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| | | 2021 McKinney Avenue, Suite 1150 Dallas, Texas 75201 | |
| | | Time and Date: Thursday, May Online check-in will be available beginning at 8:30 a.m. Central Daylight Time. Please allow ample time for the online check-in process. | | | | | Place: This year’s Annual Meeting will be held through a virtual web conference at To participate in the Annual Meeting, you will need your 16-digit control number included in your notice of internet availability of proxy materials, on your proxy card, or any additional voting instructions accompanying these proxy materials. | | | | | Record Date: March 19, 2024 (the “Record Date”) | |
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| 1 | | | To elect the seven nominees to the Board of Directors (the “Board”) named in the accompanying proxy statement (the “Proxy Statement”) to hold office until the | | | | |||||||
| 2 | | | To ratify the retention of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, | | | | |||||||
| 3 | | | To approve, on an advisory basis, the compensation of the Company’s named executive officers as disclosed in the Proxy Statement (Proposal Three); and | | | | |||||||
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| | To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. | | | |
| By Order of the Board, | |
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| Proposal | | | | Our Board’s Recommendation | |
| Election of Directors (page 9) | | | | FOR | |
| Ratification of Retention of Independent Registered Public Accounting Firm (page | | | | FOR | |
| Advisory Vote to Approve Executive Compensation (page | | | | FOR | |
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| YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE VOTE YOUR SHARES OVER THE TELEPHONE, VIA THE INTERNET OR BY COMPLETING, DATING, SIGNING AND RETURNING A PROXY CARD, AS DESCRIBED IN THE PROXY STATEMENT. YOUR PROMPT COOPERATION IS GREATLY APPRECIATED. | |
| Name | | | | Director Since | | | | Board Committees | | ||||||||||||||||||||||||||||
| Independent | | | | Audit | | | | Comp | | | | Nominating | | ||||||||||||||||||||||||
| Mark Manheimer | | | | 2019 | | | | | | | | | | | | | | | | | | ||||||||||||||||
| Todd Minnis | | | | 2019 | | | | | | | | | | | | | | | | | |||||||||||||||||
| Michael Christodolou | | | | 2020 | | | | | | | | | | | | | | | | ||||||||||||||||||
| Heidi Everett | | | | 2020 | | | | | | | | | | | | | | | |||||||||||||||||||
| Matthew Troxell | | | | 2019 | | | | | | | | | | | | | | | |||||||||||||||||||
| Lori Wittman | | | | 2019 | | | | | | | | | | | | | | | |||||||||||||||||||
| Robin Zeigler | | | | 2020 | | | | | | | | | | | | | | |
| | | | | Director Term: One Year | | | Board Meetings in | | ||
| Standard Board Committee Meetings in | |
| 6 | | | | |
| Portfolio Metrics | | | | December 31, 2021 | | |||
| Annualized Base Rent (“ABR”)(1) (in thousands) | | | | | $ | 71,212 | | |
| Number of leases | | | | | | 327 | | |
| Number of states | | | | | | 41 | | |
| Square feet | | | | | | 6,420,246 | | |
| Tenants | | | | | | 67 | | |
| Industries | | | | | | 23 | | |
| Occupancy | | | | | | 100.0% | | |
| Weighted average remaining lease term (years)(2) | | | | | | 9.9 | | |
| Portfolio Metrics | | | | December 31, 2023 | | |||
| Annualized Base Rent (“ABR”)(1) (in thousands) | | | | | $ | 131,859 | | |
| Number of investments(2) | | | | | | 598 | | |
| Number of states | | | | | | 45 | | |
| Square feet | | | | | | 10,624,183 | | |
| Tenants | | | | | | 85 | | |
| Industries | | | | | | 26 | | |
| Occupancy(3) | | | | | | 100.0% | | |
| Weighted average lease term remaining (years)(4) | | | | | | 9.5 | | |
| Tenant Quality | | | Defensive Category | |
| 7 | | | | |
| Environmental | | | | Social | | | | Governance | |
| • Consider tenants’ commitment to ESG as part of our investment process • As of December 31, • Elements of our • We incorporated a Sustainability Linked Loan in our $250.0 million senior unsecured term loan, which allows the Company to benefit from reduction on interest costs if certain key performance indicators are met (e.g., tenants with commitments to reduce GHG emissions per the Science Based Targets Initiative) • We developed Green Leasing Guidelines, which assist the Company and its tenant companies in delivering sustainability benefits to their respective stakeholders and we received Silver Level recognition for our efforts • Completed our first GRESB public disclosure submission • Completed Scope 1 and Scope 2 Greenhouse Gas inventory and calculation | | | | • Competitive compensation and benefits, including stock awards for all employees • At the end of • The ethnicity of our workforce at the end of • We partner with local universities and organizations in our recruiting efforts with a focus on recruitment of candidates that are underserved in our industry • Employee Experience Committee facilitates employee feedback on workplace experiences • Employee Recognition Program designed to recognize exemplary performance • Developed a Human Rights Policy to advance fundamental human rights within our Company • Conducted Company’s first Employee Engagement Survey • Increased involvement in community and philanthropic causes • Increased focus on employee health and wellness | | | | • 43% of our Board, including 50% of our independent directors, are women • 29% of our directors are racially or ethnically diverse • Six out of seven directors are independent • Independent committees • Separate Chair of the Board and CEO • Directors elected annually • Directors are elected by majority of votes cast in uncontested elections with a director resignation policy • Annual director and committee assessments • We have opted out of the Maryland Control Share Acquisition Act of the MGCL, and we may not opt into the provisions of the Maryland Control Share Acquisition Act without the approval of our stockholders • • Our Bylaws may be amended by the vote of stockholders entitled to cast at least a majority of the votes entitled to be cast upon at a duly organized meeting of stockholders • Our Nominating and Corporate Governance Committee reviews and recommends ESG policies and procedures • Adopted ESG Policy, Human Rights Policy, DEI Policy, and Vendor Code of Conduct | |
| 8 | | | | |
| Name | | | | Position | |
| Mark Manheimer | | | | Director, President, | |
| Todd Minnis | | | | Chair of the Board | |
| Michael Christodolou | | | | Director | |
| Heidi Everett | | | | Director | |
| Matthew Troxell | | | | | |
| Lori Wittman | | | | Director | |
| Robin Zeigler | | | | Director | |
| 9 | | | | |
| Mark Manheimer | | | Mr. Manheimer has served as our President, Chief Executive Officer and director since October 2019. Prior to that, Mr. Manheimer served as Chief Investment Officer of EB Arrow and Fund Manager of EB Arrow’s Single Tenant Net Lease Group from February 2018 to October 2019. From | |
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| Director, President, Executive Officer and Secretary Age: Board Committees: None | |
| Todd Minnis | | | Mr. Minnis has served as the Chair of the Board since October 2019. Mr. Minnis founded EB Arrow, a real estate investment platform specializing in retail property investment, in 2009 as its Managing Partner and has served as its Chief Executive Officer since May 2009. Prior to EB Arrow, Mr. Minnis served as the Managing Director of Cypress Equities, the development subsidiary of The Staubach Company, from | |
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| Chair of the Board Age: Board Committees: None | | |
| 10 | 2024 PROXY STATEMENT | | | |
| Michael Christodolou | | | Mr. Christodolou has served as a director since August 2020. Mr. Christodolou is the Manager of Inwood Capital Management LLC, an investment management firm he founded in 2000. From 1988 to 1999, Mr. Christodolou was employed by Bass Brothers/Taylor & Company, an investment firm. Mr. Christodolou has served as a director of Lindsay Corporation (NYSE: LNN), a manufacturer of agricultural irrigation and transportation infrastructure products, since 1999 and served as Chair of the Board of Lindsay Corporation from 2003 to | |
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| Director Age: Board • Audit Committee | | |
| Heidi Everett | | | Ms. Everett has served as a director since August 2020. Ms. Everett is the President and Chief Executive Officer of Star Cypress Partners, LLC, a management consulting company that she founded in 2012. Previously, Ms. Everett was Vice President of The Wentworth Group, a private equity firm, and a Board Director for the Stafford Family Foundation. Prior to that, Ms. Everett was Lead Associate at Booz Allen Hamilton, an information technology consulting firm, within the Strategy & Organization Team from 2004 to 2011. From 1999 to 2003, Ms. Everett served as a Captain in the United States Air Force. Ms. Everett received an M.B.A. in Strategy and Operations from Georgetown University — The McDonough School of Business and a B.S. in Biology from Duke University. Ms. Everett’s broad consulting experience, in particular in strategy and organizational development, change management and workforce development, gives her a unique perspective that makes her a valued member of the Board. | |
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| Director Age: Board Committees: • |
Compensation Committee • |
| 11 | 2024 PROXY STATEMENT | | | |
| Matthew Troxell, CFA® | | | Mr. Troxell has served as a director since December 2019. From 1994 through December 2019, Mr. Troxell was a Managing Director of AEW Capital Management, LP (“AEW”), a real estate investment manager, where he served on both the | |
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| Director Age: 66 Board Committees: • Audit Committee • | | |
| Lori Wittman | | | Ms. Wittman has served as a director since December 2019 and, in November 2022, was appointed to serve as our Interim Chief Financial Officer and Treasurer until April 2023. Since April 2023, Ms. Wittman has served as Executive Vice President and Chief Financial Officer of Aventine Property Group, Inc., a privately-held REIT. Ms. Wittman previously served as an advisor to Big Rock Partners Acquisition Corp. (“Big Rock”), a blank check company, from February 2020 until the Compensation Committee | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Director • Nominating Committee | |
| 12 | 2024 PROXY STATEMENT | | | |
| Robin Zeigler | | | Ms. Zeigler has served as a director | |
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| Director Board Committees: • Compensation Committee • | | |
| | | | | Mark Manheimer | | | | Todd Minnis | | | | Lori Wittman | | | | Matthew Troxell | | | | Robin Zeigler | | | | Heidi Everett | | | | Michael Christodolou | |
| Expertise | | ||||||||||||||||||||||||||||
| Other Public Company Board | | | | | | | | | | | | ✓ | | | | | | | | ✓ | | | | | | | | ✓ | |
| Public Company CEO | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | | |
| Public Company CFO | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | |
| Executive Management | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | | |
| Real Estate | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | |
| REIT | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | | | | | ✓ | |
| Capital Markets | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | |
| Strategic Planning/M&A | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | |
| External Risk Oversight | | | | ✓ | | | | ✓ | | | | ✓ | | | | | | | | ✓ | | | | ✓ | | | | ✓ | |
| Internal Risk Oversight | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | |
| Human Capital Management | | | | ✓ | | | | ✓ | | | | | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | |
| Legal/Regulatory | | | | ✓ | | | | ✓ | | | | | | | | ✓ | | | | ✓ | | | | | | | | ✓ | |
| Technology | | | | ✓ | | | | ✓ | | | | | | | | ✓ | | | | ✓ | | | | ✓ | | | | | |
| Growth Company Experience | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | |
| ESG | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | |
| Marketing | | | | ✓ | | | | | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | | | | ✓ | |
| 13 | 2024 PROXY STATEMENT | | | |
| Daniel Donlan | | | Mr. Donlan has served as our | |
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| Chief Financial Officer and Treasurer Age: 42 | | |
| 14 | 2024 PROXY STATEMENT | | | |
| 15 | 2024 PROXY STATEMENT | | | |
| 16 | 2024 PROXY STATEMENT | | | |
| 17 | 2024 PROXY STATEMENT | | | |
| | | | | | | | | | | | | Board | | ||||||||
| Name | | | | Director Since | | | | Independent | | | | Audit | | | | Comp | | | | Nominating | |
| Mark Manheimer | | | | 2019 | | | | | | | | | | | | | | | | | |
| Todd Minnis | | | | 2019 | | | | | | | | | | | | | | | | | |
| Michael Christodolou | | | | 2020 | | | | | | | | | | | | | | | | ||
| Heidi Everett | | | | 2020 | | | | | | | | | | | | | | | |||
| Matthew Troxell | | | | 2019 | | | | | | | | | | | | | | | |||
| Lori Wittman | | | | 2019 | | | | | | | | | | | | | | | |||
| Robin Zeigler | | | | 2020 | | | | | | | | | | | | | | |
| 18 | 2024 PROXY STATEMENT | | | |
| 19 | 2024 PROXY STATEMENT | | | |
| Name | | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(1) | | | All Other Compensation ($) | | | Total ($) | | ||||||||||||
| Todd Minnis | | | | | | 88,791(2) | | | | | | 90,000 | | | | | | — | | | | | | 178,791 | | |
| Matthew Troxell | | | | | | 95,000(3) | | | | | | 90,000 | | | | | | — | | | | | | 185,000 | | |
| Robin Zeigler | | | | | | 87,500(3) | | | | | | 90,000 | | | | | | — | | | | | | 177,500 | | |
| Heidi Everett | | | | | | 75,000 | | | | | | 90,000 | | | | | | — | | | | | | 165,000 | | |
| Michael Christodolou | | | | | | 78,791(2)(3) | | | | | | 90,000 | | | | | | — | | | | | | 168,791 | | |
| 20 | 2024 PROXY STATEMENT | | | |
| | | | | Common Stock and Securities Exchangeable for Common Stock | | |||||||||
| Name of Beneficial Owner | | | | Number of Shares of Common Stock Beneficially Owned | | | Percent of Class(1) | | ||||||
| 5% or Greater Stockholders | | | | | | | | | | | | | | |
| Affiliates of Cohen & Steers, Inc.(2) | | | | | | 9,344,847 | | | | | | 12.7% | | |
| Blackrock, Inc.(3) | | | | | | 7,794,586 | | | | | | 10.6% | | |
| The Vanguard Group(4) | | | | | | 6,785,782 | | | | | | 9.3% | | |
| T. Rowe Price Investment Management, Inc.(5) | | | | | | 4,936,142 | | | | | | 6.7% | | |
| Morgan Stanley(6) | | | | | | 4,384,338 | | | | | | 6.0% | | |
| Affiliates of Citadel Advisors LLC(7) | | | | | | 4,108,199 | | | | | | 5.6% | | |
| Principal Real Estate Investors, LLC(8) | | | | | | 3,902,939 | | | | | | 5.3% | | |
| Affiliates of Integrated Core Strategies (US) LLC(9) | | | | | | 3,903,441 | | | | | | 5.3% | | |
| Named Executive Officers and Directors | | | | | | | | | | | | | | |
| Mark Manheimer(10) | | | | | | 221,789 | | | | | | * | | |
| Daniel Donlan(11) | | | | | | 2,600 | | | | | | * | | |
| Todd Minnis(12) | | | | | | 16,609 | | | | | | * | | |
| 21 | 2024 PROXY STATEMENT | | | |
| | | | | Common Stock and Securities Exchangeable for Common Stock | | |||||||||
| Name of Beneficial Owner | | | | Number of Shares of Common Stock Beneficially Owned | | | Percent of Class(1) | | ||||||
| Michael Christodolou(12) | | | | | | 21,879 | | | | | | * | | |
| Heidi Everett(12) | | | | | | 12,863 | | | | | | * | | |
| Matthew Troxell(12) | | | | | | 31,613 | | | | | | * | | |
| Lori Wittman(13) | | | | | | 17,680 | | | | | | * | | |
| Robin Zeigler(12) | | | | | | 13,151 | | | | | | * | | |
| All executive officers and directors as a | | | | | | 338,184 | | | | | | * | | |
| 22 | 2024 PROXY STATEMENT | | | |
| Named Executive Officer | | | | Title | |
| Mark Manheimer | | | | President, Chief Executive Officer and Secretary | |
| Daniel Donlan(1) | | | | Chief Financial Officer and Treasurer | |
| Lori Wittman(2) | | | | Former Interim Chief Financial Officer and Treasurer | |
| Compensation Factor | | | | Feedback and Analysis | | | | Actions Taken | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Peer Group Composition | | | | • Peer group should include better size comparisons to ensure the Company makes appropriate pay level decisions | | | | • Removed 4 of the largest companies from our peer group • Added 3 additional REITs, all of implied equity market capitalization
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| Severance Benefits | | | | •
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| Stockholder Alignment and Governance Enhancements | | | | • | | | | • | |
| 23 | 2024 PROXY STATEMENT | | | |
| Compensation Factor | | | | Feedback and Analysis | | | | Actions Taken | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | compensation consultant, it was noted that best practice includes strong alignment between stockholder and | | | | stockholders, in February 2024, the Board (i) increased the CEO’s stock ownership requirement from 5X to 6X annual
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| 24 | 2024 PROXY STATEMENT | | | |
| Peer Company | | | | Reviewed in 2023 Compensation(1) | | | | Reviewed in
| Agree Realty (ADC) | | | | ✓ | | | | ✓ | | | Chatham Lodging Trust (CLDT) | | | | ✓ | | | | ✓ | | | Essential Properties Realty Trust (EPRT) | | | | ✓ | | | | ✓ | | | Four Corners Property Trust (FCPT) | | | | ✓ | | | | ✓ | | | Getty Realty (GTY) | | | | ✓ | | | | ✓ | | | Pebblebrook Hotel Trust (PEB) | | | | ✓ | | | | | | | Retail Opportunity Investments (ROIC) | | | | ✓ | | | | ✓ | | | RLJ Lodging Trust (RLJ) | | | | ✓ | | | | | | | RPT Realty (RPT) | | | | ✓ | | | | | | | SITE Centers (SITC) | | | | ✓ | | | | | | | Spirit Realty Capital (SRC) | | | | ✓ | | | | | | | Urban Edge Properties (UE) | | | | ✓ | | | | ✓ | | | Community Healthcare Trust (CHCT) | | | | | | | | ✓ | | | Peakstone Realty Trust (PKST) | | | | | | | | ✓ | | | Plymouth Industrial REIT (PLYM) | | | | | | | | ✓ | | |
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| Name | | | | 2023 Base Salary Rate ($) (Effective January 1, 2023) | | |||
| Mark Manheimer | | | | | | 700,000 | | |
| Daniel Donlan | | | | | | 350,000 | | |
| | | | | | | | | | | Performance Level(1) | | ||||||
| Performance Goal | | | | Weighting | | | Threshold (50% Earned) | | | Target (100% Earned) | | | Maximum (200% Earned) | | |||
| Absolute TSR | | | | | | 60% | | | | 21% | | | 27% | | | 33% | |
| Relative TSR | | | | | | 40% | | | | 35th percentile | | | 55th percentile | | | 75th percentile | |
| 26 | 2024 PROXY STATEMENT | | | |
| | | | | Short-Term Incentive Opportunity as % of Base Salary(1) | | | | | | | | |||||||||||||||
| Name | | | | Threshold | | | Target | | | Maximum | | | Target STI ($) | | ||||||||||||
| Mark Manheimer | | | | | | 50% | | | | | | 100% | | | | | | 200% | | | | | | 700,000 | | |
| Daniel Donlan | | | | | | 50% | | | | | | 100% | | | | | | 200% | | | | | | 350,000 | | |
| Corporate Performance Goal | | | | Weighting | | | Threshold (50%) | | | Target (100%) | | | Maximum (200%) | | | Actual Performance | | | Achievement | | ||||||
| AFFO/Share(1) | | | | | | 35% | | | | $1.17 | | | $1.22 | | | $1.29 | | | $1.22 | | | | | 100.0% | | |
| Portfolio Investment Grade/Investment Grade Profile %(2) | | | | | | 15% | | | | 75% | | | 80% | | | 85% | | | 82.9% | | | | | 158.5% | | |
| Leverage(3) | | | | | | 15% | | | | 6.00x | | | 5.25x | | | 4.50x | | | 4.95x | | | | | 140.0% | | |
| Occupancy(4) | | | | | | 15% | | | | 97.75% | | | 98.50% | | | 99.25% | | | 100.0% | | | | | 200.0% | | |
| Subjective(5) | | | | | | 20% | | | | 1 | | | 3 | | | 5 | | | 4 | | | | | 150.0% | | |
| Total: | | | | | | 100% | | | | | | | | | | | | | | | | | | 139.8% | | |
| 27 | 2024 PROXY STATEMENT | | | |
| Name | | | | 2023 Annual STI Payout Percentage (% of Target) | | | 2023 Annual STI ($)(1) | | ||||||
| Mark Manheimer | | | | | | 139.8% | | | | | | 978,425 | | |
| Daniel Donlan | | | | | | 139.8% | | | | | | 489,213 | | |
| Name | | | | Shares Underlying RSU Grant (#) | | | Aggregate Fair Value of RSU Grant ($) | | ||||||
| Mark Manheimer(1) | | | | | | 45,567 | | | | | | 920,000 | | |
| | | |
| Name | | | | Target Shares Underlying PSU Grant (#) | | | Aggregate Fair Value of PSU Grant ($) | | ||||||
| Mark Manheimer | | | | | | 63,968 | | | | | | 1,380,000 | | |
| | | | | | | | | | | Performance Level(1) | | ||||||
| Performance Goal | | | | Weighting | | | Threshold (50% Earned) | | | Target (100% Earned) | | | Maximum (200% Earned) | | |||
| Absolute TSR | | | | | | 60% | | | | 18% | | | 24% | | | 30% | |
| Relative TSR | | | | | | 40% | | | | 35th percentile | | | 55th percentile | | | 75th percentile | |
| 2023 PSU Awards — RTSR Comparator Group
Daniel Donlan New Hire Compensation Mr. Donlan commenced serving as our Chief Financial Officer and Treasurer in April 2023. In connection with his hire, we granted Mr. Donlan a new hire RSU award in order to incentivize Mr. Donlan to join the Company and to make up for compensation he would forfeit in connection with leaving his prior employer. The RSU award had an aggregate grant date fair value of $650,000, which vests annually in three equal installments commencing on April 10, 2024, subject to Mr. Donlan’s continued service through each vesting date. In addition, to assist with Mr. Donlan’s relocation to the Dallas, Texas area, we reimbursed Mr. Donlan for certain relocation and related travel expenses and provided a tax gross-up on such expenses. Resignation of Lori Wittman as Interim Chief Financial Officer On November 6, 2022, Lori Wittman was appointed as our Interim Chief Financial Officer and Treasurer, effective November 7, 2022, to serve while the Board conducted a formal search process to identify and appoint a permanent Chief Financial Officer. In connection with Ms. Wittman’s appointment as
our Interim Chief Financial Officer and Treasurer, we entered into an offer letter with Ms. Wittman, pursuant to which Ms. Wittman was entitled to receive (i) $75,000 per month as compensation for her service and (ii) an RSU award with an aggregate grant date fair value of $90,000, which was granted in February 2023. Effective April 7, 2023, in connection with the appointment of Mr. Donlan as our Chief Financial Officer and Treasurer, Ms. Wittman resigned from her positions as our Interim Chief Financial Officer and Treasurer. During the term of her employment with the Company, Ms. Wittman continued to serve as a director but did not receive any compensation in respect of her Board service during that time. Ms. Wittman was not eligible to participate in the STI program in 2023 or in the Alignment of Interest Program, and she was not eligible to receive any severance benefits in connection with the termination of her service as Interim Chief Financial Officer and Treasurer. Other Benefits Employee Benefit and Retirement Programs We maintain a health and welfare plan and a qualified defined contribution 401(k) plan in which all of our eligible employees, including our executive officers, may participate. The Company will match 100% of up to the first 3% and 50% for the next 2% of a participant’s deferral per year under the 401(k) plan. Eligible employees are 100% vested in their 401(k) plan accounts. Perquisites We generally do not provide perquisites or personal benefits to our named executive officers. Employment Agreements and Severance Benefits We generally provide our named executive officers with certain severance protections in their employment agreements in order to attract and retain an appropriate caliber of talent for such positions. Our employment agreements with named executive officers and the severance provisions set forth therein are summarized below under “— Employment Agreements” and “— Potential Payments upon Termination or Change in Control.” We intend to periodically review the level of the benefits in these agreements. Governance and Other Considerations Stock Ownership Requirements Under the Company’s stock ownership guidelines, our executive officers and non-employee directors must meet their applicable stock ownership requirement as set forth in the table below within five years from the date they first become subject to that particular level of stock ownership: (1) In February 2024, our Board increased the Chief Executive Officer’s stock ownership requirement from 5X to 6X annual salary to be in line with best practices that align with stockholder and market expectations. Individual ownership interest is reviewed annually as of the last day of the calendar year. The dollar value of shares at the end of a given calendar year is determined using the average of the month-end closing prices of our common stock for the prior 12 months preceding the applicable measurement date. Shares that count toward satisfaction of these guidelines include: (1) shares owned outright by the individual; (2) shares owned jointly by the individual and his or her spouse or held in a trust established by the individual for the benefit of the individual or his/her family members; and (3) limited partnership units of NETSTREIT, L.P. Any unvested equity awards are not counted toward satisfaction of these stock ownership guidelines. Until an individual subject to the stock ownership guidelines meets his or her applicable stock ownership requirement, he or she must retain 50% of the net shares issued to the individual upon exercise, vesting, settlement or earn-out of an equity award. This retention requirement is applied on an award-by-award basis until the applicable stock ownership requirement has been met. As of December 31, 2023, all of our executive officers and non-employee directors were in compliance with our stock ownership guidelines. Prohibition on Hedging and Pledging The Company’s Insider Trading Policy (the “Policy”) prohibits directors and employees, including our named executive officers, from (1) entering into hedging or monetization transactions involving our Company stock and (2) holding our Company stock in a margin account or pledging our Company stock as collateral for a loan. We maintain this policy because such transactions could create the appearance that the person is trading on inside
information, and we believe this policy serves to further align the interests of our employees, executives and directors with our stockholders’ interests. An excerpt from the Policy is set forth below: Margin Accounts and Pledges. Persons subject to this Policy may not pledge any Company securities as collateral for a loan and such person may not hold Company securities as collateral in a margin account. Such persons may not have control over these transactions as the securities may be sold at certain times without such person’s consent. A margin or foreclosure sale that occurs when a person subject to this Policy is aware of material, nonpublic information may, under some circumstances, result in unlawful insider trading. Hedges and Monetization Transactions. Persons subject to this Policy may not engage in hedging or monetization transactions, through transactions in Company securities or through the use of financial instruments designed for such purpose. Such hedging and monetization transactions may permit a person to own Company securities, but without the full risks and rewards of ownership. When that occurs, the person may no longer have the same objectives as the Company’s stockholders generally. Clawback Policy In October 2023, our Board adopted a new clawback policy that complies with the new listing standards adopted by the NYSE that implement the new SEC rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act and applies to our executive officers (as defined in applicable SEC rules). The policy requires the Company to recover from covered executive officers the amount of erroneously awarded incentive compensation resulting from an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws. This policy applies to incentive compensation that is received by a covered officer on or after October 2, 2023. Our prior clawback policy, which still applies to incentive compensation received before October 2, 2023, provides that, in the event the Company is required by applicable U.S. federal securities laws to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under such securities laws, the Company may recover from executive officers who received incentive compensation during the three-year period preceding the date on which the Company is required to prepare an accounting restatement, based on the erroneous data, the amount, if any, in excess of what would have been paid to the executive officers under the accounting restatement. In determining what actions to take under our prior clawback policy, the Committee will take into account all relevant factors, including whether the executive officer engaged in fraud, misconduct or other bad-faith action that caused or partially caused the need for the restatement. Our clawback policies are administered by the Committee. Equity Grant Practices Our equity incentive grant policy generally provides that annual grants to executive officers pursuant to our long-term incentive program occur on the second trading day following the filing date of our Annual Report on Form 10-K that occurs after the date on which such grants are approved by our compensation committee. Accordingly, our long-term incentive equity incentive grant policy generally requires that grants to our executive officers be made shortly after we have released information about our financial performance to the public for the applicable annual period. As a result, the timing of equity awards is not coordinated in a manner that intentionally benefits our executive officers. Tax and Accounting Implications One of the factors the Committee considers when determining executive compensation is the anticipated tax treatment to the Company and to the executives of the various payments and benefits. Section 162(m) of the Internal Revenue Code (“Section 162(m)”) generally provides that a publicly held company may not deduct compensation paid to certain covered executive officers to the extent that such compensation exceeds $1,000,000 per executive officer in any year. While the Committee generally considers this limit when determining compensation, there are instances in which the Committee has concluded, and reserves the discretion to conclude in the future, that it is appropriate to exceed the limitation on deductibility under Section 162(m) to ensure that executive officers are compensated in a manner that it believes to be consistent with the Company’s best interests and those of its stockholders.
EXECUTIVE COMPENSATION Summary Compensation Table The following Summary Compensation Table discloses compensation information for fiscal years 2023, 2022 and 2021 with respect to our principal executive officer, our principal financial officer and our former principal financial officer (collectively, our “named executive officers”). As explained above in the Compensation Discussion and Analysis, because we only had three “executive officers” as defined in Exchange Act Rule 3b-7 during 2023, we only have three named executive officers. Certain other information is provided in the narrative sections following the Summary Compensation Table.
(1) The amounts reported in this column for 2023 reflect the aggregate fair value of time-vested RSU awards, PSUs, and 2023 Additional RSUs (as described below) granted in 2023 to our named executive officers, calculated in accordance with FASB ASC Topic 718. Under the Alignment of Interest Program, a participant may elect to reduce cash compensation in exchange for the issuance of an award of RSUs under the Omnibus Plan (“Alignment RSUs”), and the participant will receive an additional award of RSUs under the Omnibus Plan of 0.25x the number of Alignment RSUs (the “Alignment Multiplier”), as described in the Compensation Discussion and Analysis above under the heading “Executive Compensation Components — Alignment of Interest Program” (such RSUs issued as a result of the Alignment Multiplier, the “Additional RSUs”). Mr. Manheimer elected to receive 50% of his 2022 STI payments in the form of RSUs under the Alignment of Interest Program. The 2022 Alignment RSUs are reported in the “Non-Equity Incentive Plan Compensation” column for 2022. In addition, based on the Alignment Multiplier, Mr. Manheimer was granted 4,255 Additional RSUs in 2023 with respect to his 2022 STI payments (the “2023 Additional RSUs”), which are reported in the “Stock Awards” column for 2023. The 2023 grant date values by award type are shown below. There can be no assurance that these values will ever be realized. For a discussion of the assumptions and methodologies used in calculating the grant date values, please see Note 10 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
(2) The amount reported for Mr. Manheimer in the “Non-Equity Incentive Plan Compensation” column for 2023 represent the amounts earned under the Company’s 2023 STI program, as described above in the Compensation Discussion and Analysis under the heading “Executive Compensation Components — Short-Term Incentive Program.” Fifty percent (50%) of the amount reported in this column for Mr. Manheimer for 2023 was paid in the form of RSUs pursuant to the Alignment of Interest Program (the “2023 Alignment RSUs”), as described in the Compensation Discussion and Analysis above under the heading “Executive Compensation Components — Alignment of Interest Program.” Based on the Alignment Multiplier, Mr. Manheimer was granted 7,057 Additional RSUs in 2024 with respect to his 2023 STI payment pursuant to the Alignment of Interest Program (the “2024 Additional RSUs”) described in the Compensation Discussion and Analysis above under the heading “Executive Compensation Components — Alignment of Interest Program.” The 2024 Additional RSUs will be reported in the “Stock Awards” column for 2024 that will be included in the Company’s proxy statement relating to the 2025 Annual Meeting of Stockholders. (3) The amounts reported in this column for 2023 represent (i) for Mr. Manheimer, $13,800 in employer matching contributions under the Company’s 401(k) plan made of $13,800 and $72 in life insurance premiums, (ii) for Mr. Donlan, $65,809 for certain relocation and related travel expenses related to his relocation to the Dallas, Texas area, a $42,032 tax gross-up on such expenses and $72 in life insurance premiums and (iii) for Ms. Wittman, represent non-employee director compensation paid in cash. (4) As described in the Compensation Discussion and Analysis above under the heading “— Long-Term Incentive Awards,” due to an inadvertent administrative error, Mr. Manheimer’s 2023 RSU and PSU awards were smaller than the Compensation Committee had originally intended. Mr. Manheimer received a supplemental time-based RSU award in March 2024 to correct this error. In accordance with SEC rules, this supplemental RSU award will be reported as 2024 compensation. (5) Mr. Donlan was appointed Chief Financial Officer and Treasurer, effective April 10, 2023. Mr. Donlan was not a named executive officer in 2021 or 2022 and thus, only 2023 compensation information is shown for him in this table.
(6) Ms. Wittman voluntarily resigned as Interim Chief Financial Officer and Treasurer, effective April 7, 2023. Ms. Wittman was not a named executive officer in 2021 and thus, only 2022 and 2023 compensation information is shown for her in this table. Employment and Transition Agreements Amended and Restated Employment Agreement On February 22, 2022, we entered into an amended and restated employment agreement (the “Manheimer Employment Agreement”) with Mr. Manheimer. The Manheimer Employment Agreement provides for, among other things: (1) an annual base salary of $600,000; (2) an annual cash incentive bonus with a target bonus opportunity of 100% of annual base salary, with the actual amount earned ranging from 0% to 200% of target based on actual achievement against performance metrics to be established by the Compensation Committee; (3) eligibility to receive annual long term incentive compensation awards in form, including vesting restrictions, and amount determined in the sole discretion of the Compensation Committee and the Board; and (4) participation in the Company’s employee benefit and welfare plans. The Manheimer Employment Agreement also provides for a three-year term, with automatic one-year renewals thereafter unless either party provides 60 days’ notice of intent not to renew the term. Our non-renewal of the term will constitute a termination without cause (as defined in the Manheimer Employment Agreement). Effective January 1, 2023, the Compensation Committee increased Mr. Manheimer’s annual base salary to $700,000. Pursuant to the Manheimer Employment Agreement, Mr. Manheimer was entitled to receive severance payments and benefits as of December 31, 2023, as described below under the heading “Potential Payments Upon Termination or Change in Control.” CFO Transition Ms. Wittman, who serves as a director of the Company, was appointed as Interim Chief Financial Officer and Treasurer, effective November 7, 2022, to serve while the Board conducted a formal search process to identify and appoint a permanent Chief Financial Officer. In connection with the transition, we entered into an offer letter with Ms. Wittman, pursuant to which Ms. Wittman was entitled to receive (i) $75,000 per month as compensation for her service and (ii) an RSU award with an aggregate grant date fair value of $90,000, which was granted in February 2023. Ms. Wittman agreed to serve as Interim Chief Financial Officer and Treasurer for a term of six months, subject to successive one-month extensions, and continued to serve as a director during the term of her employment with the Company but did not receive any compensation in respect of her Board service during that time. Ms. Wittman was not eligible to participate in the Alignment of Interest Program and was not eligible to receive any severance benefits in connection with the termination of her service as Interim Chief Financial Officer and Treasurer. Ms. Wittman resigned as Interim Chief Financial Officer and Treasurer, effective April 7, 2023, and Mr. Donlan was appointed as Chief Financial Officer and Treasurer, effective April 10, 2023. In connection with Mr. Donlan’s appointment, we entered into an employment agreement with Mr. Donlan (the “Donlan Employment Agreement” and, together with the Manheimer Employment Agreement, the “Employment Agreements”), which provides for, among other things: (1) an annual base salary of $350,000; (2) an annual cash incentive bonus with a target bonus opportunity of 100% of annual base salary, with the actual amount earned ranging from 0% to 200% of target based on actual achievement against performance metrics to be established by the Compensation Committee; (3) an initial equity grant with a grant date of April 10, 2023 with an aggregate grant date fair value of $650,000, which will vest in substantially equal annual installments on each of the first three anniversaries of the grant date; (4) a relocation expense reimbursement of $25,000 in connection with Mr. Donlan’s relocation to the Dallas, Texas area; (5) eligibility to receive annual long term incentive compensation awards in form, including vesting restrictions, in an amount determined in the sole discretion of the Compensation Committee; and (6) participation in the Company’s employee benefit and welfare plans. The Donlan Employment Agreement also provides for a three-year term, with automatic one-year renewals thereafter unless either party provides 60 days’ notice of intent not to renew the term. Effective January 1, 2024, the Compensation Committee increased Mr. Donlan’s annual base salary to $375,000. Pursuant to the Employment Agreement, Mr. Donlan was entitled to receive severance payments and benefits as of December 31, 2023, as described below under the heading “Potential Payments Upon Termination or Change in Control.” Grants of Plan-Based Awards The following table shows certain information regarding grants of plan-based awards during the fiscal year ended December 31, 2023 to our named executive officers.
(1) The threshold, target, and maximum annual incentive amounts represent 50%, 100% and 200%, respectively, of the target STI opportunity for each named executive officer. If actual performance falls between threshold and target or between target and maximum, the award would be calculated using linear interpolation. The annual incentive awards are also based on a percentage of base salary, which is 100% each of the named executive officers. The target amount is generally the named executive officer’s base salary multiplied by his or her target opportunity. The dollar value of the actual non-equity plan incentive compensation earned for the year ended December 31, 2023 for each named executive officer is set forth in the Summary Compensation Table above. As such, the amounts set forth in this column do not represent either additional or actual compensation earned by the named executive officers for the year ended December 31, 2023. (2) See “Long-Term Incentives — PSUs” below for an explanation regarding the vesting and distribution of the PSUs. (3) The annual RSU awards were granted pursuant to our Omnibus Plan. The RSUs granted to Messrs. Manheimer and Donlan vest ratably on each of the first three anniversaries of the grant dates included above, respectively, generally subject to each executive’s continued employment through each vesting date. The RSUs granted to Ms. Wittman vest 100% on the first anniversary of the grant date, generally subject to continued service as a director through the vesting date. (4) For a discussion of the assumptions and methodologies used in calculating the grant date values, please see Note 10 to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. (5) As described above under footnote (1) to the Summary Compensation Table, Mr. Manheimer was granted 4,255 2023 Additional RSUs. These 2023 Additional RSUs vest ratably on each of the first three anniversaries of February 28, 2023, generally subject to Mr. Manheimer’s continued employment through each vesting date. See the Compensation Discussion and Analysis above under the heading “Executive Compensation Components — Alignment of Interest Program” for more detail. Short-Term Incentives A summary description of the Company’s STI program is included in the Compensation Discussion and Analysis above under the heading “Elements of Compensation — Short-Term Incentive Program.” Long-Term Incentives The PSUs and RSUs were granted pursuant to the Omnibus Plan, a summary description of which is included in the Compensation Discussion and Analysis above under the heading “Elements of Compensation — Long-Term Incentive Awards.” PSUs Vesting of each PSU award is contingent on the Company attaining certain levels of absolute TSR and relative TSR over the three-year performance period ending on February 28, 2026. 60% of each PSU award can be earned based on absolute TSR performance and 40% can be earned based on the Company’s TSR performance relative to the TSR performance of a specified peer group. If threshold, target or maximum performance goals are attained in a performance period, 50%, 100% or 200% of the target amount, respectively, may be earned. If actual performance falls between threshold and maximum, the award would be calculated using linear interpolation. For a description of the effect of a termination of employment or a change in control on the vesting of PSUs, please see “Potential Payments Upon Termination or Change in Control.” RSUs The RSUs granted to Messrs. Manheimer and Donlan vest and settle in shares of common stock in substantially equal annual installments on each of the first three anniversaries of the grant date, generally subject to the executive’s continued employment through each vesting date. The RSUs granted to Ms. Wittman vest 100% on the first anniversary of the grant date, generally subject to continued service as a director through the vesting date. For a description of the effect of a termination of employment on the vesting of RSUs, please see “Potential Payments Upon Termination or Change in Control.” Alignment of Interest Program A summary description of the Alignment of Interest Program is included in the Compensation Discussion and Analysis above under the heading “Elements of Compensation — Alignment of Interest Program.” Pursuant to the Alignment of Interest Program, eligible individuals may elect to receive RSUs under the Omnibus Plan in lieu of a specified percentage of cash compensation. The amount of compensation that a participant elects to reduce will be applied to the issuance of an award of Alignment RSUs, and the participant will receive an award of Additional RSUs under the Omnibus Plan based upon the Alignment Multiplier. In 2023, Mr. Manheimer received 2022 Alignment RSUs in lieu of cash payment of 50% of his 2022 STI payments (as reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for 2022) and 2023 Additional RSUs corresponding to the Alignment Multiplier (as reported in the “Stock Awards” column of the Summary Compensation Table for 2023 and as shown in the Grants of Plan-Based Awards Table above). Mr. Manheimer also elected to receive Alignment RSUs in 2024 in lieu of 50% of his STI compensation payable with respect to the Company’s 2023 fiscal year (as reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for 2023). The 2024 Additional RSUs will be reported in the “Stock Awards” column for 2024 that will be included in the Company’s proxy statement relating to the 2025 Annual Meeting of Stockholders.
Outstanding Equity Awards at 2023 Fiscal Year-End The following table shows outstanding equity awards as of December 31, 2023 held by our named executive officers.
(1) The value of the unvested RSU awards is shown assuming a market value of $17.85 per share, the closing market price of a share of our common stock on December 29, 2023. (2) On February 28, 2023, Mr. Manheimer received an annual award of RSUs under the Omnibus Plan. These RSUs vest ratably on each of the first three anniversaries of the grant date, generally subject to Mr. Manheimer’s continued service through each vesting date. (3) The total amounts and values in columns (i) and (j) represent the total number of PSUs at the threshold level for the 2023-2026 performance period, which remain subject to the achievement of the applicable performance goals, held by Mr. Manheimer multiplied by a market value of $17.85 per share, the closing market price of a share of our common stock on December 29, 2023. In calculating the number of PSUs and their value, we are required by SEC rules to compare our performance through 2023 under the PSU grant against the threshold, target and maximum performance levels for the grant and report in these columns the applicable potential share number and payout amount. If the performance is between levels, we are required to report the potential payout at the next highest level. Based on performance through the end of the first year of the 2023-2026 performance period, we have reported the PSUs at the threshold award level for this performance period. (4) Represents 2022 Alignment RSUs. These RSUs vest ratably on each of the first three anniversaries of February 28, 2023, generally subject to Mr. Manheimer’s continued service through each vesting date. (5) Represents 2023 Additional RSUs. These RSUs vest ratably on each of the first three anniversaries of February 28, 2023, generally subject to Mr. Manheimer’s continued service through each vesting date. (6) On February 28, 2022, Mr. Manheimer received an annual award of RSUs under the Omnibus Plan. These RSUs vest ratably on each of the first three anniversaries of the grant date, generally subject to Mr. Manheimer’s continued service through each vesting date. (7) The total amounts and values in columns (i) and (j) represent the total number of PSUs at the threshold level for the 2022-2025 performance period, which remain subject to the achievement of the applicable performance goals, held by Mr. Manheimer multiplied by a market value of $17.85 per share, the closing market price of a share of our common stock on December 29, 2023. In calculating the number of PSUs and their value, we are required by SEC rules to compare our performance through 2023 under the PSU grant against the threshold, target and maximum performance levels for the grant and report in these columns the applicable potential share number and payout amount. If the performance is between levels, we are required to report the potential payout at the next highest level. Based on performance through the end of the first year of the 2022-2025 performance period, we have reported the PSUs at the threshold award level for this performance period. (8) Represents 2021 Alignment RSUs. These RSUs vest ratably on each of the first three anniversaries of February 28, 2022, generally subject to Mr. Manheimer’s continued service through each vesting date. (9) Represents 2022 Additional RSUs. These RSUs vest ratably on each of the first three anniversaries of February 28, 2022, generally subject to Mr. Manheimer’s continued service through each vesting date. (10) On March 8, 2021, Mr. Manheimer received annual awards of RSUs under the Omnibus Plan. These RSUs vest ratably on each of the first three anniversaries of the grant date, generally subject to Mr. Manheimer’s continued employment through each vesting date. (11) The total amounts and values in columns (i) and (j) represent the total number of PSUs at the threshold level for the 2021-2024 performance period, which remain subject to the achievement of the applicable performance goals, held by each named executive officer multiplied by a market value of
$17.85 per share, the closing market price of a share of our common stock on December 29, 2023. In calculating the number of PSUs and their value, we are required by SEC rules to compare our performance through 2023 under the PSU grant against the threshold, target and maximum performance levels for the grant and report in these columns the applicable potential share number and payout amount. If the performance is between levels, we are required to report the potential payout at the next highest level. Based on performance through the end of the second year of the 2021-2024 performance period, we have reported the PSUs at the threshold award level for this performance period. (12) Represents 2020 Alignment RSUs. These RSUs vest ratably on each of the first three anniversaries of March 8, 2021, generally subject to Mr. Manheimer’s continued employment through each vesting date. (13) Represents 2021 Additional RSUs. These RSUs vest ratably on each of the first three anniversaries of March 8, 2021, generally subject to Mr. Manheimer’s continued employment through each vesting date. (14) Mr. Manheimer received awards of RSUs under the Omnibus Plan in connection with our initial public offering. These RSUs vest ratably on each of the first five anniversaries of August 17, 2020, generally subject to Mr. Manheimer’s continued employment through each vesting date. (15) Mr. Manheimer received awards of RSUs under the Omnibus Plan in connection with a private offering of our common stock that occurred prior to our initial public offering. These RSUs vest ratably on each of the first five anniversaries of December 23, 2019, generally subject to Mr. Manheimer’s continued employment through each vesting date. (16) On April 10, 2023, Mr. Donlan received an annual award of RSUs under the Omnibus Plan. These RSUs vest ratably on each of the first three anniversaries of the grant date, generally subject to Mr. Donlan’s continued service through each vesting date. (17) On February 28, 2023, Ms. Wittman received an annual award of RSUs under the Omnibus Plan. These RSUs vest 100% on the first anniversary of the grant date, generally subject to continued service as a director through the vesting date. Stock Vested in 2023 The following table summarizes the vesting of RSUs held by our named executive officers during 2023. The Company does not issue stock options and, therefore, no stock options were exercised in 2023 by our named executive officers.
(1) Represents the vesting of RSU awards granted in 2019, 2020, 2021 and 2022. (2) The value realized on vesting is equal to the number of shares multiplied by the closing price of the shares of common stock at the time of vesting. Potential Payments Upon Termination or Change in Control The tables below show estimates of the compensation payable to each of our named executive officers (other than Ms. Wittman) upon their termination of employment with the Company and/or upon a change in control, calculated as if the triggering event had occurred effective December 31, 2023. The actual amounts due to any one of the named executive officers upon termination of employment can only be determined at the time of the termination. There can be no assurance that a termination or change in control would produce the same or similar results as those described below if it occurs on any other date or at any other stock price, or if any assumption is not, in fact, correct. Ms. Wittman voluntarily resigned as Interim Chief Financial Officer and Treasurer, effective April 7, 2023, and as such, she is not included in the table below. Ms. Wittman did not receive any payments or benefits in connection with her resignation.
(1) A description of the cash severance obligations under the employment agreements with the named executive officers is set forth below. (2) The amounts in this row represent accelerated vesting of RSUs, valued based on the December 29, 2023 closing price of a share of the Company’s common stock ($17.85), as described below. (3) The amounts in this row represent accelerated vesting of PSUs, assuming target performance, valued based on the December 29, 2023 closing price of a share of the Company’s common stock ($17.85). A description of the relevant agreements with Mr. Manheimer are set forth below. (4) The amounts in this row represent continued payment for the cost of Messrs. Manheimer’s and Donlan’s premiums for health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), as described below. (5) Assuming a hypothetical termination on December 31, 2023, the amounts in this row represent the STI awards Messrs. Manheimer and Donlan actually earned with respect to 2023. This amount has not been prorated because it assumes service through the full 2023 year. Change in Control The Employment Agreements do not provide for benefits solely upon the occurrence of a change in control. The vesting of Mr. Manheimer’s PSUs would accelerate immediately upon a change in control only if the Company was not the surviving company and the PSUs were not assumed by the successor or replaced with economically equivalent awards, at the greater of (i) target or (ii) actual performance through the date of the change in control. “Change in control” is as defined in the Omnibus Plan and generally means (i) during any period of 24 months, individuals who constitute the Board at the beginning of the period (the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, that a new director of the Company whose election or nomination for election as a director of the Company was approved by a vote of at least two-thirds of the Incumbent Directors will be deemed to be an Incumbent Director, (ii) any person acquires beneficial ownership, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding voting securities; subject to certain limitations set forth in the Omnibus Plan, (iii) the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company that requires the approval of the Company’s stockholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless following such Business Combination: (a) at least 50% of the total voting power in the election of directors, generally, of (x) the surviving entity, or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of at least 95% of the voting power in the election of directors, generally, of the surviving entity, is represented by Company voting securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company voting securities were converted or exchanged pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company voting securities among the holders thereof immediately prior to the Business Combination, (b) no person is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities entitled to vote generally in the election of directors of the parent, generally (or, if there is no parent, the surviving entity) and (c) at least 50% of the directors of the parent (or, if there is no parent, the surviving entity) following the consummation of the Business Combination were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination, (iv) the consummation of a sale of all or substantially all of the Company’s assets (other than to an affiliate of the Company), or (v) the Company’s stockholders approve a plan of complete liquidation or dissolution of the Company. A change in control shall not be deemed to have occurred solely by virtue of a decrease in shares outstanding due to the acquisition of Company voting securities by the Company. Termination without Cause or for Good Reason (Non-Change in Control) Pursuant to the Manheimer Employment Agreement, upon a termination of Mr. Manheimer’s employment by the Company without “cause” or by Mr. Manheimer for “good reason” occurring on December 31, 2023, subject to a general release of claims in favor of the Company, Mr. Manheimer would have been entitled to: (i) cash severance equal to two times the sum of his base salary and his target bonus opportunity, (ii) any earned but unpaid annual bonus with respect to the year prior to the year of the termination, (iii) a pro rata bonus for the year of the termination (based on actual performance), (iv) full acceleration of time-based equity awards and pro-rated vesting of performance-based equity awards, based on actual performance, and (v) Company payment of the cost of continued health coverage for up to 18 months post-termination. Pursuant to the Donlan Employment Agreement, upon a termination of Mr. Donlan’s employment by the Company without “cause” or by Mr. Donlan for “good reason” occurring on December 31, 2023, subject to a general release of claims in favor of the Company, Mr. Donlan would have been entitled to: (i) cash severance equal to the sum of his base salary and his target bonus opportunity; (ii) any earned but unpaid annual bonus with respect to the year prior to the year of the termination; (iii) a pro rata bonus for the year of the termination (based on actual performance); (iv) full acceleration of time-based
equity awards and pro-rated vesting of any performance-based equity awards, based on actual performance; and (v) Company payment of the cost of continued health coverage for up to 18 months post-termination. Pursuant to the Employment Agreements, “cause” generally means the executive’s: (i) conviction of, or plea of guilty or no contest to, any felony or any crime involving fraud or moral turpitude, (ii) commission of any acts or omissions constituting gross negligence or gross misconduct that causes material financial or reputation harm to the company, (iii) commission of fraud, theft, embezzlement, self-dealing, misappropriation or other malfeasance against the business of the Company, (iv) violation of any of the material terms of the Employment Agreements or any written Company policy, (v) breach of fiduciary duty owed to the Company, (vi) failure to perform any material aspect of the executive’s lawful duties or responsibilities of employment or failure to comply with any lawful directive of our Board or (vii) disqualification or bar by any governmental or self-regulatory authority from serving in the capacity required by the executive’s job description, or loss of any governmental or self-regulatory license that is reasonably necessary for the executive to perform his duties or responsibilities. Pursuant to the Employment Agreements, “good reason” generally means the occurrence of one or more of the following, without written consent: (i) a material reduction in his base salary, other than a reduction of no more than 10% in connection with a comparable decrease applicable to all similarly situated senior executives of the Company, (ii) a material adverse diminution in duties, responsibilities or authority on behalf of the Company, (iii) a requirement that the executive permanently relocate his primary place of employment more than 50 miles from the Dallas, Texas area, which materially increases the commute to work, or (iv) any breach by the Company of a material term of the relevant employment agreement; provided, that no good reason for termination shall exist unless (x) the executive has given the Company written notice detailing the specific circumstances alleged to constitute good reason within 30 days after the first occurrence of such circumstances, (y) the Company has failed to cure such circumstances in all material respects within 30 days following the receipt of such notice, and (z) his resignation of employment for good reason is effective within 30 days following the end of the cure period. In addition, pursuant to the Employment Agreements, Messrs. Manheimer and Donlan will be subject to confidentiality and non-disparagement provisions, which apply indefinitely, and non-competition as well as client and employee non solicitation provisions that apply during the term of the employment agreement and for one year following a termination of his employment for any reason (other than in the event of a Qualifying CIC Termination (as defined below) or a resignation for good reason). Termination without Cause or for Good Reason (Change in Control) Under the Employment Agreements, Messrs. Manheimer and Donlan would also have been entitled to the severance benefits (and would have been subject to the restrictive covenants) described above for a termination without cause or a resignation for good reason that occurred at the time of or within the 12 months following a change in control (a “Qualifying CIC Termination”); however, their cash severance would instead be equal to the sum of three times (for Mr. Manheimer) or two times (for Mr. Donlan) the sum of the respective executive officer’s base salary and target bonus opportunity. In addition, if a change in control had occurred, and Mr. Manheimer’s PSU awards were assumed or replaced with economically equivalent awards, but within 24 months following such change in control and prior to the end of the performance period, Mr. Manheimer’s employment was terminated without cause or for good reason, in lieu of pro-rated vesting of performance-based equity awards based on actual performance, the executive would have been entitled to vesting of the PSUs at the greater of (x) target or (y) actual performance through the date of the termination. Termination due to Death and Disability Under the Employment Agreements, in the event of a termination due to his death or disability occurring on December 31, 2023, Messrs. Manheimer and Donlan would have been entitled to: (i) a cash payment equal to two months’ base salary, (ii) any earned but unpaid annual bonus with respect to the year prior to the year of the termination, (iii) a pro rata bonus for the year of the termination (based on actual performance), (iv) accelerated vesting of equity awards as set forth above for a termination without cause, and (v) Company payment of the cost of continued health coverage for up to 18 months. Compensation and Risk Our Compensation Committee strives to provide strong incentives to management for the long-term, while avoiding excessive risk-taking in the short-term. We have utilized FP, an independent third party, to advise the Compensation Committee on matters related to the compensation of our directors and executive officers. The Compensation Committee believes that the design of our compensation program and the level of oversight is sufficient to mitigate potential risks associated with our current policies and practices. Our compensation program is designed to provide a mix of both fixed and variable incentive compensation and to reward a mix of different performance measures. In its review of the Company’s compensation program and practices in 2023, the Compensation Committee concluded that our compensation plans provide incentives that appropriately balance risk and reward to dissuade unnecessary and excessive risk; are compatible with effective controls and risk management; are supportive of strong governance, including active oversight by the Compensation Committee; and are not reasonably likely to have a material adverse effect on the Company.
COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis contained in this Proxy Statement. Based on this review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Members of the Compensation Committee Matthew Troxell (Chair) Heidi Everett Robin Zeigler The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
AUDIT COMMITTEE REPORT The Audit Committee is responsible for appointing, compensating, retaining and overseeing the work of our independent registered public accounting firm and reviewing and evaluating reporting processes and internal controls. The Audit Committee also oversees the audit fee negotiations associated with the retention of KPMG LLP. The Audit Committee is currently comprised of Mr. Wittman (Chair) and Messrs. Christodolou and Troxell, each a non-employee director, and operates under a written charter that was last amended by our Board in October 2023. A copy of the current charter is available on our website at www.NETSTREIT.com. The information on, or otherwise accessible through, our website does not constitute a part of this Proxy Statement. Our Board has affirmatively determined that all directors serving on the Audit Committee meet the definition of “independent director” based on the standards of the NYSE, and satisfy the independence requirements of Rule 10A-3 of the Exchange Act. Our Board has also determined that (i) each member of the Audit Committee qualifies as an “audit committee financial expert” under SEC rules and regulations and (ii) each member of the Audit Committee is “financially literate” as the term is defined by NYSE listing standards. The Audit Committee members are neither professional accountants nor auditors, and their functions are not intended to duplicate or to certify the activities of management or the independent auditor, nor can the Audit Committee certify that the independent auditor is “independent” under applicable rules. The Audit Committee serves a board-level oversight role in which it provides advice, counsel and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors and the experience of the Audit Committee’s members in business, financial and accounting matters. Our management has the primary responsibility for the financial statements and reporting process, including our systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed with management the audited consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as well as the report of management, for the year ended December 31, 2023, regarding the Company’s internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act. Our Audit Committee has retained KPMG LLP as our independent registered public accounting firm for the year ending December 31, 2024. KPMG LLP has been the independent registered public accounting firm for the Company since 2019. The members of the Audit Committee and the Board believe that the continued retention of KPMG LLP to serve as the Company’s independent registered public accounting firm is in the best interests of the Company and its stockholders. In reaching this conclusion, the Audit Committee considered KPMG LLP’s integrity, controls and processes to ensure KPMG LLP’s independence, objectivity, industry and company-specific experience, quality and effectiveness of personnel and communications, commitment to serving the Company, appropriateness of fees for audit and non-audit services and external data on audit quality and performance, including recent Public Company Accounting Oversight Board (United States) (PCAOB) reports on KPMG LLP. The Audit Committee has discussed with the KPMG LLP the overall scope and plans of its audit. The Audit Committee meets with KPMG LLP, with and without management present, to discuss the results of KPMG LLP’s procedures, their evaluations of the Company’s internal controls, including internal control over financial reporting, and the overall quality of the Company’s financial reporting. The Audit Committee reviewed with KPMG LLP its judgments as to the quality, not just the acceptability, of the Company’s accounting policies and such other matters as are required to be discussed with the Audit Committee by the Standards of the PCAOB. The Audit Committee has also received written disclosures and the letter from KPMG LLP required by applicable requirements of the PCAOB regarding KPMG LLP’s communications with the Audit Committee concerning independence and has discussed with KPMG LLP its independence from the Company. The Audit Committee has considered whether the provision of non-audit services to the Company is compatible with maintaining the independence of KPMG LLP. Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements for the year ended December 31, 2023 be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for filing with the SEC. Members of the Audit Committee Lori Wittman (Chair) Michael Christodolou Matthew Troxell The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the specified disclosure regarding the relationship of CEO total compensation to the total compensation of its median employee, referred to as “pay ratio” disclosure. For fiscal 2023: • the median of the annual total compensation of all employees of the Company (other than the CEO) was $135,966; and • the annual total compensation of the CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $4,078,215. Based on this information, the ratio of the annual total compensation of the CEO to the median of the annual total compensation of all employees was approximately 30 to 1. The pay ratio above represents the Company’s reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K and applicable guidance, based on our payroll and employment records and the methodology described below. The SEC rules for identifying the “median employee” and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratios reported by other companies may not be comparable to the pay ratio set forth above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. In accordance with Instruction 2 to Item 402(u) of Regulation S-K, because there has been no change in our employee population or employee compensation arrangements during 2023 that we reasonably believe would result in a significant change to our pay ratio disclosure, we elected to utilize the same median employee that we had identified in 2022 to calculate our 2023 CEO pay ratio. Set forth below is a description of the methodology the Company used to identify the median employee in 2022 for purposes of this disclosure. • To determine the Company’s total population of employees as of October 31, 2022, the Company included all full-time, part-time, seasonal and temporary employees, including employees of consolidated subsidiaries, consisting of approximately 33 employees in the aggregate. None of the Company’s employees is located outside of the U.S. • To identify the “median employee” from the Company’s employee population as determined above, the Company compared the aggregate amount of each employee’s annual base salary and cash bonus. In making this determination, the Company annualized the compensation of employees who were employed by the Company for less than the entire fiscal year. This compensation measure was consistently applied to all employees included in the calculation and reasonably reflects the annual compensation of employees. • Using this approach, the Company selected the employee at the median of its employee population, who was a salaried employee. The Company then calculated annual total compensation for this employee using the same methodology used to calculate annual total compensation for the named executive officers as set forth in the Summary Compensation Table. The Company determined that the employee’s annual total compensation for the fiscal year ended December 31, 2023 was $135,966. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our Summary Compensation Table for 2023 included in this Proxy Statement.
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance and other of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company’s aligns executive compensation with the Company’s performance, refer to the “Compensation Discussion and Analysis” above. Our Chief Executive Officer is our principal executive officer, which we refer to as “PEO” in the tables below. The named executive officers are referred to as “NEOs” in the tables below.
(1) Represents amounts of total compensation reported for Mr. Manheimer (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation — Summary Compensation Table.” (2) Represents the amount of “compensation actually paid” to Mr. Manheimer, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Manheimer during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Manheimer’s total compensation for each year to determine the compensation actually paid:
(a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. Refer to “Executive Compensation — Summary Compensation Table.” (b) The equity award adjustments for 2023 include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in 2023 that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of 2023 (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of 2023; (iii) for awards that are granted and vest in 2023, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in 2023, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during 2023, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in 2023 prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for 2023. The valuation assumptions used to calculate fair values did not materially differ from those disclosed as of the grant date of the equity awards. The amounts deducted or added in calculating the equity award adjustments are as follows:
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| Year | | | | Year End Fair Value of Equity Awards Granted in the Year ($) | | | Change in Fair Value from End of Prior Year to End of Covered Year of Equity Awards Granted in Prior Years ($) | | | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | | | Change in Fair Value on the Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year ($) | | | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | | | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | | | Total Equity Award Adjustments ($) | | |||||||||||||||||||||
| 2023 | | | | | | 2,156,389 | | | | | | (792,622) | | | | | | — | | | | | | 65,823 | | | | | | — | | | | | | — | | | | | | 1,429,590 | | |
| Year | | | | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) | | | Less: Average Reported Value of Equity Awards ($) | | | Add: Average Equity Award Adjustments(a) ($) | | | Average Compensation Actually Paid to Non-PEO NEOs ($) | | ||||||||||||
| 2023 | | | | | | 947,945 | | | | | | (370,000) | | | | | | 356,707 | | | | | | 934,652 | | |
| Year | | | | Average Year End Fair Value of Equity Awards Granted in the Year ($) | | | Average Change in Fair Value from End of Prior Year to End of Covered Year of Equity Awards Granted in Prior Years ($) | | | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | | | Average Change in Fair Value on the Vesting Date of Equity Awards Granted in Prior Years that Vested in the Year ($) | | | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | | | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation ($) | | | Total Average Equity Award Adjustments ($) | | |||||||||||||||||||||
| 2023 | | | | | | 352,520 | | | | | | — | | | | | | — | | | | | | 4,187 | | | | | | — | | | | | | — | | | | | | 356,707 | | |
| 43 | 2024 PROXY STATEMENT | | | |
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| 45 | 2024 PROXY STATEMENT | | | |
| (in thousands) | | | | 2023 | | | 2022 | | ||||||
| Audit Fees(1) | | | | | $ | 868 | | | | | $ | 965 | | |
| Audit-Related Fees | | | | | | — | | | | | | — | | |
| Tax Fees(2) | | | | | | 359 | | | | | | 293 | | |
| All Other Fees | | | | | | — | | | | | | — | | |
| Total | | | | | $ | 1,227 | | | | | $ | 1,257 | | |
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| 47 | 2024 PROXY STATEMENT | | | |
| (in thousands) | | | | 2021 | | | 2020 | | ||||||
| Audit Fees(1) | | | | | $ | 1,192 | | | | | $ | 1,772 | | |
| Audit-Related Fees | | | | | | — | | | | | | — | | |
| Tax Fees(2) | | | | | | 233 | | | | | | 231 | | |
| All Other Fees | | | | | | — | | | | | | — | | |
| Total | | | | | $ | 1,425 | | | | | $ | 1,795 | | |
| 48 | 2024 PROXY STATEMENT | | | |
| 49 | 2024 PROXY STATEMENT | | | |
| 50 | 2024 PROXY STATEMENT | | | |
| | | Internet www.proxyvote.com | | | | | Calling 1-800-690-6903 Toll-free from the U.S. or Canada | | | | | Mail Return the signed proxy card | |
| 51 | 2024 PROXY STATEMENT | | | |
| 52 | 2024 PROXY STATEMENT | | |
What is “householding” and how does it work? Under the rules adopted by the SEC, we may deliver a single set of proxy materials to one address shared by two or more of our stockholders. This delivery method is referred to as “householding” and can result in significant cost savings. To take advantage of this opportunity, we have delivered only one set of proxy materials to multiple stockholders who share an address, unless we received contrary instructions from the impacted stockholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of the proxy materials, as requested, to any stockholder at the shared address to which a single copy of these documents was delivered. If you prefer to receive separate copies of the notice of internet availability of proxy materials, Proxy Statement or annual report, contact Broadridge Financial Solutions, Inc. by calling 1-866-540-7095 or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717. In addition, if you currently are a stockholder who shares an address with another stockholder and would like to receive only one copy of future notices and proxy materials for your household, you may notify your broker if your shares are held in a brokerage account or you may notify us if you hold registered shares. Registered stockholders may notify us by contacting Broadridge Financial Solutions, Inc. at the above telephone number or address or sending a written request to NETSTREIT Corp., 2021 McKinney Avenue, Suite 1150, Dallas, Texas 75201, Attention: Investor Relations. How do I participate in the Annual Meeting? We are hosting the Annual Meeting through a virtual web conference. You will not be able to attend the meeting in person. You will be able to attend the virtual annual meeting, vote your shares electronically, and submit your questions during the live webcast of the meeting by visiting www.virtualshareholdermeeting.com/NTST2024 and entering your 16-digit control number included in your notice of internet availability of proxy materials, on your proxy card, or on any additional voting instructions accompanying these proxy materials. The Annual Meeting will begin promptly at 9:00 a.m. Central Daylight Time. Online check-in will be available beginning at 8:30 a.m. Central Daylight Time. Please allow ample time for the online check-in process. Please be assured that you will be afforded the same rights and opportunities to participate in the virtual meeting as you would at an in-person meeting. As part of the Annual Meeting, we will hold a question and answer session, during which we intend to answer questions submitted during the meeting in accordance with the Annual Meeting procedures which are pertinent to the Company and the meeting matters, as time permits. Questions may be submitted during the Annual Meeting through www.virtualshareholdermeeting.com/NTST2024. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once. There will be technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting website during the check-in or meeting time, please call the technical support number that will be posted on the Annual Meeting login page.
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| | | | | Year Ended December 31, 2021 (audited) | | |||
| Net income | | | | | $ | 3,150 | | |
| Depreciation and amortization of real estate | | | | | | 30,491 | | |
| Amortization of above/below market lease intangibles | | | | | | (808) | | |
| Amortization of lease incentives | | | | | | 122 | | |
| Non-real estate depreciation and amortization | | | | | | 316 | | |
| Interest expense, net | | | | | | 3,700 | | |
| Income tax expense | | | | | | 59 | | |
| EBITDA | | | | | | 37,030 | | |
| Adjustments: | | | | | | | | |
| Provisions for impairment | | | | | | 3,539 | | |
| Gain on sales of real estate, net | | | | | | (2,997) | | |
| EBITDAre | | | | | | 37,572 | | |
| Adjustments: | | | | | | | | |
| Straight-line rental revenue | | | | | | (1,082) | | |
| Gain on forfeited earnest money deposit | | | | | | — | | |
| 144A and IPO transaction costs | | | | | | — | | |
| Gain on insurance proceeds | | | | | | (438) | | |
| Non-cash compensation expense | | | | | | 3,703 | | |
| Adjusted EBITDAre | | | | | $ | 39,755 | | |
Upon written request by any stockholder entitled to vote at the Annual Meeting, we will promptly furnish, without charge, a copy of the Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which we filed with the SEC, including the financial statements and schedule. If the person requesting the report was not a stockholder of record on March 19, 2024, the request must contain a good faith representation that he or she was a beneficial owner of our common stock at the close of business on that date. Requests should be addressed to NETSTREIT Corp., 2021 McKinney Avenue, Suite 1150, Dallas, Texas 75201, Attention: Mark Manheimer, President, Chief Executive Officer and Secretary. YOUR VOTE IS IMPORTANT. WE URGE YOU TO VOTE TODAY BY TELEPHONE, VIA THE INTERNET OR BY MAIL. |
| | | | By Order of the Board of Directors, | |
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| | | | Mark Manheimer | |
| | | | President, Chief Executive Officer and | |
| 55 | 2024 PROXY STATEMENT | | | |
| A-1 | 2024 PROXY STATEMENT | | | |
| | | | | Year Ended December 31, 2023 (unaudited) | | |||
| Net income | | | | | $ | 6,890 | | |
| Depreciation and amortization of real estate | | | | | | 63,379 | | |
| Provisions for impairment | | | | | | 7,083 | | |
| Gain on sales of real estate, net | | | | | | (1,175) | | |
| FFO | | | | | | 76,177 | | |
| Adjustments: | | | | | | | | |
| Non-recurring severance and related charges | | | | | | 362 | | |
| Loss on debt extinguishment and other related costs | | | | | | 223 | | |
| Gain on insurance proceeds | | | | | | (78) | | |
| Core FFO | | | | | | 76,684 | | |
| Adjustments: | | | | | | | | |
| Straight-line rent adjustments | | | | | | (1,163) | | |
| Amortization of deferred financing costs | | | | | | 1,730 | | |
| Amortization of above/below market lease intangibles | | | | | | 114 | | |
| Amortization of loan origination costs | | | | | | 163 | | |
| Amortization of lease-related intangibles | | | | | | (611) | | |
| Earned development interest | | | | | | 515 | | |
| Capitalized interest expense | | | | | | (1,060) | | |
| Non-cash interest expense | | | | | | (2,124) | | |
| Non-cash compensation expense | | | | | | 4,822 | | |
| AFFO | | | | | $ | 79,070 | | |
| Weighted average common shares outstanding, diluted | | | | | | 64,665,439 | | |
| FFO per common share, diluted | | | | | $ | 1.18 | | |
| Core FFO per common share, diluted | | | | | $ | 1.19 | | |
| AFFO per common share, diluted | | | | | $ | 1.22 | | |
| A-2 | 2024 PROXY STATEMENT | | | |