PROXY STATEMENT
ABOUT THE MEETING
Why am I receiving this Proxy Statement?
This Proxy Statement contains information related to the solicitation of proxies for use at our 2019 Annual Meeting of Stockholders, to be held
at the Company's offices, located at 4600 S. Syracuse Street, Suite 1450, Denver, Colorado 80237, on May 3, 2019, at 8:00 a.m. Mountain Time, for the purposes stated in the
accompanying Notice of Annual Meeting of Stockholders. This solicitation is made by Farmland Partners Inc. on behalf of our Board of Directors (also referred to as the "Board" in this Proxy
Statement). In this Proxy Statement, the terms "we," "our," "us" and the "Company" refer to Farmland Partners Inc.
We
have elected to provide access to our proxy materials over the Internet. Accordingly, we are sending to our stockholders of record as of the close of business on March 8, 2019,
a Notice of Internet Availability of Proxy Materials (the "Notice") relating to our Annual Meeting of Stockholders. All stockholders of record will have the ability to access the proxy materials on
the website referred to in the Notice or to request to receive a printed set of the proxy materials. Instructions on how to request a printed copy by mail or electronically may be found on the Notice
and on the website referred to in the Notice, including an option to request paper copies on an ongoing basis. On or about March 21, 2019, we intend to make this Proxy Statement and
accompanying form of proxy card available on the Internet and to mail the Notice to all stockholders entitled to vote at the Annual Meeting. We intend to mail this Proxy Statement, together with a
proxy card, to those stockholders entitled to vote at the Annual Meeting who have properly requested paper copies of such materials, within three business days of such request.
The
Notice, this Proxy Statement, accompanying form of proxy card and our Annual Report to Stockholders/Form 10-K for the fiscal year ended December 31, 2018 are available
at http://www.proxyvote.com. You are encouraged to access and review all of the important information contained in the proxy materials before voting.
What am I being asked to vote on?
You are being asked to vote on the following proposals:
-
-
Proposal 1 (Election of Directors):
The election of
the five director nominees named in this Proxy Statement, each for a term expiring at the 2020 annual meeting of stockholders (the "2020 Annual Meeting");
-
-
Proposal 2 (Ratification of Plante Moran):
The
ratification of Plante & Moran, PLLC ("Plante Moran") as our independent registered public accounting firm for our fiscal year ending December 31, 2019; and
-
-
To transact any other business that may properly come before the Annual Meeting or any adjournment(s) or postponements
of the Annual Meeting.
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What are the Board's voting recommendations?
The Board recommends that you vote as follows:
-
-
Proposal 1 (Election of
Directors):
"FOR" each of the Board nominees for election as directors; and
-
-
Proposal 2 (Ratification of Plante
Moran):
"FOR" the ratification of Plante Moran as our independent registered public accounting firm for our fiscal year ending
December 31, 2019.
Who is entitled to vote at the Annual Meeting?
Only holders of record of our common stock, par value $0.01 per share (our "Common Stock"), at the close of business on March 8, 2019,
the record date for the Annual Meeting (the "Record Date"), are entitled to receive notice of the Annual Meeting and to vote at the Annual Meeting. Our Common Stock constitutes the only class of
securities entitled to vote at the Annual Meeting.
What are the voting rights of stockholders?
Each share of our Common Stock outstanding on the Record Date entitles its holder to cast one vote on each matter to be voted on.
No
dissenters' rights are provided under the Maryland General Corporation Law, our charter or our bylaws with respect to any of the proposals described in this Proxy Statement.
Who can attend the Annual Meeting?
All holders of our Common Stock at the close of business on the Record Date (March 8, 2019), or their duly appointed proxies, are
authorized to attend the Annual Meeting. Admission to the meeting will be on a first-come, first-served basis. If you attend the meeting, you may be asked to present valid photo identification, such
as a driver's license or passport, before being admitted. Cameras, recording devices and other electronic devices will not be permitted at the meeting. For directions to the Annual Meeting, contact
our General Counsel and Secretary at (720) 452-3100.
Please
also note that if you are the beneficial owner of shares held in "street name" (that is, through a bank, broker or other nominee), you will need to bring a copy of the brokerage
statement reflecting your share ownership as of the Record Date.
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
Many stockholders hold their shares through a stockbroker, bank 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.
-
-
Stockholder of record.
If your shares are registered directly in your name
with our transfer agent, American Stock Transfer & Trust Company, you are considered the stockholder of record of those shares and the Notice is being sent directly to you by us.
-
-
Beneficial owner of shares held in street name.
If your shares are held in
a stock brokerage account or by a bank or other nominee, you are considered the "beneficial owner" of shares held in "street name," and the Notice is being forwarded to you by your broker or nominee,
which is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right to direct your broker how to vote your shares and are also invited to attend
the Annual Meeting. However, because you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting unless you bring with you a legal proxy from the organization
that holds your shares.
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What will constitute a quorum at the Annual Meeting?
The presence at the meeting, in person or by proxy, of the holders of a majority of our Common Stock outstanding on the Record Date
(March 8, 2019) will constitute a quorum, permitting our stockholders to conduct business at the Annual Meeting. We will include abstentions and broker non-votes in the calculation of the
number of shares considered to be present at the meeting for purposes of determining the presence of a quorum at the meeting. As of the Record Date, there were 31,899,291 shares of our Common Stock
outstanding.
If
a quorum is not present to transact business at the Annual Meeting or if we do not receive sufficient votes in favor of the proposals by the date of the Annual Meeting, the persons
named as proxies may propose one or more adjournments of the Annual Meeting to permit solicitation of additional proxies. The chairperson of the Annual Meeting shall have the power to adjourn the
Annual Meeting.
What are broker non-votes?
Broker non-votes occur when nominees, such as banks and brokers holding shares on behalf of beneficial owners, do not receive voting
instructions from the beneficial owners at least ten days before the Annual Meeting. If that happens, the nominees may vote those shares only on matters deemed "routine" by the New York Stock Exchange
(the "NYSE"), the exchange on which shares of
our Common Stock are listed. On non-routine matters, nominees cannot vote without instructions from the beneficial owner, resulting in a so-called "broker non-vote."
Proposal
2 (ratification of Plante Moran) is the only proposal that is considered "routine" under the NYSE rules. If you are a beneficial owner and your shares are held in the name of a
broker or other nominee, the broker or other nominee is permitted to vote your shares on the ratification of the appointment of Plante Moran as our independent registered public accounting firm for
our fiscal year ending December 31, 2019, even if the broker or other nominee does not receive voting instructions from you.
Under
NYSE rules, Proposal 1 (Election of Directors) is considered a "non-routine" proposal. Consequently, if you do not give your broker or other nominee voting instructions, your
broker or other nominee will not be able to vote on this proposal, and broker non-votes may exist with respect to the election of directors.
How many votes are needed for the proposals to pass?
The proposals to be voted on at the Annual Meeting have the following voting requirements:
-
-
Proposal 1 (Election of
Directors):
Directors are elected by plurality vote. There is no cumulative voting in the election of directors. Therefore, the five director
nominees receiving the highest number of "FOR" votes will be elected. For purposes of the election of directors, abstentions and broker non-votes will not be counted as votes cast and will have no
effect on the result of the vote, although they will be considered present for the purpose of determining the presence of a quorum.
-
-
Proposal 2 (Ratification of Plante
Moran):
The affirmative vote of a majority of the votes cast once a quorum has been established is required to ratify the appointment of Plante
Moran as our independent registered public accounting firm for our fiscal year ending December 31, 2019. For purposes of the vote on the ratification of Plante Moran as our independent
registered public accounting firm, abstentions will not be counted as votes cast and will have no effect on the result of the vote, although they will be considered present for the purpose of
determining the presence of a quorum.
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Will any other matters be voted on?
As of the date of this Proxy Statement, we are not aware of any matters that will come before the Annual Meeting other than those disclosed in
this Proxy Statement. If any other matters are properly brought before the Annual Meeting, the persons named in the accompanying proxy card will vote the shares represented by the proxies on the other
matters in the manner recommended by the Board, or, if no such recommendation is given, in the discretion of the proxy holders.
How do I vote?
If you are a registered stockholder as of the Record Date, you may submit your proxy by U.S. mail, Internet or telephone by following the
instructions in the Notice. If you requested a paper copy of the proxy materials, you also may submit your completed proxy card by mail by following the instructions included with your proxy card. The
deadline for submitting your vote by Internet or telephone is 11:59 a.m. Eastern Time on May 2, 2019, which is the day before the Annual Meeting. The designated proxy holders named in
the proxy card will vote according to your instructions. You may also attend the Annual Meeting and vote in person.
If
you are a street name or beneficial stockholder because your shares are held in a brokerage account or by a bank or other nominee, your broker or nominee firm will provide you with
the Notice. Follow the instructions on the Notice to access our proxy materials and vote by Internet or to request a paper or email copy of our proxy materials. If you receive these materials in paper
form, the materials include a voting instruction card so that you can instruct your broker or nominee how to vote your shares.
If
you sign and submit your proxy card without specifying how you would like your shares voted, your shares will be voted in accordance with the Board's recommendations specified above
under "What are
the Board's voting recommendations?" and in accordance with the discretion of the proxy holders with respect to any other matters that may be voted upon at the Annual Meeting.
If I plan to attend the Annual Meeting, should I still vote by proxy?
Yes. Voting in advance does not affect your right to attend the Annual Meeting. If you send in your proxy card and also attend the Annual
Meeting, you do not need to vote again at the Annual Meeting unless you want to change your vote. Written ballots will be available at the meeting for stockholders of record. Beneficial owners of
shares held in street name who wish to vote in person at the Annual Meeting must request a legal proxy from the organization that holds their shares and bring that legal proxy to the Annual Meeting.
How are proxy card votes counted?
If the proxy card is properly signed and returned to us, and not subsequently revoked, it will be voted as directed by you. Unless contrary
instructions are given, the persons designated as proxy holders on the proxy card will vote: "FOR" the election of all nominees for the Board named in this Proxy Statement; "FOR" the ratification of
the appointment of Plante Moran as our independent registered public accounting firm for the fiscal year ending December 31, 2019; and as recommended by the Board with regard to any other
matters that may properly come before the Annual Meeting, or, if no such recommendation is given, in their own discretion.
May I revoke my vote after I return my proxy card?
Yes. You may revoke a previously granted proxy and change your vote at any time before the taking of the vote at the Annual Meeting by
(i) filing with our General Counsel and Secretary a written
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notice
of revocation or a duly executed proxy bearing a later date or (ii) attending the Annual Meeting and voting in person.
Who pays the costs of soliciting proxies?
We will pay the costs of soliciting proxies, including preparation and mailing of the Notice, preparation and assembly of this Proxy Statement,
the proxy card and the Annual Report to Stockholders/Form 10-K for the fiscal year ended December 31, 2018, coordination of the Internet and telephone voting process, and any additional
information furnished to you by the Company. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding in their names shares of our Common Stock
beneficially owned by others to forward to such beneficial owners. We may reimburse persons representing beneficial owners of shares of our Common Stock for their costs of forwarding solicitation
materials to such beneficial owners. Original solicitation of proxies by Internet and mail may be supplemented by telephone, facsimile, or personal solicitation by our directors, officers or other
regular employees.
What are the implications of being an "emerging growth company"?
We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act, enacted on April 5, 2012 (the "JOBS Act").
For as long as we are an "emerging growth company," we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging
growth companies," including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding stockholder advisory "say-on-pay" votes on executive
compensation and stockholder advisory votes on golden parachute compensation.
Under
the JOBS Act, we will remain an "emerging growth company" until the earliest of:
-
-
the last day of the fiscal year during which we have total annual gross revenues of $1.07 billion or more;
-
-
the last day of the fiscal year following the fifth anniversary of our initial public offering, which is December 31, 2019;
-
-
the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt; and
-
-
the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(we will qualify as a large accelerated filer as of the first day of the first fiscal year after we have (i) more than $700 million in outstanding common equity held by our
non-affiliates and (ii) been public for at least 12 months; the value of our outstanding common equity will be measured each year on the last day of our second fiscal quarter).
You should rely only on the information provided in this Proxy Statement. We have not authorized anyone to provide you with different or additional information.
You should not assume that the information in this Proxy Statement is accurate as of any date other than the date of this Proxy Statement or, where information relates to another date set forth in
this Proxy Statement, then as of that date.
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Table of Contents
PROPOSALS TO BE VOTED ON
Proposal 1: Election of Directors
The Board is currently comprised of five directors, all of whom have terms expiring at the Annual Meeting. The nominees, all of whom are
currently serving as directors of the Company, have been recommended by the Board for re-election to serve as directors for one-year terms until the 2020 Annual Meeting and until their successors are
duly elected and qualify. Based on its review of the relationships between the director nominees and the Company, the Board has affirmatively determined that the following directors are "independent"
directors under the listing rules of the NYSE and under applicable rules of the Securities and Exchange Commission (the "SEC"): Messrs. Jay B. Bartels, Chris A. Downey, Joseph W. Glauber
and John A. Good.
The
Board knows of no reason why any nominee would be unable to serve as a director. If any nominee is unavailable for election or service, the Board may designate a substitute nominee
and the persons designated as proxy holders on the proxy card will vote for the substitute nominee recommended by the Board. Under these circumstances, the Board may also, as permitted by our bylaws,
decrease the size of the Board.
The following table sets forth the name and age of each nominee for director, indicating all positions and offices with us currently held by the
director.
|
|
|
|
|
|
|
|
|
|
Name
|
|
Age(1)
|
|
Title
|
|
Director
Since
|
|
Jay B. Bartels
|
|
|
54
|
|
Independent Director
|
|
|
2014
|
|
Chris A. Downey
|
|
|
68
|
|
Independent Director
|
|
|
2014
|
|
Joseph W. Glauber
|
|
|
64
|
|
Independent Director
|
|
|
2015
|
|
John A. Good
|
|
|
61
|
|
Independent Director
|
|
|
2018
|
|
Paul A. Pittman
|
|
|
56
|
|
Executive Chairman, President and Chief Executive Officer
|
|
|
2014
|
|
-
(1)
-
Age
as of March 21, 2019
Set
forth below are descriptions of the backgrounds and principal occupations of each of our directors, and the period during which he has served as a director.
Jay B. Bartels.
Mr. Bartels has served as a director since our initial public offering on April 16, 2014. Since 2010,
Mr. Bartels has served as the Chief Executive Officer and President and a member of the board of directors of Trendmojo, Inc., a technology development company, and as the President and
a member of the board of directors of Bonsai Development Corp, a California-based software company. In addition, since 2005, he has served as a partner and a member of the board of directors of
Germinator, Inc., a California-based seed fund that advises and invests in early-stage technology companies. Mr. Bartels also has served as a member of the board of directors of
ProWebSurfer, Inc., which focuses on new media and online advertising, since 2006. From 2008 to 2012, Mr. Bartels was the Chief Operating Officer of CollabRx, a privately held company
that focuses on healthcare data research. Mr. Bartels holds a B.S. in Mathematics and Statistics from the University of California at Berkeley.
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Based on his extensive experience as an investor, advisor and manager of a variety of businesses and his demonstrated leadership abilities, strong knowledge of
our business and financial expertise, we have determined that Mr. Bartels should serve as a director.
Chris A. Downey.
Mr. Downey has served as a director since our initial public offering on April 16, 2014.
Mr. Downey has over
30 years of experience in land development, financial management and management consulting. Since 1998, Mr. Downey has been a principal at Stirling Development, a real estate development
company he co-founded. Mr. Downey previously worked for a private real estate company and directed several large-scale master planned community development projects from acquisition through
zoning, entitlement, financing, infrastructure and build-out. Mr. Downey is a former CPA and previously was a management consultant with Arthur Young & Company, where he directed the
firm's financial planning and controls practice in Orange County, California. Mr. Downey also worked in the medical device operations of Fiat S.p.A. in California and Italy in both line
and staff positions. Mr. Downey holds a B.A. degree in Chemistry from the University of California at Irvine, and an M.B.A. from the Anderson School of Management at the University of
California at Los Angeles.
Based
on his demonstrated leadership abilities, extensive experience in the real estate industry and his finance and accounting expertise, we have determined that Mr. Downey
should serve as a director.
Joseph W. Glauber.
Dr. Glauber has served as a director since February 2015. Dr. Glauber served as the Chief Economist
of the U.S.
Department of Agriculture (the "USDA") from 2008 to 2014 and as Deputy Chief Economist of the USDA from 1992 to 2007. Dr. Glauber has been active in the agriculture industry since the early
1980s and began working for the USDA in 1984. In addition, Dr. Glauber chaired the Federal Crop Insurance Corporation Board of Directors from 2008 to 2014, served as the chief U.S. agricultural
negotiator in the WTO Doha Round from 2007 to 2009 and served on the President's Council of Economic Advisors from 1991 to 1992. Dr. Glauber is currently a senior research fellow at the
International Food Policy Research Institute and, over the course of his career, has written numerous articles about the agricultural industry that have been published in academic and trade journals.
Dr. Glauber received an A.B. in Anthropology from the University of Chicago and a Ph.D. in Agricultural Economics from the University of Wisconsin.
Based
on his extensive knowledge of agricultural economics and the agricultural industry as a whole, we have determined that Dr. Glauber should serve as a director.
John A. Good.
Mr. Good has served as a director since his appointment to the Board on January 21, 2018. Since October
2018,
Mr. Good has served as the Chief Executive Officer of Jernigan Capital, Inc., a NYSE-listed REIT that provides capital to developers of self-storage facilities. Prior to serving as Chief
Executive Officer, Mr. Good served as the Company's President and Chief Operating Officer and as a director since June 2015. Prior to joining Jernigan Capital, Inc., Mr. Good was
a partner and co-head of the REIT practice group of Morrison & Foerster LLP., a global law firm. From 1999 to 2013, Mr. Good was a partner, multi-term executive committee member
and head of the REIT practice at the law firm of Bass, Berry & Sims PLC and prior to that was a stockholder and chair of the securities and M&A practice group at the law firm of Baker,
Donelson, Bearman, Caldwell and Berkowitz P.C. Mr. Good has over 28 years' experience working with senior management teams and boards of directors of public companies in the REIT and
financial services industries on corporate finance, corporate governance, merger and acquisition, tax, executive compensation, joint venture and strategic planning projects. As a nationally recognized
corporate and securities lawyer, he was lead counsel on over 200 securities offerings raising in excess of $25 billion over the past 25 years, with more than 125 of those deals being in
the REIT industry. Mr. Good graduated from the University of Memphis with a B.B.A. in accounting, cum laude, in 1980, attained his CPA designation and practiced with a large regional CPA firm
until entering University of Memphis School of Law, where he received
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his
J.D with honors in 1987. He has been nationally ranked by Chambers USA as a leading lawyer to the REIT industry and has been active in NAREIT since 1994.
Based
on his extensive experience working with public companies in the REIT industry, we have determined that Mr. Good should serve as a director.
Paul A. Pittman.
Mr. Pittman has served as our Executive Chairman and Chief Executive Officer since the formation of our
company and assumed
the additional role of President upon the resignation of Robert Cowan effective May 31, 2018. He also served as our President from the formation of our company until February 2017. From 2008 to
2015, Mr. Pittman served as the President of American Agriculture Corporation and Pittman Hough Farms LLC. Mr. Pittman served as the Chief Administrative Officer and Executive
Vice President of Jazz Technologies, Inc., a semiconductor foundry, from March 2007 to September 2008 and its Chief Financial Officer from February 2007 to September 2008. Mr. Pittman
also served as the Principal Accounting Officer of Jazz Technologies, Inc. From December 2004 to March 2006, he served as Partner and Head of Mergers & Acquisitions at ThinkEquity
Partners LLC. From April 2000 to January 2003, he served as the President, Chief Executive Officer and Chief Operating Officer of HomeSphere, Inc., an enterprise software company, and
TheJobsite.com, which merged into HomeSphere. Before TheJobsite.com, he worked in senior investment banking roles for ten years at Merrill Lynch & Co., and prior to that with Wasserstein
Perella Co. From March 1997 to February 2000, he served as Head of Emerging Markets M&A at Merrill Lynch in London, where he was responsible for origination and execution of all M&A business in
the region (Eastern Europe, the Middle East, the Former Soviet Union and Africa). Prior to Merrill Lynch & Co., he served as Director of M&A at Wasserstein Perella & Co. in
New York and London. Mr. Pittman began his career at Sullivan & Cromwell as an Associate in Mergers and Acquisitions. He has been involved with the residential construction industry for
more than 20 years as both a developer and builder and has also served as the general contractor and developer of several condominium and custom home projects. He served as a Director of
HomeSphere, Inc., and TheJobsite.com from April 2000 to January 2003. Mr. Pittman graduated from the University of Illinois with a B.S. degree in Agriculture, received a Masters in
Public Policy from Harvard University, and a J.D. with Honors from the University of Chicago Law School.
Based
on his knowledge of the Company, its business and properties, his past public company experience, his background in finance and his experience in the real estate industry,
including acquiring and managing farmland, we have determined that Mr. Pittman should serve as the Executive Chairman of the Board.
Directors are elected by plurality vote. Therefore, the five individuals with the highest number of affirmative votes will be elected to the
five directorships. For purposes of the vote on this proposal, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote.
THE BOARD RECOMMENDS A VOTE "FOR" EACH OF THE NOMINEES SET FORTH ABOVE.
Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm
The Audit Committee of the Board, which is composed entirely of independent directors, has appointed Plante Moran as our independent registered
public accounting firm for the fiscal year ending December 31, 2019. After careful consideration of the matter and in recognition of the importance of this matter to our stockholders, the Board
has determined that it is in the best interests of the Company and our stockholders to seek the ratification by our stockholders of our Audit Committee's selection of our independent registered public
accounting firm. A representative of Plante Moran will
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be
present at the Annual Meeting, will have the opportunity to make a statement if they so desire and will be available to respond to appropriate questions.
As previously reported on the Company's Current Report on Form 8-K dated March 12, 2018, on March 10, 2018, the Company
dismissed PricewaterhouseCoopers LLP ("PwC") as its independent registered public accounting firm. The Audit Committee participated in and approved the decision to change the Company's
independent registered public accounting firm. The Company notified PwC of its decision on March 10, 2018.
The
audit reports of PwC on the Company's financial statements for the fiscal year ended December 31, 2017 did not contain any adverse opinion or disclaimer of opinion, nor were
they qualified or modified as to uncertainty, audit scope or accounting principles. In addition, during the fiscal year ended December 31, 2017, as well as during the subsequent interim period
preceding March 10, 2018, there were no (i) "disagreements" (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K and related instructions) between the Company
and PwC with respect to any matter relating to accounting principles or practices, financial statement disclosure or auditing scope or procedures which, if not resolved to the satisfaction of PwC,
would have caused PwC to make reference to the subject matter of the disagreement in its reports on the Company's financial statements with respect to such periods; or (ii) "reportable events"
(as that term is defined in Item 304(a)(1)(v) of Regulation S-K and the related instructions).
On
March 10, 2018, the Company engaged EKS&H LLP ("EKS&H") as its new independent registered public accounting firm upon the approval of the Audit Committee. During the
years ended December 31, 2017 and December 31, 2016, and the subsequent interim period through March 10, 2018, the effective date of the Company's engagement of EKS&H, the Company
did not consult with EKS&H regarding any of the matters or events set forth in Items 304(a)(2)(i) or (ii) of Regulation S-K.
As
publically reported on the Company's Current Report on Form 8-K dated October 4, 2018, effective October 1, 2018, EKS&H combined with Plante Moran. As a result of
this transaction, on October 1, 2018 EKS&H resigned as the independent registered public accounting firm for the Company. Concurrent with such resignation, the Audit Committee approved the
engagement of Plante Moran as the new independent registered public accounting firm for the Company.
The affirmative vote of the holders of a majority of all the votes cast at the Annual Meeting with respect to the matter is necessary for the
approval of the ratification of the
appointment of Plante Moran as our independent registered public accounting firm for the fiscal year ending December 31, 2019. For purposes of the vote on this proposal, abstentions will not be
counted as votes cast and will have no effect on the result of the vote. Even if the appointment of Plante Moran as our independent registered public accounting firm is ratified, the Audit Committee
may, in its discretion, change that appointment at any time during the year should it determine such a change would be in our and our stockholders' best interests. In the event that the appointment of
Plante Moran is not ratified, the Audit Committee will consider the appointment of another independent registered public accounting firm, but will not be required to appoint a different firm.
THE BOARD RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE SELECTION OF PLANTE MORAN LLLP AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2019.
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Our consolidated financial statements for the fiscal years ended December 31, 2018 and 2017 have been audited by Plante Moran and PwC,
respectively, each of which served as our independent registered public accounting firm for those years.
The
following table summarizes the fees billed by Plante Moran and PwC, our prior independent registered public accounting firm, for services performed for the Company for the fiscal
years ended December 31, 2018 and 2017, respectively:
|
|
|
|
|
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|
|
|
|
Year Ended
December 31,
2018(1)
|
|
Year Ended
December 31,
2017(2)
|
|
Audit Fees(3)
|
|
$
|
147,605
|
|
$
|
1,233,000
|
|
Audit-Related Fees(4)
|
|
|
4,652
|
|
|
354,000
|
|
Tax Fees(5)
|
|
|
|
|
|
39,081
|
|
All Other Fees(6)
|
|
|
75,560
|
|
|
3,731
|
|
|
|
|
|
|
|
|
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Total
|
|
$
|
227,817
|
|
$
|
1,629,812
|
|
|
|
|
|
|
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|
|
|
-
(1)
-
Plante
Moran (as successor to EKS&H) served as our independent registered public accounting firm for the fiscal year ended December 31, 2018.
-
(2)
-
PwC
served as our independent registered public accounting firm for the fiscal year ended December 31, 2017.
-
(3)
-
Audit
Fees for 2018 and 2017 include actual fees for the 2018 and 2017 audits, reviews of our Quarterly Reports on Form 10-Q, additional services associated
with our securities offerings and registration statements and the issuance of comfort letters and consents.
-
(4)
-
Audit-Related
Fees in 2018 consist of fees in connection with Plante Moran's (as successor to EKS&H) review of certain press releases issued by the Company and a SEC
comment letter the Company received. Audit-Related fees for 2017 consist of fees in connection with the audit of American Farmland Company for the year ended December 31, 2016.
-
(5)
-
Tax
fees for 2018 and 2017 consist primarily of tax consultation and planning fees and tax compliance services, including services provided in connection with
certain federal and state tax matters, cost segregation services, transaction support and Internal Revenue Service examination support services.
-
(6)
-
All
Other Fees in 2018 consist of the fees paid to Plante Moran (as successor to EKS&H) for the use of a contractor employed by EKS&H who served the Company while an
employee was on maternity leave. The contractor provided services to the Company prior to the appointment of EKS&H as the Company's independent auditor. All Other Fees in 2017 consist of license fees
paid to PwC for the use of their accounting research tool.
The Audit Committee's policy is to review and pre-approve, either pursuant to the Company's Audit and Non-Audit Services Pre-Approval Policy
(the "Pre-Approval Policy") or through a separate pre-approval by the Audit Committee, any engagement of the Company's independent auditor to provide any audit-related and non-audit services to the
Company. Pursuant to the Pre-Approval Policy, which the Audit Committee reviews and reassesses periodically, a list of specific services within certain categories of services, including audit,
audit-related and tax services, are specifically pre-approved for the upcoming or current fiscal year, subject to an aggregate maximum annual fee payable by us for
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each
category of pre-approved services. Any service that is not included in the approved list of services must be separately pre-approved by the Audit Committee. In addition, the Audit Committee may
delegate authority to its chairperson to pre-approve engagements for the performance of audit-related and non-audit services. Additionally, all audit-related and non-audit services in excess of the
pre-approved fee level, whether or not included on the pre-approved list of services, must be separately pre-approved by the Audit Committee. The Audit Committee has delegated authority to its
chairperson to pre-approve engagements for the performance of audit and non-audit services, for which the estimated cost for such services shall not exceed $100,000 in the aggregate for any calendar
year. The chairperson must report all pre-approval decisions to the Audit Committee at its next scheduled meeting and provide a description of the terms of the engagement. During the year ended
December 31, 2018, 100% of the services provided by Plante Moran (including services provided by EKS&H prior to its combination with Plante Moran) were pre-approved under the Pre-Approval
Policy.
CORPORATE GOVERNANCE AND BOARD MATTERS
We have structured our corporate governance in a manner we believe closely aligns our interests with those of our stockholders. Notable features
of our corporate governance structure include the following:
-
-
the Board is not classified, with each of our directors subject to re-election annually;
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-
four of our five directors are "independent" within the meaning of the listing standards of the NYSE;
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-
all of our standing Board committees are comprised solely of independent directors;
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-
we have opted out of the business combination and control share acquisition statutes in the Maryland General Corporation Law;
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we do not have a stockholder rights plan;
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we have adopted an anti-hedging policy (as discussed below);
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-
we have adopted stock ownership guidelines (as discussed below); and
-
-
we have appointed a lead independent director.
Our
directors stay informed about our business by attending meetings of the Board and its committees and through supplemental reports and communications. Our independent directors meet
regularly in executive sessions without the presence of our corporate officers or non-independent directors.
Recent Governance Enhancements
In recent years, our Board has undertaken a series of actions to strengthen our corporate governance, including the
following:
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-
we have adopted an anti-hedging policy, which is designed to prevent any director, officer or employee of the Company from entering into a
transaction in Company securities that is designed to hedge the risks of the ownership of Company securities. The policy specifically prohibits the purchase or sale of puts, calls, options or other
derivative securities based on the Company's securities, as well as prohibits hedging or monetization transactions, such as forward sale contracts, by directors, officers or employees of the Company;
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-
we have adopted stock ownership guidelines, which require the CEO to own Common Stock worth six times his base salary, other senior officers to
own Common Stock worth three times their base salary, and non-employee directors to own Common Stock worth three times the cash portion of their annual retainer;
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-
-
we have made certain changes to our corporate governance guidelines, that, among other things, require a Director to tender his or her
resignation from the Board when his or her principal occupation or business association changes substantially during his or her tenure; and
-
-
we have made certain amendments to our Audit Committee charter, Nominating and Corporate Governance Committee charter and Compensation
Committee charter, as well as adopted the Second Amended and Restated Bylaws of the Company, which include certain provisions that have strengthened our corporate governance.
Role of the Board in Risk Oversight
One of the key functions of the Board is informed oversight of our risk management process. The Board administers this oversight function
directly, with support from its three standing committeesthe Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committeeeach of which
addresses risks specific to their respective areas of oversight. In particular, our Audit Committee has the responsibility to consider and discuss our major financial risk exposures and the steps our
management has taken to monitor and control these exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also
monitors compliance with legal and regulatory requirements, in addition to oversight of the performance of our internal audit function. Our Nominating and Corporate Governance Committee monitors the
effectiveness of our corporate governance guidelines, including whether they are successful in preventing illegal or improper liability-creating conduct. Our Compensation Committee assesses and
monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking.
Board Committees
Our Board of Directors has established three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate
Governance Committee. The principal functions of each committee are described below. We comply with the listing requirements and other rules and regulations of the NYSE, as amended or modified from
time to time, and each of these committees is comprised exclusively of independent directors. Additionally, our Board of Directors may from time to time establish certain other committees to
facilitate the management of our company.
The
table below provides membership information for each of the Board committees as of the date of this Proxy Statement:
|
|
|
|
|
|
|
Member
|
|
Audit
Committee
|
|
Compensation
Committee
|
|
Nominating and
Corporate Governance
Committee
|
Jay B. Bartels
|
|
X
|
|
|
|
X (chair)
|
Chris A. Downey*
|
|
X (chair)
|
|
X
|
|
|
Joseph W. Glauber
|
|
X
|
|
X
|
|
X
|
John A. Good
|
|
|
|
X (chair)
|
|
X
|
-
*
-
Audit
committee financial expert and lead independent director.
The Audit Committee is comprised of Messrs. Bartels and Downey and Dr. Glauber. Mr. Downey, the chairman of the Audit
Committee, qualifies as an "audit committee financial expert" as that term is defined by the applicable SEC regulations. The Board has determined that each of the directors serving on our Audit
Committee is "independent" within the meaning of the applicable rules of the SEC and
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the
NYSE listing standards. We have adopted an Audit Committee charter, which details the principal functions of the Audit Committee, including oversight related
to:
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-
our accounting and financial reporting processes;
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-
the integrity of our consolidated financial statements and financial reporting process;
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-
our systems of disclosure controls and procedures and internal control over financial reporting;
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-
our compliance with financial, legal and regulatory requirements;
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-
the evaluation of the qualifications, independence and performance of our independent registered public accounting firm;
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-
the performance of our internal audit function; and
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-
our overall risk profile.
The
Audit Committee also is responsible for engaging an independent registered public accounting firm, reviewing with the independent registered public accounting firm the plans and
results of the audit engagement, approving professional services provided by the independent registered public accounting firm, including all audit and non-audit services, reviewing the independence
of the independent registered public accounting firm, considering the range of audit and non-audit fees and reviewing the adequacy of our internal accounting controls.
During
the fiscal year ended December 31, 2018, the Audit Committee met 7 times, including telephonic meetings.
The Compensation Committee is comprised of Mr. Downey, Dr. Glauber and Mr. Good, with Mr. Good serving as chairman.
The Board has determined that each of the directors serving on our Compensation Committee is "independent" within the meaning of the applicable rules of the SEC and the NYSE listing standards. We have
adopted a Compensation Committee charter, which details the principal authority and functions of the Compensation Committee, including:
-
-
reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive officer's compensation,
evaluating our chief executive officer's performance in light of such goals and objectives and determining and approving the remuneration of our chief executive officer based on such evaluation;
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-
reviewing and approving the compensation of all of our other officers;
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-
reviewing our executive compensation policies and plans;
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-
implementing and administering our incentive compensation equity-based remuneration plans;
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-
assisting management in complying with our proxy statement and annual report disclosure requirements;
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-
to the extent required by applicable SEC rules, producing a report on executive compensation to be included in our annual Proxy Statement; and
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-
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
The
Compensation Committee may form and delegate its authority to subcommittees when appropriate.
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During
the fiscal year ended December 31, 2018, the Compensation Committee met 5 times, including telephonic meetings.
The Nominating and Corporate Governance Committee is comprised of Mr. Bartels, Dr. Glauber and Mr. Good, with
Mr. Bartels serving as chairman. The Board has determined that each of the directors serving on our Nominating and Corporate Governance Committee is "independent" within the meaning of the
applicable rules of the SEC and the NYSE listing standards. We have adopted a Nominating and Corporate Governance Committee charter, which details the principal functions of the Nominating and
Corporate Governance Committee, including:
-
-
identifying and recommending to the full Board qualified candidates for election as directors and recommending nominees for election as
directors at the Annual Meeting of stockholders;
-
-
developing and recommending to the Board corporate governance guidelines and implementing and monitoring such guidelines;
-
-
reviewing and making recommendations on matters involving the general operation of the Board, including board size and composition, and
committee composition and structure;
-
-
reviewing and reassessing the adequacy of the Company's charter and bylaws and recommending any revisions to the Board;
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-
recommending to the Board nominees for each committee of the Board;
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-
annually facilitating the assessment of the Board's performance as a whole and of the individual directors, as required by applicable law,
regulations and the NYSE corporate governance listing standards; and
-
-
overseeing the Board's evaluation of management.
In
identifying and recommending nominees for directors, the Nominating and Corporate Governance Committee may consider, among other factors, diversity of relevant experience, expertise
and background.
During
the fiscal year ended December 31, 2018, the Nominating and Corporate Governance Committee met 5 times, including telephonic meetings.
Director Selection Process
The Nominating and Corporate Governance Committee is responsible for, among other things, the selection and recommendation to the Board of
nominees for election as directors. In accordance with the Nominating and Corporate Governance Committee charter and our Corporate Governance Guidelines, the Nominating and Corporate Governance
Committee develops on an annual basis guidelines and criteria for the selection of candidates for directors of the Board. The Nominating and Corporate Governance Committee considers whether a
potential candidate for director has the time available, in light of other business and personal commitments, to perform the responsibilities required for effective service on the Board, along with
their personal and professional integrity, demonstrated ability and judgement, experience, familiarity with the Company, diversity (of both experience and background) as well
as certain other relevant factors. Applying these criteria, the Nominating and Corporate Governance Committee considers candidates for Board membership suggested by its members and the Executive
Chairman of the Board and Chief Executive Officer as well as stockholders. After completing the identification and evaluation process described above, the Nominating and Corporate Governance Committee
recommends the nominees for directorship to the Board. Taking the Nominating and Corporate Governance Committee's recommendation into consideration, the Board then approves the nominees for
directorship for stockholders to consider and vote upon at the annual stockholders' meeting.
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On March 2, 2016, we completed the acquisition (the "Forsythe Transaction") of approximately 22,100 acres of farmland in Illinois from unrelated
third-party sellers (the "Forsythe Sellers") for total consideration comprised of (a) $50.0 million in cash, (b) 2,608,695 OP units valued at $11.50 per OP unit and
(c) 117,000 Series A preferred units of limited partnership interest in the Operating Partnership. In connection with the Forsythe Transaction, we and the Forsythe Sellers entered into
the Security Holders Agreement to provide the Forsythe Sellers with certain rights. Pursuant to the Security Holders Agreement, until such time that the Forsythe Sellers maintain ownership of less
than 10% of the then-outstanding shares of Common Stock (on a fully diluted basis taking into account all outstanding OP units), the Company has agreed to allow Gerald R. Forsythe, as representative
of the Forsythe Sellers, to nominate one director to the Board. Mr. Forsythe appointed John C. Conrad as the Forsythe Seller's designated member of the Board on March 27, 2016.
On
August 28, 2017, Mr. Conrad resigned from the Board due to personal reasons. As of March 19, 2019, the Forsythe Sellers collectively owned 27.27% of the combined
number of outstanding shares of Common Stock and OP Units on a fully diluted basis, and pursuant to the terms of the Security Holders Agreement, Mr. Forsythe is entitled to nominate one new
director to the Board, which as of the date of this filing he has not done.
On
January 18, 2018, Darell D. Sarff resigned from the Board citing his desire to devote more time to his other business interests. On January 21, 2018, the Board appointed
Mr. Good to fill the vacancy created by Mr. Sarff's resignation. Since his appointment, Mr. Good has served as chairman of the Compensation Committee and as a member of the
Nominating and Corporate Governance Committee.
Stockholders
wishing to recommend individuals for consideration as directors must follow the procedures described in Article II, Section 11 of the Company's bylaws,
including (among other requirements) the giving of written notice of the nomination to our Secretary no later than 120 days prior to the first anniversary of the date of the proxy statement for
the previous year's annual meeting. The stockholder's notice must set forth as to each nominee all information relating to the person that would be required to be disclosed in a solicitation of
proxies for election of directors pursuant to Regulation 14A under the Exchange Act if the candidate had been nominated by or on behalf of the Board. Recommendations by stockholders that are
made in this manner will be evaluated in the same manner as other candidates. See "Other MattersStockholder Proposals and Nominations for the 2019 Annual Meeting."
Code of Business Conduct and Ethics
The Board has established a code of business conduct and ethics that applies to our officers, directors and employees. Among other matters, our
code of business conduct and ethics is designed to deter wrongdoing and to promote:
-
-
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional
relationships;
-
-
full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications;
-
-
compliance with applicable laws, rules and regulations;
-
-
prompt internal reporting of violations of the code to appropriate persons identified in the code; and
-
-
accountability for adherence to the code of business conduct and ethics.
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Any
waiver of the code of business conduct and ethics for our executive officers or directors must be approved by the Board or a committee of the Board, and any such waiver shall be
promptly disclosed to stockholders as required by law and NYSE regulations.
Availability of Corporate Governance Materials
Stockholders may view our corporate governance materials, including the charters of the Audit Committee, Compensation Committee and Nominating
and Corporate Governance Committee, our Corporate Governance Guidelines, our Code of Business Conduct and Ethics and our Code of Ethics for Chief Executive Officer and Senior Financial Officers, on
our website at www.farmlandpartners.com under "Corporate InformationGovernance Documents", and these documents are available in print to any stockholder who sends a written request to
such effect to Farmland Partners Inc., 4600 S. Syracuse Street, Suite 1450, Denver, Colorado 80237, Attention: General Counsel and Secretary. Information on or accessible
from our website is not and should not be considered a part of this Proxy Statement.
Independence of Directors
NYSE listing standards require NYSE-listed companies to have a majority of independent board members and a nominating/corporate governance
committee, compensation committee and audit committee, each comprised solely of independent directors. Under the NYSE listing standards, no director of a company qualifies as "independent" unless the
Board of Directors of the company affirmatively determines that the director has no material relationship with the company (either directly or as a partner, stockholder or officer of an organization
that has a relationship with such company).
The
Board currently has five directors, four of whom the Board affirmatively has determined, after broadly considering all relevant facts and circumstances, to be "independent" under the
listing standards of the NYSE and under applicable rules of the SEC. The Board affirmatively has determined that each of the following directors is independent under these standards:
Mr. Bartels, Mr. Downey, Dr. Glauber, and Mr. Good. Mr. Pittman is not independent as he is an executive officer of the Company.
Board Leadership Structure
Mr. Pittman serves as the Executive Chairman of the Board, President and Chief Executive Officer. The Board has reviewed its current
leadership structure and has determined that the use of the lead independent director, as described below, along with the combined Executive Chairman and Chief Executive Officer positions, is
currently the most appropriate and effective leadership structure for the Company. Mr. Pittman has been involved with the agricultural real estate industry for more than 20 years. As the
individual primarily responsible for the day-to-day management of business operations, he is best positioned to chair regular Board meetings as the directors discuss key business and strategic issues.
Coupled with a lead independent director, this leadership structure allows the
Board to exercise independent oversight and enables the Board to have direct access to information related to the day-to-day management of business operations.
The Board believes that its governance structure ensures a strong, independent Board even though the Board does not have an independent
Chairman. To strengthen the role of our independent directors and encourage independent Board leadership, the Board also has established the position of
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lead
independent director, which currently is held by Mr. Downey. The responsibilities of the lead independent director include, among others:
-
-
presiding at all meetings of the Board at which the Chairman of the Board is not present;
-
-
scheduling meetings of the independent directors from time to time, but not less than twice a year;
-
-
developing the agendas for, and presiding at, executive sessions of the independent directors of the Board;
-
-
communicating the sense of the Board to the Chief Executive Officer of the Company;
-
-
assisting the Chairman of the Board to review and set the agenda and schedule for each of the Board's meetings, including bringing to the
attention of the Chairman of the Board particular issues for the Board's attention and consideration and assuring there is sufficient time for discussion of all agenda items;
-
-
assisting in improving the effectiveness of Board meeting;
-
-
assisting the Chairman of the Board in the review and approval of information and materials to be sent to the Board, including in particular
providing input as to the quality, quantity and timeliness of the information submitted by the Company's management that is necessary or appropriate for the independent directors to effectively and
responsibly perform their duties; and
-
-
coordinating with committee heads with respect to committee self-evaluations.
Board and Committee Meetings
During the fiscal year ended December 31, 2018, the Board met 7 times, including telephonic meetings. Each director then serving attended
at least 75% of the applicable Board meetings and committee meetings during this time. Mr. Good was appointed to the Board on January 21, 2018 and attended all board meetings following
his appointment.
Annual Meeting Attendance
Pursuant to the policy set forth in our Corporate Governance Guidelines, each director is expected to attend the Annual Meeting. Each director
then serving attended our 2018 annual meeting of stockholders.
Executive Sessions of Non-Management Directors
Pursuant to our Corporate Governance Guidelines and the NYSE listing standards, in order to promote open discussion among non-management
directors, our non-management directors meet in executive sessions without management participation regularly. The lead independent director presides at these sessions.
Communications with the Board
Stockholders and other interested parties may communicate with the Board by sending written correspondence to the "Lead Independent Director"
c/o the General Counsel and Secretary of Farmland Partners Inc., 4600 S. Syracuse Street, Suite 1450, Denver, Colorado 80237, who will then directly forward such correspondence to the
lead independent director. The lead independent director will decide what action should be taken with respect to the communication, including whether such communication should be reported to the full
Board.
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