On February 24, 2021, Four Corners Property Trust, Inc. (the “Company”) and Four Corners Operating Partnership, LP (the “Operating Partnership”) entered into an equity distribution agreement (the “Equity Distribution Agreement”) with each of Morgan Stanley & Co. LLC, Barclays Capital Inc., BofA Securities, Inc., Evercore Group L.L.C., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Raymond James & Associates, Inc. and Wells Fargo Securities, LLC, each, as sales agent and/or, except in the case of Evercore Group L.L.C., as forward seller (in any such capacity, each a “Manager” and together the “Managers”), and the Forward Purchasers (as defined below), providing for the offer and sale of shares of the Company’s common stock, $0.0001 par value per share (the “common stock”), having an aggregate gross sales price of up to $350,000,000, from time to time through the Managers, acting as the Company’s sales agents, or, if applicable, as Forward Sellers (as defined below), or directly to one or more of the Managers, acting as principal.
Sales of shares of the Company’s common stock, if any, as contemplated by the Equity Distribution Agreement made through the Managers, as the Company’s sales agents or as Forward Sellers, will be made by means of ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices, by privately negotiated transactions (including block sales) or by any other methods permitted by applicable law.
The Equity Distribution Agreement contemplates that, in addition to the issuance and sale by the Company of shares of its common stock to or through the Managers, the Company may enter into separate forward sale agreements (each, a “forward sale agreement” and, collectively, the “forward sale agreements”), with each of Morgan Stanley & Co. LLC, Barclays Capital Inc., BofA Securities, Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Raymond James & Associates, Inc. and Wells Fargo Securities, LLC or one of their respective affiliates (in such capacity, each a “Forward Purchaser” and, collectively, the “Forward Purchasers”). If the Company enters into a forward sale agreement with any Forward Purchaser, the Company expects that such Forward Purchaser or its affiliate will attempt to borrow from third parties and sell, through the relevant Manager, acting as sales agent for such Forward Purchaser, shares of the Company’s common stock to hedge such Forward Purchaser’s exposure under such forward sale agreement. The Company refers to a Manager, except for Evercore Group L.L.C., when acting as sales agent for the relevant Forward Purchaser, as, individually, a “Forward Seller” and, collectively, the “Forward Sellers.” Each Forward Purchaser will be either one of the Managers named in the first sentence of this paragraph, except for Evercore Group L.L.C., or an affiliate of one of those Managers, except for Evercore Group L.L.C., and unless otherwise expressly stated or the context otherwise requires, references herein to the “related” or “relevant” Forward Purchaser mean, with respect to any Manager acting as Forward Seller, the affiliate of such Manager that is acting as Forward Purchaser or, if applicable, such Manager acting in its capacity as Forward Purchaser. Only Managers that are, or are affiliated with, Forward Purchasers will act as Forward Sellers. The Company will not initially receive any proceeds from any sale of shares of its common stock borrowed by a Forward Purchaser or its affiliate and sold through the related Forward Seller.
The Company currently expects to fully physically settle each forward sale agreement, if any, with the relevant Forward Purchaser on one or more dates specified by the Company on or prior to the maturity date of such forward sale agreement, in which case the Company expects to receive aggregate net cash proceeds at settlement equal to the number of shares specified in such forward sale agreement multiplied by the relevant forward price per share at such time. However, subject to certain exceptions and conditions, the Company may also elect, in its sole discretion, to cash settle or net share settle all or any portion of its obligations under any forward sale agreement, in which case the Company may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and the Company may owe cash (in the case of cash settlement) or shares of its common stock (in the case of net share settlement) to the relevant Forward Purchaser.
None of the Managers, whether acting as the Company’s sales agent or, if applicable, as Forward Seller, is required to sell any specific number or dollar amount of shares of the Company’s common stock, but each has agreed, subject to the terms and conditions of the Equity Distribution Agreement, to use its commercially reasonable efforts, consistent with its normal trading and sales practices and applicable law and regulations, to sell shares of the Company’s common stock on the terms agreed upon by such Manager, the Company and, in the case of shares offered through such Manager as Forward Seller, the relevant Forward Purchaser from time to time. The Equity Distribution Agreement provides that the shares of the Company’s common stock offered and sold through the Managers, as the Company’s sales agents or as Forward Sellers, pursuant to the Equity Distribution Agreement will be offered and sold through only one Manager on any trading day.
The Company will pay the applicable Manager a commission at a mutually agreed rate that will not exceed, but may be lower than, 2.0% of the gross sales price of the shares of the Company’s common stock sold through such Manager, as the Company’s sales agent. In connection with each forward sale agreement, the Company will pay the applicable Manager, as Forward Seller, a commission, in the form of a reduction to the initial forward price under the related forward sale agreement, at a rate agreed upon by us, such Manager and the related Forward Purchaser that will not exceed, but may be lower than, 2.0% of the gross sales price of the borrowed shares of the Company’s common stock sold through such Manager, as Forward Seller, during the applicable forward selling period for such shares (subject to certain possible adjustments to such gross sales price for daily accruals and any dividends having an “ex-dividend” date during such forward selling period).
