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The compensation committee determined that based on the value of Messrs. D. Kalish’s and S. Rosenzweig’s services on our behalf, the compensation of these officers, which is allocated to us, is reasonable.
Long-Term Equity and Equity Incentive Awards
We believe that our long-term equity and equity incentive compensation program,programs, using RSUs that vest after three years subject to satisfaction of market or performance-based conditions, and restricted sharestock awards and RSUs with five-year cliff vesting, provides motivationprovide an appropriate incentive for our executivesexecutive officers and employees and isare a beneficial retention tool. In determining the awards to be granted to the named executive officers, the compensation committee took into account our performance in 2022, the responsibilities and performance of each named executive officer and the committee’s desire to emphasize equity-based awards as a significant component of total compensation for our full-time named executive officers while minimizing stockholder dilution. The compensation committee used the Ferguson Report as a “market check” to confirm its belief that the restricted stock awarded in early 2023 for performance in 2022 was not inappropriate.
We
are mindfulbelieve the cumulative effect of the
potential dilution and compensation cost associated with awarding restricted shares. Our policy remains to limit dilution and compensation costs. In January 2017 and 2016, we issued 147,500 and 141,051 restricted stock awards
respectively, representing approximately 1.1% and
1.0% ofRSUs is not overly dilutive and has created significant incentives for our
outstanding shares, respectively. In the past five years, excluding the one-time grant of 450,000 shares of common stock subjectofficers and employees. We intend to
RSUs in June 2016, we have awarded an average of 142,025 shares ofcontinue to award restricted stock
each year, representing an average of 1.0% per annum of our outstanding shares of common stock.Fees for Services
The fees for Services were first paid in 2016 and in approving same, the compensation committee, the audit committee and Board took into account that after paying such fees, we would realize significant savings in comparison to the fees that would have been paid pursuant to the advisory agreement. The aggregate fee payable for the Services in 2018 will be $1,252,819, an increase of $59,694 from the fee paid for Services in 2017. See “Certain Relationships and Related Transactions.”
Stock Ownership Policy
In view of the fact that our executive officers and directors beneficially own in the aggregate approximately 6.1 million, or 42.9%, of our outstanding shares of common stock, we do not have, nor doRSUs as we believe there is a need to adopt, a policy regarding ownership of our shares of common stock by executive officerssuch awards (i) align management’s interests and directors since their ownership interest aligns their interestgoals with thestockholders’ interests of our stockholders.
and goals and (ii) are an excellent motivator and employee retention tool.
The perquisites we provide to our executive officers, which are in addition to the benefits we provide to all our employees, generally account for a small percentage of the compensation paid by us to or allocated to us for our executive officers. We believe that such perquisites are appropriate.
Fees for Services
The aggregate fee paid to seven individuals for Services in 2022 was $1,467,796. See “Certain Relationships and Related Transactions.”
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Post-Employment Benefits Program
The following table sets forth the value (based on the closing price of our stock on September 29, 2017 of $10.72 per share) of equity awards held by our named executive officers that would vest upon a DDR Event or a change in control as of September 30, 2017:
Name | Value of Unvested Restricted Stock Held as of September 30, 2017 ($) | Value of Outstanding RSUs at September 30, 2017 ($)(1) |
Jeffrey A. Gould | | 743,057 | | | 198,320 | |
George Zweier | | 353,760 | | | 107,200 | |
Mitchell Gould | | 603,000 | | | 117,920 | |
David W. Kalish | | 451,580 | | | 179,560 | |
Steven Rosenzweig | | 146,457 | | | 134,000 | |
| (1) | Assumes that the middle tier performance level is achieved and that there is no adjustment, which we refer to as the “peer group adjustment,” in the number of RSUs that vest as a result of a comparison between us and our peer group with respect to the compounded annual growth rate in total stockholder return. See “— Outstanding Equity Awards at Fiscal Year End” and note 12 of our consolidated financial statements included in our Annual Report on Form 10-K for the year ended September 30, 2017. |
Summary Compensation Table
The following
summary compensation table discloses the compensation paid and accrued for services rendered in all capacities to us
during the years indicated for our named executive
officers:Name and Principal Position | Year | Salary ($)(1)(2) | Bonus ($)(1)(3) | Stock Awards ($)(4) | All Other Compensation ($)(5) | Total ($) |
Jeffrey A. Gould | | 2017 | | | 784,375 | | | 110,000 | | | 110,648 | | | 138,767 | (6) | | 1,143,790 | |
President and CEO
| | 2016 | | | 704,129 | | | 110,000 | | | 277,849 | | | 367,564 | | | 1,459,542 | |
| | 2015 | | | 547,808 | | | 65,000 | | | 103,691 | | | 670,016 | | | 1,386,515 | |
George Zweier | | 2017 | | | 278,774 | | | 35,000 | | | 63,300 | | | 51,713 | (7) | | 428,787 | |
Vice President and CFO
| | 2016 | | | 267,366 | | | 35,000 | | | 146,150 | | | 45,706 | | | 494,222 | |
| | 2015 | | | 253,956 | | | 31,000 | | | 46,085 | | | 45,518 | | | 376,559 | |
Mitchell Gould | | 2017 | | | 382,638 | | | 55,000 | | | 96,005 | | | 56,638 | (8) | | 590,281 | |
Executive Vice President
| | 2016 | | | 370,621 | | | 55,000 | | | 190,835 | | | 49,808 | | | 666,264 | |
| | 2015 | | | 355,295 | | | 52,500 | | | 85,080 | | | 48,611 | | | 541,486 | |
David W. Kalish | | 2017 | | | 214,591 | | | — | | | 59,080 | | | 234,820 | (9) | | 508,491 | |
Senior Vice President, Finance
| | 2016 | | | 194,053 | | | — | | | 220,699 | | | 270,809 | | | 685,561 | |
| | 2015 | | | 175,695 | | | — | | | 56,720 | | | 324,406 | | | 556,821 | |
Steven Rosenzweig | | 2017 | | | 260,200 | | | — | | | 26,687 | | | 215,630 | (10) | | 502,417 | |
Vice President
| | 2016 | | | 188,584 | | | — | | | 157,128 | | | 135,084 | | | 480,796 | |
| | 2015 | | | 160,956 | | | — | | | 24,815 | | | 1,310 | | | 187,081 | |
officers for each of the three years ended December 31, 2022:
Jeffrey A. Gould
President and CEO
| | | 2022 | | | 886,471 | | | 300,000 | | | 672,629 | | | 65,134(7) | | | 1,924,234 |
| 2021 | | | 864,004 | | | 200,000 | | | 778,898 | | | 148,386 | | | 1,991,288 |
| 2020 | | | 867,169 | | | 135,000 | | | 250,027 | | | 119,134 | | | 1,371,330 |
George Zweier
Vice President and CFO
| | | 2022 | | | 344,236 | | | 37,900 | | | 354,823 | | | 51,305(8) | | | 788,264 |
| 2021 | | | 321,004 | | | 35,200 | | | 424,714 | | | 87,521 | | | 868,439 |
| 2020 | | | 322,329 | | | 45,000 | | | 130,950 | | | 48,688 | | | 546,967 |
Mitchell Gould
Executive Vice President
| | | 2022 | | | 467,851 | | | 55,100 | | | 365,448 | | | 115,275(9) | | | 1,003,674 |
| 2021 | | | 436,296 | | | 51,255 | | | 446,647 | | | 212,053 | | | 1,146,251 |
| 2020 | | | 438,096 | | | 51,255 | | | 174,600 | | | 110,593 | | | 774,514 |
David W. Kalish
Senior Vice President, Finance
| | | 2022 | | | 249,026 | | | — | | | 441,976 | | | 262,227(10) | | | 953,229 |
| 2021 | | | 256,827 | | | — | | | 600,212 | | | 323,215 | | | 1,180,254 |
| 2020 | | | 255,766 | | | — | | | 129,571 | | | 258,752 | | | 664,089 |
Matthew J. Gould
Senior Vice President
| | | 2022 | | | — | | | — | | | 672,629 | | | 255,256(11) | | | 927,885 |
| 2021 | | | — | | | — | | | 778,898 | | | 314,788 | | | 1,093,686 |
| 2020 | | | — | | | — | | | 250,027 | | | 243,100 | | | 493,127 |
(1)
| (1) | The salary and bonus for each of Jeffrey A. Gould, George Zweier and Mitchell Gould is paid directly by us. Messrs.David W. Kalish and RosenzweigMatthew Gould do not receive salary or bonus directly from us but receive an annual salary and bonus from Gould Investors L.P. and related companies andcompanies; a portion of their respective salariesMr. Kalish’s salary and bonusesbonus are allocated to us pursuant to the shared services agreement. See “—Compensation Setting Process—Part-time Executive Officers.” The amount of salary and bonus that is allocated to us is set forth under the “Salary” column in the Summary Compensation Table. See “Certain Relationships and Related Transactions”Transactions” for a discussion of additional compensation paid to Messrs. J.Jeffrey A. Gould, Kalish and Rosenzweig byMatthew J. Gould from other entities owned by Fredric H. Gould, a management director and the former Chairman of our Board.with which we are affiliated or for which there is common ownership. |
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| (2)
| The annual base salaries in calendar 20182023 for each of Jeffrey A. Gould, George Zweier and Mitchell Gould are $811,125, $295,650,$930,300, $360,964, and $401,850,$467,224, respectively. |
| (3)
| The table sets forth the year in which the bonus was earned, not the year it was paid. The bonus for 2017, 20162022, 2021 and 20152020 reflects our performance and the performance of our named executive officers for such years and was paid in 2018, 2017January 2023, 2022 and 2016,2021, respectively. |
(4)
| (4) | Reflects, for 2016, the aggregate grant date fair value of the RSUs andRepresents restricted stock awards,granted in 2022, 2021 and for 20172020 and 2015,RSUs granted in 2022 and 2021 (RSUs were not granted in 2020) at the grant date fair value of restricted stocksuch awards in each case calculated in accordance with Accounting Standards CodificationItem 402 of Regulation S-K and ASC Topic 718—Stock Compensation, excluding718. Assumes that the maximum number of shares subject to RSUs will vest and does not give effect of estimated forfeitures. Generally,to the aggregate grant date fair value is the amount that we expect to expense in our financial statements over the award’s vesting schedule.peer group adjustment. These amounts reflect our accounting expense and do not correspond to the actual valuevalues that will be realized by the named executives. Grant date fair valuesvalue assumptions are consistent with those disclosed in Note 12—10 — Stockholders’ Equity, in the consolidated financial statements included in our 10-K.Annual Report. See “—Grant of Plan Based Awards During 2022” for additional information. On January 5, 2023, we granted Jeffrey A. Gould, George Zweier, Mitchell Gould, David W. Kalish and Matthew J. Gould, 14,206, 8,400, 8,900, 8,153 and 14,206 shares of restricted stock, respectively, with a grant date fair value of $19.18 per share. |
(5)
| (5) | We maintain a tax qualified defined contribution plan for all of our full-time officers and full and part-time employees, and entities which are parties with us to a shared services agreement (including Gould Investors) maintain substantially similar defined contribution plans for their officers and employees. We make an annual contribution to the plan for each officer and employee whose base salary is paid directly by us (and entities which are parties to the shared services agreement make annual contributions to their respective plans for their respective employees, which amounts are allocated to the parties to the shared service agreement in accordance with its terms) equal to 15% of such person’s annual earnings, not to exceed $40,500$45,750, for any person in calendar 2017.2022. The estimated amount payable as of September 30, 2017December 31, 2022 to Jeffrey A. Gould, George Zweier and Mitchell Gould pursuant to this plan upon termination of their employment is $2,146,000, $808,000$3.59 million, $1.74 million, and $962,000,$1.49 million, respectively. The method of payment upon termination of employment is determined solely by the participant who may elect a lump sum payment, the purchase of an annuity or a rollover into an individual retirement account. |
(6)
| (6)Except with respect to dividend equivalents paid in 2021 upon the vesting of RSUs granted in 2016, excludes dividends and dividend equivalents paid or payable on stock and similar awards. |
(7)
| Includes dividends of $12,477 on unvested restricted stock, our contribution of $40,313$45,750 paid for his benefit to our defined contribution plan and perquisites totaling $85,977,$19,384, of which $17,736$7,833 represents an automobile allowance, $4,335$4,236 represents a premium paid for additional disability insurance, $5,506and $7,315 represents a premium paid for long-term care insurance and $58,400 represents an education benefit.insurance. |
| (7)(8)
| Includes dividends of $5,940 on unvested restricted stock, our contribution of $40,313$45,750, paid for his benefit to our defined contribution plan and a $5,460$5,555, automobile allowance. |
| (8)(9)
| Includes dividendsan education benefit of $10,125 on unvested restricted stock,$62,132, our contribution of $40,313$45,750 paid for his benefit to our defined contribution plan and a $6,200$7,393 automobile allowance. |
| (9)(10)
| Includes dividends of $7,583 on unvested restricted stock, $207,500 we paid him$243,100 for the Services, our contribution of $12,910$11,958 paid for his benefit to the Gould Investors L.P. defined contribution plan, and perquisites of $6,827,$7,169, of which $1,236$1,697, and $5,590 represents$5,472, represent our share of the amounts incurred by Gould Investors for long-term care insurance benefits and an automobile allowance, respectively. The amounts reflected as contributions to the defined contribution plan and as perquisites are allocated to us pursuant to the shared services agreement. In 2023 he is to be paid $243,101 for the Services. |
| (10)(11)
| Includes dividends of $2,459 on unvested restricted stock, $175,314 we paid him$255,256 for the Services, our contribution of $27,303Services. In 2023, he is to be paid $278,018 for his benefit to the Gould Investors L.P. defined contribution plan, and perquisites of $10,554, of which $587 and $9,967 represents our share of the amounts incurred by Gould Investors for long-term care insurance and an automobile allowance, respectively. The amounts reflected as contributions to the defined contribution plan and as perquisites are allocated to us pursuant to the shared services agreement.Services. |
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Grants of Plan-Based Awards The
following table
below discloses the grants of
restricted stockplan-based awards during
20172022 to our named executive
officers:Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | Grant Date Fair Value of Stock Awards ($) |
Jeffrey A. Gould | | 1/4/17 | | | 13,110 | | | 110,648 | |
George Zweier | | 1/4/17 | | | 7,500 | | | 63,300 | |
Mitchell Gould | | 1/4/17 | | | 11,375 | | | 96,005 | |
David W. Kalish | | 1/4/17 | | | 7,000 | | | 59,080 | |
Steven Rosenzweig | | 1/4/17 | | | 3,162 | | | 26,687 | |
officers. The restricted stock awards, which are referred to in such table as “RS” were issued pursuant to our 2020 Incentive Plan and the restricted stock units, which are referred to in the table as “RSUs”, were issued pursuant to our 2022 Incentive Plan.Restricted Stock
Vesting of the restricted stock occurs, with certain exceptions, subject to the continuation of an employment, consulting or similar relationship with us through 2027. Upon vesting, each restricted stock award entitles the recipient to one share of common stock. Holders of restricted stock are entitled to the dividends paid on, and to vote, their shares.
RSUs
Vesting of the RSUs occurs, with certain exceptions, subject to the continuation of an employment, consulting or similar relationship with us through 2025, upon satisfaction of benchmarks related to the compounded annual growth rate from 2022 through 2025 in (i) total stockholder return (as calculated pursuant to the applicable award agreement), which awards are referred to in the table below as “RSU-TSR” and (ii) adjusted funds from operations, (as presented in our filings with the SEC), which awards are referred to in the table below as “RSU-AFFO.”
The RSU – TSR awards are subject to an increase or decrease, which we refer to as the peer group adjustment, depending on our performance relative to a peer group (i.e., the FTSE Nareit Equity Apartment Index, excluding companies whose primary focus is the provision of housing for college/graduate students). Specifically, if the compounded annual growth rate in total stockholder return during the performance cycle is in the (i) top quartile of our peer group, the recipient is entitled to additional RSUs equal to 25% of the RSU-TSR awards that vest at the applicable threshold, target and maximum levels and (ii) in the bottom quartile of the peer group, the recipient will forfeit 25% of the RSU-TSR awards that vest at the applicable threshold, target and maximum levels. This peer group adjustment is not reflected in the table below.
Each RSU is coupled with a dividend equivalent right entitling the holder to an amount in cash equal to the aggregate amount of cash dividends that would have been paid in respect of the shares underlying such RSUs, if and to the extent such RSU vest, had such shares been outstanding during the performance cycle applicable to such RSU.
Jeffrey A. Gould | | | 1/13/22 | | | RS | | | — | | | — | | | — | | | 14,282 | | | 303,493 |
| 6/24/22 | | | RSU-TSR | | | 2,692 | | | 5,384 | | | 10,767 | | | — | | | 133,339 |
| 6/24/22 | | | RSU-AFFO | | | 2,692 | | | 5,384 | | | 10,767 | | | — | | | 235,797 |
George Zweier | | | 1/13/22 | | | RS | | | — | | | — | | | — | | | 8,400 | | | 178,500 |
| 6/24/22 | | | RSU-TSR | | | 1,286 | | | 2,572 | | | 5,143 | | | — | | | 63,691 |
| 6/24/22 | | | RSU-AFFO | | | 1,286 | | | 2,572 | | | 5,143 | | | — | | | 112,632 |
Mitchell Gould | | | 1/13/22 | | | RS | | | — | | | — | | | — | | | 8,900 | | | 189,125 |
| 6/24/22 | | | RSU-TSR | | | 1,286 | | | 2,572 | | | 5,143 | | | — | | | 63,691 |
| 6/24/22 | | | RSU-AFFO | | | 1,286 | | | 2,572 | | | 5,143 | | | — | | | 112,632 |
David W. Kalish | | | 1/13/22 | | | RS | | | — | | | — | | | — | | | 7,971 | | | 169,384 |
| 6/24/22 | | | RSU-TSR | | | 1,988 | | | 3,976 | | | 7,950 | | | — | | | 98,465 |
| 6/24/22 | | | RSU-AFFO | | | 1,988 | | | 3,976 | | | 7,950 | | | — | | | 174,127 |
Matthew J. Gould | | | 1/13/22 | | | RS | | | — | | | — | | | — | | | 14,282 | | | 303,493 |
| 6/24/22 | | | RSU-TSR | | | 2,692 | | | 5,834 | | | 10,767 | | | — | | | 133,339 |
| 6/24/22 | | | RSU-AFFO | | | 2,692 | | | 5,834 | | | 10,767 | | | — | | | 235,797 |
(1)
| (1)To achieve the threshold award, a compounded annual growth rate of 5% and 4% is required during the Performance Cycle with respect to the RSU-TSR awards and RSU-AFFO awards, respectively. |
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(2)
| RepresentsTo achieve the target award, a compounded annual growth rate of 8% and 6% is required during the Performance Cycle with respect to the RSU-TSR awards and RSU-AFFO awards, respectively. |
(3)
| To achieve the maximum award, a compounded annual growth rate of 11% and 8% is required during the Performance Cycle with respect to the RSU-TSR awards and RSU-AFFO awards, respectively. |
(4)
| The per share grant in 2017date fair value of shares ofthe: (a) restricted stock granted on January 13, 2022 is $21.25, and (b) RSU – TSR and RSU – AFFO awards are $12.38 and $21.90, respectively. These amounts do not correspond to the actual values that will be realized by the executives. The aggregate grant date fair value for the RSU-AFFO awards gives effect to management’s assessment of the probable outcome as to whether, and the extent to which, are scheduled to vest in 2022.the RSU-AFFOs will vest. The values for the RSUs assume that the maximum number of such units vest. |
Outstanding Equity Awards at Fiscal Year-End
The following table discloses the number and value (based on the closing price per common share of common stock of
$10.72$19.64 on
September 29, 2017)December 30, 2022) of the outstanding equity awards at
September 30, 2017December 31, 2022 for our named executive officers:
| Stock Awards |
Name | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) | Equity Incentive Plan Awards: Market or Payout Value of Shares, Units or Other Rights That Have Not Vested ($)(6) |
Jeffrey A. Gould | | 69,315 | (1) | | 743,057 | | | 41,625 | | | 446,220 | |
George Zweier | | 33,000 | (2) | | 353,760 | | | 22,500 | | | 241,200 | |
Mitchell Gould | | 56,250 | (3) | | 603,000 | | | 24,750 | | | 265,320 | |
David W. Kalish | | 42,125 | (4) | | 451,580 | | | 37,687 | | | 404,005 | |
Steven Rosenzweig | | 13,662 | (5) | | 146,457 | | | 28,125 | | | 301,500 | |
Jeffrey A. Gould(2) | | | 85,321 | | | 1,675,704 | | | 46,199 | | | 907,353 |
George Zweier(3) | | | 46,450 | | | 912,278 | | | 23,144 | | | 454,538 |
Mitchell Gould(4) | | | 57,750 | | | 1,134,210 | | | 23,144 | | | 454,538 |
David W. Kalish(5) | | | 50,819 | | | 998,085 | | | 35,777 | | | 702,655 |
Matthew J. Gould(6) | | | 85,321 | | | 1,675,704 | | | 46,199 | | | 907,353 |
| (1) | In January 2018, 2019, 2020, 2021 and 2022, restricted stock awards with respect to 13,725, 14,625, 14,625, 13,230 and 13,110 shares, respectively, are scheduled to vest. |
| (2) | In January 2018, 2019, 2020, 2021 and 2022, restricted stock awards with respect to 6,000, 6,500, 6,500, 6,500 and 7,500 shares, respectively, are scheduled to vest. |
| (3) | In January 2018, 2019, 2020, 2021 and 2022, restricted stock awards with respect to 10,125, 10,750, 12,000, 12,000 and 11,375 shares, respectively, are scheduled to vest. |
| (4) | In January 2018, 2019, 2020, 2021 and 2022, restricted stock awards with respect to 10,550, 9,575, 8,000, 7,000 and 7,000 shares, respectively, are scheduled to vest. |
| (5) | In January 2019, 2020, 2021 and 2022, restricted stock awards with respect to 3,000, 3,500, 4,000 and 3,162 shares, respectively, are scheduled to vest. |
| (6)
| Reflects the maximum number of shares subject to RSUs (including the additional shares potentially issuable as a result of the peer group adjustment) scheduled to vest in 20212024 and 2025 upon satisfaction of market and/or performance based conditions. Approximately 44% |
(2)
| In March 2023, January 2024, 2025, 2026, June 2026 and January 2027 restricted stock awards with respect to 13,225, 14,374, 14,320, 14,320, 14,800 and 14,282 shares, respectively, are scheduled to vest. In March 2024 and June 2025, subject to the satisfaction of specified conditions, a maximum (including the award vestspeer group adjustment) of 21,974 shares and 24,226 shares, respectively, subject to RSUs are scheduled to vest. |
(3)
| In March 2023, January 2024, 2025, 2026, June 2026 and January 2027, restricted stock awards with respect to 7,000, 7,300, 7,500, 8,250, 8,000 and 8,400 shares, respectively, are scheduled to vest. In March 2024 and June 2025, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 11,572 shares and 11,572 shares, respectively, subject to RSUs are scheduled to vest. |
(4)
| In March 2023, January 2024, 2025, 2026, June 2026 and January 2027, restricted stock awards with respect to 10,500, 10,800, 10,000, 8,750, 8,800 and 8,900 shares, respectively, are scheduled to vest. In March 2024 and June 2025, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 11,572 shares and 11,572 shares, respectively, subject to RSUs are scheduled to vest. |
(5)
| In March 2023, January 2024, 2025, 2026, June 2026 and January 2027, restricted stock awards with respect to 7,163, 7,000, 7,421, 7,864, 13,400 and 7,971 shares, respectively, are scheduled to vest. In March 2024 and June 2025, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 17,888 shares and 17,890 shares, respectively, subject to RSUs are scheduled to vest. |
(6)
| In March 2023, January 2024, 2025, 2026, June 2026 and January 2027 restricted stock awards with respect to 13,225, 14,474, 14,320, 14,320, 14,800 and 14,282 shares, respectively, are scheduled to vest. In March 2024 and June 2025, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 21,974 shares and 24,226 shares, respectively, subject to RSUs are scheduled to vest. |
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upon achieving a 12% compounded annual growth rate in total stockholder return from 2016 through 2021, and approximately 44% of the award vests upon achieving a 10% compounded annual growth rate over such period in adjusted funds from operations (as calculated pursuant to the award agreement). In addition, approximately 12% of the award vests if compounded annual growth in our total stockholder return over such period is in the top 25% of our peer group. We can provide no assurance that any value will be realized from these awards.
Option Exercises and Stock Vested The following table discloses information with respect to the shares of restricted stock that vested in 2022 ($23.28 on January 3, 2022):
Jeffrey A. Gould | | | 13,110 | | | 305,201 |
George Zweier | | | 7,500 | | | 174,600 |
Mitchell Gould | | | 11,375 | | | 264,810 |
David W. Kalish | | | 7,000 | | | 162,960 |
Matthew J. Gould | | | 13,110 | | | 305,201 |
Potential Payments Upon Termination or Change-in-Control We do not provide for any post-employment benefits to our named executive officers other than their entitlement to the benefits payable pursuant to our defined contribution pension plan and the accelerated vesting of our restricted stock awards and RSUs as a result of death, disability, retirement, or a change of control. See “ — Employment and Severance Agreements; Post Employment Benefits; Change of Control.” The following table sets forth the value (based on the closing price of our stock on December 30, 2022 of $19.64 per share) of equity awards held by our named executive officers that
vestedwould vest upon a DDR Event or a change in
2017: | Stock Awards |
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) |
Jeffrey A. Gould | | 9,125 | | | 77,563 | |
George Zweier | | 4,500 | | | 38,250 | |
Mitchell Gould | | 9,125 | | | 77,563 | |
David W. Kalish | | 9,125 | | | 77,563 | |
Steven Rosenzweig | | — | | | — | |
control as of December 31: Jeffrey A. Gould | | | 1,675,704 | | | 147,308 | | | 1,675,704 | | | 227,083 |
George Zweier | | | 912,278 | | | 75,872 | | | 912,278 | | | 117,900 |
Mitchell Gould | | | 1,134,210 | | | 75,872 | | | 1,134,210 | | | 117,900 |
David W. Kalish(1) | | | 998,085 | | | 117,237 | | | 998,085 | | | 182,174 |
Matthew J. Gould | | | 1,675,704 | | | 147,308 | | | 1,675,704 | | | 227,083 |
COMPENSATION COMMITTEE REPORT
We have reviewed
(1)
| Because Mr. Kalish is over 65 and has satisfied the period of service requirement, upon his retirement (i) a pro rata portion of his RSUs (A) granted in 2021 would vest as and to the extent adjusted performance conditions were satisfied as of his retirement, (B) granted in 2022 would vest in 2025, as and to the extent the performance conditions are satisfied as of the end of the measurement period and (ii) all of the restricted stock would vest. The market value of his restricted stock and RSUs are reflected in the applicable column. |
(2)
| Assumes that the target performance criteria is achieved and that there is no peer group adjustment. See “—Components of Executive Compensation—Long-Term Equity and Long-Term Equity Incentive Awards” and “—Outstanding Equity Awards at Fiscal Year End” and note 10 of our consolidated financial statements included in the Annual Report. |
Our 2022 Incentive Plan generally provides, among other things, that if any payment or benefit that a participant in such plan would otherwise receive from us constitutes a “parachute payment” within the meaning of Section 280G of the Code and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussions with management, we recommendedas a result would be subject to the Boardexcise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such payment will either (i) be reduced to an amount equal to the largest portion of such payment that would result in no portion of such payment (after reduction) being subject to the Excise Tax or (ii) not be reduced, whichever approach, after taking into account all applicable taxes (including the Excise Tax), results in such participant’s receipt, on an after-tax basis, of the greatest amount of such payment.
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We provide below a reasonable estimate of the relationship of the annual total compensation of Jeffrey A. Gould, our Chief Executive Officer and President, to the median annual total compensation of our employees (other than the CEO). For 2022:
the annual total compensation of our CEO, as reported in the Summary Compensation Table, was $1,924,234;
the median annual total compensation of all our employees (other than our CEO) was $530,580; and
our CEO’s annual total compensation was 3.63 times that of the median of the annual total compensation of all our employees (other than our CEO).
In calculating this estimate, we included as our employees as of the December 31, 2022 measurement date, only those individuals to whom we are required by the Internal Revenue Code of 1986, as amended, to issue a Form W-2. We identified our median employee by calculating our employees’ total annual compensation in the same manner that the CEO’s total annual compensation is calculated for the Summary Compensation DiscussionTable.
Companies adopt a variety of methodologies and Analysisapply various assumptions in presenting this ratio. As a result, the pay ratio reported by other companies may not be included in this proxy statement.comparable to the pay ratio we report.
The following table sets forth information concerning the compensation of our Principal Executive Officer (“PEO”) and our other named executive officers (“NEOs”) for each of the fiscal years ended December 31, 2022 and 2021 and our financial and market performance for each such year:
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The following table sets forth information concerning the compensation of Jeffrey A. Gould, our principal executive officer (“PEO”), and our other named executive officers (i.e., Mitchell Gould, David W. Kalish, Matthew J. Gould and George Zweier, collectively referred to as the “NEOs”) for each of 2022 and 2021 and our financial and market performance for each such year:
2022 | | | 1,924,234 | | | 1,471,371 | | | 918,263 | | | 598,520 | | | 142.11 | | | 50.0 |
2021 | | | 1,991,288 | | | 2,817,458 | | | 1,072,158 | | | 1,648,934 | | | 165.76 | | | 29.1 |
(1)
| Represents the amount of “compensation actually paid” to Jeffrey A. Gould, as computed in accordance with SEC requirements. Such amounts do not reflect the actual amount of compensation earned by or paid to Mr. Gould. See table immediately below for a reconciliation showing how “compensation actually paid” was calculated. |
(2)
| TheRepresents the average amount of “compensation actually paid” to the NEOs as a group as computed in accordance with SEC requirements. Such amounts do not reflect the actual average amount of compensation earned by or paid to these NEOs as a group. See “– Compensation Committee
|
| |
| Jeffrey Rubin (Chairman)
|
| Alan Ginsburg
|
| Jonathan H. Simonof NEOs.”
|
In accordance with SEC requirements, the following adjustments were made to Jeffrey A. Gould’s total compensation for the applicable year to determine the “compensation actually paid”:
2022 | | | 1,924,234 | | | (672,629) | | | 219,766 | | | 1,471,371 |
2021 | | | 1,991,288 | | | (778,898) | | | 1,605,068 | | | 2,817,458 |
The table below sets forth the manner in which Equity Award Adjustments in the immediately preceding table were calculated:
2022 | | | 617,198 | | | (388,124) | | | (9,308) | | | 219,766 |
2021 | | | 1,148,488 | | | 483,705 | | | (27,125) | | | 1,605,812 |
Compensation of NEOs
In accordance with SEC requirements, the following adjustments were made to average total compensation for the NEOs for each year to determine the “compensation actually paid” to this group:
2022 | | | 918,263 | | | (458,719) | | | 138,976 | | | 598,520 |
2021 | | | 1,072,158 | | | (562,618) | | | 1,139,394 | | | 1,648,934 |
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The table below sets forth the manner in which Average Equity Award Adjustments in the immediately preceding table were calculated:
2022 | | | 420,955 | | | (275,059) | | | (6,920) | | | 138,976 |
2021 | | | 818,041 | | | 341,905 | | | (20,551) | | | 1,139,394 |
Relationship between TSR and Net Income to Compensation Actually Paid
The following charts show the relationship of the compensation actually paid to our CEO and the average compensation actually paid to our NEOs to our cumulative TSR and net income for the periods indicated (TSR amounts reported in the graph assume an initial fixed investment of $100 and that all dividends, if any, were reinvested):
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Israel Rosenzweig, Chairman of our Board, is a Senior Vice President of One Liberty Properties, Inc. (“One Liberty”) and a Senior Vice President of the managing general partner of Gould Investors. (One Liberty and Gould Investors are described below). He is the father of Steven Rosenzweig, Senior Vice President – Legal, of BRT and an executive officer of the managing general partner of Gould Investors and Alon Rosenzweig, our employee. Fredric H. Gould, a director and former Chairman of our Board, is Vice Chairman of the Board of Directors of One Liberty. He is the father of Jeffrey A. Gould and Matthew J. Gould. Jeffrey A. Gould, a director and our President and Chief Executive Officer, is a Senior Vice President and a director of One Liberty, Properties, Inc.,a Senior Vice President and director of the managing general partner of Gould Investors and a member of a limited liability company which is the other general partner of Gould Investors. He is also the father of Ryan Gould, our employee. Matthew J. Gould, a director and our Senior Vice President, is the Chairman of the Board of Directors of One Liberty, Chairman of the Board of the managing general partner of Gould Investors and serves as director of a trust that is a member of a limited liability company which is the other general partner of Gould Investors. He is also an executive officer of Majestic Property. David W. Kalish, Isaac Kalish and Mark H. Lundy, each of whom is an executive officer of our company, are executive officers of One Liberty and of the managing general partner of Gould Investors. Messrs. D. Kalish, I. Kalish and Lundy are also officers of Majestic Property. David W. Kalish is the father of Isaac Kalish.
One Liberty is a real estate investment trust listed on the New York Stock Exchange that is engaged in the ownership of a diversified portfolio of income-producing real properties that are net leased to
tenants, generally under long-term leases. He is also a director and the sole stockholder of the managing general partner of Gould Investors.tenants. Gould Investors
is a limited partnership that owns and operates a diversified portfolio of real estate and invests in other companies active in the real estate and finance
industries,industries. As of April 3, 2023, Gould Investors beneficially owns approximately
21.3%17.5% of our outstanding shares of common stock.
In addition, Mr. Gould is an officer and sole shareholder of REIT Management, our former advisor. Fredric H. Gould is the father of Matthew J. Gould and Jeffrey A. Gould.Israel Rosenzweig, Chairman of our Board, is a Senior Vice President of One Liberty Properties and a Senior Vice President of the managing general partner of Gould Investors. He is the father of Steven Rosenzweig, a Vice President of BRT and an executive officer of the managing general partner of Gould Investors, and Alon Rosenzweig, our employee. Jeffrey A. Gould, a director and our President and Chief Executive Officer, is a Senior Vice President and a director of One Liberty Properties, a Senior Vice President and director of the managing general partner of Gould Investors and, commencing January 1, 2015, a member of a limited liability company which is the other general partner of Gould Investors. Matthew J. Gould, a director and our Senior Vice President, is the Chairman of the Board of Directors of One Liberty Properties, Chairman of the Board of the managing general partner of Gould Investors and serves as director of a trust that is a member
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of a limited liability company which is the other general partner of Gould Investors. He is also an executive officer of REIT Management and Majestic Property. David W. Kalish, Isaac Kalish and Mark H. Lundy, each of whom is an executive officer of our company, are executive officers of One Liberty Properties and of the managing general partner of Gould Investors. Messrs. D. Kalish and Lundy are also officers of Majestic Property. David W. Kalish is the father of Isaac Kalish.
Related Party Transactions
Our
20172021 and 2022 Equity Awards
In 2017, each of the following individuals was granted shares of restricted stock with the indicated and Equity Incentive Awards
The grant date fair
value:value of the equity awards (i.e., restricted stock and RSUs) granted to our executive officers (other than our named executive officers) and certain related parties in 2021 and 2022, respectively, are as follows: Fredric H.
Gould - $87,354; Matthew J. Gould - $110,648;Gould—$735,107 and $556,727; Steven Rosenzweig—$391,658 and $259,297; Mark H.
Lundy - $110,648;Lundy—$664,936 and $453,564; Israel
Rosenzweig - $29,118;Rosenzweig—$414,764 and $236,581; Isaac Kalish
- $56,227; Steven Rosenzweig - $26,687;$540,254 and $416,291; and Alon
Rosenzweig - $77,547.Rosenzweig—$439,478 and $365,448. The grant date fair value of these awards was calculated in the manner described in note 4 of the Summary Compensation
Table.Table and excludes, with respect to the RSUs, the effect of the peer group adjustment. These amounts reflect our accounting expense for these awards and do not correspond to the actual value, if, any that may be realized by these individuals.
For performing Services in 2021 and
2018, we retained2022, the following
individuals who in 2017executive officers and/or directors received, and it is anticipated will receive
for performing Services in
2018,2023, respectively, the compensation
indicated for performing the Services:indicated: Fredric H. Gould,
$207,500$210,000, $210,000 and $210,000;
Matthew J. Gould, $207,500Steven Rosenzweig, $268,700, $298,148 and
$217,875; David W. Kalish, $207,500 and $210,000;$334,415; Isaac Kalish,
$227,188$273,525, $287,200 and
$245,138; Steven Rosenzweig, $175,313 and $206,400;$311,561; Israel Rosenzweig,
$51,875$60,800, $63,840 and
$54,469; and$53,840; Mark H. Lundy,
$103,750$110,250, $110,250 and
$108,938.$110,250. See
“Executive Compensation—General” and, for information regarding named executive officers compensated for performing Services, see “Executive Compensation—Summary Compensation Disclosure and Analysis—Advisor Fees.Table.”
Shared Services Agreement
We and certain related entities, including Gould Investors, One Liberty Properties, Inc.,and Majestic Property Management and REIT Management, occupy common office space and share certain services and personnel in common. The allocation of these general and administrative expenses among these entities is computed in accordance with a shared services agreement based on the estimated time devoted by executive, administrative and clerical personnel to the affairs of each participating entity to such agreement. In 2017,2021 and 2022, the amount of general and administrative expenses allocated to us represents approximately 21.7%21.3% and 22.4%, respectively, of the total expenses allocated to all entities which are parties to the shared services agreement. Specifically, in 2021 and
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2022, we paid
$346,000$641,000 and $735,000, respectively, for common general and administrative expenses, including telecommunication services, computer services, bookkeeping, secretarial and other clerical services and legal and accounting services.
The amounts allocated to us forOther than the
salary, bonus and benefits for services performed byexecutive officers identified in the Summary Compensation Table, Isaac Kalish
who isand Steven Rosenzweig were the only executive officers engaged by us on a part-time basis
was $139,388.As a cost saving measure, wein 2021 and 2022 whose salary, bonus and benefits allocated to us in either of such years exceeded $120,000. The amounts allocated to us in 2021 and 2022 for the services of Isaac Kalish were $113,889 and $127,947, respectively and Steven Rosenzweig were $268,234 and $281,908, respectively.
We obtain certain insurance (primarily property insurance) with Gould Investors and its affiliates and in
2017,2021 and 2022, we reimbursed Gould Investors
$24,000$61,000 and $67,000, respectively, for our share of insurance premiums.
Majestic Property, which is wholly-owned by Fredric H. Gould, provides real property management services, real estate brokerage, and construction supervision services for us and affiliated entities, as well as companies that are non-affiliated entities. In
2017,2021 and 2022, we paid Majestic Property fees
totaling $32,000,of $31,000 and $36,000, respectively, representing, in the aggregate, less than
1%1.0% of the
2017 revenues of Majestic
Property.Property for each such period. Each of Fredric H. Gould, Jeffrey A. Gould, Matthew J. Gould, David W. Kalish, Mark H. Lundy, Israel Rosenzweig, Steven Rosenzweig, and Isaac Kalish received compensation from Majestic Property
in 2017,for such periods, which compensation is not included in the Summary Compensation Table. The fees paid by us to Majestic Property and the expenses reimbursed to Gould Investors under the shared services agreement were reviewed by our audit committee.
These individuals also receive compensation from other entities owned or controlled (including shared controlled) by one or more by Fredric H. Gould, Jeffrey A. Gould
and Matthew J.
Gould, David W. Kalish, Mark H. Lundy, Israel Rosenzweig, Steven Rosenzweig and Isaac Kalish also receive compensation from other entities wholly-owned by Fredric H. Gould and parties to the shared services agreement, none of which provided services to us or received compensation from us in
2017.2021 or 2022.
Alon Rosenzweig received compensation of $318,246$764,685 and $673,963 in 20172021 and 2022, respectively (including $166,250$208,559 and $227,125 in base salary for 2017, $25,000 bonus2021 and 2022, respectively, bonuses of $27,000 and $30,000 for 2017,2021 and 2022, respectively, which iswere paid in 20182022 and $77,5472023, respectively, $439,478 and $365,448 for 2021 and 2022, respectively, representing the grant date fair value of awards of restricted stock awards) and participatedRSUs granted in such years, $40,658 with respect to the payment in 2021 of dividend equivalents with respect to RSUs granted in 2016, and perquisites of $48,960 and $51,390 for 2021 and 2022, respectively (including $43,500 and $45,750 of contributions to a defined contribution plan for 2021 and 2022, respectively). His annual base compensation for 2023 is $242,633.
Ryan Gould, who began working for us in September 2022, received compensation in 2022 of $26,250 (including $21,250 in base salary and a bonus of $5,000 for 2022, which was paid in 2023). His annual base salary for 2023 is $95,000.
Messrs. A. Rosenzweig and R. Gould participate in the welfare and other benefit plans
generally made available to
executives.our employees.
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ADVISORY APPROVAL OF THE COMPENSATION OF EXECUTIVES
Section 14A of the Exchange Act (“Section 14A”) requires that we seek a non-binding advisory vote from our stockholders to approve the compensation awarded to our named executive officers as disclosed in this proxy statement. Although the advisory vote is non-binding, the compensation committee and
ProceduresOur codethe Board will review the results of business conductthe vote and ethics provideswill consider our stockholders' concerns and take them into account in future determinations concerning our executive compensation program. The Board of Directors recommends that you indicate your support for our compensation policies and procedures for our named executive officers, as outlined in the “Conflictsresolution below. Accordingly, the following resolution will be submitted for a stockholder vote at the Annual Meeting:
RESOLVED, that the stockholders approve, on an advisory basis, the compensation of Interest” sectionthe individuals identified in the Summary Compensation Table, as disclosed in the proxy statements for the Company’s 2023 annual meeting of stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE ADOPTION OF THIS RESOLUTION.
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ADVISORY VOTE ON THE FREQUENCY AT WHICH WE WILL SEEK STOCKHOLDER ADVISORY VOTES ON EXECUTIVE COMPENSATION
Section 14A requires that our board(i) once every six years, we seek stockholder approval of the frequency with which we will seek advisory approval of executive compensation and (ii) we present every one, two or three years, or abstain as alternatives for stockholders.
The Board has determined that an advisory vote on executive compensation every three years is awarethe best approach for us based on a number of certain transactions between us and affiliated entities,considerations, including the sharingfollowing:
the elements of our executive compensation program generally do not change in a significant manner from year to year;
stockholders have various methods of providing feedback on executive compensation matters even in years in which there is no advisory vote on executive compensation — for example, by communicating directly with the Board, as discussed under “Governance of our Company — Communications with Directors”;
a three-year vote cycle gives the Board sufficient time to thoughtfully consider the results of the advisory vote and to implement any desired changes to our executive compensation policies and procedures; and
a three-year cycle will provide investors sufficient time to evaluate the effectiveness of our short- and long-term compensation programs.
Although the vote on this proposal is advisory and non-binding, the compensation committee and Board will carefully consider the voting results. The proxy card provides stockholders with the opportunity to choose among four options (holding the vote every one, two or three years, or abstaining) and, therefore, stockholders will not be voting to approve or disapprove the recommendation of the Board. The alternative (i.e., one year, two years, or three years) that receives the most votes will be deemed approved by the stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE OF EVERY THREE YEARS FOR THE FREQUENCY AT WHICH WE WILL PRESENT TO STOCKHOLDERS AN ADVISORY VOTE ON COMPENSATION OF EXECUTIVES.
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audit committee and the board of directors is seeking ratification of the appointment of Ernst & Young LLP (“E&Y”), as our independent registered public accounting firm for 2023. A representative of E&Y is expected to be present at our annual meeting and will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.
We are not required to have our stockholders ratify the selection of E&Y as our independent registered public accounting firm. We are doing so because we believe it is good corporate practice. If the stockholders do not ratify the selection, the audit committee will reconsider whether to retain E&Y, but may, in its discretion, decide to retain such firm. Even if the selection is ratified, the audit committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in our interest.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2023.
The following table presents E&Y’s fees for the services pursuant toin the termsindicated years:
Audit fees(1) | | | $576,108 | | | $582,079 |
Audit-related fees | | | — | | | — |
Tax fees | | | 17,600 | | | 17,000 |
All other fees | | | — | | | — |
Total fees | | | $593,708 | | | $599,079 |
(1)
| Includes fees for the audit of our annual consolidated financial statements, the review of the consolidated financial statements included in our quarterly reports on Form 10-Q and for services rendered in connection with registration statements filed with the SEC. |
Approval Policy for Audit and Non-Audit Services The audit committee annually reviews and approves the retention of a shared services agreementour independent registered public accounting firm for each fiscal year and the audit of our financial statements for such fiscal year, including the fee associated with the audit. In addition, the audit committee approves the provision of tax related and other non-audit services. Any fees for the audit and any fees for non-audit services by affiliated entities to us. The provision states that the board has determined that the services provided by affiliated entities to us are beneficial and that we may enter into a contract or transaction with an affiliated entity provided that any such transaction isin excess of those approved by the audit committee which is satisfied thatmust receive the fees, charges and other payments madeprior approval of the audit committee.
Proposals for any non-audit services to
be performed by our independent registered public accounting firm must be approved in advance by the
affiliated entities are at no greater cost or expense to us then would be incurred if we were to obtain substantially the same services from unrelated and unaffiliated entities. The term “affiliated entities” is defined in the code of business conduct and ethics as all parties to the shared services agreement and other entities in which our officers and directors have an interest.Generally, related party transactions that are proposed are submitted toaudit committee.
For 2022, the audit committee for its prior reviewpre-approved all of the audit, tax and if appropriate, approval. Tonon-audit services rendered by our independent registered public accounting firm.
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REPORT OF THE AUDIT COMMITTEE The information contained in this Report of the Audit Committee shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing (except to the extent
payments are made pursuantthat we specifically incorporate this information by reference) and shall not otherwise be deemed “soliciting material” or “filed” with the SEC or subject to
an agreement with a related party previously approved byRegulation 14A or 14C, or to the
audit committee, such as payments under the shared services agreement, such payments are reviewed by the audit committee on a quarterly basis and if appropriate, approved. If a transaction relates to a memberliabilities of
our audit committee, such member does not participate in the audit committee’s deliberations. Our audit committee reports our related party transactions to our Board on at least an annual basis.SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a)18 of the Exchange Act requires(except to the extent that we specifically incorporate this information by reference).
The role of the audit committee is to, among other things, select and engage our executive officers, directorsindependent registered public accounting firm and persons who beneficially own more than 10%to oversee and monitor our financial reporting process, the independence and performance of the independent registered public accounting firm and the functioning of our common sharesinternal controls. It is management’s responsibility to file Initial Reportsprepare financial statements in accordance with generally accepted accounting principles and for the independent registered public accounting firm to perform an independent audit of Ownershipthe financial statements and Reportsto express an opinion on the conformity of Changes in Ownershipthose financial statements with generally accepted accounting principles.
In performing its duties, the SEC. Executive officers, directorsaudit committee:
reviewed and greater than 10% beneficial owners arediscussed our audited consolidated financial statements for the year ended December 31, 2022 (the “Audited Financial Statements”) with management and E&Y;
discussed with E&Y the matters required to be discussed by the Public Company Accounting Oversight Board (the “PCAOB”);
received from E&Y the written disclosures and the letter from E&Y regarding E&Y’s independence required by the rulesapplicable requirements of the PCAOB, and regulations promulgated pursuantdiscussed with such firm its independence; and
based on the reviews and discussions referred to above, the audit committee recommended that the Audited Financial Statements be included in its Annual Report on Form 10-K for the year ended December 31, 2022 for filing with the SEC.
| | | Louis C. Grassi (Chairman) |
| | | Gary Hurand |
| | | Elie Y. Weiss |
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DELINQUENT SECTION 16(a) REPORTS Each of Gould Investors, Jeffrey A. Gould and Matthew J. Gould filed two reports late with respect to the Exchange Act, to furnish us with copiessame two transactions.
ADDITIONAL INFORMATION AND NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS
As of
all Section 16(a) forms they file.Based solely on our reviewthe date of copiesthis proxy statement, we do not know of these reports filed with the SEC, we believeany business that none of our directors, executive officers and greater than 10% beneficial owners failed to file on a timely basis reports required by Section 16(a) during 2017.
OTHER MATTERS
Our board of directors knows of no other matters that may properlywill be presented for consideration at the Annualmeeting other than the items referred to in the Notice of the Meeting. IfSubject to applicable law, if any other matters arematter is properly brought before the Annual Meeting, it ismeeting for action by stockholders, the intentionholders of the persons named inproxies will vote and act with respect to the accompanying proxy to vote on such mattersbusiness in accordance with their discretion. Itbest judgment and discretionary authority to do so is important thatconferred by the proxies be returned promptlyenclosed proxy. Our Conduct Code, corporate governance guidelines and that you be represented. Stockholdersthe charters for our audit, compensation and nominating committees are urged to authorize aavailable under the “Corporate Governance” tab at www.brtapartments.com.
This proxy promptly by either electronically submitting astatement (including the notice of meeting), the proxy or voting instruction card over the Internet or by telephone or by delivering to us or your broker a signed and dated proxy card.our Annual Report are available at www.brtapartments.com/annualmeetingmaterials.pdf.
| By order of the Board of Directors |
| | | |
| | | |
S. Asher Gaffney, | | | |
Corporate Secretary
April 21, 2023 | | | |
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Annex A
BRT APARTMENTS CORP.2018 INCENTIVE PLANSECTION 1
EFFECTIVE DATE AND PURPOSE
1.1 Effective Date. This Plan was adopted effective December 5, 2017, subject to approval by the stockholders of BRT Apartments Corp., a Maryland corporation (the “Company”); provided, however, that any Awards granted hereunder prior to the approval of the Plan by the stockholders of the Company shall be conditioned upon approval by the stockholders of the Company and no Shares may be issued pursuant to any Award granted hereunder prior to approval of the Plan by the Company.
1.2 Purpose of the Plan. The Plan is designed to motivate, retain and attract Participants (as defined) of experience and ability and to further the financial success of the Company by aligning the interests of Participants through the ownership of Shares (as defined) with the interests of the Company’s stockholders.
SECTION 2
DEFINITIONS
The following terms shall have the following meanings (whether used in the singular or plural) unless a different meaning is plainly required by the context:
“1934 Act” means the Securities Exchange Act of 1934, as amended. Reference to a specific section of the 1934 Act or a regulation thereunder shall include any regulation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
“Affiliate” or “Affiliates” has the meaning ascribed to such term by Rule 501 promulgated under the Securities Act of 1933, as amended.
“Award” means, individually or collectively, a grant under the Plan of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock, Restricted Stock Units, Dividend Equivalent Rights and Performance Share Awards.
“Award Agreement” means either (1) the written agreement setting forth the terms and provisions applicable to each Award granted under the Plan or (2) a statement (including an electronic communication) issued by the Company to a Participant describing the terms and provisions of such Award.
“Board” or “Board of Directors” means the Board of Directors of the Company, or any analogous governing body of any successor to the Company.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations thereunder.
“Committee” means the Compensation Committee of the Board or the committee of the Board appointed to administer the Plan.
“Company” means BRT Apartments Corp., a Maryland corporation, or any successor thereto (including any entity that is a successor issuer in accordance with Rule 12g-3 under the 1934 Act and Rule 414 under the Securities Act of 1933, as amended).
“Dividend Equivalent Right” means an Award granted pursuant to Section 9, entitling the Participant to receive an amount of cash equal to the cash distributions that would have been paid on the Shares specified in the Award to which such Dividend Equivalent Right relates, as if such Shares had been issued to and held by the Participant holding such Dividend Equivalent Right during the period beginning with the grant date (or if otherwise determined by the committee, the beginning of the Performance Cycle) of the Award to which the Dividend Equivalent Right relates through the vesting date of such award.
“Disability” or “Disabled” means the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
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“Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to the exercise of an Option.
“Fair Market Value” means, as of any given date, (i) the closing sales price of the Shares on any national securities exchange on which the Shares are listed; (ii) the closing sales price if the Shares are listed on the OTCBB or other over the counter market; or (iii) if there is no regular public trading market for such Shares, the fair market value of the Shares as determined by the Committee.
“Grant Date” means, with respect to an Award, the effective date that such Award is granted to a Participant.
“Incentive Stock Option” means an Option to purchase Shares which is designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code.
“Non-management Director” means a Director who, in the applicable calendar year, was not compensated, directly or indirectly, by the Company, any Subsidiary or any of their Affiliates, other than compensation for service as a Director or as a member of any committee of the Board.
“Nonqualified Stock Option” means an Option to purchase Shares which is not an Incentive Stock Option.
“Option” means an Incentive Stock Option or a Nonqualified Stock Option.
“Participant” means an officer, employee, Director or consultant of the Company or any of its Subsidiaries who has been granted an Award under the Plan.
“Performance-Based Award” means any Restricted Stock Award, Restricted Stock Unit, Option or Performance Share Award granted to a Participant that qualifies as “performance based compensation” under Section 162(m) of the Code.
“Performance Criteria” shall mean any, a combination of, or all of the following: (i) pre-tax income, (ii) after-tax income, (iii) net income (meaning net income as reflected in the Company’s financial reports for the applicable period), (iv) operating income (including net operating income), (v) cash flow, cash flow from operations, free cash flow and any one or more of the foregoing, (vi) return on any one or more of equity, capital, invested capital and assets, (vii) funds available for distribution, (viii) occupancy rate at any one or more of the Company’s or its Subsidiaries’ properties, (ix) total stockholder return, (x) funds from operations (“FFO”), as computed in accordance with standards established by the National Association of Real Estate Investment Trusts, Inc., (xi) adjusted FFO (i.e., adjusting FFO to give effect to any one or more of the following: property acquisition costs, straight-line rent, amortization of lease intangibles, lease termination fee income, amortization of restricted stock or other non-cash compensation expense, amortization and/or write-off of deferred financing costs, deferred mortgage costs and debt prepayment costs), (xii) stock appreciation (meaning an increase in the price or value of the Shares after the date of grant of an award and during the applicable period), (xiii) revenues, (xiv) assets, (xv) earnings before any one or more of the following items: interest, taxes, impairment charges, depreciation or amortization for the applicable period, as reflected in the Company’s financial reports for the applicable period, (xvi) reduction in expense levels, (xvii) operating cost management and employee productivity, (xviii) strategic business criteria consisting of one or more objectives based on meeting specified revenue, market share, market penetration, geographic business expansion goals, objectively identified project milestones, cost targets and goals relating to acquisition or divestitures; and (xix) achievement of business or operational goals such as market share and/or business development. Performance Criteria need not be the same with respect to all Participants and may be established on an aggregate or per share basis (diluted or undiluted), may be based on performance compared to performance by businesses or indices specified by the Committee, may be compared to any prior period, may be based on a company-wide basis or in respect of any one or more business units, may be measured on an absolute or relative basis, may be adjusted for non-controlling interests, and any one or more of the foregoing. All calculations and financial accounting matters relevant to this Plan shall be determined in accordance with GAAP, except as otherwise directed by the Committee.
“Performance Cycle” means one or more periods of time which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participants right to and the payment of a Restricted Stock Award, Restricted Stock Unit, Option or Performance Share Award. Each such period shall not be less then twelve months.
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“Performance Goals” means for a Performance Cycle, the specific goals established by the Committee for a Performance Cycle based upon such criteria as the Committee may establish; provided that for any Award that is intended to qualify as a Performance-Based Award, such Performance Goals must be based on Performance Criteria.
“Period of Restriction” means the period during which an Award granted hereunder is subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of Performance Goals or the occurrence of other events as determined by the Committee.
“Plan” means the BRT Apartments Corp. 2018 Incentive Plan, as set forth in this instrument, and as hereafter amended from time to time.
“Restricted Stock” means an Award of Shares, the grant, issuance, retention and/or vesting of which is subject to such conditions as are expressed in the Award Agreement and as contemplated herein.
“Restricted Stock Unit” or “RSU” means an Award of a right to receive one Share, the grant, issuance, retention and/or vesting of which is subject to such conditions as are expressed in the Award Agreement and as contemplated herein.
“Retirement” means (i) a Director who has attained the age of 65 years who resigns or retires from the Board or does not stand for re-election to the Board and has served continuously as a Director of the Company for not less than six consecutive years, and (ii) an officer or employee of, or consultant to, the Company who has attained the age of 65 years who resigns or retires from the Company or one of its Subsidiaries and has served in any such capacity with the Company or one of its Subsidiaries for not less than ten consecutive years at the time of retirement or resignation, provided that such Participant has not acted in a manner during the period of his relationship with the Company or any of its Subsidiaries which has been harmful to the business or reputation of the Company. A determination as to whether a “retiree” acted in a manner which has been harmful to the business or reputation of the Company shall be made by the Committee, whose determination shall be conclusive and binding in all respects on the Participant and the Company.
“Shares” or “Shares of common stock” means the shares of common stock, $0.01 par value, of the Company, or any other security of the Company determined by the Committee pursuant to Section 5.3.
“Subsidiary” means (i) a corporation, association or other business entity of which 50% or more of the total combined voting power of all classes of capital stock is owned, directly or indirectly, by the Company or by one or more Subsidiaries of the Company or by the Company and one or more Subsidiaries of the Company, (ii) any partnership or limited liability company of which 50% or more of the capital and profit interests is owned, directly or indirectly, by the Company or by one or more Subsidiaries of the Company or by the Company and one or more Subsidiaries of the Company, or (iii) any other entity not described in clauses (i) or (ii) above of which 50% or more of the ownership and the power, pursuant to a written contract or agreement, to direct the policies and management or the financial and the other affairs thereof, are owned or controlled by the Company or by one or more Subsidiaries of the Company or by the Company and one or more Subsidiaries of the Company.
SECTION 3ELIGIBILITY3.1 Participants. Awards may be granted in the discretion of the Committee to officers, employees, Directors and consultants of the Company and its Subsidiaries.
3.2 Non-Uniformity. Awards granted hereunder need not be uniform among eligible Participants and may reflect distinctions based on title, compensation, responsibility or any other factor the Committee deems appropriate.
SECTION 4
ADMINISTRATION
4.1 The Committee. The Plan will be administered by the Committee, which, to the extent deemed necessary by the Board, will consist of two or more persons who satisfy the requirements for a “non-employee director” under Rule 16b-3 promulgated under the 1934 Act and the requirements for an “outside director” under section 162(m) of the Code. The members of the Committee shall be appointed from time to time by, and shall
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serve at the pleasure of, the Board of Directors. In the absence of such appointment, the Board of Directors shall serve as the Committee and shall have all of the responsibilities, duties, and authority of the Committee set forth herein.
4.2 Authority of the Committee. Subject to applicable law, the Committee shall have the exclusive authority to administer and construe the Plan in accordance with its provisions. The Committee’s authority shall include, without limitation, the power to (a) determine persons eligible for Awards, (b) prescribe the terms and conditions of the Awards, (c) construe and interpret the Plan, the Awards and any Award Agreement, (d) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith and (e) establish, interpret, amend or revoke any such rules. With respect to any Award that is intended to qualify as “performance-based compensation” within the meaning of section 162(m) of the Code, the Committee shall have no discretion to increase the amount of compensation that otherwise would be due upon attainment of a Performance Goal, although the Committee may have discretion to deny an Award or to adjust downward the compensation payable pursuant to an Award, as the Committee determines in its sole judgment. The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under the Plan to one or more officers of the Company to the extent permitted by law, other than the authority to grant Awards intended to qualify as “performance-based compensation” within the meaning of section 162(m) of the Code.
4.3 Decisions Binding. All determinations and decisions made by the Committee and any of its delegatees pursuant to Section 4.2 shall be final, conclusive and binding on all persons, and shall be given the maximum deference permitted by law.
4.4 Limitation on Awards Granted to Non-management Directors. The maximum number of Shares issuable pursuant to Awards that may be granted to a Non-management Director in any calendar year shall not exceed 20,000 Shares.
SECTION 5
SHARES SUBJECT TO THE PLAN
5.1 Number of Shares. Subject to adjustment as provided in Section 5.3, the total number of Shares available for grant under the Plan shall not exceed 600,000 Shares. The Shares available for issuance under the Plan shall be authorized but unissued Shares of the Company.
5.2 Lapsed Awards. Unless determined otherwise by the Committee, Shares related to Awards that are forfeited, cancelled, terminated or expire unexercised, shall be available for grant under the Plan. Shares that are tendered by a Participant to the Company in connection with the exercise of an Award, withheld from issuance in connection with a Participant’s payment of tax withholding liability, or settled in such other manner so that a portion or all of the Shares included in an Award are not issued to a Participant shall not be available for grant under the Plan.
5.3 Adjustments in Awards and Authorized Shares. In the event of a stock dividend or stock split, the number of Shares subject to the Plan, outstanding Awards and the numerical amounts set forth in Sections 5.1, 6.1, 7.1 and 8.1 shall automatically be adjusted proportionally to prevent the dilution or diminution of such Awards, except to the extent directed otherwise by the Committee. In the event of a merger, reorganization, consolidation, recapitalization, separation, liquidation, combination or other similar change in the structure of the Company affecting the Shares, the Committee shall adjust the number and class of Shares which may be delivered under the Plan, the number, class and price of Shares subject to outstanding Awards, and the numerical limits of Sections 5.1, 6.1, 7.1 and 8.1 in such manner as the Committee shall determine to be advisable or appropriate to prevent the dilution or diminution of such Awards. Any such numerical limitations shall be subject to adjustment under this Section only to the extent such adjustment will not affect the status of any Award intended to qualify as “performance-based compensation” under section 162(m) of the Code or the ability to grant or the qualification of Incentive Stock Options under the Plan or subject the Participant to taxes, penalties and interest imposed under section 409A(a)(1) of the Code.
5.4 Restrictions on Transferability. The Committee may impose such restrictions on any Award, Award of Shares or Shares acquired pursuant to an Award as it deems advisable or appropriate, including, but not limited to, restrictions related to applicable Federal securities laws, the requirements of any national securities exchange or system upon which Shares are then listed or traded, and any blue sky or state securities laws.
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SECTION 6
STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted to Participants at any time and from time to time as determined by the Committee. The Committee shall determine the number of Shares subject to each Option. The Committee may grant Incentive Stock Options, Nonqualified Stock Options, or any combination thereof. Subject to the additional limitations imposed on Awards intended to qualify as Performance Based Awards in Section 8.1(c), the maximum aggregate number of Shares underlying Options granted in any one calendar year to an individual Participant shall be 100,000.
6.2 Award Agreement. Each Option shall be evidenced by an Award Agreement that shall specify the Exercise Price, the expiration date of the Option, the number of Shares to which the Option pertains, whether the Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option, any conditions on exercise of the Option and such other terms and conditions as the Committee shall determine, including terms regarding forfeiture of Awards or continued exercisability of Awards in the event of termination of employment by the Participant.
6.3 Exercise Price. The Exercise Price for each Option shall be determined by the Committee and shall be provided in each Award Agreement; provided, however, the Exercise Price for each Option may not be less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date. In the case of an Incentive Stock Option, the Exercise Price shall be not less than one hundred ten percent (110%) of the Fair Market Value of a Share if the Participant (together with persons whose stock ownership is attributed to the Participant pursuant to section 424(d) of the Code) owns on the Grant Date stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries.
6.4 Expiration of Options. Except as provided in Section 6.7(c) regarding Incentive Stock Options, each Option shall terminate upon the earliest to occur of (i) the date(s) for termination of the Option set forth in the Award Agreement or (ii) the expiration of ten (10) years from the Grant Date. Subject to such limits, the Committee shall provide in each Award Agreement when each Option expires and becomes un-exercisable. Except as set forth in an Award Agreement, upon Retirement of a Participant an Option may be exercised by such Participant to the extent it was exercisable on the effective date of the Retirement and shall be exercisable for a period of six months from the effective date of such Retirement, but not later than the expiration of the maximum term such Option. The Committee may not, after an Option is granted, extend the maximum term of the Option.
6.5 Exercisability of Options. Options granted under the Plan shall be exercisable, in whole or in part, at such times and be subject to such restrictions and conditions as the Committee shall determine. After an Option is granted, the Committee may accelerate or waive any condition constituting a substantial risk of forfeiture applicable to the Option.
6.6 Payment. Options shall be exercised by a Participant’s delivery of a written notice of exercise to the Secretary of the Company (or his or her designee), setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. Upon the exercise of an Option, the Exercise Price shall be payable to the Company in full in cash or its equivalent. The Committee may permit exercise (a) by the Participant tendering previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Exercise Price, (b) the Participant tendering a combination of cash and previously acquired Shares equal to total Exercise Price (the Shares tendered being valued at Fair Market Value at the time of exercise), or (c) by any other means which the Committee determines to provide legal consideration for the Shares, and to be consistent with the purposes of the Plan. As soon as practicable after receipt of a written notification of exercise and full payment for the Shares purchased, the Company shall deliver, or cause to be delivered, to the Participant, evidence of such Participant’s ownership of such Shares. No right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares as to which the Option has been exercised until the records of the Company or its transfer agent reflect the issuance of such Shares. No adjustment will be made for a dividend or other rights for which a record date is established prior to the date the records of the Company or its transfer agent reflect the issuance of the Shares upon exercise of the Options.
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6.7 Certain Additional Provisions for Incentive Stock Options.
(a) Exercisability. The aggregate Fair Market Value (determined on the Grant Date(s)) of the Shares with respect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company, any parent and its Subsidiaries) shall not exceed $100,000. The portion of the Option which is in excess of the $100,000 limitation shall be treated as a Non-Qualified Option pursuant to Section 422(d)(1) of the Code.
(b) Company and Subsidiaries Only. Incentive Stock Options may be granted only to Participants who are officers or employees of the Company or a Subsidiary on the Grant Date.
(c) Expiration. No Incentive Stock Option may be exercised after the expiration of ten (10) years from the Grant Date. In the case of an Incentive Stock Option that is granted to a Participant who (together with persons whose stock ownership is attributed to the Participant pursuant to Section 424(d) of the Code) owns on the Grant Date stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the term of such Incentive Stock Option shall be no more than five years from the Grant Date.
6.8 Restriction on Transfer. Except as otherwise determined by the Committee or as set forth in the Award Agreement, no Option may be transferred, gifted, pledged, assigned, or otherwise alienated or hypothecated, voluntarily or involuntarily. Upon the death or Disability of a Participant, an Option may be exercised by the duly appointed personal representative of the deceased Participant or in the event of a Disability by the Participant or the duly appointed attorney-in-fact, guardian or custodian of the Disabled Participant to the extent the Option was exercisable on the date of death or the date of Disability and shall be exercisable for a period of six months from the date of death or the date of Disability.
6.9 Repricing of Options. Without stockholder approval, (i) the Company will not reprice, replace or regrant an outstanding Option either in connection with the cancellation of such Option or by amending an Award Agreement to lower the exercise price of such Option, and (ii) the Company will not cancel outstanding Options in exchange for cash or other Awards.
6.10 Voting Rights. A Participant shall have no voting rights with respect to any Options granted hereunder.
SECTION 7
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
7.1 Grant of Restricted Stock and Restricted Stock Units. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Shares of Restricted Stock and/or Restricted Stock Units to Participants in such amounts as the Committee shall determine. The Committee shall determine the number of Shares of Restricted Stock and/or RSUs to be granted to each Participant and the time when each Award shall be granted. Subject to the additional limitations imposed on Awards intended to qualify as Performance Based Awards in Section 8.1(c), no more than 100,000 Shares of each of Restricted Stock and Shares underlying Restricted Stock Units may be granted to any individual Participant in any one calendar year.
7.2 Restricted Stock and RSU Agreements. Each Award of Restricted Stock and Restricted Stock Units shall be evidenced by an Award Agreement that shall specify the Period of Restriction, the number of Shares of Restricted Stock granted, the number of Shares subject to a Restricted Stock Unit, any applicable Performance Goals and Performance Cycle, and such other terms and conditions as the Committee shall determine, including terms regarding forfeiture of Awards in the event of termination of employment by the Participant or termination of the Participant’s relationship with the Company as a director or consultant.
7.3 Transferability. Except as otherwise determined by the Committee or as set forth in the Award Agreement, Shares of Restricted Stock and Restricted Stock Units (including Shares underlying RSUs) may not be sold, transferred, gifted, bequeathed, pledged, assigned, or otherwise alienated or hypothecated, voluntarily or involuntarily, until the end of the applicable Period of Restriction and the satisfaction, in whole or in part, of any applicable Performance Goals within the applicable Performance Cycle. Except as otherwise determined by the Committee or as set forth in the Award Agreement, in the event of the death, Disability or Retirement of a Participant, all unvested Restricted Stock and unvested RSUs shall not vest on the date of death or Disability or the effective date of Retirement. Without stockholder approval, the Company will not, except as otherwise provided for in the Plan, repurchase outstanding unvested Restricted Stock or unvested RSUs in exchange for cash or accelerate the vesting of outstanding unvested Shares of Restricted Stock or RSUs.
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7.4 Other Restrictions. The Committee may impose such other restrictions on Shares of Restricted Stock and Restricted Stock Units (including Shares underlying RSUs) as it may deem advisable or appropriate in accordance with this Section 7.4.
(a) General Restrictions. The Committee may set one or more restrictions based upon (a) the achievement of specific Performance Goals, (b) applicable Federal or state securities laws, (c) time-based restrictions, or (d) any other restrictions determined by the Committee.
(b) Section 162(m) Performance Restrictions. For purposes of qualifying grants of Restricted Stock and/or RSUs as “performance-based compensation” under Section 162(m) of the Code, the Committee, in its sole discretion, may set restrictions based upon the achievement of Performance Goals. The Performance Goals shall be set by the Committee on or before the latest date permissible to enable the Restricted Stock and/or RSUs to qualify as “performance-based compensation” under section 162(m) of the Code. In granting Restricted Stock and/or RSUs that are intended to qualify under section 162(m) of the Code, the Committee shall follow any procedures determined by it in its sole discretion from time to time to be necessary, advisable or appropriate to ensure qualification of the Restricted Stock and/or RSUs under section 162(m) of the Code.
(c) Methods of Implementing Restrictions. The Committee may take such action as it, in its sole discretion, deems appropriate to give notice to the Participant of, and implement, the restrictions imposed pursuant to Section 7.
7.5 Removal of Restrictions. After the end of the Period of Restriction, the Shares shall be freely transferable by the Participant, subject to any other restrictions on transfer (including without limitation, limitations imposed pursuant to the Company’s organizational documents) which may apply to such Shares.
7.6 Voting Rights. Except as otherwise determined by the Committee and set forth in the Award Agreement, Participants holding (a) Shares of Restricted Stock shall have voting rights during the Period of Restriction and (b) Restricted Stock Units shall not have voting rights during the Period of Restriction.
7.7 Dividends and Other Distributions. Except as otherwise determined by the Committee and set forth in the Award Agreement, Participants holding (a) Shares of Restricted Stock shall be entitled to receive all dividends and other distributions paid with respect to the Shares during the Period of Restriction and (b) except to the extent a Dividend Equivalent Right is granted in tandem with an RSU, RSUs shall not be entitled to receive any dividends or other distributions paid with respect to the underlying Shares during the Period of Restriction.
SECTION 8
PERFORMANCE-BASED AWARDS
8.1 Performance-Based Awards. Participants selected by the Committee may be granted one or more Performance Awards in the form of Options, Restricted Stock, Restricted Stock Units, Dividend Equivalent Rights or Performance Share Awards payable upon the attainment of Performance Goals that are established by the Committee and related to one or more of the Performance Criteria, in each case on a specified date or dates or over a Performance Cycle determined by the Committee. A Performance Cycle shall be at least one year. The Committee in its sole discretion shall determine whether an Award is to qualify as “performance based compensation” under Section 162(m) of the Code. The Committee in its sole discretion shall determine Awards that are based on Performance Goals but are not intended to quality as “performance based compensation” under Section 162(m). The Committee shall define the manner of calculating the Performance Criteria it selects to use for any Performance Cycle. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of an individual. The Committee, in its discretion, may adjust or modify the calculation of Performance Goals for such Performance Cycle in order to prevent the dilution or enlargement of the rights of an individual (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event or development, (ii) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or (iii) in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions; provided however, that the Committee may not exercise such discretion in a manner that would increase the Performance-Based Award granted to a Participant. Each Performance-Based Award shall comply with the provisions set forth below. Performance Awards, other than Dividend Equivalent Rights, shall be paid in Shares.
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(a) Grant of Performance-Based Awards. With respect to each Performance-Based Award granted to a Participant, if intended by the Committee to qualify as “performance based compensation” under Section 162(m) of the Code, the Committee shall select, within the first 90 days of a Performance Cycle the Performance Criteria for such grant, and the Performance Goals with respect to each Performance Criterion (including a threshold level of performance below which no amount will become payable with respect to such Award). Each Performance-Based Award will specify the amount payable, or the formula for determining the amount payable, upon achievement of the various applicable performance targets. The Performance Criteria established by the Committee may be (but need not be) different for each Performance Cycle and different Performance Goals may be applicable to Performance-Based Awards to different Participants.
(b) Payment of Performance-Based Awards. Following the completion of a Performance Cycle, the Committee shall meet to review and certify in writing whether, and to what extent, the Performance Goals for the Performance Cycle have been achieved and, if so, to calculate and certify in writing the amount of the Performance-Based Awards earned for the Performance Cycle. The Committee shall then determine the actual size of each Participant’s Performance-Based Award, and, in doing so, may reduce or eliminate the amount of the Performance-Based Award for a Participant if, in its sole judgment, such reduction or elimination is appropriate.
(c) Maximum Award Payable. The maximum Performance-Based Award payable to any one Participant under the Plan for a Performance Cycle is 100,000 Shares (subject to adjustment as provided in Section 5.3 hereof).
SECTION 9
DIVIDEND EQUIVALENT RIGHTS
9.1 Dividend Equivalent Rights. A Dividend Equivalent Right may be granted hereunder to any Participant only in tandem with an Award of RSUs or a Performance Based Award (other than an Award of Restricted Stock or Options). The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Agreement which shall provide that such Dividend Equivalent Right, except to the extent otherwise provided in the related Award Agreement, shall (i) not be sold, transferred, gifted, bequeathed, pledged, assigned, or otherwise alienated or hypothecated, voluntarily or involuntarily, until the end of the applicable Period of Restriction and the satisfaction, in whole or in part, of any applicable Performance Goals within the applicable Performance Cycle, and (ii) be settled upon settlement or payment of, or lapse of restrictions on, the Award to which it relates, and such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such Award.
SECTION 10
AMENDMENT, TERMINATION, AND DURATION
10.1 Amendment, Suspension, or Termination. The Board, in its sole discretion, may amend, suspend or terminate the Plan, or any part thereof, at any time and for any reason; provided, however, that if and to the extent required by law or to maintain the Plan’s compliance with the Code, the rules of any national securities exchange (if applicable), or any other applicable law, any such amendment shall be subject to stockholder approval; and further provided, that without stockholder approval, no amendment shall permit the repricing, replacing or regranting of an Option in connection with the cancellation of such Option or by amending an Award Agreement to lower the exercise price of such Option or the cancellation of any Award in exchange for cash. The amendment, suspension or termination of the Plan shall not, without the consent of the Participant, alter or impair any rights or obligations under any Award theretofore granted to such Participant. No Award may be granted during any period of suspension or after termination of the Plan.
10.2 Duration of the Plan. The Plan shall become effective in accordance with Section 1.1, and subject to Section 10.1 shall remain in effect until the tenth anniversary of the effective date of the Plan.
SECTION 11
TAX WITHHOLDING
11.1 Withholding Requirements. Prior to the delivery of any Shares pursuant to an Award (or the exercise thereof), the Company shall have the power and the right to deduct or withhold from any amounts due to the
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Participant from the Company, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state and local taxes (including the Participant’s FICA obligation) required or appropriate to be withheld with respect to such Award (or the exercise or vesting thereof).
11.2 Withholding Arrangements. The Company, pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part, by (a) electing to have the Company withhold otherwise deliverable Shares, or (b) delivering to the Company, Shares then owned by the Participant. The amount of the withholding requirement shall be deemed to include any amount that the Company agrees may be withheld at the time any such election is made, not to exceed the amount determined by using the maximum federal, state or local marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered shall be determined as of the date that the taxes are required to be withheld.
SECTION 12
CHANGE IN CONTROL
12.1 Change in Control. For purposes of the Plan, a Change in Control means any of the following:
(a) the acquisition (other than from the Company) in one or more transactions by any person (as such term is used in Section 13(d) of the 1934 Act) of the beneficial ownership (within the meaning of Rule 13d-3 under the 1934 Act) of 25% or more of (i) the then outstanding Shares or (ii) the combined voting power of the then outstanding securities of the Company entitled to vote generally in the election of Directors (the “Company Voting Stock”), provided however the provision of this Section 12.1(a) is not applicable to acquisitions made individually, or as a group by Fredric H. Gould, Matthew J. Gould and Jeffrey A. Gould, and their respective spouses, lineal descendants and affiliates;
(b) individuals who, as of the date of the Award, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a Director subsequent to the date of such Award whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the Directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in the Rules of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
(c) the closing of a sale or other conveyance of all or substantially all of the assets of the Company; or
(d) the effective time of any merger, share exchange, consolidation, or other business combination involving the Company if immediately after such transaction persons who hold a majority of the outstanding voting securities entitled to vote generally in the election of Directors of the surviving entity (or the entity owning 100% of such surviving entity) are not persons who, immediately prior to such transaction, held the Company’s voting Shares.
12.2 Effect of Change of Control. On the effective date of any Change in Control, unless the applicable Award Agreement provides otherwise: (i) in the case of an Option, each such outstanding Option shall become exercisable in full in respect of the aggregate number of Shares covered thereby; and (ii) in the case of Restricted Stock, Restricted Stock Units, Dividend Equivalent Rights and Performance Share Awards, the Period of Restriction applicable to each such Award shall be deemed to have expired. Notwithstanding the foregoing, unless otherwise provided in the applicable Award Agreement, the Committee may, in its discretion, determine that any or all outstanding Awards of any or all types granted pursuant to the Plan will not become exercisable on an accelerated basis nor will the Restriction Period expire in connection with a Change of Control if effective provision has been made for the taking of such action which, in the opinion of the Committee, is equitable and appropriate to substitute a new Award for such Award or for the assumption of such Award and to make such new or assumed Award, as nearly as may be practicable, equivalent to the old Award (before giving effect to any acceleration of the exercisability or the expiration of the Restriction Period), taking into account, to the extent applicable, the kind and amount of securities, cash, or other assets into or for which the Shares may be changed, converted, or exchanged in connection with such Change of Control.
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SECTION 13
MISCELLANEOUS
13.1 Deferrals. To the extent consistent with the requirements of section 409A of the Code, the Committee may provide in an Award Agreement or another document that a Participant is permitted or required to defer receipt of the delivery of Shares that would otherwise be due to such Participant under an Award other than an Option. Any such deferral shall be subject to such rules and procedures as shall be determined by the Committee.
13.2 Termination for Cause. If a Participant’s employment or relationship with the Company or a Subsidiary shall be terminated for cause by the Company or such Subsidiary during the Restriction Period or prior to the exercise of any Option (for these purposes, cause shall have the meaning ascribed thereto in any employment agreement or Award Agreement to which such Participant is a party or, in the absence thereof, shall include, but not be limited to, insubordination, dishonesty, incompetence, moral turpitude, the refusal to perform his duties and responsibilities for any reason (other than illness or incapacity) and other misconduct of any kind, as determined by the Committee, then, (i) all Options (whether or not then vested and exercisable) shall immediately terminate and (ii) such Participant’s rights to all Restricted Stock, RSUs and Performance Share Awards shall be forfeited immediately.
13.3 Section 162(m). Except as otherwise provided herein, in an Award Agreement or otherwise determined by the Committee, an Award that is intended to qualify as “performance based compensation” under Section 162(m) of the Code, shall not vest in whole or in part in the event of the Participant’s Retirement, involuntary termination or if the Participant terminates his or her relationship with the Company, except to the extent (a) the Performance Goal’s shall be achieved within the Performance Cycle or (b) otherwise permitted under Section 162(m) of the Code.
13.4 No Effect on Employment or Service. Nothing in the Plan, any Award or any Award Agreement, and no action of the Committee, shall confer or be construed to confer on any Participant any right to continue in the employ or service of the Company or any Subsidiary or shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment or service at any time, with or without cause. Employment with the Company or any Subsidiary is on an at-will basis only, unless otherwise provided by an applicable employment or service agreement between the Participant and the Company or any Subsidiary, as the case may be.
13.5 Successors. All obligations of the Company under the Plan, with respect to Awards granted hereunder, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect merger, consolidation or otherwise, or the purchase of all or substantially all of the business or assets of the Company.
13.6 No Rights as Stockholder. Except to the limited extent provided in Sections 7.6 and 7.7, no Participant (nor any beneficiary thereof) shall have any of the rights or privileges of a stockholder of the Company with respect to any Shares issuable pursuant to an Award (or the exercise or vesting thereof), unless and until the issuance of such Shares shall have been recorded on the records of the Company or its transfer agents or registrars.
13.7 Uncertificated Shares. Notwithstanding any provision of the Plan to the contrary, the ownership of Shares issued under the Plan may be evidenced in such a manner as the Committee (including any management designee of the Committee), in its sole discretion, deems appropriate, including by book-entry or direct registration (including transaction advices) or the issuance of one or more share certificates, and to the extent that the Plan, applicable law or the Company’s organizational documents, require or contemplate the imposition of a legend or other notation on one or more certificates evidencing Shares or an Award, the Committee (including any management designee of the Committee) shall have the sole discretion to determine the manner in which such legend or notation is implemented.
13.8 Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, or Awards, or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be forfeited or otherwise eliminated.
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13.9 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
13.10 Requirements of Law; Claw-Back Policies. The grant of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required from time to time, and shall be subject to the applicable provisions of any claw-back policy implemented by the Company, whether implemented prior to or after the grant of such Award, including without limitation, any claw-back policy adopted to comply with the requirements of applicable law (including the requirements of a national securities exchange).
13.11 Securities Law Compliance. To the extent any provision of the Plan, Award Agreement or action by the Committee fails to comply with any applicable federal or state securities law, it shall be deemed null and void, to the extent permitted by law and deemed advisable or appropriate by the Committee.
13.12 Real Estate Investment Company. No Award shall be granted or awarded and, with respect to any Award granted under the Plan, such Award shall not vest, be exercisable or be settled, to the extent that the grant, vesting, exercise or settlement of such Award could cause the Participant or any other person to be in violation of any restrictions on ownership and transfer of the Company’s securities set forth in its declaration of trust or other governing instrument or organizational documents, as amended and in effect from time to time, or if, in the discretion of the Committee, the grant, vesting, exercise or settlement of such award could otherwise impair the Company’s status as a real estate investment trust under the Code.
13.13 Governing Law. The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the State of Maryland.
13.14 Captions. Captions are provided herein for convenience of reference only, and shall not serve as a basis for interpretation or construction of the Plan.