Diversified Healthcare Trust 8-K, filed May 20, 2020
Diversified Healthcare Trust (DHC)
About this 8-K
Diversified Healthcare Trust filed this 8-K on May 20, 2020, reporting on events of May 19, 2020.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 5.07: Shareholder vote results
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation)
| (Commission File Number) | (IRS Employer Identification No.) | |
|
|
||
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title Of Each Class | Trading Symbol(s) | Name
Of Each Exchange On Which Registered | ||
Interest |
||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
In this Current Report on Form 8-K, the terms “we,” “us,” “our” and “the Company” refer to Diversified Healthcare Trust.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Board and Committee Appointments
On May 19, 2020, our Board of Trustees (“Board”) adopted resolutions increasing the size of our Board to six Trustees. On the same date, pursuant to a recommendation of our Nominating and Governance Committee, our Board elected Daniel LePage as an Independent Trustee in Class III of our Board to fill the vacancy created by the increase in size of our Board to six Trustees. In addition, our Board appointed Mr. LePage to serve on our Audit Committee, Compensation Committee and Nominating and Governance Committee.
Mr. LePage is the founder and managing partner of DFL Capital LLC, a New York based real estate investment firm formed in April 2019. He was a managing director and head of the U.S. real estate corporate banking group at RBC Capital Markets from 2006 to 2019. Prior to his involvement with RBC Capital Markets and its affiliates, Mr. LePage held senior leadership positions in commercial real estate lending at Emigrant Savings Bank and Citigroup, Inc.
Our Board concluded that Mr. LePage is qualified to serve as an Independent Trustee in accordance with the requirements of The Nasdaq Stock Market LLC, the Securities and Exchange Commission and our governing documents. For his service as an Independent Trustee, Mr. LePage will be entitled to the compensation we generally provide to our Independent Trustees. There is no arrangement or understanding between Mr. LePage and any other person pursuant to which Mr. LePage was selected as a Trustee. There are no transactions, relationships or agreements between Mr. LePage and us that would require disclosure pursuant to Item 404(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934, as amended.
In connection with his election as an Independent Trustee, we entered into an indemnification agreement with Mr. LePage, which agreement is on substantially the same terms as the indemnification agreements we have entered with our other Trustees and executive officers. We have previously filed a form of indemnification agreement entered into by our Trustees with us as Exhibit 10.2 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, which form is incorporated herein by reference.
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
As discussed below in Item 5.07, at the Company’s annual meeting of shareholders held on May 19, 2020 (the “Annual Meeting”), the Company’s shareholders voted to approve an amendment to the Company’s Declaration of Trust to provide for the annual election of all Trustees beginning with the 2023 annual meeting of shareholders. Beginning with the 2021 annual meeting of shareholders, the Trustees whose terms expire at an annual meeting (or such Trustees’ successors) will stand for election at the meeting for one-year terms and all Trustees (or such Trustees’ successors) will stand for election at the 2023 annual meeting of shareholders, and thereafter, for one-year terms. In accordance with Maryland law, in order to give proper effect to this amendment, on May 19, 2020, the Company filed Articles Supplementary under Section 3-802 of the Maryland General Corporation Law (“MGCL”) to elect to no longer have Section 3-803 of the MGCL apply to the Company and filed Articles of Amendment with the State Department of Assessments and Taxation of Maryland. Upon the filing of both the Articles Supplementary and the Articles of Amendment, the amendment became effective. The foregoing description of the amendment is not complete and is subject to and qualified in its entirety by reference to the Articles Supplementary and the Articles of Amendment, copies of which are attached hereto as Exhibit 3.1 and Exhibit 3.2, respectively, and which are incorporated herein by reference.
Item 5.07. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting, the Company’s shareholders voted on the election of Jeffrey P. Somers as an Independent Trustee in Class III of the Board for a three year term of office continuing until the Company’s 2023 annual meeting of shareholders and until his successor is duly elected and qualifies. Mr. Somers received the following votes:
| For | Withhold | Broker Non-Votes | ||||||||
| 108,515,816 | 64,002,481 | 36,842,363 | ||||||||
2
The Company’s shareholders also voted on the approval of an amendment to the Company’s Declaration of Trust to provide for the annual election of all Trustees beginning with the Company’s 2023 annual meeting of shareholders. This proposal received the following votes:
| For | Against | Abstain | Broker Non-Votes | |||||||||||
| 171,067,773 | 1,016,089 | 434,435 | 36,842,363 | |||||||||||
The Company’s shareholders also voted on a non-binding advisory resolution on the compensation paid to the Company’s named executive officers as disclosed pursuant to Item 402 of Regulation S-K in the Company’s proxy statement relating to the Annual Meeting. This proposal received the following votes:
| For | Against | Abstain | Broker Non-Votes | |||||||||||
| 161,015,301 | 10,675,470 | 827,526 | 36,842,363 | |||||||||||
The Company’s shareholders also ratified the appointment of Ernst & Young LLP as the Company’s independent auditors to serve for the 2020 fiscal year. This proposal received the following votes:
| For | Against | Abstain | Broker Non-Votes | |||||||||||
| 202,121,272 | 6,446,741 | 792,647 | N/A | |||||||||||
The results reported above are final voting results.
Item 8.01. Other Events.
Trustee Compensation
Also on May 19, 2020, the Company updated its Trustee compensation arrangements. A summary of the Company’s currently effective Trustee compensation arrangements is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Consistent with the Company’s Trustee compensation arrangements, on May 19, 2020, the Company awarded each of the Company’s Trustees 10,000 of our common shares of beneficial interest, $0.01 par value (“Common Shares”), valued at $2.94 per share, the closing price of the Common Shares on The Nasdaq Stock Market LLC on that date.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| 3.1 | Articles Supplementary to the Declaration of Trust of Diversified Healthcare Trust, dated May 19, 2020 |
| 3.2 | Articles of Amendment to the Declaration of Trust of Diversified Healthcare Trust, dated May 19, 2020 |
| 10.1 | Summary of Trustee Compensation | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| DIVERSIFIED HEALTHCARE TRUST | ||
| By: | /s/ Richard W. Siedel, Jr. | |
| Name: | Richard W. Siedel, Jr. | |
| Title: | Chief Financial Officer and Treasurer | |
Date: May 20, 2020
Exhibit 3.1
DIVERSIFIED HEALTHCARE TRUST
ARTICLES SUPPLEMENTARY
Diversified Healthcare Trust, a Maryland real estate investment trust (the “Trust”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “SDAT”) that:
FIRST: Under the power contained in Title 3, Subtitle 8 of the Maryland General Corporation Law (the “MGCL”), by resolutions duly adopted by the Board of Trustees of the Trust (the “Board”) and notwithstanding any other provision in the Articles of Amendment and Restatement of the Trust (the “Charter”) or the Bylaws of the Trust to the contrary, the Trust elects not to be subject to Section 3-803 of the MGCL. Notwithstanding any other provision of the Charter, a Trustee may not be removed without cause.
SECOND: The Trust’s election not to be subject to Section 3-803 of the MGCL has been approved by the Board in the manner and by the vote required by law.
THIRD: The undersigned officer acknowledges these Articles Supplementary to be the official act of the Trust and, as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that, to the best of the officer’s knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties of perjury.
[Signature Page Follows]
IN WITNESS WHEREOF, the Trust has caused these Articles Supplementary to be executed in its name and on its behalf by its President, and attested to by its Secretary, on this 19th day of May, 2020.
| ATTEST | DIVERSIFIED HEALTHCARE TRUST | |||
| /s/ Jennifer B. Clark | By: | /s/ Jennifer F. Francis | (SEAL) | |
| Jennifer B. Clark | Jennifer F. Francis | |||
| Secretary | President and Chief Operating Officer | |||
Exhibit 3.2
DIVERSIFIED HEALTHCARE TRUST
ARTICLES OF AMENDMENT
Diversified Healthcare Trust, a Maryland real estate investment (the “Trust”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “SDAT”) that:
FIRST: The Articles of Amendment and Restatement of the Trust, as amended (the “Declaration of Trust”), is hereby amended by repealing Section 5.2.2 of Article V in its entirety and in lieu thereof replacing it with the following new Section 5.2.2:
The Trustees are and shall remain divided into three classes until the Trust’s annual meeting of shareholders of the Trust held in calendar year 2023 (the “2023 Annual Meeting”). The terms of the Trustees shall be determined as follows: (i) at the annual meeting of shareholders of the Trust that is held in calendar year 2020 (the “2020 Annual Meeting”), the Trustee whose term expires at the 2020 Annual Meeting (or such Trustee’s successor) shall be elected to hold office for a three-year term expiring at the 2023 Annual Meeting; (ii) at the annual meeting of shareholders of the Trust that is held in calendar year 2021 (the “2021 Annual Meeting”), the Trustees whose terms expire at the 2021 Annual Meeting (or such Trustees’ successors) shall be elected to hold office for one-year terms expiring at the annual meeting of shareholders of the Trust that is held in calendar year 2022 (the “2022 Annual Meeting”); (iii) at the 2022 Annual Meeting, the Trustees whose terms expire at the 2022 Annual Meeting (or such Trustees’ successors) shall be elected to hold office for one-year terms expiring at the 2023 Annual Meeting; and (iv) at the 2023 Annual Meeting, and at each annual meeting of shareholders of the Trust thereafter, all Trustees shall be elected to hold office for one-year terms expiring at the next annual meeting of shareholders following his or her election. For the avoidance of doubt, each Trustee elected or appointed to the Board of Trustees to serve a term that commenced before the 2021 Annual Meeting (an “Existing Trustee”), and each Trustee elected or appointed to the Board of Trustees to fill a vacancy resulting from the death, resignation or removal of an Existing Trustee, shall serve for the full term to which the Existing Trustee was elected or appointed.
SECOND: The foregoing amendment to the Declaration of Trust was advised by the Board of Trustees of the Trust and approved by the shareholders of the Trust as required by law.
THIRD: The undersigned officer acknowledges these Articles of Amendment to be the official act of the Trust and, as to all matters or facts required to be verified under oath, the undersigned officer acknowledges that, to the best of the officer’s knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties of perjury.
[Signature Page Follows]
IN WITNESS WHEREOF, the Trust has caused these Articles of Amendment to be executed in its name and on its behalf by its President, and attested to by its Secretary, on this 19th day of May, 2020.
| ATTEST | DIVERSIFIED HEALTHCARE TRUST | |||
| /s/ Jennifer B. Clark | By: | /s/ Jennifer F. Francis | (SEAL) | |
| Jennifer B. Clark | Jennifer F. Francis | |||
| Secretary | President and Chief Operating Officer | |||
Exhibit 10.1
DIVERSIFIED HEALTHCARE TRUST
Summary of Trustee Compensation
The following is a summary of the currently effective compensation of the Trustees of Diversified Healthcare Trust (the “Company”) for services as Trustees, which is subject to modification at any time by the Board of Trustees (the “Board”) or the Compensation Committee of the Board, as applicable:
· Each Independent Trustee receives an annual fee of $75,000 for services as a Trustee. The annual fee for any new Independent Trustee is prorated for the initial year.
· Each Independent Trustee who serves as a committee chair of the Board’s Audit Committee, Compensation Committee or Nominating and Governance Committee receives an additional annual fee of $17,500, $12,500 and $12,500, respectively. The committee chair fee for any new committee chair is prorated for the initial year.
· The Lead Independent Trustee receives an additional annual cash retainer fee of $15,000 for serving in this role.
· Each Trustee receives a grant of 10,000 of the Company’s common shares of beneficial interest on the date of the first Board meeting following each annual meeting of shareholders (or, for Trustees who are first elected or appointed at other times, on the day of the first Board meeting attended).
· The Company generally reimburses all Trustees for travel expenses incurred in connection with their duties as Trustees and for out of pocket costs incurred in connection with their attending certain continuing education programs.