MONMOUTH REAL ESTATE INVESTMENT CORP (Form: 8-K, Received: 01/14/2021 16:55:00)

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) January 14, 2021

MONMOUTH REAL ESTATE INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

Maryland	001-33177	22-1897375
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

101 Crawfords Corner Road, Suite 1405, Holmdel, NJ		07733
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code

(732) 577-9996

(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 (see General Instructions A.2. below):

☐ Written communications pursuant to Rule 425 under 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 or to be registered pursuant to Section 12(b) of the Act.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	MNR	New York Stock Exchange
6.125% Series C Cumulative Redeemable Preferred Stock	MNR-PC	New York Stock Exchange

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. ☐

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January 14, 2021, Monmouth Real Estate Investment Corporation (the “Company”) adopted a change in control severance plan (the “Change in Control Severance Plan”), effective January 1, 2021, in substantially the form filed as Exhibit 10.1 to this Form 8-K. Under the Change in Control Severance Plan, if an employee who is not subject to an employment agreement with the Company providing for severance is terminated by the Company without “cause” (as defined in the Change in Control Severance Plan), within twelve (12) months following a Change in Control (as defined in the Change in Control Severance Plan), the terminated employee will be entitled to a lump-sum cash payment in an amount equal to two times the employee’s annual base salary and payment or reimbursement by the Company of premiums for healthcare continuation coverage under COBRA for the employee and his or her dependents for so long as they remain eligible for such coverage or until they obtain other health care coverage, if earlier.

The foregoing description of the Change in Control Severance Plan is qualified in its entirety by reference to its terms, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.

Item 8.01. Other Events

On January 14, 2021, the Board of Directors (the “Board”) declared a dividend of $0.18 per share to be paid March 15, 2021 to common shareholders of record as of the close of business on February 16, 2021. Also on January 14, 2021, the Board declared a dividend for the period December 1, 2020 through February 28, 2021, of $0.3828125 per share on the Company’s 6.125% Series C Cumulative Redeemable Preferred Stock payable March 15, 2021 to shareholders of record as of the close of business on February 16, 2021. A copy of the press release announcing the quarterly dividends is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

On January 14, 2021, the Board unanimously decided to explore strategic alternatives to maximize shareholder value. Although the Board has determined to explore strategic transactions for the Company, the Company is not obligated to pursue any particular transaction or any transaction at all. Even if the Board decides to pursue a particular strategy, there is no assurance that the Company will successfully implement its strategy. This Current Report on Form 8-K does not constitute an offer to sell the Company’s Common Stock. A copy of the press release announcing the Company’s exploration of strategic alternatives is filed as Exhibit 99.2 to this Current Report on Form 8-K, and is incorporated by reference.

Forward-Looking Statements

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide the Company’s current expectations or forecasts of future events. Forward-looking statements include statements about the Company’s expectations, beliefs, intentions, plans, objectives, goals, strategies, future events, performance and underlying assumptions and other statements that are not historical facts. You can identify forward-looking statements by their use of forward-looking words, such as “may,” “will,” “anticipate,” “expect,” “believe,” “intend,” “plan,” “should,” “seek” or comparable terms, or the negative use of those words, but the absence of these words does not necessarily mean that a statement is not forward-looking. The forward-looking statements are based on the Company’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to it. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to the Company. Some of these factors are described under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 and its other periodic reports filed with the Securities and Exchange Commission, which are accessible on the Securities and Exchange Commission’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in the filings. These and other risks, uncertainties and factors could cause the Company’s actual results to differ materially from those included in any forward-looking statements it makes. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for the Company to predict those events or how they may affect it. Except as required by law, the Company is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on these forward-looking statements, as events described or implied in such statements may not occur. Although the Board has unanimously decided to explore strategic alternatives for the Company, the Company is not obligated to pursue any particular transaction or any transaction at all. Further, although the Company is exploring strategic alternatives, there is no assurance that this process will result in stockholder liquidity, or provide a return to stockholders that equals or exceeds the Company’s estimated value per share. Even if the Board decides to pursue a particular strategy, there is no assurance that the Company will successfully implement its strategy.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
No.		Description

10.1		Change in Control Severance Plan, dated January 14, 2021.

99.1		Press Release dated January 14, 2021.

99.2		Press Release dated January 14, 2021.

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.

	Monmouth Real Estate Investment
	Corporation

Dated: January 14, 2021	By:	/s/ Kevin S. Miller
		Kevin S. Miller
		Chief Financial Officer, its principal financial officer and principal accounting officer

Exhibit 10.1

Monmouth Real Estate Investment Corporation
Change in Control Severance Plan

Effective January 1, 2021

1. General Eligibility. Each employee who is employed on a full-time basis by Monmouth Real Estate Investment Corporation (the “Company”), and who is not subject to an employment agreement with the Company providing for severance, (a “Participant”) shall be eligible to participate in this Change in Control Severance Plan (the “Plan”).

2. Severance. In the event Participant’s employment with the Company is terminated without Cause within twelve months following a Change in Control (a “Qualifying Termination”), and subject to Section 4, Participant shall receive a severance payment equal to two (2) times his or her annual base salary as in effect immediately prior to the effective date of the Change in Control (the “Severance Payment”).

For purposes of this Plan, “Cause” shall mean any of the following: (i) Participant’s continued failure to satisfactorily perform his or her duties to the Company (other than as a result of his or her total or partial incapacity due to physical or mental illness); (ii) any willful act or omission by Participant constituting dishonesty, fraud or other malfeasance against the Company; (iii) Participant’s commission of a felony under the laws of the United States or any state thereof or any other jurisdiction in which the Company conducts business; or (iv) Participant’s breach of any of the material policies of the Company including without limitation being under the influence of illicit drugs or alcohol at work or on the Company’s premises.

For purposes of this Plan, “Change in Control” shall have the meaning defined in the Company’s Amended and Restated 2007 Incentive Award Plan, as amended from time to time, and any successor Plan, whichever is operative as of the date of determination hereunder.

3. COBRA. If Participant has experienced a Qualifying Termination and timely elects continuation of health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), for themselves, their spouse and their eligible dependents, if applicable, in addition to the Severance Payment and subject to Section 4, the Company will also pay or reimburse Participant for all premiums required for such COBRA continuation coverage for so long as Participant remains eligible for such coverage under COBRA or until Participant obtains other health care coverage, if earlier. In the event it is not possible to provide COBRA coverage on a subsidized basis, as described in this Section 3, the Company shall pay to Participant a lump sum equal to the value of such subsidy, as determined in the reasonable discretion of the Company, assuming that the Participant remained eligible for 18 months of COBRA coverage.

4. Payment and Other Terms.

(a) The receipt of the Severance Payment and any COBRA benefits under Section 3 will be subject to Participant signing (or, in the event of Participant’s death, his or her estate or beneficiaries signing) and not revoking (within any period permitted under applicable law) an agreement containing a general release of all claims against, together with a customary non-disparagement covenant relating to, the Company and its affiliates in a form acceptable to the Company, within 50 days following the effective date of Participant’s Qualifying Termination (the “Release Agreement”).

(b) To be eligible for benefits under this Plan, the Qualifying Termination must also constitute a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations promulgated thereunder, including Treasury Regulation Section 1.409A-1(h) (a “Separation from Service”)

(c) The Severance Payment shall be made, subject to Participant signing and not revoking the Release Agreement referenced in Section 4(a), in a lump-sum within 60 days following the effective date of Participant’s Qualifying Termination.

(d) The Company shall be entitled to withhold or cause to be withheld from any amounts to be paid under this Plan to a Participant any federal, state, or local withholding or other taxes or amounts that it is from time to time required or permitted to withhold.

5. Effect on Other Arrangements. This Plan supersedes each prior plan, guideline, practice or agreement with the Company relating to severance benefits for Participants eligible for such coverage, whether formal or informal, or written or unwritten, except as required under applicable law or such Participant’s written employment agreement; provided, that payments under applicable law or any employment agreement or other similar agreement shall be reduced by the amount of severance payments and benefits, if any, payable under this Plan.

6. At-Will Employment. This Plan shall not give any employee the right to be retained in the service of the Company or interfere with or restrict the right of the Company to discharge or retire the employee. All employees of the Company are employed at will.

7. Administration, Duration and Amendments. This Plan shall be administered by the Compensation Committee of the Company’s Board of Directors or a sub-committee thereof, whose determinations, exercise of discretion and interpretation of this Plan shall be final and binding. Following a Change in Control, this Plan shall be administered by a committee of the Board comprised of Incumbent Directors (as defined in the defined in the Company’s Amended and Restated 2007 Incentive Award Plan). The Company reserves the right to amend or terminate all or any part of this Plan at any time, by action of the Company’s Board of Directors, Compensation Committee or such officer(s) who are so authorized, in its, his or her discretion, provided, however, that no such amendment or termination shall impair the then existing rights of a Participant with regards to the Plan, including but not limited to the rights of any Participant who actually ceased employment with the Company as a result of a Qualifying Termination.

8. No Implied Employment Rights. The Plan shall not be deemed to give any Participant or other person any right to be retained in the employ of the Company or its affiliates or to interfere with the right of the Company or its affiliates to discharge any Participant or other person at any time and for any reason.

9. Governing Law. The Plan shall be administered, interpreted and enforced under the internal laws of the State of Maryland without regard to conflicts of laws thereof or of any other jurisdiction.

10. Section 409A. Notwithstanding any provision herein to the contrary, if Participant is deemed by the Company at the time of his or her Separation from Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which Participant is entitled under this Plan is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of his or her benefits shall not be provided to Participant prior to the earlier of (i) the expiration of the six-month period measured from the date of Separation from Service with the Company or (ii) the date of death. Upon the first business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Participant (or Participant’s estate or beneficiaries), and any remaining payments due under this Plan shall be paid as otherwise provided herein. To the extent applicable, this Plan shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the adoption of this Plan. Notwithstanding any provision of this Plan to the contrary, in the event that the Company determines that any amounts payable hereunder will be immediately taxable to Participant under Section 409A of the Code and related Department of Department of Treasury guidance, to the extent permitted under Section 409A of the Code, the Company may, to the extent permitted under Section 409A of the Code (a) cooperate in good faith to adopt such amendments to this Plan and appropriate policies and procedures, including amendments and policies with retroactive effect, that they determine necessary or appropriate to preserve the intended tax treatment of the benefits provided by this Plan, preserve the economic benefits of this Plan and avoid less favorable accounting or tax consequences for the Company and/or (b) take such other actions as mutually determined necessary or appropriate to exempt the amounts payable hereunder from Section 409A of the Code or to comply with the requirements of Section 409A of the Code and thereby avoid the application of penalty taxes under such section.

Exhibit 99.1

Monmouth Real Estate Investment Corporation

BELL WORKS

101 CRAWFORDS CORNER ROAD

SUITE 1405

HOLMDEL, NEW JERSEY 07733

A Public REIT Since 1968

____

INTERNET:		OFFICE:		EMAIL:
www.mreic.reit		(732) 577-9996		mreic@mreic.com

MONMOUTH REAL ESTATE INVESTMENT CORPORATION
INCREASES QUARTERLY DIVIDEND BY 5.9% TO $0.18 PER SHARE

HOLMDEL, N.J – January 14, 2021 — Monmouth Real Estate Investment Corporation (NYSE: MNR) (“Monmouth” or the “Company”) today announced that its Board of Directors declared a quarterly dividend of $0.18 per share of common stock, which represents a 5.9% increase over the previous quarterly dividend of $0.17 per share and an annualized dividend rate of $0.72 per share. This dividend is payable on March 15, 2021 to stockholders of record as of the close of business on February 16, 2021. Also on January 14, 2021, the Board of Directors declared a dividend for the period December 1, 2020 through February 28, 2021 of $0.3828125 per share on the Company’s 6.125% Series C Cumulative Redeemable Preferred Stock payable March 15, 2021 to stockholders of record as of the close of business on February 16, 2021. Series C preferred share dividends are cumulative and payable quarterly at an annual rate of $1.53125.

Demonstrating the Company’s resilient track record of delivering value to stockholders, Monmouth is now in its 30^th consecutive year of having maintained or increased its dividend. In addition, Monmouth is one of the very few REITs that maintained its dividend throughout the Global Financial Crisis. Despite the COVID-19 pandemic, Monmouth is paying a higher per share dividend today than ever before. During fiscal 2020, Monmouth has seen strong demand for its properties and has the highest occupancy rate in the sector at 99.7%. The Company expects the combination of its two recent acquisitions totaling $170.0 million, a $169.3 million acquisition pipeline, substantial parking expansions currently taking place and increased occupancy to meaningfully contribute to its earnings per share and cash flow growth in fiscal 2021 and beyond.

“We are pleased to announce an increase in our quarterly dividend of 5.9% to $0.18 per share, which was driven by our strong financial and operational performance and confidence in our next phase of growth,” said Michael P. Landy, President and Chief Executive Officer at Monmouth. “This marks Monmouth’s third dividend increase in the past five years, totaling a 20% increase in that span, and reflects the strength of our state-of-the-art, ecommerce-oriented industrial portfolio and our unique approach to profitably serving investment grade tenants and their subsidiaries on long-term net leases. Thanks to our prescient investments in ecommerce related assets, high-quality acquisition pipeline, property expansion projects, and consistent focus on long-term value creation, the Monmouth Board is confident in the Company’s prospects and ability to continue returning value to stockholders while maintaining financial stability.”

About Monmouth Real Estate

Monmouth Real Estate Investment Corporation, founded in 1968, is one of the oldest public equity REITs in the world. We specialize in single tenant, net-leased industrial properties, subject to long-term leases, primarily to investment-grade tenants. Monmouth Real Estate is a fully integrated and self-managed real estate company, whose property portfolio consists of 121 properties, containing a total of approximately 24.5 million rentable square feet, geographically diversified across 31 states. Our occupancy rate as of this date is 99.7%.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide the Company’s current expectations or forecasts of future events. Forward-looking statements include statements about the Company’s expectations, beliefs, intentions, plans, objectives, goals, strategies, future events, performance and underlying assumptions and other statements that are not historical facts. You can identify forward-looking statements by their use of forward-looking words, such as “may,” “will,” “anticipate,” “expect,” “believe,” “intend,” “plan,” “should,” “seek” or comparable terms, or the negative use of those words, but the absence of these words does not necessarily mean that a statement is not forward-looking. The forward-looking statements are based on the Company’s beliefs, assumptions and expectations of its future performance, taking into account all information currently available to it. Forward-looking statements are not predictions of future events. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to the Company. Some of these factors are described under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 and its other periodic reports filed with the Securities and Exchange Commission, which are accessible on the Securities and Exchange Commission’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included in the filings. These and other risks, uncertainties and factors could cause the Company’s actual results to differ materially from those included in any forward-looking statements it makes. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for the Company to predict those events or how they may affect it. Except as required by law, the Company is not obligated to, and does not intend to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on these forward-looking statements, as events described or implied in such statements may not occur.

Contacts:

Investors:

Becky Coleridge

732-810-0907

Bruce Goldfarb/Chuck Garske/Teresa Huang

Okapi Partners

212-297-0720

info@okapipartners.com

Media:

Andrew Siegel/Jim Golden

Joele Frank

212-355-4449

Exhibit 99.2

Monmouth Real Estate Investment Corporation

BELL WORKS

101 CRAWFORDS CORNER ROAD

SUITE 1405

HOLMDEL, NEW JERSEY 07733

A Public REIT Since 1968

____

INTERNET:		OFFICE:		EMAIL:
www.mreic.reit		(732) 577-9996		mreic@mreic.com

Monmouth Real Estate Announces Review of Strategic Alternatives

HOLMDEL, N.J., January 14, 2021 – Monmouth Real Estate Investment Corporation (NYSE:MNR) (“Monmouth” or the “Company”) today announced that its Board of Directors (the “Board”), working together with its legal and financial advisors, has unanimously decided to explore strategic alternatives to maximize stockholder value.

The Board intends to consider the full range of available alternatives including a potential sale or merger of the Company. Monmouth has retained J.P. Morgan to work collaboratively with CS Capital Advisors to assist and advise the Board in its strategic review. The Company noted that there can be no assurance that the exploration of strategic alternatives will result in any transaction.

Brian Haimm, Monmouth’s Lead Independent Director, said, “We are undertaking a comprehensive and thorough review of all available alternatives, and our Board and management are committed to taking the appropriate and necessary actions to further enhance value for Monmouth stockholders.”

The Board does not intend to disclose further developments unless and until it approves a specific action or otherwise concludes the review of strategic alternatives.

The Board, after review and consideration with the assistance of CS Capital Advisors and Venable, has also determined that the non-binding, unsolicited and conditional proposal sent on December 18, 2020, by Blackwells to acquire the Company for $18.00 per share is not in the best interest of the Company.

In light of its consideration of strategic alternatives, the Board has determined to suspend the Company’s Dividend Reinvestment and Stock Purchase Plan (the “Plan”), effective immediately. As a result, stockholders will receive dividends in cash effective with the dividend currently scheduled to be paid on March 15, 2021. If Monmouth reinstates the Plan in the future, stockholders that remain enrolled at reinstatement will automatically resume participation in the Plan.

Venable LLP is serving as Monmouth’s legal counsel, and CS Capital Advisors and J.P. Morgan are acting as the Company’s financial advisors.

About Monmouth Real Estate

Monmouth Real Estate Investment Corporation, founded in 1968, is one of the oldest public equity REITs in the world. The Company specializes in single tenant, net-leased industrial properties, subject to long-term leases, primarily to investment-grade tenants. Monmouth Real Estate Investment Corporation is a fully integrated and self-managed real estate company, whose property portfolio consists of 121 properties containing a total of approximately 24.5 million rentable square feet, geographically diversified across 31 states. The Company’s occupancy rate as of this date is 99.7%.

Forward-Looking Statement

Contacts:

Investors