Broadmark Realty Capital Inc. (Form: 8-K, Received: 02/07/2020 17:07:25)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 3, 2020

BROADMARK REALTY CAPITAL INC.

(Exact name of registrant as specified in its charter)


Maryland	001-39134	84-2620891
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1420 Fifth Avenue, Suite 2000

Seattle, WA 98101

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (206) 971-0800

Not Applicable

(Former name or former address, if changed since last report.)

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 Securities Act of 1933, as amended:

Title of each class	Trading Symbols	Name of each exchange on which registered

Common stock, par value $0.001 per share	BRMK	New York Stock Exchange

Warrants, each exercisable for one fourth (1/4^th) share of Common Stock at an exercise price of $2.875 per one fourth (1/4^th) share	BRMK WS	NYSE American LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933, as amended, or Rule 12b-2 of the Securities Exchange Act of 1934, as amended.

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 of 1934, as amended. ☐

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Equity Awards

On February 3, 2020, Broadmark Realty Capital Inc. (the “Company”) granted restricted stock unit awards (“RSUs”) to Jeffrey B. Pyatt, the Company’s President and Chief Executive Officer, and David Schneider, the Company’s Chief Financial Officer, in the following amounts:

Executive Officer	Number of Shares Subject to RSU Award

Jeffrey B. Pyatt	95,694

David Schneider	48,000

The number of shares subject to Mr. Pyatt’s award was determined by dividing $1,000,000 by $10.45, which was the reference price (the “Reference Price”) utilized in the business combination of the legacy Broadmark commercial real estate finance entities and Trinity Merger Corp. to determine the number of shares that holders of the legacy Broadmark funds would receive at closing of the business combination (the “Business Combination”). Pursuant to the terms of Mr. Schneider’s employment agreement, the number of shares subject to Mr. Schneider’s RSU award was determined by dividing $600,000, which was the value of RSUs agreed to be awarded to Mr. Schneider pursuant to his employment agreement, by $12.50, the closing price of shares of the Company’s common stock on February 3, 2020, the grant date.

One-third of Mr. Pyatt’s RSUs will vest on November 14, 2020 (the first anniversary of the date of completion of the Business Combination) and the remaining two-thirds will vest in equal monthly installments over the 24-month period ending on November 14, 2022 based on Mr. Pyatt’s continued employment through each vesting date, such that the RSUs are fully vested on November 14, 2022. Mr. Schneider’s RSUs will vest in one-third increments on each of the first three anniversaries of December 9, 2019 (the date that Mr. Schneider commenced his employment with the Company) based on Mr. Schneider’s continued employment through each vesting date, such that the RSUs are fully vested on December 9, 2022.

Also on February 3, 2020, the Company granted Joseph L. Schocken, non-executive Chairman of the Company’s Board of Directors, RSUs for 95,694 shares of Company common stock, which award was contemplated by his Consulting Agreement. The 95,694 shares subject to the RSUs vested in full on February 3, 2020.

Additionally, on February 3, 2020, the Company granted RSUs for 8,613 shares of the Company’s common stock to each director other than Mr. Pyatt and Mr. Schocken. These awards to the independent directors were determined by dividing $90,000 by the Reference Price, and will fully vest based on the independent director’s continued service through November 14, 2020.

The form of RSU award agreement utilized for awards to each of the aforementioned parties is attached hereto as Exhibit 10.1 and incorporated by reference.

The RSUs described above were awarded under the Broadmark Realty Capital Inc. 2019 Stock Incentive Plan (the “Plan”). All RSUs awarded will be settled upon vesting in shares of Company common stock. If (i) the recipient becomes disabled and the recipient’s employment or service is terminated as a result, (ii) the recipient dies during the vesting period, or (iii) solely with respect to Mr. Pyatt and Mr. Schneider, the recipient’s employment is terminated without Cause (as defined in the Plan) in connection with or within 24 months following a Change in Control (as defined in the Plan), then the vesting of the RSUs will fully accelerate as of the date of termination of employment.

Dividend equivalents will not be paid on RSUs granted to executive officers and directors until settlement of those RSUs in shares of Company common stock. The RSUs described herein were approved by the Compensation Committee of the Board of Directors of the Company and were awarded under the Broadmark Realty Capital Inc. 2019 Stock Incentive Plan.

In addition, the Company also granted RSUs for an aggregate of 502,394 shares of Company common stock to non-executive officer employees of the Company.

Amendment to Joanne Van Sickle’s Employment Agreement

As previously disclosed on a Current Report on Form 8-K filed on January 10, 2020, Joanne Van Sickle, the Company’s Controller, advised the Company that she intended to retire on or about January 31, 2020. In lieu of retiring at such time, Ms. Van Sickle agreed to continue as a part time employee, and she is expected to enter into a first amendment to her employment agreement (the “First Amendment”) providing for such part time employment. The First Amendment is expected to modify her employment agreement to, among other things, provide for the following:

•

for Ms. Van Sickle to serve as an hourly accounting employee on a part-time basis effective February 1, 2020, devoting no more than ten hours per week to the business and affairs of the Company;

•

pay her an hourly rate of $90 per hour in regular installments in accordance with the Company’s general payroll practices;

•

an April 30, 2020 termination date of her employment; and

•

eliminating her rights to receive bonuses, vacation, termination benefits under certain circumstances and welfare benefits; provided that she may continue existing health care coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 at her own cost.

Item 9.01

Financial Statements and Exhibits.

(d)

Exhibits

Exhibit Number	Description
10.1	Form of Restricted Stock Unit Award Agreement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BROADMARK REALTY CAPITAL INC.

	By:	/s/ David Schneider
		Name: David Schneider
		Title: Chief Financial Officer

Date: February 7, 2020

Exhibit 10.1

Form of Grant

BROADMARK REALTY CAPITAL INC.

GRANT NOTICE FOR 2019 STOCK INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD

FOR GOOD AND VALUABLE CONSIDERATION, Broadmark Realty Capital Inc. (the “Company”), hereby grants to the Participant named below the number of Restricted Stock Units specified below (the “RSUs” or the “Award”). Each Restricted Stock Unit represents the right to receive one share of the Company’s common stock, par value $0.001 (the “Common Stock”), upon the terms and subject to the conditions set forth in this Grant Notice, the Broadmark Realty Capital Inc. 2019 Stock Incentive Plan (the “Plan”) and the Standard Terms and Conditions (the “Standard Terms and Conditions”) promulgated under such Plan, each as amended from time to time. This Award is granted pursuant to the Plan and is subject to and qualified in its entirety by the Standard Terms and Conditions.

Name of Participant:
Grant Date:
Number of Restricted Stock Units:
Vesting Schedule:	[VESTING SCHEDULE]

By accepting this Grant Notice, Participant acknowledges that he or she has received and read, and agrees that this Award shall be subject to, the terms of this Grant Notice, the Plan and the Standard Terms and Conditions.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have caused to be executed or executed this agreement as of the date first written above.

BROADMARK REALTY CAPITAL INC.:

By:

Name: Jeffrey B. Pyatt

Title: Chief Executive Officer

[Signature Page to RSU Agreement]

PARTICIPANT:



Name:

[Signature Page to RSU Agreement]

BROADMARK REALTY CAPITAL INC.

STANDARD TERMS AND CONDITIONS FOR

RESTRICTED STOCK UNITS

These Standard Terms and Conditions apply to the Award of Restricted Stock Units granted pursuant to the Broadmark Realty Capital Inc. 2019 Stock Incentive Plan (the “Plan”), which are evidenced by a Grant Notice or an action of the Committee that specifically refers to these Standard Terms and Conditions. In addition to these Terms and Conditions, the Restricted Stock Units shall be subject to the terms of the Plan, which are incorporated into these Standard Terms and Conditions by this reference. Capitalized terms not otherwise defined herein shall have the meaning set forth in the Plan.

1. TERMS OF RESTRICTED STOCK UNITS

Broadmark Realty Capital Inc. (the “Company”), has granted to the Participant named in the Grant Notice provided to said Participant herewith (the “Grant Notice”) an award of a number of Restricted Stock Units (the “Award” or the “RSUs”) with each RSU representing the right to receive one share of the Company’s common stock, par value $0.001 (the “Common Stock”) specified in the Grant Notice. The Award is subject to the conditions set forth in the Grant Notice, these Standard Terms and Conditions, and the Plan, each as amended from time to time. For purposes of these Standard Terms and Conditions and the Grant Notice, any reference to the Company shall include a reference to any Subsidiary. The Standard Terms and Conditions and the Grant Notice together shall constitute the Award Agreement with respect to this Award as contemplated under Section 2(d) of the Plan.

2. VESTING

The Award shall not be vested as of the Grant Date set forth in the Grant Notice and shall be forfeitable unless and until otherwise earned and vested pursuant to the terms of the Grant Notice and these Standard Terms and Conditions. The Award shall become vested as described in the Grant Notice. RSUs that have vested and are no longer subject to forfeiture are referred to herein as “Vested RSUs.” RSUs awarded hereunder that are not vested and remain subject to forfeiture are referred to herein as “Unvested RSUs.”

Notwithstanding anything contained in these Standard Terms and Conditions to the contrary, upon Participant’s Termination of Employment with the Company and its Subsidiaries for any reason other than [due to the Participant’s Disability or death][(a) due to the Participant’s Disability or death, or (b) without Cause in connection with or within twenty-four (24) months following a Change in Control], all Unvested RSUs shall be forfeited and canceled as of the date of such Termination of Employment without the payment of any consideration therefor. If the Participant’s Termination of Employment is due to the Participant’s Disability or death, all Unvested RSUs shall vest as of the date of such termination. [If the Participant’s Termination of Employment without Cause occurs in connection with or within twenty-four (24) months following a Change in Control, then all Unvested RSUs shall vest and all other conditions to the grant, issuance, retention, or transferability of this Award shall lapse as of the date of such termination.]

3. SETTLEMENT OF RSUS

Promptly following the date on which RSUs become vested, and in any event no later than March 15 of the calendar year following the calendar year in which such vesting occurs, the Company shall (a) issue and deliver to the Participant the number of shares of Company common stock equal to the number of Vested RSUs and (b) enter the Participant’s name on the books of the Company as the shareholder of record with respect to the shares of Company common stock delivered to the Participant.

Notwithstanding the foregoing, in accordance with Section 11 of the Plan, the Committee may, but is not required to, prescribe rules pursuant to which the Participant may elect to defer settlement of the RSUs. Any deferral election must be made in compliance with such rules and procedures as the Committee deems advisable.

[If the Participant is deemed a “specified employee” within the meaning of Section 409A of the Code, as determined by the Committee, at a time when the Participant becomes eligible for settlement of the RSUs upon his “separation from service” within the meaning of Section 409A of the Code, then to the extent necessary to prevent any accelerated or additional tax under Section 409A of the Code, such settlement will be delayed until the earlier of (a) the date that is six months following the Participant’s separation from service and (b) the Participant’s death.]

4. RIGHTS AS STOCKHOLDER

Participant shall not be, nor have any of the rights or privileges of, a stockholder of the Company in respect of any RSUs unless and until shares of Common Stock settled for such RSUs shall have been issued by the Company to Participant (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company)[; provided, however, that Participant shall be entitled to receive dividends or dividend equivalents with respect to each of its RSUs in an amount equal to any dividend or dividend equivalent declared and payable to holders of Common Stock. Such amounts may be paid by the Company to the Participant via payroll, as applicable.][. For the avoidance of doubt, the Participant shall not be entitled to receive any dividends or dividend equivalents with respect to the RSUs or have any voting rights with respect to the RSUs unless and until shares of Common Stock settled for Vested RSUs shall have been issued by the Company to Participant.]

5. RESTRICTIONS ON RESALES OF SHARES

The Company may impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by the Participant or other subsequent transfers by the Participant of any shares of Common Stock issued pursuant to Vested RSUs, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Participant and other holders and (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers.

6. INCOME TAXES

To the extent required by applicable federal, state, local or foreign law, the Participant authorizes the Company to deduct from payments of any kind due Participant to satisfy any withholding tax obligations that arise by reason of the grant or vesting of the RSUs. [This authority shall include the authority to withhold Common Stock or other property and to make cash payments in respect thereof in satisfaction of the Participant’s tax obligation.] The Company shall not be required to issue shares or to recognize the disposition of such shares until such obligations are satisfied.

7. NON-TRANSFERABILITY OF AWARD

The Participant understands, acknowledges and agrees that, except as otherwise provided in the Plan or as permitted by the Committee, the Award may not be sold, assigned, transferred, pledged or otherwise directly or indirectly encumbered or disposed of other than by will or the laws of descent and distribution.

8. OTHER AGREEMENTS SUPERSEDED

The Grant Notice, these Standard Terms and Conditions and the Plan constitute the entire understanding between the Participant and the Company regarding the Award. Any prior agreements, commitments or negotiations concerning the Award are superseded.

9. LIMITATION OF INTEREST IN SHARES SUBJECT TO RSUS

Neither the Participant (individually or as a member of a group) nor any beneficiary or other person claiming under or through the Participant shall have any right, title, interest, or privilege in or to any shares of Common Stock allocated or reserved for the purpose of the Plan or subject to the Grant Notice or these Standard Terms and Conditions except as to such shares of Common Stock, if any, as shall have been issued to such person in connection with the Award. Nothing in the Plan, in the Grant Notice, these Standard Terms and Conditions or any other instrument executed pursuant to the Plan shall confer upon the Participant any right to continue in the Company’s employ or service nor limit in any way the Company’s right to terminate the Participant’s [service][employment] at any time for any reason.

10. GENERAL

(a) In the event that any provision of these Standard Terms and Conditions is declared to be illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such provision shall be reformed, if possible, to the extent necessary to render it legal, valid and enforceable, or otherwise deleted, and the remainder of these Standard Terms and Conditions shall not be affected except to the extent necessary to reform or delete such illegal, invalid or unenforceable provision.

(b) The headings preceding the text of the sections hereof are inserted solely for convenience of reference, and shall not constitute a part of these Standard Terms and Conditions, nor shall they affect its meaning, construction or effect.

(c) These Standard Terms and Conditions shall inure to the benefit of and be binding upon the parties hereto and their respective permitted heirs, beneficiaries, successors and assigns.

(d) These Standard Terms and Conditions shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to principles of conflicts of law.

(e) In the event of any conflict between the Grant Notice, these Standard Terms and Conditions and the Plan, the Grant Notice and these Standard Terms and Conditions shall control. In the event of any conflict between the Grant Notice and these Standard Terms and Conditions, the Grant Notice shall control.

(f) All questions arising under the Plan or under these Standard Terms and Conditions shall be decided by the Committee in its total and absolute discretion.

11. ELECTRONIC DELIVERY

By executing the Grant Notice, the Participant hereby consents to the delivery of information (including, without limitation, information required to be delivered to the Participant pursuant to applicable securities laws) regarding the Company and the Subsidiaries, the Plan, and the RSUs via Company web site or other electronic delivery.