ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
Payment of Annual Incentive Bonus Awards for Fiscal Year 2021
The information set forth under Item 5.02 of this Current Report on Form 8-K is incorporated herein by reference.
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
(f) Determination and Payment of Annual Incentive Bonus Awards for Fiscal Year 2021
As described in the Annual Report on Form 10-K filed with theSecurities and Exchange Commission (the "SEC") onMarch 11, 2022 (the "Form 10-K") byBluerock Residential Growth REIT, Inc. (the "Company," "we," "us," or "our"), pursuant to the respective employment or services agreement of each of the Company's executive officers (collectively, the "Executive Agreements"), each such executive officer is entitled to payment of an annual incentive bonus for the fiscal year endedDecember 31, 2021 (each, a "2021 Annual Bonus," and collectively, the "2021 Annual Bonuses"). As further described in the Form 10-K, the Compensation Committee uses the following criteria in determining the amount of the 2021 Annual Bonus for which each executive officer is eligible: (a) 75% is based upon the Company's achievement, during the fiscal year endedDecember 31, 2021 , of certain objective Company performance criteria and targets; and (b) the remaining 25% is based upon the Compensation Committee's subjective evaluation of the performance of each such executive officer during such time period. As also described in the Form 10-K, inDecember 2020 , each of the Company's executive officers, other thanChristopher J. Vohs ("Mr. Vohs") andMichael DiFranco ("Mr. DiFranco"), executed a Side Letter to their Executive Agreement to reflect their prospective election to receive any 2021 Annual Bonus in the form of long-term incentive plan units ("LTIP Units") of the Company's operating partnership,Bluerock Residential Holdings, L.P. (the "Operating Partnership"), rather than in cash. (See "Compensation Discussion and Analysis-2021 Compensation Decisions-2021 Annual Cash Bonuses" on page 123
of the Form 10-K). Based on the Compensation Committee's evaluation of the previously-established objective criteria and targets along with its subjective evaluations, the Compensation Committee approved payment of 2021 Annual Bonuses, on or beforeApril 15, 2021 , to each of the Company's executive officers in amounts equal to 135.6% of the annual incentive bonus target amount as previously established by the Compensation Committee for each of the following executive officers of the Company: (i)R. Ramin Kamfar ("Mr. Kamfar"), (ii)James G. Babb , III ("Mr. Babb"), (iii)Jordan B. Ruddy ("Mr. Ruddy"), (iv)Ryan S. MacDonald ("Mr. MacDonald"), (v)Michael L. Konig ("Mr. Konig"), through his wholly-owned law firm,Konig & Associates, LLC , aNew Jersey limited liability company ("K&A"), (vi)Mr. Vohs , and (iv)Mr. DiFranco . All references toMr. Konig herein refer toMr. Konig acting through K&A. OnApril 12, 2022 (the "2021 Annual Bonus LTIP Date of Grant"), the Company granted 2021 Annual Bonuses, in each case, as a grant of equity incentive compensation (i) to each of Messrs. Kamfar, Babb, Ruddy and MacDonald under the Fourth Amended and Restated 2014 Equity Incentive Plan for Individuals (the "Individuals Plan"), and (ii) toMr. Konig under the Company's Fourth Amended and Restated 2014 Equity Incentive Plan for Entities (the "Entities Plan," and together with the Individuals Plan, the "Plans"), in the form of LTIP Units, rather than in cash, in the following amounts: 30,624 LTIP Units toMr. Kamfar ; 16,588 LTIP Units toMr. Babb ; 17,864 LTIP Units toMr. Ruddy ; 22,968 LTIP Units toMr. MacDonald ; and 16,588 LTIP Units toMr. Konig . The 30,624 LTIP Units issued in payment of the 2021 Annual Bonus toMr. Kamfar will vest and become nonforfeitable on the first anniversary of the 2021 Annual Bonus LTIP Date of Grant. The following number of LTIP Units issued to each of Messrs. Babb, Ruddy, MacDonald and Konig were fully-vested and nonforfeitable on the 2021 Annual Bonus LTIP Date of Grant, in each case subject to certain clawback and termination provisions: 9,276 LTIP Units toMr. Babb ; 9,990 LTIP Units toMr. Ruddy ; 12,844 LTIP Units toMr. MacDonald ; and 9,276 LTIP Units toMr. Konig . The following number of LTIP Units issued in payment of the 2021 Annual Bonus to each of Messrs. Babb, Ruddy, MacDonald and Konig will vest and become nonforfeitable on the first anniversary of the 2021 Annual Bonus LTIP Date of Grant: 7,312 LTIP Units toMr. Babb ; 7,874 LTIP Units toMr. Ruddy ; 10,124 LTIP Units toMr. MacDonald ; and 7,312 LTIP Units toMr. Konig . Such grants are evidenced by LTIP Unit Vesting Agreements and LTIP Unit Award Agreements (as applicable). By mutual agreement of the Company and each of Messrs. Vohs and DiFranco, the 2021 Annual Bonuses payable to each of Messrs. Vohs and DiFranco will be paid on or beforeApril 15, 2021 , in each case in cash.
The LTIP Units granted as 2021 Annual Bonuses to each of Messrs. Kamfar, Babb, Ruddy, MacDonald and Konig were issued in reliance upon exemptions from registration provided by Section 4(a)(2) of the Securities Act of 1933 and Regulation D thereunder for transactions not involving any public offering. No general solicitation or advertising occurred in connection with the issuance and sale of such securities. Such LTIP Units may convert to units of limited partnership interest in theOperating Partnership ("OP Units") upon reaching capital account equivalency with the OP Units held by the Company, and may then be redeemed for cash or, at the option of the Company and after a one year holding period (including any period during which the LTIP Units were held), settled in shares of our Class A Common Stock on a one-for-one basis. From the date of grant, holders of such LTIP Units will be entitled to receive "distribution equivalents" at the time distributions are paid to the holders of the Company's Class A Common Stock. All other compensation paid or earned by each of the Company's named executive officers for the fiscal year endedDecember 31, 2021 was previously reported by the Company in the Summary Compensation Table beginning on page 130 of the Form 10-K. As of the filing of the Form 10-K, the 2021 Annual Bonuses had not been determined, and thus were not included in the Summary Compensation Table. In accordance with Item 5.02(f) of Form 8-K, the Company is providing a revised Summary Compensation Table, which includes the 2021 Annual Bonuses paid to each of our named executive officers and revised total compensation figures for
2021: Summary Compensation Table
The table below summarizes the total compensation paid or earned by our named executive officers in 2021, 2020 and 2019.
Non-Equity Stock Incentive Plan All Other Name and Principal Salary Bonus Awards Compensation Compensation Total
Position Year ($) ($)(1 ) ($)(2 ) ($)(3 ) ($) ($) R. Ramin Kamfar 2021 600,000(4) 813,375 2,733,864(6) - - 4,147,239 Chairman and CEO 2020 400,000(5) 549,750(2) 2,410,455(7) - - 3,360,205 2019 400,000 500,400(2) 1,375,592(8) - - 2,275,992 Jordan B. Ruddy 2021 350,000(4) 474,469 829,927(6) - - 1,654,396 President and COO 2020 300,000(5) 412,313(2) 723,135(7) - - 1,435,448 2019 300,000 375,300(2) 502,805(8) - - 1,178,105 James G. Babb, III 2021 325,000 440,578 517,479(6) - - 1,283,057 Chief Strategy 2020 325,000 385,735(2) 511,018(7) - - 1,221,753 Officer 2019 325,000 406,575(2) 502,805(8) - - 1,234,380 Ryan S. MacDonald 2021 450,000 610,031 976,377(6) - - 2,036,408 Chief Investment 2020 325,000 446,672(2) 964,178(7) - - 1,735,850 Officer 2019 300,000 375,300(2) 502,805(8) - - 1,178,105 Christopher J. Vohs 2021 280,000 189,788 195,272(6) - - 665,060 Chief Financial 2020 262,500 163,980 160,051(7) - - 586,531 Officer & Treasurer 2019 250,000 156,375 149,422(8) - - 555,797 Michael L. Konig* 2021 325,000 440,578 732,288(6) - - 1,497,866 Chief Legal Officer 2020 300,000 374,813(2) 723,135(7) - - 1,397,948 & Secretary 2019 300,000 375,300(2) 502,805(8) - - 1,178,105
* Pursuant to a Services Agreement with his wholly-owned law firm, K&A.
(1) Amounts shown for 2019, 2020 and 2021 for each of Messrs. Kamfar, Babb,
Ruddy, MacDonald and Konig reflect payment of the 2019 Annual Bonuses, the
2020 Annual Bonuses and the 2021 Annual Bonuses in LTIP Units, rather than in
cash, by mutual agreement of each such executive officer and the Company.
Amounts shown for 2019, 2020 and 2021 for
2019 Annual Bonuses, the 2020 Annual Bonuses and the 2021 Annual Bonuses in
cash.
(2) Amounts shown do not reflect compensation actually received by the named
executive officer. Instead, the amounts shown are the full grant date fair
value of LTIP Unit awards issued to the executives in each applicable year.
In accordance with
year include the full grant date fair value of awards issued under the
Incentive Plans. The grant date fair value is computed in accordance with
FASB ASC 718, "Compensation-Stock Compensation," or "ASC 718." The actual value of awards with respect to these awards are contingent on
continued employment and assumes achievement of target performance under any
long term performance awards. The amounts for 2019 were previously reported
assuming maximum performance and have been restated to reflect target
performance.
(3) The executive officers did not receive any non-equity incentive plan
compensation in 2019, 2020 or 2021.
(4) On
Kamfar and
agreed to pay, (a) 98.0% of the base salary of
ending
such fiscal year, in Company equity rather than in cash. The number of LTIP
Units granted to each of
determined by dividing the dollar value of each such grant by the volume
weighted average closing price of a share of our Class A Common Stock as
reported on the NYSE American for the twenty (20) trading days immediately
preceding the grant dates.
(5) On
Kamfar and
agreed to pay, (a) 97.0% of the base salary of
ending
for the first quarter of such fiscal year and (ii) 87.3% of the base salary
of
in Company equity rather than in cash, as more specifically set forth
therein. The number of shares of our Class A Common Stock or LTIP Units
granted to each of
determined by dividing the dollar value of each such grant by the volume
weighted average closing price of a share of our Class A Common Stock as
reported on the NYSE American for the twenty (20) trading days immediately
preceding the grant dates.
(6) Reflects the issuance, on
Common Stock as reported on the NYSE American for the trading day immediately
preceding the date of grant.
(7) Reflects the issuance, on
Common Stock as reported on the NYSE American for the trading day immediately
preceding the date of grant.
(8) Reflects the issuance, on
Common Stock as reported on the NYSE American for the trading day immediately
preceding the date of grant. CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr.Ramin Kamfar , Chief Executive Officer (the "CEO"): The amount earned in 2021 by Mr.Ramin Kamfar , our Chief Executive Officer (the "CEO") with respect to the 2021 Annual Bonus granted to him for the 2021 performance period was not calculable as of the date of the Company's Annual Report on Form 10-K for the fiscal year endedDecember 31, 2021 (the "Form 10-K") because the final performance data for the 2021 performance period that determines the amount of the 2021 Annual Bonus earned was not available at that time. As permitted by Instruction 6 to Item 402(u) of Regulation S-K, we thus omitted the CEO pay ratio disclosure required by Item 402(u) of Regulation S-K from the Form 10-K, and have included the required CEO pay ratio disclosure in this Current Report on Form 8-K.
For 2021, our last completed fiscal year:
• the annual total compensation of the employee identified at median of our
Company (other than our CEO) was$166,500 ; and
• the annual total compensation of the CEO for purposes of determining the
CEO pay ratio was$4,147,239 .
The annual total compensation is based on compensation earned from
Based on this information, for 2021, the ratio of the annual total compensation ofMr. Kamfar , our Chief Executive Officer, to the median of the annual total compensation of all employees was estimated to be 24.91 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent withSEC rules based on our payroll and employment records and the methodology described below. TheSEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee's annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the "median employee," the methodology and the material assumptions, adjustments, and estimates that we used were as follows: (a) we determined that, as ofDecember 31, 2021 , our employee population consisted of approximately 55 individuals, and (b) to identify the "median employee" from our employee population, we collected actual base salary and bonus earned (including, when applicable, any such amounts paid in Company equity), as well as any overtime paid during the period fromJanuary 1, 2021 throughDecember 31, 2021 .
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