UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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CBL & ASSOCIATES PROPERTIES, INC.
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April 23, 2021
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders which will be held at Embassy Suites, 2321 Lifestyle Way, Chattanooga, Tennessee, on Thursday,Tuesday, May 9, 201925, 2021 at 4:00 p.m. (EDT).
The Notice and Proxy Statement on the following pages contain details concerning the business to come before the meeting. Management will report on current operations and there will be an opportunity for discussion concerning the Company and its activities. Please sign and return your proxy card in the enclosed envelope, or vote your shares by telephone or via the Internet, to ensure that your shares will be represented and voted at the meeting even if you cannot attend.attend via the live webcast. Even if you plan to attend the meeting via the live webcast, you are urged to sign and return the enclosed proxy card (or voting instruction form, as applicable), or to vote your shares by telephone or via the Internet in accordance with the instructions on the enclosed proxy card.
Thank you for your support.
Sincerely, | ||
| ||
Chairman of the Board |
CBL & ASSOCIATES PROPERTIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 9, 2019
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of CBL & Associates Properties, Inc., a Delaware corporation (the “
Company”), will be held1. | To act on the re-election of the Board of Directors’ |
2. | To act upon a proposal to ratify the selection of Deloitte & Touche LLP (“ Deloitte”) as the independent registered public accountants for the Company’s fiscal year ending December 31, |
3. | To act upon a proposal for the advisory approval of the compensation of our Named Executive Officers as set forth herein (“ Proposal 3”); and |
4. | To consider and act upon any other matters which may properly come before the meeting or any adjournment thereof. |
In light of ongoing public health concerns regarding the coronavirus (COVID-19) pandemic, recommendations and guidelines from the CDC with respect to group gatherings, as well as orders from other federal, state and local authorities, and to support the health and well‑being of our shareholders, this year’s meeting will be conducted virtually. You are entitled to attend and participate in the Annual Meeting only if you were a shareholder of record as of the record date or hold a valid proxy for the meeting. Those shareholders will be able to attend the virtual Annual Meeting, vote their shares and submit questions during the meeting via live audio webcast by visiting: www.virtualshareholdermeeting.com/CBL2021. To participate, you will need the 16-digit control number included in your proxy materials or on your proxy card. Please note that there will be no in-person meeting for you to attend.
In accordance with the provisions of the Company’s Bylaws, the Board of Directors has fixed the close of business on Friday, March 15, 2019,26, 2021, as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting.
Your attention is directed to the accompanying Proxy Statement.
Your vote is first being mailed to our shareholders of record as of the record date and our proxy materials are first being posted on the website referenced in the Notice (www.proxyvote.com). As more fully described in the Notice, all shareholders may choose to access our proxy materials on the website referred to in the Notice or may request a printed set of our proxy materials. In addition, the Notice and website provide information regarding how you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. For those shareholders who previously requested to receive proxy materials in printed form by mail or electronically by email on an ongoing basis, you will receive those materials as you requested.
By Order of the Board of Directors |
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Chief Executive Officer |
Chattanooga, Tennessee
April 23, 2021
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This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied in this summary to help you find further information in this Proxy Statement.
Our 20192021 Annual Meeting
Time and Date | 4:00 p.m. (EDT) on | |
Location | The annual meeting will be held virtually via live webcast. You can join the meeting by visiting www.virtualshareholdermeeting.com/CBL2021 and entering the 16-digit control number listed on your proxy card. | |
Record Date | March | |
Voting | Each share is entitled to one vote on each matter to be voted upon at our Annual Meeting. You can vote by proxy utilizing any of the following methods: | |
•Internet: Go to the website shown on your Proxy or voting instruction form until 11:59 p.m. Eastern Time, the day before our Annual Meeting. •Telephone: As shown on the Proxy or voting instruction form you received until 11:59 p.m. Eastern Time, the day before our Annual Meeting. •Mail: Mark, sign, date and promptly return your •In Person at the Virtual Annual Meeting: You may vote in person during the virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/CBL2021 and entering the 16-digit control number found on your proxy card or on the voting instruction form you received from your broker. | ||
Internet Availability | This Notice of Annual Meeting and Proxy Statement, as well as our Annual Report for the Company’s fiscal year ended December 31, internet at: www.proxyvote.com. | |
This Proxy Statement was first provided to shareholders on or about April 23, 2021.
Annual Meeting Proposals and Board Recommendations
| Board | Page |
Proposal 1 – Election of Directors | For all nominees | 6 |
Proposal 2 – Ratification of the selection of Deloitte as our independent registered public accounting firm for 2021 | For | 73 |
Proposal 3 – Advisory Vote to Approve Executive Compensation | For | 75 |
Transaction of any other business that properly comes before our Annual Meeting | ||
Director Nominees (Page 7)
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| Board | Other Public |
Charles B. Lebovitz | 84 | 1993 | Chairman of the Board | No | Executive* | None |
Stephen D. Lebovitz | 60 | 1993 | Chief Executive Officer | No | Executive, Capital Allocation | None |
A. Larry Chapman | 74 | 2013 | Retired Executive Vice President and Head of Commercial Real Estate, | Yes | Audit ($)*, Compensation | Realty Income Corporation |
66 | 2005 | Retired Chief Executive Officer, Urban Shopping Centers, Inc. | Yes | Audit ($), Compensation* | First Industrial Realty Trust | |
John D. Griffith | 59 | 2015 | Senior Vice President of | Yes | Compensation, Nominating/ Corporate Governance | None |
Richard J. Lieb | 61 | 2016 | Managing Director and | Yes | Nominating/ Corporate Governance, Capital Allocation | AvalonBay Communities, Inc.; |
Kathleen M. Nelson | 75 | 2009 | President and Founder, | Yes | Nominating/ Corporate Governance*, | Apartment Investment and Management Company; |
Carolyn B. Tiffany | 54 | 2019 | Retired President of Winthrop Realty Trust | Yes | Audit ($), Compensation, Special Committee | None |
Scott D. Vogel | 45 | 2020 | Managing Member of Vogel Partners LLC | Yes | Special Committee | Alpha Metallurgical Resources, Inc.; |
*Denotes Committee Chairman ($)Audit Committee Financial Expert | ||||||
| Name | Age | Director Since | Occupation | Independent (Yes/No) | Board Committee Memberships | Other Public Company Boards |
Charles B. Lebovitz | 82 | 1993 | Chairman of the Board of the Company | No | Executive* | None |
Stephen D. Lebovitz | 58 | 1993 | Chief Executive Officer of the Company | No | Executive | None |
A. Larry Chapman | 72 | 2013 | Retired Executive Vice President and Head of Commercial Real Estate, Wells Fargo & Co. | Yes | Audit ($)*, Compensation | Realty Income Corporation |
Matthew S. Dominski | 64 | 2005 | Retired Chief Executive Officer, Urban Shopping Centers, Inc. | Yes | Audit ($), Compensation* | First Industrial Realty Trust |
John D. Griffith | 57 | 2015 | Senior Vice President of Real Estate and Development of Life Time, Inc. Managing Partner of Griffith Real Estate LLC Retired Executive Vice President of Property Development, Target Corporation | Yes | Compensation, Nominating/ Corporate Governance | None |
| Richard J. Lieb | 59 | 2016 | Managing Director and Chairman of Real Estate of Greenhill & Co., LLC | Yes | Audit ($), Nominating/ Corporate Governance | AvalonBay Communities, Inc.; VEREIT, Inc. |
Kathleen M. Nelson | 73 | 2009 | President and Founder, KMN Associates LLC | Yes | Nominating/ Corporate Governance*, Executive | Apartment Investment and Management Company; Dime Community Bancshares, Inc. |
* Denotes Committee Chairman ($) Audit Committee Financial Expert | ||||||
Ratification of Auditors (Page 76)
We are asking our shareholders to ratify the appointment of Deloitte as the independent registered public accounting firm to serve as our auditors for the year ending December 31, |
Say-on-Pay (Page 78)
Consistent with our shareholders’ preference, our Board of Directors is providing shareholders with an annual vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in our Proxy Statement. Please review our Compensation Discussion and Analysis (beginning on page |
PROXY STATEMENT
CBL & ASSOCIATES PROPERTIES, INC.
2030 Hamilton Place Blvd.
Suite 500
CBL Center
Chattanooga, Tennessee 37421
(423) 855-0001
ANNUAL MEETING OF SHAREHOLDERS
May 9, 2019
The enclosed proxy is solicited by and on behalf of the Board of Directors of CBL & Associates Properties, Inc., a Delaware corporation (the “
Company” or “CBL”), for use at the annual meeting of shareholders of the Company (the “Annual Meeting”) to be heldIn light of ongoing public health concerns regarding the coronavirus (COVID-19) pandemic, recommendations and guidance from the CDC with respect to group gatherings in addition to orders from other federal, state and local authorities, and to support the health and well-being of our shareholders, this year’s meeting will be conducted virtually. You are entitled to attend and participate in the Annual Meeting only if you were a shareholder of record as of the record date or hold a valid proxy for the meeting. Those shareholders will be able to attend the virtual Annual Meeting, vote their shares and submit questions during the meeting via live audio webcast by visiting: www.virtualshareholdermeeting.com/CBL2021
Important Notice Regarding the of Internet Availability of Proxy Materials
The Company’s Notice of Annual Meeting of Shareholders (the “
Only shareholders of record at the close of business on March 15, 201926, 2021 are entitled to vote on the matters to be presented at the Annual Meeting. The number of shares of the Company’s common stock,
The presence in person or by proxy of holders of record of a majority of the outstanding shares of Common Stock is required for a quorum to transact business at the Annual Meeting with respect to those matters requiring approval by the holders of Common Stock, but if a quorum should not be present, the Annual Meeting may be adjourned from time to time until a quorum is obtained.
The vote required to approve each of the proposals at the Annual Meeting is as follows:
The affirmative vote of the holders of a plurality of the shares of Common Stock present or represented at the Annual Meeting is required for the election of the Board of Directors’ nominees for re-election as directors under Proposal 1.
The affirmative vote of a majority of the votes cast by the holders of shares of Common Stock present or represented at the Annual Meeting is required for approval of:
o | Proposal 2, ratification of the selection of Deloitte as the independent registered public accountants (referred to herein as the “independent registered public accountants” or the “independent auditors”) for the Company’s fiscal year ending December 31, |
o | Proposal 3, the advisory resolution approving the compensation of our named executive officers. |
Each share of Common Stock is entitled to one vote with respect to those matters upon which such share is to be voted. No cumulative voting rights are authorized and dissenters’ rights are not applicable to these matters.
While the Company’s directors will be elected by plurality vote at the Annual Meeting, as further described below under “Corporate Governance Matters – Additional Policy Statements,” the Board of Directors has implemented a majority voting policy under our Corporate Governance Guidelines, which provides that a director who is nominated in an uncontested election, and who receives a greater number of votes “withheld” from his or her election than votes “for” such election, is required to immediately tender his or her resignation to the Board of Directors for consideration.
Under New York Stock Exchange (“
NYSE”) Rule 452, NYSE member organizations are prohibited from giving a proxy to vote with respect to certain matters, including matters involving (i) an election of directors, (ii) any proposal related to executive compensation (including any shareholder advisory votes on the approval of executive compensation) or (iii) an authorization to implement an equity compensation plan, or any material revision to the terms of any existing equity compensation plan, without receiving voting instructions from a beneficial owner. Therefore, brokers will not be entitled to vote shares at the Annual Meeting with respect to Proposal 1 or Proposal 3 without instructions by the beneficial owner of the shares. Beneficial owners of shares held in broker accounts are advised that, if they do not timely provide instructions to their broker, their shares will not be voted in connection with the election of directors (Proposal 1), or with taking action on Proposal 3.If your shares are registered directly in your name with our transfer agent, Computershare, you are considered the shareholder of record with respect to those shares and you are receiving a proxy card for the virtual Annual Meeting. If your shares are held in an account at a broker, bank or other similar organization, you are the beneficial owner of shares held in “street name” and you are receiving a voting instruction form. Holders of our Common Stock on the March 26, 2021 record date have three ways to vote: by mail, by phone and via the Internet using a computer. Shareholderscomputer:
By Mail: you may complete, sign and return theyour proxy card (or the voting instruction form received from your broker or bank, as applicable) by pre-paid mail. Alternatively, shareholders
By Telephone: you also may use the toll-free telephone number indicated on the Noticeproxy card or proxy cardvoting instruction form to vote by telephone oruntil 11:59 p.m. Eastern Time the day before our Annual Meeting.
Via the Internet: you also may visit the website indicated on the Noticeproxy card or proxy cardvoting instruction form to vote via the Internet.
You must enter the 16-digit control number found on your proxy card (or voting instruction form) in order to vote in advance of the Annual Meeting as described above, and to vote and/or to participate during the Annual Meeting by visiting: www.virtualshareholdermeeting.com/CBL2021. (If you are a “street name” holder and previously requested a legal proxy from your broker, bank or other similar organization, you may also use such legal proxy to vote at and/or participate in the Annual Meeting.) Whether or not you plan to attend the virtual Annual Meeting, we urge you to vote in advance of the Annual Meeting by one of the methods described above.
As noted above, under the rules of the NYSE, on certain routine matters brokers may, at their discretion, vote shares they hold in “street name” on behalf of beneficial owners who have not returned voting instructions to the brokers. Routine matters include the ratification of the selection of the independent registered public accountants (Proposal 2). In instances – such as voting on Proposals 1 and 3 at the Annual Meeting – where brokers are prohibited from exercising discretionary authority (so-called “broker non-votes”), the shares for which they have not received voting instructions are counted as present for the purpose of determining whether or not a quorum exists at the Annual Meeting, but are not included in the vote totals. Because broker non-votes are not included in the vote, they are not counted as votes cast “for” or “against” a proposal. Accordingly, assuming the presence of a quorum at the Annual Meeting, abstentions and broker non-votes will have no effect on the election of any nominee for director under Proposal 1, so long as such nominee receives any affirmative votes, and also will have no effect on the ratification of the selection of the independent registered public accountants under Proposal 2, or on the advisory resolution approving compensation of our named executive officers under Proposal 3.
Unless contrary instructions are indicated on the accompanying form of proxy, the shares represented thereby will be voted by the persons named as proxies on such form
FOR the election of the Board of Directors’ nominees for re-election as directors of the Company as described in Proposal 1; FOR ratification of the selection of Deloitte as the independent registered public accountants for the Company’s fiscal year ending December 31,ELECTION OF DIRECTORS
General
Our Company’s Board of Directors, upon the recommendation of our Nominating/Corporate Governance Committee, has nominated the Company’s sevennine current directors for re-election by shareholders at this year’s Annual Meeting. Under our Amended and Restated Certificate of Incorporation as amended (the “
Our Board of Directors has delegated to the Nominating/Corporate Governance Committee, pursuant to the provisions of such Committee’s Charter and our Company’s Corporate Governance Guidelines, the responsibility for evaluating and recommending to the Board candidates to be considered as nominees for election as directors of our Company. In discharging these responsibilities, the
Nominating/Corporate Governance Committee may solicit recommendations from any or all of the following sources: the Independent Directors, the Chairman of the Board, the Chief Executive Officer, other executive officers, third-party search firms or any other source it deems appropriate. The Nominating/Corporate Governance Committee’s criteria for the evaluation and selection of director candidates are described in more detail below under “Board of Directors’ Meetings and Committees – Nominating/Corporate Governance Committee.”
Our financial and operating results during 2020 were heavily impacted by the temporary closure of our portfolio for a significant period due to government mandates and operating restrictions related to the COVID-19 pandemic. Beginning on November 1, 2020, the Company and CBL & Associates Limited Partnership, a Delaware limited partnership (the Company’s “Operating Partnership”), together with certain of its direct and indirect subsidiaries (collectively, the “Debtors”) commenced the filing of voluntary petitions (the “Chapter 11 Cases”) under chapter 11 of title 11 (“Chapter 11”) of the United States Code (the “Bankruptcy Code”). The Debtors are authorized to continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. Pursuant to Rule 1015(b) of the Federal Rules of Bankruptcy Procedure, the Debtors’ Chapter 11 Cases are being jointly administered for procedural purposes only under the caption In re CBL & Associates Properties, Inc., et al., Case No. 20-35226. Documents filed on the docket of and other information related to the Chapter 11 Cases are available free of charge online at https://dm.epiq11.com/case/cblproperties/dockets.
Pursuant to a First Amended and Restated Restructuring Support Agreement (the “Amended RSA”) we entered into with certain owners and/or holders of our indebtedness on March 21, 2021, it is contemplated that a restructuring and recapitalization of the Debtors will occur through a joint plan of reorganization in the Chapter 11 Cases (the “Amended Plan”). The Amended RSA requires that the Company file the Amended Plan and related disclosure statement no later than 25 days following the Amended RSA effective date, and we must have the Amended Plan confirmed no later than 180 days after the Amended RSA effective date and the effective date of the Amended Plan must occur no later than November 1, 2021. Additional information concerning the terms of the Amended RSA, the Amended Plan and the Chapter 11 Cases is contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC, that accompanies this Proxy Statement.
While the Company cannot predict the ultimate outcome of the Chapter 11 Cases at this time, we anticipate that, upon emergence from the Chapter 11 process, the composition of our Board of Directors may change significantly as a result of new directors chosen by the holders of new equity of the Company issued in connection with the Chapter 11 Cases and the related resignations of then-current directors. Pursuant to the Amended RSA, upon emergence from the Chapter 11 process, the Board will consist of seven members, including the Chief Executive Officer, with five members to be chosen by the Required Consenting Noteholders (as defined in the Amended RSA) who will be new equity holders in consultation with the Company and one member to be chosen by the Company and reasonably acceptable to such Required Consenting Noteholders. Accordingly, it is possible that certain of the directors nominated by our Board for re-election at the Annual Meeting will not serve out their full terms.
Upon the recommendation of the Nominating/Corporate Governance Committee, our Board intends to present for action at the Annual Meeting the re-election of Charles B. Lebovitz, Stephen D. Lebovitz, A. Larry Chapman, Matthew S. Dominski, John D. Griffith, Richard J. Lieb and Kathleen M. Nelson, Carolyn B. Tiffany and Scott D. Vogel, each to serve for a term of one year and until their successors are duly elected and shall qualify. Charles B. Lebovitz and Stephen D. Lebovitz serve as Chairman of the Board and as Chief Executive Officer, respectively, of the Company. Messrs. Chapman, Dominski, Griffith, and Lieb and Ms.Vogel and Mses. Nelson and Tiffany are the Company’s fiveseven Independent Directors. Unless authority to vote for such nominees is withheld, the enclosed proxy will be voted for such nominees, except that the persons designated as proxies reserve discretion to cast their votes for other persons in the unanticipated event that any of such nominees is unable or declines to serve.
Ms. Tiffany, together with former Director Michael L. Ashner, was initially appointed to the Board in November 2019 in connection with a Standstill Agreement entered into effective November 1, 2019 (the “Exeter Standstill Agreement”) with Exeter Capital Investors, L.P., Exeter Capital GP LLC, WEM Exeter LLC, and Michael L. Ashner (collectively, the “Exeter Group”) with respect to the composition of our Board of Directors and certain additional matters as described in the Company’s proxy statement for the 2020 Annual Meeting of Shareholders and in the Company’s Current Report on Form 8-K filed with the SEC on November 1, 2019. As previously disclosed, Mr. Ashner resigned from the Board of Directors effective September 29, 2020, and the Exeter Group did not exercise its right, pursuant to the Exeter Standstill Agreement, to designate an Exeter Replacement Director for consideration by the Board of Directors to fill the resulting vacancy. Pursuant to its terms, the standstill period under the Exeter Standstill Agreement expired in January 2021. Ms. Tiffany offered to tender her resignation from the Board in connection with the resignation of Mr. Ashner and subsequent expiration of the standstill under the Exeter Standstill Agreement; however, in light of her valuable contributions as a continuing director of the Company, the Board of Directors asked Ms. Tiffany to continue to serve and she agreed to do so.
Mr. Vogel, who was initially appointed to the Board as an additional director in October 2020 to fill the vacancy created by the resignation of Mr. Ashner, was recommended to the Nominating/Corporate Governance Committee for consideration by the Chief Executive Officer of the Company and by the Company’s Bankruptcy counsel, Weil Gotshal and Manges (“Weil”), based on his professional reputation and experience in serving as an independent director for other companies in the midst of comprehensive reorganizations. The Nominating/Corporate Governance Committee did not engage the services of any third-party search firm in connection with its selection of Mr. Vogel.
Summary of Board Experience
C. Lebovitz | S. Lebovitz | L. Chapman | M. Dominski | J. Griffith | R. | K. Nelson | C. | S. | |
Chief Executive Officer/ President/Founder | X | X | X | X | X | ||||
Chief Operating Officer/Business Unit Chief Executive | X | X | X | X | X | ||||
Commercial Real Estate | X | X | X | X | X | X | X | X | |
Financial Services / Capital Markets | X | X | X | X | X | X | X | ||
Investment Banking | X | X | |||||||
Corporate Restructuring | X | X | |||||||
Retail Operations | X | ||||||||
Financial Literacy | X | X | X | X | X | X | X | X | X |
Risk Oversight / Management | X | X | X | X | X | X | X | X | X |
Additional details concerning the senior executive management, professional, public company and philanthropic leadership experiences that our Board, with the advice of the Nominating/Corporate Governance Committee, has determined qualify each director for service on our Company’s Board of Directors are set forth in each individual’s biography presented below. For each of these individuals, the position(s) shown in the left column represents the individual’s position(s) with the Company and with CBL & Associates Management, Inc., a Delaware corporation (the “
Management Company”), through which the Company’s property management and development activities are conducted.DIRECTOR NOMINEE | BIOGRAPHICAL INFORMATION | |
Charles B. Lebovitz Chairman of the Board Director since 1993 Age – | Charles B. Lebovitz serves as Chairman of the Board of the Company and as Chairman of the Executive Committee of the Board of Directors. He previously served as Chief Executive Officer of the Company from the completion of its initial public offering in November 1993 until 2010, and also served as President of the Company until February 1999. Prior to the Company’s formation, he served in a similar capacity with CBL’s Predecessor. Mr. Lebovitz has been involved in shopping center development since 1961 when he joined his family’s development business. In 1970, he became affiliated with Arlen Realty & Development Corp. (“ Arlen”) where he served as President of Arlen’s shopping center division, and, in 1978, he founded CBL’s Predecessor together with his associates.Mr. Lebovitz is an Advisory Director of First | |
Stephen D. Lebovitz Chief Executive Officer Director since 1993 Age – | Stephen D. Lebovitz serves as Chief Executive Officer of the Company, and also served as President of the Company prior to Michael I. Lebovitz being promoted to serve as President in June 2018. He previously served as President and Secretary of the Company from February 1999 to January 1, 2010, when he became President and Chief Executive Officer, and has served as a director of the Company since the completion of its initial public offering in November 1993. He also serves as a member of the Executive Committee and the Capital Allocation Committee of the Board of Directors. Since joining CBL’s Predecessor in 1988, Mr. Lebovitz has also served as Executive Vice President – Development/Acquisitions, Executive Vice President – Development, Senior Vice President – New England Office, and as Senior Vice President – Community Center Development and Treasurer of the Company. Before joining CBL’s Predecessor, Mr. Lebovitz was affiliated with Goldman, Sachs & Co. from 1984 to 1986. Mr. Lebovitz served as Chairman of the ICSC from May 2015 through May 2016. He is a past Trustee and Divisional Vice President of the ICSC (2002-08), and is a former member of the Advisory Board of Governors of | |
DIRECTOR NOMINEE | BIOGRAPHICAL INFORMATION | |
John D. Griffith Director since 2015 Age – | John D. Griffith joined the Company as a director on January 7, 2015. Mr. Griffith is a member of the Compensation and Nominating/Corporate Governance Committees of the Company’s Board of Directors. In February 2019, Mr. Griffith was appointed as Senior Vice President of Real Estate and Development for Life Time, Inc., which operates a chain of health clubs in the United States and Canada. Mr. Griffith currently serves as Managing Partner of Griffith Real Estate LLC, a commercial real estate development firm. He also served as Head of Global Operations for the American Refugee Committee, an international organization dedicated to serving refugees in fragile states, from July 2016 through July 2018. Mr. Griffith retired from Target Corporation (“ Target”) in May 2014, having served most recently as Executive Vice President of Property Development from 2005 until his retirement, and as a member of Target’s Executive Committee. He started with Target in 1999 as the Vice President of Construction. As the Executive Vice President of Property Development at Target, Mr. Griffith was responsible for the management of Target’s real estate, consisting of over 300 million square feet valued at $30 billion, and had responsibility for 3,500 full time employees. During his time at Target, he doubled the retail footprint from approximately 900 locations to more than 1,900.Mr. Griffith served as the Governor’s appointed Commissioner on the Minnesota Sports Facilities Authority to build a new NFL stadium for the Minnesota Vikings. He is a past trustee of the ICSC, having served on the Executive Committee, and also is a past trustee of Bethel University. Mr. Griffith holds a Bachelor of Arts degree in Business and Economics from Bethel College and a Master of Business Administration degree from the University of Minnesota, Carlson School of Management. | |
Richard J. Lieb Director since 2016 Age – | Richard J. Lieb joined the Company as a director on February 10, 2016. Mr. Lieb is a member of the He also serves as a director and a member of the Audit Committee and the chair of the Investment Committee of iStar Inc., a real estate investment company. Mr. Lieb is an active member of the American Jewish Committee (AJC) and has served as a member of Wesleyan University’s Career Advisory Counsel. He holds a Bachelor of Arts degree from Wesleyan University and a Master of Business Administration degree from Harvard Business School. | |
DIRECTOR NOMINEE | BIOGRAPHICAL INFORMATION | |
Kathleen M. Nelson Director since 2009 Age – | Kathleen M. Nelson joined the Company as a director on May 5, 2009. Ms. Nelson is Chairman of the Nominating/Corporate Governance Committee and a member of the Executive Committee of the Company’s Board of Directors. She has an extensive background in commercial real estate and financial services with over 40 years of experience, including 36 years at TIAA-CREF. Ms. Nelson held the position of Managing Director/Group Leader and Chief Administrative Officer for TIAA-CREF’s Mortgage and Real Estate Division. TIAA-CREF’s mortgage and real estate portfolio totaled over $53.0 billion and was invested in all sectors of real estate, of which approximately 25% was invested in retail. Ms. Nelson developed and staffed TIAA-CREF’s Real Estate Research Department and created the pre-eminent commercial mortgage loan sales model for TIAA-CREF, generating over $10.0 billion in mortgage sales. She retired from this position in 2004 and currently serves as President and Founder of KMN Associates LLC (KMN), a commercial real estate investment advisory and consulting firm which advises clients in a variety of commercial real estate transactions including portfolio strategy and capital sourcing.Ms. Nelson has previously served as Chairman of the ICSC, has been an ICSC Trustee since 1991, and served as the Treasurer and Chairman for the 1996 ICSC Annual Convention. | |
Carolyn B. Tiffany Director since 2019 Age – 54 | Carolyn B. Tiffany joined the Company as a director on November 1, 2019. Ms. Tiffany is a member of the Audit and Compensation Committees of the Company’s Board of Directors. Ms. Tiffany has been active in commercial real estate investment, operations and management for over 25 years. She was a member of the Board of Trustees and President of Winthrop Realty Trust, a New York Stock Exchange listed REIT with direct and indirect investments in over $1.0 billion of assets, from 2009 until her retirement in June 2017. She also previously served as a trustee to its successor, Winthrop Realty Liquidating Trust, through the conclusion of that company’s orderly liquidation process by year-end 2019. Ms. Tiffany previously served as Winthrop’s Chief Operating Officer and Secretary from January 2004 to January 2007, during which period Winthrop had the highest total return of any real estate investment trust. From 2009 until July 2017, Ms. Tiffany served as an executive officer for Winthrop Realty Partners, L.P., First Winthrop Corporation and related entities (the “Winthrop Group”), which owned, operated and managed real estate assets throughout the United States. From February 2017 to July 2017, Ms. Tiffany was integrally involved the Winthrop Group’s serving as the external advisor for New York REIT Inc., a NYSE listed real estate investment trust. From February 2007 through March 2008, Ms. Tiffany served as a principal and the Chief Operating Officer for High Street Equity Advisors, a private equity real estate firm specializing in institutional quality industrial assets that had acquired $863 million of industrial properties with over $300 million equity from both private and institutional investors. Ms. Tiffany was also a member of the Investment Committee, which directed the real estate acquisitions of the investment funds. Ms. Tiffany served as the Chief Operating Officer of Winthrop Financial Associates from 1996 to 2006, as well as Chief Operating Officer and | |
DIRECTOR NOMINEE | BIOGRAPHICAL INFORMATION | |
Carolyn B. Tiffany [Continued] | Secretary of NYSE listed REIT Newkirk Realty Trust Inc., where she had a significant role in the execution of its initial public offering. Newkirk Realty Trust was a leading owner of net leased properties which, in 2006, merged into Lexington Property Trust, another NYSE listed REIT. Prior to joining Winthrop in 1992, Ms. Tiffany was a certified public accountant with the firm Kenneth Leventhal & Co., a nationally recognized accounting firm specializing in real estate. In 1995 Kenneth Leventhal & Co. joined with E&Y to form the E&Y Kenneth Leventhal Real Estate Group. Ms. Tiffany holds a Bachelor of Arts degree from Emanuel College. | |
Scott D. Vogel Director since 2020 Age – 45 | Scott D. Vogel joined the Company as a director on October 7, 2020. He has served as managing member of Vogel Partners, LLC, a private investment and advisory firm, since 2016. Before establishing his own firm, Mr. Vogel served for fourteen years as managing director at Davidson Kempner Capital Management. Mr. Vogel also worked at MPF Investors as well as the investment banking group at Chase Securities. Mr. Vogel has served on numerous boards over the course of his career, and currently serves on the boards of directors and as a member of the Audit Committees and Compensation Committees of Avaya Holdings Corp. and Bonanza Creek Energy, Inc. He also serves on the board of directors and as a member of the Audit Committee and Nomination and Governance Committee of Alpha Metallurgical Resources, Inc., and on the boards of directors of several private companies. Mr. Vogel also previously served as a director of Arch Coal (now Arch Resources, Inc.), where he served on the Compensation Committee, through May 2019, as a director of Seadrill Limited, where he served on the Audit Committee, through February 2020, and as a director of American Addiction Centers through November 2020. Mr. Vogel received a bachelor’s degree from Washington University and a Master of Business Administration degree from The Wharton School at the University of Pennsylvania. | |
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RE-ELECTION OF THE NINE DIRECTOR NOMINEES NAMED ABOVE | ||
Set forth below is information with respect to those individuals serving as executive officers of the Company as of March 15, 201926, 2021 (other than Charles B. Lebovitz and Stephen D. Lebovitz):
Name | Age | Current Position (1) |
Jeffery V. Curry | 60 | Chief Legal Officer and Secretary |
Michael C. Harrison, Jr. | 52 | Executive Vice President – Operations |
Farzana Khaleel | 69 | Executive Vice President – Chief Financial Officer and Treasurer |
Alan L. Lebovitz | 53 | Executive Vice President – Management |
Michael I. Lebovitz | 57 | President |
Katie A. Reinsmidt | 42 | Executive Vice President – Chief Investment Officer |
(1) | The position shown represents the individual’s position with the Company and with the Management Company. |
Jeffery V. Curry
serves as Chief Legal Officer and Secretary of the Company. Mr. Curry initially was appointed to serve as Interim Chief Legal Officer of the Company simultaneously with the creation of the Chief Legal Officer position by the Board in February 2012, which appointment was made permanent effective April 3, 2012. He was appointed Secretary of the Company effective September 10, 2012. Mr. Curry also serves as the Company’s Compliance Officer. He previously had served since 1986 as a legal advisor to the Company. Prior to joining the Company, Mr. Curry was a partner in the national law firm of Husch Blackwell LLP, counsel to the Company, a position he held since 2006 when he joined the local office of that firm along with a group of lawyers relocating from a firm that formerly provided legal services to the Company. Mr. Curry received his Doctor of Jurisprudence degree in 1985 from the University of Memphis Cecil C. Humphreys School of Law,Michael C. Harrison, Jr.
serves as Executive Vice President – Operations of the Company. Mr. Harrison joined the Company as Senior Vice President - Strategic and Technology Initiatives in October 2013, to provide leadership and oversight of new strategic initiatives and technology solutions, and served in that position through February 2018, when he was promoted to his current position. Prior to joining CBL, Mr. Harrison served for two years as Senior Vice President Real Estate and Chief Financial Officer for a private real estate developer, owner and operator. Mr. Harrison’s prior experience also includes 18 years of senior level consulting practice focused on strategic management in the real estate industry at RealFoundations, Inc. as well as serving as a former principal and managing director at KPMG LLP. Mr. Harrison has served as a consultant for numerous public and private real estate companies evaluating and overseeing the execution of strategic operating and financial plans. He also served for five years as a controller for a publishing and distribution company. Mr. Harrison received his Accounting degree from Dallas Baptist University.Farzana Khaleel
serves as Executive Vice President – Chief Financial Officer and Treasurer of theInvestments prior to its acquisition by Morgan Stanley). Ms. Khaleel served the Equitable and Lend Lease companies for 18 years in various senior financial positions and as Deputy Portfolio Manager for Equitable/AXA Financial’s mortgage portfolio. From 1976 to 1982, she served as Assistant Treasurer of IRT Property Company, a former REIT. Ms. Khaleel has served sinceas a commissioner from October 2010 to March 2020 on the Board of Commissioners of the Chattanooga Metropolitan Airport Authority (CMA) and also isserved as a member of the Finance Committee of the CMA. Ms. Khaleel received a Bachelor of Business Administration degree in Economics, a Master of Business Administration degree in Accounting and a Master of Science degree in Real Estate and Urban Affairs from Georgia State University. She is a certified public accountant, licensed in the state of Georgia.
Alan L. Lebovitz
serves as Executive Vice President – Management of the Company. Mr. Lebovitz served as Senior Vice President - Asset Management of the Company from February 2009 to February 2018, when he was promoted to his current position. He previously served as Vice President - Asset Management having held that position from 2002 through February 2009, and had served in various positions in management, leasing and development since joining the Company in 1995. Prior to joining CBL in 1995, Mr. Lebovitz received his B.A. from Northwestern University in 1990, was affiliated with Goldman, Sachs & Co. from 1990 to 1992 and obtained an M.B.A. from Vanderbilt University. He has been an active community volunteer for organizations that include: Alzheimer Association’sMichael I. Lebovitz
serves as President of the Company. Mr. Lebovitz served as Executive Vice President – Development and Administration of the Company from January 2010 through June 2018, when he was promoted to his current position. Mr. Lebovitz also served as Senior Vice President – Chief Development Officer of the Company from June 2006 through January 1, 2010. Previously, he served the Company as Senior Vice President – Mall Projects, having held that position since January 1997. Prior to that time, Mr. Lebovitz served as Vice President - Development and as a project manager for the Company. Mr. Lebovitz joined CBL’s Predecessor in 1988 as a project manager overseeing the development of CoolSprings Galleria in Nashville, Tennessee, and was promoted to Vice President in 1993. Prior to joining CBL’s Predecessor, he was affiliated with Goldman, Sachs & Co. from 1986 to 1988. He is past president of the Jewish Community Federation of Greater Chattanooga and a past member of the national board of Hillel. Mr. Lebovitz currently serves on the national boards of Jewish Federations of North America and the United Israel Appeal. He formerly served on the board of the United States Holocaust Memorial Council and was National Campaign Chair for the Jewish Federations of North America from 2010 – 2011. He is also a member of the board of the United Way of Greater Chattanooga and formerly served on the board of The McCallie School in Chattanooga. Michael I. Lebovitz is a son of Charles B. Lebovitz and a brother of Stephen D. Lebovitz and Alan L. Lebovitz.Katie A. Reinsmidt
serves as Executive Vice President – Chief Investment Officer of theInvolvement in Certain Legal Proceedings
As described above, our financial and operating results during 2020 were significantly impact by the temporary closure of our portfolio for a significant period due to government mandates and operating restrictions related to the COVID-19 pandemic and, on November 1, 2020, the Company, along with the Operating Partnership and certain of its direct and indirect subsidiaries, filed the Chapter 11 Cases, which are currently pending. Each of our above-referenced executive officers (Charles B. Lebovitz, Stephen D. Lebovitz, Jeffery V. Curry, Michael C. Harrison, Jr., Farzana Khaleel, Alan L. Lebovitz, Michael I. Lebovitz and Katie A. Reinsmidt) were executive officers of the Company at the time of such filing. The Board of Directors does not believe the filing of the Chapter 11 Cases is material to an evaluation of the ability or integrity of any of the Company’s executive officers.
Set forth below is information with respect to those individuals serving as senior officers of the Company, in addition to our directors and executive officers, as of March 15, 2019:
Name | Age | Current Position (1) |
Andrew F. Cobb | 52 | Senior Vice President – Director of Accounting |
Howard B. Grody | 60 | Senior Vice President – Leasing |
Stuart Smith | 59 | Senior Vice President – Redevelopment |
Justice Wade | 55 | Senior Vice President – Development and Mixed-Use |
(1) | The position shown represents the individual’s position with the Company and with the Management Company. |
country, and then four years with Arbor Property Trust in Philadelphia, Pennsylvania as Director of Construction. He received his Business degree from Pennsylvania State University.
Operation of the Company’s Business; Certain Aspects of the Company’s Capital Structure
Our Company operates through its two wholly-ownedwholly owned subsidiaries, CBL Holdings I, Inc., a Delaware corporation (“
Our Board has adopted guidelines on corporate governance (including director independence criteria), committee charters, and a code of business conduct and ethics setting forth the Company’s corporate governance principles and practices. Effective as of January 1, 2006, our Company adopted amended and restated guidelines on corporate governance incorporating all previous guidelines on corporate governance and including additional policy statements, which were further amended (i) effective January 1, 2012 with respect to minimum stock ownership levels for Non‑Employee Directors (directors who are not employees of the Company, currently, the Independent Directors), (ii) effective January 1, 2015 with respect to implementation of a majority vote policy for uncontested director elections, and (iii) effective March 17, 2015 to increase the minimum stock ownership level for the Chief Executive Officer, (collectively,(iv) effective November 2, 2018 to limit the minimum stock ownership requirements for officers to our policy-making executive officers, and provide alternatives for valuation and compliance testing and establish a procedure for handling exception requests with respect to minimum stock ownership requirements for non-employee directors and executive officers, and (v) effective August 7, 2019 to further revise the additional policy statements to eliminate the requirement that a director must tender his/her resignation on a change of principal occupation or business association and, in lieu thereof, require that a director, on the occurrence of such events, must notify the Chairperson of the Nominating/Corporate Governance Committee, which Committee will review whether it is appropriate and in the best interests of the Company for such Director to continue to serve on the Board and then make a recommendation to the Board (the guidelines, as amended and restated, collectively including the revisions described above, are referred to herein as the “
Our Board has adopted a set of director independence standards (“
Director Independence Standards”) for evaluating the independence of each of the directors in accordance with the requirements of the SEC and of the NYSE corporate governance standards. The Director Independence Standards are included as an exhibit to our Company’s Corporate Governance Guidelines, which can be found in the “Invest – Investor Relations – Governance Documents” section of the Company’s website at cblproperties.com. Pursuant to NYSE Rule 303A.02(a) and the provisions of our Company’s Director Independence Standards (as set forth below), our Board has reviewed whether any director has any relationship with the Company’s independent auditors that would precludeEffective as of January 1, 2006, and as further amended (i)with regard to the matters described above effective January 1, 2012, with respect to minimum stock ownership levels for Non-Employee Directors, (ii) effective January 1, 2015, with respect to implementation of a majority vote policy for uncontested director elections and (iii) effective March 17, 2015, to increase the minimum stock ownership level for the Chief Executive Officer,November 2, 2018 and August 7, 2019, the Company has included additional policy statements as part of the Corporate Governance Guidelines. A summary of these policy statements, as so amended and currently in effect, is as follows:
Director Resignation Policy – a policy statement that requires a director who is nominated in an uncontested election but does not receive a “majority vote” to immediately tender his or her resignation to the Board of Directors for consideration. A “majority vote” means that the number of shares voted “for” a director must exceed the number of votes “withheld” with respect to the election of that director. The policy provides that if a director does not receive a “majority vote” and tenders his or her resignation, the Nominating/Corporate Governance Committee will make a recommendation to our Board of Directors on whether to accept or reject the resignation. The Board will then consider the Nominating/Corporate Governance Committee’s recommendation and publicly disclose its decision to either accept or reject the resignation within 90 days from the date of certification of the election results. The director whose resignation is being considered will not participate in the recommendation of the Nominating/Corporate Governance Committee or the decision of the Board of Directors.
Limits on Other Board Participation – a policy statement that limits to four (4) the number of other public company boards (not counting the Company’s Board) upon which a director may serve at any given time.
Minimum Stock Ownership for Non-Employee Directors – as amended, a policy statement that provides that by five (5) years from the later of (i) January 1, 2012 or (ii) becoming a member of the Company’s Board, a Non‑Employee Director (a director that is not an employee of the Company, currently, the Independent Directors) must own at least an amount of shares of the Company’s common stock having a value, determined as set forth in the policy statement, equal to not less than three (3) times the amount of annual cash compensation that such Non‑Employee director shall receive from the Company. This policy statement includes an exemption for any Non‑Employee director who is prohibited by law or by the regulations of his or her employer from having an ownership interest in the Company’s securities.
Minimum Stock Ownership for Executive Officers – a policy statement that provides that by five (5) years from the later of (i) the adoption of the policy or (ii) becoming an executive officer, such officer must own an amount of the Company’s Common Stock, determined as set forth in the policy statement, having a value at least equal to the following formula amounts:
Executive Officer | Level of Stock Ownership | |
Chief Executive Officer | 10x prior calendar | |
President | 2x prior calendar | |
Chief Financial Officer | 2x prior calendar | |
Executive Vice | 2x prior calendar |
*The Company also applies this requirement to our Chief Legal Officer.
2018 Updates to Minimum Stock Ownership Requirements for Non-Employee Directors and Executive Officers – In November 2018, the Board of Directors, upon the recommendation of the Nominating/Corporate Governance Committee, approved the following updates to the stock ownership requirements described above: (i) since these requirements were originally meant to apply to executive officers and Non-Employee Directors of CBL, and the senior vice presidents no longer qualify as executive officers due to the policy making authority vested in our executive vice presidents, the ownership requirement for senior vice presidents was eliminated; (ii) a valuation formula was added for purposes of annual compliance testing under these policies that provides that shares of the Company’s Common Stock will be “valued” for such purpose at the greater of (A) their actual cost basis, for shares purchased by a Non-Employee Director or executive officer, (B) the tax basis for shares awarded to Non-Employee Directors and executive officers on a compensatory basis or (C) the average value of the Company’s Common Stock for the calendar year preceding the year in which such testing occurs, determined by using the average of the closing prices of the Company’s Common Stock on the NYSE on each trading day in the preceding calendar year; and (iii) a provision stating that any exceptions to the required minimum stock ownership levels for any Non-Employee Director or executive officer will be subject to review and discretionary approval by the Chairman of the Board’s Compensation Committee (or by the Chairman of the Nominating/Corporate Governance Committee, if such exception involves the Chairman of the Compensation Committee).
Changes in Director’s Principal Occupation or Business Association – as amended, a policy statement that provides that when the principal occupation or business association of a member of the Board of Directors changes substantially from the position he or she held when originally invited to join the Board of Directors, such director shall promptly tender his or her resignation as a director tonotify, in writing, the ChairmanChairperson of the BoardNominating/Corporate Governance Committee (or the other members of Directors.the Nominating/Corporate Governance Committee, if such affected director is the Chairperson). The Nominating/Corporate Governance Committee shall then review – with the affected director abstaining if he or she is a member – whether it is appropriate and in the best interests of the Company to allow the continued participation of such director as a member of the Board of Directors of the Company. If the Nominating/Corporate Governance Committee recommends that such director should no longer serve as a member of the Board of Directors of the Company as a result of such change, and the full Board of Directors (excluding the director at issue) ratifies such recommendation, then the tenderBoard of resignation byDirectors shall request that the affected director shall be accepted by the Boardsubmit a letter of Directors.
Initial Term of Director Appointed to Fill a Board Vacancy – a policy statement that provides that any director appointed by the Board of Directors of the Company to fill a vacancy created by the departure of another director shall serve only until the next regularly scheduled annual meeting of the Company’s shareholders. In order for such director to continue to serve thereafter, he or she must be nominated and duly elected for another full term.
Executive Sessions for Independent Directors
In accordance with the NYSE Rule 303A.03, the Independent Directors of the Company meet from time to time in scheduled executive sessions without management participation. Matthew S. Dominski
chairs these executive sessions in his capacity as the Company’s Lead Independent Director. The Independent Directors met in fournine executive sessions during 2018.
Our Board of Directors has no formal policy with respect to the separation of the offices of Chairman and Chief Executive Officer. Prior to January 1, 2010, Charles B. Lebovitz had served as Chairman of the Board and Chief Executive Officer of the Company since the completion of its initial public offering in November 1993. During the fourth quarter of 2009, the Board determined that Stephen D. Lebovitz should be promoted to serve as Chief Executive Officer of the Company effective January 1, 2010. The Board determined that it was appropriate to separate these positions at that time.
Additionally, our Board of Directors believes that the leadership provided to the Company by the two current executive directors (Chairman Charles B. Lebovitz and Chief Executive Officer Stephen D. Lebovitz) is appropriately complemented by a strong leadership and oversight role played by the Company’s Independent Directors, which may be summarized as follows:
Both our Certificate of Incorporation and Bylaws require that a majority of our Board be comprised of Independent Directors; historically this requirement has been satisfied at all times, and fiveseven of the sevennine current members of the Company’s Board satisfy this requirement as described above.
The Independent Directors are a sophisticated group of professionals, all of whom have significant experience in the commercial real estate industry in addition to possessing a variety of other expertise and skills, and many of whom either are currently, or have been, leaders of major companies or institutions.
Our Board has established three standing Committees composed solely of Independent Directors — the Audit Committee, the Compensation Committee and the Nominating/Corporate Governance Committee — each with a different Committee chair, and each with responsibility for overseeing key aspects of CBL’s corporate governance (see “Board of Directors Meetings and Committees” below).
As described above, the Independent Directors regularly meet in executive sessions without the presence of management, with the Lead Independent Director presiding over such sessions.
The Independent Directors, as well as our full Board, have complete access to the Company’s management team. The Board and its committees receive regular reports from management on the business and affairs of the Company and related strategic planning considerations.
Under the Company’s Corporate Governance Guidelines, all Company directors are to have full access to the executive officers of the Company (including the Company’s Chief Legal Officer), the Company’s independent counsel, independent registered public accountants, and any other advisors that the Board or any director deems necessary or appropriate.
Board and Management RolesRole in Risk Oversight
Assessing and managing risk is the responsibility of the management of our Company. Our Board is responsible for overseeing our risk management. The Board administers its risk oversight function through (1) the review and discussion of regular periodic reports to the Board and its committees on topics relating to the risks that the Company faces, including, among others, market conditions, tenant concentrations and credit worthiness, leasing activity, the status of current and anticipated development projects, compliance with debt covenants, management of debt maturities, access to debt and equity capital markets, environmental and social matters, cyber-security risks and threat mitigation related to our technology and information systems, existing and potential legal claims against the Company and various other matters relating to the Company’s business; (2) the required approval by the Board of Directors (or a committee thereof) of significant transactions that entail the expenditure of funds or incurrence of debt or liability in amounts in excess of certain threshold dollar amounts; (3) the review and discussion of regular periodic reports to the Board and its committees from the Company’s independent registered public accountants regarding various areas of potential risk, including, among others, those relating to the
qualification of the Company as a REIT for tax purposes; and (4) the direct oversight of specific areas of the Company’s business by the Compensation, Audit and Nominating/Corporate Governance Committees.
In addition, under its charter, the Audit Committee is specifically responsible for reviewing and discussing management’s policies with respect to risk assessment and risk management. The Company’s Director of Internal Audit meets regularly in executive sessions with the Audit Committee (at least quarterly and more frequently if necessary), for discussions of the Company’s oversight of risk through the internal audit function, including an annual review of the Company’s internal audit plan, which is focused on significant areas of financial, operating, and compliance risk, and periodic updates on the results of completed internal audits of these significant areas of risk. The Audit Committee also monitors the Company’s SEC disclosure compliance, and any related reporting risks, and receives regular reports from the Company’s Compliance Committee which assistassists the Audit Committee in exercising certain oversight responsibilities concerning (i) the Company’s use of interest rate hedging instruments to manage our exposure to interest rate risk (including but not limited to entering swaps for such purpose and the exemption of any such swaps from applicable execution and clearing requirements) and (ii) compliance with the Company’s Related Party Transactions Policy as described herein under the section entitled “Certain Relationships and Related Person Transactions.”
Cybersecurity Risk Oversight and Mitigation
As part of its regular oversight of risk management, the Audit Committee also is responsible for cybersecurity risk and threat mitigation related to our information technology and information systems including protection and security of employee and customer data. Management reports to the Audit Committee on the Company’s cybersecurity program and efforts to mitigate cybersecurity risk on a quarterly basis.
We contract with a third-party to perform a cybersecurity risk and vulnerability assessment annually. Additionally, our cybersecurity and information security controls are regularly tested by our auditors.
We have a comprehensive program designed to mitigate cybersecurity risk. We have adopted and require employees to abide by our Personally Identifiable Information Policy to help protect personal employee, vendor and tenant information. Employees are required to complete regular cybersecurity training and education annually, which is followed-up with quarterly testing and re-training, as necessary. We also maintain a business continuity and disaster recovery plan. The Company also maintains cybersecurity risk insurance coverage.
Over the past three years, we have had five minor cybersecurity incidents, the latest of which occurred in November 2020. All incidents were resolved promptly, had no material impact on the Company’s reputation, financial performance, customer or vendor relationships, and posed no material risk of potential litigation or regulatory investigations or actions.
Communicating withWith the Board of Directors
The Company provides a process for shareholders and other interested parties to send communications to the Board or any of our directors. Such persons may send written communications to the Board or any of the directors c/o the Company’s Executive Vice President – Chief Investment Officer, CBL Properties, 2030 Hamilton Place Blvd., Suite 500, CBL Center, Chattanooga, Tennessee, 37421-6000. All communications will be compiled by the Company’s Executive Vice President – Chief Investment Officer and submitted to the Board or to the individual director(s) to whom such communication is addressed. It is the Company’s policy that all directors attend the Annual Meeting unless they are prevented from attending due to scheduling conflicts or important personal or business reasons; provided, however, it is the Company’s policy that a majority of the directors (including a majority of the Company’s Independent Directors) attend each Annual Meeting. All of the Company’s current directors attended the 2018virtual 2020 Annual Meeting of Shareholders.
Code of Business ConductConduct and Ethics.
Our Board has adopted a Third Amended and Restated Code of Business Conduct and Ethics (the “Code of Business Conduct”) that applies to all directors, officers and employees, including the Company’s principal executive officer, principal financial officer and principal accounting officer. The Code of Business Conduct is available in the “Invest – Investor Relations – Governance Documents” section of the Company’s website at cblproperties.com, or at no charge by directing a written request for a copy to the Company at CBL Properties, CBL Center, Suite 500, 2030 Hamilton Place Blvd., Chattanooga, Tennessee 37421-6000, Attention: Executive Vice President – Chief Investment Officer. The purpose of the Code of Business Conduct is to provide a codification of standards that is reasonably designed to deter wrongdoing and to promote accountability for and adherence to the standards of the Code, including honest and ethical conduct;conduct, as well as the prompt internal reporting to an appropriate person or persons of violations of the Code; the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; full, fair, accurate, timely and understandable disclosure in the Company’s filings with the SEC and in other public communications by the Company; and compliance with all applicable rules and regulations that apply to the Company and to its directors, officers and employees.
The Company is committed to reducing waste through the use of environmentally friendly materials, domestic products, and the implementation of green building practices in our new development projects, redevelopments and renovations. We have completed more than 60 energy efficiency projects across our portfolio that have resulted in more than 40 million kWh saved annually. We have active cardboard or plastic recycling programs at 30 centers across our portfolio and have building management systems at nearly every property. These programs are ongoing as we strive to find ways to enhance our commitment to being environmentally conscious.
CBL’s dedication to social responsibility is evident through our efforts to support the communities in which our properties operate. Since 2019, CBL’s team members have dedicated more than 1,300 hours through CBL’s community service program, to support charitable organizations in the communities it serves. The Company is committed to creating environments that reflect our respect for human rights, encourage community and stakeholder engagement and promote diversity, equity and inclusion in all its forms.
More information on our sustainability, social responsibility and community involvement initiatives is available on dedicated web pages at cblproperties.com/about.
The Company’s Board of Directors met nine times and took action by unanimous written consent two32 times during 2018.2020. Each director attended more than 75% of the aggregate of (i) the total number of Board meetings and (ii) the total number of meetings of Board committees on which the director served at the time during 2018.
Our Board of Directors has established standing Executive, Audit, Compensation and Nominating/ Corporate Governance Committees, as described in more detail below. Copies of each of the three committee charter documents referenced below are available and can be accessed in the “Invest – Investor Relations – Committee Charting” section of the Company’s website at cblproperties.com, or at no charge by written request to the Company’s Executive Vice President – Chief Investment Officer at the address provided above.
On October 14, 2020, the Board of Directors appointed a special committee (the “Special Committee”) of the Board consisting of two independent directors of the Board, Carolyn B. Tiffany and Scott D. Vogel. The Special Committee is authorized to, among other things, review, approve, and act upon any transactions for and on behalf of the Company in which the Chief Legal Officer or outside counsel advises that a conflict exists between the Company and its equity holders, its affiliates, or its managers and officers in the context of the Chapter 11 Cases, and to oversee and determine whether to recommend that the Company grant releases in favor of members of the Board and Company officers in connection with any plan of reorganization adopted pursuant to the Chapter 11 Cases. In carrying out its responsibilities, the Special Committee will coordinate and consult with the Board, management, and the Company’s professional advisors, as appropriate.
Additional information with respect to the four standing committees of the Company’s Board of Directors is as follows:
The Executive Committee | ||
Members: Charles B. Lebovitz (Chair) Stephen D. Lebovitz Kathleen M. Nelson 2020 Committee 1 meeting 2 actions by unanimous written consent | The Executive Committee may exercise all the powers and authority of the Board of Directors of the Company in the management of the business and affairs of the Company as permitted by law; provided, however, unless specifically authorized by the Board of Directors, the Executive Committee may not exercise the power and authority of the Board of Directors with respect to (i) the declaration of dividends, (ii) issuance of stock, (iii) amendment to the Company’s Certificate of Incorporation or Bylaws, (iv) filling vacancies on the Board of Directors, (v) approval of borrowings in excess of $40 million per transaction or series of related transactions, (vi) hiring executive officers, (vii) approval of acquisitions or dispositions of property or assets in excess of $40 million per transaction and (viii) certain transactions between the Company and its directors and officers and certain sales of real estate and reductions of debt that produce disproportionate tax allocations to CBL’s Predecessor pursuant to the Company’s Bylaws. | |
The Audit Committee | ||
Members: A. Larry Chapman (Chair) Matthew S. Dominski Carolyn B. Tiffany 2020 Committee 6 meetings Governing Document: Second Amended and Restated Charter adopted August 14, 2013 | The Audit Committee is responsible for the engagement of the independent auditors and the plans and results of the audit engagement. The Audit Committee approves audit and non-audit services provided by the independent auditors and the fees for such services and reviews the adequacy of the Company’s internal accounting controls as well as the Company’s accounting policies and results and management’s policies with respect to risk assessment and risk management. The Audit Committee also exercises certain oversight responsibilities concerning the Company’s use of interest rate hedging instruments to manage our exposure to interest rate risk (including but not limited to entering swaps for such purpose and the exemption of any such swaps from applicable execution and clearing requirements), and under the Company’s Related Party Transactions Policy, as described herein under the section entitled “Certain Relationships and Related Person Transactions.” The Board of Directors has determined that each member of the Audit Committee is an Independent Director pursuant to the independence requirements of Sections 303A.02 and 303A.07(b) of the listing standards of the NYSE as currently applicable, and also has determined that each of A. Larry Chapman, Matthew S. Dominski and | |
The Compensation Committee | ||
Members: Matthew S. Dominski (Chair) A. Larry Chapman John D. Griffith Carolyn B. Tiffany 2020 Committee 9 meetings Governing Document: Amended and Restated Charter adopted May 14, 2013 | The Compensation Committee generally reviews and approves compensation programs and, specifically, reviews and approves salaries, bonuses, stock awards and stock options for officers of the Company of the level of senior vice president or higher. The Compensation Committee administers the CBL & Associates Properties, Inc. 2012 Stock Incentive Plan, as amended (the “ 2012 Stock Incentive Plan”), but typically delegates the responsibility for routine, ministerial functions related to that plan, such as the documentation and record-keeping functions concerning awards issued under such plan, to employees in the Company’s accounting and finance departments, with assistance from Company counsel. The Compensation Committee also approves and oversees the Annual Incentive Plan and Long-Term Incentive Program components of the Company’s current incentive programs for its Named Executive Officers, developed in 2015 in conjunction with the Compensation Committee’s initial engagement of the independent compensation consulting firm FPL Associates, L.P. (“FPL”). In evaluating our current NEO compensation program following the first three years of its operation, the Compensation Committee, with the assistance of an evaluation it commissioned from FPL, determined to make certain changes to the program for 2018 as discussed herein under the section entitled “Executive Compensation – Compensation Discussion and Analysis” which, together with the section entitled “Director Compensation,” provides additional information concerning the Compensation Committee’s processes and procedures for setting director and executive officer compensation. Additionally, following extensive consultation and review by FPL, the Compensation Committee approved a number of changes to the Company’s executive and director compensation programs during 2020 in connection with entering into a Restructuring Support Agreement (as subsequently amended) related to the Chapter 11 Cases, as discussed herein under the sections entitled “Executive Compensation – Compensation Discussion and Analysis – Reduction to Executive Compensation Related to the Economic Disruptions During 2020 and Impact of Our Chapter 11 Restructuring” and “Director Compensation – Additional Information Concerning Director Compensation.” The Board of Directors has determined that each member of the Compensation Committee is an Independent Director pursuant to the independence requirements of Sections 303A.02 and 303A.05(a) of the listing standards of the NYSE as currently applicable. | |
The Nominating/Corporate Governance Committee | ||
Members: Kathleen M. Nelson (Chair) John D. Griffith Richard J. Lieb 2020 Committee 2 meetings Governing Document: Amended and Restated Charter adopted August 14, 2013 | The Nominating/Corporate Governance Committee reviews and makes recommendations to the Board of Directors regarding various aspects of the Board of Directors’ and the Company’s governance processes and procedures. The Nominating/Corporate Governance Committee also evaluates and recommends candidates for election to fill vacancies on the Board, including consideration of the renominations of members whose terms are due to expire. The Nominating/Corporate Governance Committee requires a majority of the Company’s directors to be “independent” in accordance with applicable requirements of the Company’s Certificate of Incorporation and Bylaws as well as rules of the SEC and NYSE (including certain additional independence requirements for Audit Committee and Compensation Committee members). A set of uniform Director Independence Standards, which was used in making all such Independent Director determinations, is included in the Company’s Corporate Governance Guidelines, a copy of which is available in the The Nominating/Corporate Governance Committee will consider candidates for Board of Directors’ seats proposed by shareholders. Any such proposals should be made in writing to CBL Properties, 2030 Hamilton Place Blvd., Suite 500, CBL Center, Chattanooga, Tennessee, 37421-6000, Attention: Corporate Secretary, and must be received no later than The Board of Directors has determined that each member of the Nominating/Corporate Governance Committee is an Independent Director pursuant to the independence requirements of Sections 303A.02 of the listing standards of the NYSE as currently applicable. | |
OWNERS AND MANAGEMENT
The following table sets forth information available to the Company as of March 15, 2019,26, 2021, with respect to the ownership of Common Stock by (i) each person known to the Company to be the beneficial owner of more than 5% of the outstanding Common Stock, (ii) each director of the Company, (iii) each Named Executive Officer of the Company, as defined below, and (iv) all directors and executive officers as a group. Except as otherwise indicated, each person named below has sole investment and voting power with respect to the securities shown. Except as otherwise indicated, the address of each beneficial owner of more than 5% of the outstanding Common Stock is the Company’s address.
| Number of Shares(1) | Rule 13d-3 Percentage(1) | Fully Diluted Percentage(2) |
Exeter Capital Investors, L.P. (3) 7 Bulfinch Place, Suite 500 Boston, MA 02114 | 15,250,000 | 7.76% | 7.57% |
CBL & Associates, Inc. (“CBL’s Predecessor”) (4) | 15,729,379 | 8.01% | 7.80% |
Charles B. Lebovitz (5) | 17,257,639 | 8.78% | 8.56% |
Stephen D. Lebovitz (6) | 1,756,437 | * | * |
Farzana Khaleel (7) | 156,289 | * | * |
Michael I. Lebovitz (8) | 794,628 | * | * |
Jeffery V. Curry (9) | 256,420 | * | * |
A. Larry Chapman (10) | 180,551 | * | * |
Matthew S. Dominski (11) | 189,430 | * | * |
John D. Griffith (12) | 184,238 | * | * |
Richard J. Lieb (13) | 168,663 | * | * |
Kathleen M. Nelson (14) | 187,085 | * | * |
Carolyn B. Tiffany (15) | 33,091 | * | * |
Scott D. Vogel | 0 | * | * |
All executive officers and directors and director nominees | 21,417,161 | 10.90% | 10.62% |
Number of Shares(1) | Rule 13d-3 Percentage(1) | Fully-Diluted Percentage(2) | |
| BlackRock, Inc. (3) | 29,701,312 | 17.12% | 14.83% |
55 East 52nd Street New York, NY 10055 | |||
| The Vanguard Group, Inc. (4) | 24,804,510 | 14.30% | 12.39% |
100 Vanguard Blvd. Malvern, PA 19355 | |||
CBL & Associates, Inc.(“CBL’s Predecessor”) (5) | 16,764,484 | 8.86% | 8.37% |
| Charles B. Lebovitz (6) | 19,112,878 | 10.04% | 9.55% |
| Stephen D. Lebovitz (7) | 1,762,013 | 1.01% | * |
| Farzana Khaleel (8) | 318,371 | * | * |
| Michael I. Lebovitz (9) | 832,154 | * | * |
| Jeffery V. Curry (10) | 147,382 | * | * |
| Augustus N. Stephas (11) | 208,354 | * | * |
| A. Larry Chapman (12) | 84,397 | * | * |
| Matthew S. Dominski (13) | 93,276 | * | * |
| John D. Griffith (14) | 83,382 | * | * |
| Richard J. Lieb (15) | 72,509 | * | * |
| Kathleen M. Nelson (16) | 90,931 | * | * |
| All executive officers and directors and director nominees (15 persons) as a group (17) | 23,586,719 | 12.31% | 11.78% |
* Less than 1%
(1) | |
The Company conducts all of its business activities through the Operating Partnership. Pursuant to the Operating Partnership Agreement, each of the partners of the Operating Partnership |
that may be acquired upon exercise of CBL Rights by the individual or entity whose percentage of share ownership is being computed (but not taking account of the exercise of CBL Rights by any other person or entity). Amounts shown were determined without regard to applicable ownership limits contained in the Company’s Certificate of Incorporation. |
(2) | |
The Fully-Diluted Percentage calculation is based on (i) |
(3) | |
In a Schedule |
(4) | |
Includes (i) |
(5) | |
Includes (i) |
(6) | |
Includes (i) |
(7) | |
Includes (i) |
(8) | |
Includes (i) |
(9) | |
Includes (i) |
(10) | |
Includes |
(11) | |
Includes (i) 129 shares of unrestricted Common Stock owned directly and (ii) |
(12) | |
Includes (i) |
(13) | |
Includes (i) 112 shares of unrestricted Common Stock owned directly and (ii) |
(14) | |
Includes (i) 34 shares of unrestricted Common Stock owned directly and (ii) |
(15) | Includes 33,091 shares of restricted Common Stock granted to Ms. Tiffany under the 2012 Stock Incentive Plan. |
(16) | Includes an aggregate of (i) |
Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in beneficial ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file.
Based solely upon the Company’s review of copies of such reports furnished to it through the date hereof, or written representations that no other reports were required to be filed, the Company believes that during the fiscal year ended December 31, 20182020 all officers, directors and ten percent shareholders complied with the filing requirements applicable to them, except for the following late filings for the following reporting persons: (i) due to a compliance error, one report concerning the annual stock grant to Independent Directors in January 2020 was filed late for each of Michael L. Ashner, A. Larry Chapman, Matthew S. Dominski, John D. Griffith, Richard J. Lieb, Kathleen M. Nelson and Carolyn B. Tiffany; (ii) for Alan L. Lebovitz, two amendments to his original Form 3 had to be filed to add depositary shares representing Series D Preferred Stock and Series E Preferred Stock, as well as additional Common Stock held in a separate brokerage account, that were inadvertently omitted from his original filing, and two additional Form 4s were filed late (one for Series D Preferred and one for Series E Preferred), each adding four quarterly dividend reinvestments on such preferred shares made through the broker’s synthetic DRIP; (iii) one report concerning two transactions was filed late for Charles B. Lebovitz; (iv) one report concerning a grant of restricted stock and related withholding of shares for taxes, as well as an additional report concerning shares withheld for taxes in connection with the vesting of a prior restricted stock award, were filed late for Stephen D. Lebovitz; and (v) one additional report was filed late for Stephen D. Lebovitz due to an internal miscommunication among compliance personnel, and each of Stephen Lebovitz (one report involving three transactions) and Charles Lebovitz (one report involving three transactions) had transactions that were inadvertently reported late involving transfers ofconcerning shares between family trust accountsre-deposited by his adult son into a Trust for the son’s benefit, of their respective children/grandchildren. None of these reports involved market transactions.
Introduction
This Compensation Discussion and Analysis reviews the factors, objectives and policies underlying each element of compensation paid for fiscal year 2018,2020, and certain elements of our 20192021 compensation program, for the following five individuals who are “named executive officers” as determined under SEC rules (the “
Charles B. Lebovitz, Chairman of the Board
Stephen D. Lebovitz, Chief Executive Officer
Farzana Khaleel, Executive Vice President – Chief Financial Officer and Treasurer
Michael I. Lebovitz, President
Jeffery V. Curry, Chief Legal Officer and Secretary
Executive Compensation Design and “Say-on-Pay” Advisory Vote
We provide shareholders with an annual “say-on-pay” advisory vote on the Company’s compensation program for its Named Executive Officers. FourSix years ago, after extensive shareholder feedback, the Compensation Committee worked with an independent compensation consulting firm, FPL Associates L.P. (“
In recognition of the strong support demonstrated by this strong expressionsix-year average approval rating of support by our shareholders over recent years has validated94%, which the Compensation Committee believes validates that our compensation programs areover recent years have been well designed and aligned with performance. Theperformance, the Committee will continuehas maintained a generally consistent plan design prior to consider the outcomedisruptions of say-on-pay votes when making futureour executive compensation decisions and we will disclose the impact of this considerationprogram that occurred during 2020, as summarized in future filings.
Components of Our 2020 Executive Compensation Program:
Element | Objectives | Key Features | Summary of Committee Adjustments Made in 2020 | |
Base Salary | • Attract and retain high performing executives • Provide competitive fixed pay that takes into consideration each individual’s level of responsibility, experience, and tenure with the Company |
| • Temporary base salary reductions between 10% - 50% were implemented in 2020 | |
Annual Incentive Plan | • | |||
• Balances objectivity with subjectivity to support the Company’s annual business plan and operating goals • Drives annual performance that ultimately creates shareholder value | ||||
| ||||
Objective measures include Funds From Operations (“FFO”), as adjusted per | ||||
and Same-center Net Operating Income (“NOI”) growth1 • Subjective goals vary per individual based on responsibilities | • The AIP program was canceled and any awards that would have been earned for 2020 were terminated | |||
Long-Term Incentive Program (LTIP) | • Encourages executives to create shareholder value, aligning the interests of executives and shareholders over a longer-term • Provides a retention mechanism | • A majority of the award is predicated on our TSR, with 1/3 of the quantitative component of the LTIP • | • The LTIP program was canceled and any awards for 2020 that would have been earned were terminated | |
Key Employee Retention Program (KERP) | • To retain key executives during unprecedented time as a result of restructuring while working with fewer staff. | • Retention program that provided a payment to executives, subject to clawback if the executive voluntarily resigns or is terminated for cause on or before September 27, 2021. | • The KERP program replaced all other incentive programs for 2020 | |
1 | FFO, as adjusted, and same-center NOI are non-GAAP measures. For a description of FFO, FFO, as adjusted, a reconciliation of these measures to GAAP net income and an explanation of why we believe they are useful performance measures, see “Non-GAAP Measure — Funds from Operations” beginning on page 76 within the “Liquidity and Capital Resources” section of Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2020, which accompanies this Proxy Statement. For a description of same-center NOI, a reconciliation from GAAP net income to same-center NOI and an explanation of why we believe this is a useful performance measure, see “Non-GAAP Measure — Same–center Net Operating Income” beginning on page 58 within the “Results of Operations” section of Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2020, which accompanies this Proxy Statement. |
Reduction to Executive Compensation Related to the Economic Disruptions During 2020 and Impact of Our Chapter 11 Restructuring
As noted above, our financial and operating results during 2020 were heavily impacted by the temporary closure of our portfolio for a significant period due to government mandates and operating restrictions related to the COVID-19 pandemic. These mandated closures resulted in nearly all our tenants closing for a period of time and/or shortening operating hours. As a result, we experienced an increased level of requests for rent deferrals and abatements, as well as defaults on rent obligations, in addition to store closures and rent loss related to pre-pandemic tenant bankruptcies, rent abatements granted and lower percentage rent related to lower retail sales, all of which impacted revenues.
As detailed in our Annual Report on Form 10-K for the year ended December 31, 2020, which accompanies this Proxy Statement, the Company took a number of actions during 2020 to implement a full financial COVID-19 response to improve liquidity and reduce costs. The following timeline summarizes Compensation Committee actions taken during 2020 in connection with that effort, as detailed further below and under “Additional Information Concerning Director Compensation – Impact of 2020 COVID-19 Cost Reduction Program” elsewhere in this Proxy Statement:
November 2019 | Compensation Committee approves 2020 base salaries at level consistent with 2019. | |
February 2020 | Compensation Committee approves 2020 incentive compensation programs, setting target awards at levels consistent with the prior year | |
April 2020 | Effective April 1, 2020, in response to the impact of the COVID-19 pandemic on the Company's business, the Compensation Committee approves 10% - 50% temporary reductions in NEO base salaries and Non-Employee Director fees. Full salaries and fees resumed September 1, 2020. | |
June 2020 | Commenced review of 2020 incentive compensation programs in light of the impact of the COVID-19 pandemic and the Company's reorganization efforts. | |
August 2020 | Following review and market analysis by FPL, as well as advice from its legal advisors, and in connection with the Company entering into an RSA with certain of its debt holders, the Compensation Committee approves the termination of all existing cash and equity incentive compensation programs. Concurrently, the Committee approves a KERP and the Company entering into employment agreements with certain executive officers. The two-tiered KERP provides retention bonus awards intended to help incentivize and retain NEOs and other key personnel during the Company’s restructuring process. Payout amounts for NEOs under the KERP are set at levels slightly below target payout levels for 2019. The Compensation Committee also approved the Company entering into new executive employment agreements for four of the five NEOs. | |
November 2020 | The Company and certain related subsidiaries commence the filing of voluntary bankruptcy petitions. | |
December 2020 | Following review and marketing analysis by FPL and incorporating advice from its legal advisors, the Compensation Committee approves modifications to Non-Employee Director fees, including the termination of equity award grants to Non-Employee Directors for the year ended December 31, 2020 and future years, and approved an additional monthly cash service fee for Non-Employee Directors (other than Mr. Vogel) until the Company emerges from bankruptcy. |
Base Salaries for the Named Executive Officers
Upon the recommendation of senior management and the Compensation Committee, effective April 1, 2020, we implemented a Company-wide salary reduction program which included the following reductions in our NEO’s base salaries from April 1, 2020 through September 1, 2020:
April 1-15 | April 16- June 16 | June 17 – September 1 | |
Stephen D. Lebovitz, Chief Executive Officer | 10% | 50% | 10% |
Farzana Khaleel, Executive Vice President – Chief Financial Officer | 10% | 20% | 10% |
Charles B. Lebovitz, Chairman of the Board | 10% | 50% | 10% |
Michael I Lebovitz, President | 10% | 50% | 10% |
Jeffery V. Curry Chief Legal Officer & Secretary | 10% | 20% | 10% |
Typically, in reviewing and establishing base salaries for NEOs, the Compensation Committee considers each Named Executive Officer’s level of responsibility, experience and tenure with the Company, as well as such officer’s performance in carrying out his or her responsibilities and overseeing those under his or her supervision. For the base salaries set for 2019, in order to contain baseline executive compensation expense during a challenging period and in conjunction with a broader program to reduce general and administrative expenses, the Compensation Committee approved senior management’s prior recommendations to modify 2019 base salaries as detailed below (including accepting a recommendation from senior management with which our Executive Chairman, Charles B. Lebovitz, concurred, to reduce his base salary by 50% in light of the Company’s needs). The Compensation Committee determined to maintain 2020 and 2021 base salaries at the same reduced levels, prior to the additional reductions in base salaries for 2020 outlined above, the effect of which is reflected in the chart below:
Named Executive Officer |
| 2018 Base Salary |
| 2019 Base Salary |
| 2020 Base Salary as Originally Approved |
| Actual 2020 Base Salary Reflecting Approved Reductions |
| 2021 |
Stephen D. Lebovitz |
| $707,000 |
| $672,315 |
| $672,315 |
| $601,549 |
| $672,315 |
Farzana Khaleel |
| $534,279 |
| $507,565 |
| $507,565 |
| $477,959 |
| $507,565 |
Charles B. Lebovitz |
| $681,750 |
| $340,875 |
| $340,875 |
| $304,995 |
| $340,875 |
Michael I. Lebovitz |
| $426,287 |
| $404,973 |
| $404,973 |
| $362,347 |
| $404,973 |
Jeffery V. Curry |
| $415,374 |
| $394,605 |
| $394,605 |
| $371,588 |
| $394,605 |
The base salaries reflected above took effect as of January 1 for each year (other than the “Actual Base Salary” for 2020, which reflects the mid-year adjustments discussed above).
In spite of these and other cost-saving measures, the impacts from the ongoing downturn in the retail shopping center industry culminated in the filing of the Chapter 11 Cases on November 1, 2020. In August 2020, the Company and the Operating Partnership entered into a Restructuring Support Agreement (the “Original RSA”) with certain of its debt holders, as further described in the Company’s Current Report on Form 8-K filed with the SEC on August 19, 2020. As noted previously, the Original RSA was later amended on March 21, 2021.
In connection with entering into the Original RSA, the Company, following extensive consultation and review by FPL and the Company’s legal advisors: (i) entered into new Employment Agreements (the “Executive Employment Agreements”) as described below with certain executive officers of the Company, including four of the five NEOs identified above (Stephen D. Lebovitz, Farzana Khaleel, Michael I. Lebovitz and Jeffery V. Curry), and (ii) also implemented a Key Employee Retention Plan (“KERP”) for specified officers and non-executive employees of the Company, to provide retention bonus awards intended to help incentivize and retain key personnel during the Company’s restructuring process. The Company did not enter into an Executive Employment Agreement with Chairman of the Board Charles B. Lebovitz.
The Executive Employment Agreements and KERP were reviewed and evaluated by FPL and by the Company’s other professional advisors in connection with the Chapter 11 Cases. FPL completed a market review of severance terms and employment agreements and a market review of restructuring incentive programs and executive pay levels and advised that the key terms of the Executive Employment Agreements and the KERP both aligned with market-based practices.
In connection with these actions, which were taken pursuant to approval of the Compensation Committee (contingent upon entering into the Original RSA), the Company also terminated both the Annual Incentive Plan (“AIP”) and Long-Term Incentive Program (“LTIP”) components of the Company’s NEO Incentive Program for 2020, and made no further reductions to NEO base salaries for 2020.
Summary of New Executive Employment Agreements
In considering the design of the Retention Bonus Awards (as described more fully below), in consultation with FPL, the Compensation Committee evaluated employment agreement practice and structure, including term length, compensation terms, severance and restrictive covenants, relative to two peer groups including (i) an Asset-Based Executive Compensation Peer Group and (ii) a supplemental Size-Based Executive Compensation Peer Group. Additional details, including constituent companies, of the Asset-Based Executive Compensation and Size-Based Executive Compensation Peer Groups is outlined in the section below titled – Summary of the KERP.
The new Executive Employment Agreements that the Company entered into with all of its NEOs, other than Charles B. Lebovitz, included the following key terms:
Term: | Initial 3-year term, with automatic renewal for successive 1-year terms if not terminated (including any such renewals, the “Term”). |
Base Salary: | Initially equivalent to originally approved 2020 base salaries, with future increases or decreases at discretion of the Compensation Committee (but base salary shall not be decreased by more than 5% during the Term). |
Annual Bonus: | Bonus compensation for 2020 will be pursuant to the KERP as described below. Annual bonus opportunities for 2021 and future years to be determined by the Compensation Committee following emergence from the Chapter 11 process. |
Other Incentives: | Participation and amounts applicable to future equity incentives under a new management incentive plan to be as determined by the Compensation Committee following emergence from the Chapter 11 process. |
Insurance/Benefits: | Continuation of health insurance benefits for 18 months following termination (24 months for CEO), subject to longer continuation, if applicable, under the terms of the Company’s Tier I, Tier II and Tier III Legacy Retiree Programs as described herein under “Additional Compensation Policies and Practices – Retiree Insurance Programs.” |
Severance: | If employment is terminated by the Company without Cause (as defined in the agreement) or upon a Change of Control, severance is twice (2x) the sum of (i) then-current annual base salary plus (ii) the Retention Bonus payable pursuant to the KERP (as described below). |
Death/Disability: | If employment is terminated due to death or disability (other than for the CEO), severance is twice (2x) then-current annual base salary. In the case of the CEO, such severance would equal 1x then-current annual base salary plus the Retention Bonus payable pursuant to the KERP (as described below). |
Non-Solicitation/ | One year following termination, unless executive was terminated without Cause (as defined in the agreement). |
In conjunctionconsultation with FPL and legal advisors and pursuant to ongoing negotiations with certain of our debt holders who are parties to the Amended RSA, we anticipate making additional modifications to the Executive Employment Agreements to be effective following emergence from the Chapter 11 process.
In connection with the adoption of our current NEO incentive program in 2015,Executive Employment Agreements and the KERP, we also increasedterminated the stock ownership guidelinesfollowing existing arrangements with Charles B. Lebovitz, Stephen D. Lebovitz and Jeffery V. Curry, the terms of which were superseded by the new arrangements:
The non-competition agreements entered into with Charles B. Lebovitz and Stephen D. Lebovitz at the time of the Company’s initial public offering in November 1993, as described in the Company’s 2020 Proxy Statement.
The limited severance arrangements approved for ourJeffery V. Curry as an inducement to surrender his partnership in a national law firm to join the Company as its Chief ExecutiveLegal Officer from shares havingin 2012, as described in the Company’s 2020 Proxy Statement.
Summary of the KERP
In order to incentivize and retain key personnel during the Company’s restructuring process, the Compensation Committee of the Board approved a value equaltwo-tiered KERP, pursuant to 3x his prior calendar year’s annual base salary to shares having a value equal to 10x his prior calendar year’s annual base salary. As discussed further below, we also proactively adopted a clawback policy in conjunction withwhich all officers of the NEO incentive program in 2015Company of the level of Senior Vice President and in February 2016, our Board added an anti-hedging policy applicable to CBL’s officers and directors.
The Compensation Committee and Board considered the following circumstances in adopting the KERP:
termination of the existing short-term incentive compensation and long-term equity compensation programs;
uncertainty regarding Company performance during the COVID-19 pandemic and related disruptions in the retail industry may create a lack of confidence in employees’ ability to earn an annual bonus and/or to retain their jobs;
uncertainty surrounding the proposed restructuring and the future of the Company may decrease the retentive power of existing compensation programs and the Company’s ability to provide and/or pay compensation;
the significant effort and additional work required to restructure the Company made retaining existing key personnel even more critical;
difficulty in projecting how long the restructuring will take; and
key employees may find other employment opportunities more attractive.
In considering the design of the Retention Bonus Awards (as described more fully below), in consultation with the Company’s Compensation Consultant, the Compensation Committee evaluated the award design, including participation, award size, and clawback period, relative to the following four peer groups, as further outlined below:
Peer Groups Reviewed for | Peer Groups Reviewed for |
NEO Peer Group | Asset-Based Executive Comp. Peer Group |
KERP Peer Group | Size-Based Executive Comp. Peer Group |
NEO Peer Group
The Committee reviewed the terms and magnitude of similar retention programs awarded to NEOs and other senior employees for the following companies that have recently filed voluntary bankruptcy petitions under Chapter 11:
•Chesapeake Energy Corp. | •Whiting Petroleum Corp. |
•CEC Entertainment, Inc. | •J. C. Penney Company, Inc. |
•GNC Holdings, Inc. | •Frontier Communications Corp. |
•Pyxus International, Inc. | •Pier 1 Imports, Inc. |
•Extraction Oil & Gas, Inc. | •McDermott International, Inc. |
•Libbey, Inc. | •Approach Resources Inc. |
•Tuesday Morning Corporation | •Dean Foods Company |
•Hertz Global Holdings, Inc. | •Toys “R” Us, Inc. |
KERP Peer Group
The Committee reviewed Prepetition retention programs and court-approved incentive programs (or KERPs) for the following companies that have recently filed a voluntary Chapter 11 case:
•Chesapeake Energy Corp. | •LSC Communications, Inc. |
•Libbey, Inc. | •Bluestem Brands, Inc. |
•Tuesday Morning Corporation | •McDermott International, Inc. |
•Unit Corporation | •Dean Foods Company |
•Hertz Global Holdings, Inc. | •Sears Holdings Corp. |
•Exide Holdings, Inc. | •PHI, Inc. |
•Ultra Petroleum Corp. | •Windstream Holdings, Inc. |
•Diamond Offshore Drilling, Inc. | •EXCO Resources, Inc. |
Asset-Based Executive Compensation Peer Group
The Compensation Committee reviewed the magnitude of the incentive programs in the context of CBL’s historical pay and peer group compensation levels for the following companies that include mall and shopping center REITs that generally are within 0.5x to 2.0x the size of CBL in terms of total capitalization:
•Acadia Realty Trust | •Urban Edge Properties |
•Tanger Factory Outlet Centers | •Washington Prime Group, Inc. |
•Kite Realty Group Trust | •Weingarten Realty Investors |
•Taubman Centers, Inc. | •SITE Centers Corp. |
•Macerich Company | |
•Pennsylvania Real Estate Investment Trust |
Size-Based Executive Compensation Peer Group
The Compensation Committee reviewed the magnitude of the incentive programs in the context of CBL’s historical pay and peer group compensation levels for the following companies that include similarly sized REITs:
•Apple Hospitality REIT, Inc. | •Sabra Health Care REIT, Inc. |
•Piedmont Office Realty Trust | •Sunstone Hotel Investors, Inc. |
•Brandywine Realty Trust | •Mack-Cali Realty Corporation |
•Retail Properties of America, Inc. | •Taubman Centers, Inc. |
•Corporate Office Properties Trust | •National Health Investors, Inc. |
•RLJ Lodging Trust | •Weingarten Realty Investors |
•Healthcare Realty Trust |
Based on a review of the peer group information and in consideration of CBL’s focus on cost-containment and reduction due to the impact of the pandemic on the Company’s business, for each NEO, the amounts of the Retention Bonus were set at slightly reduced levels compared with the cash bonus received by each NEO under the AIP for 2019. Effective October 29, 2020, after further consultation and review with FPL and the Company’s legal advisors, the Compensation Committee and Board of Directors jointly approved amendments to the payment terms and clawback period.
Final key terms, reflecting the effect of the amendment, of the Retention Bonus Awards applicable to the NEOs may be summarized as follows:
KERP Retention Bonus payable to each NEO effective as of October 29, 2020, so long as the RSA entered on August 18, 2020 is in effect at the time of payment. | ||
Amount of KERP Retention Bonus for Each NEO: | Stephen D. Lebovitz, Chief Executive Officer | $953,000 |
Farzana Khaleel, Executive Vice President – Chief Financial Officer | $313,000 | |
Charles B. Lebovitz, Chairman of the Board | $414,000 | |
Michael I. Lebovitz, President | $313,000 | |
Jeffery V. Curry, Chief Legal Officer and Secretary | $201,000 | |
Clawback: | KERP Retention Bonus payment to be returned to the Company if the executive voluntarily resigns or is terminated for Cause (as defined in the Retention Bonus Agreement) on or before September 27, 2021. | |
Death/Disability: | If employment is terminated without Cause or due to death or disability, the executive will be entitled to retain the Retention Bonus payment. | |
For purposes of the Executive Employment Agreements and the KERP, “cause” with respect to any termination means an act of fraud or willful malfeasance by the executive, criminal convictions (or equivalent pleas) involving fraud, misappropriation or moral turpitude, willful violations of the Company’s Code of Business Conduct, or specified failures of executive performance not cured as provided in the agreements.
2020 Executive Compensation Decisions Prior to Cancellation of Certain Awards
As described more fully below, the Company’s existing short and long-term incentive compensation programs for 2020 were terminated in connection with the implementation of the KERP, with no payouts to the NEOs.
Prior to the disruptions experienced in 2020 the Compensation Committee had structured the incentive program for our NEOs around the key principles outlined below. NEO restricted stock awards for 2019 performance were awarded in February 2020, but all 2020 AIP and LTIP awards to NEOs were cancelled in August in connection with implementation of the KERP as discussed above, with no payouts to the NEOs.
While we expect our Compensation Committee to continue to consider the outcome of say‑on‑pay votes, including this year’s vote, when making future executive compensation decisions, we also expect any NEO incentive program for 2019, are provided below. Certain elements2021 and future years to be administered by the then-current members of Mr. Stephas’ 2018 compensation were determined pursuant to the terms of a RetirementBoard’s Compensation Committee, following the Company’s emergence from our current Chapter 11 reorganization process.
Compensation Elements for CBL’s Named Executive Officers: What We Pay and General Release Agreement dated September 28, 2018, as summarized below under the heading “Compensation in Connection With 2018 Retirement of Gus Stephas” and otherwise reflected, where applicable, throughout the following discussion. Why
The Compensation Committee believesestablished the overall compensation program for our Named Executive Officers, including our NEO incentive program, to appropriately balancesbalance (i) compensation based on short-term vs. long-term performance and (ii) compensation based on operational goals vs. compensation based on stock price performance, while providing an appropriate level of objectivity and retaining some subjectivity to support the Company’s business plans and strategy.
Historically, our Named Executive Officers have been compensated separately for short-term performance through cash awards under an Annual Incentive Plan (“AIP”), and rewarded for value creation over a multi-year period through a Long-Term Incentive Plan (“LTIP”) that maintains accountability for the achievement of longer-term, sustained performance. We believe these programs will continue to allowhave allowed us to attract and retain highly qualified personnel, while also serving our overall objective of linking senior management’s long-term economic interests with those of CBL’s shareholders.
To provide direct alignment with investors, a majority of the NEO equity awards under our LTIP has been predicated on our three‑year total shareholder return, or “TSR” (stock price change plus dividends paid, assuming dividend reinvestment). Beginning with the 2018 Performance Considerations
Design and Structure of the overall market headwinds during 2018, as same-center sales per square foot at the Company’s stabilized malls increased to $377 as compared to $375 for the prior year.
| Named Executive Officer | 2017 Base Salary | 2018 Base Salary | 2019 Base Salary | |||
| Stephen D. Lebovitz | $707,000 | $707,000 | $672,315 | |||
| Farzana Khaleel | $534,279 | $534,279 | $507,565 | |||
| Charles B. Lebovitz | $681,750 | $681,750 | $340,875 | |||
| Michael I. Lebovitz | $426,287 | $426,287 | $404,973 | |||
| Augustus N. Stephas | $564,516 | $564,516 | N/A* | |||
| Jeffery V. Curry* | $415,374 | $415,374 | $394,605 | |||
* Mr. Stephas retired in 2018. Mr. Curry has qualified as a Named Executive Officer for the first time in conjunction with this year’s proxy statement. | ||||||
In February 2020, the Compensation Committee approved a 2020 AIP, adopted on February 12, 2018 rewardsthe terms of which were designed, as in prior years, to reward the Named Executive Officers for the achievement of two annual quantitative operational goals, and for the achievement of qualitative individual performance objectives as assessed by the Compensation Committee. For our Chief Executive Officer, 70% of his total AIP opportunity is based on the quantitative portion and the remaining 30% is based on individual performance objectives. For the other Named Executive Officers, 60% of the total award is based on the quantitative portion and the remaining 40% is based on individual performance objectives.
In setting the terms of the 2020 AIP, the Compensation Committee elected to maintain from 2019 a 5% reduction as compared to 2018 AIP compensation targets (50% in the case of our Executive Chairman of the Board), other than with respect to Mr. Curry, who entered the program for the first time in 2019. This
reduction in AIP cash bonus targets was coupled with maintaining the Compensation Committee’s decision to maintain the 2019 reductions to NEO base salaries, thereby helping the Company reduce cash executive compensation expense and maintaining the same proportional relationship between the NEO’s base salaries and AIP bonus opportunities for 2020.
As in prior years, the quantitative portion of the award iswas allocated between two performance measures, each with a 50% weighting: (1) FFO, as adjusted per diluted share, as reported in the Company’s periodic reports (Forms 10-K and 10-Q) filed with the SEC (the “
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For cash bonus awards based on performance in relation to the quantitative metrics under the AIP:
If these PSUs had not been cancelled in August 2020 as discussed above, to the extent that any such Named Executive OfficerMr. Lebovitz should have earned PSUs in excess of those amounts at the conclusion of the three year performance period applicable to the 20182020 grants, he or she would behave been entitled to receive the economic value of any such excess PSUs, payable as a cash bonus award with a value equivalent to the number of shares of Common Stock constituting such excess times the average of the high and low trading prices reported for the Company’s Common Stock on the New York Stock ExchangeNYSE on the date such shares would have otherwise been issuable.
(4) | |
Represents the number of shares of restricted stock awarded to each such officer under the 2012 Stock Incentive Plan in February |
(5) | |
Represents the grant date fair value of the February |
The following discussion presents additional information relevant to the compensation reported above for each of the Named Executive Officers in the Summary Compensation Table and the 20182020 Grants of Plan-Based Awards Table.
Annual Bonus Arrangements for Named Executive Officers
The terms of both the quantitative and qualitative components of the bonus arrangements for the Named Executive Officers under the 20182020 Annual Incentive Plan are described above in the “Compensation Discussion and Analysis” section.
Terms of Performance Stock Unit Grants to the Named Executive Officers Under the LTIP
The terms of the PSUs granted to the Named Executive Officers during 20182020 pursuant to the performance-based component of stock awards under the LTIP are detailed above in the “Compensation Discussion and Analysis” section. As described therein, any shares of Common Stock issued pursuant to such PSUs at the conclusion of the applicable three-year performance period will vest 60% at such date, with the remaining 40% of such shares vesting 20%in two equal installments on each of the nextfirst two anniversaries of such date. During such two yeartwo-year period, the additional shares that have not yet vested will be subject to the same terms described below for shares of restricted stock issued pursuant to the time-vested component of LTIP awards (other than the five-year vesting schedule).
Terms of Restricted Stock Grants to NEOs Under the Time-Vested Component of the LTIP
Each time-vested award of restricted shares of Common Stock granted to the Named Executive Officers under the 2012 Stock Incentive Plan pursuant to the LTIP provides for the following terms:
The recipient of the award generally has all of the rights of a shareholder during the vesting/restricted period, including the right to receive dividends on the same basis and at the same rate as all other outstanding shares of Common Stock and the right to vote such shares on any matter on which holders of the Company’s Common Stock are entitled to vote.
The shares generally are not transferable during the restricted period, except for any transfers which may be required by law (such as pursuant to a domestic relations order).
If the Named Executive Officer’s employment terminates during the restricted period for any reason other than death or disability, the award agreements provide that any non-vested portion of the restricted stock award is immediately forfeited by such Named Executive Officer.
If employment terminates during the restricted period due to death or disability (as defined in the award), any portion of the restricted stock award that is not vested as of such date shall immediately become fully vested in the Named Executive Officer or his or her estate, as applicable.
The shares vest as follows: 20% of the shares granted to each Named Executive Officer are fully vested on the date of grant, and restrictions expire on an additional 20% of the shares granted annually over the next four (4) years beginning on the first anniversary of the date of grant, except that, in the event of a Change of Control of the Company (as defined in the 2012 Stock Incentive Plan), any remaining unvested portion of such shares would immediately vest.
Risks Arising From Design of Compensation Programs
Both senior management and the Compensation Committee believe that the design of the Company’s compensation programs, including our executive compensation program, does not encourage our executives or employees to take unnecessary and excessive risks, and that the risks arising from these programs are not reasonably likely to have a material adverse effect on the Company. Factors supporting these conclusions include, among others, the following:
Both annual performance bonuses and grants of restricted stock awards under our 2012 Stock Incentive Plan are not automatic, but are granted in the discretion of senior management and the Compensation Committee and are subject to downward adjustment as the Compensation Committee or management may deem appropriate.
As noted above, our Board of Directors requires approval by the Board (or a committee thereof) of significant transactions that entail the expenditure of funds or incurrence of debt or liability in amounts in excess of certain threshold dollar amounts, thereby limiting the risks to which employees, or even senior management, may expose the Company without higher-level Board review. Company policy also provides similar checks against the creation of risk by compensation-based incentives at the operational level – such as a procedure that employees compensated based in part on leasing results may have the authority to negotiate new and renewal lease terms, but the authority to approve and execute the leases rests with a higher level of management whose compensation is not subject to the same incentives.
Due to the scope of their authority, risk-related decisions concerning the Company’s business are primarily under the control of our executive officers. As discussed above, we maintain stock ownership guidelines for all executive officers – supported by the features of our compensation programs that encourage our executives to achieve and maintain a significant proprietary interest in the Company. These guidelines tend to align our senior executives’ long-term interests with those of our shareholders and serve as a disincentive to behavior that is focused only on the short-term and risks material harm to the Company.
Additionally, as discussed on page 4744 above in the Compensation Discussion and Analysis, effective March 24, 2015 in conjunction with the implementation of new annual and long-term incentive programs for the Company’s Named Executive Officers, the Company’s Board of Directors and Compensation Committee implemented a compensation clawback policy applicable to the Company’s Named Executive Officers as described therein.
As required by Section 953(b) of the Dodd-Frank WallWall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following reasonable estimate of the ratio of the annual total compensation of our Chief Executive Officer (our “
For 2018, 2020, our last completed fiscal year:
the annual total compensation for our median employee was $54,217;$71,828; and
the annual total compensation of our CEO, as reported in the Summary Compensation Table included elsewhere in this Proxy Statement, was $3,472,388.$3,455,604.
Based on this information, for 20182020 the ratio of annual total compensation of our CEO to the median of the annual total compensation of all employees was 6448 to 1.
To identify the median employee, as well as to determine the annual total compensation of our median employee and our CEO, we took the following steps:
1. | We identified the median employee using our employee population as of December 31, |
2. | To identify the “median employee” from our employee population, we examined the amount of total |
3. | We identified our median employee using this compensation measure, which was consistently applied to all our employees included in the calculation. |
4. | Once we identified our median employee, we calculated annual total compensation for this employee of |
5. | With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our |
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
20182020 Outstanding Equity Awards at Fiscal Year-End
Name | 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 | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested | |
Stephen D. Lebovitz | 510,677 (2) | 20,427 | 261,922 | 10,477 |
Farzana Khaleel | 162,224 (3) | 6,489 | 67,159 | 2,686 |
Charles B. Lebovitz | 274,564 (4) | 10,983 | 88,368 | 3,535 |
Michael I. Lebovitz | 162,224 (5) | 6,489 | 67,159 | 2,686 |
Jeffery V. Curry | 169,708 (6) | 6,788 | 67,159 | 2,686 |
| Name | 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 ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(8) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(9) | |||||
| Stephen D. Lebovitz | 206,157 | (2) | 395,821 | 211,462 | 406,007 | |||
| Farzana Khaleel | 67,323 | (3) | 129,260 | 54,221 | 104,104 | |||
| Charles B. Lebovitz | 146,310 | (4) | 280,915 | 135,552 | 260,260 | |||
| Michael I. Lebovitz | 67,323 | (5) | 129,260 | 54,221 | 104,104 | |||
| Augustus N. Stephas | 58,523 | (6) | 112,364 | 54,221 | 104,104 | |||
| Jeffery V. Curry | 50,595 | (7) | 97,142 | N/A (10) | N/A (10) | |||
(1) | |
Where noted |
(2) | |
Such shares were issued |
(3) | |
Such shares were issued |
(4) | |
Such shares were issued under the discretionary time‑vested component of LTIP awards as follows: (A) |
(5) | |
Such shares were issued |
February 2020. Subject to any changes related to the |
(6) | |
The following shares were issued as part of annual restricted stock grants to Mr. Curry under the 2012 Stock Incentive Plan, as described in Note 1, prior to his becoming a Named Executive |
(7) | |
Assumes performance at the Threshold level for PSUs issued under the LTIP for |
Stephen D. Lebovitz – 51,542 shares
Farzana Khaleel – 152,870 shares
Charles B. Lebovitz – 82,176 shares
Michael I. Lebovitz – 152,870 shares
Jeffery V. Curry – 152,870 shares
Any PSUs earned in excess of these limits would instead be converted to a cash bonus award, subject to the same additional vesting conditions as any shares of Common Stock earned (provided that any such excess cash earned would be paid first relative to such vesting schedule, ahead of the issuance of any shares of Common Stock earned).
(8) | |
Market value of shares of Common Stock underlying PSUs that had not vested at December 31, |
| Stock Awards | |
Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) |
Stephen D. Lebovitz | 179,806 | 136,643 |
Farzana Khaleel | 57,704 | 43,890 |
Charles B. Lebovitz | 103,949 | 78,155 |
Michael I. Lebovitz | 57,704 | 43,890 |
Jeffery V. Curry | 50,311 | 38,470 |
| Stock Awards | ||
| Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(2) |
| Stephen D. Lebovitz | 105,436 | 433,507 |
| Farzana Khaleel | 26,624 | 128,274 |
| Charles B. Lebovitz | 43,996 | 201,098 |
| Michael I. Lebovitz | 26,124 | 125,624 |
| Augustus N. Stephas (3) | 17,599 | 80,442 |
| Jeffery V. Curry | 14,730 | 74,455 |
(1) | |
All of such shares were received pursuant to time-vested restricted stock awards which vested during fiscal |
(2) | |
Amounts shown are based on the closing market price for the Company’s Common Stock on the NYSE on the respective dates when each installment vested (or on the immediately preceding trading day, if such date was not a business day). As each installment vests, the officer may choose either (A) to sell all (or some portion) of the underlying shares immediately following the vesting date or (B) to hold all (or some portion) of the underlying shares indefinitely or for sale at a later date. Accordingly, such amounts do not correspond to the actual value that will be realized by each Named Executive Officer. |
Except for (i) the noncompetitionnon-solicitation and non-competition arrangements included in the Executive Employment Agreements described under the heading “Reduction to Executive Compensation Related to the Economic Disruptions During 2020 and Impact of Our Chapter 11 Restructuring” in the Compensation Discussion and Analysis above, (ii) the automatic vesting of any unvested shares subject to restricted stock awards upon the occurrence of a Change in Control as defined in the 2012 Stock Incentive Plan, (iii) the provisions allowing payout of the full Target Cash Bonus Award under the AIP, or a partial payout of shares subject to a performance-based LTIP award, in the event of an officer’s death, disability or (under the circumstances described below) termination following a Change of Control (as defined in the 2012 Stock Incentive Plan); (iv) the severance and (iv)continuation of insurance benefits provided under the Executive Employment Agreements and KERP Amended and Restated Retention Bonus Agreements described under the heading “Reduction to Executive Compensation Related to the Economic Disruptions During 2020 and Impact of Our Chapter 11 Restructuring” in the Compensation Discussion and Analysis above and (v) the Tier I Legacy Retiree Program and the Tier III Post-65 Retiree Program described below, the Company’s other five Named Executive Officers do not have any employment, severance or change of control agreements with the Company.
Accordingly, except for any benefits for which they are eligible under either the Tier I Legacy Retiree Program the Tier III Post-65 Retiree Program, benefits pursuant to the Executive Employment Agreements and KERP Amended and Restated Retention Bonus Agreements, and certain impacts on outstanding AIP and equity awards, such officers will not receive compensation in connection with any termination of employment due to a change in control of the Company, death, disability, retirement or any other reason, except for such benefits as are available generally to all employees under the Company’s 401(k) Plan, insurance and other benefits programs.
Impact of Executive Employment Agreements and the KERP
As discussed above in the Compensation Discussion and Analysis section under the heading “Reduction to Executive Compensation Related to the Economic Disruptions During 2020 and Impact of Our Chapter 11 Restructuring,” in connection with entering into the RSA in anticipation of the filing of the Chapter 11 Cases, in August 2020 the Company (i) entered into new Executive Employment Agreements with each of the NEOs other than Charles B. Lebovitz and (ii) entered into Retention Bonus Agreements (as subsequently amended and restated October 29, 2020) with each of the NEOs, including Charles B. Lebovitz. The impact of these agreements on potential payments to the NEOs in the event of termination or a change in control of the Company may be summarized as follows:
Continuation of Insurance/Benefits: | Pursuant to the Executive Employment Agreements, each NEO (other than Charles B Lebovitz) will be entitled to continuation of health insurance benefits for 18 months following any termination of employment (24 months for CEO Stephen D. Lebovitz), subject to longer continuation, if applicable, under the terms of the Company’s Tier I, Tier II and Tier III Legacy Retiree Programs as described below. |
NEO Severance Upon Termination Without Cause or in Connection With Change of Control: | If employment is terminated by the Company without Cause (as defined in the agreement) or upon a Change of Control, each NEO (other than Charles B. Lebovitz) will receive severance equal to twice (2x) the sum of (i) then-current annual base salary plus (ii) the amount of such NEO’s Retention Bonus payable pursuant to the KERP. |
Death/Disability: | If employment is terminated due to death or disability, each NEO (other than for Charles B. Lebovitz or for the CEO), will receive severance equal to twice (2x) such NEO’s then-current annual base salary. In the case of CEO Stephen D. Lebovitz, such severance would be an amount equal to the sum of (i) 1x his then-current annual base salary plus (ii) the amount of his Retention Bonus payable pursuant to the KERP. |
Non-Solicitation/ | Under the Executive Employment Agreements entered into with each NEO other than Charles B. Lebovitz, each such NEO has agreed not to (i) engage in any competing solicitation of employees, customers, clients or suppliers of the Company or (ii) otherwise, directly or indirectly, engage in business in competition with the Company for a period of one (1) year following termination, unless such NEO was terminated by the Company without Cause (as defined in the agreement). |
For purposes of the above-described provisions of these agreements:
“Cause” is defined to include an act of fraud or willful malfeasance by the executive, criminal convictions (or equivalent pleas) involving fraud, misappropriation or moral turpitude, willful violations of the Company’s Code of Business Conduct, or specified failures of executive performance not cured as provided in the agreements;
“Disability” is defined to mean the NEO’s complete and permanent disability as defined by the Company’s health insurance plans or as otherwise defined by the Company from time to time; and
“Change of Control” will mean a “change of control” as such term may be defined in a future Management Incentive Program to be adopted for the Company, as contemplated by the Executive Employment Agreements.
Impact of Change in Control Under 2012 Stock Incentive Plan
The 2012 Stock Incentive Plan generally provides that, except to the extent the Compensation Committee otherwise provides, in the event of any Change in Control of the Company (a) any outstanding option shall become fully exercisable, (b) the restrictions expire immediately with respect to 100% of the shares subject to any award of restricted stock and (c) other outstanding awards shall become fully vested and or payable and any restrictions with respect thereto shall expire. The effect of this provision with respect to currently outstanding awards of restricted stock under such plan is that all remaining unvested shares subject to restricted stock awards held by any employee (including any time-vested shares held by a Named
Executive Officer pursuant to either an award under the new LTIP or a prior restricted stock grant) would immediately vest in full.
The 2012 Stock Incentive Plan defines a “
Change in Control” for this purpose to include (i) any acquisition by a person or group of 20% or more of the outstanding shares of the Company's Common Stock (other than an acquisition from the Company or by the Company or by the Company's management, an acquisition through the exercise of the rights to exchange limited partnership interests in the Operating Partnership for shares of Common Stock or an acquisition by a Company-sponsored employee benefit plan), (ii) a change in the majority of the Company's directors (subject to certain exceptions for changes in the ordinary course of the Company's business), or (iii) the occurrence of a Corporate Event (as defined below), but excluding any Corporate Event pursuant to which:(A) | all or substantially all of the beneficial owners of the Company's voting securities immediately prior thereto will beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding shares of Common Stock, and (as applicable) the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Corporate Event in substantially the same proportions as their ownership immediately prior to such Corporate Event; |
(B) | no person (other than the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or such corporation resulting from such Corporate Event) will beneficially own, directly or indirectly, 20% or more of, respectively, the outstanding shares of Common Stock of the corporation resulting from such Corporate Event or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors, except to the extent that such ownership existed with respect to the Company prior to the Corporate Event; and |
(C) | individuals who were members of the Company's incumbent Board prior thereto will constitute at least a majority of the directors of the corporation resulting from such Corporate Event. |
A “
Corporate Event” is defined under the 2012 Stock Incentive Plan as an event pursuant to which: (i) the Company is merged or consolidated with another corporation or entity, (ii) all or substantially all of the Company's assets or Common Stock is acquired by another person or entity or (iii) the Company is liquidated or reorganized.We currently anticipate that, pursuant to the terms of the Amended Plan, a “Change of Control,” as defined above for purposes of the 2012 Stock Incentive Plan, will not occur in connection with the Company’s emergence from its current reorganization pursuant to the Chapter 11 Cases.
Impact of Death, Retirement or Change in Control Under the NEO Annual Incentive Plan
A Named Executive Officer who terminates employment with the Company prior to the conclusion of any applicable performance period under the AIP willwould not receive an AIP bonus payment for such period, except that an otherwise eligible Named Executive Officer shallwould receive, had the 2020 AIP not been terminated as described in the “Compensation Discussion and Analysis” section above, an AIP bonus payment in the amount of his or her full Target Cash Bonus Award, as determined by the Compensation Committee, in either of the following circumstances:
In the event of death or disability (generally defined as the complete and permanent disability of the participant under the Company’s benefit insurance plans) prior to the end of the annual performance period; or
If a Named Executive Officer’s employment is terminated, other than voluntarily or for Cause (as defined in the 2012 Stock Incentive Plan), following a Change of Control (defined as described above in the Company’s 2012 Stock Incentive Plan), but prior to end of the annual performance period.
Impact of Death, Retirement or Change in Control on Performance Stock Units Under the LTIP
Whether a Named Executive Officer whose employment is terminated prior to the conclusion of the three yearthree-year performance period applicable to any LTIP award of PSUs will be deemed to have earned any of the PSUs to such award will be determined as follows:
a Named Executive Officer whose employment terminates, other than for Cause (as defined in the 2012 Stock Incentive Plan), either (i) due to death or disability (generally defined as the complete and permanent disability of the participant under the Company’s benefit insurance plans) or (ii) within 24 months following a Change of Control (defined as described above in the 2012 Stock Incentive Plan) prior to the end of the applicable performance period will be deemed to have earned a pro-rated number of PSUs, calculated based on the Company’s TSR performance over the proportion of the performance period that had been completed to, and including, the date of such event, as compared to the TSR performance of the NAREITNareit Retail Index over such period (or, beginning with the February 2018 LTIP awards, based on the Company’s TSR performance over such period both in absolute terms and as compared to the TSR performance of the NAREITNareit Retail Index).
a Named Executive Officer whose employment terminates voluntarily (other than within 24 months following a Change of Control) or for Cause (as defined in the 2012 Stock Incentive Plan) prior to the end of the applicable performance period will not be deemed to have earned any of the PSUs subject to such award.
Tier I Legacy Retiree Program and Tier III Post-65 Retiree Program
The Company’s Tier I Legacy Retiree Program and its Tier III Post-65 Retiree Program each provide certain benefits concerning the continuation of health insurance coverage to certain employees (and, in the case of the Tier III program, to certain corporate officers) who meet their respective requirements. The “Tier I Retirees” covered by the Tier I Retiree Legacy Program include any Company employee who retires after the program’s effective date and:
has been employed by CBL and/or its affiliates or predecessors for a total of 30 or more years prior to their date of retirement;
is participating in the CBL group medical insurance plan on the date of their retirement; and
is not eligible for health benefit coverage pursuant to any other group insurance plan or Medicare.
The “Tier III Retirees” covered by Tier III Post-65 Retiree Program include Company officers of the level of Senior Vice President and above, who retire at age 65 or above after the program’s effective date and:
have been employed by CBL and/or its affiliates or predecessors for a total of 40 or more years prior to their date of retirement;
are participating in the CBL group medical insurance plan on the date of their retirement; and
no longer have a “current employment status” with CBL.
For purposes of the third requirement listed above, in addition to including retirees who are no longer providing services to the Company in any capacity, retired officers will be considered to no longer have a “current employment status” for purposes of program eligibility notwithstanding the fact that they (i) may continue in any part-time capacity with the Company or (ii) may continue to provide services to the Company under any consulting agreement or similar agreement.
Program benefits for each eligible Tier I Retiree (and his or her spouse who is insured by CBL’s health insurance plan on the date of the retirement of the Tier I Retiree) are as follows:
for an initial period of 24 months (two years) from the date of the Tier I Retiree’s retirement, the Tier I Retiree and his or her covered spouse will be entitled to continue to participate in the CBL group medical insurance plan at no cost to the Tier I Retiree and/or his or her covered spouse;
the Tier I Retiree and his or her covered spouse will be entitled to continue participation in the CBL group medical insurance plan (as such may be amended, revised or modified from time to time and as available to then-active employees of CBL) following his or her retirement, but with the Tier I Retiree and his or her covered spouse paying the full cost for such coverage (i.e., equivalent to the then-prevailing COBRA rate) following the expiration of 24 months from the date of the Tier I Retiree’s retirement; and
upon reaching the age of Medicare eligibility or becoming eligible for other group medical coverage, the Tier I Legacy Retiree (and spouse if applicable), would cease to be eligible for the CBL group medical insurance plan.
Program benefits for each eligible Tier III Retiree (and his or her spouse who is insured by CBL’s health insurance plan on the date of the retirement of the Tier III Retiree) are as follows:
for an initial period of five (5) years from the date of the Tier III Retiree’s retirement, the Tier III Retiree and his or her covered spouse will be entitled to continue to participate in the CBL group medical insurance plan at no cost to the Tier III Retiree and/or his or her covered spouse; and
the Tier III Retiree and his or her covered spouse will be entitled to continue participation in the CBL group medical insurance plan (as such may be amended, revised or modified from time to time and as available to then-active employees of CBL) following his or her retirement, but with the Tier III Retiree and his or her covered spouse paying the full cost for such coverage (i.e., equivalent to the then-prevailing COBRA rate) following the expiration of five (5) years from the date of the Tier III Retiree’s retirement.
Any tax obligations imposed on a Tier I Retiree or a Tier III Retiree as a result of the benefit under this program will be the sole responsibility of such retiree (and his or her spouse, if applicable). The Company may elect to discontinue the Tier I Legacy Retiree benefit on a prospective basis on each annual renewal
Currently, should they retire from the Company, both Stephen D. Lebovitz and Michael I. Lebovitz would meet the criteria to be covered under the Tier I Legacy Retiree Program, and Charles B. Lebovitz would meet the criteria to be covered under the Tier III Post-65 Retiree Program. The projected benefit to any covered Tier I Retiree or Tier III Retiree under those respective programs will depend on the then-current costs of participation in CBL’s group medical insurance plan on the date of his or her retirement from CBL.
Impact of Death, Disability or Retirement on Outstanding Awards Under the 2012 Stock Incentive Plan
Time vesting restricted stock awards made to the Named Executive Officers, pursuant to either an award under the new LTIP or under a prior restricted stock grant, provide that if the grantee’s employment terminates by reason of death or disability, any portion of the award that is not vested on the date of such termination shall immediately vest in the grantee or the grantee’s estate. “Disability” for these purposes generally means the employee’s complete and permanent disability as defined by the Company’s health insurance plans or as otherwise defined by the Company from time to time. All shares of restricted stock held by the Named Executive Officers pursuant to such awards as of December 31, 2108,2020, would have been forfeited by any such officer who retired from his or her employment with the Company (except as provided in the separately negotiated agreement with Mr. Stephas, as described below).
Potential Payments Upon Termination or Change in Control for Named Executive Officers
Based on the foregoing, the following table summarizes (i) potential payments pursuant to the Executive Employment Agreements entered into in August 2020 with each NEO other than Charles B. Lebovitz, assuming in each case that the applicable triggering event occurred as of December 31, 2020:
the estimated value of the continuation of health insurance benefits for 18 months in the event of any termination of employment;
the value of cash severance payable in the event of a termination of the NEO’s employment without Cause or upon a Change of Control; and
the value of cash severance payable in the event of a termination of the NEO’s employment due to death or disability.
Named | Termination of Employment Without Cause or Upon a | Termination of Employment | Termination of | |||
Value of | Value of | Value of | Value of | Value of | Value of | |
Stephen D. Lebovitz | 45,388 | 3,250,630 | 45,388 | — | 45,388 | 1,625,315 |
Farzana Khaleel | 11,738 | 1,641,130 | 11,738 | — | 11,738 | 1,015,130 |
Michael I. Lebovitz | 34,040 | 1,435,946 | 34,040 | — | 34,040 | 809,946 |
Jeffery V. Curry | 24,650 | 1,191,210 | 24,650 | — | 24,650 | 789,210 |
(1) | Under the terms of the Executive Employment Agreements, the nature of the “Change of Control” triggering event for purposes of these payments will be defined pursuant to the terms of a future Management Incentive Program to be adopted for the Company, as contemplated by such agreements. |
(2) | Under the terms of the Executive Employment Agreements, the 18-month continuation of health insurance benefits is applicable following any termination of the employment of one of the NEOs listed above, regardless of the cause. |
The following table summarizes the additional potential payments to each NEO (including Charles B. Lebovitz) pursuant to the Company’s programs in existence prior to the adoption of the new Executive Employment Agreements during 2020, assuming in each case that the applicable triggering event occurred as of December 31, 2020:
the estimated value of any applicable benefits under either the Tier I Legacy Retiree Program or the Tier III Post-65 Retiree Program and (ii) Program;
the value of cash bonus payments under the AIP in the event of a termination of the NEO’s employment due to death or disability, or termination (other than voluntarily or for Cause, as defined in the 2012 Stock Incentive Plan) following a Change of Control;
the intrinsic value (that is, the value based on the Company’s stock price) of all LTIP Performance Stock Units or time-vested restricted stock awards that each of our Named Executive Officers (excluding Augustus N. Stephas)NEOs would have been entitled to receive or retain if (A) a Change in Control (as defined under the 2012 Stock Incentive Plan) had occurred or (B) he or she had retired, died or become disabled, assuming in each case that such event occurred as of December 31, 20182020 (and using the NYSE closing price of $1.92$0.04 per share on December 31, 2018,2020, the last trading day of the year):.
Name | Occurrence of a | Termination | Termination | |||||
|
| Value of Retiree Benefits ($)(4) |
|
| Value of Retiree Benefits ($)(4)(5) |
|
| |
Stephen D. Lebovitz | 20,427 | — | 26,294 | — | — | 26,294 | 20,427 | — |
Farzana Khaleel | 6,489 | — | — | — | — | — | 6,489 | — |
Charles B. Lebovitz | 10,983 | — | 82,166 | — | — | 82,166 | 10,983 | — |
Michael I. Lebovitz | 6,489 | — | 26,294 | — | — | 26,294 | 6,489 | — |
Jeffery V. Curry | 6,788 | — | — | — | — | — | 6,788 | — |
| Name | Occurrence of a Change in Control (1) | Termination Due to Retirement | Termination Due to Death/Disability | |||||
Restricted Stock/ LTIP Awards ($)(2) | Cash Bonus Payments Under AIP ($) | Value of Tier I or Tier III Retiree Benefits ($)(3) | Restricted Stock/ LTIP Awards ($)(2) | Cash Bonus Payments Under AIP ($) | Value of Tier I or Tier III Retiree Benefits ($)(3)(4) | Restricted Stock/ LTIP Awards ($)(2) | Cash Bonus Payments Under AIP ($) | |
| Stephen D. Lebovitz | 395,821 | 1,015,875 | 32,577 | — | — | 32,577 | 395,821 | 1,015,875 |
| Farzana Khaleel | 129,260 | 338,625 | — | — | — | — | 129,260 | 338,625 |
| Charles B. Lebovitz | 280,915 | 846,563 | 81,443 | — | — | 81,443 | 280,915 | 846,563 |
| Michael I. Lebovitz | 129,260 | 338,625 | 32,577 | — | — | 32,577 | 129,260 | 338,625 |
| Jeffery V. Curry (5) | 97,142 | N/A | — | — | — | — | 97,142 | N/A |
(1) | |
Neither the Tier I Legacy Retiree Program nor the Tier III Post-65 Retiree Program provide for any benefits upon the occurrence of a Change in Control in the absence of an eligible employee retiring/ ceasing to have a “current employment status” with the Company and otherwise satisfying its respective requirements (as described above). Accordingly, for purposes of the foregoing table, the only consequences of a Change in Control (as defined in the 2012 Stock Incentive Plan) would be (A) the immediate vesting of any outstanding, unvested shares of restricted stock subject to awards granted under such plan and (B) in the event a Named Executive Officer were terminated, other than voluntarily or for Cause (as defined in the 2012 Stock Incentive Plan) following such event, an AIP bonus payment equal to such officer’s full Target Cash Bonus Award for the period. |
(2) | |
This value is calculated based on (i) the number of unvested shares of restricted stock each Named Executive Officer would retain and (ii) the pro-rated number of shares each Named Executive Officer would have received pursuant to PSUs awarded under the LTIP, in the event of death, disability or termination other than for Cause (as defined in the 2012 Stock Incentive Plan) within 24 months following a Change of Control and prior to the end of the applicable restricted period or PSU performance period (as applicable), had such contingency occurred on December 31, |
Named | Number of Shares of Time-Vested Restricted Stock Retained | Pro-Rated Shares Awarded Under |
Stephen D. Lebovitz | 510,677 | 0 |
Farzana Khaleel | 162,224 | 0 |
Charles B. Lebovitz | 274,564 | 0 |
Michael I. Lebovitz | 162,224 | 0 |
Jeffery V. Curry | 169,708 | 0 |
| Named Executive Officer | Number of Shares of Time-Vested Restricted Stock Retained | Pro-Rated Shares Awarded Under PSUs for 2016-2018 LTIP Performance Period | Pro-Rated Shares Awarded Under PSUs for 2017-2019 LTIP Performance Period | Pro-Rated Shares Awarded Under PSUs for 2018-2020 LTIP Performance Period |
| Stephen D. Lebovitz | 206,157 | 0 | 0 | 0 |
| Farzana Khaleel | 67,323 | 0 | 0 | 0 |
| Charles B. Lebovitz | 146,310 | 0 | 0 | 0 |
| Michael I. Lebovitz | 67,323 | 0 | 0 | 0 |
| Jeffery V. Curry | 50,595 | 0 | 0 | 0 |
Since the PSUs granted for the 2018-2020 performance period expired without value on December 31, 2020, and the PSUs originally granted for the 2020-2022 performance period were cancelled in August 2020 as discussed in the Compensation Discussion and Analysis section above, the only PSUs that remained outstanding as of December 31, 2020 were those granted for the 2019-2021 performance period. No such pro-rated payout under a PSU would be triggered in the event of the retirement of any of these Named Executive Officers, nor would any such Named Executive Officer retain unvested shares of restricted stock if he or she should retire.
(3) | Since 2020 AIP grants made in February 2020 were cancelled in August 2020 as discussed in the Compensation Discussion and Analysis section above, there would have been no additional cash bonus payable pursuant to the 2020 AIP if any of the events summarized in the table had occurred as of December 31, 2020. |
(4) | Estimated based on current premiums payable under CBL’s group medical insurance plan as of December 31, |
employment with the Company as of December 31, |
(5) | |
Retirement due to disability by any Named Executive Officer who otherwise satisfies the requirements of either the Tier I Legacy Retiree Program or the Tier III Post-65 Retiree Program would result in the same benefits as retirement for any other reason; however, there would be no benefits under either such program in the event of the death of a Named Executive Officer. |
| Value of Each Element of Compensation Provided Pursuant to the Stephas Retirement Agreement | Total Compensation Provided Pursuant to the Stephas Retirement Agreement ($) | |||
Additional Cash Retirement Benefit Payments ($)(1) | Cash Bonus Payments Under 2018 AIP ($)(2) | Value of Vested Restricted Stock/LTIP Awards ($)(3) | Value of Tier III Retiree Insurance Benefits ($)(4) | |
| 1,500,000 | 284,445 | 118,802 | 89,240 | 1,992,487 |
The following table sets forth information regarding the compensation of each Non‑Employee Director for the Company’s fiscal year ended December 31, 2018.2020. Directors who are employees of the Company do not receive any separate compensation for service in their capacity as a director.
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) |
A. Larry Chapman | 71,333 | 100,000 | 171,333 |
Matthew S. Dominski | 93,626 | 100,000 | 193,626 |
John D. Griffith | 62,417 | 100,000 | 162,417 |
Richard J. Lieb | 70,667 | 100,000 | 170,667 |
Kathleen M. Nelson | 66,876 | 100,000 | 166,876 |
Michael L. Ashner (3)(4) | 48,126 | 16,667 | 64,793 |
Carolyn B. Tiffany (4) | 66,876 | 16,667 | 83,543 |
Scott D. Vogel | 133,226 | — | 133,226 |
| Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) |
| Gary L. Bryenton (3) | 80,000 | 100,000 | 180,000 |
| A. Larry Chapman | 80,000 | 100,000 | 180,000 |
| Matthew S. Dominski | 105,000 | 100,000 | 205,000 |
| John D. Griffith | 70,000 | 100,000 | 170,000 |
| Richard J. Lieb | 75,000 | 100,000 | 175,000 |
| Gary J. Nay (3) | 70,000 | 100,000 | 170,000 |
| Kathleen M. Nelson | 75,000 | 100,000 | 175,000 |
(1) | |
This column reports the aggregate amount of all cash compensation earned by each Non-Employee Director during |
(2) | |
This column represents the grant date fair value of annual stock awards granted to the Non-Employee Directors during |
(3) | |
Amounts reported for Michael L. Ashner reflect compensation for his service as |
(4) | Michael L. Ashner and Carolyn B. Tiffany each were appointed as new directors of the Company effective |
Both the Company’s senior management and the Compensation Committee intend for the compensation of the Company’s Non-Employee Directors to be competitive and reasonable in relation to the directors’ responsibilities for supervising the overall management and policies of the Company, and in relation to the compensation of Non-Employee Directors at the same group of peer companies reviewed by the Compensation Committee in setting base salaries for the Named Executive Officers (taking into account differences in size and scope of operations between the Company and certain of its peers). The Company has historically provided additional compensation to Non-Employee Directors who serve on the Executive Committee, and to the Chairman of the Audit Committee, in recognition of the additional workload undertaken by such directors.
While senior management and the Compensation Committee periodically review the compensation paid to the Non-Employee Directors, the Company typically has not adjusted such compensation on an annual basis, but only when senior management and the Compensation Committee decide that such review indicates that adjustments may be warranted. As in the case of the Compensation Committee’s review of executive salaries at the peer companies discussed above, such review is only intended to provide the Compensation Committee with a general understanding of whether the Company’s compensation of its outside directors is competitive for purposes of attracting and retaining well-qualified individuals to serve as Non-Employee Directors of the Company. As in the case of executive officer compensation, the Compensation Committee does not engage in any formal “benchmarking” comparisons of the compensation of the Company’s directors against that of directors of the peer companies considered. The historical equity component of director compensation, as described under “Director Compensation” herein, in conjunction with the Company’s stock ownership guidelines for Non-Employee Directors, ishas been intended by the Compensation Committee to align the interests of the Non-Employee Directors with those of the Company’s shareholders by ensuring that they attain and maintain a significant proprietary interest in the Company.
In November 2016,December 2020, upon the recommendation of the Compensation Committee in connection with the additional director workload related to the Chapter 11 Cases, the Board of Directors added a Monthly Service Fee to the schedule of fees that had been in effect since January 1, 2017 governing the cash portion of the Company’s compensation arrangements for each Non-Employee Director (other than Scott D. Vogel). FPL completed a related market review and determined that the total compensation for CBL’s Non-Employee Directors following the addition of the new monthly service fee, which went into effect November 1, 2020, remained in-line with Non-Employee director compensation for the Asset-Based Peer Group outlined under “Summary of the KERP” in the Compensation Discussion and Analysis section above.
Additionally, in December 2020, upon recommendation of the Compensation Committee, the Board of Directors voted to adjusteliminate payment of the annual award of shares of restricted Common Stock pursuant to the Company’s compensation arrangements for2012 Stock Incentive Plan, as amended, that otherwise would have continued to be awarded each Non-Employee Director effective January 1, 2017, in a manner which had the effect of transitioning the Non-Employee Directors’ cash compensation to an annual fee basis, and eliminating all prior monthly or meeting-based fees. Each Committee Chair receives the annual fee stated below in lieu of the applicable annual Committee Member fee. The following table summarizesCompany (other than Scott D. Vogel) at the Company’s compensation arrangements forconclusion of each year having a value of $100,000, beginning with the year ended December 31, 2020. Non-Employee Director following these revisions, which wereCompensation Fees in effect during allas of 2018:
Description | Non-Employee |
Annual Fee for each Non-Employee Director | $40,000 |
Monthly Service Fee for each Non-Employee Director | $10,000 |
Annual Audit Committee Member Fee | $20,000 |
Annual Committee Member Fee | $15,000 |
Annual Fee – Audit Committee | $25,000 |
Annual Fee – Compensation Committee | $20,000 |
Annual Fee – Nominating/Corporate Governance | $20,000 |
Annual Fee – Capital Allocation Committee Chairman (2) | $20,000 |
Annual Fee – Lead Independent Director | $25,000 |
(1) | All Non-Employee Directors receive these fees except for Scott D. Vogel, who is compensated as described under “Cash Compensation Arrangements for Director Scott D. Vogel” below. |
(2) | Each Committee Chair receives the stated annual fee in lieu of the applicable annual Committee Member fee. The Capital Allocation Committee was added in November 2019. Only Non-Employee Director members of the Capital Allocation Committee and the Executive Committee receive the fees reflected in table; Company employees receive no additional compensation for Board or Committee service. |
Each Non-Employee Director also receives reimbursement of expenses incurred in attending meetings.
Impact of 2020 COVID-19 Cost Reduction Program
In April 2020, as part of a comprehensive cost reduction program put in place by the Company to help mitigate the effect the COVID-19 pandemic had on the Company and its operations, the Board of Directors voted to temporarily reduce Non-Employee Director compensation. The temporary fee reduction was in place from April 1, 2020 through August 31, 2020. Non-Employee Director fees were reduced by 50% for two months and 10% for the remainder of the program. Full Non-Employee Director fees resumed September 1, 2020.
Prior to the changes made in December 2020, effective January 1, 2017, pursuant to the terms of the Company’s 2012 Stock Incentive Plan, as amended, by Amendment No. 1 thereto and as further amended by Amendment No. 2 in conjunction with the Company’s 2017 updates to director compensation, for each fiscal year of the Company Non-Employee Directors also will receive either (i) an annual grant of options to purchase 1,000 shares of Common Stock having an exercise price equal to 100% of the fair market value of the shares of Common Stock on December 31 of such fiscal year or (ii) as was the case in both January 2018 and January 2019,Director received an annual award of shares of restricted Common Stock of the Company at the conclusion of each year (which may be payable on the first trading day of the next succeeding calendar year) having a value of $100,000, with the number of shares granted to be based on the average of the high and low trading prices for the Company’s Common Stock on the grant date.
Additionally, effective as of January 1, 2017, any Non-Employee Director that may join the terms of the Company’s 2012 Stock Incentive Plan, as amended, any person who becomes a Non-Employee DirectorCompany in the future will, upon joining the Board of Directors, receive an initial grant of shares of restricted Common Stock of the Company pursuant to the 2012 Stock Incentive Plan, as amended, having a value of $25,000, with the number of shares granted to be based on the average of the high and low trading prices for the Company’s Common Stock on the grant date.
The restrictions on shares of Common Stock received by the Non-Employee Directors set forth in the 2012 Stock Incentive Plan, as amended, provide that such shares may not be transferred during the Non-Employee Director’s term and, upon a Non-Employee Director ceasing to be a member of the Board, all transfer restrictions concerning such Non-Employee Director Shares shall immediately be removed, and such shares shall thereupon be freely transferrable by the Non-Employee Director or by his or her estate or legal representative, as applicable. Each holder of a Non-Employee Director option granted pursuant to the above-stated arrangement has the same rights as other holders of options in the event of a change in control. Options granted to the Non-Employee Directors (i) shall have a term of 10 years from date of grant, (ii) are 100% vested upon grant, (iii) are non-forfeitable prior to the expiration of the term except upon the Non-Employee Director’s conviction for any criminal activity involving the Company or, if non-exercised, within one year following the date the Non-Employee Director ceases to be a director of the Company, and (iv) are non-transferable.
Cash Compensation Arrangements for Director Scott D. Vogel
In connection with the appointment of Scott D. Vogel to the Board of Directors, effective October 7, 2020, the Compensation Committee and the Board of Directors determined that Mr. Vogel would be compensated through cash payments of $35,000 per month made to Vogel Enterprises, LLC, a limited liability company of which Mr. Vogel is the sole member, in lieu of the Company’s standard cash compensation arrangements for Non-Employee Directors. Mr. Vogel will receive a minimum of six month’s cash compensation ($210,000), unless he voluntarily resigns from the Company’s Board of Directors prior to April 7, 2021. It also was determined at that time that Mr. Vogel would not receive any of the equity grants normally provided for Non-Employee Directors pursuant to the terms of the Company’s 2012 Stock Incentive Plan, as amended.
The following table sets forth information as to the Company’s equity compensation plans as of the end of the Company’s 20182020 fiscal year:
Plan Category | (a) Number of securities to be issued upon exercise of the outstanding options, warrants and rights | (b) Weighted-average exercise price of outstanding options, warrants and rights | (c) Number of securities remaining available for future issuance under equity compensation plans reflected in column (a)) |
Equity compensation plans approved by security holders | None | N/A | 6,072,835 |
Equity compensation plans not approved by security holders | None | N/A | N/A |
TOTAL | None | N/A | 6,072,835 |
The Compensation Committee of the Board of Directors consists of Matthew S. Dominski (Chairman), A. Larry Chapman, and John D. Griffith.Griffith and Carolyn B. Tiffany. None of the members of the Compensation Committee are or have been officers or employees of the Company or any of its subsidiaries and each member of the Compensation Committee is an Independent Director.
No executive officer of the Company served on any board of directors or compensation committee of any entity (other than the Company or its subsidiaries) with which any member of the Compensation Committee, or any other director of the Company, is affiliated.
The information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information or report be deemed incorporated by reference into any future filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference in such filing.
The Compensation Committee of the Board of Directors of the Company currently is composed of threefour Independent Directors, Matthew S. Dominski (Chairman), A. Larry Chapman, and John D. Griffith.Griffith and Carolyn B. Tiffany. The Compensation Committee operates under an amended and restated written charter adopted by the Board of Directors on May 14, 2013. A copy of the amended and restated charter is available and can be accessed in the “Invest – Investor Relations – Committee Charting” section of the Company’s website at cblproperties.com. The Company’s Board of Directors has determined that each of the members of the Compensation Committee is “independent” pursuant to the listing standards of the NYSE as currently applicable.
The Compensation Committee has reviewed and discussed with Management of the Company the Compensation Discussion and Analysis required by Item 402(b) of SEC Regulation S-K and presented elsewhere in this Proxy Statement.
Based on the Compensation Committee’s review and discussions referred to above, the Compensation Committee recommended that the Board of Directors include the Compensation Discussion and Analysis in the Company’s Proxy Statement for its 20192021 Annual Meeting and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018,2020, filed with the SEC.
COMPENSATION COMMITTEE
Matthew S. Dominski (Chairman)
A. Larry Chapman
John D. Griffith
Carolyn B. Tiffany
The information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information or report be deemed incorporated by reference into any future filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference in such filing.
The Audit Committee of the Board of Directors of the Company currently is composed of three Independent Directors, A. Larry Chapman (Chairman), Matthew S. Dominski and Richard J. Lieb.Carolyn B. Tiffany. The Audit Committee operates under the second amended and restated written charter adopted by the Board of Directors on August 14, 2013. A copy of the second amended and restated charter is available and can be accessed in the “Invest – Investor Relations – Committee Charting” section of the Company’s website at cblproperties.com. The Company’s Board of Directors has determined that each of the members of the Audit Committee is “independent” pursuant to the listing standards of the NYSE as currently applicable.
Management is responsible for the Company’s internal controls and financial reporting process. The Company’s independent auditors are responsible for performing an independent audit of the Company’s financial statements in accordance with auditing standards generally accepted in the United States and for issuing a report thereon, as well as expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has met and held discussions with Management and the Company’s independent auditors. Management reported to the Audit Committee that the Company’s consolidated financial statements for the Company’s 20182020 fiscal year were prepared in accordance with accounting principles generally accepted in the United States, and the Audit Committee has reviewed and discussed these consolidated financial statements with Management and the Company’s independent auditors. The Audit Committee discussed with the independent auditors the matters required to be discussed under currentby applicable requirements of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 1301 concerning auditor communications with Audit Committees.
The Company’s independent auditors also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent auditors’ communications with the Audit Committee concerning independence, and the Audit Committee discussed with the independent auditors their firm’s independence. The Audit Committee considered whether the provision of services by the independent auditors (other than audit services) is compatible with maintaining the independent auditors’ independence.
Pursuant to the mandates of the Sarbanes-Oxley Act of 2002, the Company’s Board of Directors has determined that A. Larry Chapman, an Independent Director and Chairman of the Audit Committee, as well as Matthew S. Dominski and Richard J. Lieb, bothCarolyn B. Tiffany, all Independent Directors and members of the Audit Committee, each qualify as an “audit committee financial expert” as such term is defined by the SEC.
Based on the Audit Committee’s review and discussions referred to above, the Audit Committee recommended that the Board of Directors include the Company’s audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018,2020, filed with the SEC and provide in such Annual Report on Form 10-K the disclosure of A. Larry Chapman, Matthew S. Dominski and Richard J. LiebCarolyn B. Tiffany as “audit committee financial experts.”
AUDIT COMMITTEE
A. Larry Chapman (Chairman)
Matthew S. Dominski
Carolyn B. Tiffany
Review and Approval of Related Person Transactions
The Company’s Bylaws provide that any contract or transaction (i) between the Company or any entity (such as the Operating Partnership) for which it serves as a general partner, and one or more directors or officers of the Company or (ii) between the Company or any such entity and any other entity in which one or more of its directors or officers are directors or officers, or have a financial interest, must be approved by a majority of the Independent Directors (excluding any director who has an interest in the matter) or by the Company’s shareholders, after the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are known to them. The Company’s Code of Business Conduct also contains provisions governing the approval of certain transactions involving the Company and employees (or immediate family members of employees, as defined therein) that are not subject to the provision of the Bylaws described above.
These provisions operate in conjunction with a Related Party Transactions Approval Policy adopted by the Company’s Audit Committee and Independent Directors during 2012 which, as amended to date, includes the following material features:
The policy applies to any transaction in which (i) the Company or the Operating Partnership or any subsidiary of either of them, is a participant and (ii) any “Related Person” (as defined by applicable SEC rules) has a direct or indirect material interest.
The policy expressly excepts from its approval and ratification requirements certain ordinary course transactions – including employee and director compensation, the redemption of Operating Partnership interests pursuant to CBL Rights (as described below) and any transactions aggregating to less than $10,000 per Related Person per year.
The policy establishes procedures for the collection and analysis of information concerning Related Person transactions and for quarterly reporting by the Compliance Committee to the Audit Committee and the Independent Directors concerning all transactions determined to be subject to the policy.
The Audit Committee will then determine whether to recommend the transaction (or annual budget for a series of similar transactions, as applicable) be ratified or approved by the Independent Directors (excluding participation by any director with an interest therein). The Audit Committee will only make such recommendation if, upon review of all material terms of the transaction, it determines that (i) the transaction is in, or is not inconsistent with, the best interests of the Company, and (ii) the terms of such transaction are at least as favorable to the Company as could be obtained from an unrelated third party. If a majority of the Independent Directors vote to accept a positive recommendation of the Audit Committee, the transaction (or annual budget) is approved under the policy; provided, however, that transactions involving a Related Person who has such status solely due to being a 5% shareholder, where officers, directors and their family members have no interest in such transaction, may be approved under the Company’s regular Board procedures.
Approval or ratification of a transaction under the policy does not supersede applicable requirements of the Company’s Bylaws or Code of Business Conduct.
The application of these provisions to the review and approval of those transactions and relationships reported for fiscal 20182020 is described in pertinent detail below.
Management Company and Management Agreement
The Company is party to a management agreement with the Management Company pursuant to which the Management Company renders management and administrative services with respect to the Company’s properties. The Management Company also provides management services for certain properties owned by CBL’s Predecessor and certain other third parties for which the Management Company is paid a management fee. See “Retained Property Interests.” The following individuals, collectively, own 100% of the equity interests in CBL’s Predecessor: Charles B. Lebovitz (49.50%); the four children of Charles B. Lebovitz (Stephen D. Lebovitz (11.21%), Michael I. Lebovitz (11.21%), Alan L. Lebovitz (7.25%), and Beth Lebovitz-Backer (7.25%)); Ben S. Landress (6.82%); and Charles B. Lebovitz Grantor Trust (6.76%). The Operating Partnership owns 100% of the Management Company’s outstanding preferred stock and common stock.
Operating Partnership Agreement; CBL Rights
The Company, through subsidiaries, serves as the sole general partner of the Operating Partnership and owned, as of March 15, 2019,
Pursuant to the Operating Partnership Agreement, the limited partners possess CBL Rights, consisting of the right to exchange all or a portion of their Common Units or Special Common Units (as applicable) in the Operating Partnership for shares of Common Stock or their cash equivalent, at the Company’s election. The CBL Rights may be exercised at any time and from time to time to the extent that, upon exercise of the CBL Rights, the exercising party shall not beneficially or constructively own shares of Common Stock in excess of the applicable share ownership limits set forth in the Company’s Certificate of Incorporation. The Company, however, may not pay in shares of Common Stock to the extent that this would result in a limited partner beneficially or constructively owning in the aggregate more than its applicable ownership limit or otherwise jeopardize, in the opinion of counsel to the Company, the Company’s qualification as a REIT for tax purposes.
On March 10, 2020, the Company issued an aggregate of 16,333,947 shares of Common Stock to settle exchange transactions concerning the exercise of CBL Rights with respect to Common Units in the Operating Partnership held by certain related parties, as detailed in the table below:
Limited Partner Exercising | Number of Common Units Exchanged / Shares Issued |
CBL & Associates, Inc. | 15,520,703 |
Stephen D. Lebovitz | 480,297 |
Two irrevocable trusts established by Stephen D. Lebovitz | 59,015 |
Michael I. Lebovitz | 212,346 |
Two irrevocable trusts established by Michael I. Lebovitz | 61,586 |
TOTAL | 16,333,947 |
Additionally, on or about July 31, 2020, the Company issued an aggregate of 1,783,403 shares of Common Stock to settle exchange transactions concerning the exercise of CBL Rights with respect to Common Units in the Operating Partnership held by certain related parties, as detailed in the table below:
Limited Partner Exercising | Number of Common Units Exchanged / Shares Issued |
Alan L. Lebovitz | 155,847 |
An irrevocable trust established by Alan L. Lebovitz | 52,980 |
Charles B. Lebovitz | 756,350 |
Four partnerships controlled by CBL & Associates, Inc. (CBL Employees Partnership/Conway – 58,203 Units; Foothills Plaza Partnership – 92,793 Units; Girvin Road Partnership – 7,254 Units and Warehouse Partnership – 50,425 Units) | 208,675 |
College Station Associates | 489,071 |
Ben S. Landress* | 120,480 |
TOTAL | 1,783,403 |
*The exchange with Ben S. Landress closed on August 5, 2020. Mr. Landress ceased to serve as an executive officer of the Company effective May 8, 2020.
The number of shares of Common Stock received by the limited partners of the Operating Partnership upon exercise of CBL Rights will beis based upon the equivalent number of partnership units owned by the limited partners on a one-for-one basis, and the amount of cash received by the limited partners upon such exercise, ifin any exchange where the Company elects to pay cash, will beis based upon the market price of the shares of Common Stock at the time of exercise.
CBL Rights will expire in November 2043 if not exercised prior to that date.
Retained Property Interests and Management Services
CBL’s Predecessor owns interests in outparcels at certain of the Company’s malls and a 21.25% minority interest in Jacksonville Avenues Limited Partnership (“
the Avenues”), the majority interest of which is owned by third parties. A portion of the annual property insurance premiums paid by the Avenues is paid to a captive insurance subsidiary that is wholly owned by the Operating Partnership. Such payments$492,282 in 2018, were reviewed by the Company’s Audit Committee.2020. Additionally, while the Avenues is managed by a third party, CBL’s Predecessorthe Avenues paid the Management
Certain Company officers and employees are partners in partnerships that had 1615 leases of space, representing 13,81712,961 square feet in 1211 of the Company’s malls during 2018.2020. One such space representing 1,001 square feet was at a mall that the Company disposed of during 2020. Such spaces are operated as food service establishments. The aggregate of all lease payments made (or to be made) to the Company by such entities from January 1, 20182020 through the end of the contract term of each of the relevant leases (based on estimates of tenant cost recoveries currently in effect) is $8.8$6.3 million, with such payments during fiscal 20182020 having totaled $1.9$1.5 million. The following table sets forth information concerning the pro-rata interest in the aggregate of all such lease payments to the Company of each individual who participates in any of these partnerships and served as an executive officer of the Company during 2018,2020, to the extent that the value of such officer’s interest in the aggregate lease payments to the Company exceeds $120,000:
Officer’s Name and Title | Number of Partnerships in Which The Officer Participates(1) | Pro-Rata Interest in Total Lease Payments to the Company Based on Officer’s Aggregate Ownership Interest($)(2) |
Chairman of the Board of Directors | 6 | 54,659 |
Stephen D. Lebovitz Director and Chief Executive Officer | 2 | 98,206 |
Farzana Khaleel Executive Vice President – Chief Financial | 2 | 105,279 |
Michael I. Lebovitz President | 6 | 318,218 |
Ben S. Landress Executive Vice President – Emeritus(3) | 2 | 251,886 |
Officer’s Name and Title | Number of Partnerships in Which The Officer Participates(1) | Pro-Rata Interest in Total Lease Payments to the Company Based on Officer’s Aggregate Ownership Interest($)(2) |
Charles B. Lebovitz Chairman of the Board of Directors | 7 | 75,363 |
Stephen D. Lebovitz Director and Chief Executive Officer | 2 | 147,973 |
Farzana Khaleel Executive Vice President – Chief Financial Officer and Treasurer | 2 | 196,549 |
Augustus N. Stephas Executive Vice President – Chief Operating Officer (3) | 7 | 793,936 |
Michael I. Lebovitz President | 7 | 401,687 |
Ben S. Landress Executive Vice President – Management | 2 | 359,482 |
(1) | |
These partnership interests are held by each such individual either directly or, on a pro-rata basis, through their ownership interests in CBL’s Predecessor or other affiliated entities. |
(2) | |
Excludes any future percentage rents based on sales levels which are not presently determinable. Additionally, such partnerships (in the aggregate) paid $3,000 to the Management Company during |
(3) | |
Ben S. Landress ceased to serve as |
Each of these leases has been approved at the time that they were entered into by the Independent Directors in accordance with the Bylaws, and the renewals of such leases that occurred during 20182020 were all ratified by the Independent Directors. In connection with such approvals, the Independent Directors considered management’s opinion that, at the time each of these leases and renewals were entered into, they provided for rental payments at market rates and terms.
Alan L. Lebovitz, a son of Charles B. Lebovitz, servedserves as the Company’s Senior Vice President – Asset Management during 2017 prior to his promotion to the position of Executive Vice President – Management, effective February 13, 2018.Management. He receives compensation from the Company commensurate
cash compensation paid to Mr. Lebovitz during 2020, including a cash bonus paid in March 2020 for service in 2019 and the KERP bonus payment approved in August 2020 and paid in September 2020; and
the grant date fair value of equity awards granted during the yearin February 2020, calculated in accordance with Financial Accounting Standards Board ASC Topic 718) was $719,809. He718.
Alan Lebovitz also ishas been eligible for equity awards under the Company’s 2012 Stock Incentive Plan and the Company’s insurance and other employee benefit programs on the same basis as other, similarly situated employees. The compensation of Alan L. Lebovitz is subject to approval by the Compensation Committee in connection with that Committee’s approval of the compensation of all officers of the Company of the level of senior vice president or higher.
Other
Charles B. Lebovitz is currently an advisory director of First TennesseeHorizon Bank, N.A., Chattanooga, Tennessee (“
RATIFICATION OF THE SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee evaluates the selection of the Company’s independent auditor each year, and has determined to recommend the appointment of Deloitte & Touche LLP (“
Deloitte”) to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31,Independent Registered Public Accountants’ Fees and Services
The Company was billed for professional services provided during fiscal years 20172019 and 20182020 by Deloitte in the amounts set forth in the following table.
| 2019 |
| 2020 |
Audit Fees (1) | $1,319,593 |
| $1,541,607 |
Audit-Related Fees (2) | 200,709 |
| 204,700 |
Tax Fees – Compliance (3) | 246,000 |
| 246,000 |
Tax Fees – Consulting (4) | 266,180 |
| 448,835 |
All Other Fees (5) | 3,790 |
| 3,790 |
Total | $2,036,272 |
| $2,444,932 |
| 2017 | 2018 | ||||||||
| Audit Fees (1) | $964,154 | $1,136,862 | |||||||
| Audit-Related Fees (2) | 211,700 | 201,774 | |||||||
| Tax Fees – Compliance (3) | 241,000 | 246,000 | |||||||
| Tax Fees – Consulting (4) | 367,566 | 431,480 | |||||||
| All Other Fees (5) | 0 | 3,790 | |||||||
| Total | $1,784,420 | $2,019,906 | |||||||
(1) | |
Consists of fees billed for professional services in connection with the audit of the Company’s annual financial statements for the fiscal years ended December 31, |
(2) | |
Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees”. These services include audits of the Company’s subsidiaries pursuant to requirements of certain loan agreements and joint venture agreements and other consultations. |
(3) | |
Consists of fees billed for professional services for assistance regarding federal and state tax compliance. |
(4) | |
Consists of fees billed for professional services for tax advice and tax planning, which consists of tax services related to joint ventures and tax planning. |
(5) | |
Consists of subscription fees for an online accounting research tool. |
The Audit Committee of the Board of Directors has considered the services rendered by Deloitte for services other than the audit of the Company’s financial statements and has determined that the provision of these services is compatible with maintaining the independence of Deloitte.
The Audit Committee has adopted a policy that it is required to approve all services (audit and/or non-audit) to be performed by the independent auditor to assure that the provision of such services does not impair such auditor’s independence. All services, engagement terms, conditions and fees, as well as changes in such terms, conditions and fees, must be approved by the Audit Committee in advance. The Audit Committee will annually review and approve services that may be provided by the independent auditor during the next year and will revise the list of approved services from time to time based on subsequent determinations. The Audit Committee believes that the independent auditor can provide tax services to the Company such as tax compliance, tax planning and tax advice without impairing such auditor’s independence and that such tax services do not constitute prohibited services pursuant to SEC and/or NYSE rules. The authority to approve services may be delegated by the Audit Committee to one or more of its members including the Chairman of the Audit Committee, but may not be delegated to management. If authority to approve services has been delegated to an Audit Committee member, any such approval of services must be reported to the Audit Committee at its next scheduled meeting. The Audit Committee has not relied on the
de minimis exception under applicable SEC rules in approving any of the non-audit fees described above.Recommendation and Vote Necessary to Approve the Proposal
The Board of Directors, in concurrence with the Audit Committee, proposes and recommends that the shareholders ratify the selection of Deloitte to serve as the independent auditors for the Company’s fiscal year ending December 31, 2019.2021. Unless otherwise directed by the shareholders,shareholder submitting such proxy, proxies received in response to this solicitation by the Board of Directors will be voted for approval of the selection of Deloitte to serve as the Company’s independent auditors for the 20192021 fiscal year.
The ratification of the selection of Deloitte as the Company’s independent auditors for the 20192021 fiscal year must be approved by a majority of the votes cast by shares of Common Stock present or represented at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE RATIFICATION OF THE SELECTION OF
DELOITTE & TOUCHE LLP AS THE COMPANY’S
INDEPENDENT AUDITORS FOR 2019
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
Description of Advisory Vote
As previously reported in the Current Report on Form 8-K that we filed with the SEC on May 12, 2017, and in accordance with the advisory recommendation of our shareholders at the 2017 Annual Meeting, our Board of Directors has determined that we will hold a nonbinding, advisory vote to approve the compensation paid to our Named Executive Officers pursuant to Section 14A of the Exchange Act once every year. Accordingly, we are including a proposal for our shareholders to vote to approve, on a nonbinding, advisory basis, the compensation of our Named Executive Officers as described in the “Executive Compensation” section comprising pages 2729 through 6762 of this proxy statementProxy Statement (including the Compensation Discussion and Analysis as well as the related compensation tables and narrative discussions set forth in the “Executive Compensation” section).
The Company has statutory officers, but no employees. Our officers, including the Named Executive Officers, receive all of their compensation in their capacity as employees of the Management Company, which also employs all of the other personnel engaged in the operation of our business. None of our Named Executive Officers is compensated pursuant to an employment agreement with the Company and the Company does not pay them salaries or bonuses or provide them other compensation or benefits, except for the grants of equity awards under our Stock Incentive Plan as described above in the “Executive Compensation” section of this proxy statement.
As described in greater detail in the Compensation Discussion and Analysis above, beginning with the Company’s 2015 fiscal year, our Compensation Committee has approved and implemented new incentive compensation programs for the Company’s Named Executive Officers designed to balance short-term and long-term performance and operational goals as well as stock price performance, and provide the appropriate level of objectivity with subjectivity in an effort to support our Company’s business plan and strategy. The Compensation Committee’s objectives in administering our executive compensation programs are to ensure that pay levels and incentive compensation are effective in attracting and retaining highly qualified personnel, while also linking overall compensation to the Compensation Committee’s evaluation of both executive and Company performance and serving our objective of linking management’s long-term economic interests with those of CBL’s shareholders. This advisory vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the compensation philosophy, policies, and practices described in this proxy statement.
Shareholder Resolution
Under this Proposal 3, shareholders have the opportunity to vote for, against, or abstain from voting with respect to the following resolution:
RESOLVED
, that the compensation paid to the Named Executive Officers of CBL & Associates Properties, Inc. (the “Company”), as disclosed pursuant to Item 402 of SEC Regulation S-K in the “Executive Compensation” section of the Company’sRecommendation and Vote Necessary to Approve the Advisory Proposal; Advisory Nature
Approval of the shareholder resolution that is the subject of this Proposal 3 will require the affirmative vote of a majority of the votes cast by shares of our Common Stock present or represented at the Annual Meeting. Unless otherwise directed by the shareholders,shareholder submitting such proxy, proxies received in response to this solicitation by the Board of Directors will be voted for approval of such resolution. The shareholder vote on this proposal is advisory and nonbinding in nature, serves only as a recommendation
to our Compensation Committee and Board of Directors, and will not overrule any decisions previously made by the Company, the Compensation Committee or the Board of Directors with respect to executive compensation, nor will it create any duty for the Company, the Compensation Committee or the Board of Directors to take any action in response to the outcome of the vote. Director compensation disclosed in this proxy statementProxy Statement is not subject to or covered by this advisory vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE APPROVAL OF THE FOREGOING ADVISORY RESOLUTION
RELATING TO EXECUTIVE COMPENSATION
In accordance with the rules established by the SEC, shareholder proposals to be included in the Company’s Proxy Statement with respect to the 20202022 Annual Meeting of Shareholders must be received by the Company at its executive offices located at 2030 Hamilton Place Blvd., Suite 500, CBL Center, Chattanooga, Tennessee 37421-6000, Attention: Corporate Secretary no later than November 23, 2019,December 24, 2021, and must comply with other applicable SEC rules.
In addition, the Company’s Bylaws provide that any shareholder of record desiring to nominate a director or have a shareholder proposal considered at an annual meeting must provide written notice of such nomination or proposal and prescribed supporting documentation, as set forth in the Bylaws, to the Company at its principal executive offices not less than 90 days (e.g., February 9, 2020) days24, 2022) nor more than 120 days (e.g., January 10, 2020)25, 2022) prior to the anniversary date of the prior year��syear’s annual meeting (the “
Further, the Bylaws provide that, in order to utilize the proxy access mechanism adopted by our Board of Directors in February 2016 (as set forth in Section 2.8 of the Bylaws and described in greater detail in our Current Report on Form 8-K filed with the SEC dated February 10, 2016), in addition to satisfying all other relevant requirements under Section 2.8, a nominating shareholder or group must provide a prescribed notice requesting the inclusion of director nominees in the Company’s proxy materials and provide other required information to the Company not less than 120 days (e.g., January 10, 2020)25, 2022) nor more than 150 days (e.g., December 11, 2019)26, 2021) prior to the Anniversary Date specified above. Section 2.8 also provides that, in the event the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such Anniversary Date, such notice and prescribed supporting documentation must be provided not earlier than 150 days prior to such annual meeting and not later than 5:00 p.m. Eastern Time on the later of the 120th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made.
If you and other residents at your mailing address own common stock in street name, your broker or bank may have sent you a notice that your household will receive only one Notice of Internet Availability of Proxy Materials or one annual report and proxy statement (together, the “proxy materials”) in the event you elected to receive paper copies of proxy materials.. This practice is known as “householding.” If you did not respond that you did not want to participate in householding, you were deemed to have consented to the process. If the foregoing procedures apply to you, your broker has sent one copy of our Notice (or proxy materials if applicable) to your address. If you wish to revoke your consent to householding, or to request householding if you are receiving multiple copies of our Notices (or multiple copies of proxy materials, if applicable), you must contact your broker, bank or other nominee.
If you did not receive a Notice (or proxy materials, if applicable), you can obtain a copy by contacting your bank or broker or other nominee. Or, you may contact our Executive Vice President – Chief Investment Officer, either by mail or telephone at our corporate office, as listed on the first page of this Proxy Statement, or by e-mail to Katie.Reinsmidt@cblproperties.com.
Management is not aware of any matters to come before the Annual Meeting other than those stated in this Proxy Statement. However, if any matters of which management is not now aware should come before the meeting or any adjournment, the proxies confer discretionary authority with respect to acting thereon, and the persons named in such proxies intend to vote, act and consent in accordance with their best judgment with respect thereto. Upon receipt of such proxies (in the form enclosed and properly signed) in time for voting, the shares represented thereby will be voted as indicated thereon and in this Proxy Statement.
By Order of the Board of Directors |
|
STEPHEN D. LEBOVITZ |
Chief Executive Officer |
Chattanooga, Tennessee
April 23, 2021
COPIES OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2018,2020, AS AMENDED, MAY BE OBTAINED WITHOUT CHARGE BY ANY SHAREHOLDER TO WHOM THIS PROXY STATEMENT IS SENT UPON WRITTEN REQUEST TO CBL INVESTOR RELATIONS, CBL PROPERTIES, 2030 HAMILTON PLACE BLVD., SUITE 500, CBL CENTER, CHATTANOOGA, TENNESSEE 37421-6000.
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time, on May 24, 2021 the day before the meeting date. Follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/CBL2021 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time, on May 24, 2021 the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D42786-P50934 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY CBL & ASSOCIATES PROPERTIES, INC. For Withhold For All To withhold authority to vote for any individual The Board of Directors recommends you vote FOR the following: All All Except nominee(s), mark "For All Except" and write the number(s) of the nominee(s) on the line below. 1. To re-elect nine directors to serve for one year and until their respective successors have been duly elected and qualified. Nominees: 01) Charles B. Lebovitz 02) Stephen D. Lebovitz 03) A. Larry Chapman 04) Matthew S. Dominski 05) John D. Griffith 06) Richard J. Lieb 07) Kathleen M. Nelson 08) Carolyn B. Tiffany 09) Scott D. Vogel The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain 2. To ratify the selection of Deloitte & Touche, LLP as the independent registered public accountants for the Company's fiscal year ending December 31, 2021. 3. An advisory vote on the approval of executive compensation. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date CBL & ASSOCIATES PROPERTIES, INC. 2030 HAMILTON PLACE BLVD, SUITE 500 CHATTANOOGA, TN 37421-6000
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
