UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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): November 14, 2012 (November 12, 2012)

 

American Realty Capital Trust IV, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland

(State or Other Jurisdiction of Incorporation)

 

333-180274   32-0372241
(Commission File Number)   (IRS Employer Identification No.)

 

405 Park Avenue, 15th Floor

New York, New York 10022

(Address, including zip code, of Principal Executive Offices) 
 
(212) 415-6500
(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))

 

 
 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Elimination of Asset Management Fees During Offering Period

 

As previously disclosed in a press release issued on September 11, 2012 by American Realty Capital Trust IV, Inc. (the “Company”), the Company’s board of directors and management mutually agreed to eliminate the payment of asset management fees in cash to its advisor.

 

Accordingly, on November 12, 2012, the Company entered into an Amended and Restated Advisory Agreement (the “A&R Advisory Agreement”) with American Realty Capital Operating Partnership IV, L.P. (the “Operating Partnership”) and American Realty Capital Advisors IV, LLC (the “Advisor”).

 

Pursuant to the A&R Advisory Agreement, once the Company begins to calculate its net asset value, the Company expects to issue (subject to periodic approval by the board of directors) to the Advisor performance-based restricted partnership units of the Operating Partnership designated as “Class B units,” which are intended to be profits interests and will vest, and no longer be subject to forfeiture, at such time as: (x) the value of the Operating Partnership’s assets plus all distributions made equals or exceeds the total amount of capital contributed by investors plus a 6% cumulative, pre-tax, non-compounded annual return thereon (the “economic hurdle”); (y) any one of the following occurs: (1) the termination of the A&R Advisory Agreement by an affirmative vote of a majority of the Company's independent directors without cause; (2) a listing; or (3) another liquidity event; and (z) the Advisor is still providing advisory services to the Company (the “performance condition”). Such Class B units will be forfeited immediately if: (a) the A&R Advisory Agreement is A&R Advisory Agreement is terminated by an affirmative vote of a majority of the Company's independent directors without cause before the economic hurdle has been met. When and if approved by the board of directors, the Class B units are expected to be issued to the Advisor quarterly in arrears pursuant to the terms of the A&R Limited Partnership Agreement (as defined below).

 

The Advisor will receive distributions on unvested Class B units equal to the distribution rate received on the Company's common stock No Class B units have been approved by the board of directors or issued as of September 30, 2012 or through the date of the filing of this Current Report on Form 8-K.

 

In connection with the changes as described above, the Operating Partnership has entered into an Amended and Restated Agreement of Limited Partnership of the Operating Partnership, dated as of November 12, 2012 (the “A&R Limited Partnership Agreement”).

 

Copies of the A&R Limited Partnership Agreement and the A&R Advisory Agreement were attached as Exhibits 4.1 and Exhibit 10.2, respectively, to the Company’s Quarterly Report on Form 10-Q filed on November 13, 2012 and are incorporated herein by reference. The foregoing summary descriptions of the A&R Limited Partnership Agreement and the A&R Advisory Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the A&R Limited Partnership Agreement and the A&R Advisory Agreement, respectively.

 

 
 

 

 

 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 REALTY CAPITAL TRUST IV, INC.
       
       
Date: November 14, 2012 By: /s/ Nicholas S. Schorsch 
    Name: Nicholas S. Schorsch
    Title:

Chief Executive Officer and

Chairman of the Board of Directors