2019 | | | | | 12,265 | | | | | | 24,530 | | | | | | 41,612 | | | | | | 9,606(3) | | | | | $ | 342,735 | | |
Alfonzo Leon | | | LTIP Units | | | March 5, 2019 | | | March 5, 2019 | | | | | 13,771 | | | | | | 27,541 | | | | | | 47,634 | | | | | | 11,467(3) | | | | | $ | 391,475 | | |
Jamie Barber | | | LTIP Units | | | March 5, 2019 | | | March 5, 2019 | | | | | 10,174 | | | | | | 20,347 | | | | | | 34,736 | | | | | | 8,311(3) | | | | | $ | 287,696 | | |
Allen Webb | | | LTIP Units | | | March 5, 2019 | | | March 5, 2019 | | | | | 9,376 | | | | | | 18,752 | | | | | | 32,042 | | | | | | 7,634(3) | | | | | $ | 264,879 | | |
| | | Stock Awards | | |||||||||||||||||||||
Name | | | Number of Shares or Units of Stock That Have Not Vested | | | Market Value of Shares or Units of Stock That Have Not Vested(1) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Yet Vested | | | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Yet Vested(1) | | ||||||||||||
Jeffrey Busch | | | | | 29,318(2) | | | | | $ | 387,873 | | | | | | 137,203(3) | | | | | $ | 1,815,196 | | |
Robert Kiernan | | | | | 42,650(4) | | | | | $ | 564,253 | | | | | | 84,066(5) | | | | | $ | 1,112,193 | | |
Alfonzo Leon | | | | | 24,380(6) | | | | | $ | 322,552 | | | | | | 102,900(7) | | | | | $ | 1,361,367 | | |
Jamie Barber | | | | | 35,151(8) | | | | | $ | 465,043 | | | | | | 67,291(9) | | | | | $ | 890,260 | | |
Allen Webb | | | | | 15,712(10) | | | | | $ | 207,868 | | | | | | 69,140(11) | | | | | $ | 914,722 | | |
| | | Stock Awards | | |||||||||
Name | | | Number of Shares Acquired on Vesting | | | Value Realized on Vesting(1) | | ||||||
Jeffrey Busch | | | | | 137,016(2) | | | | | $ | 1,812,725 | | |
Robert Kiernan | | | | | 17,626(3) | | | | | $ | 233,196 | | |
Alfonzo Leon | | | | | 49,948(4) | | | | | $ | 660,811 | | |
Jamie Barber | | | | | 15,857(5) | | | | | $ | 209,785 | | |
Allen Webb | | | | | 41,540(6) | | | | | $ | 549,571 | | |
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Name and Principal Position | Year | Salary ($) | Stock Awards(1) ($) | Other | Total ($) | |||||||||||||||
Jeffrey Busch President, Chairman | 2016 | — | $ | 780,016 | (2) | — | $ | 780,016 | ||||||||||||
2015 | — | — | — | — | ||||||||||||||||
David A. Young Chief Executive Officer, Director | 2016 | — | $ | 955,011 | (3) | — | $ | 955,011 | ||||||||||||
2015 | — | — | — | — | ||||||||||||||||
Donald McClure Chief Financial Officer | 2016 | — | $ | 300,010 | (4) | — | $ | 300,010 | ||||||||||||
2015 | — | — | — | — |
(b) Individuals who constitute incumbent Directors at the beginning of any two-consecutive-year period, together with any new incumbent Directors who become members of the Board during such two-year period, cease to be a majority of the Board at the end of such two-year period.
(or the analogous governing body) of the entity resulting from such Business Combination (the “
Successor Entity”) (or, if applicable, the ultimate parent entity that directly or indirectly has beneficial ownership of sufficient voting securities to elect a majority of the members of the Board of Directors (or the analogous governing body) of the Successor Entity (the “Parent Company”));Name | | | Stock Awards | | | Total(1) | | ||||||
Jeffrey Busch | | | | | 29,318(2) | | | | | $ | 387,873 | | |
Robert Kiernan | | | | | 42,650(3) | | | | | $ | 564,253 | | |
Alfonzo Leon | | | | | 24,380(4) | | | | | $ | 322,552 | | |
Jamie Barber | | | | | 35,151(5) | | | | | $ | 465,043 | | |
Allen Webb | | | | | 15,712(6) | | | | | $ | 207,868 | | |
Name | | | Stock Awards | | | Total(1) | | ||||||
Jeffrey Busch | | | | | 125,383(2) | | | | | $ | 1,658,819 | | |
Robert Kiernan | | | | | 94,700(3) | | | | | $ | 1,252,878 | | |
Alfonzo Leon | | | | | 90,892(4) | | | | | $ | 1,202,497 | | |
Jamie Barber | | | | | 77,243(5) | | | | | $ | 1,021,926 | | |
Allen Webb | | | | | 62,192(6) | | | | | $ | 822,796 | | |
Plan Category | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | | Weighted-average exercise price of our outstanding options, warrants and rights (b) | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c)) | | |||||||||
Equity compensation plans approved by security holders | | | | | 1,577,734(1)(2) | | | | | | N/A | | | | | | 654,633(2) | | |
Name | | | Fees Earned or Paid in Cash(1) | | | Stock Awards(2) | | | All Other Compensation(3) | | | Total | | ||||||||||||
Henry Cole(4) | | | | $ | 65,810 | | | | | $ | 40,000 | | | | | $ | 9,022 | | | | | $ | 114,832 | | |
Matthew L. Cypher Ph.D(5) | | | | $ | 55,839 | | | | | $ | 40,000 | | | | | $ | 9,022 | | | | | $ | 104,861 | | |
Ronald Marston(6) | | | | $ | 56,526 | | | | | $ | 40,000 | | | | | $ | 9,022 | | | | | $ | 105,548 | | |
Dr. Roscoe Moore(7) | | | | $ | 46,473 | | | | | $ | 40,000 | | | | | $ | 5,455 | | | | | $ | 91,928 | | |
Zhang Jingguo | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Zhang Huiqi(8) | | | | $ | — | | | | | $ | — | | | | | $ | 24,000 | | | | | $ | 24,000 | | |
Lori Wittman(9) | | | | $ | 59,664 | | | | | $ | 40,000 | | | | | $ | 4,266 | | | | | $ | 103,930 | | |
Paula Crowley(10) | | | | $ | 52,542 | | | | | $ | 40,000 | | | | | $ | 4,220 | | | | | $ | 96,762 | | |
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Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Total ($) | |||||||||
Huang Yanping(3) | — | — | — | |||||||||
Qin Yufei(4) | — | $ | 100,000 | (5) | $ | 100,000 | ||||||
Henry Cole | $ | 10,000 | $ | 27,500 | (6) | $ | 37,500 | |||||
Matthew L. Cypher | $ | 12,500 | $ | 27,500 | (6) | $ | 40,000 | |||||
Kurt R. Harrington | $ | 12,500 | $ | 27,500 | (6) | $ | 40,000 | |||||
Zhang Jingguo | — | — | — | |||||||||
Ronald Marston | $ | 10,000 | $ | 27,500 | (6) | $ | 37,500 | |||||
Dr. Roscoe Moore | $ | 12,500 | $ | 27,500 | (6) | $ | 40,000 | |||||
Zhang Huiqi | — | $ | 300,000 | (5) | $ | 300,000 |
(1) Represents the annual retainer fees. (2) The number of LTIP Units comprising each LTIP award was based on a price of $10.80 per unit, which was the 10-day volume weighted average price of the Company’s common stock as of May 29, 2019, the date of grant. The stock award values disclosed in this director compensation table are based on market values of the Company’s common stock at the time of grant, which differ from the values calculated in accordance with |
During 2016, subsequent to the closing of the IPO, we paid our independent directors a pro-rated annual fee of $20,000 for attendance, in person or by telephone, at meetings of the Board and its committees. We paid additional pro-rated compensation of $5,000 to Mr. Harrington for serving as the chairman of the Audit Committee, $5,000 to Mr. Marston for serving as the chairman of the Nominating and Corporate Governance Committee, $5,000 to Dr. Moore for serving as the chairman of the Compensation Committee, and $5,000 to Mr. Cypher for serving as the chairman of the Investment Committee of our Board. In addition, in 2016 we made annual LTIP unit awards to our independent directors and expect to make annual LTIP unit awards to our independent directors in the future. We also reimburse our directors for reasonable travel expenses and out-of-pocket expenses incurred in connection with their activities on our behalf. These reimbursements are not reflected in the table above.
The Company did not pay any compensation to its directors in 2016 prior to its July 1, 2016 IPO; however, on February 28, 2017, the Board approved a one-time cash fee to the independent directors who were appointed to serve as directors prior to the closing date of the IPO in an amount equal to (i) $15,000 for the first of such independent directors to be appointed as a director of the Company and (ii) a pro rata amount of $15,000 for the independent directors appointed as directors of the Company after the first such independent director was appointed based on the number of calendar days served from appointment through the closing date of the IPO relative to the total number of days served by the first such director to be appointed through the closing date of the IPO. Mr. Cole, Mr. Marston and Dr. Moore each received a payment of $15,000 and Mr. Cypher and Mr. Harrington each received a payment of $4,353. These one-time cash fees, while relating to service provided to the Company during the portion of the 2016 fiscal year ended on July 1, 2016, were approved and paid in 2017 and are therefore deemed to be compensation for the year ended December 31, 2017. Accordingly, these amounts will be included in the 2017 director compensation.
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Name | Number of shares or units of stock that have not vested (#) | Market value of shares or units of stock that have not vested ($)(1) | ||||||
David A. Young | 59,973 | $ | 595,011 | |||||
Jeffrey Busch | 50,688 | $ | 500,016 | |||||
Henry Cole | 2,750 | $ | 27,500 | |||||
Matthew L. Cypher | 2,750 | $ | 27,500 | |||||
Kurt R. Harrington | 2,750 | $ | 27,500 | |||||
Zhang Jingguo | — | — | ||||||
Ronald Marston | 2,750 | $ | 27,500 | |||||
Dr. Roscoe Moore | 2,750 | $ | 27,500 | |||||
Zhang Huiqi | 18,000 | $ | 180,000 | |||||
Qin Yuifei | 6,000 | $ | 60,000 |
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and persons who beneficially own more than 10% of our outstanding common stock to file with the SEC initial reports of ownership and reports of changes in their ownership of our common stock. Directors, executive officers and greater than 10% stockholders are required by SEC regulations to furnish us with copies of the forms they file. To our knowledge, based solely on a review of the copies of such reports furnished to us, during the fiscal year ended December 31, 2019. See Note 7 — 2016 Equity Incentive Plan in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
On November 10, 2014, the Company entered into a management agreement, with an effective date of April 1, 2014, with the and our Former Advisor, an affiliate of the Company.through IAGH, was jointly owned by Zensun Enterprises Limited (formerly ZH International Holdings, Limited (formerly known as Heng Fai Enterprises, Ltd.), a Hong Kong limited company that is engaged in real estate development, investments, managementLtd) (85% ownership interest) and sales, hospitality managementMr. Jeffrey Busch, our Chairman, Chief Executive Officer and investments and REIT management, is the 85% ownerPresident (the remaining 15% ownership interest). A special committee of the Advisor. ZH International Holdings Limited owns ZH USA, LLC, a related partyBoard of Directors, consisting solely of independent and the Company’s former (pre IPO) majority stockholder. Under the terms of this initial management agreement, the Advisor is responsible for designing and implementing the Company’s business strategy and administering its business activities and day-to-day operations. For performing these services, the Company was obligated under the initial management agreement to pay the Advisor a base management fee equal to the greater of (a) 2.0% per annum of the Company’s net asset valuedisinterested directors (the value of the Company’s assets less the value of the Company’s liabilities)“
Upon completionSellers, including regarding organization and good standing, power and authority, capitalization and ownership, financial statements and liabilities, litigation, compliance with laws, absence of changes, taxes, material contracts, employee matters, real properties, intellectual property, affiliate transactions and brokerage arrangements. The representations and warranties of the Company’s IPO on July 1, 2016,parties in the Stock Purchase Agreement survive the closing of the Internalization for a period of eighteen (18) months, except that (i) Seller fundamental representations shall survive for 10 years and (ii) tax-related representations and warranties survive for sixty (60) days after the expiration of the applicable statute of limitations.
The
the IPO, or in any subsequent offering (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), less (b) any amount that the Company pays to repurchase shares of its common stock or equity securities of the operating partnership. Stockholders’ equity also excludes (1) any unrealized gains and losses and other non-cash items (including depreciation and amortization) that have impacted stockholders’ equity as reported in the Company’s financial statements prepared in accordance with GAAP, and (2) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above, in each case after discussions between the Former Advisor and its independent directors and approval by a majority of the Company’s independent directors. As a result, the Company’s stockholders’ equity, for purposes of calculating the base management fee, could behave been greater or less than the amount of stockholders’ equity shown on its financial statements.
The
AFFO is calculated by adjusting the Company’s funds from operations, or FFO, by adding back acquisition and disposition costs, stock basedstock-based compensation expenses, amortization of deferred financing costs and any other non-recurring or non-cash expenses, which are costs that do not relate to the operating performance of the Company’s properties, and subtracting loss on extinguishment of debt, straight linestraight-line rent adjustment, recurring tenant improvements, recurring leasing commissions and recurring capital expenditures.
In
The Company received funds from its related party ZH USA, LLC in the form of convertible interest bearing notes (8% per annum, payable in arrears) due on demand unsecured debt (the “Convertible Debenture”). Under the terms of the Convertible Debenture,2017, the Company could prepay the notes at any time, in whole or in part. Additionally, ZH USA, LLC could elect to convert all orreimbursed our Former Advisor $44,355 and $80,645, respectively, for a portion of our General Counsel and Secretary’s salary for 2018 and 2017, as discussed below. The Company did not reimburse our Former Advisor for any of our General Counsel and Secretary’s salary in 2019.
On March 2, 2016, ZH USA, LLC converted $15,000,000 of principal under the Convertible Debenture into 1,176,656 sharesannual salary of the Company’s then unregistered common stock based on a conversion rate of $12.748 per share.
On June 15, 2016, in anticipation of its IPO, the Company entered into a Pay-Off LetterGeneral Counsel and Conversion Agreement (the “Pay-Off Letter and Conversion Agreement”) with ZH USA, LLC with regards to the Convertible Debenture. Under the termsSecretary. The term of the Pay-Off Letteragreement expired on May 8, 2018 and Conversion Agreement, upon the closing date of the IPO on July 1, 2016, ZH USA, LLC converted $15,030,134 of the principal under the Convertible Debenture into 1,179,019 shares of the Company’s registered common stock based on a conversion rate of $12.748 per share. Additionally, in accordance with the Pay-Off Letter and Conversion Agreement, on July 8, 2016 the Company paid off the remaining principal amount of $10,000,000 outstanding under the Convertible Debenture.
On July 8, 2016, also in accordance with the Pay-Off Letter and Conversion Agreement, the Company paid all accrued interest owed and outstanding on the Convertible Debentures in the amount of $1,716,811.
During the year ended December 31, 2016, the Company received total funds in the amount of $450,000 in the form of an interest bearing note payable from a related party. The note incurred interest at 4% per annum andagreement was due on demand. Interest expense incurred on this note was $10,284 for the year ended December 31, 2016. This note was paid in full with a payment of $450,000 during the year ended December 31, 2016.
During the year ended December 31, 2015, the Company received funds in the amount of $382,805 from ZH USA, LLC in the form of a non-interest bearing due on demand note payable. No funds were received from ZH USA, LLC during the year ended December 31, 2016. The balance from this related party loan was $421,000 as of December 31, 2016 and December 31, 2015, respectively.
On June 7, 2016, the Company received an interest free loan from ZH USA, LLC in the principal amount of $1.5 million, which was repaid in full on July 8, 2016, using a portion of the proceeds from the IPO.
Additionally, under our Code of Business Conduct and Ethics, related party transactions are subject to appropriate review and oversight by the Board’s Audit Committee.
The Audit Committee of our Board of Directors has selected the accounting firm of MaloneBailey to serve as our independent registered public accountants for the year ending December 31, 2017, subject to ratification of this appointment by our stockholders. MaloneBailey has served as our independent registered public accountants since September 22, 2011 and is considered by our management to be well qualified.
| | | Year Ended December 31, 2019 | | | Year Ended December 31, 2018 | | ||||||
MaloneBailey: | | | | | | | | | | | | | |
Audit Fees | | | | $ | 86,378 | | | | | $ | 514,253 | | |
Audit-Related Fees | | | | | — | | | | | | 17,500 | | |
Tax Fees | | | | | — | | | | | | — | | |
All Other Fees | | | | | — | | | | | | — | | |
Total | | | | $ | 86,378 | | | | | $ | 531,753 | | |
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Year Ended December 31, 2016 | Year Ended December 31, 2015 | |||||||
MaloneBailey: | ||||||||
Audit Fees | $ | 350,000 | (1) | $ | 65,000 | |||
Audit-Related Fees | — | — | ||||||
Tax Fees | — | — | ||||||
All Other Fees | — | — | ||||||
Total | $ | 350,000 | $ | 65,000 |
| | | Year Ended December 31, 2019 | | |||
Deloitte: | | | | | | | |
Audit Fees | | | | $ | 483,341 | | |
Audit-Related Fees | | | | | 50,000 | | |
Tax Fees | | | | | — | | |
All Other Fees | | | | | — | | |
Total | | | | $ | 533,341 | | |
The Audit Committee has considered whether, and has determined that, the provision by MaloneBailey of the services described under “Audit-Related Fees,” “Tax Fees” and “Other Fees” is compatible with maintaining MaloneBailey’s independence from management and the Company.
Included with these proxy materials