SECURITIES
AND EXCHANGE COMMISSION |
Proxy
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Soliciting
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FRP
HOLDINGS, INC.
(Name
of Registrant as Specified In Its Charter)
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__________________________
200 W. Forsyth Street, 7th Floor
Jacksonville, Florida 32202
Phone (904) 396-5733
December____, 2014
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.
| Sincerely, |
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| Thompson S. Baker
II |
| President and Chief
Executive Officer |
2015 ANNUAL MEETING OF SHAREHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
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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(2) |
To ratify the Audit Committee’s selection of the independent registered public accounting firm. |
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To declassify the Board of Directors of FRP Holdings, Inc. |
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To eliminate the supermajority vote requirement for approval of certain transactions with affiliates of the Company. |
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To delete or modify miscellaneous provisions of the Company’s existing articles. |
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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.
| John D. Milton, Jr. |
| 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:
| • | 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. |
| • | 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. |
| • | 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 three proposals to amend the Company’s Articles of Incorporation. Proposals No. 3, 4, and 5 propose, respectively,
to (i) declassify the board of directors, (ii) remove the supermajority vote required for the approval of certain affiliated transactions,
and (iii) delete or modify miscellaneous provisions of the Company’s existing articles of incorporation.
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.
Proposals No. 3, and 4,
which seek approval of amendment of our existing articles of incorporation (“Existing Articles”) to declassify our
board of directors and delete the provision requiring supermajority approval of certain transactions with affiliates, require the
affirmative vote of 75% of the shares entitled to vote thereon for the approval of an amendment.
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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X |
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Thompson S. Baker II |
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X |
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 |
X* |
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James H. Winston |
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X |
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| X – Committee Member | * – 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:
| • | Reviews the annual audited and the quarterly consolidated financial statements; |
| • | 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; |
| • | Reviews earnings press releases prior to issuance; |
| • | Appoints, oversees, and approves compensation of the independent auditor; |
| • | Approves all audit and permitted non-audit services provided by the independent auditor; |
| • | Reviews findings and recommendations of the independent auditor and management’s response
to the recommendations of the independent auditor; |
| • | Recommends whether the audited financial statements should be included in the Company’s Annual
Report on Form 10-K; and |
| • | 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:
| • | 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; |
| • | Establishes compensation levels, including incentive and bonus compensation, for the Chief Executive
Officer; |
| • | Establishes and determines, in consultation with the Chief Executive Officer, the compensation
levels of other senior executive officers; |
| • | 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; |
| • | Administers the Company’s stock plans; and |
| • | 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:
| • | Each director shall at all times represent the interests of the shareholders of the Company. |
| • | Each director shall at all times exhibit high standards of integrity, commitment and independence
of thought and judgment. |
| • | 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. |
| • | The Board shall meet the applicable standards of independence from the Company and its management. |
| • | 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.
NOTE REGARDING PROPOSALS NO. 3, 4 AND 5
Proposals No. 3, 4, and 5 pertain to amending
the Company’s Articles of Incorporation. The Board has unanimously adopted the Amended and Restated Articles of Incorporation
as set forth in Appendix II (“Amended Articles”) and is submitting for shareholder approval the provisions to
be amended. The Amended Articles, including only those amendments approved by the shareholders, will become effective upon filing
with the Department of State of the State of Florida, which we intend to do promptly upon approval of one or more of the proposed
amendments at the Annual Meeting. The Amended Articles are identical to the Company’s Existing Articles except for the changes
described in Proposals No. 3, 4, and 5. None of these proposals is conditioned on the approval of any other proposal, so a negative
vote on one proposal will not affect the vote on any other proposal.
PROPOSAL NO. 3
DECLASSIFY THE BOARD OF DIRECTORS
The Company’s Existing
Articles divide our Board of Directors into four classes, with each class being elected annually to serve a four year term.
The Board of Directors
proposes to 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 Proposal No. 3 is 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 approval of Proposal No. 3 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 Proposal No. 3 will result in the
amendment of ARTICLE VII of the Company’s Amended Articles of Incorporation, as shown on Appendix II.
The Company’s Existing
Articles 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.
The Board of Directors has unanimously adopted
the Amended Articles as set forth on Appendix II, which incorporates this amendment. The Board of Directors recommends that
the Company’s shareholders approve Proposal No. 3.
PROPOSAL NO. 4
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. |
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 Board of Directors
proposes to 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.
The Board of Directors
has unanimously adopted the Amended Articles as set forth on Appendix II, which incorporates this amendment. The Board of
Directors recommends that the Company’s shareholders approve Proposal No. 4.
PROPOSAL NO. 5
DELETE OR MODIFY MISCELLANEOUS PROVISIONS
OF THE EXISTING ARTICLES
Deletion of Series A Preferred Stock
The Series A Preferred
Stock created by the Company’s Existing Articles 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 Board of Directors propose
to eliminate this language as it is no longer necessary.
Deletion or Modification of Items 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 Board of Directors proposes
to 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.
The Board of Directors
has unanimously adopted the Amended Articles as set forth on Appendix II, which incorporates this amendment. The Board of
Directors recommends that the Company’s shareholders approve Proposal No. 5.
PROPOSAL NO. 6
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.
Cumulative Total Return
|
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
| • | 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. |
| | |
| • | 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:
• A substantial
portion of executive officer compensation usually is contingent on, and variable with, achievement of objective business unit
and/or individual performance objectives.
• Our stock incentive plan
prohibits discounted stock options, reload stock options and re-pricing of stock options.
• 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 |
|
$ |
406,850 |
|
|
|
3 |
% |
|
$ |
420,000 |
|
|
|
3.2 |
% |
President and CEO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Nonquali-
fied Deferred Compensation Earnings
($)(3) |
All Other Compensation
($)(4) |
Total
($) |
|
|
|
|
|
|
|
|
|
Thompson S. Baker II |
2014 |
$ 403,888 |
--- |
$200,000 |
--- |
--- |
$47,848 |
$651,736 |
President and CEO |
2013 |
$395,000 |
--- |
$200,000 |
$395,000 |
--- |
$27,297 |
$1,017,297 |
(PEO) |
2012 |
$395,000 |
--- |
--- |
$359,055 |
--- |
$26,326 |
$780,381 |
John D. Milton, Jr. |
2014 |
$165,000 |
--- |
$91,102 |
--- |
--- |
$43,326 |
$299,428 |
Executive Vice |
2013 |
$165,000 |
--- |
$55,139 |
$95,040 |
--- |
$25,739 |
$340,918 |
President and CFO (PFO) |
2012 |
$165,000 |
--- |
$52,650 |
$89,991 |
--- |
$21,154 |
$328,795 |
David H. deVilliers, Jr., |
2014 |
$322,426 |
--- |
$100,000 |
$324,404 |
$139,923 |
$19,936 |
$906,689 |
Vice President and |
2013 |
$314,869 |
--- |
$100,000 |
$316,492 |
$128,079 |
$16,168 |
$875,608 |
President, FRP
Development Corp. |
2012 |
$310,000 |
--- |
$100,000 |
$310,000 |
$118,206 |
$15,184 |
$853,390 |
Robert E. Sandlin, |
2014 |
$257,300 |
--- |
$100,000 |
--- |
--- |
$26,953 |
$384,253 |
Vice President and |
2013 |
$245,063 |
--- |
$100,000 |
$272,800 |
--- |
$17,574 |
$635,437 |
President,
Florida Rock & Tank Lines, Inc. |
2012 |
$233,437 |
--- |
$100,000 |
$174,825 |
--- |
$22,878 |
$531,140 |
John D. Klopfenstein, |
2014 |
$182,600 |
--- |
$54,000 |
--- |
--- |
$32,058 |
$268,658 |
Controller and Chief |
2013 |
$174,000 |
--- |
$33,618 |
$88,000 |
--- |
$20,944 |
$316,562 |
Accounting Officer |
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 |
12/03/14 |
N/A |
N/A |
$420,000 |
12,340 |
35.89 |
$200,000 |
President and CEO |
12/05/13 |
N/A |
N/A |
$406,850 |
10,700 |
41.39 |
$200,000 |
John D. Milton, Jr. |
12/03/14 |
N/A |
N/A |
$165,000 |
9,375 |
35.89 |
$88,000 |
Executive Vice President and CFO |
12/05/13 |
N/A |
N/A |
$165,000 |
7,500 |
41.39 |
$91,102 |
David H. deVilliers, Jr., Vice President |
12/03/14 |
N/A |
N/A |
$324,404 |
6,170 |
35.89 |
$100,000 |
and President FRP Development Corp. |
12/05/13 |
N/A |
N/A |
$324,404 |
5,350 |
41.39 |
$100,000 |
Robert E. Sandlin, Vice President |
12/03/14 |
N/A |
N/A |
$302,500 |
6,170 |
35.89 |
$100,000 |
and President, Florida Rock & Tank Lines, Inc. |
12/05/13 |
N/A |
N/A |
$286,440 |
5,350 |
41.39 |
$100,000 |
John D. Klopfenstein, Controller and |
12/03/14 |
N/A |
N/A |
$96,096 |
3,330 |
35.89 |
$54,000 |
Chief Accounting Officer |
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
($) |
|
|
|
|
|
|
|
Thompson S. Baker II |
3,000
3,000
3,000
3,000
3,568
— |
14,272
10,700 |
14.970
15.167
14.833
20.133
26.200
41.39 |
11/30/2014
01/25/2015
05/03/2015
08/02/2015
12/05/2022
12/04/2023 |
— |
— |
John D. Milton, Jr. Executive Vice President and CFO |
30,000
30,000
7,500
7,500
7,500
7,500
7,500 |
—
—
—
—
—
—
— |
28.75
24.45
32.16
25.60
22.25
26.20
41.39 |
06/15/2018
06/16/2019
12/02/2019
12/01/2020
12/06/2021
12/05/2022
12/04/2023 |
— |
— |
David H. deVilliers, Jr., Vice President and President, FRP Development Corp. |
7,600
12,000
6,084
5,598
4,238
1,784
— |
—
—
1,521
3,732
6,357
7,136
5,350 |
14.50
25.26
32.16
25.60
22.25
26.20
41.39 |
12/28/2014
08/19/2019
12/02/2019
12/01/2020
12/06/2021
12/05/2022
12/04/2023 |
— |
— |
Robert E. Sandlin, Vice President and President, Florida Rock & Tank Lines, Inc. |
12,000
6,084
5,598
4,238
1,784
— |
—
1,521
3,732
6,357
7,136
5,350 |
25.26
32.16
25.60
22.25
26.20
41.39 |
08/19/2019
12/02/2019
12/01/2020
12/06/2021
12/05/2022
12/04/2023 |
— |
— |
John D. Klopfenstein, Controller and Chief Accounting Officer |
2,400
1,800
1,200
600
— |
600
1,200
1,800
2,400
2,890 |
32.16
25.60
22.25
26.20
41.39 |
12/02/2019
12/01/2020
12/06/2021
12/05/2022
12/04/2023 |
— |
— |
Fiscal 2014 Option Exercises
The following table
provides information regarding stock option exercises by the named executive officers and vesting of restricted stock during fiscal
2014.
Option Exercises and Stock Vested
|
Option Awards |
Stock Awards |
Name
(a) |
Number of Shares Acquired
on Exercise (#)
(b) |
Value Realized on Exercise
($)
(c) |
Number of Shares Acquired
on Vesting (#)
(d) |
Value Realized on Vesting
($)
(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
Meeting Fees |
Chairman
Member
Chairman(1)
Member(1) |
$
$
$
$ |
10,000
5,000
1,500
1,000 |
|
|
|
|
|
|
Compensation Committee: |
|
|
|
Annual Fee
Meeting Fees |
Chairman
Member
Chairman
Member |
$
$
$
$ |
5,000
1,000
1,500
1,000 |
|
|
|
|
|
|
Other Committees: |
|
|
|
Annual Fee
Meeting Fees |
Chairman
Member
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. |
65,630 |
|
|
* |
|
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) |
2,867,873 |
(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- |
|
34,679 |
|
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
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 in separate executive sessions 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.
| FRP HOLDINGS, INC., |
| a Florida corporation |
| | |
| By: | |
| Name: Thompson S. Baker II |
| 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) |
| / / | FOR the nominees listed
below (except as marked
to the contrary below) |
/ / |
WITHHOLD AUTHORITY
to vote for all nominees
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) |
/ / FOR / / AGAINST / / ABSTAIN
| 3. | Declassify the Board of Directors (The
Board recommends a vote FOR this proposal) |
/ / FOR / / AGAINST / / ABSTAIN
| 4. | Eliminate the Supermajority Vote Requirement for Approval of Certain Transactions with Affiliates of the Company (The Board
recommends a vote FOR this proposal) |
/ / FOR / / AGAINST / / ABSTAIN
| 5. | Delete or Modify Miscellaneous Provisions of the Existing Articles (The Board recommends a vote FOR this proposal) |
/ / FOR / / AGAINST / / ABSTAIN
| 6. | Advisory approval of executive compensation
(The Board recommends a vote FOR this proposal) |
/ / FOR / / AGAINST / / ABSTAIN
NOTE: Such other business
as may properly come before the meeting or any adjournments thereof.
(Continued and to be signed
on other side)
- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - -
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.
| |
Signature |
| |
|
| |
|
| |
Signature, if held jointly |
| |
|
| 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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