|
|
Item 10.
|
Directors,
Executive Officers and Corporate Governance
|
Executive Officers and Directors
Our Board of Directors
consists of eight directors. Of these eight directors, we believe that seven, constituting a majority, are considered “independent”
with independence being determined in accordance with the listing standards established by the NASDAQ Capital Market.
Set forth below are
the names, ages and positions of our directors and executive officers as of the date of this report.
|
Name
|
|
Age
|
|
Position
|
|
Chad
M. Carpenter
|
|
52
|
|
President,
Chief Executive Officer and Chairman of the Board of Directors
|
|
Thad
L. Meyer
|
|
57
|
|
Chief
Financial Officer, Chief Operating Officer and Secretary
|
|
Jon
Haahr
|
|
64
|
|
Director
|
|
Richard
P. Imperiale
|
|
58
|
|
Director
|
|
Xiaofan
Bai
|
|
35
|
|
Director
|
|
Xiaohang
Bai
|
|
29
|
|
Director
|
|
Yifeng
Huang
|
|
32
|
|
Director
|
|
Xinghua
Wang
|
|
35
|
|
Director
|
|
Zhen
Luo
|
|
35
|
|
Director
|
Set forth below is
biographical information for each of our directors and executive officers.
Chad M. Carpenter
has served as our President and Chief Executive Officer and as a member of our Board of Directors since July 2, 2012, and as the
Chairman of our Board of Directors since August 29, 2012. Mr. Carpenter also served as our Chief Financial Officer from July 2,
2012 to December 26, 2013 and as our Secretary from July 2, 2012 to July 5, 2012. Mr. Carpenter is the Chief Executive Officer and a member of the Board of Directors of Reven Capital, LLC (“Reven Capital”),
a private real estate investment firm focused on opportunistic investing, positions he has held since he founded Reven Capital
in January 2009. Mr. Carpenter oversees all aspects of Reven Capital’s operations and chairs all investment committees and
boards for each of its funds. Prior to founding Reven Capital, Mr. Carpenter served in various executive officer capacities, including
Chief Executive Officer and Chief Financial Officer, and a member of the investment committee of Equastone, LLC (“Equastone”)
since he co-founded the company in 1994. Equastone was primarily engaged in the investment of office properties in the western
and southern regions of the United States. Mr. Carpenter has been involved in over $2 billion in real estate transactions, with
over 27 years of experience in real estate, investing, fund management, operations and brokerage across multiple property types.
In addition, Mr. Carpenter has experience with international investments and the acquisition of distressed debt and related foreclosure.
He is a frequent speaker on the topic of real estate investing and real estate capital markets. In 2005, Mr. Carpenter was selected
as one of Real Estate Southern California’s “40 Under 40.” In 2007, he was a finalist for the Ernst & Young
Entrepreneur of the Year Award in San Diego and was also chosen as one of the “20 Rising Stars of Real Estate” globally
by Institutional Investor News. Mr. Carpenter also currently serves on the Board of Directors of Western Residential Opportunity
Fund, LLC, and he was a member of the Board of Directors of Dahc Investments, Inc. from January 2009 to December 2012. Mr. Carpenter
holds a Bachelor of Arts degree in Economics from the University of Southern California. We believe that Mr. Carpenter’s
experience as President and Chief Executive Officer of Reven Housing REIT, Inc. and his many years of industry experience qualify
him to be a member of our Board of Directors.
Jon K. Haahr has served
as a member of our Board of Directors since July 5, 2012. Mr. Haahr is senior managing principal of Silver Portal Capital, LLC,
an investment and merchant bank focusing exclusively on the real estate sector, which he founded in 2001. In this role, Mr. Haahr
provides strategic and financial advice and capital formation services to real estate clients with interests in a wide range of
commercial, healthcare and hospitality properties. Prior to founding Silver Portal, Mr. Haahr was co-head and managing director
of real estate investment banking for Wachovia Securities from 1999 to 2000. Mr. Haahr founded and managed the Real Estate and
Lodging Group at EVEREN Securities, Inc., the successor firm to Kemper Securities, from 1991 to 1999. Mr. Haahr also served on
the board of directors of Clarion Partners Property Trust Inc. from June 2010 to July 2013 and as non-executive chairman of the
board of directors of Genea Energy Partners, Inc. from April 2011 to August 2011. Other past board directorships include Great
Lakes REIT, Inc. (NYSE: GL) and Arlington Hospitality, Inc. (NASDAQ: HOST). He also previously served as a Trustee of the James
A. Graaskamp Center for Real Estate School at the University of Wisconsin in Madison. Mr. Haahr maintains a number of industry
affiliations, including the Urban Land Institute, an industry association representing community builders and Pension Real Estate
Association, an industry association for institutional real estate investors. Mr. Haahr is a certified public accountant and holds
a Bachelor of Arts in Economics from Iowa State University in Ames and a Master of Business Administration from the University
of Iowa in Iowa City. We believe that Mr. Haahr’s real estate investment banking experience, his prior experience on the
board of directors of public and private companies, and his certified public accountant designation qualify him to be a member
of our Board of Directors.
Richard P. Imperiale
was appointed to our Board of Directors on June 13, 2017. Since 1984, Mr. Imperiale has served as President of the Uniplan Companies,
a Milwaukee, Wisconsin based investment advisory holding company that, together with its affiliates, manages and advises over
$2.5 billion in client accounts. Uniplan Companies was founded by Mr. Imperiale in 1984 and specializes in managing equity-income,
REIT and micro cap specialty portfolios for clients. Mr. Imperiale started his career at the First Wisconsin National Bank (now
U.S. Bank), where he served as a credit analyst from September 1979 to April 1982. In May 1982, Mr. Imperiale joined B.C. Ziegler
& Company, a Midwest regional brokerage firm where he served as an Associate Portfolio Manager and was instrumental in the
development of portfolio strategies for one of the first hedged municipal bond mutual funds in the country. Mr. Imperiale currently
sits on the board of Retail Properties of America (RPAI: NYSE), a REIT that owns and operates a portfolio of high quality, strategically
located shopping centers in the United States, and I-Select Fund, a St. Louis, Missouri based venture fund. Previously, Mr. Imperiale
sat on the board of directors and was a member of the audit committee of Ellington Housing Inc., a single family rental REIT,
which subsequently sold its single family homes to American Homes 4 Rent. Mr. Imperiale has authored several books on investing,
including “Real Estate Investment Trusts: New Strategies for Portfolio Management”, published by John Wiley &
Sons, 2002. In 2013 Mr. Imperiale was recognized by the National Association of Corporate Directors as a Board Leadership Fellow.
Mr. Imperiale attended Marquette University Business School where he received a B.S. in Finance. We believe that Mr. Imperiale’s
investment advisory and portfolio management experience qualify him to be a member of our Board of Directors.
Xiaofan Bai was appointed
to our Board of Directors on September 27, 2013. He is currently the Director of Allied Fortune (HK) Management Ltd, which is
a fund and asset management company focusing primarily in the real estate sector. In this role, Mr. Bai oversees all aspects of
Allied Fortune’s operations and manages its investment funds and real assets. Prior to founding Allied Fortune in June 2012,
Mr. Bai was the Senior Investment Manager in China Pacific Insurance Co., the third largest insurance company in China, from June
2011 to May 2012. Mr. Bai previously worked for the real estate investment banking team at Macquarie Bank, where he participated
in deals in Australia, Hong Kong, China, Japan and the USA and was primarily responsible for due diligence, corporate valuation,
negotiation and other investment banking activities. From March 2009 to April 2011, Mr. Bai worked in the Proprietary Trading
Department of ShenYinWanGuo Securities Co. Mr. Bai holds a Bachelor’s Degree in Finance and a Master’s Degree in Accounting,
both from the University of Sydney. We believe that Mr. Bai’s professional experience in investment banking, asset management
and corporate management qualify him to be a member of our Board of Directors.
Xiaohang Bai was appointed
to our Board of Directors on September 27, 2013. Mr. Bai has served as the Chief Investment Officer of Allied Fortune (HK) Management
Ltd since August 2013. In this role, Mr. Bai leads the research team on global equities and provides professional skills in asset
management. Mr. Bai specializes in real estate stock investment and investment fund management. From June 2012 to August 2013,
Mr. Bai served as an equity investment manager of Fanyu Investment Limited, a wholly-owned subsidiary of Allied Fortune. Mr. Bai
is a FRM Part II candidate. He holds a Bachelor of Science degree in Finance from the Shanghai University of International Business
and Economics and a Master of Science degree in Finance from Clark University. We believe that Mr. Bai’s professional experience
relating to investments in global equities, especially in the real estate sector, qualify him to be a member of our Board of Directors.
Yifeng Huang was appointed
to our Board of Directors on November 3, 2014. Mr. Huang has served a Director of Peninsula Shanghai Limited, which is engaged
in the business of hotel management, since July 2012. Mr. Huang has also served as General Manager of Business Development of
Greenland HK, which is engaged in the business of property development, since September 2012. From August 2010 to August 2012,
Mr. Huang was employed by Morgan Stanley as an investment banker, and from 2009 to July 2010 Mr. Huang served as a financial analyst
for JP Morgan. We believe that Mr. Huang’s professional experience in investment banking, property development and hotel
management qualify him to be a member of our Board of Directors.
Xinghua Wang was appointed
to our Board of Directors on November 3, 2014. Mr. Wang has served as the China regional financial controller of Otis, the world’s
leading manufacturer of elevators, escalators and moving walkways, since June 2016. Prior to joining Otis, Mr. Wang had been employed
by Deloitte Touche Tohmatsu CPA LLP since 2005, most recently as Senior Audit Manager since 2014, pursuant to which he managed
audits of international companies, including corporations listed on the Nasdaq Stock Market and New York Stock Exchange. Mr. Wang
is a certified public accountant licensed by the State of Alaska and a member of the Chinese Institute of Certified Public Accountants.
Mr. Wang received a Bachelor’s Degree in Science from Shanghai Jiatong University in China. We believe that Mr. Wang’s
prior experience as an audit manager of an international PCAOB member firm and his certified public accountant designation qualify
him to be a member of our Board.
Zhen Luo was elected
to our Board on January 20, 2017. Since May 2010, Mr. Luo has served as general manager of Shanghai Huazhou Real Estate Development,
a Shanghai-based real estate development company. He also worked for Tishman Speyer from 2008 to 2010 and for Grosvenor Limited
from 2006 to 2008, each of which are real estate development companies. Mr. Luo holds degrees in Economics from the University
of York and Finance and Real Estate Economics from London School of Economics and Political Science. We believe that Mr. Luo’s
extensive professional experience in real estate development and investing qualify him to be a member of our Board.
Thad L. Meyer has
served as our Secretary since October 30, 2013, as our Chief Financial Officer since December 26, 2013, and as our Chief Operating
Officer since April 17, 2014. Mr. Meyer is President of Alliance Turnaround Management, Inc., a position he has held since November
2002. Alliance Turnaround Management is a problem resolution firm that specializes in distressed real estate opportunities. Since
February 2009, Mr. Meyer has also served as the Chief Financial Officer of Reven Capital. From March 2011 to April 2013, Mr. Meyer
served as principal and Chief Operating Officer of Southern California Investors, Inc., a firm specializing in the acquisition,
improvement and sale of distressed single-family homes. Additionally, from November 2004 to February 2009, Mr. Meyer served as
the Chief Financial Officer of Equastone. Mr. Meyer is a Certified Public Accountant, Certified Turnaround Professional, and a
California Real Estate Broker. Mr. Meyer holds a Bachelor of Science degree in Accounting from Colorado State University.
Family Relationships
Mr. Xiaofan Bai and
Mr. Xiaohang Bai are cousins. There are no other family relationships between any of our directors and executive officers.
Committees of the Board of Directors
Our Board of Directors
has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. Each of these
committees consists of three members, all of whom are “independent” directors in accordance with the listing standards
established by the NASDAQ Capital Market. Each of our board committees is subject to a charter that complies with current SEC
and NASDAQ rules relating to corporate governance matters. Each of our committees operates under a written charter, a copy of
which is available at our investor relations website located at http://www.revenhousingreit.com.
Audit Committee
The Audit Committee,
which is composed of Richard P. Imperiale, Jon Haahr, and Xinghua Wang and for which Mr. Imperiale currently serves as the Chairman,
assists our Board of Directors in overseeing our accounting and financial reporting processes and the audits of our financial
statements. Our Board of Directors has affirmatively determined that each of the Audit Committee members meets the definition
of “independent director” for purposes of the NASDAQ Capital Market rules and the independence requirements of Rule
10A-3 of the Securities Exchange Act of 1934, as amended. Our Board of Directors has also determined that Mr. Wang qualifies as
an “audit committee financial expert” under SEC rules and regulations and that each of the other members of the Audit
Committee is financially literate within the meaning of Rule 10A-3. During the year ended December 31, 2017, our Audit Committee
met four times.
Compensation Committee
The Compensation Committee,
which is composed of Messrs. Xiaofan Bai, Xiaohang Bai and Jon Haahr, and for which Mr. Xiaofan Bai currently serves as the Chairman,
approves all compensation for our executive officers and otherwise supports our Board of Directors in fulfilling its oversight
responsibilities relating to senior management and director compensation, including the administration of our Amended and Restated
2012 Incentive Compensation Plan, and reviews compensation received by directors for service on our Board of Directors and its
committees. Our Board of Directors has determined that each of the members of our Compensation Committee satisfies the NASDAQ
Capital Market’s independence standards. During the year ended December 31, 2017, our Compensation Committee met
four times.
Nominating and
Corporate Governance Committee
The Nominating and
Corporate Governance Committee, which is composed of Messrs. Xiaofan Bai, Xiaohang Bai and Jon Haahr and for which Mr. Xiaofan
Bai currently serves as the Chairman, assists our Board of Directors in identifying and recommending candidates to fill vacancies
on our Board of Directors and for election by the stockholders, recommending committee assignments for directors, overseeing our
Board of Directors’ annual evaluation of the performance of our Board of Directors, its committees and individual directors,
and developing and recommending to our Board of Directors appropriate corporate governance policies, practices and procedures
for our Company. Our Board of Directors has determined that each of the members of our Nominating and Corporate Governance Committee
satisfies the NASDAQ Capital Market’s independence standards.
Our Nominating and
Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including the
ability to read and understand basic financial statements, being over 21 years of age, and having the highest personal integrity
and ethics. The committee also intends to consider such factors as diversity, an individual’s business experience and skills,
independence, judgment, integrity and ability to commit sufficient time and attention to the activities of the Board, as well
as the absence of any potential conflicts with our Company’s interests. However, the Nominating and Corporate Governance
Committee retains the right to modify these qualifications from time to time. Candidates for director nominees are reviewed in
the context of the current composition of the Board, the operating requirements of our company, and the long-term interests of
our stockholders. In conducting this assessment, the Nominating and Corporate Governance Committee typically considers diversity,
age, skills, and such other factors as it deems appropriate, given the current needs of the Board and our Company, to maintain
a balance of knowledge, experience, and capability.
Our Nominating and
Corporate Governance Committee will consider for directorship candidates nominated by third parties, including stockholders. However,
at this time, our Nominating and Corporate Governance Committee does not have a policy with regard to the consideration of director
candidates recommended by stockholders. The Nominating and Corporate Governance committee believes that it is in the best position
to identify, review, evaluate, and select qualified candidates for Board membership, based on the comprehensive criteria for Board
membership approved by the Board. For a third party to suggest a candidate, one should provide our corporate secretary, Thad L.
Meyer, with the name of the candidate, together with a brief biographical sketch and a document indicating the candidate’s
willingness to serve if elected.
The Nominating
and Corporate Governance Committee operates under a written charter that satisfies the applicable listing requirements and
rules of the Nasdaq Stock Market. During the year ended December 31, 2017, our Nominating and Corporate Governance Committee
met two times.
Board Leadership
Structure
Mr. Carpenter has
served as our Chief Executive Officer since July 2012 and as our chairman of the board since August 2012. While we do not have
a formal policy on whether the Chairman and Chief Executive Officer positions should be separate or combined, our Board of Directors
has determined that at this time it is appropriate for the Chairman and the Chief Executive Officer to be the same individual.
The Board of Directors has also determined, for the reasons set forth herein, that a lead independent director is not necessary
and has not appointed one at this time. In making these determinations, the Board of Directors considered the relative size of
the Company, the size of the Board of Directors and the fact that all remaining members of the Board of Directors are independent
Directors. The Board believes that having a combined role, considering the Company’s size, enhances the ability to provide
insight and direction on important strategic initiatives to both management and the Board, and to ensure that they act with a
common purpose. We also believe that our overall corporate governance policies and practices adequately address any governance
concerns raised by the dual Chief Executive Officer and Chairman role. Separating the roles would potentially result in less effective
management and governance processes through undesirable duplication of work and, in worst case, lead to a blurring of the current
clear lines of accountability and responsibility.
Role of the Board
in Risk Oversight
One of the key functions
of our Board of Directors is informed oversight of our risk management process. Our Board of Directors will administer this oversight
function directly, with support from its three standing committees: the Audit Committee, the Nominating and Corporate Governance
committee and the Compensation Committee, each of which will address risks specific to its respective areas of oversight. In particular,
our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our management
has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment
and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements, in addition
to oversight of the performance of our internal audit function. Our Nominating and Corporate Governance Committee will monitor
all current and proposed property investments, evaluate the performance of such investments, monitor the effectiveness of our
corporate governance guidelines, including whether they are able to prevent illegal or improper liability-creating conduct. Our
Compensation Committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage
excessive risk-taking.
Process for Stockholders
to Send Communications to our Board of Directors
Because we have always
maintained open channels of communication with our stockholders, we do not have a formal policy that provides a process for stockholders
to send communications to our Board. However, if a stockholder would like to send a communication to our Board, please address
the letter to the attention of our corporate secretary, Thad L. Meyer and it will be distributed to each director.
Compensation Committee
Interlocks and Insider Participation
None of our independent
directors is currently or has been at any time one of our officers or employees. None of our executive officers currently serves,
or has served during the last year, as a member of the Board or compensation committee of any entity that has one or more executive
officers serving as a member of our Board.
Section 16(A) Beneficial Ownership
Reporting Compliance
Rules adopted by the
SEC under Section 16(a) of the Exchange Act require our officers and directors, and persons who own more than 10% of the issued
and outstanding shares of our equity securities, to file reports of their ownership, and changes in ownership, of such securities
with the SEC on Forms 3, 4 or 5, as appropriate. Such persons are required by the regulations of the SEC to furnish us with copies
of all forms they file pursuant to Section 16(a).
Based solely upon
a review of Forms 3, 4 and 5 and amendments thereto furnished to us during our most recent fiscal year, and any written representations
provided to us, we believe that all of the officers, directors, and owners of more than 10% of the outstanding shares of our common
stock complied with Section 16(a) of the Exchange Act for the year ended December 31, 2017.
Code of Ethics
We have adopted a
code of ethics for all employees, including the chief executive officer, principal financial officer and principal accounting
officer or controller, and/or persons performing similar functions, which is available on our website, under the link entitled
“Code of Ethics”.
|
|
Item 11.
|
Executive
Compensation
|
Executive Officers
Summary Compensation
Table
The following table
sets forth the compensation awarded to, earned by or paid to our chief executive officer and our two other highest paid executive
officers for the years ended December 31, 2017 and 2016.
|
Name
and Principal Position
|
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
|
Nonequity
Incentive Plan Compensation
|
|
|
Nonqualified
Deferred Compensation Earnings
|
|
|
All
Other Compensation
|
|
|
Total
|
|
|
Chad M. Carpenter
|
|
2017
|
|
$
|
277,200
|
|
|
$
|
50,000
|
|
|
$
|
50,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
377,200
|
|
|
CEO
(1)
|
|
2016
|
|
$
|
252,000
|
|
|
$
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
332,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thad L. Meyer
|
|
2017
|
|
$
|
254,100
|
|
|
$
|
50,000
|
|
|
$
|
50,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
354,100
|
|
|
CFO,
COO
(2)
|
|
2016
|
|
$
|
220,500
|
|
|
$
|
80,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
300,500
|
|
|
|
(1)
|
Mr. Carpenter received monthly salary
payments of $23,100 during 2017 and $21,000 during 2016 in accordance with his employment
agreement.
|
|
|
(2)
|
Mr. Meyer has served as our CFO since
December 26, 2013 and as our COO since April 17, 2014. Mr. Meyer received monthly salary
payments of $21,175 during 2017 and $18,375 during 2016.
|
|
|
(3)
|
Our compensation committee awarded
Mr. Carpenter and Mr. Meyer each restricted share grants of 10,800 shares of our common
stock. The dollar values of the share grants reflect the grant date fair value computed
in accordance with FASB ASC Topic 718.
|
Narrative Disclosure
to Summary Compensation Table
Chad M. Carpenter
Mr. Carpenter has
served as our President, Chief Executive Officer and director since July 2, 2012, and as Chairman since August 29, 2012. On March
4, 2013, we entered into an employment agreement with Mr. Carpenter in connection with Mr. Carpenter’s services as
our Chief Executive Officer. The employment agreement provides for an initial term of five years and automatically renews for
successive two-year terms, unless we or Mr. Carpenter elects not to renew. Under the employment agreement, effective as of the
date we have received at least $10 million of capital (net of taxes and expenses), Mr. Carpenter is entitled to begin receiving
an annual base salary of $240,000. As of September 2013, we reached that benchmark, and Mr. Carpenter began receiving salary payments
pursuant to the employment agreement. Mr. Carpenter received monthly salary payments of $21,000 during 2016 in accordance with
that agreement. In December 2016, our compensation committee approved an increase of Mr. Carpenter’s monthly salary to $23,100
commencing January 1, 2017.
Mr. Carpenter will
be entitled to bonuses ranging from 50% to 200% of his base salary based on the satisfaction of performance criteria to be established
by the Compensation Committee of our Board of Directors. Mr. Carpenter will also be entitled to participate in any benefit plans
or other incentive plans that may be offered by us to employees and executives and will be eligible to receive stock options and
other equity awards under our Amended and Restated 2012 Incentive Compensation Plan (the “2012 Plan”) as determined
by the Board. In the event that Mr. Carpenter’s employment is terminated by us without cause, Mr. Carpenter leaves for good
reason as specified in the employment agreement or the employment agreement is not extended by us without cause or by Mr. Carpenter
for good reason, then Mr. Carpenter will be entitled to receive a severance payment equal to two times the sum of his annual base
salary and target bonus plus a lump-sum payment equal to the greater of 1% of the value of our company at the time of notice of
termination or $2,000,000, less any gross amounts received or realized by Mr. Carpenter in respect of any stock options or equity
awards granted to him during the term his employment. Mr. Carpenter will also be entitled to the severance payment if his employment
is terminated by us without cause or by Mr. Carpenter for good reason during the 18-month period following a change in control
of our company. Furthermore, we have agreed to reimburse Mr. Carpenter for actual expenses incurred in connection with the
organization and startup of our business as a housing REIT and any additional expenses incurred during the term of his employment.
In addition, on each anniversary of Mr. Carpenter’s employment, our Compensation Committee shall undertake a compensation
review of comparable public companies in order to determine the amount of any increases to Mr. Carpenter’s base salary,
based on competitive compensation of chief executive officers at such comparable public companies, which amount should be consistent
with at least the fiftieth (50%) percentile of such comparable compensation.
On October 16, 2014,
we granted to Mr. Carpenter 275,000 shares of our common stock pursuant to a Restricted Stock Agreement. Pursuant to the agreement,
all 275,000 shares are subject to vesting and risk of forfeiture based on our ability to achieve certain milestones, provided
that Mr. Carpenter remains in our service as an employee, director or consultant as of the date of such milestone, as follows:
|
|
·
|
68,750
shares vested upon our consummation of an equity raise of at least $25 million (or any
lesser amount raised in a public offering), which was satisfied upon the completion of
our 2016 public offering;
|
|
|
·
|
82,500
shares shall vest upon the earlier to occur of (i) the date we consummate an equity raise
of at least an additional $50 million (in addition to the equity capital raised in the
first vesting event above) or (ii) the date we consummate portfolio acquisitions in the
aggregate amount of $100 million measured from August 1, 2014;
|
|
|
·
|
96,250
shares shall vest upon the earlier to occur of (i) the date we consummate an equity raise
of at least an additional $150 million (in addition to the equity capital raised in the
first two vesting events above) or (ii) the date we consummate portfolio acquisitions
in the additional aggregate amount of $300 million (in addition to the portfolio acquisitions
referred to in the second vesting event above) measured from August 1, 2014; and
|
|
|
·
|
27,500
shares shall vest upon the date we make cash distributions to shareholders at a rate
of at least $0.20 per share annualized over any four consecutive quarters.
|
For vesting conditions
relating to equity raises, any equity capital acquired by us from, or by way of introductions made by, our Director and controlling
beneficial owner, Xiaofan Bai, or his affiliates shall not be counted towards the dollar thresholds. In the event of a change
in control of our company, all unvested shares shall immediately vest as of the date of the change in control.
In February 2016,
we granted to Mr. Carpenter 10,435 shares of our common stock pursuant to a restricted stock agreement as part of his 2015 compensation.
The shares are subject to vesting and risk of forfeiture based on Mr. Carpenter’s continued service to our company on each
of the vesting dates. The shares vest in equal one-third annual installments commencing January 1, 2017.
In January 2018, we
granted to Mr. Carpenter 10,800 shares of our common stock as part of his 2017 compensation.
Thad L. Meyer
On April 17, 2014,
we entered into an employment agreement with Thad L. Meyer in connection with Mr. Meyer’s services as our Chief Financial
Officer, Chief Operating Officer, and Secretary. The employment agreement provides for an initial term of five years and automatically
renews for successive two-year terms, unless we or Mr. Meyer elects not to renew. Under the employment agreement, Mr. Meyer received
monthly salary payments $18,375 during 2016. In December 2016, our compensation committee determined to increase Mr. Meyer’s
monthly salary under the agreement to $21,175 commencing January 1, 2017. Mr. Meyer will be entitled to bonuses ranging from
50% to 200% of his base salary based on the satisfaction of performance criteria to be established by the Compensation Committee
of the Board of Directors. Mr. Meyer will also be entitled to participate in any benefit plans or other incentive plans that may
be offered by us to employees and executives and will be eligible to receive stock options and other equity awards under our 2012
Plan as determined by the Board. In the event that Mr. Meyer’s employment is terminated by us without cause or Mr.
Meyer leaves for good reason as specified in the employment agreement, then Mr. Meyer will be entitled to receive a severance
payment equal to the sum of his annual base salary and target bonus. Mr. Meyer will also be entitled to the severance payment
if his employment is terminated by us without cause or by Mr. Meyer for good reason during the 12-month period following a change
in control of our company. Furthermore, we have agreed to reimburse Mr. Meyer for all reasonable expenses actually paid or incurred
by him during the term of his employment in the course of and pursuant to the business of our company. The employment agreement
also binds Mr. Meyer to a standard non-competition covenant for the term of the agreement plus the one-year period immediately
following termination of his employment.
On October 16, 2014,
we granted to Mr. Meyer 100,000 shares of our common stock pursuant to a Restricted Stock Agreement. Pursuant to the agreement,
all 100,000 shares are subject to vesting and risk of forfeiture based on our ability to achieve certain milestones, provided
that Mr. Meyer remains in our service as an employee, director or consultant as of the date of such milestone, as follows:
|
|
·
|
25,000
shares vested upon our consummation of an equity raise of at least $25 million (or any
lesser amount raised in a public offering), which was satisfied upon the completion of
our 2016 public offering;
|
|
|
·
|
30,000
shares shall vest upon the earlier to occur of (i) the date we consummate an equity raise
of at least an additional $50 million (in addition to the equity capital raised in the
first vesting event above) or (ii) the date we consummate portfolio acquisitions
in the aggregate amount of $100 million measured from August 1, 2014;
|
|
|
·
|
35,000
shares shall vest upon the earlier to occur of (i) the date we consummate an equity raise
of at least an additional $150 million (in addition to the equity capital raised in the
first two vesting events above) or (ii) the date we consummate portfolio acquisitions
in the additional aggregate amount of $300 million (in addition to the portfolio
acquisitions referred to in the second vesting event above) measured from August 1, 2014;
and
|
|
|
·
|
10,000
shares shall vest upon the date we make cash distributions to shareholders at a rate
of at least $0.20 per share annualized over any four consecutive quarters.
|
For vesting conditions
relating to equity raises, any equity capital acquired by us from, or by way of introductions made by, our Director and controlling
beneficial owner, Xiaofan Bai, or his affiliates shall not be counted towards the dollar thresholds. In the event of a change
in control of our company, all unvested shares shall immediately vest as of the date of the change in control.
In February 2016,
we granted to Mr. Meyer 8,696 shares of our common stock pursuant to a restricted stock agreement as part of his 2015 compensation.
The shares are subject to vesting and risk of forfeiture based on Mr. Meyer’s continued service to our company on each of
the vesting dates. The shares vest in equal one-third annual installments commencing January 31, 2017.
In January 2018, we
granted to Mr. Meyer 10,800 shares of our common stock as part of his 2017 compensation.
Outstanding Equity Awards at December 31, 2017
|
|
|
Stock
awards
|
|
|
Name
|
|
Number
of shares or units of stock that have not vested (#)
|
|
|
Market
value of shares of units of stock that have not vested ($)
|
|
|
Equity
incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)
|
|
|
Equity
incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)
|
|
|
Chad M. Carpenter, CEO
|
|
|
—
|
|
|
|
—
|
|
|
|
213,206
|
(1)
|
|
$
|
987,144
|
(2)
|
|
Thad L. Meyer, CFO
|
|
|
—
|
|
|
|
—
|
|
|
|
80,797
|
(1)
|
|
$
|
374,090
|
(2)
|
|
|
(1)
|
Represents (i) 206,250
and 75,000 shares granted to Mr. Carpenter and Mr. Meyer, respectively, in October 2014
and (i) 6,956 and 5,797 shares granted to Mr. Carpenter and Mr. Meyer, respectively,
in February 2016. All of the shares were subject to vesting and risk of forfeiture as
of December 31, 2017. As of the date of this proxy statement, 3,478 of Mr. Carpenter’s
shares and 2,899 of Mr. Meyer’s shares have vested. Please see the narrative discussion
of the officer’s compensation arrangements located above for the terms of the share
grant and vesting conditions.
|
|
|
(2)
|
Market value is based on
the last sale price of our common shares on December 29, 2017 in the amount of $4.63
per share.
|
Compensation of Non-Employee Directors
During the year ended
December 31, 2017, we issued an aggregate of 8,505 shares of restricted stock awards pursuant to our Amended and Restated 2012
Incentive Compensation Plan (the “2012 Plan”) to certain non-employee members of our Board of Directors for their
services through December 31, 2017. Additionally, the non-employee members of our Board of Directors received for their services
total annual fees of $315,625 for the year ended December 31, 2017 in addition to reimbursement for our independent directors
for reasonable out-of-pocket expenses incurred in connection with the performance of their duties as directors, including, without
limitation, travel expenses in connection with their attendance in person at meetings of our Board of Directors and its committees.
In reviewing the table
below, please note that Siyu Lan and Christopher Gann resigned as members of our Board of Directors in October, 2017. Richard
P. Imperiale joined our Board of Directors in June 2017.
2017 Director Compensation Table
|
Name
|
|
Fees
Earned
|
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
|
Non-Equity
Incentive Plan Compensation
|
|
|
Deferred
Compensation Earnings
|
|
|
All
Other Compensation
|
|
|
Total
|
|
|
Jon Haahr
|
|
$
|
70,000
|
|
|
$
|
10,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
80,000
|
|
|
Xiaofan Bai
|
|
$
|
87,500
|
|
|
$
|
12,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
100,000
|
|
|
Xiaohang Bai
|
|
$
|
35,000
|
|
|
$
|
5,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
40,000
|
|
|
Siyu Lan
|
|
$
|
11,250
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
11,250
|
|
|
Christopher Gann
|
|
$
|
37,500
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
37,500
|
|
|
Yifeng Huang
|
|
$
|
11,250
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
11,250
|
|
|
Xinghua Wang
|
|
$
|
35,000
|
|
|
$
|
5,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
40,000
|
|
|
Zhen Luo
|
|
$
|
13,125
|
|
|
$
|
1,875
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
15,000
|
|
|
Richard P. Imperiale
|
|
$
|
15,000
|
|
|
$
|
5,000
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
$
|
20,000
|
|
Summary of the Amended and Restated 2012 Incentive Compensation
Plan
In December 2013,
we adopted, and our stockholders approved, the 2012 Plan, pursuant to which 1,650,000 shares of our common stock are reserved
for issuance as grants of options or other awards to officers, directors, employees, consultants and other persons who provide
services to us or any related entity. The 2012 Plan provides for the grant of options to purchase shares of common stock, restricted
stock, stock appreciation rights and restricted stock units (rights to receive, in cash or stock, the market value of one share
of our common stock). Incentive stock options may be granted only to employees. Under the 2012 Plan, options may be granted
at an exercise price greater than or equal to the market value at the date of the grant, and for owners of 10% or more of the
voting shares, at an exercise price of not less than 110% of the market value. Awards are exercisable over a period of time as
determined by a committee designated by the Board of Directors, but in no event longer than ten years. We have granted 531,864
shares under the 2012 Plan as of March 31, 2018.