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Section 1: DEF 14A (DEF 14A)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant
x
Filed by a Party other than the Registrant
o

Check the appropriate box:
o
Preliminary Proxy Statement
o
Confidential, For Use of the Commission Only (as Permitted by Rule 14a-6(e)(2))
x
Definitive Proxy Statement
o
Definitive Additional Materials
o
Soliciting Material Pursuant to §240.14a-12

VEREIT, INC.
(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x
No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1)
Title of each class of securities to which transaction applies:
(2)
Aggregate number of securities to which transaction applies:
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
(4)
Proposed maximum aggregate value of transaction:
(5)
Total fee paid:
o
Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)
Amount Previously Paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date Filed:




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VEREIT, INC.
2325 E. Camelback Road, Suite 1100
Phoenix, Arizona 85016
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held on Wednesday, May 3, 2017
March 21, 2017
To the Stockholders of VEREIT, Inc.:
I am pleased to invite you to the 2017 Annual Meeting of Stockholders (“Annual Meeting”) of VEREIT, Inc., a Maryland corporation (the “Company”). The Annual Meeting will be held on Wednesday, May 3, 2017 at the Company’s principal executive offices at 2325 E. Camelback Road, Ground Floor, Phoenix, Arizona 85016, commencing at 8:30 A.M. (local time). At the Annual Meeting, you will be asked to: (i) elect the eight director nominees described in the enclosed proxy statement to the Board of Directors; (ii) ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017; (iii) adopt a non-binding advisory resolution approving the compensation of our named executive officers; and (iv) consider and act on such other matters as may properly come before the Annual Meeting and any adjournment thereof.
Our Board of Directors has fixed the close of business on March 9, 2017 as the record date. Only record holders of shares of our common stock, par value $0.01 per share, at the close of business on the record date are entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.
We make proxy materials available to our stockholders on the Internet. You can access proxy materials at http://www.proxyvote.com. You also may authorize your proxy via the Internet or by telephone by following the instructions on that website. In order to authorize your proxy via the Internet or by telephone, you must have the stockholder identification number that appears on the materials sent to you. If you received a Notice of Internet Availability of Proxy Materials, you also may request a paper or an e-mail copy of our proxy materials and a paper proxy card by following the instructions included therein.
Your vote is important.
By Order of the Board of Directors, 
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Lauren Goldberg,
Executive Vice President, General Counsel and Secretary
Important Notice Regarding the Availability of Proxy Materials for
the Stockholder Meeting to be Held on May 3, 2017.

This proxy statement and our 2016 Annual Report to Stockholders
are available at http://www.proxyvote.com 

Whether or not you plan to attend the Annual Meeting, please carefully read the proxy statement and other proxy materials and complete a proxy for your shares as soon as possible. You may authorize your proxy via the Internet or by telephone by following the instructions on the website indicated in the materials you received in the mail. If you received a Notice of Internet Availability of Proxy Materials, you may also request a paper or an e-mail copy of our proxy materials and a paper proxy card at any time. If you attend the Annual Meeting, you may vote in person if you wish, even if you previously have submitted your proxy. However, please note that if your shares are held of record by a bank, broker or other nominee and you wish to vote in person at the Annual Meeting, you must obtain a “legal proxy” issued in your name from such bank, broker or other nominee.





VEREIT, INC.
TABLE OF CONTENTS
PROXY STATEMENT
INFORMATION ABOUT THE MEETING AND VOTING
PROPOSAL 1 ELECTION OF DIRECTORS
INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
EXECUTIVE OFFICERS
PROPOSAL 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
AUDIT COMMITTEE REPORT
COMPENSATION DISCUSSION AND ANALYSIS
COMPENSATION COMMITTEE REPORT
COMPENSATION TABLES
PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
COMPENSATION OF THE BOARD OF DIRECTORS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
PROPOSAL 3 NON-BINDING ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
STOCK OWNERSHIP BY DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN STOCKHOLDERS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
OTHER MATTERS PRESENTED FOR ACTION AT THE 2017 ANNUAL MEETING
ATTENDANCE AT THE 2017 ANNUAL MEETING
STOCKHOLDER PROPOSALS FOR THE 2018 ANNUAL MEETING
















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VEREIT, INC.
2325 E. Camelback Road, Suite 1100
Phoenix, Arizona 85016
PROXY STATEMENT
The proxy, together with this proxy statement and our 2016 Annual Report, is solicited by and on behalf of the board of directors (the “Board of Directors” or the “Board”) of VEREIT, Inc., a Maryland corporation (the “Company”), for use at the 2017 Annual Meeting of Stockholders (the “Annual Meeting”) and at any adjournment or postponement thereof. References in this proxy statement to “we,” “us,” “our” or like terms refer to the Company, and references in this proxy statement to “you” refer to the stockholders of the Company. The mailing address of our principal executive offices is 2325 E. Camelback Road, Suite 1100, Phoenix, Arizona 85016. This proxy statement and our 2016 Annual Report have either been mailed to you or been made available to you on the Internet. Mailing to our stockholders commenced on or about March 21, 2017.
INFORMATION ABOUT THE MEETING AND VOTING
What is the date of the Annual Meeting and where will it be held?
The Annual Meeting will be held on Wednesday, May 3, 2017 at our principal executive offices at 2325 E. Camelback Road, Ground Floor, Phoenix, Arizona 85016, commencing at 8:30 A.M. (local time).
What will I be voting on at the Annual Meeting?
At the Annual Meeting, you will be asked to:
1.
elect the eight director nominees described in this proxy statement for a one-year term to serve until the next annual meeting of stockholders in 2018 and until their successors are duly elected and qualify;
2.
ratify the appointment of Deloitte & Touche LLP (“Deloitte”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017;
3.
adopt a non-binding advisory resolution approving the compensation of our named executive officers described in this proxy statement; and
4.
consider and act on such matters as may properly come before the Annual Meeting and any adjournment thereof.
The Board of Directors does not know of any matters that may be considered at the Annual Meeting other than the matters set forth above.
Why did I receive a notice in the mail regarding the Internet availability of the proxy materials instead of a paper copy of the proxy materials?
As permitted by rules adopted by the U.S. Securities and Exchange Commission (“SEC”), we are making this proxy statement and our 2016 Annual Report available to our stockholders electronically via the Internet. On or about March 21, 2017, we began mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials (“Notice”) containing instructions on how to access this proxy statement and our 2016 Annual Report online, as well as instructions on how to vote. If you received a Notice by mail, you will not receive a printed copy of the proxy materials in the mail unless you request a copy. Instead, the Notice instructs you on how to access and review all of the important information contained in this proxy statement and our 2016 Annual Report. The Notice also instructs you on how you may vote via the Internet. If you received a Notice by mail and would like to receive a printed copy of our proxy materials, you should follow the instructions for requesting such materials included in the Notice. Our 2016 Annual Report is not part of the proxy solicitation material.

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Who can vote at the Annual Meeting?
The record date for the Annual Meeting is March 9, 2017. Only holders of shares of our common stock, par value $0.01 per share, at the close of business on March 9, 2017 are entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof. As of the record date, 974,267,963 shares of our common stock were issued and outstanding and entitled to vote at the Annual Meeting.
How many votes do I have?
Each share of common stock has one vote on each matter considered at the Annual Meeting or any adjournment or postponement thereof. The proxy card shows the number of shares of common stock you are entitled to vote.
How may I vote?
If you are a “registered owner” or “record holder” (i.e., you hold your shares in your own name as a holder of record with our transfer agent, Computershare Trust Company, N.A.) and you attend the Annual Meeting, you may vote in person at the Annual Meeting. If you are a “beneficial owner” because your bank, broker dealer or similar organization is the holder of your shares (i.e., your shares are held in “street name”) and you wish to vote in person at the Annual Meeting, you will need to obtain a “legal proxy” from the bank, broker or other record holder. If you attend the Annual Meeting and you submit your vote in person, any previous votes that you submitted by mail or authorized via the Internet or by telephone will be superseded by the vote that you cast at the Annual Meeting. Further instructions for in-person voting can be obtained by calling us at (877) 405-2653.
Stockholders may submit their votes by mail (if they have received a hard copy set of documents) by completing, signing, dating and returning their proxy in the envelope enclosed with the mailing. Stockholders also have the following two options for authorizing a proxy to vote their shares:
via the Internet at http://www.proxyvote.com; or
by telephone to Broadridge Financial Solutions, Inc. For those who hold shares in their own name, by calling (800) 690-6903 and for shares held in “street name,” by calling (800) 454-8683.

For those stockholders with Internet access, we encourage you to authorize a proxy to vote your shares via the Internet, a convenient means of authorizing a proxy that also provides cost savings to us. In addition, when you authorize a proxy to vote your shares via the Internet or by telephone prior to the date of the Annual Meeting, your proxy authorization is recorded immediately and there is no risk that postal delays will cause your vote by proxy to arrive late and, therefore, not be counted. For further instructions on authorizing a proxy to vote your shares, see the proxy card.
If your shares are held in “street name,” you should instruct your bank, broker or other record holder how to vote your shares by following the voting instructions provided by such organization. If you do not give instructions to your bank, broker or record holder, such organization will be entitled to vote your shares on routine items, but will not be permitted to do so on non-routine items. Your bank, broker or record holder will have discretion to vote on Proposal 2 (ratification of auditors) without any instructions from you, but such organization will not have the ability to vote your uninstructed shares on Proposal 1 (election of directors) or Proposal 3 (advisory vote to approve executive officer compensation) on a discretionary basis. Accordingly, if you hold your shares in “street name” and you do not instruct your broker, dealer or other record holder how to vote on these proposals, such organization cannot vote these shares and will report them as “broker non-votes,” meaning that no votes will be cast on your behalf for Proposals 1 and 3.
How will proxies be voted?
Shares represented by valid proxies will be voted at the Annual Meeting in accordance with the directions given. If you are a registered stockholder and submit a properly executed proxy but do not indicate any voting instructions, the shares will be voted “FOR” the (i) election of the director nominees named in this proxy statement, (ii) ratification of the appointment of Deloitte as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2017 and (iii) the adoption of a non-binding advisory resolution approving the compensation of our named executive officers described herein.
We are not currently aware of any other matters to be presented at the Annual Meeting other than those described in this proxy statement. If any other matters not described in this proxy statement are properly presented at the Annual Meeting, any proxies received by us will be voted in the discretion of the proxy holders.

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How can I change my vote or revoke a proxy?
You have the unconditional right to revoke your proxy at any time prior to the voting thereof by (i) submitting a later-dated proxy via the Internet, by telephone or by mail to: Broadridge Financial Solutions, Inc., 51 Mercedes Way, Edgewood, New York 11717, or (ii) by attending the Annual Meeting and voting in person. No written revocation of your proxy shall be effective, however, unless and until it is received at or prior to the Annual Meeting.
What vote is required to approve each item?
The affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present is required for the election of each director nominee. For purposes of the election of directors, a majority of the votes cast means that the number of votes cast “for” a nominee for election as a director exceeds the number of votes cast “against” that nominee.
The affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present is required for ratifying the appointment of Deloitte as the Company’s independent auditor for the fiscal year ending December 31, 2017.
The affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present is required to adopt the non-binding advisory resolution approving the compensation of our named executive officers as described herein.
Abstentions and broker non-votes, if any, will have no effect on the outcome of these matters. A broker “non-vote” occurs when a nominee holding shares for a beneficial owner has not received instructions from the beneficial owner and does not have or chooses not to exercise discretionary authority to vote the shares. None of the proposals, if approved, entitle stockholders to appraisal rights under Maryland law or the Company’s charter.
What constitutes a “quorum”?
The presence at the Annual Meeting, in-person or represented by proxy, of the holders of a majority of the shares of common stock outstanding on the record date, or 487,133,982 shares, will constitute a quorum. Abstentions and broker non-votes will be counted as present for the purpose of determining whether there is a quorum.
What happens if a quorum is not present at the Annual Meeting?
If a quorum is not present at the scheduled time of the Annual Meeting, the chairman of the meeting may adjourn the meeting to another place, date or time until a quorum is present. The place, date and time of the adjourned meeting will be announced when the adjournment is taken, and no other notice will be given unless the adjournment is to a date more than 120 days after the original record date or if, after the adjournment, a new record date is fixed for the adjourned meeting.
Will you incur expenses in soliciting proxies?
We are soliciting the proxy on behalf of the Board of Directors, and we will pay all costs of preparing, assembling and mailing the proxy materials. We have retained Broadridge Financial Solutions, Inc., to aid in the mailing of proxy materials and tabulation and recording of votes. In addition, our directors, officers and other employees, without additional compensation, may participate in the solicitation of proxies.
We will request banks, brokers and other record holders to forward copies of the proxy materials to people on whose behalf they hold shares of common stock and to request authority for the exercise of proxies by the record holders on behalf of those people. In compliance with the regulations of the SEC, we will reimburse such banks, brokers and other record holders for reasonable expenses incurred by them in forwarding proxy materials to the beneficial owners of shares of our common stock.
As the date of the Annual Meeting approaches, certain stockholders may receive a telephone call if their votes have not yet been received. Proxies that are obtained telephonically will be recorded in accordance with the procedures described below. Authorization to permit the caller to execute proxies may be obtained by telephonic instructions from stockholders of the Company. The Board of Directors believes that these procedures are reasonably designed to ensure that both the identity of the stockholder casting the vote and the voting instructions of the stockholder are accurately determined.

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In all cases where a telephonic proxy is solicited, the caller is required to ask for each stockholder’s full name and address, or the zip code or control number, and to confirm that the stockholder has either received the proxy materials in the mail or has been provided with the Notice. If the stockholder is a corporation or other entity, the caller is required to ask for the person’s title and confirmation that the person is authorized to direct the voting of the shares. If the information solicited from the stockholder agrees with the information available to the caller, then the caller has the responsibility to explain the process, read the proposals listed on the proxy card and ask for the stockholder’s instructions on the proposals. Although the caller is permitted to answer questions about the process, he or she is not permitted to recommend to the stockholder how to vote, other than to read any recommendation set forth in this proxy statement. The stockholder’s instructions will be recorded on the stockholder’s proxy card. Within 72 hours, the stockholder will be sent a letter or other written communication to confirm his or her vote and asking the stockholder to call us immediately if his or her instructions are not correctly reflected in the confirmation.
What does it mean if I receive more than one proxy card?
Some of your shares may be registered differently or held in a different account. You should authorize a proxy to vote the shares in each of your accounts via the Internet or by telephone or by mail. If you mail proxy cards, please sign, date and return each proxy card to guarantee that all of your shares are voted. If you hold your shares in registered form and wish to combine your stockholder accounts in the future, you should call us at (877) 405-2653. Combining accounts reduces excess printing and mailing costs, resulting in cost savings that benefit you as a stockholder.
What if I receive only one set of proxy materials although there are multiple stockholders at my address?
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements with respect to two or more stockholders sharing the same address by delivering to that address a single proxy statement to those stockholders. This process is referred to as “householding.” The rules benefit both you and us. It reduces the volume of duplicate information received at your household and helps reduce expenses.
Some brokers household proxy materials, delivering a single proxy statement to multiple stockholders sharing an address unless contrary instructions have been received from one or more of the affected stockholders. Once you have received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If a single copy of the proxy statement was delivered to your household and you wish to receive a separate copy of the proxy statement, please notify us and we will promptly provide you with such copy. Additionally, if, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement, or if you are receiving multiple copies of the proxy statement and wish to receive only one copy, please notify your broker if your shares are held in a brokerage account, or notify us if you hold registered shares. You may notify us by calling us at (877) 405-2653 or by mailing a request to us at 2325 E. Camelback Road, Suite 1100, Phoenix, Arizona 85016, Attention: Investor Relations.
Who should I call for additional information about voting by proxy or authorizing a proxy by telephone or via the Internet to vote my shares?
Please call us at (877) 405-2653.
Can I access the Notice, Proxy Statement and the 2016 Annual Report on the Internet? 
These materials are available on our website and can be accessed at http://www.proxyvote.com. The information found on, or accessible through, our website is not incorporated into, and does not form a part of, this proxy statement or any other report or document we file with or furnish to the SEC.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” (I) THE ELECTION OF THE DIRECTOR NOMINEES TO SERVE AS DIRECTORS OF THE COMPANY UNTIL THE NEXT ANNUAL MEETING OF STOCKHOLDERS IN 2018 AND UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFIES, (II) THE RATIFICATION OF THE APPOINTMENT OF DELOITTE AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2017 AND (III) THE ADOPTION OF A NON-BINDING ADVISORY RESOLUTION APPROVING THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS DESCRIBED HEREIN.


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PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is responsible for monitoring and supervising the performance of our day-to-day operations by our executive management team. Directors are elected annually by our stockholders, and there is no limit on the number of times a director may be elected to office. Each director serves until the next annual meeting of stockholders and until his or her successor is duly elected and qualifies or until his or her earlier death, resignation or removal. The Company’s charter provides that the number of directors shall not be less than the minimum number required by the Maryland General Corporation Law nor more than fifteen; provided, however, that the number of directors may be changed from time to time by resolution adopted by the affirmative vote of a majority of the Board. The number of directors on the Board is currently fixed at eight.
Any director who fails to be elected by a majority vote shall offer his or her resignation to the Board, subject to acceptance. The Nominating and Corporate Governance Committee will make a recommendation to the Board of Directors on whether to accept or reject the resignation, or whether other action should be taken. The Board of Directors will then act on our Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of election results. If the resignation is not accepted, the director will continue to serve until the next annual meeting and until the director’s successor is duly elected and qualifies. The director who offers his or her resignation will not participate in the Board’s decision regarding whether to accept or reject such director’s resignation.
The Board of Directors, at the recommendation of the Nominating and Corporate Governance Committee, proposes that the eight nominees listed below, all of whom are currently serving on our Board, be elected to serve as directors until the 2018 annual meeting of stockholders and until his or her successor is duly elected and qualifies. Ms. Hogan Preusse and Mr. Lieb were recommended to the Nominating and Corporate Governance Committee by certain members of the Board of Directors. If a nominee becomes unavailable to serve as a director for any reason, the shares represented by any proxy will be voted for any substitute nominee, if any, who may be designated by the Board to replace that nominee. At this time, the Board of Directors does not know of any reason why any nominee would not be able to serve as a director.
The election of each director nominee requires the affirmative vote of a majority of the votes cast at the Annual Meeting at which a quorum is present. For purposes of the election of directors, a majority of the votes cast means that the number of votes cast “for” a nominee for election as a director exceeds the number of votes cast “against” that nominee.
Director Nominees
The table set forth below lists the names and ages of each of the nominees as of the date of this proxy statement and the position and office that each nominee currently holds with the Company:  
Name
 
Age
 
Positions
Glenn J. Rufrano
 
67
 
Chief Executive Officer and Director
Hugh R. Frater
 
61
 
Non-Executive Chairman of the Board of Directors (Independent Director)
David B. Henry
 
69
 
Independent Director
Mary Hogan Preusse
 
48
 
Independent Director
Richard J. Lieb
 
57
 
Independent Director
Mark S. Ordan
 
58
 
Independent Director
Eugene A. Pinover
 
69
 
Independent Director
Julie G. Richardson
 
53
 
Independent Director

Business Experience of Director Nominees
Glenn J. Rufrano became the Company’s Chief Executive Officer and a director in April 2015. Mr. Rufrano has served and continues to serve as a director of Ventas, Inc., a publicly traded senior housing and healthcare real estate investment trust (“REIT”), since June 2010 and of O’Connor Capital Partners, a privately-owned, independent real estate investment, development and management firm that he co-founded, since October 2013. He served as Chairman and Chief Executive Officer of O’Connor Capital Partners from November 2013 through March 2015. He also served as a director for Columbia Property Trust, Inc., a publicly traded commercial real estate REIT, from January 2015 until March 2015. Previously, Mr. Rufrano was President and Chief Executive Officer of Cushman & Wakefield, Inc., a privately-held commercial property and real estate services company, and a member of its Board of Directors from March 2010 to June 2013. From January 2008 through February 2010, he served as Chief Executive Officer of Centro Properties Group, an Australian-based shopping center company, and from April 2007 through January 2008, Mr. Rufrano served as Chief Executive Officer of Centro Properties Group U.S. From 2000 until its acquisition by

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Centro Properties Group in April 2007, he served as Chief Executive Officer and director of New Plan Excel Realty Trust, a commercial retail REIT. He presently serves on the Board of New York University’s Real Estate Institute. Mr. Rufrano received his Bachelor’s Degree in Business Administration from Rutgers University and his Masters of Science degree in Management and Real Estate from Florida International University. We believe Mr. Rufrano’s extensive experience in the real estate industry, his tenure on various REIT boards and his wide-ranging leadership experience make him well qualified to serve on our Board of Directors.
Hugh R. Frater has served as the Company’s Non-Executive Chairman and independent director since April 2015. He previously served on the Board’s Audit Committee and Nominating and Corporate Governance Committee from April 2015 to September 2015. From April 2014 to December 2015, Mr. Frater served as Chairman of Berkadia Commercial Mortgage LLC (“Berkadia”), an industry-leading commercial real estate company that is owned 50% by Berkshire Hathaway Inc. and 50% by Leucadia National Corporation, which provides comprehensive capital solutions and investment sales advisory and research services for multifamily and commercial properties. Mr. Frater formerly served as Berkadia’s Chief Executive Officer from August 2010 until April 2014. From November 2007 until June 2010, Mr. Frater was the Chief Operating Officer at Good Energies, Inc. and from February 2004 until May 2007, Mr. Frater was Executive Vice President at PNC Financial Services, where he led the real estate division. From August 1988 until February 2004, he was a Founding Partner and Managing Director of BlackRock, Inc., the largest global investment manager, where he also led the real estate practice. Mr. Frater has served on the Board of Directors of the Federal National Mortgage Association (Fannie Mae) since January 2016. Mr. Frater has also been active in industry affairs, having served on the Board of Directors of the Mortgage Bankers Association (“MBa”) as Vice Chair of the MBa sponsored Government-Sponsored Enterprise (“GSE”) Task Force, as a Chair of the MBa Affordable Rental Housing Task Force and as a member of the MBa Audit Committee. He has also served on the Real Estate Advisory Board at the Columbia University Graduate School of Business since 2004 and on its Board of Overseers since 2015. He has a Master of Business Administration from the Columbia University Graduate School of Business and has a Bachelor’s Degree from Dartmouth College. We believe that Mr. Frater’s long-standing real estate and policy and government relations experience, in addition to his finance and business operations background, make him well qualified to serve on our Board of Directors.
David B. Henry has served as an independent director of the Company and as a member of the Board’s Audit Committee and as Chairperson of the Board’s Nominating and Corporate Governance Committee since September 2015. Mr. Henry served as Chief Executive Officer of Kimco Realty Corporation (“Kimco”), a publicly traded REIT, from December 2009 to January 2016 and Vice Chairman of Kimco from May 2001 to January 2016. Before joining Kimco in April 2001, Mr. Henry served in various capacities at GE Capital Real Estate (“GE”) from 1978 to 2001, including as GE’s Senior Vice President and Chief Investment Officer from 1998 to 2001. Mr. Henry also served as Chairman of GE’s Investment Committee and as a member of its Credit Committee. Prior to joining GE, Mr. Henry served as Vice President for Republic Mortgage Investors, a mortgage REIT, from 1973 to 1978. Mr. Henry has served on the Board of Directors of HCP, Inc., a publicly traded REIT, since January 2004, on the Board of Directors of Fairfield County Bank, a private Connecticut mutual savings bank, since July 2010, on the Board of Directors of Columbia Property Trust, Inc., a REIT that owns and operates commercial office properties, since January 2016, and on the Board of Directors of Tanger Factory Outlet Centers, Inc., a real estate company that owns the chain Tanger Outlets, since January 2016. Mr. Henry is a trustee of the International Council of Shopping Centers (“ICSC”) and served as its Chairman from 2011 to 2012. Mr. Henry served as the Vice-Chairman of the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), ending his term on December 31, 2015, and serves on the real estate advisory boards of New York University and Baruch College. Mr. Henry is also the co-founder and chairman of Peaceable Street Capital, an equity lender for income producing commercial real estate properties. Mr. Henry received a Bachelor of Science degree in Business Administration from Bucknell University and a Master of Business Administration from the University of Miami. We believe that Mr. Henry’s extensive REIT experience, leadership skills and knowledge of the real estate business make him well qualified to serve on our Board of Directors.
Mary Hogan Preusse has served as an independent director of the Company since February 2017. Ms. Hogan Preusse is a Managing Director and Co-Head of Americas Real Estate for APG Asset Management US (“APG”), the manager of pension assets on behalf of Dutch citizens, which she joined in 2000 and has announced she will be leaving in early May 2017. At APG, she is responsible for managing the firm’s public real estate investments in North and South America, which total $13 billion in assets, and she is a member of the firm’s Executive Board. At APG, she served as Senior Portfolio Analyst and Portfolio Manager, US Real Estate from 2000 through 2004 and as Senior Portfolio Manager, North American Real Estate from 2004 through 2008. Prior to joining APG in 2000, Ms. Hogan Preusse spent eight years as a sell side analyst covering the REIT sector, and she began her career at Merrill Lynch as an investment banking analyst. Ms. Hogan Preusse has also served as an independent director of Kimco since February 2017. She serves on NAREIT’s Investor Advisory Council and is a member of the Real Estate Advisory Board for the Carey Business School at Johns Hopkins University. Ms. Hogan Preusse graduated from Bowdoin College in Brunswick, Maine with a degree in Mathematics in 1990 and is a member of Bowdoin’s Board of Trustees. We believe that Ms. Hogan Preusse’s real estate, investment management and financial services experience make her well qualified to serve on our Board of Directors.

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Richard J. Lieb has served as an independent director of the Company and as Chairman of the Audit Committee since February 2017. Mr. Lieb serves as Managing Director and Chairman of Real Estate at Greenhill & Co., LLC (“Greenhill”), a publicly traded independent investment banking firm which he joined in 2005. He served as Greenhill’s Chief Financial Officer from 2008 to 2012 and also served as a member of the firm’s Management Committee from 2008 to 2015. Mr. Lieb has also served during his tenure at Greenhill as head of the firm’s Restructuring business and as head of North American Corporate Advisory. Prior to joining Greenhill in 2005, Mr. Lieb spent more than 20 years with Goldman Sachs & Co., where he headed that firm’s Real Estate Investment Banking Department from 2000 to 2005. Mr. Lieb has also served on the Board of Directors of CBL & Associates Properties, Inc., a publicly traded REIT focused on middle market regional malls, since February 2016 and on the Board of Directors of AvalonBay Communities, a publicly traded REIT focused on apartment communities, since September 2016. Overall, Mr. Lieb has more than 30 years of experience focusing on advisory opportunities in the real estate industry. Mr. Lieb is licensed with FINRA and holds Series 7, Series 63 and Series 24 licenses. Mr. Lieb is an active member of the American Jewish Committee (AJC) and served as a member of Wesleyan University’s Career Advisory Counsel from 2007 through 2012. He holds a Bachelor of Arts degree from Wesleyan University and a Master of Business Administration degree from Harvard Business School. We believe that Mr. Lieb’s extensive real estate experience and finance background make him well qualified to serve on our Board of Directors.
Mark S. Ordan has served as an independent director of the Company and as a member of the Audit Committee since June 2015 and as a member of the Compensation Committee since September 2015. He served as a member of the Board’s Nominating and Corporate Governance Committee from June 2015 to September 2015. Mr. Ordan has served as the Chief Executive Officer of Quality Care Properties, Inc., a spin-off of HCP, Inc., and a publicly traded healthcare services provider, since October 31, 2016.  Previously, Mr. Ordan was the Executive Chairman of Washington Prime Group, from January 15, 2015 until January 1, 2016, when he transitioned to Non-Executive Chairman of the Board through June 2016, and has served as a director since May 2014. From January 2013 to November 2013, Mr. Ordan served as the Chief Executive Officer and director of Sunrise Senior Living, LLC, the successor to the management business of Sunrise Senior Living, Inc. (“Sunrise”), a publicly traded operator of approximately 300 senior living communities located in the United States, Canada and the United Kingdom prior to its sale in January 2013 to Health Care REIT, Inc. Mr. Ordan served as Sunrise’s Chief Executive Officer from November 2008 to January 2013, and as a director from July 2008 to January 2013. He served as the Chief Executive Officer and President of The Mills Corporation, a publicly traded developer, owner and manager of a diversified portfolio of regional shopping malls and retail entertainment centers, from October 2006 to May 2007, as its Chief Operating Officer from February 2006 to October 2006 and as a director from December 2006 until May 2007. Prior to that, he served as President and Chief Executive Officer of Balducci’s LLC, a gourmet food store chain. He also founded and served as Chairman, President and Chief Executive Officer of Fresh Fields Markets, Inc., an organic foods supermarket chain, eventually leading the merger of the company with Whole Foods Markets, Inc. Mr. Ordan also was employed in the equities division of the investment banking firm of Goldman Sachs & Co. Mr. Ordan served as a director of Harris Teeter Supermarkets, Inc., a publicly traded supermarket chain, from February 2013 until January 2014, when it was acquired by The Kroger Company, one of the world’s largest food retailers. Mr. Ordan also served on the board of Federal Realty Investment Trust, a publicly traded REIT, from 1996 to 2006, serving as chairman for the last five years. Mr. Ordan currently serves on the boards of the following nonprofit organizations: the U.S. Chamber of Commerce; the National Endowment for Democracy; the Seed School Foundation; and the Chesapeake Bay Foundation. Mr. Ordan received his Bachelor of Arts in Philosophy from Vassar College and his Masters in Business Administration from Harvard Business School. We believe that Mr. Ordan’s extensive experience in the REIT industry, his knowledge of real estate and his long-standing leadership experience make him well qualified to serve on our Board of Directors.
Eugene A. Pinover has served as an independent director of the Company and as a member of the Board’s Nominating and Corporate Governance Committee since September 2015. Mr. Pinover has been a partner with DLA Piper in New York City since May 2016 and is chair of its New York Real Estate practice. He also serves on the firm’s global real estate steering committee. Previously, Mr. Pinover was Of Counsel and Co-Chair of the Real Estate Department of Willkie Farr & Gallagher LLP (“Willkie”) and practiced law with Willkie from May 1992 until April 2016. Prior to joining Willkie, Mr. Pinover practiced law at Kaye Scholer LLP from 1973 to 1992. Mr. Pinover is a member of the American College of Real Estate Lawyers, the Association of the Bar of the City of New York, the American Bar Association, the Association of Foreign Investors in Real Estate and ICSC. Mr. Pinover is the President of the Board of Directors of Steep Rock Association, a land trust in Connecticut, and has served on its Board of Directors since June 2008. Mr. Pinover also has served as a member of the Board of Directors of New Alternatives for Children, a New York-based social service organization, since September 2006. Mr. Pinover received his Juris Doctor from the New York University School of Law and his Bachelor of Arts from Dartmouth College, both cum laude. We believe that Mr. Pinover’s extensive real estate experience and legal background make him well qualified to serve on our Board of Directors.
Julie G. Richardson has served as an independent director of the Company and as a member of the Board’s Compensation Committee and the Nominating and Corporate Governance Committee since April 2015, becoming the Chairperson of the Board’s

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Compensation Committee in September 2015. From November 2012 to October 2014, she was a senior advisor to Providence Equity Partners LLC (“Providence Equity”), a global asset management firm with over $40 billion in assets under management. From April 2003 to November 2012, she was a Partner and Managing Director at Providence Equity, and oversaw the firm’s New York office. While at Providence Equity, her responsibilities included leading the initiation and execution of deals, and optimizing operating results and strategic positioning of portfolio companies throughout Providence Equity’s ownership period. Prior to Providence Equity, Ms. Richardson served as Global Head of JP Morgan’s Telecom, Media and Technology Group, and was previously a Managing Director in Merrill Lynch & Co.’s investment banking group. Ms. Richardson has served on the Board of Directors of The Hartford Financial Services Group, Inc., an insurance and financial services company, since January 2014 and on the Board of Directors of Arconic, Inc., a publicly traded manufacturer in the aerospace and automobile industries, since November 2016. She received a Bachelor of Business Administration from the University of Wisconsin-Madison. We believe that Ms. Richardson’s risk management skills and investment management and financial services experience make her well qualified to serve on our Board of Directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” EACH OF MESSRS. RUFRANO, FRATER, HENRY, LIEB, ORDAN AND PINOVER AND MSES. HOGAN PREUSSE AND RICHARDSON TO SERVE ON THE BOARD OF DIRECTORS UNTIL THE 2018 ANNUAL STOCKHOLDERS MEETING AND UNTIL A SUCCESSOR FOR EACH IS DULY ELECTED AND QUALIFIES.

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INFORMATION ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
Leadership Structure of the Board of Directors
Our Board has the authority to select the leadership structure it considers appropriate. In making leadership structure determinations, the Board considers many factors, including the specific needs of our business and what is in the best interests of our stockholders. In recognition of the time commitments and activities required to function effectively as both the Chief Executive Officer and Chairman of the Board, we have separated the roles, with Mr. Rufrano serving as our Chief Executive Officer and Mr. Frater serving as our Non-Executive Chairman. The Board believes that the current separation of the roles of Chief Executive Officer and Chairman allows Mr. Rufrano to focus his time and energy on operating and managing the Company while leveraging the experience and perspectives of Mr. Frater in helping to set the strategic direction of the Company. The Board has determined that our current Board leadership structure is the most appropriate at this time, given the specific characteristics and circumstances of the Company.
Board Oversight of Risk Management
The Board has an active role in overseeing the management of risks applicable to the Company. A portion of this responsibility has been delegated by the Board to the committees of the Board with respect to the assessment of the Company’s risks and risk management in their respective areas of oversight.
In particular, the Board administers its risk oversight function through (i) the review and discussion of regular periodic reports by the Company’s management to the Board of Directors and its committees on topics relating to the risks that we face, including, among others, market conditions, existing and potential legal claims, tenant concentrations and creditworthiness, leasing activity and expirations, compliance with debt covenants, management of debt maturities and access to the debt and equity capital markets, (ii) the required approval by the Board of Directors (or a committee thereof) of significant transactions and other decisions, including, among others, significant acquisitions and dispositions of properties, certain borrowings and the appointment and retention of certain senior executives, (iii) the direct oversight of specific areas of our business by the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee and (iv) regular periodic reports from our auditors, our independent compensation consultant and other outside consultants regarding various areas of potential risk, including, among others, those relating to our qualification as a REIT for tax purposes, our internal controls and financial reporting and compensation. The Board of Directors also relies on management to bring significant matters affecting the Company to its attention, and it has tasked the Audit Committee with monitoring the Company’s overall risk profile.
Pursuant to its charter, the Audit Committee is responsible for discussing with management the Company’s significant financial risk exposures and the actions management has taken to limit, monitor and control such exposures. The Audit Committee is also responsible for discussing with management the Company’s risk assessment and risk management policies. In addition, we have adopted policies and procedures with respect to complaints related to accounting, internal accounting control or auditing matters, which enables anonymous and confidential submission of complaints that the Audit Committee shall discuss with management.
Board Meetings
During the fiscal year ended December 31, 2016, the Board of Directors held 13 meetings (including meetings held in person and by conference call). The Board of Directors regularly held executive sessions of the independent directors, over which Mr. Frater, as the Non-Executive Chairman of the Board, served as the presiding director. The number of meetings for each Board committee is set forth below under the heading “Board Committees.” During the year ended December 31, 2016, each of our directors attended at least 75% of the total number of meetings of the Board and of the committees on which he or she served (held during the periods that he or she served). Each of our directors then-serving as a member of the Board of Directors attended the 2016 stockholders’ annual meeting. Pursuant to our Corporate Governance Guidelines, all directors should attend our 2017 Annual Meeting.

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Board Governance Documents
The Board maintains charters for all its committees. In addition, the Board has adopted a written set of Corporate Governance Guidelines as well as a Code of Business Conduct and Ethics that applies to all of the officers, employees, consultants and directors of the Company and its subsidiaries. The Company intends to satisfy the disclosure requirement regarding any amendment to or waiver of a provision of the Code of Business Conduct and Ethics for the Company’s principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions, by posting such information on the Company’s website. To view the charters of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee as well as the Corporate Governance Guidelines and the Code of Business Conduct and Ethics, please visit our website at www.vereit.com. Each of these documents is also available, free of charge, in print to any stockholder who sends a written request to VEREIT, Inc., 2325 E. Camelback Road, Suite 1100, Phoenix, Arizona 85016, Attention: Lauren Goldberg.
Independent Directors
Under the listing standards of the New York Stock Exchange (the “NYSE”), at least a majority of the Company’s directors, and all of the members of the Company’s Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee, must be independent. As part of the qualification for director independence, in addition to other specified criteria, the NYSE listing standards require our Board of Directors to affirmatively determine that the director has no material relationship with us, either directly or as a partner, stockholder or officer of an organization that has a relationship with us. Our Board of Directors has affirmatively determined that seven directors - Hugh R. Frater, David B. Henry, Mary Hogan Preusse, Richard J. Lieb, Mark S. Ordan, Eugene A. Pinover and Julie G. Richardson - have no relationship with us that would interfere with such person’s ability to exercise independent judgment as a member of our board, and that they otherwise qualify as “independent” under the NYSE’s listing standards.
Effective on February 23, 2017, Bruce D. Frank resigned from the Board of Directors. Prior to his resignation, he served as Chairman of the Audit Committee and as a member of the Compensation Committee. The Board had previously determined that Mr. Frank qualified as an “independent” director under the NYSE’s listing standards and as an “audit committee financial expert” as defined by the SEC and that he otherwise satisfied membership requirements for service on the Compensation Committee.
Board Committees
The Board of Directors has three standing committees, with each committee described below. The members of each committee are also listed below. The committees consist solely of independent directors.
Audit Committee
We have a standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee is currently comprised of Messrs. Lieb (Chairperson), Henry and Ordan. The Board has determined that each member of the Audit Committee is an independent director under the rules of the NYSE and the SEC and that Mr. Lieb and Mr. Henry each qualify as an “audit committee financial expert” as defined by the SEC. In addition, the Board has determined that each of the members of the Audit Committee is “financially literate” and has accounting or related financial management expertise, as such qualifications are defined under the rules of the NYSE.
The Audit Committee, in performing its duties, monitors:
the Company’s financial reporting process, auditing and internal control activities, including the integrity of our financial statements;
the Company’s compliance with legal and regulatory requirements;
the independent auditor’s qualifications and independence; and
the performance of the Company’s independent and internal auditors, as applicable.

The Audit Committee is also responsible for engaging our 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, 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. The Audit Committee’s report on our financial statements for the fiscal year ended December 31, 2016 is discussed below under the heading “Audit Committee Report.”

During 2016, the Audit Committee met five times (including meetings held in person and by conference call).


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Compensation Committee
We have a standing Compensation Committee, which is currently comprised of Ms. Richardson (Chairperson) and Mr. Ordan. The Board has determined that each member of the Compensation Committee is an independent director under the rules of the NYSE. Pursuant to the NYSE listing standards, in determining the independence of the directors serving on the Compensation Committee, our Board of Directors considered all factors specifically relevant to determining whether a director has a relationship to us which is material to that director’s ability to be independent from our management in connection with the duties of a Compensation Committee member, including, but not limited to, such director’s source of compensation and whether such director is affiliated with us, one of our subsidiaries, or an affiliate of one of our subsidiaries. In addition, all of the members of our Compensation Committee are “non-employee directors” within the meaning of the rules of Section 16 of the Exchange Act and “outside directors” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).
The principal functions of the Compensation Committee are to:
approve and evaluate all compensation plans, policies and programs as they affect the Company’s executive officers;
review and oversee management’s annual process for evaluating the performance of our executive officers and review and approve on an annual basis the remuneration of our executive officers;
oversee our equity incentive plans, including, without limitation, the issuance of stock options, restricted shares of capital stock, restricted stock units, dividend equivalent rights and other equity-based awards;
assist the Board of Directors and the Non-Executive Chairman in overseeing the development of executive succession plans; and
determine from time to time and make recommendations to the Board regarding the remuneration for our non-executive directors.

In carrying out its responsibilities, our Compensation Committee may delegate any or all of its responsibilities to a subcommittee to the extent consistent with the Company’s charter, Bylaws and any other applicable laws, rules and regulations. On February 22, 2016, consistent with an amendment made to the Compensation Committee’s charter, the Compensation Committee authorized the Chief Executive Officer to grant future discretionary equity-based awards under the Company’s Equity Plan (the “Equity Plan”) without the approval of the Compensation Committee in an amount not to exceed $100,000 per award (and not to exceed total awards in a calendar year of $2 million) to employees who are not subject to the reporting requirements under Section 16 of the Exchange Act.

During 2016, the Compensation Committee met five times (including meetings held in person and by conference call).

Nominating and Corporate Governance Committee

We have a standing Nominating and Corporate Governance Committee, which is currently comprised of Messrs. Henry (Chairperson) and Pinover, and Ms. Richardson. The Board has determined that each of the members of the Nominating and Corporate Governance Committee is an independent director under the rules of the NYSE.

The Nominating and Corporate Governance Committee’s purpose is to establish and implement our corporate governance practices and to nominate individuals for election to the Board. The Nominating and Corporate Governance Committee is responsible for the following:
providing counsel to the Board of Directors with respect to the organization, function and composition of the Board of Directors and its committees;
overseeing the self-evaluation of the Board of Directors and its committees;
periodically reviewing and, if appropriate, recommending to the Board of Directors changes to our corporate governance policies and procedures;
identifying and recommending to the Board of Directors potential director candidates for nomination; and
overseeing and approving related person transactions.

We have not adopted a specific policy regarding the consideration of director nominees recommended to our Nominating and Corporate Governance Committee by stockholders for our proposed director slate. Our Nominating and Corporate Governance Committee will consider candidates nominated by stockholders provided that the stockholder submitting a nomination has complied with procedures set forth in the Company’s Bylaws. See “Stockholder Proposals for the 2018 Annual Meeting” for additional information regarding stockholder nominations of director candidates.


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In determining appropriate candidates to nominate to the Board of Directors and in considering stockholder nominees, our Nominating and Corporate Governance Committee may consider such criteria as it deems appropriate, which may include, without limitation, a nominee’s:
personal and professional integrity, ethics and values;
experience in corporate management, such as serving as an officer or former officer of a publicly-held company, and a general understanding of marketing, finance and other elements relevant to the success of a publicly traded company in today’s business environment;
experience in the Company’s industry and with relevant social policy concerns;
experience as a board member of another publicly-held company;
academic expertise in an area of the Company’s operations;
whether the appointment of the candidate could increase the diversity of background, skills and experience of the Board as a whole;
practical and mature business judgment, including ability to make independent analytical inquiries;
the nature of and time involved in a director’s service on other boards and/or committees and whether a candidate’s service obligations to other boards complies with the Board’s then outstanding policy on service on boards of other public companies; and
with respect to any person already serving as a director, the director’s past attendance at meetings and participation in and contribution to the activities of the Board and any committees on which he or she has served.

Our Nominating and Corporate Governance Committee evaluates each nominee in the context of the Board as a whole, with the objective of assembling a group that can best perpetuate the success of the business and represent stockholder interests through the exercise of sound judgment using its diversity of experience in these various areas.

During 2016, the Nominating and Corporate Governance Committee met five times (including meetings held in person and by conference call).

Communications with the Board of Directors

Stockholders and all interested parties may communicate with the Board of Directors or any individual director regarding any matter that is within the responsibilities of the Board. Stockholders and interested parties should send their communications to the Board of Directors, or an individual director, c/o VEREIT, Inc., 2325 E. Camelback Road, Suite 1100, Phoenix, Arizona 85016, Attention: Lauren Goldberg, Executive Vice President, General Counsel and Secretary. Ms. Goldberg will deliver all appropriate communications to the Board of Directors or the individual director no later than the next regularly scheduled meeting of the Board of Directors. If the Board of Directors modifies this process, the revised process will be posted on the Company’s website.

EXECUTIVE OFFICERS
The following table sets forth the names and ages of each of the executive officers as of the date of this proxy statement and the position and office that each currently holds with the Company. Subject to certain rights set forth in their respective employment agreements, our executive officers serve at the pleasure of the Board of Directors.
Name
 
Age
 
Positions
Glenn J. Rufrano
 
67
 
Chief Executive Officer and Director*
Michael J. Bartolotta
 
59
 
Executive Vice President and Chief Financial Officer
Lauren Goldberg
 
49
 
Executive Vice President, General Counsel and Secretary
Paul H. McDowell
 
56
 
Executive Vice President and Chief Operating Officer
William C. Miller
 
47
 
Executive Vice President, Investment Management
Thomas W. Roberts
 
58
 
Executive Vice President and Chief Investment Officer

* See biographical summary under “Proposal 1: Election of Directors - Business Experience of Director Nominees.”
Michael J. Bartolotta has served as the Company’s Executive Vice President and Chief Financial Officer since October 2015. Mr. Bartolotta previously served as Executive Vice President and Chief Financial Officer of Cushman & Wakefield Inc. (“Cushman”), a global leader in commercial real estate services, from February 2012 until September 2015. Mr. Bartolotta also

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served on Cushman’s Board of Directors and served as Chairman of the Audit Committee from March 2007 until he assumed his position as Executive Vice President and Chief Financial Officer of Cushman in February 2012. Before becoming Cushman’s Chief Financial Officer, Mr. Bartolotta served as Vice President and Chief Financial Officer for EXOR, Inc., the U.S. arm of EXOR S.p.A. from 1991 to February 2012. Mr. Bartolotta has a Bachelor of Science degree in Accounting from New York University and is a Certified Public Accountant in New York.
Lauren Goldberg has served as the Company’s Executive Vice President, General Counsel and Secretary since May 2015. Prior to joining the Company, Ms. Goldberg served as Executive Vice President, General Counsel and Chief Compliance Officer for global cosmetics company, Revlon, Inc. from March 2011 through December 2013. Ms. Goldberg served as Senior Vice President - Law for MacAndrews & Forbes Inc. from November 2009 until February 2011, and as an Assistant United States Attorney for the United States Attorney’s Office in the Southern District of New York, from October 2000 until October 2009. Prior to her service in the U.S. Attorney’s Office, Ms. Goldberg worked as an associate with Stillman & Friedman, P.C. and with Fried, Frank, Harris, Shriver & Jacobson LLP. Ms. Goldberg also has prior accounting experience as an associate at Coopers & Lybrand. She received her Juris Doctor from Columbia Law School and her undergraduate degree in accounting from the Wharton School, University of Pennsylvania.
Paul H. McDowell has served as the Company’s Executive Vice President and Chief Operating Officer since October 2015. He previously served as the Company’s Co-Head, Real Estate from January 2015 to September 2015 and the Company’s President, Office and Industrial Group from November 2013 until December 2014. Prior to joining the Company, Mr. McDowell was a founder of CapLease Inc. (“CapLease”), a publicly traded net-lease REIT, where he served as Chief Executive Officer from 2001 to 2014 and as Senior Vice President, General Counsel and Secretary from 1994 until 2001. Mr. McDowell served on the CapLease Board of Directors from 2003 to 2014 and was elected Chairman of the Board in December 2007. He served on the Board of Directors of CapLease’s predecessor from 2001 until 2004. From 1991 until 1994, Mr. McDowell was corporate counsel for Sumitomo Corporation of America, the principal U.S. subsidiary of one of the world’s largest integrated trading companies. From 1987 to 1990, Mr. McDowell was an associate in the corporate department at the Boston law firm of Nutter, McClennen & Fish LLP. He received his Juris Doctor with honors from Boston University School of Law in 1987, and received a Bachelor of Arts from Tulane University in 1982.
William C. Miller has served as the Company’s Executive Vice President, Investment Management since June 2015. In this role, Mr. Miller provides strategic direction and oversees all aspects of investment management for our Cole Capital® business segment, including product development, external and internal sales, marketing, broker-dealer relations, due diligence and securities operations. Mr. Miller previously served as Senior Vice President and Chief Sales Officer of Cole Capital from March 2015 through June 2015. Mr. Miller has been in the financial services business for more than 20 years and has extensive leadership experience in capital markets, real estate and distribution. Prior to joining Cole Capital, he served as Senior Vice President and Director of National Accounts for American Funds, from July 2012 until March 2015, where he was responsible for leading business development, strategy and relationship management efforts for the retail wire/regional broker dealers, as well as the global banking channel in the United States. In addition to his experience at American Funds, Mr. Miller previously served as Executive Vice President and Managing Director of National Products for Realty Capital Securities, LLC from May 2010 until June 2012, as Executive Vice President and Chief Sales Officer for AXA Equitable Distributors from 2006 until 2010, and in senior leadership roles for Lincoln Financial Distributors from 2003 until 2006. Mr. Miller is a graduate of Hobart College. He holds Financial Industry Regulatory Authority (FINRA) Series 7 and 24 licenses.
Thomas W. Roberts has served as the Company’s Executive Vice President and Chief Investment Officer since October 2015. Previously he served as the Company’s Executive Vice President, Real Estate from the Company’s acquisition of Cole Real Estate Investments, Inc., a publicly traded Maryland corporation (“Cole”), until October 2015. During his tenure at Cole and the Company, which began in 2009, he was responsible for the acquisition and disposition of over $25 billion of office, industrial and retail properties. Mr. Roberts is a 30-year veteran of the real estate industry. Prior to joining Cole, Mr. Roberts served as President and Chief Executive Officer of Opus West Corporation (“Opus”), a Phoenix-based real estate developer, from March 1993 until May 2009. During his career at Opus, he was responsible for the design, construction and development of more than 50 million square feet of commercial real estate valued in excess of $8 billion. In July 2009, Opus filed for Chapter 11 bankruptcy protection. From 1986 until 1990, Mr. Roberts worked as Vice President, Real Estate Development for the Koll Company. Mr. Roberts earned a Bachelor of Science degree in Finance with a specialization in real estate from Arizona State University.

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PROPOSAL 2 
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has appointed Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2017. Deloitte was first appointed as our independent registered public accounting firm effective June 1, 2015. Stockholder ratification of the appointment of Deloitte as the Company’s independent registered public accounting firm is not required by the Company’s Bylaws or otherwise. However, the Board is submitting the appointment of Deloitte to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the appointment, the Audit Committee may reconsider whether or not to retain Deloitte in the future. Even if the appointment is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if the Audit Committee determines that such a change would be in the best interests of the Company.
Independent Registered Public Accounting Firm
We engaged Deloitte as our new independent registered public accounting firm on June 1, 2015 to audit the financial statements of the Company and VEREIT Operating Partnership, L.P. (the “Operating Partnership”) for the fiscal year ending December 31, 2015. Deloitte’s engagement to serve as our independent registered public accounting firm was effective upon the dismissal of Grant Thornton LLP (“Grant Thornton”) on June 1, 2015. The dismissal of Grant Thornton and appointment of Deloitte were approved by the Audit Committee.
Grant Thornton’s audit report for the fiscal year ended December 31, 2014 on the financial statements of the Company and the Operating Partnership did not contain an adverse opinion or a disclaimer of opinion, nor was any such report qualified or modified as to uncertainty, audit scope or accounting principles. However, as further described below, Grant Thornton’s audit report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2014 contained an adverse opinion. At no point for the period of January 1, through June 1, 2015 were there any “disagreements” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) between the Company and the Operating Partnership, on the one hand, and Grant Thornton, on the other hand, on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Grant Thornton, would have caused it to make reference to the subject matter of the disagreements in connection with its report. The adverse opinion on the Company’s internal control over financial reporting described further below constituted the only “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K) for the Company that occurred during the period of January 1, through June 1, 2015. No such “reportable event” occurred with respect to the Operating Partnership.
On March 2, 2015, the Company restated its previously-issued consolidated financial statements and related financial information as of and for the fiscal years ended December 31, 2013 and 2012 in the Company’s amended Annual Report on Form 10-K for the fiscal year ended December 31, 2013, and amended certain of its 2014 quarterly reports on Form 10-Q to restate its previously-issued consolidated financial statements and related financial information for the interim periods ended March 31, 2014 and 2013, June 30, 2014 and 2013 and September 30, 2013 to correct errors that were identified as a result of an investigation conducted by the Company’s Audit Committee (the “Audit Committee Investigation”), as well as certain other errors that were identified by the Company.
As previously reported, the Company’s management concluded that its internal control over financial reporting and its disclosure controls and procedures were not effective at December 31, 2014 due to certain material weaknesses. Accordingly, Grant Thornton’s audit report on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2014 contained an adverse opinion on the Company’s internal control over financial reporting due to the effect of these material weaknesses in the Company’s internal control over financial reporting, which were described in Item 9A. Controls and Procedures of the Company’s and the Operating Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014, filed with the SEC on March 30, 2015. The Audit Committee discussed these material weaknesses in the Company’s internal control over financial reporting with Grant Thornton and the Company authorized Grant Thornton to respond fully to the inquiries of any successor accountant of the Company concerning this reportable event.
As noted above, the Audit Committee engaged Deloitte as the Company’s and the Operating Partnership’s new independent registered public accounting firm effective June 1, 2015. During the period of January 1, through June 1, 2015, none of the Company, the Operating Partnership or anyone on their behalf consulted Deloitte regarding either: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered with respect to the Company’s or the Operating Partnership’s consolidated financial statements, as applicable, in connection with which either a written report or oral advice was provided to the Company or the Operating Partnership that Deloitte concluded was an important

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factor considered by the Company or the Operating Partnership in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a “disagreement” (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a “reportable event” (as defined in Item 304(a)(1)(v) of Regulation S-K).
The Company’s management has evaluated its internal control over financial reporting and its disclosure controls and procedures and concluded that its internal control over financial reporting was effective as of December 31, 2015 and December 31, 2016. Deloitte has issued opinions to that effect in their report which was included in the Company’s and the Operating Partnership’s Annual Reports on Form 10-K for the fiscal years ended December 31, 2015 and December 31, 2016.
Fees
Aggregate fees for professional services rendered by Deloitte for the years ended December 31, 2015 and December 31, 2016, were as follows (in thousands):
 
2015
 
2016
 
Type of Service
 
 
 
 
Audit Fees
$
3,299

(1) 
$
2,890

(2) 
Audit-Related Fees
41

(3) 
558

(3) 
Tax Fees

 

 
All Other Fees

 

 
Total
$
3,340

 
$
3,448

 
__________________________
(1)
Includes fees for professional services rendered for the audits of the Company’s and the Operating Partnership’s 2015 annual consolidated financial statements, the reviews of the Company’s and the Operating Partnership’s quarterly consolidated financial statements for the quarters ended June 30, 2015 and September 30, 2015 and other services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements.
(2)
Includes fees for professional services rendered for the audits of the Company’s and the Operating Partnership’s 2016 annual consolidated financial statements, the reviews of the Company’s and the Operating Partnership’s quarterly consolidated financial statements and other services that are normally provided by the auditor in connection with statutory and regulatory filings or engagements.
(3)
Includes fees for professional services rendered in connection with other SEC filings, including comfort and other procedures associated with registration statements and consents.

Pre-Approval Policies and Procedures
To help ensure the independence of the independent auditor, the Audit Committee’s charter requires that the Audit Committee pre-approve all audit and non-audit services to be performed by its independent auditor prior to the engagement of such independent auditor by the Company or its subsidiaries. The Audit Committee has pre-approved all services provided to us by Deloitte.
A representative of Deloitte is expected to attend the Annual Meeting. The representative will have an opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.
The affirmative vote of a majority of the votes cast at the Annual Meeting is required to ratify the appointment of Deloitte as our independent registered public accounting firm.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF DELOITTE AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2017.

15




AUDIT COMMITTEE REPORT*
Management is responsible for the Company’s accounting and financial reporting processes, including its internal control over financial reporting, and for preparing the Company’s consolidated financial statements. Deloitte, the Company’s independent auditor, is responsible for performing an audit of our consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (“PCAOB”) and for expressing an opinion as to whether the Company’s consolidated financial statements are fairly presented in all material respects in conformity with accounting principles generally accepted in the United States of America (“GAAP”). In this context, the responsibility of the Audit Committee is to oversee the Company’s accounting and financial reporting processes and the audits of the Company’s consolidated financial statements.
In the performance of its oversight function, the Audit Committee reviewed and discussed with management and Deloitte the Company’s audited consolidated financial statements as of and for the year ended December 31, 2016. Management and Deloitte represented to the Audit Committee that the Company’s audited consolidated financial statements as of and for the year ended December 31, 2016 were prepared in accordance with GAAP. The Audit Committee also discussed with Deloitte the matters required to be discussed by Auditing Standard No. 1301, as amended (“AS No. 1301”), as adopted by the PCAOB. AS No. 1301 sets forth requirements pertaining to the independent auditor’s communications with the Audit Committee regarding the conduct of the audit.
The Audit Committee received the written disclosures and a letter from Deloitte required by the applicable requirements of the PCAOB regarding Deloitte's communications with the Audit Committee concerning independence, and has discussed with Deloitte its independence.
Based on the Audit Committee’s review and the discussions described above, and subject to the limitations on its role and responsibilities described above and in the Audit Committee charter, the Audit Committee recommended to the Board of Directors that the audited financial statements as of and for the year ended December 31, 2016 be included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2016 for filing with the SEC.
Submitted by the Audit Committee**
David B. Henry
Mark S. Ordan
________________________

*
The information contained in the Audit Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that we specifically incorporate it by reference in such filing.
** Bruce D. Frank served as Chairman of the Audit Committee during the year ended December 31, 2016 through his resignation on February 23, 2017. Richard J. Lieb was appointed as Chairman of the Audit Committee on February 23, 2017 and did not take part in the reviews and discussions referred to in this Audit Committee Report.

16




COMPENSATION DISCUSSION AND ANALYSIS
Introduction
In this Compensation Discussion and Analysis, we describe our compensation practices, programs and decisions for executive officers who served as our named executive officers (“NEOs”) during the fiscal year ended December 31, 2016.
For 2016, our NEOs were as follows:
Glenn J. Rufrano, Chief Executive Officer.
Michael J. Bartolotta, Executive Vice President and Chief Financial Officer.
Lauren Goldberg, Executive Vice President, General Counsel and Secretary.
Paul H. McDowell, Executive Vice President and Chief Operating Officer.
Thomas W. Roberts, Executive Vice President and Chief Investment Officer.

Our 2016 Fiscal Year Highlights
Our Business. We are a full-service real estate operating company that operates through two business segments, our real estate investment (“REI”) segment and our investment management segment, Cole Capital® (“Cole Capital”). Through our REI segment, we own and actively manage a diversified portfolio of 4,142 retail, restaurant, office and industrial real estate properties with an aggregate of 93.3 million square feet, of which 98.3% was leased as of December 31, 2016, with a weighted-average remaining lease term of 9.9 years. Through our Cole Capital segment, we are responsible for raising capital for and managing the affairs of certain non-listed real estate investment trusts (the “Cole REITs”) on a day-to-day basis, identifying and making acquisitions and investments on behalf of the Cole REITs, and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital receives compensation and reimbursement for performing these services.

Summary of 2016 Financial and Operational Results. In 2015, following the significant leadership and Board of Director changes that took place in late 2014 and 2015, the Company laid out a business plan focused on improving the Company’s operating results and strengthening its overall financial position and, in particular, enhancing its overall portfolio, re-establishing Cole Capital’s brand value, making progress toward achieving balance sheet investment-grade metrics and establishing a sustainable dividend. Throughout 2016, the Company executed on its plan, establishing a solid foundation and allowing us to move to the next phase in our business evolution. Importantly, the Company was also successful in accessing both the debt and equity markets, producing a safer balance sheet and resulting in the credit ratings agencies improving their outlook on the Company.
In 2016 we were able to deliver solid financial and operational results while making significant progress on our business strategies as illustrated by the following highlights:
Achieved adjusted funds from operations (“AFFO”) per diluted share of $0.78, which was within the range of the Company’s earnings guidance to its stockholders. See the “Non-GAAP Measures” section on pages 48-51 of the Company’s Annual Report on Form 10-K, filed with the SEC on February 23, 2017 for additional information about AFFO.
Disposed of 301 properties for an aggregate sales price of $1.14 billion, exceeding the high end of the Company’s disposition guidance of $1.0 billion.
Continued to reposition the Company’s portfolio through strategic dispositions to enhance diversification. In line with the Company’s previously stated goals, increased the percentage of retail and industrial properties and decreased the percentage of office properties and restaurants. At year end, the Company’s portfolio was comprised of approximately 38.7% retail, 23.9% restaurants, 15.6% industrial and distribution and 21.8% office properties.
Reduced the Company’s exposure to Red Lobster® to approximately 8.2% at the end of 2016 from 9.3% at the end of 2015.
Acquired controlling financial interests in eight commercial properties for a purchase price of $100.2 million, as the Company transitions to resuming its on-balance sheet acquisition program in 2017.
Maintained targeted occupancy level of 98.3% as of the end of 2016.
Successfully accessed the debt and equity markets in 2016 and reduced the Company’s total debt, including:
Refinanced $1.3 billion of bonds coming due in February 2017 with 10-year bonds and 5-year bonds and $300.0 million of term debt, staggering that debt repayment and improving its maturity schedule.
Completed an equity offering in August 2016, netting the Company approximately $702.5 million in proceeds.
Increased liquidity with $2.3 billion of full capacity available under the revolving credit facility.

17




Re-established the Cole Capital brand by reinstating certain selling agreements and entering into new selling agreements with broker-dealers resulting in an increase in Cole Capital’s market share. During 2016, Cole Capital raised $487.2 million of new capital, an 80% increase over 2015.
With these achievements, our Total Stockholder Return (“TSR”) for the year was 13.3%, which outperformed the overall REIT index but was below the Company’s net lease peers by 2.2%. See “Elements of Compensation - Long-Term Equity Incentive Awards” below for additional information about TSR, including for a list of the Company’s net lease peers.

We believe our accomplishments in 2016 provide a strong platform for future value creation. We also believe the factors above contributed to the credit ratings agencies improving their outlook on the Company.
Summary of 2016 Compensation Results. Our compensation results for 2016 directly reflect these performance outcomes. Specifically:
Annual incentive Bonus Pool (defined below) for the Company funded at 100% based on AFFO performance. The combined individual incentive payouts for the Company are allocated from the Bonus Pool funding.
Each of the NEOs earned between 100% and 120% of their target annual incentive bonus opportunity based on individual contributions to the operational and strategic achievements outlined above and their individual performance.
No performance-based restricted stock unit awards vested based on 2016 performance as the performance-based restricted stock unit awards made in 2015 and 2016 for performance through 2017 and 2018, respectively, are still outstanding. Each of these awards is tied to our TSR as compared to a market index and our net-lease REIT peers (as discussed further below).

See “Elements of Compensation — Annual Incentive Bonus” and “— Long-Term Equity Incentive Awards” below for additional detail on the compensation elements and results for 2016.

Executive Compensation Practices
The Company developed and maintains the below comprehensive compensation and governance framework that we believe is aligned with “best-in-class” market practices and standards.
What We Do
a
Use an objective funding formula for annual incentives - For 2016, the Compensation Committee adopted a new approach to fund annual incentive awards. Specifically, the funding of the Bonus Pool for the Company is tied to the Company’s achievement of AFFO. Individual awards are then allocated from this pool based on objective and subjective individualized performance objectives and metrics at the discretion of the Compensation Committee.
a
Tie pay to performance - In addition to an objective framework to determine the annual incentive plan Bonus Pool funding, a significant portion of our long-term incentive awards for executive officers is tied to our TSR performance relative to a market index and our net-lease peers.
a
Engage an independent compensation consultant firm - The Compensation Committee engages Semler Brossy Consulting Group (“Semler Brossy”), an independent compensation advisor, to provide independent, third-party advice on executive compensation.
a
Executive compensation designed to be competitive to peer group - The Compensation Committee, with the advice of Semler Brossy, uses peer group data to ensure that our pay is competitive with comparable companies based on asset size, revenue and enterprise value.

a
Offer limited perquisites - We provide modest perquisites to our executives, including our Chief Executive Officer and our other executive officers.

a
Maintain robust stock ownership requirements for our executive officers and non-employee directors - We have stock ownership guidelines of 6x base salary for the Chief Executive Officer, 3x base salary for the Chief Financial Officer, 2x base salary for other executive officers and 5x the annual cash retainer for non-employee directors, which can be achieved over a specified time period.

a
Double trigger vesting upon change of control - All equity awards issued after April 1, 2015, are subject to a “double trigger” requiring a qualified termination of employment following a change in control before vesting is accelerated for executive officers.


18




a
Provide reasonable severance benefits - Severance benefits, including following a change in control for our Chief Executive Officer, have been reviewed against peer groups and are reasonable compared to market. We intend to continue to reference reasonable market practice for any future employment agreements or other arrangements.

a
Prohibit pledging and hedging of our securities - We have adopted a policy applicable to our directors, officers, any other individuals subject to the reporting requirements under Section 16 of the Exchange Act and any other designated employees (and any of their respective beneficially-owned entities), which prohibits:
pledging the Company’s securities for any purpose not approved by the Board of Directors or the Compensation Committee; and
engaging in short sales with respect to our securities, purchasing our securities on margin or otherwise hedging our securities, including through options or derivative transactions.(1)

a
Prohibit repricing of stock options - We have adopted a policy prohibiting the Board of Directors or the Compensation Committee from reducing the aggregate exercise, base or purchase price of any award granted under an equity incentive plan of the Company without the approval of the Company’s stockholders.

a
Adopted a clawback policy - On February 22, 2017, the Board of Directors, upon the recommendation from the Compensation Committee, adopted a clawback policy providing for the potential recoupment of officer compensation in the event the Company is required to prepare a financial restatement due to the material non-compliance of the Company with any financial reporting requirement. For additional information, see “Clawback Policy” below.
__________________________
(1)
The Company reported in previous years that under a legacy arrangement an executive officer held shares of the Company’s common stock in a margin account with a brokerage firm. This arrangement has been terminated and the executive officer no longer holds shares in such account.

What We Do Not Do
X
Gross up “golden parachute” excise taxes upon a change in control(2)
X
Gross up taxes on any standard perquisites or benefits in the future(2)
X
Provide special or supplemental retirement benefits to any executive
X
Grant long-term employment agreements exceeding three-year initial terms
__________________________
(2)
These benefits were provided to certain executives under legacy equity award and other agreements. None of the NEOs who joined the Company in 2015 received these benefits. For biographical information about these NEOs, including their start dates with the Company, see the biographical summaries under “Executive Officers” above.

Compensation Philosophy, Consultants and Peer Group

Philosophy. We believe that the quality, skills and dedication of our NEOs are critical factors that affect the long-term value of the Company. We therefore design our executive compensation program to attract and retain high quality executive officers and set compensation at levels that are comparable to those of other companies that operate in our industry or that compete for the same talent pool. In setting compensation, the Compensation Committee seeks to design an executive compensation program that strikes a balance between short-term and long-term objectives and contains a mix of personal, business and corporate goals. In developing an executive compensation program, the Compensation Committee also seeks to reward strong corporate performance but with defined parameters to avoid excessive risk, and reward individual and team performance. Our compensation philosophy seeks to link a significant portion of each executive officer’s total compensation to Company results that will create stockholder value in both the short and long term.
Consultants. To assist with the design of our executive compensation program as well as setting compensation levels, beginning in 2015, the Compensation Committee engaged Semler Brossy, an executive compensation consulting firm, as its compensation consultant to provide independent, third-party advice on executive compensation. Prior to retaining Semler Brossy (and on an annual basis), the Compensation Committee assessed the independence of Semler Brossy pursuant to the rules prescribed by the SEC and the NYSE and concluded that no conflict of interest existed that would prevent Semler Brossy from serving as an independent consultant to the Compensation Committee.
Competitive Benchmarking. The Compensation Committee, with the assistance of Semler Brossy, conducts an annual review of pay levels and practices for our NEOs relative to both a customized peer group of similar REITs as well as survey data published by the National Association of Real Estate Investment Trusts (NAREIT) for those executive positions that are not reported in public peer proxies with sufficient frequency to develop meaningful competitive benchmarks.

19




The public company peer group was developed in consultation with Semler Brossy based on an assessment of REITs with similar asset mix (retail, office and net-lease markets) and comparable size in terms of assets and total enterprise value as compared to the Company. The Compensation Committee evaluated the peer group with the assistance of Semler Brossy and did not make any changes to the peer group in evaluating 2016 pay practices. The Compensation Committee has approved the following peer group for purposes of assessing competitive pay practices: Boston Properties, Inc.; Brixmor Property Group, Inc.; DDR Corporation; Duke Realty Corporation; General Growth Properties, Inc.; HCP, Inc.; Kimco Realty Corporation; ProLogis, Inc.; Realty Income Corporation; Simon Property Group, Inc.; SL Green Realty Corp.; Spirit Realty Capital, Inc.; The Macerich Company; Ventas, Inc.; Vornado Realty Trust; Welltower Inc.; and W.P. Carey, Inc.

The Compensation Committee reviewed the compensation levels from the peer group for each component of pay: annual base salary, annual incentive bonus awards and long-term equity incentive awards (which included both time-based and performance-based restricted stock unit awards), and where available, used such data as a guide in its determination of total target direct compensation, the appropriate mix of equity vs. cash, long-term vs. short-term, and performance-based vs. time-based awards to be paid or granted to each NEO. The Compensation Committee considered each NEO’s level and job performance, his or her duties and responsibilities at the Company compared to the duties and responsibilities of executive officers in similar positions at the peer group companies and other circumstances unique to the Company, and evaluated whether the compensation elements and levels provided to our NEOs were generally appropriate relative to the compensation elements and levels provided to their counterparts at the peer groups. The Compensation Committee will consider both objective and subjective criteria to evaluate Company and individual performance, which allows it to exercise discretion and not rely solely on rigid formulas and quantitative analyses. Accordingly, the Compensation Committee does not formulaically tie compensation decisions to any particular range or percentile level of total compensation paid to executives at the peer group companies.
Stockholder Say-on-Pay Vote
 
We provide our stockholders with the opportunity to vote annually on a say-on-pay proposal. At our 2016 annual meeting of stockholders held on May 4, 2016, over 95% of the votes cast by stockholders on the advisory vote on executive compensation (the “say-on-pay proposal”) were in favor of the compensation of our NEOs. The Compensation Committee believes this favorable vote reflects the approval by our stockholders of the significant changes to our compensation and governance practices implemented in 2015, and affirms our stockholders’ support of our current approach to executive compensation.

Elements of Compensation
Our NEOs’ compensation currently consists of three components: base salary, annual incentive bonus awards (which generally consist of cash payments) and long-term equity incentive awards. Although we do not target a specific mix of pay, the majority of our executive officer compensation is in the form of variable pay (annual and long-term incentives) to emphasize our commitment to pay for performance.
Base Salary
The base salary payable to each NEO provides a fixed component of compensation that reflects the executive’s position and responsibilities based on market analysis. In February 2016, the Compensation Committee approved the following annual base salary amounts for each of the NEOs:
Glenn J. Rufrano
$1,000,000
Michael J. Bartolotta
$500,000
Lauren Goldberg
$475,000
Paul H. McDowell
$500,000
Thomas W. Roberts
$500,000
The NEOs’ base salaries remained the same in 2016 as compared to 2015, except for Ms. Goldberg whose base salary was increased by over 5% based on performance considerations, comparability of other Company executives and to further align it with the base salary of executives in a similar position in the external market.

20




Annual Incentive Bonus
The Company pays annual incentive bonuses in cash to reward executives for achieving or surpassing performance goals which are, in part, related to our key financial and operational objectives for the year and for execution of specific strategies of the Company. Annual bonuses are generally scheduled to be paid in March for the prior year’s performance. Each NEO has a target annual incentive bonus opportunity defined as a percentage of base salary, with the actual annual bonus determined based on a combination of discretionary financial and non-financial metrics as described in more detail below. None of the NEOs had a guaranteed minimum bonus. The maximum payout for any NEO may not exceed 150% of such officer’s target annual incentive bonus opportunity as described below.
In 2015, the Compensation Committee did not establish formal criteria for the annual incentive bonus program because many of our executives had joined the Company after the beginning of the 2015 fiscal year and because the Company’s business plan had not yet been fully developed. In February 2016, the Compensation Committee, with the advice of Semler Brossy, established a formal annual incentive bonus program. The program consists of a formulaic funding component tied to AFFO per share, which determines the overall bonus pool (the “Bonus Pool”) for the Company, as well as a discretionary assessment of each NEO’s individual performance based on certain financial, business and individual discretionary metrics which may be weighted as a percentage of the executive’s evaluation rating, as shown in the table below. The combined payouts for executives and other employees based on individual performance goals are allocated from the Bonus Pool funding.
38619089_proxygraphic2ver2017.jpg
Financial metrics generally consist of financial goals for the Company as a whole, whereas Key Business metrics may be targeted operational or strategic metrics related to a NEO’s area of responsibility. Individual Discretionary metrics are generally additional qualitative goals and objectives for each NEO. Although the Compensation Committee considers the achievement of certain financial, business and individual discretionary metrics for each NEO and the associated weightings, these weightings are discretionary and only provide general guidelines. As part of the Compensation Committee’s assessment, each NEO undergoes a review of his or her performance during the year, which includes Mr. Rufrano’s review of each executive’s performance. Based upon the executive’s performance and evaluation rating, his or her bonus can decrease or increase up to the maximum payout of 150% of target. Actual assessment and payout determinations are at the discretion of the Compensation Committee with input from the Chief Executive Officer for all executives other than himself. The assessment also takes into consideration each NEO’s adherence to our Core Values: Respectful, Ethical, Dedicated, Collaborative, and Hard Working. See below for additional information about items considered by the Compensation Committee as part of the individual assessments for each NEO.
2016 Bonus Pool Funding. To fund payouts under the annual incentive bonus program for all employees eligible to participate in the program (including the NEOs), the Company maintains a discretionary annual incentive Bonus Pool for 2016 with criteria that were established by the Compensation Committee in early 2016. Consistent with the Company’s stated business plan, including the intended completion of up to $1.0 billion of property dispositions in 2016, which goal the Company achieved, AFFO per share was expected to decrease in 2016 over 2015 results. The Bonus Pool, which is funded based on AFFO results, may increase or decrease depending upon the Company’s achievement of AFFO per share as follows:
If the Company achieves AFFO per diluted share of $0.76 to $0.82, the available Bonus Pool will fund at 100%.
If the Company achieves AFFO per diluted share above $0.82 and target dispositions of at least $800.0 million, the available Bonus Pool will increase by 10% for each one cent improvement in AFFO per diluted share above $0.82, up to a maximum available Bonus Pool of 150%.
If the Company achieves AFFO per diluted share below $0.76, the available Bonus Pool will decrease by 10% for each one cent decline in AFFO per diluted share below $0.76, assuming no material impact from any refinancing that was not included in the Company’s budget.
If the Company achieves AFFO per diluted share below $0.71, the available Bonus Pool (if any) is to be determined by the Compensation Committee.
In 2016, the Company achieved AFFO per diluted share of $0.78, and therefore the available Bonus Pool funded at 100%.

21




Financial Metrics. The Compensation Committee considered the following Company financial metrics for 2016 in determining all of the NEO’s actual annual bonus: (i) the Company achieved AFFO of $0.78 per share, which was within its stated public guidance range; (ii) Normalized EBITDA was $1.13 billion; and (iii) the Company achieved Net Debt to Normalized EBITDA of 5.66x, less than the Company’s stated objective of 6.0x to 7.0x.
Each of the above metrics are non-GAAP measures used by management to measure the financial performance of the Company. Additional information about each metric is provided in the “Non-GAAP Measures” section on pages 48-51 of the Company’s Annual Report on Form 10-K, filed with the SEC on February 23, 2017 or Exhibit 99.2 furnished with the Company’s Current Report on Form 8-K, filed with the SEC on February 23, 2017.

Key Business Metrics. In determining actual NEO payouts under the 2016 annual incentive bonus program, the Compensation Committee considered certain business metrics as applicable to each NEO’s primary area of responsibility. The various business metrics considered included, but were not limited to: the development and execution of a financing plan for the Company’s senior notes which were due February 2017; the Company’s achievement of an investment grade rating; the Company’s and Cole Capital’s dispositions and acquisitions; the Company’s achievement of certain operational metrics, such as tenant occupancy rates and same store contract rental revenue, weighted average lease term and the percentage of flat leases; and the Company’s achievement of certain financial metrics, such as unencumbered assets ratio, fixed charge coverage ratio, net debt leverage ratio and capital raise for the Cole REITs. Each individual NEO’s ability to manage operational expenses for his or her department was also considered.

Individual Discretionary Performance. The Compensation Committee considers the individual successes and goals of each NEO and seeks input from Mr. Rufrano as to each NEO’s performance during the year. Although Mr. Rufrano provides the Compensation Committee his assessment of each executive’s performance and achievements, the ultimate payout is determined by the Compensation Committee.
2016 Actual Annual Incentive Bonus Payouts. Based on an evaluation of the performance and contribution of each of the NEOs, and notably the accomplishments outlined above under “Summary of 2016 Financial and Operational Results,” the Compensation Committee approved an annual bonus for each of Messrs. Rufrano, Bartolotta, McDowell and Roberts and Ms. Goldberg.
The following table shows the target annual incentive bonus percentages for 2016 for each of our NEOs and the actual award earned. For each of the NEOs, the target annual bonus is a percentage of the executive’s base salary with the initial percentage set forth in his or her employment agreement. No changes were made to the target bonuses as a percentage of salary in 2016. The actual annual incentive bonus that each NEO received for 2016 is determined by the Compensation Committee and was paid in cash in March 2017. These bonus amounts are reported in “Summary Compensation Table - Bonus Compensation” below.
Name
Target Annual Bonus
(as a % of Base Salary)
 
Target Annual Bonus
($)
 
Actual Annual Bonus
(as a % of Target)
 
Actual Annual Bonus
($)
Glenn J. Rufrano
150%
 
$1,500,000
 
100%
 
$1,500,000
Michael J. Bartolotta
125%
 
$625,000
 
116%
 
$725,000
Lauren Goldberg
100%
 
$475,000
 
111%
 
$525,000
Paul H. McDowell
100%
 
$500,000
 
110%
 
$550,000
Thomas W. Roberts
100%
 
$500,000
 
120%
 
$600,000
The Compensation Committee in its discretion considered the Company’s and each NEO’s performance in 2016 in determining actual payouts under the annual incentive bonus program. In addition to the items described above, the Compensation Committee considered the following as part of the individual assessments for each executive:
Mr. Rufrano
Continued to successfully execute the Company’s business plan, helping lead the Company to strong operating results.
Successfully developed and executed on a plan to access the capital markets, including through an upsized $1.0 billion bond offering, the redemption of $1.3 billion of senior notes due February 2017, and an equity offering netting the Company approximately $702.5 million in proceeds.
Improved the Company’s corporate credit rating.
Exceeded the high end of the Company’s disposition guidance range.
Expanded the Company’s investor base.
Continued to foster a culture of compliance and transparency.

22




Mr. Bartolotta
Demonstrated successful access to the capital markets through an upsized $1.0 billion bond offering and $300.0 million term loan at near investment grade pricing, which allowed for the redemption of $1.3 billion of senior notes due February 2017 and improved the duration of our debt outstanding.
Maintained unencumbered assets greater than 60% and a fixed charge coverage ratio above 2.2x, consistent with the Company’s business plan.
Established a continuous offering program pursuant to which the Company can offer and sell its common stock in “at-the-market” offerings or certain other transactions up to an aggregate $750.0 million from time to time as determined by the Company.
Successfully completed an equity offering, netting the Company approximately $702.5 million in proceeds.
Launched a new Cole REIT.
Successfully managed operating expenses for the Company’s information technology, accounting and finance departments.
Continued to foster a culture of compliance and transparency.
Ms. Goldberg
Successfully launched our universal shelf registration statement on Form S-3 which enabled our successful access to the capital markets, including through an upsized $1.0 billion bond offering and $300.0 million term loan at near investment grade pricing, which allowed for the redemption of $1.3 billion of the senior notes due February 2017 and improved the duration of our debt outstanding.
Established a continuous offering program pursuant to which the Company can offer and sell its common stock in “at-the-market” offerings or certain other transactions up to an aggregate $750.0 million from time to time as determined by the Company.
Successfully completed an equity offering, netting the Company approximately $702.5 million in proceeds.
Launched a new Cole REIT.
Supervised and oversaw key corporate initiatives, including managing the Company’s annual stockholder meeting, administering the Company’s 401(k) program and planning enterprise risk assessment.
Successfully managed operating expenses for the legal, compliance and risk management departments.
Managed litigation costs below expected amounts.
Continued to foster a culture of compliance and transparency.
Mr. McDowell
Maintained tenant occupancy rates above 98.0% and an increase in same store contract rental revenue (excluding Ovation Brands, Inc.) for each quarter during the year.
Improved real property diversification between retail, restaurants, industrial and distribution and office properties.
Achievements with respect to tenants with an investment grade rating and efforts towards extending the Company’s weighted average lease term and reduction of flat leases.
Successfully managed operating expenses for the Company’s real estate operations departments.
Continued to foster a culture of compliance and transparency.

Mr. Roberts
Achieved dispositions above the high end of the Company’s disposition guidance range, including the successful disposition of 70 Red Lobster® restaurants, thereby managing market and credit concentration risk.
Acquired controlling financial interests in eight commercial properties for $100.2 million, which lead the way as the Company transitions to acquiring assets for the balance sheet in 2017.
Managed $660.2 million in acquisitions and $31.6 million in dispositions for the Cole REITs.
Successfully managed internal acquisition and disposition expenses.
Achievements with respect to tenants with an investment grade rating and efforts towards extending the Company’s weighted average lease term, as well as property diversification generally, within the Company’s stated public ranges.
Continued to foster a culture of compliance and transparency.


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Long-Term Equity Incentive Awards
The objectives of the Company’s long-term incentive compensation program are to:
Reward achievement over a multi-year period;
Align the interests of executives with those of stockholders by focusing executives on the stockholder return performance of the Company; and
Provide a retention mechanism through multi-year vesting.
The long-term equity incentive opportunity for the 2016 executive compensation program consisted of a mix of performance-based and time-based equity awards. For Mr. Rufrano, the mix of annual equity awards in 2016 was two-thirds performance based and one-third time based and for all other NEOs, the mix of annual equity awards in 2016 was one-half performance based and one-half time based. The potential maximum payout for the performance based equity awards in 2016 was reduced to 160% from 200% in 2015 in order to provide a better balance between pay-for-performance and the accounting costs of the performance-based equity awards, which was lowered by reducing the upside opportunity. Mr. Rufrano has a minimum target long-term equity incentive award set forth in his employment agreement, described below under “Compensation Tables - Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table,” and for the other NEOs, their individual long-term equity incentive award was determined by the Compensation Committee.
The restricted stock units that are subject to time-based vesting will vest in equal installments on each of the first three anniversaries of the grant date. The restricted stock units that are subject to performance-based vesting will vest based on the achievement of certain performance conditions over a three-year performance period, subject to review and approval by the Compensation Committee.
As set forth below, all performance-based equity awards granted to the NEOs are eligible to vest in a number of restricted stock units ranging from 0% to 160% of the total number of restricted stock units granted, 50% of which are based on the Company’s TSR relative to the TSR of the FTE NAREIT All Equity REITs Index, a market capitalization-weighted index of U.S. equity REITs (the “NAREIT Equity Market Index”) during the performance period of January 1, 2016 to December 31, 2018, and 50% of which are based on the Company’s TSR relative to the stockholder return of the peer group during the performance period, subject to each executive’s continued service. Use of the NAREIT Equity Market Index ensures that performance against the broader industry is taken into consideration while use of the following smaller net lease peer group ensures performance against peers more closely aligned to the Company is considered as well. For purposes of relative total stockholder return, the Company selected REITs that are in the triple net lease business for inclusion in the performance peer group consisting of: Realty Income Corporation, National Retail Properties, Inc., W.P. Carey, Inc., Lexington Realty Trust, Agree Realty Corp., Spirit Realty Capital, Inc. and STORE Capital Corporation. TSR means the stock price appreciation from the beginning of the period, plus dividends and distributions declared (assuming such dividends or distributions are reinvested in common stock) during the period, expressed as a percentage return. If performance falls between the points specified below, the percentage of restricted stock units that will vest will be determined using linear interpolation between such points.
NAREIT Equity Market Index (50% Weighting)
Company TSR Percentile
 
Vesting Percentage
(as a percentage of Target Award)
> 65th Percentile
 
160%
60th Percentile
 
130%
55th Percentile
 
100%
45th Percentile
 
75%
> 35th Percentile
 
50%
< 35th Percentile
 
0%


24




Peer Group (50% Weighting)

Company TSR vs. Peer Group 55th Percentile
(Percentage Point Difference)
 
Vesting Percentage
(as a percentage of Target Award)
> + 6% points
 
160%
+ 3% points
 
130%
0% points (performance = 55th percentile)
 
100%
-2.5% points
 
75%
> -5% points
 
50%
< -5% points
 
0%

Both the time-based and performance-based restricted stock units include an individual’s right to receive dividend equivalent rights with respect to the shares subject to the award, which are subject to the same vesting conditions as the underlying shares.
Equity awards granted to the NEOs under the Equity Plan in 2016 are included under “Compensation Tables-Grants of Plan Based Awards.”
Executive Equity Ownership Guidelines
In order to further foster the strong ownership culture among our senior executive management team and ensure the continued direct alignment of management and stockholder interests, and consistent with emerging corporate governance trends, we have adopted executive equity ownership guidelines requiring that our executive officers maintain a minimum ownership level of equity in the Company. The equity ownership requirements for our executives are as follows:
Chief Executive Officer
 
6 times his annual base salary
Chief Financial Officer
 
3 times his annual base salary
All Other Executive Officers
 
2 times their annual base salary
Executive officers have five years from the date of becoming an executive officer to satisfy the ownership requirement. To the extent an officer has not achieved compliance with these guidelines, he or she is required to hold 70% of any vested equity awards (exclusive of any shares withheld to satisfy tax withholding obligations). As of December 31, 2016, all of the officers subject to the equity ownership guidelines either met the requirements or were within the permitted period to satisfy the ownership requirements.
We have also adopted equity ownership guidelines for our Board of Directors. See “Compensation of the Board of Directors — Director Stock Ownership Guidelines.”
Employment Agreements
The Company has entered into an employment agreement with each of our NEOs. These agreements provide for a minimum base salary, an initial target annual incentive bonus opportunity, as well as long-term equity incentive awards that will be determined on the same basis as equity awards made generally to other senior executives of the Company. See “Compensation Tables — Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table” for additional information about the employment agreements.
In addition, the employment agreements provide for reasonable severance benefits upon involuntary termination of employment or termination by the executive for Good Reason as defined in the agreement (including for Mr. Rufrano upon termination within a Change in Control Period, as defined in his employment agreement). The Compensation Committee believes that such reasonable severance policies serve the interests of the stockholders as they reduce the risk and uncertainty for our executives, enabling them to focus on their duties without the distraction of worrying about their own employment status during times of transition. See “Payments Upon Termination or Change in Control” for additional information about these reasonable severance benefits.
Clawback Policy
On February 22, 2017, the Board of Directors, upon a recommendation from the Compensation Committee, adopted a clawback policy in advance of the SEC adopting final rules and regulations related thereto, as the Board determined that it was in the best interests of the Company and its stockholders to adopt such a policy providing for the recoupment of officer compensation in the event the Company is required to prepare a financial restatement due to the material non-compliance of the Company with any

25




financial reporting requirement. In such an event, the Compensation Committee may require any of the Company’s officers subject to the reporting requirements of Section 16 of Exchange Act to repay or forfeit to the Company that part of his or her incentive compensation received by the officer during the three-year period preceding the publication of the restated financial statements.

Analysis of Risk Associated with Our Executive Compensation Program
Our Compensation Committee has discussed the concept of risk as it relates to our executive compensation program and the Compensation Committee does not believe our executive compensation program encourages excessive or inappropriate risk taking for the reasons stated below.
We structure our pay to consist of both fixed and variable compensation. The fixed portion (base salary) of compensation is designed to provide a base level of income regardless of our financial or share price performance. The variable portions of compensation (cash incentive and equity) are designed to encourage and reward both short and long-term corporate performance. For short-term performance, cash incentives are awarded based on assessments of performance during the prior year. For long-term performance, equity awards generally vest over three years and only have value over certain time periods or if certain performance criteria are met. We believe that these variable elements of compensation are a sufficient percentage of total compensation to provide incentives to executives to produce superior short and long-term corporate results, while the fixed element is also sufficiently high that the executives are not encouraged to take unnecessary or excessive risks in doing so.
As demonstrated above, our executive compensation program is structured to achieve its objectives by (i) providing incentives to our NEOs to manage the Company for the creation of long-term stockholder value, (ii) avoiding the type of disproportionately large short-term incentives that could encourage our NEOs to take risks that may not be in the Company’s long-term interests, (iii) requiring our NEOs to maintain a significant investment in the Company and (iv) evaluating annually an array of performance criteria in determining executive compensation rather than focusing on a single metric.
Deductibility of Executive Compensation
The Compensation Committee’s policy is to consider the tax treatment of compensation paid to our executive officers while simultaneously seeking to provide our executives with appropriate rewards for their performance. Under Section 162(m) of the Code, a publicly-held corporation may not deduct compensation of more than $1.0 million paid to any “covered employee” unless certain exceptions are met, primarily relating to performance-based compensation. Substantially all of the services rendered by our executive officers are performed on behalf of the Operating Partnership, of which we are the sole general partner (or its subsidiaries, including one or more of our taxable REIT subsidiaries). The Internal Revenue Service has issued a series of private letter rulings which indicate that compensation paid by an operating partnership to executive officers of a REIT that serves as its general partner is not subject to the limitation under Section 162(m) to the extent such compensation is attributable to services rendered to the operating partnership. We have not obtained a ruling on this issue, but have no reason to believe that the same conclusion would not apply to us. To the extent, however, that compensation paid to our executive officers becomes subject to and does not qualify for deduction under Section 162(m), our Compensation Committee is prepared to exceed the limit on deductibility under Section 162(m) to the extent necessary to establish compensation programs that we believe provide appropriate incentives and reward our executives relative to their performance.


26




COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
Compensation Committee*
Julie G. Richardson (Chairperson)
Mark S. Ordan
________________________
* Bruce D. Frank served as a member of the Compensation Committee during the year ended December 31, 2016 through his resignation on February 23, 2017.

27




COMPENSATION TABLES
Summary Compensation Table
The following table summarizes the total compensation paid to or earned by our NEOs for the years ended 2016, 2015 and 2014.
Name and Principal Position
 
Year
 
Salary(1)
($)
 
Bonus
($)(2)
 
Stock Awards(3)
($)
 
All Other Compensation(4)
($)
 
Total Compensation
($)
Glenn J. Rufrano(5)
Chief Executive Officer
 
2016
 
1,000,000
 
1,500,000
 
5,651,730
 
70,329

 
8,222,059
 
2015
 
750,000
 
1,500,000
 
6,545,845
 
75,820

 
8,871,665
Michael J. Bartolotta(6)
Executive Vice President (“EVP”), Chief Financial Officer
 
2016
 
500,000
 
725,000
 
860,828
 
19,769

 
2,105,597
 
2015
 
121,154
 
468,750
 
712,666
 
9,661

 
1,312,231
Lauren Goldberg(7)
EVP, General Counsel and Secretary
 
2016
 
470,833
 
525,000
 
813,005
 
16,329

 
1,825,167
 
2015
 
269,423
 
450,000
 
659,233
 
28,906

 
1,407,562
Paul H. McDowell
EVP, Chief Operating Officer
 
2016
 
499,518
 
550,000
 
836,909
 
69,008

 
1,955,435
 
2015
 
497,110
 
500,000
 
341,014
 
66,021

 
1,404,145
 
2014
 
435,235
 
300,000
 
244,916
 
48,044

 
1,028,195
Thomas W. Roberts
EVP, Chief Investment Officer
 
2016
 
500,000
 
600,000
 
1,147,766
 
101,122

 
2,348,888
 
2015
 
475,000
 
500,000
 
1,136,729
 
70,528

 
2,182,257
 
2014
 
389,146
 
1,896,921
 
2,787,291
 
123,016

 
5,196,374
__________________________
(1)
Reflects actual salary earned while employed by the Company.
(2)
Represents performance-based annual incentive cash bonuses that were earned during the specified year and paid in the following year. See “Compensation Discussion and Analysis-Elements of Compensation-Annual Incentive Bonus” for a discussion of each NEO’s actual cash bonus relative to his or her target bonus for 2016.
(3)
Reflects the grant date fair value of stock awards computed in accordance with ASC Topic 718, without regard to forfeitures. For further information on how we account for stock-based compensation and the assumptions used, see “Note 17 - Equity-based Compensation” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on February 23, 2017. These amounts reflect the Company’s accounting expense for these awards and do not correspond to the actual values, if any, that will be realized by the executives. The underlying grants are presented in further detail in the “Grants of Plan-Based Awards” table below. The maximum payouts under the 2016 performance-based portion of the equity awards for each of the NEOs, based upon the grant date fair value of stock awards computed in accordance with ASC Topic 718, without regard to forfeitures, would be as follows: Mr. Rufrano - $5.8 million, Mr. Bartolotta - $0.7 million, Ms. Goldberg - $0.6 million, Mr. McDowell - $0.6 million and Mr. Roberts - $0.9 million.
(4)
The table below shows the components of “All Other Compensation” for 2016, which includes dividends or dividend equivalents paid on stock awards, 401(k) matching contributions and other taxable fringe benefits.
Name
 
Dividends/Dividend Equivalents Paid on Stock Awards
($)
 
 
401(k) Match($)
 
Other($)±
 
Total($)
Glenn J. Rufrano
 
46,937

 
 
6,750

 
16,642

 
70,329

Michael J. Bartolotta
 
5,275

 
 
6,750

 
7,744

 
19,769

Lauren Goldberg
 
3,039

 
 
6,750

 
6,540

 
16,329

Paul H. McDowell
 
5,341

 
 
6,750

 
56,917

* 
69,008

Thomas W. Roberts
 
87,449

 
 
6,750

 
6,923

 
101,122

__________________________
*Includes the Company’s reimbursement of Mr. McDowell’s annual life insurance premium provided for under his legacy employment agreement.
± Includes the long-term and short-term disability and group term life insurance premiums paid by the Company.


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(5)
Mr. Rufrano commenced his employment on April 1, 2015.
(6)
Mr. Bartolotta commenced his employment on October 5, 2015.
(7)
Ms. Goldberg commenced her employment on May 26, 2015.


Grants of Plan-Based Awards
The following table sets forth information with respect to the awards granted to NEOs during the fiscal year ended December 31, 2016.
Name
 
Grant Date
 
Approval Date
 
Estimated Future Payouts
under Equity Incentive Plan
Awards(1)
 
All Other Stock Awards: Number of Shares of Stock or Units (#)(2)
 
Grant Date Fair Value of Stock and Option Awards
($)(3)
 
Threshold
(#)
 
Target
(#)
 
Maximum
(#)
 
Glenn J. Rufrano
 
02/23/2016
 
02/22/2016
 
128,041

 
512,164

 
819,462

 

 
3,651,729

 
02/23/2016
 
02/22/2016
 

 

 

 
256,082

 
2,000,000

Michael J. Bartolotta
 
02/23/2016
 
02/22/2016
 
14,405

 
57,619

 
92,190

 

 
410,823

 
02/23/2016
 
02/22/2016
 

 

 

 
57,619

 
450,004

Lauren Goldberg
 
02/23/2016
 
02/22/2016
 
13,605

 
54,418

 
87,069

 

 
388,000

 
02/23/2016
 
02/22/2016
 

 

 

 
54,418

 
425,005

Paul H. McDowell
 
02/23/2016
 
02/22/2016
 
14,005

 
56,018

 
89,629

 
 
 
399,408

 
02/23/2016
 
02/22/2016
 
 
 
 
 
 
 
56,018

 
437,501

Thomas W. Roberts
 
2/23/2016
 
02/22/2016
 
19,206

 
76,825

 
122,920

 

 
547,762

 
2/23/2016
 
02/22/2016
 

 

 

 
76,825

 
600,003

__________________________
(1)
Represents performance-based restricted stock units granted under the Equity Plan during 2016. These restricted stock units vest based on the achievement of certain performance conditions, which are based on the Company’s TSR relative to its peers and the NAREIT Equity Market Index over a three-year period from January 1, 2016 to December 31, 2018. These amounts exclude dividend equivalent rights which are eligible to vest upon the conclusion of the applicable performance period. The target and maximum amounts correspond to the number of restricted stock units that would have been earned in the event that specified performance goals were achieved. For more information on performance-based restricted stock units, see “Compensation Discussion and Analysis-Elements of Compensation-Long-Term Equity Incentive Award.”
(2)
Represents time-based restricted stock units granted under the Equity Plan during 2016. These restricted stock units vest in equal installments on each of the first three anniversaries of the grant date. For more information on time-based restricted stock units, see “Compensation Discussion and Analysis-Elements of Compensation-Long-Term Equity Incentive Award.” 
(3)
Represents time-based and performance-based restricted stock units granted under the Equity Plan during 2016. The grant date fair value of each award was computed in accordance with ASC Topic 718, without regard to forfeitures. These amounts reflect the Company’s accounting expense for these awards and do not correspond to the actual values, if any, that will be realized by the NEOs.


Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Below is a summary of the employment agreements with our NEOs.
Glenn J. Rufrano
Pursuant to an employment agreement with the Company, effective as of April 1, 2015 and with a three-year term, Mr. Rufrano will receive an annual base salary of not less than $1,000,000. Commencing in 2016, Mr. Rufrano’s base salary will be reviewed at least annually to determine if his base salary should be increased in the discretion of the Compensation Committee. Mr. Rufrano will also be eligible to receive an annual cash bonus with an initial target annual payment equal to 150% of his annual base salary based upon the achievement of performance goals established by the Compensation Committee. Mr. Rufrano will receive an annual long-term incentive equity award with respect to shares of common stock for each calendar year during the term of his employment (an “Annual LTI Award”). Pursuant to his employment agreement, in 2016, the Annual LTI Award was in the form of restricted stock units and had a target fair market value as of the date of the grant of $6,000,000. Subject to Mr. Rufrano’s continued

29




employment, one-third of each of the Annual LTI Awards was subject to time-based vesting in equal installments on each of the first three anniversaries of the grant date, and two-thirds of each such award will vest based on the achievement of certain performance conditions as described above under “Compensation Discussion and Analysis - Long-Term Equity Incentive Awards.” Annual LTI Awards include Mr. Rufrano’s right to receive dividend equivalent rights with respect to the shares subject to the award, which will be subject to the same vesting conditions as the underlying shares.
Mr. Rufrano is subject to non-compete and non-solicitation for a period of two years after his termination of employment (or for a period of one year thereafter, in the event that the Company does not renew Mr. Rufrano’s employment term other than during a Change in Control Period (as defined in his employment agreement)).
Michael J. Bartolotta
Pursuant to an employment agreement with the Company, effective as of October 5, 2015, Mr. Bartolotta is entitled to a minimum annual base salary of $500,000 and is eligible to receive an initial target annual cash bonus equal to 125% of his base salary. Mr. Bartolotta is also eligible to receive annual long-term incentive equity awards for each calendar year of employment, as may be determined by the Compensation Committee in consultation with the Chief Executive Officer and will be determined on the same basis as equity awards made generally to other senior executives of the Company.
Mr. Bartolotta is subject to twelve months of non-compete and non-solicitation following the termination of his employment.
Lauren Goldberg
Pursuant to an employment agreement with the Company, effective as of May 26, 2015, as amended on February 23, 2016, Ms. Goldberg is entitled to receive a minimum annual base salary of $450,000 and is eligible to receive an initial target annual bonus equal to 100% of her base salary. She will be eligible to receive annual long-term equity awards for each calendar year of employment, as may be determined by the Compensation Committee in consultation with the Chief Executive Officer and will be determined on the same basis as equity awards made generally to other senior executives of the Company.
Ms. Goldberg is subject to twelve months of non-compete and non-solicitation following the termination of her employment.
Paul H. McDowell
Effective as of February 23, 2016, Mr. McDowell and the Company entered into an amended and restated employment agreement which superseded and replaced in all respects the prior employment agreement with the Company, effective as of January 8, 2014. Pursuant to the employment agreement, Mr. McDowell is entitled to receive a minimum annual base salary of $500,000 and is eligible to receive an initial target annual bonus equal to 100% of his base salary. He will be eligible to receive annual long-term equity awards for each calendar year of employment, as may be determined by the Compensation Committee in consultation with the Chief Executive Officer and will be determined on the same basis as equity awards made generally to other senior executives of the Company.
Mr. McDowell is subject to twelve months of non-compete and non-solicitation following the termination of his employment.
Thomas W. Roberts
Effective as of February 23, 2016, Mr. Roberts and the Company entered into an amended and restated employment agreement which superseded and replaced in all respects his prior employment agreement with the Company, effective as of April 1, 2015. Pursuant to his employment agreement, Mr. Roberts is entitled to receive a minimum annual base salary of $500,000 and is eligible to receive an initial target annual bonus of up to 100% of his base salary. Mr. Roberts is also eligible to receive annual long-term incentive equity awards for each calendar year of employment, as may be determined by the Compensation Committee in consultation with the Chief Executive Officer and will be determined on the same basis as equity awards made generally to other senior executives of the Company.
Mr. Roberts is subject to twelve months of non-compete and non-solicitation following the termination of his employment.
Outstanding Equity Awards at Fiscal Year End
The following table provides a summary of restricted shares of common stock or restricted stock units issued to NEOs, which had not vested as of December 31, 2016. The market value of restricted stock and restricted stock unit awards is based on the closing price of the Company’s common stock on December 30, 2016, the last business day of the 2016 fiscal year, which was $8.46.

30




 
 
Stock Awards
Name
 
Number of Shares or Units of Stock That Have Not Vested (#)(1)
 
Market Value of Shares or Units of Stock That Have Not Vested ($)
 
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2)
 
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
Glenn J. Rufrano
 
483,652

 
4,091,696

 
580,435

 
4,910,480

Michael J. Bartolotta
 
76,800

 
649,728

 
72,005

 
609,162

Lauren Goldberg
 
69,151

 
585,017

 
65,468

 
553,859

Paul H. McDowell
 
68,566

 
580,068

 
61,138

 
517,227

Thomas W. Roberts
 
190,884

 
1,614,879

 
93,893

 
794,335

__________________________
(1)
The following table presents by grant date such number of shares of time-based restricted stock and restricted stock units outstanding, including the applicable vesting conditions, as of December 31, 2016. Awards will generally vest in equal installments on the anniversary of the date of grant over the applicable vesting period as noted below.

Name
 
Grant Date
 
Type of Award
 
Number of Time-Based Shares or Restricted Stock Units That Have Not Vested (#)
 
Ratable Vesting on the Anniversary of the Grant Date for the Following Years
Glenn J. Rufrano
 
February 23, 2016
 
Restricted Stock Units
 
256,082

 
Three
 
 
May 11, 2015
 
Restricted Stock Units
 
227,570

 
Three*
Michael J. Bartolotta
 
February 23, 2016
 
Restricted Stock Units
 
57,619

 
Three
 
 
October 5, 2015
 
Restricted Stock Units
 
19,181

 
Three
Lauren Goldberg
 
February 23, 2016
 
Restricted Stock Units
 
54,418

 
Three
 
 
May 26, 2015
 
Restricted Stock Units
 
14,733

 
Three
Paul H. McDowell
 
February 23, 2016
 
Restricted Stock Units
 
56,018

 
Three
 
 
April 1, 2015
 
Restricted Stock Units
 
6,827

 
Three
 
 
March 17, 2014
 
Restricted Stock
 
5,721

 
Three
Thomas W. Roberts
 
February 23, 2016
 
Restricted Stock Units
 
76,825

 
Three
 
 
May 11, 2015
 
Restricted Stock Units
 
22,757

 
Three*
 
 
October 15, 2014
 
Restricted Stock
 
56,241

 
Three
 
 
February 14, 2014
 
Restricted Stock
 
35,061

 
Five

__________________________
*Such restricted stock units vest in three equal installments on each of the first, second and third anniversaries of April 1, 2015.

(2)
Represents restricted stock units that will vest subject to the achievement of certain performance conditions at threshold levels for awards granted in 2015 and at target levels for awards granted in 2016. The performance conditions are based on the Company’s TSR relative to its peers and the NAREIT Equity Market Index. The performance period for awards granted in 2016 is January 1, 2016 to December 31, 2018 and is April 1, 2015 to December 31, 2017 for awards granted in 2015.



31




Stock Vested
The following table provides a summary of the restricted shares of common stock and restricted stock units issued to NEOs, which vested during the fiscal year ended December 31, 2016.
Name
Number of
Shares Acquired
on Vesting (#)
 
Value Realized
on Vesting ($)(1)
Glenn J. Rufrano
113,786

 
996,765

Michael J. Bartolotta
9,591

 
92,457

Lauren Goldberg
7,367

 
69,839

Paul H. McDowell
9,135

 
79,164

Thomas W. Roberts
79,307

 
730,533

__________________________
(1)
Value realized on vesting is calculated based on the per share closing market price of the Company’s common stock on the vesting date, which ranged from $7.30 per share to $9.70 per share.


PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Employment Agreements
Below is a summary of the employment agreements with our NEOs and the potential payments to each NEO upon his or her termination, including in connection with a change in control.
Glenn J. Rufrano
Mr. Rufrano is party to an employment agreement with the Company which became effective on April 1, 2015. Details of his termination scenarios are presented below.
Death or Disability. If Mr. Rufrano’s employment is terminated due to his death or at the election of the Company due to his Disability (as defined in his employment agreement), Mr. Rufrano will be entitled to “Accrued Benefits” comprised of (i) any earned and accrued but unpaid base salary through the termination date, (ii) reimbursement for any unreimbursed business expenses incurred through the termination date and (iii) all other applicable payments or benefits to which Mr. Rufrano is entitled under the terms of any applicable compensation arrangement, benefit plan or program. Mr. Rufrano will also be entitled to any accrued but unpaid annual cash bonus for the year prior to the year of termination, if applicable, and all outstanding and unvested equity award granted to Mr. Rufrano will vest on a pro rata basis calculated by dividing the number of whole months elapsed from the issuance of the award until the termination date by the number of whole months in the applicable vesting period for such time-based award or the performance measurement period of a performance-based award (with performance criteria assumed to be achieved at target levels).
Termination by the Company without Cause or Resignation for Good Reason (other than during a Change in Control Period). If Mr. Rufrano’s employment is terminated other than during the period beginning 120 days prior to, and ending 24 months following, a Change in Control (as defined in his employment agreement) by the Company without Cause (as defined in his employment agreement) or if Mr. Rufrano resigns for Good Reason (as defined in his employment agreement), Mr. Rufrano will be entitled to (i) Accrued Benefits, (ii) any earned and accrued but unpaid annual cash bonus for the year prior to the year of termination, (iii) an amount equal to two times the sum of his then-effective annual base salary and target annual cash bonus for the year of termination (provided that for purposes of calculating this amount, the target annual cash bonus shall not be less than 150% of Mr. Rufrano’s annual rate of base salary amount), (iv) vesting of 100% (or, after the initial three-year term of the agreement, a pro rata portion) of his then-outstanding unvested equity awards (with performance criteria assumed to be achieved at target levels) and (v) continued group medical coverage until the earlier of 18 months following the termination date or such time as Mr. Rufrano secures other medical coverage.
Termination by the Company without Cause or Resignation for Good Reason (during a Change in Control Period). If Mr. Rufrano’s employment is terminated during a Change in Control Period by the Company without Cause or due to the non-renewal of the employment agreement by the Company or if Mr. Rufrano resigns for Good Reason, Rufrano will be entitled to (i) Accrued Benefits, (ii) any earned and accrued but unpaid annual cash bonus for the year prior to the year of termination, (iii) an amount equal to three times the sum of his then-effective annual base salary and target annual cash bonus for the year of termination (provided that for purposes of calculating this amount, the target annual cash bonus shall not be less than 150% of Mr. Rufrano’s

32




annual rate of base salary amount) and (iv) vesting of 100% of his then-outstanding unvested equity awards (with performance criteria assumed to be achieved at target levels).
Termination by the Company for Cause, Resignation without Good Reason or Non-Renewal by Mr. Rufrano. If Mr. Rufrano’s employment is terminated by the Company for Cause, by Mr. Rufrano without Good Reason or upon the non-renewal of the employment term by Mr. Rufrano, the Company will pay Mr. Rufrano only Accrued Benefits and Mr. Rufrano will forfeit all unvested equity awards.
Termination by Non-Renewal by the Company. If Mr. Rufrano’s employment is terminated upon the non-renewal of the employment agreement by the Company (other than during a Change in Control Period), Mr. Rufrano will be entitled to (i) Accrued Benefits, (ii) any earned and accrued but unpaid annual cash bonus for the year prior to the year of termination and (iii) an amount equal to the sum of his annual base salary and target annual cash bonus (payable in installments).
In order to receive the payments under his employment agreement (excluding any Accrued Benefits Mr. Rufrano may be entitled to receive), Mr. Rufrano must execute and not revoke a general release and waiver agreement which includes a confirmation of his confidentiality, non-competition and non-solicitation obligations of his employment agreement.
Michael J. Bartolotta
Mr. Bartolotta is party to an employment agreement with the Company which became effective on October 5, 2015. Details of his termination scenarios are presented below.
Death or Disability. If Mr. Bartolotta’s employment is terminated due to his death or disability, then Mr. Bartolotta will be entitled to “Accrued Benefits” comprised of (i) any unpaid base salary through the termination date, (ii) reimbursement for any unreimbursed business expenses incurred through the termination date and (iii) all other payments or benefits to which Mr. Bartolotta is entitled under the terms of any applicable compensation arrangement or benefit plan or program. Mr. Bartolotta will also be entitled to any accrued but unpaid annual bonus for the year prior to the year of termination, if applicable, and any outstanding equity awards granted to Mr. Bartolotta prior to the third anniversary of the effective date of his employment agreement will vest on a pro rata basis calculated by dividing the number of whole months elapsed from the issuance of the award until the termination date by the number of whole months in the applicable vesting period for such time-based award or the performance measurement period of a performance-based award (with performance criteria assumed to be achieved at target levels).
Termination by the Company without Cause or by Mr. Bartolotta for Good Reason. If Mr. Bartolotta’s employment is terminated by the Company without Cause (as defined in his employment agreement) or by Mr. Bartolotta for Good Reason (as defined in his employment agreement), then Mr. Bartolotta will be eligible to (i) the Accrued Benefits, (ii) any accrued but unpaid annual bonus for the year prior to the year of termination, (iii) an amount equal to the sum of his annual base salary and target bonus for the year of termination and (iv) continued medical coverage, at the same cost to Mr. Bartolotta as if he were an active employee, until the earliest of: (x) one year following the date of the termination; (y) such time as Mr. Bartolotta secures other medical coverage or (z) the end of the COBRA continuation period. In addition, all outstanding equity awards granted to Mr. Bartolotta prior to the third anniversary of the effective date of his employment agreement will vest in full for unvested time-based equity awards and will vest at target levels for unvested performance-based equity awards (assuming the performance criteria had been achieved at target levels for such period).
In order to receive the payments under his employment agreement (excluding any Accrued Benefits Mr. Bartolotta may be entitled to receive), Mr. Bartolotta must execute and not revoke a general release and waiver agreement which includes a confirmation of his confidentiality, non-competition and non-solicitation obligations of his employment agreement.
Termination by the Company for Cause or Resignation without Good Reason. If Mr. Bartolotta’s employment is terminated by the Company for Cause or Mr. Bartolotta voluntarily resigns without good reason, then Mr. Bartolotta will be entitled only to Accrued Benefits and he will forfeit all unvested equity awards.
Lauren Goldberg
Ms. Goldberg is party to an employment agreement with the Company which became effective on May 26, 2015, as amended on February 23, 2016. Details of her termination scenarios are presented below.
Death or Disability. If Ms. Goldberg’s employment is terminated due to her death or disability, then Ms. Goldberg will be entitled to “Accrued Benefits” comprised of (i) any unpaid base salary through the termination date, (ii) reimbursement for any unreimbursed business expenses incurred through the termination date and (iii) all other payments or benefits to which Ms. Goldberg is entitled under the terms of any applicable compensation arrangement or benefit plan or program. Ms. Goldberg will also be entitled to any accrued but unpaid annual bonus for the year prior to the year of termination, if applicable, and any outstanding

33




equity awards granted to Ms. Goldberg prior to the third anniversary of the effective date of her employment agreement will vest on a pro rata basis calculated by dividing the number of whole months elapsed from the issuance of the award until the termination date by the number of whole months in the applicable vesting period for such time-based award or the performance measurement period of a performance-based award (with performance criteria assumed to be achieved at target levels).
Termination by the Company without Cause or by Ms. Goldberg for Good Reason. If Ms. Goldberg’s employment is terminated by the Company without Cause (as defined in her employment agreement) or by Ms. Goldberg for Good Reason (as defined in her employment agreement), then Ms. Goldberg will be entitled to (i) the Accrued Benefits, (ii) any accrued but unpaid annual bonus for the year prior to the year of termination, (iii) an amount equal to the sum of her annual base salary and target bonus for the year of termination and (iii) continued medical coverage, at the same cost to Ms. Goldberg as if she were an active employee, until the earliest of: (x) one year following the date of the termination; (y) such time as Ms. Goldberg secures other medical coverage or (z) the end of the COBRA continuation period. In addition, all outstanding equity awards granted to Ms. Goldberg prior to the third anniversary of the effective date of her employment agreement will vest in full for unvested time-based equity awards and will vest at target levels for unvested performance-based equity awards (assuming the performance criteria had been achieved at target levels for such period).
In order to receive the payments under her employment agreement (excluding any Accrued Benefits Ms. Goldberg may be entitled to receive), Ms. Goldberg must execute and not revoke a general release and waiver agreement which includes a confirmation of her confidentiality, non-competition and non-solicitation obligations of her employment agreement.
Termination by the Company for Cause or Resignation without Good Reason. If Ms. Goldberg’s employment is terminated by the Company for Cause or Ms. Goldberg voluntarily resigns without good reason, then Ms. Goldberg will be entitled only to Accrued Benefits and she will forfeit all unvested equity awards.
Paul H. McDowell
Mr. McDowell was party to an employment agreement with the Company which became effective on January 8, 2014. On February 23, 2016, Mr. McDowell entered into a new employment agreement with the Company which superseded and replaced his prior employment agreement. For purposes of the “Termination Scenario Table” below, we have presented Mr. McDowell’s termination scenarios as set forth in his employment agreement that was in effect as of December 31, 2016.
Death or Disability. If Mr. McDowell’s employment is terminated due to his death or disability, then Mr. McDowell will be entitled to “Accrued Benefits” comprised of (i) any unpaid base salary through the termination date, (ii) reimbursement for any unreimbursed business expenses incurred through the termination date and (iii) all other payments or benefits to which Mr. McDowell is entitled under the terms of any applicable compensation arrangement or benefit plan or program. Mr. McDowell will also be entitled to any accrued but unpaid annual bonus for the year prior to the year of termination, if applicable, and any outstanding equity awards granted to Mr. McDowell on or after the effective date of his employment agreement, but prior to April 1, 2018, will vest on a pro rata basis calculated by dividing the number of whole months elapsed from the issuance of the award until the termination date by the number of whole months in the applicable vesting period for such time-based award or the performance measurement period of a performance-based award (with performance criteria assumed to be achieved at target levels).
Termination by the Company without Cause or by Mr. McDowell for Good Reason. If Mr. McDowell’s employment is terminated by the Company without Cause (as defined in his employment agreement) or by Mr. McDowell for Good Reason (as defined in his employment agreement), then Mr. McDowell will be entitled to (i) the Accrued Benefits, (ii) any accrued but unpaid annual bonus for the year prior to the year of termination, (iii) an amount equal to the sum of his annual base salary and target bonus for the year of termination and (iv) continued medical coverage, at the same cost to Mr. McDowell as if he were an active employee, until the earliest of: (x) one year following the date of the termination; (y) such time as Mr. McDowell secures other medical coverage or (z) the end of the COBRA continuation period. In addition, all outstanding equity awards granted to Mr. McDowell on or after the effective date of his employment agreement, but prior to April 1, 2018, will vest in full for unvested time-based equity awards and will vest at target levels for unvested performance-based equity awards (assuming the performance criteria had been achieved at target levels for such period).
In order to receive the payments under his employment agreement (excluding any Accrued Benefits Mr. McDowell may be entitled to receive), Mr. McDowell must execute and not revoke a general release and waiver agreement which includes a confirmation of his confidentiality, non-competition and non-solicitation obligations of his employment agreement.
Termination by the Company for Cause or Resignation without Good Reason. If Mr. McDowell’s employment is terminated by the Company for Cause or Mr. McDowell voluntarily resigns without good reason, then Mr. McDowell will be entitled only to Accrued Benefits and he will forfeit all unvested equity awards.

34




Thomas W. Roberts
Mr. Roberts was party to an employment agreement with the Company which became effective on April 1, 2015. On February 23, 2016, Mr. Roberts entered into a new employment agreement with the Company which superseded and replaced his prior employment agreement. For purposes of the “Termination Scenario Table” below, we have presented Mr. Roberts’ termination scenarios as set forth in his employment agreement that was in effect as of December 31, 2016.
Death or Disability. If Mr. Roberts’ employment is terminated due to his death or disability, then Mr. Roberts will be entitled to “Accrued Benefits” comprised of (i) any unpaid base salary through the termination date, (ii) reimbursement for any unreimbursed business expenses incurred through the termination date and (iii) all other payments or benefits to which Mr. Roberts is entitled under the terms of any applicable compensation arrangement or benefit plan or program. Mr. Roberts will also be entitled to any accrued but unpaid annual bonus for the year prior to the year of termination, if applicable, and any outstanding equity awards granted to Mr. Roberts on or after the effective date of his employment agreement, but prior to April 1, 2018, will vest on a pro rata basis calculated by dividing the number of whole months elapsed from the issuance of the award until the termination date by the number of whole months in the applicable vesting period for such time-based award or the performance measurement period of a performance-based award (with performance criteria assumed to be achieved at target levels).
Termination by the Company without Cause or by Mr. Roberts for Good Reason. If Mr. Roberts’ employment is terminated by the Company without Cause (as defined in his employment agreement) or by Mr. Roberts for Good Reason (as defined in his employment agreement), then Mr. Roberts will be entitled to (i) the Accrued Benefits, (ii) any accrued but unpaid annual bonus for the year prior to the year of termination, (iii) an amount equal to the sum of his annual base salary and target bonus for the year of termination and (iv) continued medical coverage, at the same cost to Mr. Roberts as if he were an active employee, until the earliest of: (x) one year following the date of the termination; (y) such time as Mr. Roberts secures other medical coverage or (z) the end of the COBRA continuation period. In addition, all outstanding equity awards granted to Mr. Roberts on or after the effective date of his employment agreement, but prior to April 1, 2018, will vest in full for unvested time-based equity awards and will vest at target levels for unvested performance-based equity awards (assuming the performance criteria had been achieved at target levels for such period).
In order to receive the payments under his employment agreement (excluding any Accrued Benefits Mr. Roberts may be entitled to receive), Mr. Roberts must execute and not revoke a general release and waiver agreement which includes a confirmation of his confidentiality, non-competition and non-solicitation obligations of his employment agreement.
Termination by the Company for Cause or Resignation without Good Reason. If Mr. Roberts’ employment is terminated by the Company for Cause or Mr. Roberts voluntarily resigns without good reason, then Mr. Roberts will be entitled only to Accrued Benefits and he will forfeit all unvested equity awards.


35




Termination Scenario Table
The table below provides certain estimates of the payments and benefits that would be provided to our NEOs in the event that a qualifying termination of employment or a change in control occurs, assuming that the triggering event took place on December 31, 2016. The value of vested equity is based on the closing price of the Company’s common stock on December 30, 2016, the last business day of the 2016 fiscal year, which was $8.46.
Name and Termination Scenario
 
Accrued Bonus ($)
 
Severance ($)
 
Equity Awards
($)(1)
 
Accrued Benefits
($)(2)
 
Total Payout ($)
Glenn J. Rufrano
 
 
 
 
 
 
 
 
 
 
Death or Disability
 
1,500,000

 

 
4,465,083

 
76,923

 
6,042,006

Without Cause or Resignation for Good Reason (no Change in Control)
 
1,500,000

 
5,000,000

 
11,781,745

 
107,423

 
18,389,168

Without Cause or Resignation for Good Reason (Change in Control)
 
1,500,000

 
7,500,000

 
11,781,745

 
76,923

 
20,858,668

For Cause or Voluntary Resignation
 

 

 

 
76,923

 
76,923

Non-Renewal by the Company
 
1,500,000

 
2,500,000

 

 
76,923

 
4,076,923

Michael J. Bartolotta
 
 
 
 
 
 
 
 
 
 
Death or Disability
 
725,000

 

 
608,512

 
33,330

 
1,366,842

Without Cause or Resignation for Good Reason (with or without Change in Control)
 
725,000

 
1,125,000

 
1,782,358

 
51,550

 
3,683,908

For Cause or Voluntary Resignation
 

 

 

 
33,330

 
33,330

Lauren Goldberg
 
 
 
 
 
 
 
 
 
 
Death or Disability
 
525,000

 

 
580,406

 
37,352

 
1,142,758

Without Cause or Resignation for Good Reason (with or without Change in Control)
 
525,000

 
950,000

 
1,557,726

 
43,469

 
3,076,195

For Cause or Voluntary Resignation
 

 

 

 
37,352

 
37,352

Paul H. McDowell
 

 

 

 

 

Death or Disability
 
550,000

 

 
346,650

 
20,382

 
917,032

Without Cause or Resignation for Good Reason (with or without Change in Control)
 
550,000

 
1,000,000

 
1,234,231

 
38,602

 
2,822,833

For Cause or Voluntary Resignation
 

 

 
787

 
20,382

 
21,169

Change in Control(3)
 

 

 
49,187

 

 
49,187

Thomas W. Roberts
 
 
 
 
 
 
 
 
 
 
Death or Disability
 
600,000

 

 
709,392

 
36,596

 
1,345,988

Without Cause or Resignation for Good Reason (with or without Change in Control)
 
600,000

 
1,000,000

 
2,694,245

 
47,964

 
4,342,209

For Cause or Voluntary Resignation
 

 

 
12,554

 
36,596

 
49,150

Change in Control(3)
 

 

 
784,969

 

 
784,969

__________________________
(1)
Includes the value of accelerating equity awards and dividend equivalents on restricted stock units. For Mr. McDowell and Roberts, also includes dividends on awards of restricted stock.
(2)
Reflects accrued vacation, unreimbursed business expenses and/or medical coverage for the executive and his or her spouse and then-covered dependents.
(3)
Certain legacy equity award agreements contain a change in control provision that provides for the automatic vesting of all outstanding and unvested equity awards upon a Change of Control (as defined in the Company’s Equity Plan).

36




COMPENSATION OF THE BOARD OF DIRECTORS
Director Compensation
In January 2015, the Compensation Committee completed a review of the compensation arrangements for the Board of Directors as part of the overall review of the Company’s compensation practices and policies. The Compensation Committee engaged Semler Brossy to conduct a study of market practices based on the peer group approved for reviewing executive pay. Semler Brossy recommended a number of changes to make the compensation for directors consistent with best practices among the Company’s peers and the Compensation Committee recommended these changes to the full Board of Directors.
Effective January 1, 2015, upon consideration of and consistent with the recommendations of the Compensation Committee and Semler Brossy, the Board of Directors approved and adopted the following retainers and fees for each independent director:
$60,000 annual cash retainer (the “Annual Cash Board Retainer”);
meeting fees of $2,000 per in-person meeting and $1,500 per telephonic meeting for each meeting of the Board and of an established committee of the Board (the “Meeting Fees” and, together with the Annual Cash Board Retainer, the “Board Cash Compensation”); and
$110,000 annual equity retainer in the form of deferred stock units (the “Annual Equity Board Retainer”).

In addition, the director who serves as the non-Executive Chairman of the Board receives an annual cash retainer of $150,000; the director who serves as the chair of the Audit Committee receives an annual cash retainer of $20,000; the director who serves as the chair of the Compensation Committee receives an annual cash retainer of $15,000; and the director who serves as the chair of the Nominating and Corporate Governance receives an annual cash retainer of $10,000.

The Board Cash Compensation for 2016 was paid to the independent directors quarterly in arrears commencing with the end of the quarter ended March 31, 2016. The Annual Equity Board Retainer for 2016 was granted to each independent director on May 4, 2016. The Annual Equity Board Retainer will be made in subsequent years in connection with each regularly scheduled annual meeting of stockholders and, if an independent director is elected to the Board between annual meetings of stockholders, a pro-rata Annual Equity Board Retainer will be made at such independent director’s election measured from the effective date of the election to the one-year anniversary of the previous year’s annual meeting of stockholders.

The Annual Equity Board Retainer consists of deferred stock units. The deferred stock units, which vest upon issuance, will be settled three years from the date of grant or, if a director ends his or her tenure for any reason prior thereto, the end of his or her tenure. The deferred stock units entitle the holder to dividend equivalent payments consistent with the dividends paid on the Company’s common stock.

Starting in 2016, independent directors could elect to participate in the Independent Directors’ Deferred Compensation Program (“Deferred Compensation Program”) whereby they could receive deferred stock units in lieu of the Annual Cash Board Retainer, including any annual cash retainer for serving as Non-Executive Chairman or as chair of any of the Board committees, and the Annual Equity Board Retainer. If a director makes this election, he or she will receive a quarterly issuance of deferred stock units equal to his or her aggregate deferred retainer(s) for the prior calendar quarter divided by the closing price of the Company’s common stock on the NYSE on the third business day following a quarter end. If an independent director elects to defer his or her Annual Equity Board Retainer, such director will receive deferred stock units that vest upon issuance but will settle at the end of the director’s tenure. The deferred stock units will be granted under the Equity Plan. The deferred stock units entitle the holder to receive on the last dividend payment date in the year, deferred stock units in an amount equal to the dividends paid on the Company’s common stock.
Beginning in January 2017, independent directors who elect to participate in the Deferred Compensation Program can also elect to defer their Meeting Fees and the quarterly grant of deferred stock units will be granted on the last business day of the quarter (rather than on the third business day following the end of a quarter).


37




Director Compensation Table for 2016
The following table sets forth the information regarding the compensation of our directors who served during the fiscal year ended December 31, 2016:
Name
 
Fees Earned or
Paid in Cash
($)(1)
 
Stock Awards
($)(2)
 
Non-Equity
Incentive Plan
Compensation
($)
 
All Other
Compensation
($)(3)
 
Total
Compensation
($)
Glenn J. Rufrano(4)
 

 

 
 

 

Hugh R. Frater
 
238,000

 
110,000

 
 
11,586

 
359,586

Bruce D. Frank(5)
 
114,500

 
110,000

 
 
12,689

 
237,189

David B. Henry
 
109,500

 
110,000

 
 
9,908

 
229,408

Mark S. Ordan
 
94,000

 
110,000

 
 
11,468

 
215,468

Eugene A. Pinover
 
91,500

 
110,000

 
 
11,518

 
213,018

Julie G. Richardson
 
111,500

 
110,000

 
 
13,587

 
235,087

__________________________
(1)
For a description of the annual non-employee director retainer fees and related payments, please see “Compensation of the Board of Directors—Director Compensation.” Mr. Pinover and Ms. Richardson each elected to participate in the Deferred Compensation Program in 2016, and amounts in this column include amounts for the Annual Cash Board Retainer which was deferred. For Ms. Richardson, amounts in this column also include her annual cash retainer for service as the chair of the Compensation Committee which was deferred.
(2)
Reflects the grant date fair value of stock awards computed in accordance with ASC Topic 718, without regard to forfeitures. For further information on how we account for stock-based compensation and the assumptions used, see Note 17 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016 filed with the SEC on February 23, 2017. These amounts reflect the Company’s accounting expense for these awards and do not correspond to the actual amounts, if any, that will be recognized by the directors. Mr. Pinover and Ms. Richardson each elected to participate in the Deferred Compensation Program in 2016, and amounts in this column include only amounts for the Annual Equity Board Retainer which Mr. Pinover and Ms. Richardson each elected to defer. Deferred stock units vest upon grant; therefore, none are outstanding as of December 31, 2016. On April 3, 2015, Mr. Frank was granted an award of restricted stock that vests in three equal installments, of which 1,336 shares of restricted stock were outstanding as of December 31, 2016.
(3)
Reflects dividend equivalents on deferred stock units. In the case of Mr. Pinover and Ms. Richardson, also reflects the value of deferred stock units granted in lieu of dividend equivalents pursuant to their election to participate in the Deferred Compensation Program in 2016, and in the case of Mr. Frank, also reflects dividends on his award of restricted stock.
(4)
Mr. Rufrano did not receive any fees for serving as a director in 2016.
(5)
Effective February 23, 2017, Mr. Frank resigned from the Board.

Ms. Hogan Preusse and Mr. Lieb each were appointed to the Board effective on February 23, 2017 and, therefore, neither of them received any compensation for service as a director during the fiscal year ended December 31, 2016.
Director Stock Ownership Guidelines
In 2015, our Board adopted guidelines encouraging each director to hold shares of the Company’s common stock. Each non-employee director of the Company is required to own common stock of the Company with a fair market value of at least five times the cash portion of his or her annual retainer. Each non-employee director has a phase-in period of five years from the date of his or her election to the Board to achieve the required minimum share ownership level. As of December 31, 2016, all of the non-employee directors subject to the equity ownership guidelines either met the requirements or were within the permitted period to satisfy the ownership requirements.
  


38




COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The table below presents the members of the Compensation Committee and their respective service terms. None of these persons had, at any time, served as an officer or employee of the Company and, during 2016, none of these persons had any relationships with the Company requiring disclosure under applicable rules and regulations of the SEC.
Name
 
Dates
Julie G. Richardson (Independent Director)(1)
 
April 1, 2015 - Present
Mark S. Ordan (Independent Director)
 
September 29, 2015 - Present
Bruce D. Frank (Former Independent Director)(2)
 
November 20, 2014 - February 23, 2017
__________________________
(1) Ms. Richardson has served as the Chairperson of the Compensation Committee since September 29, 2015.
(2) Effective February 23, 2017, Mr. Frank resigned from the Board.

39




PROPOSAL 3 
NON-BINDING, ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
Pursuant to Section 14A of the Exchange Act, the Company is providing its stockholders with the opportunity to vote on a non-binding advisory resolution approving the named executive officers’ compensation described herein. This proposal, known as a “say on pay” proposal, gives the Company’s stockholders the opportunity to express their views on named executive officer’s compensation.
The Board believes that the information provided in the Compensation Discussion and Analysis demonstrates that our executive compensation program was designed appropriately and is working to ensure that management’s interests are aligned with our stockholders’ interests to support long-term value creation. In accordance with Section 14A of the Exchange Act, and as a matter of good corporate governance, we are asking stockholders to approve, on a non-binding, advisory basis, the following resolution at the Annual Meeting:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including in the Compensation Discussion and Analysis, the compensation table and related narrative discussion, is hereby approved.”
While the say-on-pay vote is advisory and will be non-binding, the Compensation Committee does value the opinions of our stockholders and intends to take the results of the vote on this proposal into account in its future decisions regarding the compensation of our named executive officers. Unless the Board modifies its policy on the frequency of future say-on-pay advisory votes, the next say-on-pay advisory vote will be held at the 2018 annual meeting of stockholders, and the next advisory vote on the frequency of holding a say-on-pay vote will occur no later than the 2020 annual meeting of stockholders.
We are asking our stockholders to indicate their support for our named executive officers’ compensation as described in this proxy statement. This non-binding advisory vote is not limited to any specific item of compensation, but rather addresses the overall compensation of our named executive officers and our philosophy, policies and practices relating to their compensation as described in this proxy statement pursuant to Item 402 of Regulation S-K.
The affirmative vote of a majority of the votes cast at the Annual Meeting for the adoption of this resolution is required to approve the compensation of the named executive officers as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THIS RESOLUTION.

40




STOCK OWNERSHIP BY DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of the Company’s common stock as of March 9, 2017, in each case including shares of common stock which such persons have a right to acquire within 60 days, by:
each person known by the Company to be the beneficial owner of more than 5% of its outstanding shares of its common stock based solely upon the amounts and percentages contained in the public filings of such persons;
each of the Company’s executive officers and directors; and
all of the Company’s executive officers and directors as a group.
 
 
Percentage of Common Stock
Name of Beneficial Owner
 
Shares Owned (1)
 
Percentage (2)
The Vanguard Group(3)
 
152,144,995

 
15.2
%
Blackrock Inc.(4)
 
69,511,476

 
7.0
%
FMR LLC(5)
 
80,919,807

 
8.1
%
Directors and Executive Officers(6)
 
 
 
 
Hugh R. Frater(7)
 
86,071

 
*

Bruce D. Frank(8)
 
28,081

 
*

David B. Henry(9)
 
21,020

 
*

Mary Hogan Preusse(10)
 
2,396

 
*

Richard J. Lieb(11)
 
2,396

 
*

Mark S. Ordan(12)
 
23,857

 
*

Eugene A. Pinover(13)
 
40,193

 
*

Julie G. Richardson(14)
 
49,979

 
*

Glenn J. Rufrano(15)
 
357,783

 
*

Michael J. Bartolotta
 
59,298

 
*

Lauren Goldberg
 
25,507

 
*

Paul H. McDowell(16)
 
51,383

 
*

William C. Miller
 
17,564

 
*

Thomas W. Roberts(17)
 
229,657

 
*

All directors and executive officers as a group
 
995,185

 
*

(14 persons)
 
 
 
 
__________________________
* Represents less than 1% of the shares of the Company’s common stock outstanding.
(1)
Beneficial ownership is determined in accordance with Rule 13d-3 of the Exchange Act. A person is deemed to be the beneficial owner of any shares of the Company’s common stock if that person has or shares voting power or investment power with respect to those shares, or has the right to acquire beneficial ownership at any time within 60 days of the date of the table. As used herein, “voting power” is the power to vote or direct the voting of shares and “investment power” is the power to dispose or direct the disposition of shares.
(2)
Based on 998,145,730 shares of common stock outstanding as of March 9, 2017. Includes 129,420 deferred stock units that are immediately vested upon grant but settle three years from the date of grant or, if a director ends his or her tenure for any reason prior thereto, the end of his or her tenure, and 23,748,347 OP Units that are exchangeable into shares of the Company’s common stock. OP Units are exchangeable, except under certain limited circumstances, beginning one year from the date of issuance. Holders of the deferred stock units and OP Units are not entitled to voting rights.
(3)
This amount includes 73,256,994 shares of common stock beneficially owned by the Vanguard Specialized Funds - Vanguard REIT Index Fund (the “Index Fund”). The Vanguard Group has sole voting power with respect to 2,038,530 shares, shared voting power with respect to 1,196,343 shares, sole dispositive power with respect to 150,175,244 shares and shared dispositive power with respect to 1,969,751 shares. The Index Fund has sole voting power with respect to 73,256,994 shares and no shared voting power and no sole or shared dispositive power with respect to any shares. The information with respect to The Vanguard Group is based on the Schedule 13G/A filed with the SEC on February 14, 2017 and the information with respect to the Index Fund is based upon information filed separately by the Index Fund with the SEC on Schedule 13G/A on February 14, 2017. The address for The Vanguard Group and the Index Fund is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
(4)
BlackRock Inc. has sole voting power with respect to 62,706,916 shares, has sole dispositive power with respect to 69,511,476 shares and has no shared voting or dispositive power. The information with respect to BlackRock Inc. is based solely on the Schedule 13G/A filed with the SEC on January 27, 2017. The address for BlackRock Inc. is 55 East 52nd Street, New York, New York, 10055.
(5)
FMR LLC has sole voting power with respect to 38,560,927 shares, has no shared voting power and has no sole or shared dispositive power with respect to any shares. The information with respect to the holdings of FMR LLC is based solely on the Schedule 13G/A filed with the SEC on February 14, 2017. The address for FMR LLC is 245 Summer Street, Boston, Massachusetts 02210.
(6)
The address for each of the directors and officers is c/o VEREIT, Inc., 2325 E. Camelback Road, Suite 1100, Phoenix, Arizona 85016.
(7)
Includes 24,071 deferred stock units issued in connection with such individual’s service as a member of the Board and 62,000 shares held in a revocable trust of which Mr. Frater and his wife are trustees.
(8)
Effective February 23, 2017, Mr. Frank resigned from the Board. Information is as of such individual’s last reported Form 4, filed with the SEC on May 5, 2016 and includes 24,071 deferred stock units issued in connection with such individual’s service as a member of the Board.
(9)
Includes 21,020 deferred stock units issued in connection with such individual’s service as a member of the Board.

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(10)
Includes 2,396 deferred stock units issued in connection with such individual’s appointment to the Board for service as a member of the Board.
(11)
Includes 2,396 deferred stock units issued in connection with such individual’s appointment to the Board for service as a member of the Board.
(12)
Includes 23,857 deferred stock units issued in connection with such individual’s service as a member of the Board.
(13)
Includes 27,893 deferred stock units issued in connection with such individual’s service as a member of the Board.
(14)
Includes 17,400 aggregate shares of the Company’s common stock which were purchased in three separate tranches of 5,800 shares for three separate trusts of which Ms. Richardson is the trustee. Each trust benefits a separate child of Ms. Richardson. Also includes 32,579 deferred stock units issued in connection with such individual’s service as a member of the Board.
(15)
Includes 113,785 time-based restricted stock units that are scheduled to vest on April 1, 2017.
(16)
Includes 3,414 time-based restricted stock units that are scheduled to vest on April 1, 2017.
(17)
Includes 11,379 time-based restricted stock units that are scheduled to vest on April 1, 2017.
 
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Based solely upon a review of the copies of such forms furnished to us and written representations from our executive officers and directors, we believe that during the year ended December 31, 2016, all persons subject to the reporting requirements of Section 16(a) filed the required reports on a timely basis, other than in relation to the following reports: Form 4s for Eugene A. Pinover and Julie G. Richardson that were filed on October 21, 2016 in connection with deferred stock units that were granted to each of Mr. Pinover and Ms. Richardson on October 17, 2016. The late filings occurred as a result of a clerical oversight.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related Party Transactions with the Cole REITs in the Ordinary Course of Cole Capital’s Business
Through its Cole Capital segment, the Company is contractually responsible for managing the day-to-day affairs of the following Cole REITs Cole Credit Property Trust IV, Inc. (“CCPT IV”), Cole Real Estate Income Strategy (Daily NAV), Inc. (“INAV”), Cole Office & Industrial REIT (CCIT II), Inc. (“CCIT II”), Cole Office & Industrial REIT (CCIT III), Inc. (“CCIT III”) and Cole Credit Property Trust V, Inc. (“CCPT V”) raising capital for those Cole REITs in offering, identifying and making acquisitions and investments on the Cole REITs’ behalf and recommending to the respective board of directors of each of the Cole REITs an approach for providing investors with liquidity. Cole Capital serves as the dealer manager and distributes the shares of common stock for certain Cole REITs and advises them regarding offerings, manages relationships with participating broker-dealers and financial advisors, and provides assistance in connection with compliance matters relating to the offerings. Cole Capital receives compensation and reimbursement for services relating to the Cole REITs’ offerings and the investment, management, financing and disposition of their respective assets, as applicable. Cole Capital also develops new REIT offerings and assists in obtaining regulatory approvals from the SEC, the Financial Industry Regulatory Authority, Inc. and various blue sky jurisdictions for such offerings.
Information contained herein in respect to the Cole REITs is presented through December 31, 2016; however, these arrangements are ongoing.
Advisory Agreements
The Company, through directly or indirectly controlled affiliate entities, was a party to advisory agreements with the Cole REITs during the year ended December 31, 2016. The Company earns fees related to the acquisition, development or construction of properties on behalf of the respective Cole REITs pursuant to these advisory agreements. The Company is reimbursed for acquisition expenses incurred in the process of acquiring properties up to certain limits provided in each Cole REIT’s respective advisory agreement. The Company is not reimbursed for personnel costs in connection with services for which it receives acquisition fees or real estate commissions. The Company may also earn disposition fees related to the sale of one or more properties, including those held indirectly through joint ventures, on behalf of a Cole REIT and other affiliates.
In addition, the Company earns advisory and asset and property management fees from certain Cole REITs and other real estate programs. The Company may also be reimbursed for expenses incurred in providing advisory and asset and property management services, subject to certain limitations and any waivers of such expenses by the advisors. In addition, the Company earns a performance fee relating to INAV for any year in which the total return on stockholders’ capital exceeds 6% per annum on a calendar year basis. The Company recorded fees and expense reimbursements as shown in the table below for services provided to the Cole REITs and other real estate programs during the year ended December 31, 2016 (in thousands):
 
Year Ended December 31, 2016
 
CCPT IV
 
CCPT V(1)
 
CCIT II(1)
 
CCIT III(2)
 
INAV
 
Joint Ventures
 
Total
Transaction service fees and reimbursements
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition fees
$
4,352

 
$
552

 
$
3,951

 
$
875

 
$

 
$
3

 
$
9,733

Disposition fees

 

 

 

 

 

 

Reimbursement revenues
554

 
138

 
468

 
11

 
1,629

 

 
2,800

Total transaction service fees and reimbursements
4,906

 
690

 
4,419

 
886

 
1,629

 
3

 
12,533

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Management fees and reimbursements
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset and property management fees and leasing fees

 

 

 

 

 
220

 
220

Advisory and performance fee revenue
36,992

 
3,977

 
7,856

 
67

 
2,207

 

 
51,099

Reimbursement revenues
9,185

 
2,922

 
2,712

 
194

 
2,572

 

 
17,585

Total management fees and reimbursements
46,177

 
6,899

 
10,568

 
261

 
4,779

 
220

 
68,904

Total transaction service and management fees and reimbursements
$
51,083

 
$
7,589

 
$
14,987

 
$
1,147

 
$
6,408

 
$
223

 
$
81,437

__________________________
(1)
Commencing on April 29, 2016, two of the Cole REITs, CCIT II and CCPT V, began offering Class T shares of common stock in addition to the class of shares of common stock already being offered (now referred to as Class A shares). On September 17, 2016, CCIT II ceased issuing shares under its primary offering

43




but continues to issue shares under its dividend reinvestment plan. The distribution and stockholder servicing fee for CCIT II was 0.8%. On October 5, 2016, CCPT V amended its distribution and stockholder servicing fee to 1.0% from 0.8%.
(2)
On September 22, 2016, the registration statement for the initial public offering of CCIT III was declared effective by the SEC, consisting of Class A shares of common stock and Class T shares of common stock.

Dealer Manager Agreements
Cole Capital Corporation, an indirectly-controlled affiliate of the Company, generally receives selling commissions of up to 7.0% and 3.0% of gross offering proceeds related to the sale of Class A Shares and Class T Shares, respectively, of CCIT III and CCPT V common stock in their primary offerings, before reallowance of selling commissions earned by participating broker dealers. In 2016, the Company reallowed 100% of selling commissions earned to participating broker dealers. In addition, the Company generally receives 2.0% of gross offering proceeds in the primary offerings for both Class A Shares and Class T Shares, before reallowance to participating broker dealers, as a dealer manager fee in connection with the sale of CCIT III and CCPT V shares of common stock. The Company, in its sole discretion, may reallow all or a portion of its dealer manager fee to such participating broker dealers as a marketing and due diligence expense reimbursement, based on factors such as the volume of shares sold by such participating broker dealers and the amount of marketing support provided by such participating broker dealers. No selling commissions or dealer manager fees are paid to the Company or other broker dealers with respect to shares sold under the respective Cole REIT’s distribution reinvestment plan, under which the stockholders may elect to have distributions reinvested in additional shares.
Cole Capital Corporation, also generally receives an annual distribution and stockholder servicing fee of up to 1.0% of the per share net asset value (“NAV”) for CCIT III and CCPT V Class T Shares. The distribution and stockholder servicing fees are accrued daily in the amount of 1/365th of a percentage of the estimated per share NAV and payable monthly in arrears. The maximum amount of the distribution and stockholder servicing fee with respect to sales of Class T shares is 4.0% of the gross offering proceeds for CCIT III and CCPT V. The Company, in its sole discretion, may reallow all or a portion of its distribution and stockholder servicing fees to participating broker dealers as a marketing and due diligence expense reimbursement. No distribution and stockholder servicing fees are paid to the Company or other broker dealers with respect to shares sold under the respective Cole REIT’s distribution reinvestment plan.
Prior to the close of CCIT II’s primary offering on September 17, 2016, Cole Capital Corporation received selling commissions and stockholder distribution and servicing fees commensurate with the terms of selling commission and stockholder distribution and servicing fees for CCPT V as set forth above, except the distribution and stockholder servicing fee was 0.8% per annum.
In connection with the sale of INAV shares of common stock, the Company receives an asset-based dealer manager fee that is payable in arrears on a monthly basis and accrues daily in an amount equal to (i) 1/365th of 0.55% of the NAV for Wrap Class shares of common stock (“W Shares”) for such day, (ii) 1/365th of 0.55% of the NAV for Advisor Class shares of common stock (“A Shares”) for such day and (iii) 1/365th of 0.25% of the NAV for Institutional Class shares of common stock (“I Shares”) for such day. The Company, in its sole discretion, may reallow a portion of its dealer manager fee received on W Shares, A Shares and I Shares to participating broker dealers. In addition, the Company receives a selling commission on A Shares sold in the primary offering of up to 3.75% of the offering price per share for A Shares. The Company reallowed 100% of selling commissions earned to participating broker dealers. The Company also receives an asset-based distribution fee for A Shares that is payable in arrears on a monthly basis and accrues daily in an amount equal to 1/365th of 0.50% of the NAV for A Shares for such day. The Company, in its sole discretion, may reallow a portion of the distribution fee to participating broker dealers. No selling commissions are paid to the Company or other broker dealers with respect to W Shares or I Shares or on shares of any class of INAV common stock sold pursuant to INAV’s distribution reinvestment plan, under which the stockholders may elect to have distributions reinvested in additional shares, and no distribution fees are paid to the Company or other broker dealers with respect to W Shares or I Shares.
All other organization and offering expenses associated with the sale of the Cole REITs’ common stock are paid for in advance by the Company and subject to reimbursement by the Cole REITs, up to certain limits in accordance with their respective advisory agreements and charters. As these costs are incurred, they are recorded as reimbursement revenue, up to the respective limit, and are included in offering-related revenues in the financial results for Cole Capital. Expenses paid on behalf of the Cole REITs in excess of these limits that are expected to be collected based on future estimated offering proceeds are recorded as program development costs. The Company assesses the collectability of the program development costs, considering the offering period and historical and forecasted sales of shares under the Cole REITs’ respective offerings and reserves for any balances considered not collectible. As of December 31, 2016, the Company had organization and offering costs of $3.2 million, which were net of reserves of $31.7 million.
The table below reflects the gross offering-related fees and reimbursements from the Cole REITs for the year ended December 31, 2016 (in thousands).

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Year Ended December 31, 2016
 
CCPT V
 
CCIT II
 
CCIT III
 
INAV
 
Total
Offering-related fees and reimbursements
 
 
 
 
 
 
 
 
 
Selling commissions (1)
$
4,710

 
$
13,078

 
$
16

 
$
2,139

 
$
19,943

Dealer manager and distribution fee revenue (2)
1,664

 
5,075

 
14

 
1,554

 
8,307

Reimbursement revenue
1,805

 
5,251

 
31

 
1,196

 
8,283

Total offering-related fees and reimbursements
$
8,179

 
$
23,404

 
$
61

 
$
4,889

 
$
36,533

__________________________
(1)
The Company reallows 100% of selling commissions earned to participating broker-dealers.
(2)
During the year ended December 31, 2016, the Company reallowed $3.2 million of dealer manager fees to participating broker dealers as a marketing and due diligence expense reimbursement.

Due to Affiliates

As of December 31, 2016, $16,000 was due from the Company to the Cole REITs.
Due from Affiliates
As of December 31, 2016, $21.3 million was expected to be collected from affiliates, including $10.3 million outstanding under the Cole REITs’ lines of credit, as well as $11.0 million for services provided by the Company and expenses subject to reimbursement by the Cole REITs in accordance with their respective advisory and property management agreements.
On September 23, 2016, the Company entered into a $30.0 million revolving line of credit (the “Subordinate Promissory Note”) with Cole Corporate Income Operating Partnership III, LP, the operating partnership of CCIT III (the “Subordinate Promissory Note Agreement”). The Subordinate Promissory Note bears interest at variable interest rates of one-month LIBOR plus the Credit Facility Margin (as defined in the Subordinate Promissory Note Agreement), which ranges from 2.20% to 2.75%, plus 1.75% and matures on September 22, 2017. As of December 31, 2016, the Subordinate Promissory Note had an interest rate of 5.12% and $10.3 million was outstanding.

As of December 31, 2015, the Company had revolving lines of credit agreements in place with CCIT II and CCPT V (the “Affiliate Lines of Credit”) that provided for maximum borrowings of $60.0 million to each of CCIT II and CCPT V and bore interest at variable interest rates of one-month LIBOR plus 2.20%. As of December 31, 2015, there was $50.0 million outstanding on the Affiliate Lines of Credit. During the year ended December 31, 2016, the Affiliate Lines of Credit matured and no amounts were outstanding as of December 31, 2016.

Certain Conflict Resolution Procedures
Limitations on Personal Investments
In 2011, our Board of Directors adopted a policy that permitted proposed investments by our directors or officers, referred to as the “covered persons,” in our target properties. This policy permitted a proposed investment by a covered person for his or her own account in any of our target properties if the capital required for the investment does not exceed the lesser of (i) $5 million or (ii) 1% of our total stockholders’ equity as of the most recent month end (the “personal investment limit”). To the extent that a proposed investment exceeds the personal investment limit, our Board of Directors will only permit the covered person to make the investment (i) upon the approval of the disinterested directors, or (ii) if the proposed investment otherwise complies with the terms of any other related party transaction policy our Board of Directors may adopt in the future. This policy was in effect throughout 2015 although no such investments were made by any of our directors or officers. On March 9, 2016, our Board of Directors passed a resolution eliminating this policy, thereby not permitting such investments in the future.
Related Person Transaction Approval Policy
The Board has adopted a Related Person Transaction Approval Policy for the review, approval or ratification of any related person transactions. This policy delegates to the Nominating and Corporate Governance Committee to review such transactions and to take any actions as it may deem appropriate. Under the policy, each director, nominee for director or executive officer is responsible for providing prompt written notice to the committee of any potential related person transaction of which he or she is aware and regardless of the dollar amount involved or whether it involves the individual directly, his or her immediate family or any other director, nominee for director or executive officer. The Nominating and Corporate Governance Committee may consider all facts and circumstances it deems appropriate in reviewing or approving a related person transaction, including among other factors the related person’s interest in the transaction, the business purpose and reasonableness of the transaction, whether the transaction is

45




on terms no less favorable than terms generally available to unaffiliated third parties, and the materiality of the transaction to the related person and the Company.

Operating Partnership
We have adopted policies that are designed to eliminate or minimize certain potential conflicts of interest, and the limited partners of the Operating Partnership have agreed that in the event of a conflict between the duties owed by our directors to the Company and the Company’s duties, in its capacity as the general partner of the Operating Partnership, to such limited partners, we are under no obligation to give priority to the interests of such limited partners.
Real Estate Allocation Policy with the Cole REITs
Cole Capital currently manages five Cole REITs which have investment objectives and investment strategies similar to our own. As a result, we may be seeking to acquire properties and real estate-related investments at the same time as the Cole REITs. In addition, certain of our officers are also officers of the Cole REITs and, as such, they will have duties to us as well as to the Cole REITs. We have implemented certain procedures to help manage any perceived or actual conflicts among us and the Cole REITs, including a process to allocate property acquisitions among us and the Cole REITs based on the following factors:
the investment objective of each entity;
the anticipated operating cash flows of each entity and the cash requirements of each entity;
the effect of the potential acquisition both on diversification of each entity’s investments by type of property, geographic area and tenant concentration;
the amount of funds available to each entity and the length of time such funds have been available for investment;
the policy of each entity relating to leverage of properties;
the income tax effects of the purchase to each entity; and
the size of the investment.
If we determine that an investment opportunity may be equally appropriate for more than one entity, then the entity that has had the longest period of time elapse since it was allocated an investment opportunity of a similar size and type (e.g., office, industrial, multi-tenant or single tenant retail) will be allocated such investment opportunity. If, in our judgment, a subsequent development causes an investment opportunity to be more appropriate for an entity other than the entity to which the investment was initially allocated, the investment may be re-allocated as appropriate.
In addition, we have a right of first refusal over CCIT II, CCIT III and CCPT V with respect to all opportunities to acquire majority single-tenant real estate and real estate related assets or portfolios with a purchase price greater than $100.0 million. There can be no assurance that these policies will be adequate to address all of the conflicts that may arise or will address such conflicts in a manner that is favorable to us.



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OTHER MATTERS PRESENTED FOR ACTION AT THE 2017 ANNUAL MEETING
Our Board of Directors does not intend to present for consideration at the Annual Meeting any matter other than those specifically set forth in the Notice of Annual Meeting of Stockholders. If any other matter is properly presented for consideration at the meeting, the persons named in the proxy will vote thereon pursuant to the discretionary authority conferred by the proxy.

ATTENDANCE AT THE 2017 ANNUAL MEETING
All stockholders of record of shares of the Company’s common stock at the close of business on the record date, or their designated proxies, are authorized to attend the Annual Meeting. If you are not a stockholder of record but hold shares through a broker, bank or similar organization, you should provide proof of beneficial ownership as of the record date, such as an account statement reflecting your stock ownership as of the record date, a copy of the voting instruction card provided by your broker, bank or other record holder, or other similar evidence of ownership. If you do not have proof of ownership, you may not be admitted to the Annual Meeting. Each stockholder and proxy may be asked to present a valid government-issued photo identification, such as a driver’s license or passport, before being admitted. Cameras, recording devices and other electronic devices will not be permitted, and attendees may be subject to security inspections and other security precautions.


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STOCKHOLDER PROPOSALS FOR THE 2018 ANNUAL MEETING
Stockholder Proposals in Next Year’s Proxy Statement
Rule 14a-8 under the Exchange Act addresses when a company must include a stockholder’s proposal in its proxy statement and identify the proposal in its form of proxy when it holds an annual or special meeting of stockholders. Under Rule 14a-8, in order for a stockholder proposal to be considered for inclusion in the proxy statement and proxy card relating to our 2018 annual stockholders’ meeting, the proposal must be received at our principal executive offices no later than 5:00 p.m., Eastern Time, on the date which is 120 days prior to the anniversary of the date of this proxy statement (or November 21, 2017). We will not be required to include in our proxy statement and proxy card any stockholder proposal that does not meet all the requirements for such inclusion established by the SEC’s proxy rules and Maryland corporate law.
In order for an eligible stockholder or group of stockholders to nominate a director nominee for election at our 2018 annual stockholders’ meeting pursuant to the proxy access provision of our Bylaws, notice of such nomination and other required information must be received at our principal executive offices on or before November 21, 2017. In the event that the 2018 annual stockholders’ meeting is scheduled to be held on a date more than 30 days before or more than 60 days after May 3, 2018 (or before April 3, 2018 or after July 2, 2018), our Bylaws state that such notice and other required information must be received at our principal executive offices not later than the close of business on the later of (x) the 150th day prior to the scheduled date of the 2018 annual stockholders’ meeting or (y) the tenth day following the day on which we first make a public announcement of the date of the 2018 annual stockholders’ meeting.
In addition, our Bylaws require the eligible stockholder or group of stockholders to update and supplement such information (or provide notice stating that there are no updates or supplements) as of specified dates. Notices and other required information must be received by our Secretary at our principal executive office, which is currently VEREIT, Inc., 2325 E. Camelback Road, Suite 1100, Phoenix, Arizona 85016, Attention: Lauren Goldberg
Stockholder Proposals and Nominations for Directors to be Presented at the 2018 Annual Meeting
For any proposal that is not submitted for inclusion in our proxy material for the 2018 annual stockholders’ meeting but is instead sought to be presented directly at that meeting, the Bylaws permit such a presentation if (1) our secretary receives written notice of the proposal at our principal executive offices not earlier than 5:00 p.m., Eastern Time, on October 22, 2017 nor later than 5:00 p.m., Eastern Time, on November 21, 2017 and (2) it meets the requirements of the Bylaws and the SEC for submittal. In the event that the date of the 2018 annual stockholders’ meeting is advanced or delayed by more than 30 days from the first anniversary of the date of this year’s Annual Meeting, notice by the stockholder to be timely must be delivered not earlier than 5:00 p.m., Eastern time, on the 150th day prior to the date of the meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120th day prior to the date of the meeting, as originally convened, or the 10th day following the day on which public announcement of the date of the meeting is first made.
All nominations must also comply with our charter. All proposals should be sent via registered, certified or express mail to our secretary at our principal executive office, which is currently: VEREIT, Inc., 2325 E. Camelback Road, Suite 1100, Phoenix, Arizona 85016, Attention: Lauren Goldberg.












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