SECURITIES AND EXCHANGE COMMISSION
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Proxy Statement Pursuant to Section 14(a)
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of the Securities Exchange Act of 1934
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Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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FRP HOLDINGS, INC.
(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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_______________________
200 W. Forsyth Street, 7th Floor
Jacksonville, Florida 32202
Phone (904) 396-5733
Dear Shareholder:
I invite you to attend
our Annual Meeting of Shareholders ("Annual Meeting"), which will be held on Wednesday, February 4, 2015, at 10:00 a.m.
at The River Club, Ortega Room, on the 34th floor of the Wells Fargo Building, One Independent Drive, Jacksonville,
Florida.
Earlier this year, we
announced plans to separate into two independent publicly traded companies: our real estate businesses, FRP Holdings, Inc. (which
we refer to as "FRP"), and our transportation business, Patriot Transportation Holding, Inc. (which we refer to as “New
Patriot”), to be effected through an internal reorganization followed by a pro rata share distribution of the common stock
of the Company to our shareholders. On December 3, 2014, we completed the internal reorganization. As a result of the reorganization,
FRP has become the new parent company and the successor public company to Patriot Transportation Holding, Inc.
The distribution of the
Company common stock to our shareholders is scheduled to occur on [*], 2014 to holders of record on [*], 2014. As a result, the
matters to be acted upon at our 2015 Annual Meeting of Shareholders (the "Annual Meeting") will relate only to FRP. The
Company will hold an annual meeting of shareholders in early 2016. At our Annual Meeting, we would be delighted to answer any questions
you may have regarding the separation of the businesses.
Details regarding the business
to be conducted at the meeting are described in the accompanying Notice of Annual Meeting of Shareholders and Proxy Statement.
At the meeting, I will report on the Company’s operations and plans. We also will leave time for your questions.
We hope that you are able
to attend the meeting. Whether or not you plan to attend, it is important that your shares be represented and voted at the meeting.
Therefore, I urge you to promptly vote and submit your proxy by signing, dating and returning the enclosed proxy card in the enclosed
envelope. If you are a shareholder of record and you decide to attend the Annual Meeting, you will be able to vote in person, even
if you previously have submitted your proxy.
Thank you for your ongoing
support of FRP Holdings, Inc.
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Sincerely, |
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![](frp_signature.jpg) |
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Thompson S. Baker II |
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President and Chief Executive Officer |
2015 ANNUAL MEETING OF SHAREHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
Notice of Annual Meeting of Shareholders |
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Proxy Statement |
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Corporate Governance |
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Board Leadership Structure and Committee Membership |
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Nominating Process |
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Proposal No. 1 – Election of Directors |
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Proposal No. 2 – Ratification of Independent Registered Public Accounting Firm |
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Proposal No. 3- Adoption of the Amended and Restated Articles of Incorporation |
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Proposal No. 4 – Advisory Vote on Executive Compensation |
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Shareholder Return Performance |
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Compensation Discussion and Analysis |
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Compensation Committee Report |
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Executive Compensation |
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Non-Employee Director Compensation |
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Related Party Transactions |
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Common Stock Ownership of Certain Beneficial Owners |
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Common Stock Ownership by Directors and Executive Officers |
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Audit Committee Report |
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Independent Registered Public Accounting Firm |
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Additional Information |
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FRP HOLDINGS, INC.
200 W. Forsyth Street, 7th Floor, Jacksonville,
Florida 32202
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TIME AND DATE |
10:00 a.m. on Wednesday, February 4, 2015 |
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PLACE |
The River Club, Ortega Room
Wells Fargo Building
One Independent Drive, 34th Floor
Jacksonville, FL 32202
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ITEMS OF BUSINESS |
(1) |
To elect as directors
the seven nominees named in the attached proxy statement for a one-year term. |
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To ratify the Audit Committee’s selection of the independent registered public accounting firm. |
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To approve the Amended and Restated Articles of Incorporation of FRP Holdings, Inc. |
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To hold an advisory vote on executive compensation. |
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To transact such other business as may properly come before the meeting and any adjournment. |
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RECORD DATE |
You are entitled to vote if you were a shareholder of record at the close of business on Monday, December 10, 2014. |
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ANNUAL REPORT |
Our 2014 Annual Report, which is not part of the proxy soliciting materials, is enclosed. |
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PROXY VOTING |
Please submit a proxy as soon as possible so that your shares can be voted at the meeting in accordance with your instructions. If you are a shareholder of record and you attend the meeting, you may withdraw your proxy and vote in person. |
IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON FEBRUARY 4, 2015: This Notice of Annual Meeting and Proxy
Statement and the 2014 Annual Report are available on our website at www.frpholdings.com.
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John D. Milton, Jr. |
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Corporate Secretary |
This Proxy Statement and Proxy Card are being
distributed on or about December ___, 2014.
PROXY STATEMENT
The Board of Directors
(the “Board”) of FRP Holdings, Inc. (“FRP”, “we”, “us”, “our” or the
“Company”) is soliciting proxies for the Annual Meeting of Shareholders. You are receiving a proxy statement because
you own shares of FRP common stock that entitle you to vote at the meeting. By use of a proxy, you can vote whether or not you
attend the meeting. The proxy statement describes the matters we would like you to vote on and provides information on those matters
so you can make an informed decision.
The information included
in this proxy statement relates to proposals to be voted on at the meeting, voting process, compensation of directors and our most
highly paid officers, and other required information.
Purpose of the Annual Meeting
The purpose of the Annual
Meeting is to elect as directors the seven nominees named in this proxy statement, to ratify the Audit Committee’s selection
of the independent registered public accounting firm, to approve the Amended and Restated Articles of Incorporation, to hold an
advisory vote on executive compensation, and to conduct such other business as may properly come before the Annual Meeting.
Annual Meeting Admission
You are invited to attend
the meeting in person. The meeting will be held at 10:00 a.m. on Wednesday, February 4, 2015 at The River Club, Ortega Room, on
the 34th floor of the Wells Fargo Building, One Independent Drive, Jacksonville, Florida.
We reserve the right to
require proof of ownership of FRP stock, as well as a form of personal photo identification, in order for you to be admitted to
the meeting. If your shares are held in the name of a bank, broker or other holder of record, you must bring a brokerage statement
or other proof of ownership with you to the meeting. No cameras, recording equipment, electronic devices, large bags, briefcases,
or packages will be permitted in the meeting.
We reserve the right to
adopt other rules and to implement additional security measures for the meeting.
Quorum
A quorum is the minimum
number of shares required to hold a meeting. A majority of the outstanding shares of our common stock must be represented in person
or by proxy at the meeting to establish a quorum. Both abstentions and broker non-votes are counted as present for determining
the presence of a quorum. Broker non-votes, however, are not counted as shares present and entitled to be voted with respect to
the matter on which the broker has not voted. Thus, broker non-votes will not affect the outcome of any of the matters to be voted
on at the Annual Meeting. Generally, broker non-votes occur when shares held by a broker for a beneficial owner are not voted with
respect to a particular proposal because (1) the broker has not received voting instructions from the beneficial owner and (2)
the broker lacks discretionary voting power to vote such shares.
Shareholders Entitled to Vote
Each share of our common
stock outstanding as of the close of business on December 10, 2014, the record date, is entitled to one vote at the Annual Meeting
on each matter properly brought before the meeting. As of that date, there were 9,716,995 shares of common stock issued and outstanding.
Many FRP shareholders hold
their shares through a stockbroker, bank, trustee, or other nominee rather than directly in their own name. As summarized below,
there are some distinctions between shares held of record and those owned beneficially:
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SHAREHOLDER OF RECORD – If your shares are registered directly in your name with FRP’s Transfer Agent, American Stock Transfer & Trust Company, you are considered the shareholder of record of those shares and these proxy materials are being sent directly to you by FRP. As the shareholder of record, you have the right to grant your voting proxy directly to FRP or to vote in person at the meeting. |
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BENEFICIAL OWNER – If your shares are held in a stock brokerage account, by a bank, trustee, or other nominee, you are considered the beneficial owner of shares held in street name and these proxy materials are being forwarded to you by your broker, trustee, or nominee who is considered the shareholder of record of those shares. As the beneficial owner, you have the right to direct your broker, trustee or nominee on how to vote and are also invited to attend the meeting. However, since you are not the shareholder of record, you may not vote these shares in person at the meeting. Your broker, trustee, or nominee is obligated to provide you with a voting instruction card for you to use. |
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PROFIT SHARING PLAN AND TRUST – If your shares are held in your account in the FRP Holdings, Inc. Profit Sharing and Deferred Earnings Plan (the “Profit Sharing Plan”), you are considered the beneficial owner of these shares and the trustee of the plan is the shareholder of record. Participants in the Profit Sharing Plan may direct the trustee how to vote the shares allocated to their account by following the voting instructions contained on the proxy card. If voting instructions are not received for shares in the Profit Sharing Plan, those shares will be voted in the same proportion as the shares in such plan for which voting instructions are received. |
Proposals You Are Asked to Vote On and the
Board’s Voting Recommendations
At the Annual Meeting,
the shareholders will vote on whether to elect the seven director nominees named in this proxy statement to serve as directors
until the next annual meeting of shareholders. Our Board recommends that you vote “FOR” each nominee of the Board.
The shareholders also will
vote on the proposal to ratify the Audit Committee’s selection of the Independent Registered Public Accounting Firm. Our
Board recommends that you vote “FOR” ratification.
Additionally, shareholders
will vote on whether to adopt the Amended and Restated Articles of Incorporation to (i) declassify the board of directors, (ii)
remove the supermajority vote required for the approval of certain affiliated transactions, (iii) delete the designation of Series
A Preferred Stock, and (iv) delete or modify miscellaneous provisions that are of only historical significance.
The shareholders also will
make a non-binding advisory vote on whether to approve the compensation of the named executive officers as described in this proxy
statement. Our Board recommends that you vote “FOR” approval of the proposed executive compensation.
Other than the proposals
described in this proxy statement, the Board is not aware of any other matters to be presented for a vote at the Annual Meeting.
If you grant a proxy, any of the persons named as proxy holders will have the discretion to vote your shares on any additional
matters properly presented for a vote at the meeting. If any of our nominees are unavailable as a candidate for director, the persons
named as proxy holders will vote your proxy for another candidate or candidates as may be nominated by the Board of Directors.
Required Vote
The nominees for election
as directors at the Annual Meeting will be elected by a plurality of the votes cast at the meeting. This means that the director
nominee with the most votes for a particular slot is elected for that slot. Votes withheld from one or more director nominees will
have no effect on the election of any director from whom votes are withheld.
Certain provisions in our
existing articles of incorporation ("Existing Articles") require the affirmative vote of 75% of the shares entitled to
vote thereon for the approval of an amendment. As a result, in order for the Amended Articles to be adopted by the Company, 75%
of the shares of outstanding common stock must be cast in favor of the approval of the Amended Articles.
All other proposals will
be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against the proposal.
If you are a
beneficial owner and do not provide the shareholder of record with voting instructions, your shares may constitute
“broker non-votes.” A “broker non-vote” occurs when a bank, broker or other holder of record holding
shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting
power under New York Stock Exchange (“NYSE”) rules and has not received instructions from the beneficial owner.
If you are a beneficial owner, your bank, broker or other holder of record is permitted under NYSE rules to vote your shares
on the ratification of our independent registered public accounting firm even if the record holder does not receive voting
instructions from you. The record holder may not vote on the election of directors or on the advisory proposal regarding
executive compensation without voting instructions from you, however. Without your voting instructions on these matters, a
broker non-vote will occur. In tabulating the voting result for any particular proposal, shares that constitute broker
non-votes will not be included in vote totals and will have no effect on the outcome of any vote.
Voting Methods
If you hold shares directly
as the shareholder of record, you may vote by granting a proxy or, if you hold shares beneficially in street name, by submitting
voting instructions to your broker or nominee. If you own shares beneficially as a participant in the Profit Sharing Plan, you
may vote by submitting voting instructions to the trustee. Please refer to the summary instructions included on your proxy card
or, for shares held in street name, the voting instructions card included by your broker or nominee.
Changing Your Vote
You may change your proxy
instructions at any time prior to the vote at the Annual Meeting. For shares held directly in your name, you may accomplish this
by granting a new proxy or by voting in person at the Annual Meeting. For shares held beneficially by you, you may change your
vote by submitting new voting instructions to your broker or nominee.
Counting the Vote
In the election of directors,
you may vote “FOR” all of the nominees or your vote may be “WITHHELD” from one or more of the nominees.
For the other proposals, you may vote “FOR,” “AGAINST,” or “ABSTAIN.” If you are a shareholder
of record and you sign your proxy card with no further instructions, your shares will be voted in accordance with the recommendations
of the Board. Shares held in your account in the Profit Sharing Plan will be voted by the trustee as described in Shareholders
Entitled to Vote on page 2.
Results of the Vote
We will announce preliminary
voting results at the meeting and publish final results in a Current Report on Form 8-K within four (4) business days following
the meeting.
Delivery of Proxy Materials
This Notice of Annual Meeting
and Proxy Statement and the 2014 Annual Report are available on our website at www.frpholdings.com under Investor Relations.
Instead of receiving future copies of our Proxy Statement and accompanying materials by mail, beneficial owners may be able to
receive copies of these documents electronically. Please check the information provided in the proxy materials sent to you by your
bank or other holder of record regarding the availability of this service.
Householding
Securities and Exchange
Commission rules now allow us to deliver a single copy of an annual report and proxy statement to any household at which two or
more shareholders reside, if we believe the shareholders are members of the same family. This rule benefits both you and the Company.
We believe it eliminates irritating duplicate mailings that shareholders living at the same address receive and it reduces our
printing and mailing costs. This rule applies to any annual reports, proxy statements, proxy statements combined with a prospectus,
or information statements. Each shareholder will continue to receive a separate proxy card or voting instruction card.
Your household may have
received a single set of proxy materials this year. If you prefer to receive your own copy now or in future years, please request
a duplicate set by contacting John D. Milton, Jr. at (904) 858-9100 or by mail at 200 W. Forsyth Street, 7th Floor, Jacksonville,
Florida 32202.
If a broker or other nominee
holds your shares, you may continue to receive some duplicate mailings. Certain brokers will eliminate duplicate account mailings
by allowing shareholders to consent to such elimination, or through implied consent if a shareholder does not request continuation
of duplicate mailings. Since not all brokers and nominees may offer shareholders the opportunity this year to eliminate duplicate
mailings, you may need to contact your broker or nominee directly to discontinue duplicate mailings from your broker to your household.
List of Shareholders
The names of shareholders
of record entitled to vote at the Annual Meeting will be available at the Annual Meeting and for ten days prior to the meeting
for any purpose germane to the meeting, between the hours of 9:00 a.m. and 4:00 p.m., at our principal executive offices at 200
W. Forsyth Street, 7th Floor, Jacksonville, Florida, by contacting the Secretary of the Company.
Cost of Proxy Solicitation
FRP will pay for the cost
of preparing, assembling, printing, mailing, and distributing these proxy materials. In addition to mailing these proxy materials,
the solicitation of proxies or votes may be made in person, by telephone, or by electronic communication by our directors, officers,
and employees, who do not receive any additional compensation for these solicitation activities. We will reimburse brokerage houses
and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation
materials to beneficial owners of stock.
Transfer Agent
Our Transfer Agent is
American Stock Transfer & Trust Company. All communications concerning shareholders of record accounts, including address
changes, name changes, common stock transfer requirements, and similar matters can be handled by contacting American Stock Transfer
& Trust Company at 1-800-937-5449, or in writing at American Stock Transfer & Trust Company, 59 Maiden Lane, Plaza Level,
New York, NY 10038.
CORPORATE GOVERNANCE
Director Independence
The Board of Directors
is committed to good business practices, transparency in financial reporting and the highest level of corporate governance.
The Board has determined
that a majority of the Board of Directors are independent of management in accordance with the listing standards of The Nasdaq
Stock Market. All of the members of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance
Committee are independent directors. In accordance with Nasdaq listing standards, the Board must determine that a director has
no relationship that, in the judgment of the Board, would interfere with the exercise of independent judgment by the director in
carrying out his or her responsibilities. The listing standards specify the criteria by which the independence of our directors
will be determined. The listing standards also prohibit Audit Committee and Compensation Committee members from any direct or indirect
financial relationship with the Company, and restrict commercial relationships of all directors with the Company. Directors may
not be given personal loans or extensions of credit by the Company, and all directors are required to deal at arm’s length
with the Company and its subsidiaries and to disclose any circumstances that might be perceived as a conflict of interest.
The Board of Directors
has previously determined that seven of our ten existing directors (Messrs. John E. Anderson, Charles E. Commander III, Luke E.
Fichthorn III, Robert H. Paul III, H.W. Shad III, Martin E. Stein, Jr., and James H. Winston) and five of our seven proposed directors
(Messrs. Commander, Shad, Stein, Walton, and Winston) are independent under these standards.
Meetings of Independent Directors
Independent directors regularly
meet in executive sessions without management and may select a director to facilitate the meeting. During fiscal 2014, the independent
directors met in executive session five times, and Mr. Commander presided over executive sessions of the independent directors.
Communication with Directors
The Board of Directors
has adopted the following process for shareholders to send communications to members of the Board. Shareholders may communicate
with the chairs of the Audit, Compensation, and Nominating and Corporate Governance Committees of the Board, or with our independent
directors, by sending a letter to the following address: Board of Directors, FRP Holdings, Inc., c/o Corporate Secretary, 200 W.
Forsyth Street, 7th Floor, Jacksonville, Florida 32202.
Director Attendance at Annual Meeting of
Shareholders
The Company’s policy
is that our directors are expected to attend the Annual Meeting of Shareholders unless extenuating circumstances prevent them from
attending. All directors attended last year’s Annual Meeting of Shareholders.
Business Conduct Policies
We believe that operating
with honesty and integrity has earned us trust from our customers, credibility within our communities, and dedication from our
employees. Our senior executive and financial officers are bound by our Financial Code of Ethical Conduct. In addition, our directors,
officers and employees are required to abide by our Code of Business Conduct and Ethics to ensure that our business is conducted
in a consistently legal and ethical manner. These policies cover many topics, including conflicts of interest, protection of confidential
information, fair dealing, protection of the Company’s assets and compliance with laws, rules and regulations.
Employees are required
to report any conduct that they believe in good faith to be an actual or apparent violation of these policies. The Audit Committee
has adopted procedures to receive, retain, and treat complaints received regarding accounting, internal accounting controls, or
auditing matters, and to allow for the confidential and anonymous submission by employees of concerns regarding questionable accounting
or auditing matters.
The Financial Code of Ethical
Conduct (as adopted on December 3, 2014) and the Code of Business Conduct and Ethics are available on our Web site at www.frpholdings.com
under Corporate Governance.
Risk Oversight
The Board of Directors
exercises direct oversight of strategic risk to the Company. Management annually (or periodically in the event greater frequency
is required due to unforeseen circumstances) prepares an enterprise risk assessment and mitigation strategy that it reviews with
the Audit Committee. The Audit Committee reports to the Board of Directors, which in turn, provides guidance on risk appetite,
assessment and mitigation.
BOARD LEADERSHIP STRUCTURE AND COMMITTEE
MEMBERSHIP
Board Leadership
John D. Baker II serves
as Executive Chairman of the Company’s Board of Directors. Mr. Baker served as President and Chief Executive Officer of the
Company from February 6, 2008, until September 30, 2010. He served as President and Chief Executive Officer of Florida Rock Industries,
Inc. from February 1996 to November 16, 2007. He has served as a director of the Company since 1986.
While the roles of Executive
Chairman and Chief Executive Officer are held separately, the Board of Directors does not have a policy as to whether the positions
are held by separate persons, or whether the position of Executive Chairman must be held by an independent director. When the Executive
Chairman is not an independent director or is a member of Company management, or when the independent directors determine that
it is in the best interests of the Company, the independent directors will annually appoint a lead independent director.
Charles E. Commander III
currently serves as lead independent director. The lead independent director presides over executive sessions of the independent
directors and performs other duties as may be assigned from time to time by the Board of Directors.
Our Board of Directors
believes its current leadership structure is appropriate because it effectively allocates authority, responsibility and oversight
between management and the independent members of our Board of Directors. It does this by giving primary responsibility for the
operational leadership and strategic direction of the Company to our Chief Executive Officer, while enabling the lead independent
director to facilitate our Board of Directors’ independent oversight of management. The Board of Directors believes its programs
for overseeing risk, as described under the “Risk Oversight” section above, would be effective under a variety of leadership
frameworks and therefore do not materially affect its choice of structure.
Board Committees
The Board currently has
ten directors and the following four committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate
Governance Committee, and the Executive Committee. The membership during fiscal 2014 and the function of each Committee are described
below.
During fiscal 2014, the
Board of Directors held five meetings. The Audit Committee held four meetings, the Compensation Committee held one meeting, and
the Nominating and Corporate Governance Committee held two meetings during fiscal 2014 During fiscal 2014, the Executive Committee
did not hold any formal meetings but voted on various matters by unanimous written consent. The independent directors met
in executive sessions following Board meetings. All of our directors attended at least 75% of the meetings of the Board
and all committees on which the director served.
The following chart shows
the composition of the committees of the Board of Directors during fiscal 2014. Except for the Executive Committee, each of the
committees of the Board is composed exclusively of independent directors.
Director |
Audit |
Compensation |
Nominating/Corporate
Governance |
Executive |
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Edward L. Baker |
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X* |
John D. Baker II |
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X |
Charles E. Commander III |
X |
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Thompson S. Baker II |
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Robert H. Paul III |
X |
X* |
X |
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H. W. Shad III |
X* |
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Martin E. Stein, Jr. |
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X* |
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James H. Winston |
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X – Committee Member |
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– Committee Chair |
Audit Committee
The Audit Committee assists
the Board in its oversight of the Company’s accounting and financial reporting processes and the audit of the Company’s
financial statements, the integrity of the Company’s financial statements, compliance with legal and regulatory requirements,
and the qualifications, independence, and performance of the Company’s independent auditor. In addition to other responsibilities,
the Audit Committee also:
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Reviews the annual audited and the quarterly consolidated financial statements; |
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Discusses with the independent auditor all critical accounting policies to be used in the consolidated financial statements, all alternative treatments of financial information that have been discussed with management, other material communications between the independent auditor and management, and the independent auditor’s observations regarding the Company’s internal controls; |
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Reviews earnings press releases prior to issuance; |
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Appoints, oversees, and approves compensation of the independent auditor; |
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Approves all audit and permitted non-audit services provided by the independent auditor; |
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Reviews findings and recommendations of the independent auditor and management’s response to the recommendations of the independent auditor; |
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Recommends whether the audited financial statements should be included in the Company’s Annual Report on Form 10-K; and |
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Reviews and approves all transactions between the Company and any related person that are required to be disclosed under the rules of the Securities Exchange Commission that have not previously been approved by the Company’s independent directors. |
The Board of Directors
has determined that all Audit Committee members are independent and are able to read and understand financial statements. The Board
of Directors has also determined that the Chair of the Committee, H.W. Shad III, qualifies as an “audit committee financial
expert” within the meaning of SEC regulations. The charter of the Audit Committee (as adopted on December 3, 2014) is available
on our website at www.frpholdings.com under Corporate Governance.
Compensation Committee
Committee Functions.
The primary functions of the Compensation Committee are to (1) discharge the responsibilities of the Board of Directors relating
to the compensation of the Company’s executive officers, and (2) prepare an annual report on executive compensation to be
included in the Company’s proxy statement. In addition, the Compensation Committee:
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Reviews and approves the Company’s goals and objectives relevant to the compensation of the Chief Executive Officer and evaluates his job performance in light of those goals and objectives; |
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Establishes compensation levels, including incentive and bonus compensation, for the Chief Executive Officer; |
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Establishes and determines, in consultation with the Chief Executive Officer, the compensation levels of other senior executive officers; |
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Reviews, periodically, with the Chairman and the Chief Executive Officer the succession plans for senior executive officers and makes recommendations to the Board regarding the selection of individuals to occupy these positions; |
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Administers the Company’s stock plans; and |
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Reviews and reassesses the Compensation Committee charter for adequacy on an annual basis. |
The charter of the Compensation
Committee (as adopted on December 3, 2014) has been formally adopted by the Company and is available at www.frpholdings.com under
Corporate Governance.
Nominating and Corporate Governance Committee.
Under its charter, the
principal functions of the Nominating and Corporate Governance Committee are to (1) identify individuals who are qualified to serve
on the Company’s Board of Directors, (2) recommend for selection by the Board of Directors the director nominees for the
next annual meeting of the shareholders, (3) review and recommend to the Board changes to the corporate governance practices of
the Company, and (4) oversee the annual evaluation of the Board. In addition, the Nominating and Corporate Governance Committee
establishes criteria for Board membership.
The charter of the Nominating
and Corporate Governance Committee (as adopted on December 3, 2014) is available at www.frpholdings.com under Corporate Governance.
Executive Committee
John D. Baker II, Edward
L. Baker, Thompson S. Baker II and John D. Milton, Jr. (ex officio), comprised the Executive Committee during fiscal 2014. To
the extent permitted by law, the Executive Committee exercises the powers of the Board between meetings of the Board of Directors.
NOMINATING PROCESS
Role of the Nominating and Corporate Governance
Committee in the Nominating Process
The Nominating and Corporate
Governance Committee (“Nominating Committee”) identifies individuals whom the Nominating Committee believes are qualified
to become Board members in accordance with the Director Qualification Standards set forth below, and recommends selected individuals
to the Board for nomination to stand for election at the next meeting of shareholders of the Company in which directors will be
elected. In the event there is a vacancy on the Board between meetings of shareholders, the Nominating Committee identifies individuals
that the Nominating Committee believes are qualified to become Board members in accordance with the Director Independence Standards
set forth below, and recommends one or more of such individuals for appointment to the Board.
Director Qualification Standards
The Nominating Committee
has established the following standards and qualifications for members of the Board of Directors:
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Each director shall at all times represent the interests of the shareholders of the Company. |
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Each director shall at all times exhibit high standards of integrity, commitment and independence of thought and judgment. |
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Each director shall dedicate sufficient time, energy and attention to ensure the diligent performance of his or her duties, including attending shareholder meetings and meetings of the Board and Committees of which he or she is a member, and by reviewing in advance all meeting materials. |
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The Board shall meet the applicable standards of independence from the Company and its management. |
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The Board shall encompass a range of talent, skill and expertise sufficient to provide sound and prudent guidance with respect to all of the Company’s operations and interests. |
In considering diversity in the selection of
nominees, the Nominating Committee looks for individuals with varied experience, background, knowledge, skills and viewpoints in
order to achieve and maintain a group of directors that, as a whole, provides effective oversight of the management of the Company.
Although our nomination policy does not prescribe specific standards for diversity, the Board and Nominating Committee do look
for nominees with a diverse set of skills that will complement the existing skills and experience of our directors and provide
an overall balance of diversity of perspectives, backgrounds and experiences.
Identification, Evaluation and Selection
of Nominees
In the event the
Nominating Committee recommends an increase in the size of the Board or a vacancy occurs, the Nominating Committee may
consider qualified nominees from several sources, including current Board members and search firms. The Nominating Committee
may from time to time retain a search firm to help the Nominating Committee identify qualified director nominees for
consideration by the Nominating Committee. The Nominating Committee evaluates qualified director nominees against the current
director qualification standards described above and reviews qualified director nominees with the Board. The Nominating
Committee and the Chairman of the Board interview candidates who meet the director qualification standards, and the
Nominating Committee selects nominees who best suit the Board’s current needs and recommends one or more of such
individuals for appointment to the Board.
Nominees Proposed by Shareholders for Consideration
by the Committee
The Nominating Committee
will consider properly submitted shareholder nominees for candidates for membership on the Board of Directors. Shareholders proposing
individuals for consideration by the Nominating Committee must include at least the following information about the proposed nominee:
the proposed nominee’s name, age, business or residence address, principal occupation or employment, and whether such person
has given written consent to being named in the proxy statement as a nominee and to serving as a director if elected. Shareholders
should send the required information about the nominee to:
Corporate Secretary
FRP Holdings, Inc.
200 W. Forsyth Street, 7th Floor
Jacksonville, Florida 32202
In order for an individual
proposed by a shareholder to be considered by the Committee for recommendation as a Board nominee for the Annual Meeting of Shareholders
to be held in early 2016, the Corporate Secretary must receive the proposal no later than 5 p.m. Eastern Time on September 30,
2015. Such proposals must be sent via registered, certified or express mail. The Corporate Secretary will send properly submitted
shareholder proposed nominations to the Committee Chair for consideration at a future Committee meeting. Individuals proposed by
shareholders in accordance with these procedures will receive the same consideration that individuals identified to the Committee
through other means receive.
Nominations by Shareholders at Annual Meeting
The Company’s Articles
of Incorporation provide that only persons who are nominated in accordance with the procedures set forth in the Articles of Incorporation
shall be eligible for election as directors by the shareholders. Under the Articles of Incorporation, directors may be nominated,
at a meeting of shareholders at which directors are being elected, by (1) the Board of Directors or any committee or person authorized
or appointed by the Board of Directors, or (2) by any shareholder who is entitled to vote for the election of directors at the
meeting and who complies with certain advance notice procedures. These notice procedures require that the nominating shareholder
make the nomination by timely notice in writing to the Secretary of the Company. To be timely, the notice must be received at the
principal executive offices of the Company not less than forty (40) days prior to the meeting except that, if less than fifty (50)
days’ notice or prior public disclosure of the date of the meeting is given to shareholders, the notice must be received
no later than ten (10) days after the notice of the date of the meeting was mailed or such public disclosure was made. The notice
must contain certain prescribed information about the proponent and each nominee, including such information about each nominee
as would have been required to be included in a proxy statement filed pursuant to the rules of the Securities and Exchange Commission
had such nominee been nominated by the Board of Directors.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Under our Existing Articles,
the Board of Directors is divided into four classes. If Proposal No. 3 in this Proxy Statement is approved by the shareholders
at the Annual Meeting, these classes will be eliminated and directors will be elected each year at the annual meeting of shareholders
for a one-year term. In anticipation of the approval of Proposal No. 3 by our shareholders, all directors elected at the Annual
Meeting will serve a one year-term.
In the event Proposal No.
3 is not approved by the shareholders, the directors elected at the Annual Meeting will be divided into classes and will serve
until the annual meeting of shareholders held in 2016, where directors will be elected to staggered terms in accordance with our
Existing Articles.
In connection with the
separation of the transportation group, the number of directors of the Company will be reduced from ten to seven directors. Messrs.
John E. Anderson, Edward L. Baker, Luke E. Fichthorn, and Robert H. Paul are expected to resign effective upon the separation to
become directors of the Company. Our director nominees are discussed below.
If you are a shareholder
of record, your proxy will be voted for the election of the persons nominated unless you indicate otherwise. If any of the nominees
named should become unavailable for election for any presently unforeseen reason, the persons named in the proxy shall have the
right to vote for a substitute as may be designated by the Board of Directors to replace such nominee, or the Board may reduce
the number of directors accordingly.
The Board unanimously recommends a vote FOR
the election of these nominees as directors.
Director Nominees
The following paragraphs
provide brief biographies of each of our nominees. These biographies include information regarding the person’s service as
a director, business experience, director positions held currently or at any time during the last five years, and information regarding
involvement in certain legal or administrative proceedings, if applicable. These biographies also describe the experience, qualifications,
attributes and skills that caused the Nominating Committee and the Board to determine that the person should serve as a director
of the Company.
John D. Baker II
John D. Baker II, age 66,
served as President and Chief Executive Officer of the Company from February 6, 2008 until September 30, 2010. He was elected as
a director of the Company in 1986. From February 1996 to November 16, 2007, Mr. Baker served as President and Chief Executive Officer
of Florida Rock Industries, Inc. Mr. Baker currently serves as a director for Wells Fargo & Co. and has formerly served as
a director for Vulcan Materials Company, Progress Energy, Inc. and Texas Industries, Inc. Mr. Baker brings to the Board extensive
knowledge in the transportation and real estate industries, as well as proven public company leadership and business experience.
Thompson S. Baker II
Thompson S. Baker II, age
56, has served as President and Chief Executive Officer of the Company since October 1, 2010. He was elected as a director in 1994.
Mr. Baker served as the President of the Florida Rock Division of Vulcan Materials Company from November 16, 2007 until September
2010. From August, 1991 to November 16, 2007, Mr. Baker served as the President of the Aggregates Group of Florida Rock Industries,
Inc. Mr. Baker currently serves as a director for Intrepid Capital Management, Inc. Mr. Baker's service with the Company and with
Florida Rock Industries, Inc. gives him extensive knowledge of the Company's business and the mining industry, and demonstrates
his leadership qualities.
Charles E. Commander, III
Mr. Commander, age
74, is a retired partner at the law firm Foley & Lardner, LLP, where he practiced corporate, financial institutions and
real estate law and was previously a member of that firm’s management committee. Mr. Commander was elected as a director
of the Company in 2004. Mr. Commander currently serves on the boards of EverBank Financial Corp., a diversified financial
services company, and BSR Trust, LLC, which is engaged in developing and managing residential rental properties. Mr. Commander
has served on the boards of numerous civic and charitable organizations. Mr. Commander's many years of legal experience and
his service on other boards provides our Board valuable insights regarding our business and on corporate governance and management
issues.
H. W. Shad III
H.W. Shad III, age 68,
was elected as a director of the Company in 2004. For the past five years he has been the owner of Bozard Ford Company, an automobile
dealership. Mr. Shad is a certified public accountant, and the Board of Directors has determined that he is an audit committee
financial expert. Mr. Shad's accounting and business expertise provide important leadership to our Board.
Martin E. Stein, Jr.
Martin E. "Hap"
Stein Jr., age 62, was elected as a director of the Company in 1992. Mr. Stein has served as Chief Executive Officer of Regency
Centers Corporation, a real estate investment trust, since its initial public offering in 1993 and has served as its Chairman of
the Board since 1999. Mr. Stein has also served as a director for Stein Mart, Inc. since 2001. Mr. Stein brings to the Board extensive
knowledge of the commercial real estate industry, as well as proven public company leadership and business expertise.
William H. Walton, III
William H. Walton III,
age 62, is a founding Managing Member and Chairman of Rockpoint Group, L.L.C., a real estate private equity firm and registered
investment adviser. Mr. Walton also is co-founder and Managing Member of Westbrook Real Estate Partners, L.L.C., a real estate
investment firm. Mr. Walton formerly served on the boards of directors of Florida Rock Industries, Inc. and St. Joe Company. Mr.
Walton brings to the Board extensive experience in the real estate investment business and a proven track record of leadership.
James H. Winston
James H. Winston, age 81,
was elected as a director of the Company in 1992. For the past five years, Mr. Winston has served as the President of LPMC, Inc.,
an investment real estate firm, and as President of Citadel Life & Health Insurance Co. Mr. Winston's long service on the Board
provides valuable insight to the Board and his professional background provides the Board with extensive knowledge of the real
estate and real estate development industries.
Family Relationships
Edward L. Baker, who will
serve as a director until the separation of the transportation group, and John D. Baker II are brothers. Thompson S. Baker II is
the son of Edward L. Baker and the nephew of John D. Baker II.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Audit Committee has
selected Hancock Askew & Co., LLP (“Hancock Askew”) as the Company’s independent registered public accounting
firm (auditors) to examine the consolidated financial statements of the Company, subject to satisfactory negotiation of an annual
fee agreement for fiscal 2015. The Board of Directors seeks an indication from shareholders of their approval or disapproval of
the Audit Committee’s appointment of Hancock Askew as the Company’s auditors.
Hancock Askew has been
our independent auditor since June 21, 2006, and no relationship exists other than the usual relationship between auditor and client.
If the appointment of Hancock
Askew as auditor for fiscal year 2015 is not approved by the shareholders, the adverse vote will be considered a direction to the
Audit Committee to consider other auditors for next year. However, because of the difficulty in making any substitution of auditors
so long after the beginning of the current year, Hancock Askew will remain the Company’s Independent Registered Public Accounting
Firm for fiscal year 2015, unless the Audit Committee finds other good reason for making a change.
Representatives of Hancock
Askew will be available to respond to questions at the annual meeting of shareholders.
PROPOSAL NO. 3
ADOPTION OF THE AMENDED AND RESTATED ARTICLES
OF INCORPORATION
The Board has unanimously
adopted and is submitting for shareholder approval of Amended and Restated Articles of Incorporation as set forth in Appendix
II ("Amended Articles"). If approved, the Amended Articles will become effective upon filing with the Department
of State of the State of Florida, which we intend to do promptly after approval of this proposal at the Annual Meeting.
The Amended Articles
are identical to the Company’s Existing Articles except for the changes described below:
Declassification of the Board of
Directors
The Existing Articles
divide our Board of Directors into four classes, with each class being elected annually to serve a four year term.
The Amended Articles
eliminate the classification of the Board and provide instead for the annual election of Directors commencing with the Company’s
2015 Annual Meeting of shareholders.
The Company’s
current classified board structure has been in place since 1988. The Board believes that its classified structure has helped assure
continuity of the Company’s business strategies and has reinforced a commitment to long-term shareholder value. Although
these are important benefits, the Board recognizes the growing sentiment among the investment community in favor of annual elections.
The Nominating and Corporate
Governance Committee has recommended that the Company declassify its Board of Directors. The Committee has considered carefully
the advantages and disadvantages of maintaining a classified board structure. After this assessment, the full Board of Directors,
upon the recommendation of the Committee, has decided that this is an appropriate time to propose declassifying the Board. This
determination by the Board of Directors furthers its goal of ensuring that the Company’s corporate governance policies maximize
management accountability to shareholders and would, if adopted, allow shareholders the opportunity each year to register their
views on the performance of the Board of Directors.
The proposed Amended
Articles eliminate the classification of the Board effective upon the Company’s 2015 Annual Meeting and provides for the
annual election of all directors. If the Amended Articles are approved, the entire Board would stand for election annually and
the term of any director chosen as a result of a newly created directorship or to fill a vacancy following such election would
expire at the next annual meeting of shareholders.
The proposed Amended Articles would
not change the present number of Directors or the Board’s authority to change that number and to fill any vacancies or newly
created directorships.
Approval of the Amended Articles will
result in the amendment of ARTICLE VII of the Company’s Amended Articles of Incorporation, as shown on Appendix II.
The Company’s Amended
Articles of Incorporation provide that any amendment to ARTICLE VII may only be approved by the affirmative vote of seventy-five
percent (75%) of the Company’s outstanding voting stock. Therefore, approval of Proposal No. 3 requires the affirmative vote
of the holders of seventy-five percent (75%) of the outstanding shares of Common Stock entitled to vote. Abstentions and “broker
non-votes” will have the same effect as votes against this proposal.
Eliminate the supermajority vote requirement
for approval for certain transactions with affiliates of the Company
The Existing Articles currently
require the approval of the holders of at least 75% of our common stock to complete any of the following transactions or business
combinations with a related person (as defined below):
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any merger or consolidation between the Company or any of its subsidiaries and a related person; |
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any sale, lease, exchange, transfer, or other disposition, including a pledge, not in the ordinary course of business, of more than 10% of the fair market value of the total assets of the Company or any of its subsidiaries to a related person; |
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any sale, lease, exchange, transfer, or other disposition, including a pledge, not in the ordinary course of business, by a related person to the Company of assets equaling at least 10% of the fair market value of the total assets of the Company; |
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any exchange of equity securities of the Company for securities of a related person; |
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the adoption of any plan or proposal for liquidation or dissolution of the Company proposed by or on behalf of a related person; |
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the issuance of any securities of the Company or any of its subsidiaries to a related person; |
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any recapitalization, reclassification, merger, consolidation, exchange of securities or other transaction that would have the effect of directly or indirectly increasing the voting power of a related person with respect to the Company or any of its subsidiaries; and |
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entering into any agreement, contract, or other arrangement providing for any of the transactions described above. |
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For purposes of the restrictions
described above, a “related person” is any individual, corporation, partnership, or other person which, together with
its affiliates and associates (as defined in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act
of 1934) beneficially owns at least 10% of the outstanding voting stock of the Company, and any affiliate or associate of any such
individual, corporation, partnership, or other person. The definition of related person does not include any person who acquired
beneficial ownership of at least 10% of the Company’s outstanding voting stock on or before February 2, 1989.
The Company is subject
to Section 607.0901 of the Florida Business Corporation Act (the “fair price provision”) which imposes certain requirements
on certain transactions (merger, sales of assets or the issuance of more than 5% of our common stock) with shareholders who beneficially
own more than 10% of our voting shares (an “interested shareholder”). This statute requires that an affiliated transaction
with an interested shareholder meet one of the following conditions: (i) the transaction is approved by the disinterested directors;
(ii) the transaction is approved by a two-thirds vote of the disinterested shareholders; or (iii) a statutory “fair price”
is paid to the disinterested shareholders in the transaction.
The Amended Articles would
delete the supermajority voting requirement in our articles of incorporation, leaving only the requirements of the Florida Business
Corporation Act to apply to the approval of this type of business combination. Given that shareholders have the protection
of the Florida fair price provision, the Board believes that it is appropriate to delete the Company’s provision on business
combinations with interested shareholders and allow shareholders to rely on the protections provided under Florida law.
Delete the designation of Series A Preferred
Stock
The Series A Preferred
Stock was created in connection with Patriot Transportation Holding, Inc.'s Shareholder Rights Plan, which is now expired. No shares
of the Series A Preferred Stock were issued. The Amended Articles eliminate this language as it is no longer necessary.
Delete or modify miscellaneous provisions that are of only historical
significance.
There are certain provisions
in our Existing Articles, which were adopted in 1988, that are no longer applicable to the Company. The Amended Articles would
eliminate or modify these historical provisions as described below.
1.
Eliminate ARTICLE II. GENERAL NATURE OF BUSINESS.
Article II of the
Existing Articles contain an extensive list of the nature of the business to be conducted by the Company and the corporate powers
of the Company. This provision is no longer necessary as Florida law provides that Florida corporations may engage in any lawful
activities.
2.
Modify ARTICLE VI. PRINCIPAL PLACE OF BUSINESS
The Existing Articles
list 155 East 21st Street, Jacksonville, Duval County, Florida 32206 as the principal office. The Company’s principal
office is now at 200 West Forsyth Street, 7th Floor, Jacksonville, Duval County, Florida 32202. The Amended Articles
reflect the current address.
Recommendation
The Board of Directors
has unanimously adopted, and recommends that the Company’s shareholders approve the Amended Articles as set forth on Appendix
II.
PROPOSAL NO. 4
ADVISORY VOTE ON EXECUTIVE COMPENSATION
We included a non-binding
advisory vote on our executive compensation program (also referred to as a “say on pay” proposal) in our proxy statement
last year. At our 2014 Annual Meeting of Shareholders, approximately 99.5% of the votes cast in the “say on pay” advisory
vote were “FOR” approval of our executive compensation. This year, in accordance with Section 14A of the Securities
Exchange Act of 1934, as amended, we are again asking shareholders to vote “FOR” approval of our executive compensation
program.
As discussed in the Compensation
Discussion and Analysis, we design our executive officer compensation program to attract, motivate, and retain the key executives
who drive our success and industry leadership. Our compensation program consists of several forms of compensation: base salary,
cash incentive bonuses, equity compensation and other benefits and perquisites. Pay that reflects performance and alignment of
that pay with the interests of long-term shareholders are key principles that underlie our compensation program. The Board believes
that our current executive compensation program directly links executive compensation to our performance and aligns the interest
of our executive officers with those of our shareholders.
Shareholders are urged
to read the “Compensation Discussion and Analysis” section of this proxy statement, which discusses how our executive
compensation policies and practices implement our compensation philosophy, and the “Executive Compensation” section
of this proxy statement, which contains tabular information and narrative discussion about the compensation of our named executive
officers.
Because this is an advisory
vote, it will not be binding on the Board. However, the Board and the Compensation Committee will review and take into account
the outcome of the vote when considering future executive compensation decisions.
Accordingly, the Board
proposes that you indicate your support for the Company’s compensation philosophy, policies, and procedures and their implementation
in fiscal year 2015 as described in this Proxy Statement.
SHAREHOLDER RETURN PERFORMANCE
The following table and
graph compare the performance of the Company’s common stock to that of the Total Return Index for The NASDAQ Stock Market-US
Index and The NASDAQ Trucking and Transportation Stock Index for the period commencing September 30, 2009 and ending on September
30, 2014. The graph assumes that $100 was invested on September 30, 2009 in the Company’s common stock and in each of the
indices and assumes the reinvestment of any dividends.
![](image_001.jpg)
Cumulative Total Return
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9/10 |
9/11 |
9/12 |
9/13 |
9/14 |
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FRP Holdings, Inc. |
88.77 |
76.75 |
105.87 |
128.47 |
134.78 |
NASDAQ Composite |
116.92 |
120.48 |
158.10 |
196.00 |
227.09 |
NASDAQ Transportation |
110.10 |
97.03 |
106.32 |
143.94 |
184.39 |
COMPENSATION DISCUSSION AND ANALYSIS
This section explains our
compensation philosophy and all material elements of the compensation we provide to the individuals who served as Chief Executive
Officer and Chief Financial Officer and our other three most highly compensated executive officers who served in such capacities
during the fiscal year ended September 30, 2014 (the “named executive officers”). The named executive officers for
fiscal 2014 are Thompson S. Baker II, our President and Chief Executive Officer, John D. Milton, Jr., our Executive Vice President
and Chief Financial Officer, David H. deVilliers, Jr., Vice President and President of FRP Development Corp., Robert E. Sandlin,
Vice President and President of Florida Rock & Tank Lines, Inc. and John D. Klopfenstein, our Controller and Chief Accounting
Officer.
Overview
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The objectives of our compensation program are to attract, retain and motivate talented leaders and to support our strategic objectives and core values. |
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We provide our executive officers with the following types of compensation: salary, cash-based short term incentives, equity-based long-term incentives and other benefits and perquisites. |
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We encourage a pay-for-performance environment by linking cash incentive awards to the achievement of measurable business and individual performance goals. |
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For fiscal 2015, we granted increases in base salaries for Mr. Baker, Mr. deVilliers and Mr. Klopfenstein in light of their performance. We did not increase Mr. Milton's base salary. |
The Compensation Committee
Our Compensation Committee
(“Committee”) establishes and oversees our compensation and employee benefits programs and approves the elements of
total compensation for the executive officers. In fiscal 2014, Robert H. Paul III, Martin E. Stein, Jr., and James H. Winston served
as the members of the Compensation Committee. Mr. Paul, who has served on our Board of Directors for approximately 20 years, is
the Committee Chairman. Each member of the Compensation Committee qualifies as an independent director under the listing standards
of The Nasdaq Stock Market; a non-employee director for purposes of Rule 16b-3 of the Exchange Act; and an outside director for
purposes of Section 162(m) of the Internal Revenue Code. Additionally, no member of the Compensation Committee accepts, directly
or indirectly, any consulting, advisory or other compensatory fee from the Company or its subsidiaries (other than fees received
due to services on the Board and its committees or fixed amounts of compensation under the Company’s retirement plans for
prior service with the Company).
Compensation Philosophy
The following principles
guide our compensation decisions:
We Focus on Strategic
Objectives
Our compensation decisions
are driven by FRP’s business strategy. We intend that our compensation decisions will attract and retain leaders and motivate
them to achieve FRP’s strategic objectives.
We Believe in Pay
for Performance
We believe that pay should
be directly linked to performance. This philosophy has guided many compensation-related decisions:
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A substantial portion of executive officer compensation usually is contingent on, and variable with, achievement of objective business unit and/or individual performance objectives. |
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Our stock incentive plan prohibits discounted stock options, reload stock options and re-pricing of stock options. |
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We have capped the benefit levels under the Management Security Plan and have closed the plan to new participants. Only one of our named executive officers participates in the Management Security Plan. Our executive officers do not accrue additional benefits under any other supplemental executive retirement plan. |
Compensation Should
Reflect Position and Responsibility
Total compensation and
accountability should generally increase with position and responsibility.
Compensation Should
be Reasonable and Responsible
It is essential that FRP’s
overall compensation levels be sufficiently competitive to attract and retain talented leaders and motivate those leaders to achieve
superior results. At the same time, we believe that compensation should be set at responsible levels. Our executive compensation
programs are intended to reflect the understanding that this Company belongs to our shareholders.
The Committee discussed
the results of the previous year’s shareholder advisory vote on executive compensation. The Committee has determined, based
in part upon the fact that approximately 99.5% of the shares voting on the matters voted in favor of the Company’s compensation
philosophy, policies and procedures for fiscal 2014, that the current executive compensation provision effectively aligns the interests
of our executive officers with that of our shareholders.
Variable Performance-Based Pay as a Percentage
of Potential Compensation
The Committee believes
that both long and short term compensation of executive officers should correlate to the achievement of the Company’s financial
objectives. For example, for fiscal 2014, Mr. Sandlin was eligible to receive a performance-based cash bonus of up to 110% of his
salary, Messrs. Thompson Baker and deVilliers were eligible to receive performance-based cash bonuses of up to 100% of their base
salaries, Mr. Milton was eligible to receive a performance-based cash bonus of up to 100% of his base salary, and Mr. Klopfenstein
was eligible to receive a performance-based cash bonus of up to 50% of his base salary.
Overview
and Objectives of our Executive Compensation Program
The compensation
program for our executive officers is designed to attract, motivate, reward and retain highly qualified individuals who can contribute
to the Company’s growth with the ultimate objective of improving shareholder value. Our compensation program consists of
several forms of compensation: base salary, cash incentive bonuses, equity compensation and other benefits and perquisites.
The compensation
program is designed to integrate with the Company’s business plan and the opportunities and challenges facing the Company
in an ever-evolving business environment. Accordingly, the Committee does not use predetermined guidelines or benchmarking to determine
the elements and levels of compensation for our executive officers or to allocate between cash and long term or equity incentives.
The Committee
receives and reviews a variety of information throughout the year to assist it in carrying out its responsibilities. The
Committee reviews financial reports comparing Company performance on a year-to-date basis versus budget and receives operating
reports at each regular Board meeting. The Chief Executive Officer provides the Committee with an assessment of the Company’s
achievements and performance, his evaluation of individual performance and his recommendations for annual compensation, and annual
performance targets and equity compensation awards. The Committee makes all final decisions regarding the compensation of
our executive officers. When making individual compensation decisions for executive officers, the Committee takes many factors
into account, including the individual’s performance, tenure, experience and responsibilities; the performance of the Company
or the executive’s business unit; retention considerations; the recommendations of management; the individual’s historic
compensation and the results of the previous year’s shareholder advisory vote on executive compensation.
The Compensation
Committee does strive to assure that a significant portion of the potential compensation of the named executive officers is contingent,
performance-based compensation linked to the achievement of specific objectives. To achieve this goal, incentive bonuses are established
as a percentage of their base salaries.
2014 “Say on Pay”
Advisory Vote on Executive Compensation
We included
a non-binding advisory vote on our executive compensation program (also referred to as a “say on pay” proposal)
in our proxy statement last year. At our 2014 Annual Meeting of Shareholders, approximately 99.5% of the votes cast in the
“say on pay” advisory vote were “FOR” approval of our executive compensation. The Compensation
Committee evaluated the results of the 2014 advisory vote together with the other factors and data discussed in the
Compensation Discussion and Analysis in determining executive compensation policies and decisions. The Compensation Committee
believes that the outcome of our say on pay vote reflects our shareholders’ support of our compensation approach and
did not make any material changes to our fiscal 2014 executive compensation policies and decisions as a result of the 2014
advisory vote. We value the opinions of our shareholders and will continue to consider the outcome of future say on pay votes
when designing our compensation programs and policies and making compensation decisions.
The Board of Directors
has determined to hold an annual shareholder advisory vote on executive compensation until the next required vote on the frequency
of shareholder advisory votes on executive compensation.
Components of Executive Compensation
Base Salary
General.
Base pay is a critical element of executive compensation because it provides executives with a base level of monthly income. In
determining base salaries, we consider the executive’s qualifications and experience, scope of responsibilities and future
potential, the goals and objectives established for the executive, the executive’s past performance, internal pay equity
and the tax deductibility of base salary. As part of determining annual increases, the Committee also considers the Chief Executive
Officer’s written recommendations, the observations of the Chief Executive Officer and of the Committee members regarding
individual performance and internal pay equity considerations.
Fiscal 2014
and 2015 Actions. We set base salaries on a calendar year basis. The following table reflects the adjustments made to the
base salaries of the named executive officers for calendar years 2014 and 2015.
Name and Title |
2014 Base
Salary |
% Increase
from 2013 |
2015 Base
Salary |
% Increase
from 2014 |
Thompson S. Baker II |
|
|
|
|
President and CEO |
$406,850 |
3% |
$420,000 |
3.2% |
|
|
|
|
|
John D. Milton, Jr. |
$165,000 |
0% |
$165,000 |
0% |
Executive Vice President
and Chief Financial Officer |
|
|
|
|
|
|
|
|
|
David H. deVilliers, Jr. |
$324,404 |
2.5% |
$324,404 |
0% |
Vice President and President,
FRP Development Corp. |
|
|
|
|
|
|
|
|
|
Robert E. Sandlin |
$260,400 |
5% |
$275,000 |
5.6% |
Vice President and President,
Florida Rock & Tank Lines, Inc. |
|
|
|
|
|
|
|
|
|
John D. Klopfenstein |
$184,800 |
5% |
$192,192 |
4.0% |
Controller and Chief
Accounting Officer |
|
|
|
|
Analysis.
The Committee increased the base salaries of Messrs. Baker, Sandlin and Klopfenstein for fiscal 2015 in light of their management
performance. The Committee did not increase Mr. Milton's or Mr. deVillier's base salaries based on the Committee’s view that
his existing base salary was adequate in light of his total compensation packages.
Cash Incentive Compensation
Management Incentive
Compensation Plan. The Management Incentive Compensation Plan (the “MIC Plan”) provides officers and key employees
an opportunity to earn an annual cash bonus for achieving specified, performance-based goals established for the fiscal year. Performance
goals under the MIC Plan are tied to measures of operating performance rather than appreciation in stock price.
The
Compensation Committee traditionally has established performance objectives for the transportation subsidiaries based on
targeted levels of after-tax return on average capital employed. We believe that after-tax return-on-capital employed (ROCE)
is an important measure of performance in an asset-intensive business, both to evaluate management’s performance and to
demonstrate to shareholders that capital has been used wisely over the long term. For purposes of this bonus
calculation, return on average capital employed is defined as the Transportation Group’s net income excluding the
after-tax cost of financing, divided by its total monthly average capital employed.
The Compensation
Committee historically established performance objectives for the Developed Buildings and Land segment based on operating properties
in the portfolio (usually gross profit on developed buildings and average occupancy rates for properties in service more than 12
months), special projects and new development. For fiscal 2014 and 2015, the Compensation Committee established bonus pools tied
to the achievement of targeted levels of adjusted after-tax return on capital employed (calculated as described below).
Fiscal 2014
and 2015 Actions. The following chart describes the performance objectives and potential bonuses for the named executive officers
for fiscal years 2014 and 2015:
Name |
Year |
Potential
Bonus as a
% of Salary |
Performance Targets |
|
|
|
|
Thompson S. Baker II |
2015 |
100% |
Achievement by the Developed Properties Rentals segment of a targeted level of after-tax ROCE and achievement by the Transportation Group of a targeted level of ROCE.(1)(3)(4)(5) |
|
2014 |
100% |
Achievement by Company of a targeted level of net income for fiscal 2014.(1)(2)(3)(4)(5) |
|
|
|
|
John D. Milton, Jr. |
2015 |
100% |
Achievement by the Developed Properties Rentals segment of a targeted level of after-tax ROCE and Achievement by the Transportation Group of a targeted level of ROCE.(1)(3)(4)(5) |
|
2014 |
100% |
Achievement by Company of a targeted level of net income for fiscal 2014(1)(2)(3)(4)(5)(6) |
|
|
|
|
David H. deVilliers, Jr. |
2015 |
100% |
Achievement by the Developed Properties Rentals segment of a targeted level of ROCE and achievement of other strategic objectives.(1)(4)(5) |
|
2014 |
100% |
Achievement of Developed Properties Rentals segment objectives, including targeted level of adjusted after-tax ROCE(1)(4)(5) |
|
|
|
|
Robert E. Sandlin |
2015 |
110% |
Achievement of a targeted level of ROCE.(1)(3)(5) |
|
2014 |
110% |
Achievement by the Transportation Group of a targeted level of ROCE.(1)(3)(5) |
|
|
|
|
John D. Klopfenstein |
2015 |
50% |
Achievement by the Developed Properties Rentals segment of a targeted level of after-tax ROCE and achievement by the Transportation Group of a targeted level of ROCE.(1)(3)(4)(5) |
|
2014 |
50% |
Achievement of a targeted level of net income for the Company. (1)(2)(3)(4)(5) |
(1)
|
Each executive’s bonus is also contingent on the achievement of certain individual objectives. |
|
|
(2) |
For 2014, the specified level of net income for the Company was $12,285,000. If actual net income for the year was less than $12,285,000 but greater than $10,820,000, the bonus would have been prorated between 20% and 100%. |
(3) |
With respect to the Transportation
Group, the specified officers are or were eligible to receive a bonus up to the specified percentage of his base salary if the
named business unit achieved a specified level of after-tax ROCE. If after-tax ROCE exceeded a threshold level but was less than
the target level, the bonus would be prorated. For 2015, the threshold and target after-tax ROCE levels for the transportation
group are 10.5% and 13.0%. The threshold and target after-tax ROCE levels for the Transportation Group was 12.0% and 13.83% for
2014. Capital employed excludes the effect of prepaid insurance premiums to a captive insurer.
|
(4) |
For fiscal 2014, bonuses for the Developed
Properties Rentals segment were contingent on the achievement of adjusted after-tax return on capital employed (as described below)
between a minimum of 3.66% (at which the available bonus pool was 40%) and a maximum of 4.30% (at which the available bonus pool
was 100%). If the adjusted after-tax return on capital employed was less than 4.30% but more than 3.66%, the available bonus pool
was prorated between 40% and 100%. For fiscal 2014, adjusted after-tax return on capital employed was calculated as: (i) the sum
of (A) the Developed Properties Rentals segment’s operating profit for fiscal 2014, plus (B) the indirect management company
overhead expense and parent company overhead expense allocated to the Developed Properties Rentals segment, plus (C) any net loss
on the Anacostia property, less (D) any net income from the 21st Street property, less (E) income taxes on the resulting
total, calculated using a 40% assumed income tax rate; divided by (ii) the total monthly average capital employed in the Developed
Properties Rentals segment [identifiable assets of the Developed Properties Rentals segment less the Anacostia Riverfront property
and less the 21st Street property, and less liabilities (other than mortgage indebtedness and deferred income taxes)].
In calculating the adjusted after-tax return on capital employed for the Developed Properties Rentals
segment for 2014 and the Company’s net income for 2014 (for bonus purposes only), the following adjustments were made: (i)
for leases executed in fiscal 2014, the amount to be included in revenues will be the greater of the lease revenues under the lease
for fiscal 2014 or fifty percent (50%) of the lease revenues under the lease for fiscal 2015; (ii) a credit was given for the quantifiable
benefit from any Code Section 1031 exchange; (iii) for finished lot sales, credit was given for revenue received over the floor
area ratio (FAR) basis; and (iv) any capital expended in the Developed Properties Rentals segment in excess of budgeted expenditures
was excluded from the calculation of capital employed.
For fiscal 2015, bonuses for the Developed
Properties Rentals segment are contingent on the achievement of adjusted after-tax return on capital employed (as described below)
between a minimum of 3.79% (at which the available bonus pool is 55%) and a maximum of 6.23% (at which the available bonus pool
is 100%). If the adjusted after-tax return on capital employed is less than 6.23% but more than 3.79%, the available bonus pool
will be prorated between 55% and 100%. For fiscal 2015, adjusted after-tax return on capital employed will be calculated as: (i)
the sum of (A) the Developed Properties Rentals segment’s operating profit for fiscal 2015, plus (B) the indirect management
company overhead expense and parent company overhead expense allocated to the Developed Properties Rentals segment, plus (C) any
net loss on the Anacostia property, less (D) any net income from the 21st Street property, less (E) income taxes on
the resulting total, calculated using a 40% assumed income tax rate; divided by (ii) the total monthly average capital employed
in the Developed Properties Rentals segment [identifiable assets of the Developed Properties Rentals segment less the Anacostia
Riverfront property and less the 21st Street property, and less liabilities (other than mortgage indebtedness and deferred
income taxes)]. In calculating the adjusted after-tax return on capital employed for the Developed Properties Rentals
segment for 2015 and the Company’s net income for 2015 (for bonus purposes only), the following adjustments will be made:
(i) for leases executed in fiscal 2015, the amount to be included in revenues will be the greater of the lease revenues under the
lease for fiscal 2015 or fifty percent (50%) of the lease revenues under the lease for fiscal 2016; (ii) a credit will be given
for the quantifiable benefit from any Code Section 1031 exchange; (iii) for finished lot sales, credit will be given for revenue
received over the floor area ratio (FAR) basis; and (iv) if capital is expended in the Developed Properties Rentals segment in
excess of budgeted expenditures, it will be excluded from the calculation of capital employed.
|
(5) |
For each year, a portion of the bonus
for each officer was contingent on a determination that the internal control over financial reporting for the company (or their
respective business unit) was effective for the applicable year.
|
(6) |
Mr. Milton was eligible to earn an
additional bonus of up to 40% of his base salary if the Compensation Committee determined that he is instrumental in the achievement
of one or more significant capital transactions outside the ordinary scope of the Company’s business activities.
|
Analysis. Cash-based
incentive compensation comprises a significant portion of the potential total compensation of the named executive officers. For
fiscal 2014, cash-based incentive compensation comprised 38% of the potential total compensation and 12.9% of the actual total
compensation of the named executive officers. We believe that these incentives play a significant role in helping the Company achieve
its business objectives.
Stock Options
General.
Long-term equity incentives help to motivate executives to make decisions that focus on long-term growth and thus increase shareholder
value. The Committee believes that such grants help align our executive officers’ interests with the Company’s
shareholders. When our executives deliver sustained returns to our shareholders, equity incentives permit an increase in their
own compensation.
Traditionally,
the Committee has made equity compensation awards in the form of stock options. All stock options incorporate the following features:
the term of the grant does not exceed 10 years; the grant price is not less than the market price on the date of grant; grants
do not include “reload” provisions; re-pricing of options is prohibited, unless approved by the shareholders; and to
encourage employee retention, most options vest over a period of years.
Fiscal 2014
and 2015 Actions.
In fiscal 2014,
the Committee approved the award of options to acquire 10,700 shares to Thompson S. Baker. In fiscal 2015, the Committee approved
the award of options to acquire 12,340 shares to Mr. Baker. In making the grant, the Compensation Committee considered the performance
of Mr. Baker, his total compensation package and his importance to the Company, and Mr. Baker’s prior stock option grants.
In fiscal 2014,
the Committee approved the award of options to acquire 5,350 shares each to Messrs. deVilliers and Sandlin and 2,890 shares to
Mr. Klopfenstein. In fiscal 2015, the Committee approved the award of options to acquire 6,170 shares each to Messrs. deVilliers
and Sandlin and 3,330 shares to Mr. Klopfenstein. In making such grants, the Compensation Committee considered the past performance
of Messrs. deVilliers, Sandlin and Klopfenstein, their total compensation packages and the importance of Messrs. deVilliers and
Sandlin to the real estate and transportation groups.
In fiscal 2014
and fiscal 2015, the Committee approved the award to Mr. Milton of options to acquire 7,500 and 9,375 shares, respectively. In
making this grant, the Compensation Committee considered Mr. Milton’s past performance, base salary and bonus, his qualifications
and responsibilities and his ability to impact the future performance of the Company.
All of the options
described above vest 20% per year beginning the first anniversary of the grant date, except that Mr. Milton’s options vest
immediately. All options expire on the tenth anniversary of the grant date. The per share option price for all options is the closing
price of the Company’s common stock on the grant date.
Analysis. The
Committee believes that equity compensation is an important element of overall compensation. At the same time, the Committee recognizes
that equity grants impose a dilution cost to the shareholders. The Committee made grants to the named executive officers because
the Committee believes that equity incentives should be a significant part of their compensation package. The Committee plans to
continue to evaluate the use of equity compensation as a tool to motivate management.
Health
and Welfare Benefits
In addition
to participating in the same health and welfare plans, including our 401(k) plan, as our other salaried employees, our executive
officers participate in a supplemental medical expense reimbursement plan.
Our Management
Security Plan was adopted many years ago as a retention tool to provide retirement benefits (based on annual base salaries) to
certain senior executives. The Management Security Plan provides for annual payments to participants (or their beneficiaries) until
the later of (i) their date of death or (ii) 15 years after their retirement or death. The annual payments are set at two times
the benefit level during the first year and at the annual benefit level in subsequent years. The benefit levels originally increased
with base salaries but the Company capped the benefit levels at 50% of base salaries as of December 31, 2002. The plan has been
closed to newly hired executives for several years. Mr. deVilliers is the only named executive officer who currently participates
in the Management Security Plan.
Severance
and Change of Control Agreements
Until December
2007, none of our named executive officers had any arrangements that provide for payment of severance payments or payment of any
benefits upon a change-in-control of FRP, except for change-in-control provisions that accelerate vesting of stock options or restricted
stock under our equity compensation plans.
On December 5,
2007, the Company entered into change-in-control agreements with Messrs. deVilliers Sandlin and Klopfenstein. The agreements are
“double trigger” agreements that will pay benefits to the executives, under certain circumstances, if they are terminated
following a change-in-control of the Company or a sale of their particular business unit.
Mr. deVilliers’
agreement provides that if he is terminated following a change-in-control or a sale of his business unit other than for “cause”
or if he resigns following such event for “good reason,” the benefits under his Management Security Plan shall become
fully vested and the present value of such benefits shall be paid to Mr. deVilliers. In the case of Messrs. Sandlin and Klopfenstein,
the agreements provide that each of them will be entitled to receive an amount equal to two times his base salary plus maximum
bonus if, during the two years after a change-in-control or sale of Florida Rock & Tank Lines, Inc. his employment is terminated
other than for “cause” or he resigns for “good reason.” In addition, each of them will become fully vested
in his stock options and restricted stock.
For this purpose,
cause is generally defined as (i) conviction for commission of a felony, (ii) willful misconduct or gross negligence
or material violation of policy resulting in material harm to his employer, (iii) repeated and continued failure by the executive
to carry out, in all material respects, the employer’s reasonable and lawful directions, or (iv) fraud, embezzlement,
theft or material dishonesty. Good reason is generally defined as (i) a material reduction in compensation or benefits, (ii) a
requirement that the executive relocate, or (iii) any material diminution in the executive’s duties, responsibilities,
reporting obligations, title or authority.
We believe these
change-in-control arrangements, the value of which are contingent on a change of control transaction, effectively create incentives
for our executive team to build shareholder value and to obtain the highest value possible should we be acquired in the future,
despite the risk of losing employment. These change of control arrangements for our executive officers are “double trigger,”
meaning that acceleration of vesting is not awarded upon a change of control unless the executive’s employment is terminated
involuntarily (other than for cause) or by the executive for good reason within 24 months following the transaction. We believe
this structure strikes a proper balance by not providing these benefits to executives who continue to enjoy employment with an
acquiring company in the event of a change of control transaction. We also believe this structure is more attractive to potential
acquiring companies, who may place significant value on retaining members of our executive team and who may perceive this goal
to be undermined if executives receive significant acceleration payments in connection with such a transaction and are no longer
required to continue employment.
Personal
Benefits
Our executives
receive a limited number of personal benefits certain of which are considered taxable income to them and which are described in
the footnotes to the section of this proxy statement entitled “Summary Compensation Table.”
Compensation Policies
Internal Pay Equity
We believe that
internal pay equity is an important factor to be considered in establishing compensation for the officers. We have not established
a policy regarding the ratio of total compensation of the Chief Executive Officer to that of the other officers, but we do review
compensation levels to ensure that appropriate equity exists.
Compensation Risk Assessment
The Committee considers
the risks that may result from the Company’s compensation policies and practices. The Committee believes that our
compensation policies and practices for our executives are reasonable and properly align their interests with those of our shareholders.
The Committee believes that there are a number of factors that cause our compensation policies and practices to not have a material
adverse effect on the Company.
The fact that our executive officers
have their annual incentive compensation tied to return on capital employed encourages actions that promote profitability. Our
equity-based incentives further align the interest of our executives with the long term interests of our shareholders. In addition,
we believe that there are significant checks in place so that employees whose compensation may have a shorter term focus are managed
by employees and officers whose compensation has a longer term focus.
Tax Deductibility of Compensation
Should be Maximized Where Appropriate
The Company generally
seeks to maximize the deductibility for tax purposes of all elements of compensation. For example, the Company always has issued
nonqualified stock options that result in a tax deduction to the Company upon exercise. Section 162(m) of the Internal Revenue
Code generally disallows a tax deduction to public corporations for non-qualifying compensation in excess of $1.0 million paid
to any such persons in any fiscal year. We review compensation plans in light of applicable tax provisions, including Section 162(m),
and may revise compensation plans from time to time to maximize deductibility. However, we may approve compensation that does not
qualify for deductibility when we deem it to be in the best interests of the Company.
Financial Restatement
It is the Board
of Directors’ Policy that the Compensation Committee will, to the extent permitted by governing law, have the sole and absolute
authority to make retroactive adjustments to any cash or equity based incentive compensation paid to executive officers and certain
other officers where the payment was predicated upon the achievement of certain financial results that were subsequently the subject
of a restatement. Where applicable, the Company will seek to recover any amount determined to have been inappropriately received
by the individual executive.
COMPENSATION COMMITTEE REPORT
We have reviewed
and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management,
we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
Submitted by: |
Robert H. Paul III |
|
Martin E. Stein, Jr. |
|
James H. Winston |
EXECUTIVE COMPENSATION
Fiscal 2014 Summary Compensation
Table
The following table
sets forth information concerning the compensation of our named executive officers for the year ended September 30, 2014:
Summary Compensation Table
Name and Principal Position |
Year |
Salary
($) |
Stock Awards
(1) |
Option
Awards
(1) |
Non-Equity Incentive Plan Compensation
(2) |
Change in Pension Value and Nonqualified Deferred
Compensation Earnings
($)(3) |
All Other Compensation ($)(4) |
Total ($) |
|
|
|
|
|
|
|
|
|
Thompson S. Baker II President and CEO (PEO) |
2014 |
$ 403,888 |
--- |
$200,000 |
--- |
--- |
$47,848 |
$651,736 |
2013 |
$395,000 |
--- |
$200,000 |
$395,000 |
--- |
$27,297 |
$1,017,297 |
2012 |
$395,000 |
--- |
--- |
$359,055 |
--- |
$26,326 |
$780,381 |
John D. Milton, Jr. Executive Vice President and CFO (PFO) |
2014 |
$165,000 |
--- |
$91,102 |
--- |
--- |
$43,326 |
$299,428 |
2013 |
$165,000 |
--- |
$55,139 |
$95,040 |
--- |
$25,739 |
$340,918 |
2012 |
$165,000 |
--- |
$52,650 |
$89,991 |
--- |
$21,154 |
$328,795 |
David H. deVilliers, Jr., Vice President and President, FRP Development
Corp. |
2014 |
$322,426 |
--- |
$100,000 |
$324,404 |
$139,923 |
$19,936 |
$906,689 |
2013 |
$314,869 |
--- |
$100,000 |
$316,492 |
$128,079 |
$16,168 |
$875,608 |
2012 |
$310,000 |
--- |
$100,000 |
$310,000 |
$118,206 |
$15,184 |
$853,390 |
Robert E. Sandlin, Vice President and President, Florida Rock & Tank Lines, Inc. |
2014 |
$257,300 |
--- |
$100,000 |
--- |
--- |
$26,953 |
$384,253 |
2013 |
$245,063 |
--- |
$100,000 |
$272,800 |
--- |
$17,574 |
$635,437 |
2012 |
$233,437 |
--- |
$100,000 |
$174,825 |
--- |
$22,878 |
$531,140 |
John D. Klopfenstein, Controller and Chief Accounting Officer |
2014 |
$182,600 |
--- |
$54,000 |
--- |
--- |
$32,058 |
$268,658 |
2013 |
$174,000 |
--- |
$33,618 |
$88,000 |
--- |
$20,944 |
$316,562 |
2012 |
$166,000 |
--- |
$28,314 |
$76,356 |
--- |
$24,394 |
$295,064 |
(1) |
Amounts reflect the value of the award at grant date. |
|
|
(2) |
This column represents amounts paid under the MIC Plan. The performance objectives and threshold and target performance levels for these executives are described under the “Compensation Discussions and Analysis” section of the proxy statement. |
|
|
(3) |
This column represents the increase in the actuarial present value of the named executive officer’s future benefits under the Management Security Plan. For more detail, see the disclosure under the Pension Benefits table below. |
|
|
(4) |
The amounts shown under All Other Compensation include: the benefit to the executive for personal use of a Company provided vehicle; the benefit to the executive for personal use of the Company airplane; matching contributions under our Profit Sharing and Deferred Earnings Plan (executives participate on the same terms as other employees); benefits paid under our Medical Reimbursement Plan, under which we reimburse certain officers for personal medical expenses not covered by insurance; and certain country, social and civic club membership dues. In addition to these benefits, the named executive officers participate in group plans, including our group health insurance and life insurance plans, on the same terms as other employees. |
Other Annual Compensation from
Summary Compensation Table
The following table
contains a breakdown of the compensation and benefits for fiscal 2014 and 2013 included under All Other Compensation in
the Summary Compensation table above.
|
Matching
Contributions |
Personal Use of Company Car |
Medical
Reimbursement
(1) |
Miscellaneous
(2) |
Use of
Company
Aircraft
(3) |
Thompson S. Baker II |
|
|
|
|
|
2014 |
$7,800 |
$3,978 |
$12,679 |
$774 |
$22,617 |
2013 |
$7,650 |
$4,938 |
$5,076 |
$684 |
$8,949 |
|
|
|
|
|
|
John D.
Milton, Jr. |
|
|
|
|
|
2014 |
$7,444 |
$14,995 |
$14,671 |
$1,219 |
$4,997 |
2013 |
$7,500 |
$15,634 |
$1,386 |
$1,219 |
-- |
|
|
|
|
|
|
John D. Klopfenstein |
|
|
|
|
|
2014 |
$7,848 |
$10,825 |
$12,971 |
$414 |
-- |
2013 |
$7,511 |
$11,086 |
$1,969 |
$378 |
-- |
|
|
|
|
|
|
David H. deVilliers, Jr. |
|
|
|
|
|
2014 |
$7,828 |
$4,152 |
$6,768 |
$1,188 |
-- |
2013 |
$7,646 |
$2,936 |
$4,398 |
$1,188 |
-- |
|
|
|
|
|
|
Robert E. Sandlin |
|
|
|
|
|
2014 |
$7,829 |
$1,767 |
$12,096 |
$5,261 |
-- |
2013 |
$7,764 |
$1,458 |
$3,937 |
$4,415 |
-- |
(1) |
The amounts shown represent benefits paid under our Medical Reimbursement Plan, under which we reimburse certain officers for personal medical expenses not covered by insurance. |
|
|
(2) |
The amounts shown under the Miscellaneous column represent payment of country club and social club dues and purchase of tickets to sporting events on behalf of the named executive officers and other miscellaneous reimbursed expenses. These club memberships and tickets generally are maintained for business entertainment but may be used for personal use. The entire amount has been included, although we believe that only a portion of this cost represents a perquisite. |
|
|
(3) |
We have operations throughout many of the Southeastern and Mid-Atlantic States. Our senior executive officers are required to travel extensively to these operations and to other locations as part of their responsibilities. To facilitate this travel, we purchased a company airplane in fiscal 2008. We encourage Edward L. Baker, John D. Baker II, Thompson S. Baker II, and John D. Milton Jr. to use our airplane for non-business as well as business travel for safety and security reasons and to make the best use of their time. They reimburse us for non-business use for fuel used, crew travel expenses, airport fees, catering, passenger ground transportation plus an additional charge per day of the lesser of $1,000 or the amount of fuel used. The amount shown represents the difference between the allocated total costs excluding depreciation of use of our airplane for non-business use and the amount reimbursed by the Named Executive Officer. |
Fiscal 2014 and 2015 Grants of
Plan-Based Awards
The following table
sets forth information concerning option grants and estimated future payouts under cash incentive plans for the named executive
officers.
Grants of Plan-Based Awards
Name |
Grant
Date |
Estimated
Future Payouts Under Non-Equity Incentive Plan Awards |
All Other
Option Awards:
Number of
Securities
Underlying
Options (#) |
Exercise or
Base Price of
Option
Awards
($/Share) |
Grant Date
Fair Value of
Stock and
Option
Awards(4) |
Threshold
($)(1) |
Target
($)(2) |
Maximum
($)(3) |
Thompson S. Baker II
President and CEO |
12/03/14 |
N/A |
N/A |
$420,000 |
12,340 |
35.89 |
$200,000 |
12/05/13 |
N/A |
N/A |
$406,850 |
10,700 |
41.39 |
$200,000 |
John D. Milton, Jr.
Executive Vice President and CFO |
12/03/14 |
N/A |
N/A |
$165,000 |
9,375 |
35.89 |
$88,000 |
12/05/13 |
N/A |
N/A |
$165,000 |
7,500 |
41.39 |
$91,102 |
David H. deVilliers, Jr.,
Vice President and President FRP Development
Corp. |
12/03/14 |
N/A |
N/A |
$324,404 |
6,170 |
35.89 |
$100,000 |
12/05/13 |
N/A |
N/A |
$324,404 |
5,350 |
41.39 |
$100,000 |
Robert E. Sandlin,
Vice President and President, Florida Rock &
Tank Lines, Inc. |
12/03/14 |
N/A |
N/A |
$302,500 |
6,170 |
35.89 |
$100,000 |
12/05/13 |
N/A |
N/A |
$286,440 |
5,350 |
41.39 |
$100,000 |
John D. Klopfenstein, Controller and Chief Accounting Officer |
12/03/14 |
N/A |
N/A |
$96,096 |
3,330 |
35.89 |
$54,000 |
12/05/13 |
N/A |
N/A |
$92,000 |
2,890 |
41.39 |
$54,000 |
N/A - Not applicable
Outstanding Equity
Awards at Fiscal Year-End
The following table sets forth information
concerning stock options and restricted stock held by the named executive officers at September 30, 2014:
|
Option Awards |
Stock Awards |
Name |
Number
of
Securities Underlying Unexercised Options
(#)
Exercisable |
Number of Securities Underlying Unexercised
Options
(#)
Unexercisable |
Option
Exercise
Price
($)
|
Option
Expiration
Date |
Number of Shares or Units of Stock That Have
Not Vested
(#) |
Market Value of Shares or Units of Stock That
Have Not Vested
($) |
|
|
|
|
|
|
|
Thompson S. Baker II |
3,000
3,000
3,000
3,000
3,568
-- |
14,272
10,700 |
14.970
15.167
14.833
20.133
26.200
41.39 |
11/30/2014
01/25/2015
05/03/2015
08/02/2015
12/05/2022
12/04/2023 |
-- |
-- |
|
|
|
|
|
|
|
John D. Milton, Jr.
Executive Vice President and CFO
|
30,000
30,000
7,500
7,500
7,500
7,500
7,500
|
--
--
--
--
--
--
-- |
28.75
24.45
32.16
25.60
22.25
26.20
41.39 |
06/15/2018
06/16/2019
12/02/2019
12/01/2020
12/06/2021
12/05/2022
12/04/2023 |
-- |
-- |
|
David H. deVilliers, Jr., Vice President and President, FRP
Development Corp.
|
7,600
12,000
6,084
5,598
4,238
1,784
-- |
--
--
1,521
3,732
6,357
7,136
5,350 |
14.50
25.26
32.16
25.60
22.25
26.20
41.39 |
12/28/2014
08/19/2019
12/02/2019
12/01/2020
12/06/2021
12/05/2022
12/04/2023 |
-- |
--
|
|
Robert E. Sandlin, Vice President and President, Florida Rock & Tank Lines, Inc. |
12,000
6,084
5,598
4,238
1,784
--
|
--
1,521
3,732
6,357
7,136
5,350
|
25.26
32.16
25.60
22.25
26.20
41.39 |
08/19/2019
12/02/2019
12/01/2020
12/06/2021
12/05/2022
12/04/2023 |
-- |
-- |
|
John D. Klopfenstein, Controller and Chief Accounting Officer
|
2,400
1,800
1,200
600
--
|
600
1,200
1,800
2,400
2,890 |
32.16
25.60
22.25
26.20
41.39 |
12/02/2019
12/01/2020
12/06/2021
12/05/2022
12/04/2023 |
-- |
-- |
Fiscal 2014 Option Exercises
The following
table provides information regarding stock option exercises by the named executive officers and vesting of restricted stock during
fiscal 2014.
Option Exercises and Stock Vested
|
Option Awards |
Stock Awards |
Name |
Number of
Shares Acquired
on Exercise (#) |
Value Realized
on Exercise ($) |
Number of
Shares Acquired
on Vesting (#) |
Value Realized
on Vesting ($) |
(a) |
(b) |
(c) |
(d) |
(e) |
|
|
|
|
|
Thompson S. Baker II |
15,000 |
$387,519 |
-- |
-- |
John D. Milton, Jr. |
-- |
-- |
-- |
-- |
David H. deVilliers, Jr.,
Vice President and
President, FRP
Development Corp. |
15,300 |
346,927 |
-- |
-- |
Robert E. Sandlin, Vice
President and President,
Florida Rock & Tank
Lines, Inc. |
9,000 |
195,625 |
-- |
-- |
John D. Klopfenstein,
Controller and Chief
Accounting Officer |
1,500 |
39,024 |
-- |
-- |
Pension Benefits
The following table
describes pension benefits to the named executive officers as of September 30, 2014 under our Management Security Plan (“MSP
Plan”). Mr. deVilliers is the only named executive officer who participates in the MSP Plan.
Name |
Plan Name |
Number of Years
Credited Service (#) |
Present Value
of Accumulated
Benefit ($)(2) |
David H. deVilliers, Jr. |
MSP Plan |
(1) |
$1,247,396 |
(1)
Mr. deVilliers has met the requisite years of service requirement under the MSP Plan.
(2)
The present value has been calculated based on a life expectancy of 82 years and using a discount rate of six percent (6%).
Our Management
Security Plan (the “MSP Plan”) provides the following benefits to Mr. deVilliers upon his retirement or death:
Triggering Event |
Annual Benefit |
Normal Retirement at age 65 or older |
$247,200 during year 1 and $123,600 in subsequent years until his death. |
|
|
Death of Participant after his Retirement |
Continuation of annual benefit until the 15th anniversary of his retirement (or the earlier death of his designated beneficiary). |
|
|
Death of Participant prior to his Retirement |
$247,200 during year 1 and $123,600 in subsequent years until the later of (i) the 15th anniversary of his death or (ii) the date that he would have turned 65 (or in either case, the earlier death of his designated beneficiary). |
Nonqualified Deferred Compensation
None of the
named executive officers receives any nonqualified deferred compensation.
NON-EMPLOYEE DIRECTOR COMPENSATION
Compensation Arrangements for Fiscal 2014
and 2015
The following table
describes the compensation arrangements with our non-employee directors for the 2014 and 2015 fiscal years.
All Non-Employee Directors: |
|
Annual Retainer
Fee Per Meeting Attended
Shares to be Granted in
Fiscal 2015
Shares Granted in Fiscal
2014 |
$15,000
$ 1,500
2,500
2,000 |
Audit Committee:
Annual Fee Chairman
Member
Meeting Fees Chairman(1)
Member(1) |
$10,000
$ 5,000
$ 1,500
$ 1,000 |
Compensation Committee:
Annual Fee Chairman
Member
Meeting Fees Chairman
Member
|
$ 5,000
$ 1,000
$ 1,500
$ 1,000 |
Other Committees:
Annual Fee Chairman
Member
Meeting Fees Chairman
Member |
$ 2,000
$ 1,000
$ 1,500
$ 1,000 |
(1) |
The Audit Committee members receive no meeting fees for the four regularly scheduled quarterly meetings; the meeting fees shown apply only to the extent there are Audit Committee meetings other than and in addition to the four regularly scheduled quarterly meetings. |
Actual Fiscal
2014 Director Compensation
The following table shows
the compensation paid to each of our non-employee directors during the 2014 fiscal year.
Director Compensation for Fiscal 2014
Name |
Fees Earned or
Paid in Cash ($) |
Stock Awards
($)(1)(2) |
Option
Awards ($)(3) |
All Other
Compensation
($) |
Total ($) |
|
|
|
|
|
|
John E. Anderson |
$22,500 |
$89,475 |
-0- |
-0- |
$111,975 |
Charles E. Commander III |
$30,500 |
$89,475 |
-0- |
-0- |
$119,975 |
Luke E. Fichthorn III |
$21,000 |
$89,475 |
-0- |
-0- |
$110,475 (4) |
Robert H. Paul III |
$34,500 |
$89,475 |
-0- |
-0- |
$123,975 |
H. W. Shad III |
$32,500 |
$89,475 |
-0- |
-0- |
$121,975 |
Martin E. Stein, Jr. |
$29,500 |
$89,475 |
-0- |
-0- |
$118,975 |
James H. Winston |
$24,500 |
$89,475 |
-0- |
-0- |
$113,975 |
(1)
Each non-employee director was awarded 2,500 shares of the Company’s common stock on February 5, 2014. The value was
determined using the closing price of the Company’s common stock on the Nasdaq Stock Market on February 5, 2014, which was
$35.79.
(2)
For stock awards, the aggregate grant date fair value was computed in accordance with FASB Topic 718(Column (c)).
(3)
For awards of options, with or without tandem SAR’s (including awards that have subsequently been transferred), the
aggregate grant date fair value was computed in accordance with FASB ASC Topic 718 (Column (d)).
(4)
Mr. Fichthorn also receives consulting fees of $30,000 per year for financial consulting services provided to the Company.
The following table sets
forth information regarding stock options held by our non-employee directors as of September 30, 2014:
Director |
Number of
Securities
Underlying
Unexercised Options |
Option Exercise
Price ($) |
Option Expiration
Date |
|
|
|
|
Charles E. Commander III |
3,000
3,000 |
14.833
20.133 |
05/03/2015
08/02/2015 |
Luke E. Fichthorn III |
3,000
3,000
3,000
3,000 |
14.970
15.167
14.833
20.133 |
11/30/2014
01/25/2015
05/03/2015
08/02/2015 |
Robert H. Paul III |
3,000
3,000
3,000 |
14.970
15.167
20.133 |
11/30/2014
01/25/2015
08/02/2015 |
H.W. Shad III |
-- |
-- |
-- |
Martin E. Stein, Jr. |
3,000
3,000
3,000
3,000 |
14.970
15.167
14.833
20.133 |
11/30/2014
01/25/2015
05/03/2015
08/02/2015 |
James H. Winston |
-- |
-- |
-- |
Compensation Committee Interlocks and Insider Participation
None of the members of
the Compensation Committee (i) was an officer or employee of the Company or any of its subsidiaries during the 2014 fiscal year,
or (ii) had any relationship requiring disclosure by the Company under the rules of the Securities and Exchange Commission requiring
disclosure of certain relationships and related party transactions. None of our executive officers serves as a member of the board
of directors or compensation committee of any entity that has one or more executive officers serving on our Board of Directors
or Compensation Committee.
RELATED PARTY TRANSACTIONS
Consulting Arrangement
Mr. Fichthorn provided
the Company with financial consulting and other services during the 2014 fiscal year for which he received $30,000.
FRP provides information
technology services and previously subleased office space to Bluegrass Materials Company, LLC. Mr. John Baker serves as Chairman
of Bluegrass Materials, and his son, Edward L. Baker II, serves as its Chief Executive Officer. Messrs. John Baker and Edward
L. Baker II have a beneficial ownership interest in Bluegrass Materials. During fiscal 2014, Bluegrass Materials paid $359,000
to FRP for such information technology services and office space.
In the opinion of the Company,
the terms, conditions, transactions and payments under the agreements with the persons described above were not less favorable
to the Company than those which would have been available from unaffiliated persons.
Policies and Procedures
The Audit Committee of
the Board of Directors is responsible for reviewing and approving all material transactions with any related party not previously
approved by the Company’s Independent Directors. This responsibility is set forth in writing in our Audit Committee Charter,
a copy of which charter is available at www.frpholdings.com under Corporate Governance. In certain cases, transactions have
been approved by a committee consisting of all independent directors. Related parties include any of our directors or executive
officers, and certain of our shareholders and their immediate family members.
To identify related party
transactions, each year, we submit and require our directors and officers to complete Director and Officer Questionnaires identifying
any transactions with us in which the officer or director or their family members have an interest. We review related party transactions
due to the potential for a conflict of interest. A conflict of interest occurs when an individual’s private interest interferes,
or appears to interfere, in any way with our interests. Our Code of Business Conduct and Ethics requires all directors, officers
and employees who may have a potential or apparent conflict of interest to immediately notify our Chief Financial Officer.
We expect our directors,
officers and employees to act and make decisions that are in our best interests and encourage them to avoid situations which present
a conflict between our interests and their own personal interests. Our directors, officers and employees are prohibited from taking
any action that may make it difficult for them to perform their duties, responsibilities and services to FRP in an objective and
effective manner. In addition, we are strictly prohibited from extending personal loans to, or guaranteeing personal obligations
of, any director or officer. Exceptions are only permitted in the reasonable discretion of the Board of Directors.
A copy of our Code of Business
Conduct and Ethics is available at www.frpholdings.com under Corporate Governance. Our Code of Business Conduct and Ethics
was adopted on December 3, 2014 in during the corporate reorganization and is identical to the Code of Business Conduct and Ethics
of our predecessor, Patriot Transportation Holding, Inc.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS
The following table and
notes set forth the beneficial ownership of common stock of the Company by each person known by the Company to own beneficially
more than 5% of the common stock of the Company. Percentage calculations are based on the outstanding shares of the Company’s
common stock on November 30, 2014.
Title of Class |
Name and Address
of Beneficial Owner |
Amount and Nature of
Beneficial Ownership |
Percentage of Class |
Common |
Edward L. Baker
John D. Baker II
Thompson S. Baker II
Edward L. Baker II
200 W. Forsyth Street, 7th Floor
Jacksonville, FL 32202 |
648,770(1)
1,382,139(1)
547,187(1)
1,210,773(1)
|
6.7%
14.2%
5.6%
12.5% |
Common |
Sarah B. Porter and Cynthia P. Ogden, as trustees for the separate
trust for Sarah B. Porter created under the Cynthia L’Engle Baker Trust u/a/d April 30, 1965
1165 5th Avenue #10-D
New York, NY 10029 |
913,911 |
9.4% |
Common |
Royce & Associates, LLC
1414 Avenue of the Americas
New York, NY 10019 |
1,268,620(2) |
13.1% |
Common |
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202 |
886,108(3) |
9.1% |
(1) |
The beneficial ownership for Messrs. John D. Baker II and Edward L. Baker II is based on their holdings of FRP Common Stock and includes 1,113,474 shares held in a trust for the benefit of John D. Baker II and his family members for which John D. Baker II and Edward L. Baker II serve as trustees. John D. Baker II and Edward L. Baker II disclaim beneficial ownership of such shares except to the extent of their pecuniary interest therein. See Common Stock Ownership by Directors and Executive Officers and the accompanying notes for further details on shares beneficially owned by Edward L. Baker and Thompson S. Baker II. |
|
|
(2) |
In a Schedule 13G filed with the Securities and Exchange Commission on January 13, 2014, Royce & Associates, LLC reported that, as of December 31, 2013, it had sole voting and dispositive power with respect to 1,268,620 shares. |
|
|
(3) |
In a Schedule 13G filed with the Securities and Exchange Commission on February 10, 2014, T. Rowe Price Associates, Inc. reported that, as of December 31, 2013, it has sole voting power with respect to 43,900 shares and sole dispositive power with respect to 886,108 shares, which number includes 840,108 shares to which T. Rowe Price Small Cap Value Fund, Inc. has sole voting power. |
COMMON STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE
OFFICERS
The following table and
notes set forth the beneficial ownership of common stock of the Company by each director and each non-director named in the Summary
Compensation Table and by all officers, directors and director nominees of the Company as a group as of November 30, 2014.
Title
of Class |
Name of
Beneficial Owner |
Amount and
Nature of
Beneficial
Ownership (1) |
|
Percentage of Class |
|
|
|
|
|
Common |
John E. Anderson |
67,600 |
|
* |
Common |
Edward L. Baker |
648,770 |
(2) |
6.7% |
Common |
John D. Baker II |
1,382,139 |
(3)(6) |
14.2% |
Common |
Thompson S. Baker II |
547,187 |
(4) |
5.6% |
Common |
Charles E. Commander III |
25,000 |
|
* |
Common |
David H. deVilliers Jr. |
65,230 |
|
* |
Common |
Luke E. Fichthorn III |
87,244 |
(5) |
* |
Common |
John D. Klopfenstein |
17,107 |
|
* |
Common |
John D. Milton, Jr. |
121,173 |
|
1.2% |
Common |
Robert H. Paul III |
64,300 |
|
* |
Common |
Robert E. Sandlin |
42,286 |
|
* |
Common |
H. W. Shad III |
15,500 |
|
* |
Common |
Martin E. Stein, Jr. |
182,400 |
(6) |
1.9% |
Common |
William H. Walton III |
0 |
|
* |
Common |
James H. Winston |
24,811 |
|
* |
Common |
All Directors and Officers
As a group (15 people) |
2,867,473 |
(7) |
28.8% |
* Less than 1%
(1) |
The preceding table includes the following shares held under the Company’s Profit Sharing and Deferred Earnings Plan and shares underlying options that are exercisable within 60 days of November 30, 2014. |
|
Shares Under
Profit Sharing Plan |
Shares Under Option |
|
|
|
John E. Anderson |
-0- |
-0- |
Edward L. Baker |
-0- |
9,000 |
John D. Baker II |
-0- |
9,000 |
Thompson S. Baker II |
-0- |
12,568 |
Charles E. Commander III |
-0- |
6,000 |
David H. deVilliers Jr. |
-0- |
34,297 |
Luke E. Fichthorn III |
-0- |
9,000 |
John D. Klopfenstein |
10,806 |
6,000 |
John D. Milton, Jr. |
-0- |
97,500 |
Robert H. Paul III |
-0- |
9,000 |
Robert E. Sandlin |
12,231 |
29,704 |
H.W. Shad III |
-0- |
-0- |
Martin E. Stein, Jr. |
-0- |
12,000 |
William H. Walton III |
-0- |
-0- |
James H. Winston |
-0- |
-0- |
(2) |
Includes 87,297 shares held in trust for the benefit of the daughter of John D. Baker II as to which Edward L. Baker has sole voting power and sole investment power but as to which he disclaims beneficial ownership. |
|
|
(3) |
Includes 5,889 shares directly owned by the living trust of Mr. Baker’s wife and 20,001 shares held in a trust administered by an independent trustee for the benefit of Mr. Baker’s spouse and children, as to which he disclaims beneficial ownership. The amount shown for Mr. Baker does not include an aggregate of 87,297 shares held by certain trusts that are administered by Edward L. Baker, as trustee, for the benefit of Mr. Baker’s daughter and in which neither John D. Baker II nor Edward L. Baker has a pecuniary interest. The amount shown for Mr. Baker also does not include shares owned by his adult son, Edward L. Baker II, that were previously held in trust and previously included in Mr. Baker’s reported ownership. |
(4) |
Mr. Thompson S. Baker II’s reported ownership also includes 423,274 shares held in a trust for the benefit of Edward L. Baker and his family members for which he and Edward L. Baker serve as trustees. Mr. Baker disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. Mr. Baker’s reported ownership also includes 2,199 shares directly owned by Mr. Baker’s spouse, 6,597 shares held for the benefit of Mr. Baker’s minor children, and 39 shares held in his Company’s 401(k) profit sharing plan and his employee stock purchase plan. |
|
|
(5) |
Includes 300 shares owned by the spouse of Mr. Fichthorn as to which he disclaims any beneficial interest and 9,000 shares owned by the M/B Disbro Trust, of which Mr. Fichthorn is a co-trustee and beneficiary. |
|
|
(6) |
Includes 120,900 shares owned by Regency Square II, a Florida general partnership. Mr. Stein owns a 2.5248% partnership interest and is a co-trustee and a beneficiary of a testamentary trust that holds a 46.21% interest in the partnership. John D. Baker II also is a co-trustee of this testamentary trust and so may be deemed to have shared voting and dispositive power as to the shares owned by the partnership. John D. Baker II disclaims any beneficial interest in such shares. |
|
|
(7) |
The beneficial ownership for Messrs. Edward L. Baker and Thompson S. Baker II each include 423,274 shares held by a trust for the benefit of Mr. Edward L. Baker for which they serve as co-trustees. The shares have only been counted once for the purpose of calculating the beneficial ownership total for all officers and directors as a group. |
AUDIT COMMITTEE REPORT
The Audit Committee reviews
the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process, including the system of internal controls. The Audit Committee also selects
the Company’s independent registered public accounting firm. During fiscal 2014, the Audit Committee held four formal meetings.
A copy of the Audit Committee Charter is attached as Appendix I.
In this context, the Audit
Committee has met and held discussions with management and the independent registered public accounting firm regarding the fair
and complete presentation of the Company’s results and the assessment of the Company’s internal control over financial
reporting. The Committee has discussed significant accounting policies applied by the Company in its financial statements, as well
as alternative treatments. Management represented to the Committee that the Company’s consolidated financial statements were
prepared in accordance with accounting principles generally accepted in the United States of America, and the Committee has reviewed
and discussed the consolidated financial statements with management and the independent registered public accounting firm. The
Committee discussed with the independent registered public accounting firm matters required to be discussed by PCAOB Auditing Standard
No. 16 (Communications with Audit Committees).
In addition, the Audit
Committee has received the written disclosures and the letter from the independent auditor required by the applicable requirements
of PCAOB regarding the independent auditor’s communications with us concerning independence and has discussed with the independent
auditor the auditor’s independence from the Company and its management. The Committee also has considered whether the independent
auditor’s provision of non-audit services to the Company is compatible with the auditor’s independence. The Committee
has concluded that the independent auditor is independent from the Company and its management.
The Audit Committee reviewed
and discussed Company policies with respect to risk assessment and risk management.
The Audit Committee discussed
with the Company’s independent auditor the overall scope and plans for the audit. The Audit Committee meets with the independent
auditors, with and without management present, to discuss the results of their examinations, the evaluations of the Company’s
internal controls, and the overall quality of the Company’s financial reporting.
In reliance on the reviews
and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that
the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended September 30,
2014, for filing with the Securities and Exchange Commission.
Submitted by: |
H.W. Shad III, Chairman |
|
Charles E. Commander III |
|
Robert H. Paul III |
|
Members of the Audit Committee |
The Audit Committee
Report does not constitute soliciting material, and shall not be deemed to be filed or incorporated by reference into any other
Company filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the
extent that the Company specifically incorporates the Audit Committee Report by reference therein.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
The Audit Committee has
selected Hancock Askew & Co., LLP (“HA”) to serve as the Company’s independent registered public accounting
firm, subject to satisfactory negotiation of an annual fee agreement. Representatives of HA are expected to be present at the shareholders’
meeting with the opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
Audit and Non-Audit Fees
The following table presents
fees billed or to be billed by the Company’s independent registered public accounting firm for the audit of the Company’s
financial statements for fiscal years 2013 and 2014 and for other services performed during such periods.
| |
2013 | |
2014 |
| |
| |
|
Audit Fees (1) | |
$ | 224,161 | | |
$ | 225,363 | |
Audit Related Fees (2) | |
| 22,775 | | |
| 190,919 | |
Tax Fees | |
| -0- | | |
| -0- | |
All Other Fees | |
| -0- | | |
| -0- | |
| |
| | | |
| | |
Total | |
$ | 246,936 | | |
$ | 416,282 | |
(1) |
Audit
services include work performed in connection with the review of the Company’s quarterly financial statements, the audit
of the Company’s annual financial statements and the audit of internal control over financial reporting. |
|
|
(2) |
Audit related
fees consisted principally of audits of the New Patriot Transportation Holding, Inc. relating to the separation of the transportation
group, employee benefit plans and services pertaining to technical accounting consultations. |
Pre-Approval of Audit and Non-Audit Services
Under the Company’s
amended Audit Committee Charter, the Audit Committee is required to pre-approve all auditing services and permissible non-audit
services, including related fees and terms, to be performed for the Company by its independent auditor, subject to the de minimis
exceptions for non-audit services described under the Exchange Act which are approved by the Audit Committee prior to the completion
of the audit. The Audit Committee pre-approved all audit services, audit-related services and tax review, compliance and planning
services performed for the Company by Hancock Askew & Co., LLP during fiscal 2014.
ADDITIONAL INFORMATION
Shareholder Proposals
Proposals of shareholders
intended to be included in the Company’s proxy statement and form of proxy relating to the annual meeting of shareholders
to be held in early 2016 must be delivered in writing to the principal executive offices of the Company no later than August 25,
2015. The inclusion of any proposal will be subject to the applicable rules of the Securities and Exchange Commission.
Except for shareholder
proposals to be included in the Company’s proxy materials, the deadline for nominations for directors submitted by a shareholder
is forty days before the next annual meeting, and for other shareholder proposals is November 10, 2015. Proposals must be sent
to the Secretary of the Company at our principal executive offices. Any notice from a shareholder nominating a person as director
must include certain additional information as specified in our Articles of Incorporation.
The Company may solicit
proxies in connection with next year’s annual meeting which confer discretionary authority to vote on any shareholder proposals
of which the Company does not receive notice by November 10, 2014.
Section 16(a) Beneficial Ownership Reporting
Compliance
Section 16(a) of the Securities
Exchange Act of 1934 requires the Company's executive officers, directors and beneficial owners of 10% or more of the Company's
outstanding common stock to file initial reports of ownership and reports of changes in ownership with the Securities and Exchange
Commission, NASDAQ and the Company. Based solely on a review of the copies of such forms furnished to the Company and written representations
from the Company's executive officers and directors, the Company believes all persons subject to these reporting requirements filed
the required reports on a timely basis, other than:
Annual Report on Form 10-K
Shareholders may receive
without charge a copy of FRP Holdings, Inc.’s annual report to the Securities and Exchange Commission on Form 10-K including
the financial statements and the financial statement schedules by writing to the Secretary of the Company at 200 W. Forsyth Street,
7th Floor, Jacksonville, Florida 32202. This report also is available through our website, www.frpholdings.com.
|
BY ORDER OF THE BOARD OF DIRECTORS |
|
|
|
|
December ___, 2014 |
John D. Milton, Jr. |
|
Secretary |
PLEASE RETURN THE ENCLOSED FORM
OF PROXY, DATED AND SIGNED, IN THE ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE.
Appendix I
![](image_002.jpg) |
Adopted December 3, 2014 |
FRP
HOLDINGS, INC.
AUDIT
COMMITTEE CHARTER
Purpose
The
Audit Committee, a committee of the Board of Directors (the "Board") of FRP Holdings, Inc. (the "Company"),
is appointed by the Board to oversee the accounting and financial reporting processes of the Company and the audits of the
Company's financial statements. To fulfill their obligations, the Committee relies on: (i) management for the preparation
and accuracy of the Company's financial statements; (ii) both management and the Company's internal auditor for establishing
effective internal controls and procedures to ensure the Company's compliance with accounting standards, financial reporting procedures
and applicable laws and regulations; and (iii) the Company's independent auditors for an unbiased, diligent audit or review,
as applicable, of the Company's financial statements and the effectiveness of the Company's internal controls. The members of
the Audit Committee are not employees of the Company and are not responsible for planning or conducting audits or determining
that the Company's financial statements and disclosures are complete and accurate and are in accordance with generally accepted
accounting principles and applicable rules and regulations. These are the responsibilities of management and the independent auditor.
Committee
Membership
The
Audit Committee shall consist of no fewer than three members. Each member of the Audit Committee shall meet
the independence and experience requirements of The NASDAQ Stock Market, Inc. Marketplace Rules and the Securities
Exchange Act of 1934 (the "Exchange Act"). No member of the Audit Committee shall have participated in the preparation
of the financial statements of the Company in the past three years.
All
members of the Audit Committee shall be able to read and understand fundamental financial statements, including the Company's
balance sheet, income statement and cash flow statement. At least one member of the Audit Committee must have past employment
experience in finance or accounting, requisite professional certification in accounting or other comparable experience or background
that leads to financial sophistication. At least one member of the Audit Committee shall be an "audit committee financial
expert" as defined by the rules of the Securities and Exchange Commission (the "Commission"). A person who satisfies
the definition of audit committee financial expert will also be presumed to have financial sophistication.
Notwithstanding
the foregoing, one director who does not meet the NASDAQ definition of independence, but who meets the criteria set forth in Section
10A(m)(3) under the Exchange Act and the rules thereunder, and who is not a current officer or employee or a family member of
such person, may serve for no more than two years on the Audit Committee if the Board, under exceptional and limited circumstances,
determines that such individual's membership is required by the best interests of the Company and its shareholders. Such person
must satisfy the independence requirements set forth in Section 10A(m)(3) of the Exchange Act, and may not chair the Audit Committee.
The use of this "exceptional and limited circumstances" exception, as well as the nature of the individual's relationship
to the Company and the basis for the board's determination, shall be disclosed in the Company's annual proxy statement.
In
addition, if an Audit Committee member ceases to be independent for reasons outside the member's reasonable control, his or her
membership on the Audit Committee may continue until the earlier of the Company's next annual meeting of shareholders or one year
from the occurrence of the event that caused the failure to qualify as independent. If the Company is not already relying on this
provision, and falls out of compliance with the requirements regarding Audit Committee composition due to a single vacancy on
the Audit Committee, then the Company will have until the earlier of the next annual meeting of shareholders or one year from
the occurrence of the event that caused the failure to comply with this requirement. The Company shall provide notice to NASDAQ
immediately upon learning of the event or circumstance that caused the non-compliance, if it expects to rely on either of these
provisions for a cure period.
The
members of the Audit Committee shall be appointed by the Board on the recommendation of the Nominating and Corporate Governance
Committee of the Board in existence from time to time. The members of the Audit Committee shall be appointed for one year and
shall serve until the appointment of their successors. Audit Committee members may be replaced by the Board at any time.
Meetings
The
Audit Committee shall meet at least quarterly.
The
Audit Committee shall meet periodically with management, any internal auditors, and the independent auditor,
and have such other direct and independent interaction with such persons from time to time as the members of the Audit Committee
deem appropriate. The Audit Committee may request any officer or employee of the Company or the Company's outside counsel or independent
auditor to attend a meeting of the Committee or to meet with any members of the Committee or its advisors.
The
Audit Committee will meet at the call
of its Chairman or the Chairman of the Board of Directors.
A
majority of the Audit Committee members
will be a quorum for the transaction of business.
The
action of a majority of those present
at a meeting at which a quorum is present will be the act of the Audit Committee.
Any
action required to be taken at a meeting of the Audit Committee will be deemed the action of the Audit Committee
without a meeting if all of the Audit Committee members executed, either before or after the action
is taken, a written consent and the consent is filed with the Corporate Secretary.
Minutes
shall be taken at each meeting of the Audit Committee and included in the Company's corporate records.
Committee
Authority and Responsibilities
The
Audit Committee shall have the sole authority to (i) select and retain the independent registered public accounting firm
to act as the Company's independent auditors for the purpose of auditing the Company's financial statements and internal control
over financial reporting, (ii) set the compensation of the Company's independent auditors, (iii) oversee the work done
by the Company's independent auditors, and (iv) terminate the Company's independent auditors, if necessary. The Audit Committee
also shall have sole authority to select, retain, compensate, oversee and terminate, if necessary, any other registered public
accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services
for the Company.
The
Audit Committee shall pre-approve all auditing services,
internal control-related services and permitted non-audit services (including the fees and terms thereof) to be performed
for the Company by its independent auditor, subject to the de minimis
exception for non-audit services that are approved by the Audit Committee prior
to the completion of the audit. The Audit Committee may form and delegate authority to subcommittees consisting of one or
more members when appropriate, including the authority to grant pre-approvals of audit and
permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals
shall be presented to the full Audit Committee at its next scheduled meeting. The Audit Committee also may establish
policies and procedures for the Committee's pre-approval or permitted services by the Company's independent auditors or other
registered public accounting firms on an ongoing basis.
The
Audit Committee shall have the authority, to the extent it deems necessary or appropriate, to engage
and determine funding for independent legal, accounting or other advisors. The Company shall provide for appropriate funding,
as determined by the Audit Committee, for payment of compensation to the independent auditor for the purpose of rendering or issuing
an audit report or performing other audit, review or attest services for the Company and to
any advisors employed by the Audit Committee, as well as funding for the payment of ordinary
administrative expenses of the Audit Committee that are necessary or appropriate in carrying
out its duties.
The
Audit Committee shall conduct an annual self-evaluation to assess the effectiveness of the Audit Committee and its compliance
with the requirements of this Charter and applicable listing standards and legal requirements. The Audit Committee shall report
its conclusions to the Board.
The
Audit Committee shall make regular reports to the Board. The Audit
Committee shall review and reassess the adequacy of this Charter annually and recommend
any proposed changes to the Board for approval.
The
Audit Committee, to the extent it deems necessary or appropriate, shall:
Financial
Statement and Disclosure Matters
1.
Review and discuss with management and the independent auditor the
annual audited financial statements, including disclosures made in management's discussion and analysis, and recommend to the
Board whether the audited financial statements should be included in the Company's Form 10-K.
2.
Review and discuss with management and the independent auditor the
Company's quarterly financial statements prior to the filing of its Form 10-Q, including the results of the independent auditor's
review of the quarterly financial statements.
3.
Discuss with management and the independent auditor significant
financial reporting issues and judgments made in connection with the preparation of the Company's financial statements, including
any significant changes in the Company's selection or application of accounting principles, any
major issues as to the adequacy of the Company's internal controls and any special steps adopted in light of material control
deficiencies.
4.
Review and discuss with management and the independent auditor any major issues as to the adequacy of the Company's
internal controls, any special steps adopted in light of material control deficiencies and the adequacy
of disclosures about changes in internal control over financial reporting.
5.
Review and discuss with management (including
the senior internal audit executive) and the independent auditor the Company's internal controls report and the independent auditor's
attestation of the report prior to the filing of the Company's Form 10-K.
6.
Review and discuss reports from
the independent auditors on:
| a. | all
critical accounting policies and practices to be used; |
| b. | all
alternative treatments of financial information within generally accepted accounting
principles that have been discussed with management, ramifications of the use of such
alternative disclosures and treatments, and the treatment preferred by the independent
auditor; |
| c. | other
material written communications between the independent auditor and management, such
as any management letter or schedule of unadjusted differences; and |
| d. | for
any other matters required to be discussed by PCAOB Auditing Standard No. 16, Communications
with Audit Committees. |
7.
Discuss with management and approve the Company's earnings press
releases, including the use of "pro forma" or "adjusted" non-GAAP information, as well as any financial information
and earnings guidance provided to analysts and rating agencies. Such discussion may be done generally (consisting of discussing
the types of information to be disclosed and the types of presentations to be made).
8.
Discuss with management and the independent auditor the effect of
regulatory and accounting initiatives as well as off-balance sheet structures on the Company's financial statements.
9.
Discuss with management the Company's major financial risk exposures
and the steps management has taken to monitor and control such exposures, including the Company's risk assessment and risk management
policies.
10.
Discuss with the independent auditor and management (i) any
audit problems or difficulties, including any difficulties encountered in the course of the audit work (such as restrictions on
the scope of activities or access to information, (ii) any significant disagreements with management, and (iii) management's
response to these problems, difficulties or disagreements.
11.
Resolve any disagreements between the independent auditor and management.
12.
Review disclosures made to the Audit Committee by the Company's
CEO, CFO and CAO during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the
design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees
who have a significant role in the Company's internal controls.
13.
Prepare the report required by the rules of the Commission (the "Commission")
to be included in the Company's annual proxy statement.
14.
Ensure that a public announcement of the Company's receipt of an
audit opinion that contains a going concern qualification is made promptly.
Oversight
of the Company's Relationship with the Independent Auditor
15.
Review and evaluate the lead partner of the independent auditor
team.
16.
Obtain and review a report from the independent auditor at least
annually regarding (a) the independent auditor's internal quality-control procedures, (b) any material issues raised by the most
recent internal quality-control review, or peer review or Public Company Accounting Oversight Board review, of the firm, or by
any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more
independent audits carried out by the firm and (c) any steps taken to deal with any such issues. Evaluate the qualifications,
performance and independence of the independent auditor, including considering whether the auditor's quality controls are adequate
and the provision of permitted non-audit services is compatible with maintaining the auditor's independence, and taking into account
the opinions of management and internal auditors. The Audit Committee shall present its conclusions with respect to the independent
auditor to the Board.
17.
Obtain from the independent auditor a formal written statement delineating
all relationships between the independent auditor and the Company. It is the responsibility of the Audit Committee to actively
engage in a dialogue with the independent auditor with respect to any disclosed relationships or services that may impact the
objectivity and independence of the auditor.
18.
Ensure the rotation of the lead (or coordinating) audit partner
having primary responsibility for the audit and the audit partner responsible for reviewing the audit as required by law. Consider
whether, in order to assure continuing auditor independence, it is appropriate to adopt a policy of rotating the independent auditing
firm on a regular basis.
19.
Approve or establish policies for the Company's hiring of employees
or former employees of the independent auditor.
20.
Discuss with the independent auditor material issues on which the
national office of the independent auditor was consulted by the Company's audit team.
21.
Meet with the independent auditor prior to the audit to discuss
the planning and staffing of the audit.
Oversight
of the Company's Internal Audit Function
22.
Approve the hiring or dismissal of any senior internal auditing
staff.
23.
Review the significant reports to management prepared by any internal
audit staff and management's responses.
24.
Discuss with the independent auditor and management the internal
audit department responsibilities, budget and staffing and any recommended changes in the planned scope of the internal audit.
Compliance
Oversight Responsibilities
25.
Obtain from the independent auditor assurance that Section 10A(b)
of the Exchange Act has not been implicated.
26.
Obtain reports from management, the senior member of any internal
audit staff and the independent auditor that the Company and its subsidiaries are in conformity with applicable legal requirements
and the Company's Code of Business Conduct and Ethics. Advise the Board with respect to the Company's policies and procedures
regarding compliance with applicable laws and regulations and with the Company's Code of Business Conduct and Ethics.
27.
Approve all related party transactions that are required to be disclosed
under Item 404 of Regulation S-K and that have not previously been approved by the Company's independent directors.
28.
Establish procedures for the receipt, retention and treatment of
complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and the confidential,
anonymous submission by employees of concerns regarding questionable accounting or auditing matters.
29.
Discuss with management and the independent auditor any correspondence
with regulators or governmental agencies and any published reports which raise material issues regarding the Company's financial
statements or accounting policies.
30.
Discuss with counsel to the Company any legal matters that may have
a material impact on the financial statements or the Company's compliance policies.
Appendix II
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FRP HOLDINGS, INC.
These Amended and Restated Articles of Incorporation
of FRP Holdings, Inc. were duly adopted by its board of directors on December 3, 2014 and approved by its sole shareholder
on ___________, 2015.
ARTICLE I
NAME OF CORPORATION
The name of this
corporation is FRP Holdings, Inc.
ARTICLE II
PRINCIPAL
OFFICE
The principal office and
mailing address of this corporation is 200 West Forsyth Street, 7th Floor, Jacksonville, FL 32202.
ARTICLE III
BUSINESS PURPOSE
The corporation
is organized for the purpose of transacting any or all lawful business for which corporations may be incorporated under the Florida
Business Corporation Act, as amended.
ARTICLE IV
CAPITAL STOCK
1.
The maximum number of shares of capital stock which the corporation shall be authorized to have outstanding at any time
is twenty-five million (25,000,000) shares of voting common stock with a par value of $.10 per share and five million (5,000,000)
shares of preferred stock, to be issued in such classes and series as the board of directors may, in accordance with the provisions
of Florida Statutes and without further shareholder action, by resolution or resolutions, from time to time authorize to be issued.
2.
Each shareholder holding common stock shall have one vote for each share of common stock. Shareholders holding common stock
shall have no cumulative voting rights in any election of directors of this corporation.
3.
Preferred stock, if authorized by the board of directors, shall comply with Florida law as then in effect, notwithstanding
the following provisions.
(a)
The shares of preferred stock shall be of one or more classes and may be issued in one or more series at one time or from
time to time as the board of directors may determine.
(b)
Shares of preferred stock and any series thereof shall have such relative rights and preferences with regard to dividend
rates, redemption rights, conversion privileges, with such voting powers, full or limited, or without voting powers and with such
other distinguishing characteristics, including designations, preferences and relative, participating, optional or other special
rights, and qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions
providing for the issue thereof adopted by the board of directors (and as are not in contravention of this certificate of incorporation,
or any amendment thereto), including (but without limiting the generality of the foregoing) the following:
(i)
The distinctive designation and number of shares comprising such series, which number may (except where otherwise provided
by the board of directors in creating such series) be increased or decreased (but not below the number of shares then outstanding)
from time to time by action of the board of directors.
(ii)
The dividend rate or rates, if any, on the shares of such series and the relation which any such dividends shall bear to
the dividends payable on any other class or classes or of any other series of capital stock, the terms and conditions upon which
and the periods in respect of which any such dividends shall be payable, whether and upon what conditions any such dividends shall
be cumulative, and if cumulative, the date or dates from which dividends shall accumulate, whether the shares of such series shall
be limited in dividends, if any, or whether they shall or may participate in dividends over and above the dividend rate,
if any, provided for the shares of such series, and whether any such dividends shall be payable in cash, in shares of such series,
in shares of any other class or classes or of any other series of any class or classes of capital stock of the corporation,
or in other property, or in more than one of the foregoing.
(iii)
Whether the shares of such series shall be redeemable, the limitations and restrictions with respect to such redemption,
the time or times when, the price or prices at which and the manner in which such shares shall be redeemable, including the manner
of selecting shares of such series for redemption if less than all shares are to be redeemed.
(iv)
The rights to which the holders of shares of such series shall be entitled, and the preferences, if any, over any other
series (or of any other series over such series), upon the voluntary or involuntary liquidation, dissolution, distribution of
assets or winding up of the corporation, which rights may vary depending on whatever such liquidation, dissolution, distribution
or winding up is voluntary or involuntary; may vary at different dates; and may vary otherwise.
(v)
Whether the shares of such series shall be subject to the operation of a purchase, retirement or sinking fund, and, if
so, whether and upon what conditions such purchase, retirement or sinking fund shall be cumulative or noncumulative, the extent
to which and the manner in which such fund shall be applied to the purchase or redemption of the shares of such series for retirement
or to other corporate purposes and the terms and provisions relative to the operation thereof.
(vi)
Whether the shares of such series shall be convertible into or exchangeable for shares of any other class or classes or
of any other series of any class or classes of capital stock of the corporation, and, if so convertible or exchangeable, the price
or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms
and conditions of such conversion or exchange.
(vii)
Subject to the provisions of paragraph (b) of this Section 3 as to voting rights, the voting powers, full and/or limited,
if any, of the shares of such series; and whether and under what conditions the shares of such series (alone or together with
the shares of one or more other series having similar provisions) shall be entitled to vote separately as a single class.
(viii)
Whether the issuance of any additional shares of such series, or of any shares of any other series, shall be subject to
restrictions as to issuance or as to the powers, preferences or rights of any such other series.
(ix)
Any other preferences, privileges and powers, and relative, participating, optional or other special rights, and qualifications,
limitations or restrictions of such series, as the board of directors may deem advisable and as shall not be inconsistent with
the provisions of this certificate of incorporation.
(c)
No dividends shall be paid or declared or set apart for payment on any particular series of preferred stock in respect
of any period unless accumulated dividends shall be or shall have been paid, or declared and set apart for payment, pro rata on
all shares of preferred stock at the time outstanding of each other series which ranks equally as to dividends with such particular
series, so that the amount of dividends declared on such particular series shall bear the same ratio to the amount declared on
each such other series as the dividend rate of such particular series shall bear to the dividend rate of such other series.
(d)
Whenever any shares of preferred stock are redeemed or otherwise retired, other shares may be issued in lieu thereof by
the board of directors as part of the series of which they were originally a part or as they may be reclassified into and reissued
as a part of a new series, or as a part of any other series, all subject to the protective conditions or restrictions of
any outstanding series of preferred stock and for such considerations as may be fixed by the board of directors.
4.
No stock shall be issued until the consideration for such stock has been fully paid, and when so paid shall be issued as
fully paid and nonassessable. All or any part of the consideration for stock of the corporation may be paid in by, or used for
the purchase of, real, personal, or intangible property, labor or services, or any combination thereof, at a just valuation thereof
as determined by the board of directors or executive committee of the corporation at any regular meeting or at any special meeting
pursuant to due notice as provided in the bylaws of the corporation.
5.
No holder of common stock of the corporation shall have any preemptive or preferential right of subscription to any shares
of any class of stock of the corporation, whether now or hereafter authorized, nor to any securities convertible into stock or
securities of the corporation, nor to any options or warrants to acquire such stock or securities issued or sold, nor any right
of subscriptions to any thereof.
6.
The corporation shall not be required to issue certificates representing any fraction or fractions of a share of stock
of any class but may issue in lieu thereof one or more non-dividend bearing and non-voting scrip certificates in such form or
forms as shall be approved by the board of directors or executive committee, each representing a fractional interest in respect
of one share of stock. Such scrip certificates upon presentation together with similar scrip certificates representing in the
aggregate an interest in respect of one or more full shares of stock shall entitle the holders thereof to receive one or more
full shares of stock of the class and series, if any, specified in such scrip certificates. Such scrip certificates may contain
such terms and conditions as shall be fixed by the board of directors or the executive committee, and may become void and of no
effect after a period to be determined by the board of directors or executive committee and to be specified in such scrip certificates.
7.
The corporation, by resolution or resolutions of its board of directors or executive committee, shall have power to create
and issue, whether or not in connection with the issue and sale of any shares of stock or any other securities of the corporation,
warrants, conversion privileges, rights or options entitling the holders thereof to purchase from the corporation any shares of
its capital stock of any class or classes or any other securities of the corporation, or to convert any other securities of the
corporation into common stock of the corporation, such warrants, conversion privileges, rights or options to be evidenced by or
in such instrument or instruments as shall be approved by the board of directors or executive committee. The terms upon which,
the time or times, which may be limited or unlimited in duration, at or within which, and the price or prices (not less than the
minimum amount prescribed by law, if any) at which any such warrants, convertible securities, rights or options may be issued
and any such shares or other securities may be purchased from the corporation, upon the exercise of any warrant, conversion privilege,
right or option shall be such as shall be fixed and stated in the resolution or resolutions of the board of directors or executive
committee providing for the creation and issue of such warrants, convertible securities, rights or options. The board of
directors or executive committee is hereby authorized to create and issue any such warrants, convertible securities, rights or
options, from time to time, for such consideration, and to such persons, firms or corporations, as the board of directors or executive
committee may determine.
ARTICLE
V
CORPORATE
EXISTENCE
This
corporation shall have perpetual existence.
ARTICLE
VI
DIRECTORS
The
number of directors of this corporation is seven, but may be changed, but not to less than three, by the affirmative vote of a
majority of the whole board of directors at the time in office or by the affirmative vote of the holders of at least 75% of the
shares of stock of this corporation entitled to vote thereon. Each director shall serve a term of one year. Any vacancy occurring
in the board of directors may be filled by the affirmative vote of a majority of the remaining directors, though less than a quorum.
Any director elected to fill a vacancy, including a vacancy resulting from an increase in the number of directors, shall hold
office until the next annual meeting of shareholders. In no case, however, will a decrease in the number of directors shorten
the term of any incumbent director. A director shall hold office until the next annual meeting and until his successor shall be
elected and qualify. A director may only be removed for "cause", which shall be defined for these purposes as a conviction
of a felony, declaration of unsound mind by a court order, adjudication of bankruptcy, non-acceptance of office or such director
having been adjudged by a court of competent jurisdiction to be liable for negligence of misconduct in the performance of his
duty to this corporation in a matter of substantial importance to this corporation and such adjudication is no longer subject
to direct appeal. This Article may be amended or repealed only by the affirmative vote of the holders of at least 75% of the shares
of stock of this corporation entitled to vote thereon.
ARTICLE
VII
OFFICERS
The
officers of the corporation shall be a president, one or more vice presidents, a secretary, and a treasurer, and such other
officers, with such titles, as may be prescribed by the board
of directors, all of whom shall be elected by the board of directors or executive committee and shall serve at the pleasure of
the board of directors or executive committee and may be removed at any time with or without cause, by the board of directors
or executive committee.
ARTICLE
VIII
INDEMNIFICATION
1.
The corporation shall indemnify and hold harmless each person, his heirs, executors and administrators, who has served
at any time as a director or officer of the corporation or, at its request, of any other corporation, partnership, joint venture,
trust, or other enterprise, from and against any and all claims and liabilities to which such person became subject by reason
of his being or having been a director or officer of the corporation, or of any other such corporation, partnership, joint venture,
trust or other enterprise, or by reason of any action alleged to have been taken or omitted by such person as such director or
officer, such indemnification to be to the fullest extent permitted by applicable law.
2.
The corporation shall have the power to purchase and maintain insurance on behalf of any person who is or was a director
or officer of the corporation, or is or was serving at the request of the corporation as a director or officer of another corporation,
partnership, joint venture, trust, or other enterprise, against any liability asserted against him and incurred by him in any
such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify him against
such liability.
3.
The corporation, its directors, officers, employees and agent shall be fully protected in taking any action or making any
payment under this Article VIII or refusing to do so, in reliance upon the advice of counsel.
4.
If any part of this Article VIII shall be found in any proceeding to be invalid or ineffective, the remaining provisions
shall not be affected.
ARTICLE
IX
SELF DEALING
No
contract, act or other transaction between the corporation and any other person, firm or corporation in the absence of fraud,
shall be invalidated, vitiated or in any way affected by the fact that any one or more of the directors of the corporation is
or are (i) a party or parties to or interested in such contract, act or transaction or (ii) interested in or a director or officer
or directors or officers of such other corporation. Any director or directors individually or jointly may in the absence of fraud,
be a party or parties to or may be interested in any contract, act or transaction of this corporation or in which this corporation
is interested. Each and every person who may become a director of this corporation is hereby relieved in the absence of fraud,
from any obligation to account for profits and from all other liability which might otherwise arise by reason of contracting with
the corporation for the benefit of himself or any other person or any firm, association or corporation in which he may be in any
way interested or in which he may be an officer or director. The foregoing provisions shall be applicable notwithstanding that
the director or directors referred to shall have voted for or shall have been necessary to authorize the contract, act or transaction
in question, or that he or they shall have been present or necessary to constitute a quorum at the meeting which authorized such
contract, act or transaction.
ARTICLE
X
CONTROL SHARE LAW NOT APPLICABLE
The
provisions of Section 607.0902, Florida Statutes, shall not apply to control-share acquisitions of shares of this corporation.
This
Article X may be amended or repealed only by the affirmative vote of the holders of at least a majority of the shares of stock
of the corporation entitled to vote thereon; provided, however, if this Article X shall be adopted by at least two-thirds of the
shares of stock of the corporation entitled to vote thereon, this Article X may be amended or repealed only by the affirmative
vote of the holders of at least a two-thirds majority of the shares of stock of the corporation entitled to vote thereon.
ARTICLE
XI
CERTAIN MATTERS RELATING TO SHAREHOLDER ACTIONS
1.
Special Meeting of Shareholders. Pursuant to Section 607.0702, Florida Statutes, special meetings of the shareholders
may be called by the board of directors or by the President. In addition, the Secretary shall call a meeting if the holders of
50% (but not a lesser number) of all the votes entitled to be cast on any issue proposed to be considered at the meeting
sign, date, and deliver to the corporation’s Secretary one or more written demands for the meeting describing the purpose
or purposes for which it is to be held.
2.
Acting by Shareholders Without A Meeting Prohibited. Pursuant to, and as permitted by, Section 607.0704, Florida
Statutes, the shareholders of this corporation are prohibited from taking action without a meeting, without prior notice and without
a vote.
3.
Nominations of Directors. Only persons who are nominated in accordance with the following procedures shall be eligible
for election by the shareholders as directors. Nominations of persons for election as directors of the corporation may be made
at a meeting of shareholders at which directors are being elected (i) by or at the direction of the board of directors and/or
by or at the direction of any committee or person authorized or appointed by the board of directors or (ii) by any shareholder
of the corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth
in this Section 3. Any nomination other than those governed by clause (i) of the preceding sentence shall be made pursuant
to timely notice in writing to the Secretary of the corporation. To be timely, a shareholder’s notice shall be delivered
to or mailed and received at the principal executive offices of the corporation not less than 40 days prior to the meeting; provided,
however, that in the event that less than 50 days’ notice or prior public disclosure of the date of the meeting is given
or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the
10th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was
made. Such shareholder's notice to the Secretary shall set forth (x) as to each person whom the shareholder proposes to nominate
tor election as a director (i) the name, age, business address and residence address of such person, (ii) the principal occupation
or employment of such person, (iii) the class and number of any shares of the corporation or any subsidiary of the corporation
which are beneficially owned by such person, and (iv) any other information relating to such person that is required to be disclosed
in solicitations for proxies for election of directors pursuant to any then existing rule or regulation promulgated under the
Securities Exchange Act of 1934, as amended; and (y) as to the shareholder giving the notice (i) the name and record address
of such shareholder and (ii) the class and number of shares of the corporation which are beneficially owned by such shareholder.
The corporation may require any proposed nominee to furnish such other information as may reasonably be required by the corporation
to determine the eligibility of such proposed nominee as a director. No person shall be eligible for election as a director unless
nominated as set forth herein.
The
chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance
with the foregoing procedure, and if he should so determine, he shall so declare to the meeting and the defective nomination shall
be disregarded.
Nothing
contained herein shall prevent the board of directors from filling a vacancy including a vacancy resulting from an increase in
the number of directors, as provided in Article VI.
This
Article XI may be amended or repealed only by the affirmative vote of the holders of at least a majority of the shares of stock
of the corporation entitled to vote thereon; provided, however, if this Article XI shall be adopted by at least two-thirds of
the shares of stock of the corporation entitled to vote thereon, this Article XI may be amended or repealed only by the affirmative
vote of the holders of at least a two-thirds majority of the shares of stock of the corporation entitled to vote thereon.
IN
WITNESS WHEREOF these Amended Articles of Incorporation have been executed by the undersigned officer this 4th day of February,
2015.
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FRP HOLDINGS, INC., |
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a Florida corporation |
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By: |
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Name: |
Thompson S. Baker II |
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Its President |
FRP HOLDINGS, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS CALLED
FOR FEBRUARY 4, 2015.
The undersigned hereby
appoints John D. Baker II and Thompson S. Baker II, or either of them, the attorneys, agents and proxies of the undersigned with
full power of substitution to vote all the shares of common stock of FRP Holdings, Inc. (the “Company”) which the undersigned
is entitled to vote at the Annual Meeting of Shareholders of the Company to be held at The River Club, Ortega Room, on the 34th
floor of the Wells Fargo Building, One Independent Drive, Jacksonville, Florida on February 4, 2015, at 10 o’clock in the
morning, local time, and all adjournments thereof, with all the powers the undersigned would possess if then and there personally
present. Without limiting the general authorization and power hereby given, the above proxies are directed to vote as instructed
on the matters below:
1. Election
of Directors (the Board recommends a vote FOR each nominee)
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FOR the nominees listed |
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WITHHOLD AUTHORITY |
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below (except as marked |
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to vote for all nominees |
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to the contrary below) |
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listed below |
John D. Baker II, Thompson
S. Baker II, Charles E. Commander III, H.W. Shad III, Martin E. Stein, Jr., William H. Walton III and James H. Winston are the
nominees.
To withhold authority to vote for any individual nominee, write
that nominee's name in the space provided.
___________________________________________________________________
2. Ratification of Hancock Askew & Co., LLP,
as the Independent Registered Public Accounting Firm (auditors) for fiscal 2015 (The Board recommends a vote FOR this proposal)
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FOR |
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AGAINST |
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ABSTAIN |
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3.
Approval of the Amended and Restated Articles of Incorporation of the Company (The Board recommends a vote FOR this proposal)
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FOR |
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AGAINST |
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ABSTAIN |
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4. Advisory
approval of executive compensation (The Board recommends a vote FOR this proposal)
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FOR |
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AGAINST |
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ABSTAIN |
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NOTE: Such other business
as may properly come before the meeting or any adjournments thereof.
(Continued and to be signed
on other side)
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Shares represented by properly
executed and returned proxies will be voted at the meeting in accordance with the undersigned’s directions or, if no directions
are indicated, will be voted in favor of the election of the nominees proposed in this proxy statement, for ratification of the
Independent Registered Public Accounting Firm, for approval of the Company's Amended and Restated Articles of Incorporation, for
advisory approval of executive compensation and, if any other matters properly come before the meeting, in accordance with the
best judgment of the persons designated as proxies.
The undersigned hereby
revokes any proxy heretofore given with respect to the shares owned by the undersigned, acknowledges receipt of the Notice and
the Proxy Statement for the meeting accompanying this proxy, each dated December __, 2014, and authorizes and confirms all that
the appointed proxies or their substitutes, or any of them, may do by virtue hereof.
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Dated: |
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Signature |
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Signature, if held jointly |
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IMPORTANT: Please date this
proxy and sign exactly as your name or names appear(s) hereon. If the stock is held jointly, signatures should include both names.
Personal representatives, trustees, guardians and others signing in a representative capacity should give full title. If you attend
the meeting, you may, if you wish, withdraw your proxy and vote in person. |
PLEASE RETURN PROMPTLY IN THE ACCOMPANYING
ENVELOPE.
Proxy Statement dated December __, 2014
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