Maryland
(State or other jurisdiction of
incorporation or organization)
|
56-1431377
(I.R.S. Employer Identification No.)
|
Large accelerated filer
x
|
|
Accelerated filer
¨
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
|
|
PAGE
REFERENCE
|
Part I - Financial Information
|
|
|
Item 1.
|
|
|
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Part II - Other Information
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
NATIONAL RETAIL PROPERTIES, INC.
and SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
|
|||||||
|
March 31, 2012
|
|
December 31, 2011
|
||||
ASSETS
|
(unaudited)
|
|
|
||||
Real estate portfolio:
|
|
|
|
||||
Accounted for using the operating method, net of accumulated depreciation and amortization
|
$
|
3,393,906
|
|
|
$
|
3,223,304
|
|
Accounted for using the direct financing method
|
25,359
|
|
|
25,752
|
|
||
Real estate held for sale
|
42,997
|
|
|
38,686
|
|
||
Investment in unconsolidated affiliate
|
4,312
|
|
|
4,358
|
|
||
Mortgages, notes and accrued interest receivable, net of allowance
|
36,366
|
|
|
33,428
|
|
||
Commercial mortgage residual interests
|
15,016
|
|
|
15,299
|
|
||
Cash and cash equivalents
|
3,033
|
|
|
2,082
|
|
||
Receivables, net of allowance of $1,843 and $1,403, respectively
|
1,563
|
|
|
2,149
|
|
||
Accrued rental income, net of allowance of $4,875 and $4,870, respectively
|
25,687
|
|
|
25,187
|
|
||
Debt costs, net of accumulated amortization of $16,159 and $15,332, respectively
|
9,975
|
|
|
10,802
|
|
||
Other assets
|
54,324
|
|
|
53,382
|
|
||
Total assets
|
$
|
3,612,538
|
|
|
$
|
3,434,429
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Line of credit payable
|
$
|
26,200
|
|
|
$
|
65,600
|
|
Mortgages payable
|
22,883
|
|
|
23,171
|
|
||
Notes payable – convertible, net of unamortized discount of $5,319 and $6,363, respectively
|
356,416
|
|
|
355,371
|
|
||
Notes payable, net of unamortized discount of $4,897 and $5,033, respectively
|
895,103
|
|
|
894,967
|
|
||
Accrued interest payable
|
21,885
|
|
|
15,108
|
|
||
Other liabilities
|
73,879
|
|
|
76,336
|
|
||
Total liabilities
|
1,396,366
|
|
|
1,430,553
|
|
||
|
|
|
|
|
|
||
Equity:
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.01 par value. Authorized 15,000,000 shares
|
|
|
|
||||
Series D, 11,500,000 depositary shares issued and outstanding, at stated liquidation value of $25
per share
|
287,500
|
|
|
—
|
|
||
Series C, 3,680,000 depositary shares issued and outstanding, at stated liquidation value of $25 per
share
|
—
|
|
|
92,000
|
|
||
Common stock, $0.01 par value. Authorized 190,000,000 shares; 106,595,333 and 104,754,859
shares issued and outstanding, respectively
|
1,067
|
|
|
1,049
|
|
||
Excess stock, $0.01 par value. Authorized 205,000,000 shares; none issued or outstanding
|
—
|
|
|
—
|
|
||
Capital in excess of par value
|
1,990,633
|
|
|
1,958,225
|
|
||
Retained earnings (loss)
|
(60,623
|
)
|
|
(44,946
|
)
|
||
Accumulated other comprehensive income (loss)
|
(3,775
|
)
|
|
(3,830
|
)
|
||
Total stockholders’ equity of NNN
|
2,214,802
|
|
|
2,002,498
|
|
||
Noncontrolling interests
|
1,370
|
|
|
1,378
|
|
||
Total equity
|
2,216,172
|
|
|
2,003,876
|
|
||
Total liabilities and equity
|
$
|
3,612,538
|
|
|
$
|
3,434,429
|
|
|
Quarter Ended March 31,
|
||||||
|
2012
|
|
2011
|
||||
Revenues:
|
|
|
|
||||
Rental income from operating leases
|
$
|
73,625
|
|
|
$
|
57,007
|
|
Earned income from direct financing leases
|
628
|
|
|
740
|
|
||
Percentage rent
|
111
|
|
|
115
|
|
||
Real estate expense reimbursement from tenants
|
2,832
|
|
|
2,280
|
|
||
Interest and other income from real estate transactions
|
707
|
|
|
620
|
|
||
Interest income on commercial mortgage residual interests
|
755
|
|
|
767
|
|
||
|
78,658
|
|
|
61,529
|
|
||
Retail operations:
|
|
|
|
||||
Revenues
|
11,224
|
|
|
8,850
|
|
||
Operating expenses
|
(11,062
|
)
|
|
(8,852
|
)
|
||
Net
|
162
|
|
|
(2
|
)
|
||
Operating expenses:
|
|
|
|
||||
General and administrative
|
7,603
|
|
|
6,657
|
|
||
Real estate
|
4,612
|
|
|
3,652
|
|
||
Depreciation and amortization
|
18,117
|
|
|
13,428
|
|
||
Impairment – commercial mortgage residual interests valuation
|
—
|
|
|
129
|
|
||
|
30,332
|
|
|
23,866
|
|
||
Earnings from operations
|
48,488
|
|
|
37,661
|
|
||
Other expenses (revenues):
|
|
|
|
||||
Interest and other income
|
(386
|
)
|
|
(342
|
)
|
||
Interest expense
|
19,645
|
|
|
17,662
|
|
||
|
19,259
|
|
|
17,320
|
|
||
Earnings from continuing operations before income tax (expense) benefit and equity in earnings of
unconsolidated affiliate
|
29,229
|
|
|
20,341
|
|
||
Income tax (expense) benefit
|
(97
|
)
|
|
19
|
|
||
Equity in earnings of unconsolidated affiliate
|
150
|
|
|
109
|
|
||
Earnings from continuing operations
|
29,282
|
|
|
20,469
|
|
||
Earnings from discontinued operations, net of income tax expense (Note 6)
|
542
|
|
|
384
|
|
||
Earnings including noncontrolling interests
|
29,824
|
|
|
20,853
|
|
||
Loss (earnings) attributable to noncontrolling interests:
|
|
|
|
||||
Continuing operations
|
20
|
|
|
26
|
|
||
Discontinued operations
|
(12
|
)
|
|
(59
|
)
|
||
|
8
|
|
|
(33
|
)
|
||
Net earnings attributable to NNN
|
$
|
29,832
|
|
|
$
|
20,820
|
|
|
Quarter Ended March 31,
|
||||||
|
2012
|
|
2011
|
||||
|
|
|
|
||||
Net earnings attributable to NNN
|
$
|
29,832
|
|
|
$
|
20,820
|
|
Series C preferred stock dividends
|
(1,979
|
)
|
|
(1,696
|
)
|
||
Excess of redemption value over carrying value of preferred shares redeemed
|
(3,098
|
)
|
|
—
|
|
||
Net earnings attributable to common stockholders
|
$
|
24,755
|
|
|
$
|
19,124
|
|
Net earnings per share of common stock:
|
|
|
|
||||
Basic:
|
|
|
|
||||
Continuing operations
|
$
|
0.23
|
|
|
$
|
0.23
|
|
Discontinued operations
|
—
|
|
|
—
|
|
||
Net earnings
|
$
|
0.23
|
|
|
$
|
0.23
|
|
Diluted:
|
|
|
|
||||
Continuing operations
|
$
|
0.22
|
|
|
$
|
0.22
|
|
Discontinued operations
|
0.01
|
|
|
0.01
|
|
||
Net earnings
|
$
|
0.23
|
|
|
$
|
0.23
|
|
Weighted average number of common shares outstanding:
|
|
|
|
||||
Basic
|
104,840,867
|
|
|
83,122,731
|
|
||
Diluted
|
106,211,366
|
|
|
83,570,438
|
|
||
Other Comprehensive Income:
|
|
|
|
||||
Net earnings attributable to NNN
|
$
|
29,832
|
|
|
$
|
20,820
|
|
Amortization of interest rate hedges
|
56
|
|
|
(43
|
)
|
||
Fair value treasury locks
|
—
|
|
|
1,663
|
|
||
Unrealized gain - commercial mortgage residual interests
|
—
|
|
|
60
|
|
||
Stock value adjustments
|
(1
|
)
|
|
(19
|
)
|
||
Comprehensive income attributable to NNN
|
$
|
29,887
|
|
|
$
|
22,481
|
|
|
Quarter Ended March 31,
|
||||||
|
2012
|
|
2011
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Earnings including noncontrolling interests
|
$
|
29,824
|
|
|
$
|
20,853
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
|
|
|
||||
Performance incentive plan expense
|
2,257
|
|
|
1,739
|
|
||
Depreciation and amortization
|
18,263
|
|
|
13,670
|
|
||
Impairment losses and other charges
|
35
|
|
|
—
|
|
||
Impairment – commercial mortgage residual interests valuation
|
—
|
|
|
129
|
|
||
Amortization of notes payable discount
|
1,181
|
|
|
1,654
|
|
||
Amortization of deferred interest rate hedges
|
56
|
|
|
(43
|
)
|
||
Equity in earnings of unconsolidated affiliate
|
(150
|
)
|
|
(109
|
)
|
||
Distributions received from unconsolidated affiliate
|
187
|
|
|
149
|
|
||
Gain on disposition of real estate portfolio
|
(314
|
)
|
|
(132
|
)
|
||
Gain on note receivable and property foreclosure
|
(28
|
)
|
|
—
|
|
||
Change in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
|
|
|
|
||||
Additions to held for sale real estate
|
(4,385
|
)
|
|
(92
|
)
|
||
Proceeds from disposition of held for sale real estate
|
—
|
|
|
1,058
|
|
||
Decrease in real estate leased to others using the direct financing method
|
402
|
|
|
413
|
|
||
Increase in work in process
|
(430
|
)
|
|
(322
|
)
|
||
Decrease in mortgages, notes and accrued interest receivable
|
50
|
|
|
209
|
|
||
Decrease in receivables
|
517
|
|
|
581
|
|
||
Decrease (increase) in commercial mortgage residual interests
|
283
|
|
|
(556
|
)
|
||
Decrease (increase) in accrued rental income
|
(537
|
)
|
|
53
|
|
||
Decrease in other assets
|
595
|
|
|
502
|
|
||
Increase in accrued interest payable
|
6,777
|
|
|
11,673
|
|
||
Decrease in other liabilities
|
(4,101
|
)
|
|
(3,132
|
)
|
||
Increase in current tax liability
|
118
|
|
|
569
|
|
||
Net cash provided by operating activities
|
50,600
|
|
|
48,866
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Proceeds from the disposition of real estate, Investment Portfolio
|
5,193
|
|
|
773
|
|
||
Additions to real estate:
|
|
|
|
||||
Accounted for using the operating method
|
(191,745
|
)
|
|
(57,512
|
)
|
||
Accounted for using the direct financing method
|
—
|
|
|
(1,747
|
)
|
||
Increase in mortgages and notes receivable
|
(3,935
|
)
|
|
(1,245
|
)
|
||
Principal payments on mortgages and notes receivable
|
563
|
|
|
1,462
|
|
||
Payment of lease costs
|
(615
|
)
|
|
(138
|
)
|
||
Other
|
(139
|
)
|
|
463
|
|
||
Net cash used in investing activities
|
(190,678
|
)
|
|
(57,944
|
)
|
|
Quarter Ended March 31,
|
||||||
|
2012
|
|
2011
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from line of credit payable
|
$
|
242,400
|
|
|
$
|
129,500
|
|
Repayment of line of credit payable
|
(281,800
|
)
|
|
(106,300
|
)
|
||
Repayment of mortgages payable
|
(288
|
)
|
|
(272
|
)
|
||
Proceeds from issuance of common stock
|
37,550
|
|
|
20,025
|
|
||
Proceeds from issuance of preferred stock
|
287,500
|
|
|
—
|
|
||
Redemption of preferred stock
|
(92,000
|
)
|
|
—
|
|
||
Payment of Series C preferred stock dividends
|
(1,979
|
)
|
|
(1,696
|
)
|
||
Payment of common stock dividends
|
(40,432
|
)
|
|
(31,678
|
)
|
||
Noncontrolling interest distributions
|
—
|
|
|
(33
|
)
|
||
Noncontrolling interest contributions
|
—
|
|
|
41
|
|
||
Stock issuance costs
|
(9,922
|
)
|
|
—
|
|
||
Net cash provided by financing activities
|
141,029
|
|
|
9,587
|
|
||
Net increase in cash and cash equivalents
|
951
|
|
|
509
|
|
||
Cash and cash equivalents at beginning of year
|
2,082
|
|
|
2,048
|
|
||
Cash and cash equivalents at end of year
|
$
|
3,033
|
|
|
$
|
2,557
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Interest paid, net of amount capitalized
|
$
|
12,420
|
|
|
$
|
5,040
|
|
Taxes paid (received)
|
$
|
15
|
|
|
$
|
(541
|
)
|
Supplemental disclosure of noncash investing and financing activities:
|
|
|
|
||||
Issued 396,577 and 139,351 shares of restricted and unrestricted
common stock in 2012 and 2011, respectively, pursuant to NNN’s
performance incentive plan
|
$
|
8,576
|
|
|
$
|
3,407
|
|
Issued 4,122 and 2,391 shares of common stock in 2012 and 2011,
respectively, to directors pursuant to NNN’s performance incentive plan
|
$
|
112
|
|
|
$
|
59
|
|
Issued 5,317 and 7,115 shares of common stock in 2012 and
2011, respectively, pursuant to NNN’s Deferred Director Fee Plan
|
$
|
74
|
|
|
$
|
122
|
|
Change in other comprehensive income
|
$
|
55
|
|
|
$
|
1,661
|
|
Change in lease classification (direct financing lease to operating lease)
|
$
|
757
|
|
|
$
|
—
|
|
Real estate acquired in connection with mortgage receivable foreclosure
|
$
|
490
|
|
|
$
|
—
|
|
|
March 31, 2012
|
|
Property Portfolio:
|
|
|
Total properties
|
1,486
|
|
Gross leasable area (square feet)
|
16,999,000
|
|
States
|
47
|
|
|
|
March 31, 2012
|
|
December 31, 2011
|
||||
Intangible Lease Assets (included in Other assets):
|
|
|
|
|
||||
Value of above market in-place leases, net
|
|
$
|
8,596
|
|
|
$
|
8,503
|
|
Value of in-place leases, net
|
|
45,659
|
|
|
43,880
|
|
||
Intangible Lease Liabilities (included in Other Liabilities):
|
|
|
|
|
||||
Value of below market in-place leases, net
|
|
29,344
|
|
|
29,267
|
|
|
2012
|
|
2011
|
||||
Basic and Diluted Earnings:
|
|
|
|
||||
Net earnings attributable to NNN
|
$
|
29,832
|
|
|
$
|
20,820
|
|
Less: Series C preferred stock dividends
|
(1,979
|
)
|
|
(1,696
|
)
|
||
Less: Excess of redemption value over carrying value of preferred shares redeemed
|
(3,098
|
)
|
|
—
|
|
||
Net earnings available to NNN’s common stockholders
|
24,755
|
|
|
19,124
|
|
||
Less: Earnings attributable to unvested restricted shares
|
(566
|
)
|
|
(134
|
)
|
||
Net earnings used in basic earnings per share
|
24,189
|
|
|
18,990
|
|
||
Reallocated undistributed income (loss)
|
—
|
|
|
—
|
|
||
Net earnings used in diluted earnings per share
|
$
|
24,189
|
|
|
$
|
18,990
|
|
|
|
|
|
||||
Basic and Diluted Weighted Average Shares Outstanding:
|
|
|
|
||||
Weighted average number of shares outstanding
|
105,635,630
|
|
|
83,955,295
|
|
||
Less: Unvested restricted stock
|
(568,163
|
)
|
|
(580,738
|
)
|
||
Less: Contingent shares
|
(226,600
|
)
|
|
(251,826
|
)
|
||
Weighted average number of shares outstanding used in basic earnings per share
|
104,840,867
|
|
|
83,122,731
|
|
||
Effects of dilutive securities:
|
|
|
|
||||
Contingent shares
|
25,471
|
|
|
—
|
|
||
Convertible debt
|
1,192,706
|
|
|
298,241
|
|
||
Common stock options
|
2,286
|
|
|
3,276
|
|
||
Directors’ deferred fee plan
|
150,036
|
|
|
146,190
|
|
||
Weighted average number of shares outstanding used in diluted earnings per share
|
106,211,366
|
|
|
83,570,438
|
|
•
|
Level 1 – Valuation is based upon quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 – Valuation is based upon inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
•
|
Level 3 – Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include option pricing models, discounted cash flow models and similar techniques.
|
Lease classification:
|
|
|
Operating
|
1,449
|
|
Direct financing
|
14
|
|
Building portion – direct financing / land portion – operating
|
5
|
|
Weighted average remaining lease term
|
12 Years
|
|
|
March 31, 2012
|
|
December 31, 2011
|
||||
Land and improvements
|
$
|
1,368,270
|
|
|
$
|
1,314,438
|
|
Buildings and improvements
|
2,238,497
|
|
|
2,117,157
|
|
||
Leasehold interests
|
1,290
|
|
|
1,290
|
|
||
|
3,608,057
|
|
|
3,432,885
|
|
||
Less accumulated depreciation and amortization
|
(285,560
|
)
|
|
(269,687
|
)
|
||
|
3,322,497
|
|
|
3,163,198
|
|
||
Work in progress
|
71,409
|
|
|
60,106
|
|
||
|
$
|
3,393,906
|
|
|
$
|
3,223,304
|
|
|
# of
Properties |
|
Total
Commitment (1) |
|
Amount
Funded |
|
Remaining
Commitment |
|||||||
Real Estate Portfolio
|
60
|
|
|
$
|
184,819
|
|
|
$
|
123,858
|
|
|
$
|
60,961
|
|
(1)
|
Includes land and construction costs.
|
|
|
Quarter Ended March 31,
|
||||||
|
|
2012
|
|
2011
|
||||
Series C preferred stock
(1)
:
|
|
|
|
|||||
|
Dividends
|
$
|
1,979
|
|
|
$
|
1,696
|
|
|
Per share
|
0.5378
|
|
|
0.4609
|
|
||
|
|
|
|
|
||||
Common stock:
|
|
|
|
|||||
|
Dividends
|
40,432
|
|
|
31,678
|
|
||
|
Per share
|
0.385
|
|
|
0.380
|
|
|
Quarter Ended March 31,
|
||||||
|
2012
|
|
2011
|
||||
Shares of common stock
|
1,428,069
|
|
|
818,156
|
|
||
Net proceeds
|
$
|
37,666
|
|
|
$
|
20,081
|
|
|
2012
|
|
2011
|
||||
Revenues:
|
|
|
|
||||
Rental income from operating leases
|
$
|
826
|
|
|
$
|
831
|
|
Earned income from direct financing leases
|
6
|
|
|
20
|
|
||
Interest and other income from real estate transactions
|
124
|
|
|
194
|
|
||
|
956
|
|
|
1,045
|
|
||
Operating expenses:
|
|
|
|
||||
General and administrative
|
4
|
|
|
4
|
|
||
Real estate
|
244
|
|
|
279
|
|
||
Depreciation and amortization
|
51
|
|
|
123
|
|
||
Impairment losses and other charges
|
35
|
|
|
—
|
|
||
|
334
|
|
|
406
|
|
||
Other expenses (revenues):
|
|
|
|
||||
Interest expense
|
357
|
|
|
340
|
|
||
|
357
|
|
|
340
|
|
||
Earnings before gain on disposition of real estate and income tax expense
|
265
|
|
|
299
|
|
||
Gain on disposition of real estate
|
314
|
|
|
132
|
|
||
Income tax expense
|
(37
|
)
|
|
(47
|
)
|
||
Earnings from discontinued operations attributable to NNN
|
542
|
|
|
384
|
|
||
Earnings attributable to noncontrolling interests
|
(12
|
)
|
|
(59
|
)
|
||
Earnings from discontinued operations attributable to NNN
|
$
|
530
|
|
|
$
|
325
|
|
Balance at beginning of period
|
$
|
15,299
|
|
Total gains (losses) – realized/unrealized:
|
|
||
Included in earnings
|
—
|
|
|
Included in other comprehensive income
|
—
|
|
|
Interest income on Residuals
|
755
|
|
|
Cash received from Residuals
|
(1,038
|
)
|
|
Purchases, sales, issuances and settlements, net
|
—
|
|
|
Transfers in and/or out of Level 3
|
—
|
|
|
Balance at end of period
|
$
|
15,016
|
|
Changes in gains (losses) included in earnings attributable to a change in unrealized gains (losses) relating to
assets still held at the end of period
|
$
|
—
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
Current financial and economic conditions may have an adverse impact on NNN, its tenants, and commercial real estate in general;
|
•
|
NNN may be unable to obtain debt or equity capital on favorable terms, if at all;
|
•
|
Loss of revenues from tenants would reduce NNN's cash flow;
|
•
|
A significant portion of the source of NNN's Property Portfolio annual base rent is heavily concentrated in specific industry classifications, tenants and in specific geographic locations;
|
•
|
Owning real estate and indirect interests in real estate carries inherent risk;
|
•
|
NNN's real estate investments are illiquid;
|
•
|
Costs of complying with changes in governmental laws and regulations may adversely affect NNN's results of operations;
|
•
|
NNN may be subject to known or unknown environmental liabilities and hazardous materials on properties owned by NNN;
|
•
|
NNN may not be able to successfully execute its acquisition or development strategies;
|
•
|
NNN may not be able to dispose of properties consistent with its operating strategy;
|
•
|
A change in the assumptions used to determine the value of commercial mortgage residual interests could adversely affect NNN's financial position;
|
•
|
NNN may suffer a loss in the event of a default or bankruptcy of a borrower or a tenant;
|
•
|
Certain provisions of NNN's leases or loan agreements may be unenforceable;
|
•
|
Property ownership through joint ventures and partnerships could limit NNN's control of those investments;
|
•
|
Competition with numerous other REITs, commercial developers, real estate limited partnerships and other investors may impede NNN's ability to grow;
|
•
|
NNN's loss of key management could adversely affect performance and the value of its common stock;
|
•
|
Operating losses from retail operations on certain investment properties may adversely impact NNN's results of operations;
|
•
|
Uninsured losses may adversely affect NNN's ability to pay outstanding indebtedness;
|
•
|
Acts of violence, terrorist attacks or war may affect the markets in which NNN operates and NNN's results of operations;
|
•
|
Vacant properties or bankrupt tenants could adversely affect NNN's business or financial condition;
|
•
|
The amount of debt NNN has and the restrictions imposed by that debt could adversely affect NNN's business and financial condition;
|
•
|
NNN is obligated to comply with financial and other covenants in its debt instruments that could restrict its operating activities, and the failure to comply with such covenants could result in defaults that accelerate the payment of such debt;
|
•
|
The market value of NNN's equity and debt securities is subject to various factors that may cause significant fluctuations or volatility;
|
•
|
NNN's failure to qualify as a real estate investment trust for federal income tax purposes could result in significant tax liability;
|
•
|
Even if NNN remains qualified as a REIT, NNN may face other tax liabilities that reduce operating results and cash flow;
|
•
|
Adverse legislative or regulatory tax changes could reduce NNN's earnings, cash flow and market price of NNN's common stock;
|
•
|
Compliance with REIT requirements, including distribution requirements, may limit NNN's flexibility and negatively
|
•
|
Changes in accounting pronouncements could adversely impact NNN's or NNN's tenants' reported financial performance;
|
•
|
NNN's failure to maintain effective internal control over financial reporting could have a material adverse effect on its business, operating results and share price;
|
•
|
NNN's ability to pay dividends in the future is subject to many factors; and
|
•
|
Cybersecurity risks and cyber incidents could adversely affect NNN's business and disrupt operations.
|
|
March 31, 2012
|
|
December 31, 2011
|
|
March 31, 2011
|
|||
Properties Owned:
|
|
|
|
|
|
|||
Number
|
1,486
|
|
|
1,422
|
|
|
1,223
|
|
Total gross leasable area (square feet)
|
16,999,000
|
|
|
16,428,000
|
|
|
13,320,000
|
|
Properties:
|
|
|
|
|
|
|||
Leased and operated
|
1,460
|
|
|
1,375
|
|
|
1,185
|
|
Percent of Properties – leased and operated
|
98
|
%
|
|
97
|
%
|
|
97
|
%
|
Weighted average remaining lease term (years)
|
12
|
|
|
12
|
|
|
12
|
|
Total gross leasable area (square feet) – leased and operated
|
16,327,000
|
|
|
15,681,000
|
|
|
12,558,000
|
|
|
|
|
|
% of Annual Base Rent
(1)
|
|||||||
|
|
Lines of Trade
|
|
March 31, 2012
|
|
December 31, 2011
|
|
March 31, 2011
|
|||
1.
|
|
Convenience stores
|
|
23.5
|
%
|
|
24.6
|
%
|
|
23.3
|
%
|
2.
|
|
Restaurants - full service
|
|
11.7
|
%
|
|
9.4
|
%
|
|
10.7
|
%
|
3.
|
|
Automotive parts
|
|
6.2
|
%
|
|
6.5
|
%
|
|
7.8
|
%
|
4.
|
|
Automotive service
|
|
5.3
|
%
|
|
4.9
|
%
|
|
5.4
|
%
|
5.
|
|
Theaters
|
|
4.7
|
%
|
|
5.0
|
%
|
|
5.6
|
%
|
6.
|
|
Sporting goods
|
|
4.6
|
%
|
|
4.8
|
%
|
|
4.4
|
%
|
7.
|
|
Wholesale clubs
|
|
3.8
|
%
|
|
4.0
|
%
|
|
0.4
|
%
|
8.
|
|
Restaurants - limited service
|
|
3.6
|
%
|
|
3.6
|
%
|
|
4.1
|
%
|
9.
|
|
Drug Stores
|
|
3.3
|
%
|
|
3.2
|
%
|
|
3.9
|
%
|
10.
|
|
Consumer electronics
|
|
3.3
|
%
|
|
3.5
|
%
|
|
2.4
|
%
|
|
|
Other
|
|
30.0
|
%
|
|
30.5
|
%
|
|
32.0
|
%
|
|
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
(1)
|
Based on annualized base rent for all leases in place for each respective period
.
|
|
2012
|
|
2011
|
||||
Acquisitions:
|
|
|
|
||||
Number of Properties
|
67
|
|
|
29
|
|
||
Gross leasable area (square feet)
|
594,000
|
|
|
354,000
|
|
||
Total dollars invested
(1)
|
$
|
197,978
|
|
|
$
|
55,145
|
|
(1)
|
Includes dollars invested in projects under construction or tenant improvements for each respective year.
|
|
2012
|
|
2011
|
||||
Number of properties
|
3
|
|
|
2
|
|
||
Gross leasable area (square feet)
|
20,000
|
|
|
11,000
|
|
||
Net sales proceeds
|
$
|
5,152
|
|
|
$
|
1,831
|
|
Net gain
|
$
|
314
|
|
|
$
|
86
|
|
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
Percent Increase (Decrease) |
|||||||
|
|
|
|
|
|
Percent of Total
|
|
|
|||||||||
Rental Income
(1)
|
|
$
|
74,364
|
|
|
$
|
57,862
|
|
|
94.5
|
%
|
|
94.0
|
%
|
|
28.5
|
%
|
Real estate expense reimbursement from tenants
|
|
2,832
|
|
|
2,280
|
|
|
3.6
|
%
|
|
3.7
|
%
|
|
24.2
|
%
|
||
Interest and other income from real estate transactions
|
|
707
|
|
|
620
|
|
|
0.9
|
%
|
|
1.0
|
%
|
|
14.0
|
%
|
||
Interest income on commercial mortgage residual interests
|
|
755
|
|
|
767
|
|
|
1.0
|
%
|
|
1.3
|
%
|
|
(1.6
|
)%
|
||
Total revenues from continuing operations
|
|
$
|
78,658
|
|
|
$
|
61,529
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
27.8
|
%
|
(1)
|
Includes rental income from operating leases, earned income from direct financing leases and percentage rent from continuing operations (“Rental Income”).
|
|
|
|
|
Percent Increase (Decrease) |
|
Percentage of Total
|
|
Percentage of
Revenues from
Continuing Operations
|
|||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||||
General and administrative
|
$
|
7,603
|
|
|
$
|
6,657
|
|
14.2
|
%
|
|
25.1
|
%
|
|
27.9
|
%
|
|
9.7
|
%
|
|
10.8
|
%
|
Real estate
|
4,612
|
|
|
3,652
|
|
26.3
|
%
|
|
15.2
|
%
|
|
15.3
|
%
|
|
5.9
|
%
|
|
5.9
|
%
|
||
Depreciation and amortization
|
18,117
|
|
|
13,428
|
|
34.9
|
%
|
|
59.7
|
%
|
|
56.3
|
%
|
|
23.0
|
%
|
|
21.8
|
%
|
||
Impairment – commercial mortgage residual interests valuation
|
—
|
|
|
129
|
|
(100.0
|
)%
|
|
—
|
|
|
0.5
|
%
|
|
—
|
|
|
0.2
|
%
|
||
Total operating expenses
|
$
|
30,332
|
|
|
$
|
23,866
|
|
27.1
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
38.6
|
%
|
|
38.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest and other income
|
$
|
(386
|
)
|
|
$
|
(342
|
)
|
12.9
|
%
|
|
(2.0
|
)%
|
|
(2.0
|
)%
|
|
(0.5
|
)%
|
|
(0.6
|
)%
|
Interest expense
|
19,645
|
|
|
17,662
|
|
11.2
|
%
|
|
102.0
|
%
|
|
102.0
|
%
|
|
25.0
|
%
|
|
28.7
|
%
|
||
Total other expenses (revenues)
|
$
|
19,259
|
|
|
$
|
17,320
|
|
11.2
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
24.5
|
%
|
|
28.1
|
%
|
(i)
|
the issuance of $300,000,000 in July 2011 of notes payable with a maturity of July 2021, and stated interest rate of 5.500%, and
|
(ii)
|
the decrease of $128,068,000 in the weighted average debt outstanding on the credit facility for the quarter ended March 31, 2012, as compared to the same period in 2011.
|
|
2012
|
|
2011
|
||||||||||||||||||
# of Sold
Properties
|
|
Gain
|
|
Earnings
|
|
# of Sold
Properties
|
|
Gain
|
|
Earnings
|
|||||||||||
Properties
|
3
|
|
|
$
|
314
|
|
|
$
|
542
|
|
|
2
|
|
|
$
|
86
|
|
|
$
|
384
|
|
Noncontrolling interests
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
—
|
|
|
—
|
|
|
(59
|
)
|
||||
|
3
|
|
|
$
|
314
|
|
|
$
|
530
|
|
|
2
|
|
|
$
|
86
|
|
|
$
|
325
|
|
|
2012
|
|
2011
|
||||
Cash and cash equivalents:
|
|
|
|
||||
Provided by operating activities
|
$
|
50,600
|
|
|
$
|
48,866
|
|
Used in investing activities
|
(190,678
|
)
|
|
(57,944
|
)
|
||
Provided by financing activities
|
141,029
|
|
|
9,587
|
|
||
Increase
|
951
|
|
|
509
|
|
||
Net cash at beginning of period
|
2,082
|
|
|
2,048
|
|
||
Net cash at end of period
|
$
|
3,033
|
|
|
$
|
2,557
|
|
•
|
$39,400,000 in net payments on NNN's credit facility,
|
•
|
$277,645,000 in net proceeds from the issuance of 11,500,000 depositary shares representing interests in NNN's 6.625% Series D Cumulative Redeemable Preferred Stock (the "Series D Preferred Stock") in February,
|
•
|
$92,000,000 paid to fully redeem NNN's 7.375% Series C Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock"),
|
•
|
$40,432,000
in dividends paid to common stockholders,
|
•
|
$1,979,000
in dividends paid to holders of the depositary shares of NNN’s Series C Preferred Stock, and
|
•
|
$37,666,000 in net proceeds from the issuance of 1,428,069 shares of common stock in connection with the Dividend Reinvestment and Stock Purchase Plan (“DRIP”).
|
|
# of
Properties |
|
Total
Commitment (1) |
|
Amount
Funded |
|
Remaining
Commitment |
||||
Real Estate Portfolio
|
60
|
|
|
184,819
|
|
|
123,858
|
|
|
60,961
|
|
(1)
|
Includes land and construction costs.
|
|
March 31, 2012
|
|
Percentage of
Total
|
|
December 31, 2011
|
|
Percentage of
Total
|
||||||
Line of credit payable
|
$
|
26,200
|
|
|
2.0
|
%
|
|
$
|
65,600
|
|
|
4.9
|
%
|
Mortgages payable
|
22,883
|
|
|
1.8
|
%
|
|
23,171
|
|
|
1.8
|
%
|
||
Notes payable – convertible
|
356,416
|
|
|
27.4
|
%
|
|
355,371
|
|
|
26.5
|
%
|
||
Notes payable
|
895,103
|
|
|
68.8
|
%
|
|
894,967
|
|
|
66.8
|
%
|
||
Total outstanding debt
|
$
|
1,300,602
|
|
|
100.0
|
%
|
|
$
|
1,339,109
|
|
|
100.0
|
%
|
Terms
|
|
2026
Notes
(1)(2)(4)
|
|
2028
Notes
(2)(5)(6)
|
|
||||
Issue Date
|
|
September 2006
|
|
|
March 2008
|
|
|
||
Net Proceeds
|
|
$
|
168,650
|
|
|
$
|
228,576
|
|
|
Stated Interest Rate
(8)
|
|
3.950
|
%
|
|
5.125
|
%
|
|
||
Debt Issuance Costs
|
|
$
|
3,850
|
|
(3)
|
$
|
5,459
|
|
(7)
|
Earliest Conversion Date
(9)
|
|
September 2025
|
|
|
June 2027
|
|
|
||
Earliest Put Option Date
|
|
September 2016
|
|
|
June 2013
|
|
|
||
Maturity Date
|
|
September 2026
|
|
|
June 2028
|
|
|
||
Original Principal
|
|
$
|
172,500
|
|
|
$
|
234,035
|
|
|
Repurchases
|
|
(33,800
|
)
|
|
(11,000
|
)
|
|
||
Outstanding principal balance at March 31, 2011
|
|
$
|
138,700
|
|
|
$
|
223,035
|
|
|
(1)
|
NNN repurchased $8,800 and $25,000 in 2009 and 2008, respectively, for a purchase price of $6,994 and $19,188, respectively, resulting in a gain of $1,565 and $4,961, respectively.
|
(2)
|
Debt issuance costs include underwriting discounts and commissions, legal and accounting fees, rating agency fees and printing expenses. These costs have been deferred and are being amortized over the period to the earliest put option date of the holders using the effective interest method.
|
(3)
|
The debt issuance costs associated with the 2026 Notes are fully amortized.
|
(4)
|
The conversion rate per $1 principal amount was 42.3759 shares of NNN's common stock, which is equivalent to a conversion price of $23.5983 per share of common stock.
|
(5)
|
The conversion rate per $1 principal amount was 39.4233 shares of NNN’s common stock, which is equivalent to a conversion price of $25.3657 per share of common stock.
|
(6)
|
NNN repurchased $11,000 in 2009 for a purchase price of $8,588 resulting in a gain of $1,867.
|
(7)
|
Includes $219 of note costs which were written off in connection with the repurchase of $11,000 of the 2028 Notes, respectively.
|
(8)
|
With the adoption of the accounting guidance on convertible debt securities in 2009, the effective interest rates for the 2026 Notes and the 2028 Notes are 5.840% and 7.192%, respectively.
|
(9)
|
Prior to the earliest respective conversion date, the notes are only convertible in limited circumstances pursuant to the terms of the notes.
|
Notes
|
|
Issue Date
|
|
Principal
|
|
Discount
(3)
|
|
Net
Price
|
|
Stated
Rate
|
|
Effective
Rate
(4)
|
|
Maturity
Date
|
|||||||
2012
(1) (8)
|
|
June 2002
|
|
$
|
50,000
|
|
|
287
|
|
|
$
|
49,713
|
|
|
7.750
|
%
|
|
7.833
|
%
|
|
June 2012
|
2014
(1)(2)(5)
|
|
June 2004
|
|
150,000
|
|
|
440
|
|
|
149,560
|
|
|
6.250
|
%
|
|
5.910
|
%
|
|
June 2014
|
||
2015
(1)
|
|
November 2005
|
|
150,000
|
|
|
390
|
|
|
149,610
|
|
|
6.150
|
%
|
|
6.185
|
%
|
|
December 2015
|
||
2017
(1)(6)
|
|
September 2007
|
|
250,000
|
|
|
877
|
|
|
249,123
|
|
|
6.875
|
%
|
|
6.924
|
%
|
|
October 2017
|
||
2021
(1)(7)
|
|
July 2011
|
|
300,000
|
|
|
4,269
|
|
|
295,731
|
|
|
5.500
|
%
|
|
5.690
|
%
|
|
July 2021
|
(1)
|
The proceeds from the note issuance were used to pay down outstanding indebtedness of NNN’s Credit Facility.
|
(2)
|
The proceeds from the note issuance were used to repay the obligation of notes maturing in 2004.
|
(3)
|
The note discounts are amortized to interest expense over the respective term of each debt obligation using the effective interest method.
|
(4)
|
Includes the effects of the discount, treasury lock gain / loss and swap gain / loss (as applicable).
|
(5)
|
NNN entered into a forward starting interest rate swap agreement which fixed a swap rate of 4.61% on a notional amount of $94,000. Upon issuance of the 2014 Notes, NNN terminated the forward starting interest rate swap agreement resulting in a gain of
|
(6)
|
NNN entered into an interest rate hedge with a notional amount of $100,000. Upon issuance of the 2017 Notes, NNN terminated the interest rate hedge agreement resulting in a liability of $3,260, of which $3,228 was recorded to other comprehensive income. The liability has been deferred and is being amortized as an adjustment to interest expense over the term of the 2017 Notes using the effective interest method.
|
(7)
|
NNN entered into two interest rate hedges with a total notional amount of $150,000. Upon issuance of the 2021 Notes, NNN terminated the interest rate hedge agreements resulting in a liability of $5,300, of which $5,218 was deferred in other comprehensive income. The deferred liability is being amortized over the term of the 2021Notes using the effective interest method.
|
(8)
|
NNN plans to use proceeds from the Credit Facility to repay outstanding indebtedness.
|
|
2012
|
|
2011
|
||||
Shares of common stock
|
1,428,069
|
|
|
818,156
|
|
||
Net proceeds
|
$
|
37,666,000
|
|
|
$
|
20,081,000
|
|
Debt Obligations (dollars in thousands)
|
||||||||||||||||||||
|
Variable Rate Debt
|
|
Fixed Rate Debt
|
|||||||||||||||||
|
Credit Facility
|
|
Mortgages
|
|
Unsecured Debt
(1)
|
|||||||||||||||
|
Debt
Obligation
|
|
Weighted
Average
Interest Rate
|
|
Debt
Obligation
|
|
Weighted
Average
Interest Rate
|
|
Debt
Obligation
|
|
Effective
Interest
Rate
|
|||||||||
2012
|
$
|
—
|
|
|
|
|
|
$
|
19,002
|
|
|
6.94
|
%
|
|
$
|
49,993
|
|
|
7.83
|
%
|
2013
|
—
|
|
|
|
|
|
863
|
|
|
7.35
|
%
|
|
217,716
|
|
|
7.19
|
%
|
|||
2014
|
—
|
|
|
|
|
|
881
|
|
|
7.85
|
%
|
|
149,880
|
|
|
5.91
|
%
|
|||
2015
|
26,200
|
|
|
1.79
|
%
|
|
917
|
|
|
7.22
|
%
|
|
149,827
|
|
|
6.19
|
%
|
|||
2016
|
—
|
|
|
|
|
|
952
|
|
|
7.19
|
%
|
|
138,700
|
|
|
5.84
|
%
|
|||
Thereafter
|
—
|
|
|
|
|
|
268
|
|
|
8.47
|
%
|
|
545,403
|
|
|
6.25
|
%
|
|||
Total
|
$
|
26,200
|
|
|
|
|
|
$
|
22,883
|
|
|
7.01
|
%
|
|
$
|
1,251,519
|
|
|
6.39
|
%
|
Fair Value:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
March 31, 2012
|
$
|
26,200
|
|
|
|
|
$
|
22,883
|
|
|
|
|
$
|
1,376,658
|
|
|
|
|||
December 31, 2011
|
$
|
65,600
|
|
|
|
|
$
|
23,171
|
|
|
|
|
$
|
1,362,922
|
|
|
|
(1)
|
Includes NNN’s notes payable and convertible notes payable, each net of unamortized discounts. NNN uses Bloomberg to determine the fair value.
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings.
Not applicable.
|
Item 1A.
|
Risk Factors.
There were no material changes in NNN's risk factors disclosed in Item 1A. Risk Factors of NNN's Annual Report on Form 10-K for the year ended
December 31, 2011
.
|
Item 3.
|
Defaults Upon Senior Securities.
Not applicable.
|
Item 4.
|
Mine Safety Disclosures.
Not applicable.
|
Item 5.
|
Other Information.
Not applicable.
|
Item 6.
|
Exhibits
|
|
3.
|
Articles of Incorporation and Bylaws
|
|||
|
|
|
3.1
|
First Amended and Restated Articles of Incorporation of the Registrant, as amended (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on May 1, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
3.2
|
Articles Supplementary Establishing and Fixing the Rights and Preferences of 7.375% Series C Cumulative Preferred Stock, par value $0.01 per share, dated October 11, 2006 (filed as Exhibit 3.2 to the Registrant’s Registration Statement on Form 8-A dated October 11, 2006 and filed with the Securities and Exchange Commission on October 12, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
3.3
|
Third Amended and Restated Bylaws of the Registrant, as amended (filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on May 1, 2006, and incorporated herein by reference; second amendment filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 14, 2007, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
4.
|
Instruments Defining the Rights of Security Holders, Including Indentures
|
|||
|
|
|
|
|
|
|
|
|
4.1
|
Specimen Certificate of Common Stock, par value $0.01 per share, of the Registrant (filed as Exhibit 3.4 to the Registrant’s Registration Statement No. 1-11290 on Form 8-B filed with the Securities and Exchange Commission and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.2
|
Indenture, dated as of March 25, 1998, between the Registrant and First Union National Bank, as trustee (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-132095) filed with the Securities and Exchange Commission on February 28, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.3
|
Form of Supplemental Indenture No. 4 dated as of May 30, 2002, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $50,000,000 of 7.75% Notes due 2012 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.4
|
Form of 7.75% Notes due 2012 (filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.5
|
Form of Supplemental Indenture No. 5 dated as of June 18, 2004, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.25% Notes due 2014 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.6
|
Form of 6.25% Notes due 2014 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
4.7
|
Form of Supplemental Indenture No. 6 dated as of November 17, 2005, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.15% Notes due 2015 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.8
|
Form of 6.15% Notes due 2015 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.9
|
Seventh Supplemental Indenture, dated as of September 13, 2006, between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.10
|
Form of 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.11
|
Specimen certificate representing the 7.375% Series C Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series C Preferred Stock"), of the Registrant (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A dated October 11, 2006 and filed with the Securities and Exchange Commission on October 12, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.12
|
Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series C Preferred Stock (filed as Exhibit 4.18 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2006, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.13
|
Form of Supplemental Indenture No. 8 between National Retail Properties, Inc. and U.S. Bank National Association relating to 6.875% Notes due 2017 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.14
|
Form of 6.875% Notes due 2017 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.15
|
Form of Ninth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.1 to Registrants’ Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.16
|
Form of 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.17
|
Form of Tenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.500% Notes due 2021 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.18
|
Form of 5.500% Notes due 2021 (filed as Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.19
|
Specimen certificate representing the 6.625% Series D Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series D Preferred Stock"), of the Registrant (filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A dated February 22, 2012 and filed with the Securities and Exchange Commission on February 22, 2012, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
4.20
|
Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series D Preferred Stock (filed herewith).
|
|
|
|
|
|
|
|
|
10.
|
Material Contracts
|
|||
|
|
|
|
|
|
|
|
|
10.1
|
2007 Performance Incentive Plan (filed as Annex A to the Registrant’s 2007 Annual Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2007, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
10.2
|
Form of Restricted Stock Agreement between NNN and the Participant of NNN (filed as Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.3
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Craig Macnab (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.4
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.5
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.6
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Paul E. Bayer (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.7
|
Employment Agreement dated as of December 1, 2008, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.8
|
Form of Indemnification Agreement (as entered into between the Registrant and each of its directors and executive officers) (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 12, 2009, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.9
|
Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Craig Macnab (filed as Exhibit 10.10 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.10
|
Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.11 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.11
|
Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.12
|
Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Paul E. Bayer (filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.13
|
Amendment to Employment Agreement dated as of November 8, 2010, between the Registrant and Christopher P. Tessitore (filed as Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 24, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.14
|
Amended and Restated Credit Agreement, dated as of May 25, 2011, by and among the Registrant, certain lenders and Wells Fargo Bank, National Association, as the Administrative Agent (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on June 6, 2011, and incorporated herein by reference).
|
|
|
|
|
|
|
|
|
|
|
10.15
|
Form of Restricted Award Agreement - Performance between NNN and the Participant of NNN (filed herewith).
|
|
|
|
|
|
|
|
|
|
|
10.16
|
Form of Restricted Award Agreement - Service between NNN and the Participant of NNN (filed herewith).
|
|
|
|
|
|
|
|
|
|
|
10.17
|
Form of Restricted Award Agreement - Special Grant between NNN and the Participant of NNN (filed herewith).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NATIONAL RETAIL PROPERTIES, INC.
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By:
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/s/ Craig Macnab
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Craig Macnab
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Chairman of the Board and Chief Executive Officer
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By:
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/s/ Kevin B. Habicht
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Kevin B. Habicht
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Chief Financial Officer,
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Executive Vice President and Director
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3.
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Articles of Incorporation and Bylaws
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3.1
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First Amended and Restated Articles of Incorporation of the Registrant, as amended (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on May 1, 2006, and incorporated herein by reference).
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3.2
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Articles Supplementary Establishing and Fixing the Rights and Preferences of 7.375% Series C Cumulative Preferred Stock, par value $0.01 per share, dated October 11, 2006 (filed as Exhibit 3.2 to the Registrant’s Registration Statement on Form 8-A dated October 11, 2006 and filed with the Securities and Exchange Commission on October 12, 2006, and incorporated herein by reference).
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3.3
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Third Amended and Restated Bylaws of the Registrant, as amended (filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on May 1, 2006, and incorporated herein by reference; second amendment filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 14, 2007, and incorporated herein by reference).
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4.
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Instruments Defining the Rights of Security Holders, Including Indentures
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4.1
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Specimen Certificate of Common Stock, par value $0.01 per share, of the Registrant (filed as Exhibit 3.4 to the Registrant’s Registration Statement No. 1-11290 on Form 8-B filed with the Securities and Exchange Commission and incorporated herein by reference).
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4.2
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Indenture, dated as of March 25, 1998, between the Registrant and First Union National Bank, as trustee (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form S-3 (Registration No. 333-132095) filed with the Securities and Exchange Commission on February 28, 2006, and incorporated herein by reference).
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4.3
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Form of Supplemental Indenture No. 4 dated as of May 30, 2002, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $50,000,000 of 7.75% Notes due 2012 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
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4.4
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Form of 7.75% Notes due 2012 (filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on June 4, 2002, and incorporated herein by reference).
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4.5
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Form of Supplemental Indenture No. 5 dated as of June 18, 2004, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.25% Notes due 2014 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
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4.6
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Form of 6.25% Notes due 2014 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated June 15, 2004 and filed with the Securities and Exchange Commission on June 18, 2004, and incorporated herein by reference).
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4.7
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Form of Supplemental Indenture No. 6 dated as of November 17, 2005, by and among Registrant and Wachovia Bank, National Association, Trustee, relating to $150,000,000 of 6.15% Notes due 2015 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
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4.8
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Form of 6.15% Notes due 2015 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated November 14, 2005 and filed with the Securities and Exchange Commission on November 17, 2005, and incorporated herein by reference).
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4.9
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Seventh Supplemental Indenture, dated as of September 13, 2006, between National Retail Properties, Inc. and U.S. Bank National Association relating to 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
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4.10
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Form of 3.95% Convertible Senior Notes due 2026 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated September 7, 2006 and filed with the Securities and Exchange Commission on September 13, 2006, and incorporated herein by reference).
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4.11
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Specimen certificate representing the 7.375% Series C Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series C Preferred Stock"), of the Registrant (filed as Exhibit 4.4 to the Registrant’s Registration Statement on Form 8-A dated October 11, 2006 and filed with the Securities and Exchange Commission on October 12, 2006, and incorporated herein by reference).
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4.12
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Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series C Preferred Stock (filed as Exhibit 4.18 to the Registrant’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 6, 2006, and incorporated herein by reference).
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4.13
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Form of Supplemental Indenture No. 8 between National Retail Properties, Inc. and U.S. Bank National Association relating to 6.875% Notes due 2017 (filed as Exhibit 4.1 to Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
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4.14
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Form of 6.875% Notes due 2017 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated and filed with the Securities and Exchange Commission on September 4, 2007, and incorporated herein by reference).
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4.15
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Form of Ninth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.1 to Registrants’ Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
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4.16
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Form of 5.125% Convertible Senior Notes due 2028 (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008, and incorporated herein by reference).
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4.17
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Form of Tenth Supplemental Indenture between National Retail Properties, Inc. and U.S. Bank National Association relating to 5.500% Notes due 2021 (filed as Exhibit 4.1 to Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
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4.18
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Form of 5.500% Notes due 2021 (filed as Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the Securities and Exchange Commission on July 6, 2011, and incorporated herein by reference).
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4.19
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Specimen certificate representing the 6.625% Series D Cumulative Redeemable Preferred Stock, par value $.01 per share (the "Series D Preferred Stock"), of the Registrant (filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form 8-A dated February 22, 2012 and filed with the Securities and Exchange Commission on February 22, 2012, and incorporated herein by reference).
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4.20
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Deposit Agreement, among the Registrant, American Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts relating to the Series D Preferred Stock (filed herewith).
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10.
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Material Contracts
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10.1
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2007 Performance Incentive Plan (filed as Annex A to the Registrant’s 2007 Annual Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on April 3, 2007, and incorporated herein by reference).
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10.2
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Form of Restricted Stock Agreement between NNN and the Participant of NNN (filed as Exhibit 10.2 to the Registrant’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2005, and incorporated herein by reference).
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10.3
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Employment Agreement dated as of December 1, 2008, between the Registrant and Craig Macnab (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
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10.4
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Employment Agreement dated as of December 1, 2008, between the Registrant and Julian E. Whitehurst (filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
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10.5
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Employment Agreement dated as of December 1, 2008, between the Registrant and Kevin B. Habicht (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
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10.6
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Employment Agreement dated as of December 1, 2008, between the Registrant and Paul E. Bayer (filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 3, 2008, and incorporated herein by reference).
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101
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Interactive Data File
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101.1
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The following materials from National Retail Properties, Inc. Quarterly Report on Form 10-Q for the period ended March 31, 2012, formatted in Extensible Business Reporting Language: (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of earnings, (iii) condensed consolidated statements of cash flows, and (iv) notes to condensed consolidated financial statements. As provided in Rule 406T of Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934 (filed herewith).
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(a)
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Cause
shall have the meaning ascribed to that term in the Employment Agreement.
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(b)
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Change of Control
shall have the meaning ascribed to that term in Section 2.E. of the Plan and such definition shall not be changed by the subsequent replacement of or superseding of said Plan after the date of this Agreement.
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(c)
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Code
shall mean the Internal Revenue Code of 1986, as amended, and any successor statute.
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(d)
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Disability
shall have the meaning ascribed to that term in the Employment Agreement.
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(e)
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Dividend Equivalent Payment
shall mean a payment under Section 4 of this Agreement in an amount equal to the accumulated value of cash dividends and other cash distributions that would have been paid to the Participant on the shares of Unvested Restricted Stock if they were vested from the Date of Grant until they become vested.
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(f)
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Employment Agreement
shall mean that certain Employment Agreement dated _____________ between the Participant and the Company which is in effect on the date of this Agreement.
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(g)
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Good Reason
shall have the meaning ascribed to that term in the Employment Agreement.
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(h)
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Restricted Stock
shall mean the Stock Award that is the subject of this Agreement.
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(i)
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Term
shall have the meaning ascribed to that term in the Employment Agreement.
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(j)
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Unvested Restricted Stock
shall mean shares of Restricted Stock that are subject to forfeiture under the terms of this Agreement.
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(k)
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Vested Restricted Stock
shall mean shares of Restricted Stock that are not subject to forfeiture under the terms of this Agreement.
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3.
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Vesting
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(a)
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Except as otherwise provided in this Section 3, shares of Unvested Restricted Stock shall vest and become Vested Restricted Stock on __________, only if and to the extent (i) the Participant remains in Continuous Service through ___________,
and
(ii) the Company attains the performance goals during the performance period ending _____________, as set forth on Appendix A hereto (the “
Performance Goals
”) and as certified by a written determination of the Compensation Committee of the Board of Directors of the Company. The Compensation Committee shall make its certification before ___________. No vesting shall occur for performance below Threshold and the full number of share shall vest for performance that is equal to or greater than Maximum, as set forth on Appendix A. The shares of Unvested Restricted Stock which do not vest shall immediately and without notice be forfeited and the Participant shall have no rights with respect to such Unvested Restricted Stock.
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(b)
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In the event that the Participant’s employment is terminated as a result of death or Disability, at any time between the Grant Date and ____________, the Participant shall vest in the Restricted Stock at Target (as set forth in Appendix A), regardless of whether the Performance Goals are attained, with such vesting occurring as of the day before the termination of employment. The shares of Unvested Restricted Stock which do not vest shall immediately and without notice be forfeited and the Participant shall have no rights with respect to such Unvested Restricted Stock.
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(c)
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In the event the Participant’s employment terminates prior to ______________, by reason of the non-renewal of the Term of the Employment Agreement by the Company, whether at the end of the current Term or any extended Term of the Employment Agreement, to the extent the Performance Goals are attained as set forth on Appendix A, the Participant shall be entitled to vest in the Restricted Stock in a pro-rated amount based on the date of the Participant’s termination of employment, subject to the Compensation Committee certification provided for in Section 3(a) of this Agreement. The shares of Unvested Restricted Stock which do not vest shall immediately and without notice be forfeited and the Participant shall have no rights with respect to such Unvested Restricted Stock.
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(d)
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In the event the Participant’s employment terminates prior to _______________, by reason of the Company’s termination of the Participant without Cause or the Participant’s termination of employment for Good Reason, to the extent the Performance Goals are attained as set forth on Appendix A, the Participant shall be entitled to vest in the Restricted Stock in accordance with Section 3(a) above without any reduction or limitation as a result of said prior termination, subject to the Compensation Committee certification provided for in Section 3(a) of this Agreement. The shares of Unvested Restricted Stock which do not vest shall immediately and without notice be forfeited and the Participant shall have no rights with respect to such Unvested Restricted Stock.
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(e)
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In the event there is a Change of Control, as defined in the Plan, then the Participant shall vest in the Restricted Stock at Target as of the effective date of any such Change of Control; provided that (i) if the Participant has previously been terminated from employment as described under Section 3(c) and the Change of Control occurs prior to the vesting of unvested Restricted Stock provided for under Section 3(c), the Participant shall vest in the Restricted Stock in a pro-rated amount at Target based on the date of the Participant’s termination of employment, and any other rights in respect of the vesting of Unvested Restricted Stock under Section 3(c) shall be cancelled and of no further force and effect, and (ii) if the Participant has previously been terminated from employment as described under Section 3(d) and the Change of Control occurs prior to the vesting of Unvested Restricted Stock provided for under Section 3(d), then the Participant shall vest in the Restricted Stock at Target as of the effective date of any such Change of Control, and any other rights in respect of the vesting of Unvested Restricted Stock under Section 3(d) shall be cancelled and of no further force and effect. The shares of Unvested Restricted Stock which do not vest shall immediately and without notice be forfeited and the Participant shall have no rights with respect to such Unvested Restricted Stock.
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(f)
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In the event the Participant’s employment is terminated for Cause or if the Participant terminates his/her employment without Good Reason, all Unvested Restricted Stock shall immediately and without notice be forfeited and the Participant shall have no rights with respect to such Unvested Restricted Stock.
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(g)
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Except as is provided in Section 9 of the Plan, any adjustment to an award of Restricted Stock pursuant to Section 9 of the Plan shall not change the ratio of Unvested Restricted Stock to Vested Restricted Stock.
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(h)
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If the Participant is entitled to vest in a pro-rata portion of the Restricted Stock, the number of shares of Unvested Restricted Stock which vest shall be determined by multiplying the number of shares eligible to vest based on attainment of Performance Goals by a fraction, the numerator of which is the number of days elapsed between the ___________, and the date of the termination of employment, and the denominator of which is ________. For example, if the vesting based on attainment of Performance Goals is determined to be at Target and the Participant completed 100 days of Continuous Service from ___________, the pro-rata vested amount would be equal to the number of shares vested at Target (as provided on Appendix A) times (100 divided by _______).
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(a)
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Cause
shall have the meaning ascribed to that term in the Employment Agreement.
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(b)
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Change of Control
shall have the meaning ascribed to that term in Section 2.E. of the Plan and such definition shall not be changed by the subsequent replacement of or superseding of said Plan after the date of this Agreement.
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(c)
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Code
shall mean the Internal Revenue Code of 1986, as amended, and any successor statute.
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(d)
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Disability
shall have the meaning ascribed to that term in the Employment Agreement.
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(e)
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Employment Agreement
shall mean that certain Employment Agreement dated ______________, between the Participant and the Company which is in effect on the date of this Agreement.
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(f)
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Good Reason
shall have the meaning ascribed to that term in the Employment Agreement.
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(g)
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Restricted Stock
shall mean the Stock Award that is the subject of this Agreement.
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(h)
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Term
shall have the meaning ascribed to that term in the Employment Agreement.
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(i)
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Unvested Restricted Stock
shall mean shares of Restricted Stock that are subject to forfeiture under the terms of this Agreement.
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(j)
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Vesting Date
shall mean the date on which all or a portion of the Restricted Stock is no longer subject to forfeiture under the terms of this Agreement.
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(k)
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Vested Restricted Stock
shall mean shares of Restricted Stock that are not subject to forfeiture under the terms of this Agreement.
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3.
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Vesting
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(a)
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The Restricted Stock shall become Vested Restricted Stock in four (4) annual and equal installments based on the Participant’s Continuous Service through January 1 of each of the four years following the Date of Grant (each installment being a “
Vesting Date
”). Accordingly, the Restricted Stock Award granted under this Agreement shall vest as follows:
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(b)
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In the event that the Participant’s employment is terminated as a result of death or Disability, the Participant shall vest in the Restricted Stock with such vesting occurring as of the day before the termination of employment and no portion of the Restricted Stock shall be Unvested Restricted Stock.
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(c)
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In the event the Participant’s employment terminates as a result of the non-renewal by the Company of the Term of the Employment Agreement in effect on the Date of Grant (the “
Current Term
”), the Participant shall vest in the Restricted Stock with such vesting occurring as of the day before the termination of employment and no portion of the Restricted Stock shall be Unvested Restricted Stock. In the event the Participant’s employment terminates as a result of the Company’s non-renewal of any subsequent renewal Term (a “
Renewal Term
”) of the Employment Agreement, the Participant shall vest in a pro-rata portion of the Restricted Stock determined based on the Participant’s date of termination of employment in accordance with Section 3(h) below. In the event the Participant’s employment terminates as a result of the non-renewal of the Term of the Employment Agreement by the Participant, whether at the end of the Current Term or any Renewal Term, all Unvested Restricted Stock shall immediately and without notice be forfeited and the Participant shall have no rights with respect to such Unvested Restricted Stock. The shares of Unvested Restricted Stock which do not vest shall immediately and without notice be forfeited and the Participant shall have no rights with respect to such Unvested Restricted Stock.
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(d)
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In the event the Participant’s employment is terminated by the Company without Cause or if the Participant terminates his/her employment with Good Reason, the Participant shall vest in the Restricted Stock with such vesting occurring as of the day before the termination of employment and no portion of the Restricted Stock shall be Unvested Restricted Stock.
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(e)
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In the event there is a Change in Control, as defined in the Plan, then the Participant shall vest in the Restricted Stock as of the effective date of any such Change in Control.
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(f)
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Except as is provided in Section 9 of the Plan, any adjustment to an award of Restricted Stock pursuant to Section 9 of the Plan shall not change the ratio of Unvested Restricted Stock to Vested Restricted Stock.
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(g)
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In the event the Participant’s employment is terminated for Cause or if the Participant terminates his/her employment without Good Reason, all Unvested Restricted Stock shall immediately and without notice be forfeited and the Participant shall have no rights with respect to such Unvested Restricted Stock.
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(h)
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If the Participant is entitled to vest in a pro-rata portion of the Restricted Stock, the number of shares of Unvested Restricted Stock which vest (or additional shares which shall vest if some of the shares have already vested) shall be determined by multiplying the number of shares scheduled to vest on the next scheduled vesting following the date of termination of employment by a fraction, the numerator of which is the number of days elapsed between the January 1 preceding the date of the termination of employment and the date of termination of employment, and the denominator of which is 365.
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(a)
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Cause
shall have the meaning ascribed to that term in the Employment Agreement.
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(b)
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Change of Control
shall have the meaning ascribed to that term in Section 2.E. of the Plan and such definition shall not be changed by the subsequent replacement of or superseding of said Plan after the date of this Agreement.
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(c)
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Code
shall mean the Internal Revenue Code of 1986, as amended, and any successor statute.
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(d)
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Disability
shall have the meaning ascribed to that term in the Employment Agreement.
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(e)
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Employment Agreement
shall mean that certain Employment Agreement dated _______________, between the Participant and the Company which is in effect on the date of this Agreement.
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(f)
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Good Reason
shall have the meaning ascribed to that term in the Employment Agreement.
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(g)
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Restricted Stock
shall mean the Stock Award that is the subject of this Agreement.
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(h)
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Term
shall have the meaning ascribed to that term in the Employment Agreement.
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(i)
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Unvested Restricted Stock
shall mean shares of Restricted Stock that are subject to forfeiture under the terms of this Agreement.
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(j)
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Vesting Date
shall mean the date on which all or a portion of the Restricted Stock is no longer subject to forfeiture under the terms of this Agreement.
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(k)
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Vested Restricted Stock
shall mean shares of Restricted Stock that are not subject to forfeiture under the terms of this Agreement.
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3.
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Vesting
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(a)
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The Restricted Stock shall become Vested Restricted Stock on _____________, based on the Participant’s Continuous Service through _____________ (the “
Vesting Date
”).
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(b)
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In the event that Participant’s employment is terminated as a result of death or Disability, Participant shall vest in the Restricted Stock with such vesting occurring as of the day before the termination of employment and no portion of the Restricted Stock shall be Unvested Restricted Stock.
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(c)
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In the event the Participant’s employment terminates as a result of the non-renewal by the Company of the Term of the Employment Agreement in effect on the Date of Grant (the “
Current Term
”), Participant shall vest in the Restricted Stock with such vesting occurring as of the day before the termination of employment and no portion of the Restricted Stock shall be Unvested Restricted Stock. In the event the Participant’s employment terminates as a result of the Company’s non-renewal of any subsequent renewal Term (a “
Renewal Term
”) of the Employment Agreement, Participant shall vest in a pro-rata portion of the Restricted Stock determined based on the Participant’s date of termination of employment in accordance with Section 3(h) below. In the event the Participant’s employment terminates as a result of the non-renewal of the Term of the Employment Agreement by the Participant, whether at the end of the Current Term or any Renewal Term, all Unvested Restricted Stock shall immediately and without notice be forfeited and Participant shall have no rights with respect to such Unvested Restricted Stock. The shares of Unvested Restricted Stock which do not vest shall immediately and without notice be forfeited and Participant shall have no rights with respect to such Unvested Restricted Stock.
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(d)
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In the event Participant’s employment is terminated by the Company without Cause or if Participant terminates his/her employment with Good Reason, Participant shall vest in the Restricted Stock with such vesting occurring as of the day before the termination of employment and no portion of the Restricted Stock shall be Unvested Restricted Stock.
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(e)
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In the event there is a Change in Control, as defined in the Plan, then Participant shall vest in the Restricted Stock as of the effective date of any such Change in Control.
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(f)
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Except as is provided in Section 9 of the Plan, any adjustment to an award of Restricted Stock pursuant to Section 9 of the Plan shall not change the ratio of Unvested Restricted Stock to Vested Restricted Stock.
|
(g)
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In the event Participant’s employment is terminated for Cause or if Participant terminates his/her employment without Good Reason, all Unvested Restricted Stock shall immediately and without notice be forfeited and Participant shall have no rights with respect to such Unvested Restricted Stock.
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(h)
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If the Participant is entitled to vest in a pro-rata portion of the Restricted Stock, the number of shares of Unvested Restricted Stock which vest shall be determined by multiplying the number of shares of Restricted Stock by a fraction, the numerator of which is the number of days elapsed between _____________, and the date of termination of employment, and the denominator of which is _________.
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1.
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I have reviewed this report on Form 10-Q of National Retail Properties, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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May 4, 2012
|
|
|
|
/s/ Craig Macnab
|
Date
|
|
Name:
|
|
Craig Macnab
|
|
|
Title:
|
|
Chairman of the Board and Chief Executive Officer
|
1.
|
I have reviewed this report on Form 10-Q of National Retail Properties, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of the annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
May 4, 2012
|
|
|
|
/s/ Kevin B. Habicht
|
Date
|
|
Name:
|
|
Kevin B. Habicht
|
|
|
Title:
|
|
Chief Financial Officer
|
May 4, 2012
|
|
|
|
/s/ Craig Macnab
|
Date
|
|
Name:
|
|
Craig Macnab
|
|
|
Title:
|
|
Chairman of the Board and Chief Executive Officer
|
May 4, 2012
|
|
|
|
/s/ Kevin B. Habicht
|
Date
|
|
Name:
|
|
Kevin B. Habicht
|
|
|
Title:
|
|
Chief Financial Officer
|