Medalist Diversified REIT Inc
For the period ended Dec 31, 2023. Filed Mar 6, 2024.
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FY2023 · Filed Mar 6, 2024
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ITEM 11. EXECUTIVE AND DIRECTOR COMPENSATION
Summary Compensation Table
We did not provide Mr. Kavanaugh with any compensation during the year ended December 31, 2023. Pursuant to the Staffing Agreement, we pay the Consultant cash compensation for services provided by Mr. Winn and our senior accountant. We do not provide any named executive officer with pension benefits or nonqualified deferred compensation plans.
The table below summarizes the total compensation paid or awarded to each of our named executive officers for the fiscal years ended December 31, 2023 and 2022.
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| Name and Principal Position · · Year · · Salary ($) · · Bonus ($) · · Stock Awards ($) (1) · · All Other Compensation ($) · · Total | ||||||||||||||||||
| Francis P. Kavanaugh, CEO and President (2) | | | 2023 | | $— | | $— | | $— | | $— | | $— | |||||
| C. Brent Winn, Jr., Chief Financial Officer | | | 2023 | | $250,000 | | $— | | $— | | $— | | $250,000 | |||||
| | | | 2022 | | | 250,000 | | | 50,000 | | | 126,600 | | | — | | | 426,600 |
| (1) | The amounts in the Stock Awards column represent the aggregate grant date fair values, computed in accordance with FASB ASC Topic 718, of stock awards during the applicable fiscal year under the Company’s equity incentive plan. |
| (2) | Mr. Kavanaugh was appointed CEO and President on July 18, 2023 and did not accept any compensation during the year ended December 31, 2023. |
Potential Payments Upon Termination or Change in Control
2018 Equity Incentive Plan
If we experience a change in control, outstanding options, stock appreciation rights, stock awards, performance units, incentive awards or other equity-based awards (including LTIP units) under the 2018 Equity Incentive Plan, or the Equity Incentive Plan, will automatically become vested. Thus, outstanding options and stock appreciation rights will be fully exercisable on the change in control, restrictions and conditions on outstanding stock awards and other equity-based awards will lapse upon the change in control and performance units, incentive awards and other equity-based awards (including LTIP units) will become earned and nonforfeitable in their entirety on the change in control. The administrator may provide that outstanding awards (all of which will then be vested) will be assumed by the surviving entity or will be replaced by a comparable substitute award of substantially equal value granted by the surviving entity. The administrator may also provide that participants must surrender their outstanding options and stock appreciation rights, stock awards, performance units, incentive awards and other equity based awards (including LTIP units) (all of which will then be vested) in exchange for a payment, in cash or shares of our common stock or other securities or consideration received by stockholders in the change in control transaction, equal to the value received by stockholders in the change in control transaction (or, in the case of options and stock appreciation rights, the amount by which that transaction value exceeds the exercise price) after acceleration of vesting for the change in control.
In summary, a change in control under the Equity Incentive Plan occurs if:
| · | a person, entity or affiliated group (with certain exceptions) acquires, in a transaction or series of transactions, more than 50% of the total combined voting power of our outstanding securities; | |
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| | · | there occurs a merger, consolidation, reorganization, or business combination, unless the holders of our voting securities immediately prior to such transaction have more than 50% of the combined voting power of the securities in the successor entity or its parent; |
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| | · | we (i) sell or dispose of all or substantially all of our assets or (ii) acquire assets or stock of another entity, unless the holders of our voting securities immediately prior to such transaction have more than 50% of the combined voting power of the securities in the successor entity or its parent; or |
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| | · | during any period of two consecutive years, individuals who, at the beginning of such period, constitute our Board together with any new directors (other than individuals who become directors in connection with certain transactions or election contests) cease for any reason to constitute a majority of our Board. |
The Code has special rules that apply to “parachute payments,” i.e., compensation or benefits the payment of which is contingent upon a change in control. If certain individuals receive parachute payments in excess of a safe harbor amount prescribed by the Code, the payor is denied a federal income tax deduction for a portion of the payments and the recipient must pay a 20% excise tax, in addition to income tax, on a portion of the payments.
If we experience a change in control, benefits provided under the Equity Incentive Plan could be treated as parachute payments. In that event, the Equity Incentive Plan provides that the benefits under the Equity Incentive Plan, and all other parachute payments provided under other plans and agreements, will be reduced to the safe harbor amount, i.e., the maximum amount that may be paid without excise tax liability or loss of deduction, if the reduction allows the participant to receive greater after-tax benefits. The benefits under the Equity Incentive Plan and other plans and agreements will not be reduced, however, if the participant will receive greater after-tax benefits (taking into account the 20% excise tax payable by the participant) by receiving the total benefits. The Equity Incentive Plan also provides that these provisions do not apply to a participant who has an agreement with us providing that the individual is entitled to indemnification or other payment from us for the 20% excise tax or if the participant has an agreement with us providing that the participant cannot receive payments in excess of the safe harbor amount.
Director Compensation
The following table sets forth information regarding the compensation paid or accrued by our company during 2023 to each of our directors:
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| · · Fees Earned · · · · · · | |||||||||
| · · or Paid in · · Stock Awards · · · | |||||||||
| Name | | Cash ($) | | ($) (1) | | | Total ($) | ||
| Francis P. Kavanaugh | | $— | | $— | | $— | |||
| Timothy O’Brien | | | — | | | — | | | — |
| Neil P. Farmer | | | — | | | — | | | — |
| David Lunin | | | — | | | — | | | — |
| Emanuel D. Neuman | | | — | | | — | | | — |
| Charles S. Pearson, Jr. | | | — | | | — | | | — |
| | | $— | | $— | | $— | |||
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