Business Context and Reporting Period
Company: Four Corners Property Trust, Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: November 7, 2016
Event: Entry into a Material Definitive Agreement (Amended and Restated Limited Partnership Agreement).
On November 7, 2016, Four Corners Operating Partnership, LP (the "Operating Partnership"), a wholly-owned subsidiary of the Company, amended and restated its limited partnership agreement. The Company owns 100% of the outstanding partnership units of the Operating Partnership, which holds all of the Company's properties and conducts its operations, excluding specific outside activities such as the operation of six LongHorn Steakhouse restaurants in San Antonio, Texas.
Key Financial Metrics
This filing is a current report regarding a corporate governance and structural agreement. It does not contain financial statements, revenue figures, profit data, cash flow metrics, debt levels, or liquidity ratios. The filing text does not provide a clear value for any financial performance indicators.
Material Changes Versus Prior Period
The filing details the terms of the new Partnership Agreement rather than a change in financial performance. Key structural provisions include:
- Management: Four Corners GP, LLC (a wholly-owned subsidiary) serves as the sole general partner with exclusive responsibility to manage the Operating Partnership.
- Capitalization: The agreement establishes Class A and Class B Units ("Common Units"). Distributions generally mirror those of the Company's common stock.
- Issuance of Units: The General Partner may issue additional units without partner approval, subject to specific limitations regarding economic similarity to Company stock or proportional issuance.
- Redemption Rights: Partners (other than the Company) may redeem OP Units for cash or Company common stock (at the Company's option) on a one-for-one basis, subject to a minimum of 1,000 units.
Guidance, Outlook, Risks, and Contingencies
REIT Compliance: The agreement mandates that the Operating Partnership be operated to ensure the Company qualifies as a Real Estate Investment Trust (REIT) under the Internal Revenue Code and avoids classification as a publicly-traded partnership.
Extraordinary Transactions: The Company cannot engage in mergers, consolidations, or sales of substantially all assets unless partners receive consideration equal to that paid to common stockholders.
Amendments: The General Partner may amend the agreement unilaterally, except for changes materially affecting redemption rights, distributions, profit allocations, limited liability, or capital contribution obligations, which require consent from partners holding more than 50% of OP Units (excluding the Company).
Liability: The General Partner is not liable for damages unless acting in bad faith. The agreement includes broad indemnification provisions for the Company, General Partner, and their officers and directors.
Important Facts for Investor Verification
- Verify the Company's continued 100% ownership of the Operating Partnership units as of the filing date.
- Confirm the specific terms of the redemption right, including the 1,000-unit minimum and the Company's discretion to pay in cash or stock.
- Review the attached Exhibit 10.1 for the complete legal text of the Amended and Restated Agreement of Limited Partnership.
- Note that the Operating Partnership retains the ability to operate six LongHorn Steakhouse restaurants as an outside activity.
- Understand that the General Partner has broad discretion to issue new units and manage operations without partner consent, subject to the limitations outlined in the agreement.