UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
(Rule 14A-101)
INFORMATION
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Four
Corners Property Trust, Inc.
(Name
of Registrant as Specified in Its Charter)
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591
Redwood Highway, Suite 1150
Mill Valley, California 94941
(415) 965-8030
May
1, 2017
Dear
Four Corners Property Trust, Inc. Stockholder:
You
are cordially invited to the Four Corners Property Trust, Inc. 2017 Annual Meeting of Stockholders (the “Annual Meeting”)
to be held on Friday, June 16, 2017, at 2:00 p.m. Eastern Time. The Annual Meeting will be a completely virtual meeting of stockholders.
You will be able to attend the annual meeting, vote and submit your questions during the meeting via live webcast by visiting
www.virtualshareholdermeeting.com/FCPT2017 and entering your unique control number provided in the Notice of Internet Availability
of Proxy Materials described below or the proxy card.
At
the Annual Meeting, you will be asked to (i) elect five directors to our Board of Directors, (ii) ratify the appointment of KPMG
LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017, (iii) approve, on a non-binding
advisory basis, the compensation of our named executive officers, (iv) select, on a non-binding advisory basis, the frequency
with which we will conduct the non-binding advisory vote on executive compensation, and (v) transact such other business as may
properly come before the meeting or any postponements or adjournments thereof. The accompanying Notice of 2017 Annual Meeting
of Stockholders describes these matters.
We
have elected to provide access to our proxy materials on the Internet under the U.S. Securities and Exchange Commission’s
“notice and access” rules. Our proxy materials are available at www.proxyvote.com. We have sent a Notice of Internet
Availability of Proxy Materials to each of our stockholders, providing instructions on how to access our proxy materials, including
this proxy statement and our 2016 Annual Report to Stockholders, on the Internet. Please read the enclosed information carefully
before submitting your proxy.
Please
join us at the virtual Annual Meeting. Whether or not you plan to attend, it is important that you authorize your proxy promptly.
If you do attend the virtual Annual Meeting, you may revoke your proxy by electronically voting during the virtual Annual Meeting.
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Sincerely,
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William H. Lenehan
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President, Chief Executive
Officer and
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Director
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591
Redwood Highway, Suite 1150
Mill Valley, California 94941
(415) 965-8030
NOTICE
OF 2017 ANNUAL MEETING OF STOCKHOLDERS
To
the Stockholders of Four Corners Property Trust, Inc.:
NOTICE
IS HEREBY GIVEN that the 2017 Annual Meeting of Stockholders (the “Annual Meeting”) of Four Corners Property Trust,
Inc., a Maryland corporation, will be held via live webcast at www.virtualshareholdermeeting.com/FCPT2017, on Friday, June 16,
2017, at 2:00 p.m. Eastern Time, for the following purposes:
1.
To consider and vote upon the election of five directors to the Board of Directors to serve until the 2018 Annual Meeting of Stockholders
and until their successors have been duly elected and qualify;
2.
To consider and vote upon the ratification of the appointment of KPMG LLP as our independent registered public accounting firm
for the fiscal year ending December 31, 2017;
3.
To approve, on a non-binding advisory basis, the compensation of our named executive officers;
4.
To select, on a non-binding advisory basis, the frequency with which we will conduct the non-binding advisory vote on executive
compensation; and
5.
To transact such other business as may properly come before the Annual Meeting and any postponements or adjournments thereof.
We
know of no other matters to come before the Annual Meeting. Only stockholders of record at the close of business on Wednesday,
April 19, 2017, are entitled to notice of and to vote at the Annual Meeting or at any postponements or adjournments thereof.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2017 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 16, 2017.
Our Proxy Statement and 2016 Annual Report are available at www.proxyvote.com.
Regardless
of the number of shares of common stock you hold, as a stockholder your role is very important and the Board of Directors strongly
encourages you to exercise your right to vote.
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BY
ORDER OF THE BOARD OF
DIRECTORS
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JAMES L. BRAT
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General Counsel and Secretary
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Dated: May 1, 2017
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Mill Valley, California
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TABLE
OF CONTENTS
591
Redwood Highway, Suite 1150
Mill Valley, California 94941
(415) 965-8030
PROXY
STATEMENT
GENERAL
INFORMATION REGARDING SOLICITATION AND VOTING
General
This
proxy statement will first be made available to stockholders on or about May 1, 2017. This proxy statement is furnished by the
Board of Directors (the “Board”) in connection with its solicitation of proxies for Four Corners Property Trust, Inc.’s
2017 Annual Meeting of Stockholders (the “Annual Meeting”) to be held on Friday, June 16, 2017, at 2:00 p.m. Eastern
Time, via live webcast at www.virtualshareholdermeeting.com/FCPT2017, and any postponements or adjournments thereof. Unless the
context requires otherwise, references in this proxy statement to “we,” “our,” “us” and the
“Company” refer to Four Corners Property Trust, Inc., a Maryland corporation, together with its consolidated subsidiaries.
Pursuant
to rules adopted by the U.S. Securities and Exchange Commission (“SEC”), we have elected to provide access to our
proxy materials via the Internet. Accordingly, we are sending a Notice of Internet Availability of Proxy Materials (the “Notice”)
to our stockholders entitled to notice of and to vote at the Annual Meeting and at any postponement or adjournment thereof. The
Notice is being mailed to stockholders on or about May 1, 2017. Stockholders will have the ability to access the proxy materials
at www.proxyvote.com or request to receive a printed set of the proxy materials by mail or an electronic set of materials by email.
Instructions on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice. In
addition, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing
basis. We believe these rules allow us to provide our stockholders with the information they need, while lowering the cost of
delivery and reducing the environmental impact of our Annual Meeting.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2017 ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 16, 2017.
Our Proxy Statement and 2016 Annual Report to Stockholders are available at www.proxyvote.com.
Certain
of our directors, officers and employees may solicit proxies by telephone, personal contact, or other means of communication.
They will not receive any additional compensation for these activities. In addition, brokers, banks and other persons holding
common stock on behalf of beneficial owners will be requested to solicit proxies or authorizations from beneficial owners. We
will bear all costs incurred in connection with the preparation, assembly and mailing of the proxy materials and the solicitation
of proxies and, upon request, will reimburse brokers, banks and other nominees, fiduciaries and custodians for reasonable expenses
incurred by them in forwarding proxy materials to beneficial owners of our common stock.
No
person is authorized to give any information or to make any representation not contained in this proxy statement, and, if given
or made, you should not rely on that information or
representation as having been authorized by us. The delivery of this proxy
statement does not imply that the information herein has remained unchanged since the date of this proxy statement.
Four
Corners Property Trust, Inc.
We
were formed as a Maryland corporation on July 2, 2015, and on November 9, 2015, Darden Restaurants, Inc. (“Darden”)
completed a separation and spin-off transaction pursuant to which Darden contributed to us select real estate and restaurant assets
in exchange for our shares of common stock, which Darden subsequently distributed to its stockholders on a pro rata basis (the
“Spin-Off”). Our objective is to grow and diversify our portfolio through the acquisition of well-located restaurant
properties with leading restaurant operators and franchisees.
Questions
and Answers Regarding the Annual Meeting
What
is the purpose of the Annual Meeting?
The
purpose of the Annual Meeting is to:
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consider
and vote upon the election of five directors to the Board to serve until the 2018 Annual
Meeting of Stockholders and until their successors are duly elected and qualify (Proposal
One);
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consider
and vote upon the ratification of the appointment of KPMG LLP as our independent registered
public accounting firm for the fiscal year ending December 31, 2017 (Proposal Two);
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consider
and vote to approve, on a non-binding advisory basis, the compensation of our named executive
officers (Proposal Three); and
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consider
and vote to select, on a non-binding advisory basis, the frequency with which we will
conduct the non-binding advisory vote on executive compensation (Proposal Four).
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The
proposals set forth in this proxy statement constitute the only business that the Board intends to present at the Annual Meeting.
The proxy does, however, confer discretionary authority upon the proxy holders named on the proxy card or their substitutes, to
vote on any other business that may properly come before the Annual Meeting. If the Annual Meeting is postponed or adjourned,
the proxy holders can vote your shares on the new meeting date as well, unless you have revoked your proxy.
Who
is entitled to vote at the Annual Meeting?
The
close of business on Wednesday, April 19, 2017, has been fixed as the record date (the “Record Date”) for the determination
of stockholders entitled to receive notice of and to vote at the Annual Meeting. Only stockholders of record as of the close of
business on the Record Date are entitled to receive notice of, to attend, and to vote at the Annual Meeting. On the Record Date,
our outstanding voting securities consisted of 60,022,912 shares of common stock. Each share of common stock is entitled to one
vote. Votes may not be cumulated in the election of directors.
How
do I vote?
If
your shares are registered directly in your name with our transfer agent, Wells Fargo Bank, N.A., you are considered the stockholder
of record with respect to those shares, and the Notice was sent directly to you by us. You may authorize your proxy in the following
ways:
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Via
the Internet by following the instructions provided in the Notice;
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If
you request printed copies of the proxy materials by mail, by filling out the proxy card
included with the materials; or
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By
calling the toll-free number found on the proxy card or the Notice.
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Proxies
authorized properly via one of the methods discussed above will be voted in accordance with the instructions contained therein.
If the proxy is authorized but voting directions are not made, the proxy will be voted “FOR” each of the five director
nominees, “FOR” the ratification of the appointment of KPMG LLP as our independent registered public accounting firm
for the fiscal year ending December 31, 2017, “FOR” the approval of the compensation of our named executive officers,
and “ONE YEAR” for the frequency with which we will conduct the advisory vote on executive compensation.
If
your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the beneficial
owner of shares held in “street name,” and the Notice was forwarded to you by that organization. The organization
holding your account is considered the stockholder of record for purposes of voting at the Annual Meeting. As a beneficial owner,
you have the right to instruct that organization on how to vote the shares held in your account. Those instructions are contained
in a “vote instruction form.” You should instruct your broker or nominee how to vote your shares by following the
voting instructions provided by your broker or nominee.
If
your shares of common stock are held through a broker, bank or other nominee, under applicable rules of the New York Stock Exchange
(the “NYSE”) (the exchange on which our common stock is traded), the brokers will vote your shares according to the
specific instructions they receive from you. If a broker that holds shares of our common stock for a beneficial owner does not
receive voting instructions from that owner, the broker may vote on the proposal if it is considered a “routine” matter
under the NYSE’s rules, including this year’s ratification of the appointment of KPMG LLP as our independent registered
public accounting firm for the fiscal year ending December 31, 2017. Pursuant to the rules of the NYSE, the election of directors,
the non-binding advisory vote on executive compensation and the non-binding advisory vote on the frequency of an advisory vote
on executive compensation are not “routine” matters as to which brokers, banks or other nominees may vote in their
discretion on behalf of clients who have not furnished voting instructions. When a broker, bank or other nominee does not vote
on a particular proposal because that holder does not have discretionary voting power for that particular item and has not received
voting instructions from the beneficial owner, it is referred to as a “broker non-vote.”
How
can I attend the virtual Annual Meeting?
The
Annual Meeting will be held on Friday, June 16, 2017, at 2:00 p.m. Eastern Time via live webcast at
www.virtualshareholdermeeting.com/FCPT2017
.
To enter the live webcast and have the ability to submit questions during the Annual Meeting, please have your unique control
number available, which is provided in the Notice or proxy card. You may vote electronically during the Annual Meeting at www.proxyvote.com
by entering your unique control number and following the instructions.
What
will constitute a quorum at the Annual Meeting?
Presence
in person (by means of remote communication) at the virtual Annual Meeting or by proxy of stockholders entitled to cast a majority
of all the votes entitled to be cast at such meeting constitutes a quorum. If the shares present in person (by means of remote
communication) or by proxy at the Annual Meeting do not constitute a quorum, the Annual Meeting may be adjourned by the chairperson
of the Annual Meeting to a date not more than 120 days after the Record Date without notice other than announcement at the Annual
Meeting. Shares that are voted “FOR,” “AGAINST,” “ONE YEAR,” “TWO YEARS,” “THREE
YEARS” or “ABSTAIN” will be treated as being present at the Annual Meeting for purposes of establishing a quorum.
Accordingly, if you are a stockholder of record as of the Record Date and have returned a valid proxy or attend the virtual Annual
Meeting in person (by means of remote communication), your shares will be counted for the purpose of determining whether there
is a quorum, even if you wish to abstain from voting on some or all matters at the Annual Meeting. “Broker non-votes”
will also be counted as present for purposes of determining the presence of a quorum.
How
many votes are needed for the proposals to pass?
The
proposals to be voted on at the Annual Meeting have the following voting requirements:
Proposal
One:
Pursuant to our bylaws, in an uncontested election, the five director nominees will be elected by a majority of votes
cast. This means that the number of votes “FOR” a director’s election exceeds the number of votes “AGAINST”
the director’s election. Cumulative voting is not permitted. Abstentions and broker non-votes, if any, will not be counted
as votes cast on Proposal One and will have no effect on this proposal. However, under our Bylaws, if a director nominee in an
uncontested election does not receive at least a majority of the votes cast for the election of directors at any meeting at which
a quorum is present, the director must promptly tender his or her resignation to the Board and remain a director until the Board
appoints an individual to fill the office held by such director.
Proposals
Two and Three
: You may vote “FOR,” “AGAINST,” or “ABSTAIN” on Proposals Two and Three.
To be approved, each of Proposals Two and Three must receive the affirmative vote of a majority of the votes cast, in person (by
means of remote communication) or by proxy, at the Annual Meeting on each proposal. Abstentions and broker non-votes, if any,
will not be counted as votes cast on Proposals Two or Three and will have no effect on the result of these votes. While the vote
on Proposal Three is advisory in nature and non-binding, the Board will review the voting results and expects to take them into
consideration when making future decisions regarding the compensation of our named executive officers.
Proposal
Four:
You may vote “ONE YEAR,” “TWO YEARS,” “THREE YEARS” or “ABSTAIN” on
Proposal Four. Abstentions and broker non-votes, if any, will not be counted as votes cast on Proposal Four and will have no effect
on the result of these votes. While the vote on Proposal Four is advisory in nature and non-binding, the Board will review the
voting results and expects to take them into consideration when making future decisions regarding the frequency of an advisory
vote on executive compensation.
What
are the Board’s voting recommendations?
The
Board recommends that you vote as follows:
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“FOR”
each of the five director nominees set forth in Proposal One;
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“FOR”
Proposal Two, relating to the ratification of KPMG LLP as our independent registered
public accounting firm for the fiscal year ending December 31, 2017;
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“FOR”
Proposal Three, relating to the approval of the compensation of our named executive officers;
and
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“ONE
YEAR” for Proposal Four, relating to the selection of the frequency of an advisory
vote on executive compensation.
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Any
properly authorized proxy as to which no instructions are given will be voted in accordance with the foregoing recommendations.
Can
I change my vote after I have voted?
You
may revoke your proxy at any time prior to it being exercised by (i) delivering a written notice of revocation to our Secretary,
(ii) filing a duly executed proxy bearing a later date with us or (iii) electronically voting during the Annual Meeting at www.virtualshareholdermeeting.com/FCPT2017
when you enter your unique control number. If you attend the virtual Annual Meeting in person (by means of remote communication),
you may vote online whether or not you have previously given a proxy, but your attendance (without further action) at the Annual
Meeting will not constitute revocation of a previously given proxy. If you hold your shares through a broker, bank or other nominee
holder, only they can revoke your proxy on your behalf.
PROPOSAL
ONE: ELECTION OF DIRECTORS
The
Board currently has five directors. The five persons named below, each of whom currently serves on our Board, have been recommended
by our Nominating and Governance Committee and nominated by our Board to serve on the Board until our 2018 Annual Meeting of Stockholders
and until their respective successors are elected and qualify. Each of the director nominees has consented to being named in this
proxy statement and to serve as a director if elected. Based on its review of the relationships between the director nominees
and the Company, the Board has determined that all of our directors, other than William H. Lenehan, our President and Chief Executive
Officer, are independent under applicable SEC and NYSE rules.
The
Board has no reason to believe that any of the persons named below as a nominee for our Board will be unable, or will decline,
to serve as a member of the Board if elected. If any nominee is unavailable for election or service, the Board may designate a
substitute nominee and the persons designated as proxy holders on the proxy card will vote for the substitute nominee recommended
by the Board.
Under
the Nominating and Governance Committee’s Director Nomination Protocol, in general, while there are no specific minimum
qualifications for nominees, any candidate for service on the Board should possess the highest personal and professional ethics
and be committed to representing the long-term interests of our stockholders. See “
Corporate Governance—Identifying
and Evaluating Director Nominees
.”
Nominees
for Election as Directors
The
table below sets forth the names and ages of each of the individuals nominated for election at the Annual Meeting, as well as
the positions and offices with us currently held by such individuals.
Name
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Position
With the Company
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Age
as of the
Annual
Meeting
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William
H. Lenehan
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Director,
President and Chief Executive Officer
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40
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Douglas
B. Hansen, Jr.
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Director
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59
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John
S. Moody
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Director,
Chairperson of the Board
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68
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Marran
H. Ogilvie
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Director
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48
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Paul
E. Szurek
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Director
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56
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Board
Nominees
William
H. Lenehan
has served as our President and Chief Executive Officer since 2015 and joined the Board in 2015. Mr. Lenehan is
a real estate industry professional with significant experience in net leased properties and public company corporate governance
matters. Mr. Lenehan served on the board of directors of Darden from October 2014 until he resigned effective as of November 9,
2015 to become our President and Chief Executive Officer. From June 2012 until its sale in late 2014, Mr. Lenehan served as a
special advisor to the board of directors of EVOQ Properties, Inc., the owner of a substantial portfolio of development assets
in downtown Los Angeles, California. Previously, Mr. Lenehan was the Interim Chief Executive Officer of MI Developments, Inc.,
now named Granite REIT, an owner of net leased industrial and manufacturing real estate, where he was a member of their Strategic
Review Committee and was a director. In addition, Mr. Lenehan served on the board of directors for Gramercy Property Trust
Inc.,
a publicly traded net lease real estate investment trust (“REIT”), from January 2012 until December 2015, where he
was Chairman of the Investment Committee, and served on the board of directors of Stratus Properties Inc., a real estate development
company, from May 2012 to May 2015. He also spent approximately 10 years as an investment professional at Farallon Capital Management,
LLC. Mr. Lenehan has served as a director of Macy’s, Inc. (“Macy’s”), a retailer, since April 2016, and
is also a member of the Audit Committee for Macy’s. Mr. Lenehan is a graduate of Claremont McKenna College.
Mr.
Lenehan’s qualifications for election to the Board include his extensive executive experience in the real estate industry,
including his service as our President and Chief Executive Officer, and his leadership, corporate governance and risk management
abilities gained through his experience described above.
Douglas
B. Hansen, Jr.
is a Director and joined the Board in 2015. Mr. Hansen is also the chairperson of our Investment Committee.
Since 2011, Mr. Hansen has served as CEO of Atria Properties, LLC, a commercial real estate brokerage company. Since 2009, Mr.
Hansen has served as President of Resonant Capital, Inc., a business services company. Mr. Hansen is a Founder of Redwood Trust,
Inc. (“Redwood”), a public mortgage REIT, and served as Redwood’s President from 1994 through 2008. Mr. Hansen
currently serves as Vice Chairman of the board of directors of Redwood and has been a director of Redwood since 1994. From 1990
through 1997, he was a Principal with GB Capital. Mr. Hansen holds a Bachelor’s degree in Economics from Harvard College
and a Master of Business Administration degree from Harvard Business School.
Mr.
Hansen’s qualifications for election to the Board include his extensive experience as a director and executive in a number
of companies in the real estate industry, including his experience in relation to corporate governance, executive compensation
and risk management.
John
S. Moody
is the Chairperson of the Board and joined the Board in 2015. Mr. Moody is also the chairperson of our Compensation
Committee. Mr. Moody has been an Independent Director of Potlatch Corporation since September 2006 and currently serves as Lead
Independent Director. Since 2010, he has served as President of Parkside Capital, LLC, a real estate company, which is based in
Houston and is the General Partner and Manager of Parkside Capital Land Fund, LTD. From 2007 through 2009, Mr. Moody served as
President of Proterra Management LLC in Houston, which is the General Partner and Manager of Proterra Realty Fund, LTD. From 2004
through 2005, Mr. Moody served as President and Chief Executive Officer of HRO Asset Management, LLC. From 2001 to 2004, he was
President of Marsh & McLennan Real Estate Advisors, Inc. He has also served as a Director of Huron Consulting Group since
2005, and Hines Global REIT, Inc., a commercial real estate REIT since 2009. From 2000 to 2005, Mr. Moody served on the board
of directors of Equity Office Properties Trust, and from 2004 to 2006, he served on the board of directors of CRIIMI MAE, Inc.,
both of which were publicly traded REITs. Mr. Moody graduated from Stanford University with a Bachelor’s degree and received
his Juris Doctorate with honors from the University of Texas.
Mr.
Moody’s qualifications for election to the Board include his extensive experience as a director and executive in a number
of companies in the real estate industry, including his experience in relation to corporate governance, executive compensation
and risk management.
Marran
H. Ogilvie
is a Director and joined the Board in 2015. Ms. Ogilvie is also the chairperson of our Audit Committee and our
Nominating and Governance Committee. Ms. Ogilvie has served as an Advisor to the Creditors Committee for the Lehman Brothers International
(Europe) Administration since 2008, as a Director of LSB Industries, Inc., a manufacturing company, since 2015, and as a Director
for the Korea Fund, an investment company, since 2012. Ms. Ogilvie served as a Director of Zais Financial Corporation, a REIT,
from 2013 to 2016, as a Director for Southwest Bancorp, a regional commercial bank from 2012 to 2015, and as a Director of Seventy
Seven Energy Inc., an oil field services company, from 2014 to 2016. Prior to that, Ms. Ogilvie was a member of Ramius, LLC, an
alternative investment management firm, where she served in various capacities from 1994 to 2009 before the firm’s merger
with Cowen Group, including as Chief Operating Officer from 2007 to 2009 and General Counsel from 1997 to 2007. Following the
merger, Ms. Ogilvie became Chief of Staff at Cowen Group, Inc. until 2010. Ms. Ogilvie received a Bachelor’s degree from
the University of Oklahoma and a Juris Doctorate from St. John’s University.
Ms.
Ogilvie’s qualifications for election to the Board include her extensive experience as a director and executive in a number
of companies in a variety of industries, including her experience in relation to corporate governance, executive compensation,
risk management and investment analysis.
Paul
E. Szurek
is a Director and joined the Board in 2015. Mr. Szurek has served as the President and Chief Executive Officer of
CoreSite Realty Corporation (“CoreSite”), a publicly traded data center REIT, since September 2016 and as a Director
of CoreSite since September 2010. Prior to becoming President and Chief Executive Officer, he served as Lead Independent Director,
Chair of the Nominating and Governance Committee, and member of the Audit Committee of CoreSite. He served as Chief Financial
Officer of Biltmore Farms, LLC from February 2003 until August 2016, prior to which he was a consultant to Biltmore Farms, LLC
from December 1, 2002. Prior to joining Biltmore, Mr. Szurek served as Chief Financial Officer of Security Capital Group Incorporated.
He has previously served as Director to two publicly-traded real estate companies, Regency Centers from 1996 to 1997 and Security
Capital US Realty from 1995 to 1997. He received a Juris Doctorate with honors from Harvard Law School and a Bachelor’s
degree in Government with high honors from the University of Texas at Austin.
Mr.
Szurek’s qualifications for election to the Board include his extensive experience as a director and executive in a number
of companies in the real estate industry, including his experience as a chief executive officer and managing director of other
publicly-traded real estate companies and his experience in relation to public REIT corporate governance, strategy and operations,
financial and accounting matters, executive compensation and risk management.
THE
BOARD RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES SET FORTH ABOVE.
PROPOSAL
TWO: RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The
Audit Committee of our Board, which is composed entirely of independent directors, has appointed KPMG LLP as the Company’s
independent registered public accounting firm for the fiscal year ending December 31, 2017. KPMG LLP has been our independent
registered public accounting firm since the completion of the Spin-Off. Although stockholder approval is not required, we desire
to obtain from our stockholders an indication of their approval or disapproval of the Audit Committee’s action in appointing
KPMG LLP as the independent registered public accounting firm of the Company for 2017. If our stockholders do not ratify and approve
this appointment, the appointment will be reconsidered by the Audit Committee and our Board.
A
representative of KPMG LLP will be present at our Annual Meeting, where the representative will be afforded an opportunity to
make a statement and to respond to appropriate questions.
THE
BOARD RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2017.
Principal
Accountant Fees and Services
The
following table summarizes the fees billed by KPMG LLP for professional services rendered to us for 2016 and 2015.
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|
2016
|
|
|
2015
|
|
Audit Fees
|
|
$
|
619,495
|
|
|
$
|
428,000
|
|
Audit-Related Fees
|
|
|
—
|
|
|
|
—
|
|
Tax Fees
|
|
|
—
|
|
|
|
—
|
|
All Other Fees
|
|
|
—
|
|
|
|
—
|
|
Total
|
|
$
|
619,495
|
|
|
$
|
428,000
|
|
Audit
Fees
. Audit fees consisted of aggregate fees billed for professional services rendered for the audit of our consolidated annual
financial statements, review of interim consolidated financial statements, consultations on accounting matters directly related
to the audit, or services that are normally provided by the independent registered public accounting firm in connection with statutory
and regulatory filings or engagements, including the issuance of comfort letters related to debt or equity offerings.
Pre-Approval
Policies and Procedures
The
Audit Committee is required to pre-approve all audit and non-audit services performed by our independent registered public accounting
firm. Requests to provide services requiring pre-approval by the Audit Committee are submitted to the Audit Committee with a description
of the services to be provided, the maximum fees to be charged in connection with such services and such other limitations or
other requirements as the Audit Committee may deem appropriate. The Audit Committee pre-approved all services performed by, and
audits fees paid to, our independent registered public accounting firm during fiscal year 2016.
PROPOSAL
THREE: ADVISORY VOTE ON EXECUTIVE COMPENSATION
In
accordance with the requirements of Section 14A of the Securities Exchange Act of 1934 (the “Exchange Act”), we are
presenting this proposal, commonly known as a “say-on-pay” proposal, to provide stockholders the opportunity to vote
to approve, on a non-binding advisory basis, the compensation of our named executive officers as described in this proxy statement.
We
believe our executive compensation policies and procedures are centered on pay-for-performance principles and are closely aligned
with the long-term interests of our stockholders. As described under the heading “
Compensation Discussion and Analysis
,”
our executive compensation program is designed to attract and retain outstanding executives, to reward them for superior performance
and to ensure that compensation provided to them remains competitive. We seek to align the interests of our executives and stockholders
by tying compensation to the achievement of key operating objectives that we believe enhance stockholder value over the long term
and by encouraging executive share ownership so that a portion of each executive’s compensation is tied directly to stockholder
value.
Accordingly,
we ask our stockholders to vote on the following resolution at the Annual Meeting:
RESOLVED,
that the compensation paid to the company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K,
including Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.
While
the vote on this resolution is advisory in nature and therefore will not bind us to take any particular action, our Board intends
to carefully consider the stockholder vote resulting from the proposal in making future decisions regarding the compensation of
our named executive officers.
THE
BOARD RECOMMENDS A VOTE “FOR” APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE
OFFICERS.
PROPOSAL
FOUR: ADVISORY VOTE ON THE FREQUENCY OF AN ADVISORY VOTE ON EXECUTIVE COMPENSATION
In
accordance with the requirements of Section 14A of the Exchange Act, we are presenting this proposal, commonly referred to as
a “say on frequency” proposal, to provide stockholders the opportunity to cast a non-binding advisory vote on how
frequently a “say-on-pay” proposal should be included in our proxy statement. As a stockholder, you may vote to hold
the advisory vote on executive compensation every one, two or three years, or to abstain from voting.
After
careful consideration of this proposal, our Board has determined that an advisory vote on executive compensation that occurs every
year is the most appropriate alternative for the Company. Our Board believes an annual advisory vote is consistent with our philosophy
on executive compensation and will allow stockholders to provide their most direct input on our executive compensation philosophy,
policies and practices as disclosed in the proxy statement each year.
While
this vote is advisory in nature and therefore will not bind us to adopt any particular frequency, our Board intends to carefully
consider the stockholder vote resulting from the proposal and to continue to evaluate the options for how frequently we hold “say-on-pay”
votes.
THE
BOARD RECOMMENDS A VOTE FOR THE “ONE YEAR” ALTERNATIVE FOR THE FREQUENCY OF AN ADVISORY VOTE ON EXECUTIVE COMPENSATION.
CORPORATE
GOVERNANCE
Corporate
Governance Profile
The
Board believes that our corporate governance structure closely aligns the Company’s interests with those of our stockholders.
Notable features of our corporate governance structure that evidence our commitment to good corporate governance include the following:
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we
have an independent chairperson of the Board;
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our
Board is not staggered, with each of our directors subject to re-election annually;
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●
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our
bylaws require that, in an uncontested election, director nominees must be elected by
a majority of votes cast;
|
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●
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of
the five persons who serve on our Board, four, or 80% of our directors, have been determined
by us to be independent for purposes of the NYSE’s corporate governance listing
standards and Rule 10A-3 under the Exchange Act;
|
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●
|
we
have determined that two of our directors qualify as “audit committee financial
experts” as defined by the SEC;
|
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●
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we
have a robust stock ownership policy for our executive officers, including that our CEO
is required to own shares of our common stock equal to at least 6x his annual base salary
and our other executive officers must own shares of our common stock equal to at least
3x their annual base salary. See “—
Stock Ownership Policy
” below
for more information;
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●
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we
have a clawback provision in our equity compensation plan;
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we
prohibit officers, directors and employees from engaging in short sales and hedging of
our securities and from holding our securities in margin accounts or otherwise pledging
our securities as collateral;
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executives
do not receive any perquisites not generally available to all corporate employees;
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we
retain an independent compensation consultant;
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●
|
we
believe transparency in our business activities is important to our stockholders and
we report on acquisitions and dispositions when they occur;
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we
do not currently provide any acquisition or earnings guidance and instead focus on creating
long-term stockholder value;
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we
do not use corporate funds for political or charitable donations (although we encourage
our stockholders to be personally charitable); and
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●
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we
have opted out of the Maryland business combination and control share acquisition statutes,
and we cannot opt back in without approval of at least a majority in voting power of
our outstanding common stock;
|
Our
Board
Our
Board currently consists of five directors. Our charter and bylaws provide that the number of directors constituting our Board
may be increased or decreased by a majority vote of our entire Board, provided the number of directors may not be decreased to
fewer than one, the minimum number required under the Maryland General Corporate Law nor, unless our bylaws are amended, more
than 15 directors.
During
2016, the Board held six meetings. Each member of the Board attended or participated in 75% or more of the aggregate of (i) the
total number of meetings of the Board (held during the period for which such person has been a director) and (ii) the total number
of meetings held by all committees of the Board on which such person served (during the periods that such person served).
There
are no family relationships among our executive officers and directors.
Identifying
and Evaluating Director Nominees.
Our
Nominating and Governance Committee has adopted a Director Nomination Protocol that, together with our Bylaws, describes in detail
the process we use to fill vacancies and add new members to the Board. The Protocol is available at
www.fcpt.com
under
Investor Relations — Corporate Governance, as Appendix A to the Nominating and Governance Committee charter.
In
identifying or selecting nominees for the Board, the Company’s Corporate Governance Guidelines and related Director Nomination
Protocol provide that the Company seeks board members who will bring to the board a deep and wide range of experience in the business
world, and have diverse problem-solving talents. We seek people who have demonstrated high achievement in business or another
field, so as to enable them to provide strategic support and guidance for the Company. Under the Director Nomination Protocol,
in general, while there are no specific minimum qualifications for nominees, any candidate for service on the Board should possess
the highest personal and professional ethics and be committed to representing the long-term interests of our stockholders in a
manner consistent with our core values (integrity and fairness, respect and caring, diversity, always learning—always teaching,
teamwork and excellence). The guidelines further provide that the Company strives to maintain a board that reflects the gender,
ethnic, racial and other diversity of our work force and restaurant guests, and also fosters diversity of thought. The guidelines
further note that recruiting, hiring and nurturing the careers of women and minorities and increasing the diversity of our suppliers
are top priorities, and that the Company also intends to maintain the diversity of its Board.
We
also will consider the candidate’s independence under applicable NYSE listing standards and our Corporate Governance Guidelines.
In identifying and evaluating nominees for the Board, the Board assesses the background of each candidate in a number of different
ways including a wide variety of qualifications, attributes and other factors and recognizes that diverse viewpoints and experiences
enhance the Board’s effectiveness. When reviewing and making initial recommendations on new candidates, the Nominating and
Governance Committee considers
how
each prospective member’s unique background, expertise and experience will contribute to the Board’s overall perspective
and ability to govern.
Candidates
Recommended by Stockholders
. Under the Nominating and Governance Committee’s Director Nomination Protocol, stockholders
may recommend nominees for director to the Nominating and Governance Committee, and the Nominating and Governance Committee will
consider candidates recommended by stockholders. The Nominating and Governance Committee will evaluate nominees recommended by
stockholders in the same manner as those recommended by the Nominating and Governance Committee. Stockholders wishing to submit
recommendations of director candidates for consideration by the Nominating and Governance Committee should send the candidate’s
name and qualification to our Corporate Secretary at 591 Redwood Highway, Suite 1150 Mill Valley, California 94941.
Board
Leadership Structure
The
Company’s Corporate Governance Guidelines provide that the positions of Chairperson of the Board and CEO be held by separate
persons and that the position of Chairperson be held by an independent director. The Board believes that separating the roles
of Chairperson and CEO allows for better alignment of corporate governance with stockholder interests and aids in the Board’s
oversight of management and the Board’s ability to carry out its roles and responsibilities on behalf of the stockholders.
The Board also believes that the separation of the roles of Chairperson and CEO allows the CEO to focus more of his time and energy
on operating and managing the Company and leverages the Chairperson’s experience. The Chairperson presides at all executive
sessions of independent directors. The current Chairperson of the Board is John S. Moody, who has extensive experience as a director
and executive in numerous real estate companies, including several REITs. For more information, see Mr. Moody’s biography
above under “
Proposal One: Election Of Directors
.”
In
the event the Chairperson is not independent, the independent directors will designate one independent director to serve as the
Lead Director until an independent Chairperson is appointed. The Lead Director, if any, will preside at all meetings of the Board
at which the non-independent Chairperson of the Board is not present, including the Board’s executive sessions of independent
directors, and serve as liaison between a non-independent Chairperson of the Board and the independent directors. The independent
Chairperson approves Board meeting agendas, including approving meeting schedules to assure that there is sufficient time for
discussion of all agenda items, and other information sent to the Board, advises the committee chairs with respect to agendas
and information needs relating to committee meetings, and performs other duties as the Board may from time to time delegate to
assist the Board in fulfilling its responsibilities. The Lead Director, if any, will serve for a term as the Board determines
but not less than one year. The independent directors may meet without management present at any other times as determined by
the independent Chairperson or Lead Director, as applicable.
Committees
of the Board of Directors
Our
Board has a standing Audit Committee, Compensation Committee and Nominating and Governance Committee. Each of these committees
must be composed exclusively of independent directors. The Audit Committee must have at least three directors; the Compensation
Committee and Nominating and Governance Committee must each have at least two directors.
Our Board has also established a standing
Investment Committee and may from time to time establish other committees to facilitate the management of the Company.
The
following table is a summary of our committee structure and members on each of our committees:
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Audit
Committee
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|
Compensation
Committee
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Nominating
and
Governance
Committee
|
|
Investment
Committee
|
William
H. Lenehan
|
|
|
|
|
|
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|
John
S. Moody
|
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X
|
|
X
(Chair)
|
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|
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X
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Douglas
B. Hansen, Jr.
|
|
X
|
|
|
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X
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|
X
(Chair)
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Marran
H. Ogilvie
|
|
X
(Chair)
|
|
X
|
|
X
(Chair)
|
|
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Paul
E. Szurek
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|
X
|
|
X
|
|
X
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|
X
|
The
Audit Committee, Compensation Committee, Nominating and Governance Committee and Investment Committee each operate under written
charters adopted by the Board. The charters for the Audit Committee, Compensation Committee and Nominating and Governance Committee
are available on our website at
www.fcpt.com
under Investor Relations — Corporate Governance.
Audit
Committee
The
Audit Committee provides an avenue of communication among management, the independent registered public accounting firm, the corporate
auditors and the board of directors. The primary duties of the Audit Committee are to, among other things:
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meet
periodically with management, the independent auditor and the internal auditor to review
the integrity of the Company’s internal controls over financial reporting, including
the process for assessing risk of fraudulent financial reporting and detection of material
control weaknesses;
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●
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review
and discuss the Company’s annual audited and quarterly financial statements, including
reviewing the Company’s specific disclosures under “Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” prior to filing
or distribution of the Company’s Annual Report on Form 10-K or Quarterly Report
on Form 10-Q, as applicable;
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●
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review
with financial management and the independent auditor the Company’s quarterly and
year-end financial results prior to the public release of earnings;
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●
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review
major issues regarding accounting principles and financial statement presentations, including
any significant changes in the Company’s selection or application of accounting
principles, and major issues as to the adequacy of the Company’s internal controls
over financial reporting;
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directly
appoint, retain, compensate, oversee, evaluate and terminate the Company’s independent
auditor;
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review
and discuss with the independent auditor any audit problems or difficulties encountered
during the course of the audit and management’s response thereto;
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pre-approve
all non-audit services to be performed by the independent auditor in accordance with
the policy regarding such pre-approval adopted by the Audit Committee;
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at
least annually, consider the independence of the independent auditor, including a review
of any significant engagements of the independent auditor and all other significant relationships
with the auditor that could impair its independence, and evaluate the independent auditor’s
qualifications, performance and independence;
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meet
with the independent auditor prior to the audit to review its audit plan, including staffing,
the scope of its audit and general audit approach;
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oversee
our internal audit function, including make certain that we maintain an internal audit
function that reports to the Audit Committee and provides management and the Audit Committee
with ongoing assessments of the Company’s risk management process and system of
internal control and review any significant reports to management prepared by the internal
auditor; and
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●
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oversee
the Company’s enterprise risk management process.
|
The
Board has determined that each member of the Audit Committee is independent under the independence requirements set forth by the
SEC, in the NYSE listing requirements and the Audit Committee charter. The Board has determined that each member of the Audit
Committee is financially literate in accordance with the NYSE listing requirements and that Mr. Szurek and Ms. Ogilvie are each
an “audit committee financial expert” under applicable SEC rules and regulations. The Audit Committee met eight times
in 2016.
Nominating
and Governance Committee
The
primary responsibilities of the Nominating and Governance Committee are to, among other things:
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identify
individuals qualified to become members of our Board, consistent with criteria approved
by our Board, and recommend to our Board a slate of director nominees for the next annual
meeting of stockholders;
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oversee
the evaluation process of the Board and provide advice regarding Board succession;
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recommend
to the Board membership for each committee of the Board;
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provide
oversight of the risks associated with the Nominating and Governance Committee’s
other purposes and responsibilities;
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review
the appropriate size, function and needs of the Board;
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annually
review the composition of the Board for skills and characteristics focused on the governance
and business needs and requirements of the Company and the qualifications and independence
of the members of the Board and its various committees; and
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recommend
to our Board certain corporate governance matters and practices.
|
The
Board has determined that each member of the Nominating and Governance Committee is independent under applicable NYSE rules. The
Nominating and Governance Committee met four times in 2016.
Compensation
Committee
The
primary responsibilities of the Compensation Committee are to, among other things:
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annually
review and approve corporate goals and objectives relevant to the President and Chief
Executive Officer’s compensation, evaluate the President and Chief Executive Officer
in light of those goals and objectives and make recommendations to the other independent
directors who will, together with the Compensation Committee, determine and approve the
President and Chief Executive Officer’s compensation;
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●
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review
and approve compensation of and compensation policy for the executive officers;
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●
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annually
review and approve the objective performance measures and the performance targets for
executive officers participating in the Company’s long-term incentive plans and
certify the performance results under such measures and targets;
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●
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review
and make recommendations to our Board, as appropriate, regarding employment agreements,
severance arrangements and plans and change in control arrangements for the President
and Chief Executive Officer and executive officers;
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●
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to
the extent required, review and discuss the Company’s compensation discussion and
analysis (“CD&A”) with management and make recommendations to the Board
regarding whether to include such CD&A in the Company’s proxy statement and
Annual Report on Form 10-K;
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●
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to
the extent required, prepare the compensation committee report for inclusion in the Company’s
proxy statement;
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●
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review
the results of any stockholder advisory vote on compensation;
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oversee
the annual review of our compensation policies and practices for all employees;
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●
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provide
oversight of risks associated with the Compensation Committee’s responsibilities
under its charter; and
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●
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administer,
or delegate, as appropriate, our various employee benefit programs.
|
The
Compensation Committee makes compensation decisions for our executive officers after careful review and analysis of appropriate
performance information and market compensation data. The Compensation Committee determines the compensation for the Chief Executive
Officer. The Chief Executive Officer provides recommendations to the Compensation Committee on the compensation for each executive
officer other than himself. The Chief Executive Officer does not make recommendations with respect to his own compensation. The
Chief Executive Officer’s recommendations for the other executive officers are based on his personal review of their performance,
job responsibilities, and importance to our overall business strategy. Although the Chief Executive Officer’s recommendations
are given significant weight, the Compensation Committee retains full discretion when determining compensation for all executive
officers.
Under
its charter, the Compensation Committee has the power to delegate the approval of grants to non-executive officers of stock options,
restricted stock, restricted stock units and other equity awards under the Four Corners Property Trust, Inc. 2015 Omnibus Incentive
Plan, as amended (the “2015 Plan”). The Compensation Committee delegated such authority with respect to non-executive
officers to our President and Chief Executive Officer in February 2016. The Compensation Committee has the power under its charter
to delegate its authority to subcommittees if determined by the Compensation Committee to be necessary or advisable. The Compensation
Committee has not delegated its authority to subcommittees.
For
fiscal year 2016, the Compensation Committee engaged the services of Semler Brossy Consulting Group (“Semler Brossy”),
an executive compensation consultant, to provide advice and counsel in carrying out its duties. Semler Brossy provided the Compensation
Committee with market data on executive pay practices and levels, and provided recommendations regarding the structure of executive
employment arrangements, pay opportunities and equity based incentives.
The
Compensation Committee has the sole authority to approve the compensation consultant’s fees and terms of its engagement.
The Compensation Committee has reviewed its relationship with Semler Brossy to ensure that it believes that Semler Brossy is independent
from management. This review process includes a review of the services Semler Brossy provides, the quality of those services,
and fees associated with the services during the fiscal year, as well as consideration of the factors impacting independence that
are set forth in NYSE rules.
The
Board has determined that each member of the Compensation Committee meets the independence requirements set forth by the SEC and
in the NYSE listing requirements and the Compensation Committee charter. The Compensation Committee met ten times in 2016.
Investment
Committee
The
primary responsibilities of the Investment Committee are to, among other things:
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|
adopt
investment policies for the Company and review such policies to determine that such policies
are in the best interests of the Company’s stockholders;
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●
|
review
information provided by management regarding certain potential acquisitions, dispositions,
significant lease extensions, significant capital investments and real estate financing
arrangements, and convene with management as needed to discuss and assess such opportunities;
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●
|
when
appropriate, after review of management’s proposal, recommend to the Board approval
of certain proposed acquisitions, dispositions, significant lease extensions, significant
capital investments or real estate financing arrangements, provided always that such
transaction falls within the Company’s strategy (previously approved by the Board)
or, if not, the Investment Committee should explain the exception within their recommendation;
|
|
●
|
review
and provide oversight regarding the management and performance of the Company’s
assets; and
|
|
●
|
evaluate
the investment performance of the Company’s portfolio based on benchmarks that
the Board or the Investment Committee may select.
|
The
Investment Committee met eleven times in 2016.
Board
Oversight of Risk Management
The
ultimate responsibility for risk oversight rests with the Board. The Board assesses major risks facing the Company and reviews
options for their mitigation. Our Corporate Governance Guidelines provide that the Board may delegate primary responsibility for
oversight of specific risks to the committees of the Board.
The
Compensation Committee: (i) provides oversight of the risks associated with the responsibilities in its charter; (ii) reviews
our incentive and other compensation arrangements to confirm that compensation does not encourage unnecessary or excessive risk
taking and review and discuss, at least annually, the relationship between risk management policies and practices, corporate strategy
and executive compensation; (iii) participates at least annually in a joint meeting with the Audit Committee to oversee management’s
risk assessment of the Company’s compensation policies and practices; and (iv) discusses with the Company’s management
any disclosures required by Item 402(s) of Regulation S-K relating to the Company’s compensation risk management.
The
Nominating and Governance Committee is responsible for assessing the Board’s role in risk oversight and recommending appropriate
disclosures for approval by the Board. In addition, the Nominating and Governance Committee oversees risks related to the Company’s
corporate governance, director succession planning, political and charitable contributions, insider trading and reputational risk
to the extent such risk arises from the topics under discussion.
The
charter for the Audit Committee requires, among other responsibilities, that it reviews the integrity of our internal controls
over financial reporting, including the process for assessing risk of fraudulent financial reporting and detection of material
control weaknesses. The Audit Committee also reviews significant financial risk exposures, including off-balance sheet financing,
if any, and the steps management has taken to monitor and report such exposures. The Audit Committee also oversees the Company’s
enterprise risk management process and evaluates the policies and practices developed and implemented by management with respect
to risk assessment and risk management.
The
Board believes that the composition of its committees, and the distribution of the particular expertise of each committee’s
members, makes this an appropriate structure to effectively monitor the risks discussed above.
Corporate
Governance Guidelines
The
Board has adopted a set of governance guidelines, the Four Corners Property Trust, Inc. Corporate Governance Guidelines, which
are designed to promote the continued vitality of the Board and excellence in the execution of its duties. Our Corporate Governance
Guidelines establish the practices and procedures of the Board with respect to director responsibilities, Board composition and
member selection, Board independence, Board meetings and involvement of senior management, management succession planning, related
party transactions, communications between directors and stockholders, Board committees, and the evaluation of senior management
and the Board. The Board reviews our Corporate Governance Guidelines at least annually and updates them as necessary to reflect
improved corporate governance practices and changes in regulatory requirements. A copy of the Corporate Governance Guidelines
is available on our website at
www.fcpt.com
.
Code
of Ethics
Our
Code of Business Conduct and Ethics applies to all of our employees, including our principal executive officer, principal financial
officer, controller and our other officers. The Code of Business Conduct and Ethics sets forth our policy to operate within the
letter and spirit of all applicable laws and regulations, while conducting our business with regard to our core values of integrity
and fairness, respect and caring, diversity, teamwork and excellence. A copy of the Code of Business Conduct and Ethics is available
on our website at
www.fcpt.com
under Investor Relations — Corporate Governance. We intend to disclose any changes
in or waivers from the Code of Business Conduct and Ethics that are required to be disclosed by posting such information on our
website.
Prohibition
on Short Sales, Hedging, Pledging and Margin Accounts
Our
Insider Trading Policy prohibits our officers, directors and all other employees from (i) engaging in short sales, (ii) buying
or selling put or call positions or other derivative securities based on our securities, (iii) buying financial instruments designed
to hedge or offset any decrease in the market value of our securities, and (iv) frequent trading of our securities to take advantage
of fluctuations in share price. In addition, all of our officers and directors are prohibited from holding out securities in margin
accounts or otherwise pledging our securities as collateral.
Stock
Ownership Policy
We
have a robust stock ownership policy for our named executive officers. Our CEO is required to own shares of our common stock or
common stock equivalents that have a market value equal to at least six times his annual base salary and our other named executive
officers must own shares of our common stock or common stock equivalents that have a market value equal to at least 3 times their
annual base salary. Under the stock ownership policy, a named executive officer must hold 50% of any net after tax shares issued
to him or her until he or she achieves the required stock ownership level. In addition to stock granted to directors and executive
officers for
compensation, all of our directors and executive officers have purchased shares of our common stock with personal
funds.
Communications
with the Board
Any
stockholder or other interested party may contact the Board, including any non-employee director or the non-employee directors
as a group, or the Chairperson by writing to our Corporate Secretary at 591 Redwood Highway, Suite 1150 Mill Valley, California
94941. In general, any stockholder communication delivered to our Corporate Secretary for forwarding to the Board, the Chairperson
or a specified group of Board members will be forwarded in accordance with the stockholder’s instructions. However, our
Corporate Secretary reserves the right not to forward to Board members any abusive, threatening or otherwise inappropriate materials.
Attendance
of Directors at Annual Meetings of Stockholders
While
we do not have a formal policy requiring our directors to attend stockholder meetings, directors are invited and encouraged to
attend all meetings of stockholders. All five directors attended the virtual 2016 Annual Meeting of stockholders held on June
16, 2016.
Compensation
Committee Interlocks and Insider Participation
No
member of the Compensation Committee is or has ever been an executive officer of the company, and no member of the Compensation
Committee had any relationships requiring disclosure by us under the SEC’s rules requiring disclosure of certain relationships
and related-party transactions. None of our executive officers served on any compensation committee (or its equivalent) of any
other entity, the executive officers of which served as a director of the Company or a member of our Compensation Committee.
AUDIT
COMMITTEE REPORT
The
Audit Committee (the “Audit Committee”) of the Board of Directors (the “Board”) of Four Corners Property
Trust, Inc. (the “Company”) assists the Board with its oversight responsibilities regarding the Company’s financial
reporting process. The Company’s management is responsible for the preparation and presentation of the Company’s consolidated
financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and the integrity of
the reporting process, including the Company’s accounting policies, internal audit function, internal control over financial
reporting and disclosure controls and procedures. KPMG LLP, the Company’s independent registered public accounting firm,
is responsible for performing an audit of the Company’s financial statements and for expressing an opinion on the conformity
of the consolidated financial statements with GAAP. In addition, in accordance with Section 404 of the Sarbanes-Oxley Act of 2002,
the Audit Committee reviewed and discussed with management, the company’s internal auditors and KPMG, management’s
report on the operating effectiveness of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley
Act, including KPMG’s related report and attestation.
With
regard to the fiscal year ended December 31, 2016, the Audit Committee (i) reviewed and discussed with management our audited
consolidated financial statements as of December 31, 2016, and for the year then ended; (ii) discussed with KPMG LLP, the independent
auditors, the matters required by the applicable professional auditing standards and regulations adopted by
the Public Company
Accounting Oversight Board (“PCAOB”); (iii) received the written disclosures and the letter from KPMG LLP required
by applicable requirements of the PCAOB regarding KPMG LLP’s communications with the Audit Committee regarding independence;
and (iv) discussed with KPMG LLP their independence. Based on the foregoing, the Audit Committee has satisfied itself as to the
independence of KPMG.
Based
on the review and discussions described above, the Audit Committee recommended to our Board that our audited financial statements
be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, for filing with the Securities and
Exchange Commission.
The
Audit Committee:
Marran
H. Ogilvie, Chairperson
John
S. Moody
Douglas B. Hansen, Jr.
Paul E. Szurek
The
Audit Committee Report above does not constitute “soliciting material” and will not be deemed “filed”
or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, that might incorporate SEC filings by reference, in whole or in part, notwithstanding anything to the
contrary set forth in those filings.
COMPENSATION
COMMITTEE REPORT
The
Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of Four
Corners Property Trust, Inc. (the “Company”) reviews and discusses the Company’s compensation discussion and
analysis (“CD&A”) required by Item 402(b) of Regulation S-K with management and makes recommendations to the Board
regarding whether to include such CD&A in the Company’s proxy statement and Annual Report on Form 10-K.
The
Compensation Committee has reviewed and discussed the CD&A with management. Based on such review and discussions, the Compensation
Committee recommended to the Board that the CD&A be included in the Company’s proxy statement for the Company’s
2017 annual meeting of stockholders, and incorporated by reference into the Company’s Annual Report on Form 10-K for the
year ended December 31, 2016.
The
Compensation Committee:
John
S. Moody, Chairperson
Marran
H. Ogilvie
Paul
E. Szurek
The
Compensation Committee Report above does not constitute “soliciting material” and will not be deemed “filed”
or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, that might incorporate SEC filings by reference, in whole or in part, notwithstanding anything to the
contrary set forth in those filings.
2016
DIRECTOR COMPENSATION
The
director compensation policy provides that each non-employee director will receive (i) a base annual cash retainer of $50,000
and (ii) an annual award of $65,000 in restricted stock units (“RSUs”) of the Company, which will vest quarterly over
a one-year period. Each new member of the Board, upon being appointed to the Board, shall receive an award of RSUs prorated to
the annual grant date of the director awards. Each non-employee director will receive an award of dividend equivalent rights (“DERs”)
with respect to each RSU granted to the director for all dividends and distributions in cash, shares of the Company’s common
stock or other property which are paid on one share of the Company’s common stock, and all such DERs will be deemed to be
reinvested in additional RSUs as of the payment date for such dividend or distribution. Each additional RSU that results from
such deemed reinvestment of DERs will be subject to the same terms and conditions (including vesting) as the underlying RSU. Each
non-employee director may (but is not required to) elect to defer the receipt of shares of the Company’s common stock that
would otherwise be payable upon vesting of the RSU, including annual RSU awards and any additional RSUs received as a result of
the deemed reinvestment of DERs, in accordance with procedures as may be established by the Compensation Committee.
Under
the director compensation policy, the non-executive Chairperson of the Board or lead independent director, if appointed, will
receive an additional cash retainer of $25,000, payable in quarterly installments, in arrears, and an annual award of $25,000
in RSUs, which will vest quarterly over a one-year period. The chairpersons of the Audit Committee, Compensation Committee, Nominating
and Governance Committee and Investment Committee of the Board will receive additional annual cash retainers as follows: $15,000
to the Chairperson of the Audit Committee; $10,000 to the Chairperson of the Compensation Committee; and $7,500 to the Chairperson
of the Nominating and Governance Committee and the Investment Committee, each payable in quarterly installments, in arrears.
Non-employee
directors may elect to receive all or a portion of any annual cash retainer (including cash retainers for service as chairperson
of any committee or for service as non-executive Chairperson of the Board or lead independent director) in fully vested RSUs.
Each non-employee director will receive an award of DERs with respect to each such RSU granted to the director in lieu of his
or her annual cash retainer. Each non-employee director may (but is not required to) elect to defer the receipt of shares of the
Company’s common stock that would otherwise be payable upon vesting of any such RSUs in accordance with procedures as may
be established by the Compensation Committee. The Company will also reimburse each of the directors for his or her out-of-pocket
expenses incurred in connection with the performance of Board duties.
The
following table presents information regarding the compensation earned in 2016 by non-employee directors who served on the Board
during the year. The compensation paid to Mr. Lenehan is presented below in the section entitled “
Executive Compensation—2016
Summary Compensation Table.
” Mr. Lenehan does not receive any compensation for his services as a member of the Board.
Name
|
|
Fees
Earned
or Paid
in Cash ($)
|
|
|
Stock
Awards
($)(1)
|
|
|
Total ($)
|
|
John S. Moody
|
|
|
85,000
|
|
|
|
90,000
|
|
|
|
175,000
|
|
Douglas B. Hansen, Jr.
|
|
|
57,500
|
|
|
|
65,000
|
|
|
|
122,500
|
|
Marran H. Ogilvie
|
|
|
61,250
|
|
|
|
65,000
|
|
|
|
126,250
|
|
Paul E. Szurek
|
|
|
61,250
|
|
|
|
65,000
|
|
|
|
126,250
|
|
(1)
Amounts reported in fiscal 2016 include the aggregate grant date fair value of the RSUs granted to the non-employee directors
in 2016, each calculated in accordance with FASB ASC Topic 718. The RSUs were granted at a value equal to the five-day average
closing market price of our common stock on the date of grant and will be settled in stock following vesting. As of December 31,
2016, the non-employee directors held the following number of RSUs: Mr. Moody, 4,511 RSUs; Mr. Hansen, 3,258 RSUs; Ms. Ogilvie,
6,036 RSUs; and Mr. Szurek, 6,036 RSUs.
EXECUTIVE
OFFICERS
The
following table sets forth certain information regarding our executive officers.
Name
|
|
Position
With the Company
|
|
Age
|
William
H. Lenehan
|
|
President
and Chief Executive Officer
|
|
40
|
Gerald
R. Morgan
|
|
Chief
Financial Officer
|
|
54
|
James
L. Brat
|
|
General
Counsel and Secretary
|
|
46
|
Please
see “
Proposal One: Election of Directors—Directors
” starting on page 5 for information regarding William
H. Lenehan.
Gerald
R. Morgan
has served as our Chief Financial Officer since 2015. Before joining the Company, from 2012 to 2015, Mr. Morgan
was a Managing Director of Amstar Advisers, a private real estate investment manager that acquires, manages and develops industrial,
office, multifamily and retail properties in select U.S. and international markets and served on Amstar’s Executive and
Investment Committees. From 2010 to 2011, Mr. Morgan was the Managing Director of Financial Strategy and Planning for Prologis,
a global industrial REIT, where he was involved in the company’s capital markets and M&A activities. Prior to Prologis,
Mr. Morgan was President and CFO of American Residential Communities. In addition, Mr. Morgan has served as a senior officer with
Archstone, which was a national public apartment REIT before it was sold, and as the CFO of Francisco Partners, a technology-focused
private equity fund. Mr. Morgan obtained a B.S. in Mechanical Engineering and a Master of Business Administration degree from
Stanford University.
James
L. Brat
has served as our General Counsel and Secretary since 2015. Before joining the Company, Mr. Brat was a partner in
the real estate department at the law firm of Pircher, Nichols & Meeks where he practiced from 1998 until he became our General
Counsel and Secretary. Mr. Brat received his B.A. in German from Macalester College and his Juris Doctorate from UCLA School of
Law.
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Introductory Note
This section summarizes the material components of our
executive compensation program for our named executive officers. Each of our executives described above in the section entitled
“
Executive Compensation
” was a named executive officer for 2016.
Overview of Company Performance during 2016
2016 was a year of significant accomplishment for the
Company. It was our first full year as a stand-alone, public company following our spin-off from Darden Restaurants, Inc., which
occurred on November 9, 2015. In 2016, we made substantial progress in building out our team and executing on our strategic plan,
which includes growing and diversifying our property portfolio. More specifically, we accomplished the following during 2016 while
delivering a total stockholder return of 33.8% from January 1, 2016 through December 31, 2016:
|
●
|
Created a team-oriented culture that we believe will
provide a competitive advantage over the long term;
|
|
●
|
Designed a framework for accretive investing that can
be conveyed clearly both internally and externally;
|
|
●
|
Established an acquisition process, including recruiting
and training an acquisition team;
|
|
●
|
Conducted significant investor outreach, which resulted
in a stockholder base that is consistent with a large-cap REIT and supportive of an advantageous cost of capital;
|
|
●
|
Installed systems and processes that resulted in obtaining
Section 404 Certification under the Sarbanes-Oxley Act upon the filing of our 10-K for the 2016 Fiscal Year;
|
|
●
|
Established and implemented a comprehensive enterprise
risk matrix;
|
|
●
|
Disposed of two restaurant properties for a gross sales
price of $24.8 million, representing a weighted average capitalization rate of 4.8%, and used the proceeds in 1031 Exchanges to
acquire multiple restaurants with going-in cash capitalization rates of 6.5-6.6%;
|
|
●
|
Tightly managed overhead costs resulting in industry
low whole-dollar general and administrative expenses that were below budget;
|
|
●
|
Engaged in 13 acquisition transactions for a total
investment of $94.1 million in our leasing portfolio representing 59 properties and 13 brands, including Burger King, Taco Bell,
Pizza Hut and KFC;
|
|
●
|
Broadened access to capital by establishing a $150
million At-The-Market (ATM) stock offering program on December 5, 2016;
|
|
●
|
Restructured operating partnership in order to permit
OP Unit transactions and acquired 10 properties in 2016 using such structure; and
|
|
●
|
Laid groundwork for investment grade rating (which
we received in early 2017 from Fitch Ratings), which facilitates bond financing.
|
Compensation Philosophy and Objectives
Our compensation program is a pay for performance model
based upon the philosophy that we should incentivize our named executive officers to improve our financial performance, profitably
grow our business, and increase stockholder value, and reward them only if they attain these objectives. More specifically, our
program is designed to support and reward executive officers for the effective stewardship of our existing asset base, accretive
acquisitions to increase that asset base, efficiency in our operations, raising and use of capital to reduce the cost of capital
for such acquisitions, and, over time, profitable growth of the business. As such, a large portion of each named executive officer’s
compensation package consists of short-term and long-term incentive awards that pay out only upon the achievement of corporate
and individual performance objectives, including equity awards that are linked to increases in stock value over time. Our compensation
program does not reward our named executive officers for the mere accumulation of additional properties. Rather, the performance
objectives established by the Compensation Committee are designed to reward our executives for the successful execution of our
acquisition strategy, which entails growing and diversifying our existing restaurant portfolio with the purchase of nationally
recognized branded restaurants that are well located and have creditworthy tenants whose operating cash flow are expected to meaningfully
exceed their lease payments to us.
Our compensation program is designed to accomplish the
following key objectives:
|
1.
|
Attract and engage effective executive officers who
create long-term value for our stockholders;
|
|
2.
|
Align the long-term interests of our executive officers
with the interests of the Company and our stockholders;
|
|
3.
|
Reward financial and operating performance and leadership
excellence; and
|
|
4.
|
Motivate executives to remain at the Company for the
long-term.
|
To align with these objectives, we compensate our named
executive officers using a combination of the following components: (i) base salary, (i) annual incentive compensation (payable
in cash up to target awards, and then in shares for any above target awards, (iii) long-term equity incentive compensation, and
(iv) broad-based health and welfare benefits that are made available to all of our employees.
The following charts illustrate the target mix between
compensation elements for our Chief Executive Officer (“CEO”) and the average target mix of our other named executive
officers. For our CEO and other named executive officers, a significant portion (56% and 46%, respectively) of their total target
compensation is at-risk, performance-based compensation (i.e., the annual incentive bonus and performance-based restricted stock).
For our CEO and other named executive officers, a significant portion (57% and 35%, respectively) of their total target compensation
is allocated to long-term equity incentive pay subject to various performance and vesting criteria, while the remaining portion
is cash-based, further enhancing our named executive officers’ alignment with our stockholders. In comparison with our peers,
this results in the cash portion of the compensation being more modest and the equity portion of the total compensation being more
performance based.
Checklist of Compensation Practices
Highlighted below are certain compensation practices
that we have used and others that we have avoided because we believe doing so is in the best interests of our stockholders:
|
●
|
Pay for Performance
. A significant portion
of each named executive officer’s total target compensation is at-risk and can only be earned based on the achievement of
certain pre-established performance criteria. Our performance-based restricted stock awards, which constitute 60% of the long-term
incentive compensation awards that we grant to our named executive officers, are earned based on the Company’s total stockholder
return relative to the total stockholder returns of the companies in a comparison group of similarly situated companies over a
three-year performance period. Our annual incentive compensation program does not reward the mere accumulation of additional properties
but rather is designed to reward our executives for growing and diversifying our existing restaurant portfolio with the purchase
of nationally recognized branded restaurants that are well located and have creditworthy tenants.
|
|
●
|
Stock Ownership Requirements
. We have
ownership requirements in place for the CEO and other named executive officers, as well as for our non-employee directors.
|
|
●
|
Clawback of Equity-Based Compensation
.
Equity awards granted to our named executive officers are subject to clawback in specified circumstances, including if there is
a restatement of our financial statements due to fraud in which the executive participated.
|
|
●
|
No Single-Trigger Change in Control Provisions
.
Upon a change in control in which equity awards are being assumed or continued, a qualified termination must occur for the awards
to accelerate.
|
|
●
|
No Gross-Ups
. We do not have any arrangements
requiring us to gross-up compensation to cover taxes owed by the executives, including excise taxes payable by an executive in
connection with a change in control.
|
|
●
|
No Dividends Paid on Unvested Performance-Based
Restricted Stock Awards
. Dividends on shares of performance-based restricted stock are reinvested in additional shares,
which will not be issued to the executive unless and until the underlying restricted shares become earned and vested.
|
|
●
|
No Executive Perquisites
. We do not provide
any supplemental executive retirement plans, company cars, club memberships or other executive perquisites. The only perquisite
is a membership for a gym, which is offered to all corporate employees.
|
|
●
|
No Hedging or Pledging of Company Stock
.
Our Insider Trading Policy prohibits our officers, directors and other employees from engaging in hedging and pledging activities.
|
|
●
|
Independent Compensation Consultant
.
The Compensation Committee retains an independent compensation consultant to review and provide input to our executive compensation
programs and practices.
|
Compensation Determination Process
Role of the Compensation Committee
The Compensation Committee makes compensation decisions
for our named executive officers after careful review and analysis of performance information and market compensation data. The
Compensation Committee annually reviews and approves the corporate goals and objectives relevant to the compensation of the CEO,
evaluates the CEO’s performance in light of such goals and objectives, and makes recommendations to the other independent
directors on our Board who will, together with the Compensation Committee, determine and approve the CEO’s compensation,
including the annual base salary level, annual cash bonus opportunity level, and long-term incentive compensation based on this
evaluation. In evaluating and recommending the total compensation opportunity for the CEO (including the long-term incentive component),
the Compensation Committee may consider a number of factors, including, but not limited to, the Company’s performance and
relative stockholder return, compensation opportunities (including the value of equity incentives) of chief executive officers
at comparable companies, and historical
opportunities and outcomes for the CEO (including prior equity grants). The CEO is not
present during any Compensation Committee deliberations or voting with respect to his compensation.
The Compensation Committee also annually reviews and
approves the compensation of and compensation policy for our other named executive officers, and evaluates the performance of such
officers before approving their annual base salary level, annual cash bonus opportunity level, and long-term incentive compensation.
Role of CEO in Compensation
Decisions
The CEO provides recommendations to the Compensation
Committee on the compensation for each named executive officer other than himself. The CEO does not make recommendations with respect
to his own compensation. The CEO’s recommendations for the other executive officers are based on his personal review of their
performance, job responsibilities, and importance to our overall business strategy. Although the CEO’s recommendations are
given significant weight, the Compensation Committee retains full discretion when determining compensation for all named executive
officers.
Role of the Compensation Consultant
In 2015 and 2016, the Compensation Committee engaged
Semler Brossy as an independent compensation consultant to advise it on matters related to the compensation of our executive officers,
including assisting it in developing a new executive compensation program, the elements of which are described in this Compensation
Discussion and Analysis, and compensation of our directors. The role of the compensation consultant is to serve as an objective
third-party advisor to the Compensation Committee on compensation arrangements, assessing reasonableness of compensation levels
in comparison with those of similarly situated companies and the appropriateness of the compensation program structure in supporting
the Company’s strategic objectives. The compensation consultant reports directly to the Compensation Committee and the Compensation
Committee may replace the compensation consultant at any time. In 2016, Semler Brossy supported the Compensation Committee by (i)
attending Compensation Committee meetings, (ii) providing advice on the development of a new executive compensation program for
the Company in its first full year as a stand-alone, public company, including equity plan designs and compensation governance
policies, (iii) preparing and presenting analyses on compensation levels, including competitive assessments of the Company’s
practices and policies and (iv) assisting the Company in preparing compensation-related materials and disclosure as requested by
the Company. Semler Brossy provided no other services to and received no other fees or compensation from the Company.
In 2016, the Compensation Committee considered Semler
Brossy’s independence and the existence of potential conflicts of interest with Semler Brossy, including by considering the
factors prescribed by the NYSE listing rules and SEC rules. Based on such evaluation, the Compensation Committee determined that
no conflict of interest exists.
Use of Benchmarking and Peer
Group Data
The Compensation Committee uses peer group data as one
tool in assessing and determining pay for our named executive officers, with secondary testing to a broader pay survey focused
on the real estate industry. Competitive market data is intended to provide a framework for current
market pay practices, trends,
best practices, and overall industry performance. We believe this use of peer company data is consistent with how stockholders
and proxy advisory firms use such data. However, over reliance on market data can provide an incomplete picture, and therefore
we also factor in an individual’s personal contributions to the organization, unique qualifications and skills sets, the
particular circumstances of our Company at this time, and ultimately strive to create compensation magnitudes that are appropriate
for the risk profile of our Company today and over the longer-term.
The Compensation Committee has retained Semler Brossy
to, among other things: (1) assist in benchmarking our executive compensation against our peers; and (2) analyze trends in compensation
in the marketplace, generally, and specific compensation program design changes among our peers, more specifically.
In 2016, with recommendations from Semler Brossy, the
Compensation Committee selected the companies to be included in our peer group based on a number of factors, including company
size (particularly enterprise value and assets), business focus, complexity of operations, and geographic reach. The Compensation
Committee, with advice from Semler Brossy, will annually review our peer group and may update its composition to better reflect
our competitive landscape or, if necessary, to account for any corporate changes, including acquisitions and dispositions. The
following peer group was used by the Compensation Committee in 2016 for benchmarking and reviewing the executive compensation program:
Acadia Realty Trust
Agree Realty Corp.
American Assets Trust, Inc.
Cedar Realty Trust, Inc.
EPR Properties
Getty Realty Corp.
Gramercy Property Trust
Investors Real Estate Trust
IRC Retail Centers, Inc.
Lexington Realty Trust
Monmouth Real Estate Investment
Corp.
One Liberty Properties, Inc.
Ramco-Gershenson Properties Trust
Retail Opportunity Investments
Corp.
Saul Centers, Inc.
Store Capital
STAG Industrial, Inc.
Elements of Compensation
Base Salary
We pay our named executive officers base salaries in
keeping with the scope, prominence, and impact of their respective positions, as well as competitive requirements. Base salaries
provide a predictable, stable source of cash income to help retain and motivate our executives.
Each year, the Compensation Committee makes a recommendation
to the other independent directors on our Board regarding the CEO’s annual base salary level. The Compensation Committee’s
recommendation is based on a comprehensive review of the CEO’s performance, including reference to certain Company and individual
objectives established by the Compensation Committee for such year. Based on this recommendation, the other independent directors,
together with the Compensation Committee, determine and approve the CEO’s annual base salary level. The Compensation Committee
also annually evaluates the performance of our other named executive officers and, based on such evaluation (and recommendations
received from the CEO), approves their annual base salary levels.
The 2016 annual base salaries of our named executive
officers were as follows: (i) Mr. Lenehan - $475,000; (ii) Mr. Morgan - $340,000; and (iii) Mr. Brat – $275,000.
Annual Incentive Compensation
The Company’s named executive officers were eligible
to earn annual bonuses in respect of calendar year 2016, based on the achievement of performance objectives established by the
Compensation Committee. The purpose of our annual incentive compensation program is to motivate the achievement of corporate and
individual strategic objectives on an annual basis and to reward financial and operating performance and leadership excellence.
The target annual bonus opportunities of the named executive
officers for calendar year 2016 were as follows, pursuant to the executives’ letter agreements with the Company, which are
described below in the section entitled “
Executive Compensation – Narrative Description to Summary Compensation
Table and Grants of Plan-Based Awards Table - Letter Agreements with Named Executive Officers
”: (i) Mr. Lenehan –
100% of annual base salary (i.e., $475,000); (ii) Mr. Morgan – 65% of annual base salary (i.e., $221,000); and (iii) Mr.
Brat – 60% of annual base salary (i.e., $165,000). Each executive was eligible to earn an annual bonus for 2016 in an amount
that ranged from 0% to 150% of his target annual bonus opportunity.
In order for our named executive officers to earn an
annual bonus under our annual incentive compensation program for calendar year 2016, the Company had to satisfy an objective, minimum
performance requirement established by the Compensation Committee, and the executives had to achieve certain performance objectives
that were established by the Compensation Committee, as described below. The objective, minimum performance requirement for 2016
was the Company’s achievement of a level of Adjusted Funds From Operations, or AFFO, equal to at least 95% of the Company’s
annual AFFO budget for 2016, which was $70.1 million. AFFO is a non-GAAP measure that is used as a supplemental operating measure
for comparing year-over-year ability to fund dividend distribution from operating activities. The Compensation Committee determined
that the minimum performance requirement for 2016 was satisfied. Specifically, it determined that the Company’s AFFO for
calendar year 2016 was $72.8 million, which is greater
than 95% of the Company’s annual AFFO budget for 2016 ($70.1 million).
See pages 39-40 of our Form 10-K for the year ended December 31, 2016 for a reconciliation of GAAP net income to AFFO.
Based upon the Company having satisfied the minimum
AFFO performance requirement for 2016, the named executive officers were eligible to earn an annual bonus for 2016 subject to the
achievement of performance objectives that were established by the Compensation Committee for 2016 and that related to the following
performance categories, which are described in more detail below: (i) acquisition strategy, (ii) shared strategic objectives, and
(iii) individual performance. The relative weighting of each category of performance objectives and the maximum amount that each
executive could earn in respect of each such category are set forth in the table below.
Performance Category
|
Weighting
(as a % of the executive’s
target opportunity)
|
Maximum Amount that
could be Earned by an
Executive
(as a % of the executive’s
target opportunity)
|
Acquisition strategy
1
|
50%
|
75%
|
Shared strategic objectives
2
|
30%
|
45%
|
Individual performance objectives
3
|
20%
|
30%
|
Total
|
100%
|
150%
|
Acquisition Strategy
. This
performance category was measured based on the Company’s achievement of objectives related to the investment process. This
encompasses recruiting and training acquisition personnel, establishing a credit focused underwriting process, and a thorough due
diligence process. Our acquisition process is founded on the analogy of a “strike zone.” This compares the Company’s
assessment of the quality of the acquisition opportunity to both its expected unlevered return and the Company’s estimate
of its long-term cost of capital. Please see page 19 of the investor presentation furnished to the SEC in a Current Report on Form
8-K filed on March 20, 2017 for an illustration of such process. Such report and the information furnished with it shall not be
deemed to be incorporated into this proxy statement.
Shares Strategic Objectives
.
This performance category was measured with consideration to the following key focus areas for 2016: establishing our systems by
which to qualify potential acquisition/investment targets; implementing a comprehensive enterprise risk matrix, along with financial
and operational controls; building a culture of accountability, ethics, and compliance throughout the organization; and building
our core team and our business platform, more broadly
Individual Performance Objectives
.
The Compensation Committee established a number of different individual performance objectives for each named executive officer,
which fell into the following categories: (i) for Mr. Lenehan – strategic vision, leadership, financial results and performance,
key relationships and people management; (ii) for Mr. Morgan – internal audit, financial reporting, capital markets, debt
rating, and executive management; and (iii) for Mr. Brat – legal oversight and compliance, executive management, and operations
at our six LongHorn Steakhouse restaurants located in the San Antonio, Texas area.
The Compensation Committee determined each executive’s
annual bonus amount for 2016 based on its evaluation of the executive’s achievement of the performance objectives described
above. Based on the Compensation Committee’s assessment of each executive’s achievement of the applicable performance
objectives, the Compensation Committee and, with respect to Mr. Lenehan only, the other independent directors on our Board, approved
the following annual bonus amounts for the executives for 2016: (i) Mr. Lenehan, $498,750; (ii) Mr. Morgan, $232,050; and (iii)
Mr. Brat, $173,250. Each executive’s annual bonus amount was equal to 105% of his target annual bonus opportunity for 2016.
The named executive officers were paid their annual
bonuses for 2016 as follows: (i) an amount equal to the executive’s 2016 target annual bonus opportunity was paid to the
executive in a cash lump sum (i.e., $475,000 for Mr. Lenehan, $221,000 for Mr. Morgan and $165,000 for Mr. Brat), and (ii) an amount
equal to the excess of the annual bonus earned by the executive over his target annual bonus opportunity was paid to the executive
in the form of fully vested shares of our common stock, which were issued to each executive on March 9, 2017 under our 2015 Plan.
The number of shares issued to each executive was determined based on the average closing price of the Company’s common stock
for the five consecutive trading days ending on March 9, 2017. The executives were issued the following number of shares: (i) Mr.
Lenehan – 1,099 shares; (ii) Mr. Morgan – 511 shares; and (iii) Mr. Brat – 382 shares.
Long-Term Incentive Compensation
In February 2016, each named executive officer was granted
an annual long-term equity incentive award under the 2015 Plan for calendar year 2016. The Compensation Committee grants long-term
equity incentive awards in order to attract and retain talented executives, to motivate future performance and to link compensation
to performance of the Company’s stock over a multi-year period. The Compensation Committee believes that long-term equity
incentive awards align the long-term interests of the executives with the interests of the Company and the Company’s stockholders.
Each executive’s long-term equity incentive award for calendar year 2016 was granted 60% in the form of performance-based
restricted stock and 40% in the form of time-based restricted stock.
In February 2016, the Compensation Committee (and, in
the case of Mr. Lenehan, all of the independent directors on our Board) approved the following annual long-term equity incentive
awards to the named executive officers: (i) Mr. Lenehan - 30,630 shares of time-based restricted stock and a target award of 45,945
shares of performance-based restricted stock; (ii) Mr. Morgan - 8,783 shares of time-based restricted stock and a target award
of 13,175 shares of performance-based restricted stock; and (iii) Mr. Brat - 4,748 shares of time-based restricted stock and a
target award of 7,122 shares of performance-based restricted stock. The total number of shares of restricted stock awarded to each
executive was determined by dividing the target value of the annual long-term incentive award set forth in the executive’s
letter agreement with the Company, being $1,250,000 for Mr. Lenehan, $370,000 for Mr. Morgan and $200,000 for Mr. Brat, by the
average closing price of the Company’s common stock for the five consecutive trading days ending on the applicable grant
date. The material terms of these awards are described below in the section entitled “
Executive Compensation – Narrative
Description to Summary Compensation Table and Grants of Plan-Based Awards Table – 2016 Long-Term Equity Incentive Awards
.”
Clawback
. The time-based
restricted stock and performance-based restricted stock award agreements each provide that if (i) the Company is required to restate
its financial statements due to fraud and (ii) the Compensation Committee determines that the executive has knowingly participated
in such fraud, then the Compensation Committee may, at any time within two years following such restatement, require the executive
to (x) return to the Company any shares that vested under the award agreement and any distributions received by the executive with
respect to such shares and (y) pay to the Company the amount of any proceeds received by the executive from the disposition of
any such shares, in each case during the period commencing two years before the beginning of the restated financial period and
ending on the date of such Compensation Committee determination. The award agreements also provide that the shares issued to the
executive under the award agreements, any distributions received by the executive with respect to such shares, and any proceeds
received by the executive from the disposition of any such vested shares will be subject to mandatory repayment by the executive
to the Company to the extent the executive is, or in the future become, subject to (A) any “clawback” or recoupment
policy that is adopted by the Company or (B) any applicable laws which impose mandatory recoupment.
Restrictive Covenants
. The
time-based restricted stock and performance-based restricted stock award agreements each contain certain restrictive covenant provisions,
including restrictive covenants relating to the non-disclosure of confidential information and trade secrets, non-competition,
non-solicitation of vendors, suppliers and licensees, and non-recruitment of employees. The non-competition, non-solicitation and
non-recruitment covenants run for twenty-four months following the executive’s termination of employment for any reason,
provided that, if the executive is a resident of California and subject to its laws, then the non-competition covenant will not
apply and the non-solicitation and non-recruitment covenants will be limited to apply only where the executive uses or discloses
confidential information or trade secrets when engaging in the restricted activities. Each of our named executive officers is a
resident of California.
Letter Agreements with Named
Executive Officers
We have letter agreements with our named executive officers,
pursuant to which the executives are entitled to receive severance benefits in connection with certain terminations of employment.
The material terms of these agreements are described below in the section entitled “
Executive Compensation – Narrative
Description to Summary Compensation Table and Grants of Plan-Based Awards Table - Letter Agreements with Named Executive Officers
.”
Other Employee Benefits and
Perquisites
We provide to all of our corporate employees, including
our named executive officers, broad-based health and welfare benefits that are intended to attract and retain employees while providing
them with health and welfare security. Our named executive officers are eligible to receive the same benefits, including life and
health benefits and vacation, holiday and sick time, that are available to all other corporate employees. We do not provide executive
perquisites to our named executive officers. In 2016, the Compensation Committee approved the payment or reimbursement of up to
$10,000 in expenses of outside legal counsel incurred by each of our named executive officers in connection with the review of
draft severance and change in control agreements.
Other Compensation Practices and Policies
Stock Ownership Requirements
We believe that equity ownership by our named executive
officers can help align their interests with our stockholders’ interests. To that end, the Compensation Committee adopted
stock ownership requirements in 2016 that apply to all of our named executive officers. Pursuant to such stock ownership requirements,
(i) the CEO is required to own shares of our stock equal in value to at least six times the CEO’s annual base salary, and
(ii) each other named executive officer is required to own shares of our common stock equal in value to at least three times the
executive’s annual base salary. Each executive is required to retain 50% of net shares (after payment of applicable taxes)
received by the executive from any equity award until the applicable stock ownership requirement is achieved.
Prohibition on Short Sales,
Hedging, Pledging and Margin Accounts
Our Insider Trading Policy prohibits our officers, directors
and all other employees from (i) engaging in short sales, (ii) buying or selling put or call positions or other derivative securities
based on our securities, (iii) buying financial instruments designed to hedge or offset any decrease in the market value of our
securities, and (iv) frequent trading of our securities to take advantage of fluctuations in share price. In addition, all of our
officers and directors are prohibited from holding out securities in margin accounts or otherwise pledging our securities as collateral.
Tax Deductibility of Executive
Compensation
Under Section 162(m) of the Internal Revenue Code, a
public company generally is limited to a $1 million deduction for compensation paid to its chief executive officer or any of its
three other most highly compensated executive officers (other than the chief financial officer). This limitation does not apply
to compensation that meets the requirements under Section 162(m) for qualifying performance-based compensation. The 2015 Plan is
structured to permit awards that comply with the Section 162(m) exception for qualifying performance-based compensation. The Compensation
Committee considers the impact of this Internal Revenue Code rule in developing, implementing and administering our compensation
programs. However, the Compensation Committee balances this consideration with our primary goal of structuring compensation programs
to attract, motivate, and retain highly talented executives. In light of this balance and the need to maintain flexibility in administering
compensation programs, the Compensation Committee may authorize compensation in any year that exceeds $1 million and does not meet
the required standards for deductibility.
2017 Compensation Actions
Base Salaries
In March 2017, the Compensation Committee and, with
respect to Mr. Lenehan only, the other independent directors on our Board, approved an increase of approximately 5% in the annual
base salary of each of Messrs. Lenehan, Morgan and Brat, as shown in the table below. The Compensation Committee approved these
increases in recognition of each named executive officer’s contribution to the Company’s strong performance in 2016,
its first full year as a stand-alone, public company.
Named Executive
Officer
|
2016 Base Salary
|
2017 Base Salary
|
Percent
Change
|
William H. Lenehan
|
$475,000
|
$500,000
|
5.3%
|
Gerald R. Morgan
|
$340,000
|
$357,000
|
5.0%
|
James L. Brat
|
$275,000
|
$288,750
|
5.0%
|
Long-Term Incentive Compensation
In March 2017, the Compensation Committee and, with
respect to Mr. Lenehan only, the other independent directors on our Board, approved an increase in each named executive officer’s
aggregate target value for his annual long-term incentive award in recognition of each executive’s strong performance during
calendar year 2016 and to motivate future performance and further align the interests of our named executive officers and our stockholders.
The executives’ aggregate target values for the 2017 annual long-term incentive award are as follows: (i) Mr. Lenehan - $1,400,000;
(ii) Mr. Morgan - $415,000; and (iii) Mr. Brat - $225,000. On March 9, 2017, the executives were granted the following annual long-term
equity incentive awards under the 2015 Plan: (x) Mr. Lenehan – 25,907 shares of time-based restricted stock and a target
award of 38,860 shares of performance-based restricted stock; (y) Mr. Morgan – 7,679 shares of time-based restricted stock
and a target award of 11,519 shares of performance-based restricted stock; and (z) Mr. Brat – 4,164 shares of time-based
restricted stock and a target award of 6,245 shares of performance-based restricted stock. The total number of shares of restricted
stock awarded to each executive was determined by dividing each executive’s aggregate target value, as set forth above, by
the average closing price of the Company’s common stock for the five consecutive trading days ending on the applicable grant
date. The awards have the same terms and conditions as the corresponding awards granted in 2016, as described above in the section
entitled “
Compensation Discussion and Analysis – Elements of Compensation – Long-Term Incentive Compensation
,”
except that the performance period for the performance-based restricted stock awards runs from January 1, 2017 to December 31,
2019.
COMPENSATION
TABLES
Summary
Compensation Table
The
following table sets forth certain information with respect to the compensation paid to our named executive officers during the
fiscal years ended December 31, 2016 and 2015.
Name and
Principal
Position
|
|
Year
|
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
(1)
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
(2)
|
|
|
All Other
Compensation
($)
(3)
|
|
|
Total
($)
|
|
William H. Lenehan, President and CEO
|
|
|
2016
|
|
|
|
475,000
|
|
|
|
—
|
|
|
|
1,767,098
|
|
|
|
498,750
|
|
|
|
14,418
|
|
|
|
2,755,266
|
|
|
|
|
2015
|
|
|
|
180,040
|
|
|
|
—
|
|
|
|
650,000
|
|
|
|
175,486
|
|
|
|
—
|
|
|
|
1,005,526
|
|
Gerald R. Morgan, Chief Financial Officer
|
|
|
2016
|
|
|
|
340,000
|
|
|
|
—
|
|
|
|
522,754
|
|
|
|
232,050
|
|
|
|
3,609
|
|
|
|
1,098,413
|
|
|
|
|
2015
|
|
|
|
93,563
|
|
|
|
—
|
|
|
|
185,000
|
|
|
|
55,250
|
|
|
|
20,034
|
|
|
|
353,847
|
|
James L. Brat, General Counsel and Secretary
|
|
|
2016
|
|
|
|
275,000
|
|
|
|
—
|
|
|
|
282,756
|
|
|
|
173,250
|
|
|
|
11,004
|
|
|
|
742,010
|
|
|
|
|
2015
|
|
|
|
40,772
|
|
|
|
10,000
(4)
|
|
|
|
100,000
|
|
|
|
23,375
|
|
|
|
5,000
|
|
|
|
179,147
|
|
|
(1)
|
Amounts
reported in fiscal 2016 include the aggregate grant date fair value of the time-based
restricted stock and performance-based restricted stock awards granted to Mr. Lenehan
on February 8, 2016 and to Messrs. Morgan and Brat on February 3, 2016, each calculated
in accordance with FASB ASC Topic 718. The grant date fair value of the time-based restricted
stock award granted to Mr. Lenehan ($500,004) is equal to the average closing price of
our common stock for the five consecutive trading days ending on the grant date ($16.32)
multiplied by the number of shares of restricted stock granted to him (30,630). The grant
date fair value of the time-based restricted stock award granted to each of Messrs. Morgan
and Brat ($147,994 and $80,004), respectively) is equal to the average closing price
of our common stock for the five consecutive trading days ending on the grant date ($16.85)
multiplied by the number of shares of restricted stock granted to each executive (8,783
and 4,748, respectively).
|
The
grant date fair value of the performance-based restricted stock award granted to each executive is as follows: Mr. Lenehan - $1,267,094;
Mr. Morgan - $374,760; and Mr. Brat - $202,753. The grant date fair value of each performance-based restricted stock award was
estimated on the grant date using a Monte Carlo Simulation Model and assumes that the maximum level of performance will be achieved,
as such level of achievement represents the probable outcome of the applicable performance measure as of the grant date. More
information on the assumptions made when calculating the grant date fair values of the performance-based restricted stock awards
is found in Note 11 (Stock-Based Compensation) to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report
on Form 10-K for the year ended December 31, 2016.
Amounts
reported in fiscal 2015 include the aggregate grant date fair value of the restricted stock units granted to the named executive
officers in 2015, each calculated in accordance with FASB ASC Topic 718. More information on the assumptions made when calculating
the grant date fair value of the restricted stock units is found in Note 9
(Stock-Based Compensation) to our Consolidated Financial
Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2015.
|
(2)
|
Amounts
reported in fiscal 2016 and fiscal 2015 reflect cash incentive awards earned by our named
executive officers under our annual incentive compensation program for each such year.
These awards were based on pre-established, performance-based targets, the outcome of
which was uncertain at the time the targets were established, and, therefore, are reportable
as “Non-Equity Incentive Plan Compensation” rather than as “Bonus.”
The portion of each executive’s earned cash incentive award in excess of his target
annual bonus opportunity for fiscal 2016 ($23,750 for Mr. Lenehan, $11,050 for Mr. Morgan
and $8,250 for Mr. Brat) was paid to the executive in the form of fully vested shares
of our common stock at the election of the Company, which were issued to each executive
on March 9, 2017 under our 2015 Plan. The number of shares issued to each executive (1,099
to Mr. Lenehan; 511 to Mr. Morgan; and 382 to Mr. Brat) was determined based on the average
closing price of the Company’s common stock for the five consecutive trading days
ending on such date. See the section above entitled “
Compensation Discussion
and Analysis-Elements of Compensation-Annual Incentive Compensation
” for additional
information about our annual incentive compensation program for fiscal 2016. For fiscal
2015, these amounts were paid at target, based on the annual incentive target percentage
of base salary outlined in each executive’s letter agreement with the Company,
prorated for each executive’s service during fiscal 2015.
|
|
(3)
|
All
Other Compensation for fiscal 2015 consists of relocation expenses paid to Mr. Morgan
in the amount of $20,034 and to Mr. Brat in the amount of $5,000.
|
|
(4)
|
Represents
$10,000 gross cash sign-on bonus pursuant to Mr. Brat’s letter agreement with the
Company.
|
Grants
of Plan-Based Awards Table
The
table below sets forth information with respect to grants of plan-based awards to our named executive officers during the fiscal
year ended December 31, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant
Date
|
|
|
Estimated
Future Payouts
Under Non-Equity
Incentive Plan Awards
(1)
|
|
|
Estimated
Future Payouts
Under Equity
Incentive Plan Awards
(2)
|
|
|
All
Other
Stock
Awards:
Number of
Shares of
Stock or
Units
(#)
(3)
|
|
Grant
Date
Fair Value of
Stock
Awards
($)
(4)
|
|
Name
|
|
|
Threshold
($)
|
|
|
Target
($)
|
|
|
Maximum
($)
|
|
|
Threshold
(#)
|
|
|
Target
(#)
|
|
|
Maximum
(#)
|
|
|
|
William
H. Lenehan
|
|
|
|
|
|
|
—
|
|
|
|
475,000
|
|
|
|
712,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/8/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,973
|
|
|
|
45,945
|
|
|
|
91,890
|
|
|
|
|
|
|
1,267,094
|
|
|
|
|
2/8/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,630
|
|
|
|
500,004
|
|
Gerald
R. Morgan
|
|
|
|
|
|
|
—
|
|
|
|
221,000
|
|
|
|
331,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,588
|
|
|
|
13,175
|
|
|
|
26,350
|
|
|
|
|
|
|
374,760
|
|
|
|
|
2/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,783
|
|
|
|
147,994
|
|
James
L. Brat
|
|
|
|
|
|
|
—
|
|
|
|
165,000
|
|
|
|
247,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,561
|
|
|
|
7,122
|
|
|
|
14,244
|
|
|
|
|
|
|
202,753
|
|
|
|
|
2/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,748
|
|
|
|
80,004
|
|
|
(1)
|
These
amounts represent the potential payouts under our annual incentive compensation program
for fiscal 2016. See the “
Non-Equity Incentive Plan Compensation
”
column of the “
Summary Compensation Table
” above for the amount of
the annual cash incentive award earned by each executive for fiscal 2016.
|
|
(2)
|
These
amounts represent potential payouts of performance-based restricted stock awards granted
under our 2015 Plan, which vest based on the achievement of a performance measure over
a three-year performance period commencing on January 1, 2016 and ending on December
31, 2018.
|
|
(3)
|
These
amounts represent time-based restricted stock awards granted under our 2015 Plan, which
vest in equal installments on each of the first three anniversaries of the grant date,
subject to the executive’s continuous employment with the Company through the applicable
vesting date.
|
|
(4)
|
The
grant date fair values were computed in accordance with FASB ASC Topic 718. The grant
date fair value of each performance-based restricted stock award was determined based
on the assumption that the maximum level of performance will be achieved, as such level
of achievement represents the probable outcome of the applicable performance measure
as of the grant date.
|
Narrative
Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
2016
Long-Term Equity Incentive Awards
The
Company provides long-term equity incentive awards to certain employees, officers and directors of the Company and its affiliates
pursuant to the 2015 Plan. The purpose of the 2015 Plan is to provide eligible individuals with an incentive to contribute to
the success of the Company and to operate and manage the Company’s business in a manner that will provide for the Company’s
long-term growth and profitability and that will benefit its stockholders and other important stakeholders, including its employees
and customers, and to provide a means of recruiting, rewarding, and retaining key personnel. The 2015 Plan is administered by
the Compensation Committee, which has the authority to select persons to whom awards will be granted and to determine the terms
and conditions of such awards. The following types of awards may be granted under the 2015 Plan, subject to the limitations set
forth in the 2015 Plan: stock options; stock appreciation rights; restricted stock; restricted stock units; deferred stock units;
unrestricted stock, dividend equivalent rights; performance shares and other performance-based awards; other equity-based awards;
and cash bonus awards.
Time-Based
Restricted Stock
. The shares of time-based restricted stock granted to each executive in 2016 vest in equal installments on
each of the first three anniversaries of the grant date, subject to the executive’s continuous employment with the Company
through the applicable vesting date. If, after the first anniversary of the grant date, the executive’s employment is terminated
by the Company for any reason other than “cause” (as defined in the 2015 Plan), death or “disability”
(as defined in the applicable award agreement), or the executive resigns for “good reason” (as defined in the applicable
award agreement), then the executive will become vested in a pro-rated number of shares, which will be determined based on the
number of full months during the 36-month vesting period that the executive was employed by the Company, plus six additional months
of service credit. If, within two years after the date of the consummation of a “change in control” (as defined in
the 2015 Plan), the executive’s employment is terminated by the Company for any reason other than cause, death or disability,
or the executive resigns for good reason, then the executive will become immediately vested in all of the shares. If the executive
dies or becomes disabled prior to the vesting of the shares, then the executive will become immediately vested in all of the shares.
All dividends paid with respect to the shares will be reinvested in additional shares of restricted stock, which will be subject
to the same vesting, forfeiture and other provisions that apply to the underlying shares of restricted stock.
Performance-Based
Restricted Stock
. The shares of performance-based restricted stock granted to each executive in 2016 (the “Target Shares”)
become vested based on the Company’s achievement of a performance measure approved by the Compensation Committee over a
three-year performance period commencing on January 1, 2016 and ending on December 31, 2018 (the “Performance Period”).
The performance measure is the Company’s total stockholder return (“TSR”) relative to the TSRs of the companies
in a comparison group selected by the Compensation Committee. Each executive will become vested in between 0% and 200% of his
Target Shares, based on the achievement of the performance measure. After the Company’s TSR percentile is determined, the
number of shares of restricted stock that vest will be determined by multiplying the executive’s Target Shares by the applicable
percentage listed in the table below. If more than 100% of the Target Shares become vested, then the executive will be issued
additional shares (the “Additional Shares”) on the date on which the Compensation Committee certifies the level of
achievement of the performance measure.
Company
TSR Relative to
Comparison Group
1
TSRs over
Performance Period
|
Percentage
of Target Shares that Vest
2
|
Maximum
(75th Percentile)
|
200%
|
Target
(50th Percentile)
|
100%
|
Threshold
(33rd Percentile)
|
50%
|
Below
Threshold (<33rd Percentile)
|
0%
|
|
(1)
|
The
comparison group consists of the following companies: Agree Realty Corp., EPR Properties,
Gaming & Leisure Properties, Inc., Gladstone Commercial Corp., Global Net Lease,
Inc., Gramercy Property Trust, Lexington Realty Trust, Monmouth Real Estate Investment
Corp., National Retail Properties, Inc., One Liberty Properties, Inc., Realty Income
Corp., Select Income REIT, Spirit Realty Capital, Inc., Store Capital Corp. and VEREIT,
Inc.
|
|
(2)
|
To
the extent performance falls between two levels in the table above, linear interpolation
will apply in determining the percentage of the Target Shares that vest.
|
Except
as described below, an executive must remain employed through the end of the Performance Period in order to vest in any of his
shares. If the executive’s employment is terminated by the Company for cause following the end of the Performance Period
and prior to the date on which the Compensation Committee certifies the level of achievement of the performance measure, then
the executive will forfeit all of his Target Shares and his right to receive any Additional Shares.
If,
after the first anniversary of the grant date, the executive’s employment is terminated by the Company for any reason other
than cause, death or disability, or the executive resigns for good reason, then the executive will become vested in the number
of Target Shares, if any, and will be issued the number of Additional Shares, if any, determined following the end of the Performance
Period based on actual performance, in each case on a pro rata basis, determined based on the number of full months that the executive
was employed by the Company during the Performance Period through his date of termination. If, within two years after the date
of the consummation of a change in control, the executive’s employment is terminated by the Company for any reason other
than cause, death or disability, or the executive resigns for good reason, then the executive will become immediately vested in
the number of Target Shares, if any, and will be issued the number of Additional Shares, if any, determined based on actual performance
measured through the date of the change in control. If the executive dies or becomes disabled prior to the vesting of the Target
Shares, the executive will become immediately vested in 100% of his Target Shares.
All
dividends paid with respect to the Target Shares will be reinvested in additional shares of stock, which will be subject to the
same vesting, forfeiture and other provisions that apply to the underlying Target Shares.
Letter
Agreements with Messrs. Lenehan, Morgan and Brat
Agreement
with William H. Lenehan
On
August 12, 2015, we entered into an agreement with William H. Lenehan for the position of Chief Executive Officer, effective August
17, 2015. The agreement provides for an annual base salary of $475,000. Pursuant to the agreement, Mr. Lenehan is eligible for
an annual incentive target of 100% of his annual base salary and a long-term incentive equity award with a target value of $1,250,000.
The
agreement provides that if Mr. Lenehan’s employment is involuntarily terminated by the Company not for cause or voluntarily
terminated by Mr. Lenehan for good reason, Mr. Lenehan will be eligible to receive severance of 18 months of base salary and health
care benefits coverage at the same level provided to Mr. Lenehan during the 90-day period prior to his termination.
The
agreement provides that Mr. Lenehan will be covered under a change in control agreement with us, which has not yet been adopted
but is expected to provide Mr. Lenehan with severance equal to two times his annual base salary and target bonus plus 24 months
of health care benefits in the event he experiences a qualifying termination of his employment within a specified period following
a change in control (which term will be defined in the change in control agreement).
Agreement
with Gerald R. Morgan
On
September 21, 2015, we entered into an agreement with Gerald R. Morgan for the position of Chief Financial Officer, effective
September 22, 2015. The agreement provides for an annual base salary of $340,000. Pursuant to the agreement, Mr. Morgan is eligible
for an annual incentive target of 65% of his annual base salary and a long-term incentive equity award with a target value of
$370,000.
The
agreement provides that if Mr. Morgan’s employment is involuntarily terminated by the Company not for cause or voluntarily
terminated by Mr. Morgan for good reason, Mr. Morgan will be eligible for severance of continued base salary and health care benefits
coverage at the same level provided to Mr. Morgan during the 90-day period prior to his termination, in each case for a period
of time to be determined by our policy in place at time of his termination.
The
agreement provides that Mr. Morgan will be covered under a change in control agreement with us, which has not yet been adopted
but is expected to provide Mr. Morgan with severance equal to 1.5 times his annual base salary and target bonus plus 18 months
of health care benefits in the event he experiences a qualifying termination of employment within a specified period following
a change in control (which term will be defined in the change in control agreement).
Agreement
with James L. Brat
On
September 17, 2015, we entered into an agreement with James L. Brat for the position of General Counsel, with an effective date
as of November 9, 2015. The agreement provides for an annual base salary of $275,000. Pursuant to his agreement, Mr. Brat is eligible
for an annual incentive target of 60% of his annual base salary and long-term incentive equity award with a target value of $200,000.
The
agreement provides that if Mr. Brat’s employment is involuntarily terminated not for cause or Mr. Brat voluntarily terminates
his employment for good reason, Mr. Brat will be eligible for severance of continued base salary and health care benefits coverage
at the same level provided to Mr. Brat during the 90-day period prior to his termination of employment, in each case for a period
of time to be determined by our policy in place at time of his termination.
The
agreement provides that Mr. Brat will be covered under a change in control agreement with us, which has not yet been adopted but
is expected to provide Mr. Brat with severance equal to 1.5 times his annual base salary and target bonus plus 18 months of health
care benefits in the event he experiences a qualifying termination of employment within a specified period following a change
in control (which term will be defined in the change in control agreement).
Outstanding
Equity Awards at Fiscal Year End
The
following table sets forth the outstanding equity awards for each named executive officer as of December 31, 2016.
|
|
Stock
Awards
|
|
Name
|
|
Date
of Grant
|
Number
of
Shares or
Units
of Stock
That
Have Not
Vested
(#)
|
|
|
Market
Value of
Shares or Units
of Stock That
Have Not
Vested
($)
(1)
|
|
|
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not
Vested
(#)
(2)
|
|
|
Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares, Units
or
Other Rights
That
Have Not
Vested
($)
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
William
H. Lenehan
|
|
|
2/8/2016
|
30,630
(3)
|
|
|
|
628,528
|
|
|
|
91,890
|
|
|
|
1,885,583
|
|
|
|
|
12/23/2015
|
31,538
(4)
|
|
|
|
647,160
|
|
|
|
|
|
|
|
|
|
Gerald
R. Morgan
|
|
|
2/3/2016
|
8,783
(3)
|
|
|
|
180,227
|
|
|
|
26,350
|
|
|
|
540,702
|
|
|
|
|
12/23/2015
|
8,976
(4)
|
|
|
|
184,188
|
|
|
|
|
|
|
|
|
|
James
L. Brat
|
|
|
2/3/2016
|
4,748
(3)
|
|
|
|
97,429
|
|
|
|
14,244
|
|
|
|
292,287
|
|
|
|
|
12/23/2015
|
4,852
(4)
|
|
|
|
99,563
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Amounts
reported are based on the closing market price of our common stock on December 30, 2016
($20.52).
|
|
(2)
|
These
awards consist of shares of performance-based restricted stock, which vest based on the
achievement of a performance measure over a three-year performance period commencing
on January 1, 2016 and ending on December 31, 2018. The number in the table reflects
the number of shares of restricted stock that the executive will earn based on achieving
the maximum level of performance. The level of achievement assumed for each award is
the next higher performance level (i.e., target or maximum) that exceeds the actual performance
level achieved in respect of each award calculated as of December 31, 2016, in accordance
with SEC rules. The number of shares of restricted stock, if any, that will be earned
by the executive will depend on the actual performance level achieved by the Company
for the applicable three-year performance period.
|
|
(3)
|
These
awards consist of shares of time-based restricted stock, which vest in equal installments
on each of the first three anniversaries of the grant date, subject to the executive’s
continued employment with the Company through the applicable vesting date.
|
|
(4)
|
These
awards consist of restricted stock units, which vest on December 23, 2018, subject to
the executive’s continued employment on the vesting date.
|
Potential
Payments Upon Termination or Change in Control
The
following table sets forth quantitative information with respect to potential payments and benefits to each of our named executive
officers in connection with a termination of employment or a change in control of the Company, assuming that the termination of
employment and change in control each occurred on December 31, 2016. A description of these payments and benefits appears above
in the section entitled “
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
.”
The amounts reported in the “
Stock Awards
” column below are based on the closing price of our common stock
on December 30, 2016 ($20.52).
Name
|
Cash
Severance Payments
($)
(1)
|
Stock
Awards
($)
(2)
|
Health
Care
Benefits
($)
(3)
|
Total
($)
|
William
H. Lenehan
|
|
|
|
|
Termination
Without Cause or for Good Reason
|
712,500
|
—
|
$25,655
|
738,155
|
Termination
Without Cause or for Good Reason After a Change in Control
|
712,500
|
2,218,479
|
$25,655
|
2,965,634
|
Termination
following Death or Disability
|
—
|
2,218,479
|
—
|
2,218,479
|
Gerald
R. Morgan
|
|
|
|
|
Termination
Without Cause or for Good Reason
|
—
|
—
|
—
|
—
|
Termination
Without Cause or for Good Reason After a Change in Control
|
—
|
634,766
|
—
|
634,766
|
Termination
following Death or Disability
|
—
|
634,766
|
—
|
634,766
|
James
L. Brat
|
|
|
|
|
Termination
Without Cause or for Good Reason
|
—
|
—
|
—
|
—
|
Termination
Without Cause or for Good Reason After a Change in Control
|
—
|
343,135
|
—
|
343,135
|
Termination
following Death or Disability
|
—
|
343,135
|
—
|
343,135
|
|
(1)
|
Mr.
Lenehan’s letter agreement with the Company provides that if his employment is
involuntarily terminated by the Company not for cause or voluntarily terminated by Mr.
Lenehan for good reason, he will be eligible to receive 18 months of base salary.
|
|
(2)
|
Our
restricted stock unit, time-based restricted stock and performance-based restricted stock
award agreements provide that if an executive’s employment is terminated by the
Company for any reason other than cause, death or disability, or the executive resigns
for good reason, in each case within two years after a change in control, then the executive
will become immediately vested in all of his units or shares, as applicable. The performance-based
restricted stock awards will vest based on actual performance through the date of the
change of control. We have assumed for purposes of the table above that performance will
be achieved at the target level. The award agreements also provide that if the executive
dies or becomes disabled prior to the vesting of the units or shares, as applicable,
then he will become immediately vested in all of his units or shares, as applicable (with
respect to the performance-based restricted stock award, 100% of the target shares will
vest). The time-based restricted stock and performance-based restricted stock award agreements
also provide for accelerated vesting on a pro-rata basis upon certain terminations of
employment that occur after the first anniversary of the grant date
|
|
|
and prior to a change
in control. As of December 31, 2016, the first anniversary of the respective grant date
of each such award had not yet occurred.
|
|
(3)
|
Mr.
Lenehan’s letter agreement with the Company provides that if his employment is
involuntarily terminated by the Company not for cause or voluntarily terminated by Mr.
Lenehan for good reason, he will be eligible to receive 18 months of health care benefits
coverage at the same level provided to him during the 90-day period prior to his termination.
|
Securities
Authorized for Issuance Under Equity Compensation Plans
The
Company’s equity compensation plan information as of December 31, 2016 is as follows:
Plan
category
|
Number
of shares
to be issued upon
exercise of
outstanding
options, warrants
and rights
1
|
Weighted-average
exercise price of
outstanding
options, warrants
and rights
|
Number
of shares
remaining available
for future issuance
under equity
compensation
plans
|
Equity
compensation plans approved by security holders
2
|
190,527
|
—
|
1,902,849
|
|
|
|
|
Equity
compensation plans not approved by security holders
|
—
|
—
|
—
|
|
|
|
|
Total
|
190,527
|
—
|
1,902,849
|
|
(1)
|
Includes
unvested restricted stock units that may be settled in shares of the Company’s
common stock.
|
|
(2)
|
Consists
of the 2015 Plan, which was approved by the Company’s sole stockholder, Rare Hospitality
International, Inc., on October 20, 2015, prior to the Spin-Off.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information as of April 19, 2017 with respect to the beneficial ownership of our common stock
by (i) each person who beneficially holds more than 5% of the outstanding shares of our common stock based solely on our review
of SEC filings; (ii) each director or director nominee; (iii) each named executive officer listed in the table titled “2016
Summary Compensation Table” above; and (iv) all directors and executive officers as a group.
The
number of shares beneficially owned by each stockholder is determined under SEC rules and generally includes shares for which
the holder has voting or investment power. The information does not necessarily indicate beneficial ownership for any other purpose.
For purposes of calculating each person’s or group’s percentage ownership, shares of common stock issuable pursuant
to the terms of restricted stock unit exercisable or vesting within 60 days after April 19, 2017 are included as outstanding and
beneficially owned for that person or group, but are not treated as outstanding for the purpose of computing the percentage ownership
of any other person or group.
Unless
otherwise indicated, the address for all persons named below is c/o Four Corners Property Trust, Inc., 591 Redwood Highway, Suite
1150 Mill Valley, California 94941.
Name
of Beneficial Owner
|
Shares
of
Common
Stock
Beneficially
Owned
|
Percent
of
Outstanding
Common
Stock (1)
|
Beneficial
holders of 5% or more of our common stock:
|
|
|
BlackRock,
Inc. (2)
|
7,969,996
|
13.3%
|
The
Vanguard Group (3)
|
7,337,314
|
12.2%
|
Vanguard
Specialized Funds (4)
|
4,322,678
|
7.2%
|
|
|
|
Named
Executive Officers, Directors and Director Nominees:
|
|
|
William
H. Lenehan
|
41,550
|
*
|
John
S. Moody
|
22,065
|
*
|
Douglas
B. Hansen, Jr.
|
20,103
|
*
|
Marran
H. Ogilvie (5)
|
12,477
|
*
|
Paul
E. Szurek (6)
|
13,191
|
*
|
Gerald
R. Morgan
|
21,898
|
*
|
James
L. Brat
|
2,624
|
*
|
All
current executive officers and directors as a group (7 persons)
|
121,386
|
*
|
*Less
than one percent (1%).
|
(1)
|
The
percentage of beneficial ownership shown in the following table is based on 60,022,912
outstanding shares of common stock as of April 19, 2017.
|
|
(2)
|
Based
solely on an amendment to Schedule 13G filed with the SEC on February 8, 2017. BlackRock,
Inc. has sole dispositive power with respect to 7,969,996 shares and sole
|
|
|
voting power
with respect to 7,842,496 shares. BlackRock, Inc. has indicated that it filed the Schedule
13G on behalf of the following subsidiaries: BlackRock (Netherlands) B.V., BlackRock
Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Asset Management
Ireland Limited, BlackRock Asset Management North Asia Limited, BlackRock Asset Management
Schweiz AG, BlackRock Financial Management, Inc., BlackRock Fund Advisors, BlackRock
Fund Managers Ltd, BlackRock Institutional Trust Company, N.A., BlackRock International
Limited, BlackRock Investment Management (Australia) Limited, BlackRock Investment Management
(UK) Ltd, BlackRock Investment Management, LLC and BlackRock Japan Co Ltd.
|
|
(3)
|
Based
solely on an amendment to Schedule 13G filed with the SEC on February 13. 2017. The Vanguard
Group has sole voting power with respect to 175,520 shares, shared voting power with
respect to 86,631 shares, sole dispositive power with respect to 7,151,489 shares and
shared dispositive power with respect to 185,825 shares. The Vanguard Group has indicated
that it filed the Schedule 13G on behalf of the following subsidiaries: Vanguard Fiduciary
Trust Company and Vanguard Investments Australia, Ltd. The address of The Vanguard Group
is 100 Vanguard Blvd., Malvern, PA 19355.
|
|
(4)
|
Based
solely on a Schedule 13G filed with the SEC on February 13, 2017. Vanguard Specialized
Funds has sole voting power of 4,322,678 shares. The address of Vanguard Specialized
Funds is 100 Vanguard Blvd., Malvern, PA 19355.
|
|
(5)
|
Includes
5,278 vested RSUs (together with their respective vested Dividend Equivalent Units) that
Ms. Ogilvie has elected to defer payment of until her separation from service with the
Board in accordance with the Company’s director compensation policy.
|
|
(6)
|
Includes
5,278 vested RSUs (together with their respective vested Dividend Equivalent Units) that
Mr. Szurek has elected to defer payment of until his separation from service with the
Board in accordance with the Company’s director compensation policy.
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than ten percent of a registered
class of our equity securities, to file reports of securities ownership and changes in such ownership with the SEC. Executive
officers, directors and greater than ten percent stockholders also are required by rules promulgated by the SEC to furnish us
with copies of all Section 16(a) forms they file.
Based
solely upon a review of Forms 3 and 4 and amendments thereto and written representations furnished to us during the most recent
fiscal year, no person who at any time during the fiscal year was a director, officer, or beneficial owner of more than 10% of
any class of our equity securities failed to file on a timely basis, as disclosed in the above forms, reports required by Section
16(a) of the Exchange Act during the most recent fiscal year, except for one transaction on one report for each of Messrs. Hansen,
Moody and Szurek and Ms. Ogilvie.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Procedures
for Approval of Related Party Transactions
Our
Board has adopted a policy regarding the approval of any “interested transaction,” which is any transaction or series
of transactions in which we or any of our subsidiaries is or are to be a participant, the amount involved exceeds $50,000, and
a “related person” (as defined under SEC rules) has a direct or indirect material interest. The Board will take into
account, among other facts and circumstances it deems appropriate, whether the interested transaction is on terms no less favorable
than terms generally available to an unaffiliated third party under the same or similar circumstances, and the extent of the related
party’s interest in the transaction. Our policy requires any director who may be interested in an interested transaction
to recuse himself or herself from any consideration of such transaction. If an interested transaction will be ongoing, the Board
may establish guidelines for the Company’s management to follow in its dealings with the related party.
In
2016, the Company had no related party transactions that exceeded the “interested transaction” threshold.
MISCELLANEOUS
Stockholder
Proposals and Nominations
Any
proposal of a stockholder intended to be included in our proxy statement for the 2018 Annual Meeting of Stockholders pursuant
to SEC Rule 14a-8 must be received by us no later than January 1, 2018, unless the date of our 2017 Annual Meeting of Stockholders
is more than 30 days before or after June 16, 2018, in which case the proposal must be received a reasonable time before we begin
to print and mail our proxy materials. All proposals should be directed to our General Counsel and Secretary, at 591 Redwood Highway,
Suite 1150 Mill Valley, California 94941.
A
stockholder nomination of a person for election to our Board or a proposal for consideration at our 2018 Annual Meeting of Stockholders
not intended to be included in our proxy statement pursuant to SEC Rule 14a-8 must be submitted in accordance with the advance
notice procedures and other requirements set forth in Section 6 of Article II of our bylaws. Pursuant to Section 6 of Article
II of our bylaws, we must receive timely notice of the nomination or other proposal in writing by not later than March 18, 2018,
nor earlier than February 16, 2018. However, in the event that the 2018 Annual Meeting of Stockholders is advanced or delayed
by more than 25 days from the first anniversary of the date of the 2017 Annual Meeting of Stockholders, notice by the stockholder
to be timely must be received not later than the close of business on the 10
th
day following the day on which such
notice of the date of the annual meeting was mailed or the first public announcement of the meeting, whichever occurs first. A
copy of our bylaws can be obtained from our General Counsel and Secretary, at 591 Redwood Highway, Suite 1150 Mill Valley, California
94941.
Householding
Any
stockholder, including both stockholders of record and beneficial holders who own their shares through a broker, bank or other
nominee, who share an address with another holder of our common stock are only being sent one Notice of Internet Availability
of Proxy Materials or set
of proxy materials, unless such holders have provided contrary instructions. We will deliver promptly
upon written or oral request a separate copy of these materials to any holder at a shared address to which a single copy of the
proxy materials were delivered. If you wish to receive a separate copy of these materials in the future or if you are receiving
multiple copies and would like to receive a single copy, please contact our General Counsel and Secretary, in writing, at 591
Redwood Highway, Suite 1150 Mill Valley, California 94941, or by telephone at 415-965-8030.
Other
Matters
We
do not intend to bring before the Annual Meeting any matters other than the proposals specifically described above, and we know
of no matters other than those to come before the Annual Meeting. If any other matters properly come before the Annual Meeting
or any postponement or adjournment thereof, it is the intention of the persons named in the accompanying proxy to vote such proxy
in accordance with the recommendation of our management on such matters, including any matters dealing with the conduct of the
Annual Meeting.
|
By Order of the Board of Directors
|
|
|
|
JAMES L. BRAT
|
|
General Counsel and Secretary
|
Dated:
May 1, 2017
Mill Valley, California
FOUR
CORNERS PROPERTY TRUST, INC.
591 REDWOOD HIGHWAY, SUITE 1150
MILL VALLEY, CA 94941
|
VOTE
BY INTERNET
Before
The Meeting
- Go to
www.proxyvote.com
Use
the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern
Time on June 15, 2017. Have your proxy card in hand when you access the web site and follow the instructions to obtain your
records and to create an electronic voting instruction form.
During
The Meeting
- Go to
www.virtualshareholdermeeting.com/FCPT2017
You
may attend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the box marked by
the arrow available and follow the instructions.
VOTE
BY PHONE - 1-800-690-6903
Use
any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 15, 2017. Have your proxy
card in hand when you call and then follow the instructions.
VOTE
BY MAIL
Mark,
sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o
Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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E29488-P92021
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KEEP
THIS PORTION FOR YOUR RECORDS
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THIS PROXY
CARD IS VALID ONLY WHEN SIGNED AND DATED.
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DETACH AND RETURN
THIS PORTION ONLY
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FOUR CORNERS PROPERTY TRUST, INC.
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The Board of Directors recommends you vote “FOR” all of the nominees listed in Proposal 1:
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1.
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Election of Directors
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For
|
Against
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Abstain
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Nominees:
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1a. William H. Lenehan
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☐
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☐
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☐
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1b. Douglas B. Hansen, Jr.
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☐
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☐
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☐
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1c. John S. Moody
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☐
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☐
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☐
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1d. Marran H. Ogilvie
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☐
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☐
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☐
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1e. Paul E. Szurek
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☐
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☐
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☐
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The Board of Directors recommends you vote “FOR” Proposals 2 and 3 and for “ONE YEAR” on Proposal 4:
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For
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Against
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Abstain
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2.
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Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2017.
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☐
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☐
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3.
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To approve, on a non-binding advisory
basis, the compensation of our named executive officers.
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☐
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☐
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☐
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One
Year
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Two
Years
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Three
Years
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Abstain
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4.
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To select, on a non-binding advisory
basis, the frequency with which we will conduct the non-binding advisory vote on executive compensation.
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☐
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☐
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☐
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Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary,
please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership,
please sign in full corporate or partnership name by authorized officer.
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Signature [PLEASE SIGN WITHIN BOX]
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Date
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Signature (Joint Owners)
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Date
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V.1.2
Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
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FOUR
CORNERS PROPERTY TRUST, INC.
Annual Meeting of Stockholders
June 16, 2017 2:00 PM
This
proxy is solicited by the Board of Directors
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The stockholder(s) hereby appoint(s) Gerald R. Morgan and James L. Brat, or either of them, as proxies, each with the power
to appoint his substitute, and hereby authorize(s) them to represent and to vote, as designated on the reverse side of this
ballot, all of the shares of Common Stock of FOUR CORNERS PROPERTY TRUST, INC. that the stockholder(s) is/are entitled to
vote at the Annual Meeting of Stockholders to be held at 2:00 PM, EDT on June 16, 2017, at www.virtualshareholdermeeting.com/FCPT2017,
and any adjournment or postponement thereof.
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This
proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will
be voted in accordance with the Board of Directors’ recommendations.
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Continued and to be signed on reverse side
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V.1.2
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