☐
|
Preliminary Proxy Statement
|
☐
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
|
☒
|
Definitive Proxy Statement
|
☐
|
Definitive Additional Materials
|
☐
|
Soliciting Material under §240.14a-12
|
Retail Properties of America, Inc.
|
(Name of Registrant as Specified In Its Charter)
|
|
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
|
|
1.
|
To elect seven directors, nominated by the Board of Directors of the Company, to hold office until the 2022 annual meeting of stockholders and until their successors are elected and qualify;
|
2.
|
To approve the Company’s executive compensation on an advisory basis;
|
3.
|
To ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2021; and
|
4.
|
To transact any other business as may properly come before the meeting or any adjournments or postponements of the meeting.
|
|
| |
By order of the Board of Directors,
|
|
| |
|
|
| |
/s/ Ann M. Sharp Hult
|
|
| |
Ann M. Sharp Hult
|
Dated: March 31, 2021
|
| |
Secretary
|
| |
1.
|
Election of Directors: The affirmative vote of a majority of the votes cast is required for the election of each of the seven directors to be elected at the Annual Meeting, which means that a director nominee will only be elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. There are no cumulative voting rights in the election of directors.
|
2.
|
Approval of Executive Compensation on an Advisory Basis: The affirmative vote of a majority of the votes cast is required to approve the Company’s executive compensation on an advisory basis.
|
3.
|
Ratification of the Selection of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for 2021: The affirmative vote of a majority of the votes cast is required to ratify the selection of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2021.
|
| |
|
ENVIRONMENTAL
|
|
RENEWABLE ENERGY
We executed power purchase agreements and certified renewable energy certificates to deliver energy from renewable resources such as wind and solar to our Massachusetts, Maryland, New York, New Jersey and Texas properties. These properties are located in deregulated power jurisdictions and account for 45% of our total operating profile. While addressing a critical environmental concern, our investment in renewable energy resources also should hold growing resonance with our tenants and shoppers alike.
|
| |
|
|
| |
LED LIGHTING
We continue to invest in sustainable lighting projects throughout our portfolio. Our operations team continues to significantly reduce our energy consumption while further creating a safe shopping center experience for our guests and have lowered our total light pollution through this important center initiative.
Parking Lot Lighting: 45% of our portfolio parking lots have been upgraded to LED lighting
Common Area Lighting Upgrades: 42% of our shopping center common areas have upgraded LED wall packs, downlights and sconces
|
ENERGY-EFFICIENT ROOFING
Since 2013, we have replaced over 8,500,000 square feet of roofs with new energy-efficient roofing systems, a total investment of over $61 million.
|
| |
|
|
| |
ENVIRONMENTAL MANAGEMENT SYSTEM
In 2020, we implemented an Environmental Management System that provides the operations team with the ability to run historical energy, water and waste records from 2018 forward. Sustainability reporting, data collection, and validation tracks all required benchmarking ordinances that follow GRI reporting standards.
|
ELECTRIC VEHICLE CHARGING STATIONS
55 vehicle charging stations are featured at select neighborhood/community centers and our mixed-use/lifestyle assets.
|
| |
|
|
SOCIAL
|
|
|
| |
HUMAN CAPITAL
▪ Established a 20% diversity target for our Board of Directors
▪ Partnered with Jopwell Inc., a diversity, equity and inclusion partner to support diversity recruitment efforts
▪ Conducted unconscious bias, respect in the workplace/sexual harassment and diversity training to further enhance our cultural and
ethical behavior
▪ As of December 31, 2020, approximately 52% of our workforce was
female and minorities represented approximately 26% of our team
▪ Team investment in professional development through our “Make Your
Mark” leadership training series
▪ Performance management program centered on Behaviors in Action
including setting challenging and measurable goals
|
EMPLOYEE SAFETY & RESPONSE TRAINING
▪ Comprehensive Emergency Preparedness and Response Plan
▪ Conduct regular workplace safety and preparedness training
▪ Conducted OSHA, HVAC, AED, CPR and active shooter response training
▪ Hold monthly safety meetings and New Hire Safety Orientation
|
| |
|
|
SOCIAL: COVID-19 RESPONSE
|
|
|
| |
CORPORATE OUTREACH
▪ Gave back to local communities affected by the COVID-19 pandemic by providing monetary and non-monetary donations to first responders,
hospitals, non-profit organizations, food banks and more
▪ Implemented a company match towards any donations that were made during the week of the Juneteenth holiday to any 501(c)(3) charitable
organizations that support African American communities
▪ Annually fulfill over 300 holiday wishes for the children of Hephzibah
Children’s Association
|
HEALTH & SAFETY
▪ Maintain a COVID-19 information and tenant resource page on www.rpai.com where we post regular updates and provide relevant information related to regional and federal mandates and assistance programs for our tenants
▪ Enhanced disinfection protocols at our properties and ensure our vendors follow recommended CDC guidelines
▪ COVID-19 workplace risk assessment completed for all RPAI offices
▪ COVID-19 screening and reporting procedures for employees and third-party vendors
|
| |
|
|
| |
BUSINESS CONTINUITY
▪ The strength of our Business Continuity Plan and robust library of Standard Operating Procedures, coupled with our long-term strategic focus on information technology and data investment, have driven our ability to quickly react and continue with day-to-day business operations with minimal disruption as a result of COVID-19.
▪ Social Cohesion: With a partial team continuing to telework and others returning to the office, we are committed to maintaining a culture that remains connected and promotes collaboration through a series of virtual employee events.
|
SUPPORTING OUR TENANTS
▪ In response to the evolving retail and restaurant landscape, we created RPAI-branded curbside pickup parking space templates to be installed at our properties to enhance convenience at our centers.
▪ Our well-positioned portfolio allows for guests to continue to safely gather and enjoy unique experiences while adjusting to the “new normal” through additional center programing that continues to support our tenants and promotes guest safety.
▪ Our open-air portfolio continues to support regional and CDC guidelines while promoting guest engagement with our tenants as they continue to operate in the current environment. Our hands-on team continues to support all tenants with their business plans.
|
| |
|
|
GOVERNANCE
|
|
CORPORATE GOVERNANCE DOCUMENTS
▪ Comprehensive Code of Business Conduct and Ethics
▪ Policy on Company Political Spending
▪ Detailed internal policies and procedures for each organizational discipline and related risk
▪ Non-Retaliation Policy
▪ Guidelines on Corporate Governance
▪ Human Rights Statement
▪ Board oversight of environmental and social opportunities
|
| |
|
|
| |
COMMITTEE CHARTERS
▪ Audit Committee Charter
▪ Nominating and Corporate Governance Committee Charter
▪ Executive Compensation Committee Charter
▪ Full, fair, accurate, timely and understandable disclosures in reports and documents we file with regulatory agencies and in other public communications
|
|
PROPOSAL 1 - ELECTION OF DIRECTORS
|
|
Name, Positions with RPAI and Age
|
| |
Business Experience
|
GERALD M. GORSKI
Director since 2003 and Chairman of the Board since 2010
Age 78
|
| |
Gerald M. Gorski has been one of our directors since 2003 and Chairman of the Board since 2010. Mr. Gorski was a Partner in the law firm of Gorski & Good LLP, Wheaton, Illinois from 1978 through 2016. Mr. Gorski’s practice focused on governmental law, and he represented numerous units of local government in Illinois. Mr. Gorski has served as a Special Assistant State’s Attorney and a Special Assistant Attorney General in Illinois. Mr. Gorski also served as the Vice Chairman of the Board of Commissioners for the DuPage Airport Authority and the Chairman of the Board of Directors of the DuPage National Technology Park. Mr. Gorski has written numerous articles on various legal issues facing Illinois municipalities and has been a speaker at various municipal law conferences. Mr. Gorski is a National Association of Corporate Directors, or NACD, Board Leadership Fellow. Mr. Gorski received a B.A. from North Central College with majors in Political Science and Economics and a J.D. from DePaul University Law School.
|
|
| |
|
BONNIE S. BIUMI
Director since 2015
Age 58
|
| |
Bonnie S. Biumi has been one of our directors since 2015. Ms. Biumi has over 30 years of experience in public accounting and as a Chief Financial Officer or other senior-level financial position at both public and private companies. Most recently,
|
Name, Positions with RPAI and Age
|
| |
Business Experience
|
|
| |
Ms. Biumi served as President and Chief Financial Officer of Kerzner International Resorts, Inc., a developer, owner and operator of destination resorts, casinos and luxury hotels, from 2007 to 2012. Ms. Biumi previously held senior-level financial positions at NCL Corporation, Ltd. and Royal Caribbean Cruises, Ltd., which are listed on the NYSE, Neff Corporation (now United Rentals, Inc.), which was previously listed on the NYSE, Peoples Telephone Company, Inc. and Price Waterhouse. Ms. Biumi serves on the Board of Caesars Entertainment, Inc. (formerly Eldorado Resorts, Inc.), a Nasdaq-listed company. Previously, from 2012 to 2017, Ms. Biumi served on the Board of Directors of Isle of Capri Casinos, a Nasdaq-listed company, and from 2013 to 2015, she served on the Board of Directors of Home Properties, Inc., a NYSE-listed company. Ms. Biumi received a B.S. in Accounting from the University of Florida and is a certified public accountant.
|
|
| |
|
FRANK A. CATALANO, JR.
Director since 2003
Age 59
|
| |
Frank A. Catalano, Jr. has been one of our directors since our inception in 2003. Mr. Catalano has been President of Catalano & Associates, a real estate company that engages in brokerage and property management services and in the rehabilitation and leasing of office buildings, since 1999. Mr. Catalano served as Regional Vice President at Gateway Funding Diversified Mortgage Services, L.P., a residential mortgage banking company, from February 2008 to 2011 and as Vice President of American Home Mortgage Company from 2002 to August 2007. Mr. Catalano served as Regional Vice President of Flagstar Bank from January 2001 through March 2002 and as President and Chief Executive Officer of CCS Mortgage, Inc., which was sold to Flagstar Bank in 2000, from 1995 through 2000. Mr. Catalano is a member of the United Cerebral Palsy Seguin Board and formerly served as the Chairman of the Board of the Elmhurst Chamber of Commerce. Mr. Catalano is a NACD Board Leadership Fellow, holds a real estate broker’s license and is certified in cybersecurity.
|
|
| |
|
STEVEN P. GRIMES
Director since 2011; Chief Executive Officer since 2009
Age 54
|
| |
Steven P. Grimes has served as Chief Executive Officer of the Company since 2009 and as a Director since 2011. Previously, Mr. Grimes was President of the Company from October 2009 to May 2018; Chief Financial Officer of the Company since the internalization of our management in November 2007 to December 2011; Chief Operating Officer of the Company from November 2007 to October 2009 and Treasurer of the Company from October 2008 to December 2011. From February 2004 to November 2007, Mr. Grimes served as Principal Financial Officer and Treasurer and Chief Financial Officer of Inland Western Retail Real Estate Advisory Services, Inc., our former business manager/advisor. Previously, Mr. Grimes served as a Director with Cohen Financial, a mortgage brokerage firm, and as a senior manager with Deloitte & Touche LLP in their Chicago-based real estate
|
Name, Positions with RPAI and Age
|
| |
Business Experience
|
|
| |
practice where he was a national deputy real estate industry leader. Mr. Grimes is an active member of various real estate trade associations, including NAREIT, ICSC and The Real Estate Roundtable. Mr. Grimes received a B.S. in Accounting from Indiana University.
|
|
| |
|
RICHARD P. IMPERIALE
Director since 2008
Age 61
|
| |
Richard P. Imperiale has been one of our directors since 2008. Mr. Imperiale is President and founder of the Uniplan Companies, a Milwaukee, Wisconsin-based investment advisory holding company that, together with its affiliates, manages and advises over $2.5 billion of assets. Mr. Imperiale founded Uniplan, Inc. in 1984, which specializes in managing equity-income, REIT and micro-cap specialty portfolios for clients. Mr. Imperiale began his career as a credit analyst for the First Wisconsin National Bank (now U.S. Bank). In 1983, Mr. Imperiale joined B.C. Ziegler & Company, a Midwest regional brokerage firm where he was instrumental in the development of portfolio strategies for one of the first hedged municipal bond mutual funds in the country. Mr. Imperiale serves as a Director of Reven Housing REIT, Inc., a Nasdaq-listed company, with a regional focus on single-family residential properties. Mr. Imperiale is widely quoted in local and national media on matters pertaining to investments and is the author of several books on investing, including “Real Estate Investment Trusts: New Strategies For Portfolio Management” published by John Wiley & Sons, 2002. Mr. Imperiale is a NACD Board Leadership Fellow. Mr. Imperiale received a B.S. in Finance from Marquette University Business School.
|
|
| |
|
PETER L. LYNCH
Director since 2014
Age 69
|
| |
Peter L. Lynch has been one of our directors since 2014. Mr. Lynch served as Chairman of the Board of Directors, President and Chief Executive Officer, from 2006 to March 2012, and Chief Executive Officer, from 2004 to 2006, of Winn-Dixie Stores, Inc., a supermarket chain operating approximately 485 combination food and drug stores throughout the South and a Nasdaq-listed company prior to its merger with BI-LO, LLC in December 2011. From 1998 through 2003, Mr. Lynch held various positions of increasing responsibility, including President and Chief Operating Officer and Executive Vice President-Operations, with Albertson’s, Inc., a national retail food and drug chain comprised of 2,500 stores operating under the Albertson’s, Jewel/Osco, ACME, Sav-on and Osco names. While at Albertson’s, Inc., Mr. Lynch spearheaded the successful merger of American Stores Company, which operated food and drug stores in the Midwest, into Albertson’s, Inc. Mr. Lynch also held executive positions with Jewel/Osco, including President of the ACME division and Senior Vice President of Store Operations. Mr. Lynch began his career with Star Markets Company, a regional retailer, serving as Vice President of Operations and Vice President of Human Resources before being named its President. Mr. Lynch serves on the Board of Directors of Alcanna Inc. (formerly Liquor Stores N.A. Ltd.),
|
Name, Positions with RPAI and Age
|
| |
Business Experience
|
|
| |
which is listed on the Toronto Stock Exchange. Mr. Lynch also serves on the Board of Sid Wainer & Son, a privately held company, located in New Bedford, Massachusetts. Mr. Lynch is a member of the Board of Trustees of Nichols College and is a Trustee of the Willowbend Country Club. Mr. Lynch received a B.S. in Finance from Nichols College.
|
|
| |
|
THOMAS J. SARGEANT
Director since 2013
Age 62
|
| |
Thomas J. Sargeant has been one of our directors since 2013. Mr. Sargeant served as Chief Financial Officer of AvalonBay Communities, Inc., a NYSE-listed multi-family REIT, from 1995 until his retirement in May 2014. From 1986 through 1995, Mr. Sargeant held various finance positions with AvalonBay Communities, Inc.’s predecessor companies, including Chief Financial Officer, Secretary, Treasurer, Group Financial Officer and Controller. From 1984 to 1986, Mr. Sargeant held a finance position with Ingersoll Rand. From 1980 to 1984, Mr. Sargeant held various roles at Arthur Andersen & Company serving clients primarily in the real estate and construction industries. Mr. Sargeant is a member of the Boards of Directors of Morgan Stanley Private Bank, N.A., a wholly owned subsidiary of Morgan Stanley, and of Morgan Stanley Bank, N.A. Mr. Sargeant received a B.S. in Business Administration from the University of South Carolina and is a certified public accountant.
|
▪
|
Mr. Gorski’s experience as an attorney and focus on local government law gives the Board a valuable perspective on the numerous legal issues (including land-use law) that the Company faces, as well as on local political issues;
|
▪
|
Ms. Biumi’s financial experience, including her serving as chief financial officer or in other senior-level financial positions of both public and private companies, and experience as a certified public accountant, brings financial expertise to the Board and the Audit Committee;
|
▪
|
Mr. Catalano’s experience in leading a firm engaged in the brokerage, management, rehabilitation and leasing of commercial property coincides closely with the Company’s business;
|
▪
|
Mr. Grimes’ experience and position as the Company’s Chief Executive Officer;
|
▪
|
Mr. Imperiale’s experience in the brokerage and investment advisory industries provides the Board with a REIT investor’s perspective as to the Company’s financial results and corporate messaging;
|
▪
|
Mr. Lynch’s leadership experience, including his serving as president and chief executive officer of a retail grocer and Nasdaq-listed company, and his knowledge of financial management, strategic business planning, mergers and acquisitions and of both retail and non-retail operations; and
|
▪
|
Mr. Sargeant’s financial and real estate experience, including his serving as chief financial officer of a NYSE-listed REIT, brings financial expertise to the Board and the Audit Committee.
|
|
CORPORATE GOVERNANCE AND BOARD MATTERS
|
|
▪
|
the Board is not staggered, with each of our directors subject to re-election annually;
|
▪
|
of the eight persons who currently serve on the Board, seven have been affirmatively determined by the Board to be independent for purposes of the NYSE’s listing standards;
|
▪
|
we have a majority voting standard for uncontested director elections;
|
▪
|
two current members of our Audit Committee qualify as “audit committee financial experts” as defined by SEC rules;
|
▪
|
we have an independent Chairman of the Board;
|
▪
|
we have opted out of the Maryland business combination and control share acquisition statutes and we may not opt in without stockholder approval;
|
▪
|
our bylaws may be amended by the affirmative vote of a majority of all votes entitled to be cast by stockholders of the issued and outstanding shares of common stock of the Company at a meeting of stockholders duly called and at which a quorum is present;
|
▪
|
we do not have a stockholder rights plan and in the future, we will not adopt a stockholder rights plan unless our stockholders approve in advance the adoption of a plan or, if adopted by the Board, we will submit the stockholder rights plan to our stockholders for a ratification vote within twelve (12) months of the adoption or the plan will terminate;
|
▪
|
we have a robust anti-hedging and anti-pledging policy that prohibits such action by members of the Board or our Named Executive Officers (as defined herein);
|
▪
|
we have adopted a formal policy to endeavor to generally maintain diversity on the Board such that at least 20% of the Board will be comprised of persons who self-identify as female or as an underrepresented minority or LGBTQ+;
|
▪
|
we have stock ownership guidelines for members of the Board, our Chief Executive Officer and our other Named Executive Officers (as defined herein); and
|
▪
|
we intend to conduct an annual stockholders’ advisory vote on executive compensation in accordance with the stockholders’ advisory vote on the frequency of executive compensation.
|
|
|
| |
Audit
Committee
|
| |
Executive
Compensation Committee
|
| |
Nominating & Corporate
Governance Committee
|
|
|
Gerald M. Gorski
|
| |
|
| |
■
|
| |
■
|
|
|
Bonnie S. Biumi(1)
|
| |
■ CC/FE
|
| |
■ CC
|
| |
|
|
|
Frank A. Catalano, Jr.
|
| |
|
| |
■
|
| |
■
|
|
|
Robert G. Gifford
|
| |
■
|
| |
|
| |
■
|
|
|
Richard P. Imperiale
|
| |
■
|
| |
■
|
| |
|
|
|
Peter L. Lynch
|
| |
|
| |
■
|
| |
■ CC
|
|
|
Thomas J. Sargeant(1)
|
| |
■ FE
|
| |
■
|
| |
|
|
(1)
|
Ms. Biumi was appointed chair of the Audit Committee in February 2021. Mr. Sargeant served as chair of the Audit Committee prior to Ms. Biumi’s appointment.
|
1.
|
The Audit Committee has reviewed and discussed with management the audited financial statements for Retail Properties of America, Inc. for the fiscal year ended December 31, 2020.
|
2.
|
The Audit Committee has discussed with representatives of Deloitte & Touche LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC.
|
3.
|
The Audit Committee has received the written disclosures and the letter from the independent accountant required by the applicable requirements of the PCAOB regarding the independent accountant’s communications with the Audit Committee concerning independence and has discussed with the independent accountant the independent accountant’s independence.
|
▪
|
an annual restricted stock award having a value of $125,000;
|
▪
|
an additional annual restricted stock award having a value of $50,000 for service as Chairman of the Board;
|
▪
|
an annual cash retainer of $75,000 for service as a director;
|
▪
|
an additional annual cash retainer of $50,000 for service as Chairman of the Board;
|
▪
|
an additional annual cash retainer of $25,000 for service as the chair of the Audit Committee;
|
▪
|
an additional annual cash retainer of $15,000 for service as the chair of the ECC or the NCG Committee; and
|
▪
|
an additional annual cash retainer of $10,000 for service as a non-chair member of the Audit, ECC or NCG Committee.
|
|
2020 Director Compensation
|
|
|
Name
|
| |
Fees Earned or
Paid in Cash ($)
|
| |
Stock
Awards ($)(1)
|
| |
Total ($)
|
|
|
Gerald M. Gorski
|
| |
$145,000
|
| |
$175,003
|
| |
$320,003
|
|
|
Bonnie S. Biumi
|
| |
100,000
|
| |
125,004
|
| |
225,004
|
|
|
Frank A. Catalano, Jr.
|
| |
95,000
|
| |
125,004
|
| |
220,004
|
|
|
Robert G. Gifford
|
| |
95,000
|
| |
125,004
|
| |
220,004
|
|
|
Richard P. Imperiale
|
| |
95,000
|
| |
125,004
|
| |
220,004
|
|
|
Peter L. Lynch
|
| |
100,000
|
| |
125,004
|
| |
225,004
|
|
|
Thomas J. Sargeant(2)
|
| |
110,000
|
| |
125,004
|
| |
235,004
|
|
(1)
|
Represents the aggregate grant date fair value of restricted stock awards granted during the year ended December 31, 2020, calculated as the closing price of our common stock on the NYSE on the grant date multiplied by the number of shares granted. As of December 31, 2020, each of the non-employee directors held 17,656 unvested shares of restricted stock that had been granted by us as director compensation, except for Mr. Gorski who held 24,718 unvested shares of restricted stock. As of December 31, 2020, Mr. Gorski held unexercised options to purchase 2,000 shares of common stock, Messrs. Catalano and Imperiale held unexercised options to purchase 4,000 shares of common stock, and Messrs. Gifford, Lynch and Sargeant and Ms. Biumi held no unexercised options.
|
(2)
|
Includes fees earned for the year ended December 31, 2020 with respect to Mr. Sargeant’s service as the chair of the Audit Committee.
|
|
OUR EXECUTIVE OFFICERS
|
|
Name, Positions with RPAI and Age
|
| |
Business Experience
|
SHANE C. GARRISON
President and Chief
Operating Officer
Age 51
|
| |
Shane C. Garrison serves as our President and Chief Operating Officer. Mr. Garrison is responsible for overseeing a number of operating functions within the Company, including leasing, property management, asset management, which includes acquisitions and dispositions, joint ventures and construction operations. Mr. Garrison has served as our President since May 2018 and as our Chief Operating Officer since 2012. Mr. Garrison previously served as an Executive Vice President since 2010 and as our Chief Investment Officer since the internalization of our management in November 2007, in each case through May 2018. Before November 2007, Mr. Garrison served as Vice President of Asset Management of Inland US Management LLC, a property management company affiliated with our former business manager/advisor, since 2004. In this role, Mr. Garrison underwrote over $1.2 billion of assets acquired by the Company and went on to spearhead our development and joint venture initiatives. Previously, Mr. Garrison served as Head of Asset Management for ECI Properties, a boutique owner of industrial and retail properties, and the General Manager of the Midwest region for Circuit City, formerly a large electronics retailer. Mr. Garrison received a B.S. in Business Administration from Illinois State University and an M.B.A. in Real Estate Finance from DePaul University.
|
|
| |
|
JULIE M. SWINEHART
Executive Vice President, Chief
Financial Officer and Treasurer
Age 45
|
| |
Julie M. Swinehart has served as our Executive Vice President, Chief Financial Officer and Treasurer since February 2018. Ms. Swinehart is responsible for overseeing the financial functions within the Company, including accounting, finance, treasury, capital markets and investor relations, as well as administrative oversight of the internal audit function. She served as our Senior Vice President and Chief Accounting Officer from July 2015 to February 2018, our Senior Vice President and Corporate Controller from April 2013 to July 2015 and held various accounting and financial reporting positions since joining the Company in 2008. Before joining the Company, Ms. Swinehart was a Manager of External Reporting at Equity Office Properties Trust for two years and she spent eight years in public accounting in the audit practices of Arthur Andersen LLP and Deloitte & Touche LLP. Ms. Swinehart received a B.S. in Accountancy from the University of Illinois at Urbana-Champaign and is a certified public accountant.
|
|
EXECUTIVE COMPENSATION
|
|
▪
|
executed approximately 600 agreements with tenants regarding lease concessions, representing 26% of the total lease count in our portfolio, resulting in rent relief lease consideration related to previously uncollected base rent of $27 million, comprised of $12 million in deferred rent and addressed an additional $15 million through abatement, a combination of deferral and abatement or a concession with the extension of the lease term, providing visibility around tenant receivables and stabilizing cash flows;
|
▪
|
negotiated lease modifications to include concessions related to lease term extensions, sales reporting, co-tenancy waivers, credit enhancements and removal of development and use restrictions, enhancing our leverage within our portfolio and positioning us for future success;
|
▪
|
as of February 8, 2021, recorded increased base rent collection trends in the second half of 2020, including the collection of 78.0%, 87.6% and 94.1% of base rent charges related to the three months ended June 30, 2020, September 30, 2020 and December 31, 2020, respectively;
|
▪
|
signed leases for 2,166,000 square feet across 371 transactions with a blended re-leasing spread of positive 3.0%, with bankruptcy backfills accounting for 23% of the 102 new leases signed during 2020;
|
▪
|
achieved annual contractual rent increases on signed new leases of approximately 175 basis points;
|
▪
|
we were one of the lowest-levered companies in our sector as of December 31, 2020, having issued (i) $100 million in additional principal through the reopening of our 4.00% senior unsecured notes due 2025 and (ii) $400 million in principal of new 4.75% senior unsecured notes due 2030, each in an underwritten public offering, and redeployed the net proceeds from these public issuances to fully address all $350 million in existing 2021 debt maturities, increase available liquidity to $891.5 million as of December 31, 2020 and improve the weighted average years to maturity of our indebtedness to 5.9 years as of December 31, 2020;
|
▪
|
amended certain of our debt agreements to modify the covenant calculation for the unencumbered interest ratio to include operating results from the most recent four fiscal quarters, consistent with all other covenant calculations across our debt instruments, partially mitigating the impact of short-term relative adverse operating results, if any, on our financial covenants by previous and/or subsequent operating results;
|
▪
|
transitioned our employees to working remotely while minimizing disruption to the organization by maintaining team building and employee wellness initiatives, and did not furlough any employees or significantly modify any of our key processes or internal controls over financial reporting;
|
▪
|
maintained consistent and informative investor outreach regarding the impact of COVID-19 on our operational performance and fundamental outlook for 2021, with a focus on rent collections and balance sheet health;
|
▪
|
developed meaningful and transparent reporting disclosures to provide investors with tenant-level detail on rent collections, tenant health, reserves and essential versus non-essential retailers, and to provide clarity regarding the complex lease accounting treatment for rent deferrals and abatements and lease modifications;
|
▪
|
published our inaugural Corporate Sustainability Report;
|
▪
|
provided resources to tenants, continued our commitment to charitable efforts and launched new diversity, equity and inclusion training and initiatives; and
|
▪
|
made firm and swift decisions regarding developments in progress based on relative returns and leasing risk, configuration and local demand drivers, which led to (i) halted plans for the vertical construction at our Carillon redevelopment and a material reduction in scope and spend for the project, (ii) continued construction at One Loudon Downtown, which avoided increased structural costs and delays in 2020, and positioned the asset to begin leasing and driving incremental cash flow in 2021, (iii) the opening of anchor tenants at our Circle East project, and (iv) the delivery of space to a grocer anchor at The Shoppes at Quarterfield.
|
Component
|
| |
Form of Payout
|
| |
Objective
|
| |
Characteristic
|
Base Salary
|
| |
Cash
|
| |
Annual base salary compensation to help retain executive level talent
|
| |
Competitive base salary compensation based on comparative market analysis
|
|
| |
|
| |
|
| |
|
Short-Term Incentive Plan
|
| |
Cash
|
| |
Incentive to achieve annual company and individual objectives in support of annual performance goals related to corporate/financial performance as well as individual performance
|
| |
Earned based on the achievement of annual company goals, including growth in our Same Store EBITDAre, Operating FFO per diluted share and Net Debt to Adjusted EBITDAre ratio, as well as specific individual performance goals, however, in 2020, Named Executive Officers instead received discretionary bonuses, due to the impact of COVID-19, based on subjective achievements.
|
|
| |
|
| |
|
| |
|
Long-Term Incentive Plan
|
| |
Performance-Based Restricted Stock Units/Time-Based Restricted Stock
|
| |
Encourage alignment of interests with stockholders and long-term retention of executives and provide an incentive for long-term relative total stockholder return performance compared to peers
|
| |
Awards issued with (i) 75% earned based on the achievement of relative total stockholder return performance compared to the peer companies in the NAREIT Shopping Center Index over a three-year performance period, with one-third of the shares earned, if any, vesting following the performance period and the remaining two-thirds of the shares earned, if any, vesting one year thereafter, based on continued employment and (ii) 25% vesting over a three-year period, based on continued employment
|
|
Named Executive Officer
|
| |
2020
Base
Salary
|
| |
2019
Base
Salary
|
| |
Percentage
Change
|
|
|
Steven P. Grimes
|
| |
$950,000
|
| |
$850,000
|
| |
11.8%
|
|
|
Shane C. Garrison
|
| |
650,000
|
| |
650,000
|
| |
—
|
|
|
Julie M. Swinehart
|
| |
500,000
|
| |
475,000
|
| |
5.3%
|
|
|
Named Executive Officer
|
| |
|
| |
2020 Target Long-Term
Incentive Plan Awards
|
| |||
|
2020 Target
Short-Term
Incentive
Plan Awards
|
| |
Performance-
Based
Restricted
Stock Units
|
| |
Time-Based
Restricted Stock
|
| |||
|
Steven P. Grimes
|
| |
$1,250,000
|
| |
$2,418,750
|
| |
$806,250
|
|
|
Shane C. Garrison
|
| |
585,000
|
| |
1,267,500
|
| |
422,500
|
|
|
Julie M. Swinehart
|
| |
450,000
|
| |
843,750
|
| |
281,250
|
|
|
Named Executive Officer
|
| |
Company Goals
|
| |
|
| ||||||
|
Same Store
EBITDAre
Growth
|
| |
Operating FFO
per Diluted
Share
|
| |
Net Debt to
Adjusted
EBITDAre
|
| |
Individual
Goals
|
| |||
|
Steven P. Grimes
|
| |
22.5%
|
| |
45.0%
|
| |
7.5%
|
| |
25.0%
|
|
|
Shane C. Garrison
|
| |
21.0%
|
| |
42.0%
|
| |
7.0%
|
| |
30.0%
|
|
|
Julie M. Swinehart
|
| |
21.0%
|
| |
42.0%
|
| |
7.0%
|
| |
30.0%
|
|
|
Same Store EBITDAre(1)
|
| |
Threshold (50%)
|
| |
0.00%
|
|
|
Target (100%)
|
| |
1.00%
|
| |||
|
Maximum (200%)
|
| |
2.75%
|
|
|
Operating FFO per Diluted Share(2)
|
| |
Threshold (50%)
|
| |
$1.05
|
|
|
Target (100%)
|
| |
$1.07
|
| |||
|
Maximum (200%)
|
| |
$1.17
|
|
|
Net Debt to Adjusted EBITDAre Ratio(3)
|
| |
Threshold (50%)
|
| |
6.0x
|
|
|
Target (100%)
|
| |
5.8x
|
| |||
|
Maximum (200%)
|
| |
5.5x
|
|
(1)
|
Same store EBITDAre is calculated by reducing our publicly reported same store net operating income (NOI) by general and administrative expenses, adjusted to exclude executive separation charges, short-term cash incentives and amortization of stock awards. We define NOI as all revenues other than (i) straight-line rental income (non-cash), (ii) amortization of lease
|
(2)
|
Operating FFO attributable to common shareholders represents funds from operations attributable to common shareholders, or FFO, for the year ended December 31, 2020, excluding the impact of discrete non-operating transactions and other events which we do not consider representative of the comparable operating results of our real estate operating portfolio, which is our core business platform. FFO means net income computed in accordance with generally accepted accounting principles, excluding (i) depreciation and amortization related to real estate, (ii) gains from sales of real estate assets, (iii) gains and losses from change in control and (iv) impairment write-downs of real estate assets and investments in entities directly attributable to decreases in the value of real estate held by the entity.
|
(3)
|
Net Debt to Adjusted EBITDAre ratio represents (i) the total principal amount of our debt, which excludes unamortized discount and capitalized loan fees, less cash and cash equivalents as of December 31, 2020 divided by (ii) Adjusted EBITDAre for the three months ended December 31, 2020, annualized. Adjusted EBITDAre represents net income, plus (a) interest expense, (b) income tax expense, (c) depreciation and amortization, (d) impairment charges on investment property and (e) impairment charges on investments in unconsolidated affiliates if caused by a decrease in the value of depreciable property in the affiliate, plus or minus (x) gains from sales of investment property, including gains (or losses) on change in control, and (y) adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates, as further adjusted to exclude the impact of certain discrete non-operating transactions and other events such as gain on litigation settlement, which we do not consider indicative of our ongoing performance.
|
Named Executive Officer
|
| |
Individual Goals
|
Steven P. Grimes
|
| |
Goals relating to the oversight and execution of the Company’s strategic plan, RPAI 2.0; optimization of the performance of the senior leadership team; oversight of Information Technology (“IT”) matters; investor communication; and advancement of ESG efforts.
|
|
| |
|
Shane C. Garrison
|
| |
Goals relating to the diversification of the overall rent roll and contractual rent growth; executing on the development strategy, including the completion of the redevelopment of The Shoppes at Quarterfield, continuation of the Carillon and One Loudon Downtown developments; execution of leasing plans; support of leadership development; and operation in accordance with budget.
|
|
| |
|
Julie M. Swinehart
|
| |
Goals relating to management and oversight of certain internal departments and functions; re-engage with fixed income investors; expanded, targeted investor outreach; career development, including furthering relationships with peer network and the Board; enhancement of level of information and reporting pertaining to tenants, markets and properties; leadership development and succession planning; support of leadership, including IT leadership, and operational efficiency initiatives; support of ESG initiatives; and operation in accordance with budget.
|
|
Named Executive Officer
|
| |
2020 Short-Term Incentive
Plan Award Amount ($)
|
|
|
Steven P. Grimes
|
| |
$1,250,000
|
|
|
Shane C. Garrison
|
| |
585,000
|
|
|
Julie M. Swinehart
|
| |
450,000
|
|
Award Type for Named Executive Officers
|
| |
Weighting
|
| |
Vesting Terms
|
Performance-Based Restricted Stock Units
|
| |
75%
|
| |
Earned based on our relative total stockholder return compared to that of the peer companies in the NAREIT Shopping Center Index over the three-year performance period ending December 31, 2022. One-third of the shares earned, if any, will be issued in common stock following the end of the performance period, and two-thirds of the shares earned, if any, will be issued in restricted stock that will vest on December 31, 2023, subject to continued employment through such date.
|
|
| |
|
| |
|
Time-Based Restricted Stock
|
| |
25%
|
| |
Vest in three equal annual installments commencing on January 4, 2021, subject to continued employment through such dates.
|
|
Performance Level
|
| |
Relative
Performance
|
| |
Percentage of
Target Earned
|
|
|
Maximum
|
| |
90th Percentile
|
| |
200%
|
|
|
Target
|
| |
Median
|
| |
100%
|
|
|
Threshold
|
| |
25th Percentile
|
| |
50%
|
|
|
|
| |
2020 Target Amounts
|
| |||
|
Named Executive Officer
|
| |
($)
|
| |
(# of Units)(1)
|
|
|
Steven P. Grimes
|
| |
$2,418,750
|
| |
176,939
|
|
|
Shane C. Garrison
|
| |
1,267,500
|
| |
92,722
|
|
|
Julie M. Swinehart
|
| |
843,750
|
| |
61,723
|
|
(1)
|
The target number of units granted to each of our Named Executive Officers was determined based on the target dollar value divided by the estimated grant date fair value per unit using a third-party valuation.
|
|
|
| |
2020 Restricted Stock Awards
|
| |||
|
Named Executive Officer
|
| |
($)
|
| |
(# of Shares)(1)
|
|
|
Steven P. Grimes
|
| |
$806,250
|
| |
61,688
|
|
|
Shane C. Garrison
|
| |
422,500
|
| |
32,326
|
|
|
Julie M. Swinehart
|
| |
281,250
|
| |
21,519
|
|
(1)
|
The number of shares granted to each of our Named Executive Officers was determined based on dividing the dollar value by the closing price of our common stock on the grant date.
|
▪
|
| |
Acadia Realty Trust
|
| |
▪
|
| |
Regency Centers Corporation
|
▪
|
| |
Brixmor Property Group, Inc.
|
| |
▪
|
| |
Retail Opportunity Investments Corp.
|
▪
|
| |
Federal Realty Investment Trust
|
| |
▪
|
| |
Taubman Centers, Inc.
|
▪
|
| |
Kimco Realty Corporation
|
| |
▪
|
| |
Urban Edge Properties
|
▪
|
| |
The Macerich Company
|
| |
▪
|
| |
Weingarten Realty Investors
|
▪
|
| |
Pennsylvania Real Estate Investment Trust
|
| |
|
| |
|
|
Summary Compensation Table
|
|
|
Name and Principal Position
|
| |
Year
|
| |
Salary ($)
|
| |
Bonus ($)
|
| |
Stock
Awards ($)
|
| |
Non-Equity
Incentive Plan
Compensation
($)(1)
|
| |
All Other
Compensation
($)(2)
|
| |
Total ($)
|
|
|
Steven P. Grimes
Chief Executive Officer
|
| |
2020
|
| |
950,000
|
| |
1,250,000(3)
|
| |
3,225,018(4)
|
| |
—
|
| |
19,762
|
| |
5,444,780
|
|
|
2019
|
| |
850,000
|
| |
—
|
| |
3,075,007(5)
|
| |
1,823,000
|
| |
15,965
|
| |
5,763,972
|
| |||
|
2018
|
| |
850,000
|
| |
—
|
| |
2,825,011(6)
|
| |
1,651,000
|
| |
11,406
|
| |
5,337,417
|
| |||
|
Julie M. Swinehart
Executive Vice President,
Chief Financial Officer
and Treasurer
|
| |
2020
|
| |
500,000
|
| |
450,000(3)
|
| |
1,125,006(4)
|
| |
—
|
| |
22,463
|
| |
2,097,469
|
|
|
2019
|
| |
475,000
|
| |
—
|
| |
925,013(5)
|
| |
488,000
|
| |
22,125
|
| |
1,910,138
|
| |||
|
2018
|
| |
456,500(7)
|
| |
—
|
| |
625,018(6)
|
| |
454,000
|
| |
23,303
|
| |
1,558,821
|
| |||
|
Shane C. Garrison
President and Chief
Operating Officer
|
| |
2020
|
| |
650,000
|
| |
585,000(3)
|
| |
1,690,011(4)
|
| |
—
|
| |
22,463
|
| |
2,947,474
|
|
|
2019
|
| |
650,000
|
| |
—
|
| |
1,590,015(5)
|
| |
833,000
|
| |
22,125
|
| |
3,095,140
|
| |||
|
2018
|
| |
650,000
|
| |
—
|
| |
1,490,019(6)
|
| |
712,000
|
| |
26,773
|
| |
2,878,792
|
|
(1)
|
Amounts reported reflect short-term incentive plan awards earned by our Named Executive Officers related to the respective year’s performance, which was paid in February of the following year. No short-term incentive plan awards were earned by our Named Executive Officers for the year ended December 31, 2020. Additional information regarding our short-term incentive plan awards is described above under “— Compensation Discussion and Analysis.”
|
(2)
|
The amounts shown in this column for 2020 include the following:
|
|
Name
|
| |
Company
Contribution
to Health
Savings
Account ($)
|
| |
Health
Insurance
Premiums
($)
|
| |
Company
Match to
401(k) Plan
($)
|
| |
Group
Disability
and Term Life
Insurance
Premiums(a)
($)
|
| |
Total ($)
|
|
|
Steven P. Grimes
|
| |
1,000
|
| |
13,918
|
| |
3,500
|
| |
1,344
|
| |
19,762
|
|
|
Julie M. Swinehart
|
| |
1,000
|
| |
16,619
|
| |
3,500
|
| |
1,344
|
| |
22,463
|
|
|
Shane C. Garrison
|
| |
1,000
|
| |
16,619
|
| |
3,500
|
| |
1,344
|
| |
22,463
|
|
(a)
|
Amounts shown are the premiums for group disability and life insurance policies.
|
(3)
|
Amounts reported reflect discretionary bonuses paid to our Named Executive Officers in February 2021 related to fiscal year 2020 performance. Additional information regarding these discretionary bonuses are described above under “— Compensation Discussion and Analysis.”
|
(4)
|
Amounts reported in 2020 include the aggregate grant date fair value of performance-based restricted stock units and restricted stock awards granted during the year ended December 31, 2020, each calculated in accordance with FASB ASC Topic 718. The assumptions made when calculating the grant date fair value of the performance-based restricted stock units are found in Note 5 (Equity Compensation Plans) to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2020. Assuming that maximum performance is achieved under the performance-based restricted stock units granted in 2020, the value at the grant date of these performance-based restricted stock units would have been as follows: Mr. Grimes — $4,625,185; Ms. Swinehart — $1,613,439; and Mr. Garrison — $2,423,753. The grant date fair value of the restricted stock awards granted during the year ended December 31, 2020 was calculated as the closing price of our common stock on the NYSE on the applicable date of grant multiplied by the number of shares granted. The value of awards granted to our Named Executive Officers in 2020 is reflected in the “2020 Grants of Plan-Based Awards” table.
|
(5)
|
Amounts reported in 2019 include the aggregate grant date fair value of performance-based restricted stock units and restricted stock awards granted during the year ended December 31, 2019, each calculated in accordance with FASB ASC Topic 718. The assumptions made when calculating the grant date fair value of the performance-based restricted stock units are found in Note 5 (Equity Compensation Plans) to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2019. The grant date fair value of the restricted stock awards granted during the year ended December 31, 2019 was calculated as the closing price of our common stock on the NYSE on the applicable date of grant multiplied by the number of shares granted.
|
(6)
|
Amounts reported in 2018 include the aggregate grant date fair value of performance-based restricted stock units and restricted stock awards granted during the year ended December 31, 2018, each calculated in accordance with FASB ASC Topic 718. The assumptions made when calculating the grant date fair value of the performance-based restricted stock units are found in Note 5 (Equity Compensation Plans) to our Consolidated Financial Statements in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2018. The grant date fair value of the restricted stock awards granted during the year ended December 31, 2018 was calculated as the closing price of our common stock on the NYSE on the applicable date of grant multiplied by the number of shares granted.
|
(7)
|
Ms. Swinehart’s base salary was increased to $475,000 from $290,000, effective February 6, 2018, in connection with her promotion to Executive Vice President, Chief Financial Officer and Treasurer.
|
|
2020 Grants of Plan-Based Awards
|
|
|
Name
|
| |
Grant
Date
|
| |
Date of
Approval
|
| |
Estimated Possible
Payouts Under Non-Equity
Incentive Plan Awards(1)
|
| |
Estimated Future
Payouts Under
Equity Incentive
Plan Awards(2)
|
| |
All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
|
| |
Grant
Date Fair
Value of
Stock And
Option
Awards
($)(3)
|
| ||||||||||||
|
Threshold
($)
|
| |
Target
($)
|
| |
Maximum
($)
|
| |
Threshold
(#)
|
| |
Target
(#)
|
| |
Maximum
(#)
|
| |||||||||||||||
|
Steven P. Grimes
|
| |
|
| |
|
| |
718,750
|
| |
1,250,000
|
| |
2,500,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
1/4/20
|
| |
7/22/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
61,688(4)
|
| |
806,262
|
| |||
|
1/4/20
|
| |
7/22/19
|
| |
|
| |
|
| |
|
| |
88,470
|
| |
176,939
|
| |
353,878
|
| |
—
|
| |
2,418,756
|
| |||
|
Julie M. Swinehart
|
| |
|
| |
|
| |
265,500
|
| |
450,000
|
| |
900,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
1/4/20
|
| |
7/22/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
21,519(4)
|
| |
281,253
|
| |||
|
1/4/20
|
| |
7/22/19
|
| |
|
| |
|
| |
|
| |
30,862
|
| |
61,723
|
| |
123,446
|
| |
—
|
| |
843,753
|
| |||
|
Shane C. Garrison
|
| |
|
| |
|
| |
345,150
|
| |
585,000
|
| |
1,170,000
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
1/4/20
|
| |
7/22/19
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
32,326(4)
|
| |
422,501
|
| |||
|
1/4/20
|
| |
7/22/19
|
| |
|
| |
|
| |
|
| |
46,361
|
| |
92,722
|
| |
185,444
|
| |
—
|
| |
1,267,510
|
|
(1)
|
Reflects the possible payouts of annual cash incentive compensation. “Threshold” amounts represent amounts that would be earned at the threshold level, which represents 50% of the target amounts for the portion of annual cash incentive compensation that was based on company goals and 80% of the target amounts for the portion of annual cash incentive compensation that was based on individual goals. The actual amounts that were paid are set forth in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” above. See also, “— Compensation Discussion and Analysis — Incentive Compensation — Annual Cash Incentive Compensation.”
|
(2)
|
Reflects performance-based restricted stock units granted during 2020. See “— Compensation Discussion and Analysis — Incentive Compensation — Long-Term Equity Incentive Compensation — Performance-Based Restricted Stock Unit Awards.”
|
(3)
|
Amounts disclosed in this column for equity awards are computed in accordance with FASB ASC Topic 718.
|
(4)
|
Represents shares of restricted stock granted as incentive compensation for 2020. The shares granted to Messrs. Grimes and Garrison and Ms. Swinehart are subject to vesting in equal installments on each of January 4, 2021, 2022 and 2023, subject to continued employment through such dates.
|
|
Outstanding Equity Awards at Fiscal Year-End 2020
|
|
|
|
| |
Stock Awards
|
| |||||||||
|
|
| |
Number of
Shares or
Units of Stock
That Have Not
Vested (#)(1)
|
| |
Market Value
of Shares or
Units of Stock
That Have Not
Vested ($)(2)
|
| |
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested (#)(3)
|
| |
Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested ($)(2)
|
|
|
Steven P. Grimes
|
| |
241,229
|
| |
2,064,920
|
| |
386,980
|
| |
3,312,549
|
|
|
Julie M. Swinehart
|
| |
61,432
|
| |
525,858
|
| |
124,907
|
| |
1,069,204
|
|
|
Shane C. Garrison
|
| |
126,537
|
| |
1,083,157
|
| |
201,329
|
| |
1,723,376
|
|
(1)
|
For Messrs. Grimes and Garrison and Ms. Swinehart, includes the following:
|
|
|
| |
2020
Award(a)
|
| |
2019
Award(b)
|
| |
Earned 2018
Performance-
Based
Restricted Stock
Unit Award(c)
|
| |
2018
Award(d)
|
| |
Total
|
|
|
Steven P. Grimes
|
| |
61,688
|
| |
46,933
|
| |
114,960
|
| |
17,648
|
| |
241,229
|
|
|
Julie M. Swinehart
|
| |
21,519
|
| |
14,118
|
| |
21,734
|
| |
4,061
|
| |
61,432
|
|
|
Shane C. Garrison
|
| |
32,326
|
| |
24,268
|
| |
60,635
|
| |
9,308
|
| |
126,537
|
|
(a)
|
Represents unvested portion of restricted stock awards granted for 2020, with one-third scheduled to vest on each of January 4, 2021, 2022 and 2023, subject to continued employment through such dates.
|
(b)
|
Represents unvested portion of restricted stock awards granted for 2019, with one-third having vested on January 4, 2020 and one-third scheduled to vest on each of January 4, 2021 and 2022, subject to continued employment through such dates.
|
(c)
|
Represents unvested restricted stock issued in connection with performance-based restricted stock unit awards granted in 2018 with respect to the performance period that began on January 1, 2018 and ended on December 31, 2020 (the “2018 Awards”). The 2018 Awards were earned at 115.0% of target performance based on our relative performance over the three-year performance period and two-thirds of the earned amount was issued in restricted stock that is scheduled to vest on December 31, 2021, subject to continued employment through such date. One-third of the earned amount was issued in common stock and, therefore, is not included in this table. These performance-based restricted stock unit awards provided our Named Executive Officers the ability to earn and receive shares after the end of the three-year performance period based on our total stockholder return over the performance period compared to peers listed in the NAREIT Shopping Center Index.
|
(d)
|
Represents unvested portion of restricted stock awards granted for 2018, with one-third having vested on each of January 4, 2019 and 2020 and one-third scheduled to vest on January 4, 2021, subject to continued employment through such date.
|
(2)
|
Market value is based on a price of $8.56 per share, which was the closing price of our common stock on the NYSE on December 31, 2020.
|
(3)
|
Reflects performance-based restricted stock units that were outstanding and for which the performance period had not ended as of December 31, 2020. The number of these performance-based restricted stock units held by each of Messrs. Grimes and Garrison and Ms. Swinehart that were outstanding as of December 31, 2020, which equals the target amount that could be earned, is set forth in the table below. In accordance with SEC rules, the number of units set forth in the table above includes the target amount of the 2020 and 2019 performance-based restricted stock units (i.e., 100% of the target amount).
|
|
|
| |
2020 Performance-
Based Restricted
Stock Unit Award(a)
|
| |
2019 Performance-
Based Restricted
Stock Unit Award(b)
|
|
|
Steven P. Grimes
|
| |
176,939
|
| |
210,041
|
|
|
Julie M. Swinehart
|
| |
61,723
|
| |
63,184
|
|
|
Shane C. Garrison
|
| |
92,722
|
| |
108,607
|
|
(a)
|
Represents performance-based restricted stock units granted in 2020 (the “2020 Awards”). Each 2020 Award provides our Named Executive Officers the ability to earn and receive shares of common stock equal to between 50% and 200% of the
|
(b)
|
Represents performance-based restricted stock units granted in 2019 (the “2019 Awards”). Each 2019 Award provides our Named Executive Officers the ability to earn and receive shares of common stock equal to between 50% and 200% of the number of restricted stock units subject to the award after the end of the three-year performance period that began on January 1, 2019 through December 31, 2021 based on our total stockholder return over the performance period compared to peers listed in the NAREIT Shopping Center Index, with one-third of the amount earned to be issued in shares of common stock and two-thirds to be issued in restricted shares of common stock that will vest one year later, subject to continued employment through such date. Assuming our relative performance for the three-year performance period applicable to the 2019 Awards continues to be the same as we experienced from the beginning of the performance period through December 31, 2020, the 2019 Awards would have been earned at a level between threshold and target performance. In accordance with SEC rules, the 2019 Awards are reflected in the table at target performance (i.e., 100% of the target amount).
|
|
2020 Option Exercises and Stock Vested
|
|
|
Name
|
| |
Number of
Shares Acquired
on Vesting (#)
|
| |
Value Realized
on Vesting ($)
|
|
|
Steven P. Grimes
|
| |
231,973
|
| |
2,344,133
|
|
|
Julie M. Swinehart
|
| |
31,580
|
| |
348,176
|
|
|
Shane C. Garrison
|
| |
122,593
|
| |
1,237,271
|
|
▪
|
For Mr. Grimes, a cash payment equal to two times (or, if the termination occurs in connection with or within two years after a change-in-control, three times) the sum of (i) Mr. Grimes’ annual base salary at the rate then in effect, without giving effect to any reduction in the base salary rate amounting to good reason and (ii) an amount equal to the greater of (a) Mr. Grimes’ target annual cash bonus opportunity or (b) Mr. Grimes’ annual cash bonus for the most recent completed year for which an annual cash bonus had been determined;
|
▪
|
For our other Named Executive Officers, a cash payment equal to one and one-half times (or, if the termination occurs in connection with or within two years after a change-in-control, two times) the sum of (i) such Named Executive Officer’s annual base salary at the rate then in effect, without giving effect to any reduction in the base salary rate amounting to good reason and (ii) an amount equal to the greater of (a) such Named Executive Officer’s target annual cash bonus opportunity or (b) such Named Executive Officer’s annual cash bonus for the most recent completed year for which an annual cash bonus had been determined;
|
▪
|
all unpaid annual bonus amounts earned during the year prior to the year in which the termination occurs and a pro-rata cash bonus, at target, for the year in which the termination occurs;
|
▪
|
acceleration of vesting of unvested equity awards that are only subject to vesting conditions based on continued employment;
|
▪
|
retention of outstanding equity awards that remain subject to performance-based vesting conditions, with the earning of such awards to be based on achievement of the original performance-based vesting conditions in the same manner as if such termination had not occurred; provided that the portion of each such equity award that is earned will be prorated based on the portion of the performance period that elapsed through the date of termination unless such termination occurred in connection with a change-in-control; and
|
▪
|
continuation of healthcare benefits, or cash payments equal to the premiums for healthcare benefits, for the period of cash severance earned under the retention agreement.
|
|
|
| |
Involuntary
Termination
Without
Cause/For
Good Reason
(Non-change-
in-Control) ($)
|
| |
Involuntary
Termination
Without
Cause/For
Good Reason
(Change-in-
Control) ($)
|
| |
Death or
Disability ($)
|
| |
Change-in-
Control (No
Termination) ($)
|
|
|
Steven P. Grimes(1)(2)
|
| |
|
| |
|
| |
|
| |
|
|
|
Cash Severance
|
| |
6,796,000
|
| |
9,569,000
|
| |
—
|
| |
—
|
|
|
Benefits Continuation(3)
|
| |
30,140
|
| |
45,210
|
| |
—
|
| |
—
|
|
|
Unvested Restricted Stock(4)
|
| |
2,064,920
|
| |
2,064,920
|
| |
2,064,920
|
| |
—
|
|
|
Unvested RSUs
|
| |
—(5)
|
| |
2,969,662(6)
|
| |
—(5)
|
| |
1,136,127(7)
|
|
|
Total
|
| |
8,891,060
|
| |
14,648,792
|
| |
2,064,920
|
| |
1,136,127
|
|
|
Julie M. Swinehart(1)(2)
|
| |
|
| |
|
| |
|
| |
|
|
|
Cash Severance
|
| |
1,932,000
|
| |
2,426,000
|
| |
—
|
| |
—
|
|
|
Benefits Continuation(3)
|
| |
34,975
|
| |
46,633
|
| |
—
|
| |
—
|
|
|
Unvested Restricted Stock(4)
|
| |
525,858
|
| |
525,858
|
| |
525,858
|
| |
—
|
|
|
Unvested RSUs
|
| |
—(5)
|
| |
945,883(6)
|
| |
—(5)
|
| |
360,379(7)
|
|
|
Total
|
| |
2,492,833
|
| |
3,944,374
|
| |
525,858
|
| |
360,379
|
|
|
Shane C. Garrison(1)(2)
|
| |
|
| |
|
| |
|
| |
|
|
|
Cash Severance
|
| |
2,809,500
|
| |
3,551,000
|
| |
—
|
| |
—
|
|
|
Benefits Continuation(3)
|
| |
34,975
|
| |
46,633
|
| |
—
|
| |
—
|
|
|
Unvested Restricted Stock(4)
|
| |
1,083,157
|
| |
1,083,157
|
| |
1,083,157
|
| |
—
|
|
|
Unvested RSUs
|
| |
—(5)
|
| |
1,543,158(6)
|
| |
—(5)
|
| |
590,162(7)
|
|
|
Total
|
| |
3,927,632
|
| |
6,223,948
|
| |
1,083,157
|
| |
590,162
|
|
(1)
|
The amounts described do not include payments and benefits to the extent they have been earned prior to the termination of employment or are provided on a non-discriminatory basis to salaried employees upon termination of employment. These include:
|
▪
|
Accrued salary and vacation pay;
|
▪
|
Distribution of plan balances under our 401(k) plan;
|
▪
|
Life insurance proceeds in the event of death; and
|
▪
|
Disability insurance payouts in the event of disability.
|
(2)
|
In the event that any payments and benefits to be paid or provided to a Named Executive Officer would be subject to “parachute payment” excise taxes under the Internal Revenue Code of 1986, as amended, such Named Executive Officer’s payments and benefits will be reduced to the extent necessary to avoid such excise taxes, but only if such a reduction of pay or benefits would result in a greater after-tax benefit to such Named Executive Officer.
|
(3)
|
Benefits continuation amounts are based on the actual expense for financial reporting purposes for covering an employee under the medical plan elected by such Named Executive Officer at the date of termination for the duration of his or her severance period.
|
(4)
|
For all Named Executive Officers, outstanding shares of restricted stock fully vest upon a Named Executive Officer’s termination upon death or disability or termination by us without cause. In addition, pursuant to the retention agreements we have entered into with each of our Named Executive Officers, outstanding shares of restricted stock will also fully vest upon a termination by any such Named Executive Officer for good reason. For all Named Executive Officers, for the performance based-restricted stock units granted in 2018, which were earned as of December 31, 2020, outstanding shares of restricted stock fully vest upon termination without cause or a resignation for good reason or their termination upon death or disability. As of December 31, 2020, Messrs. Grimes and Garrison and Ms. Swinehart held unvested restricted stock, including unvested restricted stock earned in connection with performance-based restricted stock units granted in 2018, as follows: Mr. Grimes — 241,229 shares; Ms. Swinehart — 61,432; and Mr. Garrison — 126,537 shares. For purposes of the table above, the value of the equity awards that vest are based on the value of unvested awards set forth in the “Outstanding Equity Awards at Fiscal Year-End 2020” table.
|
(5)
|
Does not include any amounts because the performance-based restricted stock units will remain subject to the achievement of performance-based vesting conditions through the end of the performance periods. Any amounts earned would be prorated to reflect the length of service by the Named Executive Officer during the relevant performance period.
|
(6)
|
Represents (i) the number of performance-based restricted stock units granted in 2019 and 2020 that would have vested multiplied by $8.56, which was the closing price of our common stock on the NYSE on December 31, 2020, plus (ii) the value of the shares of common stock that would have been issued to pay the accumulated value of dividends that would have been paid during the performance period on the shares earned.
|
(7)
|
Represents (i) the number of performance-based restricted stock units granted in 2019 and 2020 that would have vested multiplied by $8.56, which was the closing price of our common stock on the NYSE on December 31, 2020, plus (ii) the value of the shares of common stock that would have been issued to pay the accumulated value of dividends that would have been paid during the performance period on the shares earned. Does not include the portion of the performance-based restricted stock units granted in 2019 and 2020, which represents two-thirds of each award, that would have vested but for the fact that such units remain subject to continued employment requirements through the end of the original performance period in order to vest.
|
▪
|
there are downside risks associated with pursuing poor business strategies or strategic alternatives, including failure to meet goals under our incentive compensation program and decline in value of shares of restricted stock and performance-based restricted stock units previously granted under our incentive compensation program that are subject to various vesting requirements;
|
▪
|
our executive compensation program has a significant focus on long-term equity compensation;
|
▪
|
the goals for our incentive compensation program are aligned with long-term performance metrics, reflect a balanced mix of individual and company goals aligned with our strategic objectives, are both quantitative and qualitative and provide a comprehensive framework for assessing performance;
|
▪
|
short-term or annual incentive compensation opportunities are capped and therefore do not incentivize employees to maximize short-term performance at the expense of long-term performance;
|
▪
|
our compensation levels and opportunities are in line with appropriate competitive practice; and
|
▪
|
our executives and directors are expected to maintain an ownership interest in the Company, which creates an alignment of their interests with those of our stockholders.
|
|
Position
|
| |
Equity
Ownership Guideline
|
|
|
Non-employee director
|
| |
$375,000
|
|
|
Chief Executive Officer
|
| |
5x annual base salary
|
|
|
Other Named Executive Officers
|
| |
3x annual base salary
|
|
|
Plan Category
|
| |
Number of
Shares of
Common Stock
to be Issued
Upon Exercise
of Outstanding
Options,
Warrants
and Rights
|
| |
Weighted
Average
Exercise Price
of Outstanding
Options,
Warrants
and Rights
|
| |
Number of Shares
of Common Stock
Remaining
Available for Future
Issuance under
Equity
Compensation
Plans (excluding
securities
referenced
in Column (a)
|
|
|
|
| |
(a)
|
| |
(b)
|
| |
(c)
|
|
|
Equity Compensation Plans Approved by
Stockholders
|
| |
1,956,728(1)(2)
|
| |
$15.12 (3)
|
| |
5,053,090(4)
|
|
|
Equity Compensation Plans not Approved by Stockholders
|
| |
N/A
|
| |
N/A
|
| |
N/A
|
|
(1)
|
Includes (i) 1,946,728 shares of common stock issuable pursuant to performance-based restricted stock units outstanding as of December 31, 2020 at the maximum level of performance and (ii) 10,000 shares of common stock issuable upon the exercise of outstanding options (all of which are vested and exercisable).
|
(2)
|
Excludes shares of common stock issuable to pay accrued dividend equivalents on earned performance-based restricted stock units.
|
(3)
|
Because there is no exercise price associated with the performance-based restricted stock units, such units are not included in the weighted average exercise price calculation.
|
(4)
|
Represents shares of common stock remaining available for issuance under our Amended and Restated 2014 Long-Term Equity Compensation Plan.
|
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|
|
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
|
|
|
| |
Total Common Stock
|
| |||
|
Name and Address of Beneficial Owners(1)
|
| |
Number of
Shares(2)
|
| |
Percent of
Class
|
|
|
Directors, Director Nominees and Named Executive Officers
|
| |
|
| |
|
|
|
Gerald M. Gorski(3)
|
| |
66,322
|
| |
*
|
|
|
Bonnie S. Biumi
|
| |
63,116
|
| |
*
|
|
|
Frank A. Catalano, Jr.(4)
|
| |
83,438
|
| |
*
|
|
|
Robert G. Gifford
|
| |
52,832
|
| |
*
|
|
|
Richard P. Imperiale(4)
|
| |
96,209
|
| |
*
|
|
|
Peter L. Lynch
|
| |
66,617
|
| |
*
|
|
|
Thomas J. Sargeant
|
| |
89,399
|
| |
*
|
|
|
Steven P. Grimes
|
| |
968,399
|
| |
*
|
|
|
Shane C. Garrison
|
| |
506,723
|
| |
*
|
|
|
Julie M. Swinehart
|
| |
141,659
|
| |
*
|
|
|
All directors and executive officers as a group (10 persons)
|
| |
2,134,714
|
| |
*
|
|
|
5% Holders
|
| |
|
| |
|
|
|
Blackrock, Inc.(5)
|
| |
40,606,751
|
| |
18.91%
|
|
|
The Vanguard Group, Inc.(6)
|
| |
33,015,662
|
| |
15.38%
|
|
|
State Street Corporation(7)
|
| |
11,008,911
|
| |
5.13%
|
|
|
LaSalle Investment Management Securities, LLC(8)
|
| |
10,923,587
|
| |
5.09%
|
|
*
|
Less than 1% of the total shares of common stock outstanding.
|
(1)
|
The address of each of the persons listed below is 2021 Spring Road, Suite 200, Oak Brook, Illinois 60523.
|
(2)
|
Beneficial ownership includes outstanding shares and shares which are not outstanding that any person has the right to acquire within 60 days after the date of this table. However, any such shares which are not outstanding are not deemed to be outstanding for the purpose of computing the percentage of outstanding shares beneficially owned by any other person. Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the persons named in the table have sole voting and investing power with respect to all shares beneficially owned by them.
|
(3)
|
Includes 2,000 shares of common stock issuable upon the exercise of options, which are currently exercisable or will become exercisable within 60 days after the date of this table.
|
(4)
|
Includes 4,000 shares of common stock issuable upon the exercise of options, which are currently exercisable or will become exercisable within 60 days after the date of this table.
|
(5)
|
Information regarding BlackRock, Inc. (“BlackRock”) is based on a Schedule 13G/A filed by BlackRock with the SEC on January 25, 2021. BlackRock’s address is 55 East 52nd Street, New York, NY 10055. The Schedule 13G/A indicates that BlackRock has sole voting power with respect to 39,789,490 shares of common stock, sole dispositive power with respect to 40,606,751 shares of common stock and shared voting and/or dispositive power with respect to none of the shares of common stock. The percentage of beneficial ownership has been adjusted to reflect our actual shares of common stock outstanding as of the close of business on March 23, 2021.
|
(6)
|
Information regarding The Vanguard Group, Inc. (“Vanguard”) is based on a Schedule 13G/A filed by Vanguard with the SEC on February 10, 2021. Vanguard’s address is 100 Vanguard Blvd., Malvern, PA 19355. The Schedule 13G/A indicates that Vanguard has sole voting power with respect to none of the shares of common stock, shared voting power with respect to 679,221 shares of common stock, sole dispositive power with respect to 32,169,388 shares of common stock and shared dispositive power with respect to 846,274 shares of common stock. The percentage of beneficial ownership has been adjusted to reflect our actual shares of common stock outstanding as of the close of business on March 23, 2021.
|
(7)
|
Information regarding State Street Corporation (“State Street”) is based on a Schedule 13G filed by State Street with the SEC on February 11, 2021. State Street’s address is State Street Financial Center, One Lincoln Street, Boston, MA 02111. The Schedule 13G indicates that State Street has sole voting power with respect to none of the shares of common stock, shared voting power with respect to 9,707,204 shares of common stock, sole dispositive power with respect to none of the shares of common stock and shared dispositive power with respect to 11,008,911 shares of common stock. The percentage of beneficial ownership has been adjusted to reflect our actual shares of common stock outstanding as of the close of business on March 23, 2021.
|
(8)
|
Information regarding LaSalle Investment Management Securities, LLC (“LaSalle”) is based on a Schedule 13G filed by LaSalle with the SEC on February 12, 2021. LaSalle’s address is 100 East Pratt Street, Baltimore, MD 21202. The Schedule 13G indicates that LaSalle has sole voting power with respect to 733,408 shares of common stock, shared voting power with respect to none of the shares of common stock, sole dispositive power with respect to 10,190,179 shares of common stock and shared dispositive power with respect to none of the shares of common stock. The percentage of beneficial ownership has been adjusted to reflect our actual shares of common stock outstanding as of the close of business on March 23, 2021.
|
|
PROPOSAL 2 — ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION
|
|
|
PROPOSAL 3 — RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
|
|
|
|
| |
2020
|
| |
2019
|
|
|
Audit Fees(1)
|
| |
$1,658,890
|
| |
$1,290,575
|
|
|
Audit-Related Fees
|
| |
—
|
| |
—
|
|
|
All Other Fees
|
| |
—
|
| |
—
|
|
|
Tax Fees(2)
|
| |
218,426
|
| |
120,260
|
|
|
Total Fees
|
| |
$1,877,316
|
| |
$1,410,835
|
|
(1)
|
Audit fees include the (i) financial statement audit, (ii) audit of internal controls over financial reporting and (iii) issuance of independent registered public accounting firm consents and comfort letters, as applicable.
|
(2)
|
Tax fees primarily consist of fees for the review of federal and state income tax returns.
|
|
MISCELLANEOUS AND OTHER MATTERS
|
|
Oak Brook, Illinois
|
| |
By the order of the Board of Directors,
|
|
| |
/s/ Ann M. Sharp Hult
|
March 31, 2021
|
| |
Ann M. Sharp Hult
Secretary
|