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BRT APARTMENTS CORP. |
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Apartments Corp.APARTMENTS CORP.March 13, 2018Annual Meetingannual meeting of Stockholdersstockholders of BRT Apartments Corp., a Maryland corporation (“we”, “us”, “our”, or the “Company”) will be held at our offices, located at 60 Cutter Mill Road, Great Neck, NY on Tuesday, March 13, 2018,June 11, 2024, at 9:00 a.m., local time, at the offices of BRT Apartments Corp., 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021, forto consider and vote on the following purposes:matters:1. 1.To electThe election of three Class I Directors, each to serve until the 20212027 Annual Meeting of Stockholders and until their successors arehis or her successor is duly elected and qualify;qualifies;2. 2.To consider and vote on a proposal to approve the BRT Apartments Corp. 2018 Incentive Plan;3.To consider and vote on aA proposal to ratify the appointment of BDO USA,Ernst & Young LLP as our independent registered public accounting firm for the year ending September 30, 2018;December 31, 2024;3. A proposal to approve the BRT Apartment Corp. 2024 Incentive Plan; and 4. 4.To transact anyAny other business as may properly comebrought before the meeting.StockholdersThe Board of Directors recommends that you vote “FOR” the election of each of the nominees listed in the accompanying proxy statement, “FOR” proposal 2 to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2024, and “FOR” proposal 3 to approve the BRT Apartments Corp. 2024 Incentive Plan.January 11, 2018March 15, 2024 are entitled to notice of and to vote at ourthe annual meeting. meeting and any adjournment or postponement thereof. of common stock be represented and voted at the meeting. You canTo assure that your vote your shares of common stock by completingwill be counted, please complete, date and returningsign the enclosed proxy card. Certaincard and return it in the enclosed prepaid envelope, whether or not you plan to attend the meeting. Most stockholders can also vote their shares of common stock overby telephone or via the internet. Telephone and internet or by telephone. If internet or telephone voting information is available to you, voting instructions are printedprovided on the accompanying proxy card sent to you. You can revoke acard. Your proxy at any time prior to its exercise atmay be revoked in the meeting by following the instructionsmanner described in the accompanying proxy statement.statement at any time before it has been voted at the meeting.
Great Neck, New YorkJanuary
BRT APARTMENTS CORP.2018 ANNUAL MEETINGPROXY STATEMENT
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PROXY STATEMENT
Our fiscal year begins on October 1st and ends on September 30th. Unless otherwise indicated or the context otherwise requires, all references to a year (e.g., 2017), refer to the applicable fiscal year ended September 30th.
Our executive offices are located at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021. Our telephone number is (516) 466-3100.
January 25, 2018April 26, 2024 to holders of record of our common stock as of the close of business on January 11, 2018,March 15, 2024, which we refer to as the “record date”. The record date was established by our Board.board. Stockholders of record as of the close of business on the record date are entitled to notice of and to vote their shares at the meeting. At the close of business on the record date, there were 18,582,627 shares of common stock outstanding and entitled to vote. Each outstanding share of common stock is entitledentitles the holder to cast one vote on each director to be elected and stockholders do not haveeach other matter to be considered at the right to vote cumulatively in the election of directors.meeting. Shares of our common stock constitute our only outstanding class of voting securities and will vote as a single class on all matters to be considered at the annual meeting.
meeting. On the record date, there were 14,022,438 shares of common stock outstanding and entitled to vote.meeting on any matter. In order to carry on the business at the meeting, holders of a majority of our outstanding shares must be present in person or by proxy. This means that at least 7,011,2209,291,314 shares of common stock must be present at the meeting, either in person or by proxy, to constitute a quorum. Generally, action cannot be taken at the meeting unless a quorum is present.Because many stockholders cannot attendperson, it is necessary that a large number of stockholders be represented by proxy. Most stockholders have a choice of votingperson.Internet, by using a toll-free telephone number or by completing a proxy card and mailing it in the postage paid envelope provided.1Please refer to your proxy card or to the information provided by your bank, broker, or other holder of record to see which options are available to you. You should be aware that if you voteinternet, by telephone or over the Internet, you may incur costs, such as telephone or Internet access charges, for which you willby mail must be responsible. The Internet and telephone voting facilities for stockholders of record will close atreceived by 11:59 p.m., New York City time, on March 12, 2018.June 10, 2024. If you vote by telephone or via the Internet,internet, it is not necessary to return ayour proxy card.Is my vote important?Yes. Under applicable rules, brokers, banks andnomineessimilar organization (collectively, an “Agent”), then you are prohibited from votingthe beneficial owner of shares held in street“street name,” and a voting instruction form was forwarded to you by your Agent. As a beneficial owner, you have the right to instruct your Agent on how to vote the shares held in your account. You should instruct your Agent how to vote your shares by following the voting instructions provided by the Agent. If you wish to vote in person at the annual meeting, you must obtain a legal proxy from your Agent.pertainingthat properly come before the meeting. If any nominee named in this proxy statement is unwilling or unable to serve as a director, our board may nominate another individual for election as a director at the annual meeting, and the persons named as proxy holders will vote “FOR” the election of directors unlessany substitute nominee.client specifically instructs hisclose of business on the record date and you wish to name as a proxy someone other than the proxies named on the proxy card, you may do so by crossing out the name of the designated proxies and inserting the name of another person. In that case, it will be necessary to sign the proxy card and deliver it to the person so named and for the person so named to be present at and vote at the meeting with the properly executed and marked proxy card. Proxy cards so marked should not be mailed to us or her nomineeto Equiniti Trust Company, LLC, which we refer to as “Equiniti”.
hold the annual meeting.
The affirmative vote of a majorityall of the votes cast on the proposal is required to ratify the appointmentselection of our independent registered public accounting firm, BDO USA LLP, for the year ending September 30, 2018, is requiredE&Y and to approve this proposal. Abstentionsthe 2024 Incentive Plan. For purpose of such votes, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the resultresults of the vote. Brokers, banks and other nomineesvote on either proposal. Agents are not prohibited from voting shares held in street name in their discretion on thisthe proposal relating to the selection of E&Y, and we do not expect to receive any broker non-votes on this proposal.
Corporate Secretary. June 2025. statement no later than things, reviews our incentive compensation arrangements to ensure that such arrangements do not encourage unnecessary risk taking. The compensation committee believes that the compensation programs which are in place do not give rise to any risk that is reasonably likely to have a material adverse effect on us. and committee charters. Audit Committee (ii) performs the risk oversight function described in “ — Risk Oversight”. The nominating When seeking candidates for director, the nominating The Board affirmatively determined that for the purposes of the corporate governance requirements of the New York Stock Exchange and applicable SEC requirements, each of (i) Carol Cicero, Alan H. Ginsburg, Louis C. Grassi, Gary Hurand, Jeffrey Rubin, Jonathan H. Simon and Elie Y. Weiss, constituting ” In addition, The table below shows the aggregate number of unvested stock awards held by the named directors and the value thereof as of Secretary.Are our proxy materials available onOffice of the Internet?Our proxy materials are available at: www.brtapartments.com/annualmeetingmaterials.pdf.20192025 annual meeting?for the year ending September 30, 2018 will be held in March 2019.Boardboard and other matters which stockholders wish to present for action at an annual meeting of stockholders (other than matters included in our proxy materials in accordance with Rule 14a-8(e) under the Securities Exchange Act)Act of 1934, as amended (the “Exchange Act”). The Office of the Corporate Secretary must receive such notice, as well as the information and other materials required by our bylaws, at our principal executive officesoffice not later than September5:00 PM, Eastern Time, on December 27, 20182024 and no earlier than August 28, 2018November 27, 2024 for matters or nominations to be properly presented at the 20192025 annual meeting of our stockholders.2019 Annual Meeting2025 annual meeting pursuant to Rule 14a-8 under the Exchange Act must cause their proposals to be received in writing by ourthe Office of the Corporate Secretary at the address set forth on the cover page of this proxy statement/prospectus2SeptemberDecember 27, 2018.2024. Any proposal should be addressed to ourthe Office of the Corporate Secretary and may be included in next year’s proxy materials for our 20192025 annual meeting of stockholders only if such proposal complies with the rules and regulations promulgated by the Securities and Exchange Commission, which we refer to as the “SEC.” Nothing in this section shall be deemed to require usWe are not required to include in our proxy statement or our proxy card relating to any annual meeting any nominee for director or stockholder proposal that does not meet all of the requirements for inclusion established by the SEC.Who will countvote?A representativeCorporate Secretary, to request a copy of our transfer agent, American Stock TransferAnnual Report on Form 10-K for the year ended December 31, 2023. This and Trust Company, LLC, will tabulate the votes and act as inspector of elections.Can I revoke my proxy before itother important information about us is exercised?If you hold stock directly in your name, you can revoke your proxyalso available on our web site which is located at any time before it is voted at the annual meeting by filing a written revocation with our Secretary, or deliveringwww.brtapartments.com. Our 2023 Annual Report to American Stock Transfer and Trust Company, LLC a properly executed proxy bearing a later date. You may also revoke your proxy with a timely and valid later telephone or Internet vote or by attending the meeting and voting in person. If not so revoked, the shares represented by such proxy will be voted.If your shares are held in the name of a broker, bank or other nominee, you must contact such nominee and comply with the nominee’s procedures if you want to revoke or change the instructions that you previously provided to the nominee. Attendance at the meeting will not by itself automatically revoke a previously granted proxy.How will my shares be voted?All shares entitled to vote and represented by properly completed proxies received prior to the meeting and not revoked, will be voted at the meeting in accordance with your instructions. If no choice is indicated on the proxy card received from a registered holder, the persons named as your proxies will vote your shares, “FOR” the election of the three nominees for Class I Director named inStockholders (the “Annual Report”) accompanies this proxy statement (i.e., Alan Ginsburg, Jeffrey A. Gould, and Jonathan Simon), “FOR” the proposal to approve our 2018 Incentive Plan, “FOR” the ratification of the appointment of BDO USA, LLP as our independent registered public accounting firm for 2018, and as the proxy holders may determine, in their discretion, with respect to any other matters that may properly come before the meeting. The Board is not currently aware of any business or nominations that may properly be brought before the meeting to be acted upon at the meeting other than as described in this proxy statement.If other business is properly introduced at the annual meeting, the persons named in the proxy as the proxy holders will vote on such matters at their discretion. If any nominee named in this proxy statement is unwilling or unable to serve as a director, our board of directors may nominate another individual for election as a director at the annual meeting, and the persons named as proxy holders will vote for the election of any substitute nominee.Who is soliciting my vote and who pays the cost?We are soliciting proxies and will pay the entire cost of soliciting proxies, including preparing and mailing this proxy statement. In addition to the solicitation of proxies by mail and through our full-time and part-time employees, we will request banks, brokers, custodians, nominees and other record holders to forward copies of the proxy statement and other soliciting materials to persons for whom they hold common shares and to request instruction on how to vote the shares. We will reimburse such record holders for their reasonable out-of-pocket expenses in forwarding proxies and proxy materials to stockholders. We have retained DF King for a fee of $6,000, plus reasonable out of pocket expenses, to aid in the solicitation of proxies from our stockholders. To the extent necessary in order to ensure sufficient representation at the meeting, we or our proxy solicitor may solicit the return of proxies by personal interview, mail, telephone, facsimile, Internet or other means of communication or electronic transmission. The extent to which this will be necessary depends upon how promptly proxies are returned. We urge you to send in your proxy without delay.3governedmanaged by or under the Boarddirection of our board and by the committees of the Board. Members of the Boardits committees. Directors are kept informed about our business through discussions with our Chairman,chairman, our Chief Executive Officerchief executive officer and our other officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees. During 2017,2023, the Boardboard held four meetings, and each director, other than Mr. Ginsburg who missed several meetings due to illness, attended at least 75% of the aggregate number of Board and meetings of the board and all committees of the Board on which such director served.served during such year. We typically schedule a Boardboard meeting in conjunction with our annual meeting of stockholders and encourage our directors to attend thesuch meeting— 73% of our directors attended our 2023 annual meeting of stockholders. Only one director attended our 2017 annual meeting of stockholders due to the blizzard that occurred in New York on the date of such meeting.aan amended and restated code of business conduct and ethics, which we refer to as the “Conduct Code”, that applies to all of our directors, officers employees, agents and consultants, including our Chief Executive Officer, principal financial officer, principal accounting officer or controller or person performing similar functions.employees. The code of business conduct and ethicsConduct Code covers a variety of topics, including those required by the SEC and the New York Stock Exchange. Topics covered include, but are not limited to, conflicts of interest, confidentiality of information, and compliance with laws and regulations. The codeSee “Additional Information and Notice of business conduct and ethics, as amended and restated, is available at the corporate governance sectionInternet Availability of Proxy Materials” to obtain access for or copies of our website at www.brtapartments.com and may be obtained by writing to us at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021, Attention: Secretary.Conduct Code. During 2017,2023, there were no waivers of the provisions of the code of business conduct and ethicsConduct Code with respect to any of our directors, officers, employees, agents or consultants.the persons subject thereto. We will post any amendments to, or waivers of, our code of business conduct and ethicsthe Conduct Code on our website.Boardboard has overall responsibility for overseeing risk management with a focus on the more significant risks facing us. Our audit committee oversees risk policies and processes related to our financial statements, financial reporting processes and liquidity risk, and other risks presented to it from time-to-time by management; our nominating and corporate governance committee, which we refer to as the “nominating committee,” oversees corporate governance risksrisks; and our compensation committee oversees risks relating to remunerationthe compensation of our officers and employees.full-time executive officers. The compensation committee does not believe that the compensation programs which are in place give rise to any risk that is reasonably likely to have a material adverse effect on us.Ata portion of the meeting is devoted to reviewing the status of theour properties in our real estate portfolio and other matters (including related party transactions) which might have a material adverse impact on current or future operations. A seniorAn executive officer reports to the committee regarding the activities of our disclosure controls and procedures committee – this committee is comprised primarily of the individuals responsible for our financial and regulatory reporting, meets approximately six to eightfour times a year and is responsible for identifying areas of risk and in particular, risks with respect to disclosure controls and internal controls over financial reporting. In addition, a senioran executive officer, our internal auditor and the independent registered public accounting firm reviewing or auditing, as the case may be, our financial statements, reports or is available to report, to the committee with respect to our compliance with our internal control policies in order to ascertain that no failures of a material nature have occurred. This process assists the audit committee in overseeing the risks related to our financial statements and the financial reporting process.Boardboard meetings, the directors review significant risk issues brought to their attention by management and committees of the auditboard.andamong other Board committees.The Board believes that: (i) separatingJeffrey A. Rubin has been designated by the roleboard of Chairman and Chief Executive Officer is the most appropriate structure at this time because it makes the best use of the abilities of Messrs. Rosenzweig and Gould; and (ii) this leadership structure provides appropriate risk oversight of our activities.4Boardboard has three standing committees: an audit, committee, a compensation committee, and a nominating and corporate governance committee.nominating. The Boardboard has adopted a chartercharters for each standing committee, as well as corporate governance guidelinesthese committees which require that address the make-up and functioning of the Board and its committees. The charter for each standing committee requires that such committeethey be comprised of at least three independent directors and, in the case of the audit committee, also requires that at least one member of thesuch committee qualify as a “financial expert.” All of the members of each committee were independent during their period of service on such committee and in the case of the audit committee, each such member was also financially literate.You can find each charter and the The board has also adopted corporate governance guidelines by accessingthat address the corporate governance sectionmake-up and functioning of our website at www.brtapartments.com. Copiesthe board and its committees. See “Additional Information and Notice of these charters and theInternet Availability” to obtain access for or copies of our corporate governance guidelines may be obtained by writing to us at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021, Attention: Secretary.theour committees of the Board for 2017:2023:
and Corporate
Governance * Audit committee financial expert. (v)(vii) the preparation of the audit committee report required by the SEC for inclusion in this proxy statement. This committee is also responsible for the selection and engagement of our independent registered public accounting firm, for approving the fees payable to such firm, and for approving related party transactions.reviews(i) determines the base salary, annual bonus and makes recommendations and/or determinations with respectperquisites paid to our full-time executive officers, the salaries, bonuses and stock awards offees paid to our directors, the fees for the Services (as described in “Executive Compensation – Compensation Setting Process – Part Time Executive Officers – Services), the grant of awards pursuant to our equity based plans and full-time named executive officers.and Corporate Governance Committee to the Board a slate of nominees for election to the Boardboard at the annual meeting of stockholders, recommending committee assignments to the Board,board of directors, making a recommendation to the Boardrecommendations with respect to the independence of each director and nominee for directors, identifying and recommending candidates to fill vacancies on the Boardboard or committees thereof, between annual meetings of stockholders, overseeing Board and committeeboard performance evaluations, proposing a slate of officers to the directors for election at the annual meeting of the Boardboard, overseeing compliance with our stock ownership guidelines, monitoring and monitoring corporate governance matters, including overseeingrecommending changes to our corporate governance guidelines.guidelines, and its risk oversight responsibilities described in “ — Risk Oversight”.Boardboard believes that it should be comprised of directors with complementary backgrounds, and that directors should, at a minimum, have expertise that may be useful to us. Our nominating and corporate governance committee has not adopted a formal diversity policy in connection with the consideration of director5nominations or the selection of nominees. It considers the personal and professional attributes and the business experience of each candidate for director to promote diversity of expertise and experience among our directors. Additionally, directors should possess the highest personal and professional ethics and should be willing and able to devote the required amount of time to our business.and corporate governance committee will take into account a number ofvarious factors, including the following:Independence from management;Whetherwhether the candidate has relevant business experience;Judgment,the candidate’s judgment, skill, integrity and reputation;Financial and accounting background, to enable the committee to determine whether the candidate would be suitable for audit committee membership;Executive compensationhas a background to enablein accounting or finance or other skills deemed relevant by the committee to determine whether the candidate would be suitable for compensation committee membership;board; andThethe size and composition of the existing board. and corporate governance committee will consider candidates for director suggested by stockholders, applying the criteria for candidates described above, and considering the additional information referred to below and evaluating such nominees in the same manner as other candidates.below. Stockholders wishing to suggest a candidate for nomination for election as a director should write to ourthe Office of the Corporate Secretary and include:Aa statement that the writer is a stockholder and is proposing a candidate for consideration by the committee;Thethe name of and contact information for the candidate;Aa statement of the candidate’s business and educational experience;Informationinformation regarding each of the factors listed above sufficient to enable the committee to evaluate the candidate;Aa statement detailing any relationship between the candidate and any of our competitors;Detaileddetailed information about any relationship or understanding between the proposing stockholder and the candidate; andAa statement that the candidate is willing to be considered and willing to serve as a director if nominated and elected.Before nominating an incumbent director for re-election at an annual meeting of stockholders, the nominating and corporate governance committee will consider:The director’s performance on the Board; andWhether the director’s re-election would be consistent with our corporate governance guidelines. and corporate governance committee may solicit suggestions from management, incumbent directors or others. The committee or its chairmanchairperson will interview a candidate if it is believed the candidate might be suitable to be a director. The nominating and corporate governance committee may also ask the candidate to meet with management. If the nominating and corporate governance committee believes a candidate would be a valuable addition to the Board, it will recommend the candidate’s election to the full board. and corporate governance committee generally intends to recommend that the Board nominate incumbent directors who the committee believes will continue to make important contributions to us, inasmuch as the committee believes that the continuing service of qualified incumbents promotes stability and continuity, giving us the benefit of the familiarity and insight into our affairs that such directors have accumulated during their tenure, while contributing to the Board’sboard’s ability to work as a collective body.6In determining whether our directors are independent, we apply the New York Stock Exchange’s corporate governance listing standards. Such standards provide:No director qualifies as “independent” unless the board affirmatively determines that the Director has no material relationship with us or any of our subsidiaries (either directly or as a partner, shareholder or officer of an organization that has a relationship with us or any of our subsidiaries);A director who is an employee, or whose immediate family member is an executive officer, of ours or any of our subsidiaries is not independent until three years after the end of such relationship;A director who received, or whose immediate family member received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from us or any of our subsidiaries, other than director and committee fees and pension or other forms of deferred compensation for prior services (provided such compensation is not contingent in any way on continued service), is not independent until three years after he or she ceases to receive more than $120,000 in any twelve-month period;A director who is, or who has an immediate family member who is, a current partner of our internal or external auditor, a director who is a current employee of our internal or external auditor, a director who has an immediate family member who is a current employee of our internal or external auditor and who personally participates in our audit, or a director who was, or whose immediate family member was, within the last three years, a partner or employee of our internal or external auditor and personally worked on our audit within that time, cannot be considered independent;A director who is employed, or whose immediate family member is employed, as an executive officer of another company where any of our or any of our subsidiaries’ present executive officers serve on that company’s compensation committee is not “independent” until three years after the end of such service or employment relationship; andA director who is a current employee, or whose immediate family member is a current executive officer, of a company that has made payments to, or received payments from, us or any of our subsidiaries for property or services in an amount which, in any single fiscal year, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues, is not “independent” until the commencement of the third fiscal year following the fiscal year in which such payments fall below such threshold.In determining the independence of each of the foregoing directors, the Board considered that Gary Hurand owns approximately a 40% beneficial interest in a family entity which owns a preferred limited partnership interest in Gould Investors L.P., an affiliate of our company. Gould Investors is primarily engaged in the ownership and operation of real estate properties held for investment. See “Certain Relationships and Related Transactions.” The preferred limited partnership interest owned by the Hurand family entity had, as of January 1, 2018, a deemed value of approximately $10.3 million (the redemption price of the interest) and limited voting rights, and no member of the Hurand family, including Mr. Hurand, has any management involvement in Gould Investors. For 2017, distributions of approximately $513,760 were accrued and paid on the interests owned by the Hurand family entity. In January 2018, Gould Investors redeemed the portion of the preferred interest with a current redemption price of $2,935,770. In lieu of cash, the Hurand family entity accepted limited partnership units of Vornado Realty L.P. (the “Vornado Units”) owned by Gould Investors, and in consideration thereof, the Vornado Units exchanged by Gould Investors had a deemed value of $3,522,924.60%approximately 64% of our directors, is “independent” for the purposes of Section 303A of the Listed Company Manual of the New York Stock Exchange, and all of(ii) the members of our audit, compensation and nominating committees, are independent for the purposes of such section.independent. The7Compensation Committee InterlocksIn evaluating independence, the board applied the independence standards of Sections 303A.01 and Insider ParticipationNone303A.02 of the membersNew York Stock Exchange Listed Company Manual (the “NYSE Manual”), as well as our categorical independence standard included in our corporate governance guidelines. The board also applied, with respect to the: (i) audit committee, the independence standards imposed by Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 303A.07(a) of the NYSE Manual, and (ii) compensation committee, the independence standards imposed by Rule 10C-1 promulgated under the Exchange Act and Section 303A.02(a)(ii) of the NYSE Manual. See “Additional Information and Notice of Internet Availability of Proxy Materials” for information about accessing our corporate governance guidelines.ever beena significant interest owns a preferred limited partnership interest in Gould Investors L.P. with a stated redemption value of approximately $2.9 million and that several of Mr. Hurand’s family members and their affiliates have invested an officer or employeeaggregate of our company orapproximately $1.3 million in investment funds managed by affiliates of Gould Investors. In concluding that Mr. Hurand is independent, the Board took into account, among other things, the limited voting rights associated with these interests and that no member of the Hurand family, including Mr. Hurand, has any management involvement in Gould Investors. Gould Investors is a significant stockholder of our subsidiaries or has had any relationship with us that would require disclosure under Item 404ours and is primarily engaged in the ownership and operation of Regulation S-K (Certainreal estate properties held for investment. See “Certain Relationships and Related Party Transactions)Transactions.payablepaid in 2023 to the directors for service on the Boardboard and its committees, all of whom, except as indicated in footnote 1 below, are non-management directors (i.e., those directors who are not employees or officers of ours or our company or any of its affiliates).: (1) (1)(2) The committee chairman receives both the annual retainer and the annual retainer for serving as chairman of such committee.(3) (2)Reflects the compensation paid to Israel Rosenzweig, a management director. See “Executive Compensation—Compensation Discussion and Analysis—Chairman of the Board’s Compensation” and “Certain Relationships and Related Transactions.” For 2018, such retainer was increased to $240,000.Commenced September 2023.in 2017, eachon an annual basis, non-management director wasdirectors are awarded 3,625 shares of restricted stock under our 2016 Amended and Restated Incentive Plan.stock. The restricted stock has a five yearfive-year vesting period, subject to acceleration upon the occurrence of specified events, during which period the ownerholder is entitled to vote and receive distributions, if any, on such shares. In each of 2023 and 2024, each non-management director was issued 4,100 shares of restricted stock. Non-management directors who reside outside of the local area in which our executive office is located are reimbursed for travel expenses incurred in attending Board and committee meetings.2017,2023, all of whom, except for Israel Rosenzweig, are non-management directors:
Earned
or Paid
in Cash
($)(1)
Awards
($)(2)
Other
Compensation
($)(3)
($) (1) (1)(2) Represents the aggregate grant date fair value computed in accordance with ASCAccounting Standards Codification Topic 718. Generally, the aggregate grant date fair value is the amount that718 – Stock Compensation, which we expectrefer to expense in our financial statements over the award's vesting schedule.as “ASC Topic 718”. These amounts reflect our accounting expense and do not correspond to the actual value that will be realized by these directorsdirectors.8(3) (3)Represents dividends declared in 2017 on unvested restricted stock awarded pursuant to our incentive plan.(4)Reflects the retainer paid for serving as Chairman.Chairman of the Board. Excludes fees for Services of $53,840 for 2023. See “Executive Compensation—General” and “Certain Relationships and Related Transactions.”(4) September 30, 2017:December 31, 2023:
Awards (#)
of Unvested
Stock
Awards ($) (1) (1)The closing price on the NYSE on December 29, 2023 for a share of our common stock was $18.59.(2) In January 2018, 2019, 2020, 20212024, 2025, 2026, 2027 and 2022, 3,2502028, 3,900 shares, 3,2504,200 shares, 3,2504,000 shares, 3,5004,100 shares, and 3,6254,100 shares are scheduled to vest, respectively.(3) (2)2018, 2019, 2020, 20212024, 2025 and 2022, 4,5752026, June 2026, and January 2027 and 2028, the following shares 5,200 shares, 5,200 shares, 4,140 shares and 3,450 sharesof restricted stock are scheduled to vest,vest: 3,185 shares, 3,055 shares, 2,803 shares, 12,000 shares, 2,734 shares and 2,581 shares, respectively.(3)In September 2021, up to 33,750March 2024, June 2025 and June 2026, 10,412 shares, of common stock10,412 shares and 10,500 shares (excluding the peer group adjustment), respectively, underlying restricted stock unitsRSUs are scheduled to vest, subject to the satisfaction of market and/or performance conditions. RSUs include dividend equivalents rights. See “Executive Compensation – Components of Executive Compensation—Long-Term Equity and Long-Term Equity Incentive Awards”, “Executive Compensation–Outstanding Equity Awards at Fiscal Year-End” and note 9 of our consolidated financial statements included in our Annual Report.
such sessions.
At each Board meeting, the Secretary will present a summary of communications received, if any, since the last meeting and make those communications available to the directors on request.
9
Name of Beneficial Owner | Number of Shares Beneficially Owned(1) | Percent of Class | ||||
Alan H. Ginsburg(2) | 34,405 | * | ||||
Fredric H. Gould(2)(3) | 3,636,265 | 25.9 | ||||
Jeffrey A. Gould(2)(4) | 3,408,230 | 24.3 | ||||
Matthew J. Gould(2)(5) | 3,409,642 | 24.3 | ||||
Mitchell Gould | 146,254 | 1.0 | ||||
Louis C. Grassi(2) | 38,968 | * | ||||
Gary Hurand(2)(6) | 377,170 | 2.7 | ||||
David W. Kalish(7) | 479,933 | 3.4 | ||||
Israel Rosenzweig(2) | 412,692 | 2.9 | ||||
Steven Rosenzweig | 30,441 | * | ||||
Jeffrey Rubin(8) | 41,135 | * | ||||
Jonathan H. Simon(2) | 34,405 | * | ||||
Elie Weiss(2)(9) | 51,746 | * | ||||
George Zweier | 65,890 | * | ||||
Gould Investors L.P(10) | 2,989,898 | 21.3 | ||||
Greenwood Investments, Inc.(11) | 741,102 | 5.3 | ||||
All directors and executive officers as a group (16 persons) | 6,008,805 | 42.9 |
Name of Beneficial Owner | | | Number of Shares Beneficially Owned(1) | | | Percent of Class |
Carol Cicero | | | 8,200 | | | * |
Alan H. Ginsburg | | | 62,430 | | | * |
Fredric H. Gould(2) | | | 437,361 | | | 2.3 |
Jeffrey A. Gould(3) | | | 4,133,025 | | | 22.1 |
Matthew J. Gould(4) | | | 4,119,641 | | | 22.2 |
Mitchell Gould(5) | | | 164,533 | | | * |
Louis C. Grassi | | | 72,102 | | | * |
Gary Hurand(6) | | | 160,638 | | | * |
David W. Kalish(7) | | | 583,434 | | | 3.1 |
Israel Rosenzweig(8) | | | 766,122 | | | 4.1 |
Jeffrey Rubin(9) | | | 69,160 | | | * |
Jonathan H. Simon(10) | | | 62,429 | | | * |
Elie Y. Weiss(11) | | | 88,386 | | | * |
George Zweier(12) | | | 128,911 | | | * |
Gould Investors L.P(13) | | | 3,536,672 | | | 18.9 |
All directors and executive officers as a group (18 persons)(14) | | | 7,534,306 | | | 40.2 |
BlackRock, Inc(15). | | | 1,021,715 | | | 5.5 |
* | Less than 1% |
(1) | Shares are listed as beneficially owned by a person who directly or indirectly holds or shares the power to vote or to dispose of the shares. A person is deemed a beneficial owner if he or she has the right to acquire beneficial ownership of shares within 60 days of March 25, 2024. The percentage of beneficial ownership is based on |
(2) |
Includes |
Includes |
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shares owned by a trust for the benefit of his children and other relatives of which he is a trustee (as to which he disclaims beneficial ownership), and 2,989,898 shares owned by Gould Investors. He is a director and senior vice president of the managing general partner of Gould Investors.
(4) | Includes 114,832 shares owned directly which are pledged as collateral for a personal loan, 20,874 shares owned by a pension trust over which he has shared voting and investment power, 24,139 shares owned by a charitable foundation of which he is a director, as to which shares he has shared voting and investment power, 36,448 shares owned by a trust for the benefit of his children |
(5) | Includes 7,771 shares subject to RSUs that we assume will vest as of March 31, 2024, subject to the satisfaction of market and/or performance conditions. |
(6) | Includes 5,152 shares owned by a limited liability company in which Mr. Hurand is a member, and |
(7) | Includes 312,634 shares owned by the pension and profit sharing trusts of BRT Apartments Corp., REIT Management Corp. and Gould Investors as to which |
(8) | Includes |
(9) | Includes 34,410 shares pledged as collateral for a line of credit. No amounts are outstanding on such credit line. |
(10) |
(11) | Excludes 271 shares owned by his spouse, as to which shares he disclaims beneficial ownership. |
(12) |
(13) | Such person’s address is: 60 Cutter Mill Road, Suite 303, Great Neck, NY 11021. |
(14) |
(15) |
We expect each nominee to be able to serve if elected. However, if
board of directors.
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until the director’s earlier resignation or removal. If the resignation is accepted, the Boardboard will either leave such position vacant, reduce the size of the Boardboard or elect another individual to serve in place of the resigning director. The nominating committee and the Boardboard may consider any factors they deem relevant in deciding whether to accept a director’s resignation.
at this year’s annual meeting of stockholders and (ii) whose terms are not expiring.
Name | | | Class | | | Term to Expire at Annual Meeting in |
Alan Ginsburg | | | I | | | 2027 |
Jeffrey A. Gould | | | I | | | 2027 |
Jonathan H. Simon | | | I | | | 2027 |
Name | | | Class | | | Term to Expire at Annual Meeting in |
Matthew J. Gould | | | II | | | 2025 |
Louis C. Grassi | | | II | | | 2025 |
Israel Rosenzweig | | | II | | | 2025 |
Jeffrey Rubin | | | II | | | 2025 |
Carol Cicero | | | III | | | 2026 |
Fredric H. Gould | | | III | | | 2026 |
Gary Hurand | | | III | | | 2026 |
Elie Y. Weiss | | | III | | | 2026 |
Name and Age | | | Principal Occupation for the past Five Years and other Directorships or Significant Affiliations |
Alan H. Ginsburg 85 Years | | | Director since 2006; since 1987, Chief Executive Officer |
| | ||
Jeffrey A. Gould 58 years | | | Director since 1997, |
| | ||
Jonathan H. Simon 58 years | | | Director since 2006; since 1994, President and Chief Executive Officer |
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF ALAN H. GINSBURG, JEFFREY A. GOULD AND JONATHAN SIMON AS CLASS I DIRECTORS. THE PERSONS NAMED IN THE PROXY CARD INTEND TO VOTE SUCH PROXY FOR THE ELECTION OF SUCH PERSONS AS DIRECTORS.
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The following table sets forth certain information regarding directors whose terms will continue after the date of the annual meeting:
Class II
Name and Age | | | Principal Occupation for the past Five Years and other Directorships or Significant Affiliations |
64 years | | | Director since |
| |||
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Class III Directors Whose Term Will Expire in 2020
Fredric H. Gould 89 Years | | | Director since 1983 and Chairman of our Board from 1984 through 2013; Chairman of the Board of Directors from 1989 to 2013, Vice Chairman of the Board since 2013, Chief Executive Officer from 2005 to 2007, and President from 2005 to 2006 of One Liberty Properties; Chairman of the Board of Georgetown Partners |
| | ||
Matthew J. Gould 64 years | | | Director since 2001 and Senior Vice President since 1993; from 1999 through 2011, Director and Senior Vice President, from 1989 through 1999, President, from 2011 through 2013, Vice Chairman and since 2013, Chairman of the Board of Directors of One Liberty Properties; from 1996 through 2012, President, and since 2013, Chairman of the Board/Manager of Georgetown Partners. Since 2019, Chief Executive Officer of Rainbow MJ Advisors, which manages real estate loans and investments in the cannabis industry, since 2021, a Director of Halsa Holdings LLC, which is engaged in commercial activities in such industry, and since 2022, a Director of MJ Real Estate Investment Trust, a private REIT that acquires interests in, or originates loans secured by, real estate assets operated by state licensed cannabis operators. He brings to the board his more than 35 years of real estate experience as an executive in the real estate industry with expertise in evaluating, managing, financing, acquiring and selling various types of properties. |
| | ||
Louis C. Grassi 68 years | | | Director since 2003; Since 2023, CEO and Managing Director of Grassi Advisory Group, Inc, a firm engaged in providing consulting services to businesses and individuals; From 1980 through 2023, Managing Partner of Grassi & Co. CPAs, P.C., a national firm providing tax and accounting services; Director of Flushing Financial Corp. since 1998 and serves as chairman of its audit committee. Mr. Grassi has been involved for more than 28 years in accounting and auditing issues and has extensive management and leadership in the private and public company environment. His knowledge of financial and accounting matters and his experience as a director and member of the audit committee of a publicly traded financial institution provides him with the accounting and governance background and the skill needed to serve as the chairman and financial expert of our audit committee and as a member of our nominating committee. |
Name and Age | | | Principal Occupation for the past Five Years and other Directorships or Significant Affiliations |
Gary Hurand 77 Years | | | Director since 1990; |
| | ||
Israel Rosenzweig 76 years | | | Chairman of the Board since 2013, Director and Vice Chairman of the Board from 2012 through 2013, and Senior Vice President from 1998 through 2012; Vice President of Georgetown Partners since 1997; Senior Vice President of One Liberty Properties since 1989. His experience as a lending officer at a major financial institution, his knowledge and experience in business, finance and accounting matters and his more than 34 years of experience in the real estate industry provides our board with an experienced and knowledgeable chairman. |
| | ||
Jeffrey Rubin 56 years | | | Director since 2004 and independent lead director since 2023; since 2009, President and CEO of The JR Group, which provides consulting services to the electronic payment processing industry; since 2023, CEO of Excel Payments, a provider of credit card processing services to merchants throughout the United States; since 2008, Chief Executive Officer of Summit Processing Group LLC and since 2023, Partner at Finance ERC LLC, both of which provide financial products to businesses; President and Chief Executive Officer of Premier Payments, a provider of credit card processing services for merchants throughout the United States, from 2012 until its sale in 2015; President and director of Newtek Business Services, Inc., a provider of business services and financial products to small and medium sized businesses, from 1999 to 2008. Mr. Rubin’s experiences as the president and director of a public company and in business and financial matters contribute to his ability to serve as the chairman of our compensation committee and as our independent lead director. |
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Elie Y. Weiss 51 years | | | Director since 2007; engaged in real estate development since 1997; since 2007, Mr. Weiss has served as CEO of Five Forty Real Estate, a family office that manages various investments, and since 2017, he has been a principal at Ponsky Capital Partners, a real estate private equity sponsor at which he is chair of the investment committee; from 1997 to 2007, Executive Vice President of Robert Stark Enterprises, Inc., a company engaged in the development and management of retail, office and multi-family residential |
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Highlights of the Plan
Set forth below are some of the highlights of the BRT Apartments Corp. 2018 Incentive Plan, which we refer to as the Plan.
General
The Board has approved, subject to stockholder approval, the adoption of the BRT Apartments Corp. 2018 Incentive Plan.
The Board believes that granting equity based compensation is an important component of our compensation structure. The purpose of the Plan is to motivate, retain and attract employees, officers and directors of experience and ability and to further the financial success of our company by aligning the interests of participants in the Plan, through the ownership of shares of common stock, with the interests of our stockholders. As of the close of business on the record date, an aggregate of 1,139,375 shares of restricted stock and shares underlying RSUs (i.e.,689,375 shares of restricted stock and 450,000 shares of common stock underlying RSUs) issued pursuant to all of our equity incentive plans were outstanding. Since the restricted stock has a five year cliff-vesting requirement, the outstanding shares of restricted stock vest in approximately equal annual amounts through 2022. The restricted stock units vest in 2021 subject to satisfaction of performance and/or market based conditions. There are 2,500 shares available to be awarded pursuant to our 2016 Amended and Restated Incentive Plan, which we refer to as the “2016 Plan”, and we propose the adoption of the Plan pursuant to which up to 600,000 shares may be awarded. If stockholders adopt the Plan, no further awards will be made under the 2016 Plan. As of the close of business on the record date, there were 14,022,438 shares of common stock outstanding. Other than the one time grant of RSUs in 2016 which represented approximately 3.2% of our outstanding shares at the time of grant, the awards granted each year have generally represented approximately 1% of our outstanding shares at the time of grant.
It is anticipated that awards will be granted under the Plan to: 10 full-time and part-time executive officers; six non-management directors; and approximately 36 full-time and part-time non-executive officers, employees and other participants.
The following summary of major features of the Plan is qualified in its entirety by reference to the actual text of the Plan, set forth as Annex A.
Shares Subject to the Plan
The total number of shares of common stock available for grant under the Plan is 600,000 shares. The Plan authorizes the discretionary grant of (i) incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, which we refer to as the “Code” (ii) non-qualified stock options, (iii) restricted stock, (iv) restricted stock units and (v) performance-based awards. The shares available for
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issuance under the Plan will be authorized but unissued shares of common stock. Shares related to awards that are forfeited, cancelled, terminated or expire unexercised will be available for grant under the Plan. Neither shares tendered by a participant to pay the exercise price of an award, nor any shares withheld by us for taxes, will be available for future grants under the Plan. In the event of a stock dividend or stock split affecting our shares, the number of shares issuable and issued under the Plan and the number of shares covered by and the exercise price and other terms of outstanding awards will be adjusted to reflect such event to prevent dilution or diminution of awards.
Administration of the Plan
The Plan will be administered by our compensation 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 16(b) under the Exchange Act, and an “outside director” under Section 162(m) of the Internal Revenue Code of 1986, as amended. The compensation committee has authority to administer and construe the Plan in accordance with its provisions. The compensation committee’s authority also includes the power to (a) determine persons eligible for awards, (b) prescribe the terms and conditions of awards granted under the Plan, (c) adopt rules for the administration, interpretation and application of the Plan which are consistent with the Plan and (d) establish, interpret, amend or revoke any such rules. A non-management director may not be granted awards with respect to more than 20,000 shares in any calendar year.
Options
Stock options entitle the holder to purchase a specified number of shares at a specified exercise price subject to the terms and conditions of the option grant. The purchase price per share for each incentive stock option is determined by the compensation committee, but must be at least 100% of the fair market value per share on the date of grant. The aggregate fair market value of shares with respect to which incentive stock options are exercisable for the first time by an individual during any calendar year cannot exceed $100,000. To the extent that the fair market value of shares with respect to which incentive stock options become exercisable for the first time during any calendar year exceeds $100,000, the portion in excess of $100,000 will be treated as a non-qualified option. Options granted under the Plan may be exercisable for a term up to ten years. If a participant owns more than 10% of the total voting power of all classes of our shares at the time the participant is granted an incentive stock option, the option price per share cannot be less than 110% of the fair market value per share on the date of grant and the term of the option cannot exceed five years.
Non-qualified options may not be granted at an exercise price per share that is less than 100% of the fair market value per share on the date of the grant.
Subject to the additional limitations imposed on awards intended to qualify as performance based awards as described below, the maximum aggregate number of shares underlying options that may be granted in one calendar year to an individual participant is 100,000.
Restricted Stock and Restricted Stock Units
Restricted stock are shares that may not be sold, transferred, gifted, bequeathed, pledged, assigned or otherwise disposed of until the end of a specified restriction period. Restricted stock units or RSUs represent the right, upon satisfaction of specified conditions, to receive shares and are subject to the same restrictions on transferability applicable to restricted stock. RSU’s and shares of restricted stock will be issued at the beginning of the restriction period and the compensation committee shall set restrictions and other conditions applicable to the vesting of such award, including restrictions based on the achievement of specific performance goals, time based restrictions or any other basis determined by the compensation committee.
Recipients of restricted stock have the right to vote such shares and to receive and retain cash dividends and other distributions, if any, paid thereon, even if such restricted stock are forfeited in the future. Recipients of RSUs are not entitled to vote or receive dividends with respect to the underlying shares until such shares have been issued. Recipients of such awards will not be entitled to delivery of the stock certificate representing the shares until all the restrictions have been fulfilled.
Generally, any restricted stock or RSUs that does not vest on the vesting date, or on a date prior to the vesting date if it is determined that it cannot vest (for example due to the termination of employment prior to achievement of a time based restriction), will be forfeited to us and the recipient will not thereafter have any rights (including rights to dividends and distributions) with respect to these securities.
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Subject to the additional limitations on awards intended to qualify as performance based awards as described below, no more than 100,000 shares of each of restricted stock and shares underlying RSUs will be awarded to any participant in any calendar year. We will not repurchase outstanding restricted stock or RSUs in exchange for cash. Shares of restricted stock and RSUs held by a participant do not vest in the event of such participant’s death, disability or retirement (as defined in the Plan) of such participant unless otherwise (i) provided in the award agreement or (ii) authorized by the compensation committee. The compensation committee may grant restricted stock or RSUs and set restrictions based upon performance goals so that such grant would qualify as “performance based compensation” under Section 162(m) of the Code. See “Executive Compensation – Compensation Discussion and Analysis – Deductibility of Executive Compensation” for information regarding Section 162(m) of the Code.
Dividend Equivalent Rights
The Plan allows the Committee to grant dividend equivalents rights in tandem with the grant of RSUs and performance based awards (other than restricted stock and options). These rights entitle the holder to receive an amount of cash equal to the cash distributions that would have been paid on shares underlying the award to which such right relates, as if such shares were outstanding during the period beginning with the grant date (or if otherwise determined by the compensation committee, the beginning of the performance cycle) of the award to which such dividend equivalent right relates through the vesting date of such award. Dividend equivalents rights will only vest to the extent the related award vests.
Performance Based Awards
In view of our relatively small market capitalization in comparison to our peers, and our small number of executive officers, it has been our judgment that fair and equitable compensation of our executive officerscompensation and the alignment of the interestscorporate governance programs are evidence of our executive officers with the interests of our stockholders could be accomplished by our compensation committee, with input from our chairman and senior management, analyzing our performance and the performance of each executive officer, and by awarding restricted stockcommitment to our executive officers in reasonable amounts. In view of the pay for performance emphasis of many of our peers and institutional investors, the Plan authorizes the compensation committee to grant performance based awards. Performance based awards will be made by the issuance of restricted stock units or other awards, or a combination thereof, contingent upon the attainment of one or more performance goals (described below) that our compensation committee establishes. The minimum period with respect to which performance goals are measured is one year, but the compensation committee generally intends to establish a multi-year performance cycle. The maximum number of shares with respect to which a participant may be granted performance based awards in any calendar year is 100,000 shares.
The terms and conditions of a performance based award will provide for the vesting of the award to be contingent upon the achievement of one or more specified performance goals that the compensation committee establishes. For this purpose, “performance goals” means for a performance cycle, the specific goals that the compensation committee establishes that may be based on one or more of the following performance criteria:
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The performance goals need not be the same with respect to all participants and may be established for the Company in the aggregate or on a per share basis (whether diluted or undiluted), may be based on an absolute or relative basis, may be based on our performance compared to the performance of businesses or indices specified by the compensation 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 adjusted for non-controlling interests, and any one or more of the foregoing.
Amendment and Termination of the Plan
No awards may be made under the Plan on or after the tenth anniversary of the Plan’s effective date. Our Board may amend, suspend or terminate the Plan at any time for any reason provided that no amendment, suspension or termination may impair rights or obligations under any outstanding award without the participant’s consent or violate the Plan’s prohibition on repricing (i.e., the replacing or regranting of an option in connection with the cancellation of the option or by amending an award agreement to lower the exercise price of an option or the cancellation of any award in exchange for cash). Stockholders must approve any amendment: (i) if such approval is required under applicable law or stock exchange requirements; or (ii) that changes the no-repricing provisions of the Plan.
Clawbacks; Compliance with Laws; Compliance with REIT Requirements
If a recipient’s relationship with us is terminated for cause (e.g., insubordination, dishonesty, incompetence, moral turpitude, the refusal to perform such person’s duties and responsibilities and other misconduct, as determined by the compensation committee), then (i) all options (except to the extent exercised) immediately terminate and (ii) the recipient’s rights to all restricted stock, RSUs and performance share awards(except to the extent such awards have vested) are forfeited immediately.
The grant of awards and the issuance of shares under the Plan is subject to all applicable laws, rules and regulations, approvals by governmental and quasi-governmental authorities and the applicable provisions of any claw-back policy implemented by us, whether implemented prior to or after the grant of such award.
Awards are not exercisable if such award or its exercise could cause the recipient to be in violation of any restrictions on ownership and transfer of our securities, or if, in the discretion of the compensation committee, such award could otherwise impair our status as a real estate investment trust under the Code.
Change in Control
Awards granted under the Plan that at the time of a change in control (as defined) are not then exercisable or subject to restrictions become immediately exercisable (and all transferability and other restrictions are
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removed effective as of such change in control), except as otherwise provided in the award agreement. Our RSUs awards have historically limited the vesting of such awards upon a change of control. See “Executive Compensation - Compensation Discussion and Analysis – Employment and Severance Agreements; Post-Employment Benefits; Change of Control.” The Plan defines a change in control as follows:
(a) the acquisition in one or more transactions by any person (as defined in Section 13(d) of the Exchange Act) of the beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of 25% or more of the outstanding shares or the combined voting power of the then outstanding securities entitled to vote in the election of directors (provided that this provision 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, at the date of the award, constitute our Board cease for any reason to constitute at least a majority of the Board, provided an individual becoming a director subsequent to the date of an award whose election or nomination for election was approved by a vote of at least a majority of the directors then comprising the Board shall be considered as though such individuals were a member of the Board, but excluding any individual whose initial assumption of office occurs as a result either of an actual or threatened election contest or other actual or threatened solicitation of proxies or consent by and behalf of a person other than the Board;
(c) the closing of a sale or other conveyance of all or substantially all of our assets;
(d) the effective time of any merger or other business combination involving us if immediately after such transactions persons who hold a majority of outstanding voting securities entitled to vote are not persons who immediately prior to such transaction held our voting stock.
Federal Income Tax Consequences
The federal tax rules applicable to awards under the Plan under the Code are summarized below. This summary omits the tax laws of any municipality, state, or foreign country in which a participant resides.
Stock option grants under the Plan may be intended to qualify as incentive stock options under Section 422 of the Code or may be non-qualified stock options governed by Section 83 of the Code. Generally, federal income tax is not due from a participant upon the grant of a stock option, and a deduction is not taken by us. Under current tax laws, if a participant exercises a non-qualified stock option, he or she will have taxable income equal to the difference between the market price of the common shares on the exercise date and the stock option grant price. We are entitled to a corresponding deduction on our income tax return. A participant will not have any taxable income upon exercising an incentive stock option after the applicable holding periods have been satisfied (except that the alternative minimum tax may apply), and we will not receive a deduction when an incentive stock option is exercised. The treatment of a disposition of shares acquired through the exercise of a stock option depends on how long the shares were held and whether the shares were acquired by exercising an incentive stock option or a non-qualified stock option. We may be entitled to a deduction in the case of a disposition of shares acquired under an incentive stock option before the applicable holding periods have been satisfied.
Generally, taxes are not due when a restricted stock (unless the participant makes an election under Section 83(b) of the Code) or RSU award is initially made, but the award becomes taxable when it is no longer subject to a “substantial risk of forfeiture” (i.e., it becomes vested or transferable), in the case of restricted stock, or when shares are issuable in connection with vesting, in the case of an RSU. Income tax is paid on the value of the stock or units at ordinary rates when the restrictions lapse, and then at capital gain rates when the shares are sold.
Section 409A of the Code affects taxation of awards to employees but does not affect our ability to deduct deferred compensation. Section 409A applies to RSUs, performance units, and performance shares. Such grants are taxed at vesting but will be subject to new limits on plan terms governing when vesting may occur. If grants under such plans do not allow employees to elect further deferral on vesting or on distribution, under the regulations, a negative impact should not attach to the grants.
Section 409A of the Code does not apply to incentive stock options, non-qualified stock options (that are not discounted), and restricted stock, provided that there is no deferral of income beyond the vesting date.
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See “Executive Compensation – Compensation Discussion and Analysis – Deductibility of Executive Compensation” for information regarding Section 162(m) of the Code.
New Plan Benefits Table
We have not determined the type, amount or recipients of awards under the Plan. Accordingly, we provide the following table which reflects the awards granted in 2017 pursuant to the 2016 Plan to the persons and groups indicated as if such grants were made pursuant to the Plan. All of such awards were in the form of restricted stock that vest on a “cliff-vesting” basis five years after grant.
Name and Position | Number of Shares(1) | Dollar Value ($)(2) | ||||
Jeffrey A. Gould | 13,110 | 152,469 | ||||
President and Chief Executive Officer | ||||||
George Zweier | 7,500 | 87,225 | ||||
Vice President and Chief Financial Officer | ||||||
Mitchell Gould | 11,375 | 132,291 | ||||
Executive Vice President | ||||||
David W. Kalish | 7,000 | 81,410 | ||||
Senior Vice President | ||||||
Steven Rosenzweig | 3,162 | 36,774 | ||||
Vice President | ||||||
Executive group (10 persons) | 88,829 | 1,033,081 | ||||
Non-executive director group (6 persons) | 21,750 | 252,953 | ||||
Non-executive officer and employee group (36 persons) | 36,921 | 429,391 |
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE IN FAVOR OF THE PROPOSAL TO ADOPT THE BRT APARTMENTS CORP. 2018 INCENTIVE PLAN. PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR OF THE PROPOSAL UNLESS STOCKHOLDERS SPECIFY OTHERWISE.
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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM(Proposal 3)
The audit committee and the Board are seeking ratification of the appointment of BDO USA, LLP (“BDO”) as our independent registered public accounting firm for the year ending September 30, 2018. Representatives of BDO, our auditors for 2017, are expected to be present at the annual meeting and will have the opportunity to make a statement if such representatives desire to do so and will be available to respond to appropriate questions.
We are not required to have our stockholders ratify the selection of BDO as our independent registered public accounting firm. We are doing so because we believe it is good corporate governance practice. If our stockholders do not ratify the selection, the audit committee will reconsider whether or not to retain BDO, but may, after reconsidering, still 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 best interests.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF THE APPOINTMENT OF BDO AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING SEPTEMBER 30, 2018.
The following table presents, except as otherwise indicated, BDO’s fees (including expenses) for the services indicated for 2017 and 2016:
2017 | 2016 | |||||
Audit fees(1) | $ | 524,085 | $ | 519,283 | ||
Audit-related fees | — | — | ||||
Tax fees | 6,883 | — | ||||
All other fees | — | — | ||||
Total fees | $ | 530,968 | $ | 519,283 |
Approval Policy for Audit and Non-Audit Services
The audit committee annually reviews and approves the retention of our 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 in excess of those approved by the audit committee must receive the prior 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 audit committee.
For 2017, the audit committee pre-approved all of the audit, tax and non-audit services rendered by our independent registered public accounting firm.
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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 that we specifically incorporate this information by reference) and shall not otherwise be deemed “soliciting material” or “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act (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 independent registered public accounting firm and to oversee and monitor our financial reporting process, the independence and performance of the independent registered public accounting firm and the functioning of our internal controls. It is management’s responsibility to prepare financial statements in accordance with generally accepted accounting principles and for the independent registered public accounting firm to perform an independent audit of the financial statements and to express an opinion on the conformity of those financial statements with generally accepted accounting principles.
In performing its duties, the audit committee:
The audit committee meets with the independent registered public accounting firm and the accounting firm performing the internal control audit function, with and without management present, to discuss the results of their examinations, their evaluations of the internal controls, and the overall quality of our financial reporting.
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Based on the reviews and discussions referred to above, the audit committee recommended that the Company’s audited consolidated financial statements for the year ended September 30, 2017 be included in its Annual Report on Form 10-K for the year ended September 30, 2017 for filing with the SEC.
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Compensation Discussion and Analysis
The following are highlights of our compensation practices; practices—we encourage you to read the more detailed information set forth herein:
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| ✔ | | | Use rigorous performance goals. Only 24.4% of the RSUs awarded to our executive officers in | |
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| ✔ | | | Emphasize equity awards as a significant portion of the performance/incentive component of compensation. The grant date fair value of long-term equity awards (i.e., the restricted stock awarded in 2024 for 2023 performance) and equity incentive awards (i.e., the RSUs awarded in 2023; the long-term equity awards and equity incentive awards are referred to collectively as the “Equity Awards”) accounted for 32%, 45% and 38% of the performance/incentive-based comportment of compensation awarded to Jeffrey A. Gould, our CEO, Mitchell Gould, our Executive Vice President and George Zweier, our Chief Financial Officer, respectively, for 2023. | |
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| ✔ | | | Equity awards as a significant component of annual base compensation. In 2023, the grant date fair value of Equity Awards, as a percentage of base annual compensation (i.e., salary, cash bonus and the grant date fair value of the Equity Awards), was 32%, 44% and 39% for Jeffrey A. Gould, Mitchell Gould and George Zweier, respectively. | |
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| ✔ | | | Mitigate undue risk in compensation programs. The executive compensation program includes features that reduce the possibility of our executive officers, either individually or as a group, making excessively risky business decisions that could maximize short-term results at the expense of longer-term value. | |
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| ✔ | | | Balance of short-term and long-term incentives. Our incentive programs provide an appropriate balance between shorter and longer-term incentives. | |
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| ✔ | | | Capped equity award payouts. The number of shares that can be earned under our long-term equity incentive program are capped. | |
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| ✔ | | | Independent compensation committee. Our compensation committee is comprised entirely of independent directors and it oversees risks with respect to our compensation practices. | |
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| ✔ | | | Clawback policy. We are entitled to | |
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| ✔ | | | Stock ownership guidelines. All of our named executive officers and non-management directors own a meaningful amount of our stock as required by these guidelines – | |
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| ✔ | | | Diversity; Responsiveness to Stockholders’ Corporate Governance Comments. We are responsive to comments and concerns raised by our stockholders. In response to comments raised by stockholders regarding (i) the appointment of | |
| WHAT WE DON’T DO | | |||
| ✘ | | | No employment agreements. None of our officers have employment agreements. Employment of all of our full-time executive officers is “at will.” | |
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| ✘ | | | No severance arrangements. There are no severance or similar arrangements for our executive officers, other than accelerated vesting of shares of restricted stock and RSUs upon the occurrence of specified events (e.g., death, disability, retirement or change of control). | |
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| ✘ | | | No golden parachute tax gross-ups. There are no excise tax gross ups or similar arrangements for our executive officers. | |
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| ✘ | | | No dividends on unearned equity incentive awards. No dividends are paid on the RSUs until the underlying shares are earned. | |
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| ✘ | | | No hedging. We prohibit our directors, officers, employees and others from engaging in short sales involving our shares or hedging transactions — see “— Policy Prohibiting Hedging of our Securities.” | |
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| ✘ | | | No multi-year or guaranteed bonuses or equity grants. We do not pay guaranteed bonuses to anyone and currently have no guaranteed commitments to grant any equity-based awards. This ensures that we are able to base all compensation awards to measurable performance factors and business results. | |
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| ✘ | | | No costly defined benefit pension or supplemental retirement plans. We do not provide costly retirement benefits to our executive officers that reward longevity rather than contributions to our performance. | |
This compensation discussion and analysis describesWe describe below our compensation objectives and policies as applied to our chief executive officer, chief financial officer and our three other most highly compensated officers named in the Summary Compensation Table (collectively, the “named executive officers”) in 2017.. This discussion and analysis focuses on the information contained in the compensation tables that followappear in this discussionproxy statement but also describes our historic compensation structure and analysis. We also describe compensation actions taken historicallypractices to the extent it enhancesenhance an understanding of our executive compensation disclosure. Generally,program.
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For the past several years, we have usedWe use the following compensation structure with respect to the compensation paid by us to our executive officers:
Since we have only eight full-time employees, we
For our full-time executive officers, the recommendations of the Chief Executive Officer play a significant role in the compensation setting process, since he is aware of each executive officer’s duties and responsibilities
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With respect to our Chief Executive Officer, the (i) chairman of the committee and the Chief Executive Officer may meet to discuss the Chief Executive Officer’s compensation, and/or (ii) Chief Executive Officer or other senior executives may make recommendations to the compensation committee as to the appropriate level of compensation to be paid the Chief Executive Officer. The compensation committee then meets, without management, to discuss the Chief Executive Officer’s base salary for the following year, a cash bonus applicable to the recently completed year (which is paid in the following year), and the perquisites to be made available for the following year. The committee takes into account the Performance Criteria changes over time, and in its discretion, may take into account any compensationvaries based on, among other things, subjective factors and the Chief Executive Officer received from REIT Management and/or other parties to the shared services agreement. The compensation committee then reports its recommendations to the Board, which can approve, modify or reject the recommendation of the committee. The number of shares of restricted stock to be awarded to the Chief Executive Officer is considered and determined by the committee annually, at the same time the committee considers and approves all restricted stock awards to be made for that year.
officer’s specific responsibilities.
Fredric H. Gould, the former chairman of our Board, is a principal executive and/or sole owner of each entity which participates with us in the shared services agreement. In such capacity, he, in consultation with our Chief Executive Officer and other senior executives, determines the
board. See “Certain Relationships and Related Transactions.”
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In determining 20172023 compensation, the compensation committee did not have a specific allocation goal between cash and equity-based compensation.
base salaries are allocated as described above under “— Part-Time Executive Officers.”responsibilities;responsibilities, and (vii) subjective factors.In setting thesalary for these officers, our management directors and senior executive officers, in consultation with one another, consider and review the executive’s responsibilities to all parties to the shared services agreement, the executive’s performance, years of service, current annual base salary and the performance of the companies which participate in the shared services agreement. The annual base salary issalaries are allocated to the entities which are parties to the shared services agreement, including us, based on the estimated time devoted by our executivesthem to each entity that is a party to such agreement. and other full and part-time employees to earn an annual cash bonus. We provide this opportunity both to reward our officers and employeesthese individuals for past performance and to motivate and retain talented people. We recognize that annual bonuses are almost universally provided by other companies with which we might compete for talent. Annual cash bonuses for our executive officers (including the three named executive officers who devote substantially all of their business time to our affairs) are determined on a case-by-casean individual basis andtaking into account the Performance Criteria. These determinations are determined subjectively. In determining annual cashhighly subjective.consideration is given to both an executive’s performance and to our overall performanceare allocated in the applicable year. Once our compensation committee has approved the annual bonus to be paid to each executive officer, the compensation committee presents its recommendations to the Board forsame manner as their approval. Based on our present structure and our small number of full-time executive officers, our compensation committee has not established formulas or performance goals to determine cash bonuses for our executive officers.Steven Rosenzweig)Matthew J. Gould), provide Services. See “Executive Compensation – Compensation27Discussion and Analysis – General” for a description of the Services. The other executive officers and management directorsindividuals performing Services are: Fredric H. Gould, Isaac Kalish, Israel Rosenzweig, Matthew Gould,Steven Rosenzweig and Mark H. Lundy. See “Certain Relationships and Related Transactions.”awards.awards (i.e., RSUs). These compensation programs are designed to recognize responsibilities, reward performance, retain our executive officers, motivate future performance and align the interests of our executive officers with our stockholders’ interests. The compensation committee reviews annually management’s recommendations for long-term equity awards and long-term equity incentive awards for all our officers, directors and employees and makes determinations with respect to the grant of such awards. In making these determinations, the compensation committee considers the factors it considers relevant, including our performance and an individual’s performance. Existing ownership levels are not a factor in award determinations.
Long–Term Equity Incentive Awards Performance Criteria | | | Weight | | | Minimum Performance Criteria | | | Target Performance Criteria | | | Maximum Performance Criteria |
Adjusted Funds from Operations (AFFO) | | | 50% | | | Compounded annual growth rate of 4% | | | Compounded annual growth rate of 6% | | | Compounded annual growth rate of 8% |
Total Stockholder Return (TSR) | | | 50%(1) | | | Compounded annual growth rate of 5% | | | Compounded annual growth rate of 8% | | | Compounded annual growth rate of 11% or greater |
(1) | Does not give effect to the increase or decrease in the number of shares subject to the award as a result of the peer group adjustment. |
All the outstanding
each year. We do not have a formal policy on timing equity compensationthese grants in connection with the release of material non-public information. Generally, equity awards are grantedinformation and in Januaryview of, each year, though for 2018 we anticipate grantingamong other things, the three-year and five-year cliff vesting requirements with respect to RSUs and restricted stock in March 2018. Our compensation committee has reviewed our compensation policies and practices to ascertain if the risks arising fromawards, respectively, we do not believe such policies or practices are reasonably likely to have a materially adverse effect on our company. The compensation committee concluded that while our compensation program takes into account the company’s performance the program does not encourage excessive or unnecessary risk-taking and our policies and practices achieve a balance between annual performance and long-term growth.
See “—Outstanding Equity Awards at Fiscal Year End” and note 12 of our consolidated financial statements included in Annual Report on Form 10-K for the year ended September 30, 2017 for additional information about our RSUs.
Clawbacks
We are entitled to clawback or obtain reimbursement of an executive’s compensation under the following circumstances:
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incentive based compensation or equity based compensation they receive from us during the 12 months following the initial public issuance of the financial document embodying such financial reporting requirement and (ii) profits from the sale of our common stock during such 12 months;
Executive Benefits and Perquisites
the “adjusted performance conditions”, a pro rata portion (based on the percentage of days in the performance cycle that have elapsed) of these RSUs will vest, and
Accelerated Vesting of RSUs
Upon the occurrence of a DDR Event, subject to the satisfaction of the applicable performance criteria proportionately adjusted to give effect to a reduction in the five year performance cycle, which we refer to as the “adjusted performance conditions”, a pro rata portion (based on the percentage of days in the performance cycle that have elapsed) of the RSUs will vest.
Upon a change of control (as described above) occurring (i) after September 30, 2019, the RSUs will vest to the extent the applicable as adjusted market and/or performance conditions have been met and (ii) prior to or on September 30, 2019, a pro rata portion (based on the percentage of days in the performance cycle that have elapsed) of the RSUs will vest to the extent the applicable as adjusted market and/or performance conditions are met.
See “—Outstanding Equity Awards at Fiscal Year End” and note 12 of our consolidated financial statements included in Annual Report on Form 10-K for the year ended September 30, 2017 for additional information about our RSUs.
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TABLE OF CONTENTSDeductibility
Title | | | Minimum Ownership Requirement |
Chief Executive Officer | | | 4 times current base salary |
Full-Time NEO | | | 2 times current base salary |
Part-Time NEO | | | 2 times allocated base salary |
Non-Management Directors | | | 3 times annual base retainer |
proxy statement for the preceding year.
Equity Awards
2017 Base Salary ($) | 2016 Base Salary ($) | 2017 Bonus ($)(1) | 2016 Bonus ($)(2) | Percentage Increase(3) | |||||||||||
Jeffrey A. Gould, | 784,375 | 704,129 | 110,000 | 110,000 | 9.9 | ||||||||||
President and CEO | |||||||||||||||
Mitchell Gould, | 382,638 | 370,621 | 55,000 | 55,000 | 2.8 | ||||||||||
Executive Vice President | |||||||||||||||
George Zweier, | 278,774 | 267,366 | 35,000 | 35,000 | 3.8 | ||||||||||
Vice President and CFO |
| | Base Salary | | | Cash Bonus | | | Equity Grants | |||||||||||||||||||
| | 2023 ($) | | | 2022 ($) | | | % Change | | | 2023 ($)(2) | | | 2022 ($)(2) | | | % Change | | | 2023 ($)(3) | | | 2022 ($)(4) | | | Change | |
Jeffrey A. Gould(1) | | | 931,109 | | | 886,471 | | | 5.0 | | | 300,000 | | | 300,000 | | | — | | | 576,106 | | | 641,607 | | | (10.2) |
Mitchell Gould(1) | | | 467,224 | | | 467,851 | | | — | | | 55,100 | | | 55,100 | | | — | | | 322,667 | | | 347,025 | | | (7.2) |
George Zweier(1) | | | 361,294 | | | 344,236 | | | 5.5 | | | 37,900 | | | 37,900 | | | — | | | 315,247 | | | 337,435 | | | (6.6) |
(1) |
(2) | Reflects the cash bonuses paid in recognition of performance for such year, which are paid in the following year. |
(3) | Represents the |
Represents the |
In setting Jeffrey A. Gould’s base salary for 2017, our compensation committee took into account our operating results, which improved significantly in 2016 compared to prior years, his continuing leadership in growing our company, and the fact that his base salary for 2017 represented an 11.4% increase from his 2016 base salary. In determining his 2017 bonus,2023 base salaries, the compensation committee took into account our saledetermined in late 2022, which determination was subsequently ratified by the board, that increases in base salaries for Messrs. J. Gould and Zweier were appropriate in recognition of seven multi-family properties and other assets for a gain to us, net of minority interests, of $27.8 million, our acquisition of ten multi-family properties (including interests in three unconsolidated joint ventures owning such properties), his extensive efforts in obtaining the repayment of $13.6 million in principal amount outstanding on the loan to the Newark Joint Venture, his success in enhancing our public profile, the initiation of a quarterly dividend and our total stockholder return of approximately 36.4% in 2017.
The 3.2% increase in Mitchell Gould’s 2017 base salary is due primarily to his individualtheir performance in 20162022 and as a general cost of living adjustment. Mitchell Gould’s 2017 bonus was based on his efforts with respectincrease.
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The 4.3% increase in Mr. Zweier’s 2017 base salary is due primarily to his individual performance in 2016 and as a cost of living adjustment. His 2017 bonus was based on his performance with respect to our acquisition and disposition activities and his activities in overseeing the results of our property portfolio; in particular, as they relate to financial and accounting matters.
For 2017, Jeffrey A. Gould’s base salary and bonus was equal to (i) 2.0x Mitchell Gould’s base salary and bonus and (ii) 2.9x George Zweier’s base salary and bonus. We have not adopted a policy with regard to the relationship of compensation among named executive officers or other employees. The compensation committee was aware of the differential in compensation among these executive officers and concluded that the differential was appropriate because, among other things, both Mitchell Gould and George Zweier have responsibilities primarily related to a specific activity, whereas(including Mr. Jeffrey A. Gould’s responsibilities cover all our business activities including, among other things, property acquisitions, dispositions and financings, capital raising, investor relations, and developing and maintaining relationships with joint venture partners.
Gould) for their 2023 performance, the Compensation Committee determined that increases in bonuses (from the bonuses that were provided for performance in 2022) were not needed to further incentivize or reward performance.
Steven Rosenzweig, aAct.
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.
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 ownare a
future.
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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 ($)(1) | ||||
Jeffrey A. Gould | 743,057 | 198,320 | ||||
George Zweier | 353,760 | 107,200 | ||||
Mitchell Gould | 603,000 | 117,920 | ||||
David W. Kalish | 451,580 | 179,560 | ||||
Steven Rosenzweig | 146,457 | 134,000 |
Name and Principal Position | Year | Salary ($)(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 |
Name and Principal Position | | | Year | | | Salary ($)(1)(2) | | | Bonus ($)(1)(3) | | | Stock Awards ($)(4) | | | All Other Compensation ($)(5)(6) | | | Total ($) |
Jeffrey A. Gould President and CEO | | | 2023 | | | 931,109 | | | 300,000 | | | 587,616 | | | 64,166(7) | | | 1,882,891 |
| 2022 | | | 886,471 | | | 300,000 | | | 672,629 | | | 65,134 | | | 1,924,234 | ||
| 2021 | | | 864,004 | | | 200,000 | | | 778,898 | | | 148,386 | | | 1,991,288 | ||
George Zweier Vice President and CFO | | | 2023 | | | 361,294 | | | 37,900 | | | 318,684 | | | 55,055(8) | | | 772,933 |
| 2022 | | | 344,236 | | | 37,900 | | | 354,823 | | | 51,305 | | | 788,264 | ||
| 2021 | | | 321,004 | | | 35,200 | | | 424,714 | | | 87,521 | | | 868,439 | ||
Mitchell Gould Executive Vice President | | | 2023 | | | 467,224 | | | 55,100 | | | 328,274 | | | 120,947(9) | | | 971,545 |
| 2022 | | | 467,851 | | | 55,100 | | | 365,448 | | | 115,275 | | | 1,003,674 | ||
| 2021 | | | 436,296 | | | 51,255 | | | 446,647 | | | 212,053 | | | 1,146,251 | ||
David W. Kalish Senior Vice President, Finance | | | 2023 | | | 272,629 | | | — | | | 388,982 | | | 261,473(10) | | | 923,084 |
| 2022 | | | 249,026 | | | — | | | 441,976 | | | 262,227 | | | 953,229 | ||
| 2021 | | | 256,827 | | | — | | | 600,212 | | | 323,215 | | | 1,180,254 | ||
Matthew J. Gould Senior Vice President | | | 2023 | | | — | | | — | | | 587,616 | | | 278,020(11) | | | 865,636 |
| 2022 | | | — | | | — | | | 672,629 | | | 255,256 | | | 927,885 | ||
| 2021 | | | — | | | — | | | 778,898 | | | 314,788 | | | 1,093,686 |
(1) | The salary and bonus for each of Jeffrey A. Gould, George Zweier and Mitchell Gould is paid directly by us. |
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(2) | The annual base salaries in |
(3) | The table sets forth the year in which the bonus was earned, not the year it was paid. The bonus for |
(4) | Represents restricted stock |
(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 |
(6) |
(7) | Includes |
Includes |
Includes |
Includes |
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(11) | Includes $278,020 for the Services. In 2024, he is to be paid $291,919 for the Services. |
Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | Grant Date Fair Value of Stock Awards ($) | ||||||
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 |
| | Estimated Future Payouts under Equity Incentive Plan Awards:(1)(#) | | | | | |||||||||||||||
Name | | | Grant Date | | | Grant Type | | | Threshold(1) | | | Target(2) | | | Maximum(3) | | | All Other Stock Awards: Number of Shares of Stocks or Units (#) | | | Grant Date Fair Value of Stock Awards ($)(4) |
Jeffrey A. Gould | | | 1/5/23 | | | RS | | | — | | | — | | | — | | | 14,206 | | | 272,471 |
| 6/27/23 | | | RSU-TSR | | | 2,625 | | | 5,250 | | | 10,500 | | | — | | | 108,610 | ||
| 6/27/23 | | | RSU-AFFO | | | 2,625 | | | 5,250 | | | 10,500 | | | — | | | 206,535 |
| | Estimated Future Payouts under Equity Incentive Plan Awards:(1)(#) | | | | | |||||||||||||||
Name | | | Grant Date | | | Grant Type | | | Threshold(1) | | | Target(2) | | | Maximum(3) | | | All Other Stock Awards: Number of Shares of Stocks or Units (#) | | | Grant Date Fair Value of Stock Awards ($)(4) |
George Zweier | | | 1/5/23 | | | RS | | | — | | | — | | | — | | | 8,400 | | | 161,112 |
| 6/27/23 | | | RSU-TSR | | | 1,313 | | | 2,625 | | | 5,250 | | | — | | | 54,305 | ||
| 6/27/23 | | | RSU-AFFO | | | 1,313 | | | 2,625 | | | 5,250 | | | — | | | 103,268 | ||
Mitchell Gould | | | 1/5/23 | | | RS | | | — | | | — | | | — | | | 8,900 | | | 170,702 |
| 6/27/23 | | | RSU-TSR | | | 1,313 | | | 2,625 | | | 5,250 | | | — | | | 54,305 | ||
| 6/27/23 | | | RSU-AFFO | | | 1,313 | | | 2,625 | | | 5,250 | | | — | | | 113,268 | ||
David W. Kalish | | | 1/5/23 | | | RS | | | — | | | — | | | — | | | 8,153 | | | 156,375 |
| 6/27/23 | | | RSU-TSR | | | 1,938 | | | 3,875 | | | 7,750 | | | — | | | 80,164 | ||
| 6/27/23 | | | RSU-AFFO | | | 1,938 | | | 3,875 | | | 7,750 | | | — | | | 152,443 | ||
Matthew J. Gould | | | 1/5/23 | | | RS | | | — | | | — | | | — | | | 14,206 | | | 272,471 |
| 6/27/23 | | | RSU-TSR | | | 2,625 | | | 5,250 | | | 10,500 | | | — | | | 108,610 | ||
| 6/27/23 | | | RSU-AFFO | | | 2,625 | | | 5,250 | | | 10,500 | | | — | | | 206,535 |
(1) |
(2) |
(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 |
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 |
| | 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 ($) | | | Equity Incentive Plan Awards: Number of Shares Subject to RSUs That Have Not Vested (#)(1) | | | Equity Incentive Plan Awards: Market or Payout Value of Share, That Have Not Vested ($)(1) |
Jeffrey A. Gould(2) | | | 86,302 | | | 1,604,354 | | | 69,824 | | | 1,298,033 |
George Zweier(3) | | | 47,850 | | | 889,532 | | | 34,956 | | | 649,832 |
Mitchell Gould(4) | | | 56,150 | | | 1,043,829 | | | 34,956 | | | 649,832 |
David W. Kalish(5) | | | 51,809 | | | 963,129 | | | 53,215 | | | 989,262 |
Matthew J. Gould(6) | | | 86,302 | | | 1,604,354 | | | 69,824 | | | 1,298,033 |
(1) |
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 |
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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.
(2) | In January 2024, 2025, 2026, June 2026, and January 2027 and 2028, restricted stock awards with respect to 14,374, 14,320, 14,320, 14,800, 14,282 and 14,206 shares, respectively, are scheduled to vest. In March 2024, June 2025 and June 2026, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 21,974 shares, 24,226 shares and 23,625 shares, respectively, subject to RSUs are scheduled to vest. |
(3) | In January 2024, 2025, 2026, June 2026, and January 2027 and 2028, restricted stock awards with respect to 7,300, 7,500, 8,250, 8,000, 8,400 and 8,400 shares, respectively, are scheduled to vest. In March 2024, June 2025 and June 2026, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 11,572 shares, 11,572 shares and 11,813 shares, respectively, subject to RSUs are scheduled to vest. |
(4) | In January 2024, 2025, 2026, June 2026, and January 2027 and 2028 restricted stock awards with respect to 10,800, 10,000, 8,750, 8,800 8,900 and 8,900 shares, respectively, are scheduled to vest. In March 2024, June 2025 and June 2026, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 11,572 shares, 11,572 shares and 11,813 shares, respectively, subject to RSUs are scheduled to vest. |
(5) | In January 2024, 2025, 2026, June 2026, and January 2027 and 2028, restricted stock awards with respect to 7,000, 7,421, 7,864, 13,400, 7,971 and 8,153 shares, respectively, are scheduled to vest. In March 2024, June 2025 and June 2026, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 17,888 shares, 17,890 shares and 17,438 shares, respectively, subject to RSUs are scheduled to vest. |
(6) | In January 2024, 2025, 2026, June 2026, and January 2027 and January 2028, restricted stock awards with respect to 14,474, 14,320, 14,320, 14,800, 14,282 and 14,206 shares, respectively, are scheduled to vest. In March 2024, June 2025 and June 2026, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 21,974 shares, 24,226 shares and 23,625 shares, respectively, subject to RSUs are scheduled to vest. |
| | Stock Awards | ||||
Name | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) |
Jeffrey A. Gould | | | 13,225 | | | 248,365 |
George Zweier | | | 7,000 | | | 131,460 |
Mitchell Gould | | | 10,500 | | | 197,190 |
David W. Kalish | | | 7,163 | | | 134,521 |
Matthew J. Gould | | | 13,225 | | | 248,365 |
Stock Awards | ||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||
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 | — | — |
| | Upon Death, Disability or Retirement | | | Upon a Change of Control | |||||||
Name | | | Restricted Stock ($) | | | RSUs ($)(2) | | | Restricted Stock ($) | | | RSUs ($)(2) |
Jeffrey A. Gould | | | 1,604,354 | | | 266,536 | | | 1,604,354 | | | 314,199 |
George Zweier | | | 889,532 | | | 135,503 | | | 889,532 | | | 159,739 |
Mitchell Gould | | | 1,043,829 | | | 135,503 | | | 1,043,829 | | | 159,739 |
David W. Kalish(1) | | | 963,129 | | | 209,385 | | | 963,129 | | | 245,709 |
Matthew J. Gould | | | 1,604,354 | | | 266,536 | | | 1,604,354 | | | 314,199 |
(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 upon his retirement as and to the extent adjusted performance conditions were satisfied as of his retirement, (B) granted in 2022 and 2023 would vest in 2025 and 2026, respectively, 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. |
TABLE OF CONTENTSCOMPENSATION COMMITTEE REPORT
We have reviewed
(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 9 of our consolidated financial statements included in the Annual Report. |
Year | | | Summary Compensation Table Total for PEO ($) | | | Compensation Actually Paid to PEO(1) ($) | | | Average Summary Compensation Table Total for NEOs ($) | | | Average Compensation Actually Paid to NEOs(2) ($) | | | Value of Initial Fixed $100 Investment Based On: | | | Net Income (millions) |
| Total Stockholder Return ($) | | ||||||||||||||||
2023 | | | 1,882,891 | | | 1,319,498 | | | 883,300 | | | 563,173 | | | 142.01 | | | 3.9 |
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) | See Note 6 to the Summary Compensation Table for information regarding the treatment of dividends and dividend equivalents payable on stock and similar awards. |
(2) | 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. |
(3) | |
Year | | | Reported Summary Compensation Table Total for PEO ($) | | | Reported Value of Equity Awards ($) | | | Equity Award Adjustments ($) | | | Compensation Actually Paid to PEO ($) |
2023 | | | 1,882,891 | | | (587,616) | | | 24,223 | | | 1,319,498 |
2022 | | | 1,924,234 | | | (672,629) | | | 219,766 | | | 1,471,371 |
2021 | | | 1,991,288 | | | (778,898) | | | 1,605,068 | | | 2,817,458 |
Year | | | Year End Fair Value of Equity Awards ($) | | | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | | | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | | | Total Equity Award Adjustments ($) |
2023 | | | 386,940(1) | | | (351,343)(2) | | | (11,374) | | | 24,223 |
2022 | | | 617,198(3) | | | (388,124)(4) | | | (9,308) | | | 219,766 |
2021 | | | 1,148,488(5) | | | 483,705 | | | (27,125)(6) | | | 1,605,812 |
(1) | With respect to the 2023 RSU-AFFO awards, assumes that none of such awards would have vested at year-end 2023. |
(2) | With respect to the (A) 2022 RSU-AFFO awards, assumes that as of year-end (i) 2023, none of such awards would have vested and (ii) 2022, 99.65% of such awards would have vested and (B) the 2021 RSU-AFFO awards, assumes that 100% of such awards would have vested at the 2023 and 2022 year-end. |
(3) | With respect to 2022 RSU-AFFO awards, assumes that 99.65 % of such awards will vest at year-end 2023. |
(4) | With respect to the 2021 RSU-AFFO awards, assumes that 100% of such awards would vest at each of year-end 2023 and 2022. |
(5) | With respect to 2021 RSU-AFFO awards, assumes that 100 % of such awards would vest at year-end 2023. |
(6) | With respect to the 2016 RSU-AFFO awards, assumed that none of such awards would vest at year-end 2021 - none of such awards vested. |
Year | | | Average Reported Summary Compensation Table Total for NEOs ($) | | | Average Reported Value of Equity Awards ($) | | | Total Average Equity Award Adjustments ($)(1) | | | Average Compensation Actually Paid to NEOs ($) |
2023 | | | 883,300 | | | (341,054) | | | 20,927 | | | 563,173 |
2022 | | | 918,263 | | | (458,719) | | | 138,976 | | | 598,520 |
2021 | | | 1,072,158 | | | (562,618) | | | 1,139,394 | | | 1,648,934 |
(1) | Although the vesting of David Kalish’s restricted stock would accelerate upon his retirement, as he has not retired, and consistent with the disclosure elsewhere in this proxy statement (except as otherwise indicated), we have not accelerated the vesting of such awards. |
Year | | | Average Year End Fair Value of Equity Awards ($) | | | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards ($) | | | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | | | Total Average Equity Award Adjustments ($) |
2023 | | | 268,410 | | | (239,337) | | | (8,146) | | | 20,927 |
2022 | | | 420,955 | | | (275,059) | | | (6,920) | | | 138,976 |
2021 | | | 818,041 | | | 341,905 | | | (20,551) | | | 1,139,394 |
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
35
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.
In 2017, each of the following individuals was granted shares of restricted stock with the indicated and Equity Incentive Awards
In 2017
As a cost saving measure, wein 2022 and 2023 whose salary, bonus and benefits allocated to us in either of such years exceeded $120,000. The amounts allocated to us in 2022 and 2023 for the services of Isaac Kalish were $127,947 and $122,858, respectively and Steven Rosenzweig were $281,908 and $236,698, respectively.
2022 or 2023.
36
Our codethe board of business conductdirectors is seeking ratification of the appointment of Ernst & Young LLP (“E&Y”), as our independent registered public accounting firm for 2024. A representative of E&Y is expected to be present at our annual meeting and ethics provideswill have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.
| | 2023 | | | 2022 | |
Audit fees(1) | | | $613,500 | | | $576,108 |
Audit-related fees | | | — | | | — |
Tax fees | | | — | | | 17,600 |
All other fees | | | — | | | — |
Total fees | | | $613,500 | | | $593,708 |
(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. |
Generally, related party transactions that are proposed are submitted toaudit committee.
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).
| | Louis C. Grassi (Chairman) | |
| | Gary Hurand | |
| | Elie Y. Weiss |
Based solely422 of the Code or may be non-qualified stock options governed by Section 83 of the Code. Generally, federal income tax is not due from a recipient upon the grant of a stock option, and a deduction is not taken by us. Under current tax laws, if a recipient exercises a non-qualified stock option, he or she will have taxable income equal to the difference between the market price of the common shares on the exercise date and the stock option exercise price. We are entitled to a corresponding deduction on our reviewincome tax return.
Name and Position | | | Dollar Value(1) | | | Number of Units(1) |
Jeffrey A. Gould, President and Chief Executive Office | | | 654,480 | | | 35,206 |
Mitchell Gould, Executive Vice President | | | 360,646 | | | 19,400 |
George Zweier, Chief Financial Officer and Vice President | | | 351,351 | | | 18,900 |
David W. Kalish, Senior Vice President – Finance | | | 439,709 | | | 23,653 |
Matthew J. Gould, Senior Vice President | | | 654,480 | | | 35,206 |
Executive group (10 individuals) | | | 4,196,098 | | | 225,718 |
Non-executive director group (8 individuals) | | | 1,062,530 | | | 57,156 |
Non-executive officer and employee group (33 individuals) | | | 1,264,864 | | | 68,040 |
(1) | Reflects the number of units multiplied by $18.59, the closing price of our common stock on December 31, 2023. Does not give effect to the additional shares potentially issuable pursuant to the peer group adjustment. |
contemporaneously therewith with respect to the same transactions, which reports also contained the same or similar errors as in the Gould Reports. Amendments correcting such errors have been filed.
By order of the Board of Directors, | ||||
| | |||
S. Asher Gaffney, | | | ||
Corporate Secretary | | | ||
| | |||
April 22, 2024 | | |
37
New York Stock Exchange.
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.
“Disability” or “Disabled” meansaward (or if otherwise determined by the inability to engage in any substantial gainful activity by reasonCommittee, the conclusion 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.
A-1
“Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to the exercise of an Option.
“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. (“NAREIT”), (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) gains or losses on sales of properties, (xvii) reduction in expense levels, (xvii)(xviii) operating cost management and employee productivity, (xviii)(xix) 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)(xx) achievement of business or operational goals such as market share and/or business development.development, and (xxi) such other metrics or criteria as the Committee may establish or select. 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.
A-2
“Performance Goals” means for a Performance Cycle, the specific goals established by the Committee for aapplicable 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.
resignation.
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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.
law.
A-4
SECTION 6
is 50,000.
A-5
6.7 Certain Additional Provisions for Incentive Stock Options.
A-6
7.4 Other Restrictions. The Committee may impose such other restrictions on Shares of Restricted Stock and Restricted Stock UnitsRSUs (including Shares underlying RSUs) as it may deem advisable or appropriate in accordance with this Section 7.4.
(b) Section 162(m) Performance Restrictions. For purposesCommittee, including the occurrence of qualifying grantsa Change in Control. Unless otherwise provided in an Award Agreement, the Period 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 GoalsRestriction shall be set by the Committee ontwo (2) year cliff vesting period, with accelerated full vesting upon death, Disability 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) Retirement.
A-7
(a) 8.2 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 90180 days of the beginning of a Performance Cycle, the Performance Criteria for such grant, and the Performance Goals with respect to each Performance Criterion (including, if applicable, 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)
(c)
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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).
(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.
A-9
SECTION 13MISCELLANEOUS
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. AnyOption, any such deferral shall be subject to such rules and procedures as shall be determined by the Committee.
13.2
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
13.5 Except as set forth in the following sentence, for purposes of the Plan and any Award, service as an employee, officer, director or consultant shall be recognized; references in the Plan and any Award Agreement to employment shall be construed more broadly to refer to service as an employee, officer, director or consultant. Notwithstanding the preceding sentence, for purposes of Incentive Stock Options, references in the Plan or any Award Agreement to employment shall be construed as referring only to employment, and not to other forms of service.
13.6
13.7
13.8 A-1013.9 12.8 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 13.11 13.12 CompanyTrust. 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 declarationarticles of trustincorporation 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 Maryland.13.14 Maryland and applicable federal law.A-11