# EDGAR Filing Document

**Accession Number:** 0001424182
**File Stem:** 0000950170-23-000668
**Filing Date:** 2023-1
**Character Count:** 22170
**Document Hash:** 6b97c397c9493cec81bba6f8d792efc3
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000950170-23-000668.hdr.sgml**: 20230111

**ACCESSION NUMBER**: 0000950170-23-000668

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230106

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230111

**DATE AS OF CHANGE**: 20230111

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Broadstone Net Lease, Inc.
- **CENTRAL INDEX KEY:** 0001424182
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **IRS NUMBER:** 261516177
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39529
- **FILM NUMBER:** 23523713

**BUSINESS ADDRESS:**
- **STREET 1:** 800 CLINTON SQUARE
- **CITY:** Rochester
- **STATE:** NY
- **ZIP:** 14604
- **BUSINESS PHONE:** 585-287-6500

**MAIL ADDRESS:**
- **STREET 1:** 800 CLINTON SQUARE
- **CITY:** Rochester
- **STATE:** NY
- **ZIP:** 14604

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Broadstone Net Lease Inc
- **DATE OF NAME CHANGE:** 20080116

?xml version="1.0" encoding="ASCII"? 8-K

**UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549**

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**FORM** 8-K

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**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

**Date of Report (Date of earliest event reported):** January 06, 2023<br>

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BROADSTONE NET LEASE, INC.

**(Exact name of Registrant as Specified in Its Charter)**

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| | | |
|:---|:---|:---|
| Maryland | 001-39529 | 26-1516177 |
| **(State or Other Jurisdiction<br>of Incorporation)** | **(Commission File Number)** | **(IRS Employer<br>Identification No.)** |
| 800 Clinton Square |  |  |
| Rochester**,** New York |  | 14604 |
| **(Address of Principal Executive Offices)** |  | **(Zip Code)** |

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**Registrant's Telephone Number, Including Area Code:** 585 287-6500<br>

**(Former Name or Former Address, if Changed Since Last Report)**

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

**Securities registered pursuant to Section 12(b) of the Act:**

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| | |
|:---|:---|
| **<br>Title of each class** | **<br>Name of each exchange on which registered** |
| Common Stock, $0.00025 par value <br> BNL | The New York Stock Exchange |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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**Item 2.02 Results of Operations and Financial Condition.**

On January 11, 2023, Broadstone Net Lease, Inc. (the "<u>Company</u>") issued a press release that included a business update on fiscal year 2022. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

**Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.**

On January 6, 2023, Christopher J. Czarnecki, notified the Board of Directors (the "<u>Board</u>") of the Company of his decision to resign from his roles as the President and Chief Executive Officer ("<u>CEO</u>") of the Company, effective February 28, 2023 (the "<u>Transition Effective Date</u>"). Mr. Czarnecki's resignation was not the result of any disagreement with the Company.

On January 11, 2023, the Company announced that the Board elected the Company's Executive Vice President and Chief Operating Officer ("<u>COO</u>"), John Moragne, age 40, to succeed Mr. Czarnecki as CEO of the Company, effective on the Transition Effective Date. Mr. Czarnecki intends to continue to serve as a member of the Board until the Transition Effective Date, at which point he has agreed to resign from the Board. The Board intends to appoint Mr. Moragne as a director to replace Mr. Czarnecki upon his departure.

In addition, on January 11, 2023, the Company also announced that the Board approved a series of management team promotions in light of the CEO transition, including: (1) the Company's Executive Vice President and Chief Financial Officer ("<u>CFO</u>"), Ryan Albano, age 41, being elected as President and COO of the Company; and (2) the Company's Senior Vice President, Capital Markets & Credit Risk, Kevin M. Fennell, age 37, being elected to succeed Mr. Albano as the Executive Vice President and CFO of the Company, each promotion to be effective on the Transition Effective Date.

Each of Mr. Moragne's, Mr. Albano's and Mr. Fennell's biographical information is set forth on pages 29-30 of the Company's [<u>Proxy Statement for its 2022 Annual Meeting of Stockholders</u>](https://www.sec.gov/Archives/edgar/data/1424182/000119312522085123/d242877ddef14a.htm), filed with the Securities and Exchange Commission on March 25, 2022, in the section entitled "Executive Officers of the Company" which information is incorporated herein by reference.

In connection with the management team changes described above, the Company entered into an agreement with each of Mr. Czarnecki, Mr. Moragne, Mr. Albano, and Mr. Fennell, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Mr. Czarnecki and the Company, together with Broadstone Net Lease, LLC and Broadstone Employee Sub, LLC (collectively, the "<u>Company Group</u>") entered into a Chief Executive Officer Transition Agreement (the "<u>CEO Transition Agreement</u>"), pursuant to which Mr. Czarnecki has agreed to assist in the transition of his role and provide advisory services to the Company through January 31, 2024, unless earlier terminated in the event of Mr. Czarnecki's death, disability, resignation or by the Company Group for Cause (as defined in the CEO Transition Agreement). The terms of the CEO Transition Agreement provide for Mr. Czarnecki to receive payment for his consulting services of $50,000 per month, subsidized COBRA benefits for 18 months, an annual bonus in respect of 2022 and he will be eligible to receive a pro-rata bonus in respect of 2023, each based on actual Company performance and paid in the ordinary course. Outstanding time-based restricted stock held by Mr. Czarnecki as of the Transition Effective Date will vest in full at the end of the term of the CEO Transition Agreement, unless Mr. Czarnecki resigns or his services are terminated by the Company Group for Cause prior to January 31, 2024. Mr. Czarnecki will remain eligible to vest in a pro-rata portion of the performance-based restricted stock units ("<u>Performance-Based RSUs</u>") granted to him in 2021 and 2022 that are determined to have vested by the Compensation Committee of the Board in the ordinary course at the end of the award's applicable three-year performance period. In the case of Performance-Based RSUs granted in 2021, Mr. Czarnecki will retain the right to two-thirds of the number of Performance-Based RSUs, and one-third of the number of Performance-Based RSUs granted in 2022, otherwise determined to have vested in accordance with the respective terms of each award. In addition, under the terms of his current employment agreement and confirmed in the CEO Transition Agreement, Mr. Czarnecki remains subject to confidentiality, non-competition, non-solicitation, non-recruitment and non-disparagement covenants for a period of one year following the Transition Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Mr. Moragne and the Company Group entered into an amendment to his current employment agreement to reflect his promotion to the role of CEO of the Company and extend the term of the employment agreement to December 31, 2026. The amendment also reflects updates to his compensation, including an annual salary of $600,000, a target annual bonus of at least 120% of base salary, and a 2023 target long-term incentive plan award value of $2,000,000, which is divided into awards of time-based restricted stock (for 40% of the total award value) and Performance-Based RSUs (for 60% of the total award value). In addition, the multiple applicable to the cash salary and target bonus portion of the severance benefits to which Mr. Moragne becomes eligible to receive in the event of a termination of Mr. Moragne's employment by the Company Group without Cause or by Mr. Moragne for Good Reason (as those terms are defined in his employment agreement) was updated to be two years (or three years if the qualifying termination occurs during a Change in Control Window (as defined in his employment agreement)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Mr. Albano and the Company Group entered into an amendment to his current employment agreement to reflect his promotion to the role of President and COO of the Company and extend the term of the agreement to December 31, 2026. The amendment also reflects updates to his compensation, including an annual salary of $500,000 and a 2023 target

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long-term incentive plan award value of $1,500,000, which is divided into awards of time-based restricted stock (for 40% of the total award value) and Performance-Based RSUs (for 60% of the total award value).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;•Mr. Fennell and the Company Group entered into a severance protection agreement (the "<u>Severance Protection Agreement</u>"), providing Mr. Fennell with severance benefits in connection with certain termination of employment events. In the event of Mr. Fennell's termination of employment by the Company Group without Cause, or by Mr. Fennell for Good Reason (as such terms are defined in the Severance Protection Agreement), or in the event of Mr. Fennell's death or disability, Mr. Fennell will be entitled to the same severance payments and benefits as provided to Mr. Albano under the same circumstances. These severance payments and benefits are described on page 48 of the Company's [<u>Proxy Statement for its 2022 Annual Meeting of Stockholders</u>](https://www.sec.gov/Archives/edgar/data/1424182/000119312522085123/d242877ddef14a.htm), filed with the Securities and Exchange Commission on March 25, 2022, in the section entitled "Executive Compensation -- Employment Agreements with our Named Executive Officers," which information is incorporated herein by reference.

There are no family relationships, as defined in Item 401 of Regulation S-K, between any of Mr. Moragne, Mr. Albano, or Mr. Fennell and any of the Company's directors or executive officers or persons nominated or chosen to become a director or executive officer. None of Mr. Moragne, Mr. Albano, or Mr. Fennell has engaged in any transaction with the Company during the last fiscal year, and none of them proposes to engage in any transaction, that would be reportable under Item 404(a) of Regulation S-K.

**Item 7.01 Regulation FD Disclosure.**

A press release related to the matters described in Items 2.02 and 5.02 of this Current Report on Form 8-K is furnished herewith as Exhibit 99.1 and hereby incorporated in this Item 7.01 by reference.

The information in Exhibit 99.1 of this Current Report on Form 8-K is being "furnished" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (as amended, the "Exchange Act") or otherwise subject to the liabilities of that Section, and shall not be or be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.

**Item 9.01 Financial Statements and Exhibits.**

(d) Exhibits

**INDEX TO EXHIBITS**

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| | |
|:---|:---|
| **<u>Exhibit No.</u>** | **<u>Description</u>** |
| 99.1 | [<u>Press Release dated January 11, 2023</u>](bnl-ex99_1.htm) |

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | | |
|:---|:---|:---|:---|
| Date: | January 11, 2023 | By:  | /s/ John D. Callan, Jr. |
|  |  |  | Name: John D. Callan, Jr.<br>Title: Senior Vice President, General Counsel and Secretary |

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## Exhibit 99.1

**For Immediate Release**

**January 11, 2023**

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| | |
|:---|:---|
| **Company Contact:**<br>Michael Caruso<br>SVP, Corporate Finance & Investor Relations<br>michael.caruso@broadstone.com<br>585.402.7842 | ![img213017541_0.jpg](img213017541_0.jpg)  |

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**Broadstone Net Lease Announces Management Transition & YE 2022 Business Update** 

John Moragne to be named Chief Executive Officer

Ryan Albano to be named President & Chief Operating Officer

Kevin Fennell to be promoted to Executive Vice President & Chief Financial Officer

**ROCHESTER, N.Y.** – Broadstone Net Lease, Inc. (NYSE: BNL) ("Broadstone," "BNL," the "Company," "we," "our," or "us"), today announced that its Board of Directors has approved a senior executive succession plan pursuant to which John Moragne, currently the Company's Executive Vice President and Chief Operating Officer, will become Chief Executive Officer ("CEO") and a member of the Board, effective February 28, 2023. President and CEO Chris Czarnecki will step down from his current role and the Board of Directors upon the effective date but will remain with the Company through January 31, 2024, in an advisory role as part of the planned transition.

"Broadstone has a bright future and John is the clear choice to lead the Company as CEO into the next phase of its growth," stated Chris Czarnecki. "I am immensely proud to have been part of such a dynamic team over the past 13 years and to have served as the Company's CEO since 2017. I am tremendously grateful to have had the opportunity to build BNL into what it is today. After an exceptional year of operational performance and much thought and reflection, I feel that now is the appropriate time for me to step down to focus more on my personal interests and spend additional time with my family. I am confident that the Company will be in very capable hands moving forward into the next chapter. John has been a close colleague and friend of mine for many years, and I look forward to facilitating a seamless transition and supporting the entire team."

Accepting the appointment of CEO, Mr. Moragne said "I am grateful for this opportunity to lead Broadstone into the future with the same exceptional team I have worked alongside for the past seven years. I appreciate the confidence that Chris and the Board have placed in me to uphold our strong track record of execution and continue delivering long-term value for our shareholders." Mr. Moragne has served as Executive Vice President and Chief Operating Officer since 2018, leading the Company's real estate investments, operations, and numerous other corporate functions, and previously served as the Company's General Counsel from 2016 to 2018. Prior to joining the Company, Mr. Moragne served as an M&A and securities attorney in private practice, including providing legal counsel to BNL since the Company's inception in 2007.

"On behalf of the Board, I want to thank Chris for his distinguished leadership and steadfast commitment to BNL throughout his 13-plus-year tenure with the Company," said Chairman Laurie Hawkes. "Chris has been instrumental in BNL's growth since its earliest days, including recruiting and developing the current leadership team. We congratulate him on the extraordinary success he has achieved on behalf of all our stakeholders." Ms. Hawkes continued, "The Company is extremely fortunate to have such a deep bench of talent and experience. As we transition the Company's leadership to John, the Board and I maintain complete confidence in and excitement for the future of BNL."

As part of the senior executive succession plan, Ryan Albano, currently the Company's Executive Vice President and Chief Financial Officer, will transition to the role of President and Chief Operating Officer, effective February 28, 2023. In his new role, Mr. Albano will oversee the Company's investment strategy and real estate operations, including

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acquisitions, portfolio management, asset management and dispositions, and credit functions. Mr. Albano has served as BNL's Chief Financial Officer since February 2017 and is a member of our Investment Committee.

Additionally, Kevin Fennell, currently the Company's Senior Vice President of Capital Markets & Credit Risk, will be promoted to Executive Vice President and Chief Financial Officer, effective February 28, 2023. As Chief Financial Officer, Kevin will oversee capital markets strategy, investor relations, financial planning & analysis, accounting, internal audit, tax, and IT.

**Q4 AND YE 2022 BUSINESS UPDATE**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪During the fourth quarter, we invested $310.3 million in 18 properties at a weighted average initial cash capitalization rate of 6.7%. Investments were primarily weighted towards industrial assets, which represented $292 million of the total. The leases had a weighted average initial term of 19.7 years and minimum annual rent increases of 2.0%. For the full year 2022, we completed investments totaling $907.2 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪During the fourth quarter, we sold three properties for net proceeds of $39.2 million at a weighted average cash capitalization rate of 5.8%. For the full year 2022, we sold eight assets for net proceeds of $57.9 million.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪Collected 99.9% of base rents due for the fourth quarter for all properties under lease, and our portfolio was 99.4% leased based on rentable square footage, with three of our 804 total properties vacant and not subject to a lease as of quarter end. For the full year 2022, we collected more than 99.9% of base rents due for all properties under lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;▪On December 28, 2022, we settled our outstanding forward equity offering of 13,000,000 shares for net proceeds of $273.2 million. We used the proceeds to pay down a portion of the outstanding borrowings on our revolving line of credit.

**About Broadstone Net Lease, Inc.**

BNL is a real estate investment trust that acquires, owns, and manages primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants. The Company utilizes an investment strategy underpinned by strong fundamental credit analysis and prudent real estate underwriting. As of December 31, 2022, BNL's diversified portfolio consisted of 804 individual net leased commercial properties with 797 properties located in 44 U.S. states and seven properties located in four Canadian provinces across the industrial, healthcare, restaurant, retail, and office property types.

**Forward-Looking Statements** 

This press release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding, among other things, our plans, strategies, and prospects, both business and financial. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "should," "expect," "intend," "anticipate," "estimate," "would be," "believe," "continue," or other similar words. Forward-looking statements, including our assumptions, involve known and unknown risks and uncertainties, which may cause BNL's actual future results to differ materially from expected results, including, without limitation, risks and uncertainties related to the COVID-19 pandemic and its related impacts on us and our tenants, general economic conditions, including but not limited to increases in the rate of inflation and/or interest rates, local real estate conditions, tenant financial health, property acquisitions, and the timing and uncertainty of completing these acquisitions, and uncertainties regarding future distributions to our stockholders. These and other risks, assumptions, and uncertainties are described in Item 1A "Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 23, 2022, which you are encouraged to read, and is available on the SEC's website at www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company assumes no obligation to, and does not currently intend to, update any

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forward-looking statements after the date of this press release, whether as a result of new information, future events, changes in assumptions, or otherwise.

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