The maximum compensation amounts and amounts accrued under the Griffin Incentive Plan with respect to each objective for fiscal 2018, based on the level of achievement of each incentive plan component, is shown in the following table. The amounts in the table below reflect performance against each incentive plan component.
|
|
|
|
|
|
|
|
|
Maximum Aggregate
|
|
|
Amount Earned
|
|
|
Amount of Incentive
|
|
|
Based on Actual Level
|
Incentive Plan Component
|
|
Plan Component
|
|
|
of Achievement
|
Adjusted Funds from Operations
|
|
$
|
562,500
|
|
$
|
508,583
|
Property Sales
|
|
|
250,000
|
|
|
44,909
|
Build-to-Suit Projects
|
|
|
250,000
|
|
|
150,000
|
Buildings Built on Speculation
|
|
|
250,000
|
|
|
—
|
Leasing
|
|
|
180,000
|
|
|
126,313
|
Acquisitions
|
|
|
200,000
|
|
|
—
|
|
|
$
|
1,692,500
|
|
$
|
829,805
|
The aggregate amount of $829,805 earned under the Griffin Incentive Plan is not expected to be fully allocated and paid to Griffin employees for fiscal 2018. Incentive compensation for fiscal 2018 of approximately $760,000 is expected to be paid to Griffin employees under such plan, with $320,032 of such amount paid to Named Executive Officers. Such payments to the Named Executive Officers will be based on the specific percentages of each incentive compensation pool as per the Griffin Incentive Plan.
Equity Compensation
No stock options were awarded to any of the Named Executive Officers or to any employee of Griffin in fiscal 2018. The currently outstanding stock options held by the Named Executive Officers Stock vest in equal installments on the third, fourth and fifth anniversaries from the date of grant, subject to acceleration of vesting as set forth below.
While Griffin was not a party to any employment, change in control or other agreement with any Named Executive Officers, pursuant to the Griffin 2009 Stock Option Plan, if option grants are assumed by a successor corporation (or a parent or subsidiary thereof) in connection with a change in control, the vesting of such grants will be accelerated upon termination of a Named Executive Officer’s employment upon or within twelve months following such change in control. As of November 30, 2018, the closing market price of $35.45 per share of Griffin common stock exceeded the exercise price for all of the outstanding options held by Named Executive Officers and the aggregate value of all unvested options held by the Named Executive Officers (based on the excess of the November 30, 2018 closing price of Griffin’s common stock over the exercise price) was $577,800. The individual awards for each Named Executive Officer and the values thereof are set forth in the table in the Outstanding Equity Awards at Fiscal Year-End section above.
Deferred Compensation
Griffin maintains a Deferred Compensation Plan for certain of its employees, including the Named Executive Officers, who, due to Internal Revenue Service regulations, cannot take full advantage of the Griffin 401(k) Savings Plan. A portion of an eligible employee’s salary may be deferred under the Deferred Compensation Plan. The investment options in the Deferred Compensation Plan currently mirror those of the Griffin 401(k) Savings Plan. The Deferred Compensation Plan is unfunded, with benefits to be paid from Griffin’s assets. Performance results of an employee’s balance in the Deferred Compensation Plan are based on the returns of the mutual funds and one common collective trust fund that may be selected by the employee as if the amounts deferred were invested in the selected mutual funds and the common collective trust fund. Distributions from the Deferred Compensation Plan generally may occur at termination of employment, change in control and/or at the time of qualifying hardship events. Participants of Griffin’s Deferred Compensation Plan may elect to have their balances paid out in a lump sum or annual installments upon termination of employment or a change in control of Griffin. Griffin’s contributions to the Deferred Compensation Plan for Mr. Gamzon in an amount equal to $8,236 is included in the “All Other Compensation” column of the Summary Compensation Table. Messrs. Danziger and Lescalleet did not contribute to the Deferred Compensation Plan in fiscal 2018. No earnings from the Deferred Compensation Plan are included in the “All Other Compensation” column of the Summary Compensation Table.
AUDIT COMMITTEE REPORT
Membership and Role of the Audit Committee
Griffin’s Audit Committee is comprised of Mr. Bechtel, Mr. Israel, as Chairman, and Mr. May. All members of the Audit Committee meet the Nasdaq composition requirements, including the requirements regarding financial literacy, and the Board has determined that each member is independent under the listing standards of Nasdaq and the rules of the SEC, regarding audit committee membership. The Audit Committee operates under a written charter, which is publicly available in the “Corporate Governance” section of the “Investors” section of Griffin’s website located at www.griffinindustrial.com.
The primary function of the Audit Committee is to assist Griffin’s Board with its oversight responsibilities regarding: (i) the integrity of Griffin’s financial statements; (ii) Griffin’s compliance with legal and regulatory requirements; (iii) the independent registered public accountant’s qualifications and independence; and (iv) the performance of the independent registered public accountants. The Audit Committee prepared the report required by the rules of the SEC to be included in this Proxy Statement.
The Audit Committee’s powers and responsibilities include: (1) the sole authority for the appointment, compensation, retention and oversight of the independent registered public accountants; (2) the pre-approval of audit and non-audit services by the independent registered public accountants; (3) the review of independence of the independent registered public accountants; (4) the ongoing review of all related party transactions; (5) the establishment of procedures for the receipt, retention and treatment of complaints received by Griffin regarding accounting, internal accounting controls or auditing matters; and (6) the regular reporting to the Board of any issues that arise with respect to the quality or integrity of Griffin’s financial statements.
Review of Griffin’s Audited Financial Statements for the Fiscal Year Ended November 30, 2018
The Audit Committee reviewed and discussed the audited consolidated financial statements of Griffin for the fiscal year ended November 30, 2018 with Griffin’s management. The Audit Committee discussed with RSM US, Griffin’s independent registered public accountants for the fiscal year ended November 30, 2018, the matters required to be discussed by Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 1301 “Communications with Audit Committees.”
The Audit Committee has also received the written disclosures and the letter from RSM US required by the applicable requirements of the PCAOB regarding communications with the Audit Committee concerning independence. The Audit Committee has discussed the independence of RSM US with that firm.
Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to the Board that Griffin’s audited consolidated financial statements be included in Griffin’s Annual Report on Form 10 K for the fiscal year ended November 30, 2018 for filing with the SEC.
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|
Submitted By:
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Thomas C. Israel (Chairman)
|
|
David R. Bechtel
|
|
Jonathan P. May
|
The information under “Review of Griffin’s Audited Financial Statements for the Fiscal Year Ended November 30, 2018” shall not be deemed to be incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that Griffin specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.
PROPOSAL II. RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTANTS
The following is a summary of the fees incurred by Griffin for professional services rendered by RSM US for fiscal 2018 and fiscal 2017:
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|
|
|
|
|
|
|
|
|
Fiscal
|
|
Fiscal
|
|
|
|
2018 Fees
|
|
2017 Fees
|
|
Audit fees
|
|
$
|
452,947
|
|
$
|
430,781
|
|
Audit-related fees
|
|
|
70,400
|
|
|
20,585
|
|
Tax fees
|
|
|
49,375
|
|
|
50,675
|
|
All other fees
|
|
|
—
|
|
|
—
|
|
|
|
$
|
572,722
|
|
$
|
502,041
|
|
Audit fees consist of fees incurred for professional services rendered for the audit of Griffin’s consolidated financial statements and for the review of Griffin’s interim consolidated financial statements. Audit‑related fees in fiscal 2018 reflect fees for professional services rendered by RSM US in connection with Griffin’s filing of a universal shelf registration statement and a prospectus supplement for an “at-the-market” equity offering program and fees for the audit of the Griffin 401(k) Savings Plan by RSM US. Audit‑related fees in fiscal 2017 reflect fees for the audit of the Griffin 401(k) Savings Plan by RSM US. Tax fees consist of fees incurred for professional services performed by RSM US relating to tax compliance, tax reporting and tax planning. There were no consulting fees paid to RSM US in fiscal 2018 or fiscal 2017.
The Audit Committee’s policy is to pre‑approve all audit, audit‑related and tax services to be provided by the independent registered public accountants. During fiscal 2018, Griffin’s Audit Committee pre‑approved all audit, audit‑related and tax services. The Audit Committee has considered the non‑audit services provided by RSM US and determined that the services provided were compatible with maintaining the independence of RSM US.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE
SELECTION OF RSM US LLP
While the submission of this proposal to a vote of stockholders is not legally required, the Audit Committee and management believe that stockholder ratification of Griffin’s selection of RSM US as its independent registered public accountants is desirable. In the event this selection is not ratified by the affirmative vote of a majority of shares of Griffin common stock present or represented by proxy and entitled to vote on the proposal, the Audit Committee will consider that fact when it selects the independent registered public accountants for the following year. The Audit Committee may, in its discretion, replace RSM US as independent registered public accountants at a later date without the approval of the stockholders.
A representative of RSM US is expected to be present at the Annual Meeting and will be given an opportunity to make a statement if so desired and to respond to appropriate questions.
PROPOSAL III. APPROVAL, ON AN ADVISORY (NON-BINDING) BASIS, OF EXECUTIVE COMPENSATION
In accordance with Section 14A of the Exchange Act, as amended, Griffin is requesting stockholder approval, on an advisory (non-binding) basis, of the compensation of Griffin’s Named Executive Officers as presented in the Executive Compensation section beginning on page 15 and the compensation tables included therein beginning on page 16 including the narrative disclosure thereto. Griffin has determined to hold a say on pay advisory vote every year, and the next say on pay advisory vote (following the advisory (non-binding) vote at this Annual Meeting) will occur at the 2020 Annual Meeting of Stockholders.
Griffin’s executive compensation program has been designed to attract, motivate and retain the management talent Griffin believes is necessary to achieve its financial and strategic goals. Griffin’s compensation programs reward each of its Named Executive Officers for team results and individual contributions.
Griffin’s executive compensation programs consist of three principal elements:
1. Base Salary;
2. Annual Incentive Compensation Programs; and
3. Long‑Term Incentive Program.
Griffin’s executive compensation programs consist of a mixture of base salary and incentive compensation that provides for a portion of executive compensation to be “at‑risk.” Griffin’s executive compensation programs balance the focus on both short‑ and long‑term goals, encouraging executives to focus on the health of Griffin during the immediate fiscal year through annual incentive compensation programs, and for the future through the long‑term incentive program (i.e., equity awards). Griffin’s executive compensation programs are consistently reviewed by the Compensation Committee, which consists solely of independent directors, to ensure that they provide Griffin’s executives with competitive pay opportunities and reflect current practices.
As an advisory vote, this proposal is not binding upon the Board or Griffin in any way. However, the Compensation Committee, which is responsible for the design and administration of Griffin’s executive compensation practices, values the opinions of Griffin’s stockholders expressed through your vote on this proposal. The Compensation Committee will consider the outcome of this vote in making future compensation decisions for Griffin’s Named Executive Officers.
Accordingly, Griffin will present the following resolution for vote at the Annual Meeting:
“RESOLVED, that the stockholders of Griffin Industrial Realty, Inc. (“Griffin”) approve, on an advisory (non-binding) basis, the compensation of Griffin’s Named Executive Officers as described in “Executive Compensation” and disclosed in the 2018 Summary Compensation Table and related compensation tables and narrative disclosure as set forth in Griffin’s 2019 Proxy Statement.”
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
APPROVAL, ON AN ADVISORY (NON‑BINDING) BASIS, OF THE COMPENSATION OF GRIFFIN’S NAMED EXECUTIVE OFFICERS
AS PRESENTED IN THIS PROXY STATEMENT
The proposal to approve the compensation of Griffin’s Named Executive Officers, on an advisory (non‑binding) basis, requires an affirmative vote of the majority of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on the proposal.
PROPOSAL IV. APPROVAL OF FIRST AMENDMENT TO THE GRIFFIN 2009 STOCK OPTION PLAN
We are asking you to approve the First Amendment to the Griffin 2009 Stock Option Plan (such amendment, the “First Amendment”) and such plan, as amended by the First Amendment, the “Plan”). Our Board
adopted the First Amendment
on April 3, 2019, effective as of (and subject to) stockholder approval at the Annual Meeting. The Plan will become effective if it is approved by the affirmative vote of a majority of the shares present or represented by proxy and entitled to vote on the proposal.
The First Amendment, to the extent approved by the stockholders at the Annual Meeting will cause the Plan to remain in place through
April 3, 2029, the tenth anniversary of adoption of such First Amendment by our Board
, and allow grants through such
date (provided that no grants shall be made after April 3, 2019 and prior to the receipt of stockholder approval at the Annual Meeting). Stockholder approval of the Plan is necessary in order for Griffin to (1) meet the Nasdaq stockholder approval requirements, and (2) be permitted to grant incentive stock options ("ISOs") thereunder.
The principal features of the Plan are summarized below, but the summary is qualified in its entirety by reference to the Griffin 2009 Stock Option Plan, which is incorporated by reference to Exhibit 10.2 to the Form 10-K filed on February 13, 2014, and the First Amendment, which is attached hereto as Appendix A.
Highlights of the Plan
The Plan allows Griffin to grant stock options to directors, officers, employees and consultants of Griffin and its affiliates as incentives and rewards for superior performance. Some of the key features of the Plan that reflect Griffin's commitment to effective management of incentive compensation are as follows:
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·
|
|
No Repricing or Replacement of Options
. The Plan prohibits, without stockholder approval: (i) the amendment of options to reduce the exercise price, and (ii) the replacement of an option with cash or any other award when the price per share of the option exceeds the fair market value of the underlying shares.
|
|
·
|
|
No In-the-Money Options
. The Plan prohibits the grant of options with an exercise or base price less than the fair market value of Griffin common stock, generally the closing price of Griffin common stock, on the date of grant.
|
|
·
|
|
Independent Administration
. The Compensation Committee of the Board, which consists of only independent directors, will be responsible for the general administration of the Plan with respect to options granted to employees and consultants. The full Board will administer the Plan with respect to awards made to non-employee directors.
|
Administration
The Plan will generally be administered by the Compensation Committee. However, the Compensation Committee may delegate to a committee of one or more members of the Board or one or more of Griffin's officers the authority to grant or amend awards to participants other than Griffin's senior executives who are subject to Section 16 of the Exchange Act. Unless otherwise determined by the Board, the Compensation Committee shall consist solely of two or more non-employee directors appointed by and holding office at the pleasure of the Board, each of whom is a non-employee director within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and an "independent director" under the rules of the Nasdaq (or other principal securities market on which shares of Griffin common stock are traded). In addition, the full Board will administer the Plan with respect to awards made to non-employee directors. The Compensation Committee and the Board, as applicable, are sometimes referred to herein as the "Administrator." The Administrator will have the authority to administer the Plan, including the power to determine eligibility, the types and sizes of awards, the price and timing of awards and the acceleration or waiver of any vesting restriction, as well as the authority to delegate such administrative responsibilities.
Eligibility
Persons eligible to participate in the Plan include all non-employee members of the Board, consisting of five directors following the 2019 Annual Meeting of Stockholders and approximately 34 employees
and one consultant of Griffin and its subsidiaries and affiliates, as determined by the Administrator.
Limitation on Awards and Shares Available
The maximum number of shares of Griffin common stock available for issuance under the Plan is equal to 386,926 and such maximum is not affected by the First Amendment. Notwithstanding the foregoing, no more than a total of 386,926 shares of Griffin common stock may be delivered upon exercise of ISOs under the Plan. Any shares that are subject to awards of options under the Plan will be counted against this limit as one (1) share for every one (1) share granted. The shares of Griffin common stock covered by the Plan may be treasury shares, authorized but unissued shares, or shares purchased in the open market. The market value (i.e., the closing price) of a share of Griffin common stock as of April
4, 2019 was $34.80.
If any shares subject to an award under the Plan are forfeited or expire or an award under the Plan is settled for cash, then any shares subject to such award may, to the extent of such forfeiture, expiration or cash settlement, be used again for new grants under the Plan. However, any shares tendered or withheld to satisfy the grant or
exercise price or tax withholding obligation pursuant to any award, and any shares purchased on the open market with the cash proceeds from the exercise of options, under the Plan, may not be used again for new grants. Any shares that again become available for grant will be added back as one (1) share if such shares were subject to an option under the Plan.
Awards granted under the Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by an entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock ("Substitute Awards") will not reduce the shares authorized for grant under the Plan. In no event shall a Substitute Award include any award made in connection with the cancellation and repricing of an option. Additionally, in the event that a company acquired by Griffin or any of its subsidiaries or affiliates or with which Griffin or any of its subsidiaries or affiliates combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan may be used for awards under the Plan and will not reduce the shares authorized for grant under the Plan, absent the acquisition or combination, and will only be made to individuals who were not employed by or providing services to Griffin or any of its subsidiaries or affiliates immediately prior to such acquisition or combination.
The maximum number of shares of Griffin common stock that may be subject to one or more awards granted to any one participant pursuant to the Plan during any fiscal year of Griffin is 50,000.
Awards
The Plan provides for the grant of both ISOs and nonqualified stock options. No determination has been made as to the types or amounts of awards that will be granted to specific individuals pursuant to the Plan, except that the Plan provides for formula option grants to Griffin's non-employee directors which are explained below in connection with the "New Plan Benefits" table. See the Summary Compensation Table and Grants of Plan-Based Awards Table for information on awards granted under the Plan to Griffin's named executive officers identified in those tables.
Stock options, including ISOs, and nonqualified stock options may be granted pursuant to the Plan. The option exercise price of all stock options granted pursuant to the Plan will not be less than 100% of the fair market value of Griffin common stock on the date of grant. Stock options may be exercised as determined by the Administrator, but in no event may a stock option have a term extending beyond the tenth anniversary of the date of grant. ISOs granted to any person who owns, as of the date of grant, stock possessing more than ten percent of the total combined voting power of all classes of Griffin stock, however, shall have an exercise price that is not less than 110% of the fair market value of Griffin common stock on the date of grant and may not have a term extending beyond the fifth anniversary of the date of grant. The aggregate fair market value of the shares with respect to which options intended to be ISOs are exercisable for the first time by an employee in any calendar year may not exceed $100,000.
Payment Methods
The Administrator will determine the methods by which payments by any award holder with respect to any awards granted under the Plan may be paid, the form of payment, including, without limitation: (1) cash or check; (2) shares of our common stock issuable pursuant to the award or held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences and having a fair market value on the date of delivery equal to the aggregate payments required; (3) the delivery of a
written or electronic notice that the award holder has placed a market sell order with a broker with respect to shares of our common stock then issuable upon exercise or vesting of an award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to us in satisfaction of the aggregate payments required; provided that payment of such proceeds is then made to Griffin upon settlement of such sale; or (4) other form of legal consideration acceptable to the Administrator. However, no participant who is a member of the Board or an "executive officer" of Griffin within the meaning of Section 13(k) of the Exchange Act will be permitted to make payment with respect to any awards granted under the Plan, or continue any extension of credit with respect to such payment in any method which would violate the prohibitions on loans made or arranged by Griffin as set forth in Section 13(k) of the Exchange Act.
Vesting and Exercise of an Award
The applicable award agreement governing an award will contain the period during which the right to exercise the award in whole or in part vests, including the events or conditions upon which the vesting of an award will occur or may accelerate. No portion of an award which is not vested at the holder's termination of service with us will subsequently become vested, except as may be otherwise provided by the Administrator in the agreement relating to the award or by action following the grant of the award.
Generally, an option may only be exercised while such person remains an employee, consultant or non-employee director of us or one of our subsidiaries or affiliates or for a specified period of time (up to the remainder of the award term) following the holder's termination of service with us or one of our subsidiaries or affiliates. An award may be exercised for any vested portion of the shares subject to such award until the award expires. Upon the grant of an award or following the grant of an award, the Administrator may provide that the period during which the award will vest or become exercisable will accelerate, in whole or in part, upon the occurrence of one or more specified events, including a change in control or a holder's termination of employment or service with us or otherwise.
Transferability
In general, no award under the Plan may be transferred other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a domestic relations order, unless and until such award has been exercised or the shares underlying such award have been issued and all restrictions applicable to such shares have lapsed.
Adjustment Provisions
Certain transactions with Griffin's stockholders not involving Griffin's receipt of consideration, such as a stock split, spin-off, stock dividend or certain recapitalizations may affect the share price of Griffin common stock (which transactions are referred to collectively as "equity restructurings"). In the event that an equity restructuring occurs, Griffin's Board will equitably adjust the class of shares issuable and the maximum number and kind of shares of Griffin common stock subject to the Plan (and the maximum number of shares deliverable pursuant to the exercise of ISOs under the Plan), and will equitably adjust outstanding awards as to the class, number of shares and price per share of Griffin common stock. Other types of transactions may also affect Griffin common stock, such as a dividend or other distribution, reorganization, merger, or other changes in corporate structure. In the event that there is such a transaction, which is not an equity restructuring, and Griffin's Board determines that an adjustment to the Plan and any outstanding awards would be appropriate to prevent any dilution or enlargement of benefits under the Plan, the Administrator will equitably adjust the Plan as to the class of shares issuable and the maximum number of shares of Griffin's common stock subject to the Plan (and the maximum number of shares deliverable pursuant to the exercise of ISOs under the Plan), as well as the maximum number of shares that may be issued to an employee during any calendar year, and will adjust any outstanding awards as to the class, number of shares, and price per share of Griffin's common stock in such manner as it may deem equitable.
Amendment and Termination
The Board or the Compensation Committee may terminate, amend, or modify the Plan at any time; however, except to the extent permitted by the Plan in connection with certain changes in capital structure, stockholder approval will be obtained for any amendment to (i) increase the number of shares available under the Plan, (ii) reduce the per share exercise price of the shares subject to any option below the per share exercise price as of the date the option was granted, and (iii) cancel any option in exchange for cash or another award when the option price per share exceeds the fair market value of the underlying shares. Subject to shareholder approval of the First Amendment, in no event may an award be granted pursuant to the Plan on or after the tenth anniversary of the date our Board
approved the First Amendment. If shareholder approval of the First Amendment is not received, no future award will be made under the Plan.
Federal Income Tax Consequences
With respect to nonqualified stock options, Griffin is generally entitled to deduct and the optionee recognizes taxable income in an amount equal to the difference between the option exercise price and the fair market value of the shares at the time of exercise. A participant receiving ISOs will not recognize taxable income upon grant. Additionally, if applicable holding period requirements are met, the participant will not recognize taxable income at the time of exercise. However, the excess of the fair market value of Griffin common stock received over the option price is an item of tax preference income potentially subject to the alternative minimum tax. If stock acquired upon exercise of an ISO is held for a minimum of two years from the date of grant and one year from the date of exercise, the gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition of the stock will be treated as a long-term capital gain or loss, and Griffin will not be entitled to any deduction. If the holding period requirements are not met, the ISO will be treated as one that does not meet the requirements of the Code for ISOs and the tax consequences described for nonqualified stock options will apply.
Section 162(m) of the Code denies a deduction to any publicly held corporation for compensation paid to certain "covered employees" in a taxable year to the extent that compensation to such covered employee exceeds $1 million. It is possible that compensation attributable to awards under the Plan, when combined with all other types of compensation received by a covered employee from us, may cause this limitation to be exceeded in any particular year.
New Plan Benefits
The Plan contains a formula for granting stock options to Griffin's non-employee directors. Assuming that Griffin stockholders approve the First Amendment, beginning in 2019 Griffin's non-employee directors will continue to be awarded options under the Plan. Pursuant to the formula set forth in the Plan, each non-employee director who is re-elected to the Board at any annual meeting of the Griffin stockholders will automatically (and for 2019, immediately following approval of the First Amendment) be granted an option to purchase the number of shares of stock equal to the ratio of (a) $40,000 to (b) the fair market value per share of stock as of the date of such annual meeting. Each individual who first becomes a non-employee director after the date the Plan becomes effective will automatically be granted an option to purchase the number of shares of stock equal to the ratio of (x) $60,000 to (y) the fair market value per share of stock as of the date of the individual becomes a non-employee director. Board members who are employees and who retire as employees but remain on the Board will not be granted an initial award, but will be eligible for annual awards at each annual meeting of the Company's stockholders following his or her retirement.
The following table sets forth the expected option grants under the Plan that will be made to Griffin's non-employee directors in 2019, assuming that Griffin's stockholders approve the First Amendment, that
four of Griffin's non-employee directors
are re-elected to the Board in 2019, and that
one new non-employee
director is elected or appointed to the Board in 2019.
Mr. Danziger will not be entitled to receive an option grant in 2019 in respect of his service as a non-employee director.
|
|
|
|
|
|
|
|
Dollar Value
|
|
Number of Shares
|
Name and Position
|
|
($)
|
|
Underlying Awards
|
Non-Employee Director Group
|
|
$
|
220,000
|
|
(1)
|
|
(1)
|
|
The number of shares underlying awards to our non-employee directors will be determined at the date of the grant of the award.
|
Because the grant of awards under the Plan, other than with respect to awards to non-employee directors as described above, is within the discretion of the Administrator, and the Administrator has not made any other determination as to grants or awards to be made under the Plan, the Company cannot determine any other participants that the Administrator will select to participate in the Plan, or the type or size of any other award that will in the future be received by or allocated to any participant in the Plan. The Company also cannot determine the participants that the Administrator would have selected to participate in the Plan, or the type or size of any award that the Administrator would have approved, had the Plan been in effect during the last fiscal year.
Interest of Certain Persons in the Plan
Stockholders should understand that Griffin's executive officers and non-employee directors may be considered to have an interest in the approval of the Plan because they may in the future receive awards under it. Nevertheless, the Board believes that it is important to provide incentives and rewards for superior performance and the retention of experienced directors by implementing the Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE
APPROVAL OF THE FIRST AMENDMENT TO THE GRIFFIN 2009 STOCK OPTION PLAN
The proposal to approve the First Amendment to the Griffin 2009 Stock Option Plan requires the affirmative vote of the majority of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on the proposal.
HOUSEHOLDING
The SEC’s rules permit Griffin to deliver a single set of proxy materials to one address shared by two or more of its stockholders. This delivery method is referred to as “householding” and can result in significant cost savings. To take advantage of this opportunity, Griffin has delivered only one set of proxy materials to multiple stockholders who share an address, unless we received contrary instructions from the impacted stockholders prior to the mailing date. Griffin agrees to deliver promptly, upon written or oral request, a separate copy of proxy materials, as requested, to any stockholder at the shared address to which a single copy of those documents was delivered. If you prefer to receive separate copies of proxy materials, contact Broadridge Financial Solutions, Inc. by calling 1-866-540-7095 or in writing at 51 Mercedes Way, Edgewood, New York 11717, Attention: Householding Department.
If you are currently a stockholder sharing an address with another stockholder and wish to receive only one copy of future proxy materials for your household, you may notify your broker if your shares are held in a brokerage account or you may notify Griffin if you hold registered shares. Registered stockholders may notify Griffin by contacting Broadridge Financial Solutions, Inc. at the above telephone number or address.
A copy of Griffin’s Annual Report on Form 10‑K/A filed with the SEC, including the financial statements and the financial statement schedules thereto, is available to Griffin’s stockholders without charge at Griffin’s Web site (
www.griffinindustrial.com
), at the Web site maintained by the SEC (
http://www.sec.gov/
) and at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, DC 20549. In addition, a limited number of copies are available at Griffin’s offices, without charge, and may be obtained upon written request to:
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Griffin Industrial Realty, Inc.
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641 Lexington Avenue
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26
th
Floor
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New York, New York 10022
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Attention: Corporate Secretary
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Appendix A
FIRST AMENDMENT TO THE GRIFFIN INDUSTRIAL REALTY, INC.
2009 STOCK OPTION PLAN
This FIRST AMENDMENT TO THE GRIFFIN INDUSTRIAL REALTY, INC. 2009 STOCK OPTION PLAN (the “
First Amendment
”) is hereby adopted by the Board of Directors of Griffin Industrial Realty, Inc. (the “
Company
”) on April 3, 2019. Capitalized terms used but not otherwise defined herein shall have the meanings assigned in the Griffin Industrial Realty, Inc. 2009 Stock Option Plan (the “
Option Plan
”).
RECITALS:
WHEREAS, the Company currently maintains the Option Plan;
WHEREAS, pursuant to Section 9.1 of the Option Plan, the Option Plan may be wholly or partially amended or otherwise modified at any time or from time to time by the Board; and
WHEREAS, the Board has deemed it advisable and in the best interests of the Company to amend the Option Plan as described herein.
NOW, THEREFORE, THE BOARD HAS DECLARED that, subject to the approval of the stockholders of the Company and effective as of the date of such stockholder approval (the “
Amendment Date
”), the Option Plan shall be amended as follows:
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1.
Section 2.18 of the Option Plan is hereby amended and restated in its entirety as follows:
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““
Effective Date
” shall mean April 3, 2019.”
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2.
The last sentence of Section 9.1 of the Option Plan is hereby amended and restated in its entirety as follows:
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“No Awards may be granted or awarded during any period of suspension or after termination of the Plan, and in no event may any Award be granted under the Plan after April 3, 2029.”
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3.
This Amendment shall be, effective as of the Amendment Date, subject to its approval by the stockholders of the Company within twelve (12) months following the date hereof. To the extent this First Amendment is not approved by the stockholders of the Company within twelve (12) months following the date hereof, it shall be of no force and effect.
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4.
Upon the Amendment Date, this Amendment shall be incorporated in and form a part of the Option Plan.
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5.
Except as set forth herein, the Option Plan shall remain unchanged and in full force and effect following the Amendment Date.
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* * * * *
I hereby certify that the foregoing First Amendment to the Griffin Industrial Realty, Inc. 2009 Stock Option Plan was duly adopted by the Board of Directors of Griffin Industrial Realty, Inc. on April 3, 2019.
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GRIFFIN INDUSTRIAL REALTY, INC.
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By:
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/s/ Anthony J. Galici
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Name:
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Anthony J. Galici
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Title:
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Vice President, Chief Financial Officer
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If you would like to reduce the costs incurred by our company in mailing proxy materials, the instructions above to vote using the Internet and, when prompted, indicate that you Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, 123,456,789,012.12345 TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. The Board of Directors recommends you vote FOR all the nominees listed below: 1. The election of seven directors to serve for a one-year term expiring at the 2020 annual meeting or until their successors are duly elected and qualified. Nominees David R. Bechtel For 0 0 0 0 0 0 0 For 0 Against 0 0 0 0 0 0 0 Against 0 Abstain 0 0 0 0 0 0 0 Abstain 0 For 0 Against 0 Abstain 0 01 3. Approval, on an advisory (non-binding) basis, of the compensation of Griffin's named executive officers as presented in Griffin's Proxy Statement. 02 Edgar M. Cullman, Jr. 0 0 0 03 Frederick M. Danziger 4. Approval of the First Amendment to the Griffin 2009 Stock Option Plan to extend the term of such plan. 04 Michael S. Gamzon 05 Jonathan P. May NOTE: Such other business as may properly come before the meeting or any postponement, continuation, or adjournment thereof. 06 Amy Rose Silverman 07 Albert H. Small, Jr. The Board of Directors recommends you vote FOR proposals 2, 3 and 4. 2. Ratification of the selection of RSM US LLP as Griffin's independent registered public accountants for fiscal 2019. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date 02 0000000000 1 OF 1 1 2 0000416625_1 R1.0.1.18 SHARES CUSIP # JOB #SEQUENCE # VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 05/13/2019. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 on 05/13/2019. Have your proxy card in hand when you call and then follow the instructions. John Sample 234567VOTE BY MAIL 1234567 1234567NY 11717. NAME THE COMPANY NAME INC. - COMMON THE COMPANY NAME INC. - CLASS A THE COMPANY NAME INC. - CLASS B THE COMPANY NAME INC. - CLASS C THE COMPANY NAME INC. - CLASS D THE COMPANY NAME INC. - CLASS E THE COMPANY NAME INC. - CLASS F THE COMPA N Y NAME INC. - 401 K CONTROL # → SHARES123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 x PAGE1 OF 2 GRIFFIN INDUSTRIAL REALTY, INC. ATTN: ANTHONY GALICI, VP CHIEF FINANCIAL OFFICER AND SECRETARY 204 WEST NEWBERRY ROAD BLOOMFIELD, CT 06002 Investor Address Line 1 Investor Address Line 2 Investor Address Line 3 Investor Address Line 4 Investor Address Line 5 8 8 8 1 1234 ANYWHERE STREET ANY CITY, ON A1A 1A1 234567 234567 234567 234567
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Annual Report, Notice & Proxy Statement is/ are available at www.proxyvote.com GRIFFIN INDUSTRIAL REALTY, INC. Annual Meeting of Stockholders May 14, 2019 2:00 PM ET This proxy is solicited by the Board of Directors The undersigned holder(s) of Common Stock of Griffin Industrial Realty, Inc. ("Griffin") hereby authorizes and appoints Frederick M. Danziger and Michael S. Gamzon, or either of them, as proxies with full power of substitution in each, to represent the undersigned and to vote, as designated on the reverse side of this proxy card, all of the shares of Common Stock of Griffin that the undersigned is/are entitled to vote at the Annual Meeting of Stockholders to be held at 2:00 PM local time, on May 14, 2019, at the DoubleTree by Hilton Hotel, 569 Lexington Avenue, New York, NY 10022 and any adjournment, continuation or postponement thereof. Such proxies are authorized to vote in their discretion (x) for the election of any person to the Board of Directors if any nominee named herein becomes unable to serve or for good cause will not serve, (y) on any matter that the Board of Directors did not know would be presented at the Annual Meeting by a reasonable time before the proxy solicitation was made, and (z) on such other business as may properly be brought before the meeting or any adjournment, continuation, or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder(s). If no such direction is made, this proxy will be voted in accordance with the Board of Directors' recommendations. Continued and to be signed on reverse side 0000416625_2 R1.0.1.18
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