This Amendment No. 1 on Form 10-K/A (this “Amendment”) amends the WP GlimcherWashington Prime Group Inc. (“WPG”) and Washington Prime Group, L.P. (“WPG L.P.”) Annual Report on Form 10-K for the fiscal year ended December 31, 2015,2020 (the “Form 10-K”), originally filed on February 29, 2016March 16, 2021 (the “Original Filing”). We are filing this Amendment to include the information required by Part III and not included in the Original Filing.Filing as well as other changes described below. Pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”), this information may be incorporated by reference into the Original Filing from WPG’s definitive proxy statement for its annual meeting of shareholders (“Proxy Statement”); provided, that such Proxy Statement is filed with the SEC no later than 120 days from the end of WPG’s fiscal year ended December 31, 2015.2020. WPG’s Proxy Statement will not be filed with the SEC within this time period. This Amendment also corrects three line item disclosures that are a part ofAlso, the cover page on Form 10-K. The disclosure in the Original Filing concerning securities registered under Section 12(g)of WPG’s outstanding common shares and requirements to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended (The "Exchange Act"), incorrectly referenced the operatingWPG L.P.’s outstanding limited partnership units of WPG L.P. and incorrectly reflected that WPG L.P. was required to file reports under Section 13 or 15(d) of the Exchange Act, and the line item check-the-box disclosure pertaining to disclosure required by Item 405 of Regulation S-K concerning delinquent Form 3, 4 and 5 filers has been added toupdated from that disclosed on the cover page of the Original Filing to reflect the respective share and unit amounts outstanding as of the day prior to this AmendmentAmendment’s filing date. Additionally, the “Smaller reporting company” box has been checked for WPG L.P. as it was inadvertently omitted fromnot checked on the cover page of the Original Filing. Lastly, in connection with the filing of this Amendment and pursuant to the rules of the SEC, we are including with this Amendment new certifications of our principal executive officer and principal financial officer pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002, as amended. Accordingly, Item 15 of Part IV has also been amended to reflect the filing of these new certifications. Except as described above, no other changes have been made to the Original Filing. The Original Filing continues to speak as of theits filing date of the Original Filing, and we have not updated the disclosures contained therein to reflect any events which occurred at a date subsequent to the filing date of the Original Filing. The date of WPG’s 20162021 Annual Meeting of Shareholders willhas yet to be held on August 16, 2016.determined or scheduled.
As used in this Amendment, unless the context requires otherwise, all references to “we,” “our,” “us,” “our company,” or the “Company” are intended as references to WPG, WPG L.P., and entities in which WPG or WPG L.P. (or any affiliate) have a material interest on a consolidated and combined basis.
The following table presents certain information as of the date of this Amendment concerning each of our executive officers (the “Senior Executives”) and directors. Each of the Senior Executives are persons identified by the WPG Board of Directors (the “Board”) as “executive officers” of WPG as that term is used under Item 401(b) of Regulation S-K (17 C.F.R. §229.401(b)) and defined under SEC Rule 3b-7 (17 C.F.R. §240.3b-7).
|
Name | Age(1) | | | |
Name | | Age | | Position(s) Held |
Mark S. Ordan | 57 | | Chairman of the Board |
Michael P. Glimcher | 48 | | Vice Chairman and Chief Executive Officer |
Louis G. Conforti | 51 | | Director and Audit Committee Chairperson(1) |
| Robert J. Laikin | 5257 | | Lead Independent DirectorChairman of the Board, Compensation Committee member, Governance and Nominating Committee member, and Strategic Alternatives Committee member |
Niles C. OverlySheryl G. von Blucher | 65 | 59 | Director, Audit Committee member and CompensationSustainability Committee Chairperson |
Jacquelyn R. SofferJ. Taggart (“Tag”) Birge | 50 | | Director, Compensation Committee member, Strategic Alternatives Committee member, Sustainability Committee member and Governance and Nominating Committee Chairperson |
Marvin L. WhiteJohn F. Levy | 54 | 65 | Director, Audit Committee Chairperson, Governance and Nominating Committee member, and an Audit Committee Financial Expert |
Gregory A. GorospeJohn J. Dillon III | 61 | Director, Strategic Alternatives Committee member, Compensation Committee Chairperson, Audit Committee member, and Sustainability Committee member |
| Louis G. Conforti | 56 | Chief Executive Officer and Director |
| Robert P. Demchak | 50 | | Executive Vice President, General Counsel and Corporate Secretary |
| Stephan G. Gerber | 59 | Senior Vice President, Head of Property Management |
| Melissa A. Indest | 5257 | | SeniorExecutive Vice President, Finance and Chief Accounting Officer |
Keric M. “Butch” KnerrJoshua P. Lindimore | 5147 | Executive Vice President, Head of Leasing |
| Mark E. Yale | 55 | Executive Vice President and Chief OperatingFinancial Officer |
Mark E. Yale | 50 | | Executive Vice President and Chief Financial Officer |
(1)The age and position(s) listed are all as of the filing date of this Amendment.
Set forth below is biographical information concerning the members of the Board and Senior Executives as of the filing date of this Amendment. In addition to the biographical information presented, also included for each Board member is a listing of the particular skills, qualifications, experience, or attributes that led the Board to conclude that the respective director should serve as a member of the Board.
Mark S. Ordan servedRobert J. Laikin serves as Executiveour Chairman of the Board. Mr. Laikin became a director and was appointed as Lead Independent Director of the Company from January 15, 2015in May 2014. Mr. Laikin held the Lead Independent Director role until January 1,the position was eliminated by the Board in June 2016 whenat which time he became the non-executive Chairman of the Board pursuant toBoard. Mr. Laikin is currently the managing member of L7 Investments LLC, a Transitionclosely held company that invests primarily in multi-family apartments as well as single-purpose buildings, hotels, divestitures and Consulting Agreement, dated May 31, 2015, bysingle-family homes, and betweenhas held this position since January 2016. Additionally, Mr. Ordan and WPG (the “Consulting Agreement”). Mr. Ordan served as our Chief Executive Officer from May 2014 to January 15, 2015. Mr. Ordan has served on the Board since May 2014. From January 2013 to November 2013, Mr. Ordan served as a director and asLaikin is the Chief Executive Officer of Sunrise Senior Living, LLC, the successorNovus Capital Corporation II (“Novus”), a publicly-held special purpose acquisition company, and has held this position since November 2020. Mr. Laikin served as Executive Advisor to the CEO and Government Relations Executive of Ingram Micro Inc., a wholesale technology distributor and supply-chain management businessand mobile device lifecycle services company, from November 2012 to December 31, 2019. Mr. Laikin is member of Sunrise Senior Living, Inc. ("Sunrise"), which had beenthe Board of Directors of Novus and AppHarvest, a publicly tradeddeveloper and operator of approximately 300 senior living communities located in the United States, Canada and the United Kingdom prior to its sale in January 2013 to Health Care REIT, Inc.large-scale, high-tech controlled environment indoor farms. Mr. Ordan served as Sunrise's Chief Executive Officer from November 2008 to January 2013, and as a director from July 2008 to January 2013. While at Sunrise, Mr. Ordan led its restructuring and oversaw its eventual sale. He served as the Chief Executive Officer and President of The Mills Corporation ("Mills"), a publicly traded developer, owner and manager of a diversified portfolio of regional shopping malls and retail entertainment centers, from October 2006 to May 2007, as its Chief Operating Officer from February 2006 to October 2006 and as a director from December 2006 until May 2007. While at Mills, Mr. Ordan oversaw its operations and its eventual sale to Simon Property Group, Inc. (“Simon”) and Farallon Capital Management, LLC in May 2007. Prior to that, he served as President and Chief Executive Officer of Balducci's LLC, a gourmet food store chain. HeLaikin also founded and served as Chairman, President and Chief Executive Officer of Fresh Fields Markets, Inc., an organic foods supermarket chain, eventually leading the merger of the company with Whole Foods Markets, Inc. Mr. Ordan also was employed in the equities division of the investment banking firm of Goldman Sachs & Co. Mr. Ordan served as a director of Harris Teeter Supermarkets, Inc., a publicly traded supermarket chain, from February 2013 until January 2014, when it was acquired by The Kroger Co. He was a Trustee of Vassar College for fifteen years. He also previously served for ten years, including five years as Non-Executive Chairman,serves on the Board of TrusteesDirectors of Federal Realty Investment Trust. Since June 2015,Novus Capital Corporation, a publicly-held blank-check company, and has served on the board since Novus Capital Corporation’s inception in March 2020.
Skills and Qualifications: Mr. OrdanLaikin has beenan established track record of launching and building successful enterprises, with significant experience in the areas of executive leadership, retail, real estate, business strategy and corporate finance, banking, financing, accounting, corporate management, general business and global business operations, corporate governance, public company compliance, political/governmental matters, audit/compliance, entrepreneurism, real estate development, sales, charitable/philanthropic matters, marketing, risk management/insurance, legal, investor, media and public relations, negotiation and deal structure.
Sheryl G. von Blucher became a director of the Company on August 30, 2016. Ms. von Blucher currently works as a board member. Ms. von Blucher previously served as Chief Operations Officer and Board Director of Churchill Capital Corp, an information and analytics focused company, from August 2018 until its merger with Clarivate Analytics Plc, a global analytics company, in May 2019. Ms. von Blucher also served as Co-Chief Executive Officer of DTN LLC from January 2017 to July 2018. Prior to this, Ms. von Blucher served as an Advisor to the Chairman & CEO of IHS from 2007 through December 2017. Additionally, Ms. von Blucher served as a partner and managing director from 2014 to 2021 with the JMJS Group, a private equity partnership in the area of private equity portfolio management. Ms. von Blucher has over thirty years of experience in a variety of roles in the global integrated energy, technology services and software, and public and non-profit sectors. She has led strategic and portfolio planning, operations, and corporate finance and development for both domestic and international organizations. Ms. von Blucher currently serves on the Board of Directors of Clarivate Plc and Capital Canyon Club and Golf Development LLC. Ms. von Blucher holds a bachelor’s degree from Rice University and a master’s degree from Harvard University.
Skills and Qualifications: Ms. von Blucher has experience and expertise in the areas of risk management, insurance, finance, accounting, governmental matters, charitable/philanthropic, media/public relations, environmental, audit and compliance, corporate governance as well as substantial entrepreneurial skills, public company experience and overall general business and corporate management expertise.
J. Taggart (“Tag”) Birge became a director of the Company in May 2017. Mr. Birge has over twenty years of healthcare real estate development, leasing and sales experience. Mr. Birge currently serves as President and Principal of Cornerstone Companies, Inc. (“Cornerstone”), a healthcare real estate development, leasing, property management, consulting, and investment company, and has held this position since 2008. Prior to serving in this role with Cornerstone, Mr. Birge served from 2004 to 2006 as Senior Vice President of Healthcare at Lauth Property Group, an Indiana based commercial real estate development company. Additionally, in March 2008, Mr. Birge co-founded Birge & Held (“B&H”), national apartment real estate, private equity and investment firm, and has served as B&H’s Chief Executive Officer since 2008. From 1997 to 2004, Mr. Birge practiced real estate law with the law firm of Bose McKinney & Evans, LLP in its Indianapolis, Indiana office. Mr. Birge’s practice focused on representing private real estate developers with office and medical sales and development across the United States. Mr. Birge graduated cum laude from Indiana University with a Bachelor of Arts in Political Science and holds a Juris Doctorate from the University of Virginia. Mr. Birge has served as a member of the Board of Directors of VEREIT, Inc. (f/k/Bowen Engineering since 2002, the Board of Directors of the Tindley School since 2015, and the Board of Directors of the Indiana Sports Corp. since 2004.
Skills and Qualifications: Mr. Birge has experience in real estate, sales and real estate development along with substantial entrepreneurial and general business skills as well as legal expertise.
John F. Levy became a American Realty Capital Properties, Inc.director of the Company on June 20, 2016. Mr. Levy currently serves as the Chief Executive Officer and principal consultant for Board Advisory, a consulting firm established to assist public companies, or companies aspiring to be public with corporate governance, corporate compliance, ethics, financial reporting and financial strategies. He has held this role since May 2005. . Mr. Levy previously served as Chief Executive Officer of Sticky Fingers Restaurant, LLC (“Sticky Fingers”), a New York Stock Exchange ("NYSE") listed full-service real estate operating company with investment management capability that owns and actively manages a diversified portfolio of retail,South Carolina based barbeque restaurant office and industrial real estate assets.chain, from September 2019 to May 1, 2020. Additionally, Mr. OrdanLevy previously served as a business consultant with Sticky Fingers from February 2019 to August 2019. Mr. Levy is a recognized corporate governance and financial reporting expert with over 30 years of progressive financial, accounting and business experience; including nine years in public accounting with three national accounting firms in addition to having served as Chief Financial Officer of both public and private companies for over 13 years. In addition to his service on the Board, Mr. Levy currently serves on the boardsboard of directors of two other public companies: Applied Minerals, Inc. (since January 2008), a mine owner that extracts, processes, markets halloysite clay and iron oxide for sale to a range of end markets, and Happiness Biotech Group Limited (since October 2019), a Chinese-based nutraceutical and dietary supplements company. Mr. Levy also served on the board of directors of Takung Art Co. Ltd., an electronic online platform operator for artists, art dealers and art investors to offer and trade in ownership units over valuable artwork, until June 2019; and China Commercial Credit, Inc., a financial services firm operating in China, until December 2016. Mr. Levy also served as a board member and program chair for the New Jersey Chapter of the following nonprofit organizations:National Association of Corporate Directors (“NACD”) from October 2007 to June 2012. Mr. Levy is a frequent speaker on the U.S. Chamberroles and responsibilities of Commerce,board members and audit committee members. He has authored and presented numerous courses on finance, management and governance to state accounting societies including THE 21ST CENTURY DIRECTOR: Ethical and Legal Responsibilities of Board Members. Mr. Levy is a Certified Public Accountant with several years of experience. Mr. Levy is a graduate of the National EndowmentWharton School of the University of Pennsylvania, and received his MBA from St. Joseph's University in Philadelphia. Mr. Levy has completed the NACD’s Board Leadership Fellow program of study.
Skills and Qualifications: Mr. Levy has general business, finance, accounting, corporate governance, public company, banking, retail, financing, audit, compliance, entrepreneurial, and general corporate management experience.
John J. Dillon III became a director of the Company on June 20, 2016. Mr. Dillon is currently serving as Managing Director at NFP Corp. (“NFP”), a broker and insurance consulting firm specializing in securing property and casualty insurance and employee benefits coverage for Democracy,large corporations and institutions. Mr. Dillon has held this position since January 2017. Additionally, Mr. Dillon served as President of City Securities Insurance, LLC (“CSI”), a provider of investment banking services, and served on its board of directors from January 2010 until January 2017 when NFP acquired CSI. Mr. Dillon also serves on the SeedButler University School Foundation,of Insurance Board and the Economic Clubhas held this position since 2012. Mr. Dillon is a graduate of Washington, D.C.DePauw University with a Bachelor of Arts in Economics.
Skills and Qualifications: Mr. OrdanDillon has substantial executive experience leadership ability and a proven recordexpertise in the areas of accomplishment in retail business, real estate, and healthcare, with proven skills inrisk management, insurance, finance, accounting, corporate finance, capital markets, mergers and acquisitions, joint ventures, corporate restructurings, strategic planning and othergovernance, public company matters.operations, banking, finance, politics and governmental relations, audit, compliance, charitable and philanthropic matters, real estate development, entrepreneurism, sales, media/public relations, corporate management, and general management.
Michael P. Glimcher
Louis G. Confortibecame our Vice Chairmana director of the Company on May 27, 2014 and Chief Executive Officer on January 15, 2015. Mr. Glimcher previously served as Chairman of the Glimcher Realty Trust (“Glimcher” or “GRT”) Board of Trustees from September 2007 to January 15, 2015 when Glimcher was acquired by WPG (the “Merger”), as Glimcher’sour Interim Chief Executive Officer from January 2005 to January 15, 2015, and as a Trustee of Glimcher from June 199720, 2016 until January 15, 2015. As Glimcher's Chairman of the Board andOctober 6, 2016 when he became our Chief Executive Officer, he was responsible for implementingOfficer. Prior to joining the policies of Glimcher, as determined by the Glimcher Board of Trustees, as well as managing Glimcher's overall business and affairs. He also served as Glimcher's Executive Vice President from March 1999 to December 1999 and its President from December 1999 until September 2007, as well asCompany in various senior level leasing and development positions since joining Glimcher in 1991. Mr. Glimcher has been a director of M/I Homes, Inc., a publicly traded builder of single family homes, since January 2013. He serves on the Executive Board and Governance Committee for the National Association of Real Estate Investment Trusts (“NAREIT”), the trade association for real estate investment trusts, and the Board of Trustees for the Arizona State University Foundation, an organization responsible for all aspects of fundraising at Arizona State University, and the Wexner Center for the Arts, a multidisciplinary and international organization affiliated with The Ohio State University and formed for the exploration and advancement of contemporary art. He is an ex officio member of the Board of Trustees of the International Council of Shopping Centers ("ICSC"), the leading industry organization for retail real estate companies, and the Columbus Partnership, a non-profit membership-based organization of chief executive officers from leading businesses and institutions located in Columbus, Ohio. Mr. Glimcher also serves on the Governing Committee of The Columbus Foundation, a philanthropic organization based in Columbus, Ohio, and is a member of the International Council of The Real Estate Roundtable, a non-profit public policy organization that represents the interests of constituents in the real estate industry. He is active in several other charitable and community organizations.
Skills and Qualifications: Mr. Glimcher has substantial executive experience and leadership ability in the retail real estate industry, with strong skills in corporate finance, capital markets, mergers and acquisitions, strategic planning and other public company matters.
Louis G. Conforti became a director on May 27, 2014. Since December 2013, Mr. Conforti has been Senior Managing Director of Balyasny Asset Management LP, an alternative investment manager firm, and since April 2014, a Principal of Colony Capital LLC, a global real estate investment firm. Mr. Conforti was Global Head of Real Estate for UBS O’Connor, the alternative investment management division of UBS AG, a financial services firm, from October 2008 to November 2013. During that time, he also served as Senior Portfolio Manager of O’Connor Colony Property Strategies, a partnership with Colony Capital LLC. Previously, he was Managing Director and Head of Real Estate Investments at the hedge fund firm of Stark Investments, from January 2005 to October 2008. His predecessor real estate hedge fund, The Greenwood Group, was acquired by Stark Investments in January 2005.his current position, Mr. Conforti served as Co‑President and Chief Financial OfficerPrincipal/Executive Director of Prime Group Realty Trust, aColony Capital, Inc. as the Global Head of Strategy as well as focusing on publicly traded office and industrial property real estate investment trust,investing from April 2014 until June 2000 to October 2003, as its Executive Vice‑President‑Capital Markets, from June 1988 to November 1999, and as its Senior Vice President‑Capital Markets, from June 1998 to November 1999. Prior to that, Mr. Conforti worked at the investment banking firms of CIBC World Markets and Alex. Brown & Sons within their real estate investment banking and capital markets divisions.20, 2016.
Skills and Qualifications: Mr. Conforti has substantial real estate industry experience, with strong skills in real estate investments, executive management, corporate finance, capital markets, financial statement and accounting matters and other public company matters.
Robert J. Laikin became a director and was appointed as our Lead Independent Director on May 27, 2014. Mr. Laikin founded BrightPoint, Inc., a wireless device distribution and logistics company (then known as Wholesale Cellular USA, Inc.), in 1989. He served as the Chairman of the Board and Chief Executive Officer of BrightPoint, Inc., a NASDAQ listed company, from April 1994 until its sale in October 2012 to Ingram Micro Inc., a publicly traded wholesale technology distributor and supply-chain management and mobile device lifecycle services company. Mr. Laikin is currently an Executive Advisor to the CEO and Government Relations Executive of Ingram Micro Inc., a position he has held since November 2012. From July 1986 to December 1987, Mr. Laikin was Vice President, and from January 1988 to February 1993, President, of Century Cellular Network, Inc., a company engaged in the retail sale of cellular telephones and accessories.
Skills and Qualifications: Mr. Laikin has an established track record of launching and building successful enterprises, with significant experience in the areas of executive leadership, business strategy and finance, management, global business operations, accounting, corporate governance, public company compliance, political/governmental matters, charitable/philanthropic matters, marketing, risk management, investor, media, and public relations, negotiation and deal structure.
Niles C. Overly became a director on January 15, 2015. Mr. Overly previously served as a Trustee of Glimcher from May 2004 until January 15, 2015. Currently, Mr. Overly serves as Chairman and Chief Executive Officer of Metro Data Center, LLC, a high tier data center located in Dublin, Ohio, and has served in that capacity since 2012. Mr. Overly also serves as Chairman and Chief Executive Officer of BrightCastle Ventures LLC, a private equity and consulting company, and has served in that role since 2007. He also served as Chairman of The Frank Gates Companies/Avizent ("Frank Gates"), which specialize in employee benefit and risk management services, from 2003 to August 2008. Mr. Overly served as Chief Executive Officer of Frank Gates from 1983 to March 2007 and as General Counsel for Frank Gates from 1979 until 1983. Prior to joining Frank Gates, Mr. Overly served as an international tax consultant with Arthur Andersen & Company, and he was also a partner in the law firm of Overly, Spiker, Chappano & Wood, L.P.A. for five years. He currently serves as a member of the Ohio Chamber of Commerce and was formerly Chairman of the organization. He has also been active in the Young Presidents Organization ("YPO"), having served as the Chairman and Education Chair of YPO's Columbus, Ohio Chapter.
Skills and Qualifications: Mr. Overly has general business, risk management, finance and accounting, compliance, legal, audit, compensation, corporate governance and public company experience as well as corporate management experience and skills.
Jacquelyn R. Soffer became a director on May 27, 2014. Ms. Soffer is a Principal for Turnberry Associates, a real estate development and property management company, which she joined in 1989, where she oversees the company's retail, hospitality and office divisions including its landmark Aventura Mall, a super-regional shopping center located in South Florida. Turnberry Associates holds a two-thirds interest in Aventura Mall, with the remaining one-third interest being held by an affiliate of Simon. Ms. Soffer's experience includes her instrumental roles in developing Destin Commons, an open-air lifestyle center in Northwest Florida, which recently opened a 100,000 square foot expansion. Additionally, Ms. Soffer leads the continued enhancement and operations of both the Fontainebleau Miami Beach as well as Turnberry Isle Miami Resort. She is a board member of Fontainebleau Miami Beach and a Founding Member and member of the Board of Trustees of the Institute of Contemporary Art in Miami, Florida.
Skills and Qualifications: Ms. Soffer has extensive executive management experience in the retail, hospitality and office real estate sectors and real estate generally, with strong overall entrepreneurial skills and extensive experience and skills in the areas of real estate development and property management.
Marvin L. White became a director on May 27, 2014. Since November 2014, Mr. White has served as the President and Chief Executive Officer of The MLW Advisory Group, LLC, a management advisory company targeting the needs of health care and related companies. From September 2008 to March 2014, Mr. White served as System Vice President and Chief Financial Officer of St. Vincent Health, and was responsible for finance, materials management, accounting, patient financial services and managed care for all 19 hospitals and 36 joint ventures. Prior to joining St. Vincent Health, Mr. White served as Executive Director and Chief Financial Officer at Eli Lilly & Company's (“Lilly”) Lilly USA, from 2000 to 2006 where he was a member of the Operations Committee. Mr. White also held leadership positions at Lilly in corporate finance and investment banking in the Corporate Strategy Group, and was the pharmaceutical company's Executive Director and Assistant Treasurer, from 2006 to 2008. Prior to his career in health care, Mr. White was with General Motors in Illinois, from 1981 to 1987, and the Hewlett-Packard Company (n/k/a HP Inc.), an information technology company, in Atlanta, from 1989 to 1993, undertaking various supervisory and financial assignments. In 1993, he joined Motorola, Inc.'s (n/k/a Motorola Solutions, Inc.) Cordless Operation as Operations Controller, and in 1995 he was named Senior Operations Controller for the Japan Cellular Division of this telecommunications company. Mr. White also served as the South Asia Divisional Controller for Motorola's Cellular Sector, and later P. Demchak became the Latin America Divisional Controller for that sector. Mr. White served as the chair of St. Vincent Indianapolis Hospital Board of Directors from 2006 to 2008 and as a member of the Board of Trustees of HealthLease Properties Real Estate Investment Trust, a Canadian-based, senior housing and post-acute health care property real estate investment trust, from November 2013 to November 2014, when it was acquired by HealthCare REIT, Inc. He currently serves on the boards of Emergent BioSolutions Inc., a specialty pharmaceutical company publicly traded on the NYSE (since June 2010), CoLucid Pharmaceuticals, Inc., a NASDAQ listed Phase 3 clinical-stage biopharmaceutical company (since July 2015), and One American Financial Partners, Inc., a financial services company (since August 2014). Additionally, he is a past member of the Arts Council of Indianapolis and the Investment Committee of Lynxx Capital Corporation, an investment management firm
Skills and Qualifications: Mr. White has extensive chief financial officer experience in the health care industry, with strong skills in hospital accounting, general finance/accounting, financial statement matters, risk management, corporate governance, general management, audit/compliance, charitable/philanthropic matters, general business, and public company matters. He also previously served as the Chair of the Audit Committee of another public company.
Gregory A. Gorospe serves asCompany’s Executive Vice President, General Counsel and Corporate Secretary on June 16, 2016. In his current role, Mr. Demchak oversees all of WPG’s legal, compliance, and has held this position since joiningcorporate governance matters. Previously, Mr. Demchak served as our Executive Vice President, Assistant General Counsel and Assistant Secretary from October 2015 until assuming his current role. Additionally, Mr. Demchak served as General Counsel and Secretary of the Company infrom May 2014 until October 2015. Mr. Gorospe oversees all legal, compliance,Demchak has a Bachelor of Arts degree from the State University of New York at Albany and governance mattersa Juris Doctorate from St. John’s University School of Law.
Stephan G. Gerber has served as Senior Vice President, Head of Property Management of the Company since May 2018. Previously, Mr. Gerber was the Company’s Vice President, Regional Director of Property Management from January 2015 to May 2018. In his current role, Mr. Gerber leads the Property Management department for the Company. Prior to joiningCompany where he is responsible for all aspects of property management and operations functions and is actively involved in strategic initiatives at the Company, Mr. Gorospe was withproperty level, including the law firmrollout of Jones Day from 1995 to 2015the Company’s ‘Goodwill Ambassador’ initiative in 2018 and as a partner at Jones Day from 2003 until his departure. He practicedWPG Cares programming in the areas of real estate, finance, capital markets, and commercial real estate development. He is a member of ICSC, the Ohio State Bar Association,2020. Additionally, he supports innovation initiatives and the Columbus (Ohio) Bar Association,Company’s collaborations. Mr. Gerber is currently involved in numerous philanthropic and sits on the boards of the Asian-Pacific American Bar Association-Columbus and Buckeye Leadership Fellows,community endeavors including Pelotonia, a student leadership development program fostered by alumni ofgrass-roots annual bike tour that funds cancer research at The Ohio State University to empower students to acquire real world lifeComprehensive Cancer Center - Arthur G. James Cancer Hospital and leadership skills.Solove Research Institute. Mr. Gerber has served as captain of the Company’s Pelotonia team since 2016. Mr. Gerber is also a Class One certified high school baseball umpire and football referee.
Melissa A. Indest became our Executive Vice President, Finance and Chief Accounting Officer on February 12, 2019. She had previously served as our Senior Vice President, Finance and Chief Accounting Officer onfrom January 15, 2015. She had served as Glimcher’s Chief Accounting Officer and Senior Vice President, Finance since January 2014.2015 until promoted to her current position. In this capacity,her current role, she oversawoversees all operations of Glimcher’sthe Company’s accounting and finance departments, as well as investor relations and corporate communications. Previously, Ms. Indest served as a Senior Vice President, Finance and Accounting at Glimcher from June 2010 to January 2014, where she was responsible for the day‑to‑day operations of the accounting department, including external financial reporting, tax reporting, lease accounting and credit, as well as the Company’s investor relations and investor relations. Ms. Indest also held the role of Vice President, Finance and Accounting from 2007 to June 2010.corporate communications functions. She originally joined Glimcher in 2003 as Vice President and Controller. Prior to joining Glimcher, Ms. Indest served in various accounting and operational roles with Corporate Express of Cincinnati, Ohio, an office supply company, where she most recently held the title of President, Central Midwest Division. In addition to her prior experience as Glimcher’s Controller, Ms. Indest has extensive background in finance, audit, budget and operational processes and procedures. Ms. Indest began her career with PricewaterhouseCoopers LLP and serves as Vice Chairperson and Treasurer on the Board of Directors for Lifeline of Ohio Organ Procurement, Inc. (“LOOP”), a nonprofit organization.
Keric M. “Butch” Knerr became our Executive Vice Presidentorganization, and Chief Operating Officer in September 2014. Mr. Knerr joined our company from Simon where he served as Executive Vice President of Leasing from March 2009 to September 2014, as well as several other roles of increasing responsibility at Simon and its predecessor from July 1988 through March 2009. As Simon’s Executive Vice President of Leasing, Mr. Knerr was responsible for overseeing Simon’s leasing activities for approximately 55 properties, as well as for overseeing leasing activities on new center developments, mall expansions and redevelopments. Mr. Knerr is a member of ICSC.the Board of Directors of the Network for Life, an affiliated organization of LOOP. She received her Bachelor of Science degree from the University of Akron.
Joshua P. Lindimore currently serves as the Company’s Executive Vice President, Head of Leasing and has held this position since May 2019. Previously, Mr. Lindimore served as the Company’s Senior Vice President, Head of Leasing from October 2017 to May 2019 and as Senior Vice President, Leasing from January 2015 to October 2017. In his current role, Mr. Lindimore manages the Company’s leasing function and leads the leasing operations and strategy for the Company’s national portfolio of enclosed, open air and joint venture properties, in addition to managing and mentoring other key members of the Company’s leasing team. Mr. Lindimore holds a Bachelor of Arts degree from Ohio University. Mr. Lindimore is a member of the International Council of Shopping Centers.
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Mark E. Yale became our is Executive Vice President and Chief Financial Officer onof the Company and has served in this capacity since January 15, 2015. He had been Executive Vice President of Glimcher since May 2006, its Chief Financial Officer since August 2004 and its Treasurer since May 2005. In these roles, he wasthis position, Mr. Yale is responsible for Glimcher’sthe Company’s financial reporting,management and reporting. Also, he directly oversees accounting, treasury, budgeting,finance, tax, internal audit, and information technology, and investor relations functions.services for the Company. Mr. Yale served as Senior Vice Presidentholds a Bachelor of GlimcherScience from August 2004 to May 2006.the University of Richmond. He served as Manageris a member of Finance and Chief Financial Officer at Storage USA, Inc. (“Storage”), a divisionthe board of GE Real Estate, from 2002 through 2004. Prior to that, Mr. Yale served as Senior Vice Presidentdirectors for Financial Reporting at Storage, a then publicly traded storage real estate investment trust, from July 1999 to June 2002 and as Vice President for Financial Reporting from August 1998 to June 1999. Prior to the acquisition of Storage by GE Real Estate in 2002, Mr. Yale successfully managed Storage’s financial and accounting functions. He also served as Senior Audit Manager of PricewaterhouseCoopers LLP from January 1994 to July 1998.Wexner Heritage Village.
Family Relationships
As of the date of this Amendment, there are no familial relationships between any of our directors and Senior Executives.
Section16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires our Senior Executives and directors, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC reports of ownership of our securities and changes in reported ownership. Officers, directors and greater than 10% shareholders are required by SEC rules to furnish us with copies of all Section 16(a) reports they file. Based solely on a review of the reports furnished to us, or written representations from reporting persons that all reportable transactions were reported, we believe that except for one Form 4 filing reporting an equity award from WPG to Mr. Niles C. Overly, a WPG external director, all Section 16 filing requirements for WPG’s remainingincumbent directors and Senior Executives (including any former Senior Executives and directors who served during 2015)2020) were complied with on a timely basis during our fiscal year ended December 31, 2015.2020.
Governance Principles
The Board has adopted a set of Governance Principles to assist it in guiding our corporate governance practices. The Governance Principles are from time-to-time re‑evaluated by the Governance and Nominating Committee in light of changing circumstances in order to continue serving our best interests and the best interests of our shareholders. Our Governance Principles are available on the Corporate Governance page of the InvestorsInvestor Relations section of our website at www.wpglimcher.com.www.washingtonprime.com, or by requesting a copy in print, without charge, by contacting our Corporate Secretary at 180 East Broad Street, Columbus, Ohio 43215.
Code of Ethics
We have adopted a Code of Business Conduct and Ethics, which we refer to herein as the code of conduct, that requires all business activities of the Company to be conducted in compliance with all applicable laws, regulations and ethical principles and values. All of our directors, officers and employees are required to read, understand and abide by the requirements of the code of conduct.
The code of conduct is accessible on the Corporate Governance page of the Investors section of our website at www.wpglimcher.com.www.washingtonprime.com. Any amendment to, or waiver from, a provision of the code of conduct may be granted only by an employee’s immediate supervisor and only after advance notice to, and consultation with, the Company’s General Counsel, or in those instances required by the code of conduct, the Chief Executive Officer.Officer of the Company. Waivers involving any of our executive officers or directors may be made only by the Audit Committee, and all waivers granted to executive officers and directors will be disclosed to our shareholders as required under applicable law and regulations. Our General Counsel, who is responsible for overseeing, administering, and monitoring the code of conduct, reports to the Chief Executive Officer with respect to all matters relating to the code of conduct.
Procedures by Which Shareholders May Recommend Nominees For Director
WPG last disclosed the procedures and process by which shareholders may recommend nominees for director in its proxy statement for its 20142020 annual meeting of shareholders and since that filing there have been no material changes to these procedures or processes.
Audit Committee
The Board has a separately-designatedseparately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee assists the Board in monitoring the integrity of our financial statements, the qualifications, independence and performance of our independent registered public accounting firm, the performance of our internal audit function and our compliance with legal and regulatory requirements. The charter of the Audit Committee is available on the Corporate
Governance page of the Investors section of our website at www.wpglimcher.com,www.washingtonprime.com, or by requesting a copy, in print, without charge by contacting our Corporate Secretary at 180 East Broad Street, Columbus, Ohio 43215. As of the date of this Amendment, the Audit Committee is comprised of Messrs. Conforti (Chairman), Overly,Dillon, Levy and White.Ms. von Blucher. The Board has determined that each of Messrs. Conforti, OverlyDillon, Levy and WhiteMs. von Blucher is financially literate under NYSENew York Stock Exchange (“NYSE”) rules and that Mr. WhiteLevy qualifies as an “audit committee financial expert” as defined by SEC rules.rules and served in that role for all of 2020.
Item11.Executive Compensation
Summary Compensation Discussion and AnalysisTable & Other Supporting Tables
Overview
The year 2015 was a transformative year for our company which was reflected in nearly every aspect of our businessfollowing tables and operations. We completed the Merger on January 15, 2015 (the “Merger Closing Date”) which increased the size of our companyaccompanying footnotes set forth certain information with respect to properties ownedthe cash and operated, personnel, and our national footprint. Our management team also evolved in connection withother compensation paid or accrued by the Merger as well as throughout 2015. From an executive compensation perspective the components of our program generally remained the same from 2014, except that we adopted a formal planCompany for our bonus compensation and incorporated corporate performance objectives into both our equity incentive compensation and bonus compensation that compliment the individual performance objectives used to determine equity and bonus compensation. In connection with the Merger, inducement equity awards and special performance equity awards were used to incentivize the management team from Glimcher to join the new combined company. The inducement awards vest on the passage of time. The special performance equity awards are market-based, with shares earned based on total shareholder return (“TSR”), subject to additional time-based vesting. We also continued our practice of having annual equity-based awards and maintained the use of long-term incentive plan units (“LTIP Units”) as our currency.
As referenced above, our management team evolved throughout 2015. In connection with the consummation of the Merger, our pre-merger Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) assumed new roles within our company and the Glimcher CEO and CFO assumed those roles in the new post-merger combined company. Our pre-merger CEO became our Executive Chairman at the Merger Closing Date and eventually by the end of 2015 transitioned to the role of non-executive Chairman of the Board. Compensation disclosure is also provided in this section for our current Chief Operating Officer and also our Chief Accounting Officer. We will also discuss in this Compensation Discussion and Analysis (“CD&A”), the compensation of two other executive officers who were with our company pre-merger or joined shortly thereafter, but separated at the end of 2015most highly compensated Senior Executives, referred herein to as well as another Glimcher executive officer who joined us as a result of the Merger as our Executive Vice President, Director of Leasing. Unless otherwise indicated, we will refer to the persons listed in the compensation tables that follow this CD&A as the “Named Executives” on a collective basis or individually as a “Named Executive.”
This CD&A describes our executive compensation philosophy, objectives and policies for 2015 on a general basis and as applied to the Named Executives. We first highlight some of our business and operational accomplishments in 2015 for which we will discuss in this CD&A the awards and compensation for such accomplishments. We then describe the objectives of our compensation program for the Named Executives, as well as executive compensation generally,for fiscal years ended December 31, 2020 and provide an overview of what our executive compensation program is designedDecember 31, 2019. All values stated are rounded to rewardthe nearest dollar.
SUMMARY COMPENSATION TABLE
Name and Principal Position | Year | | Salary ($) | | | Stock Awards(1) ($) | | | Non-Equity Incentive Plan Compensation(2) ($) | | | All Other Compensation ($) | | | Total(6) ($) | |
| (a) | (b) | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | |
| Louis G. Conforti | 2020 | | $825,577 | | | $2,583,014 | | | $876,202 | | | $25,685 (3) | | | $4,310,478 | |
| CEO and Director | 2019 | | $900,000 | | | $5,627,500 | | | $590,625 | | | $24,449 | | | $7,142,574 | |
| Mark E. Yale | 2020 | | $482,538 | | | $516,625 | | | $415,790 | | | $28,206 (4) | | | $1,443,159 | |
Executive Vice President and Chief Financial Officer | 2019 | | $512,500 | | | $558,925 | | | $280,273 | | | $27,166 | | | $1,378,864 | |
| Robert P. Demchak | 2020 | | $376,616 | | | $430,496 | | | $389,423 | | | $12,366 (5) | | | $1,208,901 | |
| Executive Vice President, General Counsel and Corporate Secretary | 2019 | | $400,000 | | | $465,776 | | | $262,500 | | | $11,830 | | | $1,140,106 | |
| (1) | With respect to fiscal year 2020, the values represented for the applicable Named Executive are the aggregate grant date fair value computed in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation (“FASB ASC Topic 718”) for the fiscal year 2020 annual equity awards (“2020 Annual Awards”). The grant date fair values for the 2020 Annual Awards are, with respect to the allocated performance share units (“PSUs”), based on the probable outcome of the performance conditions of the PSUs on the grant date (maximum achievement) for financial statement reporting purposes under FASB ASC Topic 718 and consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, excluding the effect of estimated or actual forfeitures. The assumptions used in determining the listed valuations are provided in Part IV of the Original Filing of the Form 10-K in Item 15 entitled “Exhibits and Financial Statement Schedules” in note 8 of the notes to consolidated financial statements. |
| (2) | The listed amounts for fiscal year 2020 represent cash bonus awards received by the respective Named Executive pursuant to the terms of the 2020 Executive Bonus Plan (the “Bonus Plan”). |
| (3) | The listed amount represents the following: (a) $1,806 in life insurance premiums paid by WPG, (b) $11,400 in matching contributions made or credited by WPG for fiscal year 2020 under the Washington Prime Group Retirement Savings Plan (the “WPG Savings Plan”) for Mr. Conforti’s benefit and (c) $12,479 that represents Mr. Conforti’s personal use of a WPG provided vehicle. |
| (4) | The listed amount represents the following: (a) $1,806 in life insurance premiums paid by WPG, (b) $15,000 paid by WPG to Mr. Yale during fiscal year 2020 as reimbursement, per the terms of Mr. Yale’s employment agreement (the “Yale Agreement”), for premiums paid by Mr. Yale during 2020 for disability and life insurance covering him and (c) $11,400 in matching contributions made or credited by WPG for fiscal year 2020 under the WPG Savings Plan for Mr. Yale’s benefit. |
| (5) | The listed amount represents the following: (a) $966 in life insurance premiums paid by WPG and (b) $11,400 in matching contributions made or credited by WPG for fiscal year 2020 under the WPG Savings Plan for Mr. Demchak’s benefit. |
| (6) | For each Named Executive, the amount listed represents the aggregate total of the amounts listed in columns (c) through (f). |
Narrative to Summary Compensation Table
Executive Employment Agreements and recognize. Following this discussion, we will review theOther Arrangements
The primary elements of our executive compensation program and the relationship of each element to our compensation objectives. As we discuss each element of compensation and our reasons for choosing to pay the particular element, we will also discuss:
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(i) | how we generally determined the payment amount for the particular element of compensation; |
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(ii) | how our decision regarding that element fits into one or more of our overall objectives for our executive compensation program; and |
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(iii) | how decisions about the particular element of compensation affects, if at all, our decisions regarding other compensation elements. |
We conclude our discussion with a brief overview of our stock ownership guidelines and restrictions, tax and accounting implications of our executive compensation program, and a discussion of the impact or influence on our compensation philosophy and programs of previous shareholder voting results on executive compensation. Unless otherwise stated, references in this section to data in the Summary Compensation Table are only with respect to the year 2015.
2015 Business Highlights
In addition to completing the Merger, we realized a number of other financial and non‑financial achievements in 2015, including:
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† | Completion in June 2015 of a joint venture with O’Connor Capital Partners (“O’Connor”) which involved five of the Company’s properties and resulted in $430 million of net proceeds and approximately $800 million in consolidated debt reduction. |
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† | Repayment in June 2015 of the $1.2 billion bridge loan (the “Bridge Loan”) that was part of the Merger financing package. |
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† | Completion of over $800 million in multi-year unsecured financings. |
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† | Completion of an inaugural $250 million bond offering. |
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† | Solidified plan in November 2015 to transition the properties managed by Simon at the Merger Closing Date onto the Company’s operational platform by May 2016. |
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† | Achieved at 2015 year-end net debt to EBITDA ratio of approximately 7.0x. |
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† | Consolidated by the end of 2015 the Company’s leadership teams in Columbus, Ohio and Indianapolis, Indiana and hired all key senior leadership positions. |
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† | Redeemed in April 2015 all of the outstanding 8.125% Series G Cumulative Redeemable Preferred Shares of Beneficial Interest. |
Objectives of Our Executive Compensation Program
The goal of our executive compensation program is to provide compensation that is equitable to both the executive officer and our company and is competitive with compensation provided to similarly-situated executives at peer real estate investment trusts (“REITs”). Throughout 2015, although no formal market benchmarking was done with respect to our 2015 executive compensation, the Compensation Committee’s decision-making and planning with respect to the Company’s executive compensation was guided by the following objectives:
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† | to pay for performance based upon financial results of our company, the performance of our shares over time, and the executive’s leadership and contributions to our company; |
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† | to provide incentives to focus performance on both near‑term and long‑term goals of our company; |
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† | to attract and retain senior executive officers who are important to the success of our company by awarding compensation that is tied to continued long‑term employment; and |
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† | to encourage executive ownership of our Common Shares over the course of their employment, aligning executive interests with those of our shareholders. |
Although the Compensation Committee’s decisions were guided by the aforementioned objectives in making its decisions during 2015 regarding our executive compensation, the Compensation Committee neither weighted nor ranked these objectives with any particular importance when making these decisions.
What Our Executive Compensation Program is Designed to Reward
Our executive compensation program is designed to reward the operating performance of our company and the individual performance of our executive management team members.
(i) Company Operating Performance
Our company is a REIT that primarily owns, leases, acquires, develops, and operates shopping malls and community shopping centers. In order to maintain WPG’s REIT status, we must distribute at least 90% of our ordinary taxable income to WPG’s shareholders. We use Funds From Operations, or FFO, as a supplemental metric to net income to measure our operating performance. FFO is the commonly accepted and recognized measure of operating performance for REITs by the real estate industry. FFO is defined by NAREIT as net income (or loss) computed in accordance with generally accepted accounting
principles, or GAAP, excluding real estate related depreciation and amortization, excluding gains and losses from extraordinary items and cumulative effects of accounting changes, excluding gains and losses from the sale or disposal of previously depreciated retail operating properties, excluding impairment charges of depreciable real estate, plus the allocable portion of FFO of unconsolidated entities accounted for under the equity method of accounting based upon economic ownership interest. We believe that per share growth in FFO is an important factor in enhancing shareholder value. Therefore, a component of our executive compensation program is designed to reward achievement of our company’s year-end FFO goals. Although FFO is partly influenced by market forces that are beyond our control, we feel that our Senior Executives, including the Named Executives, have the greatest opportunity to influence performance in this area. Therefore, we base a large portion of their total cash compensation on an evaluation of WPG’s annual FFO results. FFO does not represent cash flow from our operating activities in accordance with GAAP and our FFO may not be directly comparable to similarly titled measures reported by other REITs. Moreover, FFO should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions. Our executive bonus plan uses FFO performance targets to determine a portion of each Named Executive’s annual bonus. As we will discuss in greater detail in the section below captioned 2015 Annual Incentive Cash Bonus Plan, fifty percent (50%) of a Named Executive’s total target bonus opportunity under the Executive Bonus Plan is used to determine the portion of the bonus based upon an evaluation of WPG’s annual FFO results on a per diluted common share (the “Common Shares” or “Common Stock”) as adjusted basis. We calculate WPG’s reported FFO (with adjustment for non-recurring items such as Merger-related expenses) per Common Share for reporting purposes by dividing WPG’s FFO by the weighted average number of diluted Common Shares outstanding for the fiscal year which WPG’s per Common Share FFO is being determined. We also use TSR as an additional metric to measure corporate performance in connection with determining executive compensation as explained in greater detail below under the section captioned Equity Compensation.
Some other factors that we use to measure our operating performance include occupancy levels at our core properties, comparable net operating income growth at our core properties, property sales and acquisitions, initiation or completion of development or redevelopment projects, managing our leverage or indebtedness, and completed joint venture or partnering initiatives. These factors2020 are generally used for individual goals or objectives because the completion of goals or objectives of this nature are generally heavily influenced by the actions of a particular Senior Executive, department, or functional area within our company.
(ii)Company Strategic Performance
Our Company’s strategic performance is rewarded through our annual cash bonus and our annual equity awards based upon the Compensation Committee’s assessment of the Company’s performance compared to our corporate strategic objectives (the “Strategic Objectives”). The strategic objectives are reviewed and approved annually by the Compensation Committee at the time the annual cash bonus plan and annual equity awards are approved, typically in the first fiscal quarter of the performance period. For 2015, our Strategic Objectives were the following:
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A. | Progress towards moving off theSimon platform no later than May 2016;
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B. | Consummation of the Company’s joint venture transaction with O’Connor; |
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C. | Successful refinancing of the Bridge Loan; |
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D. | Achieving a specified net debt-to-equity ratio; |
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E. | Building a solid organizational structure; and |
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F. | Analysis, evaluation and initiation of growth opportunities. |
The Company believes achievement of strategic objectives are critical to long-term value creation and as such, are critical to aligning the interests of executives with our shareholders, and with the long-term success of the organization.
(iii) Individual Performance
Our executive compensation program also rewards individual performance. Individual performance is rewarded through base salary and performance-based or variable compensation. Through base salary, the specific skill set and managerial abilities of an executive are rewarded. With respect to performance-based or variable compensation, individual performance is evaluated and rewarded based primarily upon an assessment of the executive’s achievement of predetermined individual objectives that
are linked to our overall corporate goals. Generally, individual objectives of the executives differ for each officer and are established prior to or near the beginning of the evaluation year in connection with the adoption of the executive bonus plan for that year. For the 2015 performance year, except for Messrs Ordan and Glimcher, each of the Named Executives had five (5) individual objectives. Messrs. Ordan and Glimcher each had eight (8) individual objectives. Bonus awards for individual performance were granted under the Company’s 2015 executive bonus plan.
(iv) Company Market Performance
Through our equity compensation awards, our executive compensation program rewards TSR. TSR is used to ensure alignment of executive interests with those of our shareholders. Pursuant to our special performance equity awards made both after the Merger, and for some Named Executives, prior to the Merger in 2014, relative (compared to an index of REITs) and absolute TSR is measured in determining the number of LTIP Units earned over the respective performance period. The Company believes that over time, TSR provides the most appropriate measure of shareholder success and as such, is a critical tool in our pay-for-performance program.
Executive Employment Arrangements & the Elements of Compensation Within Our Executive Compensation Program
In addition to our formal compensation and benefit plans which are an important component of our executive compensation program, the primary elements of our program – salary, equity compensation, bonus/incentive compensation, and severance/change in control arrangements. These arrangements – are governed by the employment agreements we had with the Named Executives during 2020. The employment arrangements for each of the Named Executives were entered into at different times and under different circumstances.
Employment Agreement for Mr. Louis G. Conforti
Mr. Conforti’s employment by WPG is pursuant to an Amended and Restated Employment Agreement between Mr. Conforti and WPG, dated October 6, 2016, which was amended on August 2, 2019 (the “Conforti Agreement”). The Conforti Agreement provides that Mr. Conforti will serve as the Company’s CEO for a term ending on August 2, 2024 (the “Employment Period”) unless the Employment Period is earlier terminated pursuant to the Conforti Agreement’s terms. Provided there is not an early termination of the Conforti Agreement, on August 2, 2024 and each annual anniversary of such date thereafter (such date and each annual anniversary thereof, a “Renewal Date”), the Employment Period shall automatically extend so as to terminate one year from such Renewal Date unless, at least 120 days prior to the Renewal Date, either party to the Conforti Agreement gives written notice to the other that the Employment Period shall not be so extended. The Conforti Agreement describes, among other things, Mr. Conforti’s salary, cash incentive, equity, severance, and change in control compensation. The Conforti Agreement retains Mr. Conforti’s annual base salary at Nine Hundred Thousand Dollars ($900,000) subject to review by the Board’s Compensation Committee for adjustment at least annually (“Conforti Base Salary”). Additionally, the Conforti Agreement provides that Mr. Conforti is eligible for an annual cash bonus pursuant to the terms of the Company’s annual cash incentive plan as in effect from time to time. Under the Conforti Agreement, Mr. Conforti’s target annual bonus shall be 150% of the Conforti Base Salary (“Bonus Target”) with the actual bonus payment ranging from 0% to up to 200% of the Bonus Target based upon the level of achievement of performance goals established under the respective bonus plan at the discretion of the Compensation Committee. The terms of the Conforti Agreement relating to the performance bonus are satisfied by the terms, conditions and operation of the Bonus Plan. With respect to annual equity compensation awarded to Mr. Conforti, Mr. Conforti is eligible to receive restricted stock units (“RSUs”), PSUs or other arrangements we currently haveequity-based long term incentives as deemed appropriate by the Compensation Committee considering competitive market compensation opportunities, Mr. Conforti’s performance and other relevant factors the Compensation Committee deems appropriate. The Conforti Agreement also provided for Mr. Conforti’s special equity award made in August 2019 (the “CEO Special Award”) in connection with Named Executives still employed with usits execution. The terms of the Conforti Agreement that address severance and change in control compensation require that, if during the Employment Period (including any renewals thereof): (a) the Company terminates Mr. Conforti’s employment for cause (as defined in the Conforti Agreement), for any reason other than cause, or had withas a result of Mr. Conforti’s death or disability (as defined in the Conforti Agreement); or (b) Mr. Conforti terminates his employment for good reason (as defined in the Conforti Agreement) or without good reason, then the Company shall pay to Mr. Conforti (or his estate) certain Named Executives whosecash payments and provide other specified benefits. Lastly, in the event of a change in control (as defined in the Conforti Agreement) of the Company, the Conforti Agreement permits the accelerated vesting of certain equity awards held by or earned by Mr. Conforti subject to the satisfaction of certain conditions and, in the event that Mr. Conforti’s employment wasis terminated atupon or within two years following a change in control, then the endCompany shall pay and provide to Mr. Conforti, as applicable, certain cash payments and specified benefits. The material terms of 2015Mr. Conforti’s severance and change in control compensation and benefits under the Conforti Agreement is explained more fully in the section of this Amendment entitled “Potential Payments upon Termination or shortly thereafter.Change in Control.”
This CD&A and the tables that follow will describe compensation arrangements under employment agreements we have with
Employment Agreements for Messrs. Michael P. Glimcher, our Vice Chairman and Chief Executive Officer, Mark E. Yale and Robert P. Demchak
The amended and restated employment agreements for Messrs. Yale and Demchak describe the annual base salary, cash incentive, equity, severance, and change in control compensation for each. Generally, the agreements are comparable in terms of structure and scope with the principal differences being the specific terms for the aforementioned elements of compensation for each executive. Under the Yale Agreement, he is to serve as the Executive Vice President and Chief Financial Officer of the Company and Keric M. “Butch” Knerr, the Company’s Executive Vice President and Chief Operating Officer, and conditional offer letters of employment executed by Mr. Thomas J. Drought, Jr., our Executive Vice President, Director of Leasing, and Ms. Melissa A. Indest, the Company’s Senior Vice President, Finance and Chief Accounting Officer. Also, the now terminated employment agreements with former executives Mr. C. Marc Richards, the Company’s former Chief Financial Officer and former Executive Vice President and Chief Administrative Officer, and Ms. Farinaz S. Tehrani, the former Executive Vice President, Legal and Compliance, governed the compensation each received during 2015. Mr. Mark S. Ordan, our current Chairman of the Board and the former Chief Executive Officer and Executive Chairman, had an employment agreement with us until his employment termination date of December 31, 2015 after which the Consulting Agreement became effective on January 1, 2016. Lastly, Mr. Michael Gaffney, our former Executive Vice President, Head of Capital Markets, also had an employment agreement with usfor a term that terminated in connection with his terminationended on December 31, 2015 and he also entered into a Transition and Consulting Agreement with the Company which became effective January 1, 2016.
The2020. Similarly, Mr. Demchak’s employment agreements for Messrs. Glimcher and Yale were separately entered into prior to the Merger Closing Date in the fall of 2014 to recruit and retain the services of Messrs. Glimcher and Yale following the Merger Closing Date. Each agreement was ratified by the compensation committee of the Company’s predecessor board of directors and became effective on the Merger Closing Date. Mr. Glimcher’s agreement is forprovides an initial term of five years and Mr. Yale’s agreement has an initial term of three years. Each agreement has automatic one year renewals at the end of the initial term and each year thereafter unless at least 120 days, in the case of Mr. Glimcher, or 30 days, in the case of Mr. Yale, prioremployment for him to the renewal date either party to the respective agreement gives written notice to the other of non-renewal. Each agreement, as will be further explained later in this CD&A, sets forth their title, duties, reporting structure and provides for an annual salary, bonus compensation opportunity, long-term equity compensation opportunity, severance/termination compensation, and eligibility for benefits. Mr. Glimcher’s employment agreement was amended in 2015 in connection with Mr. Ordan’s transition from Executive Chairman to non-executive Chairman, to change the reporting structure, but no changes to compensation were made at that time. With respect to Mr. Knerr, his employment agreement was executed in September 2014 in connection with his electionserve as Executive Vice President, General Counsel and Chief Operating Officer. Mr. Knerr’sCorporate Secretary of the Company that ended on December 31, 2020. The renewal terms of each of these agreements have commenced and each agreement has a three year term with automaticshall automatically renew on each December 31st for another one year renewals at the endperiod unless either party provides written notice of the initial term and each year thereafter unless at least 30non-renewal by or before 120 days prior to the renewal date either partydate. If no such notice is given, the employment period shall be extended for another one year period.
The annual base salaries for Messrs. Yale and Demchak are initially set and then each is subject to review by the agreement gives written notice to the other of non-renewal. Similar to Messrs. Glimcher and Yale’s agreements, Mr. Knerr’s agreement sets forth his title, duties, reporting structure and providesCompensation Committee for adjustment at least annually. Each executive was eligible for an annual base salary rate, targetcash bonus opportunity, makes Mr. Knerr eligible to participate in the Company’s long-term equity compensation program,2020, and establishes payments payable upon separation or a change in control.
With respect to Mr. Drought and Ms. Indest, each has a conditional offer letter of employment from WPG, each dated as of January 9, 2015 (each an “Offer Letter” or the “Offer Letters”), and which became effective on the Merger Closing Date. The letters establish at-will employment between WPG and Ms. Indest and Mr. Drought. Similar toyear thereafter, during the employment agreements discussed above, the letters for both Ms. Indest and Mr. Drought, establish their respective titles and duties, reporting structure, set an annual base salary rate, bonus compensation, long-term equity compensation, benefits, inducement equity awards granted upon closing of the Merger, and severance compensation.
Similar to Mr. Knerr, Mr. Richards and Ms. Tehrani each had employment agreements with three year terms that operated in much the same way as the employment agreement discussed above for Mr. Knerr. Each agreement terminated in connection with their respective terminations at the end of 2015, although each agreement afforded the respective employee a separation payment in the event of a not for cause termination of employment, as defined in the agreements. In Ms. Tehrani’s case, her separation payment was equal to her annual salary in effect immediately prior to the termination date and, for Mr. Richards, his separation payment was equal to two times the sum of his annual salary in effect immediately prior to the termination date plus his target bonus opportunity for the year in which the termination occurred or if no bonus plan has been adopted for the year in which the termination occurs then such target bonus opportunity in effect for WPG’s most recently completed fiscal year.
Like the other Named Executives, the employment agreements for Messrs. Ordan and Gaffney set their base salary rate and bonus opportunity for 2015. Both Messrs. Ordan and Gaffney entered into post-employment consulting arrangements with the Company after their respective employment terminated at the end of 2015. Generally, the compensation for fiscal year 2015 discussed in this section and reported in the tables that follow was providedperiod pursuant to the terms of Messrs. Ordanthe Company’s annual cash incentive plan as in effect from time to time. Mr. Yale’s target annual bonus shall be 125% of his base salary and Gaffney’s employment agreements. However, for Mr. Ordan,Demchak’s target annual bonus shall be 150% of his base salary. The actual bonus payment in the Consultingcase of each executive may range from 0% to up to 200% of the target bonus based upon the level of achievement of performance goals established under the cash incentive plan in place and, under certain circumstances, subject to the discretion of the Compensation Committee. Similar to Mr. Conforti’s arrangement, the terms of the Yale Agreement governed (i)and Mr. Demchak’s agreement regarding bonus compensation are satisfied by the terms, conditions and operation of the Bonus Plan.
With respect to equity compensation, under which he would remainthe Yale Agreement and Mr. Demchak’s agreement, both executives, respectively, are eligible to receive a bonus award for 2015RSUs, PSUs or other equity-based long term incentives as deemed appropriate by the Compensation Committee considering competitive market compensation opportunities, individual performance (ii) the vesting of his inducement equity awards received in 2014 pursuant to his employment agreement, and (iii) his equity award payout for our 2015 long-term compensation awards. Mr. Gaffney’s employment agreement and equity award agreement provided for his severance benefits upon his termination, namely a separation payment equal to his annual salary in effect on the date immediately preceding his termination date and the acceleration of vesting for his unvested equity incentive compensation awards.
As stated above, the employment agreements and other arrangements we had withrelevant factors the Named Executives during 2015 set the key elements of our executive compensation program that will be discussed in this section. Although not explicitly stated in each agreement or arrangement, generally, these elements are designed to achieve our three most important compensation objectives:
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† | rewarding executives based on financial performance; |
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† | aligning the interests of executives and shareholders; and |
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† | attracting and retaining qualified, experienced executives. |
The table below indicates how each element of our 2015 compensation for the Named Executives is intended to achieve each of the aforementioned objectives.
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Element of 2015
Compensation | Rewarding
Performance | Aligning
Interests | Attracting
and
Retaining | Comments/Summary |
Base Salary
| | | X | Set by terms of employment agreement or Offer Letter and may be adjusted by Compensation Committee in its management of executive salary levels. Salaries of Named Executive remained unchanged in 2015 after the Merger Closing Date. |
Annual Cash Bonus
| X | | X | Cash bonus award for 2015 made pursuant to plan in which corporate and individual performance determine payout relative to target award/payment. Generally, eligibility and target award size determined by employment agreement or Offer Letter. Terms of plan permit Compensation Committee to exercise some element of discretion in determining bonus payout. |
Inducement Equity Awards | | X | X | Inducement equity awards made in 2015 are one‑time awards that represent a portion of the financial commitment used to recruit and retain certain Named Executives following the Merger, as set forth in their employment agreements. The awards feature time‑based vesting over four years, thereby aligning the interests of the particular Named Executives with Company shareholders and creating an immediate retention incentive.
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Special Performance-Based Equity Awards | X | X | X | Special performance‑based equity awards represent a portion of the financial commitment we made to certain Named Executives during 2015 following the Merger. Terms of recipients’ employment agreements determined award size. These awards have a performance‑based absolute and relative TSR vesting conditions over three overlapping performance periods which immediately created a long-term financial interest in the Company which is only realized through TSR performance.
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Annual Long-Term Incentive Equity Awards | X | X | X | Our annual long-term incentive equity awards are a key part of our competitive annual compensation package for executives. The annual awards provide an opportunity for executives to earn equity based on WPG’s relative TSR performance and through achievement of key strategic objectives that ultimately support long-term value creation. The intent is for the awards to align the interests of recipients with value creation and share ownership.
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Termination Payments and Change in Control Benefits | | X | X | Provide protection against a termination of employment outside of the executive’s control and to serve as a financial bridge between employment. Change in control benefits mitigate Company risk in the event of a potential transaction that may directly impact an executive’s employment. These financial protections allow executives to focus on the transaction and further align executives’ interests with those of shareholders. Legacy arrangements from Glimcher were amended for certain Named Executives to provide benefits not included in the employment agreements or Offer Letters. |
Perquisites and Other Benefits
| | | X | Executive officers are entitled to participate in our 401(k) retirement plan, medical insurance plan, disability plans and other benefits on the same basis as other salaried employees. As with other salaried employees, these benefits are provided as part of pay package, to improve employee health and well‑being and to comply with government regulations. Oversight of the Compensation Committee is also provided, as applicable. |
2015 Salary Compensation
The 2015 base salaries for our Named Executives in all cases were set either pursuant to the Named Executive’s employment agreement with the Company or Offer Letter. Amendments executed in fiscal year 2014 to the employment agreements for Messrs. Ordan and Richards became effective on the Merger Closing Date and, among other things, changed their salaries to reflect the new positions each assumed in our Company on the Merger Closing Date. The base salaries for the Named Executives as of the end of 2015 are listed below along with the portion of the base salary each Named Executive received during 2015 (all amounts are rounded to the nearest dollar).
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Named Executives | 2015 Annual Base Salary | | 2015 Base Salary Earned |
| Mr. Michael P. Glimcher | $825,000 | | $828,690 |
| Mr. Mark E. Yale | $500,000 | | $500,000 |
| Mr. Keric M. “Butch” Knerr | $495,000 | | $494,998 |
| Mr. Thomas J. Drought, Jr. | $425,000 | | $424,050 |
| Ms. Melissa A. Indest | $285,000 | | $282,442 |
| Transitioning & Former Executives | | |
| Mr. Mark S. Ordan | $825,000 | | $825,000 |
| Mr. C. Marc Richards | $450,000 | | $450,000 |
| Ms. Farinaz S. Tehrani | $375,000 | | $343,269 |
| Mr. Michael Gaffney | $350,000 | | $342,308 |
The salaries earned for 2015 by some of the Named Executives reflect a pro‑rated portion of their annual base salaries based upon the person’s period of employment with us following the Merger Closing Date. Salary amounts also include salary compensation received during the fourteen days of 2015 preceding the Merger Closing Date.
The Compensation Committee may review annual base salaries each year and modify them from timedeems appropriate. With respect to time to address market comparability, change in responsibilities, or intracompany pay equity concerns. During fiscal year 2015, our current Chief Executive Officer and former Executive Chairman each had, respectively, the highest salary compensation amongst the Named Executives because of their management and oversight responsibilities. These differences in compensation are also reflected in our bonus, equity incentive opportunities,severance and change in control arrangements for the same reasons.The amount of a Named Executive’s 2015 annual base salary was not affected or influenced by the amount of any other compensation, element within our executive compensation program. However, annual paid or earned salary is a variable used in the formula to determine Named Executives’ annual performance bonus target and the initial cash value of Named Executives’ annual awards of LTIP Units. Annual base salary is a variable in the formula to determine parts of certain Named Executive’s particular severance or change in control payout under our executive severance arrangements. Salaries earned by the Named Executives for fiscal year 2015 are reflected in column (c) of the Summary Compensation Table and account forapproximately12% to 26% of a Named Executive’s total annual compensation reported in the Summary Compensation Table.
2015 Annual Incentive Cash Bonus Plan
The annual cash bonuses for our Senior Executives, including the Named Executives, are designed to further our executive compensation objectives of providing performance-based compensation by motivating the Senior Executives to achieve our company’s corporate goals and objectives and rewarding such achievement. Like our annual bonus awards for fiscal year 2014, the annual cash bonuses for fiscal year 2015 performance are cash payments awarded during our first fiscal quarter following the end of the respective performance year. The amount of the 2015 bonus payment for our Senior Executives, including the Named Executives, is for performance during 2015, determined based upon the terms and conditions of the 2015 WPG Executive Bonus Plan (the “2015 Plan”). The 2015 Plan is the only compensation plan from which the Named Executives can receive cash incentive compensation for performance during 2015. The Compensation Committee approved the participants for the 2015 Plan as well as the terms and conditions of the 2015 Plan. Actual award payouts under the 2015 Plan vary amongst the plan participants, including the Named Executives, and are ultimately approved by the Compensation Committee.
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(i) | The Structure of the 2015 Plan |
The 2015 Plan is funded if a specified threshold level of FFO per diluted Common Share, as adjusted and more fully described below, is achieved by WPG for fiscal year 2015. The payment of actual bonus awards under the 2015 Plan is based on an assessment of the achievement of the performance goals as described in this section. If actual FFO per diluted Common Share, as adjusted, is below the threshold level, the 2015 Plan is not funded and no bonuses are paid to any 2015 Plan participants including the Named Executives.
The respective employment agreements and Offer Letters for each Named Executive require each to be eligible for an annual bonus with a target bonus award opportunity at a certain percentage or within a range of percentages (“Target Bonus Multiplier”) of either the respective Named Executive’s annualized base salary or base salary which under the 2015 Plan is construed to mean actual paid base salary. The Target Bonus Multiplier for the Named Executives ranges from 75% to 200% of actual paid base salary. Additionally, for our Chief Executive Officer, the actual bonus awarded to him under the 2015 Plan cannot exceed 300% of his actual base salary earnings for fiscal year 2015. Under the 2015 Plan, the target bonus award opportunity for each participant is the sum of bonus targets for: (A) our year-end FFO per diluted Common Share performance, (B) the Company’s performance on the Strategic Objectives, and (C) achievement on individual goals (the “Individual Objectives”). The 2015 Plan is structured in this manner so that we may reward both individual achievement and corporate achievement in furtherance of our compensation objective to provide performance-based compensation and reward the type of achievement that our executive compensation program is designed to reward. An individual’s actual bonus payment is the sum of three components: (1) the portion of the payment based on the review and evaluation of our Company’s year-end FFO performance (the “FFO Component”), (2) the portion of the payment based on the 2015 Plan participant’s overall achievement of the person’s Individual’s Objectives (the “Individual Objectives Component”), and (3) the portion of the payment based on the Company’s achievement on Strategic Objectives (the “Strategic Objectives Component”).
Under the terms of the 2015 Plan, the fiscal impact, whether positive or negative, of certain unanticipated or unplanned factors or events not contemplated in the Company’s fiscal year 2015 consolidated corporate budget shall be excluded from the calculation of WPG’s year-end FFO per diluted Common Share metric used to determine payout amounts for FFO performance under the 2015 Plan. Specifically, for purposes of the 2015 Plan, FFO per diluted Common Share was adjusted to exclude Merger and/or transaction related costs. Other categories of factors enumerated under the 2015 Plan the impact of which may be excluded or disregarded in determining the Company’s 2015 fiscal year end FFO per diluted Common Share include: (A) non-cash asset write downs or impairments and (B) the financial impact of charges and expenditures associated with the early extinguishment of debtYale Agreement and the discontinuation of certain transactions or pre-development and development projects. Theagreement for Mr. Demchak are comparable to the terms of the 2015 Plan authorizeConforti Agreement and are more fully discussed in the Compensation Committeesection of this Amendment entitled “Potential Payments upon Termination or Change in Control.”
Fiscal Year 2020 Salary Modifications
In April 2020, the Company, as part of measures to use its discretionreduce overall Company expenses in response to reject anythe novel coronavirus (COVID-19) global pandemic, executed letter agreements (the “Amendments”) that amended the respective employment agreements of the aforementioned adjustments described above in approving the final payout amount for the FFO Component of the bonus payment. The terms of the 2015 Plan also empower the Compensation Committee to use its discretion to make any other adjustments they believe are appropriate in approving the final bonus payout amount for the Company’s 2015 FFO performance.
In determining the FFO Component, Individual Objectives Component, and Strategic Objectives Component that comprise a 2015 Plan participant’s bonus payment, the following bonus targets must initially be determined: (A) Target Bonus Payout Amount, (B) FFO Target Amount, (C) Individual Objectives Target Amount, and (D) Strategic Objectives Target Amount. A Named Executive’s Target Bonus Payout Amount is a stated percentage of their actual base salary earnings paid during fiscal year 2015. The Named Executive’s FFO Target Amount is 50% of the person’s respective Target Bonus Payout Amount, the Individual Objectives Target Amount is 25% of the Target Bonus Payout Amount, and the Strategic Objectives Target Amount is 25% of the Target Bonus Payout Amount. The Compensation Committee structured the 2015 Plan in this manner in order to make the majority of a Named Executive’s bonus award opportunity impacted by WPG’s overall FFO performance and corporate achievement of strategic goals. Additionally, the structure of the 2015 Plan is similar to the bonus plan for Glimcher and is a by-product of our Merger integration efforts. The Target Bonus Payout Amount, FFO Target Amount, Individual Objectives Target Amount, and Strategic Objectives Target Amount do not represent bonus payment amounts under the 2015 Plan, but instead represent targets used in calculating the actual bonus payment amount for 2015 Plan participants,executive officers, including each Named Executive, depending upon the level of individual and corporate achievement. As part of the various assessments and evaluations performed in connection with determining an annual bonus payment for a 2015 Plan participant, the Compensation Committee may determine that no payment is earned for the Individual Component, FFO Component, or Strategic Objectives Component of the actual bonus award.
The Target Bonus Payout Amount, FFO Target Amount, Individual Objectives Target Amount, and Strategic Objectives Target Amount for each of the Named Executives, to temporarily reduce the fiscal year 2020 annual base salaries of such officers. The Named Executives’ base salaries were modified as follows: (i) Mr. Conforti’s base salary was reduced by 25% from $900,000 to $675,000; (ii) Mr. Yale’s annual base salary was reduced by 20% from $512,500 to $410,000; and (iii) Mr. Demchak’s annual base salary was reduced by 20% from $400,000 to $320,000. The salary reductions under the 2015 Plan are listed in the table below (amounts are rounded to the nearest dollar):
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Named Executive | Target Bonus Payout Amount (Target Bonus Multiplier of actual salary earnings) | FFO Target Amount (50% of Target Bonus Payout Amount) | Individual Objectives Target Amount (25% of Target Bonus Payout Amount) | Strategic Objectives Target Amount (25% of Target Bonus Payout Amount) |
| Mr. Glimcher | $1,657,380 (200% of actual base salary earnings) | $828,690 | $414,345 | $414,345 |
| Mr. Yale | $625,000 (125% of actual base salary earnings) | $312,500 | $156,250 | $156,250 |
| Mr. Knerr | $866,247 (175% of actual base salary earnings) | $433,123 | $216,562 | $216,562 |
| Mr. Drought | $424,050 (100% of actual base salary earnings) | $212,025 | $106,012 | $106,013 |
| Ms. Indest | $211,832 (75% of actual base salary earnings) | $105,916 | $52,958 | $ 52,958 |
| Mr. Ordan | $1,650,000 (200% of actual base salary earnings) | $825,000 | $412,500 | $412,500 |
| Mr. Richards | $675,000 (150% of actual base salary earnings) | $337,500 | $168,750 | $168,750 |
| Ms. Tehrani | $386,178 (112.5% of actual base salary earnings) | $193,089 | $96,544 | $ 96,544 |
| Mr. Gaffney | $342,308 (100% of actual base salary earnings) | $171,154 | $85,577 | $ 85,577 |
The 2015 Plan requires that in order for participants to receive a bonus payment, the participant must be actively employed with the Company (or any affiliate) on the date the bonus payment is approved by the Compensation Committee. The 2015 Plan by its terms authorizes the Compensation Committee to exercise its discretion with respect to bonus payments to 2015 Plan participants in the event of such person’s death, disability, or other intervening circumstance that arises prior to the aforementioned approval date. The Compensation Committee exercised such discretion in approving bonus payments under the 2015 Plan at the Target Bonus Payout Amount shown above for Ms. Tehrani and Messrs. Gaffney and Richards each of whomAmendments were terminated prior to the Compensation Committee approving bonuses under the 2015 Plan. The Compensation Committee reasoned that each was a participant in the 2015 Plan since its adoption, employed with the Company at oreffective until the end of the performance year and contributed, through their respective individual efforts, toCompany’s 2020 third fiscal quarter at which time the Company achieving its year-end goals and objectives. In the remaining discussion on the annual bonus in this section, unless otherwise indicated, all references to the “Named Executives” will exclude Ms. Tehrani and Messrs. Gaffney and Richards.
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(ii) | Determining the Amount of the FFO Component of a Named Executive’s Annual Bonus |
Following the Compensation Committee’s review and evaluation of our year-end FFO performance, the amount of the FFO Component of a Named Executive’s annual bonus under the 2015 Plan is determined using the following scale:
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| Evaluation Levels for Per Common Share FFO Performance |
Bonus Payment Component | Threshold
(Yr. End FFO of $1.72 - $1.76 Per Share)
| Target
(Yr. End FFO of $1.77 Per Share)
| Maximum
(Yr. End FFO of 1.78- $1.85 Per Share and Above)
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FFO Component | 35% - 87% of FFO Target Amount | 100% of FFO Target Amount | 106.3% - 150% of FFO Target Amount |
The FFO targets stated in the chart above were formulated to include the range of our anticipated or forecasted 2015 per diluted Common Share FFO results that were initially announced by our company at the beginning of 2015. Under each level of FFO performance in the 2015 Plan, each year-end FFO per share amount is assigned a percentage used to determine the portion of the FFO Target Amount a participant is eligible to receive based upon the Company’s year-end FFO performance. For example, if we attain a year-end FFO of $1.72 per diluted Common Share then 2015 Plan participants would be eligible to receive 35% of their FFO Target Amount, but if we achieve a year-end FFO of $1.85 per diluted Common Share or above the 2015 Plan participants would be eligible to receive 150% of their FFO Target Amount. The aforementioned examples do not take into consideration any adjustments to our year-end FFO per Common Share amount that would be permitted under the 2015 Plan. As discussed earlier, we believe that measurement of per Common Share FFO is a primary metric in evaluating growth in shareholder value as well as evaluating the management and operation of our underlying business. Per Common Share FFO performance results under the 2015 Plan that occur between threshold, target, and maximum levels will result in a mathematically interpolated payout of the FFO Component.
The 2015 Plan is funded for bonus compensation to be paid because WPG’s adjusted FFO per diluted Common Share results for fiscal year 2015 is $1.91 per Common Share which exceeds the minimum performance level of $1.72 per diluted Common Share under the threshold level. WPG’s adjusted 2015 FFO per diluted Common Share of $1.91 reflects an adjustment for transaction costs relating to the Merger and the amortization of fees on the Bridge Loan of $42.1 million, or $0.20 per diluted Common Share. WPG’s unadjusted reported per Common Share FFO results for 2015 were $1.71. Under the 2015 Plan, per Common Share FFO performance of $1.91 exceeded the maximum performance goal of $1.85 per share, resulting in a payoutbase salary for the FFO Component under the 2015 Plan at the maximum level. The Compensation Committee approved a bonus payout for the FFO Component of 150% of the FFO Target Amount for 2015 Plan participants,respective executive officer, including each Named Executive, still employed or affiliated with the Company on the date of the Compensation Committee’s approval, as shown in the table below (amounts are roundedautomatically reverted back to the nearest dollar):
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Named Executive | FFO Target Amount (50% of Target Bonus Payout Amount) | FFO Component of Annual Bonus (150% of FFO Target Amount) |
| Mr. Glimcher | $828,690 | $1,243,035 |
| Mr. Yale | $312,500 | $ 468,750 |
| Mr. Knerr | $433,123 | $ 649,685 |
| Mr. Drought | $212,025 | $ 318,037 |
| Ms. Indest | $105,916 | $ 158,874 |
| Mr. Ordan | $825,000 | $1,237,500 |
(iii)Determining the Strategic Objectives and Individual Objectives Componentannual rate of a Named Executive’s Annual Bonus
In determining the Strategic Objectives Component of the annual bonus, the Compensation Committee conducted a qualitative assessment of the Company’s performancebase salary in achieving its Strategic Objectives established in connection with the adoption of the 2015 Plan. Under the 2015 Plan, the achievement percentages range from 25% to 150%. Based upon the Compensation Committee’s qualitative assessment of the Company’s aggregate performance on its Strategic Objectives, the achievement percentage attained is applied to a Named Executive’s Strategic Objectives Target Amount to determine the Strategic Objectives Component of the annual bonus award.In establishing the Strategic Objectives, there was no specific weighting or priority placed by the Compensation Committee on or amongst any of the objectives.
In determining the Individual Objectives Component of the annual performance bonus, the Compensation Committee considers the overall performance of the Named Executive on his or her Individual Objectives. Upon the completion of the Named Executive’s performance evaluation, the Named Executive receives an overall achievement percentage that ranges from 25% to 150% and reflects the person’s respective performance on his or her Individual Objectives. This overall achievement percentage is then applied to the Named Executive’s Individual Objectives Target Amount to determine the Individual Objectives Component of the Named Executive’s annual bonus award.
The table below aggregates the Individual Objectives Target Amount and the Strategic Objectives Target Amount for each of the Named Executives and the range of values, or resulting payouts, between the Threshold and Maximum levels of performance for which each Named Executive could qualify to receive (amounts are rounded to the nearest dollar):
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| Overall Performance Evaluation Levels for Strategic Objectives and Individual Objectives |
Named
Executive
| Threshold
(25-99% Achievement Percentage)
| Target
(100%
Achievement Percentage)(1)
| Maximum
(101-150%
Achievement Percentage)
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Mr. Glimcher | $207,172 – $820,403 | $828,690 | $836,977 – $1,243,035 |
Mr. Yale | $ 78,125 – $309,375 | $312,500 | $315,625 – $ 468,750 |
Mr. Knerr | $108,281 – $428,793 | $433,124 | $437,455 – $ 649,686 |
Mr. Drought | $ 53,006 – $209,905 | $212,025 | $214,145 – $ 318,037 |
Ms. Indest | $ 26,479 – $104,857 | $105,916 | $106,975 – $ 158,874 |
Mr. Ordan | $206,250 – $816,750 | $825,000 | $833,250 – $1,237,500 |
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1
| Listed amounts represent the sum of the Named Executive’s respective Individual Objectives Target Amount and Strategic Objectives Target Amount. |
The Compensation Committee assessed the Company’s performance on its Strategic Objectives at the target level of performance based on some of the Company’s corporate achievements described in the section above entitled 2015 Business Highlights. Additionally, with respect to the Company’s Strategic Objective to analyze, evaluate and initiate growth opportunities for the Company, the Compensation Committee assessed that the Company achieved this objective by making measurable progress toward aligning the Company’s operations and assets to achieve growth in net operating income (“NOI”) in line with expectations for fiscal year 2016 justifying an evaluation of this objective at the target level of achievement. Based on aforementioned analysis and assessment, the Compensation Committee approved a bonus payout for the Strategic Objectives Component of 100% of the Strategic Objectives Target Amount for 2015 Plan participants including each Named Executive.
Assessment of the individual performance of 2015 Plan participants is done entirely through evaluating their respective achievement on the individual objectives that each 2015 Plan participant, including the Named Executives, established during the first half of 2015. For the 2015 performance year, except for Messrs Ordan and Glimcher, each of the Named Executives had five (5) individual objectives. Messrs. Ordan and Glimcher each had eight (8) individual objectives. For the 2015 performance year, objectives had a strong nexus to the Company’s Strategic Objectives and generally can be grouped into four categories: (A) Financial Objectives, which generally concern completing or formulating capital or budget plans for the Company, achieving financial or budgetary forecasts, operating the Company within budgeted parameters, managing our debt and liquidity levels sufficiently, and finding new sources or vehicles for capital; (B) Operational Objectives, which generally concern our leasing operations, development/redevelopment activity, and staffing/recruitment of personnel; (C) Merger Integration Objectives, which concern the Company’s post-Merger plans, projects, initiatives, strategies, and goals geared toward integrating the operations of Glimcher into the Company to create an efficient and effective organization; and (D) Functional Objectives, which are such additional objectives relating to a Named Executive’s particular areas(s) of expertise or focus or relating to the department or functional area such person manages within our company. Evaluation of the performance of the Named Executives on their respective Individual Objectives was done by the Compensation Committee with respect to the Company’s former Executive Chairman and current CEO; however, for the other Named Executives, the respective manager or supervisor for such person performed the evaluation. The Chief Executive Officer evaluated the performance of the CFO and Chief Operating Officer. The CFO evaluated the fiscal year 2015 performance of the Chief Accounting Officer and the Chief Operating Officer evaluated the performance of the Executive Vice President, Director of Leasing. The Compensation Committee relied partly upon written evaluations in determining the level of achievement an evaluated Named Executive attained on his or her respective Individual Objectives.
Generally, the Named Executives received between target and maximum achievement on their specific individual objectives; except in a few isolated instances where lower achievement levels were recorded. Also, aggregate individual achievement percentages attained by the Named Executives ranged between approximately 82% and 140%. The individual achievement percentages reflects the aggregate evaluation a Named Executive received on his or her Individual Objectives performance assessment and is applied to the Individual Objectives Target Amount to get the Individual Objectives Component of the annual bonus award. An overview of the assessment for each of the Named Executives follows.
Messrs. Glimcher and Ordan had identical Individual Objectives. Mr. Glimcher, due to his significant day-to-day involvement and managerial responsibilities, achieved a maximum rating with respect to three of his four Financial Objectives as exemplified by delivering a three year strategic plan for the Company eventually approved by the Board; coordinating the payoff of the Bridge Loan and other associating financing that raised the Company’s available liquidity to approximately $700 million; and managing the planning and strategy behind decreasing by the end of 2015 the Company’s net debt to EBITDA ratio to approximately 7.0x. Mr. Glimcher also achieved a maximum evaluation on his Operational Objective and two Merger Integration Objectives as demonstrated by the Company establishing formal internal policies around capital allocation and upgrading the Company’s systems and protocols to sufficiently operate the combined company; completing hiring of senior management personnel; successfully implementing the transition of the WPG legacy properties onto the Company’s operating platform; and implementing a plan ahead of schedule to transition off of the services agreement with Simon. With respect to Mr. Ordan, in light of his transition, Mr. Ordan achieved a target evaluation for all of his objectives except one of his Merger Integration Objectives for which a Maximum assessment was achieved and two other objectives for which no payout was approved because the target achievement relating to the objectives for investor relations (“IR”) outreach and NOI growth were not achieved. Mr. Glimcher’s evaluation and payout for his objectives relating to IR outreach and NOI performance were identical to those for Mr. Ordan.
With respect to the evaluation of Mr. Yale’s five Individual Objectives, four of his five objectives were evaluated at the maximum achievement level. Mr. Yale’s objectives consisted of two Financial Objectives, one Merger Integration Objective and Operational Objective apiece, and one Functional Objective. The Compensation Committee observed that the maximum evaluation for Mr. Yale’s Financial Objectives, Merger Integration Objective, and Operational Objective was supported by: (A) the completion of the three year strategic plan for the Company and its approval by the Board; (B) repayment of the Bridge Loan by the end of the 2015 second fiscal quarter; (C) successful preparation of the Company’s finance and accounting functions to support the combined company after the termination of the Simon services agreement and to also facilitate realization of Merger synergies; and (D) establishment of processes to support service and reporting requirements of the O’Connor joint venture. Mr. Yale received a target evaluation on his Functional Objective relating to IR outreach because the number of new analysts launching coverage on the Company during 2015 was slightly less than the targeted amount despite a challenging environment for the Company to attract new investors.
The assessment of Ms. Indest’s performance on her Individual Objectives was similar to that for Mr. Yale in that she received a maximum rating on four of her five objectives and a target rating on her Functional Objective relating to IR outreach for the same reasons as Mr. Yale’s evaluation and payout for that objective. Three of Ms. Indest’s objectives were Merger Integration Objectives relating to: (A) preparing the Company’s finance and accounting functions to support the combined company after termination of the Simon services agreement and to also facilitate realization of Merger synergies; (B) managing an effective transition with the Company’s external independent auditors and addressing in a timely manner Merger accounting issues and public financial reporting procedures; and (C) establishing by year-end a marketing and communication plan to rollout the Company’s new post-Merger brand. Finally, Ms. Indest’s other Functional Objective related to the successful organization and completion of the Company’s inaugural Investor and Analyst Day.
Messrs. Knerr and Drought also achieved maximum ratings for four out of five of their respective Individual Objectives. Messrs. Knerr and Drought’s objectives may be categorized as Financial Objectives, Operational Objectives, Merger Integration Objectives and, for Mr. Drought, one Functional Objective relating to Mr. Drought’s responsibility to manage the Company’s leasing function. The Compensation Committee found support for Mr. Knerr’s maximum rating given for one of his Operational Objectives, two Merger Integration Objectives, and one Financial Objective in the following achievements: (A) creation of a three year portfolio-wide strategic plan for leasing and development; (B) integration and enhancement of the Company’s development and leasing departments; (C) development and implementation of a portfolio-wide organizational structure for the Company’s property management department; and (D) increase, in spite of significant tenant bankruptcies, portfolio-wide total occupancy by the end of 2015 as compared to the end of the 2015 first fiscal quarter. Mr. Knerr achieved target achievement for his second Operational Objective relating to replacing income lost due to tenant bankruptcies as shown by the replacement of over 75% of such income. With respect to Mr. Drought, the Compensation Committee found support for the maximum ratings given for one of his Operational Objectives, Merger Integration Objective, Financial Objective, and Functional Objective in the following achievements: (A) leadership of integrated leasing team to achieve NOI, FFO and leasing results for 2015 consistent with expectations; (B) post-Merger organization of the leasing department for the combined company and recruitment of additional leasing talent; (C) effective management of leasing department which included recruitment of four leasing and specialty leasing managers, continued internal cross-functional strategy meetings, and over 100 portfolio meetings with tenants; and (D) visiting a majority of properties in the Company’s portfolio to promote a thorough understanding of the portfolio and integrating leasing functions in both of the Company’s corporate offices. Mr. Drought achieved target achievement for his second Operational Objective relating to re-leasing the Company’s expansion or redevelopment properties as shown by the leasing progress made at Phase III of Scottsdale Quarter®, which includes the addition of American Girl and Design Within Reach, and three restaurants recently opened at The Mall at Fairfield Commons.
(iv) Total Payouts to Named Executives Under 2015 Plan
The chart below summarizes the payout amounts for the Individual Objectives Component for each of the Named Executives based upon each person’s overall achievement percentage that resulted from his or her performance evaluation. The Individual Objectives Component for each Named Executive was added to the person’s FFO Component and Strategic Objectives Component to obtain the total bonus payout under the 2015 Plan (amounts are rounded to the nearest dollar):
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| Named Executive (Indiv. Achieve. Percent.) | Individual Objectives Target Amount | Strategic Objectives Component of Annual Bonus | Individual Objectives Component of Annual Bonus1 | FFO Component of Annual Bonus | Total Bonus Award |
| Mr. Glimcher (112.50%) | $414,345 | $414,345 | $466,138 | $1,243,035 | $2,123,518 |
| Mr. Yale (140%) | $156,250 | $156,250 | $218,750 | $ 468,750 | $ 843,750 |
| Mr. Knerr (139.9999%) | $216,562 | $216,562 | $303,186 | $ 649,685 | $1,169,433 |
| Mr. Drought (140.001%) | $106,012 | $106,013 | $148,418 | $ 318,037 | $ 572,468 |
| Ms. Indest (140%) | $ 52,958 | $ 52,958 | $ 74,141 | $ 158,874 | $ 285,973 |
| Mr. Ordan (81.25%) | $412,500 | $412,500 | $335,156 | $1,237,500 | $1,985,156 |
1Amount determined by multiplying achievement percentage by Individual Objectives Target Amount.
The bonus payout award under the 2015 Plan, for each of the Named Executives, is reflected in column (f) of the Summary Compensation Table. The bonus payment amount under the 2015 Plan, generally, accounts for approximately 18% to 58% of a Named Executive’s total annual compensation that is reported in the Summary Compensation Table. As stated earlier, the 2015 annual bonuses are plan-based compensation intended to serve as incentive for performance over a period of time that is evaluated using various performance targets established and communicated to the plan participantseffect prior to the evaluation. For this reason, the bonus compensation is reported in the Summary Compensation Table in column (f). Bonuses for fiscal year 2014 are reported in column (d) because when awarded, no performance metrics or targets had been pre-established and the bonuses were not paid pursuant to the terms of a plan; instead the Compensation Committee based its bonus determinations for fiscal year 2014 performance on its review of Company performance for 2014, including financial results compared to previously established goals, the Company’s strategic achievements, and the Compensation Committee’s assessment of individual management’s contributions and performance.salary modification.
Equity Compensation
The components of the Company’s equity compensation to executives for fiscal year 2015 satisfy three important compensation objectives: (i) to reward executives based on financial and market performance, (ii) align the interests of executives and our shareholders, and (iii) attract and retain qualified and experienced executives. Although we anticipate that the size and nature of our future equity compensation awards will be influenced by our compensation objectives, historical practices, market or peer group comparisons, and performance; as we discuss below, the awards during fiscal year 2015 were influenced primarily by the terms of the Merger and the provisions of the employment agreements or other arrangements between the Company and the respective Named Executive.
Additionally, as reflected in the compensation tables that follow, Named Executives formally employed with Glimcher prior to the Merger (a “Glimcher Named Executive” and collectively, the “Glimcher Named Executives”) who held Glimcher stock options and restricted common stock received from the Company, as part of the Merger consideration, converted stock options for Common Shares (“WP Glimcher Converted Options”) and converted restricted Common Shares (“WP Glimcher Converted Restricted Share Awards”). The WP Glimcher Converted Options and WP Glimcher Converted Restricted Share Awards were issued from the Washington Prime Group, L.P. 2014 Stock Incentive Plan (the “WPGLP Plan”), but the terms and conditions of each security, including the applicable vesting schedule, are governed by the respective Glimcher equity compensation plan that the Company assumed in connection with the consummation of the Merger. The conversion mechanics operated as follows; in addition to any other Merger consideration due under the Merger agreement, each Glimcher restricted common share was exchanged for 0.7840 (the “Equity Award Exchange Ratio”) of a WPG Common Share.
The Equity Award Exchange Ratio was also applied to Glimcher stock options to convert them into WP Glimcher Converted Options. Lastly, the Equity Award Exchange Ratio was used to convert the exercise price of the Glimcher stock option (“Glimcher Option Exercise Price”) to the exercise price for the WP Glimcher Converted Option by dividing the Glimcher Option Exercise Price by the Equity Award Exchange Ratio. The table below provides the resulting WP Glimcher Converted Restricted Share Awards as well as unexpired and unexercised WP Glimcher Converted Options holdings for the Glimcher Named Executives following application of the equity award conversion prescribed under the Merger agreement (amounts are rounded as detailed below)1:
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| Glimcher Named Executive | Pre-Merger Stock Options2 | Glimcher Option Exercise Price | Post Merger WP Glimcher Converted Options 2 | Post Merger WP Glimcher Converted Option Exercise Price | Pre-Merger Restricted Stock | Post Merger WP Glimcher Converted Restricted Share Awards3 |
| Mr. Glimcher | 75,000 | $25.22 | 58,798 | $32.17 | 895,721 | 702,233 |
| Mr. Yale | 25,000 | $25.22 | 19,599 | $32.17 | 217,419 | 170,454 |
| Mr. Drought | 10,000 4,000 | $25.22 $ 4.51 | 7,839 3,135 | $32.17 $ 5.76 | 139,150 | 109,092 |
| Ms. Indest | 5,000 5,000 5,000 3,333 | $25.22 $27.28 $10.94 $ 4.51 | 3,919 3,919 3,919 2,613 | $32.17 $34.80 $13.96 $ 5.76 | 26,013 | 20,394 |
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1
| Totals for WP Glimcher Converted Restricted Share Awards and WP Glimcher Converted Options are rounded to nearest Common Share and whole option respectively. The exercise prices for the WP Glimcher Converted Options are rounded up to the nearest cent. Other amounts and variables are rounded here to the nearest tenth, but unrounded in the conversion and any underlying calculations. |
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2
| Excludes options that expired in March 2015. |
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3
| Totals are as of the Merger Closing Date and do not reflect vesting that occurred in 2015 after the Merger Closing Date.
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Grant date fair value information for the above-listed WP Glimcher Converted Restricted Share Awards and WP Glimcher Converted Options are excluded from the Summary Compensation Table and Grants of Plan-Based Awards Table because they do not reflect any additional compensation or 2015 executive compensation decisions made by the Company or Compensation Committee. The remaining unexpired WP Glimcher Converted Options and WP Glimcher Converted Restricted Share Awards are however reported in the Outstanding Equity Awards at Fiscal Year-End table, Options Exercised and Stock Vested table, and the beneficial ownership table as applicable.
Equity awards made by the Company during 2015 were in the form of LTIP Units. LTIP Units are authorized by the WPGLP Plan and represent a separate class of equity interests in WPG L.P. LTIP Unit awards may be subject to performance‑based conditions, continuing service requirements, and/or other conditions. They may be granted to employees and other persons who directly or indirectly provide services to our operating partnership subsidiary or any of its affiliates as a form of equity‑based incentive compensation. LTIP Units are similar to the common limited partnership operating units of WPG L.P. (“O.P. Units”), and are generally entitled to distributions in the same manner as the O.P. Units and Common Shares, except that they have a number of special terms intended to enable LTIP Units to constitute “profits interests” for U.S. federal income tax purposes. Generally, once an LTIP Unit has vested pursuant to the terms set forth in the award agreement, LTIP Units will be economically identical to and freely convertible into O.P. Units, which themselves may be exchanged, at the option of the holder, for Common Shares on a one‑for‑one basis or cash, as determined by us in our sole discretion. Vested LTIP Units also are entitled to be voted on an equal basis with O.P. Units.
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(i) | Post Merger Inducement and Performance-Based LTIP Unit Awards |
During 2015, LTIP Units were used by the Company for the post Merger inducement awards (the “Inducement Awards”) to certain former Glimcher executives, and each of the Glimcher Named Executives, per the terms of their respective employment agreement or Offer Letters.Additionally, the Company made post Merger special performance-based LTIP Unit allocations (the “Performance-Based LTIP Allocations”) to the former Glimcher executives, and each of the Glimcher Named Executives, as well as other Company executives. The Glimcher Named Executives and Ms. Tehrani received both Inducement Awards and Performance-Based LTIP Allocations. None of the other Named Executives received during 2015 any Inducement Awards or Performance-Based LTIP Allocations in connection with the consummation of the Merger.
The Inducement Awards constituted actual grants of LTIP Units. Grant sizes for Glimcher Named Executives were determined by dividing cash values set forth in their respective employment agreements or Offer Letters by the average closing price for the Common Shares for the twenty consecutive trading days following the Merger Closing Date (the “Closing Price”). With respect to Ms. Tehrani’s Inducement Award, the number of LTIP Units granted was the result of negotiations concerning her overall compensation package and designed to be comparable to similar awards made before the Merger to similarly-situated executives of the Company during fiscal year 2014. The Inducement Awards were structured to vest over a period of four years in 25% increments of the total number of LTIP Units awardedsubject to continued employment through the applicable vesting date which for the Glimcher Named Executives was the annual anniversary of the Merger Closing Date and for Ms. Tehrani was her hire date of January 21, 2015 (the “Tehrani Hire Date”).
Unlike the Inducement Awards, the Performance-Based LTIP Allocations are not actual unit-denominated awards or grants, but rather award allocations for which recipients receive a percentage, ranging from 0% to 100%, if certain performance targets are achieved over distinct performance periods spread over a three year horizon. The allocated LTIP Units that comprise a recipient’s Performance-Based LTIP Allocations were apportioned evenly over the applicable performance periods. Pursuant to the respective employment agreements and Offer Letters of the recipients, performance would be measured by absolute TSR of the Common Shares, applicable to 40% of the allocated amount per performance period, and relative TSR performance of the Common Shares versus the MSCI US REIT Index (NYSE: RMZ) (the “Index”), applicable to 60% of the allocated amount per performance period. For the Glimcher Named Executives, the relative performance periods run from the Merger Closing Date to December 31, 2016; December 31, 2017; and December 31, 2018, respectively (each a “Special Performance Period” and all, collectively, the “Special Performance Periods”). For Ms. Tehrani, the performance period end dates were the same, but the start date was the Tehrani Hire Date. Similar to the Inducement Awards, for the Glimcher Named Executives, the size of the Performance-Based LTIP Allocations were determined by dividing cash values set in their respective employment agreements or Offer Letters by the Closing Price. The size of Ms. Tehrani’s Performance-Based LTIP Allocation was formulated like her Inducement Award in that it mirrored comparable awards made before the Merger to similarly-situated executives of the Company during fiscal year 2014. Except as the Compensation Committee may otherwise provide in an applicable award agreement or as otherwise provided in a written employment or severance agreement between the Company and an applicable recipient, LTIP Units granted from Performance-Based LTIP Allocations with respect to the performance periods that end on December 31, 2016 and December 31, 2017 are to vest on the third (3rd) anniversary of the Merger Closing Date for the Glimcher Named Executives and the third (3rd) anniversary of the Tehrani Hire Date for Ms. Tehrani’s award. LTIP Units granted from Performance-Based LTIP Allocations with respect to the last performance period ending on December 31, 2018 shall vest immediately upon grant subject to continued employment through the grant date. The tables below show (A) the number of Inducement Awards and Performance-Based LTIP Allocations that certain Named Executives received and (B) the possible payout of allocated LTIP Units based on absolute TSR performance and relative TSR performance versus the Index.
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| | Inducement Awards | Performance-Based LTIP Allocations |
Named Executive
(a) | Value
(b) | Awarded Units1
(c) | Value
(d) | Allocated Units2
(e) | Allocated Units Per Special Performance Period (f) |
| Mr. Glimcher | $1,400,000 | 79,849 | $2,100,000 | 119,772 | 39,924 |
| Mr. Yale | $ 600,000 | 34,221 | $ 900,000 | 51,330 | 17,110 |
| Mr. Drought | $ 400,000 | 22,814 | $ 600,000 | 34,221 | 11,407 |
| Ms. Indest | $ 300,000 | 17,110 | $ 450,000 | 25,665 | 8,555 |
| Ms. Tehrani | $ 262,9953 | 15,000 | $ 394,4923 | 22,500 | 7,500 |
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1
| Amount determined by dividing respective value in column (b) by the Closing Price of $17.533. Amounts rounded to nearest whole unit. |
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2
| Amount determined by dividing respective value in column (d) by the Closing Price of $17.533. Amounts rounded to nearest whole unit. |
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3
| Amount provided for comparability purposes against the values provided for other Named Executives listed. Amounts rounded to nearest dollar. |
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| | Absolute TSR Performance (40% of Performance-Based LTIP Allocations) |
| | Special Performance Period Ending |
Percentage of Perf.-Based LTIP Allocations Resulting in LTIP Units Granted | 12/31/16 | 12/31/17 | 12/31/18 |
| WPG Absolute TSR | WPG Absolute TSR | WPG Absolute TSR |
| 100% | >=16% | >=24% | >=32% |
| 83.3% | 14% | 21% | 28% |
| 66.7% | 12% | 18% | 24% |
| 50% | 10% | 15% | 20% |
| 33.3% | 8% | 12% | 16% |
| 0% | <8% | <12% | <16% |
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| | Relative TSR Performance (60% of Performance-Based LTIP Allocations) |
| | Special Performance Period Ending |
Percentage of Perf.-Based LTIP Allocations Resulting in LTIP Units Granted | 12/31/16 | 12/31/17 | 12/31/18 |
| WPG TSR to Index | WPG TSR to Index | WPG TSR to Index |
| 100% | Index + 1% | Index + 1% | Index + 1% |
| 75% | Index | Index | Index |
| 50% | Index – 2% | Index – 2% | Index – 2% |
| 0% | Index – 4% | Index – 4% | Index – 4% |
For Company’s fiscal year ending December 31, 2015, no LTIP Units were awarded from Performance-Based LTIP Allocations because none of the Special Performance Periods had concluded; however, 25% of the Glimcher Named Executives’ LTIP Units constituting Inducement Awards vested on January 15, 2016. As discussed later in more detail, Ms. Tehrani forfeited her outstanding Performance-Based LTIP Allocations in connection with the termination of her employment, but the vesting for the Inducement Awards accelerated in connection with such termination per the terms of the award agreement.Performance-Based LTIP Allocations account for 60% of a recipient's post Merger LTIP Unit awards with the remaining 40% being time-or service based awards which we feel furthers our compensation objective of making the majority of our executive compensation based on market, corporate, and individual performance.
(ii) 2015 Annual LTIP Unit Awards
In March 2015, the Compensation Committee approved performance criteria for our 2015 annual LTIP Unit awards (the “2015 Annual Awards”) to be granted to executive personnel, including all of the Named Executives, in 2016 no later than upon the completion of the audit of WPG's 2015 financial statements. The 2015 Annual Awards were established as a cash value representing the maximum award value and equal to a multiple of the respective recipient’s 2015 annual paid salary. For Named Executives now eligible to receive a payout from the 2015 Annual Awards, the multiple ranged from 75% – 300% as determined by the terms of the Named Executive’s employment agreement or Offer Letter. At the end of 2015, the cash value is converted to an allocated number of LTIP Units (“2015 LTIP Unit Allocation”) from which actual awards are made. Actual awards of LTIP Units for the 2015 Annual Awards are determined by the following performance criteria:
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† | TSR of WPG for 2015 compared to the Index, calculated on a net basis and represented by the Index (“TSR Objective”); and |
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† | The Company’s performance on the Strategic Objectives (the “Strategic Goal Component”). |
Sixty percent of the 2015 LTIP Unit Allocation represents the LTIP Units available to be awarded for WPG’s achievement on the TSR Objective (the “2015 TSR LTIP Unit Allocation”) and the remaining 40% of the 2015 LTIP Unit Allocation represents the LTIP Units available to be awarded for the Company’s achievement on the Strategic Objectives (the “2015 Strategic Goals LTIP Unit Allocation”). The award was structured in this manner to again further our compensation objective of providing performance-based compensation that aligns the interest of our executives with those of our shareholders. Furthermore, the Strategic Goal Component was introduced to provide the Compensation Committee the ability to recognize and award strategy execution not immediately reflected in WPG’s relative Common Share price.
The payout for the Strategic Goal Component will range from 0% to 100% of the 2015 Strategic Goals LTIP Unit Allocation, based on the Compensation Committee's qualitative assessment of WPG's performance relative to the Strategic Objectives. With respect to the TSR component, the payout for the TSR Objective ranges from 100% to 76% of the 2015 TSR LTIP Unit Allocation for achievement 1 percentage point or more above the Index; 75% to 51% of the 2015 TSR LTIP Unit Allocation for achievement at the Index; 50% to 1% of the 2015 TSR LTIP Unit Allocation for achievement 2 percentage points below the Index; and no payout for achievement 4 percentage points or more below the Index with interpolation between the various levels. The Compensation Committee retained the ability to use WPG's average Common Share price for the relative TSR performance determination in the event of anomalous events at year-end; however, such discretion was not used in connection with making the final awards. Set forth in the table below for each Named Executive are: (A) the cash value representing the maximum award value, (B) the multiple used to convert the cash values to the 2015 LTIP Unit Allocation, (C) 2015 TSR LTIP Unit Allocation, and (D) 2015 Strategic Goals LTIP Unit Allocation.
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Named Executive (a) | | 2015
Annual
Paid Salary (b) | |
Multiple
(c) | | 2015 Annual LTIP Unit Awards at Maximum
(as a Multiple of 2015
Annual Paid Salary) (d) | | 2015 LTIP Unit Allocation(1) (e) | | 2015 TSR LTIP Unit Allocation (f) | | 2015 Strategic Goals LTIP Unit Allocation (g) |
| Mr. Ordan | | $825,000 | | 300% | | $2,475,000 | | 235,266 | | 141,160 | | 94,106 |
| Mr. Glimcher | | $828,690 | | 300% | | $2,486,070 | | 235,318 | | 140,791 | | 94,527 |
| Mr. Yale | | $500,000 | | 100% | | $ 500.000 | | 47,529 | | 28,518 | | 19,011 |
| Mr. Knerr | | $494,998 | | 100% | | $ 494,998 | | 47,053 | | 28,232 | | 18,821 |
| Mr. Drought | | $424,050 | | 100% | | $ 424,050 | | 40,309 | | 24,185 | | 16,124 |
| Ms. Indest | | $282,442 | | 75% | | $ 211,832 | | 20,136 | | 12,082 | | 8,054 |
| Ms. Tehrani | | $343,269 | | 100% | | $ 343,269 | | 32,630 | | 19,578 | | 13,052 |
| Mr. Richards | | $450,000 | | 100% | | $ 450,000 | | 42,776 | | 25,666 | | 17,110 |
| Mr. Gaffney | | $342,308 | | 100% | | $ 342,308 | | 32,539 | | 19,523 | | 13,016 |
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1
| The maximum number of LTIP Units that can be earned by each individual for the 2015 Annual Awards was determined by dividing the dollar amount in column (d) by $10.52, the average trading price of WPG's Common Shares on the NYSE during the last fifteen (15) trading days of 2015. Amounts are rounded to nearest whole unit.
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The formula to determine the maximum award size set forth in column (d) above for the Named Executives was set forth in the respective employment agreements and Offer Letters for each Named Executive. For the Named Executives listed in the table above, the Compensation Committee determined that no award of LTIP Units would occur for the TSR Objective as none of the TSR goals were satisfied because WPG’s 2015 Common Share TSR was -33.53% compared to the Index of -1.5%. With respect to the payout for the Company’s performance on the Strategic Objectives, similar to the determination for the annual bonus payout, achievement was determined to be 100% and the Named Executives eligible to receive a payout for 2015 Annual Awards received a grant of LTIP Units equal to their respective 2015 Strategic Goal LTIP Unit Allocation. Except for Mr. Ordan, one-third of the LTIP Units for the 2015 Annual Awards granted to Named Executives will vest on each of January 1, 2017, 2018 and 2019. Under the Consulting Agreement, LTIP Units that Mr. Ordan receives in connection with the payout for the 2015 Annual Awards shall vest immediately upon grant. Lastly, with respect to Messrs. Gaffney and Richards and Ms. Tehrani, their respective award opportunity relating to the 2015 Annual Awards was forfeited in connection with their respective employment terminations because the terms of the initial award provide that recipients must be employed by the Company (or an affiliate thereof) on the date the performance payout and ultimate grant is approved by the Compensation Committee.
(iii) LTIP Units – 2015 Vesting Events and Separation/Transition Payments
During 2015, certain LTIP Units granted during 2014 vested. On an individual basis, the vesting event covered one-fourth or 25% of the inducement LTIP Units granted in August 2014. Named Executives holding vesting LTIP Units that vested in August 2015 are as follows:
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| Named Executive | Time-Based LTIP Units Awarded in 2014 | Time-Based LTIP Units Vesting in 2015 | Remaining Unvested Time-Based LTIP Units Awarded in 2014 |
| Mr. Knerr | 30,000 | 7,500 | 22,500 |
| Mr. Richards | 30,000 | 7,500 | 22,500 |
| Mr. Gaffney | 15,000 | 3,750 | 11,250 |
Additionally, accelerated vesting of LTIP Unit awards occurred for certain Named Executives in connection with either their termination of service or transition to another role in our company. Mr. Ordan transitioned from our Executive Chairman to our non-executive Chairman and pursuant to the Consulting Agreement, the unvested portion of the 153,610 time-based LTIP Units that Mr. Ordan received in June 2014 that were previously to vest in fourths (25%) on each of the first four anniversaries of May 28, 2014, all vested in their entirety on December 31, 2015, his last day as an employee of the Company. Messrs. Richards and Gaffney’s terminations, both of which were consider terminations without “cause” under their respective employment agreements, resulted in all of the remaining unvested time-based LTIP Units held by each to vest in their entirety per the terms of the award agreement on their last day of employment which for Mr. Gaffney was December 31, 2015 and for Mr. Richards was January 15, 2016. As stated earlier, Ms. Tehrani’s unvested Inducement Award of 15,000 LTIP Units vested when her employment terminated on December 31, 2015. For Messrs. Richards, Gaffney and Ms. Tehrani, the actual date on which unvested LTIP Units vested in connection with the respective terminations was the thirtieth day following each person’s respective termination date which for Mr. Richards was February 15, 2016 and January 31, 2016 for Mr. Gaffney and Ms. Tehrani.
A portion of the 2014 performance-based LTIP Units allocated to the Company’s executive officers, and certain Named Executives, during 2014 were to vest based upon WPG’s achievement of absolute or relative TSR goals over three performance periods beginning August 25, 2014 (May 28, 2014 with respect to Mr. Ordan’s award) and ending (A) December 31, 2015, (B) December 31, 2016, and (C) December 31, 2017 and in each case subject to continued employment through the applicable grant date. Messrs. Ordan, Gaffney, and Richards forfeited their remaining unvested and unearned performance based LTIP Units allocated in 2014 in connection with their respective termination and role transition. For the other Named Executives with such allocations, no performance based awards for the 2014 LTIP Unit allocations were earned when the first performance period ended on December 31, 2015 because WPG did not meet either of the absolute or relative TSR goals for that performance period as set forth below.
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| | Performance‑Based LTIP Units First Performance Period
(8/25/14 through 12/31/15) |
Allocation | 40% Absolute TSR |
| | 60% Relative TSR to Index |
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Absolute TSR | >= 8% | 100 | % |
| | 7% | 83.3 | % |
| | 6% | 66.7 | % |
| | 5% | 50 | % |
| | 4% | 33.3 | % |
| | <4% | 0 | % |
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Relative TSR: MSCI REIT Index | Index+1% | 100 | % |
| | Index | 75 | % |
| | Index−2% | 50 | % |
| | Index−4% | 0 | % |
The values relating to our equity awards which are reported in column (d) of the Summary Compensation Table for each Named Executive represent the aggregate grant date fair value computed in accordance with FASB Accounting Standards Codification (“ASC”) Topic 718, Compensation – Stock Compensation (“FASB ASC Topic 718”) for each Named Executive’s respective award(s) during the listed year. Generally, with respect to the fiscal year 2015, the aggregate grant date fair value of the LTIP Unit awards and allocations account for approximately 9% to 57% of a Named Executive’s total annual compensation that is reported in the Summary Compensation Table and approximately 48% to 57% of a Glimcher Named Executive’s total annual compensation that is reported in the Summary Compensation Table.
Common Share Ownership Guidelines
On February 24, 2015, our Board established Common Share ownership guidelines (the “Guidelines”) for certain executive officers and all non‑management Board members to encourage higher levels of Common Share ownership and further align director and management interests with those of our shareholders as well as further mitigate any unnecessary risk‑taking on the part of the executives covered by the Guidelines. Under the Guidelines, Common Shares acquired by Senior Executives through purchase, gift, exchange, or other means are counted toward the ownership requirement level in addition to Common Shares received through grants, awards, or payments from the Company. Additionally, unearned and earned LTIP Unit allocations, vested and unvested restricted stock units or shares, and Common Shares issuable to Senior Executives and Board members upon the redemption of operating partnership units in WPG L.P. may count toward a Senior Executive and Board member’s ownership requirement level under the Guidelines. Stock options, any share appreciation rights, pledged Common Shares or other securities of the Company do not under the Guidelines count toward a Senior Executive and Board member’s ownership requirement. Board members and Senior Executives covered by the Guidelines are prohibited from selling Common Shares received by such person as equity compensation until such person has achieved the ownership requirement under the Guidelines applicable to him or her. After reaching compliance under the Guidelines, Senior Executives and Board members may sell such number of Common Shares in excess of the respective person’s ownership guideline. Sales of Common Shares by Board members and Senior Executives are permitted to satisfy any withholding requirements or other tax liability incurred in connection with any grant or associated vesting as well as any sale of Common Shares in connection with the cashless exercise of stock options where the sale is done for purposes of funding the applicable exercise price or paying withholding taxes.
The Guidelines establish that Senior Executives are to reach their applicable ownership level described in the table below within five years after the later of February 24, 2015 or the date on which such person is first elected or appointed to the applicable office covered by the Guidelines. Board members are to reach their applicable ownership level described in the table below within five years after the later of February 24, 2015 or the date on which such person is first elected or appointed to the Board.
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| | Ownership Guideline (Lesser of) |
Position | | Number of Common Shares with a Market Value Equal to | | | | Number of
Common
Shares |
Chief Executive Officer | | 5x Base Salary | | or | | 200,000 |
Chief Financial Officer and Chief Operating Officer | | 3x Base Salary | | or | | 75,000 |
Other Executive Officers | | 2x Base Salary | | or | | 20,000 |
Non-Management Directors | | 5x Cash Portion
of Annual Retainer
| | or | | 20,000 |
Under the Guidelines, a Senior Executive’s base salary shall be the actual paid annual salary received by the Senior Executive from the Company (or any applicable affiliated company or subsidiary) annualized for the Company’s fiscal year in which any compliance measuring occurs. Lastly, for purposes of measuring compliance with the Guidelines, the applicable per share market value of the Common Shares shall be determined by taking the average closing price of the Common Shares on the NYSE (or such other exchange that the Common Shares are principally traded on at the time compliance is measured) over the ninety trading days preceding the date on which compliance with the Guidelines is measured.
In addition to the above-described Guidelines, our policies regarding trading in our securities by Senior Executives and Board members prohibit such persons from short selling or hedging their ownership of the Common Shares, including trading in publicly‑traded options, puts, calls or other derivative instruments related to the Common Shares, our preferred shares, or debt securities. Although our employees and Board members are permitted to have margin accounts for our securities or to pledge our securities, all Senior Executives and members of the Board must notify our General Counsel prior to creating a margin account for our securities or pledging our securities and shall immediately notify the General Counsel if the broker for such an account sells the Company securities held in the pledged or margin account. Also, Senior Executives and members of the Board shall notify the General Counsel before establishing a standing or limit order to buy or sell our securities. If the General Counsel consents to the Senior Executive or Board member’s establishment of a standing or limit order then such person shall provide the details of the order to the General Counsel as well as any future changes or modifications to such order.
Other Benefits
Our senior executive officers are entitled to participate in our retirement plan, group medical insurance plan, short‑termshort-term and long‑termlong-term disability plan and other benefits on the same basis as other salaried employees. In 2015, our retirement benefits were provided under the following retirement plans: The WP Glimcher RetirementWPG Savings Plan (previouslyis our tax-qualified retirement plan or 401(k) plan. The Glimcher Realty Trust RetirementWPG Savings Plan until January 16, 2015) (the “WP Glimcher Savings Plan”) and the Washington Prime Management Associates Savings Plan (the “WP Savings Plan,” and together with the WP Glimcher Savings Plan, the “WPG Plans”). The two plans were merged on January 1, 2016.
The WPG Plans are tax-qualified deferred compensation plans or 401(k) plans. Both plans currently havehas a feature that permits the Company to partially match employee contributions, including contributions made by executive officers including certaineach of the Named Executives (the “Match Feature”). During 2015,2020, under the Match Feature, the Company matched 100% of the first 3% of salary deferrals that an employee contributed to the WPG PlansSavings Plan and 50% of the next 2% of salary deferrals that an employee contributed to the WPG Plans. Additionally, the Company made a profit sharing contribution of 1% of salary to the WP Savings Plan. Under the WPG Plans, salary includes payments attributed to any bonus compensation as well as salary compensation. Compensation related to the Match Feature for the Named Executives is included in the amounts reported in column (g)(f) of the Summary Compensation Table. Under the Merger agreement, the Company was obligated to cause its benefits plans to take into account, for purposes of eligibility, vesting, levels of benefits, and benefit accrual, the service of former employees of Glimcher, including each of the Glimcher Named Executives, as if such service were with the Company, to the same extent that such service was credited under a comparable Glimcher benefit plan except to the extent that payments or the provision of benefits would result in the duplication of payments or benefits for the same period of service. During 2015,2020, for Named Executives who were participants in either of the WPG Plans,Savings Plan, we provided matching contributions undervia the WP Glimcher Savings Plan and WP Savings PlanMatch Feature of up to $21,881$11,400 per person. We do not have a traditional pension plan or supplemental executive retirement plan.
Perquisites
The Compensation Committee intends to restrictAdditionally, during 2020, WPG paid life insurance premiums for life insurance for the use of any perquisites to individual specific circumstances where conditions warrant individual accommodation. We believe that the limited number of perquisites provided are reasonable, competitive, and consistent with our objective to have an executive compensation program that provides compensation arrangements that are comparable with those provided by similarly-situated companies and that will attract and retain the best leaders for our Company. Only Mr. Ordan received reportable perquisite compensation during 2015. With respect to Mr. Ordan, pursuant to the terms of his Consulting Agreement, the Company paid the legal fees he incurred in connection with the negotiationbenefit of the Consulting Agreement. The aggregate fees, including the gross-up to cover Mr. Ordan’s tax liability related to the payment, was $15,798. The Compensation Committee approved this payment in connection with its approval of the Consulting Agreement. Compensation related to perquisites is included in column (g) of the Summary Compensation Table and includes, where applicable, payments for the Match Feature.
Termination Payments and Change in Control Benefits
The arrangements we currently have with certain Named Executives for payments and benefits following a termination of employment or a change in control (the “Termination Benefits”) are memorialized in the various agreements between the respective Named Executive and the Company. Messrs. Glimcher and Yale’s Termination Benefits are in their respective employment agreements, severance arrangements, and various equity award agreements. Termination Benefits for Ms. Indest andranging from $966 to $1,806. Moreover, Mr. Drought are contained in their respective severance arrangements and respective equity award agreements. Mr. Knerr’s Termination Benefits are contained in his respective employment agreement and equity award agreements while Mr. Ordan’s applicable Termination Benefits are described in the Consulting Agreement and his equity award agreement. We have made payments of Termination Benefits in connection with the separations of Ms. Tehrani and Messrs. Gaffney and Richards that occurred at the end of 2015 or shortly thereafter. Each of the aforementioned arrangements and payment of Termination Benefits are more fully described in the section below entitled “Potential Payments upon Termination or Change in Control.”
Payments and benefits upon the specified termination of employment events are intended to provide protection against a termination outside of the executive’s control and to serve as a financial bridge between employment opportunities. Payments and benefits upon termination of employment in connection with a change in control are designed to encourage executives to focus on the best interests of shareholders by alleviating concerns related to the impact of a change in control event on an executive’s personal interests. These provisions were negotiated with the executives at the time of entering into their employment agreements or arrangements. The Termination Benefits are intended to be competitive with comparable benefits provided by other similarly-situated companies and to attract and retain executives that we view as key to our success following our separation from Simon and existence as a stand-alone publicly-traded REIT within the retail/shopping center sector.
The change in control severance benefits under the Company’s employment agreement with Mr. Knerr are structured as “double trigger” benefits. In other words, change in control does not itself trigger the severance benefits; rather, severance benefits only become payable in the event of a termination of employment in connection with or following a change in control. In connection with the closing of the Merger and the execution by Glimcher Named Executives of their respective employment agreements and Offer Letters, the severance arrangements each person had as an executive with Glimcher were amended to make them double trigger and not single trigger change in control arrangements. As explained in greater detail in the section below entitled “Potential Payments upon Termination or Change in Control,” the change in control arrangements for the Glimcher Named Executives include excise tax gross-up provisions that existed in their respective severance arrangements prior to the Merger, but the change in control arrangements with Mr. Knerr do not contain tax-gross up provisions. Currently, the Consulting Agreement has no provisions relating to payments or benefits to Mr. Ordan following a change in control. The Consulting Agreement provides for certain payments and benefits to be provided to Mr. Ordan in the event the period he is to provide services to the Company and CEO is terminated under certain circumstances prior to May 28, 2017.
Amendments to the employment agreements of certain Named Executives which became effective during 2015 following the Merger, impacted the compensation they received following their termination from our company. Amendments to Mr. Richards’ employment agreement that became effective on the Merger Closing Date in connection with his transition from Chief Financial Officer to Executive Vice President and Chief Administrative Officer provided for the following which materially impacted the payments and benefits he received when his employment terminated on January 15, 2016:
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† | increased his separation pay to two times the sum of his annual base salary in effect immediately prior to the date of termination plus target annual cash bonus for the year in which the date of termination occurs or if no target annual cash bonus has been set for the year in which the date of termination occurs, Mr. Richards' target annual cash bonus in effect during WPG's most recently completed fiscal year in the event we terminated his employment other than for “cause” or he terminated his employment for “good reason” (within six months after the good reason event) (instead of one times salary or one times salary and target bonus upon the occurrence of such triggering events if no change in control or a change in control had occurred within the preceding 24 months, respectively); and |
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† | provided for, in addition to accelerated vesting of his inducement LTIP units, accelerated grant and vesting of his performance‑based LTIP units in the event we terminated his employment other than for “cause” or he terminated his employment for “good reason” (within six months after the good reason event). |
In connection with his actual termination, Mr. Richards waived the application of the aforementioned provisions to the performance‑based LTIP Units allocated to him in 2014. Mr. Ordan’s employment agreement was amended also during 2015, but when his employment terminated on December 31, 2015 and he transitioned to the role of non-Executive Chairman, his employment agreement terminated and, except for certain provisions that survived as provided by the Consulting Agreement and discussed more fully in the section below entitled “Potential Payments upon Termination or Change in Control,” the severance and change in control provisions of his employment agreement became null and void.
Clawback Provisions
We have an executive compensation clawback policy that applies to any executive officer who the Compensation Committee determines engaged in fraud or intentionally illegal conduct that materially contributed to the need for a restatement of our financial statements. The clawback policy applies to all bonuses and other incentive and equity compensation awarded to the executive officer, the amount, payment and/or vesting of which was calculated based wholly or in part on the application of objective, financial performance criteria measured during any part of the period covered by the restatement. To the extent that the performance‑based compensation paid or awarded to such executive officer is greater than it would have been had it been calculated based upon the restated financial results, then the Compensation Committee may seek to recover from the executive the after‑tax portion of the difference.
In addition, a section of Mr. Ordan’s employment agreement that survived the agreement’s termination pursuant toYale, per the terms of the ConsultingYale Agreement provides that prior to our adoption of a clawback policy pursuant to the requirements of the Dodd‑Frank Wall Street Reform and Consumer Protection Act (the “Dodd‑Frank Act”),as included in column (f) for Mr. Ordan’s bonus and other equity or non‑equity compensation are subject to recoupment by our Board during his employment period and for three years thereafter (unless a longer period is required by law) to the extent that there is a restatement of our consolidated financial statements, and if the payment, grant or vesting of such compensation is tied to the achievement of one or more specific performance targets such that the compensation would not have been paid, granted or vested in light of such restatement. Any amounts required to be repaid shall be adjusted to take into account any taxes Mr. Ordan has already paid.
Pursuant to the terms of their inducement LTIP Unit award agreements executed in 2014, each of Messrs. Ordan, Richards, Gaffney, and Knerr has agreed, at our request, to promptly execute an amendment or modification of their respective agreements to reflect any clawback policy applicable to the executive’s inducement LTIP Units adopted by us or the Compensation Committee to comply with regulations promulgated by the SEC, NYSE, or under the Dodd‑Frank Act. The agreements for the Inducement Awards for Ms. Tehrani and each of the Glimcher Named Executives contain similar provisons.
Independent Compensation Advisor
The Compensation Committee selected Board Advisory as its compensation advisor for 2015. Board Advisory provides the Compensation Committee with peer executive compensation data, as well as expertise and advice on various matters brought before the Compensation Committee. The Compensation Committee has the sole authority to retain and terminate Board Advisory as its compensation consultant and approve fees and other engagement terms. Board Advisory has, through written correspondence, provided the Compensation Committee affirmation of the independence of Board Advisory, its partners, consultants, and employees as measured by the independence factors for compensation committee consultants under the listing standards of the NYSE. The affirmations were as follows:
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† | that Board Advisory does not provide any services to the Company except advisory services to the Compensation Committee; |
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† | that the amount of fees received by Board AdvisoryYale, received $15,000 from the Company is not material as a percentage of Board Advisory’s total revenue; |
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† | that Board Advisory has policies and procedures that are designed to prevent conflicts of interest; |
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† | that Board Advisory and its employees who provide services to the Compensation Committee do not have any business or personal relationship with any member of the Compensation Committee or any of our Senior Executives; and |
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† | that Board Advisory and its employees who provide services to the Compensation Committee do not own any Common Shares or preferred shares of the Company. |
Tax Treatment of Compensation
Substantially all of the services rendered by our Named Executives during 2015 are performed on behalf of WPG L.P. The Internal Revenue Service has issued a series of private letter rulings which indicate that compensation paid by an operating partnership to named executive officers of a REIT that serves as its general partner is not subject to limitation under Section 162(m) of the Internal Revenue Code, as amended (the “Code”) to the extent such compensation is attributable to services rendered to the operating partnership. Although we have not obtained a ruling on this issue, our management believes the positions taken in the rulings would apply to our operating partnership subsidiary as well. If we later determine that compensation paid by our operating partnership subsidiary to our named executive officers is subject to Section 162(m) of the Code, then this could result in an increase to our income subject to federal income tax and could require us to increase distributions to our shareholders in order to maintain our qualification as a REIT.
Company Consideration of Past Shareholder Voting Results in Determining Fiscal Year 2015 Executive Compensation
At our Company’s 2015 Annual Meeting of Shareholders (the “2015 Meeting”), we held for the first time a non-binding advisory vote on executive compensation. At that same meeting, our shareholders also voted in favor of our proposal to hold advisory shareholder votes on executive compensation on an annual basis. Over 97% of the Common Shares voted at our 2015 Meeting on the proposal relating to our executive compensation were in favor of the proposal. No changes or modifications to our executive compensation program or policies were made during fiscal year 2015 in response to2020 as reimbursement for premiums paid by him during 2020 for disability and life insurance policies covering him.
Cash Bonus Targets for 2020 Named Executive Officers
As shown by the voting results from the 2015 Meeting for the non-binding shareholder advisory vote on our executive compensation. Despite the positive response of our shareholders to the non-binding advisory proposal on executive compensation presented at the 2015 Meeting, our Board and Compensation Committee will continue to review and examine the results of non-binding advisory shareholder votes on executive compensation that we holdtable below, each Named Executive participant in the future in orderBonus Plan has a target bonus opportunity equal to discern any meaningful trends and to consider the voting results in lighta percentage of our existing governance policies and procedures, bylaws, as well as our executive compensation programs, policies, and objectives.
Summary Compensation Table & Other Supporting Tables
The following tables and accompanying footnotes set forth certain information with respect to the cash and other compensation paid or accrued by the Company for the Named Executives for fiscal years ended December 31, 2015 and, as applicable, December 31, 2014. All values statedbase salary. Dollar amounts are rounded to the nearest dollar.
SUMMARY COMPENSATION TABLE
Named Executive | | Target Bonus (% of Salary) | | | Target Bonus Payout Amount* | |
| Mr. Conforti | | | 150% | | | | $1,401,923 | |
| Mr. Yale | | | 125% | | | | $665,264 | |
| Mr. Demchak | | | 150% | | | | $623,077 | |
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Name and Principal Position
(a) | Year
(b) | Salary ($)
(c) | Bonus ($)
(d) | Stock Awards(2 ($)
(e) | Non-Equity Incentive Plan Compensation(3) ($)
(f) | All Other Compensation ($)
(g) | Total(11) ($)
(h) |
Michael P. Glimcher Vice Chairman of the Board and Chief Executive Officer | 2015
| $828,690(1)
| N/A
| $3,894,381 | $2,123,518 | $ 7,763(4)
| $6,854,352 |
Mark E. Yale Executive Vice President and Chief Financial Officer | 2015
| $500,000(1)
| N/A
| $1,301,356 | $ 843,750 | $ 10,400(4) | $2,655,506 |
Keric M. “Butch” Knerr Executive Vice President and Chief Operating Officer | 2015 2014 | $494,998 $154,603 | N/A $288,750 | $ 324,570 $1,013,983
| $1,169,433 N/A | $ 7,888(5)
| $1,996,889 $1,457,336 |
Thomas J. Drought, Jr. Executive Vice President, Director of Leasing | 2015
| $424,050(1)
| N/A
| $ 927,683 | $ 572,468 | $ 10,553(6)
| $1,934,754 |
Melissa A. Indest Senior Vice President, Finance and Chief Accounting Officer | 2015
| $282,442(1)
| N/A
| $ 626,900 | $ 285,973 | $ 10,400(4)
| $1,205,715 |
| Former Executive Officers |
Mark S. Ordan Former Chief Executive Officer and Executive Chairman (current Chairman of the Board) | 2015 2014 | $825,000 $597,945 | N/A $1,793,836 | $1,743,153 $5,299,505 | $1,985,156 N/A
| $ 55,388(7) $ 2,600 | $4,608,697 $7,743,886 |
C. Marc Richards Former Chief Financial Officer and Former Executive Vice President and Chief Administrative Officer | 2015 2014 | $450,000 $283,562 | N/A $ 393,750 | $ 316,937 $1,013,983 | $ 675,000 N/A
| $2,263,942(8) $ 9,000 | $3,705,879 $1,700,295 |
Farinaz S. Tehrani Former Executive Vice President, Legal and Compliance | 2015
| $343,269 | N/A
| $ 649,548 | $ 386,178 | $ 375,000(9)
| $1,753,995 |
Michael Gaffney Former Executive Vice President, Head of Capital Markets | 2015 2014 | $342,308 $187,397
| N/A $ 218,750 | $ 266,250 $ 506,991 | $ 342,308 N/A
| $ 353,188(10) $ 577 | $1,304,054 $ 913,715 |
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(1)* | RepresentsThe Total Bonus Payout Amount was calculated using the aggregate salary compensation received during fiscal year 2015 including the fourteen day period preceding the Merger Closing Date. |
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(2) | With respectactually paid to fiscal year 2015, the values represented for each Named Executive are the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 for the 2015 Annual Awards. Additionally, for Ms. Tehrani and the Glimcher Named Executives, in addition to the 2015 Annual Awards, the values represent the grant date fair value for the Inducement Awards and the Performance-Based LTIP Allocations. The grant date fair values for the Performance-Based LTIP Allocations and 2015 Annual Awards are based on the probable outcome of the performance conditions on the grant date (maximum achievement) for financial statement reporting purposes under FASB ASC 718 and consistent with the estimate of aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC 718, excluding the effect of estimated or actual forfeitures. The assumptions used in determining the listed valuations are provided in Part IV of the Original Filing in Item 15 entitled “Exhibits and Financial Statement Schedules” in note 9 of the notes to consolidated financial statements. |
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(3) | The listed amount represents cash bonus awards received by the respective Named Executive pursuant toduring the termscourse of fiscal year 2020 without accounting for the effect of the 2015 Plan.COVID-19 salary reductions implemented in April 2020. |
Performance Measures and Weightings
The Bonus Plan is funded if a specified threshold level of our Funds From Operations (“FFO”) per diluted WPG common share of beneficial interest, $0.0001 par value per share (a “Common Share” or, collectively, the “Common Shares” or “Common Stock”), as adjusted and described in more detail below, is achieved by WPG for fiscal year 2020.
Under the Bonus Plan, performance is measured in three categories with the following weightings for each Bonus Plan participant:
| Measure | Weighting |
(4)FFO Component | The listed amount represents the aggregate matching contributions made or credited by WPG for fiscal year 2015 under the WPG Plans. |
| 75% of Target Bonus Payout Amount |
(5)Strategic Objectives Component | The listed amount represents the aggregate matching contributions made or credited by WPG for fiscal year 2015 under the WPG Plans and health plan premium reimbursements. |
| 12.5% of Target Bonus Payout Amount |
(6)Individual Objectives Component | The listed amount represents $10,400 in matching contributions made by WPG for fiscal year 2015 under the WPG Plans plus health plan premium reimbursements. |
| 12.5% of Target Bonus Payout Amount |
(7) | Represents (a) the payment of $15,798 of legal fees (including a tax gross-up relating to payment of the fees) incurred by Mr. Ordan in connection with the negotiation of the Consulting Agreement which we agreed to pay pursuant to the terms of the Consulting Agreement, (b) matching contributions made or credited by WPG for fiscal year 2015 under the WPG Plans in the amount of $21,881, and (c) health plan premium reimbursements. |
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(8) | Represents Mr. Richards’ accrued severance payment plus $13,942 in matching contributions made or credited by WPG for fiscal year 2015 under the WPG Plans. |
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(9) | Represents Ms. Tehrani’s accrued severance payment. |
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(10) | Represents Mr. Gaffney’s accrued severance payment and $3,188 in matching contributions made or credited by the Company for fiscal year 2015 under the WPG Plans. |
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(11) | For each respective Named Executive, the amount listed represents the aggregate total of the amounts listed in columns (c) through (g). |
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
The Compensation Committee used its discretion to pay out the FFO Component of the cash bonus at 50% of target. The Compensation Committee determined that each of the Named Executives each achieved 100% of their respective individual goals and the Company achieved 100% of its strategic goals set by the Compensation Committee. The final total payouts of the Bonus Plan for fiscal year 2020 are set forth in column (e) of the Summary Compensation Table above.
Equity Compensation for Fiscal Year 2020
In 2020, equity awards were granted to the Named Executives in the form of one half PSUs and one half RSUs. The PSUs are earned from 0% -150% of the target number of PSUs awarded based on the Company’s relative total shareholder return (“TSR”) versus a predetermined retail REIT peer group over a three-year performance period. No PSUs or other performance equity awards were earned based on the Company’s TSR for fiscal year 2020. The previously awarded time based RSU equity grants continued to vest.
GRANTS OF PLAN-BASEDOUTSTANDING EQUITY AWARDS AT
FOR 2015FISCAL YEAR-END 2020
The following table and accompanying footnotes set forth certain information concerning grantsunvested RSUs and allocationsallocated yet unearned PSUs for each Named Executive that are outstanding or allocated as of cash and non-cash awards made to each of the Named Executives under the Company’s equity and non-equity incentive compensation plans during the fiscal year ended December 31, 2015.2020. All monetary values are rounded to the nearest dollar and, to the extent appropriate or necessary, all share or unit amounts are rounded to the nearest whole share or unit. None of the Named Executives has transferred any of the awards that he or she received during the fiscal year ended December 31, 2015.
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Name
(a) | Grant Date(1)
(b) | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(2) | Estimated Future Payouts Under Equity Incentive Plan Awards(3) | All Other Stock Awards: Number of Shares of Stock or Units (#)(4)
(h) | Grant Date Fair Value of Stock and Option Awards(5)
(i) |
Threshold ($)
(c) | Target ($)
(d) | Maximum ($)
(e) | Threshold (#)
(f) | Maximum (#)
(g) |
| Mr. Glimcher | 3/27/2015 2/24/2015 3/27/2015 2/24/2015 | $497,214 | $1,657,380 | $2,486,070 | N/A 2,353 15,954 |
N/A 235,318 119,772 |
79,849 N/A N/A |
$1,399,753 – Inducement Award $1,622,848 – Annual Award $871,780 – Performance Award |
Mr. Yale
| 3/27/2015 2/24/2015 3/27/2015 2/24/2015 | $187,500 | $ 625,000 | $ 937,500 | N/A 475 6,837 |
N/A 47,529 51,330 |
34,221 N/A N/A |
$599,894 – Inducement Award $327,848 – Annual Award $373,614 – Performance Award |
Mr. Knerr
| 3/27/2015 3/27/2015 | $259,874 | $ 866,247 | $1,299,371 | 471 |
47,053 |
N/A |
$324,570 – Annual Award |
| Mr. Drought | 3/27/2015 2/24/2015 3/27/2015 2/24/2015 | $127,215 | $ 424,050 | $ 636,074 | N/A 403 4,557 |
N/A 40,309 34,221 |
22,814 N/A N/A |
$399,929 – Inducement Award $278,671 – Annual Award $249,083 – Performance Award |
| Ms. Indest | 3/27/2015 2/24/2015 3/27/2015 2/24/2015 | $ 63,550 | $ 211,832 | $ 317,748 | N/A 201 3,420 |
N/A 20,136 25,665 |
17,110 N/A N/A |
$299,938 – Inducement Award $140,155 – Annual Award $186,807– Performance Award |
| Former Executive Officers |
| Mr. Ordan | 3/27/2015 3/27/2015 | $495,000 | $1,650,000 | $2,475,000 |
2,353 |
235,266 |
N/A |
$1,743,153 – Annual Award |
| Mr. Richards | 3/27/2015 3/27/2015 | $202,500 | $ 675,000 | $1,012,500 |
428 |
42,776 |
N/A |
$316,937 – Annual Award |
| Ms. Tehrani | 3/27/2015 2/24/2015 3/27/2015 2/24/2015 | $115,853 | $ 386,178 | $ 579,267 |
N/A 326 2,997 |
N/A 32,630 22,500 |
15,000 N/A N/A |
$262,950 – Inducement Award $222,828 – Annual Award $163,770 – Performance Award |
| Mr. Gaffney | 3/27/2015 3/27/2015 | $102,692 | $ 342,308 | $ 513,462 |
325 |
32,539 |
N/A |
$266,250 – Annual Award |
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(1) | Represents the Compensation Committee approval date for the respective award. |
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(2) | Amounts represent an estimate of possible cash payouts to the respective Named Executive pursuant to the terms of our 2015 Plan. The range of payments listed in columns (c) through (e) for each of the Named Executives represents the estimated possible bonus payment amounts under the 2015 Plan that the respective Named Executive would be eligible for under the following circumstances and assuming no use of discretion by the Compensation Committee in authorizing such payments: |
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Threshold: | The FFO Component of an individual’s bonus payment is awarded at Threshold level with payout equal to 35% of the FFO Target Amount and Threshold performance is attained for the Strategic Objectives Component and Individual Objectives Component with the payout for both the Strategic Objectives Target Amount and Individual Objectives Target Amount at the 25% level |
Target: | The FFO Component, Strategic Objectives Component, and Individual Objectives Component of an individual’s bonus payment is awarded at 100% of such person’s FFO Target Amount, Individual Objectives Target Amount, and Strategic Objectives Target Amount, respectively. |
Maximum: | The FFO Component of an individual’s bonus payment is awarded at 150% of his FFO Target Amount. The individual attains an achievement percentage of 150% for overall performance on his or her individual objectives and receives 150% of the Individual Objectives Target Amount and performance on the Strategic Objectives is evaluated at 150% and payout on the Strategic Objectives Target Amount is 150%. |
Actual payouts under the 2015 Plan are reported in column (f) of the Summary Compensation Table.
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(3) | The numbers shown represent an estimate of the number of LTIP Units that could be issued with respect to the 2015 Annual Awards and the Performance-Based LTIP Allocations at the threshold and maximum performance levels. There was no target level of performance. For the 2015 Annual Awards, maximum represents superior performance on the Strategic Goal Component and TSR Objectives such that the respective Named Executive qualifies to receive, in the form of granted LTIP Units, 100% of their respective 2015 LTIP Unit Allocation for maximum performance. Threshold performance is the minimum achievement resulting in the lowest number of LTIP Units earned by a Named Executive for the 2015 Annual Awards which would be represented by qualifying for only 1% of such person’s 2015 TSR LTIP Unit Allocation and 1% of the 2015 Strategic Goals LTIP Unit Allocation. For the Performance-Based LTIP Allocations, maximum performance consists of achievement of the absolute TSR and relative TSR conditions to qualify the Named Executive to receive 100% of the allocated LTIP Units in each of the three performance periods. Threshold performance is the minimum achievement of the TSR performance conditions that would result in the lowest number of LTIP Units earned. This would be achievement at the lowest level for the absolute TSR performance condition (33.3%) in each of the three performance periods. As a result of Ms. Tehrani and Messrs. Richards and Gaffney’s termination of employment, each was not eligible to receive any grants of LTIP Units from the 2015 Annual Awards. |
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(4) | Represents Inducement Awards to each of Messrs. Glimcher, Yale, Drought and Mmes. Indest and Tehrani. |
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(5) | The value represented for the respective Inducement Award, Performance-Based LTIP Allocations (for purposes of this table only, “Performance Award”), and 2015 Annual Awards of LTIP Units for each Named Executive was computed in accordance with FASB ASC Topic 718. |
Narrative to Summary Compensation Table and Grants of Plan‑Based Awards Table
The disclosures contained in the two preceding tables include both cash and equity compensation. For Named Executives that experienced an increase in total compensation from 2014 to 2015, this increase is mainly attributable to the increase in salary compensation and the payout for non-equity incentive compensation. Bonus payments from the 2015 Plan constituted the largest component of cash compensation reported. Generally, a Named Executive’s aggregate salary and bonus plan compensation account for approximately 43% to 83% of the individual’s total compensation. As stated in the CD&A, the employment agreements and Offer Letters governed the compensation elements for the Named Executives for 2015 and, as applicable, 2014.
The data listed in column (e) of the Summary Compensation Table and column (i) of the Grants Plan-Based Awards for 2015 table represents the aggregate grant date fair value for LTIP Unit awards and allocations to the Named Executives. We determined the aggregate grant date values by taking the closing market price of the Common Shares on the NYSE on the date of grant and multiplying it by the respective award received by or allocated to the respective Named Executive in the listed year. With respect to LTIP Unit awards and allocations that had a market-performance component impacting whether the award was earned, the aggregate grant date fair value was determined using the Monte Carlo simulation technique which establishes a value by first simulating one or more variables that may affect or influence the value of the allocated performance-based LTIP Units and then determines their average value over the range of resultant outcomes. The performance conditions of both the 2015 Annual Awards and Performance-Based LTIP Allocations are described in greater detail in the section of the CD&A subtitled Equity Compensation. The size of each Named Executive’s Inducement Award, 2015 Annual Award, and Performance-Based LTIP Allocations was determined pursuant to the terms of their employment agreement or Offer Letter. Quarterly dividends are paid on the Inducement Awards at same rates payable to the Common Shareholders on the Common Shares. No dividends, distributions, or dividend equivalents were paid or allocated during 2015 for the Performance-Based LTIP Allocations or 2015 Annual Awards. The value of dividend payments is factored into the grant date fair value reported in the preceding tables and computed in accordance with FASB ASC Topic 718.
OUTSTANDING EQUITY AWARDS AT
FISCAL YEAR-END 2015
The following table and accompanying footnotes set forth certain information concerning unexercised WP Glimcher Converted Options to purchase Common Shares, unvested WP Glimcher Converted Restricted Share Awards, unvested LTIP Units, and allocated yet unearned LTIP Units for each Named Executive that are outstanding or allocated as of December 31, 2015. None of the Named Executives has transferred any of the awards that are reported in the table below.
| | | Stock Awards | |
Name | | Number of Shares or Units of Stock That Have Not Vested (#) (a) | | | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) (b) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(2) (#) (c) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(3) ($) (d) | |
| Mr. Conforti | | 152,338 (4) | | | $991,720 | | | 86,620 | | | $563,896 | |
| Mr. Yale | | 19,504 (5) | | | $126,971 | | | 6,268 | | | $40,805 | |
| Mr. Demchak | | 16,254 (6) | | | $105,814 | | | 5,223 | | | $34,002 | |
iv | Payment and benefits to a Named Executive upon termination following a change in control |
In the event that during the respective employment period under any Employment Agreement either: (1) the Company terminates the employment of a Named Executive for any reason other than cause or due to the Named Executive’s death or disability or (2) the Named Executive terminates employment with the Company for good reason, in either case upon or within two (2) years after a change in control, then the Company shall pay to and provide the Named Executive with the following:
| a) | the Accrued Obligations; |
| c) | subject to the terminated Named Executive’s continued compliance with the Covenants and timely delivery of a Release, the following: |
| (I) | a Cash Severance Payment; |
| (II) | the Post-Employment Health Care Benefits; |
| (III) | full vesting of any outstanding RSUs (including PSUs converted into RSUs in connection with the change in control) or other service-based equity or equity-based awards; |
| (IV) | any PSUs that remain outstanding at the time of the termination of employment shall vest based on actual performance over the applicable performance period without regard to any applicable service vesting conditions; and |
| (V) | pro rata portion of the Named Executive’s Target Bonus Payout Amount for the year in which the termination of employment occurs, based on the portion of such year the Named Executive was employed. |
In the event of a change in control, with respect to any performance-based equity awards outstanding as of the date of the change in control, (A) the performance period shall be deemed to have ended on the date of the change in control and the attainment of the performance goals shall be calculated by reference to performance as of the date of the change in control, as determined by the Compensation Committee in good faith in its sole discretion and (B) the number of performance-based equity awards earned pursuant to clause (A) shall be converted to time-vesting RSUs which shall vest as follows: (I) if the surviving or successor entity in the change in control does not continue, assume or replace such RSUs with a substitute grant with the same intrinsic value (“Substitute Stock”), then such RSUs will vest on the date of the change in control; or (II) if the surviving or successor entity in the change in control continues, assumes or replaces such shares of stock with Substitute Stock, then such shares of Substitute Stock shall vest on the earlier of: (a) the last day of the original performance period (as set forth in the applicable award agreement between the Named Executive and the Company) if the Named Executive provides continuous service to the Company, the surviving or successor entity, or one of their respective affiliates until the last day of such performance period or (b) the date that the Named Executive’s service to the Company, the surviving or successor entity, or one of their respective affiliates is terminated under circumstances as more fully described in the respective Employment Agreement, as applicable.
With respect to benefits received by Messrs. Glimchertime-based equity awards outstanding as of the date of the change in control, such awards shall vest as follows: (A) if the surviving or successor entity in the change in control does not continue, assume or replace such RSUs with Substitute Stock, such RSUs will vest on the date of the change in control; or (B) if the surviving or successor entity in the change in control continues, assumes or replaces such shares of stock with Substitute Stock, then such shares of Substitute Stock shall vest on the earlier of: (I) the original vesting date or dates (as set forth in the applicable award agreement between the Named Executive and Yale underthe Company) if the Named Executive provides continuous service to the Company, the surviving or successor entity, or one of their respective equity award agreements following a termination of employment, each agreement acceleratesaffiliates through such vesting date or (II) the vestingdate that the Named Executive’s service to the Company, the surviving or successor entity, or one of their Inducement Awards. In the event that Mr. Glimcher’s employmentrespective affiliates is terminated by WPG other than for Cause (includingunder circumstances as a result of the non-renewal of his employment agreement by WPG), by Mr. Glimcher for good reason (as such term is definedmore fully described in the respective severance benefits agreements of Messrs. Glimcher and Yale), orEmployment Agreement, as a result of Mr. Glimcher’s death or Disability (defined below), and, with respect to WPG or Mr. Glimcher terminating employment, only following Mr. Glimcher executing (and not revoking) a general release of claims against the Company; all unvested Inducement Awards shall vest. With respect to Mr. Yale’s award agreement for his Inducement Awards, the same conditions exist for the acceleration of vesting of the underlying LTIP Units following the termination of Mr. Yale’s employment as exist for Mr. Glimcher. Also, the respective award agreements for Messrs. Glimcher and Yale subject each to certain restrictive covenants, including perpetual confidentiality and non-disparagement covenants, and one-year post-employment non-competition, non-solicitation of employees, customer, suppliers, licensees, or other business relations of our company and a non-hire covenant (all, collectively, the “Covenants”). Additionally, in the event that either of Messrs. Glimcher or Yale breach the Covenants in their respective award agreements then all unvested and vested Inducement Awards held by the respective officer will be forfeited. Lastly, Messrs. Glimcher and Yale also hold unvested restricted Common Shares that were converted from Glimcher restricted common shares to restricted Common Shares and vested stock options that were also converted from Glimcher stock options as part of the Merger. Under Messrs. Glimcher and Yale’s respective award agreements for the converted unvested restricted Common Shares and vested stock options each holds, upon the termination of their respective employment with WPG (orapplicable.
No Named Executive has any affiliate), for any reason (other than in connection with a termination covered by the Benefits Agreements (defined below)), all unvested restricted Common Shares and unexercised vested stock options shall immediately be forfeited; provided that the Compensation Committee may, in its sole and absolute discretion, allow the executive to retain the unvested restricted Common Shares and unexercised vested stock options for a period of time after such termination date.
With respect to Mr. Glimcher’s Agreement, he has no obligation to seek employment or take any other action in the event employment is terminated in order to mitigate amounts payable or level of benefits due under his Agreement.any Employment Agreement following a covered termination. Furthermore, nothing in Mr. Glimcher’sany Employment Agreement is intended to prevent or limit continuing or future participation in any plan, program, policy, contract, agreement, or practice provided by WPGthe Company or any affiliate and for which Mr. Glimchera Named Executive qualifies to participate. Also, under Mr. Glimcher’sthe Conforti Agreement, WPG will reimburse Mr. GlimcherConforti to the fullest extent permitted by law for legal fees and expenses reasonably incurred by Mr. GlimcherConforti as a result of Mr. Glimcher, WPG,Conforti, the Company, or others seeking to enforce the terms of the his Employment Agreement; provided, howeverhowever: (i) if such contest is initiated on or after a change in control or a change in control occurs during the pendency of such a contest, reimbursement of such fees and expenses will not be provided only to the extent thatif Mr. GlimcherConforti is found pursuant to a judgment, decree, or order to not have acted in good faith in bringing or defending the contest and (ii) if such contest is initiated prior to a change in control and a change in control does not occur during the pendency of the contest, reimbursement of Mr. Glimcher’sConforti’s legal fees and expenses shall be provided only if Mr. GlimcherConforti substantially prevails on at least one substantive issue in the contest. The aforementioned provisions are not present in Mr. Yale’s Agreement. Lastly, under the Agreements, both of Messrs. Yale and Glimcher are subject to the Covenants.
Payments to and benefits for Messrs. Glimcher and Yale following a change in control are set forth in the severance benefits agreements (each, collectively and generally, the “Benefits Agreements”) for each which are contracts assumed by WPG and amended in connection with the Merger. The change in control payments and benefits under the Benefits Agreements are structured as “double trigger” benefits in that the change in control does not itself trigger the payments and benefits; rather, benefits and payments only become due in the event of a qualifying termination of employment in connection with or following the change in control. The Benefits Agreements are unique in that the change in control event occurred following the consummation
Definitions Used Above
For purposes of the Mergerdiscussion and the only condition that needs to occur for payments and benefits to be made is the qualifying termination of employment. The Benefits Agreements and the Agreements are structured such that payments and benefits to either Messrs. Glimcher or Yale could be due and payable under both following their respective terminations. Under the Benefits Agreements, the conditions for the receipt of benefits and payments are the same for Messrs. Glimcher and Yale. Similar to the Agreements, neither Messrs. Yale or Glimcher need to mitigate payments or benefits due under their respective Benefits Agreements following their respective terminations by seeking other employment nor is the amount due or benefitdisclosures provided reduced by compensation earned in subsequent employment or retirement benefits received after termination. Additionally, like the Agreements, the Benefits Agreements inure to the benefit of and are binding on the respective legal representatives, successors, heirs, and legatees of Messrs. Glimcher and Yale. The Benefits Agreements also condition payment on the respective execution, delivery and non-revocation by Messrs. Glimcher and Yale of a release of claims against WPG, its directors, officers, employees and affiliates as well as the expiration of the thirty day period following the respective termination (the “Release Period”) in which revocation can occur, before any payments under the Benefits Agreements can be made. The conditions under which payments and benefits are made under the Benefits Agreements and the nature of those payments and benefits are summarized below.
Under the Benefits Agreements, if either Messrs. Glimcher or Yale’s respective employment is terminated: (i) by the Company without Cause (including as a result of the Company issuing a notice of nonrenewal of either of the Agreements); (ii) by Messrs. Glimcher or Yale, respectively, for good reason (as such term is defined in the respective severance benefits agreements of Messrs. Glimcher and Yale); or (iii) as a result of the respective death or Disability (defined below) of Messrs. Glimcher or Yale, thenabove, the following payments and benefitsdefinitions shall be made not later than following the expiration of the Release Period (the “Release Deadline”):apply:
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(1) | Glimcher Properties Limited Partnership (“GPLP”), an affiliate of WPG, shall pay a lump sum severance payment equal to three (3) times the aggregate sum of: (A) the respective executive’s annual base salary in effect immediately prior to the effective time of the Merger plus (B) the target annual cash bonus opportunity applicable to the respective executive under the applicable cash bonus plan(s) in which the respective executive participates in the year in which the effective time of the Merger occurs. |
The immediate vesting of any WP Glimcher Converted Restricted Share Awards, WP Glimcher Converted Options, Inducement Awards, and Performance-Based LTIP Allocations held by the respective executive which are unvested on the date of termination of the respective executive’s employment, and such vested securities, if applicable,
“cause” shall become exercisable and remain exercisable until the earlier of the second annual anniversary of the date of the termination of the respective executive’s employment and the expiration of the original term of the option, shall no longer be subject to repurchase or any other forfeiture restrictions, and shall be settled in accordance with their terms. For any current Special Performance Period, or completed Special Performance Period as to whichmean (i) a grant of Performance-Based LTIP Unit Allocations has not been made by the date of the respective executive’s termination of employment, Performance-Based LTIP Unit Allocations shall be (A) granted on the fifth (5th) business day following the Release Deadline based (I) as to a current Special Performance Period, on actual performance through the date of the Executive’s termination of employment (projected to the end of the applicable performance period for absolute, but not for relative, performance goals), with the amount earned not pro-rated for the partial completion of the Special Performance Period, and (II) as to a completed Special Performance Period as to which a grant of Performance-Based LTIP Unit Allocations has not been made by the date of the respective executive’s termination of employment, on actual performance through the end of such Special Performance Period, with the amount earned not pro-rated, and (B) vested without regard to any applicable service vesting condition upon grant.
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(2) | GPLP shall for a period of eighteen months fund the premium equal to that provided under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, or COBRA, to continue coverage of all medical, dental, and vision group insurance benefit programs or arrangements in which the respective executive was entitled to participate immediately prior the termination of employment, provided that the respective executive’s continued participation is allowable under the general terms and provisions of such plans and programs and provided further, that in the event that the respective executive becomes employed by any third party during such 18-month period, then upon the date of such employment the Executive shall no longer be entitled to any medical, dental, or vision insurance benefits described in the preceding clause. Subject to the preceding sentence, in the event that the Executive’s participation in any such plan or program is barred, WPG shall arrange to pay the value of the COBRA premium at the pricing to the Executive as it existed at the time the termination of the Executive’s employment occurs. If the Company reasonably determines necessary to avoid benefits under the plans referenced in this paragraph being taxable to the Executive, WPG shall report the value of such continued coverage as taxable income to the Executive. |
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(3) | In the event the aforementioned payments constitute an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code (or for which a tax is otherwise payable under Section 4999 of the Code), then GPLP shall pay an additional amount (the “Additional Amount”) equal to the sum of: (A) all taxes payable by the respective executive under Section 4999 of the Code with respect to all such excess parachute payments (or otherwise) including, without limitation, the Additional Amount, plus (B) all federal, state and local income taxes for which the respective executive may be liable with respect to the Additional Amount or with respect to any excess parachute payment that is paid following the Effective Time, as soon as reasonably practicable after the date of such payment provided that such date will be no later than December 31st of the year after the year in which the respective executive remits such taxes in respect of such payment. |
Mr. Drought and Ms. Indest
Payments and benefits to Ms. Indest and Mr. Drought following a termination or a change in control are structured similarly to how the arrangements with Messrs. Glimcher and Yale are structured, except neither has an employment agreement with the Company under which payments or benefits would be due following such an event. Both Mr. Drought and Ms. Indest executed an amendment to their existing Benefits Agreements in connection with the Merger and as a condition precedent to their respective Offer Letters becoming effective. Like the amended Benefits Agreements for Messrs. Glimcher and Yale, the change in control payments and benefits under the amended Benefits Agreements for Mr. Drought and Ms. Indest are structured as “double trigger” benefits and the initial condition of a change in control has occurred with the completion of the Merger. The termination condition for both Mr. Drought and Ms. Indest is satisfied if the employment of the respective executive is terminated by the Company without Cause, by the executive for good reason (as such term is defined in the respective Benefits Agreements of Mr. Drought and Ms. Indest), or as a result of the executive’s death or Disability (defined below). Similar to Messrs. Yale and Glimcher, following the termination event and not later than the Release Deadline, Mr. Drought would be entitled to the same payments and benefits that Messrs. Glimcher and Yale are entitled to receive. Following a termination event as described in her amended Benefits Agreement and not later than the Release Deadline, Ms. Indest would be entitled to all the same benefits except the lump sum severance payment is to be two (2) times the aggregate sum of: (i) her annual base salary in effect immediately prior to the effective time of the Merger plus (ii) her target annual cash bonus opportunity under the applicable plan in effect in the year in which the effective time of the Merger occurs. Lastly, each of Mr. Drought and Ms. Indest hold vested stock options and unvested restricted Common Shares and, like Messrs. Glimcher and Yale, upon their termination for any reason such unvested restricted Common Shares and unexercised stock options would be forfeited, except as set for the in the Benefits Agreements, unless the Compensation Committee decided to allow retention of the unvested restricted Common Shares and unexercised vested stock options for a period of time after such termination date.
The table below and its accompanying footnotes illustrate for Messrs. Glimcher, Yale, Drought and Ms. Indest the various payments and benefits due each respective Glimcher Named Executive under their respective employment arrangements, Benefits Agreements, and equity award agreements each has following the employment terminations described above. As stated earlier, the amounts in the table are provided under the assumptions that the employment termination occurred on the last business day of fiscal year 2015, December 31, 2015, when the closing market price of the Company’s Common Stock was $10.61 per share, there is no underlying dispute concerning the termination, and the Compensation Committee did not exercise any discretion in approving any of the payments or benefits described below. All amounts are rounded to the nearest dollar.
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| | Termination by
Us for Cause or by the Executive
without Good
Reason1 | Termination Due
to Non‑Renewal
of Employment Period by Company or Executive2 | Termination by Us Other Than for Cause, by the Executive for Good Reason, Death or Disability of Executive4 |
| Mr. Glimcher | | | |
| Payment and benefits under Benefits Agreements | N/A | $13,878,080 | $13,878,080 |
| Payment under the Agreements | $836,814 | $ 836,814 | $ 836,814 |
| Equity Award Vesting Benefits | N/A | $ 7,727,486 | $ 7,727,486 |
| Total | $836,814 | $22,442,380(3) | $22,442,380(3) |
| Mr. Yale | | | |
| Payments under Benefits Agreements | N/A | $ 5,754,201 | $ 5,754,201 |
| Payment under the Agreements | $502,405 | $ 502,405 | $ 502,405 |
| Equity Award Vesting Benefits | N/A | $ 1,954,521 | $ 1,954,521 |
| Total | $502,405 | $ 8,211,127(3) | $ 8,211,127(3) |
| Mr. Drought | | | |
| Payment under Severance Benefits Agreement | N/A | N/A | $ 4,234,614 |
| Equity Award Vesting Benefits | N/A | N/A | $ 1,259,237 |
| Total | N/A | N/A | $ 5,493,851 |
| Ms. Indest | | | |
| Payment under Severance Benefits Agreement | N/A | N/A | $ 1,482,861 |
| Equity Award Vesting Benefits | N/A | N/A | $ 354,629 |
| Total | N/A | N/A | $ 1,837,490 |
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(1) | Pursuant to the Agreements for Messrs Glimcher and Yale, following the termination of employment for Cause or by the respective executive without good reason, payment would consist of the respective executive’s (A) annual base salary through the date of termination, which for Mr. Glimcher would be $825,000 and for Mr. Yale would be $500,000; (B) vacation pay through the date of termination, which for Mr. Glimcher would be $3,173 and for Mr. Yale would be $1,923; and (C) the respective executive’s unreimbursed business expenses as of the date of termination which for Mr. Glimcher would be $8,641 and for Mr. Yale would be $482. Because the termination is for Cause, the payout would not include accrued annual bonus for the fiscal year immediately preceding the fiscal year in which the termination date occurred. There would be no payments or benefits payable to Messrs. Yale or Glimcher under the Benefits Agreements following a for Cause termination or termination without good reason. No acceleration of outstanding vesting of equity awards is available following a termination for Cause or by the executive without good reason. Neither Mr. Drought nor Ms. Indest are entitled to any payments or benefits under their respective Offer Letters, Benefits Agreement, or equity award agreements following a termination for Cause or without good reason. |
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(2) | Values listed consist of the following for the listed persons under the stated circumstance. For Mr. Glimcher, payments under the: (A) Benefits Agreement are only for the non-renewal of the employment term by the Company resulting in a payment of three times the sum of his annual base salary in effect immediately prior to the effective time of the Merger which was $875,500 and target bonus under the 2015 Plan of $1,657,380; funding of premiums for COBRA benefits for an 18 month period equal to $31,560 (inclusive of a 2% administrative fee); and payment of the Additional Amount equal to $6,247,880; B) Agreement for termination of employment period by either the Company or Mr. Glimcher resulting in payments as described in footnote 1 above; and (C) vesting (pursuant to the Benefits Agreements) of all of Mr. Glimcher’s outstanding restricted stock holdings (648,472) and unvested LTIP Unit holdings (79,849) at December 31, 2015 and valued at $10.61 per share/unit. With respect to Mr. Yale, payments under the: (A) Benefits Agreement are also only for the non-renewal of the employment term by the Company resulting in a payment of three times the sum of his annual base salary in effect immediately prior to the effective time of the Merger which was $500,000 and target bonus under the 2015 Plan of $625,000; funding of premiums for COBRA benefits for an 18 month period equal to $31,560 (inclusive of a 2% administrative fee); and payment of the Additional Amount equal to $2,347,641; (B) Agreement for termination of the employment period by either the Company or Mr. Yale resulting in payments as described in footnote 1 above; and (C) vesting (pursuant to the Benefits Agreements) of all of Mr. Yale’s outstanding restricted stock holdings (149,994) and unvested LTIP Unit holdings (34,221) at December 31, 2015 and valued at $10.61 per share/unit. Because Mr. Drought and Ms. Indest are employees at-will and have no employment term, there would be no payment or benefits received for a lawful termination of Mr. Drought’s or Ms. Indest employment by the Company or either executive. |
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(3) | Total is for circumstance where respective employment term of Mr. Glimcher and Mr. Yale is terminated by the Company. In the event termination of the employment term is by Mr. Glimcher or Mr. Yale, respectively, then such executive would only receive payments pursuant to the Agreements has detailed in footnote 1 above. |
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(4) | With respect payments for Messrs. Glimcher and Yale, the basis for any payments or benefits following a termination of employment of either person by the Company for other than Cause or by the respective executive for good reason is reflected in footnote 2 above. With respect to Mr. Drought and Ms Indest, in the event of a termination of employment by the Company for other than Cause or by the executive for good reason, payments and benefits would be authorized by Benefits Agreement as follows: (A) payment to Mr. Drought of three times the sum of his annual base salary in effective immediately prior to the effective time of the Merger which was $412,000 and target bonus under the 2015 Plan of $424,050; funding of premiums for COBRA benefits for an 18 month period equal to $31,560 (inclusive of 2% administrative fee); and payment of the Additional Amount equal to $1,694,904; and (B) payment to Ms. Indest of two times the sum of her annual base salary in effective immediately prior to the effective time of the Merger which was $250,000 and target bonus under the 2015 Plan of $211,832; (C) funding of premiums for COBRA benefits for an 18 month period equal to $1,298 (inclusive of 2% administrative fee); and (D) payment of the Additional Amount equal to $557,899. Additionally, Mr. Drought would be entitled to vesting (pursuant to the Benefits Agreements) of all of Mr. Drought’s outstanding restricted stock holdings (95,870) and unvested LTIP Unit holdings (22,814) at December 31, 2015 and valued at $10.61 per share/unit. Ms. Indest would be entitled to vesting (pursuant to the Benefits Agreements) of all of her outstanding restricted stock holdings (16,314) and unvested LTIP Unit holdings (17,110) at December 31, 2015 and valued at $10.61 per share/unit. |
With respect to Messrs. Yale and Glimcher, the Agreements provide that the Accrued Obligations include the respective executive’s accrued annual bonus for the fiscal year immediately preceding the fiscal year in which the termination date occurs if such bonus has not been paid as of the date of termination. However, these amounts were not included in the table above for Messrs. Yale and Glimcher because fiscal year 2014 bonuses were approved by the compensation committee of the Glimcher Board of Trustees and paid as of the December 31, 2015 presumed termination date. With respect to the Performance-Based LTIP Unit Allocations, no payout under the respective Benefits Agreements was disclosed in the tables above because for the current Special Performance Period, actual performance of the Company’s TSR goals for the Common Shares through December 31, 2015 does not result in any grant of LTIP Units under the absolute or relative performance goals for the current Special Performance Period. Furthermore, no Special Performance Period has been completed, so there would be no payout on that basis.
Definitions for Cause and Disability Used Above
“Cause” shall mean: (i) the Glimcher Named Executive’s (the “Executive”) willful failure to perform or substantially perform the Named Executive’s material duties with the Company; (ii) illegal conduct or gross misconduct by the Named Executive that, in either case, is willful and demonstrably and materially injurious to the Company’s business, financial condition or reputation, or, in the good faith determination of the Board, is potentially materially injurious to the Company’s business, financial condition or reputation; or (iii) a willful and material breach by the Named Executive of thethat Named Executive’s obligations under the Benefits Agreement or the Agreement,respective Employment Agreements, including without limitation, a material and willful breach of the restrictive covenants and confidentiality provisions set forth in the Agreement;Covenants; or (iv) the Named Executive’s conviction of, or entry of a plea of guilty or nolo contendere with respect to, a felony crime or a crime involving moral turpitude, fraud, forgery, embezzlement or similar conduct; provided, however, that the actions in (i), (ii) and (iii) above will not be considered Causecause unless the Named Executive has failed to cure such actions within thirty (30) days of receiving written notice specifying, with particularity, the events allegedly giving rise to Causecause; and, further provided, that such actions will not be considered Causecause unless the Company provides the Executive withsuch written notice of the events allegedly giving rise to Cause within ninety (90) days of any executive officer of the Company (excluding the respective Named Executive, if applicable at the time of such notice) or, with respect to Mr. Conforti, any member of the Board having knowledge of the relevant action. Further, no act or failure to act by the Named Executive will be deemed “willful” unless done or omitted to be done not in good faith or without reasonable belief that such action or omission was in the Company’s best interests, and any act or omission by the Named Executive pursuant to authority given pursuant to a resolution duly adopted by the Board or on the advice of counsel for the Company will be deemed made in good faith and in the best interests of the Company.
Additional language in “Cause” definition applicable only to Mr. Glimcher:
The Executive will not be deemed to be discharged for Cause unless and until there is delivered to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than two-thirds of the entire membership of the Board (excluding the Executive), at a meeting called and duly held for such purpose (after reasonable notice to Executive and an opportunity for the Executive and the Executive’s counsel to be heard before the Board), finding in “good faith that Executive is guilty of the conduct set forth above and specifying the particulars thereof in detail.
“Disability”reason” shall mean the “permanent and total disability” of the Glimcher Named Executive’s as defined in Section 22(e)(3) of the Code, or any successor provision thereto.
Potential Payments upon Termination or Change in Control for Messrs. Knerr and Ordan
Mr. Knerr
With respect to Mr. Knerr, payments and benefits for any termination of employment or in connection with a change in control are governed by his employment agreement and equity award agreement.
Cash payments payable to Mr. Knerr in the event of a termination of employment or change in control are set forth in his employment agreement. With respect to a termination of Mr. Knerr’s employment, if termination is by the Company other than for “Cause” (defined below) or by Mr. Knerr for “Good Reason” (defined below) (within six months after the Good Reason event), then subject to Mr. Knerr timely executing (and not revoking) a general release of claims against the Company, Mr. Knerr is entitled to receive the following payments and benefits from the Company on the fifth business day after the expiration of the release execution and revocation period:
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(i) | if a change in control has not occurred within the 24 months prior to Mr. Knerr’s termination of employment, a lump sum cash payment equal to his annual base salary in effect immediately prior to the date of termination which if the termination occurred on December 31, 2015 the payment would be $495,000; or |
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(ii) | if a change in control has occurred within 24 months prior to Mr. Knerr’s termination of employment, a lump sum cash payment of $1,361,247 which is the sum of Mr. Knerr’s: (1) annual base salary in effect immediately prior to the date of termination ($495,000) and (2) target annual bonus for the year in which the date of termination occurs ($866,247), and (3) unless otherwise agreed to by Mr. Knerr, the waiver of any service‑based vesting conditions with respect to any outstanding long‑term incentive awards held by Mr. Knerr. |
At December 31, 2015, Mr. Knerr held 22,500 unvested inducement LTIP Units which using the closing price of the Common Shares on December 31, 2015 had a value of $238,725. Additionally, pursuant to the terms of Mr. Knerr’s inducement LTIP unit award agreement executed in fiscal year 2014, in the event the Company terminates Mr. Knerr’s employment other than for Cause or Mr. Knerr terminates his employment for Good Reason, in each case in accordance with the terms of his employment agreement (subject to Mr. Knerr executing (and not revoking) a general release of claims against the Company), all remaining unvested inducement LTIP Units will vest. Mr. Knerr’s employment agreement does not provide for any payments or equity acceleration in the event of his disability or death or termination of employment by the Company for cause or by Mr. Knerr without good reason. Lastly pursuant to Mr. Knerr’s inducement LTIP unit award agreement, he is subject to the Covenants. In the event Mr. Knerr’s breaches any of the Covenants then all his unvested and vested inducement LTIP units will be forfeited.
Defined Terms
“Cause”means: (i) Mr. Knerr’s willful failure to perform or substantially perform his duties with the Company; (ii) illegal conduct or gross misconduct by Mr. Knerr that is willful and demonstrably and materially injurious to the Company’s business, financial condition or reputation; (iii) Mr. Knerr’s indictment for, or entry of a plea of guilty or nolo contendere with respect to, a felony crime or a crime involving moral turpitude, fraud, forgery, embezzlement or similar conduct; or (iv) Mr. Knerr’s willful and material breach of any noncompetition or nonsolicitation restrictive covenants or confidentiality provisions set forth in any written agreement with the Company; provided, however, that an action in (i) or (iv) above will not be considered Cause unless Mr. Knerr has failed to cure such action (to the sole satisfaction of the Company) within thirty (30) days after receiving written notice from the Company specifying with particularity the events allegedly giving rise to Cause.
“Good Reason” means the occurrence of any one of the following events without the prior written consent of Mr. Knerr:the respective Named Executive: (i) a material reduction in the Named Executive’s annual base salary or a material diminution of Mr. Knerr’s base pay,the Named Executive’s duties or responsibilities, authorities, powers or functions as of the Effective Date;functions; or (ii) a relocation that would result in the Named Executive's (excluding Mr. Knerr’sConforti) principal location of employment being moved fifty (50)thirty-five (35) miles or more away from his or herthe Named Executive's (excluding Mr. Conforti) principal locationplace of employment as of the Effective Datedate of the respective Employment Agreement and, as a result, the Executive’sNamed Executive's (excluding Mr. Conforti) commute increasing by fifty (50)35 miles or more; or (iii) the failureany material breach of the respective Employment Agreement by the Company, including without limitation any material breach of the award agreements contemplated hereby or the Named Executive (excluding Mr. Conforti) being required to obtain a satisfactory agreement from any successorreport other than directly to the CompanyCEO or the Board or, with respect to assumeMr. Conforti, being required to report other than solely and performdirectly to the obligationsBoard; or (iv) the Company’s issuance to the Named Executive of a notice of non-renewal; provided, however, that the Company hereunder as contemplated by Section 4.8 of Mr. Knerr’s employment agreement; provided, however, that an action describedactions in (i) through (iii) above will not be considered Good Reasongood reason unless the Mr. Knerr has givenNamed Executive shall describe the basis for the occurrence of the good reason event in reasonable detail in a notice of termination provided to the Company written notice thereofin writing within sixty (60) days after its occurrence, specifying with particularityof the action that givesNamed Executive’s knowledge of the actions giving rise to Good Reason,the good reason, and the Company has failed to remedy such action within sixty (60) days after receiving such notice.
Mr. Ordan
On May 31, 2015, WPG entered into the Consulting Agreement with Mr. Ordan, which provides that, as of January 1, 2016 (the "Transition Date"), Mr. Ordan will (i) cease to be an employee of WPG and Executive Chairman of the Board and will instead serve as the non-executive Chairman of the Board, and (ii) provide consulting services to the Board and the Company’s Chief Executive Officer through May 28, 2017 (the “Consulting Period”) unless his services are earlier terminated in accordance with the Consulting Agreement.
From the Transition Date, the Consulting Agreement supersedes Mr. Ordan's employment agreement, subject to certain limited exceptions set forth in the Consulting Agreement. The Consulting Agreement's effectiveness was contingent on Mr. Ordan remaining employed with WPG through December 31, 2015. If Mr. Ordan's employment with WPG was terminated for any reason prior to January 1, 2016, the Consulting Agreement would have been null and void and the terms of his employment agreement would have controlled. Given that Mr. Ordan was not terminated prior to December 31, 2015 and the Consulting Agreement as well as the terms of any effective equity award agreements are the relevant documents now in force, the disclosure in this section as it pertains to potential payments to Mr. Ordan following the termination of services or a change in control will deal solely with the applicable terms and conditions in the Consulting Agreement and any effective equity award agreements as those are the documents that control in the event of an actual termination of Mr. Ordan’s services or a change in control. Additionally, for purposes of disclosure relating only to Mr. Ordan, we assume the triggering event occurred on January 1, 2016, but will continue to use $10.61 for the last closing market price for the Common Shares as that price was the most recently available price on January 1, 2016.
During the term of the Consulting Agreement, Mr. Ordan receives the following compensation: (i) an annualized cash consulting fee of $350,000 (payable in equal monthly installments) (the "Consulting Fee"), (ii) while he is a member of the Board, an annual retainer (pro-rated for the period from the Transition Date through May 28, 2016) in the same amount and in the same form as other non-employee independent members of the Board, and (iii) while he is non-executive Chairman of the Board, an additional annual cash retainer of $100,000 (pro-rated for the period from the Transition Date through May 28, 2016) in respect of his services as non-executive Chairman of the Board, paid at the same time as the annual retainer.
The Consulting Agreement also provides that Mr. Ordan is entitled to: (i) an annual cash bonus in respect of the Company’s 2015 fiscal year based on actual performance, (ii) on December 31, 2015, full vesting of any then unvested inducement LTIP units; provided that such inducement LTIP units will be convertible into units of WPG L.P., and such units exchangeable into Common Shares or cash, on the later of (1) the satisfaction of any conditions to exchange or conversion contained in WPG L.P.'s limited partnership agreement and the applicable certificate of designation and (2) the first to occur of (A) Mr. Ordan ceasing to serve as a member of the Board for any reason, (B) May 28, 2017, or (C) immediately prior to a change in control (as defined in the employment agreement), and (iii) the ability to earn an annual LTIP award in respect of fiscal year 2015, subject to achievement of applicable performance targets, with any such annual LTIP award to be fully vested on the date of grant. The Consulting Agreement provides that, other than as described above, all equity awards held by Mr. Ordan as of the Transition Date which are then unvested shall be forfeited, and any right Mr. Ordan had under his employment agreement to receive grants of equity awards on or following the date of the Consulting Agreement shall be forfeited.
The Consulting Period may be terminated by Ordan or WPG at any time and for any reason (or no reason) by providing the other party with not less than 30 days advance written notice of such termination. Additionally, the Consulting Period will terminate immediately upon Ordan accepting full-time employment with another employer.
Except as further explained below, upon the termination of the Consulting Period, Mr. Ordan shall cease receiving the Consulting Fee, and shall only be entitled to any accrued but unpaid portion of the Consulting Fee through the date of the termination of the Consulting Period plus any incurred but unpaid business expenses that are properly submitted under WPG’s expense reimbursement policy (the “Accrued Amounts”). If the Consulting Agreement is terminated in this manner, other than the Accrued Amounts, WPG shall have no further liability to Ordan in his capacity as a consultant to WPG. The termination of the Consulting Period shall have no impact on Ordan’s continued position on the Board.
Notwithstanding anything discussed above to the contrary, in the event that the Consulting Period is terminated by WPG other than for “Cause” (as defined below) or by Ordan for “Good Reason” (as defined below), the Company shall pay to Ordan (i) the Accrued Amounts and (ii) within ten (10) business days following such termination, any portion of the Consulting Fee that would have been payable through May 28, 2017 had such termination not occurred, and which remains unpaid as of the date of such termination (with no duty of mitigation and no offset for other earnings). If the Consulting Agreement is terminated in this manner, other than the payment described in the preceding sentence and the Accrued Amounts, WPG shall have no further liability to Ordan in his capacity as a consultant to WPG.
For purposes of this section regarding Mr. Ordan, “Cause” means, (i) Mr. Ordan’s willful failure to perform or substantially perform the services under the Consulting Agreement; (ii) illegal conduct or gross misconduct by Ordan in the performance of the such services that is willful and demonstrably and materially injurious to WPG’s business, financial condition or reputation; (iii) a willful and material breach by Ordan of his obligations under the Consulting Agreement or the release attached thereto (including for the avoidance of doubt any provisions of the Mr. Ordan’s employment agreement surviving) or that certain letter from Ordan to WPG dated the same date as the Consultant Agreement; (iv) Mr. Ordan’s conviction of, or entry of a plea of guilty or nolo contendere with respect to, a felony crime or a crime involving moral turpitude, fraud, forgery, embezzlement or similar conduct; provided, however, that the actions in (i) and (iii) above will not be considered Cause unless Ordan has failed to cure such actions within thirty (30) days of receiving writtensuch notice fromof termination (and if the Board specifying, with particularity,Company does effect a cure within that period, such notice of termination shall be ineffective) and, provided, furtherthat the events allegedly giving rise to Cause and further provided that such actionsaction in (iv) above will not be considered Causegood reason unless the Board provides written notice within ninety (90) days of any memberNamed Executive shall duly serve through the end of the Board’s (excluding Ordan if applicable atthen-applicable employment period. Unless the time of such notice) having knowledge ofNamed Executive gives the relevant action. Further, no act or failure to act by Ordan will be deemed “willful” unless done or omitted to be done not in good faith or without reasonable belief that such action or omission was in WPG’s best interests, and any act or omission by Ordan pursuant to authority given pursuant toCompany a resolution duly adopted by the Board or on the advice of counsel for WPG will be deemed made in good faith and in the best interests of WPG. The Consulting Period will not be deemed to have been terminated by WPG for Cause unless and until there is delivered to Ordan a copy of a resolution duly adopted by the affirmative vote of not less than two thirds (2/3) of the entire membership of the Board (excluding Ordan, if he is then a member of the Board), at a meeting called and duly held for such purpose (after reasonable notice to Consultant and an opportunity for Ordan and Ordan’s counsel to be heard before the Board), finding in good faith that Ordan has engaged in the conduct set forth above and specifying the particulars thereof in detail.
WPG; provided, however, that any such breach will not be considered Good Reason unless Ordan shall provide notice of such breach to WPG in writing within sixty 60 days of Ordan’s knowledge of such breach, and WPG has failed to cure such breach within thirty (30) days of receiving such written notice. Unless Ordan gives WPG written notice of any such breachtermination for good reason within 120 days of the initial existence of such breachany event which, after any applicable notice and the lapse of any applicable 30-day grace period, would constitute Good Reason,good reason, such breachevent will cease to be an event constituting Good Reason.good reason.
Payments Made to Messrs. Richards
“disability”shall mean the “permanent and Gaffney and Ms. Tehrani Upon Terminationtotal disability” of Employment
We entered into an employment agreement with Mr. Richards, datedthe Named Executive as defined in Section 22(e)(3) of June 3, 2014,the Internal Revenue Code of 1986, as amended (the “Richards Agreement”“Code”) which was, or any successor provision thereto.
“change in control”shall mean the happening of any of the following events:
| (i) | any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust of the Company or any of its subsidiaries), together with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Exchange Act) of such person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing twenty-five percent (25%) or more of the Company’s then outstanding voting securities entitled to vote generally in the election of directors; |
| (ii) | individuals who, immediately following the consummation of the distribution of the Common Stock to the shareholders of Simon Property Group, Inc. (if reference is the Washington Prime Group, L.P. 2014 Stock Incentive Plan (the “2014 Plan”)) or the Company (if reference is to 2019 Washington Prime Group, L.P. Stock Incentive Plan), constitute the Board (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 May 6, 2014 whose election, or nomination for election by the Company’s shareholders, 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 or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board; |
| (iii) | a reorganization, merger or consolidation of the Company, in each case unless, following such reorganization, merger or consolidation, (A) more than sixty percent (60%) of the combined voting power of the then outstanding voting securities of the corporation resulting from such reorganization, merger or consolidation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Company’s outstanding voting securities immediately prior to such reorganization, merger or consolidation in substantially the same proportions as their beneficial ownership, immediately prior to such reorganization, merger or consolidation, of the Company’s outstanding voting securities, (B) no person (excluding the Company, any employee benefit plan or related trust of the Company or such corporation resulting from such reorganization, merger or consolidation and any person beneficially owning, immediately prior to such reorganization, merger or consolidation, directly or indirectly, twenty-five percent (25%) or more of the Company’s outstanding voting securities) beneficially owns, directly or indirectly, twenty-five percent (25%) or more of the combined voting power of the then outstanding voting securities of the corporation resulting from such reorganization, merger or consolidation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger or consolidation; |
| (iv) | the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation with respect to which following such sale or other disposition (A) more than sixty percent (60%) of the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners of the Company’s outstanding voting securities entitled to vote generally in the election of directors immediately prior to such sale or other disposition in substantially the same proportion as their beneficial ownership, immediately prior to such sale or other disposition, of the Company’s outstanding voting securities, (B) no person (excluding the Company, any employee benefit plan or related trust of the Company or such corporation and any person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, twenty-five percent (25%) or more of the Company’s outstanding voting securities) beneficially owns, directly or indirectly, twenty-five percent (25%) or more of the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company; or |
| (v) | approval by the shareholders of the Company of a complete liquidation or dissolution of the Company. |
Additionally, to the extent the impact of a change in control on a payment would subject a Named Executive to additional taxes under the Code, a change in control for purposes of such payment will mean both a change in control and a “change in the same form as the employment agreement with Mr. Knerr. On January 15, 2016 (the “Separation Date”), Mr. Richards’ employment with our company as Executive Vice President, Chief Administrative Officer was terminated thereby terminating his employment agreement.
Mr. Richard’s termination was deemed to be a termination other than for “cause” under the Richards Agreement, entitling him to receive certain payments under the Richards Agreement upon our receiptownership of a general releasecorporation,” “change in the effective control of claims. Following our receipta corporation,” or a “change in the ownership of such release ona substantial portion of a corporation’s assets” within the meaning of Section 409A of the Code and the expiration of the revocation period, Mr. Richards received: (i) a lump sum cash payment equal to $2,250,000 which equaled the sum of two times Mr. Richards’: (1) annual base salary in effect immediately priorregulations promulgated thereunder as applied to the Separation Date which was $450,000 and (2) target annual cash bonus underCompany.
“date of termination” shall mean (i) if the 2015 Plan which was $675,000 and (ii) upon expiration of the relevant waiting period, accelerated vesting of 22,500 unvested LTIP Units (the “Units”) heldNamed Executive’s employment is terminated by Mr. Richards. In the general release Mr. Richards executed in connection with the termination of his employment, Mr. Richards forfeited any right to receive any payout of performance-based LTIP Units allocated to Mr. Richards pursuant to the award agreement for the Units.
With respect to Mr. Gaffney, the employment agreement between Mr. Gaffney and the Company terminated on December 31, 2015 when Mr. Gaffney’s employment as the Company’s Executive Vice President, Head of Capital Markets was terminated without “cause” (as defined in the employment agreement by and among the Company and Mr. Gaffney, dated as of June 3, 2014). Similar to the Richards Agreement, Mr. Gaffney’s employment agreement entitled him to receive a severance payment following a termination(A) for cause or (B) for any reason other than for cause, subjector due to the Company receiving a general release of claims from Mr. Gaffney. Following our receipt of such release on and the expiration of the revocation period, Mr. Gaffney received: a lump sum cash payment equal to $350,000 which equaled Mr. Gaffney’s annual base salary in effect on the date immediately precedingNamed Executive’s death or disability, the date of his termination. Additionally, pursuantreceipt of the notice of termination or any later date specified therein (which date shall not be more than thirty (30) days after the giving of such notice), (ii) if the Named Executive’s employment is terminated by reason of death or by the Company for disability, the date of death of the Named Executive or the disability effective date, as the case may be, (iii) if the Named Executive’s employment is terminated by the Named Executive for good reason or without good reason, thirty (30) days from the date of the Company’s receipt of the notice of termination, or such later date as is mutually agreed by the Company and the Named Executive (subject to the terms of his equity award agreement for his unvested and outstanding LTIP Unit holdings,Company’s right, if applicable, to cure the vestinggood reason event), or (iv) if Named Executive’s employment is terminated as a result of the 11,250 unvested LTIP Units held by Mr. Gaffney was accelerated.
In connection with hisCompany’s issuance to him of a notice of non-renewal, the date of termination Mr. Gaffney entered into a Transition and Consulting Agreement (the “Gaffney Agreement”), effective as of January 1, 2016 (the “Effective Date”), pursuant to which Mr. Gaffney is to provide consulting and advisory services to the Company with respect to matters within the scope of his knowledge and expertise for a term of one month commencing on January 1, 2016; provided, that, onshall be the last day of the applicable employment period or such one-month period, and on the last day of each subsequent one-month period, the term shall automatically extend for one additional month unless and until terminatedlater date as is mutually agreed by the Company or Mr. Gaffney for any reason (orand the Named Executive. Notwithstanding the foregoing, in no reason) by providing the other party with not less than ten (10) days advance written notice of such termination, except in the case of a termination for “cause” (as such term is defined in the Gaffney Agreement), which would be effective immediately (the “Gaffney Consulting Period”). Under the Gaffney Agreement, Mr. Gaffneyevent shall receive a monthly consulting fee of $43,750 payable on or around the 15th day of each month during the Gaffney Consulting Period. In the event that the Gaffney Consulting Period is terminated for cause, Mr. Gaffney will be required to repay a prorated portion of the Consulting Fee based on the number of days remaining in the Gaffney Consulting Period as of the date of such termination. The Company terminatedtermination occur until the Consulting Agreement without cause effective March 31, 2016.
For Ms. Tehrani, her employment also terminated atNamed Executive experiences a “separation from service” within the closemeaning of business on December 31, 2015. Her severance arrangement is similar to Mr. Gaffney and Mr. Richards in that under her employment agreement she was entitled to a severance payment following a termination by the Company not for cause and after execution of general release of claims. Additionally, her equity award agreement provided for the accelerationSection 409A of the vesting of any outstandingCode and, unvested LTIP Units she held. Following WPG’s receipt ofnotwithstanding anything contained herein to the release subsequent expiration of the release revocation period, Ms. Tehrani received a lump sum cash payment equal to $375,000 which equaled Ms. Tehrani’s annual base salary in effect oncontrary, the date immediately precedingon which such separation from service takes place shall be the date of her termination and, upon expiration oftermination.
Director Compensation
During 2020, the relevant waiting period, the vesting accelerated for the 15,000 unvested LTIP Units she held.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee currently consists of Messrs. Louis G. Conforti, Robert J. Laikin, Niles C. Overly, and Ms. Jacquelyn R. Soffer. Following the consummation of the Merger on the Merger Closing Date, Mr. Overly was appointed to the Compensation Committee. The aforementioned persons were the only individuals who were members of the Compensation Committee during fiscal year 2015. The Board has appointed the Compensation Committee (or a duly authorized subcommittee thereof) to serve as the administrator of the Company’s compensation and equity-based plans. The Compensation Committee is the administrator for the WGPLP Plan, Glimcher Realty Trust Amended and Restated 2004 Incentive Compensation Plan (the “2004 GRT Plan”), and the Glimcher Realty Trust 2012 Incentive Compensation Plan (the “2012 GRT Plan”). The Company assumed the 2004 GRT Plan and 2012 GRT Plan in connection with the Merger, but all equity awards issued by the Company during 2015 were from the WPGLP Plan.
As the administrator, the Compensation Committee determines the number of options and other awards granted to the directors and employees of the Company under the WPGLP Plan and, the 2004 GRT Plan and 2012 GRT Plan, to the extent that outstanding awards from those plans, are modified or adjusted. None of the current members of the Compensation Committee are or were ever officers and/or employees of the Company or any of its subsidiaries. During the fiscal year ended December 31, 2015, no member of our Compensation Committee had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K. None of our Senior Executives serve on a board of directors or compensation committee of a company that has an executive officer serving on the Board or Compensation Committee.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis section with management. Based upon this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the Proxy Statement.
The Compensation Committee has furnished the foregoing report.
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March 18, 2016 | | Niles C. Overly, Chairperson | | Lois Conforti |
| | Robert J. Laikin | | Jacquelyn R. Soffer |
COMPENSATION RISK ASSESSMENT
In addition to the risk oversight responsibilities of the Board and Audit Committee, the Compensation Committee conducts, in accordance with applicable SEC rules, an annual risk assessment of the Company’s compensation plans, policies, programs, and practices to determine whether such plans, policies, programs, and practices create risks that are reasonably likely to have a material adverse effect on the Company. The review conducted by the Compensation Committee focused on a number of aspects relating to our compensation program, but primarily on whether any compensation related risks have developed inherently or otherwise in connection with the merger integration or if any compensation incentives have been adopted that encourage high risk behavior at the expense or detriment of long-term Company value and which are reasonably likely to create a material adverse effect. Based on this assessment, the Compensation Committee concluded that the Company’s compensation plans, policies, programs, and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.
As part of its assessment, the Compensation Committee evaluated the Company’s compensation plans and programs, including the plans and policies relating to the Company’s salaried compensation, cash incentive plans, and long-term equity incentive awards, to determine their propensity to cause undue risk taking by employees, including the Company’s Senior Executives, relative to the level of risk associated with the Company’s business model and operations. At December 31, 2015, our company, on a consolidated basis, had approximately 580 employees, of which approximately 130 were part‑time. These employees were generally paid in accordance with Glimcher pay practices as we continue to complete the Merger integration. With regard to executive compensation in 2015, the emphasis is on long‑term performance in addition to traditional salaried and cash incentive compensation. Furthermore, the Company incorporates a number of design features to mitigate undue risk in its compensation programs including, limits on both annual and long-term incentive plan payouts, the use of multiple performance metrics to measure individual and corporate performance, stock ownership guidelines, and equity compensation that encourages a long-term perspective on performance. The Company has a clawback policy applicable to performance‑based compensation as well as internal controls and financial transparency that limit the degree of financial risk that can be undertaken without scrutiny. The Compensation Committee completed its annual assessment in late 2015 as part of its obligation to oversee the Company’s compensation risk assessment process and made the findings summarized above available to the full Board.
COMPENSATION OF OUR DIRECTORS
Director Compensation
On May 21, 2015, our Board, upon the recommendation of both our Governance and Nominating Committee and our Compensation Committee, approved annual compensation for the period from May 28, 2015 to May 28, 2016 (the “Governance Year”) for each of the independentnon-employee members of our Board which then included Messrs. Conforti, Overly, Laikin and White and Ms. Soffer. Each independent director’s annualreceived a compensation totaled $200,000 based onpackage consisting of a combination of quarterly cash payments and an equity grant made in May 2020 (the “Director Retainer Package”). The aggregate value of the Director Retainer Package is $230,000, with $110,000 in cash and restricted stock units (“RSUs”) awarded from$120,000 in equity. In addition, the WPGLP Plan The compensation structure for the Board’s independent directors for the Governance Year was exactly the same as the compensation structure for the comparable period during 2014 and 2015. The annual compensation for the Governance Year is allocated as follows: (a) 60% in RSUs, equal to $120,000, and (b) 40%Board Chairman receives an additional retainer of $220,000 in cash compensation, equalfor his service in the role.
Board members were permitted to $80,000. Paymentelect to receive some or all of the cash portion isof the Director Retainer Package in the form of RSUs (the “Equity Election”) that would vest on the same schedule as the RSUs that comprise the equity portion of the Director Retainer Package from May to the following May. As reflected in the table below, Mr. Birge made the Equity Election in quarterly installments. Cash compensation for2019 and 2020 in which the entire cash portion of his retainer was paid in RSUs, and Mr. Niles C. Overly, who began servingLaikin made the Equity Election in 2019 that resulted in a portion of the cash retainer received during the first half of 2020 being paid in RSUs granted in the prior year.
RSUs vest, subject to the Board member’s continued service, over one year, and will be convertible into a Common Share when the Board member’s service on the Board on the Merger Closing Date, was pro-rated for the quarterly period during which hisends. For fiscal year 2020, outstanding RSUs held by non-employee incumbent Board service commenced.
In connection with the RSU awards, we entered into an RSU award agreement with each independent director, pursuant to which each independent director was granted 8,403 RSUs, which number of RSUs was determined by dividing $120,000 by $14.28, the closing price of the Common Shares on May 21, 2015. Each RSU represents a contingent right to receive one Common Share, and each independent director’s RSUs will vest on May 28, 2016, subject to such director’s continued membership on the Board. In the event the independent director leaves the Board, he or she will receive one Common Share for each vested RSU. Additionally, pursuant to their applicable RSU awards agreements, while the award is outstanding, each independent director is also paidmembers earned Common Share dividend equivalent payments in connection with our quarterly dividend payments for the Common Shares, in cash, equal to regular cash dividends declared by the Board with respect to the Common Shares and actually paid on the Common Shares, regardless of whetheruntil such dividends were suspended by the RSUs have vested.Company in April 2020. The value of any dividend equivalent payments made during 2020 is factored into the grant date fair value reported in the table below and computed in accordance with FASB ASC Topic 718.
The following table and accompanying footnotes and narrative discussion below set forth certain information with respect to the cash and other compensation paid or accrued by the Company for services rendered by the personsnon-employee directors serving on the Board during the fiscal year ended December 31, 2015.2020. All values stated are rounded to the nearest dollar.
DIRECTOR COMPENSATION TABLE FOR
THE YEAR 20152020(1)
Name | | Fees Earned or Paid in Cash(2) ($) | | | Stock Awards(3) ($) | | | All Other Compensation(4) ($) | | | Total(5) ($) | |
| (a) | | (b) | | | (c) | | | (d) | | | (e) | |
| John J. Dillon III | | $110,000 | | | $120,002 | | | $0 | | | $230,002 | |
| Robert J. Laikin | | $275,000 | | | $120,002 | | | $0 | | | $395,002 | |
| John F. Levy | | $110,000 | | | $120,002 | | | $0 | | | $230,002 | |
J. Taggart (“Tag”) Birge(6) | | $0 | | | $175,004 | | | $0 | | | $175,004 | |
Jacquelyn R. Soffer(7) | | $110,000 | | | $120,002 | | | $0 | | | $230,002 | |
| Sheryl G. von Blucher | | $110,000 | | | $120,002 | | | $0 | | | $230,002 | |
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Name
(a) | Fees Earned or Paid in Cash ($)
(b) | Stock Awards(2) ($)
(c) | All Other Compensation(3) ($)
(d) | Total(4) ($)
(f) |
| Louis G. Conforti | $80,000 | $119,995 | $0 | $199,995 |
| Robert J. Laikin | $80,000 | $119,995 | $0 | $199,995 |
| Niles C. Overly | $69,600 | $164,389 | $0 | $233,989 |
| Jacquelyn R. Soffer | $80,000 | $119,995 | $0 | $199,995 |
| Marvin L. White | $80,000 | $119,995 | $0 | $199,995 |
| (1) | |
1. | Messrs. Michael P. Glimcher, Mark Ordan, David Simon, and Richard S. Sokolov, who were directorsMr. Louis G. Conforti, our CEO, served on the Board during all or a portion of fiscal year 2015, are not included in this table because they2020, but did not receive any compensation for their service as a director.non-independent employee Board member. The compensation received by Messrs. Ordan and GlimcherMr. Conforti for their respectivehis service during 20152020 as our Chief Executive Officer and Mr. Ordan’s later service as our Executive ChairmanCEO is set forth in the Summary Compensation Table. Mr. Simon’s term ended following the 2015 Meeting and Mr. Sokolov resigned from the Board on February 24, 2016. |
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2. | |
| (2) | For the respective named director, the amounts listed represent fees paid in cash. Mr. Birge made the Equity Election in both 2019 and 2020 to receive the entire cash portion of the Director Retainer Package in equity for the periods May 2019 to May 2020 and May 2020 to May 2021. Additionally, Mr. Laikin made the Equity Election in 2019 to receive $110,000 of his cash compensation for the period May 2019 to May 2020 in equity; this amount was granted in RSUs in May 2019 and therefore is not reflected in the table. |
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| (3) | Represents the grant date fair value computed in accordance with FASB ASC Topic 718 of the RSUs granted to the listednamed directors during 2015.2020 as part of the Director Retainer Package. For a description of the assumptions used in computing the aggregate grant date fair values of these awards, refer to Part IV of the Original Filing of the Form 10-K in Item 15 entitled “Exhibits and Financial Statement Schedules” in note 98 of the notes to consolidated financial statements. ExceptThe RSU holdings at December 31, 2020 for Mr. Overly, each of the named directors held 14,783 RSUs at December 31, 2015.are as follows: (a) Messrs. Dillon and Levy – 27,252 each, (b) Mr. Overly received two grantsLaikin – 33,460, (c) Mr. Birge – 39,334 and (e) Ms. von Blucher – 26,963. The aggregate number of RSUs in 2015; one grant of 2,532 RSUs following his election to the Board after the Merger Closing Date and the other during the annual grants to directors in May. Mr. Overly owned 10,935 RSUs and 6,582 WP Glimcher Converted Options at December 31, 2015. The aggregate WP Glimcher Converted Options and WP Glimcher Converted Restricted Share Award held by Mr. Michael P. GlimcherConforti at the end of fiscal year 20152020 is reported in the footnotes to the table entitled “Outstanding Equity Awards at Fiscal Year-End 2015. The stock option awards held by Mr. Overly at December 31, 2015 are a byproduct of the conversion of his GRT stock options at the Merger Closing Date into WP Glimcher Converted Options using the Equity Award Exchange Ratio. |
| 2020.” |
3. | |
| (4) | The total value of all perquisites and other personal benefits received by the respective named director during the fiscal year ended December 31, 20152020, if any, was less than $10,000, and therefore is not included in this table. |
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4.(5) | For each respective named director, the amount listed represents the aggregate total of the amounts listed in columns (b) through (d). |
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| (6) | Mr. Birge had made an election in 2019 to take all of his Board fees in equity of the Company. |
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| (7) | Ms. Soffer resigned from the Board on December 28, 2020. |
Effective February 1, 2021, the Company and Board members agreed to convert the director compensation program to a cash program paid quarterly in advance. In connection with that determination, the directors forfeited 50% of the equity award made in May 2020 and received a cash payment equal to the grant date fair value of the forfeited equity. The members of the Board who are a part of the Strategic Alternatives Committee are entitled to additional compensation equal to $4,000 per month paid in advance effective January 1, 2021 (i.e., $12,000 for January, February and March 2021). Additionally, for fiscal year 2021, the cash payment for each independent director will be $230,000, other than Mr. Laikin, who shall receive a cash payment of $450,000 for service as Chairman of the Board.
Item12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The tables and accompanying footnotes set forth below under the heading “Security Ownership of Certain Beneficial Owners & Management” provide the beneficial ownership information for each incumbent director, the Named Executives, and all directors and Senior Executives of the Company as a group of WPG’sthe Company’s Common Shares and other equity securities as well as all other persons or entities known by the Company to be beneficial owners of more than five percent of WPG’sthe Company’s outstanding Common Shares and such other classes of equity securities of WPGthe Company as of April 27, 2016,29, 2021, except as otherwise noted. All partial Common Shares and units have been rounded up to the next whole Common Share or unit. The table under the heading “Equity Compensation Plan Information” discloses information about Common Shares issued or available to be issued pursuant to our equity compensation plans as of December 31, 2015.2020.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS & MANAGEMENT
COMMON STOCK OWNERSHIP
|
| | |
Name of Beneficial Owner(1) | Amount Beneficially Owned(2), (3) | Percent Of Class |
Michael P. Glimcher
|
1,059,000(6)
| (5)
|
Mark E. Yale
| 228,469(7)
| (5)
|
Keric M. “Butch” Knerr
| 6,823(8)
| (5)
|
Thomas J. Drought, Jr.
|
137,343(9)
| (5)
|
Melissa A. Indest
|
45,815(10)
| (5)
|
Mark S. Ordan
|
55,332(11)
|
(5)
|
C. Marc Richards
|
0(12)
| (5)
|
Farinaz S. Tehrani
|
0(12)
| (5)
|
Michael Gaffney
|
0(12)
| (5)
|
Louis G. Conforti
|
14,783(13)
| (5)
|
Richard J. Laikin
|
54,783(14)
| (5)
|
Niles C. Overly
|
53,298(15)
| (5)
|
Jacquelyn R. Soffer
|
114,783(16)
| (5)
|
Marvin L. White
|
19,783(17)
| (5)
|
BlackRock, Inc | 19,596,905(18)
| 10.58%(4)
|
The Vanguard Group | 26,317,396(19)
| 14.20%(4)
|
Vanguard Specialized Funds – Vanguard
REIT Index Fund
| 13,354,262(20)
| 7.21%(4)
|
All directors and executive
officers as a group (11 persons(21))
| 1,652,869 |
(5)
|
| | | |
|
| Louis G. Conforti | 145,951 | |
7.5% SERIES H PREFERRED STOCK OWNERSHIP |
Name of Beneficial Owner(1)(5)
| Amount
Beneficially
Owned(2), (3)
| Percent
Of
Class
|
Heitman Real Estate Securities LLC
| | | |
| Mark E. Yale | 46,139 | (6) |
502,408(22)(3)
| 12.56%(4)
|
6.875% SERIES I PREFERRED STOCK OWNERSHIP | | | |
Name of Beneficial OwnerRobert P. Demchak
| 23,625 | (1)(7) | Amount
Beneficially
Owned(2), (3)
| Percent
Of
Class
|
Heitman Real Estate Securities LLC
| | | |
| J. Taggart (“Tag”) Birge | 28,389 | (8) |
(3)
507,999
|
| | | |
| John J. Dillon III | 17,590 | (23)(9) | 13.37%(3)
|
| | | |
| Robert J. Laikin | 56,121 | (10) | (3) |
| | | |
| John F. Levy | 19,235 | (11) | (3) |
| | | |
| Sheryl G. von Blucher | 20,079 | (12) | (3) |
| | | |
| The Vanguard Group | 1,898,472 | (13) | 7.76%(4) |
| | | |
| Charles Schwab Investment Management, Inc. | 1,157,491 | (14) | 4.73%(4) |
| | | |
| All directors and executive officers as a group (11 persons) | 389,587 | (15) | (3), (4) |
| |
| (1) | Unless otherwise indicated in the footnotes below, the address for each beneficial owner listed is 180 East Broad Street, Columbus, Ohio 43215. |
| |
| (2) | Certain directors and Senior Executives of the Company own O.P. Units which may (at the holder's election) be redeemed at any time for, at the sole option of WPG L.P., cash (at a price equal to the fair market value of an equal number of Common Shares), Common Shares on a one-for-one basis, or any combination of cash and Common Shares (issued at fair market value on a one-for-one basis). |
| |
(3) | Unless otherwise indicated in the footnotes below, the listed beneficial owner has sole voting and investment power with respect to the Common Shares. |
| |
| (3) | As applicable and as of April 29, 2021, the percentage ownership of the listed person or group does not exceed one percent (1%) of WPG's outstanding Common Shares. Common Shares 7.5% Series H Cumulative Redeemable Preferred Sharesissuable upon exercise of Beneficial Interest (“Series H Preferred Stock”)stock options and the 6.875% Series I Cumulative Redeemable Preferredredemption RSU holdings are included in the adjacent column for the listed person only to the extent the related stock options and RSUs are exercisable or convertible into Common Shares of Beneficial Interest (“Series I Preferred Stock”), as applicable.within sixty (60) days following April 29, 2021. |
| |
| (4) | For the entity or group listed, the Percent of Class was computed based on185,310,857 24,459,645Common Shares outstanding as of April 27, 201629, 2021 and in the case of all directors and executive officers as a group, the number of Common Shares issuable upon the exercise of vested stock options and the redemptionconversion of O.P. Units or LTIP Unitsvested RSUs held by all such members of such group.group in addition to the number of Common Shares outstanding on April 29, 2021. Common Shares issuable upon exercise of vested stock options and RSU holdings and LTIP Units are included only to the extent the related stock options RSUs, and LTIP UnitsRSUs are exercisable or convertible into Common Shares within sixty (60) days following April 27, 2016. With respect to WPG's preferred stock, the Percent of Class for the Series I Preferred Stock is based on 3,800,000 shares outstanding as of April 27, 2016 and for the Series H Preferred Stock, the Percent of Class is based on 4,000,000 shares outstanding as of April 27, 2016.29, 2021. |
| (5) | As applicable and as April 27, 2016, the percentage ownership of the listed person does not exceed one percent (1%) WPG's outstanding Common Shares. |
| |
(6) | Includes 775,017Represents 102,888 unrestricted Common Shares held directly by Mr. Glimcher, 99Conforti. Also includes Mr. Conforti’s 43,063 vested RSUs of which 1,643 of these RSUs represent a contingent right to receive one Common Share per vested RSU upon Mr. Conforti leaving the Board and the remaining 41,420 vested RSUs will be settled for Common Shares held directlyon a one-for-one basis by Mr. Glimcher’s spouse, and 31,976 Common Shares held in two trusts for the benefit of Mr. Glimcher’s nieces and nephews over which Mr. Glimcher serves as trustee. Also includes 193,110 O.P. Units held directly by Mr. Glimcher and 58,798 fully vested WP Glimcher Converted Options. Of Mr. Glimcher’s 775,017 Common Shares, 648,472 are WP Glimcher Converted Restricted Share Awards that have transfer restrictions that lapse at various dates in the future. or before March 15, 2022. Excluded from the total are: (i) 19,962 vested LTIP Units 110,918 unvested RSUs of which may9,258 RSUs will vest in February 2022, 46,104 RSUs will vest in installments in February 2022 and February 2023, and 55,556 RSUs shall vest in one-third installments in August 2022, 2023 and 2024; provided, in each instance that Mr. Conforti is in continued compliance with certain covenants in the Conforti Agreement and subject to certain provisions of such agreement relating to a change in control of the Company. Also excludes 152,491 unearned and unvested PSUs. These PSUs shall be converted (at Mr. Glimcher’s option) into a correspondingearned based upon the satisfaction of certain TSR criteria with the number of O.P. UnitsPSUs Mr. Conforti can earn varying based on the Company’s TSR performance over a one-for-one basisthree-year performance period established at the time the respective PSU is allocated; provided, in each instance that Mr. Conforti is in continued compliance with certain covenants in the Conforti Agreement and subject to the terms and conditionscertain provisions of such agreement relating to a change in control of the applicable certificateCompany. The RSUs and PSUs each represent a contingent right to receive one Common Share. All vesting of designation that relatesthe aforementioned securities is subject to Mr. Conforti’s continued employment on the units, (ii) 154,414 unvested LTIP Units, and (iii) 119,772 Performance-Based LTIP Allocations.date the respective security vests or is earned. None of Mr. Glimcher’sConforti’s holdings are pledged as collateral or security.
|
| |
(7) | Includes 208,870
|
| (6) | Represents 37,781 Common Shares held directly by Mr. Yale and 19,599 fully8,358 vested WP Glimcher Converted Options. Of Mr. Yale’s 208,870RSUs which are to be settled for Common Shares 149,994 are WP Glimcher Converted Restricted Share Awards that have transfer restrictions that lapse at various dates in the future.on a one-for-one basis by or before March 15, 2022. Excluded from the total are: (i) 8,555 vested LTIP Units11,146 unvested RSUs of which may1,925 RSUs will vest in February 2022 and 9,221 RSUs which shall vest in installments in February 2022 and 2023; provided, in each instance that Mr. Yale is in continued compliance with certain covenants in the Yale Agreement and subject to certain provisions of such agreement relating to a change in control of the Company, and (ii) 19,609 unearned and unvested PSUs which shall be converted (atearned based upon the satisfaction of certain relative TSR criteria with the number of earned PSUs ranging from 0% to 150% of the allocated amount awarded to Mr. Yale based on the Company’s TSR performance over the three-year performance period established at the time the respective PSU is allocated; provided, in each instance that Mr. Yale is in continued compliance with certain covenants in the Yale Agreement and subject to certain provisions of such agreement relating to a change in control of the Company. The RSUs and PSUs each represent a contingent right to receive one Common Share. All vesting of the aforementioned securities is subject to Mr. Yale’s option) into a corresponding number of O.P. Unitscontinued employment on a one-for-one basis subject to the terms and conditions ofdate the applicable certificate of designation that relates to the units, (ii) 44,677 unvested LTIP Units, and (iii) 51,330 Performance-Based LTIP Allocations.respective security vests or is earned. None of Mr. Yale’s holdings are pledged as collateral or security. |
| |
(8) | Includes 6,823
|
| (7) | Represents 16,660 unrestricted Common Shares held directly by Mr. Knerr. Demchak and 6,965 vested RSUs of which are to be settled for Common Shares on a one-for-one basis by or before March 15, 2022. Excluded from the total are: (i) 7,500 vested LTIP Units 9,289 unvested RSUs of which may1,605 RSUs will vest in February 2022 and (ii) 7,684 RSUs shall vest in installments in February 2022 and 2023; provided, in each instance that Mr. Demchak is in continued compliance with certain covenants in his employment agreement and subject to certain provisions of such agreement relating to a change in control of the Company. Also excludes 16,341 unearned and unvested PSUs which shall be converted (at Mr. Knerr’s option) into a correspondingearned based upon the satisfaction of certain relative TSR criteria with the number of O.P. Unitsearned PSUs ranging from 0% to 150% of the allocated amount awarded to Mr. Demchak based on a one-for-one basisthe Company’s TSR performance over the three-year performance period established at the time the respective PSU is allocated; provided, in each instance that Mr. Demchak is in continued compliance with certain covenants in his employment agreement and subject to the terms and conditionscertain provisions of such agreement relating to a change in control of the applicable certificateCompany. The RSUs and PSUs each represent a contingent right to receive one Common Share. All vesting of designation that relates to the units, (ii) 41,321 unvested LTIP Units, and (iii) 30,000 performance-based LTIP Unit allocations awarded aforementioned securities is subject to Mr. Knerr in 2014.Demchak’s continued employment on the date the respective security vests or is earned. None of Mr. Knerr’sDemchak’s holdings are pledged as collateral or security. |
| |
(9) | Includes 126,369 Common Shares held directly by Mr. Drought and 10,974 fully vested WP Glimcher Converted Options. Of Mr. Drought’s 126,369 Common Shares, 95,870 are WP Glimcher Converted Restricted Share Awards that have transfer restrictions that lapse at various dates in the future. Excluded from the total are: (i) 5,704 vested LTIP Units which may be converted (at Mr. Drought’s option) into a corresponding number of O.P. Units on a one-for-one basis subject to the terms and conditions of the applicable certificate of designation that relates to the units, (ii) 33,234 unvested LTIP Units, and (iii) 34,221 Performance-Based LTIP Allocations. None of Mr. Drought’s holdings are pledged as collateral or security.
|
| |
(10) | Includes 31,445 Common Shares held directly by Ms. Indest and 14,370 fully vested WP Glimcher Converted Options. Of Ms. Indest’s 31,445 Common Shares, 16,314 are WP Glimcher Converted Restricted Share Awards that have transfer restrictions that lapse at various dates in the future. Excluded from the total are: (i) 4,278 vested LTIP Units which may be converted (at Ms. Indest’s option) into a corresponding number of O.P. Units on a one-for-one basis subject to the terms and conditions of the applicable certificate of designation that relates to the units, (ii) 20,886 unvested LTIP Units, and (iii) 25,665 Performance-Based LTIP Allocations. None of Ms. Indest’s holdings are pledged as collateral or security.
|
| |
(11)(8) | Includes 45,0003,145 unrestricted Common Shares held directly by Mr. Ordan, 5,000 Common Shares held in a trust for the benefitBirge as well as 25,244 RSUs that are vested or will vest within sixty (60) days of Mr. Ordan’s child, and 5,332 unvested RSUs Mr. Ordan received in January 2016 as a portion of his compensation for serving on the Board.April 29, 2021. Vested RSUs represent a contingent right to receive one Common Share. Upon Mr. OrdanBirge leaving the Board, he will receive one Common Share for each vested RSU that he holds. Excluded from the total are: (i) 94,106 vested LTIP Units which may be converted (at Mr. Ordan’s option) into a corresponding number of O.P. Units on a one-for-one basis subject to the terms and conditions of the applicable certificate of designation that relates to the units and (ii) 153,610 vested LTIP Units held by Mr. Ordan that are not eligible to be converted into O.P. Units until the later of: (a) the satisfaction of any conditions to exchange or conversion contained in the WPG L.P. partnership agreement and certificate of designation and (b) the first to occur of (I) Mr. Ordan ceasing to serve as a member of the Board for any reason, (II) May 28, 2017, or (III) immediately prior to a change in control (as defined in Mr. Ordan’s now terminated employment agreement). None of Mr. Ordan’sBirge’s holdings are pledged as collateral or security. |
| |
(12)(9) | Excludes vested LTIP Units the named individual holds which may be converted into a corresponding number of O.P. Units on a one-for-one basis (at such person’s option), subject to the terms and conditions of the applicable certificate of designation(s). For Mr. Richards, 30,000 vested LTIP Units are excluded and for Ms. Tehrani and Mr. Gaffney, 15,000 vested LTIP Units for each are excluded. |
| |
(13) | Reflects Mr. Conforti’s holdings of 14,783Represents 17,590 RSUs of which 6,380 RSUsthat are vested and 8,403 RSUsor will vest within 60sixty (60) days of April 27, 2016.29, 2021. Vested RSUs represent a contingent right to receive one Common Share. Upon Mr. ConfortiDillon leaving the Board, he will receive one Common Share for each vested RSU that he holds. |
| None of Mr. Dillon’s holdings are pledged as collateral or security. |
(14) | |
| (10) | Includes 40,00032,323 unrestricted Common Shares held directly by Mr. Laikin, as well as 14,78324,634 Common Shares held indirectly through Mr. Laikin’s retirement account and 23,798 RSUs of which 6,380 RSUsthat are vested and 8,403 RSUsor will vest within 60sixty (60) days of April 27, 2016.29, 2021. Vested RSUs represent a contingent right to receive one Common Share. Upon Mr. Laikin leaving the Board, he will receive one Common Share for each vested RSU that he holds. |
| None of Mr. Laikin’s holdings are pledged as collateral or security. |
(15) | |
| (11) | Includes 35,7811,645 unrestricted Common Shares held directly by Mr. Overly, 6,582 fully vested WP Glimcher Converted OptionsLevy as well as 10,93517,590 RSUs of which 2,532 RSUsthat are vested and 8,403 RSUsor will vest within 60sixty (60) days of April 27, 2016.29, 2021. Vested RSUs represent a contingent right to receive one Common Share. Upon Mr. OverlyLevy leaving the Board, he will receive one Common Share for each vested RSU that he holds. |
| None of Mr. Levy’s holdings are pledged as collateral or security. |
(16) | |
| (12) | Includes 100,0002,778 unrestricted Common Shares held directly by Ms. Soffervon Blucher as well as 14,78317,301 RSUs of which 6,380 RSUsthat are vested and 8,403 RSUsor will vest within 60sixty (60) days of April 27, 2016.29, 2021. Vested RSUs represent a contingent right to receive one Common Share. Upon Ms. Soffervon Blucher leaving the Board, she will receive one Common Share for each vested RSU that she holds. None of Ms. von Blucher’s holdings are pledged as collateral or security. |
| |
(17) | Includes 5,000 Common Shares held directly by Mr. White as well as 14,783 RSUs of which 6,380 RSUs are vested and 8,403 RSUs will vest within 60 days of April 27, 2016. RSUs represent a contingent right to receive one Common Share. Upon Mr. White leaving the Board, he will receive one Common Share for each vested RSU that he holds. |
| |
(18)(13) | Based solely upon information contained in a Schedule 13G/A filed with the SEC on January 8, 2016 in which BlackRock, Inc. ("Blackrock") reported that it held sole power to vote 17,764,481 of the Common Shares reported in the table above and owned beneficially and had sole power to dispose of all of the Common Shares reported in the table above. The address of BlackRock reported in the Schedule 13G/A is 55 East 52nd Street, New York, NY 10022. |
| |
(19) | Based solely upon information contained in a Schedule 13G/A filed with the SEC on February 11, 2016 10, 2021 in which The Vanguard Group, filing as The Vanguard Group Inc. (“Vanguard”), reported that it had sole dispositive power of 26,029,989over 1,888,153 of the Common Shares reported in the table above, shared dispositive power of 287,407over 10,319 of the Common Shares reported in the table above, sole voting power over 410,869none of the Common Shares reported in the table above, and shared voting power over 150,1994,013 of the Common Shares reported in the table above. The address of Vanguard reported in the Schedule 13G/A is 7315 Wisconsin Avenue, Bethesda, Maryland 20814.
|
| 100 Vanguard Blvd., Malvern, PA 19355. |
(20) | |
| (14) | Based solely upon information contained in a Schedule 13G/A13G filed with the SEC on February 9, 201616, 2021 in which Vanguard Specialized Funds – Vanguard REIT Index FundCharles Schwab Investment Management, Inc. (“Vanguard REIT”Charles Schwab”) reported that it hashad sole voting power and sole dispositive power over all of the Common Shares reported in the table above. Charles Schwab is included in the table because its beneficial ownership of Common Shares as reported in its Schedule 13G exceeded five percent. The address of Vanguard REITCharles Schwab reported in the Schedule 13G/A13G is 7315 Wisconsin Avenue, Bethesda, Maryland 20814. |
| 211 Main Street, San Francisco, CA 94105. |
(21) | Comprised of Senior Executives and incumbent directors. |
| |
(22)(15) | Based solelyIncludes the beneficially owned amounts reported in the table for each Named Executive and all members of the Board plus 13,972 Common Shares, 10,646 vested RSUs which are to be settled for Common Shares on a Schedule 13G/A filed with the SEC on February 12, 2016one-for-one basis by Heitman Real Estate Securities LLC (“Heitman”) in which it reported sole votingor before March 15, 2022 subject to certain conditions, and dispositive power 7,840 vested stock options held by three (3) other Senior Executives. Excludes certain unvested RSUsas to the Series H Preferred Stock. Heitman reported that it beneficially owned the shares reported above. The address of Heitman is 191 N. Wacker Drive, Suite 2500, Chicago, Illinois 60606. |
| well as unearned and unvested PSUs held by these particular executive officers. |
(23) | Based solely on a Schedule 13G/A filed with the SEC on February 12, 2016 by Heitman in which it reported sole voting and dispositive power as to the Series I Preferred Stock reported above. Heitman reported that it beneficially owned the shares reported above. The address of Heitman is 191 N. Wacker Drive, Suite 2500, Chicago, Illinois 60606. |
EQUITY COMPENSATION PLAN INFORMATION
Information about our existing equity compensation planplans as of December 31, 20152020 is as follows:
| | | Number of securities to
be issued upon
exercise of
outstanding options,
warrants and rights | | | Weighted‑average
exercise price of
outstanding
options,
warrants and rights | | | Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a)) | |
Plan category | | (a) | | | (b) | | | (c) | |
| Equity compensation plans approved by security holders | | 1,337,911(1) | | | $118.61(2) | | | 242,924 | |
| | | | | | | | | | |
| Equity compensation plans not approved by security holders | | N/A | | | N/A | | | N/A | |
| | | | | | | | | | |
| Total | | 1,337,911 | | | $118.62 | | | 242,924 | |
We have incurred fees for the services of Ernst & Young LLP (“EY”), our independent registered public accounting firm, as shown below. EY has advised us that it has billed or will bill us the amounts shown below for the related categories of services for the years ended December 31, 20152020 and 2014,2019, respectively: