UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
January 1, 2022
Date of Report (Date of earliest event reported)
Essential Properties Realty Trust, Inc.
(Exact name of registrant as specified in its charter)
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| Maryland | | 001-38530 | | 82-4005693 |
| (State or other jurisdiction of incorporation) | | (Commission File Number) | | (IRS Employer Identification No.) |
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| 902 Carnegie Center Blvd., Suite 520 | | |
| Princeton, New Jersey | | 08540 |
| (Address of principal executive offices) | | (Zip Code) |
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| Registrant’s telephone number, including area code: | | (609) 436-0619 |
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| Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions: |
| ☐ | Written communications pursuant to Rule 425 under the Securities Act 17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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| Title of Each Class | | Trading Symbol(s) | | Name of Each Exchange on Which Registered |
| Common stock, $0.01 par value | | EPRT | | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 1, 2022, Essential Properties Realty Trust, Inc. (the “Company”) entered into an amended and restated employment agreement (the “Amended and Restated Employment Agreement”) with Peter M. Mavoides, President and Chief Executive Officer of the Company, effective as of January 1, 2022.
The Amended and Restated Employment Agreement provides for an initial term of five years (through December 31, 2026) with automatic one-year extension periods absent prior written notice electing not to extend Mr. Mavoides’ employment by the Company or Mr. Mavoides. The original agreement was scheduled to expire on June 25, 2022. During the employment term, Mr. Mavoides will receive a base salary at an annual rate not less than $600,000 (“Base Salary”). For each fiscal year during the term of the Amended and Restated Employment Agreement, Mr. Mavoides will be eligible to receive an annual performance bonus (the “Annual Performance Bonus”) with a minimum target annual bonus equal to 125% of Base Salary. The amount of the Annual Performance Bonus earned for any year will be determined based upon the achievement of annual performance targets as established by the Compensation Committee of the Board of Directors (the “Compensation Committee”). During the term of the Amended and Restated Employment Agreement and subject to the approval of the Compensation Committee, Mr. Mavoides will continue to be eligible to participate in the Company’s annual long-term incentive program (in such form and with such terms as determined by the Compensation Committee in its sole discretion) in respect of each fiscal year during the term.
In addition, in recognition of Mr. Mavoides’ continued employment as President and Chief Executive Officer, Mr. Mavoides will receive a one-time retention equity award with a target grant date fair value equal to $3,000,000 and delivered as follows: (i) $1,000,000 delivered as time-based restricted stock units, vesting in 50% increments on each of the four-year and five-year anniversary of the grant date, subject to Mr. Mavoides continued service through the applicable vesting date, and (ii) $2,000,000 delivered as performance-based restricted stock units, with vesting based on the Company’s adjusted funds from operations performance over a four-year performance period, and the opportunity to earn up to 200% payout of the performance-based restricted stock units based on such performance. To the extent the performance goals are achieved, the performance award will vest in 50% increments on each of the four-year and five-year anniversary of the grant date, subject to Mr. Mavoides continued service through the applicable vesting date.
If Mr. Mavoides’ employment is terminated during the term of the Amended and Restated Employment Agreement (i) by the Company without “Cause” or (ii) by Mr. Mavoides for “Good Reason” (each, as defined in Amended and Restated Employment Agreement), Mr. Mavoides will be entitled to receive: (a) accrued benefits; (b) an amount equal to two times the sum of (x) his Base Salary plus (y) the average Annual Performance Bonus actually paid to him for the three years prior to the year in which the date of termination occurs; provided, however, that if the date of termination occurs during the 24 months following a Change in Control (as defined in the Amended and Restated Employment Agreement) (the “CIC Period”), an amount equal to three times the sum of (x) his Base Salary plus (y) the target Annual Performance Bonus for the year in which the date of termination occurred, payable in equal installments over 24 months (or over 36 months if the termination occurs during the CIC Period); (c) a pro rata Annual Performance Bonus, based on actual performance and prorated for the portion of the fiscal year Mr. Mavoides was employed prior to the date of termination; (d) up to 18 months of continued health care coverage; and (e) the vesting of any outstanding awards granted under any equity plans, with such awards to be payable within 60 days following the date of termination.
Mr. Mavoides’ Amended and Restated Employment Agreement includes 24-month restrictive covenants regarding non-competition and non-solicitation following its termination as well as confidentiality and non-disparagement obligations.
Item 9.01 — Financial Statements and Exhibits.
(d) Exhibits.
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| Exhibit No. | | Description |
| | Employment Agreement, effective as of January 1, 2022, by and between Essential Properties Realty Trust, Inc. and Peter M. Mavoides |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| Date: January 6, 2022 | ESSENTIAL PROPERTIES REALTY TRUST, INC. |
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| By: | /s/ Mark E. Patten |
| | Mark E. Patten |
| | Executive Vice President, Treasurer and Chief Financial Officer |
