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): June 30, 2016 (June 28, 2016)
American Finance Trust, Inc.
(Exact Name of Registrant as Specified in Charter)
| Maryland | 000-55197 | 90-0929989 | ||
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(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
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405 Park Avenue, 14 th Floor New York, New York 10022 |
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(Address, including zip code, of Principal Executive Offices)
Registrant's telephone number, including area code: (212) 415-6500 |
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))
| Item 8.01 | Other Events. |
Special Committee of the Board
American Finance Trust, Inc. (the “Company”) announced that a special committee comprised entirely of independent directors (the “Special Committee”) has initiated a strategic review process to identify, examine and consider a range of strategic alternatives available to the Company with the objective of maximizing shareholder value, including potential strategic transactions involving the Company and one or more entities sponsored by affiliates of the Company’s sponsor. The Company has engaged financial advisors and the Special Committee has retained Pepper Hamilton LLP as its special independent legal counsel.
The Special Committee and its financial advisors have engaged in discussions with various entities’ special committees and their respective financial advisors in regards to potential strategic transactions. Although certain of these discussions have progressed, none has resulted in a definitive agreement. The Special Committee has not made a decision whether to recommend to the board of directors that the Company enter into any proposed transaction, and there can be no assurance that any of these preliminary discussions will result in a definitive agreement or that any such transactions would be approved by stockholders. The Company does not intend to provide updates on the discussions or negotiations regarding any of the proposed transactions unless or until it determines that further disclosure is appropriate or required based on the then-current facts and circumstances.
Amendments to Share Repurchase Program
On June 28, 2016, in consideration of the strategic review process, the board of directors of the Company determined to amend the Company’s existing share repurchase program (the “SRP” and the “SRP Amendment”) to provide for one twelve-month repurchase period for calendar year 2016 (the “2016 Repurchase Period”) instead of two semi-annual periods ending June 30 and December 31. The annual limit on repurchases under the SRP remains unchanged and continues to be limited to a maximum of 5.0% of the weighted average number of shares of common stock of the Company outstanding during its prior fiscal year (the “2015 Outstanding Shares”) and is subject to the terms and limitations set forth in the SRP. Accordingly, the 2016 Repurchase Period will be limited to a maximum of 5.0% of the 2015 Outstanding Shares and continue to be subject to the terms and conditions set forth in the SRP, as amended. Following calendar year 2016, the repurchase periods will return to two semi-annual periods and applicable limitations set forth in the SRP. The SRP Amendment also provides, for calendar year 2016 only, that any amendments, suspensions or terminations of the SRP will become effective on the day following the Company’s public announcement of such amendments, suspension or termination. The SRP Amendment will become effective on July 30, 2016 and will only apply to repurchase periods in calendar year 2016.
Except as set forth in the SRP Amendment, all other terms and conditions of the SRP continue to apply. As provided for in the SRP, stockholders who have previously submitted a repurchase request, or stockholders who submit a repurchase request in the future, will continue to have the ability to cancel their repurchase requests by notifying a customer service representative on or prior to December 31, 2016, the last day of the repurchase period. Otherwise, as outlined in the SRP, if a repurchase request is not cancelled prior to the end of the repurchase period, a stockholder would be contractually bound to the repurchase and would not be permitted to cancel the repurchase request prior to the payment of repurchase proceeds.
The foregoing summary of the SRP Amendment is qualified by the text of the SRP Amendment, which is filed as Exhibit 99.1 to this Form 8-K. The SRP was filed as an exhibit to the quarterly report on Form 10-Q for the period ended March 31, 2016, filed on May 16, 2016.
Amendment to Distribution Reinvestment Plan
Also on June 28, 2016, in consideration of the strategic review process, and in order to provide the Company additional flexibility with respect to the timing of future issuances under its distribution reinvestment plan (“DRIP”), the board of directors of the Company determined to amend the Company’s DRIP (the “DRIP Amendment”) to provide that any amendment, suspension or termination of the DRIP will become effective immediately upon (i) the Company’s public announcement of such amendment, suspension or termination and (ii) the Company’s mailing of a notice regarding the amendment, suspension or termination to each DRIP participant. The DRIP Amendment does not modify the DRIP provision prohibiting amendments, prior to the listing of the Company’s common stock on a national securities exchange, to a DRIP participant’s right to terminate or modify his participation in the DRIP. In accordance with the DRIP, the DRIP Amendment becomes effective 10 days after the Company mails notice of the DRIP Amendment to DRIP participants.
The foregoing summary of the DRIP Amendment is qualified by the text of the DRIP Amendment, which is filed as Exhibit 99.2 to this Form 8-K.
Forward Looking Statements
The statements in this Current Report on Form 8-K include statements regarding the intent, belief or current expectations of the Company and members of its management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as “may,” “will,” “seeks,” “strives,” “anticipates,” “believes,” “estimates,” “expects,” “plans,” “intends,” “should” or similar expressions. The Company may not actually identify any viable strategic transactions, execute any strategic transaction, or achieve the plans, intentions, or expectations disclosed in these forward looking statements, and you should not place undue reliance on these forward-looking statements. Actual results may differ materially from those contemplated by such forward-looking statements, including as a result of those factors set forth in the Risk Factors section of the Company’s most recent annual report on Form 10-K and quarterly report on Form 10-Q. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.
| Item 9.01. | Financial Statements and Exhibits |
| (d) | Exhibits |
| Exhibit No. | Description | |
| 99.1 | Amendment to Amended and Restated Share Repurchase Program | |
| 99.2 | Amendment to Distribution Reinvestment Plan |
SIGNATURES
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.
| AMERICAN FINANCE TRUST, INC. | ||
| Date: June 30, 2016 | By: | /s/ Nicholas Radesca |
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Nicholas Radesca Chief Financial Officer, Secretary and Treasurer |
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Exhibit 99.1
Amendment to Amended and Restated Share Repurchase Program
This amendment (this “Amendment”) adopted effective as of July 30, 2016 (the “Amendment Effective Date”), amends the Amended and Restated Share Repurchase Program (the “SRP”) of American Finance Trust, Inc. (the “Company”) adopted effective as of February 28, 2016. Except as amended by this Amendment, the terms of the SRP in effect as of the Amendment Effective Date will continue to apply.
This Amendment will remain in effect from the Amendment Effective Date until the earlier of December 31, 2016, or the date the Company publicly announces that this Amendment will no longer be in effect (such date, as applicable, the “Termination Date”). Following the Termination Date, the terms of the SRP, as in effect prior to this Amendment, will continue to apply. For the avoidance of doubt, and in accordance with Section 4(a) , as amended, the terms of the SRP, as in effect prior to this Amendment, will automatically be in effect on the day following the Termination Date.
| 1. | Section 1.g. of the SRP is replaced in its entirety with the following: |
Subject to Section 2 and Section 3 , in respect of the twelve-month period that commenced January 1, 2016, the Company will pay repurchase proceeds, less any applicable tax or other withholding required by law, on or before the 31st day following December 31, 2016. The period referred to in the preceding sentence is a “Fiscal Period.”
| 2. | Section 2 of the SRP is amended as follows: |
| a. | The term “Fiscal Semi-Annual Period,” in each instance in which it is used in this Section 2, is replaced with “Fiscal Period.” |
| b. | The telephone number provided in Section 2.c is replaced with “866-902-0063.” |
| 3. | Section 3 of the SRP is replaced in its entirety with the following: |
| a. | For the Fiscal Period ending December 31, 2016, repurchases under the SRP will be limited to a maximum of 5.0% of the weighted average number of shares of Common Stock outstanding during the previous fiscal year. |
| b. | SRP Qualifying Shareholders will only be able to have their Shares repurchased to the extent that the Company has sufficient liquid assets. In each Fiscal Period, funding for the SRP will be limited to proceeds received during the same Fiscal Period through the issuance of Common Stock pursuant to any DRIP in effect from time to time; provided that that Board has the power, in its sole discretion, to determine the number of Shares repurchased during any Fiscal Period as well as the amount and source of funds to be used for that purpose. |
| c. | Following each Fiscal Period, the Advisor will review all repurchase requests received during such Fiscal Period and then report to the Company’s management and the Board the total number of Shares subject to repurchase requests, including the total number of Hardship Requests. If, following review of this report by the Company’s management and the Board, less than all repurchase requests for any Fiscal Period are accommodated due to the limitations described in Section 3(a) and 3(b) , or a determination by the Board as described in Section 3(c) , Shares will be repurchased as follows: (i) first, pro rata as to Hardship Requests; and (ii) second, pro rata as to all other repurchase requests. |
| 4. | Section 4.a. of the SRP is replaced in its entirety with the following: |
The Board may amend, suspend (in whole or in part) or terminate the SRP at any time; provided , that any material modifications, suspensions or termination of the SRP by the Board will be disclosed promptly in reports the Company files with the SEC, a press release and/or via the Company’s website. Any amendment, suspension or termination will become effective on the day following the Company’s public announcement of such amendment, suspension or termination.
Exhibit 99.2
FIRST AMENDMENT TO
DISTRIBUTION REINVESTMENT PLAN OF
American finance trust, inc.
WHEREAS , American Finance Trust, Inc. (the “ Company ”) maintains the Distribution Reinvestment Plan of the Company (the “ Plan ”);
WHEREAS , pursuant to Section 10 of the Plan, the Company may at any time amend the Plan; and
WHEREAS , the Company desires to amend the Plan as set forth herein;
NOW, THEREFORE , pursuant to Section 10 of the Plan, effective as of 10 days after the Company’s mailing of a notice of amendment to Plan participants, Sections 10(a) and 10(b) of the Plan are hereby amended in their entirety to read as follows:
“(a) Except for Section 8(a) of this Plan, which shall not be amended prior to a listing of the Shares on a national securities exchange, the terms and conditions of this Plan may be amended by the Company at any time, including but not limited to an amendment to the Plan to substitute a new Administrator to act as agent for the Participants, by (i) making a public announcement describing the amendment and (ii) mailing to each Participant a notification describing the amendment.
(b) The Administrator may terminate a Participant’s individual participation in the Plan and the Company may terminate or suspend the Plan itself with immediate effect at any time by (i) making a public announcement describing the termination or suspension and (ii) mailing to each Participant a notification describing the termination or suspension.”
IN WITNESS WHEREOF, the undersigned has caused this amendment to be executed this 30 th day of June, 2016.
| AMERICAN FINANCE TRUST, INC. | |||
| By: | /s/ Edward M. Weil, Jr. | ||
| Name: Edward M. Weil, Jr. | |||
| Title: Chief Executive Officer and President | |||