UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant x☒ Filed by a Party other than the Registrant ¨☐
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| Preliminary Proxy Statement | ||||
| Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | ||||
| Definitive Proxy Statement | ||||
| Definitive Additional Materials | ||||
| Soliciting Material under Rule 14a-12 | ||||
| FEDERAL REALTY INVESTMENT TRUST | ||||
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| (Name of person(s) filing proxy statement, if other than the registrant) | ||||
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March 25, 201623, 2017
Dear Shareholder:
Please accept our invitation to attend our Annual Meeting of Shareholders on Wednesday, May 4, 20163, 2017 at 10:00 a.m. This year’s meeting will be held at AMP by Strathmore located at the Trust’s Pike & Rose property, 11810 Grand Park Avenue, North Bethesda, Maryland.
The business to be conducted at the meeting is described in the formal notice that follows. In addition, management will provide a review of 20152016 operating results and discuss the outlook for the future. After the formal presentation, our Trustees and management will be available to answer any questions you may have.
Your vote is important to us. Please take this time to vote via the Internet (www.voteproxy.com) or by telephone (1-800-PROXIES(1-800-PROXIES or1-800-776-9437).
We look forward to seeing you on May 4.3.
Sincerely,
|   | |
| Joseph S. Vassalluzzo | Donald C. Wood | |
Non-Executive Chairman of the Board | President and Chief Executive Officer |
FEDERAL REALTY INVESTMENT TRUST
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 20163, 2017
To Our Shareholders:
The 20162017 Annual Meeting of Shareholders of Federal Realty Investment Trust will be held at AMP by Strathmore located at 11810 Grand Park Avenue, North Bethesda, Maryland, on Wednesday, May 4, 2016,3, 2017, at 10:00 a.m. for the purpose of considering and acting upon the following:
| 1. | The election of seven Trustees to serve until our |
| 2. | The ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, |
| 3. | An advisory vote approving the compensation of our named executive officers. |
| 4. | An advisory vote on the frequency of holding future votes on the compensation of our named executive officers. |
| 5. | The transaction of such other business as may properly come before the Annual Meeting or any adjournment. |
Shareholders of record at the close of business on March 18, 201614, 2017 are entitled to notice of and to vote at the Annual Meeting.
For the Trustees:
Dawn M. Becker
Executive Vice President—General
Counsel and Secretary
Your vote is important. Even if you plan to attend the meeting, please vote via the Internet (www.voteproxy.com) or by telephone (1-800-PROXIES(1-800-PROXIES or1-800-776-9437) by following the instructions on the Notice of Internet Availability orof Proxy Materials or as instructed in the accompanying proxy. If you received or requested a copy of the proxy card by mail or bye-mail, you may submit your vote by mail; however, we encourage you to vote via the Internet or by telephone. These methods are convenient and save us significant postage and processing charges. If you attend the meeting, you may revoke your proxy and vote in person.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 4, 20163, 2017
The 20162017 Proxy Statement and 20152016 Annual Report to Shareholders, which includes our Annual Report on Form10-K for the year ended December 31, 2015,2016, are available at www.federalrealty.com.
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Deductibility of Executive Compensation in Excess of $1.0 Million | ||||
Potential Payments on Termination of Employment andChange-in-Control | ||||
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Proposal 4—Advisory Vote on the Frequency of Voting on Named Executive Officer Compensation | 32 | |||
Solicitation of Proxies, Shareholder Proposals and Other Matters | ||||
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FEDERAL REALTY INVESTMENT TRUST
1626 East Jefferson Street, Rockville, Maryland 20852
We are providing these proxy materials in connection with the 20162017 Annual Meeting of Shareholders (“Annual Meeting”) of Federal Realty Investment Trust (the “Trust”). These materials will assist you in voting your common shares of beneficial interest of the Trust (“Shares”) by providing information on matters that will be presented at the Annual Meeting.
2017 ANNUAL MEETING OF SHAREHOLDERS
Meeting Date: | Wednesday, May 3, 2017 | |
Meeting Location: | AMP by Strathmore, 11810 Grand Park Avenue, North Bethesda, Maryland | |
Record Date: | March 14, 2017 | |
Proxies: | Dawn Becker and Dan Guglielmone | |
Inspector of Elections: | Dawn Becker or American Stock Transfer and Trust Company |
VOTING MATTERS AND VOTE RECOMMENDATIONS
Proposal | Board Recommendation | |
The election of seven Trustees to serve until our 2018 Annual Meeting of Shareholders | FOR all nominees | |
The ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017 | FOR | |
An advisory vote approving the compensation of our named executive officers | FOR | |
An advisory vote on the frequency of voting on the compensation of our named executive officers | ANNUAL VOTE |
NOTICE OF ELECTRONIC AVAILABILITY OF PROXY MATERIALS
We are furnishing proxy materials including this proxy statement and our 20152016 Annual Report to Shareholders, which includes our Annual Report on Form10-K for the year ended December 31, 20152016 (“Annual Report”), to each shareholder by providing access to such documents on the Internet instead of mailing printed copies unless the shareholder hasyou previously requested to receive these materials by mail ore-mail. On or about March 25, 2016,23, 2017, we mailed to our shareholders who have not previously requested to receive these materials by mail ore-mail a “Notice of Internet Availability of Proxy Materials” (“Notice”) containing instructions on how to access and review this proxy statement and our Annual Report and how to submit your vote on the Internet or by telephone. You cannot vote by marking the Notice and returning it. If you received the Notice by mail, you will not automatically receive a printed copy of our proxy materials or Annual Report unless you follow the instructions for requesting these materials included in the Notice.
The Board of Trustees (the “Board” or “Board of Trustees”) of the Trust is soliciting your proxy to vote on matters that will be presented at our Annual Meeting.
Who is paying for the solicitation of proxies?
The cost of this solicitation of proxies will be borne by us. We may solicit proxies through the mail, Internet, in person and by telephone or facsimile, and may request brokerage houses and other custodians, nominees and fiduciaries to forward soliciting materials to the beneficial owners of Shares and reimburse them for their reasonable expenses. We may also hire a proxy solicitation firm at a standard industry compensation rate.
When will the Annual Meeting take place?
The Annual Meeting will be held at 10:00 a.m. EDT, Wednesday, May 4, 2016, at AMP by Strathmore, 11810 Grand Park Avenue, North Bethesda, Maryland.
What is the purpose of the Annual Meeting?
To vote on the following matters:
The election of seven Trustees to serve until our 2017 Annual Meeting of Shareholders;
The ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016;
An advisory vote approving the compensation of our named executive officers; and
The transaction of such other business as may properly come before the Annual Meeting or any adjournment.
What are the Board’s recommendations?
The Board recommends a vote:
FOR the election of each of the seven Trustees to serve until our 2017 Annual Meeting;
FOR the ratification of the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016; and
FOR the approval of the compensation of our named executive officers.
Why am I receiving these proxy materials?
You are receiving these materials because you owned our Shares as a “registered” shareholder or you held Shares in “street name” at the close of business onMarch 14, 2017, the record date established by our Board of Trustees (“Board”) for theour Annual Meeting andof Shareholders (“Annual Meeting”). Everyone who owned our Shares as of that entitles you to vote at our Annual Meeting.
What is the difference betweendate, whether directly as a “registered”registered shareholder and holding Shares in “street name?”
If your Shares are registered directly in your name with American Stock Transfer and Trust Company, our transfer agent, you are a “registered” shareholder. If you own Sharesor indirectly through a broker bank, trust or other nominee, rather than in your own name, you are the beneficial owner of the Shares, but considered to be holding the Shares in “street name.”
Who is entitled to vote at the Annual Meeting?
The Board established March 18, 2016 as the record date for the Annual Meeting. Holders who owned our Shares at the close of business on that date are entitled to receive notice of and may attend and vote at the Annual Meeting or any postponements or adjournments of the meeting. We had 70,861,26972,172,665 Shares outstanding on March 18, 2016.
How many votes must be present to hold the Annual Meeting?
14, 2017. A quorum is required for our shareholders to conduct business at the Annual Meeting. A quorum occurs when a majority of the Shares entitled to vote at the Annual Meeting aremust be present in person or by proxy. Properly executed proxy cards marked “for,” “against”, “withhold” or “abstain” and broker “non-votes” will be counted as present atfor us to proceed with the Annual Meeting for purposes of determiningMeeting.
As a quorum.
As to each item,shareholder, you are entitled to cast one vote per Share; however, as to the election of Trustees, you are entitled to cast one vote per Share for each of the seven open trustee positions.
A proxy is your legal designation of another person (the “proxy”) to vote your Shares on your behalf. By completing your proxy through the Internet, by telephone or by returning a completed proxy card, If you are giving Dawn M. Becker and James M. Taylor, Jr. the authority to votehold your Shares in the mannerdifferent ways (i.e., joint tenancy, trusts, custodial accounts) or in multiple accounts, you indicate on your proxy.
How do I vote?will receive more than one Notice, proxy card, voting instruction form or email, or any combination of these. You should provide voting instructions for all Notices, proxy cards, voting instruction forms and email links you receive.
If you are a “registered”registered shareholder owning your Shares directly, you can vote either in person at the Annual Meeting or by proxy without attending the Annual Meeting. We urge you to vote by proxy even if you plan to attend the Annual
Meeting so that we will know as soon as possible that enough votes will be present for us to hold the meeting. If you attend the Annual Meeting in person, you may vote at the meeting and your proxy will not be counted. You can vote by proxy by anythrough one of the following methods:
VotingBy telephone by Telephone or dialing1-800-PROXIES(1-800-776-9437)
| • | Through the internet atwww.voteproxy.com |
By completing and signing the Internet. If you are a “registered” shareholder, you may vote by proxy by using either the telephone or Internet methods of voting. Proxies submitted by telephone or through the Internet must be received by 11:59 p.m., eastern daylight time, on May 3, 2016. Please see the Notice oraccompanying proxy card for instructions on how to access the telephone and Internet voting systems.
Voting by Proxy Card. Each “registered” shareholder electingif you elect to receive shareholder materials by mail may vote by proxy by using the accompanying proxy card. Ifmail. When you return a proxy card that is properly signed and completed, the Shares represented by your proxy will be voted as you specify on the proxy card. If you sign and return ayour proxy card without indicating how you want your Shares to be voted, Dawn M. Becker and James M. Taylor, Jr.Daniel Guglielmone will vote your Shares in accordance with the recommendations of the Board.
Votes submitted by telephone or through the Internet must be received by 11:59 p.m., eastern daylight time, on May 2, 2017 in order to be counted for the Annual Meeting. Please see the Notice or proxy card for instructions on how to access the telephone and Internet voting systems. If you wish to change your vote, you may generally revoke your original vote by submitting a subsequent proxy.
Abstentions will only be counted as present for determining whether we can hold the Annual Meeting. If you do not vote your Shares, your Shares will not be counted and we may not be able to hold the Annual Meeting. We encourage you to vote by proxy using one of the methods described above even if you plan to attend the Annual Meeting in person so that we will know as soon as possible whether enough votes will be present.
For those of you holding your Shares in “street name,” we have supplied copies of our proxy materials for the Annual Meeting to theindirectly through a broker bank, trust or other nominee, holding your Shares of record and they have the responsibility to send theseyou should receive all proxy materials to you. Youfrom them and you must either direct the broker, bank, trust or nomineethem as to how to vote your Shares, or obtain from them a proxy from the broker, bank, trust or nominee to vote at the Annual Meeting. Please refer to the notice of internet availability of proxy materials or the voter instruction card used by your broker bank, trust or other nominee for specific instructions on methods of voting, including by telephone or using the Internet.voting. If you fail to give your broker bank, trust or other nominee specific instructions on how to vote your Shares with respect to ItemsProposals 1, 3 and 3,4, your vote will NOT be counted for those matters. It is important for every shareholder’s vote to be counted on these matters so we encourage you to provide your broker bank, trust or other nominee with voting instructions. If you fail to give your broker bank, trust or other nominee specific instructions on how to vote your Shares on ItemProposal 2, suchyour broker bank, trust or other nominee will generally be able to vote on ItemProposal 2 as he, she or it determines.
WhatIn the future, if I don’t vote my Shares?
If you do not voteown your Shares your Shares will not be counted for purposes of determining a quorum or for determining whether the matters presented at the Annual Meeting are approved.
What if I return my proxy but abstain?
Abstentions are counted as present for determining a quorum; however, abstentions will have no effect on any of the items to be considered at the Annual Meeting.
May I change my vote after I return my proxy?
Yes. A proxy may be revoked by a “registered” shareholder at any time before it is exercised at the Annual Meeting by submitting a proxy bearing a later date or by voting in person at the Annual Meeting. If you hold your Shares in “street name,” you must contact your broker, bank, trust or other nominee to determine how to revoke your original proxy. In general, submitting a subsequent proxy executed by the party that executed the original proxy will revoke the earlier proxy.
Why did I receive more than one Notice, proxy card, voting instruction form and/or email?
You will receive more than one Notice, proxy card, voting instruction form or email, or any combination of these, if you hold your Shares in different ways (i.e., joint tenancy, trusts, custodial accounts) or in multiple accounts. You should provide voting instructions for all Notices, proxy cards, voting instruction formsdirectly and email links you receive.
Are there other matters to be acted upon at the Annual Meeting?
The Trust does not know of any matter to be presented at the Annual Meeting other than those described in the proxy statement. If, however, other matters are properly presented for action at the Annual Meeting, Dawn M. Becker and James M. Taylor, Jr. will have the discretion to vote on such matters in accordance with their best judgment.
How may “registered” shareholders and shareholders holding Shares in “street name” electwould like to receive future shareholderproxy materials by electronic mail (“email”) delivery?
Opting to receive all future proxy materials via email, delivery is another method of saving us the cost of producing and mailing documents to your home or business and helps us to conserve natural resources. “Registered” shareholders who wish to receive their proxy materials in this manneryou may register to do so on American Stock Transfer & Trust Company’s website atwww.amstock.comwww.astfinancial.com in which case you will receive an email containing links to our proxy materials. If you own Shares in “street name”through a broker or other nominee and wishwant to receive proxy materials via an email, containing links, you must contact your broker bank, trust or other nominee for instructions on how to receive future proxy materials in this manner. Shareholders who hold Shares in different ways (i.e., joint tenancy, trusts, custodial accounts) or in multiple accounts will need to complete the applicable process for each account.instructions. Your election to receive your proxy materials by email delivery will remain in effect for all future annual meetings until you revoke it.
How can I obtain paper copies of future shareholder materials?
Shareholders can access this Proxy Statement, our Annual Report and our other filings with the Securities and Exchange Commission (“SEC”) on the Investors page of our website atwww.federalrealty.com. A copy of our Annual Report, including the financial statements and financial statement schedules (“Form10-K”) is being provided to shareholders along with this Proxy Statement. The Form10-K includes certain exhibits, which we will provide to you only upon request addressed to Investor Relations at 1626 East Jefferson Street, Rockville, Maryland 20852. The request must be accompanied by payment of a fee to cover our reasonable expenses for copying and mailing the Form10-K. If you elected to receive our shareholder materials via the Internet or email, you may request paper copies, without charge, by written request addressed to the address set forth above.
The SEC’s rules permit us to deliver a single Notice or single set of Annual Meeting materials to one address shared by two or more of our shareholders unless we have received contrary instructions from shareholders. This procedure, referred to as “householding”, reduces the volume of duplicate information shareholders receive and can result in significant savings on mailing and printing costs. To take advantage of this opportunity, only one Notice, Proxy Statement and the Annual Report is being delivered to multiple shareholders who share a single address, unless any shareholder residing at that address gave contrary instructions. If any shareholder sharing an address with another shareholder desires at this timewants to receive a separate copy of this Proxy Statement and the Annual Report or wishes to receive a separate proxy statement and annual report in the future, or receives multiple copies of the proxy statement and Annual Report and wishes to receive a single copy, the shareholder should provide such instructions by calling our Investor Relations Department at(800) 937-5449, by writing to Investor Relations at 1626 East Jefferson Street, Rockville, Maryland 20852, or by sending ane-mail to Investor Relations atIR@federalrealty.com.IR@federalrealty.com
If you elected to receive our shareholder materials via the Internet or via email delivery, you may request paper copies, without charge, by written request addressed to the address set forth above.
What if I have questions about the Notice, voting or email delivery?.
Questions regarding the Notice, voting or email delivery should be directed to our Investor Relations Department at (800)937-5449 or by email atIR@federalrealty.com.
Who are the largest owners of Shares?OWNERSHIP OF PRINCIPAL SHAREHOLDERS
Based upon our records and the information reported in filings with the SEC, the following were beneficial owners of more than 5% of our Shares as of March 18, 2016:14, 2017:
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percentage of Our Outstanding Shares (1) | Amount and Nature of Beneficial Ownership | Percentage of Our Outstanding Shares (1) | ||||||||||||
The Vanguard Group, Inc.(2) 100 Vanguard Blvd. Malvern, PA 19355 | 10,102,534 | 14.3 | % | 12,222,133 | 16.9 | % | ||||||||||
BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 | 8,338,015 | 11.8 | % | 7,538,685 | 10.4 | % | ||||||||||
Vanguard Specialized Funds—Vanguard REIT Index Fund(4) 100 Vanguard Blvd. Malvern, PA 19355 | 4,978,229 | 7.0 | % | |||||||||||||
State Street Corporation(4) State Street Financial Center, One Lincoln Street Boston, MA 02111 | 5,646,994 | 7.8 | % | |||||||||||||
State Street Corporation(5) State Street Financial Center One Lincoln Street Boston, MA 02111 | 4,778,001 | 6.7 | % | |||||||||||||
Vanguard Specialized Funds—Vanguard REIT Index Fund(5) 100 Vanguard Blvd. Malvern, PA 19355 | 5,419,307 | 7.5 | % | |||||||||||||
Invesco Ltd.(6) 1555 Peachtree Street, NE, Suite 1800 Atlanta, GA 30309 | 3,705,292 | 5.1 | % | |||||||||||||
| (1) | The percentage of outstanding Shares is calculated by taking the number of Shares stated in the Schedule 13G or 13G/A, as applicable, filed with the SEC divided by |
| (2) | Information based on a Schedule 13G/A filed with the SEC on February 10, |
| (3) | Information based on a Schedule 13G/A filed with the SEC on January |
| (4) | Information based on a Schedule 13G filed with the SEC on February 6, 2017 by State Street Corporation, which states State Street Corporation, a parent holding company, has shared voting and dispositive power over 5,646,994 Shares. |
| (5) | Information based on a Schedule 13G/A filed with the SEC on February |
| Information based on a Schedule 13G filed with the SEC on February |
How many Shares doOWNERSHIP OF TRUSTEES AND EXECUTIVE OFFICERS
As of March 14, 2017, our Trustees and executive officers own?
As of March 18, 2016, our Trustees and executive officers, both individually and collectively, beneficially owned the Shares reflected in the table below. The number of Shares shown in thisThis table reflects beneficial ownership determined in accordance with Rule13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and therefore, includes unvested Shares and Sharesoptions that have not been issued but as to which options are outstanding and may be exercised within 60 days of the date of this proxy statement. Except as noted in the footnotes that follow the table, each Trustee and executive officer has sole voting and investment power as to all Shares listed. Fractional Shares have been rounded to the nearest full Share.
| Name and Address of Beneficial Owner (1) | Common | Unvested Restricted Shares | Options Currently Exercisable or Exercisable Within 60 Days | Total Shares Beneficially Owned | Percentage of Outstanding Shares Owned (2) | Common | Unvested Restricted Shares | Options Currently Exercisable or Exercisable Within 60 Days | Total Shares Beneficially Owned | Percentage of Outstanding Shares Owned (2) | ||||||||||||||||||||||||||||||
Dawn M. Becker | 102,311 | 12,143 | 39,941 | 154,395 | * | 109,634 | 11,829 | 26,627 | 148,090 | * | ||||||||||||||||||||||||||||||
Jon E. Bortz(3) | 8,062 | 0 | 0 | 8,062 | * | |||||||||||||||||||||||||||||||||||
Jon E. Bortz (3) | 8,801 | 0 | 0 | 8,801 | * | |||||||||||||||||||||||||||||||||||
David W. Faeder | 7,719 | 0 | 0 | 7,719 | * | 8,458 | 0 | 0 | 8,458 | * | ||||||||||||||||||||||||||||||
Kristin Gamble(4) | 29,347 | 0 | 0 | 29,347 | * | |||||||||||||||||||||||||||||||||||
Kristin Gamble (4) | 26,499 | 0 | 0 | 26,499 | * | |||||||||||||||||||||||||||||||||||
Daniel Guglielmone | 0 | 15,842 | 0 | 15,842 | * | |||||||||||||||||||||||||||||||||||
Elizabeth I. Holland | 0 | 0 | 0 | 0 | * | |||||||||||||||||||||||||||||||||||
Gail P. Steinel | 7,515 | 0 | 0 | 7,515 | * | 8,254 | 0 | 0 | 8,254 | * | ||||||||||||||||||||||||||||||
James M. Taylor, Jr. | 14,708 | 17,151 | 0 | 31,859 | * | 12,882 | 0 | 0 | 12,882 | * | ||||||||||||||||||||||||||||||
Warren M. Thompson | 7,594 | 0 | 0 | 7,594 | * | 8,333 | 0 | 0 | 8,333 | * | ||||||||||||||||||||||||||||||
Joseph S. Vassalluzzo | 18,945 | 0 | 0 | 18,945 | * | 20,001 | 0 | 0 | 20,001 | * | ||||||||||||||||||||||||||||||
Donald C. Wood(5) | 234,189 | 84,212 | 247,996 | 566,397 | * | |||||||||||||||||||||||||||||||||||
Trustees, trustee nominees and executive officers as a group (9 individuals) | 430,390 | 113,506 | 287,937 | 831,833 | 1.2 | % | ||||||||||||||||||||||||||||||||||
Donald C. Wood (5) | 243,559 | 90,362 | 178,188 | 512,109 | * | |||||||||||||||||||||||||||||||||||
Trustees, trustee nominees and executive officers as a group (11 individuals) | 446,421 | 118,033 | 204,815 | 769,269 | 1.1 | % | ||||||||||||||||||||||||||||||||||
| * | Less than 1% |
| (1) | Unless otherwise indicated, the address of each beneficial owner is 1626 East Jefferson Street, Rockville, MD 20852. |
| (2) | The percentage of outstanding Shares owned is calculated by taking the number of Shares reflected in the column titled “Total Shares Beneficially Owned” divided by |
| (3) | As to these Shares, voting and investment power is shared with Mr. Bortz’ wife. |
| (4) | Includes |
| (5) | Includes 53,879 Shares owned by Mr. Wood’s wife. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Our Trustees, executive officers and any persons who beneficially own more than 10% of our Shares are required by Section 16(a) of the Exchange Act to file reports of initial ownership and changes of ownership of our Shares with the SEC and with the NYSE. To our best knowledge, based solely on review of copies of such
reports furnished to us and written representations that no other reports were required, the required filings of all such Trustees and executive officers were filed timely during 2016.
TRUSTEES AND CORPORATE GOVERNANCE INFORMATION
IndependencePROPOSAL 1—ELECTION OF TRUSTEES
Our Board of Trustees currently has eight Trustees. At the February 2017 Board meeting, Ms. Kristin Gamble advised the Board that she would not stand forre-election, having served on the Board for more than 20 years and nearing the Board’s retirement age. Ms. Gamble will continue to serve as Trustee through the May 2, 2017 Board meeting. At the time of the Annual Meeting, the Board will have seven Trustee positions and has nominated the remaining seven Board member to stand for election at the Annual Meeting to fill those positions. All trustees elected will hold office until the 2018 Annual Meeting of Shareholders and until their successors have been duly elected and qualified.
During 2016, after discussion with one of our shareholders, the Board modified our Bylaws to provide that in uncontested elections such as this one, a nominee had to receive a majority of votes cast in order to be elected. Previously, a nominee had only to receive a plurality.
The Board recommends a vote FOR each of the nominees.
The following paragraphs provide biographies of each of our nominees that include information regarding the person’s service as a trustee, business experience, service on other boards and areas of skill and expertise that were considered by the Nominating and Corporate Governance Committee and the Board in deciding that such individual should serve on the Board.
Jon E. Bortz, age 60, has served on our Board since 2005. Mr. Bortz is currently the President, Chief Executive Officer and Chairman of the Board of Pebblebrook Hotel Trust, a REIT that acquires and invests in upper upscale hotels in large US cities (from 2009 to the present). Prior to that, Mr. Bortz was Chief Executive Officer and Chairman of the Board of LaSalle Hotel Properties for more than eight years. Mr. Bortz brings to the Board public company, REIT and real estate experience. His experience as chief executive officer of LaSalle Hotel Properties and Pebblebrook Hotel Trust provide a valuable perspective for running a public real estate company while his real estate experience at Jones Lang LaSalle provides fundamental real estate experience critical to our core business.
David W. Faeder, age 60, has served on our Board since 2003. Since 2003, Mr. Faeder has been a Managing Partner of Fountain Square Properties, a diversified real estate company. Over a10-year period prior to that. Mr. Fader held various positions at Sunrise Senior Living, Inc., a provider of senior living services in the United States, United Kingdom and Canada, including Vice Chairman, President and Executive Vice President and Chief Financial Officer. Mr. Faeder currently serves as a Director of Arlington Asset Investment Corp., a company that acquires and holds mortgage-related and other assets.Mr. Faeder is a valuable member of the Board because of his public company and accounting experience, having previously served as the president and chief financial officer of Sunrise Senior Living, and his real estate investment experience from his time as a private real estate investor.
Elizabeth Holland, age 51, has served on the Board since February 2017. Ms. Holland is the Chief Executive Officer of Abbell Credit Corporation and Abbell Associates, LLC, aseventy-year-old private real estate acquisition, development and management company with a portfolio of shopping center, office, and enclosed mall properties. She has held those roles since 1997. Prior to that, Ms. Holland was a practicing attorney and a fixed income portfolio manager. Ms. Holland is active in the International Council of Shopping Centers and serves as its Chairman of the Board of Trustees until May 2017. The Board views Ms. Holland’s retail real estate expertise and experience as Chairman of ICSC as valuable and complementary skill sets to have on the Board.
Gail P. Steinel, age 60, has served on the Board since 2006. Since 2007, Ms. Steinel has been the owner of Executive Advisors, a company that provides consulting services and leadership seminars. Ms. Steinel’s previous experiences were as Executive Vice President with BearingPoint, Inc., a management and technology consulting firm with responsibility for overseeing the global commercial services business unit and a global managing partner of Arthur Andersen’s business consulting practice. Ms. Steinel is currently a director of MTS Systems Corporation, a provider of mechanical test systems, material testing, fatigue testing and tensile testing equipment as well as motion simulation systems and calibration services. Ms. Steinel has over 25 years of auditing and consulting experience that provides the Board with a helpful perspective on managing risk and systems operations.
Warren M. Thompson, age 57, has served on the Board since 2007. Mr. Thompson is the President and Chairman of Thompson Hospitality Corporation, a food service company that owns and operates restaurants and contract food services, since founding the company in October 1992. Mr. Thompson’s experience running restaurants owned by Thompson Hospitality provides the Board and management with a unique perspective that is shared by a large percentage of the Trust’s retail tenants.
Joseph S. Vassalluzzo, age 69, has served on the Board since 2002. Mr. Vassalluzzo has served as ourNon-Executive Chairman of the Board of Trustees since February 2006. From 1997 through 2005, Ms. Vassalluzzo held various positions, including Vice Chairman, with Staples, Inc., a retailer specializing in home, office, and computer products. Mr. Vassalluzzo currently serves as theNon-Executive Chairman of the Board of Office Depot, Inc. Mr. Vassalluzzo’s extensive background in retail and real estate as a result of having served as an executive with Staples, including his responsibility for expanding Staples real estate presence, as well as his service on the boards of a number of retailers provides the board and management with retail and retail real estate expertise that is essential to our core business.
Donald C. Wood, age 56, has served on the Board since 2003. Mr. Wood currently serves as our President and Chief Executive Officer, positions he has held since 2003. Mr. Wood joined the Trust in 1998 and also held the positions of Chief Financial Officer and Chief Operating Officer. Currently, Mr. Wood is a director of Quality Care Properties, Inc., a real estate company focused on post-acute/skilled nursing and memory care/assisted living properties, and has previously served as a director of Post Properties, Inc., Chairman of the Board of the National Association of Real Estate Investment Trusts and a member of the Board of Governors of the International Council of Shopping Centers. Mr. Wood’s tenure with the Trust and his responsibilities as chief executive officer provides the Board with familiarity and details on all aspects of the operations of the Trust.
You are entitled to cast one vote per Share for each of the seven named individuals. Proxies may not be voted for more than seven individuals. The affirmative vote of a majority of votes cast at the Annual Meeting, in person or by proxy, is required for the election of each of the Trustees. If you are a “registered” shareholder and fail to give any instructions on your proxy card on this matter, the proxies identified on the proxy card will vote FOR each of the seven individuals in accordance with the Board’s recommendation. An “abstention” or broker“non-vote” will have no effect on the outcome of the vote on this proposal.
Article III, Section 1 ofThe Board reviews on an ongoing basis all relationships between us and each Trustee to determine whether each Trustee is independent or otherwise has any relationship to the Trust that could adversely affect the Trustee’s ability to exercise independent judgment and to confirm compliance with our Bylaws provideswhich provide that no more than one of our Trustees can fail to qualify as independent under the requirements of the New York Stock Exchange (“NYSE”), the SEC, our Corporate Governance Guidelines and other applicable rules and regulations. At its first quarterly meeting each calendar year, the Board reviews all relationships between us and each Trustee to determine whether each Trustee is independent under all applicable requirements. That review includes a determination of whether there are any material relationships between us and the Trustee which, in the opinion of the Board, adversely affect the Trustee’s ability to exercise independent judgment as a trustee. The Board also considers independence on an ongoing basis throughout the year if there are any changes in circumstances that could impact a Trustee’s independence.
The Board, on recommendation of the Nominating andOur Corporate Governance Committee, and after considering all relevant facts and circumstances, determined in each of February 2015 and February 2016 that, except for Mr. Wood, the Trust’s Chief Executive Officer, each Trustee then serving on the Board satisfied all applicable requirements to be considered independent. In making that determination, the Board concludedGuidelines include a standard that a Trustee’s position as a director of a company with which we do business does not constitute a material relationship so long as payments made by that company do not account for more than five percent (5%) of our gross revenues or more than ten percent (10%) of the gross revenues of that company. This standard is set forth in our
The Board, on recommendation of the Nominating and Corporate Governance Guidelines. Further, the Board has concluded that except for Mr. Wood, who is an employee of the Trust, there are no relationships, material or otherwise, between usCommittee, considered all relevant facts and any of the Trustees except as described below. All of these relationships were considered by the Board in making its determinationcircumstances and determined that all Trustees other than Mr. Wood, our Chief Executive Officer, are independent. The specific relationships considered byindependent under the standards of the NYSE, the SEC, our Corporate Governance Guidelines and applicable law for Board and Committee Service. In making that determination, the Board in
making its independence determinations were the following, which includes all oftook into account those relationships between us and our Trustees described in the “Certain Relationships and Related Transactions” section below:
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Board of Trustees and Board Committees
The Board of Trustees discharges its responsibilities through regularly scheduled meetings as well as through telephonic meetings, action by written consent and other communications with management as appropriate. During 2015, the Board of Trustees held five meetings. The non-management Trustees (all of whom are independent) held four executive sessions at the meetings that were attended by all non-management Trustees. Mr. Vassalluzzo, the Non-Executive Chairman of the Board, presided over all Board meetings as well as all executive sessions of the non-management Trustees during 2015. The Non-Executive Chairman of the Board is expected to preside over all future Board meetings and executive sessions of non-management Trustees.
Since 2003, we have operated under a governance structure where the Chairman of the Board and Chief Executive Officer are separate positions held by different individuals. The Board continues to believe that this structure is the best structure for us. Having the Board operate under the leadership and direction of someone independent from management provides the Board with the most appropriate mechanism to fulfill its oversight responsibilities and hold management accountable for the performance of the Trust. It also allows our Chief Executive Officer to focus his time on running our day-to-day business. The Board believes that one of the most important attributes for the Board is independence from management and that belief has been reflected in the separation of the chairman and CEO roles as well as in our Corporate Governance Guidelines which permit no more than one member of the Board to be a non-independent trustee.
Each of the Trustees attended 100% of all meetings of the Board and the Board committees on which each Trustee served during 2015. Our Corporate Governance Guidelines provide that all Trustees are expected to attend all meetings of the Board and the Board committees on which he or she serves as well as the Annual Meeting of Shareholders. All Trustees attended our 2015 Annual Meeting of Shareholders.
The Board has three standing committees which are the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Each committee operates under a written charter which is available in the Investors section of our website atwww.federalrealty.com. Each member of these committees meets, and throughout 2015 met, the independence, experiencebelow and, with respect to Mr. Bortz, periodic use of Pebblebrook hotels for accommodations for conferences and business trips for various employees and, with respect to Mr. Vassalluzzo, five leases between Office Depot, Inc. and its wholly owned subsidiary, Office Max and the Audit Committee, the financial literacy requirements, of the NYSE, the SEC and our Corporate Governance Guidelines. The membership, primary functions and number of meetings during 2015 for each of these standing committees are described below:Trust.
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Identifying individuals to stand for election as TrusteesIDENTIFYING INDIVIDUALS TO STAND FOR ELECTION AS TRUSTEES
The Nominating and Corporate Governance Committee is responsible for identifying individuals to stand for election as Trustees. It beginsThe Committee considers whether the process by determining whether there are any changes that should be made to the Board in terms of size or skill sets in order for the Board to appropriately perform its responsibilities. If the Committee concludes that no changes are needed, it first reviews eachcurrent trustees have all of the incumbent Trustees whose terms are expiringrequisite skills and perspectives necessary to determine whether those individuals should be nominated for reelection toeffectively carry out the Board.Board’s oversight function going forward. If the Committee determines that any changes are needed to the size or composition of the Board, should be expanded or that the incumbent Trustees whose terms are expiring should not be nominated for reelection and those positions need to be filled, the Committee will seeksolicits recommendations on new members from other Board members for possible candidates. Ifand if no appropriate candidates are identified,
the Committee will consider retaining a search firm. Recommendations provided by shareholders will also be considered and will be evaluated on the same basis as all other Board candidates.
The primary factors included in the Committee’s determination are whether theIn considering any individual possesses skills which are desirableto stand for the effective oversight of the Trust’s operation and complementary to the skills of the other Trustees. If the individual is an incumbent Trustee,election as a trustee, the Committee also considers whether he or she is performing his or her responsibilities as a Trustee welltakes into account the overall mix of knowledge, experience, skills and adding value toexpertise needed on the Board, the performance of incumbent trustees, and its operationsdiversity characteristics such as reflected on the most recent individual Trustee evaluations.geography, gender and ethnicity. All candidates for election to the Board should, at a minimum, possess public company, real estate, retail and/or other financial experience and have a history of honesty, integrity and fair dealing with third parties. The Board has no specific policy on diversity but believes that Board membership should reflect diversity in a broad sense, including, among other things, geography, gender and ethnicity. In addition, the Board specifically reviews and considers the backgrounds, experience and competencies of each Trustee nominee and Trustee to ensure that the Board reflects as a whole an appropriate diversity of knowledge, experience, skill and expertise required to enable the Board to perform its responsibilities in managing and directing our business efficiently and effectively.
Once a candidate is identified who has not previously served on the Board, the Committee arranges meetings between the candidate andmeets with other Board members as well as our senior management. Themanagement and the Committee also undertakes whatever investigative and due diligence activities it deems necessary to verify the candidate’s credentials, andto determine whether the candidate would be a positive contributor to the operations of the Board and a good representative of our shareholders. Criticalshareholders and to this whole process isconfirm that the Committee’s determination that any candidate presented to the shareholders for election to the Board satisfies all of the independence requirements imposed by the NYSE, the SEC, our Corporate Governance Guidelines and other applicable rules and regulations.
Any shareholderShareholders may propose a candidate to be nominated for election to the Board by following the procedures outlined in Article II, Section 13 of our Bylaws. Any shareholder wishingShareholders wanting to present a candidate for consideration as a Trustee for election at the Trust’s 20172018 Annual Meeting of Shareholders must provide the Committee with the name of the shareholder proposing the candidate as well as contact information for that shareholder, the name of the individual proposed for election, a resume or similar summary that includes the individual’s qualifications and such other factual information that would be necessary or helpful for the Committee to evaluate the individual. The information should be sent to the Committee, in care of the Trust’s Secretary, by no later than November 25, 2016 so that the Secretary can forward it to the Committee chair for consideration. The Committee will not have sufficient time to evaluate any candidate submitted after that date.23, 2017. A copy of our Bylaws may be obtained by sending a written request to Investor Relations at 1626 East Jefferson Street, Rockville, MD 20852.
Risk Management OversightBOARD OF TRUSTEES AND BOARD COMMITTEES
Board of Trustees:
The Board of Trustees discharges its responsibilities through regularly scheduled meetings as well as through telephonic meetings, action by written consent and other communications with management. During 2016, the Board of Trustees held four meetings and thenon-management, independent Trustees held four executive sessions. Mr. Vassalluzzo, theNon-Executive Chairman of the Board, presided over all Board meetings as well as all executive sessions of thenon-management Trustees during 2016. TheNon-Executive Chairman of the Board is expected to preside over all future Board meetings and executive sessions ofnon-management Trustees.
Our Board is directed by aNon-Executive Chairman of the Board. The Board believes that having its own leadership separate from our Chief Executive Officer is the best structure for the Trust because it provides the
Board with an appropriate mechanism to fulfill its oversight responsibilities and hold management accountable for the performance of the Trust and also allows our Chief Executive Officer to focus his time on running ourday-to-day business.
Each of the Trustees attended 100% of all meetings of the Board and the Board committees on which each Trustee served during 2016. Our Corporate Governance Guidelines provide that all Trustees are expected to attend all meetings of the Board and the Board committees on which he or she serves as well as the Annual Meeting of Shareholders. All Trustees attended our 2016 Annual Meeting of Shareholders.
Board Committees:
The Board has three standing committees which are the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Each committee operates under a written charter which is available in the Investors section of our website atwww.federalrealty.com. Each member of these committees meets the independence, experience and, with respect to the Audit Committee, the financial literacy requirements, of the NYSE, the SEC and our Corporate Governance Guidelines. The membership, primary functions and number of meetings during 2016 for each of these standing committees are described below:
| Committee Members(1) | Primary Responsibilities | Number of Meetings During 2016 | ||
| Audit Committee: | ||||
Gail P. Steinel* Jon E. Bortz David W. Faeder** Warren M. Thompson | • Selecting the independent registered public accounting firm and approving and overseeing its work; • Overseeing our financial reporting, including reviewing results with management and the independent registered public accounting firm; and • Overseeing our internal systems of accounting and controls • Overseeing risk management, including cybersecurity risk | 4 | ||
Compensation Committee: | ||||
David W. Faeder* Kristin Gamble Gail P. Steinel Joseph Vassalluzzo | • Reviewing and recommending compensation for our senior officers; • Administering our Amended and Restated 2001 Long-Term Incentive Plan (“2001 Plan”) and our 2010 Performance Incentive Plan (“2010 Plan”), including making awards under the 2010 Plan; and • Administering other benefit programs of the Trust | 3 | ||
Nominating and Corporate Governance Committee: | ||||
Warren M. Thompson* Jon E. Bortz Kristin Gamble Joseph S. Vassalluzzo | • Recommending individuals to stand for election to the Board; • Making recommendations regarding committee memberships; and • Overseeing our corporate governance policies and procedures, including Board and Trustee evaluations | 4 | ||
| * | Denotes current chairperson of the committee |
| ** | Denotes our audit committee financial expert. |
| (1) | When Ms. Gamble’s service as a Trustee ends on May 2, 2017, Ms. Holland will replace Ms. Gamble as a member of the Compensation Committee and the Nominating and Corporate Governance Committee. |
Although the Board has delegated to the Audit Committee responsibility for overseeing our risks and exposures on an ongoing basis, the entire Board regularly receives updates from management on the continued viability of our business plan, market conditions, capital position, and our business results and specifically reviews potential risks from time to time. The Board reviews that information together with our quarterly and annual financial statements and operating results and short and long-term business prospects to assess the risks that we may encounter and to establish appropriate direction to avoid or minimize the potential impact of the identified risks. Some of the details that are discussed as part of the Board’s review of potential risks facing us include, without limitation: (a) the impact of market conditions on our business; (b) operational risks such as the ability of our tenants to be successful and the ability to grow the company through increasing rents and redeveloping our properties; (c) liquidity and credit risks, including our ability to access capital to run and grow our business and our overall cost of capital and the impact on our profitability; (d) investment risks from acquisitions and our development and redevelopment projects; (e) regulatory risks that may impact our profitability such as environmental laws and regulations, the Americans with Disabilities Act of 1990 and various
other federal, state and local laws; (f) REIT risks such as our failure to qualify as a REIT for federal income tax purposes; (g) cybersecurity risks; and (h) general risks inherent in the real estate industry.
As part of the Board’s risk oversight function, our Compensation Committee reviewed in February 2016 our compensation policies and practices for all of our employees to determine whether any of such policies or programs created any risk that could have a material adverse impact on us. Approximately 97% of our employees participate in compensation programs tied to either corporate performance or regional performance necessary to achieve corporate objectives and the Committee believes that those programs do not encourage excessive and unnecessary risk taking. The Committee focused its review on the approximately 3% of our employees (8 individuals) who are compensated on a full or partial commission/bonus basis where significant portions of their annual compensation is driven by completing leasing transactions or closing acquisitions. As part of that review, the Committee reviewed the internal approval processes of the Trust and determined that none of the individuals who are compensated on a transactional commission/bonus basis can complete any leasing or acquisition transaction without getting approval from the Board and/or one or more members of senior management whose compensation is tied to achieving corporate objectives.
Trustee CompensationTRUSTEE COMPENSATION
TheNon-employee Trustees received the following fees for their service on the Board in 2015:2016:
Annual Retainer for Non-Employee Trustees | $ | 175,000 | $ | 175,000 | ||||
Annual Retainer for Non-Executive Chairman | $ | 250,000 | $ | 250,000 | ||||
Annual Fee for Audit Committee Chairman | $ | 20,000 | $ | 20,000 | ||||
Annual Fee for Compensation Committee Chairman | $ | 10,000 | $ | 10,000 | ||||
Annual Fee for Nominating Committee Chairman | $ | 10,000 | $ | 10,000 |
Each non-employee Trustee and the Non-Executive Chairman of the BoardThe annual retainers for our Trustees are paid sixty percent (60%) of his/her annual retainer in the form of Shares. All Shares and forty percent (40%) in cash and all chair fees are paid as part of the annual retainer vested immediately upon issuance.in cash. The equity portion of the annual retainer for 20152016 was paid in Shares on January 4, 2016. The3, 2017 with the number of Shares actually received by each Trustee on January 4, 2016 was determined by dividing the amount of the annual retainer to be paid in Shares by $146.10,$142.11, the closing price of our stockShares on the NYSE on December 31, 2015,30, 2016, the last business day prior to the date the Shares were issued. The remainder of the annual retainer as well as the annual fees paid to the Chairs of the Audit, Compensation and Nominating and Corporate Governance Committees were paid in cash. Each Trustee is required to hold at all times an amount of Shares valued at least at five times the amount of the cash portion of the annual retainer. As of December 31, 2015,2016, all Trustees then serving on the Board complied with the required level of stock ownership.
In addition to the annual retainer described above, Mr. Vassalluzzo receives administrative support for both Trust business and personal use from our regional office in Wynnewood, Pennsylvania. Except for the annual fee for serving as a Trustee, the annual fee for serving as the chair of a committee and the use of administrative support made available to Mr. Vassalluzzo, all as described above, thereThere were no additional fees paid or services provided to any Trustee including the Non-Executive Chairman, for service on any of the Board committees or for attendance at any Board or committee meetings.meetings other than those described above.
Total compensation awarded to Trustees for service in 20152016 was as follows:
| 2015 TRUSTEE COMPENSATION TABLE | ||||||||||||||||||||||||||||
| Name | Fees Earned or Paid in Cash | Stock Awards | All Other Compensation | Total | Fees Earned or Paid in Cash | All Other Compensation | Total | |||||||||||||||||||||
| ($) | ($) (1)(2) | ($) | ($) | |||||||||||||||||||||||||
| (1) | ($)(2)(3) | ($) (4) | ($) | |||||||||||||||||||||||||
Jon E. Bortz | $ | 70,000 | $ | 105,000 | $ | — | $ | 175,000 | $ | 175,000 | $ | — | $ | 175,000 | ||||||||||||||
David W. Faeder | $ | 80,000 | $ | 105,000 | $ | — | $ | 185,000 | $ | 185,000 | $ | — | $ | 185,000 | ||||||||||||||
Kristin Gamble | $ | 70,000 | $ | 105,000 | $ | — | $ | 175,000 | $ | 175,000 | $ | — | $ | 175,000 | ||||||||||||||
Gail P. Steinel | $ | 90,000 | $ | 105,000 | $ | — | $ | 195,000 | $ | 195,000 | $ | — | $ | 195,000 | ||||||||||||||
Warren M. Thompson | $ | 80,000 | $ | 105,000 | $ | — | $ | 185,000 | $ | 185,000 | $ | — | $ | 185,000 | ||||||||||||||
Joseph S. Vassalluzzo | $ | 100,000 | $ | 150,000 | $ | 6,975 | $ | 256,975 | $ | 250,000 | $ | 7,378 | $ | 257,378 | ||||||||||||||
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Total | $ | 490,000 | $ | 675,000 | $ | 6,975 | $ | 1,171,975 | $ | 1,165,000 | $ | 7,378 | $ | 1,172,378 | ||||||||||||||
| (1) |
| (2) | For each Trustee other than Mr. Vassalluzzo, $105,000 of this amount was paid in Shares and for Mr. Vassalluzzo, $150,000 of this amount was paid in Shares. |
| (3) | As of December 31, |
| The amount in the “All Other Compensation” column represents our estimated value of the administrative services we made available to Mr. |
Communications withFor 2017, the annual retainer fornon-employee Trustees will be $190,000 and for ourNon-Executive Chairman of the Board will be $265,000. No other changes were made to any Trustee compensation for 2017.
Any shareholder of the Trust or any other interested party may communicate with the Board as a whole, thenon-management Trustees of the Board as a group, theNon-Executive Chairman of the Board, and/or any individual Trustee by sending the communication to the Trust’s corporate offices at 1626 East Jefferson Street, Rockville, MD 20852 in care of the Trust’s Secretary. All such communication should identify the party to whom it is being sent, and any communication which indicates it is for the Board of Trustees or fails to identify a particular Trustee will be deemed to be a communication intended for the Trust’sNon-Executive Chairman of the Board. The Trust’s Secretary will promptly forward to the appropriate Trustee all communications she receives for the Board or any individual Trustee which relate to the Trust’s business, operations, financial condition, management, employees or similar matters. The Trust’s Secretary will not forward to any Trustee any advertising, solicitation or similar materials.
Other Corporate DocumentsOTHER CORPORATE DOCUMENTS
The Board of Trustees has adopted a Code of Ethics for senior financial officers as well as a Code of Business Conduct that applies to all of our Trustees and employees. In addition, the Board operates under Corporate Governance Guidelines. The Code of Ethics for our senior financial officers, our Code of Business Conduct and our Corporate Governance Guidelines are available in the Investors section of our website atwww.federalrealty.com.
ELECTION OF TRUSTEES
Our Board of Trustees has seven Trustees. The Board, on recommendation of the Nominating Committee, approved the nomination of the following individuals, all of whom are currently serving on the Board, for election as trustees to hold office until the 2017 Annual Meeting of Shareholders and until their successors have been duly elected and qualified:
| Name | Age | Position | Trustee Since | |||||||
| Jon E. Bortz | 59 | Independent Trustee | 2005 | |||||||
| David W. Faeder | 59 | Independent Trustee | 2003 | |||||||
| Kristin Gamble | 70 | Independent Trustee | 1995 | |||||||
| Gail P. Steinel | 59 | Independent Trustee | 2006 | |||||||
| Warren M. Thompson | 56 | Independent Trustee | 2007 | |||||||
| Joseph S. Vassalluzzo | 68 | Independent Trustee Non-Executive Chairman of the Board | 2002 | |||||||
| Donald C. Wood | 55 | Non-Independent Trustee President and Chief Executive Officer of the Trust | 2003 | |||||||
In connection with reviewing nominees to stand for election at the 2016 Annual Meeting of Shareholders, the Nominating Committee considered the following qualifications for each nominee:
Jon E. Bortz, President, Chief Executive Officer and Chairman of the Board of Pebblebrook Hotel Trust, a REIT that acquires and invests in upper upscale hotels in large US cities (from 2009 to the present); Chief Executive Officer and a Trustee (from 1998 to 2009), President (from 1998 to 2008) and Chairman of the Board (from 2001 to 2009) of LaSalle Hotel Properties, a multi-tenant, multi-operator hotel REIT; and various real estate related positions with Jones Lang LaSalle (from 1981 to 1998). Mr. Bortz brings to the Board public company, REIT and real estate experience. His experience as chief executive officer of LaSalle Hotel Properties and Pebblebrook Hotel Trust provide a valuable perspective for running a public real estate company while his real estate experience at Jones Lang LaSalle provides fundamental real estate experience critical to our core business.
David W. Faeder, Managing Partner of Fountain Square Properties, a diversified real estate company, since 2003; Vice Chairman (from 2000 to 2003), President (from 1997 to 2000) and Executive Vice President and Chief Financial Officer (from 1993 to 1997) of Sunrise Senior Living, Inc., a provider of senior living services in the United States, United Kingdom and Canada; and prior to that time, Vice President of Credit Suisse First Boston (formerly First Boston Corporation) and Morgan Stanley and Company, Inc. specializing in real estatetransactions. Director of Arlington Asset Investment Corp., a company that acquires and holds mortgage-related and other assets, including residential mortgage-backed securities issued by U.S. government agencies or guaranteed as to principal and U.S. government agencies or U.S. government-sponsored entities and mortgage-backed securities issued by private organizations. Mr. Faeder is a valuable member of the Board because of his public company and accounting experience, having previously served as the chief financial officer of Sunrise Senior Living, and his real estate investment experience from his time as a private real estate investor.
Kristin Gamble, Sr. Managing Director of American Capital Management, Inc., an investment management organization since January 2016. President of Flood, Gamble Associates, Inc. (from 1984 to 2015), an investment counseling firm, and prior to that time, various management positions with responsibility for investments and investment research with brokerage firms and other financial services companies. Director of Ethan Allen Interiors Inc., a furniture manufacturer and retailer (from 1992 to 2015). Ms. Gamble benefits the Board through her broad financial related experience from an investor perspective, including as President of her own investment counseling company for over 30 years, and before that, as an executive with responsibility for investments and investment research with various brokerage firms and other financial services companies.
Gail P. Steinel, Owner of Executive Advisors (from 2007 to present), which provides consulting services and leadership seminars to companies. Executive Vice President with BearingPoint, Inc. (from 2002 to 2007), a management and technology consulting firm that provides application services, technology solutions and managed services to companies and government organizations with responsibility for overseeing the global commercial services business unit; global managing partner and a founding member of Arthur Andersen’s business consulting practice (from 1984 to 2002). Director of MTS Systems Corporation, a provider of mechanical test systems, material testing, fatigue testing and tensile testing equipment as well as motion simulation systems and calibration services. Ms. Steinel has over 25 years of auditing and consulting experience that provides the Board with a helpful perspective on managing risk and systems operations.
Warren M. Thompson, President and Chairman of Thompson Hospitality Corporation, a food service company that owns and operates restaurants and contract food services, since founding the company in October 1992. Mr. Thompson is the president, chairman and founder of his own private food service company, Thompson Hospitality Corporation since 1992. Mr. Thompson’s experience running restaurants owned by Thompson Hospitality provides the Board and management with a unique perspective that is shared by a large percentage of the Trust’s retail tenants.
Joseph S. Vassalluzzo, Non-Executive Chairman of the Board of Trustees since February 2006; Vice Chairman of Staples, Inc. (from 2000 to 2005), a retailer specializing in home, office, and computer products, with responsibility for overseeing domestic and international growth in its retail and commercial operations; various other officer positions with Staples’ and Staples Realty & Development, a subsidiary of Staples, Inc. (from 1997 to 2000); Director of Office Depot, Inc., a global supplier of office products and services; Director of Life Time Fitness, Inc., an operator of distinctive and large sports, athletic, fitness and family recreation centers (from 2006 to 2015); Director of iParty Corp., a premier multi-channel party supply and party planning company (from 2004 to 2013). Mr. Vassalluzzo’s extensive background in retail and real estate as a result of having served as an executive with Staples, expanding the real estate owned by Staples Realty & Development, a subsidiary of Staples, Inc. for over 10 years and serving on the boards of a number of retailers provides the board and management with retail and retail real estate expertise that is essential to our core business.
Donald C. Wood, President and Chief Executive Officer of the Trust since January 2003; prior to that time, various officer positions with the Trust, including President and Chief Operating Officer (from 2001 to 2003), Senior Vice President and Chief Operating Officer (from 2000 to 2001), Senior Vice President-Chief Operating Officer and Chief Financial Officer (from 1999 to 2000) and Senior Vice President-Treasurer and Chief Financial Officer (from 1998 to 1999); Chairman of the Board of the National Association of Real Estate Investment Trusts (from November 2011 to November 2012); member of the Board of Governors (since 2010) and the Executive Committee (from February 2014 to May 2015) of the International Council of Shopping Centers; Director of Post Properties, Inc., a developer and operator of upscale multifamily communities in the United States. Mr. Wood has been employed by the Trust for over seventeen years and serves on the Board as the sole non-independent Trustee. His tenure with the Trust and his responsibilities as chief executive officer provides the Board with familiarity and details on all aspects of the operations of the Trust.
Vote Required
The affirmative vote of a plurality of votes cast at the Annual Meeting, in person or by proxy, is required for the election of Trustees. If any Trustee does not receive at least 50% of the votes cast at the Annual Meeting, he or she must tender his or her resignation to the Chairman of the Nominating Committee within five (5) business days after certification of the vote. The Nominating Committee will promptly consider the resignation and make a recommendation to the Board of Trustees. In deciding whether to accept or reject a resignation that has been tendered, the Nominating Committee and the Board will consider such factors as they deem appropriate and relevant which may include, among others: (a) the stated reasons why votes were withheld from the Trustee and whether those reasons can be cured; (b) the Trustee’s length of service, qualifications and contributions as a Trustee; (c) listing requirements of the NYSE, rules and regulations of the SEC and other applicable rules and regulations; (d) our Corporate Governance Guidelines; and (e) such other factors as the Nominating Committee
or the Board deems appropriate. Any rejection of a resignation may (but does not have to) be conditioned on curing the underlying reason for the withheld votes. The Board will take action on any resignation no later than sixty (60) days after the certification of the vote, and will disclose the action taken with a full explanation of the process used by the Board and the reason for its decision in a Form 8-K filed with the SEC within four (4) business days after the Board’s decision. If a Trustee’s resignation is accepted by the Board of Trustees, then the Board of Trustees may fill the resulting vacancy pursuant to our Bylaws. The Trustee who tenders his or her resignation will not participate in the recommendation of the Nominating Committee or the decision of the Board.
If you are a “registered” shareholder who elects to receive materials by mail and you sign and return but fail to give any voting instructions on your proxy card on this matter, the proxies identified on the proxy card will vote FOR the election of the named individuals. An abstention or broker non-vote will have no effect on the outcome of the vote on this proposal. You are entitled to cast one vote per Share for each of the seven named individuals. Proxies may not be voted for more than seven individuals.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE SEVEN NOMINEES FOR TRUSTEE.
The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Trust filing under the Securities Act of 1933 or the Exchange Act, except to the extent the Trust specifically incorporates this Report by reference therein.
Our role as the Audit Committee is to oversee the financial reporting process on behalf of the Board, including oversight of the Trust’s management, internal auditor and independent registered public accounting firm in their performance of the following functions:
Management is responsible for the financial reporting process, including the system of internal controls, for the preparation of consolidated financial statements in accordance with generally accepted accounting principles generally accepted in the United States (“GAAP”) and for management’s report on internal control over financial reporting. Thereporting
Grant Thornton, LLP (“GT”), the Trust’s independent registered public accounting firm, Grant Thornton LLP (“GT”), is responsible for auditing the consolidated financial statements and expressing an opinion on the financial statements and the effectiveness of internal control over financial reporting. The Audit Committee overseesreporting
PricewaterhouseCoopers LLP (“PwC”) , the financial reporting process on behalfTrust’s internal audit firm, is responsible for the Trust’s internal audit function including oversight of the Board. In addition,ongoing testing of the Audit Committee oversees the workeffectiveness of our internal audit function, which is performed by PricewaterhouseCoopers LLP (“PwC”).controls
The Audit Committee meets at least quarterly and at such other times as it deems necessary or appropriate to carry out its responsibilities.necessary. The Audit Committee held four meetings in 2016 and met fourthree times during 2015 and three of these quarterly meetings included executive sessions with GT in executive session without management being present and met with PwC three times including once without management being present. In the course of fulfilling its oversight responsibilities,
During 2016, the Audit Committee metCommittee:
Reviewed with both management and GT, to reviewindividually and discusscollectively, all annual and quarterly financial statements and quarterly operating results prior to their issuance. Management has advised the Audit Committee that all financial statements were prepared in accordance with GAAP. The Audit Committee also discussedGAAP;
Discussed with GT matters required to be discussed pursuant to applicable Public Company Accounting Oversight Board audit standards, including the reasonableness of judgments and the clarity and completeness of financial disclosures.disclosures;
In addition,
Reviewed and discussed with GT and PwC, individually and collectively, the Audit Committee discussedongoing assessment and testing of the Trust’s systems of internal controls and procedures. As part of its 2016 audit of our financial statements, GT independently reviewed our system of internal controls and procedures and issued an unqualified report thereon;
Discussed with GT matters relating to itsGT’s independence from the Trust and has received written confirmation from GT the written disclosures and letter required by applicable requirementsthat GT is not aware of any relationships, that in their professional judgment may impair their independence; and;
Monitored the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with GT its independence.
The Audit Committee continually monitors the non-audit services provided by GT. During 2015, the Audit Committee limited non-auditGT to ensure that performance of such services primarily to income tax return preparation for us and our subsidiaries and the
provision of advice on the tax impacts and structuring of acquisition and other property related transactions. GT also performed the 2015 audit of the financial statements of two of our joint ventures. The Audit Committee approved GT’s performing these audits only after determining that it wouldwill not adversely impact GT’s independence.
The Audit Committee engaged PwC to provide our internal That included approval of thenon-audit services for 2017 described in the “Ratification of Independent Registered Public Accounting Firm” section below and an audit function in 2012 and continued to oversee PwC’s ongoing testing of the effectivenessfor one of our internal controls during 2015. The findings of PwC were reported toconsolidated properties with partners.
Based on the Audit Committee three times during 2015, and the Audit Committee met in executive session with PwC without management being present once during 2015. GT, as part of its 2015 audit of our financial statements, independently reviewed our internal controls and concluded that there were no material weaknesses.
On the basis of theCommittee’s reviews and discussions the Audit Committee has had with GT, PwC and management, the Audit Committee recommended to the Board of Trustees that the Board approve the inclusion of our audited financial statements in our Annual Report on Form10-K for the fiscal year ended December 31, 20152016 for filing with the SEC.
Submitted by:
Gail P. Steinel, Chairperson
Jon E. Bortz
David W. Faeder
Warren M. Thompson
RELATIONSHIP WITHINFORMATION ABOUT OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The following table sets forth the amount of fees billed or expected to be billed by GT has served as our independent registered public accounting firm for the year 2015. The Audit Committee approves in advance all fees paid toyears ended December 31, 2016 and services provided by GT. In addition, the Audit Committee has considered those services provided by GT and has determined that such services are compatible with maintaining the independence of GT. During 2015 and 2014, we retained GT to provide services in the following categories and amounts:2015:
| 2015 | 2014 | 2016 | 2015 | |||||||||||||
Audit Fees(1) | $ | 654,051 | $ | 591,951 | $ | 652,808 | $ | 654,051 | ||||||||
Audit-Related Fees(2) | 59,063 | 26,763 | 61,950 | 59,063 | ||||||||||||
Tax Fees(3) | 287,854 | 238,205 | 255,791 | 287,854 | ||||||||||||
Other | 0 | 0 | 0 | 0 | ||||||||||||
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Total | $ | 1,000,968 | $ | 856,919 | $ | 970,549 | $ | 1,000,968 | ||||||||
| (1) | Audit fees include all fees and expenses for services in connection with: (a) the audit of our financial statements included in our annual reports on Form10-K; (b) Sarbanes-Oxley Section 404 relating to our annual audit; (c) the review of the financial statements included in our quarterly reports on Form10-Q; and (d) consents and comfort letters issued in connection with debt offerings and common |
| (2) | Audit-related fees |
| (3) | $ |
The Audit Committeepre-approved all services provided by GT in 2016.
PROPOSAL 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee is asking shareholders to ratify its selection of the Board of Trustees has retained GT as our independent registered public accounting firm for the fiscal year ending December 31, 2016 and is asking the shareholders to ratify that selection.2017. Our organizational documents do not require ratification of the selection of our independent registered public accounting firm; however, we are seeking ratification because we believe that it is a matter of good corporate practice to do so. If the selection of GT is not ratified, the Audit Committee may reconsider whether to retain GT. Even if the selection of GT is ratified, the Audit Committee may change the appointment of GT at any time if it determines such a change would be in the best interests of the Trust and our shareholders.
The Board recommends a vote FOR this proposal.
A representative of GT will be present at the Annual Meeting and will have the opportunity to make a statement if they so desire and answer appropriate questions from shareholders.
The Audit Committee believes that GT is qualified to serve as our independent registered public accounting firm. GT is familiar with our affairs and financial procedures having served as our independent accountant since June 2002. GT2002 and is registered with the Public Company Accounting Oversight Board. Pursuant to
As required by its charter, the Audit Committee must pre-approve all audit and non-audit services provided by GT. For 2016, the Audit Committee to date has approved GT providing the followingnon-audit services: (a) services for 2017, the scope and amount of which has remained unchanged for the last few years:
tax planning and other consultation for purposes of structuring acquisitions, dispositions, joint ventures and other investment or financing opportunities as well as consultation associated with financial reporting matters provided that the aggregate amount paidup to Grant Thornton for such services does not exceeda maximum of $100,000; (b)
issuance of comfort letters and consents in connection with capital markets transactions approved in accordance with the Trust’s policies and procedures provided that the aggregate amount paidup to Grant Thornton for such services does not exceed $125,000; (c) a maximum of $150,000;
issuance of audit opinions related to acquisition audits required under Rule3-14 of RegulationS-X provided that the aggregate amount paid up to Grant Thornton for such services does not exceed $75,000;up to a maximum of $125,000; and (d) a limited review of
agreed upon procedures covering the Trust’s letter to the State of California EPA provided that the aggregate amount paidDepartment of Environmental Quality up to Grant Thorntonup to a maximum of $3,750.
Audit Committee approval is required for suchadditionalnon-audit services does not exceed $3,400. The scope and amount of or fornon-audit services that GT can perform in 2016 has remained relatively unchangedexceed the last few years.
Once the pre-approved dollar limit for the applicable non-audit service has been reached, no additional services of that type can be provided by GT without further approval by the Audit Committee. The Audit Committee has concluded that GT’s providing these permissible non-audit services up to the aggregate pre-approved amounts would not compromise GT’s independence. The Audit Committee may approve GT providing additional non-audit services or services in excess of the amounts specified above if it determines that it is in our best interest and that GT’s independence would not be compromised. All audit and non-audit services provided to the Trust by GT for the 2015 fiscal year are described in the “Relationship With Independent Registered Public Accounting Firm” section above.
In addition to the foregoing non-audit services, the Audit Committee also approved GT performing audits of the financial statements for properties owned in two of our joint ventures for the fiscal year ending December 31, 2016. The Audit Committee approved GT performing these audits using the same criteria it uses for approving non-audit services.limits.
Vote Required
The affirmative vote of a majority of votes cast at the Annual Meeting, in person or by proxy, is required to approve the proposal to ratify the Audit Committee’s selection of GT as our independent registered public accounting firm for 2016.this proposal. If you are a “registered” shareholder who elects to receive materials by mail and you sign and return but fail to give any voting instructions on your proxy card on this matter, the proxies identified on the proxy card will vote FOR this proposal. An “abstention” or broker “non-vote”“non-vote” will have no effect on the outcome of the vote on this proposal, however, if you fail to give instructions to your broker, your broker may have authority to vote the shares for this proposal.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY THE AUDIT COMMITTEE’S SELECTION OF GT AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2016.EXECUTIVE OFFICER AND COMPENSATION INFORMATION
Our current “named executive officers” are:
| Name | Age | Position | ||||
Donald C. Wood | President and Chief Executive Officer | |||||
| Executive Vice President—Chief Financial Officer and Treasurer | |||||
Dawn M. Becker | Executive Vice President—General Counsel and Secretary | |||||
| (1) | Mr. Guglielmone became the Trust’s Executive Vice President—Chief Financial Officer and Treasurer on August 15, 2016. Mr. James M. Taylor, Jr. served as the Trust’s Executive Vice President—Chief Financial Officer and Treasurer from January 1, 2016 through May 19, 2016. |
Donald C. Wood, Information for Mr. Wood is provided above in “Item“Proposal 1—Election of Trustees.”
James M. Taylor, Jr.Daniel Guglielmone,Executive Vice President-ChiefPresident—Chief Financial Officer and Treasurer of the Trust (since August 2012)2016) with responsibility for overseeing the Trust’s capital markets, financial reporting, investor relations, corporate communications information technology and East Coast acquisitions; ExecutiveSenior Vice President-ManagingPresident—Acquisitions & Capital Markets of Vornado Realty Trust (2003—2016); Director Southeast Core Operations of the Trust (since June 2015) with responsibility for overseeing the southeast core shopping center operations and asset management functions; Executive Vice President of the Trust from July 30, 2012 until August 14, 2012; and a senior managing director in the real estate investment bankingand lodging group of Salomon Smith Barney / Citigroup (1993—2003) and the retail division of Eastdil Secured and predecessors Wachovia Securities and First Union Securities (1998Douglas Elliman Commercial Real Estate (1989 to 2012). Prior to his career in investment banking, Mr. Taylor practiced corporate and securities law at Hunton & Williams (1994 to 1998) and worked as a senior accountant for Price Waterhouse (1988 to 1991)1992).
Dawn M. Becker, Executive Vice President-GeneralPresident—General Counsel and Secretary of the Trust (since April 2002) with responsibility for overseeing various of the Trust’s corporate functions including the Trust’s Legal, Department; Executive Vice President-Managing Director Mixed Use Operations of the Trust (since June 2015) with responsibility for overseeing the Trust’s mixed use operationsHuman Resources and asset management functionsInformation Technology Departments; and prior to that time, various officer positions with the Trust, including Executive Vice President – President—Managing Director Mixed Use Operations (2015 to 2016), Executive Vice President—Chief Operating Officer (2010 to 2015) and Vice President—Real Estate and Finance Counsel (2000 to 2002).
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation, Discussion and Analysis (“CD&A”) describes the material components of, and the material factors and considerations behind, the compensation and benefits paid to our named executive officers.officers for 2016 who are:
Donald C. Wood, President and Chief Executive Officer;
Daniel Guglielmone, Executive Vice President—Chief Financial Officer and Treasurer (effective August 15, 2016);
Dawn M. Becker, Executive Vice President—General Counsel and Secretary; and
James M. Taylor, Jr., former Executive Vice President—Chief Financial Officer and Treasurer (January 1—May 19, 2016)
You will be asked in ItemProposal 3 of this proxy statement to provide anon-binding, advisory vote on the compensation of our named executive officers as described in the following sections of this proxy statement. Please keep that in mind as you review the CD&A, summary compensation table, the supplemental tables and narrative disclosures that follow.
At our 20152016 annual shareholder meeting, more than 98%approximately 94% of the Shares votedvotes cast at the meeting supported our advisory vote on compensation for our named executive officers. We believe this highstrong level of support reflected a high degree of shareholder confidence in our executive compensation programs, and as a result, no changes were made to the compensation programs for our named executive officers in 2015.
Financially, 2015 was another record year of performance that kept us on track with our long-term business plan objectives. Some of the 2015 highlights included:2016.
Revenues:2016 Performance Highlights:
Record level of gross revenues
8.4% greater than 2014
Funds from Operations Available for Common Shareholders (“FFO”). FFO is a metric commonly used by REITs to measure performance:
Record level of FFO per share of $5.32 (excluding the impact of a debt prepayment charge)
7.7% greater than 2014 (both years adjusted to exclude the impact of debt prepayment charges)
Financial: | • Generated more than $800 million of gross revenues—a record level that is 7.7% more than 2015 gross revenues • Grew net income available for common shareholders by $40 million to a record $249 million
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Leasing:
Signed 316 new and renewal leases (1.4 million square feet) for space in which there was a prior tenant
Cash basis rents 17% higher than the prior rent (an additional $6.4 million of rent per year)
Balance Sheet:
Raised $564.7 million of debt and equity capital
Lowered weighted average interest rate on debt to 4.1% and increased weighted average term to 10 years
Acquisitions/Developments:
Acquired $272.7 of new properties which provide immediate cash flow benefit as well as longer-term redevelopment opportunities
Opened The Point, El Segundo, CA, a 115,000 square foot retail and office project adjacent to our Plaza El Segundo property
Broke ground on the next phases of development at Assembly Row, Somerville, MA and Pike & Rose, North Bethesda, MD
Signed a lease for the entirety of our 234,500 square foot office building under construction at Santana Row, San Jose, CA
Dividends:
• Raised $566 million of capital, including the issuance of30-year unsecured notes at an effective interest rate of 3.75%, the lowest in the REIT sector • Increased our | |||
Operational: | • Increased cash basis rents by 13% on 346 new and renewal leases for space where there was a prior tenant; will generate more than $6 million of additional rent per year • Opened Splunk as the tenant in our 234,500 square foot office building at Santana Row | ||
Strategic: | • Acquired our partner’s 70% interest in a six property portfolio • Hired Daniel Guglielmone as our Chief Financial Officer | ||
Environmental/ Social/ Governance: | • Received a 4 Green Star rating from Global Real Estate Sustainability Benchmark and ranked 1st in North America for Health and Wellness • Received Seal of Approval Awards from the Alliance for Workplace Excellence for Overall Excellence (9th consecutive year), Health and Wellness (9th consecutive year) and EcoLeadership (6th consecutive year) • Installed 9 new solar rooftop systems to bring our total count to 19. These 19 solar installations are projected to generate on an annualized basis 12,265 MWH of electricity, offsetting 18.6 million pounds of CO2 |
Shareholder Returns:
Delivered total returns to our shareholders (including reinvestment of dividends) of 116.0% over the past 5 years, 52.5% over the past 3 years and 12.3% over the past 1 year.
With respect to compensation of our named executive officers, the Compensation Committee took the following actions:
Chief Executive Officer—increased Mr. Wood’s target award level under our performance based, long-term equity program to $5 million and based on 2015 performance, exercised discretion permitted under that program to increase his award by approximately 5%. This was the first change of any kind to Mr. Wood’s target compensation since 2010 and the first time in more than 5 years the Committee exercised discretion to increase Mr. Wood’s award under our equity program.
Chief Financial Officer—increased annual base pay for Mr. Taylor to $450,000, the first such increase to his base pay since he joined the Trust in 2012, and based on 2015 performance, exercised discretion permitted under our long-term equity program to increase Mr. Taylor’s award by approximately 4%. This was the first time since Mr. Taylor joined the Trust that the Committee exercised discretion to increase his award under our equity program.
General Counsel—increased annual base pay for Ms. Becker to $450,000, the first such increase to her base pay since 2011.
No other changes were made for 2015 to the compensation of our named executive officers.
The following chart sets forth the target compensation for each of our named executive officers for 2013, 2014 and 2015 and the actual compensation earned by each such officer for those years based on company performance as measured against our performance hurdles for our annual performance bonus plan and our long-term, performance based equity plan.
| 2013 | 2014 | 2015 | ||||||||||||||||||||||||
| NEO | Compensation Component | Target | Actual | Target | Actual | Target | Actual | |||||||||||||||||||
Wood | Base | $ | 850,000 | $ | 850,000 | $ | 850,000 | $ | 850,000 | $ | 850,000 | $ | 850,000 | |||||||||||||
| Annual Performance Bonus(a) | $ | 1,275,000 | $ | 1,540,583 | $ | 1,275,000 | $ | 1,540,583 | $ | 1,275,000 | $ | 1,540,583 | ||||||||||||||
| Long-Term Performance Based Equity(b) | $ | 4,000,000 | $ | 6,000,000 | $ | 4,000,000 | $ | 3,000,000 | $ | 5,000,000 | $ | 7,000,000 | ||||||||||||||
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| Total | $ | 6,125,000 | $ | 8,390,583 | $ | 6,125,000 | $ | 5,390,583 | $ | 7,125,000 | $ | 9,390,583 | ||||||||||||||
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Becker | Base | $ | 425,000 | $ | 425,000 | $ | 425,000 | $ | 425,000 | $ | 450,000 | $ | 450,000 | |||||||||||||
| Annual Performance Bonus(a) | $ | 318,750 | $ | 385,146 | $ | 318,750 | $ | 385,146 | $ | 337,500 | $ | 407,801 | ||||||||||||||
| Long-Term Performance Based Equity(b) | $ | 600,000 | $ | 900,000 | $ | 600,000 | $ | 450,000 | $ | 600,000 | $ | 798,750 | ||||||||||||||
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| Total | $ | 1,343,750 | $ | 1,710,146 | $ | 1,343,750 | $ | 1,260,146 | $ | 1,387,500 | $ | 1,656,551 | ||||||||||||||
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Taylor | Base | $ | 400,000 | $ | 425,000 | $ | 400,000 | $ | 425,000 | $ | 450,000 | $ | 450,000 | |||||||||||||
| Annual Performance Bonus(a) | $ | 300,000 | $ | 362,490 | $ | 300,000 | $ | 362,490 | $ | 337,500 | $ | 407,801 | ||||||||||||||
| Long-Term Performance Based Equity(b) | $ | 750,000 | $ | 900,000 | $ | 750,000 | $ | 450,000 | $ | 750,000 | $ | 798,750 | ||||||||||||||
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| Total | $ | 1,450,000 | $ | 1,687,490 | $ | 1,450,000 | $ | 1,237,490 | $ | 1,537,500 | $ | 1,656,551 | ||||||||||||||
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FFO (Funds From Operations) is a supplemental non-GAAP financial measure of real estate companies’ operating performances. See Appendix A to this proxy statement for additional |
The actual compensation earned by our named executive officers for the annual performance bonus and performance based, long-term equity program as reflected in the chart above differs from the amounts shown in the Summary Compensation Table for the years shown primarily because the chart above reflects those amounts in the performance year in which they were earned and the Summary Compensation Table reflects these amounts in the year in which they were paid. We believe the chart above is helpful because it allows the actual compensation earned in any given year to be understood in the context of the Trust’s financial and other performance for that year.
Compensation Philosophy and Objectives:
OurWe believe in “pay for performance” compensation programs are designedin which a majority of our executives’ compensation is tied to create a compensation package for each named executive officer that is sufficiently competitive to attractcompany success in meeting predetermined performance objectives and retain top-level real estate professionals and to motivate those individualscreating long-term shareholder value. This strategy motivates our executives to achieve superior results for usour annual and longer-term strategic and financial goals, aligns our shareholders. As part ofexecutives with our shareholders and recognizes the executives’ contributions in delivering strong corporate performance. We accomplish this compensation philosophy, we try to provideby providing a strong link between an executive’s total earnings opportunity and both our short-term and long-term performance based ongoals. We set levels of compensation for each executive that are competitive with the achievement of pre-determined financial targetsmarket in order to ensure that we can attract and operating goals and to encourage ourretain high-caliber executives to enhance shareholder value by acting and thinking like shareholders.in the marketplace in which we compete for talent. The key principles guiding our compensation programs and decisions are:
1. Total compensation opportunities must be competitive with the marketplace so that we can attract, retain and motivate talented executives who are necessary for achieving superior results for the Trust; however, the aggregate compensation levels must be reasonable in the context of our overall cost structure and must support our business strategy.
2. The compensation of our named executive officers should include a significant portion that is “at risk” and variable depending on both our short-term financial performance and long-term creation of shareholder value with the largest portion of that “at risk” compensation designed to incentivize the creation of sustainable, long-term shareholder value. The “at risk” portion of 2015 compensation for our named executive officers is comprised of annual performance bonuses under our Annual Bonus Plan and performance based, long-term equity awards under our LTIAP, both of which are earned only if the Trust meets pre-established performance hurdles. As you can see from the chart below, these “at risk” portions of compensation represent a significant percentage of the total compensation for each of our named executive officers—91% for Mr. Wood, 73% for Ms. Becker and 75% for Mr. Taylor.
3. We want our executives to act in the best interest of our shareholders and incentivize that behavior by having a significant portion of their compensation paid in the form of equity and by requiring that they maintain a meaningful ownership position. We require Mr. Wood, as our CEO, to have an equity ownership in the Trust of at least three times his base salary and annual performance bonus and that Ms. Becker and Mr. Taylor each have an equity ownership in the Trust of at least two and one-half times their respective base salary and annual performance bonus. Each of Mr. Wood, Ms. Becker and Mr. Taylor were in compliance with this requirement as of December 31, 2015. We also prohibit all of our officers and Trustees from engaging in any hedging or pledging activities with respect to the Trust’s stock.
4. The amount each executive actually earns out of his or her total compensation opportunity should vary based on the individual’s performance, contribution and overall value to the business. The proportion of an individual’s total compensation that varies with individual and company performance objectives should increase as the individual’s business responsibilities increase.
In crafting our compensation policies and programs, we also consider whether they will encourage excessive or unnecessary risk taking and as described in the “Risk Management Oversight” section, we have concluded that our compensation programs do not do so. We do not currently have any clawback or other compensation recovery policy with respect to compensation that may have been paid on the basis of incorrect financial results. Given the SEC’s pending clawback rule and the expectation that the final rule will be adopted in 2016, the Board elected to wait until the final rulemaking was in place before adopting a clawback policy so that our policy would be in full compliance with SEC requirements.
| Competitive Compensation Levels: | • Total compensation levels competitive with the marketplace • Aggregate compensation levels reasonable in the context of our overall cost structure and that support our business strategy | |
| Significant “At Risk” Compensation: | • Relatively small portion of compensation is guaranteed • Significant portion of compensation varies based on our short-term and long-term performance | |
Variability based on Individual Performance: | • Amount earned by an executive varies based on the individual’s performance and overall contribution and value to the business | |
| Significant Equity Ownership: | • Significant portion of compensation is paid in the form of equity • Named executive officers required to maintain a significant equity ownership position • Prohibition against hedging and pledging our Shares | |
Compensation MethodologyMethodology:
The Compensation Committee of the Board is responsible for approving all compensation for our named executive officers and periodically reviews all elements of compensation to ensure that we remain competitive in the market and that overall compensation, including the means by which payment is made, is aligned with our business objectives, our performance and the interests of our shareholders. The Compensation Committee conducts an annual review of our CEO’s performance and takes those results into consideration when setting his compensation. Our CEO makes recommendationrecommendations for the compensation for our other named executive officers based on his evaluation of their performance and the Compensation Committee has the discretion to accept, reject or modify the CEO’s recommendations.
The total potential compensation for our named executive officers is established based on the scope of theirhis or her individual responsibilities and contributions to our performance taking into account competitive market compensation paid for similar positions. Competitive market compensation for our named executive officers is generally determined by the Compensation Committee members applying their individual understanding, experiences and judgments in the national marketplace of senior level real estate positions and related industry pay in both public and private concerns that may compete for our executives, considering the relative importance of various positions at the Trust given our business plan and organization compared with the business plans of our major competitors. TheIn addition to that judgment and experience, the Compensation Committee also consulted the National Association of Real Estate Investment Trust’s 20142015 and 20152016 Compensation Surveys (“NAREIT Surveys”) to confirm its assessment of appropriate market compensation for our named executive officers, both the information reported for each position by the 121141 real estate investment trusts (“REITs”) that participated in the survey as well as by the approximately 2831 retail focused REITs that participated in the survey. NotThe NAREIT Surveys are limited in their applicability as they do not include private real estate company data nor do they include all REITsREITs. Further, not all REITS that participated in the surveysurveys provided information for each of the named executive officer positions and it is not possible to determine from the NAREIT SurveySurveys which of the participating REITs provided information for which executive officer position. Once the Compensation Committee determines an appropriate level of aggregate compensation for our named executive officers, an individual compensation package is created using a combination of base salary, annual bonus and long-term equity incentives, all in accordance with the compensation philosophy and objectives described earlier.above.
ElementsComponents of Total Compensation and 2016 Performance:
Base salaries are used to compensate the executive for services rendered during the year. Base salaries are set at the beginning of each year and are intended to be competitive with the market and commensurate with the executive’s level of responsibility, experience and sustained individual performance. Base salaries provide retention value and also align the executive with shareholder interests. Generally, we believe that executive base salaries should account for a relatively modest portion of each individual’s total compensation package. Because we start our process with determining an appropriate level of total compensation, we do not target base salaries to any specific level. We did, however, use information in the NAREIT SurveySurveys as a guide to confirm that the base salaries for our named executive officers are within market parameters.
Annual performance bonuses for each of our named executive officers are determined each year in accordance with our Annual Bonus Plan that covers approximately 97%96% of our employees. The Annual Bonus Plan is intended to compensateemployees and compensates individuals for performance during a calendar year. Payment under the Annual Bonus Plan is dependent on: (a) the Trust’s achieving an annual level of FFO per share that is consistent with our business objectives for that year; and (b) the individual’s achieving his/his or her annual performance objectives as subjectively evaluated by the Board with respect to our CEO and by our CEO with respect to each of our other named executive officers. Under our Annual Bonus Plan, the Compensation Committee sets annually a potential bonus payout for each of our named executive officers for achieving various levels of FFO per share for that calendar year. The Compensation Committee also has the ability to decrease the final annual bonus payout toof any of these individualsour executive officers based on theirhis or her performance for the year. Each of our named executive officers (as well as approximately 8584 other employees) has the option to receive up to 25% of the annual bonus in the form of Shares that vest equally over three years. The amount an individual elects to receive in Shares is paid out at 120% of that amount in consideration of the extended vesting. The cash portion of the 2016 annual bonuses paid to our executive officers is reflected in the“Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table in this proxy statement. The Share portion of these annual bonuses will be included in the “Stock Awards” column in the Summary Compensation Table and the Grants of Plan-Based Awards Table in next year’s proxy statement.
The level of FFO per share at which payouts are established is set at
At the beginning of each year, by the Compensation Committee after a thorough reviewestablishes the FFO per share that has to be achieved for our named executive officers and discussion of our budget and investor expectations for that year and considering recommendations of our CEO.other employees to earn an annual performance bonus. The FFO per share levels established by the Compensation Committee are intended to reflect acceptable to exceptional performance in light of our business objectives.objectives for that year and are established by the Compensation Committee after a thorough review and discussion of our budget and investor expectations for that year and after considering recommendations of our CEO. FFO is widely accepted in the REIT industry as an appropriate measurement of operating performance on an annual basis and as a result, we believe FFO per share is an appropriate metric to use for determining short-termannual financial success which is being rewarded in annual performance bonuses.success. The following chart shows the potential 2015 annual bonus payouts established2016 FFO per share levels set by the Compensation Committee, the payout potential as a percentage of each executive’s bonus target for achieving each level of FFO per share and the actual FFO per share achieved in 2016.
Based on achieving FFO per share for 2016 of $5.65, the potential annual bonus payout for each of our named executive officers at various levelsis 112.5% of target bonus levels. See Appendix A to this proxy statement for additional information about FFO and a reconciliation of FFO per share and the final potential annual bonus payout based on our 2015 results:
NEO | Potential Bonus Payout | |||||||||||||||||||
| FFO Below $4.94 per share | FFO at $4.94 per share | FFO at $5.00 per share | FFO at $5.06 per share | Final Payout Based on Results | ||||||||||||||||
Donald Wood | $ | 0 | $ | 956,250 | $ | 1,275,000 | $ | 1,593,750 | $ | 1,540,583 | ||||||||||
Dawn Becker | $ | 0 | $ | 253,125 | $ | 337,500 | $ | 421,875 | $ | 407,801 | ||||||||||
James Taylor | $ | 0 | $ | 253,125 | $ | 337,500 | $ | 421,875 | $ | 407,801 | ||||||||||
In 2015, we achieved FFO of $5.05 per share which resulted in an annual bonus payout of 96.7% of the maximum potential payout. FFO levels for Annual Bonus purposes include the impact of an approximately $0.27 per Share debt prepayment charge. A reconciliation ofto net income to FFO available for common shareholders can be found on page 49, in Item 7, of our Form 10-K for calendar year 2015 filed with the SEC on February 9, 2016.
The Compensation Committee determined, after reviewing individual performance, that each of our named executive officers should be paid the full amount of the annual bonus to which he or she is entitled based on the Trust’s 2015 results. The Compensation Committee’s determination with respect to Mr. Wood took into consideration our financial results for the year, progress made with our acquisitions and development projects to set the Trust up for future long-term growth, Mr. Wood’s effectiveness in leading the company, long-term strategic planning, succession planning, relationship with the Board, and relationship with shareholders and other stakeholders, among other factors. With respect to each of Ms. Becker and Mr. Taylor, the Compensation Committee accepted Mr. Wood’s recommendations as to the amount of their annual bonus payouts. Mr. Wood’s recommendations as to the bonus payouts for each of Ms. Becker and Mr. Taylor were based on his subjective assessment of each individual’s contributions to the Trust’s performance in 2015 in their respective job functions. Those contributions included, without limitation, the following: (a) Ms. Becker’s oversight of the Trust’s East Coast restructuring in 2015; and (b) Mr. Taylor’s work in financing our development pipeline and growing our portfolio through acquisitions.
For 2015, Mr. Wood elected to receive 25% of his annual bonus in Shares and Mr. Taylor elected to receive 20% of his annual bonus in Shares. The cash portion of the annual bonuses is reflected in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table in this proxy statement. The stock portion of these annual bonuses will be included in the “Stock Awards” column in the Summary Compensation Table and the Grants of Plan-Based Awards Table in next year’s proxy statement.income.
Annual Performance Based Long-Term Equity Incentives:
We believe that outstanding long-term performance is achieved through an ownership culture that encourages a focus on long-term performance by our executive officers through the use of equity-based awards. Long-term incentive awards are made annually to all officers under our LTIAP.Long-Term Incentive Award Program (“LTIAP”). This program was structured to align the most significant portion of compensation for our senior management team with the creation of long-term shareholder value. Recipients of awards under this program realize value over a minimum6-year time horizon comprised ofthat includes a3-year performance period, followedan award date, plus by a minimum of a3-year time based vesting period. period for Shares and a5-year vesting period for options. The following chart shows the time horizon for awards made for the3-year performance period ending December 2016:
We believe that the combination of this extended period with the requirements described abovebelow for our named executive officers to continually hold a meaningful equity position in the company creates a strong long-term alignment of interests between those individuals and our shareholders.
The performance metrics used under this program are: (a) total shareholder return relative to the Bloomberg REIT Shopping Center Index (“BBRESHOP”) which accounts for 50% of the total award; (b) absolute total shareholder return which accounts for 25% of the total award; and (c) return on invested capital which accounts for 25% of the total award. For purposes of the LTIAP, the levels of performance required to be achieved for our named executive officers to earn an LTIAP awardtotal shareholder return takes into account both Share price appreciation and the performance actually achieved for the three year period from January 1, 2013 through December 31, 2015dividends assuming all dividends are set forth below:
Relative Total Shareholder Return (a) (b) Weight 50% | Absolute Total Shareholder Return (a) Weight 25% | Return on Invested Capital Weight 25% | ||||||||||||||||||||||||||
Performance | Payout % Target | Performance | Payout % Target | Performance | Payout % Target | |||||||||||||||||||||||
< 40th percentile | 0% | < 8% | 0% | < 8.00% | 0% | |||||||||||||||||||||||
40th percentile | 50% | 8% | 50% | 8.00% | 50% | |||||||||||||||||||||||
60th percentile | 100% | 10% | 100% | 8.25% | 100% | |||||||||||||||||||||||
³ 80th percentile | 150% | ³ 12% | 150% | ³ 8.50% | 150% | |||||||||||||||||||||||
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Actual Achieved | Actual Payout | Actual Achieved | Actual Payout | Actual Achieved | Actual Payout | |||||||||||||||||||||||
66.58 percentile | 133.13% | 15.09% | 150% | 8.59% | 150% | |||||||||||||||||||||||
reinvested. The Compensation Committee believes that relative total shareholder return, absolute total shareholder return and return on invested capitalthese metrics are appropriate metrics to use for rewarding long-term performance. The relative shareholder return metric reflects how well we have performed for our shareholders as compared to other companies facing the same general market dynamics. The Compensation Committee determined that the BBRESHOP was the best index to use because the BBRESHOP is an industry index primarily made up of primarily companies that own and operate strip shopping centers whose businesses are most closely aligned with ours. Absolute shareholder return measures whether we have actually created any value for our shareholders during this time whilethe applicable3-year performance period and return on invested capital determinesreflects how effectively we have investedallocated our shareholders’ capital.capital during that time. These performance metrics support the objectives of the company and the LTIAP and remain unchanged from prior years.
The potential LTIAP payments for each of our named executive officers at the various levels of performance required to be achieved for each metric for Mr. Wood and Ms. Becker to earn an LTIAP award, the amount to be earned as a percentage of each executive’s LTIAP target and the performance metrics under the LTIAP and the amounts actually earned byachieved on each individualmetric for the prior 3-yearthree year period from January 1, 2014 through December 31, 2016 are set forth in the following table:chart below:
| Threshold | Target | Stretch | Actual Award | |||||||||||||
Donald Wood | ||||||||||||||||
Relative Total Return | $ | 1,250,000 | $ | 2,500,000 | $ | 3,750,000 | $ | 2,906,250 | ||||||||
Absolute Total Return | $ | 625,000 | $ | 1,250,000 | $ | 1,875,000 | $ | 1,875,000 | ||||||||
Return on Invested Capital | $ | 625,000 | $ | 1,250,000 | $ | 1,875,000 | $ | 1,875,000 | ||||||||
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Total Potential Award | $ | 2,500,000 | $ | 5,000,000 | $ | 7,500,000 | $ | 6,656,250 | ||||||||
Exercise of permitted discretion | $ | 343,750 | ||||||||||||||
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Total | $ | 7,000,000 | ||||||||||||||
Dawn Becker | ||||||||||||||||
Relative Total Return | $ | 150,000 | $ | 300,000 | $ | 450,000 | $ | 348,750 | ||||||||
Absolute Total Return | $ | 75,000 | $ | 150,000 | $ | 225,000 | $ | 225,000 | ||||||||
Return on Invested Capital | $ | 75,000 | $ | 150,000 | $ | 225,000 | $ | 225,000 | ||||||||
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Total Potential Award | $ | 300,000 | $ | 600,000 | $ | 900,000 | $ | 798,750 | ||||||||
James Taylor | ||||||||||||||||
Relative Total Return | $ | 300,000 | $ | 375,000 | $ | 450,000 | $ | 435,938 | ||||||||
Absolute Total Return | $ | 150,000 | $ | 187,500 | $ | 225,000 | $ | 225,000 | ||||||||
Return on Invested Capital | $ | 150,000 | $ | 187,500 | $ | 225,000 | $ | 225,000 | ||||||||
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Total Potential Award | $ | 600,000 | $ | 750,000 | $ | 900,000 | $ | 885,938 | ||||||||
Exercise of permitted discretion | $ | 39,062 | ||||||||||||||
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Total | $ | 925,000 | ||||||||||||||
The Compensation Committee approved payingsame metrics and performance levels are also applicable to Mr. Guglielmone; however, his payout levels on achieving the various levels of results are 67%/100%/133% of his target for each of our named executive officers the full amount of the LTIAP award to which they were entitled. In addition, under our LTIAP, themetric. The Compensation Committee has the discretion to increase or decrease anythe award for each executive by up to 20% to reflect individual performance and chosein order to exercise that discretion to increase Mr. Wood’s award by 5.2% and Mr. Taylor’s award by 4.4%. The Compensation Committee determined that such modest increases were appropriate to recognize the significant contributions made by Mr. Wood and Mr. Taylor in 2015.account for personal performance.
The LTIAP awards are made in the form of restricted Shares that vest in equal installments over a three-year period; however, each individual can elect to take up to 50% of his or her award in the form of options which vest equally over five years. Although the Compensation Committee believes that paying these awards in restricted Shares provides the most retention value for employees, it has agreed to permit individuals to elect to take up to 50% of the award in options in order to give the individual employee some ability to structure his or her own equity compensation in a way that best matches the individual’s needs and provides the most value to
that individual. The Compensation Committee has concluded that individual employees place value in having the ability to match the form of their equity compensation to their individual financial objectives and that this value to employees outweighs any diminution in the retention value of LTIAP awards by permitting up to 50% to be paid in options. Dividends are paid on all Shares issued under the LTIAP.
Each of our named executive officers elected to take the entirety of this or her 2015 LTIAP award in Shares. The number of Shares actually awarded to each individual wasunder the LTIAP is determined by dividing the amount of the award by $152.34, the closing price of our stockShares on the NYSE on the date the awards wereare made. There is no amount included for 20152016 in the Summary Compensation Table or Grants of Plan-Based Awards Table in this proxy statement for these awards.LTIAP awards earned for the 2014-2016 performance period. The LTIAP awards reflected for 20152016 in the Summary Compensation Table and the Grants of Plan-Based Awards Table for our named executive officers in this proxy statement relate to performanceawards made in February 2016 for the3-year performance period ending December 31, 2014 which were awarded in February 2015.
Chief Executive Officer2016 Compensation Decisions:
More than 90%The following chart sets out the compensation realized by each of Mr. Wood’s compensation isour named executive officers for performance driven. Approximately 16% is earned through our Annual Bonus Planin 2016 based on company and individual performance:
Compensation Component | Donald C. Wood | Daniel Guglielmone (a) | Dawn M. Becker | |||||||||
Base Salary | $950,000 | $450,000 | $450,000 | |||||||||
Target Bonus | 150% of base | 75% of base | 75% of base | |||||||||
Actual 2016 Payout | $1,425,000 | $337,500 | $337,500 | |||||||||
LTIAP | ||||||||||||
Threshold | $2,500,000 | $600,000 | $300,000 | |||||||||
Target | $5,000,000 | $900,000 | $600,000 | |||||||||
Stretch | $7,500,000 | $1,200,000 | $900,000 | |||||||||
Actual 2016 Award | $6,500,000 | $900,000 | $877,725 | |||||||||
Total 2016 Comp(a) | $8,875,000 | $1,687,500 | $1,665,225 | |||||||||
| (a) | Mr. Guglielmone’s actual base pay earned for 2016 was $164,423 which waspro-rated based on his start date of August 15, 2016. Amount above is annual base pay. |
The amounts set forth above for the basis of 1-year FFO goals reflecting our business objectivesannual performance bonus and performance based, long-term equity program differ from the amounts shown for that2016 in the Summary Compensation Table because the chart above reflects the amount realized for the year and approximately 75%the Summary Compensation Table reflects these amounts in the year in which the awards are made. We believe the chart above is earned throughhelpful because it allows the actual compensation realized for 2016 to be understood in the context of the Trust’s financial and other performance for the performance periods ending in 2016.
Taking into account market conditions as well as company and individual performance, the Compensation Committee made the following decisions in 2016 with respect to our LTIAP on the basis of total shareholder return (on both an absolute and relative basis) and return on invested capital over the longer-term 3-year performance period.named executive officers:
Donald C. Wood, Chief Executive Officer:
Base Salary: The Compensation Committee believes thatincreased Mr. Wood’s 2016 base salary from $850,000 to $950,000 at its meeting on February 3, 2016, slightly less than a 12% increase. This was the first time Mr. Wood’s base pay had been increased since 2011. The Committee believed this mix of compensation createswas an appropriate alignment betweenincrease to reflect current market rates for someone with Mr. Wood’s compensationexperience and companyhigh level of performance.
In additionAnnual Performance Bonus: At its meeting on February 8, 2017, the Committee elected to award Mr. Wood a bonus at 100% of his target instead of the full 112.5% of target he would have been entitled to receive based on company performance, a decrease of approximately $178,000. The Committee noted that underperformance at
one of the Trust’s large mixed use developments (Pike & Rose) warranted such a reduction for Mr. Wood, as well as the other named executive officers. Mr. Wood elected to take 25% of his annual performance bonus in the form of restricted shares and the remainder in cash.
LTIAP: Based on performance levels achieved for this program, the award potential for Mr. Wood was 146.3% of target or approximately $7.3 million; however, for the same reasons noted above relating to the base salary, annual bonus and LTIAPunderperformance at one of the Trust’s large mixed use developments (Pike & Rose), the Compensation Committee, at its meeting on February 8, 2017, elected to reduce Mr. Wood’s award described above, we have an agreement in place withto $6.5 million (approximately 11% decrease) to account for lower than initially forecasted returns on that project. Mr. Wood (“elected to take 100% of his award in the form of restricted shares.
Other: Mr. Wood does not receive any benefits or other perquisites that are not widely available to other employees of the company other than a health care arrangement outlined in a Health Coverage Continuation Agreement”) pursuant to whichAgreement. Under that agreement, we have agreed to provide to Mr. Wood, his spouse and his dependents continuation of health coverage after Mr. Wood’s termination upon death, disability, retirement, change in control or otherwise (other than a termination with cause or resignation). The coverageCoverage will continue as to Mr. Wood and his spouse until their death, or with respect to his spouse until divorce, if earlier. As toearlier, and coverage continues for three of Mr. Wood’s children, coverage will continue as to three of the children until each reaches age twenty-five and as to one of the children, until her death. The continued medical coverage isWe are required to beprovide coverage of at least the same level as provided to Mr. Wood and his family at the time of his termination and such coverage will be secondary to certain other coverages that may be available to Mr. Wood and his family. This agreement has been in place and remained unchanged since 2008.
Daniel Guglielmone, Chief Financial Officer:
Base Salary: As part of his initial hiring package, Mr. Guglielmone’s 2016 base salary was set at $450,000. The actual salary earned by Mr. Guglielmone during 2016 waspro-rated to reflect his actual period of employment during the year.
Annual Performance Bonus: For the same reasons described above, the Committee awarded to Mr. Guglielmone a bonus at 100% of his target instead of the full 112.5% of target he would have been able to receive based on company performance, a decrease of approximately $42,000. As part of his initial hiring package and as an inducement to leave his prior employment, the Compensation Committee agreed that Mr. Guglielmone’s 2016 bonus would not be prorated. Mr. Guglielmone elected to receive all of his annual performance bonus in cash.
LTIAP: The Compensation Committee has determinedawarded Mr. Guglielmone $900,000 as provided for in his initial hire package. Mr. Guglielmone elected to take 100% of his award in the form of restricted shares.
Other: To replace amounts Mr. Guglielmone had to forfeit upon leaving his prior employment, the Compensation Committee agreed to pay to Mr. Guglielmone the following additional amounts as part of his hire package: (a) $500,000 cash payment to be paid in equal installments in February 2017 and February 2018; (b) $500,000 paid in the form of 3,133 restricted shares that these perquisiteswere issued when Mr. Guglielmone joined the Trust on August 15, 2016, and other personalwhich will vest equally over 3 years; and (c) $1 million paid in the form of 6,266 restricted shares that were issued when Mr. Guglielmone joined the Trust on August 15, 2016. These shares vest equally over 7 years. In addition, we entered into a severance agreement with Mr. Guglielmone in substantially the same form as the severance agreement we have in place with Ms. Becker; however, Mr. Guglielmone’s severance agreement provides for a double trigger requirement in connection with a change in control before payment on change in control and does not include an excise taxgross-up. In addition, the benefits arefor Mr. Guglielmone on a relatively smalltermination without cause only apply if the termination occurs during Mr. Guglielmone’s first three years of employment with the Trust.
Dawn M. Becker, General Counsel:
Base Salary: The Compensation Committee left Ms. Becker’s base salary at $450,000, unchanged from prior years.
Annual Performance Bonus: For the same reasons described above, the Committee awarded to Ms. Becker a bonus at 100% of her target instead of the full 112.5% of target she would have been able to receive based on company performance, a decrease of approximately $42,000. Ms. Becker elected to receive 25% of her annual performance bonus in the form of restricted shares and the remainder in cash.
LTIAP: The Compensation Committee awarded Ms. Becker an LTIAP award of $877,725, the full amount to which she was eligible to receive based on company performance for the applicable3-year period. Ms. Becker elected to take 100% of her award in the form of restricted shares.
James M. Taylor, Former Chief Financial Officer:
The Compensation Committee set a 2016 base salary for Mr. Taylor of $500,000. Mr. Taylor left the company in May 2016 and received his base salary through his last date of employment. Mr. Taylor did not receive an Annual Performance Bonus or LTIAP award in connection with 2016 performance.
Other Compensation Considerations:
At-Risk Compensation: One of our key compensation principles is that the compensation of our named executive officers should include a significant portion that is “at risk” and variable depending on both our short-term financial performance and long-term creation of shareholder value with the largest portion of Mr. Wood’s overallthat “at risk” compensation are reasonable in lightdesigned to incentivize the creation of sustainable, long-term shareholder value. The “at risk” portion of 2016 compensation for our named executive officers is comprised of amounts paid under our Annual Bonus Plan and performance based, long-term equity awards under our LTIAP. The chart below shows that the “at risk” portions of compensation represent a significant percentage of the total compensation packagefor each of our named executive officers—approximately 89% for Mr. Wood and 73% for each of Mr. Guglielmone and Ms. Becker.
Equity Ownership: Each of our named executive officers is required to maintain a level of ownership of equity in the company equal to a multiple of the sum of his or her base salary and annual bonus. The required multiples for our named executive officers are consistent3 times for Mr. Wood and 2.5 times for each of Mr. Guglielmone and Ms. Becker. Each of Mr. Wood and Ms. Becker were in compliance with the equity ownership requirement as of December 31, 2016. Mr. Guglielmone joined the Trust in August 2016 and will have 5 years to meet the equity ownership requirements.
Risk Assessment: As described in the “Risk Management Oversight” section, we have concluded that our compensation objectivesprograms do not encourage excessive or unnecessary risk taking. We do not currently have any clawback or other compensation recovery policy with respect to compensation that may have been paid on the basis of creating programsincorrect financial results. Given the SEC’s pending clawback rule, the Board elected to wait until the final rulemaking was in place before adopting a clawback policy so that will allow us to retain talented executives.our the policy would be in full compliance with SEC requirements.
Equity awards to our employees under our Annual Bonus Plan and LTIAP described above are made at the Compensation Committee’s meeting that occurs in February of each calendar year. Whether these awards are made before or after we release financial results for the prior fiscal year depends solely on when the Compensation Committee meets in relation to the meetings of the Board and the Audit Committee, the dates for all of which are set during the preceding year. We have no policy that times the granting of equity awards relative to the release of materialnon-public information. Equity awards to new hires are generally made on the first day on which the employee starts work and equity awards to employees who are promoted generally are made on the day on which the promotion has been fully approved. All of our options are awarded at the closing price of our Shares on the NYSE on the date the award is made. The Compensation Committee has neverre-priced options, granted options with an exercise price that is less than the closing price on the NYSE on the date of the grant or granted options which are priced on a date other than the grant date. Equity awards for Vice Presidents and above for the3-year performance period ending on December 31, 20152016 were made at the Compensation Committee’s meeting on February 3, 20167, 2017 based on the closing price of our Shares on the NYSE on that date.
Termination andChange-in-Control Arrangements:
We have agreements in place with each of our named executive officers providing for various payments and benefits to be made to them if there is a change in control or their employment with us is terminated for certain reasons. The circumstances in which payments may be made and the potential amounts of those payments are described in more detail in the “Potential Payments on Termination of Employment andChange-in-Control” section below. We believe that the payments provided for in these agreements are reasonable and appropriate as part of the total compensation packages available for our named executive officers.
Deductibility of Executive Compensation in Excess of $1.0 Million:
Section 162(m) of the Internal Revenue Code generally prohibits any publicly held corporation from taking a federal income tax deduction for compensation in excess of $1 million in any taxable year to an executive
officer who is named in the Summary Compensation Table. Exceptions are made for qualified performance-based compensation, among other things. In structuring our compensation programs, the Compensation Committee considers this Section 162(m) exception; however, the Compensation Committee does not believe that it is necessarily in our best interests and the best interests of our shareholders for all compensation to meet the requirements of Section 162(m) for deductibility. As a result, the Compensation Committee has determined that it is appropriate at times to make compensation awards that arenon-deductible under Section 162(m). Further, because of ambiguities and uncertainties under Section 162(m), we cannot give any assurance that compensation that we intend to satisfy the requirements for deductibility under Section 162(m) will in fact be deductible.
The Compensation Committee of the Board has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of RegulationS-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Submitted by:
David W. Faeder, Chairman
Kristin Gamble
Gail P. Steinel
Joseph S. Vassalluzzo
The following table summarizes the total compensation earned by each of the named executive officers for the fiscal years ended December 31, 2016, 2015 2014 and 2013,2014, in accordance with current SEC rules. The Summary Compensation Table below does not include the value of the Shares issued to our named executive officers on February 3, 20167, 2017 for the performance period ending December 31, 2015.2016. Those awards will appear in next year’s proxy statement in the Grants of Plan-Based Awards Table as well as the “Stock Awards” column of the Summary Compensation Table. The cash portion of the annual bonuses awarded pursuant to the Annual Bonus Plan in February 20162017 based on 20152016 performance is included below in the “Non-Equity“Non-Equity Incentive Plan Compensation” column.
| Name and Principal Position | Year | Salary | Stock Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | Year | Salary | Stock Awards | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | ||||||||||||||||||||||||||||||||||||
| ($) (1) | ($) (2) | ($) (3) | ($) (4) | ($) | ($) (1) | ($) (2) | ($) (3) | ($) (4) | ($) | |||||||||||||||||||||||||||||||||||||||
Donald C. Wood, | 2015 | $ | 850,000 | $ | 3,462,159 | $ | 1,155,437 | $ | 15,435 | $ | 5,483,031 | 2016 | $ | 950,000 | $ | 7,462,223 | $ | 1,068,750 | $ | 15,767 | $ | 9,496,740 | ||||||||||||||||||||||||||
| 2014 | $ | 850,000 | $ | 6,369,693 | $ | 1,155,437 | $ | 13,140 | $ | 8,388,270 | 2015 | $ | 850,000 | $ | 3,462,159 | $ | 1,155,437 | $ | 15,435 | $ | 5,483,031 | |||||||||||||||||||||||||||
| 2013 | $ | 850,000 | $ | 6,351,889 | $ | 1,232,466 | $ | 16,716 | $ | 8,451,071 | 2014 | $ | 850,000 | $ | 6,369,693 | $ | 1,155,437 | $ | 13,140 | $ | 8,388,270 | |||||||||||||||||||||||||||
James M. Taylor, Jr., | | 2015 2014 2013 | | $ $ $ | 450,000 400,000 400,000 |
| $ $ $ | 108,717 1,886,948 982,810 |
| $ $ $ | 326,241 271,868 289,992 |
| $ $ $ | 1,977 1,977 1,392 |
| $ $ $ | 886,935 2,560,793 1,674,194 |
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Daniel Guglielmone, | 2016 | $ | 164,423 | $ | 1,500,080 | $ | 337,500 | $ | 20,802 | $ | 2,022,805 | |||||||||||||||||||||||||||||||||||||
| 2015 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||
| 2014 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||||||||
James M. Taylor, Jr., Former | 2016 | $ | 194,231 | $ | 1,022,811 | $ | — | $ | 93,662 | $ | 1,310,704 | |||||||||||||||||||||||||||||||||||||
| 2015 | $ | 450,000 | $ | 108,717 | $ | 326,241 | $ | 1,977 | $ | 886,935 | ||||||||||||||||||||||||||||||||||||||
| 2014 | $ | 400,000 | $ | 1,886,948 | $ | 271,868 | $ | 1,977 | $ | 2,560,793 | ||||||||||||||||||||||||||||||||||||||
Dawn M. Becker, Executive | 2015 | $ | 450,000 | $ | 565,500 | $ | 407,801 | $ | 10,384 | $ | 1,433,685 | 2016 | $ | 450,000 | $ | 798,719 | $ | 253,125 | $ | 10,307 | $ | 1,512,151 | ||||||||||||||||||||||||||
| 2014 | $ | 425,000 | $ | 1,015,465 | $ | 288,859 | $ | 10,159 | $ | 1,739,483 | 2015 | $ | 450,000 | $ | 565,500 | $ | 407,801 | $ | 10,384 | $ | 1,433,685 | |||||||||||||||||||||||||||
| 2013 | $ | 425,000 | $ | 1,009,986 | $ | 288,859 | $ | 9,652 | $ | 1,733,497 | 2014 | $ | 425,000 | $ | 1,015,465 | $ | 288,859 | $ | 10,159 | $ | 1,739,483 | |||||||||||||||||||||||||||
| (1) | Amounts shown in the Salary column include all amounts deferred at the election of the named executive officers into ournon-qualified deferred compensation plan. |
| (2) | Amounts shown in the Stock Awards column |
| (3) | Amounts shown in this column represent only the cash portion paid under our Annual Bonus Plan and include amounts deferred by our named executive officers into ournon-qualified deferred compensation plan. For 2016, Mr. Wood and Ms. Becker received 75% of their Annual Bonus in cash and Mr. Guglielmone received 100% of his Annual Bonus in cash. For 2015, Mr. Wood received 75% of his Annual Bonus in |
| 2015 Annual Incentive Bonus Information | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2016 Annual Incentive Bonus Information | 2016 Annual Incentive Bonus Information | |||||||||||||||||||||||||||||||||||||||||||||||
| Name | Annual Incentive Bonus Awarded | Amount Paid in Cash | Amount Paid in Shares | 20% Premium Paid in Shares | Total Annual Incentive Bonus Paid | Number of Shares Issued | Annual Incentive Bonus Awarded | Amount Paid in Cash | Amount Paid in Shares | 20% Premium Paid in Shares | Total Annual Incentive Bonus Paid | Number of Shares Issued | ||||||||||||||||||||||||||||||||||||
| ($) | ($) | ($) (a) | ($) (a) | ($) | (#) (b) | ($) | ($) | ($) (a) | ($) (a) | ($) | (#) (b) | |||||||||||||||||||||||||||||||||||||
Donald C. Wood | $ | 1,540,583 | $ | 1,155,437 | $ | 385,146 | $ | 77,029 | $ | 1,617,612 | 3,034 | $ | 1,425,000 | $ | 1,068,750 | $ | 356,250 | $ | 71,250 | $ | 1,496,250 | 3,061 | ||||||||||||||||||||||||||
James M. Taylor, Jr. | $ | 407,801 | $ | 326,241 | $ | 81,560 | $ | 16,312 | $ | 424,113 | 642 | |||||||||||||||||||||||||||||||||||||
Daniel Guglielmone | $ | 337,500 | $ | 337,500 | $ | — | $ | — | $ | 337,500 | 0 | |||||||||||||||||||||||||||||||||||||
Dawn M. Becker | $ | 407,801 | $ | 407,801 | $ | — | $ | — | $ | 407,801 | 0 | $ | 337,500 | $ | 253,125 | $ | 84,375 | $ | 16,875 | $ | 354,375 | 725 | ||||||||||||||||||||||||||
| (a) | The value of the Shares awarded in |
| (b) | The number of Shares actually awarded to Mr. Wood and |
| (4) | The amounts shown in this column for the last fiscal year include the amounts below. The group-term life insurance, long-term disability insurance and contributions to the |
| All Other Compensation Table | All Other Compensation Table | All Other Compensation Table | ||||||||||||||||||||||||||||||||||||||||||
| Name | Group Term Life Insurance | Long-Term Disability Insurance Premium | Supplemental Life Insurance | Trust Contribution to Section 401(k) Plan | Total | Group Term Life Insurance | Long-Term Disability Insurance Premium | Supplemental Life Insurance | Trust Contribution to Section 401(k) Plan | Other | Total | |||||||||||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) (a) | ($) | ||||||||||||||||||||||||||||||||||
Donald C. Wood | $ | 4,128 | $ | 1,291 | $ | 3,390 | $ | 6,625 | $ | 15,434 | $ | 4,128 | $ | 1,291 | $ | 3,723 | $ | 6,625 | $ | — | $ | 15,767 | ||||||||||||||||||||||
Daniel Guglielmone | $ | 510 | $ | — | $ | — | $ | — | $ | 20,292 | $ | 20,802 | ||||||||||||||||||||||||||||||||
James M. Taylor, Jr. | $ | 630 | $ | 1,347 | $ | — | $ | — | $ | 1,977 | $ | 467 | $ | 539 | $ | — | $ | — | $ | 92,656 | $ | 93,662 | ||||||||||||||||||||||
Dawn M. Becker | $ | 1,035 | $ | 1,291 | $ | 1,432 | $ | 6,625 | $ | 10,383 | $ | 1,104 | $ | 1,037 | $ | 1,541 | $ | 6,625 | $ | — | $ | 10,307 | ||||||||||||||||||||||
| (a) | The amount shown in this column for Mr. Guglielmone includes a temporary apartment which is being provided to Mr. Guglielmone for up to one year in connection with his joining the Trust and the amount shown in this column for Mr. Taylor includes his accrued vacation paid out in connection with his leaving the Trust. |
| (5) | Mr. Guglielmone joined the Trust on August 15, 2016. |
| (6) | Mr. Taylor resigned from the Trust effective May 19, 2016. |
20152016 GRANTS OF PLAN-BASED AWARDS TABLE
The following Share awards were made in 20152016. The share awards for either a one or three-yearMessrs. Wood and Taylor and Ms. Becker were made for the performance period ending December 31, 2014.2015. The shares awarded to Mr. Guglielmone were part of his new hire compensation package. Awards made in 20162017 to the named executive officers under the Annual Bonus Plan and LTIAP for either a one or three-year performance period ending December 31, 20152016 will be reported in the Grants of Plan-Based Awards Table in next year’s proxy statement.
| Name | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units (3) | Grant Date Fair Value | Grant Date | All Other Stock Awards: Number of Shares of Stock or Units | Grant Date Fair Value of Stock | ||||||||||||||||||
| (#) | ($) | (#) (4) | ($) (5) | |||||||||||||||||||||
Donald C. Wood | 2/6/2015 | (1) | 3,248 | $ | 462,190 | 2/3/2016 | (1) | 3,034 | $ | 462,200 | ||||||||||||||
| 2/6/2015 | (2) | 21,082 | $ | 2,999,969 | 2/3/2016 | (2) | 45,950 | $ | 7,000,023 | |||||||||||||||
James M. Taylor | 2/6/2015 | (1) | 764 | $ | 108,717 | |||||||||||||||||||
Daniel Guglielmone | 8/15/2016 | (3) | 3,133 | $ | 500,027 | |||||||||||||||||||
| 8/15/2016 | (3) | 6,266 | $ | 1,000,054 | ||||||||||||||||||||
James M. Taylor, Jr. | 2/3/2016 | (1) | 642 | $ | 97,802 | |||||||||||||||||||
| 2/3/2016 | (2) | 6,072 | $ | 925,008 | ||||||||||||||||||||
Dawn M. Becker | 2/6/2015 | (1) | 812 | $ | 115,548 | 2/3/2016 | (2) | 5,243 | $ | 798,719 | ||||||||||||||
| 2/6/2015 | (2) | 3,162 | $ | 449,953 | ||||||||||||||||||||
| (1) | Issued under our Annual Bonus Plan. These Shares vest equally over 3 years. |
| (2) | Issued under our LTIAP. These Shares vest equally over 3 years. |
| (3) | Issued in connection with Mr. Guglielmone joining the Trust. The 3,133 Share award vests equally over 3 years and the 6,266 Share award vests equally over 7 years. |
| (4) | Dividends are paid on all Shares issued at the same rate and time as paid to all other holders of our Shares as declared by our Board from time to time. |
| (5) | Represents the grant date fair value of Share awards as computed in accordance with FASB ASC Topic 718. The grant date fair value for these Share awards was based on the closing price of the Trust’s Shares on the applicable grant date. |
20152016 OUTSTANDING EQUITY AWARDS AT FISCALYEAR-END TABLE
The following table sets forth information about outstanding equity awards held on December 31, 20152016 by our named executive officers.
| Option Awards | Stock Awards | |||||||||||||||||||||||
| Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unexercised Options | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested | |||||||||||||||||||
| Name | Exercisable | Unexercisable | ||||||||||||||||||||||
| (#) | (#) | ($) | (#) | ($) | ||||||||||||||||||||
Donald C. Wood | 144,788 | 0 | $ | 43.48 | 2/17/2019 | 3,248 | (1) | $ | 474,533 | |||||||||||||||
| 84,507 | 0 | $ | 73.03 | 2/10/2018 | 21,082 | (1) | $ | 3,080,080 | ||||||||||||||||
| 18,701 | 0 | $ | 92.30 | 2/12/2017 | 2,207 | (2) | $ | 322,443 | ||||||||||||||||
| 35,810 | (2) | $ | 5,231,841 | |||||||||||||||||||||
| 1,096 | (3) | $ | 160,126 | |||||||||||||||||||||
| 18,693 | (3) | $ | 2,731,047 | |||||||||||||||||||||
James M. Taylor, Jr. | 0 | 0 | 764 | (1) | $ | 111,620 | ||||||||||||||||||
| 519 | (2) | $ | 75,826 | |||||||||||||||||||||
| 6,446 | (4) | $ | 941,761 | |||||||||||||||||||||
| 6,446 | (4) | $ | 941,761 | |||||||||||||||||||||
| 258 | (3) | $ | 37,694 | |||||||||||||||||||||
| 2,804 | (3) | $ | 409,664 | |||||||||||||||||||||
Dawn M. Becker | 39,941 | 0 | $ | 73.03 | 2/10/2018 | 812 | (1) | $ | 118,633 | |||||||||||||||
| 3,162 | (1) | $ | 461,968 | |||||||||||||||||||||
| 689 | (2) | $ | 100,663 | |||||||||||||||||||||
| 5,371 | (2) | $ | 784,703 | |||||||||||||||||||||
| 343 | (3) | $ | 50,112 | |||||||||||||||||||||
| 2,804 | (3) | $ | 409,664 | |||||||||||||||||||||
| 1,220 | (5) | $ | 178,242 | |||||||||||||||||||||
Donald C. Wood Daniel Guglielmone James M. Taylor, Jr. Dawn M. Becker Option Awards Stock Awards Number of
Securities
Underlying
Unexercised
Options Number of
Securities
Underlying
Unexercised
Options Option
Exercise
Price Option
Expiration
Date Number of
Shares or
Units of
Stock That
Have Not
Vested Market
Value of
Shares or
Units of
Stock That
Have Not
Vested Name Exercisable Unexercisable (#) (#) ($) (#) ($) (8) 144,788 0 $ 43.48 2/17/2019 3,034 (1) $ 431,162 84,507 0 $ 73.03 2/10/2018 45,950 (1) $ 6,529,955 2,165 (2) $ 307,668 14,055 (2) $ 1,997,356 1,103 (3) $ 156,747 17,905 (3) $ 2,544,480 0 0 3,133 (4) $ 445,231 6,266 (5) $ 890,461 0 0 0 (6) $ — 26,627 0 $ 73.03 2/10/2018 5,243 (1) $ 745,083 541 (2) $ 76,882 2,108 (2) $ 299,568 345 (3) $ 49,028 2,686 (3) $ 381,707 1,220 (7) $ 173,374
| (1) | One-third of these Shares vested on February 12, |
| (2) | One-half of these Shares vested on February 12, |
| (3) | These shares vested on February 12, |
| (4) |
| (5) |
| (6) | Mr. Taylor had 17,151 unvested Shares which were forfeited on May 19, 2016 in connection with his leaving the Trust. |
| (7) | These Shares vested on February 10, 2017. |
| (8) | The market value of outstanding unvested Shares is based on $142.11, the closing price of our Shares on the NYSE on December 30, 2016. |
20152016 OPTION EXERCISES AND STOCK VESTED
The following table includes certain information with respect to options exercised in 20152016 by each named executive officer and Shares that vested during 2015.2016.
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||
| Name | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | ||||||||||||||||||||||||
| (#) | ($) | (#) | ($) | (#) | ($) (1) | (#) | ($) (2) | |||||||||||||||||||||||||
Donald C. Wood | 0 | $ | — | 121,656 | $ | 17,432,440 | 18,701 | $ | 1,231,864 | 46,908 | $ | 6,796,500 | ||||||||||||||||||||
Daniel Guglielmone | 0 | $ | — | 0 | $ | — | ||||||||||||||||||||||||||
James M. Taylor | 0 | $ | — | 6,544 | $ | 945,870 | 0 | $ | — | 6,800 | $ | 985,252 | ||||||||||||||||||||
Dawn M. Becker | 8,203 | $ | 602,693 | 10,382 | $ | 1,497,967 | 13,314 | $ | 1,137,456 | 7,501 | $ | 1,086,820 | ||||||||||||||||||||
| (1) | The value realized is based on the difference between the price at which the Shares were sold and the exercise price of the option. |
| (2) | The value realized is based on the closing price of a Share on the date of the Share vesting. |
2015 2016NON-QUALIFIED DEFERRED COMPENSATION
We maintain anon-qualified deferred compensation plan that is open to participation by 34 members of our management team, including our named executive officers. Each participant can elect to defer up to 100% of his or her base salary and cash payment under our Annual Bonus Plan with deferral elections made in December of each year for amounts to be earned in the following year. A number of widely available investment options are made available to each plan participant who then decides how to allocate amounts deferred among those investment options. The amount earned by plan participants on their deferrals is calculated by our third party plan administrator as if the amounts deferred had actually been invested in the investment options selected by each participant. We do not make any contributions to the deferred compensation plan for any individual nor do we guaranty any rate of return on amounts deferred. Amounts deferred into the plan, including amounts earned on the deferrals, are generally payable to the participant shortly after he or she retires or is otherwise no longer employed by us; however, there are a few other alternatives where amounts may be paid to a participant sooner. We have an unsecured contractual obligation to each participant in the plan to pay him or her the actual amount he or she deferred into the plan together with a return calculated as if the deferred amounts had been invested in the investment options selected by the participant. We try to invest amounts deferred by participants into the same investment options in the same proportions as selected by the participant so that sufficient amounts will be available to pay each participant when required. The amounts deferred by Ms. Becker and Mr. Wood into the plan in 2015,2016, the earnings on plan investments in 20152016 and aggregate withdrawals and distributions made in 20152016 are described below. Neither Mr. Guglielmone nor Mr. Taylor does not participateparticipated in our deferred compensation plan.
| Name | Executive Contributions in Last Fiscal Year | Registrant Contributions in Last Fiscal Year | Aggregate Earnings in Last Fiscal Year | Aggregate Withdrawals / Distributions | Aggregate Balance at Last Fiscal Year-End | Executive Contributions in Last Fiscal Year | Registrant Contributions in Last Fiscal Year | Aggregate Earnings in Last Fiscal Year | Aggregate Withdrawals / Distributions | Aggregate Balance at Last Fiscal Year-End | ||||||||||||||||||||||||||||||
| ($) (a) | ($) | ($) | ($) | ($) | ($) (a) | ($) | ($) | ($) | ($) | |||||||||||||||||||||||||||||||
Donald C. Wood | $ | 250,000 | $ | — | $ | (4,689 | ) | $ | — | $ | 4,154,235 | $ | 250,000 | $ | — | $ | 352,863 | $ | — | $ | 4,757,098 | |||||||||||||||||||
Dawn M. Becker | $ | 44,971 | $ | — | $ | 15,457 | $ | — | $ | 1,130,477 | $ | 45,000 | $ | — | $ | 58,860 | $ | — | $ | 1,234,337 | ||||||||||||||||||||
| (a) | All amounts in this column are included in either the “Salary” or |
POTENTIAL PAYMENTS ON TERMINATION OF EMPLOYMENT ANDCHANGE-IN-CONTROL
We have entered into agreements with each of our named executive officers that require us to make certain payments and provide certain benefits to them in the event of a termination of employment or change in control of the Trust. Regardless of the reason for a named executive officer’s termination of employment, he or she will be entitled to receive upon termination all accrued but unused vacation pay and a distribution of any amounts in ournon-qualified deferred compensation plan.plan as described in the “2016Non-Qualified Deferred Compensation” section above. No named executive officer is entitled to receive an award under the Annual Bonus Plan or the LTIAP for the year in which the termination occurs. Further, no named executive officer is entitled to receive an award under the Annual Bonus Planoccurs or LTIAP for the year prior to the year of termination unless he or she is still employed when those awards are made in February of the following year. The agreements with each of our named executive officers contain provisions restricting the executive from engaging in competing behavior and soliciting and/or hiring our employees for a period of time after termination. The payments that will be made to a named executive officer vary depending on the reason for termination, may be conditioned on the signing of a release in favor of the Trust, and are summarized below.
1. Payments on Voluntary Termination:On any voluntary termination of employment, the named executive officers receive no additional compensation and all unvested options and Shares are forfeited. Each named executive officer has one year after terminating employment to exercise all vested options (subject to the10-year term of those options). With respect to Mr. Wood, all rights to receive extended health insurance coverage under the Health Coverage Continuation Agreement are terminated.
2. Payments on Death and Disability:Upon death, the estates of our named executive officers receive the amount of his or her then current salary through the month in which death occurs. In the event of disability, our named executive officers are entitled to receive payments for one year equal to the difference between his or her then current salary and the amount of any payments received under any disability policy we maintained for his or her benefit and to receive health benefits for one year. Those payments are subject togross-up for taxes on anynon-tax exempt payments. On death or disability, there is accelerated vesting of all Shares issued under the Annual Bonus Plan and all Shares and options issued under the LTIAP. This accelerated vesting is the same for all employees on anon-discriminatory basis who hold any Shares or options issued under the Annual Bonus Plan or the LTIAP. TheRetention/Non-Solicitation Award to Ms. Becker in February 2011 does not provide for accelerated vesting in the event of death or disability. Each named executive officer or his or her beneficiary has two years after the executive’s death or disability to exercise all vested options (subject to the10-year term of those options), including options that vested as a result of the death or disability. In addition, Mr. Wood will receive the benefits described in his Health Coverage Continuation Agreement.
3. Payment on Termination for Cause:Upon termination for cause resulting from a failure to substantially perform his or her job responsibilities, each of our named executive officers is entitled to receive one month of base salary for every year he or she has been employed by us over 5 years up to a maximum of 6 months of base salary and to receive health benefits for that same time period. Our named executive officers are not entitled to receive any compensation on a termination with cause for any reason other than failure to perform. On a termination for cause, all unvested options and Shares are forfeited. In addition, the right to exercise any previously vested options issued under the LTIAP immediately terminates. With respect to Mr. Wood, all rights to receive extended health insurance coverage under the Health Coverage Continuation Agreement are terminated.
4. Termination without Cause:Upon a termination without cause, each of our named executive officers is entitled to receive the following:
A lump sum cash payment equal to a multiple of the highest base salary and the highest annual bonus earned by the named executive officer in the prior three year period. For Ms. Becker and Mr. Taylor,Guglielmone, the multiple is 1 time and for Mr. Wood, the multiple is 1.5 times.
Continuation of health and welfare benefits for a period of 9 months for Ms. Becker and Mr. Wood and 12 months for Mr. Guglielmone
Outplacement and administrative assistance for a period of 6 months
Mr. Guglielmone is only entitled to the foregoing payments if the termination without cause occurs during the first three years of Mr. Guglielmone’s employment with the Trust. In addition, the vesting of all unvested Shares issued under the Annual Bonus Plan and all unvested Shares and options issued under the LTIAP is accelerated for each of our named executive officers. This accelerated vesting is the same for all employees on anon-discriminatory basis who hold any Shares or options issued under the Annual Bonus Plan or the LTIAP. TheRetention/Non-Solicitation Award to Ms. Becker in February 2011 does not provide for accelerated vesting in the event of a termination without cause. Each named executive officer has one year after the executive’s termination to exercise all vested options (subject to the10-year term of those options), including options that vested as a result of the termination. In addition, Mr. Wood will receive the benefits described in his Health Coverage Continuation Agreement.
5. Change of Control:Upon a change of control, each named executive officer is entitled to receive the following payments so long as he or she (i) is terminated from employment by the Trust other than for cause or leaves for good reason within two (2) years after the change of control or (ii) as to Mr. Wood and Ms. Becker only, he or she voluntarily leaves employment within the thirty day window following the1-year anniversary of the change of control:
A lump sum cash payment equal to a multiple of the highest base salary and highest annual bonus earned by the named executive officer in the prior three year period. For Ms. Becker and Mr. TaylorGuglielmone the multiple is 2 times and for Mr. Wood, the multiple is 3 times
Continuation of health and welfare and other benefits such as administrative assistance for a period of 2 years for Ms. Becker and Mr. TaylorGuglielmone and 3 years for Mr. Wood
Continued use of any company owned automobile for 3 years for Mr. Wood
Outplacement and administrative assistance for a period of 9 months for Ms. Becker and Mr. Guglielmone and 12 months for Mr. Wood
An amount equal to the excise tax charged to the named executive officerMr. Wood or Ms. Becker as a result of receiving any change of control payments plus an additional “gross-up”“gross-up” amount sufficient to pay the taxes to be paid by the named executive officerMr. Wood or Ms. Becker on the excise tax payment received
In addition, if the named executive officer is terminated within one year after the change of control, the vesting of all unvested Shares issued under the Annual Bonus Plan and all unvested Shares and options issued under the LTIAP is accelerated. This accelerated vesting is the same for all employees on anon-discriminatory basis who hold any Shares or options issued under the Annual Bonus Plan or the LTIAP. Each named executive officer has one year after the executive’s termination to exercise all vested options (subject to the10-year term of those options), including options that vested as a result of the termination. In addition, in the event of a change of control, the unvested Shares issued under theRetention/Non-Solicitation Award to Ms. Becker in February 2011 will vest. Mr. Wood will also receive the benefits described in his Health Coverage Continuation Agreement.
Under our 2001 and 2010 Plans, a change of control is deemed to have occurred when a person acquires a 20% interest in us, or our current Trustees, or those subsequently approved by our current Trustees, constitute less thantwo-thirds of our Board.
The amount of compensation payable to each of the named executive officers under various termination scenarios is reflected below. The following table does not include amounts for accrued but unused vacation pay or the distribution of any amounts in ournon-qualified deferred compensation plan because all employees or participants in the applicable plan are entitled to the same benefit on anon-discriminatory basis. Our corporate
policy permits employees, including our named executive officers, to accrue up to eight weeks of unused vacation time. The amounts
shown below assume that the termination was effective on December 31, 20152016 and therefore, includes all amounts earned to that date as well as an estimate of amounts that would be payable upon the termination.
| Cash Payment | Medical Benefits (1) | Accelerated Equity (2) | Other Benefits (3) | Excise Tax Gross-Up | Total | Cash Payment | Medical Benefits (1) | Accelerated Equity (2) | Other Benefits (3) | Excise Tax Gross-Up | Total | |||||||||||||||||||||||||||||||||||||
Donald C. Wood | ||||||||||||||||||||||||||||||||||||||||||||||||
Death | $ | — | $ | 894,000 | $ | 9,825,883 | $ | — | $ | — | $ | 10,719,883 | $ | — | $ | 898,000 | $ | 11,967,367 | $ | — | N/A | $ | 12,865,367 | |||||||||||||||||||||||||
Disability(4) | $ | 923,919 | $ | 1,221,033 | $ | 9,825,883 | $ | — | $ | — | $ | 11,970,835 | ||||||||||||||||||||||||||||||||||||
Disability (4) | $ | 1,072,752 | $ | 1,221,049 | $ | 11,967,367 | $ | — | N/A | $ | 14,261,168 | |||||||||||||||||||||||||||||||||||||
TWOC | $ | 3,585,874 | $ | 1,242,275 | $ | 9,825,883 | $ | 62,028 | $ | — | $ | 14,716,060 | $ | 3,735,875 | $ | 1,228,036 | $ | 11,967,367 | $ | 61,000 | N/A | $ | 16,992,278 | |||||||||||||||||||||||||
Termination for Cause | $ | 425,000 | $ | 15,517 | $ | — | $ | — | $ | — | $ | 440,517 | $ | 475,000 | $ | 16,024 | $ | — | $ | — | N/A | $ | 491,024 | |||||||||||||||||||||||||
CIC | $ | 7,171,748 | $ | 1,312,100 | $ | 9,825,883 | $ | 124,055 | $ | — | $ | 18,433,786 | $ | 7,471,749 | $ | 1,300,146 | $ | 11,967,367 | $ | 168,665 | $ | — | $ | 20,907,927 | ||||||||||||||||||||||||
James M. Taylor, Jr. | ||||||||||||||||||||||||||||||||||||||||||||||||
Daniel Guglielmone | ||||||||||||||||||||||||||||||||||||||||||||||||
Death | $ | — | $ | — | $ | 1,934,329 | $ | — | $ | — | $ | 1,934,329 | $ | — | $ | — | $ | 1,335,692 | $ | — | N/A | $ | 1,335,692 | |||||||||||||||||||||||||
Disability(4) | $ | 342,559 | $ | 23,965 | $ | 1,934,329 | $ | — | $ | — | $ | 2,300,853 | ||||||||||||||||||||||||||||||||||||
Disability (4) | $ | 328,591 | $ | 23,415 | $ | 1,335,692 | $ | — | N/A | $ | 1,687,698 | |||||||||||||||||||||||||||||||||||||
TWOC | $ | 787,500 | $ | 23,415 | $ | 1,335,692 | $ | 61,000 | N/A | $ | 2,207,607 | |||||||||||||||||||||||||||||||||||||
Termination for Cause | $ | — | $ | — | $ | — | $ | — | N/A | $ | — | |||||||||||||||||||||||||||||||||||||
CIC (5) | $ | 1,575,000 | $ | 46,830 | $ | 1,335,692 | $ | 91,500 | N/A | $ | 3,049,022 | |||||||||||||||||||||||||||||||||||||
Dawn M. Becker | ||||||||||||||||||||||||||||||||||||||||||||||||
Death | $ | — | $ | — | $ | 1,552,268 | $ | — | N/A | $ | 1,552,268 | |||||||||||||||||||||||||||||||||||||
Disability (4) | $ | 328,591 | $ | 11,250 | $ | 1,552,268 | $ | — | N/A | $ | 1,892,109 | |||||||||||||||||||||||||||||||||||||
TWOC | $ | 857,801 | $ | 17,974 | $ | 1,934,329 | $ | 54,250 | $ | — | $ | 2,864,354 | $ | 857,801 | $ | 8,438 | $ | 1,552,268 | $ | 61,000 | N/A | $ | 2,479,507 | |||||||||||||||||||||||||
Termination for Cause | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 225,000 | $ | 5,625 | $ | — | $ | — | N/A | $ | 230,625 | |||||||||||||||||||||||||
CIC | $ | 1,715,602 | $ | 47,930 | $ | 1,934,329 | $ | 81,375 | $ | — | $ | 3,779,236 | $ | 1,715,602 | $ | 22,500 | $ | 1,725,642 | $ | 91,500 | $ | — | $ | 3,555,244 | ||||||||||||||||||||||||
Dawn M. Becker | ||||||||||||||||||||||||||||||||||||||||||||||||
Death | $ | — | $ | — | $ | 1,579,100 | $ | — | $ | — | $ | 1,579,100 | ||||||||||||||||||||||||||||||||||||
Disability(4) | $ | 328,591 | $ | 11,097 | $ | 1,579,100 | $ | — | $ | — | $ | 1,918,788 | ||||||||||||||||||||||||||||||||||||
TWOC | $ | 857,801 | $ | 8,323 | $ | 1,579,100 | $ | 54,250 | $ | — | $ | 2,499,474 | ||||||||||||||||||||||||||||||||||||
Termination for Cause | $ | 225,000 | $ | 5,549 | $ | — | $ | — | $ | — | $ | 230,549 | ||||||||||||||||||||||||||||||||||||
CIC | $ | 1,715,602 | $ | 22,195 | $ | 1,679,115 | $ | 81,375 | $ | — | $ | 3,498,287 | ||||||||||||||||||||||||||||||||||||
| (1) | Amounts in this column represent our estimate of the COBRA equivalent to provide the same benefits as being provided to each named executive officer at December 31, |
| (2) | Amounts in this column were calculated by multiplying the number of unvested Shares and options that vest on the occurrence of the specified event as of December 31, |
| (3) | Amounts in this column include the following: (a) the annual cost of administrative assistance in the amount of |
| (4) | The cash severance payment includes a payment of |
| (5) | Mr. Guglielmone is not entitled to receive an excise taxgross-up in connection with achange-of-control. |
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of Mr. Faeder, Ms. Gamble, Ms. Steinel and Mr. Vassalluzzo. There are no Compensation Committee interlocks and no member of the Compensation Committee serves, or has in the past served, as an employee or officer of the Trust.
PROPOSAL 3—ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
You are being asked to approve on an advisory basis the compensation of our named executive officers as described in the Compensation Discussion and Analysis (“CD&A”), the Summary Compensation Table, the supplemental tables and the disclosure narratives accompanying these sections of this proxy statement.
Our This is an opportunity to express your opinions regarding the decisions made by the Compensation Committee on the compensation philosophy is designedof the named executive officers for 2016; however, it will not affect any compensation already paid or awarded to attractany named executive officer for 2016 and retain top level real estate professionals and to motivate those professionals to achieve superior results for uswill not be binding on the Compensation Committee, the Board or the Trust. The Board and our shareholders. Compensation Committee value the opinions of our shareholders, will review the results of this vote and will take those results into consideration in addressing future compensation policies and decisions.
The Board recommends a vote FOR this proposal.
Our compensation packages include base salaries, annual incentive compensation, long-term incentives and various other benefits and perquisites. We believe our compensation programs and policies are appropriate and effective in implementingretaining and motivating our compensation philosophy and in achievingnamed executive officers to achieve superior results for our goalsshareholders and that they are alignedit aligns those individuals with theyour interests ofas our shareholders. InWe encourage you to review the CD&A section above and consider the following in considering whether to approve this proposal, we believe our shareholders should consider the following:proposal:
1.
A significant portion of our named executive officers’ compensation is directly linked to our performance and the creation of long-term shareholder value through long-term incentive awards. The value of these awards is only recognized over a6-year period that consists ofincludes a3-year performance period, an award date, plus a3-year vesting period.period after the award date for Shares and a5-year vesting period for options.
2.
The compensation of our named executive officers is strongly tied to our performance and to the performance of the individual. The annual incentive compensation is only paid if we achieve our annual FFO objective and long-term incentives are earned on the basis of our absolute and relative total shareholder returns as well as our return on invested capital.
3.
We have an appropriate balance of pay between short-term and long-term objectives.
4.
Our Chief Executive Officer, Chief Financial Officer and General Counsel are incentivized to act in the best long-term interests of the Trust through stock ownership guidelines.
5.
We have no perquisites for our named executive officers that are not widely available to other employees other than as described in the CD&A and the “Potential Payments on Termination of Employment andChange-in Control” section above.
We are requesting your advisoryThe Board strongly endorses the Trust’s executive compensation program and non-binding approvalrecommends that you vote in favor of the compensation of our named executive officers for 2015 as disclosed in the CD&A, the Summary Compensation Table, the supplemental tablesthis proposal and the disclosure narratives accompanying these sections of this proxy statement. This proposal allows our shareholders to express their opinions regarding the decisions made by the Compensation Committee on the annual compensation to the named executive officers for 2015; however, because the vote on this proposal is advisory in nature, it will not affect any compensation already paid or awarded to any named executive officer for 2015 and will not be binding on the Compensation Committee, the Board or the Trust. The Board and our Compensation Committee value the opinions of our shareholders and will review the results of this vote and take them into consideration in addressing future compensation policies and decisions.following resolution:
Our shareholders have the opportunity at our Annual Meeting to vote, in person or by proxy, on the following:
RESOLVED, that the shareholders of the Trust hereby approve, on an advisory basis, the compensation of our named executive officers as described in the Compensation Discussion and Analysis, the Summary Compensation Table, the supplemental tables and the narrative disclosures accompanying these materials as required by Item 402 of RegulationS-K.
The affirmative vote of a majority of votes cast at the Annual Meeting, in person or by proxy, is required to approve, on an advisory basis, this proposal. If you are a “registered” shareholder who elects to receive materials by mail and you sign and return but fail to give any voting instructions on your proxy card on this matter, the
proxies identified on the proxy card will vote FOR this proposal. An “abstention” or broker “non-vote”“non-vote” will have no effect on the outcome of the vote on this proposal.
PROPOSAL 4—ADVISORY VOTE ON THE BOARDFREQUENCY OF TRUSTEES UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR VOTING ON
NAMED EXECUTIVE OFFICERS AS DESCRIBED IN THEOFFICER COMPENSATION DISCUSSION AND ANALYSIS, THE SUMMARY COMPENSATION TABLE, THE SUPPLEMENTAL TABLES AND NARRATIVE DISCLOSURES ACCOMPANYING THESE SECTIONS.
You are being asked to elect, on an advisory,non-binding basis, how frequently we should conduct anon-binding shareholder advisory vote on the compensation of our named executive officers. You can choose to hold that vote every one, two or three years or you can abstain from voting on this proposal. At our 2011 annual meeting, 85% of the votes cast voted in favor of holding the vote annually. The Board recommends that shareholders approve an annual vote.
The Board recommends that votes be held ANNUALLY.
Please note that when casting a vote on this proposal, you will not be voting to approve or disapprove the Board of Trustees’ recommendation and even though this vote is not binding on the Committee, the Board and the Committee value the opinions of our shareholders and will review the results of this vote and take them into consideration in determining how often to conduct the shareholder vote on the compensation of our named executive officers.
If you are a “registered” shareholder and fail to give any instructions on your proxy card on this matter, the proxies identified on the proxy card will vote FOR the annual option for this proposal. An “abstention” or broker“non-vote” will have no effect on the outcome of the vote on this proposal.
EQUITY COMPENSATION PLAN INFORMATION
The following table provides information as of December 31, 20152016 regarding our equity compensation plans, all of which were approved by our shareholders.
| Plan Category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) (a) | Weighted average exercise price of outstanding options, warrants and rights (b) | Number of securities (c) | Number of securities to be issued upon exercise of outstanding options, warrants and rights (1) (a) | Weighted average exercise price of outstanding options, warrants and rights (b) | Number of securities (c) | ||||||||||||||||||
Equity compensation plans approved by security holders | 313,802 | $ | 60.93 | 1,865,984 | 259,119 | $ | 56.66 | 1,712,534 | ||||||||||||||||
Equity compensation plans not approved by security holders | — | — | — | — | — | — | ||||||||||||||||||
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Total | 313,802 | $ | 60.93 | 1,865,984 | 259,119 | $ | 56.66 | 1,712,534 | ||||||||||||||||
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| (1) | Consists |
| (2) | Consists entirely of Shares authorized for issuance under our 2010 Plan. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our Code of Business Conduct requires that our Trustees and all of our employees deal with the Trust on an arms-length basis in any related party transaction. All transactions between us and any of our Trustees, named executive officers or other vice presidents, or between us and any entity in which any of our Trustees, named executive officers or other vice presidents is an officer or director or has an ownership interest, must be approved in advance by the Audit Committee. Audit Committee approval is not required for us to enter into a lease with an entity in which any of our Trustees is a director, employee or owner of a company so long as the lease is entered into in the ordinary course of ours and the tenant’s businesses and is negotiated at arms-length and on market terms.
None of our named executive officers had any indebtedness to the Trust as of March 18, 201614, 2017 or at any time during 2015.2016.
Mr. Thompson serves as the President and Chairman of the Board of Directors of Thompson Hospitality Corporation. Thompson Hospitality Corporation (“THC”). During 2016 THC and its wholly owned subsidiaries (collectively, “THC”) leaseleased from us approximately 17,40023,900 square feet in threefour of the Trust’s properties under leases that were negotiated prior to Mr. Thompson’s joining the Board in July 2007. Theseproperties. All of those leases were negotiated at arms-lengtharms’ length and reflected market conditions at the time each lease was signed.time. In June 2012 we entered into a fourth lease with
THC for 6,500 square feet of space (“New Location”) because we believed that THC’s American Tap Room restaurant concept would be a successful fit forNovember 2016, at the market. The termsrequest of the lease wereTrust, the Trust and THC negotiated at arms-length and reflected market conditions consistent withan early termination of one of those leases for similar uses at that time.was scheduled to expire in 2017 which resulted in a termination fee paid to the Trust of $300,000. The fourthree remaining leases are scheduled to expire on August 31, 2017, June 30, 2020, December 31, 2021 and September 30, 2023. We anticipate receiving approximately $1.3$1 million in rent and other related charges in 20162017 from the fourthree leased locations. In addition to the leases, one of our wholly owned subsidiaries entered into a partnership with THC to operate the restaurant at one of the New Location.properties. We own 80% of the partnership and THC owns the remaining 20% of the partnership and acts as the manager of the restaurant. The terms and structure of the partnership with THC were negotiated at arms-length and reflect terms, structures and conditions consistent with other restaurant investments we have made and include market management and license fees payable to THC. The Board determined that Mr. Thompson met all independence requirements established by the NYSE, the SEC, the Trust’s Corporate Governance Guidelines and other applicable rules and regulations during his service as a Trustee during 20152016 as described in the “Independence of Trustees” section above.
Mr. Faeder serves as the managing member of Thethe Kensington of Falls Church, LLC which(“LLC”). The LLC entered into aone-year lease with us in January 2016 for approximately 3,003 square feet in one of our properties. The lease was negotiated at arms-length and reflects market conditions. We anticipate receivingreceived approximately $150,000$130,000 in rent and other related charges in 2016 from this lease.lease and the lease expired by its terms on January 31, 2017.
Employment andchange-in-control arrangements between the Trust and the named executive officers are described in the “Potential Payments on Termination of Employment andChange-in-Control” section above.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Our Trustees, executive officers and any persons who beneficially own more than 10% of our Shares are required by Section 16(a) of the Exchange Act to file reports of initial ownership and changes of ownership of our Shares with the SEC and with the NYSE. To our best knowledge, based solely on review of copies of such reports furnished to us and written representations that no other reports were required, the required filings of all such Trustees and executive officers were filed timely during 2015.
SOLICITATION OF PROXIES, SHAREHOLDER PROPOSALS
AND OTHER MATTERS
ProposalsThe Board of shareholders intendedTrustees of Trust is soliciting your proxy to vote on matters that will be presented at the 2017our Annual Meeting and the cost of Shareholders, including nominations for persons for electionthis solicitation of proxies will be borne by us. We may solicit proxies through the mail, Internet, in person and by telephone or facsimile, and may request brokerage houses and other custodians, nominees and fiduciaries to forward soliciting materials to the Boardbeneficial owners of Trustees, must be received by us no later than November 25, 2016 to be consideredShares and reimburse them for inclusion in ourtheir reasonable expenses. We may also hire a proxy statement and form of proxy relating to such meeting.
solicitation firm at a standard industry compensation rate. The Trustees know of no other business to be presented at the Annual Meeting. If other matters properly come before the meeting, the persons named as proxies will vote on them in their discretion.
Proposals of shareholders intended to be presented at the 2018 Annual Meeting of Shareholders, including nominations for persons for election to the Board of Trustees, must be received by us no later than November 23, 2017 to be considered for inclusion in our proxy statement and form of proxy relating to such meeting.
You are urged to vote either by telephone (1-800-PROXIES(1-800-PROXIES or1-800-776-9437) or on the Internet (www.voteproxy.com) by following the instructions on your Notice. For those of you who have elected email delivery, please follow the instructions for voting provided in the email. If you elect to receive your proxy materials by mail, please make sure to complete, sign, date and return your proxy card promptly to make certain your Shares will be voted at the Annual Meeting.
For the Trustees,
For the Trustees, |
|
Dawn M. Becker |
Executive Vice President—General |
Counsel and Secretary |
YOUR PROXY IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
PLEASE SUBMIT IT TODAY.
Funds From Operations
Funds from operations (“FFO”) is a supplementalnon-GAAP financial measure of real estate companies’ operating performance. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as follows: net income, computed in accordance with U.S. GAAP, plus real estate related depreciation and amortization and excluding extraordinary items and gains and losses on the sale of real estate, and impairment write-downs of depreciable real estate. We compute FFO in accordance with the NAREIT definition, and we have historically reported our FFO available for common shareholders in addition to our net income and net cash provided by operating activities. It should be noted that FFO:
does not represent cash flows from operating activities in accordance with GAAP (which, unlike FFO, generally reflects all cash effects of transactions and other events in the determination of net income);
should not be considered an alternative to net income as an indication of our performance; and
is not necessarily indicative of cash flow as a measure of liquidity or ability to fund cash needs, including the payment of dividends.
We consider FFO available for common shareholders a meaningful, additional measure of operating performance primarily because it excludes the assumption that the value of the real estate assets diminishes predictably over time, as implied by the historical cost convention of GAAP and the recording of depreciation. We use FFO primarily as one of several means of assessing our operating performance in comparison with other REITs. Comparison of our presentation of FFO to similarly titled measures for other REITs may not necessarily be meaningful due to possible differences in the application of the NAREIT definition used by such REITs.
An increase or decrease in FFO available for common shareholders does not necessarily result in an increase or decrease in aggregate distributions because our Board of Trustees is not required to increase distributions on a quarterly basis unless necessary for us to maintain REIT status. However, we must distribute at least 90% of our taxable income to remain qualified as a REIT. Therefore, a significant increase in FFO will generally require an increase in distributions to shareholders although not necessarily on a proportionate basis.
The reconciliation of net income to FFO available for common shareholders is as follows:
| Year Ended December 31, | ||||||||||||
| 2016 | 2015 | 2014 | ||||||||||
| (In thousands, except per share data) | ||||||||||||
Net income | $ | 258,883 | $ | 218,424 | $ | 172,289 | ||||||
Net income attributable to noncontrolling interests | (8,973 | ) | (8,205 | ) | (7,754 | ) | ||||||
Gain on sale of real estate and change in control of interests, net | (31,133 | ) | (28,330 | ) | (4,401 | ) | ||||||
Depreciation and amortization of real estate assets | 169,198 | 154,232 | 154,060 | |||||||||
Amortization of initial direct costs of leases | 16,875 | 15,026 | 12,391 | |||||||||
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Funds from operations | 404,850 | 351,147 | 326,585 | |||||||||
Dividends on preferred shares | (541 | ) | (541 | ) | (541 | ) | ||||||
Income attributable to operating partnership units | 3,145 | 3,398 | 3,027 | |||||||||
Income attributable to unvested shares | (1,095 | ) | (1,147 | ) | (1,474 | ) | ||||||
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Funds from operations available for common shareholders (1) | $ | 406,359 | $ | 352,857 | $ | 327,597 | ||||||
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Weighted average number of common shares, diluted (2) | 71,869 | 69,920 | 68,410 | |||||||||
Funds from operations available for common shareholders, per diluted share (1) | $ | 5.65 | $ | 5.05 | $ | 4.79 | ||||||
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| (1) | If the $19.1 million and the $10.5 million early extinguishment of debt charge incurred in 2015 and 2014, respectively, was excluded, our FFO available for common shareholders for 2015 and 2014 would have |
| been $371.9 million and $338.1 million, respectively, and FFO available for common shareholders, per diluted share would have been $5.32 and $4.94, respectively. |
| (2) | The weighted average common shares used to compute FFO per diluted common share includes operating partnership units that were excluded from the computation of diluted EPS. Conversion of these operating partnership units is dilutive in the computation of FFO per diluted common share but is anti-dilutive for the computation of diluted EPS for the periods presented. |
0
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FEDERAL REALTY INVESTMENT TRUST
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned, a shareholder of Federal Realty Investment Trust (the “Trust”), hereby constitutes and appoints DAWN M. BECKER and JAMES M. TAYLOR, JR.,DANIEL GUGLIELMONE, or either of them, as the true and lawful attorneys and proxies of the undersigned, with full power of substitution in each of them, for and in the name of the undersigned, to vote and otherwise act at the Annual Meeting of Shareholders of the Trust to be held at AMP by Strathmore, 11810 Grand Park Avenue, North Bethesda, Maryland on Wednesday, May 4, 20163, 2017 at 10:00 a.m., or at any postponement or adjournment thereof, with respect to all of the Common Shares of Beneficial Interest of the Trust which the undersigned would be entitled to vote, with all the powers the undersigned would possess if personally present, on the following matters.
The undersigned hereby ratifies and confirms all that the aforesaid attorneys and proxies may do hereunder.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting and of the accompanying Proxy Statement and revokes any proxy previously given with respect to the Annual Meeting. (Continued
(Continued and to be signed on the reverse side) 1.1 14475
| ∎ 1.1 | 14475 ∎ |
ANNUAL MEETING OF SHAREHOLDERS OF
FEDERAL REALTY INVESTMENT TRUST
May 4, 2016 3, 2017
GO GREEN
e-Consent makes it easy to go paperless. Withe-Consent, you can quickly access your proxy
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paper waste. Enroll today via www.amstock.comwww.astfinancial.com to enjoy online access.
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: MATERIAL:
The Notice of Annual Meeting of Shareholders, Proxy Statement,
Form of Proxy Card and Annual Report/Form10-K Wrap are available at:
http://ir.federalrealty.com/phoenix.zhtml?c=84166&p=proxy
Please sign, date and mail
your proxy card in the
envelope provided as soon
as possible.
¯ Please detach along perforated line and mail in the envelope provided. 20730300000000000000 9 050416 ¯
∎ 00003333333303040000 0 050317
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED “FOR” ALL NOMINEES IN PROPOSAL 1, AND “FOR” PLEASE PROPOSALS SIGN, 2 AND DATE 3, AND FOR “1 YEAR” ON PROPOSAL 4 AND THE RETURN PROXIES WILL PROMPTLY VOTE IN THEIR IN SOLE THE JUDGMENT ENCLOSED UPON ANY ENVELOPE. OTHER MATTERS PLEASE PROPERLY MARK COMING YOUR BEFORE VOTE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR ANY OR POSTPONEMENT BLACK INK OR AS ADJOURNMENT SHOWN HERE THEREOF. x 1. To elect the following Trustees as set forth in the accompanying Proxy Statement:t. NOMINEES: FOR ALL NOMINEES O O Jon David E. W. Bortz Faeder WITHHOLD AUTHORITY O Kristin Gamble FOR ALL NOMINEES O Gail P. Steinel O Warren M. Thompson FOR (See ALL instructions EXCEPT below) O Joseph S. Vassalluzzo O Donald C. Wood INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: To indicate changes change your to the the new address registered address on name(s) your in the account, address on the please account space check above. may not the Please be box submitted at note right and that via this method. Signature of Shareholder Date: Signature of Shareholder Date: Note: Please full title sign as such. exactly If the as signer your name is a corporation, or names appear please on sign this full Proxy. corporate When name shares by duly are authorized held jointly, officer, each holder giving should full title sign. as such. When If signer signing is a as partnership, executor, administrator, please sign in attorney, partnership trustee name or by guardian, authorized please person. give 2. To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016. 3. To hold an advisory vote approving the compensation of our named executive officers. 4. To consider and act upon any other matters properly coming before the meeting or any postponement or adjournment thereof. ELECTRONIC ACCESS TO FUTURE DOCUMENTS If you would like to receive future shareholder communications over the Internet exclusively, and no longer receive any material by mail please visit http://www.amstock.com.☒
ELECTRONIC ACCESS TO FUTURE DOCUMENTS If you would like to receive future shareholder communications over the Internet exclusively, and no longer receive any material by mail please visit http://www.astfinancial.com. Click on Shareholder Account Access to enroll. Please enter | 1. | To elect the following Trustees as set forth in the accompanying Proxy Statement: | ||||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||||
Jon E. Bortz | ☐ | ☐ | ☐ | |||||||||||
David W. Faeder | ☐ | ☐ | ☐ | |||||||||||
Elizabeth I. Holland | ☐ | ☐ | ☐ | |||||||||||
Gail P. Steinel | ☐ | ☐ | ☐ | |||||||||||
Warren M. Thompson | ☐ | ☐ | ☐ | |||||||||||
Joseph S. Vassalluzzo | ☐ | ☐ | ☐ | |||||||||||
Donald C. Wood | ☐ | ☐ | ☐ | |||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||||
| 2. | To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017. | ☐ | ☐ | ☐ | ||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||||
3. | To hold an advisory vote approving the compensation of our named executive officers. | ☐ | ☐ | ☐ | ||||||||||
1 year | 2 years | 3 years | ABSTAIN | |||||||||||
| 4. | To hold an advisory vote on the frequency of holding future votes on the compensation of our named executive officers. | ☐ | ☐ | ☐ | ☐ | |||||||||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | ☐ | 5. | To consider and act upon any other matters properly coming before the meeting or any postponement or adjournment thereof. | |||||||||||
| Signature of Shareholder | Date: | Signature of Shareholder | Date: | |||||||||||
| ∎ | Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. | ∎ |
ANNUAL MEETING OF SHAREHOLDERS OF
FEDERAL ANNUAL REALTY MEETING OF INVESTMENT SHAREHOLDERS OF TRUST
May 4, 2016 PROXY VOTING INSTRUCTIONS INTERNET—Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. TELEPHONE—3, 2017
PROXY VOTING INSTRUCTIONS |
| INTERNET -Access “www.voteproxy.com” and follow theon-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. |
TELEPHONE -Call toll-free1-800-PROXIES(1-800-776-9437) in the United States or1-718-921-8500from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call.
Vote online/phone until 11:59 PM?EDT?PM EDT the day before the meeting. COMPANY NUMBER MAIL—
MAIL -Sign, date and mail your proxy card in the envelope provided as soon as possible. IN?PERSON—
IN PERSON - You may vote your shares in person by attending ACCOUNT NUMBER the Annual Meeting.
GO GREEN—GREEN -e-Consent makes it easy to go paperless. Withe-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.amstock.comwww.astfinancial.com to enjoy online access. NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL:
COMPANY NUMBER | ||
ACCOUNT NUMBER | ||
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Annual Meeting of Shareholders, Proxy Statement, |
¯ Please detach along perforated line and mail in the envelope providedIF you are not voting via telephone or the Internet. 20730300000000000000 9 050416 ¯
∎ 00003333333303040000 0 050317
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED “FOR” ALL NOMINEES IN PROPOSAL 1, “FOR” PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☒ | ||||||||||||||
ELECTRONIC ACCESS TO FUTURE DOCUMENTS If you would like to receive future shareholder communications over the Internet exclusively, and no longer receive any material by mail please visit http://www.astfinancial.com. Click on Shareholder Account Access to enroll. Please enter your account number and tax identification number to log in, then selectReceive Company Mailings viaE-Mailand provide youre-mail address. | 1. | To elect the following Trustees as set forth in the accompanying Proxy Statement: | ||||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||||
Jon E. Bortz | ☐ | ☐ | ☐ | |||||||||||
David W. Faeder | ☐ | ☐ | ☐ | |||||||||||
Elizabeth I. Holland | ☐ | ☐ | ☐ | |||||||||||
Gail P. Steinel | ☐ | ☐ | ☐ | |||||||||||
Warren M. Thompson | ☐ | ☐ | ☐ | |||||||||||
Joseph S. Vassalluzzo | ☐ | ☐ | ☐ | |||||||||||
Donald C. Wood | ☐ | ☐ | ☐ | |||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||||
| 2. | To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017. | ☐ | ☐ | ☐ | ||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||||
3. | To hold an advisory vote approving the compensation of our named executive officers. | ☐ | ☐ | ☐ | ||||||||||
1 year | 2 years | 3 years | ABSTAIN | |||||||||||
| 4. | To hold an advisory vote on the frequency of holding future votes on the compensation of our named executive officers. | ☐ | ☐ | ☐ | ☐ | |||||||||
To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. | ☐ | 5. | To consider and act upon any other matters properly coming before the meeting or any postponement or adjournment thereof. | |||||||||||
| Signature of Shareholder | Date: | Signature of Shareholder | Date: | |||||||||||
| ∎ | Note: | Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person. | ∎ |
Important Notice of Availability of Proxy Materials for the Shareholder Meeting of
FEDERAL REALTY INVESTMENT TRUST
To Be Held On:
May 3, AND AND THE RETURN PROXIES WILL PROMPTLY VOTE IN THEIR IN SOLE THE JUDGMENT ENCLOSED UPON ANY ENVELOPE. OTHER MATTERS PLEASE PROPERLY MARK COMING YOUR BEFORE VOTE THE MEETING IN BLUE OR ANY OR POSTPONEMENT BLACK INK OR AS ADJOURNMENT SHOWN HERE THEREOF. x Statement:t. NOMINEES: FOR ALL NOMINEES O O David Jon E. W. Bortz Faeder WITHHOLD AUTHORITY O Kristin Gamble FOR ALL NOMINEES O Gail P. Steinel O Warren M. Thompson FOR (See ALL instructions EXCEPT below) O Joseph S. Vassalluzzo O Donald C. Wood INSTRUCTIONS: To withhold authority2017 at 10:00 a.m.
at AMP by Strathmore, 11810 Grand Park Avenue, North Bethesda, Maryland
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This communication presents only an overview of the more complete proxy materials that are available to vote for any individual nominee(s), mark “FOR ALL EXCEPT”you on the Internet. We encourage you to access and fillreview all of the important information contained in the circle next to each nominee you wish to withhold, as shown here: JOHN SMITH 1234 MAIN STREET APT. 203 NEW YORK, NY 10038 To indicate changes change your to the the new address registered address on name(s) your in the account, address on the please account space check above. may not the Please be box submitted at note right and that via this method. 2. To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016. 3. To hold an advisory vote approving the compensation of our named executive officers. 4. To consider and act upon any other matters properly comingproxy materials before the meeting or any postponement or adjournment thereof. ELECTRONIC ACCESS TO FUTURE DOCUMENTS voting.
If you would likewant to receive future shareholder communications overa paper ore-mail copy of the Internet exclusively, andproxy materials you must request one. There is no longer receive any material by mailcharge to you for requesting a copy. To facilitate timely delivery please make the request as instructed below before 04/21/17.
Please visit http://www.amstock.com. Click on Shareholder Account Access to enroll. Please enter your account number and tax identification number to log in, then select Receive Company Mailings via E-Mail and provide your e-mail address. Signature of Shareholder Date: Signature of Shareholder Date: Note: Please full title sign as such. exactly Ifir.federalrealty.com/phoenix.zhtml?c=84166&p=proxy, where the as signer your name is a corporation, or names appear please on sign this full Proxy. corporate When name shares by dulyfollowing materials are authorized held jointly, officer, each holder giving should full title sign. as such. When If signer signing is a as partnership, executor, administrator, please sign in attorney, partnership trustee name or by guardian, authorized please person. giveavailable for view:
| •Notice of Annual Meeting of Shareholders | ||
| •Proxy Statement | ||
| •Form of Proxy Card | ||
| •Annual Report/Form10-K Wrap |
| TO REQUEST MATERIAL: | TELEPHONE:888-Proxy-NA(888-776-9962)718-921-8562 (for international callers) | |||
| E-MAIL: info@amstock.com | ||||
| WEBSITE: https://us.astfinancial.com/proxyservices/requestmaterials.asp | ||||
| TO VOTE: |  | ONLINE:To access your online proxy card, please visitwww.voteproxy.comand follow theon-screen instructions or scan the QR code with your smartphone. You may enter your voting instructions at www.voteproxy.com up until 11:59 PM Eastern Time the day before thecut-off or meeting date. | ||
| IN PERSON:You may vote your shares in person by attending the Annual Meeting. | ||||
| TELEPHONE:To vote by telephone, please visitwww.voteproxy.comto view the materials and to obtain the toll free number to call. | ||||
| MAIL:You may request a card by following the instructions above. | ||||
| Please note that you cannot use this notice to vote by mail. | 1. To elect the following Trustees as set forth in the accompanying Proxy Statement: Jon E. Bortz David W. Faeder Elizabeth I. Holland Gail P. Steinel Warren M. Thompson Joseph S. Vassalluzzo Donald C. Wood 2. To ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2017. 3. To hold an advisory vote approving the compensation of our named executive officers. 4. To hold an advisory vote on the frequency of holding future votes on the compensation of our named executive officers. 5. To consider and act upon any other matters properly coming before the meeting or any postponement or adjournment thereof. |
