(1)
| The Company’s AFFO available to common stockholders and unit holders for the 2023 fiscal year, as reported in the Company’s financial statements, was $473.1 million. The committee determined that, for purposes of calculating AFFO available to common stockholders and unit holders under the short-term incentive compensation plan were achieved as follows: | Corporate Expense Management
| | | Plan target, net of short-term incentive compensation plan for 2023, it would be appropriate to exclude the impact of the JW Marriott Hill Country Resort & Spa acquisition (including the partial year 2023 operating results following our acquisition of the hotel, as well as the transaction costs associated with the acquisition and interest expense accrual, exceeded
| | | Stretch
(150%)
| | | 4.17%
| | | Gross Room Nights Booked (All Future Years)
| | | Gross room nights booking goal exceeded (approximately 2.4 million gross room nights booked)
| | | Stretch
(150%)
| | | 4.17%
| from the related financing), as well as to make certain other immaterial adjustments. As a result of these adjustments, fiscal year 2023 AFFO available to common stockholders and unit holders was determined |
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| Gaylord Hotels Portfolio RevPAR Performance Against Competitive Set
| | | STR RevPAR penetration goal exceeded (STR RevPAR penetration of approximately 117%)
| | | Stretch
(150%)
| | | 4.17%
| | | Ryman Auditorium Concerts Booked
| | | Booking goal exceeded by December 31, 2022
| | | Stretch
(150%)
| | | 4.17%
| | | Balance Sheet Management
| | | Company in compliance with debt agreements as of Dec. 31, 2022, with exit from senior credit facility waiver period in the first quarter of 2022
| | | Target
(100%)
| | | 2.78%
| | | Block 21 Acquisition
| | | Successful completion of Block 21 acquisition in the second quarter of 2022
| | | Target
(100%)
| | | 2.78%
| | | W Austin Hotel Renovation
| | | Design work for renovation of the W Hotel common areas underway, with expected commencement in third quarter of 2023
| | | Target
(100%)
| | | 2.78%
| | | Ole Red Las Vegas
| | | Construction of Ole Red Las Vegas project commenced in November 2022
| | | Target
(100%)
| | | 2.78%
| | | ESG Program
| | | Revised ESG report published on time, with additional DE&I disclosures
| | | Target
(100%)
| | | 2.78%
| |
The committee determined the overall level of achievement under the short-term cash incentive compensation plan for the Company’s senior executives, including each NEO, was 138.7%158.4% of the target payout level, which represented the sum of the payout percentages for each of the financial and strategic goals listed above. The committee also reviewed the annual performance rating of each NEO and determined that each NEO met the minimum level performance rating. The committee also determined that each NEO should receive an additional amount of cash incentive compensation, as listed below, due to their contributions to the company’s financial and operating results in 2022,2023, including: with respect to Mr. Reed,Fioravanti, his efforts in overseeing the company’s senior management team and his contributions to the company’s financial and operating results, as well as his leadership in the process which led to a strategic equity investment in our Entertainment business segment by Atairos and NBCUniversal;transactions associated with the acquisition of the JW Marriott Hill Country Resort & Spa; with respect to Mr. Fioravanti,Reed, his leadership of the capital markets activities undertaken by the company during 2022, including maintaining the existing waivers of applicable financial covenants under the company’s credit facilities, as well asour strategic planning process, his oversight of the successful Block 21 acquisitionrelationship between management and the strategic equity investment inBoard, his activities with respect to our joint venture arrangement with respect to our Entertainment business segment;segment and his significant involvement in our government relations activities; with respect to Ms. Hutcheson, her oversight of the company’s treasury, accounting and financial reporting functionscapital markets activities in connection with the strategic and operating activities described above; with respect to Mr. Chaffin, his continued efforts in effectively supervising the company’s relationship with the manager of its hotel properties particularly in lightand his oversight of the rapid pace of recovery from the pandemic over the course of 2022;company’s design and construction function; and with respect to Mr. Lynn, his oversight of the company’s legal and compliance functions in connection with the strategic and operating activities described above. TABLE OF CONTENTS
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As a result, the committee approved the following short-term cash incentive compensation awards: | | Mr. Reed | | | 2,927,100 | | | 372,900 | | | | Mr. Fioravanti | | | 1,894,669 | | | 241,373 | | | | Ms. Hutcheson | | | 911,891 | | | 116,171 | | | | Mr. Chaffin | | | 958,279 | | | 122,081 | | | | Mr. Lynn | | | 747,707 | | | 177,293 | |
| | Mark Fioravanti | | | 2,019,600 | | | 230,400 | | | | Colin Reed | | | 1,188,000 | | | 62,000 | | | | Jennifer Hutcheson | | | 939,016 | | | 50,000 | | | | Patrick Chaffin | | | 901,686 | | | 48,314 | | | | Scott Lynn | | | 713,586 | | | 36,414 | |
(1)
| The estimated threshold, target and stretch payout levels for each NEO under this plan for 20222023 are listed in the 2022 2023Grants of Plan-Based Awards table below. |
20222023 Long-Term Equity Incentive Compensation Our long-term equity incentive compensation plan is designed to align the interests of our NEOs and stockholders and focus our NEOs on long-term objectives over a multi-year period. Long-term equity incentive awards are also intended to attract and retain our NEOs through long-term vesting. In 2022,2023, long-term equity incentive compensation represented 54.0%56.7% of our CEO’s total compensation package and (on average) 37.6%41.0% of our other NEOs’ total compensation package (calculated in the manner described on page 4154). Long-Term Equity Incentive Compensation Plan Components For 2022,2023, the annual long-term equity incentive plan components are: TSR-Linked Performance-Based Restricted Stock Unit Awards: Vest over a three-year period based on our TSR over the award cycle, as compared to our peers. Awards settled in stock, with cash dividends on RSUs being paid only upon RSUs that ultimately vest upon the achievement of performance goals. Granted only to the NEOs and senior executives. TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
Time-Based Restricted Stock Unit Awards: Annual time-based RSU awards vest in equal amounts over four years, beginning on the first anniversary of the grant date. In certain cases, in connection with a promotional RSU grant or to aid in retention, the committee may designate that certain time-based RSU awards will vest in equal installments over two years, beginning on the third anniversary of the grant date. Awards settled in stock, with dividends on RSUs held by our NEOs being paid in additional RSUs only upon RSUs that ultimately vest. Granted to the NEOs, as well as to other eligible employees. 20222023 Long-Term Equity Incentive Compensation Awards For 2022,2023, the committee discussed with Aon the most appropriate way to motivate and retain our executives. The committee believed it was important to continue to use RSU awards to better align the interests of our executives with our stockholders, to encourage executive retention and to conform to compensation practices in the REIT industry. As a result of these discussions, the committee decided to structure long-term equity incentive compensation awards in 20222023 as a combination of performance-based RSUs and time-based RSUs, with the total value awarded to each executive determined based on a number of factors, including but not limited to corporate and individual performance, historical grants and competitive practices. The committee determined that each NEO should receive RSUsRSU awards based on the following percentage of such NEO’s base salary, with 50%approximately 52% of the awards to be granted in the form of time-basedperformance-based RSUs and 50%approximately 48% of the awards in the form of TSR-linked performance-basedtime-based RSUs (based on the grant date fair value of such awards): Mr. Reed:Fioravanti: 300% of base salary; Mr. Fioravanti: 200%Reed: 300% of base salary; Ms. Hutcheson: 150% of base salary; Mr. Chaffin: 100% of base salary; and Mr. Lynn: 100% of base salary. TABLE OF CONTENTS
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As a result of the determinations discussed above, on February 23, 2022,22, 2023, the committee made the following long-term incentive compensation awards to the NEOs: | | Colin Reed | | | 18,707 | | | 22,334 | | | | Mark Fioravanti | | | 8,503 | | | 10,152 | | | | Jennifer Hutcheson | | | 3,827 | | | 4,568 | | | | Patrick Chaffin | | | 3,118 | | | 3,722 | | | | Scott Lynn | | | 2,406 | | | 2,872 | |
| | Mark Fioravanti | | | 16,180 | | | 17,336 | | | | Colin Reed | | | 10,260 | | | 10,939 | | | | Jennifer Hutcheson | | | 4,072 | | | 4,400 | | | | Patrick Chaffin | | | 3,244 | | | 3,503 | | | | Scott Lynn | | | 2,584 | | | 2,792 | |
(1)
| The time-based RSUs vest ratably over four years, beginning March 15, 2023.2024. |
(2)
| Up to 150% of the performance-based RSUs listed above will vest on March 15, 20252026 based on our TSR performance over the three-year award cycle (January 1, 20222023 – December 31, 2024)2025) relative to the median of the TSR performance of a designated peer group. |
2022 TSR-Linked2023 Performance-Based RSU Awards (2022-2024(2023-2025 Performance Period) The amount of the performance-based RSUs which will ultimately vest on March 15, 20252026 will be determined by comparing our TSR performance during the performance period (January 1, 20222023 – December 31, 2024)2025) relative to the median of the TSR performance of the following two peer groups (the “2022“2023 Performance Peer Groups”), weighted equally: (1) our 20222023 compensation peer group listed above; and (2) the following companies within the FTSE NAREIT Lodging Resorts Index: | | Apple Hospitality REIT, Inc. | InnSuites Hospitality Trust
| | | Ashford Hospitality Trust, Inc.
| Park Hotels & Resorts, Inc. | | | | Braemar Hotels & Resorts,Ashford Hospitality Trust, Inc.
| Pebblebrook Hotel Trust | | | | Chatham Lodging TrustBraemar Hotels & Resorts, Inc.
| RLJ Lodging Trust | | | | CorePointChatham Lodging Inc.Trust
| Sotherly Hotels, Inc. | | | | DiamondRock Hospitality Co. | Summit Hotel Properties, Inc. | | | | Hersha Hospitality Trust | Sunstone Hotel Investors, Inc. | | | | Host Hotels & Resorts, Inc. | Xenia Hotels & Resorts, Inc. | | | | InnSuites Hospitality Trust | | |
The members of the peer group listed above were selected from among the FTSE NAREIT Lodging TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
Resorts Index companies due to their relative enterprise value compared to the company and/or their relative TSR performance over a three-year period. This peer group was identical to the peer group we used in 20212022, except as follows: (i) Condor Hospitality Trust was not included infor the 2022 peer group due to the sale its hotel portfolio and subsequent liquidation in December 2021, and (ii) in March 2022,deletion of CorePoint Lodging Inc. was removed from the 2022 peer group due to its acquisition and subsequent delisting.delisting in 2022. The 2022 TSR-linked2023 performance-based RSU awards will vest as follows: | | Greater than or equal to 15 percentage points above the median TSR performance of the 20222023 Performance Peer Groups | | | 150% | | | | Equal to the median TSR performance of the 20222023 Performance Peer Groups | | | 100% | | | | 15 percentage points below the median TSR performance of the 20222023 Performance Peer Groups | | | 50% | | | | Greater than 15 percentage points below the median TSR performance of the 20222023 Performance Peer Groups | | | 0% | |
If the performance achieved falls in between the established performance goal levels, the percentage of the award earned by the NEO will be determined using straight-line interpolation and rounding to the nearest full share. The awards also provide that if our TSR is negative, on an absolute basis, the committee may, in its discretion, reduce by 25% the number of awards ultimately vesting. In no event will the final value of the award exceed 500% of the fair market value of our common stock on the grant date of February 23, 2022.22, 2023. This plan design has been in effect since the company converted to a REIT in 2013, as the committee has long held the belief that limiting the maximum value of the award ensures the NEOs are not disproportionally rewarded for performance. The committee re-evaluates the 20222023 Performance Peer Groups for each fiscal year to take into account changes to the composition of the 20222023 Performance Peer Groups (i.e., corporate changes such as mergers or delistings), or to otherwise modify the terms of the award to take into account such other factors which the TABLE OF CONTENTS
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committee in its sole discretion has determined. The committee has not exercised this discretion in connection with the 2022 TSR-linked2023 performance-based RSU awards, except as described above. The committee believed the amount of these awards was appropriate given our compensation philosophy and objectives, specifically noting that achievement of greater than “target” level performance would have also resulted in higher than average TSR to our stockholders, as compared to our peers. In 2022, TSR-linked2023, performance-based RSUs represented 27.2%28.2% of our CEO’s total compensation package and (on average) 18.9%20.5% of our other NEOs’ total compensation package (calculated in the manner described on page 4154). The committee reviewed the continuing effects of the COVID-19 pandemic and the ongoing recovery from the pandemic on the performance-based TSR-linked RSU awards granted in 2022, as well as in previous years. Based in its review, the committee determined that no changes should be made to any outstanding performance-based TSR-linked RSUs, given the long-term nature of the awards. The committee believes as a general rule that no “mid-stream” adjustments should be made to the TSR-linked performance-based RSU awards due to the long-term nature of, and the other structural features of, these awards.
20222023 Time-Based RSU Awards The time-based RSUs granted to the NEOs reflected in the chart above vest ratably over four years, beginning on March 15, 2023.2024. The committee believed the amount of the time-based RSU awards made to our NEOs was appropriate given our compensation philosophy and objectives, including the need to retain our executives. In 2022,2023, time-based RSUs represented 26.8%28.5% of our CEO’s total compensation package and (on average) 18.7%20.5% of our other NEOs’ total compensation package (calculated in the manner described on page 4154). Vesting of One-Time 2021 Long-Term Stockholder Value Creation Program Awards As previously disclosed, onin February 25, 2021 a special one-time performance-based RSU grant was awarded to each NEO and to all director level and above employees of the Company (a total of 52 employees) to incentivize management’s pandemic recovery efforts and to encourage retention in the current competitive labor market. This was the first special one-time grant of this type since the company’s conversion to a REIT in 2013, and the company does not currently anticipate making such an award on a regular or semi-regular basis in the future. The components of this award were: Awards willwere to vest to the extent that, over the period from March 1, 2021 until March 1, 2024, the company’s stock price performance achievesachieved designated targets (specifically, 50% of the award willwould be earned if the company’s common stock achievesachieved a consecutive 20 day trading period volume-weighted average price (“VWAP”) of $100.98 TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
$100.98 at any time during the three year performance period (March 1, 2021 – March 1, 2024), and the remaining 50% of the award willwould be earned if the company’s common stock achievesachieved a consecutive 20 day trading period VWAP of $109.05 at any time during the three year performance period (March 1, 2021 – March 1, 2024)). To the extent earned, up to 100% of the awards willwere to vest and be settled in company stock on March 15, 2024, with cash dividends on RSUs being paid only upon RSUs that ultimately vest upon the achievement of performance goals. In designing the program, the committee was mindful of establishing target company stock prices that would be a challenging level of achievement and that, if achieved, would correlate with a meaningful amount of appreciation in the value of our common stock. Specifically, the committee noted that the two stock price levels established under the program ($100.98 and $109.05) represented (i) a 25% premium and a 35% premium, respectively, above the company’s closing common stock price on the day prior to the date of the award ($80.78), and (ii) a 10% premium and a 19% premium, respectively, above the company’s then all-time high closing common stock price of $91.49 per share. In addition, there iswas no minimum payout level associated with these performance-based RSU awards (i.e., all of this compensation iswas “at risk”). AsBased on our achievement of December 31, 2022, no awards had been earnedboth of the applicable stock price targets described above, the following RSUs vested under this program.
program in March 2024 as follows:TABLE OF CONTENTS
| | Mark Fioravanti | | | 15,882 | | | | Colin Reed | | | 47,059 | | | | Jennifer Hutcheson | | | 4,500 | | | | Patrick Chaffin | | | 8,382 | | | | Scott Lynn | | | 7,059 | |
Vesting of 2020 TSR-Linked2021 Performance-Based RSU Awards in March 2023 (2020-20222024 (2021-2023 Performance Period) In February 20202021 we awarded TSR-linked performance-based RSUs to each NEO, which ultimately were to vest based on the company’s TSR performance over the 3-year award cycle (2020-2022)(2021-2023), as compared to the TSR for the two designated performance peer groups during the same performance period.period (the “2021 Performance Peer Groups”). Specifically, the 20202021 performance-based RSU awards were to vest as follows: | | Greater than or equal to 15 percentage points above the median TSR performance of the 20202021 Performance Peer Groups | | | 150% | | | | Equal to the median TSR performance of the 20202021 Performance Peer Groups | | | 100% | | | | 15 percentage points below the median TSR performance of the 20202021 Performance Peer Groups | | | 50% | | | | Greater than 15 percentage points below the median TSR performance of the 20202021 Performance Peer Groups | | | 0% | |
Our TSR over the performance period, calculated pursuant to the terms of the performance-based RSU agreements, was approximately 35.981 percentage points above the median TSR performance of the designated performance peer groups. As a result, the 20202021 performance-based RSUs ultimately vested at the 150% level in March 20232024 as follows: | | Mark Fioravanti | | | 13,500 | | | | Colin Reed | | | 25,217
| | | Mark Fioravanti
| | | 12,00034,737
| | | | Jennifer Hutcheson | | | 2,6253,750
| | | | Patrick Chaffin | | | 5,2506,000
| | | | Scott Lynn | | | 5,250 | |
Our benefit programs are based upon an assessment of competitive market factors and a determination of what is needed to attract and retain qualified executives. Our primary benefits for executives include TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
participation in our broad-based plans at the same cost as other employees. These plans include a tax qualified 401(k) savings plan (with matching contributions up to four percent of a participant’s pay), health and dental plans and various disability and life insurance plans. We also provide a limited amount of executive-level perquisites to our NEOs and other designated senior executives, including executive-level life disability and life insurance plans, reimbursement of executive physical examination fees and a supplemental deferred compensation plan, or SUDCOMP. Our directors, NEOs and other employees routinely use commercial air service for business travel, and we generally reimburse them only at the coach or business class rate. We maintain a limited aircraft program to provide our executives with timely and cost-effective travel alternatives in connection with our business activities. We do not operate any aircraft, own or lease a hangar or employ pilots. Instead, we have purchased a fractional interest in an aircraft. We pay a fixed monthly fee, plus a variable charge for hours actually flown. Our directors, NEOs and other employees use this aircraft for selected business trips when commercial air service is unavailable or otherwise impractical, based on the availability and cost of commercial air service, the travel time involved, the number of employees traveling and the need for flexible travel arrangements. All travel under this program must be approved by our CEO. We also make the aircraft available to our Executive Chairman, CEO and our other executives for limited personal use, which is typically limited to permitting the executive’s spouse or other family member to accompany the executive on required business travel. We believe allowing limited personal use of our aircraft program serves to reduce our executives’ personal travel time and to increase the time they can conduct company business on our behalf. No such perquisites were provided to our NEOs in 2022. TheseIn 2023 these executive-level perquisites described above, in total, represented approximately 0.3%1.1% of our CEO’s
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total compensation package and (on average) 1.6%1.7% of our other NEOs’ total compensation package (calculated in the manner described on page 4154). When we recruited Mr. Reed to join our company in 2001, we agreed to pay Mr. Reed a retirement benefit pursuant to a Custom Mid-Career Supplemental Employee Retirement Plan, or SERP. This benefit, which is described in Other Compensation Information—Nonqualified Deferred Compensation below, was in the committee’s view essential to attracting Mr. Reed to employment with us and has also proved valuable in securing his extended employment. The company has fully satisfied its funding obligations under the SERP by previously paying, in total, $3.5 million to Mr. Reed’s SERP account (as described below), and the current balance in Mr. Reed’s SERP account in excess of such amount is attributable to investment gains and losses associated with the assets in the SERP account (currently shares of our common stock). Other Compensation Information Stock Ownership and Retention Guidelines The committee has adopted stock ownership guidelines for our senior executives. These guidelines are designed to encourage our executives to have a meaningful equity ownership in our company, thereby linking their interests with those of our stockholders. These guidelines provide that within five years of becoming a senior executive, each executive must own (by way of shares owned directly or indirectly (including through our 401(k) plan) and shares represented by unvested time-based RSUs, but not including unexercised stock options or performance-based RSUs) common stock with a value of either five times (5x) base salary for Mr. Fioravanti (our CEO), three times (3x) base salary for the other NEOs (including Mr. Reed, our Executive Chairman), and two times (2x) base salary for other executives subject to these guidelines. The guidelines also provide that if an executive is not currently in compliance with this guideline (regardless of the compliance grace period), the executive must retain 50% of the net shares (after satisfying any tax obligations and any required payments upon exercise) received upon vesting of RSUs or the exercise of stock options. TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
As of January 31, 20232024 (the annual compliance date) all of the NEOs were in compliance with the guidelines, as follows: | | Colin ReedMark Fioravanti
| | | 16,14838,672
| | | 1,446,164279,077(2)
| | | | Mark FioravantiColin Reed
| | | 45,75313,649
| | | 256,9521,359,907(3)
| | | | Jennifer Hutcheson | | | 14,53313,144
| | | 21,04525,967(3)(2)
| | | | Patrick Chaffin | | | 17,76315,696
| | | 36,64942,656(3)(2)
| | | | Scott Lynn | | | 13,70512,511
| | | 27,85129,585(3)(2)
| |
(1)
| The number of shares required to be owned by an NEO is an amount equal to (i) the product obtained by multiplying the NEO’s base salary times the applicable multiple (5x for Mr. Fioravanti and 3x for the other NEOs (including Mr. Reed)) divided by (ii) the closing market price of our common stock on January 31, 20232024 ($92.89)109.90). |
(2)
| Includes 648,290 shares credited to Mr. Reed’s SERP and 49,233 shares of common stock issuable upon the vesting of time-based RSUs. |
(3)
| Includes the following number of shares of common stock issuable upon the vesting of time-based RSUs: Mr. Fioravanti: 33,312;43,437; Ms. Hutcheson: 7,360;9,009; Mr. Chaffin: 10,737;8,849; and Mr. Lynn: 7,518.7,341. |
(3)
| Includes 667,574 shares credited to Mr. Reed’s SERP and 42,035 shares of common stock issuable upon the vesting of time-based RSUs. |
Post-Termination Benefits The committee believes that severance and change of control benefits assist in attracting and retaining qualified executives. The levels of payments and benefits upon termination were set to be at a market-competitive level based upon each executive’s experience and level in the organization. Mr. ReedFioravanti and Mr. FioravantiReed have employment agreements that provide for cash severance payments and certain other benefits if termination occurs without “Cause” or if the executive leaves for “Good Reason” (as defined in their employment agreement). These agreements also provide for cash compensation and certain other benefits in the event of termination following a “Change of Control” of the company (i.e., a “double trigger”). Ms. Hutcheson, Mr. Chaffin and Mr. Lynn have severance agreements that provide for cash compensation and certain other benefits only in the event of termination following a “Change of Control” of the company (i.e., a “double trigger”). In addition, no tax gross-ups are provided in connection with any severance payments to our NEOs. Information regarding these payments, including a definition of key terms and the amount of benefits that would have been received by our NEOs had termination occurred on December 31, 2022,2023, is found under Potential Payments on Termination or Change of Control on page 7382. TABLE OF CONTENTS
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Tax Deductibility Considerations The committee’s policy is to consider the tax treatment of compensation paid to our executive officers. Section 162(m) of the Internal Revenue Code generally disallows public companies a tax deductionexecutives with appropriate awards for their performance. While compensation in excess of $1.0 million per year paid to their chief executive officers, chief financial officers and certain other “covered employees”. Whileany of our NEOs is generally not tax deductible for U.S. federal income tax purposes, the committee considers the tax treatment of compensation paid to our executive officers and the potential non-deductibility of compensation under Section 162(m), the committee also believes that the interests of our stockholders are best served if we retain discretion and flexibility in awarding compensation to our NEOs,executives, even where the compensation paid under such programs may not be fully deductible (and thedeductible. The committee has approved, and may continue to approve, the payment of compensation that is outside of the deductibility limitations of Section 162(m)).
Because we qualify as a REITnot deductible for FederalU.S. federal income tax purposes, we expect to distribute at least 100% of our net taxable income each year and therefore will not pay Federal income tax on our REIT taxable income. As a result, based on the level of cash compensation paid to our executive officers, we do not expect that any loss of a Federal income tax deduction as a result of Section 162(m) would materially impact our income tax liability.purposes. The committee will continue to monitor the tax and other consequences of our executive compensation programs as part of its primary objective of ensuring that compensation paid to our executives is reasonable, performance-based and consistent with our goals.
Equity Grant Practices Our omnibus incentive plan allows the committee to grant various types of equity awards to any eligible employee, including the NEOs. Annual equity awards to executives are approved by the committee and occur on the date of our first quarterly committee meeting of each year. Consistent with the terms of our omnibus incentive plan, the committee has also delegated to the CEO the authority to make limited equity grants to new members of our management team, which are then ratified by the committee. These awards are granted pursuant to a formula based on a specified dollar amount, with the number of shares for each RSU award determined by dividing the dollar amount by the fairclosing market valueprices of our common stock determined in accordance with our omnibus incentive plan.for a designated period prior to the grant date. Annual RSU awards for directors are approved by the committee and are granted on the date the director is elected to the Board. These awards are granted pursuant to a formula based on a specified dollar amount, with the number of shares for each RSU grant TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
determined by dividing the dollar amount by the fairclosing market valueprices of our common stock onfor a designated period prior to the date determined in accordance with our omnibus incentive plan.grant date. Role of the Human Resources Committee and Management The committee awards compensation to our NEOs and other executives consistent with our philosophy that compensation paid to our executives be fair, reasonable and competitive. The committee establishes and monitors compliance with our compensation philosophy, and the committee also oversees the development and administration of our compensation programs. Our management is responsible for the administration of our compensation programs once approved by the committee. The committee makes all compensation decisions with respect to our NEOs, which are ratified by our Board. Our CEO annually reviews the performance of, and provides compensation recommendations for, each NEO (other than the CEO). In the case of the CEO, the CEO provides the committee with a self-assessment of his performance. The committee then reviews these items and discusses and approves compensation for each NEO based on the considerations previously discussed. For a complete description of the committee’s members and its responsibilities, as well as information regarding the authority of our CEO to make limited equity grants to new members of our management team, see Committees of the Board on page 2437. You may also view the committee’s charter on our website at www.rymanhp.com (under (under “Corporate Governance” on the Investor Relations page). Role of the Compensation Consultant The committee has retained Aon as its outside compensation consultant since 2013. During 2022,2023, Aon regularly attended committee meetings and reported TABLE OF CONTENTS
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directly to the committee on matters relating to compensation for our executives. During 20222023 the committee requested that Aon: Analyze the compensation for our NEOs and other executives and assess how target and actual short-term incentive compensation aligned with our compensation philosophy and objectives. Develop recommendations for the committee on the size and structure of long-term incentive compensation awards. Assist the committee in the review of this proxy statement and this Compensation Discussion and Analysis. Provide the committee with ongoing advice and counsel on market compensation practices, trends and legal and regulatory changes and their impact on our compensation programs. Advise the committee on the impact of the COVID-19 pandemic recovery on the company’s compensation programs.
Advise the committee with respect to the executive transition, which as described below occurred effective January 1, 2023.
Advisory Vote on Executive Compensation At our annual meeting in May 2022,2023, we held a stockholder advisory vote on the compensation of our NEOs, commonly referred to as a “say-on-pay” vote. In our say-on-pay vote, approximately 92%94% of the stockholder votes, excluding broker non-votes, were cast in favor of the say-on-pay resolution. As the committee reviewed our compensation practices, it was mindful of the level of support our stockholders had previously expressed for our compensation programs, including our “pay for performance” philosophy and emphasis on variable compensation. The committee intends to continue to consider the outcome of future advisory say-on-pay votes when making executive compensation decisions. On October 11, 2022 the company announced that Mr. Reed would assume the position of Executive Chairman of the Board of Directors effective January 1, 2023, and that Mr. Fioravanti would assume the
position of President and Chief Executive Officer of the Company effective January 1, 2023. This was the result of a long-term transition process overseen by our Board of Directors.
In connection with each of Mr. Reed’s and Mr. Fioravanti’s respective change in duties, each of Mr. Reed and Mr. Fioravanti entered into an amendment to his employment agreement, dated as of October 11, 2022 and effective January 1, 2023 (each, an “Amendment”). Mr. Reed’s Amendment reflected Mr. Reed’s new responsibilities as Executive Chairman and lower 2023 annual base salary of $500,000 (a decrease of $600,000). Mr. Fioravanti’s Amendment reflected Mr. Fioravanti’s increased responsibilities and increased 2023 annual base salary of $850,000 (an increase of $100,000). The salary changes and the anticipated changes to 2023 short-term incentive compensation amounts and anticipated long term incentive plan equity grants resulting from the changes to salaries, represent an annual savings of approximately $2,000,000, excluding Mr. Fioravanti’s one-time promotional grant of time-based RSUs described below.
Further, certain provisions regarding severance compensation payable upon termination without cause or resignation for good reason following a change of control were modified in the Amendments as set forth below:
If Mr. Reed or Mr. Fioravanti is terminated without cause (or he resigns for good reason) during the one-year period immediately following a Change of Control (as defined in his employment agreement), he will be entitled to receive a cash severance payment equal to:
Three times his base salary for the year in which the termination occurs, plus
Three times the greater of (x) his annual short-term cash incentive compensation for the year preceding the date of termination or (y) the average of the prior three years’ short-term cash incentive compensation
This revised severance calculation represents a reduction from the calculation amount contained in both Mr. Reed’s and Mr. Fioravanti’s employment agreements prior to the Amendments, which previously was based on the highest of the executive’s prior three years’ short-term cash incentive compensation.
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In addition, for Mr. Fioravanti, the provisions regarding severance compensation payable upon termination without cause or resignation for good reason (absent a change in control) were modified in his Amendment as set forth below (changing a one-time multiple to two times in the severance formula and extending the relevant equity vesting period from one year to two years):
If Mr. Fioravanti is terminated without cause (or he resigns for good reason) absent a Change of Control, he will be entitled to receive a cash severance payment equal to:
Two times his base salary for the year in which the termination occurs, plus
Two times his annual short-term cash incentive compensation for the year preceding the date of termination.
In such event, Mr. Fioravanti will also be entitled to receive the accelerated vesting of restricted stock, RSUs and stock option awards that would have vested within two years of the date of termination.
The Company also made a one-time promotional grant to Mr. Fioravanti of 12,500 time-based RSUs under the Company’s 2016 Omnibus Incentive Plan, as amended, vesting 50% on the third anniversary of the grant date and 50% on the fourth anniversary.
20232024 NEO Compensation At its February 22, 202321, 2024 meeting, the committee reviewed and approved the compensation to be paid to the NEOs for 2023,2024, in light of our compensation philosophy. In setting compensation levels, the committee also considered the recent elevation of Mr. Fioravanti to CEO and Mr. Reed’s new role as Executive Chairman, and the accompanying adjustments to their compensation, each of which became effective as of January 1, 2023. Base Salary Following a review of current compensation levels at the company and at peer companies, the current economic and business environment facing the company, and the seniorrecent executive changestransition described above, the committee determined that the following adjustments would be made to base salary for 2023:2024: | | Mark Fioravanti | | | 900,000 | | | 5.9% | | | | Colin Reed | | | 500,000 | | | — | | | | Jennifer Hutcheson | | | 525,000 | | | 9.0% | | | | Patrick Chaffin | | | 575,000 | | | — | | | | Scott Lynn | | | 485,001 | | | 5.8% | |
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| | Colin Reed | | | 500,000 | | | —(1) | | | | Mark Fioravanti | | | 850,000 | | | —(2) | | | | Jennifer Hutcheson | | | 481,500 | | | 7.0% | | | | Patrick Chaffin | | | 575,000 | | | 4.6% | | | | Scott Lynn | | | 458,309 | | | 8.0% | |
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| Mr. Reed’s 2022 base salary as CEO was set by the committee in March 2022 at $1,100,000, as described above. In connection with the executive transition described above, effective as of January 1, 2023 Mr. Reed’s base salary as Executive Chairman was set at $500,000. The committee did not adjust Mr. Reed’s base salary at its February 22, 2023 meeting. |
| Mr. Fioravanti’s 2022 base salary as President was set by the committee in March 2022 at $750,000, as described above. In connection with the executive transition described above, effective as of January 1, 2023 Mr. Fioravanti’s base salary as CEO was set at $850,000. The committee did not adjust Mr. Fioravanti’s base salary at its February 22, 2023 meeting. |
Short-Term Cash Incentive Compensation The committee also established criteria for short-term cash incentive compensation pursuant to our omnibus incentive plan. The committee determined that each NEO will have the opportunity to earn a percentage of his or her base salary based in part on the achievement of designated financial goals established by the committee, and in part on the achievement of designated strategic and operational objectives established by the committee designed to enable the company to continue its recovery from the effects of the COVID-19 pandemic.committee. The committee established that for 2024 the potential award opportunities (as a percentage of base salary) applicable to each NEO would remain unchanged from 2022,be set as follows at each of the threshold, target and stretch levels.levels, based on the achievement of designated financial performance goals: | | Mr. Fioravanti | | | 87.5% | | | 175% | | | 350% | | | | Mr. Reed | | | 87.5% | | | 175% | | | 350% | | | | Ms. Hutcheson | | | 62.5% | | | 125% | | | 250% | | | | Mr. Chaffin | | | 62.5% | | | 125% | | | 250% | | | | Mr. Lynn | | | 62.5% | | | 125% | | | 250% | |
In choosing the performance goals for 20232024 at its February 22, 202321, 2024 meeting, the committee considered the general economic climate then expected in 2023,2024, the expected conditions in the hospitality and entertainment industries and our expected financial performance. In setting these goals, the committee attempted to set performance goals to ensure that the relative level of difficulty of achieving these levels was consistent with prior years, taking into account the ongoing effects of the pandemic.years. TABLE OF CONTENTS
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In establishing these targets for 2023,2024, the committee made a determination that it will have the discretion to adjust the financial metrics for the year to exclude losses or expense, or income or gain, related to certain unusual, infrequently occurring or other specified events as set forth in our omnibus incentive plan. In addition, under the terms of our omnibus incentive plan, the committee may exercise negative discretion in determining the final amounts of the short-term cash incentive awards payable at any given level of performance to ensure that such awards accurately reflect our actual performance. The committee also has retained the discretion to lower the amount of, or not award, annual cash incentive compensation otherwise payable to an executive under the plan for 20232024 if the executive does not attain a minimum-level annual performance rating under the company’s employee evaluation program, which is a prerequisite to receiving cash incentive compensation under the plan. Long-Term Equity Incentive Compensation The committee also madeapproved the following long-term equity incentive compensation awards: | | | | Time-Based
RSU Awards(1)
(#) | | Performance-
Based RSU
Awards(2)
(#) | | | | Time-Based
RSU Awards(1)
(#) | | Performance-Based
RSU Awards(2)
(#) | | | | Colin Reed | | 10,260 | | 10,939 | | Mark Fioravanti | | 13,244 | | 12,119 | | | | Mark Fioravanti | | 16,180 | | 17,336 | | Colin Reed | | 6,308 | | 5,771 | | | | Jennifer Hutcheson | | 4,072 | | 4,400 | | Jennifer Hutcheson | | 3,312 | | 3,030 | | | | Patrick Chaffin | | 3,244 | | 3,503 | | Patrick Chaffin | | 3,024 | | 2,765 | | | | Scott Lynn | | 2,584 | | 2,792 | | Scott Lynn | | 2,548 | | 2,332 | |
(1)
| The time-based RSUs vest ratably over four years, beginning March 15, 2024.2025. |
(2)
| Up to 150% of the performance-based RSUs listed above will vest on March 15, 20262027 based on our TSR performance over the three-year award cycle (January 1, 20232024 – December 31, 2025)2026) relative to the median of the TSR performance of a designated peer group. |
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Human Resources Committee Report The following report of the Human Resources Committee does not constitute soliciting material and should not be deemed incorporated by reference into any other filing under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically incorporate this report herein. The Human Resources Committee (which functions as our compensation committee), comprised of independent directors, reviewed and discussed the above Compensation Discussion and Analysis with the company’s management. Based on its review and these discussions, the Human Resources Committee recommended to the Board that the Compensation Discussion and Analysis be included in these proxy materials. Human Resources Committee: Patrick Moore,Michael Roth, Chairman
Rachna Bhasin
Robert Prather
Michael Roth
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The Summary Compensation Table below shows compensation information about: | • | Colin Reed, who served as our Chairman & Chief Executive Officer (our principal executive officer) for all of 2022, and who began serving as our Executive Chairman of the Board as of January 1, 2023;
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• | Mark Fioravanti, who served as our President & Chief Financial Officer (our principal financial officer) from January 2022 until March 2022, who served as our President (with increased management responsibilities, including direct oversight of our Entertainment business segment) during the remainder of 2022, and who began serving as our President & Chief Executive Officer (our principal executive officer) as; |
| • | Colin Reed, our Executive Chairman of January 1, 2023;the Board of Directors; |
| • | Jennifer Hutcheson, who served as our Executive Vice President, Corporate Controller & Chief Accounting Officer from January 2022 until March 2022, and who began serving as our Executive Vice President & Chief Financial Officer (our principal financial officer) in March 2022;; |
| • | Patrick Chaffin, who served as our Executive Vice President & Chief Operating Officer – Hotels for all of 2022, and who continues to serve in this position;Hotels; and |
| • | Scott Lynn, who served as our Executive Vice President & General Counsel for all of 2022, and who continues to serve in this position.Counsel. |
As required by SEC rules, the compensation amounts listed below include non-cash items such as the grant date fair value of equity awards (some of which are performance-based and may or may not ultimately be earned). 20222023 Summary Compensation Table | | Colin Reed
Chief Executive Officer | | | 2022 | | | 1,142,473 | | | 372,900 | | | 3,301,354 | | | — | | | 2,927,100 | | | — | | | 17,369 | | | 7,761,196 | | | | 2021 | | | 1,079,011 | | | 275,000 | | | 6,750,915 | | | — | | | 3,025,000 | | | — | | | 46,680 | | | 11,176,606 | | | | 2020 | | | 1,079,012 | | | — | | | 3,312,847 | | | — | | | — | | | — | | | 51,411 | | | 4,443,270 | | | | Mark Fioravanti
President | | | 2022 | | | 753,119 | | | 241,373 | | | 2,463,488 | | | — | | | 1,894,669 | | | — | | | 48,651 | | | 5,401,300 | | | | 2021 | | | 604,088 | | | 127,137 | | | 2,480,327 | | | — | | | 1,398,523 | | | — | | | 47,829 | | | 4,657,904 | | | | 2020 | | | 572,949 | | | 200,000 | | | 1,501,520 | | | — | | | — | | | — | | | 34,606 | | | 2,309,075 | | | | Jennifer Hutcheson
EVP & Chief Financial
Officer | | | 2022 | | | 447,864 | | | 116,171 | | | 675,303 | | | — | | | 911,891 | | | — | | | 21,336 | | | 2,172,565 | | | | 2021 | | | 342,487 | | | 43,227 | | | 695,166 | | | — | | | 475,405 | | | — | | | 16,433 | | | 1,572,718 | | | | 2020 | | | 332,748 | | | 75,000 | | | 328,458 | | | — | | | — | | | — | | | 20,140 | | | 756,346 | | | | Patrick Chaffin
EVP & Chief Operating
Officer - Hotels | | | 2022 | | | 559,402 | | | 122,081 | | | 550,216 | | | — | | | 958,279 | | | — | | | 42,202 | | | 2,232,180 | | | | 2021 | | | 478,370 | | | 80,520 | | | 1,195,028 | | | — | | | 885,561 | | | — | | | 31,925 | | | 2,671,404 | | | | 2020 | | | 448,931 | | | 100,000 | | | 656,915 | | | — | | | — | | | — | | | 28,716 | | | 1,234,562 | | | | Scott Lynn
EVP & General Counsel | | | 2022 | | | 437,519 | | | 177,293 | | | 424,568 | | | — | | | 747,707 | | | — | | | 16,475 | | | 1,803,562 | | | | 2021 | | | 402,880 | | | 67,806 | | | 1,026,375 | | | — | | | 745,734 | | | — | | | 17,362 | | | 2,260,157 | | | | 2020 | | | 380,409 | | | 100,000 | | | 656,915 | | | — | | | — | | | — | | | 15,778 | | | 1,153,102 | |
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| | Mark Fioravanti
President & CEO | | | 2023 | | | 850,165 | | | 230,400 | | | 2,857,285 | | | — | | | 2,019,600 | | | — | | | 57,755 | | | 6,015,205 | | | | 2022 | | | 753,119 | | | 241,373 | | | 2,463,488 | | | — | | | 1,894,669 | | | — | | | 48,651 | | | 5,401,300 | | | | 2021 | | | 604,088 | | | 127,137 | | | 2,480,327 | | | — | | | 1,398,523 | | | — | | | 47,829 | | | 4,657,904 | | | | Colin Reed
Executive Chairman | | | 2023 | | | 500,165 | | | 62,000 | | | 1,807,416 | | | — | | | 1,188,000 | | | — | | | 33,729 | | | 3,591,310 | | | | 2022 | | | 1,142,473 | | | 372,900 | | | 3,301,354 | | | — | | | 2,927,100 | | | — | | | 17,369 | | | 7,761,196 | | | | 2021 | | | 1,079,011 | | | 275,000 | | | 6,750,915 | | | — | | | 3,025,000 | | | — | | | 46,680 | | | 11,176,606 | | | | Jennifer Hutcheson
EVP & Chief Financial Officer | | | 2023 | | | 474,396 | | | 50,000 | | | 722,132 | | | — | | | 939,016 | | | — | | | 35,378 | | | 2,220,922 | | | | 2022 | | | 447,864 | | | 116,171 | | | 675,303 | | | — | | | 911,891 | | | — | | | 21,336 | | | 2,172,565 | | | | 2021 | | | 342,487 | | | 43,227 | | | 695,166 | | | — | | | 475,405 | | | — | | | 16,433 | | | 1,572,718 | | | | Patrick Chaffin
EVP & Chief Operating Officer - Hotels | | | 2023 | | | 569,396 | | | 48,314 | | | 575,104 | | | — | | | 901,686 | | | — | | | 40,740 | | | 2,135,240 | | | | 2022 | | | 559,402 | | | 122,081 | | | 550,216 | | | — | | | 958,279 | | | — | | | 42,202 | | | 2,232,180 | | | | 2021 | | | 478,370 | | | 80,520 | | | 1,195,028 | | | — | | | 885,561 | | | — | | | 31,925 | | | 2,671,404 | | | | Scott Lynn
EVP & General Counsel | | | 2023 | | | 450,639 | | | 36,414 | | | 458,236 | | | — | | | 713,586 | | | — | | | 20,129 | | | 1,679,004 | | | | 2022 | | | 437,519 | | | 177,293 | | | 424,568 | | | — | | | 747,707 | | | — | | | 16,475 | | | 1,803,562 | | | | 2021 | | | 402,880 | | | 67,806 | | | 1,026,375 | | | — | | | 745,734 | | | — | | | 17,362 | | | 2,260,157 | |
(1)
| Amounts shown are not reduced to reflect the NEO’s contributions to our 401(k) plan or elections to defer receipt of salary under our SUDCOMP plan. Amounts shown include the amounts actually paid to the NEO during the year and reflect, to the extent applicable, any changes in the base salary during the year. Due to timing of payroll cycles and rounding conventions, amounts paid to each NEO as base salary may differ from the annual base pay amount set forth in the Compensation Discussion and Analysisabove. |
(2)
| Represents a discretionary cash bonus award paid to the NEO in recognition of their contributions to the company’s operating and financial performance for the applicable fiscal year as described in the Compensation Discussion and Analysis above. Cash incentive compensation paid to each NEO pursuant to our short-term cash incentive compensation plan is reflected in the column above entitled Non-Equity Incentive Plan Compensation. |
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(3)
| Represents a non-cash amount equal to the grant date fair value of the annual time-based RSU awards and TSR-linked performance-based RSU awards granted to each NEO. See Note 7 to our consolidated financial statements for the three years ended December 31, 2022,2023, included in our Annual Report on Form 10-K for the year ended December 31, 2022,2023, filed with the SEC on February 24, 2023,23, 2024, for the assumptions made in determining grant date fair value. The maximum dollar value of the TSR-linked performance-based RSU awards granted in 20222023 (based on the grant-dategrant date fair value and assuming vesting at the stretch (150% performance level) are as follows: Mr. Fioravanti: $2,134,149; Mr. Reed: $2,492,810; Mr. Fioravanti: $1,133,115;$1,346,646; Ms. Hutcheson: $509,858;$541,662; Mr. Chaffin: $415,431;$431,237; and Mr. Lynn: $320,559.$343,709. |
(4)
| Represents amounts paid under our short-term cash incentive compensation plan for achievement of designated financial targets and designated strategic objectives, as described in the Compensation Discussion and Analysis above. |
(5)
| The table below lists the components of the All Other Compensation amount for each NEO listed above: |
| | Colin Reed | | | 12,200 | | | — | | | 1,540 | | | 3,629 | | | — | | | 17,369 | | | | Mark Fioravanti | | | 12,200 | | | 29,455 | | | 3,078 | | | 3,918 | | | — | | | 48,651 | | | | Jennifer Hutcheson | | | 12,200 | | | — | | | 3,078 | | | 2,808 | | | 3,250 | | | 21,336 | | | | Patrick Chaffin | | | 12,200 | | | 21,014 | | | 3,078 | | | 2,660 | | | 3,250 | | | 42,202 | | | | Scott Lynn | | | 12,200 | | | — | | | 1,542 | | | 2,733 | | | — | | | 16,475 | |
| | Mark Fioravanti | | | 13,200 | | | 27,641 | | | 12,996 | | | 3,918 | | | — | | | 57,755 | | | | Colin Reed | | | 13,200 | | | — | | | 11,317 | | | 3,629 | | | 5,583 | | | 33,729 | | | | Jennifer Hutcheson | | | 13,200 | | | 15,531 | | | 3,839 | | | 2,808 | | | — | | | 35,378 | | | | Patrick Chaffin | | | 13,200 | | | 18,583 | | | 5,585 | | | 2,660 | | | 712 | | | 40,740 | | | | Scott Lynn | | | 13,200 | | | — | | | 4,196 | | | 2,733 | | | — | | | 20,129 | |
(a)
| We make matching contributions to the 401(k) plan accounts of the NEOs as described in Compensation Discussion and Analysis above. |
(b)
| We make matching contributions to the SUDCOMP accounts of the NEOs as described in Nonqualified Deferred Compensation below. Does not include company matching amounts for SUDCOMP deferrals with respect to 20212022 short-term cash incentive plan payments made in 2022.2023. |
(c)
| Represents the cost associated with the executive group term life insurance not made available generally to other employees. |
(d)
| Represents the cost associated with the executive long term disability insurance not made available generally to other employees. |
(e)
| Represents personal use of aircraft. For purposes of reporting the value of personal usage of aircraft in this table, we use the incremental cost of such personal usage, calculated by estimating the direct variable operating cost of the aircraft on a per mile basis. These costs include the cost of fuel, maintenance, landing and parking fees, crew travel expenses and supplies. For trips by NEOs that involved mixed personal and business usage, we include the incremental cost of such personal usage (i.e., the excess of the cost of the actual trip over the cost of a hypothetical trip without the personal usage). NEOs do not receive tax gross-ups for any imputed income associated with an executive physical examination.related to personal use of aircraft. |
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20222023 Grants of Plan-Based Awards The table below shows information about (1) the threshold, target and stretch (i.e., maximum) level of annual cash incentive awards for our NEOs for performance during 2022,2023, and (2) RSU awards granted to our NEOs during 20222023 under our long-term equity incentive compensation plan. 20222023 Grants of Plan-Based Awards Table | | Colin Reed | | | | | | 825,000 | | | 1,650,000 | | | 3,300,000 | | | — | | | — | | | — | | | — | | | — | | | | Perf.-Based RSUs(2) | | | 2/24/22 | | | — | | | — | | | — | | | 11,167 | | | 22,334 | | | 33,501 | | | — | | | 1,661,873 | | | | Time-Based RSUs(3) | | | 2/24/22 | | | — | | | — | | | — | | | — | | | — | | | — | | | 18,707 | | | 1,639,481 | | | | Mark Fioravanti | | | | | | 534,011 | | | 1,068,021 | | | 2,136,042 | | | — | | | | | | | | | | | | — | | | | Perf.-Based RSUs(2) | | | 2/24/22 | | | — | | | — | | | — | | | 5,076 | | | 10,152 | | | 15,228 | | | — | | | 755,410 | | | | Time-Based RSUs(3) | | | 2/24/22 | | | — | | | — | | | — | | | — | | | — | | | — | | | 8,503 | | | 745,203 | | | | Time-Based RSUs(3) | | | 10/11/22 | | | — | | | — | | | — | | | — | | | — | | | — | | | 12,500 | | | 962,875 | | | | Jennifer Hutcheson | | | | | | 257,016 | | | 514,031 | | | 1,028,062 | | | — | | | — | | | — | | | — | | | — | | | | Perf.-Based RSUs(2) | | | 2/24/22 | | | — | | | — | | | — | | | 2,284 | | | 4,568 | | | 6,852 | | | — | | | 339,905 | | | | Time-Based RSUs(3) | | | 2/24/22 | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,827 | | | 335,398 | | | | Patrick Chaffin | | | | | | 270,090 | | | 540,180 | | | 1,080,360 | | | — | | | — | | | — | | | — | | | | | | | Perf.-Based RSUs(2) | | | 2/24/22 | | | — | | | — | | | — | | | 1,861 | | | 3,722 | | | 5,583 | | | — | | | 276,954 | | | | Time-Based RSUs(3) | | | 2/24/22 | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,118 | | | 273,262 | | | | Scott Lynn | | | | | | 210,741 | | | 421,481 | | | 842,962 | | | — | | | — | | | — | | | — | | | — | | | | Perf.-Based RSUs(2) | | | 2/24/22 | | | — | | | — | | | — | | | 1,436 | | | 2,872 | | | 4,308 | | | — | | | 213,706 | | | | Time-Based RSUs(3) | | | 2/24/22 | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,406 | | | 210,862 | |
| | Mark Fioravanti | | | | | | 637,500 | | | 1,275,000 | | | 2,550,000 | | | — | | | — | | | — | | | — | | | — | | | | Perf.-Based RSUs(2) | | | 2/23/23 | | | — | | | — | | | — | | | 8,668 | | | 17,336 | | | 26,004 | | | — | | | 1,422,766 | | | | Time-Based RSUs(3) | | | 2/23/23 | | | — | | | — | | | — | | | — | | | — | | | — | | | 16,180 | | | 1,434,519 | | | | Colin Reed | | | | | | 375,000 | | | 750,000 | | | 1,500,000 | | | — | | | — | | | | | | | | | | | | | Perf.-Based RSUs(2) | | | 2/23/23 | | | — | | | — | | | — | | | 5,470 | | | 10,939 | | | 16,409 | | | — | | | 897,764 | | | | Time-Based RSUs(3) | | | 2/23/23 | | | — | | | — | | | — | | | — | | | — | | | — | | | 10,260 | | | 909,652 | | | | Jennifer Hutcheson | | | | | | 296,407 | | | 592,813 | | | 1,185,626 | | | — | | | — | | | — | | | — | | | — | | | | Perf.-Based RSUs(2) | | | 2/23/23 | | | — | | | — | | | — | | | 2,200 | | | 4,400 | | | 6,600 | | | — | | | 361,108 | | | | Time-Based RSUs(3) | | | 2/23/23 | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,072 | | | 361,024 | | | | Patrick Chaffin | | | | | | 284,623 | | | 569,246 | | | 1,138,492 | | | — | | | — | | | — | | | — | | | — | | | | Perf.-Based RSUs(2) | | | 2/23/23 | | | — | | | — | | | — | | | 1,752 | | | 3,503 | | | 5,255 | | | — | | | 287,491 | | | | Time-Based RSUs(3) | | | 2/22/23 | | | — | | | — | | | — | | | — | | | — | | | — | | | 3,244 | | | 287,613 | | | | Scott Lynn | | | | | | 225,248 | | | 450,496 | | | 900,992 | | | — | | | — | | | — | | | — | | | — | | | | Perf.-Based RSUs(2) | | | 2/23/23 | | | — | | | — | | | — | | | 1,396 | | | 2,792 | | | 4,188 | | | — | | | 229,139 | | | | Time-Based RSUs(3) | | | 2/22/23 | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,584 | | | 229,097 | |
(1)
| Represents threshold, target and stretch performance goal achievement payout levels established under our annual short-term cash incentive plan for 20222023 performance. See Compensation Discussion and Analysis—20222023 Compensation Decisions—20222023 Short-Term Cash Incentive Compensation for a discussion of our annual short-term cash incentive plan. |
(2)
| Consists of performance-based RSUs awarded under our long-term equity incentive compensation plan as part of our annual long-term equity incentive compensation program. Each RSU is equivalent to one share of our common stock on the date of grant. The RSUs are earned for achieving specified calculated TSR targets over a three-year performance period beginning January 1, 20222023 and ending December 31, 2024.2025. See Compensation Discussion and Analysis—20222023 Compensation Decisions—20222023 Long-Term Equity Incentive Compensation for a discussion of these RSUs. |
(3)
| Consists of time-based RSUs awarded under our long-term equity incentive compensation plan. Each RSU award is equivalent to one share of common stock on the date of grant, and except with respect to the award granted to Mr. Fioravanti on October 11, 2022 (which vests 50% on the third and fourth anniversaries of the grant date), all time-based RSU awards vest ratably over four years. |
(4)
| Grant date fair value of the RSU awards to the NEOs is determined in accordance with FASB ASC Topic 718, disregarding for this purpose estimated forfeitures. See Note 7 to our consolidated financial statements for the three years ended December 31, 2022,2023, included in our Annual Report on Form 10-K for the year ended December 31, 2022,2023, filed with the SEC on February 24, 2023,23, 2024, for the assumptions made in determining grant date fair value. |
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Outstanding Equity Awards at 20222023 Fiscal Year End The table below shows information about the outstanding equity awards held by our NEOs as of December 31, 2022.2023. Outstanding Equity Awards at 20222023 Fiscal Year End Table | | Colin Reed | | | — | | | — | | | — | | | — | | | 49,084 | | | 4,014,090 | | | — | | | — | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 117,768 | | | 9,631,067 | | | | Mark Fioravanti | | | — | | | — | | | — | | | — | | | 33,212 | | | 2,716,077 | | | — | | | — | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 47,034 | | | 3,846,441 | | | | Jennifer Hutcheson | | | — | | | — | | | — | | | — | | | 7,340 | | | 600,265 | | | — | | | — | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 14,193 | | | 1,160,704 | | | | Patrick Chaffin | | | — | | | — | | | — | | | — | | | 10,706 | | | 875,537 | | | — | | | — | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 21,354 | | | 1,746,330 | | | | Scott Lynn | | | — | | | — | | | — | | | — | | | 7,496 | | | 613,023 | | | — | | | — | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 18,681 | | | 1,527,732 | |
| | Mark Fioravanti | | | — | | | — | | | — | | | — | | | 43,009 | | | 4,733,571 | | | — | | | — | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 46,718 | | | 5,141,783 | | | | Colin Reed | | | — | | | — | | | — | | | — | | | 41,621 | | | 4,580,807 | | | — | | | — | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 115,069 | | | 12,664,494 | | | | Jennifer Hutcheson | | | — | | | — | | | — | | | — | | | 8,923 | | | 982,065 | | | — | | | — | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 17,218 | | | 1,895,013 | | | | Patrick Chaffin | | | — | | | — | | | — | | | — | | | 8,763 | | | 964,456 | | | — | | | — | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 21,607 | | | 2,378,066 | | | | Scott Lynn | | | — | | | — | | | — | | | — | | | 7,270 | | | 800,136 | | | — | | | — | | | | | | | — | | | — | | | — | | | — | | | — | | | — | | | 17,973 | | | 1,978,108 | |
(1)
| The following table provides information as of December 31, 20222023 with respect to the vesting of each NEO’s outstanding time-based RSUs (including additional RSUs accrued with respect to dividends paid): |
| | 2/21/2019 | | | 3/15/2023 | | | 4,023 | | | 1,329 | | | 733 | | | 661 | | | 661 | | | | 2/20/2020 | | | 3/15/2023 | | | 4,773 | | | 2,054 | | | 451 | | | 899 | | | 899 | | | | 2/25/2021 | | | 3/15/2023 | | | 5,596 | | | 2,253 | | | 626 | | | 1,001 | | | 876 | | | | 2/24/2022 | | | 3/15/2023 | | | 4,683 | | | 2,129 | | | 958 | | | 781 | | | 603 | | | | 5/20/2019 | | | 5/20/2023 | | | — | | | — | | | — | | | 2,121 | | | — | | | | 2/20/2020 | | | 3/15/2024 | | | 4,768 | | | 2,056 | | | 447 | | | 899 | | | 899 | | | | 2/25/2021 | | | 3/15/2024 | | | 5,597 | | | 2,253 | | | 625 | | | 1,002 | | | 876 | | | | 2/24/2022 | | | 3/15/2024 | | | 4,684 | | | 2,129 | | | 959 | | | 780 | | | 602 | |
| | 2/20/2020 | | | 3/15/2024 | | | 2,126 | | | 4,930 | | | 460 | | | 928 | | | 928 | | | | 2/25/2021 | | | 3/15/2024 | | | 2,328 | | | 5,791 | | | 644 | | | 1,036 | | | 904 | | | | 2/24/2022 | | | 3/15/2024 | | | 2,202 | | | 4,846 | | | 992 | | | 806 | | | 622 | | | | 2/23/2023 | | | 3/15/2024 | | | 4,173 | | | 2,645 | | | 1,050 | | | 837 | | | 666 | | | | 2/25/2021 | | | 3/15/2025 | | | 2,332 | | | 5,786 | | | 648 | | | 1,034 | | | 907 | | | | 2/24/2022 | | | 3/15/2025 | | | 2,201 | | | 4,844 | | | 990 | | | 809 | | | 623 | | | | 2/23/2023 | | | 3/15/2025 | | | 4,172 | | | 2,647 | | | 1,050 | | | 837 | | | 667 | |
TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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| | Grant Date | | Vesting
Date | | Colin
Reed | | Mark
Fioravanti | | Jennifer
Hutcheson | | Patrick
Chaffin | | Scott
Lynn | | Grant Date | | Vesting
Date | | Mark
Fioravanti | | Colin
Reed | | Jennifer
Hutcheson | | Patrick
Chaffin | | Scott
Lynn | | | | 2/25/2021 | | 3/15/2025 | | 5,595 | | 2,253 | | 626 | | 1,001 | | 876 | | 10/11/2022 | | 10/11/2025 | | 6,465 | | — | | — | | — | | — | | | | 2/24/2022 | | 3/15/2025 | | 4,683 | | 2,128 | | 958 | | 781 | | 602 | | 2/24/2022 | | 3/15/2026 | | 2,201 | | 4,843 | | 990 | | 805 | | 622 | | | | 10/11/2022 | | 10/11/2025 | | — | | 6,250 | | — | | — | | — | | 2/23/2023 | | 3/15/2026 | | 4,170 | | 2,644 | | 1,050 | | 834 | | 665 | | | | 2/24/2022 | | 3/15/2026 | | 4,682 | | 2,128 | | 957 | | 780 | | 602 | | 10/11/2022 | | 10/11/2026 | | 6,466 | | — | | — | | — | | — | | | | 10/11/2022 | | 10/11/2026 | | — | | 6,250 | | — | | — | | — | | 2/23/2023 | | 3/15/2027 | | 4,173 | | 2,645 | | 1,049 | | 837 | | 666 | |
(2)
| Market value was determined based on the December 30, 202229, 2023 NYSE closing price of our common stock ($81.78)110.06). |
(3)
| The following table provides information with respect to the vesting of the performance-based RSUs granted to each NEO: |
| | 2/20/2020(a) | | | 3/15/2023 | | | 25,217 | | | 12,000 | | | 2,625 | | | 5,250 | | | 5,250 | | | | 2/25/2021(b) | | | 3/15/2024 | | | 23,158 | | | 9,000 | | | 2,500 | | | 4,000 | | | 3,500 | | | | 2/25/2021(c) | | | 3/15/2024 | | | 47,059 | | | 15,882 | | | 4,500 | | | 8,382 | | | 7,059 | | | | 2/24/2022(d) | | | 3/15/2025 | | | 22,334 | | | 10,152 | | | 4,568 | | | 3,722 | | | 2,872 | |
| | 2/25/2021(a) | | | 3/15/2024 | | | 13,500 | | | 34,737 | | | 3,750 | | | 6,000 | | | 5,250 | | | | 2/25/2021(b) | | | 3/15/2024 | | | 15,882 | | | 47,059 | | | 4,500 | | | 8,382 | | | 7,059 | | | | 2/24/2022(c) | | | 3/15/2025 | | | 10,152 | | | 22,334 | | | 4,568 | | | 3,722 | | | 2,872 | | | | 2/23/2023(d) | | | 3/15/2026 | | | 17,336 | | | 10,939 | | | 4,400 | | | 3,503 | | | 2,792 | |
(a)
| The number of shares listed above with respect to the February 20, 2020 TSR-linked25, 2021 performance-based RSU grant assume vesting at the stretch (150%) performance level. The RSUs ultimately vested at this payout level based on our achievement of TSR over the applicable performance period, as determined by the Human Resources Committee. See Compensation Discussion and Analysis—20222023 Compensation Decisions—Vesting of 20202021 TSR-Linked Performance-Based RSU Awards in March 2023 (2020-20222024 (2021-2023 Performance Period) for a discussion of these RSUs. |
(b)
| The number of RSUs listed above with respect to the February 25, 2021 TSR-linkedcompany stock price-linked performance-based RSU grant assume vesting atof all of such award. The company achieved both of the target (100%) performance level, taking into account performance to date with respect to the performance metricsapplicable stock price targets under thethis award, agreement and the remaining lengthas a result all of time during the vesting period. Eachthis RSU is equivalent to one share of our common stockgrant ultimately vested on the date of grant. The RSUs are earned for achieving specified calculated TSR targets over a three-year performance period from January 1, 2021 to December 31, 2023.March 15, 2024. See Compensation Discussion and Analysis—20222023 Compensation Decisions—2022Vesting of One-Time 2021 Long-Term Equity Incentive CompensationStockholder Value Creation Program Awards for a discussion of these RSUs., |
(c)
| The number of RSUs listed above with respect to the February 25, 2021 company stock price-linked performance-based RSU grant assume achievement of all stock price targets under the awards. Each RSU is equivalent to one share of our common stock on the date of grant. The RSUs are earned if designated stock price targets are achieved over a three-year performance period from March 1, 2021 to March 1, 2024. As of December 31, 2022 no awards had been earned under this program, as the applicable stock price targets had not been achieved. See Compensation Discussion and Analysis—2022 Compensation Decisions—One-Time 2021 Long-Term Stockholder Value Creation Program Awards for a discussion of these RSUs. |
(d)
| The number of RSUs listed above with respect to the February 24, 2022 TSR-linked performance-based RSU grant assume vesting at the target (100%) performance level, taking into account performance to date with respect to the performance metrics under the award agreement and the remaining length of time during the vesting period. Each RSU is equivalent to one share of our common stock on the date of grant. The RSUs are earned for achieving specified calculated TSR targets over a three-year performance period from January 1, 2022 to December 31, 2024. See Compensation Discussion and Analysis—20222023 Compensation Decisions—20222023 Long-Term Equity Incentive Compensation for a discussion of these RSUs.
|
(d)
| The number of RSUs listed above with respect to the February 22, 2023 performance-based RSU grant assume vesting at the target (100%) performance level, taking into account performance to date with respect to the performance metrics under the award agreement and the remaining length of time during the vesting period. Each RSU is equivalent to one share of our common stock on the date of grant. The RSUs are earned for achieving specified calculated TSR targets over a three-year performance period from January 1, 2023 to December 31, 2025. See Compensation Discussion and Analysis—2023 Compensation Decisions—2023 Long-Term Equity Incentive Compensation for a discussion of these RSUs. |
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20222023 Option Exercises and Stock Vested The table below shows information about the exercise of stock options by the NEOs and the vesting of the NEOs’ RSU awards in 2022.2023. 20222023 Option Exercises and Stock Vested Table | | Colin Reed | | | — | | | — | | | 41,880 | | | 3,721,876 | | | | Mark Fioravanti | | | — | | | — | | | 14,735 | | | 1,309,499 | | | | Jennifer Hutcheson | | | — | | | — | | | 2,646 | | | 235,150 | | | | Patrick Chaffin | | | — | | | — | | | 9,101 | | | 804,778 | | | | Scott Lynn | | | — | | | — | | | 6,875 | | | 610,981 | |
| | Mark Fioravanti | | | — | | | — | | | 19,789 | | | 1,763,398 | | | | Colin Reed | | | — | | | — | | | 44,340 | | | 3,951,137 | | | | Jennifer Hutcheson | | | — | | | — | | | 5,401 | | | 481,283 | | | | Patrick Chaffin | | | — | | | — | | | 10,746 | | | 967,074 | | | | Scott Lynn | | | — | | | — | | | 8,299 | | | 739,524 | |
(1)
| Equal to the number of shares of common stock issued upon vesting of RSUs multiplied by the closing market price of our common stock on the NYSE on the day prior to the vesting date. |
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20222023 Pay Versus Performance
In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Act, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO NEOs and company performance for the fiscal years listed below. The Human Resources Committee did not consider theThis pay versus performance disclosure below in making its compensation decisions forshould not be deemed incorporated by reference into any other filing under the Securities Act of 1933 or the years shown.Exchange Act of 1934. 20222023 Pay Versus Performance Table
| | 2022 | | | 7,761,196 | | | 6,710,784 | | | 2,902,402 | | | 2,733,528 | | | 97.30 | | | 99.67 | | | 135 | | | 19.9% | | | | 2021(6) | | | 11,176,606 | | | 15,683,430 | | | 2,790,546 | | | 3,712,300 | | | 108.93 | | | 131.78 | | | (195) | | | 19.9% | | | | 2020 | | | 4,443,270 | | | 1,624,068 | | | 1,363,271 | | | 782,922 | | | 80.26 | | | 92.00 | | | (461) | | | 3.1% | |
| | 2023 | | | — | | | — | | | 6,015,205 | | | 10,397,228 | | | 2,406,619 | | | 5,315,520 | | | 136.43 | | | 113.35 | | | 342 | | | 473.1 | | | | 2022 | | | 7,761,196 | | | 6,710,784 | | | — | | | — | | | 2,902,402 | | | 2,733,528 | | | 97.30 | | | 99.67 | | | 135 | | | 363.5 | | | | 2021 | | | 11,176,606 | | | 15,683,430 | | | — | | | — | | | 2,790,546 | | | 3,712,300 | | | 108.93 | | | 131.78 | | | (195) | | | 52.0 | | | | 2020 | | | 4,443,270 | | | 1,624,068 | | | — | | | — | | | 1,363,271 | | | 782,922 | | | 80.26 | | | 92.00 | | | (461) | | | (149.6) | |
(1)
| Colin Reed was our PEO for each year presented.the 2020-2022 fiscal years. Mark Fioravanti was our PEO for the 2023 fiscal year. The individuals comprising the non-PEO NEOs for each fiscal year presented are listed below. |
| | Mark Fioravanti | | | Colin Reed | | | | Jennifer Hutcheson | | | Jennifer Hutcheson | | | | Patrick Chaffin | | | Patrick Chaffin | | | | Scott Lynn | | | Scott Lynn | |
(2)
| The amounts shown for Compensation Actually Paid (CAP) have been calculated in accordance with Item 402(v) of Regulation S-K and do not reflect compensation actually earned, realized or received by the company’s PEO and Non-PEOnon-PEO NEOs. TheThese amounts shown for CAP reflect the Summary Compensation Table (SCT) total with certain adjustments as described in footnote 3 below. |
(3)
| Compensation Actually Paid (CAP) reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards column set forth in the Summary Compensation Table (SCT).Table. |
| | 2022 | | | 7,761,196 | | | (3,301,354) | | | 2,250,942 | | | 6,710,784 | | | | 2021 | | | 11,176,606 | | | (6,750,915) | | | 11,257,739 | | | 15,683,430 | | | | 2020 | | | 4,443,270 | | | (3,312,847) | | | 493,645 | | | 1,624,068 | |
| | 2023 | | | 6,015,205 | | | (2,857,285) | | | 7,239,308 | | | 10,397,228 | |
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| | 2022 | | | 2,902,402 | | | (1,028,394) | | | 859,520 | | | 2,733,528 | | | | 2021 | | | 2,790,546 | | | (1,349,224) | | | 2,270,979 | | | 3,712,300 | | | | 2020 | | | 1,363,271 | | | (785,952) | | | 205,602 | | | 782,922 | |
| | 2023 | | | 2,406,619 | | | (890,722) | | | 3,799,623 | | | 5,315,520 | |
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables. | | 2022 | | | 3,662,826 | | | (1,325,860) | | | — | | | (86,024) | | | — | | | — | | | 2,250,942 | | | | 2021 | | | 8,049,720 | | | 2,453,354 | | | — | | | 754,665 | | | — | | | — | | | 11,257,739 | | | | 2020 | | | 2,419,550 | | | (1,292,386) | | | — | | | (633,519) | | | — | | | — | | | 493,645 | |
| | 2023 | | | 4,163,981 | | | 2,940,638 | | | — | | | 134,689 | | | — | | | — | | | 7,239,308 | |
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| | Year | | Average
Year-End
Fair Value
of Equity
Awards
Granted
During
Year That
Remained
Unvested
as of Last
Day of
Year for
Non-PEO
NEOs
($) | | Change in
Fair Value
from Last
Day of
Prior Year
to Last
Day of
Year of
Unvested
Equity for
Non-PEO
NEOs
($) | | Vesting-
Date Fair
Value of
Equity
Awards
Granted
During
Year that
Vested
During
Year for
Non-PEO
NEOs
($) | | Change in
Fair Value
from Last
Day of
Prior Year
to Vesting
Date of
Unvested
Equity
Awards
that Vested
During
Year for
Non-PEO
NEOs
($) | | Fair Value
at Last
Day of
Prior Year
of Equity
Awards
Forfeited
During
Year for
Non-PEO
NEOs
($) | | Value of
Dividends
or Other
Earnings
Paid on
Equity
Awards
Not
Otherwise
Included
for Non-
PEO
NEOs
($) | | Total – Inclusion
of Equity Values
for Non-PEO
NEOs
($) | | Year | | Average
Year-End
Fair Value
of Equity
Awards
Granted
During
Year That
Remained
Unvested
as of Last
Day of
Year for
Non-PEO
NEOs
($) | | Change in
Fair Value
from Last
Day of
Prior Year
to Last
Day of
Year of
Unvested
Equity for
Non-PEO
NEOs
($) | | Vesting-
Date Fair
Value of
Equity
Awards
Granted
During
Year that
Vested
During
Year for
Non-PEO
NEOs
($) | | Change in
Fair Value
from Last
Day of
Prior Year
to Vesting
Date of
Unvested
Equity
Awards
that Vested
During
Year for
Non-PEO
NEOs
($) | | Fair Value
at Last
Day of
Prior Year
of Equity
Awards
Forfeited
During
Year for
Non-PEO
NEOs
($) | | Value of
Dividends
or Other
Earnings
Paid on
Equity
Awards
Not
Otherwise
Included
for Non-
PEO
NEOs
($) | | Total – Inclusion
of Equity Values
for Non-PEO
NEOs
($) | | | | 2022 | | 1,130,257 | | (250,132) | | — | | (20,605) | | — | | — | | 859,520 | | 2023 | | 1,298,000 | | 2,381,109 | | — | | 120,514 | | — | | — | | 3,799,623 | | | | 2021 | | 1,607,947 | | 533,960 | | — | | 129,072 | | — | | — | | 2,270,979 | | | | | 2020 | | 572,570 | | (242,110) | | — | | (124,858) | | — | | — | | 205,602 | | |
(4)
| The Peer Group Total Stockholder Return (TSR) set forth in this table utilizes the FTSE NAREIT Equity REITs Index, which we also utilize in the stock performance graph required by Item 201(e) of SEC Regulation S-K included in our 20222023 annual report to stockholders. The comparison assumes $100 was invested for the period starting December 31, 2019 through the end of the listed year in the company and in the FTSE NAREIT Equity REITs Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. |
TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
report to stockholders. The comparison assumes $100 was invested for the period starting December 31, 2019 through the end of the listed year in the company and in the FTSE NAREIT Equity REITs Index, respectively. Historical stock performance is not necessarily indicative of future stock performance. (5)
| As described in the Compensation Discussion and Analysis, the TSR-linked performance-based RSUs granted in 2022 will be determined by comparing our Total Stockholder Return (TSR) performance during the three-year performance period relative to the median of the Total Stockholder Return (TSR) performance of two peer groups, weighted equally: (1) our 2022 Compensation Peer Group; and (2) selected companies within the FTSE NAREIT Lodging Resorts Index. We determined Relative Total Stockholder Return (TSR) (Outperformance of 2022 Compensation Peer Group)Adjusted Funds from Operations (AFFO) available to common stockholders and unit holders to be the most important financial performance measure used to link company performance to Compensation Actually Paid (CAP) to our PEO and Non-PEOnon-PEO NEOs in 2022, given its impact on our determination2023 since, as described in the Compensation Discussion and Analysis above, this metric represents the largest component of the change in value of the 2022 TSR-linked performance-based RSUs. As required under SEC guidance the table above reflects our relative outperformance (i.e., above the median) for each listed fiscal year as compared with the 2022 Compensation Peer Group. The company’s three-year TSR outperformance against the applicable peer groups, measured at the end of the three-year performance period ending on December 31, 2022, 2021 and 2020, was approximately 36%, 41% and 30%, respectively. This performance measure may not have been the most important financial performance goals established for our 2023 short-term cash incentive compensation plan. AFFO available to common stockholders and unit holders is a non-GAAP financial measure. For a definition of AFFO available to common stockholders and unit holders and a reconciliation of this non-GAAP financial measure for years 2021to consolidated net income (the most comparable GAAP financial measure), and 2020,an explanation of why we believe AFFO available to common stockholders and weunit holders presents useful information to investors, see Appendix A. We may determine a different financial performance measure to be the most important financial performance measure in future years.
|
(6)
| The compensation figures set forth in this row were elevated in fiscal 2021 because of the special one-time performance-based RSU grants awarded to each NEO on February 25, 2021. This one-time grant of a special stock price-linked performance-based RSU award was made to each NEO and to each director-level and above employee of the company (a total of 52 employees) to incentivize management’s efforts to return the company’s financial performance to pre-pandemic levels and to encourage retention in a challenging labor market. These awards will vest at the end of a three-year performance period, extending from March 1, 2021 until March 1, 2024, to the extent that our common stock trades for a period of time above $100.98 and $109.05 per share, which represented (i) a 25% premium and a 35% premium, respectively, to our common stock closing price on the date of the award ($80.78), and (ii) a 10% premium and a 19% premium, respectively, to our then all-time high common stock closing price as of the date of the award ($91.49). There is no minimum payout level associated with these performance-based RSU awards (i.e., all of this compensation is “at risk”). As of December 31, 2022, no awards had been earned under this program. For additional information regarding these special one-time performance-based RSU grants, see Compensation Discussion and Analysis—2022 Compensation Decisions—One-Time 2021 Long-Term Stockholder Value Creation Program Awards.
|
TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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Description of the Relationships Between Executive Compensation Actually Paid (CAP) and Metrics on the Pay Versus Performance Table Description of Relationship Between PEO and Average Non-PEO NEO Compensation Actually Paid (CAP) and, Company Total Shareholder Return (TSR) and Peer Group TSR
The following chart sets forth the relationship between Compensation Actually Paid (CAP) to our PEO,PEOs, the average of Compensation Actually Paid (CAP) to our othernon-PEO NEOs, and the company’s cumulative Total Stockholder Return (TSR)TSR over the threefour most recently completed fiscal years.years, and the cumulative TSR for the FTSE NAREIT Equity REITs Index over same period. TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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Description of Relationship Between PEO and Average Non-PEO NEO Compensation Actually Paid (CAP) and Net Income
The following chart sets forth the relationship between Compensation Actually Paid (CAP) to our PEO,PEOs, the average of Compensation Actually Paid (CAP) to our othernon-PEO NEOs, and the company’s net income during the threefour most recently completed fiscal years. TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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Description of Relationship Between PEO and Average Non-PEO NEO Compensation Actually Paid (CAP) and Relative Total Stockholder Return (TSR) (Outperformance of 2022 Compensation Peer Group)AFFO Available to Common Stockholders and Unit Holders
The following chart sets forth the relationship between Compensation Actually Paid (CAP) to our PEO,PEOs, the average of Compensation Actually Paid (CAP) to our othernon-PEO NEOs, and the company’s Relative Total Stockholder Return (TSR) (Outperformance of 2022 Compensation Peer Group)AFFO available to common stockholders and unit holders during the threefour most recently completed fiscal years. TABLE OF CONTENTS
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Description of Relationship Between Company Total Stockholder Return (TSR) and Peer Group Total Stockholder Return (TSR)
The following chart compares our cumulative Total Stockholder Return (TSR) over the three most recently completed fiscal years to that of the FTSE NAREIT Equity REITs Index over the same period.
Tabular List of Most Important Financial Performance Measures The following table presents the financial performance measures that the company considers to have been the most important in linking Compensation Actually Paid (CAP) to our PEO and otherour non-PEO NEOs for 20222023 to company performance. The measures in this table are not ranked. | | AFFO Available to Common Stockholders and Unit Holders | | | | Total Consolidated Revenue | | | | Consolidated Adjusted EBITDAre Margin | | | | Relative TSR (Outperformance of 20222023 Compensation Peer Group) | | | | Relative TSR (Outperformance of Identified Companies within the FTSE NAREIT Lodging Resorts Index) | | | Total Consolidated Revenue
| | | AFFO Available to Common Stockholders and Unit Holders
| | | Consolidated Adjusted EBITDAre Margin
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Other Compensation Information No NEOs participate in our frozen defined benefit plan. Nonqualified Deferred Compensation Supplemental Deferred Compensation Our supplemental deferred compensation plan, or SUDCOMP, is a nonqualified plan that allows eligible participants, including NEOs (whose ability to contribute amounts to our 401(k) plan may be limited by IRS regulations), to defer up to 40% of their base salary, less amounts deferred under our 401(k) plan, and up to 100% of their short-term cash incentive compensation. We contribute one dollar for each dollar contributed by the participant, up to four percent of the participant’s contributions (less matching amounts under our 401(k) plan). Participants elect hypothetical investment options mirroring the funds in our 401(k) plan, with the exception of company stock. Participants can change their investment selections on a daily basis in the same manner as the 401(k) plan. Deferred amounts are credited with earnings or losses based on the rate of return of the investment options selected by the participant. When participants elect to defer amounts into the SUDCOMP, they also select when the amounts will be distributed to them. Distributions may either be made in a specific year (whether or not employment has then ended) or at a time that begins at or after termination of employment. Distributions can be made in a lump sum or up to 15 annual installments. However, after a participant’s employment ends, his or her account balance is automatically distributed in a lump sum (without regard to his or her election) if the balance is $10,000 or less. Supplemental Executive Retirement Plan When we recruited Mr. Reed to join us in 2001, we agreed to establish a supplemental executive retirement plan, or SERP, for Mr. Reed with an initial retirement benefit of $2.5 million. We believed at the time (and continue to believe) that the SERP was a material factor in Mr. Reed’s agreement to give up benefits at his former employer and to begin working for us. We believe that the SERP benefit was necessary to attract and retain a highly qualified executive such as Mr. Reed. Mr. Reed’s April 23, 2001 employment agreement with us established the SERP, which fully vested on April 23, 2005. In 2004, as part of an amendment to Mr. Reed’s employment agreement extending his employment term, we agreed to adjust the initial SERP benefit for hypothetical investment earnings or losses, based on the performance of one or more mutual funds selected by Mr. Reed. At that time, we also agreed to pay Mr. Reed an additional retirement benefit under the SERP of $1.0 million, as adjusted beginning April 23, 2005 for hypothetical investment earnings or losses, based on the performance of one or more mutual funds selected by Mr. Reed. This additional SERP benefit fully vested on May 1, 2010. Mr. Reed is entitled to receive all of his SERP benefit upon any termination of employment. Mr. Reed has elected to receive his SERP benefits, as adjusted, in the form of one lump sum payment. On February 4, 2008, we entered into a new employment agreement with Mr. Reed which did not modify the terms of the SERP. On December 18, 2008, we amended Mr. Reed’s employment agreement to allow him to make an irrevocable election to invest his SERP benefit in our common stock. We established an independent rabbi trust and transferred cash in an amount equal to the then-current balance of the SERP benefit, and the independent trustee of the rabbi trust purchased shares of our common stock in the open market. Mr. Reed is now only entitled to a distribution of our stock and any accrued cash dividends held by the rabbi trust in satisfaction of his SERP benefit. We believe that the ownership of shares of common stock by the rabbi trust and the distribution of those shares and any accrued cash dividends to Mr. Reed in satisfaction of his SERP benefit meets requirements necessary so that we will not recognize any increase or decrease in expense as a result of subsequent changes in the TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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value of our common stock. The terms of the rabbi trust provide that, to the extent that the shares owned by the rabbi trust are entitled to vote on any matter, the rabbi trustee will be entitled to vote such shares. In 2020 we amended the SERP to remove a provision that, due to an unanticipated change in the tax laws, could have resulted in an unintended significant delay in payment of the SERP benefit to Mr. Reed upon the termination of Mr. Reed’s employment. 20222023 Nonqualified Deferred Compensation Table The table below shows each NEO’s salary deferrals, company matching obligations, earnings and account balances in the SUDCOMP (and, in the case of Mr. Reed, his SERP), as of December 31, 2022.2023. | | Name
(a) | | Plan
(b) | | Executive
Contributions
in Last FY(1)
($)(c) | | Registrant
Contributions
in Last FY
($)(d) | | Aggregate
Earnings
(Losses) in
Last FY(2)
($)(e) | | Aggregate
Withdrawals/
Distributions in
Last FY
($)(f) | | Aggregate
Balance at
Last FYE(3)
($)(g) | | Name
(a) | | Plan
(b) | | Executive
Contributions
in Last FY(1)
($)(c) | | Registrant
Contributions
in Last FY
($)(d) | | Aggregate
Earnings
(Losses) in
Last FY(2)
($)(e) | | Aggregate
Withdrawals/
Distributions in
Last FY ($)(f) | | Aggregate
Balance at
Last FYE(3)
($)(g) | | | | Colin Reed | | SUDCOMP | | — | | — | | (985,269) | | — | | 23,074,318 | | Mark Fioravanti | | SUDCOMP | | 59,888 | | 27,641 | | 548,122 | | — | | 3,248,584 | | | | Colin Reed | | SERP(4) | | — | | — | | (6,609,891)(5) | | — | | 53,017,156(6) | | Colin Reed | | SERP(4) | | — | | — | | 20,478,790(5) | | — | | 73,495,946(6) | | | | Mark Fioravanti | | SUDCOMP | | 61,921 | | 29,455 | | (443,464) | | — | | 2,385,048 | | Colin Reed | | SUDCOMP | | — | | — | | 1,683,829 | | — | | 24,758,147 | | | | Jennifer Hutcheson | | SUDCOMP | | — | | — | | (15,723) | | — | | 121,378 | | Jennifer Hutcheson | | SUDCOMP | | 23,748 | | 15,531 | | 22,561 | | — | | 183,218 | | | | Patrick Chaffin | | SUDCOMP | | 32,028 | | 21,014 | | (81,379) | | — | | 471,814 | | Patrick Chaffin | | SUDCOMP | | 28,531 | | 18,583 | | 72,991 | | — | | 591,918 | | | | Scott Lynn | | SUDCOMP | | — | | — | | (5,559) | | — | | 235,139 | | Scott Lynn | | SUDCOMP | | — | | — | | 34,279 | | — | | 269,418 | |
(1)
| Amounts in this column are reported as compensation in the 20222023 Summary Compensation Table above. Amounts in this column do not include deferrals of cash incentive compensation amounts with respect to the 20212022 fiscal year paid in 20222023 (which, in the case of Mr. Fioravanti, was $97,878)$149,523) or company matching amounts with respect to such deferral (which, in the case of Mr. Fioravanti, was $55,930)$78,362). |
(2)
| None of the amounts in this column are included as compensation in the 20222023 Summary Compensation Table above because above-market or preferential earnings are not available. |
(3)
| Of the amounts listed in this column with respect to the SUDCOMP, the following amounts have been reported as compensation in the 20222023 Summary Compensation Table above or previous years (or would have been reported if the NEO had been included in our proxy statement in those years): Mr. Fioravanti: $1,008,793; Mr. Reed: $9,292,421; Mr. Fioravanti: $799,382; Ms. Hutcheson: $60,590;$84,338; Mr. Chaffin: $197,896;$226,427; and Mr. Lynn: $166,834. With respect to Mr. Reed’s SERP, no amounts have been reported as compensation in the Summary Compensation Table for 20222023 or previous years. |
(4)
| We have summarized the SERP benefit using the disclosure format prescribed by the SEC for nonqualified deferred compensation (under Item 402(i) of SEC Regulation S-K) rather than pension benefits due to the fact that this SERP benefit more closely resembles a “defined contribution” award than a “defined benefit” award. This determination was based on the fact that the value of the SERP benefit in 20222023 was based solely on the amounts previously contributed. |
(5)
| Represents the change in market value of our common stock from December 31, 20212022 to December 31, 2022,2023, plus the reinvestment of cash dividends received on the shares of common stock held in the SERP. This amount has not been reported as compensation in the Summary Compensation Table for 20222023 or previous years since above-market or preferential returns are not available with respect to the SERP. |
(6)
| Represents the value of both the initial SERP benefit and the additional SERP benefit as of December 31, 2022,2023, which is calculated by multiplying the 648,290667,574 shares of our common stock held by the rabbi trust on such date by the December 30, 202229, 2023 NYSE closing price of our common stock ($81.78)110.06), plus accrued cash dividends.cash. |
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Potential Payments on Termination or Change of Control Employment and Severance Agreements Mr. ReedFioravanti and Mr. FioravantiReed each have employment agreements with us, originally entered into in February 2008, with an initial two-year term and automatically renewing two-year terms (unless either party provides notice of non-renewal). Mr. Fioravanti’s employment agreement was amended in February 2010, September 2010, November 2012, March 2022 and October 2022. Mr. Reed’s employment agreement was amended in December 2008, September 2010, November 2012, December 2020 and October 2022. Mr. Fioravanti’s employment agreement was amended in February 2010, September 2010, November 2012, March 2022 and October 2022. The October 2022 amendments were made in connection with Mr. Fioravanti’s appointment as Chief Executive Officer. For additional information regarding the 2023 CEO transition, see Compensation Discussion and Analysis—2023 CEO Transition. Mr. Reed’s and Mr. Fioravanti’s employment agreements, together with each of their equity incentive award agreements and the terms of our incentive and other benefit plans, provide for cash payments and other benefits in connection with their termination of employment in various circumstances, including in the event of a Change of Control (as defined below). Payment of these amounts generally is conditioned upon compliance with the other provisions of the agreement, which include confidentiality obligations and nonsolicitation and noncompetition provisions. Ms. Hutcheson, Mr. Chaffin and Mr. Lynn each have severance agreements with us, entered into in March 2022 (in the case of Ms. Hutcheson) and February 2018 (in the case of Mr. Chaffin and Mr. Lynn). The severance agreements provide for cash payments and other benefits only in connection with Ms. Hutcheson’s, Mr. Chaffin’s or Mr. Lynn’s termination of employment in the event of a Change of Control. Payment of these amounts generally is conditioned upon compliance with the other provisions of the severance agreement, which include confidentiality obligations. In addition, Ms. Hutcheson’s, Mr. Chaffin’s and Mr. Lynn’s equity incentive award agreements, and the terms of our incentive and other benefit plans, provide for other benefits in connection with their termination of employment in various circumstances, including in the event of a Change of Control. Description of Potential Payments on Termination or Change of Control The discussion below outlines our obligations to our NEOs upon a termination or Change of Control. Except as otherwise noted, the discussion applies to each NEO. Payments Made on Any Termination of Employment Regardless of the manner in which an NEO’s employment with us is terminated, the NEO would be entitled to receive amounts which have been earned by the NEO pursuant to the terms of our incentive and other benefit plans(1). TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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Payments Made on Termination With Cause or Resignation Without Good Reason Mr. Reed’sFioravanti’s and Mr. Fioravanti’sReed’s employment agreements each provide that if the executive is terminated for Cause(2)or if he resigned without Good Reason(3) he would not be entitled to receive any payments (other than as listed under Payments Made on Any Termination of Employment). Payments Made on Death or Disability Mr. Reed’sFioravanti’s and Mr. Fioravanti’sReed’s employment agreements, together with their equity incentive award agreements and the terms of our incentive and other benefit plans, provide for the following payments and other benefits (in addition to payments under our disability or life insurance plans) if the executive dies or becomes “permanently disabled” (defined as a physical or mental incapacity rendering him unable to perform job duties for 90 consecutive days or for a total of 180 days in any 12 month period): | | • | | | all amounts under Payments Made on Any Termination of Employment above; | | | | • | | | a pro rata portion of his annual short-term cash incentive compensation in the year of termination; | | | | • | | | the immediate vesting of all time-based RSUs; | | | | • | | | for all performance-based RSUs, a pro rata (based on length of service during the performance period) portion of the awards actually vesting to the extent of satisfaction of the applicable performance criteria; | |
| | • | | | the accelerated vesting of all outstanding stock option awards (with an exercise period ending on the option expiration date); and | | | | • | | | in the case of Mr. Reed, continuation of health care coverage at employee rates for Mr. Reed and his spouse until the earlier of their election to terminate coverage (or their non-payment of premiums), their death or until we stop providing health care coverage to our employees. | |
In the event of Ms. Hutcheson’s, Mr. Chaffin’s or Mr. Lynn’s death or permanent disability, the executive would be entitled, under the terms of the executive’s equity incentive award agreements and the terms of our incentive and other benefit plans, to the following (in addition to payments under our disability or life insurance plans): | | • | | | all amounts under Payments Made on Any Termination of Employment above; | | | | • | | | the immediate vesting of all time-based RSUs; | | | | • | | | for all performance-based RSUs, a pro rata (based on length of service during the performance period) portion of the awards actually vesting to the extent of satisfaction of the applicable performance criteria; and | | | | • | | | the accelerated vesting of all outstanding stock option awards (with an exercise period ending on the option expiration date). | |
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Payments Made on Termination Without Cause or Resignation for Good Reason (Other Than Following a Change of Control) Mr. Reed’sFioravanti’s and Mr. Fioravanti’sReed’s employment agreements, together with their equity incentive award agreements and the terms of our incentive and other benefit plans, provide for the following payments and other benefits if the executive is terminated without Cause (or resigned for Good Reason), other than following a Change of Control: | | • | | | all amounts under Payments Made on Any Termination of Employment above; | | | | • | | | a severance payment equal to two times the executive’s current base salary plus two times the executive’s annual short-term cash incentive compensation for the previous year; | | | | • | | | in the case of Mr. Fioravanti, a pro rata portion of his annual cash bonus in the year of termination; | | | | • | | | immediate vesting of all RSU awards scheduled to vest within 2 years of termination (in the case of performance-based RSUs, to the extent of the satisfaction of applicable performance criteria); | | | | • | | | the accelerated vesting of all stock option awards scheduled to vest within 2 years of termination (with the executive having 2 years from termination to exercise the awards); and | | | | • | | | in the case of Mr. Fioravanti, an amount equal to the equivalent cost of COBRA medical coverage for Mr. Fioravanti and his spouse for a period of 2 years from termination; and in the case of Mr. Reed, continuation of health care coverage at employee rates for Mr. Reed and his spouse until the earlier of their election to terminate coverage (or their non-payment of premiums), their death or until we stop providing health care coverage to our employees; and in the case of Mr. Fioravanti, an amount equal to the equivalent cost of COBRA medical coverage for Mr. Fioravanti and his spouse for a period of 2 years from termination.employees. | |
Payments Made on Termination Without Cause or Resignation for Good Reason Following a Change of Control Mr. Reed’sFioravanti’s and Mr. Fioravanti’sReed’s employment agreements (and Ms. Hutcheson’s, Mr. Chaffin’s and Mr. Lynn’s severance agreements), together with their equity incentive award agreements and the terms of our incentive and other benefit plans, provide for payments and other benefits in the event of a termination in a designated period(4) following a Change of Control. With respect to the employment agreements with Mr. ReedFioravanti and Mr. FioravantiReed (and the severance agreements with Ms. Hutcheson, Mr. Chaffin and Mr. Lynn), a “Change of Control” is deemed to occur if: any person, other than us, our benefit plan or our designated affiliates, becomes the beneficial owner of 35% or more of our outstanding voting stock; a majority of the incumbent members of our Board cease to serve on our Board without the consent of the incumbent Board; following a merger, tender or exchange offer, other business combination or contested election, the holders of our stock prior to the transaction hold less than a majority of the combined voting power of the combined entity; or we sell all or substantially all of our assets. TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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If any of our NEOs were terminated without Cause(5)(or (or resigned for Good Reason(6)) following a Change of Control within the designated period, the executive would be entitled to receive: | | • | | | all amounts under Payments Made on Any Termination of Employment above; | | | | • | | | the following severance payment: | |
| | Mr. Fioravanti &
Mr. Reed & Mr. Fioravanti | | | Ms. Hutcheson, Mr. Chaffin & Mr. Lynn | | | | 3x base salary plus 3x the greater of (i) his annual short-term cash incentive compensation for the most recent year, or (ii) his average short-term cash incentive compensation for the most recent 3 years | | | 2x base salary plus 2x last year’s annual bonus | |
| | • | | | immediate vesting of all RSUs, with performance-based RSUs vesting at the target level; | | | | • | | | the accelerated vesting of all outstanding stock option awards. Each NEO would have 2 years from termination to exercise the awards; | |
| | • | | | continuation of health care coverage at employee rates: for Mr. Fioravanti, an amount equal to the equivalent cost of COBRA medical coverage for Mr. Fioravanti and his spouse for a period of 3 years from termination; for Mr. Reed and his spouse, until the earlier of their election to terminate such coverage (or non-payment of premiums), their death or until we stop providing health care coverage to our employees; for Mr. Fioravanti, an amount equal to the equivalent cost of COBRA medical coverage for Mr. Fioravanti and his spouse for a period of 3 years from termination; for Ms. Hutcheson, Mr. Chaffin and Mr. Lynn, for 2 years from the Change of Control; | | | | • | | | in the case of Mr. Fioravanti, executive physical examination fees for 1 year.3 years. | |
In addition, under the terms of our omnibus incentive plan and the award agreements issued thereunder, in the event of a Change of Control(7), irrespective of any termination of employment, all outstanding RSU awards held by our NEOs and other employees would vest immediately, with performance-based RSUs vesting at target level, and all outstanding stock option awards held by our NEOs and other employees would automatically accelerate and become exercisable. TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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Summary of Potential Payments on Termination or Change of Control The following tables estimate the value of the potential payments on termination or change of control of the company for the NEOs as of December 31, 2022.2023. | | Cash Severance
| | | | | | | | | | | | | | | | | | | Mr. Reed | | | — | | | — | | | — | | | 8,250,000(1) | | | 12,375,000(2) | | | | Mr. Fioravanti | | | — | | | — | | | — | | | 2,148,523(3) | | | 6,445,569(2) | | | | Ms. Hutcheson | | | — | | | — | | | — | | | — | | | 1,937,264(4) | | | | Mr. Chaffin | | | — | | | — | | | — | | | — | | | 3,032,162(4) | | | | Mr. Lynn | | | — | | | — | | | — | | | — | | | 2,475,800(4) | | | | Non-Equity Incentive Compensation
| | | | | | | | | | | | | | | | | | | Mr. Reed | | | — | | | — | | | — | | | — | | | — | | | | Mr. Fioravanti | | | — | | | — | | | — | | | — | | | — | | | | Ms. Hutcheson | | | — | | | — | | | — | | | — | | | — | | | | Mr. Chaffin | | | — | | | — | | | — | | | — | | | — | | | | Mr. Lynn | | | | | | — | | | — | | | — | | | — | | | | Performance-Based RSU Accelerated Vesting(5)
| | | | | | | | | | | | | | | | | | | Mr. Reed | | | — | | | — | | | 8,943,624 | | | 7,117,150 | | | 8,943,624 | | | | Mr. Fioravanti | | | — | | | — | | | 3,519,321 | | | 654,240(6) | | | 3,519,321 | | | | Ms. Hutcheson | | | — | | | — | | | 1,089,146 | | | — | | | 1,089,146 | | | | Mr. Chaffin | | | — | | | — | | | 1,603,215 | | | — | | | 1,603,215 | | | | Mr. Lynn | | | — | | | — | | | 1,384,617 | | | — | | | 1,384,617 | | | | Time-Based RSU Accelerated Vesting(7)
| | | | | | | | | | | | | | | | | | | Mr. Reed | | | — | | | — | | | 4,014,090 | | | 2,790,661 | | | 4,014,090 | | | | Mr. Fioravanti | | | — | | | — | | | 2,716,077 | | | 635,022(8) | | | 2,716,077 | | | | Ms. Hutcheson | | | — | | | — | | | 600,265 | | | — | | | 600,265 | | | | Mr. Chaffin | | | — | | | — | | | 875,537 | | | — | | | 875,537 | | | | Mr. Lynn | | | — | | | — | | | 613,023 | | | — | | | 613,023 | | | | Other Benefits and Perquisites
| | | | | | | | | | | | | | | | | | | Mr. Reed | | | — | | | — | | | 224,575(9) | | | 224,575(9) | | | 224,575(9) | | | | Mr. Fioravanti | | | — | | | — | | | — | | | 23,976(11) | | | 38,964(10) | | | | Ms. Hutcheson | | | — | | | — | | | — | | | — | | | 47,712(11) | | | | Mr. Chaffin | | | — | | | — | | | — | | | — | | | 47,712(11) | | | | Mr. Lynn | | | — | | | — | | | — | | | — | | | 47,712(11) | |
| | Cash Severance | | | | | | | | | | | | | | | | | | | Mr. Fioravanti | | | — | | | — | | | — | | | 5,489,338(1) | | | 8,234,007(2) | | | | Mr. Reed | | | — | | | — | | | — | | | 6,854,200(1) | | | 10,281,300(2) | | | | Ms. Hutcheson | | | — | | | — | | | — | | | — | | | 2,786,782(3) | | | | Mr. Chaffin | | | — | | | — | | | — | | | — | | | 3,066,558(3) | | | | Mr. Lynn | | | — | | | — | | | — | | | — | | | 2,412,032(3) | | | | Non-Equity Incentive Compensation | | | | | | | | | | | | | | | | | | | Mr. Fioravanti | | | — | | | — | | | — | | | — | | | — | | | | Mr. Reed | | | — | | | — | | | — | | | — | | | — | | | | Ms. Hutcheson | | | — | | | — | | | — | | | — | | | — | | | | Mr. Chaffin | | | — | | | — | | | — | | | — | | | — | | | | Mr. Lynn | | | — | | | — | | | — | | | — | | | — | | | | Performance-Based RSU Accelerated Vesting(4)
| | | | | | | | | | | | | | | | | | | Mr. Fioravanti | | | — | | | — | | | 5,141,783 | | | 4,351,112 | | | 5,141,783 | | | | Mr. Reed | | | — | | | — | | | 12,664,494 | | | 11,460,548 | | | 12,664,494 | | | | Ms. Hutcheson | | | — | | | — | | | 1,895,013 | | | — | | | 1,895,013 | | | | Mr. Chaffin | | | — | | | — | | | 2,378,066 | | | — | | | 2,378,066 | | | | Mr. Lynn | | | — | | | — | | | 1,978,108 | | | — | | | 1,978,108 | | | | Time-Based RSU Accelerated Vesting(5)
| | | | | | | | | | | | | | | | | | | Mr. Fioravanti | | | — | | | — | | | 4,733,571 | | | 2,861,450 | | | 4,733,571 | | | | Mr. Reed | | | — | | | — | | | 4,580,807 | | | 3,465,679 | | | 4,580,807 | | | | Ms. Hutcheson | | | — | | | — | | | 982,065 | | | — | | | 982,065 | | | | Mr. Chaffin | | | — | | | — | | | 964,456 | | | — | | | 964,456 | | | | Mr. Lynn | | | — | | | — | | | 800,136 | | | — | | | 800,136 | | | | Other Benefits and Perquisites | | | | | | | | | | | | | | | | | | | Mr. Fioravanti | | | — | | | — | | | — | | | 13,452(6) | | | 29,178(7) | | | | Mr. Reed | | | — | | | — | | | 233,090(8) | | | 233,090(8) | | | 233,090(8) | | | | Ms. Hutcheson | | | — | | | — | | | — | | | — | | | 49,522(9) | | | | Mr. Chaffin | | | — | | | — | | | — | | | — | | | 49,522(9) | | | | Mr. Lynn | | | — | | | — | | | — | | | — | | | 49,522(9) | |
(1)
| Amount equal to two times base salary in effect for Mr. Reedthe NEO at December 31, 2022 ($1,100,000),2023, plus two times short-term cash incentive compensation for Mr. Reedthe NEO for the 20212022 fiscal year ($3,025,000). Effective as of January 1, 2023, Mr. Reed’s base salary was reduced to $500,000.year. |
(2)
| Amount equal to three times base salary in effect for the NEO at December 31, 2022, plus three times short-term cash incentive compensation for the 2021 fiscal year (the highest short-term cash incentive compensation for the last three fiscal years). Effective as of January 1, 2023, this amount would be equal to three times base salary in effect the date of termination, plus three times the greater of (i) short-term cash incentive compensation for the most recently completed2022 fiscal year, and (ii) the average short-term cash incentive compensation for the three most recently completed fiscal years. |
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(3)
| Amount equal to one times base salary in effect at December 31, 2022, plus one times short-term cash incentive compensation for the 2021 fiscal year. Effective as of January 1, 2023, this amount would be equal to two times base salary in effect the date of termination, plus two times short-term cash incentive compensation for the most recently completed fiscal year. |
(4)
| Amount equal to two times base salary in effect at December 31, 2022,2023, plus two times annual bonus for the 20212022 fiscal year. |
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(5)(4)
| Calculated by multiplying the number of shares of common stock to be issued on the vesting of such award(s) by the December 30, 202229, 2023 NYSE closing price of our common stock ($81.78)110.06), assuming (i) in the case of TSR-linked RSUs,performance-based RSU awards, (1) vesting of the 2021 performance based RSU awards at the stretch (150%) performance level, and (2) vesting of the 2022 performance based RSU awards and 2023 performance based RSU awards at the target (100%) performance level and assuming,(ii) in the case of the stock-price linked2021 Value Creation Program stock price-linked RSU awards, full vesting. The 20202021 performance-based TSR-linked RSUsRSU awards ultimately vested in March 20222023 at the stretch (150%) payout level based on our achievement of TSR over the applicable performance period, as determined by the Human Resources Committee. All of the 2021 Value Creation Program stock price-linked RSUs ultimately vested in March 2023 based on our achievement of both of the applicable stock price targets over the designated performance period. The number of shares of common stock to be issued upon vesting of the remaining performance-based RSUs will ultimately be based upon the actual achievement of the performance goals stated in the applicable award agreement. |
(6)
| In the case of Mr. Fioravanti, reflects the amount payable as of December 31, 2022, which represents the number of common shares issuable upon the vesting of all performance-based RSU awards scheduled to vest within 1 year of termination. Effective as of January 1, 2023, the amount payable to Mr. Fioravanti would be equal to the number of common shares issuable upon the vesting of all performance-based RSU awards scheduled to vest within 2 years of termination. |
(7)(5)
| Calculated by multiplying the number of shares of common stock to be issued on the vesting of such award(s) by the December 30, 202229, 2023 NYSE closing price of our common stock ($81.78)110.06). |
(8)
| In the case of Mr. Fioravanti, reflects the amount payable as of December 31, 2022, which represents the number of common shares issuable upon the vesting of all time-based RSU awards scheduled to vest within 1 year of termination. Effective as of January 1, 2023, the amount payable to Mr. Fioravanti would be equal to the number of common shares issuable upon the vesting of all timed-based RSU awards scheduled to vest within 2 years of termination. |
(9)(6)
| Represents the employer portion of health insurance coverage for Mr. ReedFioravanti and his spouse for a period of 13 years (assuming a life expectancy of 88 years for Mr. Reed and assuming an annual cost of $17,275, which was the cost of such benefit in 2022).two years. |
(10)(7)
| Represents the employer portion of health insurance coverage for Mr. Fioravanti and his spouse for a period of three years and physical examination fees for Mr. Fioravanti for a period of one year.three years. |
(11)(8)
| Represents health insurance coverage for Mr. Reed and his spouse for a period of 13 years (assuming a life expectancy of 89 years for Mr. Reed and assuming an annual cost of $17,930, which was the cost of such benefit in 2023). |
(9)
| Represents the employer portion of health insurance premiums for family coverage for a period of two years. |
(12)(10)
| The awards underlying the amounts set forth under the headings “Performance-Based RSU Accelerated Vesting” and “Time-Based RSU Accelerated Vesting” will automatically vest, with performance-based RSU awards vesting at target level, upon a Change of Control (as defined in the applicable omnibus incentive plan and the award agreements issued thereunder), irrespective of whether or not the NEO is terminated in connection with a Change of Control. |
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Each non-employee director received the following annual cash compensation in 2022:2023: | | Annual Retainer (Independent Directors) | | | 65,000 | | | | Independent Lead Director | | | 30,000 | | | | Audit Committee Chairman | | | 25,000 | | | | Human Resources Committee Chairman | | | 20,000 | | | | Nominating and CG Committee Chairman | | | 15,000 | | | | Audit Committee Members | | | 10,000 | | | | Human Resources Committee Members | | | 10,000 | | | | Nominating and CG Committee Members | | | 7,500 | |
No changes were made to the level of cash compensation received by our non-employee directors in 20222023 as set forth above compared to 2021.2022. This level of annual cash compensation, which was recommended by the Human Resources Committee and approved by the full Board, of Directors, was determined based on, among other factors, peer group and general market information provided to the Human Resources Committee by Aon. Directors may elect to defer their cash compensation in the form of RSUs, the receipt of which will be deferred until either a specified date or the director’s retirement or resignation from the Board. All directors are reimbursed for expenses incurred in attending meetings. Mr. Reed and Mr. Fioravanti do not receive cash compensation for their service as a director. Equity-Based Compensation During 20222023 each non-employee director received, as of the date of the first board meeting following the annual meeting of stockholders, an annual grant of RSUs having a fixed dollar value of $120,000 (based upon the fair market value of our common stock on the grant date), which was a 20% increaseunchanged from 2021.2022. The level of annual equity-based compensation paid to non-employee directors, which was recommended by the Human Resources Committee and approved by the full Board, of Directors, was determined based on, among other factors, peer group and general market information provided to the Human Resources Committee by Aon. RSUs granted to directors vest fully on the first anniversary of the date of grant and are settled in shares of our common stock on such date, unless receipt of such shares is deferred by the director. Until shares of common stock are issued in conversion of the RSUs, the director does not have any rights as a stockholder with respect to such RSUs, other than the right to receive additional RSUs equal to any dividends paid on our common stock. Director Stock Ownership Guidelines We have adopted stock ownership guidelines for our non-employee directors, which require directors to hold a minimum of 6,000 shares of our common stock, with a five-year time period to comply. Shares of common stock issuable upon the vesting of RSUs are credited toward this requirement. If a non-employee director is not currently in compliance with these guidelines (regardless of the applicable grace period for compliance) the non-employee director must retain 50% of the net shares (after satisfying any tax obligations and any required payments upon exercise) received upon vesting of RSUs or the exercise of stock options. As of January 31, 20232024 (the annual compliance date), after taking into account the applicable grace period, all of our non-employee directors then serving in office met this requirement, as follows: | | Rachna Bhasin | | | 6,000 | | | 6,005 | | | | Alvin Bowles | | | 6,000 | | | 6,053 | | | | Christian Brickman(2) | | | 6,000 | | | 5,107 | | | | Fazal Merchant | | | 6,000 | | | 6,203 | | | | Patrick Moore | | | 6,000 | | | 19,049 | | | | Christine Pantoya | | | 6,000 | | | 6,393 | | | | Robert Prather | | | 6,000 | | | 36,476 | | | | Michael Roth | | | 6,000 | | | 39,593 | |
| | Rachna Bhasin | | | 6,000 | | | 7,315 | | | | Alvin Bowles | | | 6,000 | | | 6,084 | | | | William E. Haslam | | | 6,000 | | | 12,806 | | | | Erin M. Helgren | | | 6,000 | | | — | | | | Fazal Merchant | | | 6,000 | | | 6,082 | | | | Christine Pantoya | | | 6,000 | | | 7,749 | | | | Robert Prather | | | 6,000 | | | 39,107 | | | | Michael Roth | | | 6,000 | | | 40,903 | |
(1)
| Includes the following shares represented by RSUs held by each director: Ms. Bhasin: 1,420;1,299; Mr. Bowles: 4,102;4,090; Mr. Brickman: 4,107;Haslam: 1,299; Mr. Merchant: 1,420; Mr. Moore: 16,549;1,299; Ms. Pantoya: 1,420;2,776; Mr. Prather: 32,516;35,147; and Mr. Roth: 1,420. |
(2)
| Mr. Brickman, who formerly served as a director, resigned from his position on the Board, with such resignation being deemed effective as of March 21, 2023.1,299. |
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20222023 Non-Employee Director Compensation Table The following table summarizes the annual compensation for 20222023 for our non-employee directors who served as directors in 2022.2023. | | Rachna Bhasin | | | 82,500 | | | 119,992 | | | — | | | — | | | — | | | — | | | 202,492 | | | | Alvin Bowles | | | 75,000 | | | 119,992 | | | — | | | — | | | — | | | — | | | 194,992 | | | | Christian Brickman | | | 75,000 | | | 119,992 | | | — | | | — | | | — | | | — | | | 194,992 | | | | Fazal Merchant | | | 90,000 | | | 119,992 | | | — | | | — | | | — | | | — | | | 209,992 | | | | Patrick Moore | | | 92,500 | | | 119,992 | | | — | | | — | | | — | | | — | | | 212,492 | | | | Christine Pantoya | | | 82,500 | | | 119,992 | | | — | | | — | | | — | | | — | | | 202,492 | | | | Robert Prather | | | 120,000 | | | 119,992 | | | — | | | — | | | — | | | — | | | 239,992 | | | | Michael Roth | | | 61,875 | | | 119,992 | | | — | | | — | | | — | | | — | | | 181,867 | |
| | Rachna Bhasin | | | 82,500 | | | 121,506 | | | — | | | — | | | — | | | — | | | 204,006 | | | | Alvin Bowles | | | 75,000 | | | 121,506 | | | — | | | — | | | — | | | — | | | 196,506 | | | | Christian Brickman(3) | | | 18,750 | | | — | | | — | | | — | | | — | | | — | | | 18,750 | | | | William E. Haslam | | | 37,500 | | | 121,506 | | | — | | | — | | | — | | | — | | | 159,006 | | | | Fazal Merchant | | | 90,000 | | | 121,506 | | | — | | | — | | | — | | | — | | | 211,506 | | | | Patrick Moore(4) | | | 69,375 | | | 121,506 | | | — | | | — | | | — | | | — | | | 190,881 | | | | Christine Pantoya | | | 82,500 | | | 121,506 | | | — | | | — | | | — | | | — | | | 204,006 | | | | Robert Prather | | | 120,000 | | | 121,506 | | | — | | | — | | | — | | | — | | | 241,506 | | | | Michael Roth | | | 85,000 | | | 121,506 | | | — | | | — | | | — | | | — | | | 206,506 | |
(1)
| The amount listed above represents cash compensation paid to the director for their service as a director, or amounts of suchcash compensation which have been deferred by the director in the form of RSUs, as described above. Compensation for service on the Board and its committees is payable quarterly in arrears. Due to the timing of payments, these amounts may not correspond to the amounts listed above under Cash Compensation. |
(2)
| Represents the grant date fair value of the annual grant of 1,4151,259 RSUs to the non-employee directors then serving as directors on May 12, 2022,11, 2023, determined in accordance with FASB ASC Topic 718. See Note 7 to our consolidated financial statements for the three years ended December 31, 20222023 filed with the SEC on February 24, 202323, 2024 for the assumptions made in determining grant date fair value. As of December 31, 2022,2023, the non-employee directors then serving as directors held the following RSUs (consisting of annual RSU grants, including RSUs previously deferred, and RSUs granted pursuant to the directors deferred compensation plan, as adjusted for dividends paid on our common stock) set forth below. With respect to Mr. Brickman, (i) the annual RSU grant made on May 12, 2022 was accelerated and vested to Mr. Brickman on March 22, 2023 in connection with his resignation, and (ii) Mr. Brickman’s remaining RSUs, which had previously been deferred by Mr. Brickman, were also issued to Mr. Brickman on March 22, 2023.: |
| | Rachna Bhasin | | | 1,4161,287
| | | | Alvin Bowles | | | 4,0914,052
| | | | Christian BrickmanWilliam E. Haslam
| | | 4,0991,287
| | | | Fazal Merchant | | | 1,416
| | | Patrick Moore
| | | 16,5141,287
| | | | Christine Pantoya | | | 1,4162,750
| | | | Robert Prather | | | 32,42334,807
| | | | Michael Roth | | | 1,4161,287
| |
(3)
| During 2022 two directors elected to defer annual cash compensation pursuant toMr. Brickman resigned from the directors deferred compensation plan described above. No amount would have been reportedBoard, effective as of March 21, 2023, in this column due toconnection with his acceptance of a new position with Pritzker Private Capital. |
(4)
| Mr. Moore resigned from the fact that above-market or preferential earnings were not available under the plan.Board, effective as of June 25, 2023. |
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Since January 1, 20222023 there have not been any related person transactions that are required to be disclosed pursuant to Item 404(a) of Regulation S-K under the Exchange Act. Our policies and procedures for the review, approval or ratification of related person transactions (including those required to be disclosed under Item 404(a) of SEC Regulation S-K) are referenced in our Code of Business Conduct and Audit Committee charter and are as follows: Possible related person transactions are first screened by the company’s legal department for materiality and then sent to the Audit Committee of the Board (or, if otherwise determined by the Board, another committee of the Board) for review, discussion with the company’s management and independent registered public accounting firm and approval. In its discretion, the Audit Committee (or other committee) may also consult with our legal department or external legal counsel. Audit Committee (or other committee) review and approval of related person transactions would be evidenced in the minutes of the applicable Audit Committee (or other committee) meeting. Equity Compensation Plan InformationDecember 31, 2022 Equity Compensation Plan Information TableThe table below includes information about our equity compensation plans as of December 31, 2022:
| Equity compensation plans approved by security holders
| | | 585,011(1)
| | | — (1)
| | | 680,178
| | | Equity compensation plans not approved by security holders
| | | —
| | | —
| | | —
| | | Total:
| | | 585,011(1)
| | | — (1)
| | | 680,178
| |
(1)
| Consists of: 304,352 shares issuable upon the vesting of time-based RSUs, with a weighted-average grant date fair value of $79.54 per share; and 280,659 shares issuable upon the vesting of performance-based RSUs, with a weighted-average grant date fair value of $74.77 per share (valuing the 2020 performance-based RSUs at the stretch (150%) level and the remaining performance-based RSUs outstanding at the target (100%) level). |
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Our Independent Registered Public Accounting Firm Appointment of Ernst & Young LLP The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the work of our independent registered public accounting firm. The committee has appointed Ernst & Young LLP as our independent registered public accounting firm, who will audit our consolidated financial statements for 20232024 and the effectiveness of our internal control over financial reporting as of December 31, 2023.2024. This appointment has been submitted for your ratification. The committee and the Board believe that the continued retention of Ernst & Young LLP as our independent registered public accounting firm is in the best interests of the company and its stockholders. In making this determination, the committee and the Board have taken into account Ernst & Young LLP’s significant institutional knowledge of our business, operations, accounting policies and financial systems, and internal controls framework, as well as Ernst & Young LLP’s technical expertise (including with respect to REITs), efficiency of services, quality of communications with the committee and management and independence. In addition, in accordance with applicable rules on partner rotation, Ernst & Young LLP rotates itsthe lead audit engagement partner not less than everymay serve a maximum of five years. The committee is involved in considering the selection of Ernst & Young LLP’s primary engagement partner when there is a rotation. If you do not ratify the appointment of Ernst & Young LLP, the committee will reconsider their appointment. Ernst & Young LLP has served as our independent registered public accounting firm since 2002. Representatives of Ernst & Young LLP will attend the Annual Meeting and will have an opportunity to speak and respond to your questions. We paid the following amounts as audit, audit-related, tax and other services fees to Ernst & Young LLP for the years ended December 31, 20222023 and 2021:2022: | | Audit Fees | | | 2,023,982 | | | 1,993,301 | | | | Audit-Related Fees | | | 452,396 | | | 1,244,543 | | | | Tax Fees | | | 388,063 | | | 1,097,268 | | | | All Other Fees | | | — | | | — | | | | Total: | | | 2,864,441 | | | 4,335,112 | |
| | Audit Fees | | | 2,229,000 | | | 2,023,982 | | | | Audit-Related Fees | | | 567,601 | | | 452,396 | | | | Tax Fees | | | 308,192 | | | 388,063 | | | | All Other Fees | | | — | | | — | | | | Total: | | | 3,104,793 | | | 2,864,441 | |
Audit and Audit-Related Services The fees for audit services during 2022 include fees associated with the audit of our consolidated financial statements, including the audit of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act and reviews of our 2022 quarterly financial statements. The fees for audit services during 20212023 include fees associated with the audit of our consolidated financial statements, including the audit of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, issuances of comfort letters and assistance with documents filed with the SEC and reviews of our 20212023 quarterly financial statements. The fees for audit services during 2022 include fees associated with the audit of our consolidated financial statements, including the audit of internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act and reviews of our 2022 quarterly financial statements. The fees for audit-related services during 2023 primarily represent fees for stand-alone audits of certain of our subsidiaries and fees for due diligence services related to our acquisition of the JW Marriott Hill Country Resort & Spa. The fees for audit-related services during 2022 and 2021 primarily represent fees for stand-alone audits of certain of our subsidiaries. We believe that the engagement of Ernst & Young LLP to provide these services, and the amount of fees paid to Ernst & Young LLP in 2023 and 2022 to provide these services, was appropriate and in the best interests of the company and our stockholders given Ernst & Young LLP’s expertise and historical knowledge of our company and its organizational structure. TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
Tax Services In 2023, approximately 15% of fees for tax services related to general tax compliance matters, tax advice and planning, and tax assistance with respect to our REIT compliance efforts. The remaining 85% of fees in 2023 were for non-recurring tax services related primarily to tax advice and planning with respect to REIT lease and transfer pricing, as well as our acquisition of the JW Marriott Hill Country Resort & Spa. In 2022, approximately 9% of fees for tax services related to general tax compliance matters, tax advice and planning, and tax assistance with respect to our REIT compliance efforts. The remaining 91% of fees in 2022 were for non-recurring tax services related TABLE OF CONTENTS
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primarily to tax advice and planning with respect to REIT lease and transfer pricing, matters, as well as assistance related to the OEG strategic equity investment transaction. In 2021, approximately 19% of fees for tax services related to general tax compliance matters, tax advice and planning, and tax assistance with respect to our REIT compliance efforts. The remaining 81% of fees in 2021 were for non-recurring tax services related primarily to tax advice and planning with respect to a legal entity restructuring.
We believe that the engagement of Ernst & Young LLP to provide thesetax services, particularly in light of our REIT structure and our other tax compliance obligations, and the amount of fees paid to Ernst & Young LLP in 20222023 and 20212022 to provide these services, was appropriate and in the best interests of the company and our stockholders.stockholders given Ernst & Young LLP’s expertise and historical knowledge of our company and its organizational structure. Audit Committee Pre-Approval Policy All audit, audit-related, tax and other services were pre-approved by the committee, which concluded that the provision of such services by Ernst & Young LLP was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The committee’s pre-approval policy provides for pre-approval of audit, audit-related, tax and other services specifically described by the committee on an annual basis, and individual engagements anticipated to exceed pre-established thresholds must be separately approved. The policy also requires specific approval by the committee if total fees for audit-related and tax services would exceed total fees for audit services in any fiscal year. The policy authorizes the committee to delegate to one or more of its members pre-approval authority with respect to permitted services. TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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The following report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any of our filings under the Securities Act of 1933 or the Exchange Act, except to the extent we specifically incorporate this report by reference therein. The committee operates under a written charter originally adopted by the Board on February 4, 2004, as amended, which can be found on our website under “Corporate Governance” on the Investor Relations page. The charter is also available in print to any stockholder who requests it by making a written request addressed to: Ryman Hospitality Properties, Inc.
Attn: Corporate Secretary
One Gaylord Drive
Nashville, Tennessee 37214 All members of the committee meet the SEC and NYSE definitions of independence and financial literacy for audit committee members. In addition, the Board has determined that Mr. Merchant is an “audit committee financial expert” for purposes of SEC rules. During the fall of 20222023 the committee conducted its annual self-evaluation in order to assess its effectiveness, and at its December 20222023 meeting the committee members discussed the results of its self-evaluation process. The committee reviews the financial information provided to stockholders and others, oversees the performance of the internal audit function and the system of internal control over financial reporting which management and the Board have established, oversees compliance with legal and regulatory requirements by the company and its employees relating to the preparation of financial information and reviews the independent registered public accounting firm’s qualifications, independence and performance. As part of its oversight of our financial statements, the committee has: reviewed and discussed our audited financial statements for the year ended December 31, 2022, and the financial statements for the three years ended December 31, 2022,2023, with management and Ernst & Young LLP, our independent registered public accounting firm; discussed with Ernst & Young LLP the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board and the SEC; and received the written disclosures and the letter from Ernst & Young LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding Ernst & Young LLP’s communications with the committee on independence, and has discussed with Ernst & Young LLP its independence. TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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The committee also has considered whether the provision by Ernst & Young LLP of non-audit services described under Our Independent Registered Public Accounting Firm above is compatible with maintaining Ernst & Young LLP’s independence. The committee’s review and discussion of the audited financial statements with management included a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, the clarity of disclosures in the financial statements, and the adequacy and effectiveness of the company’s financial reporting procedures, disclosure controls and procedures and internal control over financial reporting, including management’s assessment and report on internal control over financial reporting. In addressing the quality of management’s accounting judgments, members of the committee asked for management’s representations that our audited consolidated financial statements have been prepared in conformity with generally accepted accounting principles. In performing these functions, the committee acts in an oversight capacity. In its oversight role, the committee relies on the work and assurances of management, which has the primary responsibility for financial statements and reports, and of Ernst & Young LLP, which in its report expresses an opinion on the conformity of our annual financial statements with generally accepted accounting principles. In reliance on these reviews and discussions and the report of the independent registered public accounting firm, the committee recommended to the Board that the audited financial statements be included in the company’s Annual Report on Form 10-K for the year ended December 31, 2022,2023, for filing with the SEC. Audit Committee: Fazal Merchant, Chairman
Alvin Bowles
William E. Haslam
Erin M. Helgren
Christine Pantoya TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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Submitting Stockholder Proposals and Nominations for 20242025 Annual Meeting If you would like to submit a proposal for inclusion in our proxy statement for the 20242025 annual meeting under SEC Rule 14a-8, your proposal must be in writing and be received by us at our principal executive offices prior to the close of business on December 6, 20235, 2024 and otherwise comply with the requirements of Rule 14a-8. If you want to bring business before the 20242025 annual meeting which is not the subject of a proposal submitted for inclusion in the proxy statement under Rule 14a-8 (excluding director nominations, which are discussed below under Nominations of Board Candidates), our Bylaws require that you deliver a notice in proper written form (and provide all information required by our Bylaws) to our Secretary by February 11, 2024,10, 2025, but not before January 12, 20249, 2025 (or, if the annual meeting is called for a date that is not within 30 days of May 11, 2024,9, 2025, the notice must be received no earlier than 5:00 p.m. central time on the 120th day prior to such annual meeting and not later than 5:00 p.m. central time on the later of the 90th day prior to such annual meeting or the 10th day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs). If the presiding officer at an annual meeting determines that business was not properly brought before the annual meeting in accordance with the procedures set forth in our Bylaws, then the presiding officer will declare to the meeting that your business was not properly brought before the meeting, and your business will not be transacted at that meeting. Nominations of Board Candidates If you wish to nominate an individual to serve as a director, our Bylaws require that you deliver timely notice of the nomination in proper written form, as provided by our Bylaws. The notice must include certain biographical information regarding the proposed nominee, a completed written questionnaire with respect to each proposed nominee setting forth the background and qualifications of such proposed nominee (which questionnaire will be provided by the Secretary upon written request), the proposed nominee’s written consent to nomination and the additional information as set forth in our Bylaws. For a stockholder’s notice to the Secretary to be timely under our Bylaws, it must be delivered to or mailed and received at our principal executive offices: (a) in the case of a nomination to be voted on at an annual meeting, by February 11, 2024,10, 2025, but not before January 12, 20249, 2025 (or, if the annual meeting is called for a date that is not within 30 days of May 11, 2024,9, 2025, the notice must be received no earlier than 5:00 p.m. central time on the 120th day prior to such annual meeting and not later than 5:00 p.m. central time on the later of the 90th day prior to such annual meeting or the 10th day following the day on which notice of the date of the annual meeting was mailed or public disclosure of the date of the annual meeting was made, whichever first occurs); and (b) in the case of a special meeting of stockholders called for the purpose of electing directors, no earlier than 5:00 p.m. central time on the 120th day prior to such special meeting and not later than 5:00 p.m. central time on the later of the 90th day prior to such special meeting or the 10th day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs. Any notice of a director nomination must also be in accordance with Rule 14a-19(b) of the Exchange Act. If the presiding officer at a meeting determines that a nomination was not properly made in accordance with the procedures set forth in our Bylaws, then the presiding officer will declare to the meeting that the nomination was defective, and the defective nomination shall be disregarded. TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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Discretionary Voting of Proxies on Other Matters We do not intend to bring any proposals to the Annual Meeting other than Proposals 1, 2, 3 and 4. As noted above, our Bylaws require stockholders to give advance notice of any proposal intended to be presented at an annual meeting. The deadline for this notice has passed, and we did not receive any such notice made in compliance with our Bylaws. If any other matter properly comes before our stockholders for a vote at the Annual Meeting, the persons named in the accompanying proxy card intend to vote the shares represented by them in accordance with their best judgment. Instructions for Attending the Annual Meeting Virtually We intend to conduct the Annual Meeting both in-person and online via live webcast. However, we may impose additional procedures or limitations on in-person meeting attendees, or we may decide to hold the meeting entirely online (i.e., a virtual-only meeting). We will announce any changes to the Annual Meeting via a press release and the filing of additional soliciting materials with the Securities and Exchange Commission, and we will also announce any changes on our proxy website, located at http:https://ir.rymanhp.com/proxyproxy-materials-1. We encourage you to check this website in advance if you plan to attend the Annual Meeting in person. To participate in the Annual Meeting virtually, visit www.virtualshareholdermeeting.com/RHP2023RHP2024 and enter the control number included on your proxy materials. You may begin to log into the meeting platform beginning at 9:45 a.m. mountaincentral time on May 11, 2023.9, 2024. The Annual Meeting will begin promptly at 10:00 a.m. mountaincentral time. The virtual meeting platform is fully supported across browsers (Internet Explorer, Chrome and Safari) and devices (including computers, tablets and cell phones) running the most updated version of applicable software. Participants should ensure that they have a reliable WiFi connection whenever they intend to participate in the Annual Meeting. Participants should allow time to log in and ensure that they can hear streaming audio prior to the start of the meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual meeting log-in page. If you wish to submit a question prior to the Annual Meeting, you may do so beginning at 9:00 a.m. eastern time on April 18, 2023,2024, until 11:59 p.m. eastern time on April 25, 2023,2024, by logging into www.proxyvote.com and entering your control number included on your proxy materials. Once past the login screen, click on “Question for Management”, type in your question and click “Submit”. In addition, www.proxyvote.com will re-open for questions beginning at 8:30 a.m. eastern time on May 8, 20236, 2024 until 11:59 p.m. eastern time on May 10, 2023.8, 2024. If you would like to submit your question during the Annual Meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/RHP2023RHP2024, type your question into the “Ask a Question” field and click “Submit”. Questions pertinent to meeting matters will be answered during the question and answer period immediately following the formal business portion of the Annual Meeting. In order to give as many shareholders as possible the opportunity to ask questions, each shareholder will be limited to one question. Questions regarding personal matters, such as employment or service-related issues, or other matters not deemed pertinent to meeting matters or otherwise suitable for discussion at the meeting (in the discretion of the presiding officer at the meeting) will not be answered. Any questions suitable for discussion at the meeting that cannot be answered during the Annual Meetingmeeting due to time constraints will be posted online and answered at http:https://ir.rymanhp.com/proxyproxy-materials-1 (and such questions (and answers) will be available as soon as practicable after the Annual Meetingmeeting and will remain available for two weeks after posting). By Order of the Board of Directors,
Scott J. Lynn, Secretary
Nashville, Tennessee
April 4, 20232024 TABLE OF CONTENTS | | 20232024 NOTICE OF MEETING AND PROXY STATEMENT
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Reconciliation of Non-GAAP Financial Measures to GAAP Measures Reconciliation of GAAP Net Income (loss) to FFO(1) Available to Common ShareholdersStockholders and Unit Holders
and Adjusted FFO Available to Common ShareholdersStockholders and Unit Holders
to Net Income (Loss)
(in thousands, except per share data) | | Net income (loss) | | | $134,948 | | | $(194,801) | | | | Noncontrolling interest in consolidated joint venture | | | (5,032) | | | 16,501 | | | | Net income (loss) available to common shareholders and unit holders | | | $129,916 | | | $(178,300) | | | | Depreciation & amortization | | | 208,494 | | | 220,211 | | | | Adjustments for noncontrolling interest | | | (3,346) | | | (11,069) | | | | Pro rata adjustments from joint ventures | | | 92 | | | 73 | | | | FFO available to common shareholders and unit holders | | | $335,156 | | | $30,915 | | | | Right-of-use asset amortization | | | 122 | | | 146 | | | | Non-cash lease expense | | | 4,831 | | | 4,375 | | | | Pension settlement charge | | | 1,894 | | | 1,379 | | | | (Gain) loss on other assets | | | 469 | | | (317) | | | | Amortization of deferred financing costs | | | 9,829 | | | 8,790 | | | | Amortization of debt discounts and premiums | | | 989 | | | (279) | | | | Loss on extinguishment of debt | | | 1,547 | | | 2,949 | | | | Adjustments for noncontrolling interest | | | (928) | | | (294) | | | | Transaction costs of acquisitions | | | 1,348 | | | 360 | | | | Deferred tax expense | | | 8,244 | | | 4,006 | | | | Adjusted FFO available to common shareholders and unit holders | | | $363,501 | | | $52,030 | | | | Capital expenditures(2) | | | (82,263) | | | (38,451) | | | | Adjusted FFO available to common shareholders and unit holders (ex. maintenance capital) | | | $281,238 | | | $13,579 | | | | Basic net income (loss) per share | | | $2.34 | | | $(3.21) | | | | Diluted net income (loss) per share | | | $2.33 | | | $(3.21) | | | | FFO available to common shareholders and unit holders per basic share/unit | | | $6.04 | | | $0.56 | | | | Adjusted FFO available to common shareholders and unit holders per basic share/unit | | | $6.55 | | | $0.94 | | | | FFO available to common shareholders and unit holders per diluted share/unit | | | $6.01 | | | $0.56 | | | | Adjusted FFO available to common shareholders and unit holders per diluted share/unit | | | $6.52 | | | $0.94 | |
| | Net income (loss)(2) | | | $341,800 | | | $134,948 | | | $(194,801) | | | $(460,821) | | | | Noncontrolling interest in consolidated joint venture | | | (28,465) | | | (5,032) | | | 16,501 | | | 42,474 | | | | Net income (loss) available to common stockholders and unit holders | | | $313,335 | | | $129,916 | | | $(178,300) | | | $(418,347) | | | | Depreciation & amortization | | | 211,064 | | | 208,494 | | | 220,211 | | | 214,933 | | | | Adjustments for noncontrolling interest | | | (7,083) | | | (3,346) | | | (11,069) | | | (33,213) | | | | Pro rata adjustments from joint ventures | | | 73 | | | 92 | | | 73 | | | 50 | | | | FFO available to common stockholders and unit holders | | | $517,389 | | | $335,156 | | | $30,915 | | | $(236,577) | | | | Right-of-use asset amortization | | | 163 | | | 122 | | | 146 | | | 149 | | | | Non-cash lease expense | | | 5,710 | | | 4,831 | | | 4,375 | | | 4,474 | | | | Pension settlement charge | | | 1,313 | | | 1,894 | | | 1,379 | | | 1,740 | | | | Credit loss on held to maturity securities | | | — | | | — | | | — | | | 32,784 | | | | Pro rata adjustments from joint ventures(3) | | | 10,508 | | | — | | | — | | | — | | | | (Gain) Loss on other assets | | | — | | | 469 | | | (317) | | | (1,161) | | | | Write-off of deferred financing costs | | | — | | | — | | | — | | | 281 | | | | Amortization of deferred financing costs | | | 10,663 | | | 9,829 | | | 8,790 | | | 7,948 | | | | Amortization of debt discounts and premiums | | | 2,325 | | | 989 | | | (279) | | | (267) | | | | Loss on extinguishment of debt | | | 2,252 | | | 1,547 | | | 2,949 | | | — | | | | Adjustments for noncontrolling interest | | | 18,635 | | | (928) | | | (294) | | | (932) | | | | Transaction costs of acquisitions | | | — | | | 1,348 | | | 360 | | | 15,437 | | | | Deferred tax provision (benefit)(2) | | | (95,825) | | | 8,244 | | | 4,006 | | | 26,526 | | | | Adjusted FFO available to common stockholders and unit holders | | | $473,133 | | | $363,501 | | | $52,030 | | | $(149,598) | | | | Capital expenditures(4) | | | (128,011) | | | (82,263) | | | (38,451) | | | (17,341) | | | | Adjusted FFO available to common stockholders and unit holders (ex. maintenance capital) | | | $345,122 | | | $281,238 | | | $13,579 | | | $(166,939) | | | | Basic net income (loss) per share | | | $5.39 | | | $2.34 | | | $(3.21) | | | $(7.59) | | | | Diluted net income (loss) per share | | | $5.36 | | | $2.33 | | | $(3.21) | | | $(7.59) | | | | FFO available to common stockholders and unit holders per basic share/unit | | | $8.90 | | | $6.04 | | | $0.56 | | | $(4.29) | | | | Adjusted FFO available to common stockholders and unit holders per basic share/unit | | | $8.14 | | | $6.55 | | | $0.94 | | | $(2.71) | | | | FFO available to common stockholders and unit holders per diluted share/unit(5) | | | $8.85 | | | $6.01 | | | $0.56 | | | $(4.29) | | | | Adjusted FFO available to common stockholders and unit holders per diluted share/unit(5) | | | $8.09 | | | $6.52 | | | $0.94 | | | $(2.71) | | | | Weighted average common shares and OP units for the period | | | | | | | | | | | | | | | | Basic | | | 58,145 | | | 55,535 | | | 55,454 | | | 55,108 | | | | Diluted | | | 58,456 | | | 55,772 | | | 55,454 | | | 55,108 | |
(1)
| We calculate FFO, which definition is clarified by the National Association of Real Estate Investment Trusts (“NAREIT”)NAREIT in its December 2018 white paper as net income (loss) (calculated in accordance with GAAP) excluding depreciation and amortization (excluding amortization of deferred financing costs and debt discounts), gains and losses from the sale of certain real estate assets, gains and losses from a change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciated real estate held by the entity, income (loss) from consolidated joint ventures attributable to noncontrolling interest, and pro rata adjustments for unconsolidated joint ventures. To calculate Adjusted FFO available to common shareholdersstockholders and unit holders, we then exclude, to the extent the following adjustments occurred during the periods presented: |
right-of-use asset amortization; impairment charges that do not meet the NAREIT definition above; write-offs of deferred financing costs; TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
amortization of debt discounts or premiums and amortization of deferred financing costs; (gains) lossesloss on extinguishment of debt;
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non-cash lease expense; credit loss on held-to-maturity securities; pension settlement charges; additional pro rata adjustments from unconsolidated joint ventures; (gains) losses on other assets; transaction costs of acquisitions; deferred income tax expense (benefit); and any other adjustments we have identified herein. To calculate adjustedAdjusted FFO available to common shareholdersstockholders and unit holders (excluding maintenance capex), we then exclude FF&E reserve contributions for managed properties and maintenance capital expenditures for non-managed properties. FFO available to common shareholdersstockholders and unit holders, Adjusted FFO available to common shareholdersstockholders and unit holders and Adjusted FFO available to common shareholdersstockholders and unit holders (excluding maintenance capex) exclude the ownership portion of joint ventures not controlled or owned by the Company. We present Adjusted FFO available to common stockholders and unit holders per diluted share as a non-GAAP measure of our performance in addition to our net income available to common stockholders per diluted share (calculated in accordance with GAAP). We calculate Adjusted FFO available to common stockholders and unit holders per diluted share as our Adjusted FFO (defined as set forth above) for a given operating period, as adjusted for the effect of dilutive securities, divided by the number of diluted shares and units outstanding during such period. We believe that the presentation of these non-GAAP financial measures provides useful information to investors regarding the performance of our ongoing operations because each presents a measure of our operations without regard to specified non-cash items such as real estate depreciation and amortization, gain or loss on sale of assets and certain other items, which we believe are not indicative of the performance of our underlying hotel properties. We believe that these items are more representative of our asset base than our ongoing operations. We also use these non-GAAP financial measures as measures in determining our results after taking into accountconsidering the impact of our capital structure. (2)
| Represents furniture, fixtures and equipment reserve for managed properties and maintenance capital expenditures for non-managed properties. Note that during 2021, as a result of the COVID-19 pandemic, contributions to the FF&E reserve for managed properties were suspended, although we did make voluntary contributions to fund the rooms renovation at Gaylord National. |
We caution investors that non-GAAP financial measures we present may not be comparable to similar measures disclosed by other companies, because not all companies calculate these non-GAAP measures in the same manner. The non-GAAP financial measures we present, and any related per share measures, should not be considered as alternative measures of our Net Income, (Loss), operating performance, cash flow or liquidity. These non-GAAP financial measures may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expenditures and property acquisitions and other commitments and uncertainties. Although we believe that these non-GAAP financial measures can enhance an investor’s understanding of our results of operations, these non-GAAP financial measures, when viewed individually, are not necessarily better indicators of any trend as compared to GAAP measures such as Net Income (Loss), Operating Income (Loss), or cash flow from operations. (2)
| The Company recorded a $112.5 million deferred tax benefit in the fourth quarter of 2023 for the release of income tax valuation allowance. |
(3)
| In September 2023, we determined to pivot from television network ownership in favor of a distribution approach. Therefore we and our joint venture partner agreed to wind down the Circle joint venture, with operations ceasing December 31, 2023. As a result, we incurred a loss related to Circle of approximately $10.5 million in the twelve months ended December 31, 2023. |
(4)
| Represents furniture, fixtures and equipment reserve for managed properties and maintenance capital expenditures for non-managed properties. |
(5)
| Diluted weighted average common shares for the twelve months ended December 31, 2022 includes 3.9 million in equivalent shares related to the currently unexercisable investor put rights associated with the noncontrolling interest in the Company’s OEG business, which may be settled in cash or shares at the Company’s option. |
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Reconciliation of Net Income to Consolidated Adjusted EBITDAre(1) to Net Income (Loss)
(in thousands) | | Consolidated
| | | $ | | | Margin | | | $ | | | Margin | | | | Revenue | | | $1,805,969 | | | | | | $939,373 | | | | | | | Net income (loss) | | | $134,948 | | | 7.5% | | | $(194,801) | | | (20.7)% | | | | Interest expense, net | | | 142,656 | | | | | | 119,662 | | | | | | | Provision for income taxes | | | 38,775 | | | | | | 4,957 | | | | | | | Depreciation and amortization | | | 208,616 | | | | | | 220,357 | | | | | | | (Gain) loss on sale of assets | | | 327 | | | | | | (315) | | | | | | | Pro rata EBITDAre from unconsolidated joint ventures | | | 89 | | | | | | 73 | | | | | | | EBITDAre | | | 525,411 | | | 29.1% | | | 149.933 | | | 16.0% | | | | Preopening costs | | | 532 | | | | | | 737 | | | | | | | Non-cash lease expense | | | 4,831 | | | | | | 4,375 | | | | | | | Equity-based compensation expense | | | 14,985 | | | | | | 12,104 | | | | | | | Pension settlement charge | | | 1,894 | | | | | | 1,379 | | | | | | | Interest income on Gaylord National bonds | | | 5,306 | | | | | | 5,502 | | | | | | | Loss on extinguishment of debt | | | 1,547 | | | | | | 2,949 | | | | | | | Transaction costs of acquisitions | | | 1,348 | | | | | | 360 | | | | | | | Adjusted EBITDAre | | | $555,854 | | | 30.8% | | | $177,339 | | | 18.9% | | | | Adjusted EBITDAre of noncontrolling interest in consolidated joint venture | | | (15,309) | | | | | | 1,017 | | | | | | | Consolidated Adjusted EBITDAre, excluding noncontrolling interest in consolidated joint venture | | | $540,545 | | | 29.9% | | | $178,356 | | | 19.0% | |
| | Consolidated
| | | $ | | | Margin | | | $ | | | Margin | | | | Revenue | | | $2,158,136 | | | | | | $1,805,969 | | | | | | | Net income | | | $341,800 | | | 15.8% | | | $134,948 | | | 7.5% | | | | Interest expense, net | | | 189,947 | | | | | | 142,656 | | | | | | | Provision (benefit) for income taxes(2) | | | (93,702) | | | | | | 38,775 | | | | | | | Depreciation and amortization | | | 211,227 | | | | | | 208,616 | | | | | | | Loss on sale of assets | | | — | | | | | | 327 | | | | | | | Pro rata EBITDAre from unconsolidated joint ventures | | | 25 | | | | | | 89 | | | | | | | EBITDAre | | | 649,297 | | | 30.1% | | | 525,411 | | | 29.1% | | | | Preopening costs | | | 1,308 | | | | | | 532 | | | | | | | Non-cash lease expense | | | 5,710 | | | | | | 4,831 | | | | | | | Equity-based compensation expense | | | 15,421 | | | | | | 14,985 | | | | | | | Pension settlement charge | | | 1,313 | | | | | | 1,894 | | | | | | | Interest income on Gaylord National bonds | | | 4,936 | | | | | | 5,306 | | | | | | | Loss on extinguishment of debt | | | 2,252 | | | | | | 1,547 | | | | | | | Transaction costs of acquisitions | | | — | | | | | | 1,348 | | | | | | | Pro rata adjusted EBITDAre from unconsolidated joint ventures(3) | | | 10,508 | | | | | | — | | | | | | | Adjusted EBITDAre | | | $690,745 | | | 32.0% | | | $555,854 | | | 30.8% | | | | Adjusted EBITDAre of noncontrolling interest in consolidated joint venture | | | (29,884) | | | | | | (15,309) | | | | | | | Consolidated Adjusted EBITDAre, excluding noncontrolling interest in consolidated joint venture | | | $660,861 | | | 30.6% | | | $540,545 | | | 29.9% | |
(1)
| We calculate EBITDAre, which is defined by NAREIT in its September 2017 white paper as net incomeNet Income (calculated in accordance with GAAP) plus interest expense, income tax expense, depreciation and amortization, gains or losses on the disposition of depreciated property (including gains or losses on change in control), impairment write-downs of depreciated property and of investments in unconsolidated affiliates caused by a decrease in the value of depreciated property orof the affiliate, and adjustments to reflect the entity’s share of EBITDAre of unconsolidated affiliates. Adjusted EBITDAre is then calculated as EBITDAre, plus, to the extent the following adjustments occurred during the periods presented: |
preopening costs; non-cash lease expense; equity-based compensation expense; impairment charges that do not meet the NAREIT definition above; credit losses on held-to-maturity securities; any transaction costs of acquisitions;
interest income on bonds; loss on extinguishment of debt; pension settlement charges; | • | pro rata Adjusted EBITDAre from unconsolidated joint ventures; and |
any other adjustments we have identified herein. We then exclude the pro rata share of Adjusted EBITDAre related to noncontrolling interests in consolidated joint ventures to calculate Adjusted EBITDAre, excluding noncontrolling interestExcluding Noncontrolling Interest in consolidated joint venture.Consolidated Joint Venture. We use EBITDAre, Adjusted EBITDAre and Adjusted EBITDAre, excluding noncontrolling interestExcluding Noncontrolling Interest in consolidated joint ventureConsolidated Joint Venture to evaluate our operating performance. We believe that the presentation of these non-GAAP financial measures provides useful information to investors regarding our operating performance and debt leverage metrics, and that the presentation of these non-GAAP financial measures, when combined with the primary GAAP presentation of net income,Net Income, is beneficial to an investor’s complete understanding of our operating performance. We make additional adjustments to EBITDAre when evaluating our performance because we believe that presenting Adjusted EBITDAre and Adjusted EBITDAre, excluding noncontrolling interestExcluding Noncontrolling Interest in consolidated joint ventureConsolidated Joint Venture. e provides useful information to investors regarding our operating performance and debt leverage metrics. We cautioncalculate consolidated Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture Margin by dividing consolidated Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture by GAAP consolidated Total Revenue. We calculate consolidated Adjusted EBITDAre Margin by dividing Consolidated Adjusted EBITDAre by consolidated GAAP Revenue. We believe Adjusted EBITDAre, Excluding Noncontrolling Interest in Consolidated Joint Venture Margin is useful to investors thatin evaluating our operating performance because this non-GAAP financial measures we present may not be comparable to similar measures disclosed by other companies, because not all companies calculate these non-GAAP measures inmeasure helps investors evaluate and compare the same manner. The non-GAAP financial measures we present, and any related per share measures, should not be considered as alternative measuresresults of our Net Income (Loss)operations from period to period by presenting a ratio showing the quantitative relationship between Adjusted EBITDAre, operating performance, cash flow or liquidity. These non-GAAP financial measures may include funds that may not be available for our discretionary use due to functional requirements to conserve funds for capital expendituresExcluding Noncontrolling Interest in Consolidated Joint Venture and property acquisitions and other commitments and uncertainties. Although we believe that these non-GAAP financial measures can enhance an investor’s understanding of our results of operations, these non-GAAP financial measures, when viewed individually, are not necessarily better indicators of any trend as compared to GAAP measures such as Net Income (Loss), Operating Income (Loss), or cash flow from operations.consolidated Total Revenue. (2)
| The Company recorded a $112.5 million deferred tax benefit in the fourth quarter of 2023 for the release of income tax valuation allowance. |
(3)
| In September 2023, we determined to pivot from television network ownership in favor of a distribution approach. Therefore we and our joint venture partner agreed to wind down the Circle joint venture, with operations ceasing December 31, 2023. As a result, we incurred a loss related to Circle of approximately $10.5 million in the twelve months ended December 31, 2023. |
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2024 Omnibus Incentive Plan RYMAN HOSPITALITY PROPERTIES, INC.
2024 OMNIBUS INCENTIVE PLAN Section 1. Purpose. This plan shall be known as the Ryman Hospitality Properties, Inc. 2024 Omnibus Incentive Plan (the “Plan”). The purpose of the Plan is to promote the interests of Ryman Hospitality Properties, Inc., a Delaware corporation (together with its Subsidiaries, the “Company”) and its stockholders by (i) attracting and retaining key officers, employees, and directors of, and consultants to, the Company and its Subsidiaries and Affiliates; (ii) motivating such individuals by means of performance-related incentives to achieve long-range performance goals; (iii) enabling such individuals to participate in the long-term growth and financial success of the Company; (iv) encouraging ownership of stock in the Company by such individuals; and (v) linking their compensation to the long-term interests of the Company and its stockholders. Section 2. Definitions. As used in the Plan, the following terms shall have the meanings set forth below: (a) “Affiliate” means (i) any entity that, directly or indirectly, is controlled by the Company, (ii) any entity in which the Company has a significant equity interest, (iii) an affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12 of the Exchange Act, and (iv) any entity in which the Company has at least fifty percent (50%) of the combined voting power of the entity’s outstanding voting securities, in each case as designated by the Board as being a participating employer in the Plan. (b) “Award” means any Option, Stock Appreciation Right, Restricted Share Award, Restricted Stock Unit, Performance Award, Other Stock-Based Award or other award granted under the Plan, whether singly, in combination or in tandem, to a Participant by the Committee (or the Board) pursuant to such terms, conditions, restrictions and/or limitations, if any, as the Committee (or the Board) may establish or which are required by applicable legal requirements. (c) “Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award, which may, but need not, be executed or acknowledged by a Participant. (d) “Beneficial Owner” (and correlative terms “Beneficial Ownership” and “Beneficially Owned”) has the meaning set forth in Rule 13d-3 promulgated under the Exchange Act. (e) “Board” means the Board of Directors (or other equivalent governing body) of the Company as constituted from time to time. TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
(f) “Business Combination” means a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company that requires the approval of the Company’s stockholders, whether for such transaction or the issuance of securities in the transaction. (g) “Cause” means, unless otherwise defined in the applicable Award Agreement or in an employment or service agreement to which the Participant and the Company are parties, (i) the engaging by the Participant in willful misconduct that is injurious to the Company or its Subsidiaries or Affiliates, or (ii) the embezzlement or misappropriation of funds or property of the Company or its Subsidiaries or Affiliates by the Participant. For purposes of this definition, no act, or failure to act, on the Participant’s part shall be considered “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of the Company. The Committee, in its sole discretion, shall make all determinations relating to whether a Participant has been discharged for Cause, and any such determination shall be final and binding on a Participant. (h) “Change in Control” means any of the following events: (i) an acquisition (other than directly from the Company) of any Voting Securities by any “Person” (as the term Person is used for purposes of Section 13(d) or 14(d) of the Exchange Act immediately after which such Person has Beneficial Ownership of thirty-five percent (35%) or more of the combined voting power of the then outstanding Voting Securities; provided, however, that in determining whether a Change in Control has occurred, Voting Securities which are acquired in a Non-Control Acquisition shall not constitute an acquisition which would cause a Change in Control; (ii) during any period of twelve (12) consecutive months, a majority of the Board ceases to be composed of individuals (A) who were Directors on the first day of such period, (B) whose election or nomination as a Director was approved by individuals referred to in clause (A) above constituting at the time of such election or nomination at least a majority of the Directors then serving, or (C) whose election or nomination to the Board was approved by individuals referred to in clauses (A) and (B) above constituting at the time of such election or nomination at least a majority of the Board; or (iii) the consummation of: (A) a Business Combination, unless, (1) the stockholders of the Company, immediately before such Business Combination, own, directly or indirectly immediately following such Business Combination, more than fifty percent (50%) of the combined voting power of the outstanding Voting Securities of the Surviving Entity in substantially the same proportion as their ownership of the Voting Securities immediately before such Business Combination; TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
(2) the Directors who were serving on the Board immediately prior to the execution of the definitive agreement providing for such Business Combination constitute more than fifty percent (50%) of the members of the board of directors of the Surviving Entity; and (3) No Person (other than the Company, any Subsidiary, any employee benefit plan (or any trust forming a part thereof) maintained by the Company, the Surviving Entity or any subsidiary of the Surviving Entity, or any Person who, immediately prior to such Business Combination had Beneficial Ownership of thirty-five percent (35%) or more of the then outstanding Voting Securities unless, as a result of such Business Combination, such Person acquired or would acquire additional voting securities of the Surviving Entity representing additional voting power) has Beneficial Ownership of thirty-five percent (35%) or more of the combined voting power of the Surviving Entity’s then outstanding Voting Securities. (B) a complete liquidation or dissolution of the Company; or (C) a sale of all or substantially all of the assets of the Company to any Person (other than to a Subsidiary). Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increased the proportional number of shares Beneficially Owned by such Person, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such acquisition, that Person becomes the Beneficial Owner of any additional Voting Securities Beneficially Owned by such Person, then a Change in Control shall occur. Unless otherwise provided in an applicable Award Agreement, solely for the purpose of determining the timing of any payments pursuant to any Award constituting a “deferral of compensation” subject to Section 409A of the Code, a Change in Control shall be limited to a “change in the ownership of the Company,” a “change in the effective control of the Company,” or a “change in the ownership of a substantial portion of the assets of the Company” as such terms are defined in Section 1.409A-3(i)(5) of the Regulations. (i) “Clawback Policy” has the meaning set forth in Section 14.4. (j) “Code” means the Internal Revenue Code of 1986, as amended from time to time. (k) “Committee” means a committee of the Board composed of not less than two Non-Employee Directors, each of whom shall be (i) a “non-employee director” for purposes of Section 16 of the Exchange Act and Rule 16b-3 thereunder, and (ii) “independent” within the meaning of the listing standards of the New York Stock Exchange. TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
(l) “Consultant” means any individual or entity which performs bona fide services to the Company or an Affiliate, other than as an Employee or Director, and who may be offered securities registerable pursuant to a registration statement on Form S-8 under the Securities Act. (m) “Data” has the meaning set forth in Section 15.17. (n) “Director” means a member of the Board. (o) “Disability” means, unless otherwise defined in the applicable Award Agreement, that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. The Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates. (p) “Dividend Equivalents” has the meaning set forth in Section 15.2. (q) “Effective Date” has the meaning set forth in Section 16.1. (r) “Employee” means a current or prospective officer or other person employed by the Company or an Affiliate. (s) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. (t) “Exercise Price” means the price at which a Share may be purchased upon the exercise of an Option or the price by which the value of a Stock Appreciation Right shall be determined upon exercise. (u) “Fair Market Value” means, with respect to a Share as of any date, (i) the closing sales price of the Shares on the New York Stock Exchange (or such other stock exchange or national market system on which the Shares are traded) on such date, or in the absence of reported sales on such date, the closing price on the immediately preceding date on which sales were reported (or in either case, such other price based on actual trading on the applicable date that the Committee determines is appropriate), (ii) in the absence of an established market for the Shares on such date, the fair market value as determined, in good faith, by the Committee in its sole discretion, and (iii) for purposes of a sale of such Share on such date, the actual sales price for such Share. (v) “Incentive Stock Option” means an Option that is designated by the Committee as an incentive stock option within the meaning of Section 422 of the Code and that meets the requirements set out in the Plan. (w) “Non-Control Acquisition” means an acquisition of Voting Securities by (i) an employee benefit plan (or a trust forming a part thereof) maintained by the Company or any Subsidiary, or (ii) the Company or any Subsidiary. TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
(x) “Non-Employee Director” means a member of the Board who is not an officer or Employee of the Company or any Affiliate. (y) “Non-Qualified Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option. (z) “Option” means an Incentive Stock Option or a Non-Qualified Stock Option granted pursuant to the Plan. (aa) “Other Stock-Based Award” means an Award that is not an Option, Stock Appreciation Right, Restricted Share Award, Restricted Stock Unit, or Performance Award that is described in Section 9 and is payable by the delivery of Shares and/or which is measured by reference to the value of a Share. (bb) “Participant” means any Employee, Director, Consultant or other eligible person who receives or, if applicable, holds an Award under the Plan. (cc) “Performance Award” means an Award described in Section 8 of the Plan. (dd) “Person” means any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof or other entity. (ee) “Prior Plan” means the Company’s 2016 Omnibus Incentive Plan, as amended. (ff) “Regulations” means regulations promulgated by the U.S. Treasury Department under the Code. (gg) “Restricted Period” has the meaning set forth in Section 7.1(b). (hh) “Restricted Share” means an Award of actual Shares described in Section 7 of the Plan. (ii) “Restricted Stock Unit” means an Award of hypothetical Share units described in Section 7 of the Plan. (jj) “Retirement” means, unless otherwise defined in the applicable Award Agreement, retirement of a Participant from the employ or other service of the Company or any of its Affiliates in accordance with the terms of the applicable Company retirement plan or, if a Participant is not covered by any such plan, the Participant’s voluntary termination of employment on or after such Participant’s 65th birthday. (kk) “SEC” means the Securities and Exchange Commission or any successor thereto. (ll) “Section 16” means Section 16 of the Exchange Act and the rules promulgated thereunder and any successor provision thereto as in effect from time to time. (mm) “Securities Act” means the Securities Act of 1933, as amended from time to time. TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
(nn) “Share” means a share of the common stock, $0.01 par value per share, of the Company. (oo) “Share Reserve” has the meaning set forth in Section 4.1. (pp) “Stock Appreciation Right” or “SAR” means an Award described in Section 6 of the Plan that entitles the holder to receive, with respect to each Share subject to the exercised portion of the SAR, an amount equal to the excess of the Fair Market Value of the Share on the date of exercise over the Fair Market Value of the Share on the date of grant (or such other amount as set forth in the Award Agreement). (qq) “Subsidiary” means any Person (other than the Company) of which a majority of its voting power or its equity securities or equity interests are owned directly or indirectly by the Company. (rr) “Substitute Award” means an Award granted solely in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines. (ss) “Surviving Entity” means the entity resulting from a Business Combination, or if applicable, the ultimate parent entity that directly or indirectly has Beneficial Ownership of sufficient voting securities eligible to elect a majority of the members of the board of directors (or the analogous governing body) of the entity resulting from a Business Combination. (tt) “Vesting Period” means the period of time specified by the Committee during which vesting restrictions for an Award are applicable. (uu) “Voting Securities” means the Shares and any other outstanding securities of the Company the holders of which are entitled to vote generally in the election of Directors. Section 3. Administration. 3.1 Authority of Committee. The Plan shall be administered by the Committee, which shall be appointed by and serve at the pleasure of the Board; provided, however, with respect to Awards to Non-Employee Directors, all references in the Plan to the Committee shall be deemed to be references to the Board. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority in its discretion to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights or other matters are to be calculated in connection with Awards; (iv) determine the timing, terms, and conditions of any Award; (v) accelerate the time at which all or any part of an Award may be settled or exercised; (vi) determine whether, to what extent, and under what circumstances Awards may be settled or exercised in cash, Shares, other securities, other Awards or other property, or may be canceled, forfeited or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited or TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
suspended; (vii) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the holder thereof or of the Committee; (viii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (ix) except to the extent prohibited by Section 6.2 or any other provision of the Plan, amend or modify the terms of any Award at or after grant with or without the consent of the holder of the Award; (x) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan, subject to the exclusive authority of the Board under Section 14 hereunder to amend or terminate the Plan. 3.2 Committee Discretion Binding. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company or any Affiliate, any Participant and any holder or beneficiary of any Award. 3.3 Action by the Committee. The exercise of an Option or receipt of an Award shall be effective only if an Award Agreement shall have been duly executed and delivered on behalf of the Company following the grant of the Option or other Award by the Committee unless expressly waived by the Committee. Subject to the charter of the Committee and applicable legal requirements (including the rules and regulations of the New York Stock Exchange), the Committee may make such rules and regulations for the conduct of its business as it shall deem advisable. 3.4 Delegation. Subject to the terms of the Plan and applicable law, the Committee may delegate to one or more officers or managers of the Company or of any Subsidiary or Affiliate, or to a Committee of such officers or managers, the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to or to cancel, modify or waive rights with respect to, or to alter, discontinue, suspend or terminate Awards held by Participants who are not officers or directors of the Company for purposes of Section 16 or who are otherwise not subject to such provision of law. Section 4. Shares Available for Awards. 4.1 Shares Available. Subject to the remaining provisions of this Section 4.1 and Section 4.2 hereof, the maximum number of Shares with respect to which Awards may be granted under the Plan (the “Share Reserve”) shall be the sum of (1) 364,262 which is the number of Shares available for issuance under the Prior Plan as of March 22, 2024, plus (2) 1,500,000 newly authorized Shares, minus (3) the number of Shares subject to Awards that are granted pursuant to the Prior Plan after March 22, 2024. The number of Shares with respect to which Incentive Stock Options may be granted shall be no more than 1,000,000. No further awards shall be granted under the Prior Plan following the Effective Date of this TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
Plan, and outstanding awards under the Prior Plan and all other prior incentive plans of the Company will continue to be governed by the incentive plans and agreements under which they were granted. The Share Reserve shall be adjusted from time to time in accordance with the following: (a) Any Shares granted in connection with any Award shall reduce the Share Reserve by one (1) Share for every one (1) Share granted in connection with the Award. (b) The Share Reserve shall be increased by (i) the number of Shares with respect to which awards were granted under the Prior Plan as of the Effective Date of this Plan, but which thereafter terminate, expire unexercised or are settled for cash, forfeited or canceled without the delivery of Shares under the terms of the Prior Plan, and (ii) the number of Shares subject to Awards granted under this Plan, but which thereafter terminate, expire unexercised or are settled for cash, forfeited or canceled without the delivery of Shares under the terms of the Plan. (c) Notwithstanding the foregoing, the following Shares underlying any Award under the Prior Plan or the Plan will not again become available for Awards under the Plan: (1) Shares tendered or withheld in payment of the Exercise Price of an Option, (2) Shares tendered or withheld to satisfy any tax withholding obligation with respect to any Award, (3) Shares repurchased by the Company with proceeds received from the exercise of an Option, and (4) Shares subject to an SAR that are not issued in connection with the Share settlement of that SAR upon its exercise. 4.2 Adjustments. In the event of changes in the outstanding Shares or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the capitalization of the Company, then the Committee shall in an equitable and proportionate manner (and, as applicable, consistent with Sections 409A and 422 of the Code and the Regulations thereunder) either: (i) adjust any or all of (1) the aggregate number of Shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan; (2) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards under the Plan, provided that the number of Shares subject to any Award shall always be a whole number; (3) the Exercise Price with respect to any Award under the Plan; and (4) the limits on the number of Shares or Awards that may be granted to Participants under the Plan in any calendar year; (ii) provide for an equivalent Award in respect of securities of the surviving entity of any merger, consolidation or other transaction or event having a similar effect; or (iii) make provision for a cash payment to the holder of an outstanding Award, in each case to the extent necessary to preserve the economic intent of such Award. TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
4.3 Substitute Awards. Substitute Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding awards previously granted by an entity acquired by the Company or with which the Company combines. To the extent permitted by Section 303A.08 of the NYSE Listed Company Manual (or any successor provision thereof), (a) Substitute Awards shall not be counted against the Share Reserve, and (b) available shares under a shareholder-approved plan of an entity directly or indirectly acquired by the Company or with which the Company combines (as appropriately adjusted to reflect such acquisition or transaction) may be used for Awards under the Plan and shall not count toward the Share Reserve. 4.4 Sources of Shares. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of issued Shares which have been reacquired by the Company. Section 5. Eligibility. Any Employee, Director or Consultant shall be eligible to be designated a Participant; provided, however, that Non-Employee Directors shall only be eligible to receive Awards granted consistent with Section 10. Section 6. Stock Options and Stock Appreciation Rights. 6.1 Grant. Subject to other applicable provisions of the Plan and other applicable legal requirements, the Committee shall have sole and complete authority to determine the Participants to whom an Award of Options or SARs shall be granted, the number of Shares subject to each Award, the Exercise Price of such Award, and the conditions and limitations applicable to the exercise of each Option and SAR. An Option may be granted with or without a related SAR. An SAR may be granted with or without a related Option. The grant of an Option or SAR shall occur when the Committee by resolution, written consent or other appropriate action determines to grant such Option or SAR for a particular number of Shares to a particular Participant at a particular Exercise Price. Each Option shall be designated as an Incentive Stock Option or a Non-Qualified Stock Option at the time of grant. The terms and conditions of a grant of an Incentive Stock Option shall be subject to and comply with Section 422 of the Code and the Regulations thereunder. 6.2 Price. The Committee shall establish the Exercise Price of an Option or SAR at the time such Award is granted. Except in the case of Substitute Awards, the Exercise Price of an Option or SAR may not be less than the Fair Market Value of the Shares with respect to which the Option or SAR is granted on the date of grant. Notwithstanding the foregoing and except as permitted by the provisions of Section 4.2 hereof, the Committee shall not have the power to (i) amend the terms of previously granted Options or SARs to reduce the Exercise Price thereof; (ii) cancel any Options or SARs in exchange for a cash payment, a grant of substitute Options or SARs with a lower Exercise Price than the canceled Award, or any other Award; (iii) take any other action with respect to an Option or SAR that would be treated as a TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
repricing under the rules and regulations of the New York Stock Exchange or such other principal securities exchange or national market on which the Shares are traded, in each case without the approval of the Company’s shareholders. 6.3 Term. Subject to the Committee’s authority under Section 3.1 and the provisions of Section 6.5, an Award of Options or SARs shall expire on the date determined by the Committee and specified in the Award Agreement. The Committee shall be under no duty to provide terms of like duration for Options or SARs granted under the Plan. Notwithstanding the foregoing and except as provided in Section 6.4(a) hereof, no Option or SAR shall be exercisable after the expiration of ten (10) years from the date such Option or SAR was granted. 6.4 Exercise. (a) Each Option and SAR shall be exercisable at such times and subject to such terms and conditions as the Committee may specify in the applicable Award Agreement or thereafter. The Committee shall have full and complete authority to determine, subject to Section 6.5 herein, whether an Option or SAR will be exercisable in full at any time or from time to time during the term of the Option or SAR, or to provide for the exercise thereof in such installments, upon the occurrence of such events, and at such times during the term of the Option or SAR as the Committee may determine. The Committee may provide, at or after grant, that the period of time over which an Option, other than an Incentive Stock Option, or SAR may be exercised shall be automatically extended if on the scheduled expiration of such Award, the Participant’s exercise of such Award would violate applicable securities law; provided, that during the extended exercise period the Option or SAR may only be exercised to the extent such Award was exercisable in accordance with its terms immediately prior to such scheduled expiration date; provided further, that such extended exercise period shall end not later than thirty (30) days after the exercise of such Option or SAR first would no longer violate such laws. (b) The Committee may impose such conditions with respect to the exercise of Options or SARs, including without limitation, any relating to the application of U.S. federal, state or non-U.S. securities laws or the Code, as it may deem necessary or advisable. (c) An Option or SAR may be exercised in whole or in part at any time, with respect to whole Shares only, within the period permitted thereunder for the exercise thereof, and shall be exercised by written notice of intent to exercise the Option or SAR, delivered to the Company at its principal office, and payment in full to the Company at the direction of the Committee of the amount of the aggregate Exercise Price for the number of Shares with respect to which the Option is then being exercised. (d) The Exercise Price of Shares acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash or cash equivalents, (ii) at the discretion of the Committee, upon such terms as the Committee shall approve, (A) by transfer, either actually or by attestation, to the Company of unencumbered Shares previously acquired by the Participant having a Fair Market Value TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
equal to the Exercise Price of such Shares at the time of exercise, together with any applicable withholding taxes, (B) by delivering a notice of exercise of the Option and simultaneously selling the Shares thereby acquired, pursuant to a brokerage or similar agreement approved in advance by proper officers of the Company, using the proceeds of such sale as payment of the Exercise Price, together with any applicable withholding taxes, (C) withholding Shares otherwise deliverable to the Participant pursuant to the exercise of the Option having a Fair Market Value equal to the total Exercise Price at the time of exercise, together with any applicable withholding taxes, or (iii) by a combination of the methods set forth in (i) and (ii). Until a Participant has been issued the Shares subject to an exercise of an Option or SAR, the Participant shall possess no rights as a stockholder with respect to such Shares. (e) At the Committee’s discretion, the Company may settle the exercise of an SAR by remitting cash, Shares or a combination of cash and Shares to the Participant. 6.5 Ten Percent Shareholders. A Person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any of its Affiliates shall not be granted an Incentive Stock Option unless the Exercise Price is at least 110% of the Fair Market Value of a Share on the date of the grant and the Option is not exercisable after the expiration of five years from the date of grant. 6.6 Minimum Vesting Period. Except for Substitute Awards, or in connection with a Change in Control or the death or Disability of the Participant, Awards of Options or SARs shall have a Vesting Period of not less than one (1) year from the date of grant; provided, that the Committee has the discretion to waive this requirement with respect to an Award at or after grant, so long as the total number of Shares that are issued pursuant to Awards having an originally stated Vesting Period of less than one year from the date of grant (inclusive of any performance periods related thereto) shall not exceed 5% of the Share Reserve. Section 7. Restricted Shares and Restricted Stock Units. 7.1 General. (a) Subject to other applicable provisions of the Plan and other applicable legal requirements, the Committee shall have sole and complete authority to determine the Participants to whom an Award of Restricted Shares or Restricted Stock Units shall be granted and the terms and conditions thereof. Each Award of Restricted Shares or Restricted Stock Units shall be evidenced by an Award Agreement in such form as the Committee shall from time to time approve. (b) Each Award of Restricted Shares or Restricted Stock Units shall be for such number of Shares determined by the Committee and set forth in the applicable Award Agreement. Each Award Agreement shall set forth a period of time during which the Participant must remain in the continuous employment (or other service-providing capacity) of the Company, or such other conditions that must be met, in order for any forfeiture and transfer restrictions to lapse (the “Restricted Period”). If the Committee so TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
determines or the Award Agreement so provides, the restrictions may lapse during the Restricted Period in installments with respect to specified portions of the Shares covered by the Award. The Award Agreement may also set forth performance or other conditions that will subject the Shares to forfeiture and transfer restrictions during the Restricted Period. The Committee shall have the discretion to waive all or any part of the restrictions applicable to any or all outstanding Restricted Share and Restricted Stock Unit Awards. 7.2 Restricted Shares. At the time a Restricted Share Award is granted to a Participant, a certificate representing the number of Shares subject thereto shall be registered in the name of such Participant. Such certificate shall be held by the Company or any custodian appointed by the Company for the account of the Participant subject to the terms and conditions of the Plan and the Award Agreement, and shall bear such a legend setting forth the restrictions imposed thereon as the Committee has determined. The foregoing to the contrary notwithstanding, the Committee may provide that a Participant’s ownership of Restricted Shares during the Restricted Period be evidenced, in lieu of such certificate, by a “book entry” (i.e., a computerized or manual entry) in the records of the Company or its designated agent in the name of the Participant who has received such Restricted Share Award, and confirmation and account statements sent to the Participant with respect to such book-entry Shares may bear the restrictive legend referenced in the preceding sentence. Such records of the Company or such agent shall, absent manifest error, be binding on all Participants who receive Restricted Share Awards evidenced in such manner. The holding of Restricted Shares by the Company or such agent, or the use of book entries to evidence the ownership of Restricted Shares, in accordance with this Section 7.2, shall not affect the rights of Participants as owners of the Restricted Shares awarded to them, nor affect the restrictions applicable to such Shares under the Award Agreement or the Plan, including the transfer restrictions. (a) Unless otherwise provided in the applicable Award Agreement, a Participant who has been granted an Award of Restricted Shares shall have all rights of a stockholder with respect to such Restricted Shares, including the right to receive dividends and the right to vote such Restricted Shares, subject to the following restrictions: (i) the Participant shall not be entitled to delivery of the stock certificate until the expiration of the Restricted Period with respect to such Restricted Shares; (ii) none of the Restricted Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of during such Restricted Period; and (iii) except as otherwise determined by the Committee at or after grant, all of the Restricted Shares shall be forfeited and all rights of the Participant to such Restricted Shares shall terminate, without further obligation or action on the part of the Company, unless the Participant remains in the continuous employment (or other service-providing capacity) of the Company for the entire Restricted Period. Unless otherwise provided in an applicable Award Agreement, any cash dividends and dividends paid in stock or other property with respect to the Restricted Shares shall be withheld by the Company for the Participant's account, and interest may be credited on the amount of the cash dividends withheld at a TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
rate and subject to such terms as determined by the Committee. The cash dividends (and any interest thereon) or dividends payable in Shares or other property so withheld shall be subject to the same restrictions, terms and conditions as such Restricted Shares. (b) At the end of the Restricted Period and provided that any other restrictive conditions of the Restricted Share Award are met, or at such earlier time as determined by the Committee, all restrictions set forth in the Award Agreement relating to the Restricted Share Award or in the Plan shall lapse as to the Restricted Shares subject thereto, and a stock certificate for the appropriate number of Shares, free of the restrictions and restricted stock legend, shall be delivered to the Participant or the Participant’s beneficiary or estate, as the case may be (or, in the case of book-entry Shares, such restrictions and restricted stock legend shall be removed from the confirmation and account statements delivered to the Participant or the Participant’s beneficiary or estate, as the case may be, in book-entry form), along with any dividends previously credited or held with respect thereto. 7.3 Restricted Stock Units. No Shares shall be issued at the time an Award of Restricted Stock Units is granted, and the Company will not be required to set aside funds for the payment of any such Award. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder. (a) Each Restricted Stock Unit shall have a value equal to the Fair Market Value of a Share. Restricted Stock Units shall be paid in cash, Shares, other securities or other property, as determined in the sole discretion of the Committee, upon the lapse of the Restricted Period, or otherwise in accordance with the applicable Award Agreement. The Committee may grant Restricted Stock Units with a deferral feature, whereby settlement is deferred beyond the end of the Restricted Period until the occurrence of a future payment date or event set forth in an Award Agreement. (b) Unless otherwise provided in the applicable Award Agreement, a Participant shall receive Dividend Equivalents in respect of any vested Restricted Stock Units at the time of any payment of dividends to stockholders on Shares. The amount of any such Dividend Equivalents shall equal the amount that would be payable to the Participant as a stockholder in respect of a number of Shares equal to the number of vested Restricted Stock Units then credited to the Participant. Any such Dividend Equivalents shall be paid at such time as provided in the applicable Award Agreement or by the Committee (and in accordance with Section 409A of the Code with regard to Awards subject thereto); provided, that no Dividend Equivalents shall be paid on Restricted Stock Units that are not vested unless and only to the extent the underlying Restricted Stock Units vest. (c) Other than pursuant to Section 15.1 (but no transfers for consideration shall be permitted), Restricted Stock Units may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of. In addition, except as otherwise determined by the Committee at or after grant (but in any event subject to Section 7.4), all Restricted Stock Units and all rights of the Participant to such Restricted Stock Units shall terminate, without further obligation or action on the part of the Company, unless the TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
Participant remains in continuous employment (or other service-providing capacity) of the Company for the entire Restricted Period applicable to the Restricted Stock Units and unless any other restrictive conditions relating to the Restricted Stock Unit Award are met. 7.4 Minimum Vesting Period. Except for Substitute Awards, or the death or Disability of the Participant, or in the event of a Change in Control, Restricted Share Awards and Restricted Stock Unit Awards (including those issued as or as payment for Performance Awards) shall have a Vesting Period of not less than one (1) year from the date of grant (inclusive of any performance periods related thereto); provided, that the Committee has the discretion to waive this requirement with respect to an Award at or after grant, so long as the total number of Shares that are issued pursuant to Awards having an originally stated Vesting Period of less than one year from the date of grant (inclusive of any performance periods related thereto) shall not exceed 5% of the Share Reserve. Section 8. Performance Awards. 8.1 Grant. The Committee shall have sole and complete authority to determine the Participants who shall receive a Performance Award, which shall consist of a right that is (i) denominated in cash or Shares (including but not limited to Restricted Shares or Restricted Stock Units), (ii) valued, as determined by the Committee, in accordance with the achievement of such performance goals during such performance periods as the Committee shall establish, and (iii) payable at such time and in such form as the Committee shall determine. 8.2 Terms and Conditions. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the performance goals to be achieved during any performance period, the length of any performance period, the method of determining the amount earned under any Performance Award and the amount and kind of any payment or transfer to be made pursuant to any Performance Award. The Committee shall have the discretion to amend specific provisions of any outstanding Performance Awards; provided, however, that such amendment may not adversely affect existing Performance Awards made within a performance period commencing prior to the implementation of the amendment; provided further, that the minimum Vesting Period requirements set forth in Section 6.6 and Section 7.4 shall apply to grants of Performance Awards hereunder. No Performance Award shall have a term in excess of ten (10) years. 8.3 Payment of Performance Awards. Performance Awards may be paid in a lump sum or in installments following the close of the performance period or, in accordance with the procedures established by the Committee, on a deferred basis. Termination of employment prior to the end of any performance period (or any other Restricted Period), other than for reasons of death or Disability, will result in the forfeiture of the Performance Award and no payments will be made with respect thereto, except as otherwise provided by the Committee at or after grant. Notwithstanding the foregoing, except as otherwise provided in Section 11 hereof, the Committee may, in its discretion, waive any performance goals and/or other terms and conditions relating to a Performance Award. A Participant’s rights to any Performance TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
Award may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of in any manner, except by will or the laws of descent and distribution, and/or except as the Committee may determine at or after grant, but no transfers for consideration shall be permitted. Section 9. Other Stock-Based Awards. The Committee shall have the authority to determine the Participants who shall receive an Other Stock-Based Award, which shall consist of any right that is (i) not an Award described in Sections 6 to 8 above and (ii) an Award of Shares or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of any such Other Stock-Based Award; provided, however, that the minimum Vesting Period requirements set forth in Section 6.6 and Section 7.4 hereof shall apply to Other Stock-Based Awards. No Other Stock-Based Award shall have a term in excess of ten (10) years. Section 10. Non-Employee Director Awards. 10.1 The Board may provide that all or a portion of a Non-Employee Director’s annual retainer, meeting fees and/or other awards or compensation as determined by the Board, be payable (either automatically or at the election of a Non-Employee Director) in the form of Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units and/or Other Stock-Based Awards, including unrestricted Shares. The Board shall determine the terms and conditions of any such Awards, including the terms and conditions which shall apply upon a termination of the Non-Employee Director’s service as a member of the Board, and shall have full power and authority in its discretion to administer such Awards, subject to the terms of the Plan and applicable law. 10.2 The Board may also grant other Awards to Non-Employee Directors pursuant to the terms of the Plan, including any Award described in Sections 6, 7 and 9 above. With respect to such Awards, all references in the Plan to the Committee shall be deemed to be references to the Board. 10.3 Notwithstanding anything herein to the contrary, the aggregate value of all compensation paid or granted, as applicable, to any individual for service as a Non-Employee Director with respect to any calendar year, including equity Awards granted and cash fees paid by the Company to such Non-Employee Director, shall not exceed five hundred thousand dollars ($500,000) in value, calculating the value of any equity Awards granted during such calendar year based on the grant date fair value of such Awards for financial reporting purposes. The Board may make exceptions to the applicable limit in this Section 10.3 for individual Non-Employee Directors in extraordinary circumstances, such as where a Non-Employee Director is serving on a special litigation or transaction committee of TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
the Board, as the Board may determine in its discretion, provided that the Non-Employee Director receiving such additional compensation may not participate in the decision to award such compensation involving such Non-Employee Director. Section 11. Provisions Applicable to Performance Awards. 11.1 Performance Goals. The Committee may grant Performance Awards to Participants based upon the attainment of performance targets related to one or more performance goals selected by the Committee from among the goals specified below: (a) earnings before interest, taxes, depreciation and/or amortization (EBITDA) or adjusted EBITDA; (b) operating income or profit; (c) operating efficiencies; (d) return on equity, assets, capital, capital employed or investment; (e) after tax operating income; (f) net income; (g) earnings or book value per Share; (h) cash flow(s), funds from operations and adjusted funds from operations (as described from time to time in the Company’s financial statements); (i) total sales or revenues or sales or revenues per employee; (j) production (separate work units or SWUs); (k) stock price or total shareholder return; (l) dividends; (m) debt reduction; (n) strategic business objectives, consisting of one or more objectives based on meeting specified cost targets, business expansion goals and goals relating to acquisitions or divestitures; (o) any other financial or non-financial metric or goal that the Committee deems appropriate; or (p) any combination thereof. Each goal may be expressed on an absolute and/or relative basis, may be based on or otherwise employ comparisons based on internal targets, the past performance of the Company or any Subsidiary, operating unit, business segment or division of the Company and/or the past or current performance of other companies, and in the case of earnings-based measures, may use or employ comparisons relating to capital, shareholders’ equity and/or Shares outstanding, or to assets or net assets. The Committee may TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
appropriately adjust any evaluation of performance under criteria set forth in this Section 11.1 to exclude any of the following events that occurs during a performance period: (i) asset impairments or write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax law, accounting principles or other such laws or provisions affecting reported results, (iv) accruals for reorganization and restructuring programs, (v) any items that are “unusual in nature” or “infrequently occurring” within the meaning of generally accepted accounting principles or other extraordinary items that are included within management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders for the applicable year, (vi) the effect of adverse governmental or regulatory action, or delays in governmental or regulatory action; (vii) any other event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management; and (viii) any other similar item or event selected by the Committee in its discretion in light of the purposes for which the Performance Award was granted. 11.2 Certain Limits. With respect to any Participant, (i) the maximum number of Shares in respect of which all Performance Awards may be granted under Section 8 of the Plan over a three year period is 900,000 Shares and (ii) the maximum amount of all Performance Awards that are settled in cash and that may be granted under Section 8 of the Plan in any year is $5,000,000. 11.3 Committee Determination. With respect to grants of Performance Awards, within a reasonable time following the commencement of each performance period, the Committee shall, in writing, (1) select the performance goal or goals applicable to the performance period, (2) establish the various targets and bonus amounts which may be earned for such performance period, and (3) specify the relationship between performance goals and targets and the amounts to be earned by each Participant for such performance period. Following the completion of each performance period, the Committee shall evaluate whether and the extent to which the applicable performance targets have been achieved and the amounts, if any, payable to Participants thereunder. The Committee shall have the right to adjust the amount payable under a Performance Award at a given level of performance to take into account additional factors that the Committee may deem relevant in its sole discretion to the assessment of individual or corporate performance for the performance period. Section 12. Termination of Employment. The Committee shall have the full power and authority to determine the terms and conditions that shall apply to any Award upon a Participant’s termination of employment with the Company or its Affiliates, including a termination by the Company with or without Cause, by a Participant voluntarily, or by reason of death, Disability or Retirement, and may provide or amend such terms and conditions in the Award Agreement or in such rules and regulations as it may prescribe. TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
Section 13. Change in Control. Unless otherwise provided in an Award Agreement, a Change in Control shall not affect the vesting or exercisability of, or restrictions applicable to, outstanding Awards. Section 14. Amendment and Termination. 14.1 Amendments to the Plan. The Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time; provided, that no such amendment, alteration, suspension, discontinuation or termination shall be made without stockholder approval if such approval is necessary to comply with any tax or regulatory requirement (including the rules and regulations of the New York Stock Exchange or any other stock exchange or national market on which the Shares are traded) for which or with which the Board deems it necessary or desirable to comply. 14.2 Amendments to Awards. Subject to the repricing restrictions of Section 6.2, the Committee may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted, prospectively or retroactively; provided, that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant or any holder or beneficiary of any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant, holder or beneficiary. 14.3 Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make equitable and proportionate adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (including, without limitation, the events described in Section 4.2 hereof) affecting the Company, any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations or accounting principles subject to any restrictions otherwise set forth in the Plan. 14.4 Recoupment of Awards. Notwithstanding any other provisions in this Plan, the Company may cancel any Award, require reimbursement of any Award by a Participant, and effect any other right of recoupment of equity or other compensation provided under the Plan in accordance with the terms of any Award Agreement, the Company’s NYSE Executive Compensation Recoupment Policy (as it may be amended from time to time) or any Company recoupment policies that may be adopted and/or modified from time to time (each, a “Clawback Policy”), including those adopted or modified to comply with any applicable laws. In addition, the Company may utilize any method of recovery specified in any Clawback Policy in connection with any Award recoupment pursuant to the terms of any Clawback Policy, and a Participant may be required to repay to the Company previously paid compensation, whether required by the Plan or an Award Agreement, in accordance with any Clawback Policy. By accepting an Award, a Participant is agreeing to be bound by any Clawback Policy as in effect, or as may be adopted and/or modified from time to time by the Company in its discretion. TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
Section 15. General Provisions. 15.1 Limited Transferability of Awards. No Award shall be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant, except by will or the laws of descent and distribution and/or as may be provided by the Committee in its discretion, at or after grant, but in no event shall an Award be transferred to a third party for consideration. No transfer of an Award by will or by laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary or appropriate to establish the validity of the transfer. 15.2 Dividend Equivalents. No dividend equivalent rights shall be granted with respect to Options or SARs. At the discretion of the Committee, but subject to Section 7 and Section 8, any Award (other than an Option or SAR) representing one Share may be credited with an amount equal to the dividends paid by the Company in cash, stock or other property in respect of one Share (“Dividend Equivalents”). In the discretion of the Committee, Dividend Equivalents may be deemed re-invested in additional Shares subject to the applicable Award based on the Fair Market Value of a Share on the applicable dividend payment date and rounded down to the nearest whole Share. Dividend Equivalents and any earnings thereon, shall be distributed in cash or, at the discretion of the Committee, in Shares having a Fair Market Value equal to the amount of such Dividend Equivalents and earnings, if applicable, to the Participant upon settlement of the underlying Award, and if such Award is forfeited, the Participant shall have no right to such Dividend Equivalents. 15.3. Compliance with Section 409A of the Code. No Award (or modification thereof) shall provide for deferral of compensation that does not comply with Section 409A of the Code unless the Committee, at the time of grant, specifically provides that the Award is not intended to comply with Section 409A of the Code. Notwithstanding any provision of this Plan to the contrary, if one or more of the payments or benefits received or to be received by a Participant pursuant to an Award would cause the Participant to incur any additional tax or interest under Section 409A of the Code, the Committee may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code. In the event that it is reasonably determined by the Board or Committee that, as a result of Section 409A of the Code, payments in respect of any Award under the Plan may not be made at the time contemplated by the terms of the Plan or the relevant Award agreement, as the case may be, without causing the Participant holding such Award to be subject to taxation under Section 409A of the Code, the Company will make such payment on the first day that would not result in the Participant incurring any tax liability under Section 409A of the Code; which, if the Participant is a “specified employee” within the meaning of the Section 409A, shall be the first day following the six-month period beginning on the date of Participant’s termination of employment. Unless otherwise provided in an Award Agreement or other document governing the issuance of such Award, payment of any Performance Award intended to qualify as a “short term deferral” within the meaning of Section 1.409A-1(b)(4)(i) of the Regulations shall be made between the first day following the close of the applicable performance period and TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
the last day of the “applicable 2 ½ month period” as defined therein. Notwithstanding the foregoing, each Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on him or her, or in respect of any payment or benefit delivered in connection with the Plan (including any taxes and penalties under Section 409A of the Code), and the Company shall not have any obligation to indemnify or otherwise hold any Participant harmless from any or all such taxes or penalties. 15.4 No Rights to Awards. No Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards need not be the same with respect to each Participant. 15.5 Share Certificates. All certificates for Shares or other securities of the Company or any Affiliate delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the SEC or any state securities commission or regulatory authority, any stock exchange or other market upon which such Shares or other securities are then listed, and any applicable Federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. 15.6 Withholding. A Participant may be required to pay to the Company or any Affiliate, and the Company or any such Affiliate shall have the right and is hereby authorized to withhold from any Award, from any payment due or transfer made under any Award, or from any compensation or other amount owing to such Participant, the amount (in cash, Shares, other securities, other Awards or other property) of any applicable withholding or other tax-related obligations in respect of an Award, its exercise or any other transaction involving an Award, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes. Without limiting the generality of the foregoing, the Committee may in its discretion permit a Participant, in an Award Agreement or otherwise, to satisfy or arrange to satisfy, in whole or in part, the tax obligations incident to an Award by: (a) electing to have the Company withhold Shares or other property otherwise deliverable to such Participant pursuant to the Award (provided, however, that the value of any Shares so withheld shall not exceed the maximum amount of tax required to satisfy applicable U.S. federal, state, local and non-U.S. withholding obligations, including payroll tax withholding obligations), and/or (b) tendering to the Company Shares owned by such Participant (or by such Participant and his or her spouse jointly) and purchased or held for the requisite period of time, in each case (x) as may be required to avoid the employer entity incurring an adverse accounting charge and (y) based on the Fair Market Value of the Shares on the wage payment date as determined by the Committee. All such elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate. 15.7 Award Agreements. Each Award hereunder shall be evidenced by an Award Agreement that shall be delivered to the Participant and shall specify the terms and TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
conditions of the Award and any rules applicable thereto. In the event of a conflict between the terms of the Plan and any Award Agreement, the terms of the Plan shall prevail. The Committee shall, subject to applicable law, determine the date an Award is deemed to be granted. The Committee or, except to the extent prohibited under applicable law, its delegate(s) may establish the terms of agreements or other documents evidencing Awards under this Plan and may, but need not, require as a condition to any such agreement’s or document’s effectiveness that such agreement or document be executed by the Participant, including by electronic signature or other electronic indication of acceptance, and that such Participant agree to such further terms and conditions as specified in such agreement or document. The grant of an Award under this Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in this Plan as being applicable to such type of Award (or to all Awards) or as are expressly set forth in the agreement or other document evidencing such Award. 15.8 No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Subsidiary or Affiliate from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of Options, Restricted Shares, Restricted Stock Units, Other Stock-Based Awards or other types of Awards provided for hereunder. 15.9 No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Subsidiary or Affiliate. Further, the Company or a Subsidiary or Affiliate may at any time dismiss a Participant from employment, free from any liability or any claim under the Plan, unless otherwise expressly provided in an Award Agreement. 15.10 No Rights as Stockholder. Subject to the provisions of the Plan and the applicable Award Agreement, no Participant or holder or beneficiary of any Award shall have any rights as a stockholder with respect to any Shares to be distributed under the Plan until such person has become a holder of such Shares. Notwithstanding the foregoing, in connection with each grant of Restricted Shares hereunder, the applicable Award Agreement shall specify if and to what extent the Participant shall not be entitled to the rights of a stockholder in respect of such Restricted Shares. 15.11 Governing Law. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan and any Award Agreement shall be determined in accordance with the laws of the State of Delaware without giving effect to conflicts of laws principles. 15.12 Severability. If any provision of the Plan or any Award is, or becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. 15.13 Other Laws. The Committee may refuse to issue or transfer any Shares or other consideration under an Award if, acting in its sole discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation (including applicable non-U.S. laws or regulations) or entitle the Company to recover the same under Exchange Act Section 16(b), and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary. 15.14 No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Subsidiary or Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary or Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Subsidiary or Affiliate. 15.15 No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine whether cash, other securities or other property shall be paid or transferred in lieu of any fractional Shares or whether such fractional Shares or any rights thereto shall be canceled, terminated or otherwise eliminated. 15.16 Headings. Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. 15.17 Data Privacy. As a condition of receipt of any Award, any Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section 15.17 by and among, as applicable, the Company and its Subsidiaries for the exclusive purpose of implementing, administering and managing the Participant’s participation in the Plan. The Company may hold certain personal information about any Participant, including but not limited to, the Participant’s name, home address and telephone number, date of birth, social security or other identification number, salary, nationality, job title(s), any Shares held by Participant, details of all Awards made to Participant, in each case, for the purpose of implementing, managing and administering the Plan and Awards (the “Data”). The Company and its Subsidiaries may transfer the Data amongst themselves as necessary for the purpose of implementing, administering and managing a Participant’s participation in the Plan, and the Company may further transfer the Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipients’ country. Through acceptance of any Award, each Participant authorizes TABLE OF CONTENTS | | 2024 NOTICE OF MEETING AND PROXY STATEMENT | |
such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Participant’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or Participant may elect to deposit any Shares, for as long as is necessary to implement, administer, and manage the Participant’s participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax and securities laws. A Participant may, at any time, view the Data held by the Company with respect to such Participant, request additional information about the storage and processing of the Data with respect to such Participant, recommend any necessary corrections to the Data with respect to the Participant or refuse or withdraw the consents herein in writing, in any case without cost, by contacting his or her human resources representative. The Company may cancel Participant’s ability to participate in the Plan and, in the Committee’s discretion, the Participant may forfeit any outstanding Awards, if the Participant refuses or withdraws his or her consents as described herein. Section 16. Term of the Plan. 16.1 Effective Date. The Plan shall be effective as of May 9, 2024 (the “Effective Date”), provided it has been approved by the Company’s shareholders. 16.2 Expiration Date. No new Awards shall be granted under the Plan after the tenth (10th) anniversary of the Effective Date. Unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted hereunder may, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award or to waive any conditions or rights under any such Award shall, continue after the tenth (10th) anniversary of the Effective Date. 0001040829 5 2023-01-01 2023-12-31 |
