UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
(Rule
14a-101)
INFORMATION
REQUIRED IN PROXY STATEMENT
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
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Filed by the Registrant ☒
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Filed by a Party other than the Registrant
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Section 240.14a-12
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PATRIOT TRANSPORTATION HOLDING, INC.
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(Name of Registrant as Specified
in its Charter)
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(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
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Date Filed:
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200 West Forsyth
Street, 7
th
Floor
Jacksonville,
Florida 32202
December 15,
2016
Dear Fellow
Shareholders:
It
is our pleasure to invite you to attend our Annual Meeting of Shareholders (“Annual Meeting”), which will be held
on Wednesday, January 25, 2017 at 10:00 a.m. E.S.T. at the River Club, Ortega Room, on the 34
th
floor of the Wells
Fargo Building, One Independent Drive, Jacksonville, Florida.
At
the Annual Meeting, we will elect directors to serve for the coming year and vote to ratify the Audit Committee’s selection
of our independent auditors. We will also vote on important corporate governance proposals.
We
also plan to report on our results and achievements during fiscal 2016 and our results for the first quarter of fiscal 2017.
I
hope that you will be able to attend.
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Sincerely,
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Thompson S. Baker II
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President and Chief Executive Officer
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200 West Forsyth
Street, 7
th
Floor
Jacksonville,
Florida 32202
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
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MEETING INFORMATION
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TIME AND DATE:
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10:00 a.m., E.S.T. on Wednesday, January 25, 2017
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LOCATION:
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River Club, Ortega Room, on the 34
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floor of the Wells Fargo Building, One Independent Drive, Jacksonville, Florida 32202
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Elect
the 5 director nominees listed in the accompanying proxy statement for a one-year term
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Ratify
the Audit Committee’s selection of the independent registered public accounting firm
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Approve, on an advisory basis, the Company’s
executive compensation
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RECORD
DATE
Shareholders of record as of the close of business on December 7, 2016 are entitled to vote at the Annual Meeting.
MATERIALS
This packet contains our Notice of Annual Meeting and Proxy Statement. A copy of our 2016 Annual Report, which is not a part of our proxy solicitation materials, is enclosed.
VOTING
Whether or not you plan to attend, it is important that your shares be represented and voted at the meeting. You can vote your shares in person at the Annual Meeting, or by completing, signing and dating your proxy card and returning it 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.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 25, 2017:
This
Notice of Annual Meeting and Proxy Statement and the 2016 Annual report are available on our website at www.patriottrans.com.
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John
D. Milton, Jr.
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Executive
Vice President,
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Chief
Financial Officer and Corporate Secretary
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December 15, 2016
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TABLE
OF CONTENTS
PROXY
STATEMENT SUMMARY
The
board of directors (the “Board” or “Board of Directors”) of Patriot Transportation Holding, Inc. (“Patriot”,
“we”, “us”, “our” or the “Company”) is soliciting proxies for the Annual Meeting
of Shareholders. You are receiving this proxy statement because you own shares of Patriot 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 purpose of this proxy statement is
to provide details about the matters being voted on at the Annual Meeting and information about the Company and our officers and
directors so that you may make informed voting decisions.
Separation
of the Company from FRP Holdings, Inc.
On
January 31, 2015, the Company began operating as an independent public company as a result of the spin-off from FRP Holdings,
Inc., formerly known as Patriot Transportation Holding, Inc. (NASDAQ- FRPH), which is referred to herein as the “Spin-off.”
The Spin-off was effected through a corporate reorganization, followed by the distribution by FRPH of all of the shares of common
stock of Patriot to the shareholders of FRPH. Each FRPH shareholder of record as of the close of business on January 30, 2015
received one share of Patriot common stock for every three shares of FRPH common stock held on such date. Patriot now owns and
operates the transportation business that was formerly a segment of FRPH. For more information regarding the Spin-off, you may
refer to our Information Statement, which is attached as Exhibit 99.1 to the Company’s Form 10, filed with the Securities
Exchange Commission on December 31, 2014, available at www.sec.gov.
Fiscal
Year 2016 Highlights
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Our
net income increased 71%
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Operating
profit increased by 39%
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Shareholders’
equity increased by 18%
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Compensation
Summary
We
encourage a pay-for-performance environment by linking cash incentive awards to the achievement of measurable business and individual
performance goals. Our compensation program is designed to motivate our executive officers to achieve positive short- and long-term
results for our shareholders. In fiscal year 2016, executive compensation was comprised of base salary, cash incentive bonus compensation,
option grants and perquisites. The amount of cash incentive compensation awarded was determined by the Company’s after-tax
return-on-capital employed (“ROCE”) for fiscal year 2016 and the achievement of individual performance objectives.
The graphs below depict the Company’s target compensation mix, which assumes the achievement of 100% of incentive-based
compensation, and the actual compensation mix for fiscal year 2016, which is based on actual performance in fiscal year 2016.
Corporate
Governance
Patriot
is committed to exercising good corporate governance practices and believes that our corporate governance policies promote the
long-term interests of our shareholders. The following highlights the Company’s key corporate governance practices for fiscal
year 2016:
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A
majority of our board of directors are independent directors.
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Independent
directors meet without management present.
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Risk
oversight is managed by the full board of directors.
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Our
board of directors and committees conduct annual self-evaluations.
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We
have adopted a Financial Code of Ethical Conduct and a Code of Business Conduct and Ethics.
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For
a more comprehensive discussion of our corporate governance practices, see the section entitled “Board of Directors and
Corporate Governance” in this Proxy Statement.
Our
Director Nominees
You
are being asked to vote on the election of the following 5 directors. The nominees for election of directors at the Annual Meeting
will be elected by a plurality of the votes cast at the meeting. Detailed information about each director nominee’s background
can be found in the section entitled “Our Board of Directors” in this Proxy Statement.
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Name
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Age
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Director
Since
(1)
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Independent
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Committee
Membership
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AC
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CC
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CG
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E
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John
E. Anderson
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71
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1989
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Yes
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M
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C
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M
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Edward
L. Baker
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81
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1986
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No
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M
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Thompson
S. Baker II
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58
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1994
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No
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M
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Luke
E. Fichthorn III
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75
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1989
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Yes
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C
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M
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M
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Charles
D. Hyman
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57
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2016
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Yes
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M
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M
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C
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AC:
Audit Committee
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E:
Executive Committee
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CC:
Compensation Committee
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C:
Chair
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CG:
Nominating and Corporate Governance Committee
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M:
Member
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(1)
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The
dates reflected in this column are the dates on which director was elected as a director
of FRPH prior to the Spin-off. Each director was elected to serve as a director of the
Company at the 2016 Annual Meeting, except for Mr. Hyman, who was appointed by the Board
to fill a vacancy on the Board on July 27, 2016.
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Proposals
Being Presented at the Annual Meeting
At
the Annual Meeting, shareholders will be asked to vote on the election of the five director nominees, the ratification of the
Audit Committee’s selection of the independent registered public accounting firm, to hold an advisory vote on executive
compensation (the “say-on-pay” vote), and to conduct such other business as may properly come before the Annual Meeting.
For a detailed discussion of each proposal, please see the section entitled “Proposals” in this Proxy Statement.
THE
MEETING
We
hope you are able to attend the meeting in person. The meeting will be held at 10:00 a.m. on Wednesday, January 25, 2017 at the
River Club, Ortega Room, on the 34
th
floor of the Wells Fargo Building, One Independent Drive, Jacksonville, Florida.
You may be required to show proof of ownership of Patriot stock and a form of photo identification prior to admission 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. Please note that no cameras, recording equipment, electronic devices, large bags, briefcases, or packages
will be permitted in the meeting. To ensure a safe and productive atmosphere, we reserve the right to adopt other rules and to
implement additional security measures for the meeting.
VOTING
Shareholders
Entitled to Vote
Each
share of our common stock outstanding as of the close of business on December 7, 2016, the record date, is entitled to one vote
at the Annual Meeting on each matter brought before the meeting. On that date, there were 3,289,353 shares of common stock issued
and outstanding.
Most
Patriot shareholders hold their shares through a stockbroker, bank, trustee, or other nominee rather than directly in their own
name. As summarized below, there are some distinctions between shares held of record and those owned beneficially:
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Shareholder
of Record
– If your shares are registered directly in your name with Patriot’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
Patriot. As the shareholder of record, you have the right to grant your voting proxy
directly to Patriot or to vote in person at the meeting.
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Beneficial
Owner
– If your shares are held in a stock brokerage account, by a bank, trustee,
or other nominee, you are considered the beneficial owner of shares held in street name
and these proxy materials are being forwarded to you by your broker, trustee, or nominee
who is considered the shareholder of record of those shares. As the beneficial owner,
you have the right to direct your broker, trustee or nominee on how to vote and are also
invited to attend the meeting. However, because you are not the shareholder of record,
you may not vote these shares in person at the meeting. Your broker, trustee, or nominee
is obligated to provide you with a voting instruction card for you to use.
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Profit
Sharing Plan and Trust
– If your shares are held in your account in the Company’s
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.
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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.
Quorum
A
quorum is the minimum number of shares that must be represented in order 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 shareholder are not voted with
respect to a particular proposal because (1) the broker has not received voting instructions from the shareholder or (2) the broker
lacks discretionary voting power to vote such shares.
Voting
Methods
If
you hold shares directly as the shareholder of record, you may vote by granting a proxy or in person at the Annual Meeting. If
you hold shares beneficially in street name, you may vote by submitting voting instructions to your broker or nominee. If you
own shares beneficially as a participant in the Company’s 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.
You
are entitled to 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.
Required
Votes
Each
proposal being voted on at the Annual Meeting requires a certain percent of votes “FOR” the proposal for approval.
For 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 Company’s profit sharing plan will be voted by
the trustee as described above. 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 the advisory proposals 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.
Below
is a breakdown of the votes required for each proposal.
Proposal
1: The Election of Directors.
The nominees for election of 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.
Proposal
2: Ratification of Independent Registered Public Accounting Firm.
The shareholders will vote on an advisory basis to ratify
the Audit Committee’s selection of the independent registered public accounting firm. The purpose of this proposal is to
provide the Board with feedback from shareholders regarding the Audit Committee’s appointment of Hancock Askew as the Company’s
auditors.
Proposal
3: Advisory Vote on Executive Compensation.
The shareholders will vote on an advisory basis to approve our executive compensation
program. The purpose of this “say on pay” proposal is to provide the Board with feedback from shareholders regarding
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. 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.
PROXY
MATERIALS
The
Notice of Annual Meeting and Proxy Statement and the 2016 Annual Report are available on our website at www.patriotrans.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 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. It eliminates 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 John D. Milton, Jr. at (904) 858-9100 .
Cost
of Proxy Solicitation
Patriot
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.
BOARD
OF DIRECTORS & CORPORATE GOVERNANCE
The
following sections provide an overview of Patriot’s corporate governance standards and processes, including the independence
and other criteria we use in selecting our director nominees, our Board leadership structure, risk oversight, shareholder communications
and responsibilities of the Board and its Committees.
Our
Board of Directors
Listed
below are five director nominees, four of whom have served as a Board member for the Company since the Spin-off and for FRPH prior
to the Spin-off. The Board is comprised of a group of leaders in their respective fields. Many directors have senior leadership
experience and board and committee experience with public companies. In these positions, they have gained significant and diverse
management experience.
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Name
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Current
Position
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Age
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History
With The Company
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John
E. Anderson
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Director
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71
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Director of FRPH: 1989-2004 and 2005- Spin-off
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President and Chief Executive Officer of FRPH: 1989-2008
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Edward
L. Baker
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Director
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81
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Director
of FRPH: 1986- Spin-off
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Chairman
Emeritus FRPH- 2008- Spin-off
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Chairman
of the Board of FRPH: 1986-2007
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Thompson
S. Baker II
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President
Chief
Executive Officer
Chairman
of the Board
Director
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58
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Director
of FRPH: 1994- Spin-off
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President
of FRPH: 2010- May 2015
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Chief
Executive Officer of FRPH: 2010- present
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Luke
E. Fichthorn III
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Director
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75
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● Director of FRPH: 1989- Spin-off
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Charles
D. Hyman
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Director
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57
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● Director
of PATI since July 27, 2016.
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You
will be asked to vote on the election of the members of the Board of Directors at the Annual Meeting. The Board and the Nominating
and Corporate Governance Committee believes that each director nominee brings a strong and unique set of attributes, experience,
leadership and skills in areas of importance to our Company that create a well-balanced, collaborative team that serves the Company
and its shareholders well. The biographies below describe each director nominee and his qualifications that led the Nominating
and Corporate Governance Committee to nominate these individuals.
John
E. Anderson, age 71, has served as a director of the Company since December 3, 2014. Mr. Anderson served as President and Chief
Executive Officer of FRP Holdings, Inc. from 1989 to 2008 and as a director from 1989 to 2003, and again from October 2005 to
January 2015. Mr. Anderson’s many years as an executive officer and director of a public company demonstrates his leadership abilities
and provides the Board with the benefit of his extensive knowledge regarding the Company and the transportation industry.
Edward
L. Baker, age 81, was elected as a director of the Company on December 3, 2014. Mr. Baker served as a director of FRP Holdings,
Inc. from 1986 to January, 2015 and served as Chairman Emeritus from 2008 to 2015. He served as Chairman of the Board of Florida
Rock Industries, Inc. from February 1986 to November 2007. Mr. Baker’s many years of service as a director and his service as
Chairman of Florida Rock Industries provide the Board with valuable insights regarding the Company and its business.
Thompson
S. Baker II, age 58, has served as a director and the President and Chief Executive Officer of the Company since December 3, 2014.
Mr. Baker has served as a director of FRP Holdings, Inc. since 1994 and currently also serves as the Chief Executive Officer.
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.
Luke
E. Fichthorn III, age 75, was elected as a director of the Company on December 3, 2014. Mr. Fichthorn is currently a partner in
Twain Associates, LLC, a private financial consulting firm. From 1989 to January, 2015, Mr. Fichthorn served as a director for
FRP Holdings, Inc. In the past, Mr. Fichthorn previously served as a director and the Chief Executive Officer of Bairnco Corporation.
Mr. Fichthorn received his Master’s Degree in Business Administration from Harvard Business School and has served as a financial
consultant and audit committee member for several public companies. Mr. Fichthorn’s financial acumen and extensive investment
banking and business experience provide the Board with valuable perspectives on strategic decisions.
Charles
D. Hyman, age 58, was elected as a director of the Company on July 27, 2016. Mr. Hyman is the president of Charles D. Hyman &
Company, a portfolio management company, and has also served as a director for Fidus Corporation since June 2011. Mr. Hyman brings
to the Board extensive business experience and financial acumen.
Family
Relationships
Thompson
S. Baker II, the President, Chief Executive Officer and Chairman of the Board is the son of Edward L. Baker, a director of the
Company.
Director
Attendance at Annual Meeting of Shareholders
It
is a policy of the Company that our directors are required to attend the Annual Meeting of Shareholders unless extenuating circumstances
prevent them from attending. All directors expect to be present at this year’s Annual Meeting of Shareholders.
Director
Independence
Pursuant
to Nasdaq listing standards, the Board is required to evaluate each director to determine whether he or she qualifies as an “independent
director.” 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 has determined that three of our five existing directors and director nominees (Messrs. John E. Anderson, Luke E. Fichthorn
III, Charles D. Hyman) 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.
Independent
directors regularly meet in executive sessions without management and may select a director to facilitate the meeting. During
fiscal 2016, the independent directors met after each Board meeting, and Mr. Anderson presided over executive sessions of the
independent directors.
Nominating
Process
The
Nominating and Corporate Governance Committee
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 above, and recommends one or more of such individuals for appointment to the
Board.
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 below 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.
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 looks for nominees with diverse attributes and skills that will complement the existing skills and experience
of our directors and provide an overall balance of diversity of perspectives, backgrounds and experiences.
Nominees Proposed
by Shareholders
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 a minimum, 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
Patriot Transportation Holding, Inc.
200 W. Forsyth Street, 7th Floor
Jacksonville, Florida 32202
In order for an individual
proposed by a shareholder to be considered by the Nominating Committee for recommendation as a director nominee at the Annual Meeting
of Shareholders to be held in early 2018, the Corporate Secretary must receive the proposal no later than 5 p.m. Eastern Time on
September 30, 2017. Such proposals must be sent via registered, certified or express mail. The Corporate Secretary will send properly
submitted shareholder proposed nominations to the Nominating Committee chair for consideration at a future Nominating 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
Pursuant to the Company’s
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 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.
Board Leadership
Thompson S. Baker II serves
as the Chairman of the Company’s Board of Directors. Mr. Baker has served as the Company’s President and Chief Executive
Officer since the Spin-off and served as the President and Chief Executive Officer of FRPH prior to the Spin-off. Mr. Baker is
also currently serving
as a director and the Chief Executive Officer for FRPH. Mr. Baker served as the President of the Florida
Rock Division of Vulcan Materials Company from 2007 until 2010. From 1991 to 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.
The Board of Directors does
not have a policy as to whether the positions are held by separate persons, or whether the position of Chairman of the Board must
be held by an independent director. When the Chairman of the Board 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.
Mr. Anderson 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 below, 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 four
committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, and the Executive
Committee. The membership during fiscal 2016 and the function of each Committee are described below.
During fiscal 2016, the Board
of Directors held five meetings, the Audit Committee held four meetings, the Compensation Committee held two meetings and the Nominating
and Corporate Governance Committee held three meetings. During fiscal 2016, 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. With the exception of one director’s absence at one Board meeting, all of our directors attended all of the meetings
of the Board and committees on which the director served.
The following table shows the
composition of the committees of the Board of Directors during fiscal year 2016. Except for the Executive Committee, each of the
committees of the Board is composed exclusively of independent directors. On July 14, 2016, Mr. Robert H. Paul III, former member
of the Board, passed away, which resulted in a Board vacancy. At the time of his death, Mr. Paul served as a member of the Audit
Committee and the Nominating and Corporate Governance Committee and as chairman of the Compensation Committee. On July 27, 2016,
Mr. Hyman was appointed to the Board and was subsequently appointed to serve as a member of the Audit Committee and the Compensation
Committee and as chairman of the Nominating and Corporate Governance Committee.
|
Director
|
Audit
|
Compensation
|
Nominating &
Corporate Governance
|
Executive
|
|
John E. Anderson
(1)
|
X
|
X
|
X
|
|
|
Edward L. Baker
|
|
|
|
X
|
|
Thompson S. Baker II
|
|
|
|
X
|
|
Luke E. Fichthorn III
|
X
|
X
|
X
|
|
|
Robert H. Paul III
(2)
|
X
|
X
|
X
|
|
|
John D. Milton, Jr.
(3)
|
|
|
|
X
|
|
Charles D. Hyman
(4)
|
X
|
X
|
X
|
|
X – Committee
Member * – Committee Chair
|
|
(1)
|
Prior to July 27, 2016, Mr. Anderson served as the chairman
of the Nominating and Corporate Governance Committee. Mr. Anderson was appointed as the chairman of the Compensation Committee
on July 27, 2016.
|
|
|
(2)
|
Prior to his passing on July 14, 2016, Mr. Paul served
as the chairman of the Compensation Committee.
|
|
|
(3)
|
Mr. Milton is an ex officio member of the Executive Committee.
Mr. Milton serves as the Executive Vice President and Chief Financial Officer of the Company.
|
|
|
(4)
|
Mr. Hyman was appointed as a member of the Audit Committee
and Compensation Committee and as chairman of the Nominating and Corporate Governance Committee on July 27, 2016.
|
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 aud
itor.
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, Luke E Fichthorn III, qualifies as an “audit committee
financial expert” within the meaning of SEC regulations.
Compensation
Committee
The primary functions of the
Compensation Committee are to discharge the responsibilities of the Board of Directors relating to the compensation of the Company’s
executive officers and 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.
|
None of the members of the
Compensation Committee was an officer or employee of the Company or any of its subsidiaries during the 2016 fiscal year or 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 officer serving on our Board of Directors or Compensation
Committee.
The charter of the Compensation
Committee (as adopted on December 3, 2014) has been formally adopted by the Company and is available at www.patriottrans.com under
Corporate Governance.
Nominating and
Corporate Governance Committee
The primary 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) has been formally adopted by the Company and is available at
www.patriottrans.com under Corporate Governance.
Executive Committee
Edward L. Baker, Thompson S.
Baker II and John D. Milton, Jr. (ex officio), comprised the Executive Committee during fiscal 2016. To the extent permitted by
law, the Executive Committee exercises the powers of the Board between meetings of the Board of Directors.
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 and the Code of Business Conduct and Ethics (as adopted on January 28, 2015) are available at www.patriottrans.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 and Committee Self-Assessment
It is a policy of the Company
that the Board of Directors and each committee, under the supervision of the Nominating and Corporate Governance Committee, conduct
a self-evaluation of their performance at least annually. The self-evaluation process serves to assess the Board’s and the
committees’ performance and effectiveness during the previous fiscal year. Each member of the Board and each committee member
completes a questionnaire that addresses various aspects of the Board or committee’s meetings, membership, culture, relationship
with management and other committees and role and responsibilities and solicits recommendations for the upcoming year.
Communication with Directors
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, Patriot Transportation Holding, Inc., c/o Corporate
Secretary, 200 W. Forsyth Street, 7th Floor, Jacksonville, Florida 32202.
NON-EMPLOYEE DIRECTOR COMPENSATION
Our
non-employee directors receive cash compensation, as well as equity compensation in the form of Patriot stock options. The table
below summarizes director compensation arrangements for the Board and for each committee.
|
All Non-Employee Directors
|
|
Annual Retainer
|
$15,000
|
|
Fee Per Meeting Attended
|
$1,500
|
|
Shares to be Granted in Fiscal 2017
|
4,200
|
|
Shares Granted in Fiscal 2016
|
4,200
|
|
Audit Committee
|
|
Annual Fee: Chairman
|
$10,000
|
|
Annual Fee: Member
|
$5,000
|
|
Meeting Fees: Chairman
(1)
|
$1,500
|
|
Meeting Fees: Member
(1)
|
$1,000
|
|
Compensation Committee
|
|
Annual Fee: Chairman
|
$5,000
|
|
Annual Fee: Member
|
$1,000
|
|
Meeting Fees: Chairman
|
$1,500
|
|
Meeting Fees: Member
|
$1,000
|
|
Other
Committees
|
|
Annual Fee: Chairman
|
$2,000
|
|
Annual Fee: Member
|
$1,000
|
|
Meeting Fees: Chairman
|
$1,500
|
|
Meeting Fees: Member
|
$1,000
|
|
(1)
|
The Audit Committee members receive no meeting
fees for the four regularly scheduled quarterly meetings; meeting fees apply only to the extent there are Audit Committee meetings
other than and in addition to the four regularly scheduled quarterly meetings.
|
Fiscal 2016 Director Compensation
The following table summarizes
the compensation paid to each of our non-employee directors during fiscal 2016 in connection with his service as a director. All
amounts reflect the dollar value of the compensation.
|
Name
|
Fees
Paid
in Cash
|
Stock
Awards
(2)(3)
|
Option
Awards
|
Other
Compensation
|
Total
|
|
Edward
L. Baker
(1)
|
$70,000
|
$40,327
|
—
|
$51,535
|
$161,862
|
|
John
E. Anderson
|
$36,000
|
$91,602
|
—
|
—
|
$127,602
|
|
Luke
E. Fichthorn III
|
$38,500
|
$91,602
|
—
|
—
|
$130,102
|
|
Charles
D. Hyman
|
$5,333
|
$45,150
|
—
|
—
|
$50,483
|
|
Robert
H. Paul III
|
$31,667
|
$91,602
|
—
|
—
|
$123,269
|
|
|
(1)
|
Mr. Baker serves as the Chairman Emeritus and as a director of the
Company. Mr. Baker does not receive any director fees; his compensation arrangement with the Company is related to his service
as the Chairman Emeritus. In fiscal 2016, Mr. Baker received a base salary of $70,000 and $51,535 in other compensation, which
includes 401(k) matching, medical reimbursement, life insurance and other perquisites available to our executive officers. On January
27, 2016, Mr. Baker was awarded 1,849 shares of the Company’s common stock.
|
|
|
(2)
|
On January 27, 2016. Messrs. Anderson, Fichthorn and Paul were awarded
4,200 shares, and Mr. Baker was awarded 1,849 shares, of the Company’s common stock. The value was determined using the closing
price of the Company’s common stock on the Nasdaq Stock Market on January 27, 2016, which was $21.81. On July 27, 2016, Mr.
Hyman was awarded 2,100 shares of the Company’s common stock. The value was determined using the closing price of the Company’s
common stock on the Nasdaq Stock Market on July 27, 2016, which was $21.50.
|
|
|
(3)
|
For stock awards, the aggregate grant date fair value was computed
in accordance with FASB Topic 718(Column (c)).
|
Non-Employee Director Stock Options
Currently, none of our non-employee
directors holds any options to purchase stock of the Company.
SECURITIES OWNERSHIP
Directors, Director Nominees and Executive Officers
The following table shows the
number of shares of the Company’s common stock beneficially owned by each of the Company’s directors, director nominees
and executive officers of the Company as a group as of November 15, 2016.
|
Name of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
(1)
|
Percentage of Class
|
|
James N. Anderson IV
|
284
|
*
|
|
John E. Anderson
|
30,333
|
*
|
|
Edward L. Baker
|
169,133
(2)
|
5.14%
|
|
Thompson S. Baker II
|
185,942
(3)
|
5.64%
|
|
Luke E. Fichthorn III
|
37,481
(4)
|
1.14%
|
|
Charles D. Hyman
|
4,667
|
*
|
|
John D. Klopfenstein
|
8,215
|
*
|
|
John D. Milton, Jr.
|
42,845
|
1.29%
|
|
Robert E. Sandlin
|
21,908
|
*
|
|
Total:
|
359,717
(5)
|
10.70%
|
* Less than 1%
|
|
(1)
|
The preceding table includes the following shares held under the
Company’s profit sharing plan and shares underlying options that are exercisable within 60 days of November 15, 2016.
|
|
Name of Beneficial Owner
|
Shares Under
Profit Sharing Plan
|
Shares Under Option Exercisable Within 60 Days
|
|
James N. Anderson IV
|
0
|
241
|
|
John E. Anderson
|
0
|
0
|
|
Edward L. Baker
|
0
|
0
|
|
Thompson S. Baker II
|
7
|
7,691
|
|
Luke E. Fichthorn III
|
0
|
0
|
|
Charles D. Hyman
|
0
|
0
|
|
John D. Klopfenstein
|
3,602
|
4,513
|
|
John D. Milton, Jr.
|
0
|
42,845
|
|
Robert E. Sandlin
|
4,077
|
17,681
|
|
|
(2)
|
Mr. Baker’s reported ownership also includes 141,091 shares
held in a trust for the benefit of Edward L. Baker and his family members for which Edward L. Baker serves as trustee. Mr. Baker
disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. Mr. Baker’s reported
ownership also includes 240 shares held in the Ann Baker Trust, for which Mr. Baker serves as trustee.
|
|
|
(3)
|
Includes 141,091 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 733 shares
directly owned by Mr. Baker’s spouse, 2,193 shares held for the benefit of Mr. Baker’s minor children, 13 shares held
in his Company’s profit sharing plan and his employee stock purchase plan and 240 shares held in the Ann Baker Trust, for
which Mr. Baker serves as trustee.
|
|
|
(4)
|
Includes 100 shares owned by the spouse of Mr. Fichthorn as to which
he disclaims any beneficial interest and 3,000 shares owned by the M/B Disbro Trust, of which Mr. Fichthorn is a co-trustee and
income beneficiary.
|
|
|
(5)
|
The beneficial ownership for Messrs. Edward L. Baker and Thompson
S. Baker II each include 141,091 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.
|
Shareholders Holding More Than Five Percent
of Common Stock
The following table shows the
number of shares of the Company’s common stock beneficially owned by each person (or group of people) known by the Company
to beneficially own 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 15, 2016.
|
Name and Address
of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percentage of Class
|
|
Edward L. Baker
John D. Baker II
Thompson S. Baker II
Edward L. Baker II
200 W. Forsyth Street, 7th Floor
Jacksonville, FL 32202
|
169,133
(1)
458,249
(1)
187,844
(1)
403,591
(1)
|
5.14%
13.39%
5.69%
12.27%
|
|
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 5
th
Avenue #10-D
New York, NY 10029
|
304,637
|
9.26%
|
|
Royce & Associates, LLC
1414 Avenue of the Americas
New York, NY 10019
|
344,697
(2)
|
10.48%
|
|
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202
|
293,089
(3)
|
8.91%
|
|
PVAM Perlus Microcap Fund L.P.
5
th
Floor, 37 Esplande
St. Hellier Jersey
Channel Islands JE1 2TR
PVAM Holdings Ltd.
600 Montgomery Street
6
th
Floor
San Francisco, CA 94111
Pacific View Asset Management (UK) LLP
North Hall Farm Road
North Hall Road
Quendon, Essex, United Kingdom CB113XP
|
169,419
(4)
|
5.15%
|
|
|
(1)
|
The beneficial ownership for Messrs. John D. Baker II and Edward L. Baker II includes 371,158 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 the tables in the section of this Proxy Statement entitled “Directors, Director Nominees
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 SEC on January 20, 2016, Royce & Associates, LLC reported
that, as of December 31, 2015, it had sole voting and dispositive power with respect to 344,697 shares of Patriot common stock.
|
|
|
(3)
|
In a Schedule 13G filed with the SEC on February 10, 2016, T. Rowe Price Associates, Inc. reported
that, December 31, 2015, it had sole voting power with respect to 29,006 shares of the Company’s common stock and sole dispositive
power with respect to 293,089 shares of the Company’s common stock, which number includes 262,233 shares of the Company’s
common stock to which T. Rowe Price Small Cap Value Fund, Inc. has sole voting power.
|
|
|
(4)
|
In a Schedule 13G filed with the SEC on October 1, 2015, PVAM Perlus
Microcap Fund L.P., PVAM Holdings Ltd. and Pacific View Asset Management (UK) LLP reported that, as of September 25, 2015, each
had shared voting and dispositive power with respect to 169,419 shares of common stock of the Company.
|
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.
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, 2016 (the “named executive officers”). Each of our named executive officers has served
as an employee of the Company for the past five years, and in most cases, for many years.
|
Name
|
Title
|
Age
|
Position Since
(1)
|
|
Thompson S. Baker II
|
President and CEO
|
58
|
10/1/2010
|
|
John D. Milton, Jr.
|
Executive Vice President and CFO
|
71
|
6/16/2008
|
|
Robert E. Sandlin
|
Vice President
|
55
|
2/16/2005
|
|
John D. Klopfenstein
|
Controller and Chief Accounting Officer
|
53
|
3/1/2003
|
|
James N. Anderson IV
|
VP of Safety and Risk Management
(2)
|
54
|
2/16/2013
|
|
|
(1)
|
The dates reflected in this column are the dates on which each named
executive officer was appointed to his position with FRPH prior to the Spin-off. Each named executive officer was appointed to
his current position with the Company on December 3, 2014.
|
|
|
(2)
|
Mr. Anderson has also served as the Vice President of Safety for
Florida Rock & Tank Lines, Inc. since 2000.
|
Executive Summary
Linking Compensation
to Performance
The objective of our compensation
program is to attract, retain and motivate talented leaders who will act in support our strategic objectives and core values to
maximize shareholder value. We encourage a pay-for-performance environment by linking cash incentive awards to the achievement
of measurable business and individual performance goals. Our compensation program is designed to motivate our executive officers
to achieve positive short- and long-term results for our shareholders. For fiscal 2016, cash-based incentive compensation comprised
approximately 23% of the actual total compensation of our named executive officers.
Total Shareholder
Return
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 February 2, 2015 and ending on September 30, 2016.
The graph assumes that $100 was invested on February 2, 2015 in the Company’s common stock and in each of the indices and
assumes the reinvestment of any dividends.
|
|
2/2015
|
3/2015
|
6/2015
|
9/2015
|
12/2015
|
3/2016
|
6/2016
|
9/2016
|
|
Patriot
|
$100
|
$109
|
$107
|
$105
|
$98
|
$88
|
$85
|
$90
|
|
NASDAQ Composite
|
$100
|
$106
|
$108
|
$100
|
$108
|
$106
|
$105
|
$116
|
|
NASDAQ Transportation
|
$100
|
$105
|
$97
|
$92
|
$92
|
$96
|
$86
|
$94
|
The Role of Our Compensation Committee
Our Compensation Committee
establishes and oversees our compensation and employee benefits programs and approves the elements of total compensation for the
executive officers. In fiscal year 2016, Messrs. John E. Anderson and Luke E. Fichthorn III served as members of the Compensation
Committee, and until his passing on July 14, 2016, Mr. Robert H. Paul III served as the chairman. On July 27, 2016, Mr. Charles
D. Hyman was appointed as the chairman of the Compensation Committee. Each member of the Compensation Committee qualifies as (i)
an independent director under the listing standards of The Nasdaq Stock Market and (ii) a non-employee director for purposes of
Rule 16b-3 of the Exchange Act. 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).
The Compensation Committee
makes all final decisions regarding the compensation of our executive officers. When considering individual compensation for executive
officers, the Committee takes many factors into account, including the individual’s performance, tenure, experience and responsibilities;
the performance of the Company; retention considerations; the recommendations of management; the individual’s historic compensation;
and the results of the shareholder advisory vote on executive compensation.
Our Philosophy and Objectives
We Focus on Strategic Objectives.
Our compensation
decisions are driven by Patriot’s business strategy. It 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. We intend
that our
compensation decisions will attract and retain leaders and motivate them to achieve Patriot’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. 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 Patriot’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.
Variable Performance-Based Pay as a Percentage
of Potential Compensation.
The Compensation Committee believes that both long and short term compensation of executive officers
should correlate to the achievement of the Company’s financial objectives.
Benchmarking
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 Compensation 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.
“Say on Pay” Advisory Vote on Executive
Compensation
We have included a non-binding
advisory vote on our executive compensation program (also referred to as a “say on pay” proposal) in our Proxy Statement
this year. The Compensation Committee believes that the say on pay vote is important to solicit shareholder feedback on our compensation
approach. We value the opinions of our shareholders and will consider the outcome of the 2016 say on pay vote when designing our
compensation programs and policies and making compensation decisions.
Compensation Components
Our compensation program consists
of several forms of compensation: base salary, cash incentive bonuses, equity compensation and other benefits and perquisites.
Base Salary
Base pay is a critical element
of executive compensation because it provides executives with a base 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 Compensation Committee members regarding individual performance and internal
pay equity considerations.
Pursuant to the Transition
Services Agreement, 50% of the base salaries for Messrs. Baker, Milton and Klopfenstein is attributable to FRPH and 50% is attributable
to Patriot. The base salaries for Messrs. Baker, Milton and Klopfenstein set forth throughout this Proxy Statement for fiscal year
2016 and prior years reflects only the portion of their executive compensation awards attributable to Patriot or the transportation
segment of FRPH, as applicable. Messrs. Sandlin’s and Anderson’s current employment with the Company (and former employment
with FRPH) relates solely to the transportation business. As such, 100% of the base salaries for Messrs. Sandlin and Anderson are
attributable to Patriot for fiscal year 2016. Accordingly, the information relating to the base salaries for Messrs. Sandlin and
Anderson set forth throughout this Proxy Statement for fiscal year 2016 and prior years reflects the their total compensation awards
for each fiscal year.
We set base salaries
on a calendar year basis. The following table reflects the base salaries for our named executive officers in 2016 and 2017, as
well as the percentage by which each named executive officer’s base salary increased in 2017.
|
Name and Title
|
2016 Base
Salary
|
2017 Base
Salary
|
% Increase
from 2016
|
|
Thompson S. Baker II, President and CEO
(1)
|
$216,300
|
$222,789
|
3%
|
|
John D. Milton, Jr., Executive Vice President and CFO
(1)
|
$100,000
|
$103,000
|
3%
|
|
Robert E. Sandlin, Vice President
|
$288,750
|
$300,300
|
4%
|
|
John D. Klopfenstein, Controller and Chief Accounting Officer
(1)
|
$98,979
|
$101,948
|
3%
|
|
James N. Anderson IV, VP of Safety and Risk Management
|
$160,000
|
$164,800
|
3%
|
|
|
(1)
|
In addition to the base salaries reflected in this table, Messrs. Baker,
Milton and Klopfenstein receive a base salary in the respective amounts shown this table in connection with their employment with
FRPH.
|
Cash Incentive
Compensation
The Patriot Transportation
Holding, Inc. 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 determined by the Compensation Committee and are tied to measures of operating performance rather than appreciation
in stock price.
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 Company’s net income excluding the after-tax cost of financing,
divided by its total monthly average capital employed. The annual bonus pool is determined by the Company’s achievement of
a target level of ROCE. Each named executive officer’s cash bonus award is subject to the achievement of individual performance
goals related to the strategic objectives of the Company.
Historically, and prior to
the Spin-off, cash incentive compensation awarded to Messrs. Baker, Milton and Klopfenstein as a component of their compensation
from FRPH was based on performance goals of the real estate and transportation segments of the FRPH. As a result of the Spin-off,
Messrs. Baker, Milton and Klopfenstein each became eligible to receive a cash bonus from FRPH if the real estate performance goals
were met and a cash bonus from Patriot if transportation-related performance goals were met. Information relating to cash bonuses
awarded to Messrs. Baker, Milton and Klopfenstein set forth throughout this Proxy Statement for fiscal year 2016 and previous years
reflects only cash bonuses awards relating to the performance of Patriot or the transportation segment of FRPH, as applicable.
The following table describes
the performance objectives and potential bonuses for the named executive officers for fiscal years 2016 and 2017.
|
Name
|
Year
|
Potential Bonus
as a % of Salary
|
Performance Targets
|
|
Thompson S. Baker II
President & CEO
|
2017
|
100%
|
Achievement of a targeted level of ROCE and individual performance objectives
(1)(2)(3)(4)
|
|
2016
|
100%
|
Achievement of a targeted level of ROCE and individual performance objectives
(1)(2)(3)
|
|
John D. Milton, Jr.
Executive VP & CFO
|
2017
|
100%
|
Achievement of a targeted level of ROCE and individual performance objectives
(1)(2)(3)
|
|
2016
|
100%
|
Achievement of a targeted level of ROCE and individual performance objectives
(1)(2)(3)
|
|
Robert E. Sandlin
Vice President
|
2017
|
110%
|
Achievement of a targeted level of ROCE and individual performance objectives
(1)(2)
|
|
2016
|
110%
|
Achievement of a targeted level of ROCE and individual performance objectives
(1)(2)
|
|
John D. Klopfenstein
Controller and Chief Accounting Officer
|
2017
|
50%
|
Achievement of a targeted level of ROCE and individual performance objectives
(1)(2)(3)
|
|
2016
|
50%
|
Achievement of a targeted level of ROCE and individual performance objectives
(1)(2)(3)
|
James N. Anderson IV
VP of Safety and Risk Management
|
2017
|
70%
|
Achievement of a targeted level of ROCE and individual performance objectives
(1)(2)
|
|
2016
|
60%
|
Achievement of a targeted level of ROCE and individual performance objectives
(1)(2)
|
|
|
(1)
|
Named executive officers are or were eligible to receive a bonus up to the
specified percentage of his base salary if the Company achieves a specified level of after-tax return on capital employed (“ROCE”).
If after-tax ROCE exceeds the threshold level but is less than the target level, the bonus is prorated. For 2016, the threshold
and target after-tax ROCE were 9.5% and 12.5% respectively, and for 2017, 9% and 12% respectively. Messrs. Sandlin and Anderson
are eligible to earn an additional 10% of their respective eligible bonuses (which is included in the bonus percentages disclosed
above) upon the achievement of an after-tax ROCE of 13%. Capital employed excludes the effect of prepaid insurance premiums to
a captive insurer.
|
|
|
(2)
|
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 was effective for the applicable year.
|
|
|
(3)
|
In addition to their bonus eligibility relating
to the Company’s ROCE, Messrs. Baker, Milton and Klopfenstein were also eligible to receive a bonus up to the respective
percentages shown in this table based on the performance of FRPH.
|
Cash-based incentive compensation
comprises a significant portion of the potential total compensation of the named executive officers. The Company’s target
cash incentive compensation for fiscal year 2016, which assumes the achievement of 100% of performance objectives, was approximately
39% of total executive compensation awards. In fiscal year 2016, cash incentive compensation comprised approximately 23% of actual
total compensation of the named executive officers.
Stock Options
Under our compensation program,
executive officers are eligible to receive stock option grants under the Patriot Transportation Holding, Inc. Equity Incentive
Plan (“Equity Incentive Plan”). We believe that long-term equity incentives motivate executives to make decisions that
focus on long-term growth, thereby increasing shareholder value, and serve to 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.
The table below shows the following
option awards approved by the Compensation Committee for fiscal 2016 and 2017. In making these grants, the Compensation Committee
considered each executive officer’s performance, total compensation package, value to the Company and prior stock option
grants.
|
Name
|
2016 Option Grant
|
2017 Option Grant
|
|
Thompson S. Baker II
(1)
President & CEO
|
9,365
|
13,130
|
|
John D. Milton, Jr.
(1)
Executive VP & CFO
|
7,220
|
10,975
|
|
Robert E. Sandlin
Vice President
|
11,511
(2)(3)
|
13,130
|
|
John D. Klopfenstein
(1)
Controller and Chief Accounting Officer
|
2,530
|
3,545
|
|
James N. Anderson IV
VP of Safety and Risk Management
|
1,206
(2)
|
—
|
|
|
(1)
|
Following the Spin-off, Messrs. Baker, Milton and Klopfenstein receive stock
option grants from Patriot and FRPH as a component of their executive compensation.
|
|
|
(2)
|
For fiscal 2016, Messrs. Sandlin and Anderson received incentive-based compensation
in the form of stock options having a Black-Scholes value equal to 10% of their respective base salaries. Mr. Sandlin was eligible
to receive up to 3,156 options and Mr. Anderson was eligible to receive up to 1,773 options upon the achievement of their respective
goals set forth in the section entitled “Compensation Discussion and Analysis – Compensation Components- Cash Incentive
Compensation” above. In fiscal 2016, the Company achieved 68% of the target ROCE; therefore 2,146 of Mr. Sandlin’s
options and 1,206 of Mr. Anderson’s options met the performance vesting conditions.
|
|
|
(3)
|
In fiscal 2016, Mr. Sandlin received an grant of 9,365 options that was not
contingent upon the achievement of performance objectives in fiscal 2016.
|
All of the options granted
under the Equity Incentive Plan vest 20% per year beginning the first anniversary of the grant date, except for Mr. Milton’s
options, which vest immediately. All options expire on the tenth anniversary of the grant date, have a per share option price of
the closing price of the Company’s common stock on the grant date, do not include “reload” provisions, prohibit
re-pricing (unless approved by the shareholders).
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 plans to continue to strategically 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 do our other salaried employees, our executive officers participate
in a supplemental medical expense reimbursement plan.
Severance and
Change of Control Agreements
On December 5, 2007, the Company
entered into change-in-control agreements with Messrs. Sandlin and Klopfenstein. The agreements are “double trigger”
agreements that will pay benefits to Messrs. Sandlin and Klopfenstein, under certain circumstances, if they are terminated following
a change-in-control of the Company or a sale of their particular business unit. The agreements provide that each 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, Messrs. Sandlin and Klopfenstein 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. These benefits are referred to as “Other
Compensation” and are described in the “Summary Compensation Table” and related footnotes.
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 Compensation
Committee considers the risks that may result from the Company’s compensation policies and practices. The Compensation Committee
believes that our compensation policies and practices for our executives are reasonable and properly align their interests with
those of our shareholders. The Compensation 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 a policy of the Board
of Directors 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.
Clawback Policy
It is our policy, under the
Patriot Transportation Holding, Inc. Equity Incentive Plan, that any equity compensation granted to executives subject to recovery
under any law, regulation or listing requirement will be subject to deductions and clawback as required by such law, regulation
or listing requirement.
Compensation Committee Report
The Compensation Committee
has 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:
|
John E. Anderson
|
|
|
|
Luke E. Fichthorn III
|
|
|
|
Charles D. Hyman
|
EXECUTIVE COMPENSATION
Summary Compensation Table
The Summary Compensation
Table sets forth information concerning the compensation of our named executive officers for fiscal years 2016, 2015 and 2014.
|
SUMMARY COMPENSATION TABLE
|
|
Name and Principal Position
|
Year
|
Base
Salary
(1)
|
Option Awards
(2)
|
Non-Equity
Incentive Plan Compensation
(3)
|
All Other
Compensation
(4)(5)
|
Total
|
Thompson S. Baker II
President and CEO
|
2016
|
$214,725
|
$100,000
|
$110,313
|
$19,075
|
$444,113
|
|
2015
|
$208,357
|
$200,000
|
—
|
$25,243
|
$233,600
|
|
2014
|
$201,944
|
$200,000
|
—
|
$23,924
|
$425,868
|
John D. Milton, Jr.
Executive VP and CFO
|
2016
|
$95,625
|
$45,000
|
$62,554
|
$13,841
|
$217,020
|
|
2015
|
$82,500
|
$87,972
|
—
|
$13,451
|
$95,951
|
|
2014
|
$82,500
|
$91,102
|
—
|
$21,663
|
$195,265
|
|
Robert E. Sandlin
Vice President
|
2016
|
$289,410
|
$118,700
|
$137,576
|
$20,999
|
$566,685
|
|
2015
|
$267,458
|
$100,000
|
$224,675
|
$18,968
|
$511,101
|
|
2014
|
$257,300
|
$100,000
|
—
|
$26,953
|
$384,253
|
John D. Klopfenstein,
Controller and CAO
|
2016
|
$98,258
|
$27,000
|
$31,970
|
$14,837
|
$172,065
|
|
2015
|
$92,400
|
$54,000
|
$41,197
|
$5,927
|
$139,524
|
|
2014
|
$91,300
|
$54,000
|
—
|
$16,029
|
$161,329
|
James N. Anderson IV,
VP of Safety and Risk Management
|
2016
|
$160,811
|
$10,506
|
$30,464
|
$7,660
|
$209,441
|
|
2015
|
$151,189
|
—
|
$56,470
|
$5,337
|
$212,996
|
|
2014
|
$150,000
|
—
|
—
|
$7,918
|
$157,918
|
|
|
(1)
|
Following the Spin-off, Messrs. Baker, Milton and Klopfenstein remain employed by both Patriot
and FRPH and receive a base salary from each company. The base salaries for Messrs. Baker, Milton and Klopfenstein shown in the
table for fiscal year 2016 and prior years reflect only the portion of each officer’s base salary that is attributable to
Patriot or the transportation segment of FRPH, as applicable. For additional information, see the section entitled “Compensation
Discussion and Analysis – Compensation Components- Base Salary” in this Proxy Statement.
|
|
|
(2)
|
Amounts reflect the Black-Sholes value at the time of the grant. In fiscal year 2016, Messrs. Baker,
Milton and Klopfenstein were awarded options to purchase common stock of FRPH in addition to the options awarded by Patriot shown
in the table. Option awards shown in the table for fiscal years 2014 and 2015 were granted by FRPH prior to the Spin-off and reflect
the values of each officer’s total option awards for such years. On February 3, 2015, options granted prior to the Spin-off
were canceled and replacement options to purchase Patriot common stock and FRPH common stock were issued. The replacement options
have a combined intrinsic value equal to the intrinsic value of the original option to purchase FRPH common stock granted by FRPH.
The options were equitably adjusted to preserve the ratio of the exercise price to the fair market value of FRPH common stock on
the date of the Spin-off.
|
|
|
(3)
|
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- Compensation
Components- Cash Incentive Compensation” section of this Proxy Statement. Following the Spin-off, Messrs. Baker, Milton and
Klopfenstein remain employed by both Patriot and FRPH and are eligible to receive non-equity incentive compensation from each company.
The non-equity incentive compensation for Messrs. Baker, Milton and Klopfenstein shown in the table for fiscal year 2016 and prior
years reflect only the portion of each officer’s non-incentive compensation that is attributable to Patriot or the transportation
segment of FRPH, as applicable. For additional information, see the section entitled “Compensation Discussion and Analysis
– Compensation Components- Cash Incentive Compensation” in this Proxy Statement.
|
|
|
(4)
|
For 2016, the components of “All Other Compensation” were as follows:
|
|
Name
|
|
Matching Contributions
|
|
|
Personal Use
of Company
Car
|
|
|
Medical Reimbursement
(a)
|
|
|
Miscellaneous
(b)
|
|
|
Use of
Company
Aircraft
(c)
|
|
|
Thompson S. Baker II
|
|
$3,975
|
|
|
$2,353
|
|
|
$2,201
|
|
|
$387
|
|
|
$10,159
|
|
|
John D. Milton, Jr.
|
|
$4,106
|
|
|
$6,268
|
|
|
$2,931
|
|
|
$536
|
|
|
—
|
|
|
Robert E. Sandlin
|
|
$8,383
|
|
|
$2,709
|
|
|
$3,931
|
|
|
$5,976
|
|
|
—
|
|
|
John D. Klopfenstein
|
|
$4,040
|
|
|
$9,925
|
|
|
$665
|
|
|
$207
|
|
|
—
|
|
|
James N. Anderson IV
|
|
$6,518
|
|
|
$458
|
|
|
—
|
|
|
$684
|
|
|
—
|
|
|
|
(a)
|
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.
|
|
|
(b)
|
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.
|
|
|
(c)
|
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. In fiscal 2016, the Company sold a 75% interest in the airplane to
Edward L. Baker and John D. Baker II. We encourage our executive officers 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. With respect to non-business use, the named executive
officers reimburse the Company for a percent of the total cost of such use. The amount shown represents the difference between
the allocated total costs (excluding depreciation of use of the airplane for non-business use) and the amount reimbursed by the
named executive officer.
|
|
|
(5)
|
Following the Spin-off, Messrs. Baker, Milton and Klopfenstein remain employed by both Patriot
and FRPH and receive perquisites from each company. The “Other Compensation” for Messrs. Baker, Milton and Klopfenstein
shown in the table for fiscal year 2016 reflects only the portion of each officer’s “Other Compensation” that
is attributable to Patriot, except that the “Use of Company Aircraft” shown in the table represents each officer’s
total compensation.
|
Grants of Plan-Based Awards
The following table
sets forth information related to equity and non-equity incentive compensation granted under our compensation plans in fiscal years
2016 and 2017:
|
Name
|
Grant
Date
|
Estimated
Future Payouts Under Non-Equity Incentive Plan Awards
(1)
|
Estimated
Future Payouts Under Equity Inventive Plan Awards
(5)
|
All
Other Option Awards: Number
of
Securities Underlying Options (#)
(9)
|
Exercise
or Base Price of Option Awards ($/Share)
(10)
|
Grant
Date Fair Value of Stock and Option Awards
(11)
|
|
Threshold
(2)
|
Target
(3)
|
Maximum
(4)
|
Threshold
(6)
|
Target
(7)
|
Maximum
(8)
|
|
Thompson
S. Baker II
President
and CEO
|
11/18/15
|
$43,260
|
$216,300
|
$216,300
|
—
|
—
|
—
|
9,365
|
$23.62
|
$100,000
|
|
11/16/16
|
$44,558
|
$222,789
|
$222,789
|
—
|
—
|
—
|
13,130
|
$21.25
|
$100,000
|
|
John
D. Milton, Jr.
Executive
VP & CFO
|
11/18/15
|
$20,000
|
$100,000
|
$100,000
|
—
|
—
|
—
|
7,220
|
$23.62
|
$45,000
|
|
11/16/16
|
$20,600
|
$103,000
|
$103,000
|
—
|
—
|
—
|
10,975
|
$21.25
|
$45,000
|
|
Robert
E. Sandlin
Vice
President
|
10/15/15
|
—
|
—
|
—
|
631
|
3,156
|
3,156
|
—
|
$24.24
|
$18,700
|
|
11/18/15
|
$63,586
|
$317,928
|
$317,928
|
—
|
—
|
—
|
9,365
|
$23.62
|
$100,000
|
|
11/16/16
|
$60,066
|
$330,300
|
$330,300
|
|
|
|
13,130
|
$21.25
|
$100,000
|
John
D. Klopfenstein,
Controller & Chief Accounting Officer
|
11/18/15
|
$9,898
|
$49,490
|
$49,490
|
—
|
—
|
—
|
2,530
|
$23.62
|
$27,000
|
|
11/16/16
|
$10,195
|
$50,974
|
$50,974
|
—
|
—
|
—
|
3,545
|
$21.25
|
$27,000
|
James
N. Anderson IV,
VP of Safety & Risk Management
|
10/15/15
|
—
|
—
|
—
|
355
|
1,773
|
1,773
|
—
|
$24.24
|
$10,506
|
|
11/18/15
|
$19,200
|
$96,000
|
$96,000
|
—
|
—
|
—
|
—
|
$23.62
|
—
|
|
11/16/16
|
$23,072
|
$115,360
|
$115,360
|
—
|
—
|
—
|
—
|
—
|
—
|
|
|
(1)
|
Non-equity incentive awards reported on this table were awarded under the Company’s MIC Plan.
The performance objectives relating to the achievement of awards under the MIC Plan are described under the section entitled “Compensation
Discussion and Analysis – Compensation Components- Cash Incentive Compensation” in this Proxy Statement.
|
|
|
(2)
|
For fiscal year 2016, the threshold amounts represent 20% of each named executive officer’s
target incentive compensation award, which may be earned upon the Company’s achievement of an after-tax ROCE of 9.5%. For
fiscal year 2017, the threshold amounts represent 20% of each named executive officer’s target incentive compensation award,
which may be
|
|
|
|
earned upon the Company’s achievement of an after-tax ROCE of 9.0%.
|
|
|
(3)
|
For fiscal year 2016, the target bonus amounts represent, with respect to Messrs. Baker and Milton,
100% of the their respective base salaries, with respect to Mr. Sandlin, 110% of his base salary, with respect to Mr. Klopfenstein,
50% of his base salary and with respect to Mr. Anderson, 60% of his base salary. For fiscal year 2017, the target bonus amounts
represent, with respect to Messrs. Baker, Milton and Sandlin, 100% of the their respective base salaries, for Mr. Klopfenstein,
50% of his base salary and for Mr. Anderson, 70% of his base salary. In addition to the awards reflected in this table, Messrs.
Baker, Milton and Klopfenstein were and are eligible to receive cash bonuses in connection with their employment with FRPH.
|
|
|
(4)
|
The maximum bonus amounts for each named executive officer is the same as his target amount.
|
|
|
(5)
|
Stock option awards reported under this column were granted under the Equity Incentive Plan, which
is discussed in the section entitled “Compensation Discussion and Analysis – Compensation Components- Stock Options”
in this Proxy Statement.
|
|
|
(6)
|
The threshold amount represents the options vesting upon the achievement of an after-tax ROCE of
9.0%.
|
|
|
(7)
|
The target amount represents the options vesting upon the achievement of an after-tax ROCE of 13.0%.
|
|
|
(8)
|
The maximum option grant for each named executive officer is the same as his target amount.
|
|
|
(9)
|
Stock option awards reported under this column were granted under the Patriot Transportation Holding,
Inc. Equity Incentive Plan. Options vest 20% per year beginning the first anniversary of the grant date, except for Mr. Milton’s
options, which 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.
|
|
|
(10)
|
Exercise prices reflect the closing market price of the underlying security on the date of the
grant.
|
|
|
(11)
|
The value shown for all option awards reflects the FASB ASC Topic 718 (column l) expense associated
with the options using the Black-Scholes pricing model, estimating the fair value of stock options using the following assumptions:
|
With respect to the options
granted on November 16, 2016, (i) risk-free interest rates of 2.03% for the grants to Messrs. Baker, Sandlin and Klopfenstein,
and 1.18% for the grant to Mr. Milton, (ii) no dividend yield, (iii) volatility of 30.0% for the grants to Messrs. Baker, Sandlin
and Klopfenstein and 26.0% for the grant to Mr. Milton, and (iv) the expected life of stock options of 7 years (and 3 years in
the case of the grant to Mr. Milton). The stock options granted to Mr. Milton in fiscal 2015 vest immediately. The stock options
granted to Messrs. Baker, Sandlin, Klopfenstein vest ratably over 5 years. All stock options have a term of 10 years.
With respect to the options
granted on November 18, 2015, (i) risk-free interest rates of 2.02% for the grants to Messrs. Baker, Sandlin and Klopfenstein,
and 1.18% for the grant to Mr. Milton, (ii) no dividend yield, (iii) volatility of 40.0% for the grants to Messrs. Baker, Sandlin
and Klopfenstein and % for the grant to Mr. Milton, and (iv) the expected life of stock options of 7 years (and 3 years in the
case of the grant to Mr. Milton). The stock options granted to Mr. Milton in fiscal 2015 vest immediately. The stock options granted
to Messrs. Baker, Sandlin and Klopfenstein vest ratably over 5 years. All stock options have a term of 10 years.
With respect to the options
granted on October 15, 2015, (i) risk-free interest rates of 1.34%, (ii) no dividend yield, (iii) volatility of 34.0% and (iv)
the expected life of stock options of 7 years (and 3 years in the case of the grant to Mr. Milton). The stock options granted to
Mr. Milton in fiscal 2015 vest immediately. The stock options vest ratably over 5 years and have a term of 10 years.
Outstanding Equity Awards at Fiscal
Year-End
The table below sets
forth information concerning stock options and restricted stock held by the named executive officers at September 30, 2016.
Certain option awards
shown in the table were granted by FRPH prior to the Spin-off. On February 3, 2015, options granted prior to the Spin-off were
canceled and replacement options to purchase Patriot common stock (“Patriot Replacement Options”) and options to purchase
FRPH common stock were issued. The replacement options have a combined intrinsic value equal to the intrinsic value of the original
option to purchase FRPH common stock granted by FRPH. The options were equitably
adjusted to preserve the ratio of the exercise
price to the fair market value of FRPH common stock on the date of the Spin-off.
|
Name
|
Option
Awards
(1)
|
|
Number
of
Securities
Underlying Unexercised Options (#)
Exercisable
(2)
|
Number
of Securities Underlying Unexercised Options
(#)
Unexercisable
(2)
|
Option
Exercise Price
(3)
|
Option
Expiration
Date
(4)
|
|
Thompson
S. Baker II
President
& CEO
|
3,569
|
2,378
|
$19.541
|
12/05/2022
|
|
1,427
|
2,140
|
$30.871
|
12/04/2023
|
|
823
|
3,290
|
$26.769
|
12/03/2024
|
|
—
|
9,365
(5)
|
$23.620
(5)
|
11/18/2025
(5)
|
|
John
D. Milton, Jr.,
Executive VP & CFO
|
10,000
|
—
|
$21.441
|
06/15/2018
|
|
10,000
|
—
|
$18.236
|
06/15/2019
|
|
2,500
|
—
|
$23.987
|
12/02/2019
|
|
2,500
|
—
|
$19.092
|
12/01/2020
|
|
2,500
|
—
|
$16.595
|
12/05/2021
|
|
2,500
|
—
|
$19.541
|
12/05/2022
|
|
2,500
|
—
|
$30.871
|
12/04/2023
|
|
3,125
|
—
|
$26.769
|
12/03/2024
|
|
7,220
(5)
|
—
|
$23.620
(5)
|
11/18/2025
(5)
|
|
Robert
E. Sandlin
President
|
4,000
|
—
|
$18.838
|
08/18/2019
|
|
2,535
|
—
|
$23.987
|
12/02/2019
|
|
3,110
|
—
|
$19.092
|
12/01/2020
|
|
2,826
|
706
|
$16.595
|
12/05/2021
|
|
1,784
|
1,189
|
$19.541
|
12/05/2022
|
|
713
|
1,070
|
$30.871
|
12/04/2023
|
|
411
|
1,646
|
$26.769
|
12/03/2024
|
|
429
(5)
|
1,717
(5)
|
$24.24
(5)
|
10/15/2025
(5)
|
|
—
|
9,365
(5)
|
$23.620
(5)
|
11/18/2025
(5)
|
|
John
D. Klopfenstein
Controller
& Chief Accounting Officer
|
1,000
|
—
|
$23.987
|
12/02/2019
|
|
1,000
|
—
|
$19.092
|
12/01/2020
|
|
800
|
200
|
$16.595
|
12/05/2021
|
|
600
|
400
|
$19.541
|
12/05/2022
|
|
385
|
578
|
$30.871
|
12/04/2023
|
|
222
|
888
|
$26.769
|
12/03/2024
|
|
—
|
2,530
(5)
|
$23.620
(5)
|
11/18/2025
(5)
|
|
James
N. Anderson IV
VP
of Safety and Risk Management
|
241
(5)
|
965
(5)
|
$24.24
(5)
|
10/15/2025
(5)
|
|
|
(1)
|
Stock options granted to Mr. Milton vest immediately. The stock options granted
to Messrs. Baker, Sandlin, and Klopfenstein and Anderson vest ratably over 5 years. All stock options have a term of 10 years.
|
|
|
(2)
|
Except as set forth in footnote 5, the number of securities underlying unexercised
options exercisable reflects the number of Patriot Replacement Options granted at the time of the Spin-off.
|
|
|
(3)
|
Except as set forth in footnote 5, the exercise price reflects the exercise
price of Patriot Replacement Options granted at the time of the Spin-off.
|
|
|
(4)
|
Except as set forth in footnote 5, the expiration date reflects the number
of Patriot Replacement Options granted at the time of the Spin-off.
|
|
|
(5)
|
Options were granted in fiscal year 2016, following the Spin-off.
|
Option Exercises and Stock Vested
In fiscal year 2016,
none of our named executive officers exercised stock options, and no restricted stock held by our named executive officers vested.
Nonqualified Deferred Compensation
None of
our named executive officers receives any nonqualified deferred compensation.
RELATED PARTY TRANSACTIONS
Transactions With Bluegrass Materials
Company, LLC.
Patriot provides information
technology services to Bluegrass Materials Company, LLC. Mr. John Baker, brother of Edward L. Baker and uncle of Thompson
S. Baker II, serves as Chairman of Bluegrass Materials, LLC, 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, LLC. During fiscal 2016,
Bluegrass Materials paid $599,000 to the Company for such information technology services.
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.
Transactions With FRP Holdings, Inc.
In connection with
the Spin-off, which is discussed in the section entitled “Separation of the Company From FRP Holdings, Inc.” in this
Proxy Statement, we entered into a Separation and Distribution Agreement, a Tax Matters Agreement, an Employee Matters Agreement
and a Transition Services Agreement, which provide a framework for our relationships with FRPH after the Spin-off. These agreements
provide for the allocation between Patriot and FRPH of the assets, liabilities, and obligations of FRPH and its subsidiaries, and
govern the relationships between Patriot and FRPH (including with respect to transition services, employee matters, real property
matters, tax matters, and certain other commercial relationships). This summary of the agreements is qualified in its entirety
by reference to the full text of the applicable agreements, which are listed as exhibits to the Company’s Current Report
on Form 8-K filed on February 3, 2015.
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.patriottrans.com under Corporate Governance. 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 Patriot 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.patriottrans.com under Corporate Governance.
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 2016, the Audit Committee held three formal meetings.
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, 2016, for filing with the Securities and Exchange Commission.
|
Submitted by:
|
John
E. Anderson
Luke E. Fichthorn 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 2015 and 2014 and for other services performed during such periods.
|
|
|
|
2016
(1)
|
|
|
|
2015
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit Fees
(2)
|
|
$
|
126,444
|
|
|
$
|
129,103
|
|
|
Audit Related Fees
(3)
|
|
$
|
71,203
|
|
|
$
|
28,053
|
|
|
Tax Fees
|
|
|
0
|
|
|
|
0
|
|
|
All Other Fees
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
197,647
|
|
|
$
|
157,156
|
|
|
|
(1)
|
Prior to the completion of the Spin-off on January 30, 2015, audit, audit-related, tax and other
fees were paid by FRPH because the Company’s results were included in the consolidated financial statements of FRPH.
|
|
|
(2)
|
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.
|
|
|
(3)
|
Audit related fees consisted principally of audits of 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 year 2016.
PROPOSALS
Proposal No. 1: Election Of Directors
Pursuant to our Articles
of Incorporation, all directors elected at the Annual Meeting will serve a one year-term. Biographical information relating to
our directors and director nominees is provided under the section of this Proxy Statement entitled “Board of Directors and
Corporate Governance.”
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.
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 2017. 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.
We selected Hancock
Askew based on its longstanding relationship with FRPH, which began in 2006. No relationship exists between the Company and Hancock
Askew other than the usual relationship between auditor and client.
If the appointment
of Hancock Askew as auditor for fiscal year 2017 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 2017, unless the Audit Committee finds other good reason for making a change.
Representatives of
Hancock Askew will be available to respond to questions at the annual meeting of shareholders.
Proposal No. 3: Advisory Vote On Executive
Compensation
In accordance with
Section 14A of the Securities Exchange Act of 1934, as amended, we are asking shareholders to vote “FOR” approval of
our executive compensation program. This non-advisory vote is commonly referred to as “say-on-pay.”
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.
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 2018 must be delivered in writing to the principal executive offices of the Company no later than September
1, 2017. 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, 2017. 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, 2017.
Annual Report on Form 10-K
Shareholders may receive
without charge a copy of Patriot Transportation Holding, 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.patriottrans.com
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BY ORDER OF THE BOARD OF DIRECTORS
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December 15, 2016
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John D. Milton, Jr.
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Secretary
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PLEASE RETURN THE ENCLOSED
FORM OF PROXY, DATED AND SIGNED, IN THE ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE.
ANNUAL MEETING OF SHAREHOLDERS
OF
PATRIOT TRANSPORTATION HOLDING, INC.
January 25, 2017
GO
GREEN
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e-Consent
makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents
online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.com to enjoy online access.
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NOTICE OF INTERNET AVAILABILITY
OF PROXY MATERIAL
:
The Notice of Meeting, proxy statement and proxy card
are
available at www.patriottrans.com
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
Please
detach along perforated line and mail in the envelope provided.
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20530300000000000000 1
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012517
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THE BOARD OF DIRECTORS RECOMMENDS
A VOTE “FOR” EACH OF THE FOLLOWING NOMINEES, AND “FOR” PROPOSALS 2 AND 3
PLEASE
SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN
HERE
☒
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1. Election
of Directors (the Board recommends a vote FOR each nominee)
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☐
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NOMINEES:
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FOR
ALL NOMINEES
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John E. Anderson
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Edward L.
Baker
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WITHHOLD AUTHORITY
FOR
ALL NOMINEES
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Thompson
S. Baker II
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Luke E. Fichthorn
III
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Charles D. Hyman
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FOR ALL EXCEPT
(See
instructions below)
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INSTRUCTIONS:
To
withhold authority to vote for any individual nominee(s), mark
“FOR ALL EXCEPT”
and fill in the circle next to each nominee you wish to withhold, as shown here:
●
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To
change the address on your account, please check the box at right and indicate your new
address in the address space above. Please note that changes to the registered name(s)
on the account may not be submitted via this method.
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FOR
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AGAINST
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ABSTAIN
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2.
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Ratification
of Hancock Askew & Co., LLP, as the Independent Registered Public Accounting Firm
(auditors) for Fiscal 2017 (The Board recommends a vote FOR this proposal).
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☐
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☐
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FOR
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AGAINST
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ABSTAIN
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3.
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Advisory
approval of Executive Compensation (The Board recommends a vote FOR this proposal).
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NOTE:
Such other business as may properly come before the meeting or any adjournments thereof.
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, for the frequency of the advisory vote on executive
compensation to be every year, 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 15, 2016, and authorizes and confirms all
that the appointed proxies or their substitutes, or any of them, may do by virtue hereof.
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Signature of Shareholder
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Date:
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Signature of Shareholder
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Date:
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Note:
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Please
sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder
should sign. When signing as executor, administrator, attorney, trustee or guardian, please give
full title as such. If the signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership, please sign in partnership name
by authorized person.
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0
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PATRIOT
TRANSPORTATION HOLDING, INC.
PROXY
SOLICITED BY BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS CALLED FOR JANUARY 25, 2017.
The
undersigned hereby appoints Thompson S. Baker II, the attorneys, agents and proxies of the undersigned with full power of substitution
to vote all the shares of common stock of Patriot Transportation Holding, 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 January 25, 2017, 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:
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 15, 2016, and authorizes and
confirms all that the appointed proxies or their substitutes, or any of them, may do by virtue hereof.
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(Continued
and to be signed on the reverse side.)
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1.1
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14475
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