National Storage Affiliates Trust
08/15/2024 | Press release | Distributed by Public on 08/15/2024 14:32
Management Change/Compensation Form 8 K
ITEM 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 15, 2024, Mark Van Mourick, a member of the Board of Trustees (the "Board") of National Storage Affiliates Trust (the "Company") informed the Board that he is resigning from the Board effective immediately. Mr. Van Mourick has been a trustee since 2015. Mr. Van Mourick's decision to resign from the Board was not the result of any dispute or disagreements with the Company on any matter relating to the Company's operations, policies or practices.
On the same day, following Mr. Van Mourick's resignation, the Board, upon recommendation of the Compensation, Nominating and Corporate Governance Committee of the Board (the "CNCG Committee"), elected Warren Allan, 66, to serve as a member of the Board, effective immediately. In addition, upon recommendation of the CNCG Committee, the Board also appointed Mr. Allan to serve on the Audit Committee of the Board (the "Audit Committee"). Based upon a review of all relevant facts and circumstances, the Board affirmatively determined that Mr. Allan qualifies as an independent trustee and for purposes of serving on the Audit Committee as required by the New York Stock Exchange listing standards, Securities and Exchange Commission rules, and the Company's independence standards.
Mr. Allan was formerly the President and Manager of Optivest Properties, LLC ("Optivest"), one of the Company's former participating regional operators ("PROs") and, as such, Mr. Allan and Optivest were previously parties to a facilities portfolio management agreement with the Company, and Optivest was a party to a sales commission agreement and various asset management agreements with the Company. The asset management agreements with Optivest included payments of supervisory and administrative fees and expense reimbursements from the Company to Optivest.
As previously announced in the Form 8-K filed by the Company on July 8, 2024, the Company entered into contribution agreements with Optivest to acquire certain of Optivest's assets, which included (a) Optivest's facilities portfolio management agreement, sales commission agreement and various asset management agreements, (b) certain intellectual property and brands, and (c) certain rights with respect to Optivest's tenant insurance program. In connection with these transactions, the Company paid Optivest and its affiliates an aggregate of $8.2 million in cash and 548,944 Class A common units of limited partner interest of NSA OP, LP ("Class A OP Units"), of which Mr. Allan's interest was approximately $2.9 million in cash and 209,333 Class A OP units, which Class A OP units had a value of approximately $8.4 million based on the closing price of the Company's common shares of beneficial interest, $0.01 par value per share ("common shares") as of the closing of the transaction. As a result, the Company no longer has any obligation to pay any supervisory and administrative fees or reimbursements to Optivest under those agreements. In connection with the closing of the above-mentioned transactions, on July 1, 2024, the Company entered into a new sales commission agreement and asset management agreements with Optivest to manage a portion of the Company's self storage properties during an interim period until the operation of such facilities has transitioned to the Company.
For the year ended December 31, 2023 and the seven months ended July 31, 2024, supervisory and administrative fees of approximately $4.8 million and $2.7 million, respectively, were paid to Optivest. Of these, Mr. Allan's interest was approximately $1.7 million and $1.0 million, respectively, excluding his share of any costs associated with such fees. For the year ended December 31, 2023 and the seven months ended July 31, 2024, expense reimbursements of approximately $7.2 million and $4.3 million were paid to Optivest. Of these, Mr. Allan's interest was approximately $2.5 million and $1.5 million, respectively, excluding his share of any costs associated with such reimbursements. For the year ended December 31, 2023 and the six months ended June 30, 2024, tenant insurance-related access fees and commissions of approximately $2.4 million and $1.1 million, respectively were paid to an affiliate of Optivest. Of these, Mr. Allan's interest was approximately $0.8 million and $0.4 million, respectively, excluding his share of any costs associated with such fees and commissions.
In connection with the acquisition of two properties by the Company during the year ended December 31, 2023, an aggregate of 11,700 LTIP units previously granted to Mr. Allan, vested, which vested LTIP units had an aggregate value of $0.4 million based on the weighted average closing price of the common shares as of the respective vesting dates.