Company: NNN
Filing Date: 2025-03-20
Form Type: DEF 14A
Source: 0000950170-25-042337
Chunk: 27

Company: NNN REIT, INC.
Filing Date: 2025-03-20
Form: DEF 14A
Chunk 27
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 achievement of individual performance goals (25% weighting). Annual incentives are subject to downward adjustment if our debt leverage ratio exceeds a cap established by the Board. For 2024, the Committee approved long-term incentive compensation through grants of the following: (i) service-based restricted stock vesting ratably over four years (30% weighting), and (ii) performance-based restricted stock awards (or "performance shares"), the vesting of which is tied to the three-year relative TSR of the Company compared to a broad group of other REITs as of December 31, 2026 (70% weighting).

Chief Financial Officer Transition.In connection with the appointment of Mr. Chao as Executive Vice President effective January 9, 2025, Mr. Chao entered into an employment letter with the Company and became a participant in the Executive Severance Plan. Under his employment letter, Mr. Chao’s salary is $500,000 and he will be eligible to participate in the Company’s annual cash performance-based bonus plan and long-term equity incentive plan under the Company’s executive compensation program, with target award opportunities determined by the Committee. Mr. Chao received a one-time grant of 10,000 service-based restricted shares upon assuming the role of Executive Vice President, with 100% of the shares vesting after a three-year period subject to Mr. Chao’s continuous employment through the end of such three-year period. For a detailed discussion of the Executive Severance Plan, see “Potential Payments upon Termination of Change of Control.”

Effective April 1, 2025, Mr. Chao will assume the positions (in addition to Executive Vice President) of Chief Financial Officer, Assistant Secretary, Treasurer and serve as the Company’s principal financial officer.

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Restricted Stock.Restricted stock grants are intended to provide our NEOs with a significant interest in the long-term performance of our stock. The Committee has elected to use awards of restricted stock instead of other equity awards, such as stock options, because, as a REIT, which pays a large portion of its annual earnings to stockholders in the form of dividends, we believe that restricted stock provides a better incentive and alignment of interest than stock options. The Committee has determined that our desired compensation objectives are better achieved by awarding a combination of performance-based and service-based restricted stock as opposed to granting stock options. The Company did not issue any stock options to its executive officers in 2024, and there are no outstanding stock options. Consistent