CORPORATE RESPONSIBILITY

Corporate Governance Practices

The following highlights certain key aspects of our corporate governance:

  • We Have an Independent Board. Seven of our eight director nominees are independent.
  • We Have an Independent Non-Executive Board Chairman. We separate the roles of Chairman and Chief Executive Officer and have an independent non-executive Chairman of the Board.
  • Our Key Board Committees are Fully Independent. Each member of our Audit, Compensation and Nominating and Corporate Governance Committees is an independent director.
  • Our Independent Directors Meet Without Management. Our independent directors hold regular executive sessions without management present.
  • We Do Not Have a Staggered Board. We hold annual elections for all our directors.
  • We Have an Active and Engaged Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee plays an active role in managing our corporate governance and our risk management function, including environmental and sustainability initiatives, and developing, adopting, and monitoring our corporate policies, processes, and procedures in compliance with applicable rules and regulations of the SEC and the NYSE.
  • We Assess Board Performance. We conduct regular assessments of our Board and Board committees.
  • We Value Periodic Board Refreshment to Promote Effective Board Structure and Composition. Three of our eight director nominees have joined the Board since January 2020.
  • Whistleblower Protection. We have implemented a “whistleblower” policy that allows directors, officers, and employees to file reports on a confidential and anonymous basis regarding an issue of impropriety, violation of law, violation of corporate or other policies, or unethical business practices.
  • We Have a Diverse Board and Management Team. We demonstrably value diversity in our Board and in our Company. Over one-third of each of our Board and management team is female. Nearly 40% of our employees are female and nearly one-third are minorities. Additionally, our Chief Executive Officer is a retired military veteran.
  • Our Stockholders Have the Authority to Amend our Bylaws. In November of 2020, we adopted amended and restated bylaws that permit stockholders, by a majority of the votes entitled to be cast on the matter, to amend our bylaws, which power was previously vested exclusively in our Board (subject to specific exceptions regarding provisions related to the Maryland Control Share Acquisition Act and the Maryland Business Combination Act).
  • Ethical Business Practices. We have adopted business and workplace policies that apply to all of our directors, officers, employees, vendors, and service providers that seek to create a culture that values high ethical standards, including integrity, honesty, transparency and compliance with applicable laws, rules, and regulations.
  • We Value Transparency. We are committed to being a leader in providing detailed disclosures about our business to our stockholders. Our commitment to robust and transparent disclosures includes, but is not limited to, our filings with the SEC, our quarterly earnings releases and the associated supplemental information reporting packages, and our investor presentations.
  • Investor Engagement. We value investor input and are committed to maintaining an active dialogue with our investors through extensive stockholder outreach. During 2020, we held over 150 virtual or face-to-face meetings with investors, in addition to attending seven industry/REIT conferences that were held virtually.
  • We Maintain Stock Ownership Guidelines. We have adopted a stock ownership policy applicable to our executive officers and outside directors under which they are expected to maintain beneficial ownership of shares of our common stock (including securities convertible into or exercisable or exchangeable for common stock) with a value equal to a specified multiple of their annual base cash compensation.
  • No Hedging or Pledging. We have policies that prohibit our officers, directors, and employees from hedging our stock, and prohibit our directors and executive officers from pledging or otherwise encumbering our securities as collateral for indebtedness.
  • We Have Opted Out of Certain Takeover Protections under Maryland Law. We have opted out of the control share acquisition statute and the business combination provisions in the Maryland General Corporation Law and we may not opt back into these provisions without stockholder approval. In addition, we are prohibited from adopting certain takeover protections, including classifying the Board, without first obtaining stockholder approval.
  • We Do Not Have a “Poison Pill.” We do not maintain a stockholder rights plan (commonly referred to as a “poison pill”). We will not adopt one in the future without (a) the approval of our stockholders or (b) seeking ratification from our stockholders within 12 months after adoption of the plan if the Board determines, in the exercise of its duties under applicable law, that it is in the Company’s best interest to adopt a rights plan without the delay of seeking prior stockholder approval.

Essential Properties Realty Trust

info@essentialproperties.com
609.436.0619
47 Hulfish Street, Suite 210
Princeton, NJ 08542