SEC Form 4 · accession 0001144204-18-047914
American Finance Trust, Inc · AFIN
Statement of changes in beneficial ownership, as filed. Original on EDGAR ↗
Reporting owner
Edward M Weil Jr.
Officer — CEO and President · Director
Period of report
Aug 30, 2018
Accepted (ET)
Sep 4, 2018 · 9:00 pm EDT
Rule 10b5-1 plan
unknown — predates the checkbox
Issuer CIK
0001568162
Table I — non-derivative securities
No Table I lines on this filing.
Table II — derivative securities
| Security | Conv. / exercise price | Date | Code | Shares | A/D | Exercisable | Expires | Underlying | Underlying shares | Owned after | D/I |
|---|---|---|---|---|---|---|---|---|---|---|---|
| LTIP UnitsF1,F2,F3,F4 | $0.00 | Aug 30, 2018 | A | 4,496,796 | A | — | — | Class A Common Stock | 4,496,796 | 4,496,796 | I |
Explanation of responses
- F1On July 19, 2018, American Finance Operating Partnership, L.P. (the "OP"), the operating partnership of American Finance Trust, Inc. (the "Registrant"), issued American Finance Advisors, LLC (the "Advisor") one unit of limited partnership of the OP designated as the "Master LTIP Unit" (the "Master LTIP Unit") pursuant to the 2018 Advisor Multi-Year Outperformance Agreement, dated as of July 19, 2018, among the Registrant, the OP and the Advisor (the "OPP") and the 2018 Advisor Omnibus Incentive Compensation Plan of the Registrant. On August 30, 2018, in accordance with the terms of the agreement of limited partnership of the OP (the "Partnership Agreement"), the Master LTIP Unit automatically converted into 4,496,796 units of limited partnership of the OP designated as "LTIP Units" ("LTIP Units"), representing the quotient, rounded down to the nearest whole number, of (a) 72,000,000, divided by (b) the Initial Share Price (as defined in the OPP).
- F2The Initial Share Price is equal to $16.0114, representing the average of the Fair Market Value (as defined in the OPP) of one share of Class A common stock over the ten consecutive trading days immediately prior to August 30, 2018, and Fair Market Value as defined in the OPP for these purposes means the average closing price of Class A common stock for the ten consecutive trading days immediately preceding the date of the valuation. These LTIP Units may be earned by the Advisor based on the Registrant's achievement of threshold, target and maximum performance goals based on the Registrant's absolute and relative total stockholder return over a performance period commencing on July 19, 2018 and ending on the earliest of (i) July 19, 2021, (ii) the effective date of any Change of Control (as defined in the OPP) and (iii) the effective date of any termination of the Advisor's service as advisor of the Registrant.
- F3LTIP Units earned as of the last day of the performance period will also become vested as of that date. Effective as of that same date, any LTIP Units that are not earned and vested will automatically and without notice be forfeited without the payment of any consideration by the Registrant or the OP. Thereafter, subject to and in accordance with the terms of the Partnership Agreement, the Advisor, in its sole discretion, shall be entitled to convert any earned and vested LTIP Units into units of limited partnership of the OP designated as "Class A Units" ("Class A Units"). Pursuant to the redemption provisions contained in the Partnership Agreement, a holder of Class A Units that (subject to certain exceptions) have been outstanding for at least one year may redeem all or a portion of his, her or its Class A Units on a one-for-one basis for, at the Registrant's election, either shares of Class A common stock or the cash equivalent thereof.
- F4The reporting person is the chief executive officer, and also holds a non-controlling equity interest in, the entities that own and control the Advisor, which own the reported securities. The reporting person disclaims beneficial ownership of the securities reported on this Form 4 except to the extent of his pecuniary interest therein.