A. | Yes. You may revoke your proxy or change your vote at any time before your proxy is exercised at the Annual Meeting. If you are a holder of record, you can do this in any of the three following ways: | • | by sending a written notice to the Secretary of the Company in time to be received before the Annual Meeting, stating that you would like to revoke your proxy; | | | | | • | by completing, signing and dating another proxy card and returning it by mail in time to be received before the Annual Meeting, or by authorizing a later dated proxy by the Internet or telephone, in which case your later-authorized proxy will be recorded, and your earlier proxy revoked; or | | | | | • | by attending the Annual Meeting and voting electronically. Simply attending the Annual Meeting without voting will not revoke your proxy or change your vote at any time before your proxy is exercised at the Annual Meeting. If you are a holder of record, you can do this in any of the three following ways:vote. |
by sending a written notice to the Secretary of the Company in time to be received before the Annual Meeting, stating that you would like to revoke your proxy;
by completing, signing and dating another proxy card and returning it by mail in time to be received before the Annual Meeting, or by authorizing a later dated proxy by the Internet or telephone, in which case your later-authorized proxy will be recorded, and your earlier proxy revoked; or
by attending the Annual Meeting and voting in person. Simply attending the Annual Meeting without voting will not revoke your proxy or change your vote.
If your shares of common stock are held in an account at a broker or other nominee and you desire to change your vote or vote in person,electronically, you should contact your broker or other nominee for instructions on how to do so. You will also need a legal proxy as described above as well as an admission ticket from the Company, in order to attend the Annual Meeting in person.
Q.19. Who can help answer my questions?
A. If you have any questions about the Annual Meeting or how to authorize your proxy, or need additional copies of this Proxy Statement, the enclosed proxy card or voting instructions, you should contact:
1290 Avenue of Americas, 9th9th Floor, New York, NYNew York 10104 All stockholders Call Toll-Free: 1-866-431-2105
Q.20. Where can I find more information about the Company?
A. We file annual, quarterly and current reports and other information with the SEC. You may read and copy any reports or other information we file with the SEC on the web site maintained by the SEC at http://www.sec.gov. Our SEC filings CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS The Company operates under the direction of the Company’s Board, the members of which are also availableaccountable to the public atCompany and the SEC's Public Reference Room located at 100 F Street, N.E., Washington, DC 20549. You may also obtain copiesstockholders as fiduciaries. The Board is responsible for directing the management of the documents at prescribed rates by writingCompany’s business and affairs. Effective August 25, 2021, pursuant to the Public Reference Section ofCharter and bylaws, and as contemplated the SEC at 100 F Street, N.E., Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 or 1-202-551-7900 for further information regarding the public reference facilities.
PROPOSAL NO. 1 – ELECTION OF DIRECTORS
General
Our Board currently consists of five directors. However, Nicholas Nilsen, one of our current directors, will not be standing for re-election at the Annual Meeting. The Board has determined that, concurrently with the conclusion of Mr. Nilsen’s term, the size of the Board shall be decreased to four. Thus, stockholders will be voting on the election of four nominees to serve as directors at the Annual Meeting.
Based on the recommendation of the Nominating Committee of the Board of Directors, the Board of Directors nominated the four directors listed below for election to the Board of Directors at the Annual Meeting. All of the nominees are willing to serve as directors but, if any of them should decline or be unable to act as a director, the individuals designated in the proxy card as proxies will exercise the discretionary authority provided to vote for the election of a substitute nominee selected by our Nominating Committee or our Board of Directors, unless the Board of Directors alternatively acts to reduce the size of the Board of Directors or maintain a vacancy on the Board of Directors in accordance with our bylaws. The Board of Directors has no reason to believe that any nominee listed below will be unable or unwilling to serve.
Each of the nominees meets the qualifications for directors as set forth in the Company's charter and bylaws. Each of the Company's nominees for director elected at the Annual Meeting will serve until the next annual meeting of stockholders following his election and until his successor is duly elected and qualifies or until his resignation, retirement or removal. We believe that all of the nominees possess the professional and personal qualifications necessary for Board service, and have highlighted particularity noteworthy attributes for each nominee in the individual biographies below.
Recommendation of the Board of Directors
THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR EACH OF THE NOMINEES FOR DIRECTOR, WITH EACH TO SERVE UNTIL THE NEXT ANNUAL MEETING OF STOCKHOLDERS AND UNTIL HIS OR HER SUCCESSOR IS DULY ELECTED AND QUALIFIES.
The following table sets forth certain information with respect to each of the persons who are nominated to serve as directors of the Company.
Name | | Age | | Title | Michael V. Shustek | | | 61
| | Chairman of the Board and Chief | Robert J. Aalberts
| | | 68
| | Executive Officer
Independent Director
| John E. Dawson | | | 62
| | Lead Independent Director | Shawn Nelson | | | 54
| | Independent Director | Directors of the Company | | | | | |
Michael V. Shustek has been Chief Executive Officer ofStockholders’ Agreement dated August 25, 2021 (the “Stockholders’ Agreement”) between the Company since its inception and currently serves as Chairman of the Board of Directors. Mr. Shustek also served as Chief Executive Officer and a director of MVP REIT, Inc., a Maryland corporation (“MVP I”), prior to the merger (the “Merger”) of MVP I with and into MVP Merger Sub,Color Up, LLC, a Delaware limited liability company (“Color Up”), the number of directors was increased from four to seven and Manuel Chavez III, Stephanie Hogue, Jeffrey Osher, Lorrence Kellar and Damon Jones were designated as nominees to the Board (the “Color Up Designated Directors”) by Color Up (and the Board nominated Danica Holley as a wholly-owned subsidiarynominee to the Board (the “Incumbent Director” and, together with the Color Up Designated Director, “New Directors”) and Messrs. Chavez, Osher, Kellar, Jones, and Meses. Hogue and Holley were elected to the Board, with terms expiring at the Annual Meeting and until their successors are duly elected and qualify.Five of the Company. Mr. ShustekCompany’s directors are independent as determined in accordance with the Charter and the NASAA REIT Guidelines. In accordance with the NASAA REIT Guidelines, the Charter defines an independent director as a director who is not and has served as chairmannot for the last two years been associated, directly or indirectly, with the Sponsor or Advisor of the board,Company (each as defined therein). A director is deemed to be associated with the Sponsor or the Advisor if the director owns any interest in, is employed by, is an officer or director of, or has any material business or professional relationship with the Sponsor, the Advisor or any of their affiliates, performs services (other than as a director) for the Company, or serves as a director or trustee for more than three (3) real estate investment trusts (“REITs”) sponsored by the Sponsor or advised by the Advisor. A business or professional relationship will be deemed material per se if the gross revenue derived by the director from the Sponsor, the Advisor or any of their affiliates exceeds five percent (5%) of (1) the director’s annual gross revenue derived from all sources during either of the last two years or (2) the director’s net worth on a fair market value basis. An indirect relationship is defined to include circumstances in which the director’s spouse, parents, children, siblings, mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in- law is or has been associated with the Company, the Sponsor, the Advisor or any of its affiliates. On March 29, 2019, Company and our former Advisor entered into definitive agreements to internalize the Company’s management function effective April 1, 2019 and therefore the Company no longer has an Advisor. In addition, in connection with the August 25, 2021 transactions, the Company’s former Sponsor, MVP Capital Partners II, LLC, no longer controls the Company. For more information regarding these transactions, see “Certain Relationships and Related Person Transactions” later in this Proxy Statement. The Charter also provides that, upon the comment commencement of an initial public offering, a majority of the directors must be independent directors and that at least one of the independent directors must have at least three years of relevant real estate experience. The independent directors are required to nominate replacements for vacancies among the independent directors under the Charter. The Board has determined that each of Jeffrey B. Osher, Lorrence T. Kellar, Danica Holley, Damon Jones and Shawn Nelson qualifies as an independent director under the Charter and NASAA REIT Guidelines. The Company refers to the directors who are not independent as the “Affiliated Directors.” Currently, the two Affiliated Directors are Manuel Chavez III, the Company’s Chief Executive Officer and Chairman of the Board, and Stephanie Hogue, the Company’s President. The Company’s directors are elected by the Company’s common stockholders on an annual basis. Any director may resign at any time and may be removed with or without cause by the stockholders upon the affirmative vote of stockholders entitled to cast at least a majority of all the votes entitled to be cast generally in the election of directors. The notice of any special meeting called to remove a director must indicate that the purpose, or one of Vestin Group since April 1999the purposes, of the meeting is to determine if the director will be removed. The Company has elected, pursuant to an election under Subtitle 8 of Title 3 of the Maryland General Corporation Law, to provide that a vacancy on our Board may be filled only by a vote of a majority of the remaining directors and a directorfor the remainder of the full term of the directorship in which the vacancy occurred and, Chief Executive Officer of Vestin Realty Mortgage II, Inc., a Maryland corporation (“VRM II”), and Vestin Realty Mortgage I, Inc., a Maryland corporation (“VRM I”), since January 2006.
In 2003, Mr. Shustek became the Chief Executive Officer of Vestin Originations, Inc. In 1997, Mr. Shustek was involved in the initial foundingcase of Nevada First Bank, with the largest initial capital base of any new state charter in Nevada’s history at that time.
Mr. Shustek received a Bachelor of Science degree in Finance at the University of Nevada, Las Vegas.
Mr. Shustek was selected to serve as a director because he is our Chief Executive Officer, has significant real estate experience and expansive knowledge of the real estate industry, and has relationships with chief executives and other senior management at numerous real estate companies. Based on the foregoing, the Board of Directors believes that Mr. Shustek will continue to bring a unique and valuable perspective to our Board of Directors.
John E. Dawson is one of our independent directors and, since April 13, 2019, has been our Lead Independent Director. He had also been a director of MVP I from the beginning of its operations until the date of the Merger. He was a director of Vestin Group from March 2000 to December 2005, was a director of VRM II from March 2007 until he resigned in November 2013 and was a director for VRM I from March 2007 until January 2008. Mr. Dawson has been a lawyer in private practice for over 30 years. Mr. Dawson received his Bachelor’s Degree in Accounting from Weber State University and his Juris Doctor from Brigham Young University. Mr. Dawson received his Masters of Law (L.L.M.) in Taxation from the University of San Diego in 1993. Mr. Dawson was admitted to the Nevada Bar in 1988 and the Utah Bar in 1989. Mr. Dawson was selected to serve as an independent director, the director must also be nominated by the remaining independent directors.Responsibilities of Directors The responsibilities of the members of the Board include: | • | approving and overseeing our overall investment strategy, which consists of elements such as investment selection criteria, diversification strategies and asset disposition strategies; | | • | approving and overseeing our debt financing strategies; | | • | approving joint ventures and other such relationships with third parties; | | • | approving a potential liquidity transaction; | | • | determining our distribution policy and authorizing distributions from time to time; and | | • | approving amounts available for repurchases of shares of our common stock. |
The directors have duties to the Company duearising from their capacity as directors of the Company. This means that each director must perform his or her duties in good faith and in a manner each director believes to his legal background and significant experiencebe in the real estate industry and his experience as a public company director.
Robert J. Aalberts servedCompany’s best interests. Further, each director must act with such care as an independent directorordinarily prudent person in a like position would use under similar circumstances, including exercising reasonable inquiry when taking actions. Our directors and executive officers will serve until their successors are elected and qualify. The directors are not required to devote all of MVP I,their time to the Company’s business and was a director of Vestin Group, Inc., from April 1999are only required to December 2005. He was a director for VRM I from January 2006 until he resigneddevote such time to the Company’s affairs as their duties require. The directors meet quarterly or more frequently as necessary.The Company will follow investment guidelines adopted by the Board and the investment and borrowing policies described in January 2008our annual report unless they are modified by our directors. The Board may establish additional written policies on investments and for VRM II from January 2006 until he resigned in November 2013. Most recently, Professor Aalberts was Clinical Professor of Business Lawborrowings and will monitor our administrative procedures, investment operations and performance to ensure that the policies are fulfilled and are in the Smeal Collegebest interests of Business at Pennsylvania State Universitythe Company. Any change in University Park, PA from 2014 to June 2017. Prior to his position at Penn State, Professor Aalberts held the Ernst Lied Professor of Legal Studies professorshipour investment limitations as set forth in the Lee CollegeCharter must be approved by the stockholders. In order to reduce or eliminate and address certain potential conflicts of Business atinterest, the University of Nevada, Las Vegas from 1991 to 2014. Before UNLV, Professor Aalberts was an Associate Professor of Business Law at Louisiana State University in Shreveport, LA from 1984 to 1991. From 1982 through 1984, he served as an attorney for the Gulf Oil Company in its New Orleans office, specializing in contract negotiations and mineral law. From 1992 to 2016, Professor Aalberts was the Editor-in-chiefCharter requires that a majority of the Real Estate Law Journal published by the Thomson-West Publishing Company. Professor Aalberts received his Juris Doctor degree from Loyola University in New Orleans, Louisiana,Board (including a Master of Arts from the University of Missouri, Columbia, and a Bachelor of Arts degree in Social Sciences and Geography from Bemidji State University in Minnesota. He was admitted to the State Bar of Louisiana in 1982 (currently inactive status). Mr. Aalberts was selected to serve as an independent directormajority of the Company due to his significant experienceIndependent Directors) not otherwise interested in the real estate industry and his experience as a public company director.
Shawn Nelson is one of our independent directors. Mr. Nelson previously served as an independent director of MVP I. Effective January 7, 2019, Mr. Nelson became the Chief Assistant District Attorney of Orange County, California. Mr. Nelson had served as a membertransaction approve any transaction with any of the Orange County BoardCompany’s directors, the Sponsor, the Advisor, or any of Supervisors in Orange County, California, since June 2010, serving as chairman in 2013 and 2014. Mr. Nelson previously served on the board of the Southern California Regional Rail Authority (Metrolink) and was the former Chairman. He was also previously a director of the Orange County Transportation Authority having served as the chair in 2014 and is a director of the South Coast Air Quality Management District, Southern California Association of Governments, Transportation Corridor Agency, Foothill/Eastern, Southern California Water Committee, Orange County Council of Governments and Orange County Housing Authority Board of Commissioners. Mr. Nelson resigned from his positions on the board of the Southern California Regional Rail Authority and the Orange County Transportation Authority effective January 7, 2019. From 1994 to 2010, Mr. Nelson was the managing partner of the law firm of Rizio & Nelson. From 1992 to 1994, he was the Leasing Director/Project Manager of S&P Company. Prior to that, from 1989 to 1992 Mr. Nelson served as the Leasing Director/Acquisitions Analyst for IDM Corp and from 1988 to 1989 he served as a Construction Superintendent for Pulte Homes. Mr. Nelson has a Bachelor of Science degree in business with a certificate in real property development from the University of Southern California and a Juris Doctor Degree from Western State University College of Law. Mr. Nelson was selected to serve as an independent director of the Company due to his legal background and significant experience in the real estate industry and his experience as a director.
Board'stheir affiliates.Board’s Role in Risk Oversight
The Board provides supervision and oversight of our risk management processes. Management identifies and prioritizes material risks, and each prioritized risk is referred to a Board committee or the full Board for supervision and oversight. For example, financial risks are referred to the Audit Committee. The Board regularly reviews information regarding our properties, loans, operations, liquidity and capital resources. The Board informally reviews the risks associated with these items at each quarterly Board meeting and at other Board meetings as deemed appropriate.
Board Leadership Structure
The Board leadership structure is currently comprised of (1) a combined Chairman of the Board of Directors and Chief Executive Officer (2) a Lead Independent Director, and (3) an independent Chair for each of our three standing Board committees described below. We do not have a Lead Independent Director. From time to time, the Nominating and Governance Committee and the entire Board of Directors review the Company'sCompany’s leadership structure, including the positions of Chairman of the Board and Chief Executive Officer and whether the Board should have a Lead Independent Director, to ensure the interests of the Company and its stockholders are best served. The Nominating and Governance Committee and the Board of Directors believe that the most effective leadership structure for the Company at this time is for Mr. ShustekChavez to serve as both the Chairman of the Board of Directors and Chief Executive Officer. Mr. Shustek’sChavez’s combined role as Chairman and Chief Executive Officer serves as a bridge between the Board of Directors and management and provides unified leadership for developing and implementing our strategic initiatives and business plans. The Board of Directors also believes that the combined Chairman and Chief Executive Officer structure provides clearer accountability to our stockholders and allows one person to speak for and lead the Company and the Board of Directors.Board. In addition, the Board of Directors believes that its information flow, meetings, deliberations, and decision- making processes are more focused, efficient, and effective when the Chairman and Chief Executive Officer roles are combined. The combined role is counterbalanced and enhanced by the effective oversight and independence of the Board of Directors and the leadership of the Lead Independent Director and independent committee chairs.Chairs. Moreover, the Board believes that the appointment of a strong Lead Independent Director and the use of executive sessions of the non-management and independent directors,Independent Directors, along with the Board of Directors'Board’s strong committee system, allow it to maintain effective oversight of management.
Lead Independent Director
Code of Ethics The Lead Independent Director's specific responsibilities include, among other things, presiding overCompany has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”), which contains general guidelines for conducting the Company’s business and is designed to help directors, employees and independent consultants resolve ethical issues in an increasingly complex business environment. The Code of Ethics applies to all meetingsof the Company’s officers, including the Company’s principal executive officer, principal financial officer, principal accounting officer, controller and persons performing similar functions, as well as all members of the Board. The Code of Ethics covers topics including, but not limited to, conflicts of interest, record keeping and reporting, payments to foreign and U.S. government personnel and compliance with laws, rules and regulations. The Company will provide to any person without charge a copy of the Code of Ethics, including any amendments or waivers, upon written request delivered to the Company’s principal executive office at the address listed on the cover page of this Proxy Statement. We intend to satisfy the requirements under Item 5.05 of Current Report on Form 8-K regarding disclosure of amendments to, or waivers from, provisions of the Code of Ethics that apply to the principal executive officer, principal financial officer or controller, or persons performing similar functions, by posting such information on our website. Criteria for Selecting Directors In evaluating candidates, our Nominating and Governance Committee will consider an individual’s business and professional experience, the potential contributions they could make to our Board and their familiarity with our business. Our Nominating and Governance Committee will consider candidates recommended by our directors, members of our management team and third parties. Our Nominating and Governance Committee will also consider candidates suggested by our stockholders. We do not have a formal process established for this purpose. However, for so long as the Stockholders’ Agreement is in effect, at each stockholders’ meeting of the Company at which directors are to be elected, (i) Color Up shall be entitled, any time prior to the mailing of the applicable proxy statement of the Company, to designate for nomination five (5) Color Up Designated Directors as members of the Board (or fewer if less than seven (7) members on the Board) and (ii) the Incumbent Directors to be nominated and elected at any such stockholders’ meeting shall be designated by a majority of the Incumbent Directors then in office. The Company agrees, to the fullest extent permitted by applicable law, to include in the slate of nominees recommended by the Board (or the Nominating and Governance Committee of the Board) for election at any annual or special meeting of stockholders of the Company at which directors are to be elected to the Board (or consent in lieu of meeting) the applicable Color Up Designated Directors and Incumbent Directors and to nominate, recommend and use its reasonable best efforts to solicit the vote of stockholders of the Company to elect to the Board such slate of directors (which efforts shall, to the fullest extent permitted by applicable law, include the inclusion in any proxy statement prepared, used, delivered or publicly filed by the Company to solicit the vote of its stockholders in connection with any such meeting the recommendation of the Board that the stockholders of the Company vote in favor of the slate of directors, including the Color Up Designated Directors and Incumbent Directors). For any meeting (or consent in lieu of meeting) of the Company’s stockholders for the election of members of the Board, the Board (or the Nominating and Governance Committee thereof) shall not nominate, in the aggregate, a number of nominees greater than the number of members of the Board. Such nominees shall serve in a manner consistent with the terms of the Charter and Bylaws. The Company believes that the arrangement set forth above is sufficient for the evaluation of future candidates to our Board. We do not have a formal diversity policy with respect to the composition of our Board. However, our Nominating and Governance Committee seeks to ensure that the Board is composed of directors whose diverse backgrounds, experience and expertise will provide the Board with a range of perspectives on matters coming before the Board. Stockholders may contact our Nominating and Governance Committee if they wish the committee to consider a proposed candidate. Stockholders should submit the names of any candidates in writing, together with background information about the candidate, and send the materials to the attention of the Company’s Secretary at the following address: 250 E. 5th Street, Suite 2110, Cincinnati, Ohio 45202; or via email at secretary@mobileIT.com. Communication with Directors The Company has established procedures for stockholders or other interested parties to communicate directly with the Board. Such parties can contact the Board by mail at the following address: Board of Directors at whichof Mobile Infrastructure Corporation, c/o Secretary, 250 E. 5th Street, Suite 2110, Cincinnati, Ohio 45202; or by emailing secretary@mobileIT.com. The Secretary will receive all communications made by these means and will distribute such communications to such member or members of the Chairman is not present, including executive sessionsBoard as they deem appropriate, depending on the facts and circumstances outlined in the communication received. For example, if any questions regarding accounting, internal controls and auditing matters are received, they will be forwarded by the Secretary to the members of independent directors, calling meetings of independent directors, functioning as a liaison with the Chairman, approving board meeting agendas and scheduling and conferring with the Chairman on strategic planning matters and transactions. Our current Lead Independent Director is John Dawson. Mr. Dawson is an engaged and active director, who is uniquely positioned to work collaboratively with Mr. Shustek, while providing strong independent oversight.
Vote Required
Audit Committee for review.Stockholder Proposals Under our current charterbylaws, for a stockholder proposal (including, but not limited to, nominations of candidates for director) to be properly submitted for presentation at the next annual meeting of stockholders, the Company’s secretary must have received written notice of the proposal at its principal executive offices no earlier than the 150th day and no later than 5:00 p.m. Pacific Time, on the 120th day prior to the first anniversary of the date of the proxy statement (as such term is defined in our current bylaws) for the preceding year’s annual meeting (or, for the 2022 annual meeting of stockholders, between June 19, 2022 and 5:00 p.m., Pacific Time, on July 19, 2022, based on November 16, 2021, the date this year’s Proxy Statement is released to stockholders). However, if the date of the 2022 annual meeting of stockholders is more than 30 days before or after December 23, 2022, the proposal must be received no earlier than the 150th day prior to the date of the 2022 annual meeting and no later than 5:00 p.m., Pacific Time, on the later of (i) the 120th day prior to the date of such meeting, as originally convened, or (ii) the tenth day following the day on which public announcement of the date of such meeting is made. Under SEC regulations, any stockholder desiring to make a proposal to be considered for inclusion in the Company’s proxy statement for the next annual meeting of stockholders pursuant to Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) must have caused such proposal to be received at Company’s principal executive offices no later than July 19, 2022, unless the date of the 2022 annual meeting of stockholders is more than 30 days before or after December 23, 2022, in which case the proposal must be received in a reasonable time before the Company begins to print and send its proxy materials. PROPOSAL NO. 1 - ELECTION OF DIRECTORS Based on the recommendation of the Nominating and Governance Committee of the Board, the Board nominated the seven directors listed below for election to the Board at the Annual Meeting. All of the nominees are willing to serve as directors but, if any of them should decline or be unable to act as a director, the individuals designated in the proxy card as proxies will exercise the discretionary authority provided to vote for the election of a substitute nominee selected by our Nominating and Governance Committee or our Board, unless the Board alternatively acts to reduce the size of the Board or maintain a vacancy on the Board in accordance with our bylaws. The Board has no reason to believe that any nominee listed below will be unable or unwilling to serve. Each of the nominees meets the qualifications for directors as set forth in the Charter and bylaws and the Stockholders’ Agreement. Each of the Company’s nominees for director elected at the Annual Meeting will serve until the next annual meeting of stockholders following their election and until his or her successor is duly elected and qualifies or until his or her earlier resignation, retirement or removal. We believe that all of the director nominees possess the professional and personal qualifications necessary for Board service, and have highlighted particularity noteworthy attributes for each director nominee in the individual biographies below. Directors to be Elected at the Annual Meeting The following is some important biographical information, including the ages and recent principal occupations, as of November 12, 2021, of the Company’s director nominees. The business address of each director nominee is c/o Mobile Infrastructure Corporation, 250 E. 5th Street, Suite 2110, Cincinnati, Ohio 45202. Included in each director nominee’s biography below are the attributes of that director consistent with the qualifications, attributes, skills and experience the Board has determined are important to be represented on the Board. Name | | Age | | Title | Manuel Chavez III | | 44 | | Affiliated Director and Chairman of the Board | Stephanie Hogue | | 42 | | Affiliated Director | Jeffrey B. Osher | | 44 | | Independent Director | Lorrence T. Kellar | | 84 | | Independent Director | Danica Holley | | 49 | | Independent Director | Damon Jones | | 46 | | Independent Director | Shawn Nelson | | 55 | | Independent Director | | | | | |
Manuel Chavezhas served as our Chief Executive Officer and Chairman of the Board since August 2021. Mr. Chavez is and has been the chief executive officer and founder of Bombe Asset Management LLC, a Cincinnati, Ohio-based alternative asset management firm affiliated with Color Up (“Bombe”), since 2017. Mr. Chavez held various positions of increasing responsibility at Parking Company of America, Inc. from 1999 to 2017. Mr. Chavez is also chief executive officer and a manager of Color Up. Mr. Chavez currently holds positions with the Greater Cincinnati Port Authority, the Cincinnati State Technical and Community College, the Cincinnati Art Museum and the Cincinnati Regional Business Committee. Mr. Chavez was selected to serve as a director of the Company because of his significant real estate experience and expansive knowledge of the real estate industry, and his relationships with chief executives and other senior management at numerous real estate companies. Based on the foregoing, the Board believes that Mr. Chavez will bring a unique and valuable perspective to our Board. Stephanie Hoguehas served as our President and a member of the Board since August 2021. Ms. Hogue has been the chief investment officer and managing partner of Bombe since 2020. From 2017 to 2020, Ms. Hogue was managing director and New York branch manager at PricewaterhouseCoopers Corporate Finance LLC, and from 2010 to 2017, Ms. Hogue was a director at PricewaterhouseCoopers Corporate Finance LLC. Ms. Hogue is also a manager of Color Up. Ms. Hogue currently serves on the board of governors of Public Media Connect, Inc., a non-profit organization that owns southwest Ohio’s largest Public Broadcasting Service member television stations, and is a director of the Indian Hill Club. Ms. Hogue was selected to serve as a director of the Company because of her significant experience in finance, capital markets and investing in infrastructure and real estate assets. Jeffrey B. Osher has served as a member of the Board since August 2021. Mr. Osher founded No Street Capital LLC, an investment management firm, in 2018. Prior to founding No Street Capital, LLC, Mr. Osher served as a portfolio manager at Harvest Capital Strategies, LLC, an SEC-registered investment advisor, from 2005 to 2018, and as an analyst from 2002 to 2005. Prior to his tenure at Harvest Capital Strategies, LLC, Mr. Osher was an analyst at The Dowd Company where he focused on technology and emerging growth companies. He has served on the board of directors of the Seal Family Foundation since 2016. He has also served on the board of directors of Green Dot Corporation since 2020 and was an advisor to the Green Dot Corporation’s board of directors from 2017 to 2020. He is also a manager of Color Up. Mr. Osher was selected to serve as a director of the Company due to his significant experience in financial services and investment and his experience as an executive and a public company director. Lorrence T. Kellarhas served as a member of the Board since August 2021. Mr. Kellar has been a trustee of Acadia Realty Trust since November 2003. Mr. Kellar was vice president at Continental Properties, a retail and residential developer, from 2002 until his retirement in 2009, a director of Spar Group, Inc., from 2003 to 2019 and chairman of Multi-Color Corporation from 1995 to 2012. Prior to joining Continental Properties, Mr. Kellar served as vice president of real estate with Kmart Corporation for six years and served with The Kroger Co., the United States’ largest supermarket company, for 31 years where his final position was group vice president of finance and real estate. Mr. Kellar currently serves as an emeritus trustee of Public Media Connect, Inc. a non-profit organization that owns southwest Ohio’s largest Public Broadcasting Service member television stations and an emeritus trustee of the Cincinnati Ballet. Mr. Kellar was selected to serve as a director of the Company due to his significant management and public company experience, including in the real estate industry and as a public company executive and director and member of the audit committee. Danica Holley has served as a member of the Board since August 2021. Ms. Holley has served as the chief operating officer of Global Medical REIT Inc. since March 2016. Ms. Holley’s business development and management experience spans more than 18 years with an emphasis on working in an international environment. She has extensive experience in international program management, government procurement, and global business rollouts and start-ups. As executive director for Safe Blood International Foundation since April 2008, she oversaw national health initiatives in Africa and Asia, including an Ebola response project. Ms. Holley has held management positions as director of strategy, corporate business development for WorldSpace, Inc. from 1997 to 2000, director of marketing for corporate and business at ISI Professional Services from 2000 to 2001 and director of administration at Tanzus Development from 1996 to 1997 and SK&I Architectural Design Group, LLC from 2003 to 2007. Ms. Holley was selected to serve as a director of the Company due to her significant business development and management experience, including as an executive officer at a publicly traded REIT that has had a similar growth trajectory to the Company. Damon Joneshas served as a member of the Board since August 2021. Mr. Jones has served as the chief communications officer of The Procter & Gamble Company (“P&G”) since April 2020. He served as vice president, global communications & advocacy at P&G from July 2018 to April 2020, and prior to that, as director, global company communications from August 2015 to June 2018. Prior to that, Mr. Jones held various other positions with increasing responsibility at P&G since 1997. Mr. Jones was selected to serve as a director of the Company due to his significant communications experience and his experience as a public company executive. Shawn Nelson has served as a member of the Board since January 2019. Mr. Nelson has served as the chief assistant district attorney of Orange County, California since January 2019. Mr. Nelson had served as a member of the Orange County Board of Supervisors in Orange County, California, since June 2010, serving as chairman in 2013 and 2014. Mr. Nelson previously served on the board of directors of the Southern California Regional Rail Authority (Metrolink) and was the former chairman. He was also previously a director of the Orange County Transportation Authority having served as the chair in 2014 and is a director of the South Coast Air Quality Management District, Southern California Association of Governments, Transportation Corridor Agency, Foothill/Eastern, Southern California Water Committee, Orange County Council of Governments and Orange County Housing Authority Board of Commissioners. Mr. Nelson resigned from his positions on the board of the Southern California Regional Rail Authority and the Orange County Transportation Authority effective in January 2019. From 1994 to 2010, Mr. Nelson was the managing partner of the law firm of Rizio & Nelson. From 1992 to 1994, he was the leasing director/project manager of S&P Company. Prior to that, from 1989 to 1992, Mr. Nelson served as the leasing director/acquisitions analyst for IDM Corp and from 1988 to 1989 he served as a construction superintendent for Pulte Homes. Mr. Nelson has a Bachelor of Science degree in business with a certificate in real property development from the University of Southern California and a Juris Doctor Degree from Western State University College of Law. Mr. Nelson was selected to serve as a director of the Company due to his legal background and significant experience in the real estate industry and his experience as a director. Vote Required Under the Charter and bylaws, and consistent with the requirements of the NASAA REIT Guidelines, the affirmative vote of the holders of a majority of the shares of our common stock entitled to vote who are present in person or by proxy at the Annual Meeting is required to elect each of the nominees named in this proxy statementProxy Statement as a director. Recommendation of the Board of Directors THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” ALL OF THE NOMINEES FOR DIRECTOR, WITH EACH TO SERVE UNTIL THE NEXT ANNUAL MEETING OF STOCKHOLDERS AND UNTIL HIS OR HER RESPECTIVE SUCCESSOR IS DULY ELECTED AND QUALIFIES.
DIRECTOR COMPENSATION Until November 16, 2021, each independent director received an annual cash retainer of $70,000, pro-rated for any partial year of service, with an additional $15,000 annual retainer (prorated for a partial term) paid to the Audit Committee chairperson. Effective November 16, 2021, each independent director will receive an annual cash retainer of $70,000, pro-rated for any partial year of service. An additional $15,000 in cash will also be paid to the chair of the Audit Committee and $10,000 in cash will also be paid to the chairs of the Compensation Committee and the Nominating and Governance Committee. All directors receive reimbursement of reasonable out-of-pocket expenses incurred in connection with attending meetings of the Board. Directors who are also employees of the Company are not entitled to any compensation for services rendered as a director. The Compensation Committee previously retained FTI Consulting as its independent consultant to provide guidance on various aspects of our independent director compensation program and to assist the Compensation Committee in designing an executive compensation program. Independent Directors Under the Company’s independent director compensation program in effect for the year ended December 31, 2020, the Company paid each independent director an annual retainer of $70,000 (prorated for a partial term), with an additional $15,000 annual retainer (prorated for a partial term) paid to the Audit Committee chairperson. The following table sets forth information with respect to our independent director compensation during the names,year ended December 31, 2020: Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)1 | | Total ($) | Michael V. Shustek2 | | $ - | | $ - | | $ - | John E. Dawson3 | | 87,500 | | 23,500 | | 111,000 | Robert J. Aalberts4 | | 61,250 | | 23,500 | | 84,750 | Nicholas Nilsen5 | | 61,250 | | 23,500 | | 84,750 | Shawn Nelson | | 96,250 | | 23,500 | | 119,750 | Total | | $ 306,250 | | $ 94,000 | | $ 400,250 |
____________________ 1 | Each of the Company’s independent directors were awarded 2,000 shares of the Company’s common stock at a price of $11.75 per share during the year ended December 31, 2020. |
2 | Mr. Shustek, the former Chief Executive Officer and Chairman of the Board, did not receive compensation for his services to the Board in 2020. Mr. Shustek’s 2020 compensation is described in the section below, titled “Summary Compensation Table.” Mr. Shustek resigned from all executive positions at the Company and all of the Company’s subsidiaries, including as Chief Executive Officer and Chairman of the Board, on August 25, 2021. |
3 | Mr. Dawson served as our Lead Independent Director for 2020 and as the chair of the Audit Committee for 2020. Mr. Dawson resigned from the Board on August 25, 2021. |
4 | Mr. Aalberts resigned from the Board on August 25, 2021. |
5 | Mr. Nilsen did not stand for re-election at the Company’s 2020 Annual Meeting of Stockholders held on December 28, 2020. |
EXECUTIVE OFFICERS The following is some important biographical information, including the ages and positionsrecent principal occupations, as of November 12, 2021, of the individuals who serve asCompany’s executive officers:
officers. The business address of the executive officers is c/o Mobile Infrastructure Corporation, 250 E. 5th Street, Suite 2110, Cincinnati, Ohio 45202.Name | Age | Title | Michael V. ShustekManuel Chavez III | 6144 | Chairman of the Board and Chief Executive Officer
| Daniel HubertyStephanie Hogue | 5242 | President and Chief Operating OfficerSecretary | J. Kevin Bland | 5758 | Chief Financial Officer and Treasurer |
Please see “Proposal One:No. 1: Election of Directors –— Directors of the Company” for information regarding Mr. Shustek.Chavez and Ms. Hogue. There are no family relationships among our executive officers and directors.
Daniel Huberty is the Company's President and Chief Operating Officer. Prior to his election as President and Chief Operating Officer in connection with the Internalization (as defined below), heJ. Kevin Blandhas served as Vice President of Parking Operations for the Advisor. Prior to his relationship with the Company, Mr. Huberty served as an Executive Vice President of SP Plus, where he oversaw the southern division of the company. He was named to this position after successfully overseeing the transition of his team through the integration of Central Parking and Standard Parking. SP Plus's clients included some of the nation's largest owners and operators of mixed-use projects, office buildings, hotels, stadiums and arenas, as well as, airports, hospitals and municipalities.
Prior to his role with SP Plus, Mr. Huberty served as a Vice President for Clean Energy Fuels, the largest provider of Compressed Natural Gas in the Country focusing on the parking industry, from June 2009 through September 2011. However, the majority of his career was spent with ABM Industries. During his nearly 17 years with ABM commencing in 1993, Mr. Huberty served in various roles starting as a Facility Manager, working his way up to Regional Manager, Regional Vice President, and finally Vice President of Sales for ABM's Parking Division. Mr. Huberty earned his BBA from Cleveland State University in 1991, and his MBA from the University of Phoenix in 1998.
Mr. Huberty is active in political affairs, serving as a State Representative for Texas House District 127, representing a constituency of more than 160,000 residents. Elected in 2010, he travels to the Capitol in Austin, Texas, every other year to represent them during the legislative session.
Mr. Huberty serves on the Board for the Be an Angel Fund, which is a non-profit board that supports profoundly deaf and handicapped children in Texas. Mr. Huberty is also a Board Member of the Lake Houston Chamber of Commerce in Harris County Texas, which has over 1,500 members focusing on growing the North East Region of Harris County. Mr. Huberty also served as a Trustee for the Humble Independent School District which has 42,000 students, from 2006 to 2010, serving as its President from 2009-2010.
J. Kevin Bland isour Chief Financial Officer of the Company and Treasurer since 2018. Mr. Bland is a certified public accountant. Mr. Blandaccountant and has over 25 years of experience as a financial professional and executive. Mr. Bland served as Chief Financial Officerchief financial officer of UMTH General Services, L.P. from June 2008 to November 2018. From 2007 to 2008, Mr. Bland served as Vice President, Controllervice president, controller and Principal Accounting Officerprincipal accounting officer of Pizza Inn, Inc. (Nasdaq: RAVE). Mr. Bland spent three years with Metromedia Restaurant Group as Vice President, Controllervice president, controller from 2005 to 2007 and Accounting Manageraccounting manager from 2001 to 2002. From 2003 to 2005, Mr. Bland was Company Controllercompany controller of Sendera Investment Group, LLC and controller of a homebuilding and land division with Lennar Corporation in Dallas, Texas from 2002 to 2003. Mr. Bland began his career with Ernst & Young in 1989. Mr. Bland earned a bachelor'sbachelor’s degree in accounting from The University of Texas at Austin in 1985 and an MBA from Texas Christian University in 1989.
Prior to April 1, 2019 (the effective date ofThe following “Summary Compensation Table” and footnotes summarize the Internalization), the Company had no employees. Eachtotal compensation of the Company’s named executive officers was employed or compensated byfor the former Advisor. Although the Company reimbursed the former Advisor for certain expenses incurred in connection with providing these services to the Company, prior to the Internalization, the Company did not pay any compensation directly to the Company’s executive officers. Consequently, through Marchyear ended December 31, 2019, we did not have a compensation policy or program for our executive officers.
This section discusses the material components of the executive compensation program that we provided in 2019 following the Internalization for our executive officers who are named in the “Summary2020. Summary Compensation Table” below (our “Named Executive Officers”). In 2019, our Named Executive Officers and their positions were as follows:Table Name and Principal Position | Fiscal Year | Salary ($)1 | Bonus ($) | Stock Awards ($) | All Other Compensation ($)1 | Total ($) | Manuel Chavez III2 Chief Executive Officer | 2020 | - | - | - | - | - | Stephanie Hogue3 President and Secretary
| 2020 | - | - | - | - | - | J. Kevin Bland Chief Financial Officer and Treasurer
| 2020 2019 | $250,000 $125,000 | $50,000 $90,000 | $50,000 - | - - | $350,000 $215,000 | Michael V. Shustek2 Former Chief Executive Officer
| 2020 2019 | $550,000 $275,000 | - $125,000 | - - | - - | $550,000 $400,000 | Daniel Huberty3 Former President and Chief Operating Officer | 2020 2019 | $300,00 $150,000 | - - | - - | - - | $300,000 $150,000 |
____________________________________________________________________
Michael V. Shustek, Chief Executive Officer (“CEO”);
Daniel Huberty, President and Chief Operating Officer (“COO”); and
James Kevin Bland, Chief Financial Officer (“CFO”).
1 | 2019 Salary reflects the amount that was paid to the named executive officers by the Company commencing on July 1, 2019, subsequent to the termination of a prior employee leasing arrangement. |
2 | Mr. Shustek resigned from all executive positions at the Company and all of the Company’s subsidiaries, including as Chief Executive Officer of the Company, effective August 25, 2021. The Board appointed Manuel Chavez III as Chief Executive Officer, effective August 25, 2021. For additional information with respect to this Mr. Shustek’s resignation, please see the section entitled “Certain Related Person Transactions” and the section entitled “Potential Payments Upon Termination or Change in Control” in this Proxy Statement. |
3 | Mr. Huberty resigned as the Company’s President and Chief Operating Officer, effective August 25, 2021. The Board appointed Stephanie Hogue as President, effective August 25, 2021 and the Board appointed Ms. Hogue as President and Secretary, effective October 5, 2021. Pursuant to the terms of Mr. Huberty’s employment agreement, in connection with his resignation, Mr. Huberty received a severance payment in the amount of $600,000, less applicable taxes and withholding. For additional information with respect to this agreement and Mr. Huberty’s separation, please see the section entitled “Certain Related Person Transactions” and the section entitled “Potential Payments Upon Termination or Change in Control” in this Proxy Statement. |
2019 SalariesCompensation Philosophy
TheOur named executive officers receive a base salary to compensate them for services rendered to our company.the Company. The base salary payable to each named executive officer is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. The named executive officer’s base salaries are set forth in employment agreements with the company and currently remain unchanged.
2019 Bonuses
Company described below.Any annual bonus or incentive pay for the Company’s Named Executive Officersour named executive officers is discretionary and determined by the Compensation Committee for the Chief Executive Officer and by the Compensation Committee with appropriate input from the Chief Executive Officer for the President and Chief Operating Officer and the Chief Financial Officer. The actual annual cash bonuses awarded to each named executive officer for 20192020 performance are set forth belowabove in the Summary Compensation Table in the column entitled “Bonus.”
As described below under “Employment Agreements”, pursuant to histhe 2019 Employment Agreement, eachAgreements (as defined below), certain of our Named Executive Officers isnamed executive officers were eligible to receive an annual target equity award. In light of the Company’s common stock not being listed on a public exchange during 2019,2020, no equity compensation was awarded to the company’s Named Executive OfficersCompany’s named executive officers in 2019.
2020.Retirement Plans and Health and Welfare Benefits
We currently maintain a 401(k) retirement savings plan for our employees, including our Named Executive Officers,named executive officers, who satisfy certain eligibility requirements. None of our Named Executive Officersnamed executive officers participated in the Company’s 401(k) retirement savings plan subsequent to the time in which they became Company employees following the end of the Employee Leasing Period under the Employee Leasing Agreement on June 30, 2019.2020. The Internal Revenue Code (the “Code”) allows eligible employees to defer a portion of their compensation, within prescribed limits, on a pre-tax basis through contributions to the 401(k) plan. We are permitted to make Safe Harbor matching contributions under the 401(k) plan as follows: 100% of the first 3% of the participant’s compensation and 50% up to the next 2% of the participant’s compensation, with these matching contributions being fully vested as of the date on which the contribution is made. We believe that providing a vehicle for tax-deferred retirement savings though our 401(k) plan adds to the overall desirability of our executive compensation package and further incentivizes our employees, including our Named Executive Officers,named executive officers, in accordance with our compensation policies. We do not currently provide for pension plans, supplemental retirement plans or deferred compensation plans for our Named Executive Officers.
named executive officers.Our Named Executive Officers,named executive officers are eligible to participate in the health insurance, life insurance, disability benefits and other welfare programs that are provided generally to our employees.
Perquisites and Other Personal Benefits
We do not currently provide our Named Executive Officersnamed executive officers with any material perquisites or other personal benefits.
Summary Compensation Table
The following Summary Compensation Table shows compensation paid or accrued by us for services rendered from April 1, 2019 through December 30, 2019 to the Named Executive Officers:
Name and Principal Position | Fiscal Year | | Salary ($)1 | | | Bonus ($) | | | Stock Awards ($) | | | All Other Compensation ($) (1) | | | Total ($) | | Michael V. Shustek | 2019 | | $ | 275,000 | | | | 125,000 | | | | - | | | | - | | | $ | 400,000 | | | Chief Executive Officer | | | | - | | | | - | | | | - | | | | - | | | | - | | Daniel Huberty | 2019 | | $ | 150,000 | | | | - | | | | - | | | | - | | | $ | 150,000 | | | President and Chief Operating Officer | | | | - | | | | - | | | | - | | | | - | | | | - | | J. Kevin Bland | 2019 | | $ | 125,000 | | | $ | 90,000 | | | | - | | | | - | | | $ | 215,000 | | | Chief Financial Officer | | | | - | | | | - | | | | - | | | | - | | | | - | |
1 Salary reflects the amount that was paid to the Named Executive Officers by the Company commencing with the period they became Company employees following the end of the Employee Leasing Period under the Employee Leasing Agreement on June 30, 2019.
In connection with the Internalization, the2019 Employment Agreements The Company entered into employment agreements (collectively, the “Employment“2019 Employment Agreements”) with each of our Named Executive Officersthen serving named executive officers on March 29, 2019.
As part of the Company’s transition to self-management, the Compensation Committee retained FTI Consulting as an independent compensation consultant to advise the Compensation Committee with respect to the terms of the 2019 Employment Agreements.
FollowingThe following is a brief summary and discussion of the terms of the 2019 Employment Agreements.
Term. Term. Each of the 2019 Employment Agreements provides for a three-year initial term that commenced on July 1, 2019 and ends on the third anniversary of such date. Thereafter, the employment term extends automatically for successive one-year periods unless either the Executiveexecutive or the Company provides notice of non-renewal to the other party at least ninety (90) days before the end of the then-existing term.
Duties. Duties. The 2019 Employment Agreements provide that the CEO,Chief Executive Officer, the COOChief Operating Officer and the CFOChief Financial Officer will perform duties and provide services to us that are customarily associated with the duties, authorities and responsibilities of persons in similar positions, as well as such other duties as may be assigned from time to time. The 2019 Employment Agreements also provide that the Executivesexecutives generally will devote substantially all of their business time and attention to the business and affairs of the Company, except that the Executivesexecutives may engage in certain outside activities that do not materially interfere with the performance of their duties.
Compensation. Compensation. The 2019 Employment Agreements provide that the CEO,Chief Executive Officer, the COOChief Operating Officer and the CFOChief Financial Officer will receive an annual initial base salary of $550,000, $300,000 and $250,000, respectively. The CEO, COOChief Executive Officer, the Chief Operating Officer and CFOthe Chief Financial Officer will be eligible to receive a target annual incentive award of not more than $250,000, $153,000 and $50,000, respectively, and each will be eligible to receive an annual target equity award of not more than $1,000,000, $153,000 and $130,000 in the form of restricted shares of common stock, respectively. Each annual equity award shall vest equally in annual installments over a three-year period. The amounts and conditions for the payment and vesting (as applicable) of each target annual incentive award and each annual target equity award will be determined by the Compensation Committee. The Company, at its discretion, may pay any target annual incentive awards payable to the COOChief Operating Officer or the CFOChief Financial in cash or shares of common stock. Each of the Executivesexecutives will be eligible to participate in employee benefit programs made available to the Company’s employees from time to time and to receive certain other perquisites, each as set forth in their respective 2019 Employment Agreements.
Severance Payments . Payments. The CEOChief Executive Officer 2019 Employment Agreement provides that, subject to the execution of a release and other conditions set forth in the CEOChief Executive Officer 2019 Employment Agreement, upon a “qualifying termination” (as defined in the CEOChief Executive Officer Employment Agreement), the CEOChief Executive Officer will be entitled to severance based on a multiple of the total of the CEO’sChief Executive Officer’s then-current annual base salary plus the amount of the last annual incentive award earned by the CEOChief Executive Officer in the year prior to termination (referred to herein as “total cash compensation”). If the qualifying termination results from the death or disability of the CEO,Chief Executive Officer, the CEOChief Executive Officer will be entitled to severance equal to one times (1x)(lx) his total cash compensation. If the CEOChief Executive Officer is terminated by the Company without “cause” (as defined in the CEOChief Executive Officer 2019 Employment Agreement), or the CEOChief Executive Officer quits for “good reason” (as defined in the CEOChief Executive Officer 2019 Employment Agreement) or the Company elects not to renew the term of the CEO employment agreement,Chief Executive Officer 2019 Employment Agreement, then the CEOChief Executive Officer will be entitled to severance equal to two times (2x) his total cash compensation. In the event that any qualifying termination occurs on or within 12twelve (12) months after a change in control of the Company, the CEOChief Executive Officer will be entitled to severance equal to three times (3x) his total cash compensation.
The COOChief Operating Officer and CFOthe Chief Financial Officer 2019 Employment Agreements provide that, subject to the execution of a release and other conditions set forth in the 2019 Employment Agreements, the COOChief Operating Officer and CFOthe Chief Financial Officer will be entitled to receive severance based on a multiple of the sum of their annual base salary and target annual incentive award (referred to herein as “total cash compensation”). If the COOChief Operating Officer is terminated due to his death or disability or if the COOChief Operating Officer 2019 Employment Agreement is not renewed by the Company during the first five years of the term of such agreement, then the COOChief Operating Officer will be entitled to severance equal to one times (1x)(lx) his total cash compensation. Such severance is not payable if the COOChief Operating Officer 2019 Employment Agreement is not renewed by the Company after the first five years of the term. If the COOChief Operating Officer is terminated without “cause” or the COOChief Operating Officer quits for “good reason,” (each as defined in the COOChief Operating Officer 2019 Employment Agreement), he will be entitled to severance equal to two times (2x) his total cash compensation. If the CFOChief Financial Officer is terminated due to his death or disability, he is terminated by the Company without “cause” or he quits for “good reason,” (each as defined in the CFOChief Financial Officer 2019 Employment Agreement) then the CFOChief Financial Officer will be entitled to severance equal to one times (1x)(lx) his total cash compensation. If the CFOChief Financial Officer is terminated without “cause” or quits for “good reason”, in each case, on or within 12twelve (12) months after a change in control of the Company, then the CFOChief Financial Officer will be entitled to severance equal to one and one- half times (1.5x) his total cash compensation.
Upon termination where severance is due and payable, the 2019 Employment Agreements also provide that the Executivesexecutives will be entitled to receive (i) unpaid base salary earned through the termination date; (ii) any restricted shares of common stock that have vested as of the termination date; (iii) all other equity-based awards held by the Executiveexecutive (which, to the extent subject to time-based vesting, will vest in full at the termination date); (iv) health insurance coverage, including through COBRA, for an 18 month period following the termination date (other than, with respect to the COOChief Operating Officer and CFOthe Chief Financial Officer in the event of a termination due to death, disability or non-renewal); and (v) reimbursements of unpaid business expenses.
Non-Competition, Non-Solicitation and Confidentiality . Confidentiality. Each 2019 Employment Agreement provides that for a two-year period following the termination of the Executive’sexecutive’s employment with us, the executive will not solicit our employees or consultants or any of our customers, vendors or other parties doing business with us. Pursuant to that certain Contribution Agreement, effective as of April 1, 2019, by and among the Company, VRMI, VRMII, MVP Realty Advisors, LLC d/b/a The Parking REIT Advisors and Michael V. Shustek, the Chief Executive Officer has agreed not to compete with us for a period of three years after the effective date of such agreement. Pursuant to the Chief Operating Officer and Chief Financial Officer 2019 Employment Agreements, each of the Chief Operating Officer and the Chief Financial Officer has agreed not to compete with us for a period of two years following the termination of their employment with us. Each 2019 Employment Agreement also contains covenants relating to the treatment of confidential information, Company property and certain other matters.On August 25, 2021, Michael V. Shustek resigned from all executive positions he held at the Company and all of the Company’s subsidiaries, including as Chief Executive Officer of the Company, and from the Board of the Company. Also on August 25, 2021, Daniel Huberty resigned from all executive positions he held at the Company, including as President and Chief Operating Officer. The 2019 Employment Agreements with respect to Messrs. Shustek and Huberty terminated on August 25, 2021 in connection with their resignations. The 2019 Employment Agreement with the Company’s Chief Financial Officer, J. Kevin Bland, remains in effect. 2021 Employment Agreements In connection with their employment, the Company entered into employment agreements (collectively, the “2021 Employment Agreements”) with each of Manuel Chavez III and Stephanie Hogue on August 25, 2021. The Compensation Committee retained an independent compensation consultant to assist in determining Mr. Chavez’s and Ms. Hogue’s compensation packages under the 2021 Employment Agreements. The following is a brief summary and discussion of the terms of the 2021 Employment Agreements: Term. Each of the 2021 Employment Agreements provides for a three-year initial term that commences on the Employment Effective Date (as defined in each of the 2021 Employment Agreements) and ends on the third anniversary of such date. Thereafter, the employment term extends automatically for successive one-year periods unless either the executive or the Company provides notice of non-renewal to the other party at least ninety (90) days before the end of the then-existing term. Duties. The 2021 Employment Agreements provide that the Chief Executive Officer and the President will perform duties and provide services to us that are customarily associated with the duties, authorities and responsibilities of persons in similar positions as well as such other duties as may be assigned from time to time. The 2021 Employment Agreements also provide that the executives generally will devote substantially all of their business time and attention to the business and affairs of the Company, except that the executives may engage in certain outside activities that do not materially interfere with the performance of their duties, including serving as an officer and other capacities with respect to Color Up and its affiliates. Compensation. The 2021 Employment Agreements provide that the Chief Executive Officer and President will receive an annual initial base salary of $600,000 and $450,000, respectively. The Chief Executive Officer and President will be eligible to receive a target annual bonus of not more than 33.33% of their base salary, and each will be eligible to receive an annual target equity award of not more than $1,000,000, and $600,000 in restricted shares of common stock, respectively. Each annual equity award shall vest equally in annual installments over a three-year period. The amounts and conditions for the payment and vesting (as applicable) of each target annual incentive award and each annual target equity award will be determined by the Compensation Committee. The Chief Executive Officer and President have the right to elect to receive their base salary and their target annual bonus payments in the form of restricted shares of common stock. Each of the executives will be eligible to participate in employee benefit programs made available to the Company’s employees from time to time and to receive certain other perquisites, each as set forth in their respective 2021 Employment Agreements. In addition, the Chief Executive Officer and the President will receive $2,000,000 and $1,200,000 in unvested restricted shares of common stock, respectively, which shares shall vest only upon the occurrence of a Liquidity Event (as defined in the 2021 Employment Agreements), within three years of the effective date of the 2021 Employment Agreements, provided that the Chief Executive Officer and President, respectively, remain employed with the Company on the date of the Liquidity Event, unless such officer is terminated by the Company without cause or resigns for good reason within 180 days of a Liquidity Event. The Compensation Committee retained an independent compensation consultant to assist in determining the Chief Executive Officer’s and President’s compensation packages. Severance Payments. The 2021 Employment Agreements provide that, subject to the execution of a release and other conditions set forth in the 2021 Employment Agreements, upon a “qualifying termination” (as defined in the 2021 Employment Agreements), the executives will be entitled to severance based on a multiple of the total of each executive’s then-current annual base salary plus the amount of the Target Bonus Amount (as defined in the 2021 Employment Agreements) for the Company’s most recently completed fiscal year prior to termination (referred to herein as “total cash compensation”). If the qualifying termination results from the death or disability of the executive, the executive will be entitled to severance equal to one times (1x) their total cash compensation. If the executive is terminated by the Company without “cause” (as defined in the 2021 Employment Agreements), the executive quits for “good reason” (as defined in the 2021 Employment Agreements) or the Company elects not to renew the term of the 2021 Employment Agreements, then the executive will be entitled to severance equal to two times (2x) their total cash compensation. In the event that any qualifying termination occurs on or within twelve (12) months after a change in control of the Company, the executives will be entitled to severance equal to three times (3x) their total cash compensation. Upon termination where severance is due and payable, the 2021 Employment Agreements also provide that the executives will be entitled to receive (i) unpaid base salary earned through the termination date; (ii) any restricted shares of common stock that have vested as of the termination date; (iii) all other equity-based awards held by executive, to the extent subject to time-based vesting, will vest in full at the termination date; (iv) health insurance coverage, including through COBRA, for an 18 month period following the termination date; and (v) reimbursements of unpaid business expenses. Non-Competition, Non-Solicitation and Confidentiality. The 2021 Employment Agreements provide that for a two-year period following the termination of an executive’s employment with us, each of the executives will not solicit our employees or consultants or any of our customers, vendors or other parties doing business with us. Pursuant to the Contribution Agreement (as defined below), the CEO has agreed not to compete with us for a period of three years after the Effective Date (as defined below). Pursuant to the COO and CFO2021 Employment Agreements, each of the COO and CFOexecutives has agreed not to compete with us for a period of two years following the termination of their employment with us. Each 2021 Employment Agreement also contains covenants relating to the treatment of confidential information, Companycompany property and certain other matters.
The 2021 Employment Agreements also contain a non-disparagement covenant.-12-
Independent Directors
UnderLong-Term Incentive Plan The Board adopted the Company’s independent director compensation program in effect until June 5, 2019, the Company paid each independent director an annual retainer of $30,000 (to be prorated for a partial term), with an additional $5,000 annual retainer (to be prorated for a partial term) paid to the Audit Committee chairperson. Each independent director also received $500 for each meeting of the board of directors attended in-person or by telephone.
On April 13, 2019, the Board of Directors voted to change the compensation structure of independent directors. Effective June 5, 2019, the date of the Company’s 2019 annual shareholder meeting, each independent director will receive an annual cash retainer of $70,000, pro-rated for any partial year of service. An additional $20,000 in cash will also be paid to the Lead Independent Director and an additional $15,000 in cash will be paid to the chair of the Audit Committee. In the event that the Company’s stock is listed on a public exchange, each independent director will receive his or her compensation for services on the Board in stock until he or she holds shares of the Company's stock equal to $105,000 (i.e., three times the anticipated cash portion of his or her annual retainer following any such listing), and once the threshold is met, each independent director will receive his or her annual retainer half in shares of stock and half in cash.
In light of the Company’s common stock not being listed on a public exchange during 2019, the decision was made following the April 13, 2019 meeting of the Board of Directors to not pay the full annual cash retainer under the new compensation structure for independent directors and only pay one half of the annual cash retainer during the remainder of 2019. Commencing January 1, 2020, the full annual cash retainer of $70,000 is expected to be paid.
All directors receive reimbursement of reasonable out-of-pocket expenses incurred in connection with attending meetings of the Board of Directors. Directors who are also employees of the Company are not entitled to any compensation for services rendered as a director. The Compensation Committee retained FTI Consulting as its independent consultant to provide guidance on various aspects of our independent director compensation program and to assist the Compensation Committee in designing an executive compensation program.
The following table sets forth information with respect to our independent director compensation during the fiscal year ended December 31, 2019:
| Name (1) | | Fees Earned or Paid in Cash | | | Total ($) | | David Chavez (2) | | $ | 11,250 | | | $ | 11,250 | | | John E. Dawson (3) | | | 60,333 | | | | 60,333 | | | Robert J. Aalberts | | | 56,292 | | | | 56,292 | | | Nicholas Nilsen | | | 39,167 | | | | 39,167 | | | Shawn Nelson | | | 63,821 | | | | 63,821 | | | Hilda Delgado (4) | | | 11,666 | | | | 11,666 | | | John Alderfer (5) | | | 6,250 | | | | 6,250 | | | William Wells (2) | | | 11,250 | | | | 11,250 | | | Total | | $ | 260,029 | | | $ | 260,029 | |
(1) | Mr. Shustek, the Chairman of the Board and our CEO, did not receive compensation for his services on our Board in 2019. Mr. Shustek’s 2019 compensation is described in the section above, titled “Summary Compensation Table.” |
(2) | The Nominating Committee did not re-nominate Mr. Wells nor Mr. Chavez were in June 2019 at our annual stockholders meeting. Each of these directors served out their terms, which ended on June 5, 2019. The amounts shown in the table above reflect their pro-rated fees for 2019. |
(3) | Mr. Dawson served as our Lead Independent Director for 2019 and as the chair of the Audit Committee for 2019. |
(4) | Ms. Delgado resigned from the Board on August 9, 2019. |
(5) | Mr. Alderfer resigned from the Board on July 16, 2019. |
Long-Term2015 Incentive Plan
The Company’s Board of Directors has adopted a long-term incentive plan (the “Long-Term Incentive Plan”) which the Company may use to attract and retain qualified directors, officers, employees and consultants. The Company’s long-term incentive planLong-Term Incentive Plan will offer these individuals an opportunity to participate in the Company’s growth through awards in the form of, or based on, the Company’s common stock. The Company does not currently expect to issue awards under the Company’s long- term incentive planLong-Term Incentive Plan prior to such time as the Company’s stock becomes publicly traded, although it may do so in the future, including possible equity grants to the Company’s independent directors as a form of compensation.
The long-term incentive planLong-Term Incentive Plan authorizes the granting of restricted stock, stock options, stock appreciation rights, restricted or deferred stock units, dividend equivalents, other stock-based awards and cash-based awards to directors, officers, employees and consultants of the Company and the Company’s affiliates selected by the board of directorsBoard for participation in the Company’s long-term incentive plan.Long-Term Incentive Plan. Stock options granted under the long-term incentive planLong-Term Incentive Plan will not exceed an amount equal to 10% of the outstanding shares of the Company’s common stock on the date of grant of any such stock options. Stock options may not have an exercise price that is less than the fair market value of a share of the Company’s common stock on the date of grant.
The Company’s board of directorsBoard or a committee appointed by its board of directorsBoard will administer the long-term incentive plan,Long-Term Incentive Plan, with sole authority to determine all of the terms and conditions of the awards, including whether the grant, vesting or settlement of awards may be subject to the attainment of one or more performance goals. No awards will be granted under the long-term incentive planLong-Term Incentive Plan if the grant or vesting of the awards would jeopardize the Company’s status as a REITReal Estate Investment Trust under the Code or otherwise violate the ownership and transfer restrictions imposed under its charter.Charter. Unless otherwise determined by the Company’s board of directors,Board, no award granted under the long- term incentive planLong-Term Incentive Plan will be transferable except through the laws of descent and distribution.
The Company has authorized and reserved an aggregate maximum number of 500,000 common shares for issuance under the long-term incentive plan.Long-Term Incentive Plan. In the event of a transaction between the Company and its stockholders that causes the per-share value of the Company’s common stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering or large nonrecurring cash dividend), the share authorization limits under the long- term incentive planLong-Term Incentive Plan will be adjusted proportionately and the board of directorsBoard will make such adjustments to the long- term incentive planLong-Term Incentive Plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction. In the event of a stock split, a stock dividend or a combination or consolidation of the outstanding shares of common stock into a lesser number of shares, the authorization limits under the long-term incentive planLong-Term Incentive Plan will automatically be adjusted proportionately and the shares then subject to each award will automatically be adjusted proportionately without any change in the aggregate purchase price.
The Company’s board of directorsBoard may, in its sole discretion, at any time, determine that all or a portion of a participant’s awards will become fully vested. The boardBoard may select among participants or among awards in exercising such discretion. The long-term incentive planLong-Term Incentive Plan will automatically expire on the tenth anniversary of the date on which it is approved by the board of directorsBoard and stockholders, unless extended or earlier terminated by the board of directors.Board. The Company’s board of directorsBoard may terminate the long-term incentive planLong-Term Incentive Plan at any time. The expiration or other termination of the long-term incentive planLong-Term Incentive Plan will not, without the participant’s consent, have an adverse impact on any award that is outstanding at the time the long-term incentive planLong-Term Incentive Plan expires or is terminated. The board of directorsBoard may amend the long-term incentive planLong-Term Incentive Plan at any time, but no amendment will adversely affect any award without the participant’s consent and no amendment to the long-term incentive planLong-Term Incentive Plan will be effective without the approval of the Company’s stockholders if such approval is required by any law, regulation or rule applicable to the long-term incentive plan.
During the years ended December 31, 20192020 and 2018,2019, no grants were made under the long-term incentive plan.Long-Term Incentive Plan.
Compensation Committee Interlocks2020 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END During the years ended December 31, 2020 and Insider Participation
Other than Michael V. Shustek,2019, no membergrants were made under the Long-Term Incentive Plan or otherwise to our then-named executive officers and there were no outstanding equity awards as of the Company’s boardeither date.POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL Our 2019 Employment Agreements and 2021 Employment Agreements provide for certain severance payments and vesting of directors served as an officer, and no membershares of the Company’s board of directors served as an employee,our common stock to our named executive officers in certain circumstances in connection with a qualifying termination, including following a change in control of the Company as further described above under “Employment Agreements”. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Directors and Executive Officers The following table sets forth the total number and percentage of common stock beneficially owned as of November 12, 2021, by: | • | Each director and director nominee; | | • | Each of our named executive officers set forth in the section entitled “Executive Compensation – Summary Compensation Table” in this Proxy Statement; and | | • | All our current executive officers and directors as a group. |
| | | Common Shares Beneficially Owned | Name and Address* | | Number | | Percent | Manuel Chavez III1 | | 2,624,831 | | 33.81% | Stephanie Hogue1 | | 2,624,831 | | 33.81% | Jeffrey B. Osher1 | | 2,624,831 | | 33.81% | J. Kevin Bland | | 4,255 | | ** | Lorrence T. Kellar | | - | | - | Danica Holley | | - | | - | Damon Jones | | - | | - | Shawn Nelson | | 2,000 | | ** | Michael V. Shustek | | - | | - | Dan Huberty | | 3,599 | | ** | John E. Dawson | | 4,570 | | ** | Robert J. Aalberts | | 2,000 | | ** | Nicholas Nilsen | | 4,141 | | ** | | | | | | | All directors and executive officers as a group (eight persons) | | 2,645,396 | | 33.81% | | | | | | |
______________________________________________________ * | Unless otherwise noted, (i) the percentage ownership is calculated based on 7,762,375 shares of our total outstanding common stock as of November 12, 2021, and (ii) the business address of the individuals named above is c/o Mobile Infrastructure Corporation, 250 E. 5th Street, Suite 2110, Cincinnati, Ohio 45202. The business address for Michael V. Shustek, c/o Vestin Realty Mortgage II, Inc., 9130 W. Post Road, Suite 130, Las Vegas, Nevada 89148. The business address for Robert J. Aalberts is 311 Vallarte Drive, Henderson, Nevada 89014. The business address for Nicholas Nilsen is 3074 Soft Horizon Way, Las Vegas, Nevada 89135. |
1 | Based on a Schedule 13D/A filed with the SEC by Mr. Chavez, Ms. Hogue, Mr. Osher, Color Up and HSCP Strategic III, L.P., a Delaware limited partnership and member of Color Up (“HS3”), on November 9, 2021. The shares of common stock are directly owned by Color Up. The amounts included in the above table exclude: (i) the 7,481,623 shares of common stock which may be issued upon redemption of the 7,481,623 Common Units (“OP Units”) of MVP REIT II Operating Partnership, L.P, a Delaware limited partnership (the “Operating Partnership”) of which the Company is the sole general partner owned by Color Up; (ii) the 1,702,128 shares of common stock which may be issued upon redemption of the 1,702,128 OP Units owned by HS3; or (iii) the 425,532 shares of common stock which may be issued upon redemption of the 425,532 OP Units which HS3 may purchase upon exercise of the 425,532 Class A Units it owns, subject to adjustment as provided in the Class A Unit Agreement, all as further described below in “Certain Related Person Transactions”. The Company may elect, at its option, to pay cash in lieu of issuing shares of common stock for all or any redeemed OP Units. The amounts included in the above table also exclude the shares of common stock issuable upon the exercise of warrants held by Color Up. Each identified reporting person in the Schedule 13D/A beneficially owned 2,624,831 shares of Common Stock as of November 9, 2021. Color Up has sole dispositive power over all 2,624,831 shares of Common Stock and sole voting power over all 2,624,831 shares of common stock. Each of Mr. Chavez, Ms. Hogue, Mr. Osher and HS3 has shared dispositive power over all shares of common stock and shared voting power over all shares of common stock. |
2 | The amounts included in the above table exclude 1,750 shares of common stock issuable upon the exercise of warrants held by Mr. Dawson. |
Principal Stockholders Shown below is certain information as of November 9, 2021, with respect to beneficial ownership, as that term is defined in Rule 13d-3 under the Exchange Act, of shares of common stock by the only persons or entities known to us to be a beneficial owner of more than 5% of the outstanding shares of common stock. Unless otherwise noted, the percentage ownership is calculated based on 7,762,375 shares of our common stock outstanding as of November 12, 2021. Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | Color Up, LLC1 Manuel Chavez III Stephanie Hogue Jeffrey B. Osher 250 E. 5th Street, Suite 2110 Cincinnati, Ohio 45202 | Sole voting and investment power of 2,624,831 shares1 | 33.81% | | | | HSCP Strategic III, L.P.1 503 Montgomery Street, Suite 1250 San Francisco, California 94111 | Shared investment power of 2,624,831 shares1 | 33.81% |
1 | Based solely on a Schedule 13D/A filed with the SEC by Mr. Chavez, Ms. Hogue, Mr. Osher, Color Up and HS3 on November 9, 2021. The shares of common stock are directly owned by Color Up. The amounts included in the above table exclude: (i) the 7,481,623 shares of common stock which may be issued upon redemption of the 7,481,623 OP Units owned by Color Up; (ii) the 1,702,128 shares of common stock which may be issued upon redemption of the 1,702,128 OP Units owned by HS3; or (iii) the 425,532 shares of common stock which may be issued upon redemption of the 425,532 OP Units which HS3 may purchase upon exercise of the 425,532 Class A Units it owns, subject to adjustment as provided in the Class A Unit Agreement, all as further described below in “Certain Related Person Transactions”. The Company may elect, at its option, to pay cash in lieu of issuing shares of common stock for all or any redeemed OP Units. The amounts included in the above table also exclude the shares of common stock issuable upon the exercise of warrants held by Color Up. Each identified reporting person in the Schedule 13D/A beneficially owned 2,624,831 shares of Common Stock as of November 9, 2021. Color Up has sole dispositive power over all 2,624,831 shares of Common Stock and sole voting power over all 2,624,831 shares of common stock. Each of Mr. Chavez, Ms. Hogue, Mr. Osher and HS3 has shared dispositive power over all shares of common stock and shared voting power over all shares of common stock. |
PROPOSAL NO. 2 – ADVISORY (NON-BINDING) VOTE TO APPROVE EXECUTIVE COMPENSATION As required by Section 14A of the Exchange Act, the Company seeks a non-binding advisory vote from its stockholders to approve the compensation of its subsidiaries duringnamed executive officers as described in the year ended December 31, 2019. In addition, duringsection entitled “Executive Compensation” in this Proxy Statement. Our executive compensation is designed to reward executive performance that contributes to our success and increases stockholder value, while encouraging behavior that is in our and our stockholders’ long-term best interests. Because your vote is advisory, it will not be binding upon our Board or our Compensation Committee; however, our Board values stockholders’ opinions and our Compensation Committee will take into account the year ended December 31, 2019, noneoutcome of the vote, among other things, when considering future executive compensation decisions. Our Board recommends that stockholders vote for the following resolution: RESOLVED: That the stockholders of the Company approve, on a non-binding, advisory basis, the compensation paid by the Company to the Company’s named executive officers, served as a member of the Compensation Committee (or other committee of the Company’s board of directors performing equivalent functions or, in the absence of any such committee, our entire board of directors) of any entity that has one or more executive officers serving as a member of the Board of Directors or Compensation Committee.
Board of Directors
The Company operates under the direction of the Company’s board of directors, the members of which are accountable to the Company and the stockholders as fiduciaries. The board of directors is responsible for directing the management of the Company’s business and affairs.
The Company has a total of five directors, four of whom are independent from the former Advisor, MVP Capital Partners II (the “Sponsor”) and their respective affiliates as determined in accordance with the NASAA REIT Guidelines. The NASAA REIT Guidelines require the Company’s charter to define an independent director as a director who is not and has not for the last two years been associated, directly or indirectly, with the Sponsor or the former Advisor. A director is deemed to be associated with the Sponsor or the former Advisor if he or she owns any interest in, is employed by, is an officer or director of, or has any material business or professional relationship with the Sponsor, the former Advisor or any of their affiliates, performs services (other than as a director) for the Company, or serves as a director or trustee for more than three REITs sponsored by the Sponsor or advised by the former Advisor. A business or professional relationship will be deemed material per se if the gross revenue derived by the director from the Sponsor, the former Advisor or any of their affiliates exceeds five percent of (1) the director’s annual gross revenue derived from all sources during either of the last two years or (2) the director’s net worth on a fair market value basis. An indirect relationship is defined to include circumstances in which the director’s spouse, parents, children, siblings, mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in- law is or has been associated with the Company, the Sponsor, the former Advisor or any of its affiliates. The Company’s board of directors has determined that each of John Dawson, Robert J. Aalberts, Nicholas Nilsen and Shawn Nelson qualifies as an independent director under the NASAA REIT Guidelines.
The Company refers to the directors who are not independent as the “affiliated directors.” Currently, the only affiliated director is Michael V. Shustek.
On August 6, 2018, John Dawson was appointed as sole Chairman by the Board of Directors. On April 13, 2019, the Board of Directors decided to combine the roles of Chairman and Chief Executive Officer, appointing Michael Shustek as Chairman, and appointing John Dawson as Lead Independent Director.
The Company’s charter provides that the number of directors is currently five, which number may be increased or decreased as set forth in the bylaws. The Company’s charter also provides that a majority of the directors must be independent directors and that at least one of the independent directors must have at least three years of relevant real estate experience. The independent directors are required to nominate replacements for vacancies among the independent directors under the charter.
The Company’s board of directors is elected by the Company’s common stockholders on an annual basis. Any director may resign at any time and may be removed with or without cause by the stockholders upon the affirmative vote of stockholders entitled to cast at least a majority of all the votes entitled to be cast generally in the election of directors. The notice of any special meeting called to remove a director will indicate that the purpose, or one of the purposes, of the meeting is to determine if the director will be removed.
The Company has elected,disclosed pursuant to an election under Subtitle 8Item 402 of Title 3 of the Maryland General Corporation Law, to provide that a vacancy on our Board of Directors may be filled only by aRegulation S-K in this Proxy Statement.Vote Required The affirmative vote of a majority of the remaining directors and forvotes cast by common stockholders present in person or by proxy at the remainder of the full term of the directorship in which the vacancy occurred and, in the case of an independent director, the director must also be nominated by the remaining independent directors.
Following the Annual Meeting the Board will consist of four directors, three of whom are independent from the former Advisor, the Sponsor and their respective affiliates.
Responsibilities of Directors
The responsibilities of the membersmeeting is required to approve this proposal. Recommendation of the Board of Directors include: THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE APPROVAL OF THE COMPENSATION PAID TO THE NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.
approving and overseeing our overall investment strategy, which consistsPROPOSAL NO. 3 – ADVISORY VOTE ON FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE EXECUTIVE COMPENSATION As required by Section 14A of elements such as investment selection criteria, diversification strategies and asset disposition strategies; approving and overseeing our debt financing strategies;
approving joint ventures and other such relationships with third parties;
approving a potential liquidity transaction;
determining our distribution policy and authorizing distributions from time to time; and
approving amounts available for repurchases of shares of our common stock.
The directors have duties tothe Exchange Act, the Company arisingseeks a non-binding advisory vote from their capacity as directorsits stockholders to approve the frequency with which stockholders wish to have a non-binding advisory vote on the compensation of the Company. This means that each director must perform his or her dutiesCompany’s named executive officers; in good faith andother words, how often a proposal similar to this year's Proposal No. 2 will be included in a manner each director believesthe matters to be voted on at future annual meetings of stockholders. The choices available under Section 14A of the Exchange Act are every year, every other year or every three years.After consideration, the Board recommends that stockholders select “every three years” as the desired frequency for a non-binding, advisory vote of stockholders on named executive officer compensation. The Board believes this frequency is appropriate because it encourages the Company’s stockholders to evaluate executive compensation arrangements over an extended period of performance and to review the compensation of the Company’s named executive officers over a three-year period as reported in the Company's best interests. Further, each director must actSummary Compensation Table. Because your vote is advisory, it will not be binding upon the Board or the Compensation Committee; however, the Board values stockholders’ opinions and the Compensation Committee will take into account the outcome of the vote, among other things, when considering the frequency with such care as an ordinarily prudentwhich the Company will seek future stockholder votes on the Company’s executive compensation. Vote Required The affirmative vote of a majority of the votes cast by common stockholders present in person in a like position would use under similar circumstances, including exercising reasonable inquiry when taking actions. Our directors and executive officers will serve until their successors are elected and qualify. The directors are notor by proxy at the meeting is required to devote allapprove this proposal. In the event that no option receives a majority of their time to the Company's business and are only required to devote such time to the Company's affairs as their duties require. The directors meet quarterly or more frequently as necessary.
The Company will follow investment guidelines adopted byvotes cast, the Board will consider the option that receives the highest number of Directors andvotes as the investment and borrowing policies described in our annual report unless they are modified by our directors. The Board of Directors may establish additional written policies on investments and borrowings and will monitor our administrative procedures, investment operations and performance to ensure that the policies are fulfilled and are in the best interestsrecommended choice of the Company. Any change in our investment limitations as set forth in the Company's charter must be approved by the stockholders.
In order to reduce or eliminate and address certain potential conflicts of interest, the Company's charter requires that a majorityRecommendation of the Board of Directors (including a majority of the independent directors) not otherwise interested in the transaction approve any transaction with any of the Company's directors, the Sponsor, the Advisor, or any of their affiliates.
Board Committees
The Board of Directors has delegated various responsibilities and authority to three standing committees and one special committee. Each committee regularly reports on its activities to the full Board of Directors. The Audit Committee, the Compensation Committee, the Nominating Committee and the Special Committee are composed entirely of independent directors. The table below sets forth the current membership of the three standing committees of the Board of Directors.
Name | | Audit | | Compensation | | Nominating and Corporate Governance | John Dawson
| | Chair | | | | | Robert J. Aalberts
| | | | | | Chair | Nicholas Nilsen
| | X | | Chair | | X | Shawn Nelson
| | | | X | | X |
The Audit Committee meets on a regular basis, at least quarterly and more frequently as necessary. The Audit Committee's primary function is to assist the Board of Directors in fulfilling its oversight responsibilities by reviewing the financial information to be provided to the stockholders and others, the system of internal controls which management has established and the audit and financial reporting process. The Audit Committee is comprised of two directors, each of whom are independent directors, one of which has been deemed an Audit Committee financial expert. The Company’s Audit Committee consists of John Dawson and Nicholas Nilsen. Mr. Dawson serves as chair of the Audit Committee. The Board of Directors also determined that Mr. Nilsen met the Audit Committee financial expert requirements. The Audit Committee held four meetings in the year ended December 31, 2019. The Audit Committee charter is available at http://www.theparkingreit.comTHE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR HOLDING THE ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR EXECUTIVE OFFICERS “EVERY 3 YEARS”. The information found on, or otherwise accessible through, our website is not incorporated by reference into, nor does it form a part of, this Proxy Statement.
Compensation Committee
The Compensation Committee establishes and oversees the Company's compensation programs and arrangements applicable to its executive officers, including, without limitation, salary, incentive compensation, equity compensation and perquisite programs, and amounts to be awarded or paid to individual officers under those programs and arrangements, or make recommendations to the Board regarding approval of the same. The Company's Compensation Committee consists of three independent directors: Nicholas Nilsen, Robert Aalberts and Shawn Nelson. Mr. Nilsen serves as chair of the Compensation Committee. The Compensation Committee held three meetings in the year ended December 31, 2019. The Compensation Committee charter is available at http://www.theparkingreit.com.
Nominating Committee
The Nominating Committee is responsible for establishing the requisite qualifications for directors, identifying and recommending the nomination of individuals qualified to serve as directors and recommending directors for each board committee. The Nominating Committee also establishes corporate governance practices in compliance with applicable regulatory requirements and consistent with the highest standards and recommends to the Board of Directors the corporate governance guidelines applicable to the Company. The Nominating Committee will consider candidates recommended by stockholders. The Company's Nominating Committee consists of Shawn Nelson as Nominating Committee Chair, with Robert Aalberts and Nicholas Nilsen as committee members. The Nominating Committee held two meetings in the year ended December 31, 2019. The Nominating Committee charter is available at http://www.theparkingreit.com.
Special Committees
On May 31, 2019, an alleged stockholder filed a class action lawsuit alleging direct and derivative claims against the Company, certain of our officers and directors, the Advisor, VRM I, and VRM II in the Circuit Court for Baltimore City, captioned Arthur Magowski v. The Parking REIT, Inc., et. al, No. 24-C-19003125 (filed on May 31, 2019) (the “Magowski Complaint”). On July 16, 2019, the Board established a demand review committee of two independent directors to investigate the allegations of wrongdoing made in the Magowski Complaint and to make a recommendation to the Board regarding a response to the stockholder demand letter. On September 27, 2019, the Board replaced the demand review committee with a special litigation committee comprised of one independent director, Shawn Nelson. The special litigation committee is responsible for investigating the allegations of wrongdoing made in the letter and making a final determination regarding the Company’s response to the demand.
Code of Ethics and Corporate Governance Guidelines
The Company has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”), which contains general guidelines for conducting the Company's business and is designed to help directors, employees and independent consultants resolve ethical issues in an increasingly complex business environment. The Code of Ethics applies to all of the Company's officers, including the Company's principal executive officer, principal financial officer, principal accounting officer, controller and persons performing similar functions, as well as all members of the Board of Directors. The Code of Ethics covers topics including, but not limited to, conflicts of interest, record keeping and reporting, payments to foreign and U.S. government personnel and compliance with laws, rules and regulations. The Company will provide to any person without charge a copy of the Code of Ethics, including any amendments or waivers, upon written request delivered to the Company's principal executive office at the address listed on the cover page of this proxy statement.
Board Meetings and Annual Stockholder Meeting
The Board of Directors held 23 meetings during the fiscal year ended December 31, 2019. Each director attended at least 75% of the board and committee meetings during the period in which he served in 2019. Although the Company does not have a formal policy regarding attendance by members of the Board of Directors at the Company's Annual Meeting of Stockholders, the Company encourages all of our directors to attend.
Communication with Directors
The Company has established procedures for stockholders or other interested parties to communicate directly with the Board of Directors. Such parties can contact the board by mail at: John Dawson, Lead Independent Director of The Parking REIT, Inc., c/o Corporate Secretary, 9130 West Post Road, Suite 200, Las Vegas, NV 89148.
The Lead Independent Director will receive all communications made by these means and will distribute such communications to such member or members of the Board of Directors as he deems appropriate, depending on the facts and circumstances outlined in the communication received. For example, if any questions regarding accounting, internal controls and auditing matters are received, they will be forwarded by the Lead Independent Director to the members of the Audit Committee for review.
Criteria for Selecting Directors
In evaluating candidates, our Nominating Committee will consider an individual's business and professional experience, the potential contributions they could make to our Board and their familiarity with our business. Our Nominating Committee will consider candidates recommended by our directors, members of our management team and third parties. Our Nominating Committee will also consider candidates suggested by our stockholders. We do not have a formal process established for this purpose.
We do not have a formal diversity policy with respect to the composition of our Board. However, our Nominating Committee seeks to ensure that the Board is composed of directors whose diverse backgrounds, experience and expertise will provide the Board with a range of perspectives on matters coming before the Board.
Stockholders may contact our Nominating Committee if they wish the committee to consider a proposed candidate. Stockholders should submit the names of any candidates in writing, together with background information about the candidate, and send the materials to the attention of the Company's secretary at the following address: 9130 West Post Road, Suite 200, Las Vegas, NV 89148.
PROPOSAL NO. 24 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of ourthe Board of Directors has appointed the accounting firm of RBSMDeloitte & Touche LLP to serve as our independent registered public accountantsaccounting firm for the fiscal year ending December 31, 2020.2021, effective as of October 18, 2021. On October 18, 2021, the Audit Committee dismissed RBSM LLP is considered by our management to be qualified.
On April 29, 2018, the Company dismissed RSM US LLP, an international audit, tax and consulting firm (“RSM”RBSM”), as the Company'sCompany’s independent registered public accounting firm. The dismissalreports of RSM was approved by a majorityRBSM on the Company’s financial statements for each of the memberstwo years ended December 31, 2019, and December 31, 2020, did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. In connection with the audits of the Audit Committee. RSM was engaged to audit the Company'sCompany’s financial statements for the yearyears ended December 31, 2017; however,2019 and December 31, 2020, and during the audit was not completed,subsequent interim period through October 18, 2021, there were no “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and no audit report was ever issued by RSM to the Company. During the term of RSM's engagement, there were: (i) no disagreementsrelated instructions) between the Company and RSMRBSM on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure,procedures which, disagreement, if not resolved to RSM'sthe satisfaction of RBSM would have caused itRBSM to make reference to the subject matter of the disagreement in connection with its report,their report. During the years ended December 31, 2019 and (ii)December 31, 2020 and the subsequent interim period through October 18, 2021, there were no reportable events“reportable events” (as that term is defined in Item 304(a)(1)(v) of Regulation S-K).
On April 30, 2018,Contemporaneously with the Company re-engagedAudit Committee’s dismissal of RBSM, on October 18, 2021, the Audit Committee approved the engagement of Deloitte & Touche LLP the Company's priorto serve as our independent registered public accounting firm, effective immediately. RBSM previously served as the Company's independent registered public accounting firm from its formation until the Company's dismissal of RBSM LLP on May 19, 2017. During the Company's prior engagement of RBSM LLP, RBSM LLP reported on the Company's financial statements for the period from May 4, 2015 (date of inception) through December 31, 2015 and for the yearfiscal years ended December 31, 2016.
2020 and December 31, 2019, and the subsequent interim period through October 18, 2021, we did not, nor did anyone on our behalf, consult with Deloitte & Touche LLP with respect to (a) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our consolidated financial statements, and no written report or oral advice was provided to us that Deloitte & Touche LLP concluded was an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issue or (b) any matter that was either the subject of a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions), or a disagreement, or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K), or a reportable event. Deloitte & Touche LLP is considered by our management to be qualified.We are asking our common stockholders to ratify the appointment of RBSMDeloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020.2021. Although the ratification is not required by our charter,the Charter, our bylaws or other governing documents or applicable law, the Board is submitting the appointment of RBSMDeloitte & Touche LLP to our common stockholders for ratification as a matter of good corporate practice. Even if the common stockholders ratify the appointment, ourthe Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it believes that such a change would be in the best interest of the Company.
We expect that a representative of RBSMDeloitte & Touche LLP will be present telephonically at the Annual Meeting, will be given the opportunity to make a statement if he or shethey so desiresdesire and will be available to respond to appropriate questions.
Vote Required
The affirmative vote of a majority of the votes cast by common stockholders present in person or by proxy at the meeting is required to approve this proposal. For purposes of this vote, abstentions will not be counted as votes cast and will have no effect on the result of the vote for this proposal, although they and broker non-votes will be considered present for the purpose of determining the presence of a quorum. Broker non-votes will not arise in connection with this proposal because brokers may vote in their discretion on behalf of clients who have not furnished voting instructions.
Principal Accounting Fees and Services
For the years ended December 31, 2020 and 2019, and 2018 RBSM LLP, our independent public accounting firm, billed the Company approximately $405,000$420,000 and $520,000,$480,000, respectively, for their professional services.
For the yearyears ended December 31, 2018, RSM, our former independent public accounting firm, billed the Company approximately $443,000 for their professional services.
For the year ended December 31,2020 and 2019, and 2018, Armanino, LLP (“Armanino”) and HCVT LLP (“HCVT”), additionalour independent accounting firmsfirm providing tax services, billed the Company approximately $110,000 and $98,000, and
$219,000, respectively, for their professional services.
| | RBSM 12/31/2020 | | RBSM 12/31/2019 | | Armanino 12/31/2020 | | Armanino 12/31/2019 | Audit Fees | | $ 420,000 | | $ 480,000 | | $ - | | $ - | Audit Related Fees | | $ - | | $ - | | $ - | | $ - | Tax Fees | | $ - | | $ - | | $ 110,000 | | $ 98,000 | All Other Fees | | $ - | | $ - | | $ - | | $ - | Total | | $ 420,000 | | $ 480,000 | | $ 110,000 | | $ 98,000 |
-19-
| | | RBSM 12/31/2019 | | | RBSM 12/31/2018 | | | RSM 12/31/2019 | | | RSM 12/31/2018 | | | Armanino 12/31/2019 | | | HCVT 12/31/2018 | | | Audit Fees | | $ | 480,000 | | | $ | 420,000 | | | $ | -- | | | $ | 343,000 | | | $ | -- | | | $ | -- | | | Audit Related Fees | | $ | -- | | | $ | -- | | | $ | -- | | | $ | -- | | | $ | -- | | | $ | -- | | Tax Fees | | $ | -- | | | $ | -- | | | $ | -- | | | $ | -- | | | $ | 98,000 | | | $ | 219,000 | | All Other Fees | | $ | -- | | | $ | 25,000 | | | $ | -- | | | $ | 100,000 | | | $ | -- | | | $ | -- | | | Total | | $ | 480,000 | | | $ | 445,000 | | | $ | -- | | | $ | 443,000 | | | $ | 98,000 | | | $ | 219,000 | |
Audit fees. Consists of fees billed for the audit of the Company'sCompany’s annual financial statements, review of the Company'sCompany’s Annual Report on Form 10-K, review of the Company'sCompany’s interim financial statements included in the Company'sCompany’s Quarterly Reports on Form 10- Q10-Q and services that are normally provided by the accountant in connection with year-end statutory and regulatory filings or engagements.
Audit-related fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company'sCompany’s financial statements and are not reported under “Audit Fees,” such as acquisition audit, audit of the Company'sCompany’s financial statements, review of ourthe Company’s Current Reports on Form 8-K, review of the Company'sCompany’s registration statement on Form S-11 and Form S-4 filings.
Tax fees. Consists of professional services rendered by a company aligned with the Company'sCompany’s principal accountant for tax compliance, tax advice and tax planning.
All other fees. The services provided by the Company'sCompany’s accountants within this category consisted of advice and other services.
The Audit Committee has direct responsibility to review and approve the engagement of the independent auditors to perform audit services or any permissible non-audit services. All audit and non-audit services to be provided by the independent auditors must be approved in advance by the Audit Committee. The Audit Committee may not engage the independent auditors to perform specific non-audit services proscribed by law or regulation. All services performed by our independent auditors under engagements entered into were approved by the Company'sCompany’s Audit Committee, pursuant to the Company'sCompany’s pre-approval policy, and none was approved pursuant to the de minimis exception to the rules and regulations of the Securities Exchange Act, of 1934, as amended (the “Exchange Act”), Section 10A(i)(1)(B), on pre-approval. Vote Required The affirmative vote of a majority of the votes cast by common stockholders present in person or by proxy at the meeting is required to approve this proposal. Recommendation of the Board of Directors THE BOARD RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY’S INDEPENDENT REGISTERED ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2021. -20-
Management of The Parking REIT, Inc.Mobile Infrastructure Corporation (the “Company”) is responsible for the Company'sCompany’s financial statements, internal controls, accounting and financial reporting processes and compliance with applicable laws and regulations. The independent registered public accounting firm is responsible for performing an independent audit of the Company'sCompany’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (“PCOAB”) and an independent audit of the effectiveness of the Company'sCompany’s internal control over financial reporting in accordance with the standards of the PCAOB, and for expressing their opinions thereon. The responsibility of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company is to provide general oversight of the foregoing matters, as well as engaging the Company'sCompany’s independent registered public accounting firm and establishing the terms of retention.
The following is the report of the Audit Committee with respect to the Company'sCompany’s consolidated audited financial statements for the fiscal year ended December 31, 2019.2020. The information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with the U.S. Securities and Exchange Commission (the “SEC”), or subject to Regulation 14A or 14C, other than as provided in this Item, or to the liabilities of sectionSection 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to the extent that the Company specifically requests that the information be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act. Such information will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
The Audit Committee has reviewed and discussed the Company'sCompany’s audited financial statements with management.
Review and Discussions with Independent Registered Public Accountants
The Audit Committee has met and held discussions with management and RBSM LLP, the Company'sCompany’s independent registered public accounting firm.firm for the fiscal year ended December 31, 2020. Management represented to the Audit Committee that the Company'sCompany’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America and the Committee has reviewed and discussed the audited consolidated financial statements with management and RBSM LLP. The Audit Committee discussed with RBSM LLP, the matters required to be discussed by the Statement on Auditing Standards No. 1301, Communication with Audit Committees,, as amended, issues regarding the conduct of the audit, accounting and auditing principles and practices, and the adequacy of internal controls that could significantly affect the Company'sCompany’s consolidated financial statements.
The Audit Committee also received the written disclosures and letter from RBSM LLP required by the applicable requirements of the PCAOB regarding the independent accountant'saccountant’s communications with the Audit Committee concerning independence and the Audit Committee has discussed with RBSM LLP its independence with respect to the Company for the fiscal year ending December 31, 2019.2020. The Audit Committee has reviewed the original proposed scope of the audit and fees.
Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the Company'sCompany’s audited financial statements be included in the Company'sCompany’s Annual Report filed with the Securities and Exchange Commission on Form 10-K for the fiscal year ended December 31, 2019. 2020, for filing with the SEC.Submitted by the Audit Committee of the Board, Lorrence T. Kellar, Chair* Danica Holley* Shawn Nelson* *The members were appointed to the Audit Committee effective October 15, 2021. The prior members of Directors, John Dawson, Chair Nicholas Nilsen
the Audit Committee took the actions described above.-21-
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Conflicts of Interests
The Company isagreements in this “Certain Related Person Transactions” section do not purport to be complete and are subject to, various conflictsand qualified in their entirety by, reference to the actual agreements, copies of interest arising outcertain of which are filed as exhibits to our Annual Report and other filings with the SEC.A “related person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) or a proposed transaction in which (i) we were, are or will be a participant, (ii) the amount involved exceeds the lesser of $120,000 or 1.0% of the Company's relationship withaverage of the Company’s former Advisortotal assets at year end for the last two completed fiscal years and other affiliates, including (1) conflicts(iii) any related to the compensation arrangements between the former Advisor, certain affiliates and the Company, (2) conflicts with respect to the allocation of the time of the former Advisor and its key personnel and (3) conflicts with respect to the allocation of investment opportunities. The Company's independent directors have an obligation to function on the Company's behalf in all situations in which a conflict of interest may arise andperson had, has or will have a fiduciary obligation to act on behalfdirect or indirect material interest. A “related person” means any person who is, or at any time since January 1, 2019 was: | • | a director, a nominee for director or an executive officer of the Company; | | | | | • | known to us to be the beneficial owner of more than 5.0% of the outstanding shares of common stock when a transaction in which such person had a direct or indirect material interest occurred or existed; | | | | | • | an immediate family member of any of the persons referenced in the preceding two bullets, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of any of the persons referenced in the preceding two bullets, and any person (other than a tenant or employee) sharing the household of any of the persons referenced in the preceding two bullets; or | | | | | • | a firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10.0% or greater beneficial ownership interest. |
We have adopted a written Code of Ethics that describe the consideration and approval of related person transactions. Under the Code of Ethics, we may not enter into a transaction from which any director or executive officer, any member of the stockholders.
immediate family of any director or executive officer or other related person, may derive an improper benefit, unless that transaction has been disclosed or made known to our Board and a majority of the Board (including a majority of the Independent Directors) not otherwise interested in the transaction reviews and approves or ratifies the transaction by affirmative vote as fair and reasonable to the Company and on terms not less favorable to the Company than those available from unaffiliated third parties. In determining whether to approve or ratify a transaction, our Board (including a majority of the Independent Directors) not otherwise interested in the transaction, as the case may be, shall also act in accordance with any applicable provisions of our Charter and Bylaws, consider all of the relevant facts and circumstances and approve only those transactions that they determine are fair and reasonable to us. All related person transactions described in Annex A to this Proxy Statement were reviewed and approved or ratified in accordance with our policies, Code of Ethics, Charter and Bylaws, each as described above, and Maryland law. In the event of doubt, an officer or director of the company must disclose a suspected related person transaction to the Director of Compliance, who may then engage the Chair of the Audit Committee to determine if the transaction requires the approvals set forth in the Code of Ethics. A copy of our Code of Ethics is available on our website, www.mobileIT.com.Certain Conflict Mitigation Measures
In order to reduce or mitigate certain potential conflicts of interests, the Company has adopted the procedures set forth below, which includes procedures imposed by the NASAA REIT Guidelines. The Company will no longer be subject to the requirements of the NASAA REIT Guidelines if and when the Company lists its shares on a national securities exchange and amends it charter.the Charter.
Ownership of Company Stock
As of December 31, 2019,Independent Directors Pursuant to the NASAA REIT Guidelines, the Charter defines an independent director as a director who is not and has not for the last two years been associated, directly or indirectly, with the Sponsor or the Advisor. A director is deemed to be associated with the Sponsor or the Advisor if he or she owns any interest in, is employed by, is an officer or director of, or has any material business or professional relationship with the Sponsor, the Advisor or any of their affiliates, performs services (other than as a director) for us, or serves as a director or trustee for more than three (3) REITs sponsored by the Sponsor or advised by the Advisor. A business or professional relationship will be deemed material per se if the gross revenue derived by the director from the Sponsor, the Advisor or any of their affiliates exceeds five percent (5%) of (1) the director’s annual gross revenue derived from all sources during either of the last two years or (2) the director’s net worth on a fair market value basis. An indirect relationship is defined to include circumstances in which the director’s spouse, parents, children, siblings, mothers-or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in-law is or has been associated with the Company, the Sponsor, the Advisor or any of its affiliates. A majority of the members of the Board, including a majority of the independent directors, must determine the method used by the Advisor for the allocation of the acquisition of investments by two or more affiliated programs seeking to acquire similar types of assets is fair and reasonable to us. The Company’s independent directors, acting as a group, will resolve potential conflicts of interest whenever they determine that the exercise of independent judgment by the full Board or the Advisor or its affiliates could reasonably be compromised. However, the independent directors may not take any action which, under Maryland law, must be taken by the entire Board or which is otherwise not within their authority. The independent directors, as a group, are authorized to retain their own legal and financial advisors. Among the matters we expect the independent directors to review and act upon are: | • | transactions with affiliates, including our directors and officers; | | | | | • | awards under our equity incentive plan; and | | | | | • | pursuit of a potential liquidity event. |
Those conflict of interest matters that cannot be delegated to the independent directors, as a group, under Maryland law must be acted upon by both the Board and the independent directors. The Company’s Acquisitions The Company will not purchase or lease assets in which any of the Company’s directors or any of their affiliates has an interest without a determination by a majority of the Company’s directors (including a majority of the independent directors) not otherwise interested in the transaction that such transaction is fair and reasonable to us and at a price to us no greater than the cost of the asset to the Sponsor, the Advisor, the director or the affiliated seller or lessor, unless there is substantial justification for the excess amount and such excess is reasonable. In no event may the Company acquire any such asset at an amount in excess of its current appraised value. The consideration the Company pays for real property will ordinarily be based on the fair market value of the property as determined by a majority of the members of the Board or the members of a duly authorized committee of the board. In cases in which a majority of the Company’s independent directors so determine, and in all cases in which real property is acquired from any of the Company’s directors or any of their affiliates, the fair market value shall be determined by an independent expert selected by the Company’s independent directors not otherwise interested in the transaction. Pursuant to the Stockholders’ Agreement described below, until such time as the Stockholders’ Agreement is terminated, the prior approval of one Incumbent Director and a majority of the Color Up Designated Directors shall be required for certain transactions, including without limitation, (i) any merger or sale of the Company or substantially all its assets, (ii) amendments to the Company’s Charter or bylaws, (iii) the authorization or issuance of any equity securities or any securities convertible into or exercisable for equity securities of the Company, (iv) any change in the authorized number of directors of the Board or establishment or abolition of any committee thereof; (v) any incurrence or repayment of indebtedness in an aggregate amount over a certain threshold, (vi) any declaration of dividends, (vii) any appointment or termination of any person as the chief executive officer, president or chief financial officer of the Company, (viii) any related party transactions, (ix) any amendment or waiver, or termination of certain provisions, of the Stockholders’ Agreement or (x) any amendment or waiver of the Tax Matters Agreement or the Warrant Agreement, each as described below. Loans The Company will not make any loans to the Company’s directors or officers or any of their affiliates (other than mortgage loans complying with the limitations set forth in Section V.K.3 of the NASAA REIT Guidelines or loans to wholly owned 9,107subsidiaries). In addition, the Company will not borrow from these affiliates unless a majority of the members of the Board (including a majority of the independent directors) not otherwise interested in the transaction approves the transaction as being fair, competitive and commercially reasonable and no less favorable to us than comparable loans between unaffiliated parties. These restrictions on loans will only apply to advances of cash that are commonly viewed as loans, as determined by the Board. Other Transactions Involving Affiliates A majority of the Company’s directors, including a majority of the independent directors not otherwise interested in the transaction, must conclude that all other transactions between the Company and the Sponsor, the Advisor, any of the Company’s directors or any of their affiliates are fair and reasonable to the Company and on terms and conditions not less favorable to the Company than those available from unaffiliated third parties. To the extent that the Company contemplates any transactions with affiliates, members of the Board who serve on the board of the affiliated entity will be deemed “interested directors” and will not participate in approving or making other substantive decisions with respect to such related party transactions. Issuance of Options and Warrants to Certain Affiliates Until the Company’s shares VRM II owned 844,960 sharesof common stock are listed on a national securities exchange, the Company will not issue options or warrants to purchase our common stock to any of the Company’s directors or any of their affiliates, except on the same terms as such options or warrants, if any, are sold to the general public. We may issue options or warrants to persons other than the Company’s directors and VRM I owned 456,834their affiliates prior to listing the Company’s common stock on a national securities exchange, but not at an exercise price less than the fair market value of the underlying securities on the date of grant and not for consideration (which may include services) that in the judgment of the Board has a market value less than the value of such option or warrant on the date of grant. Any options or warrants we issue to the Advisor, the Sponsor or any of their affiliates shall not exceed an amount equal to 10% of the outstanding shares of the Company’s outstanding common stock. Duringstock on the year ended December 31, 2018, VRM IIdate of grant. Relationship with Color Up, Bombe and VRM I received approximately $33,000 and $19,000 in distributions under the Company’s distribution reinvestment program (“DRIP”). No DRIP distributions were received by either entity during the year ended December 31, 2019 dueAffiliates Thereof Prior to the suspensionAugust 25, 2021, a special committee (the “Special Committee”) of the DRIP program.
OwnershipBoard consisting of John E. Dawson, Robert J. Aalberts and Shawn Nelson approved the Advisor
VRM IEquity Purchase and VRM II own 40% and 60%, respectively, of the Company’s former Advisor. Neither VRM I nor VRM II paid any up-front consideration for these ownership interests, but each agreed to be responsible for its proportionate share of future expenses of the former Advisor.
Fees Paid in Connection with the Offering – Preferred Stock
Contribution Agreement (the “Purchase Agreement”) described below. In connection with the private placementClosing of the Series Atransactions contemplated by the Purchase Agreement (collectively, the “Transaction”), Messrs. Dawson, Aalberts and Series 1 preferred stock,Shustek resigned their directorships and Manuel Chavez, III, Stephanie Hogue, Jeffrey B. Osher, Lorrence T. Kellar, Danica Holley and Damon Jones were elected to the Company’s Board.Color Up was formed for the purpose of consummating the transactions contemplated by the Purchase Agreement and investing in the shares of common stock. Mr. Chavez, a Manager and the Chief Executive Officer of Color Up, was elected Chairman of the Board and Chief Executive Officer of the Company, paid selling commissionseffective August 25, 2021. Ms. Hogue, a Manager and the President of Color Up, was elected President of the Company and a member of the Board, effective August 25, 2021. Both Mr. Chavez and Ms. Hogue are Managing Partners of Bombe. Mr. Osher, also a Manager of Color Up, was elected to the Board, effective August 25, 2021. Mr. Osher is a control person of HS3, and is portfolio manager of No Street GP LP, a registered investment adviser. On August 25, 2021, the Company also entered into the 2021 Employment Agreements with each of Mr. Chavez and Ms. Hogue as more fully described in this Proxy Statement. As of November 12, 2021, Mr. Chavez, Ms. Hogue and Mr. Osher beneficially owned through Color Up, 2,624,831 shares of common stock, or 33.81% of the outstanding common stock as of such date, warrants to purchase 1,702,128 shares of common stock and 7,481,668 OP Units, or approximately 44.2% of the outstanding OP Units as of such date, and Mr. Osher beneficially owned through HS3 an additional 1,702,128 OP Units or approximately 10.1% of the outstanding OP Units as of such date, and 425,532 Class A Units. Equity Purchase and Contribution Agreement On January 8, 2021, the Company entered into the Purchase Agreement by and among the Company, the Operating Partnership, Vestin Realty Mortgage I, Inc., (“VRMI”), Vestin Realty Mortgage II, Inc. (“VRMII”) and Michael V. Shustek (collectively, the “Former Advisor”) and Color Up. The transactions contemplated in the Purchase Agreement closed on August 25, 2021 (the “Closing”) and, pursuant to the Purchase Agreement, at the Closing: (i) the Operating Partnership issued a number of newly-issued common units of limited partnership of the Operating Partnership equal to (a) the sum of (x) $39,000,000 (less the outstanding principal amount of the Loan or the Advance (each as described below), if any), plus (y) the value of all of the issued and outstanding equity interests of certain property owning entities (the “Contributed Interests”), determined in accordance with the Purchase Agreement, divided by (b) $11.75 (the “OP Unit Consideration”), which OP Unit Consideration was subject to adjustment for customary real estate prorations; (ii) Color Up contributed to the Operating Partnership (a) cash consideration of $35,000,000, less principal amounts outstanding under the Loan or the Advance (each as defined below), (b) certain technology and (c) the Contributed Interests; (iii) the Company issued to Color Up Warrants to purchase up to 1,702,128 shares of Common Stock, at an exercise price of $11.75 per share for an aggregate cash purchase price of up to 6.0%$20,000,000; (iv) the Former Advisor (a) contributed 175,000 shares of gross offering proceedsCommon Stock to a settlement escrow or equivalent vehicle to be established in accordance with a contemplated Settlement (as defined in the Purchase Agreement) (the “Settlement Escrow”) and (b) surrendered its claim to 400,000 shares of Common Stock due to the Former Advisor from the sale of shares in the private placements, including sales by affiliated and non-affiliated selling agents. During the year endedCompany on December 31, 2018,2021; and (v) Color Up purchased (a) 1,549,324 shares of common stock from the Former Advisor and its affiliates and (b) 175,000 shares of common stock from the Settlement Escrow, in each case, at a price of $11.75 per share. The Contributed Interests consist of high-quality parking assets totaling approximately 1,201,000 square feet. In exchange for the cash consideration, the transfer of technology and the Contributed Interests, the Operating Partnership issued 7,323,101 newly-issued OP Units to Color Up. The Company and the Operating Partnership also agreed to issue additional OP Units to Color Up for certain costs of the Company that (a) were paid approximately $0.8after December 31, 2020 and (b) were required to be paid by the Company in selling commissions,connection with the Transaction (collectively, the “Restricted Payables”). The Operating Partnership issued to Color Up additional OP Units for no additional consideration in an amount equal to (i) with respect to the portion of which $0.2any Restricted Payables greater than $10,000,000 but less than or equal to $15,000,000, 7.00% of the amount of such portion divided by $11.75, rounded to the nearest whole unit and (ii) with respect to any portion of the Restricted Payables in excess of $15,000,000, the amount of such portion, plus 7.00% of such portion, divided by $11.75, rounded to the nearest whole unit. As a result of the Restricted Payables outstanding at the Closing, Color Up was paidissued an additional 27,418 OP Units. In addition, in accordance with the terms and conditions of the Purchase Agreement, Color Up advanced, at the written request of the Company, $257,000 in connection with the termination of certain third-party contracts on terms acceptable to affiliated selling agents.
Color Up (the “Advance”). At the Closing, Color Up was issued an additional 21,872 OP Units with respect to the Advance.The Purchase Agreement further provided that if the Closing did not occur on or before June 1, 2021, Color Up would, upon written request of the Company, paid non-affiliated selling agents a one-time fee separately negotiated with each selling agent for due diligence expensesprovide an unsecured line of credit to the Company in an aggregate principal amount of up to 2.0%$400,000 per month, at an interest rate equal to 7.0%, the full amount of grosswhich accrued immediately upon funding, with a term extending through the earlier of (i) the closing date and (ii) December 31, 2021; provided that the total principal amount outstanding did not exceed $2,000,000 (collectively, the “Loan”). Pursuant to the Purchase Agreement, at the Closing, the outstanding principal balance and any unpaid accrued interest under the Loan (the “Outstanding Balance”) was automatically converted into OP Units at a conversion price equal to the quotient of the Outstanding Balance divided by $11.75, rounded to the nearest whole unit. At the Closing, the Outstanding Balance was $1,284,000, which was automatically converted into 109,277 OP Units issued to Color Up. After giving effect to the transactions described above, Color Up acquired 7,481,668 OP Units and owned approximately 49.2% of the partnership interest of the Operating Partnership. At the Closing, Mr. Shustek resigned as a director and officer of the Company and its subsidiaries and Mr. Chavez became the Chief Executive Officer of the Company and Ms. Hogue became the President of the Company. Mr. Shustek no longer owns any shares of the Company and is no longer affiliated with the Company or any of its subsidiaries. J. Kevin Bland, the Company’s Chief Financial Officer prior to the Closing continues to serve as the Chief Financial Officer pursuant to his existing 2019 Employment Agreement. Each of Mr. Shustek, Mr. Huberty, Mr. Dawson and Mr. Aalberts entered into an indemnification agreement with the Company. The Chief Executive Officer, President and current directors of the Company have entered into similar indemnification agreements with the Company. Tender Offer
Pursuant to the Purchase Agreement, Color Up agreed that, as promptly as practicable after the Closing, it would commence a tender offer to purchase up to 900,506 of the outstanding shares of common stock of the Company, at a purchase price of $11.75 per share, net to the applicable seller in cash, without interest, subject to any required withholding tax (the “Tender Offer”) and the Company agreed (i) that prior to the Closing, the Board would recommend that stockholders accept the Tender Offer and (ii) to take all steps necessary to cause any offering proceeds. memorandum relating to the Tender Offer to be distributed to the Company’s stockholders. In the event that the Company’s stockholders tender a number of shares less than the Tender Offer amount, the Company agreed to, at Color Up’s sole discretion, offer to issue and sell to Color Up the Company Backstop such that Color Up may acquire a total number of shares equal to the Tender Offer amount after giving effect to the Tender Offer and the Company Backstop. On October 5, 2021, Color Up commenced the Tender Offer upon the terms and subject to the conditions set forth in that certain Offer to Purchase, dated October 5, 2021 and in the related Letter of Transmittal, copies of which are attached as exhibits to Schedule TO filed with the SEC on October 5, 2021, and the Board recommended that the stockholders of the Company accept the offer by Color Up to purchase up to 900,506 of the outstanding shares of common stock of the Company and tender their shares of common stock pursuant to the Tender Offer. On November 8, 2021, Color Up, following the expiration of the Tender Offer on November 5, 2021, accepted for purchase an aggregate of 878,082 shares of common stock that had been validly tendered and not validly withdrawn pursuant to the Tender Offer at $11.75 per share, or an aggregate consideration of $10,317,468. Also on November 8, 2021, the Company and Color Up entered into a subscription agreement pursuant to which Color Up purchased the remaining 22,424 shares of common stock not tendered in the Tender Offer pursuant to the Company Backstop at $11.75 per share, or an aggregate consideration of $263,482. Stockholders’ Agreement
The Company entered into a Stockholders’ Agreement with Color Up on August 25, 2021, pursuant to which, until such time as the Stockholders’ Agreement is terminated, the prior approval of one Incumbent Director and a majority of the Color Up Designated Directors shall be required for certain transactions, including without limitation, (i) any merger or sale of the Company or substantially all its assets, (ii) amendments to the Company’s Charter or bylaws, (iii) the authorization or issuance of any equity securities or any securities convertible into or exercisable for equity securities of the Company, (iv) any change in the authorized number of directors of the Board or establishment or abolition of any committee thereof; (v) any incurrence or repayment of indebtedness in an aggregate amount over a certain threshold, (vi) any declaration of dividends, (vii) any appointment or termination of any person as the chief executive officer, president or chief financial officer of the Company, (viii) any related party transactions, (ix) any amendment or waiver, or termination of certain provisions, of the Stockholders’ Agreement or (x) any amendment or waiver of the Tax Matters Agreement or the Warrant Agreement, each as described below. The Stockholders’ Agreement also paidcontains certain standstill provisions restricting, subject to certain customary exclusions, Color Up from, among other things, acquiring (or seeking or making any proposal or offer with respect to acquiring) additional shares of common stock or any security convertible into common stock or any assets of the Company. In addition, the Company has agreed that, in the event the Company proposes to issue additional securities, Color Up will have the right to purchase an amount of securities so that its ownership percentage will not be diluted by the issuance of additional securities. Under the terms of the Stockholders’ Agreement, except for limited circumstances, Color Up is prohibited from selling or transferring its shares of common stock until six months following a dealer manager feeLiquidity Event (defined as an initial public offering or a listing of the shares of common stock on a national securities exchange). A transfer of any of Color Up’s shares of common stock to AMSa Permitted Transferee (defined to include any member of Color Up) is permissible under the Stockholders’ Agreement. Except for the transfer restrictions set forth above, the Stockholders’ Agreement terminates upon a Liquidity Event or written agreement of the parties. Until a Liquidity Event and subject to certain limited exceptions, Color Up (and its Permitted Transferees) are prohibited from, directly or indirectly, (i) having an ownership interest in, or permitting such party’s name to be used in connection with, any business in any central business district in North America which is primarily engaged in the business of acquiring, investing in, owning, operating or leasing parking lots or parking garages and (ii) soliciting or attempting to solicit any clients or customers of the Company or any of its subsidiaries for the purpose of diverting their business or service from the Company or any of its subsidiaries. Tax Matters Agreement
On August 25, 2021, the Company, the Operating Partnership and Color Up entered into the Tax Matters Agreement (the “Tax Matters Agreement”), pursuant to which the Operating Partnership agreed to indemnify Color Up and certain affiliates and transferees of Color Up (together, the “Protected Partners”) against certain adverse tax consequences in connection with (1) (i) a taxable disposition of certain specified properties and (ii) certain dispositions of the Protected Partners’ interest in the Operating Partnership, in each case, prior to the tenth anniversary of the completion of the Transaction (or earlier, if certain conditions are satisfied); and (2) the Operating Partnership’s failure to provide the Protected Partners the opportunity to guarantee a specified amount of debt of the Operating Partnership during the period ending on the tenth anniversary of the completion of the Transaction (or earlier, if certain conditions are satisfied). In addition, and for so long as the Protected Partners own at least 20% of the units in the Operating Partnership received in the Transaction, the Company agreed to use commercially reasonable efforts to provide the Protected Partners with similar guarantee opportunities. Warrant Agreement On August 25, 2021, the Company entered into a Warrant Agreement (the “Warrant Agreement”), pursuant to which we issued the Warrants to purchase up to 1,702,128 of the Company’s shares of common stock, at an exercise price of $11.75 per share for an aggregate cash purchase price of up to 2.0%$20,000,000. Each whole Warrant entitles the registered holder thereof to purchase one whole share of grossCommon Stock at a price of $11.75 per Share (the “Warrant Price”), subject to adjustment as discussed below, at any time following a “Liquidity Event,” which is defined as an initial public offering proceeds from the saleand/or listing of the common stock on the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (each, a “Trading Market”). The Warrants expire five years after the date of the Warrant Agreement, at 5:00 p.m., New York City time. The Warrant Agreement provides that if the exercise of the Warrants would require the Company to obtain stockholder approval pursuant to any applicable listing standards of the Trading Market on which the common stock is listed, the Company will, at its discretion, either obtain such stockholder approval or deliver cash in lieu of shares of common stock otherwise deliverable upon the exercise of such Warrant. If the number of outstanding shares of common stock is increased by a stock dividend payable in shares of common stock, or by a split of outstanding shares of common stock or other similar event, or decreased by a consolidation, combination, reverse stock split or reclassification of shares of common stock or other similar event, then the number of shares of common stock issuable upon exercise of each Warrant shall be increased or decreased, as applicable, in proportion to such increase or decrease, as applicable, in outstanding shares of common stock. Whenever the number of shares of common stock purchasable upon the exercise of the Warrants is adjusted, as described above, the Warrant Price will be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of common stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of common stock so purchasable immediately thereafter. The Warrant Agreement further provides that, in lieu of issuing fractional shares, the Company will make a cash payment equal to the Fair Market Value (as defined in the private placements as compensation for acting as dealer manager. During the year ended December 31, 2018,Warrant Agreement) of one share of common stock multiplied by such fraction. Securities Purchase Agreement On November 2, 2021, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) by and among the Company, the Operating Partnership, and HS3, pursuant to which, on November 2, 2021 (the “Securities Purchase Closing Date”), the Operating Partnership issued and sold to HS3 (a) 1,702,128 newly-issued OP Units; and (b) 425,532 newly-issued Class A units of limited partnership of the Operating Partnership (“Class A Units”) which entitle HS3 to purchase up to 425,532 additional OP Units (the “Additional OP Units”) at an exercise price equal to $11.75 per Additional OP Unit, subject to adjustment as provided in the Class A Unit Agreement (as defined below), and HS3 paid approximately $0.2 to AMS as compensation.
Nothe Operating Partnership cash consideration of $20,000,000 (the “Securities Purchase Transaction”). The Securities Purchase Agreement Transaction and the Securities Purchase Agreement and related agreements were evaluated, negotiated and unanimously approved by the members of the Board who were determined by the Board to be disinterested with respect to the Securities Purchase Transaction and the Board.Under the Securities Purchase Agreement, the parties made customary representations and warranties for transactions of this type. Pursuant to the terms of the Securities Purchase Agreement, the representations and warranties made under the Securities Purchase Agreement will survive for six months after the Securities Purchase Closing Date and the Company and the Operating Partnership, on one hand, and HS3, on the other hand, will indemnify each other party and certain of their respective representatives against losses arising out of certain material breaches of, and certain third party claims related to, the Securities Purchase Agreement and the Securities Purchase Transactions. In connection with the issuance of the OP Units and the Class A Units under the Securities Purchase Agreement, the Board amended and restated the limited exception to the restrictions on ownership and transfer of common stock set forth in the Charter previously granted to Color Up, the HS3 and certain of its affiliates to allow these parties to own, directly or indirectly, in the aggregate, up to 15,200,000 shares of Series A or Series 1common stock (the “Excepted Holder Limit”) and up to five percent (5%) of any outstanding class of preferred stock were sold duringof the year ended December 31, 2019.
Company. The grant of this exception is conditioned upon the receipt of various representations and covenants set forth in the Request for Waiver of Ownership Limit, made by Color Up and HS3 to the Company, confirming, among other things, that none of HS3, Color Up, nor certain of their affiliates may own, directly or indirectly, more than 4.9% of the interests in a tenant of the Company (or subsidiary of the Company) that comprises more than three percent (3%) of the gross income of the Company as determined for purposes of Section 856(c)(2) of the Internal Revenue Code of 1986, as amended. The request also includes representations intended to confirm that the Purchaser, Color Up, and certain of their affiliates’ ownership of common stock will not cause the Company to otherwise fail to qualify as a real estate investment trust for federal income tax purposes.Registration Rights Agreement The Company terminated its existing registration rights agreement dated as of March 29, 2019, and on August 25, 2021, entered into a separate Registration Rights Agreement with Color Up (the “Registration Rights Agreement”), pursuant to which the Company granted the Holders (as defined in the Registration Rights Agreement) certain registration rights with respect to the Registrable Securities (as defined below) of the Company. Among other things, the Registration Rights Agreement requires the Company to register (i) the shares of common stock purchased pursuant to the Purchase Agreement, (ii) shares of common stock, if any, issued upon the redemption of OP Units purchased pursuant to the Purchase Agreement, (iii) shares of common stock acquired pursuant to the Tender Offer, (iv) shares of common stock issuable upon redemption of the Warrants, (v) the Warrants and (vi) any additional securities issued or issuable as a dividend or distribution on, in exchange for, or otherwise in respect of, such shares of common stock and OP Units (including as a result of combinations, recapitalizations, mergers, consolidations, reorganizations, stock splits or otherwise) (collectively, the “Registrable Securities”). The Holders are entitled to make a written demand for registration under the Securities Act of all or part of their Registrable Securities; provided, however, that the Company is not required to file a registration statement prior to (x) 180 days after the initial listing of the Registrable Securities on a national securities exchange or (y) the expiration of any other lock-up period imposed with respect to the Registrable Securities pursuant to the Stockholders’ Agreement. In addition, the Holders are entitled to “piggy-back” registration rights to registration statements filed by the Company. The Company will bear all of the expenses incurred in connection with the filing of any such registration statement. -22-
Internalization Transactions
and Related AgreementsPrior to the Internalization (as defined below), the formerFormer Advisor or its affiliates received an asset management fee at a rate equal to 1.1% of the cost of all assets held by the Company, or the Company’s proportionate share thereof in the case of an investment made through a joint venture or other co-ownership arrangement. Pursuant to the Amended and Restated Advisory Agreement, the asset management fee could not exceed $2 million per annum until the earlier of such time, if ever, that (i) the Company holds assets with an appraised value equal to or in excess of $500,000,000 or (ii) the Company reports AFFO equal to or greater than $0.3125 per share of common stock (an amount intended to reflect a 5% or greater annualized return on $25.00 per share of common stock) for two consecutive quarters, on a fully diluted basis. All amounts of the asset management fee in excess of $2 million per annum, plus interest thereon at a rate of 3.5% per annum, would be due and payable by the Company no later than ninety (90) days after the condition for payment is satisfied. For the yearsyear ended December 31, 2019, and 2018, asset management fees of approximately $0.9 and $2.0 million, respectively, had been earned by the formerFormer Advisor. From and after May 29, 2018 (or the Valuation Date), the asset management fee was to be calculated based on the lower of the value of the Company’s assets and their historical cost. The Company ceased payment of asset management fees effective April 1, 2019, as a result of the Internalization.
The Company was obligated to reimburse the formerFormer Advisor or its affiliates for costs of providing administrative services, subject to the limitation that it would not reimburse the formerFormer Advisor for any amount by which the Company’s operating expenses, at the end of the four preceding fiscal quarters (commencing after the quarter in which the Company made its first investment), exceed the greater of (a) 2.0% of average invested assets and (b) 25.0% of net income in connection with the selection or acquisition of an investment, whether or not the Company ultimately acquires, unless the excess amount was approved by a majority of the Company’s independent directors. The Company was not permitted to reimburse the formerFormer Advisor for personnel costs in connection with services for which the formerFormer Advisor received a separate fee, such as an acquisition fee, disposition fee or debt financing fee, or for the salaries and benefits paid to the Company’s executive officers. In addition, the Company was not entitled to reimburse the formerFormer Advisor for rent or depreciation, utilities, capital equipment or other costs of its own administrative items. During the year ended December 31, 2018, approximately $2.7 million in operating expenses were incurred by the Company reimbursable to the Advisor. During the year ended December 31, 2018, approximately $2.5 million had been reimbursed to the Advisor. During the year ended December 31, 2019, approximately $1.4 million in operating expenses were incurred by the formerFormer Advisor, on behalf of the Company, and were reimbursed to the formerFormer Advisor.
On March 29, 2019, Company and the Former Advisor entered into definitive agreements to internalize the Company'sCompany’s management function effective April 1, 2019 (the “Internalization”). Since its formation, under the supervision of the Board, of Directors, the Former Advisor had been responsible for managing the operations of the Company. As part of the Internalization, among other things, the Company agreed with the Former Advisor to (i) acquire and assume substantially all of the Former Advisor assets and liabilities; (ii) terminate the Second Advisory Agreement and, for the avoidance of doubt, the Third Advisory Agreement, which by its terms would have become effective only upon a listing of our common stock on the Nasdaq Global Market; (iii) extend employment to the executives and other employees of the Former Advisor (as described above); (iv) arrange for the Former Advisor to continue to provide certain services with respect to outstanding indebtedness of the Company and its subsidiaries; and (v) lease the employees of the Former Advisor for a limited period of time prior to the time that such employees become employed by the Company. As part of those same agreements, the Company agreed to issue to the Former Advisor, over a period of more than two and a half years, 1,600,000 shares of the common stock as the consideration (the “Consideration”) under the terms of the Contribution Agreement described further below. The Internalization became effective as of April 1, 2019 (the “Effective Date”).
On March 29, 2019, the Company entered into a Contribution Agreement (the “Contribution Agreement”) with the Advisor, VRM I, VRM II and Mr. Shustek.Former Advisor. Pursuant to the Contribution Agreement, effective as of the Effective Date, the Former Advisor sold and contributed all of its assets to the Company, except for certain excluded assets as specified in the Contribution Agreement, and the Company accepted the transferred assets and agreed to assume and discharge when due all of the liabilities of the Former Advisor, except for certain retained liabilities as specified in the Contribution Agreement (the “Contribution”).
In exchange for the Contribution, the Company agreed to issue to the Former Advisor 1,600,000 shares of common stock as the Consideration. The Consideration is issuable in four equal installments. The first installment of 400,000 shares of common stock was issued on the Effective Date. The second installment of 400,000 shares of common stock was issued on December 31, 2019. The remaining installments will bethird installment of 400,000 shares of common stock was issued on December 31, 20202020. On August 25, 2021, the Company entered into an Amendment to the Contribution Agreement pursuant to which, and December 31, 2021 (or if December 31st is not a business day,in connection with the day that isclosing of the last business day of such year). If requestedtransactions contemplated by the Purchase Agreement and the entry by the Company in connection with any contemplated capital raise byinto the Company,Settlement, the Former Advisor has agreed notsurrendered its claim to sell, pledge or otherwise transfer or dispose of any of the Consideration for a period not to exceed the lock-up period that otherwise would apply to other stockholders of the Company in connection with such capital raise. At any time on or prior to December 31, 2022, the Company may elect to repurchase up to 1,100,000400,000 shares of common stock then held bythat would otherwise be due to the Former Advisor VRM I and/or VRM II (collectively,from the “Call Parties”) at a price equal to $17.50 per share of common stock. Any repurchases shall be made in proportion to each Call Party's relative interest, which is determined by dividing the number of shares of common stock then held by such Call Party by the total number of shares of common stock then held by all of the Call Parties.
Company on December 31, 2021.In connection with the Internalization, the Company has entered into employment agreementsthe 2019 Employment Agreements with the Executives,certain of its executive officers, as further described herein. At the Closing, the 2019 Employment Agreement was terminated. In addition, pursuant toconnection with his termination, Mr. Shustek received $2,400,000. In connection with the Contribution Agreement,Closing, Daniel Huberty, the Company has agreed to make offers of employment, on an at-will basis, to all of the other employees of the Advisor. These employees will be offered substantially the sameCompany’s President and Chief Operating Officer, resigned from his positions with the Company at the same salary and a target annual bonus opportunity no less than the last annual bonus paid to such employees by the Advisor. The Company has agreed not to reduce such compensation for at least one year after each employee's hire date and has also agreed to adopt a severance policy for non-executive employees that provides for severance benefits in amounts to be determined in accordance with the severance policy, subject to a limit of not more than twelve months of the employee's base salary. Each employee is expected to begin work as an employee of the Company upon the expiration of the employee leasing term under the Employee Leasing Agreement described below. The Company will also make available under its equity incentive plan a pool of not less than 500,000 shares of common stock for issuance to officers, employees and directors of the Company and its subsidiaries in the form of restricted stock or other equity-based awards. Awards to executive officers and employees will be determined by the Compensation Committee after consulting with and considering the recommendations of the CEO.
Commencing on the Effective Date and ending on the three year anniversary of the Effective Date (the “Non- Competition“Non-Competition Period”), each of the Former Advisor and Mr. Shustek agreed, on the terms set forth in the Contribution Agreement, (i) not to engage in any business in the United States which is primarily engaged in the business of acquiring, investing in, owning, operating, or leasing parking lots, parking garages or other parking facilities, and (ii) not to solicit any of the Company'sCompany’s customers or employees.
In connection with the Contribution Agreement and the Internalization, the Company entered into a Services Agreement, dated as of March 29, 2019 (the "Services Agreement"“Services Agreement”), with the Former Advisor VRM I, VRM II and Mr. Shustek (collectively, the “Manager Entities”). Pursuant to the Services Agreement, each of the Manager Entities will perform any and all services requested by the Company in connection with any agreement pursuant to which the Company, MVP REIT IIthe Operating Partnership LP (the “Operating Partnership”) or any of the Company'sCompany’s subsidiaries borrows funds or is a guarantor with regard to any borrowed funds (such documents, collectively, the “Loan Documents”), including (i) maintaining the ownership and management structure of each Manager Entity in a manner that complies with any requirement set forth in the Loan Documents, (ii) complying with any representations, warranties and covenants in the Loan Documents and (iii) cooperating and taking all actions to comply with any request made by a lender relating to any Loan Document (collectively, the “Services”). The Agreement became effective on March 29, 2019 and will remain in effect until the date on which the Company no longer needs any of the Services. In consideration for the Services, the Manager Entities will be entitled to receive, beginning on the date upon which the Company completes its first capital raise after the Effective Date, $200,000 per year for four years (the “Consulting Fee”). The Consulting Fee will be payable monthlyyears. On August 25, 2021, the Company entered into an Amendment to the Services Agreement providing the Former Advisor a one-time consulting fee in arrears, eitheran amount equal to $800,000 in cash or, atlieu of four annual payments of $200,000 for the Company's election, shares of common stock.
services set forth therein.Employee Leasing Agreement
In connection with the Contribution Agreement and the Internalization, the Company entered into an Employee Leasing Agreement, dated as of March 29, 2019 and effective as of the Effective Date (the “Employee Leasing Agreement”), with the Manager Entities, pursuant to which the Manager Entities will lease their employees to the Company to continue to provide services to the Company as performed by such employees immediately before the Effective Date. The term of the Employee Leasing Agreement commenced on the Effective Date and will continuecontinued until the earlier of (i) the first date on which all leased employees cease to be employed by the Former Advisor and (ii) June 30, 2019 (the “Employee Leasing Period”). For each payroll period during the Employee Leasing Period, the Company will makemade leased employee payments to the Former Advisor equal to the aggregate amount of all salaries, wages, benefits, and other compensation paid by the Former Advisor to the leased employees, together with all costs and expenses incurred by the Former Advisor with respect to the leased employees during the applicable payroll period. As soon as benefit plans have been established by the Company, and the Company is otherwise ready to hire the leased employees, the Company expects to make offers of employment to the leased employees in accordance with the Contribution Agreement; provided that offers of employment must be made no later than ten days prior to the expiration of the Employee Leasing Period. The Company has also agreed to pay directly or reimburse the Former Advisor for any paid time- off days paid to any leased employees in accordance with the Contribution Agreement and Employee Leasing Agreement.
Registration Rights Agreement
In connection with the Contribution Agreement and the Internalization, the Company entered into a Registration Rights Agreement, dated as of March 29, 2019 and effective as of the Effective Date, (the “Registration Rights Agreement”), with the Former Advisor, VRM I and VRM II (collectively, the “Holders”). Pursuant to theII. The Company terminated this Registration Rights Agreement, each Holder, in respect of any shares of common stock that they may receive as part of the Consideration (“Registrable Share”), may require the Company from time to time to register, under the Securities Act of 1933, as amended, the resale of such shares of common stockand on August 25, 2021, entered into a registration statement filed with the SEC. Theseparate Registration Rights Agreement grants each Holder certain rights to demand a registration of some or all of their Registrable Shares (a “Demand Registration”) or to request the inclusion of some or all of their Registrable Shares in a registration being effected by the Company for itself or on behalf of another person (a “Piggyback Registration”), in each case subject to certain customary restrictions, limitations, registration procedures and indemnity provisions. The Company is obligated to use reasonable best efforts to prepare and file a registration statement within specified time periods and to cause that registration statement to be declared effective by the SEC as soon as reasonably practicable thereafter.
The ability to cause the Company to effect a Demand Registration is subject to certain conditions. The Company is not required to effect such registration prior to 180 days after the date of the initial listing of Registrable Shares on a national securities exchange or prior to the expiration of any lock-up period imposed under the Contribution Agreement.
If, pursuant to an underwritten Demand Registration or Piggyback Registration, the managing underwriter advises that the number of Registrable Shares requested to be included in such registration exceeds a maximum number that the underwriter believes can be sold without delaying or jeopardizing the success of the proposed offering, the Registration Rights Agreement specifies the priority in which Registrable Shares are to be included.
with Color Up.Termination Agreement
In connection with the Contribution Agreement and Internalization, the Company, the Operating Partnership and the Former Advisor entered into a Termination Agreement, dated as of March 29, 2019 (the “Termination Agreement”), terminating each of the Management Agreements effective as of the Effective Date. Pursuant to the Termination Agreement, except as provided in the Contribution Agreement, effective as of the Effective Date, each of the Management Agreements shall be void and shall have no effect, and no party thereto shall have any liability to the other party or parties thereto or their respective affiliates, or their respective directors, officers or employees; provided that the Termination Agreement does not relieve any party from liability for any fees or expenses accrued through the Effective Date or for any breach of the Management Agreements that arose prior to the Effective Date.
Independent Directors
The NASAA REIT Guidelines require the Company's charter to define an independent director as a director who is not and has not for the last two years been associated, directly or indirectly, with the Sponsor or the Advisor. A director is deemed to be associated with the Sponsor or the Advisor if he or she owns any interest in, is employed by, is an officer or director of, or has any material business or professional relationship with the Sponsor, the Advisor or any of their affiliates, performs services (other than as a director) for us, or serves as a director or trustee for more than three REITs sponsored by the Sponsor or advised by the Advisor. A business or professional relationship will be deemed material per se if the gross revenue derived by the director from the Sponsor, the Advisor or any of their affiliates exceeds five percent of (1) the director's annual gross revenue derived from all sources during either of the last two years or (2) the director's net worth on a fair market value basis. An indirect relationship is defined to include circumstances in which the director's spouse, parents, children, siblings, mothers- or fathers-in-law, sons- or daughters-in-law or brothers- or sisters-in-law is or has been associated with the Company, the Sponsor, the Advisor or any of its affiliates.
A majority of the Board of Directors, including a majority of the independent directors, must determine the method used by the Advisor for the allocation of the acquisition of investments by two or more affiliated programs seeking to acquire similar types of assets is fair and reasonable to us. The Company's independent directors, acting as a group, will resolve potential conflicts of interest whenever they determine that the exercise of independent judgment by the full Board of Directors or the Advisor or its affiliates could reasonably be compromised. However, the independent directors may not take any action which, under Maryland law, must be taken by the entire Board of Directors or which is otherwise not within their authority. The independent directors, as a group, are authorized to retain their own legal and financial advisors. Among the matters we expect the independent directors to review and act upon are:
transactions with affiliates, includingFamily Relationships Brandon Welch, our directors and officers;
awards under our equity incentive plan; and
pursuit of a potential liquidity event.
Those conflict of interest matters that cannot be delegated to the independent directors, as a group, under Maryland law must be acted upon by both the Board of Directors and the independent directors.
Family Relationships
Brandon Welch,former Senior Vice President, Capital Markets, is the son-in-law of Michael V. Shustek, the Company'sCompany’s former Chief Executive Officer and Chairman of the Board of Directors. From MayBoard. For the year ended December 31, 2018 to December 1, 2018,2019 and 2020, the Company paid Mr. Welch served as the Company's Interim-Chief Financial Officer. Allsalary of $200,000 and $200,000, respectively. Mr. Welch's compensation for 2018 was paid by the former Advisor. Mr. Welch became an employee of the Company pursuant to Internalization and, as a result, his compensation is currently paid directly by the Company. For 2019, Mr. Welch'sWelch’s base annual salary isfor 2021 was $200,000. Mr. Welch is subject towas not awarded any annual bonuses atfor the sole discretion of Daniel Huberty, our Presidentyears ended December 31, 2019 and Chief Operating Officer, and is2020. Mr. Welch was also eligible to participate in the Company'sCompany’s general employee benefit programs (i.e., 401K plan, health insurance, etc.).
The Company's Acquisitions
Mr. Welch resigned as Senior Vice President, Capital Markets, effective August 25, 2021.Other Matters Two of the Company’s Cincinnati assets, 1W7 Carpark and 222W7, are currently operated by PCA, Inc., d/b/a Park Place Parking. Park Place Parking is a private parking operator that is wholly owned by relatives of the Company’s Chief Executive Officer, Manuel Chavez III. Mr. Chavez is neither an owner nor a beneficiary of Park Place Parking. Park Place Parking has been operating these assets for four and three years, respectively. Both assets were acquired with their management agreements in place and at the same terms under which they were operating prior to the Transaction. The Company will not purchase or lease assetsis an equity method investor in whichMVP St. Louis Cardinal Lot, DST, a Delaware Statutory Trust (“MVP St. Louis”). Pursuant to the Sponsor,closing of the Transaction, the former Advisor any of the Company's directors or any of their affiliates has an interest without a determination by a majority of the Company's directors (including a majority of the independent directors) not otherwise interested in the transaction that such transaction is fair and reasonable to us and at a price to us no greater than the cost of the asset to the Sponsor, the former Advisor,Chief Executive Officer, Michael V. Shustek, were replaced as manager of MVP Parking, DST, LLC by Mr. Chavez. AVAILABILITY OF ANNUAL REPORT ON FORM 10-K The Annual Report is on file with the director or the affiliated seller or lessor, unless there is substantial justification for the excess amount and such excess is reasonable. In no event may the Company acquire any such asset at an amount in excess of its current appraised value.
The consideration the Company pays for real property will ordinarily be basedSEC on the fair market value of the property as determined by a majority of the members of the Board of Directors or the members of a duly authorized committee of the board. In cases in which a majority of the Company's independent directors so determine, and in all cases in which real property is acquired from the Sponsor, the former Advisor, any of the Company's directors or any of their affiliates, the fair market value shall be determined by an independent expert selectedweb site maintained by the Company's independent directors not otherwise interested in the transaction.
Loans
The Company will not make any loans to the Sponsor, the former Advisor or the Company's directors or officers or any of their affiliates (other than mortgage loans complying with the limitations set forth in Section V.K.3 of the NASAA REIT Guidelines or loans to wholly owned subsidiaries)SEC at http://www.sec.govand is incorporated by reference into this Proxy Statement. In addition, the Company will not borrow from these affiliates unless a majority of the Board of Directors (including a majority of the independent directors) not otherwise interested in the transaction approves the transaction as being fair, competitive and commercially reasonable and no less favorable to us than comparable loans between unaffiliated parties. These restrictions on loans will only apply to advances of cash that are commonly viewed as loans, as determinedHOUSEHOLDING As permitted by the Board of Directors.
Other Transactions Involving Affiliates
A majority of the Company's directors, including a majority of the independent directors not otherwise interested in the transaction, must conclude that all other transactions between the Company and the Sponsor, the former Advisor, any of the Company's directors or any of their affiliates are fair and reasonable to the Company and on terms and conditions not less favorable to the Company than those available from unaffiliated third parties. To the extent that the Company contemplates any transactions with affiliates, members of the Board of Directors who serve on the board of the affiliated entity will be deemed “interested directors” and will not participate in approving or making other substantive decisions with respect to such related party transactions.
Issuance of Options and Warrants to Certain Affiliates
Until the Company's shares of common stock are listed on a national securities exchange, the Company will not issue options or warrants to purchase our common stock to the former Advisor, the Sponsor, any of the Company's directors or any of their affiliates, except on the same terms as such options or warrants, if any, are sold to the general public. We may issue options or warrants to persons other than the former Advisor, the Sponsor, the Company's directors and their affiliates prior to listing the Company's common stock on a national securities exchange, but not at an exercise price less than the fair market value of the underlying securities on the date of grant and not for consideration (which may include services) that in the judgment of the Board of Directors has a market value less than the value of such option or warrant on the date of grant. Any options or warrants we issue to the former Advisor, the Sponsor or any of their affiliates shall not exceed an amount equal to 10% of the outstanding shares of the Company's common stock on the date of grant.
Reports to Stockholders
The Company will prepare an annual report and deliver it to the Company's common stockholders within 120 days after the end of each fiscal year. The Company's directors are required to take reasonable steps to ensure that the annual report complies with the Company's charter provisions as applicable. Among the matters that must be included in the annual report or included in a proxy statement delivered with the annual report are:
financial statements prepared in accordance with GAAP that are audited and reported on by independent certified public accountants;
the ratio of the costs of raising capital during the year to the capital raised;
the aggregate amount of advisory fees and the aggregate amount of other fees paid to the Advisor and any affiliates of the Advisor by the Company or third parties doing business with the Company during the year;
the Company's total operating expenses for the year stated as a percentage of the Company's average invested assets and as a percentage of the Company's net income;
a report from the independent directors that the Company's policies are in the best interests of the Company's stockholders and the basis for such determination; and
a separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving us and the Advisor, a director or any affiliate thereof during the year, which disclosure has been examined and commented upon in the report by the independent directors regarding the fairness of such transactions.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Shown below is certain information as of October 27, 2020, with respect to beneficial ownership, as that term is defined in Rule 13d-3 under the Exchange Act, of shares of common stock by the only persons or entities known to us to be a beneficial owner of more than 5% of the outstanding shares of common stock. Unless otherwise noted, the percentage ownership is calculated based on 7,327,696 shares of our common stock outstanding as of October 27, 2020. For purposes of calculating each person's or group's percentage ownership, shares of common stock issuable pursuant to the terms of stock options and Operating Partnership units exercisable within 60 days after October 27, 2020, are included as outstanding and beneficially owned for that person or group, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person or group. All unvested time-based and performance-based restricted stock awards are included in each holder's beneficial ownership as holders are entitled to voting rights upon issuance of the restricted stock awards.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | | Percent of Class | | Vestin Realty Mortgage II, Inc. 9130 W. Post Rd Suite 130 Las Vegas, NV 89148 | Sole voting and investment power of 854,067(1) shares
| | | 11.65
| %
| Vestin Realty Mortgage I, Inc. 9130 W Post Rd Suite 130 Las Vegas, NV 89148 | Sole voting and investment power of 456,834(1) shares
| | | 6.23
| %
|
(1) | Beneficial ownership is based on ownership as set forth in the Schedule 13D/A filed by Vestin Realty Mortgage I, Inc., Vestin Realty Mortgage II, Inc. and Michael V. Shustek with the SEC on June 4, 2020. |
The following table sets forth the total number and percentage of common stock beneficially owned as of October 27, 2020, by:
Our chief executive officer and the officers of our manager who function as the equivalent of our executive officers; and
All executive officers and directors as a group.
Unless otherwise noted, the percentage ownership is calculated based on 7,327,696 shares of our total outstanding common stock and 42,672 shares of our total outstanding preferred stock as of October 27, 2020:
| | | | Common Shares Beneficially Owned | | | Preferred Shares Beneficially Owned | | | Beneficial Owner | Address | | Number | | | Percent | | | Number | | | Percent | | | Michael V. Shustek(1) | 9130 W. Post Rd Suite 200, Las Vegas, NV 89148 | | | 1,324,324 | | | | 18.06 | % | | | -- | | | | -- | | | Dan Huberty | 9130 W. Post Rd Suite 200, Las Vegas, NV 89148 | | | 3,599 | | | <1% | | | | -- | | | | -- | | | John E. Dawson | 8925 W. Post Rd Suite 210, Las Vegas, NV 89148 | | | 2,570 | | | <1% | | | | 54(2 | ) | | <1% | | | Robert J. Aalberts | 311 Vallarte Dr. Henderson NV 89014 | | | -- | | | | -- | | | | -- | | | | -- | | | Nicholas Nilsen | 3074 Soft Horizon Way Las Vegas, NV 89135 | | | 2,141 | | | <1% | | | | -- | | | | -- | | | Shawn Nelson | Hall of Administration 333 W. Santa Ana Blvd. Santa Ana, CA 92701 | | | -- | | | | -- | | | | -- | | | | -- | | | All directors and officers | | | | 1,332,634 | | | | 18.18 | % | | | 54 | | | <1% | |
1. | Please see Footnote 1 to the table of Security Ownership of 5% Beneficial Owners above. |
2. | Mr. Dawson received 1,750 warrants with his purchase of 54 shares of preferred stock. The warrants may be exercised after the 90th day following the occurrence of a Listing Event (as defined in the Articles Supplementary classifying and designating our preferred stock), at an exercise price, per share, equal to 110% of the volume weighted average closing price during the 20 trading days ending on the 90th day after the occurrence of such Listing Event; however, in no event shall the exercise price of the warrants be less than$25 per share. |
MULTIPLE STOCKHOLDERS SHARING AN ADDRESS
The rules of the SEC permit companies to provide a single proxy statement to households in which more than one stockholder resides. This process is known as householding. Stockholders who share an address and who have been previously notified that their broker, bank or other intermediary will be householding their proxy materials will receivewe may deliver only one copy of our proxy statementthe Notice Regarding the Availability of Proxy Materials, Notice of 2021 Annual Meeting, this Proxy Statement and the Annual Report To Stockholders to shareholders residing at the same address, unless theythe shareholders have affirmatively objectednotified us of their desire to the householding notice.
receive multiple copies of those documents. This practice is known as "householding."Stockholders sharing an address who received only one set of these materials may request a separate copy which will be sent promptly at no cost by contacting our corporate secretary at (702) 534-5577.(513) 834-5110. For future meetings, a stockholder may request separate annual reports or proxy statements,Notice Regarding the Availability of Proxy Materials, Notice of 2021 Annual Meeting, this Proxy Statement and the Annual Report To Stockholders, or may request the householding of such materials, by contacting us as noted above.
Under our current bylaws, for a stockholder proposal (including, but not limited to, nominations of candidates for director) to be properly submitted for presentation at the next annual meeting of stockholders, the Company's secretary must have received written notice of the proposal at its principal executive offices no earlier than the 150th day and no later than 5:00 p.m. Pacific Time, on the 120th day prior to the first anniversary of the date of the proxy statement (as such term is defined in our current bylaws) for the preceding year's annual meeting (or, for the 2021 annual meeting of stockholders, between June 20, 2021 and 5:00 p.m., Pacific Time, on July 20, 2021, based on November 17, 2020, the date this year's Proxy Statement is released to stockholders). However, if the date of the 2021 annual meeting of stockholders is more than 30 days before or after December 28, 2021, the proposal must be received no earlier than the 150th day prior to the date of the 2021 annual meeting and no later than 5:00 p.m., Pacific Time, on the later of (i) the 120th day prior to the date of such meeting, as originally convened, or (ii) the tenth day following the day on which public announcement of the date of such meeting is made. Under SEC regulations, any stockholder desiring to make a proposal to be considered for inclusion in the Company's proxy statement for the next annual meeting of stockholders pursuant to Rule 14a-8 promulgated under the Exchange Act must have caused such proposal to be received at Company's principal executive offices no later than July 20, 2021, unless the date of the 2021 annual meeting of stockholders is more than 30 days before or after December 28, 2021, in which case the proposal must be received in a reasonable time before the Company begins to print and send its proxy materials.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-K
We file annual, quarterly and current reports and other information with the SEC. You may read and copy any reports or other information we file with the SEC on the web site maintained by the SEC at http://www.sec.gov. Our SEC filings are also available to the public at the SEC's Public Reference Room located at 100 F Street, N.E., Washington, DC 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 or 1-202- 551-7900 for further information regarding the public reference facilities.
As of the date of this proxy statement,Proxy Statement, we know of no business that will be presented for consideration at the Annual Meeting other than the matters referred to above. As to any other business that may properly come before the Annual Meeting or any postponement or adjournment thereof, the persons named as proxy holders on your proxy card will vote the shares of common stock represented by properly submitted proxies in their discretion.
YOUR VOTE IS IMPORTANT. THE PROMPT RETURN OF PROXIES, INCLUDING YOUR PROXIES AUTHORIZED VIA THE INTERNET AND TELEPHONE, WILL SAVE US THE EXPENSE OF FURTHER REQUESTS FOR PROXIES. WE ENCOURAGE YOU TO COMPLETE, SIGN, DATE AND RETURN YOUR PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE, OR AUTHORIZE YOUR PROXY VIA THE INTERNET OR TELEPHONE, BEFORE THE MEETING, SO THAT YOUR SHARES WILL BE REPRESENTED AND VOTED AT THE MEETING. Stephanie Hogue Secretary Cincinnati, Ohio November 16, 2021  -31-
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