DEF 14A

DEF 14A 1 notice__proxy_statement-.htm DEF 14A DEF 14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

SCHEDULE 14A INFORMATION

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 [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[_] Confidential, For Use of the Commission Only (as Permitted by Rule 14a-6(e)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to §240.14a-12

National Retail Properties, Inc.

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(Name of Registrant as Specified in Its Charter)

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(Name of Person(s) Filing Proxy Statements, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee paid previously with preliminary materials.

[_] Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

NATIONAL RETAIL PROPERTIES, INC.

450 South Orange Avenue, Suite 900

Orlando, Florida 32801

Tel: 407-265-7348

March 22, 2022

To Our Stockholders:

You are cordially invited to attend the annual meeting of stockholders of National Retail Properties, Inc. (the “Company”) on May 12, 2022, at 8:30 a.m. local time, at 450 South Orange Avenue, Suite 900, Orlando, Florida 32801. As part of the Company's precautions regarding the coronavirus or COVID-19, the Company is planning for the possibility that stockholder attendance may not be permitted by local, state or federal law or may not be in the best interest of the Company's employees, stockholders and community to permit stockholder attendance. If stockholder attendance is not permitted or the Company determines that it is not in the best interest of the Company's employees, stockholders and community to permit stockholder attendance, the Company will arrange for stockholders to have access to the meeting via live telecast or webcast. If the Company takes this step, the Company will announce the decision to do so by April 28, 2022, via a press release and post details on its website that will also be filed with the SEC as proxy material. Enclosed for your review are the Proxy Card, Proxy Statement and Notice of Meeting for the Annual Meeting of Stockholders, which describe the business to be conducted at the meeting. The matters proposed for consideration at the meeting are:

1. The election of eight directors;

2. An advisory vote on executive compensation; and

3. The ratification of the selection of our independent registered public accounting firm for 2022.

Whether you own a few or many shares of stock of the Company, it is important that your shares be represented. If you cannot personally attend the meeting, we encourage you to make certain you are represented at the meeting by signing and dating the accompanying proxy card and promptly returning it in the enclosed envelope. You may also vote either by telephone (1-800-690-6903) or on the Internet (http://www.proxyvote.com). Returning your proxy card, voting by telephone or voting on the Internet will not prevent you from voting in person, but will assure that your vote will be counted if you are unable to attend the meeting. As always, the Company encourages you to vote your shares prior to the Annual Meeting.

Sincerely,

/s/ Julian E. Whitehurst

Julian E. Whitehurst

President and Chief Executive Officer

NATIONAL RETAIL PROPERTIES, INC.

450 South Orange Avenue, Suite 900

Orlando, Florida 32801

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 12, 2022

NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of NATIONAL RETAIL PROPERTIES, INC. will be held at 8:30 a.m. local time, on May 12, 2022 , at 450 South Orange Avenue, Suite 900, Orlando, Florida 32801*, for the following purposes:

1. The election of eight directors;

2. An advisory vote on executive compensation; and

3. The ratification of the selection of our independent registered public accounting firm for 2022.

We will also transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

Stockholders of record at the close of business on March 15, 2022, will be entitled to notice of and to vote at the annual meeting or at any adjournment thereof.

Stockholders are cordially invited to attend the meeting in person. PLEASE VOTE, EVEN IF YOU PLAN TO ATTEND THE MEETING, by completing, signing and returning the enclosed proxy card, by telephone (1-800-690-6903) or on the internet (http://www.proxyvote.com) by following the instructions on your proxy card. If you decide to attend the meeting you may revoke your Proxy and vote your shares in person. It is important that your shares be voted.

By Order of the Board of Directors,

/s/ Christopher P. Tessitore

Christopher P. Tessitore

Executive Vice President, General Counsel,

and Secretary

March 22, 2022

Orlando, Florida

*As part of the Company's precautions regarding the coronavirus or COVID-19, the Company is planning for the possibility that stockholder attendance may not be permitted by local, state or federal law or may not be in the best interest of the Company's employees, stockholders and community to permit stockholder attendance. If stockholder attendance is not permitted or the Company determines that it is not in the best interest of the Company's employees, stockholders and community to permit stockholder attendance, the Company will arrange for stockholders to have access to the meeting via live telecast or webcast. If the Company takes this step, the Company will announce the decision to do so by April 28, 2022, via a press release and post details on its website that will also be filed with the SEC as proxy material. As always, the Company encourages you to vote your shares prior to the Annual Meeting.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR

THE ANNUAL MEETING TO BE HELD ON MAY 12, 2022

Our Proxy Statement and our Annual Report to shareholders,

which includes our Annual Report on Form 10-K, are available at

www.nnnreit.com/proxyvote

NATIONAL RETAIL PROPERTIES, INC.

450 South Orange Avenue, Suite 900

Orlando, Florida 32801

Tel: 407-265-7348

PROXY STATEMENT

General. This Proxy Statement is furnished by the Board of Directors of National Retail Properties, Inc. (the “Company”) in connection with the solicitation by the Board of Directors of proxies to be voted at the annual meeting of stockholders to be held on May 12, 2022, and at any adjournment thereof, for the purposes set forth in the accompanying notice of such meeting. All stockholders of record at the close of business on March 15, 2022 (the “Record Date”), will be entitled to vote. It is anticipated that this Proxy Statement and the enclosed Proxy will be mailed to stockholders on or about March 30, 2022. The Proxy Statement and our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) will also be available on the Internet at www.nnnreit.com/proxyvote.

When we use the words “we,” “us,” “our” or “Company,” we are referring to National Retail Properties, Inc.

Voting/Revocation of Proxy. If you complete and properly sign and mail the accompanying proxy card, it will be voted as you direct. If you are a registered stockholder and attend the meeting, you may deliver your completed proxy card in person. “Street name” stockholders who wish to vote at the meeting will need to obtain a proxy from the institution that holds their shares.

If you are a registered stockholder, you may vote by telephone (1-800-690-6903), or electronically through the Internet (http://www.proxyvote.com), by following the instructions included with your proxy card. If your shares are held in “street name,” please check your proxy card or contact your broker or nominee to determine whether you will be able to vote by telephone or electronically.

Any proxy, if received in time, properly signed and not revoked, will be voted at such meeting in accordance with the directions of the stockholder. If no directions are specified, the proxy will be voted FOR each of Proposals I, II, and III contained herein. Any stockholder giving a proxy has the power to revoke it at any time before it is exercised. A proxy may be revoked (1) by delivery of a written statement to the Secretary of the Company stating that the proxy is revoked, (2) by presentation at the annual meeting of a subsequent proxy executed by the person executing the prior proxy, or (3) by attendance at the annual meeting and voting in person.

Vote Required for Approval; Quorum. The nominees for director who receive a majority of the votes cast will be elected. If you indicate “withhold authority to vote” for a particular nominee by entering the number of any nominee (as designated on the proxy card) below the pertinent instruction on the proxy card, your vote will not count either for or against the nominee. As of the Record Date, 175,810,465 shares of the common stock of the Company (the “Common Stock”) were outstanding, of which 175,141,685 shares entitled the holder thereof to one vote on each of the matters to be voted upon at the annual meeting. As of the Record Date, our executive officers and directors had the power to vote approximately .37% of the outstanding shares of Common Stock. Our executive officers and directors have advised us that they intend to vote their shares of Common Stock FOR each of Proposals I, II, and III contained herein.

The presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at a meeting of stockholders shall constitute a quorum.

Votes cast in person or by proxy at the annual meeting will be tabulated and a determination will be made as to whether or not a quorum is present. We will treat abstentions as shares that are present and entitled to vote for purposes of determining the presence or absence of a quorum, but as unvoted for purposes of determining the approval of any matter submitted to the stockholders. If a broker submits a proxy indicating that it does not have discretionary authority as to certain shares to vote on a particular matter (broker non-votes), those shares will not be considered as present and entitled to vote with respect to such matter. Broker non-votes with respect to the election of directors will have no effect on the outcome of the vote on that proposal.

YOUR VOTE AT THE ANNUAL MEETING IS VERY IMPORTANT TO US.

Solicitation of Proxies. Solicitation of proxies will be primarily by mail. We will bear the cost of soliciting proxies from our stockholders. In addition to solicitation by mail, our directors, officers, employees, and agents may solicit proxies by telephone, internet, or otherwise. These directors, officers, and employees will not be additionally compensated for the solicitation, but may be reimbursed for out-of-pocket expenses incurred in connection with the solicitation. Copies of solicitation materials will be furnished to brokerage firms, fiduciaries, and other custodians who hold shares of our Common Stock of record for beneficial owners for forwarding to such beneficial owners. We may also reimburse persons representing beneficial owners for their reasonable expenses incurred in forwarding such materials.

TABLE OF CONTENTS


PROPOSAL I: ELECTION OF DIRECTORS	1
Nominees	1
Corporate Governance	6
Corporate Responsibility	10
Audit Committee	13
Governance and Nominating Committee	14
Compensation Committee	15
Compensation Committee Interlocks and Insider Participation	16
Director Compensation	16
Code of Business Conduct, Insider Trading Policy, and Anti-Corruption Policy	17
AUDIT COMMITTEE REPORT	19
Executive Officers	20
EXECUTIVE COMPENSATION	21
Compensation Discussion and Analysis	21
COMPENSATION COMMITTEE REPORT	33
Executive Compensation Tables	34
Summary Compensation Table	34
Grants of Plan-Based Awards	35
Outstanding Equity Awards at Fiscal Year End	36
Option Exercises and Stock Vested	36
Potential Payments Upon Termination or Change of Control	37
Termination Upon Death or Disability	40
Termination by the Company without Cause; Termination by Executive for Good Reason	41
Termination upon Expiration of the Employment Agreement	41
Pay Ratio	45
PROPOSAL II: ADVISORY VOTE ON EXECUTIVE COMPENSATION	47
PROPOSAL III: RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	48
SECURITY OWNERSHIP	50
Section 16(a) Beneficial Ownership Reporting Compliance	51
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	51
OTHER MATTERS	52
PROPOSALS FOR NEXT ANNUAL MEETING	52
ANNUAL REPORT	53

PROPOSAL I

ELECTION OF DIRECTORS

Nominees

Based on the recommendation of our Governance and Nominating Committee, the persons named below have been nominated by the Board of Directors of the Company (the “Board of Directors” or the “Board”) for election as directors to serve until the next annual meeting of stockholders or until their successors shall have been elected and qualified.

In selecting the candidates to nominate for election as directors, the Governance and Nominating Committee’s principal qualification is whether an individual has the ability to act in the best interests of the Company and its stockholders. The Governance and Nominating Committee endeavors to identify individuals to serve on the Board who have expertise that is useful to the Company and complementary to the background, skills and experience of other Board members. Each individual serving on the Board should be willing to devote the time necessary to carry out the responsibilities of a director of the Company. The Governance and Nominating Committee’s assessment of the composition of the Board should include: (a) skills - business and management experience, real estate experience, accounting experience, finance and capital markets experience, and an understanding of corporate governance regulations and public policy matters, (b) character - ethical and moral standards, leadership abilities, sound business judgment, independence and innovative thought, and (c) composition - diversity and public company experience. The Governance and Nominating Committee measures the Board’s composition by taking into account the entirety of the Board and the criteria listed above rather than having any representational directors.

Our Board views diversity in a broad sense, taking into consideration not only racial, ethnic and gender diversity, but also the mix of qualifications of our directors including tenure, experience levels and types of experience, including both industry and subject matter expertise. When considering board candidates, the Governance and Nominating Committee considers whether an individual would bring a diverse viewpoint to the Board, including with respect to the candidate’s gender, race and ethnicity. The Governance and Nominating Committee has demonstrated its commitment to both diversity and board refreshment by adding over the last 6 years five new directors to the Board, expanding the diversity of gender, race, and ethnicity of the Board. Recent Board refreshment has deepened the diversity of composition, thought and experience of the Board, adding fresh perspectives, and maintaining the effectiveness of the Board through the retirement of its long-serving members. The Governance and Nominating Committee intends to continue considering the diversity of experience and perspective, including racial, ethnic and gender diversity, that future candidates may bring when nominating individuals to serve on our Board. Our Governance and Nominating Committee identifies potential director candidates through a variety of means, including recommendations from members of the Board, suggestions from Company management, and shareholder recommendations. Our Governance and Nominating Committee may also, in its discretion, engage director search firms to identify candidates. During fiscal year 2021, our Governance and Nominating Committee retained the services of a leading director search firm and paid a fee in connection with the director search process.

The table sets forth each nominee’s name, age, principal occupation or employment and directorships in other public corporations during at least the last five years, as well as the specific experience, qualifications, attributes and skills each nominee has acquired in such positions. Each of the nominees below have been recommended by the Governance and Nominating Committee and approved by the Board of Directors for inclusion on the attached proxy card.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL OF THE

NOMINEES DESCRIBED BELOW FOR ELECTION AS DIRECTORS.


Name and Age	Background

Pamela K.M. Beall, 65	Ms. Beall has served as a director of the Company since August 2016. In April 2021, Ms. Beall was appointed to the board of directors of Nationwide Mutual Insurance Company, a Fortune 100 financial services company. She also serves on the board of trustees of the University of Findlay. Ms. Beall retired in 2021 from Marathon Petroleum Corporation (MPC) as Executive Vice President, Chief Financial Officer and as a member of the board of directors of MPLX GP LLC, a subsidiary of MPC, positions which she held from 2016 and 2014, respectively. MPLX GP LLC is the general partner of MPLX LP, a publicly traded master limited partnership, which owns and operates crude oil, refined products and natural gas logistics assets and processing operations. Ms. Beall began her career with Marathon Oil Company (Marathon) in 1978 as an auditor. She then served as General Manager Treasury Services, at USX Corporation, a leading manufacturer of steel; Vice President and Treasurer at OHM Corporation, a leading environmental services provider and NationsRent, Inc, a construction equipment rental services company, and as a member of the boards of directors of System One Services, Inc. and Boyle Engineering. Ms. Beall rejoined Marathon in 2002, serving in areas of increasing responsibility, including as Director, Corporate Affairs; Organizational Vice President Business Development - Downstream; Vice President of Global Procurement, and Vice President of Products, Supply, & Optimization. She served as MPC’s Vice President, Investor Relations and Government & Public Affairs from 2011 to 2014, when she was named President of MPLX GP. She also served as Executive Vice President, Corporate Planning and Strategy of MPLX GP in 2016. Ms. Beall received a bachelor’s degree in accounting from the University of Findlay and a master’s degree in business administration from Bowling Green State University, is a non-practicing Certified Public Accountant, and she has attended the Oxford Institute for Energy Studies. Other public company directorships include Tesoro Logistics GP, LLC (2018-2109).
Steven D. Cosler, 66	Mr. Cosler has served as a director of the Company since August 2016 and Chairman since May 2021. Mr. Cosler served as the CEO of Priority Healthcare, which was acquired by Express Scripts in 2005 and was lead director of Catamaran Corporation, which was acquired by United Healthcare in July 2015. Mr. Cosler currently serves on the boards of Imagine360, Southern Scripts and Eversana, all of which are Water Street Healthcare Partners portfolio companies, and privately held MedShorts. He also serves as the Chairperson and co-founder of Elevate Indianapolis, a non-profit organization.


David M. Fick, 64	Mr. Fick has served as a director of the Company since November 2010. Mr. Fick is an adjunct professor at the Johns Hopkins University Carey Business School where he teaches graduate-level Real Estate Finance, Capital Markets, and REIT Structuring and Analysis. He is President of Nandua Oyster Company, an aquaculture business he founded in 2007. Mr. Fick served as Managing Director at Stifel Nicolaus & Company, a successor to Legg Mason Wood Walker. In that position he headed Real Estate Research and was an analyst covering real estate investment trusts from 1997 to 2010. During this period he was also a member of the Legg Mason Real Estate Capital Investment Committee. Mr. Fick also served as Equity Vice President, Finance with Alex Brown Kleinwort Benson and LaSalle Partners from 1993 to 1995, and as Chief Financial Officer at Mills Corporation and Western Development Corporation from 1991 to 1994. Prior to that, he was a practicing CPA and consultant with a national accounting firm, specializing in the real estate industry. He is also a member of the National Association of Real Estate Investment Trusts (“Nareit”), and the American Institute of Certified Public Accountants, and is a non-practicing Certified Public Accountant. He is also a member of the Johns Hopkins University Carey Business School Real Estate Advisory Board. Mr. Fick is also an active investor in private real estate funds and partnerships.
Edward J. Fritsch, 63	Mr. Fritsch has served as a director of the Company since February 2012. Mr. Fritsch retired in September 2019 as President and Chief Executive Officer of Highwoods Properties, Inc., a publicly traded REIT (NYSE: HIW). Joining Highwoods in 1982, Mr. Fritsch was a partner in the predecessor firm which launched its initial public offering in 1994. In 2004, Mr. Fritsch assumed the role of Chief Executive Officer. Mr. Fritsch is a former member of the Nareit Board of Governors and served as its 2015/2016 national chair. Mr. Fritsch is currently a member on the following boards: University of North Carolina at Chapel Hill Foundation, University of North Carolina at Chapel Hill Real Estate Holdings, Dix Park Conservancy and Executive Committee, Cristo Rey High School, North Carolina Chamber of Commerce, Triangle Family Services, and the YMCA of the Triangle.
Kevin B. Habicht, 63	Mr. Habicht has served as a director of the Company since June 2000, as Executive Vice President and Chief Financial Officer of the Company since December 1993 and as Treasurer of the Company since January 1998. Mr. Habicht served as Secretary of the Company from January 1998 to May 2003. Mr. Habicht is a Certified Public Accountant and a Chartered Financial Analyst. Mr. Habicht is currently a member of the Board of Directors for the Boys & Girls Clubs of Central Florida.


Betsy D. Holden, 66	Ms. Holden has served as a director of the Company since February 2019. Ms. Holden serves on the Food Chain Advisory Board and several private portfolio company boards for Paine Schwartz Partners, a private equity firm focused on sustainable agriculture and food products. She served as a Senior Advisor to McKinsey & Company from April 2007 to December 2020, leading strategy, marketing and board effectiveness initiatives for consumer goods, healthcare, and financial services clients. Prior to that, Ms. Holden spent 25 years in marketing and line positions in consumer goods. Ms. Holden served as President, Global Marketing and Category Development of Kraft Foods Inc. from January 2004 to June 2005, Co-Chief Executive Officer, Kraft Foods, Inc. 2001-2003, Chief Executive Officer of Kraft Foods North America from May 2000 to December 2003. Ms. Holden currently serves as a Director of Dentsply Sirona and Western Union. She has served on nine public boards over the last 20 years, including Diageo Plc (2009 - 2018), Time, Inc. (2014 - 2018), and Catamaran Corporation (2012 - 2015). Ms. Holden was selected as a 2015 NACD Directorship 100 honoree and was inducted into the Chicago Business Hall of Fame in 2016. Ms. Holden graduated Phi Beta Kappa with a Bachelor of Arts from Duke University and serves on the Executive Committee of Duke University's Board of Trustees. She received a Masters of Management in Marketing and Finance from Northwestern University's Kellogg School of Management and serves on the Global Advisory Board.
Stephen A. Horn, Jr, 50	In connection with the announcement on January 19, 2022, Mr. Horn has been promoted to Chief Executive Officer and President effective, April 29, 2022. In addition, Mr. Horn joined the Board of Directors effective February 17, 2022. Currently, Mr. Horn served as Executive Vice President and Chief Operating Officer of the Company since August 2020, and previously as Executive Vice President and Chief Acquisition Officer of the Company from January 2014 to August 2020. He also previously served as Senior Vice President of Acquisitions for the Company from June 2008 to December 2013, and as Vice President of Acquisitions of the Company from 2003 to 2008. Prior to 2003, Mr. Horn worked in the mergers and acquisitions group at A.G. Edwards & Sons in St. Louis, MO. He is a member of Innovating Commerce Serving Communities ("ICSC") and Nareit. Mr. Horn serves on the Board of Trustees of Windermere Preparatory School.
Kamau O. Witherspoon, 48	Mr. Witherspoon has served as a Director of the Company since January 2022. He recently joined Shipt as their Chief Executive Officer effective March 1, 2022. Prior to that, Mr. Witherspoon was a Senior Vice President of Operations at Target Corporation from 2018 to 2022, Senior Vice President of Operational Performance & Readiness at UnitedHealth Group from 2017 to 2018, and was a Chief Restaurant Excellence Officer, KFC US, with Yum! Brands, Inc. from 2015 to 2016. Prior to that, Mr. Witherspoon was at Target Corporation as a Senior Director of Store Operations from 2013 to 2015, as a Director of Risk Management, Finance from 2011 to 2013, as a Regional Director of Property Management from 2008 to 2011, and as a Corporate Real Estate Manager of Target Properties from 2007 to 2008. Mr. Witherspoon is a graduate of Morehouse College, and received his MBA from Old Dominion University in Accounting.

In the event that any nominee(s) should be unable to accept the office of director, which is not anticipated, it is intended that the persons named in the Proxy will vote FOR the election of such other person in the place of such nominee(s) for the office of director as the Board of Directors may recommend.

Board Composition

Qualifications and Experience. The Governance and Nominating Committee believes that a complementary balance of knowledge, experience and capability will best serve the Company and its stockholders. The table below summarizes certain of the types of experience, qualifications, attributes and skills of each director nominee that the Board believes to be desirable because of their particular relevance to the Company’s business and structure.

Racial, Ethnic and Gender Diversity, Tenure and Age. In addition to maintaining Board diversity in experience, qualifications, attributes and skills, The Governance and Nominating Committee is committed to ensuring Board diversity including racial, ethnic and gender diversity. To ensure the Board has an appropriate balance of institutional knowledge and fresh perspectives, our Governance and Nominating Committee considers, among other factors, length of tenure and age when reviewing nominees. We have onboarded five new directors in the past six years, increasing the racial, ethnic and gender diversity of the Board as well as breadth of experience, while also providing Board refreshment.

2021 Performance and Business Highlights

Our business strategy delivers consistent, sustainable growth in support of long-term value creation while maintaining a conservative balance sheet. In fiscal year 2021, we remained resilient through the pandemic and continued to grow operationally and deliver value to shareholders.


Dividend Growth	Capital Transactions
(2021 vs. 2020)
▪ 1.4% to $2.10 per share	▪ Raised $871 million of long-term debt
▪ 32nd consecutive year of annual dividend increases	▪ 30-year maturity
Rent Collections	Core FFO per share
(Year End December 31, 2021)
Quarter 1 - 97.7% Quarter 3 - 99.2%	▪ 2.86 per share
Quarter 2 - 99.1% Quarter 4 - 99.4%	▪ 10.4% annual growth over 2020 Core FFO per share

Corporate Governance

General. We are currently managed by an ten-member Board of Directors that consists of Mses. Beall and Holden, and Messrs. Cosler, DeFosset, Fick, Fritsch, Habicht, Horn, Whitehurst and Witherspoon, with Mr. DeFosset serving as Chairperson of the Board from January 1 - April 30, 2021; and Mr. Cosler from May 1, 2021 to present. Mr. DeFosset will retire from the Board effective as of May 12, 2022 and will not stand for re-election as a director. Mr. Witherspoon joined the Board as an independent director effective January 1, 2022.

Julian E. Whitehurst, our Chief Executive Officer and President and member of the Board, is not standing for re-election as a director and will retire from the Board and as Chief Executive Officer and President of the Company effective as of April 28, 2022 in connection with his previously announced retirement and the Company’s long-term executive succession planning.

Effective as of April 29, 2022, Stephen A. Horn, Jr. will assume the positions of Chief Executive Officer and President and, pursuant to the recommendation of the Governance and Nominating Committee, the Board appointed Mr. Horn as a member of the Board effective February 17, 2022. Pursuant to the Governance and Nominating Committee’s recommendation, Mr. Horn has been nominated by the Board for re-election as a director to serve until the next annual meeting of stockholders or until his successor has been elected and qualified.

The Board of Directors has adopted a set of corporate governance guidelines, which, along with the written charters for the Board committees described below, provide the framework for the Board’s governance of the Company. Our corporate governance guidelines are available on our website at http://www.nnnreit.com.

Highlights of our corporate governance include (1):


▪ Annual board self-assessment process	▪ Anti-Corruption Policy
▪ Code of Business Conduct	▪ Clawback Policy
▪ Independent standing Board committees	▪ Pledging Limitation Policy
▪ Six of our eight directors are independent	▪ 38% of directors are female or racially diverse
▪ Independent Chairperson of the Board with defined role	▪ Annual advisory vote on executive compensation
▪ A majority voting standard for uncontested elections of directors	▪ Procedures for stockholders to communicate directly with the Board
▪ Average Board tenure of 8 years (representing the nominees for election)	▪ Stock ownership guidelines for executive officers and directors
▪ Annual evaluation of the CEO by independent directors	▪ Periodic review of Committee charters and corporate governance guidelines
▪ Recent adoption of proxy access to make it easier for shareholders to nominate director candidates	▪ Regular meetings of our independent directors without management present
▪ Board oversight of the fair and ethical treatment of our human capital through our Human Capital Policy	▪ Policies prohibiting hedging, short selling and pledging of our common stock for all employees and directors
▪ Annual enterprise risk evaluation by the Company performed in conjunction with the Company's internal auditors to proactively identify and manage enterprise risk	▪ Board oversight of all Environmental, Social and Governance ("ESG") matters through the Governance and Nominating Committee at every quarterly meeting
▪ Audit Committee oversight of all cyber risks and data privacy risks at every quarterly meeting

(1) Statistics presented in the table reflect the composition of the current Board and reflect the announced retirements of Messrs. DeFosset and Whitehurst.

Independence and Composition. Our corporate governance guidelines and the rules and regulations of the New York Stock Exchange, which we refer to as the NYSE listing standards, each requires that a majority of the Board of Directors are “independent” directors, as that term is defined in the NYSE listing standards.

Leadership Structure. The Board of Directors has determined that Mses. Beall and Holden and Messrs. Cosler, DeFosset, Fick, Fritsch and Witherspoon representing a majority of the Board of Directors, qualify as independent directors (the “Independent Directors”) as that term is defined in the NYSE listing standards. The Board of Directors made its determination based on information furnished by all directors regarding their relationships with us and our affiliates and research conducted by management. In addition, the Board of Directors consulted with our external legal counsel to ensure that the Board’s determination would be consistent with all relevant securities laws and regulations as well as the NYSE listing standards.

Our Board of Directors has been directed by a non-executive Chairperson of the Board since 2017. The Board of Directors believes that having its own leadership separate from our Chief Executive Officer provides the Board of Directors with an effective way to ensure that they are fully informed and have the opportunity to fully debate all important issues in order to fulfill its oversight responsibilities and hold management accountable for the performance of the Company. This also allows our Chief Executive Officer to focus his time on running our day-to-day business. Mr. DeFosset has served as Chairperson of the Board since his election on December, 20, 2018 through April 30, 2021. Mr. Cosler has served as Chairperson of the Board since his election May 1, 2021. In his role as Chairperson of the Board, Mr. Cosler presides over all meetings of the stockholders and directors, and reviews and approves Board meeting schedules, agendas, and information provided to the Board. In addition, Mr. Cosler presides as Chairperson when the Board meets in executive session and he serves as the interface between the Board and the Chief Executive Officer in communicating matters discussed during the executive session.

Risk Oversight. Our management is responsible for managing the day-to-day risks associated with our business. The Board of Directors, however, is elected to provide effective oversight of our affairs for the benefit of our stockholders, and among its primary responsibilities, in accordance with our corporate governance guidelines, is overseeing management in the competent and ethical operation of the Company, reviewing and approving our business plans and corporate strategies, and adopting and evaluating policies of corporate and ethical conduct and governance. Implicit in these duties is risk oversight, the primary responsibility of which has been delegated to the Board’s Audit Committee. Among the significant risks that we oversee are operational risk; legal and regulatory compliance risk, financial risk, such as credit risks, interest rate risk, market risk, and liquidity risk; privacy and data security risk. The Audit Committee reviews with management annually, or more frequently as the Audit Committee deems necessary, our significant risks or exposures and discusses guidelines and policies to govern this process and assesses steps that management has taken to minimize such risks to the Company.

While the primary responsibility has been delegated to the Audit Committee, the Governance and Nominating Committee and the Compensation Committee consider risks within their area of responsibility. Further, each director may consult with management at any time and is encouraged to discuss with management any questions such director may have.

With respect to risks related to compensation matters, our management, together with the Compensation Committee, reviewed our compensation policies and practices for our employees in order to determine whether they are reasonably likely to have a material adverse effect on the Company. We believe that our compensation policies and practices do not promote unreasonable risk-taking behavior and are not reasonably likely to have a material adverse effect based on the following factors:

•

the Compensation Committee consists solely of independent non-employee directors, and the Compensation Committee has engaged an independent, external compensation consultant to assist with creating the executive compensation program;

•

the Compensation Committee maintains the right, in its sole discretion, to modify the compensation policies and practices at any time;

•

the Compensation Committee has elected to use awards of restricted stock instead of other equity awards, such as stock options, because, as a REIT, which pays a large portion of its annual earnings to stockholders in the form of dividends, the Compensation Committee believes that restricted stock provides a better incentive and alignment of interest than stock options;

•

restricted stock awards are intended to provide our named executive officers with a significant interest in the long-term performance of our stock;

•

restricted stock awards are subject to forfeiture upon certain employment termination events;

•

certain performance-contingent restricted stock awards are tied to our three-year TSR relative to a broad REIT peer group (70% weighting in 2021) to further focus our executive officers on long-term shareholder value creation;

•

bonus awards to our executive officers are reduced if balance sheet leverage exceeds levels previously approved by the Compensation Committee;

•

we have adopted a stock ownership policy for our executive officers and members of our Board which requires all directors and executive officers to own meaningful levels of Company stock;

•

we have adopted an insider trading policy which prohibits, among other things, trading of Company securities on a short-term basis, buying puts or calls on Company securities, short sales of Company securities, and certain other activities. We have adopted an anti-hedging policy that prohibits all employees, non-employee directors and executive officers from engaging in short sales of our securities, buying or selling puts or calls on our securities or otherwise engaging in hedging transactions (such as zero-cost dollars, exchange funds, and forward sale contracts) involving our securities;

•

we have adopted a pledging limitation policy for our directors and executive officers which restricts directors and executive officers from pledging shares of the Company and holding of shares of the Company in margin accounts (no directors or executive officers have pledged any shares);

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we have adopted a clawback policy for our executive officers which allows the Board to recover certain incentive compensation if the Company has a material restatement of financial results, as a result of such restatement the incentive compensation would not have been earned, and the executive officer engaged in fraud or other intentional misconduct;

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none of our employees are paid commission compensation;

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bonus and incentive awards to our employees eligible for bonus awards are capped; and

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we base executive compensation on several critical success factors over multiple time frames.

Given these factors, we believe we have mitigated potential short-term excessive risk-taking and aligned compensation with increasing long-term shareholder value.

Meetings and Attendance. Our corporate governance guidelines provide that it is the responsibility of individual directors to make themselves available to attend scheduled and special Board meetings on a consistent basis. All of the directors were in attendance for all four Board of Directors meetings in 2021 and for the 2021 annual meeting of the Company’s stockholders. Non-management members of the Board of Directors met in an executive session five times in the fiscal year ended December 31, 2021. These sessions were presided over by Mr. DeFosset and Mr. Cosler in their capacity as Chairperson.

Interested Party Communications. The Board of Directors has adopted a process whereby stockholders and other interested parties can send communications to our directors. Anyone wishing to communicate directly with one

or more directors may do so in writing addressed to the director or directors, c/o National Retail Properties, Inc., 450 South Orange Avenue, Suite 900, Orlando, Florida 32801, attention: Secretary of the Company. All correspondence will be reviewed by the Secretary of the Company and forwarded directly to the addressee so long as, in the Secretary’s discretion, such correspondence is reasonably related to protecting or promoting legitimate interests of interested parties or the reliability of the financial markets.

Corporate Responsibility

We are focused on achieving success for our shareholders, providing a world class working environment for our associates, enriching our community and maximizing the preservation of environmental resources. We operate our business in accordance with the highest ethical standards and best-in-class corporate governance standards not just because it is the right thing to do, but because it is critical to the long-term success of our shareholders, associates, and community.

Human Capital Development. As of January 31, 2022, the Company employed 72 associates. Our success is dependent upon the dedication and hard work of our talented associates. Our associates are true experts in their fields. We encourage continued professional and personal development of all associates by providing hundreds of hours of in-person and online training opportunities that touch all aspects of our business. We also have associate mentoring and training programs and formalized talent development programs at all levels of the Company. The success of our commitment to our associates is shown in the long tenure of our associates. Our executive team, our department heads, and our senior managers average over 20 years of experience with the Company. In addition, 49% of our associates have been with company for 10 years or longer. The institutional knowledge and long tenure of our associates is a true competitive advantage of the Company. We have adopted a Human Capital Policy which is available on our website at http://www.nnnreit.com.

Total Rewards, Benefits & Work-Life Balance. The Company also focuses on additional benefits for our associates to make sure our associates are not only well compensated but also engaged, developed and satisfied with their work-life balance. There are six key elements to our total rewards system: Compensation, Benefits, Wellness, Work-Life Balance, Professional Development and Recognition. Our programs include but are not limited to a 401(k) plan with a company match, flexible work schedules, college saving plans, educational assistance program, adoption benefits, flexible spending and health saving accounts, health and wellness events, and access to a state of the art online wellness platform. We have been the recipient of numerous wellness awards, including the prestigious Cigna Well-Being Award. We actively monitor employee engagement and we conducted an anonymous associate engagement survey in both 2020 and 2021 using a leading third party consultant. We have taken a variety of actions and made a variety of initiatives based on the results of such surveys, including but not limited to, an expanded Remote Work Policy, expanded employee recognition programs and other health and wellness programs.

Community Service and Partnerships. We care about the communities in which we live and work. We stand behind our commitment to improving education, strengthening neighborhoods, and encouraging volunteer service. We actively promote volunteering by our associates. We organize and sponsor specific volunteer days throughout the year at various charities, including Ronald McDonald House of Central Florida and Give Kids the World. Associates are encouraged to volunteer on work days during work hours. In addition to our donation of time, we also are a meaningful financial investor in numerous charities in the Central Florida community, including the Boys & Girls Clubs of Central Florida, Elevate Orlando (a teacher mentor program for high risk urban youth that help young women and men graduate high school with a plan for the future) and Second Harvest Food Bank.

Environmental Practices and Impact. As an owner of a large number of properties throughout the United States it is important to the Company to be a good corporate citizen and a good steward of the environment. We demonstrate our commitment to be a good stewardship of the environment in a variety of ways both at our headquarters and at our properties across the country.

Our Headquarters. Our headquarters building is EPA’s Energy Star certified. A building that has earned EPA’s Energy Star certification uses 35% less energy and generates 35% fewer greenhouse gas emissions. In order to receive this designation, the following components must be met:

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Utilization of energy efficient LED lighting.

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Use of environmentally friendly cleaning products. The products must meet the Green Seal certification standards.

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Variable Frequency drives and more energy efficient motors are purchased and installed in all cooling tower units.

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Mandatory shut down of all lighting and HVAC systems daily.

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The building utilizes a bulb crusher for all lamps which contains a dust removal system that exceeds HEPA standards by removing 99.99% of particles for the building fluorescents.

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To minimize generation of waste and release of pollutants, the building requires all paint to be low VOC.

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Storm water retention is managed through water runoff from roofs and paved areas and are routed to various underground drainage basins. All water runoff is naturally filtered and returned to the aquifer.

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Green-friendly native and drought-tolerant plants are used in landscaping to minimize watering needs.

Furthermore, we encourage a culture of environmental preservation and efficient usage of environmental resources throughout the company by supporting the following green initiatives:

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Associates are provided with a pre-tax payroll deduction for the use of the commuter rail system to limit the number of automobile trips and reduce our carbon footprint.

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Single-stream recycling is implemented at our headquarters.

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We purchase Energy Star certified desktop and laptop computers, monitors and printers.

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We use Energy Star power management settings on our computers and monitors.

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We recycle old computer equipment, printers and any other electronic items.

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We dispose all ink cartridges utilizing the manufacturer’s recycling program.

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Our document destruction provider recycles all shredded materials (resulting in annual savings of roughly 200 trees a year).

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We require all associates to use personal cups and have installed water machines to limit the use of plastic cups and bottles.

We have located our headquarters where our associates can reduce their carbon footprint by using the following green transportation programs: (i) electric charging stations and designated parking spaces for hybrid vehicles, (ii) bicycle storage lockers as well as bike racks, (iii) electric commuter bike and scooter rental stations, and (iv) free commuter bus for travel throughout downtown Orlando.

Our Portfolio of Properties. The properties in our portfolio are generally leased to our tenants under long-term triple net leases with typical lease terms of 30 to 40 years including base terms and option terms which gives our tenants exclusive control over and the ability to institute energy conservation and environmental management programs at our properties. Our tenants are overwhelmingly large companies with sophisticated conservation and sustainability programs. These programs limit the use of resources and limit the impact of the use of our properties on the environment, including, but not limited to, implementing green building and lighting standards, and recycling programs. Our leases also typically require the tenants to fully comply with all environmental laws, rules and regulations, including any remediation requirements. Our risk management associates actively monitor any environmental conditions on our properties to make sure that the tenants are meeting their obligations to remediate or remedy any open environmental matters. On all properties that we acquire we obtain an environmental assessment from a licensed environmental consultant to understand any environmental risks and liabilities associated with a

property and to ensure that the tenant will address any environmental issues on our properties. Furthermore, we have in place a portfolio environmental insurance policy that covers substantially all of properties from certain environmental risks.

When possible under our triple-net leases, we engage with our tenants to promote good environmental practices on our properties, including discussions regarding the following: (i) environmental sustainability and recycling requirements, (ii) energy efficiency requirements, including Energy Star requirements, and EPA Water Sense program requirements, (iii) environmental conservation and green building requirements, in accordance with industry best practices, and (iv) energy usage reporting requirements. Furthermore, our form leases require the tenants to report energy usage and emissions.

Climate Preparedness. We regularly monitor the status of impending natural disasters and the impact of such disasters on our properties. In most leases our tenants are required to carry full replacement cost coverage on all improvements located on our properties. For those properties located in a nationally designated flood zone, we typically require our tenants to carry flood insurance pursuant to the federal flood insurance program. For those properties located in an area of high earthquake risk, we typically require our tenants to carry earthquake insurance above what is typically covered in an extended coverage policy. In addition, we also carry a contingent extended coverage policy on all of its properties which also provides coverage for certain casualty events, including fire and windstorm.

Some of the highlights of the Company's ongoing commitment to being a good and ethical corporate citizen include the following actions taken by the Company in 2020-2021:

ESG Highlights

▪ Adopted Remote Work Policy proving much greater flexibility to associates based on feedback from our
annual Associate Engagement Survey.

▪ Adopted Vendor Code of Conduct ensuring our vendors comply with our ethical rules and commitments.

▪ Adopted Proxy Access Bylaws expanding proxy access to our shareholders.

▪ Adopted Human Rights Policy to acknowledge our obligation to promote human rights in our relationships
with our associates, vendors and tenants.

▪ Adopted Human Capital Policy furthering our commitment to our associates and the ethical treatment of others
which is embedded in everything we do.

▪ Revised Governance and Nominating Committee Charter to make the committee explicitly responsible for
overseeing ESG matters at each quarterly meeting of the committee.

▪ Elected 5 new directors in the past 6 years significantly expanding Board diversity in tenure, gender, race and
ethnicity.

▪ Donated over $1 million over the past 15 years to Elevate Orlando and Boys & Girls Clubs of Central Florida,
     local charities supporting urban youth in underserved communities pursuant to long standing relationships
     between the Company and said charities to further manifest our commitment to the community in which we
     and our associates live and work.

Audit Committee

General. The Board of Directors has established an Audit Committee, which is governed by a written charter, a copy of which is available on our website at http://www.nnnreit.com. Among the duties, powers and responsibilities of the Audit Committee as provided in its charter, the Audit Committee:

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has sole power and authority concerning the engagement and fees of independent registered public accounting firms;

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reviews with the independent registered public accounting firm the plans and results of the audit engagement;

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pre-approves all audit services and permitted non-audit services provided by the independent registered public accounting firm;

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reviews the independence of the independent registered public accounting firm;

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reviews the adequacy and effectiveness of our internal control over financial reporting;

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oversees and reviews at every quarterly meeting all privacy and data security and cyber risks, including internal control over all such risks; and

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reviews accounting, auditing and financial reporting matters with our independent registered public accounting firm and management.

Independence and Composition. The composition of the Audit Committee is subject to the independence and other requirements of the Securities Exchange Act of 1934 and the rules and regulations promulgated by the SEC thereunder (the “Exchange Act”), and the NYSE listing standards.

The Board of Directors, upon the unanimous recommendation of the Governance and Nominating Committee, has determined that all current members of the Audit Committee are “independent,” as that term is defined in the NYSE listing standards and as required by the Exchange Act, and meet all audit committee composition requirements of the Exchange Act and the NYSE listing standards, and that each of Mses. Beall and Holden and Mr. Fick qualifies as an “audit committee financial expert” as that term is defined in the Exchange Act.

Meetings. The Audit Committee met nine times in the fiscal year ended December 31, 2021. The current Audit Committee consists of Mses. Beall and Holden and Messrs. Fick and Fritsch, with Mr. Fick serving as Chairperson.

Governance and Nominating Committee

General. The Board of Directors has established a Governance and Nominating Committee, which is governed by a written charter, a copy of which is available on our website at http://www.nnnreit.com. As provided in the Governance and Nominating Committee charter, the Governance and Nominating Committee:

•

identifies and recommends to the Board of Directors individuals to stand for election and re-election to the Board of Directors at our annual meeting of stockholders and to fill vacancies that may arise from time to time;

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develops and makes recommendations to the Board of Directors for the creation and ongoing review and revision of a set of effective corporate governance principles that promote our competent and ethical operation and a policy governing ethical business conduct of our employees and directors;

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reviews and discusses all ESG matters of the Company at every quarterly meeting including diversity, equity and inclusion matters; and

•

makes recommendations to the Board of Directors as to the structure and membership of committees of the Board of Directors.

Selection of Director Nominees. Our corporate governance guidelines provide that the Governance and Nominating Committee will endeavor to identify individuals to serve on the Board of Directors who have expertise that is useful to us and complimentary to the background, skills and experience of other Board members. The process undertaken by the Governance and Nominating Committee is described under the section of this proxy statement entitled "PROPOSAL 1 - ELECTION OF DIRECTORS - Nominees".

The Governance and Nominating Committee also considers director nominees recommended by stockholders. See the section of this proxy statement entitled “PROPOSALS FOR NEXT ANNUAL MEETING” for a description of how stockholders desiring to make nominations for directors and/or to bring a proper subject before a meeting should do so. The Governance and Nominating Committee evaluates director candidates recommended by

stockholders in the same manner as it evaluates director candidates recommended by our directors, management or employees.

In addition, in February 2021, the Board of Directors adopted amendments to our bylaws to implement proxy access. A stockholder, or group of up to 20 stockholders, owning continuously for at least three years shares of Company Common Stock representing an aggregate of at least 3% of our outstanding shares, may nominate and include in the Company’s proxy materials director nominees constituting up to the greater of (i) two directors or (ii) 20% of the Board, provided that the shareholder(s) and nominee(s) satisfy the requirements in the bylaws.

Independence and Composition. The NYSE listing standards require that the Governance and Nominating Committee consist solely of independent directors. The Board of Directors, upon the unanimous recommendation of the Governance and Nominating Committee, has determined that all current members of the Governance and Nominating Committee are “independent” as that term is defined in the NYSE listing standards.

Meetings. The Governance and Nominating Committee met five times in the fiscal year ended December 31, 2021. The current Governance and Nominating Committee consists of Ms. Beall and Messrs. Fritsch and DeFosset, with Mr. Fritsch serving as Chairperson.

Compensation Committee

General. The Board of Directors has established a Compensation Committee, which is governed by a written charter, a copy of which is available on our website at http://www.nnnreit.com.

Processes and Procedures for Executive and Director Compensation Determinations

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Role of Compensation Committee. The Compensation Committee is responsible for discharging the responsibilities of the Board of Directors with respect to approving and evaluating compensation plans, policies and programs for our executive officers and directors and approving all awards to any executive officer, director or associate under our equity incentive plans. The Compensation Committee also serves as the administrator of our 2017 Performance Incentive Plan.

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Role of Management in Compensation Determinations. The Compensation Committee considers the recommendations of our Chief Executive Officer when determining the base salary and incentive performance compensation levels of the other executive officers. Similarly, the Compensation Committee also considers the recommendations of our Chief Executive Officer when setting specific Company and individual incentive performance targets. In addition, officers may be invited to attend committee meetings. Management generally does not have a role in the setting of non-employee director compensation.

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Role of Compensation Consultants. The Compensation Committee has the authority, in its sole discretion, to engage compensation consultants as needed or desired to assist the Compensation Committee in researching and evaluating executive officer and non-employee director compensation programs. Since 2012, the Compensation Committee has retained Pearl Meyer & Partners, an independent compensation consulting firm (“Pearl Meyer”), to assist the Compensation Committee in reviewing and evaluating the Company’s executive and non-employee director compensation programs. The use of independent third-party consultants provides additional assurance that our executive compensation programs are reasonable, consistent with Company objectives, and competitive with executive compensation for companies in our peer group. Pearl Meyer reports directly to the Compensation Committee, provides no other services to the Company, and regularly participates in committee meetings. The Compensation Committee assessed the independence of Pearl Meyer pursuant to the applicable SEC rules and concluded no conflict of interest exists that would prevent Pearl Meyer from serving as an independent advisor to the Compensation Committee.

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Delegation of Authority by the Committee. The Compensation Committee may delegate its authority to make and administer awards under our equity incentive plans to another committee of the Board of Directors or, except for awards to individuals subject to Section 16 of the Exchange Act, to one or more of our officers. On an annual basis, the Compensation Committee typically authorizes a limited number of shares of restricted stock to be awarded by our Chief Executive Officer to such of our non-executive associates as he determines, in consultation with our other executive officers.

Our executive compensation programs and philosophy are described in greater detail under the section entitled “Compensation Discussion and Analysis.”

Independence and Composition. The NYSE listing standards require that the Compensation Committee consist solely of independent directors. The Board of Directors, upon the unanimous recommendation of the Governance and Nominating Committee, has determined that all current members of the Compensation Committee are “independent” as that term is defined in the NYSE listing standards.

Meetings. The Compensation Committee met five times in the fiscal year ended December 31, 2021. The current Compensation Committee consists of Ms. Holden and Messrs. DeFosset and Fick, with Ms. Holden serving as Chairperson.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee is or was previously an officer or employee of the Company, and no executive officer of the Company serves on the board of directors of any company at which any member of the Compensation Committee is employed.

Director Compensation

The Compensation Committee periodically reviews the non-employee director compensation program, with the assistance of its independent consultant, to ensure it remains sufficiently competitive to attract and retain high caliber and experienced Board members. In doing so, consideration is given to director pay practices and values for comparable organizations, including the same industry peer group used in the review of executive compensation for named executive officers. The following table summarizes the non-employee director compensation program in effect during fiscal year 2021:


Pay Component	Value
Board Member Retainer	$200,000 (up to $80,000 payable in cash)
Board Chair Premium Retainer	$87,500
Committee Service Retainers:
Audit	Chair: $25,000; Other Members: $10,000
Compensation	Chair: $20,000; Other Members: $8,000
Governance & Nominating	Chair: $15,000, Other Members: $6,000

Retainer values for board and committee service have been in effect since July 1, 2017, and the Board Chair premium retainer value has been in effect since July 1, 2019. Non-employee directors may elect to receive up to $80,000 of their annual board compensation in the form of cash, with the remainder paid in shares of the Company’s common stock. All retainers are paid on a quarterly basis.

Following a Pearl Meyer study conducted in 2021 which found that total compensation levels and total Board costs for our directors were below the 50th percentile (or “median”) of industry peers (as identified in the “Executive Compensation-Compensation Discussion and Analysis-Benchmarking” section of this proxy), the Compensation

Committee approved certain changes to the non-employee director pay program, effective July 1, 2022. Changes include increases to the Board member retainer (to $212,500, with up to $80,000 payable in cash), Board Chair premium retainer (to $100,000), Compensation Committee Chair retainer (to $22,500), and retainers for service on the Governance and Nominating Committee (to $20,000 for the Chair and $8,000 for other members). Committee retainers continue to be payable in cash or stock at the election of each non-employee director. The following table shows the compensation paid to our non -employee directors during fiscal year 2021:


Name	Fees Earned or Paid in Cash	Stock Awards(1)	Total
(a)	(b)	(c)	(d)
Pamela K. M. Beall	--	$223,250	$223,250
Steven D. Cosler(2)	--	$269,250	$269,250
Don DeFosset	$91,750	$166,250	$258,000
David M. Fick(2)	$113,000	$126,250	$239,250
Edward J. Fritsch	--	$233,750	$233,750
Betsy D. Holden(2)	$105,250	$126,250	$231,500

__________

(1)

The awards shown in column (c) represent stock awards as a result of an annual election to receive stock in lieu of cash made to directors of the Company. The amounts represent the grant date fair value with respect to the fiscal year in accordance with FASB ASC Topic 718.

(2)

The stock awards earned by Ms. Holden ($126,250), as well as the stock awards earned by Mr. Fick ($126,250), and Mr. Cosler ($269,250) are deferred into shares of our common stock under our Deferred Fee Plan, which is described in greater detail below.

Pursuant to our corporate governance guidelines, each of our non-employee directors is required to own our Common Stock equivalent to three times the annual total board compensation (including both the cash and equity components) within five years of becoming a board member. The Compensation Committee reviews progress toward meeting these ownership requirements annually, and each of the nominees that have served on the Board of Directors for the requisite number of years exceeds the ownership requirements.

A Deferred Fee Plan was established by the Company for the benefit of its directors and their beneficiaries. A director may elect to defer all or part of his or her director’s fees to be earned in any calendar year by filing a deferred fee agreement with the Company no later than December 15 of the previous year. A director has the option to have deferred fees paid in cash, in shares of Common Stock or in a combination of cash and Common Stock. If the director elects to have the deferred fees paid in stock, the number of shares allocated to the director’s stock account is determined based on the market value of the Common Stock on the trading day preceding the date the deferred director’s fees were earned. A director is entitled to receive the vested portion of the amounts credited to his or her deferred fee account at the time specified in such director’s fee agreement.

The following table sets forth fees deferred into shares of Common Stock, as well as dividends earned on the deferred shares by directors under the Deferred Fee Plan.


	Number of Shares Credited to Deferred Fee Account
Name	2021	Total
Steven D. Cosler	7,080	29,692
Don DeFosset	1,530	33,996
David M. Fick	4,634	42,739
Betsy D. Holden	3,106	8,777
Total	16,350	115,204

Code of Business Conduct, Insider Trading Policy, and Anti-Corruption Policy

Our directors, as well as our officers and employees, are also governed by our Code of Business Conduct, an Insider Trading Policy, and Anti-Corruption Policy, all of which are available on our website at

http://www.nnnreit.com. Amendments to, or waivers from, a provision of the Code of Business Conduct that applies to our directors, executive officers or employees will be posted to our website within four business days following the date of such amendment or waiver.

AUDIT COMMITTEE REPORT

The information contained in this 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 previous or future filings under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act except to the extent that the Company incorporated it by specific reference.

Management is responsible for the Company’s financial statements, internal controls and financial reporting process. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and to issue a report thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. The Audit Committee is governed by a charter, a copy of which is available on our website at http://www.nnnreit.com. The Audit Committee charter is designed to assist the Audit Committee in complying with applicable provisions of the Exchange Act and the NYSE listing standards, all of which relate to corporate governance and many of which directly or indirectly affect the duties, powers and responsibilities of the Audit Committee.

Review and Discussions with Management and Independent Registered Public Accounting Firm. In this context, the Audit Committee has met and held discussions with management and the independent registered public accounting firm. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee has reviewed and discussed the audited consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee has discussed with the independent auditor the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board ("PCAOB") and the SEC.

The Company’s independent registered public accounting firm also provided to the Audit Committee the written disclosures and letter required by applicable requirements of PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with the independent registered public accounting firm that firm’s independence. The Audit Committee has reviewed the original proposed scope of the annual audit of the Company’s consolidated financial statements and the associated fees and any significant variations in the actual scope of the audit and fees.

Conclusion. Based on the review and discussions referred to above, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC.

AUDIT COMMITTEE

David M. Fick, Chairperson

Pamela K. M. Beall

Edward J. Fritsch

Betsy D. Holden

Executive Officers

Our executive officers for fiscal year 2021 are listed below.


Name	Position

Julian E. Whitehurst	President and Chief Executive Officer
Kevin B. Habicht	Executive Vice President, Chief Financial Officer, Assistant Secretary and Treasurer

SEC Form DEF 14A filed by National Retail Properties