Item 5.02 Departure of Directors or Certain Officers; Election
of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
|
(e)
|
Entry into Material Contract with Named Executive
Officer and Compensatory Arrangements of Certain Officers.
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2018 Annual Equity Incentive Awards
On April 9, 2018, the Board of Directors
(the “
Board
”) of Global Medical REIT Inc. (the “
Company
”) approved the recommendations
of the Compensation Committee of the Board with respect to the 2018 Annual Performance-Based Long Term Incentive Plan (“
LTIP
”)
Awards (the “
Annual Awards
”) which may be granted to the executive officers of the Company and other employees
of the external manager of the Company (the “
Manager
”) who perform services for the Company. The Annual Awards
will be granted pursuant to the Company’s 2016 Equity Incentive Plan.
The Annual Awards that may be granted
to the named executive officers of the Company are described below.
Name
|
|
Title
|
|
2018 Annual Award Target
|
|
|
Number of Target Annual Award Units(1)
|
|
Jeffrey Busch
|
|
Chief Executive Officer, Chairman of the Board & President
|
|
$
|
180,000
|
|
|
|
25,715
|
|
Alfonzo Leon
|
|
Chief Investment Officer
|
|
$
|
125,000
|
|
|
|
17,858
|
|
Robert Kiernan
|
|
Chief Financial Officer and Treasurer
|
|
$
|
130,000
|
|
|
|
18,572
|
|
Jamie Barber
|
|
General Counsel and Secretary
|
|
$
|
110,000
|
|
|
|
15,715
|
|
Allen Webb
|
|
SVP, SEC Reporting and Technical Accounting
|
|
$
|
98,800
|
|
|
|
14,115
|
|
|
(1)
|
The number of target LTIP units comprising each Annual
Award is based on the closing price of the Company’s common stock reported on the New York Stock Exchange on the date of
approval (April 9, 2018), rounded to the next highest whole LTIP unit to eliminate fractional units.
|
Annual Awards
The Annual Awards will be subject to the
terms and conditions of LTIP Annual Award Agreements (“
LTIP Annual Award Agreements
”) between the Company and
each grantee in the form attached hereto as
Exhibit 99.1
, which is incorporated herein by reference. Terms not otherwise
defined herein have the meanings assigned to them in the LTIP Annual Award Agreements.
The Compensation Committee
established performance goals for calendar year 2018 (the “
Annual Performance Period
”) as set forth in Exhibit
A to the LTIP Annual Award Agreements (the “
Performance Goals
”) that will be used to determine the number of
LTIP Units earned by each grantee under each LTIP Annual Award Agreement. As soon as reasonably practicable following the last
day of the Annual Performance Period, the Compensation Committee will determine the extent to which the Company has achieved each
of the Performance Goals (expressed as a percentage) and, based on such determination, will calculate the number of Earned LTIP
Units that each grantee is entitled to receive based on the applicable Performance Percentages described in Exhibit A to the LTIP
Annual Award Agreement. Any Annual Award LTIP Units that are not earned will not be granted, and the grantee will have no right
in or to any such unearned LTIP Units after it is determined that they were not earned.
The number of Earned
LTIP Units issuable to each grantee under the LTIP Annual Award Agreement will be determined by dividing the total number of Annual
Award Target LTIP Units into five performance areas as shown in the table below (each a “
Component
”) and multiplying
the number of Target Annual Award LTIP Units allocated to each Component by the applicable Performance Percentage described underneath
the table below based on the extent to which the Performance Goal for each such Component is achieved.
Target No. of
LTIP Units
|
|
Component
|
|
Performance Goal
|
17.5% of total Target LTIP Units
|
|
Acquisitions including (i) closed acquisitions during 2018 and (ii) acquisitions placed under definitive purchase contract on or before December 31, 2018 and closed by February 28, 2019.
|
|
Threshold
: $100 million
Target
: $150 million
Maximum
: $200 million
|
|
|
|
|
|
17.5% of total Target LTIP Units
|
|
AFFO per share for the year ended December 31, 2018, as reported by the
Company in its year-end earnings announcement for the year ended December 31, 2018. AFFO per share for the year ended December 31, 2018
shall exclude the dilutive effect, if any, of any capital raising completed during the period beginning on January 1, 2018 and
ending on December 31, 2018.
|
|
Threshold
: $0.76 per share
Target
: $0.80 per share
Maximum
: $0.84 per share
|
|
|
|
|
|
17.5% of total Target LTIP Units
|
|
Net Asset Value (NAV) calculated as total assets minus total liabilities, in each case calculated under generally accepted accounting principles as reported using the Company’s audited balance sheet as of December 31, 2018.
|
|
Threshold
: $325 million
Target
: $450 million
Maximum
: $550 million
|
|
|
|
|
|
17.5% of total Target LTIP Units
|
|
Capital raising measured by gross proceeds actually raised through the issuance and sale of primary Company equity securities during the period from January 1, 2018 through December 31, 2018.
(1)
|
|
Threshold
: $100 million
Target
: $200 million
Maximum
: $300 million
|
|
|
|
|
|
30% of total Target LTIP Units
|
|
Discretionary Component
|
|
Entirely at the discretion of the Committee based on the Committee’s assessment of the grantee’s individual performance in areas the Committee deems in its discretion to be important based on the grantee’s job duties and position within the organization.
|
|
(1)
|
The Compensation Committee and the Board will, at the
end of the second quarter of 2018, reevaluate the feasibility of achieving the Performance Goals of this Component based on market
conditions. If the Compensation Committee and the Board determine that the Performance Goals of this Component are unachievable
due to market conditions, the Compensation Committee and the Board have the discretion to allocate the LTIP Units re-allocated to
this Component to the Discretionary Component.
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Performance Percentages
|
(i)
|
If the Company achieves less than the Threshold Goal
in a particular Component in the above table, all of the Annual Award LTIP Units for that Component will be forfeited.
|
|
(ii)
|
If the Company achieves the Threshold Goal in a particular
Component in the above table, the number of Earned LTIP Units in that Component will be equal to 50% of the number of Target Annual
Award LTIP Units for that Component.
|
|
(iii)
|
If the Company achieves the Target Goal in a particular
Component in the above table, the number of Earned LTIP Units in that Component will be equal to 100% of the number of Target
Annual Award LTIP Units for that Component.
|
|
(iv)
|
If the Company achieves or exceeds the Maximum Goal in
a particular Component in the above table, the number of Earned LTIP Units for that Component will be equal to 150% of the number
of Target Annual Award LTIP Units for that Component.
|
For achievement of a Performance Goal at
an intermediate point between the Threshold Goal and the Target Goal or between the Target Goal and the Maximum Goal for any Component,
the number of Earned LTIP Units for that Component will be interpolated on a straight-line basis between 50% and 100% or between
100% and 150%, respectively, of the target number of Annual Award LTIP Units allocated to that Component. Fractional LTIP Units
will be rounded to the next highest whole LTIP Unit.
LTIP units that have
been earned based on performance as described above are subject to forfeiture restrictions that will lapse (“
vesting
”)
in the following amounts and on the following vesting dates subject to the continuous service of the grantee through and on the
applicable vesting date:
(i)
50% of the Earned LTIP Units will become vested, and cease to be subject
to forfeiture, as of the earlier of (a) the date in 2019 on which the Board approves the number of Earned LTIP Units to be
awarded pursuant to the Components listed above, or (b) the date upon which a Change of Control occurs (the “
Annual
Award Valuation Date
”); and
(ii) 50%
of the Earned LTIP Units become vested, and cease to be subject to forfeiture, on the first anniversary of the Annual Award Valuation
Date.
Vesting will accelerate in the event of
a termination of the executive’s position without Cause or for Good Reason, as a result of death or Disability, or as a result
of the grantee’s Retirement. Unvested LTIP Awards will be forfeited in the event of any other termination event.
Distributions
Pursuant to the LTIP Annual Award Agreements,
distributions equal to the dividends declared and paid by the Company will accrue during the applicable period on the maximum number
of LTIP Units that the grantee could earn (if applicable) and are paid with respect to all of the Earned LTIP Units at the conclusion
of the applicable period, in cash or by the issuance of additional LTIP Units at the discretion of the Compensation Committee.
The foregoing summary of the LTIP Annual
Award Agreement is qualified in its entirety by reference to the form of agreement filed herewith as
Exhibit 99.1
.