SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Comstock Holding Companies, Inc.
(Name of Registrant as Specified In Its Charter)
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COMSTOCK HOLDING COMPANIES, INC.
April 29, 2016
Dear Stockholder:
You are cordially invited to attend the annual meeting of stockholders of Comstock Holding Companies, Inc. (the “Company”) to be held at 10:00 a.m. local time, on June 16, 2016, at our principal executive offices at 1886
1900 Reston Metro Center Drive, Reston, Virginia 20190.At the annual meeting, you will be asked to: (i) elect three directors to each serve for a three-year term expiring at the 2019 annual meeting of stockholders or until their successors are duly elected and qualified or until their earlier resignation or removal; (ii) ratify the appointment of our independent registered public accounting firm for 2016; (iii) approve, on a non- binding, advisory basis, the 2015 compensation of our named executive officers (referred to as a “say-on-pay” vote); and (iv) transact any other business that may come before the meeting.
Details regarding the matters to be acted upon at the annual meeting appear in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement. Our Board of Directors unanimously recommends that stockholders vote in favor of each of these proposals.
Whether or not you plan to attend the annual meeting, we urge you to complete, sign and date the accompanying proxy card and return it in the enclosed postage-prepaid envelope as soon as possible so that your shares will be represented at the annual meeting. If you later decide to attend the annual meeting in person or change your vote, you may withdraw your proxy and vote in person at the annual meeting. Voting by written proxy will ensure your representation at the annual meeting if you do not attend in person.
We thank you for your continued support and look forward to seeing you at the annual meeting.
Very truly yours,
Christopher Clemente
Chief Executive Officer and Chairman
COMSTOCK HOLDING COMPANIES, INC.
1886 Metro Center Drive, 4thPlaza, 10
th Floor Reston, Virginia 20190
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 16, 201615, 2022
The Annual Meeting of Stockholders of Comstock Holding Companies, Inc., a Delaware corporation, will be held at 10:9:00 a.m., local time, on June 16, 2016,15, 2022 at our principal executive offices at 1886the 1900 Reston Metro Plaza, 2nd Floor Conference Center, Drive, Reston, Virginia 20190,20190. If you have difficulty locating the Conference Center, please call 703-230-1985.
The meeting is being held for the following purposes:
1.To elect three directorsone director to each serve for a three-year term expiring at the 20192025 annual meeting of stockholders or until their successors arehis successor is duly elected and qualified or until theirhis earlier resignation or removal; 2.To ratify the appointment of BDO USA,Grant Thornton, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016;2022;
3.To cast a non-binding, advisory vote to approve the 20152021 compensation of our named executive officers; and 4.To transact any other business that may properly come before the meeting or any adjournment thereof. These items of business are more fully described in the proxy statement accompanying this Notice. Only stockholders of record at the close of business on May
11, 20166, 2022 are entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting and vote in person. To assure your representation at the meeting, however, you are urged to mark, sign, date, and return the enclosed proxy card as promptly as possible in the postage-prepaid envelope enclosed for that purpose. You may vote
in person atduring the meeting even if you have previously returned a proxy card.
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| | | | Sincerely, |
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| Reston, Virginia | | | | Jubal R. Thompson |
April 29, 2016 | May 2, 2022 | | | | General Counsel and Secretary |
COMSTOCK HOLDING COMPANIES, INC.
1886
1900 Reston Metro Center Drive, 4thPlaza, 10th Floor The enclosed proxy is solicited on behalf of Comstock Holding Companies, Inc., a Delaware corporation (the “Company” or “us”), by our Board of Directors (the “Board”) for use at our Annual Meeting of Stockholders to be held on June 16, 201615, 2022 at 10:9:00 a.m., local time, or at any adjournment thereof, for the purposes set forth in this proxy statement and in the accompanying Notice of Annual Meeting of Stockholders. TheThis year’s meeting will be held at our principal executive officesthe Conference Center at Reston Station, located at 18861900 Reston Metro Center Drive,Plaza, 2nd Floor, Reston, Virginia 20190. If you need directions to the meeting, please contact Judy WhitakerDenise Pattakos at 703-883-1700.703-230-1985.
This proxy statement and form of proxy are first being mailed on or about May
20, 201612, 2022 to all stockholders entitled to vote at the meeting.
Voting Securities and Voting Rights
Stockholders of record at the close of business on May
11, 2016,6, 2022, which we have set as the record date, are entitled to notice of and to vote at the meeting.
On the record date,The Company anticipates there
werewill be 8,284,851 issued and
8,111,545 outstanding
3,012,360 shares of our Class A common stock and
390,500220,250 shares of our Class B common
stock.stock outstanding on the record date. Each holder of our Class A common stock voting at the meeting, either in person or by proxy, may cast one vote per share of Class A common stock held on all matters to be voted on at the meeting. Each holder of our Class B common stock voting at the meeting, either in person or by proxy, may cast 15 votes per share of Class B common stock held on all matters to be voted on at the meeting.
The meeting will be held only if there is a quorum present. A quorum exists only if the holders of a majority of the voting power of the issued and outstanding stock of the Company and entitled to vote at the meeting
areis present in person or represented by proxy at the meeting. Votes cast by proxy or in person at the meeting will be tabulated by the inspector of elections appointed for the meeting and will determine whether a quorum is present. The inspector of elections will treat abstentions and broker non-votes as shares that are present and entitled to vote for purposes of determining the presence of a quorum. Under the rules of the New York Stock Exchange, on certain routine matters, brokers may, at their discretion, vote shares they hold in “street name” on behalf of beneficial owners who have not returned voting instructions to the brokers, so- called “broker non-votes.” In instances where brokers are prohibited from exercising discretionary authority, the shares they hold are not included in the vote totals.
At the meeting, only Proposal 2, the ratification of the appointment of our independent registered public accounting firm, is considered a routine matter. Brokers will be prohibited from exercising discretionary authority with respect to Proposal 1, the election of
directors,a director, and Proposal 3, the non-binding, advisory vote to approve the
2021 compensation of our named executive officers. Therefore, if you hold your shares in the name of a bank, broker or other holder of record, for your vote to be counted in Proposals 1 and 3, you will need to communicate your voting decisions to your bank, broker or other holder of record before the date of the meeting. Because broker non-votes are not voted affirmatively or negatively, they will have no effect on the approval of any of the proposals, except where brokers may exercise their discretion on routine matters.
For Proposal 1, a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote in the election of
directorsa director will be required to elect
each of the
three director
nomineesnominee to
each serve for a three-year term expiring at the
20192025 annual meeting of stockholders or until
their successors arehis successor is duly elected and qualified or until
theirhis earlier resignation or removal. Stockholders may vote “for”
all of the director
nominees, “withhold” authority to vote for all of the nomineesnominee, or “withhold” authority to vote for
any individual nominee but vote for anotherthe nominee.
For Proposal 2, the ratification of the appointment of
BDO USA,Grant Thornton, LLP as our independent registered public accounting
1
firm for the fiscal year ending December 31, 2016,2022, the affirmative vote of the holders of a majority of the voting power of the issued and outstanding stock of the Company entitled to vote on the matter, present and voting, in person or represented by proxy at the meeting, will be required.
Stockholders may vote “for,” “against” or “abstain” from voting on Proposal 2. An abstention will have the effect as a vote “against” this proposal.
For Proposal 3, the non-binding, advisory vote to approve the
2021 compensation of our named executive officers, the affirmative vote of the holders of a majority of the voting power of the issued and outstanding stock of the Company entitled to vote on the matter, present and voting, in person or represented by proxy at the meeting, will be required. Voting for Proposal 3 is being conducted on a
nonbinding,non-binding, advisory basis and, therefore, the voting results will not be binding on the Company, our Board or our Compensation Committee although our Compensation Committee and Board will consider the results of the voting on this proposal for future executive compensation decisions.
Stockholders may vote “for,” “against” or “abstain” from voting on Proposals 2 andProposal 3. An abstention will not be considered “voting” onhave the effect as a particular proposal and a proxy marked “abstain” with respect to any proposal will not have any effect on the outcome of the vote on that“against” this proposal.
Whether or not a person plans to attend the meeting, such person may vote by completing, signing and dating the accompanying proxy card and returning it in the postage-prepaid envelope enclosed for that purpose. If a person attends the meeting, they may vote in person even if such person had previously returned a proxy card.
When a proxy card is properly executed and returned, the shares it represents will be voted at the meeting as directed. If no specification is indicated, the shares will be voted (1) “for” the election of
each of the director
nomineesnominee set forth in this proxy statement, (2) “for” the ratification of the appointment of
BDO USA,Grant Thornton, LLP as our independent registered public accounting firm for the fiscal year ending December 31,
2016,2022, and (3) “for” the non-binding, advisory vote to approve the
20152021 compensation of our named executive officers.
Any person giving a proxy may revoke the proxy at any time before its use by delivering to us either a written notice of revocation or a duly executed proxy bearing a later date or by attending the meeting and voting in person.
This solicitation is being made by us and will be paid for by
us.the Company. In addition, we may reimburse brokerage firms and other persons representing beneficial owners of shares for expenses incurred in forwarding solicitation materials to such beneficial owners. Proxies also may be solicited by certain of our directors and officers, personally or by telephone or e-mail, without
additional compensation.compensation for the solicitation.
Deadline for Receipt of Stockholder Proposals
For Inclusion in Next Year's Proxy Statement
Proposals of stockholders intended for inclusion in the proxy statement to be furnished to all stockholders entitled to vote at our
20172023 annual meeting of stockholders, pursuant to Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act, by the Securities and Exchange Commission (“SEC”) must be received at our principal executive offices not later than January
20, 2017,12, 2023, which is 120 days prior to the first anniversary of the mailing date of this proxy statement. Any proposal must comply with the requirements as to form and substance established by the SEC for such proposal to be included in our proxy statement.
Under our bylaws, stockholders who wish to submit a proposal at the 20172023 annual meeting, other than one that will be included in our proxy statement, must notify usdeliver such proposal to the Secretary our principal executive offices between February 16, 201715, 2023 and March 18, 2017, unless17, 2023, unless the date of the 20172023 annual meeting of the stockholders is more than 30 days before or more than 60 days after the one-year anniversary of the 20162022 annual meeting. If a stockholder who wishes to present a proposal fails to notify us by January 20, 2017in the appropriate time frame and such proposal is brought before the 20172023 annual meeting, then under the SEC’s proxy rules, the proxies solicited by management with respect to the 20172023 annual meeting will confer discretionary voting authority with respect to the stockholder’s proposal on the persons selected by management to vote the proxies. If a stockholder makes a timely notification, the proxies may still exercise discretionary voting authority under circumstances consistent with the SEC’s proxy rules. Stockholders should submit their proposals to Comstock Holding Companies, Inc., 18861900 Reston Metro Center Drive, 4thPlaza, 10th Floor, Reston, Virginia 20190, Attention: Corporate Secretary.
Annual Report on Form 10-K
We will provide, without charge, additional copies of our annual report on Form 10-K for the year ended December 31,
2
2015 2021 as filed with the SEC to each stockholder of record as of the record date that requests a copy in writing. Any exhibits listed in our Annual Report on Form 10-K will also be furnished upon request at the actual expense we incur in furnishing such exhibit. Any such requests should be directed to our Company’s secretarySecretary at our principal executive office set forth in this proxy statement.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE
20162022 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE
16, 201615, 2022
This proxy statement and our
20152021 Annual Report on Form 10-K to stockholders are available
atwww.comstockhomes.com/www.comstockcompanies.com/proxymaterial.
ELECTION OF DIRECTORS
Nominees
Nominee
Our Amended and Restated Certificate of Incorporation and bylaws provide that the number of our directors shall be fixed from time to time by resolution of our Board. Presently, the number of directors is fixed at eightat seven, and that number as of directorsMay 2, 2022, the Board has one director vacancy. Our Board is divided into three classes, with one class standing for election each year for a three-year term. At each annual meeting of stockholders, directors of a particular class will be elected for three-year terms to succeed the directors of that class whose terms are expiring. Christopher Clemente A. Clayton Perfall, and Joseph M. Squeri areis in the class of directors whose term expires at the 20162022 annual meeting of stockholders, and Messrs.Mr. Clemente Perfall, and Squeri have eachhas been nominated by our Board for re-election at the meeting each for a three-year term expiring at the 20192025 annual meeting of stockholders. David M.A. Guernsey, James A. MacCutcheon, and Robert P. Pincus are in the class of directors whose terms expireterm expires at the 20172023 annual meeting of stockholders. Norman D. ChiriteSocrates Verses and Socrates VersesIvy Zelman are in the class of directors whose terms expireterm expires at the 20182024 annual meeting of stockholders. Unless otherwise instructed, the proxy holders will vote the proxies received by them for
each of the
nomineesnominee named above. In the event that
anythe nominee is unable or declines to serve as a director at the time of the meeting, the proxies will be voted for any nominee designated by the current Board to fill the vacancy. It is not expected that
anythe nominee will be unable or will decline to serve as a director.
The Board recommends a vote “FOR”
each of the
nomineesnominee named in this proxy statement.
Nominees for Director
Nominee Standing for Election in
20162022
Christopher Clemente,
56,62, has been a member of our Board since May 2004. He founded the Company in 1985 and since 1992 he has served as our Chairman and Chief Executive Officer. Mr. Clemente has over
2530 years of experience in all aspects of
residential and commercial real estate development and
home building, and over
3035 years of experience as an entrepreneur. The
BoardCompany believes that Mr. Clemente’s position as our Chief Executive Officer, his success as an entrepreneur and his depth of skill and experience in
residential and commercial real estate development
and home building qualifies him to serve as a member of our Board and supports his re-election to our Board.
A. Clayton Perfall, 57, has been a member of our Board since December 2004 and is a member and Chairman of the Audit Committee of our Board. He currently serves as the Operating Executive of Tailwind Capital, a private equity fund manager focused on growing middle market companies in the healthcare and business and communications services sectors. Mr. Perfall previously served as the Chairman and Chief Executive Officer of Archway Marketing Services, Inc., a provider of outsourced marketing operations management services, a role he held from 2008 through 2013. Since September 2010, Mr. Perfall has served as the audit committee chairman for Colfax Corporation. Mr. Perfall also served as director and chair
of the Audit Committee of InVentiv Health, Inc. from 1999 through August 2010. From October 2001 through October 2008, Mr. Perfall served as Chief Executive Officer and member of the Board of Directors of AHL Services, Inc. Mr. Perfall served as President and Chief Executive Officer and member of the Board of Directors of Union Street Acquisition Corp. from July
2006 through September 2008. From September 1996 through September 2000, Mr. Perfall served as Chief Financial Officer of Snyder Communications, Inc. and was a partner with Arthur Andersen LLP prior to that. Mr. Perfall received his BBA from the College of William & Mary. The Board believes that Mr. Perfall’s significant executive-level experience, and corporate finance and public accounting background, qualifies him to serve as a member of our Board and supports his re-election to our Board.
Joseph M. Squeri, 50, has been a member of our Board since October 2015. He currently serves as the Managing Director with SunBridge Capital Management, LLC, a private investment management firm supported by the Bainum family, a prominent Washington, DC, family with investment interests that include Choice Hotels International (NYSE: CHH) and the Company. Mr. Squeri previously served as the Chief Financial Officer of the Company from August 2010 through November 2015. From October 2008 through August 2010, Mr. Squeri served as the Executive Vice President-Chief Financial Officer and Treasurer of Federal Realty Investment Trust (NYSE: FRT) with responsibility for capital markets, financial reporting and investor relations functions. From 1997 through 2007, Mr. Squeri served in a variety of positions at Choice Hotels International (NYSE: CHH), including Chief Financial Officer starting in 1999, and then more significant roles culminating with his position as President and Chief Operating Officer. Mr. Squeri is a certified public accountant. The Board believes that Mr. Squeri’s significant executive-level and corporate finance experience, together with his experience at the Company, qualifies him to serve as a member of our Board and supports his re-election to our Board.
4
Continuing Directors with Terms
Expiringexpiring in
20172023
David M. Guernsey,
68,74, has been a member of our Board since December 2004 and is a member of the
Audit Committee and Compensation
Committee of our Board.Committee. Mr. Guernsey is
the founder and CEO of Guernsey,
Office Products, Inc.Incorporated (“Guernsey”), one of the largest independent
officesuppliers of products
dealersfor the workplace in the United
States.States, including, without limitation, Healthcare, Industrial, Traditional Office, and Educational workplaces. Guernsey’s Interiors by Guernsey division offers furniture for every workplace, including, without limitation, design, assembly, delivery and installation services. Previously, Mr. Guernsey
served as Vice-Chairman of Virginia Commerce Bank, which was acquired by United Bank in 2014, and is
ona former Chairman of the
National Board of The National Federation of Independent Business (NFIB)
serving as Chairman. NFIB is the nation’s largest member based small business association.. Mr. Guernsey
has servedcurrently serves on the
boardRegion Seven Council for GO Virginia (a Virginia state initiative), on the Board of
the Northern Virginia
Chamber of Commerce
Bancorp, Inc. since 1989, currently serving as Chairman.and on the Board of the Northern Virginia Transportation Alliance. The
BoardCompany believes that Mr. Guernsey’s extensive experience with public companies, broad management and market expertise and his success as an entrepreneur qualifies him to serve as a member of our Board.
James A. MacCutcheon, 64,69, has been a member of our Board since December 2004 and is a member and Chairman of the Audit Committee and a member of our Board.the Compensation Committee. Mr. MacCutcheon is a private investor and advisor to public and private businesses. Mr. MacCutcheon served on the Board of Directors of SunBridge Capital Management, LLC from 2008 to April 2014 and served as the President and Chief Executive Officer of Sunburst Hospitality Corporation from September 2000 until July 2007, and2007. Among his philanthropic activities, Mr. MacCutcheon has previously served as Sunburst Hospitality Corporation’s Executive Vice PresidentChairman of Children’s National Medical Center and Chief Financial Officer from 1997 to 2000. Sunburst was taken private in a transaction led byChairman of its Hospital Board. Mr. MacCutcheon in 2001. Prior to 1997, Mr. MacCutcheon served as Chief Financial Officer for two different public companies and was an audit partner inat a Big 8 publicmajor accounting firm.firm from 1984 through 1987. The BoardCompany believes that Mr. MacCutcheon’s executive management, financial and public
accounting experience, across a variety of industries, adds significant value and diversity of experience to our Board and qualifies him to serve as a member of our Board.
Robert P. Pincus, 69,75, has been a member of our Board since June 2005 and is a member of the Audit Committee of our Board.Committee. Mr. Pincus servesserved as Vice Chairman of EagleBank and Eagle Bancorp, a community business bank located in Bethesda, Maryland.Maryland, from 2008 through 2017. Prior to joining EagleBank in August 2008, upon the acquisition of Fidelity & Trust Financial Corporation (“Fidelity”) and its wholly owned subsidiary, Fidelity & Trust Bank (“F&T Bank”), Mr. Pincus served as Chairman of F&T Bank from 2005. He presently serves as Chairman of the Board of Blackstreet Capital Partners, LP and Chairman of Milestone Merchant Partners, LLC. He was Chairman of the Board of BB&T, D.C. Metro Region, and was Regional President from 1998 to 2002. From 1991 to 1998, Mr. Pincus was President and Chief Executive Officer of Franklin National Bank of Washington, D.C. From 1986 to 1991,until its acquisition by BB&T after which Mr. Pincus continued with BB&T as a Regional President. Mr. Pincus was the regional presidentfurther a Regional President of the D.C. metropolitanMetropolitan region of Sovran Bank. From 1971 to 1986,Bank until its acquisition by Bank of America for whom Mr. Pincus was withserved as a Regional President following the acquisition. During his tenure as a Director on the Boards of 25 non-profit institutions serving disadvantaged children in the greater D.C. National Bancorp, Inc., where he eventually rose to become President and Chief Executive Officer, prior to its merger with Sovran Bank.Metropolitan region, through his numerous efforts Mr. Pincus ishelped to raise over $25 Million for these institutions and the children they serve. Mr. Pincus has further served on the Board of Directors of six for-profit organizations, including the Company. Mr. Pincus was a Trustee of the University of Maryland Foundation, Inc. He Mr. Pincus has previously servedbeen acknowledged by the business community in the D.C. Metropolitan region as CEO of two different community banks and as a senior executive for major regional and national banks. He has a strong background in many facetsEntrepreneur of the financial services industry, as well as mergersYear, Washingtonian of the Year and acquisitions.was elected to the Washington Business Hall of Fame. The BoardCompany believes that Mr. Pincus’ wealth of experience in commercial and investment banking qualifies him to serve as a member of our Board.
Continuing Directors with Terms
Expiringexpiring in
2018Norman D. Chirite, 54, has been a member of our Board and a member of the Compensation Committee of our Board since March 2006. Since October 2006, Mr. Chirite has served as Managing Director for RedZone Capital Management Company, a private investment management company. He served as Executive Vice President and General Counsel of Washington Football Inc. from August 2002 until October 2005. Mr. Chirite previously was a partner at Weil, Gotshal & Manges LLP in New York City, where he practiced corporate law from 1987 until 2000. From 2004 until 2008, Mr. Chirite was a trustee of Connors Brothers Income Fund, a publicly traded Canadian income trust. The Company believes that Mr. Chirite’s extensive background in business and in corporate and securities law qualifies him to serve as a member of our Board.
2024
Socrates Verses,
58,64, has been a member of our Board since June 2005 and is a member and Chairman of the Compensation
Committee of our Board. Since 2009,Committee. He currently serves as a Managing Partner for Bright Peaks Capital, a diversified investment group focused on technology and real estate offerings. For many years, Mr. Verses
has served as the Chief Executive Officer of Netcordant, Inc.,
formerly known as Codekko Software, a web application optimization
company, and co-Chief Executive Officer of MDA360, a data analytics company.
Mr. VersesPrior to that, he was the President and Chief Executive Officer of Realeum, Inc.,
a propertyan asset management and business integration software company, from 2001-2008.
From January 1995 to February 2001, Mr. Verses served as President and a director of Technology Enablers, Inc., an e-services company. From 1987 to 1995, he served as Vice President of Sales for Recognition Equipment Incorporated. The Company believes Mr. Verses’ extensive executive- level experience in technology and business development qualifies him to serve as a member of our Board.
Ivy Zelman, 55, has been a member of our Board since November 2021 and serves as a special independent director to the Company. Ms. Zelman founded Zelman & Associates in 2007, which was acquired by Walker & Dunlop in 2021, resulting in a new joint venture entity, WDIB, LLC in which Ms. Zelman holds a minority interest. Prior to founding Zelman & Associates, Ms. Zelman served as a Managing Director at Credit Suisse First Boston from 1998 to 2007, where she focused on housing-related research. From 1990-1997, Ms. Zelman was an equity research analyst at Salomon Brothers. She is a widely known and respected thought leader on all aspects of the housing spectrum and what the overall housing market means for investors, homebuilders, industry executives and the economy at large. She frequently appears on television shows such as CNBC and in major publications including "The Wall Street Journal", and has acted as a key witness in a congressional hearing. Ms. Zelman's speaking engagements include industry conferences, board meetings, podcasts or special events for organizations such as Bloomberg, CNBC, National Association of Homebuilders, National Association of Realtors, Mortgage Banking Association, Moody's, PropTech, CEO Summet, and more. Most notably, Ms. Zelman was inducted into the Institutional Investors - America Research Team's inaugural Hall of Fame in 2012 as a result of earning eleven first place rankings (1999 through 2004, 2006 through 2007, and 2010 through 2013). Additionally, Hanley Wood, a leading real estate media firm, ranked Ms. Zelman as 14th of the Top 50 most influential persons in housing. In 2020, Ms. Zelman was included in Barron's Top 100 Women in U.S. Finance. The Company believes that Ms. Zelman's extensive executive-level experience in the multi-family and financial industries qualifies her to serve as a member of our Board.
Information Relating to Corporate Governance and the Board
Our Board has determined, after considering all relevant facts and circumstances, that
Messrs. Chirite,Mr. Guernsey,
Mr. MacCutcheon,
Perfall,Mr. Pincus,
Mr. Verses, and
VersesMs. Zelman are independent under the Nasdaq listing standards and the rules and regulations promulgated by the SEC.
Messrs.Mr. Clemente
and Squeri dodoes not qualify as independent because
Mr. Clementehe is currently
an executive officer of the Company and Mr. Squeri was an officer of the
Company within the past three years.Company.
Our bylaws authorize our Board to designate one or more committees, each consisting of one or more directors of the Company. Our Board has established two standing committees: an Audit Committee and a Compensation Committee. The Board does not have a standing nominating committee. It is the Board’s view, given its relatively small size and majority of independent directors, that it isappropriate for it to select or recommend director nominees itself. Each director has the opportunity to suggest a nominee and such suggestions are comprehensively reviewed by the independent directors. Director nominees are recommended for selection by the Board by a majority of the independent directors. Prospective members of the Board must be qualified individuals who, if added to the Board, would provide the mixdiversity of sound business judgment, business experience, corporate perspectives, backgrounds and skills appropriate for the Company. Criteria for selection of candidates include, but are not limited to: (i) business and financial acumen, as determined by the independent directors in their discretion, (ii) qualities reflecting a proven record of accomplishment and ability to work with others, (iii) knowledge of our industry, (iv) relevant experience with and knowledge of corporate governance practices, and (v) expertise in areas relevant to us. Although we do not have a formal diversity policy, the Board considers, among other attributes, diversity of gender, race, ethnicity and religion, professional experience and skills of the director candidates. Such persons should not have commitments that would conflict with the time commitments of being one of our directors. The Board does not have a specific policy for consideration of nominees recommended by security holders because a significant degree of voting control relative to the Company’s outstanding equity securities is maintained by Mr. Clemente, a current
executive officer and director, and Mr. Benson, a former executive officer and director. However, security holders can recommend a prospective nominee for the Board by writing to our corporate secretary at our executive offices and providing the information required by our bylaws, along with any additional supporting materials the security holder considers appropriate. The Board will consider and evaluate nominees suggested by security holders using the criteria described above. There have been no nominees recommended by our stockholders for the
20162022 annual meeting.
In addition to the above procedure, our bylaws provide that a stockholder may propose a director candidate to be considered and voted on at an annual meeting of stockholders by providing notice thereof to our corporate secretary not less than 90 calendar days nor more than 120 calendar days before the first anniversary of the date of the previous
year’s .years’ annual meeting. This notice provided by a stockholder to our corporate secretary must set forth certain information relating to the proposed nominee as required by our bylaws. The chairman of the meeting will determine whether a nomination set forth by such stockholder is in accordance with the procedures set forth in the bylaws and may determine that such nomination is defective and therefore should be disregarded.
We pay no fees to third parties for evaluating or identifying potential nominees.
Our Board has adopted charters for the Audit and Compensation Committees describing the authority and responsibilities delegated to each committee by the Board. Our Board has also adopted Corporate Governance Guidelines, a Code of Conduct, a Code of Ethics for the CEO and Senior Financial Officers, and a Whistleblower Policy. We post on our website, at www.comstockhomebuilding.com,www.comstockcompanies.com, the charters of our Audit and Compensation Committees, our Corporate Governance Guidelines, Code of Conduct, Code of Ethics for the CEO and Senior Financial Officers, and Whistleblower Policy, and any amendments or waivers thereto; and any other corporate governance materials contemplated by SEC regulations or the Nasdaq Market Rules. These documents are also available in print to any stockholder requesting a copy in writing from our corporate secretary at our executive offices set forth in this proxy statement.
In 2021, the Company engaged Ms. Zelman as a special independent director of the Company pursuant to a consultant agreement effective November 3, 2021 (the "Consulting Agreement"). As a special independent director, Ms. Zelman is charged with providing certain consulting services, including, without limitation, introducing potential capital providers in support of the Company's acquisition strategy, evaluation of the Company's overall corporate strategy and long-term business planning, reviewing the Company's balance sheet, including analyzing liquidity needs and leverage ratios, and other services agreed to between the Company and Ms. Zelman. The term of the Consulting Agreement is from November 3, 2021 until the expiration of Ms. Zelman's current term on the Board of Directors (estimated to be June 2024), or until Ms. Zelman no longer serves as a member of the Board. Ms. Zelman’s compensation under the Consulting Agreement is 10,000 shares of restricted stock of the Company
pursuant to the Company’s 2019 Incentive Plan, which restricted stock grant vests in accordance with the separately issued restricted stock unit award certificate, and the payment of $50,000.00 annually for the term of the Consulting Agreement, which will be paid in either cash or in restricted stock units, at Ms. Zelman's election. For calendar years 2021 and 2022, Ms. Zelman elected to receive her monetary compensation under the Consultant Agreement in the form of cash.
Interested parties may communicate with our Board or specific members of our Board, including our independent directors and the members of our various Board committees, by submitting a letter addressed to the Board of Comstock Holding Companies, Inc. c/o any specified individual director or directors at 18861900 Reston Metro Center Drive,Plaza, 10th Floor, Reston, Virginia 20190. All letters received are then forwarded to the indicated directors.directors, committees or full Board, as appropriate.
Board Diversity Matrix
The table below sets forth the diversity statistics for our Board utilizing the standardized Nasdaq board diversity matrix, and the categories referenced in the table have the meanings as defined in Nasdaq Rule 5605(f).
| | | | | | | | | | | |
| Board Diversity Matrix (As of March 16, 2022) |
| Total Number of Directors | 7 (1 Vacancy) |
| Part I: Gender Identity | Female | Male |
| Directors | 1 | 5 |
| Part II: Demographic Background |
| White | 1 | 5 |
The purpose of the Audit Committee is to oversee our accounting and financial reporting processes and the audits of our financial statements. The Audit Committee also provides assistance to our Board with respect to its oversight of the integrity of our financial statements, our compliance with legal and regulatory requirements, the qualifications and independence of our independent registered public accounting firm, and the performance of our independent registered public accounting firm and internal audit function, if any. The primary responsibilities of the Audit Committee are set forth in its charter and include various matters with respect to the oversight of our accounting and financial reporting processes and audits of our financial statements on behalf of our Board. The Audit Committee also selects the independent registered public accounting firm to conduct the annual audit of our financial statements; reviews the proposed scope of such audit; and reviews our accounting and financial controls with the independent registered public accounting firm and our financial accounting staff.
The Audit Committee currently consists of
Messrs.Mr. MacCutcheon,
PerfallMr. Guernsey and
Mr. Pincus, each of whom is
an independent
6
under the Nasdaq listing standards and the rules and regulations promulgated by the SEC, including the heightened standards for Audit Committee members adopted by the SEC pursuant to the Sarbanes-Oxley Act of 2002. The Board has determined that Mr. PerfallMacCutcheon (whose background is detailed above) qualifies as an “audit committee financial expert” in accordance with applicable rules and regulations of the SEC. Mr. PerfallMacCutcheon serves as the Chairman of the Audit Committee.
The Compensation Committee
The purpose of the Compensation Committee includes determining, or recommending to our Board for determination, the compensation of our Chief Executive Officer and other executive officers, and discharging the responsibilities of our Board relating to our compensation programs and compensation of our executives on an annual basis. The Compensation Committee also decides equity grants to executives under our equity incentive plans, and periodically reviews the operations of the Company’s executive compensation programs and policies. In 2021, the committee engaged Ferguson Partners, an independent third-party compensation consultant, to provide benchmarking analysis and a peer group compensation report to serve as a guideline for its recommendations when setting overall executive compensation. The Chief Executive Officer determines the compensation and equity grants
in consultation with the Compensation Committee for all non-executive employees, but does not determine any compensation relating to the executive officers of the Company.
Under the Compensation Committee Charter, the Compensation Committee is required to have a minimum of two or more members, and currently consists of
Messrs. Chirite,Mr. Verses, Mr. Guernsey and
Verses.Mr. MacCutcheon. Mr. Verses serves as Chairman of the Compensation Committee. All members of the Compensation Committee are independent under Nasdaq listing standards and the rules and regulations promulgated by the SEC.
Board and Committee Meetings
Our Board held a total of five meetings during the fiscal year ended December 31,
2015.2021. During the fiscal year ended December 31,
2015,2021, the Audit Committee held four meetings and the Compensation Committee held one meeting. Each director serving on the Board in
20152021 attended at least 75% of the meetings of the Board (and, as applicable, committees thereof) during the year. We do not have a formal policy regarding director attendance at our annual meeting of stockholders, but encourage each of our directors to attend. All
but one memberthen-current members of our Board attended the
20152021 annual meeting of stockholders.
Board Leadership Structure and Role in Risk Oversight
Our Board has the responsibility for selecting the appropriate leadership structure for the Company. In making leadership structure determinations, the Board considers many factors, including the specific needs of the business and what is in the best interests of the Company’s stockholders. Our current leadership structure is comprised of a combined Chairman of the Board and Chief Executive Officer and Board committees led by independent directors. The Board believes that this leadership structure is the most effective for the Company at this time. Combining the Chairman of the Board and Chief Executive Officer roles promotes decisive leadership, fosters clear accountability and enhances the Company’s ability to communicate its message and strategy clearly and consistently to its stockholders, employees and customers. The Board also believes there is a very well-functioning and effective balance between strong Company leadership and appropriate safeguards and oversight by independent directors, although the Company does not have a lead independent director.
The Board believes that its current leadership structure allows the directors to provide effective oversight of the Company’s risk management strategies by receiving and approving recommendations prepared by our executive officers. The Audit Committee assists the Board in fulfilling its oversight responsibilities by periodically reviewing and making recommendations to the Board regarding the adequacy and effectiveness of the Company’s risk management and related programs and activities. Mr. Clemente, the Chairman of the Board, attends Audit Committee meetings and is appropriately positioned to include risk management issues on the agenda for Board meetings as circumstances warrant. As appropriate, the Board receives recommendations from the Chairman of the Audit Committee regarding significant risks or exposures and the steps management has taken to minimize such risks to the Company. In addition, the Audit Committee regularly communicates with the Chairman of the Compensation Committee regarding the risks within that committee’s areas of responsibility. The Company believes that this leadership structure promotes effective Board oversight of risk management because, while the Chief Executive Officer is ultimately accountable for the management of the Company’s risks, each of the Board committees actively monitors the Company’s risk management program and are provided with the information necessary to evaluate the specific risks relevant to such committee’s area of responsibility.
Corporate Sustainability
The Company is committed to pursuing environmental sustainability, social responsibility and robust corporate governance (“ESG”) practices across all of our operations. We recognize that development of real estate can have significant impact, positive or negative, for the surrounding community, the region, and the environment that we all share. We believe that companies developing real estate have a responsibility to maximize the positive impacts while taking steps to minimize negative impacts. Supporting and fostering these initiatives is instrumental in making our communities better places to live, work, and play while simultaneously bolstering asset value, reducing risk, and positively impacting all stakeholders.
Environmental
We believe that environmentally sound business practices are critical to the long-term success of our business and the communities in which we operate. Our managed portfolio already includes multiple assets that are Leadership in Energy and Environmental Design (“LEED”) and Energy Star certified, and multiple initiatives are underway to obtain additional certifications in the near future. We plan to expand our capabilities around monitoring energy and utility consumption at all our properties, allowing us to better identify opportunities to maximize efficiency and sustainability through operational and capital improvements. Furthermore, we intend to engage our supply chain to incorporate sustainable designs, materials, and systems into all ongoing or future developments. Our transit-oriented developments promote the use of mass transit, ride sharing, and alternate modes of transportation. We continue to expand the availability of electronic vehicle charging stations and bike racks at our properties in hopes of encouraging the reduction of congestion, emissions, and our overall carbon footprint. In recognition of the positive impacts resulting from Comstock’s Reston Station design, the development was awarded the designation of Best Workplaces for Commuters in 2020 and 2021 by the Best Workplaces for Commuters Organization created by the National Center for Transit Research at the Center for Urban Transportation Research.
Social (Human Capital)
Our core mission is to deliver extraordinary experiences in places people live, work, and play. We recognize the vital importance of community engagement in achieving this goal, which is why it has always been at the forefront of our overall business strategy. We host a variety of community events in the public spaces we develop, aimed at creating rich and meaningful experiences. We support local organizations in the communities where we do business through charitable events, philanthropic partnerships, and other events that help contribute to the health and vibrancy of the community.
A key to our success is our ability to attract and retain a talented workforce. We employ a diverse, multi-generational staff that consisted of 152 full-time and 9 part-time employees as of December 31, 2021. We promote collaboration, support, and innovation, providing all our employees the opportunity to achieve their professional and wellness goals. We continuously strive to diversify our workforce, provide equal access to opportunities to our people, and promote a working environment based on mutual trust, confidence, and respect. Our employees have access to a comprehensive suite of benefits, including, but not limited to: medical, dental, vision, and life insurance options; flexible and health savings accounts; 401k plan matching; and professional development reimbursement. We offer numerous wellness initiatives and training opportunities, including a diversity training and a broad suite of e-learning courses.
In 2021 and into 2022, we continued to implement certain protocols and procedures in response to the COVID-19 pandemic to ensure the safety, health and comfort of employees and remain in compliance with all federal and local ordinances and guidelines.
Governance
Our employees, managers and officers conduct our business under the direction of our CEO and the oversight of our Board of Directors (the “Board”) to enhance our long-term value for our stockholders. The core responsibility of our Board is to exercise its fiduciary duty to act in the best interests of our Company and our stockholders. In exercising this obligation, our Board and its individual committees perform several specific functions, including risk assessment, review and oversight. While management is responsible for the day-to-day management of risk, our Board retains oversight of risk management for our company, assisting management by providing guidance on strategic risks, financial risks, and operational risks.
We have established corporate governance guidelines and policies that promote Company values, including a code of conduct as well as a code of ethics. Our information security team deploys an array of cybersecurity capabilities to protect our various business systems and data. We continually invest in protecting against, monitoring, and mitigating risks across the enterprise. We had no material publicly reportable information security incidents in the fiscal year ended December 31, 2021.
Management and the Compensation Committee have considered and discussed risks inherent in our business and compensation arrangements and have concluded that the risks associated with our compensation practices and policies are not likely to have a material adverse effect on the Company.
7
In
2015,2021, we compensated our non-employee directors with an annual retainer fee of
$50,000.$48,000. Effective as of January 1, 2022, the annual retainer fee for our non-employee directors was increased to $65,000. Our non-employee directors earned an additional
$7,500$6,000 to serve on the Audit Committee and
$5,000$4,000 to serve on the Compensation Committee. In addition, the chairman of the Compensation Committee, the chairman of the Audit Committee and the Audit Committee designated financial expert each earned an additional
$5,000$4,000 fee. We offered our non-employee directors the option to elect to receive up to 50% of their
20152021 director compensation in the form of fully-vested shares of our Class A common stock.
Other than pursuant to such election, we did not grant any equity awards to our directors during 2015. Employees who also serve as directors receive no additional compensation for their services as a director.
2015
2021 Director Compensation
The following table details the compensation earned by our non-employee directors in
2015: | | | | | | | | |
Name | | Fees Earned or
Paid in Cash
($) (1) | | | Total ($) | |
A. Clayton Perfall (2)(4) | | | 67,500 | | | | 67,500 | |
Socrates Verses(3)(5) | | | 60,000 | | | | 60,000 | |
James A. MacCutcheon(2) | | | 57,500 | | | | 57,500 | |
Robert P. Pincus(2) | | | 57,500 | | | | 57,500 | |
Norman D. Chirite(3) | | | 55,000 | | | | 55,000 | |
David M. Guernsey(3) | | | 55,000 | | | | 55,000 | |
Joseph M. Squeri (6) | | | — | | | | — | |
(1) | Includes annual retainer, chairman and committee participation fees earned in 2015. To compensate our directors for their 2015 services, we made cash payments and/or issued them the equivalent value in shares of our Class A common stock, based on the 20-day average market closing price of the stock, on each quarterly date of election. Messrs. Perfall and Pincus elected to receive 100% of the fees earned in the form of cash payments. Messrs. Verses, Chirite and Guernsey elected to receive 50% of their fees earned in the form of cash payments and 50% of their fees earned in the form of fully-vested shares of our Class A common stock, in the following amounts of shares: 8,361, 7,664 and 7,664, respectively. Messr. MacCutcheon elected to receive 75% of the fees earned in the form of cash payments and 25% of the fees earned in the form of fully-vested shares of our Class A common stock, in the amount of 4,005 shares. Messrs. Verses, Chirite, Guernsey, Perfall, MacCutcheon, Pincus, Squeri, and Clemente were late in filing their Form 5s. |
(2) | Messrs. Perfall, MacCutcheon and Pincus served on the Audit Committee. |
(3) | Messrs. Verses, Chirite and Guernsey served on the Compensation Committee. |
(4) | Mr. Perfall served as the chairman and the designated financial expert of the Audit Committee. |
(5) | Mr. Versus served as the chair of the Compensation Committee. |
(6) | Mr. Squeri joined the Board on October 23, 2015. Mr. Squeri did not receive any compensation for his role as a director in 2015. |
8
2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash (1) ($) | | Stock Awards ($) | | All Other Compensation ($) | | Total ($) |
James A. MacCutcheon (2) | | $ | 66,000 | | | — | | | — | | | $ | 66,000 | |
David M. Guernsey (3) | | 58,000 | | | — | | | — | | | 58,000 | |
Socrates Verses (4) | | 28,000 | | (5) | 28,000 | | (5) | — | | | 56,000 | |
Robert P. Pincus (6) | | 54,000 | | | — | | | — | | | 54,000 | |
Ivy Zelman (7) | | 12,000 | | | 44,000 | | (8) | 7,945 | | (9) | 63,945 | |
(1)These amounts reflect the annual retainer and additional retainers for service on committees that were earned in 2021 and, based on the directors' individual election, settled via quarterly cash payments.
(2)Mr. MacCutcheon served as the Chair and the designated financial expert of the Audit Committee and also served on the Compensation Committee.
(3)Mr. Guernsey served on the Audit Committee and Compensation Committee.
(4) Mr. Verses served as the Chair of the Compensation Committee.
(5) Mr. Verses elected to receive 50% of his board fees settled via cash payments and 50% settled via the issuance of 5,013 fully-vested shares of Class A common stock. The amount presented reflects the equivalent value in shares of our Class A common stock based on the 20-day average market closing price of the stock on each quarterly election date.
(5)Mr. Pincus served on the Audit Committee.
(6) Ms. Zelman joined the Board on November 3, 2021 and received a pro rata annual board retainer fee. In addition, Ms. Zelman executed a consulting agreement to provide additional services to the Company in lieu of board committee assignments for an annual retainer of $50,000 that is payable annually in arrears in the form of cash or an equivalent value of restricted share units at the election of Ms. Zelman.
(7) On November 3, 2021, Ms. Zelman was granted 10,000 restricted stock units that vest 50% on each January 10, 2022 and 2023. This amount represents the grant date fair of Ms. Zelman’s restricted stock units, computed in accordance with FASB ASC Topic 718. The methodologies and assumptions utilized in the valuation of the restricted stock unit award is set forth in Notes 2 and 10 to our Consolidated Financial Statements contained in the our Annual Report on Form 10-K for the year ended December 31, 2021.
(8) Reflects the pro rata portion of the $50,000 consulting fees paid in cash to Ms. Zelman in 2021, per her election.
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The firm of PricewaterhouseCoopersGrant Thornton, LLP (“Grant Thornton”), an independent registered public accounting firm, audited our consolidated financial statements for the fiscal yearsyear ended December 31, 2015 and 2014. Effective April 12, 2016,2021. Grant Thornton has served as our Audit Committee dismissed PricewaterhouseCoopers LLP and appointed BDO USA, LLP to audit our consolidated financial statements for the fiscal year ending December 31, 2016. independent registered public accounting firm since June 2020.
Our organizational documents do not require that our stockholders ratify the appointment of
BDO USA, LLPGrant Thornton as our independent registered public accounting firm. However, we are submitting the appointment of
BDO USA, LLPGrant Thornton to our stockholders for ratification because we believe it is a matter of good corporate practice. In the event of a negative vote on such ratification, the Audit Committee will reconsider its selection, but may still retain
BDO USA, LLP.Grant Thornton. We
expectanticipate that representatives of
BDO USA, LLPGrant Thornton will be present at the meeting, will have the opportunity to make a statement if they desire, and will be available to respond to appropriate questions.
The Board recommends a vote “FOR” the ratification of the appointment of
BDO USA, LLPGrant Thornton as our independent
registered public accounting firm for the fiscal year ended December 31, 2016.
2022.
The aggregate fees billed
by PricewaterhouseCoopers LLP for the fiscal years ended December 31,
20152021 and
20142020 are as follows:
| | | | | | | | |
| | | 2015 | | | 2014 | |
Audit Fees(1) | | $ | 589,596 | | | $ | 352,500 | |
Audit Related Fees (2) | | | — | | | | 15,000 | |
Tax Fees(3) | | | 111,650 | | | | 113,750 | |
Other Fees(4) | | | — | | | | 1,800 | |
| | | | | | | | |
Total | | $ | 701,246 | | | $ | 483,050 | |
| | | | | | | | |
(1) | Fees incurred for annual audit and quarterly reviews. |
(2) | Audit related fees for the year ended December 31, 2014 included approximately $15,000 of costs associated with the preparation of our registration statement on Form S-3, which became effective in May 2014. |
(3) | Tax fees represent amounts billed for tax compliance and advisory services of $22,150 and $26,750 for the years ended December 31, 2015 and 2014, respectively. Tax fees included consulting fees related to the execution and monitoring of “ownership changes” as defined under Section 382 of the Internal Revenue Code. |
(4) | Other fees include licensing fees paid for accounting research tools. |
| | | | | | | | | | | | | | | | | | | | | | | |
| | 2021 | | | 2020 (2) |
Audit Fees (1) | | $ | 252,000 | | | | $ | 190,800 |
All Other Fees (3) | | | 52,000 | | | | | — | |
| Total | | $ | 304,000 | | | | $ | 190,800 |
(1) Audit fees include fees for professional services rendered in connection with the audit of the Company's annual consolidated financial statements included in the Company's Annual Report on Form 10-K and the review of the Company's quarterly consolidated financial statements included in the Company's Quarterly Reports on Form 10-Q.
(2) BDO USA, LLP ("BDO"), an independent registered public accounting firm, audited our consolidated financial statements for the fiscal year ended December 31, 2019, reviewed our first quarter 2020 financial statements, and provided a consent to reissue the 2019 audit report in the 2020 Form 10-K. The fees billed by BDO for the foregoing services are excluded in the 2020 fees set forth in the table above.
(3) The Company engaged Grant Thornton to assist management in performing an ESG Stakeholder Materiality Analysis as a non-audit service.
Change in Independent Auditor
As reported in the Company’s Current Report on Form 8-K filed on June 24, 2020 (“Auditor 8-K”), on June 18, 2020, the Audit Committee of the Board dismissed BDO USA, LLP (“BDO”) as the Company’s independent registered public accounting firm effective as of June 18, 2020.
The audit reports of BDO on the consolidated financial statements of the Company as of and for the fiscal years ended December 31, 2019 and 2018 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.
During the Company’s two most recent fiscal years ended December 31, 2019 and December 31, 2018, and the subsequent interim period through June 18, 2020, (i) there were no disagreements with BDO on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure that, if not resolved to BDO’s satisfaction, would have caused BDO to make reference to the subject matter of the disagreement in their reports on the Company’s financial statements for such years or any subsequent interim period through the date of dismissal, and (ii) there were no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K,
except that the Company’s management identified material weaknesses in internal controls over financial reporting involving (x) the review and reconciliation of debt balances and amortization of related debt discounts, as of March 31, 2020 and December 31, 2019, (y) the accounting and reporting of various complex divestment transactions entered into in the second quarter of 2019 relating to the winding down of the Company’s for-sale homebuilding operations, as of September 30, 2019 and June 30, 2019, and (z) insufficient finance and accounting department resources with appropriate knowledge, expertise and training commensurate with the Company’s corporate structure and financial reporting requirements to effectively assess risk and design, operate and oversee internal controls over financial reporting, as of March 31, 2018. The material weakness identified in item (y) above was remediated prior to the Company’s Form 10-K filed on April 14, 2020 and the material weakness identified in item (z) above was remediated prior to the Company’s Form 10-Q filed on August 14, 2018. A further description of the material weaknesses and management’s plans of remediation can be found in the following reports filed by the Company with the SEC: (1) Form 10-Q filed on May 28, 2020, (2) Form 10-K filed on April 14, 2020, (3) Form 10-Q filed on November 14, 2019, (4) Form 10-Q filed on August 19, 2019, and (5) Form 10-Q filed on May 16, 2018.
The Company provided BDO with a copy of the Auditor 8-K prior to its filing with the SEC and requested that BDO furnish the Company with a letter addressed to the SEC stating whether or not BDO agrees with the statements contained in the Auditor 8-K. A copy of BDO’s letter, dated June 24, 2020, is filed as Exhibit 16.1 to the Auditor 8-K.
Pre-Approval Policies and Procedures
The charter of the Audit Committee provides that the duties and responsibilities of the Audit Committee include the pre-approval of all audit, audit-related, tax, and other services permitted by law or applicable SEC regulations (including fee and cost ranges) to be performed by our independent registered public accounting firm.
AnyAll pre-approved services that will involve fees or costs exceeding pre-approved levels will also require specific pre-approval by the Audit Committee. Unless otherwise specified by the Audit Committee in pre-approving a service, the pre-approval will be effective for the 12-month period following pre-approval. The Audit Committee will not approve any non-audit services prohibited by applicable SEC regulations or any services in connection with a transaction initially recommended by the independent registered public accounting firm, the purpose of which may be tax avoidance and the tax treatment of which may not be supported by the Internal Revenue Code and related regulations. To the extent deemed appropriate, the Audit Committee may delegate
pre- approvalpre-approval authority to the Chairman of the Audit Committee or any one or more other members of the Audit Committee provided that any member of the Audit Committee who has exercised any such delegation must report any such pre-approval decision to the Audit Committee at its next scheduled meeting. The Audit Committee will not delegate to management the pre-approval of services to be performed by the independent registered public accounting firm.
Our Audit Committee requires that our independent registered public accounting firm, in conjunction with our Chief Financial Officer, be responsible for seeking pre-approval for providing services to us and that any request for pre-approval must inform the Audit Committee about each service to be provided and must provide the details associated with the particular service to be provided.
All of the services provided by
PricewaterhouseCoopers LLPGrant Thornton described above
under the captions “Audit Fees”, “Audit Related Fees,” “Tax Fees” and “Other Fees” were approved by our Audit Committee.
9
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company’s accounting and financial reporting processes and the audit of its financial statements, including the performance and compensation of the Company’s independent auditor. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls and the certification of the integrity and reliability of the Company’s internal controls procedures.
In fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed the Company’s audited financial statements for the fiscal years
ended December 31,
20152021, and
20142020 with management. The Audit Committee also reviewed with
PricewaterhouseCoopersGrant Thornton, LLP, the Company’s
current independent registered public accounting firm
for the
results of their audit.fiscal years ended December 31, 2021, and 2020. The Audit Committee has also discussed with the independent registered public accounting
firmfirms the matters required to be discussed by
Auditing Standard No. 16auditing standards of the Public Company Accounting Oversight Board (“PCAOB”
) (including Auditing Standard No. 1301 (Communications with Audit Committees)). This discussion included, among other things, a review with the independent registered public accounting
firmfirms of the quality of the Company’s accounting principles, the reasonableness of significant estimates and judgments, and the clarity of disclosure in the Company’s financial statements, including the disclosures related to critical accounting policies and practices used by the Company. The Audit Committee has reviewed permitted services under rules of the Securities and Exchange Commission as currently in effect and discussed with
PricewaterhouseCoopersGrant Thornton, LLP
theirits independence from management and the Company. The Audit Committee received from the independent registered public accounting
firmfirms the written disclosures and
letterletters required by applicable requirements of the PCAOB regarding the independent registered public accounting
firm’sfirms’ respective communications with the Audit Committee concerning independence. The Audit Committee also has discussed with the independent registered public accounting
firm itsfirms their respective independence from the Company and has considered whether the provision of any non-audit services to the Company is compatible with the independence of the registered public accounting firm. In addition, the Audit Committee discussed the rules of the Securities and Exchange Commission that pertain to the Audit Committee and the roles and responsibilities of Audit Committee members.
Based on its review of the financial statements and the aforementioned discussions, the Audit Committee concluded that it would be reasonable to recommend, and on that basis did recommend, to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31,
2015.2021. The Audit Committee also approved the appointment of
BDO USA,Grant Thornton, LLP as the Company’s independent registered public accounting firm for the year ending December 31,
2016.Respectfully submitted by the Audit Committee,
A. Clayton Perfall, Chair
James A. MacCutcheon
Robert P. Pincus
10
2022.
| | |
|
| Respectfully submitted by the Audit Committee, |
|
| James A. MacCutcheon, Chair |
| David M. Guernsey |
| Robert P. Pincus |
ADVISORY VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection
Section 14A of the Exchange Act requires that we provide our stockholders a non-binding, advisory vote
pursuant to Section 14A of the Exchange Act to approve the compensation of our named executive officers.
The Compensation Committee will review and consider the results of the vote carefully. Depending upon the results of that review, the Compensation Committee will take such action, if any, as it deems appropriate. Because this vote is advisory, it is not binding on the Company, the Compensation Committee or the Board of Directors.
Before you vote on the resolution below, please read the “Summary Compensation Table” together with the related narrative disclosure and footnotes in this proxy statement. Our Board is asking stockholders to cast a non-binding, advisory vote FOR the following resolution:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation tables, is hereby APPROVED.”
Our executive compensation program is comprised principally of salary and, from time to time, equity and cash bonus, designed to align compensation of our executives with stockholder value and financial performance and to achieve a balanced package that would attract and retain highly qualified senior officers and appropriately reflect each such officer’s individual performance and contributions. The Company regularly reviews its compensation programs and the overall compensation package paid to each of its executive officers to assess risk and to ensure that the program is structured appropriately in order to attain the Company’s strategic goals.
For the above reasons, the Board of Directors is asking stockholders to support this proposal. Although the vote we are asking you to cast is non-binding, the Compensation Committee and the Board value the views of our stockholders and will consider the outcome of the vote, among other factors, when determining future compensation arrangements for our executive officers. Following the vote at the
20162022 annual meeting, the next advisory vote on executive compensation will take place in
2017.2023.
The Board recommends a vote “FOR” this proposal.
11
Executive Officers of the Company
Set forth below is information regarding the current executive officers of the Company who are not also directors (information about Mr. Christopher Clemente can be found above under Proposal 1 Election of Directors):
Christopher L. Conover, 34, has served as our Interim Chief Financial Officer since November 2015 and has served the Company since January 2012. Mr. Conover has significant experience in corporate finance, strategic planning, accounting and operations. Prior to joining the Company in 2012, Mr. Conover was the Controller for the Snyder family office in 2011. From 2004 to 2011, Mr. Conover served in public accounting at PricewaterhouseCoopers LLP and Dannible & McKee, LLP, developing extensive experience and providing audit and highly technical consulting services for real estate companies of various sizes and asset classes. Mr. Conover is a certified public accountant.
Jubal R. Thompson,
46,52, has served as our General Counsel since October 1998 and our
General Counsel and Secretary since December 2004. Mr. Thompson has significant experience in areas of real estate acquisitions and dispositions, real estate and corporate finance, corporate governance, mergers and
acquisitionacquisitions and risk management.
Christopher M. Guthrie, 43, has served as our Chief Financial Officer since June 2018. Prior to that, Mr. Guthrie served as Chief Financial Officer of Comstock Partners, LC, the private company owned by Mr. Clemente. Mr. Guthrie joined the Company in 2014 and prior to joining the Company, served as Principal at Red Zone Capital where his responsibilities included management of the accounting and finance functions.
Timothy J. Steffan, 56, has served as our Executive Vice President of Asset Management, Leasing and Development since April 2018. Mr. Steffan has over 30 years of experience in asset management, leasing and real estate development for a variety of asset types and large-scale portfolios, including, without limitation, retail, office, multi-family, mixed use and hotel properties throughout the United States. Prior to joining the Company, Mr. Steffan served in various senior executive and management level positions with publicly traded, commercial real estate companies, including, without limitation, JMB Realty, Macerich NYSE: MAC, and RPAI NYSE: RPAI.
SUMMARY COMPENSATION TABLE
Because the Company qualifies as a “smaller reporting company,” under SEC rules, only our chief executive officer and next two highest paid executive officers who were serving as executive officers at the end of the last completed fiscal year are considered “named executive officers” for purposes of this proxy statement. The following table sets forth the compensation paid to the Company’s named executive officers for the fiscal years ended December 31, 2021 and 2020.
| | | | | | | | | | | | | | | | | | | | | | | |
| Name and Principal Position | Year | Salary ($) | Bonus
($)(1) | Stock Awards
($)(2) | All Other Compensation
(3) | Total
($) |
| Christopher Clemente | 2021 | | 500,000 | | 400,000 | | — | | — | | 900,000 | |
| Chairman of the Board and Chief Executive Officer | 2020 | | 500,000 | | 400,000 | | — | | — | | 900,000 | |
| Timothy Steffan | 2021 | | 350,000 | | 279,996 | | 36,729 | | 11,600 | | 678,325 | |
| Executive Vice President | 2020 | | 350,000 | | 318,872 | | 216,482 | | 11,400 | | 896,754 | |
| Jubal R. Thompson | 2021 | | 350,000 | | 233,750 | | 36,729 | | 11,600 | | 632,079 | |
| General Counsel and Corporate Secretary | 2020 | | 350,000 | | 233,750 | | 216,482 | | 11,400 | | 811,632 | |
(1)Cash bonuses for 2021 and 2020 were based upon the Company’s overall performance and each respective named executive officer’s satisfaction of applicable corporate, department and individual performance goals for the years ended December 31, 2021 and 2020. cash bonuses are reviewed and approved by the Compensation Committee.
(2)Mr. Steffan and Mr. Thompson, were, respectively, granted 5,775 shares of time-based restricted stock units and 5,775 performance-based restricted stock units in 2021. This column reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for such grants of restricted stock units, assuming achievement of the target level of performance with respect to the performance-based restricted stock units. The grant date fair value of such performance-based restricted stock units assuming, instead, that the highest level of performance condition will be achieved is $44,075 for each of Mr. Steffan and Mr. Thompson. The methodologies and assumptions utilized in the valuation of these restricted stock unit grants is set forth in Note 10 to our Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
(3)All other compensation includes 401(K) plan employer contributions equal to matches of 100% of an employee's deferral up to three percent and matches of 50% of an employee's deferral on the next two percent, which policy is uniformly applied to all employees who meet the above-referenced qualifications.
Employment Arrangements with Executive Officers
In December 2004,
On April 27, 2020, we entered into an amended and restated employment agreement with ChristopherMr. Clemente which had(the “2020 Employment Agreement”) and a confidentiality and non-compete agreement (“2020 Confidentiality Agreement”, and collectively with the 2020 Employment Agreement, the “2020 Agreements”). The 2020 Employment Agreement has an initial term of five years, with automatic one-year renewals, unless either party notifies the other that the term will not be extended. Under the agreement,2020 Employment Agreement, Mr. Clemente’s minimum annual base salary was $550,000,is $500,000, subject to potential increase by our Board from time to time, andtime. Mr. Clemente is further eligible for aan annual cash bonus of not less than 200%100% of his then-current annual base salary, based upon the satisfaction of financial performance criteria. Mr. Clemente did not receive a cash bonus forcriteria and the years ending December 31, 2015 or December 31, 2014.Company’s goals. Mr. Clemente is eligible for awards under our equity incentive plan, employer stock purchase, and any similar executive compensation plans we may adopt from time to time. In 2006, our Board increased the minimum annual salary payable to
The 2020 Agreements allow Mr. Clemente to
$700,000. To assist the Companyengage in certain permitted business activities related to his private company but prohibit him from competing with
meeting its obligations, beginning January 1, 2009, Mr. Clemente volunteered to have his base salary reduced to $548,000. On January 1, 2015, our Board increased the minimum annual salary payable to Mr. Clemente to $598,000. To assist the Company with meeting its obligations, beginning December 1, 2015, Mr. Clemente volunteered to have his base salary reduced to $400,000. Mr. Clemente’s compensation is further detailedus in the
“Summary Compensation Table” below.Mr. Clemente has agreed not to compete with ussame lines of business during the term of his employment and for two years after the termination of his employment. For the year ending December 31, 2020, Mr. Clemente’s employment agreementannual base salary was $500,000, and non-competition agreement allows him to engage in the following permitted business activities: (i) development of commercial or for-rent residential (such as apartment buildings) real estate investment properties; (ii) development of speculative land holdings as residential lots intended for construction of for-sale residential dwellings, provided, however, that any such development by any entity in which Mr. Clemente hasreceived a controlling interest or decision-making power, must first be offered to the Company at a fair market value price; and (iii) secured real estate lending to unrelated third parties. In addition, Mr. Clemente has agreed not to (x) engage in any for-sale residential construction activities in any of our then existing markets or in any market that we then plan to enter within six months; or (y) solicit our employees or certain other third parties for 24 months.
In August 2010, we entered into an employment agreement with Joseph M. Squeri, our former Chief Financial Officer, which agreement had an initial term of three years with automatic one-year renewals unless either party notified the other that the term will not be extended. Under the agreement, Mr. Squeri’s minimum annual salary was $250,000, subject to potential increase by the Board from time to time. Mr. Squeri was entitled to receive an annual cash bonus of up to fifty percent (50%)$400,000. Mr. Clemente did not receive any equity awards in 2020. For the year ending December 31, 2021, Mr. Clemente’s annual base salary was $500,000, and Mr. Clemente received a cash bonus of his minimum annual salary based upon the satisfaction of certain performance criteria, also subject to potential increase by the Board from time to time.$400,000. Mr. Squeri was also eligible toClemente did not receive any equity
awards
under our equity incentive plan and any similar executive compensation plans we may adopt from time to time. Effective January 1, 2015, our Board increased the minimum annual salary payable toin 2021. Mr.
Squeri to $300,000. Mr. Squeri’sClemente’s compensation is further detailed in the “Summary Compensation Table”
below. Mr. Squeri resigned as Chief Financial Officer of the Company effective as of November 25, 2015. Mr. Squeri agreed not to compete with us during the term of his employment and for 12 months after termination of his employment. Mr. Squeri did not receive any severance or other benefits in connection with his termination of employment.set forth above.
In August 2006, we entered into an employment agreement with Jubal R. Thompson, our General Counsel and
Corporate Secretary, which agreement had an initial term of three years with automatic one-year renewals unless either party notifies the other that the term will not be extended. Under the agreement, Mr. Thompson’s minimum annual salary was originally
12
$200,000, $200,000, subject to potential increase by the Board from time to time. Pursuant to the original employment agreement, Mr. Thompson was eligible to receive a cash bonus of not less than 75% of his then-current salary, based upon the satisfaction of certain performance criteria. In 2010, our Board increased the minimum annual salary payable to Mr. Thompson to $250,000. Mr. Thompson is entitled to receive an annual cash bonus of up to fifty percent (50%) of his minimum annual salary based upon the satisfaction of certain performance criteria, also subject to potential increase by the Board from time to time. Mr. Thompson is also eligible to receive awards under our equity incentive plan and any similar executive compensation plans we may adopt from time to time. Effective January 1, 2015, our Board increased the minimum annual salary payable to Mr. Thompson to $300,000. During 2014,Effective January 1, 2019, our Board increased the minimum annual salary payable to Mr. Thompson was awarded a cash bonus of $84,167 and 25,000 stock options as further detailed in the “Summary Compensation Table” below.
to $350,000.
We do not have an employment agreement with
Christopher L. Conover,Timothy J. Steffan, our
Interim Chief Financial Officer.SUMMARY COMPENSATION TABLE
BecauseExecutive Vice President of Asset Management, Leasing and Development.
Material Terms of Restricted Stock Grants
On February 12, 2019, the Company
qualifies asapproved the 2019 Omnibus Incentive Plan (the “2019 Plan”), which replaced and superseded the Company’s 2004 Long-Term Compensation Plan. The 2019 Plan provides for the issuance of, among other things, restricted stock awards to employees in the form of time-based restricted stock unit awards (“Time-Based Grants”) and performance-based restricted stock unit awards (“Performance-Based Grants”). Time-Based Grants issued pursuant to the 2019 Plan have a
“smaller reporting company,” under SEC rules, onlyvesting schedule determined by our
chief executive officerCompensation Committee, typically vesting equally over a four year period. Performance-Based Grants may be earned based upon achievement of pre-determined performance objectives determined by our Compensation Committee from time to time. The 2020 and
next two highest paid executive officers who were serving as executive officers2021 Performance-Based Grants vest based upon the Company’s cumulative EBITDA calculated over a three-year rolling period with an employee being able to vest between 60% to 120% of the target award measured on a pro-rata basis to determine the final vesting award at the end of the
last completed fiscalthree year
plus upperiod. The specific terms and conditions of the Time-Based Grants and Performance-Based Grants are reviewed and approved by the Compensation Committee. The 2019 Plan, the Form of Time-Based Restricted Stock Unit Agreement and Form of Performance Based Restricted Stock Unit Agreement are Exhibits to
two individuals for whom disclosure would have been provided butthe Annual Report filed on Form 10-K for the
fact that he or she was not serving as an executive officer at the end of the last completed year
are considered “named executive officers” for purposes of this proxy statement. The following table sets forth the compensation paid to the Company’s named executive officers for the fiscal years ended December 31,
2015 and 2014. | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | | Salary
($) | | | Bonus
($)(3) | | | Option
Awards
($)(4) | | | Total
($) | |
Christopher Clemente | | | 2015 | | | | 581,500 | | | | — | | | | — | | | | 581,500 | |
Chairman of the Board and Chief Executive Officer (CEO) | | | 2014 | | | | 548,000 | | | | — | | | | 21,875 | | | | 569,875 | |
| | | | | |
Jubal R. Thompson | | | 2015 | | | | 300,000 | | | | — | | | | — | | | | 300,000 | |
General Counsel | | | 2014 | | | | 250,000 | | | | 84,167 | | | | 21,875 | | | | 356,042 | |
| | | | | |
Joseph M. Squeri | | | 2015 | | | | 287,500 | | | | — | | | | — | | | | 287,500 | |
Former Chief Financial Officer (1) | | | 2014 | | | | 250,000 | | | | 50,667 | | | | 21,875 | | | | 322,542 | |
| | | | | |
Christopher L. Conover | | | 2015 | | | | 170,000 | | | | — | | | | — | | | | 170,000 | |
Interim Chief Financial Officer (2) | | | 2014 | | | | 160,000 | | | | 10,000 | | | | 8,750 | | | | 178,750 | |
(1) | Mr. Squeri resigned as Chief Financial Officer of the Company effective as of November 25, 2015. He did not receive any severance or other benefits in connection with his termination of employment. |
(2) | Mr. Conover was appointed Interim Chief Financial Officer of the Company effective as of November 25, 2015. |
(3) | Reflects discretionary cash awards made by the Board in 2014. |
(4) | Messrs. Clemente, Thompson and Squeri were each granted 3,571 options in 2014 at an exercise price of $7.63.Messr. Conover was granted 1,428 options in 2014 at an exercise price of $7.63. This column reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 (excluding forfeiture estimates) for such grant of stock options. The methodologies and assumptions utilized in the valuation of these grants is set forth in Note 12 to our Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Each of the options awards granted in 2014 vest in four annual equal installments commencing on December 11, 2015. The information presented in this footnote reflects the 1-for-7 reverse stock split of the Company’s issued and outstanding shares of Class A common stock and Class B common stock (the “Reverse Stock Split”) effected by the Company on September 25, 2015. |
13
2019.
OUTSTANDING EQUITY AWARDS AT
20152021 FISCAL YEAR END
The following table sets forth the equity awards held by the named executive officers as of December 31, 2015. The information presented in this table reflects2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Option Awards | | Stock Awards |
| Name | Number of Securities Underlying Unexercised Options (#) Exercisable | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | Option Exercise Price
($) | 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 ($)(5) | Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not vested
(#)(7) | Equity Incentive Plan Awards: Market value of payout value of unearned shares, units or other rights that have not vested
($)(5) |
| Christopher Clemente | 3,571 | | | — | | 7.63 | 12/11/24 | | — | | — | — | — |
| 2,857 | | (1) | — | | 12.67 | 3/31/22 | | — | | — | — | — |
| 12,000 | | (1) | 3,000 | (1) | 2.14 | 3/6/27 | | — | | — | — | — |
| — | | | — | | — | — | | 15,421 | | (1)
(2) | 74,792 | | — | — |
| Timothy Steffan | 12,500 | | | 12,500 | (3) | 3.30 | 6/27/28 | | — | | — | — | — |
| — | | | — | | — | — | | 137,851 | (4) | 668,577 | | 16,935 | 82,135 | |
| Jubal R. Thompson | 10,714 | | | | | 13.23 | 12/13/23 | | — | | — | — | — |
| 3,571 | | | — | | 7.63 | 12/11/24 | | — | | — | — | — |
| 8,125 | | | — | | 2.14 | 3/6/27 | | — | | — | — | — |
| — | | | — | | — | — | | 97,851 | (6) | 369,926 | 16,935 | 82,135 |
(1)Reflects stock options and awards issued to Teresa Schar, Mr. Clemente’s wife, an employee of the Reverse Stock Split effectedCompany.
(2)Reflects 7,500 shares of restricted stock that vest 25% on January 2 of each of 2022, 2023 and 2024 and 7,921 shares of restricted stock that vest 25% on January 10 of each of 2022, 2023, 2024 and 2025.
(3)Options vest on June 27, 2022.
(4) Reflects 40,000 shares of restricted stock that vest 50% on April 29 of each of 2022 and 2023; 8,370 shares of restricted stock that vest 33.3% on January 2 of each of 2022, 2023 and 2024; 83,706 shares of restricted stock that vest 13.3% on January 10, 2022, 20% on January 10, 2023, 26.7% on January 10, 2024, 20% on January 10, 2025, 13.3% on January 10, 2026, and 6.7% on January 10, 2027; and 5,775 shares of restricted stock that vest 25% on January 10 of each of 2022, 2023, 2024 and 2025.
(5) Based on the closing price per share of our Class A common stock on December 31, 2021 ($4.85), the last trading day of the 2021 fiscal year.
(6) Reflects 8,370 shares of restricted stock that vest 33.3% on January 2 of each of 2022, 2023 and 2024; 83,706 shares of restricted stock that vest 13.3% on January 10, 2022, 20% on January 10, 2023, 26.7% on January 10, 2024, 20% on January 10, 2025, 13.3% on January 10, 2026, and 6.7% on January 10, 2027; and 5,775 shares of restricted stock that vest 25% on January 10 of each of 2022, 2023, 2024 and 2025.
(7) Reflects 11,160 and 5,775 shares of performance-based restricted stock that vest by March 15, 2023 and March 15, 2024, respectively, based on achievement of performance criteria to be measured by the CompanyCompensation Committee. See “Material Terms of Restricted Stock Grants” above for additional information regarding the performance criteria applicable to these awards.
Summary of Potential Payments on
September 25, 2015. | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Option Awards | | | Stock Awards | |
| Name | | Number of Securities
Underlying Unexercised
Options
(#)
Exercisable | | | Number of Securities
Underlying Unexercised
Options
(#)
Unexercisable | | | Option
Exercise
Price
($) | | | 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
($)(8) | |
Christopher Clemente | | | 892 | | | | 2,679 | (2) | | | 7.63 | | | | 12/11/24 | | | | — | | | | — | |
| | | 3,571 | | | | — | | | | 7.00 | | | | 12/31/17 | | | | — | | | | — | |
| | | 2,143 | | | | 714 | (3) | | | 12.67 | | | | 3/31/22 | | | | — | | | | — | |
| | | — | | | | — | | | | — | | | | — | | | | 5,357 | (7) | | | 7,821 | |
Jubal R. Thompson | | | 14,285 | | | | — | | | | 7.00 | | | | 12/31/17 | | | | — | | | | — | |
| | | 35,714 | | | | — | | | | 4.97 | | | | 2/12/20 | | | | — | | | | — | |
| | | 5,356 | | | | 5,358 | (4) | | | 13.23 | | | | 12/13/23 | | | | — | | | | — | |
| | | 892 | | | | 2,679 | (2) | | | 7.63 | | | | 12/11/24 | | | | — | | | | — | |
| | | — | | | | — | | | | — | | | | — | | | | 3,571 | (7) | | | 5,214 | |
Joseph M. Squeri (1) | | | 14,285 | | | | — | | | | 11.83 | | | | 8/18/20 | | | | — | | | | — | |
| | | 14,285 | | | | — | | | | 7.56 | | | | 8/31/21 | | | | — | | | | — | |
| | | 2,678 | | | | — | | | | 13.23 | | | | 12/13/23 | | | | — | | | | — | |
| | | 892 | | | | — | | | | 7.63 | | | | 12/11/24 | | | | — | | | | — | |
Christopher L. Conover | | | 1,785 | | | | 1,786 | (5) | | | 13.23 | | | | 12/13/23 | | | | — | | | | — | |
| | | 357 | | | | 1,071 | (6) | | | 7.63 | | | | 12/11/24 | | | | — | | | | — | |
| | | — | | | | — | | | | — | | | | — | | | | 1,785 | (7) | | | 2,606 | |
(1) | Mr. Squeri resigned as Chief Financial Officer of the Company effective as of November 25, 2015, forfeiting 10,715 unvested option awards and 3,751 unvested stock awards. |
(2) | 893 options vest on December 11 of each of 2016, 2017 and 2018. |
(3) | Reflects stock options issued to Tracy Schar, Mr. Clemente’s wife, an employee of the Company. All of her options vest on March 31, 2016. |
(4) | 2,679 options vest on December 31 of each of 2016 and 2017. |
(5) | 893 options vest on December 31 of each of 2016 and 2017. |
(6) | 357 options vest on December 11 of each of 2016, 2017 and 2018. |
(7) | Reflects shares of restricted stock of which vest on March 31, 2016. |
(8) | Based on the closing price per share of our Class A common stock on December 31, 2015 ($1.46), the last trading day of the 2015 fiscal year. |
14
POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL
Termination or Change in Control
Pursuant to Messrs. Clemente and Thompson’s employment agreements,Mr. Clemente’s 2020 Employment Agreement, if such executive’shis employment is terminated by us without cause or if such executivehe resigns for good reason, as such terms are defined in the agreements,his agreement, then such executivehe is entitled to continue to
receive his then-current salary for 24 and 12 months, respectively. Messrs.48 months. Mr. Clemente and Thompson will also be entitled to receive a cash payment equal to a multiple of 100%two (2) times one hundred percent (100%) of the bonus eachthat he would have been entitled to had he remained our employee until the end of our fiscal year (Mr. Clemente, 2x; Mr. Thompson, 1x).year. This cash payment will be due and payable on the earlier of (i) 90 days after our last payment of his then-current salary, or (ii) the end of the fiscal year in which the termination without cause occurs. In the event we terminate Mr. Clemente without cause or he resigns for good reason within the 24 calendar month period following the effective date of a change in control, the cash payment will be due and payable in full within 30 days of the effective date of the termination without cause. In addition, Mr. Clemente will be entitled to continue to participate in employee benefit plans, programs and arrangements for a period of 48 months following his termination of employment.
If Mr. Clemente’s employment is terminated by reason of death, then he is entitled to receive his then-current salary for 12 months, and he will also be entitled to any earned but unpaid bonus with respect to the fiscal year in which his death occurred. If Mr. Clemente’s employment is terminated by reason of disability, then he is entitled to receive his then-current salary for 24 months, and he will also be entitled to two (2) times one hundred percent (100%) of any earned but unpaid bonus with respect to the fiscal year in which his disability occurred.
Pursuant to Mr. Thompson's employment agreement, if his employment is terminated by us without cause or if he resigns for good reason, as such
executive’sterms are defined in the agreements, then he is entitled to continue to receive his then-current salary for 12 months. Mr. Thompson will also be entitled to receive a cash payment equal to 100% of the bonus he would have been entitled to had he remained our employee until the end of our fiscal year. This cash payment will be due and payable on the earlier of (i) 90 days after our last payment of his then-current salary, or (ii) the end of the fiscal year in which the termination occurs. In the event we terminate
such executiveMr. Thompson without cause or
such executivehe resigns for good reason within the six calendar month period prior to the effective date of a
Changechange in
Controlcontrol (as defined in the agreement) or within the 12 calendar month period following the effective date of a
Changechange in
Control,control, the cash payment will be due and payable in full within 30 days of the effective date of the
Changechange in
Control.control. In addition,
Messrs. Clemente andMr. Thompson will be entitled to continue to participate in employee benefit plans, programs and arrangements for a period of
12 months, in the case of Mr. Clemente, or 6 months
in the case of Mr. Thompson, following
their termination of
employment.If Mr. Clemente’s employment is terminated by reason of death or disability, then he is entitled to receive his then-current salary for 12 months. employment.
If Mr. Thompson’s employment is terminated by reason of death or disability, then he is entitled to receive his then-current salary for a period of 12 months or 6 months, respectively.
The executivesMr. Thompson will also be entitled to any earned but unpaid bonus with respect to the fiscal year in which his death or disability occurred.
We were party to an employment agreement with Mr. Squeri during 2015. However, he resigned as Chief Financial Officer effective as of November 25, 2015 and did not receive any severance or other benefits in connection with his resignation.
The following table describes the potential payments and benefits to which our current executive officers would be entitled upon the happening of the following events: (i) a termination without cause or resignation for good reason and (ii) death or disability. Calculations for this table are based on the assumption that the triggering event took place on
December 31, 2015 and, in an event of a change of control, the Board has not exercised its discretion to accelerate the stock awards.
| | | | | | | | | | | | |
Name | | Termination without
Cause or Resignation for
Good Reason
(in connection with a
Change of Control)
($) | | | Termination without
Cause or Resignation for
Good Reason
(not in connection with
a Change of Control)
($) | | | Death or
Disability
($) | |
Christopher Clemente | | | 800,000 | (3)(4) | | | 800,000 | (3)(4) | | | 400,000 | (3) |
Jubal R. Thompson | | | 300,000 | (4) | | | 300,000 | (4) | | | 300,000 | (1) |
Christopher Conover (2) | | | — | | | | — | | | | — | |
(1) | Reflects the amount Mr. Thompson’s estate would receive in the event of his death. If Mr. Thompson’s employment is terminated by reason of disability, then he is entitled to receive his then-current salary for 6 months, which is equal to $150,000. |
(2) | Mr. Conover does not have an employment or severance agreement with the Company. |
(3) | Reflects Mr. Clemente’s reduced base salary of $400,000, which reduction was effective December 1, 2015. |
(4) | Neither of Messrs. Clemente or Thompson were eligible for a bonus in 2015. Accordingly, the estimated severance in this table does not include the bonus multiple component. |
15
Other than the transactions described below, from January 1,
20142020 through December 31,
20152021, there have not been any transaction or series of similar transactions to which we were a participant in which the amount involved exceeded $120,000 or 1% of the average of the Company’s total assets as of December 31,
20142020 and December 31,
2015,2021, and in which any director, executive officer, holder of 5% or more of any class of our capital stock or any member of the immediate family of any of the foregoing persons had a direct or indirect material interest.
We believe that all of these transactions are on terms that are comparable to or not less favorable than terms that would or could have been obtainable from unaffiliated third parties. All proposed future related party transactions will be submitted to our Board for review and will require a majority vote of the independent directors for approval. Ongoing transactions are reviewed annually to ensure that they are still comparable to or not less favorable than terms that would have or could have been obtainable from unaffiliated third parties. Our Chief Financial Officer and/or our General Counsel, assuming they are not party to the proposed transaction, coordinates with the independent directors in evaluating the fairness to us of the proposed transactions.
On December 31, 2009, the Company, through an affiliate, Comstock Property Management, L.C. (“CPM”), entered into a three- yearthree-year lease for approximately 7,620 square feet of office space for its corporate headquarters at 1886 Metro Center Drive, Reston, Virginia from CP Asset Management, LC (f/k/a Comstock Asset Management, L.C.) (“Comstock AM”), an affiliate wholly-owned by our Chief Executive Officer, ChristopherMr. Clemente. OnSeptember 19, 2012, the Company
increased the leased premises to 10,056 square feet and extended the lease term for five years. On October 1, 2016, the Company amended the lease
reducing the leased space to 6,398 square feet, and extended the lease term for
up to three years. On September 30, 2018, CPM assigned the lease to CHCI Asset Management, LC (f/k/a CDS Asset Management, LC) (“CHCI AM”), an
additional 2,436entity wholly owned by the Company. On October 1, 2018, the Company amended the lease to increase the leased premises to 10,048 square feet and on October 1, 2019, the Company amended the lease to extend the term for one year, which expired on September 30, 2020. The Company thereafter entered into a one-month extension of the term, and the lease at 1886 Metro Center Drive, Reston, Virginia officially expired on October 31, 2020. On November 1, 2020, the Company relocated its corporate headquarters to a new office space consisting of approximately 21,852 square feet of office space
orat 1900 Reston Metro Plaza, Reston, Virginia pursuant to a
total of 10,056 square feet, for its corporate headquarters,ten-year lease agreement with
CRS Plaza I, LLC, an
effective date of July 1, 2012. Concurrent with the amendment, the Company agreed to extend the lease for five-years from the effective date.affiliate controlled and owned by Mr. Clemente and family, as landlord. For the years ended December 31,
20152021 and
2014,2020, the total
payments made under this lease agreement were $320,000 and $310,000, respectively.On March 14, 2013, Stonehenge Funding, LC (“Stonehenge”), an entity wholly-owned by Mr. Clemente, entered into an Extension Agreement of the Amended and Restated Senior Note with the Company to extend the maturity date of the financing arrangement to January 1, 2016. Under the terms of the Extension Agreement, the Company was required to pay $50,000 monthly to Stonehenge, to be allocated first to accrued and unpaid interest and then to unpaid principal outstanding, beginning on April 1, 2013. For the years ended December 31, 2015 and 2014, the Company made payments of $550,000 and $600,000. On December 29, 2015, the Company and Stonehenge entered into a Note Exchange and Subscription Agreement pursuant to which the Note in the original principal amount of $4,500 issued by the Company to Stonehenge was exchanged for 772,210 shares of the Company’s newly created Series B Non-Convertible Preferred Stock, par value of $0.01 per share and a stated value of $5.00 per share (the “Series B Preferred Stock”). The number of shares of Series B Preferred Stock received by Stonehenge in exchange for the note represented the principal amount outstanding plus all accrued and unpaid interestrent expenses under the note as of December 29, 2015, which was $3,861,000. The note was cancelled in its entirety on December 29, 2015.
Pursuant to a Credit Enhancement Agreement entered into on February 17, 2011 bylease agreements were approximately $1.2 million and between the Company and Gregory Benson, the former President and Chief Operating Officer of the Company, and Mr. Clemente (each, a “Guarantor”), the Guarantors agreed to provide credit enhancement and personal guarantee of loans with Cardinal Bank and Eagle Bank in exchange for payment by the Company of a credit enhancement fee. As a result of this credit enhancement, the Guarantors on an aggregate basis were entitled to a credit enhancement fee calculated at a rate of 4% per annum. One-half of the credit enhancement fee was payable monthly, in arrears, and the remaining half was deferred and payable on an annual basis. During the years ended December 31, 2015 and 2014, the Company made no guarantee payments under the agreement.
On February 23, 2009, Comstock Homes of Washington, L.C., a wholly-owned subsidiary of the Company, entered into a Services Agreement with Comstock Asset Management, L.C., an entity wholly-owned by Mr. Clemente, to provide services related to real estate development and improvements, legal, accounting, marketing, information technology and additional support services. Pursuant to the Services Agreement, the Company shall not be responsible for any out-of-pocket or third party costs associated with the services provided. For the years ended December 31, 2015 and 2014, the Company billed Comstock Asset Management, L.C. $854,000 and $462,000, respectively, for services and out-of-pocket expenses incurred. Revenues from this arrangement are included within ‘Revenue – other’ within the consolidated statement of operations set forth in our Annual Report on Form 10-K for the year ended December 31, 2015. As of December 31, 2015 and 2014, the Company was owed $220,000 and $38,000, respectively, under this contract, which is included in ‘Trade receivables’ in the consolidated balance sheet set forth in our Annual Report on Form 10-K for the year ended December 31, 2015.
On March 14, 2013, a subsidiary of the Company, Comstock VII, L.C. (“Comstock VII”), entered into subscription
16
agreements with certain accredited investors (“Comstock VII Class B Members”), pursuant to which the Comstock VII Class B Members purchased membership interests in Comstock VII for an aggregate amount of $7.3$0.6 million, (the “Comstock VII Private Placement”). In connection with the Comstock VII Private Placement, the Company issued 116,000 warrants for the purchase of shares of the Company’s Class A common stock to the non-affiliated accredited investors, having an aggregate fair value of $146,000. The Comstock VII Private Placement provided capital related to the have been construction of the Company’s following projects: Townes at Shady Grove Metro, City Homes at the Hampshires, Townes at the Hampshires, and Townes at Falls Grove (collectively, the “Projects”). Proceeds of the Comstock VII Private Placement have been utilized (A) to provide capital needed to complete the Projects in conjunction with project financing for the Projects, (B) to reimburse the Company for prior expenditures incurred on behalf of the Projects, and (C) for general corporate purposes of the Company. During 2014, the Company paid distributions in the amount of $8,652,260, to the Comstock VII Class B Members, redeeming the Comstock VII Class B Members in full. The Comstock VII Class B Members included unrelated third-party accredited investors along with certain related parties, who contributed as follows: $500,000 by A. Clayton Perfall, director of the Company; $500,000 by Norman D. Chirite, director of the Company; $500,000 by Joseph M. Squeri, former Chief Financial Officer and current director of the Company; $500,000 by Tracy Schar, wife of the Chief Executive Officer of the Company; $400,000 by Cornelia Benson, wife of the former President and Chief Operating Officer of the Company; $250,000 by Stephen Squeri, brother of the former Chief Financial Officer of the Company; $250,000 by James H. and Margaret Thompson, brother and sister-in- law of the General Counsel of the Company; $250,000 by James A. MacCutcheon, director of the Company; $150,000 by Thomas Squeri, brother of the former Chief Financial Officer of the Company; $125,000 by Robert P. Pincus, director of the Company; $100,000 by Gregory Benson, former President and Chief Operating Officer of the Company; $100,000 by Jubal Thompson, General Counsel of the Company; and $100,000 by David Guernsey, director of the Company.
In December 2013, a subsidiary of the Company, Comstock Investors VIII, L.C. (“Comstock VIII”), entered into subscription agreements with certain accredited investors (“Comstock VIII Class B Members”), pursuant to which Comstock VIII Class B Members purchased membership interests in Comstock VIII for an aggregate amount of $4.0 million (the “Comstock VIII Private Placement”). In connection with the Comstock VIII Private Placement, the Company issued 102,000 warrants for the purchase of shares of the Company’s Class A common stock to the non-affiliated accredited investors, having an aggregate fair value of $131,000. The proceeds from the Comstock VIII Private Placement will be used (A) for the construction of the following projects: The Townes at HallCrest and Townes at Maxwell Square Condominium (collectively, the “Investor VIII Projects”), (B) to reimburse the Company for prior expenditures incurred on behalf of the Investor VIII Projects, and (C) for general corporate purposes of the Company. The Company paid distributions to the Comstock VIII Class B Members in 2015 and 2014 in the amount of $300,000 and $940,000, respectively. The Comstock VIII Class B Members included unrelated third-party accredited investors along with certain related parties, who contributed as follows: $150,000 by Robert P. Pincus, director of the Company; $150,000 by Joseph M. Squeri, former Chief Financial Officer and current director of the Company; $150,000 by James A. MacCutcheon, director of the Company; $150,000 by Tracy Schar, wife of the Chief Executive Officer of the Company; $100,000 by Cornelia Benson, wife of the former President and Chief Operating Officer of the Company; $100,000 by Judy Verses, wife of a director of the Company; $50,000 by Investor Management, L.C., an entity controlled by Gregory Benson, former President and Chief Operating Officer of the Company; and $50,000 by David M. Guernsey, director of the Company.
On June 24, 2014, in connection with his resignation effective May 5, 2014, the Company entered into a separation agreement with Gregory Benson, the Company’s former President and Chief Operating Officer (the “Separation Agreement”), pursuant to which Mr. Benson will receive from the Company (i) $597,000 as a severance payment, paid in 36 semi-monthly installments following May 1, 2014 and (ii) for a period of 12 months beginning on May 1, 2014, a monthly payment in an amount to offset the incremental cost of healthcare insurance Mr. Benson will be eligible to purchase through COBRA, compared to what he would have paid had his employment continued. The foregoing compensation and benefits were provided by the Company in exchange for Mr. Benson’s entry into the Separation Agreement, which contains usual and customary covenants and an option for the benefit of the Company (or its designee), until June 30, 2015, to purchase either a portion or all of Mr. Benson’s shares of our Class A and Class B common stock at $1.09 per share (subject to adjustment), which the Company did not exercise.
On October 17, 2014, the Company entered into a promissory note
which was amended and restated on December 18,2014, with Comstock Growth Fund, L.C. (“CGF”), whereby CGF made a loan to the Company in the originalinitial principal amount of $10$10.0 million and a maximum capacity of up to $20.0 million (the “Loan”). The maximum amount available for borrowing byOn December 18, 2014, the Company under thisunsecured promissory note is $25was amended and restated to provide for a maximum capacity of $25.0 million. All of the other terms of the unsecured promissory note remained the same. The Company borrowed additional principal loan amount of $6.2 million withunder the Amended and Restated CGF promissory note bringing the total aggregate principal amount borrowed to $16.2 million. The CGF loan had a three year term. The interest rate isthree-year term carrying a floating interest rate of LIBOR plus 9.75% with a 10% floorfloor. On May 23, 2018, the Company entered into a Membership Interest Exchange and Subscription Agreement (the “Membership Exchange Agreement”), together with a revised promissory note agreement, in which a note (“CGF Note”) with an outstanding principal and accrued interest payments arebalance of $7.7 million was exchanged for 1,482,300 shares of the Company’s Series C Non-Convertible Preferred Stock, par value $0.01 per share and a stated liquidation value of $5.00 per share (the “Series C Preferred Stock”), issued by the Company to CP Real Estate Services, LC (f/k/a Comstock Development Services, LC) (“CPRES”), a company wholly owned by Mr. Clemente. The Company exchanged the preferred equity for 91.5% of CPRES membership interest in the CGF Note. Concurrently, the face amount of the CGF Note was reduced to $5.7 million, bearing interest at a fixed rate of 10% per annum, made monthly in arrears. There is aThe Company had approximately $5.7 million of outstanding borrowings and accrued interest under the CGF loan, net of discounts, as of December 31, 2020 and 2019, respectively. During the years ended December 31, 2020 and 2019, the Company made interest payments of $0.4 million and $0.6 million, respectively, and did not make principal reduction of 10% annually based on an average outstanding balancepayments to CGF. The maturity date for the prior year. TheCGF Note was April 16, 2020. On April 13, 2020, the Company will pay an origination fee of 1% ofretired the amount drawn from the Loan.
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CGF Note.
In order to fund the Loan, CGF obtained commitments and entered into subscription agreements with certain accredited investors (the “CGF Members”), pursuant to which the CGF Members purchased membership interests in CGF for an aggregate purchase price of $16.2 million (the “CGF Private Placement”). In connection with the CGF Private Placement, the Company issued warrants to purchase shares of our Class A common stock to CGF, which, pursuant to the terms of the governing documents of CGF, were distributed to the CGF Members other than
CDS (as defined below).CPRES. The warrants
representrepresented the right to purchase an aggregate amount of 76,244 shares of our Class A common stock, having an aggregate fair value of $432,500. Additionally, the CGF Members were entitled to receive a distribution of shares of our Class A common stock, purchased by such CGF Member (including to CGF Members that are affiliates or insiders). On May 12, 2015, the Company issued and distributed 226,857 shares of our Class A common stock to CGF. Following CGF’s acquisition of shares of our Class A common stock, CGF distributed the shares to the CGF Members.
The CGF Members included unrelated third-party investors along with certain related parties, who contributed the following amounts to CGF: $125,000 by Robert P. Pincus, director of the Company; $100,000 by A. Clayton Perfall,
directora then-director of the Company; $300,000 by James A. MacCutcheon, director of the Company; $500,000 by Joseph M. Squeri,
a former
Chief Financial Officerofficer and
current director of the Company; $350,000 by
TracyTeresa Schar, wife of
the Chief Executive Officer of the Company;Mr. Clemente; $150,000 by Thomas Squeri, brother of
the former Chief Financial Officer of the Company;Joseph M. Squeri; $250,000 by David M. Guernsey, director of the Company; $250,000 by Norman D. Chirite,
former director of the Company; and $250,000 by Stephen Squeri, brother of
the former Chief Financial Officer of the Company.Joseph M. Squeri. In addition,
Comstock Development Services, LC (“CDS”), an entity wholly-owned by Mr. Clemente,CPRES contributed $10 million to CGF. The Company is the manager of CGF but does not own any membership interests in CGF.
On
December 29, 2015,August 15, 2016, Comstock
Growth Fund II,Investors X, L.C. (“
CGF II”Investors X”)
, an administrative entity managed by the Company, was formed for the purpose of extending loans to the Company. CGF II entered into a subscription agreement with
CDSan accredited investor (“Investors X Class B Member”), pursuant to which
CDSthe Investors X Class B Member purchased membership interests in
CGF IIInvestors X for an initial
aggregate principal amount of $5.0 million,
which is part of an aggregate capital raise of $14.5 million (the
“CGF II“Investors X Private Placement”).
Simultaneously, The Investors X Class B Member is CPRES. In October 2016, the Investors X Class B Member purchased additional interests in the Investors X Private Placement in an amount of $9,500,000 resulting in an aggregate subscription amount of $14,500,000. In connection with the Investors X Private Placement, the Company issued a total of 150 warrants for the purchase of shares of the Company’s Class A common stock, having an aggregate fair value of $258,000. The Investors X Member was entitled to a cumulative, preferred return of 6% per annum, compounded annually on the capital account balance. The Company has the right to repurchase the interest of the Investors X Class B Member at any time, provided that (i) all of the Investors X Class B Members’ interest is acquired, (ii) the purchase is made in cash and (iii) the purchase price equals the Investors X Class B Members’ capital account plus accrued priority return. On October 13, 2017, the Operating Agreement for Investors X was amended to increase the maximum capital raise to $19,500,000 that may be drawn as needed at the request of the Company. Additionally, in October 2017, Investors X received proceeds of $5.0 million under the amended Operating Agreement to be used for the planned construction of the Company’s Totten Mews, Towns at 1333, Richmond Station, and Marwood East projects (collectively, the “Investors X Projects”). As part of this additional contribution, 50,000 warrants for the purchase of the Company’s Class A common stock, having an aggregate fair value of $258,000 were granted to the Investors X Class B Member. Proceeds of the Investors X Private Placement were utilized (A) to provide capital needed to complete the Investors X Projects, (B) to reimburse the Company for prior expenditures incurred on behalf of the Investors X Projects, and (C) for general corporate purposes of the Company. On April 30, 2019, the Company entered into a Master Transfer Agreement (the “MTA”) with CPRES and FR54, LC (“FR54”), an entity also controlled by Mr. Clemente. Pursuant to the MTA, CHCI transferred to CPRES the management of and its Class A membership interests (“Class A Units”) in Investors X, in exchange for the transfer of CPRES’ Class B membership interests in Investors X, which entitled CHCI to priority distribution of all distributable cash flow from Investor X’s projects (“Class B Units”). As additional consideration for the transfer of the Class B Units, CHCI issued to CPRES (i) 1,220,000 shares of the Company’s Series C Preferred Stock, and (ii) 3,100,000 shares of the Company’s Class A common stock, par value $0.01 per share, valued at an above market price of $4.00 per share for purposes of the transaction. Additionally, pursuant to the MTA, FR54 transferred to CHCI 579,158 shares of Series C Preferred Stock, which were immediately cancelled by CHCI, in exchange for the issuance of 723,947 newly issued shares of the Company’s Class A common stock valued at an above market price of $4.00 per share for purposes of the transaction.
On July 17, 2017, the Company entered into an acquisition loan for $1,100,000 with Mainstreet Bank in connection with the purchase of the assets of an environmental services company known as JK Environmental, in Conshohocken, Pennsylvania (the “JK Loan”). The JK Loan provides for a flat interest rate of 6.5% per annum. The JK Loan is fully guaranteed by Mr. Clemente. The JK Loan was retired in June 2020.
On March 30, 2018, CHCI AM entered into a master asset management agreement effective January 2, 2018 (the “AMA”) with CPRES. On April 30, 2019, CHCI AM entered into an amended and restated master asset management agreement effective January 2, 2019 (“2019 AMA”). Pursuant to the 2019 AMA, CPRES has engaged CHCI AM to manage and administer the CPRES’ commercial real estate portfolio and the day to-day operations of CPRES and each property-owning subsidiary of CPRES. Pursuant to the terms of the 2019 AMA, CHCI AM will provide investment advisory, development and asset management services necessary to build out, stabilize and manage certain assets.
Under the 2019 AMA, CPRES will pay CHCI AM annual fees equal to the greater of either (i) an aggregate amount equal to the sum of (a) an asset management fee equal to 2.5% of revenues generated by certain anchor properties in CPRES’ commercial real estate portfolio (“Anchor Portfolio”); (b) a construction management fee equal to 4% of all costs associated with Anchor Portfolio projects in development; (c) a property management fee equal to 1% of the Anchor Portfolio revenues, (d) an acquisition fee equal to up to 0.5% of the purchase price of acquired assets; and (f) a disposition fee equal to 0.5% of the sales price of an asset on disposition; or (ii) an aggregate amount equal to the sum of (x) the employment expenses of personnel dedicated to providing services to the Anchor Portfolio, (y) the costs and expenses of the Company related to maintaining the public listing of its shares and complying with related regulatory and reporting obligations, and (z) a fixed annual payment of $1,000,000. CHCI AM is further entitled to certain additional fees, including (A) an incentive fee equal to 10% of
the free cash flow of each of the real estate assets comprising the Anchor Portfolio after calculating a compounding preferred return of 8% on CPRES invested capital (B) an investment origination fee equal to 1% of raised capital, (C) a leasing fee equal to $1.00/sf for new leases and $0.50/sf for renewals; and (D) mutually agreeable loan origination fees related to the Anchor Portfolio. During the year ended December 31, 2021, the Company recorded revenue of $16.7 million in the consolidated statement of operations set forth in our Annual Report on Form 10-K for the year ended December 31, 2021.
On April 30, 2019, CHCI AM entered into a Business Management Agreement (the “Management Agreement”) with Investors X, whereby CHCI AM provides Investors X with asset and professional services related to the wind down of the Company’s divested homebuilding operations and the continuation of services related to the Company’s divested land development activities. The aggregate fee payable to CHCI AM from Investors X under the Management Agreement is $937,500, payable in fifteen quarterly installments of $62,500 each.
On July 1, 2019, CHCI AM entered into a Business Management Agreement (the “BC Management Agreement”) with CPRES, whereby CHCI AM provides CPRES with professional management and consultation services, including, without limitation, consultation on land development and real estate transactions, for a residential community located in Monteverde, Florida. The initial term of the BC Management Agreement currently expires on December 29, 2015,31, 2022, subject to automatic, successive one (1) year extensions, unless sooner terminated in accordance with the terms of the BC Management Agreement. The BC Management Agreement provides that CPRES will pay CHCI AM an annual management fee equal to $337,500, payable in equal monthly installments during the term commencing on July 1, 2019, and will reimburse CHCI AM for certain expenses.
On December 30, 2019, the Company made an investment related to the purchase of the Hartford, a stabilized commercial office building located at 3101 Wilson Boulevard in the Clarendon area of Arlington County, Virginia (the “Hartford”). The Company’s maximum amount of investment related to the purchase of the Hartford is $1.2 million. In conjunction with the investment, the Company entered into an operating agreement with Comstock Partners, LC (“CP”), an entity that is controlled by Mr. Clemente, to form Comstock 3101 Wilson, LC (the “Hartford Owner”), to purchase the Hartford. Pursuant to the operating agreement, the Company held a minority membership interest of the Hartford and the remaining membership interests of the Hartford were held by CP. At the closing of the acquisition of the Hartford, the Company received an acquisition fee of $500 thousand. On February 7, 2020, the Company, CP and DWF VI 3101 Wilson Member, LLC (“DWF”), an unaffiliated, third party, equity investor in the Hartford, entered into a limited liability company agreement (the “DWC Operating Agreement”) to form DWC 3101 Wilson Venture, LLC (“DWC”) to, among other things, acquire, own and hold all interests in the Hartford Owner. In furtherance thereof, on February 7, 2020, the original operating agreement for the Hartford Owner was amended and restated (the “A&R Operating Agreement”) to memorialize the Company’s and CP’s assignment of 100% of its membership interests in the Hartford Owner to DWC. As a result thereof, DWC is the sole member of the Hartford Owner. The Company and CP, respectively, hold minority membership interests in, and DWF holds the majority membership interest in, DWC. The Company’s ownership interest in the Hartford remains at 2.5%.
On March 19, 2020, the Company and CPRES entered into a revolving line of credit agreement (the “CPRES Line of Credit”) whereby CPRES made a loan to the Company in the maximum amount of $10 million with any disbursement under the CPRES Line of Credit maturing and becoming fully due and payable twelve (12) months from the effective date of the disbursement (“Maturity Date”), subject to automatic extensions of the Maturity Date for twelve (12) month intervals unless the CPRES Line of Credit is sooner terminated. The CPRES Line of Credit matures on March 19, 2025 and further provides that the Company and CPRES may enter into a separate note evidencing a disbursement reasonably expected to have a term in excess of twelve (12) months. Disbursements under the CPRES Line of Credit bear interest at the sum of (i) the Prime rate as reported by the Wall Street Journal, and (ii) 1%.
On March 27, 2020, the Company entered into a promissory note with CGF IICPRES whereby CGF II originatedCPRES made a loan to the Company in the initial principal amount of $5.0$5.5 million (the “CPRES Note”) with a maximum outstanding borrowing capacitymaturity date of upApril 30, 2023. The proceeds of the CPRES Note were issued pursuant to $10.0 million. This promissory note hasthe CPRES Line of Credit and are subject to the
terms of CPRES Line of Credit. The proceeds of the CPRES Note were used to retire the CGF Note on April 13, 2020.
In October 2021, the Company entered into a
two-year maturity, which may be extendedjoint venture with Partners to acquire BLVD Forty Four, a 15-story, luxury high-rise apartment building located one block from the Rockville Metro Station and in the heart of the I-270 Technology and Life Science Corridor in Montgomery County. Built in 2015, the 263-unit mixed use property includes approximately 16,000 square feet of retail and a commercial parking garage. In connection with the transaction, the Company received an
additional year upon payment of a $10,000 extension fee.acquisition fee and will also receive investment related income and incentive fees in connection with its equity interest in the asset. The
promissory note provides for an interest rate of 10% per annum,Company will also provide asset, residential, retail and
interest payments will be accrued and paid in kind monthlyparking property management services for the
first year,property in exchange for market rate fees. The Company considers BLVD Forty Four to be a variable interest entity upon which it exercises significant influence; however, considering key factors such as the Company’s ownership interest and
paid monthlyparticipation in
arrears beginning December 31, 2016. The promissory note also provides for payment of an origination fee of 1% on the amount of each advance, up to an aggregate amount of $100,000, and payment of a quarterly maintenance fee of 0.25% of the average outstanding balance. The capital providedpolicy-making decisions by
the CGF II Private Placement will be used bymajority equity holders, the Company
(i) to capitalizeconcluded that it does not control the
Company’s current and future development pipeline, (ii) to repay all or a portion of the Company’s prior private placements; and (iii) for general corporate purposes.investment. As of December 31,
2015, $5.0 million was outstanding in principal and accrued interest on2021, the
promissory note. Subsequent to year-end, on January 8, 2016, the Company repaid the balance of the promissory note, together with accruedCompany’s ownership interest in
full.BLVD Forty Four was 5%.
Procedures for Approval of Related Person Transactions
Our policy for the review and approval of transactions between us and related persons is set forth in our Corporate Governance Guidelines.
Pursuant to our Corporate Governance Guidelines, it is the responsibility of ourThe independent directors
will meet to review and
make recommendations to the full Board concerningapprove or reject all related party transactions (as specified in Item 404 of Regulation S-K)
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and review and make recommendations to the full Board regarding approval or rejection of any contracts or other transactions with current or former executive officers of the Company, including consulting arrangements, employment agreements, change-in-control agreements, severance agreements, termination agreements, and loans to employees made or guaranteed by the Company.
Beneficial Ownership of Principal Stockholders, Directors and Officers
The following table sets forth certain information regarding the beneficial ownership of our common stock on March 31,
2016,2022, by (1) each director and named executive officer of the Company, (2) all directors and executive officers of the Company as a group, and (3) each person known by us to own more than 5% of our common stock.
Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of our Class A common stock subject to options or warrants held by that person that are currently exercisable or will become exercisable within 60 days after March 31, 2016,2022, are deemed outstanding, while the shares are not deemed outstanding for purposes of computing percentage ownership of any other person. Unless otherwise indicated in the footnotes below, the persons and entities named in the table have sole voting or investment power with respect to all shares beneficially owned, subject to community property laws where applicable. | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Beneficial Ownership of | |
| | | Class A Common Stock (1) | | | Class B
Common Stock | | | Class A and Class B
Common Stock Combined | |
| | | | | | Percent of | | | | | | Percent of | | | Economic | | | Voting | |
Name of Beneficial Owner | | Number | | | Class | | | Number | | | Class | | | (%) | | | (%)(1) | |
Named Executive Officers and | | | | | | | | | | | | | | | | | | | | | | | | |
Directors | | | | | | | | | | | | | | | | | | | | | | | | |
Christopher Clemente (2) | | | 506,944 | | | | 16.83 | % | | | 195,250 | | | | 50.00 | % | | | 20.55 | % | | | 38.67 | % |
Jubal R. Thompson | | | 111,456 | | | | 3.70 | % | | | — | | | | — | | | | 3.22 | % | | | 1.25 | % |
Joseph M. Squeri (3) | | | 90,067 | | | | 2.99 | % | | | — | | | | — | | | | 2.62 | % | | | 1.01 | % |
A. Clayton Perfall | | | 56,275 | | | | 1.87 | % | | | — | | | | — | | | | 1.65 | % | | | * | |
James A. MacCutcheon | | | 56,374 | | | | 1.87 | % | | | — | | | | — | | | | 1.65 | % | | | * | |
Norman D. Chirite | | | 55,823 | | | | 1.85 | % | | | — | | | | — | | | | 1.64 | % | | | * | |
Socrates Verses (4) | | | 51,718 | | | | 1.72 | % | | | — | | | | — | | | | 1.52 | % | | | * | |
David M. Guernsey | | | 45,177 | | | | 1.50 | % | | | — | | | | — | | | | 1.33 | % | | | * | |
Robert Pincus (5) | | | 20,003 | | | | * | | | | — | | | | — | | | | * | | | | * | |
Christopher L. Conover | | | 4,400 | | | | * | | | | — | | | | — | | | | * | | | | * | |
All directors and executive officersas a group (10 persons) | | | 998,237 | | | | 33.14 | % | | | 195,250 | | | | 50.00 | % | | | 34.89 | % | | | 44.20 | % |
Other 5% holders | | | | | | | | | | | | | | | | | | | | | | | | |
Gregory V. Benson (6) | | | 210,910 | | | | 7.00 | % | | | 195,250 | | | | 50.00 | % | | | 11.94 | % | | | 35.40 | % |
Prescott Group Aggressive Small | | | | | | | | | | | | | | | | | | | | | | | | |
Cap Master Fund, GP(7) | | | 290,572 | | | | 9.65 | % | | | — | | | | — | | | | 8.54 | % | | | 3.28 | % |
* | Less than 1% of the outstanding shares of common stock |
(1) | Does not include shares of our Class A common stock issuable upon conversion of our Class B common stock. Percentage total voting power represents voting power with respect to all shares of our Class A and Class B common stock, as a single class. Each holder of our Class B common stock is entitled to fifteen votes per share of Class B common stock and each holder of our Class A common stock is entitled to one vote per share of Class A common stock on all matters submitted to our stockholders for a vote. The Class A common stock and the Class B common stock vote together as a single class on all matters submitted to a vote of our stockholders, except as may otherwise be provided in our certificate of incorporation or as required by law. The Class B common stock is convertible at any time by the holder into shares of Class A common stock on a share-for-share basis. |
(2) | Includes the following held by Mr. Clemente’s wife, Tracy Schar: 34,698 shares of our Class A common stock including exercisable stock options to purchase 6,427 shares and warrants of 5,000 to purchase shares of our Class A common stock. 9,904 shares of our Class A common stock and 195,250 shares of our Class B common stock are held by FR54, LLC, an entity that is owned by Mr. Clemente and his wife. 12,852 shares of our Class A common stock are held in various trusts for the benefit Mr. Clemente’s children. Mr. Clemente is the custodian for each trust. 124,465 shares of our Class A common stock are held by Stonehenge Funding, LLC, an entity wholly owned by Mr. Clemente. 85,714 shares of our Class A common stock are held by Comstock Development Services, LLC, an entity wholly owned by Mr. Clemente. The address for Mr. Clemente is the address of the Company. |
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(3) | Mr. Squeri became a director in October 2015 and ceased serving as an officer of the Company in November 2015. |
(4) | Includes 285 shares of Class A common stock, with respect to which Mr. Verses disclaims beneficial ownership. The shares are held in trust for the benefit of Mr. Verses’ children. Mr. Verses’ wife is the custodian of these trusts. |
(5) | 1,382 shares are held by RLR Investment Management, LLC, an entity that is owned by Mr. Pincus. |
(6) | The address for Gregory Benson is 12357 Clareth Drive, Oak Hill, Virginia 20171. |
(7) | The address for Prescott Group Capital Management, LLC is 1924 South Utica, Suite 1120, Tulsa, Oklahoma 74104. |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Class A Common Stock (1) | | Class B Common Stock | | | Beneficial Ownership of Class A and Class B Common Stock Combined | |
| Name of Beneficial Owner | | Number | | Percent of Class | | Number | | | Percent of Class | | | Economic (%) | | | Voting (%)(1) | |
| Named Executive Officers and Directors | | | | | | | | | | | | | | | | | | | | |
| Christopher Clemente (2) | | 4,833,513 | | | 58.32 | % | | 220,250 | | | | | 100.00 | % | | | 59.39 | % | | | 70.20 | % |
| Jubal R. Thompson | | 198,540 | | | 2.40 | % | | — | | | | — | | | | 2.33 | % | | | 1.71 | % |
| James A. MacCutcheon (3) | | 151,371 | | | 1.83 | % | | — | | | | — | | | | 1.78 | % | | | 1.31 | % |
| Timothy Steffan | | 94,672 | | 1.14 | % | | — | | | | — | | | 1.11 | % | | 0.82 | % |
| Robert Pincus (4) | | 76,075 | | * | | | — | | | | — | | | * | | | * | |
| David M. Guernsey (5) | | 69,235 | | * | | | — | | | | — | | | * | | | * | |
| Christopher Guthrie | | 57,827 | | | * | | | | | | | | | | | * | | | | * | |
| Socrates Verses (6) | | 11,075 | | | * | | | — | | | | — | | | | * | | | * | |
| Ivy Zelman | | 5,000 | | | * | | | | | | | | | | | * | | | | * | |
| All directors and executive officers as a group (9 persons) | | 5,497,308 | | | 66.32 | % | | 220,250 | | | | | 100.00 | % | | | 67.20 | % | | | 75.92 | % |
*Less than 1% of the outstanding shares of common stock
(1)Does not include shares of our Class A common stock issuable upon conversion of our Class B common stock. Percentage total voting power represents voting power with respect to all shares of our Class A and Class B common stock, as a single class. Each holder of our Class B common stock is entitled to fifteen votes per share of Class B common stock and each holder of our Class A common stock is entitled to one vote per share of Class A common stock on all matters submitted to our stockholders for a vote. The Class A common stock and the Class B common stock vote together as a single class on all matters submitted to a vote of our stockholders, except as may otherwise be provided in our certificate of incorporation or as required by law. The Class B common stock is convertible at any time by the holder into shares of Class A common stock on a share-for-share basis.
(2) Includes the following held by Mr. Clemente’s wife, Teresa Schar: 59,313 shares of our Class A common stock including exercisable stock options and warrants to purchase 12,000 and 5,000 shares, respectively, of our Class A common stock. Includes 3,571 shares of Class A Common Stock subject to exercisable stock options held by Mr. Clemente. 715,851 shares of our Class A common stock and 195,250 shares of our Class B common stock are held by FR54, LLC, an entity that is owned by Mr. Clemente and his wife. 64,159 shares of our Class A common stock are held in various trusts for the benefit of Mr. Clemente’s children. Mr. Clemente is the custodian for each trust. 124,465 shares of our Class A common stock are held by Stonehenge Funding, LC, an entity wholly owned by Mr. Clemente. 3,660,235 shares of our Class A common stock are held by CP Real Estate Services, LC (f/k/a Comstock Development Services, LC), an entity wholly owned by Mr. Clemente.
(3) Includes warrants to purchase 4,286 shares of our Class A common stock.
(4) Includes 1,382 shares held by RLR Investment Management, LLC, an entity that is owned by Mr. Pincus and warrants to purchase 893 shares of our Class A common stock.
(5) Includes warrants to purchase 3,571 shares of our Class A common stock.
(6) Reflects 11,075 shares of Class A common stock indirectly owned by Mr. Verses's spouse.
Securities Authorized for Issuance under Equity Compensation Plans
The following table provides information as of December 31, 2015,2021, regarding compensation plans under which the Company’s equity securities are authorized for issuance.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Plan Category | | Number of Securities to Be Issued Upon Exercise of Outstanding Options and Rights (a)(2) | | Weighted-Average Exercise Price of Outstanding Options 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 Stockholders (1) | | | 1,243,709 | | | $ | 2.89 | | | | 1,392,939 | | |
Equity Compensation Plans Not Approved by Stockholders (3) | | | — | | | — | | | | — | |
| Total | | | 1,243,709 | | | $ | 2.89 | | | | 1,392,939 | | |
(1)Includes the Company’s historical 2014 long term incentive plan and the current 2019 Plan.
(2)In addition to options, the amounts shown in column (a) reflect time-based and performance-based restricted stock units. The information presentedweighted-average price shown in this table reflects the Reverse Stock Split effectedcolumn (b) does not take restricted stock units into account.
(3)The Company does not have any equity compensation plans that have not been approved by the Company on September 25, 2015. | | | | | | | | | | | | |
| Plan Category | | Number of Securities to
Be Issued Upon Exercise
of Outstanding Options
and Rights
(a)(2) | | | Weighted-Average
Exercise Price of Outstanding
Options 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 Stockholders (1) | | | 173,142 | | | $ | 8.39 | | | | 502,588 | |
Equity Compensation Plans Not Approved by Stockholders (3) | | | — | | | | — | | | | — | |
Total | | | 173,142 | | | $ | 8.39 | | | | 502,588 | |
(1) | Includes the Company’s current Amended and Restated 2004 Long-Term Incentive Compensation Plan. |
(2) | Includes shares issuable pursuant to the exercise of stock options, but does not include outstanding shares of restricted stock. |
(3) | The Company does not have any equity compensation plans that have not been approved by the stockholders. |
Compensation Committee Interlocks and Insider Participation
As noted above, during 2015, our Compensation Committee consisted of Messrs. Chirite, Guernsey and Verses. None of these individuals had any contractual or other relationships with us during the fiscal year except as directors. None of our executive officers serves as a member of the board of directors or compensation committee of any entity that has one or more executive officers who serve on our Board or Compensation Committee.
stockholders.
Delinquent Section 16(a)
Beneficial Ownership Reporting ComplianceReports
Section 16(a) of the Exchange Act requires our directors, officers, and persons that own more than 10% of a registered class of the Company’s equity securities to file reports of ownership and changes in ownership with the SEC. Officers, directors, and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. Based solely upon our review of the copies of such forms received by us during the fiscal year ended December 31,
2015,2021, and written representations that no other reports were required, we believe that each person who, at any time during such fiscal year, was a director, officer, or beneficial owner of more than 10% of our common stock complied with all Section 16(a) filing requirements during such fiscal
year. Messrs.year, with the exception of the following: Mr. Verses
Chirite, Guernsey, Perfall, MacCutcheon, Pincus, Squeri, Clementehas not filed
theira Form
5 late,4 with respect to 5,013 Class A common stock, Mr. Thompson has not filed a Form 4 with respect to 29,906 Class A common stock, Mr. Steffan has not filed a Form 4 with respect to 19,840 Class A common stock, and Mr.
ConoverGuthrie has not filed
hisa Form
3 late.4 with respect to 19,840 Class A common stock. Since conducting its review, the Company is developing new procedures to ensure improved compliance on an on-going basis and is working with the preceding officers and directors to file the missed Form 4s as soon as possible.
Incorporated by Reference
To the extent that this proxy statement is incorporated by reference into any other filing by us under the Securities Act of 1933 or the Exchange Act, the section of this proxy statement entitled “Report of the Audit Committee” (to the extent permitted by the rules of the Securities and Exchange Commission) will not be deemed incorporated unless specifically provided otherwise in such filing. The information contained in this section shall not be deemed “filed” with the SEC, or subject to Regulations 14A or 14C or to the liabilities of Section 18 of the Exchange Act.
We know of no other matters to be submitted to the meeting. If any other matters properly come before the meeting, it is the intention of the persons named in the enclosed proxy card to vote the shares they represent as our Board may recommend.
Dated:
April 29, 201621
May 2, 2022
COMSTOCK HOLDING COMPANIES, INC.
2016
2022 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned stockholder of Comstock Holding Companies, Inc., a Delaware corporation, hereby acknowledges receipt of the notice of annual meeting of stockholders and proxy statement, each dated April 29, 2016,May 2, 2022, and hereby appoints Jubal R. Thompson, proxy and attorney-in-fact, with full power to each of substitution, on behalf and in the name of the undersigned, to represent the undersigned at the 20162022 Annual Meeting of Stockholders of Comstock Holding Companies, Inc. to be held on Thursday, June 16, 2016,15, 2022, at 10:9:00 a.m., local time, at 1886the Conference Center at Reston Station, located at 1900 Reston Metro Center Drive,Plaza, 2nd Floor, Reston, Virginia 20190, and at any adjournment or adjournments thereof, and to vote all shares of common stock which the undersigned would be entitled to vote if then and there personally present on the matters set forth on the reverse side of this proxy card. If you need directions to the meeting, please contact Judy WhitakerLindsay Anderson at (703) 883-1700.703-230-1985.
The Company continues to actively monitor the ongoing impacts of the novel coronavirus disease of 2019 (“COVID-19”) pandemic and governmental mandates, including social distancing guidelines, stay-at-home orders and other travel restrictions. The Company is committed to ensuring the health and well-being of our employees and stockholders. The Company reserves the right to require that all stockholders attending the meeting comply with then-applicable social distancing guidelines, wear personal protective equipment, including face masks, and comply with any additional reasonable rules and regulations that the Company implements in order to protect the health and safety of attendees. In the event the Company determines that a change in the date, time or location of the meeting or implementation of a virtual-only meeting format is recommended or required, the Company will promptly announce any such decisions in advance through a press release and on our website at www.comstockcompanies.com/proxymaterial to include specific details on the participation process if the Company transitions to a virtual-only format.
(Continued and to be signed on the reverse side.)
ANNUAL MEETING OF STOCKHOLDERS OF
COMSTOCK HOLDING COMPANIES, INC.
NOTICE OF INTERNET AVAILABILITY OF PROXY
MATERIAL:MATERIAL:
The Notice of Meeting, Proxy Statement, Proxy Card
are available atwww.comstockhomes.com/www.comstockcompanies.com/proxymaterial Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
FOR EACH OF THE MATTERS SET FORTH BELOW, THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE MATTER SUBMITTED.
| | | | | | | | |
¨ FOR ALL NOMINEES1 | | O Christopher Clemente Election of directors |
| ☐ FOR THE NOMINEE | | Christopher Clemente |
¨ ☐ WITHHOLD AUTHORITY FOR ALL NOMINEES | | O A. Clayton Perfall | | |
¨FOR ALL EXCEPT | | O Joseph M. Squeri | | |
(See instructions below)
| | THE NOMINEE | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
INSTRUCTIONS: | | | | | | | | |
| 2 | | To withhold authority to vote for any individual nominee(s), mark“FOR ALL EXCEPT” and fill in the box next to each nominee you wish to withhold, as shown here: l |
| | | | | | | | |
2.
| | Ratify the appointment of BDO USA,Grant Thornton, LLP as the independent registered public accounting firm for our fiscal year ending December 31, 2016. 2022. | | ¨☐ For
| | ¨☐ Against
| | ¨☐ Abstain
|
3.
| | | | |
| 3 | | Approve on a non-binding, advisory basis the resolution approving the 20152021 compensation of the Company’s named executive officers. | | ¨☐ For
| | ¨☐ Against
| | ¨☐ Abstain
|
¨ Please check this box if you plan to attend the annual meeting of stockholders despite submission of this Proxy.
| | | | | |
| ☐ | Please check this box if you plan to attend the annual meeting of stockholders despite submission of this Proxy. |
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED, “FOR” THE ELECTION OF DIRECTORS, “FOR” THE RATIFICATION OF THE APPOINTMENT OF
BDO USA,GRANT THORNTON, LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31,
2016,2022, AND “FOR” THE ADVISORY VOTE TO APPROVE THE
2021 COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY COME BEFORE THE MEETING.
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.
Dated: ______________________, 2022
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Dated:, 2016 |
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Signature of Stockholder |
Signature of Stockholder
|
Signature of Other Stockholder (if held jointly) |
|
|
Title(s) |
_______________________________________
Title
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