8-K

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 12, 2021

STEADFAST APARTMENT REIT, INC.

(Exact Name of Registrant as Specified in Charter)

Maryland	000-55428	36-4769184
(State or Other Jurisdiction of	(Commission File Number)	(I.R.S. Employer
Incorporation or Organization)		Identification No.)

18100 Von Karman Avenue, Suite 200

Irvine, California 92612

(Address of Principal Executive Offices, including Zip Code)

Registrant’s Telephone Number, Including Area Code: (949) 569-9700

 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 Act: None

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

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 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain

Officers; Compensatory Arrangements of Certain Officers.

On January 12, 2021, Steadfast Apartment REIT, Inc. (the “Company”), STAR REIT Services, LLC, a subsidiary of the Company, Steadfast Apartment REIT Operating Partnership, L.P., the Company’s operating partnership, and each of Ella S. Neyland, the Company’s President, Chief Financial Officer and Treasurer, Tim Middleton, the Company’s Chief Investment Officer, Tiffany Stanley, the Company’s Executive Vice President of Operations, Jason S. Stern, the Company’s Chief Strategic and Administrative Officer, and Gustav F. Bahn, the Company’s Chief Legal Officer and Corporate Secretary (Messrs. Middleton, Stern and Bahn and Mses. Neyland and Stanley each an “Executive” and collectively the “Executives”) entered into an Amendment No.1 to the Employment Agreement dated as of September 1, 2020 (the “Amendments”). The Amendments provide that, effective January 1, 2021, each Executive shall have an unlimited amount of paid time off each calendar year. Any accrued but unpaid paid time off as of January 1, 2021 shall be paid to the Executives by the Company.

The foregoing description of the Amendments does not purport to be complete and is qualified in its entirety by reference to the form of Amendment, which is filed as Exhibit 10.01 hereto and is incorporated herein by reference.

Item 8.01Other Events.

Share Repurchase Plan

On January 12, 2021, the Board of Directors of the Company approved an amendment (the “Amendment”) to the Second Amended and Restated Share Repurchase Plan (the “SRP”). The Amendment (1) limits repurchase requests to death and qualifying disability only and (2) sets a $3 million per calendar quarter limit on the amount of repurchases by the Company. The Amendment will take effect upon 30 days’ from the filing of this Current Report on Form 8-K, and will be in effect on the Repurchase Date (as defined in the SRP) at the end of April 2021, with respect to repurchases for the fiscal quarter ending March 31, 2021. Share repurchase requests that do not meet the requirements for death and disability will be cancelled (including any requests received during the first quarter of 2021).

Distribution Declaration

On January 12, 2021, the Board of Directors of the Company approved and authorized a daily distribution to stockholders of record as of the close of business on each day for the period commencing on February 1, 2021 and ending on February 28, 2021. The distributions will be equal to $0.00143836 per share of the Company’s common stock per day. The distributions for each record date in February 2021 will be paid in March 2021. The distributions will be payable to stockholders from legally available funds therefor.

Stockholder Letter

On January 14, 2021, the Company mailed a letter to stockholders announcing the distribution rate for February 2021 and the Amendment. The stockholder letter is filed as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01Financial Statements and Exhibits.

(d) Exhibits.

Exhibits	Description
10.1	Form of Amendment No. 1 to Employment Agreement
99.1	Stockholder Letter 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.

		STEADFAST APARTMENT REIT, INC.
Date:	January 14, 2021	By:	/s/ Ella S. Neyland
			Ella S. Neyland
			President, Chief Financial Officer and Treasurer

EX-10.1

FORM OF

AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

This AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (the “Amendment”) by and among STAR REIT Services, LLC, a Delaware limited liability company (the “Company”), Steadfast Apartment REIT, Inc., a Maryland corporation, and Steadfast Apartment REIT Operating Partnership, L.P., a Delaware limited partnership, and _______ (the “Executive”) is dated as of January 12, 2021.

WHEREAS, the parties hereto previously entered into an Employment Agreement dated as of September 1, 2020 (the “Employment Agreement”); and

WHEREAS, pursuant to Section 25 (Amendment and Waiver), the parties hereto desire to amend the Employment Agreement to amend Section 3(c) of the Employment Agreement (Employment Benefit Programs; Expense Reimbursements) to provide that the Executive shall have unlimited paid time off per calendar year beginning January 1, 2021.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

AMENDMENT

In order to give effect to the parties’ agreement to amend the Employment Agreement to provide for unlimited paid time off to the Executive, the Employment Agreement is hereby amended as follows:

Section 1.1 Amendment to Section 3(c) of the Employment Agreement. Pursuant to Section 25 of the Employment Agreement, the parties hereto agree to delete Section 3(c) of the Employment Agreement (Employment Benefit Programs; Expense Reimbursements) in its entirety and replace it with the following:

(c) Employee Benefit Programs; Expense Reimbursements. During the Term of Employment, Executive will be eligible to participate in all employee benefit programs of the Company made available to the Company’s employees generally, as such programs may be in effect from time to time; provided that nothing herein shall prevent the Company from amending or terminating any such programs pursuant to the terms thereof. Executive will be responsible for the same percentage of such group healthcare premiums as applies to other employees generally. The Company will reimburse Executive for any and all necessary, customary and usual business expenses incurred and paid by Executive in connection with Executive’s employment upon presentation to the Company of reasonable substantiation and documentation, and in accordance with, and subject to the terms and conditions of, applicable Company policies. During the Term of Employment, effective January 1, 2021, Executive shall be entitled to unlimited paid time off, to be taken in accordance with the Company’s unlimited paid time off policies in effect from time to time and subject to meeting business demands of the Company. For the avoidance of doubt Executive’s ability to take paid time off is not a form of additional wages for services performed.

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Section 1.2.Amendment to Section 4(g) of the Employment Agreement. Pursuant to Section 25 of the Employment Agreement, the parties hereto agree to delete Section 4(g) of the Employment Agreement (General Provisions) in its entirety and replace it with the following:

(g) General Provisions. (1) Upon any termination of Executive’s employment, Executive shall be entitled to receive the following: (A) any unpaid Base Salary through the date of termination (paid in cash within 30 days, or such shorter period required by applicable law, following the date of termination), (B) any earned but unpaid Annual Bonus relating to the calendar year prior to the year of termination, (C) reimbursement for all necessary, customary and usual business expenses and fees incurred and paid by Executive prior to the date of termination, in accordance with Section 3(c) above (payable in accordance with the Company’s expense reimbursement policy), and (D) vested benefits, if any, to which Executive may be entitled under the Company’s employee benefit plans, including those as provided in Section 3(c) above (payable in accordance with the applicable employee benefit plan), and directors and officers liability coverage pursuant to Section 3(d) for actions and inactions occurring during the Term of Employment, and continued coverage for any actions or inactions by Executive while providing cooperation under this Agreement (collectively, “Accrued Benefits”).

ARTICLE II

MISCELLANEOUS

Section 2.1 Continued Effect. Except as specifically set forth herein, all other terms and conditions of the Employment Agreement shall remain unmodified and in full force and effect, the same being confirmed and republished hereby. In the event of any conflict between the terms of the Employment Agreement and the terms of this Amendment, the terms of this Amendment shall control.

Section 2.2 Counterparts. The parties hereto may sign any number of copies of this Amendment. Each signed copy shall be an original, but all of them together represent the same agreement. Delivery of an executed counterpart of a signature page of this Amendment or any document or instrument delivered in connection herewith by telecopy or other electronic method shall be effective as delivery of a manually executed counterpart of this Amendment or such other document or instrument, as applicable.

Section 2.3Governing Law. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of California.

[Remainder of page intentionally left blank]

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

STAR REIT SERVICES, LLC

By:    ____________________________

Name:    Rodney F. Emery

Title:    Chief Executive Officer

STEADFAST APARTMENT REIT, INC.

By: ________________________________

Name:    Rodney F. Emery

Title:    Chief Executive Officer

STEADFAST APARTMENT REIT OPERATING PARTNERSHIP, L.P.

By: STEADFAST APARTMENT REIT, INC., its general partner

By: ________________________________

Name:    Rodney F. Emery

Title:    Chief Executive Officer

EXECUTIVE

[_________________________________]

EX-99.1

EXHIBIT 99.1

January 14, 2021

Dear Fellow Stockholders:

I am writing to wish you a safe and happy New Year and to provide you with an update on some company initiatives as we look forward to 2021.

2020 was an extraordinary year in many respects. The COVID-19 pandemic has changed the way people work, travel and interact with each other. Some sectors of the U.S. economy have been hit particularly hard which has led to higher unemployment. For many, 2020 was a difficult year physically, mentally and economically. While there is hope with new vaccines, COVID-19 cases continue to increase leading to cities and states re-enacting stay at home orders and eviction moratoriums. Last year was also a difficult year on the political front. Political demonstrations have led to increased fears about personal safety.

Through all of this, our primary focus has been on the safety and well-being of our residents and associates. We offered various forms of payment plans to our residents impacted by the pandemic. We quickly rolled out personal protection equipment to our associates and have implemented best practices for safe interaction among our residents and associates. Finally, we have done our best to ensure that our residents can live in a safe and secure environment.

Last year was also a transformative year for the company. In March 2020, we merged with two other affiliated companies to increase our real estate portfolio to $3.4 billion. At the end of August 2020, we became a self-managed company. We believe these transactions will better position the company for future growth resulting in increased shareholder value. We also benefited from our core investment strategy of owning and operating multifamily homes in middle-America. Many companies with investment strategies of investing in office space, retail space and multifamily homes on the coasts have not weathered the storm as well as we have.

During the early stages of the pandemic, we made a strategic decision to focus on maintaining occupancy levels at our properties in order to stabilize revenue. Looking back, this was a successful strategy. At September 30, 2020, our properties were 97.4% leased. Occupancy rates will continue to be our focus in 2021, with some targeted rent growth where appropriate.

Another key focus for 2021 is maintaining a strong balance sheet with sufficient liquidity so that we may take advantage of investment opportunities as they may arise. Adequate liquidity has become a focus for many companies in these uncertain times. We are therefore implementing two measures that have become commonplace in our industry to achieve this objective.

Beginning February 1, the annualized distribution payment for a share of our common stock will be $0.5250. This is a decrease from the annualized distribution payment of $0.90 per share that we historically paid and will be first reflected in the distribution payment made in early March for the month of February. Our board of directors determined that it is prudent to reduce the distribution payment to ensure sufficient liquidity.

Separately, our board of directors determined to limit the company’s share repurchase plan to instances of death and qualifying disability. This change will be in effect on the next repurchase date at the end of April 2021. Share repurchase requests that don’t meet the requirements of death or qualifying disability will be cancelled (including

any such redemption requests received in the first quarter of 2021). Death and disability requests will be limited to $3 million per quarter.

These changes are being made after careful consideration by our board of directors and are not made lightly. Our board of directors will continue to evaluate our distribution payments and repurchase plan as circumstances change. We understand that these measures could have an economic impact on our investors. However, we believe that these changes are prudent given the current circumstances and are in the best interest of the long-run financial success of the company. If you have any questions about these changes, please feel free to contact Investor Relations at 888-223-9951.

I wish you all a safe and happy 2021 and look forward to providing future updates on our company.

Sincerely,

Rodney F. Emery
Chairman of the Board of Directors